SF 3711

as introduced - 90th Legislature (2017 - 2018) Posted on 08/24/2018 08:45am

A bill for an act
relating to taxation; making technical and clarifying changes to individual income
and corporate franchise taxes, sales and use taxes, tobacco taxes, property taxes,
and other miscellaneous tax provisions; amending Minnesota Statutes 2016, sections
270C.85, subdivision 2; 270C.89, subdivision 2; 270C.91; 272.02, subdivisions
27, 81; 273.032; 273.061, subdivision 9; 273.113, subdivision 3; 273.119,
subdivision 2; 273.1231, subdivision 3; 273.13, subdivision 35; 273.136,
subdivision 2; 273.1384, subdivision 3; 273.18; 274.14; 274.16; 289A.08,
subdivision 6; 289A.25, subdivision 1; 289A.31, subdivision 2; 289A.37,
subdivision 6; 289A.38, subdivision 7; 290.06, subdivisions 2c, 2d; 290.0802,
subdivisions 2, 3; 290.92, subdivision 28; 290A.03, subdivision 4; 290A.05;
290A.08; 290A.09; 290B.09, subdivision 1; 297A.61, subdivision 18; 297A.67,
subdivision 12; 297A.68, subdivisions 17, 42, 44; 297A.70, subdivisions 3, 16;
297A.71, subdivisions 22, 45; 297A.77, by adding a subdivision; 297B.01,
subdivision 14; 297F.01, subdivisions 19, 23, by adding a subdivision; 469.177,
subdivision 1; Minnesota Statutes 2017 Supplement, sections 270C.89, subdivision
1; 273.0755; 273.13, subdivisions 22, 34; 273.1384, subdivision 2; 273.1387,
subdivision 3; 275.025, subdivision 1; 290.0132, subdivision 26; 290.0137; 290.091,
subdivision 2; 290A.03, subdivisions 3, 8; 297A.67, subdivision 6; 297A.70,
subdivision 4; 297A.75, subdivision 1; 297B.01, subdivision 16; 462D.03,
subdivision 2; Laws 2017, First Special Session chapter 1, article 8, section 3;
repealing Minnesota Statutes 2016, section 275.29.

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

ARTICLE 1

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2016, section 289A.38, subdivision 7, is amended to read:

Subd. 7.

Federal tax changes.

new text begin (a) new text end If the amount of income, items of tax preference,
deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for any
period, as reported to the Internal Revenue Service is changed or corrected by the
commissioner of Internal Revenue or other officer of the United States or other competent
authority, or where a renegotiation of a contract or subcontract with the United States results
in a change in income, items of tax preference, deductions, credits, or withholding tax, or,
in the case of estate tax, where there are adjustments to the taxable estate, the taxpayer shall
report the change or correction or renegotiation results in writing to the commissioner. The
report must be submitted within 180 days after the final determination and must be in the
form of either an amended Minnesota estate, withholding tax, corporate franchise tax, or
income tax return conceding the accuracy of the federal determination or a letter detailing
how the federal determination is incorrect or does not change the Minnesota tax. An amended
Minnesota income tax return must be accompanied by an amended property tax refund
return, if necessary. A taxpayer filing an amended federal tax return must also file a copy
of the amended return with the commissioner of revenue within 180 days after filing the
amended return.

new text begin (b) For the purposes of paragraph (a), a change or correction includes any case where a
taxpayer reaches a closing agreement or compromise with the Internal Revenue Service
under section 7121 or 7122 of the Internal Revenue Code.
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 2017 Supplement, section 290.0132, subdivision 26, is amended
to read:

Subd. 26.

Social Security benefits.

(a) A portion of Social Security benefits is allowed
as a subtraction. The subtraction equals the lesser of Social Security benefits or a maximum
subtraction subject to the limits under paragraphs (b), (c), and (d).

(b) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction equals $4,500. The maximum subtraction is reduced by 20 percent of provisional
income over $77,000. In no case is the subtraction less than zero.

(c) For single or head-of-household taxpayers, the maximum subtraction equals $3,500.
The maximum subtraction is reduced by 20 percent of provisional income over $60,200.
In no case is the subtraction less than zero.

(d) For married taxpayers filing separate returns, the maximum subtraction equals deleted text begin $2,250 deleted text end new text begin
one-half the maximum subtraction for joint returns under paragraph (b) new text end . The maximum
subtraction is reduced by 20 percent of provisional income over deleted text begin $38,500 deleted text end new text begin one-half the
threshold amount for joint returns under paragraph (b) new text end . In no case is the subtraction less
than zero.

(e) For purposes of this subdivision, "provisional income" means modified adjusted
gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
the Social Security benefits received during the taxable year, and "Social Security benefits"
has the meaning given in section 86(d)(1) of the Internal Revenue Code.

(f) The commissioner shall adjust the maximum subtraction and threshold amounts in
paragraphs (b) to (d) by the percentage determined pursuant to the provisions of section
1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) of the Internal Revenue
Code the word "2016" shall be substituted for the word "1992." For 2018, the commissioner
shall then determine the percentage change from the 12 months ending on August 31, 2016,
to the 12 months ending on August 31, 2017, and in each subsequent year, from the 12
months ending on August 31, 2016, to the 12 months ending on August 31 of the year
preceding the taxable year. The determination of the commissioner pursuant to this
subdivision must not be considered a rule and is not subject to the Administrative Procedure
Act contained in chapter 14, including section 14.386. The maximum subtraction and
threshold amounts as adjusted must be rounded to the nearest $10 amount. If the amount
ends in $5, the amount is rounded up to the nearest $10 amount.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2017.
new text end

Sec. 3.

Minnesota Statutes 2017 Supplement, section 290.0137, is amended to read:

290.0137 ACCELERATED RECOGNITION OF CERTAIN INSTALLMENT
SALE GAINS.

(a) In the case of a nonresident individual or a person who becomes a nonresident
individual during the tax year, taxable net income shall include the deleted text begin allocable deleted text end amount realized
upon a sale of the assets of, or any interest in, an S corporation or partnership that operated
in Minnesota during the year of sale, including any income or gain to be recognized in future
years pursuant to an installment sale method of reporting under the Internal Revenue Code.

(1) For the purposes of this paragraph, an individual who becomes a nonresident of
Minnesota in any year after an installment sale is required to recognize the full amount of
any income or gain described in this paragraph on the individual's final Minnesota resident
tax return to the extent that such income has not been recognized in a prior year.

(2) For the purposes of this section, "realized" has the meaning given in section 1001(b)
of the Internal Revenue Code.

(3) For the purposes of this section, "installment sale" means any installment sale under
section 453 of the Internal Revenue Code and any other sale that is reported utilizing a
method of accounting authorized under subchapter E of the Internal Revenue Code that
allows taxpayers to delay reporting or recognizing a realized gain until a future year.

deleted text begin (4) For the purposes of this section, "allocable amount" means the full amount to be
apportioned to Minnesota under section 290.191 or 290.20, or the full amount to be assigned
to Minnesota under section 290.17.
deleted text end

(b) Notwithstanding paragraph (a), nonresident taxpayers may elect to defer recognizing
unrecognized installment sale gains by making an election under this paragraph. The election
must be filed on a form to be determined or prescribed by the commissioner and must be
filed by the due date of the individual income tax return, including any extension. Electing
taxpayers must make an irrevocable agreement to:

(1) file Minnesota tax returns in all subsequent years when gains from the installment
sales are recognized and reported to the Internal Revenue Service;

(2) allocate gains to the state of Minnesota as though the gains were realized in the year
of sale under section 290.17, 290.191, or 290.20; and

(3) include all relevant federal tax documents reporting the installment sale with
subsequent Minnesota tax returns.

(c) Income or gain recognized for Minnesota purposes pursuant to paragraph (a) must
be excluded from taxable net income in any future year that the taxpayer files a Minnesota
tax return to the extent that the income or gain has already been subject to tax pursuant to
paragraph (a).

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 2016, section 290.06, subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

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

(1) On the first $35,480, 5.35 percent;

(2) On all over $35,480, but not over $140,960, 7.05 percent;

(3) On all over $140,960, but not over $250,000, 7.85 percent;

(4) On all over $250,000, 9.85 percent.

Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts new text begin after the adjustment required in subdivision 2d new text end .

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

(1) On the first $24,270, 5.35 percent;

(2) On all over $24,270, but not over $79,730, 7.05 percent;

(3) On all over $79,730, but not over $150,000, 7.85 percent;

(4) On all over $150,000, 9.85 percent.

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

(1) On the first $29,880, 5.35 percent;

(2) On all over $29,880, but not over $120,070, 7.05 percent;

(3) On all over $120,070, but not over $200,000, 7.85 percent;

(4) On all over $200,000, 9.85 percent.

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

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

(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by new text begin :
new text end

new text begin (i) new text end the additions required under deleted text begin section deleted text end new text begin sections new text end 290.0131, subdivisions 2 and 6 to 11, new text begin
and 290.0137, paragraph (a); new text end and reduced by

new text begin (ii) new text end the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, deleted text begin and deleted text end the subtractions under deleted text begin section deleted text end new text begin sections new text end
290.0132, subdivisions 9, 10, 14, 15, 17, and 18 new text begin , and 290.0137, paragraph (c) new text end , after applying
the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by new text begin :
new text end

new text begin (i) new text end the deleted text begin amounts specified in section deleted text end new text begin additions required under sections new text end 290.0131,
subdivisions 2 and 6 to 11, new text begin and 290.0137, paragraph (a); new text end and reduced by

new text begin (ii) new text end the deleted text begin amounts specified in section deleted text end new text begin subtractions under sections new text end 290.0132, subdivisions
2, 9, 10, 14, 15, 17, and 18 new text begin , and 290.0137, paragraph (c) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to paragraph (a) is effective for taxable years
beginning after December 31, 2017. The amendment to paragraph (e) is effective the day
following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2016, section 290.06, subdivision 2d, is amended to read:

Subd. 2d.

Inflation adjustment of brackets.

(a) For taxable years beginning after
December 31, 2013, the minimum and maximum dollar amounts for each rate bracket for
which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage
determined under paragraph (b). For the purpose of making the adjustment as provided in
this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets
as they existed for taxable years beginning after December 31, 2012, and before January 1,
2014. The rate applicable to any rate bracket must not be changed. The dollar amounts
setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
$5, it must be rounded up to the nearest $10 amount.

(b) The commissioner shall adjust the rate brackets and by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B) the word "2012" shall be substituted for the word "1992." For 2014, the
commissioner shall then determine the percent change from the 12 months ending on August
31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent year, from
the 12 months ending on August 31, 2012, to the 12 months ending on August 31 of the
year preceding the taxable year. new text begin The commissioner shall determine the rate bracket for
married filing separate returns after this adjustment is done. The rate bracket for married
filing separate must be one-half of the rate bracket for married filing joint. new text end The determination
of the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
not be subject to the Administrative Procedure Act contained in chapter 14.

No later than December 15 of each year, the commissioner shall announce the specific
percentage that will be used to adjust the tax rate brackets.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 290.92, subdivision 28, is amended to read:

Subd. 28.

Payments to horse racing license holders.

