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SF 2255

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 05/11/2018 03:45pm

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Current Version - 1st Engrossment

A bill for an act
relating to financing and operating of state and local government; making changes
to individual income, corporate franchise, estate, property, sales and use, excise,
mineral, special, local, and other miscellaneous taxes and tax-related provisions;
modifying local government aids, credits, tax increment financing, and public
finance; providing for new income tax subtractions, additions, and credits;
establishing a first-time home buyer savings account program; modifying the
education credit; providing a credit for donations to fund K-12 scholarships;
modifying residency definitions; providing estate tax conformity; modifying debt
service equalization revenue; providing for and modifying property tax exemptions
and classifications; modifying the Sustainable Forest Incentive Act; changing levy
certification dates; establishing a school building bond agricultural tax credit;
modifying state general levy; modifying certain local government aids; authorizing
assessor accreditation waivers; modifying sales tax definitions and exemptions;
providing sales tax exemptions; authorizing certain tax increment financing
authority; authorizing certain local taxes; authorizing provisions related to taconite
production tax; clarifying Iron Range Resources and Rehabilitation Board approval
authority; making minor policy, technical, and conforming changes; requiring
reports; appropriating money;amending Minnesota Statutes 2016, sections 13.51,
subdivision 2; 40A.18, subdivision 2; 69.021, subdivision 5; 84.82, subdivision
10; 84.922, subdivision 11; 86B.401, subdivision 12; 115A.1314, subdivision 1;
123B.53, subdivisions 4, 5; 127A.45, subdivisions 10, 13; 128C.24; 136A.129,
subdivision 3; 270.071, subdivisions 2, 7, 8, by adding a subdivision; 270.072,
subdivisions 2, 3, by adding a subdivision; 270.074, subdivision 1; 270.078,
subdivision 1; 270.12, by adding a subdivision; 270.82, subdivision 1; 270A.03,
subdivision 5; 270B.14, subdivision 1, by adding a subdivision; 270C.171,
subdivision 1; 270C.30; 270C.33, subdivisions 5, 8; 270C.34, subdivision 2;
270C.35, subdivision 3, by adding a subdivision; 270C.38, subdivision 1; 270C.445,
subdivisions 2, 3, 5a, 6, 6a, 6b, 6c, 7, 8, by adding a subdivision; 270C.446,
subdivisions 2, 3, 4, 5; 270C.447, subdivisions 1, 2, 3, by adding a subdivision;
270C.72, subdivision 4; 270C.89, subdivision 1; 270C.9901; 271.06, subdivisions
2, 7; 272.02, subdivisions 9, 10, 86, by adding a subdivision; 272.0211, subdivision
1; 272.025, subdivision 1; 272.029, subdivisions 2, 4, by adding a subdivision;
272.0295, subdivision 4, by adding a subdivision; 272.115, subdivisions 1, 2, 3;
273.061, subdivision 7; 273.0755; 273.08; 273.121, by adding a subdivision;
273.124, subdivisions 13, 13d; 273.125, subdivision 8; 273.13, subdivisions 22,
23, 25, 34; 273.135, subdivision 1; 273.1392; 273.1393; 273.33, subdivisions 1,
2; 273.371; 273.372, subdivisions 1, 2, 4, by adding subdivisions; 274.01,
subdivision 1; 274.014, subdivision 3; 274.13, subdivision 1; 274.135, subdivision
3; 275.025, subdivisions 1, 2, 4; 275.065, subdivisions 1, 3; 275.07, subdivisions
1, 2; 275.08, subdivision 1b; 275.62, subdivision 2; 276.04, subdivision 2; 278.01,
subdivision 1; 279.01, subdivision 2; 282.01, subdivisions 1a, 1d; 287.08; 287.2205;
289A.08, subdivisions 11, 16, by adding a subdivision; 289A.09, subdivisions 1,
2; 289A.10, subdivision 1; 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,
subdivisions 2a, 7; 289A.60, subdivisions 13, 28, by adding a subdivision; 289A.63,
by adding a subdivision; 290.01, subdivision 7; 290.0131, subdivision 10, as
amended, by adding subdivisions; 290.0132, subdivision 21, by adding
subdivisions; 290.0133, subdivision 12, as amended, by adding a subdivision;
290.06, subdivisions 2c, 2d, by adding subdivisions; 290.0671, subdivision 1, as
amended; 290.0672, subdivision 1; 290.0674, by adding a subdivision; 290.068,
subdivision 2, by adding a subdivision; 290.081; 290.091, subdivision 2; 290.0922,
subdivision 2; 290.17, subdivision 2; 290.31, subdivision 1; 290A.03, subdivision
3; 290A.10; 290A.19; 290C.03; 291.005, subdivision 1, as amended; 291.016,
subdivisions 2, 3; 291.03, subdivisions 1, 9, 11; 291.075; 295.53, subdivision 1;
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.16, subdivision 2; 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, 4, 34; 297A.66, subdivisions 1, 2, 4, by adding a
subdivision; 297A.67, subdivisions 2, 4, 5, 6, by adding a subdivision; 297A.68,
subdivision 19; 297A.70, subdivision 14, by adding a subdivision; 297A.71,
subdivision 44, by adding subdivisions; 297A.75, subdivisions 1, 2, 3; 297A.82,
subdivisions 4, 4a; 297D.02; 297E.02, subdivisions 3, 7; 297E.04, subdivision 1;
297E.05, subdivision 4; 297E.06, subdivision 1; 297F.09, subdivision 1; 297F.23;
297G.03, by adding a subdivision; 297G.09, subdivision 1; 297G.22; 297H.06,
subdivision 2; 297I.05, subdivision 2; 297I.10, subdivisions 1, 3; 297I.30,
subdivision 7, by adding a subdivision; 297I.60, subdivision 2; 298.01, subdivisions
3, 4, 4c; 298.24, subdivision 1; 298.28, subdivisions 2, 5; 366.095, subdivision 1;
383B.117, subdivision 2; 410.32; 412.301; 414.09, subdivision 2; 469.034,
subdivision 2; 469.101, subdivision 1; 469.1763, subdivisions 1, 2, 3; 469.178,
subdivision 7; 469.190, subdivisions 1, 7; 469.319, subdivision 5; 473H.09;
473H.17, subdivision 1a; 475.58, subdivision 3b; 475.60, subdivision 2; 477A.011,
subdivision 34; 477A.0124, subdivision 2; 477A.013, subdivisions 1, 8, 9, by
adding a subdivision; 477A.03, subdivisions 2a, 2b; 477A.12, subdivision 1;
477A.19, by adding subdivisions; 559.202, subdivision 2; 609.5316, subdivision
3; Laws 1980, chapter 511, sections 1, subdivision 2, as amended; 2, as amended;
Laws 1991, chapter 291, article 8, section 27, subdivisions 3, as amended, 4, as
amended, 5; Laws 1996, chapter 471, article 2, section 29, subdivisions 1, as
amended, 4, as amended; article 3, section 51; Laws 1999, chapter 243, article 4,
sections 17, subdivisions 3, 5, by adding a subdivision; 18, subdivision 1, as
amended; Laws 2005, First Special Session chapter 3, article 5, sections 38,
subdivisions 2, as amended, 4, as amended; 44, subdivisions 3, as amended, 4, 5,
as amended; Laws 2008, chapter 154, article 9, section 21, subdivision 2; Laws
2008, chapter 366, article 7, section 20; Laws 2009, chapter 88, article 5, section
17, as amended; Laws 2014, chapter 308, article 6, sections 8, subdivision 1; 9;
article 9, section 94; Laws 2016, chapter 187, section 5; proposing coding for new
law in Minnesota Statutes, chapters 116J; 273; 289A; 290; 290B; 290C; 293; 297A;
477A; proposing coding for new law as Minnesota Statutes, chapter 462D; repealing
Minnesota Statutes 2016, sections 270.074, subdivision 2; 270C.445, subdivision
1; 270C.447, subdivision 4; 281.22; 289A.10, subdivision 1a; 289A.12, subdivision
18; 289A.18, subdivision 3a; 289A.20, subdivision 3a; 290.9743; 290.9744;
290C.02, subdivisions 5, 9; 290C.06; 291.03, subdivisions 8, 9, 10, 11; 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

INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES

Section 1.

[116J.5491] WORKFORCE HOUSING TAX CREDIT.

Subdivision 1.

Definitions.

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

(b) "City" means a statutory or home rule charter city.

(c) "Developer" means the individual or entity that is responsible for arranging financing
for and construction of a qualified workforce housing project.

(d) "Eligible project site" means the site for the proposed qualified workforce housing
project that must be located in:

(1) an area that does not require extension of public infrastructure, other than connections
to or access for the site, and that is located outside of the metropolitan area, as defined in
section 473.121, subdivision 2;

(2) a city with at least 500 jobs, as measured in the QCEW, or within the jurisdiction of
an economic development authority, formed under Laws 1988, chapter 516, section 1, as a
joint partnership between a city and county and excluding those established by the county
only; and

(3) an area, consisting of the city in which the site is located and any other city or town
located within 15 miles or less of the site, with an average vacancy rate for market rate
residential rental properties of four percent or less for any two of the last five years, based
on a market housing analysis that supports demand for the proposed qualified workforce
housing project.

(e) "Market rate residential rental properties" means properties that are rented at market
value and excludes properties constructed with:

(1) financial assistance requiring the property to be occupied by residents that meet
income limits under federal or state law of initial occupancy; and

(2) federal, state, or local flood recovery assistance, regardless of whether that assistance
imposed income limits as a condition of receiving assistance.

(f) "QCEW" means the Quarterly Census of Employment and Wages with the most
recent annual data published by the commissioner.

(g) "Qualified investment" means a cash investment or the fair market value equivalent
for common stock, land, a partnership or membership interest, preferred stock, debt with
mandatory conversion to equity, or an equivalent ownership interest as determined by the
commissioner that is made in a qualified workforce housing project.

(h) "Qualified project investor" means an investor who makes a qualified investment
and receives a tax credit certificate from the developer of the project.

(i) "Qualified workforce housing project" means a project:

(1) for market rate residential rental properties with a minimum of three dwelling units;

(2) with an average construction cost per unit, excluding site preparation costs, of no
more than $250,000 and no less than $75,000;

(3) located on an eligible project site;

(4) that has more than 50 percent nonstate funding proposed to fund the project; and

(5) that has been designated by the commissioner as a qualified workforce housing
project.

(j) "Workforce Housing Undersupply Ratio" means the total number of full-time jobs
in the area, as defined in paragraph (d), clause (3), in which the proposed project is located,
as reported in the QCEW, divided by the total number of persons over the age of 16 who
are employed and living in that area, as reported by the United States Census
"EMPLOYMENT STATUS" data set or similar United States Census data set.

Subd. 2.

Qualified project investor tax credits.

(a) A qualified project investor is
allowed a credit against the tax imposed under chapter 290 equal to 40 percent of the qualified
investment up to a maximum of $1,000,000.

(b) The credit under this subdivision is allowed in the first taxable year in which the
qualified workforce housing project has housing units that are certified for occupancy by
the Department of Labor and Industry or a city inspector.

(c) The commissioner may issue tax credit allocations to qualified workforce housing
projects for a taxable year, up to $2,500,000, based on applications made by developers and
as provided under paragraph (d). No more than $1,000,000 in tax credit allocations may be
issued for a qualified workforce housing project. Any portion of the permitted allocation
for a taxable year that is not issued by the commissioner does not cancel and carries forward
to the following taxable year.

(d) A developer of a qualified workforce housing project may apply to the commissioner
for an allocation of tax credits under this section. The application must provide information
sufficient for the commissioner to determine:

(1) that the project meets the requirements for a qualified workforce housing project
under this section;

(2) that the developer has sufficient financing to acquire and construct the project;

(3) the financial viability of the project;

(4) the total amount of credits applied for;

(5) each of the project's investors, the amounts each has or will invest in the project, and
the amount of tax credits the developer proposes to provide to each; and

(6) any other information that the commissioner deems appropriate.

The application must be made in the form and manner specified by the commissioner.
Applications for tax credits for a taxable year must be made available by the commissioner
by November 1 of the prior calendar year. The commissioner must make every effort to
provide applications and relevant data to applicants in a simple, concise manner using plain
language, and distribute relevant eligibility information on the Department of Employment
and Economic Development Web site. In allocating the credits, the commissioner must give
preference to projects with the highest Workforce Housing Undersupply Ratio, except where
the commissioner determines the investment is circumventing the spirit of the law or where
little or no local economic growth would occur as a result of the investment. The
commissioner must approve or reject a tax credit request application within 15 days of
receiving the application. The commissioner shall provide tax credit certificates to the
applicant developer of an approved qualified workforce housing project in the amount of
the credits allocated to the project. The developer shall provide the credit certificates to its
qualified project investors in return for their investments in the projects and notify the
commissioner of the amount provided to each investor within 15 days. If the project does
not have units certified for occupancy as provided in paragraph (b) within a two-year period
following issuance of the credit certificates to the developer, the tax credit allocation for
the project is canceled. The developer must notify the commissioner immediately of the
failure to obtain a certificate of occupancy no later than five business days after the expiration
of the two-year period. The commissioner must notify the commissioner of revenue of the
credit certificates issued under this section and any cancellations of those certificates.

(e) The commissioner shall charge an application fee. Application fees are deposited in
the workforce housing tax credit administration account in the special revenue fund. Amounts
in the account are appropriated to the commissioner for the cost of administering the tax
credit under this section.

(f) The commissioner of revenue shall prescribe the manner in which the credits are
issued and claimed.

Subd. 3.

Transfer and revocation of credits.

(a) A qualified project investor who
receives a certificate may assign the certificate to another taxpayer, who is then allowed the
credit under this section and section 290.06, subdivision 37. An assignment is not valid
unless the assignee notifies the commissioner of revenue within 30 days of the date that the
assignment is made. The commissioner of revenue shall prescribe the forms necessary to
provide notification of the assignment and to claim a credit by assignment. Credits passed
through to partners, members, shareholders, or owners under section 290.06, subdivision
37, paragraph (b), are not an assignment of a credit certificate under this subdivision.

(b) If the commissioner discovers that a qualified project investor did not meet the
eligibility requirements for the tax credits under this section after the credits have been
allocated and certificates issued, the commissioner may determine that credit certificate is
revoked and must be repaid by the investor. The commissioner must notify the commissioner
of revenue of every credit revoked and subject to repayment under this section.

Subd. 4.

Reporting.

Beginning in 2019, the commissioner must annually report by
March 15 to the chairs and ranking minority members of the committees in the senate and
house of representatives with jurisdiction over taxes and economic development, in
compliance with sections 3.195 and 3.197, on tax credits issued under this section. The
report must include:

(1) information about the availability of workforce housing in greater Minnesota;

(2) information from employers and communities in greater Minnesota about whether
or not workforce housing needs are being met;

(3) which projects have been funded by the workforce housing tax credit and whether
previously funded projects have created economic growth;

(4) any suggested legislation to accelerate construction of workforce housing;

(5) the number and amount of tax credits issued;

(6) the number and amount of tax credits revoked under subdivision 3;

(7) the location, total cost of, and expected rent to be received as a result of qualified
workforce housing projects funded under this section; and

(8) any other relevant information needed to evaluate the effect of the workforce housing
tax credits.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017, and before January 1, 2019.

Sec. 2.

Minnesota Statutes 2016, 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, 2016.

Sec. 3.

Minnesota Statutes 2016, section 289A.10, subdivision 1, is amended to read:


Subdivision 1.

Return required.

(a) In the case of a decedent who has an interest in
property with a situs in Minnesota, the personal representative must submit a Minnesota
estate tax return to the commissioner, on a form prescribed by the commissioner, if:

(1) a federal estate tax return is required to be filed; or

(2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in
section 2001(b) of the Internal Revenue Code, made within three years of the date of the
decedent's death exceeds $1,200,000 for estates of decedents dying in 2014; $1,400,000 for
estates of decedents dying in 2015; $1,600,000 for estates of decedents dying in 2016;
$1,800,000 for estates of decedents dying in 2017; and $2,000,000 $2,900,000 for estates
of decedents dying in 2018 and thereafter; $3,300,000 for estates of decedents dying in
2019; $3,700,000 for estates of decedents dying in 2020; $4,100,000 for estates of decedents
dying in 2021; and $5,000,000 for estates of decedents dying in 2022
.

The return must contain a computation of the Minnesota estate tax due. The return must
be signed by the personal representative
(b) For estates of decedents dying in 2023 and
thereafter, in the case of a decedent who has an interest in property with a situs in Minnesota,
the personal representative must submit a Minnesota estate tax return to the commissioner,
on a form prescribed by the commissioner, if a federal estate tax return is required to be
filed
.

(c) The return must contain a computation of the Minnesota estate tax due. The return
must be signed by the personal representative.

EFFECTIVE DATE.

This section is effective for estates of decedents dying after
December 31, 2017.

Sec. 4.

Minnesota Statutes 2016, 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. 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 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, 2016.

Sec. 5.

Minnesota Statutes 2016, section 290.0131, subdivision 10, as amended by Laws
2017, chapter 1, section 4, is amended to read:


Subd. 10.

Section 179 expensing.

For taxable years beginning before January 1, 2018,
80 percent of the amount by which the deduction allowed under the dollar limits of section
179 of the Internal Revenue Code exceeds the deduction allowable by section 179 of the
Internal Revenue Code, as amended through December 31, 2003, is an addition.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017.

Sec. 6.

Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision
to read:


Subd. 14.

Equity and opportunity donations to qualified foundations.

The amount
of the deduction under section 170 of the Internal Revenue Code that represents contributions
to a qualified foundation under section 290.0693 is an addition.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017.

Sec. 7.

Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision
to read:


Subd. 15.

First-time home buyer savings account.

The amount for a first-time home
buyer savings account required by section 462D.06, subdivision 2, is an addition.

EFFECTIVE DATE.

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

Sec. 8.

Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:


Subd. 23.

Social Security benefits.

(a) A portion of Social Security benefits, as defined
under section 86(d)(1) of the Internal Revenue Code, is allowed as a subtraction, subject to
the limits under paragraphs (b), (c), and (d).

(b) For married taxpayers filing a joint return, the subtraction equals the lesser of Social
Security benefits or $2,500. The subtraction is reduced by two and one-half percent for
every $960 of provisional income over $76,900. In no case is the subtraction less than zero.

(c) For single or head-of-household taxpayers, the subtraction equals the lesser of Social
Security benefits or $1,955. The subtraction is reduced by two and one-half percent for
every $750 of provisional income over $60,200. In no case is the subtraction less than zero.

(d) For married taxpayers filing separate returns, the subtraction equals the lesser of
Social Security benefits or $1,250. The subtraction is reduced by two and one-half percent
for every $480 of provisional income over $38,500. In no case is the subtraction less than
zero.

(e) For purposes of this subdivision, "provisional income" has the meaning given in
section 86 of the Internal Revenue Code.

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

Paragraphs (a) to (e) are effective for taxable years beginning
after December 31, 2016. Paragraph (f) is effective for taxable years beginning after
December 31, 2017.

Sec. 9.

Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:


Subd. 24.

First-time home buyer savings account.

(a) The amount for contributions
to and earnings on a first-time home buyer savings account allowed by section 462D.06,
subdivision 1, is a subtraction.

(b) The subtraction allowed under this subdivision for a taxable year is limited to $7,500,
or $15,000 for married joint filers. For a taxpayer whose adjusted gross income, as defined
in section 62 of the Internal Revenue Code, for the taxable year exceeds $125,000, or
$250,000 for married joint filers, the maximum subtraction is reduced $1 for each $4 of
adjusted gross income in excess of that threshold.

(c) The adjusted gross income thresholds under paragraph (b) are annually adjusted for
inflation. Effective for taxable year 2018, the commissioner shall adjust the dollar amount
of the income thresholds at which the subtraction begins to be reduced under paragraph (b)
by the percentage determined under section 1(f) of the Internal Revenue Code, except that
in section 1(f)(3)(B) the word "2016" is substituted for the word "1992." For 2018, the
commissioner shall then determine the percent change from the 12 months ending on August
31, 2016, to the 12 months ending on August 31, 2017, and in each subsequent year, from
the 12 months ending on August 31, 2016, to the 12 months ending on August 31 of the
year preceding the taxable year. The determination of the commissioner under this
subdivision is not a "rule" and is not subject to the Administrative Procedure Act in chapter
14. The threshold amount as adjusted must be rounded to the nearest $100 amount. If the
amount ends in $50, the amount is rounded up to the nearest $100 amount.

EFFECTIVE DATE.

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

Sec. 10.

Minnesota Statutes 2016, section 290.0133, subdivision 12, as amended by Laws
2017, chapter 1, section 5, is amended to read:


Subd. 12.

Section 179 expensing.

