SF 2869

2nd Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to the financing and operation of state and local government; making
policy, technical, administrative, enforcement, collection, refund, and other
changes to income, franchise, property, sales and use, motor vehicle sales,
cigarette and tobacco products, gasoline, insurance premiums, aggregate
removal, mortgage, deed, and production taxes, and other taxes and tax-related
provisions; providing for aids to local governments; providing a mortgage
registry tax exemption; providing income tax subtractions; modifying taxation of
foreign operating corporations; providing sales tax exemptions; modifying and
authorizing local government taxes; authorizing and modifying levies, property
valuation procedures, homestead provisions, property tax classes, class rates, and
tax bases; changing and providing property tax exemptions and credits; creating
Surplus Lines Association of Minnesota; changing JOBZ, border city allocation,
tax increment financing, and economic development powers and incentives;
changing provisions relating to fiscal disparities, state debt collection procedures;
authorizing utility rate adjustments; changing distributions of production tax
proceeds; providing for sale of forest lands; providing for higher education grants
in the taconite assistance area; authorizing issuance of obligations; modifying
a taxing district; changing and imposing powers, duties, and requirements on
certain local governments and authorities and state departments or agencies;
authorizing local governments to provide certain development incentives;
providing rules for operation of certain tax increment financing districts;
requiring studies; appropriating money; amending Minnesota Statutes 2006,
sections 13.51, subdivision 3; 13.585, subdivision 5; 16D.02, subdivisions
3, 6; 16D.04, subdivision 2, as amended; 60A.196; 116J.993, subdivision 3;
116J.994, subdivisions 2, 5; 126C.01, subdivision 3; 126C.41, subdivision
2; 168.012, subdivision 1; 216B.1646; 270A.08, subdivision 1; 270C.33,
subdivision 5; 270C.56, subdivision 1, as amended; 272.02, subdivisions 13, 20,
21, 27, 31, 38, 49, 55, 82, 84, by adding a subdivision; 272.03, subdivisions 2,
3, by adding a subdivision; 273.11, subdivision 8; 273.111, subdivisions 3, as
amended, 6, 8, 14, by adding subdivisions; 273.112, subdivision 3; 273.124,
subdivisions 6, 11, 13, as amended, 21; 273.128, subdivision 1, as amended;
273.13, subdivisions 22, as amended, 23, as amended, 24, 25, as amended, 33;
273.19, subdivision 1; 274.014, subdivision 3; 275.025, subdivisions 1, 2, 4;
275.065, by adding a subdivision; 276.04, subdivision 2, as amended; 278.05,
subdivision 6, as amended; 280.39, as amended; 287.04; 287.20, subdivisions
3a, 9, by adding a subdivision; 289A.18, subdivision 1, as amended; 289A.20,
subdivision 4, as amended; 289A.55, by adding a subdivision; 289A.60,
subdivision 15, as amended, by adding a subdivision; 290.01, subdivisions 6b,
19c, as amended, 19d, as amended; 290.06, by adding subdivisions; 290.068,
subdivision 3; 290.07, subdivision 1; 290.191, subdivisions 5, 6; 290.21,
subdivision 4; 290.34, by adding a subdivision; 290.92, subdivisions 1, 26;
290A.10; 290B.04, subdivision 1; 295.50, subdivision 4; 295.52, subdivision 4,
as amended; 295.53, subdivision 4a; 296A.01, subdivisions 44, 45; 296A.03,
subdivision 2; 296A.07, subdivision 4; 296A.08, subdivision 3; 296A.16,
subdivision 2; 297A.61, subdivisions 22, 29; 297A.665, as amended; 297A.67,
subdivisions 7, as amended, 28; 297A.71, by adding subdivisions; 297A.75;
297A.995, subdivision 10, by adding subdivisions; 297B.01, subdivision 7;
297B.03; 297F.01, subdivision 8; 297F.09, subdivision 10, as amended; 297F.21,
subdivision 1; 297G.01, subdivision 9; 297G.09, subdivision 9, as amended;
297H.09; 297I.05, subdivision 12; 298.22, subdivision 5a, as added; 298.24,
subdivision 1, as amended; 298.28, subdivisions 4, as amended, 9a, 9d, as added;
298.2961, subdivision 4, as amended; 298.75, subdivisions 1, 2, 6, 7; 365.243, by
adding a subdivision; 365A.095; 383A.80, subdivision 4; 383A.81, subdivisions
1, 2; 383B.80, subdivision 4; 383B.81, subdivisions 1, 2; 383E.20; 469.040,
subdivision 4; 469.174, subdivision 10b; 469.177, subdivision 1c; 469.312,
by adding a subdivision; 469.319; 473.39, by adding a subdivision; 473.446,
subdivisions 2, 8; 473F.08, by adding a subdivision; 477A.011, subdivisions
34, 36, as amended, by adding subdivisions; 477A.0124, subdivisions 4, 5, by
adding a subdivision; 477A.013, subdivisions 1, 8, as amended, 9, as amended,
by adding a subdivision; 477A.03, subdivisions 2a, 2b, by adding subdivisions;
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; 273.1393;
290.01, subdivision 19b, as amended; 297A.70, subdivision 3; 298.227; Laws
1991, chapter 291, article 8, section 27, subdivisions 3, as amended, 4, as
amended; Laws 1995, chapter 264, article 5, section 46, subdivision 2; Laws
1998, chapter 389, article 8, section 45, subdivision 3; Laws 1999, chapter
243, article 4, section 18, subdivisions 1, 3, 4; Laws 2003, chapter 127, article
10, section 31, subdivision 1; Laws 2006, chapter 259, article 10, section 14,
subdivision 1; Laws 2008, chapter 154, article 2, section 27; article 8, section 14;
article 9, sections 23; 24; proposing coding for new law in Minnesota Statutes,
chapters 60A; 116J; 273; 383C; 383D; 383E; 469; proposing coding for new
law as Minnesota Statutes, chapter 290D; repealing Minnesota Statutes 2006,
sections 272.027, subdivision 3; 275.025, subdivision 3; 279.01, subdivision
4; 473.4461; 477A.014, subdivision 5; Minnesota Statutes 2007 Supplement,
section 477A.014, subdivision 4; Laws 2005, First Special Session chapter 3,
article 5, section 24; Minnesota Rules, parts 8031.0100, subpart 3; 8093.2100.

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

ARTICLE 1

AIDS TO LOCAL GOVERNMENTS

Section 1.

Minnesota Statutes 2006, section 477A.011, subdivision 34, is amended to
read:

Subd. 34.

City revenue need.

(a) For a city with a population equal to or greater
than 2,500, "city revenue need" is the sum of (1) 5.0734098 times the pre-1940 housing
percentage; plus (2) 19.141678 times the population decline percentage; plus (3)
2504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the metropolitan
area factor; minus (6) 49.10638 times the household size. new text begin The city revenue need under
this paragraph may not be less than 290.
new text end

(b) For a city with a population less than 2,500, "city revenue need" is the sum of
(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
1.206 times the transformed population; minus (5) 62.772.

(c) For a city with a population of 2,500 or more and a population in one of the most
recently available five years that was less than 2,500, "city revenue need" is the sum of (1)
its city revenue need calculated under paragraph (a) multiplied by its transition factor;
plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied
by the difference between one and its transition factor. For purposes of this paragraph, a
city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's
population estimate has been 2,500 or more. This provision only applies for aids payable
in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It
applies to any city for aids payable in 2009 and thereafter.

(d) The city revenue need cannot be less than zero.

(e) For calendar year 2005 and subsequent years, the city revenue need for a city,
as determined in paragraphs (a) to (d), is multiplied by the ratio of the annual implicit
price deflator for government consumption expenditures and gross investment for state
and local governments as prepared by the United States Department of Commerce, for
the most recently available year to the 2003 implicit price deflator for state and local
government purchases.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2006, section 477A.011, subdivision 36, as amended by
Laws 2008, chapter 154, article 1, section 1, is amended to read:

Subd. 36.

City aid base.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:

(i) the city had a population in 1996 of at least 50,000;

(ii) its population had increased by at least 40 percent in the ten-year period ending
in 1996; and

(iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

deleted text begin (2) $2,500,000.
deleted text end

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

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

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

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

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

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

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

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

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

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

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

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

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

deleted text begin (s) The city aid base for a city with a population less than 5,000 is increased in
2006 and thereafter and the minimum and maximum amount of total aid it may receive
under this section is also increased in calendar year 2006 only by an amount equal to
$6 multiplied by its population.
deleted text end

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

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

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

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

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

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

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

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

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

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

new text begin (u) The city aid base for a city is increased by $135,000 in 2009 only and the
minimum and maximum total amount of aid it may receive under section 477A.013,
subdivision 9, is also increased by $135,000 in calendar year 2009 only, provided that:
new text end

new text begin (1) the city is located in the metropolitan area and its 2006 population is less than
2,500;
new text end

new text begin (2) at least 25 percent of its housing was built before 1940 and at least 50 percent of
its housing is rental housing, according to the 2000 United States Census;
new text end

new text begin (3) the median household income in the city is 80 percent or less than the median
household income in the metropolitan area and 50 percent or less than the median
household income for all cities contiguous to that city, according to the 2000 United
States Census; and
new text end

new text begin (4) at least 60 percent of the land and water acres in the city are classified as
tax-exempt property, according to its 2008 planning document.
new text end

new text begin (v) The city aid base is increased by $14,700 in calendar year 2009 only and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
increased by $14,700 in calendar year 2009 only, provided that:
new text end

new text begin (1) the city is located in the seven-county metropolitan area;
new text end

new text begin (2) its population in 2006 is less than 200; and
new text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 477A.011, is amended by adding a
subdivision to read:

new text begin Subd. 41. new text end

new text begin Small city aid base. new text end

new text begin "Small city aid base" for a city with a population
as defined in subdivision 3, less than 5,000 is equal to $12 multiplied by its population.
Aid under this subdivision must be calculated using the greater of a city's highest federal
census population since 1940 or its current population estimate. The small city aid base
for all other cities is equal to zero.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2006, section 477A.011, is amended by adding a
subdivision to read:

new text begin Subd. 42. new text end

new text begin City jobs base. new text end

new text begin (a) (1) "City jobs base" for a city that receives disparity
reduction credits under section 273.1398, subdivision 4, and has a population of 10,000
or more, is equal to the product of (i) $75, (ii) the number of jobs per capita in the city,
and (iii) its population. (2) For all other cities with a population of 5,000 or more the
city jobs base is equal to the product of (i) $55, (ii) the number of jobs per capita in the
city, and (iii) its population. (3) For cities with a population less than 5,000, the city
jobs base is equal to zero.
new text end

new text begin (b) A city with a population greater than 15,000 but less than 30,000 that is located
outside of the metropolitan area shall have its city jobs base increased by $100,000. A city
with a population greater than 30,000 that is located outside of the metropolitan area shall
have its city jobs base increased by $350,000.
new text end

new text begin (c) No city's city jobs base may exceed $12,000,000.
new text end

new text begin (d) For purposes of this subdivision, "jobs per capita in the city" means (1) the
average annual number of employees in the city based on the data from the Quarterly
Census of Employment and Wages, as reported by the Department of Employment and
Economic Development, for the most recent calendar year available as of June 30 of
the year in which the aid is calculated, divided by (2) the city's population for the same
calendar year as the employment data.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2006, section 477A.0124, subdivision 4, is amended to read:

Subd. 4.

County tax-base equalization aid.

(a) For 2006 and subsequent years,
the money appropriated to county tax-base equalization aid each calendar year, after the
payment under paragraph (f), shall be apportioned among the counties according to each
county's tax-base equalization aid factor.

(b) A county's tax-base equalization aid factor is equal to the amount by which (i)
deleted text begin $185 deleted text end new text begin $228 new text end times the county's population, exceeds (ii) percent of the county's
net tax capacity.

(c) In the case of a county with a population less than 10,000, the factor determined
in paragraph (b) shall be multiplied by a factor of three.

(d) In the case of a county with a population greater than or equal to 10,000, but less
than 12,500, the factor determined in paragraph (b) shall be multiplied by a factor of two.

(e) In the case of a county with a population greater than 500,000, the factor
determined in paragraph (b) shall be multiplied by a factor of 0.25.

(f) Before the money appropriated to county base equalization aid is apportioned
among the counties as provided in paragraph (a), an amount up to $73,259 is allocated
annually to Anoka County and up to $59,664 is annually allocated to Washington County
for the county to pay postretirement costs of health insurance premiums for court
employees. The allocation under this paragraph is in addition to the allocations under
paragraphs (a) to (e).

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read:

Subd. 5.

County transition aid.

deleted text begin (a) deleted text end For deleted text begin 2005 deleted text end new text begin 2009 and subsequent years new text end , a county
is eligible for transition aid equal to deleted text begin the amount, if any, by which:
deleted text end

deleted text begin (1) the difference between:
deleted text end

deleted text begin (i) the aid the county received under subdivision 1 in 2004, divided by the total aid
paid to all counties under subdivision 1, multiplied by $205,000,000; and
deleted text end

deleted text begin (ii) the amount of aid the county is certified to receive in 2005 under subdivisions
3 and 4;
deleted text end

deleted text begin exceeds:
deleted text end

deleted text begin (2) three percent of the county's adjusted net tax capacity.
deleted text end

deleted text begin A county's aid under this paragraph may not be less than zero.
deleted text end

deleted text begin (b) In 2006, a county is eligible to receive two-thirds of the transition aid it received
in 2005.
deleted text end

deleted text begin (c) In 2007 deleted text end deleted text begin , a county is eligible to receive deleted text end one-third of the transition aid it received
in 2005.

deleted text begin (d) No county shall receive aid under this subdivision after 2007.
deleted text end

Sec. 7.

Minnesota Statutes 2006, section 477A.0124, is amended by adding a
subdivision to read:

new text begin Subd. 6. new text end

new text begin Out-of-home placement aid. new text end

new text begin In calendar year 2009 only, $500,000 shall
be distributed to any county in which the percentage of households receiving food stamps
divided by its age-adjusted population is greater than five percent using data for county
program aid certified for aids payable in 2008. The aid must be used to meet the county's
cost of out-of-home placement programs.
new text end

Sec. 8.

Minnesota Statutes 2006, section 477A.013, subdivision 1, is amended to read:

Subdivision 1.

Towns.

In deleted text begin 2002, no deleted text end new text begin 2009 and subsequent years, each new text end town is eligible
for a distribution under this subdivision new text begin equal to the product of (i) its agricultural property
factor, (ii) its town area factor, (iii) its population factor, and (iv) 0.00225. As used in this
subdivision, the following terms have the meanings given them:
new text end

new text begin (1) "agricultural property factor" means the ratio of the adjusted net tax capacity of
agricultural property located in a town, divided by the adjusted net tax capacity of all other
property located in the town. The agricultural property factor cannot exceed eight;
new text end

new text begin (2) "agricultural property" means property classified under section 273.13, as
homestead and nonhomestead agricultural property, timber land, and noncommercial
seasonal recreational property;
new text end

new text begin (3) "town area factor" means the most recent estimate of total acreage, not to exceed
50,000 acres, located in the township available as of July 1 in the aid calculation year,
estimated or established by:
new text end

new text begin (i) the United States Bureau of the Census;
new text end

new text begin (ii) the State Land Management Information Center; or
new text end

new text begin (iii) the secretary of state; and
new text end

new text begin (4) "population factor" means the square root of the town's population.
new text end

new text begin If the sum of the aids payable to all towns under this subdivision exceeds the limit
under section 477A.03, subdivision 2c, the distribution to each town must be reduced
proportionately so that the total amount of aids distributed under this section does not
exceed the limit in section 477A.03, subdivision 2c new text end .

Sec. 9.

Minnesota Statutes 2006, section 477A.013, subdivision 8, as amended by
Laws 2008, chapter 154, article 1, section 2, is amended to read:

Subd. 8.

City formula aid.

In calendar year deleted text begin 2004 and subsequent years deleted text end new text begin 2009 new text end , the
formula aid for a city is equal to new text begin (1) the sum of (i) its city jobs base, (ii) its small city aid
base, and (iii) new text end the need increase percentage multiplied by the difference between deleted text begin (1) deleted text end new text begin (2) new text end
the city's revenue need multiplied by its population, and deleted text begin (2) the sum of deleted text end new text begin (3) new text end the city's net tax
capacity multiplied by the tax effort rate. new text begin For aids payable in 2009 only, a city's revenue
need, population, net tax capacity, maximum, minimum, and tax effort rate will be based
on the data available for calculating these factors for aids payable in 2008.
new text end

No city may have a formula aid amount less than zero. The need increase percentage
must be the same for all cities.

The applicable need increase percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions
4 and 5.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2006, section 477A.013, subdivision 9, as amended by
Laws 2008, chapter 154, article 1, section 3, is amended to read:

Subd. 9.

City aid distribution.

(a) In calendar year 2009, each city shall receive an
aid distribution equal to the sum of (1) the city formula aid under subdivision 8, new text begin and new text end (2) its
city aid base deleted text begin , and (3) one-half of the difference between its total aid in the previous year
under this subdivision and its city aid base in the previous year deleted text end .

(b) For aids payable in 2010 and thereafter, each city shall receive an aid distribution
equal to deleted text begin (1) the city aid formula under subdivision 8, (2) its city aid base, and (3) its
formula aid under subdivision 8 in the previous year, prior to any adjustments under this
subdivision deleted text end new text begin the amount it received under this section in the previous year, multiplied by
the inflation adjustment in section 477A.03, subdivision 5 new text end .

(c) For aids payable in 2009 deleted text begin and thereafter deleted text end , the total aid for any city shall not exceed
the sum of (1) deleted text begin ten deleted text end new text begin 75 new text end percent of the city's net levy for the year prior to the aid distribution
plus (2) its total aid in the previous year. For aids payable in 2009 new text begin , the total aid for any
city may not be less than its total aid under this section in the previous year. For aids
payable in 2010 new text end and thereafter, the total aid for any city with a population of 2,500 or
more may not deleted text begin be less than deleted text end new text begin decrease from new text end its total aid under this section in the previous
year deleted text begin minus the lesser of $15 multiplied by its population, or deleted text end new text begin by an amount greater than new text end ten
percent of its net levy in the year prior to the aid distribution.

(d) For aids payable in 2009 and thereafter, the total aid for a city with a population
less than 2,500 must not be less than the amount it was certified to receive in the previous
year minus deleted text begin the lesser of $15 multiplied by its population, or deleted text end five percent of its 2003
certified aid amount.

(e) If a city's net tax capacity used in calculating aid under this section has decreased
in any year by more than 25 percent from its net tax capacity in the previous year due to
property becoming tax-exempt Indian land, the city's maximum allowed aid increase
under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
resulting from the property becoming tax exempt.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2006, section 477A.013, is amended by adding a
subdivision to read:

new text begin Subd. 11. new text end

new text begin 2009 aid adjustment. new text end

new text begin If the limit under section 477A.03, subdivision
2a, for aids payable in 2009 is greater or less than $575,052,000, the aid paid to each
city under this section is equal to the sum of (1) the amount the city received under
subdivision 9 in calendar year 2008 and (2) an adjustment percentage multiplied by the
difference between what the city received in subdivision 9 in calendar year 2008 and its
aid in calendar year 2009 under subdivision 9. The "adjustment percentage," which is the
same for all cities, is the percentage necessary for the total aids under this section to equal
the amount available under section 477A.03, subdivision 2a, after the subtraction under
section 477A.014, subdivisions 4 and 5.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

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

Subd. 2a.

Cities.

For aids payable in deleted text begin 2004 deleted text end new text begin 2009 new text end , the total aids paid new text begin to cities new text end under
section 477A.013, deleted text begin subdivision 9 deleted text end new text begin subdivisions 9 and 11 new text end , are limited to deleted text begin $429,000,000. For
aids payable in 2005, the total aids paid under section 477A.013, subdivision 9, are limited
to $437,052,000. For aids payable in 2006 and thereafter, the total aids paid under section
477A.013, subdivision 9, is limited to $485,052,000 deleted text end new text begin $555,052,000 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 13.

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

Subd. 2b.

Counties.

(a) For aids payable in calendar year 2005 deleted text begin and thereafter deleted text end new text begin to
2008 new text end , the total aids paid to counties under section 477A.0124, subdivision 3, are limited to
$100,500,000. new text begin For aids payable in calendar year 2009, the total aids paid to counties under
section 477A.0124, subdivision 3, are limited to $120,500,000. For aids payable in 2010
and subsequent years, the total aid limitation shall be the amount of the previous year's
limitation, increased by the percentage increase determined for the year under subdivision
5. new text end Each calendar year, $500,000 shall be retained by the commissioner of revenue to make
reimbursements to the commissioner of finance for payments made under section 611.27.
deleted text begin For calendar year 2004, the amount shall be in addition to the payments authorized
under section 477A.0124, subdivision 1. For calendar year 2005 and subsequent
years, deleted text end The amount shall be deducted from the appropriation under this paragraph. The
reimbursements shall be to defray the additional costs associated with court-ordered
counsel under section 611.27. Any retained amounts not used for reimbursement in a year
shall be included in the next distribution of county need aid that is certified to the county
auditors for the purpose of property tax reduction for the next taxes payable year.

(b) For aids payable in 2005, the total aids under section 477A.0124, subdivision 4,
are limited to $105,000,000. For aids payable in 2006 deleted text begin and thereafter deleted text end new text begin to 2008 new text end , the total aid
under section 477A.0124, subdivision 4, is limited to $105,132,923. new text begin For aids payable in
2009, the total aid under section 477A.0124, subdivision 4, is limited to $125,132,923.
For aids payable in 2010 and subsequent years, the total aid limitation shall be the amount
of the previous year's limitation, increased by the percentage increase determined under
subdivision 5. new text end The commissioner of finance shall new text begin annually new text end bill the commissioner of
revenue for the cost of preparation of local impact notes as required by section 3.987, not
to exceed $207,000 deleted text begin in fiscal year 2004 and thereafter deleted text end . The commissioner of education
shall new text begin annually new text end bill the commissioner of revenue for the cost of preparation of local impact
notes for school districts as required by section 3.987, not to exceed $7,000 deleted text begin in fiscal year
2004 and thereafter deleted text end . The commissioner of revenue shall deduct the amounts billed under
this paragraph from the appropriation under this paragraph. The amounts deducted are
appropriated to the commissioner of finance and the commissioner of education for the
preparation of local impact notes.

Sec. 14.

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

new text begin Subd. 2c. new text end

new text begin Towns. new text end

new text begin For aids payable in 2009, the total aids paid under section
477A.013, subdivision 1, is limited to $5,000,000. For aids payable in 2010 and thereafter,
the total aids paid under section 477A.013, subdivision 1, is limited to the amount certified
to be paid in the previous year, adjusted for inflation as provided in subdivision 5.
new text end

Sec. 15.

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

new text begin Subd. 5. new text end

new text begin Inflation adjustment. new text end

new text begin In 2010 and thereafter, the amounts paid under
subdivisions 2a, 2b, and 2c, shall be equal to the amount adjusted for inflation and shall be
equal to:
new text end

new text begin (1) the amount certified to be paid under that subdivision in the previous year
multiplied by
new text end

new text begin (2) one plus the percentage increase in the implicit price deflator for government
consumption expenditures and gross investment for state and local government as
prepared by the United States Department of Commerce for the 12-month period ending
March 31 of the previous year.
new text end

new text begin The percentage increase used in this subdivision may not be less than 2.5 percent or
greater than 5.0 percent.
new text end

Sec. 16. new text begin STATE PARKS LOCATED ON LAKE VERMILION; DISTRIBUTION
OF PAYMENTS IN LIEU OF TAXES.
new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 477A.14, payments in lieu of
taxation under Minnesota Statutes, sections 477A.11 to 477A.145, for the land included
in any state park located in whole or in part on the shores of Lake Vermilion must be
distributed to the taxing jurisdictions containing the property as follows: one-third to the
school district, one-third to the township, and one-third to the county. Each of those taxing
jurisdictions may use the payments for their general purposes.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, section 477A.11, the payments for all lands
described in paragraph (a) must be made at the rate set for acquired natural resources land.
new text end

Sec. 17. new text begin USE OF LOCAL GOVERNMENT AIDS.
new text end

new text begin If a city of the first class located in the metropolitan area defined in Minnesota
Statutes, section 473.121, subdivision 2, receives aid under Minnesota Statutes, section
477A.013, in any of the calendar years 2010, 2011, and 2012, that exceeds the aid it
received in 2008, the city may expend all or a portion of the increase for payment of
outstanding debt obligations of the city related to public facilities, or for neighborhood
revitalization activities.
new text end

Sec. 18. new text begin STUDY OF AIDS TO LOCAL GOVERNMENTS.
new text end

new text begin The chairs of the senate and house of representatives committees on taxes shall each
appoint five members to a study group of the tax committees to examine the current
system of aids to local governments and make recommendations on improvements to
the system. Of the five members appointed by each chair, two must be members of the
tax committee, one who is a majority party member and one who is a minority party
member. The remaining members must represent local units of government. The chairs of
the divisions of the tax committees having jurisdiction over property taxes shall also be
members and shall serve as co-chairs of the study group. The study shall include, but not
be limited to, consideration of existing disparities in the distribution of local government
aid, an analysis of current law need and capacity factors as well as alternative need factors,
alternative analytical methods for determining correlations between factors and need, the
formula used to calculate aid for small cities, and volatility in the local government aid
distribution. The group must report on its specific recommendations to the legislature
by December 15, 2010.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 2

PROPERTY TAXES

Section 1.

Minnesota Statutes 2006, section 126C.01, subdivision 3, is amended to read:

Subd. 3.

Referendum market value.

"Referendum market value" means the market
value of all taxable property, excluding property classified as class 2, deleted text begin noncommercial
4c(1), or 4c(4) deleted text end under section 273.13. The portion of class 2a property consisting of the
house, garage, and surrounding one acre of land of an agricultural homestead is included
in referendum market value. Any class of property, or any portion of a class of property,
that is included in the definition of referendum market value and that has a class rate of
less than one percent under section 273.13 shall have a referendum market value equal
to its net tax capacity multiplied by 100.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 126C.41, subdivision 2, is amended to read:

Subd. 2.

Retired employee health benefits.

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 216B.1646, is amended to read:

216B.1646 RATE deleted text begin REDUCTION deleted text end new text begin ADJUSTMENT new text end ; PROPERTY TAX
deleted text begin REDUCTION deleted text end new text begin CHANGE new text end .

(a) The commission shall, by any method the commission finds appropriate, deleted text begin reduce deleted text end new text begin
adjust new text end the rates each deleted text begin electric deleted text end utility subject to rate regulation by the commission charges
its customers to reflect, on an ongoing basis, the amount by which each utility's property
tax new text begin , including the state general tax, if applicable, new text end on the personal property of its electric
system deleted text begin from taxes payable in 2001 to taxes payable in 2002 is reduced deleted text end new text begin or pipeline system
transporting or distributing natural gas is changed under this act new text end . The commission must
ensure that, to the extent feasible, each dollar of personal property tax deleted text begin reduction allocated
to Minnesota consumers retroactive to January 1, 2002, deleted text end new text begin change in taxes payable in 2009
and subsequent years new text end results in a dollar of deleted text begin savings deleted text end new text begin adjustment new text end to the utility's deleted text begin customers deleted text end new text begin
rates new text end . deleted text begin A utility may voluntarily pass on any additional property tax savings allocated in
the same manner as approved by the commission under this paragraph. deleted text end new text begin The adjustment
under this paragraph is outside of a general rate case proceeding under section 216B.16.
new text end

(b) deleted text begin By April 10, 2002, deleted text end Each utility deleted text begin shall deleted text end new text begin may new text end submit a filing to the commission
containing:

(1) certified information regarding the utility's property tax deleted text begin savings deleted text end new text begin change new text end allocated
to Minnesota retail customers; and

(2) a proposed method of deleted text begin passing these savings on deleted text end new text begin adjusting rates new text end to Minnesota
retail customers.

The utility shall provide the information in clause (1) to the commissioner of revenue at
the same time. The commissioner shall notify the commission within 30 days as to the
accuracy of the property tax data submitted by the utility.

(c) For purposes of this section, "personal property" means tools, implements, and
machinery of deleted text begin the generating plant. It does not apply to transformers, transmission lines,
distribution lines, or any other tools, implements, and machinery that are part of an electric
substation, wherever located deleted text end new text begin an electric system or of a pipeline system transporting or
distributing natural gas new text end .

Sec. 4.

Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
to read:

new text begin Subd. 18a. new text end

new text begin Leased lands. new text end

new text begin Lands of a county, city, or town that are leased or
rented by that entity for noncommercial seasonal recreational or noncommercial seasonal
recreational residential use are exempt.
new text end

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. 5.

Minnesota Statutes 2006, section 272.02, subdivision 55, is amended to read:

Subd. 55.

Electric generation facility; personal property.

Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property which is part of
an electric generating facility that meets the requirements of this subdivision is exempt.
At the time of construction, the facility must (i) be designated as an innovative energy
project as defined in section 216B.1694, (ii) be within a tax relief area as defined in
section 273.134, (iii) have access to existing railroad infrastructure within less than three
miles, (iv) have received by resolution approval from the governing body of the county
and township or city in which the proposed facility is to be located for the exemption
of personal property under this subdivision, and (v) be designed to host at least 500
megawatts of electrical generation.

Construction of the first 500 megawatts of the facility must be commenced after
January 1, 2006, and before January 1, deleted text begin 2010 deleted text end new text begin 2012 new text end . Construction of up to an additional 750
megawatts of generation must be commenced before January 1, 2015. Property eligible
for this exemption does not include electric transmission lines and interconnections or gas
pipelines and interconnections appurtenant to the property or the facility. To qualify for an
exemption under this subdivision, the owner of the electric generation facility must have
an agreement with the host county, township or city, and school district, for payment in
lieu of personal property taxes to the host county, township or city, and school district.

