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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1984 

                        CHAPTER 514-H.F.No. 1528 
           An act relating to taxation; updating references to 
          the internal revenue code; simplifying certain income 
          tax and property tax refund provisions; making 
          technical corrections and administrative changes to 
          income tax, inheritance tax and property tax refund 
          provisions; making child support withholding 
          permanent; providing for withholding of attorneys fees 
          and costs; amending Minnesota Statutes 1982, sections 
          10A.31, subdivision 1; 62E.11, subdivision 8; 171.31; 
          271.19; 290.01, subdivision 20e; 290.05, subdivision 
          4; 290.06, subdivisions 3e, and 3f; 290.095, 
          subdivision 11; 290.17, subdivision 1a; 290.23, 
          subdivision 3; 290.311, subdivision 1; 290.41, 
          subdivision 2, and by adding a subdivision; 290.50, 
          subdivision 6; 290.56, subdivisions 4 and 5; 290.61; 
          290.931, subdivision 1; 290A.07, subdivision 2a; 
          600.21; Minnesota Statutes 1983 Supplement, sections 
          176.186; 290.01, subdivisions 20, 20a, 20b, and 20f; 
          290.032, subdivision 2; 290.06, subdivisions 2c, 3d, 
          13, and 14; 290.067, subdivisions 1 and 2; 290.077, 
          subdivision 4; 290.089, subdivisions 2 and 3; 290.09, 
          subdivisions 5 and 29; 290.091; 290.10; 290.17, 
          subdivisions 1 and 2; 290.174; 290.175; 290.18, 
          subdivision 1; 290.21, subdivision 3; 290.37, 
          subdivision 1; 290.431; 290.45, subdivision 1; 290.46; 
          290.92, subdivision 26; 290.93, subdivision 10; 
          290.9726, subdivision 5; 290A.03, subdivisions 3, 6, 
          11, 12, and 14; 290A.04, subdivisions 1 and 2; 
          290A.07, subdivision 3; and 296.18, subdivision 1; 
          Laws 1980, chapter 439, section 36; Laws 1982, chapter 
          523, article 4, section 2; repealing Minnesota 
          Statutes 1982, sections 290.011; 290.311, subdivision 
          2; Minnesota Statutes 1983 Supplement, section 
          290A.16; and Laws 1983, chapter 207, section 6. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                               ARTICLE 1 

                                 UPDATE 
    Section 1.  Minnesota Statutes 1983 Supplement, section 
290.01, subdivision 20, is amended to read: 
    Subd. 20.  [GROSS INCOME.] Except as otherwise provided in 
this chapter, the term "gross income," as applied to 
corporations includes every kind of compensation for labor or 
personal services of every kind from any private or public 
employment, office, position or services; income derived from 
the ownership or use of property; gains or profits derived from 
every kind of disposition of, or every kind of dealing in, 
property; income derived from the transaction of any trade or 
business; and income derived from any source.  
    The term "gross income" in its application to individuals, 
estates, and trusts shall mean the adjusted gross income as 
defined in the Internal Revenue Code of 1954, as amended through 
the date specified herein for the applicable taxable year, with 
the modifications specified in this subdivision and in 
subdivisions 20a to 20f.  For estates and trusts the adjusted 
gross income shall be their federal taxable income as defined in 
the Internal Revenue Code of 1954, as amended through the date 
specified herein for the applicable taxable year, with the 
modifications specified in this subdivision and in subdivisions 
20a to 20f, and with the modification that the federal deduction 
for personal exemptions for trusts and estates shall not be 
allowed.  
     (i) The Internal Revenue Code of 1954, as amended through 
December 31, 1976, including the amendments made to section 280A 
(relating to licensed day care centers) in H.R. 3477 as it 
passed the Congress on May 16, 1977, shall be in effect for the 
taxable years beginning after December 31, 1976.  The provisions 
of the Tax Reform Act of 1976, P.L. 94-455, which affect 
adjusted gross income shall become effective for purposes of 
this chapter at the same time they become effective for federal 
income tax purposes.  
     The provisions of section 4 of P.L. 95-458, sections 131, 
133, 134, 141, 152, 156, 157, 405, and 543 of P.L. 95-600, and 
section 2 of P.L. 96-608 (relating to pensions, individual 
retirement accounts, deferred compensation plans, the sale of a 
residence and to conservation payments to farmers) including the 
amendments made to these sections in P.L. 96-222 shall be 
effective at the same time that these provisions became 
effective for federal income tax purposes. 
     (ii) The Internal Revenue Code of 1954, as amended through 
December 31, 1979, shall be in effect for taxable years 
beginning after December 31, 1979. 
     (iii) The Internal Revenue Code of 1954, as amended through 
December 31, 1980, and as amended by sections 302(b) and 501 to 
509 of Public Law Number 97-34, shall be in effect for taxable 
years beginning after December 31, 1980 including the provisions 
of section 404 (relating to partial exclusions of dividends and 
interest received by individuals) of the Crude Oil Windfall 
Profit Tax Act of 1980, P.L. 96-223.  The provisions of P.L. 
96-471 (relating to installment sales) sections 122, 123, 126, 
201, 202, 203, 204, 211, 213, 214, 251, 261, 264, 265, 
311(g)(3), 313, 314(a)(1), 321(a), 501 to 507, 811, and 812 of 
the Economic Recovery Tax Act of 1981, Public Law Number 97-34 
and section 113 of Public Law Number 97-119 shall be effective 
at the same time that they become effective for federal income 
tax purposes. 
     (iv) The Internal Revenue Code of 1954, as amended through 
December 31, 1981, shall be in effect for taxable years 
beginning after December 31, 1981.  The provisions of sections 
205(a), 214 to 222, 231, 232, 236, 247, 251, 252, 253, 265, 266, 
285, 288, and 335 of the Tax Equity and Fiscal Responsibility 
Act of 1982, Public Law Number 97-248, section 6(b)(2) and (3) 
of the Subchapter S Revision Act of 1982, Public Law Number 
97-354, section 517 of Public Law Number 97-424, sections 101(c) 
and (d), 102(a), (aa), (f)(4), (g), (j), (l), 103(c), 104(b)(3), 
105, 305(d), 306(a)(9) of Public Law Number 97-448, and sections 
101 and 102 of Public Law Number 97-473 shall be effective at 
the same time that they become effective for federal income tax 
purposes.  The Payment-in-Kind Tax Treatment Act of 1983, Public 
Law Number 98-4, shall be effective at the same time that it 
becomes effective for federal income tax purposes. 
     (v) The Internal Revenue Code of 1954, as amended through 
January 15, 1983, shall be in effect for taxable years beginning 
after December 31, 1982. 
    (vi) The Internal Revenue Code of 1954, as amended through 
December 31, 1983, shall be in effect for taxable years 
beginning after December 31, 1983.  
    References to the Internal Revenue Code of 1954 in 
subdivisions 20a, 20b, 20c, 20e, and 20f shall mean the code in 
effect for the purpose of defining gross income for the 
applicable taxable year.  
    Sec. 2.  Minnesota Statutes 1983 Supplement, section 
290.01, subdivision 20b, is amended to read: 
    Subd. 20b.  [MODIFICATIONS REDUCING FEDERAL ADJUSTED GROSS 
INCOME.] There shall be subtracted from federal adjusted gross 
income: 
     (1) Interest income on obligations of any authority, 
commission or instrumentality of the United States to the extent 
includible in gross income for federal income tax purposes but 
exempt from state income tax under the laws of the United States;
     (2) The portion of any gain, from the sale or other 
disposition of property having a higher adjusted basis for 
Minnesota income tax purposes than for federal income tax 
purposes, that does not exceed such difference in basis; but if 
such gain is considered a long-term capital gain for federal 
income tax purposes, the modification shall be limited to 40 per 
centum of the portion of the gain.  This modification shall not 
be applicable if the difference in basis is due to disallowance 
of depreciation pursuant to section 290.101. 
     (3) Income from the performance of personal or professional 
services which is subject to the reciprocity exclusion contained 
in section 290.081, clause (a); 
     (4) Losses, not otherwise reducing federal adjusted gross 
income assignable to Minnesota, arising from events or 
transactions which are assignable to Minnesota under the 
provisions of sections 290.17 to 290.20, including any capital 
loss or net operating loss carryforwards or carrybacks or out of 
state loss carryforwards resulting from the losses, and 
including any farm loss carryforwards or carrybacks; 
     (5) If included in federal adjusted gross income, the 
amount of any credit received, whether received as a refund or 
credit to another taxable year's income tax liability, pursuant 
to chapter 290A, and the amount of any overpayment of income tax 
to Minnesota, or any other state, for any previous taxable year, 
whether the amount is received as a refund or credited to 
another taxable year's income tax liability; 
     (6) To the extent included in federal adjusted gross 
income, or the amount reflected as the ordinary income portion 
of a lump sum distribution under section 402(e) of the Internal 
Revenue Code of 1954, notwithstanding any other law to the 
contrary, the amount received by any person (i) from the United 
States, its agencies or instrumentalities, the Federal Reserve 
Bank or from the state of Minnesota or any of its political or 
governmental subdivisions or from any other state or its 
political or governmental subdivisions, or a Minnesota volunteer 
firefighter's relief association, by way of payment as a 
pension, public employee retirement benefit, or any combination 
thereof, (ii) as a retirement or survivor's benefit made from a 
plan qualifying under section 401, 403, 404, 405, 408, 409 or 
409A of the Internal Revenue Code of 1954, or (iii) severance 
pay distributed to an individual upon discontinuance of the 
individual's employment due to termination of business 
operations by the individual's employer, provided that the 
termination is reasonably likely to be permanent, involves the 
discharge of at least 75 percent of the employees at that site 
within a one-year period, and the business is not acquired by 
another person who continues operations at that site.  The 
maximum amount of this subtraction shall be $11,000 less the 
amount by which the individual's federal adjusted gross income, 
plus the ordinary income portion of a lump sum distribution as 
defined in section 402(e) of the Internal Revenue Code of 1954, 
exceeds $17,000.  For purposes of the preceding sentence, 
"federal adjusted gross income" shall not include railroad 
retirement or social security benefit amounts provided in 
sections 86 and 72(r) of the Internal Revenue Code of 1954.  For 
purposes of this clause, "severance pay" means an amount 
received for cancellation of an employment contract or a 
collectively bargained termination payment made as a substitute 
for income which would have been earned for personal services to 
be rendered in the future.  In the case of a volunteer 
firefighter who receives an involuntary lump sum distribution of 
his pension or retirement benefits, the maximum amount of this 
subtraction shall be $11,000; this subtraction shall not be 
reduced by the amount of the individual's federal adjusted gross 
income in excess of $17,000; 
     (7) To the extent included in the taxpayer's federal 
adjusted gross income for the taxable year, gain recognized upon 
a transfer of property to the spouse or former spouse of the 
taxpayer in exchange for the release of the spouse's marital 
rights;  
         (8) The amount of any distribution from a qualified pension 
or profit sharing plan included in federal adjusted gross income 
in the year of receipt to the extent of any contribution not 
previously allowed as a deduction by reason of a change in 
federal law which was not adopted by Minnesota law for a taxable 
year beginning in 1974 or later; 
          (9) Interest, including payment adjustment to the extent 
that it is applied to interest, earned by the seller of the 
property on a family farm security loan executed before January 
1, 1986 that is guaranteed by the commissioner of agriculture as 
provided in sections 41.51 to 41.60; 
          (10) The first $3,000 of compensation for personal services 
in the armed forces of the United States or the United Nations, 
and the next $2,000 of compensation for personal services in the 
armed forces of the United States or the United Nations wholly 
performed outside the state of Minnesota.  This modification 
does not apply to compensation defined in subdivision 20b, 
clause (6); 
          (11) The amount of any income earned for personal services 
rendered outside of Minnesota prior to the date when the 
taxpayer became a resident of Minnesota.  This modification does 
not apply to compensation defined in subdivision 20b, clause (6);
          (12) In the case of wages or salaries paid or incurred on 
or after January 1, 1977, the amount of any credit for 
employment of certain new employees under sections 44B and 51 to 
53 of the Internal Revenue Code of 1954 which is claimed as a 
credit against the taxpayer's federal tax liability, but only to 
the extent that the credit is connected with or allocable 
against the production or receipt of income included in the 
measure of the tax imposed by this chapter; 
          (13) In the case of work incentive program expenses paid or 
incurred on or after January 1, 1979, the amount of any credit 
for expenses of work incentive programs under sections 40, 50A 
and 50B of the Internal Revenue Code of 1954 which is claimed as 
a credit against the taxpayer's federal tax liability, but only 
to the extent that the credit is connected with or allocable 
against the production or receipt of income included in the 
measure of the tax imposed by this chapter; 
          (14) Unemployment compensation to the extent includible in 
gross income for federal income tax purposes under section 85 of 
the Internal Revenue Code of 1954; 
     (15) The amount of any income or gain which is not 
assignable to Minnesota under the provisions of section 290.17; 
     (16) Interest earned on a contract for deed entered into 
for the sale of property for agricultural use if the rate of 
interest set in the contract is no more than nine percent per 
year for the duration of the term of the contract.  This 
exclusion shall be available only if (1) the purchaser is an 
individual who, together with his spouse and dependents, has a 
total net worth valued at less than $150,000 and (2) the 
property sold under the contract is farm land as defined in 
section 41.52, subdivision 6 of no more than 1,000 acres that 
the purchaser intends to use for agricultural purposes.  
Compliance with these requirements shall be stated in an 
affidavit to be filed with the first income tax return on which 
the taxpayer claims the exclusion provided in this clause.  Upon 
request accompanied by the information necessary to make the 
determination, the commissioner shall determine whether interest 
to be paid on a proposed transaction will qualify for this 
exclusion; the determination shall be provided within 30 days of 
receipt of the request, unless the commissioner finds it 
necessary to obtain additional information, or verification of 
the information provided, in which case the determination shall 
be provided within 30 days of receipt of the final item of 
information or verification.  The exclusion provided in this 
clause shall apply to interest earned on contracts for deed 
entered into after December 31, 1981 and before July 1, 1983; 
     (17) Income from the business of mining as defined in 
section 290.05, subdivision 1, clause (a) which is not subject 
to the Minnesota income tax;  
          (18) To the extent included in federal adjusted gross 
income, distributions from a qualified governmental pension plan 
which represent a return of designated employee contributions to 
the plan and which contributions were included in gross income 
pursuant to subdivision 20a, clause (20); and 
     (19) To the extent included in federal adjusted gross 
income, distributions from an individual retirement account 
which represent a return of designated employee contributions if 
the contributions were included in gross income pursuant to 
subdivision 20a, clause (19).  The distribution shall be 
allocated first to return of contributions included in gross 
income until the amount of the contributions has been exhausted; 
and 
    (20) To the extent included in federal adjusted gross 
income, social security benefits as defined and as provided in 
section 86 of the Internal Revenue Code of 1954, railroad 
retirement benefits as provided in section 72(r) of the Internal 
Revenue Code of 1954, and sick pay paid under the Railroad 
Unemployment Insurance Act as provided in section 105(i) of the 
Internal Revenue Code of 1954, provided that any amount 
subtracted under this clause may not be subtracted under clause 
(6).  
    Sec. 3.  Minnesota Statutes 1983 Supplement, section 
290.10, is amended to read: 
     290.10 [NONDEDUCTIBLE ITEMS.] 
     In computing the net income no deduction shall in any case 
be allowed for: 
     (1) Personal, living or family expenses; 
     (2) Amounts paid out for new buildings or for permanent 
improvements or betterments made to increase the value of any 
property or estate, except as otherwise provided in this chapter;
     (3) Amounts expended in restoring property or in making 
good the exhaustion thereof for which an allowance is or has 
been made; 
     (4) Premiums paid on any life insurance policy covering the 
life of the taxpayer or of any other person; 
     (5) The shrinkage in value, due to the lapse of time, of a 
life or terminable interest of any kind in property acquired by 
gift, devise, bequest or inheritance; 
     (6) Losses from sales or exchanges of property, directly or 
indirectly, between related taxpayers as defined and as provided 
in section 267 of the Internal Revenue Code of 1954, as amended 
through December 31, 1982; 
     (7) In computing net income, no deduction shall be allowed 
under section 290.09, subdivision 2, relating to expenses 
incurred or under section 290.09, subdivision 3, relating to 
interest accrued as provided in section 267 of the Internal 
Revenue Code of 1954, as amended through December 31, 1982; 
     (8) (a) Contributions by employees under the federal 
railroad retirement act and the federal social security act.  
(b) Payments to Minnesota or federal public employee retirement 
funds.  (c) Three-fourths (75 percent) of the amount of taxes 
imposed on self-employment income under section 1401 of the 
Internal Revenue Code of 1954, as amended through December 31, 
1982, provided that effective for taxable years beginning after 
December 31, 1989, no deduction is allowed for self-employment 
taxes where the taxpayer claimed a deduction for those taxes 
under section 164(f) of the Internal Revenue Code of 1954, as 
amended through December 31, 1983. 
    (9) Expenses, interest and taxes connected with or 
allocable against the production or receipt of all income not 
included in the measure of the tax imposed by this chapter.  
    (10) In situations where this chapter provides for a 
subtraction from gross income of a specific dollar amount of an 
item of income assignable to this state, and within the measure 
of the tax imposed by this chapter, that portion of the federal 
income tax liability assessed upon such income subtracted, and 
any expenses attributable to earning such income, shall not be 
deductible in computing net income. 
    (11) Amounts paid or accrued for such taxes and carrying 
charges as, under rules prescribed by the commissioner, are 
chargeable to capital account with respect to property, if the 
taxpayer elects, in accordance with such rules, to treat such 
taxes or charges as so chargeable. 
    (12) No deduction or credit shall be allowed for any amount 
paid or incurred during the taxable year in carrying on any 
trade or business if the trade or business (or the activities 
which comprise the trade or business) consists of trafficking in 
controlled substances (within the meaning of schedule I and II 
of the federal Controlled Substances Act) which is prohibited by 
federal law or the law of Minnesota.  
     Sec. 4.  Minnesota Statutes 1982, section 290.41, 
subdivision 2, is amended to read: 
    Subd. 2.  [BY PERSONS, CORPORATIONS, COOPERATIVES, 
GOVERNMENTAL ENTITIES OR SCHOOL DISTRICTS.] Every person, 
corporation, or cooperative, the state of Minnesota and its 
political subdivisions, and every city, county and school 
district in Minnesota, making payments in the regular course of 
a trade or business during the taxable year to any person or 
corporation of $600 or more on account of rents or royalties, or 
of $10 or more on account of interest, or $10 or more on account 
of dividends or patronage dividends, or $600 or more on account 
of either wages, salaries, commissions, fees, prizes, awards, 
pensions, annuities, or any other fixed or determinable gains, 
profits or income, not otherwise reportable under section 
290.92, subdivision 7, or on account of earnings of $10 or more 
distributed to its members by savings, building and loan 
associations or credit unions chartered under the laws of this 
state or the United States, (a) shall make a return (except in 
cases where a valid agreement to participate in the combined 
federal and state information reporting system has been entered 
into, and such return is therefore filed only with the 
commissioner of internal revenue pursuant to the applicable 
filing and informational reporting requirements of the Internal 
Revenue Code of 1954 as amended through December 31, 1981) in 
respect to such payments in excess of the amounts specified, 
giving the names and addresses of the persons to whom such 
payments were made, the amounts paid to each, and (b) shall make 
a return in respect to the total number of such payments and 
total amount of such payments, for each category of income 
specified, which were in excess of the amounts specified.  This 
subdivision shall not apply to the payment of interest or 
dividends to a person who was a nonresident of Minnesota for the 
entire year.  