For taxable years beginning before January 1, 2018,
80 percent of the amount by which the deduction allowed under the dollar limits of section
179 of the Internal Revenue Code exceeds the deduction allowable by section 179 of the
Internal Revenue Code, as amended through December 31, 2003, is an addition.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017.

Sec. 11.

Minnesota Statutes 2016, section 290.0133, is amended by adding a subdivision
to read:


Subd. 15.

Equity and opportunity donations to qualified foundations.

The amount
of the deduction under section 170 of the Internal Revenue Code that represents contributions
to a qualified foundation under section 290.0693 is an addition.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017.

Sec. 12.

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


Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

For taxable years
beginning after December 21, 2017:

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

(1) On the first $35,480 $37,970, 5.35 5.0 percent;

(2) On all over $35,480 $37,970, but not over $140,960 $134,250, 7.05 percent;

(3) On all over $140,960 $134,250, but not over $250,000 $267,550, 7.85 percent;

(4) On all over $250,000 $267,550, 9.85 percent.

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

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

(1) On the first $24,270 $25,970, 5.35 5.0 percent;

(2) On all over $24,270 $25,970, but not over $79,730 $73,970, 7.05 percent;

(3) On all over $79,730 $73,970, but not over $150,000 $160,530, 7.85 percent;

(4) On all over $150,000 $160,530, 9.85 percent.

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

(1) On the first $29,880 $31,980, 5.35 5.0 percent;

(2) On all over $29,880 $31,980, but not over $120,070 $114,510, 7.05 percent;

(3) On all over $120,070 $114,510, but not over $200,000 $214,040, 7.85 percent;

(4) On all over $200,000 $214,040, 9.85 percent.

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

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

(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by the additions required
under section 290.0131, subdivisions 2 and 6 to 11, and reduced by the Minnesota assignable
portion of the subtraction for United States government interest under section 290.0132,
subdivision 2
, and the subtractions under section 290.0132, subdivisions 9, 10, 14, 15, 17,
and 18, after applying the allocation and assignability provisions of section 290.081, clause
(a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by the amounts specified in section 290.0131,
subdivisions 2
and 6 to 11, and reduced by the amounts specified in section 290.0132,
subdivisions 2, 9, 10, 14, 15, 17, and 18.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017.

Sec. 13.

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


Subd. 2d.

Inflation adjustment of brackets.

(a) For taxable years beginning after
December 31, 2013 2018, the minimum and maximum dollar amounts for each rate bracket
for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage
determined under paragraph (b). For the purpose of making the adjustment as provided in
this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets
as they existed for taxable years beginning after December 31, 2012 2017, and before
January 1, 2014 2019. The rate applicable to any rate bracket must not be changed. The
dollar amounts setting forth the tax shall be adjusted to reflect the changes in the rate brackets.
The rate brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket
ends in $5, it must be rounded up to the nearest $10 amount.

(b) The commissioner shall adjust the rate brackets and by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B) the word "2012" "2017" shall be substituted for the word "1992." For 2014 2019,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, 2012 2017, to the 12 months ending on August 31, 2013 2018, and in each
subsequent year, from the 12 months ending on August 31, 2012 2017, to the 12 months
ending on August 31 of the year preceding the taxable year. The determination of the
commissioner pursuant to this subdivision shall not be considered a "rule" and shall not be
subject to the Administrative Procedure Act contained in chapter 14.

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

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2018.

Sec. 14.

Minnesota Statutes 2016, section 290.06, is amended by adding a subdivision to
read:


Subd. 2g.

First-time home buyer savings account.

In addition to the tax computed
under subdivision 2c, an additional amount of tax applies equal to the additional tax computed
for the taxable year for the account holder of a first-time home buyer account under section
462D.06, subdivision 3.

EFFECTIVE DATE.

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

Sec. 15.

Minnesota Statutes 2016, section 290.06, is amended by adding a subdivision to
read:


Subd. 2h.

Temporary schedule of rates for individuals, estates, and trusts.

For taxable
years beginning after December 31, 2016, and before January 1, 2018:

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

(1) On the first $37,110, 5.15 percent;

(2) On all over $37,110, but not over $138,180, 7.05 percent;

(3) On all over $138,180, but not over $261,510, 7.85 percent;

(4) On all over $261,510, 9.85 percent.

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

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

(1) On the first $25,390, 5.15 percent;

(2) On all over $25,390, but not over $77,060, 7.05 percent;

(3) On all over $77,060, but not over $156,910, 7.85 percent;

(4) On all over $156,910, 9.85 percent.

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

(1) On the first $31,260, 5.15 percent;

(2) On all over $31,260, but not over $117,790, 7.05 percent;

(3) On all over $117,790, but not over $209,210, 7.85 percent;

(4) On all over $209,210, 9.85 percent.

(d) The provisions of subdivision 2c, paragraphs (d) and (e), apply to this section.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2016, and before January 1, 2018.

Sec. 16.

Minnesota Statutes 2016, section 290.06, is amended by adding a subdivision to
read:


Subd. 37.

Workforce housing credit.

(a) A qualified project investor is allowed a credit
against the tax under this chapter equal to the amount certified by the commissioner of
employment and economic development under section 116J.5491 to the taxpayer as a
qualified project investor for the taxable year.

(b) The definitions under section 116J.5491 apply to this subdivision.

(c) Credits allowed to a partnership, a limited liability company taxed as a partnership,
S corporation, or multiple owners of property are passed through to the partners, members,
shareholders, or owners, respectively, pro rata to each based on the partner's, member's,
shareholder's, or owner's share of the entity's assets or as specially allocated in the
organizational documents or any other executed agreement, as of the last day of the taxable
year.

(d) Notwithstanding the a tax credit certificate issued by the commissioner of employment
and economic development under section 116J.5491, the commissioner may utilize any
audit and examination powers under chapter 270C or 289A to the extent necessary to verify
that the taxpayer is eligible for the credit and to assess for the amount of any improperly
claimed credit.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017, and before January 1, 2019.

Sec. 17.

Minnesota Statutes 2016, section 290.0671, subdivision 1, as amended by Laws
2017, chapter 1, section 6, 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.

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

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

(d) For individuals with two or more qualifying children, the credit equals 11 percent
of the first $18,240 of earned income. The credit is reduced by 10.82 percent of earned
income or adjusted gross income, whichever is greater, in excess of $25,130, 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 290.0132,
subdivision 10
, 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 following clauses are not
considered "earned income not subject to tax under this chapter":

(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12,
are not considered "earned income not subject to tax under this chapter."For the purposes
of this paragraph,
;

(2) 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."
; and

(3) income derived from an Indian reservation by an enrolled member of the reservation
while living on the reservation.

(g) For tax years beginning after December 31, 2013, the $8,130 in paragraph (b), the
$21,190 in paragraph (c), and the $25,130 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, 2013, 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 2014, 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,
2013, 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.

(h) 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, 2016.

Sec. 18.

Minnesota Statutes 2016, section 290.0674, is amended by adding a subdivision
to read:


Subd. 6.

Inflation adjustment.

The credit amount and the income threshold at which
the maximum credit begins to be reduced in subdivision 2 must be adjusted for inflation.
The commissioner shall adjust the credit amount and income threshold 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 "2017" shall be substituted for the word "1992." For
2019, the commissioner shall then determine the percent change from the 12 months ending
on August 31, 2017, to the 12 months ending on August 31, 2018, and in each subsequent
year, from the 12 months ending August 31, 2017, to the 12 months ending on August 31
of the year preceding the taxable year. The credit amount and income threshold 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 subject to the Administrative Procedure Act in chapter 14, including
section 14.386.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2018.

Sec. 19.

Minnesota Statutes 2016, 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:

(1) for taxpayers not subject to clause (2), the 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 paragraphs (a) and (b) shall apply; or

(2) for a taxpayer with an alternative simplified credit election in place under subdivision
2a for the taxable year, 50 percent of the average qualified research expenses for the three
taxable years preceding the taxable year for which the credit is being determined
.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017.

Sec. 20.

Minnesota Statutes 2016, section 290.068, is amended by adding a subdivision
to read:


Subd. 2a.

Alternative simplified credit election.

(a) A corporation, partnership, or other
taxpayer qualifying for a credit under this section may elect on an original return, including
all extensions, to calculate its base amount under subdivision 2, paragraph (c), clause (2),
for the taxable year. A taxpayer may revoke the election without approval of the
commissioner.

(b) For a partnership, the election must be made by the partnership on the partnership
return or other form, as required by the commissioner, and applies to all of its partners.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017.

Sec. 21.

[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 person who:

(1) holds a teaching license issued by the licensing division in the Department of
Education on behalf of 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, 2017; 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.

EFFECTIVE DATE.

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

Sec. 22.

[290.0693] EQUITY AND OPPORTUNITY IN EDUCATION TAX CREDIT.

Subdivision 1.

Definitions.

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

(b) "Eligible student" means a student who:

(1) resides in Minnesota;

(2) is a member of a household that has total annual income during the year prior to
initial receipt of a qualified scholarship or qualified transportation scholarship, without
consideration of the benefits under this program, that does not exceed an amount equal to
two times the income standard used to qualify for a reduced-price meal under the National
School Lunch Program; and

(3) meets one of the following criteria:

(i) attended a school, as defined in section 120A.22, subdivision 4, in the semester
preceding initial receipt of a qualified scholarship or qualified transportation scholarship;

(ii) is younger than age seven and not enrolled in kindergarten or first grade in the
semester preceding initial receipt of a qualified scholarship;

(iii) previously received a qualified scholarship or qualified transportation scholarship
under this section; or

(iv) lived in Minnesota for less than a year prior to initial receipt of a qualified
scholarship.

(c) "Equity and opportunity in education donation" means a donation to a qualified
foundation that awards qualified scholarships or qualified transportation scholarships.

(d) "Household" means household as used to determine eligibility under the National
School Lunch Program.

(e) "National School Lunch Program" means the program in United States Code, title
42, section 1758.

(f) "Qualified school" means a school operated in Minnesota that is a nonpublic
elementary or secondary school in Minnesota wherein a resident may legally fulfill the
state's compulsory attendance laws that is not operated for profit, and that adheres to the
provisions of United States Code, title 42, section 1981, and chapter 363A.

(g) "Qualified foundation" means a nonprofit organization granted an exemption from
the federal income tax under section 501(c)(3) of the Internal Revenue Code that has been
approved as a qualified foundation by the commissioner of revenue under subdivision 5.

(h) "Qualified scholarship" means a payment from a qualified foundation to or on behalf
of the parent or guardian of an eligible student for payment of tuition for enrollment in
grades kindergarten through 12 at a qualified school. A qualified scholarship must not
exceed an amount greater than 70 percent of the state average general education revenue
under section 126C.10, subdivision 1, per pupil unit.

(i) "Total annual income" means the income measure used to determine eligibility under
the National School Lunch Program in United States Code, title 42, section 1758.

(j) "Qualified transportation scholarship" means a payment from a qualified foundation
to or on behalf of a parent or guardian of an eligible student for payment of transportation
to a school, as defined in section 120A.22, subdivision 4. A qualified transportation
scholarship must not exceed an amount greater than 70 percent of the state average general
education revenue under section 126C.10, subdivision 1, per pupil unit.

Subd. 2.

Credit allowed.

(a) An individual or corporate taxpayer who has been issued
a credit certificate under subdivision 3 is allowed a credit against the tax due under this
chapter equal to 70 percent of the amount donated during the taxable year to the qualified
foundation designated on the taxpayer's credit certificate. No credit is allowed if the taxpayer
designates a specific child as the beneficiary of the contribution. No credit is allowed to a
taxpayer for an equity and opportunity in education donation made before the taxpayer was
issued a credit certificate as provided in subdivision 3.

(b) The maximum annual credit allowed is:

(1) $21,000 for married joint filers for a one-year donation of $30,000;

(2) $10,500 for other individual filers for a one-year donation of $15,000; and

(3) $105,000 for corporate filers for a one-year donation of $150,000.

(c) A taxpayer must provide a copy of the receipt provided by the qualified foundation
when claiming the credit for the donation if requested by the commissioner.

(d) The credit is limited to the liability for tax under this chapter, including the tax
imposed by sections 290.0921 and 290.0922.

(e) If the amount of the credit under this subdivision for any taxable year exceeds the
limitations under paragraph (d), the excess is a credit carryover to each of the five succeeding
taxable years. The entire amount of the excess unused credit for the taxable year must be
carried first to the earliest of the taxable years to which the credit may be carried. The
amount of the unused credit that may be added under this paragraph may not exceed the
taxpayer's liability for tax, less the credit for the taxable year. No credit may be carried to
a taxable year more than five years after the taxable year in which the credit was earned.

Subd. 3.

Application for credit certificate.

(a) The commissioner must make applications
for tax credits for 2018 available on the department's Web site by January 1, 2018.
Applications for subsequent years must be made available by January 1 of the taxable year.

(b) A taxpayer must apply to the commissioner for an equity and opportunity in education
tax credit certificate. The application must be in the form and manner specified by the
commissioner and must designate the qualified foundation to which the taxpayer intends
to make a donation. The commissioner must begin accepting applications for a taxable year
on January 1. The commissioner must issue tax credit certificates under this section on a
first-come, first-served basis until the maximum statewide credit amount has been reached.
The certificates must list the qualified foundation the taxpayer designated on the application.
The maximum statewide credit amount is $35,000,000 per taxable year for taxable years
beginning after December 31, 2017.

(c) The commissioner must not issue a tax credit certificate for an amount greater than
the limits in subdivision 2.

(d) The commissioner must not issue a credit certificate for an application that designates
a qualified foundation that the commissioner has barred from participation as provided in
subdivision 5.

Subd. 4.

Responsibilities of qualified foundations.

(a) A qualified foundation must:

(1) award qualified scholarships and qualified transportation scholarships to eligible
students;

(2) not restrict the availability of scholarships to students of one qualified school?

(3) not charge a fee of any kind for a child to be considered for a scholarship? and

(4) require a qualified school receiving payment of tuition through a scholarship funded
by contributions qualifying for the tax credit under this section to sign an agreement that it
will not use different admissions standards for a student with a qualified scholarship or
qualified transportation scholarship.

(b) An entity that is eligible to be a qualified foundation must apply to the commissioner
by September 15 of the year preceding the year in which it will first receive equity and
opportunity in education donations. The application must be in the form and manner
prescribed by the commissioner. The application must:

(1) demonstrate to the commissioner that the entity, if it is a nonprofit organization, has
been granted an exemption from the federal income tax as an organization described in
section 501(c)(3) of the Internal Revenue Code; and

(2) demonstrate the entity's financial accountability by submitting its most recent audited
financial statement prepared by a certified public accountant firm licensed under chapter
326A using the Statements on Auditing Standards issued by the Audit Standards Board of
the American Institute of Certified Public Accountants.

(c) A qualified foundation must provide to taxpayers who make donations or
commitments to donate a receipt or verification on a form approved by the commissioner.

(d) A qualified foundation in each year it awards qualified scholarships or qualified
transportation scholarships to eligible students to enroll in a qualified school must obtain
from the qualified school documentation that the school:

(i) complies with all health and safety laws or codes that apply to nonpublic schools;

(ii) holds a valid occupancy permit if required by its municipality;

(iii) certifies that it adheres to the provisions of chapter 363A and United States Code,
title 42, section 1981; and

(iv) provides academic accountability to parents of students in the program by regularly
reporting to the parents on the student's progress.

A qualified foundation must make the documentation available to the commissioner on
request.

(e) A qualified foundation must, by June 1 of each year following a year in which it
receives donations and awards scholarships, provide the following information to the
commissioner:

(1) financial information that demonstrates the financial viability of the qualified
foundation, if it is to receive donations of $150,000 or more during the year;

(2) documentation that it has conducted criminal background checks on all of its
employees and board members and has excluded from employment or governance any
individuals who might reasonably pose a risk to the appropriate use of contributed funds;

(3) consistent with paragraph (f), document that it has used amounts received as donations
to provide qualified scholarships within one calendar year of the calendar year in which it
received the donation;

(4) a listing of qualified schools that enrolled eligible students to whom the qualified
foundation awarded qualified scholarships; and

(5) the following information prepared by a certified public accountant regarding
donations received and scholarships awarded in the previous calendar year:

(i) the total number and total dollar amount of donations received from taxpayers;

(ii) the total number and total dollar amount of qualified scholarships and qualified
transportation scholarships awarded; and

(iii) the dollar amount of donations used for administrative expenses, as allowed by
paragraph (f).

(f) The foundation may use up to five percent of the amounts received as donations for
reasonable administrative expenses, including but not limited to fund-raising, scholarship
tracking, and reporting requirements.

Subd. 5.

Responsibilities of commissioner.

(a) The commissioner must make
applications for an entity to be approved as a qualified foundation for a taxable year available
on the department's Web site by August 1 of the year preceding the taxable year. The
commissioner must approve an application that provides the documentation required in
subdivision 4, paragraph (b), clauses (1) and (2), within 60 days of receiving the application.
The commissioner must notify a foundation that provides incomplete documentation and
the foundation may resubmit its application within 30 days.

(b) By November 15 of each year, the commissioner must post on the department's Web
site the names and addresses of qualified foundations for the next taxable year. The
commissioner must regularly update the names and addresses of any qualified foundations
that have been barred from participating in the program.

(c) The commissioner must prescribe a standardized format for a receipt to be issued by
a qualified foundation to a taxpayer to indicate the value of a donation received and of a
commitment to make a donation.

(d) The commissioner must prescribe a standardized format for qualified foundations
to report the information required under subdivision 4, paragraph (e).

(e) The commissioner may conduct either a financial review or audit of a qualified
foundation upon finding evidence of fraud or intentional misreporting. If the commissioner
determines that the qualified foundation committed fraud or intentionally misreported
information, the qualified foundation is barred from further program participation.

(f) If a qualified foundation fails to submit the documentation required under subdivision
4, paragraph (e), by June 1, the commissioner must notify the qualified foundation by July
1. A qualified foundation that fails to submit the required information by August 1 is barred
from participation for the next taxable year.

(g) If a qualified foundation fails to comply with the requirements of subdivision 4,
paragraph (e), the commissioner must by September 1 notify the qualified foundation that
it has until November 1 to document that it has remedied its noncompliance. A qualified
foundation that fails to document that it has remedied its noncompliance by November 1 is
barred from participation for the next taxable year.

(h) A qualified foundation barred under paragraph (f) or (g) may become eligible to
participate by submitting the required information in future years.

EFFECTIVE DATE.

This section is effective the day following final enactment for
donations made and credits allowed in taxable years beginning after December 31, 2017.

Sec. 23.

Minnesota Statutes 2016, section 290.081, is amended to read:


290.081 INCOME OF NONRESIDENTS, RECIPROCITY.

(a) The compensation received for the performance of personal or professional services
within this state by an individual whose residence, place of abode, and place customarily
returned to at least once a month is in another state, shall be excluded from gross income
to the extent such compensation is subject to an income tax imposed by the state of residence;
provided that such state allows a similar exclusion of compensation received by residents
of Minnesota for services performed therein.

(b) When it is deemed to be in the best interests of the people of this state, the
commissioner may determine that the provisions of paragraph (a) shall not apply. As long
as the provisions of paragraph (a) apply between Minnesota and Wisconsin, the provisions
of paragraph (a) shall apply to any individual who is domiciled in Wisconsin.

(c) For the purposes of paragraph (a), whenever the Wisconsin tax on Minnesota residents
which would have been paid Wisconsin without paragraph (a) exceeds the Minnesota tax
on Wisconsin residents which would have been paid Minnesota without paragraph (a), or
vice versa, then the state with the net revenue loss resulting from calculated under paragraph
(a) (e) shall receive from the other state the amount of such loss. This provision shall be
effective for all years beginning after December 31, 1972. The data used for computing the
loss to either state shall be determined on or before September 30 of the year following the
close of the previous calendar year.

(d) (1) Interest is payable on all amounts calculated under paragraph (c) relating to
taxable years beginning after December 31, 2000. Interest accrues from July 1 of the taxable
year
Payments for amounts calculated under paragraph (c) must equal one-quarter of the
estimated annual amount and must be paid at the midpoint of each quarter, on February 15,
May 15, August 15, and November 15
.

(2) (e)(1)The commissioner of revenue is authorized to enter into agreements with the
state of Wisconsin specifying the reciprocity payment due dates, conditions constituting
delinquency, interest rates, and a method for computing interest due.

(3) (2) For agreements entered into before October 1, 2014 2017, the annual compensation
required under paragraph (c) must equal at least the net revenue loss minus $1,000,000 up
to $3,000,000
per fiscal year.

(4) For agreements entered into after September 30, 2014, the annual compensation
required under paragraph (c) must equal the net revenue loss per fiscal year.

(5) (3) For the purposes of clauses (3) and (4) this section, "net revenue loss" means the
difference between the amount of Minnesota income taxes Minnesota forgoes by not taxing
Wisconsin residents on income subject to reciprocity and the credit Minnesota would have
been required to give under section 290.06, subdivision 22, to Minnesota residents working
in Wisconsin had there not been reciprocity.