Effective with payments made
after April 1, 1988, any holder of a license issued by the Minnesota Racing Commission
who makes a payment for personal or professional services to a holder of a class C license
issued by the commission, except an amount paid as a purse, shall deduct from the payment
and withhold 6.25 percent of the amount as Minnesota withholding tax when the amount
paid to that individual by the same person during the calendar year exceeds $600. For
purposes of the provisions of this section, a payment to any person which is subject to
withholding under this subdivision must be treated as if the payment was a wage paid by
an employer to an employee. Every individual who is to receive a payment which is subject
to withholding under this subdivision shall furnish the license holder with a statement, made
under the penalties of perjury, containing the name, address, and Social Security account
number of the person receiving the payment. No withholding is required if the individual
presents a signed certificate from the individual's employer which states that the individual
is an employee of that employer. A nonresident individual who holds a class C license must
be treated as an athlete for purposes of applying the provisions of subdivision 4a and section
290.17, subdivision 2 deleted text begin (1)(b)(ii) deleted text end new text begin (a)(2)(ii) 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. 7.

Minnesota Statutes 2017 Supplement, section 462D.03, subdivision 2, is amended
to read:

Subd. 2.

Designation of qualified beneficiary.

(a) The account holder must designate
a first-time home buyer as the qualified beneficiary of the account deleted text begin by April 15 of the year deleted text end new text begin
in a form and manner prescribed by the commissioner new text end following the taxable year in which
the account was established. The account holder may be the qualified beneficiary. The
account holder may change the designated qualified beneficiary at any time, but no more
than one qualified beneficiary may be designated for an account at any one time. For purposes
of the one beneficiary restriction, a married couple qualifies as one beneficiary. Changing
the designated qualified beneficiary of an account does not affect computation of the ten-year
period under section 462D.06, subdivision 2.

(b) The commissioner shall establish a process for account holders to notify the state
that permits recording of the account, the account holder or holders, any transfers under
section 462D.04, subdivision 2, and the designated qualified beneficiary for each account.
This may be done upon filing the account holder's income tax return or in any other way
the commissioner determines to be appropriate.

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

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2016, section 297A.68, subdivision 17, is amended to read:

Subd. 17.

Ships used in interstate commerce new text begin ; other vessels new text end .

Repair, replacement, and
rebuilding parts and materials, and lubricants, for new text begin the following are exempt:
new text end

new text begin (1) new text end ships or vessels used or to be used principally in interstate or foreign commerce deleted text begin are
exempt. deleted text end new text begin ; and
new text end

new text begin (2) new text end vessels with a gross registered tonnage of at least 3,000 tons deleted text begin are exempt 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 2016, section 297A.68, subdivision 42, is amended to read:

Subd. 42.

Qualified data centers.

(a) Purchases of enterprise information technology
equipment and computer software for use in a qualified data center, or a qualified refurbished
data center, are exempt, except that computer software maintenance agreements are exempt
for purchases made after June 30, 2013. The tax on purchases exempt under this paragraph
must be imposed and collected as if the rate under section 297A.62, subdivision 1, applied,
and then refunded after June 30, 2013, in the manner provided in section 297A.75. This
exemption includes enterprise information technology equipment and computer software
purchased to replace or upgrade enterprise information technology equipment and computer
software in a qualified data center, or a qualified refurbished data center.

(b) Electricity used or consumed in the operation of a qualified data center or qualified
refurbished data center is exempt.

(c) For purposes of this subdivision, "qualified data center" means a facility in Minnesota:

(1) that is comprised of one or more buildings that consist in the aggregate of at least
25,000 square feet, and that are located on a single parcel or on contiguous parcels, new text begin in order
to centralize the storage, management, and dissemination of data and information, new text end where
the total cost of construction or refurbishment, investment in enterprise information
technology equipment, and computer software is at least $30,000,000 within a 48-month
period. The 48-month period begins no sooner than July 1, 2012, except that costs for
computer software maintenance agreements purchased before July 1, 2013, are not included
in determining if the $30,000,000 threshold has been met;

(2) that is constructed or substantially refurbished after June 30, 2012, where
"substantially refurbished" means that at least 25,000 square feet have been rebuilt or
modified, including:

(i) installation of enterprise information technology equipment; environmental control,
computer software, and energy efficiency improvements; and

(ii) building improvements; and

(3) that is used to house enterprise information technology equipment, where the facility
has the following characteristics:

(i) uninterruptible power supplies, generator backup power, or both;

(ii) sophisticated fire suppression and prevention systems; and

(iii) enhanced security. A facility will be considered to have enhanced security if it has
restricted access to the facility to selected personnel; permanent security guards; video
camera surveillance; an electronic system requiring pass codes, keycards, or biometric scans,
such as hand scans and retinal or fingerprint recognition; or similar security features.

In determining whether the facility has the required square footage, the square footage
of the following spaces shall be included if the spaces support the operation of enterprise
information technology equipment: office space, meeting space, and mechanical and other
support facilities. deleted text begin For purposes of this subdivision, "computer software" includes, but is not
limited to, software utilized or loaded at a qualified data center or qualified refurbished data
center, including maintenance, licensing, and software customization.
deleted text end

(d) For purposes of this subdivision, a "qualified refurbished data center" means an
existing facility that qualifies as a data center under paragraph (c), clauses (2) and (3), but
that is comprised of one or more buildings that consist in the aggregate of at least 25,000
square feet, and that are located on a single parcel or contiguous parcels, where the total
cost of construction or refurbishment, investment in enterprise information technology
equipment, and computer software is at least $50,000,000 within a 24-month period.

(e) For purposes of this subdivision, "enterprise information technology equipment"
means computers and equipment supporting computing, networking, or data storage,
including servers and routers. It includes, but is not limited to: cooling systems, cooling
towers, and other temperature control infrastructure; power infrastructure for transformation,
distribution, or management of electricity used for the maintenance and operation of a
qualified data center or qualified refurbished data center, including but not limited to exterior
dedicated business-owned substations, backup power generation systems, battery systems,
and related infrastructure; and racking systems, cabling, and trays, which are necessary for
the maintenance and operation of the qualified data center or qualified refurbished data
center.

(f) A qualified data center or qualified refurbished data center may claim the exemptions
in this subdivision for purchases made either within 20 years of the date of its first purchase
qualifying for the exemption under paragraph (a), or by June 30, 2042, whichever is earlier.

(g) The purpose of this exemption is to create jobs in the construction and data center
industries.

(h) This subdivision is effective for sales and purchases made before July 1, 2042.

(i) deleted text begin (1) deleted text end The commissioner of employment and economic development must certify to the
commissioner of revenue, in a format approved by the commissioner of revenue, when a
qualified data center has met the requirements under paragraph (c) or a qualified refurbished
data center has met the requirements under paragraph (d). The certification must provide
the following information regarding each qualified data center or qualified refurbished data
center:

deleted text begin (i) deleted text end new text begin (1) new text end the total square footage amount;

deleted text begin (ii) deleted text end new text begin (2) new text end the total amount of construction or refurbishment costs and the total amount of
qualifying investments in enterprise information technology equipment and computer
software; deleted text begin and
deleted text end

deleted text begin (iii) deleted text end new text begin (3) new text end the beginning and ending of the applicable period under either paragraph (c) or
(d) in which the qualifying expenditures and purchases under deleted text begin item (ii) deleted text end new text begin clause (2) new text end were made,
but in no case shall the period begin before July 1, 2012; new text begin and
new text end

new text begin (4) the date upon which the qualified data center first met the requirements under
paragraph (c) or a qualified refurbished data center first met the requirements under paragraph
(d).
new text end

deleted text begin (2) deleted text end new text begin (j) new text end Any refund for sales tax paid on qualifying purchases under this subdivision must
not be issued unless the commissioner of revenue has received the certification required
under deleted text begin clause (1) either from deleted text end new text begin paragraph (i) issued by new text end the commissioner of employment and
economic development deleted text begin or the qualified data center or qualified refurbished data center
claiming the refund; and deleted text end new text begin .
new text end

deleted text begin (3) deleted text end new text begin (k) new text end The commissioner of employment and economic development must annually
notify the commissioner of revenue of the qualified data centers that are projected to meet
the requirements under paragraph (c) and the qualified refurbished data centers that are
projected to meet the requirements under paragraph (d) in each of the next four years. The
notification must provide the information required under deleted text begin clause (1), items (i) to (iii) deleted text end new text begin paragraph
(i), clauses (1) to (4) new text end , for each qualified data center or qualified refurbished data center.

new text begin (l) For the purposes of this subdivision, "computer software" includes, but is not limited
to, software utilized or loaded at a qualified data center or qualified refurbished data center,
including maintenance, licensing, and software customization.
new text end

new text begin (m) For purposes of paragraph (a), computer software is purchased for use in a qualified
data center or qualified refurbished data center only if the software provides one or more
of the following functions at the data center:
new text end

new text begin (1) operation, maintenance, or monitoring of the enterprise information technology
equipment;
new text end

new text begin (2) management, manipulation, analysis, collection, storage, processing, distribution,
or allowance of access to large amounts of data at the data center; or
new text end

new text begin (3) any other similar functions related to the equipment or data.
new text end

new text begin (n) For the purposes of paragraph (a), computer software is not purchased for use in the
data center merely because the software is stored, utilized, or loaded at the data center.
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 2016, section 297A.68, subdivision 44, is amended to read:

Subd. 44.

Greater Minnesota business expansions.

(a) Purchases and use of tangible
personal property or taxable services by a qualified business deleted text begin , as defined in section 116J.8738, deleted text end
are exempt if:

(1) new text begin the commissioner of employment and economic development certifies to the
commissioner of revenue, in a format approved by the commissioner of revenue, that the
qualified business meets the requirements under section 116J.8738;
new text end

new text begin (2) new text end the business subsidy agreement provides that the exemption under this subdivision
applies;

deleted text begin (2) deleted text end new text begin (3) new text end the property or services are primarily used or consumed at the facility in greater
Minnesota identified in the business subsidy agreement; and

deleted text begin (3) deleted text end new text begin (4) new text end the purchase was made and delivery received during the duration of the
deleted text begin certification of the business as a qualified business under section 116J.8738 deleted text end new text begin business subsidy
agreement new text end .

(b) Purchase and use of construction materials and supplies used or consumed in, and
equipment incorporated into, the construction of improvements to real property in greater
Minnesota are exempt if the improvements after completion of construction are to be used
in the conduct of the trade or business of the qualified business, deleted text begin as defined in section
116J.8738 deleted text end new text begin and the commissioner of employment and economic development certifies to
the commissioner of revenue, in a format approved by the commissioner of revenue, that
the qualified business meets the requirements under section 116J.8738 new text end . This exemption
applies regardless of whether the purchases are made by the business or a contractor.

(c) The exemptions under this subdivision apply to a local sales and use tax.

