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CHAPTER 14--H.F.No. 9

An act

relating to financing and operation of state and local government; providing conformity and nonconformity to certain federal tax law changes; modifying individual income and corporate franchise taxes, sales and use taxes, partnership taxes, special and excise taxes, property taxes, local government aids, and provisions related to local taxes, tax increment financing, public finance, and other miscellaneous taxes and tax provisions; modifying certain income tax credits and authorizing new credits; modifying and providing for partnership audits; providing for a pass-through entity tax; modifying sales tax exemptions; providing for reduction of accelerated sales tax payments; modifying vapor and tobacco tax provisions; modifying and providing certain property tax exemptions; modifying property classification provisions; modifying local government aid appropriations; modifying existing local taxes and authorizing new local taxes; modifying and authorizing certain tax increment financing provisions; providing provisions related to public finance; providing for a tax expenditure review commission and the required expiration of tax expenditures; increasing the budget reserve; creating a new government grant program; providing for Tribal-state relations; establishing a frontline worker pay working group; modifying lobbying activities; providing for certain disaster response; providing for compliance with federal law background checks for certain individuals with access to federal tax information; classifying data; making minor policy and technical changes; making appointments; requiring reports; modifying appropriations; appropriating money;

amending Minnesota Statutes 2020, sections 3.192; 3.8853, subdivision 2; 10A.01, subdivision 21; 16A.152, subdivision 2, as amended; 41A.19; 116J.8737, subdivisions 5, 12; 144F.01; 256B.76, subdivision 2, as amended if enacted; 270.41, subdivision 3a; 270.44; 270A.04, by adding a subdivision; 270B.13, by adding a subdivision; 270C.11, subdivisions 2, 4, 6; 270C.13, subdivision 1; 270C.22, subdivision 1; 270C.445, subdivisions 3, 6; 272.02, by adding a subdivision; 272.029, subdivision 2; 272.0295, subdivisions 2, 5; 273.063; 273.0755; 273.124, subdivisions 1, 9, 13, 14; 273.13, subdivisions 23, 25, 34; 273.18; 275.025, subdivisions 1, 2; 275.065, subdivision 3, by adding a subdivision; 275.066; 287.04; 289A.08, subdivision 7, by adding a subdivision; 289A.09, subdivision 2; 289A.20, subdivision 4; 289A.31, subdivision 1; 289A.37, subdivision 2; 289A.38, subdivisions 7, 8, 9, 10; 289A.42; 289A.60, subdivisions 15, 24, by adding a subdivision; 290.01, subdivisions 19, 31; 290.0121, subdivision 3; 290.0122, subdivision 8; 290.0132, by adding a subdivision; 290.06, subdivisions 2c, 22, by adding subdivisions; 290.0671, subdivision 1; 290.0681, subdivision 10; 290.0682; 290.31, subdivision 1; 290.92, subdivisions 1, 2a, 3, 4b, 4c, 5, 5a, 19, 20; 290.923, subdivision 9; 290.993; 290A.03, subdivision 3; 295.75, subdivision 2; 296A.06, subdivision 2; 297A.66, subdivision 3; 297A.67, by adding a subdivision; 297A.70, subdivision 13; 297A.71, subdivision 52, by adding a subdivision; 297A.75, subdivisions 1, 2, 3; 297A.99, subdivision 2; 297A.993, subdivision 2; 297F.01, subdivision 22b, by adding a subdivision; 297F.031; 297F.04, subdivision 2; 297F.05, by adding a subdivision; 297F.09, subdivisions 3, 4a, 7, 10; 297F.13, subdivision 4; 297F.17, subdivisions 1, 6; 297G.09, subdivision 9; 297G.16, subdivision 7; 297H.04, subdivision 2; 297H.05; 297I.20, by adding subdivisions; 298.001, by adding a subdivision; 298.24, subdivision 1; 298.285; 298.405, subdivision 1; 325F.781, subdivisions 1, 5, 6; 429.021, subdivision 1; 429.031, subdivision 3; 453A.04, subdivision 21, by adding a subdivision; 465.71; 469.074, by adding a subdivision; 469.176, by adding a subdivision; 469.1763, subdivisions 2, 3, 4; 469.319, subdivision 4; 475.56; 475.58, subdivision 3b; 475.60, subdivision 1; 475.67, subdivision 8; 477A.03, subdivision 2b; 477A.10; 477A.17; 609B.153; Laws 1963, chapter 305, sections 2, as amended; 3, as amended; 4, as amended; 5, as amended; 8, as amended; 9, as amended; 10, as amended; Laws 2009, chapter 88, article 2, section 46, subdivision 3, as amended; Laws 2017, First Special Session chapter 1, article 3, section 32, as amended; Laws 2019, First Special Session chapter 6, article 6, section 27; Laws 2020, Fifth Special Session chapter 3, article 3, section 5, subdivision 10; Laws 2021, First Special Session chapter 6, article 1, section 9; Laws 2021, First Special Session chapter 7, article 9, section 5; proposing coding for new law in Minnesota Statutes, chapters 3; 10; 41A; 116J; 116U; 289A; 290; 299C; 462A; 477A; repealing Minnesota Statutes 2020, sections 270C.17, subdivision 2; 469.055, subdivision 7.

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

ARTICLE 1

FEDERAL CONFORMITY; INDIVIDUAL INCOME
AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2020, section 116J.8737, subdivision 5, is amended to read:

Subd. 5.

Credit allowed.

(a) A qualified investor or qualified fund is eligible for a credit equal to 25 percent of the qualified investment in a qualified small business. Investments made by a pass-through entity qualify for a credit only if the entity is a qualified fund. The commissioner must not allocate deleted text begin more than $10,000,000 in creditsdeleted text end to qualified investors or qualified funds new text begin more than the dollar amount in credits allowed new text end for the taxable years listed in paragraph (i). For each taxable year, 50 percent must be allocated to credits for qualified investments in qualified greater Minnesota businesses and minority-owned, women-owned, or veteran-owned qualified small businesses in Minnesota. Any portion of a taxable year's credits that is reserved for qualified investments in greater Minnesota businesses and minority-owned, women-owned, or veteran-owned qualified small businesses in Minnesota that is not allocated by September 30 of the taxable year is available for allocation to other credit applications beginning on October 1. Any portion of a taxable year's credits that is not allocated by the commissioner does not cancel and may be carried forward to subsequent taxable years until all credits have been allocated.

(b) The commissioner may not allocate more than a total maximum amount in credits for a taxable year to a qualified investor for the investor's cumulative qualified investments as an individual qualified investor and as an investor in a qualified fund; for married couples filing joint returns the maximum is $250,000, and for all other filers the maximum is $125,000. The commissioner may not allocate more than a total of $1,000,000 in credits over all taxable years for qualified investments in any one qualified small business.

(c) The commissioner may not allocate a credit to a qualified investor either as an individual qualified investor or as an investor in a qualified fund if, at the time the investment is proposed:

(1) the investor is an officer or principal of the qualified small business; or

(2) the investor, either individually or in combination with one or more members of the investor's family, owns, controls, or holds the power to vote 20 percent or more of the outstanding securities of the qualified small business.

A member of the family of an individual disqualified by this paragraph is not eligible for a credit under this section. For a married couple filing a joint return, the limitations in this paragraph apply collectively to the investor and spouse. For purposes of determining the ownership interest of an investor under this paragraph, the rules under section 267(c) and 267(e) of the Internal Revenue Code apply.

(d) Applications for tax credits deleted text begin for 2010deleted text end must be made available on the department's website deleted text begin by September 1, 2010, and the department must begin accepting applications by September 1, 2010. Applications for subsequent years must be made availabledeleted text end by November 1 of the preceding year.

(e) Qualified investors and qualified funds must apply to the commissioner for tax credits. Tax credits must be allocated to qualified investors or qualified funds in the order that the tax credit request applications are filed with the department. The commissioner must approve or reject tax credit request applications within 15 days of receiving the application. The investment specified in the application must be made within 60 days of the allocation of the credits. If the investment is not made within 60 days, the credit allocation is canceled and available for reallocation. A qualified investor or qualified fund that fails to invest as specified in the application, within 60 days of allocation of the credits, must notify the commissioner of the failure to invest within five business days of the expiration of the 60-day investment period.

(f) All tax credit request applications filed with the department on the same day must be treated as having been filed contemporaneously. If two or more qualified investors or qualified funds file tax credit request applications on the same day, and the aggregate amount of credit allocation claims exceeds the aggregate limit of credits under this section or the lesser amount of credits that remain unallocated on that day, then the credits must be allocated among the qualified investors or qualified funds who filed on that day on a pro rata basis with respect to the amounts claimed. The pro rata allocation for any one qualified investor or qualified fund is the product obtained by multiplying a fraction, the numerator of which is the amount of the credit allocation claim filed on behalf of a qualified investor and the denominator of which is the total of all credit allocation claims filed on behalf of all applicants on that day, by the amount of credits that remain unallocated on that day for the taxable year.

(g) A qualified investor or qualified fund, or a qualified small business acting on their behalf, must notify the commissioner when an investment for which credits were allocated has been made, and the taxable year in which the investment was made. A qualified fund must also provide the commissioner with a statement indicating the amount invested by each investor in the qualified fund based on each investor's share of the assets of the qualified fund at the time of the qualified investment. After receiving notification that the investment was made, the commissioner must issue credit certificates for the taxable year in which the investment was made to the qualified investor or, for an investment made by a qualified fund, to each qualified investor who is an investor in the fund. The certificate must state that the credit is subject to revocation if the qualified investor or qualified fund does not hold the investment in the qualified small business for at least three years, consisting of the calendar year in which the investment was made and the two following years. The three-year holding period does not apply if:

(1) the investment by the qualified investor or qualified fund becomes worthless before the end of the three-year period;

(2) 80 percent or more of the assets of the qualified small business is sold before the end of the three-year period;

(3) the qualified small business is sold before the end of the three-year period;

(4) the qualified small business's common stock begins trading on a public exchange before the end of the three-year period; or

(5) the qualified investor dies before the end of the three-year period.

(h) The commissioner must notify the commissioner of revenue of credit certificates issued under this section.

(i) The credit allowed under this subdivision is effective deleted text begin for each of the following taxable yearsdeleted text end new text begin as followsnew text end :

deleted text begin (1) taxable years beginning after December 31, 2018, and before January 1, 2020; and deleted text end

deleted text begin (2)deleted text end new text begin (1) $10,000,000 fornew text end taxable years beginning after December 31, 2020, and before January 1, 2022deleted text begin .deleted text end new text begin ; andnew text end

new text begin (2) $5,000,000 for taxable years beginning after December 31, 2021, and before January 1, 2023. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2020, section 116J.8737, subdivision 12, is amended to read:

Subd. 12.

Sunset.

This section expires for taxable years beginning after December 31, deleted text begin 2021deleted text end new text begin 2022new text end , except that reporting requirements under subdivision 6 and revocation of credits under subdivision 7 remain in effect through deleted text begin 2023deleted text end new text begin 2024new text end for qualified investors and qualified funds, and through deleted text begin 2025deleted text end new text begin 2026new text end for qualified small businesses, reporting requirements under subdivision 9 remain in effect through deleted text begin 2021deleted text end new text begin 2022new text end , and the appropriation in subdivision 11 remains in effect through deleted text begin 2025deleted text end new text begin 2026new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

new text begin [116U.27] FILM PRODUCTION CREDIT. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (b) "Allocation certificate" means a certificate issued by the commissioner to a taxpayer upon receipt of an initial application for a credit for a project that has not yet been completed. new text end

new text begin (c) "Application" means the application for a credit under subdivision 4. new text end

new text begin (d) "Commissioner" means the commissioner of employment and economic development. new text end

new text begin (e) "Credit certificate" means a certificate issued by the commissioner upon submission of the cost verification report in subdivision 4, paragraph (e). new text end

new text begin (f) "Eligible production costs" means eligible production costs as defined in section 116U.26, paragraph (b), clause (1), incurred in Minnesota that are directly attributable to the production of a film project in Minnesota. new text end

new text begin (g) "Film" has the meaning given in section 116U.26, paragraph (b), clause (2). new text end

new text begin (h) "Project" means a film: new text end

new text begin (1) that includes the promotion of Minnesota; new text end

new text begin (2) for which the taxpayer has expended at least $1,000,000 in the taxable year for eligible production costs; and new text end

new text begin (3) to the extent practicable, that employs Minnesota residents. new text end

new text begin (i) "Promotion of Minnesota" or "promotion" means visible display of a static or animated logo, approved by the commissioner and lasting approximately five seconds, that promotes Minnesota within its presentation in the end credits before the below-the-line crew crawl for the life of the project. new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin A taxpayer is eligible for a credit up to 25 percent of eligible production costs paid in a taxable year. A taxpayer may only claim a credit if the taxpayer was issued a credit certificate under subdivision 4. new text end

new text begin Subd. 3. new text end

new text begin Credit assignable. new text end

new text begin The recipient of a credit certificate may assign the certificate to another taxpayer before any amount of the credit is claimed. The assignee is allowed the credit under section 290.06, subdivision 39, or 297I.20, subdivision 4. An assignment is not valid unless the assignee notifies the commissioner of revenue within 30 days of the date that the assignment is made. The commissioner of revenue shall prescribe the forms necessary for notifying the commissioner of revenue of the assignment of a credit certificate and for claiming a credit by assignment. new text end

new text begin Subd. 4. new text end

new text begin Applications; allocations. new text end

new text begin (a) To qualify for a credit under this section, a taxpayer must submit to the commissioner an application for a credit in the form prescribed by the commissioner, in consultation with the commissioner of revenue. new text end

new text begin (b) Upon approving an application for a credit that meets the requirements of this section, the commissioner shall issue allocation certificates that: new text end

new text begin (1) verify eligibility for the credit; new text end

new text begin (2) state the amount of credit anticipated for the eligible project, with the credit amount up to 25 percent of eligible project costs; and new text end

new text begin (3) state the taxable year in which the credit is allocated. new text end

new text begin The commissioner must consult with Minnesota Film and TV Board prior to issuing an allocation certificate. new text end

new text begin (c) The commissioner must not issue allocation certificates for more than $4,950,000 of credits each year. If the entire amount is not allocated in that taxable year, any remaining amount is available for allocation for the four following taxable years until the entire allocation has been made. The commissioner must not award any credits for taxable years beginning after December 31, 2024, and any unallocated amounts cancel on that date. new text end

new text begin (d) The commissioner must allocate credits on a first-come, first-served basis. new text end

new text begin (e) Upon completion of a project, the taxpayer shall submit to the commissioner a report prepared by an independent certified public accountant licensed in the state of Minnesota to verify the amount of eligible production costs related to the project. The report must be prepared in accordance with generally accepted accounting principles. Upon receipt and review of the cost verification report, the commissioner shall determine the final amount of eligible production costs and issue a credit certificate to the taxpayer. The credit may not exceed the anticipated credit amount on the allocation certificate. If the credit is less than the anticipated amount on the allocation credit, the difference is returned to the amount available for allocation under paragraph (c). To claim the credit under section 290.06, subdivision 39, or 297I.20, subdivision 4, a taxpayer must include a copy of the credit certificate as part of the taxpayer's return. new text end

new text begin Subd. 5. new text end

new text begin Report required. new text end

new text begin By January 15, 2025, the commissioner of revenue, in consultation with the commissioner, must provide a report to the chairs and ranking minority members of the legislative committees with jurisdiction over economic development and taxes. The report must comply with sections 3.195 and 3.197, and must detail the following: new text end

new text begin (1) the amount of credit certifications issued annually; new text end

new text begin (2) the number of applications submitted, the number of allocation certificates issued, the amount of allocation certificates issued, the number of reports submitted upon completion of a project, and the number of credit certificates issued; new text end

new text begin (3) the types of projects eligible for the credit; new text end

new text begin (4) the total economic impact of the credit in Minnesota, including the calendar year over calendar year percentage changes in the number of jobs held by Minnesota residents in businesses having a primary North American Industry Classification System code of 512110 as reported to the commissioner, for calendar years 2019 through 2023; new text end

new text begin (5) the number of taxpayers per tax type which are assignees of credit certificates under subdivision 3; new text end

new text begin (6) annual Minnesota taxes paid by businesses having a primary North American Industry Classification System code of 512110, for taxable years beginning after December 31, 2018, and before January 1, 2024; and new text end

new text begin (7) any other information the commissioner of revenue, in consultation with the commissioner, deems necessary for purposes of claiming and administering the credit. new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin Beginning in fiscal year 2022, $50,000 is annually appropriated from the general fund to the commissioner of revenue for a transfer to the Department of Employment and Economic Development for costs associated with personnel and administrative expenses related to administering the credit. This subdivision expires on June 30, 2025. new text end

new text begin Subd. 7. new text end

new text begin Expiration. new text end

new text begin Subdivisions 1 to 5 expire January 1, 2025, for taxable years beginning after December 31, 2024. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020, and before January 1, 2025, except that the requirement to provide the report required in subdivision 5 expires July 1, 2025. new text end

Sec. 4.

Minnesota Statutes 2020, section 290.01, subdivision 19, is amended to read:

Subd. 19.

Net income.

(a) For a trust or estate taxable under section 290.03, and a corporation taxable under section 290.02, the term "net income" means the federal taxable income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through the date named in this subdivision, incorporating the federal effective dates of changes to the Internal Revenue Code and any elections made by the taxpayer in accordance with the Internal Revenue Code in determining federal taxable income for federal income tax purposes, and with the modifications provided in sections 290.0131 to 290.0136.

(b) For an individual, the term "net income" means federal adjusted gross income with the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

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

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

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

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

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

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

(f) The Internal Revenue Code of 1986, as amended through December 31, 2018, deleted text begin shall be in effectdeleted text end new text begin appliesnew text end for taxable years beginning after December 31, 1996new text begin , except the sections of federal law in section 290.0111 shall also applynew text end .

(g) Except as otherwise provided, references to the Internal Revenue Code in this subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of determining net income for the applicable year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2020, section 290.01, subdivision 31, is amended to read:

Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through December 31, 2018new text begin , except the sections of federal law in section 290.0111 shall also applynew text end . Internal Revenue Code also includes any uncodified provision in federal law that relates to provisions of the Internal Revenue Code that are incorporated into Minnesota law.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

new text begin [290.0111] TEMPORARY CONFORMITY TO CERTAIN FEDERAL TAX CHANGES. new text end

new text begin Subdivision 1. new text end

new text begin Adopting Internal Revenue Code changes. new text end

new text begin For the purposes of this chapter, "Internal Revenue Code," as defined in section 290.01, subdivisions 19 and 31, includes the sections of federal law specified in this section as enacted or amended through March 31, 2021. new text end

new text begin Subd. 2. new text end

new text begin Further Consolidated Appropriations Act, 2020. new text end

new text begin (a) "Internal Revenue Code" includes the following provisions of the Taxpayer Certainty and Disaster Tax Relief Act of 2019 in Public Law 116-94: new text end

new text begin (1) section 101; new text end

new text begin (2) section 116; new text end

new text begin (3) section 117; new text end

new text begin (4) section 130; new text end

new text begin (5) section 131; new text end

new text begin (6) section 132; new text end

new text begin (7) section 144; new text end

new text begin (8) section 201; new text end

new text begin (9) section 202; and new text end

new text begin (10) section 204. new text end

new text begin (b) "Internal Revenue Code" includes section 301 of the Setting Every Community Up for Retirement Enhancement Act of 2019 in Public Law 116-94. new text end

new text begin Subd. 3. new text end

new text begin CARES Act. new text end

new text begin "Internal Revenue Code" includes the following sections of Public Law 116-136: new text end

new text begin (1) section 1106(i); and new text end

new text begin (2) section 2202. new text end

new text begin Subd. 4. new text end

new text begin Consolidated Appropriations Act, 2021. new text end

new text begin (a) "Internal Revenue Code" includes the following provisions of the COVID-related Tax Relief Act of 2020 in Public Law 116-260: new text end

new text begin (1) section 275; new text end

new text begin (2) section 276; and new text end

new text begin (3) section 277. new text end

new text begin (b) For taxable years beginning after December 31, 2019, and before January 1, 2021, "Internal Revenue Code" includes sections 278(b) and 278(c) of the COVID-related Tax Relief Act of 2020 in Public Law 116-260. new text end

new text begin Subd. 5. new text end

new text begin American Rescue Plan Act. new text end

new text begin "Internal Revenue Code" includes section 9042 of Public Law 117-2. new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) Except as specified in subdivision 4, paragraph (b), this section is effective the day following final enactment, except the changes incorporated by federal changes are effective retroactively at the same time as the changes were effective for federal purposes. new text end

new text begin (b) Subdivision 4, paragraph (b), is effective retroactively for taxable years beginning after December 31, 2019, and before January 1, 2021. new text end

Sec. 7.

Minnesota Statutes 2020, section 290.0122, subdivision 8, is amended to read:

Subd. 8.

Losses.

A taxpayer is allowed a deduction for lossesdeleted text begin . The deduction equals the amountdeleted text end allowed under deleted text begin sections 165(d) anddeleted text end new text begin section 165(a) of the Internal Revenue Code, including the limitation provided by section 67(b)(3) of the Internal Revenue Code, for the following:new text end

new text begin (1) losses described in section 165(c)(3) of the Internal Revenue Code, including the provisions of sectionnew text end 165(h) of the Internal Revenue Code, new text begin but new text end disregarding deleted text begin the limitation on personal casualty losses indeleted text end paragraph (h)(5)deleted text begin .deleted text end new text begin ; andnew text end

new text begin (2) losses described in section 165(d) of the Internal Revenue Code. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision to read:

new text begin Subd. 30. new text end

new text begin Volunteer driver reimbursement. new text end

new text begin (a) A taxpayer is allowed a subtraction equal to the amount of mileage reimbursement paid by a charitable organization to the taxpayer for work as a volunteer driver. The subtraction is limited to amounts paid by the organization that: new text end

new text begin (1) are in excess of the mileage rate for use of an automobile in rendering gratuitous services to a charitable organization under section 170(i) of the Internal Revenue Code; and new text end

new text begin (2) do not exceed the standard mileage rate for businesses established under Code of Federal Regulations, title 26, section 1.274-5(j)(2). new text end

new text begin (b) For the purposes of this section, "charitable organization" means an organization eligible for a charitable contribution under section 170(c) of the Internal Revenue Code. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 9.

Minnesota Statutes 2020, section 290.06, is amended by adding a subdivision to read:

new text begin Subd. 39. new text end

new text begin Film production credit. new text end

new text begin (a) A taxpayer, including a taxpayer to whom a credit has been assigned under section 116U.27, subdivision 3, may claim a credit against the tax imposed by this chapter equal to the amount certified on a credit certificate under section 116U.27, subject to the limitations in this subdivision. new text end

new text begin (b) The credit is limited to the liability for tax, as computed under this chapter, for the taxable year. If the amount of the credit determined under this subdivision for any taxable year exceeds this limitation, the excess is a film production credit carryover to each of the five succeeding taxable years. The entire amount of the excess unused credit for the taxable year is carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried. The amount of the unused credit that may be added under this paragraph must not exceed the taxpayer's liability for tax, less any film production credit for the taxable year. new text end

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

new text begin (d) Notwithstanding the approval and certification by the commissioner of employment and economic development under section 116U.27, the commissioner may utilize any audit and examination powers under chapter 270C or 289A to the extent necessary to verify that the taxpayer is eligible for the credit and to assess the amount of any improperly claimed credit. The commissioner may only assess the original recipient of the credit certificate for the amount of improperly claimed credits. The commissioner may not assess a credit certificate assignee for any amount of improperly claimed credits, and an assignee's claim for credit is not affected by the commissioner's assessment of improperly claimed credits against the assignor. new text end

new text begin (e) This subdivision expires January 1, 2025, for taxable years beginning after December 31, 2024, except that the expiration of this section does not affect the commissioner of revenue's authority to audit or power of examination and assessment for credits claimed under this subdivision. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020, and before January 1, 2025. new text end

Sec. 10.

Minnesota Statutes 2020, section 290.0671, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

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

(1) a taxpayer with no qualifying children who has attained the age of deleted text begin 21deleted text end new text begin 19new text end , but not attained age 65 before the close of the taxable year and is otherwise eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit; and

(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted gross income exceeds the income limitation under section 32 of the Internal Revenue Code.

(b) For individuals with no qualifying children, the credit equals 3.9 percent of the first $7,150 of earned income. The credit is reduced by 2.0 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first $11,950 of earned income. The credit is reduced by 6.0 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

(d) For individuals with two qualifying children, the credit equals 11 percent of the first $19,600 of earned income. The credit is reduced by 10.5 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

(e) For individuals with three or more qualifying children, the credit equals 12.5 percent of the first $20,000 of earned income. The credit is reduced by 10.5 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

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

(g) For a person who was a resident for the entire tax year and has earned income not subject to tax under this chapter, including income excluded under section 290.0132, subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross income reduced by the earned income not subject to tax under this chapter over federal adjusted gross income. For purposes of this paragraph, the following clauses are not considered "earned income not subject to tax under this chapter":

(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;

(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and

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

(h) For the purposes of this section, the phaseout threshold equals:

(1) $14,570 for married taxpayers filing joint returns with no qualifying children;

(2) $8,730 for all other taxpayers with no qualifying children;

(3) $28,610 for married taxpayers filing joint returns with one qualifying child;

(4) $22,770 for all other taxpayers with one qualifying child;

(5) $32,840 for married taxpayers filing joint returns with two qualifying children;

(6) $27,000 for all other taxpayers with two qualifying children;

(7) $33,140 for married taxpayers filing joint returns with three or more qualifying children; and

(8) $27,300 for all other taxpayers with three or more qualifying children.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 11.

Minnesota Statutes 2020, section 290.0681, subdivision 10, is amended to read:

Subd. 10.

Sunset.

This section expires after fiscal year deleted text begin 2021deleted text end new text begin 2022new text end , except that the office's authority to issue credit certificates under subdivision 4 based on allocation certificates that were issued before fiscal year deleted text begin 2022deleted text end new text begin 2023new text end remains in effect through deleted text begin 2024deleted text end new text begin 2025new text end , and the reporting requirements in subdivision 9 remain in effect through the year following the year in which all allocation certificates have either been canceled or resulted in issuance of credit certificates, or deleted text begin 2025deleted text end new text begin 2026new text end , whichever is earlier.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2020, section 290.0682, is amended to read:

290.0682 STUDENT LOAN CREDIT.

Subdivision 1.

Definitions.

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

(b) "Adjusted gross income" means federal adjusted gross income as defined in section 62 of the Internal Revenue Code.

(c) "Earned income" has the meaning given in section deleted text begin 32(c) of the Internal Revenue Codedeleted text end new text begin 290.0675, subdivision 1, paragraph (b)new text end .

(d) "Eligible individual" means a resident individual with one or more qualified education loans related to an undergraduate or graduate degree program at a postsecondary educational institution.

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

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

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

Subd. 2.

Credit allowed.

(a) An eligible individual is allowed a credit against the tax due under this chapter.

(b) The credit for an eligible individual equals the least of:

(1) eligible loan payments minus ten percent of an amount equal to adjusted gross income in excess of $10,000, but in no case less than zero;

(2) the earned income for the taxable year of the eligible individual, if any;

(3) the sum of:

(i) the interest portion of eligible loan payments made during the taxable year; and

(ii) ten percent of the original loan amount of all qualified education loans of the eligible individual; or

(4) $500.

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

(d) In the case of a married couple, each spouse is eligible for the credit in this section.new text begin For the purposes of paragraph (b), for married taxpayers filing joint returns, each spouse's adjusted gross income equals the spouse's percentage share of the couple's earned income, multiplied by the couple's combined adjusted gross income.new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 13.

new text begin [290.0683] MINNESOTA HOUSING TAX CREDIT. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (b) "Agency" means the Minnesota Housing Finance Agency. new text end

new text begin (c) "Minnesota housing tax credit contribution account" or "account" means the account established in section 462A.40. new text end

new text begin (d) "Qualified project" means a project that qualifies for a grant or loan under section 462A.40. new text end

new text begin (e) "Taxpayer" means a taxpayer as defined in section 290.01, subdivision 6, or a taxpayer as defined in section 297I.01, subdivision 16. new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) A taxpayer is allowed a credit against the tax imposed under this chapter or the premiums tax under chapter 297I for contributions of no less than $1,000 and no more than $2,000,000 to the Minnesota housing tax credit contribution account. The credit equals 85 percent of the amount the taxpayer contributed to the account during the taxable year. new text end

new text begin (b) The credit may be claimed only after certification by the agency as provided in subdivision 3. new text end

new text begin (c) To receive the credit, a taxpayer must claim the credit in the manner prescribed by the commissioner and file with the return a copy of the credit certificate issued by the agency under subdivision 3, paragraph (c). new text end

new text begin (d) The taxpayer must claim the credit for the taxable year in which the contribution payment is received by the account. new text end

new text begin (e) If the amount of the credit under this section exceeds the taxpayer's liability for tax under this chapter, the excess is a credit carryover to each of the ten succeeding taxable years. The entire amount of the excess unused credit for the taxable year must be carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried. The amount of the unused credit that may be added under this paragraph may not exceed the taxpayer's liability for tax, less any credit for the current taxable year. new text end

new text begin (f) The contribution amount used to calculate the credit under this section may not be used to calculate any other state income tax deduction or credit allowed by law. new text end

new text begin (g) For nonresidents and part-year residents, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e). new text end

new text begin Subd. 3. new text end

new text begin Allocation. new text end

new text begin (a) To qualify for the credit, a taxpayer must contribute to the Minnesota housing tax credit contribution account. A taxpayer may indicate that a contribution is intended for a specific qualified project. A taxpayer is prohibited from contributing to certain projects as provided in section 462A.40, subdivision 3. new text end

new text begin (b) The aggregate amount of tax credits allowed to all eligible contributors is limited to $9,900,000 annually. new text end

new text begin (c) Within 30 days after a taxpayer contributes to the account, the agency must file with the contributing taxpayer a credit certificate statement or return any amounts to the taxpayer as provided in this paragraph. The agency must send a copy of the credit certificate to the commissioner. If there are insufficient credits to match the contribution, the agency must not issue a credit certificate for the amount of the contribution for which there are insufficient credits, and must return that amount to the taxpayer before issuing any credit certificate. new text end

new text begin (d) The credit certificate must state the dollar amount of the contribution made by the taxpayer, the date the payment was received by the account, and indicate if the contribution was intended for a specific qualified project. new text end

new text begin Subd. 4. new text end

new text begin Partnerships; multiple owners. new text end

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

new text begin Subd. 5. new text end

new text begin Recapture. new text end

new text begin (a) Credits claimed under this section are not subject to recapture. new text end

new text begin (b) If a grant or loan made under section 462A.40 is canceled or recaptured, the grant or loan is returned to the account. The agency is not required to return contributions to taxpayers who indicated that a contribution was intended for a project for which the loan or grant is recaptured or canceled. new text end

new text begin Subd. 6. new text end

new text begin Audit powers. new text end

new text begin Notwithstanding the credit certificate issued by the commissioner of the Minnesota Housing Finance Agency under subdivision 3, the commissioner may use any audit and examination powers under chapter 270C or 289A to the extent necessary to verify that the taxpayer is eligible for the credit and to assess for the amount of any improperly claimed credit. new text end

new text begin Subd. 7. new text end

new text begin Sunset. new text end

new text begin This section expires after December 31, 2028, except that the agency's authority to issue credit certificates under subdivision 3 based on contributions received before January 1, 2029, and allocation certificates that were issued before February 1, 2029, remains in effect through January 1, 2030. The reporting requirements in section 462A.40, subdivision 5, remain in effect through the year following the year in which all allocation certificates have either been canceled or resulted in issuance of credit certificates, or January 1, 2031, whichever is earlier. The expiration of this section does not affect the commissioner's authority to audit or power of examination and assessment for credits claimed under this section. new text end

new text begin Subd. 8. new text end

new text begin Appropriation. new text end

new text begin Beginning in fiscal year 2023, $100,000 is annually appropriated from the general fund to the commissioner of revenue for a transfer to the Minnesota Housing Finance Agency for costs associated with personnel and administrative expenses related to administering the credit. This subdivision expires on June 30, 2028. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2022. new text end

Sec. 14.

Minnesota Statutes 2020, section 297I.20, is amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Film production credit. new text end

new text begin (a) A taxpayer may claim a credit against the premiums tax imposed under this chapter equal to the amount indicated on the credit certificate statement issued to the company under section 116U.27. If the amount of the credit exceeds the taxpayer's liability for tax under this chapter, the excess is a credit carryover to each of the five succeeding taxable years. The entire amount of the excess unused credit for the taxable year must be carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried. This credit does not affect the calculation of fire state aid under section 477B.03 and police state aid under section 477C.03. new text end

new text begin (b) This subdivision expires January 1, 2025, for taxable years beginning after and premiums received after December 31, 2024. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after and for premiums received after December 31, 2020, and before January 1, 2025. new text end

Sec. 15.

Minnesota Statutes 2020, section 297I.20, is amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Minnesota housing tax credit. new text end

new text begin A taxpayer may claim a credit against the premiums tax imposed under this chapter equal to the amount indicated on the credit certificate statement issued to the taxpayer under section 290.0683. If the amount of the credit exceeds the liability for tax under this chapter, the excess is a credit carryover to each of the ten succeeding taxable years. The entire amount of the excess unused credit for the taxable year must be carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried. This credit does not affect the calculation of fire state aid under section 477B.03 and police state aid under section 477C.03. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after and for premiums received after December 31, 2022, and before January 1, 2029. new text end

Sec. 16.

new text begin [462A.40] MINNESOTA HOUSING TAX CREDIT CONTRIBUTION ACCOUNT. new text end

new text begin Subdivision 1. new text end

new text begin Account created. new text end

new text begin The Minnesota housing tax credit contribution account is created in the housing development fund in the state treasury. The account is administered by the Minnesota Housing Finance Agency. Amounts contributed to the account are appropriated to the agency. The agency may use the amounts appropriated to direct disbursements from the account as loans or grants to eligible recipients as provided in this section. new text end

new text begin Subd. 2. new text end

new text begin Use of funds; grant and loan program. new text end

new text begin (a) The agency may award grants and loans to be used for multifamily and single family developments for persons and families of low and moderate income. Allowable use of the funds include: gap financing, as defined in section 462A.33, subdivision 1; new construction; acquisition; rehabilitation; demolition or removal of existing structures; construction financing; permanent financing; interest rate reduction; and refinancing. new text end

new text begin (b) The agency may give preference for grants and loans to comparable proposals that include regulatory changes or waivers that result in identifiable cost avoidance or cost reductions, including but not limited to increased density, flexibility in site development standards, or zoning code requirements. new text end

new text begin (c) The agency shall separately set aside: new text end

new text begin (1) at least ten percent of the financing under this section for housing units located in a township or city with a population of 2,500 or less that is located outside the metropolitan area, as defined in section 473.121, subdivision 2; new text end

new text begin (2) at least 35 percent of the financing under this section for housing for persons and families whose income is 50 percent or less of the area median income for the applicable county or metropolitan area as published by the Department of Housing and Urban Development, as adjusted for household size; and new text end

new text begin (3) at least 25 percent of the financing under this section for single-family housing. new text end

new text begin (d) If by September 1 of each year the agency does not receive requests to use all of the amounts set aside under paragraph (c), the agency may use any remaining financing for other projects eligible under this section. new text end

new text begin Subd. 3. new text end

new text begin Eligible recipients; definitions; restrictions; use of funds. new text end

new text begin (a) The agency may award a loan to any recipient that qualifies under subdivision 2. The agency must not award a grant to a disqualified individual or disqualified business. new text end

new text begin (b) For the purposes of this subdivision disqualified individual means an individual who: new text end

new text begin (1) made a contribution to the account in the current or prior taxable year and received a credit certificate; new text end

new text begin (2) owns the housing for which the grant or loan will be used and is using that housing as their domicile; new text end

new text begin (3) meets the following criteria: new text end

new text begin (i) the individual is an officer or principal of a business entity; and new text end

new text begin (ii) that business entity made a contribution to the account in the current or previous taxable year and received a credit certificate; or new text end

new text begin (4) meets the following criteria: new text end

new text begin (i) the individual owns, controls, or holds the power to vote 20 percent or more of the outstanding securities of a business entity; and new text end

new text begin (ii) that business entity made a contribution to the account in the current or previous taxable year and received a credit certificate. new text end

new text begin (c) For the purposes of this subdivision disqualified business means a business entity that: new text end

new text begin (1) made a contribution to the account in the current or prior taxable year and received a credit certificate; new text end

new text begin (2) has an officer or principal who is an individual who made a contribution to the account in the current or previous taxable year and received a credit certificate; or new text end

new text begin (3) meets the following criteria: new text end

new text begin (i) the business entity is owned, controlled, or is subject to the power to vote 20 percent or more of the outstanding securities by an individual or business entity; and new text end

new text begin (ii) that controlling individual or business entity made a contribution to the account in the current or previous taxable year and received a credit certificate. new text end

new text begin (d) The disqualifications in paragraphs (b) and (c) apply if the taxpayer would be disqualified either individually or in combination with one or more members of the taxpayer's family, as defined in the Internal Revenue Code, section 267(c)(4). For a married couple filing a joint return, the limitations in this paragraph apply collectively to the taxpayer and spouse. For purposes of determining the ownership interest of a taxpayer under paragraph (a), clause (4), the rules under section 267(c) and 267(e) of the Internal Revenue Code apply. new text end

new text begin (e) Before applying for a grant or loan, all recipients must sign a disclosure that the disqualifications under this subdivision do not apply. The Minnesota Housing Finance Agency must prescribe the form of the disclosure. new text end

new text begin (f) The agency may award grants or loans to a city as defined in section 462A.03, subdivision 21; a federally recognized American Indian tribe or subdivision located in Minnesota; a tribal housing corporation; a private developer; a nonprofit organization; a housing and redevelopment authority under sections 469.001 to 469.047; a public housing authority or agency authorized by law to exercise any of the powers granted by sections 469.001 to 469.047; or the owner of the housing. The provisions of subdivision 2, and paragraphs (a) to (e) and (g) of this subdivision, regarding the use of funds and eligible recipients apply to grants and loans awarded under this paragraph. new text end

new text begin (g) Except for the set-aside provided in subdivision 2, paragraph (d), eligible recipients must use the funds to serve households that meet the income limits as provided in section 462A.33, subdivision 5. new text end

new text begin Subd. 4. new text end

new text begin Recapture. new text end

new text begin A loan or grant awarded under this section is subject to repayment or recapture under rules adopted by the agency. Any amount of a loan or grant that is repaid or recaptured must be redeposited in the account and is not returned to the taxpayer who made the contribution. new text end

new text begin Subd. 5. new text end

new text begin Report. new text end

new text begin The agency shall report by January 15 each year to the chairs and ranking minority members of the legislative policy and finance committees with jurisdiction over housing on the tax credits and financing provided in the previous fiscal year. The report shall provide a breakdown of the tax credits, grants, and loans by region of the state. The report shall also include information on planned financing in the current fiscal year. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2022. new text end

Sec. 17.

new text begin CLARIFICATION OF SECTION 179 EXPENSING CONFORMITY. new text end

new text begin For taxable years beginning after December 31, 2019, no addition is required under Minnesota Statutes, sections 290.0131, subdivision 10, and 290.0133, subdivision 12, for property placed in service in taxable years beginning before January 1, 2020, including the following: new text end

new text begin (1) the addition for carryover amounts pursuant to section 179(b)(3) of the Internal Revenue Code for property placed in service in taxable years beginning before January 1, 2020; and new text end

new text begin (2) the addition for property placed in service in taxable years beginning before January 1, 2020, resulting from being a shareholder or partner in an S-corporation or partnership with a taxable year that began before January 1, 2020. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2019. new text end

ARTICLE 2

PARTNERSHIP AUDITS

Section 1.