(4) All agreements must include provisions:

(i) providing for a suspension of the agreement if one party to the agreement does not
pay in full by a time proscribed in the agreement;

(ii) setting the interest rate that will be applied, and that interest shall run from the date
the payment is due until the day the payment is made, except that interest from the
reconciliation payments runs from July 1 of the tax year until paid;

(iii) stating a time for annual reconciliation must be completed by October 31 of the
year following the tax year, and the time for payment of any amounts to be completed by
no later than December 1 of the year following the tax year;

(iv) requiring the parties to jointly conduct updated benchmark studies every five years
beginning tax year 2018;

(v) requiring each party to the agreement to require taxpayers who request exemption
from withholding in the state where they work to make an annual application and that a list
of participants will be exchanged annually; and

(vi) the sum of the amount of the quarterly payments must be a reasonable estimate of
the revenue loss as defined in item (iii).

(e) (f) If an agreement cannot be reached as to the amount of the loss, the commissioner
of revenue and the taxing official of the state of Wisconsin shall each appoint a member of
a board of arbitration and these members shall appoint the third member of the board. The
board shall select one of its members as chair. Such board may administer oaths, take
testimony, subpoena witnesses, and require their attendance, require the production of books,
papers and documents, and hold hearings at such places as are deemed necessary. The board
shall then make a determination as to the amount to be paid the other state which
determination shall be final and conclusive.

(f) (g) The commissioner may furnish copies of returns, reports, or other information to
the taxing official of the state of Wisconsin, a member of the board of arbitration, or a
consultant under joint contract with the states of Minnesota and Wisconsin for the purpose
of making a determination as to the amount to be paid the other state under the provisions
of this section. Prior to the release of any information under the provisions of this section,
the person to whom the information is to be released shall sign an agreement which provides
that the person will protect the confidentiality of the returns and information revealed thereby
to the extent that it is protected under the laws of the state of Minnesota.

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2017.

Sec. 24.

Minnesota Statutes 2016, 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 290.0131, subdivision 2; and

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

less the sum of the amounts determined under the following:

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

(2) an overpayment of state income tax as provided by section 290.0132, subdivision 3,
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 290.0132,
subdivisions 7
, 9 to 15, 17, and 21, 23, and 24; 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, 2016.

Sec. 25.

Minnesota Statutes 2016, section 291.005, subdivision 1, as amended by Laws
2017, chapter 1, section 8, 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 16, 2016.

(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, paragraph (c), 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, 2016.

Sec. 26.

Minnesota Statutes 2016, section 291.016, subdivision 3, is amended to read:


Subd. 3.

Subtraction.

(a) For estates of decedents dying in 2017, the value of qualified
small business property under section 291.03, subdivision 9, and the value of qualified farm
property under section 291.03, subdivision 10, or the result of $5,000,000 minus $1,800,000,
whichever is less, may be subtracted in computing the Minnesota taxable estate but must
not reduce the Minnesota taxable estate to less than zero.

(b) For estates of decedents dying after December 31, 2017, and before January 1, 2022,
the subtraction equals the sum of the applicable amount for the year of death under paragraphs
(c) and (d).

(c) The value of qualified small business property under section 291.03, subdivision 9,
and the value of qualified farm property under section 291.03, subdivision 10, or the result
of $5,000,000 minus the amount for the year of death listed in clauses (1) to (5), whichever
is less,
up to the amounts listed in clauses (1) to (4), may be subtracted included in computing
the Minnesota taxable estate but must not reduce the Minnesota taxable estate to less than
zero
:

(1) $1,200,000 for estates of decedents dying in 2014;

(2) $1,400,000 $2,100,000 for estates of decedents dying in 2015 2018;

(3) $1,600,000 (2) $1,700,000 for estates of decedents dying in 2016 2019;

(4) $1,800,000 (3) $1,300,000 for estates of decedents dying in 2017; and 2020

(5) $2,000,000 (4) $900,000 for estates of decedents dying in 2018 and thereafter 2021.

(d) In addition to the amounts under paragraph (b), the following amount for the year
of death listed in clauses (1) to (4) may be included in computing the Minnesota taxable
estate:

(1) $2,900,000 for estates of decedents dying in 2018;

(2) $3,300,000 for estates of decedents dying in 2019;

(3) $3,700,000 for estates of decedents dying in 2020; and

(4) $4,100,000 for estates of decedents dying in 2021.

(e) For estates of decedents dying in 2022, the subtraction equals $5,000,000.

(f) For estates of decedents dying in 2023 and thereafter, the subtraction equals the
decedent's applicable federal exclusion amount under section 2010(c)(2) of the Internal
Revenue Code, but must not reduce the Minnesota taxable estate to less than zero.

EFFECTIVE DATE.

This section is effective retroactively for estates of decedents
dying after December 31, 2016.

Sec. 27.

Minnesota Statutes 2016, section 291.03, subdivision 1, is amended to read:


Subdivision 1.

Tax amount.

The tax imposed must be computed by applying to the
Minnesota taxable estate the following schedule of rates and then the resulting amount
multiplied by a fraction, not greater than one, the numerator of which is the value of the
Minnesota gross estate plus the value of gifts under section 291.016, subdivision 2, clause
(3), with a Minnesota situs, and the denominator of which is the federal gross estate plus
the value of gifts under section 291.016, subdivision 2, clause (3):

(a) For estates of decedents dying in 2014:

Amount of Minnesota Taxable Estate
Rate of Tax
Not over $1,200,000
None
Over $1,200,000 but not over $1,400,000
nine percent of the excess over $1,200,000
Over $1,400,000 but not over $3,600,000
$18,000 plus ten percent of the excess over
$1,400,000
Over $3,600,000 but not over $4,100,000
$238,000 plus 10.4 percent of the excess over
$3,600,000
Over $4,100,000 but not over $5,100,000
$290,000 plus 11.2 percent of the excess over
$4,100,000
Over $5,100,000 but not over $6,100,000
$402,000 plus 12 percent of the excess over
$5,100,000
Over $6,100,000 but not over $7,100,000
$522,000 plus 12.8 percent of the excess over
$6,100,000
Over $7,100,000 but not over $8,100,000
$650,000 plus 13.6 percent of the excess over
$7,100,000
Over $8,100,000 but not over $9,100,000
$786,000 plus 14.4 percent of the excess over
$8,100,000
Over $9,100,000 but not over $10,100,000
$930,000 plus 15.2 percent of the excess over
$9,100,000
Over $10,100,000
$1,082,000 plus 16 percent of the excess over
$10,100,000

(b) For estates of decedents dying in 2015:

Amount of Minnesota Taxable Estate
Rate of Tax
Not over $1,400,000
None
Over $1,400,000 but not over $3,600,000
ten percent of the excess over $1,400,000
Over $3,600,000 but not over $6,100,000
$220,000 plus 12 percent of the excess over
$3,600,000
Over $6,100,000 but not over $7,100,000
$520,000 plus 12.8 percent of the excess over
$6,100,000
Over $7,100,000 but not over $8,100,000
$648,000 plus 13.6 percent of the excess over
$7,100,000
Over $8,100,000 but not over $9,100,000
$784,000 plus 14.4 percent of the excess over
$8,100,000
Over $9,100,000 but not over $10,100,000
$928,000 plus 15.2 percent of the excess over
$9,100,000
Over $10,100,000
$1,080,000 plus 16 percent of the excess over
$10,100,000

(c) For estates of decedents dying in 2016:

Amount of Minnesota Taxable Estate
Rate of Tax
Not over $1,600,000
None
Over $1,600,000 but not over $2,600,000
ten percent of the excess over $1,600,000
Over $2,600,000 but not over $6,100,000
$100,000 plus 12 percent of the excess over
$2,600,000
Over $6,100,000 but not over $7,100,000
$520,000 plus 12.8 percent of the excess over
$6,100,000
Over $7,100,000 but not over $8,100,000
$648,000 plus 13.6 percent of the excess over
$7,100,000
Over $8,100,000 but not over $9,100,000
$784,000 plus 14.4 percent of the excess over
$8,100,000
Over $9,100,000 but not over $10,100,000
$928,000 plus 15.2 percent of the excess over
$9,100,000
Over $10,100,000
$1,080,000 plus 16 percent of the excess over
$10,100,000

(d) (a) For estates of decedents dying in 2017:

Amount of Minnesota Taxable Estate
Rate of Tax
Not over $1,800,000
None
Over $1,800,000 but not over $2,100,000
ten percent of the excess over $1,800,000
Over $2,100,000 but not over $5,100,000
$30,000 plus 12 percent of the excess over
$2,100,000
Over $5,100,000 but not over $7,100,000
$390,000 plus 12.8 percent of the excess over
$5,100,000
Over $7,100,000 but not over $8,100,000
$646,000 plus 13.6 percent of the excess over
$7,100,000
Over $8,100,000 but not over $9,100,000
$782,000 plus 14.4 percent of the excess over
$8,100,000
Over $9,100,000 but not over $10,100,000
$926,000 plus 15.2 percent of the excess over
$9,100,000
Over $10,100,000
$1,078,000 plus 16 percent of the excess over
$10,100,000

(e) (b) For estates of decedents dying in 2018 and thereafter:

Amount of Minnesota Taxable Estate
Rate of Tax
Not over $2,000,000 $7,100,000
None 13 percent
Over $2,000,000 but not over $2,600,000
ten percent of the excess over $2,000,000
Over $2,600,000 but not over $7,100,000
$60,000 plus 13 percent of the excess over
$2,600,000
Over $7,100,000 but not over $8,100,000
$645,000 $923,000 plus 13.6 percent of the
excess over $7,100,000
Over $8,100,000 but not over $9,100,000
$781,000 $1,059,000 plus 14.4 percent of the
excess over $8,100,000
Over $9,100,000 but not over $10,100,000
$925,000 $1,203,000 plus 15.2 percent of the
excess over $9,100,000
Over $10,100,000
$1,077,000 $1,355,000 plus 16 percent of the
excess over $10,100,000

EFFECTIVE DATE.

This section is effective retroactively for estates of decedents
dying after December 31, 2016.

Sec. 28.

Minnesota Statutes 2016, section 291.03, subdivision 11, is amended to read:


Subd. 11.

Recapture tax.

(a) If, within three years after the decedent's death and before
the death of the qualified heir, the qualified heir disposes of any interest in the qualified
property, other than by a disposition to a family member, or a family member ceases to
satisfy the requirement under subdivision 9, clause (7); or 10, clause (5), an additional estate
tax is imposed on the property. In the case of a sole proprietor, if the qualified heir replaces
qualified small business property excluded under subdivision 9 with similar property, then
the qualified heir will not be treated as having disposed of an interest in the qualified property.

(b) The amount of the additional tax equals the amount of the exclusion claimed by the
estate under subdivision 8, paragraph (d), multiplied by 16 percent.

(c) The additional tax under this subdivision is due on the day which is six months after
the date of the disposition or cessation in paragraph (a).

(d) The tax under this subdivision does not apply to the following: acquisition of title
or possession of the qualified property by a federal, state, or local government unit, or any
other entity with the power of eminent domain for a public purpose, as defined in section
117.025, subdivision 11, within the three-year holding period.

EFFECTIVE DATE.

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

Sec. 29.

[462D.01] CITATION.

This chapter may be cited as the "First-Time Home Buyer Savings Account Act."

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 30.

[462D.02] DEFINITIONS.

Subdivision 1.

Definitions.

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

Subd. 2.

Account holder.

"Account holder" means an individual who establishes,
individually or jointly with one or more other individuals, a first-time home buyer savings
account.

Subd. 3.

Allowable closing costs.

"Allowable closing costs" means a disbursement listed
on a settlement statement for the purchase of a single-family residence in Minnesota by a
qualified beneficiary.

Subd. 4.

Commissioner.

"Commissioner" means the commissioner of revenue.

Subd. 5.

Eligible costs.

"Eligible costs" means the down payment and allowable closing
costs for the purchase of a single-family residence in Minnesota by a qualified beneficiary.
Eligible costs include paying for the cost of construction of or financing the construction
of a single-family residence.

Subd. 6.

Financial institution.

"Financial institution" means a bank, bank and trust,
trust company with banking powers, savings bank, savings association, or credit union,
organized under the laws of this state, any other state, or the United States; an industrial
loan and thrift under chapter 53 or the laws of another state and authorized to accept deposits;
or a money market mutual fund registered under the federal Investment Company Act of
1940 and regulated under rule 2a-7, promulgated by the Securities and Exchange Commission
under that act.

Subd. 7.

First-time home buyer.

"First-time home buyer" means an individual, and if
married, the individual's spouse, who has no present ownership interest in a principal
residence during the three-year period ending on the earlier of:

(1) the date of the purchase of the single-family residence funded, in part, with proceeds
from the first-time home buyer savings account; or

(2) the close of the taxable year for which a subtraction is claimed under sections
290.0132 and 462D.06.

Subd. 8.

First-time home buyer savings account.

"First-time home buyer savings
account" or "account" means an account with a financial institution that an account holder
designates as a first-time home buyer savings account, as provided in section 462D.03, to
pay or reimburse eligible costs for the purchase of a single-family residence by a qualified
beneficiary.

Subd. 9.

Internal Revenue Code.

"Internal Revenue Code" has the meaning given in
section 290.01.

Subd. 10.

Principal residence.

"Principal residence" has the meaning given in section
121 of the Internal Revenue Code.

Subd. 11.

Qualified beneficiary.

"Qualified beneficiary" means a first-time home buyer
who is a Minnesota resident and is designated as the qualified beneficiary of a first-time
home buyer savings account by the account holder.

Subd. 12.

Single-family residence.

"Single-family residence" means a single-family
residence located in this state and owned and occupied by or to be occupied by a qualified
beneficiary as the qualified beneficiary's principal residence, which may include a
manufactured home, trailer, mobile home, condominium unit, townhome, or cooperative.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 31.

[462D.03] ESTABLISHMENT OF ACCOUNTS.

Subdivision 1.

Accounts established.

An individual may open an account with a financial
institution and designate the account as a first-time home buyer savings account to be used
to pay or reimburse the designated qualified beneficiary's eligible costs.

Subd. 2.

Designation of qualified beneficiary.

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

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

Subd. 3.

Joint account holders.

An individual may jointly own a first-time home buyer
account with another person if the joint account holders file a married joint income tax
return.

Subd. 4.

Multiple accounts.

(a) An individual may be the account holder of more than
one first-time home buyer savings account, but must not hold or own multiple accounts that
designate the same qualified beneficiary.

(b) An individual may be designated as the qualified beneficiary on more than one
first-time home buyer savings account.

Subd. 5.

Contributions.

Only cash may be contributed to a first-time home buyer savings
account. Individuals other than the account holder may contribute to an account. No limitation
applies to the amount of contributions that may be made to or retained in a first-time home
buyer savings account.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 32.

[462D.04] ACCOUNT HOLDER RESPONSIBILITIES.

Subdivision 1.

Expenses; reporting.

The account holder must:

(1) not use funds in a first-time home buyer savings account to pay expenses of
administering the account, except that a service fee may be deducted from the account by
the financial institution in which the account is held; and

(2) submit to the commissioner, in the form and manner required by the commissioner:

(i) detailed information regarding the first-time home buyer savings account, including
a list of transactions for the account during the taxable year and the Form 1099 issued by
the financial institution for the account for the taxable year; and

(ii) upon withdrawal of funds from the account, a detailed account of the eligible costs
for which the account funds were expended and a statement of the amount of funds remaining
in the account, if any.

Subd. 2.

Transfers.

An account holder may withdraw funds, in whole or part, from a
first-time home buyer savings account and deposit the funds in another first-time home
buyer savings account held by a different financial institution or the same financial institution.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 33.

[462D.05] FINANCIAL INSTITUTIONS.

(a) A financial institution is not required to take any action to ensure compliance with
this chapter, including to:

(1) designate an account, designate qualified beneficiaries, or modify the financial
institution's account contracts or systems in any way;

(2) track the use of money withdrawn from a first-time home buyer savings account;

(3) allocate funds in a first-time home buyer savings account among joint account holders
or multiple qualified beneficiaries; or

(4) report any information to the commissioner or any other government that is not
otherwise required by law.

(b) A financial institution is not responsible or liable for:

(1) determining or ensuring that an account satisfies the requirements of this chapter or
that its funds are used for eligible costs; or

(2) reporting or remitting taxes or penalties related to the use of a first-time home buyer
savings account.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 34.

[462D.06] SUBTRACTION; ADDITION; ADDITIONAL TAX.

Subdivision 1.

Subtraction.

(a) An account holder is allowed a subtraction from federal
taxable income equal to the sum of:

(1) the amount the individual contributed to a first-time home buyer savings account
during the taxable year not to exceed $5,000, or $10,000 for a married couple filing a joint
return; and

(2) interest or dividends earned on the first-time home buyer savings account during the
taxable year.

(b) The subtraction under paragraph (a) is allowed each year in which a contribution is
made for the ten taxable years including and following the taxable year in which the account
was established. The total subtraction for all taxable years and for all first-time home buyer
accounts established by the individual for a qualified beneficiary is limited to $50,000. No
person other than the account holder who deposits funds in a first-time home buyer savings
account is allowed a subtraction under this section.

Subd. 2.

Addition.

(a) An account holder must add to federal taxable income the sum
of the following amounts:

(1) any amount withdrawn from a first-time home buyer savings account during the
taxable year and used neither to pay eligible costs nor for a transfer permitted under section
462D.04, subdivision 2; and

(2) any amount remaining in the first-time home buyer savings account at the close of
the tenth taxable year after the taxable year in which the account was established.

(b) For an account that received a transfer under section 462D.04, subdivision 2, the
ten-year period under paragraph (a), clause (2), ends at the close of the earliest taxable year
that applies to either account under that clause.

Subd. 3.

Additional tax.

The account holder is liable for an additional tax equal to ten
percent of the addition under subdivision 2 for the taxable year. This amount must be added
to the amount due under section 290.06. The tax under this subdivision does not apply to:

(1) a withdrawal because of the account holder's or designated qualified beneficiary's
death or disability; and

(2) a disbursement of assets of the account under federal bankruptcy law.

EFFECTIVE DATE.

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

Sec. 35. INCOME TAX RECIPROCITY BENCHMARK STUDY.

(a) The Department of Revenue, in conjunction with the Wisconsin Department of
Revenue, must, provided the conditions of paragraph (d) are satisfied, conduct a study to
determine at least the following:

(1) the number of residents of each state who earn income from personal services in the
other state;

(2) the total amount of income earned by residents of each state who earn income from
personal services in the other state; and

(3) the change in tax revenue in each state if an income tax reciprocity arrangement were
resumed between the two states under which the taxpayers were required to pay income
taxes on the income only in their state of residence.

(b) The study must use information obtained from each state's income tax returns for
tax year 2017, and from any other source of information the departments determine is
necessary to complete the study.

(c) No later than March 1, 2019, the Department of Revenue must submit a report
containing the results of the study to the governor and to the chairs and ranking minority
members of the legislative committees having jurisdiction over taxes, in compliance with
Minnesota Statutes, sections 3.195 and 3.197.

(d) The department shall conduct the study only if the commissioner of revenue receives
notice from the secretary of revenue that the Wisconsin Department of Revenue will fully
participate in the study.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 36. REPORT OF FREE ELECTRONIC FILING FOR INDIVIDUAL INCOME
TAX RETURNS.

(a) By March 16, 2018, the commissioner of revenue must provide a written report to
the chairs and ranking minority members of the legislative committees with jurisdiction
over taxes regarding free electronic filing options for individual income tax filing, including
a vendor-based solution. The report must include responses from a commissioner's request
for information to consumer-based tax filing software vendors. The request for information
may include, but is not limited to, seeking information on the following aspects of a free
electronic filing solution:

(1) costs, on a per return basis, that would be charged to the state of Minnesota to provide
an electronic individual income tax return preparation, submission, and payment remittance
process;

(2) vendor capability to provide customer service and issue resolution to taxpayers using
the software;

(3) vendor capability to provide and maintain an appropriate link between the Department
of Revenue and the Internal Revenue Service Modernized Electronic Filing Program;

(4) vendor security capabilities to ensure that taxpayer return information is maintained
and protected as required by Minnesota Statutes, chapters 13 and 270B, Internal Revenue
Service Publication 1075, and any other applicable requirements;

(5) products for the free filing and submitting of both Minnesota and federal returns
offered to customers and the thresholds for using those products; and

(6) add-on products offered to customers and their costs.

(b) The report required under paragraph (a) must comply with Minnesota Statutes,
sections 3.195 and 3.197.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 37. 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 nursing 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 at a postsecondary educational
institution.

