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HF 848

4th Engrossment - 89th Legislature (2015 - 2016) Posted on 06/08/2016 11:52am

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Current Version - 4th Engrossment

A bill for an act
relating to financing of state and local government; making changes to property,
individual income, corporate franchise, estate, sales and use, excise, petroleum
and other fuel, gambling, tobacco, special, mineral, local, and other taxes and
tax-related provisions; modifying local government aids and credits; amending
county levy authority; exempting certain electric generation facility property and
soccer stadium property from property tax; extending homestead value exclusion
for spouses of qualifying deceased veterans; amending the state general levy;
abating local property taxes in the Lake Mille Lacs area; establishing school
building bond agricultural credit; establishing reimbursement for certain
out-of-home placements of Indian children; establishing riparian protection
aid; forgiving certain aid penalties; providing for federal tax conformity;
modifying income tax credits; providing income tax credits; changing income
tax modifications; modifying residency rules; modifying sales and use tax
definitions; modifying sales and use tax collection requirements; modifying sales
and use tax exemptions; providing for reimbursement from the Minnesota Sports
Facilities Authority of certain sales and use taxes; allocating certain sales and use
tax revenues; modifying and allowing certain local sales and use taxes; modifying
provisions for gasoline used as a substitute for aviation gasoline; providing
tax rates on paper pull-tabs sold at bingo halls; providing definitions and a
tax rate for vapor products; modifying taconite tax distributions and deposits;
providing for local development projects; modifying public finance provisions;
transferring approval authority from the Iron Range Resources and Rehabilitation
Board to the commissioner of Iron Range resources and rehabilitation;
requiring the commissioner of Iron Range resources and rehabilitation to seek
a recommendation from the board in certain circumstances; providing for
transfer of ownership, eligibility, certification, and notification requirements for
enrollment of land in the Sustainable Forest Incentive Act; modifying the budget
reserve; providing a new markets grant program; providing a tax time savings
grant program; providing civil and criminal penalties for sales suppression
devices; allocating additional amounts to the border city enterprise zones; making
clarifying and conforming changes; removing obsolete language; requiring
reports; appropriating money;amending Minnesota Statutes 2014, sections 13.51,
subdivision 2; 15.38, subdivision 7; 69.021, subdivision 5; 116J.424; 136A.129,
subdivision 3; 138.053; 216B.161, subdivision 1; 270.071, subdivisions 2, 7, 8,
by adding a subdivision; 270.072, subdivisions 2, 3, by adding a subdivision;
270.12, by adding a subdivision; 270.82, subdivision 1; 270A.03, subdivision
5; 270B.14, subdivision 1; 270C.30; 270C.33, subdivisions 5, 8; 270C.34,
subdivision 2; 270C.347, subdivision 1; 270C.35, subdivision 3, by adding
a subdivision; 270C.38, subdivision 1; 270C.445, by adding a subdivision;
270C.446, subdivision 5; 270C.72, subdivision 4; 270C.89, subdivision 1;
271.06, subdivisions 2, 7; 271.08, subdivision 1; 271.21, subdivision 2; 272.02,
subdivisions 9, 10, by adding subdivisions; 272.0211, subdivision 1; 272.025,
subdivision 1; 272.029, subdivisions 2, 4, by adding a subdivision; 272.0295,
subdivision 4; 272.115, subdivision 2; 272.162; 273.032; 273.061, subdivision
7; 273.08; 273.121, by adding a subdivision; 273.124, subdivision 13; 273.13,
subdivisions 22, 34; 273.1392; 273.1393; 273.33, subdivisions 1, 2; 273.371;
273.372, subdivisions 1, 2, 4, by adding subdivisions; 274.01, subdivision 1;
274.13, subdivision 1; 274.135, subdivision 3; 275.025, subdivisions 1, 2,
4; 275.065, subdivisions 1, 3; 275.066; 275.07, subdivisions 1, 2; 275.08,
subdivision 1b; 275.62, subdivision 2; 276.04, subdivision 2; 276.11, subdivision
1; 276.111; 276A.01, subdivisions 8, 17; 278.01, subdivision 1; 278.12; 278.14,
subdivision 1; 279.01, subdivisions 1, 2, 3; 279.03, subdivision 2; 279.37,
subdivision 2; 282.01, subdivisions 1a, 1d, 4; 282.261, subdivision 2; 282.38,
subdivision 1; 287.2205; 289A.08, subdivisions 11, 16, by adding a subdivision;
289A.09, subdivisions 1, 2; 289A.11, subdivision 1; 289A.12, subdivision
14; 289A.18, subdivision 1, by adding a subdivision; 289A.20, subdivision
2; 289A.31, subdivision 1; 289A.35; 289A.37, subdivision 2; 289A.38,
subdivision 6; 289A.50, subdivision 7; 289A.60, subdivision 28, by adding a
subdivision; 290.01, subdivisions 7, 19a, 19b, 19c, 19d; 290.06, subdivision 22;
290.067, subdivisions 1, 2b; 290.0671, subdivision 7; 290.0672, subdivision
1; 290.0674, subdivision 2, by adding a subdivision; 290.0677, subdivision
1a; 290.068, subdivision 2; 290.091, subdivisions 2, 3; 290.0921, subdivision
3; 290.0922, subdivision 2; 290.17, subdivision 2; 290.31, subdivision 1;
290A.03, subdivision 13; 290A.19; 290C.01; 290C.02, subdivisions 1, 3, 6;
290C.03; 290C.04; 290C.05; 290C.055; 290C.07; 290C.08, subdivision 1;
290C.10; 290C.11; 290C.13, subdivision 6; 291.016, subdivisions 2, 3; 291.03,
subdivisions 9, 11, by adding a subdivision; 291.031; 295.54, subdivision 2;
295.55, subdivision 6; 296A.01, subdivisions 12, 33, 42, by adding subdivisions;
296A.02, by adding a subdivision; 296A.07, subdivisions 1, 4; 296A.08,
subdivision 2; 296A.09, subdivisions 1, 3, 5, 6; 296A.15, subdivisions 1, 4;
296A.17, subdivisions 1, 2, 3; 296A.18, subdivisions 1, 8; 296A.19, subdivision
1; 296A.22, subdivision 9; 296A.26; 297A.61, subdivisions 3, 10; 297A.66,
subdivisions 1, 2, 4, by adding a subdivision; 297A.67, subdivision 7a, by adding
subdivisions; 297A.68, subdivision 9; 297A.70, subdivision 14; 297A.71, by
adding subdivisions; 297A.75, subdivisions 1, 2, 3; 297A.815, subdivision 3;
297A.82, subdivisions 4, 4a; 297D.02; 297E.02, subdivisions 1, 3, 7; 297E.04,
subdivision 1; 297E.05, subdivision 4; 297E.06, subdivision 1; 297F.01,
subdivision 19, by adding subdivisions; 297F.05, subdivisions 1, 3, by adding
subdivisions; 297F.09, subdivision 1; 297F.23; 297G.09, subdivision 1; 297G.22;
297H.04, subdivision 2; 297H.06, subdivision 2; 297I.05, subdivision 2; 297I.10,
subdivisions 1, 3; 297I.30, by adding a subdivision; 297I.60, subdivision 2;
298.001, subdivision 8; 298.01, subdivisions 3b, 4c; 298.22, subdivisions 1, 1a,
5a, 6, 8, 10, 11; 298.221; 298.2211, subdivision 3; 298.2213, subdivisions 4, 5,
6; 298.223, subdivisions 1, 2; 298.227; 298.24, by adding a subdivision; 298.28,
subdivisions 3, 5, 7a, 9d; 298.292, subdivision 2; 298.294; 298.296, subdivisions
1, 2, 4; 298.2961, subdivisions 2, 4; 298.298; 298.46, subdivision 2; 349.12, by
adding a subdivision; 366.095, subdivision 1; 383B.117, subdivision 2; 410.32;
412.301; 469.034, subdivision 2; 469.101, subdivision 1; 469.169, by adding a
subdivision; 469.1763, subdivisions 1, 2, 3; 469.178, subdivision 7; 469.319,
subdivision 5; 473.39, by adding a subdivision; 473H.09; 475.58, subdivision
3b; 475.60, subdivision 2; 477A.013, by adding a subdivision; 477A.017,
subdivisions 2, 3; 477A.03, subdivision 2b; 477A.19, by adding subdivisions;
559.202, subdivision 2; 609.5316, subdivision 3; Minnesota Statutes 2015
Supplement, sections 16A.152, subdivision 2; 289A.02, subdivision 7; 290.01,
subdivisions 19, 31; 290.0671, subdivision 1; 290A.03, subdivision 15; 291.005,
subdivision 1; 297E.02, subdivision 6; 477A.015; 477A.03, subdivision 2a; Laws
1980, chapter 511, sections 1, subdivision 2, as amended; 2, as amended; Laws
1988, chapter 645, section 3, as amended; Laws 1991, chapter 291, article 8,
section 27, subdivisions 3, as amended, 4, as amended, 5, 6; Laws 1996, chapter
471, article 2, section 29, subdivision 4, as amended; article 3, section 51; Laws
1999, chapter 243, article 4, section 18, subdivision 1, as amended; Laws 2001,
First Special Session chapter 5, article 3, section 86; Laws 2008, chapter 154,
article 9, section 21, subdivision 2; Laws 2008, chapter 366, article 7, section 20;
Laws 2009, chapter 88, article 2, section 46, subdivisions 1, as amended, 2, 3, as
amended, 4, 5; article 5, section 17, as amended; Laws 2014, chapter 308, article
1, section 14, subdivision 2; article 6, section 9; article 9, section 94; proposing
coding for new law in Minnesota Statutes, chapters 103C; 116J; 216B; 270C;
273; 290; 290B; 290C; 293; 477A; 609; repealing Minnesota Statutes 2014,
sections 272.02, subdivision 23; 281.22; 290.067, subdivisions 2, 2a; 290C.02,
subdivisions 5, 9; 290C.06; 297F.05, subdivision 1a; 477A.20; Minnesota Rules,
parts 8092.1400; 8092.2000; 8100.0700; 8125.1300, subpart 3.

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

ARTICLE 1

PROPERTY TAX

Section 1.

[103C.333] COUNTY LEVY AUTHORITY.

Notwithstanding any other law to the contrary, a county levying a tax under section
103C.331 shall not include any taxes levied under those authorities in the levy certified
under section 275.07, subdivision 1, paragraph (a). A county levying under section
103C.331 shall separately certify that amount, and the auditor shall extend that levy as a
special taxing district levy under sections 275.066 and 275.07, subdivision 1, paragraph (b).

EFFECTIVE DATE.

This section is effective for certifications made in 2016 and
thereafter.

Sec. 2.

Minnesota Statutes 2014, section 138.053, is amended to read:


138.053 COUNTY HISTORICAL SOCIETY; TAX LEVY; CITIES OR
TOWNS.

The governing body of any home rule charter or statutory city or town may annually
appropriate from its general fund an amount not to exceed 0.02418 percent of estimated
market value, derived from ad valorem taxes on property or other revenues, to be paid to
the historical society of its respective city, town, or county to be used for the promotion of
historical work and to aid in defraying the expenses of carrying on the historical work in the
county. No city or town may appropriate any funds for the benefit of any historical society
unless the society is affiliated with and approved by the Minnesota Historical Society.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

[216B.1647] PROPERTY TAX ADJUSTMENT; COOPERATIVE
ASSOCIATION.

A cooperative electric association that has elected to be subject to rate regulation
under section 216B.026 is eligible to file with the commission for approval of an
adjustment for real and personal property taxes, fees, and permits.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

Minnesota Statutes 2014, section 272.02, is amended by adding a subdivision
to read:


Subd. 100.

Electric generation facility; personal property.

(a) Notwithstanding
subdivision 9, clause (a), attached machinery, transformers, and other personal property
that (1) is part of a natural gas-fired combined heat and power facility, (2) generates
electricity and steam for at least partial consumption as part of an industrial use, including
corn processing, (3) is less than 80,000 kilowatts of installed capacity, and (4) meets the
requirements of this subdivision, are exempt.

(b) At the time of construction, the facility must:

(1) be designed to utilize natural gas as a primary fuel;

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

(3) be located within 15 miles of an existing natural gas pipeline and within one mile
of an existing electrical transmission substation; and

(4) be located outside the metropolitan area as defined in section 473.121,
subdivision 2.

(c) Construction of the facility must commence after January 1, 2015, and
before January 1, 2019. Property eligible for this exemption does not include electric
transmission lines and interconnections, or gas pipelines and interconnections, appurtenant
to the property or the facility.

(d) In lieu of personal property taxes each year, the owner of the combined heat and
power facility shall pay a base payment of 0.14 cents per kilowatt-hour of electricity
produced by the facility during the previous calendar year. In addition to the base payment
and in lieu of personal property taxes each year, the owner of the combined heat and power
facility shall pay an additional payment of 0.08 cents per kilowatt-hour of electricity
produced by the facility during the previous calendar year if, during the previous calendar
year, the host township or city had an agreement with a municipal utilities commission
to share the cost of acquiring, developing, and marketing land for industrial purposes,
and under such agreement both the host township or city and the municipal utilities
commission provided funds during the previous calendar year as part of a cost-sharing
agreement. The additional payment to be paid by the owner of the combined heat and
power facility shall be the lesser of 0.08 cents per kilowatt-hour of electricity produced
by the facility or 57 percent of the amount funded by the host township or city during
the previous calendar year pursuant to the aforementioned cost-sharing agreement. The
payments imposed under this section shall be paid to the county treasurer for the benefit of
the host township or city, at the time and in the manner provided for payment of property
taxes under section 277.01, subdivision 3. If unpaid, the payments are subject to the same
enforcement, collection, and interest and penalties as delinquent personal property taxes.
Except to the extent inconsistent with this section, sections 277.01 to 277.24 and 278.01
to 278.13 apply to the payments imposed under this section, and for purposes of those
sections the payments imposed under this section are considered personal property taxes.

(e) The owner of the combined heat and power facility shall file a report with the
commissioner of revenue annually on or before February 1, detailing the amount of
electricity in kilowatt-hours that was produced by the facility and the amount funded by
the host township or city in accordance with the cost-sharing agreement described in
paragraph (d) during the previous calendar year. The commissioner shall prescribe the
form of the report. The report must contain the information required by the commissioner
to determine the payments due under this section payable in the current year. If an owner
of the facility subject to taxation under this section fails to file the report by the due date,
the commissioner of revenue shall determine the payments based upon the nameplate
capacity of the system multiplied by a capacity factor of 85 percent.

EFFECTIVE DATE.

This section is effective for taxes payable beginning in 2017
and thereafter.

Sec. 5.

Minnesota Statutes 2014, section 272.02, is amended by adding a subdivision
to read:


Subd. 101.

Electric generation facility; personal property.

(a) Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property that is part of an
electric generation facility with more than 35 megawatts and less than 40 megawatts of
installed capacity and that meets the requirements of this subdivision is exempt from taxes
and payments in lieu of taxes. The facility must:

(1) be designed to utilize natural gas as a primary fuel;

(2) be owned and operated by a municipal power agency as defined in section
453.52, subdivision 8;

(3) be located within 800 feet of an existing natural gas pipeline;

(4) satisfy a resource deficiency identified in an approved integrated resource plan
filed under section 216B.2422;

(5) be located outside the metropolitan area as defined under section 473.121,
subdivision 2; and

(6) have received, by resolution, the approval of the governing bodies of the city
and county in which it is located for the exemption of personal property provided by
this subdivision.

(b) Construction of the facility must have been commenced after January 1, 2015,
and before January 1, 2016. Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.

EFFECTIVE DATE.

This section is effective for taxes payable in 2017 and
thereafter.

Sec. 6.

Minnesota Statutes 2014, section 272.162, is amended to read:


272.162 RESTRICTIONS ON TRANSFERS OF SPECIFIC PARTS.

Subdivision 1.

Conditions restricting transfer.

When a deed or other instrument
conveying a parcel of land is presented to the county auditor for transfer or division under
sections 272.12, 272.16, and 272.161, the auditor shall not transfer or divide the land or its
net tax capacity in the official records and shall not certify the instrument as provided in
section 272.12, if:

(a) The land conveyed is less than a whole parcel of land as charged in the tax lists;

(b) The part conveyed appears within the area of application of municipal or
county
subdivision regulations adopted and filed under section 394.35 or section 462.36,
subdivision 1
; and

(c) The part conveyed is part of or constitutes a subdivision as defined in section
462.352, subdivision 12.

Subd. 2.

Conditions allowing transfer.

(a) Notwithstanding the provisions of
subdivision 1, the county auditor may transfer or divide the land and its net tax capacity
and may certify the instrument if the instrument contains a certification by the clerk of
the municipality or designated county planning official:

(a) (1) that the municipality's or county's subdivision regulations do not apply;

(b) (2) that the subdivision has been approved by the governing body of the
municipality or county; or

(c) (3) that the restrictions on the division of taxes and filing and recording have
been waived by resolution of the governing body of the municipality or county in the
particular case because compliance would create an unnecessary hardship and failure to
comply would not interfere with the purpose of the regulations.

(b) If any of the conditions for certification by the municipality or county as provided
in this subdivision exist and the municipality or county does not certify that they exist
within 24 hours after the instrument of conveyance has been presented to the clerk of
the municipality or designated county planning official, the provisions of subdivision 1
do not apply.

(c) If an unexecuted instrument is presented to the municipality or county and
any of the conditions for certification by the municipality or county as provided in
this subdivision exist, the unexecuted instrument must be certified by the clerk of the
municipality or the designated county planning official.

Subd. 3.

Applicability of restrictions.

(a) This section does not apply to the
exceptions set forth in section 272.12.

(b) This section applies only to land within municipalities or counties which choose
to be governed by its provisions. A municipality or county may choose to have this
section apply to the property within its boundaries by filing a certified copy of a resolution
of its governing body making that choice with the auditor and recorder of the county in
which it is located.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 7.

Minnesota Statutes 2014, section 273.13, subdivision 34, is amended to read:


Subd. 34.

Homestead of disabled veteran or family caregiver.

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

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

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

(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
spouse holds the legal or beneficial title to the homestead and permanently resides there,
the exclusion shall carry over to the benefit of the veteran's spouse for the current taxes
payable year and for eight additional taxes payable years or
until such time as the spouse
remarries, or sells, transfers, or otherwise disposes of the property, whichever comes first.
Qualification under this paragraph requires an annual application under paragraph (h).

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

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

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

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

(h) To qualify for a valuation exclusion under this subdivision a property owner
must apply to the assessor by July 1 of each assessment year, except that an annual
reapplication is not required once a property has been accepted for a valuation exclusion
under paragraph (a) and qualifies for the benefit described in paragraph (b), clause (2), and
the property continues to qualify until there is a change in ownership. For an application
received after July 1 of any calendar year, the exclusion shall become effective for the
following assessment year.

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

(j) For purposes of this subdivision:

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

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

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

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

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

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 8.

Minnesota Statutes 2014, section 275.025, subdivision 1, is amended to read:


Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy base amount for commercial-industrial property is
$592,000,000 $762,664,000 for taxes payable in 2002 2017. The state general levy base
amount for seasonal-recreational property is $43,111,000 for taxes payable in 2017
. For
taxes payable in subsequent years, the each levy base amount is increased each year by
multiplying the levy base amount for the prior year by the sum of one plus the rate of
increase, if any, in the implicit price deflator for government consumption expenditures
and gross investment for state and local governments prepared by the Bureau of Economic
Analysts of the United States Department of Commerce for the 12-month period ending
March 31 of the year prior to the year the taxes are payable. The tax under this section is
not treated as a local tax rate under section 469.177 and is not the levy of a governmental
unit under chapters 276A and 473F.

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

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

(2) an erroneous calculation by the commissioner; and

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

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

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 9.

Minnesota Statutes 2014, section 275.025, subdivision 2, is amended to read:


Subd. 2.

Commercial-industrial tax capacity.

For the purposes of this section,
"commercial-industrial tax capacity" means the tax capacity of all taxable property
classified as class 3 or class 5(1) under section 273.13, except for excluding: (1) the first
$100,000 of market value of each parcel of commercial-industrial net tax capacity as
defined under section 273.13, subdivision 24, clauses (1) and (2); (2)
electric generation
attached machinery under class 3; and (3) property described in section 473.625. County
commercial-industrial tax capacity amounts are not adjusted for the captured net tax
capacity of a tax increment financing district under section 469.177, subdivision 2, the
net tax capacity of transmission lines deducted from a local government's total net tax
capacity under section 273.425, or fiscal disparities contribution and distribution net tax
capacities under chapter 276A or 473F. For purposes of this subdivision, the procedures
for determining eligibility for tier 1 under section 273.13, subdivision 24, clauses (1) and
(2), shall apply in determining the portion of a property eligible to be considered within
the first $100,000 of market value.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 10.

Minnesota Statutes 2014, section 275.025, subdivision 4, is amended to read:


Subd. 4.

Apportionment and levy of state general tax.

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

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 11.

Minnesota Statutes 2014, section 275.065, subdivision 1, is amended to read:


Subdivision 1.

Proposed levy.

(a) Notwithstanding any law or charter to the
contrary, on or before September 30, each county and each, home rule charter or statutory
city, and special taxing district, excluding the Metropolitan Council and the Metropolitan
Mosquito Control District,
shall certify to the county auditor the proposed property tax
levy for taxes payable in the following year. The proposed levy certification date for
the Metropolitan Council shall be as prescribed in sections 473.249 and 473.446. The
proposed levy certification date for the Metropolitan Mosquito Control District shall be
as prescribed in section 473.711.

(b) Notwithstanding any law or charter to the contrary, on or before September 15,
each town and each special taxing district, the Metropolitan Council, and the Metropolitan
Mosquito Control District
shall adopt and certify to the county auditor a proposed property
tax levy for taxes payable in the following year. For towns, the final certified levy shall
also be considered the proposed levy.

(c) On or before September 30, each school district that has not mutually agreed
with its home county to extend this date shall certify to the county auditor the proposed
property tax levy for taxes payable in the following year. Each school district that has
agreed with its home county to delay the certification of its proposed property tax levy
must certify its proposed property tax levy for the following year no later than October
7. The school district shall certify the proposed levy as:

(1) a specific dollar amount by school district fund, broken down between
voter-approved and non-voter-approved levies and between referendum market value
and tax capacity levies; or

(2) the maximum levy limitation certified by the commissioner of education
according to section 126C.48, subdivision 1.

(d) If the board of estimate and taxation or any similar board that establishes
maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
property tax levies for funds under its jurisdiction by charter to the county auditor by the
date specified in paragraph (a), the city shall be deemed to have certified its levies for
those taxing jurisdictions.

(e) For purposes of this section, "special taxing district" means a special taxing
district as defined in section 275.066. Intermediate school districts that levy a tax
under chapter 124 or 136D, joint powers boards established under sections 123A.44 to
123A.446, and Common School Districts No. 323, Franconia, and No. 815, Prinsburg, are
also special taxing districts for purposes of this section.

(f) At the meeting at which a taxing authority, other than a town, adopts its proposed
tax levy under this subdivision, the taxing authority shall announce the time and place
of its subsequent regularly scheduled meetings at which the budget and levy will be
discussed and at which the public will be allowed to speak. The time and place of those
meetings must be included in the proceedings or summary of proceedings published in the
official newspaper of the taxing authority under section 123B.09, 375.12, or 412.191.

EFFECTIVE DATE.

This section is effective beginning with proposed levy
certifications for taxes payable in 2017.

Sec. 12.

Minnesota Statutes 2014, section 275.066, is amended to read:


275.066 SPECIAL TAXING DISTRICTS; DEFINITION.

For the purposes of property taxation and property tax state aids, the term "special
taxing districts" includes the following entities:

(1) watershed districts under chapter 103D;

(2) sanitary districts under sections 442A.01 to 442A.29;

(3) regional sanitary sewer districts under sections 115.61 to 115.67;

(4) regional public library districts under section 134.201;

(5) park districts under chapter 398;

(6) regional railroad authorities under chapter 398A;

(7) hospital districts under sections 447.31 to 447.38;

(8) St. Cloud Metropolitan Transit Commission under sections 458A.01 to 458A.15;

(9) Duluth Transit Authority under sections 458A.21 to 458A.37;

(10) regional development commissions under sections 462.381 to 462.398;

(11) housing and redevelopment authorities under sections 469.001 to 469.047;

(12) port authorities under sections 469.048 to 469.068;

(13) economic development authorities under sections 469.090 to 469.1081;

(14) Metropolitan Council under sections 473.123 to 473.549;

(15) Metropolitan Airports Commission under sections 473.601 to 473.679;

(16) Metropolitan Mosquito Control Commission under sections 473.701 to 473.716;

(17) Morrison County Rural Development Financing Authority under Laws 1982,
chapter 437, section 1;

(18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section 6;

(19) East Lake County Medical Clinic District under Laws 1989, chapter 211,
sections 1 to 6;

(20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article
5, section 39;

(21) Middle Mississippi River Watershed Management Organization under sections
103B.211 and 103B.241;

(22) emergency medical services special taxing districts under section 144F.01;

(23) a county levying under the authority of section 103B.241, 103B.245, or
103B.251, or 103C.331;

(24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home
under Laws 2003, First Special Session chapter 21, article 4, section 12;

(25) an airport authority created under section 360.0426; and

(26) any other political subdivision of the state of Minnesota, excluding counties,
school districts, cities, and towns, that has the power to adopt and certify a property tax
levy to the county auditor, as determined by the commissioner of revenue.

EFFECTIVE DATE.

This section is effective for taxes payable in 2017 and
thereafter.

Sec. 13.

Minnesota Statutes 2014, section 275.07, subdivision 1, is amended to read:


Subdivision 1.

Certification of levy.

(a) Except as provided under paragraph (b),
the taxes voted by cities, counties, school districts, and special districts shall be certified
by the proper authorities to the county auditor on or before five working days after
December 20 in each year. A town must certify the levy adopted by the town board to
the county auditor by September 15 each year. If the town board modifies the levy at a
special town meeting after September 15, the town board must recertify its levy to the
county auditor on or before five working days after December 20. If a city, town, county,
school district, or special district fails to certify its levy by that date, its levy shall be the
amount levied by it for the preceding year.

(b)(i) The taxes voted by counties under sections 103B.241, 103B.245, and
103B.251, and 103C.331 shall be separately certified by the county to the county auditor
on or before five working days after December 20 in each year. The taxes certified
shall not be reduced by the county auditor by the aid received under section 273.1398,
subdivision 3
. If a county fails to certify its levy by that date, its levy shall be the amount
levied by it for the preceding year.

(ii) For purposes of the proposed property tax notice under section 275.065 and
the property tax statement under section 276.04, for the first year in which the county
implements the provisions of this paragraph, the county auditor shall reduce the county's
levy for the preceding year to reflect any amount levied for water management purposes
under clause (i) included in the county's levy.

EFFECTIVE DATE.

This section is effective for taxes payable in 2017 and
thereafter.

Sec. 14.

Minnesota Statutes 2014, section 276.11, subdivision 1, is amended to read:


Subdivision 1.

Generally.

As soon as practical after the settlement day determined
in section 276.09, the county treasurer shall pay to the treasurer of a town, city, school
district, or special district, on the warrant of the county auditor, all receipts of taxes levied
by the taxing district and deliver up all orders and other evidences of indebtedness of
the taxing district, taking triplicate receipts for them. The treasurer shall file one of the
receipts with the county auditor, and shall return one by mail on the day of its receipt to
the clerk of the town, city, school district, or special district to which payment was made.
The clerk shall keep the receipt in the clerk's office. Upon written request of the taxing
district, to the extent practicable, the county treasurer shall make partial payments of
amounts collected periodically in advance of the next settlement and distribution. A
statement prepared by the county treasurer must accompany each payment. It must state
the years for which taxes included in the payment were collected and, for each year, the
amount of the taxes and any penalties on the tax. Upon written request of a taxing district,
except school districts, the county treasurer shall pay at least 70 percent of the estimated
collection within 30 days after the settlement date determined in section 276.09. Within
seven eight business days after the due date, or 28 calendar days after the postmark date
on the envelopes containing real or personal property tax statements, whichever is latest,
the county treasurer shall pay to the treasurer of the school districts 50 percent of the
estimated collections arising from taxes levied by and belonging to the school district,
unless the school district elects to receive 50 percent of the estimated collections arising
from taxes levied by and belonging to the school district after making a proportionate
reduction to reflect any loss in collections as the result of any delay in mailing tax
statements. In that case, 50 percent of those adjusted, estimated collections shall be paid
by the county treasurer to the treasurer of the school district within seven business days of
the due date. The remaining 50 percent of the estimated collections must be paid to the
treasurer of the school district within the next seven business days of the later of the dates
in the preceding sentence, unless the school district elects to receive the remainder of its
estimated collections after a proportionate reduction has been made to reflect any loss in
collections as the result of any delay in mailing tax statements. In that case, the remaining
50 percent of those adjusted, estimated collections shall be paid by the county treasurer to
the treasurer of the school district within 14 days of the due date. The treasurer shall pay
the balance of the amounts collected to a municipal corporation or other body within 60
days after the settlement date determined in section 276.09. After 45 days interest at an
annual rate of eight percent accrues and must be paid to the taxing district. Interest must
be paid upon appropriation from the general revenue fund of the county. If not paid, it
may be recovered by the taxing district, in a civil action.

EFFECTIVE DATE.

This section is effective for property taxes payable in 2017
and thereafter.

Sec. 15.

Minnesota Statutes 2014, section 276.111, is amended to read:


276.111 DISTRIBUTIONS AND FINAL YEAR-END SETTLEMENT.

Within seven eight business days after October 15, the county treasurer shall pay to
the school districts 50 percent of the estimated collections arising from taxes levied by
and belonging to the school district from the settlement day determined in section 276.09
to October 20. The remaining 50 percent of the estimated tax collections must be paid
to the school district within the next seven business days. Within ten 11 business days
after November 15, the county treasurer shall pay to the school district 100 percent of the
estimated collections arising from taxes levied by and belonging to the school districts
from October 20 to November 20.

Within ten 11 business days after November 15, the county treasurer shall pay to
each taxing district, except any school district, 100 percent of the estimated collections
arising from taxes levied by and belonging to each taxing district from the settlement day
determined in section 276.09 to November 20.

On or before January 5, the county treasurer shall make full settlement with the
county auditor of all receipts collected from the settlement day determined in section
276.09 to December 31. After subtracting any tax distributions that have been made to
the taxing districts in October and November, the treasurer shall pay to each of the taxing
districts on or before January 25, the balance of the tax amounts collected on behalf of
each taxing district. Interest accrues at an annual rate of eight percent and must be paid to
the taxing district if this final settlement amount is not paid by January 25. Interest must
be paid upon appropriation from the general revenue fund of the county. If not paid, it
may be recovered by the taxing district in a civil action.

EFFECTIVE DATE.

This section is effective for property taxes payable in 2017
and thereafter.

Sec. 16.

Minnesota Statutes 2014, section 278.12, is amended to read:


278.12 REFUNDS OF OVERPAYMENT.

If upon final determination the petitioner has paid more than the amount so
determined to be due, judgment shall be entered in favor of the petitioner for such excess,
and upon filing a copy thereof with the county auditor the auditor shall forthwith draw a
warrant upon the county treasurer for the payment thereof; provided that, with the consent
of the petitioner, the county auditor may, in lieu of drawing such warrant, issue to the
petitioner a certificate stating the amount of such judgment, which amount may be used
to apply upon any taxes due or to become due over a prescribed period of years for the
taxing district or districts whose taxes or assessments are reduced, or their successors in
the event of a reorganization or reincorporation of any such taxing district. In the event the
auditor shall issue a warrant for refund or certificates, the amount thereof shall be charged
to the state and other taxing districts in proportion to the amount of their respective taxes
included in the levy and deduct the same in the subsequent distribution of any tax proceeds
to the state or such taxing districts, and upon receiving any such certificate in payment of
other taxes, the amount thereof shall be distributed to the state and other taxing districts
in proportion to the amount of their respective taxes included in the levy; provided that
if in the judgment the levy of one or more of the districts be found to be illegal, to the
extent that the tax so levied is reduced on account of the illegal levies, the amount to be
charged back shall be charged to the districts and the amount thereof deducted from
any distributions thereafter made to them.

EFFECTIVE DATE.

This section is effective for refunds for overpayment of taxes
payable in 2016 and thereafter.

Sec. 17.

Minnesota Statutes 2014, section 278.14, subdivision 1, is amended to read:


Subdivision 1.

Applicability.

A county must pay a refund of a mistakenly billed
tax as provided in this section. As used in this section, "mistakenly billed tax" means an
amount of property tax that was billed, to the extent the amount billed exceeds the accurate
tax amount due to a misclassification of the owner's property under section 273.13 or a
mathematical error in the calculation of the tax on the owner's property, together with
any penalty or interest paid on that amount. This section applies only to taxes payable
in the current year and the two prior years. As used in this section, "mathematical error"
is limited to an error in:

(1) converting the market value of a property to tax capacity or to a referendum
market value;

(2) application of the tax rate as computed by the auditor under sections 275.08,
subdivisions 1b, 1c, and 1d
; 276A.06, subdivisions 4 and 5; and 473F.07, subdivisions 4
and 5, to the property's tax capacity or referendum market value; or

(3) calculation of or eligibility for a credit.

The remedy provided under this section does not apply to a misclassification under
section 273.13 that is due to the failure of the property owner to apply for the correct
classification as required by law.

EFFECTIVE DATE.

This section is effective based on property taxes payable in
2017 and thereafter.

Sec. 18.

Minnesota Statutes 2014, section 279.01, subdivision 1, is amended to read:


Subdivision 1.

Due dates; penalties.