Sec. 6.

Minnesota Statutes 2006, section 272.02, subdivision 82, is amended to read:

Subd. 82.

Biomass electric generation facility; personal property.

(a)
Notwithstanding subdivision 9, clause (a), attached machinery and other personal property
which is a part of an electric generation facility, including remote boilers that comprise
part of the district heating system, generating up to 30 megawatts of installed capacity and
that meets the requirements of this subdivision is exempt. At the time of construction, the
facility must:

(1) be designed to utilize a minimum 90 percent waste biomass as a fuel;

(2) not be owned by a public utility as defined in section 216B.02, subdivision 4;

(3) be located within a city of the first class and have its primary location at a former
garbage transfer station; and

(4) be designed to have capability to provide baseload energy and district heating.

(b) Construction of the facility must be commenced after January 1, 2004, and
before January 1, deleted text begin 2008 deleted text end new text begin 2010 new text end . Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2006, section 272.02, subdivision 84, is amended to read:

Subd. 84.

Electric generation facility; personal property.

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

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

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

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

Construction of the facility must be commenced after April 30, 2006, and before
January 1, deleted text begin 2009 deleted text end new text begin 2011 new text end . Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.

Sec. 8.

Minnesota Statutes 2006, section 272.03, subdivision 2, is amended to read:

Subd. 2.

Personal property.

For the purposes of taxation, "personal property"
includes:

(1) All goods, chattels, money and effects;

(2) All ships, boats, and vessels belonging to inhabitants of this state and all capital
invested therein;

(3) All improvements upon land the fee of which is vested in the United States, new text begin the
state, except lands held in trust by the state under section 281.25, or by a county, city, or
town, new text end and all improvements upon land the title to which is vested in any corporation
whose property is not subject to the same mode and rule of taxation as other property;

(4) All stock of nursery operators, growing or otherwise;

(5) All gas, electric, and water mains, pipes, conduits, subways, poles, and wires of
gas, electric light, water, heat, or power companies, and all tracks, roads, conduits, poles,
and wires of street railway, plank road, gravel road, and turnpike companies;

(6) All credits over and above debts owed by the creditor;

(7) The income of every annuity, unless the capital of the annuity is taxed within
this state;

(8) All public stocks and securities;

(9) All personal estate of moneyed corporations, whether the owners reside within
or without the state;

(10) All shares in foreign corporations owned by residents of this state; and

(11) All shares in banks organized under the laws of the United States or of this state.

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. 9.

Minnesota Statutes 2006, section 273.111, subdivision 3, as amended by Laws
2008, chapter 154, article 13, section 26, is amended to read:

Subd. 3.

Requirements.

(a) Real estate consisting of ten acres or more or a nursery
or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section 273.13,
shall be entitled to valuation and tax deferment under this section deleted text begin only deleted text end if it deleted text begin is primarily deleted text end
deleted text begin devoted to agricultural use, and deleted text end meets the qualifications in subdivision 6, and either:

(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
owner or is real estate which is farmed with the real estate which contains the homestead
property; or

(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
or any combination thereof, for a period of at least seven years prior to application for
benefits under the provisions of this section, or is real estate which is farmed with the
real estate which qualifies under this clause and is within four townships or cities or
combination thereof from the qualifying real estate; or

(3) is the homestead of a shareholder in a family farm corporation as defined in
section 500.24, notwithstanding the fact that legal title to the real estate may be held in the
name of the family farm corporation; or

(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
partnership, or corporation which also owns the nursery or greenhouse operations on
the parcel or parcels new text begin , provided that only the acreage that is used to grow nursery stock
qualify for treatment under this section new text end .

(b) Valuation of real estate under this section is limited to parcels the ownership of
which is in noncorporate entities except for:

(1) family farm corporations organized pursuant to section 500.24; and

(2) corporations that derive 80 percent or more of their gross receipts from the
wholesale or retail sale of horticultural or nursery stock.

(c) Land that previously qualified for tax deferment under this section and no longer
qualifies because it is not primarily used for agricultural purposes but would otherwise
qualify under subdivisions 3 and 6 for a period of at least three years will not be required
to make payment of the previously deferred taxes, notwithstanding the provisions of
subdivision 9. Sale of the land prior to the expiration of the three-year period requires
payment of deferred taxes as follows: sale in the year the land no longer qualifies requires
payment of the current year's deferred taxes plus payment of deferred taxes for the two
prior years; sale during the second year the land no longer qualifies requires payment of
the current year's deferred taxes plus payment of the deferred taxes for the prior year; and
sale during the third year the land no longer qualifies requires payment of the current
year's deferred taxes. Deferred taxes shall be paid even if the land qualifies pursuant to
subdivision 11a. When such property is sold or no longer qualifies under this paragraph, or
at the end of the three-year period, whichever comes first, all deferred special assessments
plus interest are payable in equal installments spread over the time remaining until the last
maturity date of the bonds issued to finance the improvement for which the assessments
were levied. If the bonds have matured, the deferred special assessments plus interest
are payable within 90 days. The provisions of section 429.061, subdivision 2, apply
to the collection of these installments. Penalties are not imposed on any such special
assessments if timely paid.

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 273.111, subdivision 6, is amended to read:

Subd. 6.

Agricultural use.

new text begin (a) new text end Real property qualifying under subdivision 3 shall be
considered to be in agricultural use provided that annually:

(1) deleted text begin at least 33-1/3 percent of the total family income of the owner is derived
therefrom, or the total production income including rental from the property is $300 plus
$10 per tillable acre; and
deleted text end

deleted text begin (2) deleted text end it is devoted to the production for sale of agricultural products as defined in
section 273.13, subdivision 23, paragraph (e) new text begin ; and
new text end

new text begin (2) in the case of real estate consisting of at least ten but no more than 20 acres, in at
least one of the three calendar years preceding the assessment year:
new text end

new text begin (i) the total production income from the property is no less than an amount equal
to five percent of the per acre agricultural value determined under subdivision 16 for the
county where the property is located for the previous assessment year, multiplied by the
number of acres in the parcel subject to this section; or
new text end

new text begin (ii) the amount of total farm expenses shown on Schedule F of the property owner's
federal income tax return exceeds 25 percent of the federal adjusted gross income of the
owner for federal tax purposes new text end .

new text begin In this subdivision, "total production income" means gross income as reported for
federal income tax purposes on Schedule F or Schedule E for farm rental income for the
calendar year ending in the year preceding the assessment year.
new text end

new text begin (b) new text end Slough, wasteland, and woodland deleted text begin contiguous to or surrounded by land that is deleted text end
new text begin are not new text end entitled to valuation and tax deferment under this section deleted text begin is considered to be in
agricultural use if under the same ownership and management deleted text end new text begin unless:
new text end

new text begin (1) it is used for agricultural production; or
new text end

new text begin (2) it is impracticable for the assessor to separate its value from the value of the
production acreage new text end .

new text begin (c) Land that is enrolled in the Reinvest in Minnesota program under sections
103F.501 to 103F.535, the federal Conservation Reserve Program as contained in Public
Law 99-198, or a similar state or federal conservation program do not qualify for valuation
and assessment deferral under this section.
new text end

Sec. 11.

Minnesota Statutes 2006, section 273.111, subdivision 8, is amended to read:

Subd. 8.

Application.

Application for deferment of taxes and assessment under this
section shall be filed by May 1 of the year prior to the year in which the taxes are payable.
Any application filed hereunder and granted shall continue in effect for subsequent years
until the property no longer qualifies. Such application shall be filed with the assessor
of the taxing district in which the real property is located on deleted text begin such deleted text end new text begin the new text end form deleted text begin as may be deleted text end
prescribed by the commissioner of revenue new text begin , and must include a copy of the Schedule F or
Schedule E showing farm rental income included in the most recently filed federal income
tax return of the applicant new text end . The assessor may require proof by affidavit or otherwise that
the property qualifies under subdivisions 3 and 6.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed after May
1, 2008.
new text end

Sec. 12.

Minnesota Statutes 2006, section 273.111, subdivision 14, is amended to read:

Subd. 14.

Applicability of special assessment provisions.

This section shall apply
to special local assessments levied after July 1, 1967, and payable in the years thereafter,
but shall not apply to any special assessments levied at any time by a county or district
court under deleted text begin the provisions of deleted text end chapter 116A new text begin or by a watershed district under chapter 103D new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for special assessments levied after
May 31, 2008, or, as applied to special assessments levied before June 1, 2008, to property
that initially qualifies for valuation under section 273.111, for taxes levied in 2008.
new text end

Sec. 13.

Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Agricultural value determination. new text end

new text begin (a) In order to account for the
presence of nonagricultural influences that may affect the sales of agricultural land, the
commissioner of revenue shall develop a fair and uniform method of determining, for each
county in the state, a median agricultural value that is consistent with subdivision 4. The
commissioner shall annually assign the resulting agricultural value to each county, and
this value shall be used as the median agricultural value for the county under this section.
new text end

new text begin (b) When property classified as agricultural is sold and the purchaser changes its use
in a manner that would result in a change of classification of the property, and the sale
price exceeds the agricultural value determined under paragraph (a), the assessor and
the commissioner must review the sale along with other appropriate sales information
to determine if there are nonagricultural influences on the value. If upon review it is
determined that nonagricultural factors have affected the value, the resulting sales ratio
shall be excluded from use in any study measuring agricultural value and applied to a
study measuring market value.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Implementation of program. new text end

new text begin This section must be applied to eligible
properties by all county assessors, beginning no later than assessments for taxes levied
in 2009, payable in 2010, and thereafter, unless the commissioner of revenue determines
that a county is unable to comply with this requirement, in which case the county must
implement it for the earliest assessment year determined by the commissioner to be
feasible.
new text end

Sec. 15.

new text begin [273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY
TAX LAW.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, "commercial aggregate
deposit" and "actively mined" have the meanings given them in section 273.13,
subdivision 23, paragraph (h).
new text end

new text begin Subd. 2. new text end

new text begin Requirement. new text end

new text begin Real estate is entitled to valuation under this section only if
all of the following requirements are met:
new text end

new text begin (1) the property is classified 1a, 1b, 2a, or 2b property under section 273.13,
subdivisions 22 and 23;
new text end

new text begin (2) the property is at least ten contiguous acres, when the application is filed under
subdivision 3;
new text end

new text begin (3) the owner has filed a completed application for deferment as specified in
subdivision 3 with the county assessor in the county in which the property is located;
new text end

new text begin (4) there are no delinquent taxes on the property; and
new text end

new text begin (5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin Application for valuation deferment under this section
must be filed by May 1 of the assessment year. Any application filed and granted
continues in effect for subsequent years until the property no longer qualifies, provided
that supplemental affidavits under subdivision 8 are timely filed. The application must
be filed with the assessor of the county in which the real property is located on such
form as may be prescribed by the commissioner of revenue. The application must be
executed and acknowledged in the manner required by law to execute and acknowledge a
deed and must contain at least the following information and any other information the
commissioner deems necessary:
new text end

new text begin (1) the legal description of the area;
new text end

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

new text begin (3) a copy of the affidavit filed under section 273.13, subdivision 23, paragraph
(h), when property is classified as:
new text end

new text begin (i) 2b under section 273.13, subdivision 23, paragraph (b), clause (4);
new text end

new text begin (ii) 1b under section 273.13, subdivision 22, paragraph (b);
new text end

new text begin (iii) 2a under section 273.13, subdivision 23, paragraph (a); or
new text end

new text begin (iv) 2b under section 273.13, subdivision 23, paragraph (b), clauses (1) to (3).
new text end

new text begin The application must include a similar document with the same information as
contained in the affidavit under section 273.13, subdivision 23, paragraph (h); and
new text end

new text begin (4) a statement of proof from the owner that the land contains a restrictive covenant
limiting its use for the property's surface to that which exists on the date of the application
and limiting its future use to the preparation and removal of the commercial aggregate
deposit under its surface. To qualify under this clause, the covenant must be binding on
the owner or the owner's successor or assignee, and run with the land, except as provided
in subdivision 5 allowing for the cancellation of the covenant under certain conditions.
new text end

new text begin Subd. 4. new text end

new text begin Determination of value. new text end

new text begin Upon timely application by the owner as provided
in subdivision 3, notwithstanding sections 272.03, subdivision 8, and 273.11, the value of
any qualifying land described in subdivision 3 must be valued as if it were agricultural
property, using a per acre valuation equal to the current assessment year's average per acre
valuation of agricultural land in the county. The assessor shall not consider any additional
value resulting from potential alternative and future uses of the property. The buildings
located on the land shall be valued by the assessor in the normal manner.
new text end

new text begin Subd. 5. new text end

new text begin Cancellation of covenant. new text end

new text begin The covenant required under subdivision
3 may be canceled in two ways:
new text end

new text begin (1) by the owner beginning with the next subsequent assessment year provided
that the additional taxes as determined under subdivision 7 are paid by the owner at the
time of cancellation; or
new text end

new text begin (2) by the city or town in which the property is located beginning with the next
subsequent assessment year, if the city council or town board:
new text end

new text begin (i) changes the conditional use of the property;
new text end

new text begin (ii) revokes the mining permit; or
new text end

new text begin (iii) changes the zoning to disallow mining.
new text end

new text begin No additional taxes are imposed on the property under this clause.
new text end

new text begin Subd. 6. new text end

new text begin County termination. new text end

new text begin Within two years of the effective date of this section,
a county may, following notice and public hearing, terminate application of this section
in the county. The termination is effective upon adoption of a resolution of the county
board. A county has 60 days from receipt of the first application for enrollment under
this section to notify the applicant and any subsequent applicants of the county's intent
to begin the process of terminating application of this section in the county. The county
must act on the termination within six months. Upon termination by a vote of the county
board, all applications received prior to and during notification of intent to terminate shall
be deemed void. If the county board does not act on the termination within six months of
notification, all applications for valuation for deferment received shall be deemed eligible
for consideration to be enrolled under this section. Following this initial 60-day grace
period, a termination applies prospectively and does not affect property enrolled under this
section prior to the termination date. A county may reauthorize application of this section
by a resolution of the county board revoking the termination.
new text end

new text begin Subd. 7. new text end

new text begin Additional taxes. new text end

new text begin When real property which has been valued and assessed
under this section no longer qualifies, the portion of the land classified under subdivision
2, clause (1), is subject to additional taxes. The additional tax amount is determined by:
new text end

new text begin (1) computing the difference between (i) the current year's taxes determined in
accordance with subdivision 4, and (ii) an amount as determined by the assessor based
upon the property's current year's estimated market value of like real estate at its highest
and best use and the appropriate local tax rate; and
new text end

new text begin (2) multiplying the amount determined in clause (1) by the number of years the
land was in the program under this section. The current year's estimated market value as
determined by the assessor must not exceed the market value that would result if the
property was sold in an arms-length transaction and must not be greater than it would have
been had the actual bona fide sale price of the property been used in lieu of that market
value. The additional taxes must be extended against the property on the tax list for the
current year, except that interest or penalties must not be levied on these additional taxes if
timely paid. The additional tax under this subdivision must not be imposed on that portion
of the property which has actively been mined and has been removed from the program
based upon the supplemental affidavits filed under subdivision 8.
new text end

new text begin Subd. 8. new text end

new text begin Supplemental affidavits; mining activity on land. new text end

new text begin When any portion
of the property begins to be actively mined, the owner must file a supplemental affidavit
within 60 days from the day any aggregate is removed stating the number of acres of the
property that is actively being mined. The acres actively being mined shall be (1) valued
and classified under section 273.13, subdivision 24, in the next subsequent assessment
year, and (2) removed from the aggregate resource preservation property tax program
under this section. The additional taxes under subdivision 7 must not be imposed on the
acres that are actively being mined and have been removed from the program under this
section. Copies of the original affidavit and all supplemental affidavits must be filed
with the county assessor, the local zoning administrator, and the Department of Natural
Resources, Division of Land and Minerals. A supplemental affidavit must be filed each
time a subsequent portion of the property is actively mined, provided that the minimum
acreage change is five acres, even if the actual mining activity constitutes less than five
acres. Failure to file the affidavits timely shall result in the property losing its valuation
deferment under this section, and additional taxes must be imposed as calculated under
subdivision 7.
new text end

new text begin Subd. 9. new text end

new text begin Lien. new text end

new text begin The additional tax imposed by this section is a lien upon the property
assessed to the same extent and for the same duration as other taxes imposed upon
property within this state and, when collected, must be distributed in the manner provided
by law for the collection and distribution of other property taxes.
new text end

new text begin Subd. 10. new text end

new text begin Continuation of tax treatment upon sale. new text end

new text begin When real property qualifying
under subdivision 2 is sold, additional taxes must not be extended against the property
if the property continues to qualify under subdivision 2, and the new owner files an
application with the assessor for continued deferment within 30 days after the sale.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes assessed in 2009, payable
in 2010, and thereafter, except that for the 2009 assessment year, the application date
under subdivision 5 shall be September 1, 2009, and subdivision 6 is effective the day
following final enactment.
new text end

Sec. 16.

Minnesota Statutes 2006, section 273.112, subdivision 3, is amended to read:

Subd. 3.

Requirements.

Real estate shall be entitled to valuation and tax deferment
under this section only if it is:

(a) actively and exclusively devoted to golf, skiing, lawn bowling, croquet, polo,
new text begin soccer, new text end or archery or firearms range recreational use or other recreational uses carried
on at the establishment;

(b) five acres in size or more, except in the case of a lawn bowling or croquet green
or an archery or firearms range;

(c)(1) operated by private individuals or, in the case of a lawn bowling or croquet
green, by private individuals or corporations, and open to the public; or

(2) operated by firms or corporations for the benefit of employees or guests; or

(3) operated by private clubs having a membership of 50 or more or open to the
public, provided that the club does not discriminate in membership requirements or
selection on the basis of sex or marital status; and

(d) made available for use in the case of real estate devoted to golf without
discrimination on the basis of sex during the time when the facility is open to use by the
public or by members, except that use for golf may be restricted on the basis of sex no
more frequently than one, or part of one, weekend each calendar month for each sex and
no more than two, or part of two, weekdays each week for each sex.

If a golf club membership allows use of golf course facilities by more than one adult
per membership, the use must be equally available to all adults entitled to use of the golf
course under the membership, except that use may be restricted on the basis of sex as
permitted in this section. Memberships that permit play during restricted times may be
allowed only if the restricted times apply to all adults using the membership. A golf club
may not offer a membership or golfing privileges to a spouse of a member that provides
greater or less access to the golf course than is provided to that person's spouse under the
same or a separate membership in that club, except that the terms of a membership may
provide that one spouse may have no right to use the golf course at any time while the
other spouse may have either limited or unlimited access to the golf course.

A golf club may have or create an individual membership category which entitles a
member for a reduced rate to play during restricted hours as established by the club. The
club must have on record a written request by the member for such membership.

A golf club that has food or beverage facilities or services must allow equal access
to those facilities and services for both men and women members in all membership
categories at all times. Nothing in this paragraph shall be construed to require service or
access to facilities to persons under the age of 21 years or require any act that would
violate law or ordinance regarding sale, consumption, or regulation of alcoholic beverages.

For purposes of this subdivision and subdivision 7a, discrimination means a pattern
or course of conduct and not linked to an isolated incident.

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. 17.

new text begin [273.113] TAX CREDIT FOR PROPERTY IN BOVINE
TUBERCULOSIS MANAGEMENT ZONES.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

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

new text begin (1) "bovine tuberculosis management zone" means the area within the ten-mile
radius around the five presumptive tuberculosis-positive deer sampled during the fall 2006
hunter-harvested surveillance effort; and
new text end

new text begin (2) "located within" means that the herd is kept in the area for at least a part of
the year.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility; amount of credit. new text end

new text begin Agricultural land classified as class 2a or 2b
under section 273.13, subdivision 23, located in a bovine tuberculosis management zone is
eligible for a property tax credit if the owner has eradicated a cattle herd that had been
located within that land in order to prevent the onset or spreading of bovine tuberculosis.
The credit is equal to the property tax on the parcel where the herd had been located. To
begin to qualify for the tax credit, the owner shall file an application with the county by
January 2 of the year after the calendar year when the herd was eradicated. The credit
must be given for each payable tax year following the calendar year when the herd was
eradicated and must terminate for all payable tax years beginning after the calendar year
when a new herd of cattle was placed on the land. The assessor shall indicate the amount
of the property tax reduction on the property tax statement of each taxpayer receiving a
credit under this section. The credit paid pursuant to this section shall be deducted from
the tax due on the property as provided in section 273.1393.
new text end

new text begin Subd. 3. new text end

new text begin Reimbursement for lost revenue. new text end

new text begin The county auditor shall certify to the
commissioner of revenue, as part of the abstracts of tax lists required to be filed with
the commissioner under section 275.29, the amount of tax lost to the county from the
property tax credit under subdivision 2. Any prior year adjustments must also be certified
in the abstracts of tax lists. The commissioner of revenue shall review the certifications to
determine their accuracy. The commissioner may make the changes in the certification
that are considered necessary or return a certification to the county auditor for corrections.
The commissioner shall reimburse each taxing district for the taxes lost. The payments
must be made at the time provided in section 273.1398, subdivision 6, for payment to
taxing jurisdictions in the same proportion that the ad valorem tax is distributed. The
amount necessary to make the reimbursements under this section is annually appropriated
from the general fund to the commissioner of revenue.
new text end

new text begin Subd. 4. new text end

new text begin Termination of credit. new text end

new text begin The credit provided under this section ceases to
be available beginning with any assessment year following the date when the Board of
Animal Health has certified that the state is free of bovine tuberculosis.
new text end

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. 18.

Minnesota Statutes 2006, section 273.124, subdivision 11, is amended to read:

Subd. 11.

Limitation on homestead treatment.

deleted text begin (a) For taxes payable in 2003
through 2005 only, deleted text end If the assessor has classified a property as both homestead and
nonhomestead, the greater of deleted text begin : deleted text end (1) the value attributable to the portion of the property
used as a homestead deleted text begin ; deleted text end new text begin , new text end or (2) deleted text begin the homestead value amount determined under paragraph
(b) deleted text end new text begin $76,000 new text end , is entitled to assessment as a homestead under section 273.13, subdivision
22 or 23.

deleted text begin (b) For taxes payable in 2003 only, the homestead value amount is $60,000. For
taxes payable in 2004 only, the homestead value amount is $45,000. For taxes payable in
2005 only, the homestead value amount is $30,000.
deleted text end

deleted text begin The homestead value amount must not exceed the property's taxable market value.
deleted text end

deleted text begin (c) deleted text end new text begin The limitation in this section does not apply to buildings containing fewer than
four residential units or to a single rented or leased dwelling unit located within or attached
to a private garage or similar structure owned by the owner of a homestead and located on
the premises of that homestead. new text end If the assessor has classified a property as both homestead
and nonhomestead, the reductions in tax provided under sections 273.135 and 273.1391
apply to the value of both the homestead and the nonhomestead portions of the property.

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2006, section 273.13, subdivision 23, as amended by Laws
2008, chapter 154, article 2, section 12, 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 deleted text begin 0.55 deleted text end new text begin 0.5
new text end 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 nonresidential
structure does not disqualify property from classification under this clause; (2) new text end real estate
that is nonhomestead agricultural land; deleted text begin or (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 new text begin ; or (4) land with a commercial aggregate deposit that
is not actively being mined and is not otherwise classified as class 2a under paragraph
(a) or 2b, under clauses (1) to (3) new text end . Class 2b property has a net class rate of one percent
of market value, except that property described in clause (1) deleted text begin or (2) deleted text end has a net class rate
of .65 percent if it consists of no less than ten and no more than 1,920 acres and is being
managed under a forest management plan that meets the requirements of chapter 290C,
but is not enrolled in the sustainable forest resource management incentive program,
provided that the owner of the property must apply to the assessor annually to receive the
reduced class rate and provide the information required by the assessor to verify that
the property qualifies for the reduced rate.

(c) Agricultural land as used in this section means contiguous acreage of deleted text begin ten deleted text end new text begin 20 new text end
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 new text begin or a similar state or federal conservation program, but only
new text end 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 deleted text begin ten deleted text end new text begin 20 new text end acres deleted text begin which is exclusively and intensively used for raising or
cultivating agricultural products, deleted text end shall be considered as agricultural land new text begin only if:
new text end

new text begin (1) at least ten contiguous acres were tilled or pastured to produce an agricultural
product for sale in three of the last five years;
new text end

new text begin (2) at least 75 percent of the acres are used exclusively for storage of grain or storage
of machinery or equipment used to support the agricultural activities on other parcels
under the same ownership;
new text end

new text begin (3) the entire parcel is tilled or used for pasture;
new text end

new text begin (4) the land mass contains a licensed nursery, provided that only those acres used
to produce nursery stock are considered agricultural land;
new text end

new text begin (5) the parcel is used primarily for a livestock or poultry confinement process; or
new text end

new text begin (6) the parcel is used primarily for market farming; for purposes of this subdivision,
"market farming" means the cultivation of one or more fruits or vegetables or production
of animal or other agricultural products for sale to local markets by the farmer or an
organization with which the farmer is affiliated new text end .

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.

new text begin An assessor may classify the part of a parcel described in this paragraph that is
used for agricultural purposes as class 1b, 2a, or 2b, whichever is appropriate, and the
remainder in the class appropriate to its use.
new text end

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, new text begin including short rotation woody crops, new text end and not
sold for timber, lumber, wood, or wood products; and

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

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

(1) wholesale and retail sales;

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

(3) warehousing or storage of processed goods; and

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

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

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

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

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

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

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

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

new text begin (h) To qualify for classification under paragraph (b), clause (4), the property must be
at least ten contiguous acres in size and the owner of the property must record with the
county recorder of the county in which the property is located an affidavit containing:
new text end

new text begin (1) a legal description of the property;
new text end

new text begin (2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;
new text end

new text begin (3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and
new text end

new text begin (4) documentation that a permit has been issued by the local unit of government
or the mining activity is allowed under local ordinance. The disclosure must include a
statement from a registered professional geologist, engineer, or soil scientist delineating
the deposit and certifying that it is a commercial aggregate deposit.
new text end

new text begin For purposes of this section and section 273.1115, "commercial aggregate deposit"
means a deposit that will yield crushed stone or sand and gravel that is suitable for use
as a construction aggregate; and "actively mined" means the removal of top soil and
overburden in preparation for excavation or excavation of a commercial deposit.
new text end

new text begin (i) When any portion of the property under this subdivision or subdivision 22 begins
to be actively mined, the owner must file a supplemental affidavit within 60 days from
the day any aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively being mined must be (1) valued and classified
under subdivision 24 in the next subsequent assessment year, and (2) removed from the
aggregate resource preservation property tax program under section 273.1115, if the
land was enrolled in that program. Copies of the original affidavit and all supplemental
affidavits must be filed with the county assessor, the local zoning administrator, and the
Department of Natural Resources, Division of Land and Minerals. A supplemental
affidavit must be filed each time a subsequent portion of the property is actively mined,
provided that the minimum acreage change is five acres, even if the actual mining activity
constitutes less than five acres.
new text end

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. 20.

Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read:

Subd. 24.

Class 3.

(a) Commercial and industrial property and utility real and
personal property is class 3a.

(1) Except as otherwise provided, each parcel of commercial, industrial, or utility
real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent
of the remaining market value. In the case of contiguous parcels of property owned by the
same person or entity, only the value equal to the first-tier value of the contiguous parcels
qualifies for the reduced class rate, except that contiguous parcels owned by the same
person or entity shall be eligible for the first-tier value class rate on each separate business
operated by the owner of the property, provided the business is housed in a separate
structure. For the purposes of this subdivision, the first tier means the first $150,000 of
market value. Real property owned in fee by a utility for transmission line right-of-way
shall be classified at the class rate for the higher tier.

For purposes of this subdivision, parcels are considered to be contiguous even if
they are separated from each other by a road, street, waterway, or other similar intervening
type of property. Connections between parcels that consist of power lines or pipelines do
not cause the parcels to be contiguous. Property owners who have contiguous parcels of
property that constitute separate businesses that may qualify for the first-tier class rate shall
notify the assessor by July 1, for treatment beginning in the following taxes payable year.

(2) deleted text begin All deleted text end Personal property that is deleted text begin : (i) deleted text end part of an electric generation deleted text begin , transmission, or
distribution deleted text end system deleted text begin ; or (ii) deleted text end new text begin , including tools, implements, and machinery, has a class rate
of 2.5 percent for taxes levied in 2008, payable in 2009, and 2.8 percent for taxes levied
in 2009, payable in 2010, and thereafter. new text end

new text begin (3) Personal property that is either: (i) new text end part of a pipeline system transporting
or distributing water, gas, crude oil, or petroleum products deleted text begin ; and (iii) not described in
clause (3), and all deleted text end new text begin , including tools, implements, and machinery, or (ii) part of an electric
transmission or distribution system, including tools, implements, and machinery, has a
class rate of 2.15 percent for taxes levied in 2008, payable in 2009, and 2.25 percent for
taxes levied in 2009, payable in 2010, and thereafter. new text end

new text begin (4) new text end Railroad operating property has a class rate as provided under clause (1) for
the first tier of market value and the remaining market value. In the case of multiple
parcels in one county that are owned by one person or entity, only one first tier amount
is eligible for the reduced rate.

deleted text begin (3) The entire market value of personal property that is: (i) tools, implements, and
machinery of an electric generation, transmission, or distribution system; (ii) tools,
implements, and machinery of a pipeline system transporting or distributing water, gas,
crude oil, or petroleum products; or (iii) deleted text end deleted text begin the deleted text end new text begin (5) Personal property consisting of new text end mains
and pipes used in the distribution of steam or hot or chilled water for heating or cooling
buildings, has a class rate as provided under clause (1) for the remaining market value
in excess of the first tier.

