SF 869

as introduced - 87th Legislature (2011 - 2012) Posted on 02/23/2012 09:23am

A bill for an act
relating to taxation; making technical, administrative, and clarifying changes
to income, property, sales and use, insurance, minerals, gasoline, and other
various taxes and tax-related provisions; modifying tax-forfeited land provisions;
amending Minnesota Statutes 2010, sections 270C.30; 273.1231, subdivision 4;
273.124, subdivisions 1, 14; 282.01, subdivisions 1a, 1c, 1d; 282.014; 282.12;
290.01, subdivisions 19a, 19b; 290.06, subdivision 2c; 290.091, subdivision
2; 290.0922, subdivisions 2, 3; 290.095, subdivision 11; 296A.083, by adding
a subdivision; 296A.18, subdivision 7, by adding a subdivision; 297A.61,
subdivision 3, by adding a subdivision; 297A.71, subdivision 23; 297A.89,
subdivision 2; 297B.08; 297I.15, by adding a subdivision; 298.225, subdivision
1; 298.28, subdivision 2; 469.319, subdivision 5; repealing Minnesota Statutes
2010, sections 272.02, subdivision 34; 273.124, subdivision 10; 281.37;
296A.18, subdivision 9.

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

ARTICLE 1

INCOME TAX

Section 1.

Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to
read:

Subd. 19a.

Additions to federal taxable income.

For individuals, estates, and
trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political
or governmental subdivision, municipality, or governmental agency or instrumentality
of any state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except:

(A) the portion of the exempt-interest dividends exempt from state taxation under
the laws of the United States; and

(B) the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends, including any dividends exempt
under subitem (A), that are paid by the regulated investment company as defined in section
851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
defined in section 851(g) of the Internal Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
government described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;

(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
or accrued within the taxable year under this chapter and the amount of taxes based on
net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
state or to any province or territory of Canada, to the extent allowed as a deduction
under section 63(d) of the Internal Revenue Code, but the addition may not be more
than the amount by which the itemized deductions as allowed under section 63(d) of
the Internal Revenue Code exceeds the amount of the standard deduction as defined in
section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
this paragraph, the disallowance of itemized deductions under section 68 of the Internal
Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed;

(3) the capital gain amount of a lump-sum distribution to which the special tax under
section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income paid to any other state or any province or territory
of Canada, to the extent allowed as a deduction in determining federal adjusted gross
income. For the purpose of this paragraph, income taxes do not include the taxes imposed
by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;

(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
other than expenses or interest used in computing net interest income for the subtraction
allowed under subdivision 19b, clause (1);

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

(7) 80 percent of the depreciation deduction allowed under section 168(k) of the
Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
in the taxable year generates a deduction for depreciation under section 168(k) and the
activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section 168(k) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k) is allowed;

(8) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

(9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(10) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;

(11) the amount of expenses disallowed under section 290.10, subdivision 2;

(12) the amount deducted for qualified tuition and related expenses under section
222 of the Internal Revenue Code, to the extent deducted from gross income;

(13) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
from gross income;

(14) the additional standard deduction for property taxes payable that is allowable
under section 63(c)(1)(C) of the Internal Revenue Code;

(15) the additional standard deduction for qualified motor vehicle sales taxes
allowable under section 63(c)(1)(E) of the Internal Revenue Code;

(16) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code; deleted text begin and
deleted text end

(17) the amount of unemployment compensation exempt from tax under section
85(c) of the Internal Revenue Code new text begin ; and
new text end

new text begin (18) changes to federal taxable income attributable to a net operating loss that the
taxpayer elected to carry back for more than two years for federal purposes but for which
the losses can be carried back for only two years under section 290.095, subdivision
11, paragraph (c) new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2010, section 290.01, subdivision 19b, is amended to read:

Subd. 19b.

Subtractions from federal taxable income.

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

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

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

(3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. No
deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
the qualifying child's vehicle to provide such transportation for a qualifying child. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

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

(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
under the provisions of Public Law 109-1 and Public Law 111-126;

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

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

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

(10) to the extent included in federal taxable income, the amount of compensation
paid to members of the Minnesota National Guard or other reserve components of the
United States military for active service deleted text begin performed in Minnesota deleted text end , excluding compensation
for services performed under the Active Guard Reserve (AGR) program. For purposes of
this clause, "active service" means (i) state active service as defined in section 190.05,
subdivision 5a, clause (1); new text begin or new text end (ii) federally funded state active service as defined in
section 190.05, subdivision 5b deleted text begin ; or (iii) federal active service as defined in section 190.05,
subdivision 5c deleted text end , but "active service" excludes service performed in accordance with section
190.08, subdivision 3;

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

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

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

(14) to the extent included in new text begin the new text end federal taxable income new text begin of a nonresident of
Minnesota new text end , compensation paid to a service member as defined in United States Code, title
10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
Act, Public Law 108-189, section 101(2);

(15) international economic development zone income as provided under section
469.325;

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

(17) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under section 290.01, subdivision 19a, clause (16) new text begin ; and
new text end

new text begin (18) the amount of the net operating loss allowed under section 290.095, subdivision
11, paragraph (c) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin The changes to clauses (10), (11), and (14) are effective the
day following final enactment. Clause (18) is effective retroactively for losses generated
in taxable years beginning after December 31, 2007.
new text end

Sec. 3.

Minnesota Statutes 2010, section 290.06, subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

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

(1) On the first $25,680, 5.35 percent;

(2) On all over $25,680, but not over $102,030, 7.05 percent;

(3) On all over $102,030, 7.85 percent.

Married individuals filing separate returns, estates, and trusts must compute their
income tax by applying the above rates to their taxable income, except that the income
brackets will be one-half of the above amounts.

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

(1) On the first $17,570, 5.35 percent;

(2) On all over $17,570, but not over $57,710, 7.05 percent;

(3) On all over $57,710, 7.85 percent.

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

(1) On the first $21,630, 5.35 percent;

(2) On all over $21,630, but not over $86,910, 7.05 percent;

(3) On all over $86,910, 7.85 percent.

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

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

(1) the numerator is the individual's Minnesota source federal adjusted gross income
as defined in section 62 of the Internal Revenue Code and increased by the additions
required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12),
(13), new text begin and new text end (16) deleted text begin , and (17) deleted text end new text begin to (18) new text end , and reduced by the Minnesota assignable portion of
the subtraction for United States government interest under section 290.01, subdivision
19b, clause (1), and the subtractions under section 290.01, subdivision 19b, clauses (8),
(9), (13), (14), (15), deleted text begin and deleted text end (17) new text begin , and (18) 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 of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), new text begin and new text end (16) deleted text begin , and
(17) deleted text end new text begin to (18) new text end , and reduced by the amounts specified in section 290.01, subdivision 19b,
clauses (1), (8), (9), (13), (14), (15), deleted text begin and deleted text end (17) new text begin , and (18) new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2010, 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 disabled person;

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

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

(5) to the extent not included in federal alternative minimum taxable income, the
amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and

(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
to (9), (12), (13), new text begin and new text end (16) deleted text begin , and (17) deleted text end new text begin to (18) new text end ;

less the sum of the amounts determined under the following:

(1) interest income as defined in section 290.01, subdivision 19b, clause (1);

(2) an overpayment of state income tax as provided by section 290.01, subdivision
19b, clause (2), to the extent included in federal alternative minimum taxable income;

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

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b, clauses (6), (8) to (15), and (17) new text begin ; and
new text end

new text begin (5) the amount of the net operating loss allowed under section 290.095, subdivision
11, paragraph (c) new text end .