Except as provided in subdivisions 3 to 5,
on May 16 or 21 days after the postmark date on the envelope containing the property
tax statement, whichever is later, a penalty accrues and thereafter is charged upon all
unpaid taxes on real estate on the current lists in the hands of the county treasurer. The
(a) When the taxes against any tract or lot exceed $100, one-half of the amount of tax
due must be paid prior to May 16, and the remaining one-half must be paid prior to the
following October 16. If either tax amount is unpaid as of its due date, a
penalty is
imposed at a rate of two percent on homestead property until May 31 and four percent
on nonhomestead property. If complete payment has not been made by the first day of
the month following either due date, an additional penalty of two
percent on June 1. The
penalty on nonhomestead property is at a rate of four percent until May 31
homestead
property
and eight four percent on June 1. This penalty does not accrue until June 1 of
each year, or 21 days after the postmark date on the envelope containing the property
tax statements, whichever is later, on commercial use real property used for seasonal
residential recreational purposes and classified as class 1c or 4c, and on other commercial
use real property classified as class 3a, provided that over 60 percent of the gross income
earned by the enterprise on the class 3a property is earned during the months of May,
June, July, and August. In order for the first half of the tax due on class 3a property to be
paid after May 15 and before June 1, or 21 days after the postmark date on the envelope
containing the property tax statement, whichever is later, without penalty, the owner of
the property must attach an affidavit to the payment attesting to compliance with the
income provision of this subdivision
nonhomestead property is imposed. Thereafter,
for both homestead and nonhomestead property, on the first day of each subsequent
month beginning July 1, up to and including October 1 following through December, an
additional penalty of one percent for each month accrues and is charged on all such unpaid
taxes provided that if the due date was extended beyond May 15 as the result of any delay
in mailing property tax statements no additional penalty shall accrue if the tax is paid by
the extended due date. If the tax is not paid by the extended due date, then all penalties
that would have accrued if the due date had been May 15 shall be charged. When the taxes
against any tract or lot exceed $100, one-half thereof may be paid prior to May 16 or
21 days after the postmark date on the envelope containing the property tax statement,
whichever is later; and, if so paid, no penalty attaches; the remaining one-half may be
paid at any time prior to October 16 following, without penalty; but, if not so paid, then
a penalty of two percent accrues thereon for homestead property and a penalty of four
percent on nonhomestead property. Thereafter, for homestead property, on the first day of
November an additional penalty of four percent accrues and on the first day of December
following, an additional penalty of two percent accrues and is charged on all such unpaid
taxes. Thereafter, for nonhomestead property, on the first day of November and December
following, an additional penalty of four percent for each month accrues and is charged on
all such unpaid taxes. If one-half of such taxes are not paid prior to May 16 or 21 days
after the postmark date on the envelope containing the property tax statement, whichever
is later, the same may be paid at any time prior to October 16, with accrued penalties to the
date of payment added, and thereupon no penalty attaches to the remaining one-half until
October 16 following
the penalty must not exceed eight percent in the case of homestead
property, or 12 percent in the case of nonhomestead property
.

(b) If the property tax statement was not postmarked prior to April 25, the first
half payment due date in paragraph (a) shall be 21 days from the postmark date of the
property tax statement, and all penalties referenced in paragraph (a) shall be determined
with regard to the later due date.

(c) In the case of a tract or lot with taxes of $100 or less, the due date and penalties
as specified in paragraph (a) or (b) for the first half payment shall apply to the entire
amount of the tax due.

(d) For commercial use real property used for seasonal residential recreational
purposes and classified as class 1c or 4c, and on other commercial use real property
classified as class 3a, provided that over 60 percent of the gross income earned by the
enterprise on the class 3a property is earned during the months of May, June, July, and
August, penalty does not accrue until June 1 of each year. For a class 3a property to
qualify for the later due date, the owner of the property must attach an affidavit to the
payment attesting to compliance with the income requirements of this paragraph.

(e) This section applies to payment of personal property taxes assessed against
improvements to leased property, except as provided by section 277.01, subdivision 3.

(f) A county may provide by resolution that in the case of a property owner that has
multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in
installments as provided in this subdivision.

(g) The county treasurer may accept payments of more or less than the exact amount
of a tax installment due. Payments must be applied first to the oldest installment that is due
but which has not been fully paid. If the accepted payment is less than the amount due,
payments must be applied first to the penalty accrued for the year or the installment being
paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
payment required as a condition for filing an appeal under section 278.03 or any other law,
nor does it affect the order of payment of delinquent taxes under section 280.39.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 19.

Minnesota Statutes 2014, section 279.01, subdivision 2, is amended to read:


Subd. 2.

Abatement of penalty.

(a) The county board may, with the concurrence
of the county treasurer, delegate to the county treasurer the power to abate the penalty
provided for late payment of taxes in the current year. Notwithstanding section 270C.86,
if any county board so elects, the county treasurer may abate the penalty on finding that
the imposition of the penalty would be unjust and unreasonable.

(b) The county treasurer shall abate the penalty provided for late payment of taxes in
the current year if the property tax payment is delivered by mail to the county treasurer
and the envelope containing the payment is postmarked by the United States Postal
Service within one business day of the due date prescribed under this section, but only if
the property owner requesting the abatement has not previously received an abatement
of penalty for late payment of tax under this paragraph.

EFFECTIVE DATE.

This section is effective for property taxes payable in 2017
and thereafter.

Sec. 20.

Minnesota Statutes 2014, section 279.01, subdivision 3, is amended to read:


Subd. 3.

Agricultural property.

(a) In the case of class 1b agricultural homestead,
class 2a agricultural homestead property, and class 2a agricultural nonhomestead property,
no penalties shall attach to the second one-half property tax payment as provided in this
section if paid by November 15. Thereafter for class 1b agricultural homestead and class
2a homestead property, on November 16 following, a penalty of six percent shall accrue
and be charged on all such unpaid taxes and on December 1 following, an additional two
percent shall be charged on all such unpaid taxes. Thereafter for class 2a agricultural
nonhomestead property, on November 16 following, a penalty of eight percent shall accrue
and be charged on all such unpaid taxes and on December 1 following, an additional four
percent shall be charged on all such unpaid taxes
, penalties shall attach as provided in
subdivision 1
.

If the owner of class 1b agricultural homestead or class 2a agricultural property
receives a consolidated property tax statement that shows only an aggregate of the taxes
and special assessments due on that property and on other property not classified as class
1b agricultural homestead or class 2a agricultural property, the aggregate tax and special
assessments shown due on the property by the consolidated statement will be due on
November 15.

(b) Notwithstanding paragraph (a), for taxes payable in 2010 and 2011, for any class
2b property that was subject to a second-half due date of November 15 for taxes payable
in 2009, the county shall not impose, or if imposed, shall abate penalty amounts in excess
of those that would apply as if the second-half due date were November 15.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 21.

Minnesota Statutes 2014, section 279.03, subdivision 2, is amended to read:


Subd. 2.

Rate for composite judgment; rate for homestead composite judgment,
repurchase of forfeited homestead property, and sale of forfeited property
.

(a) Except
as provided in paragraph (b), amounts included in composite judgments authorized
by section 279.37, subdivision 1, are subject to interest at the rate calculated under
subdivision 1a. During each calendar year, interest shall accrue on the unpaid balance
of the composite judgment from the time it is confessed until it is paid. The interest rate
established at the time the judgment is confessed is fixed for the duration of that judgment.

(b) The following amounts are subject to interest as provided in paragraph (c):

(1) amounts included in composite judgments on parcels classified as 1a or 1b
and used as the homestead of the owner;

(2) amounts in contracts for repurchase of property classified as 1a or 1b at the time
of forfeiture or at the time that the repurchase application is approved; and

(3) sales of forfeited property pursuant to section 282.01, subdivision 4.

(b) A confession of judgment covering any part of a parcel classified as 1a or 1b,
and used as the homestead of the owner, is subject to interest at the rate provided in
section 279.37, subdivision 2, paragraph (b). This paragraph does not apply to a relative
homestead under section 273.124, subdivision 1, paragraph (c).

(c) By October 15 each year the commissioner shall set the interest rate under this
subdivision at the greater of five percent or two percent above the prime rate charged
by banks during the six-month period ending on September 30 of that year, rounded to
the nearest full percent, provided that the rate must not exceed the maximum annum
rate specified under section 279.03, subdivision 1a. By November 1 of each year the
commissioner must certify the rate to the county auditor. The rate of interest becomes
effective on January 1 of the immediately succeeding year. The commissioner's
determination under this subdivision is not a rule subject to the Administrative Procedure
Act in chapter 14, including section 14.386.

(d) For the purposes of this subdivision, "prime rate charged by banks" means the
average predominant prime rate quoted by commercial banks to large businesses, as
determined by the Board of Governors of the Federal Reserve System.

EFFECTIVE DATE.

This section is effective for composite judgments, repurchase
contracts, and sales of forfeited property occurring after January 1, 2017.

Sec. 22.

Minnesota Statutes 2014, section 279.37, subdivision 2, is amended to read:


Subd. 2.

Installment payments.

(a) The owner of any such parcel, or any person to
whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
make and file with the county auditor of the county in which the parcel is located a written
offer to pay the current taxes each year before they become delinquent, or to contest
the taxes under chapter 278 and agree to confess judgment for the amount provided, as
determined by the county auditor. By filing the offer, the owner waives all irregularities
in connection with the tax proceedings affecting the parcel and any defense or objection
which the owner may have to the proceedings, and also waives the requirements of any
notice of default in the payment of any installment or interest to become due pursuant to
the composite judgment to be so entered. Unless the property is subject to subdivision 1a,
with the offer, the owner shall (i) tender one-tenth of the amount of the delinquent taxes,
costs, penalty, and interest, and (ii) tender all current year taxes and penalty due at the
time the confession of judgment is entered. In the offer, the owner shall agree to pay the
balance in nine equal installments, with interest as provided in section 279.03, payable
annually on installments remaining unpaid from time to time, on or before December 31
of each year following the year in which judgment was confessed.

(b) For property which qualifies under section 279.03, subdivision 2, paragraph (b),
each year the commissioner shall set the interest rate for offers made under paragraph (a)
at the greater of five percent or two percent above the prime rate charged by banks during
the six-month period ending on September 30 of that year, rounded to the nearest full
percent, provided that the rate must not exceed the maximum annum rate specified under
section 279.03, subdivision 1a. The rate of interest becomes effective on January 1 of the
immediately succeeding year. The commissioner's determination under this subdivision is
not a rule subject to the Administrative Procedure Act in chapter 14, including section
14.386. If a default occurs in the payments under any confessed judgment entered under
this paragraph, the taxes and penalties due are subject to the interest rate specified in section
279.03.
Amounts entered in judgment bear interest at the rate provided in section 279.03,
subdivision 1a, unless the parcel is classified as 1a or 1b, and is used as the homestead of
the owner, in which case the rate provided in section 279.03, subdivision 2, shall apply.
A parcel that is classified as relative homestead under section 273.124, subdivision 1,
paragraph (c), is subject to interest at the rate provided in section 279.03, subdivision 1a.

(c) Interest shall commence with the date the judgment is entered. During each
calendar year, interest shall accrue on the unpaid balance of the composite judgment
from the time it is confessed until it is paid. The interest rate established at the time the
judgment is confessed is fixed for the duration of that judgment.

(d) If a default occurs in the payments under any confessed judgment, the taxes and
penalties due are subject to the interest rate specified in section 279.03, subdivision 1a,
regardless of the classification of the parcel.
For the purposes of this subdivision:

(1) the term "prime rate charged by banks" means the average predominant prime
rate quoted by commercial banks to large businesses, as determined by the Board of
Governors of the Federal Reserve System; and

(2) "default" means the cancellation of the confession of judgment due to
nonpayment of the current year tax or failure to make any installment payment required by
this confessed judgment within 60 days from the date on which payment was due.

(c) The interest rate established at the time judgment is confessed is fixed for the
duration of the judgment. By October 15 of each year, the commissioner of revenue must
determine the rate of interest as provided under paragraph (b) and, by November 1 of each
year, must certify the rate to the county auditor.

(d) (e) A qualified property owner eligible to enter into a second confession of
judgment may do so at the interest rate provided in paragraph (b).

(e) Repurchase agreements or contracts for repurchase for properties being
repurchased under section 282.261 are not eligible to receive the interest rate under
paragraph (b).

(f) The offer must be substantially as follows:

"To the court administrator of the district court of ........... county, I, .....................,
am the owner of the following described parcel of real estate located in ....................
county, Minnesota:

.............................. Upon that real estate there are delinquent taxes for the year ........., and
prior years, as follows: (here insert year of delinquency and the total amount of delinquent
taxes, costs, interest, and penalty). By signing this document I offer to confess judgment
in the sum of $...... and waive all irregularities in the tax proceedings affecting these
taxes and any defense or objection which I may have to them, and direct judgment to be
entered for the amount stated above, minus the sum of $............, to be paid with this
document, which is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and
interest stated above. I agree to pay the balance of the judgment in nine or four equal,
annual installments, with interest as provided in section 279.03, payable annually, on the
installments remaining unpaid. I agree to pay the installments and interest on or before
December 31 of each year following the year in which this judgment is confessed and
current taxes each year before they become delinquent, or within 30 days after the entry of
final judgment in proceedings to contest the taxes under chapter 278.

Dated .............., ......."

EFFECTIVE DATE.

This section is effective for sales and repurchases occurring
after January 1, 2017.

Sec. 23.

Minnesota Statutes 2014, section 282.01, subdivision 4, is amended to read:


Subd. 4.

Sale: method, requirements, effects.

The sale authorized under
subdivision 3 must be conducted by the county auditor at the county seat of the county in
which the parcels lie, except that in St. Louis and Koochiching Counties, the sale may
be conducted in any county facility within the county. The sale must not be for less than
the appraised value except as provided in subdivision 7a. The parcels must be sold for
cash only, unless the county board of the county has adopted a resolution providing for
their sale on terms, in which event the resolution controls with respect to the sale. When
the sale is made on terms other than for cash only (1) a payment of at least ten percent
of the purchase price must be made at the time of purchase, and the balance must be
paid in no more than ten equal annual installments, or (2) the payments must be made
in accordance with county board policy, but in no event may the board require more
than 12 installments annually, and the contract term must not be for more than ten years.
Standing timber or timber products must not be removed from these lands until an amount
equal to the appraised value of all standing timber or timber products on the lands at the
time of purchase has been paid by the purchaser. If a parcel of land bearing standing
timber or timber products is sold at public auction for more than the appraised value, the
amount bid in excess of the appraised value must be allocated between the land and the
timber in proportion to their respective appraised values. In that case, standing timber or
timber products must not be removed from the land until the amount of the excess bid
allocated to timber or timber products has been paid in addition to the appraised value of
the land. The purchaser is entitled to immediate possession, subject to the provisions of
any existing valid lease made in behalf of the state.

For sales occurring on or after July 1, 1982, the unpaid balance of the purchase price
is subject to interest at the rate determined pursuant to section 549.09.
The unpaid balance
of the purchase price for sales occurring after December 31, 1990, is subject to interest
at the rate determined provided in section 279.03, subdivision 1a 2, paragraph (c). The
interest rate is subject to change each year on the unpaid balance in the manner provided
for rate changes in section 549.09 or 279.03, subdivision 1a, whichever, is applicable.
Interest on the unpaid contract balance on sales occurring before July 1, 1982, is payable
at the rate applicable to the sale at the time that the sale occurred.

EFFECTIVE DATE.

This section is effective for sales occurring after January
1, 2017.

Sec. 24.

Minnesota Statutes 2014, section 282.261, subdivision 2, is amended to read:


Subd. 2.

Interest rate.

The unpaid balance on any repurchase contract approved
by the county board for property classified as 1a or 1b and used as the homestead of the
owner at the time of forfeiture or at the time that the repurchase application is approved
is
subject to interest at the rate determined in section 279.03, subdivision 1a 2. The interest
rate is subject to change each year on the unpaid balance in the manner provided for rate
changes in section 279.03, subdivision 1a.
The unpaid balance on any other repurchase
contract approved by the county board is subject to interest at the rate determined in
section 279.03, subdivision 1a, which is subject to change each year in the manner
provided for in section 279.03, subdivision 1a.

EFFECTIVE DATE.

This section is effective for repurchases occurring after
January 1, 2017.

Sec. 25.

Minnesota Statutes 2014, section 473H.09, is amended to read:


473H.09 EARLY TERMINATION.

Subdivision 1.

Public emergency.

Termination of an agricultural preserve earlier
than a date derived through application of section 473H.08 may be permitted only in the
event of a public emergency upon petition from the owner or authority to the governor.
The determination of a public emergency shall be by the governor through executive order
pursuant to sections 4.035 and 12.01 to 12.46. The executive order shall identify the
preserve, the reasons requiring the action and the date of termination.

Subd. 2.

Death of owner.

(a) Within 180 days of the death of an owner, an owner's
spouse, or other qualifying person, the surviving owner may elect to terminate the
agricultural preserve and the covenant allowing the land to be enrolled as an agricultural
preserve by notifying the authority on a form provided by the commissioner of agriculture.
Termination of a covenant under this subdivision must be executed and acknowledged in
the manner required by law to execute and acknowledge a deed.

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

(1) "qualifying person" includes a partner, shareholder, trustee for a trust that the
decedent was the settlor or a beneficiary of, or member of an entity permitted to own
agricultural land and engage in farming under section 500.24 that owned the agricultural
preserve; and

(2) "surviving owner" includes the executor of the estate of the decedent, the trustee
for a trust that the decedent was the settlor or a beneficiary of, or an entity permitted to
own farm land under section 500.24 of which the decedent was a partner, shareholder, or
member.

(c) When an agricultural preserve is terminated under this subdivision, the property
is subject to additional taxes in an amount equal to 50 percent of the taxes actually
levied against the property for the current taxes payable year. The additional taxes are
extended against the property on the tax list for taxes payable in the current year. The
additional taxes must be distributed among the jurisdictions levying taxes on the property
in proportion to the current year's taxes.

EFFECTIVE DATE.

This section is effective July 1, 2016.

Sec. 26.

Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
article 6, section 9, Laws 2000, chapter 490, article 6, section 15, Laws 2008, chapter 154,
article 2, section 30, and Laws 2013, chapter 143, article 4, section 33, is amended to read:


Sec. 3. TAX; PAYMENT OF EXPENSES.

(a) The tax levied by the hospital district under Minnesota Statutes, section 447.34,
must not be levied at a rate that exceeds the amount authorized to be levied under that
section. The proceeds of the tax may be used for all purposes of the hospital district,
except as provided in paragraph (b).

(b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used by
the Cook ambulance service and the Orr ambulance service for the purpose of:

(1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance
service;

(2) attached and portable equipment for use in and for the ambulances; and

(3) parts and replacement parts for maintenance and repair of the ambulances, and
administrative, operation, or salary expenses for the Cook ambulance service and the
Orr ambulance service
.

The money may not be used for administrative, operation, or salary expenses.

(c) The part of the levy referred to in paragraph (b) must be administered by the
Cook Hospital and passed on in equal amounts directly to the Cook area ambulance
service board and the city of Orr to be used for the purposes in paragraph (b).

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 27.

Laws 1996, chapter 471, article 3, section 51, is amended to read:


Sec. 51. RECREATION LEVY FOR SAWYER BY CARLTON COUNTY.

Subdivision 1.

Levy authorized.

Notwithstanding other law to the contrary, the
Carlton county board of commissioners may levy in and for the unorganized township of
Sawyer an amount up to $1,500 $2,000 annually for recreational purposes, beginning with
taxes payable in 1997 and ending with taxes payable in 2006
.

Subd. 2.

Effective date.

This section is effective June 1, 1996, without local
approval.

EFFECTIVE DATE.

This section is effective the day after the Carlton County
Board of Commissioners and its chief clerical officer comply with section 645.021,
subdivisions 2 and 3, and applies to taxes payable in 2017.

Sec. 28.

Laws 2009, chapter 88, article 2, section 46, subdivision 1, as amended by
Laws 2013, chapter 143, article 4, section 36, is amended to read:


Subdivision 1.

Agreement.

The city of Cloquet and Perch Lake Township, by
resolution of each of their governing bodies, may establish the Cloquet Area Fire and
Ambulance Special Taxing District for the purpose of providing fire or ambulance
services, or both, throughout the district. In this section, "municipality" means home rule
charter and statutory cities, towns, and Indian tribes. The district may exercise all the
powers relating to fire and ambulance services of the municipalities that receive fire or
ambulance services, or both, from the district. Upon application, any other municipality
may join the district with the agreement of the municipalities that comprise the district at
the time of its application to join.

EFFECTIVE DATE.

This section is effective in Cloquet and Perch Lake Township
the day after compliance with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of each.

Sec. 29.

Laws 2009, chapter 88, article 2, section 46, subdivision 2, is amended to read:


Subd. 2.

Board.

The Cloquet Area Fire and Ambulance Special Taxing District
Board is governed by a board made up initially of one or more elected officials of the
governing body of each participating municipality in the proportions set out in the
establishing resolution, subject to change as provided in the district's charter, if any, or
in the district's bylaws. Each municipality's representatives serve at the pleasure of that
municipality's governing body.

EFFECTIVE DATE.

This section is effective in Cloquet and Perch Lake Township
the day after compliance with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of each.

Sec. 30.

Laws 2009, chapter 88, article 2, section 46, subdivision 3, as amended by
Laws 2013, chapter 143, article 4, section 37, is amended to read:


Subd. 3.

Tax.

(a) The district board may impose a property tax on taxable property
as provided in this subdivision to pay the costs of providing fire or ambulance services,
or both, throughout the district
. The board shall annually determine the total amount of
the levy that is attributable to the cost of providing fire services and the cost of providing
ambulance services within the primary service area. For those municipalities that only
receive ambulance services, the costs for the provision of ambulance services shall
be levied against taxable property within those municipalities at a rate necessary not to
exceed 0.019 percent of the estimated market value. For those municipalities that receive
both fire and ambulance services, the tax shall be imposed at a rate that does not exceed
0.2835 percent of estimated market value.

(b) When a member municipality opts to receive fire service from the district or
an additional municipality becomes a member of the district, the cost of providing fire
services to that community shall be determined by the board and added to the maximum
levy amount.

(c) Each county auditor of a county that contains a municipality subject to the tax
under this section must collect the tax and pay it to the Fire and Ambulance Special Taxing
District. The district may also impose other fees or charges as allowed by law for the
provision of fire and ambulance services.

EFFECTIVE DATE.

This section is effective in Cloquet and Perch Lake Township
the day after compliance with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of each.

Sec. 31.

Laws 2009, chapter 88, article 2, section 46, subdivision 4, is amended to read:


Subd. 4.

Public indebtedness.

(a) The district may incur debt in the manner
provided for a municipality by Minnesota Statutes, chapter 475, and may issue certificates
of indebtedness or capital notes in the manner provided for a city by Minnesota Statutes,
section 412.301,
when necessary to accomplish its duties, except that the district may
not incur debt or issue obligations until first obtaining the approval of a majority of the
electors voting on the question of issuing the obligation. The debt service for debt used to
finance capital costs for ambulance service shall be levied against taxable property within
the municipalities in the primary service area. The debt service for debt used to finance
capital costs for fire service shall be levied against taxable property within municipalities
receiving fire services. The district board shall pledge its full faith and credit and taxing
power without limitation as to rate or amount for the payment of the district's debt
.

(b) For purposes of this subdivision, "municipality" has the definition given in
Minnesota Statutes, sections 475.51, subdivision 2, and 475.521, subdivision 1, paragraph
(c).

EFFECTIVE DATE.

This section is effective in Cloquet and Perch Lake Township
the day after compliance with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of each.

Sec. 32.

Laws 2009, chapter 88, article 2, section 46, subdivision 5, is amended to read:


Subd. 5.

Withdrawal.

Notice of intent to withdraw from participation in the district
may be given only in the month of January, with a minimum of twelve months notice of
intent to withdraw. Withdrawal becomes effective for taxes levied pursuant to subdivision
3
in the year when the notice is given. A property tax on taxable property located in a
withdrawing municipality that has been levied by the district pursuant to subdivision 4
remains in effect until the obligations outstanding on the date of withdrawal are satisfied,
including any property tax levied in connection with refunding such obligations.
The
district and its members may also develop and agree upon other continuing obligations
after withdrawal of a municipality.

EFFECTIVE DATE.

This section is effective in Cloquet and Perch Lake Township
the day after compliance with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of each.

Sec. 33. 2016 TOWNSHIP BOARD APPEALS AND EQUALIZATION COURSE
WAIVER.

If a city or town that conducts local board of appeal and equalization meetings
certified by February 1, 2016, that it was in compliance with the requirements of
Minnesota Statutes, section 274.014, subdivision 2, but no member of the local board
who has attended an appeal and equalization course training within the preceding four
years attended the local board's meeting for 2016, that local board shall have its powers
reinstated for the 2017 assessment by resolution of the governing body of the city or
town, and by certifying it is in compliance with the requirements of Minnesota Statutes,
section 274.014, subdivision 2. The resolution and certification must be provided to
the county assessor by February 1, 2017.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 34. TOWN OF TOFTE; MUNICIPAL HOUSING.

(a) Notwithstanding the provisions of Laws 1988, chapter 516, and Laws 1988,
chapter 719, article 19, section 27, the town of Tofte may own and operate within its
boundary up to 12 units of housing for individuals over 55 years of age or families with
one member of the household that is over 55 years of age, or projects that provide housing
for individuals or families with incomes not greater than 120 percent of the median
family income, as estimated by the United States Department of Housing and Urban
Development for the nonmetropolitan county in which the town of Tofte is located.

(b) The town of Tofte shall have the powers of a city under Minnesota Statutes,
chapter 462C, and the powers of an authority under Minnesota Statutes, sections 469.001
to 469.047, with respect to this section. Upon the approval of the town board, the town of
Tofte may levy the tax described in Minnesota Statutes, section 469.033, subdivision 6.

(c) Nothing in this section shall limit the power of the Cook County/Grand Marais
Joint Economic Development Authority to exercise jurisdiction within the town of Tofte.
The authority to undertake new projects under this section shall expire on June 30, 2017.

EFFECTIVE DATE.

This section is effective the day after compliance by
the governing body of the town of Tofte with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.

Sec. 35. SOCCER STADIUM PROPERTY TAX EXEMPTION; SPECIAL
ASSESSMENT.

Any real or personal property acquired, owned, leased, controlled, used, or occupied
by the city of St. Paul for the primary purpose of providing a stadium for a Major League
Soccer team is declared to be acquired, owned, leased, controlled, used, and occupied for
public, governmental, and municipal purposes, and is exempt from ad valorem taxation by
the state or any political subdivision of the state, provided that the properties are subject to
special assessments levied by a political subdivision for a local improvement in amounts
proportionate to and not exceeding the special benefit received by the properties from the
improvement. In determining the special benefit received by the properties, no possible
use of any of the properties in any manner different from their intended use for providing a
Major League Soccer stadium at the time may be considered. Notwithstanding Minnesota
Statutes, section 272.01, subdivision 2, or 273.19, real or personal property subject to a
lease or use agreement between the city and another person for uses related to the purposes
of the operation of the stadium and related parking facilities is exempt from taxation
regardless of the length of the lease or use agreement. This section, insofar as it provides
an exemption or special treatment, does not apply to any real property that is leased for
residential, business, or commercial development or other purposes different from those
necessary to the provision and operation of the stadium.

EFFECTIVE DATE.

This section is effective upon approval by the St. Paul City
Council and compliance with Minnesota Statutes, section 645.021.

Sec. 36. OPTIONAL CANCELLATION OF TAX FORFEITURE FOR CERTAIN
BUILDINGS; ST. LOUIS COUNTY.

Subdivision 1.

Definitions.

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

(b) "Building PIN" means a parcel identification number that is assigned to a
building and does not include the land upon which the building is located; and

(c) "Land PIN" means a parcel identification number that is assigned to land upon
which a building associated with a building PIN is located.

Subd. 2.

Optional cancellation of tax forfeiture for buildings with building PINs.

Notwithstanding any law to the contrary, if any building associated with a building PIN
and located in St. Louis County forfeits or has forfeited to the state of Minnesota before,
on, or after the date of enactment of this section because of nonpayment of delinquent
property taxes, special assessments, penalties, interest, or costs, the county auditor of St.
Louis County may, with approval from the county board and the commissioner of revenue:

(1) cancel the certificate of forfeiture and set aside the forfeiture without reinstating
the unpaid property taxes, special assessments, penalties, interest, or costs; and

(2) combine the building PIN with its associated land PIN. When this occurs, the
land PIN is the only surviving parcel identification number, and includes both the building
and the land upon which the building is located.

Subd. 3.

Cancellation of tax forfeiture; taxation through date of cancellation.

Notwithstanding any law to the contrary, if the county auditor of St. Louis County cancels
a certificate of forfeiture and sets aside a forfeiture in accordance with subdivision 2,
the affected building is not subject to taxation from the date of forfeiture through the
date of cancellation.

Subd. 4.

Appropriation.

$1,000,000 in fiscal year 2017 only is appropriated from
the general fund to the commissioner of revenue for a grant to St. Louis County that shall
be paid on July 1, 2016. The county may only use the grant to remove any building,
upon the request of the landowner, after the county has complied with the provisions of
subdivision 2.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 37. LAKE MILLE LACS AREA PROPERTY TAX ABATEMENT.

Subdivision 1.

Abatements authorized.

(a) Notwithstanding Minnesota Statutes,
section 375.192, the county boards of Aitkin, Crow Wing, and Mille Lacs Counties may
grant an abatement of local property taxes for taxes payable in 2016 provided that:

(1) the property is classified as 1c, 3a (excluding utility real and personal property),
4c(1), 4c(10), or 4c(11);

(2) on or before February 1, 2017, the taxpayer submits a written application to the
county assessor in the county in which abatement is sought; and

(3) the taxpayer meets qualification requirements established in subdivision 3.

Subd. 2.

Appeals.

An appeal may not be taken to the Tax Court from any order
of the county board made pursuant to the exercise of the discretionary authority granted
in this section.

Subd. 3.

Qualification requirements.

To qualify for abatements under this section,
a taxpayer must:

(1) be located within one of the following municipalities surrounding Lake Mille
Lacs:

(i) in Crow Wing County, the city of Garrison, township of Garrison, or township
of Roosevelt;

(ii) in Aitkin County, the township of Hazelton, township of Wealthwood, township
of Malmo, or township of Lakeside; or

(iii) in Mille Lacs County, the city of Isle, city of Wahkon, city of Onamia, township
of East Side, township of Isle Harbor, township of South Harbor, or township of Kathio;

(2) document a reduction in gross receipts of five percent or greater between two
successive calendar years beginning in 2010 or later; and

(3) be a business in one of the following industries, as defined within the North
American Industry Classification System: accommodation, restaurants, bars, amusement
and recreation, food and beverages retail, sporting goods, miscellaneous retail, general
retail, museums, historical sites, health and personal care, gas station, general merchandise,
business and professional membership, movies, or nonstore retailer, as determined by the
county in consultation with the commissioner of employment and economic development.

Subd. 4.

State general levy in relief area.

The counties of Aitkin, Crow Wing, and
Mille Lacs must refund the state general levy levied upon a property classified as 1c, 3a
(excluding utility real and personal property), or 4c(1) that is located in the area described
by subdivision 3, clause (1), for taxes payable in 2016. No refund may be issued to a
taxpayer whose property taxes are delinquent.

Subd. 5.

Certification and transfer of funds.

(a) By April 1, 2017, a county
granting a refund as required under subdivision 4 must certify the total amount of state
general tax refunded to Mille Lacs County and the commissioner of revenue. By May 1,
2017, Mille Lacs County must transfer an amount equal to the amount certified under this
paragraph to the county making the certification.

(b) By April 1, 2017, a county that has received an application for an abatement
authorized under subdivision 1 must certify to Mille Lacs County the total amount of
abatements for which applications have been received and approved. By May 1, 2017,
Mille Lacs County must transfer an amount equal to the amount certified under this
paragraph to the county making the certification. If the amount appropriated under
subdivision 6, minus the amount transferred under paragraph (a), is not sufficient to make
the transfer required under this paragraph, Mille Lacs County must reduce the amount
transferred to each county by a uniform percentage. By June 30, 2017, the county must
issue refunds of local property tax amounts to qualified properties, in proportion to the
amount received from Mille Lacs County. No refund may be issued to a taxpayer whose
property taxes are delinquent.

(c) By August 1, 2017, Mille Lacs County must calculate the amount transferred
under paragraphs (a) and (b), and subtract that amount from $1,400,000 to obtain the
ongoing economic relief distribution amount, if any. This amount must be transferred to
the counties of Aitkin, Crow Wing, and Mille Lacs in proportion to the amounts certified
by each county under paragraphs (a) and (b). A county receiving a transfer under this
paragraph must use the funds received to provide abatements to business properties under
economic hardship for taxes payable in 2017, and each year thereafter until a county's
share of the ongoing economic relief distribution amount is exhausted.

Subd. 6.

Commissioner of revenue; appropriation.

$1,400,000 in fiscal year 2017
is appropriated from the general fund to the commissioner of revenue for transfer to
Mille Lacs County to make the transfers required under subdivision 5. This is a onetime
appropriation.

Subd. 7.

Report to legislature.

The commissioner of revenue must make a
written report to the chairs and ranking minority members of the legislative committees
with jurisdiction over taxes stating the amount of abatements and refunds given under
this section by taxing jurisdictions by February 1, 2018. The counties must provide the
commissioner with the information necessary to make the report.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 38. REPEALER.

Minnesota Statutes 2014, section 272.02, subdivision 23, is repealed.

EFFECTIVE DATE.

This section is effective for taxes payable in 2017 and
thereafter.

ARTICLE 2

AIDS AND CREDITS

Section 1.

[273.1387] SCHOOL BUILDING BOND AGRICULTURAL CREDIT.

Subdivision 1.

Eligibility.

All class 2a, 2b, and 2c property under section 273.13,
subdivision 23, other than property consisting of the house, garage, and immediately
surrounding one acre of land of an agricultural homestead, is eligible to receive the credit
under this section.

Subd. 2.

Credit amount.

For each qualifying property, the school building bond
agricultural credit is equal to 40 percent of the property's eligible net tax capacity
multiplied by the school debt tax rate determined under section 275.08, subdivision 1b.

Subd. 3.

Credit reimbursements.

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

Subd. 4.

Payment.

The commissioner of revenue shall certify the total of the tax
reductions granted under this section for each taxes payable year within each school
district to the commissioner of education, who shall pay the reimbursement amounts to
each school district as provided in section 273.1392.

Subd. 5.

Appropriation.

An amount sufficient to make the payments required by this
section is annually appropriated from the general fund to the commissioner of education.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 2.

Minnesota Statutes 2014, section 273.1392, is amended to read:


273.1392 PAYMENT; SCHOOL DISTRICTS.

The amounts of bovine tuberculosis credit reimbursements under section 273.113;
conservation tax credits under section 273.119; disaster or emergency reimbursement
under sections 273.1231 to 273.1235; homestead and agricultural credits under section
sections 273.1384 and 273.1387; aids and credits under section 273.1398; enterprise zone
property credit payments under section 469.171; and metropolitan agricultural preserve
reduction under section 473H.10 for school districts, shall be certified to the Department
of Education by the Department of Revenue. The amounts so certified shall be paid
according to section 127A.45, subdivisions 9 and 13.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 3.

Minnesota Statutes 2014, section 273.1393, is amended to read:


273.1393 COMPUTATION OF NET PROPERTY TAXES.

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

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

(2) powerline credit as provided in section 273.42;

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

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

(5) disparity reduction credit;

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

(7) the school bond credit, as provided in section 273.1387;

(8) agricultural credit as provided in section 273.1384;

(8) (9) taconite homestead credit as provided in section 273.135;

(9) (10) supplemental homestead credit as provided in section 273.1391; and

(10) (11) the bovine tuberculosis zone credit, as provided in section 273.113.