(d) The tax on purchases imposed under this subdivision must be imposed and collected
as if the rate under section 297A.62 applied, and then refunded in the manner provided in
section 297A.75. The total amount refunded for a facility over the certification period is
limited to the amount listed in the business subsidy agreement. No more than $7,000,000
may be refunded in a fiscal year for all purchases under this subdivision. Refunds must be
allocated on a first-come, first-served basis. If more than $7,000,000 of eligible claims are
made in a fiscal year, claims by qualified businesses carry over to the next fiscal year, and
the commissioner new text begin of revenue new text end must first allocate refunds to qualified businesses eligible for
a refund in the preceding fiscal year. Any portion of the balance of funds allocated for
refunds under this paragraph does not cancel and shall be carried forward to and available
for refunds in subsequent fiscal years. Notwithstanding section 297A.75, subdivision 4, for
an eligible refund claim that carries over to a subsequent fiscal year, the interest on the
amount carried over must be paid on the refund no sooner than from 90 days after July 1
of the fiscal year in which funds are available for the eligible claim.

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 2016, section 297A.71, subdivision 45, is amended to read:

Subd. 45.

Biopharmaceutical manufacturing facility.

(a) Materials and supplies used
or consumed in, capital equipment incorporated into, and privately owned infrastructure in
support of the construction, improvement, or expansion of a biopharmaceutical manufacturing
facility in the state are exempt if new text begin the commissioner of employment and economic
development certifies to the commissioner of revenue that new text end the following criteria are met:

(1) the facility is used for the manufacturing of biologics;

(2) the total capital investment made at the facility exceeds $50,000,000; and

(3) the facility creates and maintains at least 190 full-time equivalent positions at the
facility. These positions must be new jobs in Minnesota and not the result of relocating jobs
that currently exist in Minnesota.

(b) The tax must be imposed and collected as if the rate under section 297A.62 applied,
and refunded in the manner provided in section 297A.75.

(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing facility
must:

(1) initially apply to the deleted text begin Department deleted text end new text begin commissioner new text end of employment and economic
development for certification no later than one year from the final completion date of
construction, improvement, or expansion of the facility; and

(2) for each year that the owner of the biopharmaceutical manufacturing facility applies
for a refund, the deleted text begin owner deleted text end new text begin commissioner new text end must have received written certification from the
deleted text begin Department deleted text end new text begin commissioner new text end of employment and economic development that the facility has
met the criteria of paragraph (a).

(d) The refund is to be paid annually at a rate of 25 percent of the total allowable refund
payable to date, with the commissioner making annual payments of the remaining refund
until all of the refund has been paid.

(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are
interchangeable and mean medical drugs or medicinal preparations produced using
technology that uses biological systems, living organisms, or derivatives of living organisms
to make or modify products or processes for specific use. The medical drugs or medicinal
preparations include but are not limited to proteins, antibodies, nucleic acids, and vaccines.

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 2016, section 297A.77, is amended by adding a subdivision to
read:

new text begin Subd. 5. new text end

new text begin Records must be kept. new text end

new text begin Every person liable for any tax imposed by this chapter,
or for the collection thereof, shall keep such records, render such statements, make such
returns, and comply with such rules, as the commissioner may from time to time prescribe.
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

TOBACCO TAXES

Section 1.

Minnesota Statutes 2016, section 297F.01, subdivision 19, is amended to read:

Subd. 19.

Tobacco products.

(a) "Tobacco products" means any product containing,
made, or derived from tobacco that is intended for human consumption, whether chewed,
smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or
any component, part, or accessory of a tobacco product, including, but not limited to, cigars;
cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking
tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing
tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds
and forms of tobacco; but does not include cigarettes as defined in this section. new text begin Tobacco
products includes vapor products. new text end Tobacco products excludes any tobacco product that has
been approved by the United States Food and Drug Administration for sale as a tobacco
cessation product, as a tobacco dependence product, or for other medical purposes, and is
being marketed and sold solely for such an approved purpose.

(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4, tobacco
products includes a premium cigar, as defined in subdivision 13a.

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 2016, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 22b. new text end

new text begin Vapor products. new text end

new text begin (a) "Vapor products" means any cartridge, bottle, or other
package that contains nicotine made or derived from tobacco, that is in a solution that is
consumed, or meant to be consumed, through the use of a heating element, power source,
electronic circuit, or other electronic, chemical, or mechanical means that produces vapor
from the nicotine. This paragraph expires December 31, 2018.
new text end

new text begin (b) Beginning January 1, 2019, "vapor products" means any cartridge, bottle, or other
package that contains nicotine, including nicotine produced from sources other than tobacco,
that is in a solution that is consumed, or meant to be consumed, through the use of a heating
element, power source, electronic circuit, or other electronic, chemical, or mechanical means
that produces vapor from the nicotine.
new text end

new text begin (c) Vapor products includes any electronic cigarette, electronic cigar, electronic cigarillo,
electronic pipe, or similar product or device, and any batteries, heating elements, or other
components, parts, or accessories sold with and meant to be used in the consumption of the
nicotine solution.
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 2016, section 297F.01, subdivision 23, is amended to read:

Subd. 23.

Wholesale sales price.

"Wholesale sales price" means the price at which a
distributor purchases a tobacco product. Wholesale sales price includes the applicable federal
excise tax, freight charges, or packaging costs, regardless of whether they were included in
the purchase price. new text begin Wholesale sales price of a vapor product does not include the cost of a
product, device, component, part, or accessory described in subdivision 22b that is sold
with a nicotine solution if the distributor sells the cartridge of nicotine solution separately
and can isolate the cost of the product, device, component, part, or accessory.
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 4

PROPERTY TAXES

Section 1.

Minnesota Statutes 2016, section 270C.85, subdivision 2, is amended to read:

Subd. 2.

Powers and duties.

The commissioner shall have and exercise the following
powers and duties in administering the property tax laws deleted text begin . deleted text end new text begin :
new text end

deleted text begin (a) deleted text end new text begin (1) new text end confer with, advise, and give the necessary instructions and directions to local
assessors and local boards of review throughout the state as to their duties under the laws
of the state deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (b) deleted text end new text begin (2) new text end direct proceedings, actions, and prosecutions to be instituted to enforce the laws
relating to the liability and punishment of public officers and officers and agents of
corporations for failure or negligence to comply with the provisions of the property tax
laws, and cause complaints to be made against local assessors, members of boards of
equalization, members of boards of review, or any other assessing or taxing officer, to the
proper authority, for their removal from office for misconduct or negligence of duty deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (c) deleted text end new text begin (3) new text end require county attorneys to assist in the commencement of prosecutions in actions
or proceedings for removal, forfeiture, and punishment, for violation of the property tax
laws in their respective districts or counties deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (d) deleted text end new text begin (4) new text end require town, city, county, and other public officers to report new text begin and certify
new text end information new text begin , at the parcel level or in the aggregate, new text end as to the assessment new text begin and taxation new text end of new text begin real
and personal new text end property, and such other information as may be needful in the work of the
commissioner deleted text begin , in such form as the commissioner may prescribe deleted text end . new text begin The commissioner shall
prescribe the content, format, manner, and time of filing of all required reports and
certifications;
new text end

deleted text begin (e) deleted text end new text begin (5) new text end transmit to the governor, on or before the third Monday in December of each
even-numbered year, and to each member of the legislature, on or before November 15 of
each even-numbered year, the report of the department for the preceding years, showing all
the taxable property subject to the property tax laws and the value of the same, in tabulated
form deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (f) deleted text end new text begin (6) new text end inquire into the methods of assessment and taxation and ascertain whether the
assessors faithfully discharge their duties deleted text begin . deleted text end new text begin ; and
new text end

deleted text begin (g) deleted text end new text begin (7) new text end assist local assessors in determining the estimated market value of industrial
special-use property. For purposes of this deleted text begin paragraph deleted text end new text begin clause new text end , "industrial special-use property"
means property that:

deleted text begin (1) deleted text end new text begin (i) new text end is designed and equipped for a particular type of industry;

deleted text begin (2) deleted text end new text begin (ii) new text end is not easily adapted to some other use due to the unique nature of the facilities;

deleted text begin (3) deleted text end new text begin (iii) new text end has facilities totaling at least 75,000 square feet in size; and

deleted text begin (4) deleted text end new text begin (iv) new text end has a total estimated market value of $10,000,000 or greater based on the
assessor's preliminary determination.

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 2017 Supplement, section 270C.89, subdivision 1, is amended
to read:

Subdivision 1.

Initial report.

Each county assessor shall file deleted text begin by April 1 deleted text end with the
commissioner a copy of deleted text begin the abstract deleted text end new text begin preliminary assessment information that the
commissioner may require under section 270C.85, subdivision 2, clause (4), new text end that will be
acted upon by the local and county boards of review. deleted text begin The abstract must list the real and
personal property in the county itemized by assessment districts. deleted text end The assessor of each county
in the state shall file with the commissioner, within ten working days following final action
of the local board of review or equalization and within five days following final action of
the county board of equalization, any changes made by the local or county board. deleted text begin The
information must be filed in the manner prescribed by the commissioner.
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. 3.

Minnesota Statutes 2016, section 270C.89, subdivision 2, is amended to read:

Subd. 2.

Final report.

The final deleted text begin abstract of assessments deleted text end new text begin assessment information new text end after
adjustments by the State Board of Equalization and inclusion of any omitted property shall
be deleted text begin submitted deleted text end new text begin reported new text end to the commissioner deleted text begin on or before September 1 of each calendar year deleted text end new text begin
under section 270C.85, subdivision 2, clause (4) new text end . deleted text begin The final abstract must separately report
the captured tax capacity of tax increment financing districts under section 469.177,
subdivision 2, the areawide net tax capacity contribution values determined under sections
276A.05, subdivision 1, and 473F.07, subdivision 1, and the value subject to the power line
credit under section 273.42.
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 2016, section 270C.91, is amended to read:

270C.91 RECORD OF PROCEEDINGS CHANGING NET TAX CAPACITY;
DUTIES OF COUNTY AUDITOR.

A record of all proceedings of the commissioner affecting any change in the net tax
capacity of any property, as revised by the State Board of Equalization, shall be kept by the
commissioner and a copy thereof, duly certified, shall be mailed each year to the auditor of
each county wherein such property is situated, on or before June 30 deleted text begin or 30 days after
submission of the abstract required by section 270C.89, whichever is later deleted text end . This record shall
specify the amounts or amount, or both, added to or deducted from the net tax capacity of
the real property of each of the several towns and cities, and of the real property not in towns
or cities, also the percent or amount of both, added to or deducted from the several classes
of personal property in each of the towns and cities, and also the amount added to or deducted
from the assessment of any person. The county auditor shall add to or deduct from such
tract or lot, or portion thereof, of any real property in the county the required percent or
amount, or both, on the net tax capacity thereof as it stood after equalized by the county
board, adding in each case a fractional sum of 50 cents or more, and deducting in each case
any fractional sum of less than 50 cents, so that no net tax capacity of any separate tract or
lot shall contain any fraction of a dollar; and add to, or deduct from, the several classes of
personal property in the county the required percent or amount, or both, on the net tax
capacity thereof as it stood after equalized by the county board, adding or deducting in
manner aforesaid any fractional sum so that no net tax capacity of any separate class of
personal property shall contain a fraction of a dollar, and add to or deduct from assessment
of any person, as they stood after equalization by the county board, the required amounts
to agree with the assessments as returned by 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. 5.

Minnesota Statutes 2016, section 273.061, subdivision 9, is amended to read:

Subd. 9.

Additional general duties.