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

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

(c) "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 6.4 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 retroactively for losses generated in
taxable years beginning after December 31, 2007.
new text end

Sec. 5.

Minnesota Statutes 2010, section 290.0922, subdivision 2, is amended to read:

Subd. 2.

Exemptions.

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

(1) corporations exempt from tax under section 290.05;

(2) real estate investment trusts;

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

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

(5) town and farmers' mutual insurance companies;

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

(7) deleted text begin an entity deleted text end new text begin a qualified business as defined under section 469.310, subdivision 11 new text end ,
if for the taxable year all of its property is located in a job opportunity building zone
designated under section 469.314 and all of its payroll is a job opportunity building zone
payroll under section 469.310; and

(8) an entity, if for the taxable year all of its property is located in an international
economic development zone designated under section 469.322, and all of its payroll is
international economic development zone payroll under section 469.321. The exemption
under this clause applies to taxable years beginning during the duration of the international
economic development zone.

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2010, section 290.0922, subdivision 3, is amended to read:

Subd. 3.

Definitions.

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

(b) "Minnesota property" means total Minnesota tangible property as provided in
section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota,
but does not include: (1) new text begin the new text end property new text begin of a qualified business as defined under section
469.310, subdivision 11, that is new text end located in a job opportunity building zone designated
under section 469.314, (2) property of a qualified business located in a biotechnology and
health sciences industry zone designated under section 469.334, or (3) for taxable years
beginning during the duration of the zone, property of a qualified business located in the
international economic development zone designated under section 469.322. Intangible
property shall not be included in Minnesota property for purposes of this section.
Taxpayers who do not utilize tangible property to apportion income shall nevertheless
include Minnesota property for purposes of this section. On a return for a short taxable
year, the amount of Minnesota property owned, as determined under section 290.191,
shall be included in Minnesota property based on a fraction in which the numerator is the
number of days in the short taxable year and the denominator is 365.

(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section
290.191, subdivision 12, but does not include: (1) new text begin the new text end job opportunity building zone
deleted text begin payrolls deleted text end new text begin payroll new text end under section 469.310, subdivision 8, new text begin of a qualified business as defined
under section 469.310, subdivision 11, new text end (2) biotechnology and health sciences industry
zone payrolls under section 469.330, subdivision 8, or (3) for taxable years beginning
during the duration of the zone, international economic development zone payrolls under
section 469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income
shall nevertheless include Minnesota payrolls for purposes of this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2010, section 290.095, subdivision 11, is amended to read:

Subd. 11.

Carryback or carryover adjustments.

(a) Except as provided in
paragraph (c), for individuals, estates, and trusts the amount of a net operating loss
that may be carried back or carried over shall be the same dollar amount allowable in
the determination of federal taxable income, provided that, notwithstanding any other
provision, estates and trusts must apply the following adjustments to the amount of the net
operating loss that may be carried back or carried over:

(1) Nonassignable income or losses as required by section 290.17.

(2) Deductions not allocable to Minnesota under section 290.17.

(b) The net operating loss carryback or carryover applied as a deduction in the taxable
year to which the net operating loss is carried back or carried over shall be equal to the
net operating loss carryback or carryover applied in the taxable year in arriving at federal
taxable income provided that trusts and estates must apply the following modifications:

(1) Increase the amount of carryback or carryover applied in the taxable year by
the amount of losses and interest, taxes and other expenses not assignable or allowable
to Minnesota incurred in the taxable year.

(2) Decrease the amount of carryback or carryover applied in the taxable year by
the amount of income not assignable to Minnesota earned in the taxable year. For estates
and trusts, the net operating loss carryback or carryover to the next consecutive taxable
year shall be the net operating loss carryback or carryover as calculated in clause (b)
less the amount applied in the earlier taxable year(s). No additional net operating loss
carryback or carryover shall be allowed to estates and trusts if the entire amount has been
used to offset Minnesota income in a year earlier than was possible on the federal return.
However, if a net operating loss carryback or carryover was allowed to offset federal
income in a year earlier than was possible on the Minnesota return, an estate or trust
shall still be allowed to offset Minnesota income but only if the loss was assignable to
Minnesota in the year the loss occurred.

(c) This paragraph does not apply to eligible small businesses that make a valid
election to carry back their losses for federal purposes under section 172(b)(1)(H) of the
Internal Revenue Code as amended through March 31, 2009.

(1) A net operating loss of an individual, estate, or trust that is allowed under this
subdivision and for which the taxpayer elects to carry back for more than two years under
section 172(b)(1)(H) of the Internal Revenue Code is a net operating loss carryback to
each of the two taxable years preceding the loss, and unused portions may be carried
forward for 20 taxable years after the loss.

(2) The entire amount of the net operating loss for any taxable year must be carried
to the earliest of the taxable years to which the loss may be carried. The portion of the loss
which may be carried to each of the other taxable years is the excess, if any, of the amount
of the loss over new text begin the greater of new text end the taxable net income new text begin or alternative minimum taxable
income new text end for each of the taxable years to which the loss may be carried.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 2

PROPERTY TAX

Section 1.

Minnesota Statutes 2010, section 273.1231, subdivision 4, is amended to
read:

Subd. 4.

Homestead property.

"Homestead property" means a homestead dwelling
that is classified as class 1a, 1b, deleted text begin 1c, deleted text end or 2a property or a manufactured home or sectional
home used as a homestead and taxed pursuant to section 273.125, subdivision 8, paragraph
(b), (c), or (d).

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 2010, section 273.124, subdivision 1, is amended to read:

Subdivision 1.

General rule.

(a) Residential real estate that is occupied and used
for the purposes of a homestead by its owner, who must be a Minnesota resident, is
a residential homestead.

Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and
used as a homestead by its owner, who must be a Minnesota resident, is an agricultural
homestead.

Dates for establishment of a homestead and homestead treatment provided to
particular types of property are as provided in this section.

Property held by a trustee under a trust is eligible for homestead classification if the
requirements under this chapter are satisfied.

The assessor shall require proof, as provided in subdivision 13, of the facts upon
which classification as a homestead may be determined. Notwithstanding any other law,
the assessor may at any time require a homestead application to be filed in order to verify
that any property classified as a homestead continues to be eligible for homestead status.
Notwithstanding any other law to the contrary, the Department of Revenue may, upon
request from an assessor, verify whether an individual who is requesting or receiving
homestead classification has filed a Minnesota income tax return as a resident for the most
recent taxable year for which the information is available.