    A person, corporation, or cooperative required to file 
returns under this subdivision on interest, dividends, or 
patronage dividend payments with respect to more than 50 payees 
for any calendar year must file all of these returns on magnetic 
media unless the person establishes to the satisfaction of the 
commissioner that compliance with this requirement would be an 
undue hardship.  
    Sec. 5.  Minnesota Statutes 1982, section 290.41, is 
amended by adding a subdivision to read:  
    Subd. 10.  [RETURNS RELATING TO SOCIAL SECURITY BENEFITS.] 
The appropriate federal official who is required to make a 
return under section 6050F (relating to social security 
benefits) of the Internal Revenue Code of 1954, as amended 
through December 31, 1983, shall file with the commissioner a 
copy of the return containing the information required under 
that section.  
     Sec. 6.  Minnesota Statutes 1983 Supplement, section 
290.92, subdivision 26, is amended to read: 
    Subd. 26.  [EXTENSION OF WITHHOLDING TO CERTAIN PAYMENTS 
WHERE IDENTIFYING NUMBER NOT FURNISHED OR INACCURATE.] (a) If, 
in the case of any backup withholding reportable payment, (1) 
the payee fails to furnish his social security account number to 
the payor, or (2) the commissioner notifies the payor that the 
social security account number furnished by the payee is 
incorrect, then the payor shall deduct and withhold from the 
payment a tax equal to five ten percent of the payment.  
    (b) (1) In the case of any failure described in clause (a) 
(1), clause (a) shall apply to any backup withholding reportable 
payment made by the payor during the period during which the 
social security account number has not been furnished.  
    (2) In any case where there is a notification described in 
clause (a)(2), clause (a) shall apply to any backup withholding 
reportable payment made by the payor (i) after the close of the 
15th 30th day after the day on which the payor was so notified 
received the notification, and (ii) before the payee furnishes 
another social security account number.  
    (3) (i) Unless the payor otherwise elects not to have this 
subparagraph apply with respect to the payee, clause (a) shall 
also apply to any backup withholding reportable payment made 
after the close of the period described in paragraph (1) or (2) 
(as the case may be) and before the 30th day after the close of 
the period.  
    (ii) If the payor so elects the application of this 
subparagraph with respect to the payee, clause (a) shall also 
apply to any backup withholding reportable payment made during 
the 15-day 30-day period described in paragraph (2). 
     (iii) The payor may elect a period shorter than the grace 
period set forth in subparagraph (i) or (ii) as the case may be. 
    (c) The provisions of section 3402(s) 3406 of the Internal 
Revenue Code of 1954, as amended through December 31, 1982 1983, 
shall apply and shall govern when withholding shall be required 
and the definition of terms.  The term "backup withholding 
reportable payment" shall include only those payments for 
personal services.  No tax shall be deducted or withheld under 
this subdivision with respect to any amount for which 
withholding is otherwise required under this section.  For 
purposes of this section, payments which are subject to 
withholding under this subdivision shall be treated as if they 
were wages paid by an employer to an employee and amounts 
deducted and withheld under this subdivision shall be treated as 
if deducted and withheld under subdivision 2a.  
    (d) Whenever the commissioner notifies a payor under this 
subdivision that the social security account number furnished by 
any payee is incorrect, notwithstanding section 290.61, the 
commissioner shall at the same time furnish a copy of the notice 
to the payor, and the payor shall promptly furnish the copy to 
the payee.  If the commissioner notifies a payor under this 
subdivision that the social security account number furnished by 
any payee is incorrect and the payee subsequently furnishes 
another social security account number to the payor, the payor 
shall promptly notify the commissioner of the other social 
security account number furnished.  
     Sec. 7.  Minnesota Statutes 1983 Supplement, section 
290A.03, subdivision 3, is amended to read: 
    Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
following: 
    (a) federal adjusted gross income as defined in the 
Internal Revenue Code of 1954 as amended through March 12, 1982 
December 31, 1983; and 
    (b) the sum of the following amounts to the extent not 
included in clause (a): 
    (i) additions to federal adjusted gross income as provided 
in Minnesota Statutes, section 290.01, subdivision 20a, clauses 
(1), (2), (6), (11), (12), and (16); 
    (ii) all nontaxable income; 
    (iii) recognized net long term capital gains; 
    (iv) dividends and interest excluded from federal adjusted 
gross income under sections 116 or 128 of the Internal Revenue 
Code of 1954; 
    (v) cash public assistance and relief; 
    (vi) any pension or annuity (including railroad retirement 
benefits, all payments received under the federal social 
security act, supplemental security income, and veterans 
benefits), which was not exclusively funded by the claimant or 
spouse, or which was funded exclusively by the claimant or 
spouse and which funding payments were excluded from federal 
adjusted gross income in the years when the payments were made; 
    (vii) nontaxable interest received from the state or 
federal government or any instrumentality or political 
subdivision thereof; 
      (viii) workers' compensation; 
      (ix) unemployment benefits; 
      (x) nontaxable strike benefits; and 
      (xi) the gross amounts of payments received in the nature 
of disability income or sick pay as a result of accident, 
sickness, or other disability, whether funded through insurance 
or otherwise.  In the case of an individual who files an income 
tax return on a fiscal year basis, the term "federal adjusted 
gross income" shall mean federal adjusted gross income reflected 
in the fiscal year ending in the calendar year.  Federal 
adjusted gross income shall not be reduced by the amount of a 
net operating loss carryback. 
      (2) "Income" does not include 
      (a) amounts excluded pursuant to the Internal Revenue Code, 
Sections 101(a), 102, 117, and 121; 
     (b) amounts of any pension or annuity which was exclusively 
funded by the claimant or spouse and which funding payments were 
not excluded from federal adjusted gross income in the years 
when the payments were made; 
     (c) surplus food or other relief in kind supplied by a 
governmental agency; 
     (d) relief granted under sections 290A.01 to 290A.20; 
     (e) child support payments received under a temporary or 
final decree of dissolution or legal separation;  
    (f) federal adjusted gross income shall be reduced by wage 
or salary expense, or expense of work incentive programs which 
are not allowed as a deduction under provisions of section 280C 
of the Internal Revenue Code of 1954; or 
    (g) federal adjusted gross income shall be reduced by the 
amount of the penalty on the early withdrawal of an all-savers 
certificate as provided in section 128(e) of the Internal 
Revenue Code of 1954.  
     Sec. 8.  [INSTRUCTIONS TO THE REVISOR.] 
     In the next edition of Minnesota Statutes, the revisor of 
statutes shall substitute the phrase "Internal Revenue Code of 
1954, as amended through December 31, 1983" for the words 
"Internal Revenue Code of 1954, as amended through December 31, 
1982," or for the words "Internal Revenue Code of 1954, as 
amended through January 15, 1983," or for the words "Internal 
Revenue Code of 1954, as amended through March 12, 1983," 
wherever the phrase occurs in chapter 290, except section 
290.01, subdivision 20.  
    Sec. 9.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective for taxable years beginning 
after December 31, 1983.  Section 4 is effective for payments 
made after December 31, 1983.  Section 5 is effective for 
benefits received after December 31, 1983.  Section 6 is 
effective for payments made after May 15, 1984.  Section 7 is 
effective for claims based on rent paid in 1983 and thereafter 
and property taxes payable in 1984 and thereafter.  Section 8 is 
effective for taxable years beginning after December 31, 1983.  

                                ARTICLE 2

                             SIMPLIFICATION
    Section 1.  Minnesota Statutes 1982, section 10A.31, 
subdivision 1, is amended to read: 
    Subdivision 1.  Every individual resident of Minnesota who 
files a an income tax return or a renter and homeowner property 
tax refund return with the commissioner of revenue may designate 
on their original return that $2 shall be paid from the general 
fund of the state into the state elections campaign fund.  If a 
husband and wife file a joint return, each spouse may designate 
that $2 shall be paid.  An individual who is 18 years of age or 
older, who is a resident of Minnesota, and who is a dependent of 
another individual who files a tax return or a renter and 
homeowner property tax refund return, may designate that $2 
shall be paid from the general fund of the state into the state 
elections campaign fund.  No individual shall be allowed to 
designate $2 more than once in any year. 
     Sec. 2.  Minnesota Statutes 1982, section 62E.11, 
subdivision 8, is amended to read: 
    Subd. 8.  Any annual fiscal year end or interim assessment 
levied against a contributing member may be offset, in an amount 
equal to the assessment paid to the association, against the 
income tax or the premium tax payable by that contributing 
member pursuant to section 60A.15 for the year in which the 
annual fiscal year end or interim assessment is levied.  The 
commissioner of revenue shall annually, on or before January 15, 
report to the chairmen of the senate finance, house 
appropriations, senate commerce and house financial institutions 
and insurance committees as to the total amount of income tax or 
premium tax offset claimed by contributing members during the 
preceding calendar year.  
     Sec. 3.  Minnesota Statutes 1983 Supplement, section 
290.01, subdivision 20, is amended to read: 
    Subd. 20.  [GROSS INCOME.] Except as otherwise provided in 
this chapter, the term "gross income," as applied to 
corporations includes every kind of compensation for labor or 
personal services of every kind from any private or public 
employment, office, position or services; income derived from 
the ownership or use of property; gains or profits derived from 
every kind of disposition of, or every kind of dealing in, 
property; income derived from the transaction of any trade or 
business; and income derived from any source.  
    The term "gross income" in its application to individuals, 
estates, and trusts shall mean the adjusted gross income as 
defined in the Internal Revenue Code of 1954, as amended through 
the date specified herein for the applicable taxable year, with 
the modifications specified in this subdivision and in 
subdivisions 20a to 20f.  For estates and trusts the adjusted 
gross income shall be their federal taxable income as defined in 
the Internal Revenue Code of 1954, as amended through the date 
specified herein for the applicable taxable year, with the 
modifications specified in this subdivision and in subdivisions 
20a to 20f, and with the modification that the federal deduction 
for personal exemptions for trusts and estates shall not be 
allowed.  
    (i) The Internal Revenue Code of 1954, as amended through 
December 31, 1976, including the amendments made to section 280A 
(relating to licensed day care centers) in H.R. 3477 as it 
passed the Congress on May 16, 1977, shall be in effect for the 
taxable years beginning after December 31, 1976.  The provisions 
of the Tax Reform Act of 1976, P.L. 94-455, which affect 
adjusted gross income shall become effective for purposes of 
this chapter at the same time they become effective for federal 
income tax purposes.  
     The provisions of section 4 of P.L. 95-458, sections 131, 
133, 134, 141, 152, 156, 157, 405, and 543 of P.L. 95-600, and 
section 2 of P.L. 96-608 (relating to pensions, individual 
retirement accounts, deferred compensation plans, the sale of a 
residence and to conservation payments to farmers) including the 
amendments made to these sections in P.L. 96-222 shall be 
effective at the same time that these provisions became 
effective for federal income tax purposes. 
     (ii) The Internal Revenue Code of 1954, as amended through 
December 31, 1979, shall be in effect for taxable years 
beginning after December 31, 1979. 
     (iii) The Internal Revenue Code of 1954, as amended through 
December 31, 1980, and as amended by sections 302(b) and 501 to 
509 of Public Law Number 97-34, shall be in effect for taxable 
years beginning after December 31, 1980 including the provisions 
of section 404 (relating to partial exclusions of dividends and 
interest received by individuals) of the Crude Oil Windfall 
Profit Tax Act of 1980, P.L. 96-223.  The provisions of P.L. 
96-471 (relating to installment sales) sections 122, 123, 126, 
201, 202, 203, 204, 211, 213, 214, 251, 261, 264, 265, 
311(g)(3), 313, 314(a)(1), 321(a), 501 to 507, 811, and 812 of 
the Economic Recovery Tax Act of 1981, Public Law Number 97-34 
and section 113 of Public Law Number 97-119 shall be effective 
at the same time that they become effective for federal income 
tax purposes. 
     (iv) The Internal Revenue Code of 1954, as amended through 
December 31, 1981, shall be in effect for taxable years 
beginning after December 31, 1981.  The provisions of sections 
205(a), 214 to 222, 231, 232, 236, 247, 251, 252, 253, 265, 266, 
285, 288, and 335 of the Tax Equity and Fiscal Responsibility 
Act of 1982, Public Law Number 97-248, section 6(b)(2) and (3) 
of the Subchapter S Revision Act of 1982, Public Law Number 
97-354, section 517 of Public Law Number 97-424, sections 101(c) 
and (d), 102(a), (aa), (f)(4), (g), (j), (l), 103(c), 104(b)(3), 
105, 305(d), 306(a)(9) of Public Law Number 97-448, and sections 
101 and 102 of Public Law Number 97-473 shall be effective at 
the same time that they become effective for federal income tax 
purposes.  The Payment-in-Kind Tax Treatment Act of 1983, Public 
Law Number 98-4, shall be effective at the same time that it 
becomes effective for federal income tax purposes. 
     (v) The Internal Revenue Code of 1954, as amended through 
January 15, 1983, shall be in effect for taxable years beginning 
after December 31, 1982.  
     References to the Internal Revenue Code of 1954 in 
subdivisions 20a, 20b, 20c, 20e, and 20f shall mean the code in 
effect for the purpose of defining gross income for the 
applicable taxable year.  
     Sec. 4.  Minnesota Statutes 1983 Supplement, section 
290.01, subdivision 20a, is amended to read: 
    Subd. 20a.  [MODIFICATIONS INCREASING FEDERAL ADJUSTED 
GROSS INCOME.] There shall be added to federal adjusted gross 
income: 
    (1) Interest income on obligations of any state other than 
Minnesota or a political subdivision of any other state exempt 
from federal income taxes under the Internal Revenue Code of 
1954; 
    (2) Income taxes imposed by this state or any other taxing 
jurisdiction, to the extent deductible in determining federal 
adjusted gross income and not credited against federal income 
tax; 
    (3) Interest on indebtedness incurred or continued to 
purchase or carry securities the income from which is exempt 
from tax under this chapter, to the extent deductible in 
determining federal adjusted gross income;  
    (4) In the case of a change of residence from Minnesota to 
another state or nation, the amount of moving expenses which 
exceed total reimbursements and which were therefore deducted in 
arriving at federal adjusted gross income;  
    (5) The amount of any increase in the taxpayer's federal 
tax liability under section 47 of the Internal Revenue Code of 
1954 to the extent of the credit under section 38 of the 
Internal Revenue Code of 1954 that was previously allowed as a 
deduction under Minnesota Statutes 1982, section 290.01, 
subdivision 20b, clause (7); 
    (6) (4) Expenses and losses arising from a farm which are 
not allowable under section 290.09, subdivision 29; 
    (7) (5) Expenses and depreciation attributable to 
substandard buildings disallowed by section 290.101;  
    (8) (6) The amount by which the gain determined pursuant to 
section 41.59, subdivision 2 exceeds the amount of such gain 
included in federal adjusted gross income; 
    (9) (7) To the extent deducted in computing the taxpayer's 
federal adjusted gross income for the taxable year, losses 
recognized upon a transfer of property to the spouse or former 
spouse of the taxpayer in exchange for the release of the 
spouse's marital rights;  
    (10) (8) Interest income from qualified scholarship funding 
bonds as defined in section 103(e) of the Internal Revenue Code 
of 1954, if the nonprofit corporation is domiciled outside of 
Minnesota; 
    (11) (9) Exempt-interest dividends, as defined in section 
852(b)(5)(A) of the Internal Revenue Code of 1954, not included 
in federal adjusted gross income pursuant to section 
852(b)(5)(B) of the Internal Revenue Code of 1954, except for 
that portion of exempt-interest dividends derived from interest 
income on obligations of the state of Minnesota, any of its 
political or governmental subdivisions, any of its 
municipalities, or any of its governmental agencies or 
instrumentalities; 
    (12) (10) The amount of any excluded gain recognized by a 
trust on the sale or exchange of property as defined in section 
641(c)(1) of the Internal Revenue Code of 1954; 
    (13) (11) To the extent not included in the taxpayer's 
federal adjusted gross income, the amount of any gain, from the 
sale or other disposition of property having a lower adjusted 
basis for Minnesota income tax purposes than for federal income 
tax purposes.  This modification shall not exceed the difference 
in basis.  If the gain is considered a long term capital gain 
for federal income tax purposes, the modification shall be 
limited to 40 percent of the portion of the gain.  This 
modification is limited to property that qualified for the 
equity investment credit contained in section 290.069, 
subdivision 4, and to property acquired in exchange for the 
release of the taxpayer's marital rights contained in section 
290.14, clause (7);  
    (14) (12) For an estate or trust, the amount of any loss 
from a source outside of Minnesota which is not allowed under 
section 290.17 including any capital loss or net operating loss 
carryforwards or carrybacks resulting from the loss;  
    (15) (13) To the extent deducted in computing the 
taxpayer's estate or trust's federal adjusted gross taxable 
income, interest, taxes and other expenses which are not allowed 
under section 290.10, clause (9) or (10);  
    (16) (14) The deduction for two-earner married couples 
provided in section 221 of the Internal Revenue Code of 1954;  
    (17) (15) Losses from the business of mining as defined in 
section 290.05, subdivision 1, clause (a) which is not subject 
to the Minnesota income tax;  
    (18) (16) Expenses and depreciation attributable to 
property subject to Laws 1982, chapter 523, article 7, section 3 
which has not been registered;  
    (19) (17) The amount of contributions to an individual 
retirement account, including a qualified voluntary employee 
contribution, simplified employee pension plan, or self-employed 
retirement plan which is allowed under sections 311 and 312 of 
Public Law Number 97-34, section 238 of Public Law Number 
97-248, and section 103(d)(1)(B) of Public Law Number 97-448 to 
the extent those contributions were not an allowable deduction 
prior to the enactment of that law; and 
    (20) (18) To the extent not included in the taxpayer's 
federal adjusted gross income, the amount of any contributions 
to a qualified pension plan, designated as employee 
contributions but which the employing unit picks up and which 
are treated as employer contributions pursuant to section 
414(h)(2) of the Internal Revenue Code of 1954.  
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 
290.01, subdivision 20b, is amended to read: 
    Subd. 20b.  [MODIFICATIONS REDUCING FEDERAL ADJUSTED GROSS 
INCOME.] There shall be subtracted from federal adjusted gross 
income: 
    (1) Interest income on obligations of any authority, 
commission or instrumentality of the United States to the extent 
includible in gross income for federal income tax purposes but 
exempt from state income tax under the laws of the United States;
    (2) The portion of any gain, from the sale or other 
disposition of property having a higher adjusted basis for 
Minnesota income tax purposes than for federal income tax 
purposes, that does not exceed such difference in basis; but if 
such gain is considered a long-term capital gain for federal 
income tax purposes, the modification shall be limited to 40 per 
centum of the portion of the gain.  This modification shall not 
be applicable if the difference in basis is due to disallowance 
of depreciation pursuant to section 290.101.  