(b) Employment property defined in section 469.166, during the period provided
in section 469.170, shall constitute class 3b. The class rates for class 3b property are
determined under paragraph (a).

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Minnesota Statutes 2006, section 273.13, subdivision 25, as amended by Laws
2008, chapter 154, article 2, section 13, 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 deleted text begin , other than seasonal residential recreational property deleted text end ;

(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 deleted text begin , other than seasonal
residential recreational property deleted text end ; 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.

deleted text begin 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.
deleted text end

(d) Class 4c property includes:

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

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

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

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

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

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

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

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

For purposes of this clause,

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

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

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue
Code of 1986, as amended through December 31, 1990; and

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

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

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

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

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

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

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

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

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

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

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

(i) the land abuts a public airport; and

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

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

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

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

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

(iv) the owner is the operator of the property new text begin ; and
new text end

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

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) deleted text begin each
parcel of seasonal residential recreational property not used for commercial purposes has
the same class rates as class 4bb property, (ii) deleted text end manufactured home parks assessed under
clause (5) have the same class rate as class 4b property, deleted text begin (iii) deleted text end new text begin (ii) new text end 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, deleted text begin (iv) deleted text end new text begin (iii) new text end the market value
of property described in clause (4) has a class rate of one percent, deleted text begin (v) deleted text end new text begin (iv) new text end the market value
of property described in clauses (2) and (6) has a class rate of 1.25 percent, and deleted text begin (vi) deleted text end new text begin (v) new text end
that portion of the market value of property in clause (9) qualifying for class 4c property
has a class rate of 1.25 percent.

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

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. 23.

Minnesota Statutes 2007 Supplement, section 273.1393, is amended to read:

273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are
determined by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

(7) homestead and agricultural credits as provided in section 273.1384;

(8) taconite homestead credit as provided in section 273.135; deleted text begin and deleted text end

(9) supplemental homestead credit as provided in section 273.1391 new text begin ; and
new text end

new text begin (10) the bovine tuberculosis eradication credit new text end .

The combination of all property tax credits must not exceed the gross tax amount.

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. 24.

Minnesota Statutes 2006, section 273.19, subdivision 1, is amended to read:

Subdivision 1.

Tax-exempt property; lease.

Except as provided in subdivision 3 or
4, tax-exempt property held under a lease for a term of at least one year, and not taxable
under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall be
considered, for all purposes of taxation, as the property of the person holding it. In this
subdivision, "tax-exempt property" means property owned by the United States, the state,
a school, or any religious, scientific, or benevolent society or institution, incorporated or
unincorporated, or any corporation whose property is not taxed in the same manner as
other property. This subdivision does not apply to property exempt from taxation under
section 272.01, subdivision 2, paragraph (b), clauses (2), (3), and (4) new text begin , and does not apply
to federal or state government fee land that is leased or rented for noncommercial seasonal
recreational or noncommercial seasonal recreational residential use new text end .

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. 25.

Minnesota Statutes 2006, section 275.025, subdivision 1, is amended to read:

Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property deleted text begin and seasonal residential recreational property deleted text end , as defined
in this section. The state general levy base amount deleted text begin is $592,000,000 deleted text end for taxes payable in
deleted text begin 2002. deleted text end deleted text begin For taxes payable in subsequent years, deleted text end deleted text begin the levy base amount is increased each
year by multiplying the levy base amount for the prior year by the sum of one plus deleted text end new text begin 2009
is determined by increasing $746,900,000 by new text end the rate of increase, if any, in the implicit
price deflator for government consumption expenditures and gross investment for state
and local governments prepared by the Bureau of Economic Analysts of the United States
Department of Commerce for the 12-month period ending March 31 of the year prior to
the year the taxes are payable. new text begin For taxes payable in 2010 and subsequent years, the tax is
imposed at the rate set under this section for taxes payable in 2009. new text end The tax under this
section is not treated as a local tax rate under section 469.177 and is not the levy of a
governmental unit under chapters 276A and 473F.

deleted text begin The commissioner shall increase or decrease the preliminary or final rate for a year
as necessary to account for errors and tax base changes that affected a preliminary or final
rate for either of the two preceding years. Adjustments are allowed to the extent that the
necessary information is available to the commissioner at the time the rates for a year must
be certified, and for the following reasons:
deleted text end

deleted text begin (1) an erroneous report of taxable value by a local official;
deleted text end

deleted text begin (2) an erroneous calculation by the commissioner; and
deleted text end

deleted text begin (3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported on the abstracts of tax lists submitted under
section 275.29 that was not reported on the abstracts of assessment submitted under
section 270C.89 for the same year.
deleted text end

deleted text begin The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.
deleted text end

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. 26.

Minnesota Statutes 2006, section 275.025, subdivision 2, is amended to read:

Subd. 2.

Commercial-industrial tax capacity.

For the purposes of this section,
"commercial-industrial tax capacity" means the tax capacity of all taxable property
classified as class 3 or class 5(1) under section 273.13 deleted text begin , except for electric generation
attached machinery under class 3 and property described in section 473.625 deleted text end . County
commercial-industrial tax capacity amounts are not adjusted for the captured net tax
capacity of a tax increment financing district under section 469.177, subdivision 2, the
net tax capacity of transmission lines deducted from a local government's total net tax
capacity under section 273.425, or fiscal disparities contribution and distribution net
tax capacities under chapter 276A or 473F.

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. 27.

Minnesota Statutes 2006, section 275.025, subdivision 4, is amended to read:

Subd. 4.

deleted text begin Apportionment and deleted text end Levy of state general tax.

deleted text begin Ninety-five percent of the
state general tax must be levied by applying a uniform rate to all commercial-industrial tax
capacity and five percent of the state general tax must be levied by applying a uniform
rate to all seasonal residential recreational tax capacity. deleted text end On or before October 1 each year,
the commissioner of revenue shall certify the preliminary state general levy rates to each
county auditor that must be used to prepare the notices of proposed property taxes for taxes
payable in the following year. By January 1 of each year, the commissioner shall certify
the final state general levy rate to each county auditor that shall be used in spreading taxes.

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 275.065, is amended by adding a subdivision
to read:

new text begin Subd. 1d. new text end

new text begin Failure to certify proposed levy. new text end

new text begin If a taxing authority fails to certify
its proposed levy by the due dates specified under subdivisions 1, 1a, and 1c, the county
auditor shall use the authority's previous year's final levy under section 275.07, subdivision
1, for purposes of determining its proposed property tax notices and public advertisements
under this section.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 29.

Minnesota Statutes 2006, section 278.05, subdivision 6, as amended by Laws
2008, chapter 154, article 2, section 20, is amended to read:

Subd. 6.

deleted text begin Dismissal of petition deleted text end new text begin Sanctions new text end ; exclusion of certain evidence.

(a)
deleted text begin In cases where deleted text end new text begin If new text end the petitioner contests the valuation of income-producing property, new text begin the
petitioner must produce the following new text end information deleted text begin , including income and expense figures
in the form of deleted text end new text begin :
new text end

(1) year-end financial statements for the new text begin fiscal new text end year prior to the assessment date deleted text begin , deleted text end new text begin ;
new text end

(2) year-end financial statements for the new text begin fiscal new text end year deleted text begin of deleted text end new text begin ending in new text end the assessment
deleted text begin date, and deleted text end new text begin year;
new text end

(3) rent rolls deleted text begin on deleted text end new text begin as of new text end the assessment date deleted text begin including tenant name, lease start and
end dates, option terms, base rent, square footage leased and vacant space, verified net
rentable areas in the form of deleted text end new text begin ;
new text end

new text begin (4) new text end net rentable square footage of the building or buildings deleted text begin , deleted text end new text begin ; new text end and

new text begin (5) new text end deleted text begin anticipated income and expenses in the form of deleted text end proposed budgets for the new text begin fiscal
new text end year deleted text begin subsequent to the year of deleted text end new text begin after new text end the assessment deleted text begin date, deleted text end new text begin year.
new text end

new text begin The information new text end must be provided to the county assessor no later than 60 days after
the applicable filing deadline contained in section 278.01, subdivision 1 or 4. Failure to
provide the information required in this paragraph shall result in deleted text begin the dismissal of the
petition, unless (1) the failure to provide it was due to the unavailability of the evidence at
the time that the information was due, or (2) deleted text end new text begin sanctions under Rule 37 of the Minnesota
Rules of Civil Procedure. It shall be a defense to a motion for sanctions under this
subdivision if the petitioner demonstrates that the required information was not available
at the time of the required production under this subdivision, or that new text end the petitioner was not
aware of or informed new text begin by the county assessor new text end of the requirement to provide the information.

deleted text begin If the petitioner proves that the requirements under clause (2) are met, the petitioner has
an additional 30 days to provide the information from the time the petitioner became
aware of or was informed of the requirement to provide the information, otherwise the
petition shall be dismissed.
deleted text end

(b) Provided that the information as contained in paragraph (a) is timely submitted to
the county assessor, the county assessor shall furnish the petitioner at least five days before
the hearing under this chapter with the property's appraisal, if any, which will be presented
to the court at the hearing. The petitioner shall furnish to the county assessor at least five
days before the hearing under this chapter with the property's appraisal, if any, which will
be presented to the court at the hearing. An appraisal of the petitioner's property done by deleted text begin or
for the county deleted text end new text begin either party new text end shall not be admissible as evidence if deleted text begin the county assessor does
not comply with the provisions in this paragraph. The petition shall be dismissed if the
petitioner deleted text end new text begin that party new text end does not comply with the provisions deleted text begin in deleted text end new text begin of new text end this deleted text begin paragraph deleted text end new text begin subdivision new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 30.

Minnesota Statutes 2006, section 280.39, as amended by Laws 2008, chapter
154, article 2, section 22, is amended to read:

280.39 DELINQUENT TAXES MAY BE PAID IN INVERSE ORDER.

In any case where taxes for two or more years are delinquent against a parcel of land,
the taxes, or a portion of them, if held by the state, may be paid in the inverse order to
that in which the taxes were levied, with accrued penalties, interest, and costs upon the
taxes so paid, without payment of the taxes for the first of such years; provided, that
such payment shall not affect the lien of any unpaid taxes or tax judgment. new text begin Payments for
delinquent taxes for a part of a year may be accepted if payment is received under section
290A.10, and must be applied in the order specified in this section.
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. 31.

Minnesota Statutes 2006, section 290A.10, is amended to read:

290A.10 PROOF OF TAXES PAID.

new text begin Subdivision 1. new text end

new text begin Generally. new text end

Every claimant who files a claim for relief for property
taxes payable shall include with the claim a property tax statement or a reproduction
thereof in a form deemed satisfactory by the commissioner of revenue indicating that
there are no delinquent property taxes on the homestead. Indication on the property tax
statement from the county treasurer that there are no delinquent taxes on the homestead
shall be sufficient proof. Taxes included in a confession of judgment under section 279.37
shall not constitute delinquent taxes as long as the claimant is current on the payments
required to be made under section 279.37.

new text begin Subd. 2. new text end

new text begin Delinquent taxes. new text end

new text begin The governing body of a county may, by resolution,
allow claimants who would otherwise qualify for a refund, except for a property tax
delinquency under sections 279.02 and 279.03 on the homestead, to be eligible for
the refund but only if the refund is sent by electronic payment to the county where
the homestead on which property taxes are delinquent is located, to be applied to the
claimant's delinquent taxes under section 280.39.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 32.

Minnesota Statutes 2006, section 365.243, is amended by adding a subdivision
to read:

new text begin Subd. 3. new text end

new text begin Levy for first responder association. new text end

new text begin A county board may annually levy
taxes on property located within the area of unorganized territory to which a first responder
or fire protection association provides first responder services. By July 1 of the levy year,
the association must certify to the county board the area of the unorganized township to
which the association will provide first responder services during the following calendar
year. The proceeds of the levy must be distributed to the association.
new text end

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. 33.

Minnesota Statutes 2006, section 365A.095, is amended to read:

365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE new text begin ;
REFUND OF SURPLUS new text end .

new text begin Subdivision 1. new text end

new text begin Petition; procedure. new text end

A petition signed by at least 75 percent of the
property owners in the territory of the subordinate service district requesting the removal
of the district may be presented to the town board. Within 30 days after the town board
receives the petition, the town clerk shall determine the validity of the signatures on
the petition. If the requisite number of signatures are certified as valid, the town board
must hold a public hearing on the petitioned matter. Within 30 days after the end of
the hearing, the town board must decide whether to discontinue the subordinate service
district, continue as it is, or take some other action with respect to it.

new text begin Subd. 2. new text end

new text begin Option to refund surplus. new text end

new text begin If the district is removed under subdivision 1,
after all outstanding obligations of the district have been paid in full, the town board may
vote to refund any surplus tax revenue or service charge, or any part of it, collected from
the district under section 365A.08. The refund must be distributed equally to the owners
of any property within the discontinued district that were charged the extra tax or service
fee during the most recent tax year for which the tax or service fee was imposed. Any
surplus not refunded under this section must be transferred to the town's general fund.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 34.

Minnesota Statutes 2006, section 473.446, subdivision 2, is amended to read:

Subd. 2.

Transit taxing district.

The metropolitan transit taxing district deleted text begin is hereby
designated as that portion of the metropolitan transit area lying within the following
named cities, towns, or unorganized territory within the counties indicated:
deleted text end

deleted text begin (a) Anoka County. Anoka, Blaine, Centerville, Columbia Heights, Coon Rapids,
Fridley, Circle Pines, Hilltop, Lexington, Lino Lakes, Spring Lake Park;
deleted text end

deleted text begin (b) Carver County. Chanhassen, the city of Chaska;
deleted text end

deleted text begin (c) Dakota County. Apple Valley, Burnsville, Eagan, Inver Grove Heights, Lilydale,
Mendota, Mendota Heights, Rosemount, South St. Paul, Sunfish Lake, West St. Paul;
deleted text end

deleted text begin (d) Ramsey County. All of the territory within Ramsey County;
deleted text end

deleted text begin (e) Hennepin County. Bloomington, Brooklyn Center, Brooklyn Park, Champlin,
Chanhassen, Crystal, Deephaven, Eden Prairie, Edina, Excelsior, Golden Valley,
Greenwood, Hopkins, Long Lake, Maple Grove, Medicine Lake, Minneapolis,
Minnetonka, Minnetonka Beach, Mound, New Hope, Orono, Osseo, Plymouth, Richfield,
Robbinsdale, St. Anthony, St. Louis Park, Shorewood, Spring Park, Tonka Bay, Wayzata,
Woodland, the unorganized territory of Hennepin County;
deleted text end

deleted text begin (f) Scott County. Prior Lake, Savage, Shakopee;
deleted text end

deleted text begin (g) Washington County. Baytown, the city of Stillwater, White Bear Lake, Bayport,
Birchwood, Cottage Grove, Dellwood, Lake Elmo, Landfall, Mahtomedi, Newport,
Oakdale, Oak Park Heights, Pine Springs, St. Paul Park, Willernie, Woodbury deleted text end new text begin means the
metropolitan area new text end .

The Metropolitan Council in its sole discretion may provide transit service by
contract deleted text begin beyond the boundaries of the metropolitan transit taxing district or deleted text end to cities and
towns deleted text begin within the taxing district deleted text end which are receiving financial assistance under section
473.388, upon petition therefor by an interested city, township or political subdivision
within the metropolitan transit area. The Metropolitan Council may establish such
terms and conditions as it deems necessary and advisable for providing the transit
service, including such combination of fares and direct payments by the petitioner as
will compensate the council for the full capital and operating cost of the service and the
related administrative activities of the council. The amount of the levy made by any
municipality to pay for the service shall be disregarded when calculation of levies subject
to limitations is made, provided that cities and towns receiving financial assistance under
section 473.388 shall not make a special levy under this subdivision without having first
exhausted the available local transit funds as defined in section 473.388. The council shall
not be obligated to extend service deleted text begin beyond the boundaries of the taxing district, or deleted text end to cities
and towns within the taxing district which are receiving financial assistance under section
473.388, under any law or contract unless or until payment therefor is received.

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. 35.

Minnesota Statutes 2006, section 473.446, subdivision 8, is amended to read:

Subd. 8.

State review.

The commissioner of revenue shall certify the council's levy
limitation under this section to the council by August 1 of the levy year. The council
must certify its proposed property tax levy under this section to the commissioner of
revenue by September 1 of the levy year. The commissioner of revenue shall annually
determine whether the property tax for transit purposes certified by the council for levy
following the adoption of its proposed budget is within the levy limitation imposed by
deleted text begin subdivisions deleted text end new text begin subdivision new text end 1 deleted text begin and 1b deleted text end . deleted text begin The deleted text end deleted text begin commissioner shall also annually determine
whether the transit tax imposed on all taxable property within the metropolitan transit area
but outside of the metropolitan transit taxing district is within the levy limitation imposed
deleted text end deleted text begin by subdivision 1a. deleted text end The determination must be completed prior to September 10 of each
year. If current information regarding market valuation in any county is not transmitted to
the commissioner in a timely manner, the commissioner may estimate the current market
valuation within that county for purposes of making the calculations.

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. 36.

Laws 2008, chapter 154, article 2, section 27, is amended to read:

[360.0427] TAX LEVY MAY BE CERTIFIED BY AN AIRPORT
AUTHORITY.

deleted text begin In any year in which it imposes deleted text end new text begin Imposition of new text end a property tax levy under sections
275.065 to 275.07, deleted text begin which deleted text end requires an affirmative vote of at least two-thirds of the members
of the authority deleted text begin , an airport authority must submit its proposed levy to the governing body
of the municipality that contains the airport. The municipal governing body may approve
or modify the amount of the levy, and, when it has determined the amount, the authority
must certify to the auditor of the county where the airport is located the amount to be
levied on all taxable property within the boundaries of the airport authority deleted text end .

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. 37. new text begin ASSESSMENT OF PROPERTIES OF PURELY PUBLIC CHARITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin To facilitate a review by the 2009 legislature of the
property tax exemption for property of nonprofit organizations as purely public charities
and the development of standards and criteria for the tax status of these facilities, this
section:
new text end

new text begin (1) requires the commissioner of revenue to conduct an analysis of standards applied
to determine the tax status of these organizations; and
new text end

new text begin (2) prohibits changes in assessment practices and policies regarding the property of
these organizations.
new text end

new text begin Subd. 2. new text end

new text begin Report by commissioner of revenue. new text end

new text begin The commissioner of revenue shall
survey all county assessors on the tax status of property of institutions of purely public
charity located in the state, and report the findings to the chairs of the house and senate
Tax Committees by February 1, 2009.
new text end

new text begin Subd. 3. new text end

new text begin Moratorium on changes in assessment practices. new text end

new text begin (a) An assessor
may not change the current practices or policies used generally in assessing property
of institutions of purely public charities.
new text end

new text begin (b) An assessor may not change the assessment of existing property of an
organization of purely public charity, unless the change is made as a result of a change in
ownership, occupancy, or use of the facility, or, for currently taxable properties, a change
in market value of the property.
new text end

new text begin (c) This subdivision expires on the earlier of:
new text end

new text begin (1) the enactment of legislation establishing criteria for the property taxation of
purely public charities; or
new text end

new text begin (2) final adjournment of the 2009 regular legislative session.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 38. new text begin COMFORT LAKE-FOREST LAKE WATERSHED DISTRICT.
new text end

new text begin Notwithstanding any law to the contrary, the Comfort Lake-Forest Lake Watershed
District established under Minnesota Statutes, chapter 103D, shall be considered a
watershed management organization as defined in Minnesota Statutes, section 103B.205,
subdivision 13. The Comfort Lake-Forest Lake Watershed District shall manage or plan
for the management of surface water within the watershed district boundary in Chisago
and Washington Counties as it existed on April 1, 2008, through the authorities contained
in Minnesota Statutes, sections 103B.205 to 103B.255 and chapter 103D.
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. 39. new text begin ST. LOUIS COUNTY; DEBT SERVICE FOR SANITARY DISTRICT
BONDS.
new text end

new text begin In any year in which the revenues derived from the mortgage and deed tax imposed
under Minnesota Statutes, section 383C.799, are insufficient to pay when due one-half of
the debt service on the Duluth-North Shore Sanitary District bonds, series 2002, which
were sold to pay for construction of the sanitary sewer collection system, St. Louis County
must provide to the Duluth-North Shore Sanitary District any additional amount sufficient
to pay the debt service. Total payments for all years under Minnesota Statutes, section
383C.799, and this section must not exceed $4,500,000.
new text end

Sec. 40. new text begin STUDY OF AGRICULTURAL VALUES; REPORT TO THE
LEGISLATURE.
new text end

new text begin The commissioner of revenue shall study the valuation of agricultural property
in the state by creating a study group composed of assessors, agricultural economists,
and representatives of the Department of Agriculture. The results of the study must be
presented to the chairs of the senate and house committees on taxes by January 15, 2009.
new text end

Sec. 41. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, sections 272.027, subdivision 3; 275.025, subdivision 3;
279.01, subdivision 4; and 473.4461, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 3

SENIOR CITIZENS PROPERTY TAX CAP

Section 1.

new text begin [290D.01] MAXIMUM HOMESTEAD PROPERTY TAX PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Maximum homestead property tax. new text end

new text begin The property taxes payable
by a qualified taxpayer on a qualified homestead must not exceed the lesser of (1) the
maximum tax amount determined under subdivision 2, or (2) the amount otherwise
provided by law without regard to the provisions of this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Determination of maximum tax amount. new text end

new text begin The maximum tax amount is
the amount of property taxes payable in the base year, but increased by any tax amounts
attributable to (1) an increase after the base year in the square footage of the dwelling,
(2) the market value of any other improvements made after the base year exceeding 15
percent of the estimated market value of the homestead for the assessment year prior to
the year the improvements are initially assessed, or (3) voter-approved levies exceeding
the amount attributable to voter-approved levies in the base year.
new text end

Sec. 2.

new text begin [290D.02] DEFINITIONS.
new text end

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

new text begin (b) "Base year" means the taxes payable year in which the taxpayer is qualified
and in which the taxpayer has applied to the commissioner of revenue and been initially
approved for the program for taxes payable in the following year by the commissioner
under section 290D.04.
new text end

new text begin (c) "Property taxes payable" means the net property taxes payable on the qualified
homestead excluding special assessments, interest, and penalties, and before any refund
under chapter 290A.
new text end

new text begin (d) "Qualified homestead" means the dwelling occupied as the taxpayer's principal
residence and so much of the land surrounding it as is reasonably necessary for use of
the dwelling as a home and any other property used for purposes of a homestead as
defined in section 273.13, subdivisions 22 and 23, but not to exceed the immediately
surrounding one acre of land in the case of homestead property classified under section
273.13, subdivision 23. The homestead may be part of a multidwelling building and the
land on which it is built.
new text end

new text begin (e) "Qualified taxpayer" means a person who meets the program participation
requirements in section 290D.03.
new text end

Sec. 3.

new text begin [290D.03] PROGRAM PARTICIPATION REQUIREMENTS;
QUALIFIED TAXPAYER.
new text end

new text begin The qualifications for participation in the maximum homestead property tax program
are as follows:
new text end

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

new text begin (2) the taxpayer's total household income, as defined in section 290A.03, subdivision
5, for the calendar year preceding the year of the initial application may not exceed
$40,000; and
new text end

new text begin (3) the homestead must have been owned and occupied as the homestead of at least
one of the taxpayers for at least 25 years prior to the year the initial application is filed,
regardless of whether the property is titled in the name of one spouse or both spouses, or a
surviving spouse, or titled in any other way that permits the property to have homestead
classification.
new text end

Sec. 4.

new text begin [290D.04] APPLICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Initial application. new text end

new text begin A qualified taxpayer may apply to the
commissioner of revenue for participation in the program. Applications are due on
or before June 1 for taxes payable the following year. A taxpayer may apply in the
year in which the taxpayer becomes 65 years old. The application, prescribed by the
commissioner of revenue, must include:
new text end

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

new text begin (2) a copy of the property tax statement for the current payable year for the
homestead property;
new text end

new text begin (3) the initial year of ownership and occupancy as a homestead;
new text end

new text begin (4) the owner's household income for the previous calendar year; and
new text end

new text begin (5) any other information the commissioner deems necessary.
new text end

new text begin Subd. 2. new text end

new text begin Approval; notification. new text end

new text begin The commissioner shall approve an initial
application that qualifies under this chapter and shall notify the taxpayer on or before
September 1. The commissioner may investigate the facts or require confirmation in
regard to an application.
new text end

new text begin Subd. 3. new text end

new text begin Excess-income certification by taxpayer. new text end

new text begin The maximum tax amount does
not apply for any assessment year for a taxpayer whose total household income for the
previous year exceeds $40,000. A taxpayer whose initial application has been approved
under subdivision 2 shall notify the commissioner of revenue in writing by June 1 if the
taxpayer's household income for the preceding calendar year exceeded $40,000. The
certification must state the homeowner's total household income for the previous calendar
year. Participation in the program under this chapter is not allowed in any year following
the year in which a program participant filed or should have filed an excess-income
certification under this subdivision, unless the participant has filed a resumption of
eligibility certification as described in subdivision 4. On or before September 1 each year,
the commissioner shall notify the county auditor that the homestead no longer qualifies for
a maximum tax amount.
new text end

new text begin Subd. 4. new text end

new text begin Resumption of eligibility certification by taxpayer. new text end

new text begin A taxpayer who has
previously filed an excess-income certification under subdivision 3 may resume program
participation if the taxpayer's household income for a subsequent year is $40,000 or less.
If the taxpayer chooses to resume program participation, the taxpayer must notify the
commissioner of revenue in writing by June 1 of the year following a calendar year in
which the taxpayer's household income is $40,000 or less. The certification must state
the taxpayer's total household income for the previous calendar year. Once a taxpayer
resumes participation in the program under this subdivision, participation will continue
until the taxpayer files a subsequent excess-income certification under subdivision 3
or until participation is terminated under section 290D.06. On or before September 1,
the commissioner shall notify the county auditor that the homestead qualifies for the
maximum tax amount certified under section 290D.05, subdivision 1. The base year
remains as initially approved under section 290D.02.
new text end

new text begin Subd. 5. new text end

new text begin Penalty for failure to file excess-income certification; investigations. new text end

new text begin (a)
The commissioner shall assess a penalty equal to 20 percent of the reduction in taxes in the
case of a false application, a false certification, or in the case of a required excess-income
certification that was not filed as of the applicable due date. The commissioner shall assess
a penalty equal to 50 percent of the reduction in taxes if the taxpayer knowingly filed a
false application or certification, or knowingly failed to file a required excess-income
certification by the applicable due date. The commissioner shall assess penalties under this
section through the issuance of an order under the provisions of chapter 270C. Persons
affected by a commissioner's order issued under this section may appeal as provided in
chapter 270C.
new text end

new text begin (b) The commissioner may conduct investigations related to initial applications and
excess-income certifications required under this chapter within the period ending 3-1/2
years from the due date of the application or certification.
new text end

Sec. 5.

new text begin [290D.05] CERTIFICATION BY COMMISSIONER; CALCULATION
OF TAX, TAX RATE, AND LEVY BY COUNTY AUDITOR.
new text end

new text begin Subdivision 1. new text end

new text begin Commissioner certification. new text end

new text begin On or before September 1 of the year
of initial application, the commissioner of revenue shall certify to the county auditor of the
county in which the property is located (1) that the property qualifies for the maximum
tax amount, (2) the base year, and (3) the property taxes payable on the property in the
base year.
new text end

new text begin Subd. 2. new text end

new text begin County auditor calculations. new text end

new text begin Each year, the county auditor shall
determine the maximum homestead property tax amount for the property under section
290D.01. This is the amount that must be used for the notice of proposed property taxes
under section 275.065, subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Adjustment of tax rate and levy. new text end

new text begin (a) If requested by the taxing
jurisdiction, the county auditor may estimate the total loss of revenue to the taxing
jurisdiction for taxes levied in the current year under this chapter and adjust the tax rate
accordingly. If the adjustment to the tax rate is made under this subdivision, in the
following levy year the county auditor must adjust the levy of the taxing district to
compensate for the amount of variance between the estimated and actual loss of revenues.
new text end

new text begin (b) If an adjustment is not made under paragraph (a), a taxing jurisdiction may
increase its levy in the following year by the amount of any revenue loss under provisions
of this chapter as certified by the county auditor.
new text end

new text begin (c) A levy adjustment under paragraph (a) or (b) is not subject to any levy limitations.
new text end

Sec. 6.

new text begin [290D.06] TERMINATION OF PROGRAM PARTICIPATION.
new text end

new text begin Participation in the maximum homestead property tax program under this chapter
terminates when one of the following occurs:
new text end

new text begin (1) the property is sold or transferred;
new text end

new text begin (2) all qualifying homeowners have died;
new text end

new text begin (3) the homeowner notifies the commissioner in writing that the homeowner cancels
participation in the program; or
new text end

new text begin (4) the property no longer qualifies as a homestead.
new text end

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective for taxes payable in 2009 and thereafter.
new text end

ARTICLE 4

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

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) new text begin it is not an interest charge domestic international sales corporation under sections
992, 993, 994, and 995 of the Internal Revenue Code;
new text end

new text begin (4) new text end new text begin either new text end (i) deleted text begin 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) deleted text end it has in effect a
valid election under section 936 of the Internal Revenue Code; new text begin or (ii) at least 80 percent
of the gross income from all sources of the corporation in the tax year is active foreign
business income; new text end and

deleted text begin (4) it has $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
deleted text end

new text begin (5) for purposes of this subdivision, active foreign business income means gross
income that is (i) derived from sources without the United States, as defined in subtitle A,
chapter 1, subchapter N, part 1, of the Internal Revenue Code; and (ii) attributable to the
active conduct of a trade or business in a foreign country new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19b, as
amended by Laws 2008, chapter 154, article 3, section 3, is amended to read:

Subd. 19b.