When there is a name change or a transfer of homestead property, the assessor may
reclassify the property in the next assessment unless a homestead application is filed to
verify that the property continues to qualify for homestead classification.

(b) For purposes of this section, homestead property shall include property which
is used for purposes of the homestead but is separated from the homestead by a road,
street, lot, waterway, or other similar intervening property. The term "used for purposes
of the homestead" shall include but not be limited to uses for gardens, garages, or other
outbuildings commonly associated with a homestead, but shall not include vacant land
held primarily for future development. In order to receive homestead treatment for
the noncontiguous property, the owner must use the property for the purposes of the
homestead, and must apply to the assessor, both by the deadlines given in subdivision
9. After initial qualification for the homestead treatment, additional applications for
subsequent years are not required.

(c) Residential real estate that is occupied and used for purposes of a homestead by a
relative of the owner is a homestead but only to the extent of the homestead treatment
that would be provided if the related owner occupied the property. For purposes of this
paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild,
grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship
may be by blood or marriage. Property that has been classified as seasonal residential
recreational property at any time during which it has been owned by the current owner or
spouse of the current owner will not be reclassified as a homestead unless it is occupied as
a homestead by the owner; this prohibition also applies to property that, in the absence of
this paragraph, would have been classified as seasonal residential recreational property at
the time when the residence was constructed. Neither the related occupant nor the owner
of the property may claim a property tax refund under chapter 290A for a homestead
occupied by a relative. In the case of a residence located on agricultural land, only the
house, garage, and immediately surrounding one acre of land shall be classified as a
homestead under this paragraph, except as provided in paragraph (d).

(d) Agricultural property that is occupied and used for purposes of a homestead by
a relative of the owner, is a homestead, only to the extent of the homestead treatment
that would be provided if the related owner occupied the property, and only if all of the
following criteria are met:

(1) the relative who is occupying the agricultural property is a deleted text begin son, daughter, brother,
sister, grandson, granddaughter, father, or mother deleted text end new text begin grandchild, child, sibling, or parent new text end of
the owner of the agricultural property or deleted text begin a son, daughter, brother, sister, grandson, or
granddaughter deleted text end of the spouse of the owner deleted text begin of the agricultural property deleted text end ;

(2) the owner of the agricultural property must be a Minnesota resident;

(3) the owner of the agricultural property must not receive homestead treatment on
any other agricultural property in Minnesota; and

(4) the owner of the agricultural property is limited to only one agricultural
homestead per family under this paragraph.

Neither the related occupant nor the owner of the property may claim a property
tax refund under chapter 290A for a homestead occupied by a relative qualifying under
this paragraph. For purposes of this paragraph, "agricultural property" means the house,
garage, other farm buildings and structures, and agricultural land.

Application must be made to the assessor by the owner of the agricultural property to
receive homestead benefits under this paragraph. The assessor may require the necessary
proof that the requirements under this paragraph have been met.

(e) In the case of property owned by a property owner who is married, the assessor
must not deny homestead treatment in whole or in part if only one of the spouses occupies
the property and the other spouse is absent due to: (1) marriage dissolution proceedings,
(2) legal separation, (3) employment or self-employment in another location, or (4) other
personal circumstances causing the spouses to live separately, not including an intent to
obtain two homestead classifications for property tax purposes. To qualify under clause
(3), the spouse's place of employment or self-employment must be at least 50 miles distant
from the other spouse's place of employment, and the homesteads must be at least 50 miles
distant from each other. deleted text begin Homestead treatment, in whole or in part, shall not be denied to
the owner's spouse who previously occupied the residence with the owner if the absence
of the owner is due to one of the exceptions provided in this paragraph.
deleted text end

(f) The assessor must not deny homestead treatment in whole or in part if:

(1) in the case of a property owner who is not married, the owner is absent due to
residence in a nursing home, boarding care facility, or an elderly assisted living facility
property as defined in section 273.13, subdivision 25a, and the property is not otherwise
occupied; or

(2) in the case of a property owner who is married, the owner or the owner's spouse
or both are absent due to residence in a nursing home, boarding care facility, or an elderly
assisted living facility property as defined in section 273.13, subdivision 25a, and the
property is not occupied or is occupied only by the owner's spouse.

(g) If an individual is purchasing property with the intent of claiming it as a
homestead and is required by the terms of the financing agreement to have a relative
shown on the deed as a co-owner, the assessor shall allow a full homestead classification.
This provision only applies to first-time purchasers, whether married or single, or to a
person who had previously been married and is purchasing as a single individual for the
first time. The application for homestead benefits must be on a form prescribed by the
commissioner and must contain the data necessary for the assessor to determine if full
homestead benefits are warranted.

(h) If residential or agricultural real estate is occupied and used for purposes of a
homestead by a child of a deceased owner and the property is subject to jurisdiction of
probate court, the child shall receive relative homestead classification under paragraph (c)
or (d) to the same extent they would be entitled to it if the owner was still living, until
the probate is completed. For purposes of this paragraph, "child" includes a relationship
by blood or by marriage.

(i) If a single-family home, duplex, or triplex classified as either residential
homestead or agricultural homestead is also used to provide licensed child care, the
portion of the property used for licensed child care must be classified as a part of the
homestead property.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter.
new text end

Sec. 3.

Minnesota Statutes 2010, section 273.124, subdivision 14, is amended to read:

Subd. 14.

Agricultural homesteads; special provisions.

(a) Real estate of less than
ten acres that is the homestead of its owner must be classified as class 2a under section
273.13, subdivision 23, paragraph (a), if:

(1) the parcel on which the house is located is contiguous on at least two sides to (i)
agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
Service, or (iii) land administered by the Department of Natural Resources on which in
lieu taxes are paid under sections 477A.11 to 477A.14;

(2) its owner also owns a noncontiguous parcel of agricultural land that is at least
20 acres;

(3) the noncontiguous land is located not farther than four townships or cities, or a
combination of townships or cities from the homestead; and

(4) the agricultural use value of the noncontiguous land and farm buildings is equal
to at least 50 percent of the market value of the house, garage, and one acre of land.

Homesteads initially classified as class 2a under the provisions of this paragraph shall
remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
properties, as long as the homestead remains under the same ownership, the owner owns a
noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
value qualifies under clause (4). Homestead classification under this paragraph is limited
to property that qualified under this paragraph for the 1998 assessment.