    (3) Income from the performance of personal or professional 
services which is subject to the reciprocity exclusion contained 
in section 290.081, clause (a); 
    (4) Losses, not otherwise reducing federal adjusted gross 
income assignable to Minnesota, arising from events or 
transactions which are assignable to Minnesota under the 
provisions of sections 290.17 to 290.20, including any capital 
loss or net operating loss carryforwards or carrybacks or out of 
state loss carryforwards resulting from the losses, and 
including any farm loss carryforwards or carrybacks; 
    (5) If included in federal adjusted gross income, the 
amount of any credit received, whether received as a refund or 
credit to another taxable year's income tax liability, pursuant 
to chapter 290A, and the amount of any overpayment of income tax 
to Minnesota, or any other state, for any previous taxable year, 
whether the amount is received as a refund or credited to 
another taxable year's income tax liability; 
    (6) To the extent included in federal adjusted gross 
income, or the amount reflected as the ordinary income portion 
of a lump sum distribution under section 402(e) of the Internal 
Revenue Code of 1954, notwithstanding any other law to the 
contrary, the amount received by any person (i) from the United 
States, its agencies or instrumentalities, the Federal Reserve 
Bank or from the state of Minnesota or any of its political or 
governmental subdivisions or from any other state or its 
political or governmental subdivisions, or a Minnesota volunteer 
firefighter's relief association, by way of payment as a 
pension, public employee retirement benefit, or any combination 
thereof, (ii) as a retirement or survivor's benefit made from a 
plan qualifying under section 401, 403, 404, 405, 408, 409 or 
409A of the Internal Revenue Code of 1954, or (iii) severance 
pay distributed to an individual upon discontinuance of the 
individual's employment due to termination of business 
operations by the individual's employer, provided that the 
termination is reasonably likely to be permanent, involves the 
discharge of at least 75 percent of the employees at that site 
within a one-year period, and the business is not acquired by 
another person who continues operations at that site.  The 
maximum amount of this subtraction shall be $11,000 less the 
amount by which the individual's federal adjusted gross income, 
plus the ordinary income portion of a lump sum distribution as 
defined in section 402(e) of the Internal Revenue Code of 1954, 
exceeds $17,000.  For purposes of this clause, "severance pay" 
means an amount received for cancellation of an employment 
contract or a collectively bargained termination payment made as 
a substitute for income which would have been earned for 
personal services to be rendered in the future.  In the case of 
a volunteer firefighter who receives an involuntary lump sum 
distribution of his pension or retirement benefits, the maximum 
amount of this subtraction shall be $11,000; this subtraction 
shall not be reduced by the amount of the individual's federal 
adjusted gross income in excess of $17,000; 
    (7) To the extent included in the taxpayer's federal 
adjusted gross income for the taxable year, gain recognized upon 
a transfer of property to the spouse or former spouse of the 
taxpayer in exchange for the release of the spouse's marital 
rights;  
    (8) The amount of any distribution from a qualified pension 
or profit sharing plan included in federal adjusted gross income 
in the year of receipt to the extent of any contribution not 
previously allowed as a deduction by reason of a change in 
federal law which was not adopted by Minnesota law for a taxable 
year beginning in 1974 or later; 
    (9) Interest, including payment adjustment to the extent 
that it is applied to interest, earned by the seller of the 
property on a family farm security loan executed before January 
1, 1986 that is guaranteed by the commissioner of agriculture as 
provided in sections 41.51 to 41.60; 
    (10) The first $3,000 of compensation for personal services 
in the armed forces of the United States or the United Nations, 
and the next $2,000 of compensation for personal services in the 
armed forces of the United States or the United Nations wholly 
performed outside the state of Minnesota.  This modification 
does not apply to compensation defined in subdivision 20b, 
clause (6); 
    (11) The amount of any income earned for personal services 
rendered outside of Minnesota prior to the date when the 
taxpayer became a resident of Minnesota.  This modification does 
not apply to compensation defined in subdivision 20b, clause (6);
    (12) In the case of wages or salaries paid or incurred on 
or after January 1, 1977, the amount of any credit for 
employment of certain new employees under sections 44B and 51 to 
53 of the Internal Revenue Code of 1954 which is claimed as a 
credit against the taxpayer's federal tax liability, but only to 
the extent that the credit is connected with or allocable 
against the production or receipt of income included in the 
measure of the tax imposed by this chapter; 
    (13) In the case of work incentive program expenses paid or 
incurred on or after January 1, 1979, the amount of any credit 
for expenses of work incentive programs under sections 40, 50A 
and 50B of the Internal Revenue Code of 1954 which is claimed as 
a credit against the taxpayer's federal tax liability, but only 
to the extent that the credit is connected with or allocable 
against the production or receipt of income included in the 
measure of the tax imposed by this chapter;  
    (14) (12) Unemployment compensation to the extent 
includible in gross income for federal income tax purposes under 
section 85 of the Internal Revenue Code of 1954; 
    (15) (13) For an estate or trust, the amount of any income 
or gain which is not assignable to Minnesota under the 
provisions of section 290.17;  
    (16) (14) Interest earned on a contract for deed entered 
into for the sale of property for agricultural use if the rate 
of interest set in the contract is no more than nine percent per 
year for the duration of the term of the contract.  This 
exclusion shall be available only if (1) the purchaser is an 
individual who, together with his spouse and dependents, has a 
total net worth valued at less than $150,000 and (2) the 
property sold under the contract is farm land as defined in 
section 41.52, subdivision 6 of no more than 1,000 acres that 
the purchaser intends to use for agricultural purposes.  
Compliance with these requirements shall be stated in an 
affidavit to be filed with the first income tax return on which 
the taxpayer claims the exclusion provided in this clause.  Upon 
request accompanied by the information necessary to make the 
determination, the commissioner shall determine whether interest 
to be paid on a proposed transaction will qualify for this 
exclusion; the determination shall be provided within 30 days of 
receipt of the request, unless the commissioner finds it 
necessary to obtain additional information, or verification of 
the information provided, in which case the determination shall 
be provided within 30 days of receipt of the final item of 
information or verification.  The exclusion provided in this 
clause shall apply to interest earned on contracts for deed 
entered into after December 31, 1981 and before July 1, 1983; 
    (17) (15) Income from the business of mining as defined in 
section 290.05, subdivision 1, clause (a) which is not subject 
to the Minnesota income tax;  
    (18) (16) To the extent included in federal adjusted gross 
income, distributions from a qualified governmental pension plan 
which represent a return of designated employee contributions to 
the plan and which contributions were included in gross income 
pursuant to subdivision 20a, clause (20) (18).  The provisions 
of this clause shall apply before the provisions of clause (6) 
apply and an amount subtracted under this clause may not be 
subtracted under clause (6); and 
    (19) (17) To the extent included in federal adjusted gross 
income, distributions from an individual retirement account 
which represent a return of designated employee contributions if 
the contributions were included in gross income pursuant to 
subdivision 20a, clause (19) (17).  The distribution shall be 
allocated first to return of contributions included in gross 
income until the amount of the contributions has been exhausted. 
    Sec. 6.  Minnesota Statutes 1982, section 290.01, 
subdivision 20e, is amended to read: 
    Subd. 20e. [MODIFICATION IN COMPUTING TAXABLE INCOME OF THE 
ESTATE OF A DECEDENT.] Amounts allowable under section 291.07, 
subdivision 1, clause (2) in computing Minnesota inheritance or 
estate tax liability shall not be allowed as a deduction (or as 
an offset against the sales price of property in determining 
gain or loss) in computing the taxable income of the estate or 
any person unless there is filed within the time and in the 
manner and form prescribed by the commissioner a statement that 
the amounts have not been allowed as a deduction under section 
291.07 and a waiver of the right to have the amounts allowed at 
any time as deductions under section 291.07.  The provisions of 
this paragraph shall not apply with respect to deductions 
allowed under section 290.077 (relating to income in respect of 
decedents).  In the event that The election made for federal tax 
purposes under section 642(g) of the Internal Revenue Code of 
1954 differs from the election made under this paragraph 
appropriate modification of the estate's federal taxable income 
shall be made to implement the election made under this 
paragraph in accordance with regulations prescribed by the 
commissioner is binding for Minnesota tax purposes. 
    Sec. 7.  Minnesota Statutes 1983 Supplement, section 
290.01, subdivision 20f, is amended to read: 
    Subd. 20f.  [MODIFICATION FOR ACCELERATED COST RECOVERY 
SYSTEM.] A modification shall be made for the allowable 
deduction under the accelerated cost recovery system.  The 
allowable deduction for the accelerated cost recovery system as 
provided in section 168 of the Internal Revenue Code of 1954 
shall be the same amount as provided in that section for 
individuals, estates, and trusts with the following 
modifications:  
     (1) For property placed in service after December 31, 1980, 
and for taxable years beginning before January 1, 1982, 15 
percent of the allowance provided in section 168 of the Internal 
Revenue Code of 1954 shall not be allowed.  
     (2)(a) For taxable years beginning after December 31, 1981, 
and before January 1, 1983, for 15-year real property as defined 
in section 168 of the Internal Revenue Code of 1954, 40 percent 
of the allowance provided in section 168 of the Internal Revenue 
Code of 1954 shall not be allowed and for all other property, 17 
percent of the allowance shall not be allowed.  
     (b) For taxable years beginning after December 31, 1982, 
and with respect to property placed in service in taxable years 
beginning before January 1, 1983, for 15-year real property as 
defined in section 168 of the Internal Revenue Code of 1954, 40 
percent of the allowance provided in section 168 of the Internal 
Revenue Code of 1954 shall not be allowed and for all other 
property 20 percent of the allowance shall not be allowed.  
    (3) For property placed in service in taxable years 
beginning after December 31, 1982, the allowable deduction shall 
be the amount provided by section 168 of the Internal Revenue 
Code of 1954.  
    (4) For property placed in service after December 31, 1980, 
for which the taxpayer elects to use the straight line method 
provided in section 168(b)(3) or a method provided in section 
168(e)(2) of the Internal Revenue Code of 1954, the 
modifications provided in clauses (1) and (2) do not apply.  
    (5) For property subject to the modifications contained in 
clause (1) or (2) above or subject to a reduction in basis 
pursuant to section 48(q) of the Internal Revenue Code of 1954, 
the following modification shall be made after the entire amount 
of the allowable deduction for that property under the provision 
of section 168 of the Internal Revenue Code of 1954 has been 
obtained.  The remaining depreciable basis in those assets for 
Minnesota purposes shall be a depreciation allowance computed by 
using the straight line method over the following number of 
years:  
    (a) 3 year property - 1 year.  
    (b) 5 year property - 2 years.  
    (c) 10 year property - 5 years.  
    (d) All 15 year property - 7 years.  
    (6) The basis of property to which section 168 of the 
Internal Revenue Code of 1954 applies shall be its basis as 
provided in this chapter and including the modifications 
provided in this subdivision.  The recapture tax provisions 
provided in sections 1245 and 1250 of the Internal Revenue Code 
of 1954 shall apply but shall be calculated using the basis 
provided in the preceding sentence.  When an asset is exchanged 
for another asset including an involuntary conversion and under 
the provision of the Internal Revenue Code of 1954 gain is not 
recognized in whole or in part on the exchange of the first 
asset, the basis of the second asset shall be the same as its 
federal basis provided that the difference in basis due to 
clause (1) or (2) can be written off as provided in clause (5).  
    (7) The modifications provided in this subdivision shall 
apply before applying any limitation to out-of-state losses 
contained in section 290.17 or farm losses contained in section 
290.09, subdivision 29.  
    (8) The first taxable year after the entire amount of the 
allowable deduction for that property under the provisions of 
section 168 of the Internal Revenue Code of 1954 has been 
obtained, or where the straight line method provided in section 
168(b)(3) is used, the last taxable year in which an amount of 
allowable depreciation for that property under section 168 is 
obtained, the remaining depreciable basis in those assets for 
Minnesota purposes that is allowable under clause (5) shall 
include the amount of any attributable to the basis reduction 
made for federal purposes under section 48(q) of the Internal 
Revenue Code of 1954 to reflect the investment tax credit shall 
be allowed as a deduction.  No amount shall be allowed as a 
deduction under section 196 of the Internal Revenue Code of 1954.
    Sec. 8.  Minnesota Statutes 1982, section 290.05, 
subdivision 4, is amended to read: 
    Subd. 4.  (a) Corporations, individuals, estates, trusts or 
organizations claiming exemption under the provisions of 
subdivision 2 shall furnish information as to their exempt 
status under the Internal Revenue Code.  
    (b) Such corporations, individuals, estates, trusts, and 
organizations shall file with the commissioner of revenue a copy 
of any annual report that is required to be filed with the 
Internal Revenue Service, no later than ten days after filing 
the same with the Internal Revenue Service.  Any annual report 
required of a pension plan under sections 6057 to 6059 of the 
Internal Revenue Code of 1954, does not need to be filed with 
the commissioner.  
    Any person required to file a copy of a federal return 
pursuant to the preceding paragraph who wilfully fails to file 
such return shall be guilty of a misdemeanor.  
    (c) In the event that the Internal Revenue Service revokes, 
cancels or suspends, in whole or part, the exempt status of any 
corporation, individual, estate, trust or organization referred 
to in clause (a), or if the amount of gross income, deductions, 
credits, items of tax preference or taxable income is changed or 
corrected by either the taxpayer or the Internal Revenue 
Service, or if the taxpayer consents to any extension of time 
for assessment of federal income taxes such corporation, 
individual, estate, trust or organization shall notify the 
commissioner in writing of such action within 90 days thereafter.
    (d) The periods of limitations contained in section 290.56 
shall apply whenever there has been any action referred to in 
clause (c), notwithstanding any period of limitations to the 
contrary.  
    Sec. 9.  Minnesota Statutes 1983 Supplement, section 
290.06, subdivision 2c, is amended to read: 
    Subd. 2c.  [SCHEDULE OF RATES FOR INDIVIDUALS, ESTATES AND 
TRUSTS.] (a) The income taxes imposed by this chapter upon 
individuals, estates and trusts, other than those taxable as 
corporations, shall be computed by applying to their taxable net 
income the following schedule of rates: 
    (1) On the first $500, one and six-tenths percent; 
    (2) On the second $500, two and two-tenths percent; 
    (3) On the next $1,000, three and five-tenths percent; 
    (4) On the next $1,000, five and eight-tenths percent; 
    (5) On the next $1,000, seven and three-tenths percent; 
    (6) On the next $1,000, eight and eight-tenths percent; 
    (7) On the next $2,000, ten and two-tenths percent; 
    (8) On the next $2,000, eleven and five-tenths percent; 
    (9) On the next $3,500, twelve and eight-tenths percent; 
    (10) On all over $12,500, and not over $20,000, fourteen 
percent; 
    (11) On all over $20,000 and not over $27,500, fifteen 
percent; 
    (12) On all over $27,500, sixteen percent. 
    (b) In lieu of a tax computed according to the rates set 
forth in clause (a) of this subdivision, the tax of any 
individual taxpayer whose taxable net income for the taxable 
year is less than $40,000 shall 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. 
    (c) An individual who is not a Minnesota resident for the 
entire year must compute his Minnesota income tax as provided in 
clause (a).  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 gross 
income, computed as if the provisions of section 290.17, 
subdivision 2, or 290.171 applied; and 
    (2) the denominator is the individual's federal adjusted 
gross income.  
    Sec. 10.  Minnesota Statutes 1983 Supplement, section 
290.06, subdivision 3d, is amended to read: 
    Subd. 3d.  [LOW INCOME ALTERNATIVE TAX CREDIT.] A claimant 
as defined in section 290.012 may must pay a the tax computed 
under this subdivision in lieu of the tax computed under 
subdivision 2c as reduced by this credit and by any 
nonrefundable credits provided in this chapter without the 
provisions of section 290.012 and this subdivision:.  
   (1) The alternative tax shall be zero credit provided in 
this subdivision equals the tax liability for the following 
claimants:  
    (a) An unmarried claimant with an income of $5,800 or less; 
    (b) A claimant with one dependent, with an income of $7,400 
or less;  
    (c) A claimant with two dependents, with an income of 
$8,800 or less;  
    (d) A claimant with three dependents, with an income of 
$10,000 or less;  
    (e) A claimant with four dependents, with an income of 
$10,500 or less; and 
    (f) A claimant with five or more dependents, with an income 
of $11,000 or less.  
    (2) In the case of a claimant with an income in excess of 
that set forth in the appropriate category of clause (1), he may 
pay a tax equal to 15 percent of that portion of his income that 
is in excess of the amount set forth in the appropriate category 
of clause (1), or his tax obligation as it would have been in 
the absence of section 290.012 and this subdivision, whichever 
is less.  
    (3) The total income for the entire calendar year of the 
claimant and his spouse, if any, including income not assignable 
to this state, shall be the figure employed for the purposes of 
this subdivision.  No individual dependent upon and receiving 
his chief support from any other individual may be a claimant 
under section 290.012 and this subdivision.  The commissioner of 
revenue shall prescribe the additional forms or alterations in 
existing forms as necessary to comply with the provisions of 
section 290.012 and this subdivision.  All claimants shall 
submit their returns on these forms.  
    The commissioner of revenue shall provide alternative tax 
tables. 
    Sec. 11.  Minnesota Statutes 1982, section 290.06, 
subdivision 3e, is amended to read: 
    Subd. 3e.  [HOMEMAKER CREDIT.] A credit of $50 may be 
deducted from the tax due from the taxpayer and his spouse, if 
any, under this chapter if either the taxpayer or his spouse 
devotes his time to caring for his children and their home and 
is not employed outside of the home.  A taxpayer would qualify 
for the credit if 
    (a) he has a child who is twelve years of age or younger 
under the age of 15 residing in his home at any time during the 
taxable year; 
    (b) either the taxpayer or his spouse remains unemployed 
throughout the taxable year for the purpose of caring for the 
child in the home; and 
    (c) the combined federal adjusted gross income, plus the 
ordinary income portion of a lump sum distribution as defined in 
section 402(e) of the Internal Revenue Code of 1954, as amended 
through December 31, 1981, of the taxpayer and his spouse is not 
in excess of $25,000. 
    A married claimant shall file his income tax return for the 
year for which he claims the credit either jointly or separately 
on one form with his spouse.  In the case of the married 
claimant, only one spouse may claim the credit. 
    A taxpayer and his spouse, if any, may not claim this 
credit if they claim the dependent care credit provided in 
section 290.067.  
    Sec. 12.  Minnesota Statutes 1982, section 290.06, 
subdivision 3f, is amended to read: 
    Subd. 3f.  [CREDITS AGAINST TAX.] Subject to the provisions 
of subdivision 3g the taxes due under the computation in 
accordance with this section shall be credited with the 
following amounts: 
    (1) In the case of an unmarried individual and in the case 
of the estate of a decedent, $60, and in the case of a trust, $5 
$68; 
    (2) In the case of a married individual, $120 $136.  If the 
spouses file separate, combined or joint returns the personal 
credits may be taken by either or divided between them; 
    (3) In the case of an individual, $60 $68 for each person 
(other than a spouse) dependent upon and receiving his chief 
support from the taxpayer. One taxpayer only shall be allowed 
this credit with respect to any given dependent.  A payment to a 
divorced or separated spouse, other than a payment for support 
of minor children under a temporary order or final decree of 
dissolution or legal separation, shall not be considered a 
payment by the other spouse for the support of any dependent. 
