SF 3220

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/18/2022 08:53am

A bill for an act
relating to taxation; making various policy and technical changes to partnership
taxes, sales and use taxes, special taxes, certain state aids, property tax refunds,
and other miscellaneous taxes and tax provisions; amending Minnesota Statutes
2020, sections 6.495, subdivision 3; 290A.03, subdivision 13; 290A.19; 296A.083,
subdivision 3; 297A.61, subdivision 29; 297F.05, subdivisions 4, 4a; 477B.01,
subdivisions 5, 10, 11, by adding subdivisions; 477B.02, subdivisions 2, 3, 5, 8,
9, by adding a subdivision; 477B.03, subdivisions 2, 3, 4, 5, 7; 477B.04, subdivision
1, by adding a subdivision; 477C.03, subdivisions 2, 5; 477C.04, by adding a
subdivision; Minnesota Statutes 2021 Supplement, sections 289A.08, subdivision
7a; 289A.382, subdivision 2; repealing Minnesota Statutes 2020, sections 477B.02,
subdivision 4; 477B.03, subdivision 6.

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

ARTICLE 1

PARTNERSHIP TAXES

Section 1.

Minnesota Statutes 2021 Supplement, section 289A.08, subdivision 7a, is
amended to read:

Subd. 7a.

Pass-through entity tax.

(a) For the purposes of this subdivision, the following
terms have the meanings given:

(1) "income" has the meaning given in subdivision 7, paragraph (j), modified by the
addition provided in section 290.0131, subdivision 5, and the subtraction provided in section
290.0132, subdivision 3, except that the provisions that apply to a partnership apply to a
qualifying entity and the provisions that apply to a partner apply to a qualifying owner. The
income of both a resident and nonresident qualifying owner is allocated and assigned to
this state as provided for nonresident partners and shareholders under sections 290.17,
290.191, and 290.20;

(2) "qualifying entity" means a partnership, limited liability company new text begin taxed as a
partnership or S corporation new text end , or S corporation including a qualified subchapter S subsidiary
organized under section 1361(b)(3)(B) of the Internal Revenue Code. Qualifying entity does
not include a partnership, limited liability company, or corporation that has a partnership,
limited liability company other than a disregarded entity, or corporation as a partner, member,
or shareholder; and

(3) "qualifying owner" means:

(i) a resident or nonresident individual or estate that is a partner, member, or shareholder
of a qualifying entity; or

(ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an
S corporation.

(b) For taxable years beginning after December 31, 2020, in which the taxes of a
qualifying owner are limited under section 164(b)(6)(B) of the Internal Revenue Code, a
qualifying entity may elect to file a return and pay the pass-through entity tax imposed under
paragraph (c). The election:

(1) must be made on or before the due date or extended due date of the qualifying entity's
pass-through entity tax return;

(2) may only be made by qualifying owners who collectively hold more than a 50 percent
ownership interest in the qualifying entity;

(3) is binding on all qualifying owners who have an ownership interest in the qualifying
entity; and

(4) once made is irrevocable for the taxable year.

(c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a
qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.

(d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount
of the qualifying owner's income multiplied by the highest tax rate for individuals under
section 290.06, subdivision 2c. When making this determination:

(1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed;
and

(2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.

(e) The amount of each credit and deduction used to determine a qualifying owner's tax
liability under paragraph (d) must also be used to determine that qualifying owner's income
tax liability under chapter 290.

(f) This subdivision does not negate the requirement that a qualifying owner pay estimated
tax if the qualifying owner's tax liability would exceed the requirements set forth in section
289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's
tax liability as determined under paragraph (d) is, however, satisfied when the qualifying
entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated
tax.

(g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the
treatment of distributions, is determined as if the election to pay the pass-through entity tax
under paragraph (b) is not made.

(h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a
pass-through entity tax return must be treated as a composite return and a qualifying entity
filing a pass-through entity tax return must be treated as a partnership filing a composite
return.

(i) The provisions of subdivision 17 apply to the election to pay the pass-through entity
tax under this subdivision.

(j) If a nonresident qualifying owner of a qualifying entity making the election to file
and pay the tax under this subdivision has no other Minnesota source income, filing of the
pass-through entity tax return is a return for purposes of subdivision 1, provided that the
nonresident qualifying owner must not have any Minnesota source income other than the
income from the qualifying entity, other electing qualifying entities, and other partnerships
electing to file a composite return under subdivision 7. If it is determined that the nonresident
qualifying owner has other Minnesota source income, the inclusion of the income and tax
liability for that owner under this provision will not constitute a return to satisfy the
requirements of subdivision 1. The tax paid for the qualifying owner as part of the
pass-through entity tax return is allowed as a payment of the tax by the qualifying owner
on the date on which the pass-through entity tax return payment was made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2020.
new text end

Sec. 2.

Minnesota Statutes 2021 Supplement, section 289A.382, subdivision 2, is amended
to read:

Subd. 2.