Subtractions from federal taxable income.

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

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

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

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

(4) income as provided under section 290.0802;

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

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

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

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

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

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

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

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

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

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

(15) to the extent included in federal taxable income, compensation paid to a
nonresident who is a service member as defined in United States Code, title 10, section
101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
Law 108-189, section 101(2); deleted text begin and deleted text end

(16) international economic development zone income as provided under section
469.325 new text begin ; and
new text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 290.01, subdivision 19c, as amended by Laws
2008, chapter 154, article 3, section 4, is amended to read:

Subd. 19c.

Corporations; additions to federal taxable income.

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

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

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

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

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

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

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

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

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

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

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

deleted text begin (11) deleted text end the amount of any deemed dividend from a foreign operating corporation
determined pursuant to section 290.17, subdivision 4, paragraph (g) new text begin . The deemed dividend
shall be reduced by the amount of the addition to income required by clauses (19), (20),
(21), and (22) new text end ;

deleted text begin (12) deleted text end new text begin (11) new text end the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

deleted text begin (13) deleted text end new text begin (12) new text end the amount of net income excluded under section 114 of the Internal
Revenue Code;

deleted text begin (14) deleted text end new text begin (13) new text end any increase in subpart F income, as defined in section 952(a) of the
Internal Revenue Code, for the taxable year when subpart F income is calculated without
regard to the provisions of section 103 of Public Law 109-222;

deleted text begin (15) deleted text end new text begin (14) new text end 80 percent of the depreciation deduction allowed under section
168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
the taxpayer has an activity that in the taxable year generates a deduction for depreciation
under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
over the amount of the loss from the activity that is not allowed in the taxable year. In
succeeding taxable years when the losses not allowed in the taxable year are allowed, the
depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;

deleted text begin (16) deleted text end new text begin (15) new text end 80 percent of the amount by which the deduction allowed by section 179 of
the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

deleted text begin (17) deleted text end new text begin (16) new text end to the extent deducted in computing federal taxable income, the amount of
the deduction allowable under section 199 of the Internal Revenue Code;

deleted text begin (18) deleted text end new text begin (17) new text end the exclusion allowed under section 139A of the Internal Revenue Code
for federal subsidies for prescription drug plans; deleted text begin and deleted text end

deleted text begin (19) deleted text end new text begin (18) new text end the amount of expenses disallowed under section 290.10, subdivision 2 new text begin ;
new text end

new text begin (19) an amount equal to the interest and intangible expenses, losses, and costs paid,
accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
of a corporation that is a member of the taxpayer's unitary business group that qualifies
as a foreign operating corporation. For purposes of this clause, intangible expenses and
costs include:
new text end

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

new text begin (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
transactions;
new text end

new text begin (iii) royalty, patent, technical, and copyright fees;
new text end

new text begin (iv) licensing fees; and
new text end

new text begin (v) other similar expenses and costs new text end .

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

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

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

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

new text begin (ii) income from factoring transactions or discounting transactions;
new text end

new text begin (iii) royalty, patent, technical, and copyright fees;
new text end

new text begin (iv) licensing fees; and
new text end

new text begin (v) other similar income.
new text end

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

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

new text begin (21) the dividends attributable to the income of a foreign operating corporation that
is a member of the taxpayer's unitary group in an amount that is equal to the dividends
paid deduction of a real estate investment trust under section 561(a) of the Internal
Revenue Code for amounts paid or accrued by the real estate investment trust to the
foreign operating corporation; and
new text end

new text begin (22) the income of a foreign operating corporation that is a member of the taxpayer's
unitary group in an amount that is equal to gains derived from the sale of real or personal
property located in the United States.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2006, section 290.01, subdivision 19d, as amended by Laws
2008, chapter 154, article 11, section 12, is amended to read:

Subd. 19d.

Corporations; modifications decreasing federal taxable income.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

deleted text begin (10) deleted text end new text begin (9) new text end 80 percent of royalties, fees, or other like income accrued or received from a
foreign operating corporation or a foreign corporation which is part of the same unitary
business as the receiving corporation new text begin , unless the income resulting from such payments or
accruals is income from sources within the United States as defined in subtitle A, chapter
1, subchapter N, part 1, of the Internal Revenue Code new text end ;

deleted text begin (11) deleted text end new text begin (10) new text end income or gains from the business of mining as defined in section 290.05,
subdivision 1, clause (a), that are not subject to Minnesota franchise tax;

deleted text begin (12) deleted text end new text begin (11) new text end the amount of disability access expenditures in the taxable year which are
not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue
Code;

deleted text begin (13) deleted text end new text begin (12) new text end the amount of qualified research expenses not allowed for federal income
tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
that the amount exceeds the amount of the credit allowed under section 290.068;

deleted text begin (14) deleted text end new text begin (13) new text end the amount of salary expenses not allowed for federal income tax purposes
due to claiming the Indian employment credit under section 45A(a) of the Internal
Revenue Code;

deleted text begin (15) deleted text end new text begin (14) new text end for taxable years beginning before January 1, 2008, the amount of the
federal small ethanol producer credit allowed under section 40(a)(3) of the Internal
Revenue Code which is included in gross income under section 87 of the Internal Revenue
Code;

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

deleted text begin (17) deleted text end new text begin (16) new text end any decrease in subpart F income, as defined in section 952(a) of the
Internal Revenue Code, for the taxable year when subpart F income is calculated without
regard to the provisions of section 103 of Public Law 109-222;

deleted text begin (16) deleted text end new text begin (17) new text end in each of the five tax years immediately following the tax year in which
an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
resulting delayed depreciation cannot be less than zero; and

deleted text begin (17) deleted text end new text begin (18) new text end in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the
amount of the addition.

new text begin 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 290.191, subdivision 5, is amended to read:

Subd. 5.

Determination of sales factor.

For purposes of this section, the following
rules apply in determining the sales factor.

(a) The sales factor includes all sales, gross earnings, or receipts received in the
ordinary course of the business, except that the following types of income are not included
in the sales factor:

(1) interest;

(2) dividends;

(3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;

(4) sales of property used in the trade or business, except sales of leased property of
a type which is regularly sold as well as leased;

(5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
Code or sales of stock; and

(6) royalties, fees, or other like income of a type which qualify for a subtraction from
federal taxable income under section 290.01, subdivision 19d(10).

(b) Sales of tangible personal property are made within this state if the property is
received by a purchaser at a point within this state, and the taxpayer is taxable in this state,
regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination
of the property.

(c) Tangible personal property delivered to a common or contract carrier or foreign
vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
regardless of f.o.b. point or other conditions of the sale.

(d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
licensed by a state or political subdivision to resell this property only within the state of
ultimate destination, the sale is made in that state.

(e) Sales made by or through a corporation that is qualified as a domestic
international sales corporation under section 992 of the Internal Revenue Code are not
considered to have been made within this state.

(f) Sales, rents, royalties, and other income in connection with real property is
attributed to the state in which the property is located.

(g) Receipts from the lease or rental of tangible personal property, including finance
leases and true leases, must be attributed to this state if the property is located in this
state and to other states if the property is not located in this state. Receipts from the
lease or rental of moving property including, but not limited to, motor vehicles, rolling
stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
factor to the extent that the property is used in this state. The extent of the use of moving
property is determined as follows:

(1) A motor vehicle is used wholly in the state in which it is registered.

(2) The extent that rolling stock is used in this state is determined by multiplying
the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
which is the miles traveled within this state by the leased or rented rolling stock and the
denominator of which is the total miles traveled by the leased or rented rolling stock.

(3) The extent that an aircraft is used in this state is determined by multiplying the
receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
the number of landings of the aircraft in this state and the denominator of which is the
total number of landings of the aircraft.

(4) The extent that a vessel, mobile equipment, or other mobile property is used in
the state is determined by multiplying the receipts from the lease or rental of the property
by a fraction, the numerator of which is the number of days during the taxable year the
property was in this state and the denominator of which is the total days in the taxable year.

(h) Royalties and other income not described in paragraph (a), clause (6), received
for the use of or for the privilege of using intangible property, including patents,
know-how, formulas, designs, processes, patterns, copyrights, trade names, service names,
franchises, licenses, contracts, customer lists, or similar items, must be attributed to the
state in which the property is used by the purchaser. If the property is used in more
than one state, the royalties or other income must be apportioned to this state pro rata
according to the portion of use in this state. If the portion of use in this state cannot be
determined, the royalties or other income must be excluded from both the numerator
and the denominator. Intangible property is used in this state if the purchaser uses the
intangible property or the rights therein in the regular course of its business operations in
this state, regardless of the location of the purchaser's customers.

(i) Sales of intangible property are made within the state in which the property is
used by the purchaser. If the property is used in more than one state, the sales must be
apportioned to this state pro rata according to the portion of use in this state. If the
portion of use in this state cannot be determined, the sale must be excluded from both the
numerator and the denominator of the sales factor. Intangible property is used in this
state if the purchaser used the intangible property in the regular course of its business
operations in this state.

(j) Receipts from the performance of services must be attributed to the state where
the services are received. For the purposes of this section, receipts from the performance
of services provided to a corporation, partnership, or trust may only be attributed to a state
where it has a fixed place of doing business. If the state where the services are received is
not readily determinable or is a state where the corporation, partnership, or trust receiving
the service does not have a fixed place of doing business, the services shall be deemed
to be received at the location of the office of the customer from which the services were
ordered in the regular course of the customer's trade or business. If the ordering office
cannot be determined, the services shall be deemed to be received at the office of the
customer to which the services are billed.

new text begin (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
from management, distribution, or administrative services performed by a corporation
or trust for a fund of a corporation or trust regulated under United States Code, title 15,
sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
the fund resides. Under this paragraph, receipts for services attributed to shareholders are
determined on the basis of the ratio of: (1) the average of the outstanding shares in the
fund owned by shareholders residing within Minnesota at the beginning and end of each
year; and (2) the average of the total number of outstanding shares in the fund at the
beginning and end of each year. Residence of the shareholder, in the case of an individual,
is determined by the mailing address furnished by the shareholder to the fund. Residence
of the shareholder, when the shares are held by an insurance company as a depositor for
the insurance company policyholders, is the mailing address of the policyholders. In
the case of an insurance company holding the shares as a depositor for the insurance
company policyholders, if the mailing address of the policyholders cannot be determined
by the taxpayer, the receipts must be excluded from both the numerator and denominator.
Residence of other shareholders is the mailing address of the shareholder.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 290.191, subdivision 6, is amended to read:

Subd. 6.

Determination of receipts factor for financial institutions.

(a) For
purposes of this section, the rules in this subdivision and deleted text begin subdivision deleted text end new text begin subdivisions 5,
paragraph (k), and new text end 8 apply in determining the receipts factor for financial institutions.

(b) "Receipts" for this purpose means gross income, including net taxable gain on
disposition of assets, including securities and money market instruments, when derived
from transactions and activities in the regular course of the taxpayer's trade or business.

(c) "Money market instruments" means federal funds sold and securities purchased
under agreements to resell, commercial paper, banker's acceptances, and purchased
certificates of deposit and similar instruments to the extent that the instruments are
reflected as assets under generally accepted accounting principles.

(d) "Securities" means United States Treasury securities, obligations of United States
government agencies and corporations, obligations of state and political subdivisions,
corporate stock, bonds, and other securities, participations in securities backed by
mortgages held by United States or state government agencies, loan-backed securities and
similar investments to the extent the investments are reflected as assets under generally
accepted accounting principles.

(e) Receipts from the lease or rental of real or tangible personal property, including
both finance leases and true leases, must be attributed to this state if the property is
located in this state. Receipts from the lease or rental of tangible personal property that is
characteristically moving property, including, but not limited to, motor vehicles, rolling
stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
factor to the extent that the property is used in this state. The extent of the use of moving
property is determined as follows:

(1) A motor vehicle is used wholly in the state in which it is registered.

(2) The extent that rolling stock is used in this state is determined by multiplying
the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
which is the miles traveled within this state by the leased or rented rolling stock and the
denominator of which is the total miles traveled by the leased or rented rolling stock.

(3) The extent that an aircraft is used in this state is determined by multiplying the
receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
the number of landings of the aircraft in this state and the denominator of which is the
total number of landings of the aircraft.

(4) The extent that a vessel, mobile equipment, or other mobile property is used in
the state is determined by multiplying the receipts from the lease or rental of property by a
fraction, the numerator of which is the number of days during the taxable year the property
was in this state and the denominator of which is the total days in the taxable year.

(f) Interest income and other receipts from assets in the nature of loans that are
secured primarily by real estate or tangible personal property must be attributed to this state
if the security property is located in this state under the principles stated in paragraph (e).

(g) Interest income and other receipts from consumer loans not secured by real or
tangible personal property that are made to residents of this state, whether at a place
of business, by traveling loan officer, by mail, by telephone or other electronic means,
must be attributed to this state.

(h) Interest income and other receipts from commercial loans and installment
obligations that are unsecured by real or tangible personal property or secured by
intangible property must be attributed to this state if the proceeds of the loan are to be
applied in this state. If it cannot be determined where the funds are to be applied, the
income and receipts are attributed to the state in which the office of the borrower from
which the application would be made in the regular course of business is located. If this
cannot be determined, the transaction is disregarded in the apportionment formula.

(i) Interest income and other receipts from a participating financial institution's
portion of participation and syndication loans must be attributed under paragraphs (e) to
(h). A participation loan is an arrangement in which a lender makes a loan to a borrower
and then sells, assigns, or otherwise transfers all or a part of the loan to a purchasing
financial institution. A syndication loan is a loan transaction involving multiple financial
institutions in which all the lenders are named as parties to the loan documentation, are
known to the borrower, and have privity of contract with the borrower.

(j) Interest income and other receipts including service charges from financial
institution credit card and travel and entertainment credit card receivables and credit
card holders' fees must be attributed to the state to which the card charges and fees are
regularly billed.

(k) Merchant discount income derived from financial institution credit card holder
transactions with a merchant must be attributed to the state in which the merchant is
located. In the case of merchants located within and outside the state, only receipts from
merchant discounts attributable to sales made from locations within the state are attributed
to this state. It is presumed, subject to rebuttal, that the location of a merchant is the
address shown on the invoice submitted by the merchant to the taxpayer.

(l) Receipts from the performance of fiduciary and other services must be attributed
to the state in which the services are received. For the purposes of this section, services
provided to a corporation, partnership, or trust must be attributed to a state where it has a
fixed place of doing business. If the state where the services are received is not readily
determinable or is a state where the corporation, partnership, or trust does not have a fixed
place of doing business, the services shall be deemed to be received at the location of the
office of the customer from which the services were ordered in the regular course of the
customer's trade or business. If the ordering office cannot be determined, the services shall
be deemed to be received at the office of the customer to which the services are billed.

(m) Receipts from the issuance of travelers checks and money orders must be
attributed to the state in which the checks and money orders are purchased.

(n) Receipts from investments of a financial institution in securities and from money
market instruments must be apportioned to this state based on the ratio that total deposits
from this state, its residents, including any business with an office or other place of
business in this state, its political subdivisions, agencies, and instrumentalities bear to the
total deposits from all states, their residents, their political subdivisions, agencies, and
instrumentalities. In the case of an unregulated financial institution subject to this section,
these receipts are apportioned to this state based on the ratio that its gross business income,
excluding such receipts, earned from sources within this state bears to gross business
income, excluding such receipts, earned from sources within all states. For purposes
of this subdivision, deposits made by this state, its residents, its political subdivisions,
agencies, and instrumentalities must be attributed to this state, whether or not the deposits
are accepted or maintained by the taxpayer at locations within this state.

(o) A financial institution's interest in property described in section 290.015,
subdivision 3, paragraph (b), is included in the receipts factor in the same manner as assets
in the nature of securities or money market instruments are included in paragraph (n).

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2006, section 290.34, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Transactions without economic substance. new text end

new text begin (a) When any person,
directly or indirectly, engages in a transaction or series of transactions without economic
substance to create a loss or to reduce taxable income or to increase credits allowed in
determining Minnesota tax, the commissioner must determine the amount of a taxpayer's
taxable income or tax so as to reflect what would have been the taxpayer's taxable income
or tax but for the transaction or transactions without economic substance causing the
reduction in taxable income or tax.
new text end

new text begin (b) A transaction has economic substance only if a taxpayer shows by clear and
convincing evidence:
new text end

new text begin (1) the transaction changes in a meaningful way (apart from federal, state, local, and
foreign tax effects) the taxpayer's economic position; and
new text end

new text begin (2) the taxpayer has a substantial nontax purpose for entering into a transaction and
the transaction is a reasonable means of accomplishing the substantial nontax purpose.
new text end

new text begin A transaction does not have a substantial nontax purpose if it does not have a potential
for profit. A transaction has a substantial nontax purpose when the taxpayer reasonably
expects that the pretax profit for the transaction is substantial in relation to the present
value of the expected net tax benefits that would be allowed if the transaction were
respected for tax purposes, and the reasonably expected pretax profit from the transaction
exceeds the risk-free rate of return.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2006, section 290.92, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(1) Wages. For purposes of this section, the term
"wages" means the same as that term is defined in section 3401(a) and (f) of the Internal
Revenue Code new text begin , except that provisions of section 530 of Public Law 95-600, as amended,
do not apply new text end .

(2) Payroll period. For purposes of this section the term "payroll period" means a
period for which a payment of wages is ordinarily made to the employee by the employee's
employer, and the term "miscellaneous payroll period" means a payroll period other
than a daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual
payroll period.

(3) Employee. For purposes of this section the term "employee" means any resident
individual performing services for an employer, either within or without, or both within
and without the state of Minnesota, and every nonresident individual performing services
within the state of Minnesota, the performance of which services constitute, establish, and
determine the relationship between the parties as that of employer and employee. As
used in the preceding sentence, the term "employee" includes an officer of a corporation,
and an officer, employee, or elected official of the United States, a state, or any political
subdivision thereof, or the District of Columbia, or any agency or instrumentality of
any one or more of the foregoing.

(4) Employer. For purposes of this section the term "employer" means any person,
including individuals, fiduciaries, estates, trusts, partnerships, limited liability companies,
and corporations transacting business in or deriving any income from sources within
the state of Minnesota for whom an individual performs or performed any service, of
whatever nature, as the employee of such person, except that if the person for whom the
individual performs or performed the services does not have control of the payment of
the wages for such services, the term "employer," except for purposes of paragraph (1),
means the person having control of the payment of such wages. As used in the preceding
sentence, the term "employer" includes any corporation, individual, estate, trust, or
organization which is exempt from taxation under section 290.05 and further includes, but
is not limited to, officers of corporations who have control, either individually or jointly
with another or others, of the payment of the wages.

(5) Number of withholding exemptions claimed. For purposes of this section, the
term "number of withholding exemptions claimed" means the number of withholding
exemptions claimed in a withholding exemption certificate in effect under subdivision
5, except that if no such certificate is in effect, the number of withholding exemptions
claimed shall be considered to be zero.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for wages paid after December 31,
2008.
new text end

Sec. 9. new text begin PURPOSE AND EFFECT.
new text end

new text begin It is the intent of the legislature that the provisions of sections 1, 3, 4, and 7, must
not be construed as supplanting any existing Minnesota law.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 10. new text begin TRANSITION; POLLUTION CONTROL FACILITIES
AMORTIZATION.
new text end

new text begin The amount of additions to federal taxable income pursuant to Minnesota Statutes,
section 290.01, subdivision 19c, clause (10), that are properly subtractable pursuant
to Minnesota Statutes, section 290.01, subdivision 19d, clause (8), for taxable years
beginning after December 31, 2007, and have not been subtracted pursuant to Minnesota
Statutes, section 290.01, subdivision 19d, clause (8), are subtractable in the taxpayer's first
taxable year beginning after December 31, 2007.
new text end

ARTICLE 5

SALES AND USE TAX

Section 1.

Minnesota Statutes 2006, section 168.012, subdivision 1, is amended to read:

Subdivision 1.

Vehicles exempt from tax, fees, or plate display.

(a) The following
vehicles are exempt from the provisions of this chapter requiring payment of tax and
registration fees, except as provided in subdivision 1c:

(1) vehicles owned and used solely in the transaction of official business by the
federal government, the state, or any political subdivision;

(2) vehicles owned and used exclusively by educational institutions and used solely
in the transportation of pupils to and from those institutions;

(3) vehicles used solely in driver education programs at nonpublic high schools;

(4) vehicles owned by nonprofit charities and used exclusively to transport disabled
persons for charitable, religious, or educational purposes;

(5) deleted text begin ambulances deleted text end new text begin vehicles new text end owned by ambulance services licensed under section
144E.10 deleted text begin , the general appearance of which is unmistakable deleted text end new text begin that are equipped and
specifically intended for emergency response or providing ambulance service new text end ; and

(6) vehicles owned by a commercial driving school licensed under section 171.34,
or an employee of a commercial driving school licensed under section 171.34, and the
vehicle is used exclusively for driver education and training.

(b) Vehicles owned by the federal government, municipal fire apparatuses including
fire-suppression support vehicles, police patrols, and ambulances, the general appearance
of which is unmistakable, are not required to register or display number plates.

(c) Unmarked vehicles used in general police work, liquor investigations, or arson
investigations, and passenger automobiles, pickup trucks, and buses owned or operated by
the Department of Corrections, must be registered and must display appropriate license
number plates, furnished by the registrar at cost. Original and renewal applications for
these license plates authorized for use in general police work and for use by the Department
of Corrections must be accompanied by a certification signed by the appropriate chief of
police if issued to a police vehicle, the appropriate sheriff if issued to a sheriff's vehicle,
the commissioner of corrections if issued to a Department of Corrections vehicle, or the
appropriate officer in charge if issued to a vehicle of any other law enforcement agency.
The certification must be on a form prescribed by the commissioner and state that the
vehicle will be used exclusively for a purpose authorized by this section.

(d) Unmarked vehicles used by the Departments of Revenue and Labor and Industry,
fraud unit, in conducting seizures or criminal investigations must be registered and must
display passenger vehicle classification license number plates, furnished at cost by the
registrar. Original and renewal applications for these passenger vehicle license plates
must be accompanied by a certification signed by the commissioner of revenue or the
commissioner of labor and industry. The certification must be on a form prescribed by
the commissioner and state that the vehicles will be used exclusively for the purposes
authorized by this section.

(e) Unmarked vehicles used by the Division of Disease Prevention and Control of the
Department of Health must be registered and must display passenger vehicle classification
license number plates. These plates must be furnished at cost by the registrar. Original
and renewal applications for these passenger vehicle license plates must be accompanied
by a certification signed by the commissioner of health. The certification must be on a
form prescribed by the commissioner and state that the vehicles will be used exclusively
for the official duties of the Division of Disease Prevention and Control.

(f) Unmarked vehicles used by staff of the Gambling Control Board in gambling
investigations and reviews must be registered and must display passenger vehicle
classification license number plates. These plates must be furnished at cost by the
registrar. Original and renewal applications for these passenger vehicle license plates must
be accompanied by a certification signed by the board chair. The certification must be on a
form prescribed by the commissioner and state that the vehicles will be used exclusively
for the official duties of the Gambling Control Board.

(g) All other motor vehicles must be registered and display tax-exempt number
plates, furnished by the registrar at cost, except as provided in subdivision 1c. All
vehicles required to display tax-exempt number plates must have the name of the state
department or political subdivision, nonpublic high school operating a driver education
program, or licensed commercial driving school, plainly displayed on both sides of the
vehicle; except that each state hospital and institution for persons who are mentally ill
and developmentally disabled may have one vehicle without the required identification
on the sides of the vehicle, and county social service agencies may have vehicles used
for child and vulnerable adult protective services without the required identification on
the sides of the vehicle. This identification must be in a color giving contrast with that
of the part of the vehicle on which it is placed and must endure throughout the term of
the registration. The identification must not be on a removable plate or placard and must
be kept clean and visible at all times; except that a removable plate or placard may be
utilized on vehicles leased or loaned to a political subdivision or to a nonpublic high
school driver education program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for registrations and renewals after
June 30, 2008.
new text end

Sec. 2.

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
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; or

(2) an ambulance service licensed under chapter 144E new text begin for use in ambulances and
other emergency response vehicles new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 297A.67, subdivision 28, is amended to read:

Subd. 28.

Ambulance supplies, parts, and equipment.

The following sales to or
use by an ambulance service licensed under section 144E.10 are exempt:

(1) supplies and equipment used to provide medical care; and

(2) repair and replacement parts for ambulances new text begin and vehicles equipped and
specifically intended for emergency response new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2007 Supplement, section 297A.70, subdivision 3, is
amended to read:

Subd. 3.

Sales of certain goods and services to government.

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

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

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

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

(4) telephone services to the Office of Enterprise Technology that are used to provide
telecommunications services through the enterprise technology revolving fund;

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

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

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

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

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

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

new text begin (11) purchases by the Metropolitan Council or the Department of Transportation of
vehicles and repair parts to equip operations provided for in section 174.90, including,
but not limited to, the Northstar Corridor Rail project; and
new text end

new text begin (12) propane-fueled motor vehicles leased by school districts, as defined under
subdivision 2, paragraph (c), and used solely for the purpose of transporting pupils new text end .

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

new text begin (c) For purchases of items listed in paragraph (a), clause (11), the tax must be
imposed and collected as if the rate under section 297A.62, subdivision 1, applied and
then refunded in the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2008, except that for purchases of items listed in paragraph (a), clause (11), it is
effective retroactively for sales and purchases made after December 31, 2006.
new text end

Sec. 5.

Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 40. new text end

new text begin Construction materials; Central Corridor light rail transit. new text end

new text begin Materials
and supplies used or consumed in, and equipment incorporated into, the construction
or improvement of the Central Corridor light rail transit line and associated facilities
including, but not limited to, stations, park-and-ride facilities, and maintenance facilities,
are exempt. The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied and then refunded in the manner provided in section 297A.75.
Refunds must not be applied for or issued until after July 1, 2009.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 41. new text end

new text begin Construction materials; Northstar Corridor rail project. new text end

new text begin Materials
and supplies used or consumed in, and equipment incorporated into, the construction or
improvement of the Northstar Corridor rail project and associated facilities by a public
entity or under a contract with a public entity including, but not limited to, track and signal
improvements, stations, park-and-ride facilities, and maintenance facilities, are exempt.
The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
applied and then refunded in the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after January 1, 2007.
new text end

Sec. 7.

Minnesota Statutes 2006, section 297A.75, is amended to read:

297A.75 REFUND; APPROPRIATION.

Subdivision 1.

Tax collected.

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

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

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

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

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

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

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

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

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

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

(10) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

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

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

new text begin (13) commuter rail vehicle and repair parts under section 297A.70, subdivision
3, clause (11); and
new text end

new text begin (14) materials, supplies, and equipment for construction or improvement of projects
and facilities under section 297A.71, subdivisions 40 and 41 new text end .

Subd. 2.

Refund; eligible persons.

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

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

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

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

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

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

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

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

new text begin (8) for subdivision 1, clauses (13) and (14), the applicant must be the governmental
entity that owns or contracts for the project or facility new text end .

Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10),
(11), deleted text begin or deleted text end (12) new text begin , (13), or (14) new text end , the contractor, subcontractor, or builder must furnish to the
refund applicant a statement including the cost of the exempt items and the taxes paid on
the items unless otherwise specifically provided by this subdivision. The provisions of
sections 289A.40 and 289A.50 apply to refunds under this section.

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

new text begin (c) Total refunds for purchases of items in sections 297A.70, subdivision 3,
paragraph (a), clause (11), and 297A.71, subdivision 41, must not exceed $3,100,000 in
fiscal year 2009. Applications for refunds for purchases of items in sections 297A.70,
subdivision 3, paragraph (a), clause (11), and 297A.71, subdivision 41, must not be filed
until after June 30, 2008.
new text end

Subd. 4.

Interest.

Interest must be paid on the refund at the rate in section 270C.405
from 90 days after the refund claim is filed with the commissioner for taxes paid under
subdivision 1.

Subd. 5.

Appropriation.

The amount required to make the refunds is annually
appropriated to the commissioner.

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 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, 1999;

(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 ; and
new text end

new text begin (14) propane-fueled motor vehicles purchased by school districts and used solely for
the purpose of transporting pupils new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended by
Laws 1998, chapter 389, article 8, section 28, is amended to read:

Subd. 3.

Use of revenues.

Revenues received from taxes authorized by subdivisions
1 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or a
portion of the expenses of constructing and deleted text begin operating deleted text end new text begin improving new text end facilities as part of an
urban revitalization project in downtown Mankato known as Riverfront 2000. Authorized
expenses include, but are not limited to, acquiring property and paying relocation expenses
related to the development of Riverfront 2000 and related facilities, and securing or paying
debt service on bonds or other obligations issued to finance the construction of Riverfront
2000 and related facilities. For purposes of this section, "Riverfront 2000 and related
facilities" means a civic-convention center, an arena, a riverfront park, a technology center
and related educational facilities, and all publicly owned real or personal property that
the governing body of the city determines will be necessary to facilitate the use of these
facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and
landscaping. new text begin It also includes the performing arts theatre and the Southern Minnesota
Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by
Minnesota State University, Mankato.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Laws 1991, chapter 291, article 8, section 27, subdivision 4, as amended by
Laws 2005, First Special Session chapter 3, article 5, section 25, is amended to read:

Subd. 4.