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

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 4.

Minnesota Statutes 2014, section 275.065, subdivision 3, is amended to read:


Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare
and the county treasurer shall deliver after November 10 and on or before November 24
each year, by first class mail to each taxpayer at the address listed on the county's current
year's assessment roll, a notice of proposed property taxes. Upon written request by
the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
instead of on paper or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes
each taxing authority proposes to collect for taxes payable the following year. In the case of
a town, or in the case of the state general tax, the final tax amount will be its proposed tax.
The notice must clearly state for each city that has a population over 500, county, school
district, regional library authority established under section 134.201, and metropolitan
taxing districts as defined in paragraph (i), the time and place of a meeting for each taxing
authority in which the budget and levy will be discussed and public input allowed, prior to
the final budget and levy determination. The taxing authorities must provide the county
auditor with the information to be included in the notice on or before the time it certifies
its proposed levy under subdivision 1. The public must be allowed to speak at that
meeting, which must occur after November 24 and must not be held before 6:00 p.m. It
must provide a telephone number for the taxing authority that taxpayers may call if they
have questions related to the notice and an address where comments will be received by
mail, except that no notice required under this section shall be interpreted as requiring the
printing of a personal telephone number or address as the contact information for a taxing
authority. If a taxing authority does not maintain public offices where telephone calls can
be received by the authority, the authority may inform the county of the lack of a public
telephone number and the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used
for computing property taxes payable in the following year and for taxes payable in the
current year as each appears in the records of the county assessor on November 1 of the
current year; and, in the case of residential property, whether the property is classified as
homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
which the market values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state
general tax, agricultural homestead credit under section 273.1384, school building bond
agricultural credit under section 273.1387,
voter approved school levy, other local school
levy, and the sum of the special taxing districts, and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement
district as defined under sections 103B.501 to 103B.581, the amount attributable for that
purpose must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed
tax unless the town changes its levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision 9, that a referendum will
be held in the school district at the November general election, the county auditor must
note next to the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the notice. In the
case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
listed separately from the remaining amount of the city's levy. In the case of the city of
St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In the case of Ramsey County, any amount levied
under section 134.07 may be listed separately from the remaining amount of the county's
levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide tax must each be stated
separately and not included in the sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under
the senior citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include
the following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified,
including bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first
Monday in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster
occurring after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value
reductions for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or
the county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
renter, or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within
three days of receipt of the notice, whichever is later. A taxpayer may notify the county
treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
which the notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
473.446, 473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent
of the county board, include supplemental information with the statement of proposed
property taxes about the impact of state aid increases or decreases on property tax
increases or decreases and on the level of services provided in the affected jurisdiction.
This supplemental information may include information for the following year, the current
year, and for as many consecutive preceding years as deemed appropriate by the governing
body of the county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and
local government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 5.

Minnesota Statutes 2014, section 275.07, subdivision 2, is amended to read:


Subd. 2.

School district in more than one county levies; special requirements.

(a)
In school districts lying in more than one county, the clerk shall certify the tax levied to the
auditor of the county in which the administrative offices of the school district are located.

(b) The district must identify the portion of the school district levy that is levied for
debt service at the time the levy is certified under this section. For the purposes of this
paragraph, "levied for debt service" means levies authorized under sections 123B.53,
123B.535, and 123B.55, as adjusted by sections 126C.46 and 126C.48, net of any debt
excess levy reductions under section 475.61, subdivision 4, excluding debt service
amounts necessary for repayment of other postemployment benefits under section 475.52,
subdivision 6.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 6.

Minnesota Statutes 2014, section 275.08, subdivision 1b, is amended to read:


Subd. 1b.

Computation of tax rates.

(a) The amounts certified to be levied against
net tax capacity under section 275.07 by an individual local government unit shall be
divided by the total net tax capacity of all taxable properties within the local government
unit's taxing jurisdiction. The resulting ratio, the local government's local tax rate,
multiplied by each property's net tax capacity shall be each property's net tax capacity tax
for that local government unit before reduction by any credits.

(b) The auditor must also determine the school debt tax rate for each school district
equal to (1) the school debt service levy certified under section 275.07, subdivision 2,
divided by (2) the total net tax capacity of all taxable property within the district.

(c) Any amount certified to the county auditor to be levied against market value shall
be divided by the total referendum market value of all taxable properties within the taxing
district. The resulting ratio, the taxing district's new referendum tax rate, multiplied by
each property's referendum market value shall be each property's new referendum tax
before reduction by any credits. For the purposes of this subdivision, "referendum market
value" means the market value as defined in section 126C.01, subdivision 3.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 7.

Minnesota Statutes 2014, section 276.04, subdivision 2, is amended to read:


Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing
of the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated.
The amounts due all other special taxing districts, if any, may be aggregated except that
any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota,
Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate
line directly under the appropriate county's levy. If the county levy under this paragraph
includes an amount for a lake improvement district as defined under sections 103B.501
to 103B.581, the amount attributable for that purpose must be separately stated from the
remaining county levy amount. In the case of Ramsey County, if the county levy under this
paragraph includes an amount for public library service under section 134.07, the amount
attributable for that purpose may be separated from the remaining county levy amount.
The amount of the tax on homesteads qualifying under the senior citizens' property tax
deferral program under chapter 290B is the total amount of property tax before subtraction
of the deferred property tax amount. The amount of the tax on contamination value
imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar
amounts, including the dollar amount of any special assessments, may be rounded to the
nearest even whole dollar. For purposes of this section whole odd-numbered dollars may
be adjusted to the next higher even-numbered dollar. The amount of market value excluded
under section 273.11, subdivision 16, if any, must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's homestead market value exclusion under section 273.13,
subdivision 35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for homestead agricultural properties, the credit credits under section sections
273.1384 and 273.1387;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
credit received under section 273.135 must be separately stated and identified as "taconite
tax relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 8.

[477A.0126] REIMBURSEMENT OF COUNTY AND TRIBES FOR
CERTAIN OUT-OF-HOME PLACEMENT.

Subdivision 1.

Definition.

When used in this section, "out-of-home placement"
means 24-hour substitute care for an Indian child as defined by section 260C.007,
subdivision 21, placed under the Indian Child Welfare Act (ICWA) and chapter 260C,
away from the child's parent or guardian and for whom the county social services agency
or county correctional agency has been assigned responsibility for the child's placement
and care, which includes placement in foster care under section 260C.007, subdivision
18, and a correctional facility pursuant to a court order.

Subd. 2.

Determination of nonfederal share of costs.

(a) By January 1, 2017, each
county shall report the following information to the commissioners of human services and
corrections: (1) the separate amounts paid out of its social service agency and its corrections
budget for out-of-home placement of children under the ICWA in calendar years 2013,
2014, and 2015; and (2) the number of case days associated with the expenditures from
each budget. By March 15, 2017, the commissioner of human services, in consultation with
the commissioner of corrections, shall certify to the commissioner of revenue and to the
legislative committees responsible for local government aids and out-of-home placement
funding, whether the data reported under this subdivision accurately reflects total
expenditures by counties for out-of-home placement costs of children under the ICWA.

(b) By January 1, 2019, and each January 1 thereafter, each county shall report to the
commissioners of human services and corrections the separate amounts paid out of its
social service agency and its corrections budget for out-of-home placement of children
under the ICWA in the calendar years two years before the current calendar year along
with the number of case days associated with the expenditures from each budget.

(c) Until the commissioner of human services develops another mechanism for
collecting and verifying data on out-of-home placements of children under the ICWA, and
the legislature authorizes the use of that data, the data collected under this subdivision
must be used to calculate payments under subdivision 3. The commissioner of human
services shall certify the nonfederal out-of-home placement costs for the three prior
calendar years for each county to the commissioner of revenue by June 1 of the year
prior to the aid payment.

Subd. 3.

Aid payments to counties.

For aids payable in calendar year 2018 and
thereafter, the commissioner of revenue shall reimburse each county for 100 percent of
the nonfederal share of the cost of out-of-home placement of children under the ICWA
provided the commissioner of human services, in consultation with the commissioner
of corrections, certifies to the commissioner of revenue that accurate data is available
to make the aid determination under this section. The amount of reimbursement is the
county's average nonfederal share of the cost for out-of-home placement of children
under the ICWA for the most recent three calendar years for which data is available.
The commissioner shall pay the aid under the schedule used for local government aid
payments under section 477A.015.

Subd. 4.

Aid payments to tribes.

(a) By January 1, 2017, and each year
thereafter, each tribe must certify to the commissioner of revenue the amount of federal
reimbursement received by the tribe for out-of-home placement of children under the
ICWA for the immediately preceding three calendar years. The commissioner of revenue
shall prescribe the format of the certification. For purposes of this section, "tribe" has the
meaning provided in section 260.755, subdivision 12.

(b) The amount of reimbursement to the tribe shall be the greater of: (1) five
percent of the average reimbursement amount received from the federal government for
out-of-home placement costs for the most recent three calendar years; or (2) $200,000.
The commissioner shall pay the aid under this section under the schedule used for local
government aid payments under section 477A.015.

Subd. 5.

Appropriation.

An amount sufficient to pay aid under this section is
annually appropriated to the commissioner of revenue from the general fund.

EFFECTIVE DATE.

This section is effective beginning with aids payable in 2018.

Sec. 9.

Minnesota Statutes 2015 Supplement, section 477A.015, is amended to read:


477A.015 PAYMENT DATES.

(a) The commissioner of revenue shall make the payments of local government aid
to affected taxing authorities in two installments on July 20 and December 26 annually.

(b) Notwithstanding paragraph (a), for aids payable in 2017 only, the commissioner
of revenue shall make payments of the aid payable under section 477A.013, subdivision
9, in three installments as follows: (1) 6.5 percent of the aid shall be paid on June 15,
2017; (2) 43.5 percent of the aid shall be paid on July 20, 2017; and (3) 50 percent of the
aid shall be paid on December 26, 2017.

(c) When the commissioner of public safety determines that a local government has
suffered financial hardship due to a natural disaster, the commissioner of public safety
shall notify the commissioner of revenue, who shall make payments of aids under sections
477A.011 to 477A.014, which are otherwise due on December 26, as soon as is practical
after the determination is made but not before July 20.

(d) The commissioner may pay all or part of the payments of aids under sections
477A.011 to 477A.014, which are due on December 26 at any time after August 15 if a local
government requests such payment as being necessary for meeting its cash flow needs.

EFFECTIVE DATE.

This section is effective beginning with aids payable in 2017.

Sec. 10.

Minnesota Statutes 2014, section 477A.017, subdivision 2, is amended to read:


Subd. 2.

State auditor's duties.

The state auditor shall prescribe uniform financial
accounting and reporting standards in conformity with national standards to be applicable
to cities and towns of more than 2,500 population and uniform reporting standards to be
applicable to cities and towns of less than 2,500 population.

EFFECTIVE DATE.

This section applies to reporting of financial information for
calendar year 2016 and thereafter.

Sec. 11.

Minnesota Statutes 2014, section 477A.017, subdivision 3, is amended to read:


Subd. 3.

Conformity.

Other law to the contrary notwithstanding, in order to receive
distributions under sections 477A.011 to 477A.03, counties and, cities, and towns must
conform to the standards set in subdivision 2 in making all financial reports required to be
made to the state auditor after June 30, 1984.

EFFECTIVE DATE.

This section applies to reporting of financial information for
aids payable in 2017 and thereafter.

Sec. 12.

Minnesota Statutes 2015 Supplement, section 477A.03, subdivision 2a,
is amended to read:


Subd. 2a.

Cities.

The total aid paid under section 477A.013, subdivision 9, is
$516,898,012 for aids payable in 2015. For aids payable in 2016 and thereafter, the total
aid paid under section 477A.013, subdivision 9, is $519,398,012. For aids payable in 2017
and thereafter, the total aid paid under section 477A.013, subdivision 9, is $539,398,012.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2017 and thereafter.

Sec. 13.

Minnesota Statutes 2014, section 477A.03, subdivision 2b, is amended to read:


Subd. 2b.

Counties.

(a) For aids payable in 2014 and thereafter through 2016, the
total aid payable under section 477A.0124, subdivision 3, is $100,795,000. For aids
payable in 2017 through 2024, the total aid payable under section 477A.0124, subdivision
3, is $108,795,000, of which $3,000,000 shall be allocated as required under Laws 2014,
chapter 150, article 4, section 6. For aids payable in 2025 and thereafter, the total aid
payable under section 477A.0124, subdivision 3, is $105,795,000
. Each calendar year,
$500,000 of this appropriation shall be retained by the commissioner of revenue to
make reimbursements to the commissioner of management and budget for payments
made under section 611.27. The reimbursements shall be to defray the additional costs
associated with court-ordered counsel under section 611.27. Any retained amounts not
used for reimbursement in a year shall be included in the next distribution of county
need aid that is certified to the county auditors for the purpose of property tax reduction
for the next taxes payable year.

(b) For aids payable in 2014 and thereafter 2016, the total aid under section
477A.0124, subdivision 4, is $104,909,575. For aids payable in 2017 and thereafter,
the total aid payable under section 477A.0124, subdivision 4, is $109,909,575
. The
commissioner of revenue shall transfer to the commissioner of management and budget
$207,000 annually for the cost of preparation of local impact notes as required by section
3.987, and other local government activities. The commissioner of revenue shall transfer
to the commissioner of education $7,000 annually for the cost of preparation of local
impact notes for school districts as required by section 3.987. The commissioner of
revenue shall deduct the amounts transferred under this paragraph from the appropriation
under this paragraph. The amounts transferred are appropriated to the commissioner of
management and budget and the commissioner of education respectively.

EFFECTIVE DATE.

This section is effective for aids payable in 2017 and thereafter.

Sec. 14.

[477A.09] MAXIMUM EFFORT LOAN AID.

For fiscal years 2018 through 2022, each school district with a maximum effort loan
under sections 126C.61 to 126C.72 outstanding as of June 30, 2016, is eligible for an aid
payment equal to one-fifth of the amount of interest that was paid on the loan between
December 1, 1997, and June 30, 2016. Aid payments under this section must be used to
reduce property taxes levied on net tax capacity within the district. Aid under this section
must be paid in fiscal years 2018 through 2022, in the manner provided under section
127A.45, subdivisions 9 and 13. An amount sufficient to make aid payments under this
section is annually appropriated from the general fund to the commissioner of education.

EFFECTIVE DATE.

This section is effective for fiscal years 2018 and thereafter.

Sec. 15.

[477A.21] RIPARIAN PROTECTION AID.

Subdivision 1.

Definitions.

(a) When used in this section, the following terms have
the meanings given them in this subdivision.

(b) "Public water basins" has the meaning provided in section 103G.005, subdivision
15, clauses (1) to (8) and (11).

(c) "Public watercourses" has the meaning provided in section 103G.005,
subdivision 15, clauses (9) and (10).

Subd. 2.

Certification.

The Board of Water and Soil Resources must certify to the
commissioner of revenue by July 1 of each year which counties and watershed districts
have affirmed their jurisdiction under section 103F.48, subdivision 7, paragraph (b), and
the proportion of each county's land area that is contained in each watershed district
within the county. On or before July 1 of each year, the commissioner of natural resources
shall certify to the commissioner of revenue the statewide and countywide total of miles of
shoreline of public waters basins, the number of centerline miles of public watercourses,
and the miles of public drainage system ditches.

Subd. 3.

Distribution.

(a) A county that is certified under subdivision 2 or that
portion of a county containing a watershed district certified under subdivision 2 is eligible
to receive aid under this section to enforce and implement the riparian protection and water
quality practices under section 103F.48. The commissioner shall calculate a preliminary
aid for all counties that shall equal: (1) each county's share of the total number of acres
in the state classified as class 2a under section 273.13, subdivision 23, divided by two;
plus (2) each county's share of the number of miles of shoreline of public water basins,
each county's share of the number of centerline miles of public watercourses, and each
county's share of the number of miles of public drainage system ditches established under
chapter 103E, divided by two; multiplied by (3) $10,000,000.

(b) Aid to a county shall not be greater than $200,000 or less than $45,000. If the
sum of the preliminary aids payable to counties under paragraph (a) is greater or less than
the appropriation under subdivision 5, the commissioner of revenue shall calculate the
percentage adjustment necessary so that the total of the aid under paragraph (a) equals the
total amount available for aid under subdivision 5.

(c) If only a portion of a county is certified as eligible to receive aid under subdivision
2, the aid otherwise payable to that county under this section shall be multiplied by a
fraction, the numerator of which is the area of the certified watershed district contained
within the county and the denominator of which is the total area of the county.

(d) Any aid that would otherwise be paid to a county or portion of a county that is
not certified under subdivision 2 shall be paid to the Board of Water and Soil Resources
for the purpose of enforcing and implementing the riparian protection and water quality
practices under section 103F.48.

Subd. 4.

Payments.

The commissioner of revenue must compute the amount of
riparian protection aid payable to each eligible county and to the Board of Water and Soil
Resources under this section. On or before August 1 of each year, the commissioner shall
certify the amount to be paid to each county in the following year. The commissioner shall
pay riparian protection aid to counties and the Board of Water and Soil Resources in the
same manner and at the same time as aid payments under section 477A.015.

Subd. 5.

Appropriation.

$10,000,000 for aids payable in 2017 and each year
thereafter is appropriated from the general fund to the commissioner of revenue to make
the payments required under this section.

EFFECTIVE DATE.

This section is effective beginning with aids payable in 2017
and thereafter.

Sec. 16.

Laws 2001, First Special Session chapter 5, article 3, section 86, is amended
to read:


Sec. 86. RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT
IN LIEU OF TAXES.

(a) The Red River watershed management board may spend money from its general
fund to compensate counties and townships for lost tax revenue from land that becomes
tax exempt after it is acquired by the board or a member watershed district for flood
damage reduction project. The amount that may be paid under this section to a county
or township must not exceed the tax that was payable to that taxing jurisdiction on the
land in the last taxes payable year before the land became exempt due to the acquisition,
not to exceed $4 $5.133 per acre, multiplied by 20. This total amount may be paid in one
payment, or in equal annual installments over a period that does not exceed 20 years. A
member watershed district of the Red River management board may spend money from its
construction fund for the purposes described in this section.

(b) For the purposes of this section, "Red River watershed management board"
refers to the board established by Laws 1976, chapter 162, section 1, as amended by Laws
1982, chapter 474, section 1, Laws 1983, chapter 338, section 1, Laws 1989 First Special
Session chapter 1, article 5, section 45, Laws 1991, chapter 167, section 1, and Laws
1998, chapter 389, article 3, section 29.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2016 and thereafter.

Sec. 17. 2013 CITY AID PENALTY FORGIVENESS; CITY OF OSLO.

Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the city of
Oslo shall receive the portion of its aid payment for calendar year 2013 under Minnesota
Statutes, section 477A.013, that was withheld under Minnesota Statutes, section
477A.017, subdivision 3, provided that the state auditor certifies to the commissioner
of revenue that it received audited financial statements from the city for calendar year
2012 by December 31, 2013. The commissioner of revenue shall make a payment of
$37,473.50 with the first payment of aids under Minnesota Statutes, section 477A.015.
$37,473.50 is appropriated from the general fund to the commissioner of revenue in fiscal
year 2017 to make this payment.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 18. 2014 AID PENALTY FORGIVENESS.

(a) Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the cities
of Dundee, Jeffers, and Woodstock shall receive all of its calendar year 2014 aid payment
that was withheld under Minnesota Statutes, section 477A.017, subdivision 3, provided
that the state auditor certifies to the commissioner of revenue that the city complied with
all reporting requirements under Minnesota Statutes, section 477A.017, subdivision 3, for
calendar years 2013 and 2014 by June 1, 2015.

(b) The commissioner of revenue shall make payment to each city no later than June
30, 2016. Up to $101,570 is appropriated from the general fund to the commissioner of
revenue in fiscal year 2017 to make the payments under this section.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 19. BASE YEAR FORMULA AID FOR NEWLY INCORPORATED CITY.

In the first aid payable year in which a city that incorporated on October 13, 2015,
qualifies for aid under Minnesota Statutes, section 477A.013, subdivision 8, the city's
formula aid in the previous year shall be deemed to equal $115 multiplied by its population.

EFFECTIVE DATE.

This section is effective for aids payable in 2017 and thereafter.

Sec. 20. REPEALER.

Minnesota Statutes 2014, section 477A.20, is repealed.

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 3

INDIVIDUAL INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES

Section 1.

Minnesota Statutes 2014, section 136A.129, subdivision 3, is amended to
read:


Subd. 3.

Program components.

(a) An intern must be an eligible student who has
been admitted to a major program that is related to the intern experience as determined
by the eligible institution.

(b) To participate in the program, an eligible institution must:

(1) enter into written agreements with eligible employers to provide internships that
are at least eight weeks long and located in greater Minnesota; and

(2) provide academic credit for the successful completion of the internship or ensure
that it fulfills requirements necessary to complete a vocational technical education program.

(c) To participate in the program, an eligible employer must enter into a written
agreement with an eligible institution specifying that the intern:

(1) would not have been hired without the tax credit described in subdivision 4;

(2) did not work for the employer in the same or a similar job prior to entering
the agreement;

(3) (2) does not replace an existing employee;

(4) (3) has not previously participated in the program;

(5) (4) will be employed at a location in greater Minnesota;

(6) (5) will be paid at least minimum wage for a minimum of 16 hours per week
for a period of at least eight weeks; and

(7) (6) will be supervised and evaluated by the employer.

(d) The written agreement between the eligible institution and the eligible employer
must certify a credit amount to the employer, not to exceed $2,000 per intern. The total
dollar amount of credits that an eligible institution certifies to eligible employers in a
calendar year may not exceed the amount of its allocation under subdivision 4.

(e) Participating eligible institutions and eligible employers must report annually to
the office. The report must include at least the following:

(1) the number of interns hired;

(2) the number of hours and weeks worked by interns; and

(3) the compensation paid to interns.

(f) An internship required to complete an academic program does not qualify for the
greater Minnesota internship program under this section.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 2.

Minnesota Statutes 2015 Supplement, section 289A.02, subdivision 7, is
amended to read:


Subd. 7.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, 2014 2015.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Minnesota Statutes 2014, section 290.01, subdivision 7, is amended to read:


Subd. 7.

Resident.

(a) The term "resident" means any individual domiciled
in Minnesota, except that an individual is not a "resident" for the period of time that
the individual is a "qualified individual" as defined in section 911(d)(1) of the Internal
Revenue Code, if the qualified individual notifies the county within three months of
moving out of the country that homestead status be revoked for the Minnesota residence
of the qualified individual, and the property is not classified as a homestead while the
individual remains a qualified individual.

(b) "Resident" also means any individual domiciled outside the state who maintains
a place of abode in the state and spends in the aggregate more than one-half of the tax
year in Minnesota, unless:

(1) the individual or the spouse of the individual is in the armed forces of the United
States; or

(2) the individual is covered under the reciprocity provisions in section 290.081.

For purposes of this subdivision, presence within the state for any part of a calendar
day constitutes a day spent in the state. A day does not qualify as a Minnesota day if
the taxpayer traveled from a place outside of Minnesota primarily for and essential to
obtaining medical care, as defined in Internal Revenue Code, section 213(d)(1)(A), in
Minnesota for the taxpayer, spouse, or a dependent of the taxpayer and the travel expense
is allowed under Internal Revenue Code, section 213(d)(1)(B), and is claimed by the
taxpayer as a deductible expense.
Individuals shall keep adequate records to substantiate
the days spent outside the state.

The term "abode" means a dwelling maintained by an individual, whether or not
owned by the individual and whether or not occupied by the individual, and includes a
dwelling place owned or leased by the individual's spouse.

(c) In determining where an individual is domiciled, neither the commissioner nor
any court shall consider:

(1) charitable contributions made by an the individual within or without the state in
determining if the individual is domiciled in Minnesota.
;

(2) the location of the individual's attorney, certified public accountant, or financial
adviser; or

(3) the place of business of a financial institution at which the individual applies for
any new type of credit or at which the individual opens or maintains any type of account.

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

(1) "financial adviser" means:

(i) an individual or business entity engaged in business as a certified financial
planner, registered investment adviser, licensed insurance producer or agent, or a
registered securities broker-dealer representative; or

(ii) a financial institution providing services related to trust or estate administration,
investment management, or financial planning; and

(2) "financial institution" means a financial institution as defined in section 47.015,
subdivision 1; a state or nationally chartered credit union; or a registered broker-dealer
under the Securities and Exchange Act of 1934.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015, except the amendment to paragraph (b) is effective for taxable years
beginning after December 31, 2016.

Sec. 4.

Minnesota Statutes 2015 Supplement, section 290.01, subdivision 19, is
amended to read:


Subd. 19.

Net income.

The term "net income" means the federal taxable income,
as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
date named in this subdivision, incorporating the federal effective dates of changes to the
Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in subdivisions 19a to 19f.

In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
Revenue Code must be applied by allowing a deduction for capital gain dividends and
exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
Revenue Code; and

(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.

The net income of a real estate investment trust as defined and limited by section
856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

The net income of a designated settlement fund as defined in section 468B(d) of
the Internal Revenue Code means the gross income as defined in section 468B(b) of the
Internal Revenue Code.

The Internal Revenue Code of 1986, as amended through December 31, 2014 2015,
shall be in effect for taxable years beginning after December 31, 1996.

Except as otherwise provided, references to the Internal Revenue Code in
subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
the applicable year.

EFFECTIVE DATE.

This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective retroactively at the same
time as the changes were effective for federal purposes.

Sec. 5.

Minnesota Statutes 2014, 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 state itemized deduction exceeds the amount of the standard deduction as
defined in section 63(c) of the Internal Revenue Code, minus any addition that would have
been required under clause (17) if the taxpayer had claimed the standard deduction. For
the purpose of this clause, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed under clause (15);

(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 under the dollar limits of
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 amount of expenses disallowed under section 290.10, subdivision 2;

(11) for taxable years beginning before January 1, 2010, the amount deducted for
qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
the extent deducted from gross income;

(12) for taxable years beginning before January 1, 2010, 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;

(13) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code;

(14) 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);

(15) the amount of disallowed itemized deductions, but the amount of disallowed
itemized deductions plus the addition required under clause (2) 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, and reduced by any addition that would have been required
under clause (17) if the taxpayer had claimed the standard deduction:

(i) the amount of disallowed itemized deductions is equal to the lesser of:

(A) three percent of the excess of the taxpayer's federal adjusted gross income
over the applicable amount; or

(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
taxpayer under the Internal Revenue Code for the taxable year;

(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
married individual filing a separate return. Each dollar amount shall be increased by
an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;

(iii) the term "itemized deductions" does not include:

(A) the deduction for medical expenses under section 213 of the Internal Revenue
Code;

(B) any deduction for investment interest as defined in section 163(d) of the Internal
Revenue Code; and

(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
Code or for losses described in section 165(d) of the Internal Revenue Code;

(16) the amount of disallowed personal exemptions for taxpayers with federal
adjusted gross income over the threshold amount:

(i) the disallowed personal exemption amount is equal to the number of personal
exemptions allowed under section 151(b) and (c) of the Internal Revenue Code multiplied
by the dollar amount for personal exemptions under section 151(d)(1) and (2) of the
Internal Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal
Revenue Code, and by the applicable percentage;

(ii) "applicable percentage" means two percentage points for each $2,500 (or
fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
year exceeds the threshold amount. In the case of a married individual filing a separate
return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
no event shall the applicable percentage exceed 100 percent;

(iii) the term "threshold amount" means:

(A) $150,000 in the case of a joint return or a surviving spouse;

(B) $125,000 in the case of a head of a household;

(C) $100,000 in the case of an individual who is not married and who is not a
surviving spouse or head of a household; and

(D) $75,000 in the case of a married individual filing a separate return; and

(iv) the thresholds shall be increased by an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and

(17) to the extent deducted in the computation of federal taxable income, for taxable
years beginning after December 31, 2010, and before January 1, 2014, the difference
between the standard deduction allowed under section 63(c) of the Internal Revenue Code
and the standard deduction allowed for 2011, 2012, and 2013 under the Internal Revenue
Code as amended through December 1, 2010.

EFFECTIVE DATE.

This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective retroactively at the same
time as the changes were effective for federal purposes.

Sec. 6.

Minnesota Statutes 2014, 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 (12), 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 (12), 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, including 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); or (ii) federally funded state active service as defined in section 190.05, subdivision
5b
, and "active service" includes 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 under United States Code, title 10; 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 (13), 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 (13), 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
the section 179 expensing subtraction as
provided under section 290.0803, subdivision 3
;

(14) to the extent included in the federal taxable income of a nonresident of
Minnesota, 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) 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;

(16) 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 subdivision 19a, clause (13);

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

(18) the amount of expenses not allowed for federal income tax purposes due
to claiming the railroad track maintenance credit under section 45G(a) of the Internal
Revenue Code;

(19) the amount of the limitation on itemized deductions under section 68(b) of the
Internal Revenue Code;

(20) the amount of the phaseout of personal exemptions under section 151(d) of
the Internal Revenue Code; and

(21) to the extent included in federal taxable income, the amount of qualified
transportation fringe benefits described in section 132(f)(1)(A) and (B) of the Internal
Revenue Code. The subtraction is limited to the lesser of the amount of qualified
transportation fringe benefits received in excess of the limitations under section
132(f)(2)(A) of the Internal Revenue Code for the year or the difference between the
maximum qualified parking benefits excludable under section 132(f)(2)(B) of the Internal
Revenue Code minus the amount of transit benefits excludable under section 132(f)(2)(A)
of the Internal Revenue Code.

(21) the amount equal to the contributions made during the taxable year to an
account in a plan qualifying under section 529 of the Internal Revenue Code, reduced by
any withdrawals from the account during the taxable year, not including amounts rolled
over from other accounts in plans qualifying under section 529 of the Internal Revenue
Code, and not to exceed $3,000 for married couples filing joint returns and $1,500 for
all other filers. The subtraction must not include any amount used to claim the credit
allowed under section 290.0684; and

(22) to the extent included in federal taxable income, the discharge of indebtedness
of the taxpayer if the indebtedness discharged is a qualified education loan, as defined in
section 221 of the Internal Revenue Code, and the indebtedness was discharged following
the taxpayer's completion of an income-driven repayment plan. For purposes of this
clause, "income-driven repayment plan" means a payment plan established by the United
States Department of Education that sets monthly student loan payments based on income
and family size under United States Code, title 20, section 1087e, or similar authority and
specifically includes, but is not limited to:

(1) the income-based repayment plan under United State Code, title 20, section 1098e;

(2) the income contingent repayment plan established under United State Code,
title 20, section 1087e, subsection (e); and

(3) the PAYE program or REPAYE program established by the Department of
Education under administrative regulations.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 7.

Minnesota Statutes 2014, section 290.01, subdivision 19c, is amended to read:


Subd. 19c.

Corporations; additions to federal taxable income.

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

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

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

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

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

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

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

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

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

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

(10) 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;

(11) any increase in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section 303(b) of Public Law 110-343;

(12) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
has an activity that in the taxable year generates a deduction for depreciation under
section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k)(1)(A) and (k)(4)(A) is allowed;

(13) 80 percent of the amount by which the deduction allowed by section 179 of
the Internal Revenue Code exceeds the deduction allowable by under the dollar limits of
section 179 of the Internal Revenue Code of 1986, as amended through December 31, 2003;

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

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

(16) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code.

EFFECTIVE DATE.

This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective retroactively at the same
time as the changes were effective for federal purposes.

Sec. 8.

Minnesota Statutes 2014, section 290.01, subdivision 19d, is amended to read:


Subd. 19d.

Corporations; modifications decreasing federal taxable income.

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

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

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

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

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

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

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

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

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

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

(6) in the case of mines, oil and gas wells, other natural deposits, and timber for
which percentage depletion was disallowed pursuant to subdivision 19c, clause (8), a
reasonable allowance for depletion based on actual cost. In the case of leases the deduction
must be apportioned between the lessor and lessee in accordance with rules prescribed
by the commissioner. In the case of property held in trust, the allowable deduction must
be apportioned between the income beneficiaries and the trustee in accordance with the
pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
of the trust's income allocable to each;

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

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

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

(10) the amount of disability access expenditures in the taxable year which are not
allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;

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

(12) the amount of salary expenses not allowed for federal income tax purposes due to
claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;

(13) any decrease in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section 303(b) of Public Law 110-343;

(14) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (12), an amount equal to one-fifth of
the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
amount of the addition made by the taxpayer under subdivision 19c, clause (12). The
resulting delayed depreciation cannot be less than zero;

(15) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (13), an amount equal to one-fifth
of the amount of the addition
the section 179 expensing subtraction as provided under
section 290.0803, subdivision 3
;

(16) 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 subdivision 19c, clause (16); and

(17) the amount of expenses not allowed for federal income tax purposes due
to claiming the railroad track maintenance credit under section 45G(a) of the Internal
Revenue Code.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 9.

Minnesota Statutes 2015 Supplement, section 290.01, subdivision 31, is
amended to read:


Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, 2014 2015. Internal Revenue Code also includes any uncodified provision in federal
law that relates to provisions of the Internal Revenue Code that are incorporated into
Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as
amended through March 18, 2010.

EFFECTIVE DATE.

This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective retroactively at the same
time as the changes were effective for federal purposes.

Sec. 10.

Minnesota Statutes 2014, section 290.06, subdivision 22, is amended to read:


Subd. 22.

Credit for taxes paid to another state.

(a) A taxpayer who is liable for
taxes based on net income to another state, as provided in paragraphs (b) through (f), upon
income allocated or apportioned to Minnesota, is entitled to a credit for the tax paid to
another state if the tax is actually paid in the taxable year or a subsequent taxable year. A
taxpayer who is a resident of this state pursuant to section 290.01, subdivision 7, paragraph
(b), and who is subject to income tax as a resident in the state of the individual's domicile
is not allowed this credit unless the state of domicile does not allow a similar credit.

(b) For an individual, estate, or trust, the credit is determined by multiplying the tax
payable under this chapter by the ratio derived by dividing the income subject to tax in the
other state that is also subject to tax in Minnesota while a resident of Minnesota by the
taxpayer's federal adjusted gross income, as defined in section 62 of the Internal Revenue
Code, modified by the addition required by section 290.01, subdivision 19a, clause (1),
and the subtraction allowed by section 290.01, subdivision 19b, clause (1), to the extent
the income is allocated or assigned to Minnesota under sections 290.081 and 290.17.