Reporting and payment requirements for partnerships and tiered
partners.

(a) Except for when an audited partnership makes the election in subdivision 3,
and except for negative federal adjustments required under federal law taken into account
by the partnership in the partnership return for the adjustment or other year, all final federal
adjustments of an audited partnership must comply with paragraph (b) and each direct
partner of the audited partnership, other than a tiered partner, must comply with paragraph
(c).

(b) No later than 90 days after the final determination date, the audited partnership must:

(1) file a completed federal adjustments report, including all partner-level information
required under section 289A.12, subdivision 3, with the commissioner;

(2) notify each of its direct partners of their distributive share of the final federal
adjustments;

(3) file an amended composite report for all direct partners who were included in a
composite return under section 289A.08, subdivision 7, in the reviewed year, and pay the
additional amount that would have been due had the federal adjustments been reported
properly as required; deleted text begin and
deleted text end

(4) file amended withholding reports for all direct partners who were or should have
been subject to nonresident withholding under section 290.92, subdivision 4b, in the reviewed
year, and pay the additional amount that would have been due had the federal adjustments
been reported properly as required deleted text begin . deleted text end new text begin ; and
new text end

new text begin (5) file an amended pass-through entity tax report for all direct partners who were
included in a pass-through entity tax return under section 289A.08, subdivision 7a, in the
reviewed year, and pay the additional amount that would have been due had the federal
adjustments been reported properly as required.
new text end

(c) No later than 180 days after the final determination date, each direct partner, other
than a tiered partner, that is subject to a tax administered under this chapter, other than the
sales tax, must:

(1) file a federal adjustments report reporting their distributive share of the adjustments
reported to them under paragraph (b), clause (2); and

(2) pay any additional amount of tax due as if the final federal adjustment had been
properly reported, plus any penalty and interest due under this chapter, and less any credit
for related amounts paid or withheld and remitted on behalf of the direct partner under
paragraph (b), clauses (3) and (4).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2020.
new text end

ARTICLE 2

SALES AND USE TAXES AND SPECIAL TAXES

Section 1.

Minnesota Statutes 2020, section 296A.083, subdivision 3, is amended to read:

Subd. 3.

Surcharge rate.

(a) By deleted text begin July 16, 2008, and each April 1 thereafter deleted text end new text begin May 1 each
year new text end , the commissioner of revenue shall calculate and publish a surcharge as provided in
deleted text begin paragraphs deleted text end new text begin paragraph new text end (b) deleted text begin and (c) deleted text end . The surcharge is imposed deleted text begin from August 1, 2008, through
June 30, 2009, and each new surcharge thereafter is imposed the following deleted text end new text begin beginning new text end July
1 new text begin of the year it is published new text end through June 30 new text begin of the following year new text end .

deleted text begin (b) For fiscal years 2009 through 2012, the commissioner shall set the surcharge as
specified in the following surcharge rate schedule.
deleted text end

deleted text begin Surcharge Rate Schedule deleted text end
	deleted text begin Fiscal Year deleted text end	deleted text begin Rate (in cents per gallon) deleted text end
	deleted text begin 2009 deleted text end	deleted text begin 0.5 deleted text end
	deleted text begin 2010 deleted text end	deleted text begin 2.1 deleted text end
	deleted text begin 2011 deleted text end	deleted text begin 2.5 deleted text end
	deleted text begin 2012 deleted text end	deleted text begin 3.0 deleted text end

deleted text begin (c) For fiscal year 2013 and thereafter, deleted text end new text begin (b) new text end The commissioner shall set the surcharge at
the lesser of (1) 3.5 cents, or (2) an amount calculated so that the total proceeds from the
surcharge deposited in the trunk highway fund from fiscal year 2009 to the upcoming fiscal
year equals the total amount of debt service from fiscal years 2009 to 2039, and the surcharge
is rounded to the nearest 0.1 cent.

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 2020, section 297A.61, subdivision 29, is amended to read:

Subd. 29.

State.

Unless specifically provided otherwise, "state" means any state of the
United States, deleted text begin the Commonwealth of Puerto Rico, and deleted text end the District of Columbia new text begin , and any
territory of the United States, including American Samoa, Guam, Northern Mariana Islands,
Puerto Rico, and the U.S. Virgin Islands 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. 3.

Minnesota Statutes 2020, section 297F.05, subdivision 4, is amended to read:

Subd. 4.

Use tax; tobacco products.

new text begin (a) new text end Except as provided in subdivision 4a, a tax is
imposed upon the use or storage by consumers of tobacco products in this state, and upon
such consumers, at the rate of 95 percent of the cost to the consumer of the tobacco products
or the minimum tax under subdivision 3, paragraph (b) or (c), whichever is greater.

new text begin (b) For the purposes of this subdivision, "cost to the consumer" means the total amount
paid by the consumer for a tobacco product, including but not limited to delivery charges
and packaging costs. Cost to the consumer does not include any taxes imposed directly on
the consumer that are separately stated on the invoice, bill of sale, or similar document given
to the consumer.
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 2020, section 297F.05, subdivision 4a, is amended to read:

Subd. 4a.