Additional duties of the county assessor deleted text begin shall be deleted text end new text begin
are new text end as follows:

(1) to make all assessments, based upon the appraised values reported by the local
assessors or assistants and the county assessor's own knowledge of the value of the property
assessed;

(2) to personally view and determine the value of any property deleted text begin which deleted text end new text begin that new text end because of
its type or character may be difficult for the local assessor to appraise;

(3) to make all changes ordered by the local boards of review, relative to the net tax
capacity of the property of any individual, firm or corporation after notice has been given
and hearings held as provided by law;

(4) to enter all assessments in the assessment books, furnished by the county auditor,
with each book and the tabular statements for each book in correct balance;

(5) to prepare all assessment cards, charts, maps and any other forms prescribed by the
commissioner of revenue;

(6) to attend the meeting of the county board of equalization; to investigate and report
on any assessment ordered by said board; to enter all changes made by said board in the
assessment books and prepare deleted text begin the abstract of assessments for the commissioner of revenue deleted text end new text begin
information reported to the commissioner under section 270C.85, subdivision 2, clause (4) new text end ;
to enter all changes made by the State Board of Equalization in the assessment books; to
deduct all exemptions authorized by law from each assessment and certify to the county
auditor the taxable value of each parcel of land, as described and listed in the assessment
books by the county auditor, and the taxable value of the personal property of each person,
firm, or corporation assessed;

(7) to investigate and make recommendations relative to all applications for the abatement
of taxes or applications for the reduction of the net tax capacity of any property; new text begin and
new text end

(8) to perform all other duties relating to the assessment of property for the purpose of
taxation which may be required by the commissioner of revenue.

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 2017 Supplement, section 273.0755, is amended to read:

273.0755 TRAINING AND EDUCATION OF PROPERTY TAX PERSONNEL.

(a) Beginning with the four-year period starting on July 1, 2000, every person licensed
by the state Board of Assessors at the Accredited Minnesota Assessor level or higher, shall
successfully complete a weeklong Minnesota laws course sponsored by the Department of
Revenue at least once in every four-year period. An assessor need not attend the course if
they successfully pass the test for the course.

(b) The commissioner of revenue may require that each county, and each city for which
the city assessor performs the duties of county assessor, have deleted text begin (i) deleted text end new text begin (1) new text end a person on the assessor's
staff who is certified by the Department of Revenue in sales ratio calculations, deleted text begin (ii) deleted text end new text begin (2) new text end an
officer or employee who is certified by the Department of Revenue in tax calculations, and
deleted text begin (iii) deleted text end new text begin (3) new text end an officer or employee who is certified by the Department of Revenue in the proper
preparation of deleted text begin abstracts of assessment. The commissioner of revenue may require that each
county have an officer or employee who is certified by the Department of Revenue in the
proper preparation of abstracts of tax lists deleted text end new text begin information reported to the commissioner under
section 270C.85, subdivision 2, clause (4) new text end . Certifications under this paragraph expire after
four years.

(c) Beginning with the four-year educational licensing period starting on July 1, 2004,
every Minnesota assessor licensed by the State Board of Assessors must attend and participate
in a seminar that focuses on ethics, professional conduct and the need for standardized
assessment practices developed and presented by the commissioner of revenue. This
requirement must be met at least once in every subsequent four-year period. This requirement
applies to all assessors licensed for one year or more in the four-year period.

(d) When the commissioner of revenue determines that an individual or board that
performs functions related to property tax administration has performed those functions in
a manner that is not uniform or equitable, the commissioner may require that the individual
or members of the board complete supplemental training. The commissioner may not require
that an individual complete more than 32 hours of supplemental training pursuant to this
paragraph. If the individual is required to complete supplemental training due to that
individual's membership on a local or county board of appeal and equalization, the
commissioner may not require that the individual complete more than two hours of
supplemental training.

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 2016, section 273.113, subdivision 3, is amended to read:

Subd. 3.

Reimbursement for lost revenue.

The county auditor shall certify to the
commissioner of revenue deleted text begin , as part of the abstracts of tax lists required to be filed with the
commissioner deleted text end under section deleted text begin 275.29 deleted text end new text begin 270C.85, subdivision 2, clause (4) new text end , the amount of tax
lost to the county from the property tax credit under subdivision 2. Any prior year adjustments
must also be certified deleted text begin in the abstracts of tax lists deleted text end . 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, other than school
districts, for the taxes lost. The payments must be made at the time provided in section
473H.10 for payment to taxing jurisdictions in the same proportion that the ad valorem tax
is distributed. Reimbursements to school districts must be made as provided in section
273.1392. The amount necessary to make the reimbursements under this section is annually
appropriated from the general fund to the commissioner of revenue.

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 2016, section 273.119, subdivision 2, is amended to read:

Subd. 2.

Reimbursement for lost revenue.

The county may transfer money from the
county conservation account created in section 40A.152 to the county revenue fund to
reimburse the fund for the cost of the property tax credit. The county auditor shall certify
to the commissioner of revenue deleted text begin , as part of the abstracts of tax lists required to be filed with
the commissioner deleted text end under section deleted text begin 275.29 deleted text end new text begin 270C.85, subdivision 2, clause (4) new text end , the amount of
tax lost to the county from the property tax credit under subdivision 1 and the extent that
the tax lost exceeds funds available in the county conservation account. Any prior year
adjustments must also be certified deleted text begin in the abstracts of tax lists deleted text end . 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, other
than school districts, from the Minnesota conservation fund under section 40A.151 for the
taxes lost in excess of the county account. The payments must be made at the time provided
in section 473H.10, subdivision 3, for payment to taxing jurisdictions in the same proportion
that the ad valorem tax is distributed.

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 2016, section 273.1231, subdivision 3, is amended to read:

Subd. 3.

Disaster or emergency area.

(a) "Disaster or emergency area" means a
geographic area for which:

(1)(i) the president of the United States, the secretary of agriculture, or the administrator
of the Small Business Administration has determined that a disaster exists pursuant to federal
law, or

(ii) a local emergency has been declared pursuant to section 12.29; and

(2) an application by the local unit of government requesting property tax relief under
this section has been received by the governor and approved by the executive council.

(b) The executive council must not approve an application unless:

(1) a completed disaster survey is included; and

(2) within the boundaries of the applicant, (i) the average damage for the buildings that
are damaged is at least $5,000, and (ii) either at least 25 taxable buildings were damaged,
or the total dollar amount of damage to all taxable buildings equals or exceeds one percent
of the total taxable market value of buildings for the applicant as reported to the commissioner
of revenue under section deleted text begin 270C.89, subdivision 2 deleted text end new text begin 270C.85, subdivision 2, clause (4) new text end , for the
assessment in the year prior to the year of the damage.

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 2017 Supplement, section 273.13, subdivision 22, is amended
to read:

Subd. 22.

Class 1.

(a) Except as provided in subdivision 23 and in paragraphs (b) and
(c), real estate deleted text begin which deleted text end new text begin that new text end 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 classification rate of
one percent of its market value deleted text begin ; deleted text end and the market value of class 1a property that exceeds
$500,000 has a classification 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;

(2) any person who is permanently and totally disabled or by the disabled person and
the disabled person's spouse; or

(3) the surviving spouse of a permanently and totally disabled veteran homesteading a
property classified under this paragraph for taxes payable in 2008.

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, and that the
property is not eligible for the valuation exclusion under subdivision 34.

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 classification rate of .45 percent of its market value. The remaining market
value of class 1b property is classified as class 1a or class 2a property, whichever is
appropriate.

(c) Class 1c property is commercial use real and personal property that abuts public
water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by
the Department of Natural Resources, 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. new text begin To
qualify as class 1c property, the owner of the homestead and the resort property must be
the same. new text end For purposes of this paragraph, 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. If the same owner owns two separate parcels that are located in the same township,
and one of those properties is classified as a class 1c property and the other would be eligible
to be classified as a class 1c property if it was used as the homestead of the owner, both
properties will be assessed as a single class 1c property; for purposes of this sentence,
properties are deemed to be owned by the same owner if each of them is owned by a limited
liability company, and both limited liability companies have the same membership. 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 classification 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 classification rates as class 1a property
under paragraph (a).

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 2016, section 273.13, subdivision 35, is amended to read:

Subd. 35.

Homestead market value exclusion.

(a) Prior to determining a property's
net tax capacity under this section, property classified as class 1a or 1b under subdivision
22, and the portion of property classified as class 2a under subdivision 23 consisting of the
house, garage, and surrounding one acre of land, shall be eligible for a market value exclusion
as determined under paragraph (b).

(b) For a homestead valued at $76,000 or less, the exclusion is 40 percent of market
value. For a homestead valued between $76,000 and $413,800, the exclusion is $30,400
minus nine percent of the valuation over $76,000. For a homestead valued at $413,800 or
more, there is no valuation exclusion. The valuation exclusion shall be rounded to the nearest
whole dollar, and may not be less than zero.

(c) Any valuation exclusions or adjustments under section 273.11 shall be applied prior
to determining the amount of the valuation exclusion under this subdivision.

(d) In the case of a property that is classified as part homestead and part nonhomestead,
deleted text begin (i) deleted text end new text begin (1) new text end the exclusion shall apply only to the homestead portion of the property, but deleted text begin (ii) deleted text end new text begin (2) new text end
if a portion of a property is classified as nonhomestead solely because not all the owners
occupy the property, not all the owners have qualifying relatives occupying the property,
or solely because not all the spouses of owners occupy the property, the exclusion amount
shall be initially computed as if that nonhomestead portion were also in the homestead class
and then prorated to the owner-occupant's percentage of deleted text begin ownership deleted text end new text begin homestead. The
percentage of homestead is equal to 100 divided by the number of owners of the property,
or, in the case of a trust, the number of grantors of the trust that owns the property new text end . For the
purpose of this section, when an owner-occupant's spouse does not occupy the property,
the percentage of deleted text begin ownership deleted text end new text begin homestead new text end for the owner-occupant spouse is one-half of the
couple's deleted text begin ownership deleted text end new text begin homestead new text end percentage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2019 and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2016, section 273.136, subdivision 2, is amended to read:

Subd. 2.

Reduction amounts submitted to county.

The commissioner of revenue shall
determine, not later than April 1 of each year, the amount of reduction resulting from section
273.135 in each county containing a tax relief area as defined by section 273.134, paragraph
(b), basing determinations on a review of deleted text begin abstracts of tax lists submitted by the county
auditors pursuant to section 275.29 deleted text end new text begin information reported to the commissioner under section
270C.85, subdivision 2, clause (4) new text end . The commissioner may make changes deleted text begin in the abstracts
of tax lists deleted text end as deemed necessary. The commissioner of revenue, after such review, shall
submit to the St. Louis County auditor, on or before April 15, the amount of the first half
payment payable hereunder and on or before September 15 the amount of the second half
payment.

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 2017 Supplement, section 273.1384, subdivision 2, is amended
to read:

Subd. 2.

Agricultural homestead market value credit.