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

(g) "Postsecondary educational institution" means a postsecondary institution eligible
for state student aid under Minnesota Statutes, 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 services 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 Minnesota Statutes, chapter 290. The credit equals a percentage of eligible loan
payments in excess of ten percent of adjusted gross income, up to $700, 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 Minnesota Statutes, 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).

EFFECTIVE DATE.

This section is effective for taxable years beginning after December
31, 2016, and before January 1, 2019.

Sec. 38. TAXPAYER ASSISTANCE GRANTS APPROPRIATION.

(a) $200,000 in fiscal year 2018 only and $200,000 in fiscal year 2019 only are
appropriated from the general fund to the commissioner of revenue for the provision of
taxpayer assistance grants under Minnesota Statutes, section 270C.21. Of the amounts
appropriated under this paragraph, up to five percent may be used for the administration of
the taxpayer assistance grants program. The unencumbered balance in the first year does
not cancel but is available for the second year.

(b) For purposes of this section, "taxpayer assistance services" means accounting and
tax preparation services provided by volunteers to low-income, elderly, and disadvantaged
Minnesota residents to help them file federal and state income tax returns and Minnesota
property tax refund claims and to provide personal representation before the Department
of Revenue and the Internal Revenue Service.

Sec. 39. REPEALER.

Minnesota Statutes 2016, sections 289A.10, subdivision 1a; 289A.12, subdivision 18;
289A.18, subdivision 3a; 289A.20, subdivision 3a; and 291.03, subdivisions 8, 9, 10, and
11,
are repealed.

EFFECTIVE DATE.

This section is effective for estates of decedents dying after
December 31, 2021.

ARTICLE 2

PROPERTY TAX

Section 1.

Minnesota Statutes 2016, section 40A.18, subdivision 2, is amended to read:


Subd. 2.

Allowed commercial and industrial operations.

(a) Commercial and industrial
operations are not allowed on land within an agricultural preserve except:

(1) small on-farm commercial or industrial operations normally associated with and
important to farming in the agricultural preserve area;

(2) storage use of existing farm buildings that does not disrupt the integrity of the
agricultural preserve; and

(3) small commercial use of existing farm buildings for trades not disruptive to the
integrity of the agricultural preserve such as a carpentry shop, small scale mechanics shop,
and similar activities that a farm operator might conduct; and

(4) wireless communication installments and related equipment and structure capable
of providing technology potentially beneficial to farming activities
.

(b) For purposes of paragraph (a), clauses (2) and (3), "existing" in clauses (2) and (3)
means existing on August 1, 1989.

EFFECTIVE DATE.

This section is effective the day following enactment.

Sec. 2.

Minnesota Statutes 2016, 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.

Minnesota Statutes 2016, section 270C.9901, is amended to read:


270C.9901 ASSESSOR ACCREDITATION; WAIVER.

Subdivision 1.

Accreditation.

Every individual who appraises or physically inspects
real property for the purpose of determining its valuation or classification for property tax
purposes must obtain licensure as an accredited Minnesota assessor from the State Board
of Assessors by July 1, 2019 2022, or within four five years of that person having become
licensed as a certified Minnesota assessor, whichever is later.

Subd. 2.

Waiver.

(a) An individual may apply to the State Board of Assessors for a
waiver from licensure as an accredited Minnesota assessor as required by subdivision 1 if
the individual:

(1) was first licensed as a certified Minnesota assessor before July 1, 2004;

(2) has maintained an assessor license in good standing since July 1, 2004;

(3) has successfully passed a comprehensive examination substantially equivalent to the
requirements by the State Board of Assessors for the accredited Minnesota assessor license
designation before May 1, 2020; and

(4) submits an application to the State Board of Assessors no later than July 1, 2022.

The examination can only be taken once to fulfill the requirements of the waiver.

(b) The commissioner of revenue, in consultation with the State Board of Assessors and
the Minnesota Association of Assessing Officers, must determine the contents of the waiver
application and the comprehensive examination.

(c) A county assessor in any jurisdiction assessed by an applicant may submit additional
information to the State Board of Assessors to be considered as part of the waiver review
proceedings.

(d) The State Board of Assessors must not grant a waiver unless the applicant has met
the requirements in paragraph (a) and has the ability to perform the duties of assessment
required in each jurisdiction in which the applicant appraises or physically inspects real
property for the purposes of determining its valuation or classification for property tax
purposes.

(e) An individual granted a waiver under this subdivision is allowed to continue
assessment duties at the individual's licensure level, provided the individual maintains
licensure in good standing and complies with the continuing education requirements for the
accredited Minnesota assessor designation as prescribed by the State Board of Assessors.

(f) An individual granted a waiver under this section:

(1) is not considered to have achieved the designation as an accredited Minnesota assessor
and may not represent himself or herself as an accredited Minnesota assessor; and

(2) is not authorized to value income-producing property as defined in section 273.11,
subdivision 13, unless the individual meets the requirements of that section.

(g) A waiver granted by the State Board of Assessors under this section remains in effect
unless the individual's licensure lapses or is revoked. If the individual's licensure lapses or
is revoked, the waiver is void and the individual is subject to the requirements of subdivision
1.

(h) A decision of the State Board of Assessors to grant or deny a waiver under this
subdivision is final and is not subject to appeal.

(i) Waivers granted under this subdivision expire on June 30, 2032.

(j) This subdivision expires July 1, 2032.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

Minnesota Statutes 2016, section 272.02, subdivision 86, is amended to read:


Subd. 86.

Apprenticeship training facilities.

All or a portion of a building used
exclusively for a state-approved apprenticeship program through the Department of Labor
and Industry is exempt if:

(1) it is owned by a nonprofit organization or a nonprofit trust, and operated by a nonprofit
organization or a nonprofit trust;

(2) the program participants receive no compensation; and

(3) it is located:

(i) in the Minneapolis and St. Paul standard metropolitan statistical area as determined
by the 2000 federal census;

(ii) in a city outside the Minneapolis and St. Paul standard metropolitan statistical area
that has a population of 7,400 or greater according to the most recent federal census; or

(iii) in a township that has a population greater than 2,000 1,400 but less than 3,000
determined by the 2000 federal census and the building was previously used by a school
and was exempt for taxes payable in 2010.

Use of the property for advanced skills training of incumbent workers does not disqualify
the property for the exemption under this subdivision. This exemption includes up to five
acres of the land on which the building is located and associated parking areas on that land,
except that if the building meets the requirements of clause (3), item (iii), then the exemption
includes up to ten acres of land on which the building is located and associated parking
areas on that land. If a parking area associated with the facility is used for the purposes of
the facility and for other purposes, a portion of the parking area shall be exempt in proportion
to the square footage of the facility used for purposes of apprenticeship training.

Sec. 5.

Minnesota Statutes 2016, section 272.02, is amended by adding a subdivision to
read:


Subd. 100.

Certain property owned by an Indian tribe.

(a) Property is exempt that:

(1) is located in a city of the first class with a population less than 100,000 as of the
2010 federal census;

(2) was on January 1, 2016, and is for the current assessment, owned by a federally
recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota;
and

(3) is used exclusively as a medical clinic.

(b) Property that qualifies for the exemption under this subdivision is limited to no more
than two contiguous parcels and structures that do not exceed, in the aggregate, 30,000
square feet. Property acquired for single-family housing, market-rate apartments, agriculture,
or forestry does not qualify for this exemption. The exemption created by this subdivision
expires with taxes payable in 2028.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2017.

Sec. 6.

Minnesota Statutes 2016, section 272.029, subdivision 2, is amended to read:


Subd. 2.

Definitions.

(a) For the purposes of this section, the term:

(1) "wind energy conversion system" has the meaning given in section 216C.06,
subdivision 19
, and also includes a substation that is used and owned by one or more wind
energy conversion facilities;

(2) "large scale wind energy conversion system" means a wind energy conversion system
of more than 12 megawatts, as measured by the nameplate capacity of the system or as
combined with other systems as provided in paragraph (b);

(3) "medium scale wind energy conversion system" means a wind energy conversion
system of over two and not more than 12 megawatts, as measured by the nameplate capacity
of the system or as combined with other systems as provided in paragraph (b); and

(4) "small scale wind energy conversion system" means a wind energy conversion system
of two megawatts and under, as measured by the nameplate capacity of the system or as
combined with other systems as provided in paragraph (b).

(b) For systems installed and contracted for after January 1, 2002, the total size of a
wind energy conversion system under this subdivision shall be determined according to this
paragraph. Unless the systems are interconnected with different distribution systems, the
nameplate capacity of one wind energy conversion system shall be combined with the
nameplate capacity of any other wind energy conversion system that is:

(1) located within five miles of the wind energy conversion system;

(2) constructed within the same calendar year as the wind energy conversion system;
and

(3) under common ownership.

In the case of a dispute, the commissioner of commerce shall determine the total size of
the system, and shall draw all reasonable inferences in favor of combining the systems.

(c) In making a determination under paragraph (b), the commissioner of commerce may
determine that two wind energy conversion systems are under common ownership when
the underlying ownership structure contains similar the same persons or entities, even if the
ownership shares differ between the two systems. Wind energy conversion systems are not
under common ownership solely because the same person or entity provided equity financing
for the systems. Wind energy conversion systems that were determined by the commissioner
of commerce to be eligible for a renewable energy production incentive under section
216C.41 are not under common ownership unless a change in the qualifying owner was
made to an owner of another wind energy conversion system subsequent to the determination
by the commissioner of commerce
.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 7.

Minnesota Statutes 2016, section 273.125, subdivision 8, is amended to read:


Subd. 8.

Manufactured homes; sectional structures.

(a) In this section, "manufactured
home" means a structure transportable in one or more sections, which is built on a permanent
chassis, and designed to be used as a dwelling with or without a permanent foundation when
connected to the required utilities, and contains the plumbing, heating, air conditioning, and
electrical systems in it. Manufactured home includes any accessory structure that is an
addition or supplement to the manufactured home and, when installed, becomes a part of
the manufactured home.

(b) Except as provided in paragraph (c), a manufactured home that meets each of the
following criteria must be valued and assessed as an improvement to real property, the
appropriate real property classification applies, and the valuation is subject to review and
the taxes payable in the manner provided for real property:

(1) the owner of the unit holds title to the land on which it is situated;

(2) the unit is affixed to the land by a permanent foundation or is installed at its location
in accordance with the Manufactured Home Building Code in sections 327.31 to 327.34,
and rules adopted under those sections, or is affixed to the land like other real property in
the taxing district; and

(3) the unit is connected to public utilities, has a well and septic tank system, or is serviced
by water and sewer facilities comparable to other real property in the taxing district.

(c) A manufactured home that meets each of the following criteria must be assessed at
the rate provided by the appropriate real property classification but must be treated as
personal property, and the valuation is subject to review and the taxes payable in the manner
provided in this section:

(1) the owner of the unit is a lessee of the land under the terms of a lease, or the unit is
located in a manufactured home park but is not the homestead of the park owner;

(2) the unit is affixed to the land by a permanent foundation or is installed at its location
in accordance with the Manufactured Home Building Code contained in sections 327.31 to
327.34, and the rules adopted under those sections, or is affixed to the land like other real
property in the taxing district; and

(3) the unit is connected to public utilities, has a well and septic tank system, or is serviced
by water and sewer facilities comparable to other real property in the taxing district.

(d) Sectional structures must be valued and assessed as an improvement to real property
if the owner of the structure holds title to the land on which it is located or is a qualifying
lessee of the land under section 273.19. In this paragraph "sectional structure" means a
building or structural unit that has been in whole or substantial part manufactured or
constructed at an off-site location to be wholly or partially assembled on site alone or with
other units and attached to a permanent foundation.

(e) The commissioner of revenue may adopt rules under the Administrative Procedure
Act to establish additional criteria for the classification of manufactured homes and sectional
structures under this subdivision.

(f) A storage shed, deck, or similar improvement constructed on property that is leased
or rented as a site for a manufactured home, sectional structure, park trailer, or travel trailer
is taxable as provided in this section. In the case of property that is leased or rented as a site
for a travel trailer, a storage shed, deck, or similar improvement on the site that is considered
personal property under this paragraph is taxable only if its total estimated market value is
over $1,000 $10,000. The property is taxable as personal property to the lessee of the site
if it is not owned by the owner of the site. The property is taxable as real estate if it is owned
by the owner of the site. As a condition of permitting the owner of the manufactured home,
sectional structure, park trailer, or travel trailer to construct improvements on the leased or
rented site, the owner of the site must obtain the permanent home address of the lessee or
user of the site. The site owner must provide the name and address to the assessor upon
request.

Sec. 8.

Minnesota Statutes 2016, section 273.13, subdivision 23, is amended to read:


Subd. 23.

Class 2.

(a) An agricultural homestead consists of class 2a agricultural land
that is homesteaded, along with any class 2b rural vacant land that is contiguous to the class
2a land under the same ownership. The market value of the house and garage and immediately
surrounding one acre of land has the same classification rates as class 1a or 1b property
under subdivision 22. The value of the remaining land including improvements up to the
first tier valuation limit of agricultural homestead property has a classification rate of 0.5
percent of market value. The remaining property over the first tier has a classification rate
of one percent of market value. For purposes of this subdivision, the "first tier valuation
limit of agricultural homestead property" and "first tier" means the limit certified under
section 273.11, subdivision 23.

(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
are agricultural land and buildings. Class 2a property has a classification rate of one percent
of market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a
property must also include any property that would otherwise be classified as 2b, but is
interspersed with class 2a property, including but not limited to sloughs, wooded wind
shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
and other similar land that is impractical for the assessor to value separately from the rest
of the property or that is unlikely to be able to be sold separately from the rest of the property.

An assessor may classify the part of a parcel described in this subdivision that is used
for agricultural purposes as class 2a and the remainder in the class appropriate to its use.

(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, that
are unplatted real estate, rural in character and not used for agricultural purposes, including
land used for growing trees for timber, lumber, and wood and wood products, that is not
improved with a structure. The presence of a minor, ancillary nonresidential structure as
defined by the commissioner of revenue does not disqualify the property from classification
under this paragraph. Any parcel of 20 acres or more improved with a structure that is not
a minor, ancillary nonresidential structure must be split-classified, and ten acres must be
assigned to the split parcel containing the structure. Class 2b property has a classification
rate of one percent of market value unless it is part of an agricultural homestead under
paragraph (a), or qualifies as class 2c under paragraph (d).

(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920
acres statewide per taxpayer that is being managed under a forest management plan that
meets the requirements of chapter 290C, but is not enrolled in the sustainable forest resource
management incentive program. It has a classification rate of .65 percent, provided that the
owner of the property must apply to the assessor in order for the property to initially qualify
for the reduced rate and provide the information required by the assessor to verify that the
property qualifies for the reduced rate. If the assessor receives the application and information
before May 1 in an assessment year, the property qualifies beginning with that assessment
year. If the assessor receives the application and information after April 30 in an assessment
year, the property may not qualify until the next assessment year. The commissioner of
natural resources must concur that the land is qualified. The commissioner of natural
resources shall annually provide county assessors verification information on a timely basis.
The presence of a minor, ancillary nonresidential structure as defined by the commissioner
of revenue does not disqualify the property from classification under this paragraph.

(e) Agricultural land as used in this section means:

(1) contiguous acreage of ten acres or more, used during the preceding year for
agricultural purposes; or

(2) contiguous acreage used during the preceding year for an intensive livestock or
poultry confinement operation, provided that land used only for pasturing or grazing does
not qualify under this clause.

"Agricultural purposes" as used in this section means the raising, cultivation, drying, or
storage of agricultural products for sale, or the storage of machinery or equipment used in
support of agricultural production by the same farm entity. For a property to be classified
as agricultural based only on the drying or storage of agricultural products, the products
being dried or stored must have been produced by the same farm entity as the entity operating
the drying or storage facility. "Agricultural purposes" also includes enrollment in the Reinvest
in Minnesota program under sections 103F.501 to 103F.535 or the federal Conservation
Reserve Program as contained in Public Law 99-198 or a similar local, state, or federal
conservation program if the property was classified as agricultural (i) under this subdivision
for taxes payable in 2003 because of its enrollment in a qualifying program and the land
remains enrolled or (ii) in the year prior to its enrollment. For purposes of this section, a
local conservation program means a program administered by a town, statutory or home
rule charter city, or county, including a watershed district, water management organization,
or soil and water conservation district, in which landowners voluntarily enroll land and
receive incentive payments in exchange for use or other restrictions placed on the land
.
Agricultural classification shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same ownership.

"Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
of, a set of contiguous tax parcels under that section that are owned by the same person.

(f) Agricultural land under this section also includes:

(1) contiguous acreage that is less than ten acres in size and exclusively used in the
preceding year for raising or cultivating agricultural products; or

(2) contiguous acreage that contains a residence and is less than 11 acres in size, if the
contiguous acreage exclusive of the house, garage, and surrounding one acre of land was
used in the preceding year for one or more of the following three uses:

(i) for an intensive grain drying or storage operation, or for intensive machinery or
equipment storage activities used to support agricultural activities on other parcels of property
operated by the same farming entity;

(ii) as a nursery, provided that only those acres used intensively to produce nursery stock
are considered agricultural land; or

(iii) for intensive market farming; for purposes of this paragraph, "market farming"
means the cultivation of one or more fruits or vegetables or production of animal or other
agricultural products for sale to local markets by the farmer or an organization with which
the farmer is affiliated.

"Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
described in section 272.193, or all of a set of contiguous tax parcels under that section that
are owned by the same person.

(g) Land shall be classified as agricultural even if all or a portion of the agricultural use
of that property is the leasing to, or use by another person for agricultural purposes.

Classification under this subdivision is not determinative for qualifying under section
273.111.

(h) The property classification under this section supersedes, for property tax purposes
only, any locally administered agricultural policies or land use restrictions that define
minimum or maximum farm acreage.

(i) The term "agricultural products" as used in this subdivision includes production for
sale of:

(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, bees,
and apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding occurs on land zoned for
agricultural use;

(3) the commercial boarding of horses, which may include related horse training and
riding instruction, if the boarding is done on property that is also used for raising pasture
to graze horses or raising or cultivating other agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for equestrian
activities, excluding racing;

(5) game birds and waterfowl bred and raised (i) on a game farm licensed under section
97A.105, provided that the annual licensing report to the Department of Natural Resources,
which must be submitted annually by March 30 to the assessor, indicates that at least 500
birds were raised or used for breeding stock on the property during the preceding year and
that the owner provides a copy of the owner's most recent schedule F; or (ii) for use on a
shooting preserve licensed under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, including short rotation woody crops, and not sold
for timber, lumber, wood, or wood products; and

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

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

(1) wholesale and retail sales;

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

(3) warehousing or storage of processed goods; and

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

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

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

(l) Class 2d airport landing area consists of a landing area or public access area of a
privately owned public use airport. It has a classification rate of one percent of market value.
To qualify for classification under this paragraph, a privately owned public use airport must
be licensed as a public airport under section 360.018. For purposes of this paragraph, "landing
area" means that part of a privately owned public use airport properly cleared, regularly
maintained, and made available to the public for use by aircraft and includes runways,
taxiways, aprons, and sites upon which are situated landing or navigational aids. A landing
area also includes land underlying both the primary surface and the approach surfaces that
comply with all of the following:

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

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

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

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

(m) Class 2e consists of land with a commercial aggregate deposit that is not actively
being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
located in a county that has elected to opt-out of the aggregate preservation program as
provided in section 273.1115, subdivision 6. It has a classification rate of one percent of
market value. To qualify for classification under this paragraph, the property must be at
least ten contiguous acres in size and the owner of the property must record with the county
recorder of the county in which the property is located an affidavit containing:

(1) a legal description of the property;

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

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

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

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

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

(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are not
rules and are exempt from the rulemaking provisions of chapter 14, and the provisions in
section 14.386 concerning exempt rules do not apply.

EFFECTIVE DATE.

This section is effective beginning with assessment year 2017.

Sec. 9.

Minnesota Statutes 2016, section 273.13, subdivision 25, is amended to read:


Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more units
and used or held for use by the owner or by the tenants or lessees of the owner as a residence
for rental periods of 30 days or more, excluding property qualifying for class 4d. Class 4a
also includes hospitals licensed under sections 144.50 to 144.56, other than hospitals exempt
under section 272.02, and contiguous property used for hospital purposes, without regard
to whether the property has been platted or subdivided. The market value of class 4a property
has a classification rate of 1.25 percent.

(b) Class 4b includes:

(1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;

(2) manufactured homes not classified under any other provision;

(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm
classified under subdivision 23, paragraph (b) containing two or three units; and

(4) unimproved property that is classified residential as determined under subdivision
33.

The market value of class 4b property has a classification rate of 1.25 percent.

(c) Class 4bb includes nonhomestead residential real estate containing one unit, other
than seasonal residential recreational property, and a single family dwelling, garage, and
surrounding one acre of property on a nonhomestead farm classified under subdivision 23,
paragraph (b).