Use tax; premium cigars.

new text begin (a) new text end A tax is imposed upon the use or storage by
consumers of all premium cigars in this state, and upon such consumers, at the lesser of:

(1) the rate of 95 percent of the cost to the consumer of the premium cigars; or

(2) $0.50 per premium cigar.

new text begin (b) For the purposes of this subdivision, "cost to the consumer" means the total amount
paid by the consumer for a premium cigar, including but not limited to delivery charges
and packaging costs. Cost to the consumer does not include any taxes imposed directly on
the consumer that are separately stated on the invoice, bill of sale, or similar document given
to the consumer.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 3

FIRE AND POLICE STATE AIDS

Section 1.

Minnesota Statutes 2020, section 6.495, subdivision 3, is amended to read:

Subd. 3.

deleted text begin Report deleted text end new text begin Reports new text end to commissioner of revenue.

new text begin (a) On or before September 15,
November 1, March 1, and June 1, new text end the state auditor deleted text begin shall deleted text end new text begin must new text end file with the commissioner
of revenue a financial compliance report certifying for each relief association:

(1) the completion of the annual financial report required under section 424A.014 and
the auditing or certification of those financial reports under subdivision 1; and

(2) the receipt of any actuarial valuations required under section 424A.093 or Laws
2013, chapter 111, article 5, sections 31 to 42.

new text begin (b) The commissioner of revenue shall prescribe the content, format, and manner of the
financial compliance reports required by paragraph (a), pursuant to section 270C.30.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2020, section 477B.01, is amended by adding a subdivision to
read:

new text begin Subd. 1a. new text end

new text begin Apportionment agreement. new text end

new text begin "Apportionment agreement" means an agreement
between two or more fire departments that provide contracted fire protection service to the
same municipality and establishes the percentage of the population and the percentage of
the estimated market value within the municipality serviced by each fire department.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2020, section 477B.01, subdivision 5, is amended to read:

Subd. 5.

Fire department.

new text begin (a) new text end "Fire department" deleted text begin includes deleted text end new text begin means:
new text end

new text begin (1) new text end a municipal fire department deleted text begin and deleted text end new text begin ;
new text end

new text begin (2) new text end an independent nonprofit firefighting corporation deleted text begin . deleted text end new text begin ;
new text end

new text begin (3) a fire department established as or operated by a joint powers entity; or
new text end

new text begin (4) a fire protection special taxing district established under chapter 144F or special law.
new text end

new text begin (b) This subdivision only applies to this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2020, section 477B.01, is amended by adding a subdivision to
read:

new text begin Subd. 7a. new text end

new text begin Joint powers entity. new text end

new text begin "Joint powers entity" means a joint powers entity created
under section 471.59.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2020, section 477B.01, subdivision 10, is amended to read:

Subd. 10.

Municipality.

(a) "Municipality" means:

(1) a home rule charter or statutory city;

(2) an organized town;

(3) deleted text begin a park district subject to chapter 398 deleted text end new text begin a joint powers entity new text end ;

(4) deleted text begin the University of Minnesota deleted text end new text begin a fire protection special taxing district new text end ; deleted text begin and deleted text end new text begin or
new text end

(5) an American Indian tribal government entity located within a federally recognized
American Indian reservation.

(b) This subdivision only applies to new text begin this new text end chapter deleted text begin 477B deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2020, section 477B.01, subdivision 11, is amended to read:

Subd. 11.

Secretary.

new text begin (a) new text end "Secretary" means new text begin :
new text end

new text begin (1) new text end the secretary of an independent nonprofit firefighting corporation that has a subsidiary
incorporated firefighters' relief association or whose firefighters participate in the statewide
volunteer firefighter plan deleted text begin . deleted text end new text begin ; or
new text end

new text begin (2) the secretary of a joint powers entity or fire protection special taxing district or, if
there is no such person, the person primarily responsible for managing the finances of a
joint powers entity or fire protection special taxing district.
new text end

new text begin (b) This subdivision only applies to this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2020, section 477B.02, subdivision 2, is amended to read:

Subd. 2.

Establishment of fire department.

(a) An independent nonprofit firefighting
corporation must be created under the nonprofit corporation act of this state operating for
the exclusive purpose of firefighting, or the governing body of a municipality must officially
establish a fire department.