(b)(i) Agricultural property shall be classified as the owner's homestead, to the same
extent as other agricultural homestead property, if all of the following criteria are met:

(1) the new text begin agricultural new text end property consists of at least 40 acres including undivided
government lots and correctional 40's;

(2) the owner, the owner's spouse, deleted text begin the son or daughter of the owner or owner's
spouse, the brother or sister of the owner or owner's spouse, or the grandson or
granddaughter deleted text end new text begin or a grandchild, child, sibling, or parent new text end of the owner or new text begin of new text end the owner's
spouse, is actively farming the agricultural property, either on the person's own behalf
as an individual or on behalf of a partnership operating a family farm, family farm
corporation, joint family farm venture, or limited liability company of which the person is
a partner, shareholder, or member;

(3) both the owner of the agricultural property and the person who is actively
farming the agricultural property under clause (2), are Minnesota residents;

(4) neither the owner nor the spouse of the owner claims another agricultural
homestead in Minnesota; and

(5) neither the owner nor the person actively farming the new text begin agricultural new text end property lives
farther than four townships or cities, or a combination of four townships or cities, from the
agricultural property, except that if the owner or the owner's spouse is required to live in
employer-provided housing, the owner or owner's spouse, whichever is actively farming
the agricultural property, may live more than four townships or cities, or combination of
four townships or cities from the agricultural property.

The relationship under this paragraph may be either by blood or marriage.

(ii) deleted text begin Real deleted text end new text begin Agricultural new text end property held by a trustee under a trust is eligible for
agricultural homestead classification under this paragraph if the qualifications in clause (i)
are met, except that "owner" means the grantor of the trust.

(iii) Property containing the residence of an owner who owns qualified property
under clause (i) shall be classified as part of the owner's agricultural homestead, if that
property is also used for noncommercial storage or drying of agricultural crops.

new text begin (iv) As used in this paragraph, "agricultural property" means class 2a property and
any class 2b property that is contiguous to and under the same ownership as the class 2a
property.
new text end

(c) Noncontiguous land shall be included as part of a homestead under section
273.13, subdivision 23, paragraph (a), only if the homestead is classified as class 2a
and the detached land is located in the same township or city, or not farther than four
townships or cities or combination thereof from the homestead. Any taxpayer of these
noncontiguous lands must notify the county assessor that the noncontiguous land is part of
the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer
must also notify the assessor of the other county.

(d) Agricultural land used for purposes of a homestead and actively farmed by a
person holding a vested remainder interest in it must be classified as a homestead under
section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a,
any other dwellings on the land used for purposes of a homestead by persons holding
vested remainder interests who are actively engaged in farming the property, and up to
one acre of the land surrounding each homestead and reasonably necessary for the use of
the dwelling as a home, must also be assessed class 2a.

(e) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain
classified as agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the April 1997 floods;

(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman,
or Wilkin;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 1997 assessment year and continue to be used
for agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 30
miles of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 1997
floods, and the owner furnishes the assessor any information deemed necessary by the
assessor in verifying the change in dwelling. Further notifications to the assessor are not
required if the property continues to meet all the requirements in this paragraph and any
dwellings on the agricultural land remain uninhabited.

(f) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain
classified agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by a March 29, 1998, tornado;

(2) the property is located in the county of Blue Earth, Brown, Cottonwood,
LeSueur, Nicollet, Nobles, or Rice;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 1998 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to a March 29,
1998, tornado, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
owner must notify the assessor by December 1, 1998. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph
and any dwellings on the agricultural land remain uninhabited.

(g) Agricultural property of a family farm corporation, joint family farm venture,
family farm limited liability company, or partnership operating a family farm as described
under subdivision 8 shall be classified homestead, to the same extent as other agricultural
homestead property, if all of the following criteria are met:

(1) the property consists of at least 40 acres including undivided government lots
and correctional 40's;

(2) a shareholder, member, or partner of that entity is actively farming the
agricultural property;

(3) that shareholder, member, or partner who is actively farming the agricultural
property is a Minnesota resident;

(4) neither that shareholder, member, or partner, nor the spouse of that shareholder,
member, or partner claims another agricultural homestead in Minnesota; and

(5) that shareholder, member, or partner does not live farther than four townships or
cities, or a combination of four townships or cities, from the agricultural property.

Homestead treatment applies under this paragraph for property leased to a family
farm corporation, joint farm venture, limited liability company, or partnership operating a
family farm if legal title to the property is in the name of an individual who is a member,
shareholder, or partner in the entity.

(h) To be eligible for the special agricultural homestead under this subdivision, an
initial full application must be submitted to the county assessor where the property is
located. Owners and the persons who are actively farming the property shall be required
to complete only a one-page abbreviated version of the application in each subsequent
year provided that none of the following items have changed since the initial application:

(1) the day-to-day operation, administration, and financial risks remain the same;

(2) the owners and the persons actively farming the property continue to live within
the four townships or city criteria and are Minnesota residents;

(3) the same operator of the agricultural property is listed with the Farm Service
Agency;

(4) a Schedule F or equivalent income tax form was filed for the most recent year;

(5) the property's acreage is unchanged; and

(6) none of the property's acres have been enrolled in a federal or state farm program
since the initial application.

The owners and any persons who are actively farming the property must include
the appropriate Social Security numbers, and sign and date the application. If any of the
specified information has changed since the full application was filed, the owner must
notify the assessor, and must complete a new application to determine if the property
continues to qualify for the special agricultural homestead. The commissioner of revenue
shall prepare a standard reapplication form for use by the assessors.

(i) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain
classified agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by the August 2007 floods;

(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted,
Steele, Wabasha, or Winona;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 2007 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the August
2007 floods, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the
owner must notify the assessor by December 1, 2008. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph
and any dwellings on the agricultural land remain uninhabited.

(j) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain
classified as agricultural homesteads for deleted text begin subsequent assessments deleted text end new text begin taxes payable in 2011
and 2012 new text end if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the March 2009 floods;

(2) the property is located in the county of Marshall;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 2008 assessment year and continue to be used
for agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 50
miles of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 2009
floods, and the owner furnishes the assessor any information deemed necessary by the
assessor in verifying the change in dwelling. Further notifications to the assessor are not
required if the property continues to meet all the requirements in this paragraph and any
dwellings on the agricultural land remain uninhabited.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
except that the change in paragraph (b), clause (i), item (2), is effective for taxes payable
in 2012 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2010, section 282.01, subdivision 1a, is amended to read:

Subd. 1a.

Conveyance to public entities.

(a) Upon written request from a state
agency or a governmental subdivision of the state, a parcel of unsold tax-forfeited land
must be withheld from sale or lease to others for a maximum of six months. The request
must be submitted to the county auditor. Upon receipt, the county auditor must withhold
the parcel from sale or lease to any other party for six months, and must confirm the
starting date of the six-month withholding period to the requesting agency or subdivision.
If the request is from a governmental subdivision of the state, the governmental
subdivision must pay the maintenance costs incurred by the county during the period the
parcel is withheld. The county board may approve a sale or conveyance to the requesting
party during the withholding period. A conveyance of the property to the requesting
party terminates the withholding period.

A governmental subdivision of the state must not make, and a county auditor must
not act upon, a second request to withhold a parcel from sale or lease within 18 months
of a previous request for that parcel. A county may reject a request made under this
paragraph if the request is made more than 30 days after the county has given notice to the
requesting state agency or governmental subdivision of the state that the county intends to
sell or otherwise dispose of the property.