Minnesota Statutes 2020, section 270C.445, subdivision 6, is amended to read:

Subd. 6.

Enforcement; administrative order; penalties; cease and desist.

(a) The commissioner may impose an administrative penalty of not more than $1,000 per violation of subdivision 3 or 5, or section 270C.4451, provided that a penalty may not be imposed for any conduct for which a tax preparer penalty is imposed under section 289A.60, subdivision 13. The commissioner may terminate a tax preparer's authority to transmit returns electronically to the state, if the commissioner determines the tax preparer engaged in a pattern and practice of violating this section. Imposition of a penalty under this paragraph is subject to the contested case procedure under chapter 14. The commissioner shall collect the penalty in the same manner as the income tax. There is no right to make a claim for refund under section 289A.50 of the penalty imposed under this paragraph. Penalties imposed under this paragraph are public data.

(b) In addition to the penalty under paragraph (a), if the commissioner determines that a tax preparer has violated subdivision 3 or 5, or section 270C.4451, the commissioner may issue an administrative order to the tax preparer requiring the tax preparer to cease and desist from committing the violation. The administrative order may include an administrative penalty provided in paragraph (a).

(c) If the commissioner issues an administrative order under paragraph (b), the commissioner must send the order to the tax preparer addressed to the last known address of the tax preparer.

(d) A cease and desist order under paragraph (b) must:

(1) describe the act, conduct, or practice committed and include a reference to the law that the act, conduct, or practice violates; and

(2) provide notice that the tax preparer may request a hearing as provided in this subdivision.

(e) Within 30 days after the commissioner issues an administrative order under paragraph (b), the tax preparer may request a hearing to review the commissioner's action. The request for hearing must be made in writing and must be served on the commissioner at the address specified in the order. The hearing request must specifically state the reasons for seeking review of the order. The date on which a request for hearing is served by mail is the postmark date on the envelope in which the request for hearing is mailed.

(f) If a tax preparer does not timely request a hearing regarding an administrative order issued under paragraph (b), the order becomes a final order of the commissioner and is not subject to review by any court or agency.

(g) If a tax preparer timely requests a hearing regarding an administrative order issued under paragraph (b), the hearing must be commenced within ten days after the commissioner receives the request for a hearing.

(h) A hearing timely requested under paragraph (e) is subject to the contested case procedure under chapter 14, as modified by this subdivision. The administrative law judge must issue a report containing findings of fact, conclusions of law, and a recommended order within ten days after the completion of the hearing, the receipt of late-filed exhibits, or the submission of written arguments, whichever is later.

(i) Within five days of the date of the administrative law judge's report issued under paragraph (h), any party aggrieved by the administrative law judge's report may submit written exceptions and arguments to the commissioner. Within 15 days after receiving the administrative law judge's report, the commissioner must issue an order vacating, modifying, or making final the administrative order.

(j) The commissioner and the tax preparer requesting a hearing may by agreement lengthen any time periods prescribed in paragraphs (g) to (i).

(k) An administrative order issued under paragraph (b) is in effect until it is modified or vacated by the commissioner or an appellate court. The administrative hearing provided by paragraphs (e) to (i) and any appellate judicial review as provided in chapter 14 constitute the exclusive remedy for a tax preparer aggrieved by the order.

(l) The commissioner may impose an administrative penalty, in addition to the penalty under paragraph (a), up to $5,000 per violation of a cease and desist order issued under paragraph (b). Imposition of a penalty under this paragraph is subject to the contested case procedure under chapter 14. Within 30 days after the commissioner imposes a penalty under this paragraph, the tax preparer assessed the penalty may request a hearing to review the penalty order. The request for hearing must be made in writing and must be served on the commissioner at the address specified in the order. The hearing request must specifically state the reasons for seeking review of the order. The cease and desist order issued under paragraph (b) is not subject to review in a proceeding to challenge the penalty order under this paragraph. The date on which a request for hearing is served by mail is the postmark date on the envelope in which the request for hearing is mailed. If the tax preparer does not timely request a hearing, the penalty order becomes a final order of the commissioner and is not subject to review by any court or agency. A penalty imposed by the commissioner under this paragraph may be collected and enforced by the commissioner as an income tax liability. There is no right to make a claim for refund under section 289A.50 of the penalty imposed under this paragraph. A penalty imposed under this paragraph is public data.

(m) If a tax preparer violates a cease and desist order issued under paragraph (b), the commissioner may terminate the tax preparer's authority to transmit returns electronically to the state. Termination under this paragraph is public data.

(n) A cease and desist order issued under paragraph (b) is public data when it is a final order.

(o) Notwithstanding any other law, the commissioner may impose a penalty or take other action under this subdivision against a tax preparer, with respect to a return, within the period to assess tax on that return as provided by deleted text begin sectiondeleted text end new text begin sectionsnew text end 289A.38new text begin to 289A.382new text end .

(p) Notwithstanding any other law, the imposition of a penalty or any other action against a tax preparer under this subdivision, other than with respect to a return, must be taken by the commissioner within five years of the violation of statute.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 2.

Minnesota Statutes 2020, section 289A.31, subdivision 1, is amended to read:

Subdivision 1.

Individual income, fiduciary income, mining company, corporate franchise, and entertainment taxes.

(a) Individual income, fiduciary income, mining company, and corporate franchise taxes, and interest and penalties, must be paid by the taxpayer upon whom the tax is imposed, except in the following cases:

(1) the tax due from a decedent for that part of the taxable year in which the decedent died during which the decedent was alive and the taxes, interest, and penalty due for the prior years must be paid by the decedent's personal representative, if any. If there is no personal representative, the taxes, interest, and penalty must be paid by the transferees, as defined in section 270C.58, subdivision 3, to the extent they receive property from the decedent;

(2) the tax due from an infant or other incompetent person must be paid by the person's guardian or other person authorized or permitted by law to act for the person;

(3) the tax due from the estate of a decedent must be paid by the estate's personal representative;

(4) the tax due from a trust, including those within the definition of a corporation, as defined in section 290.01, subdivision 4, must be paid by a trustee; and

(5) the tax due from a taxpayer whose business or property is in charge of a receiver, trustee in bankruptcy, assignee, or other conservator, must be paid by the person in charge of the business or property so far as the tax is due to the income from the business or property.

(b) Entertainment taxes are the joint and several liability of the entertainer and the entertainment entity. The payor is liable to the state for the payment of the tax required to be deducted and withheld under section 290.9201, subdivision 7, and is not liable to the entertainer for the amount of the payment.

(c) The taxes imposed under sections 289A.35new text begin , paragraph (b), 289A.382, subdivision 3,new text end and 290.0922 on partnerships are the joint and several liability of the partnership and the general partners.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 3.

Minnesota Statutes 2020, section 289A.37, subdivision 2, is amended to read:

Subd. 2.

Erroneous refunds.

(a) Except as provided in paragraph (b), an erroneous refund occurs when the commissioner issues a payment to a person that exceeds the amount the person is entitled to receive under law. An erroneous refund is considered an underpayment of tax on the date issued.

(b) To the extent that the amount paid does not exceed the amount claimed by the taxpayer, an erroneous refund does not include the following:

(1) any amount of a refund or credit paid pursuant to a claim for refund filed by a taxpayer, including but not limited to refunds of claims made under section 290.06, subdivision 23; 290.067; 290.0671; 290.0672; 290.0674; 290.0675; 290.0677; 290.068; 290.0681; or 290.0692; or chapter 290A; or

(2) any amount paid pursuant to a claim for refund of an overpayment of tax filed by a taxpayer.

(c) The commissioner may make an assessment to recover an erroneous refund at any time within two years from the issuance of the erroneous refund. If all or part of the erroneous refund was induced by fraud or misrepresentation of a material fact, the assessment may be made at any time.

(d) Assessments of amounts that are not erroneous refunds under paragraph (b) must be conducted under deleted text begin sectiondeleted text end new text begin sectionsnew text end 289A.38new text begin to 289A.382new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 4.

Minnesota Statutes 2020, section 289A.38, subdivision 7, is amended to read:

Subd. 7.

Federal tax changes.

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

(b) deleted text begin For the purposes of paragraph (a), a change or correction includes any case where a taxpayer reaches a closing agreement or compromise with the Internal Revenue Service under section 7121 or 7122 of the Internal Revenue Code.deleted text end new text begin In the case of a final federal adjustment arising from a partnership-level audit or an administrative adjustment request filed by a partnership under section 6227 of the Internal Revenue Code, a taxpayer must report adjustments as provided for under section 289A.382, and not this section.new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 5.

Minnesota Statutes 2020, section 289A.38, subdivision 8, is amended to read:

Subd. 8.

Failure to report change or correction of federal return.

If a taxpayer fails to make anew text begin federal adjustmentsnew text end report as required by subdivision 7new text begin or section 289A.382new text end , the commissioner may recompute the tax, including a refund, based on information available to the commissioner. The tax may be recomputed within six years after thenew text begin federal adjustmentsnew text end report should have been filed, notwithstanding any period of limitations to the contrary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 6.

Minnesota Statutes 2020, section 289A.38, subdivision 9, is amended to read:

Subd. 9.

Report made of change or correction of federal return.

If a taxpayer is required to make anew text begin federal adjustmentsnew text end report under subdivision 7new text begin or section 289A.382new text end , and does report the change or files a copy of the amended return, the commissioner may recompute and reassess the tax due, including a refund (1) within one year after thenew text begin federal adjustmentsnew text end report or amended return is filed with the commissioner, notwithstanding any period of limitations to the contrary, or (2) within any other applicable period stated in this section, whichever period is longer. The period provided for the carryback of any amount of loss or credit is also extended as provided in this subdivision, notwithstanding any law to the contrary. If the commissioner has completed a field audit of the taxpayer, and, but for this subdivision, the commissioner's time period to adjust the tax has expired, the additional tax due or refund is limited to only those changes that are required to be made to the return which relate to the changes made on the federal return. This subdivision does not apply to sales and use tax.

For purposes of this subdivision and section 289A.42, subdivision 2, a "field audit" is the physical presence of examiners in the taxpayer's or taxpayer's representative's office conducting an examination of the taxpayer with the intention of issuing an assessment or notice of change in tax or which results in the issuing of an assessment or notice of change in tax. The examination may include inspecting a taxpayer's place of business, tangible personal property, equipment, computer systems and facilities, pertinent books, records, papers, vouchers, computer printouts, accounts, and documents.

new text begin A taxpayer may make estimated payments to the commissioner of the tax expected to result from a pending audit by the Internal Revenue Service. The taxpayer may make estimated payments prior to the due date of the federal adjustments report without the taxpayer having to file the report with the commissioner. The commissioner must credit the estimated tax payments against any tax liability of the taxpayer ultimately found to be due to the commissioner. The estimated payments limit the accrual of further statutory interest on that amount. If the estimated tax payments exceed the final tax liability plus statutory interest ultimately determined to be due, the taxpayer is entitled to a refund or credit for the excess, provided the taxpayer files a federal adjustments report, or claim for refund or credit of tax, no later than one year following the final determination date. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 7.

Minnesota Statutes 2020, section 289A.38, subdivision 10, is amended to read:

Subd. 10.

Incorrect determination of federal adjusted gross income.

Notwithstanding any other provision of this chapter, if a taxpayer whose net income is determined under section 290.01, subdivision 19, omits from income an amount that will under the Internal Revenue Code extend the statute of limitations for the assessment of federal income taxes, or otherwise incorrectly determines the taxpayer's federal adjusted gross income resulting in adjustments by the Internal Revenue Service, then the period of assessment and determination of tax will be that under the Internal Revenue Code. When a change is made to federal income during the extended time provided under this subdivision, the provisions under subdivisions 7 to 9new text begin and section 289A.382new text end regarding additional extensions apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 8.

new text begin [289A.381] DEFINITIONS; PARTNERSHIPS; FEDERAL ADJUSTMENTS. new text end

new text begin Subdivision 1. new text end

new text begin Definitions relating to federal adjustments. new text end

new text begin Unless otherwise specified, the definitions in this section apply for the purposes of sections 289A.38, subdivisions 7 to 9, 289A.381, and 289A.382. new text end

new text begin Subd. 2. new text end

new text begin Administrative adjustment request. new text end

new text begin "Administrative adjustment request" means an administrative adjustment request filed by a partnership under section 6227 of the Internal Revenue Code. new text end

new text begin Subd. 3. new text end

new text begin Audited partnership. new text end

new text begin "Audited partnership" means a partnership subject to a federal adjustment resulting from a partnership-level audit. new text end

new text begin Subd. 4. new text end

new text begin Corporate partner. new text end

new text begin "Corporate partner" means a partner that is subject to tax under section 290.02. new text end

new text begin Subd. 5. new text end

new text begin Direct partner. new text end

new text begin "Direct partner" means a partner that holds an immediate legal ownership interest in a partnership or pass-through entity. new text end

new text begin Subd. 6. new text end

new text begin Exempt partner. new text end

new text begin "Exempt partner" means a partner that is exempt from taxes on its net income under section 290.05, subdivision 1. new text end

new text begin Subd. 7. new text end

new text begin Federal adjustment. new text end

new text begin "Federal adjustment" means any change in an amount calculated under the Internal Revenue Code, whether to income, gross estate, a credit, an item of preference, or any other item that is used by a taxpayer to compute a tax administered under this chapter for the reviewed year whether that change results from action by the Internal Revenue Service or other competent authority, including a partnership-level audit, or from the filing of an amended federal return, federal refund claim, or an administrative adjustment request by the taxpayer. A federal adjustment is positive to the extent that it increases taxable income as determined under section 290.01, subdivision 29, and is negative to the extent that it decreases taxable income as determined under section 290.01, subdivision 29. new text end

new text begin Subd. 8. new text end

new text begin Federal adjustments report. new text end

new text begin "Federal adjustments report" includes a method or form prescribed by the commissioner for use by a taxpayer to report federal adjustments, including an amended Minnesota tax return or a uniform multistate report. new text end

new text begin Subd. 9. new text end

new text begin Federal partnership representative. new text end

new text begin "Federal partnership representative" means the person the partnership designates for the taxable year as the partnership's representative, or the person the Internal Revenue Service has appointed to act as the partnership representative, pursuant to section 6223(a) of the Internal Revenue Code. new text end

new text begin Subd. 10. new text end

new text begin Final determination date. new text end

new text begin "Final determination date" means: new text end

new text begin (1) for a federal adjustment arising from an audit by the Internal Revenue Service or other competent authority, the first day on which no federal adjustment arising from that audit remains to be finally determined, whether by agreement, or, if appealed or contested, by a final decision with respect to which all rights of appeal have been waived or exhausted; new text end

new text begin (2) for a federal adjustment arising from an audit or other action by the Internal Revenue Service or other competent authority, if the taxpayer filed as a member of a combined report under section 290.17, subdivision 4, the first day on which no related federal adjustments arising from that audit remain to be finally determined as described in clause (1) for the entire combined group; new text end

new text begin (3) for a federal adjustment arising from the filing of an amended federal return, a federal refund claim, or the filing by a partnership of an administrative adjustment request, the date on which the amended return, refund claim, or administrative adjustment request was filed; or new text end

new text begin (4) for agreements required to be signed by the Internal Revenue Service and the taxpayer, the date on which the last party signed the agreement. new text end

new text begin Subd. 11. new text end

new text begin Final federal adjustment. new text end

new text begin "Final federal adjustment" means a federal adjustment after the final determination date for that federal adjustment has passed. new text end

new text begin Subd. 12. new text end

new text begin Indirect partner. new text end

new text begin "Indirect partner" means either: new text end

new text begin (1) a partner in a partnership or pass-through entity that itself holds an immediate legal ownership interest in another partnership or pass-through entity; or new text end

new text begin (2) a partner in a partnership or pass-through entity that holds an indirect interest in another partnership or pass-through entity through another indirect partner. new text end

new text begin Subd. 13. new text end

new text begin Partner. new text end

new text begin "Partner" means a person that holds an interest directly or indirectly in a partnership or other pass-through entity. new text end

new text begin Subd. 14. new text end

new text begin Partnership. new text end

new text begin "Partnership" has the meaning provided under section 7701(a)(2) of the Internal Revenue Code. new text end

new text begin Subd. 15. new text end

new text begin Partnership-level audit. new text end

new text begin "Partnership-level audit" means an examination by the Internal Revenue Service at the partnership level pursuant to subtitle F, chapter 63, subchapter C, of the Internal Revenue Code, which results in federal adjustments and adjustments to partnership-related items. new text end

new text begin Subd. 16. new text end

new text begin Pass-through entity. new text end

new text begin "Pass-through entity" means an entity, other than a partnership, that is not subject to the tax imposed under section 290.02. The term pass-through entity includes but is not limited to S corporations, estates, and trusts other than grantor trusts. new text end

new text begin Subd. 17. new text end

new text begin Resident partner. new text end

new text begin "Resident partner" means an individual, trust, or estate partner who is a resident of Minnesota under section 290.01, subdivision 7, 7a, or 7b, for the relevant tax period. new text end

new text begin Subd. 18. new text end

new text begin Reviewed year. new text end

new text begin "Reviewed year" means the taxable year of a partnership that is subject to a partnership-level audit from which federal adjustments arise. new text end

new text begin Subd. 19. new text end

new text begin Tiered partner. new text end

new text begin "Tiered partner" means any partner that is a partnership or pass-through entity. new text end

new text begin Subd. 20. new text end

new text begin Unrelated business taxable income. new text end

new text begin "Unrelated business taxable income" has the meaning provided under section 512 of the Internal Revenue Code. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 9.

new text begin [289A.382] REPORTING AND PAYMENT REQUIREMENTS. new text end

new text begin Subdivision 1. new text end

new text begin State partnership representative. new text end

new text begin (a) With respect to an action required or permitted to be taken by a partnership under this section, or in a proceeding under section 270C.35 or 271.06, the state partnership representative for the reviewed year shall have the sole authority to act on behalf of the partnership, and its direct partners and indirect partners shall be bound by those actions. new text end

new text begin (b) The state partnership representative for the reviewed year is the partnership's federal partnership representative unless the partnership, in a form and manner prescribed by the commissioner, designates another person as its state partnership representative. new text end

new text begin Subd. 2. new text end

new text begin Reporting and payment requirements for partnerships and tiered partners. new text end

new text begin (a) Except for when an audited partnership makes the election in subdivision 3, and except for negative federal adjustments required under federal law taken into account by the partnership in the partnership return for the adjustment or other year, all final federal adjustments of an audited partnership must comply with paragraph (b) and each direct partner of the audited partnership, other than a tiered partner, must comply with paragraph (c). new text end

new text begin (b) No later than 90 days after the final determination date, the audited partnership must: new text end

new text begin (1) file a completed federal adjustments report, including all partner-level information required under section 289A.12, subdivision 3, with the commissioner; new text end

new text begin (2) notify each of its direct partners of their distributive share of the final federal adjustments; new text end

new text begin (3) file an amended composite report for all direct partners who were included in a composite return under section 289A.08, subdivision 7, in the reviewed year, and pay the additional amount that would have been due had the federal adjustments been reported properly as required; and new text end

new text begin (4) file amended withholding reports for all direct partners who were or should have been subject to nonresident withholding under section 290.92, subdivision 4b, in the reviewed year, and pay the additional amount that would have been due had the federal adjustments been reported properly as required. new text end

new text begin (c) No later than 180 days after the final determination date, each direct partner, other than a tiered partner, that is subject to a tax administered under this chapter, other than the sales tax, must: new text end

new text begin (1) file a federal adjustments report reporting their distributive share of the adjustments reported to them under paragraph (b), clause (2); and new text end

new text begin (2) pay any additional amount of tax due as if the final federal adjustment had been properly reported, plus any penalty and interest due under this chapter, and less any credit for related amounts paid or withheld and remitted on behalf of the direct partner under paragraph (b), clauses (3) and (4). new text end

new text begin Subd. 3. new text end

new text begin Election; partnership or tiered partners pay. new text end

new text begin (a) An audited partnership may make an election under this subdivision to pay its assessment at the entity level. If an audited partnership makes an election to pay its assessment at the entity level it must: new text end

new text begin (1) no later than 90 days after the final determination date: new text end

new text begin (i) file a completed federal adjustments report, which includes the residency information for all individual, trust, and estate direct partners and information pertaining to all other direct partners as prescribed by the commissioner; and new text end

new text begin (ii) notify the commissioner that it is making the election under this subdivision; and new text end

new text begin (2) no later than 180 days after the final determination date, pay an amount, determined as follows, in lieu of taxes on partners: new text end

new text begin (i) exclude from final federal adjustments the distributive share of these adjustments made to a direct exempt partner that is not unrelated business taxable income; new text end

new text begin (ii) exclude from final federal adjustments the distributive share of these adjustments made to a direct partner that has filed a federal adjustments report and paid the applicable tax, as required under subdivision 2, for the distributive share of adjustments reported on a federal return under section 6225(c) of the Internal Revenue Code; new text end

new text begin (iii) assign and apportion at the partnership level using sections 290.17 to 290.20 the total distributive share of the remaining final federal adjustments for the reviewed year attributed to direct corporate partners and direct exempt partners; multiply the total by the highest tax rate in section 290.06, subdivision 1, for the reviewed year; and calculate interest and penalties as applicable under this chapter; new text end

new text begin (iv) allocate at the partnership level using section 290.17, subdivision 1, the total distributive share of all final federal adjustments attributable to individual resident direct partners for the reviewed year; multiply the total by the highest tax rate in section 290.06, subdivision 2c, for the reviewed year; and calculate interest and penalties as applicable under this chapter; new text end

new text begin (v) assign and apportion at the partnership level using sections 290.17 to 290.20 the total distributive share of the remaining final federal adjustments attributable to nonresident individual direct partners and direct partners who are an estate or a trust for the reviewed year; multiply the total by the highest tax rate in section 290.06, subdivision 2c, for the reviewed year; and calculate interest and penalties as applicable under this chapter; new text end

new text begin (vi) for the total distributive share of the remaining final federal adjustments reported to tiered partners: new text end

new text begin (A) determine the amount of the adjustments that would be assigned using section 290.17, subdivision 2, paragraphs (a) to (d), excluding income or gains from intangible personal property not employed in the business of the recipient of the income or gains if the recipient of the income or gains is a resident of this state or is a resident trust or estate under section 290.17, subdivision 2, paragraph (c), or apportioned using sections 290.17, subdivision 3, 290.191, and 290.20; and then determine the portion of the amount that would be allocated to this state; new text end

new text begin (B) determine the amount of the adjustments that are fully sourced to the taxpayer's state of residency under section 290.17, subdivision 2, paragraph (e), and income or gains from intangible personal property not employed in the business of the recipient of the income or gains if the recipient of the income or gains is a resident of this state or is a resident trust or estate under section 290.17, subdivision 2, paragraph (c); new text end

new text begin (C) determine the portion of the amount determined in subitem (B) that can be established to be properly allocable to nonresident indirect partners or other partners not subject to tax on the adjustments; and new text end

new text begin (D) multiply the total of the amounts determined in subitems (A) and (B) reduced by the amount determined in subitem (C) by the highest tax rate in section 290.06, subdivision 2c, for the reviewed year, and calculate interest and penalties as applicable under this chapter; and new text end

new text begin (vii) add the amounts determined in items (iii) to (vi), and pay all applicable taxes, penalties, and interest to the commissioner. new text end

new text begin (b) An audited partnership may not make an election under this subdivision to report: new text end

new text begin (1) a federal adjustment that results in unitary business income to a corporate partner required to file as a member of a combined report under section 290.17, subdivision 4; or new text end

new text begin (2) any final federal adjustments resulting from an administrative adjustment request. new text end

new text begin (c) An audited partnership not otherwise subject to any reporting or payment obligation to this state may not make an election under this subdivision. new text end

new text begin Subd. 4. new text end

new text begin Tiered partners and indirect partners. new text end

new text begin The direct and indirect partners of an audited partnership that are tiered partners, and all the partners of the tiered partners, that are subject to tax under chapter 290 are subject to the reporting and payment requirements contained in subdivision 2, and the tiered partners are entitled to make the elections provided in subdivision 3. The tiered partners or their partners shall make required reports and payments no later than 90 days after the time for filing and furnishing of statements to tiered partners and their partners as established under section 6226 of the Internal Revenue Code. new text end

new text begin Subd. 5. new text end

new text begin Effects of election by partnership or tiered partner and payment of amount due. new text end

new text begin (a) Unless the commissioner determines otherwise, an election under subdivision 3 is irrevocable. new text end

new text begin (b) If an audited partnership or tiered partner properly reports and pays an amount determined in subdivision 3, the amount must be treated as paid in lieu of taxes owed by the partnership's direct partners and indirect partners, to the extent applicable, on the same final federal adjustments. The direct partners or indirect partners of the partnership who are not resident partners may not take any deduction or credit for this amount or claim a refund of the amount in this state. new text end

new text begin (c) Nothing in this subdivision precludes resident direct partners from claiming a credit against taxes paid under section 290.06 on any amounts paid by the audited partnership or tiered partners on the resident partner's behalf to another state or local tax jurisdiction. new text end

new text begin Subd. 6. new text end

new text begin Failure of partnership or tiered partner to report or pay. new text end

new text begin Nothing in this section prevents the commissioner from assessing direct partners or indirect partners for taxes they owe, using the best information available, in the event that, for any reason, a partnership or tiered partner fails to timely make any report or payment required by this section. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 10.

Minnesota Statutes 2020, section 289A.42, is amended to read:

289A.42 CONSENT TO EXTEND STATUTE.

Subdivision 1.

Extension agreement.

If before the expiration of time prescribed in sections 289A.38new text begin to 289A.382new text end and 289A.40 for the assessment of tax or the filing of a claim for refund, both the commissioner and the taxpayer have consented in writing to the assessment or filing of a claim for refund after that time, the tax may be assessed or the claim for refund filed at any time before the expiration of the agreed-upon period. The period may be extended by later agreements in writing before the expiration of the period previously agreed upon. The taxpayer and the commissioner may also agree to extend the period for collection of the tax.

Subd. 2.

Federal extensions.

When a taxpayer consents to an extension of time for the assessment of federal withholding or income taxes, the period in which the commissioner may recompute the tax is also extended, notwithstanding any period of limitations to the contrary, as follows:

(1) for the periods provided in deleted text begin sectiondeleted text end new text begin sectionsnew text end 289A.38, subdivisions 8 and 9new text begin , and 289A.382, subdivisions 2 and 3new text end ;

(2) for six months following the expiration of the extended federal period of limitations when no change is made by the federal authority. If no change is made by the federal authority, and, but for this subdivision, the commissioner's time period to adjust the tax has expired, and if the commissioner has completed a field audit of the taxpayer, no additional changes resulting in additional tax due or a refund may be made. For purposes of this subdivision, "field audit" has the meaning given deleted text begin itdeleted text end in section 289A.38, subdivision 9.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 11.

Minnesota Statutes 2020, section 289A.60, subdivision 24, is amended to read:

Subd. 24.

Penalty for failure to notify of federal change.

If a person fails to report to the commissioner a change or correction of the person's federal return in the manner and time prescribed in deleted text begin sectiondeleted text end new text begin sections new text end 289A.38, subdivision 7new text begin , and 289A.382new text end , there must be added to the tax an amount equal to ten percent of the amount of any underpayment of Minnesota tax attributable to the federal change.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 12.

Minnesota Statutes 2020, section 290.31, subdivision 1, is amended to read:

Subdivision 1.

Partners, not partnership, subject to tax.

Except as provided under deleted text begin sectiondeleted text end new text begin sectionsnew text end 289A.35, paragraph (b),new text begin and 289A.382, subdivision 3,new text end a partnership as such shall not be subject to the income tax imposed by this chapter, but is subject to the tax imposed under section 290.0922. Persons carrying on business as partners shall be liable for income tax only in their separate or individual capacities.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 13.

Minnesota Statutes 2020, section 297F.17, subdivision 6, is amended to read:

Subd. 6.

Time limit for bad debt refund.

Claims for refund must be filed with the commissioner during the one-year period beginning with the timely filing of the taxpayer's federal income tax return containing the bad debt deduction that is being claimed. Claimants under this subdivision are subject to the notice requirements of deleted text begin sectiondeleted text end new text begin sectionsnew text end 289A.38, subdivision 7new text begin , and 289A.382new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 14.

Minnesota Statutes 2020, section 297G.16, subdivision 7, is amended to read:

Subd. 7.

Time limit for a bad debt deduction.

Claims for refund must be filed with the commissioner within one year of the filing of the taxpayer's income tax return containing the bad debt deduction that is being claimed. Claimants under this subdivision are subject to the notice requirements of deleted text begin section 289A.38, subdivision 7deleted text end new text begin sections 289A.38 to 289A.382new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

Sec. 15.

Minnesota Statutes 2020, section 469.319, subdivision 4, is amended to read:

Subd. 4.

Repayment procedures.

(a) For the repayment of taxes imposed under chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must file an amended return with the commissioner of revenue and pay any taxes required to be repaid within 30 days after becoming subject to repayment under this section. The amount required to be repaid is determined by calculating the tax for the period or periods for which repayment is required without regard to the exemptions and credits allowed under section 469.315.

(b) For the repayment of taxes imposed under chapter 297B, a business must pay any taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of revenue, within 30 days after becoming subject to repayment under this section.

(c) For the repayment of property taxes, the county auditor shall prepare a tax statement for the business, applying the applicable tax extension rates for each payable year and provide a copy to the business and to the taxpayer of record. The business must pay the taxes to the county treasurer within 30 days after receipt of the tax statement. The business or the taxpayer of record may appeal the valuation and determination of the property tax to the Tax Court within 30 days after receipt of the tax statement.

(d) The provisions of chapters 270C and 289A relating to the commissioner's authority to audit, assess, and collect the tax and to hear appeals are applicable to the repayment required under paragraphs (a) and (b). The commissioner may impose civil penalties as provided in chapter 289A, and the additional tax and penalties are subject to interest at the rate provided in section 270C.40. The additional tax shall bear interest from 30 days after becoming subject to repayment under this section until the date the tax is paid. Any penalty imposed pursuant to this section shall bear interest from the date provided in section 270C.40, subdivision 3, to the date of payment of the penalty.

(e) If a property tax is not repaid under paragraph (c), the county treasurer shall add the amount required to be repaid to the property taxes assessed against the property for payment in the year following the year in which the auditor provided the statement under paragraph (c).

(f) For determining the tax required to be repaid, a reduction of a state or local sales or use tax is deemed to have been received on the date that the good or service was purchased or first put to a taxable use. In the case of an income tax or franchise tax, including the credit payable under section 469.318, a reduction of tax is deemed to have been received for the two most recent tax years that have ended prior to the date that the business became subject to repayment under this section. In the case of a property tax, a reduction of tax is deemed to have been received for the taxes payable in the year that the business became subject to repayment under this section and for the taxes payable in the prior year.

(g) The commissioner may assess the repayment of taxes under paragraph (d) any time within two years after the business becomes subject to repayment under subdivision 1, or within any period of limitations for the assessment of tax under deleted text begin sectiondeleted text end new text begin sections new text end 289A.38new text begin to 289A.382new text end , whichever period is later. The county auditor may send the statement under paragraph (c) any time within three years after the business becomes subject to repayment under subdivision 1.

(h) A business is not entitled to any income tax or franchise tax benefits, including refundable credits, for any part of the year in which the business becomes subject to repayment under this section nor for any year thereafter. Property is not exempt from tax under section 272.02, subdivision 64, for any taxes payable in the year following the year in which the property became subject to repayment under this section nor for any year thereafter. A business is not eligible for any sales tax benefits beginning with goods or services purchased or first put to a taxable use on the day that the business becomes subject to repayment under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates. new text end

ARTICLE 3

PASS-THROUGH ENTITY TAX

Section 1.

Minnesota Statutes 2020, section 289A.08, subdivision 7, is amended to read:

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and beneficiaries.

(a) The commissioner may allow a partnership with nonresident partners to file a composite return and to pay the tax on behalf of nonresident partners who have no other Minnesota source income. This composite return must include the names, addresses, Social Security numbers, income allocation, and tax liability for the nonresident partners electing to be covered by the composite return.

(b) The computation of a partner's tax liability must be determined by multiplying the income allocated to that partner by the highest rate used to determine the tax liability for individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard deductions, or personal exemptions are not allowed.

(c) The partnership must submit a request to use this composite return filing method for nonresident partners. The requesting partnership must file a composite return in the form prescribed by the commissioner of revenue. The filing of a composite return is considered a request to use the composite return filing method.

(d) The electing partner must not have any Minnesota source income other than the income from the partnership deleted text begin anddeleted text end new text begin ,new text end other electing partnershipsnew text begin , and other qualifying entities electing to file and pay the pass-through entity tax under subdivision 7anew text end . If it is determined that the electing partner has other Minnesota source income, the inclusion of the income and tax liability for that partner under this provision will not constitute a return to satisfy the requirements of subdivision 1. The tax paid for the individual as part of the composite return is allowed as a payment of the tax by the individual on the date on which the composite return payment was made. If the electing nonresident partner has no other Minnesota source income, filing of the composite return is a return for purposes of subdivision 1.