(b) The fire department must have provided firefighting services for at least one calendar
year new text begin , and must have a current fire department identification number issued by the state fire
marshal new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2020, section 477B.02, subdivision 3, is amended to read:

Subd. 3.

deleted text begin Personnel and deleted text end Benefits requirements.

deleted text begin (a) A fire department must have a
minimum of ten paid or volunteer firefighters, including a fire chief and assistant fire chief.
deleted text end

deleted text begin (b) The fire department must have regular scheduled meetings and frequent drills that
include instructions in firefighting tactics and in the use, care, and operation of all fire
apparatus and equipment.
deleted text end

deleted text begin (c) deleted text end new text begin (a) new text end The fire department must have a separate subsidiary incorporated firefighters'
relief association that provides retirement benefits or must participate in the statewide
volunteer firefighter plan; or if the municipality solely employs full-time firefighters as
defined in section 299N.03, subdivision 5, retirement coverage must be provided by the
public employees police and fire retirement plan. new text begin For purposes of retirement benefits, a fire
department may be associated with only one volunteer firefighters' relief association or one
account in the voluntary statewide volunteer firefighter retirement plan at one time.
new text end

deleted text begin (d) deleted text end new text begin (b) new text end Notwithstanding paragraph deleted text begin (c) deleted text end new text begin (a) new text end , a municipality without a relief association as
described under section 424A.08, paragraph (a), may still qualify to receive fire state aid if
all other requirements of this section are met.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2020, section 477B.02, is amended by adding a subdivision to
read:

new text begin Subd. 4a. new text end

new text begin Public safety answering point requirement. new text end

new text begin The fire department must be
dispatched by a public safety answering point as defined in section 403.02, subdivision 19.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 10.

Minnesota Statutes 2020, section 477B.02, subdivision 5, is amended to read:

Subd. 5.

Fire service contract or agreement; apportionment agreement filing
deleted text begin requirement deleted text end new text begin requirements new text end .

(a) Every municipality or independent nonprofit firefighting
corporation must file deleted text begin a copy of any duly executed and valid fire service contract or agreement deleted text end
with the commissioner new text begin (1) a copy of any duly executed and valid fire service contracts, (2)
written notification of any fire service contract terminations, and (3) written notification of
any dissolution of a fire department, within 60 days of contract execution or termination,
or department dissolution new text end .

(b) If more than one fire department provides service to a municipality, the fire
departments furnishing service must deleted text begin enter into an agreement apportioning among themselves
the percentage of the population and the percentage of the estimated market value of each
shared service fire department service area. The agreement must be in writing and must be
filed deleted text end new text begin file an apportionment agreement new text end with the commissioner.

new text begin (c) When a municipality is a joint powers entity, it must file its joint powers agreement
with the commissioner. If the joint powers agreement does not include sufficient information
defining the fire department service area of the joint powers entity for the purposes of
calculating fire state aid, the secretary must file a written statement with the commissioner
defining the fire department service area.
new text end

new text begin (d) When a municipality is a fire protection special taxing district, it must file its
resolution establishing the fire protection special taxing district, and any agreements required
for the establishment of the fire protection special taxing district, with the commissioner.
If the resolution or agreement does not include sufficient information defining the fire
department service area of the fire protection special taxing district, the secretary must file
a written statement with the commissioner defining the fire department service area.
new text end

new text begin (e) The commissioner shall prescribe the content, format, and manner of the notifications,
apportionment agreements, and written statements under paragraphs (a) to (d), pursuant to
section 270C.30, except that copies of fire service contracts, joint powers agreements, and
resolutions establishing fire protection special taxing districts shall be filed in their existing
form.
new text end

new text begin (f) A document filed with the commissioner under this subdivision must be refiled any
time it is updated within 60 days of the update. An apportionment agreement must be refiled
only when a change in the averaged sum of the percentage of population and percentage of
estimated market value serviced by a fire department subject to the apportionment agreement
is at least one percent. The percentage amount must be rounded to the nearest whole
percentage.
new text end

new text begin (g) Upon the request of the commissioner, the county auditor must provide information
that the commissioner requires to accurately apportion the estimated market value of a fire
department service area for a fire department providing service to an unorganized territory
located in the county.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2020, section 477B.02, subdivision 8, is amended to read:

Subd. 8.

PERA certification to commissioner.

On or before February 1 each year, deleted text begin if
retirement coverage for a fire department is provided by the statewide volunteer firefighter
plan, deleted text end the executive director of the Public Employees Retirement Association must certify
deleted text begin the existence of retirement coverage. deleted text end new text begin to the commissioner the fire departments that transferred
retirement coverage to, or terminated participation in, the voluntary statewide volunteer
firefighter retirement plan since the previous certification under this paragraph. This
certification must include the number of active volunteer firefighters under section 477B.03,
subdivision 5, paragraph (e).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2020, section 477B.02, subdivision 9, is amended to read:

Subd. 9.

Fire department certification to commissioner.