    (4) (a) In the case of an unmarried individual who has 
attained the age of 65 before the close of his taxable year, an 
additional $60 $68; 
    (b) In the case of an unmarried individual who is blind at 
the close of the taxable year, an additional $60 $68; 
    (c) In the case of a married individual, an additional $60 
$68 for each spouse who has attained the age of 65 before the 
close of the individual's taxable year, and an additional $60 
$68 for each spouse who is blind at the close of the 
individual's taxable year.  If the spouses file separate, 
combined or joint returns, these credits may be taken by either 
or divided between them; 
    (d) In the case of an individual, another $60 $68 for each 
person, other than a spouse, who is blind and dependent upon and 
receiving his chief support from the taxpayer; 
    (e) For the purposes of subparagraphs (b), (c) and (d) of 
paragraph (4), an individual is blind if his central visual 
acuity does not exceed 20/200 in the better eye with correcting 
lenses, or if his visual acuity is greater than 20/200 but is 
accompanied by a limitation in the fields of vision such that 
the widest diameter of the visual field subtends an angle no 
greater than 20 degrees. 
    (f) In the case of an unmarried individual who is deaf at 
the close of the taxable year, an additional $60 $68. 
    (g) In the case of a married individual, an additional $60 
$68 for each spouse who is deaf at the close of the taxable year.
If the spouses file separate, combined or joint returns, these 
credits may be taken by either or divided between them. 
    (h) In the case of an individual, an additional $60 $68 for 
each person (other than a spouse) who is deaf and dependent upon 
and receiving his chief support from the taxpayer. 
    (i) For the purposes of subparagraphs (f), (g) and (h) of 
paragraph (4), an individual is deaf if the average loss in the 
speech frequencies (500-2000 Hertz) in the better ear, unaided, 
is 92 decibels, American National Standards Institute, or worse. 
    (5) (a) In the case of an unmarried individual who is a 
quadriplegic at the close of the taxable year, an additional $60 
$68; 
    (b) In the case of a married individual, an additional $60 
$68 for each spouse who is a quadriplegic at the close of the 
taxable year.  If the spouses file separate, combined or joint 
returns, these credits may be taken by either or divided between 
them; 
    (c) In the case of an individual, another $60 $68 for each 
person, other than a spouse, who is quadriplegic and dependent 
upon and receiving his chief support from the taxpayer; and 
    (d) For the purposes of subparagraphs (a), (b) and (c) of 
paragraph 5, "quadriplegic" means an individual who has a 
congenital or traumatic partial or total loss of all four limbs 
or who has a disability that substantially impairs the 
functioning of all four limbs. 
    (6) In the case of an insurance company, it shall receive a 
credit on the tax computed as above equal in amount to any taxes 
based on premiums paid by it during the period for which the tax 
under this chapter is imposed by virtue of any law of this 
state, other than the surcharge on premiums imposed by sections 
69.54 to 69.56. 
    (7) In the case of a nonresident individual, credits under 
paragraphs 1, 2, 3, 4 and 5 shall be apportioned in the 
proportion of the gross income from sources in Minnesota to the 
gross income from all sources, and in any event a minimum credit 
of $5 shall be allowed.  
    Sec. 13.  Minnesota Statutes 1983 Supplement, section 
290.06, subdivision 13, is amended to read: 
    Subd. 13.  [GASOLINE AND SPECIAL FUEL TAX REFUND.] Subject 
to the provisions of section 296.18, a credit equal to the 
amount paid by the taxpayer person during the taxable year as 
Minnesota excise tax on gasoline bought and used for any a 
qualifying purpose other than use in motor vehicles, 
snowmobiles, or motorboats, or on special fuel bought and used 
for any a qualifying purpose other than use in licensed motor 
vehicles may be deducted from any tax due under this chapter.  
Any amount by which the credit exceeds the tax due shall be 
refunded.  Gasoline or special fuel bought and used for "a 
qualifying purpose" means:  
    (1) Gasoline or special fuel used in carrying on a trade or 
business, used on a farm situated in Minnesota, and used for a 
farming purpose.  "Farm" and "farming purpose" have the meanings 
given them in section 6420(c)(2), (3), and (4) of the Internal 
Revenue Code of 1954, as amended through December 31, 1983.  
    (2) Gasoline or special fuel used for off-highway business 
use.  "Off-highway business use" means any use by a person in 
that person's trade, business, or activity for the production of 
income.  "Off-highway business use" does not include use as a 
fuel in a motor vehicle which, at the time of use, is registered 
or is required to be registered for highway use under the laws 
of any state or foreign country.  
    Sec. 14.  Minnesota Statutes 1983 Supplement, section 
290.06, subdivision 14, is amended to read: 
    Subd. 14.  [RESIDENTIAL ENERGY CREDIT.] A credit of 20 
percent of the first $10,000 of renewable energy source 
expenditures, including the expenditures described in clauses 
(a), (b) and (d) if made by an individual taxpayer on a 
Minnesota building of six dwelling units or less and 
expenditures for biomass conversion equipment described in 
clause (c), may be deducted from the tax due under this chapter 
for the taxable year in which the expenditures were made.  For 
purposes of this subdivision, the term "building" shall include 
a condominium or townhouse used by the taxpayer as a residence.  
In the case of qualifying expenditures incurred in connection 
with a building under construction by a contractor, the credit 
shall be deducted from the tax liability of the first individual 
to purchase the building for use as a principal residence or for 
residential rental purposes; the contractor shall not be 
eligible for the credit given pursuant to this subdivision for 
that expenditure. 
    A "renewable energy source expenditure" which qualifies 
shall include: 
    (a) Expenditures which qualify for the federal renewable 
energy source credit, pursuant to Section 44C of the Internal 
Revenue Code of 1954, as amended through December 31, 1981, and 
any regulations promulgated pursuant thereto, provided that, 
after December 31, 1980, any solar collector included in the 
claimed expenditure is certified by the commissioner of energy, 
planning and development.  A solar collector is a device 
designed to absorb incident solar radiation, convert it to 
thermal energy, and transfer the thermal energy to a fluid 
passing through or in contact with the device.  "Solar 
collector" shall not include passive solar energy systems as 
defined in clause (d); 
      (b) Expenditures for earth sheltered dwelling units.  For 
purposes of this credit, an "earth sheltered dwelling unit" 
shall mean a structure which complies with applicable building 
standards and which is constructed so that: 
      (1) 80 percent or more of the roof area is covered with a 
minimum depth of 12 inches of earth; and 
      (2) 50 percent or more of the wall area is covered with a 
minimum depth of 12 inches of earth; and 
      (3) Those portions of the structure not insulated with a 
minimum of seven feet of earth shall have additional insulation; 
      (c) Expenditures for biomass conversion equipment located 
in Minnesota which produces ethanol, methane or methanol for use 
as a gaseous or as a liquid fuel which is not offered for sale; 
and 
      (d) Expenditures for passive solar energy systems.  For 
purposes of this credit, a "passive solar energy system" is 
defined to include systems which utilize elements of the 
building and its operable components to heat or cool a building 
with the sun's energy by means of conduction, convection, 
radiation, or evaporation.  A passive system shall include: 
      (1) Collection aperture, including glazing installed in 
south facing walls and roofs; and 
      (2) Storage element, including thermal mass in the form of 
water, masonry, rock, concrete, or other mediums which is 
designed to store heat collected from solar radiation. 
      A passive system may include either or both: 
      (1) Control and distribution element, including fans, 
louvers, and air ducts; or 
      (2) Retention element, including movable insulation used to 
minimize heat loss caused by nocturnal radiation through areas 
used for direct solar heat gain during daylight hours. 
      Eligible passive expenditures shall be for equipment, 
materials or devices that are an integral part of the components 
listed above and essential to the functioning of a passive 
design which qualifies pursuant to rules adopted by the 
commissioner of revenue in cooperation with the commissioner of 
energy, planning and development.  Expenditures for equipment, 
materials, or devices which are a part of the normal heating, 
cooling, or insulation system of a building are not eligible for 
the credit. 
      If a credit was allowed to a taxpayer under this 
subdivision for any prior taxable year, the dollar amount of the 
maximum expenditure for which a taxpayer may qualify for a 
credit under this subdivision in subsequent years shall be 
$10,000 reduced by the amount of expenditures which a credit was 
claimed pursuant to this subdivision in prior years.  A taxpayer 
shall never be allowed to claim more than $10,000 of 
expenditures during the duration of the renewable energy credit. 
      The credit provided in this subdivision shall not be 
allowed in a taxable year if the amount of the credit would be 
less than $10. 
    If the credit allowable under this subdivision exceeds the 
amount of tax due in a taxable year, the excess credit shall not 
be refunded but may be carried forward to the succeeding taxable 
year and added to the credit allowable for that year.  No amount 
may be carried forward to a taxable year beginning after 
December 31, 1987. 
    The credit provided in this subdivision may not be claimed 
by a corporate taxpayer, except that a shareholder in a family 
farm corporation and each partner in a partnership operating a 
family farm shall be eligible for the credit provided by this 
subdivision in the same manner and to the same extent allowed a 
joint owner of property under section 44C (d) of the Internal 
Revenue Code of 1954, as amended through December 31, 1981.  
"Family farm corporation" and "family farm" have the meanings 
given in section 500.24. 
    The credit provided in this subdivision is subject to the 
provisions of Section 44C, (c) (7) and (10), and (d) (1) to (3), 
of the Internal Revenue Code of 1954, as amended through 
December 31, 1981, and any regulations promulgated pursuant 
thereto. 
    The commissioner of revenue in cooperation with the 
commissioner of energy, planning and development shall adopt 
rules establishing additional qualifications and definitions for 
the credits provided in this subdivision. 
    Notwithstanding section 290.61, the commissioner of revenue 
may request the commissioner of energy, planning and development 
to assist in the review and auditing of the information 
furnished by the taxpayer for purposes of claiming this credit.  
The provisions of section 290.61 shall apply to employees of the 
department of energy, planning and development who receive 
information furnished by a taxpayer for purposes of claiming 
this credit. 
      The commissioner of energy, planning and development shall 
adopt rules establishing the criteria for certification of solar 
collectors as required by clause (a).  The criteria shall: 
      (1) Specify the testing procedures to be used in the 
evaluation of solar collectors; 
    (2) Establish minimum levels of collector quality for 
safety; 
    (3) Provide a means to determine the maintainability and 
structural integrity of solar collectors; 
    (4) Establish a system for evaluating and rating the 
thermal performance of solar collectors; 
    (5) Specify the procedures to follow to obtain 
certification of a solar collector; 
    (6) Conform to the maximum extent practicable to the solar 
collector certification requirements of other states which have 
adopted certification procedures; and 
    (7) Allow for individual variation so as not to hamper the 
development of innovative solar collectors. 
    The commissioner of energy, planning and development may 
adopt temporary rules pursuant to sections 14.29 to 14.36 to 
establish this certification procedure. 
    This subdivision is effective for expenditures made during 
taxable years beginning after December 31, 1978 and before 
January 1, 1986. 
    Sec. 15.  Minnesota Statutes 1983 Supplement, section 
290.067, subdivision 1, is amended to read: 
    Subdivision 1.  [AMOUNT OF CREDIT.] A taxpayer may take as 
a credit against the tax due from him and his spouse, if any, 
under this chapter an amount equal to the dependent care credit 
for which he is eligible pursuant to the provisions of section 
44A of the Internal Revenue Code of 1954, as amended through 
December 31, 1982, except that the applicable percentage of the 
employment-related expenses shall be 20 percent and 1983, 
subject to the other limitations provided in subdivision 2. 
    Sec. 16.  Minnesota Statutes 1983 Supplement, section 
290.067, subdivision 2, is amended to read: 
    Subd. 2.  [LIMITATIONS.] The credit for expenses incurred 
for the care of each dependent shall not exceed $720 in any 
taxable year, and the total credit for all dependents of a 
claimant shall not exceed $1,440 in a taxable year.  The total 
credit shall be reduced according to the amount of the combined 
federal adjusted gross income, plus the ordinary income portion 
of any lump sum distribution under section 402(e) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1982 1983, of the claimant and his spouse, if any, as follows:  
    income up to $10,000, $720 maximum for one dependent, 
$1,440 for all dependents;  
    income of $10,001 to $11,000, $670 $660 maximum for one 
dependent, $1,340 $1,320 for all dependents;  
    income of $11,001 to $12,000, $620 maximum for one 
dependent, $1,240 for all dependents;  
    income of $12,001 to $13,000, $570 maximum for one 
dependent, $1,140 for all dependents;  
    income of $13,001 to $15,000, $520 maximum for one 
dependent, $1,040 for all dependents;  
    income of $15,001 to $22,000, $400 maximum for one 
dependent, $800 for all dependents, reduced by five percent of 
the amount by which the income exceeds $15,000, plus $70;  
    income of $22,001 to $23,000, $70 for one dependent, $140 
for all dependents;  
    income of $23,001 to $24,000, $20 for one dependent, $40 
for all dependents;  
    income over $11,000, the maximum credit for one dependent 
shall be reduced by $10 for every $200 of additional income, $20 
for all dependents;  
    $24,001 and over, no credit.  
    A married claimant shall file his income tax return for the 
year for which he claims the credit either jointly or separately 
on one form with his spouse.  In the case of a married claimant 
only one spouse may claim the credit. 
    The commissioner shall construct and make available to 
taxpayers tables showing the amount of the credit at various 
levels of income and expenses.  The tables shall follow the 
schedule contained in this subdivision, except that the 
commissioner may graduate the transitions between expenses and 
income brackets.  
    Sec. 17.  Minnesota Statutes 1983 Supplement, section 
290.089, subdivision 2, is amended to read: 
    Subd. 2.  [ITEMIZED DEDUCTIONS.] Subject to the provisions 
of section 290.18, subdivision 1, An amount equal to the amount 
determined pursuant to section 63(f) of the Internal Revenue 
Code is allowed with the following adjustments:  
    (a) Add the amount paid to others not to exceed $500 for 
each dependent in grades K to 6 and $700 for each dependent in 
grades 7 to 12, for tuition, textbooks, and transportation of 
each dependent in attending an elementary or secondary school 
situated in Minnesota, North Dakota, South Dakota, Iowa, or 
Wisconsin, wherein a resident of this state may legally fulfill 
the state's compulsory attendance laws, which is not operated 
for profit, and which adheres to the provisions of the Civil 
Rights Act of 1964 and chapter 363.  As used in this clause, 
"textbooks" includes books and other instructional materials and 
equipment used in elementary and secondary schools in teaching 
only those subjects legally and commonly taught in public 
elementary and secondary schools in this state.  "Textbooks" 
does not include instructional books and materials used in the 
teaching of religious tenets, doctrines, or worship, the purpose 
of which is to instill such tenets, doctrines, or worship, nor 
does it include books or materials for, or transportation to, 
extracurricular activities including sporting events, musical or 
dramatic events, speech activities, driver's education, or 
similar programs;  
    (b) Add the amount of Minnesota and other states' estate or 
inheritance taxes which were allowed as a deduction under 
section 290.077, subdivision 4, on income in respect of a 
decedent;  
    (c) Add the amount by which the deduction for the taxable 
year allowed pursuant to subdivision 4 exceeds the amount 
determined pursuant to section 222 of the Internal Revenue Code; 
    (d) Subtract income taxes paid or accrued within the 
taxable year under this chapter;  
    (e) Subtract income taxes paid to any other state or to any 
province or territory of Canada if a credit is allowed for the 
taxes under section 290.081;  
    (f) If the deduction computed under section 164 of the 
Internal Revenue Code is not reduced by the amount of the credit 
or refund allowed under chapter 290A, subtract that amount;  
    (g) Subtract the amount of interest on investment 
indebtedness paid or accrued in a taxable year beginning before 
January 1, 1981, which has been carried forward and is allowed 
as a deduction in the taxable year under section 163(d) of the 
Internal Revenue Code;  
    (h) Subtract the amount of charitable contributions 
deducted under section 170 of the Internal Revenue Code that (i) 
exceeds the following limitations:  (A) an overall limit of 30 
percent of the taxpayer's Minnesota gross income which, for 
purposes of this paragraph, shall include the ordinary income 
portion of a lump sum distribution as defined in section 402(e) 
of the Internal Revenue Code; and (B) the aggregate of 
contributions to organizations described in section 290.21, 
subdivision 3, clause (c) shall not exceed 20 percent of the 
taxpayer's Minnesota gross income; or (ii) was deducted as a 
carryover under section 170(d) of the Internal Revenue Code.  
    Sec. 18.  Minnesota Statutes 1983 Supplement, section 
290.089, subdivision 3, is amended to read:  
    Subd. 3.  [STANDARD DEDUCTION.] In lieu of the deductions 
provided in subdivision 2, an individual may claim or be allowed 
a standard deduction as follows:  
    (a) Subject to modification pursuant to clause (b), the 
standard deduction shall be an amount equal to ten percent of 
the adjusted gross income of the taxpayer, up to a maximum 
deduction of $2,250 $2,268.  
    In the case of a husband and wife, the standard deduction 
shall not be allowed to either if the net income of one of the 
spouses is determined without regard to the standard deduction.  
    (b) The maximum amount of the standard deduction shall be 
adjusted for inflation in the same manner as provided in section 
290.06, subdivision 2d, for the expansion of the taxable net 
income brackets.  The commissioner shall then round the maximum 
amount of the standard deduction to the nearest hundred dollar 
amount.  When adjusting the maximum amount of standard deduction 
for inflation, the commissioner shall use the actual dollar 
amount of the maximum amount of the standard deduction prior to 
rounding the dollar amounts.  
    (c) The commissioner of revenue may establish a standard 
deduction tax table incorporating the rates set forth in section 
290.06, subdivision 2c, and the standard deduction.  The tax of 
any individual taxpayer whose adjusted gross income is less than 
$20,000 shall, if an election is made not to itemize nonbusiness 
deductions, be computed in accordance with tables prepared and 
issued by the commissioner of revenue.  The tables shall be 
prepared to reflect the allowance of the standard deduction and 
the personal and dependent credits.  
    Sec. 19.  Minnesota Statutes 1983 Supplement, section 
290.09, subdivision 29, is amended to read: 
    Subd. 29.  [DEDUCTIONS ATTRIBUTABLE TO FARMING.] (a) 
[DEFINITIONS.] For purposes of this subdivision, income and 
gains and expenses and losses shall be considered as "arising 
from a farm" if such items are received or incurred in 
connection with cultivating the soil, or in connection with 
raising or harvesting any agricultural or horticultural 
commodity, including the raising, shearing, feeding, caring for, 
training, and management of livestock, including horses for 
horse racing, bees, poultry, and fur-bearing animals and 
wildlife, and all operations incident thereto, including but not 
limited to the common use of "hedging." 
    (b) [DEDUCTIONS LIMITED.] Except as provided in this 
subdivision, expenses and losses, except for interest and taxes, 
arising from a farm shall not be allowed as deductions in excess 
of income and gains arising from a farm. 
    (c) [DEDUCTIONS ALLOWED; CARRYOVER DEDUCTIONS.] Expenses 
and losses arising from a farm or farms shall be allowed as 
deductions up to the amount of the income and gains arising from 
a farm or farms in any taxable year, plus the first $30,000 of 
nonfarm gross income, or nonfarm taxable net income in the case 
of a corporation, provided however that in any case where 
nonfarm income exceeds $30,000, the maximum allowable amount of 
$30,000 shall be reduced by an amount equal to the nonfarm 
income in excess of $30,000 multiplied by three.  For this 
purpose and for the purpose of applying the limitation in the 
following paragraph regarding the application of any carryback 
or carryforward, the term gross income shall include the 
ordinary income portion of a lump sum distribution as defined in 
section 402(e) of the Internal Revenue Code of 1954, as amended 
through December 31, 1981, and no deduction shall be allowed for 
two-earner married couples as provided in section 221 of the 
Internal Revenue Code of 1954, as amended through December 31, 
1981.  Any remaining balance of the deductions shall be carried 
back three years and carried forward five years, in 
chronological order, provided, however, that in any case in 
which any individual, estate or trust which elects a net 
operating loss carryforward under section 172(b)(3)(C) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1981, such losses shall not be carried back but shall only be 
carried forward. 