(c) If the taxpayer is an athletic team that apportions all of its income under section
290.17, subdivision 5, the credit is determined by multiplying the tax payable under this
chapter by the ratio derived from dividing the total net income subject to tax in the other
state by the taxpayer's Minnesota taxable income.

(d) (1) The credit determined under paragraph (b) or (c) shall not exceed the amount
of tax so paid to the other state on the gross income earned within the other state subject
to tax under this chapter,.


nor shall (2) The allowance of the credit does not reduce the taxes paid under this
chapter to an amount less than what would be assessed if such income amount was the
gross income earned within the other state were
excluded from taxable net income.

(e) In the case of the tax assessed on a lump-sum distribution under section
290.032, the credit allowed under paragraph (a) is the tax assessed by the other state on
the lump-sum distribution that is also subject to tax under section 290.032, and shall
not exceed the tax assessed under section 290.032. To the extent the total lump-sum
distribution defined in section 290.032, subdivision 1, includes lump-sum distributions
received in prior years or is all or in part an annuity contract, the reduction to the tax on
the lump-sum distribution allowed under section 290.032, subdivision 2, includes tax paid
to another state that is properly apportioned to that distribution.

(f) If a Minnesota resident reported an item of income to Minnesota and is assessed
tax in such other state on that same income after the Minnesota statute of limitations
has expired, the taxpayer shall receive a credit for that year under paragraph (a),
notwithstanding any statute of limitations to the contrary. The claim for the credit must
be submitted within one year from the date the taxes were paid to the other state. The
taxpayer must submit sufficient proof to show entitlement to a credit.

(g) For the purposes of this subdivision, a resident shareholder of a corporation
treated as an "S" corporation under section 290.9725, must be considered to have paid
a tax imposed on the shareholder in an amount equal to the shareholder's pro rata share
of any net income tax paid by the S corporation to another state. For the purposes of the
preceding sentence, the term "net income tax" means any tax imposed on or measured by
a corporation's net income.

(h) For the purposes of this subdivision, a resident partner of an entity taxed as a
partnership under the Internal Revenue Code must be considered to have paid a tax imposed
on the partner in an amount equal to the partner's pro rata share of any net income tax paid
by the partnership to another state. For purposes of the preceding sentence, the term "net
income" tax means any tax imposed on or measured by a partnership's net income.

(i) For the purposes of this subdivision, "another state":

(1) includes:

(i) the District of Columbia; and

(ii) a province or territory of Canada; but

(2) excludes Puerto Rico and the several territories organized by Congress.

(j) The limitations on the credit in paragraphs (b), (c), and (d), are imposed on a
state by state basis.

(k) For a tax imposed by a province or territory of Canada, the tax for purposes of
this subdivision is the excess of the tax over the amount of the foreign tax credit allowed
under section 27 of the Internal Revenue Code. In determining the amount of the foreign
tax credit allowed, the net income taxes imposed by Canada on the income are deducted
first. Any remaining amount of the allowable foreign tax credit reduces the provincial or
territorial tax that qualifies for the credit under this subdivision.

(l) If the amount of the credit which a qualifying individual is eligible to receive
under this section for tax paid to a qualifying state, disregarding the limitation in paragraph
(d), clause (2), exceeds the tax due under this chapter, the commissioner shall refund the
excess to the individual. An amount sufficient to pay the refunds required by this section
is appropriated to the commissioner from the general fund.

For purposes of this paragraph, "qualifying individual" means a Minnesota resident under
section 290.01, subdivision 7, paragraph (a), who received compensation during the
taxable year for the performance of personal or professional services within a qualifying
state, and "qualifying state" means a state with which an agreement under section 290.081
is not in effect for the taxable year but was in effect for a taxable year beginning before
January 1, 2010.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 11.

Minnesota Statutes 2014, section 290.067, subdivision 1, is amended to read:


Subdivision 1.

Amount of credit.

(a) A taxpayer may take as a credit against the
tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
dependent care credit for which the taxpayer is eligible pursuant to the provisions of
section 21 of the Internal Revenue Code subject to the limitations provided in subdivision
2
except that in determining whether the child qualified as a dependent, income received
as a Minnesota family investment program grant or allowance to or on behalf of the child
must not be taken into account in determining whether the child received more than half
of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of
the Internal Revenue Code do not apply.

(b) If a child who has not attained the age of six years at the close of the taxable year
is cared for at a licensed family day care home operated by the child's parent, the taxpayer
is deemed to have paid employment-related expenses. If the child is 16 months old or
younger at the close of the taxable year, the amount of expenses deemed to have been paid
equals the maximum limit for one qualified individual under section 21(c) and (d) of the
Internal Revenue Code. If the child is older than 16 months of age but has not attained the
age of six years at the close of the taxable year, the amount of expenses deemed to have
been paid equals the amount the licensee would charge for the care of a child of the same
age for the same number of hours of care.

(c) If a married couple:

(1) has a child who has not attained the age of one year at the close of the taxable year;

(2) files a joint tax return for the taxable year; and

(3) does not participate in a dependent care assistance program as defined in section
129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid
for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of
(i) the combined earned income of the couple or (ii) the amount of the maximum limit for
one qualified individual under section 21(c) and (d) of the Internal Revenue Code will
be deemed to be the employment related expense paid for that child. The earned income
limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed
amount. These deemed amounts apply regardless of whether any employment-related
expenses have been paid.

(d) If the taxpayer is not required and does not file a federal individual income tax
return for the tax year, no credit is allowed for any amount paid to any person unless:

(1) the name, address, and taxpayer identification number of the person are included
on the return claiming the credit; or

(2) if the person is an organization described in section 501(c)(3) of the Internal
Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code,
the name and address of the person are included on the return claiming the credit.

In the case of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer exercised due
diligence in attempting to provide the information required.

(e) In the case of a nonresident, part-year resident, or a person who has earned
income not subject to tax under this chapter including earned income excluded pursuant to
section 290.01, subdivision 19b, clause (9), the credit determined under section 21 of the
Internal Revenue Code must be allocated based on the ratio by which the earned income
of the claimant and the claimant's spouse from Minnesota sources bears to the total earned
income of the claimant and the claimant's spouse.

(f) For residents of Minnesota, the subtractions for military pay under section
290.01, subdivision 19b, clauses (10) and (11), are not considered "earned income not
subject to tax under this chapter."

(g) For residents of Minnesota, the exclusion of combat pay under section 112 of
the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."

(h) For taxpayers with federal adjusted gross income in excess of $38,000, the
credit is equal to the lesser of the credit otherwise calculated under this subdivision or the
amount equal to the credit otherwise calculated under this subdivision minus ten percent
of federal adjusted gross income in excess of $38,000, but in no case is the credit less than
zero. For purposes of this paragraph, "federal adjusted gross income" has the meaning
given in section 62 of the Internal Revenue Code.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 12.

Minnesota Statutes 2014, section 290.067, subdivision 2b, is amended to read:


Subd. 2b.

Inflation adjustment.

The commissioner shall adjust the dollar amount
of the income threshold at which the maximum credit begins to be reduced under
subdivision 2 1 by the percentage determined pursuant to the provisions of section 1(f) of
the Internal Revenue Code, except that in section 1(f)(3)(B) the word "1999" "2015" shall
be substituted for the word "1992." For 2001 2017, the commissioner shall then determine
the percent change from the 12 months ending on August 31, 1999 2015, to the 12 months
ending on August 31, 2000 2016, and in each subsequent year, from the 12 months ending
on August 31, 1999 2015, to the 12 months ending on August 31 of the year preceding the
taxable year. The determination of the commissioner pursuant to this subdivision must not
be considered a "rule" and is not subject to the Administrative Procedure Act contained in
chapter 14. The threshold amount as adjusted must be rounded to the nearest $10 amount.
If the amount ends in $5, the amount is rounded up to the nearest $10 amount.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2016.

Sec. 13.

Minnesota Statutes 2015 Supplement, section 290.0671, subdivision 1,
is amended to read:


Subdivision 1.

Credit allowed.

(a) An individual who is a resident of Minnesota is
allowed a credit against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of
the Internal Revenue Code., except that:

(i) the earned income and adjusted gross income limitations of section 32 of the
Internal Revenue Code do not apply; and

(ii) a taxpayer with no qualifying children who has attained the age of 21 but not
attained age 65 before the close of the taxable year and is otherwise eligible for a credit
under section 32 of the Internal Revenue Code may also receive a credit.

(b) For individuals with no qualifying children, the credit equals 2.10 three percent
of the first $6,180 $6,500 of earned income. The credit is reduced by 2.01 three percent
of earned income or adjusted gross income, whichever is greater, in excess of $8,130
$12,000
, but in no case is the credit less than zero.

(c) For individuals with one qualifying child, the credit equals 9.35 12.71 percent
of the first $11,120 $8,350 of earned income. The credit is reduced by 6.02 5.2 percent
of earned income or adjusted gross income, whichever is greater, in excess of $21,190
$21,620
, but in no case is the credit less than zero.

(d) For individuals with two or more qualifying children, the credit equals 11 14.94
percent of the first $18,240 $13,700 of earned income. The credit is reduced by 10.82
9.2
percent of earned income or adjusted gross income, whichever is greater, in excess of
$25,130 $25,640, but in no case is the credit less than zero.

(e) For a part-year resident, the credit must be allocated based on the percentage
calculated under section 290.06, subdivision 2c, paragraph (e).

(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section 290.01,
subdivision 19b
, clause (9), the credit must be allocated based on the ratio of federal
adjusted gross income reduced by the earned income not subject to tax under this chapter
over federal adjusted gross income. For purposes of this paragraph, the subtractions
for military pay under section 290.01, subdivision 19b, clauses (10) and (11), are not
considered "earned income not subject to tax under this chapter."

For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."

(g) For tax years beginning after December 31, 2007, and before December 31, 2010,
and for tax years beginning after
December 31, 2017, the $8,130 $12,000 in paragraph
(b), the $21,190 $21,620 in paragraph (c), and the $25,130 $25,640 in paragraph (d),
after being adjusted for inflation under subdivision 7, are each increased by $3,000 for
married taxpayers filing joint returns. For tax years beginning after December 31, 2008
2017
, the commissioner shall annually adjust the $3,000 by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009
2018
, the commissioner shall then determine the percent change from the 12 months
ending on August 31, 2007, to the 12 months ending on August 31, 2008 2017, and in
each subsequent year, from the 12 months ending on August 31, 2007, to the 12 months
ending on August 31 of the year preceding the taxable year. The earned income thresholds
as adjusted for inflation must be rounded to the nearest $10. If the amount ends in $5, the
amount is rounded up to the nearest $10. The determination of the commissioner under
this subdivision is not a rule under the Administrative Procedure Act.

(h)(1) For tax years beginning after December 31, 2012, and before January 1, 2014,
the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
(d), after being adjusted for inflation under subdivision 7, are increased by $5,340 for
married taxpayers filing joint returns; and (2)
For tax years beginning after December 31,
2013 2015, and before January 1, 2018, the $8,130 $12,000 in paragraph (b), the $21,190
$21,620
in paragraph (c), and the $25,130 $25,640 in paragraph (d), after being adjusted
for inflation under subdivision 7, are each increased by $5,000 for married taxpayers filing
joint returns. For tax years beginning after December 31, 2010, and before January 1,
2012, and for tax years beginning
after December 31, 2013 2015, and before January 1,
2018, the commissioner shall annually adjust the $5,000 by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B), the word "2008" shall be substituted for the word "1992." For 2011
2016
, the commissioner shall then determine the percent change from the 12 months
ending on August 31, 2008, to the 12 months ending on August 31, 2010 2015, and in
each subsequent year, from the 12 months ending on August 31, 2008, to the 12 months
ending on August 31 of the year preceding the taxable year. The earned income thresholds
as adjusted for inflation must be rounded to the nearest $10. If the amount ends in $5, the
amount is rounded up to the nearest $10. The determination of the commissioner under
this subdivision is not a rule under the Administrative Procedure Act.

(i) The commissioner shall construct tables showing the amount of the credit at
various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 14.

Minnesota Statutes 2014, section 290.0671, subdivision 7, is amended to read:


Subd. 7.

Inflation adjustment.

The earned income amounts used to calculate
the credit and the income thresholds at which the maximum credit begins to be reduced
in subdivision 1 must be adjusted for inflation. The commissioner shall adjust by the
percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
Code, except that in section 1(f)(3)(B) the word "2013" "2015" shall be substituted for
the word "1992." For 2015 2017, the commissioner shall then determine the percent
change from the 12 months ending on August 31, 2013 2015, to the 12 months ending
on August 31, 2014 2016, and in each subsequent year, from the 12 months ending on
August 31, 2013 2015, to the 12 months ending on August 31 of the year preceding the
taxable year. The earned income thresholds as adjusted for inflation must be rounded to
the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest
$10 amount. The determination of the commissioner under this subdivision is not a rule
under the Administrative Procedure Act.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2016.

Sec. 15.

Minnesota Statutes 2014, section 290.0674, subdivision 2, is amended to read:


Subd. 2.

Limitations.

(a) For claimants with income not greater than $33,500, the
maximum credit allowed for a family is $1,000 multiplied by the number of qualifying
children in kindergarten through grade 12 in the family. The maximum credit for families
with one qualifying child in kindergarten through grade 12 is reduced by $1 for each $4 of
household income over $33,500, and the maximum credit for families with two or more
qualifying children in kindergarten through grade 12 is reduced by $2 for each $4 of
household income over $33,500, but in no case is the credit less than zero.

For purposes of this section "income" has the meaning given in section 290.067,
subdivision 2a. In the case of a married claimant, a credit is not allowed unless a joint
income tax return is filed.

(b) For a nonresident or part-year resident, the credit determined under subdivision 1
and the maximum credit amount in paragraph (a) must be allocated using the percentage
calculated in section 290.06, subdivision 2c, paragraph (e).

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 16.

Minnesota Statutes 2014, section 290.0674, is amended by adding a
subdivision to read:


Subd. 2a.

Income.

(a) For purposes of this section, "income" means the sum of
the following:

(1) federal adjusted gross income as defined in section 62 of the Internal Revenue
Code; and

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

(i) all nontaxable income;

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

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

(iv) cash public assistance and relief;

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

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

(vii) workers' compensation;

(viii) nontaxable strike benefits;

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

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

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

(xii) nontaxable scholarship or fellowship grants;

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

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

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

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

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

(b) "Income" does not include:

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

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

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

(4) relief granted under chapter 290A;

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

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

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 17.

Minnesota Statutes 2014, section 290.0677, subdivision 1a, is amended to read:


Subd. 1a.

Credit allowed; past military service.

(a) A qualified individual is
allowed a credit against the tax imposed under this chapter for past military service.
The credit equals $750 $1,000. The credit allowed under this subdivision is reduced by
ten percent of adjusted gross income in excess of $30,000 $50,000, but in no case is
the credit less than zero.

(b) For a nonresident or a part-year resident, the credit under this subdivision
must be allocated based on the percentage calculated under section 290.06, subdivision
2c
, paragraph (e).

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 18.

Minnesota Statutes 2014, section 290.068, subdivision 2, is amended to read:


Subd. 2.

Definitions.

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

(a) "Qualified research expenses" means (i) qualified research expenses and basic
research payments as defined in section 41(b) and (e) of the Internal Revenue Code, except
it does not include expenses incurred for qualified research or basic research conducted
outside the state of Minnesota pursuant to section 41(d) and (e) of the Internal Revenue
Code; and (ii) contributions to a nonprofit corporation established and operated pursuant
to the provisions of chapter 317A for the purpose of promoting the establishment and
expansion of business in this state, provided the contributions are invested by the nonprofit
corporation for the purpose of providing funds for small, technologically innovative
enterprises in Minnesota during the early stages of their development.

(b) "Qualified research" means qualified research as defined in section 41(d) of the
Internal Revenue Code, except that the term does not include qualified research conducted
outside the state of Minnesota.

(c) "Base amount" means base amount as defined in section 41(c) of the Internal
Revenue Code, except that the average annual gross receipts must be calculated using
Minnesota sales or receipts under section 290.191 and the definitions contained in clauses
(a) and (b) shall apply. If there are inadequate records or the records are unavailable to
compute or verify the base percentage, a fixed base percentage of 16 percent must be used.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 19.

[290.0682] CREDIT FOR ATTAINING MASTER'S DEGREE IN
TEACHER'S LICENSURE FIELD.

Subdivision 1.

Definitions.

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

(b) "Master's degree program" means a graduate-level program at an accredited
university leading to a master of arts or science degree in a core content area directly
related to a qualified teacher's licensure field. The master's degree program may not
include pedagogy or a pedagogy component. To be eligible under this credit, a licensed
elementary school teacher must pursue and complete a master's degree program in a core
content area in which the teacher provides direct classroom instruction.

(c) "Qualified teacher" means a K-12 teacher who:

(1) holds a continuing license granted by the Minnesota Board of Teaching both
when the teacher begins the master's degree program and when the teacher completes the
master's degree program;

(2) began a master's degree program after June 30, 2016; and

(3) completes the master's degree program during the taxable year.

(d) "Core content area" means the academic subject of reading, English or language
arts, mathematics, science, foreign languages, civics and government, economics, arts,
history, or geography.

Subd. 2.

Credit allowed.

(a) An individual who is a qualified teacher is allowed a
credit against the tax imposed under this chapter. The credit equals $2,500.

(b) For a nonresident or a part-year resident, the credit under this subdivision
must be allocated based on the percentage calculated under section 290.06, subdivision
2c, paragraph (e).

(c) A qualified teacher may claim the credit in this section only one time for each
master's degree program completed in a core content area.

Subd. 3.

Credit refundable.

(a) If the amount of the credit for which an individual
is eligible exceeds the individual's liability for tax under this chapter, the commissioner
shall refund the excess to the individual.

(b) The amount necessary to pay the refunds required by this section is appropriated
to the commissioner from the general fund.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 20.

[290.0683] STUDENT LOAN CREDIT.

Subdivision 1.

Definitions.

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

(b) "Adjusted gross income" means federal adjusted gross income as defined in
section 62 of the Internal Revenue Code. In the case of a married couple filing jointly,
"adjusted gross income" means the adjusted gross income of the taxpayer and spouse.

(c) "Earned income" has the meaning given in section 32(c) of the Internal Revenue
Code, except that "earned income" includes combat pay excluded from federal taxable
income under section 112 of the Internal Revenue Code.

(d) "Education profession" means:

(1) a full-time job in public education; early childhood education, including licensed
or regulated child care, Head Start, and state-funded prekindergarten; school-based library
sciences; and other school-based services; or

(2) a full-time job as a faculty member at a tribal college or university as defined in
section 1059c(b) of the Internal Revenue Code, and other faculty teaching in high-needs
subject areas or areas of shortage, including nurse faculty, foreign language faculty, and
part-time faculty at community colleges, as determined by the United States Secretary
of Education.

(e) "Eligible individual" means an individual who has one or more qualified
education loans related to an undergraduate or graduate degree program of the individual
at a postsecondary educational institution.

(f) "Eligible loan payments" means the amount the eligible individual paid during
the taxable year to pay principal and interest on qualified education loans.

(g) "Postsecondary educational institution" means a postsecondary institution
eligible for state student aid under section 136A.103 or, if the institution is not located in
this state, a postsecondary institution participating in the federal Pell Grant program under
Title IV of the Higher Education Act of 1965, Public Law 89-329, as amended.

(h) "Public service job" means a full-time job in emergency management;
government, excluding time served as a member of Congress; military service; public
safety; law enforcement; public health, including nurses, nurse practitioners, nurses
in a clinical setting, and full-time professionals engaged in health care practitioner
occupations and health care support occupations, as such terms are defined by the Bureau
of Labor Statistics; social work in a public child or family service agency; public interest
law services including prosecution or public defense or legal advocacy on behalf of
low-income communities at a nonprofit organization; public service for individuals with
disabilities or public service for the elderly; public library sciences; or at an organization
that is described in section 501(c)(3) of the Internal Revenue Code and exempt from
taxation under section 501(a) of the Internal Revenue Code.

(i) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred on behalf of the eligible individual.

Subd. 2.

Credit allowed.

(a) An eligible individual is allowed a credit against the
tax due under this chapter. The credit equals a percentage of eligible loan payments in
excess of ten percent of adjusted gross income, up to $1,000, as follows:

(1) for eligible individuals, 50 percent;

(2) for eligible individuals in a public service job, 65 percent; and

(3) for eligible individuals in an education profession, 75 percent.

(b) The credit must not exceed the eligible individual's earned income for the taxable
year.

(c) In the case of a married couple filing a joint return, each spouse is eligible for
the credit in this section.

(d) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).

(e) An eligible individual may receive the credit under this section without regard to
the individual's eligibility for the public service loan forgiveness program under United
States Code, title 20, section 1087e(m).

Subd. 3.

Credit refundable.

If the amount of credit that an individual who is a
resident or part-year resident of Minnesota is eligible to receive under this section exceeds
the individual's tax liability under this chapter, the commissioner shall refund the excess
to the individual. For a nonresident taxpayer, the credit may not exceed the taxpayer's
liability for tax under this chapter.

Subd. 4.

Appropriation.

An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 21.

[290.0684] SECTION 529 COLLEGE SAVINGS PLAN CREDIT.

Subdivision 1.

Definitions.

For purposes of this section, the term "federal adjusted
gross income" has the meaning given under section 62(a) of the Internal Revenue Code,
and "nonqualified distribution" means any distribution that is includible in gross income
under section 529 of the Internal Revenue Code.

Subd. 2.

Credit allowed.

(a) A credit of up to $500 is allowed to a resident
individual against the tax imposed by this chapter, subject to the limitations in paragraph
(b). The credit is not allowed to an individual who is eligible to be claimed as a dependent,
as defined in sections 151 and 152 of the Internal Revenue Code.

(b) The credit allowed must be calculated by applying the following rates to the
amount contributed to an account in a plan qualifying under section 529 of the Internal
Revenue Code, in a taxable year, reduced by any withdrawals from the account made
during the taxable year, and not including any amounts rolled over from other accounts in
plans qualifying under section 529 of the Internal Revenue Code:

(1) 50 percent for individual filers and married couples filing a joint return who have
federal adjusted gross income of not more than $80,000;

(2) 25 percent for married couples filing a joint return who have federal adjusted
gross income over $80,000, but not more than $100,000;

(3) ten percent for married couples filing a joint return who have federal adjusted
gross income over $100,000, but not more than $120,000; and

(4) five percent for married couples filing a joint return who have federal adjusted
gross income over $120,000, but not more than $160,000.

(c) The income thresholds in paragraph (b), clauses (1) to (4), used to calculate the
credit, must be adjusted for inflation. The commissioner shall adjust by the percentage
determined under the provisions of section 1(f) of the Internal Revenue Code, except that
in section 1(f)(3)(B) the word "2015" is substituted for the word "1992." For 2017, the
commissioner shall then determine the percent change from the 12 months ending on
August 31, 2015, to the 12 months ending on August 31, 2016, and in each subsequent
year, from the 12 months ending on August 31, 2015, to the 12 months ending on August
31 of the year preceding the taxable year. The income thresholds as adjusted for inflation
must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is
rounded up to the nearest $10 amount. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act including section 14.386.

Subd. 3.

Credit refundable.

If the amount of credit that an individual is eligible
to receive under this section exceeds the individual's tax liability under this chapter, the
commissioner shall refund the excess to the individual.

Subd. 4.

Allocation.

For a part-year resident, the credit must be allocated based on
the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

Subd. 5.

Recapture of credit.

In the case of a nonqualified distribution, the
taxpayer is liable to the commissioner for the lesser of: ten percent of the amount of the
nonqualified distribution, or the sum of credits received under this section for all years.

Subd. 6.

Appropriation.

An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 22.

[290.0803] SECTION 179 EXPENSING SUBTRACTION.

Subdivision 1.

Current year allowance.

(a) In each of the five tax years
immediately following the tax year in which an addition is required under section 290.01,
subdivision 19a, clause (8), or 19c, clause (13), the current year allowance equals one-fifth
of the addition made by the taxpayer under section 290.01, subdivision 19a, clause (8),
or 19c, clause (13).

(b) In the case of a shareholder of a corporation that is an S corporation, the current
year allowance is reduced by the positive value of any net operating loss under section
172 of the Internal Revenue Code generated for the tax year of the addition and, if the net
operating loss exceeds the addition for the tax year, the current year allowance is zero.

Subd. 2.

Section 179 expensing carryover.

For purposes of this section, the current
year allowance determined under subdivision 1 is considered to be the last modification
allowed under section 290.01, subdivision 19b or 19d, in determining net income. If the
amount allowed under subdivision 1 exceeds net income computed without regard to the
current year allowance, then the excess is a section 179 expensing carryover to each of the
ten succeeding taxable years. The entire amount of the section 179 expensing carryover
is carried first to the earliest taxable year to which the section 179 expensing carryover
may be carried and then to each successive year to which the section 179 expensing
carryover may be carried.

Subd. 3.

Section 179 expensing subtraction.

A taxpayer is allowed a section 179
expensing subtraction from federal taxable income under section 290.01, subdivision 19b
or 19d. The subtraction equals the sum of:

(1) the current year allowance determined under subdivision 1; and

(2) any section 179 expensing carryover from prior taxable years determined under
subdivision 2.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 23.

Minnesota Statutes 2014, 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), and (11) to (14);

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;

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b
, clauses (6), (8) to (14), (16), and (21) (22); and

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

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

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

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

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

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

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

Sec. 24.

Minnesota Statutes 2015 Supplement, section 290A.03, subdivision 15,
is amended to read:


Subd. 15.

Internal Revenue Code.

"Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 2014 2015.

EFFECTIVE DATE.

This section is effective retroactively for property tax refunds
based on property taxes payable after December 31, 2015, and rent paid after December
31, 2014.

Sec. 25.

Minnesota Statutes 2015 Supplement, section 291.005, subdivision 1, is
amended to read:


Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following
terms used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
increased by the value of any property in which the decedent had a qualifying income
interest for life and for which an election was made under section 291.03, subdivision 1d,
for Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through December 31, 2014 2015.

(4) "Minnesota gross estate" means the federal gross estate of a decedent after
(a) excluding therefrom any property included in the estate which has its situs outside
Minnesota, and (b) including any property omitted from the federal gross estate which
is includable in the estate, has its situs in Minnesota, and was not disclosed to federal
taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person
appointed by the court to administer and dispose of the property of the decedent. If there
is no executor, administrator or other person appointed, qualified, and acting within this
state, then any person in actual or constructive possession of any property having a situs in
this state which is included in the federal gross estate of the decedent shall be deemed
to be a personal representative to the extent of the property and the Minnesota estate tax
due with respect to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and
(d), apply to determinations of domicile under this chapter.

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept
or located at the time of the decedent's death or for a gift of tangible personal property
within three years of death, the state or country in which it was normally kept or located
when the gift was executed;

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was
domiciled at death or for a gift of intangible personal property within three years of death,
the state or country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent.
If the pass-through entity is owned by a person or persons in addition to the decedent,
ownership of the property is attributed to the decedent in proportion to the decedent's
capital ownership share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of
whether it is taxed as an association or is disregarded for federal income tax purposes
under Code of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includible in the decedent's federal gross
estate; but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under
section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.

EFFECTIVE DATE.

This section is effective retroactively for estates of decedents
dying after December 31, 2015.

Sec. 26.

Minnesota Statutes 2014, section 291.03, is amended by adding a subdivision
to read:


Subd. 12.

Certain dispositions to government entities.

Notwithstanding any
provision of this section, no taxpayer is disqualified for the subtraction provided under
section 291.016, subdivision 3, nor is any taxpayer liable for the recapture tax provided in
subdivision 11, solely because the state, any local government unit, or any other entity
that has the power of eminent domain acquires title or possession of the land for a public
purpose within the three-year holding period.

EFFECTIVE DATE.

This section is effective retroactively for estates of decedents
dying after June 30, 2011.

Sec. 27. AMENDED RETURNS.

Subdivision 1.

Certain IRA rollovers.

An individual who excludes an amount
from net income in a prior taxable year through rollover of an airline payment amount to
a traditional IRA, as authorized under Public Law 114-113, division Q, title III, section
307, may file an amended individual income tax return and claim for refund of state taxes
as provided under Minnesota Statutes, section 289A.40, subdivision 1, or, if later, by
September 1, 2016.

Subd. 2.

Exclusion for certain incarcerated individuals.

An individual who
excludes from net income in a prior taxable year civil damages, restitution, or other
monetary award received as compensation for a wrongful incarceration, as authorized
under Public Law 114-113, division Q, title III, section 304, may file an amended
individual income tax return and claim for refund of state taxes as provided under
Minnesota Statutes, section 289A.40, subdivision 1, or, if later, by September 1, 2016.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 28. ESTATE TAX REVIEW; TEMPORARY LIMIT ON ASSESSMENTS.

(a) The commissioner of revenue shall:

(1) review the estate tax's definition of qualified farm property and its linkage to the
property tax classification of the property during the three-year period following the
death of the decedent; and

(2) by February 1, 2017, report to the committees of the house of representatives
and the senate with jurisdiction over taxes on alternative methods of ensuring that the
use of the property by qualified heirs during the three-year period after the decedent's
death is consistent with the purpose of limiting the subtraction to properties where its use
continues that of the decedent without any material change in its use by the qualified heirs
and its ownership is consistent with maintaining family ownership of the farm.

(b) Prior to June 1, 2017, the commissioner of revenue shall not assess recapture tax
under Minnesota Statutes, section 291.03, subdivision 11, for a change in the property tax
classification of agricultural homestead property if the following conditions are satisfied:

(1) the property is held in a trust of which the surviving spouse is a beneficiary; and

(2) the property receives partial homestead classification because a beneficiary of
the trust is the owner of another agricultural homestead.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 29. INDIVIDUAL INCOME TAX COLLECTION ACTION PROHIBITED.

Notwithstanding any law to the contrary, the commissioner of revenue shall not
increase the amount due or decrease the refund for an individual income tax return for
the taxable year beginning after December 31, 2014, and before January 1, 2016, to the
extent the amount due was understated or the refund was overstated because the taxpayer
calculated the tax or refund based on the Internal Revenue Code, as amended through
December 31, 2014, rather than based on the Internal Revenue Code, as amended through
December 31, 2015, as provided in this act.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 30. REPEALER.

Minnesota Statutes 2014, section 290.067, subdivisions 2 and 2a, are repealed.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2015.

ARTICLE 4

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2014, 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. In applying the provisions of this
chapter, the terms "tangible personal property" and "retail sale" include the taxable
services listed in paragraph (g), 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).

(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, 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 and including accommodations intermediary services provided in connection with
other services provided under this clause;

(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; 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.
For purposes of this clause, "road construction" means construction of:

(i) public roads;

(ii) cartways; and

(iii) private roads in townships located outside of the seven-county metropolitan area
up to the point of the emergency response location sign; 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 or any organization at the direction of a county 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.

(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, and pay television services. 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.

(l) A sale and a purchase includes furnishing for a consideration of specified digital
products or other digital products or granting the right for a consideration to use specified
digital products or other digital products on a temporary or permanent basis and regardless
of whether the purchaser is required to make continued payments for such right. Wherever
the term "tangible personal property" is used in this chapter, other than in subdivisions 10
and 38, the provisions also apply to specified digital products, or other digital products,
unless specifically provided otherwise or the context indicates otherwise.

(m) The sale of the privilege of admission under section 297A.61, subdivision 3,
paragraph (g), clause (1), to a place of amusement or athletic event includes all charges
included in the privilege of admission's sales price, without deduction for amenities that
may be provided, unless the amenities are separately stated and the purchaser of the
privilege of admission is entitled to add or decline the amenities, and the amenities are not
otherwise taxable.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Minnesota Statutes 2014, section 297A.66, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) To the extent allowed by the United States
Constitution and the laws of the United States, "retailer maintaining a place of business in
this state," or a similar term, means a retailer:

(1) having or maintaining within this state, directly or by a subsidiary or an affiliate,
an office, place of distribution, sales, storage, or sample room or place, warehouse, or
other place of business, including the employment of a resident of this state who works
from a home office in this state
; or

(2) having a representative, including, but not limited to, an affiliate, agent,
salesperson, canvasser, or marketplace provider, solicitor, or other third party operating in
this state under the authority of the retailer or its subsidiary, for any purpose, including the
repairing, selling, delivering, installing, facilitating sales, processing sales, or soliciting of
orders for the retailer's goods or services, or the leasing of tangible personal property located
in this state, whether the place of business or agent, representative, affiliate, salesperson,
canvasser, or solicitor is located in the state permanently or temporarily, or whether or not
the retailer, subsidiary, or affiliate is authorized to do business in this state. A retailer is
represented by a marketplace provider in this state if the retailer makes sales in this state
facilitated by a marketplace provider that maintains a place of business in this state.

(b) "Destination of a sale" means the location to which the retailer makes delivery of
the property sold, or causes the property to be delivered, to the purchaser of the property,
or to the agent or designee of the purchaser. The delivery may be made by any means,
including the United States Postal Service or a for-hire carrier.

(c) "Marketplace provider" means any person who facilitates a retail sale by a
retailer by:

(1) listing or advertising for sale by the retailer in any forum, tangible personal
property, services, or digital goods that are subject to tax under this chapter; and

(2) either directly or indirectly through agreements or arrangements with third
parties collecting payment from the customer and transmitting that payment to the
retailer regardless of whether the marketplace provider receives compensation or other
consideration in exchange for its services.

(d) "Total taxable retail sales" means the gross receipts from the sale of all tangible
goods, services, and digital goods subject to sales and use tax under this chapter.

Sec. 3.

Minnesota Statutes 2014, section 297A.66, subdivision 2, is amended to read:


Subd. 2.

Retailer maintaining place of business in this state.

(a) Except as
provided in paragraph (b),
a retailer maintaining a place of business in this state who
makes retail sales in Minnesota or to a destination in Minnesota shall collect sales and use
taxes and remit them to the commissioner under section 297A.77.

(b) A retailer with total taxable retail sales to customers in this state of less than
$10,000 in the 12-month period ending on the last day of the most recently completed
calendar quarter is not required to collect and remit sales tax if it is determined to be a
retailer maintaining a place of business in the state solely because it made sales through
one or more marketplace providers. The provisions of this paragraph do not apply to a
retailer that is or was registered to collect sales and use tax in this state.

Sec. 4.

Minnesota Statutes 2014, section 297A.66, subdivision 4, is amended to read:


Subd. 4.

Affiliated entities.