Class 4bb property has the same classification rates as class 1a property under subdivision
22.

Property that has been classified as seasonal residential recreational property at any time
during which it has been owned by the current owner or spouse of the current owner does
not qualify for class 4bb.

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), real and personal property
devoted to commercial temporary and seasonal residential occupancy for recreation purposes,
for not more than 250 days in the year preceding the year of assessment. For purposes of
this clause, property is devoted to a commercial purpose on a specific day if any portion of
the property is used for residential occupancy, and a fee is charged for residential occupancy.
Class 4c property under this clause must contain three or more rental units. A "rental unit"
is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site
equipped with water and electrical hookups for recreational vehicles. A camping pad offered
for rent by a property that otherwise qualifies for class 4c under this clause is also class 4c
under this clause regardless of the term of the rental agreement, as long as the use of the
camping pad does not exceed 250 days. In order for a property to be classified under this
clause, either (i) the business located on the property must provide recreational activities,
at least 40 percent of the annual gross lodging receipts related to the property must be from
business conducted during 90 consecutive days, and either (A) at least 60 percent of all paid
bookings by lodging guests during the year must be for periods of at least two consecutive
nights; or (B) at least 20 percent of the annual gross receipts must be from charges for
providing recreational activities, or (ii) the business must contain 20 or fewer rental units,
and must be located in a township or a city with a population of 2,500 or less located outside
the metropolitan area, as defined under section 473.121, subdivision 2, that contains a portion
of a state trail administered by the Department of Natural Resources. For purposes of item
(i)(A), a paid booking of five or more nights shall be counted as two bookings. Class 4c
property also includes commercial use real property used exclusively for recreational
purposes in conjunction with other class 4c property classified under this clause and devoted
to temporary and seasonal residential occupancy for recreational purposes, up to a total of
two acres, provided the property is not devoted to commercial recreational use for more
than 250 days in the year preceding the year of assessment and is located within two miles
of the class 4c property with which it is used. In order for a property to qualify for
classification under this clause, the owner must submit a declaration to the assessor
designating the cabins or units occupied for 250 days or less in the year preceding the year
of assessment by January 15 of the assessment year. Those cabins or units and a proportionate
share of the land on which they are located must be designated class 4c under this clause
as otherwise provided. The remainder of the cabins or units and a proportionate share of
the land on which they are located will be designated as class 3a. The owner of property
desiring designation as class 4c property under this clause must provide guest registers or
other records demonstrating that the units for which class 4c designation is sought were not
occupied for more than 250 days in the year preceding the assessment if so requested. The
portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center
or meeting room, and (5) other nonresidential facility operated on a commercial basis not
directly related to temporary and seasonal residential occupancy for recreation purposes
does not qualify for class 4c. For the purposes of this paragraph, "recreational activities"
means renting ice fishing houses, boats and motors, snowmobiles, downhill or cross-country
ski equipment; providing marina services, launch services, or guide services; or selling bait
and fishing tackle;

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

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

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

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

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

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

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

For purposes of this clause:

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

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

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
Revenue Code; and

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

Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The
use of the property for social events open exclusively to members and their guests for periods
of less than 24 hours, when an admission is not charged nor any revenues are received by
the organization shall not be considered a revenue-producing activity.

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

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

(5)(i) manufactured home parks as defined in section 327.14, subdivision 3, excluding
manufactured home parks described in section 273.124, subdivision 3a items (ii) and (iii),
and (ii) manufactured home parks as defined in section 327.14, subdivision 3, that are
described in section 273.124, subdivision 3a, and (iii) class I manufactured home parks as
defined in section 327C.01, subdivision 13
;

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

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

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

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

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

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

(i) the land abuts a public airport; and

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

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

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

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

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

(iv) the owner is the operator of the property.

The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22;

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

(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used as
a marina, as defined in section 86A.20, subdivision 5, which is made accessible to the public
and devoted to recreational use for marina services. The marina owner must annually provide
evidence to the assessor that it provides services, including lake or river access to the public
by means of an access ramp or other facility that is either located on the property of the
marina or at a publicly owned site that abuts the property of the marina. No more than 800
feet of lakeshore may be included in this classification. Buildings used in conjunction with
a marina for marina services, including but not limited to buildings used to provide food
and beverage services, fuel, boat repairs, or the sale of bait or fishing tackle, are classified
as class 3a property; and

(12) real and personal property devoted to noncommercial temporary and seasonal
residential occupancy for recreation purposes.

Class 4c property has a classification rate of 1.5 percent of market value, except that (i)
each parcel of noncommercial seasonal residential recreational property under clause (12)
has the same classification rates as class 4bb property, (ii) manufactured home parks assessed
under clause (5), item (i), have the same classification rate as class 4b property, and the
market value of manufactured home parks assessed under clause (5), item (ii), has have a
classification rate of 0.75 percent if more than 50 percent of the lots in the park are occupied
by shareholders in the cooperative corporation or association and a classification rate of
one percent if 50 percent or less of the lots are so occupied, and class I manufactured home
parks as defined in section 327C.01, subdivision 13, have a classification rate of 1.0 percent,
(iii) commercial-use seasonal residential recreational property and marina recreational land
as described in clause (11), has a classification rate of one percent for the first $500,000 of
market value, and 1.25 percent for the remaining market value, (iv) the market value of
property described in clause (4) has a classification rate of one percent, (v) the market value
of property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent,
and (vi) that portion of the market value of property in clause (9) qualifying for class 4c
property has a classification rate of 1.25 percent.

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

(f) The first tier of market value of class 4d property has a classification rate of 0.75
percent. The remaining value of class 4d property has a classification rate of 0.25 percent.
For the purposes of this paragraph, the "first tier of market value of class 4d property" means
the market value of each housing unit up to the first tier limit. For the purposes of this
paragraph, all class 4d property value must be assigned to individual housing units. The
first tier limit is $100,000 for assessment year 2014. For subsequent years, the limit is
adjusted each year by the average statewide change in estimated market value of property
classified as class 4a and 4d under this section for the previous assessment year, excluding
valuation change due to new construction, rounded to the nearest $1,000, provided, however,
that the limit may never be less than $100,000. Beginning with assessment year 2015, the
commissioner of revenue must certify the limit for each assessment year by November 1
of the previous year.

EFFECTIVE DATE.

This section is effective for taxes payable in 2018 and thereafter.

Sec. 10.

Minnesota Statutes 2016, 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 100 percent disability rating, $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) If a veteran did not apply for or receive the exclusion under paragraph (b), clause
(2), before dying, the veteran's spouse is entitled to the benefit under paragraph (b), clause
(2), until the spouse remarries or sells, transfers, or otherwise disposes of the property if:

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

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

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

(4) the spouse complies with the annual application requirement under paragraph (h);
and

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

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

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

(l) The purpose of this provision of law providing a level of homestead property tax
relief for 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 2018.

Sec. 11.

Minnesota Statutes 2016, 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 $784,594,000 for taxes payable in 2002 2018 and thereafter. For taxes payable
in subsequent years, the 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 state general levy base amount for seasonal
residential-recreational property is $44,190,000 for taxes payable in 2018 and thereafter
.
The tax under this section is not treated as a local tax rate under section 469.177 and is not
the levy of a governmental unit under chapters 276A and 473F.

The commissioner shall increase or decrease the preliminary or final rate 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 2018.

Sec. 12.

Minnesota Statutes 2016, 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 1under
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 2018.

Sec. 13.

Minnesota Statutes 2016, 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 2018.

Sec. 14.

Minnesota Statutes 2016, 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, town,
and special taxing district, excluding the Metropolitan Council and the Metropolitan Mosquito
Control Commission,
shall certify to the county auditor the proposed property tax levy for
taxes payable in the following year. For towns, the final certified levy shall also be considered
the proposed levy
.

(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 Commission
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 2018.

Sec. 15.

Minnesota Statutes 2016, 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 30 each year. If the town board modifies the levy at a special town meeting
after September 15 30, 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
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 beginning with proposed levy
certifications for taxes payable in 2018.

Sec. 16.

Minnesota Statutes 2016, 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 2018 and
thereafter.

Sec. 17.

Minnesota Statutes 2016, section 290C.02, subdivision 6, is amended to read:


Subd. 6.

Forest land.

"Forest land" means land containing a minimum of 20 contiguous
acres for which the owner has implemented a forest management plan that was prepared or
updated within the past ten years by an approved plan writer. For purposes of this subdivision,
acres are considered to be contiguous even if they are separated by a road, waterway, railroad
track, or other similar intervening property. At least 50 percent of the contiguous acreage
must meet the definition of forest land in section 88.01, subdivision 7. For the purposes of
sections 290C.01 to 290C.11 290C.13, forest land does not include (i) land used for
residential or agricultural purposes, (ii) land enrolled in the reinvest in Minnesota program,
a state or federal conservation reserve or easement reserve program under sections 103F.501
to 103F.531, the Minnesota agricultural property tax law under section 273.111, or land
subject to agricultural land preservation controls or restrictions as defined in section 40A.02
or under the Metropolitan Agricultural Preserves Act under chapter 473H, (iii) land exceeding
60,000 acres that is subject to a single conservation easement funded under section 97A.056
or a comparable permanent easement conveyed to a governmental or nonprofit entity; (iv)
any land that becomes subject to a conservation easement funded under section 97A.056
or a comparable permanent easement conveyed to a governmental or nonprofit entity after
May 30, 2013; or (v) land improved with a structure,; pavement, other than a paved trail
under easement, lease, or terminable license to the state of Minnesota or a political
subdivision;
sewer,; campsite,; or any road, other than a township road, used for purposes
not prescribed in the forest management plan.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 18.

Minnesota Statutes 2016, section 290C.07, is amended to read:


290C.07 CALCULATION OF INCENTIVE PAYMENT.

An approved claimant under the sustainable forest incentive program is eligible to receive
an annual payment for each acre of enrolled land, excluding any acre improved with a paved
trail under easement, lease, or terminable license to the state of Minnesota or a political
subdivision
. The payment shall equal $7 per acre for each acre enrolled in the sustainable
forest incentive program.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 19.

Minnesota Statutes 2016, section 290C.10, is amended to read:


290C.10 WITHDRAWAL PROCEDURES.

(a) An approved claimant under the sustainable forest incentive program for a minimum
of four years may notify the commissioner of the intent to terminate enrollment. Within 90
days of receipt of notice to terminate enrollment, the commissioner shall inform the claimant
in writing, acknowledging receipt of this notice and indicating the effective date of
termination from the sustainable forest incentive program. Termination of enrollment in
the sustainable forest incentive program occurs on January 1 of the fifth calendar year that
begins after receipt by the commissioner of the termination notice. After the commissioner
issues an effective date of termination, a claimant wishing to continue the land's enrollment
in the sustainable forest incentive program beyond the termination date must apply for
enrollment as prescribed in section 290C.04. A claimant who withdraws a parcel of land
from this program may not reenroll the parcel for a period of three years. Within 90 days
after the termination date, the commissioner shall execute and acknowledge a document
releasing the land from the covenant required under this chapter. The document must be
mailed to the claimant and is entitled to be recorded.

(b) Notwithstanding paragraph (a), the commissioner may allow early withdrawal from
the Sustainable Forest Incentive Act without penalty when the state of Minnesota, any local
government unit, or any other entity which has the power of eminent domain acquires title
or possession to the land for a public purpose notwithstanding the provisions of this section.
In the case of such an eligible acquisition under this paragraph, the commissioner shall
execute and acknowledge a document releasing the land acquired by the state, local
government unit, or other entity from the covenant. All other enrolled land must remain in
the program.

(c) Notwithstanding paragraph (a), upon request of the claimant, the commissioner shall
allow early withdrawal from the Sustainable Forest Incentive Act without penalty for land
that is subject to fee or easement acquisition or lease to the state of Minnesota or a political
subdivision of the state for the public purpose of a paved trail. The commissioner of natural
resources must notify the commissioner of lands acquired under this paragraph that are
eligible for withdrawal. In the case of an eligible fee or easement acquisition or lease under
this paragraph, the commissioner shall execute and acknowledge a document releasing the
land subject to fee or easement acquisition or lease by the state or political subdivision of
the state.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 20.

Minnesota Statutes 2016, 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 365 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, 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, 2017.

Sec. 21.

Minnesota Statutes 2016, section 473H.17, subdivision 1a, is amended to read:


Subd. 1a.

Allowed commercial and industrial operations.

(a) Commercial and industrial
operations are not allowed on land within an agricultural preserve except:

(1) small on-farm commercial or industrial operations normally associated with and
important to farming in the agricultural preserve area;

(2) storage use of existing farm buildings that does not disrupt the integrity of the
agricultural preserve; and

(3) small commercial use of existing farm buildings for trades not disruptive to the
integrity of the agricultural preserve such as a carpentry shop, small scale mechanics shop,
and similar activities that a farm operator might conduct.; and

(4) wireless communication installments and related equipment and structure capable
of providing technology potentially beneficial to farming activities.

(b) For purposes of paragraph (a), clauses (2) and (3), "existing" in paragraph (a), clauses
(2) and (3),
means existing on August 1, 1987.

EFFECTIVE DATE.

This section is effective the day following enactment.

Sec. 22.

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 applies to taxes payable in 2018 and thereafter, and
is effective the day after the Carlton County Board of Commissioners and its chief clerical
officer timely complete their compliance with section 645.021, subdivisions 2 and 3.

Sec. 23. 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.

ARTICLE 3

SALES AND USE

Section 1.

Minnesota Statutes 2016, section 128C.24, is amended to read:


128C.24 LEAGUE FUNDS TRANSFER.

(a) Beginning July 1, 2007, the Minnesota State High School League shall annually
determine the sales tax savings attributable to section 297A.70, subdivision 11 11a, and
annually transfer that amount to a nonprofit charitable foundation created for the purpose
of promoting high school extracurricular activities. The funds must be used by the foundation
to make grants to fund, assist, recognize, or promote high school students' participation in
extracurricular activities. The first priority for funding will be grants for scholarships to
individuals to offset athletic fees. The foundation must equitably award grants based on
considerations of gender balance, school size, and geographic location, to the extent feasible.

(b) By February 1 of each year, the Minnesota State High School League must report
to the chairs and ranking minority members of the legislative committees and divisions with
jurisdiction over E-12 education on activities funded by the transfer under this section. The
report must include the following information for the previous fiscal year beginning July
1:

(1) the number of high schools receiving grants;

(2) the amount of grants made to high schools;

(3) the number of students benefiting from financial assistance to offset athletic fees;

(4) the regional breakdown of grants by school; and

(5) any other information helpful in assessing the success of the program.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017, and before July 1, 2027.

Sec. 2.

Minnesota Statutes 2016, 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; and

(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.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017.

Sec. 3.

Minnesota Statutes 2016, section 297A.61, subdivision 4, is amended to read:


Subd. 4.

Retail sale.

(a) A "retail sale" means:

(1) any sale, lease, or rental of tangible personal property for any purpose, other than
resale, sublease, or subrent of items by the purchaser in the normal course of business as
defined in subdivision 21; and

(2) any sale of a service enumerated in subdivision 3, for any purpose other than resale
by the purchaser in the normal course of business as defined in subdivision 21.

(b) A sale of property used by the owner only by leasing it to others or by holding it in
an effort to lease it, and put to no use by the owner other than resale after the lease or effort
to lease, is a sale of property for resale.

(c) A sale of master computer software that is purchased and used to make copies for
sale or lease is a sale of property for resale.

(d) A sale of building materials, supplies, and equipment to owners, contractors,
subcontractors, or builders for the erection of buildings or the alteration, repair, or
improvement of real property is a retail sale in whatever quantity sold, whether the sale is
for purposes of resale in the form of real property or otherwise.

(e) A sale of carpeting, linoleum, or similar floor covering to a person who provides for
installation of the floor covering is a retail sale and not a sale for resale since a sale of floor
covering which includes installation is a contract for the improvement of real property.

(f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
for installation of the items is a retail sale and not a sale for resale since a sale of shrubbery,
plants, sod, trees, and similar items that includes installation is a contract for the improvement
of real property.

(g) A sale of tangible personal property that is awarded as prizes is a retail sale and is
not considered a sale of property for resale.

(h) A sale of tangible personal property utilized or employed in the furnishing or
providing of services under subdivision 3, paragraph (g), clause (1), including, but not
limited to, property given as promotional items, is a retail sale and is not considered a sale
of property for resale.

(i) A sale of tangible personal property used in conducting lawful gambling under chapter
349 or the State Lottery under chapter 349A, including, but not limited to, property given
as promotional items, is a retail sale and is not considered a sale of property for resale.

(j) a sale of machines, equipment, or devices that are used to furnish, provide, or dispense
goods or services, including, but not limited to, coin-operated devices, is a retail sale and
is not considered a sale of property for resale.

(k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
payment becomes due under the terms of the agreement or the trade practices of the lessor
or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, subdivision
11
, but excluding vehicles with a manufacturer's gross vehicle weight rating greater than
10,000 pounds and rentals of vehicles for not more than 28 days, at the time the lease is
executed.

(l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
title or possession of the tangible personal property.

(m) A sale of a bundled transaction in which one or more of the products included in
the bundle is a taxable product is a retail sale, except that if one of the products is a
telecommunication service, ancillary service, Internet access, or audio or video programming
service, and the seller has maintained books and records identifying through reasonable and
verifiable standards the portions of the price that are attributable to the distinct and separately
identifiable products, then the products are not considered part of a bundled transaction.
For purposes of this paragraph:

(1) the books and records maintained by the seller must be maintained in the regular
course of business, and do not include books and records created and maintained by the
seller primarily for tax purposes;

(2) books and records maintained in the regular course of business include, but are not
limited to, financial statements, general ledgers, invoicing and billing systems and reports,
and reports for regulatory tariffs and other regulatory matters; and

(3) books and records are maintained primarily for tax purposes when the books and
records identify taxable and nontaxable portions of the price, but the seller maintains other
books and records that identify different prices attributable to the distinct products included
in the same bundled transaction.

(n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or body
shop business is a retail sale and the sales tax is imposed on the gross receipts from the retail
sale of the paint and materials. The motor vehicle repair or body shop that purchases motor
vehicle repair paint and motor vehicle repair materials for resale must either:

(1) separately state each item of paint and each item of materials, and the sales price of
each, on the invoice to the purchaser; or

(2) in order to calculate the sales price of the paint and materials, use a method which
estimates the amount and monetary value of the paint and materials used in the repair of
the motor vehicle by multiplying the number of labor hours by a rate of consideration for
the paint and materials used in the repair of the motor vehicle following industry standard
practices that fairly calculate the gross receipts from the retail sale of the motor vehicle
repair paint and motor vehicle repair materials. An industry standard practice fairly calculates
the gross receipts if the sales price of the paint and materials used or consumed in the repair
of a motor vehicle equals or exceeds the purchase price paid by the motor vehicle repair or
body shop business. Under this clause, the invoice must either separately state the "paint
and materials" as a single taxable item, or separately state "paint" as a taxable item and
"materials" as a taxable item. This clause does not apply to wholesale transactions at an
auto auction facility.

(o) A sale of specified digital products or other digital products to an end user with or
without rights of permanent use and regardless of whether rights of use are conditioned
upon payment by the purchaser is a retail sale. When a digital code has been purchased that
relates to specified digital products or other digital products, the subsequent receipt of or
access to the related specified digital products or other digital products is not a retail sale.
For purposes of this paragraph, "end user" does not include a person, including the owner
or operator of a jukebox or similar device that charges customers for access to specified
digital products or other digital products, who receives by contract a product transferred
electronically for further commercial broadcast, rebroadcast, transmission, retransmission,
licensing, relicensing, distribution, redistribution or exhibition of the product, in whole or
in part, to another person or persons.

(p) A payment made to a cooperative electric association or public utility as a contribution
in aid of construction is a contract for improvement to real property and is not a retail sale.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017.

Sec. 4.

Minnesota Statutes 2016, section 297A.61, subdivision 34, is amended to read:


Subd. 34.

Taxable food sold through vending machines.

"Taxable food sold through
vending machines" means food prepared food, soft drinks, or candy dispensed from a
machine or other device that accepts payment including honor payments.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017.

Sec. 5.

Minnesota Statutes 2016, 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 or sample room or place, storage, 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. 6.

Minnesota Statutes 2016, 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. 7.

Minnesota Statutes 2016, 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. 8.

Minnesota Statutes 2016, section 297A.66, is amended by adding a subdivision to
read:


Subd. 4b.

Collection and remittance requirements for marketplace providers and
marketplace retailers.

(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 either:

(1) the retailer 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
retailer are related as defined in subdivision 4, paragraph (b).

Sec. 9.

Minnesota Statutes 2016, section 297A.67, subdivision 2, is amended to read:


Subd. 2.

Food and food ingredients.