     Current expenses and losses shall be utilized as deductions 
in any taxable year, to the extent herein allowable, prior to 
the application of any carryback or carryover deductions.  In 
any event, the combined amounts of such current expenses and 
losses and carryback or carryover deductions shall be allowed as 
deductions up to the amount of the income and gains arising from 
a farm or farms in any taxable year, plus the first $30,000 of 
nonfarm gross income, or nonfarm taxable net income in the case 
of a corporation, provided however that in any case where 
nonfarm income exceeds $30,000, the maximum allowable amount of 
$30,000 shall be reduced by an amount equal to the nonfarm 
income in excess of $30,000 multiplied by three. 
     (d) [SHAREHOLDERS SEPARATE ENTITIES.] For purposes of this 
subdivision, individual shareholders of an S corporation shall 
be considered separate entities. 
    (e) [SPECIAL PERIOD OF LIMITATION WITH RESPECT TO FARM LOSS 
LIMITATION CARRYBACKS.] For the purposes of sections 290.46 and 
290.50, if the claim for refund relates to an overpayment 
attributable to a farm loss limitation carryback under this 
subdivision, in lieu of the period of limitation prescribed in 
sections 290.46 and 290.50, the period of limitation shall be 
that period which ends with the expiration of the 15th day of 
the 46th month (or the 45th month, in the case of a corporation) 
following the end of the taxable year of the farm loss which 
results in the carryback.  During this extended period, married 
individuals who elected to file separate returns or a combined 
return may change their election and file a joint return. 
    (f) [INTEREST ON CLAIMS.] In any case in which a taxpayer 
is entitled to a refund in a carryback year due to the carryback 
of a farm loss, interest shall be computed only from the end of 
the taxable year in which the loss occurs.  
    (g) [ORDER OF APPLICATION.] The application of this 
subdivision shall be made after applying any limitation to out 
of state losses contained in section 290.17.  
    Sec. 20.  Minnesota Statutes 1983 Supplement, section 
290.091, is amended to read:  
    290.091 [MINIMUM TAX ON PREFERENCE ITEMS.] 
    In addition to all other taxes imposed by this chapter 
there is hereby imposed, on individuals, estates, and trusts a 
tax which, in the case of a resident individual, shall be equal 
to 40 percent of the amount of the taxpayer's alternative 
minimum tax liability for tax preference items pursuant to the 
provisions of sections 55 to, 57, 58 and 443(d) of the Internal 
Revenue Code of 1954 as amended through January 15 December 31, 
1983.  For purposes of the tax imposed by this section, the 
following modifications shall be made:  
    (1) Capital gain as defined in section 57(a) of the 
Internal Revenue Code shall not include that portion of any gain 
occasioned by sale, transfer or the granting of a perpetual 
easement pursuant to any eminent domain proceeding or threat 
thereof as described in section 290.13, subdivision 5.  This 
modification shall apply to the years in which the gain or 
reduction in loss is actually included in federal adjusted gross 
income even though amounts received pursuant to the eminent 
domain proceedings were received in prior years.  
    (2) In the case of a corporate taxpayer, percentage 
depletion shall not be a preference item.  
    (3) In the case of a corporate taxpayer, the capital gain 
preference item shall not include the timber preference income 
defined in section 57(e)(1) of the Internal Revenue Code.  
    (4) The preference item of reserves for losses on bad debts 
shall not include reserves allowable under section 593 of the 
Internal Revenue Code, but which are not allowable under section 
290.09, subdivision 6, clause (c).  
    (5) In the case of an individual, Alternative tax itemized 
deductions shall include the amount allowable as a deduction for 
the taxable year under section 164 of the Internal Revenue Code 
for Minnesota income tax paid or accrued.  
    (6) (2) The capital gain preference item shall be reduced 
where the gain would be modified because some or all of the 
assets have a higher basis for Minnesota purposes than for 
federal purposes.  
    (7) (3) In the case of a nonresident individual, or an 
estate or trust, with a net operating loss that is a larger 
amount for Minnesota than for federal, the capital gain 
preference item shall be reduced to the extent it was reduced in 
the allowance of the net operating loss.  
    (8) (4) Federal preference items from the business of 
mining or producing iron ore and other ores which are subject to 
the occupation tax and exempt from taxation under section 
290.05, subdivision 1, shall not be a preference item for 
Minnesota.  
    (5) The term "regular tax" as defined in section 55(f)(2) 
of the Internal Revenue Code shall be increased by the amount of 
the credit allowable under section 38 of the Internal Revenue 
Code and it shall be computed before the limitation on tax 
provided in section 1301 of the Internal Revenue Code.  
    (6) Federal preference items which arise from a farm shall 
not be a preference item to the extent they exceed the loss 
allowed under section 290.09, subdivision 29, other than 
interest and taxes.  
    (9) In the case of a corporate taxpayer, amortization of 
certified pollution control facilities, shall not be a 
preference item.  
    In the case of a resident individual, having preference 
items which could not be taken to reduce income from sources 
outside the state pursuant to section 290.17, subdivision 1, or 
any other taxpayer who is not a full year resident individual, 
or who is an estate or trust the tax shall equal 40 percent of 
that federal liability, multiplied by a fraction the numerator 
of which is the amount of the taxpayer's preference item income 
allocated to this state pursuant to the provisions of sections 
290.17 to 290.20, and the denominator of which is the taxpayer's 
total preference item income for federal purposes.  
    The tax benefit rule contained in section 58(h) of the 
Internal Revenue Code is applied to the Minnesota minimum tax 
only to the extent that it determines if there is a federal 
minimum tax.  No separate tax benefit rule is allowable for the 
Minnesota minimum tax.  
    For property placed in service after December 31, 1980, and 
in a taxable year beginning before January 1, 1983, the 
preference items contained in section 57 (a)(12) of the Internal 
Revenue Code of 1954, as amended through January 15 December 31, 
1983, shall not apply.  
    Sec. 21.  Minnesota Statutes 1982, section 290.095, 
subdivision 11, is amended to read: 
    Subd. 11.  [CARRYBACK OR CARRYOVER ADJUSTMENTS.] (a) For 
individuals the amount of a net operating loss that may be 
carried back or carried over shall be the same dollar amount 
allowable in the determination of federal adjusted gross 
income.  For estates and trusts the amount of a net operating 
loss that may be carried back or carried over shall be the same 
dollar amount allowable in the determination of federal taxable 
income. 
    (b) The following adjustments to the amount of the net 
operating loss that may be carried back or carried over must be 
made for: 
    (1) Nonassignable income or losses as required by section 
290.17, subdivision 2. 
    (2) Losses which constitute tax preference items as 
required in section 290.17, subdivision 1.  
    (3) Modifications required because of the restrictions on 
farm losses as provided in section 290.09, subdivision 29. 
    (4) (3) Adjustments to the determination of federal 
adjusted gross income that must be made because of changes in 
the Internal Revenue Code that have not yet been adopted by the 
legislature by updating the reference to the Internal Revenue 
Code contained in section 290.01, subdivision 20. 
    (5) (4) Modifications to income contained in federal 
adjusted gross income according to the provisions of section 
290.01, subdivision 20c. 
    (6) (5) Gains or losses which result from the sale or other 
disposition of property having a higher adjusted basis for 
Minnesota income tax purposes than for federal income tax 
purposes subject to the limitations contained in section 290.01, 
subdivision 20b, clauses (2) and (4). 
    (7) (6) Interest, taxes, and other expenses not allowed 
under section 290.10, clause (9) or section 290.101. 
    (8) (7) The modification for accelerated cost recovery 
system depreciation as provided in section 290.01, subdivision 
28 20f.  
    (c) (1) The net operating loss carryback or carryover 
applied as a deduction in the taxable year to which the net 
operating loss is carried back or carried over shall be equal to 
the net operating loss carryback or carryover applied in the 
taxable year in arriving at federal adjusted gross income (or 
federal taxable income for trusts and estates) subject to the 
modifications contained in clause (b) and to the following 
modifications: 
    (A) Increase the amount of carryback or carryover applied 
in the taxable year by the amount of losses and interest, taxes 
and other expenses not assignable or allowable to Minnesota 
incurred in the taxable year. 
    (B) Decrease the amount of carryback or carryover applied 
in the taxable year by the amount of income not assignable to 
Minnesota earned in the taxable year and the amount of federal 
jobs credit or WIN credit earned in the taxable year. 
    (C) A taxpayer who is not a resident of Minnesota during 
any part of the taxable year and who has no income assignable to 
Minnesota during the taxable year shall apply no net operating 
loss carryback or carryover in the taxable year. 
    (2) The provisions of section 172(b) of the Internal 
Revenue Code of 1954 as amended through December 31, 1981 
(relating to carrybacks and carryovers) shall apply.  The net 
operating loss carryback or carryover to the next consecutive 
taxable year shall be the net operating loss carryback or 
carryover as calculated in clause (c) (1) less the amount 
applied in the earlier taxable year(s).  No additional net 
operating loss carryback or carryover shall be allowed if the 
entire amount has been used to offset Minnesota income in a year 
earlier than was possible on the federal return.  A net 
operating loss carryback or carryover that was allowed to offset 
federal income in a year earlier than was possible on the 
Minnesota return shall still be allowed to offset Minnesota 
income but only if the loss was assignable to Minnesota in the 
year the loss occurred. 
    (d) A net operating loss shall be allowed to be carried 
back or carried forward only to the extent that loss was 
assignable to Minnesota in the year the loss occurred or in the 
year to which the loss was carried over, whichever would allow 
more of the loss to be allowed for Minnesota purposes. 
     (e) If a taxpayer has a net operating loss for federal 
purposes and the provisions of the farm loss limitation as 
provided in section 290.09, subdivision 29 apply, the 
limitations applying to the farm losses that are carried back or 
carried over are applied first and the net operating loss that 
is carried back or carried over is limited to the excess, if 
any, that the net operating loss exceeds the farm loss 
limitation. 
    Sec. 22.  Minnesota Statutes 1983 Supplement, section 
290.17, subdivision 1, is amended to read:  
    Subdivision 1.  [INCOME OF RESIDENT INDIVIDUALS.] The gross 
income of individuals during the period of time when they are 
residents of Minnesota shall be their gross income as defined in 
section 290.01, subdivision 20, except that the amount of 
otherwise deductible losses incurred in connection with income 
derived from sources outside the state shall be reduced by the 
sum of the taxpayer's items of tax preference as defined in 
section 57, as limited by section 58(i)(7) of the Internal 
Revenue Code of 1954, as amended through December 31, 1982, 
which are attributable to losses incurred in connection with 
sources of income outside the state. 
    Sec. 23.  Minnesota Statutes 1982, section 290.17, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [SUBSEQUENT ADJUSTMENT.] When a loss has been 
reduced by the amount of tax preference items pursuant to 
Minnesota Statutes 1983 Supplement, section 290.17, subdivision 
1, and the taxpayer subsequently sells or otherwise disposes of 
an asset in relation to which arose an item of tax preference 
which caused the reduction of the loss, the taxpayer may 
increase the basis of the asset by the amount of the tax 
preference item that was used to reduce the loss.  If the asset 
is a depletable asset, the taxpayer may elect to so increase its 
basis upon disposition or to reduce the amount of otherwise 
taxable income subsequently produced by that asset by the amount 
of the tax preference item.  
    Sec. 24.  Minnesota Statutes 1983 Supplement, section 
290.17, subdivision 2, is amended to read: 
    Subd. 2.  [OTHER TAXPAYERS.] In the case of an individual 
who is not a full year resident, this subdivision applies to 
determine what income is assignable to Minnesota for purposes of 
determining the numerator of the fraction used in section 
290.06, subdivision 2c.  In the case of taxpayers not subject to 
the provisions of subdivision 1, items of gross income shall be 
assigned to this state or other states or countries in 
accordance with the following principles: 
    (1) (a) The entire income of all resident or domestic 
taxpayers from compensation for labor or personal services, or 
from a business consisting principally of the performance of 
personal or professional services, shall be assigned to this 
state, and the income of nonresident taxpayers from such sources 
shall be assigned to this state if, and to the extent that, the 
labor or services are performed within it; all other income from 
such sources shall be treated as income from sources without 
this state.  
    (b) In the case of an individual who is a nonresident of 
Minnesota and who is an athlete or entertainer, income from 
compensation for labor or personal services performed within 
this state shall be determined in the following manner.  
    (i) The amount of income to be assigned to Minnesota for an 
individual who is a nonresident salaried athletic team employee 
shall be determined by using a fraction in which the denominator 
contains the total number of days in which the individual is 
under a duty to perform for the employer, and the numerator is 
the total number of those days spent in Minnesota.  In order to 
eliminate the need to file state or provincial income tax 
returns in several states or provinces, Minnesota will exclude 
from income any income assigned to Minnesota under the 
provisions of this clause for a nonresident athlete who is 
employed by an athletic team whose operations are not based in 
this state if the state or province in which the athletic team 
is based provides a similar income exclusion.  If the state or 
province in which the athletic team's operations are based does 
not have an income tax on an individual's personal service 
income, it will be deemed that that state or province has a 
similar income exclusion.  As used in the preceding sentence, 
the term "province" means a province of Canada.  
      (ii) The amount of income to be assigned to Minnesota for 
an individual who is a nonresident, and who is an athlete not 
listed in clause (i), or who is an entertainer, for that 
person's athletic or entertainment performance in Minnesota 
shall be determined by assigning to this state all income from 
performances or athletic contests in this state.  
     (2) Income from the operation of a farm shall be assigned 
to this state if the farm is located within this state and to 
other states only if the farm is not located in this state.  
Income from winnings on Minnesota pari-mutuel betting tickets 
shall be assigned to this state.  Income and gains received from 
tangible property not employed in the business of the recipient 
of such income or gains, and from tangible property employed in 
the business of such recipient if such business consists 
principally of the holding of such property and the collection 
of the income and gains therefrom, shall be assigned to this 
state if such property has a situs within it, and to other 
states only if it has no situs in this state.  Income or gains 
from intangible personal property not employed in the business 
of the recipient of such income or gains, and from intangible 
personal property employed in the business of such recipient if 
such business consists principally of the holding of such 
property and the collection of the income and gains therefrom, 
wherever held, whether in trust, or otherwise, shall be assigned 
to this state if the recipient thereof is domiciled within this 
state or is a resident trust or estate. 
      (3) Income derived from carrying on a trade or business, 
including in the case of a business owned by natural persons the 
income imputable to the owner for his services and the use of 
his property therein, shall be assigned to this state if the 
trade or business is conducted wholly within this state, and to 
other states if conducted wholly without this state.  This 
provision shall not apply to business income subject to the 
provisions of clause (1); 
      (4) When a trade or business is carried on partly within 
and partly without this state, the entire income derived from 
such trade or business, including income from intangible 
property employed in such business and including, in the case of 
a business owned by natural persons, the income imputable to the 
owner for his services and the use of his property therein, 
shall be governed, except as otherwise provided in sections 
290.35 and 290.36, by the provisions of section 290.19, 
notwithstanding any provisions of this section to the contrary.  
This shall not apply to business income subject to the 
provisions of clause (1), nor shall it apply to income from the 
operation of a farm which is subject to the provisions of clause 
(2).  For the purposes of this clause, a trade or business 
located in Minnesota is carried on partly within and partly 
without this state if tangible personal property is sold by such 
trade or business and delivered or shipped to a purchaser 
located outside the state of Minnesota. 
      If the trade or business carried on wholly or partly in 
Minnesota is part of a unitary business, the entire income of 
that unitary business shall be subject to apportionment under 
section 290.19 except for business income subject to the 
provisions of clause (1) and farm income subject to the 
provisions of clause (2).  The term "unitary business" shall 
mean business activities or operations which are of mutual 
benefit, dependent upon, or contributory to one another, 
individually or as a group.  Unity shall be presumed whenever 
there is unity of ownership, operation, and use, evidenced by 
centralized management or executive force, centralized 
purchasing, advertising, accounting, or other controlled 
interaction but the absence of these centralized activities will 
not necessarily evidence a nonunitary business.  Unity of 
ownership will not be deemed to exist when a corporation is 
involved unless that corporation is a member of a group of two 
or more corporations more than 50 percent of the voting stock of 
each member of the group is directly or indirectly owned by a 
common owner or by common owners, either corporate or 
noncorporate, or by one or more of the member corporations of 
the group.  
     The entire income of a unitary business shall be subject to 
apportionment as provided in section 290.19.  None of the income 
of a unitary business shall be considered as derived from any 
particular source and none shall be allocated to any particular 
place except as provided by the applicable apportionment formula.
     In determining whether or not intangible property is 
employed in a unitary business carried on partly within and 
partly without this state so that income derived therefrom is 
subject to apportionment under section 290.19 the following 
rules and guidelines shall apply. 
     (a) Intangible property is employed in a business if the 
business entity owning intangible property holds it as a means 
of furthering the business operation of which a part is located 
within the territorial confines of this state. 
      (b) Where a business operation conducted in Minnesota, is 
owned by a business entity which carries on business activity 
outside of the state different in kind from that conducted 
within this state, and such other business is conducted entirely 
outside the state, it will be presumed that the two business 
operations are unitary in nature, interrelated, connected and 
interdependent unless it can be shown to the contrary. 
     (5) For purposes of this section, amounts received by a 
nonresident from the United States, its agencies or 
instrumentalities, the Federal Reserve Bank, the state of 
Minnesota or any of its political or governmental subdivisions, 
or a Minnesota volunteer fireman's relief association, by way of 
payment as a pension, public employee retirement benefit, or any 
combination thereof, or as a retirement or survivor's benefit 
made from a plan qualifying under section 401, 403, 404, 405, 
408, 409 or 409A of the Internal Revenue Code of 1954, as 
amended through December 31, 1981, are not considered income 
derived from carrying on a trade or business or from performing 
personal or professional services in Minnesota, and are not 
taxable under this chapter. 
         (6) All other items of gross income shall be assigned to 
the taxpayer's domicile. 
    Sec. 25.  Minnesota Statutes 1983 Supplement, section 
290.18, subdivision 1, is amended to read: 
    Subdivision 1.  [TAXABLE NET INCOME.] (a) For resident 
individuals, taxable net income shall be the same as net income. 
    (b) For all other taxpayers, the taxable net income shall, 
except insofar as section 290.19 is applicable, be computed by 
deducting from the gross income assignable to this state under 
section 290.17 deductions of the kind permitted by sections 
290.089, section 290.09, and section 62 of the Internal Revenue 
Code of 1954, as amended through March 12, 1983, in accordance 
with the following provisions: 
    (1) Such deductions shall be allowed to the extent that 
they are connected with and allocable against the production or 
receipt of such gross income assignable to this state; 
    (2) That proportion of such deductions, so far as not 
connected with and allocable against the production or receipt 
of such gross income assignable to this state and so far as not 
connected with and allocable against the production or receipt 
of gross income assignable to other states or countries and so 
far as not entering into the computation of the net income 
assignable to this state under section 290.19, shall be allowed 
which the taxpayer's gross income from sources within this 
state, as determined under section 290.17, subdivision 2, 
clauses (1), (2), (3), and (6), bears to his gross income from 
all sources, including that entering into the computations 
provided for by section 290.19; provided that taxes of the kind 
deductible under section 290.09, subdivision 4, shall, so far as 
within the description of deductions deductible under this 
clause, be deductible in their entirety if paid to the state of 
Minnesota, or any of its subdivisions authorized to impose such 
taxes, and thereupon be excluded in making the computation of 
deductions, as in this clause provided. 