(e) This subdivision does not negate the requirement that an individual pay estimated tax if the individual's liability would exceed the requirements set forth in section 289A.25. The individual's liability to pay estimated tax is, however, satisfied when the partnership pays composite estimated tax in the manner prescribed in section 289A.25.

(f) If an electing partner's share of the partnership's gross income from Minnesota sources is less than the filing requirements for a nonresident under this subdivision, the tax liability is zero. However, a statement showing the partner's share of gross income must be included as part of the composite return.

(g) The election provided in this subdivision is only available to a partner who has no other Minnesota source income and who is either (1) a full-year nonresident individual or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of the Internal Revenue Code.

(h) A corporation defined in section 290.9725 and its nonresident shareholders may make an election under this paragraph. The provisions covering the partnership apply to the corporation and the provisions applying to the partner apply to the shareholder.

(i) Estates and trusts distributing current income only and the nonresident individual beneficiaries of the estates or trusts may make an election under this paragraph. The provisions covering the partnership apply to the estate or trust. The provisions applying to the partner apply to the beneficiary.

(j) For the purposes of this subdivision, "income" means the partner's share of federal adjusted gross income from the partnership modified by the additions provided in section 290.0131, subdivisions 8 to 10 and 16, and the subtractions provided in: (1) section 290.0132, subdivision 9, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the composite tax computation to the extent the electing partner would have been allowed the subtraction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 2.

Minnesota Statutes 2020, section 289A.08, is amended by adding a subdivision to read:

new text begin Subd. 7a. new text end

new text begin Pass-through entity tax. new text end

new text begin (a) For the purposes of this subdivision, the following terms have the meanings given: new text end

new text begin (1) "income" has the meaning given in subdivision 7, paragraph (j), modified by the addition provided in section 290.0131, subdivision 5, and the subtraction provided in section 290.0132, subdivision 3, except that the provisions that apply to a partnership apply to a qualifying entity and the provisions that apply to a partner apply to a qualifying owner. The income of both a resident and nonresident qualifying owner is allocated and assigned to this state as provided for nonresident partners and shareholders under sections 290.17, 290.191, and 290.20; new text end

new text begin (2) "qualifying entity" means a partnership, limited liability company, or S corporation including a qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the Internal Revenue Code. Qualifying entity does not include a partnership, limited liability company, or corporation that has a partnership, limited liability company other than a disregarded entity, or corporation as a partner, member, or shareholder; and new text end

new text begin (3) "qualifying owner" means: new text end

new text begin (i) a resident or nonresident individual or estate that is a partner, member, or shareholder of a qualifying entity; or new text end

new text begin (ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an S corporation. new text end

new text begin (b) For taxable years beginning after December 31, 2020, in which the taxes of a qualifying owner are limited under section 164(b)(6)(B) of the Internal Revenue Code, a qualifying entity may elect to file a return and pay the pass-through entity tax imposed under paragraph (c). The election: new text end

new text begin (1) must be made on or before the due date or extended due date of the qualifying entity's pass-through entity tax return; new text end

new text begin (2) may only be made by qualifying owners who collectively hold more than a 50 percent ownership interest in the qualifying entity; new text end

new text begin (3) is binding on all qualifying owners who have an ownership interest in the qualifying entity; and new text end

new text begin (4) once made is irrevocable for the taxable year. new text end

new text begin (c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner. new text end

new text begin (d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount of the qualifying owner's income multiplied by the highest tax rate for individuals under section 290.06, subdivision 2c. When making this determination: new text end

new text begin (1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed; and new text end

new text begin (2) a credit or deduction is allowed only to the extent allowed to the qualifying owner. new text end

new text begin (e) The amount of each credit and deduction used to determine a qualifying owner's tax liability under paragraph (d) must also be used to determine that qualifying owner's income tax liability under chapter 290. new text end

new text begin (f) This subdivision does not negate the requirement that a qualifying owner pay estimated tax if the qualifying owner's tax liability would exceed the requirements set forth in section 289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's tax liability as determined under paragraph (d) is, however, satisfied when the qualifying entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated tax. new text end

new text begin (g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the treatment of distributions, is determined as if the election to pay the pass-through entity tax under paragraph (b) is not made. new text end

new text begin (h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a pass-through entity tax return must be treated as a composite return and a qualifying entity filing a pass-through entity tax return must be treated as a partnership filing a composite return. new text end

new text begin (i) The provisions of subdivision 17 apply to the election to pay the pass-through entity tax under this subdivision. new text end

new text begin (j) If a nonresident qualifying owner of a qualifying entity making the election to file and pay the tax under this subdivision has no other Minnesota source income, filing of the pass-through entity tax return is a return for purposes of subdivision 1, provided that the nonresident qualifying owner must not have any Minnesota source income other than the income from the qualifying entity, other electing qualifying entities, and other partnerships electing to file a composite return under subdivision 7. If it is determined that the nonresident qualifying owner has other Minnesota source income, the inclusion of the income and tax liability for that owner under this provision will not constitute a return to satisfy the requirements of subdivision 1. The tax paid for the qualifying owner as part of the pass-through entity tax return is allowed as a payment of the tax by the qualifying owner on the date on which the pass-through entity tax return payment was made. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 3.

Minnesota Statutes 2020, section 289A.60, is amended by adding a subdivision to read:

new text begin Subd. 22a. new text end

new text begin Pass-through entity tax. new text end

new text begin For the purposes of the penalties imposed by subdivisions 1 and 2, the payment of a pass-through entity tax or filing of a pass-through entity tax return pursuant to section 289A.08, subdivision 7a, is considered the payment and filing of a corporate tax. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 4.

Minnesota Statutes 2020, section 290.06, subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

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

(1) On the first $38,770, 5.35 percent;

(2) On all over $38,770, but not over $154,020, 6.8 percent;

(3) On all over $154,020, but not over $269,010, 7.85 percent;

(4) On all over $269,010, 9.85 percent.

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

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

(1) On the first $26,520, 5.35 percent;

(2) On all over $26,520, but not over $87,110, 6.8 percent;

(3) On all over $87,110, but not over $161,720, 7.85 percent;

(4) On all over $161,720, 9.85 percent.

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

(1) On the first $32,650, 5.35 percent;

(2) On all over $32,650, but not over $131,190, 6.8 percent;

(3) On all over $131,190, but not over $214,980, 7.85 percent;

(4) On all over $214,980, 9.85 percent.

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

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

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

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 17, and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132, subdivisions 9, 10, 14, 15, 17, 18, and 27, and 290.0137, paragraph (c), after applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

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

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 17, and 290.0137, paragraph (a); and reduced by

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and 27, and 290.0137, paragraph (c).

new text begin (f) If an individual who is not a Minnesota resident for the entire year is a qualifying owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision 7a, paragraph (b), they must compute the individual's Minnesota income tax as provided in paragraph (e), and also must include, to the extent attributed to the electing qualifying entity: new text end

new text begin (1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the addition under section 290.0131, subdivision 5; and new text end

new text begin (2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the subtraction under section 290.0132, subdivision 3. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 5.

Minnesota Statutes 2020, section 290.06, subdivision 22, is amended to read:

Subd. 22.

Credit for taxes paid to another state.

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

(b) For an individual, estate, or trust, the credit is determined by multiplying the tax payable under this chapter by the ratio derived by dividing the income subject to tax in the other state that is also subject to tax in Minnesota while a resident of Minnesota by the taxpayer's federal adjusted gross income, as defined in section 62 of the Internal Revenue Code, modified by the addition required by section 290.0131, subdivision 2, and the subtraction allowed by section 290.0132, subdivision 2, to the extent the income is allocated or assigned to Minnesota under sections 290.081 and 290.17.

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

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

(2) the allowance of the credit does not reduce the taxes paid under this chapter to an amount less than what would be assessed if the gross income earned within the other state were excluded from taxable net income.

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

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

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

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

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

(1) includes:

(i) the District of Columbia; and

(ii) a province or territory of Canada; but

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

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

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

(l)(1) The credit allowed to a qualifying individual under this section for tax paid to a qualifying state equals the credit calculated under paragraphs (b) and (d), plus the amount calculated by multiplying:

(i) the difference between the preliminary credit and the credit calculated under paragraphs (b) and (d), by

(ii) the ratio derived by dividing the income subject to tax in the qualifying state that consists of compensation for performance of personal or professional services by the total amount of income subject to tax in the qualifying state.

(2) If the amount of the credit that a qualifying individual is eligible to receive under clause (1) for tax paid to a qualifying state exceeds the tax due under this chapter before the application of the credit calculated under clause (1), the commissioner shall refund the excess to the qualifying individual. An amount sufficient to pay the refunds required by this subdivision is appropriated to the commissioner from the general fund.

(3) For purposes of this paragraph, "preliminary credit" means the credit that a qualifying individual is eligible to receive under paragraphs (b) and (d) for tax paid to a qualifying state without regard to the limitation in paragraph (d), clause (2); "qualifying individual" means a Minnesota resident under section 290.01, subdivision 7, paragraph (a), who received compensation during the taxable year for the performance of personal or professional services within a qualifying state; and "qualifying state" means a state with which an agreement under section 290.081 is not in effect for the taxable year but was in effect for a taxable year beginning before January 1, 2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 6.

Minnesota Statutes 2020, section 290.06, is amended by adding a subdivision to read:

new text begin Subd. 40. new text end

new text begin Pass-through entity tax credit. new text end

new text begin (a) A qualifying owner of a qualifying entity that elects to pay the pass-through entity tax under section 289A.08, subdivision 7a, may claim a credit against the tax due under this chapter equal to the amount of the owner's tax liability as calculated under section 289A.08, subdivision 7a, paragraph (d). new text end

new text begin (b) If the amount of the credit the taxpayer may claim under this subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of revenue shall refund the excess to the taxpayer. The amount necessary to pay the claim for the refund provided in this subdivision is appropriated from the general fund to the commissioner of revenue. new text end

new text begin (c) For purposes of this subdivision, "qualifying entity," "qualifying owner," and "tax liability" have the meanings given in section 289A.08, subdivision 7a, paragraphs (a) and (d). new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 7.

Minnesota Statutes 2020, section 290.92, subdivision 4b, is amended to read:

Subd. 4b.

Withholding by partnerships.

(a) A partnership shall deduct and withhold a tax as provided in paragraph (b) for nonresident individual partners based on their distributive shares of partnership income for a taxable year of the partnership.

(b) The amount of tax withheld is determined by multiplying the partner's distributive share allocable to Minnesota under section 290.17, paid or credited during the taxable year by the highest rate used to determine the income tax liability for an individual under section 290.06, subdivision 2c, except that the amount of tax withheld may be determined by the commissioner if the partner submits a withholding exemption certificate under subdivision 5.

(c) The commissioner may reduce or abate the tax withheld under this subdivision if the partnership had reasonable cause to believe that no tax was due under this section.

(d) Notwithstanding paragraph (a), a partnership is not required to deduct and withhold tax for a nonresident partner if:

(1) the partner elects to have the tax due paid as part of the partnership's composite return under section 289A.08, subdivision 7;

(2) the partner has Minnesota assignable federal adjusted gross income from the partnership of less than $1,000; or

(3) the partnership is liquidated or terminated, the income was generated by a transaction related to the termination or liquidation, and no cash or other property was distributed in the current or prior taxable year;

(4) the distributive shares of partnership income are attributable to:

(i) income required to be recognized because of discharge of indebtedness;

(ii) income recognized because of a sale, exchange, or other disposition of real estate, depreciable property, or property described in section 179 of the Internal Revenue Code; or

(iii) income recognized on the sale, exchange, or other disposition of any property that has been the subject of a basis reduction pursuant to section 108, 734, 743, 754, or 1017 of the Internal Revenue Code

to the extent that the income does not include cash received or receivable or, if there is cash received or receivable, to the extent that the cash is required to be used to pay indebtedness by the partnership or a secured debt on partnership property; deleted text begin ordeleted text end

(5) the partnership is a publicly traded partnership, as defined in section 7704(b) of the Internal Revenue Codedeleted text begin .deleted text end new text begin ; ornew text end

new text begin (6) the partnership has elected to pay the pass-through entity tax under section 289A.08, subdivision 7a. new text end

(e) For purposes of sections 270C.60, 289A.09, subdivision 2, 289A.20, subdivision 2, paragraph (c), 289A.50, 289A.56, 289A.60, and 289A.63, a partnership is considered an employer.

(f) To the extent that income is exempt from withholding under paragraph (d), clause (4), the commissioner has a lien in an amount up to the amount that would be required to be withheld with respect to the income of the partner attributable to the partnership interest, but for the application of paragraph (d), clause (4). The lien arises under section 270C.63 from the date of assessment of the tax against the partner, and attaches to that partner's share of the profits and any other money due or to become due to that partner in respect of the partnership. Notice of the lien may be sent by mail to the partnership, without the necessity for recording the lien. The notice has the force and effect of a levy under section 270C.67, and is enforceable against the partnership in the manner provided by that section. Upon payment in full of the liability subsequent to the notice of lien, the partnership must be notified that the lien has been satisfied.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

Sec. 8.

Minnesota Statutes 2020, section 290.92, subdivision 4c, is amended to read:

Subd. 4c.

Withholding by S corporations.

(a) A corporation having a valid election in effect under section 290.9725 shall deduct and withhold a tax as provided in paragraph (b) for nonresident individual shareholders their share of the corporation's income for the taxable year.

(b) The amount of tax withheld is determined by multiplying the amount of income allocable to Minnesota under section 290.17 by the highest rate used to determine the income tax liability of an individual under section 290.06, subdivision 2c, except that the amount of tax withheld may be determined by the commissioner if the shareholder submits a withholding exemption certificate under subdivision 5.

(c) Notwithstanding paragraph (a), a corporation is not required to deduct and withhold tax for a nonresident shareholder, if:

(1) the shareholder elects to have the tax due paid as part of the corporation's composite return under section 289A.08, subdivision 7;

(2) the shareholder has Minnesota assignable federal adjusted gross income from the corporation of less than $1,000; deleted text begin ordeleted text end

(3) the corporation is liquidated or terminated, the income was generated by a transaction related to the termination or liquidation, and no cash or other property was distributed in the current or prior taxable yeardeleted text begin .deleted text end new text begin ; ornew text end

new text begin (4) the S corporation has elected to pay the pass-through entity tax under section 289A.08, subdivision 7a. new text end

(d) For purposes of sections 270C.60, 289A.09, subdivision 2, 289A.20, subdivision 2, paragraph (c), 289A.50, 289A.56, 289A.60, and 289A.63, a corporation is considered an employer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December 31, 2020. new text end

ARTICLE 4

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2020, section 16A.152, subdivision 2, as amended by Laws 2021, chapter 31, article 1, section 9, is amended to read:

Subd. 2.

Additional revenues; priority.

(a) If on the basis of a forecast of general fund revenues and expenditures, the commissioner of management and budget determines that there will be a positive unrestricted budgetary general fund balance at the close of the biennium, the commissioner of management and budget must allocate money to the following accounts and purposes in priority order:

(1) the cash flow account established in subdivision 1 until that account reaches $350,000,000;

(2) the budget reserve account established in subdivision 1a until that account reaches $1,596,522,000;

(3) the amount necessary to increase the aid payment schedule for school district aids and credits payments in section 127A.45 to not more than 90 percent rounded to the nearest tenth of a percent without exceeding the amount available and with any remaining funds deposited in the budget reserve;

(4) the amount necessary to restore all or a portion of the net aid reductions under section 127A.441 and to reduce the property tax revenue recognition shift under section 123B.75, subdivision 5, by the same amount; deleted text begin anddeleted text end

(5) the amount necessary to increase the Minnesota 21st century fund by not more than the difference between $5,000,000 and the sum of the amounts credited and canceled to it in the previous 12 months under Laws 2020, chapter 71, article 1, section 11, until the sum of all transfers under this section and all amounts credited or canceled under Laws 2020, chapter 71, article 1, section 11, equals $20,000,000deleted text begin .deleted text end new text begin ; andnew text end

new text begin (6) for a forecast in November only, the amount remaining after the transfer under clause (5) must be used to reduce the percentage of accelerated June liability sales tax payments required under section 289A.20, subdivision 4, paragraph (b), until the percentage equals zero, rounded to the nearest tenth of a percent. By March 15 following the November forecast, the commissioner must provide the commissioner of revenue with the percentage of accelerated June liability owed based on the reduction required by this clause. By April 15 each year, the commissioner of revenue must certify the percentage of June liability owed by vendors based on the reduction required by this clause. new text end

(b) The amounts necessary to meet the requirements of this section are appropriated from the general fund within two weeks after the forecast is released or, in the case of transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations schedules otherwise established in statute.

(c) The commissioner of management and budget shall certify the total dollar amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The commissioner of education shall increase the aid payment percentage and reduce the property tax shift percentage by these amounts and apply those reductions to the current fiscal year and thereafter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021. new text end

Sec. 2.

Minnesota Statutes 2020, section 289A.20, subdivision 4, is amended to read:

Subd. 4.

Sales and use tax.

(a) The taxes imposed by chapter 297A are due and payable new text begin pnew text end to the commissioner monthly on or before the 20th day of the month following the month in which the taxable event occurred, or following another reporting period as the commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph (f) or (g), except that use taxes due on an annual use tax return as provided under section 289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.

(b) A vendor having a liability of $250,000 or more during a fiscal year ending June 30new text begin , except a vendor of construction materials as defined in paragraph (e),new text end must remit the June liability for the next year in the following manner:

(1) Two business days before June 30 of calendar year 2020 and 2021, the vendor must remit 87.5 percent of the estimated June liability to the commissioner. Two business days before June 30 of calendar year 2022 and thereafter, the vendor must remit 84.5 percentnew text begin , or a reduced percentage as certified by the commissioner under section 16A.152, subdivision 2, paragraph (a), clause (6),new text end of the estimated June liability to the commissioner.

(2) On or before August 20 of the year, the vendor must pay any additional amount of tax not remitted in June.

(c) A vendor having a liability of:

(1) $10,000 or more, but less than $250,000new text begin ,new text end during a fiscal year deleted text begin ending June 30, 2013, and fiscal years thereafter,deleted text end must remit by electronic means all liabilities on returns due for periods beginning in all subsequent calendar years on or before the 20th day of the month following the month in which the taxable event occurred, or on or before the 20th day of the month following the month in which the sale is reported under section 289A.18, subdivision 4; or

(2) $250,000 or moredeleted text begin ,deleted text end during a fiscal year deleted text begin ending June 30, 2013, and fiscal years thereafter,deleted text end must remit by electronic means all liabilities in the manner provided in paragraph (a) on returns due for periods beginning in the subsequent calendar year, except deleted text begin fordeleted text end new text begin that a vendor subject to the remittance requirements of paragraph (b) must remit new text end 90 percent of the estimated June liability, which is due two business days before June 30. The remaining amount of the June liability is due on August 20.

(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's religious beliefs from paying electronically shall be allowed to remit the payment by mail. The filer must notify the commissioner of revenue of the intent to pay by mail before doing so on a form prescribed by the commissioner. No extra fee may be charged to a person making payment by mail under this paragraph. The payment must be postmarked at least two business days before the due date for making the payment in order to be considered paid on a timely basis.

new text begin (e) For the purposes of paragraph (b), "vendor of construction materials" means a retailer that sells any of the following construction materials, if 50 percent or more of the retailer's sales revenue for the fiscal year ending June 30 is from the sale of those materials: new text end

new text begin (1) lumber, veneer, plywood, wood siding, wood roofing; new text end

new text begin (2) millwork, including wood trim, wood doors, wood windows, wood flooring; or new text end

new text begin (3) concrete, cement, and masonry. new text end

new text begin (f) Paragraph (b) expires after the percentage of estimated payment is reduced to zero in accordance with section 16A.152, subdivision 2, paragraph (a), clause (6). new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June 30, 2021. new text end

Sec. 3.

Minnesota Statutes 2020, section 289A.60, subdivision 15, is amended to read:

Subd. 15.

Accelerated payment of June sales tax liability; penalty for underpayment.

(a) For payments made after December 31, 2019 and before December 31, 2021, if a vendor is required by law to submit an estimation of June sales tax liabilities and 87.5 percent payment by a certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual June liability required to be paid in June less the amount remitted in June. The penalty must not be imposed, however, if the amount remitted in June equals the lesser of 87.5 percent of the preceding May's liability or 87.5 percent of the average monthly liability for the previous calendar year.

(b) For payments made after December 31, 2021, the penalty must not be imposed if the amount remitted in June equals the lesser of 84.5 percentnew text begin , or a reduced percentage as certified by the commissioner under section 16A.152, subdivision 2, paragraph (a), clause (6),new text end of the preceding May's liability or 84.5 percent of the average monthly liability for the previous calendar year.

new text begin (c) This subdivision expires after the percentage of estimated payment is reduced to zero in accordance with section 16A.152, subdivision 2, paragraph (a), clause (6). new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estimate payments required to be made after July 1, 2021. new text end

Sec. 4.

Minnesota Statutes 2020, section 297A.67, is amended by adding a subdivision to read:

new text begin Subd. 38. new text end

new text begin Season ticket purchasing rights to collegiate events. new text end

new text begin The sale of a right to purchase the privilege of admission to a college or university athletic event in a preferred viewing location for a season of a particular athletic event is exempt provided that: new text end

new text begin (1) the consideration paid for the right to purchase is used entirely to support student scholarships, wellness, and academic costs; new text end

new text begin (2) the consideration paid for the right to purchase is separately stated from the admission price; and new text end

new text begin (3) the admission price is equal to or greater than the highest priced general admission ticket for the closest seat not in the preferred viewing location. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases made after June 30, 2021. new text end

Sec. 5.

Minnesota Statutes 2020, section 297A.70, subdivision 13, is amended to read:

Subd. 13.

Fund-raising sales by or for nonprofit groups.

(a) The following sales by the specified organizations for fund-raising purposes are exempt, subject to the limitations listed in paragraph (b):

(1) all sales made by a nonprofit organization that exists solely for the purpose of providing educational or social activities for young people primarily age 18 and under;

(2) all sales made by an organization that is a senior citizen group or association of groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii) no part of its net earnings inures to the benefit of any private shareholders;

(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code; and

(4) sales of candy sold for fund-raising purposes by a nonprofit organization that provides educational and social activities primarily for young people age 18 and under.

(b) The exemptions listed in paragraph (a) are limited in the following manner:

(1) the exemption under paragraph (a), clauses (1) and (2), applies only to the first $20,000 of the gross annual receipts of the organization from fund-raising; deleted text begin anddeleted text end

(2) the exemption under paragraph (a), clause (1), does not apply if the sales are derived from admission charges or from activities for which the money must be deposited with the school district treasurer under section 123B.49, subdivision 2deleted text begin , ordeleted text end new text begin ; andnew text end

new text begin (3) the exemption under paragraph (a), clause (1), does not apply if the sales are derived from admission charges or from activities for which the money mustnew text end be recorded in the same manner as other revenues or expenditures of the school district under section 123B.49, subdivision 4deleted text begin .deleted text end new text begin , unless the following conditions are both met:new text end

new text begin (i) the sales are made for fund-raising purposes of a club, association, or other organization of elementary or secondary school students organized for the purpose of carrying on sports activities, educational activities, or other extracurricular activities; and new text end

new text begin (ii) the school district reserves revenue raised for extracurricular activities, as provided in section 123B.49, subdivision 4, paragraph (e), and spends the revenue raised by a particular extracurricular activity only for that extracurricular activity. new text end

(c) Sales of tangible personal property and services are exempt if the entire proceeds, less the necessary expenses for obtaining the property or services, will be contributed to a registered combined charitable organization described in section 43A.50, to be used exclusively for charitable, religious, or educational purposes, and the registered combined charitable organization has given its written permission for the sale. Sales that occur over a period of more than 24 days per year are not exempt under this paragraph.

(d) For purposes of this subdivision, a club, association, or other organization of elementary or secondary school students organized for the purpose of carrying on sports, educational, or other extracurricular activities is a separate organization from the school district or school for purposes of applying the $20,000 limit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after the date of final enactment. new text end

Sec. 6.

Minnesota Statutes 2020, section 297A.71, subdivision 52, is amended to read:

Subd. 52.

Construction; certain local government facilities.

(a) Materials and supplies used in and equipment incorporated into the construction, reconstruction, upgrade, expansion, or remodeling of the following local government owned facilities are exempt:

(1) a new fire station, which includes firefighting, emergency management, public safety training, and other public safety facilities in the city of Monticello if materials, supplies, and equipment are purchased after January 31, 2019, and before January 1, 2022;

(2) a new fire station, which includes firefighting and public safety training facilities and public safety facilities, in the city of Inver Grove Heights if materials, supplies, and equipment are purchased after June 30, 2018, and before January 1, 2021;

(3) a fire station and police station, including access roads, lighting, sidewalks, and utility components, on or adjacent to the property on which the fire station or police station are located that are necessary for safe access to and use of those buildings, in the city of Minnetonka if materials, supplies, and equipment are purchased after May 23, 2019, and before January 1, deleted text begin 2021deleted text end new text begin 2022new text end ;

(4) the school building in Independent School District No. 414, Minneota, if materials, supplies, and equipment are purchased after January 1, 2018, and before January 1, 2021;

(5) a fire station in the city of Mendota Heights, if materials, supplies, and equipment are purchased after December 31, 2018, and before January 1, 2021; and

(6) a Dakota County law enforcement collaboration center, also known as the Safety and Mental Health Alternative Response Training (SMART) Center, if materials, supplies, and equipment are purchased after June 30, 2019, and before July 1, 2021.

(b) The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1, applied and then refunded in the manner provided in section 297A.75.

(c) The total refund for the project listed in paragraph (a), clause (3), must not exceed $850,000.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2020, section 297A.71, is amended by adding a subdivision to read:

new text begin Subd. 53. new text end

new text begin Public safety facilities. new text end

new text begin (a) Materials and supplies used or consumed in and equipment incorporated into the construction, remodeling, expansion, or improvement of a fire station or police station, including related facilities, owned and operated by a local government, as defined in section 297A.70, subdivision 2, paragraph (d), are exempt. new text end

new text begin (b) For purposes of this subdivision, "related facilities" includes access roads, lighting, sidewalks, and utility components on or adjacent to the property on which the fire station or police station is located that are necessary for safe access to and use of those buildings. new text end

new text begin (c) The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1, applied and then refunded in the manner provided in section 297A.75. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases made after June 30, 2021. new text end

Sec. 8.

Minnesota Statutes 2020, section 297A.75, subdivision 1, is amended to read:

Subdivision 1.

Tax collected.

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

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

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

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

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

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

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

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

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

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

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

(11) materials, supplies, and equipment for construction, improvement, or expansion of a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 45;

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

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

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

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

(16) building materials, equipment, and supplies for constructing or replacing real property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51; deleted text begin anddeleted text end

(17) building materials, equipment, and supplies for qualifying capital projects under section 297A.71, subdivision 52deleted text begin .deleted text end new text begin ; andnew text end

new text begin (18) building materials, equipment, and supplies for constructing, remodeling, expanding, or improving a fire station, police station, or related facilities exempt under section 297A.71, subdivision 53. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases made after June 30, 2021. new text end

Sec. 9.

Minnesota Statutes 2020, section 297A.75, subdivision 2, is amended to read:

Subd. 2.

Refund; eligible persons.

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

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

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

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead property;

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a joint venture of municipal electric utilities;

(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying business;

(8) for subdivision 1, clauses (9), (10), (13), deleted text begin anddeleted text end (17), new text begin and (18), new text end the applicant must be the governmental entity that owns or contracts for the project or facility; and

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases made after June 30, 2021. new text end

Sec. 10.

Minnesota Statutes 2020, section 297A.75, subdivision 3, is amended to read:

Subd. 3.

Application.

(a) The application must include sufficient information to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor, or builder, under subdivision 1, clauses (3) to (13) or (15) to deleted text begin (17)deleted text end new text begin (18)new text end , the contractor, subcontractor, or builder must furnish to the refund applicant a statement including the cost of the exempt items and the taxes paid on the items unless otherwise specifically provided by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under this section.

(b) An applicant may not file more than two applications per calendar year for refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases made after June 30, 2021. new text end

Sec. 11.

Laws 2017, First Special Session chapter 1, article 3, section 32, the effective date, as amended by Laws 2019, First Special Session chapter 6, article 3, section 18, is amended to read:

EFFECTIVE DATE.

Paragraph (a) is effective retroactively for sales and purchases made after September 30, 2016, and before deleted text begin Januarydeleted text end new text begin Julynew text end 1, 2023. Paragraph (b) is effective for sales and purchases made (1) after September 30, 2016, and before July 1, 2017; and (2) after December 31, 2018, and before July 1, 2019.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

new text begin PROPERTIES DESTROYED OR DAMAGED BY FIRE; CITY OF ALEXANDRIA. new text end

new text begin (a) The sale and purchase of the following items are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if the items are used to repair, replace, clean, or otherwise remediate damage to real and personal property damaged or destroyed in the February 25, 2020, fire in the city of Alexandria, if sales and purchases are made after February 24, 2020, and before February 28, 2023: new text end

new text begin (1) building materials and supplies used or consumed in, and equipment incorporated into the construction, replacement, or repair of real property; and new text end

new text begin (2) durable equipment used in a restaurant for food storage, preparation, and serving. new text end

new text begin (b) Building cleaning and disinfecting services related to mitigating smoke damage to real property are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if sales and purchases are made after February 24, 2020, and before January 1, 2021. new text end

new text begin (c) For sales and purchases made after February 24, 2020, and before July 1, 2021, the tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the manner provided in Minnesota Statutes, section 297A.75. The amount required to pay the refunds under this section is appropriated from the general fund to the commissioner of revenue. Refunds for eligible purchases must not be issued until after June 30, 2021. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and applies retroactively to sales and purchases made after February 24, 2020. new text end

Sec. 13.

new text begin CITY OF BUFFALO; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS. new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment incorporated into the construction of a new fire station, which includes firefighting, emergency management, public safety training, and other public safety facilities in the city of Buffalo, are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after March 31, 2020, and before July 1, 2021. new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible purchases must not be issued until after June 30, 2021. new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from April 1, 2020, and applies to sales and purchases made after March 31, 2020, and before July 1, 2021. new text end

Sec. 14.

new text begin CITY OF MAPLEWOOD; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS. new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment incorporated into the construction of a new fire station and emergency management operations center, including on-site infrastructure improvements of parking lot, road access, lighting, sidewalks, and utility components in the city of Maplewood are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after September 30, 2020, and before July 1, 2021. new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible purchases must not be issued until after June 30, 2021. new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from August 1, 2020, and applies to sales and purchases made after September 30, 2020, and before July 1, 2021. new text end

Sec. 15.

new text begin CITY OF PLYMOUTH; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS. new text end

new text begin Subdivision 1. new text end

new text begin Exemption; refund. new text end

new text begin (a) Materials and supplies used in and equipment incorporated into the following projects in the city of Plymouth are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after January 1, 2021, and before July 1, 2021: new text end

new text begin (1) demolition and replacement of the existing Fire Station No. 2 on its existing site; and new text end

new text begin (2) renovation and expansion of Fire Station No. 3. new text end

new text begin (b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17). Refunds for eligible purchases must not be issued until after June 30, 2021. new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 2, 2021, and applies to sales and purchases made after January 1, 2021, and before July 1, 2021. new text end

ARTICLE 5

VAPOR AND TOBACCO TAXES

Section 1.

Minnesota Statutes 2020, section 297F.01, is amended by adding a subdivision to read:

new text begin Subd. 7a. new text end

new text begin Delivery sale. new text end

new text begin "Delivery sale" has the meaning given in section 325F.781, subdivision 1. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2022. new text end

Sec. 2.

Minnesota Statutes 2020, section 297F.01, subdivision 22b, is amended to read:

Subd. 22b.

Nicotine solution products.

(a) "Nicotine solution products" means any cartridge, bottle, or other package that contains nicotine made or derived from tobacco, that is in a solution that is consumed, or meant to be consumed, through the use of a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means that produces vapor or aerosol. This paragraph expires December 31, 2019.

(b) Beginning January 1, 2020, "nicotine solution products" means any cartridge, bottle, or other package that contains nicotine, including nicotine made or derived from tobacco or sources other than tobacco, that is in a solution that is consumed, or meant to be consumed, through the use of a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means that produces vapor or aerosol.

(c) Nicotine solution products includes any electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, new text begin electronic nicotine delivery system, electronic vaping device, electronic vape pen, electronic oral device, electronic delivery device, new text end or similar product or device, and any batteries, heating elements, or other components, parts, or accessories sold with and meant to be used in the consumption of a solution containing nicotine.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2022. new text end

Sec. 3.

Minnesota Statutes 2020, section 297F.031, is amended to read:

297F.031 REGISTRATION REQUIREMENT.

Prior to making delivery sales deleted text begin or shipping cigarettes or tobacco products in connection with any salesdeleted text end , an out-of-state retailer deleted text begin shalldeleted text end new text begin mustnew text end file with the Department of Revenue a statement setting forth the out-of-state retailer's name, trade name, deleted text begin and thedeleted text end address deleted text begin of the out-of-state retailer'sdeleted text end new text begin ,new text end principal place of businessnew text begin ,new text end and any other place of business.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after December 31, 2021. new text end

Sec. 4.

Minnesota Statutes 2020, section 297F.05, is amended by adding a subdivision to read:

new text begin Subd. 4b. new text end

new text begin Retailer collection and remittance of use tax. new text end

new text begin A retailer or out-of-state retailer must, for any delivery sale, collect and pay to the state any use tax imposed by this section. The retailer or out-of-state retailer must give the purchaser a receipt for the tax paid. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after December 31, 2021. new text end

Sec. 5.

Minnesota Statutes 2020, section 297F.09, subdivision 3, is amended to read:

Subd. 3.

Use tax return; cigarette or tobacco products consumernew text begin and retailers making delivery salesnew text end .

new text begin (a) new text end On or before the 18th day of each calendar month, a consumer who, during the preceding calendar month, has acquired title to or possession of cigarettes or tobacco products for use or storage in this state, upon which cigarettes or tobacco products the tax imposed by this chapter has not been paid, shall file a return with the commissioner showing the quantity of cigarettes or tobacco products so acquired. The return must be made in the form and manner prescribed by the commissioner, and must contain any other information required by the commissioner. The return must be accompanied by a remittance for the full unpaid tax liability shown by it.

new text begin (b) On or before the 18th day of each calendar month, a retailer or out-of-state retailer who, during the preceding calendar month, made delivery sales must file a return with the commissioner showing the quantity of cigarettes or tobacco products so delivered. The commissioner shall prescribe the content, format, and manner of returns pursuant to section 270C.30. The return must be accompanied by a remittance for the full unpaid tax liability. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after December 31, 2021. new text end

Sec. 6.

Minnesota Statutes 2020, section 297F.09, subdivision 4a, is amended to read:

Subd. 4a.

Reporting requirements.

No later than the 18th day of each calendar month, deleted text begin andeleted text end new text begin a retailer ornew text end out-of-state retailer that has made deleted text begin a delivery of cigarettes or tobacco products or shipped or delivered cigarettes or tobacco products into the state indeleted text end a delivery sale in the previous calendar month shall file with the Department of Revenue deleted text begin reportsdeleted text end new text begin a reportnew text end in the form and in the manner prescribed by the commissioner of revenue that provides for each delivery sale, the name and address of the purchaser and the brand or brands and quantity of cigarettes or tobacco products sold. A deleted text begin tobaccodeleted text end retailer new text begin or out-of-state retailer new text end that meets the requirements of United States Code, title 15, section 375 et seq. satisfies the requirements of this subdivision.new text begin The filing of a return under subdivision 3, paragraph (b), satisfies the requirements of this subdivision for the applicable month.new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after December 31, 2021. new text end

Sec. 7.

Minnesota Statutes 2020, section 297F.09, subdivision 7, is amended to read:

Subd. 7.

Electronic payment.

A cigarette deleted text begin ordeleted text end new text begin distributor,new text end tobacco products distributornew text begin , retailer, or out-of-state retailernew text end having a liability of $10,000 or more during a fiscal year ending June 30 must remit all liabilities in all subsequent calendar years by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after December 31, 2021. new text end

Sec. 8.

Minnesota Statutes 2020, section 297F.09, subdivision 10, is amended to read:

Subd. 10.

Accelerated tax paymentdeleted text begin ; cigarette or tobacco products distributordeleted text end .