Except as otherwise provided in this subdivision,
food and food ingredients are exempt. For purposes of this subdivision, "food" and "food
ingredients" mean substances, whether in liquid, concentrated, solid, frozen, dried, or
dehydrated form, that are sold for ingestion or chewing by humans and are consumed for
their taste or nutritional value. Food and food ingredients exempt under this subdivision do
not include candy, soft drinks, food sold through vending machines, dietary supplements,
and prepared foods. Food and food ingredients do not include alcoholic beverages and
tobacco. For purposes of this subdivision, "alcoholic beverages" means beverages that are
suitable for human consumption and contain one-half of one percent or more of alcohol by
volume. For purposes of this subdivision, "tobacco" means cigarettes, cigars, chewing or
pipe tobacco, or any other item that contains tobacco. For purposes of this subdivision,
"dietary supplements" means any product, other than tobacco, intended to supplement the
diet that:

(1) contains one or more of the following dietary ingredients:

(i) a vitamin;

(ii) a mineral;

(iii) an herb or other botanical;

(iv) an amino acid;

(v) a dietary substance for use by humans to supplement the diet by increasing the total
dietary intake; and

(vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient
described in items (i) to (v);

(2) is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form,
or if not intended for ingestion in such form, is not represented as conventional food and is
not represented for use as a sole item of a meal or of the diet; and

(3) is required to be labeled as a dietary supplement, identifiable by the supplement facts
box found on the label and as required pursuant to Code of Federal Regulations, title 21,
section 101.36.

Sec. 10.

Minnesota Statutes 2016, section 297A.67, subdivision 4, is amended to read:


Subd. 4.

Exempt meals at residential facilities.

Prepared food, candy, and soft drinks
served to patients, inmates, or persons residing at hospitals, sanitariums, nursing homes,
senior citizen homes, and correctional, detention, and detoxification facilities are exempt.
Taxable food sold through vending machines is not exempt.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017.

Sec. 11.

Minnesota Statutes 2016, section 297A.67, subdivision 5, is amended to read:


Subd. 5.

Exempt meals at schools.

Prepared food, candy, and soft drinks served at
public and private elementary, middle, or secondary schools as defined in section 120A.05
are exempt. Prepared food, candy, and soft drinks served to students at a college, university,
or private career school under a board contract are exempt. Taxable food sold through
vending machines is not exempt.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017.

Sec. 12.

Minnesota Statutes 2016, section 297A.67, subdivision 6, is amended to read:


Subd. 6.

Other exempt meals.

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

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

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

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

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017.

Sec. 13.

Minnesota Statutes 2016, section 297A.67, is amended by adding a subdivision
to read:


Subd. 34.

Precious metal bullion and bullion coin.

(a) Precious metal bullion and
bullion coin is exempt. For purposes of this subdivision, "precious metal bullion" means
bars or rounds that consist of 99.9 percent or more by weight of either gold, silver platinum,
or palladium and are marked with weight, purity, and content. For purposes of this
subdivision, "bullion coin" means only the following coins:

(1) gold, silver, or platinum American eagle;

(2) gold American buffalo;

(3) silver Australian koala;

(4) silver Australian kookaburra;

(5) gold or silver Austrian philharmonic;

(6) gold or silver British britannia;

(7) gold British sovereign;

(8) gold, silver, platinum, or palladium Canadian maple leaf;

(9) palladium Isle of Man noble;

(10) gold or silver Chinese panda;

(11) gold or silver Mexican libertad or peso;

(12) gold South African krugerrand;

(13) gold French, Swiss, or Belgian 20 francs; and

(14) junk United States silver coins issued before 1965 that are at least 90 percent silver.

(b) The intent of this subdivision is to eliminate the difference in tax treatment between
the sale of precious metal bullion and the sale of stock, bullion ETFs, bonds, and other
investment instruments.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017.

Sec. 14.

Minnesota Statutes 2016, section 297A.70, is amended by adding a subdivision
to read:


Subd. 11a.

Minnesota State High School League tickets and admissions.

Tickets and
admissions to games, events, and activities sponsored by the Minnesota State High School
League under chapter 128C are exempt.

EFFECTIVE DATE.

This section is effective for sales and purchases made after June
30, 2017, and before July 1, 2027.

Sec. 15.

Minnesota Statutes 2016, 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; and

(6) it does not apply to fund-raising events conducted on premises leased for more than
five 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, 2017.

Sec. 16.

Minnesota Statutes 2016, section 297A.71, subdivision 44, is amended to read:


Subd. 44.

Building materials, capital projects.

(a) Materials and supplies used or
consumed in and equipment incorporated into the construction or improvement of a capital
project funded partially or wholly under section 297A.9905 are exempt, provided that the
project has a total construction cost of at least $40,000,000 within a 24-month period.

(b) Materials and supplies used or consumed in and equipment incorporated into the
construction, remodeling, expansion, or improvement of an ice arena or other buildings or
facilities owned and operated by the city of Plymouth are exempt. For purposes of this
subdivision, "facilities" include municipal streets and facilities associated with streets
including but not limited to lighting, curbs and gutters, and sidewalks. The total amount of
refund on all building materials, supplies, and equipment that the city may apply for under
this paragraph is $2,500,000.

(c) The tax on purchases exempt under this provision 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 retroactively for sales and purchases
made after January 1, 2015.

Sec. 17.

Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision
to read:


Subd. 49.

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 retroactively for sales and purchases
made after December 31, 2015, and before July 1, 2018.

Sec. 18.

Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision
to read:


Subd. 50.

Properties destroyed by fire.

(a) Building materials and supplies used in,
and equipment incorporated into, the construction or replacement of real property that is
located in Melrose affected by the fire on September 8, 2016, are exempt.

(b) For sales and purchases made after September 30, 2016, and before July 1, 2017,
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.

Paragraph (a) is effective retroactively for sales and purchases
made after September 30, 2016, and before January 1, 2019. Paragraph (b) is effective for
sales and purchases made after September 30, 2016, and before July 1, 2017.

Sec. 19.

Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision
to read:


Subd. 51.

Building materials; Major League Soccer stadium.

Materials and supplies
used or consumed in, and equipment incorporated into, the construction of a Major League
Soccer stadium and related infrastructure constructed in the city of St. Paul are exempt.
This subdivision expires one year after the date that the first Major League Soccer game is
played in the stadium.

EFFECTIVE DATE.

This section is effective for sales and purchases made after the
day following final enactment.

Sec. 20.

Minnesota Statutes 2016, 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, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivision 49; and

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

EFFECTIVE DATE.

(a) Clause (16) is effective retroactively for sales and purchases
made after December 31, 2015.

(b) Clause (17) is effective retroactively for sales and purchases made after September
30, 2016.

Sec. 21.

Minnesota Statutes 2016, 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), 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;

(9) for subdivision 1, clause (16), the applicant must be the owner or developer of the
building or project; and

(10) for subdivision 1, clause (17), the applicant must be the owner or developer of the
building or project.
.

EFFECTIVE DATE.

(a) Clause (9) is effective retroactively for sales and purchases
made after December 31, 2015.

(b) Clause (10) is effective retroactively for sales and purchases made after September
30, 2016.

Sec. 22.

Minnesota Statutes 2016, 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), (16), and (17), 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 the day following final enactment.

Sec. 23. EXEMPTION FROM JOB EXPANSION PROGRAM PROVISIONS.

(a) Notwithstanding the seven-year certification period under Minnesota Statutes, section
116J.8738, subdivision 3, the certification period for an eligible wholesale electronic
component distribution center investing a minimum of $200,000,000 and constructing a
facility at least 700,000 square feet in size is effective for the ten-year period beginning on
the first day of the calendar month immediately following the date that the commissioner
informs the business of the award of the benefit.

(b) Notwithstanding the sales tax exemption limitations under Minnesota Statutes, section
116J.8738, subdivision 4, the sales tax exemption for an eligible electronic wholesale
component distribution center investing a minimum of $200,000,000 and constructing a
facility at least 700,000 square feet in size may be authorized up to $5,000,000 annually
and up to $40,000,000 during the total period of the agreement.

Sec. 24. SEVERABILITY.

If any provision of sections 5 to 8 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. 25. EFFECTIVE DATE.

(a) The provisions of sections 5 to 8 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, 2018.

(b) Notwithstanding paragraph (a) or the provisions of sections 5 to 8, 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 5 to 8 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 4

PROPERTY TAX: AIDS AND CREDITS

Section 1.

Minnesota Statutes 2016, section 123B.53, subdivision 4, is amended to read:


Subd. 4.

Debt service equalization revenue.

(a) The debt service equalization revenue
of a district equals the sum of the first tier debt service equalization revenue and the second
tier debt service equalization revenue.

(b) The first tier debt service equalization revenue of a district equals the greater of zero
or the eligible debt service revenue minus the amount raised by a levy of 15.74 percent the
first tier initial effort rate
times the adjusted net tax capacity of the district minus the second
tier debt service equalization revenue of the district.

(c) The second tier debt service equalization revenue of a district equals the greater of
zero or the eligible debt service revenue, minus the amount raised by a levy of 26.24 percent
times the adjusted net tax capacity of the district.

(d) The first tier initial effort rate for taxes payable in 2018 is ten percent. The initial
effort rate for taxes payable in 2019 and later is 15.74 percent.

EFFECTIVE DATE.

This section is effective for taxes payable in 2018 and thereafter.

Sec. 2.

Minnesota Statutes 2016, section 123B.53, subdivision 5, is amended to read:


Subd. 5.

Equalized debt service levy.

(a) The equalized debt service levy of a district
equals the sum of the first tier equalized debt service levy and the second tier equalized debt
service levy.

(b) A district's first tier equalized debt service levy equals the district's first tier debt
service equalization revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax capacity of the district for the
year before the year the levy is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is certified; to

(2) $3,400 in fiscal year 2016, $4,430 in fiscal year 2017, and the greater of $4,430 or
55.33 percent of the initial equalizing factor in fiscal year 2018 and later, 75 percent of the
initial equalizing factor in fiscal year 2019, and 55.33 percent of the initial equalizing factor
in fiscal year 2020 and later
.

(c) A district's second tier equalized debt service levy equals the district's second tier
debt service equalization revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax capacity of the district for the
year before the year the levy is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is certified; to

(2) $8,000 in fiscal years 2016 and 2017, and the greater of $8,000 or 100 percent of
the initial equalizing factor in fiscal year 2018 and later.

(d) For the purposes of this subdivision, the initial equalizing factor equals the quotient
derived by dividing the total adjusted net tax capacity of all school districts in the state for
the year before the year the levy is certified by the total number of adjusted pupil units in
all school districts in the state in the year before the year the levy is certified.

EFFECTIVE DATE.

This section is effective for taxes payable in 2018 and thereafter.

Sec. 3.

Minnesota Statutes 2016, section 127A.45, subdivision 10, is amended to read:


Subd. 10.

Payments to school nonoperating funds.

Each fiscal year state general fund
payments for a district nonoperating fund must be made at the current year aid payment
percentage of the estimated entitlement during the fiscal year of the entitlement. This amount
shall be paid in 12 six equal monthly installments beginning in July. The amount of the
actual entitlement, after adjustment for actual data, minus the payments made during the
fiscal year of the entitlement must be paid prior to October 31 of the following school year.
The commissioner may make advance payments of debt service equalization aid and
state-paid tax credits for a district's debt service fund earlier than would occur under the
preceding schedule if the district submits evidence showing a serious cash flow problem in
the fund. The commissioner may make earlier payments during the year and, if necessary,
increase the percent of the entitlement paid to reduce the cash flow problem.

EFFECTIVE DATE.

This section is effective beginning with fiscal year 2019.

Sec. 4.

Minnesota Statutes 2016, section 127A.45, subdivision 13, is amended to read:


Subd. 13.

Aid payment percentage.

Except as provided in subdivisions 10, 11, 12, 12a,
and 14, each fiscal year, all education aids and credits in this chapter and chapters 120A,
120B, 121A, 122A, 123A, 123B, 124D, 124E, 125A, 125B, 126C, 134, and section 273.1392,
shall be paid at the current year aid payment percentage of the estimated entitlement during
the fiscal year of the entitlement. For the purposes of this subdivision, a district's estimated
entitlement for special education aid under section 125A.76 for fiscal year 2014 and later
equals 97.4 percent of the district's entitlement for the current fiscal year. The final adjustment
payment, according to subdivision 9, must be the amount of the actual entitlement, after
adjustment for actual data, minus the payments made during the fiscal year of the entitlement.

EFFECTIVE DATE.

This section is effective beginning with fiscal year 2019.

Sec. 5.

[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 2018.

Sec. 6.

Minnesota Statutes 2016, 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, 10, and 13.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2018.

Sec. 7.

Minnesota Statutes 2016, 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 2018.

Sec. 8.

Minnesota Statutes 2016, 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 2018.

Sec. 9.

Minnesota Statutes 2016, 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 2018.

Sec. 10.

Minnesota Statutes 2016, 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 2018.

Sec. 11.

Minnesota Statutes 2016, 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 2018.

Sec. 12.

Minnesota Statutes 2016, section 477A.011, subdivision 34, is amended to read:


Subd. 34.

City revenue need.

(a) For a city with a population equal to or greater than
10,000, "city revenue need" is 1.15 times the sum of (1) 4.59 times the pre-1940 housing
percentage; plus (2) 0.622 times the percent of housing built between 1940 and 1970; plus
(3) 169.415 times the jobs per capita; plus (4) the sparsity adjustment; plus (5) 307.664.

(b) For a city with a population equal to or greater than 2,500 and less than 10,000, "city
revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940 housing
percentage; minus (3) 53.768 times household size; plus (4) 14.022 times peak population
decline.

(c) For a city with a population less than 2,500, "city revenue need" is the sum of 410
plus 0.367 times the city's population over 100. The city revenue need under this paragraph
shall not exceed 630.

(d) For a city with a population of at least 2,500 but less than 3,000, the "city revenue
need" equals (1) the transition factor times the city's revenue need calculated in paragraph
(b); plus (2) 630 times the difference between one and the transition factor. For a city with
a population of at least 10,000 but less than 10,500 11,000, the "city revenue need" equals
(1) the transition factor times the city's revenue need calculated in paragraph (a); plus (2)
the city's revenue need calculated under the formula in paragraph (b) times the difference
between one and the transition factor. For purposes of the first sentence of this paragraph,
"transition factor" is 0.2 percent times the amount that the city's population exceeds the
minimum threshold in either of the first two sentences. For purposes of the second sentence
of this paragraph, "transition factor" is 0.1 percent times the amount that the city's population
exceeds the minimum threshold.

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

(f) For calendar year 2015 and subsequent years, the city revenue need for a city, as
determined in paragraphs (a) to (e), is multiplied by the ratio of the annual implicit price
deflator for government consumption expenditures and gross investment for state and local
governments as prepared by the United States Department of Commerce, for the most
recently available year to the 2013 implicit price deflator for state and local government
purchases.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2018
and thereafter.

Sec. 13.

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

Subdivision 1.

Definition.

For purposes of 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 chapter 260C and the Indian Child Welfare Act (ICWA), 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 July 1, 2017, each county
shall report the following information to the commissioners of human services and
corrections: (1) the separate amounts paid out of the county's 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. The commissioner of human services shall prescribe the format of the
report. By July 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 with jurisdiction over local government aids and out-of-home
placement funding whether the data reported under this subdivision accurately reflect total
expenditures by counties for out-of-home placement costs of children under the ICWA.

(b) By January 1, 2018, and each January 1 thereafter, each county shall report to the
commissioners of human services and corrections the separate amounts paid out of the
county's 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. The
commissioner of human services shall prescribe the format of the report.

(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 and the amount of any federal reimbursement received by a tribe under the
ICWA for the three prior calendar years to the commissioner of revenue by June 1 of the
year before the aid payment.

Subd. 3.

Aid for counties.

For aids payable in calendar year 2018 and thereafter, the
amount of reimbursement to each county is a county's proportionate share of the appropriation
in subdivision 6 that remains after the aid for tribes has been paid. Each county's
proportionate share is based on the county's average nonfederal share of the cost for
out-of-home placement of children under the ICWA for the three calendar years that were
certified by the commissioner of human services by June 1 of the prior year, provided that
the commissioner of human services, in consultation with the commissioner of corrections,
certifies to the commissioner of revenue that accurate data are available to make the aid
determination under this section. For aids payable in calendar year 2018, each county's
proportionate share is based on the county's nonfederal share of the cost for out-of-home
placement of children under the ICWA that was certified by the commissioner of human
services by July 15, 2017.

Subd. 4.

Aid for tribes.

For aids payable in 2018 and thereafter, the amount of
reimbursement to each 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 three calendar years that were certified by June 1 of the prior year, or (2)
$200,000.

Subd. 5.

Payments.

The commissioner of revenue must compute the amount of the
reimbursement aid payable to each county and tribe under this section. On or before August
1 of each year, the commissioner shall certify the amount to be paid to each county and
tribe in the following year. The commissioner shall pay reimbursement aid annually at the
times provided in section 477A.015.

Subd. 6.

Appropriation.

$2,000,000 is annually appropriated to the commissioner of
revenue from the general fund to pay aid under this section.

EFFECTIVE DATE.

This section is effective beginning with aids payable in 2018.

Sec. 14.

Minnesota Statutes 2016, section 477A.013, subdivision 8, is amended to read:


Subd. 8.

City formula aid.

(a) For aids payable in 2015 2018 and thereafter, the formula
aid for a city is equal to the sum of (1) its formula aid in the previous year and (2) the product
of (i) (1) the difference between its unmet need and its formula certified aid in the previous
year and before any aid adjustment under subdivision 13, and (ii) (2) the aid gap percentage.

(b) For aids payable in 2015 and thereafter, if a city's certified aid from the previous
year is greater than the sum of its unmet need plus its aid adjustment under subdivision 13,
its formula aid is adjusted to equal its unmet need.

(c) No city may have a formula aid amount less than zero. The aid gap percentage must
be the same for all cities subject to paragraph (a).

(d) (b) The applicable aid gap percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03. The aid gap percentage must be the same for all cities subject
to paragraph (a).
Data used in calculating aids to cities under sections 477A.011 to 477A.013
shall be the most recently available data as of January 1 in the year in which the aid is
calculated.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2018
and thereafter.

Sec. 15.

Minnesota Statutes 2016, section 477A.013, subdivision 9, is amended to read:


Subd. 9.

City aid distribution.

(a) In calendar year 2014 2018 and thereafter, each city
if a city's certified aid before any aid adjustment under subdivision 13 for the previous year
is less than its current unmet need, the city
shall receive an aid distribution equal to the sum
of (1) its certified aid in the previous year before any aid adjustment under subdivision 13,
(2)
the city formula aid under subdivision 8, and (2) (3) its aid adjustment under subdivision
13.

(b) For aids payable in 2015 2018 and thereafter, if a city's certified aid before any aid
adjustment under subdivision 13 for the previous year is equal to or greater than its current
unmet need,
the total aid for a city must not be less than is equal to the greater of (1) its
unmet need plus any aid adjustment under subdivision 13, or (2)
the amount it was certified
to receive in the previous year minus the lesser of $10 multiplied by its population, or five
percent of its net levy in the year prior to the aid distribution. No city may have a total aid
amount less than $0.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2018
and thereafter.

Sec. 16.

Minnesota Statutes 2016, 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 2017, the
total aid paid under section 477A.013, subdivision 9, is $519,398,012. For aids payable in
2018, the total aid paid under section 477A.013, subdivision 9, is $531,398,012. For aids
payable in 2019 and thereafter, the total aid paid under section 477A.013, subdivision 9, is
$519,398,012
.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2018
and thereafter.

Sec. 17.

Minnesota Statutes 2016, section 477A.03, subdivision 2b, is amended to read:


Subd. 2b.

Counties.

(a) For aids payable in 2014 and thereafter through 2017, the total
aid payable under section 477A.0124, subdivision 3, is $100,795,000. For aids payable in
2018, the total aid payable under section 477A.0124, subdivision 3, is $106,795,000, of
which $3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4,
section 6. For aids payable in 2019 through 2024, the total aid payable under section
477A.0124, subdivision 3, is $103,795,000 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 $100,795,000.
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 2017, the total aid under section 477A.0124,
subdivision 4
, is $104,909,575. For aids payable in 2018, the total aid payable under section
477A.0124, subdivision 4, is $107,909,575. For aids payable in 2019 and thereafter, the
total aid payable under section 477A.0124, subdivision 4, is $104,909,575.
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 2018 and thereafter.

Sec. 18.

Minnesota Statutes 2016, section 477A.12, subdivision 1, is amended to read:


Subdivision 1.

Types of land; payments.