Expiration of taxing authority and expenditure limitation.

The
authority granted by subdivisions 1 and 2 to the city to impose a sales tax and an excise
tax shall expire on December 31, deleted text begin 2015, unless sufficient revenues are not available to
defease any bonds or obligations issued to finance construction of Riverfront 2000 and
related facilities. If sufficient funds are not available to defease the bonds, the tax expires
December 31, 2018, but all revenues from taxes imposed after December 31, 2015, must
be used to defease the bonds deleted text end new text begin 2025 new text end . The city may, by ordinance, terminate the tax at
an earlier date.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Laws 1998, chapter 389, article 8, section 45, subdivision 3, is amended to
read:

Subd. 3.

Use of revenues.

Revenues received from the taxes authorized under
subdivision 1 must be used for sanitary sewer separation, wastewater treatment, new text begin water
system improvements, new text end and harbor refuge development projects.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to
read:

Subdivision 1.

Sales and use tax.

Notwithstanding Minnesota Statutes, section
deleted text begin 297A.48, subdivision 1a, deleted text end 477A.016, or any other provision of law, ordinance, or city
charter, if approved by the city voters at the first municipal general election held after the
date of final enactment of this act or at a special election held November 2, 1999, the city
of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent
for the purposes specified in subdivision 3. The provisions of Minnesota Statutes, section
, govern the imposition, administration, collection, and enforcement of
the tax authorized under this subdivision.

Sec. 13.

Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to
read:

Subd. 3.

Use of revenues.

new text begin (a) new text end Revenues received from taxes authorized by
subdivisions 1 and 2 must be used by the city to pay the cost of collecting the taxes and to
pay for construction and improvement of the following city facilities:

(1) streets; and

(2) constructing and equipping the Proctor community activity center.

Authorized expenses include, but are not limited to, acquiring property, paying
construction and operating expenses related to the development of an authorized facility,
and paying debt service on bonds or other obligations, including lease obligations, issued
to finance the construction, expansion, or improvement of an authorized facility. The
capital expenses for all projects authorized under this paragraph that may be paid with
these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance
of the bonds.

new text begin (b) Additional revenues received from taxes authorized by subdivision 1, may be
used by the city to pay for the following capital improvement projects: public utilities,
including water, sanitary sewer, storm sewer, and electric; sidewalks; bikeways and trails;
and parks and recreation.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to
read:

Subd. 4.

Bonding authority.

(a) The city may issue bonds under Minnesota
Statutes, chapter 475, to finance the capital expenditure and improvement projects
described in subdivision 3. An election to approve the bonds under Minnesota Statutes,
section 475.58, is not required.

(b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes,
sections 275.60 and .

(c) The bonds are not included in computing any debt limitation applicable to the
city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of
and interest on the bonds is not subject to any levy limitation.

(d) new text begin For projects described in subdivision 3, paragraph (a), new text end the aggregate principal
amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital
expenditures and improvements, may not exceed $3,600,000, plus an amount equal to
the costs related to issuance of the bonds, including interest on the bonds. new text begin For projects
described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may
not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds,
including interest on the bonds.
new text end

(e) The sales and use and excise taxes authorized in this section may be pledged to
and used for the payment of the bonds and any bonds issued to refund them only if the
bonds and any refunding bonds are general obligations of the city.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15. new text begin CITY OF CLEARWATER; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, pursuant to the
approval of the voters on November 7, 2006, the city of Clearwater may impose by
ordinance a sales and use tax of up to one-half of one percent for the purposes specified in
subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota
Statutes, section 297A.99, govern the imposition, administration, collection, and
enforcement of the tax authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Excise tax authorized. new text end

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

new text begin Subd. 3. new text end

new text begin Use of revenues. new text end

new text begin The proceeds of the tax imposed under this section shall
be used to pay for the costs of acquisition, construction, improvement, and development
of regional parks and trails, a pedestrian bridge, and land and buildings for a community
and recreation center.
new text end

new text begin Subd. 4. new text end

new text begin Bonding authority. new text end

new text begin The city of Clearwater may issue bonds in an amount
not to exceed $15,000,000 under Minnesota Statutes, chapter 475, to finance the capital
expenditures and improvements authorized by the referendum under subdivision 3. An
election to approve the bonds under Minnesota Statutes, section 475.59, is not required.
The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section
275.60 or 275.61. The debt represented by the bonds must not be included in computing
any debt limitations applicable to the city, and the levy of taxes required by Minnesota
Statutes, section 475.61, to pay the principal or any interest on the bonds must not be
subject to any levy limitation.
new text end

new text begin Subd. 5. new text end

new text begin Termination of tax. new text end

new text begin The tax authorized under subdivision 1 terminates at
the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the
city council determines that sufficient funds have been raised from the tax to finance the
capital and administrative costs of the improvements described in subdivision 3, plus the
additional amount needed to pay the costs related to issuance of bonds under subdivision
4, including interest on the bonds. Any funds remaining after completion of the projects
specified in subdivision 3 and retirement or redemption of the bonds in subdivision 4 may
be placed in the general fund of the city. The tax imposed under subdivision 1 may expire
at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after compliance by the
governing body of the city of Clearwater with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
new text end

Sec. 16. new text begin CITY OF CLOQUET; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax. new text end

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

new text begin Subd. 2. new text end

new text begin Excise tax authorized. new text end

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

new text begin Subd. 3. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from taxes authorized by subdivisions
1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for
the following projects: construction and completion of park improvement projects,
including, but not limited to, reconstruction of a community swimming pool complex and
all associated improvements; St. Louis River Riverfront improvements; Veteran's Park
construction and improvements; construction of a community center; improvements to
the Hilltop Park soccer complex, Braun Park baseball complex, Athletic Park, Sunnyside
Park, and Cloquet Area Recreation Center/Pine Valley Arena; and development of
pedestrian trails within the city.
new text end

new text begin Authorized expenses include, but are not limited to, acquiring property and paying
construction expenses related to these improvements, and paying debt service on bonds or
other obligations issued to finance acquisition and construction of these improvements.
new text end

new text begin Subd. 4. new text end

new text begin Bonding authority. new text end

new text begin (a) The city may issue bonds under Minnesota
Statutes, chapter 475, to pay capital and administrative expenses for the improvements
described in subdivision 3 in an amount that does not exceed $7,500,000. An election to
approve the bonds under Minnesota Statutes, section 475.58, is not required.
new text end

new text begin (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes,
sections 275.60 and 275.61.
new text end

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

new text begin Subd. 5. new text end

new text begin Termination of taxes. new text end

new text begin The taxes imposed under subdivisions 1 and 2
expire at the earlier of (1) 30 years, or (2) when the city council determines that the amount
of revenues received from the taxes to finance the improvements described in subdivision
3 first equals or exceeds $7,500,000, plus the additional amount needed to pay the costs
related to issuance of bonds under subdivision 4, including interest on the bonds. Any
funds remaining after completion of the project and retirement or redemption of the bonds
may be placed in the general fund of the city. The taxes imposed under subdivisions 1 and
2 may expire at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 17. new text begin COOK COUNTY; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, if approved by the
voters at a general or special election held before December 31, 2009, Cook County
may impose by ordinance a sales and use tax of up to one percent for the purposes
specified in subdivision 2. Except as otherwise provided in this section, the provisions
of Minnesota Statutes, section 297A.99, govern the imposition of the tax authorized
under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from the tax authorized by
subdivision 1 must be used by Cook County to pay the costs of collecting the tax and
to pay for the following projects:
new text end

new text begin (1) construction and improvements to a county community center and recreation
area, including, but not limited to, improvements and additions to the skateboard park,
hockey rink, ball fields, community center addition, county parking area, tennis courts,
and all associated improvements;
new text end

new text begin (2) construction and improvements to the Grand Marais pool; and
new text end

new text begin (3) construction and improvements to the Grand Marais Public Library.
new text end

new text begin Authorized expenses include, but are not limited to, paying construction expenses related
to these improvements, and paying debt service on bonds or other obligations issued to
finance acquisition and construction of these improvements.
new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin Cook County may issue bonds under Minnesota
Statutes, chapter 475, to pay capital and administrative expenses for the projects authorized
in subdivision 2, in an amount that does not exceed $14,000,000. An election to approve
the bonds under Minnesota Statutes, section 475.58, is not required. The issuance of bonds
under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61.
The debt represented by the bonds is not included in computing any debt limitation
applicable to the county, and any levy of taxes under Minnesota Statutes, section 475.61,
to pay principal and interest on the bonds is not subject to any levy limitation.
new text end

new text begin Subd. 4. new text end

new text begin Termination of tax. new text end

new text begin The tax imposed under subdivision 1 expires at the
later of (1) 20 years or (2) when the county board determines that the amount of revenues
received is sufficient to pay for the principal and interest on any bonds or obligation
issued to finance the projects in subdivision 2. Any funds remaining after completion of
the projects and retirement or redemption of the bonds may be placed in the general fund
of the county. The tax imposed under subdivision 1 may expire at an earlier time if the
county board so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 18. new text begin CITY OF ELY; SALES AND USE TAX.
new text end

new text begin Subdivision 1. new text end

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

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, if approved by
the voters pursuant to Minnesota Statutes, section 297A.99, the city of Ely may impose by
ordinance a sales and use tax of up to one percent for the purposes specified in subdivision
3. Except as otherwise provided in this section, the provisions of Minnesota Statutes,
section 297A.99, govern the imposition, administration, collection, and enforcement of
the tax authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Excise tax authorized. new text end

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

new text begin Subd. 3. new text end

new text begin Use of revenues. new text end

new text begin The proceeds of the tax imposed under this section
must be used by the city of Ely to pay the costs of collecting and administering the tax
and to pay the following costs:
new text end

new text begin (1) establishment of an entry to the Boundary Waters that includes the chamber of
commerce, visitor center, and related facilities;
new text end

new text begin (2) construction of a pool facility that would support Independent School District
No. 696 and Ely Bloomenson Community Hospital;
new text end

new text begin (3) infrastructure improvement related to the expansion of the Ely Bloomenson
Community Hospital; and
new text end

new text begin (4) community center use transition to establish the Boundary Waters Historical
Center and provide for compliance with the Americans with Disabilities Act.
new text end

new text begin Subd. 4. new text end

new text begin Bonding authority. new text end

new text begin (a) If the tax authorized under subdivision 1 is
approved by the voters, the city of Ely may issue bonds under Minnesota Statutes,
chapter 475, to pay the capital and administrative expenses for the improvement projects
authorized under subdivision 2. The total amount of bonds issued for the projects listed in
subdivision 3 may not exceed $15,000,000 in aggregate. An election to approve the bonds
under Minnesota Statutes, section 475.58, is not required.
new text end

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

new text begin Subd. 5. new text end

new text begin Termination of tax. new text end

new text begin The tax authorized under this section expires when
the city council determines that the taxes imposed under this subdivision have raised
revenue sufficient to pay the bonds authorized in subdivision 4, including administrative
costs and interest.
new text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 19. new text begin CITY OF MANKATO; LOCAL TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Food and beverage tax authorized. new text end

new text begin Notwithstanding Minnesota
Statutes, section 477A.016, or any ordinance, city charter, or other provision of law, the
city of Mankato may, by ordinance, impose a sales tax of up to one percent on the gross
receipts on all sales of food and beverages by a restaurant or place of refreshment, as
defined by resolution of the city, that are located within the city. For purposes of this
section, "food and beverages" include retail on-sale of intoxicating liquor and fermented
malt beverages.
new text end

new text begin Subd. 2. new text end

new text begin Entertainment tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any ordinance, city charter, or other provision of law, the city of Mankato
may, by ordinance, impose a tax of up to one percent on the gross receipts on admissions to
an entertainment event located within the city. For purposes of this section "entertainment
event" means any event for which persons pay money in order to be admitted to the
premises and to be entertained including, but not limited to, theaters, concerts, and
sporting events.
new text end

new text begin Subd. 3. new text end

new text begin Use of proceeds from authorized taxes. new text end

new text begin The proceeds of any tax imposed
under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses
of operation and maintenance of the Riverfront 2000 and related facilities, including a
performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center,
attached to the Mankato Civic Center for use by Minnesota State University, Mankato.
Authorized expenses include securing or paying debt service on bonds or other obligations
issued to finance the construction of the facilities.
new text end

new text begin Subd. 4. new text end

new text begin Collection, administration, and enforcement. new text end

new text begin If the city desires, it may
enter into an agreement with the commissioner of revenue to administer, collect, and
enforce the taxes authorized under subdivisions 1 and 2. If the commissioner agrees
to collect the tax, the provisions of Minnesota Statutes, section 297A.99, related to
collection, administration, and enforcement apply.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 20. new text begin MINNETONKA WATER TREATMENT FACILITY.
new text end

new text begin Capital equipment used in or incorporated into the construction of a water treatment
facility owned by the city of Minnetonka is exempt from sales tax regardless of whether
purchased by the owner, contractor, subcontractor, or builder. The tax must be imposed
and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1,
applied and then refunded to the city of Minnetonka in the manner provided in Minnesota
Statutes, section 297A.75. Refunds must not be issued until after July 1, 2008.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made before December 31, 2006.
new text end

Sec. 21. new text begin CITY OF NORTH MANKATO; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

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

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
the approval of the voters on November 7, 2006, the city of North Mankato may impose
by ordinance a sales and use tax of one-half of one percent for the purposes specified
in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the
imposition, administration, collection, and enforcement of the taxes authorized under
this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from the tax authorized by
subdivision 1 must be used to pay all or part of the capital costs of the following projects:
new text end

new text begin (1) the local share of the Trunk Highway 14/County State Aid Highway 41
interchange project;
new text end

new text begin (2) development of regional parks and hiking and biking trails;
new text end

new text begin (3) expansion of the North Mankato Taylor Library;
new text end

new text begin (4) riverfront redevelopment; and
new text end

new text begin (5) lake improvement projects.
new text end

new text begin The total amount of revenues from the tax in subdivision 1 that may be used to fund
these projects is $6,000,000 plus any associated bond costs.
new text end

new text begin Subd. 3. new text end

new text begin Bonds. new text end

new text begin (a) The city of North Mankato, pursuant to the approval of the
voters at the November 7, 2006, referendum authorizing the imposition of the taxes in
this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
administrative expenses for the projects described in subdivision 2, in an amount that
does not exceed $6,000,000. A separate election to approve the bonds under Minnesota
Statutes, section 475.58, is not required.
new text end

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

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires
when the city council determines that the amount of revenues received from the taxes
to pay for the projects under subdivision 2, first equals or exceeds $6,000,000 plus the
additional amount needed to pay the costs related to issuance of bonds under subdivision
3, including interest on the bonds. Any funds remaining after completion of the projects
and retirement or redemption of the bonds shall be placed in a capital facilities and
equipment replacement fund of the city. The tax imposed under subdivision 1 may expire
at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 22. new text begin CITY OF WINONA; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, if approved by the
voters at a general or special election held before December 31, 2009, the city of Winona
may impose by ordinance a sales and use tax of up to one-half of one percent for the
purpose specified in subdivision 2. Except as otherwise provided in this section, the
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin The proceeds of the tax imposed under this section shall
be used to pay the city-borne costs for the construction of a street connection from the city
of Winona to Minnesota State Highways 61 and 43. The construction will provide access
to the city's newly built industrial park and additional access to a hospital.
new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin The city of Winona may issue bonds in an amount
not to exceed $8,000,000 under Minnesota Statutes, chapter 475, to finance the capital
expenditures under subdivision 2. An election to approve the bonds under Minnesota
Statutes, section 475.58, is not required. The issuance of bonds under this subdivision is
not subject to Minnesota Statutes, section 275.60 or 275.61. The debt represented by the
bonds must not be included in computing any debt limitations applicable to the city, and
the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal or
any interest on the bonds must not be subject to any levy limitation.
new text end

new text begin Subd. 4. new text end

new text begin Termination of tax. new text end

new text begin The tax authorized under subdivision 1 terminates
at the earlier of: (1) five years after the date of initial imposition of the tax; or (2) when
the city council determines that sufficient funds have been raised from the tax to finance
the capital and administrative costs of the project described in subdivision 2, plus the
additional amount needed to pay the costs related to issuance of bonds under subdivision
3, including interest on the bonds. Any funds remaining after completion of the project
specified in subdivision 2 and retirement or redemption of the bonds in subdivision 3 may
be placed in the general fund of the city. The tax imposed under subdivision 1 may expire
at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after compliance by
the governing body of the city of Winona with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
new text end

Sec. 23. new text begin REPEALER.
new text end

new text begin Laws 2005, First Special Session chapter 3, article 5, section 24, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon enactment of section 9.
new text end

ARTICLE 6

JUNE ACCELERATED TAX PAYMENTS

Section 1.

Minnesota Statutes 2006, section 289A.20, subdivision 4, as amended by
Laws 2008, chapter 154, article 6, section 1, is amended to read:

Subd. 4.

Sales and use tax.

(a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following the
month in which the taxable event occurred, or following another reporting period as the
commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
(f) or (g), except that use taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.

(b) A vendor having a liability of $120,000 or more during a fiscal year ending June
30 must remit the June liability for the next year in the following manner:

(1) Two business days before June 30 of the year, the vendor must remit deleted text begin 80 deleted text end new text begin 90 new text end
percent of the estimated June liability to the commissioner.

(2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.

(c) A vendor having a liability of:

(1) $20,000 or more in the fiscal year ending June 30, 2005; or

(2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years
thereafter,

must remit all liabilities on returns due for periods beginning in the subsequent calendar
year by electronic means on or before the 20th day of the month following the month in
which the taxable event occurred, or on or before the 20th day of the month following the
month in which the sale is reported under section 289A.18, subdivision 4, except for deleted text begin 80 deleted text end new text begin 90 new text end
percent of the estimated June liability, which is due two business days before June 30. The
remaining amount of the June liability is due on August 20.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with June 2009 tax
liabilities.
new text end

Sec. 2.

Minnesota Statutes 2006, section 289A.60, subdivision 15, as amended by
Laws 2008, chapter 154, article 6, section 2, is amended to read:

Subd. 15.

Accelerated payment of June sales tax liability; penalty for
underpayment.

For payments made after December 31, 2006, if a vendor is required by
law to submit an estimation of June sales tax liabilities and deleted text begin 80 deleted text end new text begin 90 new text end percent payment by a
certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual
June liability required to be paid in June less the amount remitted in June. The penalty
must not be imposed, however, if the amount remitted in June equals the lesser of deleted text begin 80 deleted text end new text begin 90 new text end
percent of the preceding May's liability or deleted text begin 80 deleted text end new text begin 90 new text end percent of the average monthly liability
for the previous calendar year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with June 2009 tax
liabilities.
new text end

Sec. 3.

Minnesota Statutes 2006, section 297F.09, subdivision 10, as amended by Laws
2008, chapter 154, article 6, section 3, is amended to read:

Subd. 10.

Accelerated tax payment; cigarette or tobacco products distributor.

A cigarette or tobacco products distributor having a liability of $120,000 or more during a
fiscal year ending June 30, shall remit the June liability for the next year in the following
manner:

(a) Two business days before June 30 of the year, the distributor shall remit the
actual May liability and deleted text begin 80 deleted text end new text begin 90 new text end percent of the estimated June liability to the commissioner
and file the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the distributor shall submit a return showing
the actual June liability and pay any additional amount of tax not remitted in June. A
penalty is imposed equal to ten percent of the amount of June liability required to be paid
in June, less the amount remitted in June. However, the penalty is not imposed if the
amount remitted in June equals the lesser of:

(1) deleted text begin 80 deleted text end new text begin 90 new text end percent of the actual June liability; or

(2) deleted text begin 80 deleted text end new text begin 90 new text end percent of the preceding May's liability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with June 2009 tax
liabilities.
new text end

Sec. 4.

Minnesota Statutes 2006, section 297G.09, subdivision 9, as amended by Laws
2008, chapter 154, article 6, section 4, is amended to read:

Subd. 9.

Accelerated tax payment; penalty.

A person liable for tax under this
chapter having a liability of $120,000 or more during a fiscal year ending June 30, shall
remit the June liability for the next year in the following manner:

(a) Two business days before June 30 of the year, the taxpayer shall remit the actual
May liability and deleted text begin 80 deleted text end new text begin 90 new text end percent of the estimated June liability to the commissioner and file
the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the taxpayer shall submit a return showing
the actual June liability and pay any additional amount of tax not remitted in June. A
penalty is imposed equal to ten percent of the amount of June liability required to be paid
in June less the amount remitted in June. However, the penalty is not imposed if the
amount remitted in June equals the lesser of:

(1) deleted text begin 80 deleted text end new text begin 90 new text end percent of the actual June liability; or

(2) deleted text begin 80 deleted text end new text begin 90 new text end percent of the preceding May liability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with June 2009 tax
liabilities.
new text end

ARTICLE 7

SPECIAL TAXES

Section 1.

Minnesota Statutes 2006, section 60A.196, is amended to read:

60A.196 DEFINITIONS.

Unless the context otherwise requires, the following terms have the meanings given
them for the purposes of sections 60A.195 to 60A.209:

(a) "Surplus lines insurance" means insurance placed with an insurer permitted
to transact the business of insurance in this state only pursuant to sections 60A.195 to
60A.209.

(b) "Eligible surplus lines insurer" means an insurer recognized as eligible to write
insurance business under sections 60A.195 to 60A.209 but not licensed by any other
Minnesota law to transact the business of insurance.

(c) "Ineligible surplus lines insurer" means an insurer not recognized as an eligible
surplus lines insurer pursuant to sections 60A.195 to 60A.209 and not licensed by any
other Minnesota law to transact the business of insurance. "Ineligible surplus lines
insurer" includes a risk retention group as defined under the Liability Risk Retention
Act, Public Law 99-563.

(d) "Surplus lines licensee" or "licensee" means a person licensed under sections
60A.195 to 60A.209 to place insurance with an eligible or ineligible surplus lines insurer.

(e) "Association" means an association registered under section 60A.208.

(f) "Alien insurer" means any insurer which is incorporated or otherwise organized
outside of the United States.

(g) "Insurance laws" means chapters 60 to 79 inclusive.

new text begin (h) "Stamping" means electronically assigning a unique identifying number that is
specific to a submitted policy, contract, or insurance document.
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 policies written or renewed on or after that date.
new text end

Sec. 2.

new text begin [60A.2085] SURPLUS LINES ASSOCIATION OF MINNESOTA.
new text end

new text begin Subdivision 1. new text end

new text begin Association created; duties. new text end

new text begin There is hereby created a nonprofit
association to be known as the Surplus Lines Association of Minnesota. All surplus lines
licensees are members of this association. Section 60A.208, subdivision 5, does not apply
to the provisions of this section. The association shall perform its functions under the
plan of operation established under subdivision 3 and must exercise its powers through a
board of directors established under subdivision 2. The association shall be authorized
and have the duty to:
new text end

new text begin (1) receive, record, and stamp all surplus lines insurance documents that surplus
lines licensees are required to file with the association;
new text end

new text begin (2) prepare and deliver monthly to the commissioners of revenue and commerce a
report regarding surplus lines business. The report must include a list of all the business
procured during the preceding month, in the form the commissioners prescribe;
new text end

new text begin (3) educate its members regarding the surplus lines law of this state including
insurance tax responsibilities and the rules and regulations of the commissioners of
revenue and commerce relative to surplus lines insurance;
new text end

new text begin (4) communicate with organizations of agents, brokers, and admitted insurers with
respect to the proper use of the surplus lines market;
new text end

new text begin (5) employ and retain persons necessary to carry out the duties of the association;
new text end

new text begin (6) borrow money necessary to effect the purposes of the association;
new text end

new text begin (7) enter contracts necessary to effect the purposes of the association;
new text end

new text begin (8) provide other services to its members that are incidental or related to the
purposes of the association; and
new text end

new text begin (9) take other actions reasonably required to implement the provisions of this section.
new text end

new text begin Subd. 2. new text end

new text begin Board of directors. new text end

new text begin (a) The commissioner shall appoint an interim board
of five directors within 30 days of enactment of this section. The interim board must:
new text end

new text begin (1) establish a plan of operation within 60 days after the appointment of the interim
board;
new text end

new text begin (2) create a stamping office that is operational no later than December 31, 2008; and
new text end

new text begin (3) conduct an election for a board of directors by the membership after December
31, 2008, and no later than one year after the appointment of the interim board.
new text end

new text begin (b) Once the responsibilities of the interim board in paragraph (a) are fulfilled, the
association shall function through a board of directors composed of the following:
new text end

new text begin (1) one director appointed by the commissioner of revenue;
new text end

new text begin (2) one director appointed by the commissioner of commerce; and
new text end

new text begin (3) at least five but no more than seven directors elected by the members. The
elected directors must be members of the association.
new text end

new text begin Directors may serve until their successors are appointed or elected and their terms
are completed as outlined in the plan of operation.
new text end

new text begin Subd. 3. new text end

new text begin Plan of operation. new text end

new text begin (a) The plan of operation shall provide for the
formation, operation, and governance of the association. The plan of operation must
provide for the election of a board of directors by the members of the association. The
board of directors shall elect officers as provided for in the plan of operation. The plan
of operation shall establish the manner of voting and may weigh each member's vote to
reflect the annual surplus lines insurance premium written by the member. Members
employed by the same or affiliated employers may consolidate their premiums written
and delegate an individual officer or partner to represent the member in the exercise of
association affairs, including service on the board of directors.
new text end

new text begin (b) The plan of operation shall provide for an independent audit once each year of all
the books and records of the association and a report of such independent audit shall be
made to the board of directors, the commissioner of revenue, and the commissioner of
commerce, with a copy made available to each member to review at the association office.
new text end

new text begin (c) The plan of operation and any amendments to the plan of operation shall be
submitted to the commissioner and shall be effective upon approval in writing by the
commissioner. The association and all members shall comply with the plan of operation or
any amendments to it. Failure to comply with the plan of operation or any amendments
shall constitute a violation for which the commissioner may issue an order requiring
discontinuance of the violation.
new text end

new text begin (d) If the interim board of directors fails to submit a suitable plan of operation
within 60 days following the creation of the interim board, or if at any time thereafter the
association fails to submit required amendments to the plan, the commissioner may submit
to the association a plan of operation or amendments to the plan, which the association
must follow. The plan of operation or amendments submitted by the commissioner shall
continue in force until amended by the commissioner or superseded by a plan of operation
or amendment submitted by the association and approved by the commissioner. A plan
of operation or an amendment submitted by the commissioner constitutes an order of
the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Reporting requirement. new text end

new text begin The association shall file with the commissioner:
new text end

new text begin (1) a copy of its plan of operation and any amendments to it;
new text end

new text begin (2) a current list of its members revised at least annually; and
new text end

new text begin (3) the name and address of a member of the board residing in this state upon
whom notices or orders of the commissioner or processes issued at the direction of the
commissioner may be served.
new text end

new text begin Subd. 5. new text end

new text begin Examination. new text end

new text begin The commissioner shall, at such times as deemed necessary,
make or cause to be made an examination of the association. The officers, managers,
agents, and employees of the association may be examined at any time, under oath, and
shall exhibit all books, records, accounts, documents, or agreements governing its method
of operation. The commissioner shall furnish a copy of the examination report to the
association. If the commissioner finds the association to be in violation of this section, the
commissioner may issue an order requiring the discontinuance of the violation.
new text end

new text begin Subd. 6. new text end

new text begin Immunity. new text end

new text begin There shall be no liability on the part of and no causes of action
of any nature shall arise against the association, its directors, officers, agents, or employees
for any action taken or omitted by them in the performance of their powers and duties
under this section, absent gross negligence or willful misconduct.
new text end

new text begin Subd. 7. new text end

new text begin Stamping fee. new text end

new text begin The services performed by the association shall be
funded by a stamping fee assessed for each premium-bearing document submitted to
the association. The stamping fee shall be established by the board of directors of the
association from time to time. The stamping fee shall be paid by the insured to the surplus
lines licensee and remitted electronically to the association by the surplus lines licensee.
new text end

new text begin Subd. 8. new text end

new text begin Data classification. new text end

new text begin Unless otherwise classified by statute, a temporary
classification under section 13.06, or federal law, information obtained by the
commissioner from the association is public, except that any data identifying insureds is
private data on individuals or nonpublic data as defined in section 13.02, subdivisions
9 and 12.
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 policies written or renewed on or after that date.
new text end

Sec. 3.

new text begin [60A.2086] LICENSEE'S DUTY TO SUBMIT DOCUMENTS; PENALTY.
new text end

new text begin Subdivision 1. new text end

new text begin Submission of documents to the Surplus Lines Association
of Minnesota; certification. new text end

new text begin (a) A surplus lines licensee shall submit every insurance
policy or contract issued under the licensee's license to the Surplus Lines Association of
Minnesota for recording and stamping. The submission and stamping must be effected
through electronic means. The submission must include:
new text end

new text begin (1) the name of the insured;
new text end

new text begin (2) a description and location of the insured property or risk;
new text end

new text begin (3) the amount insured;
new text end

new text begin (4) the gross premiums charged or returned;
new text end

new text begin (5) the name of the surplus lines insurer from whom coverage has been procured;
new text end

new text begin (6) the kind or kinds of insurance procured; and
new text end

new text begin (7) the amount of premium subject to tax.
new text end

new text begin (b) The submission of insurance policies or contracts to the Surplus Lines
Association of Minnesota constitutes a certification by the surplus lines licensee, or by the
insurance producer who presented the risk to the surplus lines licensee for placement as a
surplus lines risk, that the insurance policies or contracts were procured in accordance
with sections 60A.195 to 60A.209.
new text end

new text begin Subd. 2. new text end

new text begin Stamping requirement; penalty. new text end

new text begin (a) It shall be unlawful for an insurance
agent, broker, or surplus lines licensee to deliver in this state any surplus lines insurance
policy or contract unless the insurance document is stamped by the association. A
licensee's failure to comply with the requirements of this subdivision shall not affect the
validity of the coverage.
new text end

new text begin (b) Any insurance agent, broker, or surplus lines licensee who delivers in this state
any insurance policy or contract that has not been stamped by the association shall be
subject to a penalty payable to the commissioner as follows:
new text end

new text begin (1) $50 for delivery of the first unstamped policy;
new text end

new text begin (2) $250 for delivery of a second unstamped policy; and
new text end

new text begin (3) $1,000 per policy for delivery of any additional unstamped policies.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, and applies to
policies written or renewed after December 31, 2008.
new text end

Sec. 4.