On or before March 15 of
each year, the municipal clerk or the secretary deleted text begin , and the fire chief, deleted text end must deleted text begin jointly deleted text end certify to the
commissioner deleted text begin that the fire department exists and meets the qualification requirements of
this section deleted text end new text begin the fire department service area as of December 31 of the previous year, and
that the fire department meets the qualification requirements of this section new text end . new text begin The municipal
clerk or the secretary must provide the commissioner with documentation that the
commissioner deems necessary for determining eligibility for fire state aid or for calculating
and apportioning fire state aid under section 477B.03. new text end The new text begin commissioner shall prescribe
the content, format, and manner of the new text end certification deleted text begin must be on a form prescribed by the
commissioner and must include all other information that the commissioner requires deleted text end new text begin pursuant
to section 270C.30 new text end . new text begin The municipal clerk or the secretary must send a copy of the certification
filed under this subdivision to the fire chief within five business days of the date the
certification was filed with the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 13.

Minnesota Statutes 2020, section 477B.03, subdivision 2, is amended to read:

Subd. 2.

Apportionment of fire state aid.

(a) The amount of fire state aid available for
apportionment, before the addition of the minimum fire state aid allocation amount under
subdivision 5, is equal to 107 percent of the amount of premium taxes paid to the state upon
the fire, lightning, sprinkler leakage, and extended coverage premiums reported to the
commissioner by companies or insurance companies on the Minnesota Fire Premium Report new text begin ,
except that credits claimed under section 297I.20, subdivisions 3, 4, and 5, do not affect the
calculation of the amount of fire state aid available for apportionment new text end . This amount must
be reduced by the amount required to pay the state auditor's costs and expenses of the audits
or exams of the firefighters' relief associations.

(b) The total amount available for apportionment must not be less than two percent of
the premiums less return premiums reported to the commissioner by companies or insurance
companies on the Minnesota Fire Premium Report after subtracting the following amounts:

(1) the amount required to pay the state auditor's costs and expenses of the audits or
exams of the firefighters' relief associations; and

(2) one percent of the premiums reported by township mutual insurance companies and
mutual property and casualty companies with total assets of $5,000,000 or less.

(c) The commissioner must apportion the fire state aid to each municipality or independent
nonprofit firefighting corporation qualified under section 477B.02 relative to the premiums
reported on the Minnesota Fire Premium Reports filed under this chapter.

(d) The commissioner must calculate the percentage of increase or decrease reflected in
the apportionment over or under the previous year's available state aid using the same
premiums as a basis for comparison.

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 2020, section 477B.03, subdivision 3, is amended to read:

Subd. 3.

Population and estimated market value.

(a) deleted text begin Official statewide federal census
figures deleted text end new text begin The most recent population estimates made by the state demographer pursuant to
section 4A.02, paragraph (d), new text end must be used in calculations requiring the use of population
figures under this chapter. deleted text begin Increases or decreases in population disclosed by reason of any
special census must not be taken into consideration.
deleted text end

(b) The deleted text begin latest available deleted text end estimated market value property figures new text begin for the assessment year
immediately preceding the year the aid is distributed new text end must be used in calculations requiring
the use of estimated market value property figures under this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 15.

Minnesota Statutes 2020, section 477B.03, subdivision 4, is amended to read:

Subd. 4.

Initial fire state aid allocation amount.

(a) The initial fire state aid allocation
amount is the amount available for apportionment as fire state aid under subdivision 2,
without the inclusion of any additional funding amount to support a minimum fire state aid
amount under section 423A.02, subdivision 3. The initial fire state aid allocation amount
is allocated one-half in proportion to the population for each fire department service area
and one-half in proportion to the estimated market value of each fire department service
area, including (1) the estimated market value of tax-exempt property, and (2) the estimated
market value of natural resources lands receiving in lieu payments under sections 477A.11
to 477A.14 and 477A.17. The estimated market value of minerals is excluded.

(b) In the case of a municipality or independent nonprofit firefighting corporation
furnishing fire protection to other municipalities as evidenced by valid fire service contracts new text begin ,
joint powers agreements, resolutions, and other supporting documents new text end filed with the
commissioner under section 477B.02, subdivision 5, the distribution must be adjusted
proportionately to take into consideration the crossover fire protection service. Necessary
adjustments must be made to subsequent apportionments.

(c) In the case of municipalities or independent nonprofit firefighting corporations
qualifying for aid, the commissioner must calculate the state aid for the municipality or
independent nonprofit firefighting corporation on the basis of the population and the estimated
market value of the area furnished fire protection service by the fire department as evidenced
by new text begin valid new text end fire service deleted text begin agreements deleted text end new text begin contracts, joint powers agreements, resolutions, and other
supporting documents new text end filed with the commissioner under section 477B.02, subdivision 5.

(d) In the case of more than one fire department furnishing contracted fire service to a
municipality, the population and estimated market value in the apportionment agreement
filed with the commissioner under section 477B.02, subdivision 5, must be used in calculating
the state aid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 16.

Minnesota Statutes 2020, section 477B.03, subdivision 5, is amended to read:

Subd. 5.

Minimum fire state aid allocation amount.