A cigarette deleted text begin ordeleted text end new text begin distributor,new text end tobacco products distributornew text begin , retailer, or out-of-state retailernew text end having a liability of $250,000 or more during a fiscal year ending June 30, shall remit the June liability for the next year in the following manner:

(a) Two business days before June 30 of calendar years 2020 and 2021, the distributor shall remit the actual May liability and 87.5 percent of the estimated June liability to the commissioner and file the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the distributornew text begin , retailer, or out-of-state retailernew text end shall submit a return showing the actual June liability and pay any additional amount of tax not remitted in June. A penalty is imposed equal to ten percent of the amount of June liability required to be paid in June, less the amount remitted in June. However, the penalty is not imposed if the amount remitted in June equals the lesser of:

(1) 87.5 percent of the actual June liability for the calendar year 2020 and 2021 June liabilities and 84.5 of the actual June liability for June 2022 and thereafter; or

(2) 87.5 percent of the preceding May liability for the calendar year 2020 and 2021 June liabilities and 84.5 percent of the preceding May liability for June 2022 and thereafter.

(c) For calendar year 2022 and thereafter, the percent of the estimated June liability the vendor must remit by two business days before June 30 is 84.5 percent.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after December 31, 2021. new text end

Sec. 9.

Minnesota Statutes 2020, section 325F.781, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have the meanings given, unless the language or context clearly provides otherwise.

(b) "Consumer" means an individual who purchases, receives, or possesses tobacco products for personal consumption and not for resale.

(c) "Delivery sale" means:

(1) a sale of tobacco products to a consumer in this state when:

(i) the purchaser submits the order for the sale by means of a telephonic or other method of voice transmission, the mail or any other delivery service, or the Internet or other online service; or

(ii) the tobacco products are delivered by use of the mail or other delivery service; or

(2) a sale of tobacco products that satisfies the criteria in clause (1), item (i), regardless of whether the seller is located inside or outside of the state.

A sale of tobacco products to an individual in this state must be treated as a sale to a consumer, unless the individual is licensed as a distributor or retailer of tobacco products.

(d) "Delivery service" means a person, including the United States Postal Service, that is engaged in the commercial delivery of letters, packages, or other containers.

(e) "Distributor" means a person, whether located inside or outside of this state, other than a retailer, who sells or distributes tobacco products in the state. Distributor does not include a tobacco products manufacturer, export warehouse proprietor, or importer with a valid permit under United States Code, title 26, section 5712 (1997), if the person sells or distributes tobacco products in this state only to distributors who hold valid and current licenses under the laws of a state, or to an export warehouse proprietor or another manufacturer. Distributor does not include a common or contract carrier that is transporting tobacco products under a proper bill of lading or freight bill that states the quantity, source, and destination of tobacco products, or a person who ships tobacco products through this state by common or contract carrier under a bill of lading or freight bill.

(f) "Retailer" means a person, whether located inside or outside this state, who sells or distributes tobacco products to a consumer in this state.

(g) "Tobacco products" meansdeleted text begin :deleted text end new text begin cigarettes and tobacco products as defined in section 297F.01.new text end

deleted text begin (1) cigarettes, as defined in section 297F.01, subdivision 3; deleted text end

deleted text begin (2) smokeless tobacco as defined in section 325F.76; and deleted text end

deleted text begin (3) premium cigars as defined in section 297F.01, subdivision 13a. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2022. new text end

Sec. 10.

Minnesota Statutes 2020, section 325F.781, subdivision 5, is amended to read:

Subd. 5.

Registration requirement.

Prior to making delivery sales deleted text begin or shipping tobacco products in connection with any salesdeleted text end , an out-of-state retailer must deleted text begin meet the requirements ofdeleted text end new text begin register with the commissioner of revenue as required undernew text end section 297F.031.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after December 31, 2021. new text end

Sec. 11.

Minnesota Statutes 2020, section 325F.781, subdivision 6, is amended to read:

Subd. 6.

Collection of taxes.

(a) deleted text begin Prior to shipping any tobacco products to a purchaser in this state, the out-of-statedeleted text end new text begin Anew text end retailer deleted text begin shall comply with all requirements ofdeleted text end new text begin making delivery sales must file all returns and reports, collect and pay all taxes, and maintain all records required undernew text end chapter 297F deleted text begin and shall ensure that all state excise taxes and fees that apply to such tobacco products have been collected and paid to the state and that all related state excise tax stamps or other indicators of state excise tax payment have been properly affixed to those tobacco productsdeleted text end .

(b) In addition to any penalties under chapter 297F, deleted text begin a distributordeleted text end new text begin a retailer making delivery salesnew text end who fails to pay any tax due deleted text begin according to paragraph (a)deleted text end new text begin under chapter 297F,new text end shall pay, in addition to any other penalty, a penalty of 50 percent of the tax due but unpaid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all delivery sales occurring after December 31, 2021. new text end

ARTICLE 6

PROPERTY TAXES

Section 1.

Minnesota Statutes 2020, section 144F.01, is amended to read:

144F.01 new text begin FIRE PROTECTION AND new text end EMERGENCY MEDICAL SERVICES SPECIAL TAXING DISTRICTS.

Subdivision 1.

deleted text begin Political subdivision defineddeleted text end new text begin Definitionsnew text end .

new text begin For purposes of this section, the following terms have the meanings given. new text end

deleted text begin In this section,deleted text end new text begin (a)new text end "Political subdivision" means a county, a statutory or home rule charter city, or a township organized to provide town government.

new text begin (b) "Governing body" means a city council for a city, a county board for a county, and a board of supervisors for a town. new text end

new text begin (c) "Emergency medical services" means supporting the providing of out-of-hospital emergency medical services including, but not limited to, first responder or rescue squads recognized by the district, ambulance services licensed under chapter 144E and recognized by the district, medical control functions set out in chapter 144E, communications equipment and systems, and programs of regional emergency medical services authorized by regional boards described in section 144E.52. new text end

Subd. 2.

deleted text begin Who maydeleted text end new text begin Authority to new text end establish.

new text begin (a) new text end Two or more political subdivisionsdeleted text begin , or parts of them,deleted text end may establishnew text begin ,new text end by resolution of their governing bodiesnew text begin ,new text end a special taxing district deleted text begin fordeleted text end new text begin to provide fire protection ornew text end emergency medical servicesdeleted text begin . The participating territory of a participating political subdivision need not abut any other participating territory to be in the special taxing districtdeleted text end new text begin , or both, in the area of the district, comprising the jurisdiction of each of the political subdivisions forming the district. For a county that participates in establishing a district, the county's jurisdiction comprises the unorganized territory of the county that it designated in its resolution for inclusion in the district. The area of the special taxing district need not be contiguous or its boundaries continuousnew text end .

new text begin (b) Before establishing a district under this section, the participating political subdivisions must enter into an agreement that specifies how any liabilities, other than debt issued under subdivision 6, and assets of the district will be distributed if the district is dissolved. The agreement may also include other terms, including a method for apportioning the levy of the district among participating political subdivisions under subdivision 4, paragraph (b), as the political subdivisions determine appropriate. The agreement must be adopted no later than upon passage of the resolution establishing the district under paragraph (a), but may be later amended by agreement of each of the political subdivisions participating in the district. new text end

new text begin (c) If two or more political subdivisions that currently operate separate fire departments seek to merge fire departments into one fire department, or if a political subdivision with an existing fire department requests to join a special taxing district with an established fire department, the resolution under paragraph (a) or agreement under paragraph (b) must specify which, if any, volunteer firefighter pension plan is associated with the district. A special taxing district that operates a fire department under this section may be associated with only one volunteer firefighting relief association or one account in the voluntary statewide volunteer firefighting retirement plan at one time. new text end

new text begin (d) If the special taxing district includes the operation of a fire department, it must file its resolution establishing the fire protection special taxing district, and any agreements required for the establishment of the special taxing district, with the commissioner of revenue, including any subsequent amendments. If the resolution or agreement does not include sufficient information defining the fire department service area of the fire protection special taxing district, the secretary of the district board must file a written statement with the commissioner defining the fire department service area. new text end

Subd. 3.

Board.

The special taxing district new text begin established new text end under this section is governed by a board made up initially of representatives of each participating political subdivision in the proportions set out in the establishing resolution, subject to change as provided in the district's charter, if any, or in the district's bylaws. deleted text begin If a township states in its resolution that less than the entire township will participate in the district, the partial townships shall be represented on the board by only one member, appointed from among those townships so participating. The method for appointment shall be governed by the bylaws of the district's joint powers agreement. Each participant's representative serves at the pleasure of that participant's governing body or bodiesdeleted text end new text begin Each participating political subdivision's representative must be an elected member of the governing body of the political subdivision and shall serve at the pleasure of that participant's governing bodynew text end .

Subd. 4.

Property tax levy authority.

new text begin (a) new text end The district's board may levy a tax on the taxable real and personal property in the district. deleted text begin The ad valorem tax levy may not exceed 0.048 percent of the estimated market value of the district or $550,000, whichever is less.deleted text end The proceeds of the levy must be used as provided in subdivision 5. The board shall certify the levy at the times as provided under section 275.07. The board shall provide the county with whatever information is necessary to identify the property that is located within the district. If the boundaries include a part of a parcel, the entire parcel shall be included in the district. The county auditors must spread, collect, and distribute the proceeds of the tax at the same time and in the same manner as provided by law for all other property taxes.

new text begin (b) As an alternative to paragraph (a), the board may apportion its levy among the political subdivisions that are members of the district under a formula or method, with factors such as population, number of service calls, costs of providing service, the market value of improvements, or other measures approved by the governing body of each of the participating political subdivisions. The amount of the levy allocated to each political subdivision must be added to that political subdivision's levy and spread at the same time and in the same manner as provided by law for all other property taxes. The proceeds of the levy must be collected and remitted to the district and used as provided in subdivision 5. new text end

Subd. 5.

Use of levy proceeds.

The proceeds of property taxes levied under this section must be used to deleted text begin support the providing of out-of-hospital emergency medical services including, but not limited to, first responder or rescue squads recognized by the district, ambulance services licensed under chapter 144E and recognized by the district, medical control functions set out in chapter 144E, communications equipment and systems, and programs of regional emergency medical services authorized by regional boards described in section 144E.52deleted text end new text begin provide fire protection, emergency medical services, or both, to residents of the district and property located in the district, as well as to pay debt issued under subdivision 6. Services may be provided by employees of the district or by contracting for services provided by other governmental or private entitiesnew text end .

Subd. 6.

deleted text begin Advisory committeedeleted text end new text begin Debtnew text end .

deleted text begin A special taxing district board under this section must have an advisory committee to advise the board on issues involving emergency medical services and EMS communications. The committee's membership must be comprised of representatives of first responders, ambulance services, ambulance medical directors, and EMS communication experts. The advisory committee members serve at the pleasure of the appointing boarddeleted text end new text begin (a) The district may incur debt under chapter 475 when the board determines doing so is necessary to accomplish its dutiesnew text end .

new text begin (b) In addition, the district board may issue certificates of indebtedness or capital notes under section 412.301 to purchase capital equipment. In applying section 412.301, paragraph (e), the following rules apply: new text end

new text begin (1) the taxable property of the entire district must be used to calculate the percent of estimated market value; and new text end

new text begin (2) "the number of voters at the last municipal election" means the sum of the number of voters at the last municipal election for each of the cities that is a member of the district plus the number of registered voters in each town that is a participating member of the district. new text end

Subd. 7.

Powers.

(a) In addition to authority expressly granted in this section, a special taxing district new text begin established new text end under this section may exercise any power that may be exercised by any of its participating political subdivisionsdeleted text begin , except that the board may not incur debt. The special taxing district may only use the power to do whatdeleted text end new text begin thatnew text end is necessary or reasonable to support the services set out in subdivision 5new text begin . These powers include the authority to participate in state programs and to enforce or carry out state laws related to fire protection or emergency medical services, including programs providing state aid, reimbursement or funding of employee benefits, and authorizing local enforcement of state standards including fire protection related programs and political subdivision powers or responsibilities under chapters 299A, 424A, and 477B; sections 6.495, 353.64, and 423A.022; and any other administrative rules related to the fire code, to the extent the special taxing district meets the qualification criteria and requirements of a programnew text end .

(b) deleted text begin Notwithstanding paragraph (a),deleted text end new text begin To the extent the district's authority under this subdivision overlaps with or may conflict with the authority of the participating political subdivision, the agreement under subdivision 2, paragraph (b), must provide for allocation of those powers or responsibilities between the participating political subdivisions and the district, and may provide for resolution of conflicts in the exercise of those powers. new text end

new text begin (c)new text end The district may only levy the deleted text begin taxesdeleted text end new text begin tax new text end authorized in deleted text begin this sectiondeleted text end new text begin subdivision 4new text end .

Subd. 8.

Additions and withdrawals.

(a) Additional deleted text begin eligibledeleted text end political subdivisions may be added to a special taxing district new text begin established new text end under this section as provided by the board of the district and agreed to in a resolution of the governing body of the political subdivision proposed to be addednew text begin . The addition of a political subdivision to the district may not cause the district to be out of compliance with subdivision 2, paragraph (c)new text end .

(b) A political subdivision may withdraw from a special taxing district under this section by resolution of its governing body. The political subdivision must notify the board of the special taxing district of the withdrawal by providing a copy of the resolution at least deleted text begin one yeardeleted text end new text begin two years new text end in advance of the proposed withdrawal. The taxable property of the withdrawing member is subject to the property tax levy under subdivision 4 for the new text begin two new text end taxes payable deleted text begin yeardeleted text end new text begin years new text end following the notice of the withdrawal, unless the board and the withdrawing member agree otherwise by action of their governing bodiesnew text begin . If a political subdivision withdraws from a district for which debt was issued under subdivision 6 when the political subdivision was a participating member, and which is outstanding when the political subdivision withdraws from the district, the taxable property of the withdrawing political subdivision remains subject to the special taxing district levy until the outstanding debt has been paid or defeased. If the district's property tax levy to repay debt was apportioned among the political subdivisions under an alternative formula or method under subdivision 4, paragraph (b), the withdrawing political subdivision is subject to the same percentage of the debt levy as applied in the taxes payable year immediately preceding its withdrawal from the districtnew text end .

(c) Notwithstanding subdivision 2, if the district is comprised of deleted text begin onlydeleted text end two political subdivisions and one of the political subdivisions withdraws, the district can continue to exist.

Subd. 9.

Dissolution.

new text begin The special taxing district may be dissolved by resolution approved by a majority vote of the board. new text end If the special taxing district is dissolved, the assets and liabilities may be assigned to a successor entity, if any, or otherwise disposed of for public purposes as provided deleted text begin by lawdeleted text end new text begin in the agreement adopted under subdivision 2, paragraph (b), or otherwise agreed to by each participating political subdivision. A district may not be dissolved until all debt issued under subdivision 6 has been paid or defeasednew text end .

Subd. 10.

Reports.

new text begin (a)new text end On or before March 15, deleted text begin 2005deleted text end new text begin 2024new text end , and March 15, deleted text begin 2007deleted text end new text begin 2026new text end , the special taxing district shall submit a levy and expenditure report to the commissioner of revenue and to the deleted text begin chairs of thedeleted text end house of representatives and senate committees with jurisdiction over taxes new text begin and property taxesnew text end . Each report must include the amount of the district's levies for taxes payable for each of the two previous years and its actual expenditures of those revenues. Expenditures must be reported by general service category, deleted text begin as listed in subdivision 5,deleted text end and include a separate category for administrative expenses.

new text begin (b) On or before March 15, 2024, and March 15, 2026, a political subdivision that has established or joined a special taxing district authorized under this section after June 30, 2021, shall submit a levy and expenditure report to the commissioner of revenue and to the house of representatives and senate committees with jurisdiction over taxes and property taxes. The report must include: new text end

new text begin (1) the amount of the political subdivision's levy, and its actual expenditure of the subdivision's levy revenues, including the amount attributable to fire protection and emergency medical services, for taxes payable in each of the two taxes payable years prior to establishing or joining a special taxing district authorized under this section; new text end

new text begin (2) the political subdivision's levy, and its actual expenditure of the subdivision's levy revenues, for taxes payable in each of the taxes payable years after establishing or joining a special taxing district authorized under this section, up to, and including, taxes payable in 2024, and taxes payable in 2026; and new text end

new text begin (3) a certification from the political subdivision that the subdivision's levy for each of the taxes payable years after establishing or joining a special taxing district authorized under this section, up to, and including, taxes payable in 2024, and taxes payable in 2026, does not include expenditures for fire protection, emergency medical services, or both, except as provided in subdivision 4, paragraph (b), or those necessary to establish, or join, a district as provided in this section. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and applies to districts established after June 30, 2021, except that districts established prior to June 30, 2021, are eligible for changes made to subdivisions 4 and 6 beginning with property taxes payable in 2022. new text end

Sec. 2.

Minnesota Statutes 2020, section 272.02, is amended by adding a subdivision to read:

new text begin Subd. 104. new text end

new text begin Certain property owned by an Indian Tribe. new text end

new text begin (a) Property is exempt that: new text end

new text begin (1) is located in a county with a population greater than 28,000 but less than 29,000 as of the 2010 federal census; new text end

new text begin (2) was on January 2, 2018, and is for the current assessment owned by a federally recognized Indian Tribe or its instrumentality, that is located in Minnesota; new text end

new text begin (3) was on January 2, 2018, erroneously treated as exempt under subdivision 7; and new text end

new text begin (4) is used for the same purpose as the property was used on January 2, 2018. new text end

new text begin (b) The owner of property exempt under paragraph (a) may apply to the county for a refund of any state general tax paid for property taxes payable in 2020 and 2021. The county may prescribe the form and manner of the application. The county auditor must certify to the commissioner of revenue the amount needed for refunds under this section, which the commissioner must pay to the county. An amount necessary for refunds under this paragraph is appropriated from the general fund to the commissioner of revenue in fiscal year 2022. This paragraph expires June 30, 2022. new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) Paragraph (a) is effective beginning with assessment year 2021. For assessment year 2021, an exemption application under this section must be filed with the county assessor by August 1, 2021. new text end

new text begin (b) Paragraph (b) is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2020, section 273.124, subdivision 1, is amended to read:

Subdivision 1.

General rule.

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

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

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

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

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

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

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

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

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

(1) the relative who is occupying the agricultural property is a grandchild, child, sibling, deleted text begin ordeleted text end parentnew text begin , grandparent, stepparent, stepchild, uncle, aunt, nephew, or niecenew text end of the owner of the agricultural property or of the spouse of the owner;

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

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

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable in 2022 and thereafter. new text end

Sec. 4.

Minnesota Statutes 2020, section 273.124, subdivision 9, is amended to read:

Subd. 9.

Homestead established after assessment date.

Any property that was not used for the purpose of a homestead on the assessment date, but which was used for the purpose of a homestead on December deleted text begin 1deleted text end new text begin 31new text end of a year, constitutes class 1 or class 2a.

Any taxpayer meeting the requirements of this subdivision must notify the county assessor, or the assessor who has the powers of the county assessor under section 273.063, in writing, by December deleted text begin 15deleted text end new text begin 31new text end of the year of occupancy in order to qualify under this subdivision. The assessor must not deny full homestead treatment to a property that is partially homesteaded on January 2 but occupied for the purpose of a full homestead on December deleted text begin 1deleted text end new text begin 31new text end of a year.

The county assessor and the county auditor may make the necessary changes on their assessment and tax records to provide for proper homestead classification as provided in this subdivision.

If homestead classification has not been requested as of December deleted text begin 15deleted text end new text begin 31new text end , the assessor will classify the property as nonhomestead for the current assessment year for taxes payable in the following year, provided that the owner of any property qualifying under this subdivision, which has not been accorded the benefits of this subdivision, may be entitled to receive homestead classification by proper application as provided in section 375.192.

The county assessor may publish in a newspaper of general circulation within the county a notice requesting the public to file an application for homestead as soon as practicable after acquisition of a homestead, but no later than December deleted text begin 15deleted text end new text begin 31new text end .

The county assessor shall publish in a newspaper of general circulation within the county no later than December 1 of each year a notice informing the public of the requirement to file an application for homestead by December deleted text begin 15deleted text end new text begin 31new text end .

In the case of manufactured homes assessed as personal property, the homestead must be established, and a homestead classification requested, by May 29 of the assessment year. The assessor may include information on these deadlines for manufactured homes assessed as personal property in the published notice or notices.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessments in 2021. new text end

Sec. 5.

Minnesota Statutes 2020, section 273.124, subdivision 13, is amended to read:

Subd. 13.

Homestead application.

(a) A person who meets the homestead requirements under subdivision 1 must file a homestead application with the county assessor to initially obtain homestead classification.

(b) The commissioner shall prescribe the content, format, and manner of the homestead application required to be filed under this chapter pursuant to section 270C.30. The application must clearly inform the taxpayer that this application must be signed by all owners who occupy the property or by the qualifying relative and returned to the county assessor in order for the property to receive homestead treatment.

(c) Every property owner applying for homestead classification must furnish to the county assessor the Social Security number of each occupant who is listed as an owner of the property on the deed of record, the name and address of each owner who does not occupy the property, and the name and Social Security number of the spouse of each occupying owner. The application must be signed by each owner who occupies the property and by each owner's spouse who occupies the property, or, in the case of property that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.

If a property owner occupies a homestead, the property owner's spouse may not claim another property as a homestead unless the property owner and the property owner's spouse file with the assessor an affidavit or other proof required by the assessor stating that the property qualifies as a homestead under subdivision 1, paragraph (e).

Owners or spouses occupying residences owned by their spouses and previously occupied with the other spouse, either of whom fail to include the other spouse's name and Social Security number on the homestead application or provide the affidavits or other proof requested, will be deemed to have elected to receive only partial homestead treatment of their residence. The remainder of the residence will be classified as nonhomestead residential. When an owner or spouse's name and Social Security number appear on homestead applications for two separate residences and only one application is signed, the owner or spouse will be deemed to have elected to homestead the residence for which the application was signed.

(d) If residential real estate is occupied and used for purposes of a homestead by a relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in order for the property to receive homestead status, a homestead application must be filed with the assessor. The Social Security number of each relative occupying the property and the name and Social Security number of the spouse of a relative occupying the property shall be required on the homestead application filed under this subdivision. If a different relative of the owner subsequently occupies the property, the owner of the property must notify the assessor within 30 days of the change in occupancy. The Social Security number of a relative occupying the property or the spouse of a relative occupying the property is private data on individuals as defined by section 13.02, subdivision 12, but may be disclosed to the commissioner of revenue, or, for the purposes of proceeding under the Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.

(e) The homestead application shall also notify the property owners that if the property is granted homestead status for any assessment year, that same property shall remain classified as homestead until the property is sold or transferred to another person, or the owners, the spouse of the owner, or the relatives no longer use the property as their homestead. Upon the sale or transfer of the homestead property, a certificate of value must be timely filed with the county auditor as provided under section 272.115. Failure to notify the assessor within 30 days that the property has been sold, transferred, or that the owner, the spouse of the owner, or the relative is no longer occupying the property as a homestead, shall result in the penalty provided under this subdivision and the property will lose its current homestead status.

(f) If a homestead application has not been filed with the county by December deleted text begin 15deleted text end new text begin 31new text end , the assessor shall classify the property as nonhomestead for the current assessment year for taxes payable in the following year, provided that the owner may be entitled to receive the homestead classification by proper application under section 375.192.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessments in 2021. new text end

Sec. 6.

Minnesota Statutes 2020, section 273.13, subdivision 23, is amended to read:

Subd. 23.

Class 2.

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

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

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

(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, that are unplatted real estate, rural in character and not used for agricultural purposes, including land used for growing trees for timber, lumber, and wood and wood products, that is not improved with a structure. The presence of a minor, ancillary nonresidential structure as defined by the commissioner of revenue does not disqualify the property from classification under this paragraph. Any parcel of 20 acres or more improved with a structure that is not a minor, ancillary nonresidential structure must be split-classified, and ten acres must be assigned to the split parcel containing the structure. new text begin If a parcel of 20 acres or more is enrolled in the sustainable forest management incentive program under chapter 290C, the number of acres assigned to the split parcel improved with a structure that is not a minor, ancillary nonresidential structure must equal three acres or the number of acres excluded from the sustainable forest incentive act covenant due to the structure, whichever is greater. new text end Class 2b property has a classification rate of one percent of market value unless it is part of an agricultural homestead under paragraph (a), or qualifies as class 2c under paragraph (d).

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

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

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

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

"Agricultural purposes" as used in this section means the raising, cultivation, drying, or storage of agricultural products for sale, or the storage of machinery or equipment used in support of agricultural production by the same farm entity. For a property to be classified as agricultural based only on the drying or storage of agricultural products, the products being dried or stored must have been produced by the same farm entity as the entity operating the drying or storage facility. "Agricultural purposes" also includes (i) enrollment in a local conservation program or the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar state or federal conservation program if the property was classified as agricultural (A) under this subdivision for taxes payable in 2003 because of its enrollment in a qualifying program and the land remains enrolled or (B) in the year prior to its enrollment, or (ii) use of land, not to exceed three acres, to provide environmental benefits such as buffer strips, old growth forest restoration or retention, or retention ponds to prevent soil erosion. For purposes of this section, a "local conservation program" means a program administered by a town, statutory or home rule charter city, or county, including a watershed district, water management organization, or soil and water conservation district, in which landowners voluntarily enroll land and receive incentive payments equal to at least $50 per acre in exchange for use or other restrictions placed on the land. In order for property to qualify under the local conservation program provision, a taxpayer must apply to the assessor by February 1 of the assessment year and must submit the information required by the assessor, including but not limited to a copy of the program requirements, the specific agreement between the land owner and the local agency, if applicable, and a map of the conservation area. Agricultural classification shall not be based upon the market value of any residential structures on the parcel or contiguous parcels under the same ownership.

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

(f) Agricultural land under this section also includes:

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

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

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

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

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

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

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

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

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

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

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

(2) aquacultural products for sale and consumption, as defined under section 17.47, if the aquaculture occurs on land zoned for agricultural use;

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

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

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

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

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

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

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

(1) wholesale and retail sales;

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

(3) warehousing or storage of processed goods; and

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

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

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

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

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

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

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

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

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

(1) a legal description of the property;

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2022 and thereafter. new text end

Sec. 7.

Minnesota Statutes 2020, section 273.13, subdivision 25, is amended to read:

Subd. 25.

Class 4.

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

(b) Class 4b includes:

(1) residential real estate containing less than four units, including property rented as a short-term rental property for more than 14 days in the preceding year, that does not qualify as class 4bb, other than seasonal residential recreational property;

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

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

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

For the purposes of this paragraph, "short-term rental property" means nonhomestead residential real estate rented for periods of less than 30 consecutive days.

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

(c) Class 4bb includes:

(1) nonhomestead residential real estate containing one unit, other than seasonal residential recreational property;

(2) a single family dwelling, garage, and surrounding one acre of property on a nonhomestead farm classified under subdivision 23, paragraph (b); and

(3) a condominium-type storage unit having an individual property identification number that is not used for a commercial purpose.

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

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

(d) Class 4c property includes:

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

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

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

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

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

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

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

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

For purposes of this clause:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(i) the land abuts a public airport; and

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

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

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

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

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

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

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

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

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

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

Class 4c property has a classification rate of 1.5 percent of market value, except that (i) each parcel of noncommercial seasonal residential recreational property under clause (12) has the same classification rates as class 4bb property, (ii) manufactured home parks assessed under clause (5), item (i), have the same classification rate as class 4b property, the market value of manufactured home parks assessed under clause (5), item (ii), have a classification rate of 0.75 percent if more than 50 percent of the lots in the park are occupied by shareholders in the cooperative corporation or association and a classification rate of one percent if 50 percent or less of the lots are so occupied, and class I manufactured home parks as defined in section 327C.01, subdivision 13, have a classification rate of 1.0 percent, (iii) commercial-use seasonal residential recreational property and marina recreational land as described in clause (11), has a classification rate of one percent for the first $500,000 of market value, and 1.25 percent for the remaining market value, (iv) the market value of property described in clause (4) has a classification rate of one percent, (v) the market value of property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent, (vi) that portion of the market value of property in clause (9) qualifying for class 4c property has a classification rate of 1.25 percent, and (vii) property qualifying for classification under clause (3) that is owned or operated by a congressionally chartered veterans organization has a classification rate of one percent. The commissioner of veterans affairs must provide a list of congressionally chartered veterans organizations to the commissioner of revenue by June 30, 2017, and by January 1, 2018, and each year thereafter.

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

(f) The first tier of market value of class 4d property has a classification rate of 0.75 percent. The remaining value of class 4d property has a classification rate of 0.25 percent. For the purposes of this paragraph, the "first tier of market value of class 4d property" means the market value of each housing unit up to the first tier limit. For the purposes of this paragraph, all class 4d property value must be assigned to individual housing units. The first tier limit is $100,000 for assessment deleted text begin year 2014deleted text end new text begin years 2022 and 2023new text end . For subsequent new text begin assessment new text end years, the limit is adjusted each year by the average statewide change in estimated market value of property classified as class 4a and 4d under this section for the previous assessment year, excluding valuation change due to new construction, rounded to the nearest $1,000, provided, however, that the limit may never be less than $100,000. Beginning with assessment year 2015, the commissioner of revenue must certify the limit for each assessment year by November 1 of the previous year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2022. new text end

Sec. 8.

Minnesota Statutes 2020, section 273.13, subdivision 34, is amended to read:

Subd. 34.

Homestead of veteran with a disability or family caregiver.

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

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

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

(c) If a veteran with a disability qualifying for a valuation exclusion under paragraph (b), clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the spouse holds the legal or beneficial title to the homestead and permanently resides there, the exclusion shall carry over to the benefit of the veteran's spouse until such time as the spouse remarries, or sells, transfers, or otherwise disposes of the property, except as otherwise provided in paragraph (n). Qualification under this paragraph requires an application under paragraph (h), and a spouse must notify the assessor if there is a change in the spouse's marital status, ownership of the property, or use of the property as a permanent residence.

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

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

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

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

(h) To qualify for a valuation exclusion under this subdivision a property owner must apply to the assessor by December deleted text begin 15deleted text end new text begin 31new text end of the first assessment year for which the exclusion is sought. deleted text begin For an application received after December deleted text end deleted text begin 15deleted text end deleted text begin , the exclusion shall become deleted text end deleted text begin effective for the following assessment year.deleted text end Except as provided in paragraph (c), the owner of a property that has been accepted for a valuation exclusion must notify the assessor if there is a change in ownership of the property or in the use of the property as a homestead.

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

(j) For purposes of this subdivision:

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

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

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

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

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

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

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

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

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

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

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

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

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

(n) A spouse who received the benefit in paragraph (c), (d), or (k) but no longer holds the legal or beneficial title to the property may continue to receive the exclusion for a property other than the property for which the exclusion was initially granted until the spouse remarries or sells, transfers, or otherwise disposes of the property, provided that:

(1) the spouse applies under paragraph (h) for the continuation of the exclusion allowed under this paragraph;

(2) the spouse holds the legal or beneficial title to the property for which the continuation of the exclusion is sought under this paragraph, and permanently resides there;

(3) the estimated market value of the property for which the exclusion is sought under this paragraph is less than or equal to the estimated market value of the property that first received the exclusion, based on the value of each property on the date of the sale of the property that first received the exclusion; and

(4) the spouse has not previously received the benefit under this paragraph for a property other than the property for which the exclusion is sought.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessments in 2021. new text end

Sec. 9.

Minnesota Statutes 2020, section 275.025, subdivision 1, is amended to read:

Subdivision 1.

Levy amount.

The state general levy is levied against commercial-industrial property and seasonal residential recreational property, as defined in this section. The state general levy for commercial-industrial property is deleted text begin $737,090,000deleted text end new text begin $716,990,000new text end for taxes payable in deleted text begin 2020deleted text end new text begin 2023new text end and thereafter. The state general levy for seasonal-recreational property is $41,690,000 for taxes payable in 2020 and thereafter. The tax under this section is not treated as a local tax rate under section 469.177 and is not the levy of a governmental unit under chapters 276A and 473F.

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

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

(2) an erroneous calculation by the commissioner; and

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable in 2023 and thereafter. new text end

Sec. 10.

Minnesota Statutes 2020, section 275.025, subdivision 2, is amended to read:

Subd. 2.

Commercial-industrial tax capacity.

For the purposes of this section, "commercial-industrial tax capacity" means the tax capacity of all taxable property classified as class 3 or class 5(1) under section 273.13, excluding:

(1) the tax capacity attributable to the first deleted text begin $100,000deleted text end new text begin $150,000new text end of market value of each parcel of commercial-industrial property as defined under section 273.13, subdivision 24, clauses (1) and (2);

(2) electric generation attached machinery under class 3; and

(3) property described in section 473.625.

County commercial-industrial tax capacity amounts are not adjusted for the captured net tax capacity of a tax increment financing district under section 469.177, subdivision 2, the net tax capacity of transmission lines deducted from a local government's total net tax capacity under section 273.425, or fiscal disparities contribution and distribution net tax capacities under chapter 276A or 473F. For purposes of this subdivision, the procedures for determining eligibility for tier 1 under section 273.13, subdivision 24, clauses (1) and (2), shall apply in determining the portion of a property eligible to be considered within the first deleted text begin $100,000deleted text end new text begin $150,000new text end of market value.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable in 2023 and thereafter. new text end

Sec. 11.

Minnesota Statutes 2020, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

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

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

(c) The notice must inform taxpayers that it contains the amount of property taxes each taxing authority proposes to collect for taxes payable the following year. In the case of a town, or in the case of the state general tax, the final tax amount will be its proposed tax. The notice must clearly state for each city that has a population over 500, county, school district, regional library authority established under section 134.201, deleted text begin anddeleted text end metropolitan taxing districts as defined in paragraph (i)new text begin , and fire protection and emergency medical services special taxing districts established under section 144F.01new text end , the time and place of a meeting for each taxing authority in which the budget and levy will be discussed and public input allowed, prior to the final budget and levy determination. The taxing authorities must provide the county auditor with the information to be included in the notice on or before the time it certifies its proposed levy under subdivision 1. The public must be allowed to speak at that meeting, which must occur after November 24 and must not be held before 6:00 p.m. It must provide a telephone number for the taxing authority that taxpayers may call if they have questions related to the notice and an address where comments will be received by mail, except that no notice required under this section shall be interpreted as requiring the printing of a personal telephone number or address as the contact information for a taxing authority. If a taxing authority does not maintain public offices where telephone calls can be received by the authority, the authority may inform the county of the lack of a public telephone number and the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

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

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

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

(ii) the proposed tax amount.

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

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

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

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

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

(1) special assessments;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(3) Metropolitan Mosquito Control Commission under section 473.711.

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

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

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

(2) population growth and decline;

(3) state or federal government action; and

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable in 2022. new text end

Sec. 12.