Property classified as agricultural
homestead under section 273.13, subdivision 23, paragraph (a), is eligible for an agricultural
credit. The credit is computed using the property's agricultural credit market value, defined
for this purpose as the property's market value excluding the market value of the house,
garage, and immediately surrounding one acre of land. The credit is equal to 0.3 percent of
the first $115,000 of the property's agricultural credit market value plus 0.1 percent of the
property's agricultural credit market value in excess of $115,000, subject to a maximum
credit of $490 new text begin for a full agricultural homestead new text end . In the case of property that is classified as
part homestead and part nonhomestead solely because not all the owners occupy or farm
the property, not all the owners have qualifying relatives occupying or farming the property,
or solely because not all the spouses of owners occupy the property, the credit is computed
on the amount of agricultural credit market value corresponding to the percentage of
homestead new text begin , and the maximum credit equals $490 multiplied by the percentage of homestead new text end .
The percentage of homestead is equal to 100 divided by the number of owners of the property,
or, in the case of a trust, the number of grantors of the trust that owns the property.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2019 and thereafter.
new text end

Sec. 14.

Minnesota Statutes 2016, section 273.1384, subdivision 3, is amended to read:

Subd. 3.

Credit reimbursements.

The county auditor shall determine the tax reductions
allowed under subdivision 2 within the county for each taxes payable year and shall certify
that amount to the commissioner of revenue deleted text begin as a part of the abstracts of tax lists submitted
by the county auditors under section 275.29 deleted text end new text begin under section 270C.85, subdivision 2, clause
(4) new text end . Any prior year adjustments shall also be certified deleted text begin on the abstracts of tax lists deleted text end . The
commissioner shall review the certifications for accuracy, and may make such changes as
are deemed necessary, or return the certification to the county auditor for correction. The
credit under this section must be used to proportionately reduce the net tax capacity-based
property tax payable to each local taxing jurisdiction as provided in section 273.1393.

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 2017 Supplement, section 273.1387, subdivision 3, is amended
to read:

Subd. 3.

Credit reimbursements.

The county auditor shall determine the tax reductions
allowed under this section within the county for each taxes payable year and shall certify
that amount to the commissioner of revenue deleted text begin as a part of the abstracts of tax lists submitted
under section 275.29 deleted text end new text begin under section 270C.85, subdivision 2, clause (4) new text end . Any prior year
adjustments shall also be certified deleted text begin on the abstracts of tax lists deleted text end . The commissioner shall
review the certifications for accuracy, and may make such changes as are deemed necessary,
or return the certification to the county auditor for correction. The credit under this section
must be used to reduce the school district net tax capacity-based property tax as provided
in section 273.1393.

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 2016, section 273.18, is amended to read:

273.18 LISTING, VALUATION, AND ASSESSMENT OF EXEMPT PROPERTY
BY COUNTY AUDITORS.

(a) In every sixth year after the year 2010, the county auditor shall enter the description
of each tract of real property exempt by law from taxation, with the name of the owner, and
the assessor shall value and assess the same in the same manner that other real property is
valued and assessed, and shall designate in each case the purpose for which the property is
used.

(b) deleted text begin For purposes of the apportionment of fire state aid under section 69.021, subdivision
7, deleted text end The county auditor shall include deleted text begin on the abstract of assessment of exempt real property
filed under this section deleted text end new text begin in the exempt property information that the commissioner may
require under section 270C.85, subdivision 2, clause (4) new text end , the total number of acres of all
natural resources lands for which in lieu payments are made under sections 477A.11 to
477A.14. The assessor shall estimate its market value, provided that if the assessor is not
able to estimate the market value of the land on a per parcel basis, the assessor shall furnish
the commissioner of revenue with an estimate of the average value per acre of this land
within the county.

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 2016, section 274.14, is amended to read:

274.14 LENGTH OF SESSION; RECORD.

The board must meet after the second Friday in June on at least one meeting day and
may meet for up to ten consecutive meeting days. The actual meeting dates must be contained
on the valuation notices mailed to each property owner in the county as provided in section
273.121. For this purpose, "meeting days" is defined as any day of the week excluding
Sunday. At the board's discretion, "meeting days" may include Saturday. No action taken
by the county board of review after June 30 is valid, except for corrections permitted in
sections 273.01 and 274.01. The county auditor shall keep an accurate record of the
proceedings and orders of the board. The record must be published like other proceedings
of county commissioners. A copy of the published record must be sent to the commissioner
of revenue deleted text begin , with the abstract of assessment required by section 274.16 deleted text end new text begin within five days
following final action of the county board of equalization new text end .

For counties that conduct either regular board of review meetings or open book meetings,
at least one of the meeting days must include a meeting that does not end before 7:00 p.m.
For counties that require taxpayer appointments for the board of review, appointments must
include some available times that extend until at least 7:00 p.m. The county may have a
Saturday meeting in lieu of, or in addition to, the extended meeting times under this
paragraph.

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 2016, section 274.16, is amended to read:

274.16 CORRECTED LISTS deleted text begin , ABSTRACTS deleted text end .

The county assessor or, in Ramsey County, the official designated by the board of county
commissioners shall calculate the changes of the assessment lists determined by the county
board of equalization, and make corrections accordingly, in the real or personal lists, or
both, and shall make deleted text begin duplicate abstracts deleted text end new text begin duplicates new text end of them. One must be filed in the assessor's
office, and one must be forwarded to the commissioner of revenue as provided in section
270C.89.

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 2017 Supplement, section 275.025, subdivision 1, is amended
to read:

Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy for commercial-industrial property is $784,590,000
for taxes payable in 2018 and thereafter. The state general levy for seasonal-recreational
property is $44,190,000 for taxes payable in 2018 and thereafter. 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.

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:

(1) an erroneous report of taxable value by a local official;

(2) an erroneous calculation by the commissioner; and

(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported deleted text begin 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 deleted text end new text begin
to the commissioner under section 270C.85, subdivision 2, clause (4), new text end for the same year.

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.

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 2016, section 290B.09, subdivision 1, is amended to read:

Subdivision 1.

Determination; payment.

The county auditor shall determine the total
current year's deferred amount of property tax under this chapter in the county, and deleted text begin submit deleted text end new text begin
report new text end those amounts deleted text begin as part of the abstracts of tax lists submitted by the county auditors
under section 275.29 deleted text end new text begin to the commissioner under section 270C.85, subdivision 2, clause (4) new text end .
The commissioner may make changes deleted text begin in the abstracts of tax lists deleted text end as deemed necessary. The
commissioner of revenue, after such review, shall pay the deferred amount of property tax
to each county treasurer on or before August 31.

The county treasurer shall distribute as part of the October settlement the funds received
as if they had been collected as a part of the property 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. 21.

Minnesota Statutes 2016, section 469.177, subdivision 1, is amended to read:

Subdivision 1.

Original net tax capacity.

(a) Upon or after adoption of a tax increment
financing plan, the auditor of any county in which the district is situated shall, upon request
of the authority, certify the original net tax capacity of the tax increment financing district
and that portion of the district overlying any subdistrict as described in the tax increment
financing plan and shall certify in each year thereafter the amount by which the original net
tax capacity has increased or decreased as a result of a change in tax exempt status of
property within the district and any subdistrict, reduction or enlargement of the district or
changes pursuant to subdivision 4. The auditor shall certify the amount within 30 days after
receipt of the request and sufficient information to identify the parcels included in the district.
The certification relates to the taxes payable year as provided in subdivision 6.

(b) If the classification under section 273.13 of property located in a district changes to
a classification that has a different assessment ratio, the original net tax capacity of that
property must be redetermined at the time when its use is changed as if the property had
originally been classified in the same class in which it is classified after its use is changed.

(c) The amount to be added to the original net tax capacity of the district as a result of
previously tax exempt real property within the district becoming taxable equals the net tax
capacity of the real property as most recently assessed pursuant to deleted text begin section 273.18 deleted text end new text begin information
reported to the commissioner under section 270C.85, subdivision 2, clause (4), new text end or, if that
assessment was made more than one year prior to the date of title transfer rendering the
property taxable, the net tax capacity assessed by the assessor at the time of the transfer. If
improvements are made to tax exempt property after the municipality approves the district
and before the parcel becomes taxable, the assessor shall, at the request of the authority,
separately assess the estimated market value of the improvements. If the property becomes
taxable, the county auditor shall add to original net tax capacity, the net tax capacity of the
parcel, excluding the separately assessed improvements. If substantial taxable improvements
were made to a parcel after certification of the district and if the property later becomes tax
exempt, in whole or part, as a result of the authority acquiring the property through
foreclosure or exercise of remedies under a lease or other revenue agreement or as a result
of tax forfeiture, the amount to be added to the original net tax capacity of the district as a
result of the property again becoming taxable is the amount of the parcel's value that was
included in original net tax capacity when the parcel was first certified. The amount to be
added to the original net tax capacity of the district as a result of enlargements equals the
net tax capacity of the added real property as most recently certified by the commissioner
of revenue as of the date of modification of the tax increment financing plan pursuant to
section 469.175, subdivision 4.

(d) If the net tax capacity of a property increases because the property no longer qualifies
under the Minnesota Agricultural Property Tax Law, section 273.111; the Minnesota Open
Space Property Tax Law, section 273.112; or the Metropolitan Agricultural Preserves Act,
chapter 473H, the Rural Preserve Property Tax Program under section 273.114, or because
platted, unimproved property is improved or market value is increased after approval of the
plat under section 273.11, subdivision 14a or 14b, the increase in net tax capacity must be
added to the original net tax capacity. If the net tax capacity of a property increases because
the property no longer qualifies for the homestead market value exclusion under section
273.13, subdivision 35, the increase in net tax capacity must be added to original net tax
capacity if the original construction of the affected home was completed before the date the
assessor certified the original net tax capacity of the district.

(e) The amount to be subtracted from the original net tax capacity of the district as a
result of previously taxable real property within the district becoming tax exempt or
qualifying in whole or part for an exclusion from taxable market value, or a reduction in
the geographic area of the district, shall be the amount of original net tax capacity initially
attributed to the property becoming tax exempt, being excluded from taxable market value,
or being removed from the district. If the net tax capacity of property located within the tax
increment financing district is reduced by reason of a court-ordered abatement, stipulation
agreement, voluntary abatement made by the assessor or auditor or by order of the
commissioner of revenue, the reduction shall be applied to the original net tax capacity of
the district when the property upon which the abatement is made has not been improved
since the date of certification of the district and to the captured net tax capacity of the district
in each year thereafter when the abatement relates to improvements made after the date of
certification. The county auditor may specify reasonable form and content of the request
for certification of the authority and any modification thereof pursuant to section 469.175,
subdivision 4.

(f) If a parcel of property contained a substandard building or improvements described
in section 469.174, subdivision 10, paragraph (e), that were demolished or removed and if
the authority elects to treat the parcel as occupied by a substandard building under section
469.174, subdivision 10, paragraph (b), or by improvements under section 469.174,
subdivision 10, paragraph (e), the auditor shall certify the original net tax capacity of the
parcel using the greater of (1) the current net tax capacity of the parcel, or (2) the estimated
market value of the parcel for the year in which the building or other improvements were
demolished or removed, but applying the classification rates for the current year.

(g) For a redevelopment district qualifying under section 469.174, subdivision 10,
paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of
the land as the original tax capacity for any parcel in the district that contains a building
that 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. 22. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 275.29, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 5

MISCELLANEOUS

Section 1.

Minnesota Statutes 2016, section 272.02, subdivision 27, is amended to read:

Subd. 27.