(a) An entity is an "affiliate" of the retailer for purposes
of subdivision 1, paragraph (a), if the entity:

(1) the entity uses its facilities or employees in this state to advertise, promote, or
facilitate the establishment or maintenance of a market for sales of items by the retailer
to purchasers in this state or for the provision of services to the retailer's purchasers in
this state, such as accepting returns of purchases for the retailer, providing assistance in
resolving customer complaints of the retailer, or providing other services; and

(2) the retailer and the entity are related parties. has the same or a similar business
name to the retailer and sells, from a location or locations in this state, tangible personal
property, digital goods, or services, taxable under this chapter, that are similar to that
sold by the retailer;

(3) maintains an office, distribution facility, salesroom, warehouse, storage place, or
other similar place of business in this state to facilitate the delivery of tangible personal
property, digital goods, or services sold by the retailer to its customers in this state;

(4) maintains a place of business in this state and uses trademarks, service marks,
or trade names in this state that are the same or substantially similar to those used by
the retailer, and that use is done with the express or implied consent of the holder of
the marks or names;

(5) delivers, installs, or assembles tangible personal property in this state, or
performs maintenance or repair services on tangible personal property in this state, for
tangible personal property sold by the retailer;

(6) facilitates the delivery of tangible personal property to customers of the retailer
by allowing the customers to pick up tangible personal property sold by the retailer at a
place of business the entity maintains in this state; or

(7) shares management, business systems, business practices, or employees with the
retailer, or engages in intercompany transactions with the retailer related to the activities
that establish or maintain the market in this state of the retailer.

(b) Two entities are related parties under this section if one of the entities meets at
least one of the following tests with respect to the other entity:

(1) one or both entities is a corporation, and one entity and any party related to that
entity in a manner that would require an attribution of stock from the corporation to the
party or from the party to the corporation under the attribution rules of section 318 of the
Internal Revenue Code owns directly, indirectly, beneficially, or constructively at least 50
percent of the value of the corporation's outstanding stock;

(2) one or both entities is a partnership, estate, or trust and any partner or beneficiary,
and the partnership, estate, or trust and its partners or beneficiaries own directly, indirectly,
beneficially, or constructively, in the aggregate, at least 50 percent of the profits, capital,
stock, or value of the other entity or both entities; or

(3) an individual stockholder and the members of the stockholder's family (as
defined in section 318 of the Internal Revenue Code) owns directly, indirectly, beneficially,
or constructively, in the aggregate, at least 50 percent of the value of both entities'
outstanding stock.;

(4) the entities are related within the meaning of subsections (b) and (c) of section
267 or 707(b)(1) of the Internal Revenue Code; or

(5) the entities have one or more ownership relationships and the relationships were
designed with a principal purpose of avoiding the application of this section.

(c) An entity is an affiliate under the provisions of this subdivision if the requirements
of paragraphs (a) and (b) are met during any part of the 12-month period ending on the
first day of the month before the month in which the sale was made.

Sec. 5.

Minnesota Statutes 2014, section 297A.66, is amended by adding a subdivision
to read:


Subd. 4b.

Collection and remittance requirements for marketplace providers
and marketplace sellers.

(a) A marketplace provider shall collect sales and use taxes
and remit them to the commissioner under section 297A.77 for all facilitated sales for a
retailer, and is subject to audit on the retail sales it facilitates unless the retailer either:

(1) provides a copy of the retailer's registration to collect sales and use tax in this
state to the marketplace provider before the marketplace provider facilitates a sale; or

(2) upon inquiry by the marketplace provider or its agent, the commissioner
discloses that the retailer is registered to collect sales and use taxes in this state.

(b) Nothing in this subdivision shall be construed to interfere with the ability of a
marketplace provider and a retailer to enter into an agreement regarding fulfillment of
the requirements of this chapter.

(c) A marketplace provider is not liable under this subdivision for failure to file and
collect and remit sales and use taxes if the marketplace provider demonstrates that the
error was due to incorrect or insufficient information given to the marketplace provider by
the retailer. This paragraph does not apply if the marketplace provider and the marketplace
seller are related as defined in subdivision 4, paragraph (b).

Sec. 6.

Minnesota Statutes 2014, section 297A.67, subdivision 7a, is amended to read:


Subd. 7a.

Accessories and supplies.

Accessories and supplies required for the
effective use of durable medical equipment for home use only or purchased in a transaction
covered by Medicare or, Medicaid, or other health insurance plan, that are not already
exempt under subdivision 7, are exempt. Accessories and supplies for the effective use
of a prosthetic device, that are not already exempt under subdivision 7, are exempt.
For purposes of this subdivision "durable medical equipment," "prosthetic device,"
"Medicare," and "Medicaid" have the definitions given in subdivision 7., and "other health
insurance plan" means a health plan defined in section 62A.011, subdivision 3, or 62V.02,
subdivision 4, or a qualified health plan defined in section 62A.011, subdivision 7.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 7.

Minnesota Statutes 2014, section 297A.67, is amended by adding a subdivision
to read:


Subd. 34.

Suite licenses.

The sale of the privilege of admission under section
297A.61, subdivision 3, paragraph (g), clause (1), to a place of amusement or athletic
event does not include consideration paid for a license to use a private suite, private
skybox, or private box seat provided that: (1) the lessee may use the private suite, private
skybox, or private box seat by mutual arrangement with the lessor on days when there is
no amusement or athletic event; and (2) the sales price for the privilege of admission is
separately stated and is equal to or greater than the highest priced general admission ticket
for the closest seat not in the private suite, private skybox, or private box seat.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 8.

Minnesota Statutes 2014, section 297A.67, is amended by adding a subdivision
to read:


Subd. 35.

Stadium builder's licenses.

The sale of the privilege of admission under
section 297A.61, subdivision 3, paragraph (g), clause (1), does not include consideration
paid for a stadium builder's license authorized under section 473J.15, subdivision 14.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 9.

Minnesota Statutes 2014, section 297A.68, subdivision 9, is amended to read:


Subd. 9.

Super Bowl admissions and related events.

(a) The granting of the
privilege of admission to a world championship football game sponsored by the National
Football League is and to related events sponsored by the National Football League or its
affiliates, or the Minnesota Super Bowl Host Committee, are
exempt.

(b) The sale of nonresidential parking by the National Football League for
attendance at a world championship football game sponsored by the National Football
League and for related events sponsored by the National Football League or its affiliates,
or the Minnesota Super Bowl Host Committee, is exempt.

(c) For the purposes of this subdivision:

(1) "related events sponsored by the National Football League or its affiliates"
includes but is not limited to preparatory advance visits, NFL Experience, NFL Tailgate,
NFL On Location, and NFL House; and

(2) "affiliates" does not include National Football League teams.

EFFECTIVE DATE.

The amendments to this section are effective for sales and
purchases made after June 30, 2016, and before March 1, 2018.

Sec. 10.

Minnesota Statutes 2014, section 297A.70, subdivision 14, is amended to read:


Subd. 14.

Fund-raising events sponsored by nonprofit groups.

(a) Sales of
tangible personal property or services at, and admission charges for fund-raising events
sponsored by, a nonprofit organization are exempt if:

(1) all gross receipts are recorded as such, in accordance with generally accepted
accounting practices, on the books of the nonprofit organization; and

(2) the entire proceeds, less the necessary expenses for the event, will be used solely
and exclusively for charitable, religious, or educational purposes. Exempt sales include
the sale of prepared food, candy, and soft drinks at the fund-raising event.

(b) This exemption is limited in the following manner:

(1) it does not apply to admission charges for events involving bingo or other
gambling activities or to charges for use of amusement devices involving bingo or other
gambling activities;

(2) all gross receipts are taxable if the profits are not used solely and exclusively for
charitable, religious, or educational purposes;

(3) it does not apply unless the organization keeps a separate accounting record,
including receipts and disbursements from each fund-raising event that documents all
deductions from gross receipts with receipts and other records;

(4) it does not apply to any sale made by or in the name of a nonprofit corporation as
the active or passive agent of a person that is not a nonprofit corporation;

(5) all gross receipts are taxable if fund-raising events exceed 24 days per year;

(6) it does not apply to fund-raising events conducted on premises leased for more
than five ten days but less than 30 days; and

(7) it does not apply if the risk of the event is not borne by the nonprofit organization
and the benefit to the nonprofit organization is less than the total amount of the state and
local tax revenues forgone by this exemption.

(c) For purposes of this subdivision, a "nonprofit organization" means any unit of
government, corporation, society, association, foundation, or institution organized and
operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
veterans' purposes, no part of the net earnings of which inures to the benefit of a private
individual.

(d) For purposes of this subdivision, "fund-raising events" means activities of
limited duration, not regularly carried out in the normal course of business, that attract
patrons for community, social, and entertainment purposes, such as auctions, bake sales,
ice cream socials, block parties, carnivals, competitions, concerts, concession stands,
craft sales, bazaars, dinners, dances, door-to-door sales of merchandise, fairs, fashion
shows, festivals, galas, special event workshops, sporting activities such as marathons and
tournaments, and similar events. Fund-raising events do not include the operation of a
regular place of business in which services are provided or sales are made during regular
hours such as bookstores, thrift stores, gift shops, restaurants, ongoing Internet sales,
regularly scheduled classes, or other activities carried out in the normal course of business.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 11.

Minnesota Statutes 2014, section 297A.71, is amended by adding a
subdivision to read:


Subd. 49.

Siding production facility materials.

Building materials and supplies
for constructing a siding production facility that can produce at least 400,000,000 square
feet of siding per year are exempt. The tax must be imposed and collected as if the rate
under section 297A.62, subdivision 1, applied, and then refunded in the manner provided
in section 297A.75.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 12.

Minnesota Statutes 2014, section 297A.71, is amended by adding a
subdivision to read:


Subd. 50.

Properties destroyed by fire.

Building materials and supplies used in,
and equipment incorporated into, the construction or replacement of real property that is
located in Madelia affected by the fire on February 3, 2016, are exempt. The tax must be
imposed and collected as if the rate under section 297A.62, subdivision 1, applied and
then refunded in the manner provided in section 297A.75.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016, and before July 1, 2018.

Sec. 13.

Minnesota Statutes 2014, section 297A.71, is amended by adding a
subdivision to read:


Subd. 51.

Former Duluth Central High School.

Materials and supplies used
in and equipment incorporated into a private redevelopment project on the site of the
former Duluth Central High School are exempt, provided the resulting development is
subject to property taxes. 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. The commissioner must not pay more than $5,000,000 in refunds for
purchases exempt under this section. Refunds must be processed and issued in the order
that complete and accurate applications are received by the commissioner.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016, and before January 1, 2018.

Sec. 14.

Minnesota Statutes 2014, section 297A.75, subdivision 1, is amended to read:


Subdivision 1.

Tax collected.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(16) building materials and supplies for constructing a siding facility exempt under
section 297A.71, subdivision 49;

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

(18) materials and supplies used in and equipment incorporated into a private
redevelopment project exempt under section 297A.71, subdivision 51
.

EFFECTIVE DATE.

Clause (16) is effective for sales and purchases made after
June 30, 2016. Clause (17) is effective for sales and purchases made after June 30, 2016,
and before July 1, 2018. Clause (18) is effective for sales and purchases made after June
30, 2016, and before January 1, 2018.

Sec. 15.

Minnesota Statutes 2014, section 297A.75, subdivision 2, is amended to read:


Subd. 2.

Refund; eligible persons.

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

(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;

(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing
project;

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilities;

(7) for subdivision 1, clauses (8), (11), (12), and (15), and (16), the owner of the
qualifying business; and

(8) for subdivision 1, clauses (9), (10), and (13), the applicant must be the
governmental entity that owns or contracts for the project or facility; and

(9) for subdivision 1, clauses (17) and (18), the applicant must be the owner or
developer of the building or project
.

EFFECTIVE DATE.

The change to clause (7) is effective for sales and purchases
made after June 30, 2016. Clause (9) is effective for sales and purchases made after June
30, 2016, and before July 1, 2018, as it pertains to Minnesota Statutes, section 297A.71,
subdivision 1, clause (17), and for sales and purchases made after June 30, 2016, and
before January 1, 2018, as it pertains to Minnesota Statutes, section 297A.71, subdivision
1, clause (18).

Sec. 16.

Minnesota Statutes 2014, section 297A.75, subdivision 3, is amended to read:


Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clauses (3) to (13), or (15), to (18), the
contractor, subcontractor, or builder must furnish to the refund applicant a statement
including the cost of the exempt items and the taxes paid on the items unless otherwise
specifically provided by this subdivision. The provisions of sections 289A.40 and
289A.50 apply to refunds under this section.

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

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 17.

Minnesota Statutes 2014, section 297A.815, subdivision 3, is amended to read:


Subd. 3.

Motor vehicle lease sales tax revenue.

(a) For purposes of this subdivision,
"net revenue" means an amount equal to the revenues, including interest and penalties,
collected under this section, during the fiscal year; less $32,000,000 in each fiscal year.

(b) On or before June 30 of each fiscal year, the commissioner of revenue shall
estimate the amount of the net revenue for the current fiscal year.

(c) On or after July 1 of the subsequent fiscal year, the commissioner of management
and budget shall transfer the net revenue as estimated in paragraph (b) from the general
fund, as follows:

(1) $9,000,000 annually until January 1, 2015, and 50 percent annually thereafter to
the county state-aid highway fund. Notwithstanding any other law to the contrary, the
commissioner of transportation shall allocate the funds transferred under this clause to the
counties in the metropolitan area, as defined in section 473.121, subdivision 4, excluding
the counties of Hennepin and Ramsey, so that each county shall receive of such amount
the percentage that its population, as defined in section 477A.011, subdivision 3, estimated
or established by July 15 of the year prior to the current calendar year, bears to the total
population of the counties receiving funds under this clause; and

(2) the remainder to the greater Minnesota transit account.

(d) The revenues deposited under this subdivision do not include the revenues,
including interest and penalties, generated by the sales tax imposed under section
297A.62, subdivision 1a, which must be deposited as provided under the Minnesota
Constitution, article XI, section 15.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 18.

Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
chapter 291, article 8, section 22, Laws 1998, chapter 389, article 8, section 25, Laws
2003, First Special Session chapter 21, article 8, section 11, Laws 2008, chapter 154,
article 5, section 2, and Laws 2014, chapter 308, article 3, section 21, is amended to read:


Subd. 2.

(a) Notwithstanding Minnesota Statutes, section 477A.016, or any other
law, ordinance, or city charter provision to the contrary, the city of Duluth may, by
ordinance, impose an additional sales tax of up to one and three-quarter percent on sales
transactions which are described in Minnesota Statutes 2000, section 297A.01, subdivision
3, clause (c). The imposition of this tax shall not be subject to voter referendum under
either state law or city charter provisions. When the city council determines that the taxes
imposed under this paragraph at a rate of three-quarters of one percent and other sources
of revenue produce revenue sufficient to pay debt service on bonds in the principal amount
of $40,285,000 plus issuance and discount costs, issued for capital improvements at the
Duluth Entertainment and Convention Center, which include a new arena, the rate of tax
under this subdivision must be reduced by three-quarters of one percent.

(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes,
section 477A.016, or any other law, ordinance, or city charter provision to the contrary,
the city of Duluth may, by ordinance, impose an additional sales tax of up to one-half of
one percent on sales transactions which are described in Minnesota Statutes 2000, section
297A.01, subdivision 3, clause (c). This tax expires when the city council determines
that the tax imposed under this paragraph, along with the tax imposed under section
22, paragraph (b), has produced revenues sufficient to pay the debt service on bonds
in a principal amount of no more than $18,000,000, plus issuance and discount costs,
to finance capital improvements to public facilities to support tourism and recreational
activities in that portion of the city west of 34th 14th Avenue West and the area south of
and including Skyline Parkway
.

(c) The city of Duluth may sell and issue up to $18,000,000 in general obligation
bonds under Minnesota Statutes, chapter 475, plus an additional amount to pay for the
costs of issuance and any premiums. The proceeds may be used to finance capital
improvements to public facilities that support tourism and recreational activities in the
portion of the city west of 34th 14th Avenue West and the area south of and including
Skyline Parkway
, as described in paragraph (b). The issuance of the bonds is subject to the
provisions of Minnesota Statutes, chapter 475, except no election shall be required unless
required by the city charter. The bonds shall not be included in computing net debt. The
revenues from the taxes that the city of Duluth may impose under paragraph (b) and under
section 22, paragraph (b), may be pledged to pay principal of and interest on such bonds.

EFFECTIVE DATE.

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

Sec. 19.

Laws 1980, chapter 511, section 2, as amended by Laws 1998, chapter 389,
article 8, section 26, Laws 2003, First Special Session chapter 21, article 8, section 12, and
Laws 2014, chapter 308, article 3, section 22, is amended to read:


Sec. 22. CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND
MOTELS.

(a) Notwithstanding Minnesota Statutes, section 477A.016, or any other law, or
ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
impose an additional tax of one percent upon the gross receipts from the sale of lodging
for periods of less than 30 days in hotels and motels located in the city. The tax shall be
collected in the same manner as the tax set forth in the Duluth city charter, section 54(d),
paragraph one. The imposition of this tax shall not be subject to voter referendum under
either state law or city charter provisions.

(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes,
section 477A.016, or any other law, ordinance, or city charter provision to the contrary,
the city of Duluth may, by ordinance, impose an additional sales tax of up to one-half
of one percent on the gross receipts from the sale of lodging for periods of less than
30 days in hotels and motels located in the city. This tax expires when the city council
first determines that the tax imposed under this paragraph, along with the tax imposed
under section 21, paragraph (b), has produced revenues sufficient to pay the debt
service on bonds in a principal amount of no more than $18,000,000, plus issuance and
discount costs, to finance capital improvements to public facilities to support tourism and
recreational activities in that portion of the city west of 34th 14th Avenue West and the
area south of and including Skyline Parkway
.

EFFECTIVE DATE.

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

Sec. 20.

Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended by
Laws 1998, chapter 389, article 8, section 28, Laws 2008, chapter 366, article 7, section 9,
and Laws 2009, chapter 88, article 4, section 14, is amended to read:


Subd. 3.

Use of revenues.

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

(b) Notwithstanding Minnesota Statutes, section 297A.99, subdivision 3, and subject
to voter approval at a general election held before December 31, 2018; provided that the
sales tax in the city of North Mankato is also extended at the same general election, the
city may by ordinance also use revenues from taxes authorized under subdivisions 1 and
2, up to a maximum of $47,000,000, plus associated bond costs, to pay all or a portion of
the expenses of the following capital projects:

(1) construction and improvements to regional recreational facilities including
existing hockey and curling rinks, a baseball park, youth athletic fields and facilities, the
municipal swimming pool including improvements to make the pool compliant with the
Americans with Disabilities Act, and indoor regional athletic facilities;

(2) improvements to flood control and the levee system;

(3) water quality improvement projects in Blue Earth and Nicollet Counties;

(4) expansion of the regional transit building and related multimodal transit
improvements;

(5) regional public safety and emergency communications improvements and
equipment; and

(6) matching funds for improvements to publicly owned regional facilities including
a historic museum, supportive housing, and a senior center.

EFFECTIVE DATE.

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

Sec. 21.

Laws 1991, chapter 291, article 8, section 27, subdivision 4, as amended by
Laws 2005, First Special Session chapter 3, article 5, section 25, and Laws 2008, chapter
366, article 7, section 10, is amended to read:


Subd. 4.

Expiration of taxing authority and expenditure limitation.

The
authority granted by subdivisions 1 and 2 to the city to impose a sales tax and an excise tax
shall expire on at the earlier of when revenues are sufficient to pay off the bonds, including
interest and all other associated bond costs authorized under subdivision 5, or
December 31,
2022, unless the additional uses under subdivision 3, paragraph (b) or (c), are authorized.
If the additional use allowed in subdivision 3, paragraph (b), is authorized, the taxes expire
at the earlier of when revenues are sufficient to pay off the bonds, including interest and
all other associated bond costs authorized under subdivision 5, or December 31, 2038
.

EFFECTIVE DATE.

This section is effective the day following final enactment
without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.

Sec. 22.

Laws 1991, chapter 291, article 8, section 27, subdivision 5, is amended to read:


Subd. 5.

Bonds.

(a) The city of Mankato may issue general obligation bonds of the
city in an amount not to exceed $25,000,000 for Riverfront 2000 and related facilities,
without election under Minnesota Statutes, chapter 475, on the question of issuance of the
bonds or a tax to pay them. The debt represented by bonds issued for Riverfront 2000
and related facilities shall not be included in computing any debt limitations applicable
to the city of Mankato, and the levy of taxes required by section 475.61 to pay principal
of and interest on the bonds shall not be subject to any levy limitation or be included in
computing or applying any levy limitation applicable to the city.

(b) The city of Mankato, subject to voter approval at the election required under
subdivision 3, paragraph (b), may issue general obligation bonds of the city in an amount
not to exceed $47,000,000 for the projects listed under subdivision 3, paragraph (b),
without election under Minnesota Statutes, chapter 475, on the question of issuance of the
bonds or a tax to pay them. The debt represented by bonds under this paragraph shall not be
included in computing any debt limitations applicable to the city of Mankato, and the levy
of taxes required by Minnesota Statutes, section 475.61, to pay principal of and interest on
the bonds, and shall not be subject to any levy limitation or be included in computing or
applying any levy limitation applicable to the city. The city may use tax revenue in excess
of one year's principal interest reserve for intended annual bond payments to pay all or a
portion of the cost of capital improvements authorized in subdivision 3.

EFFECTIVE DATE.

This section is effective the day following final enactment
without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.

Sec. 23.

Laws 1991, chapter 291, article 8, section 27, subdivision 6, is amended to read:


Subd. 6.

Reverse referendum; authorization of extension.

(a) If the Mankato city
council intends to exercise the authority provided by this section, it shall pass a resolution
stating the fact before July 1, 1991. The resolution must be published for two successive
weeks in the official newspaper of the city or, if there is no official newspaper, in a
newspaper of general circulation in the city, together with a notice fixing a date for a public
hearing on the matter. The hearing must be held at least two weeks but not more than four
weeks after the first publication of the resolution. Following the public hearing, the city
may determine to take no further action or adopt a resolution confirming its intention to
exercise the authority. That resolution must also be published in the official newspaper of
the city or, if there is no official newspaper, in a newspaper of general circulation in the
city. If within 30 days after publication of the resolution a petition signed by voters equal
in number to ten percent of the votes cast in the city in the last general election requesting
a vote on the proposed resolution is filed with the county auditor, the resolution is not
effective until it has been submitted to the voters at a general or special election and a
majority of votes cast on the question of approving the resolution are in the affirmative. The
commissioner of revenue shall prepare a suggested form of question to be presented at the
election. The referendum must be held at a special or general election before December 1,
1991. This subdivision applies notwithstanding any city charter provision to the contrary.

(b) If the Mankato city council wishes to extend the taxes authorized under
subdivisions 1 and 2 to fund any of the projects listed in subdivision 3, paragraph (b), the
city must pass a resolution extending the taxes before July 1, 2016. The tax may not be
imposed unless approved by the voters.

EFFECTIVE DATE.

This section is effective the day following final enactment
without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.

Sec. 24.

Laws 1996, chapter 471, article 2, section 29, subdivision 1, as amended by
Laws 2006, chapter 259, article 3, section 3, and Laws 2011, First Special Session chapter
7, article 4, section 4, is amended to read:


Subdivision 1.

Sales tax authorized.

(a) Notwithstanding Minnesota Statutes,
section 477A.016, or any other contrary provision of law, ordinance, or city charter, the
city of Hermantown may, by ordinance, impose an additional sales tax of up to one percent
on sales transactions taxable pursuant to Minnesota Statutes, chapter 297A, that occur
within the city. The proceeds of the tax imposed under this section must be used to pay
the cost of collection of the tax and to
meet the costs, including principal, interest, and
premiums of bonds used in the finance
of:

(1) extending a sewer interceptor line;

(2) construction of a booster pump station, reservoirs, and related improvements
to the water system; and

(3) construction of a building containing a police and fire station and an
administrative services facility; and

(4) construction and equipping of a regional, multiuse wellness center.

(b) If the city imposed a sales tax of only one-half of one percent under paragraph
(a), it may increase the tax to one percent to fund the purposes under paragraph (a)
provided it is approved by the voters at a general election held before December 31, 2012.

(c) The tax imposed in paragraph (a) may only be used to fund projects listed in
paragraph (a), clause (4), if approved by the local voters at the November 8, 2016, general
election. Revenue raised from the tax imposed under this subdivision in every year must
first be used to meet obligations in that year related to the projects in paragraph (a), clauses
(1) to (3), with excess revenues available to fund the projects in paragraph (a), clause (4).

EFFECTIVE DATE.

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

Sec. 25.

Laws 1996, chapter 471, article 2, section 29, subdivision 4, as amended by
Laws 2006, chapter 259, article 3, section 4, is amended to read:


Subd. 4.

Termination.

The tax authorized under this section terminates on March
31, 2026, unless the additional use under subdivision 1, paragraph (a), is approved
as required under subdivision 1, paragraph (c). If the additional project is approved
as required under subdivision 1, paragraph (c), the tax authorized under this section
terminates at the earlier of (1) December 31, 2036, or (2) when the Hermantown City
Council first determines that sufficient funds have been received from the tax to fund the
costs, including bonds and associated bond costs for the uses specified in subdivision 1,
paragraph (a)
. Any funds remaining after completion of the improvements and retirement
or redemption of the bonds may be placed in the general fund of the city.

EFFECTIVE DATE.

This section is effective the day following final enactment
without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.

Sec. 26.

Laws 1999, chapter 243, article 4, section 18, subdivision 1, as amended by
Laws 2008, chapter 366, article 7, section 12, is amended to read:


Subdivision 1.

Sales and use tax.

(a) Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, if approved by the city
voters at the first municipal general election held after the date of final enactment of this act
or at a special election held November 2, 1999, the city of Proctor may impose by ordinance
a sales and use tax of up to one-half of one percent for the purposes specified in subdivision
3. The provisions of Minnesota Statutes, section 297A.99, govern the imposition,
administration, collection, and enforcement of the tax authorized under this subdivision.

(b) Notwithstanding Minnesota Statutes, section 477A.016, or any other provision of
law, ordinance, or city charter, the city of Proctor may impose by ordinance an additional
sales and use tax of up to one-half of one percent as approved by the voters at the
November 4, 2014, general election. The revenues received from the additional tax must
be used for the purposes specified in subdivision 3, paragraph (b).

EFFECTIVE DATE.

This section is effective the day after the governing body of
the city of Proctor and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, but only if the local approval requirement under section
10 is also met.

Sec. 27.

Laws 2008, chapter 366, article 7, section 20, is amended to read:


Sec. 20. CITY OF NORTH MANKATO; TAXES AUTHORIZED.

Subdivision 1.

Sales and use tax authorized.

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

Subd. 2.

Use of revenues.

(a) Revenues received from the tax authorized by
subdivision 1 must be used to pay all or part of the capital costs of the following projects:

(1) the local share of the Trunk Highway 14/County State-Aid Highway 41
interchange project;

(2) development of regional parks and hiking and biking trails, including
construction of indoor regional athletic facilities
;

(3) expansion of the North Mankato Taylor Library;

(4) riverfront redevelopment; and

(5) lake improvement projects.

The total amount of revenues from the tax in subdivision 1 that may be used to fund
these projects is $6,000,000 plus any associated bond costs.

(b) If the city extends the tax as authorized under subdivision 2a, the total amount that
may be used to fund these projects is increased by $9,000,000, plus associated bond costs.

Subd. 2a.

Authorization to extend the tax.

Notwithstanding Minnesota Statutes,
section 297A.99, subdivision 3, the North Mankato city council may, by resolution, extend
the tax authorized under subdivision 1 to cover an additional $9,000,000 in bonds, plus
associated bond costs, to fund the projects in subdivision 2, paragraph (a), if approved by
the voters at a general election held before December 31, 2018; provided that the sales tax
in the city of Mankato is also extended at the same general election.

Subd. 3.

Bonds.

(a) The city of North Mankato, pursuant to the approval of the
voters at the November 7, 2006 referendum authorizing the imposition of the taxes in
this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
administrative expenses for the projects described in subdivision 2, paragraph (a), in an
amount that does not exceed $6,000,000. A separate election to approve the bonds under
Minnesota Statutes, section 475.58, is not required.

(b) The city of North Mankato, subject to the referendum in subdivision 2a, allowing
for additional revenue to be spent for the projects in subdivision 2, may issue additional
bonds under Minnesota Statutes, chapter 475, to pay capital and administrative expenses
for those projects in an amount that does not exceed $9,000,000. A separate election to
approve the bonds under Minnesota Statutes, section 475.58, is not required.

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

Subd. 4.

Termination of taxes.

The tax imposed under subdivision 1 expires when
the city council determines that the amount of revenues received from the taxes to pay for
the projects under subdivision 2, paragraph (a), first equals or exceeds $6,000,000 plus the
additional amount needed to pay the costs related to issuance of bonds under subdivision
3, including interest on the bonds, unless the tax is extended as allowed in this section. If
the tax is extended as allowed under the referendum under subdivision 2a, the tax expires
at the earlier of December 31, 2038, or when revenues from the taxes first equal or exceed
$15,000,000 plus the additional amount needed to pay costs related to issuance of bonds
under subdivision 3, including interest
. Any funds remaining after completion of the
projects and retirement or redemption of the bonds shall be placed in a capital facilities
and equipment replacement fund of the city. The tax imposed under subdivision 1 may
expire at an earlier time if the city so determines by ordinance.

EFFECTIVE DATE.

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

Sec. 28. CITY OF EAST GRAND FORKS; TAXES AUTHORIZED.

Subdivision 1.

Sales and use tax authorization.

Notwithstanding Minnesota
Statutes, section 297A.99, subdivisions 1 and 2, or 477A.016, or any other law, ordinance,
or city charter, and as approved by the voters at a special election on March 7, 2016, the
city of East Grand Forks may impose, by ordinance, a sales and use tax of up to one
percent for the purposes specified in subdivision 2. Except as otherwise provided in this
section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition,
administration, collection, and enforcement of the tax authorized under this subdivision.

Subd. 2.

Use of sales and use tax revenues.

The revenues derived from the tax
authorized under subdivision 1 must be used by the city of East Grand Forks to pay the
costs of collecting and administering the tax and to finance the capital and administrative
costs of improvement to the city public swimming pool. Authorized expenses include,
but are not limited to, paying construction expenses related to the renovation and the
development of these facilities and improvements, and securing and paying debt service
on bonds issued under subdivision 3 or other obligations issued to finance improvement of
the public swimming pool in the city of East Grand Forks

Subd. 3.

Bonding authority.

(a) The city of East Grand Forks may issue bonds
under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the
facilities authorized in subdivision 2. The aggregate principal amount of bonds issued
under this subdivision may not exceed $2,820,000, plus an amount to be applied to the
payment of the costs of issuing the bonds. The bonds may be paid from or secured by
any funds available to the city of East Grand Forks, including the tax authorized under
subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota
Statutes, sections 275.60 and 275.61.

(b) The bonds are not included in computing any debt limitation applicable to the
city of East Grand Forks, and any levy of taxes under Minnesota Statutes, section 475.61,
to pay principal and interest on the bonds is not subject to any levy limitation. A separate
election to approve the bonds under Minnesota Statutes, section 475.58, is not required.

Subd. 4.

Termination of taxes.

The tax imposed under subdivision 1 expires at
the later of: (1) five years after the tax is first imposed; or (2) when the city council
determines that $2,820,000 has been received from the tax to pay for the cost of the
projects authorized under subdivision 2, plus an amount sufficient to pay the costs related
to issuance of the bonds authorized under subdivision 3, including interest on the bonds.
Any funds remaining after payment of all such costs and retirement or redemption of the
bonds shall be placed in the general fund of the city. The tax imposed under subdivision 1
may expire at an earlier time if the city so determines by ordinance.

EFFECTIVE DATE.

This section is effective the day after compliance by the
governing body of the city of East Grand Forks with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.

Sec. 29. CITY OF MARSHALL; VALIDATION OF PRIOR ACT.

(a) Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city
of Marshall may approve Laws 2011, First Special Session chapter 7, article 4, section
14, and file its approval with the secretary of state by June 15, 2013. If approved as
authorized under this paragraph, actions undertaken by the city as approved by the voters
on November 6, 2012, and otherwise in accordance with Laws 2011, First Special Session
chapter 7, article 4, section 14, are validated.

(b) Notwithstanding the time limit on the imposition of tax under Laws 2011, First
Special Session chapter 7, article 4, section 14, and subject to local approval under
paragraph (a), the city of Marshall may impose the tax on or before July 1, 2013.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 30. CERTAIN REIMBURSEMENT AUTHORIZED; CONSIDERED
OPERATING OR CAPITAL EXPENSES.

Subdivision 1.

Reimbursement authorized.

(a) An amount equivalent to the taxes
paid under Minnesota Statutes, chapter 297A, and any local taxes administered by the
Department of Revenue, on purchases of tangible personal property, nonresidential
parking services, and lodging, as these terms are defined in Minnesota Statutes, chapter
297A, used and consumed in connection with Super Bowl LII or related events sponsored
by the National Football League or its affiliates, will be reimbursed by the Minnesota
Sports Facilities Authority up to $1,600,000, if made after June 30, 2016, and before
March 1, 2018. Only purchases made by the Minnesota Super Bowl Host Committee, the
National Football League or its affiliates, or their employees or independent contractors,
qualify to be reimbursed under this section.

(b) For purposes of this subdivision:

(1) "employee or independent contractor" means only those employees or
independent contractors that make qualifying purchases that are reimbursed by the
Minnesota Super Bowl Host Committee or the National Football League or its affiliates; and

(2) "related events sponsored by the National Football League or its affiliates"
includes but is not limited to preparatory advance visits, NFL Experience, NFL Tailgate,
NFL Honors, and NFL House.

Subd. 2.

Operating reserve and capital reserve fund.

Notwithstanding the
requirements of Minnesota Statutes, section 473J.13, subdivisions 2 and 4, up to
$1,600,000 of the balance in the operating reserve or capital reserve fund may be used for
the purposes of paying reimbursements authorized under subdivision 1.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016, and before March 1, 2018.

Sec. 31. SEVERABILITY.

If any provision of sections 2 to 5 or the application thereof is held invalid, such
invalidity shall not affect the provisions or applications of the sections that can be given
effect without the invalid provisions or applications.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 32. EFFECTIVE DATE.

(a) The provisions of sections 2 to 5 are effective at the earlier of:

(1) a decision by the United States Supreme Court modifying its decision in Quill
Corp. v. North Dakota, 504 U.S. 298 (1992) so that a state may require retailers without a
physical presence in the state to collect and remit sales tax; or

(2) July 1, 2019.

(b) Notwithstanding paragraph (a) or the provisions of sections 2 to 5, if a federal
law is enacted authorizing a state to impose a requirement to collect and remit sales tax
on retailers without a physical presence in the state, the commissioner must enforce the
provisions of this section and sections 2 to 5 to the extent allowed under federal law.

(c) The commissioner of revenue shall notify the revisor of statutes when either of
the provisions in paragraph (a) or (b) apply.