Minnesota Statutes 2020, section 275.065, is amended by adding a subdivision to read:

new text begin Subd. 3b. new text end

new text begin Notice of proposed property taxes required supplemental information. new text end

new text begin (a) The county auditor must prepare a separate statement to be delivered with the notice of proposed taxes described in subdivision 3. The statement must fit on one sheet of paper and contain for each parcel: new text end

new text begin (1) for the county, city or township, and school district in which the parcel lies, the certified levy for the current taxes payable year, the proposed levy for taxes payable in the following year, and the increase or decrease between these two amounts, expressed as a percentage; and new text end

new text begin (2) summary budget information listed in paragraph (b). new text end

new text begin (b) Summary budget information must contain budget data from the county, city, and school district that proposes a property tax levy on the parcel for taxes payable the following year. For the school district, the summary budget data must include the information provided to the public under section 123B.10, subdivision 1, paragraph (b), for the current year and prior year. For the county and city, the reported summary budget data must contain the same information, in the same categories, and in the same format as provided to the Office of the State Auditor as required by section 6.745. The statement must provide the governmental revenues and current expenditures information in clauses (1) and (2) for the taxing authority's budget for taxes payable the following year and the taxing authority's budget from taxes payable in the current year, as well as the percent change between the two years. The city must provide the county auditor with the summary budget data at the same time as the information required under subdivision 3. Only cities with a population of at least 500 are required to report the data described in this paragraph. If a city with a population over 500 fails to report the required information to the county auditor, the county auditor must list the city as "budget information not reported" on the portion of the statement dedicated to the city's budget information. The statement may take the same format as the annual summary budget report for cities and counties issued by the Office of the State Auditor. The summary budget data must include: new text end

new text begin (1) a governmental revenues category, including and separately stating: new text end

new text begin (i) "property taxes" defined as property taxes levied on an assessed valuation of real property and personal property, if applicable, by the city and county, including fiscal disparities; new text end

new text begin (ii) "special assessments" defined as levies made against certain properties to defray all or part of the costs of a specific improvement, such as new sewer and water mains, deemed to benefit primarily those properties; new text end

new text begin (iii) "state general purpose aid" defined as aid received from the state that has no restrictions on its use, including local government aid, county program aid, and market value credits; and new text end

new text begin (iv) "state categorical aid" defined as revenues received for a specific purpose, such as streets and highways, fire relief, and flood control, including but not limited to police and fire state aid and out-of-home placement aid; and new text end

new text begin (2) a current expenditures category, including and separately stating: new text end

new text begin (i) "general government" defined as administration costs of city or county governments, including salaries of officials and maintenance of buildings; new text end

new text begin (ii) "public safety" defined as costs related to the protection of persons and property, such as police, fire, ambulance services, building inspections, animal control, and flood control; new text end

new text begin (iii) "streets and highways" defined as costs associated with the maintenance and repair of local highways, streets, bridges, and street equipment, such as patching, seal coating, street lighting, street cleaning, and snow removal; new text end

new text begin (iv) "sanitation" defined as costs of refuse collection and disposal, recycling, and weed and pest control; new text end

new text begin (v) "human services" defined as activities designed to provide public assistance and institutional care for individuals economically unable to provide for themselves; new text end

new text begin (vi) "health" defined as costs of the maintenance of vital statistics, restaurant inspection, communicable disease control, and various health services and clinics; new text end

new text begin (vii) "culture and recreation" defined as costs of libraries, park maintenance, mowing, planting, removal of trees, festivals, bands, museums, community centers, cable television, baseball fields, and organized recreation activities; new text end

new text begin (viii) "conservation of natural resources" defined as the conservation and development of natural resources, including agricultural and forestry programs and services, weed inspection services, and soil and water conservation services; new text end

new text begin (ix) "economic development and housing" defined as costs for development and redevelopment activities in blighted or otherwise economically disadvantaged areas, including low-interest loans, cleanup of hazardous sites, rehabilitation of substandard housing and other physical facilities, and other assistance to those wanting to provide housing and economic opportunity within a disadvantaged area; and new text end

new text begin (x) "all other current expenditures" defined as costs not classified elsewhere, such as airport expenditures, cemeteries, unallocated insurance costs, unallocated pension costs, and public transportation costs. new text end

new text begin (c) If a taxing authority reporting this data does not have revenues or expenditures in a category listed in paragraph (b), then the taxing authority must designate the amount as "0" for that specific category. new text end

new text begin (d) The supplemental statement provided under this subdivision must be sent in electronic form or by e-mail if the taxpayer requests an electronic version the notice of proposed property taxes under subdivision 3, paragraph (a). new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes payable in 2023 and thereafter. new text end

Sec. 13.

Minnesota Statutes 2020, section 275.066, is amended to read:

275.066 SPECIAL TAXING DISTRICTS; DEFINITION.

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

(1) watershed districts under chapter 103D;

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

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

(4) regional public library districts under section 134.201;

(5) park districts under chapter 398;

(6) regional railroad authorities under chapter 398A;

(7) hospital districts under sections 447.31 to 447.38;

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

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

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

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

(12) port authorities under sections 469.048 to 469.068;

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

(14) Metropolitan Council under sections 473.123 to 473.549;

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

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

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

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

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

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

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

(22) new text begin fire protection and new text end emergency medical services special taxing districts under section 144F.01;

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and applies to districts established after June 30, 2021. new text end

Sec. 14.

Minnesota Statutes 2020, section 290A.03, subdivision 3, is amended to read:

Subd. 3.

Income.

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

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

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

(i) all nontaxable income;

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

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

(iv) cash public assistance and relief;

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

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

(vii) workers' compensation;

(viii) nontaxable strike benefits;

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

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

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

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

(xiii) nontaxable scholarship or fellowship grants;

(xiv) alimony received to the extent not included in the recipient's income;

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

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

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

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

(b) "Income" does not include:

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

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

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

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

(5) relief granted under this chapter;

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

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

(8) alimony paidnew text begin ; ornew text end

new text begin (9) veterans disability compensation paid under title 38 of the United States Codenew text end .

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

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

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

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

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

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

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

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

(1) "exemption amount" means the exemption amount under section 290.0121, subdivision 1, paragraph (b), for the taxable year for which the income is reported;

(2) "retirement base amount" means the deductible amount for the taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard to whether the claimant or spouse claimed a deduction; and

(3) "traditional or Roth style retirement account or plan" means retirement plans under sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refund claims based on property taxes payable in 2022 and rent paid in 2021 and thereafter. new text end

Sec. 15.

Minnesota Statutes 2020, section 429.021, subdivision 1, is amended to read:

Subdivision 1.

Improvements authorized.

The council of a municipality shall have power to make the following improvements:

(1) To acquire, open, and widen any street, and to improve the same by constructing, reconstructing, and maintaining sidewalks, pavement, gutters, curbs, and vehicle parking strips of any material, or by grading, graveling, oiling, or otherwise improving the same, including the beautification thereof and including storm sewers or other street drainage and connections from sewer, water, or similar mains to curb lines.

(2) To acquire, develop, construct, reconstruct, extend, and maintain storm and sanitary sewers and systems, including outlets, holding areas and ponds, treatment plants, pumps, lift stations, service connections, and other appurtenances of a sewer system, within and without the corporate limits.

(3) To construct, reconstruct, extend, and maintain steam heating mains.

(4) To install, replace, extend, and maintain street lights and street lighting systems and special lighting systems.

(5) To acquire, improve, construct, reconstruct, extend, and maintain water works systems, including mains, valves, hydrants, service connections, wells, pumps, reservoirs, tanks, treatment plants, and other appurtenances of a water works system, within and without the corporate limits.

(6) To acquire, improve and equip parks, open space areas, playgrounds, and recreational facilities within or without the corporate limits.

(7) To plant trees on streets and provide for their trimming, care, and removal.

(8) To abate nuisances and to drain swamps, marshes, and ponds on public or private property and to fill the same.

(9) To construct, reconstruct, extend, and maintain dikes and other flood control works.

(10) To construct, reconstruct, extend, and maintain retaining walls and area walls.

(11) To acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and promote a pedestrian skyway system. Such improvement may be made upon a petition pursuant to section 429.031, subdivision 3.

(12) To acquire, construct, reconstruct, extend, operate, maintain, and promote underground pedestrian concourses.

(13) To acquire, construct, improve, alter, extend, operate, maintain, and promote public malls, plazas or courtyards.

(14) To construct, reconstruct, extend, and maintain district heating systems.

(15) To construct, reconstruct, alter, extend, operate, maintain, and promote fire protection systems in existing buildings, but only upon a petition pursuant to section 429.031, subdivision 3.

(16) To acquire, construct, reconstruct, improve, alter, extend, and maintain highway sound barriers.

(17) To improve, construct, reconstruct, extend, and maintain gas and electric distribution facilities owned by a municipal gas or electric utility.

(18) To purchase, install, and maintain signs, posts, and other markers for addressing related to the operation of enhanced 911 telephone service.

(19) To improve, construct, extend, and maintain facilities for Internet access and other communications purposes, if the council finds that:

(i) the facilities are necessary to make available Internet access or other communications services that are not and will not be available through other providers or the private market in the reasonably foreseeable future; and

(ii) the service to be provided by the facilities will not compete with service provided by private entities.

(20) To assess affected property owners for all or a portion of the costs agreed to with an electric utility, telecommunications carrier, or cable system operator to bury or alter a new or existing distribution system within the public right-of-way that exceeds the utility's design and construction standards, or those set by law, tariff, or franchise, but only upon petition under section 429.031, subdivision 3.

(21) To assess affected property owners for repayment of voluntary energy improvement financings under section 216C.436, subdivision 7, or 216C.437, subdivision 28.

new text begin (22) To construct, reconstruct, alter, extend, operate, maintain, and promote energy improvement projects in existing buildings, provided that: new text end

new text begin (i) a petition for the improvement is made by a property owner under section 429.031, subdivision 3; new text end

new text begin (ii) the municipality funds and administers the energy improvement project; new text end

new text begin (iii) project funds are only used for the installation of improvements to heating, ventilation, and air conditioning equipment and building envelope and for the installation of renewable energy systems; new text end

new text begin (iv) each property owner petitioning for the improvement receives notice that free or low-cost energy improvements may be available under federal, state, or utility programs; new text end

new text begin (v) for energy improvement projects on residential property, only residential property having five or more units may obtain financing for projects under this clause; and new text end

new text begin (vi) prior to financing an energy improvement project or imposing an assessment for a project, written notice is provided to the mortgage lender of any mortgage encumbering or otherwise secured by the property proposed to be improved. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for special assessments payable in 2022 and thereafter. new text end

Sec. 16.

Minnesota Statutes 2020, section 429.031, subdivision 3, is amended to read:

Subd. 3.

Petition by all owners.

Whenever all owners of real property abutting upon any street named as the location of any improvement shall petition the council to construct the improvement and to assess the entire cost against their property, the council may, without a public hearing, adopt a resolution determining such fact and ordering the improvement. The validity of the resolution shall not be questioned by any taxpayer or property owner or the municipality unless an action for that purpose is commenced within 30 days after adoption of the resolution as provided in section 429.036. Nothing herein prevents any property owner from questioning the amount or validity of the special assessment against the owner's property pursuant to section 429.081. In the case of a petition for the municipality to own and install a fire protection systemnew text begin , energy improvement projectsnew text end , a pedestrian skyway system, or on-site water contaminant improvements, the petition must contain or be accompanied by an undertaking satisfactory to the city by the petitioner that the petitioner will grant the municipality the necessary property interest in the building to permit the city to enter upon the property and the building to construct, maintain, and operate the fire protection systemnew text begin , energy improvement projectsnew text end , pedestrian skyway system, or on-site water contaminant improvements. In the case of a petition for the installation of a privately owned fire protection systemnew text begin , energy improvement projectsnew text end , a privately owned pedestrian skyway system, or privately owned on-site water contaminant improvements, the petition shall contain the plans and specifications for the improvement, the estimated cost of the improvement and a statement indicating whether the city or the owner will contract for the construction of the improvement. If the owner is contracting for the construction of the improvement, the city shall not approve the petition until it has reviewed and approved the plans, specifications, and cost estimates contained in the petition. The construction cost financed under section 429.091 shall not exceed the amount of the cost estimate contained in the petition. In the case of a petition for the installation of a fire protection systemnew text begin , energy improvement projectsnew text end , a pedestrian skyway system, or on-site water contaminant improvements, the petitioner may request abandonment of the improvement at any time after it has been ordered pursuant to subdivision 1 and before contracts have been awarded for the construction of the improvement under section 429.041, subdivision 2. If such a request is received, the city council shall abandon the proceedings but in such case the petitioner shall reimburse the city for any and all expenses incurred by the city in connection with the improvement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for special assessments payable in 2022 and thereafter. new text end

Sec. 17.

Laws 2009, chapter 88, article 2, section 46, subdivision 3, as amended by Laws 2013, chapter 143, article 4, section 37, and Laws 2019, First Special Session chapter 6, article 4, section 34, is amended to read:

Subd. 3.

Tax.

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

When a member municipality opts to receive fire service from the district or an additional municipality becomes a member of the district, the cost of providing fire services to that community shall be determined by the board deleted text begin and added to the maximum levy amountdeleted text end .

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the Cloquet Area Fire and Ambulance Special Taxing District and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 18.

new text begin SUSTAINABLE FOREST INCENTIVE ACT; VIOLATIONS. new text end

new text begin Land that was split-classified under Minnesota Statutes 2018, section 273.13, subdivision 23, paragraph (c), while enrolled in the sustainable forest incentive act management program under Minnesota Statutes, chapter 290C, is not in violation of the conditions of enrollment under Minnesota Statutes, sections 290C.03 and 290C.11, if, at the time of enrollment, a structure that is not a minor, ancillary nonresidential structure, or an excluded area three acres or larger that now contains a structure that is not a minor, ancillary nonresidential structure, was identified on the covenant required under Minnesota Statutes, section 290C.04, and appropriate acreage was excluded in accordance with Minnesota Statutes, section 290C.03. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for determinations of violations of the conditions of enrollment after June 30, 2021. new text end

Sec. 19.

new text begin 4D AFFORDABLE HOUSING PROGRAMS REPORT. new text end

new text begin (a) No later than January 15, 2022, the commissioner of revenue, in consultation with the Minnesota Housing Finance Agency, must produce a report on class 4d property, as defined in Minnesota Statutes, section 273.13, subdivision 25, and on local 4d affordable housing programs. The commissioner must provide a copy of the report to the chairs and ranking minority members of the legislative committees with jurisdiction over property taxation. The report must comply with the requirements of Minnesota Statutes, sections 3.195 and 3.197. The report must include the following to the extent available: new text end

new text begin (1) for properties classified in part or in whole as 4d qualifying under Minnesota Statutes, section 273.128, subdivision 1, clauses (1) to (4), with separate amounts given for properties under each clause: new text end

new text begin (i) the number of units classified as 4d in each property in the previous assessment year as reported by each county; new text end

new text begin (ii) the number of units not classified as 4d in each property in the previous assessment year; new text end

new text begin (iii) the property tax paid in 2021; new text end

new text begin (iv) the property tax reduction in 2021 resulting from the property being classified as 4d rather than 4a; and new text end

new text begin (v) the total number of 4d units in each of the last ten years; and new text end

new text begin (2) for properties classified in part or in whole as 4d qualifying under Minnesota Statutes, section 273.128, subdivision 1, clauses (1) to (4): new text end

new text begin (i) the percent change in each political subdivision's net tax capacity if the first-tier class rate of the 4d classification was reduced from 0.75 percent to 0.25 percent; new text end

new text begin (ii) the number of 4d properties located within tax increment financing districts, and the impact on increment generation in those districts as a result of these properties being classified as 4d rather than 4a; new text end

new text begin (iii) the impact that a 4d class rate reduction from 0.75 percent to 0.25 percent for the entire valuation would have on the property tax burden for homestead property; new text end

new text begin (iv) the total number of 4d units whose value qualifies for the second tier in each year since 2019; new text end

new text begin (v) the impact that a reduction of the 4d class rate from 0.75 percent to 0.25 percent for the entire valuation would have on property tax refunds received by renters and on property tax refunds received by homeowners in jurisdictions that contain 4d property; and new text end

new text begin (vi) a profile of income limits and area median incomes used in Minnesota by the United States Department of Housing and Urban Development to determine the eligibility for assisted housing programs. new text end

new text begin (b) Counties must report to the commissioner of revenue any data required by paragraph (a), clauses (1) and (2), by November 1, 2021. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

new text begin REVIEW OF UTILITY AND PIPELINE VALUATION PROCESS. new text end

new text begin The commissioner of revenue shall initiate a review of the framework for valuations of property described in Minnesota Statutes, sections 273.33, 273.35, 273.36, and 273.37, including the methodology for valuations prescribed in Minnesota Rules, chapter 8100. new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 7

AIDS AND CREDITS

Section 1.

Minnesota Statutes 2020, section 477A.03, subdivision 2b, is amended to read:

Subd. 2b.

Counties.

(a) For aids payable in 2018 and 2019, the total aid payable under section 477A.0124, subdivision 3, is $103,795,000, of which $3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 6. For aids payable in 2020, the total aid payable under section 477A.0124, subdivision 3, is $116,795,000, of which $3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 6. For aids payable in 2021 through 2024, the total aid payable under section 477A.0124, subdivision 3, is $118,795,000, of which $3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 6. For aids payable in 2025 and thereafter, the total aid payable under section 477A.0124, subdivision 3, is $115,795,000. deleted text begin Each calendar yeardeleted text end new text begin On or before the first installment date provided in section 477A.015, paragraph (a)new text end , $500,000 of this appropriation shall be deleted text begin retaineddeleted text end new text begin transferred each yearnew text end by the commissioner of revenue to deleted text begin make reimbursements to the commissioner of management and budgetdeleted text end new text begin the Board of Public Defensenew text end for deleted text begin payments madedeleted text end new text begin the payment of servicesnew text end under section 611.27. deleted text begin The reimbursements shall be to defray the additional costs associated with court-ordered counsel under section 611.27.deleted text end Any deleted text begin retaineddeleted text end new text begin transferrednew text end amounts not deleted text begin used for reimbursement in a yeardeleted text end new text begin expended or encumbered in a fiscal year shall be certified by the board of public defense to the commissioner of revenue on or before October 1 andnew text end shall be included in the next deleted text begin distributiondeleted text end new text begin certificationnew text end of county need aid deleted text begin that is certified to the county auditors for the purpose of property tax reduction for the next taxes payable yeardeleted text end .

(b) For aids payable in 2018 and 2019, the total aid under section 477A.0124, subdivision 4, is $130,873,444. For aids payable in 2020, the total aid under section 477A.0124, subdivision 4, is $143,873,444. For aids payable in 2021 and thereafter, the total aid under section 477A.0124, subdivision 4, is $145,873,444. The commissioner of revenue shall transfer to the commissioner of management and budget $207,000 annually for the cost of preparation of local impact notes as required by section 3.987, and other local government activities. The commissioner of revenue shall transfer to the commissioner of education $7,000 annually for the cost of preparation of local impact notes for school districts as required by section 3.987. The commissioner of revenue shall deduct the amounts transferred under this paragraph from the appropriation under this paragraph. The amounts transferred are appropriated to the commissioner of management and budget and the commissioner of education respectively.

Sec. 2.

Minnesota Statutes 2020, section 477A.17, is amended to read:

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

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

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

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

new text begin (b) Beginning with aids payable in 2022, for land within the boundary of Lake Vermilion-Soudan Underground Mine State Park designated as the Granelda Unit under section 85.012, subdivision 38a, the county shall receive an annual payment equal to 1.5 percent of the appraised value of all parcels comprising the Granelda Unit as determined for assessment year 2021. In each subsequent year, the county shall receive an annual payment equal to 1.5 percent of the appraised value of all parcels comprising the Granelda Unit for the most recent assessment year except that the appraised value of the parcels shall not be reduced below the assessment year 2021 appraised value of the parcels. new text end

new text begin The annual payments under this paragraph shall be distributed to the taxing jurisdictions containing the property as follows: one-third to the school districts; one-third to the town; and one-third to the county, except that the annual payment distributed to the county on behalf of unorganized Township 63, Range 17, shall be transferred by the county to the governing body of the public safety facility located in Section 32 in Township 63, Range 17, to be used for ongoing operations and maintenance of the facility. The payment to school districts is not a county apportionment under section 127A.34 and is not subject to aid recapture. Unless otherwise noted, each of those taxing jurisdictions may use the payments for their general purposes. new text end

deleted text begin (d)deleted text end new text begin (c) new text end Except as provided in this section, the payments shall be made as provided in sections 477A.11 to 477A.13.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2022. new text end

Sec. 3.

new text begin [477A.30] LOCAL HOMELESS PREVENTION AID. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have the meanings given: new text end

new text begin (1) "city" means a statutory or home rule charter city; new text end

new text begin (2) "distribution factor" means the total number of students experiencing homelessness in a county in the current school year and the previous two school years divided by the total number of students experiencing homelessness in all counties in the current school year and the previous two school years; and new text end

new text begin (3) "families" means families and persons 24 years of age or younger. new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The purpose of this section is to help local governments ensure no child is homeless within a local jurisdiction by keeping families from losing housing and helping those experiencing homelessness find housing. new text end

new text begin Subd. 3. new text end

new text begin Distribution. new text end

new text begin (a) A county's initial local homeless prevention aid amount equals the greater of: (1) $5,000; or (2)(i) five percent of the money appropriated to local homeless prevention aid under this section, times (ii) the ratio of the population of the county to the population of all counties. For the purpose of this paragraph, "population" means the population estimate used to calculate aid under section 477A.0124 for the same aid payable year. new text end

new text begin (b) The amount of the appropriation remaining after the allocation under paragraph (a) must be allocated to counties by multiplying each county's distribution factor by the total distribution available under this paragraph. Distribution factors must be based on the most recent counts of students experiencing homelessness in each county, as certified by the commissioner of education to the commissioner of revenue by July 1 of the year the aid is certified to the counties under subdivision 5. new text end

new text begin (c) A county's total local homeless prevention aid equals the sum of the amounts under paragraphs (a) and (b). new text end

new text begin Subd. 4. new text end

new text begin Use of proceeds. new text end

new text begin (a) Counties that receive a distribution under this section must use the proceeds to fund new or existing family homeless prevention and assistance projects or programs. These projects or programs may be administered by a county, a group of contiguous counties jointly acting together, a city, a group of contiguous cities jointly acting together, a Tribe, a group of Tribes, or a community-based nonprofit organization. Each project or program must include plans for: new text end

new text begin (1) targeting families with children who are eligible for a prekindergarten through grade 12 academic program and are: new text end

new text begin (i) living in overcrowded conditions in their current housing; new text end

new text begin (ii) paying more than 50 percent of their income for rent; or new text end

new text begin (iii) lacking a fixed, regular, and adequate nighttime residence; new text end

new text begin (2) targeting unaccompanied youth in need of an alternative residential setting; new text end

new text begin (3) connecting families with the social services necessary to maintain the families' stability in their homes, including but not limited to housing navigation, legal representation, and family outreach; and new text end

new text begin (4) one or more of the following: new text end

new text begin (i) providing rental assistance for a specified period of time which may exceed 24 months; or new text end

new text begin (ii) providing support and case management services to improve housing stability, including but not limited to housing navigation and family outreach. new text end

new text begin (b) Counties may choose not to spend all or a portion of the distribution under this section. Any unspent funds must be returned to the commissioner of revenue by December 31 of the year following the year that the aid was received. Any funds returned to the commissioner under this paragraph must be added to the overall distribution of aids certified under this section in the following year. Any unspent funds returned to the commissioner after the expiration under subdivision 8 are canceled to the general fund. new text end

new text begin Subd. 5. new text end

new text begin Payments. new text end

new text begin The commissioner of revenue must compute the amount of local homeless prevention aid payable to each county under this section. On or before August 1 of each year, the commissioner shall certify the amount to be paid to each county in the following year. The commissioner shall pay local homeless prevention aid annually at the times provided in section 477A.015. new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin $20,000,000 is annually appropriated from the general fund to the commissioner of revenue to make payments required under this section. new text end

new text begin Subd. 7. new text end

new text begin Report. new text end

new text begin (a) No later than January 15, 2025, the commissioner of revenue must produce a report on projects and programs funded by counties under this section. The report must include a list of the projects and programs, the number of people served by each, and an assessment of how each project and program impacts people who are currently experiencing homelessness or who are at risk of experiencing homelessness, as reported by the counties to the commissioner by December 31 each year on a form prescribed by the commissioner. The commissioner must provide a copy of the report to the chairs and ranking minority members of the legislative committees with jurisdiction over property taxes and services for persons experiencing homelessness. new text end

new text begin (b) The report in paragraph (a) must be updated every two years and the commissioner of revenue must provide copies of the updated reports to the chairs and ranking minority members of the legislative committees with jurisdiction over property taxes and services for persons experiencing homelessness by January 15 of the year the report is due. Report requirements under this subdivision expire following the report which includes the final distribution preceding the expiration in subdivision 8. new text end

new text begin Subd. 8. new text end

new text begin Expiration. new text end

new text begin Distributions under this section expire after aids payable in 2028 have been distributed. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2023 and thereafter. new text end

Sec. 4.

new text begin ADDITION TO STATE PARK. new text end

new text begin [85.012] [Subd. 38a.] Lake Vermilion-Soudan Underground Mine State Park, St. Louis County. The following areas are added to Lake Vermilion-Soudan Underground Mine State Park, St. Louis County, and are designated as the Granelda Unit: new text end

new text begin (1) Lot 3 of Section 28 and Lot 5 of Section 29 in Township 63 North of Range 17, all West of the 4th Principal Meridian, according to the United States Government Survey thereof; new text end

new text begin (2) the Northeast Quarter of the Southwest Quarter, the Northwest Quarter, the Southeast Quarter of the Northeast Quarter, the Northeast Quarter of the Northeast Quarter, and Lots numbered 1, 2, 3, and 4 of Section 29 in Township 63 North of Range 17, all West of the 4th Principal Meridian, according to the United States Government Survey thereof; new text end

new text begin (3) Lots 1 and 2 of Section 32 in Township 63 North of Range 17, all West of the 4th Principal Meridian, according to the United States Government Survey thereof; and new text end

new text begin (4) Lot 4 of Section 23 in Township 63 North of Range 18, all West of the 4th Principal Meridian, according to the United States Government Survey thereof. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

new text begin SUPPLEMENTAL 2022 CITY AID DISTRIBUTION. new text end

new text begin (a) Supplemental aid for a city equals the greater of: (1) zero; or (2) the difference between the local government aid amount under Minnesota Statutes, section 477A.013, subdivision 9, certified for the city for aid payable in 2021, minus the local government aid amount under Minnesota Statutes, section 477A.013, subdivision 9, certified for the city for aid payable in 2022. new text end

new text begin (b) The commissioner of revenue must notify a city of its supplemental aid amount before August 1, 2021, and must pay the aid in calendar year 2022 in two installments on the dates specified in Minnesota Statutes, section 477A.015. new text end

new text begin (c) Supplemental aid under this section must not be included for any calculations under Minnesota Statutes, section 477A.013, that rely on prior year aid amounts. new text end

new text begin (d) An amount sufficient to pay supplemental aid under this section is appropriated in fiscal year 2023 from the general fund to the commissioner of revenue. This is a onetime appropriation. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aid payable in calendar year 2022. new text end

Sec. 6.

new text begin CITY OF FLOODWOOD; GRANT. new text end

new text begin (a) $250,000 in fiscal year 2022 is appropriated from the general fund to the commissioner of revenue for a grant to the city of Floodwood. This is a onetime appropriation. The grant shall be paid by July 15, 2021. new text end

new text begin (b) The grant must be used by the city of Floodwood to pay the capital and administrative costs of the Floodwood City-wide Street and Infrastructure Project. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

new text begin LOCAL GOVERNMENT GRANTS. new text end

new text begin (a) $29,354,688 in fiscal year 2022 only is appropriated from the general fund to the commissioner of revenue for grants to counties identified in this section to pay a portion of the refund to a taxpayer under Minnesota Statutes, chapter 271, or Minnesota Statutes, section 278.12, for a final judgment that is the result of an appeal filed by a fluid pipeline company under Minnesota Statutes, section 273.372, based on assessment years 2012 through 2018. These grants must be used by each county to pay refund amounts owed by the county and other taxing districts within the county. The grants are exempt from the requirements of Minnesota Statutes, section 16B.98, and must be paid to the counties by August 15, 2021, and allocated as follows: new text end

new text begin (1) $91,781 to Aitkin County; new text end

new text begin (2) $2,225,319 to Beltrami County; new text end

new text begin (3) $2,573,615 to Carlton County; new text end

new text begin (4) $2,631,052 to Cass County; new text end

new text begin (5) $3,690,961 to Clearwater County; new text end

new text begin (6) $549,582 to Hubbard County; new text end

new text begin (7) $5,591,840 to Itasca County; new text end

new text begin (8) $1,189,765 to Kittson County; new text end

new text begin (9) $2,404,267 to Marshall County; new text end

new text begin (10) $2,551,225 to Pennington County; new text end

new text begin (11) $1,166,654 to Polk County; new text end

new text begin (12) $1,904,685 to Red Lake County; and new text end

new text begin (13) $2,783,942 to Saint Louis County. new text end

new text begin (b) The appropriation under this section is onetime. new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 8

LOCAL TAXES

Section 1.

Minnesota Statutes 2020, section 297A.99, subdivision 2, is amended to read:

Subd. 2.

Local resolution before application for authority.

(a) Before the governing body of a political subdivision requests legislative approval to impose a local sales tax authorized by a special law, it shall adopt a resolution indicating its approval of the tax. The resolution must include the following information:

(1) the proposed tax rate;

(2) a detailed description of no more than five capital projects that will be funded with revenue from the tax;

(3) documentation of the regional significance of each project, including the share of the economic benefit to or use of each project by persons residing, or businesses located, outside of the jurisdiction;

(4) the amount of local sales tax revenue that would be used for each project and the estimated time needed to raise that amount of revenue; and

(5) the total revenue that will be raised for all projects before the tax expires, and the estimated length of time that the tax will be in effect if all proposed projects are funded.

(b) The jurisdiction seeking authority to impose a local sales tax by special law must submit the resolution in paragraph (a) along with underlying documentation indicating how the benefits under paragraph (a), clause (3), were determined, to the chairs and ranking minority members of the legislative committees with jurisdiction over taxes no later than January 31 of the year in which the jurisdiction is seeking a special law authorizing the tax.

(c) The special legislation granting local sales tax authority is not required to allow funding for all projects listed in the resolution with the revenue from the local sales tax, but must not include any projects not contained in the resolution.

new text begin (d) For purposes of this section, a "capital project" or "project" means: new text end

new text begin (1) a single building or structure including associated infrastructure needed to safely access or use the building or structure; new text end

new text begin (2) improvements within a single park or named recreation area; or new text end

new text begin (3) a contiguous trail. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for local sales tax proposals submitted for approval after the day following final enactment. new text end

Sec. 2.

Laws 2019, First Special Session chapter 6, article 6, section 27, is amended to read:

Sec. 27.

CITY OF SARTELL; LOCAL TAXES AUTHORIZED.

Subdivision 1.

Food and beverage tax authorized.

Notwithstanding Minnesota Statutes, section 297A.99 or 477A.016, or any ordinance or other provision of law, and if approved by voters at deleted text begin the November 3, 2020,deleted text end new text begin anew text end general deleted text begin election,deleted text end or deleted text begin at adeleted text end special election held deleted text begin before November 3, 2020deleted text end new text begin pursuant to a resolution adopted by its governing bodynew text end , the city of Sartell may, by ordinance, impose a sales tax of up to 1-1/2 percent on the gross receipts of all food and beverages sold by a restaurant or place of refreshment, as defined by ordinance of the city, that is located within the city. For purposes of this section, "food and beverages" include retail on-sale of intoxicating liquor and fermented malt beverages.

Subd. 2.

Use of proceeds from authorized taxes.

The proceeds of the taxes imposed under subdivision 1 must be used by the city to fund capital or operational costs for new and existing recreational facilities and related amenities within the city. Authorized expenses include securing or paying debt service on bonds or other obligations issued to finance construction and improvement projects.

deleted text begin Subd. 3. deleted text end

deleted text begin Termination of taxes. deleted text end

deleted text begin The tax imposed under subdivision 1 expires five years after the tax is first imposed. deleted text end

Subd. 4.

Collection, administration, and enforcement.

The city may enter into an agreement with the commissioner of revenue to administer, collect, and enforce the taxes under subdivision 1. If the commissioner agrees to collect the tax, the provisions of Minnesota Statutes, sections 270C.171 and 297A.99, related to collection, administration, and enforcement apply.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

new text begin CARLTON COUNTY; LOCAL SALES AND USE TAX AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, sections 297A.99, subdivision 2, paragraph (b), and 477A.016, or any other law or ordinance, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, Carlton County may impose, by ordinance, a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by Carlton County to pay the costs of collecting and administering the tax, and to finance up to $60,000,000 for the construction of a new building consisting of a law enforcement center, judicial center, and jail serving a regional female offender program. Authorized costs include related parking, design, construction, reconstruction, mechanical upgrades, and engineering costs, as well as the associated bond costs for any bonds issued under subdivision 3. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) Carlton County may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project authorized in subdivision 2. The aggregate principal amount of bonds issued under this subdivision may not exceed $60,000,000, plus an amount applied to the payment of costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the county, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the county. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) 30 years after the tax is first imposed; or (2) when the county determines that it has received from this tax $60,000,000 to fund the project listed in subdivision 2, plus an amount sufficient to pay costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the county's general fund. The tax imposed under subdivision 1 may expire at an earlier time if the county determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of Carlton County and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 4.

new text begin CITY OF CLOQUET; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Cloquet may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Cloquet to pay the costs of collecting and administering the tax and the capital and administrative costs of any or all of the projects listed in this subdivision. The amount spent on each project is limited to the amount set forth below plus an amount equal to interest on and the costs of issuing any bonds: new text end

new text begin (1) construction, reconstruction, expansion, or improvement related to the Pine Valley Regional Park Project, including ski jump repairs, chalet replacement, and parking and lighting improvements, in an amount not to exceed $2,124,700; and new text end

new text begin (2) restoration, repair, and upgrading of the Cloquet Ice Arena in an amount not to exceed $6,025,500. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Cloquet may issue bonds under Minnesota Statutes, chapter 475, to finance up to $8,150,200 of the portion of the costs of the facilities authorized in subdivision 2 and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed $8,150,200 plus an amount to be applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of Cloquet, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city of Cloquet, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of: (1) ten years after the tax is first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for projects approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

new text begin CITY OF EDINA; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Edina may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Edina to pay the costs of collecting and administering the tax and paying for the following projects in the city, including securing and paying debt service on bonds issued to finance all or part of the following projects: new text end

new text begin (1) $17,700,000 plus associated bonding costs for development of Fred Richards Park as identified in the Fred Richards Park Master Plan; and new text end

new text begin (2) $21,600,000 plus associated bonding costs for improvements to Braemar Park as identified in the Braemar Park Master Plan. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Edina may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the projects authorized in subdivision 2 and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed: (1) $17,700,000 for the project listed in subdivision 2, clause (1), plus an amount to be applied to the payment of the costs of issuing the bonds; and (2) $21,600,000 for the project listed in subdivision 2, clause (2), plus an amount to be applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of Edina, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city of Edina, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of (1) 19 years after the tax is first imposed, or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for projects approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, must be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

new text begin CITY OF FERGUS FALLS; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax; authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, the city of Fergus Falls may, if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, impose, by ordinance, a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Fergus Falls to pay the costs of collecting and administering the tax and for the following projects in the city, including securing and paying debt service, on bonds issued to finance all or part of the following projects: new text end

new text begin (1) $7,800,000 for an aquatics center; and new text end

new text begin (2) $5,200,000 for the DeLagoon Improvement Project. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Fergus Falls may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the facilities authorized in subdivision 2, and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed: new text end

new text begin (1) $7,800,000 for the project listed in subdivision 2, clause (1), plus an amount needed to pay capitalized interest and an amount to be applied to the payment of the costs of issuing the bonds; and new text end

new text begin (2) $5,200,000 for the project listed in subdivision 2, clause (2), plus an amount needed to pay capitalized interest and an amount to be applied to the payment of the costs of issuing the bonds. new text end

new text begin (b) The bonds may be paid from or secured by any funds available to the city of Fergus Falls, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (c) The bonds are not included in computing any debt limitation applicable to the city of Fergus Falls, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of (1) December 31, 2037, or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for projects approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Fergus Falls and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 7.

new text begin CITY OF GRAND RAPIDS; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Grand Rapids may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Grand Rapids to pay the costs of collecting and administering the tax including securing and paying debt service on bonds issued and to finance up to $5,980,000 for reconstruction, remodeling, and upgrades to the Grand Rapids IRA Civic Center. Authorized costs include design, construction, reconstruction, mechanical upgrades, and engineering costs, as well as the associated bond costs for any bonds issued under subdivision 3. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Grand Rapids may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the facilities authorized in subdivision 2. The aggregate principal amount of bonds issued under this subdivision may not exceed $5,980,000, plus an amount to be applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of Grand Rapids, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city of Grand Rapids, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) seven years after the tax is first imposed; or (2) when the city council determines that it has received from this tax $5,980,000 to fund the project listed in subdivision 2 for projects approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Any funds remaining after payment of all such costs and retirement or redemption of the bonds shall be placed in the general fund of the city, except for funds required to be retained in the state general fund under Minnesota Statutes, section 297A.99, subdivision 3. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Grand Rapids and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 8.