Superior National Forest; recreational property for use by deleted text begin disabled deleted text end
veterans new text begin with a disability new text end .

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 and primarily used to provide recreational opportunities for deleted text begin disabled deleted text end veterans new text begin with a
disability new text end 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. 2.

Minnesota Statutes 2016, section 272.02, subdivision 81, is amended to read:

Subd. 81.

Certain recreational property for deleted text begin disabled deleted text end veterans new text begin with a disability new text end .

Real
and personal property is exempt if it is located in a county in the metropolitan area with a
population of less than 500,000 according to the 2000 federal census, and owned or leased
and operated by a nonprofit organization, and primarily used to provide recreational
opportunities for deleted text begin disabled deleted text end veterans new text begin with a disability new text end 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. 3.

Minnesota Statutes 2016, section 273.032, is amended to read:

273.032 MARKET VALUE DEFINITION.

(a) Unless otherwise provided, for the purpose of determining any property tax levy
limitation based on market value or any limit on net debt, the issuance of bonds, certificates
of indebtedness, or capital notes based on market value, any qualification to receive state
aid based on market value, or any state aid amount based on market value, the terms "market
value," "estimated market value," and "market valuation," whether equalized or unequalized,
mean the estimated market value of taxable property within the local unit of government
before any of the following or similar adjustments for:

(1) the market value exclusions under:

(i) section 273.11, subdivisions 14a and 14c (vacant platted land);

(ii) section 273.11, subdivision 16 (certain improvements to homestead property);

(iii) section 273.11, subdivisions 19 and 20 (certain improvements to business properties);

(iv) section 273.11, subdivision 21 (homestead property damaged by mold);

(v) section 273.13, subdivision 34 (homestead of a deleted text begin disabled deleted text end veteran new text begin with a disability new text end or
family caregiver); or

(vi) section 273.13, subdivision 35 (homestead market value exclusion); or

(2) the deferment of value under:

(i) the Minnesota Agricultural Property Tax Law, section 273.111;

(ii) the Aggregate Resource Preservation Law, section 273.1115;

(iii) the Minnesota Open Space Property Tax Law, section 273.112;

(iv) the rural preserves property tax program, section 273.114; or

(v) the Metropolitan Agricultural Preserves Act, section 473H.10; or

(3) the adjustments to tax capacity for:

(i) tax increment financing under sections 469.174 to 469.1794;

(ii) fiscal disparities under chapter 276A or 473F; or

(iii) powerline credit under section 273.425.

(b) Estimated market value under paragraph (a) also includes the market value of
tax-exempt property if the applicable law specifically provides that the limitation,
qualification, or aid calculation includes tax-exempt property.

(c) Unless otherwise provided, "market value," "estimated market value," and "market
valuation" for purposes of property tax levy limitations and calculation of state aid, refer
to the estimated market value for the previous assessment year and for purposes of limits
on net debt, the issuance of bonds, certificates of indebtedness, or capital notes refer to the
estimated market value as last finally equalized.

(d) For purposes of a provision of a home rule charter or of any special law that is not
codified in the statutes and that imposes a levy limitation based on market value or any limit
on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market
value, the terms "market value," "taxable market value," and "market valuation," whether
equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

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 2017 Supplement, section 273.13, subdivision 22, is amended
to read:

Subd. 22.

Class 1.

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

The first $500,000 of market value of class 1a property has a net classification rate of
one percent of its market value; and the market value of class 1a property that exceeds
$500,000 has a classification 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 deleted text begin blind deleted text end person new text begin who is
blind new text end and the deleted text begin blind person's deleted text end spouse new text begin of the person who is blind new text end ;

(2) any person who is permanently and totally disabled or by the deleted text begin disabled deleted text end person new text begin with
a disability new text end and the deleted text begin disabled person's deleted text end spouse new text begin of the person with a disability new text end ; or

(3) the surviving spouse of a new text begin veteran who was new text end permanently and totally disabled deleted text begin veteran deleted text end
homesteading a property classified under this paragraph for taxes payable in 2008.

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, and that the
property is not eligible for the valuation exclusion under subdivision 34.

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 classification rate of .45 percent of its market value. The remaining market
value of class 1b property is classified as class 1a or class 2a property, whichever is
appropriate.

(c) Class 1c property is commercial use real and personal property that abuts public
water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by
the Department of Natural Resources, 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 paragraph, 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. If
the same owner owns two separate parcels that are located in the same township, and one
of those properties is classified as a class 1c property and the other would be eligible to be
classified as a class 1c property if it was used as the homestead of the owner, both properties
will be assessed as a single class 1c property; for purposes of this sentence, properties are
deemed to be owned by the same owner if each of them is owned by a limited liability
company, and both limited liability companies have the same membership. 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
classification 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 classification rates as class 1a property
under paragraph (a).

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 2017 Supplement, section 273.13, subdivision 34, is amended
to read:

Subd. 34.

Homestead of deleted text begin disabled deleted text end veteran new text begin with a disability new text end or family caregiver.

(a)
All or a portion of the market value of property owned by a veteran and serving as the
veteran's homestead under this section is excluded in determining the property's taxable
market value if the veteran has a service-connected disability of 70 percent or more as
certified by the United States Department of Veterans Affairs. To qualify for exclusion
under this subdivision, the veteran must have been honorably discharged from the United
States armed forces, as indicated by United States Government Form DD214 or other official
military discharge papers.

(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is excluded,
except as provided in clause (2); and

(2) for a total (100 percent) and permanent disability, $300,000 of market value is
excluded.

(c) If a deleted text begin disabled deleted text end veteran new text begin with a disability new text end qualifying for a valuation exclusion under
paragraph (b), clause (2), predeceases the veteran's spouse, and if upon the death of the
veteran the spouse holds the legal or beneficial title to the homestead and permanently
resides there, the exclusion shall carry over to the benefit of the veteran's spouse for the
current taxes payable year and for eight additional taxes payable years or until such time
as the spouse remarries, or sells, transfers, or otherwise disposes of the property, whichever
comes first. Qualification under this paragraph requires an application under paragraph (h),
and a spouse must notify the assessor if there is a change in the spouse's marital status,
ownership of the property, or use of the property as a permanent residence.

(d) If the spouse of a member of any branch or unit of the United States armed forces
who dies due to a service-connected cause while serving honorably in active service, as
indicated on United States Government Form DD1300 or DD2064, holds the legal or
beneficial title to a homestead and permanently resides there, the spouse is entitled to the
benefit described in paragraph (b), clause (2), for eight taxes payable years, or until such
time as the spouse remarries or sells, transfers, or otherwise disposes of the property,
whichever comes first.

(e) If a veteran meets the disability criteria of paragraph (a) but does not own property
classified as homestead in the state of Minnesota, then the homestead of the veteran's primary
family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify
for under paragraph (b).

(f) In the case of an agricultural homestead, only the portion of the property consisting
of the house and garage and immediately surrounding one acre of land qualifies for the
valuation exclusion under this subdivision.

(g) A property qualifying for a valuation exclusion under this subdivision is not eligible
for the market value exclusion under subdivision 35, or classification under subdivision 22,
paragraph (b).

(h) To qualify for a valuation exclusion under this subdivision a property owner must
apply to the assessor by July 1 of the first assessment year for which the exclusion is sought.
For an application received after July 1, the exclusion shall become effective for the following
assessment year. Except as provided in paragraph (c), the owner of a property that has been
accepted for a valuation exclusion must notify the assessor if there is a change in ownership
of the property or in the use of the property as a homestead.

(i) A first-time application by a qualifying spouse for the market value exclusion under
paragraph (d) must be made any time within two years of the death of the service member.

(j) For purposes of this subdivision:

(1) "active service" has the meaning given in section 190.05;

(2) "own" means that the person's name is present as an owner on the property deed;

(3) "primary family caregiver" means a person who is approved by the secretary of the
United States Department of Veterans Affairs for assistance as the primary provider of
personal care services for an eligible veteran under the Program of Comprehensive Assistance
for Family Caregivers, codified as United States Code, title 38, section 1720G; and

(4) "veteran" has the meaning given the term in section 197.447.

(k) If a veteran dying after December 31, 2011, did not apply for or receive the exclusion
under paragraph (b), clause (2), before dying, the veteran's spouse is entitled to the benefit
under paragraph (b), clause (2), for eight taxes payable years or until the spouse remarries
or sells, transfers, or otherwise disposes of the property if:

(1) the spouse files a first-time application within two years of the death of the service
member or by June 1, 2019, whichever is later;

(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the
homestead and permanently resides there;

(3) the veteran met the honorable discharge requirements of paragraph (a); and

(4) the United States Department of Veterans Affairs certifies that:

(i) the veteran met the total (100 percent) and permanent disability requirement under
paragraph (b), clause (2); or

(ii) the spouse has been awarded dependency and indemnity compensation.

(l) The purpose of this provision of law providing a level of homestead property tax
relief for deleted text begin gravely disabled deleted text end veterans new text begin with a disability new text end , their primary family caregivers, and
their surviving spouses is to help ease the burdens of war for those among our state's citizens
who bear those burdens most heavily.

(m) By July 1, the county veterans service officer must certify the disability rating and
permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.

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 2016, section 289A.08, subdivision 6, is amended to read:

Subd. 6.

Returns of married persons.

deleted text begin A husband and wife deleted text end new text begin Individuals who are married
to each other new text end must file a joint Minnesota income tax return if they filed a joint federal income
tax return. If the deleted text begin husband and wife deleted text end new text begin spouses new text end have elected to file separate federal income tax
returns, they must file separate Minnesota income tax returns. This election to file a joint
or separate return must be changed if they change their election for federal purposes. In the
event taxpayers desire to change their election, the change must be done in the manner and
on the form prescribed by the commissioner.

The determination of whether an individual is married shall be made under the provisions
of section 7703 of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2016, section 289A.25, subdivision 1, is amended to read:

Subdivision 1.

Requirements to pay.

An individual, trust, S corporation, or partnership
must, when prescribed in subdivision 3, paragraph (b), make payments of estimated tax.
For individuals, the term "estimated tax" means the amount the taxpayer estimates is the
sum of the taxes imposed by chapter 290 for the taxable year. For trusts, S corporations,
and partnerships, the term estimated tax means the amount the taxpayer estimates is the
sum of the taxes for the taxable year imposed by chapter 290 and the composite income tax
imposed by section 289A.08, subdivision 7. If the individual is an infant or incompetent
person, the payments must be made by the individual's guardian. If joint payments on
estimated tax are made but a joint return is not made for the taxable year, the estimated tax
for that year may be treated as the estimated tax of either deleted text begin the husband or the wife deleted text end new text begin spouse new text end or
may be divided between 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. 8.

Minnesota Statutes 2016, section 289A.31, subdivision 2, is amended to read:

Subd. 2.

Joint income tax returns.

(a) If a joint income tax return is made by deleted text begin a husband
and wife deleted text end new text begin spouses new text end , the liability for the tax is joint and several. A spouse who qualifies for
relief from a liability attributable to an underpayment under section 6015(b) of the Internal
Revenue Code is relieved of the state income tax liability on the underpayment.