ARTICLE 5

SPECIAL TAXES

Section 1.

Minnesota Statutes 2014, section 296A.01, subdivision 12, is amended to
read:


Subd. 12.

Compressed natural gas or CNG.

"Compressed natural gas" or "CNG"
means natural gas, primarily methane, condensed under high pressure and stored in
specially designed storage tanks at between 2,000 and 3,600 pounds per square inch.
For purposes of this chapter, the energy content of CNG is considered to be 1,000 900
BTUs per cubic foot.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 2.

Minnesota Statutes 2014, section 296A.01, is amended by adding a subdivision
to read:


Subd. 13a.

Dealer of gasoline used as a substitute for aviation gasoline.

"Dealer
of gasoline used as a substitute for aviation gasoline" means any person who sells gasoline
on the premises of an airport as defined under section 360.013, subdivision 39, to be
dispensed directly into the fuel tank of an aircraft.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 3.

Minnesota Statutes 2014, section 296A.07, subdivision 4, is amended to read:


Subd. 4.

Exemptions.

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

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

(2) providers of transportation to recipients of medical assistance home and
community-based services waivers enrolled in day programs, including adult day care,
family adult day care, day treatment and habilitation, prevocational services, and
structured day services;

(3) an ambulance service licensed under chapter 144E;

(4) providers of medical or dental services by a federally qualified health center,
as defined under title 19 of the Social Security Act, as amended by Section 4161 of the
Omnibus Budget Reconciliation Act of 1990, with a motor vehicle used exclusively as a
mobile medical unit; or

(5) a licensed distributor to be delivered to a terminal for use in blending; or

(6) a dealer of gasoline used as a substitute for aviation gasoline.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 4.

Minnesota Statutes 2014, section 296A.08, subdivision 2, is amended to read:


Subd. 2.

Rate of tax.

The special fuel excise tax is imposed at the following rates:

(a) Liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon.

(b) Liquefied natural gas is taxed at the rate of 15 cents per gallon.

(c) Compressed natural gas is taxed at the rate of $2.174 $1.974 per thousand cubic
feet; or 25 cents per gasoline equivalent. For purposes of this paragraph, "gasoline
equivalent," as defined by the National Conference on Weights and Measures, is 5.66
pounds of natural gas or 126.67 cubic feet.

(d) All other special fuel is taxed at the same rate as the gasoline excise tax as
specified in section 296A.07, subdivision 2. The tax is payable in the form and manner
prescribed by the commissioner.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 5.

Minnesota Statutes 2014, section 296A.09, subdivision 1, is amended to read:


Subdivision 1.

Gasoline tax imposed.

Subject to any refunds or credits there is
imposed an excise tax, at the rate of five cents per gallon on all aviation gasoline received,
sold, stored, or withdrawn from storage in this state and on all gasoline used as a substitute
for aviation gasoline
. Aviation gasoline is defined in section 296A.01, subdivision 7.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 6.

Minnesota Statutes 2014, section 296A.09, subdivision 3, is amended to read:


Subd. 3.

Exception to tax for aviation use.

The provisions of subdivisions 1 and 2
do not apply to gasoline used as a substitute for aviation gasoline, aviation gasoline, or
special fuel purchased and placed in the fuel tanks of an aircraft outside the state, even
though the gasoline may be consumed within this state.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 7.

Minnesota Statutes 2014, section 296A.09, subdivision 5, is amended to read:


Subd. 5.

Tax not on consumption.

The taxes imposed by subdivisions 1 and 2 are
expressly declared not to be a tax upon consumption of gasoline used as a substitute for
aviation gasoline,
aviation gasoline, or special fuel by an aircraft.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 8.

Minnesota Statutes 2014, section 296A.09, subdivision 6, is amended to read:


Subd. 6.

Exemptions.

The provisions of subdivisions 1 and 2 do not apply to
gasoline used as a substitute for aviation gasoline, aviation gasoline, or jet fuel purchased
by an ambulance service licensed under chapter 144E.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 9.

Minnesota Statutes 2014, section 296A.15, subdivision 1, is amended to read:


Subdivision 1.

Monthly gasoline report; shrinkage allowance.

(a) Except
as provided in paragraph (e), on or before the 23rd day of each month, every person
who is required to pay a gasoline tax shall file with the commissioner a report, in the
form and manner prescribed by the commissioner, showing the number of gallons of
petroleum products received by the reporter during the preceding calendar month, and
other information the commissioner may require. A written report is deemed to have
been filed as required in this subdivision if postmarked on or before the 23rd day of the
month in which the tax is payable.

(b) The number of gallons of gasoline must be reported in United States standard
liquid gallons, 231 cubic inches, except that the commissioner may upon written
application and for cause shown permit the distributor to report the number of gallons of
gasoline as corrected to a temperature of 60-degrees Fahrenheit. If the application is
granted, all gasoline covered in the application and allowed by the commissioner must
continue to be reported by the distributor on the adjusted basis for a period of one year
from the date of the granting of the application. The number of gallons of petroleum
products other than gasoline must be reported as originally invoiced. Each report must
show separately the number of gallons of aviation gasoline received by the reporter during
each calendar month and the number of gallons of gasoline sold to a dealer of gasoline
used as a substitute for aviation fuel during each calendar month
.

(c) Each report must also include the amount of gasoline tax on gasoline received by
the reporter during the preceding month. In computing the tax a deduction of 2.5 percent
of the quantity of gasoline received by a distributor shall be made for evaporation and loss.
At the time of reporting, the reporter shall submit satisfactory evidence that one-third of
the 2.5 percent deduction has been credited or paid to dealers on quantities sold to them.

(d) Each report shall contain a confession of judgment for the amount of the tax
shown due to the extent not timely paid.

(e) Under certain circumstances and with the approval of the commissioner,
taxpayers may be allowed to file reports annually.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 10.

Minnesota Statutes 2014, section 296A.15, subdivision 4, is amended to read:


Subd. 4.

Failure to use or sell for intended purpose; report required.

(a) Any
person who buys gasoline from a dealer of gasoline used as a substitute for aviation
gasoline, or buys
aviation gasoline or special fuel for aircraft use and who has paid the
excise taxes due directly or indirectly through the amount of the tax being included in the
price, or otherwise, and uses said gasoline or special fuel in motor vehicles or knowingly
sells it to any person for use in motor vehicles shall, on or before the 23rd day of the month
following that in which such gasoline or special fuel was so used or sold, report the fact of
the use or sale to the commissioner in the form and manner prescribed by the commissioner.

(b) Any person who buys gasoline other than aviation gasoline and who has paid the
motor vehicle gasoline excise tax directly or indirectly through the amount of the tax being
included in the price of the gasoline, or otherwise, who knowingly sells such gasoline to any
person to be used for the purpose of producing or generating power for propelling aircraft,
or who receives, stores, or withdraws from storage gasoline to be used for that purpose,
shall, on or before the 23rd day of the month following that in which such gasoline was so
sold, stored, or withdrawn from storage, report the fact of the sale, storage, or withdrawal
from storage to the commissioner in the form and manner prescribed by the commissioner.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 11.

Minnesota Statutes 2014, section 296A.17, subdivision 1, is amended to read:


Subdivision 1.

Aviation refund requirements.

Any person claiming to be entitled
to any refund or credit provided for in subdivision 3 shall receive the refund or credit
upon filing with the commissioner a claim in such form and manner prescribed by the
commissioner. The claim shall set forth, among other things, the total number of gallons
of gasoline used as a substitute for aviation gasoline, aviation gasoline, or special fuel
for aircraft use upon which the claimant has directly or indirectly paid the excise tax
provided for in this chapter, during the calendar year, which has been received, stored, or
withdrawn from storage by the claimant in this state and not sold or otherwise disposed of
to others. All claims for refunds under this subdivision shall be made on or before April
30 following the end of the calendar year for which the refund is claimed.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 12.

Minnesota Statutes 2014, section 296A.17, subdivision 2, is amended to read:


Subd. 2.

Claim for refund; aviation tax.

(a) Any person who buys gasoline used
as a substitute for aviation gasoline,
aviation gasoline, or special fuel for aircraft use and
who has paid the excise taxes directly or indirectly through the amount of the tax being
included in the price, or otherwise, who does not use it in motor vehicles or receive, sell,
store, or withdraw it from storage for the purpose of producing or generating power for
propelling aircraft, shall be reimbursed and repaid the amount of the tax paid upon filing
with the commissioner a claim in the form and manner prescribed by the commissioner.
The claim shall state the total amount of the gasoline used as a substitute for aviation
gasoline,
aviation gasoline, or special fuel for aircraft use purchased and used by the
applicant, and shall state when and for what purpose it was used. On being satisfied that
the claimant is entitled to payment, the commissioner shall approve the claim and transmit
it to the commissioner of management and budget. The postmark on the envelope in
which a written claim is mailed determines the date of filing.

(b) If a claim contains an error in preparation in computation or preparation, the
commissioner is authorized to adjust the claim in accordance with the evidence shown on
the claim or other information available to the commissioner.

(c) An applicant who files a claim that is false or fraudulent, is subject to the
penalties provided in section 296A.23 for knowingly and willfully making a false claim.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 13.

Minnesota Statutes 2014, section 296A.17, subdivision 3, is amended to read:


Subd. 3.

Refund on graduated basis.

Any person who has directly or indirectly
paid the excise tax on gasoline used as a substitute for aviation gasoline, aviation gasoline,
or special fuel for aircraft use provided for by this chapter and either paid the airflight
property tax under section 270.072 or is an aerial applicator with a category B, general
aerial license, under section 18B.33,
shall, as to all such gasoline used as a substitute for
aviation gasoline,
aviation gasoline, and special fuel received, stored, or withdrawn from
storage by the person in this state in any calendar year and not sold or otherwise disposed
of to others, or intended for sale or other disposition to others, on which such tax has been
so paid, be entitled to the following graduated reductions in such tax for that calendar
year, to be obtained by means of the following refunds:

(1) on each gallon of such gasoline used as a substitute for aviation gasoline, aviation
gasoline, or special fuel up to 50,000 gallons, all but five cents per gallon;

(2) on each gallon of such gasoline used as a substitute for aviation gasoline, aviation
gasoline, or special fuel above 50,000 gallons and not more than 150,000 gallons, all
but two cents per gallon;

(3) on each gallon of such gasoline used as a substitute for aviation gasoline, aviation
gasoline, or special fuel above 150,000 gallons and not more than 200,000 gallons, all
but one cent per gallon;

(4) on each gallon of such gasoline used as a substitute for aviation gasoline, aviation
gasoline, or special fuel above 200,000, all but one-half cent per gallon.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 14.

Minnesota Statutes 2014, section 296A.18, subdivision 1, is amended to read:


Subdivision 1.

Intent; gasoline use.

All gasoline received in this state and all
gasoline produced in or brought into this state except aviation gasoline, gasoline sold to a
dealer of gasoline used as a substitute for aviation gasoline,
and marine gasoline shall be
determined to be intended for use in motor vehicles in this state.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 15.

Minnesota Statutes 2014, section 296A.18, subdivision 8, is amended to read:


Subd. 8.

Airports.

The revenues derived from the excise taxes on gasoline used as
a substitute for aviation gasoline,
aviation gasoline, and on special fuel received, sold,
stored, or withdrawn from storage as substitutes for aviation gasoline, shall be paid into
the state treasury and credited to the state airports fund. There is hereby appropriated such
sums as are needed to carry out the provisions of this subdivision.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 16.

Minnesota Statutes 2014, section 296A.19, subdivision 1, is amended to read:


Subdivision 1.

Retention.

All distributors, dealers, special fuel dealers, bulk
purchasers, dealers of gasoline used as a substitute for aviation gasoline, and all users of
special fuel shall keep a true and accurate record of all purchases, transfers, sales, and use
of petroleum products and special fuel, including copies of all sales tickets issued, in a form
and manner approved by the commissioner, and shall retain all such records for 3-1/2 years.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 17.

Minnesota Statutes 2014, section 297E.02, subdivision 1, is amended to read:


Subdivision 1.

Imposition.

(a) A tax is imposed on all lawful gambling other than
(1) paper or electronic pull-tab deals or games; (2) tipboard deals or games; (3) electronic
linked bingo; and (4) items listed in section 297E.01, subdivision 8, clauses (4) and (5), at
the rate of 8.5 percent on the gross receipts as defined in section 297E.01, subdivision 8,
less prizes actually paid.

(b) A tax is imposed on the conduct of paper pull-tabs, at the rate of nine percent of
the gross receipts, less prizes actually paid, of the pull-tab deal. The tax imposed under
this paragraph applies only to paper pull-tabs sold at a bingo hall as defined in section
349.12, subdivision 4a.

(c) The tax imposed by this subdivision is in lieu of the tax imposed by section
297A.62 and all local taxes and license fees except a fee authorized under section 349.16,
subdivision 8
, or a tax authorized under subdivision 5.

(d) The tax imposed under this subdivision is payable by the organization or party
conducting, directly or indirectly, the gambling.

EFFECTIVE DATE.

This section is effective for gross receipts received on or
after July 1, 2016.

Sec. 18.

Minnesota Statutes 2015 Supplement, section 297E.02, subdivision 6, is
amended to read:


Subd. 6.

Combined net receipts tax.

(a) In addition to the taxes imposed under
subdivision 1, a tax is imposed on the combined net receipts of the organization. As used
in this section, "combined net receipts" is the sum of the organization's gross receipts
from lawful gambling less gross receipts directly derived from the conduct of paper
bingo, raffles, and paddlewheels, as defined in section 297E.01, subdivision 8, and less
the net prizes actually paid, other than prizes actually paid for paper bingo, raffles, and
paddlewheels, for the fiscal year. The combined net receipts of an organization are subject
to a tax computed according to the following schedule:

If the combined net
receipts for the fiscal year
are:
The tax is:
Not over $87,500
nine percent
Over $87,500, but not over
$122,500
$7,875 plus 18 percent of the amount
over $87,500, but not over $122,500
Over $122,500, but not
over $157,500
$14,175 plus 27 percent of the amount
over $122,500, but not over $157,500
Over $157,500
$23,625 plus 36 percent of the
amount over $157,500

(b) On or before April 1, 2016, the commissioner shall estimate the total amount of
revenue, including interest and penalties, that will be collected for fiscal year 2016 from
taxes imposed under this chapter. If the amount estimated by the commissioner equals
or exceeds $94,800,000, the commissioner shall certify that effective July 1, 2016, the
rates under this paragraph apply in lieu of the rates under paragraph (a) and shall publish a
notice to that effect in the State Register and notify each taxpayer by June 1, 2016. If the
rates under this section apply, the combined net receipts of an organization are subject to a
tax computed according to the following schedule:

If the combined net
receipts for the fiscal year
are:
The tax is:
Not over $87,500
8.5 percent
Over $87,500, but not over
$122,500
$7,438 plus 17 percent of the amount
over $87,500, but not over $122,500
Over $122,500, but not
over $157,500
$13,388 plus 25.5 percent of the
amount over $122,500, but not over
$157,500
Over $157,500
$22,313 plus 34 percent of the
amount over $157,500

(c) Gross receipts derived from sports-themed tipboards are exempt from taxation
under this section. For purposes of this paragraph, a sports-themed tipboard means a
sports-themed tipboard as defined in section 349.12, subdivision 34, under which the
winning numbers are determined by the numerical outcome of a professional sporting event.

(d) Paper pull-tabs sold at a bingo hall as defined in section 349.12, subdivision 4a,
are exempt from taxation under this subdivision.

EFFECTIVE DATE.

This section is effective July 1, 2016.

Sec. 19.

Minnesota Statutes 2014, section 297F.01, is amended by adding a subdivision
to read:


Subd. 6a.

Bulk nicotine.

"Bulk nicotine" means any vapor product that contains a
solution having a concentration of 50 milligrams of nicotine per milliliter or greater.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 20.

Minnesota Statutes 2014, section 297F.01, is amended by adding a subdivision
to read:


Subd. 6b.

Consumable material.

"Consumable material" means any vapor product
that contains nicotine in a solution having a concentration of less than 50 milligrams
of nicotine per milliliter.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 21.

Minnesota Statutes 2014, section 297F.01, subdivision 19, is amended to read:


Subd. 19.

Tobacco products.

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

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

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 22.

Minnesota Statutes 2014, section 297F.01, is amended by adding a subdivision
to read:


Subd. 24.

Vapor products.

"Vapor products" means any noncombustible product
that employs a heating element, power source, electronic circuit, or other electronic,
chemical, or mechanical means, regardless of shape or size, that can be used to produce
vapor from nicotine in a solution or other form. Vapor products includes any electronic
cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device
and any vapor cartridge or other container of bulk nicotine or consumable material in
a solution or other form that is intended to be used with or in an electronic cigarette,
electronic cigar, electronic cigarillo, electronic pipe, or similar product or device.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 23.

Minnesota Statutes 2014, section 297F.05, subdivision 1, is amended to read:


Subdivision 1.

Rates; cigarettes.

A tax is imposed upon the sale of cigarettes in this
state, upon having cigarettes in possession in this state with intent to sell, upon any person
engaged in business as a distributor, and upon the use or storage by consumers, at the rate
of 141.5 150 mills, or 14.15 15 cents, on each cigarette.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 24.

Minnesota Statutes 2014, section 297F.05, subdivision 3, is amended to read:


Subd. 3.

Rates; tobacco products.

(a) Except as provided in subdivision
subdivisions 3a and 3b, a tax is imposed upon all tobacco products in this state and upon
any person engaged in business as a distributor, at the rate of 95 percent of the wholesale
sales price of the tobacco products. The tax is imposed at the time the distributor:

(1) brings, or causes to be brought, into this state from outside the state tobacco
products for sale;

(2) makes, manufactures, or fabricates tobacco products in this state for sale in
this state; or

(3) ships or transports tobacco products to retailers in this state, to be sold by those
retailers.

(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a
pack of 20 cigarettes weighing not more than three pounds per thousand, as established
under subdivision 1, is imposed on each container of moist snuff.

For purposes of this subdivision, a "container" means the smallest consumer-size can,
package, or other container that is marketed or packaged by the manufacturer, distributor,
or retailer for separate sale to a retail purchaser. When more than one container is
packaged together, each container is subject to tax.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 25.

Minnesota Statutes 2014, section 297F.05, is amended by adding a subdivision
to read:


Subd. 3b.

Rates; vapor products.

(a) A tax is imposed upon all vapor products in
this state and upon any person engaged in business as a tobacco product distributor. The
tax imposed under this subdivision is imposed at the time the tobacco products distributor:

(1) brings, or causes to be brought, into this state vapor products for sale;

(2) makes, manufactures, or fabricates vapor products in this state, not otherwise
taxed under this subdivision, for sale in this state; or

(3) ships or transports vapor products to retailers in this state to be sold by those
retailers.

(b) For vapor products that contain bulk nicotine, the rate of tax is 300 percent of the
wholesale sales price of the vapor product.

(c) For vapor products that contain consumable material, the rate of tax is 45 percent
of the wholesale sales price of the vapor product.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 26.

Minnesota Statutes 2014, section 297F.05, is amended by adding a subdivision
to read:


Subd. 4b.

Use tax; vapor products.

A tax is imposed upon the use or storage by
consumers of all vapor products in this state, and upon such consumers, at the rate of 300
percent of the wholesale sales price of a vapor product containing bulk nicotine, and 45
percent of the wholesale sales price of a vapor product containing consumable material.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 27.

Minnesota Statutes 2014, section 297H.04, subdivision 2, is amended to read:


Subd. 2.

Rate.

(a) Commercial generators that generate nonmixed municipal
solid waste shall pay a solid waste management tax of 60 cents per noncompacted
cubic yard of periodic waste collection capacity purchased by the generator, based on
the size of the container for the nonmixed municipal solid waste, the actual volume,
or the weight-to-volume conversion schedule in paragraph (c). However, the tax must
be calculated by the waste management service provider using the same method for
calculating the waste management service fee so that both are calculated according to
container capacity, actual volume, or weight.

(b) Notwithstanding section 297H.02, a residential generator that generates
nonmixed municipal solid waste shall pay a solid waste management tax in the same
manner as provided in paragraph (a).

(c) The weight-to-volume conversion schedule for:

(1) construction debris as defined in section 115A.03, subdivision 7, is one ton
equals 3.33 cubic yards, or $2 per ton
equal to 60 cents per cubic yard. The commissioner
of revenue, after consultation with the commissioner of the Pollution Control Agency,
shall determine and may publish by notice a conversion schedule for construction debris
;

(2) industrial waste as defined in section 115A.03, subdivision 13a, is equal to
60 cents per cubic yard. The commissioner of revenue after consultation with the
commissioner of the Pollution Control Agency, shall determine, and may publish by
notice, a conversion schedule for various industrial wastes; and

(3) infectious waste as defined in section 116.76, subdivision 12, and pathological
waste as defined in section 116.76, subdivision 14, is 150 pounds equals one cubic yard, or
60 cents per 150 pounds.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2016.

Sec. 28.

Minnesota Statutes 2014, section 349.12, is amended by adding a subdivision
to read:


Subd. 4a.

Bingo hall.

(a) "Bingo hall" means the premises on which an organization
licensed under this chapter regularly conducts bingo if:

(1) more than 50 percent of the organization's gross receipts from lawful gambling
in the prior calendar year were attributable to the conduct of bingo or the organization had
no receipts from lawful gambling in that year; or

(2) no other organization conducts lawful gambling on the premises.

(b) For purposes of this subdivision, "bingo" does not include a linked bingo game
as defined in this section.

EFFECTIVE DATE.

This section is effective July 1, 2016.

Sec. 29. REPEALER.

(a) Minnesota Statutes 2014, section 297F.05, subdivision 1a, is repealed.

(b) Minnesota Rules, part 8125.1300, subpart 3, is repealed.

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 6

MINERALS

Section 1.

Minnesota Statutes 2014, section 298.24, is amended by adding a
subdivision to read:


Subd. 5.

TEDF; deposits redirected.

(a) For concentrates produced by a plant
subject to a reimbursement agreement dated September 9, 2008, by and among Itasca
County, Essar Global Limited, and Minnesota Steel Industries LLC, the provisions of
sections 298.227 and 298.28, subdivision 9a, do not apply to the plant's production.

(b) All amounts not deposited in the taconite economic development fund as a
result of paragraph (a) must be deposited in the Douglas J. Johnson economic protection
trust fund created under section 298.292.

(c) The provisions of this subdivision expire upon certification by the commissioner
of employment and economic development that all requirements of the reimbursement
agreement, as specified in paragraph (a), are satisfied.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Minnesota Statutes 2014, section 298.28, subdivision 3, is amended to read:


Subd. 3.

Cities; towns.

(a) 12.5 cents per taxable ton, less any amount distributed
under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid
account to be distributed as provided in section 298.282.

(b) An amount must be allocated to towns or cities that is annually certified by
the county auditor of a county containing a taconite tax relief area as defined in section
273.134, paragraph (b), within which there is (1) an organized township if, as of January
2, 1982, more than 75 percent of the assessed valuation of the township consists of iron
ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation
of the city consists of iron ore.

(c) The amount allocated under paragraph (b) will be the portion of a township's or
city's certified levy equal to the proportion of (1) the difference between 50 percent of
January 2, 1982, assessed value in the case of a township and 50 percent of the January 2,
1980, assessed value in the case of a city and its current assessed value to (2) the sum of
its current assessed value plus the difference determined in (1), provided that the amount
distributed shall not exceed $55 per capita in the case of a township or $75 per capita in
the case of a city. For purposes of this limitation, population will be determined according
to the 1980 decennial census conducted by the United States Bureau of the Census. If the
current assessed value of the township exceeds 50 percent of the township's January 2,
1982, assessed value, or if the current assessed value of the city exceeds 50 percent of the
city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this
paragraph, "assessed value," when used in reference to years other than 1980 or 1982,
means the appropriate net tax capacities multiplied by 10.2.

(d) In addition to other distributions under this subdivision, three 3.25 cents per
taxable ton for distributions in 2009 2017 and subsequent years must be allocated for
distribution to (1) towns that are entirely located within the taconite tax relief area defined
in section 273.134, paragraph (b); and (2) the following unorganized territories in St.
Louis County and Itasca County: 56-17; 58-22; 59-16; 59-21; 60-18; and 60-19
. For
distribution in 2010 through 2014 and for distribution distributions in 2018 and subsequent
years, the three-cent 3.25-cent amount must be annually increased in the same proportion
as the increase in the implicit price deflator as provided in section 298.24, subdivision 1.
The amount available under this paragraph will must be distributed to eligible towns and
eligible unorganized territories
on a per capita basis, provided that no town or unorganized
territory
may receive more than $50,000 in any year under this paragraph. Any amount of
the distribution that exceeds the $50,000 limitation for a town or unorganized territory
under this paragraph must be redistributed on a per capita basis among the other eligible
towns and eligible unorganized territories, to whose distributions do not exceed $50,000.
The amount available to unorganized territories in St. Louis County and Itasca County
may be held by the county and combined for public infrastructure projects for the specified
unorganized territories.

EFFECTIVE DATE.

This section is effective for distributions beginning in 2017
and thereafter.

Sec. 3.

Minnesota Statutes 2014, section 298.28, subdivision 5, is amended to read:


Subd. 5.

Counties.

(a) 21.05 cents per taxable ton for distributions in 2015 through
2023, and 26.05 cents per taxable ton for distributions beginning in 2024, is allocated
to counties to be distributed, based upon certification by the commissioner of revenue,
under paragraphs (b) to (d).

(b) 10.525 cents per taxable ton shall be distributed to the county in which the
taconite is mined or quarried or in which the concentrate is produced, less any amount
which is to be distributed pursuant to paragraph (c). The apportionment formula prescribed
in subdivision 2 is the basis for the distribution.

(c) If 1.0 cent per taxable ton of the tax distributed to the counties pursuant to
paragraph (b) shall be paid to a county that received a distribution under this section
in 2000 because there was located in the county
an electric power plant owned by and
providing the primary source of power for a taxpayer mining and concentrating taconite
is located in a different county other than the county in which the mining and the
concentrating processes are conducted, one cent per taxable ton of the tax distributed to
the counties pursuant to paragraph (b) and imposed on and collected from such taxpayer
shall be paid to the county in which the power plant is located
.

(d) 10.525 cents per taxable ton for distributions in 2015 through 2023, and 15.525
cents per taxable ton for distributions beginning in 2024, shall be paid to the county from
which the taconite was mined, quarried or concentrated to be deposited in the county road
and bridge fund. If the mining, quarrying and concentrating, or separate steps in any of
those processes are carried on in more than one county, the commissioner shall follow the
apportionment formula prescribed in subdivision 2.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

Minnesota Statutes 2014, section 298.28, subdivision 7a, is amended to read:


Subd. 7a.

Iron Range school consolidation and cooperatively operated school
account.

The following amounts must be allocated to the Iron Range Resources and
Rehabilitation Board to be deposited in the Iron Range school consolidation and
cooperatively operated school account that is hereby created:

(1)(i) for distributions in 2015 through 2023, ten cents per taxable ton of the tax
imposed under section 298.24; and (ii) for distributions beginning in 2024, five cents per
taxable ton of the tax imposed under section 298.24;

(2) the amount as determined under section 298.17, paragraph (b), clause (3);

(3)(i) for distributions in 2015, an amount equal to two-thirds of the increased tax
proceeds attributable to the increase in the implicit price deflator as provided in section
298.24, subdivision 1, with the remaining one-third to be distributed to the Douglas J.
Johnson economic protection trust fund;

(ii) for distributions in 2016, an amount equal to two-thirds of the sum of the
increased tax proceeds attributable to the increase in the implicit price deflator as provided
in section 298.24, subdivision 1, for distribution years 2015 and 2016, with the remaining
one-third to be distributed to the Douglas J. Johnson economic protection trust fund; and

(iii) for distributions in 2017 and thereafter, an amount equal to two-thirds of the
sum of the increased tax proceeds attributable to the increase in the implicit price deflator
as provided in section 298.24, subdivision 1, for distribution years 2015, 2016, and
2017, with the remaining one-third to be distributed to the Douglas J. Johnson economic
protection trust fund; and

(4) any other amount as provided by law.

Expenditures from this account shall be made only to provide disbursements to
assist school districts with the payment of bonds that were issued for qualified school
projects, or for any other school disbursement as approved by the Iron Range Resources
and Rehabilitation Board. For purposes of this section, "qualified school projects" means
school projects within the taconite assistance area as defined in section 273.1341, that were
(1) approved, by referendum, after April 3, 2006; and (2) approved by the commissioner
of education pursuant to section 123B.71.

Beginning in fiscal year 2019, the disbursement to school districts for payments for
bonds issued under section 123A.482, subdivision 9, must be increased each year to
offset any reduction in debt service equalization aid that the school district qualifies for in
that year, under section 123B.53, subdivision 6, compared with the amount the school
district qualified for in fiscal year 2018.

No expenditure under this section shall be made unless approved by seven members
of the Iron Range Resources and Rehabilitation Board.

EFFECTIVE DATE.

This section is effective for distributions beginning in 2017
and thereafter.

ARTICLE 7

LOCAL DEVELOPMENT

Section 1.

Minnesota Statutes 2014, section 469.1763, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

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

(b) "Activities" means acquisition of property, clearing of land, site preparation, soils
correction, removal of hazardous waste or pollution, installation of utilities, construction
of public or private improvements, and other similar activities, but only to the extent that
tax increment revenues may be spent for such purposes under other law.

(c) "Third party" means an entity other than (1) the person receiving the benefit
of assistance financed with tax increments, or (2) the municipality or the development
authority or other person substantially under the control of the municipality.

(d) "Revenues derived from tax increments paid by properties in the district" means
only tax increment as defined in section 469.174, subdivision 25, clause (1), and does
not include tax increment as defined in section 469.174, subdivision 25, clauses (2),
(3), and (4)
to (5).

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Minnesota Statutes 2014, section 469.1763, subdivision 2, is amended to read:


Subd. 2.

Expenditures outside district.

(a) For each tax increment financing
district, an amount equal to at least 75 percent of the total revenue derived from tax
increments paid by properties in the district must be expended on activities in the district
or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification
was made after June 30, 1995, the in-district percentage for purposes of the preceding
sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
increments paid by properties in the district may be expended, through a development fund
or otherwise, on activities outside of the district but within the defined geographic area of
the project except to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification was
made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
20 percent. The revenue revenues derived from tax increments for paid by properties in
the district that are expended on costs under section 469.176, subdivision 4h, paragraph
(b), may be deducted first before calculating the percentages that must be expended within
and without the district.

(b) In the case of a housing district, a housing project, as defined in section 469.174,
subdivision 11
, is an activity in the district.

(c) All administrative expenses are for activities outside of the district, except that
if the only expenses for activities outside of the district under this subdivision are for
the purposes described in paragraph (d), administrative expenses will be considered as
expenditures for activities in the district.

(d) The authority may elect, in the tax increment financing plan for the district,
to increase by up to ten percentage points the permitted amount of expenditures for
activities located outside the geographic area of the district under paragraph (a). As
permitted by section 469.176, subdivision 4k, the expenditures, including the permitted
expenditures under paragraph (a), need not be made within the geographic area of the
project. Expenditures that meet the requirements of this paragraph are legally permitted
expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
To qualify for the increase under this paragraph, the expenditures must:

(1) be used exclusively to assist housing that meets the requirement for a qualified
low-income building, as that term is used in section 42 of the Internal Revenue Code; and

(2) not exceed the qualified basis of the housing, as defined under section 42(c) of
the Internal Revenue Code, less the amount of any credit allowed under section 42 of
the Internal Revenue Code; and

(3) be used to:

(i) acquire and prepare the site of the housing;

(ii) acquire, construct, or rehabilitate the housing; or

(iii) make public improvements directly related to the housing; or

(4) be used to develop housing:

(i) if the market value of the housing does not exceed the lesser of:

(A) 150 percent of the average market value of single-family homes in that
municipality; or

(B) $200,000 for municipalities located in the metropolitan area, as defined in
section 473.121, or $125,000 for all other municipalities; and

(ii) if the expenditures are used to pay the cost of site acquisition, relocation,
demolition of existing structures, site preparation, and pollution abatement on one or
more parcels, if the parcel contains a residence containing one to four family dwelling
units that has been vacant for six or more months and is in foreclosure as defined in
section 325N.10, subdivision 7, but without regard to whether the residence is the owner's
principal residence, and only after the redemption period has expired.

(e) For a district created within a biotechnology and health sciences industry zone
as defined in Minnesota Statutes 2012, section 469.330, subdivision 6, or for an existing
district located within such a zone, tax increment derived from such a district may be
expended outside of the district but within the zone only for expenditures required for the
construction of public infrastructure necessary to support the activities of the zone, land
acquisition, and other redevelopment costs as defined in section 469.176, subdivision 4j.
These expenditures are considered as expenditures for activities within the district. The
authority provided by this paragraph expires for expenditures made after the later of (1)
December 31, 2015, or (2) the end of the five-year period beginning on the date the district
was certified, provided that date was before January 1, 2016.

(f) The authority under paragraph (d), clause (4), expires on December 31, 2016.
Increments may continue to be expended under this authority after that date, if they are
used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph
(a), if December 31, 2016, is considered to be the last date of the five-year period after
certification under that provision.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Minnesota Statutes 2014, section 469.1763, subdivision 3, is amended to read:


Subd. 3.

Five-year rule.

(a) Revenues derived from tax increments paid by
properties in the district
are considered to have been expended on an activity within the
district under subdivision 2 only if one of the following occurs:

(1) before or within five years after certification of the district, the revenues are
actually paid to a third party with respect to the activity;

(2) bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within five years after certification, the revenues are spent
to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
reasonably expected to be spent before the end of the later of (i) the five-year period, or
(ii) a reasonable temporary period within the meaning of the use of that term under section
148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve
or replacement fund;

(3) binding contracts with a third party are entered into for performance of the
activity before or within five years after certification of the district and the revenues are
spent under the contractual obligation;

(4) costs with respect to the activity are paid before or within five years after
certification of the district and the revenues are spent to reimburse a party for payment
of the costs, including interest on unreimbursed costs; or

(5) expenditures are made for housing purposes as permitted by subdivision 2,
paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
by subdivision 2, paragraph (e).

(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
the original refunded bonds meet the requirements of paragraph (a), clause (2).

(c) For a redevelopment district or a renewal and renovation district certified after
June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph (a)
are extended to ten years after certification of the district. For a redevelopment district
certified after April 20, 2009, and before June 30, 2012, the five-year periods described in
paragraph (a) are extended to eight years after certification of the district. This extension is
provided primarily to accommodate delays in development activities due to unanticipated
economic circumstances.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

Minnesota Statutes 2014, section 469.178, subdivision 7, is amended to read:


Subd. 7.