    Sec. 26.  Minnesota Statutes 1982, section 290.311, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RESIDENT PARTNERS.] (a) Partner's 
modifications.  In determining gross income and Minnesota 
taxable income of a resident partner, any modification described 
in section 290.01, subdivisions 20 to 20f, which relates to an 
item of partnership income, gain, loss or deduction shall be 
made in accordance with the partner's distributive share, for 
federal income tax purposes, of the item to which the 
modification relates. 
    (b) Character of items.  Each item of partnership income, 
gain, loss, or deduction shall have the same character for a 
partner under this section which it has for federal income tax 
purposes.  Where an item is not characterized for federal income 
tax purposes, it shall have the same character for a partner as 
if realized directly from the source from which realized by the 
partnership, or incurred in the same manner as incurred by the 
partnership. 
    (c) Minnesota tax avoidance or evasion.  Where a partner's 
distributive share of an item of partnership income, gain, loss 
or deduction is determined for federal income tax purposes by 
special provision in the partnership agreement with respect to 
such item, and where the effect of such provision is the 
avoidance or evasion of tax under this section, the partner's 
distributive share of such item, and any modifications required 
with respect thereto shall be determined as if the partnership 
agreement made no special provision with respect to such item. 
    Sec. 27.  Minnesota Statutes 1983 Supplement, section 
290.37, subdivision 1, is amended to read:  
    Subdivision 1.  [PERSONS MAKING RETURNS.] (a) The 
commissioner of revenue shall annually determine the gross 
income levels at which individuals, trusts, and estates shall be 
required to file a return for each taxable year. An individual 
who is not a Minnesota resident for any part of the year is not 
required to file a Minnesota income tax return if the 
individual's Minnesota gross income computed under section 
290.06, subdivision 2c, clause (c)(1) is less than the filing 
requirements for an individual who is a full year resident of 
Minnesota with the same marital status and number of personal 
credits.  
    The decedent's final income tax return, and all other 
income tax returns for prior years where the decedent had gross 
income in excess of the minimum amount at which an individual is 
required to file and did not file, shall be filed by his or her 
personal representative, if any.  If there is no personal 
representative, the return or returns shall be filed by the 
transferees as defined in section 290.29, subdivision 3, who 
receive any property of the decedent. 
    The trustee or other fiduciary of property held in trust 
shall file a return with respect to the taxable net income of 
such trust if that exceeds an amount on which a tax at the rates 
herein provided would exceed the specific credits allowed, or if 
the gross income of such trust exceeds $750, determined by the 
commissioner if in either case such trust belongs to the class 
of taxable persons. 
    Every corporation shall file a return.  The return in this 
case shall be signed by an officer of the corporation. 
    The receivers, trustees in bankruptcy, or assignees 
operating the business or property of a taxpayer shall file a 
return with respect to the taxable net income of such taxpayer 
if that exceeds an amount on which a tax at the rates herein 
provided would exceed the specific credits allowed. 
    (b) Such return shall (1) be verified or contain a written 
declaration that it is made under the penalties of criminal 
liability for willfully making a false return, and (2) shall 
contain a confession of judgment for the amount of the tax shown 
due thereon to the extent not timely paid. 
    (c) For purposes of this subdivision the term "gross income"
shall mean gross income as defined in section 61 of the Internal 
Revenue Code of 1954, as amended through December 31, 1981, 
modified and adjusted in accordance with the provisions of 
sections 290.01, subdivision 20b, clauses (1), (6), and (10), 
290.08, and 290.17. 
    Sec. 28.  Minnesota Statutes 1983 Supplement, section 
290.431, is amended to read: 
    290.431 [NONGAME WILDLIFE CHECKOFF.] 
    Every individual who files an income tax return or property 
tax refund claim form may designate on their original return 
that $1 or more shall be added to the tax or deducted from the 
refund that would otherwise be payable by or to that individual 
and paid into an account to be established for the management of 
nongame wildlife.  The commissioner of revenue shall, on the 
first page of the income tax return and the property tax refund 
claim form, notify filers of their right to designate that a 
portion of their tax or refund shall be paid into the nongame 
wildlife management account.  The sum of the amounts so 
designated to be paid shall be credited to the nongame wildlife 
management account for use by the nongame section of the 
division of wildlife in the department of natural resources.  
The commissioner of natural resources shall submit a work 
program for each fiscal year and semi-annual progress reports to 
the legislative commission on Minnesota resources in the form 
determined by the commission.  None of the money provided in 
this section may be expended unless the commission has approved 
the work program.  
    The state pledges and agrees with all contributors to the 
nongame wildlife management account to use the funds contributed 
solely for the management of nongame wildlife projects and 
further agrees that it will not impose additional conditions or 
restrictions that will limit or otherwise restrict the ability 
of the commissioner of natural resources to use the available 
funds for the most efficient and effective management of nongame 
wildlife.  
    Sec. 29.  Minnesota Statutes 1983 Supplement, section 
290.45, subdivision 1, is amended to read: 
    Subdivision 1.  [DATE DUE, INSTALLMENTS.] The tax imposed 
by this chapter shall be paid to the commissioner of revenue at 
the time fixed for filing the return on which the tax is based, 
except that at the election of estates and trusts the balance of 
tax due after applying any tax credit may be paid in two equal 
installments.  
    The first shall be paid at the time fixed for filing the 
return, and the second on or before six months thereafter. 
    If any installment is not paid on or before the date fixed 
for its payment the whole amount of the tax unpaid shall become 
due and payable.  They shall be paid to the commissioner or to 
the local officers designated by the commissioner with whom the 
return is filed as hereinbefore provided.  
    Sec. 30.  Minnesota Statutes 1983 Supplement, section 
290.46, is amended to read: 
     290.46 [EXAMINATION OF RETURNS; ASSESSMENTS, REFUNDS.] 
     The commissioner shall, as soon as practicable after the 
return is filed, examine the same and make any investigation or 
examination of the taxpayer's records and accounts that he may 
deem necessary for determining the correctness of the return.  
The tax computed by him on the basis of such examination and 
investigation shall be the tax to be paid by such taxpayer.  If 
the tax found due shall be greater than the amount reported as 
due on the taxpayer's return, the commissioner shall assess a 
tax in the amount of such excess and the whole amount of such 
excess shall be paid to the commissioner within 60 days after 
notice of the amount and demand for its payment shall have been 
mailed to the taxpayer by the commissioner.  If the 
understatement of the tax on the return was false and fraudulent 
with intent to evade the tax, the installments of the tax shown 
by the taxpayer on his return which have not yet been paid shall 
be paid to the commissioner within 60 days after notice of the 
amount thereof and demand for payment shall have been mailed to 
the taxpayer by the commissioner.  If the amount of the tax 
found due by the commissioner shall be less than that reported 
as due on the taxpayer's return, the excess shall be refunded to 
the taxpayer in the manner provided by section 290.50 (except 
that no demand therefor shall be necessary), if he has already 
paid the whole of such tax, or credited against any unpaid 
installment thereof; provided, that no refundment shall be made 
except as provided in section 290.50.  
    If the commissioner examines returns of a taxpayer for more 
than one year, he may issue one order covering the several years 
under consideration reflecting the aggregate refund or 
additional tax due. 
    The notices and demands provided for by sections 290.46 to 
290.48 shall be in such form as the commissioner may determine 
(including a statement) and shall contain a brief explanation of 
the computation of the tax and shall be sent by mail to the 
taxpayer at the address given in his return, or to his last 
known address. 
    In cases where there has been an overpayment of a 
self-assessed liability as shown on the return filed by the 
taxpayer, the commissioner may refund such overpayment to the 
taxpayer and no demand therefor shall be necessary; further, 
written findings by the commissioner, notice by mail to the 
taxpayer and certificate for refundment by the commissioner 
shall not be necessary and the provisions of section 270.10, in 
such case, shall not be applicable. 
    In the case of an individual, estate or trust, the 
commissioner may audit and adjust the taxpayer's computation of 
federal adjusted gross income (or federal taxable income for 
estates or trusts) to make it properly conform with the 
provisions of section 290.01, subdivision 20, or the items of 
federal tax preferences or federal credit amounts to make them 
properly conform with the provisions of this chapter.  In the 
case of an individual, the commissioner may audit and adjust the 
taxpayer's computation of itemized deductions to make them 
properly conform with the provisions of section 290.089. 
    Sec. 31.  Minnesota Statutes 1982, section 290.931, 
subdivision 1, is amended to read: 
    Subdivision 1.  [REQUIREMENTS OF DECLARATION.] Every 
corporation subject to taxation under this chapter (excluding 
sections 290.091 and section 290.92) shall make a declaration of 
estimated tax for the taxable year if its tax liability so 
computed can reasonably be expected to exceed $1,000. 
    Sec. 32.  Minnesota Statutes 1983 Supplement, section 
290A.03, subdivision 3, is amended to read: 
    Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
following: 
    (a) federal adjusted gross income as defined in the 
Internal Revenue Code of 1954 as amended through March 12, 1982; 
and 
    (b) the sum of the following amounts to the extent not 
included in clause (a): 
    (i) additions to federal adjusted gross income as provided 
in Minnesota Statutes, section 290.01, subdivision 20a, clauses 
(1), (2), (6), (11), (12) (4), (9), (10), and (16) (14); 
    (ii) all nontaxable income; 
    (iii) recognized net long term capital gains; 
    (iv) dividends and interest excluded from federal adjusted 
gross income under sections 116 or 128 of the Internal Revenue 
Code of 1954; 
    (v) cash public assistance and relief; 
    (vi) any pension or annuity (including railroad retirement 
benefits, all payments received under the federal social 
security act, supplemental security income, and veterans 
benefits), which was not exclusively funded by the claimant or 
spouse, or which was funded exclusively by the claimant or 
spouse and which funding payments were excluded from federal 
adjusted gross income in the years when the payments were made; 
    (vii) nontaxable interest received from the state or 
federal government or any instrumentality or political 
subdivision thereof; 
    (viii) workers' compensation; 
    (ix) unemployment benefits; 
    (x) nontaxable strike benefits; and 
    (xi) the gross amounts of payments received in the nature 
of disability income or sick pay as a result of accident, 
sickness, or other disability, whether funded through insurance 
or otherwise.  In the case of an individual who files an income 
tax return on a fiscal year basis, the term "federal adjusted 
gross income" shall mean federal adjusted gross income reflected 
in the fiscal year ending in the calendar year.  Federal 
adjusted gross income shall not be reduced by the amount of a 
net operating loss carryback. 
    (2) "Income" does not include 
    (a) amounts excluded pursuant to the Internal Revenue Code, 
Sections 101(a), 102, 117, and 121; 
    (b) amounts of any pension or annuity which was exclusively 
funded by the claimant or spouse and which funding payments were 
not excluded from federal adjusted gross income in the years 
when the payments were made; 
    (c) surplus food or other relief in kind supplied by a 
governmental agency; 
    (d) relief granted under sections 290A.01 to 290A.20; 
    (e) child support payments received under a temporary or 
final decree of dissolution or legal separation; or 
    (f) federal adjusted gross income shall be reduced by wage 
or salary expense, or expense of work incentive programs which 
are is not allowed as a deduction under provisions of section 
280C of the Internal Revenue Code of 1954; or 
    (g) federal adjusted gross income shall be reduced by the 
amount of the penalty on the early withdrawal of an all-savers 
certificate as provided in section 128(e) of the Internal 
Revenue Code of 1954.  
    Sec. 33.  Minnesota Statutes 1983 Supplement, section 
290A.03, subdivision 12, is amended to read: 
    Subd. 12.  [GROSS RENT.] "Gross rent" means rental paid 
solely for the right of occupancy, at arms-length, of a 
homestead, exclusive of charges for any utilities, medical 
services, furniture, or furnishings furnished by the landlord as 
a part of the rental agreement, whether expressly set out in the 
rental agreement or not.  If the landlord and tenant have not 
dealt with each other at arms-length and the commissioner 
determines that the gross rent charged was excessive, he may 
adjust the gross rent to a reasonable amount for purposes of 
sections 290A.01 to 290A.20. 
    If the landlord does not supply the charges for any 
utilities, furniture, or furnishings furnished by him, or if the 
charges appear to be incorrect the commissioner may apply a 
percentage determined from samples of similar gross rents paid 
solely for the right of occupancy.  
    Any amount paid by a claimant residing in property assessed 
pursuant to section 273.133 for occupancy in that property shall 
be excluded from gross rent for purposes of this chapter.  
However, property taxes imputed to the homestead of the claimant 
or the dwelling unit occupied by the claimant that qualifies for 
homestead treatment pursuant to section 273.133 shall be 
included within the term "property taxes payable" as defined in 
subdivision 13, notwithstanding the fact that ownership is not 
in the name of the claimant. 
    Sec. 34.  Minnesota Statutes 1983 Supplement, section 
296.18, subdivision 1, is amended to read: 
    Subdivision 1.  [GASOLINE OR SPECIAL FUEL USED IN OTHER 
THAN MOTOR VEHICLES.] Any person who shall buy and use gasoline 
for any a qualifying purpose other than use in motor vehicles, 
snowmobiles, or motorboats, or special fuel for any a qualifying 
purpose other than use in licensed motor vehicles, and who shall 
have paid the excise tax directly or indirectly through the 
amount of the tax being included in the price of the gasoline or 
special fuel, or otherwise, shall be eligible to receive the 
credit provided in section 290.06, subdivision 13, in the amount 
of the tax paid by him.  The taxpayer claiming this credit shall 
include with his income tax return information including the 
total amount of the gasoline so purchased and used by him other 
than in motor vehicles, or special fuel so purchased and used by 
him other than in licensed motor vehicles, and shall state when 
and for what purpose it was used.  The words "gasoline" or 
"special fuel" as used in this subdivision do not include 
aviation gasoline or special fuel for aircraft.  The words 
"qualifying purpose" have the same meaning given them in section 
290.06, subdivision 13.  
    Sec. 35.  [CHILD CARE CREDIT TABLE; LEGISLATIVE APPROVAL.] 
    The child care credit table used by the commissioner of 
revenue in the 1983 individual income tax instructions to limit 
the maximum amount of the child care credit is hereby approved 
by the legislature as a proper interpretation of the schedule 
provided in Minnesota Statutes 1983 Supplement, section 290.067, 
subdivision 2.  
    Sec. 36.  [REPEALER.] 
    Minnesota Statutes 1982, sections 290.011; and 290.311, 
subdivision 2; are repealed.  
    Sec. 37.  [EFFECTIVE DATE.] 
    Sections 1, 8, and 35 are effective the day after final 
enactment.  Sections 2 to 7, 9 to 18, 21 to 31, 34, and 36 are 
effective for taxable years beginning after December 31, 1983. 
Section 19 is effective for taxable years beginning after 
December 31, 1983, except that the amendment in clause (a), 
relating to horses, is effective for taxable years beginning 
after December 31, 1982, and is intended to confirm the intent 
of the legislature that for the purposes of section 290.09, 
subdivision 29, the word "livestock" always has included 
horses.  Section 20 is effective for taxable years beginning 
after December 31, 1983, except that the provision adjusting the 
regular tax is effective for taxable years beginning after 
December 31, 1982.  Section 32 is effective for claims based on 
rent paid in 1984 and thereafter and for property taxes payable 
in 1985 and thereafter.  Section 33 is effective for claims 
based on rent paid in 1985 and thereafter.  

                               ARTICLE 3 

                             ADMINISTRATIVE 
    Section 1.  Minnesota Statutes 1982, section 171.31, is 
amended to read: 
    171.31 [PERSONS RECEIVING BENEFITS FOR BLINDNESS, DISCOVERY 
OF INFORMATION.] 
    The commissioner of public safety, in order to promote 
highway safety by restricting driving privileges to those 
persons meeting accepted visual acuity standards, may request 
and shall receive information concerning the identity and 
whereabouts of any person who has applied for or received any 
type of tax, welfare, licensing or other benefits or exemptions 
for the blind or nearly blind, from the records of all 
departments, boards, bureaus or other agencies of this state 
except the department of revenue, and they shall provide such 
information notwithstanding the provisions of section 268.12, 
subdivision 12, section 290.61, or any other existing law or 
regulation to the contrary, except that section 290.61 prohibits 
disclosure of information by the commissioner of revenue.  
    Sec. 2.  Minnesota Statutes 1983 Supplement, section 
176.186, is amended to read: 
    176.186 [RECORDS FROM OTHER STATE AGENCIES.] 
    Notwithstanding any other state law to the contrary except 
section 290.61, the commissioner may obtain from the department 
of revenue, department of economic security, and office of the 
secretary of state, or any other state agency, upon request, 
names or lists of employers doing business in the state.  This 
information shall be treated by the commissioner in the manner 
provided by chapter 13 and shall be used only for insurance 
verification by the commissioner.  
    Sec. 3.  Minnesota Statutes 1982, section 271.19, is 
amended to read: 
    271.19 [COSTS AND DISBURSEMENTS.] 
    Upon the determination of any appeal under this chapter 
before the tax court, or of any review hereunder by the supreme 
court, the costs and disbursements may be taxed and allowed in 
favor of the prevailing party and against the losing party as in 
civil actions.  In any case where a person liable for a tax or 
other obligation has lost an appeal or review instituted by him, 
and the tax court or court shall determine that he instituted 
the same merely for the purposes of delay, or that the 
taxpayer's position in the proceedings is frivolous, additional 
costs, commensurate with the expense incurred and services 
performed by the agencies of the state in connection with the 
appeal, but not exceeding $500 $5,000 in any case, may be 
allowed against him, in the discretion of the tax court or 
court.  Costs and disbursements allowed against any such person 
shall be added to the tax or other obligation determined to be 
due, and shall be payable therewith.  Costs and disbursements 
allowed against the state or other public agencies shall be paid 
out of funds received from taxes or other obligations of the 
kind involved in the proceeding, or other funds of the agency 
concerned appropriated and available therefor. Witnesses in 
proceedings under this chapter shall receive like fees as in the 
district court, to be paid in the first instance by the parties 
by whom the witnesses were called, and to be taxed and allowed 
as herein provided. 
    Sec. 4.  Minnesota Statutes 1983 Supplement, section 
290.174, is amended to read: 
    290.174 [INTERSTATE AUDITS.] 
    Article VIII of the multistate tax compact relating to 
interstate audits shall be in force in and with respect to the 
state of Minnesota.  For purposes of sections 290.61 and 
297A.43, the Multistate Tax Commission will be considered to be 
a state for purposes of auditing corporate sales, excise, and 
income tax returns.  
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 
290.175, is amended to read: 
    290.175 [OPTIONAL APPORTIONMENT.] 
    Notwithstanding the provisions of section 290.171, the 
taxpayer may elect to apportion his income to Minnesota pursuant 
to this chapter, without regard to section 290.171, article IV. 