(b) In the case of individuals who were deleted text begin a husband and wife deleted text end new text begin married as determined in
section 7703 of the Internal Revenue Code new text end prior to the dissolution of their marriage or their
legal separation, or prior to the death of one of the individuals, for tax liabilities reported
on a joint or combined return, the liability of each person is limited to the proportion of the
tax due on the return that equals that person's proportion of the total tax due if deleted text begin the husband
and wife deleted text end new text begin each spouse new text end filed separate returns for the taxable year. This provision is effective
only when the commissioner receives written notice of the marriage dissolution, legal
separation, or death of a spouse from the deleted text begin husband or wife deleted text end new text begin surviving spouse new text end . No refund may
be claimed by an ex-spouse, legally separated or widowed spouse for any taxes paid more
than 60 days before receipt by the commissioner of the written notice.

(c) A request for calculation of separate liability pursuant to paragraph (b) for taxes
reported on a return must be made within six years after the due date of the return. For
calculation of separate liability for taxes assessed by the commissioner under section 289A.35
or 289A.37, the request must be made within six years after the date of assessment. The
commissioner is not required to calculate separate liability if the remaining unpaid liability
for which recalculation is requested is $100 or less.

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 2016, section 289A.37, subdivision 6, is amended to read:

Subd. 6.

Order of assessment if joint income tax return.

If a joint income tax return
is filed by deleted text begin a husband and wife deleted text end new text begin spouses new text end , an order of assessment may be a single joint notice.
If the commissioner has been notified by either spouse that that spouse's address has changed
and if that spouse requests it, then, instead of the single joint notice mailed to the last known
address of the deleted text begin husband and wife deleted text end new text begin spouses new text end , a duplicate or original of the joint notice must be
sent to the requesting spouse at the address designated by the requesting spouse. The other
joint notice must be mailed to the other spouse at that spouse's last known address. An
assessment is not invalid for failure to send it to a spouse if the spouse actually receives the
notice in the same period as if it had been mailed to that spouse at the correct address or if
the spouse has failed to provide an address to the commissioner other than the last known
address.

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 2016, section 290.0802, subdivision 2, is amended to read:

Subd. 2.

Subtraction.

(a) A qualified individual is allowed a subtraction from federal
taxable income of the individual's subtraction base amount. The excess of the subtraction
base amount over the taxable net income computed without regard to the subtraction for
the elderly or deleted text begin disabled deleted text end new text begin a person with a disability new text end under section 290.0132, subdivision 5,
may be used to reduce the amount of a lump sum distribution subject to tax under section
290.032.

(b)(1) The initial subtraction base amount equals

(i) $12,000 for a married taxpayer filing a joint return if a spouse is a qualified individual,

(ii) $9,600 for a single taxpayer, and

(iii) $6,000 for a married taxpayer filing a separate federal return.

(2) The qualified individual's initial subtraction base amount, then, must be reduced by
the sum of nontaxable retirement and disability benefits and one-half of the amount of
adjusted gross income in excess of the following thresholds:

(i) $18,000 for a married taxpayer filing a joint return if both spouses are qualified
individuals,

(ii) $14,500 for a single taxpayer or for a married couple filing a joint return if only one
spouse is a qualified individual, and

(iii) $9,000 for a married taxpayer filing a separate federal return.

(3) In the case of a qualified individual who is under the age of 65, the maximum amount
of the subtraction base may not exceed the taxpayer's disability income.

(4) The resulting amount is the subtraction base amount.

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 2016, section 290.0802, subdivision 3, is amended to read:

Subd. 3.

Restrictions; married couples.

Except in the case of deleted text begin a husband and wife deleted text end new text begin
spouses new text end who live apart at all times during the taxable year, if the taxpayer is married at the
close of the taxable year, the subtraction under subdivision 2 is allowable only if the taxpayers
file joint federal and state income tax returns for the taxable 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. 12.

Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended
to read:

Subd. 2.

Definitions.

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

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

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

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

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

(ii) the medical expense deduction;

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

(iv) the impairment-related work expenses of a deleted text begin disabled deleted text end person new text begin with a disability new text end ;

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

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

(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2; and

(6) the amount of addition required by section 290.0131, subdivisions 9 to 11;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;

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

(iv) amounts subtracted from federal taxable income as provided by section 290.0132,
subdivisions 7, 9 to 15, 17, 21, 24, and 26; and

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c).

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

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

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

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

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.

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 2017 Supplement, section 290A.03, subdivision 3, is amended
to read:

Subd. 3.

Income.

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

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

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

(i) all nontaxable income;

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

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

(iv) cash public assistance and relief;

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

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

(vii) workers' compensation;

(viii) nontaxable strike benefits;

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

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

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

(xii) to the extent not included in federal adjusted gross income, distributions received
by the claimant or spouse from a traditional or Roth style retirement account or plan;

(xiii) nontaxable scholarship or fellowship grants;

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

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

(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue
Code; and

(xvii) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code.

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

(b) "Income" does not include:

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

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

(3) to the extent included in federal adjusted gross income, amounts contributed by the
claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed
the retirement base amount reduced by the amount of contributions excluded from federal
adjusted gross income, but not less than zero;

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

(5) relief granted under this chapter;

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

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

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

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

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

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

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

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

(6) if the claimant or claimant's spouse deleted text begin was disabled deleted text end new text begin had a disability new text end or attained the age
of 65 on or before December 31 of the year for which the taxes were levied or rent paid,
the exemption amount.

(d) For purposes of this subdivision, the "exemption amount" means the exemption
amount under section 151(d) of the Internal Revenue Code for the taxable year for which
the income is reported; "retirement base amount" means the deductible amount for the
taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal Revenue
Code, adjusted for inflation as provided in section 219(b)(5)(C) of the Internal Revenue
Code, without regard to whether the claimant or spouse claimed a deduction; and "traditional
or Roth style retirement account or plan" means retirement plans under sections 401, 403,
408, 408A, and 457 of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2016, section 290A.03, subdivision 4, is amended to read:

Subd. 4.

Household.

"Household" means a claimant and an individual related to the
claimant as deleted text begin husband or wife deleted text end new text begin the claimant's spouse new text end who are domiciled in the same homestead.

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 2017 Supplement, section 290A.03, subdivision 8, is amended
to read:

Subd. 8.

Claimant.

(a) "Claimant" means a person, other than a dependent, as defined
under sections 151 and 152 of the Internal Revenue Code disregarding section 152(b)(3)
of the Internal Revenue Code, who filed a claim authorized by this chapter and who was a
resident of this state as provided in chapter 290 during the calendar year for which the claim
for relief was filed.

(b) In the case of a claim relating to rent constituting property taxes, the claimant shall
have resided in a rented or leased unit on which ad valorem taxes or payments made in lieu
of ad valorem taxes, including payments of special assessments imposed in lieu of ad valorem
taxes, are payable at some time during the calendar year covered by the claim.

(c) "Claimant" shall not include a resident of a nursing home, intermediate care facility,
long-term residential facility, or a facility that accepts housing support payments whose
rent constituting property taxes is paid pursuant to the Supplemental Security Income
program under title XVI of the Social Security Act, the Minnesota supplemental aid program
under sections 256D.35 to 256D.54, the medical assistance program pursuant to title XIX
of the Social Security Act, or the housing support program under chapter 256I.

If only a portion of the rent constituting property taxes is paid by these programs, the
resident shall be a claimant for purposes of this chapter, but the refund calculated pursuant
to section 290A.04 shall be multiplied by a fraction, the numerator of which is income as
defined in subdivision 3, paragraphs (a) and (b), reduced by the total amount of income
from the above sources other than vendor payments under the medical assistance program
and the denominator of which is income as defined in subdivision 3, paragraphs (a) and (b),
plus vendor payments under the medical assistance program, to determine the allowable
refund pursuant to this chapter.

(d) Notwithstanding paragraph (c), if the claimant was a resident of the nursing home,
intermediate care facility, long-term residential facility, or facility for which the rent was
paid for the claimant by the housing support program for only a portion of the calendar year
covered by the claim, the claimant may compute rent constituting property taxes by
disregarding the rent constituting property taxes from the nursing home or facility and use
only that amount of rent constituting property taxes or property taxes payable relating to
that portion of the year when the claimant was not in the facility. The claimant's household
income is the income for the entire calendar year covered by the claim.

(e) In the case of a claim for rent constituting property taxes of a part-year Minnesota
resident, the income and rental reflected in this computation shall be for the period of
Minnesota residency only. Any rental expenses paid which may be reflected in arriving at
federal adjusted gross income cannot be utilized for this computation. When two individuals
of a household are able to meet the qualifications for a claimant, they may determine among
them as to who the claimant shall be. If they are unable to agree, the matter shall be referred
to the commissioner of revenue whose decision shall be final. If a homestead property owner
was a part-year Minnesota resident, the income reflected in the computation made pursuant
to section 290A.04 shall be for the entire calendar year, including income not assignable to
Minnesota.

(f) If a homestead is occupied by two or more renters, who are not deleted text begin husband and wife deleted text end new text begin
married to each other new text end , the rent shall be deemed to be paid equally by each, and separate
claims shall be filed by each. The income of each shall be each renter's household income
for purposes of computing the amount of credit to be allowed.

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 2016, section 290A.05, is amended to read:

290A.05 COMBINED HOUSEHOLD INCOME.

If a person occupies a homestead with another person deleted text begin or persons deleted text end not related to the person
as deleted text begin husband and wife deleted text end new text begin the person's spouse new text end , excluding dependents, roomers or boarders on
contract, and has property tax payable with respect to the homestead, the household income
of the claimant or claimants for the purpose of computing the refund allowed by section
290A.04 shall include the total income received by the other persons residing in the
homestead. For purposes of this section, "dependent" includes a parent of the claimant or
spouse who lives in the claimant's homestead and does not have an ownership interest in
the homestead. If a person occupies a homestead with another person or persons not related new text begin
to the person new text end as deleted text begin husband and wife deleted text end new text begin the person's spouse new text end or as dependents, the property tax
payable or rent constituting property tax shall be reduced as follows.

If the other person or persons are residing at the homestead under rental or lease
agreement, the amount of property tax payable or rent constituting property tax shall be that
portion not covered by the rental agreement.

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 2016, section 290A.08, is amended to read:

290A.08 ONE CLAIMANT PER HOUSEHOLD.

Only one claimant per household per year is entitled to relief under this chapter. Payment
of the claim for relief may be made payable to the deleted text begin husband and wife deleted text end new text begin spouses new text end as one claimant.
The commissioner, upon written request, may issue separate checks, to the deleted text begin husband and
wife deleted text end new text begin spouses new text end for one-half of the relief provided the original check has not been issued or
has been returned. Individuals related as deleted text begin husband and wife deleted text end new text begin spouses new text end who were married during
the year may elect to file a joint claim which shall include each spouse's income, rent
constituting property taxes, and property taxes payable. deleted text begin Husbands and wives deleted text end new text begin Spouses new text end who
were married for the entire year and were domiciled in the same household for the entire
year must file a joint claim. The maximum dollar amount allowable for a joint claim shall
not exceed the amount that one person could receive.

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 2016, section 290A.09, is amended to read:

290A.09 PROOF OF CLAIM.