(b) Nonconservation tax-forfeited lands may be sold by the county board, for
their market value as determined by the county board, to an organized or incorporated
governmental subdivision of the state for any public purpose for which the subdivision is
authorized to acquire property. When the term "market value" is used in this section, it
means an estimate of the full and actual market value of the parcel as determined by the
county board, but in making this determination, the board and the persons employed by or
under contract with the board in order to perform, conduct, or assist in the determination,
are exempt from the licensure requirements of chapter 82B.

(c) Nonconservation tax-forfeited lands may be released from the trust in favor of
the taxing districts on application to the county board by a state agency for an authorized
use at not less than their market value as determined by the county board.

(d) Nonconservation tax-forfeited lands may be sold by the county board to an
organized or incorporated governmental subdivision of the state or state agency for less
than their market value if:

(1) the county board determines that a sale at a reduced price is in the public interest
because a reduced price is necessary to provide an incentive to correct the blighted
conditions that make the lands undesirable in the open market, or the reduced price will
lead to the development of affordable housing; and

(2) the governmental subdivision or state agency has documented its specific plans
for correcting the blighted conditions or developing affordable housing, and the specific
law or laws that empower it to acquire real property in furtherance of the plans.

If the sale under this paragraph is to a governmental subdivision of the state, the
commissioner of revenue must convey the property on behalf of the state by quit claim
deed. If the sale under this paragraph is to a state agency, the commissioner must issue a
conveyance document that releases the property from the trust in favor of the taxing
districts.

(e) Nonconservation tax-forfeited land held in trust in favor of the taxing districts
may be conveyed by the commissioner of revenue in the name of the state to a
governmental subdivision for an authorized public use, if an application is submitted to the
commissioner which includes a statement of facts as to the use to be made of the tract and
the favorable recommendation of the county board. For the purposes of this paragraph,
"authorized public use" means a use that allows an indefinite segment of the public to
physically use and enjoy the property in numbers appropriate to its size and use, or is for a
public service facility. Authorized public uses as defined in this paragraph are limited to:

(1) a road, or right-of-way for a road;

(2) a park that is both available to, and accessible by, the public that contains
deleted text begin amenities deleted text end new text begin improvements new text end such as campgrounds, playgrounds, athletic fields, trails, or
shelters;

(3) trails for walking, bicycling, snowmobiling, or other recreational purposes, along
with a reasonable amount of surrounding land maintained in its natural state;

(4) transit facilities for buses, light rail transit, commuter rail or passenger rail,
including transit ways, park-and-ride lots, transit stations, maintenance and garage
facilities, and other facilities related to a public transit system;

(5) public beaches or boat launches;

(6) public parking;

(7) civic recreation or conference facilities; and

(8) public service facilities such as fire halls, police stations, lift stations, water
towers, sanitation facilities, water treatment facilities, and administrative offices.

No monetary compensation or consideration is required for the conveyance, except as
provided in subdivision 1g, but the conveyance is subject to the conditions provided in
law, including, but not limited to, the reversion provisions of subdivisions 1c and 1d.

(f) The commissioner of revenue shall convey a parcel of nonconservation
tax-forfeited land to a local governmental subdivision of the state by quit claim deed
on behalf of the state upon the favorable recommendation of the county board if the
governmental subdivision has certified to the board that prior to forfeiture the subdivision
was entitled to the parcel under a written development agreement or instrument, but
the conveyance failed to occur prior to forfeiture. No compensation or consideration is
required for, and no conditions attach to, the conveyance.

(g) The commissioner of revenue shall convey a parcel of nonconservation
tax-forfeited land to the association of a common interest community by quit claim deed
upon the favorable recommendation of the county board if the association certifies to the
board that prior to forfeiture the association was entitled to the parcel under a written
agreement, but the conveyance failed to occur prior to forfeiture. No compensation or
consideration is required for, and no conditions attach to, the conveyance.

(h) Conservation tax-forfeited land may be sold to a governmental subdivision of
the state for less than its market value for either: (1) creation or preservation of wetlands;
(2) drainage or storage of storm water under a storm water management plan; or (3)
preservation, or restoration and preservation, of the land in its natural state. The deed must
contain a restrictive covenant limiting the use of the land to one of these purposes for
30 years or until the property is reconveyed back to the state in trust. At any time, the
governmental subdivision may reconvey the property to the state in trust for the taxing
districts. The deed of reconveyance is subject to approval by the commissioner of revenue.
No part of a purchase price determined under this paragraph shall be refunded upon a
reconveyance, but the amount paid for a conveyance under this paragraph may be taken
into account by the county board when setting the terms of a future sale of the same
property to the same governmental subdivision under paragraph (b) or (d). If the lands
are unplatted and located outside of an incorporated municipality and the commissioner
of natural resources determines there is a mineral use potential, the sale is subject to the
approval of the commissioner of natural resources.

(i) A park and recreation board in a city of the first class is a governmental
subdivision for the purposes of this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2010, section 282.01, subdivision 1c, is amended to read:

Subd. 1c.

Deed of conveyance; form; approvals.

The deed deleted text begin of conveyance for deleted text end new text begin
conveying new text end property deleted text begin conveyed deleted text end for an authorized public use under the authorities in
deleted text begin subdivision 1a, paragraph (e) deleted text end new text begin this section new text end , must be on a form approved by the attorney
general and must be conditioned on continued use new text begin of the property new text end for the purpose stated in
the application as provided in this section. deleted text begin These deleted text end new text begin All new text end deeds new text begin conveying property for an
authorized public use, regardless of when executed, new text end are conditional use deeds that convey
a defeasible estate. Reversion of the estate occurs by operation of law and without the
requirement for any affirmative act by or on behalf of the state when there is a failure to
put the property to the approved authorized public use for which it was conveyed, or an
abandonment of that use, except as provided in subdivision 1d.

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 2010, section 282.01, subdivision 1d, is amended to read:

Subd. 1d.

Reverter for failure to use; conveyance to state.

(a) deleted text begin If deleted text end After three years
from the date of deleted text begin the deleted text end new text begin any new text end conveyance new text begin of tax-forfeited land to new text end a governmental subdivision
deleted text begin to which tax-forfeited land has been conveyed deleted text end for an authorized public use as provided
in deleted text begin subdivision 1a, paragraph (e), fails deleted text end new text begin this section, regardless of when the deed for the
authorized public use was executed, if the governmental subdivision has failed new text end to put the
land to that use, or abandons that use, the governing body of the subdivision must: (1)
with the approval of the county board, purchase the property for an authorized public
purpose at the present market value as determined by the county board, or (2) authorize
the proper officers to convey the land, or the part of the land not required for an authorized
public use, to the state of Minnesota in trust for the taxing districts. If the governing
body purchases the property under clause (1), the commissioner of revenue shall, upon
proper application submitted by the county auditor, convey the property on behalf of the
state by quit claim deed to the subdivision free of a use restriction and the possibility of
reversion or defeasement. If the governing body decides to reconvey the property to the
state under this clause, the officers shall execute a deed of conveyance immediately. The
conveyance is subject to the approval of the commissioner and its form must be approved
by the attorney general. For deleted text begin the purposes of this paragraph deleted text end new text begin 15 years from the date of
the conveyance new text end , there is no failure to put the land to the authorized public use and no
abandonment of that use if a formal plan of the governmental subdivision, including, but
not limited to, a comprehensive plan or land use plan deleted text begin that deleted text end new text begin , new text end shows an intended future use
of the land for the authorized public use.