The following amounts are annually
appropriated to the commissioner of natural resources from the general fund for transfer to
the commissioner of revenue. The commissioner of revenue shall pay the transferred funds
to counties as required by sections 477A.11 to 477A.14. The amounts, based on the acreage
as of July 1 of each year prior to the payment year, are:

(1) $5.133 multiplied by the total number of acres of acquired natural resources land or,
at the county's option three-fourths of one percent of the appraised value of all acquired
natural resources land in the county, whichever is greater;

(2) $5.133, multiplied by the total number of acres of transportation wetland or, at the
county's option, three-fourths of one percent of the appraised value of all transportation
wetland in the county, whichever is greater;

(3) $5.133, multiplied by the total number of acres of wildlife management land, or, at
the county's option, three-fourths of one percent of the appraised value of all wildlife
management land in the county, whichever is greater;

(4) 50 percent of the dollar amount as determined under clause (1), multiplied by the
number of acres of military refuge land in the county;

(5) $1.50 $2, multiplied by the number of acres of county-administered other natural
resources land in the county;

(6) $5.133, multiplied by the total number of acres of land utilization project land in the
county;

(7) $1.50 $2, multiplied by the number of acres of commissioner-administered other
natural resources land in the county; and

(8) without regard to acreage, and notwithstanding the rules adopted under section
84A.55, $300,000 for local assessments under section 84A.55, subdivision 9, that shall be
divided and distributed to the counties containing state-owned lands within a conservation
area in proportion to each county's percentage of the total annual ditch assessments.

EFFECTIVE DATE.

This section is effective for payments made in calendar year 2018
and later.

Sec. 19.

Minnesota Statutes 2016, section 477A.17, is amended to read:


477A.17 LAKE VERMILION-SOUDAN UNDERGROUND MINE STATE PARK;
ANNUAL PAYMENTS.

(a) In lieu of the payment amount provided under section 477A.12, subdivision 1, clause
(1), the county shall receive an annual payment for state-owned land within the boundary
of Lake Vermilion-Soudan Underground Mine State Park, established in section 85.012,
subdivision 38a, equal to 1.5 percent of the appraised value of the state-owned land.

(b) For the purposes of this section, the appraised value of the land acquired for Lake
Vermilion-Soudan Underground Mine State Park for the first five years after acquisition
shall be the purchase price of the land, plus the value of any portion of the land that is
acquired by donation. Thereafter, the appraised value of the state-owned land shall be as
determined under section 477A.12, subdivision 3, except that the appraised value of the
state-owned land within the park shall not be reduced below the 2010 appraised value of
the land
.

(c) The annual payments under this section shall be distributed to the taxing jurisdictions
containing the property as follows: one-third to the school districts; one-third to the town;
and one-third to the county. The payment to school districts is not a county apportionment
under section 127A.34 and is not subject to aid recapture. Each of those taxing jurisdictions
may use the payments for their general purposes.

(d) Except as provided in this section, the payments shall be made as provided in sections
477A.11 to 477A.13.

EFFECTIVE DATE.

This section is effective beginning with aids payable in 2017.

Sec. 20. 2014 AID PENALTY FORGIVENESS.

(a) Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the cities of
Dundee, Jeffers, and Woodstock shall receive all of their 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 July 20,
2017. Up to $101,570 in fiscal year 2018 is appropriated from the general fund to the
commissioner of revenue to make the payments under this section.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 21. BASE YEAR FORMULA AID FOR NEWLY INCORPORATED CITY.

For a city that incorporated on October 13, 2015, and first qualifies for aid under
Minnesota Statutes, section 477A.013, subdivisions 8 and 9, in 2017, the city's formula aid
for 2016, used in calculating aid payable in 2017, shall be deemed to equal $115 multiplied
by its population.

EFFECTIVE DATE.

This section is effective for aids payable in 2017. The 2017 aid
payment under section 477A.013, subdivision 9, for a city that qualifies under this section
shall be recalculated based on this section. The increase shall be treated as an aid correction
under Minnesota Statutes, section 477A.014, subdivision 3.

Sec. 22. 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 2018 to make this payment.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 23. APPROPRIATION; DEBT SERVICE EQUALIZATION AID.

For fiscal year 2019 only, $14,182,000 is appropriated from the general fund to the
Department of Education for debt service aid under Minnesota Statutes, section 123B.53.
This amount is in addition to other appropriations for the same purpose.

Sec. 24. APPROPRIATION; FIRE REMEDIATION GRANTS.

$1,392,258 is appropriated in fiscal year 2018 from the general fund to the commissioner
of public safety for grants to remediate the effects of fires in the city of Melrose on September
8, 2016. The commissioner must allocate the grants as follows:

(1) $1,296,458 to the city of Melrose; and

(2) $95,800 to Stearns County.

A grant recipient must use the money appropriated under this section for remediation
costs, including disaster recovery, infrastructure, reimbursement for emergency personnel
costs, reimbursement for equipment costs, and reimbursements for property tax abatements,
incurred by public or private entities as a result of the fires. This is a onetime appropriation
and is available until June 30, 2018.

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 5

LOCAL OPTION SALES AND SPECIAL TAXES

Section 1.

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. 2.

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. 3.

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 as approved
by voters at the November 4, 2016, 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. 4.

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 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. 5.

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 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. 6.

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 meet the costs
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.

(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) As approved by the voters at the November 8, 2016, general election, the proceeds
under this section may also be used to meet the costs of debt service payments for
construction of the Hermantown Wellness Center.

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. 7.

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
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
. 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. 8.

Laws 1999, chapter 243, article 4, section 17, subdivision 3, is amended to read:


Subd. 3.

Use of revenues.

(a) Revenues received from taxes authorized by subdivisions
1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for
construction and improvement of a civic and community center and recreational facilities
to serve all ages, including seniors and youth. Authorized expenses include, but are not
limited to, acquiring property, paying construction and operating expenses related to the
development of an authorized facility, funding facilities replacement reserves, and paying
debt service on bonds or other obligations issued to finance the construction or expansion
of an authorized facility. The capital expenses for all projects authorized under this
subdivision that may be paid with these taxes are limited to $9,000,000, plus an amount
equal to the costs related to issuance of the bonds and funding facilities replacement reserves.

(b) Notwithstanding Minnesota Statutes, section 297A.99, subdivision 3, and as approved
by the voters at the November 8, 2016, general election, the city of New Ulm may by
ordinance also use revenues from taxes authorized under subdivisions 1 and 2, up to a
maximum of $14,800,000, plus associated bond costs, to pay all or a portion of the expenses
of the following capital projects:

(1) constructing an indoor water park and making safety improvements to the existing
recreational center pool;

(2) constructing an indoor playground, a wellness center, and a gymnastics facility;

(3) constructing a winter multipurpose dome;

(4) making improvements to Johnson Park Grandstand; and

(5) making improvements to the entrance road and parking at Hermann Heights Park.

EFFECTIVE DATE.

This section is effective the day after the governing body of the
city of New Ulm and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

Sec. 9.

Laws 1999, chapter 243, article 4, section 17, is amended by adding a subdivision
to read:


Subd. 4a.

Bonding authority; additional use and extension of tax.

As approved by
the voters at the November 8, 2016, general election, and in addition to the bonds issued
under subdivision 4, the city of New Ulm may issue general obligation bonds of the city in
an amount not to exceed $14,800,000 for the projects listed in subdivision 3, paragraph (b).
The debt represented by bonds under this subdivision shall not be included in computing
any debt limitations applicable to the city of New Ulm, 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.

EFFECTIVE DATE.

This section is effective the day after the governing body of the
city of New Ulm and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

Sec. 10.

Laws 1999, chapter 243, article 4, section 17, subdivision 5, is amended to read:


Subd. 5.

Termination of taxes.

The taxes imposed under subdivisions 1 and 2 expire
when the city council determines that sufficient funds have been received from the taxes to
finance the capital and administrative costs for the acquisition, construction, and improvement
of facilities described in subdivision 3, including the additional use of revenues under
subdivision 3, paragraph (b), as approved by the voters at the November 8, 2016, general
election
, and to prepay or retire at maturity the principal, interest, and premium due on any
bonds issued for the facilities under subdivision 4 subdivisions 4 and 4a. Any funds remaining
after completion of the project and retirement or redemption of the bonds may be placed in
the general fund of the city. The taxes imposed under subdivisions 1 and 2 may expire at
an earlier time if the city so determines by ordinance.

EFFECTIVE DATE.

This section is effective the day after the governing body of the
city of New Ulm and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

Sec. 11.

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 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.

Sec. 12.

Laws 2005, First Special Session chapter 3, article 5, section 38, subdivision 2,
as amended by Laws 2006, chapter 259, article 3, section 6, is amended to read:


Subd. 2.

Use of revenues.

The proceeds of the tax imposed under this section shall be
used to pay for lake water quality improvement projects as detailed in the Shell Rock River
watershed plan and as directed by the Shell Rock River Watershed Board. Notwithstanding
any provision of statute, other law, or city charter to the contrary, the city shall transfer all
revenues from the tax imposed under subdivision 1, as soon as they are received, to the
Shell Rock River Watershed District. The city is not required to review the intended uses
of the revenues by the watershed district, nor is the watershed district required to submit to
the city proposed budgets, statements, or invoices explaining the intended uses of the
revenues as a prerequisite for the transfer of the revenues
. The Shell Rock River Watershed
District shall appear before the city of Albert Lea City Council on a biannual basis to present
a report of its activities, expenditures, and intended uses of the city sales tax revenue
.

EFFECTIVE DATE.

This section is effective the day after the chief clerical officer
and the governing body of the city of Albert Lea comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

Sec. 13.

Laws 2005, First Special Session chapter 3, article 5, section 38, subdivision 4,
as amended by Laws 2014, chapter 308, article 3, section 23, is amended to read:


Subd. 4.

Termination of taxes.

The taxes imposed under this section expire at the earlier
of (1) 15 30 years after the taxes are first imposed, or (2) when the city council first
determines that the amount of revenues raised to pay for the projects under subdivision 2,
shall meet or exceed the sum of $15,000,000 $30,000,000. Any funds remaining after
completion of the projects may be placed in the general fund of the city.

EFFECTIVE DATE.

This section is effective the day after the chief clerical officer
and the governing body of the city of Albert Lea comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

Sec. 14.

Laws 2005, First Special Session chapter 3, article 5, section 44, subdivision 3,
as amended by Laws 2014, chapter 308, article 7, section 3, is amended to read:


Subd. 3.

Use of revenues.

(a) Revenues received from taxes authorized by subdivisions
1 and 2 must be used by the city (1) to pay the cost of collecting and administering the taxes
and; (2) to pay for the costs of a community center complex and; (3) to make renovations
to the Memorial Auditorium; and (4) to construct public athletic facilities, provided that
this use of the tax is subject to the same restrictions that apply to the issuance of debt provided
in subdivision 4, paragraph (c)
. Authorized expenses include, but are not limited to, acquiring
property and paying construction expenses related to these improvements, and paying debt
service on bonds or other obligations issued to finance acquisition and construction of these
improvements.

(b) Notwithstanding Minnesota Statutes, section 297A.99, subdivisions 2 and 3, if the
city decides to extend the taxes in subdivisions 1 and 2, as allowed under subdivision 5,
paragraph (b), the city must use any amounts in excess of the amounts necessary to meet
the obligations under paragraph (a) to pay the city's share of debt service on bonds issued
under Minnesota Statutes, section 469.194, to fund the Lewis and Clark Regional Water
System Project.

EFFECTIVE DATE.

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

Sec. 15.

Laws 2005, First Special Session chapter 3, article 5, section 44, subdivision 4,
is amended to read:


Subd. 4.

Bonding authority.

(a) If the tax authorized under subdivision 1 is approved
by the voters, the city may issue bonds under Minnesota Statutes, chapter 475, to pay capital
and administrative expenses for the improvements described in subdivision 3 in an amount
that does not exceed $6,000,000
. An election to approve the bonds under Minnesota Statutes,
section 475.58, is not required.

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

(c) If the Worthington City Council intends to issue debt after June 30, 2017, for the
purposes of this subdivision, it must pass a resolution stating the intent to issue debt and
proposing a public hearing. The resolution must be published for two successive weeks in
the official newspaper of the city together with a notice setting a date for the public hearing.
The hearing must be held at least two weeks, but not more than four weeks, after the first
publication after passage of the resolution. Following the public hearing, if the city adopts
a resolution confirming its intention to issue additional debt, that resolution must also be
published in the official newspaper of the city, but the resolution is not effective for 30 days.
If within 30 days after publication of the resolution confirming the city's intention to issue
additional debt 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 in a general or special election and a majority of the 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.

EFFECTIVE DATE.

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

Sec. 16.

Laws 2005, First Special Session chapter 3, article 5, section 44, subdivision 5,
as amended by Laws 2014, chapter 308, article 7, section 4, is amended to read:


Subd. 5.

Termination of taxes.

(a) The taxes imposed under subdivisions 1 and 2 expire
at the earlier of (1) ten years, or (2) when the city council determines that the amount of
revenue received from the taxes is sufficient to pay for the projects under subdivision 3
equals or exceeds $6,000,000 plus the additional amount needed to pay the costs related to
issuance of bonds under subdivision 4, including interest on the bonds. Any funds remaining
after completion of the project and retirement or redemption of the bonds shall be placed
in a capital project fund of the city. The taxes imposed under subdivisions 1 and 2 may
expire at an earlier time if the city so determines by ordinance.

(b) Notwithstanding paragraph (a), the city council may, by ordinance, extend the taxes
imposed under subdivisions 1 and 2 through December 31, 2039, provided that all additional
revenues that exceed those necessary to fund the projects and associated financing costs
listed in subdivision 3, paragraph (a), are committed to pay debt service on bonds issued
under Minnesota Statutes, section 469.194, to fund the Lewis and Clark Regional Water
System Project.

EFFECTIVE DATE.

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

Sec. 17.

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.

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 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 $21,000,000 plus any 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 $15,000,000 in bonds, plus
associated bond costs, to fund the projects in subdivision 2 as approved by the voters at the
November 8, 2016, 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, 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, pursuant to approval of the voters at the November 8,
2016, referendum extending the tax fee to provide 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 $15,000,000. A separate election to approve the bonds under Minnesota Statutes,
section 475.58, is not required.

(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 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
at the earlier of December 31, 2038, or when revenues from the taxes first
equal or exceed $21,000,000 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. 18. 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. 19. CITY OF EXCELSIOR; 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, the city of Excelsior may impose, by ordinance, a sales and use tax of up to one-half
of one percent for the purposes specified in subdivision 2, as approved by the voters at the
November 4, 2014, general election. 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 Excelsior to pay the costs of collecting and
administering the tax and to finance the capital and administrative costs of improvements
to the commons as indicated in the November 2016 findings of the commons master planning
work group. Authorized expenses include, but are not limited to, improvements for
walkability and accessibility, enhancement of beach area and facilities, prevention and
management of shoreline erosion, redesign of the port and bandshell, improvement of
playground equipment, and securing and paying debt service on bonds issued under
subdivision 3 or other obligations issued to the improvements listed in this subdivision in
the city of Excelsior.

Subd. 3.

Bonding authority.

(a) The city of Excelsior may issue bonds under Minnesota
Statutes, chapter 475, to finance all or a portion of the costs of the projects authorized in
subdivision 2. The aggregate principal amount of bonds issued under this subdivision may
not exceed $7,000,000, 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
Excelsior, 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 Excelsior, 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) 25 years after the tax is first imposed; or (2) when the city council determines that
$7,000,000 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 Excelsior with Minnesota Statutes, section 645.021, subdivisions 2 and
3.

Sec. 20. CITY OF FAIRMONT; LOCAL TAX 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 the general election of November 8, 2016, the city
of Fairmont may impose, by ordinance, a sales and use tax of one-half of one percent for
the purposes specified in subdivision 2. Except as otherwise provided in this section, the
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.

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 Fairmont to pay the costs of collecting and
administering the tax and to finance the capital and administrative costs of constructing and
funding recreational amenities, trails, and a community center. The total that may be raised
from the tax to pay for these projects is limited to $15,000,000, plus the costs related to the
issuance and paying debt service on bonds for these projects.

Subd. 3.

Bonding authority.

(a) The city of Fairmont 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 $15,000,000, 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
Fairmont, 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 Fairmont, 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
earlier of: (1) 25 years after the tax is first imposed; or (2) when the city council determines
that $15,000,000, plus an amount sufficient to pay the costs related to issuing the bonds
authorized under subdivision 3, including interest on the bonds, has been received from the
tax to pay for the cost of the projects authorized under subdivision 2. 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 Fairmont with Minnesota Statutes, section 645.021, subdivisions 2 and
3.

Sec. 21. CITY OF FERGUS FALLS; TAXES AUTHORIZED.

Subdivision 1.

Sales and use tax authorized.

Notwithstanding Minnesota Statutes,
section 297A.99, subdivision 1, section 477A.016, or any other law, ordinance, or city
charter, and as approved by the voters at the November 8, 2016, general election, the city
of Fergus Falls may impose, by ordinance, a sales and use tax of up to one-half of one
percent for the purposes specified in subdivision 2. Except as otherwise provided in this
section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition,
administration, collection, and enforcement of the tax authorized under this subdivision.

Subd. 2.

Use of sales and use tax revenues.

The revenues from the tax authorized under
subdivision 1 must be used by the city of Fergus Falls to pay the costs of collecting and
administering the tax and securing and paying debt service on bonds issued to finance all
or part of the costs of the expansion and betterment of the Fergus Falls Public Library located
at 205 East Hampden Avenue in the city of Fergus Falls.

Subd. 3.

Bonding authority.

(a) The city of Fergus Falls may issue bonds under
Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project
authorized in subdivision 2. The aggregate principal amount of bonds issued under this
subdivision may not exceed $9,800,000, plus an amount applied to the payment of costs of
issuing the bonds. The bonds may be paid from or secured by any funds available to the
city of Fergus Falls, including the tax authorized under subdivision 1. The issuance of bonds
under this subdivision is not subject to Minnesota Statutes, section 275.60 and 275.61.

(b) The bonds are not included in computing any debt limitation applicable to the city,
and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and
interest on the bonds is not subject to any levy limitation. 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
earlier of: (1) 12 years after the tax is first imposed, or (2) when the city council determines
that $9,800,000 has been received from the tax to pay for the cost of the project authorized
under subdivision 2, plus an amount sufficient to pay the costs related to the 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 any
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 Fergus Falls with Minnesota Statutes, section 645.021, subdivisions 2
and 3.

Sec. 22. CITY OF MOOSE LAKE; TAXES AUTHORIZED.

Subdivision 1.

Sales and use tax authorization.

Notwithstanding Minnesota Statutes,
section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter,
as approved by the voters at the November 6, 2012, general election, the city of Moose Lake
may impose, by ordinance, a sales and use tax of up to one-half of one percent for the
purposes specified in subdivision 2. Except as otherwise provided in this section, the
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.

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 Moose Lake to pay the costs of collecting
and administering the tax and to finance the costs of: (1) improvements to the city's park
system; (2) street and related infrastructure improvements; and (3) municipal arena
improvements. Authorized costs include construction and engineering costs and associated
bond costs.

Subd. 3.

Bonding authority.

The city of Moose Lake 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 $3,000,000, 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
Moose Lake, 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.

The bonds are not included in computing any debt limitation applicable to the city of
Moose Lake, 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
earlier of: (1) 20 years after the tax is first imposed; or (2) when the city council determines
that $3,000,000 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 Moose Lake with Minnesota Statutes, section 645.021, subdivisions 2
and 3.

Sec. 23. CITY OF NEW LONDON; TAX 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 the general election of November 8, 2016, the city
of New London may impose, by ordinance, a sales and use tax of one-half of one percent
for the purposes specified in subdivision 2. Except as otherwise provided in this section,
the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.

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 New London to pay the costs of collecting
and administering the tax and to finance the capital and administrative costs of the following
projects:

(1) construction and equipping of a new library and community room;

(2) construction of an ambulance bay at the fire hall; and

(3) improvements to the New London Senior Citizen Center.

The total that may be raised from the tax to pay for these projects is limited to $872,000
plus the costs related to the issuance and paying debt service on bonds for these projects.

Subd. 3.

Bonding authority.

(a) The city of New London 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 $872,000, 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 New London, 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 New London, 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
earlier of: (1) 20 years after the tax is first imposed; or (2) when the city council determines
that $872,000, plus an amount sufficient to pay the costs related to issuing the bonds
authorized under subdivision 3, including interest on the bonds, has been received from the
tax to pay for the cost of the projects authorized under subdivision 2. 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 New London with Minnesota Statutes, section 645.021, subdivisions 2
and 3.

Sec. 24. CITY OF NORTH MANKATO; FOOD AND BEVERAGE TAX
AUTHORIZED.

Subdivision 1.

Food and beverage tax authorized.