Minnesota Statutes 2006, section 296A.01, subdivision 44, is amended to read:

Subd. 44.

Received.

(a) Except as otherwise provided in this subdivision, petroleum
products brought into this state shall be deemed to be "received" in this state at the time
and place they are unloaded in this state. When so unloaded such products shall be
deemed to be received in this state by the person who is the owner immediately after such
unloading; provided, however, that if such owner is not licensed as a distributor in this
state and if such products were shipped or delivered into this state by a person who is
licensed as a distributor, then such products shall be deemed to be received in this state by
the licensed distributor by whom the same were so shipped or delivered.

(b) Petroleum products produced, manufactured, or refined, at a refinery in this
state and stored there, or brought into the state by boat deleted text begin or deleted text end new text begin , new text end barge new text begin , or rail, new text end or like form of
transportation and delivered at a marine terminal in this state and stored there, or brought
into the state by pipeline and delivered at a pipeline terminal in this state and stored
there, new text begin or brought into the state by rail car, new text end shall not be considered received until they are
withdrawn from such refinery or terminal for sale or use in this state or for delivery or
shipment to points within this state.

(c) When withdrawn such products shall be deemed received by the person who was
the owner immediately prior to withdrawal; unless (1) such products are withdrawn for
shipment or delivery to another licensed distributor, in which case the licensed distributor
to whom such shipment or delivery is made shall be deemed to have received such
products in this state, or (2) such products are withdrawn for shipment or delivery to a
person not licensed as a distributor, under one or more sale or exchange agreements by
or between persons one or more of whom is a licensed distributor, in which case the
last purchaser or exchangee under such agreement or agreements, who is licensed as a
distributor, shall be deemed to have received such products in this state.

(d) Petroleum products produced in this state in any manner other than as covered
in this subdivision shall be considered received by the producer at the time and place
produced.

Sec. 5.

Minnesota Statutes 2006, section 296A.01, subdivision 45, is amended to read:

Subd. 45.

Refinery or terminal.

"Refinery" or "terminal" means any petroleum
refinery, pipeline terminal, river terminal, storage facility, new text begin rail car, new text end or other point of origin
where petroleum products are manufactured, or imported by rail, truck, barge, or pipe;
and held, stored, transferred, offered for distribution, distributed, offered for sale, or sold.
For the purpose of restricting petroleum product blending, this definition includes all
refineries and terminals within and outside of Minnesota. For the purpose of assessing
fees, this definition does not include a licensed distributor's bulk storage facility that is
used to store petroleum products for which the petroleum inspection fee charged under
chapter 239 is either not due or has been paid.

Sec. 6.

Minnesota Statutes 2006, section 296A.03, subdivision 2, is amended to read:

Subd. 2.

Qualifications.

(a) A distributor's license shall be issued to any responsible
person who applies and qualifies as a distributor.

(b) Upon application to the commissioner, the commissioner must issue a
distributor's license to any person who:

(1) receives petroleum products in this state for bulk storage and subsequent
distribution by tank truck;

(2) produces, manufactures, or refines petroleum products in this state;

(3) holds an unrevoked license as a distributor as of July 1, 1994;

(4) imports petroleum products into this state via boat, barge, or pipeline for storage
and subsequent delivery at or further transportation from boat, barge, or pipeline terminals
in this state; deleted text begin or
deleted text end

(5) new text begin imports petroleum products into this state via rail car for storage and subsequent
delivery from the rail car in this state; or
new text end

new text begin (6) new text end holds a license and performs a function under the motor fuel tax law of an
adjoining state equivalent to that of a distributor under this chapter, who desires to ship
or deliver petroleum products from that state to persons in this state not licensed as
distributors in this state and who agrees to assume with respect to all petroleum products
so shipped or delivered the liabilities of a distributor receiving petroleum products in
this state; provided, however, that any such license shall be issued only for the purpose
of permitting such person to receive in this state the petroleum products so shipped or
delivered. Except as herein provided, all persons licensed as distributors under this clause
shall have the same rights and privileges and be subject to the same duties, requirements,
and penalties as other licensed distributors.

Sec. 7.

Minnesota Statutes 2006, section 383A.80, subdivision 4, is amended to read:

Subd. 4.

Expiration.

The authority to impose the tax under this section expires
January 1, deleted text begin 2008 deleted text end new text begin 2013 new text end .

Sec. 8.

Minnesota Statutes 2006, section 383A.81, subdivision 1, is amended to read:

Subdivision 1.

Creation.

An environmental response fund is created for the
purposes specified in this section. The taxes imposed by section 383A.80 must be
deposited in the fund. The board of county commissioners shall administer the fund either
as a county board deleted text begin , deleted text end new text begin or new text end a housing and redevelopment authority deleted text begin , or a regional rail authority deleted text end .

Sec. 9.

Minnesota Statutes 2006, section 383A.81, subdivision 2, is amended to read:

Subd. 2.

Uses of fund.

The fund created in subdivision 1 must be used for the
following purposes:

(1) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;

(2) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;

(3) paying for the costs of remediating the acquired land or property; new text begin or
new text end

(4) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances deleted text begin ; or
deleted text end

deleted text begin (5) paying for the costs associated with improving the property for economic
development, recreational, housing, transportation or rail traffic deleted text end .

Sec. 10.

Minnesota Statutes 2006, section 383B.80, subdivision 4, is amended to read:

Subd. 4.

Expiration.

The authority to impose the tax under this section expires
January 1, deleted text begin 2008 deleted text end new text begin 2013 new text end .

Sec. 11.

Minnesota Statutes 2006, section 383B.81, subdivision 1, is amended to read:

Subdivision 1.

Creation.

An environmental response fund is created for the
purposes specified in this section. The taxes imposed by section 383B.80 must be
deposited in the fund. The board of county commissioners shall administer the fund either
as a county board deleted text begin , deleted text end new text begin or new text end a housing and redevelopment authority deleted text begin , or a regional rail authority deleted text end .

Sec. 12.

Minnesota Statutes 2006, section 383B.81, subdivision 2, is amended to read:

Subd. 2.

Uses of fund.

The fund created in subdivision 1 must be used for the
following purposes:

(1) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;

(2) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;

(3) paying for the costs of remediating the acquired land or property; new text begin or
new text end

(4) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances deleted text begin ; or
deleted text end

deleted text begin (5) paying for the costs associated with improving the property for economic
development, recreational, housing, transportation or rail traffic deleted text end .

Sec. 13.

new text begin [383C.798] COUNTY DEED AND MORTGAGE TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to impose; rate. new text end

new text begin (a) The governing body of St. Louis
County may impose a mortgage registry and deed tax.
new text end

new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal.
new text end

new text begin (c) The rate of the deed tax equals .0001 of the amount.
new text end

new text begin Subd. 2. new text end

new text begin General law provisions apply. new text end

new text begin The taxes under this section apply to
the same base and must be imposed, collected, administered, and enforced in the same
manner as provided under chapter 287 for the state mortgage registry and deed taxes.
All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
subdivision 1, the term "St. Louis County" must be substituted for "the state," and the
revenue must be deposited as provided in subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of revenues. new text end

new text begin All revenues from the tax are for the use of the
St. Louis County Board of Commissioners and must be deposited in the county's
environmental response fund under section 383C.799.
new text end

new text begin Subd. 4. new text end

new text begin Initial implementation. new text end

new text begin Documents presented for recording within 60
days after the date of imposition of the tax by the county that are acknowledged, sworn to
before a notary, or certified before the imposition date, must not be rejected for failure to
include the tax imposed under this section.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin The authority to impose the tax under this section expires
January 1, 2013.
new text end

Sec. 14.

new text begin [383C.799] ENVIRONMENTAL RESPONSE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin An environmental response fund is created for the
purposes specified in this section. The taxes imposed under section 383C.798 must be
deposited in the fund. The Board of County Commissioners shall administer the fund
either as a county board or a housing and redevelopment authority.
new text end

new text begin Subd. 2. new text end

new text begin Uses of fund. new text end

new text begin The fund created in subdivision 1 must be used for the
following purposes:
new text end

new text begin (1) payment of one-half of the annual debt service on bonds issued by the
Duluth-North Shore Sanitary District, series 2002, to pay the cost of constructing the
sanitary sewer collection system, until those obligations have been paid, or $4,500,000 has
been provided for this purpose under this clause, whichever occurs first; money remaining
in the fund after payment of the annual debt service under this clause may be expended for
the purposes in clauses (2) to (5);
new text end

new text begin (2) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;
new text end

new text begin (3) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;
new text end

new text begin (4) paying for the costs of remediating the acquired land or property; or
new text end

new text begin (5) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances.
new text end

new text begin Subd. 3. new text end

new text begin Matching funds. new text end

new text begin In expending funds under this section, the county shall
seek matching funds from contamination cleanup funds administered by the commissioner
of the Department of Employment and Economic Development, the federal government,
the private sector, and any other source.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin The county may pledge the proceeds from the taxes imposed by
section 383C.798 to bonds issued under this section and chapters 462, 469, and 475.
new text end

new text begin Subd. 5. new text end

new text begin Land sales. new text end

new text begin Land or property acquired under this section may be resold
at fair market value. Proceeds from the sale of the land must be deposited in the
environmental response fund.
new text end

Sec. 15.

new text begin [383D.75] COUNTY DEED AND MORTGAGE TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to impose; rate. new text end

new text begin (a) The governing body of Dakota
County may impose a mortgage registry and deed tax.
new text end

new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal.
new text end

new text begin (c) The rate of the deed tax equals .0001 of the amount.
new text end

new text begin Subd. 2. new text end

new text begin General law provisions apply. new text end

new text begin The taxes under this section apply to
the same base and must be imposed, collected, administered, and enforced in the same
manner as provided under chapter 287 for the state mortgage registry and deed taxes.
All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
subdivision 1, the term "Dakota County" must be substituted for "the state," and the
revenue must be deposited as provided in subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of revenues. new text end

new text begin All revenues from the tax are for the use of
the Dakota County Board of Commissioners and must be deposited in the county's
environmental response fund under section new text end

new text begin Subd. 4. new text end

new text begin Initial implementation. new text end

new text begin Documents presented for recording within 60
days after the date of imposition of the tax by the county that are acknowledged, sworn to
before a notary, or certified before the imposition date, must not be rejected for failure to
include the tax imposed under this section.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin The authority to impose the tax under this section expires
January 1, 2013.
new text end

Sec. 16.

new text begin [383D.76] ENVIRONMENTAL RESPONSE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin An environmental response fund is created for the
purposes specified in this section. The taxes imposed under section 383D.75 must be
deposited in the fund. The Board of County Commissioners shall administer the fund
either as a county board or a housing and redevelopment authority.
new text end

new text begin Subd. 2. new text end

new text begin Uses of fund. new text end

new text begin The fund created in subdivision 1 must be used for the
following purposes:
new text end

new text begin (1) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;
new text end

new text begin (2) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;
new text end

new text begin (3) paying for the costs of remediating the acquired land or property; or
new text end

new text begin (4) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances.
new text end

new text begin Subd. 3. new text end

new text begin Matching funds. new text end

new text begin In expending funds under this section, the county shall
seek matching funds from contamination cleanup funds administered by the commissioner
of the Department of Employment and Economic Development, the Metropolitan Council,
the federal government, the private sector, and any other source.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin The county may pledge the proceeds from the taxes imposed by
section to bonds issued under this chapter and chapters 462, 469, and 475.
new text end

new text begin Subd. 5. new text end

new text begin Land sales. new text end

new text begin Land or property acquired under this section may be resold
at fair market value. Proceeds from the sale of the land must be deposited in the
environmental response fund.
new text end

Sec. 17.

new text begin [383E.235] COUNTY DEED AND MORTGAGE TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to impose; rate. new text end

new text begin (a) The governing body of Anoka
County may impose a mortgage registry and deed tax.
new text end

new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal.
new text end

new text begin (c) The rate of the deed tax equals .0001 of the amount.
new text end

new text begin Subd. 2. new text end

new text begin General law provisions apply. new text end

new text begin The taxes under this section apply to
the same base and must be imposed, collected, administered, and enforced in the same
manner as provided under chapter 287 for the state mortgage registry and deed taxes.
All the provisions of chapter 287 apply to these taxes, except the rate is as specified
in subdivision 1, the term "Anoka County" must be substituted for "the state," and the
revenue must be deposited as provided in subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of revenues. new text end

new text begin All revenues from the tax are for the use of the Anoka
County Board of Commissioners and must be deposited in the county's environmental
response fund under section 383E.236.
new text end

new text begin Subd. 4. new text end

new text begin Initial implementation. new text end

new text begin Documents presented for recording within 60
days after the date of imposition of the tax by the county that are acknowledged, sworn to
before a notary, or certified before the imposition date, must not be rejected for failure to
include the tax imposed under this section.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin The authority to impose the tax under this section expires
January 1, 2013.
new text end

Sec. 18.

new text begin [383E.236] ENVIRONMENTAL RESPONSE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin An environmental response fund is created for the
purposes specified in this section. The taxes imposed under section 383E.235 must be
deposited in the fund. The Board of County Commissioners shall administer the fund
either as a county board or a housing and redevelopment authority.
new text end

new text begin Subd. 2. new text end

new text begin Uses of fund. new text end

new text begin The fund created in subdivision 1 must be used for the
following purposes:
new text end

new text begin (1) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;
new text end

new text begin (2) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;
new text end

new text begin (3) paying for the costs of remediating the acquired land or property; or
new text end

new text begin (4) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances.
new text end

new text begin Subd. 3. new text end

new text begin Matching funds. new text end

new text begin In expending funds under this section, the county shall
seek matching funds from contamination cleanup funds administered by the commissioner
of the Department of Employment and Economic Development, the Metropolitan Council,
the federal government, the private sector, and any other source.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin The county may pledge the proceeds from the taxes imposed by
section 383E.235 to bonds issued under this section and chapters 462, 469, and 475.
new text end

new text begin Subd. 5. new text end

new text begin Land sales. new text end

new text begin Land or property acquired under this section may be resold
at fair market value. Proceeds from the sale of the land must be deposited in the
environmental response fund.
new text end

new text begin Subd. 6. new text end

new text begin DOT assistance. new text end

new text begin The commissioner of transportation shall collaborate with
the county and any affected municipality by providing technical assistance and support in
cleaning up a contaminated site related to a trunk highway or railroad improvement.
new text end

ARTICLE 8

MINERALS; AGGREGATE

Section 1.

Minnesota Statutes 2006, section 298.22, subdivision 5a, as added by Laws
2008, chapter 154, article 8, section 3, is amended to read:

Subd. 5a.

Forest trust.

The commissioner, upon the affirmative vote of a majority
of the members of the board, may purchase forest lands in the taconite assistance area
defined in under section 273.1341 with funds specifically authorized for the purchase. The
acquired forest lands must be held in trust for the benefit of the citizens of the taconite
assistance area as the Iron Range Miners' Memorial Forest. The forest trust lands shall be
managed and developed for recreation and economic development purposes. new text begin The board
may sell forest lands purchased under this subdivision if it finds that the sale advances the
purposes of the trust. new text end Proceeds derived from the management new text begin or sale new text end of the lands and from
the sale of timber or removal of gravel or other minerals from these forest lands shall be
deposited into an Iron Range Miners' Memorial Forest account that is established within
the state financial accounts. Funds may be expended from the account upon approval of a
majority of the members of the board to purchase, manage, administer, convey interests
in, and improve the forest lands. By majority vote of the members of the board, money in
the Iron Range Miners' Memorial Forest account may be transferred into the corpus of the
Douglas J. Johnson economic protection trust fund established under sections 298.291
to 298.294. The property acquired under the authority granted by this subdivision and
income derived from the property or the operation or management of the property are
exempt from taxation by the state or its political subdivisions.

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 2007 Supplement, section 298.227, is amended to read:

298.227 TACONITE ECONOMIC DEVELOPMENT FUND.

An amount equal to that distributed pursuant to each taconite producer's taxable
production and qualifying sales under section 298.28, subdivision 9a, shall be held by
the Iron Range Resources and Rehabilitation Board in a separate taconite economic
development fund for each taconite and direct reduced ore producer. Money from the
fund for each producer shall be released by the commissioner after review by a joint
committee consisting of an equal number of representatives of the salaried employees and
the nonsalaried production and maintenance employees of that producer. The District 11
director of the United States Steelworkers of America, on advice of each local employee
president, shall select the employee members. In nonorganized operations, the employee
committee shall be elected by the nonsalaried production and maintenance employees.
The review must be completed no later than six months after the producer presents a
proposal for expenditure of the funds to the committee. The funds held pursuant to this
section may be released only for acquisition of plant and stationary mining equipment and
facilities for the producer or for research and development in Minnesota on new mining, or
taconite, iron, or steel production technology, but only if the producer provides a matching
expenditure to be used for the same purpose of at least 50 percent of the distribution
deleted text begin based on 14.7 cents per ton beginning with distributions in 2002 deleted text end . Effective for proposals
for expenditures of money from the fund beginning May 26, 2007, the commissioner
may not release the funds before the next scheduled meeting of the board. If the board
rejects a proposed expenditure, the funds must be deposited in the Taconite Environmental
Protection Fund under sections 298.222 to 298.225. If a producer uses money which has
been released from the fund prior to May 26, 2007 to procure haulage trucks, mobile
equipment, or mining shovels, and the producer removes the piece of equipment from the
taconite tax relief area defined in section 273.134 within ten years from the date of receipt
of the money from the fund, a portion of the money granted from the fund must be repaid
to the taconite economic development fund. The portion of the money to be repaid is 100
percent of the grant if the equipment is removed from the taconite tax relief area within 12
months after receipt of the money from the fund, declining by ten percent for each of the
subsequent nine years during which the equipment remains within the taconite tax relief
area. If a taconite production facility is sold after operations at the facility had ceased, any
money remaining in the fund for the former producer may be released to the purchaser of
the facility on the terms otherwise applicable to the former producer under this section. If
a producer fails to provide matching funds for a proposed expenditure within six months
after the commissioner approves release of the funds, the funds are available for release to
another producer in proportion to the distribution provided and under the conditions of
this section. Any portion of the fund which is not released by the commissioner within
two years of its deposit in the fund shall be divided between the taconite environmental
protection fund created in section 298.223 and the Douglas J. Johnson economic protection
trust fund created in section 298.292 for placement in their respective special accounts.
Two-thirds of the unreleased funds shall be distributed to the taconite environmental
protection fund and one-third to the Douglas J. Johnson economic protection trust fund.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 298.24, subdivision 1, as amended by Laws
2008, chapter 154, article 8, section 5, is amended to read:

Subdivision 1.

Imposed; calculation.

(a) For concentrate produced in 2001, 2002,
and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and
quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon
the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore
concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the
same rate imposed for concentrates produced in 2004.

(b) For concentrates produced in 2006 and subsequent years, the tax rate shall be
equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate
multiplied by the percentage increase in the implicit price deflator from the fourth quarter
of the second preceding year to the fourth quarter of the preceding year. "Implicit price
deflator" means the implicit price deflator for the gross domestic product prepared by the
Bureau of Economic Analysis of the United States Department of Commerce.

(c) On concentrates produced in 1997 and thereafter, an additional tax is imposed
equal to three cents per gross ton of merchantable iron ore concentrate for each one
percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees
Fahrenheit.

(d) The tax shall be imposed on the average of the production for the current year
and the previous two years. The rate of the tax imposed will be the current year's tax rate.
This clause shall not apply in the case of the closing of a taconite facility if the property
taxes on the facility would be higher if this clause and section 298.25 were not applicable.

(e) If the tax or any part of the tax imposed by this subdivision is held to be
unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate
produced shall be imposed.

(f) Consistent with the intent of this subdivision to impose a tax based upon the
weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
determine the weight of merchantable iron ore concentrate included in fluxed pellets by
subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
flux additives included in the pellets from the weight of the pellets. For purposes of this
paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
No subtraction from the weight of the pellets shall be allowed for binders, mineral and
chemical additives other than basic flux additives, or moisture.

(g)(1) Notwithstanding any other provision of this subdivision, for the first two years
of a plant's commercial production of direct reduced ore new text begin from ore mined in this state new text end , no
tax is imposed under this section. As used in this paragraph, "commercial production" is
production of more than 50,000 tons of direct reduced ore in the current year or in any
prior year, "noncommercial production" is production of 50,000 tons or less of direct
reduced ore in any year, and "direct reduced ore" is ore that results in a product that has an
iron content of at least 75 percent. For the third year of a plant's commercial production of
direct reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate
otherwise determined under this subdivision. For the fourth commercial production year,
the rate is 50 percent of the rate otherwise determined under this subdivision; for the fifth
commercial production year, the rate is 75 percent of the rate otherwise determined under
this subdivision; and for all subsequent commercial production years, the full rate is
imposed.

(2) Subject to clause (1), production of direct reduced ore in this state is subject to
the tax imposed by this section, but if that production is not produced by a producer
of taconite or iron sulfides, the production of taconite or iron sulfides consumed in the
production of direct reduced iron in this state is not subject to the tax imposed by this
section on taconite or iron sulfides.

(3) Notwithstanding any other provision of this subdivision, no tax is imposed
on direct reduced ore under this section during the facility's noncommercial production
of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
production of direct reduced ore is subject to the tax imposed by this section on taconite
and iron sulphides. Three-year average production of direct reduced ore does not
include production of direct reduced ore in any noncommercial year. Three-year average
production for a direct reduced ore facility that has noncommercial production is the
average of the commercial production of direct reduced ore for the current year and the
previous two commercial years.

(4) This paragraph applies only to plants for which all environmental permits have
been obtained and construction has begun before July 1, 2008.

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 298.28, subdivision 4, as amended by Laws
2008, chapter 154, article 8, section 7, is amended to read:

Subd. 4.

School districts.

(a) 23.15 cents per taxable ton, plus the increase provided
in paragraph (d) must be allocated to qualifying school districts to be distributed, based
upon the certification of the commissioner of revenue, under paragraphs (b), (c), and (f).

(b) (i) 3.43 cents per taxable ton must be distributed to the school districts in which
the lands from which taconite was mined or quarried were located or within which the
concentrate was produced. The distribution must be based on the apportionment formula
prescribed in subdivision 2.

(ii) Four cents per taxable ton from each taconite facility must be distributed to
each affected school district for deposit in a fund dedicated to building maintenance
and repairs, as follows:

(1) proceeds from Keewatin Taconite or its successor are distributed to Independent
School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
districts;

(2) proceeds from the Hibbing Taconite Company or its successor are distributed to
Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
districts;

(3) proceeds from the Mittal Steel Company and Minntac or their successors are
distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
2711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;

(4) proceeds from the Northshore Mining Company or its successor are distributed
to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
or their successor districts; and

(5) proceeds from United Taconite or its successor are distributed to Independent
School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
successor districts.

Revenues that are required to be distributed to more than one district shall be
apportioned according to the number of pupil units identified in section 126C.05,
subdivision 1, enrolled in the second previous year.

(c)(i) 15.72 cents per taxable ton, less any amount distributed under paragraph (e),
shall be distributed to a group of school districts comprised of those school districts which
qualify as a tax relief area under section 273.134, paragraph (b), or in which there is a
qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
to school district indexes as follows: for each school district, its pupil units determined
under section 126C.05 for the prior school year shall be multiplied by the ratio of the
average adjusted net tax capacity per pupil unit for school districts receiving aid under
this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
Each district shall receive that portion of the distribution which its index bears to the sum
of the indices for all school districts that receive the distributions.

(ii) Notwithstanding clause (i), each school district that receives a distribution
under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
severed mineral values after reduction for any portion distributed to cities and towns under
section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy
reduction under section 126C.48, subdivision 8, for the second year prior to the year of the
distribution shall receive a distribution equal to the difference; the amount necessary to
make this payment shall be derived from proportionate reductions in the initial distribution
to other school districts under clause (i).

(d) Any school district described in paragraph (c) where a levy increase pursuant to
section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001,
shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the
pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous
year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent
times the district's taxable net tax capacity in the second previous year.

If the total amount provided by paragraph (d) is insufficient to make the payments
herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
so as not to exceed the funds available. Any amounts received by a qualifying school
district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
education aid which the district receives pursuant to section 126C.13 or the permissible
levies of the district. Any amount remaining after the payments provided in this paragraph
shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
economic protection trust fund as provided in subdivision 11.

Each district receiving money according to this paragraph shall reserve the lesser of
the amount received under this paragraph or $25 times the number of pupil units served
in the district. It may use the money for early childhood programs or for outcome-based
learning programs that enhance the academic quality of the district's curriculum. The
outcome-based learning programs must be approved by the commissioner of education.

(e) There shall be distributed to any school district the amount which the school
district was entitled to receive under section 298.32 in 1975.

(f) Four cents per taxable ton must be distributed to qualifying school districts
according to the distribution specified in paragraph (b), clause (ii), and two cents per
taxable ton must be distributed according to the distribution specified in paragraph (c).
These amounts are not subject to deleted text begin section deleted text end new text begin sections 126C.21, subdivision 4, and new text end 126C.48,
subdivision 8.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2006, section 298.28, subdivision 9a, is amended to read:

Subd. 9a.

Taconite economic development fund.

(a) deleted text begin 30.1 deleted text end new text begin 20 new text end cents per ton for
distributions in deleted text begin 2002 and thereafter deleted text end new text begin 2008, and ten cents per ton for distributions in 2009 new text end
must be paid to the taconite economic development fund. No distribution shall be
made under this paragraph in deleted text begin 2004 deleted text end new text begin 2010 new text end or any subsequent year deleted text begin in which total industry
production falls below 30 million tons deleted text end . Distribution shall only be made to a taconite
producer's fund under section 298.227 if the producer timely pays its tax under section
298.24 by the dates provided under section 298.27, or pursuant to the due dates provided
by an administrative agreement with the commissioner.

(b) An amount equal to 50 percent of the tax under section 298.24 for concentrate
sold in the form of pellet chips and fines not exceeding 5/16 inch in size and not including
crushed pellets shall be paid to the taconite economic development fund new text begin in years prior
to 2010 new text end . The amount paid shall not exceed $700,000 annually for all companies. If the
initial amount to be paid to the fund exceeds this amount, each company's payment shall
be prorated so the total does not exceed $700,000.

Sec. 6.

Minnesota Statutes 2006, section 298.28, subdivision 9d, as added by Laws
2008, chapter 154, article 8, section 9, is amended to read:

Subd. 9d.

Iron Range higher education account.

deleted text begin Two deleted text end new text begin Five new text end cents per taxable ton
must be allocated to the Iron Range Resources and Rehabilitation Board to be deposited
in an Iron Range higher education account that is hereby created, to be used for higher
education programs conducted at educational institutions in the taconite assistance area
defined in section 273.1341. The Iron Range Higher Education committee under section
298.2214 and the Iron Range Resources and Rehabilitation Board must approve all
expenditures from the account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for production in 2007, distributions
in 2008, and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2006, section 298.2961, subdivision 4, as amended by Laws
2008, chapter 154, article 8, section 13, is amended to read:

Subd. 4.

Grant and loan fund.

(a) A fund is established to receive distributions
under section 298.28, subdivision 9b, and to make grants or loans as provided in this
subdivision. Any grant or loan made under this subdivision must be approved by
a majority of the members of the Iron Range Resources and Rehabilitation Board,
established under section 298.22.

(b) Distributions received in calendar year 2005 are allocated to the city of Virginia
for improvements and repairs to the city's steam heating system.

(c) Distributions received in calendar year 2006 are allocated to a project of the
public utilities commissions of the cities of Hibbing and Virginia to convert their electrical
generating plants to the use of biomass products, such as wood.

(d) Distributions received in calendar year 2007 must be paid to the city of Tower to
be used for the East Two Rivers project in or near the city of Tower.

(e) For distributions received in 2008, the first $2,000,000 of the 2008 distribution
must be paid to St. Louis County for deposit in its county road and bridge fund to be
used for relocation of St. Louis County Road 715, commonly referred to as Pike River
Road. new text begin The next $90,000 must be paid to Independent School District No. 2142, St. Louis
County, for a facilities study. new text end The remainder of the 2008 distribution must be paid to St.
Louis County for a grant to the city of Virginia for connecting sewer and water lines to
the St. Louis County maintenance garage on Highway 135, further extending the lines to
interconnect with the city of Gilbert's sewer and water lines. All distributions received in
2009 and subsequent years are allocated for projects under section 298.223, subdivision 1.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

Except as may otherwise be provided, the following
words, when used in this section, shall have the meanings herein ascribed to them.