(a) The minimum fire state aid
allocation amount is the amount derived from any additional funding amount to support a
minimum fire state aid amount under section 423A.02, subdivision 3. The minimum fire
state aid allocation amount is allocated to municipalities or independent nonprofit firefighting
corporations with volunteer firefighters' relief associations or covered by the statewide
volunteer firefighter plan. The amount is based on the number of active volunteer firefighters
who are (1) members of the relief association as reported to the Office of the State Auditor
in a specific annual financial reporting year as specified in paragraphs (b) to (d), or (2)
covered by the statewide volunteer firefighter plan as specified in paragraph (e).

(b) For relief associations established in calendar year 1993 or a prior year, the number
of active volunteer firefighters equals the number of active volunteer firefighters who were
members of the relief association as reported in the annual financial reporting for calendar
year 1993, but not to exceed 30 active volunteer firefighters.

(c) For relief associations established in calendar year 1994 through calendar year 1999,
the number of active volunteer firefighters equals the number of active volunteer firefighters
who were members of the relief association as reported in the annual financial reporting for
calendar year 1998 to the Office of the State Auditor, but not to exceed 30 active volunteer
firefighters.

(d) For relief associations established after calendar year 1999, the number of active
volunteer firefighters equals the number of active volunteer firefighters who are members
of the relief association as reported in the first annual financial reporting submitted to the
Office of the State Auditor, but not to exceed 20 active volunteer firefighters.

(e) deleted text begin If a relief association is terminated as a result of deleted text end new text begin For a municipality or independent
nonprofit firefighting corporation that is new text end providing retirement coverage for volunteer
firefighters by the statewide volunteer firefighter plan under chapter 353G, the number of
active volunteer firefighters equals the number of active volunteer firefighters of the
municipality or independent nonprofit firefighting corporation covered by the statewide
plan as certified by the executive director of the Public Employees Retirement Association
to the commissioner and the state auditor new text begin by February 1 immediately following the date the
municipality or independent nonprofit firefighting corporation begins coverage in the plan new text end ,
but not to exceed 30 active firefighters.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 17.

Minnesota Statutes 2020, section 477B.03, subdivision 7, is amended to read:

Subd. 7.

Appeal.

A municipality, an independent nonprofit firefighting corporation, a
fire relief association, or the statewide volunteer firefighter plan may object to the amount
of fire state aid apportioned to it by filing a written request with the commissioner to review
and adjust the apportionment of funds within the state. new text begin The objection of a municipality, an
independent nonprofit firefighting corporation, a fire relief association, or the voluntary
statewide volunteer firefighter retirement plan must be filed with the commissioner within
60 days of the date the amount of apportioned fire state aid is paid. new text end The decision of the
commissioner is subject to appeal, review, and adjustment by the district court in the county
in which the applicable municipality or independent nonprofit firefighting corporation is
located or by the Ramsey County District Court with respect to the statewide volunteer
firefighter plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 18.

Minnesota Statutes 2020, section 477B.04, subdivision 1, is amended to read:

Subdivision 1.

Payments.

(a) The commissioner must make payments to the Public
Employees Retirement Association for deposit in the statewide volunteer firefighter fund
on behalf of a municipality or independent nonprofit firefighting corporation that is a member
of the statewide volunteer firefighter plan under chapter 353G deleted text begin , or directly to a municipality
or county designated by an independent nonprofit firefighting corporation deleted text end . new text begin The commissioner
must directly pay all other municipalities qualifying for fire state aid, except as provided in
paragraph (d). new text end The payment is equal to the amount of fire state aid apportioned to the
applicable fire state aid recipient under section 477B.03.

(b) Fire state aid is payable on October 1 annually. The amount of state aid due and not
paid by October 1 accrues interest payable to the recipient at the rate of one percent for each
month or part of a month that the amount remains unpaid after October 1.

(c) new text begin If the commissioner of revenue does not receive a financial compliance report
described in section 6.495, subdivision 3, for a relief association, the amount of fire state
aid apportioned to a municipality or independent nonprofit firefighting corporation under
section 477B.03 for that relief association must be withheld from payment to the Public
Employees Retirement Association or the municipality. The commissioner of revenue must
issue a withheld payment within ten business days of receipt of a financial compliance report
under section 6.495, subdivision 3. new text end The interest under paragraph (b) does not apply deleted text begin when deleted text end new text begin
to a new text end payment deleted text begin has not been made by October 1 due to noncompliance with sections 424A.014
and 477B.02, subdivision 7 deleted text end new text begin withheld under this paragraph new text end .

new text begin (d) The commissioner must make payments directly to the largest municipality in
population located within any area included in a joint powers entity that does not have a
designated agency under section 471.59, subdivision 3, or within the fire department service
area of an eligible independent nonprofit firefighting corporation. If there is no city or town
within the fire department service area of an eligible independent nonprofit firefighting
corporation, fire state aid must be paid to the county where the independent nonprofit
firefighting corporation is located.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 19.