Notwithstanding Minnesota Statutes,
section 477A.016, or any ordinance, city charter, or other provision of law, the city of North
Mankato may, by ordinance, impose a sales tax of up to one percent on the gross receipts
on all sales of food and beverages by a restaurant or place of refreshment, as defined by
resolution of the city, that are located within the city. For purposes of this section, "food
and beverages" includes retail on-sale of intoxicating liquor and fermented malt beverages.

Subd. 2.

Use of proceeds from tax.

The proceeds of any tax imposed under subdivision
1 shall be used by the city to pay all or a portion of the expenses of:

(1) operation, maintenance, and capital expenses for the Caswell Park Regional Sporting
Complex; and

(2) for costs related to regional tourism events.

Authorized capital expenses include securing or paying debt service on bonds or other
obligations issued to finance the construction of the Caswell Park Regional Sporting Complex
facilities.

Subd. 3.

Collection, administration, and enforcement.

If the city desires, it may enter
into an agreement with the commissioner of revenue to administer, collect, and enforce the
taxes authorized under subdivisions 1 and 2. If the commissioner agrees to collect the tax,
the provisions of Minnesota Statutes, section 297A.99, related to collection, administration,
and enforcement apply.

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. 25. CITY OF SLEEPY EYE; LODGING TAX.

Notwithstanding Minnesota Statutes, section 477A.016, or any other provision of law,
ordinance, or city charter, the city council for the city of Sleepy Eye may impose, by
ordinance, a tax of up to two percent on the gross receipts subject to the lodging tax under
Minnesota Statutes, section 469.190. This tax is in addition to any tax imposed under
Minnesota Statutes, section 469.190, and the total tax imposed under that section and this
provision must not exceed five percent. Revenue from the tax imposed under this section
may only be used for the same purposes as a tax imposed under Minnesota Statutes, section
469.190.

EFFECTIVE DATE.

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

Sec. 26. CITY OF SPICER; TAX 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 the general election of November 8, 2016, the city
of Spicer may impose, by ordinance, a sales and use tax of one-half of one percent for the
purposes specified in subdivision 2. Except as otherwise provided in this section, the
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.

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 Spicer to pay the costs of collecting and
administering the tax and to finance the capital and administrative costs of the following
projects:

(1) pedestrian public safety improvements such as a pedestrian bridge or crosswalk
signals at marked Trunk Highway 23;

(2) park and trail capital improvements including signage for bicycle share the road
improvements and replacement of playground and related facilities; and

(3) capital improvements to regional community facilities such as the Dethelfs roof and
window replacement and the Pioneerland branch library roof replacement.

Subd. 3.

Bonding authority.

(a) The city of Spicer 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 $800,000, 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
Spicer, 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 Spicer, 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
earlier of: (1) ten years after the tax is first imposed; (2) December 31, 2027; or (3) when
the city council determines that $800,000, plus an amount sufficient to pay the costs related
to issuing the bonds authorized under subdivision 3, including interest on the bonds, has
been received from the tax to pay for the cost of the projects authorized under subdivision
2. All funds not used to pay collection and administration costs of the tax must be used for
projects listed in subdivision 2. 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 Spicer with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 27. CLAY COUNTY; TAX 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 or ordinance, and as
approved by the voters at the November 8, 2016, general election, Clay County may impose,
by ordinance, a sales and use tax of up to one-half of one percent for the purposes specified
in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota
Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement
of the tax authorized under this subdivision.

Subd. 2.

Use of sales and use tax revenues.

The revenues derived from the tax authorized
under subdivision 1 must be used by Clay County to pay the costs of collecting and
administering the tax and to finance the capital costs of constructing and equipping a new
correctional facility, law enforcement center, and related parking facility. Authorized
expenses include but are not limited to paying design, development, and construction costs
related to these facilities and improvements, and securing and paying debt service on bonds
issued under subdivision 3 or other obligations issued to finance the facilities listed in this
subdivision.

Subd. 3.

Bonding authority.

Clay County 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
$52,000,000, 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 Clay County, 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.

Subd. 4.

Termination of taxes.

The tax imposed under subdivision 1 expires at the
earlier of: (1) 20 years after the tax is first imposed; or (2) when the county board determines
that $52,000,000, plus an amount sufficient to pay the costs related to issuance of the bonds
authorized under subdivision 3, including interest on the bonds, has been received from the
tax to pay for the cost of the projects authorized under subdivision 2. 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 county. The tax imposed under subdivision 1 may expire at an
earlier time if the county so determines by ordinance.

EFFECTIVE DATE.

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

Sec. 28. WOODBURY LODGING TAX.

Notwithstanding Minnesota Statutes, section 477A.016, or other law, in addition to a
tax authorized in Minnesota Statutes, section 469.190, the city of Woodbury may impose
by ordinance a tax of up to two percent on the gross receipts subject to the lodging tax under
Minnesota Statutes, section 469.190. This tax is in addition to any tax imposed under
Minnesota Statutes, section 469.190, and the total tax imposed by the city under this section
and Minnesota Statutes, section 469.190, must not exceed five percent. Revenue from the
tax imposed under this section may only be used for the same purposes as a tax imposed
under Minnesota Statutes, section 469.190.

EFFECTIVE DATE.

This section is effective the day after the governing body of the
city of Woodbury and its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 29. EFFECTIVE DATE; VALIDATION OF PRIOR ACT.

Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city of
Proctor may approve Laws 2008, chapter 366, article 7, section 13, and Laws 2010, chapter
389, article 5, sections 1 and 2, and file its approval with the secretary of state by January
1, 2015. If approved under this paragraph, actions undertaken by the city pursuant to the
approval of the voters on November 2, 2010, and otherwise in accordance with those laws
are validated.

EFFECTIVE DATE.

This section is effective the day following final enactment, without
local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1, paragraph
(a).

ARTICLE 6

TAX INCREMENT FINANCING

Section 1.

Minnesota Statutes 2016, 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 2016, 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) 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 2016, 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 2016, 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 St. Louis River-U.S. Steel Superfund 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 St. Louis River-U.S. Steel Superfund
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. 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 paragraph 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 8, subdivision 1, is amended to read:


Subdivision 1.

Authority to create districts.

(a) The governing body of the city of
Edina or its development authority may establish one or more tax increment financing
housing districts in the Southeast Edina Redevelopment Project Area, as the boundaries
exist on March 31, 2014.

(b) The authority to request certification of districts under this section expires on June
30, 2017
December 31, 2019.

EFFECTIVE DATE.

This section is effective upon compliance by the governing body
of the city of Edina with the requirements of Minnesota Statutes, section 645.021,
subdivisions 2 and 3.

Sec. 8.

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. 9. CITY OF ANOKA; TAX INCREMENT FINANCING; FIVE-YEAR RULE
EXTENSION.

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. 10. CITY OF COON RAPIDS; TAX INCREMENT FINANCING; EXTENSION
OF DISTRICT.

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;
FIVE-YEAR RULE EXTENSION.

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 EDINA; TAX INCREMENT FINANCING; 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 must file with the secretary of state certificate
of approval of Laws 2014, chapter 308, article 6, section 8, by December 31, 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 before 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 the day following final enactment without
local approval as an amendment to the provisions of Laws 2014, chapter 308, article 6,
section 8.

Sec. 13. CITY OF MOORHEAD; TAX INCREMENT FINANCING; FIVE-YEAR
RULE EXTENSION.

For purposes of Minnesota Statutes, section 469.1763, subdivision 3, paragraph (c), the
city of Moorhead's 1st Avenue North (Central Corridors) Redevelopment TIF district is
deemed to be certified on June 29, 2012, rather than its actual certification date of July 12,
2012, and 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 Moorhead and upon compliance by the city with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

Sec. 14. CITY OF RICHFIELD; TAX INCREMENT FINANCING; 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. 15. CITY OF RICHFIELD; TAX INCREMENT FINANCING; FIVE-YEAR
RULE EXTENSION.

The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that activities
must be undertaken within a five-year period from the date of certification of a tax increment
financing district, are considered to be met for the Lyndale Gardens Tax Increment Financing
District established by the city of Richfield and the housing and redevelopment authority
in and for the city of Richfield if the activities are undertaken within seven years from the
date of certification.

EFFECTIVE DATE.

This section is effective upon the city of Richfield's compliance
with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021,
subdivisions 2 and 3.

Sec. 16. CITY OF ST. LOUIS PARK; TAX INCREMENT FINANCING; POOLING
PERCENTAGE INCREASE.

For purposes of the Elmwood Village Tax Increment Financing District in the city of
St. Louis Park, including the duration extension authorized by Laws 2009, chapter 88, article
5, section 19, the permitted percentage of increments that may be expended on activities
outside the district under Minnesota Statutes, section 469.1763, subdivision 2, is increased
to 30 percent for the district.

EFFECTIVE DATE.

This section is effective upon compliance by the governing body
of the city of St. Louis Park with the requirements of Minnesota Statutes, section 645.021,
subdivision 3.

Sec. 17. CITY OF ST. PAUL; TAX INCREMENT FINANCING; FORD SITE
REDEVELOPMENT.

(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, 2017, without local approval
under Minnesota Statutes, section 645.023, subdivision 1, paragraph (a).

Sec. 18. WASHINGTON COUNTY; TAX INCREMENT FINANCING; SPECIAL
RULES AUTHORIZATION.

(a) If Washington County elects, upon the adoption of a tax increment financing plan
for a district, the rules under this section apply to one or more tax increment financing
districts established by the county or the community development agency of the county.
The area within which the tax increment districts may be created is located in the city of
Newport and is south of marked Interstate Highway 494, north of 15th Street extended to
the Mississippi River, east of the Mississippi River, and west of marked Trunk Highway
61 and the adjacent rights-of-way and shall be referred to as the "Newport Red Rock Crossing
Project Area" or "project area."

(b) The requirements for qualifying a redevelopment district under Minnesota Statutes,
section 469.174, subdivision 10, do not apply to the parcels identified by parcel identification
numbers: 2602822440051, 260282244050, 260282244049, 260282244048, 2602822440046,
2602822440045, 260282244044, 2602822440043, 2602822440026, 2602822440025,
260282244024, and 2602822440023, which are deemed substandard for the purpose of
qualifying the district as a redevelopment district.

(c) Increments spent outside a district shall only be spent within the project area and on
costs described in Minnesota Statutes, section 469.176, subdivision 4j.

(d) Notwithstanding anything to the contrary in Minnesota Statutes, section 469.1763,
subdivision 2, paragraph (a), not more than 30 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. The five-year rule
under Minnesota Statutes, section 469.1763, subdivision 3, applies as if the limit is nine
years.

(e) The authority to approve a tax increment financing plan and to establish a tax
increment financing district under this section expires December 31, 2027.

EFFECTIVE DATE.

This section is effective and shall retroactively include the
redevelopment district in the project area approved by Washington County on November
8, 2016, upon approval by the governing body of the city of Newport and Washington
County and upon compliance by the county with Minnesota Statutes, section 645.021,
subdivision 3.

ARTICLE 7

PUBLIC FINANCE

Section 1.

Minnesota Statutes 2016, 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 defined in section 240A.09, paragraph (b), clause (2), must 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 2016, 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 defined in section 240A.09, paragraph
(b), clause (2), must 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 2016, 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 defined in section 240A.09, paragraph (b), clause (2), must 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 2016, 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 defined in section 240A.09, paragraph
(b), clause (2), must 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 2016, 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 2016, 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 2016, 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. 8.

Minnesota Statutes 2016, section 475.60, subdivision 2, is amended to read:


Subd. 2.

Requirements waived.

The requirements as to public sale shall not apply:

(1) to 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) to obligations sold by an issuer in an amount not exceeding the total sum of
$1,200,000 in any 12-month period;

(3) to 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) to 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) to 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) to 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) to obligations issued in the form of an installment purchase contract, lease purchase
agreement, or other similar agreement;

(8) to obligations sold under a bond reinvestment program; and

(9) if the municipality has retained an independent financial advisor municipal adviser,
obligations which the governing body determines shall be sold by private negotiation.

ARTICLE 8

MISCELLANEOUS

Section 1.

Minnesota Statutes 2016, section 287.08, is amended to read:


287.08 TAX, HOW PAYABLE; RECEIPTS.

(a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of any
county in this state in which the real property or some part is located at or before the time
of filing the mortgage for record. The treasurer shall endorse receipt on the mortgage and
the receipt is conclusive proof that the tax has been paid in the amount stated and authorizes
any county recorder or registrar of titles to record the mortgage. Its form, in substance, shall
be "registration tax hereon of ..................... dollars paid." If the mortgage is exempt from
taxation the endorsement shall, in substance, be "exempt from registration tax." In either
case the receipt must be signed by the treasurer. In case the treasurer is unable to determine
whether a claim of exemption should be allowed, the tax must be paid as in the case of a
taxable mortgage. For documents submitted electronically, the endorsements and tax amount
shall be affixed electronically and no signature by the treasurer will be required. The actual
payment method must be arranged in advance between the submitter and the receiving
county.

(b) The county treasurer may refund in whole or in part any mortgage registry tax
overpayment if a written application by the taxpayer is submitted to the county treasurer
within 3-1/2 years from the date of the overpayment. If the county has not issued a denial
of the application, the taxpayer may bring an action in Tax Court in the county in which
the tax was paid at any time after the expiration of six months from the time that the
application was submitted. A denial of refund may be appealed within 60 days from the
date of the denial by bringing an action in Tax Court in the county in which the tax was
paid. The action is commenced by the serving of a petition for relief on the county treasurer,
and by filing a copy with the court. The county attorney shall defend the action. The county
treasurer shall notify the treasurer of each county that has or would receive a portion of the
tax as paid.

(c) If the county treasurer determines a refund should be paid, or if a refund is ordered
by the court, the county treasurer of each county that actually received a portion of the tax
shall immediately pay a proportionate share of three percent of the refund using any available
county funds. The county treasurer of each county that received, or would have received,
a portion of the tax shall also pay their county's proportionate share of the remaining 97
percent of the court-ordered refund on or before the 20th day of the following month using
solely the mortgage registry tax funds that would be paid to the commissioner of revenue
on that date under section 287.12. If the funds on hand under this procedure are insufficient
to fully fund 97 percent of the court-ordered refund, the county treasurer of the county in
which the action was brought shall file a claim with the commissioner of revenue under
section 16A.48 for the remaining portion of 97 percent of the refund, and shall pay over the
remaining portion upon receipt of a warrant from the state issued pursuant to the claim.

(d) When any mortgage covers real property located in more than one county in this
state the total tax must be paid to the treasurer of the county where the mortgage is first
presented for recording, and the payment must be receipted as provided in paragraph (a).
If the principal debt or obligation secured by such a multiple county mortgage exceeds
$10,000,000, the tax collected shall be forwarded by the county treasurer receiving it to the
commissioner of revenue and
the nonstate portion of the tax must be divided and paid over
by the county treasurer receiving it commissioner of revenue, on or before the 20th day of
each month after receipt, to the county or counties entitled in the ratio that the estimated
market value of the real property covered by the mortgage in each county bears to the
estimated market value of all the real property in this state described in the mortgage. In
making the division and payment the county treasurer commissioner of revenue shall send
a statement giving the description of the real property described in the mortgage and the
estimated market value of the part located in each county. For this purpose, the treasurer of
any county
commissioner of revenue may require the treasurer of any other county to certify
to the former the estimated market value of any tract of real property in any mortgage in
the county
.

(e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The mortgagee
may undertake to collect and remit the tax on behalf of the mortgagor. If the mortgagee
collects money from the mortgagor to remit the tax on behalf of the mortgagor, the mortgagee
has a fiduciary duty to remit the tax on behalf of the mortgagor as to the amount of the tax
collected for that purpose and the mortgagor is relieved of any further obligation to pay the
tax as to the amount collected by the mortgagee for this purpose.

Sec. 2.

Minnesota Statutes 2016, section 295.53, subdivision 1, is amended to read:


Subdivision 1.

Exemptions.

(a) The following payments are excluded from the gross
revenues subject to the hospital, surgical center, or health care provider taxes under sections
295.50 to 295.59:

(1) payments received for services provided under the Medicare program, including
payments received from the government, and organizations governed by sections 1833 and
1876 of title XVIII of the federal Social Security Act, United States Code, title 42, section
1395, and enrollee deductibles, coinsurance, and co-payments, whether paid by the Medicare
enrollee or by a Medicare supplemental coverage as defined in section 62A.011, subdivision
3
, clause (10), or by Medicaid payments under title XIX of the federal Social Security Act.
Payments for services not covered by Medicare are taxable;

(2) payments received for home health care services;

(3) payments received from hospitals or surgical centers for goods and services on which
liability for tax is imposed under section 295.52 or the source of funds for the payment is
exempt under clause (1), (7), (10), or (14);

(4) payments received from health care providers for goods and services on which
liability for tax is imposed under this chapter or the source of funds for the payment is
exempt under clause (1), (7), (10), or (14);

(5) amounts paid for legend drugs, other than nutritional products and blood and blood
components, to a wholesale drug distributor who is subject to tax under section 295.52,
subdivision 3
, reduced by reimbursements received for legend drugs otherwise exempt
under this chapter;

(6) payments received by a health care provider or the wholly owned subsidiary of a
health care provider for care provided outside Minnesota;

(7) payments received from the chemical dependency fund under chapter 254B;

(8) payments received in the nature of charitable donations that are not designated for
providing patient services to a specific individual or group;

(9) payments received for providing patient services incurred through a formal program
of health care research conducted in conformity with federal regulations governing research
on human subjects. Payments received from patients or from other persons paying on behalf
of the patients are subject to tax;

(10) payments received from any governmental agency for services benefiting the public,
not including payments made by the government in its capacity as an employer or insurer
or payments made by the government for services provided under general assistance medical
care, the MinnesotaCare program, or the medical assistance program governed by title XIX
of the federal Social Security Act, United States Code, title 42, sections 1396 to 1396v;

(11) government payments received by the commissioner of human services for
state-operated services;

(12) payments received by a health care provider for hearing aids and related equipment
or prescription eyewear delivered outside of Minnesota;

(13) payments received by an educational institution from student tuition, student activity
fees, health care service fees, government appropriations, donations, or grants, and for
services identified in and provided under an individualized education program as defined
in section 256B.0625 or Code of Federal Regulations, chapter 34, section 300.340(a). Fee
for service payments and payments for extended coverage are taxable;

(14) payments received under the federal Employees Health Benefits Act, United States
Code, title 5, section 8909(f), as amended by the Omnibus Reconciliation Act of 1990.
Enrollee deductibles, coinsurance, and co-payments are subject to tax; and

(15) payments received under the federal Tricare program, Code of Federal Regulations,
title 32, section 199.17(a)(7). Enrollee deductibles, coinsurance, and co-payments are subject
to tax.

(b) Payments received by wholesale drug distributors for legend drugs sold directly to
veterinarians or veterinary bulk purchasing organizations are excluded from the gross
revenues subject to the wholesale drug distributor tax under sections 295.50 to 295.59.

(c) Supplemental or enhanced payments authorized under section 256B.19, subdivision
1c, 256B.196, or 256B.197 are excluded from gross revenues subject to the tax under sections
295.50 to 295.59.

EFFECTIVE DATE.

This section is effective retroactively for gross revenues received
on or after July 1, 2016.

Sec. 3.

Minnesota Statutes 2016, section 296A.01, subdivision 7, is amended to read:


Subd. 7.

Aviation gasoline.

"Aviation gasoline" means any gasoline that is capable of
use for the purpose of producing or generating
used to produce or generate power for
propelling internal combustion engine aircraft, that meets the specifications in ASTM
specification D910-11, and that either
.

Aviation gasoline includes any gasoline:

(1) is invoiced and billed by a producer, manufacturer, refiner, or blender to a distributor
or dealer, by a distributor to a dealer or consumer, or by a dealer to consumer, as "aviation
gasoline" that meets specifications in ASTM specification D910-16 or any other ASTM
specification as gasoline appropriate for use in producing or generating power for propelling
internal combustion engine aircraft
; or

(2) whether or not invoiced and billed as provided in clause (1), is received, sold, stored,
or withdrawn from storage by any person, to be used for the purpose of producing or
generating power for propelling internal combustion engine aircraft
sold to a dealer of
aviation gasoline for dispensing directly into the fuel tank of an aircraft
.

EFFECTIVE DATE.

This section is effective the day following final enactment except
that the change to clause (2) is effective for sales and purchases made after June 30, 2017.

Sec. 4.

Minnesota Statutes 2016, 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, 2017.

Sec. 5.

Minnesota Statutes 2016, section 296A.01, is amended by adding a subdivision to
read:


Subd. 13a.

Dealer of aviation gasoline.

"Dealer of 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, 2017.

Sec. 6.

Minnesota Statutes 2016, 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 aviation gasoline, but only to the extent that the gasoline is intended 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, 2017.

Sec. 7.

Minnesota Statutes 2016, 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, 2017.

Sec. 8.

Minnesota Statutes 2016, 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 aviation gasoline 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.