Interfund loans.

(a) The authority or municipality may advance or loan
money to finance expenditures under section 469.176, subdivision 4, from its general fund
or any other fund under which it has legal authority to do so.

(b) Not later than 60 days after money is transferred, advanced, or spent, whichever
is earliest,
the loan or advance must be authorized, by resolution of the governing body or
of the authority, whichever has jurisdiction over the fund from which the advance or loan
is authorized, before money is transferred, advanced, or spent, whichever is earliest.

(c) The resolution may generally grant to the municipality or the authority the power
to make interfund loans under one or more tax increment financing plans or for one or
more districts. The resolution may be adopted before or after the adoption of the tax
increment financing plan or the creation of the tax increment financing district from which
the advance or loan is to be repaid.

(d) The terms and conditions for repayment of the loan must be provided in
writing and. The written terms and conditions may be in any form, but must include, at
a minimum, the principal amount, the interest rate, and maximum term. Written terms
may be modified or amended in writing by the municipality or the authority before the
latest decertification of any tax increment financing district from which the interfund loan
is to be repaid.
The maximum rate of interest permitted to be charged is limited to the
greater of the rates specified under section 270C.40 or 549.09 as of the date the loan or
advance is authorized, unless the written agreement states that the maximum interest rate
will fluctuate as the interest rates specified under section 270C.40 or 549.09 are from time
to time adjusted. Loans or advances may be structured as draw-down or line-of-credit
obligations of the lending fund.

(e) The authority shall report in the annual report submitted pursuant to section
469.175, subdivision 6:

(1) the amount of any interfund loan or advance made in a calendar year; and

(2) any amendment of an interfund loan or advance made in a calendar year.

EFFECTIVE DATE.

This section is effective the day following final enactment
and applies to all districts, regardless of when the request for certification was made.

Sec. 5.

Laws 2008, chapter 154, article 9, section 21, subdivision 2, is amended to read:


Subd. 2.

Special rules.

(a) If the city elects, upon the adoption of the tax increment
financing plan for a district, the rules under this section apply to a redevelopment district,
renewal and renovation district, economic development district, soil condition district,
or a soil deficiency district established by the city or a development authority of the city
in the project area.

(b) Prior to or upon the adoption of the first tax increment plan subject to the special
rules under this subdivision, the city must find by resolution that parcels consisting of at
least 80 percent of the acreage of the project area (excluding street and railroad right of
way) are characterized by one or more of the following conditions:

(1) peat or other soils with geotechnical deficiencies that impair development of
residential or commercial buildings or infrastructure;

(2) soils or terrain that requires substantial filling in order to permit the development
of commercial or residential buildings or infrastructure;

(3) landfills, dumps, or similar deposits of municipal or private waste;

(4) quarries or similar resource extraction sites;

(5) floodway; and

(6) substandard buildings within the meaning of Minnesota Statutes, section
469.174, subdivision 10.

(c) For the purposes of paragraph (b), clauses (1) through (5), a parcel is deemed to
be characterized by the relevant condition if at least 70 percent of the area of the parcel
contains the relevant condition. For the purposes of paragraph (b), clause (6), a parcel is
deemed to be characterized by substandard buildings if the buildings occupy at least 30
percent of the area of the parcel.

(d) The four-year rule under Minnesota Statutes, section 469.176, subdivision 6,
is extended to nine years for any district.
The five-year rule under Minnesota Statutes,
section 469.1763, subdivision 3, is extended to ten years for any district, and section
469.1763, subdivision 4, does not apply to any district.

(e) Notwithstanding anything to the contrary in section 469.1763, subdivision 2,
paragraph (a), not more than 80 percent of the total revenue derived from tax increments
paid by properties in any district (measured over the life of the district) may be expended
on activities outside the district but within the project area.

(f) For a soil deficiency district:

(1) increments may be collected through 20 years after the receipt by the authority of
the first increment from the district; and

(2) except as otherwise provided in this subdivision, increments may be used only to:

(i) acquire parcels on which the improvements described in item (ii) will occur;

(ii) pay for the cost of correcting the unusual terrain or soil deficiencies and the
additional cost of installing public improvements directly caused by the deficiencies; and

(iii) pay for the administrative expenses of the authority allocable to the district.

(g) Increments spent for any infrastructure costs, whether inside a district or outside
a district but within the project area, are deemed to satisfy the requirements of paragraph
(f) and Minnesota Statutes, section 469.176, subdivisions 4b, 4c, and 4j.

(h) Increments from any district may not be used to pay the costs of landfill closure or
public infrastructure located on the following parcels within the plat known as Burnsville
Amphitheater: Lot 1, Block 1; Lots 1 and 2, Block 2; and Outlots A, B, C and D.

(i) The authority to approve tax increment financing plans to establish tax increment
financing districts under this section expires on December 31, 2018 2020.

EFFECTIVE DATE.

This section is effective upon approval by the governing body
of the city of Burnsville and compliance with the requirements of Minnesota Statutes,
section 645.021.

Sec. 6.

Laws 2009, chapter 88, article 5, section 17, as amended by Laws 2010, chapter
382, section 84, is amended to read:


Sec. 17. SEAWAY PORT AUTHORITY OF DULUTH; TAX INCREMENT
FINANCING DISTRICT; SPECIAL RULES.

(a) If the Seaway Port Authority of Duluth adopts a tax increment financing plan and
the governing body of the city of Duluth approves the plan for the tax increment financing
district consisting of one or more parcels identified as: 010-2730-00010; 010-2730-00020;
010-2730-00040; 010-2730-00050; 010-2730-00070; 010-2730-00080; 010-2730-00090;
010-2730-00100; 010-02730-00120; 010-02730-00130; 010-02730-00140;
010-2730-00160; 010-2730-00180; 010-2730-00200; 010-2730-00300; 010-02730-00320;
010-2746-01250; 010-2746-1330; 010-2746-01340; 010-2746-01350; 010-2746-1440;
010-2746-1380; 010-2746-01490; 010-2746-01500; 010-2746-01510; 010-2746-01520;
010-2746-01530; 010-2746-01540; 010-2746-01550; 010-2746-01560; 010-2746-01570;
010-2746-01580; 010-2746-01590; 010-3300-4560; 010-3300-4565; 010-3300-04570;
010-3300-04580; 010-3300-04640; 010-3300-04645; and 010-3300-04650, the five-year
rule under Minnesota Statutes, section 469.1763, subdivision 3, that activities must be
undertaken within a five-year period from the date of certification of the tax increment
financing district, must be considered to be met if the activities are undertaken within five
years after the date all qualifying parcels are delisted from the Federal Superfund list.

(b) The requirements of Minnesota Statutes, section 469.1763, subdivision 4,
beginning in the sixth year following certification of the district requirement, will begin
in the sixth year following the date all qualifying parcels are delisted from the Federal
Superfund list.

(c) The action required under Minnesota Statutes, section 469.176, subdivision 6,
are satisfied if the action is commenced within four years after the date all qualifying
parcels are delisted from the Federal Superfund list and evidence of the action required is
submitted to the county auditor by February 1 of the fifth year following the year in which
all qualifying parcels are delisted from the Federal Superfund list.

(d) For purposes of this section, "qualifying parcels" means United States Steel
parcels listed in paragraph (a) and shown by the Minnesota Pollution Control Agency as part
of the USS Site (USEPA OU 02) that are included in the tax increment financing district.

(e) In addition to the reporting requirements of Minnesota Statutes, section 469.175,
subdivision 5
, the Seaway Port Authority of Duluth shall report the status of all parcels
listed in paragraph (a) and shown as part of the USS Site (USEPA OU 02). The status report
must show the parcel numbers, the listed or delisted status, and if delisted, the delisting date.

(f) Notwithstanding Minnesota Statutes, section 469.178, subdivision 7, or any other
law to the contrary, the Seaway Port Authority of Duluth may establish an interfund loan
program before approval of the tax increment financing plan for or the establishment of
the district authorized by this section. The authority may make loans under this program
and the proceeds of the loans may be used for any permitted use of increments under
this law or Minnesota Statutes, section 469.176, for the district, and may be repaid with
increments from the district established under this section. This subdivision applies to any
action authorized by the Seaway Port Authority of Duluth on or after March 25, 2010.

EFFECTIVE DATE.

This section is effective the day after the governing body of
the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivision 3.

Sec. 7.

Laws 2014, chapter 308, article 6, section 9, is amended to read:


Sec. 9. CITY OF MAPLE GROVE; TAX INCREMENT FINANCING
DISTRICT.

Subdivision 1.

Definitions.

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

(b) "City" means the city of Maple Grove.

(c) "Project area" means all or a portion of the area in the city commencing at a point
130 feet East and 120 feet North of the southwest corner of the Southeast Quarter of
Section 23, Township 119, Range 22, Hennepin County, said point being on the easterly
right-of-way line of Hemlock Lane; thence northerly along said easterly right-of-way line
of Hemlock Lane to a point on the west line of the east one-half of the Southeast Quarter of
section 23, thence south along said west line a distance of 1,200 feet; thence easterly to the
east line of Section 23, 1,030 feet North from the southeast corner thereof; thence South
74 degrees East 1,285 feet; thence East a distance of 1,000 feet; thence North 59 degrees
West a distance of 650 feet; thence northerly to a point on the northerly right-of-way line
of 81st Avenue North, 650 feet westerly measured at right angles, from the east line of
the Northwest Quarter of Section 24; thence North 13 degrees West a distance of 795
feet; thence West to the west line of the Southeast Quarter of the Northwest Quarter of
Section 24; thence North 55 degrees West to the south line of the Northwest Quarter of the
Northwest Quarter of Section 24; thence West along said south line to the east right-of-way
line of Zachary Lane; thence North along the east right-of-way line of Zachary Lane to
the southwest corner of Lot 1, Block 1, Metropolitan Industrial Park 5th Addition; thence
East along the south line of said Lot 1 to the northeast corner of Outlot A, Metropolitan
Industrial Park 5th Addition; thence South along the east line of said Outlot A and its
southerly extension to the south right-of-way line of County State-Aid Highway (CSAH)
109; thence easterly along the south right-of-way line of CSAH 109 to the east line of the
Northwest Quarter of the Northeast Quarter of Section 24; thence South along said east
line to the north line of the South Half of the Northeast Quarter of Section 24; thence East
along said north line to the westerly right-of-way line of Jefferson Highway North; thence
southerly along the westerly right-of-way line of Jefferson Highway to the centerline of
CSAH 130; thence continuing South along the west right-of-way line of Pilgrim Lane
North to the westerly extension of the north line of Outlot A, Park North Fourth Addition;
thence easterly along the north line of Outlot A, Park North Fourth Addition to the
northeast corner of said Outlot A; thence southerly along the east line of said Outlot A
to the southeast corner of said Outlot A; thence easterly along the south line of Lot 1,
Block 1, Park North Fourth Addition to the westerly right-of-way line of State Highway
169; thence southerly, southwesterly, westerly, and northwesterly along the westerly
right-of-way line of State Highway 169 and the northerly right-of-way line of Interstate
694 to its intersection with the southerly extension of the easterly right-of-way line of
Zachary Lane North; thence northerly along the easterly right-of-way line of Zachary
Lane North and its northerly extension to the north right-of-way line of CSAH 130; thence
westerly, southerly, northerly, southwesterly, and northwesterly to the point of beginning
and there terminating, provided that the project area includes the rights-of-way for all
present and future highway interchanges abutting the area described in this paragraph, and
may include any additional property necessary to cause the property included in the tax
increment financing district to consist of complete parcels
.

(d) "Soil deficiency district" means a type of tax increment financing district
consisting of a portion of the project area in which the city finds by resolution that the
following conditions exist:

(1) unusual terrain or soil deficiencies that occurred over 80 percent of the acreage in
the district require substantial filling, grading, or other physical preparation for use; and

(2) the estimated cost of the physical preparation under clause (1), but excluding
costs directly related to roads as defined in Minnesota Statutes, section 160.01, and
local improvements as described in Minnesota Statutes, sections 429.021, subdivision 1,
clauses (1) to (7), (11), and (12), and 430.01, exceeds the fair market value of the land
before completion of the preparation.

Subd. 2.

Special rules.

(a) If the city elects, upon the adoption of the tax increment
financing plan for a district, the rules under this section apply to a redevelopment
district, renewal and renovation district, soil condition district, or soil deficiency district
established by the city or a development authority of the city in the project area.

(b) Prior to or upon the adoption of the first tax increment plan subject to the special
rules under this subdivision, the city must find by resolution that parcels consisting
of at least 80 percent of the acreage of the project area, excluding street and railroad
rights-of-way, are characterized by one or more of the following conditions:

(1) peat or other soils with geotechnical deficiencies that impair development of
commercial buildings or infrastructure;

(2) soils or terrain that require substantial filling in order to permit the development
of commercial buildings or infrastructure;

(3) landfills, dumps, or similar deposits of municipal or private waste;

(4) quarries or similar resource extraction sites;

(5) floodway; and

(6) substandard buildings, within the meaning of Minnesota Statutes, section
469.174, subdivision 10.

(c) For the purposes of paragraph (b), clauses (1) to (5), a parcel is characterized by
the relevant condition if at least 70 percent of the area of the parcel contains the relevant
condition. For the purposes of paragraph (b), clause (6), a parcel is characterized by
substandard buildings if substandard buildings occupy at least 30 percent of the area
of the parcel.

(d) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3,
is extended to eight years for any district, and Minnesota Statutes, section 469.1763,
subdivision 4
, does not apply to any district.

(e) Notwithstanding any provision to the contrary in Minnesota Statutes, section
469.1763, subdivision 2, paragraph (a), not more than 40 percent of the total revenue
derived from tax increments paid by properties in any district, measured over the life of
the district, may be expended on activities outside the district but within the project area.

(f) For a soil deficiency district:

(1) increments may be collected through 20 years after the receipt by the authority of
the first increment from the district;

(2) increments may be used only to:

(i) acquire parcels on which the improvements described in item (ii) will occur;

(ii) pay for the cost of correcting the unusual terrain or soil deficiencies and the
additional cost of installing public improvements directly caused by the deficiencies; and

(iii) pay for the administrative expenses of the authority allocable to the district; and

(3) any parcel acquired with increments from the district must be sold at no less
than their fair market value.

(g) Increments spent for any infrastructure costs, whether inside a district or outside
a district but within the project area, are deemed to satisfy the requirements of Minnesota
Statutes, section 469.176, subdivision 4j.

(h) The authority to approve tax increment financing plans to establish tax increment
financing districts under this section expires June 30, 2020.

(i) Notwithstanding the restrictions in paragraph (f), clause (2), the city may use
increments from a soil deficiency district to acquire parcels and for other infrastructure
costs either inside or outside of the district, but within the project area, if the acquisition or
infrastructure is for a qualified development. For purposes of this paragraph, a development
is a qualified development only if all of the following requirements are satisfied:

(1) the city finds, by resolution, that the land acquisition and infrastructure are
undertaken primarily to serve the development;

(2) the city has a binding, written commitment and adequate financial assurances
from the developer that the development will be constructed; and

(3) the development does not consist of retail trade or housing improvements.

EFFECTIVE DATE.

This section is effective upon approval by the governing
body of the city of Maple Grove and its compliance with the requirements of Minnesota
Statutes, section 645.021.

Sec. 8. CITY OF ANOKA; TIF DISTRICT.

For purposes of Minnesota Statutes, section 469.1763, subdivision 3, paragraph (c),
the city of Anoka's Greens of Anoka redevelopment tax increment financing district is
deemed to be certified on June 29, 2012, rather than its actual certification date of July 2,
2012, and the provisions of Minnesota Statutes, section 469.1763, subdivisions 3 and 4,
apply as if the district were certified on that date.

EFFECTIVE DATE.

This section is effective upon approval by the governing body
of the city of Anoka and upon compliance by the city with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

Sec. 9. CITY OF EDINA; APPROVAL OF 2014 SPECIAL LAW.

Notwithstanding the provisions of Minnesota Statutes, section 645.021, subdivision
3, the chief clerical officer of the city of Edina may file the city's certificate of its approval
of Laws 2014, chapter 308, article 6, section 8, by June 30, 2016, and, if the certificate
is so filed and the requirements of Minnesota Statutes, section 645.021, subdivision 3,
are otherwise complied with, the special law is deemed approved, and all actions taken
by the city prior to the effective date of this section in reliance on Laws 2014, chapter
308, article 6, section 8, are deemed consistent with Laws 2014, chapter 308, article
6, section 8, and this act.

EFFECTIVE DATE.

This section is effective June 30, 2016, without local approval
as an amendment to the provisions of Laws 2014, chapter 308, article 6, section 8.

Sec. 10. CITY OF COON RAPIDS; TAX INCREMENT FINANCING.

Notwithstanding the provisions of Minnesota Statutes, section 469.176, subdivision
1b, or any other law to the contrary, the city of Coon Rapids may collect tax increment
from District 6-1 Port Riverwalk through December 31, 2038.

EFFECTIVE DATE.

This section is effective upon compliance by the governing
bodies of the city of Coon Rapids, Anoka County, and Independent School District No.
11 with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and
645.021, subdivision 3.

Sec. 11. CITY OF COTTAGE GROVE; TAX INCREMENT FINANCING.

The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of
a tax increment financing district, is considered to be met for Tax Increment Financing
District No. 1-12 (Gateway North), administered by the Cottage Grove Economic
Development Authority, if the activities are undertaken prior to January 1, 2017.

EFFECTIVE DATE.

This section is effective upon compliance by the chief clerical
officer of the governing body of the city of Cottage Grove with the requirements of
Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 12. CITY OF NORTHFIELD; TAX INCREMENT FINANCING.

The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of a
tax increment financing district, is considered to be met for the Riverfront Tax Increment
Financing District in the city of Northfield, if the activities are undertaken prior to July
12, 2017.

EFFECTIVE DATE.

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

Sec. 13. CITY OF RICHFIELD; EXTENSION OF DISTRICT.

Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, or any other
law to the contrary, the city of Richfield and the Housing and Redevelopment Authority in
and for the city of Richfield may elect to extend the duration limit of the redevelopment
tax increment financing district known as the Cedar Avenue Tax Increment Financing
District established by Laws 2005, chapter 152, article 2, section 25, by ten years.

EFFECTIVE DATE.

This section is effective upon compliance by the city
of Richfield, Hennepin County, and Independent School District No. 280 with the
requirements of Minnesota Statutes, sections 469.1782, subdivision 2; and 645.021,
subdivisions 2 and 3.

Sec. 14. CITY OF ST. PAUL; TIF AUTHORITY.

(a) For purposes of computing the duration limits under Minnesota Statutes, section
469.176, subdivision 1b, the housing and redevelopment authority of the city of St. Paul
may waive receipt of increment for the Ford Site Redevelopment Tax Increment Financing
District. This authority is limited to the first four years of increment or increments derived
from taxes payable in 2023, whichever occurs first.

(b) If the city elects to waive receipt of increment under paragraph (a), for purposes
of applying any limits based on when the district was certified under Minnesota Statutes,
section 469.176, subdivision 6, or 469.1763, the date of certification for the district is
deemed to be January 2 of the property tax assessment year for which increment is first
received under the waiver.

EFFECTIVE DATE.

This section is effective July 1, 2016, without local approval
under Minnesota Statutes, section 645.023, subdivision 1, paragraph (a).

ARTICLE 8

PUBLIC FINANCE

Section 1.

Minnesota Statutes 2014, section 366.095, subdivision 1, is amended to read:


Subdivision 1.

Certificates of indebtedness.

The town board may issue certificates
of indebtedness within the debt limits for a town purpose otherwise authorized by law.
The certificates shall be payable in not more than ten years and be issued on the terms and
in the manner as the board may determine, provided that notes issued for projects that
eliminate R-22, as such projects are defined in section 240A.09, paragraph (b), clause (2),
shall be payable in not more than 20 years
. If the amount of the certificates to be issued
exceeds 0.25 percent of the estimated market value of the town, they shall not be issued
for at least ten days after publication in a newspaper of general circulation in the town of
the board's resolution determining to issue them. If within that time, a petition asking for
an election on the proposition signed by voters equal to ten percent of the number of voters
at the last regular town election is filed with the clerk, the certificates shall not be issued
until their issuance has been approved by a majority of the votes cast on the question at
a regular or special election. A tax levy shall be made to pay the principal and interest
on the certificates as in the case of bonds.

Sec. 2.

Minnesota Statutes 2014, section 383B.117, subdivision 2, is amended to read:


Subd. 2.

Equipment acquisition; capital notes.

The board may, by resolution and
without public referendum, issue capital notes within existing debt limits for the purpose
of purchasing ambulance and other medical equipment, road construction or maintenance
equipment, public safety equipment and other capital equipment having an expected
useful life at least equal to the term of the notes issued. The notes shall be payable
in not more than ten years and shall be issued on terms and in a manner as the board
determines, provided that notes issued for projects that eliminate R-22, as such projects
are defined in section 240A.09, paragraph (b), clause (2), shall be payable in not more
than 20 years
. The total principal amount of the notes issued for any fiscal year shall not
exceed one percent of the total annual budget for that year and shall be issued solely for
the purchases authorized in this subdivision. A tax levy shall be made for the payment
of the principal and interest on such notes as in the case of bonds. For purposes of this
subdivision, "equipment" includes computer hardware and software, whether bundled with
machinery or equipment or unbundled. For purposes of this subdivision, the term "medical
equipment" includes computer hardware and software and other intellectual property for
use in medical diagnosis, medical procedures, research, record keeping, billing, and other
hospital applications, together with application development services and training related
to the use of the computer hardware and software and other intellectual property, all
without regard to their useful life. For purposes of determining the amount of capital notes
which the county may issue in any year, the budget of the county and Hennepin Healthcare
System, Inc. shall be combined and the notes issuable under this subdivision shall be in
addition to obligations issuable under section 373.01, subdivision 3.

Sec. 3.

Minnesota Statutes 2014, section 410.32, is amended to read:


410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.

(a) Notwithstanding any contrary provision of other law or charter, a home rule
charter city may, by resolution and without public referendum, issue capital notes subject
to the city debt limit to purchase capital equipment.

(b) For purposes of this section, "capital equipment" means:

(1) public safety equipment, ambulance and other medical equipment, road
construction and maintenance equipment, and other capital equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled, together with application development services and training related to the
use of the computer hardware and software.

(c) The equipment or software must have an expected useful life at least as long
as the term of the notes.

(d) The notes shall be payable in not more than ten years and be issued on terms and
in the manner the city determines, provided that notes issued for projects that eliminate
R-22, as such projects are defined in section 240A.09, paragraph (b), clause (2), shall be
payable in not more than 20 years
. The total principal amount of the capital notes issued
in a fiscal year shall not exceed 0.03 percent of the estimated market value of taxable
property in the city for that year.

(e) A tax levy shall be made for the payment of the principal and interest on the
notes, in accordance with section 475.61, as in the case of bonds.

(f) Notes issued under this section shall require an affirmative vote of two-thirds of
the governing body of the city.

(g) Notwithstanding a contrary provision of other law or charter, a home rule charter
city may also issue capital notes subject to its debt limit in the manner and subject to the
limitations applicable to statutory cities pursuant to section 412.301.

Sec. 4.

Minnesota Statutes 2014, section 412.301, is amended to read:


412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.

(a) The council may issue certificates of indebtedness or capital notes subject to the
city debt limits to purchase capital equipment.

(b) For purposes of this section, "capital equipment" means:

(1) public safety equipment, ambulance and other medical equipment, road
construction and maintenance equipment, and other capital equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment
or unbundled, together with application development services and training related to the
use of the computer hardware or software.

(c) The equipment or software must have an expected useful life at least as long as
the terms of the certificates or notes.

(d) Such certificates or notes shall be payable in not more than ten years and shall
be issued on such terms and in such manner as the council may determine, provided,
however, that notes issued for projects that eliminate R-22, as such projects are defined in
section 240A.09, paragraph (b), clause (2), shall be payable in not more than 20 years
.

(e) If the amount of the certificates or notes to be issued to finance any such purchase
exceeds 0.25 percent of the estimated market value of taxable property in the city, they
shall not be issued for at least ten days after publication in the official newspaper of
a council resolution determining to issue them; and if before the end of that time, a
petition asking for an election on the proposition signed by voters equal to ten percent
of the number of voters at the last regular municipal election is filed with the clerk, such
certificates or notes shall not be issued until the proposition of their issuance has been
approved by a majority of the votes cast on the question at a regular or special election.

(f) A tax levy shall be made for the payment of the principal and interest on such
certificates or notes, in accordance with section 475.61, as in the case of bonds.

Sec. 5.

Minnesota Statutes 2014, section 469.034, subdivision 2, is amended to read:


Subd. 2.

General obligation revenue bonds.

(a) An authority may pledge the
general obligation of the general jurisdiction governmental unit as additional security for
bonds payable from income or revenues of the project or the authority. The authority
must find that the pledged revenues will equal or exceed 110 percent of the principal and
interest due on the bonds for each year. The proceeds of the bonds must be used for a
qualified housing development project or projects. The obligations must be issued and
sold in the manner and following the procedures provided by chapter 475, except the
obligations are not subject to approval by the electors, and the maturities may extend to
not more than 35 years for obligations sold to finance housing for the elderly and 40 years
for other obligations issued under this subdivision. The authority is the municipality for
purposes of chapter 475.

(b) The principal amount of the issue must be approved by the governing body of
the general jurisdiction governmental unit whose general obligation is pledged. Public
hearings must be held on issuance of the obligations by both the authority and the general
jurisdiction governmental unit. The hearings must be held at least 15 days, but not more
than 120 days, before the sale of the obligations.

(c) The maximum amount of general obligation bonds that may be issued and
outstanding under this section equals the greater of (1) one-half of one percent of the
estimated market value of the general jurisdiction governmental unit whose general
obligation is pledged, or (2) $3,000,000 $5,000,000. In the case of county or multicounty
general obligation bonds, the outstanding general obligation bonds of all cities in the
county or counties issued under this subdivision must be added in calculating the limit
under clause (1).

(d) "General jurisdiction governmental unit" means the city in which the housing
development project is located. In the case of a county or multicounty authority, the
county or counties may act as the general jurisdiction governmental unit. In the case of
a multicounty authority, the pledge of the general obligation is a pledge of a tax on the
taxable property in each of the counties.

(e) "Qualified housing development project" means a housing development project
providing housing either for the elderly or for individuals and families with incomes not
greater than 80 percent of the median family income as estimated by the United States
Department of Housing and Urban Development for the standard metropolitan statistical
area or the nonmetropolitan county in which the project is located. The project must be
owned for the term of the bonds either by the authority or by a limited partnership or other
entity in which the authority or another entity under the sole control of the authority is
the sole general partner and the partnership or other entity must receive (1) an allocation
from the Department of Management and Budget or an entitlement issuer of tax-exempt
bonding authority for the project and a preliminary determination by the Minnesota
Housing Finance Agency or the applicable suballocator of tax credits that the project
will qualify for four percent low-income housing tax credits or (2) a reservation of nine
percent low-income housing tax credits from the Minnesota Housing Finance Agency or a
suballocator of tax credits for the project. A qualified housing development project may
admit nonelderly individuals and families with higher incomes if:

(1) three years have passed since initial occupancy;

(2) the authority finds the project is experiencing unanticipated vacancies resulting in
insufficient revenues, because of changes in population or other unforeseen circumstances
that occurred after the initial finding of adequate revenues; and

(3) the authority finds a tax levy or payment from general assets of the general
jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher
income individuals or families are not admitted.

(f) The authority may issue bonds to refund bonds issued under this subdivision in
accordance with section 475.67. The finding of the adequacy of pledged revenues required
by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the
issuance of refunding bonds. This paragraph applies to refunding bonds issued on and
after July 1, 1992.

Sec. 6.

Minnesota Statutes 2014, section 469.101, subdivision 1, is amended to read:


Subdivision 1.

Establishment.

An economic development authority may create
and define the boundaries of economic development districts at any place or places within
the city, except that the district boundaries must be contiguous, and may use the powers
granted in sections 469.090 to 469.108 to carry out its purposes. First the authority must
hold a public hearing on the matter. At least ten days before the hearing, the authority
shall publish notice of the hearing in a daily newspaper of general circulation in the city.
Also, the authority shall find that an economic development district is proper and desirable
to establish and develop within the city.

Sec. 7.

Minnesota Statutes 2014, section 473.39, is amended by adding a subdivision
to read:


Subd. 1u.

Obligations.

(a) In addition to other authority in this section, the council
may issue certificates of indebtedness, bonds, or other obligations under this section in an
amount not exceeding $82,100,000 for capital expenditures as prescribed in the council's
transit capital improvement program and for related costs, including the costs of issuance
and sale of the obligations. Of this authorization, after July 1, 2016, the council may
issue certificates of indebtedness, bonds, or other obligations in an amount not exceeding
$40,100,000, and after July 1, 2017, the council may issue certificates of indebtedness,
bonds, or other obligations in an additional amount not exceeding $42,000,000.

(b) This section applies in the counties of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, and Washington.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 8.

Minnesota Statutes 2014, section 475.58, subdivision 3b, is amended to read:


Subd. 3b.

Street reconstruction and bituminous overlays.

(a) A municipality may,
without regard to the election requirement under subdivision 1, issue and sell obligations
for street reconstruction or bituminous overlays, if the following conditions are met:

(1) the streets are reconstructed or overlaid under a street reconstruction or overlay
plan that describes the street reconstruction or overlay to be financed, the estimated costs,
and any planned reconstruction or overlay of other streets in the municipality over the next
five years, and the plan and issuance of the obligations has been approved by a vote of
all a majority of the members of the governing body present at the meeting following a
public hearing for which notice has been published in the official newspaper at least ten
days but not more than 28 days prior to the hearing; and

(2) if a petition requesting a vote on the issuance is signed by voters equal to
five percent of the votes cast in the last municipal general election and is filed with the
municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
only after obtaining the approval of a majority of the voters voting on the question of the
issuance of the obligations. If the municipality elects not to submit the question to the
voters, the municipality shall not propose the issuance of bonds under this section for the
same purpose and in the same amount for a period of 365 days from the date of receipt
of the petition. If the question of issuing the bonds is submitted and not approved by the
voters, the provisions of section 475.58, subdivision 1a, shall apply.

(b) Obligations issued under this subdivision are subject to the debt limit of the
municipality and are not excluded from net debt under section 475.51, subdivision 4.

(c) For purposes of this subdivision, street reconstruction and bituminous overlays
includes utility replacement and relocation and other activities incidental to the street
reconstruction, turn lanes and other improvements having a substantial public safety
function, realignments, other modifications to intersect with state and county roads, and
the local share of state and county road projects. For purposes of this subdivision, "street
reconstruction" includes expenditures for street reconstruction that have been incurred
by a municipality before approval of a street reconstruction plan, if such expenditures
are included in a street reconstruction plan approved on or before the date of the public
hearing under paragraph (a), clause (1), regarding issuance of bonds for such expenditures.

(d) Except in the case of turn lanes, safety improvements, realignments, intersection
modifications, and the local share of state and county road projects, street reconstruction
and bituminous overlays does not include the portion of project cost allocable to widening
a street or adding curbs and gutters where none previously existed.

Sec. 9.

Minnesota Statutes 2014, section 475.60, subdivision 2, is amended to read:


Subd. 2.

Requirements waived.

The requirements as to public sale shall not
apply to:

(1) obligations issued under the provisions of a home rule charter or of a law
specifically authorizing a different method of sale, or authorizing them to be issued in such
manner or on such terms and conditions as the governing body may determine;

(2) obligations sold by an issuer in an amount not exceeding the total sum of
$1,200,000 in any 12-month period;

(3) obligations issued by a governing body other than a school board in anticipation
of the collection of taxes or other revenues appropriated for expenditure in a single year, if
sold in accordance with the most favorable of two or more proposals solicited privately;

(4) obligations sold to any board, department, or agency of the United States of
America or of the state of Minnesota, in accordance with rules or regulations promulgated
by such board, department, or agency;

(5) obligations issued to fund pension and retirement fund liabilities under section
475.52, subdivision 6, obligations issued with tender options under section 475.54,
subdivision 5a
, crossover refunding obligations referred to in section 475.67, subdivision
13
, and any issue of obligations comprised in whole or in part of obligations bearing
interest at a rate or rates which vary periodically referred to in section 475.56;

(6) obligations to be issued for a purpose, in a manner, and upon terms and
conditions authorized by law, if the governing body of the municipality, on the advice of
bond counsel or special tax counsel, determines that interest on the obligations cannot be
represented to be excluded from gross income for purposes of federal income taxation;

(7) obligations issued in the form of an installment purchase contract, lease purchase
agreement, or other similar agreement;

(8) obligations sold under a bond reinvestment program; and

(9) if the municipality has retained an independent financial municipal advisor,
obligations which the governing body determines shall be sold by private negotiation.

ARTICLE 9

IRON RANGE RESOURCES AND REHABILITATION

Section 1.

Minnesota Statutes 2014, section 15.38, subdivision 7, is amended to read:


Subd. 7.

Iron Range resources and rehabilitation Board.

After seeking
a recommendation from the Iron Range Resources and Rehabilitation Board,
the
commissioner of Iron Range resources and rehabilitation Board may purchase insurance it
considers
the commissioner deems necessary and appropriate to insure facilities operated
by the board.

Sec. 2.

Minnesota Statutes 2014, section 116J.424, is amended to read:


116J.424 IRON RANGE RESOURCES AND REHABILITATION BOARD
CONTRIBUTION.

The commissioner of the Iron Range resources and rehabilitation Board with
approval by the board,
shall provide an equal match for any loan or equity investment
made for a facility located in the tax relief area defined in section 273.134, paragraph (b),
by the Minnesota minerals 21st century fund created by section 116J.423. The match may
be in the form of a loan or equity investment, notwithstanding whether the fund makes
a loan or equity investment. The state shall not acquire an equity interest because of an
equity investment or loan by the board under this section and the board at its sole discretion
commissioner, after consultation with the Iron Range Resources and Rehabilitation Board,

shall have the sole discretion to decide what interest it the board acquires in a project. The
commissioner of employment and economic development may require a commitment
from the board commissioner to make the match prior to disbursing money from the fund.

Sec. 3.

Minnesota Statutes 2014, section 216B.161, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

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

(b) "Area development rate" means a rate schedule established by a utility that
provides customers within an area development zone service under a base utility rate
schedule, except that charges may be reduced from the base rate as agreed upon by the
utility and the customer consistent with this section.

(c) "Area development zone" means a contiguous or noncontiguous area designated
by an authority or municipality for development or redevelopment and within which one
of the following conditions exists:

(1) obsolete buildings not suitable for improvement or conversion or other identified
hazards to the health, safety, and general well-being of the community;

(2) buildings in need of substantial rehabilitation or in substandard condition; or

(3) low values and damaged investments.