new text begin CITY OF HERMANTOWN; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Hermantown may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Hermantown to pay the costs of collecting and administering the tax and paying for the following projects in the city related to a Community Recreational Initiative, including securing and paying debt service on bonds issued to finance all or part of the following projects: new text end

new text begin (1) $10,840,000 for an addition of a second ice sheet with locker rooms and other facilities and upgrades to the Hermantown Hockey Arena; new text end

new text begin (2) $4,570,000 for construction of the Hermantown-Proctor trail running from the Essentia Wellness Center to the border with Proctor and eventually connecting to the Munger Trail; and new text end

new text begin (3) $3,900,000 for improvements and upgrades to Fichtner Park. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Hermantown may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the facilities authorized in subdivision 2 and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed: new text end

new text begin (1) $10,840,000 for the project listed in subdivision 2, clause (1), plus an amount to be applied to the payment of the costs of issuing the bonds; new text end

new text begin (2) $4,570,000 for the project listed in subdivision 2, clause (2), plus an amount to be applied to the payment of the costs of issuing the bonds; and new text end

new text begin (3) $3,900,000 for the project listed in subdivision 2, clause (3), plus an amount to be applied to the payment of the costs of issuing the bonds. new text end

new text begin The bonds may be paid from or secured by any funds available to the city of Hermantown, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city of Hermantown, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of (1) 20 years after being first imposed, or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for projects approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

new text begin ITASCA COUNTY; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law or ordinance and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, Itasca County may impose by ordinance a sales and use tax of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by Itasca County to pay the costs of collecting and administering the tax and paying for up to $75,000,000 for new construction of or upgrades to correctional facilities, new construction of or upgrades to court facilities including ancillary support accommodations, and new construction of or upgrades to county offices, plus an amount needed for securing and paying debt service on bonds issued for the project. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) Itasca County may issue bonds under Minnesota Statutes, chapter 475, to finance the costs of the facility authorized in subdivision 2. The aggregate principal amount of bonds issued under this subdivision may not exceed $75,000,000 for the project listed in subdivision 2, plus an amount to be applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the county, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the county, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of: (1) 30 years after the tax is first imposed; or (2) when the county board determines that the amount received from the tax is sufficient to pay $75,000,000 in project costs authorized under subdivision 2, plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the county. The tax imposed under subdivision 1 may expire at an earlier time if the county so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of Itasca County and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 10.

new text begin CITY OF LITCHFIELD; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Litchfield may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Litchfield to pay the costs of collecting and administering the tax and for up to $10,000,000 for the cost of constructing a community wellness/recreation center that will include a gymnasium and general fitness spaces, a dedicated walking section, a community room, and any locker rooms and mechanical equipment needed for future additions to the facility. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Litchfield may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the facilities authorized in subdivision 2 and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed $10,000,000 for the project listed in subdivision 2 plus an amount to be applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of Litchfield, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city of Litchfield and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of: (1) 20 years after being first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for projects approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

new text begin CITY OF LITTLE FALLS; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Little Falls may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Little Falls to pay the costs of collecting and administering the tax and for up to $17,000,000 for the cost of constructing a community recreational facility that includes a gymnasium with an indoor track, multipurpose rooms for meeting and educational spaces, office and storage space, and outdoor recreational facilities for aquatic recreation with a master plan to incorporate future additions to the facility. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Little Falls may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project authorized in subdivision 2 and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed $17,000,000 for the project listed in subdivision 2 plus an amount needed to pay capitalized interest and an amount to be applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of Little Falls, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city of Little Falls, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of: (1) 30 years after being first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for the project if approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Little Falls and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 12.

new text begin CITY OF MAPLE GROVE; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Maple Grove may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Maple Grove to pay the costs of collecting and administering the tax, and to finance up to $90,000,000 for the expansion and renovation of the Maple Grove Community Center, plus an amount needed for securing and paying debt service on bonds issued to finance the project. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Maple Grove may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project authorized in subdivision 2, and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed $90,000,000, plus an amount applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) 20 years after the tax is first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for the project approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Maple Grove and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 13.

new text begin MILLE LACS COUNTY; LOCAL SALES AND USE TAX AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.016, or any other law or ordinance, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, Mille Lacs County may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by Mille Lacs County to pay the costs of collecting and administering the tax, and to finance up to $10,000,000 for the construction of a public works building in Mille Lacs County, plus an amount needed for securing and paying debt service on bonds issued to finance the project. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) Mille Lacs County may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project authorized in subdivision 2, and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed $10,000,000, plus an amount applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the county, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the county. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) eight years after the tax is first imposed; or (2) when the county board determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for the project approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the county. The tax imposed under subdivision 1 may expire at an earlier time if the county so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of Mille Lacs County and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 14.

new text begin CITY OF MOORHEAD; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Moorhead may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Moorhead to pay the costs of collecting and administering the tax, and to finance up to $31,590,000 for the construction of a regional library and community center in the city of Moorhead, plus an amount needed for securing and paying debt service on bonds issued to finance the project. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Moorhead may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project authorized in subdivision 2, and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed $31,590,000, plus an amount applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) 22 years after the tax is first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for the project approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

new text begin CITY OF OAKDALE; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.016, or any other ordinance or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Oakdale may impose, by ordinance, a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Oakdale to pay the costs of collecting and administering the tax and paying for the following projects in the city, including securing and paying debt service on bonds issued to finance all or part of the following projects: new text end

new text begin (1) $22,000,000 plus associated bonding costs for construction of a new public works facility; and new text end

new text begin (2) $15,000,000 plus associated bonding costs for construction and rehabilitation, and associated building costs of the police department facility. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Oakdale may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the projects authorized in subdivision 2. The aggregate principal amount of bonds issued under this subdivision may not exceed: (1) $22,000,000 for the project listed in subdivision 2, clause (1), plus an amount applied to the payment of costs of issuing the bonds; and (2) $15,000,000 for the projects listed in subdivision 2, clause (2), plus an amount applied to the payment of costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of Oakdale, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) 25 years after the tax is first imposed; or (2) when the city council determines that the city has received from this tax $37,000,000 to fund the projects listed in subdivision 2, plus an amount sufficient to pay costs related to issuance of any bonds authorized in subdivision 3, including interest on the bonds. Except as otherwise provided under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to timing of the termination under Minnesota Statutes, section 297A.99, shall be placed in the city's general fund. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

new text begin CITY OF ST. CLOUD; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of St. Cloud may impose, by ordinance, a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of St. Cloud to pay the costs of collecting and administering the tax, including securing and paying debt service on bonds issued, and to finance up to $21,100,000 plus associated bonding costs for expansion and improvement of St. Cloud's Municipal Athletic Complex. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of St. Cloud may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the projects authorized in subdivision 2. The aggregate principal amount of bonds issued under this subdivision may not exceed $21,100,000 plus an amount applied to the payment of costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of St. Cloud, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) five years after the tax is first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2, and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, plus an amount sufficient to pay costs related to issuance of any bonds authorized in subdivision 3, including interest on the bonds. Any funds remaining after payment of the allowed costs due to timing of the termination under Minnesota Statutes, section 297A.99, shall be placed in the city's general fund. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of St. Cloud and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 17.

new text begin CITY OF ST. PETER; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of St. Peter may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of St. Peter to pay the costs of collecting and administering the tax and paying for up to $9,121,000 for construction of a new fire station, plus an amount needed for securing and paying debt service on bonds issued to finance the project. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of St. Peter may issue bonds under Minnesota Statutes, chapter 475, to finance the costs of the facility authorized in subdivision 2. The aggregate principal amount of bonds issued under this subdivision may not exceed $9,121,000 for the project listed in subdivision 2, plus an amount to be applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of St. Peter, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city of St. Peter; and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of: (1) 40 years after the tax is first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for $9,121,000 in project costs authorized under subdivision 2, plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of St. Peter and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 18.

new text begin CITY OF STAPLES; LOCAL SALES AND USE TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Staples may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Staples to pay the costs of collecting and administering the tax, and to finance up to $1,600,000 for the renovation of the Staples Community Center, plus an amount needed for securing and paying debt service on bonds issued to finance the project. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Staples may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project authorized in subdivision 2, and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed $1,600,000, plus an amount applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) 25 years after the tax is first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for the project approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

new text begin CITY OF WADENA; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Wadena may impose by ordinance a sales and use tax of one-quarter of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Wadena to pay the costs of collecting and administering the tax and to finance up to $3,000,000, plus associated bonding costs including securing and paying debt service on bonds issued, for the Wadena Library Rehabilitation Project. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Wadena may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project authorized in subdivision 2. The aggregate principal amount of bonds issued under this subdivision may not exceed $3,000,000, plus an amount applied to the payment of costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city of Wadena, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires at the earlier of: (1) 20 years after the tax is first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2, and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, plus an amount sufficient to pay costs related to issuance of any bonds authorized in subdivision 3, including interest on the bonds. Any funds remaining after payment of the allowed costs due to timing of the termination under Minnesota Statutes, section 297A.99, shall be placed in the city's general fund. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

new text begin CITY OF WAITE PARK; TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 297A.99, subdivision 1, or 477A.016, or any other law, ordinance, or city charter, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Waite Park may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under any other special law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Waite Park to pay the costs of collecting and administering the tax and for the following projects in the city, including securing and paying debt service on bonds issued to finance all or part of the following projects: new text end

new text begin (1) up to $7,500,000 plus associated bonding costs for regional trail connections; and new text end

new text begin (2) up to $20,000,000 plus associated bonding costs for construction and equipping of a public safety facility. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Waite Park may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the facilities authorized in subdivision 2 and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed: new text end

new text begin (1) $7,500,000 for the project listed in subdivision 2, clause (1), plus an amount needed to pay capitalized interest and an amount to be applied to the payment of the costs of issuing the bonds; and new text end

new text begin (2) $20,000,000 for the project listed in subdivision 2, clause (2), plus an amount needed to pay capitalized interest and an amount to be applied to the payment of the costs of issuing the bonds. new text end

new text begin The bonds may be paid from or secured by any funds available to the city of Waite Park, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city of Waite Park, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of (1) 19 years after the tax is first imposed, or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for projects approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of the allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Waite Park and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 21.

new text begin CITY OF WARREN; LOCAL SALES AND USE TAXES AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 477A.016, or any other law or ordinance, and if approved by the voters at a general election as required under Minnesota Statutes, section 297A.99, subdivision 3, the city of Warren may impose by ordinance a sales and use tax of one-half of one percent for the purposes specified in subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, and enforcement of the tax authorized under this subdivision. The tax imposed under this subdivision is in addition to any local sales and use tax imposed under current law. new text end

new text begin Subd. 2. new text end

new text begin Use of sales and use tax revenues. new text end

new text begin The revenues derived from the tax authorized under subdivision 1 must be used by the city of Warren to pay the costs of collecting and administering the tax, and to finance up to $1,600,000 for the construction of a new child care facility. Authorized costs include related parking, design, and construction costs, as well as payment of debt service on bonds issued to finance the project listed in this subdivision. new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin (a) The city of Warren may issue bonds under Minnesota Statutes, chapter 475, to finance all or a portion of the costs of the project authorized in subdivision 2, and approved by the voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a). The aggregate principal amount of bonds issued under this subdivision may not exceed $1,600,000, plus an amount needed to pay capitalized interest and an amount to be applied to the payment of the costs of issuing the bonds. The bonds may be paid from or secured by any funds available to the city, including the tax authorized under subdivision 1. The issuance of bonds under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end

new text begin (b) The bonds are not included in computing any debt limitation applicable to the city. Any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation. A separate election to approve the bonds under Minnesota Statutes, section 475.58, is not required. new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin Subject to Minnesota Statutes, section 297A.99, subdivision 12, the tax imposed under subdivision 1 expires at the earlier of: (1) 20 years after the tax is first imposed; or (2) when the city council determines that the amount received from the tax is sufficient to pay for the project costs authorized under subdivision 2 for the project approved by voters as required under Minnesota Statutes, section 297A.99, subdivision 3, paragraph (a), plus an amount sufficient to pay the costs related to issuance of any bonds authorized under subdivision 3, including interest on the bonds. Except as otherwise provided in Minnesota Statutes, section 297A.99, subdivision 3, paragraph (f), any funds remaining after payment of allowed costs due to the timing of the termination of the tax under Minnesota Statutes, section 297A.99, subdivision 12, shall be placed in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier time if the city so determines by ordinance. new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 9

TAX INCREMENT FINANCING

Section 1.

Minnesota Statutes 2020, section 469.176, is amended by adding a subdivision to read:

new text begin Subd. 4n. new text end

new text begin Temporary use of increment authorized. new text end

new text begin (a) Notwithstanding any other provision of this section or any other law to the contrary, except the requirements to pay bonds to which increments are pledged, the authority may elect, by resolution, to transfer unobligated increment for one or more of the following purposes: new text end

new text begin (1) to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities, if doing so will create or retain jobs in the state, including construction jobs, and the construction commences before December 31, 2025, and would not have commenced before that date without the assistance; or new text end

new text begin (2) to make an equity or similar investment in a corporation, partnership, or limited liability company that the authority determines is necessary to make construction of a development that meets the requirement of clause (1) financially feasible. new text end

new text begin (b) For each calendar year for which transfers are permitted under this subdivision, the maximum transfer equals the excess of the district's unobligated increment which includes any increment not required for payments of obligations due during six months following the transfer on outstanding bonds, binding contracts, and other outstanding financial obligations of the district to which the district's increment is pledged. new text end

new text begin (c) The authority may transfer increments permitted under this subdivision after creating a written spending plan that authorizes the authority to take the action described in paragraph (a) and details the use of transferred increment. Additionally, the municipality must approve the authority's spending plan after holding a public hearing. The municipality must publish notice of the hearing in a newspaper of general circulation in the municipality and on the municipality's public website at least ten days, but not more than 30 days, prior to the date of the hearing. new text end

new text begin (d) Increment that is improperly retained, received, spent, or transferred is not eligible for transfer under this subdivision. new text end

new text begin (e) An authority making a transfer under this subdivision must provide to the Office of the State Auditor a copy of the spending plan approved and signed by the municipality. new text end

new text begin (f) The authority to transfer increments under this subdivision expires on December 31, 2022. All transferred increments must be spent by December 31, 2025. Increment not spent by December 31, 2025, must be returned to the district. If the district has already been decertified, the increment shall be treated as excess increment and distributed as provided in subdivision 2, paragraph (c), clause (4). new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and applies to increments from any district that are unobligated as of the date of final enactment regardless of when the request for certification was made. new text end

Sec. 2.

Minnesota Statutes 2020, section 469.1763, subdivision 2, is amended to read:

Subd. 2.

Expenditures outside district.

(a) For each tax increment financing district, an amount equal to at least 75 percent of the total revenue derived from tax increments paid by properties in the district must be expended on activities in the district or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities in the district or to pay, or secure payment of, debt service on credit enhanced bonds. For districts, other than redevelopment districts for which the request for certification was made after June 30, 1995, the in-district percentage for purposes of the preceding sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax increments paid by properties in the district may be expended, through a development fund or otherwise, on activities outside of the district but within the defined geographic area of the project except to pay, or secure payment of, debt service on credit enhanced bonds. For districts, other than redevelopment districts for which the request for certification was made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is 20 percent. The revenues derived from tax increments paid by properties in the district that are expended on costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before calculating the percentages that must be expended within and without the district.

(b) In the case of a housing district, a housing project, as defined in section 469.174, subdivision 11, is an activity in the district.

(c) All administrative expenses are for activities outside of the district, except that if the only expenses for activities outside of the district under this subdivision are for the purposes described in paragraph (d), administrative expenses will be considered as expenditures for activities in the district.

(d) The authority may elect, in the tax increment financing plan for the district, to increase by up to ten percentage points the permitted amount of expenditures for activities located outside the geographic area of the district under paragraph (a). As permitted by section 469.176, subdivision 4k, the expenditures, including the permitted expenditures under paragraph (a), need not be made within the geographic area of the project. Expenditures that meet the requirements of this paragraph are legally permitted expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. To qualify for the increase under this paragraph, the expenditures must:

(1) be used exclusively to assist housing that meets the requirement for a qualified low-income building, as that term is used in section 42 of the Internal Revenue Code; and

(2) not exceed the qualified basis of the housing, as defined under section 42(c) of the Internal Revenue Code, less the amount of any credit allowed under section 42 of the Internal Revenue Code; and

(3) be used to:

(i) acquire and prepare the site of the housing;

(ii) acquire, construct, or rehabilitate the housing; or

(iii) make public improvements directly related to the housing; or

(4) be used to develop housing:

(i) if the market value of the housing does not exceed the lesser of:

(A) 150 percent of the average market value of single-family homes in that municipality; or

(B) $200,000 for municipalities located in the metropolitan area, as defined in section 473.121, or $125,000 for all other municipalities; and

(ii) if the expenditures are used to pay the cost of site acquisition, relocation, demolition of existing structures, site preparation, and pollution abatement on one or more parcels, if the parcel contains a residence containing one to four family dwelling units that has been vacant for six or more months and is in foreclosure as defined in section 325N.10, subdivision 7, but without regard to whether the residence is the owner's principal residence, and only after the redemption period has expireddeleted text begin .deleted text end new text begin ; ornew text end

new text begin (5) to assist owner-occupied housing that meets the requirements of section 469.1761, subdivision 2. new text end

(e) The authority under paragraph (d), clause (4), expires on December 31, 2016. Increments may continue to be expended under this authority after that date, if they are used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph (a), if December 31, 2016, is considered to be the last date of the five-year period after certification under that provision.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2020, section 469.1763, subdivision 3, is amended to read:

Subd. 3.

Five-year rule.

(a) Revenues derived from tax increments paid by properties in the district are considered to have been expended on an activity within the district under subdivision 2 only if one of the following occurs:

(1) before or within five years after certification of the district, the revenues are actually paid to a third party with respect to the activity;

(2) bonds, the proceeds of which must be used to finance the activity, are issued and sold to a third party before or within five years after certification, the revenues are spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance, reasonably expected to be spent before the end of the later of (i) the five-year period, or (ii) a reasonable temporary period within the meaning of the use of that term under section 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund;

(3) binding contracts with a third party are entered into for performance of the activity before or within five years after certification of the district and the revenues are spent under the contractual obligation;

(4) costs with respect to the activity are paid before or within five years after certification of the district and the revenues are spent to reimburse a party for payment of the costs, including interest on unreimbursed costs; or

(5) expenditures are made for housing purposes as permitted by subdivision 2, paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted by subdivision 2, paragraph (e).

(b) For purposes of this subdivision, bonds include subsequent refunding bonds if the original refunded bonds meet the requirements of paragraph (a), clause (2).

(c) For a redevelopment district or a renewal and renovation district certified after June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph (a) are extended to ten years after certification of the district. For a redevelopment district certified after April 20, 2009, and before June 30, 2012, the five-year periods described in paragraph (a) are extended to eight years after certification of the district. This extension is provided primarily to accommodate delays in development activities due to unanticipated economic circumstances.

new text begin (d) For a redevelopment district that was certified after December 31, 2017, and before June 30, 2020, the five-year periods described in paragraph (a) are extended to eight years after certification of the district. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for certification was made after December 31, 2017. new text end

Sec. 4.

Minnesota Statutes 2020, section 469.1763, subdivision 4, is amended to read:

Subd. 4.

Use of revenues for decertification.

(a) In each year beginning with the sixth year following certification of the districtnew text begin , or beginning with the ninth year following certification of the district for districts whose five-year rule is extended to eight years under subdivision 3, paragraph (d)new text end , if the applicable in-district percent of the revenues derived from tax increments paid by properties in the district exceeds the amount of expenditures that have been made for costs permitted under subdivision 3, an amount equal to the difference between the in-district percent of the revenues derived from tax increments paid by properties in the district and the amount of expenditures that have been made for costs permitted under subdivision 3 must be used and only used to pay or defease the following or be set aside to pay the following:

(1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b);

(2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4);

(3) credit enhanced bonds to which the revenues derived from tax increments are pledged, but only to the extent that revenues of the district for which the credit enhanced bonds were issued are insufficient to pay the bonds and to the extent that the increments from the applicable pooling percent share for the district are insufficient; or

(4) the amount provided by the tax increment financing plan to be paid under subdivision 2, paragraphs (b), (d), and (e).

(b) The district must be decertified and the pledge of tax increment discharged when the outstanding bonds have been defeased and when sufficient money has been set aside to pay, based on the increment to be collected through the end of the calendar year, the following amounts:

(1) contractual obligations as defined in subdivision 3, paragraph (a), clauses (3) and (4);

(2) the amount specified in the tax increment financing plan for activities qualifying under subdivision 2, paragraph (b), that have not been funded with the proceeds of bonds qualifying under paragraph (a), clause (1); and

(3) the additional expenditures permitted by the tax increment financing plan for housing activities under an election under subdivision 2, paragraph (d), that have not been funded with the proceeds of bonds qualifying under paragraph (a), clause (1).

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

new text begin CITIES OF MINNETONKA, RICHFIELD, AND ST. LOUIS PARK; TEMPORARY TRANSFER OF INCREMENT AUTHORIZED. new text end

new text begin Subdivision 1. new text end

new text begin Transfer of increment. new text end

new text begin (a) The city of Minnetonka, or its economic development authority, may transfer tax increment accumulated for housing development purposes under Minnesota Statutes, section 469.1763, subdivision 2, paragraph (b) or (d), to the housing trust fund established by the city of Minnetonka under Minnesota Statutes, section 462C.16. Increment transferred under this paragraph must be used as provided in subdivision 2. new text end

new text begin (b) The city of Richfield, or its housing and redevelopment authority, may transfer tax increment accumulated for housing development purposes under Minnesota Statutes, section 469.1763, subdivision 2, paragraph (b) or (d), to the housing trust fund established by the city of Richfield under Minnesota Statutes, section 462C.16. Increment transferred under this paragraph must be used as provided in subdivision 2. new text end

new text begin (c) The city of St. Louis Park, or its economic development authority, may transfer tax increment accumulated for housing development purposes under Minnesota Statutes, section 469.1763, subdivision 2, paragraph (b) or (d), to the housing trust fund established by the city of St. Louis Park under Minnesota Statutes, section 462C.16. Increment transferred under this paragraph must be used as provided in subdivision 2. new text end

new text begin Subd. 2. new text end

new text begin Allowable use. new text end

new text begin Tax increment transferred under subdivision 1 must be used only to: new text end

new text begin (1) make grants, loans, and loan guarantees for the development, rehabilitation, or financing of housing; or new text end

new text begin (2) match other funds from federal, state, or private resources for housing projects. new text end

new text begin Subd. 3. new text end

new text begin Annual financial reporting. new text end

new text begin Tax increment transferred under this section is subject to the annual reporting requirements under Minnesota Statutes, section 469.175, subdivision 6. new text end

new text begin Subd. 4. new text end

new text begin Legislative report. new text end

new text begin By February 1, 2024, and February 1, 2026, each city must issue a report to the chairs and ranking minority members of the legislative committees with jurisdiction over taxes and property taxes. The report must include detailed information relating to each housing project financed with increment transferred under this section, including, when applicable, the percentage of area median income relative to each housing project, the total cost per housing project, the number of units per housing project, and income and rent limitations required under federal, state, or local law for each housing project. new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin The authority to make transfers under subdivision 1 expires December 31, 2026. new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) Subdivision 1, paragraph (a), is effective the day after the governing body of the city of Minnetonka and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

new text begin (b) Subdivision 1, paragraph (b), is effective the day after the governing body of the city of Richfield and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

new text begin (c) Subdivision 1, paragraph (c), is effective the day after the governing body of the city of St. Louis Park and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 6.

new text begin CITY OF BLOOMINGTON; TIF AUTHORITY; AMERICAN BOULEVARD. new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin Pursuant to the special rules established in subdivision 2, the housing and redevelopment authority of the city of Bloomington or the city of Bloomington may establish a redevelopment district within the city of Bloomington, limited to the following parcels, identified by tax identification numbers, together with adjacent roads and rights-of-way: 04-027-24-11-0032, 04-027-24-11-0033, and 04-027-24-11-0034. new text end

new text begin Subd. 2. new text end

new text begin Special rules. new text end

new text begin If the city or authority establishes a tax increment financing district under this section, the following special rules apply: new text end

new text begin (1) the district meets all the requirements of Minnesota Statutes, section 469.174, subdivision 10; new text end

new text begin (2) expenditures incurred in connection with the development of the property described in subdivision 1 meet the requirements of Minnesota Statutes, section 469.176, subdivision 4j; and new text end

new text begin (3) increments generated from the district may be expended on undergrounding or overhead power lines, transformers, and related utility infrastructure within the project area and all such expenditures are deemed expended on activities within the district for purposes of Minnesota Statutes, section 469.1763. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Bloomington and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 7.

new text begin CITY OF BLOOMINGTON; TIF AUTHORITY; 98TH AND ALDRICH. new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin Pursuant to the special rules established in subdivision 2, the housing and redevelopment authority of the city of Bloomington or the city of Bloomington may establish a redevelopment district within the city of Bloomington, limited to the following parcels, identified by tax identification numbers, together with adjacent roads and rights-of-way: 16-027-24-41-0010, 16-027-24-41-0011, and 16-027-24-41-0012. new text end

new text begin Subd. 2. new text end

new text begin Special rules. new text end

new text begin If the city or authority establishes a tax increment financing district under this section, the following special rules apply: new text end

new text begin (1) the district meets all the requirements of Minnesota Statutes, section 469.174, subdivision 10; and new text end

new text begin (2) expenditures incurred in connection with the development of the property described in subdivision 1 meet the requirements of Minnesota Statutes, section 469.176, subdivision 4j. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Bloomington and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 8.

new text begin CITY OF BURNSVILLE; TIF AUTHORITY; BURNSVILLE CENTER MALL. new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin Under the special rules established in subdivision 2, the economic development authority of the city of Burnsville or the city of Burnsville may establish one or more redevelopment districts located wholly within the area of the city of Burnsville limited to the parcels comprising the Burnsville Center mall together with adjacent roads and rights-of-way. new text end

new text begin Subd. 2. new text end

new text begin Special rules. new text end

new text begin If the city or authority establishes a tax increment financing district under this section, the following special rules apply: new text end

new text begin (1) the districts are deemed to meet all the requirements of Minnesota Statutes, section 469.174, subdivision 10; new text end

new text begin (2) expenditures incurred in connection with the development of the property described in subdivision 1 are deemed to meet the requirements of Minnesota Statutes, section 469.176, subdivision 4j; and new text end

new text begin (3) increments generated from the districts may be expended for the construction and acquisition of property for a bridge, tunnel, or other connector from the property described in subdivision 1 across adjacent roads and rights-of-way and all such expenditures are deemed expended on activities within the district for purposes of Minnesota Statutes, section 469.1763. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Burnsville and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 9.

new text begin CITY OF MOUNTAIN LAKE; TIF DISTRICT NO. 1-8; FIVE-YEAR RULE EXTENSION. new text end

new text begin (a) The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that activities must be undertaken within a five-year period from the date of certification of a tax increment financing district, is extended by a five-year period for Tax Increment Financing District No. 1-8, administered by the city of Mountain Lake or its economic development authority. new text end

new text begin (b) The requirement of Minnesota Statutes, section 469.1763, subdivision 4, relating to the use of increment after the expiration of the five-year period under Minnesota Statutes, section 469.1763, subdivision 3, is extended to the 11th year for Tax Increment Financing District No. 1-8. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Mountain Lake and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 10.

new text begin CITY OF RAMSEY; TAX INCREMENT FINANCING DISTRICT NO. 14; FIVE-YEAR RULE EXTENSION. new text end

new text begin (a) The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that activities must be undertaken within a five-year period from the date of certification of a tax increment financing district, is extended by a two-year period to November 28, 2023, for Tax Increment Financing District No. 14 administered by the city of Ramsey. new text end

new text begin (b) The requirements of Minnesota Statutes, section 469.1763, subdivision 4, relating to the use of increment after the expiration of the five-year period under Minnesota Statutes, section 469.1763, subdivision 3, is extended to the 13th year for Tax Increment Financing District No. 14. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

new text begin CITY OF WAYZATA; TIF DISTRICT NO. 6; EXPENDITURES ALLOWED. new text end

new text begin Notwithstanding Minnesota Statutes, section 469.1763, subdivision 2, the city of Wayzata may expend increments generated from Tax Increment Financing District No. 6 for the design and construction of the lakefront pedestrian walkway and community transient lake public access infrastructure related to the Panoway on Wayzata Bay project, and all such expenditures are deemed expended on activities within the district. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of the city of Wayzata and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end

Sec. 12.

new text begin CITY OF WINDOM; TIF DISTRICT NO. 1-22; FIVE-YEAR RULE EXTENSION; DURATION EXTENSION. new text end

new text begin (a) The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that activities must be undertaken within a five-year period from the date of certification of a tax increment financing district, is considered to be met for Tax Increment Financing District No. 1-22, administered by the city of Windom or its economic development authority, if activities are undertaken within ten years of the district's certification. new text end

new text begin (b) The requirements of Minnesota Statutes, section 469.1763, subdivision 4, relating to the use of increment after the expiration of the five-year period under Minnesota Statutes, section 469.1763, subdivision 3, is extended to the 11th year for Tax Increment Financing District No. 1-22. new text end

new text begin (c) Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the city of Windom, or its economic development authority, may elect to extend the duration of Tax Increment Financing District No. 1-22 by five years. new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraphs (a) and (b) are effective the day after the governing body of the city of Windom and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. Paragraph (c) is effective upon compliance by the city of Windom, Cottonwood County, and Independent School District No. 177 with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021, subdivisions 2 and 3. new text end

ARTICLE 10

PUBLIC FINANCE

Section 1.

Minnesota Statutes 2020, section 297A.993, subdivision 2, is amended to read:

Subd. 2.

Allocation; termination.

The proceeds of the taxes must be dedicated exclusively to: (1) payment of the capital cost of a specific transportation project or improvement; (2) payment of the costs, which may include both capital and operating costs, of a specific transit project or improvement; (3) payment of the capital costs of a safe routes to school program under section 174.40; deleted text begin ordeleted text end (4) payment of transit operating costsnew text begin ; or (5) payment of the capital cost of constructing buildings and other facilities for maintaining transportation or transit projects or improvementsnew text end . The transportation or transit project or improvement must be designated by the board of the county, or more than one county acting under a joint powers agreement. Except for taxes for operating costs of a transit project or improvement, or for transit operations, the taxes must terminate when revenues raised are sufficient to finance the project. Nothing in this subdivision prohibits the exclusive dedication of the proceeds of the taxes to payments for more than one project or improvement. After a public hearing a county may, by resolution, dedicate the proceeds of the tax for a new enumerated project.

Sec. 2.

Minnesota Statutes 2020, section 453A.04, subdivision 21, is amended to read:

Subd. 21.

deleted text begin All other powersdeleted text end new text begin Exercising powers of a municipal power agencynew text end .

deleted text begin It may exercise all other powers not inconsistent with the Constitution of the state of Minnesota or the United States Constitution, which powers may be reasonably necessary or appropriate for or incidental to the effectuation of its authorized purposes or to the exercise of any of the powers enumerated in this section, and generally may exercise in connection with its property and affairs, and in connection with property within its control, any and all powers which might be exercised by a natural person or a private corporation in connection with similar property and affairs. deleted text end new text begin It may exercise the powers of a municipal power agency under chapter 453, for the limited purpose of engaging in tax-exempt prepayments and related transactions as described in section 148(b)(4) of the Internal Revenue Code of 1986, as amended, and the Code of Federal Regulations, title 26, part 1, section 1.148-1(e)(2)(iii), both as may be amended from time to time, or as may otherwise be authorized by statute or the Commissioner of Internal Revenue. new text end

Sec. 3.

Minnesota Statutes 2020, section 453A.04, is amended by adding a subdivision to read:

new text begin Subd. 22. new text end

new text begin All other powers. new text end

new text begin It may exercise all other powers not inconsistent with the Constitution of the state of Minnesota or the United States Constitution, which powers may be reasonably necessary or appropriate for or incidental to the effectuation of its authorized purposes or to the exercise of any of the powers enumerated in this section, and generally may exercise in connection with its property and affairs, and in connection with property within its control, any and all powers which might be exercised by a natural person or a private corporation in connection with similar property and affairs. new text end

Sec. 4.

Minnesota Statutes 2020, section 465.71, is amended to read:

465.71 INSTALLMENT, LEASE PURCHASE; CITY, COUNTY, TOWN, SCHOOL.

A home rule charter city, statutory city, county, town, or school district may purchase personal property under an installment contract, or lease real or personal property with an option to purchase under a lease-purchase agreement, by which contract or agreement title is retained by the seller or vendor or assigned to a third party as security for the purchase price, including interest, if any, but such purchases are subject to statutory and charter provisions applicable to the purchase of real or personal property. For purposes of the bid requirements contained in section 471.345, "the amount of the contract" shall include the total of all lease payments for the entire term of the lease under a lease-purchase agreement. The obligation created by new text begin an installment contract or new text end a lease-purchase agreement for personal propertynew text begin ,new text end or new text begin an installment contract or new text end a lease-purchase agreement for real property if the amount of the contract for purchase of the real property is less than $1,000,000new text begin ,new text end shall not be included in the calculation of net debt for purposes of section 475.53, and shall not constitute debt under any other statutory provision. No election shall be required in connection with the execution of new text begin an installment contract or new text end a lease-purchase agreement authorized by this section. The city, county, town, or school district must have the right to terminate a lease-purchase agreement at the end of any fiscal year during its term.

Sec. 5.

Minnesota Statutes 2020, section 475.56, is amended to read:

475.56 INTEREST RATE.

(a) Any municipality issuing obligations under any law may issue obligations bearing interest at a single rate or at rates varying from year to year which may be lower or higher in later years than in earlier years. deleted text begin Such higher rate for any period prior to maturity may be represented in part by separate coupons designated as additional coupons, extra coupons, or B coupons, but thedeleted text end new text begin Thenew text end highest aggregate rate of interest contracted to be so paid for any period shall not exceed the maximum rate authorized by lawdeleted text begin . Such higher rate may also be represented in part by the issuance of additional obligations of the same series, over and above but not exceeding two percent of the amount otherwise authorized to be issued, and the amount of such additional obligations shall not be included in the amount required by section 475.59 to be stated in any bond resolution, notice, or ballot, or in the sale price required by section 475.60 or any other law to be paid; but if the principal amount of the entire series exceeds its cash sale price, such excess shall not, when added to the total amount of interest payable on all obligations of the series to their stated maturity dates, causedeleted text end new text begin andnew text end the average annual rate of such interest deleted text begin todeleted text end new text begin may notnew text end exceed the maximum rate authorized by law. This section does not authorize a provision in any such obligations for the payment of a higher rate of interest after maturity than before.

(b) Any municipality issuing obligations under any law may sell original issue discount new text begin or premium new text end obligations deleted text begin having a stated principal amount in excess of the authorized amount and the sale price, provided that:deleted text end new text begin . To determine the average annual rate of interest on the obligations, any discount shall be added to, and any premium subtracted from, the total amount of interest on the obligations to their stated maturity dates.new text end

deleted text begin (1) the sale price does not exceed by more than two percent the amount of obligations otherwise authorized to be issued; deleted text end

deleted text begin (2) the underwriting fee, discount, or other sales or underwriting commission does not exceed two percent of the sale price; and deleted text end

deleted text begin (3) the discount rate necessary to present value total principal and interest payments over the term of the issue to the sale price does not exceed the lesser of the maximum rate permitted by law for municipal obligations or ten percent. deleted text end

(c) Any obligation may bear interest at a rate varying periodically at the time or times and on the terms, including convertibility to a fixed rate of interest, determined by the governing body of the municipality, but the rate of interest for any period shall not exceed any maximum rate of interest for the obligations established by law. For purposes of section 475.61, subdivisions 1 and 3, the interest payable on variable rate obligations for their term shall be determined as if their rate of interest is the lesser of the maximum rate of interest payable on the obligations in accordance with their terms or the rate estimated for such purpose by the governing body, but if the interest rate is subsequently converted to a fixed rate the levy may be modified to provide at least five percent in excess of amounts necessary to pay principal of and interest at the fixed rate on the obligations when due. For purposes of computing debt service or interest pursuant to section 475.67, subdivision 12, interest throughout the term of bonds issued pursuant to this subdivision is deemed to accrue at the rate of interest first borne by the bonds. The provisions of this paragraph do not apply to general obligations issued by a statutory or home rule charter city with a population of less than 7,500, as defined in section 477A.011, subdivision 3, or to general obligations that are not rated A or better, or an equivalent subsequently established rating, by Standard and Poor's Corporation, Moody's Investors Service or other similar nationally recognized rating agency, except that any statutory or home rule charter city, regardless of population or bond rating, may issue variable rate obligations as a participant in a bond pooling program established by the League of Minnesota Cities that meets this bond rating requirement.