Minnesota Statutes 2020, section 477B.04, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Aid amount corrections. new text end

new text begin (a) An adjustment needed to correct a fire state aid
overpayment or underpayment due to a clerical error must be made to subsequent fire state
aid payments as provided in paragraphs (b) and (c). The authority to correct an aid payment
under this subdivision is limited to three years after the payment was issued.
new text end

new text begin (b) If an overpayment equals more than ten percent of the most recently paid aid amount,
the commissioner must reduce the aid a municipality or independent nonprofit firefighting
corporation is to receive by the amount overpaid over a period of no more than three years.
If an overpayment equals or is less than ten percent of the most recently paid aid amount,
the commissioner must reduce the next aid payment occurring in 30 days or more by the
amount overpaid.
new text end

new text begin (c) In the event of an underpayment, the commissioner must distribute the amount of
underpaid funds to the municipality or independent nonprofit firefighting corporation over
a period of no more than three years. An additional distribution to a municipality or
independent nonprofit firefighting corporation must be paid from the general fund and must
not diminish the payments made to other municipalities or independent nonprofit firefighting
corporations under this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 20.

Minnesota Statutes 2020, section 477C.03, subdivision 2, is amended to read:

Subd. 2.

Apportionment of police state aid.

(a) The total amount available for
apportionment as police state aid is equal to 104 percent of the amount of premium taxes
paid to the state on the premiums reported to the commissioner by companies or insurance
companies on the Minnesota Aid to Police Premium Report new text begin , except that credits claimed
under section 297I.20, subdivisions 3, 4, and 5, do not affect the calculation of the total
amount of police state aid available for apportionment new text end . The total amount for apportionment
for the police state aid program must not be less than two percent of the amount of premiums
reported to the commissioner by companies or insurance companies on the Minnesota Aid
to Police Premium Report.

(b) The commissioner must calculate the percentage of increase or decrease reflected in
the apportionment over or under the previous year's available state aid using the same
premiums as a basis for comparison.

(c) In addition to the amount for apportionment of police state aid under paragraph (a),
each year $100,000 must be apportioned for police state aid. An amount sufficient to pay
this increase is annually appropriated from the general fund.

(d) The commissioner must apportion police state aid to all municipalities in proportion
to the relationship that the total number of peace officers employed by that municipality for
the prior calendar year and the proportional or fractional number who were employed less
than a calendar year as credited under section 477C.02, subdivision 1, paragraph (c), bears
to the total number of peace officers employed by all municipalities subject to any reduction
under subdivision 3.

deleted text begin (e) Any necessary additional adjustments must be made to subsequent police state aid
apportionments.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) The amendment to paragraph (a) is effective the day following
final enactment.
new text end

new text begin (b) The amendment striking paragraph (e) is effective for aids payable in calendar year
2023 and thereafter.
new text end

Sec. 21.

Minnesota Statutes 2020, section 477C.03, subdivision 5, is amended to read:

Subd. 5.

Appeal.

A municipality may object to the amount of police state aid apportioned
to it by filing a written request with the commissioner to review and adjust the apportionment
of funds to the municipality. new text begin The objection of a municipality must be filed with the
commissioner within 60 days of the date the amount of apportioned police state aid is paid. new text end
The decision of the commissioner is subject to appeal, review, and adjustment by the district
court in the county in which the applicable municipality is located or by the Ramsey County
District Court with respect to the Departments of Natural Resources or Public Safety.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 22.

Minnesota Statutes 2020, section 477C.04, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Aid amount corrections. new text end

new text begin (a) An adjustment needed to correct a police state
aid overpayment or underpayment due to a clerical error must be made to subsequent police
state aid payments as provided in paragraphs (b) and (c). The authority to correct an aid
payment under this subdivision is limited to three years after the payment was issued.
new text end

new text begin (b) If an overpayment equals more than ten percent of the most recently paid aid amount,
the commissioner must reduce the aid a municipality is to receive by the amount overpaid
over a period of no more than three years. If an overpayment equals or is less than ten
percent of the most recently paid aid amount, the commissioner must reduce the next aid
payment occurring in 30 days or more by the amount overpaid.
new text end

new text begin (c) In the event of an underpayment, the commissioner must distribute the amount of
underpaid funds to the municipality over a period of no more than three years. An additional
distribution to a municipality must be paid from the general fund and must not diminish the
payments made to other municipalities under this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2023
and thereafter.
new text end

Sec. 23. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2020, sections 477B.02, subdivision 4; and 477B.03, subdivision 6, 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 aids payable in calendar year 2023
and thereafter.
new text end

ARTICLE 4

MISCELLANEOUS TAX PROVISIONS

Section 1.

Minnesota Statutes 2020, section 290A.03, subdivision 13, is amended to read:

Subd. 13.

Property taxes payable.