(1) "Aggregate material" shall mean nonmetallic natural mineral aggregate including,
but not limited to sand, silica sand, gravel, crushed rock, limestone, granite, and borrow,
but only if the borrow is transported on a public road, street, or highway. Aggregate
material shall not include dimension stone and dimension granite. Aggregate material
must be measured or weighed after it has been extracted from the pit, quarry, or deposit.

(2) "Person" shall mean any individual, firm, partnership, corporation, organization,
trustee, association, or other entity.

(3) "Operator" shall mean any person engaged in the business of removing aggregate
material from the surface or subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a marketable product or service.

(4) "Extraction site" shall mean a pit, quarry, or deposit containing aggregate
material and any contiguous property to the pit, quarry, or deposit which is used by the
operator for stockpiling the aggregate material.

(5) "Importer" shall mean any person who buys aggregate material deleted text begin produced deleted text end new text begin
excavated new text end from a county not listed in paragraph (6) or another state and causes the
aggregate material to be imported into a county in this state which imposes a tax on
aggregate material.

(6) "County" shall mean the counties of Pope, Stearns, Benton, Sherburne, Carver,
Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman,
Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley,
Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose
board has voted after a public hearing to impose the tax under this section and has notified
the commissioner of revenue of the imposition of the tax.

(7) "Borrow" shall mean granular borrow, consisting of durable particles of gravel
and sand, crushed quarry or mine rock, crushed gravel or stone, or any combination
thereof, the ratio of the portion passing the (#200) sieve divided by the portion passing the
(1 inch) sieve may not exceed 20 percent by mass.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 9.

Minnesota Statutes 2006, section 298.75, subdivision 2, is amended to read:

Subd. 2.

Tax imposed.

new text begin (a) new text end A county new text begin that imposes the aggregate production tax new text end shall
impose upon every deleted text begin importer and deleted text end operator a production tax deleted text begin up to ten cents deleted text end new text begin of 21.5 cents new text end per
cubic yard or deleted text begin up to seven deleted text end new text begin 15 new text end cents per ton of aggregate material deleted text begin removed deleted text end new text begin excavated in the
county new text end except that the county board may decide not to impose this tax if it determines
that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
aggregate material from that county. The tax shall new text begin not new text end be imposed on aggregate material
deleted text begin produced deleted text end new text begin excavated new text end in the county deleted text begin when deleted text end new text begin until new text end the aggregate material is transported from
the extraction site or sold new text begin , whichever occurs first new text end . When aggregate material is stored in a
stockpile within the state of Minnesota and a public highway, road or street is not used
for transporting the aggregate material, the tax shall new text begin not new text end be imposed new text begin until new text end either when the
aggregate material is sold, or when it is transported from the stockpile site, or when it is
used from the stockpile, whichever occurs first.

new text begin (b) A county that imposes the aggregate production tax under paragraph (a) shall
impose upon every importer a production tax of 21.5 cents per cubic yard or 15 cents per
ton of aggregate material imported into the county. The tax shall be imposed when the
aggregate material is imported from the extraction site or sold. When imported aggregate
material is stored in a stockpile within the state of Minnesota and a public highway, road,
or street is not used for transporting the aggregate material, the tax shall be imposed either
when the aggregate material is sold, when it is transported from the stockpile site, or when
it is used from the stockpile, whichever occurs first. new text end The tax shall be imposed on an
importer when the aggregate material is imported into the county that imposes the tax.

new text begin (c) new text end If the aggregate material is transported directly from the extraction site to a
waterway, railway, or another mode of transportation other than a highway, road or street,
the tax imposed by this section shall be apportioned equally between the county where the
aggregate material is extracted and the county to which the aggregate material is originally
transported. If that destination is not located in Minnesota, then the county where the
aggregate material was extracted shall receive all of the proceeds of the tax.

new text begin (d) A county, city, or town that receives revenue under this section is prohibited
from imposing any additional host community fees on aggregate production within that
county, city, or town.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 10.

Minnesota Statutes 2006, section 298.75, subdivision 6, is amended to read:

Subd. 6.

Penalties; removal of aggregate if previous tax not paid; false report.

It is a misdemeanor for any operator or importer to remove aggregate material from a
pit, quarry, or deposit or for any importer to import aggregate material unless all taxes
due under this section for deleted text begin the deleted text end new text begin all new text end previous reporting deleted text begin period deleted text end new text begin periods new text end have been paid or
objections thereto have been filed pursuant to subdivision 4.

It is a misdemeanor for the operator or importer who is required to file a report to file
a false report with intent to evade the tax.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 11.

Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read:

Subd. 7.

Proceeds of taxes.

new text begin (a) new text end All money collected as taxes under this section
shall be deposited in the county treasury and credited deleted text begin as follows, for expenditure by the
county board: deleted text end new text begin according to this subdivision.
new text end

new text begin (b) The county auditor may retain an annual administrative fee of up to five percent
of the total taxes collected in any year.
new text end

new text begin (c) The balance of the taxes, after any deduction under paragraph (b), shall be
credited as follows:
new text end

deleted text begin (a) Sixty deleted text end new text begin (1) 42.5 new text end percent to the county road and bridge fund for expenditure for the
maintenance, construction and reconstruction of roads, highways and bridges;

deleted text begin (b) Thirty deleted text end new text begin (2) 42.5 new text end percent to the deleted text begin road and bridge fund of those towns as determined
by the county board and to the deleted text end general fund deleted text begin or other designated fund of those cities as
determined by the county board deleted text end new text begin of the city or town in which the mine is located, or to the
county, if the mine is located in an unorganized town new text end , to be expended for maintenance,
construction and reconstruction of roads, highways and bridges; and

deleted text begin (c) Ten deleted text end new text begin (3) 15 new text end percent to a special reserve fund which is hereby established, for
expenditure for the restoration of abandoned pits, quarries, or deposits located deleted text begin upon public
and tax forfeited lands deleted text end within the county.

If there are no abandoned pits, quarries or deposits located deleted text begin upon public or tax
forfeited lands deleted text end within the county, this portion of the tax shall be deleted text begin deposited in the county
road and bridge fund for expenditure for the maintenance, construction and reconstruction
of roads, highways and bridges deleted text end new text begin used for any other unmet reclamation need or for
conservation or other environmental needs new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 12.

Laws 2008, chapter 154, article 8, section 14, the effective date, is amended to
read:

EFFECTIVE DATE.

This section is effective for distributions made in deleted text begin 2008 and
thereafter deleted text end new text begin 2007 new text end .

Sec. 13. new text begin ELECTRIC GENERATING PLANTS IN TACONITE TAX RELIEF
AREAS.
new text end

new text begin For purposes of definitions of "taconite tax relief area" and "taconite assistance area"
in Minnesota Statutes, sections 273.134, 273.1341, and related laws, the elimination
of the property tax exemption for certain electric generating plants under Laws 2008,
chapter 154, article 8, section 6, does not change the status of any electric generating plant
qualifying as a taconite facility.
new text end

ARTICLE 9

LOCAL DEVELOPMENT

Section 1.

new text begin [116J.8732] SEED CAPITAL INVESTMENT CREDIT;
COMMISSIONER'S RESPONSIBILITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin This section establishes rules that businesses must satisfy to
qualify for the seed capital investment credit under section 290.06, subdivision 34, and the
commissioner's responsibility for certifying the qualifying businesses.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section and section 290.06,
subdivision 34, the following terms have the meanings given.
new text end

new text begin (b) "Border city" means a city qualifying to designate a border city development
zone under section 469.1731.
new text end

new text begin (c) "Pass-through entity" means a corporation that for the applicable tax year is
treated as an S corporation or a general partnership, limited partnership, limited liability
partnership, trust, or limited liability company and which for the applicable taxable year is
not taxed as a corporation under chapter 290.
new text end

new text begin (d) "Primary sector business" means a qualified business that through the
employment of knowledge or labor adds value to a product, process, or service and
increases revenues to a Minnesota business generated by sales of products or services to
customers outside of the state or increases revenues to a qualified business the customers
of which previously were unable to acquire, or had limited availability of the product or
service from a Minnesota provider.
new text end

new text begin (e) "Qualified business" means a business certified by the commissioner as meeting
the requirements of subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Qualified business. new text end

new text begin (a) The commissioner shall certify whether a business
that has requested to become a qualified business meets the requirements of paragraph (b).
new text end

new text begin (b) For purposes of this section, a qualified business must be a primary sector
business, other than a real estate investment trust, that:
new text end

new text begin (1) is incorporated or its satellite operation is incorporated as a for-profit corporation
or is a partnership, limited partnership, limited liability company, limited liability
partnership, or joint venture;
new text end

new text begin (2) is in compliance with the requirements for filings with the commissioner of
commerce under the securities laws of this state;
new text end

new text begin (3) has Minnesota residents as a majority of its employees in its principal office or
the satellite operation, which is located in a border city;
new text end

new text begin (4) has its principal office in a border city and has the majority of its business
activity performed in a border city, except sales activity, or has a significant operation in
a border city that has or is projected to have more than ten employees or $150,000 of
sales annually; and
new text end

new text begin (5) relies on innovation, research, or the development of new products and processes
in its plans for growth and profitability.
new text end

new text begin (c) The commissioner shall establish the necessary forms and procedures for
certifying qualified businesses.
new text end

new text begin (d) A qualified business may apply to the commissioner for a recertification. Only
one recertification is available to a qualified business. The application for recertification
must be filed with the commissioner within 90 days before the original certification
expiration date. The recertification issued by the director must comply with the provisions
of paragraph (e).
new text end

new text begin (e) The commissioner shall issue a certification letter to a business the commissioner
determines is a qualified business. The certification letter must include:
new text end

new text begin (1) the certification effective date; and
new text end

new text begin (2) the certification expiration date, which may not be more than four years from the
certification effective date.
new text end

new text begin Subd. 4. new text end

new text begin Seed capital investment credit reporting. new text end

new text begin Within 30 days after the date
that an investment in a qualified business is purchased, the qualified business shall file with
the commissioner and the commissioner of revenue and provide to the investor completed
forms prescribed by the commissioner of revenue that show as to each investment in the
qualified business the following:
new text end

new text begin (1) the name, address, and Social Security number of the taxpayer who made the
investment; and
new text end

new text begin (2) the dollar amount paid for the investment by the taxpayer.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 116J.993, subdivision 3, is amended to read:

Subd. 3.

Business subsidy.

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

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

(1) a business subsidy of less than deleted text begin $25,000 deleted text end new text begin $200,000 new text end ;

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

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

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

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

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

(7) assistance for housing;

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

(9) assistance for energy conservation;

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

(11) workers' compensation and unemployment insurance;

(12) benefits derived from regulation;

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

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

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

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

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

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

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

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

(21) business loans and loan guarantees of deleted text begin $75,000 deleted text end new text begin $200,000 new text end or less;

(22) federal loan funds provided through the United States Department of
Commerce, Economic Development Administration; and

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

Sec. 3.

Minnesota Statutes 2006, section 116J.994, subdivision 2, is amended to read:

Subd. 2.

Developing a set of criteria.

A business subsidy may not be granted until
the grantor has adopted criteria after a public hearing for awarding business subsidies
that comply with this section. The criteria may not be adopted on a case-by-case basis.
The criteria must set specific minimum requirements that recipients must meet in order
to be eligible to receive business subsidies. The criteria must include a specific wage
floor for the wages to be paid for the jobs created. The wage floor may be stated as a
specific dollar amount or may be stated as a formula that will generate a specific dollar
amount. A grantor may deviate from its criteria by documenting in writing the reason
for the deviation and attaching a copy of the document to its next annual report to the
department. The commissioner of employment and economic development may assist
local government agencies in developing criteria. A copy of the criteria must be submitted
to the Department of Employment and Economic Development along with the first annual
report following the enactment of this section or with the first annual report after it has
adopted criteria, whichever is earlier. new text begin Notwithstanding section 116J.993, subdivision 3,
clauses (1) and (21), for the purpose of this subdivision, "business subsidies" as defined
under section 116J.993 includes the following forms of financial assistance:
new text end

new text begin (1) a business subsidy of $25,000 or more; and
new text end

new text begin (2) business loans and guarantees of $75,000 or more.
new text end

Sec. 4.

Minnesota Statutes 2006, section 116J.994, subdivision 5, is amended to read:

Subd. 5.

Public notice and hearing.

(a) Before granting a business subsidy that
exceeds $500,000 for a state government grantor and deleted text begin $100,000 deleted text end new text begin $200,000 new text end for a local
government grantor, the grantor must provide public notice and a hearing on the subsidy.
A public hearing and notice under this subdivision is not required if a hearing and notice
on the subsidy is otherwise required by law.

(b) Public notice of a proposed business subsidy under this subdivision by a state
government grantor, other than the Iron Range Resources and Rehabilitation Board, must
be published in the State Register. Public notice of a proposed business subsidy under this
subdivision by a local government grantor or the Iron Range Resources and Rehabilitation
Board must be published in a local newspaper of general circulation. The public notice
must identify the location at which information about the business subsidy, including a
summary of the terms of the subsidy, is available. Published notice should be sufficiently
conspicuous in size and placement to distinguish the notice from the surrounding text.
The grantor must make the information available in printed paper copies and, if possible,
on the Internet. The government agency must provide at least a ten-day notice for the
public hearing.

(c) The public notice must include the date, time, and place of the hearing.

(d) The public hearing by a state government grantor other than the Iron Range
Resources and Rehabilitation Board must be held in St. Paul.

(e) If more than one nonstate grantor provides a business subsidy to the same
recipient, the nonstate grantors may designate one nonstate grantor to hold a single
public hearing regarding the business subsidies provided by all nonstate grantors. For
the purposes of this paragraph, "nonstate grantor" includes the iron range resources and
rehabilitation board.

(f) The public notice of any public meeting about a business subsidy agreement,
including those required by this subdivision and by subdivision 4, must include notice that
a person with residence in or the owner of taxable property in the granting jurisdiction
may file a written complaint with the grantor if the grantor fails to comply with sections
116J.993 to 116J.995, and that no action may be filed against the grantor for the failure to
comply unless a written complaint is filed.

Sec. 5.

Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 34. new text end

new text begin Seed capital investment credit. new text end

new text begin (a) An individual, estate, or trust is
allowed a credit against the tax imposed by this chapter for investments in a qualifying
business certified under section 116J.8732, subdivision 3. The credit equals 45 percent
of the amount invested by the taxpayer in qualified businesses during the taxable year.
The credit must not exceed $112,500 for each taxable year.
new text end

new text begin (b) A pass-through entity that invests in a qualified business must be considered to
be the taxpayer for purposes of the investment limitations in this subdivision and the
amount of the credit allowed with respect to a pass-through entity's investment in a
qualified business must be determined at the pass-through entity level. The amount of the
total credit determined at the pass-through entity level must be allowed to the members in
proportion to their respective interests in the pass-through entity.
new text end

new text begin (c) An investment made in a qualified business from the assets of a retirement
plan is deemed to be the retirement plan participant's investment for the purpose of this
subdivision if a separate account is maintained for the plan participant and the participant
directly controls where the account assets are invested.
new text end

new text begin (d) The investment must be made on or after the certification effective date and
must be at risk in the business to be eligible for the tax credit under this subdivision.
An investment for which a credit is received under this subdivision must remain in the
qualified business for at least three years. Investments placed in escrow do not qualify
for the credit.
new text end

new text begin (e) The entire amount of an investment for which a credit is claimed under this
subdivision must be expended by the qualified business for plant, equipment, research and
development, marketing and sales activity, or working capital for the qualified business.
new text end

new text begin (f) A taxpayer who owns a controlling interest in the qualified business or who
receives more than 50 percent of the taxpayer's gross annual income from the qualified
business is not entitled to a credit under this subdivision. A member of the immediate
family of a taxpayer disqualified by this subdivision is not entitled to the credit under this
subdivision. For purposes of this subdivision, "immediate family" means the taxpayer's
spouse, parent, sibling, or child or the spouse of any such person.
new text end

new text begin (g) The commissioner may disallow any credit otherwise allowed under this
subdivision if any representation by a business in the application for certification as a
qualified business proves to be false or if the taxpayer or qualified business fails to satisfy
any conditions under this subdivision or section 116J.8732 or any conditions consistent
with those requirements otherwise determined by the commissioner. The commissioner
has four years after the due date of the return or after the return was filed, whichever
period expires later, to audit the credit and assess additional tax that may be found due
to failure to comply with the provisions of this subdivision and section 116J.8732. The
amount of any credit disallowed by the commissioner that reduced the taxpayer's income
tax liability for any or all applicable tax years, plus penalty and interest as provided under
chapter 289A, must be paid by the taxpayer.
new text end

new text begin (h) If the amount of the credit under this subdivision for any taxable year exceeds
the limitations under paragraph (a), clause (2), the excess is a credit carryover to each of
the four succeeding taxable years. The entire amount of the excess unused credit for
the taxable year must be carried first to the earliest of the taxable years to which the
credit may be carried. The amount of the unused credit that may be added under this
paragraph may not exceed the taxpayer's liability for tax, less the credit for the taxable
year. Each year, the aggregate amount of seed capital investment tax credit allowed for
investments under this subdivision is limited to allocations that a border city has available
for tax reductions in border city enterprise zones under section 469.170. The city must
annually notify the commissioner of the amount of its section 469.170 allocations that it
wishes to use to provide credits under this paragraph and the commissioner, after verifying
the available allocation, shall implement the limit under this paragraph. If investments
in qualified businesses reported to the commissioner exceed the limit on credits for
investments imposed by this subdivision, the credit must be allowed to taxpayers in the
chronological order of their investments in qualified businesses as determined from the
forms filed under section 116J.8732.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008, for taxable years
beginning after December 31, 2007, and only applies to investments made after the
qualified business has been certified by the commissioner of employment and economic
development.
new text end

Sec. 6.

Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 35. new text end

new text begin Renaissance zone; historic rehabilitation credit. new text end

new text begin (a) A taxpayer who
incurs costs that are eligible for a credit under section 47 of the Internal Revenue Code
for the rehabilitation of property in a renaissance zone is allowed a credit against the tax
imposed under this chapter, including the taxes under sections 290.091 and 290.0922,
equal to 25 percent of the federal credit for the taxable year. As used in this subdivision,
a "renaissance zone" is the area of the campus of the former state regional treatment
center in the city of Fergus Falls, including five buildings and associated land that were
acquired by the city prior to January 1, 2007.
new text end

new text begin (b) If the amount of the credit under this subdivision exceeds the tax liability under
this chapter for the year in which the cost is incurred, the amount that exceeds the tax
liability may be carried back to any of the three preceding taxable years or carried forward
to each of the ten taxable years succeeding the taxable year in which the expense was
incurred. The entire amount of the credit must be carried to the earliest taxable year to
which the amount may be carried. The unused portion of the credit must be carried to
the following taxable year.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2006, section 383E.20, is amended to read:

383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS.

The Anoka County Board may, by resolution adopted by a four-sevenths vote,
issue and sell general obligation bonds of the county in the manner provided in chapter
475 to acquire, better, and construct county library buildings. The bonds shall not be
subject to the requirements of sections 475.57 to 475.59. The maturity years and amounts
and interest rates of each series of bonds shall be fixed so that the maximum amount of
principal and interest to become due in any year, on the bonds of that series and of all
outstanding series issued by or for the purposes of libraries, shall not exceed an amount
equal to deleted text begin the lesser of (i) deleted text end .01 percent of the taxable market value of all taxable property in
the county, excluding any taxable property taxed by any city for the support of any free
public library deleted text begin , or (ii) $1,250,000 deleted text end . When the tax levy authorized in this section is collected,
it shall be appropriated and credited to a debt service fund for the bonds. The tax levy for
the debt service fund under section 475.61 shall be reduced by the amount available or
reasonably anticipated to be available in the fund to make payments otherwise payable
from the levy pursuant to section 475.61.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
Anoka County and its chief clerical officer timely complete their compliance with section
645.021, subdivisions 2 and 3.
new text end

Sec. 8.

Minnesota Statutes 2006, section 469.312, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Termination of designation of qualified business. new text end

new text begin No person will be
deemed to be a qualified business eligible for the benefits provided in sections 469.310
to 469.320 unless the person has entered into a business subsidy agreement with a local
government unit as provided in section 469.310, subdivision 11, prior to May 1, 2008.
new text end

Sec. 9.

Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
to read:

new text begin Subd. 1n. new text end

new text begin Obligations. new text end

new text begin After May 1, 2008, in addition to other authority in this
section, the council may issue certificates of indebtedness, bonds, or other obligations
under this section in an amount not exceeding $33,600,000 for capital expenditures as
prescribed in the council's regional transit master plan and transit capital improvement
program and for related costs, including the costs of issuance and sale of the obligations.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section applies in the counties of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the day following
final enactment.
new text end

Sec. 10.

Minnesota Statutes 2006, section 473F.08, is amended by adding a subdivision
to read:

new text begin Subd. 3c. new text end

new text begin Bloomington computation. new text end

new text begin Effective for property taxes payable in 2010
and thereafter, if the city of Bloomington has imposed the tax authorized under section
18, subdivision 3, by September 15 of the levy year preceding the taxes payable year, the
Hennepin County auditor shall determine the amount of the levy generated by the property
included in phase II of the Mall of America project. The Hennepin County auditor shall
distribute to the city of Bloomington the areawide portion of the levy computed under
this subdivision at the same time that payments are made to the other counties under
subdivision 7a. The city must use the money so distributed to finance a parking facility
for phase II of the Mall of America project. The additional distribution to the city of
Bloomington under this subdivision terminates effective for the first taxes payable year
after the cost of the parking facility has been paid.
new text end

Sec. 11.

Laws 1995, chapter 264, article 5, section 46, subdivision 2, is amended to
read:

Subd. 2.

Limitation on use of tax increments.

new text begin (a) new text end All revenues derived from tax
increments must be used in accordance with the housing replacement district plan. The
revenues must be used solely to pay the costs of site acquisition, relocation, demolition
of existing structures, site preparation, and pollution abatement on parcels identified in
the housing replacement district plan, as well as public improvements and administrative
costs directly related to those parcels.

new text begin (b) Notwithstanding paragraph (a), the city of Minneapolis and the city of Crystal
may use revenues derived from tax increments from its housing replacement district for
activities related to parcels not identified in the housing replacement plan, but which would
qualify for inclusion under section 45, subdivision 1, paragraph (b), clauses (1) through (3).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section applies to revenues from the housing replacement
districts, regardless of when they were received, and is effective the day following final
enactment and for the city of Minneapolis, upon compliance by the governing body of
the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 3, and, for
the city of Crystal, upon compliance by the governing body of the city of Crystal with
Minnesota Statutes, section 645.021, subdivision 3.
new text end

Sec. 12.

Laws 2003, chapter 127, article 10, section 31, subdivision 1, is amended to
read:

Subdivision 1.

District extension.

(a) The governing body of the city of Hopkins
may elect to extend the duration of its redevelopment tax increment financing district
2-11 by up to four additional years.

(b) Notwithstanding any law to the contrary, effective upon approval of this
subdivision, no increments may be spent on activities located outside of the area of the
district, other than new text begin :
new text end

new text begin (1) new text end to pay administrative expenses new text begin ; or
new text end

new text begin (2) to pay the costs of housing activities, provided that expenditures under this
clause may not exceed 20 percent of the total tax increments from the district new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Laws 2006, chapter 259, article 10, section 14, subdivision 1, is amended to
read:

Subdivision 1.

Definitions.

(a) "City" means the city of Minneapolis.

(b) "Homeless assistance tax increment district" means a contiguous area of the
city that:

(1) is no larger than deleted text begin six deleted text end new text begin eight new text end acres;

(2) is located within the boundaries of a city municipal development district; and

(3) contains at least two shelters for homeless persons that have been owned or
operated by nonprofit corporations that (i) are qualified charitable organizations under
section 501(c)(3) of the United States Internal Revenue Code, (ii) have operated such
homeless facilities within the district for at least five years, and (iii) have been recipients
of emergency services grants under Minnesota Statutes, section 256E.36.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the city of
Minneapolis with Minnesota Statutes, section 645.021.
new text end

Sec. 14.

Laws 2008, chapter 154, article 9, section 23, is amended to read:

Sec. 23. CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT;
SPECIAL RULES.

(a) If the city elects upon the adoption of a tax increment financing plan for a district,
the rules under this section apply to deleted text begin a deleted text end new text begin one or more new text end redevelopment tax increment financing
deleted text begin district deleted text end new text begin districts new text end established by the city of Fridley or the housing and redevelopment
authority of the city. The new text begin area within which the new text end redevelopment tax increment deleted text begin district deleted text end new text begin
districts may be created new text end includes the following parcels and adjacent railroad property
and shall be referred to as the Northstar Transit Station deleted text begin District deleted text end new text begin Project Area new text end : parcel
numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018,
223024120012, 223024120011, 223024120005, 223024120004, 223024120003,
223024120013, 223024120008, 223024120007, 223024120006, 223024130005,
223024130010, 223024130011, 223024130003, 153024440039, 153024440037,
153024440041, 153024440042, 223024110013, 223024110016, 223024110017,
223024140008, 223024130002, 223024420004, 223024410002, 223024410003,
223024110008, 223024110007, 223024110019, 223024110018, 223024110003,
223024140003, 223024140009, 223024140002, 223024140010, and 223024410007.

(b) The requirements for qualifying a redevelopment tax increment district under
Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located
within the Northstar Transit Station deleted text begin District deleted text end new text begin Project Area new text end , which are deemed eligible for
inclusion in a redevelopment tax increment district.

(c) In addition to the costs permitted by Minnesota Statutes, section 469.176,
subdivision 4j, eligible expenditures within the Northstar Transit Station deleted text begin District deleted text end new text begin Project
Area new text end include those costs necessary to provide for the construction and land acquisition
for a tunnel under the Burlington Northern Santa Fe railroad tracks new text begin to allow access to the
Northstar Commuter Rail new text end .

(d) new text begin The limitations on spending increments outside of the district under Minnesota
Statutes, section 469.1763, subdivision 2, do not apply, but increments may only be
expended on improvements or activities within the area defined in paragraph (a).
new text end

new text begin (e) new text end Notwithstanding the provisions of Minnesota Statutes, section 469.1763,
subdivision 2, the city of Fridley may expend increments generated from its tax increment
financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota
Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment
financing districts Nos. 11, 12, and 13, but only within the Northstar Transit Station
deleted text begin District deleted text end new text begin Project Area new text end .

deleted text begin (e) deleted text end new text begin (f) new text end The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3,
does not apply to the Northstar Transit Station deleted text begin District deleted text end new text begin Project Area new text end or to tax increment
financing districts Nos. 11, 12, and 13.

deleted text begin (f) deleted text end new text begin (g) new text end The use of revenues for decertification under Minnesota Statutes, section
469.1763, subdivision 4, does not apply to tax increment financing districts Nos. 11,
12, and 13.

new text begin (h) The authority to approve tax increment financing plans and to establish one or
more tax increment financing districts under this section expires on December 31, 2017.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing body
of the city of Fridley and upon compliance by the city with Minnesota Statutes, section
645.021, subdivision 3.
new text end

Sec. 15.