Sec. 6.

Minnesota Statutes 2020, section 475.58, subdivision 3b, is amended to read:

Subd. 3b.

Street reconstruction and bituminous overlays.

(a) A municipality may, without regard to the election requirement under subdivision 1, issue and sell obligations for street reconstruction or bituminous overlays, if the following conditions are met:

(1) the streets are reconstructed or overlaid under a street reconstruction or overlay plan that describes the street reconstruction or overlay to be financed, the estimated costs, and any planned reconstruction or overlay of other streets in the municipality over the next five years, and the plan and issuance of the obligations has been approved by a vote of a two-thirds majority of the members of the governing body present at the meeting following a public hearing for which notice has been published in the official newspaper at least ten days but not more than 28 days prior to the hearing; and

(2) if a petition requesting a vote on the issuance is signed by voters equal to five percent of the votes cast in the last municipal general election and is filed with the municipal clerk within 30 days of the public hearing, the municipality may issue the bonds only after obtaining the approval of a majority of the voters voting on the question of the issuance of the obligations. If the municipality elects not to submit the question to the voters, the municipality shall not propose the issuance of bonds under this section for the same purpose and in the same amount for a period of 365 days from the date of receipt of the petition. If the question of issuing the bonds is submitted and not approved by the voters, the provisions of section 475.58, subdivision 1a, shall apply.

(b) Obligations issued under this subdivision are subject to the debt limit of the municipality and are not excluded from net debt under section 475.51, subdivision 4.

(c) For purposes of this subdivision, street reconstruction and bituminous overlays deleted text begin includesdeleted text end new text begin include but are not limited to:new text end utility replacement and relocation and other activities incidental to the street reconstructiondeleted text begin ,deleted text end new text begin ; the addition or reconstruction ofnew text end turn lanesnew text begin , bicycle lanes, sidewalks, paths,new text end and other improvements having a substantial public safety functiondeleted text begin ,deleted text end new text begin ;new text end realignmentsdeleted text begin ,deleted text end new text begin andnew text end other modifications to intersect with state and county roadsdeleted text begin ,deleted text end new text begin ;new text end and the local share of state and county road projects. For purposes of this subdivision, "street reconstruction" includes expenditures for street reconstruction that have been incurred by a municipality before approval of a street reconstruction plan, if such expenditures are included in a street reconstruction plan approved on or before the date of the public hearing under paragraph (a), clause (1), regarding issuance of bonds for such expenditures.

(d) Except in the case of turn lanes, new text begin bicycle lanes, sidewalks, paths, and other new text end safety improvementsdeleted text begin ,deleted text end new text begin ;new text end realignmentsdeleted text begin ,deleted text end new text begin ;new text end intersection modificationsdeleted text begin ,deleted text end new text begin ;new text end and the local share of state and county road projects, street reconstruction and bituminous overlays does not include the portion of project cost allocable to widening a street or adding curbs and gutters where none previously existed.

Sec. 7.

Minnesota Statutes 2020, section 475.60, subdivision 1, is amended to read:

Subdivision 1.

Advertisement.

All obligations shall be negotiated and sold by the governing body, except when authority therefor is delegated by the governing body or by the charter of the municipality to a board, department, or officers of the municipality. deleted text begin Except as provided in section 475.56, obligations shall be sold at not less than par value plus accrued interest to date of delivery and not greater than two percent greater than the amount authorized to be issued plus accrued interest.deleted text end Except as provided in subdivision 2 all obligations shall be sold at competitive sale after notice given as provided in subdivision 3.

Sec. 8.

Minnesota Statutes 2020, section 475.67, subdivision 8, is amended to read:

Subd. 8.

Escrow account securities.

Securities purchased for the escrow account shall be limited to:

(1) general obligations of the United States, securities whose principal and interest payments are guaranteed by the United States,new text begin including but not limited to Resolution Funding Corporation Interest Separate Trading of Registered Interest and Principal of Securities and United States Agency for International Development Bonds,new text end and securities issued by deleted text begin the following agencies of the United States: Banks for Cooperatives,deleted text end new text begin United States government-sponsored enterprises including but not limited tonew text end Federal Home Loan Banks, deleted text begin Federal Intermediate Credit Banks, Federal Land Banks, anddeleted text end new text begin the Federal Farm Credit System,new text end the Federal National Mortgage Associationnew text begin , or the Federal Home Loan Mortgage Corporationnew text end ; or

(2) obligations issued or guaranteed by any state or any political subdivision of a state, which at the date of purchase are rated in the highest or the next highest rating category by Standard and Poor's Corporation, Moody's Investors Service, or a similar nationally recognized rating agency, but not less than the rating on the refunded bonds immediately prior to the refunding.

"Rating category," as used in this subdivision, means a generic securities rating category, without regard in the case of a long-term rating category to any refinement or gradation of such long-term rating category by a numerical modifier or otherwise.

Sec. 9.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2020, section 469.055, subdivision 7, new text end new text begin is repealed. new text end

ARTICLE 11

MISCELLANEOUS

Section 1.

new text begin [3.084] LOBBYING ACTIVITIES PROHIBITED. new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin As used in this section, "lobbying" means engaging in activities that would require an individual to register as a lobbyist, as defined in section 10A.01, subdivision 21. new text end

new text begin Subd. 2. new text end

new text begin Prohibition. new text end

new text begin (a) A sitting member of the legislature is prohibited from accepting employment with or otherwise receiving compensation for services performed from: new text end

new text begin (1) a business whose primary source of revenue is derived from lobbying, government relations or government affairs services; new text end

new text begin (2) a business whose primary source of revenue is derived from facilitating government relations or government affairs services between two third parties; or new text end

new text begin (3) any other business that employs or contracts with lobbyists, government relations or government affairs professionals, if the member's job duties include acting in that capacity or providing direct or indirect consulting, advice, or administrative support for that work. new text end

new text begin (b) This prohibition applies regardless of the location where the work of the business is substantially conducted or its clients are located. new text end

new text begin (c) The house of representatives and the senate must adopt rules to enforce this section. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 3, 2023. new text end

Sec. 2.

Minnesota Statutes 2020, section 3.192, is amended to read:

3.192 REQUIREMENTS FOR NEW OR RENEWED TAX EXPENDITURES.

new text begin (a) new text end Any bill that creates, renews, or continues a tax expenditure must include a statement of intent that clearly provides the purpose of the tax expenditure and a standard or goal against which its effectiveness may be measured.

new text begin (b) new text end For purposes of this section, "tax expenditure" has the meaning given in section 270C.11, subdivision 6.

new text begin (c) Any bill that creates a new tax expenditure or continues an expiring tax expenditure must include an expiration date for the tax expenditure that is no more than eight years from the day the provision takes effect. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with the 2022 legislative session. new text end

Sec. 3.

Minnesota Statutes 2020, section 3.8853, subdivision 2, is amended to read:

Subd. 2.

Director; staff.

new text begin (a) new text end The Legislative Budget Office Oversight Commission must appoint a director and establish the director's duties. The director may hire staff necessary to do the work of the office. The director serves in the unclassified service for a term of six years and may not be removed during a term except for cause after a public hearing.

new text begin (b) The director and staff hired under this section must provide professional and technical assistance to the Tax Expenditure Review Commission under section 3.8855. new text end

Sec. 4.

new text begin [3.8855] TAX EXPENDITURE REVIEW COMMISSION. new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The Tax Expenditure Review Commission is created to review Minnesota's tax expenditures and evaluate their effectiveness and fiscal impact. new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, "significant tax expenditure," "tax," and "tax expenditure" have the meanings given in section 270C.11, subdivision 6. new text end

new text begin Subd. 3. new text end

new text begin Membership. new text end

new text begin (a) The commission consists of: new text end

new text begin (1) two senators appointed by the senate majority leader; new text end

new text begin (2) two senators appointed by the senate minority leader; new text end

new text begin (3) two representatives appointed by the speaker of the house; new text end

new text begin (4) two representatives appointed by the minority leader of the house of representatives; and new text end

new text begin (5) the commissioner of revenue or the commissioner's designee. new text end

new text begin (b) Each appointing authority must make appointments by January 31 of the regular legislative session in the odd-numbered year. new text end

new text begin (c) If the chair of the house or senate committee with primary jurisdiction over taxes is not an appointed member, the chair is an ex officio, nonvoting member of the commission. new text end

new text begin Subd. 4. new text end

new text begin Duties. new text end

new text begin (a) In the first three years after the commission is established, the commission must complete an initial review of the state's tax expenditures. The initial review must identify the purpose of each of the state's tax expenditures, if none was identified in the enacting legislation in accordance with section 3.192. The commission may also identify metrics for evaluating the effectiveness of an expenditure. new text end

new text begin (b) In each year following the initial review under paragraph (a), the commission must review and evaluate Minnesota's tax expenditures on a regular, rotating basis. The commission must establish a review schedule that ensures each tax expenditure will be reviewed by the commission at least once every ten years. The commission may review expenditures affecting similar constituencies or policy areas in the same year, but the commission must review a subset of the tax expenditures within each tax type each year. To the extent possible, the commission must review a similar number of tax expenditures within each tax type each year. The commission may decide not to review a tax expenditure that is adopted by reference to federal law. new text end

new text begin (c) Before December 1 of the year a tax expenditure is included in a commission report, the commission must hold a public hearing on the expenditure, including but not limited to a presentation of the review components in subdivision 5. new text end

new text begin Subd. 5. new text end

new text begin Components of review. new text end

new text begin (a) When reviewing a tax expenditure, the commission must at a minimum: new text end

new text begin (1) provide an estimate of the annual revenue lost as a result of the expenditure; new text end

new text begin (2) identify the purpose of the tax expenditure if none was identified in the enacting legislation in accordance with section 3.192; new text end

new text begin (3) estimate the measurable impacts and efficiency of the tax expenditure in accomplishing the purpose of the expenditure; new text end

new text begin (4) compare the effectiveness of the tax expenditure and a direct expenditure with the same purpose; new text end

new text begin (5) identify potential modifications to the tax expenditure to increase its efficiency or effectiveness; new text end

new text begin (6) estimate the amount by which the tax rate for the relevant tax could be reduced if the revenue lost due to the tax expenditure were applied to a rate reduction; new text end

new text begin (7) if the tax expenditure is a significant tax expenditure, estimate the incidence of the tax expenditure and the effect of the expenditure on the incidence of the state's tax system; new text end

new text begin (8) consider the cumulative fiscal impacts of other state and federal taxes providing benefits to taxpayers for similar activities; and new text end

new text begin (9) recommend whether the expenditure be continued, repealed, or modified. new text end

new text begin (b) The commission may omit a component in paragraph (a) if the commission determines it is not feasible due to the lack of available data, third-party research, staff resources, or lack of a majority support for a recommendation. new text end

new text begin Subd. 6. new text end

new text begin Department of Revenue; research support. new text end

new text begin (a) The research division of the Department of Revenue must provide the commission with the summary data required to complete the review components in subdivision 5, paragraph (a), clauses (1), (6), (7), and (8). new text end

new text begin (b) At the request of the commission, the research division of the Department of Revenue must provide the commission with summary data on a tax expenditure in support of a review. new text end

new text begin (c) Data shared under this section must comply with the rules governing statistical studies under section 270B.04, subdivision 2. new text end

new text begin Subd. 7. new text end

new text begin Report to legislature. new text end

new text begin (a) By December 15 of each year, the commission must submit a written report to the legislative committees with jurisdiction over tax policy. The report must detail the results of the commission's review of tax expenditures in the previous calendar year, including the review components detailed in subdivision 5. new text end

new text begin (b) Notwithstanding paragraph (a), during the period of initial review under subdivision 4, the report may be limited to the purpose statements and metrics for evaluating the effectiveness of expenditures, as identified by the commission. The report may also include relevant publicly available data on an expenditure. new text end

new text begin (c) The report may include any additional information the commission deems relevant to the review of an expenditure. new text end

new text begin (d) The legislative committees with jurisdiction over tax policy must hold a public hearing on the report during the regular legislative session in the year following the year in which the report was submitted. new text end

new text begin Subd. 8. new text end

new text begin Terms; vacancies. new text end

new text begin (a) Members of the commission serve a term beginning upon appointment and ending at the beginning of the regular legislative session in the next odd-numbered year. The appropriate appointing authority must fill a vacancy for a seat of a current legislator for the remainder of the unexpired term. Members may be removed or replaced at the pleasure of the appointing authority. new text end

new text begin (b) If a commission member ceases to be a member of the legislative body from which the member was appointed, the member vacates membership on the commission. new text end

new text begin Subd. 9. new text end

new text begin Officers. new text end

new text begin The commission shall elect a chair and vice-chair as presiding officers. The chair and vice-chair must alternate every two years between members of the house of representatives and senate. The chair and vice-chair may not be from the same legislative chamber. new text end

new text begin Subd. 10. new text end

new text begin Staff. new text end

new text begin Legislative Budget Office staff hired under section 3.8853, subdivision 2, must provide professional and technical assistance to the commission as the commission deems necessary, including assistance with the report under subdivision 7. new text end

new text begin Subd. 11. new text end

new text begin Expenses. new text end

new text begin The members of the commission and its staff shall be reimbursed for all expenses actually and necessarily incurred in the performance of their duties. Reimbursement for expenses incurred shall be made in accordance with policies adopted by the Legislative Coordinating Commission. new text end

new text begin EFFECTIVE DATE; SPECIAL PROVISIONS. new text end

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

new text begin (b) Appointing authorities for the commission must make initial appointments by January 15, 2022. The speaker of the house must designate one member of the commission to convene the first meeting of the commission by July 1, 2022. The first report of the commission under Minnesota Statutes, section 3.8855, subdivision 7, is due on December 15, 2022. new text end

Sec. 5.

new text begin [10.65] GOVERNMENT-TO-GOVERNMENT RELATIONSHIP WITH TRIBAL GOVERNMENTS. new text end

new text begin Subdivision 1. new text end

new text begin Recognition of Tribal status and relationship with the state of Minnesota. new text end

new text begin (a) The state of Minnesota is home to 11 federally recognized Indian Tribes with elected Tribal government officials. The state of Minnesota acknowledges and supports the unique status of the Minnesota Tribes and their absolute right to existence, self-governance, and self-determination. new text end

new text begin (b) The United States and the state of Minnesota have a unique relationship with federally recognized Indian Tribes, formed by the Constitution of the United States, treaties, statutes, case law, and agreements. new text end

new text begin (c) The state of Minnesota and the Minnesota Tribal governments significantly benefit from working together, learning from one another, and partnering where possible. new text end

new text begin (d) Timely and meaningful consultation between the state of Minnesota and Minnesota Tribal governments will facilitate better understanding and informed decision-making by allowing for communication on matters of mutual interest and help to establish mutually respectful and beneficial relationships between the state and Minnesota Tribal governments. new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) As used in this section, the following terms have the meanings given: new text end

new text begin (1) "agency" means the Department of Administration, Department of Agriculture, Department of Commerce, Department of Corrections, Department of Education, Department of Employment and Economic Development, Department of Health, Office of Higher Education, Housing Finance Agency, Department of Human Rights, Department of Human Services, Office of MN.IT Services, Department of Iron Range Resources and Rehabilitation, Department of Labor and Industry, Minnesota Management and Budget, Bureau of Mediation Services, Department of Military Affairs, Metropolitan Council, Department of Natural Resources, Pollution Control Agency, Department of Public Safety, Department of Revenue, Department of Transportation, Department of Veterans Affairs, Gambling Control Board, Racing Commission, the Minnesota Lottery, the Animal Health Board, and the Board of Water and Soil Resources; new text end

new text begin (2) "consultation" means the direct and interactive involvement of the Minnesota Tribal governments in the development of policy on matters that have Tribal implications. Consultation is the proactive, affirmative process of identifying and seeking input from appropriate Tribal governments and considering their interest as a necessary and integral part of the decision-making process. This definition adds to statutorily mandated notification procedures. During a consultation, the burden is on the agency to show that it has made a good faith effort to elicit feedback. Consultation is a formal engagement between agency officials and the governing body or bodies of an individual Minnesota Tribal government that the agency or an individual Tribal government may initiate. Formal meetings or communication between top agency officials and the governing body of a Minnesota Tribal government is a necessary element of consultation; new text end

new text begin (3) "matters that have Tribal implications" means rules, legislative proposals, policy statements, or other actions that have substantial direct effects on one or more Minnesota Tribal governments, or on the distribution of power and responsibilities between the state and Minnesota Tribal governments; new text end

new text begin (4) "Minnesota Tribal governments" means the federally recognized Indian Tribes located in Minnesota including: Bois Forte Band; Fond Du Lac Band; Grand Portage Band; Leech Lake Band; Mille Lacs Band; White Earth Band; Red Lake Nation; Lower Sioux Indian Community; Prairie Island Indian Community; Shakopee Mdewakanton Sioux Community; and Upper Sioux Community; and new text end

new text begin (5) "timely and meaningful" means done or occurring at a favorable or useful time that allows the result of consultation to be included in the agency's decision-making process for a matter that has Tribal implications. new text end

new text begin Subd. 3. new text end

new text begin Consultation duties. new text end

new text begin (a) An agency must recognize the unique legal relationship between the state of Minnesota and the Minnesota Tribal governments, respect the fundamental principles that establish and maintain this relationship, and accord Tribal governments the same respect accorded to other governments. new text end

new text begin (b) An agency must, in consultation with Minnesota Tribal governments, implement Tribal consultation policies to comply with this section and guide the agency's work with Minnesota Tribal governments, and must submit these policies to the governor and lieutenant governor. Tribal consultation policies should address the communication protocols for each Minnesota Tribal government, which should be developed in coordination with representatives of each Minnesota Tribal government. An agency must update the Tribal consultation policies as often as required in order to facilitate timely and meaningful consultation, but no less than biannually. new text end

new text begin (c) Consultation under this section is a duty of an agency to consult with the governing body or bodies of each individual Minnesota Tribal government. Coordination with groups or entities that have representation on some or all of the governing bodies of the Minnesota Tribal governments, such as the Minnesota Indian Affairs Council or the Minnesota Chippewa Tribe, is encouraged but does not satisfy an agency's duty to consult with individual Minnesota Tribal governments on matters that have Tribal implications. If a matter has implications for one Minnesota Tribal government, but not others, the agency's duty is to only consult those Minnesota Tribal governments affected. new text end

new text begin (d) An agency must consult with each Minnesota Tribal government at least annually, and as often as is required to address matters that have Tribal implications. new text end

new text begin (e) An agency must consult with Minnesota Tribal governments on legislative and fiscal matters that affect one or all Minnesota Tribal governments or their members to identify priority issues in order to allow agencies to proactively engage Minnesota Tribal governments in the agency's development of legislative and fiscal proposals in time for submission into the governor's recommended budget and legislative proposals each year. new text end

new text begin (f) An agency must develop and maintain ongoing consultation with the Minnesota Tribal governments related to matters that have Tribal implications. Agencies must consider the input gathered from Tribal consultation into their decision-making processes, with the goal of achieving mutually beneficial solutions. new text end

new text begin (g) An agency and a Minnesota Tribal government may agree that a formal consultation is not necessary for a given year on a given matter that has Tribal implications, and the agency must keep a written record of this decision. new text end

new text begin (h) The prospective duty to consult does not apply to action on a matter that has Tribal implications if immediate action is required to address a present and immediate threat to the health, safety, or welfare of Minnesota citizens. For these actions, every effort should be made to communicate, and formal consultation should occur as soon as possible. The duty to consult also does not apply to criminal proceedings or other investigations or legal proceedings that prohibit an agency from disclosure. new text end

new text begin (i) An agency must designate a Tribal liaison to assume responsibility for implementation of the Tribal consultation policy and to serve as the principal point of contact for Minnesota Tribal governments. The Tribal liaison must be able to directly and regularly meet and communicate with the agency's commissioner and deputy and assistant commissioners in order to appropriately conduct government-to-government consultation and cooperation. new text end

new text begin (j) The state has instituted Tribal-state government relations training, which is the foundation and basis of all other Tribal government relations training sources. All agencies must direct certain staff to complete available training to foster a collaborative relationship between the state of Minnesota and Minnesota Tribal governments, and to facilitate timely and meaningful consultation. In addition to all commissioners, deputy commissioners, and assistant commissioners, at a minimum all agency employees whose work is likely to include matters that have Tribal implications must attend Tribal-state relations training. Tribal liaisons must actively support and participate in the Tribal-state relations training. new text end

new text begin (k) Any agency or board that is not listed in the definition of agency in subdivision 2 is encouraged to and may engage in consultation and communication with the Minnesota Tribal governments for all matters that have Tribal implications. new text end

new text begin Subd. 4. new text end

new text begin Applicability. new text end

new text begin Nothing in this section requires the state or an agency to violate or ignore any laws, rules, directives, or other legal requirements or obligations imposed by state or federal law or set forth in agreements or compact between one or more Minnesota Tribal governments or any other Tribal government and the state or its agencies. This section is not intended to, and does not, create any right to administrative or judicial review, or any other right, benefit, or responsibility, substantive or procedural, enforceable against the state of Minnesota, its agencies or instrumentalities, its officers or employees, or its subdivisions or any other persons. Nothing in this section prohibits or limits any agency from asserting any rights or pursuing any administrative or judicial action under state or federal law to effectuate the interests of the state of Minnesota or any of its agencies. Nothing in this section is intended to alter or reduce the state's duties to individual Minnesota citizens including those of Native American descent. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2020, section 10A.01, subdivision 21, is amended to read:

Subd. 21.

Lobbyist.

(a) "Lobbyist" means an individual:

(1) engaged for pay or other consideration of more than $3,000 from all sources in any yearnew text begin :new text end

new text begin (i)new text end for the purpose of attempting to influence legislative or administrative action, or the official action of a metropolitan governmental unit, by communicating or urging others to communicate with public or local officials; or

new text begin (ii) from a business whose primary source of revenue is derived from facilitating government relations or government affairs services between two third parties; or new text end

(2) who spends more than $250, not including the individual's own traveling expenses and membership dues, in any year for the purpose of attempting to influence legislative or administrative action, or the official action of a metropolitan governmental unit, by communicating or urging others to communicate with public or local officials.

(b) "Lobbyist" does not include:

(1) a public official;

(2) an employee of the state, including an employee of any of the public higher education systems;

(3) an elected local official;

(4) a nonelected local official or an employee of a political subdivision acting in an official capacity, unless the nonelected official or employee of a political subdivision spends more than 50 hours in any month attempting to influence legislative or administrative action, or the official action of a metropolitan governmental unit other than the political subdivision employing the official or employee, by communicating or urging others to communicate with public or local officials, including time spent monitoring legislative or administrative action, or the official action of a metropolitan governmental unit, and related research, analysis, and compilation and dissemination of information relating to legislative or administrative policy in this state, or to the policies of metropolitan governmental units;

(5) a party or the party's representative appearing in a proceeding before a state board, commission, or agency of the executive branch unless the board, commission, or agency is taking administrative action;

(6) an individual while engaged in selling goods or services to be paid for by public funds;

(7) a news medium or its employees or agents while engaged in the publishing or broadcasting of news items, editorial comments, or paid advertisements which directly or indirectly urge official action;

(8) a paid expert witness whose testimony is requested by the body before which the witness is appearing, but only to the extent of preparing or delivering testimony; or

(9) a party or the party's representative appearing to present a claim to the legislature and communicating to legislators only by the filing of a claim form and supporting documents and by appearing at public hearings on the claim.

(c) An individual who volunteers personal time to work without pay or other consideration on a lobbying campaign, and who does not spend more than the limit in paragraph (a), clause (2), need not register as a lobbyist.

(d) An individual who provides administrative support to a lobbyist and whose salary and administrative expenses attributable to lobbying activities are reported as lobbying expenses by the lobbyist, but who does not communicate or urge others to communicate with public or local officials, need not register as a lobbyist.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 3, 2023. new text end

Sec. 7.

Minnesota Statutes 2020, section 16A.152, subdivision 2, as amended by Laws 2021, chapter 31, article 1, section 9, is amended to read:

Subd. 2.

Additional revenues; priority.

(a) If on the basis of a forecast of general fund revenues and expenditures, the commissioner of management and budget determines that there will be a positive unrestricted budgetary general fund balance at the close of the biennium, the commissioner of management and budget must allocate money to the following accounts and purposes in priority order:

(1) the cash flow account established in subdivision 1 until that account reaches $350,000,000;

(2) the budget reserve account established in subdivision 1a until that account reaches deleted text begin $1,596,522,000deleted text end new text begin $2,377,399,000new text end ;

(3) the amount necessary to increase the aid payment schedule for school district aids and credits payments in section 127A.45 to not more than 90 percent rounded to the nearest tenth of a percent without exceeding the amount available and with any remaining funds deposited in the budget reserve;

(4) the amount necessary to restore all or a portion of the net aid reductions under section 127A.441 and to reduce the property tax revenue recognition shift under section 123B.75, subdivision 5, by the same amount; and

(5) the amount necessary to increase the Minnesota 21st century fund by not more than the difference between $5,000,000 and the sum of the amounts credited and canceled to it in the previous 12 months under Laws 2020, chapter 71, article 1, section 11, until the sum of all transfers under this section and all amounts credited or canceled under Laws 2020, chapter 71, article 1, section 11, equals $20,000,000.

(b) The amounts necessary to meet the requirements of this section are appropriated from the general fund within two weeks after the forecast is released or, in the case of transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations schedules otherwise established in statute.

(c) The commissioner of management and budget shall certify the total dollar amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The commissioner of education shall increase the aid payment percentage and reduce the property tax shift percentage by these amounts and apply those reductions to the current fiscal year and thereafter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021. new text end

Sec. 8.

Minnesota Statutes 2020, section 41A.19, is amended to read:

41A.19 REPORT; INCENTIVE PROGRAMS.

By January 15 each year, the commissioner shall report on the incentive programs under sections 41A.16, 41A.17, deleted text begin anddeleted text end 41A.18new text begin , 41A.20, and 41A.21new text end to the legislative committees with jurisdiction over environment and agriculture policy and finance. The report shall include information on production and incentive expenditures under the programs.

Sec. 9.

new text begin [41A.21] ORIENTED STRAND BOARD PRODUCTION INCENTIVE. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in this subdivision have the meanings given them. new text end

new text begin (b) "Commissioner" means the commissioner of agriculture. new text end

new text begin (c) "Forest resources" means raw wood logs and material primarily made up of cellulose, hemicellulose, or lignin, or a combination of those ingredients. new text end

new text begin (d) "Oriented strand board" or "OSB" means a material manufactured into panels using forest resources. new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin (a) A facility eligible for payment under this section must source at least 80 percent of its forest resources raw materials from Minnesota. The facility must be located in Minnesota; must begin construction activities by December 31, 2022, for a specific location; must begin production at a specific location by June 30, 2025; and must not begin operating before January 1, 2022. Eligible facilities must be new OSB construction sites with total capital investment in excess of $250,000,000. Eligible OSB production facilities must produce at least 200,000,000 OSB square feet on a 3/8 inch nominal basis of OSB each year. At least one product produced at the facility should be a wood-based wall or roof structural sheathing panel that has an integrated, cellulose-based paper overlay that serves as a water resistive barrier. new text end

new text begin (b) No payments shall be made for OSB production that occurs after June 30, 2036, for those eligible producers under paragraph (a). new text end

new text begin (c) An eligible producer of OSB shall not transfer the producer's eligibility for payments under this section to a facility at a different location. new text end

new text begin (d) A producer that ceases production for any reason is ineligible to receive payments under this section until the producer resumes production. new text end

new text begin Subd. 3. new text end

new text begin Payment amounts; limits. new text end

new text begin (a) The commissioner shall make payments to eligible producers of OSB. The amount of the payment for each eligible producer's annual production is $7.50 per 1,000 OSB square feet on a 3/8 inch nominal basis of OSB produced at a specific location for ten years starting after the first calendar year in which production begins. new text end

new text begin (b) Total payments under this section to an eligible OSB producer in a fiscal year may not exceed the amount necessary for 400,000,000 OSB square feet on a 3/8 inch nominal basis of OSB produced. Total payments under this section to all eligible OSB producers in a fiscal year may not exceed the amount necessary for 400,000,000 OSB square feet on a 3/8 inch nominal basis of OSB produced. If the total amount for which all producers are eligible in a quarter exceeds the amount available for payments, the commissioner shall make the payments on a pro rata basis. new text end

new text begin (c) For purposes of this section, an entity that holds a controlling interest in more than one OSB facility is considered a single eligible producer. new text end

new text begin Subd. 4. new text end

new text begin Forest resources requirements. new text end

new text begin Forest resources that are purchased to be used at the facility must be in compliance with one or more of the following: the Sustainable Forestry Initiative Fiber Sourcing Standard, the Forest Stewardship Council Chain of Custody Standard, or the Forest Stewardship Controlled Wood Standard. For forest resources that come from land parcels greater than 160 acres, all efforts must be made to procure from land that is certified by one or more of the following: the Forest Stewardship Council Forest Management Standard, the Sustainable Forestry Initiative Forest Management Standard, or the American Tree Farm System. new text end

new text begin Subd. 5. new text end

new text begin Claims. new text end

new text begin (a) By the last day of October, January, April, and July, each eligible OSB producer shall file a claim for payment for OSB production during the preceding three calendar months. An eligible OSB producer that files a claim under this subdivision shall include a statement of the eligible producer's total board feet of OSB produced during the quarter covered by the claim. For each claim and statement of total board feet of OSB filed under this subdivision, the board feet of OSB produced must be examined by a certified public accounting firm with a valid permit to practice under chapter 326A, in accordance with Statements on Standards for Attestation Engagements established by the American Institute of Certified Public Accountants. new text end

new text begin (b) The commissioner must issue payments by November 15, February 15, May 15, and August 15. A separate payment must be made for each claim filed. new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin (a) In fiscal year 2025, a sum sufficient to make the payments required by this section, not to exceed $1,500,000, is appropriated from the general fund to the commissioner. This is a onetime appropriation. new text end

new text begin (b) From fiscal year 2026 through fiscal year 2034, a sum sufficient to make the payments required by this section, not to exceed $3,000,000 in a fiscal year, is annually appropriated from the general fund to the commissioner. new text end

Sec. 10.

new text begin [116J.9924] TARGETED COMMUNITY CAPITAL PROJECT GRANT PROGRAM. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (b) "Capital project" or "project" means the acquisition or betterment of buildings or other fixed assets and other improvements of a capital nature. new text end

new text begin (c) "Commissioner" means the commissioner of employment and economic development. new text end

new text begin (d) "Economically disadvantaged persons or groups" means one or more persons or groups that: new text end

new text begin (1) qualify as a low-income person as defined under section 116M.14, subdivision 4a; or new text end

new text begin (2) live in a low-income area as defined under section 116M.14, subdivision 4. new text end

new text begin (e) "Government entity" means a city, township, county, or any political subdivision, or an American Indian Tribal government entity located within a federally recognized American Indian reservation. new text end

new text begin (f) "Nonprofit organization" means a not-for-profit corporation under section 501(c)(3) of the Internal Revenue Code or a Tribal nonprofit under section 7871 of the Internal Revenue Code that serves underserved communities or economically disadvantaged persons or groups. new text end

new text begin (g) "Underserved community" means one or more persons or groups that qualify as: new text end

new text begin (1) a minority person as defined under section 116M.14, subdivision 6; or new text end

new text begin (2) persons with disabilities as defined under section 116M.14, subdivision 9. new text end

new text begin Subd. 2. new text end

new text begin Grant program established. new text end

new text begin (a) The commissioner shall make competitive grants for capital projects to nonprofit organizations and government entities that provide, increase, or expand services to underserved communities or economically disadvantaged persons or groups. new text end

new text begin (b) The commissioner shall give priority to applicants under subdivision 3 that: new text end

new text begin (1) do not have a history of receiving capital grants from the state; new text end

new text begin (2) demonstrate local support for the project; new text end

new text begin (3) address needs for an underserved community, an economically disadvantaged area, or people or groups who are economically disadvantaged; new text end

new text begin (4) provide community benefits; or new text end

new text begin (5) have previously received phased grant funds as described under subdivision 4. new text end

new text begin (c) In selecting projects for grants, the commissioner must equitably divide the total appropriation between the metropolitan areas and greater Minnesota. new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin A prospective grantee under this section must submit a written application to the commissioner in the form, at the time, and in the manner prescribed by the commissioner. The written application must include: new text end

new text begin (1) a description of the capital project to be funded by the grant; new text end

new text begin (2) the rationale for the project, including a description of the services provided and populations served by the applicant; new text end

new text begin (3) the total cost of the project and the cost of individual phases of the project, including but not limited to predesign, design, construction, engineering, furnishing, and equipping; new text end

new text begin (4) the requested grant amount; new text end

new text begin (5) the property owner of the facility to be improved; new text end

new text begin (6) the sources and amounts of state and nonstate funds previously received and committed to the project; new text end

new text begin (7) the public purpose achieved by the project; new text end

new text begin (8) an estimated timeline of the project; and new text end

new text begin (9) any additional information requested by the commissioner. new text end

new text begin Subd. 4. new text end

new text begin Grant amount; project phasing. new text end

new text begin (a) The commissioner shall award grants in an amount not to exceed $1,500,000 per grant. new text end

new text begin (b) A grant awarded under this section must be no less than the amount required to complete one or more phases of the project, less any nonstate funds already committed for such activities. new text end

new text begin Subd. 5. new text end

new text begin Match. new text end

new text begin (a) The commissioner may not award a grant for which the applicant does not provide nonstate funds for the project unless the applicant: new text end

new text begin (1) is located in an area with a very low net tax capacity; new text end

new text begin (2) the applicant is experiencing hardship; or new text end

new text begin (3) the applicant serves underserved communities or economically disadvantaged persons or groups. new text end

new text begin (b) For the purposes of this section, "area with a very low net tax capacity" means a city with a net tax capacity per capita that is less than the median net tax capacity per capita among all cities statewide. new text end

new text begin Subd. 6. new text end

new text begin Applicability of other laws. new text end

new text begin The provisions of chapter 16A that apply to general fund appropriations for capital projects also apply to grants under this section. Money granted under this section is available until the project is completed or abandoned subject to section 16A.642. new text end

new text begin Subd. 7. new text end

new text begin Appropriation; administration and monitoring. new text end

new text begin Up to five percent of any appropriation for the program under this section is for administration and monitoring of the program. The commissioner must also use the funds under this subdivision to provide technical assistance, education, and support for program applicants, as needed, and may contract with a third-party to provide such services. new text end

new text begin Subd. 8. new text end

new text begin Report to the legislature. new text end

new text begin On or before January 31, 2022, and every January 31 thereafter, the commissioner must submit a report as required under section 3.195 that details the grants awarded under this section, including the total grants distributed, the recipients of the grants, the services supported by the grants, and any other information the commissioner deems pertinent. A copy of this report must also be sent to the chairs and ranking minority members of the committees of the house of representatives and the senate having jurisdiction over capital investment and economic development. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021. new text end

Sec. 11.

Minnesota Statutes 2020, section 256B.76, subdivision 2, as amended by 2021 First Special Session H.F. No. 33, article 1, section 22, if enacted, is amended to read:

Subd. 2.

Dental reimbursement.

(a) Effective for services rendered on or after October 1, 1992, the commissioner shall make payments for dental services as follows:

(1) dental services shall be paid at the lower of (i) submitted charges, or (ii) 25 percent above the rate in effect on June 30, 1992; and

(2) dental rates shall be converted from the 50th percentile of 1982 to the 50th percentile of 1989, less the percent in aggregate necessary to equal the above increases.

(b) Beginning October 1, 1999, the payment for tooth sealants and fluoride treatments shall be the lower of (1) submitted charge, or (2) 80 percent of median 1997 charges.

(c) Effective for services rendered on or after January 1, 2000, payment rates for dental services shall be increased by three percent over the rates in effect on December 31, 1999.

(d) Effective for services provided on or after January 1, 2002, payment for diagnostic examinations and dental x-rays provided to children under age 21 shall be the lower of (1) the submitted charge, or (2) 85 percent of median 1999 charges.

(e) The increases listed in paragraphs (b) and (c) shall be implemented January 1, 2000, for managed care.

(f) Effective for dental services rendered on or after October 1, 2010, by a state-operated dental clinic, payment shall be paid on a reasonable cost basis that is based on the Medicare principles of reimbursement. This payment shall be effective for services rendered on or after January 1, 2011, to recipients enrolled in managed care plans or county-based purchasing plans.