(b) Property held by a governmental subdivision of the state under a conditional use
deed executed under deleted text begin subdivision 1a, paragraph (e), deleted text end new text begin this section new text end by the commissioner of
revenue on or after January 1, 2007, may be acquired by that governmental subdivision
after 15 years from the date of the conveyance if the commissioner determines upon
written application from the subdivision that the subdivision has in fact put the property
to the authorized public use for which it was conveyed, and the subdivision has made a
finding that it has no current plans to change the use of the lands. Prior to conveying the
property, the commissioner shall inquire whether the county board where the land is
located objects to a conveyance of the property to the subdivision without conditions and
without further act by or obligation of the subdivision. If the county does not object within
60 days, and the commissioner makes a favorable determination, the commissioner shall
issue a quit claim deed on behalf of the state unconditionally conveying the property to the
governmental subdivision. For purposes of this paragraph, demonstration of an intended
future use for the authorized public use in a formal plan of the governmental subdivision
does not constitute use for that authorized public use.

(c) Property held by a governmental subdivision of the state under a conditional use
deed executed under deleted text begin subdivision 1a, paragraph (e), deleted text end new text begin this section new text end by the commissioner of
revenue before January 1, 2007, is released from the use restriction and possibility of
reversion on January 1, 2022, if the county board records a resolution describing the
land and citing this paragraph. The county board may authorize the county treasurer
to deduct the amount of the recording fees from future settlements of property taxes
to the subdivision.

(d) deleted text begin All deleted text end Property conveyed under a conditional use deed executed under deleted text begin subdivision
1a, paragraph (e), deleted text end new text begin this section new text end by the commissioner of revenue new text begin , regardless of when the
deed for the authorized public use was executed, new text end is released from the use restriction and
reverter, and any use restriction or reverter for which no declaration of reversion has been
recorded with the county recorder or registrar of titles, as appropriate, is nullified on the
later of: (1) January 1, 2015; (2) 30 years from the date the deed was acknowledged; or
(3) final resolution of an appeal to district court under subdivision 1e, if a lis pendens
related to the appeal is recorded in the office of the county recorder or registrar of titles,
as appropriate, prior to January 1, 2015.

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 2010, section 282.014, is amended to read:

282.014 COMPLETION OF SALE, FEE, CONVEYANCE RECORDED.

new text begin (a) new text end Upon compliance by the purchaser with the provisions of this chapter and with
the terms and conditions of the sale, and upon full payment for the land, plus a $25 fee
in addition to the sale price, the sale shall be complete and a conveyance of the land
shall be issued to the purchaser as provided by the appropriate statutes according to the
status of the land upon forfeiture.

The conveyance must be forwarded to the county auditor who shall have the
conveyance recorded before issuing it to the purchaser.

new text begin (b) In order for the commissioner of revenue to issue a conveyance of tax-forfeited
land under any provision of this chapter other than section 282.01, subdivision 1a,
paragraph (e), or 282.33, and that is not covered by paragraph (a), the grantee must pay
the fee provided in paragraph (a).
new text end

new text begin The conveyance must be forwarded to the county auditor who shall have the
conveyance recorded before issuing it to the grantee.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for deeds executed by the
commissioner of revenue after June 30, 2011.
new text end

Sec. 8.

Minnesota Statutes 2010, section 282.12, is amended to read:

282.12 ALL MINERALS RESERVED.

Any deleted text begin sale of such deleted text end new text begin conveyance of new text end forfeited lands shall be subject to exceptions and
reservations in this state, in trust for the taxing districts of all minerals and mineral rights.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from July 1, 2010.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, sections 272.02, subdivision 34; 273.124, subdivision 10;
and 281.37, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 3

SALES AND USE TAX

Section 1.

Minnesota Statutes 2010, section 297A.61, subdivision 3, is amended to
read:

Subd. 3.

Sale and purchase.

(a) "Sale" and "purchase" include, but are not limited
to, each of the transactions listed in this subdivision.

(b) Sale and purchase include:

(1) any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, for a consideration in money or by exchange or barter; and

(2) the leasing of or the granting of a license to use or consume, for a consideration
in money or by exchange or barter, tangible personal property, other than a manufactured
home used for residential purposes for a continuous period of 30 days or more.

(c) Sale and purchase include the production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication, printing, or processing.

(d) Sale and purchase include the preparing for a consideration of food.
Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
to, the following:

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy;

(4) dietary supplements; and

(5) all food sold through vending machines.

(e) A sale and a purchase includes the furnishing for a consideration of electricity,
gas, water, or steam for use or consumption within this state.

(f) A sale and a purchase includes the transfer for a consideration of prewritten
computer software whether delivered electronically, by load and leave, or otherwise.

(g) A sale and a purchase includes the furnishing for a consideration of the following
services:

(1) the privilege of admission to places of amusement, recreational areas, or athletic
events, and the making available of amusement devices, tanning facilities, reducing
salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;

(2) lodging and related services by a hotel, rooming house, resort, campground,
motel, or trailer camp, including furnishing the guest of the facility with access to
telecommunication services, and the granting of any similar license to use real property
in a specific facility, other than the renting or leasing of it for a continuous period of
30 days or more under an enforceable written agreement that may not be terminated
without prior notice;

(3) nonresidential parking services, whether on a contractual, hourly, or other
periodic basis, except for parking at a meter;

(4) the granting of membership in a club, association, or other organization if:

(i) the club, association, or other organization makes available for the use of its
members sports and athletic facilities, without regard to whether a separate charge is
assessed for use of the facilities; and

(ii) use of the sports and athletic facility is not made available to the general public
on the same basis as it is made available to members.

Granting of membership means both onetime initiation fees and periodic membership
dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
swimming pools; and other similar athletic or sports facilities;

(5) delivery of aggregate materials by a third party, excluding delivery of aggregate
material used in road construction deleted text begin , deleted text end new text begin ; new text end and delivery of concrete block by a third party if
the delivery would be subject to the sales tax if provided by the seller of the concrete
block; and

(6) services as provided in this clause:

(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
include services provided by coin operated facilities operated by the customer;

(ii) motor vehicle washing, waxing, and cleaning services, including services
provided by coin operated facilities operated by the customer, and rustproofing,
undercoating, and towing of motor vehicles;

(iii) building and residential cleaning, maintenance, and disinfecting services and
pest control and exterminating services;

(iv) detective, security, burglar, fire alarm, and armored car services; but not
including services performed within the jurisdiction they serve by off-duty licensed peace
officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit
organization for monitoring and electronic surveillance of persons placed on in-home
detention pursuant to court order or under the direction of the Minnesota Department
of Corrections;

(v) pet grooming services;

(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
public utility lines. Services performed under a construction contract for the installation of
shrubbery, plants, sod, trees, bushes, and similar items are not taxable;

(vii) massages, except when provided by a licensed health care facility or
professional or upon written referral from a licensed health care facility or professional for
treatment of illness, injury, or disease; and

(viii) the furnishing of lodging, board, and care services for animals in kennels and
other similar arrangements, but excluding veterinary and horse boarding services.