Laws 2008, chapter 154, article 9, section 24, is amended to read:

Sec. 24. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING deleted text begin ;
EXPENDITURES OUTSIDE DISTRICT deleted text end .

new text begin Subdivision 1. new text end

new text begin Expenditures outside district. new text end

Notwithstanding the provisions of
Minnesota Statutes, deleted text begin section deleted text end new text begin sections 469.176, subdivision 4d, and new text end 469.1763, subdivision
2, new text begin or any other law to the contrary, new text end the city of New Brighton may expend increments
generated from its tax increment financing deleted text begin district No. 26 to facilitate eligible activities deleted text end new text begin
districts 9, 20, and 26. The increments may be used to pay eligible expenses new text end as permitted
by Minnesota Statutes, section 469.176, subdivision deleted text begin 4e deleted text end new text begin 4j new text end , outside the boundaries of
tax increment financing deleted text begin district No. 26 deleted text end new text begin districts 9, 20, and 26 new text end , but only within the area
described in Laws 1998, chapter 389, article 11, section 24, subdivision 1, deleted text begin and deleted text end commonly
referred to as the Northwest Quadrant. Minnesota Statutes, section 469.1763, subdivisions
3 and 4, do not apply to expenditures permitted by this section.

new text begin Subd. 2. new text end

new text begin District duration extension. new text end

new text begin Notwithstanding the provisions of Minnesota
Statutes, section 469.176, subdivision 1b, or any other law to the contrary, the duration
limits that apply to redevelopment tax increment financing districts numbers 31 and 32
established under Laws 1998, chapter 389, article 11, section 24, and hazardous substance
subdistricts numbers 31A and 32A established under Minnesota Statutes, sections 469.174
to 469.1799, are extended by four years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing body
of the city of New Brighton and upon compliance by the city with Minnesota Statutes,
section 645.021, subdivision 3.
new text end

Sec. 16. new text begin CITY OF AUSTIN; TAX INCREMENT FINANCING AUTHORITY.
new text end

new text begin Notwithstanding the requirements of Minnesota Statutes, section 469.1763,
subdivision 3, that activities must be undertaken within a five-year period from the date of
certification of tax increment financing district and notwithstanding the provisions of any
other law, the governing body of the city of Austin may use tax increments from its Tax
Increment Financing District No. 9 to reimburse the city's housing and redevelopment
authority for money spent disposing of soils and debris in the tax increment financing
district, as required by the Minnesota Pollution Control Agency.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Austin with the requirements of Minnesota Statutes, section 645.021.
new text end

Sec. 17. new text begin CITY OF BLOOMINGTON; TAX INCREMENT FINANCING
DISTRICT; PROJECT REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Addition of parcels to Tax Increment District No. 1-G.
new text end

new text begin Notwithstanding the provisions of Minnesota Statutes, section 469.175, subdivision 4,
or any other law to the contrary, the governing bodies of the Port Authority of the city
of Bloomington and the city of Bloomington may elect to eliminate certain real property
from Tax Increment District No. 1-C within Industrial Development District No. 1 Airport
South in the city of Bloomington, Minnesota, and expand the boundaries of Tax Increment
District No. 1-G to include real property, which is described as follows:
new text end

new text begin (1) PARCEL A: Outlot A, MALL OF AMERICA 5TH ADDITION, according to
the recorded plat thereof, Hennepin County, Minnesota;
new text end

new text begin (2) PARCEL B: Lots 1 and 2, Block 1, MALL OF AMERICA 6TH ADDITION,
according to the recorded plat thereof, Hennepin County, Minnesota;
new text end

new text begin (3) PARCEL C: That part of Lindau Lane lying westerly of 24th Avenue South and
lying easterly of State Highway No. 77;
new text end

new text begin (4) PARCEL D: Those parts of Lots 1, 2, and 3, Block 1, MALL OF AMERICA
3RD ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota,
which lie northerly of a line described as commencing at the most westerly northwest
corner of said Lot 1; thence on an assumed bearing of South 4 degrees 10 minutes 55
seconds West, along the west line of said Lot 1, a distance of 58.60 feet to the point of
beginning of the line to be described; thence South 89 degrees 59 minutes 29 seconds East
a distance of 205.48 feet; thence South 62 degrees 16 minutes 23 seconds East a distance
of 169.47 feet; thence North 445 degrees 01 minute 28 seconds East a distance of 249.76
feet; thence South 89 degrees 59 minutes 39 seconds East a distance of 88.47 feet; thence
South 45 degrees 09 minutes 10 seconds East a distance of 225.13 feet; thence South 89
degrees 59 minutes 52 seconds East a distance of 303.62 feet; thence South 0 degrees 00
minutes 08 seconds West a distance of 10.00 feet; thence North 89 degrees 57 minutes
47 seconds East a distance of 55.90 feet; thence North 0 degrees 06 minutes 52 seconds
West a distance of 10.01 feet; thence North 89 degrees 59 minutes 04 seconds East a
distance of 332.04 feet; thence North 44 degrees 57 minutes 59 seconds East a distance of
251.28 feet; thence South 45 degrees 05 minutes 41 seconds East a distance of 267.55
feet; thence North 73 degrees 11 minutes 28 seconds East a distance of 145.63 feet; thence
South 89 degrees 59 minutes 38 seconds East a distance of 217.21 feet to the east line of
said Lot 1 and said line there terminating;
new text end

new text begin (5) PARCEL E: That part of Lot 1, Block 1, MALL OF AMERICA 3RD
ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota,
described as commencing at the most southerly southwest corner of said Lot 1; thence
on an assumed bearing of South 88 degrees 03 minutes 50 seconds East, along the south
line of said Lot 1, a distance of 847.28 feet to the point of beginning of the parcel to be
described; thence North 0 degrees 01 minutes 05 seconds West a distance of 307.69 feet;
thence North 89 degrees 59 minutes 32 seconds East a distance of 163.77 feet; thence
North 0 degrees 00 minutes 36 seconds East a distance of 10.17 feet; thence South 89
degrees 59 minutes 24 seconds East a distance 55.93 feet; thence South 0 degrees 02
minutes 42 seconds West a distance of 10.21 feet; thence South 89 degrees 59 minutes 24
seconds East a distance of 242.25 feet; thence South 0 degrees 00 minutes 36 seconds
West a distance of 54.87 feet; thence South 62 degrees 14 minutes 23 seconds East a
distance of 22.55 feet; thence South 45 degrees 05 minutes 26 seconds East a distance
of 263.33 feet; thence South 0 degrees 12 minutes 39 seconds East a distance of 62.13
feet to said south line of Lot 1; thence westerly along said south line of Lot 1, a distance
of 668.64 feet to the point of beginning;
new text end

new text begin (6) PARCEL F: That part of Lot 1, Block 1, MALL OF AMERICA 3RD
ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota,
described as beginning at the most westerly southwest corner of said Lot 1; thence on an
assumed bearing of North 4 degrees 10 minutes 55 seconds East, along the west line of
said Lot 1, a distance of 490.00 feet; thence South 89 degrees 59 minutes 26 seconds East
a distance of 69.49 feet; thence South 0 degrees 00 minutes 34 seconds West a distance of
488.70 feet; thence North 89 degrees 59 minutes 26 seconds West a distance of 105.14
feet to the point of beginning;
new text end

new text begin (7) PARCEL G: That part of Lot 1, Block 1, MALL OF AMERICA 3RD
ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota,
described as commencing at the most westerly southwest corner of said Lot 1; thence on
an assumed bearing of North 4 degrees 10 minutes 55 seconds East, along the west line
of said Lot 1, a distance of 873.70 feet; thence South 89 degrees 58 minutes 59 seconds
East a distance of 273.87 feet to the point of beginning of the parcel to be described;
thence continuing South 89 degrees 58 minutes 59 seconds East a distance of 130.00 feet;
thence South 0 degrees 01 minute 01 second West a distance of 216.53 feet; thence South
85 degrees 23 minutes 04 seconds East a distance of 1.70 feet; thence South 0 degrees
01 minute 01 second West a distance of 87.63 feet; thence South 83 degrees 20 minutes
10 seconds West a distance of 1.68 feet; thence South 0 degrees 01 minute 49 seconds
East a distance of 216.46 feet; thence North 89 degrees 58 minutes 59 seconds West a
distance of 130.21 feet; thence North 0 degrees 01 minute 01 second East a distance of
520.95 feet to the point of beginning, which lies above an elevation of 894.2 feet, Mean
Sea Level Datum NGVD 1929 adjustment;
new text end

new text begin (8) PARCEL H: That part of Lot 1, Block 1, MALL OF AMERICA 3RD
ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota,
described as commencing at the most westerly southwest corner of said Lot 1; thence on
an assumed bearing of North 4 degrees 10 minutes 55 seconds East, along the west line of
said Lot 1, a distance of 873.70 feet; thence South 89 degrees 58 minutes 59 seconds East a
distance of 403.87 feet; thence North 89 degrees 56 minutes 58 seconds East a distance of
61.26 feet to the point of beginning of the parcel to be described; thence South 89 degrees
56 minutes 58 seconds West a distance of 61.26 feet; thence South 0 degrees 01 minute 01
second West a distance of 216.53 feet; thence South 85 degrees 23 minutes 04 seconds
East a distance of 1.70 feet; thence South 0 degrees 01 minute 01 second West a distance
of 87.63 feet; thence South 83 degrees 20 minutes 10 seconds West a distance of 1.68 feet;
thence South 0 degrees 01 minute 49 seconds East a distance of 216.46 feet; thence North
89 degrees 56 minutes 58 seconds East a distance of 61.15 feet to a line bearing South 0
degrees 00 minutes 24 seconds West from the point of beginning; thence North 0 degrees
00 minutes 24 seconds East a distance of 520.95 feet to the point of beginning;
new text end

new text begin (9) PARCEL I: That part of Lot 1, Block 1, MALL OF AMERICA 3RD ADDITION,
according to the recorded plat thereof, Hennepin County, Minnesota, described as
commencing at the most westerly southwest corner of said Lot 1; thence on an assumed
bearing of North 4 degrees 10 minutes 55 seconds East, along the west line of said Lot 1, a
distance of 873.70 feet; thence South 89 degrees 58 minutes 59 seconds East a distance
of 403.87 feet; thence North 89 degrees 56 minutes 58 seconds East a distance of 61.26
feet; thence South 0 degrees 00 minutes 24 seconds West a distance of 5.54 feet to the
point of beginning of the parcel to be described; thence continuing South 0 degrees 00
minutes 24 seconds West a distance of 300.00 feet; thence South 89 degrees 59 minutes 36
seconds East a distance of 123.79 feet; thence North 0 degrees 00 minutes 24 seconds East
a distance of 299.98 feet; thence North 89 degrees 58 minutes 55 seconds West a distance
of 123.79 feet to the point of beginning, which lies above an elevation of 877.6 feet, Mean
Sea Level Datum NGVD 1929 adjustment;
new text end

new text begin (10) PARCEL J: That part of Lot 4, Block 1, MALL OF AMERICA 3RD
ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota, which
lies above an elevation of 878.0 feet, Mean Sea Level Datum NGVD 1929 adjustment; and
new text end

new text begin (11) PARCEL K: That part of Lot 1, Block 1, MALL OF AMERICA 3RD
ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota,
described as beginning at the most southerly southeast corner of said Lot 1; thence on an
assumed bearing of North 86 degrees 49 minutes 30 seconds West, along the south line of
said Lot 1, a distance of 117.87 feet; thence North 0 degrees 01 minute 27 seconds East a
distance of 293.98 feet; thence North 89 degrees 59 minutes 41 seconds East a distance of
213.38 feet to the east line of said Lot 1; thence southerly and westerly along said east and
south lines of Lot 1, a distance of 357.03 feet to the point of beginning.
new text end

new text begin Subd. 2. new text end

new text begin Original tax capacity of Tax Increment District No. 1-G. new text end

new text begin Upon
inclusion of the real property described above in the Tax Increment District No. 1-G,
the Hennepin County auditor must increase the original tax capacity of Tax Increment
District No. 1-G by $10,490.
new text end

new text begin Subd. 3. new text end

new text begin Use of increments. new text end

new text begin All tax increments from Tax Increment District No.
1-G must be used for infrastructure costs.
new text end

new text begin Subd. 4. new text end

new text begin Public hearing on district modification. new text end

new text begin When the governing bodies of
the port authority or the city elect to exercise the authority provided in subdivision 1 to
modify the districts, they must conduct a public hearing after published notice on the
issue, with the meeting beginning between 6:00 p.m. and 7:00 p.m. on a weeknight.
Modification of the district must be approved by a unanimous vote of all members of the
governing body who are present at the meeting.
new text end

new text begin Subd. 5. new text end

new text begin Construction of Mall of America phase II. new text end

new text begin The governing body of the
city of Bloomington and the Bloomington port authority, as a condition of providing tax
increments or other financial assistance for infrastructure costs of the Mall of America
phase II, must enter into an agreement with the developers of the project that ensures that
the facility be, to the greatest extent practicable, constructed of American-made steel and
that prohibits inclusion of an auditorium, theater, or similar entertainment venue that
has a seating capacity in excess of 1500.
new text end

new text begin Subd. 6. new text end

new text begin Living wage. new text end

new text begin Any agreement to provide financial assistance to phase II of
the Mall of America project must include a provision that requires payment of wages that
meet the requirements of Minnesota Statutes, section 469.310, subdivision 11, paragraph
(g), to persons employed on a full-time basis at the facility. This subdivision does not
apply to seasonal or temporary employees or to internships or similar positions intended
to provide career experience or training. This subdivision does not apply to nonprofit
organizations, educational institutions, or businesses that employ fewer than 50 employees.
new text end

new text begin Subd. 7. new text end

new text begin Affordable access. new text end

new text begin To the extent determined by the governing body of
the city or the port authority, any agreement to provide financial assistance to phase II
of the Mall of America project must provide for affordable access to the amusement
areas of the facility.
new text end

new text begin Subd. 8. new text end

new text begin Labor peace. new text end

new text begin As a condition to exercising the authority provided in
subdivision 1, the governing bodies of the city of Bloomington and the Bloomington Port
Authority shall require the developers of Phase II of the Mall of America project to enter
into a labor peace agreement with the labor organization which is most actively engaged in
representing and attempting to represent hotel workers in Hennepin and Ramsey Counties.
The labor peace agreement must be an enforceable agreement and must prohibit the labor
organization and its members from engaging in any boycott or other activity advising
customers not to patronize any hotel that is part of Phase II for at least the first five years
of the hotel's operation, and must cover all operations at the hotel, other than construction,
alteration, or repair of the premises separately owned and operated, which are conducted
by lessees or tenants or under management agreements, except retail operations, including
gift, jewelry, and clothing shops that have annual gross revenues of less than $250,000.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance with Minnesota
Statutes, section 645.021, subdivision 3.
new text end

Sec. 18. new text begin CITY OF BLOOMINGTON; LOCAL TAXING AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Additional taxes authorized; use of proceeds. new text end

new text begin Notwithstanding
Minnesota Statutes, section 477A.016, or any other law, ordinance, or charter provision
to the contrary, the governing body of the city of Bloomington may impose any or all of
the taxes described in this section. The proceeds of any taxes imposed under this section,
less refunds and the cost of collection, must be used to provide financing for a parking
facility for the Mall of America phase II. If a governmental entity other than the city of
Bloomington issues the obligations used to finance the parking facility, the city may
transfer the funds available under this act for financing the project to the entity that issued
the bonds.
new text end

new text begin Subd. 2. new text end

new text begin Sales tax. new text end

new text begin The city may impose by ordinance a sales and use tax of up
to one percent within a special taxing district that includes the geographic area included
within Tax Increment Districts No. 1-C and No. 1-G in the city of Bloomington. The
provisions of Minnesota Statutes, section 297A.99, except for subdivisions 2 and 3,
govern the imposition, administration, collection, and enforcement of the tax authorized
in this subdivision.
new text end

new text begin Subd. 3. new text end

new text begin Lodging tax. new text end

new text begin The city may impose, by ordinance, a tax of no less than
three-quarters of one percent and no more than one percent on the gross receipts subject to
the lodging tax under Minnesota Statutes, section 469.190. This tax is in addition to any
tax imposed under Minnesota Statutes, section 469.190, and, if imposed, must apply at the
same rate in all areas of the city.
new text end

new text begin Subd. 4. new text end

new text begin Admissions and recreation tax. new text end

new text begin The city may impose, by ordinance, a
tax of up to one percent on admissions to entertainment and recreational facilities and
rental of recreation equipment at sites within Tax Increment Districts No. 1-C and No.
1-G in the city of Bloomington.
new text end

new text begin Subd. 5. new text end

new text begin Food and beverage tax. new text end

new text begin The city may impose, by ordinance, an additional
sales tax of up to three percent on sales of food and beverages primarily for consumption
on or off the premises by restaurants and places of refreshment as defined by resolution of
the city within Tax Increment Districts No. 1-C and No. 1-G in the city of Bloomington.
new text end

new text begin Subd. 6. new text end

new text begin Lodging taxes. new text end

new text begin Notwithstanding any law or ordinance, the city may
use the unobligated proceeds of any existing city lodging tax attributable to imposition
of the tax on lodging facilities constructed after the date of enactment of this act within
Tax Increment Financing District No. 1-G. In this subdivision, "unobligated proceeds
of any existing city lodging tax" means the proceeds of a lodging tax imposed by the
city of Bloomington prior to May 1, 2008, to the extent the proceeds of the tax are not
contractually pledged to any other specific uses. Lodging tax proceeds derived from
lodging facilities constructed after the date of enactment of this act within Tax Increment
Financing District No. 1-G that have been required by law to be expended for promotion
of the metropolitan sports area or for marketing and promotion of the city by the city
convention bureau may be expended for the purposes described in subdivision 1,
notwithstanding the dedications in those laws.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 19. new text begin DAKOTA COUNTY COMMUNITY DEVELOPMENT AUTHORITY;
PLAN MODIFICATION.
new text end

new text begin Notwithstanding Minnesota Statutes, section 469.175, subdivision 4, the Dakota
County Community Development Authority may designate additional property to be
acquired by the authority for a tax increment financing project without meeting the
requirements for approval of an original tax increment financing plan if the property:
new text end

new text begin (1) consists of one or more parcels under common ownership;
new text end

new text begin (2) is acquired from a willing seller;
new text end

new text begin (3) is acquired for purposes of development as a housing project as defined in
Minnesota Statutes, section 469.174, subdivision 11; and
new text end

new text begin (4) the acquisition is approved by the governing body of the authority after holding
a public hearing thereon after published notice in a newspaper of general circulation in
the municipality in which the property is located at least once not less than ten days nor
more than 30 days prior to the date of the hearing. The published notice must include a
map depicting the property and the general area of the municipality within which the
property is located. The hearing may be held before or at the time of authority approval
of the acquisition.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the Dakota County Community Development Authority with the requirements of
Minnesota Statutes, section 645.021, and terminates July 1, 2013.
new text end

Sec. 20. new text begin CITY OF DAYTON; HASSAN TOWNSHIP; LIMIT ON ABATEMENTS.
new text end

new text begin Notwithstanding the limitation in Minnesota Statutes, section 469.1813, subdivision
8, for the city of Dayton and Hassan Township, in any year, the total amount of property
taxes abated by the city or the town may not exceed ten percent of the net tax capacity of
the city or town for the taxes payable year to which the abatement applies.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective, for the city of Dayton, upon
compliance by the governing body of the city of Dayton and, for Hassan Township,
upon compliance by the governing body of Hassan Township, with the requirements
of Minnesota Statutes, section 645.021.
new text end

Sec. 21. new text begin CITY OF DULUTH; EXTENSION OF TIME FOR ACTIVITY IN TAX
INCREMENT FINANCING DISTRICTS.
new text end

new text begin Subdivision 1. new text end

new text begin District No. 20. new text end

new text begin The requirements of Minnesota Statutes, section
469.1763, subdivision 3, that activities must be undertaken within a five-year period from
the date of certification of a tax increment financing district, must be considered to be met
for Duluth Economic Development Authority Tax Increment Financing District No. 20 if
the activities are undertaken within ten years from the date of certification of the district.
new text end

new text begin Subd. 2. new text end

new text begin District No. 21. new text end

new text begin The requirements of Minnesota Statutes, section
469.1763, subdivision 3, that activities must be undertaken within a five-year period from
the date of certification of a tax increment financing district, must be considered to be met
for Duluth Economic Development Authority Tax Increment Financing District No. 21 if
the activities are undertaken within ten years from the date of certification of the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Duluth with the requirements of Minnesota Statutes, section 645.021.
new text end

Sec. 22. new text begin CITY OF OAKDALE; EXTENDED DURATION FOR TAX
INCREMENT FINANCING DISTRICTS.
new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the
Housing and Redevelopment Authority in and for the city of Oakdale may create a
redevelopment tax increment district that has a duration limit of 35 years after receipt of
the first increment in each of the areas described in paragraph (b).
new text end

new text begin (b) The district or districts may be created in either or both of the areas
comprised of the parcels with the following parcel identification numbers: (1)
3102921320053; 3102921320054; 3102921320055; 3102921320056; 3102921320057;
3102921320058; 3102921320062; 3102921320063; 3102921320059; 3102921320060;
and 3102921320061; and (2) 3102921330005 and 3102921330004.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 23. new text begin CITY OF WELLS; DISPOSITION OF TIF REVENUES.
new text end

new text begin Notwithstanding the provisions of Minnesota Statutes, section 469.174, subdivision
25, the following are deemed not to be "increments," "tax increments," or "revenues
derived from tax increment" for purposes of the redevelopment district in the city of
Wells, identified as Downtown Development Program 1, for amounts received after
decertification of the district:
new text end

new text begin (1) rents paid by private tenants for use of a building acquired in whole or in part
with tax increments; and
new text end

new text begin (2) proceeds from the sale of the building.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Wells with the requirements of Minnesota Statutes, section 645.021.
new text end

ARTICLE 10

DEPARTMENT INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2006, section 289A.18, subdivision 1, as amended by
Laws 2008, chapter 154, article 11, section 5, 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 new 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 or 4 to 10, 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 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 11

DEPARTMENT 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. 30. 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, as amended by Laws 2008, chapter
154, article 12, section 20, 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, a seller is relieved of liability if:

(1) the seller obtains a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, at the time of the sale or within
90 days after the date of the sale; or

(2) if the seller has not obtained a fully completed exemption certificate or all the
relevant information required by section 297A.72, subdivision 2, within the time provided
in clause (1), within 120 days after a request for substantiation by the commissioner,
the seller either:

(i) obtains in good faith a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, from the purchaser; or

(ii) proves by other means that the transaction was not subject to tax.

(c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:

(1) fraudulently fails to collect the tax; or

(2) solicits purchasers to participate in the unlawful claim of an exemption.

(d) new text begin 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

new text begin (e) 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, as amended by Laws
2008, chapter 154, article 12, section 26, 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;

(7) prescription corrective eyeglasses; and

(8) kidney dialysis equipment, including repair and replacement parts.

(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.

(7) "Kidney dialysis equipment" means equipment that:

(i) is used to remove waste products that build up in the blood when the kidneys are
not able to do so on their own; and

(ii) can withstand repeated use, including multiple use by a single patient.

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 12

DEPARTMENT 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, as amended by Laws
2008, chapter 154, article 15, section 7, 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 new text begin , new text end and 297E.02, and, for the taxes listed in this subdivision, the applicable penalties
for nonpayment under section 289A.60.

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 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, as amended by Laws
2008, chapter 154, article 14, section 5, is amended to read:

Subd. 4.

Use tax; deleted text begin prescription deleted text end new text begin legend new text end drugs.

(a) A person that receives
deleted text begin prescription deleted text end new text begin legend new text end 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 deleted text begin to the wholesale drug distributor deleted text end new text begin for the legend drugs new text end multiplied by the tax percentage
specified in this section. Liability for the tax is incurred when deleted text begin prescription deleted text end new text begin legend new text end drugs
are received or delivered in Minnesota by the person.

(b) 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 the day following final enactment.
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

(5) deleted text begin 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 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 13

DEPARTMENT 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 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. 4.

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. 5.

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. 6.

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. 7.

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. 8.

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. 9.

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. 10.

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. 11.

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. 12.

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 as defined under section 272.03, subdivision 13.
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 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. 14.

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. 15.

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 and the values are provided to
the city or county assessor by order 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. 16.

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. 17.

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. 18.

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. 19.

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. 20.

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. 21.

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. 22.

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. 23.

Minnesota Statutes 2006, section 273.124, subdivision 13, as amended by
Laws 2008, chapter 154, article 13, section 29, 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) The format and contents of a uniform homestead application shall be prescribed
by the commissioner of revenue. 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 receive homestead
treatment.

(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 , and the
federal income tax schedule F required by this section, 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 and spouse of a relative
occupying 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 or relative's spouse 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, or, for the purposes of proceeding under the
Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.

(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 any assessment year, 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. 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 occupant of homestead
property who is the property owner, property owner's spouse, qualifying relative of a
property owner, or a spouse of a qualifying relative. 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 occupant of homestead property
who is the property owner, property owner's spouse, qualifying relative of a property
owner, or spouse of a qualifying relative;

(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 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. 24.

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 new text begin at least 40 acres, including undivided government lots and correctional 40's new text end 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. 25.

Minnesota Statutes 2006, section 273.128, subdivision 1, as amended by Laws
2008, chapter 154, article 2, section 10, 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 20
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, or a local unit of government, 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. 26.

Minnesota Statutes 2006, section 273.13, subdivision 22, as amended by Laws
2008, chapter 154, article 2, section 11, is amended to read:

Subd. 22.

Class 1.

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

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

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

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

(2) any person 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 (2) 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 new text begin , and that the
property is not eligible for the valuation exclusion under subdivision 34 new text end .

Property is classified and assessed under paragraph (b) only if the commissioner
of revenue or the county assessor certifies 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 $50,000 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 and personal property that abuts public
water as defined in section 103G.005, subdivision 15, 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. Class 1c property must contain three or more rental units. A
"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
camping site equipped with water and electrical hookups for recreational vehicles. Class
1c property must provide recreational activities such as the rental of ice fishing houses,
boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing tackle. Any unit in
which the right to use the property is transferred to an individual or entity by deeded
interest, or the sale of shares or stock, no longer qualifies for class 1c even though it may
remain available for rent. A camping pad offered for rent by a property that otherwise
qualifies for class 1c is also class 1c, regardless of the term of the rental agreement, as long
as the use of the camping pad does not exceed 250 days. 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 $600,000 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, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 percent. Owners of real and
personal property devoted to temporary and seasonal residential occupancy for recreation
purposes in which all or a portion of the property was devoted to commercial purposes for
not more than 250 days in the year preceding the year of assessment desiring classification
as class 1c, must submit a declaration to the assessor designating the cabins or units
occupied for 250 days or less in the year preceding the year of assessment by January 15 of
the assessment year. Those cabins or units and a proportionate share of the land on which
they are located must be designated as class 1c as otherwise provided. The remainder of
the cabins or units and a proportionate share of the land on which they are located must be
designated as class 3a commercial. The owner of property desiring designation as class
1c property must provide guest registers or other records demonstrating that the units for
which class 1c designation is sought were not occupied for more than 250 days in the
year preceding the assessment if so requested. The portion of a property operated as a
(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
nonresidential facility operated on a commercial basis not directly related to temporary
and seasonal residential occupancy for recreation purposes does not qualify for class 1c.

(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. 27.

Minnesota Statutes 2006, section 273.13, subdivision 25, as amended by Laws
2008, chapter 154, article 2, section 13, is amended to read:

Subd. 25.

Class 4.

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

(b) Class 4b includes:

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

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

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

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

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

(c) Class 4bb includes:

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

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

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

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

(d) Class 4c property includes:

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

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

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

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

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

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

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

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

For purposes of this clause,

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

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

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue
Code deleted text begin of 1986, as amended through December 31, 1990 deleted text end ; and

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

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

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

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

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

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

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

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

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

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

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

(i) the land abuts a public airport; and

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

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

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

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

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

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

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

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. 28.

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. 29.

Minnesota Statutes 2006, section 276.04, subdivision 2, as amended by Laws
2008, chapter 154, article 2, section 19, 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, before credits;

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

(5) any credits received under sections 273.119; deleted text begin 273.123 deleted text end new text begin 273.1234 or 273.1235 new text end ;
273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the
amount of credit received under section 273.135 must be separately stated and identified
as "taconite tax relief"; and

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 30.

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. 31.

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. 32.

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. 33.

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. 34. 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 14

DEPARTMENT 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 of revenue, 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 of revenue 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 of revenue 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 of revenue shall notify
the commissioner of employment and economic development 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 of revenue shall promptly notify the commissioner of
employment and economic development 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 15

DEPARTMENT 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, as amended by Laws
2008, chapter 154, article 15, section 2, is amended to read:

Subd. 2.

Agency participation.

(a) A referring agency must refer, by electronic
means, debts to the commissioner for collection. deleted text begin 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) Before a debt becomes 121 days past due, a referring agency may refer the
debt to the commissioner for collection at any time after a debt becomes delinquent and
uncontested and the debtor has no further administrative appeal of the amount of the debt.
When a debt owed to a referring agency becomes 121 days past due, the referring 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 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.

(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.

new text begin (a) new text end 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 (b) If a debt has been referred to the commissioner for collection under chapter 16D,
and the referring agency meets the definition of claimant agency under this chapter, the
commissioner must notify the debtor prior to using revenue recapture under this chapter
for collection of the debt. The notice must be sent by United States mail or personal
delivery to the last known address of the debtor.
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

ARTICLE 16

MISCELLANEOUS

Section 1.

Minnesota Statutes 2006, section 287.04, is amended to read:

287.04 EXEMPTIONS.

The tax imposed by section 287.035 does not apply to:

(a) A decree of marriage dissolution or an instrument made pursuant to it.

(b) A mortgage given to correct a misdescription of the mortgaged property.

(c) A mortgage or other instrument that adds additional security for the same debt
for which mortgage registry tax has been paid.

(d) A contract for the conveyance of any interest in real property, including a
contract for deed.

(e) A mortgage secured by real property subject to the minerals production tax of
sections 298.24 to 298.28.

(f) The principal amount of a mortgage loan made under a low and moderate
income or other affordable housing program, if the mortgagee is a federal, state, or local
government agency.

(g) Mortgages granted by fraternal benefit societies subject to section 64B.24.

(h) A mortgage amendment or extension, as defined in section 287.01.

(i) An agricultural mortgage if the proceeds of the loan secured by the mortgage are
used to acquire or improve real property classified under section 273.13, subdivision 23,
paragraph (a), or (b), clause (1), (2), or (3).

(j) A mortgage on an armory building as set forth in section 193.147.

new text begin (k) A mortgage, including one that replaces or refinances an existing mortgage,
on property located in the area of southeast Minnesota designated under Presidential
Declaration of Major Disaster, DR-1717, and which was damaged by that disaster. This
paragraph applies to the extent that the new or additional indebtedness was used to repair
or replace property damaged by the disaster. For a mortgage that replaces or refinances an
existing mortgage, this exemption also applies to the debt replaced or refinanced. A form,
prepared by the commissioner of revenue, must be signed by the property owner and the
county assessor in which the property is located, stating that the property qualifies under
this paragraph, to receive the exemption under this paragraph. The exemption under this
paragraph is effective for one year from the date of the disaster declaration.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for mortgages acknowledged and
recorded on or after August 1, 2007. A property owner who has paid the tax under section
287.04 on a mortgage that qualifies for the exemption under this section may apply to the
commissioner of revenue for a refund of the tax.
new text end

Sec. 2. new text begin DATA UPDATE.
new text end

new text begin The commissioner of revenue must continue to maintain, update, and make available
the information required under Laws 1987, chapter 268, article 7, section 1, subdivision
6, paragraph (b). The commissioner must provide the most complete and current data
available, when requested, to the chairs of the senate and house of representatives
committees on taxes. $200,000 is appropriated from the general fund to the commissioner
of revenue in fiscal year 2009 for this purpose.
new text end