(g) Beginning in fiscal year 2011, if the payments to state-operated dental clinics in paragraph (f), including state and federal shares, are less than $1,850,000 per fiscal year, a supplemental state payment equal to the difference between the total payments in paragraph (f) and $1,850,000 shall be paid from the general fund to state-operated services for the operation of the dental clinics.

(h) Effective for services rendered on or after January 1, 2014, through December 31, 2021, payment rates for dental services shall be increased by five percent from the rates in effect on December 31, 2013. This increase does not apply to state-operated dental clinics in paragraph (f), federally qualified health centers, rural health centers, and Indian health services. Effective January 1, 2014, payments made to managed care plans and county-based purchasing plans under sections 256B.69, 256B.692, and 256L.12 shall reflect the payment increase described in this paragraph.

(i) Effective for services provided on or after January 1, 2017, through December 31, 2021, the commissioner shall increase payment rates by 9.65 percent for dental services provided outside of the seven-county metropolitan area. This increase does not apply to state-operated dental clinics in paragraph (f), federally qualified health centers, rural health centers, or Indian health services. Effective January 1, 2017, payments to managed care plans and county-based purchasing plans under sections 256B.69 and 256B.692 shall reflect the payment increase described in this paragraph.

(j) Effective for services provided on or after July 1, 2017, through December 31, deleted text begin 2022deleted text end new text begin 2021new text end , the commissioner shall increase payment rates by 23.8 percent for dental services provided to enrollees under the age of 21. This rate increase does not apply to state-operated dental clinics in paragraph (f), federally qualified health centers, rural health centers, or Indian health centers. This rate increase does not apply to managed care plans and county-based purchasing plans.

(k) Effective for services provided on or after January 1, 2022, the commissioner shall exclude from medical assistance and MinnesotaCare payments for dental services to public health and community health clinics the 20 percent increase authorized under Laws 1989, chapter 327, section 5, subdivision 2, paragraph (b).

(l) Effective for services provided on or after January 1, 2022, the commissioner shall increase payment rates by 98 percent for all dental services. This rate increase does not apply to state-operated dental clinics, federally qualified health centers, rural health centers, or Indian health services.

(m) Managed care plans and county-based purchasing plans shall reimburse providers at a level that is at least equal to the rate paid under fee-for-service for dental services. If, for any coverage year, federal approval is not received for this paragraph, the commissioner must adjust the capitation rates paid to managed care plans and county-based purchasing plans for that contract year to reflect the removal of this provision. Contracts between managed care plans and county-based purchasing plans and providers to whom this paragraph applies must allow recovery of payments from those providers if capitation rates are adjusted in accordance with this paragraph. Payment recoveries must not exceed an amount equal to any increase in rates that results from this provision. If, for any coverage year, federal approval is not received for this paragraph, the commissioner shall not implement this paragraph for subsequent coverage years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective at the same time the provision being amended is effective. new text end

Sec. 12.

Minnesota Statutes 2020, section 270A.04, is amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Private nonprofit hospital. new text end

new text begin A private nonprofit hospital that leases its building from the county or city in which it is located must annually provide the commissioner with a copy of the lease agreement. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2020, section 270B.13, is amended by adding a subdivision to read:

new text begin Subd. 3. new text end

new text begin Background check; access to federal tax information. new text end

new text begin An individual performing services for an independent contractor or a vendor under subdivision 1 who has or will have access to federal tax information is subject to the requirements of section 299C.76. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2020, section 270C.11, subdivision 2, is amended to read:

Subd. 2.

Preparation; submission.

The commissioner shall prepare a tax expenditure budget for the state. The tax expenditure budget report shall be submitted to the legislature by deleted text begin Februarydeleted text end new text begin Novembernew text end 1 of each even-numbered year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax expenditure budgets due on or after November 1, 2023. new text end

Sec. 15.

Minnesota Statutes 2020, section 270C.11, subdivision 4, is amended to read:

Subd. 4.

Contents.

new text begin (a) new text end The report shall detail for each tax expenditure itemnew text begin :new text end

new text begin (1)new text end the amount of tax revenue forgonedeleted text begin ,deleted text end new text begin ;new text end

new text begin (2)new text end a citation of the statutory or other legal authority for the expendituredeleted text begin , anddeleted text end new text begin ;new text end

new text begin (3)new text end the year in which it was enacted or the tax year in which it became effectivedeleted text begin .deleted text end new text begin ;new text end

new text begin (4) the purpose of the expenditure, as identified in the enacting legislation in accordance with section 3.192 or by the Tax Expenditure Review Commission; new text end

new text begin (5) the incidence of the expenditure, if it is a significant sales or income tax expenditure; and new text end

new text begin (6) the revenue-neutral amount by which the relevant tax rate could be reduced if the expenditure were repealed. new text end

new text begin (b)new text end The report may contain additional information which the commissioner considers relevant to the legislature's consideration and review of individual tax expenditure items. This may includedeleted text begin ,deleted text end but is not limited todeleted text begin , statements of the intended purpose of the tax expenditure,deleted text end analysis of whether the expenditure is achieving that objectivedeleted text begin ,deleted text end and the effect of the expenditure deleted text begin devicedeleted text end on the deleted text begin distribution of the tax burden anddeleted text end administration of the tax system.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax expenditure budgets due on or after November 1, 2023. new text end

Sec. 16.

Minnesota Statutes 2020, section 270C.11, subdivision 6, is amended to read:

Subd. 6.

Definitions.

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

(1) new text begin "business tax credit" means:new text end

new text begin (i) a credit against the corporate franchise tax claimed by a C corporation; or new text end

new text begin (ii) a credit against the individual or fiduciary income tax claimed by a pass-through entity that is allocated to its partners, members, or shareholders; new text end

new text begin (2) "pass-through entity" means a partnership, limited liability corporation, or S corporation; new text end

new text begin (3) "significant tax expenditure" means a tax expenditure, but excluding any tax expenditure that: new text end

new text begin (i) is incorporated into state law by reference to a federal definition of income; new text end

new text begin (ii) results in a revenue reduction of less than $10,000,000 per biennium; or new text end

new text begin (iii) is a business tax credit; new text end

new text begin (4) new text end "tax expenditure" means a tax provision which provides a gross income definition, deduction, exemption, credit, or rate for certain persons, types of income, transactions, or property that results in reduced tax revenuenew text begin , but excludes provisions used to mitigate tax pyramidingnew text end ; deleted text begin anddeleted text end

deleted text begin (2)deleted text end new text begin (5)new text end "tax" means any tax of statewide application or any tax authorized by state law to be levied by local governments generally. It does not include a special local tax levied pursuant to special law or to a special local tax levied pursuant to general authority that is no longer applicable to local governments generallydeleted text begin .deleted text end new text begin ; andnew text end

new text begin (6) "tax pyramiding" means imposing sales taxes under chapter 297A on intermediate business-to-business transactions rather than sales to final consumers. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax expenditure budgets due on or after November 1, 2023. new text end

Sec. 17.

Minnesota Statutes 2020, section 270C.13, subdivision 1, is amended to read:

Subdivision 1.

Biennial report.

new text begin (a) new text end The commissioner shall report to the legislature deleted text begin by March 1 of each odd-numbered yeardeleted text end on the overall incidence of the income tax, sales and excise taxes, and property tax.

new text begin (b) The commissioner must submit the report: new text end

new text begin (1) by March 1, 2021; and new text end

new text begin (2) by March 1, 2024, and each even-numbered year thereafter. new text end

new text begin (c) new text end The report shall present information on the distribution of the tax burden as follows: (1) for the overall income distribution, using a systemwide incidence measure such as the Suits index or other appropriate measures of equality and inequality; (2) by income classes, including at a minimum deciles of the income distribution; and (3) by other appropriate taxpayer characteristics.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax incidence reports due on or after March 1, 2021. new text end

Sec. 18.

Minnesota Statutes 2020, section 297H.04, subdivision 2, is amended to read:

Subd. 2.

Rate.

(a) Commercial generators that generate nonmixed municipal solid waste shall pay a solid waste management tax of 60 cents per noncompacted cubic yard of periodic waste collection capacity purchased by the generator, based on the size of the container for the nonmixed municipal solid waste, the actual volume, or the weight-to-volume conversion schedule in paragraph (c). However, the tax must be calculated by the waste management service provider using the same method for calculating the waste management service fee so that both are calculated according to container capacity, actual volume, or weight.

(b) Notwithstanding section 297H.02, a residential generator that generates nonmixed municipal solid waste shall pay a solid waste management tax in the same manner as provided in paragraph (a).

(c) The deleted text begin weight-to-volume conversion scheduledeleted text end new text begin taxnew text end for:

(1) construction debris as defined in section 115A.03, subdivision 7, is equal to 60 cents per cubic yard. The commissioner of revenue, after consultation with the commissioner of the Pollution Control Agency, shall determine and deleted text begin maydeleted text end publish by notice a new text begin weight-to-volume new text end conversion schedule for construction debris;

(2) industrial waste as defined in section 115A.03, subdivision 13a, is equal to 60 cents per cubic yard. The commissioner of revenue after consultation with the commissioner of the Pollution Control Agency, shall determinedeleted text begin ,deleted text end and deleted text begin maydeleted text end publish by noticedeleted text begin ,deleted text end a new text begin weight-to-volume new text end conversion schedule for various industrial wastes; and

(3) infectious waste as defined in section 116.76, subdivision 12, and pathological waste as defined in section 116.76, subdivision 14, is 150 pounds equals one cubic yard, or 60 cents per 150 pounds.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021. new text end

Sec. 19.

Minnesota Statutes 2020, section 297H.05, is amended to read:

297H.05 SELF-HAULERS.

(a) A self-hauler of mixed municipal solid waste shall pay the tax to the operator of the waste management facility to which the waste is delivered at the rate imposed under section 297H.03, based on the sales price of the waste management services.

(b) A self-hauler of nonmixed municipal solid waste shall pay the tax to the operator of the waste management facility to which the waste is delivered at the rate imposed under section 297H.04.

(c) The tax imposed on the self-hauler of nonmixed municipal solid waste may be based either on the capacity of the container, the actual volume, or the weight-to-volume conversion schedule in paragraph (d). However, the tax must be calculated by the operator using the same method for calculating the tipping fee so that both are calculated according to container capacity, actual volume, or weight.

(d) The deleted text begin weight-to-volume conversion scheduledeleted text end new text begin taxnew text end for:

(1) construction debris as defined in section 115A.03, subdivision 7, is deleted text begin one ton equals 3.33 cubic yards, or $2 per tondeleted text end new text begin equal to 60 cents per cubic yard. The commissioner of revenue, after consultation with the commissioner of the Pollution Control Agency, shall determine and publish by notice a weight-to-volume conversion schedule for construction debrisnew text end ;

(2) industrial waste as defined in section 115A.03, subdivision 13a, is equal to 60 cents per cubic yard. The commissioner of revenue, after consultation with the commissioner of the Pollution Control Agency, shall determinedeleted text begin ,deleted text end and deleted text begin maydeleted text end publish by noticedeleted text begin ,deleted text end a new text begin weight-to-volume new text end conversion schedule for various industrial wastes; and

(3) infectious waste as defined in section 116.76, subdivision 12, and pathological waste as defined in section 116.76, subdivision 14, is 150 pounds equals one cubic yard, or 60 cents per 150 pounds.

(e) For mixed municipal solid waste the tax is imposed upon the difference between the market price and the tip fee at a processing or disposal facility if the tip fee is less than the market price and the political subdivision subsidizes the cost of service at the facility. The political subdivision is liable for the tax.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021, except the new rate for construction debris applies to waste delivered after June 30, 2021. new text end

Sec. 20.

Minnesota Statutes 2020, section 298.001, is amended by adding a subdivision to read:

new text begin Subd. 13. new text end

new text begin Merchantable iron ore concentrate. new text end

new text begin "Merchantable iron ore concentrate" means iron-bearing material that has been treated in Minnesota by any means of beneficiation, separation, concentration, or refinement for the purpose of making it salable for its iron ore content. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2022 and thereafter. new text end

Sec. 21.

Minnesota Statutes 2020, section 298.24, subdivision 1, is amended to read:

Subdivision 1.

Imposed; calculation.

(a) For concentrate produced in 2013, there is imposed upon taconite and iron sulphides, and upon the mining and quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon the concentrate so produced, a tax of $2.56 per gross ton of merchantable iron ore concentrate produced therefrom.

(b) For concentrates produced in 2014 and subsequent years, the tax rate shall be equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate multiplied by the percentage increase in the implicit price deflator from the fourth quarter of the second preceding year to the fourth quarter of the preceding year. "Implicit price deflator" means the implicit price deflator for the gross domestic product prepared by the Bureau of Economic Analysis of the United States Department of Commerce.

(c) An additional tax is imposed equal to three cents per gross ton of merchantable iron ore concentrate for each one percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees Fahrenheit.

(d) The tax on taconite and iron sulphides shall be imposed on the average of the production for the current year and the previous two years. The rate of the tax imposed will be the current year's tax rate. This clause shall not apply in the case of the closing of a taconite facility if the property taxes on the facility would be higher if this clause and section 298.25 were not applicable.

(e) The tax under paragraph (a) is also imposed upon other iron-bearing materialnew text begin as described in section 298.405 on the tonnage of merchantable iron ore concentrate produced therefromnew text end . The tax on other iron-bearing material shall be imposed on the current year production. The rate of the tax imposed is the current year's tax rate.

(f) If the tax or any part of the tax imposed by this subdivision is held to be unconstitutional, a tax of $2.56 per gross ton of merchantable iron ore concentrate produced shall be imposed.

(g) Consistent with the intent of this subdivision to impose a tax based upon the weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly determine the weight of merchantable iron ore concentrate included in fluxed pellets by subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic flux additives included in the pellets from the weight of the pellets. For purposes of this paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, olivine, or other basic flux additives are combined with merchantable iron ore concentrate. No subtraction from the weight of the pellets shall be allowed for binders, mineral and chemical additives other than basic flux additives, or moisture.

(h)(1) Notwithstanding any other provision of this subdivision, for the first two years of a plant's commercial production of direct reduced ore from ore mined in this state, no tax is imposed under this section. For the third year of a plant's commercial production of direct reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate otherwise determined under this subdivision. For the fourth commercial production year, the rate is 50 percent of the rate otherwise determined under this subdivision; for the fifth commercial production year, the rate is 75 percent of the rate otherwise determined under this subdivision; and for all subsequent commercial production years, the full rate is imposed.

(2) Subject to clause (1), production of direct reduced ore in this state is subject to the tax imposed by this section, but if that production is not produced by a producer of taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron sulfides, or other iron-bearing material, that is consumed in the production of direct reduced ore in this state is not subject to the tax imposed by this section on taconite, iron sulfides, or other iron-bearing material.

(3) Notwithstanding any other provision of this subdivision, no tax is imposed on direct reduced ore under this section during the facility's noncommercial production of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial production of direct reduced ore is subject to the tax imposed by this section on taconite and iron sulphides. Three-year average production of direct reduced ore does not include production of direct reduced ore in any noncommercial year.

(4) Three-year average production for a direct reduced ore facility that has noncommercial production is the average of the commercial production of direct reduced ore for the current year and the previous two commercial years.

(5) As used in this paragraph, "commercial production" means production of more than 50,000 tons of direct reduced ore in the current year or in any prior year, and "noncommercial production" means production of 50,000 tons or less of direct reduced ore in any year.

(6) This paragraph applies only to plants for which all environmental permits have been obtained and construction has begun before July 1, 2008.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2022 and thereafter. new text end

Sec. 22.

Minnesota Statutes 2020, section 298.285, is amended to read:

298.285 STATE AID AMOUNT; APPROPRIATION.

new text begin (a) new text end The commissioner of revenue shall determine a state aid amount equal to a tax of 33 cents per taxable ton of iron ore concentrates for production year 2001 and 22 cents per taxable ton of iron ore concentrates for production years 2002 and thereafternew text begin , except as provided in paragraph (b)new text end . deleted text begin There is appropriated from the general fund to the commissioner an amount equal to the state aid determined under this section. It must be distributed under section 298.28, as if the aid were production tax revenues.deleted text end

new text begin (b) Other iron-bearing material, as defined in section 298.001, subdivision 9, must not be included in the determination of state aid amounts under paragraph (a) until distribution year 2024. new text end

new text begin (c) There is appropriated from the general fund to the commissioner an amount equal to the state aid determined under this section. The appropriation must be distributed under section 298.28, as if the aid were production tax revenues. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2020, section 298.405, subdivision 1, is amended to read:

Subdivision 1.

Definition.

Iron-bearing materialnew text begin ,new text end other than taconite and semitaconite, having not more than 46.5 percent natural iron content on the average, is subject to taxation under section 298.24. The tax under that section applies to material that isdeleted text begin :deleted text end

deleted text begin (1) finer than or ground to 90 percent passing 20 mesh; and deleted text end

deleted text begin (2)deleted text end treated in Minnesota for the purpose of deleted text begin separating the iron particles from silica, alumina, or other detrimental compounds or elements unless used in a direct reduction process:deleted text end new text begin making the iron-bearing material merchantable by any means of beneficiation, separation, concentration, or refinement. The tax under section 298.24 does not apply to unmined iron ore and low-grade iron-bearing formations as described in section 273.13, subdivision 31, clause (1).new text end

deleted text begin (i) by electrostatic separation, roasting and magnetic separation, or flotation; deleted text end

deleted text begin (ii) by a direct reduction process; deleted text end

deleted text begin (iii) by any combination of such processes; or deleted text end

deleted text begin (iv) by any other process or method not presently employed in gravity separation plants employing only crushing, screening, washing, jigging, heavy media separation, spirals, cyclones, drying or any combination thereof. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2022 and thereafter. new text end

Sec. 24.

new text begin [299C.76] BACKGROUND CHECK; ACCESS TO FEDERAL TAX INFORMATION. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following definitions apply. new text end

new text begin (b) "Federal tax information" means federal tax returns and return information or information derived or created from federal tax returns, in possession of or control by the requesting agency, that is covered by the safeguarding provisions of section 6103(p)(4) of the Internal Revenue Code. new text end

new text begin (c) "IRS Publication 1075" means Internal Revenue Service Publication 1075 that provides guidance and requirements for the protection and confidentiality of federal tax information as required in section 6103(p)(4) of the Internal Revenue Code. new text end

new text begin (d) "National criminal history record information" means the Federal Bureau of Investigation identification records as defined in Code of Federal Regulations, title 28, section 20.3(d). new text end

new text begin (e) "Requesting agency" means the Department of Revenue, Department of Employment and Economic Development, Department of Human Services, board of directors of MNsure, the Office of MN.IT Services, and counties. new text end

new text begin Subd. 2. new text end

new text begin National criminal history record information check. new text end

new text begin As required by IRS Publication 1075, a requesting agency shall require fingerprints for a national criminal history record information check from the following individuals who have or will have access to federal tax information: new text end

new text begin (1) a current or prospective permanent or temporary employee of the requesting agency; new text end

new text begin (2) an independent contractor or vendor of the requesting agency; new text end

new text begin (3) an employee or agent of an independent contractor or vendor of the requesting agency; or new text end

new text begin (4) any other individual authorized to access federal tax information by the requesting agency. new text end

new text begin Subd. 3. new text end

new text begin Fingerprint submission and written statement of understanding. new text end

new text begin An individual subject to this section must provide fingerprints and a written statement of understanding that the fingerprints will be used for a background check to the requesting agency. The requesting agency must submit the fingerprints and written statement of understanding, along with the processing fees, to the superintendent of the Bureau of Criminal Apprehension. The fingerprints must only be used for the purposes described in this section. new text end

new text begin Subd. 4. new text end

new text begin Bureau of Criminal Apprehension requirements. new text end

new text begin (a) After the superintendent of the Bureau of Criminal Apprehension notifies requesting agencies that the United States Attorney General has approved the request for submission under Public Law 92-544, a requesting agency may submit information under subdivision 3. new text end

new text begin (b) Upon receipt of the information under subdivision 3, the superintendent of the Bureau of Criminal Apprehension must: new text end

new text begin (1) perform a state criminal history record information search; new text end

new text begin (2) exchange the fingerprints to the Federal Bureau of Investigation to facilitate a search of the national criminal history record information; new text end

new text begin (3) compile the results of the state and national criminal history record information searches; and new text end

new text begin (4) provide the results to the requesting agency. new text end

new text begin Subd. 5. new text end

new text begin Classification of data. new text end

new text begin (a) All data collected, created, received, maintained, or disseminated by the requesting agency under this section is classified as private data on individuals as defined in section 13.02, subdivision 12. new text end

new text begin (b) Notwithstanding any law to the contrary, a requesting agency must not further disseminate the results received under subdivision 4. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2020, section 469.074, is amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Nonprofit corporation creation authority. new text end

new text begin The Seaway Port Authority of Duluth may create a corporation as a nonprofit corporation under chapter 317A with the mission of furthering its goals and duties. new text end

Sec. 26.

Laws 1963, chapter 305, section 2, as amended by Laws 1998, chapter 404, section 62, is amended to read:

Sec. 2.

The authority created under this act shall consist of 11 directors, seven appointed by the city of Duluth and four appointed by the governor. The directors serve without compensation but may be reimbursed for authorized out-of-pocket expenses incurred in the fulfillment of their duties. The original term of three of the directors shall be for one year; the original term of two of the directors shall be for two years; and the original term of two of the directors shall be for three years, and until their respective successors are appointed and qualified. Subsequent terms of directors appointed by the city shall be for three years. All terms shall expire on June 30 of the appropriate year. Directors appointed by the governor serve at the pleasure of the governor. Whenever a vacancy on such authority shall occur by reason of resignation, death, removal from the city, or removal for failure or neglect to perform duties of a director, such vacancy shall be filled for the unexpired term. All appointments and removal of directors of the authority appointed by the city shall be made by the mayor, with the approval of the city council, evidenced by resolution. Every appointee who shall fail, within ten days after notification of deleted text begin hisdeleted text end appointment, to file with the city clerk deleted text begin hisdeleted text end new text begin the appointee'snew text end oath or affirmation to perform faithfully, honestly, and impartially the duties of deleted text begin hisdeleted text end new text begin thenew text end office, shall be deemed to have refused such appointment, and thereupon another person shall be appointed in the manner prescribed in this section.

Sec. 27.

Laws 1963, chapter 305, section 3, as amended by Laws 1998, chapter 404, section 63, is amended to read:

Sec. 3.

Subdivision 1.

Within 30 days after the members of the authority shall have qualified for office, the authority shall meet and organize, and adopt and thereafter may amend such rules and regulations for the conduct of the authority as the authority shall deem to be in the public interest and most likely to advance, enhance, foster, and promote the use of new text begin regional assets, new text end the entertainment and convention center and its facilities for activities, conventions, events, deleted text begin anddeleted text end athleticnew text begin ,new text end and cultural productions. Such rules and regulations shall at all times be in harmony with this act.

Subd. 2.

Such directors shall elect from among their number a deleted text begin presidentdeleted text end new text begin chairnew text end and a deleted text begin vice-presidentdeleted text end new text begin vice-chairnew text end , and shall also elect anew text begin treasurer ornew text end secretary deleted text begin who may or may not be a member of such authoritydeleted text end new text begin , or bothnew text end . No two of such offices may be held by one director. The officers shall have the duties and powers usually attendant upon such officers, and such other duties and powers not inconsistent herewith as may be provided by the authority.

Subd. 3.

The authority shall select a specific site within the city of Duluth for location of a national class entertainment and convention center, and may spend money appropriated, or otherwise available to it for that purpose, to acquire property for the center and to plan, design, construct, equip, and furnish the center. The authority shall administer, promote, and operate the center as a state facility, but for which the state assumes no financial responsibility or liability beyond the amounts appropriated for the facility.

Sec. 28.

Laws 1963, chapter 305, section 4, as amended by Laws 1998, chapter 404, section 64, is amended to read:

Sec. 4.

Subdivision 1.

The city treasurer of the city of Duluth shall be the deleted text begin treasurerdeleted text end new text begin fiscal agentnew text end of the authority. The deleted text begin treasurerdeleted text end new text begin fiscal agentnew text end shall receive and have the custody of all moneys of the authority from whatever source derived, and the same shall be deemed public funds. The deleted text begin treasurerdeleted text end new text begin city of Duluthnew text end shall disburse such funds only upon written orders drawn against such funds, signed by the manager and approved by the deleted text begin presidentdeleted text end new text begin chairnew text end , or in deleted text begin hisdeleted text end new text begin the chair'snew text end absence, the deleted text begin vice-presidentdeleted text end new text begin vice-chairnew text end of such authority; and each order shall state the name of the payee and the nature of the claim for which the same is issued. The deleted text begin treasurerdeleted text end new text begin fiscal agentnew text end shall keep an account of all monies coming into deleted text begin hisdeleted text end new text begin the fiscal agent'snew text end hands, showing the source of all receipts and the nature, purpose, and authority of all disbursements, and at least four times each year, at times and in a form to be determined by the city council, the authority shall file with the city clerk a financial statement of the authority, showing all receipts and disbursements, the nature of the same, the moneys on hand, and the purposes for which the same are applicable, the credits and assets of the authority, and its outstanding liabilities.

Subd. 2.

The authority has the exclusive power to receive, control, and order the expenditure of any and all moneys and funds pertaining to the center operations.

Subd. 3.

There are hereby created in the treasury of the city of Duluth a special entertainment and convention center fund, hereinafter referred to as the special fund, and an entertainment and convention center operating fund, hereinafter referred to as the operating fund. The moneys in the special fund shall be used solely for the acquisition and preparation of a site, and for the planning, construction, and equipping of the center. The special fund shall consist of:

(1) All moneys derived from the sale of bonds by the city to provide funds for the acquisition and preparation of a site, and for the planning, construction, and equipping of the center.

(2) All moneys appropriated or made available to the city of Duluth for the acquisition and preparation of a site, and for the planning, construction, and equipping of the center.

(3) The proceeds of all financial aid or assistance by the city or state governments for the acquisition and preparation of a site, and for the planning, construction, and equipping of the center.

(4) All moneys received from the United States of America to aid in the acquisition and preparation of a site, and for the planning, construction, and equipping of the center.

(5) All moneys received as gifts or contributions to the acquisition and preparation of a site, and for the planning, construction, and equipping of the center.

The operating fund shall be used for maintenance, new text begin marketing and new text end promotion, operation, or betterment of the center, and for expenses of the authority. The operating fund shall consist of all moneys of the authority derived from any source other than moneys credited to the special fund as hereinabove provided.

Subd. 4.

At least once in each year the city auditor shall make, or cause to be made, at the expense of the authority, a complete examination and audit of all books and accounts of the aforesaid authority; and for such purpose the city auditor shall have the authority and power to inspect and examine such books and accounts at any time during regular business hours and such intervals as deleted text begin he may determinedeleted text end new text begin determined by the city auditornew text end . One copy of such yearly audit shall be filed by the city auditor with the city clerk as a public document.

Subd. 5.

The authority shall annually submit to the governor and the legislature a report detailing its activities and finances for the previous year. The report shall also include a proposed budget for the succeeding two years, showing in reasonable detail estimated operating and nonoperating revenues from all sources, and estimated expenditures for operation, administration, ordinary repair, and debt service.

Subd. 6.

The legislative auditor shall make an annual audit of the authority's books and accounts once each year or as often as the legislative auditor's funds and personnel permit.

Sec. 29.

Laws 1963, chapter 305, section 5, as amended by Laws 1998, chapter 404, section 65, is amended to read:

Sec. 5.

Subdivision 1.

Wherever the word "center" is used in this act, it means the entertainment and convention center complexnew text begin and its facilitiesnew text end of the city of Duluth, including the land upon which it stands and land appurtenant thereto.

Subd. 2.

Notwithstanding anything to the contrary contained in any law, or in the charter of the city of Duluth, or in any ordinance thereof, passed by the city council, or approved by the electors of the city, there is hereby conferred upon such authority the power and duty to contract for and superintend the erection, construction, equipping and furnishing of the center, and to administer, promote, control, direct, manage, and operate the center as a municipal facility.

Sec. 30.

Laws 1963, chapter 305, section 8, as amended by Laws 1998, chapter 404, section 67, is amended to read:

Sec. 8.

The authority shall have the power:

To adopt and alter all bylaws and rules and regulations which it shall from time to time deem best for the conduct of the business of the authority, and for the use of the facilities of the authority, and for the purposes of carrying out the objects of this act; but such bylaws, rules, and regulations shall not be in conflict with the terms of this act.

To appoint and remove a manager and such other employees as the authority may deem necessary, who shall not be within the civil service classifications of the city, and to prescribe the duties and fix the compensation and other benefits of such manager and employees, without regard to any provision contained in the charter or any ordinance of the city relating to civil service, or to any provision contained in Minnesota Statutes 1961, Sections 197.45 to 197.47, inclusive.

To procure and provide for a policy or policies of insurance for the defense and indemnification of the city of Duluth, its officers and employees, and directors, manager, and employees of the authority, against claims arising against them out of the performance of duty, whether such claims be groundless, or otherwise. Premiums for any policies of insurance required by this act shall be paid for out of the funds of the entertainment convention center authority.

To implement and carry out the provisions of section 7 of this act.

To utilize the services and facilities of the city so far as the same are offered by appropriate city officials and accepted by the authority, and to pay the city for all charges and costs for such services.

To operate and maintain and to lease from others all facilities necessary or convenient in connection with the center and to contract for the operation and maintenance of any parts thereof or for services to be performed; to lease the whole or parts thereof, and grant concessions, all on such terms and conditions as the authority may determine.

To authorize and direct the city deleted text begin treasurerdeleted text end new text begin fiscal agentnew text end to invest, in the manner provided by law, any funds held in reserve, or sinking funds, or any funds not required for immediate disbursement.

To fix, alter, charge, and collect rates, fees, and all other charges to be made for all services or facilities furnished by the authority for the use of the center facilities by any persons or public or private agencies utilizing such services or facilities.

To make and execute contracts, agreements, instruments, and other arrangements necessary or convenient to the exercise of its powers.

Sec. 31.

Laws 1963, chapter 305, section 9, as amended by Laws 1998, chapter 404, section 68, is amended to read:

Sec. 9.

The manager of the center shall be responsible for the custody and control of all moneys received and collected from the daily operations of the center until such moneys are delivered to the city deleted text begin treasurerdeleted text end new text begin fiscal agentnew text end and deleted text begin hedeleted text end new text begin the fiscal agentnew text end shall have obtained a receipt therefor, or until such moneys are deposited in a bank account under control of the city deleted text begin treasurerdeleted text end new text begin fiscal agentnew text end .

The manager shall give bond in favor of the city of Duluth in a sum equal to twice the amount of money which will probably be in deleted text begin hisdeleted text end new text begin the manager'snew text end hands at any time during any one year, that amount to be determined at least annually by the authority; such bond to be conditioned upon the faithful discharge of deleted text begin hisdeleted text end new text begin the manager'snew text end official duties, and be approved as to form, correctness, and validity by the city attorney, and filed with the city auditor; such bond, however, shall not exceed $300,000. Premiums for such bonds shall be paid out of funds of the authority.

Sec. 32.

Laws 1963, chapter 305, section 10, as amended by Laws 1998, chapter 404, section 69, is amended to read:

Sec. 10.

The authority shall regulate the making of bids and the letting of contracts through procedure established by the authority, subject to the following conditions:

(a) In all cases of work to be done by contract or the purchase of property of any kind, or the rendering of any service to the authority other than professional services, competitive bids shall be secured before any purchase is made or any contract awarded where the amount involved exceeds the sum of deleted text begin $2,000deleted text end new text begin $50,000new text end .

(b) All bids shall be sealed when received, shall be opened in public at the hour stated in the notice; and all original bids, together with all documents pertaining to the award of the contract, shall be retained and made a part of the permanent file or record, and shall be open to public inspection.

(c) Purchases of deleted text begin $2,000deleted text end new text begin $50,000new text end or less may, through procedure established by the authority, be delegated to the center manager. Contracts involving more than deleted text begin $2,000deleted text end new text begin $50,000new text end shall be awarded only after authorization by the authority.

(d) The authority may reject, or through procedure established by the authority, authorize the center manager to reject, any and all bids.

(e) Contract shall be let to the lowest responsible bidder, and purchases shall be made from the responsible bidder who offers to furnish the article desired for the lowest sum.

(f) In determining the lowest responsible bidder, in addition to price, the following may be considered:

(1) The ability, capacity, and skill of the bidder to perform the contract or provide the service required.

(2) Whether the bidder can perform the contract or provide the service promptly, or within the time specified, without delay or interference.

(3) The character, integrity, reputation, judgment, experience and efficiency of the bidder.

(4) The quality of performance of previous contracts or services.

(5) The sufficiency of the financial resources and ability of the bidder to perform the contract or provide the service.

(6) The quality, availability, and adaptability of the supplies or contractual service to the particular use required.

(7) The ability of the bidder to provide future maintenance and service for the use of the subject of the contract.

(8) The number and scope of conditions attached to the bid.

(g) Specifications shall not be so prepared as to exclude all but one type or kind, but shall include competitive supplies and equipment; provided, however, that unique or noncompetitive articles which are determined by the authority to be sufficiently superior for the service intended by the authority, may be purchased without regard to other bids.

Sec. 33.

Laws 2020, Fifth Special Session chapter 3, article 3, section 5, subdivision 10, is amended to read:

Subd. 10.

Victoria Theater, St. Paul

1,400,000

For a grant to the deleted text begin city of St. Pauldeleted text end new text begin Victoria Theater Arts Centernew text end to acquire property located at 825 University Avenue West, and to predesign, design, deleted text begin construct, furnish, and equip the renovation of the historic Victoria Theater, to serve as a regional multicultural community and event center. This appropriation includes money for: demolition work; improvements to or deleted text end deleted text begin replacement of the mechanical, electrical, deleted text end deleted text begin plumbing, heating, ventilating, and air conditioning systems;deleted text end new text begin renovate the exterior envelope, and prepare the site of the historic Victoria Theater. This appropriation includes money for: building acquisition; predesign and design costs; project management fees;new text end repairs new text begin and improvementsnew text end to the existing roof and exterior enclosure; new text begin andnew text end site new text begin and substructurenew text end improvementsdeleted text begin ; construction or renovation of deleted text end deleted text begin interior spaces; and other improvements of a deleted text end deleted text begin capital naturedeleted text end new text begin to the historic Victoria Theater, to serve as a regional multicultural community and event centernew text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 34.

Laws 2021, First Special Session chapter 6, article 1, section 9, is amended to read:

Sec. 9.

EXPLORE MINNESOTA TOURISM

$ 15,434,000 $ 14,523,000

(a) $500,000 the first year and $500,000 the second year must be matched from nonstate sources to develop maximum private sector involvement in tourism. Each $1 of state incentive must be matched with $6 of private sector money. "Matched" means revenue to the state or documented cash expenditures directly expended to support Explore Minnesota Tourism programs. Up to one-half of the private sector contribution may be in-kind or soft match. The incentive in fiscal year 2022 is based on fiscal year 2021 private sector contributions. The incentive in fiscal year 2023 is based on fiscal year 2022 private sector contributions. This incentive is ongoing.

(b) Money for marketing grants is available either year of the biennium. Unexpended grant money from the first year is available in the second year.

(c) $100,000 each year is for a grant to the Northern Lights International Music Festival.

(d) $1,000,000 the first year is for a recovery grant program, including grants for local and Tribal governments, for tourism, meetings and conventions, and events assistance and promotions. This is a onetime appropriation.new text begin Of this amount, $250,000 is for a grant to the Grand Portage Band to focus tourism to Grand Portage.new text end

Sec. 35.

Laws 2021, First Special Session chapter 7, article 9, section 5, the effective date, if enacted, is amended to read:

EFFECTIVE DATE.

deleted text begin This section isdeleted text end new text begin The changes made by this section to paragraph (c) arenew text end effective January 1, 2023.new text begin The changes made by this section to paragraphs (h) and (i) are effective the day following final enactment.new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective on or retroactively from July 1, 2021. new text end

Sec. 36.

new text begin COVID-19 PUBLIC HEALTH DISASTER RESPONSE. new text end

new text begin Subdivision 1. new text end

new text begin Public health disaster declaration; eligibility for federal assistance. new text end

new text begin (a) Notwithstanding any other law to the contrary, the commissioner of human services or the commissioner of health may declare a public health disaster if either commissioner determines that the state must take action to protect the public health, including provi