(d) "Authority" means a rural development financing authority established under
sections 469.142 to 469.151; a housing and redevelopment authority established under
sections 469.001 to 469.047; a port authority established under sections 469.048 to
469.068; an economic development authority established under sections 469.090
to 469.108; a redevelopment agency as defined in sections 469.152 to 469.165; the
commissioner of Iron Range resources and rehabilitation, acting after consultation
with the
board established under section 298.22; a municipality that is administering a
development district created under sections 469.124 to 469.133 or any special law; a
municipality that undertakes a project under sections 469.152 to 469.165, except a town
located outside the metropolitan area as defined in section 473.121, subdivision 2, or with
a population of 5,000 persons or less; or a municipality that exercises the powers of a port
authority under any general or special law.

(e) "Municipality" means a city, however organized, and, with respect to a project
undertaken under sections 469.152 to 469.165, "municipality" has the meaning given in
sections 469.152 to 469.165, and, with respect to a project undertaken under sections
469.142 to 469.151 or a county or multicounty project undertaken under sections 469.004
to 469.008, also includes any county.

Sec. 4.

Minnesota Statutes 2014, section 276A.01, subdivision 8, is amended to read:


Subd. 8.

Municipality.

"Municipality" means a city, town, or township located
in whole or part within the area. If a municipality is located partly within and partly
without the area, the references in sections 276A.01 to 276A.09 to property or any portion
thereof subject to taxation or taxing jurisdiction within the municipality are to the property
or portion thereof that is located in that portion of the municipality within the area,
except that the fiscal capacity of the municipality must be computed upon the basis of the
valuation and population of the entire municipality. A municipality shall be excluded from
the area if its municipal comprehensive zoning and planning policies conscientiously
exclude most commercial-industrial development, for reasons other than preserving an
agricultural use. The commissioner of Iron Range resources and rehabilitation Board and
the commissioner of revenue shall jointly make this determination annually and shall
notify those municipalities that are ineligible to participate in the tax base sharing program
provided in this chapter for the following year. Before making the joint determination, the
commissioner of Iron Range resources and rehabilitation shall seek a recommendation
from the Iron Range Resources and Rehabilitation Board.

Sec. 5.

Minnesota Statutes 2014, section 276A.01, subdivision 17, is amended to read:


Subd. 17.

School fund allocation.

(a) "School fund allocation" means an amount up
to 25 percent of the areawide levy certified by the commissioner of Iron Range resources
and rehabilitation, after seeking a recommendation from the
Iron Range Resources and
Rehabilitation Board, to be used for the purposes of the Iron Range school consolidation
and cooperatively operated school account under section 298.28, subdivision 7a.

(b) The allocation under paragraph (a) shall only be made after the commissioner of
Iron Range resources and rehabilitation, after seeking a recommendation from the
Iron
Range Resources and Rehabilitation Board, has certified by June 30 that the Iron Range
school consolidation and cooperatively operated account has insufficient funds to make
payments as authorized under section 298.28, subdivision 7a.

Sec. 6.

Minnesota Statutes 2014, section 282.38, subdivision 1, is amended to read:


Subdivision 1.

Development.

In any county where the county board by proper
resolution sets aside funds for forest development pursuant to section 282.08, clause (5),
item (i), or section 459.06, subdivision 2, the commissioner of Iron Range resources
and rehabilitation with the approval of the, after seeking a recommendation from the
Iron Range Resources and Rehabilitation
Board, may upon request of the county board
assist said county in carrying out any project for the long range development of its forest
resources through matching of funds or otherwise.

Sec. 7.

Minnesota Statutes 2014, section 298.001, subdivision 8, is amended to read:


Subd. 8.

Commissioner.

"Commissioner" means the commissioner of revenue
of the state of Minnesota, except that when used in sections 298.22 to 298.227, and
298.291 to 298.298, "commissioner" means the commissioner of Iron Range resources
and rehabilitation
.

Sec. 8.

Minnesota Statutes 2014, section 298.22, subdivision 1, is amended to read:


Subdivision 1.

The Office of the Commissioner of Iron Range resources
and rehabilitation.

(a) The Office of the Commissioner of Iron Range resources and
rehabilitation is created as an agency in the executive branch of state government. The
governor shall appoint the commissioner of Iron Range resources and rehabilitation
under section 15.06. The commissioner may expend amounts appropriated to the
commissioner or the board for projects after submitting the expenditure to the board for
a recommendation under subdivision 1a.

(b) The commissioner may hold other positions or appointments that are not
incompatible with duties as commissioner of Iron Range resources and rehabilitation. The
commissioner may appoint a deputy commissioner. All expenses of the commissioner,
including the payment of staff and other assistance as may be necessary, must be paid
out of the amounts appropriated by section 298.28 or otherwise made available by law
to the commissioner. Notwithstanding chapters 16A, 16B, and 16C, the commissioner
may utilize contracting options available under section 471.345 when the commissioner
determines it is in the best interest of the agency. The agency is not subject to sections
16E.016 and 16C.05.

(c) When the commissioner determines that distress and unemployment exists or
may exist in the future in any county by reason of the removal of natural resources or
a possibly limited use of natural resources in the future and any resulting decrease in
employment, the commissioner may use whatever amounts of the appropriation made to
the commissioner of revenue in section 298.28 that are determined to be necessary and
proper in the development of the remaining resources of the county and in the vocational
training and rehabilitation of its residents, except that the amount needed to cover cost
overruns awarded to a contractor by an arbitrator in relation to a contract awarded by
the commissioner or in effect after July 1, 1985, is appropriated from the general fund.
For the purposes of this section, "development of remaining resources" includes, but is
not limited to, the promotion of tourism.

Sec. 9.

Minnesota Statutes 2014, section 298.22, subdivision 1a, is amended to read:


Subd. 1a.

Iron Range Resources and Rehabilitation Board.

The Iron Range
Resources and Rehabilitation Board consists of the state senators and representatives
elected from state senatorial or legislative districts in which one-third or more of the
residents reside in a taconite assistance area as defined in section 273.1341. One additional
state senator shall also be appointed by the senate Subcommittee on Committees of the
Committee on Rules and Administration. All expenditures and projects made by the
commissioner shall first be submitted to the board for approval. The board shall recommend
approval or disapproval or modification of the expenditures and projects.
The expenses
of the board shall be paid by the state from the funds raised pursuant to this section.
Members of the board may be reimbursed for expenses in the manner provided in sections
3.099, subdivision 1, and 3.101, and may receive per diem payments during the interims
between legislative sessions in the manner provided in section 3.099, subdivision 1.

The members shall be appointed in January of every odd-numbered year, and shall
serve until January of the next odd-numbered year. Vacancies on the board shall be filled
in the same manner as original members were chosen.

Sec. 10.

Minnesota Statutes 2014, section 298.22, subdivision 5a, is amended to read:


Subd. 5a.

Forest trust.

The commissioner, upon approval by after requesting a
recommendation from
the board, may purchase forest lands in the taconite assistance area
defined in under section 273.1341 with funds specifically authorized for the purchase. The
acquired forest lands must be held in trust for the benefit of the citizens of the taconite
assistance area as the Iron Range Miners' Memorial Forest. The forest trust lands shall
be managed and developed for recreation and economic development purposes. The
commissioner, upon approval by after requesting a recommendation from the board,
may sell forest lands purchased under this subdivision if the board finds commissioner
determines
that the sale advances the purposes of the trust. Proceeds derived from the
management or sale of the lands and from the sale of timber or removal of gravel or
other minerals from these forest lands shall be deposited into an Iron Range Miners'
Memorial Forest account that is established within the state financial accounts. Funds may
be expended from the account upon approval by after the commissioner has sought a
recommendation from
the board, to purchase, manage, administer, convey interests in,
and improve the forest lands. With approval by After the commissioner has sought a
recommendation from
the board, money in the Iron Range Miners' Memorial Forest
account may be transferred into the corpus of the Douglas J. Johnson economic protection
trust fund established under sections 298.291 to 298.294. The property acquired under
the authority granted by this subdivision and income derived from the property or the
operation or management of the property are exempt from taxation by the state or its
political subdivisions while held by the forest trust.

Sec. 11.

Minnesota Statutes 2014, section 298.22, subdivision 6, is amended to read:


Subd. 6.

Private entity participation.

After seeking a recommendation from the
board, the commissioner may acquire an equity interest in any project for which it the
commissioner
provides funding. The commissioner may establish, participate in the
management of, and dispose of the assets of charitable foundations, nonprofit limited
liability companies, and nonprofit corporations associated with any project for which it
provides funding, including specifically, but without limitation, a corporation within the
meaning of section 317A.011, subdivision 6.

Sec. 12.

Minnesota Statutes 2014, section 298.22, subdivision 8, is amended to read:


Subd. 8.

Spending priority.

In making or approving recommending any
expenditures on programs or projects, the commissioner and the board shall give the
highest priority to programs and projects that target relief to those areas of the taconite
assistance area as defined in section 273.1341, that have the largest percentages of job
losses and population losses directly attributable to the economic downturn in the taconite
industry since the 1980s. The commissioner and the board shall compare the 1980
population and employment figures with the 2000 population and employment figures,
and shall specifically consider the job losses in 2000 and 2001 resulting from the closure
of LTV Steel Mining Company, in making or approving recommending expenditures
consistent with this subdivision, as well as the areas of residence of persons who suffered
job loss for which relief is to be targeted under this subdivision. The commissioner
may lease, for a term not exceeding 50 years and upon the terms determined by the
commissioner and approved after seeking review by the board, surface and mineral
interests owned or acquired by the state of Minnesota acting by and through the office of
the commissioner of Iron Range resources and rehabilitation within those portions of the
taconite assistance area affected by the closure of the LTV Steel Mining Company facility
near Hoyt Lakes. The payments and royalties from these leases must be deposited into the
fund established in section 298.292. This subdivision supersedes any other conflicting
provisions of law and does not preclude the commissioner and the board from making
expenditures for programs and projects in other areas after seeking review by the board.

Sec. 13.

Minnesota Statutes 2014, section 298.22, subdivision 10, is amended to read:


Subd. 10.

Sale or privatization of functions.

The commissioner of Iron
Range resources and rehabilitation may not sell or privatize the Ironworld Discovery
Center or Giants Ridge Golf and Ski Resort without prior approval by first seeking a
recommendation from
the board.

Sec. 14.

Minnesota Statutes 2014, section 298.22, subdivision 11, is amended to read:


Subd. 11.

Budgeting.

The commissioner of Iron Range resources and rehabilitation
shall annually prepare a budget for operational expenditures, programs, and projects, and
submit it to the Iron Range Resources and Rehabilitation Board for a recommendation.
After the budget is approved by the board and the governor, the commissioner may spend
money in accordance with the approved budget.

Sec. 15.

Minnesota Statutes 2014, section 298.221, is amended to read:


298.221 RECEIPTS FROM CONTRACTS; APPROPRIATION.

(a) Except as provided in paragraph (c), all money paid to the state of Minnesota
pursuant to the terms of any contract entered into by the state under authority of section
298.22 and any fees which may, in the discretion of the commissioner of Iron Range
resources and rehabilitation, be charged in connection with any project pursuant to that
section as amended, shall be deposited in the state treasury to the credit of the Iron Range
Resources and Rehabilitation Board account in the special revenue fund and are hereby
appropriated for the purposes of section 298.22.

(b) Notwithstanding section 16A.013, merchandise may be accepted by the
commissioner of the Iron Range Resources and Rehabilitation Board for payment of
advertising contracts if the commissioner determines that the merchandise can be used
for special event prizes or mementos at facilities operated by the board. Nothing in this
paragraph authorizes the commissioner or a member of the board to receive merchandise
for personal use.

(c) All fees charged by the commissioner in connection with public use of the
state-owned ski and golf facilities at the Giants Ridge Recreation Area and all other
revenues derived by the commissioner from the operation or lease of those facilities
and from the lease, sale, or other disposition of undeveloped lands at the Giants Ridge
Recreation Area must be deposited into an Iron Range Resources and Rehabilitation
Board account that is created within the state enterprise fund. All funds deposited in the
enterprise fund account are appropriated to the commissioner to be expended, subject to
approval by
after seeking a recommendation from the board, as follows:

(1) to pay costs associated with the construction, equipping, operation, repair, or
improvement of the Giants Ridge Recreation Area facilities or lands;

(2) to pay principal, interest and associated bond issuance, reserve, and servicing
costs associated with the financing of the facilities; and

(3) to pay the costs of any other project authorized under section 298.22.

Sec. 16.

Minnesota Statutes 2014, section 298.2211, subdivision 3, is amended to read:


Subd. 3.

Project approval.

All projects authorized by this section shall be submitted
by the commissioner to the Iron Range Resources and Rehabilitation Board for approval
by
a recommendation from the board. Prior to the commencement of a project involving
the exercise by the commissioner of any authority of sections 469.174 to 469.179, the
governing body of each municipality in which any part of the project is located and the
county board of any county containing portions of the project not located in an incorporated
area shall by majority vote approve or disapprove the project. Any project approved by
the board commissioner and the applicable governing bodies, if any, together with detailed
information concerning the project, its costs, the sources of its funding, and the amount of
any bonded indebtedness to be incurred in connection with the project, shall be transmitted
to the governor, who shall approve, disapprove, or return the proposal for additional
consideration within 30 days of receipt. No project authorized under this section shall be
undertaken, and no obligations shall be issued and no tax increments shall be expended for
a project authorized under this section until the project has been approved by the governor.

Sec. 17.

Minnesota Statutes 2014, section 298.2213, subdivision 4, is amended to read:


Subd. 4.

Project approval.

After seeking a recommendation from the board and,
the
commissioner shall by August 1 each year prepare a list of projects to be funded from
the money appropriated in this section with necessary supporting information including
descriptions of the projects, plans, and cost estimates. A project must not be approved by
the board commissioner unless it the commissioner finds that:

(1) the project will materially assist, directly or indirectly, the creation of additional
long-term employment opportunities;

(2) the prospective benefits of the expenditure exceed the anticipated costs; and

(3) in the case of assistance to private enterprise, the project will serve a sound
business purpose.

Each project must be approved by the board and the commissioner of Iron Range
resources and rehabilitation. The list of projects must be submitted to the governor,
who shall, by November 15 of each year, approve, disapprove, or return for further
consideration, each project. The money for a project may be spent only upon approval of
the project by the governor. The board commissioner may submit supplemental projects
for approval at any time, after seeking a recommendation from the board.

Sec. 18.

Minnesota Statutes 2014, section 298.2213, subdivision 5, is amended to read:


Subd. 5.

Advisory committees.

Before submission to the board of a proposal for
a project for expenditure of money appropriated under this section,
The commissioner
of Iron Range resources and rehabilitation shall appoint a technical advisory committee
consisting of at least seven persons who are knowledgeable in areas related to the
objectives of the proposal. If the project involves investment in a scientific research
proposal, at least four of the committee members must be knowledgeable in the specific
scientific research area relating to the project. Members of the committees must be
compensated as provided in section 15.059, subdivision 3. The board commissioner shall
not act on a proposal for a request for expenditure of money appropriated under this
section
until it has received the commissioner has sought review from the board of the
evaluation and recommendations of the technical advisory committee.

Sec. 19.

Minnesota Statutes 2014, section 298.2213, subdivision 6, is amended to read:


Subd. 6.

Use of repayments and earnings.

Principal and interest received in
repayment of loans made under this section must be deposited in the state treasury
and are appropriated to the board for the purposes of this section
northeast Minnesota
economic development fund account in the special revenue fund in the state treasury. The
commissioner of Iron Range resources and rehabilitation must seek a recommendation
from the Iron Range Resources and Rehabilitation Board for any use of funds appropriated
under this section
.

Sec. 20.

Minnesota Statutes 2014, section 298.223, subdivision 1, is amended to read:


Subdivision 1.

Creation; purposes.

A fund called the taconite environmental
protection fund is created for the purpose of reclaiming, restoring and enhancing those
areas of northeast Minnesota located within the taconite assistance area defined in section
273.1341, that are adversely affected by the environmentally damaging operations
involved in mining taconite and iron ore and producing iron ore concentrate and for the
purpose of promoting the economic development of northeast Minnesota. The taconite
environmental protection fund shall be used for the following purposes:

(1) to initiate investigations into matters the Iron Range Resources and Rehabilitation
Board determines are in need of study and which will determine the environmental
problems requiring remedial action;

(2) reclamation, restoration, or reforestation of mine lands not otherwise provided
for by state law;

(3) local economic development projects but only if those projects are approved by
the board commissioner after seeking a recommendation of the projects from the board,
and public works, including construction of sewer and water systems located within the
taconite assistance area defined in section 273.1341;

(4) monitoring of mineral industry related health problems among mining employees;

(5) local public works projects under section 298.227, paragraph (c); and

(6) local public works projects as provided under this clause. The following amounts
shall be distributed in 2009 based upon the taxable tonnage of production in 2008:

(i) .4651 cent per ton to the city of Aurora for street repair and renovation;

(ii) .4264 cent per ton to the city of Biwabik for street and utility infrastructure
improvements to the south side industrial site;

(iii) .6460 cent per ton to the city of Buhl for street repair;

(iv) 1.0336 cents per ton to the city of Hoyt Lakes for public utility improvements;

(v) 1.1628 cents per ton to the city of Eveleth for water and sewer infrastructure
upgrades;

(vi) 1.0336 cents per ton to the city of Gilbert for water and sewer infrastructure
upgrades;

(vii) .7752 cent per ton to the city of Mountain Iron for water and sewer infrastructure;

(viii) 1.2920 cents per ton to the city of Virginia for utility upgrades and accessibility
modifications for the miners' memorial;

(ix) .6460 cent per ton to the town of White for Highway 135 road upgrades;

(x) 1.9380 cents per ton to the city of Hibbing for public infrastructure projects;

(xi) 1.1628 cents per ton to the city of Chisholm for water and sewer repair;

(xii) .6460 cent per ton to the town of Balkan for community center repairs;

(xiii) .9044 cent per ton to the city of Babbitt for city garage construction;

(xiv) .5168 cent per ton to the city of Cook for public infrastructure projects;

(xv) .5168 cent per ton to the city of Ely for reconstruction of 2nd Avenue West;

(xvi) .6460 cent per ton to the city of Tower for water infrastructure upgrades;

(xvii) .1292 cent per ton to the city of Orr for water infrastructure upgrades;

(xviii) .1292 cent per ton to the city of Silver Bay for emergency cleanup;

(xix) .3230 cent per ton to Lake County for trail construction;

(xx) .1292 cent per ton to Cook County for construction of tennis courts in Grand
Marais;

(xxi) .3101 cent per ton to the city of Two Harbors for water infrastructure
improvements;

(xxii) .1938 cent per ton for land acquisition for phase one of Cook Airport project;

(xxiii) 1.0336 cents per ton to the city of Coleraine for water and sewer
improvements along Gayley Avenue;

(xxiv) .3876 cent per ton to the city of Marble for construction of a city
administration facility;

(xxv) .1292 cent per ton to the city of Calumet for repairs at city hall and the
community center;

(xxvi) .6460 cent per ton to the city of Nashwauk for electrical infrastructure
upgrades;

(xxvii) 1.0336 cents per ton to the city of Keewatin for water and sewer upgrades
along Depot Street;

(xxviii) .2584 cent per ton to the city of Aitkin for water, sewer, street, and gutter
improvements;

(xxix) 1.1628 cents per ton to the city of Grand Rapids for water and sewer
infrastructure upgrades at Pokegema Golf Course and Park Place;

(xxx) .1809 cent per ton to the city of Grand Rapids for water and sewer upgrades
for 1st Avenue from River Road to 3rd Street SE; and

(xxxi) .9044 cent per ton to the city of Cohasset for upgrades to the railroad crossing
at Highway 2 and County Road 62.

Sec. 21.

Minnesota Statutes 2014, section 298.223, subdivision 2, is amended to read:


Subd. 2.

Administration.

(a) The taconite area environmental protection fund shall
be administered by the commissioner of the Iron Range Resources and Rehabilitation
Board. The commissioner shall by September 1 of each year submit to the board a list
of projects to be funded from the taconite area environmental protection fund, with such
supporting information including description of the projects, plans, and cost estimates as
may be necessary.

(b) Each year no less than one-half of the amounts deposited into the taconite
environmental protection fund must be used for public works projects, including
construction of sewer and water systems, as specified under subdivision 1, clause (3).
After seeking a recommendation from the Iron Range Resources and Rehabilitation Board,
the commissioner
may waive the requirements of this paragraph.

(c) Upon approval by the board, The list of projects approved by the commissioner
under this subdivision, after the commissioner has sought review of the projects by the
board,
shall be submitted to the governor by November 1 of each year. By December 1 of
each year, the governor shall approve or disapprove, or return for further consideration,
each project. Funds for a project may be expended only upon approval of the project by
the board commissioner and the governor. The commissioner may submit supplemental
projects to the board and for approval from the governor for approval after seeking review
of the supplemental projects from the board
at any time.

Sec. 22.

Minnesota Statutes 2014, section 298.227, is amended to read:


298.227 TACONITE ECONOMIC DEVELOPMENT FUND.

(a) An amount equal to that distributed pursuant to each taconite producer's taxable
production and qualifying sales under section 298.28, subdivision 9a, shall be held by
the Iron Range Resources and Rehabilitation Board in a separate taconite economic
development fund for each taconite and direct reduced ore producer. Money from the
fund for each producer shall be released by the commissioner after review by a joint
committee consisting of an equal number of representatives of the salaried employees and
the nonsalaried production and maintenance employees of that producer. The District 11
director of the United States Steelworkers of America, on advice of each local employee
president, shall select the employee members. In nonorganized operations, the employee
committee shall be elected by the nonsalaried production and maintenance employees. The
review must be completed no later than six months after the producer presents a proposal
for expenditure of the funds to the committee. The funds held pursuant to this section may
be released only for workforce development and associated public facility improvement,
or for acquisition of plant and stationary mining equipment and facilities for the producer
or for research and development in Minnesota on new mining, or taconite, iron, or steel
production technology, but only if the producer provides a matching expenditure equal to
the amount of the distribution to be used for the same purpose beginning with distributions
in 2014. Effective for proposals for expenditures of money from the fund beginning May
26, 2007, the commissioner may not release the funds before the next scheduled meeting
of the board. If a proposed expenditure is not approved by the commissioner, after
seeking a recommendation from the
board, the funds must be deposited in the Taconite
Environmental Protection Fund under sections 298.222 to 298.225. If a producer uses
money which has been released from the fund prior to May 26, 2007 to procure haulage
trucks, mobile equipment, or mining shovels, and the producer removes the piece of
equipment from the taconite tax relief area defined in section 273.134 within ten years
from the date of receipt of the money from the fund, a portion of the money granted
from the fund must be repaid to the taconite economic development fund. The portion
of the money to be repaid is 100 percent of the grant if the equipment is removed from
the taconite tax relief area within 12 months after receipt of the money from the fund,
declining by ten percent for each of the subsequent nine years during which the equipment
remains within the taconite tax relief area. If a taconite production facility is sold after
operations at the facility had ceased, any money remaining in the fund for the former
producer may be released to the purchaser of the facility on the terms otherwise applicable
to the former producer under this section. If a producer fails to provide matching funds
for a proposed expenditure within six months after the commissioner approves release
of the funds, the funds are available for release to another producer in proportion to the
distribution provided and under the conditions of this section. Any portion of the fund
which is not released by the commissioner within one year of its deposit in the fund shall
be divided between the taconite environmental protection fund created in section 298.223
and the Douglas J. Johnson economic protection trust fund created in section 298.292 for
placement in their respective special accounts. Two-thirds of the unreleased funds shall be
distributed to the taconite environmental protection fund and one-third to the Douglas J.
Johnson economic protection trust fund.

(b)(i) Notwithstanding the requirements of paragraph (a), setting the amount of
distributions and the review process, an amount equal to ten cents per taxable ton of
production in 2007, for distribution in 2008 only, that would otherwise be distributed under
paragraph (a), may be used for a loan or grant for the cost of providing for a value-added
wood product facility located in the taconite tax relief area and in a county that contains a
city of the first class. This amount must be deducted from the distribution under paragraph
(a) for which a matching expenditure by the producer is not required. The granting of the
loan or grant is subject to approval by the commissioner, after seeking a recommendation
from
the board. If the money is provided as a loan, interest must be payable on the loan at
the rate prescribed in section 298.2213, subdivision 3. (ii) Repayments of the loan and
interest, if any, must be deposited in the taconite environment protection fund under
sections 298.222 to 298.225. If a loan or grant is not made under this paragraph by July 1,
2012, the amount that had been made available for the loan under this paragraph must be
transferred to the taconite environment protection fund under sections 298.222 to 298.225.
(iii) Money distributed in 2008 to the fund established under this section that exceeds ten
cents per ton is available to qualifying producers under paragraph (a) on a pro rata basis.

(c) Repayment or transfer of money to the taconite environmental protection fund
under paragraph (b), item (ii), must be allocated by the commissioner of Iron Range
resources and rehabilitation, after seeking a recommendation from the Iron Range
Resources and Rehabilitation
Board for public works projects in house legislative districts
in the same proportion as taxable tonnage of production in 2007 in each house legislative
district, for distribution in 2008, bears to total taxable tonnage of production in 2007, for
distribution in 2008. Notwithstanding any other law to the contrary, expenditures under
this paragraph do not require approval by the governor. For purposes of this paragraph,
"house legislative districts" means the legislative districts in existence on May 15, 2009.

Sec. 23.

Minnesota Statutes 2014, section 298.28, subdivision 7a, is amended to read:


Subd. 7a.

Iron Range school consolidation and cooperatively operated school
account.

The following amounts must be allocated to the Iron Range Resources and
Rehabilitation Board to be deposited in the Iron Range school consolidation and
cooperatively operated school account that is hereby created:

(1)(i) for distributions in 2015 through 2023, ten cents per taxable ton of the tax
imposed under section 298.24; and (ii) for distributions beginning in 2024, five cents per
taxable ton of the tax imposed under section 298.24;

(2) the amount as determined under section 298.17, paragraph (b), clause (3);

(3)(i) for distributions in 2015, an amount equal to two-thirds of the increased tax
proceeds attributable to the increase in the implicit price deflator as provided in section
298.24, subdivision 1, with the remaining one-third to be distributed to the Douglas J.
Johnson economic protection trust fund;

(ii) for distributions in 2016, an amount equal to two-thirds of the sum of the
increased tax proceeds attributable to the increase in the implicit price deflator as provided
in section 298.24, subdivision 1, for distribution years 2015 and 2016, with the remaining
one-third to be distributed to the Douglas J. Johnson economic protection trust fund; and

(iii) for distributions in 2017, an amount equal to two-thirds of the sum of the
increased tax proceeds attributable to the increase in the implicit price deflator as provided
in section 298.24, subdivision 1, for distribution years 2015, 2016, and 2017, with the
remaining one-third to be distributed to the Douglas J. Johnson economic protection
trust fund; and

(4) any other amount as provided by law.

Expenditures from this account may be approved as ongoing annual expenditures
and
shall be made only to provide disbursements to assist school districts with the
payment of bonds that were issued for qualified school projects, or for any other school
disbursement as approved by the commissioner of Iron Range resources and rehabilitation
after the commissioner of Iron Range resources and rehabilitation has sought review of the
expenditures by the
Iron Range Resources and Rehabilitation Board. For purposes of this
section, "qualified school projects" means school projects within the taconite assistance
area as defined in section 273.1341, that were (1) approved, by referendum, after April 3,
2006; and (2) approved by the commissioner of education pursuant to section 123B.71.

Beginning in fiscal year 2019, the disbursement to school districts for payments for
bonds issued under section 123A.482, subdivision 9, must be increased each year to
offset any reduction in debt service equalization aid that the school district qualifies for in
that year, under section 123B.53, subdivision 6, compared with the amount the school
district qualified for in fiscal year 2018.

No expenditure under this section shall be made unless approved by seven members
of
the commissioner of Iron Range resources and rehabilitation after seeking review of the
expenditure from
the Iron Range Resources and Rehabilitation Board.

Sec. 24.

Minnesota Statutes 2014, section 298.28, subdivision 9d, is amended to read:


Subd. 9d.

Iron Range higher education account.

Five cents per taxable ton must
be allocated to the Iron Range Resources and Rehabilitation Board to be deposited in
an Iron Range higher education account that is hereby created, to be used for higher
education programs conducted at educational institutions in the taconite assistance area
defined in section 273.1341. The Iron Range Higher Education committee under section
298.2214, and the Iron Range Resources and Rehabilitation Board commissioner of Iron
Range resources and rehabilitation
must approve all expenditures from the account, after
seeking review and recommendation of the expenditures from the Iron Range Resources
and Rehabilitation Board
.

Sec. 25.

Minnesota Statutes 2014, section 298.292, subdivision 2, is amended to read:


Subd. 2.

Use of money.

Money in the Douglas J. Johnson economic protection trust
fund may be used for the following purposes:

(1) to provide loans, loan guarantees, interest buy-downs and other forms of
participation with private sources of financing, but a loan to a private enterprise shall be
for a principal amount not to exceed one-half of the cost of the project for which financing
is sought, and the rate of interest on a loan to a private enterprise shall be no less than the
lesser of eight percent or an interest rate three percentage points less than a full faith
and credit obligation of the United States government of comparable maturity, at the
time that the loan is approved;

(2) to fund reserve accounts established to secure the payment when due of the
principal of and interest on bonds issued pursuant to section 298.2211;

(3) to pay in periodic payments or in a lump-sum payment any or all of the interest
on bonds issued pursuant to chapter 474 for the purpose of constructing, converting,
or retrofitting heating facilities in connection with district heating systems or systems
utilizing alternative energy sources;

(4) to invest in a venture capital fund or enterprise that will provide capital to other
entities that are engaging in, or that will engage in, projects or programs that have the
purposes set forth in subdivision 1. No investments may be made in a venture capital fund
or enterprise unless at least two other unrelated investors make investments of at least
$500,000 in the venture capital fund or enterprise, and the investment by the Douglas
J. Johnson economic protection trust fund may not exceed the amount of the largest
investment by an unrelated investor in the venture capital fund or enterprise. For purposes
of this subdivision, an "unrelated investor" is a person or entity that is not related to
the entity in which the investment is made or to any individual who owns more than 40
percent of the value of the entity, in any of the following relationships: spouse, parent,
child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of
the value of all interests in it. For purposes of determining the limitations under this
clause, the amount of investments made by an investor other than the Douglas J. Johnson
economic protection trust fund is the sum of all investments made in the venture capital
fund or enterprise during the period beginning one year before the date of the investment
by the Douglas J. Johnson economic protection trust fund; and

(5) to purchase forest land in the taconite assistance area defined in section 273.1341
to be held and managed as a public trust for the benefit of the area for the purposes
authorized in section 298.22, subdivision 5a. Property purchased under this section may
be sold by the commissioner upon approval by after seeking a recommendation from
the board. The net proceeds must be deposited in the trust fund for the purposes and
uses of this section.

Money from the trust fund shall be expended only in or for the benefit of the taconite
assistance area defined in section 273.1341.

Sec. 26.

Minnesota Statutes 2014, section 298.294, is amended to read:


298.294 INVESTMENT OF FUND.

(a) The trust fund established by section 298.292 shall be invested pursuant to law
by the State Board of Investment and the net interest, dividends, and other earnings arising
from the investments shall be transferred, except as provided in paragraph (b), on the first
day of each month to the trust and shall be included and become part of the trust fund.
The amounts transferred, including the interest, dividends, and other earnings earned
prior to July 13, 1982, together with the additional amount of $10,000,000 for fiscal year
1983, which is appropriated April 21, 1983, are appropriated from the trust fund to the
commissioner of Iron Range resources and rehabilitation for deposit in a separate account
for expenditure for the purposes set forth in section 298.292. Amounts appropriated
pursuant to this section shall not cancel but shall remain available unless expended.

(b) For fiscal years 2010 and 2011 only, $1,500,000 of the net interest, dividends,
and other earnings under paragraph (a) shall be transferred to a special account. Funds
in the special account are available for loans or grants to businesses, with priority given
to businesses with 25 or fewer employees. Funds may be used for wage subsidies for
up to 52 weeks of up to $5 per hour or other activities, including, but not limited to,
short-term operating expenses and purchase of equipment and materials by businesses
under financial duress, that will create additional jobs in the taconite assistance area
under section 273.1341. Expenditures from the special account must be approved by the
commissioner after seeking a recommendation from the board.

(c) To qualify for a grant or loan, a business must be currently operating and have
been operating for one year immediately prior to its application for a loan or grant, and its
corporate headquarters must be located in the taconite assistance area.

Sec. 27.

Minnesota Statutes 2014, section 298.296, subdivision 1, is amended to read:


Subdivision 1.

Project approval.

(a) The commissioner of Iron Range resources and
rehabilitation, after seeking a recommendation from the
board and commissioner, shall by
August 1 of each year prepare a list of projects to be funded from the Douglas J. Johnson
economic protection trust with necessary supporting information including description of
the projects, plans, and cost estimates. These projects shall be consistent with the priorities
established in section 298.292 and shall not be approved by the board commissioner
unless it the commissioner, after seeking a recommendation from the board, finds that:

(a) (1) the project will materially assist, directly or indirectly, the creation of
additional long-term employment opportunities;

(b) (2) the prospective benefits of the expenditure exceed the anticipated costs; and

(c) (3) in the case of assistance to private enterprise, the project will serve a sound
business purpose.

(b) Each project must be approved by over one-half of all of the members of the
board and
the commissioner of Iron Range resources and rehabilitation after seeking a
recommendation from the board for the project
. The list of projects shall be submitted to
the governor, who shall, by November 15 of each year, approve or disapprove, or return
for further consideration, each project. The money for a project may be expended only
upon approval of the project by the governor. The board commissioner may submit a
supplemental projects project for approval at any time after seeking a recommendation for
the project from the board
.

Sec. 28.

Minnesota Statutes 2014, section 298.296, subdivision 2, is amended to read:


Subd. 2.

Expenditure of funds.

(a) Before January 1, 2028, funds may be expended
on projects and for administration of the trust fund only from the net interest, earnings,
and dividends arising from the investment of the trust at any time, including net interest,
earnings, and dividends that have arisen prior to July 13, 1982, plus $10,000,000 made
available for use in fiscal year 1983, except that any amount required to be paid out of the
trust fund to provide the property tax relief specified in Laws 1977, chapter 423, article
X, section 4, and to make school bond payments and payments to recipients of taconite
production tax proceeds pursuant to section 298.225, may be taken from the corpus of
the trust.

(b) Additionally, upon recommendation by the commissioner after seeking a