The provisions of section 290.171, article IV, are effective for 
taxable years beginning after December 31, 1982 and allow 
combined reporting only to the extent allowed under section 
290.34, subdivision 2.  
    Sec. 6.  Minnesota Statutes 1982, section 290.41, 
subdivision 2, is amended to read: 
    Subd. 2.  [BY PERSONS, CORPORATIONS, COOPERATIVES, 
GOVERNMENTAL ENTITIES OR SCHOOL DISTRICTS.] Every person, 
corporation, or cooperative, the state of Minnesota and its 
political subdivisions, and every city, county and school 
district in Minnesota, making payments in the regular course of 
a trade or business during the taxable year to any person or 
corporation of $600 or more on account of rents or royalties, or 
of $10 or more on account of interest, or $10 or more on account 
of dividends or patronage dividends, or $600 or more on account 
of either wages, salaries, commissions, fees, prizes, awards, 
pensions, annuities, or any other fixed or determinable gains, 
profits or income, not otherwise reportable under section 
290.92, subdivision 7, or on account of earnings of $10 or more 
distributed to its members by savings, building and loan 
associations or credit unions chartered under the laws of this 
state or the United States, (a) shall make a return (except in 
cases where a valid agreement to participate in the combined 
federal and state information reporting system has been entered 
into, and such return is therefore filed only with the 
commissioner of internal revenue pursuant to the applicable 
filing and informational reporting requirements of the Internal 
Revenue Code of 1954 as amended through December 31, 1981) in 
respect to such payments in excess of the amounts specified, 
giving the names and addresses of the persons to whom such 
payments were made, the amounts paid to each, and (b) shall make 
a return in respect to the total number of such payments and 
total amount of such payments, for each category of income 
specified, which were in excess of the amounts specified.  This 
subdivision shall not apply to the payment of interest or 
dividends to a person who was a nonresident of Minnesota for the 
entire year.  
     Upon request from the commissioner, any public pension plan 
as defined in section 356.61 in which the employer picks up the 
employee contributions under section 356.62 shall furnish the 
commissioner, on magnetic media to the extent possible, with the 
name, address, and social security number of each employee who 
participated in the plan during that calendar year for which 
picked up contributions were made.  
    Sec. 7.  Minnesota Statutes 1982, section 290.61, is 
amended to read: 
    290.61 [PUBLICITY OF RETURNS, INFORMATION.] 
    It shall be unlawful for the commissioner or any other 
public official or employee to divulge or otherwise make known 
in any manner any particulars set forth or disclosed in any 
report or return required by this chapter, or any information 
concerning, the taxpayer's affairs acquired from his or its 
records, officers, or employees while examining or auditing any 
taxpayer's liability for taxes imposed hereunder, except in 
connection with a proceeding involving taxes due under this 
chapter from the taxpayer making such return or to comply with 
the provisions of sections 256.978, 268.12, subdivision 12, 
270A.11, 273.1314, subdivision 16, 290.612 and 302A.821.  The 
commissioner may furnish a copy of any taxpayer's return, 
including audit documents and information, to any official of 
the United States or of any state having duties to perform in 
respect to the assessment or collection of any tax imposed upon 
or measured by income, if such taxpayer is required by the laws 
of the United States or of such state to make a return therein.  
The commissioner may disclose information from withholding tax 
returns received from the taxpayer to the Minnesota department 
of economic security for purposes of auditing unemployment tax.  
Prior to the release of any information to any official of the 
United States or any other state or the department of economic 
security under the provisions of this section, the person to 
whom the information is to be released shall sign an agreement 
which provides that he 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.  The 
commissioner and all other public officials and employees shall 
keep and maintain the same secrecy in respect to any information 
furnished by any department, commission, or official of the 
United States or of any other state in respect to the income of 
any person as is required by this section in respect to 
information concerning the affairs of taxpayers under this 
chapter.  Nothing herein contained shall be construed to 
prohibit the commissioner from publishing statistics so 
classified as not to disclose the identity of particular returns 
or reports and the items thereof.  Upon request of a majority of 
the members of the senate tax committee or of the house tax 
committee or the tax study commission, the commissioner shall 
furnish abstracted financial information to those committees for 
research purposes from returns or reports filed pursuant to this 
chapter, provided that he shall not disclose the name, address, 
social security number, business identification number or any 
other item of information associated with any return or report 
which the commissioner believes is likely to identify the 
taxpayer.  The commissioner shall not furnish the actual return, 
or a portion thereof, or a reproduction or copy of any return or 
portion thereof.  "Abstracted financial information" means only 
the dollar amounts set forth on each line on the form including 
the filing status. 
    Any person violating the provisions of this section shall 
be guilty of a gross misdemeanor. 
    In order to locate the named payee on state warrants issued 
pursuant to this chapter or chapter 290A and undeliverable by 
the United States postal service, the commissioner may publish 
in any English language newspaper of general circulation in this 
state or make available to radio or television stations a list 
of the name and last known address of the payee as shown on the 
reports or returns filed with the commissioner.  The 
commissioner may exclude the names of payees whose refunds are 
in an amount which is less than a minimal amount to be 
determined by the commissioner.  The published list shall not 
contain any particulars set forth on any report or return.  The 
publication or announcement shall include instructions on 
claiming the warrants. 
    An employee of the department of revenue may, in connection 
with his official duties relating to any audit, collection 
activity, or civil or criminal tax investigation or any other 
offense under this chapter, disclose return information to the 
extent that such disclosure is necessary in obtaining 
information, which is not not otherwise reasonably available, 
with respect to the correct determination of tax, liability for 
tax, or the amount to be collected or with respect to the 
enforcement of any other provision of this chapter.  
    In order to facilitate processing of returns and payments 
of taxes required by this chapter, or to facilitate the 
development, implementation, and use of computer programs and 
automated procedures for purposes of administering this chapter 
or chapter 290A, the commissioner may contract with outside 
vendors and may disclose private and nonpublic data to the 
vendor.  The data disclosed will be administered by the vendor 
consistent with this section, and the vendor must agree to 
subject himself and his employees to the civil and criminal 
penalties provided by law for unlawful disclosure. 
    Sec. 8.  Minnesota Statutes 1983 Supplement, section 
290A.03, subdivision 11, is amended to read: 
    Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
constituting property taxes" means the amount of gross rent 
actually paid in cash, or its equivalent, which is attributable 
(a) to the property tax paid on the unit or (b) to the amount 
paid in lieu of property taxes, in any calendar year by a 
claimant solely for the right of occupancy of his Minnesota 
homestead in the calendar year, and which rent constitutes the 
basis, in the succeeding calendar year of a claim for relief 
under sections 290A.01 to 290A.20 by the claimant.  The amount 
of rent attributable to property taxes paid or payments in lieu 
made on the unit shall be determined by multiplying the net tax 
on the property where the unit is located by a fraction, the 
numerator of which is the gross rent paid by the claimant for 
the calendar year for the unit and the denominator of which is 
the gross rent paid for the calendar year for the property in 
which the unit is located.  In no case may the rent constituting 
property taxes exceed 50 percent of the gross rent paid by the 
claimant during that calendar year.  In the case of a claimant 
who resides in a unit for which a rent subsidy is paid pursuant 
to section 8 of the United States Housing Act of 1937, as 
amended, or under another state or federal program providing 
rent supplements or reduced rent for low and moderate income 
families, 20 percent of gross rent actually paid in cash or its 
equivalent shall be the claimant's "rent constituting property 
taxes paid."  
    Sec. 9.  Minnesota Statutes 1982, section 290A.07, 
subdivision 2a, is amended to read: 
    Subd. 2a.  A claimant who is a renter shall receive full 
payment after August 1 and prior to August 15 or 60 days after 
receipt of the application, whichever is later.  Interest shall 
be added at six percent per annum from August 15 or 60 days 
after receipt of the application whichever is later. 
    Sec. 10.  Minnesota Statutes 1983 Supplement, section 
290A.07, subdivision 3, is amended to read: 
    Subd. 3.  Any claimant not included in subdivision 2a shall 
receive full payment after August 31 September 15 and prior to 
September 15 30.  Interest shall be added at six percent per 
annum from September 15 30 or 60 days after receipt of the 
application if the application is filed after August 31, 
whichever is later.  Interest will be computed until the date 
the claim is paid. 
    Sec. 11.  [EFFECTIVE DATE.] 
    Sections 1, 2, 3, 4, 5, 6, and 7 are effective the day 
after final enactment.  Sections 8, 9, and 10 are effective for 
claims based on rent paid in 1983 and thereafter and property 
taxes payable in 1984 and thereafter.  

                                ARTICLE 4

                                TECHNICAL
    Section 1.  Minnesota Statutes 1983 Supplement, section 
290.032, subdivision 2, is amended to read: 
    Subd. 2.  The amount of tax imposed by subdivision 1 shall 
be computed in the same way as the tax imposed under section 
402(e) of the Internal Revenue Code of 1954, as amended through 
December 31, 1981, except that the initial separate tax shall be 
an amount equal to ten times the tax which would be imposed by 
section 290.03 if the recipient was an individual referred to in 
such section and the taxable net income, excluding the credits 
allowed in section 290.06, subdivision 3f, was an amount equal 
to one-tenth of the excess of 
    (i) the total taxable amount of the lump sum distribution 
for the year, over 
    (ii) the minimum distribution allowance, and except that 
references in section 402(e) of the Internal Revenue Code of 
1954, as amended through December 31, 1981, to paragraph (1)(A) 
thereof shall instead be references to subdivision 1 of this 
section. 
    The amount of any distribution from a qualified pension or 
profit sharing plan which is received as a lump sum distribution 
shall be reduced to the extent of any contribution:  
    (1) not previously allowed as a deduction by reason of a 
change in federal law which was not adopted by Minnesota for a 
taxable year beginning in 1974 or thereafter; or 
    (2) designated as an employee contribution but which the 
employing unit picks up and which is treated as an employer 
contribution and which was taxed on the Minnesota return but not 
the federal return in the year the contribution was made.  
     Sec. 2.  Minnesota Statutes 1983 Supplement, section 
290.077, subdivision 4, is amended to read: 
    Subd. 4.  [DEDUCTION FOR FEDERAL ESTATE TAX AND MINNESOTA 
INHERITANCE OR ESTATE TAX.] (1) [ALLOWANCE OF DEDUCTION; FEDERAL 
ESTATE TAX.] A person who includes an amount in gross income 
under this section, shall be allowed a deduction for the federal 
estate tax computed in the same manner and in accordance with 
the method as provided in section 691(c)(1), (2), and (4) of the 
Internal Revenue Code of 1954, as amended through December 31, 
1982.  
     (2) [ALLOWANCE OF DEDUCTION; MINNESOTA INHERITANCE OR 
ESTATE TAX.] (A) [GENERAL RULE.] A person who includes an amount 
in gross income under this section, shall be allowed, for the 
same taxable year, as a deduction an amount which bears the same 
ratio to the inheritance or estate tax attributable to the net 
value for inheritance or estate tax purposes of all the items 
described in subdivision 1, as the value for inheritance or 
estate tax purposes of the items of gross income or portions 
thereof in respect of which such person included the amount in 
gross income (or the amount included in gross income, whichever 
is lower) bears to the value for inheritance or estate tax 
purposes of all the items described in subdivision 1. 
     (B) [ESTATES AND TRUSTS.] In the case of an estate or 
trust, the amount allowed as a deduction under subparagraph (A) 
of this subdivision shall be computed by excluding from the 
gross income of the estate or trust the portion (if any) of the 
items described in subdivision 1, which is properly paid, 
credited, or to be distributed to the beneficiaries during the 
taxable year.  
    (3) [METHOD OF COMPUTING DEDUCTION.] For purposes of 
paragraph (2) of this subdivision 
    (A) (i) The term "inheritance tax" means the tax imposed by 
Minnesota on the estates of decedents dying before January 1, 
1980, reduced by the credits against such tax; (ii) The term 
"estate tax" means the tax imposed by Minnesota on the estates 
of decedents dying on or after January 1, 1980, reduced by the 
credits against the tax; (iii) The terms "inheritance tax" or 
"estate tax" also include the tax imposed by other states on the 
estates of decedents reduced by the credits against the tax. 
    (B) The net value for inheritance or estate tax purposes of 
all the items described in subdivision 1, shall be the excess of 
the value for inheritance or estate tax purposes of all the 
items described in subdivision 1, over the deductions from the 
gross inheritance or gross estate in respect of claims which 
represent the deductions described in subdivision 2 section 
691(b) of the Internal Revenue Code of 1954, as amended through 
December 31, 1983. 
    (C) (i) The inheritance tax attributable to such net value 
shall be an amount equal to the excess of the inheritance tax 
over the inheritance tax computed without including in the gross 
inheritance such net value; (ii) The estate tax attributable to 
such net value shall be an amount equal to the excess of the 
estate tax over the estate tax computed without including in the 
gross estate the net value. 
         (4) [LUMP SUM DISTRIBUTION ADJUSTMENT.] For purposes of 
section 290.032 (other than the minimum distribution allowance), 
the total taxable amount of any lump sum distribution shall be 
reduced by the amount of the deduction allowable under paragraph 
(1) of this subdivision which is attributable to the total 
taxable amount (determined without regard to this paragraph). 
     Sec. 3.  Minnesota Statutes 1983 Supplement, section 
290.09, subdivision 5, is amended to read: 
    Subd. 5.  [LOSSES.] (a) [GENERAL RULE.] There shall be 
allowed as a deduction any loss sustained during the taxable 
year and not compensated for by insurance or otherwise. 
    (b) [AMOUNT OF DEDUCTION.] For purposes of paragraph (a), 
the basis for determining the amount of the deduction for any 
loss shall be the adjusted basis provided in this chapter for 
determining the loss from the sale or other disposition of 
property. 
    (c) [WAGERING LOSSES.] Losses from wagering transactions 
shall be allowed only to the extent of the gains from such 
transactions.  No loss from pari-mutuel betting shall be allowed 
except to the extent of verified receipts and the sworn 
testimony of as least one witness other than the taxpayer or his 
spouse.  
    (d) [THEFT LOSSES.] For purposes of paragraph (a), any loss 
arising from theft shall be treated as sustained during the 
taxable year in which the taxpayer discovers such loss. 
    (e) (d) [CAPITAL LOSSES.] Losses from sales or exchanges of 
capital assets shall be allowed only to the extent allowed in 
section 290.16. 
    (f) (e) [WORTHLESS SECURITIES.] If any security which is a 
capital asset becomes worthless during the taxable year, the 
loss resulting therefrom shall, for purposes of this chapter, be 
treated as a loss from the sale or exchange, on the last day of 
the taxable year, of a capital asset. 
    The definitions contained in section 165(g) of the Internal 
Revenue Code of 1954, as amended through January 15, 1983, shall 
apply.  No deduction shall be allowed for any loss sustained on 
any registration-required obligation as defined in and except as 
provided in section 165(j) of the Internal Revenue Code of 1954, 
as amended through January 15, 1983.  
    (g) (f) [DISASTER LOSSES.] Notwithstanding the provisions 
of (a), any loss attributable to a disaster occurring in an area 
subsequently determined by the President of the United States to 
warrant assistance by the Federal Government under the 
provisions of the Federal Disaster Relief Act of 1974 shall be 
deducted for the taxable year immediately preceding the taxable 
year in which the disaster occurred.  This provision shall apply 
only if an election has been made under the provisions of 
Section 165(i) of the Internal Revenue Code of 1954, as amended 
through January 15, 1983 for federal income tax purposes.  Such 
deduction allowed in the preceding taxable year shall not exceed 
the uncompensated amount determined on the basis of the facts 
existing at the date the taxpayer claims the loss.  If an 
election is made, the casualty resulting in the loss will be 
deemed to have occurred in the taxable year for which the 
deduction is claimed. 
     Sec. 4.  Minnesota Statutes 1983 Supplement, section 
290.21, subdivision 3, is amended to read: 
    Subd. 3.  An amount for contribution or gifts made within 
the taxable year: 
     (a) to or for the use of the state of Minnesota, or any of 
its political subdivisions for exclusively public purposes, 
     (b) to or for the use of any community chest, corporation, 
organization, trust, fund, association, or foundation located in 
and carrying on substantially all of its activities within this 
state, organized and operating exclusively for religious, 
charitable, public cemetery, scientific, literary, artistic, or 
educational purposes, or for the prevention of cruelty to 
children or animals, no part of the net earnings of which inures 
to the benefit of any private stockholder or individual, 
     (c) to a fraternal society, order, or association, 
operating under the lodge system located in and carrying on 
substantially all of their activities within this state if such 
contributions or gifts are to be used exclusively for the 
purposes specified in subdivision 3(b), or for or to posts or 
organizations of war veterans or auxiliary units or societies of 
such posts or organizations, if they are within the state and no 
part of their net income inures to the benefit of any private 
shareholder or individual, 
     (d) to or for the use of the United States of America for 
exclusively public purposes, and to or for the use of any 
community chest, corporation, trust, fund, association, or 
foundation, organized and operated exclusively for any of the 
purposes specified in subdivision 3(b) and (c) no part of the 
net earnings of which inures to the benefit of any private 
shareholder or individual, but not carrying on substantially all 
of their activities within this state, in an amount equal to the 
ratio of Minnesota taxable net income to total net income, 
    (e) the total deduction hereunder shall not exceed 15 
percent of the taxpayer's taxable net income less the deductions 
allowable under this section other than those for contributions 
or gifts, 
    (f) in the case of a corporation reporting its taxable 
income on the accrual basis, if:  (A) the board of directors 
authorizes a charitable contribution during any taxable year, 
and (B) payment of such contribution is made after the close of 
such taxable year and on or before the fifteenth day of the 
third month following the close of such taxable year; then the 
taxpayer may elect to treat such contribution as paid during 
such taxable year.  The election may be made only at the time of 
the filing of the return for such taxable year, and shall be 
signified in such manner as the commissioner shall by 
regulations prescribe;  
    (g) in the case of a contribution or property placed in 
trust as described in section 170(f)(2) of the Internal Revenue 
Code of 1954, as amended through December 31, 1981, a deduction 
shall be allowed under this subdivision to the extent that a 
deduction is allowable for federal income tax purposes. 
    Sec. 5.  Minnesota Statutes 1982, section 290.23, 
subdivision 3, is amended to read: 
    Subd. 3.  [UNUSED LOSS CARRYOVERS AND EXCESS DEDUCTIONS ON 
TERMINATION AVAILABLE TO BENEFICIARIES.] If on the termination 
of an estate or trust, the estate or trust has 
    (1) a net operating loss carryover under section 290.095 or 
, a capital loss carryover under section 290.01, subdivisions 20 
to 20f or any other loss or credit carryover allowed under this 
chapter; or 
    (2) for the last taxable year of the estate or trust 
deductions (other than the charitable deduction) in excess of 
gross income for such year, 
    then such carryover or such excess shall be allowed as a 
deduction, in accordance with regulations rules prescribed by 
the commissioner, to the beneficiaries succeeding to the 
property of the estate or trust. 
     Sec. 6.  Minnesota Statutes 1982, section 290.56, 
subdivision 4, is amended to read: 
    Subd. 4.  [REPORT MADE OF CHANGE OR CORRECTION OF FEDERAL 
RETURN.] If a taxpayer is required to report a change or 
correction or renegotiation by the Commissioner of Internal 
Revenue or other officer of the United States or other competent 
authority or to file an amended return as required by 
subdivision 2 and does report such change or files a copy of 
such amended return within 90 days, the commissioner may 
recompute and reassess the tax due under this chapter, including 
a refundment thereof (a) within one year after such report or 
amended return is filed with the commissioner, notwithstanding 
any period of limitations to the contrary or (b) within the 
period set forth in section 290.49, whichever period is greater. 