In applying the provisions of this chapter, the terms "tangible personal property"
and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
and the provision of these taxable services, unless specifically provided otherwise.
Services performed by an employee for an employer are not taxable. Services performed
by a partnership or association for another partnership or association are not taxable if
one of the entities owns or controls more than 80 percent of the voting power of the
equity interest in the other entity. Services performed between members of an affiliated
group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
group of corporations" means those entities that would be classified as members of an
affiliated group as defined under United States Code, title 26, section 1504, disregarding
the exclusions in section 1504(b).

For purposes of clause (5), "road construction" means construction of (1) public
roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
metropolitan area up to the point of the emergency response location sign.

(h) A sale and a purchase includes the furnishing for a consideration of tangible
personal property or taxable services by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
subdivisions.

(i) A sale and a purchase includes the furnishing for a consideration of
telecommunications services, ancillary services associated with telecommunication
services, cable television services, direct satellite services, and ring tones.
Telecommunication services include, but are not limited to, the following services,
as defined in section 297A.669: air-to-ground radiotelephone service, mobile
telecommunication service, postpaid calling service, prepaid calling service, prepaid
wireless calling service, and private communication services. The services in this
paragraph are taxed to the extent allowed under federal law.

(j) A sale and a purchase includes the furnishing for a consideration of installation if
the installation charges would be subject to the sales tax if the installation were provided
by the seller of the item being installed.

(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
59B.02, subdivision 11.

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 2010, section 297A.61, is amended by adding a subdivision
to read:

new text begin Subd. 17c. new text end

new text begin Prewritten computer software; installation. new text end

new text begin (a) For purposes
of prewritten computer software, the term "installation," as defined in subdivision 7,
paragraph (a), clause (5), includes all the steps necessary to take the software from the
distribution files to its permanent location where it is executed.
new text end

new text begin (b) Installation includes, but is not limited to, the following:
new text end

new text begin (1) the labor to set an item into position or to connect or program it for use;
new text end

new text begin (2) the addition, replacement, or upgrading of new or different items or components
for active operation or use; and
new text end

new text begin (3) configuration services such as selecting programmable options or arranging
functional units to form a complete program under a customer's platform.
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 2010, section 297A.71, subdivision 23, is amended to read:

Subd. 23.

Construction materials for qualified low-income housing projects.

(a)
Purchases of materials and supplies used or consumed in and equipment incorporated into
the construction, improvement, or expansion of qualified low-income housing projects are
exempt from the tax imposed under this chapter if the owner of the qualified low-income
housing project is:

(1) the public housing agency or housing and redevelopment authority of a political
subdivision;

(2) an entity exercising the powers of a housing and redevelopment authority within
a political subdivision;

(3) a limited partnership in which the sole or managing general partner is an
authority under clause (1) or an entity under clause (2), (4), or (5);

(4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying
under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended;

(5) a limited liability company if it consists of a sole member that is an entity under
clause (4); or

(6) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604,
for a qualified low-income housing project described in paragraph (b), clause (5).

This exemption applies regardless of whether the purchases are made by the owner
of the facility or a contractor.

(b) For purposes of this exemption, "qualified low-income housing project" means:

(1) a housing or mixed use project in which at least 20 percent of the residential units
are qualifying low-income rental housing units as defined in section deleted text begin 273.126 deleted text end new text begin 273.128 new text end ;

(2) a federally assisted low-income housing project financed by a mortgage insured
or held by the United States Department of Housing and Urban Development under
United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United
States Code, title 42, section 1437f; the Native American Housing Assistance and
Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar
successor federal low-income housing program;

(3) a qualified low-income housing project as defined in United States Code, title
26, section 42(g), meeting all of the requirements for a low-income housing credit under
section 42 of the Internal Revenue Code regardless of whether the project actually applies
for or receives a low-income housing credit;

(4) a project that will be operated in compliance with Internal Revenue Service
revenue procedure 96-32; or

(5) a housing or mixed use project in which all or a portion of the residential units
are subject to the requirements of section 5 of the United States Housing Act of 1937.

(c) For a project, a portion of which is not used for low-income housing units,
the amount of purchases that are exempt under this subdivision must be determined by
multiplying the total purchases, as specified in paragraph (a), by the ratio of:

(1) the total gross square footage of units subject to the income limits under section
deleted text begin 273.126 deleted text end new text begin 273.128 new text end , the financing for the project, the federal low-income housing tax credit,
revenue procedure 96-32, or section 5 of the United States Housing Act of 1937, as
applicable to the project; and

(2) the total gross square footage of all units in the project.

(d) 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. 4.

Minnesota Statutes 2010, section 297A.89, subdivision 2, is amended to read:

Subd. 2.

Retailer does not collect.

The retailer shall not collect the tax from a
purchaser who furnishes to the retailer a deleted text begin copy of a deleted text end new text begin fully completed exemption new text end certificate
deleted text begin issued by the commissioner authorizing deleted text end new text begin as described in section 297A.72, indicating that new text end
the purchaser new text begin is authorized new text end to pay any sales or use tax due on purchases made by the
purchaser directly to the commissioner under subdivision 1.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2010, section 297B.08, is amended to read:

297B.08 TAX PAID IN OTHER STATE; CREDIT, RECIPROCITY.

If any motor vehicle has been or is subject to a tax by any other state in respect to
its sale or use, in an amount less than the tax imposed by this chapter deleted text begin and chapter 297A deleted text end ,
the provisions of this chapter deleted text begin and chapter 297A, deleted text end shall apply, but at a rate measured by
the difference only between the rate fixed in new text begin this new text end chapter deleted text begin 297A deleted text end , and the rate by which the
previous tax paid in the other state upon the sale or use was computed. If the rate of
tax imposed in such other state is the same or more than the rate of tax imposed by new text begin this
new text end chapter deleted text begin 297A deleted text end , then no tax shall be due on such motor vehicle. The provisions of this
section shall apply only if such other state allows a credit with respect to the excise tax
imposed by this chapter deleted text begin and chapter 297A deleted text end , which is substantially similar in effect to
the credit allowed by this section.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 4

SPECIAL TAXES

Section 1.