Every claimant shall supply to the commissioner of revenue, in support of the claim,
proof of eligibility under this chapter, including but not limited to amount of rent paid or
property taxes accrued, name and address of owner or managing agent of property rented,
changes in homestead, household membership, household income, size and nature of property
claimed as a homestead.

deleted text begin Disabled deleted text end Persons new text begin with a disability new text end filing claims shall submit proof of disability in the
form and manner as the commissioner may prescribe. The department may require
examination and certification by the claimant's physician or by a physician designated by
the commissioner. The cost of any examination shall be borne by the claimant, unless the
examination proves the disability, in which case the cost of the examination shall be borne
by the commissioner.

A determination of disability of a claimant by the Social Security Administration under
Title II or Title XVI of the Social Security Act shall constitute presumptive proof of disability.

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 2016, section 297A.61, subdivision 18, is amended to read:

Subd. 18.

deleted text begin Disabled deleted text end new text begin Person with a disability new text end .

" deleted text begin Disabled deleted text end new text begin Person with a disability new text end " means
an individual who has a permanent and total disability as defined in section 273.13,
subdivision 22.

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 2017 Supplement, section 297A.67, subdivision 6, is amended
to read:

Subd. 6.

Other exempt meals.

(a) Prepared food, candy, and soft drinks purchased for
and served exclusively to individuals who are 60 years of age or over and their spouses or
to deleted text begin disabled deleted text end persons new text begin with a disability new text end and their spouses by governmental agencies, nonprofit
organizations, or churches, or pursuant to any program funded in whole or in part through
United States Code, title 42, sections 3001 through 3045, wherever delivered, prepared, or
served, are exempt. Taxable food sold through vending machines is not exempt.

(b) Prepared food, candy, and soft drinks purchased for and served exclusively to children
who are less than 14 years of age or deleted text begin disabled deleted text end children new text begin with a disability new text end who are less than
16 years of age and who are attending a child care or early childhood education program,
are exempt if they are:

(1) purchased by a nonprofit child care facility that is exempt under section 297A.70,
subdivision 4, and that primarily serves families with income of 250 percent or less of
federal poverty guidelines; and

(2) prepared at the site of the child care facility.

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 2016, section 297A.67, subdivision 12, is amended to read:

Subd. 12.

Parts and accessories used to make a motor vehicle deleted text begin disabled deleted text end accessible new text begin
to a person with a disability new text end .

Parts, accessories, and labor charges that are used solely to
modify a motor vehicle to make it deleted text begin disabled deleted text end accessible new text begin to persons with a disability new text end are exempt.

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 2016, 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 new text begin individuals new text end or deleted text begin disabled individuals deleted text end new text begin persons with a disability new text end ;

(4) telephone services to the Office of MN.IT Services that are used to provide
telecommunications services through the MN.IT services 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) 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;

(10) 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

(11) purchases of water used directly in providing public safety services by 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.

(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.

(c) For purchases of items listed in paragraph (a), clause (10), 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 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 2017 Supplement, section 297A.70, subdivision 4, is amended
to read:

Subd. 4.

Sales to nonprofit groups.

(a) All sales, except those listed in paragraph (b),
to the following "nonprofit organizations" are exempt:

(1) a corporation, society, association, foundation, or institution organized and operated
exclusively for charitable, religious, or educational purposes if the item purchased is used
in the performance of charitable, religious, or educational functions;

(2) any senior citizen group or association of groups that:

(i) in general limits membership to persons who are either age 55 or older, or deleted text begin physically
disabled deleted text end new text begin persons with a physical disability new text end ;

(ii) is organized and operated exclusively for pleasure, recreation, and other nonprofit
purposes, not including housing, no part of the net earnings of which inures to the benefit
of any private shareholders; and

(iii) is an exempt organization under section 501(c) of the Internal Revenue Code; and

(3) an organization that qualifies for an exemption for memberships under subdivision
12 if the item is purchased and used in the performance of the organization's mission.

For purposes of this subdivision, charitable purpose includes the maintenance of a cemetery
owned by a religious organization.

(b) This exemption does not apply to the following sales:

(1) building, construction, or reconstruction materials purchased by a contractor or a
subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed
maximum price covering both labor and materials for use in the construction, alteration, or
repair of a building or facility;

(2) construction materials purchased by tax-exempt entities or their contractors to be
used in constructing buildings or facilities that will not be used principally by the tax-exempt
entities;

(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2),
and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67,
subdivision 2, except wine purchased by an established religious organization for sacramental
purposes or as allowed under subdivision 9a; and

(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as
provided in paragraph (c).

(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01,
subdivision 11, only if the vehicle is:

(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
passenger automobile, as defined in section 168.002, if the automobile is designed and used
for carrying more than nine persons including the driver; and

(2) 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.

(d) A limited liability company also qualifies for exemption under this subdivision if
(1) it consists of a sole member that would qualify for the exemption, and (2) the items
purchased qualify for the exemption.

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 2016, section 297A.70, subdivision 16, is amended to read:

Subd. 16.

Camp fees.

Fees to camps or other recreation facilities are exempt for:

(1) services primarily for children, adults accompanying children, or persons with
deleted text begin disabilities deleted text end new text begin a disability new text end ; or

(2) educational or religious activities;

deleted text begin and deleted text end new text begin if new text end the camp or facilities are owned and operated by an exempt organization under section
501(c)(3) of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2016, section 297A.71, subdivision 22, is amended to read:

Subd. 22.

Materials used to make residential property deleted text begin disabled deleted text end accessible new text begin to persons
with a disability new text end .

Building materials and equipment sold to, or stored, used, or consumed
by, a nonprofit organization are exempt if:

(1) the materials and equipment are used or incorporated into modifying an existing
residential structure to make it deleted text begin disabled deleted text end accessible new text begin to persons with a disability new text end ; and

(2) the materials and equipment used in the modification would qualify for an exemption
under either subdivision 11 or 12 if made by the current owner of the residence.

For purposes of this subdivision, "nonprofit organization" means any nonprofit
corporation, society, association, foundation, or institution organized and operated exclusively
for charitable, religious, educational, or civic purposes; or a veterans' group exempt from
federal taxation under section 501(c), clause (19), of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

Minnesota Statutes 2017 Supplement, section 297A.75, subdivision 1, is amended
to read:

Subdivision 1.

Tax collected.

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

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

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

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

(4) building materials used in a residence for deleted text begin disabled deleted text end veterans new text begin with a disability new text end exempt
under section 297A.71, subdivision 11;

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

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

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

(8) 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;

(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph
(a), clause (10);

(10) materials, supplies, and equipment for construction or improvement of projects and
facilities under section 297A.71, subdivision 40;

(11) materials, supplies, and equipment for construction, improvement, or expansion
of:

(i) an aerospace defense manufacturing facility exempt under Minnesota Statutes 2014,
section 297A.71, subdivision 42;

(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision
45;

(iii) a research and development facility exempt under Minnesota Statutes 2014, section
297A.71, subdivision 46; and

(iv) an industrial measurement manufacturing and controls facility exempt under
Minnesota Statutes 2014, section 297A.71, subdivision 47;

(12) enterprise information technology equipment and computer software for use in a
qualified data center exempt under section 297A.68, subdivision 42;

(13) materials, supplies, and equipment for qualifying capital projects under section
297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);

(14) items purchased for use in providing critical access dental services exempt under
section 297A.70, subdivision 7, paragraph (c);

(15) items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision
44;

(16) building materials, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivision 49; and

(17) building materials, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivision 50, paragraph (b).

new text begin EFFECTIVE DATE. new text end

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

Sec. 27.

Minnesota Statutes 2016, section 297B.01, subdivision 14, is amended to read:

Subd. 14.

Purchase price.

(a) "Purchase price" means the total consideration valued
in money for a sale, whether paid in money or otherwise. The purchase price excludes the
amount of a manufacturer's rebate paid or payable to the purchaser. If a motor vehicle is
taken in trade as a credit or as part payment on a motor vehicle taxable under this chapter,
the credit or trade-in value allowed by the person selling the motor vehicle shall be deducted
from the total selling price to establish the purchase price of the vehicle being sold and the
trade-in allowance allowed by the seller shall constitute the purchase price of the motor
vehicle accepted as a trade-in. The purchase price in those instances where the motor vehicle
is acquired by gift or by any other transfer for a nominal or no monetary consideration shall
also include the average value of similar motor vehicles, established by standards and guides
as determined by the motor vehicle registrar. The purchase price in those instances where
a motor vehicle is manufactured by a person who registers it under the laws of this state
shall mean the manufactured cost of such motor vehicle and manufactured cost shall mean
the amount expended for materials, labor, and other properly allocable costs of manufacture,
except that in the absence of actual expenditures for the manufacture of a part or all of the
motor vehicle, manufactured costs shall mean the reasonable value of the completed motor
vehicle.

(b) The term "purchase price" shall not include the portion of the value of a motor vehicle
due solely to modifications necessary to make the motor vehicle deleted text begin disability deleted text end accessible new text begin to
persons with a disability new text end .

(c) The term "purchase price" shall not include the transfer of a motor vehicle by way
of gift between deleted text begin a husband and wife deleted text end new text begin spouses new text end or parent and child, or to a nonprofit organization
as provided under subdivision 16, paragraph (c), clause (6), nor shall it include the transfer
of a motor vehicle by a guardian to a ward when there is no monetary consideration and the
title to such vehicle was registered in the name of the guardian, as guardian, only because
the ward was a minor.

(d) The term "purchase price" shall not include the transfer of a motor vehicle as a gift
between a foster parent and foster child. For purposes of this subdivision, a foster relationship
exists, regardless of the age of the child, if (1) a foster parent's home is or was licensed as
a foster family home under Minnesota Rules, parts 2960.3000 to 2960.3340, and (2) the
county verifies that the child was a state ward or in permanent foster care.

(e) There shall not be included in "purchase price" the amount of any tax imposed by
the United States upon or with respect to retail sales whether imposed upon the retailer or
the consumer.

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 2017 Supplement, section 297B.01, subdivision 16, is amended
to read:

Subd. 16.

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, or
transfer-on-death of title by, 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 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 transfer of a motor vehicle by gift between:

(i) spouses;

(ii) parents and a child; or

(iii) grandparents and a grandchild;

(5) the voluntary or involuntary transfer of a motor vehicle between deleted text begin a husband and wife deleted text end new text begin
spouses new text end in a divorce proceeding; or

(6) 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 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. 29.

Laws 2017, First Special Session chapter 1, article 8, section 3, the effective date,
is amended to read:

EFFECTIVE DATE.

This section is effective for new text begin (1) new text end petitions and appeals filed after
June 30, 2017 new text begin , for which notices of entry of order are mailed before July 1, 2018, and (2)
notices of entry of order mailed after June 30, 2018 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

APPENDIX

Repealed Minnesota Statutes: 18-5561

275.29 ABSTRACTS TO COMMISSIONER OF REVENUE.

Not later than March 31, in each year, the county auditor shall make and transmit to the commissioner of revenue, in such form as may be prescribed by the commissioner of revenue, complete abstracts of the tax lists of the county, showing the number of acres of land assessed; its value, including the structures thereon; the value of town and city lots, including structures; the total value of all taxable personal property in the several assessment districts; the aggregate amount of all taxable property in the county, and the total amount of taxes levied therein for state, county, town, and all other purposes for that year.