"Property taxes payable" means the property tax
exclusive of special assessments, penalties, and interest payable on a claimant's homestead
after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2,
and any other state paid property tax credits in any calendar year, and after any refund
claimed and allowable under section 290A.04, subdivision 2h, that is first payable in the
year that the property tax is payable. In the case of a claimant who makes ground lease
payments, "property taxes payable" includes the amount of the payments directly attributable
to the property taxes assessed against the parcel on which the house is located. Regardless
of the limitations in section 280A(c)(5) of the Internal Revenue Code, "property taxes
payable" must be apportioned or reduced for the use of a portion of the claimant's homestead
for a business purpose if the claimant deducts any business depreciation expenses for the
use of a portion of the homestead or deducts expenses under section 280A of the Internal
Revenue Code for a business operated in the claimant's homestead. For homesteads which
are manufactured homes as defined in section 273.125, subdivision 8, including manufactured
homes located in a manufactured home community owned by a cooperative organized under
chapter 308A or 308B, and park trailers taxed as manufactured homes under section 168.012,
subdivision 9, "property taxes payable" shall also include 17 percent of the gross rent paid
in the preceding year for the site on which the homestead is located. When a homestead is
owned by two or more persons as joint tenants or tenants in common, such tenants shall
determine between them which tenant may claim the property taxes payable on the
homestead. If they are unable to agree, the matter shall be referred to the commissioner of
revenue whose decision shall be final. Property taxes are considered payable in the year
prescribed by law for payment of the taxes.

In the case of a claim relating to "property taxes payable," the claimant must have owned
and occupied the homestead on January 2 of the year in which the tax is payable and (i) the
property must have been classified as homestead property pursuant to section 273.124, on
or before December deleted text begin 15 deleted text end new text begin 31 new text end of the assessment year to which the "property taxes payable"
relate; or (ii) the claimant must provide documentation from the local assessor that application
for homestead classification has been made on or before December deleted text begin 15 deleted text end new text begin 31 new text end of the year in
which the "property taxes payable" were payable and that the assessor has approved the
application.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refund claims based on property taxes
payable in 2022 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2020, section 290A.19, is amended to read:

290A.19 OWNER OR MANAGING AGENT TO FURNISH RENT CERTIFICATE.

(a) The owner or managing agent of any property for which rent is paid for occupancy
as a homestead must furnish a certificate of rent paid to a person who is a renter on December
31, in the form prescribed by the commissioner. If the renter moves before December 31,
the owner or managing agent may give the certificate to the renter at the time of moving,
or mail the certificate to the forwarding address if an address has been provided by the
renter. The certificate must be made available to the renter before February 1 of the year
following the year in which the rent was paid. The owner or managing agent must retain a
duplicate of each certificate or an equivalent record showing the same information for a
period of three years. The duplicate or other record must be made available to the
commissioner upon request.

(b) The commissioner may require the owner or managing agent, through a simple
process, to furnish to the commissioner on or before March 1 a copy of each certificate of
rent paid furnished to a renter for rent paid in the prior year. The commissioner shall prescribe
the content, format, and manner of the form pursuant to section 270C.30. new text begin The commissioner
may require the Social Security number, individual taxpayer identification number, federal
employer identification number, or Minnesota taxpayer identification number of the owner
or managing agent who is required to furnish a certificate of rent paid under this paragraph.
new text end Prior to implementation, the commissioner, after consulting with representatives of owners
or managing agents, shall develop an implementation and administration plan for the
requirements of this paragraph that attempts to minimize financial burdens, administration
and compliance costs, and takes into consideration existing systems of owners and managing
agents.

(c) For the purposes of this section, "owner" includes a park owner as defined under
section 327C.01, subdivision 6, and "property" includes a lot as defined under section
327C.01, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refund claims based on rent paid in
2022 and thereafter.
new text end

APPENDIX

Repealed Minnesota Statutes: 22-04601

477B.02 QUALIFYING FOR FIRE STATE AID.

Subd. 4.

Equipment requirements.

The fire department must have all of the following equipment, or the equivalent as determined by the state fire marshal, by December 31 of the year preceding the certification required in subdivision 8:

(1) a motorized fire truck equipped with:

(i) a motorized pump;

(ii) a 250-gallon or larger water tank;

(iii) 300 feet of one inch or larger fire hose in two lines with combination spray and straight stream nozzles;

(iv) five-gallon hand pumps - tank extinguisher or equivalent;

(v) a dry chemical extinguisher or equivalent;

(vi) ladders;

(vii) extension ladders;

(viii) pike poles;

(ix) crowbars;

(x) axes;

(xi) lanterns; and

(xii) fire coats, helmets, and boots;

(2) the items in clause (1) suitably housed in a building of good construction with facilities for care of hoses and equipment;

(3) a reliable and adequate method of receiving fire alarms by telephone or with electric siren and suitable means of sounding an alarm; and

(4) if response is to be provided outside the corporate limits of the municipality where the fire department is located, another piece of motorized apparatus to make the response.

477B.03 CALCULATION OF FIRE STATE AID; APPEAL.

Subd. 6.

Corrective aid adjustments.

Any adjustments needed to correct prior misallocations must be made to subsequent fire state aid apportionments.