Minnesota Statutes 2010, section 296A.083, is amended by adding a
subdivision to read:

new text begin Subd. 4. new text end

new text begin Apportionment. new text end

new text begin The surcharge under this section is subject to the
apportionment provisions of section 296A.18.
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 2010, section 296A.18, is amended by adding a subdivision
to read:

new text begin Subd. 6a. new text end

new text begin Computation of nonhighway use amounts. new text end

new text begin The nonhighway use
amounts determined in subdivisions 2 to 6 must be transferred from the highway user tax
distribution fund to the accounts as provided for in sections 84.794, 84.803, 84.83, 84.927,
and 86B.706. These amounts, together with interest and penalties for delinquency in
payment, paid or collected pursuant to the provisions of this chapter, must be computed
for each six-month period ending June 30 and December 31 and must be transferred on
November 1 and June 1 following each six-month period.
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 2010, section 296A.18, subdivision 7, is amended to read:

Subd. 7.

Forest road.

Approximately 0.116 percent of the total annual unrefunded
revenue from the gasoline fuel tax on all gasoline and special fuel received in, produced,
or brought into this state, except gasoline and special fuel used for aviation purposes, is
derived from the operation of motor vehicles on state forest roads and county forest access
roads. This revenue new text begin , together with interest and penalties for delinquency in payment, paid
or collected pursuant to the provisions of this chapter, new text end is appropriated from the highway
user tax distribution fund and must be transferred and credited in equal installments on
July 1 and January 1 to the state forest road account established in section 89.70. Of this
amount, 0.0605 percent is annually derived from motor vehicles operated on state forest
roads and 0.0555 percent is annually derived from motor vehicles operated on county
forest access roads in this state. An amount equal to 0.0555 percent of the unrefunded
revenue must be annually transferred to counties for the management and maintenance of
county forest roads.

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 2010, section 297I.15, is amended by adding a subdivision
to read:

new text begin Subd. 12. new text end

new text begin Federal Employees Health Benefits Program. new text end

new text begin Premiums received
under the Federal Employees Health Benefits Act, United States Code, title 5, section
8909(f), as amended by the Omnibus Reconciliation Act of 1990, are exempt from the
taxes and surcharges imposed under this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2010, section 298.225, subdivision 1, is amended to read:

Subdivision 1.

Guaranteed distribution.

(a) The distribution of the taconite
production tax as provided in section 298.28, subdivisions new text begin 2, paragraph (a), new text end 3 to 5, 6,
paragraph (b), 7, and 8, shall equal the lesser of the following amounts:

(1) the amount distributed pursuant to this section and section 298.28, with respect
to 1983 production if the production for the year prior to the distribution year is no less
than 42,000,000 taxable tons. If the production is less than 42,000,000 taxable tons, the
amount of the distributions shall be reduced proportionately at the rate of two percent
for each 1,000,000 tons, or part of 1,000,000 tons by which the production is less than
42,000,000 tons; or

(2)(i) for the distributions made pursuant to section 298.28, subdivisions 4,
paragraphs (b) and (c), and 6, paragraph (c), 31.2 percent of the amount distributed
pursuant to this section and section 298.28, with respect to 1983 production;

(ii) for the distributions made pursuant to section 298.28, subdivision 5, paragraphs
(b) and (d), 75 percent of the amount distributed pursuant to this section and section
298.28, with respect to 1983 production.

(b) The distribution of the taconite production tax as provided in section 298.28,
subdivision 2, new text begin paragraph (b), new text end shall equal the following amount:

(1) if the production for the year prior to the distribution year is at least 42,000,000
taxable tons, the amount distributed pursuant to this section and section 298.28 with
respect to 1999 production; or

(2) if the production for the year prior to the distribution year is less than 42,000,000
taxable tons, the amount distributed pursuant to this section and section 298.28 with respect
to 1999 production, reduced proportionately at the rate of two percent for each 1,000,000
tons or part of 1,000,000 tons by which the production is less than 42,000,000 tons.

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 2010, section 298.28, subdivision 2, is amended to read:

Subd. 2.

City or town where quarried or produced.

(a) 4.5 cents per gross ton of
merchantable iron ore concentrate, hereinafter referred to as "taxable ton," plus the amount
provided in paragraph (c), must be allocated to the city or town in the county in which
the lands from which taconite was mined or quarried were located or within which the
concentrate was produced. If the mining, quarrying, and concentration, or different steps
in either thereof are carried on in more than one taxing district, the commissioner shall
apportion equitably the proceeds of the part of the tax going to cities and towns among
such subdivisions upon the basis of attributing 50 percent of the proceeds of the tax to
the operation of mining or quarrying the taconite, and the remainder to the concentrating
plant and to the processes of concentration, and with respect to each thereof giving due
consideration to the relative extent of such operations performed in each such taxing
district. The commissioner's order making such apportionment shall be subject to review
by the Tax Court at the instance of any of the interested taxing districts, in the same
manner as other orders of the commissioner.

(b) Four cents per taxable ton shall be allocated to cities and organized townships
affected by mining because their boundaries are within three miles of a taconite mine pit
that has been actively mined in at least one of the prior three years. If a city or town is
located near more than one mine meeting these criteria, the city or town is eligible to
receive aid calculated from only the mine producing the largest taxable tonnage. When
more than one municipality qualifies for aid based on one company's production, the aid
must be apportioned among the municipalities in proportion to their populations. Of the
amounts distributed under this paragraph to each municipality, one-half must be used for
infrastructure improvement projects, and one-half must be used for projects in which two
or more municipalities cooperate. Each municipality that receives a distribution under this
paragraph must report annually to the Iron Range Resources and Rehabilitation Board and
the commissioner of Iron Range resources and rehabilitation on the projects involving
cooperation with other municipalities.

(c) The amount that would have been computed for the current year under Minnesota
Statutes 2008, section 126C.21, subdivision 4, for a school district deleted text begin within which the
taconite was mined or quarried or within which the concentrate is produced is added to
the amount to be distributed to the cities and towns located within that school district as
provided in paragraph (a) deleted text end new text begin shall be distributed to the cities and townships within the school
district in the proportion that their taxable net tax capacity within the school district bears
to the taxable net tax capacity of the school district for property taxes payable in the
year prior to distribution 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. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 296A.18, subdivision 9, 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 2010, section 270C.30, is amended to read:

270C.30 RETURNS new text begin AND OTHER DOCUMENTS new text end ; FORMAT; FURNISHING.

The commissioner shall prescribe the content and format of all returns new text begin and other
forms required to be filed under a law administered by the commissioner new text end , and may furnish
them subject to charge on application.

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 2010, section 469.319, subdivision 5, is amended to read:

Subd. 5.

Waiver authority.

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

(1) a natural disaster;

(2) unforeseen industry trends; or

(3) loss of a major supplier or customer.

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

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

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

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

(c) Requests for waiver must be made no later than 60 days after new text begin the earlier of
new text end the notice date of an order issued under subdivision 4, paragraph (d), or deleted text begin , in the case of
property taxes, within 60 days of deleted text end the date of a tax statement issued under subdivision 4,
paragraph (c).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for waivers requested in response
to notices issued after the day following final enactment.
new text end