The period provided for the carryback of any amount of loss or 
credit is also extended as provided in this subdivision, 
notwithstanding any other law to the contrary. 
     Sec. 7.  Minnesota Statutes 1982, section 290.56, 
subdivision 5, is amended to read: 
    Subd. 5.  [EXTENSIONS OF TIME.] Any taxpayer who consents 
to any extension of time for the assessment of federal income 
taxes shall within 90 days of the execution of such consent 
notify the commissioner and the period of time in which the 
commissioner may recompute the tax is also extended, 
notwithstanding any period of limitations to the contrary as 
follows: 
    (a) For the periods provided in subdivisions 3 and 4; or 
    (b) For six months following the expiration of the extended 
federal period of limitations where no change is made by the 
federal authority.  
     The period provided for the carryback of any amount of loss 
or credit is also extended as provided in this subdivision, 
notwithstanding any other law to the contrary. 
     Sec. 8.  Minnesota Statutes 1983 Supplement, section 
290.93, subdivision 10, is amended to read: 
    Subd. 10.  [UNDERPAYMENT OF ESTIMATED TAX.] (1) In the case 
of any underpayment of estimated tax by an individual, except as 
provided in paragraph (4) or (5), there may be added to and 
become a part of the taxes imposed by this chapter, for the 
taxable year an amount determined at the rate specified in 
section 270.75 upon the amount of the underpayment for the 
period of the underpayment. 
      (2) For purposes of the preceding paragraph, the amount of 
underpayment shall be the excess of 
      (a) The amount of the installment which would be required 
to be paid if the estimated tax were equal to 80 percent (66 2/3 
percent in the case of farmers referred to in subdivision 5(2) 
of this section) of the taxes shown on the return for the 
taxable year or the taxes for such year if no return was filed, 
over 
      (b) The amount, if any, of the installment paid on or 
before the last day prescribed for such payment. 
      (3) The period of the underpayment shall run from the date 
the installment was required to be paid to whichever of the 
following dates is the earlier 
      (a) The 15th day of the fourth month following the close of 
the taxable year. 
      (b) With respect to any portion of the underpayment, the 
date on which such portion is paid.  For purposes of this 
subparagraph, a payment of estimated tax on any installment date 
shall be considered a payment of any previous underpayment only 
to the extent such payment exceeds the amount of the installment 
determined under paragraph (2) (a) for such installment date. 
      (4) The addition to the tax with respect to any 
underpayment of any installment shall not be imposed if the 
total amount of all payments of estimated tax made on or before 
the last date prescribed for the payment of such installment 
equals or exceeds the amount which would have been required to 
be paid on or before such date if the estimated tax were 
whichever of the following is the lesser 
      (a) The total tax liability shown on the return of the 
individual for the preceding taxable year (if a return showing a 
liability for such taxes was filed by the individual for the 
preceding taxable year of 12 months), or 
      (b) An amount equal to the tax computed, at the rates 
applicable to the taxable year, on the basis of the taxpayer's 
status with respect to the personal credits for the taxable 
year, but otherwise on the basis of the facts shown on his 
return for, and the law applicable to the preceding taxable 
year, or 
      (c) An amount equal to 80 percent (66 2/3 percent in the 
case of farmers referred to in subdivision 5(2) of this section) 
of the tax for the taxable year (after deducting personal 
credits) computed by placing on an annualized basis the taxable 
income for the months in the taxable year ending before the 
month in which the installment is required to be paid.  For 
purposes of this subparagraph, the taxable income shall be 
placed on an annualized basis by 
      (i) Multiplying by 12 (or in the case of a taxable year of 
less than 12 months, the number of months in the taxable year) 
the taxable income computed for the months in the taxable year 
ending before the month in which the installment is required to 
be paid. 
      (ii) Dividing the resulting amount by the number of months 
in the taxable year ending before the month in which such 
installment date falls, or 
     (d) An amount equal to 90 percent of the tax computed, at 
the rates applicable to the taxable year, on the basis of the 
actual taxable income for the months in the taxable year ending 
before the month in which the installment is required to be paid.
     (5) No addition to the tax shall be imposed under this 
subdivision for any taxable year if:  
     (a) the individual did not have any liability for tax for 
the preceding taxable year, 
     (b) the preceding taxable year was a taxable year of 12 
months, and 
     (c) the individual was a resident of Minnesota throughout 
the preceding taxable year.  
         (6) For the purposes of applying this subdivision, the 
estimated tax shall be computed without any reduction for the 
amount which the individual estimates as his credit under 
section 290.92, subdivision 12 (relating to tax withheld at 
source on wages), and the refundable credits contained in 
sections 290.06, subdivision 13, 290.067, and 290.501, any other 
refundable credits which are allowed against income tax 
liability, and the amount of such credits for the taxable year 
shall be deemed a payment of estimated tax, and an equal part of 
such amounts shall be deemed paid on each installment date 
(determined under subdivisions 6 and 7 of this section) for such 
taxable year, unless the taxpayer establishes the dates on which 
all amounts were actually withheld, in which case the amounts so 
withheld shall be deemed payments of estimated tax on the dates 
on which such amounts were actually withheld. 
     Sec. 9.  Minnesota Statutes 1983 Supplement, section 
290.9726, subdivision 5, is amended to read: 
    Subd. 5.  [CREDIT ALLOWANCES.] The credits provided in 
sections section 290.06 and 290.501 any other income tax credits 
to which the corporation is entitled shall be allocated to the 
shareholders as provided in sections 1366 and 1377 of the 
Internal Revenue Code of 1954, as amended through December 31, 
1982.  The limitations set forth in the computation of the 
credit shall be applied to the shareholders.  
     Sec. 10.  Minnesota Statutes 1983 Supplement, section 
290A.03, subdivision 6, is amended to read: 
    Subd. 6.  [HOMESTEAD.] "Homestead" means the dwelling 
occupied by a claimant as his principal residence and so much of 
the land surrounding it, not exceeding ten acres, as is 
reasonably necessary for use of the dwelling as a home and any 
other property used for purposes of a homestead as defined in 
section 273.13, subdivision 7, except for agricultural land 
assessed as part of a homestead pursuant to section 273.13, 
subdivision 6, "homestead" is limited to 320 acres or, where the 
farm homestead is rented, one acre.  The homestead may be owned 
or rented and may be a part of a multi-dwelling or multi-purpose 
building and the land on which it is built.  A manufactured 
home, as defined in section 168.011, subdivision 8, assessed as 
personal property may be a dwelling for purposes of this 
subdivision. 
    Sec. 11.  Minnesota Statutes 1983 Supplement, section 
290A.03, subdivision 14, is amended to read: 
    Subd. 14.  [NET TAX.] "Net tax" means 
    (a) the property tax, exclusive of special assessments, 
interest, and penalties, and after reduction for any state paid 
property tax credits as required in subdivision 13 except for 
the reduction pursuant to section 273.13, subdivisions 6, 7, and 
14a, or 
    (b) the payments made in lieu of ad valorem taxes, 
including payments of special assessments imposed in lieu of ad 
valorem taxes, 
    for the calendar year in which the rent was paid.  If a 
portion of the property is occupied as a homestead or is used 
for other than rental purposes, the net tax shall be the amount 
of tax after reductions pursuant to section 273.13, subdivisions 
6, 7, and 14a, reduced by the percentage that the nonrental use 
comprises of the total square footage of the building.  If a 
portion of the property is used for purposes other than for 
residential rental and none of the property is occupied as a 
homestead, the net tax shall be the amount of the tax of the 
parcel multiplied by a fraction, the numerator of which is the 
assessed value of the residential rental portion and the 
denominator of which is the total assessed value of the parcel. 
If a portion of the property is used for other than rental 
residential purposes, the county treasurer shall list on the 
property tax statement the amount of net tax pertaining to the 
rental residential portion of the property.  
    The amount of the net tax shall not be reduced by an 
abatement or a court ordered reduction in the property tax on 
the property made after the certificate of rent constituting 
property tax has been provided to the renter.  
    Sec. 12.  Minnesota Statutes 1983 Supplement, section 
290A.04, subdivision 1, is amended to read: 
    Subdivision 1.  A credit shall be allowed each claimant in 
the amount that property taxes payable or rent constituting 
property taxes exceed the percentage of the household income of 
the claimant specified in subdivision 2 in the year for which 
the taxes were levied or in the year in which the rent was paid. 
If the amount of property taxes payable or rent constituting 
property taxes is equal to or less than the percentage of the 
household income of the claimant specified in subdivision 2 in 
the year for which the taxes were levied or in the year in which 
the rent was paid, the claimant shall not be eligible for a 
state refund pursuant to this section.  For purposes of claiming 
this credit, a claimant who owns his own homestead part of the 
year and rents part of the year may add his rent constituting 
property taxes to the qualifying tax on his homestead.  
    Sec. 13.  Minnesota Statutes 1983 Supplement, section 
290A.04, subdivision 2, is amended to read: 
    Subd. 2.  A claimant whose property taxes payable or rent 
constituting property taxes are in excess of the percentage of 
the household income stated below shall pay an amount equal to 
the amount percent of income shown for the appropriate household 
income level and the state refund will be equal to an amount up 
to the state refund amount shown below.  
                               Percent      Claimant     State
     Household Income         of Income       Pays      Refund 
    Net loss and 
     up to $2,999            0.5 percent       $13        $13
     3,000 to 3,499          0.6 percent       $15        $15
     3,500 to 3,999          0.6 percent       $18        $18
     4,000 to 4,499          0.7 percent       $20        $20
     4,500 to 4,999          0.7 percent       $23        $23
     5,000 to 5,999          0.8 percent       $40        $40
     6,000 to 6,999          0.9 percent       $54        $54
     7,000 to 7,999          1.0 percent       $70        $70
     8,000 to 8,999          1.1 percent       $88        $88
     9,000 to 9,999          1.2 percent       $108       $108
     10,000 to 10,999        1.3 percent       $130       $130
     11,000 to 11,999        1.4 percent       $154       $154
     12,000 to 12,999        1.5 percent       $180       $180
     13,000 to 13,999        1.5 percent       $195       $195
     14,000 to 14,999        1.5 percent       $210       $210
     15,000 to 15,999        1.5 percent       $225       $225
     16,000 to 16,999        1.5 percent       $240       $240
     17,000 to 17,999        1.5 percent       $255       $255
     18,000 to 18,999        1.5 percent       $270       $270
     19,000 to 19,999        1.5 percent       $285       $285
     20,000 to 20,999        1.6 percent       $320       $320
     21,000 to 21,999        1.6 percent       $336       $336
     22,000 to 22,999        1.6 percent       $352       $352
     23,000 to 23,999        1.8 percent       $414       $414
     24,000 to 24,999        1.8 percent       $432       $432
     25,000 to 25,999        1.8 percent       $450       $450
     26,000 to 26,999 26,499 2.0 percent       $520       $520
     26,500 to 26,999        2.0 percent                  $530
     27,000 to 27,999 27,499 2.0 percent       $540       $540
     27,500 to 27,999        2.0 percent                  $550
     28,000 to 28,999 28,499 2.0 percent       $560       $560
     28,500 to 28,999        2.0 percent                  $570
     29,000 to 29,999 29,499 2.0 percent       $580       $580
     29,500 to 29,999        2.0 percent                  $590
     30,000 to 30,999 30,499 2.0 percent       $600       $600
     30,500 to 30,999        2.0 percent                  $610
     31,000 to 31,999 31,499 2.2 percent       $620       $620
     31,500 to 31,999        2.2 percent                  $630
     32,000 to 32,999 32,499 2.2 percent       $640       $640
     32,500 to 32,999        2.2 percent                  $650
     33,000 to 33,999        2.2 percent       $726       $700
     34,000 to 34,999        2.2 percent       $748       $600
     35,000 to 35,999        2.2 percent       $770       $500
     36,000 to 36,999        2.4 percent       $792       $400
     37,000 to 37,999        2.4 percent       $814       $300
     38,000 to 38,999        2.4 percent       $912       $200
     39,000 to 39,999        2.4 percent       $936       $100
    The payment made to a claimant shall be the amount of the 
state refund calculated pursuant to this subdivision, less the 
homestead credit given pursuant to section 273.13, subdivisions 
6, 7 and 14a. 
    Sec. 14.  Minnesota Statutes 1982, section 600.21, is 
amended to read: 
    600.21 [COPIES OF RECORD OF DEATH; RECORDATION.] 
    In all cases of joint tenancy in lands, and in all cases 
where any estate, title interest in, or lien upon, lands, has 
been or may be created, which estate, title interest, or lien 
was, or is, to continue only during the life of any person named 
or described in the instrument by which such estate, title, 
interest, or lien was created, a copy of the record of the death 
of any such joint tenant, or of the person upon whose life such 
estate, title, interest, or lien was, or is, limited, duly 
certified by any officer who is required by the law of the state 
or country in which such record is made, to keep a record of the 
death of persons occurring within the jurisdiction of such 
officer, may be recorded in the office of the county recorder of 
the county in which such lands are situated, and such certified 
copy or such record thereof in such office, or a duly certified 
copy of such last mentioned record, shall be prima facie 
evidence of the death of such person and the termination of such 
joint tenancy and of all such estate, title, interest, and lien 
as was, or is, limited upon the life of such person.  When a 
certified copy of such death certificate is attached to an 
affidavit of survivorship which, for decedents dying prior to 
January 1, 1980, has been duly certified by the commissioner of 
revenue, or an affidavit of survivorship for exempt homestead 
property in compliance with the provisions of section 291.14, 
subdivision 2, clause (4), for decedents dying prior to January 
1, 1980, the same shall, prior to recordation in the office of 
the county recorder or registrar of titles, be presented to the 
county auditor of the county wherein such estate, title, 
interest, or lien is situated and such county auditor shall note 
the transfer on his books and shall inscribe upon the instrument 
over his official signature the words "Transfer entered."  Until 
so presented and indication made thereon, said instrument shall 
not be entitled to record in the office of the county recorder 
or registrar of titles of said county.  
    Sec. 15.  Laws 1980, chapter 439, section 36, is amended to 
read:  
    Sec. 36.  [EFFECTIVE DATE.] Section 26 is effective the day 
after final enactment.  Section 34 is effective on and after 
December 31, 1983.  The remainder of this act is effective for 
estates of decedents dying after December 31, 1979.  
    Sec. 16.  
    Duties imposed upon a spouse or children of a decedent, the 
personal representative, or the county recorder or registrar of 
titles under Minnesota Statutes 1978, section 291.14, 
subdivision 2, clause (4) or subdivision 4 are abolished on and 
after December 31, 1983.  
    Sec. 17.  [INSTRUCTIONS TO REVISOR.] 
    In the next edition of Minnesota Statutes, the revisor of 
statutes shall substitute the phrase "this chapter" for the 
words "sections 290A.01 to 290A.20" or for the words "sections 
290A.01 to 290A.23" wherever those words occur in chapter 290A.  
    Sec. 18.  [REPEALER.] 
    (a) Minnesota Statutes 1983 Supplement, section 290A.16 is 
repealed.  
    (b) Laws 1983, chapter 207, section 6 is repealed.  
    Sec. 19.  [EFFECTIVE DATE.] 
    Sections 1, 3, 4, 5, 8, 9, and 18, clause (a), are 
effective for taxable years beginning after December 31, 1983. 
Sections 2 and 18, clause (b), are effective for taxable years 
beginning after December 31, 1982.  Sections 6, 7, and 17 are 
effective the day after final enactment.  Sections 10, 11, 12, 
and 13 are effective for claims based on rent paid in 1983 and 
thereafter and property taxes payable in 1984 and thereafter. 
Sections 14 to 16 are effective on and after December 31, 1983. 

                               ARTICLE 5 

                       CHILD SUPPORT WITHHOLDING 
    Section 1.  Minnesota Statutes 1982, section 290.50, 
subdivision 6, is amended to read: 
    Subd. 6.  [WITHHOLDING OF REFUNDS FROM CHILD SUPPORT 
DEBTORS.] Upon a finding by a court of this state that a person 
obligated to pay child support is delinquent in making payments, 
the amount of child support unpaid and owing including attorneys 
fees and costs incurred in ascertaining or collecting child 
support shall be withheld from a refund due the person under 
this section. The public agency responsible for child support 
enforcement or the parent or guardian of a child for whom the 
support is, attorneys fees and costs are owed may petition the 
district or county court for an order providing for the 
withholding of the amount of child support, attorneys fees and 
costs unpaid and owing as determined by court order.  The person 
from whom the refund may be withheld shall be notified of the 
petition pursuant to the rules of civil procedure prior to the 
issuance of an order pursuant to this subdivision.  The order 
may be granted on a showing to the court that required support 
payments, attorneys fees and costs have not been made when they 
were due.  
    On order of the court, the support money shall be withheld 
by the commissioner from the refund due to the person obligated 
to pay the support and the amount withheld shall be remitted to 
the public agency responsible for child support enforcement or 
to the parent or guardian petitioning on behalf of the child, 
provided that any delinquent tax obligations of the taxpayer 
owed to the revenue department shall be satisfied first.  Any 
amount received by the responsible public agency or the 
petitioning parent or guardian in excess of the amount of public 
assistance expended for the benefit of the child to be 
supported, or the amount of any support, attorneys fees and 
costs that had been the subject of the claim pursuant to this 
subdivision which has been paid by the taxpayer prior to the 
diversion of the refund, shall be remitted to the person 
entitled to the money.  If the refund is based on a joint or 
combined return, the portion of the refund that shall be 
remitted to the petitioner shall be the proportion of the total 
refund that equals the proportion of the total federal adjusted 
gross income of the spouses that is the federal adjusted gross 
income of the spouse who is delinquent in making the child 
support payments.  A petition filed pursuant to this subdivision 
shall be in effect with respect to any refunds due under this 
section during a period of one year from the date when the 
petition was filed until the support money, attorneys fees and 
costs have been paid in full or the court orders the 
commissioner to discontinue withholding the money from the 
refund due the person obligated to pay the support, attorneys 
fees and costs.  If a petition is filed pursuant to this 
subdivision and a claim is made pursuant to chapter 270A with 
respect to the same individual's refund and notices of both are 
received prior to the time when payment of the refund is made on 
either claim, the commissioner shall transmit the claims to the 
court that issued the order under this subdivision.  The court 
shall order that the claim relating to the liability that 
accrued first in time shall be paid first; any amount of the 
refund remaining shall then be applied to the other claim.  The 
provisions of section 290.61 shall not prohibit the exchange of 
information among the department, the petitioner, and the court 
to the extent necessary to accomplish the intent of this 
subdivision.  Not later than five days after the court has 
notified the department of its withholding order, the department 
shall send a written notification of the order to the person to 
whom the refund would otherwise be paid.  
    Sec. 2.  Laws 1982, chapter 523, article 4, section 2, is 
amended to read: 
    This article is effective the day following final enactment 
and shall terminate June 30, 1984. 
    Sec. 3.  [EFFECTIVE DATE.] 
    Section 1 is effective for court orders issued after May 
31, 1984.  Section 2 is effective the day after final enactment. 
    Approved April 25, 1984