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

CHAPTER 389--H.F.No. 3729
An act
relating to the financing and operation of state and local government;
making policy, technical, administrative, payment, enforcement, collection,
refund, and other changes to individual income; corporate franchise, estate,
sales and use, local taxes, gross receipts, gross revenues, cigarette, tobacco,
insurance, property, minerals, petroleum, and other taxes and tax-related
provisions; property tax reform, accountability, value, and efficiency provisions;
authorizing and modifying certain local taxes; making changes to tax-forfeited
land, emergency debt certificate, local government aid, job opportunity building
zone, special service district, agricultural preserve, tax increment financing,
economic development authority, lawful gambling and special taxing district
provisions; increasing and modifying certain borrowing authorities; modifying
bond allocation provisions; requiring studies; providing appointments;
providing grants; appropriating money for a revenue department facility and
parking improvements; appropriating money;amending Minnesota Statutes
2008, sections 60A.209, subdivision 1; 103D.335, subdivision 17; 270.075,
subdivisions 1, 2; 270C.34, subdivision 1; 270C.52, subdivision 2; 270C.87;
270C.94, subdivision 3; 272.02, subdivision 31; 272.0213; 272.025, subdivisions
1, 3; 272.029, subdivisions 4, 7; 273.113, subdivision 3; 273.124, subdivisions 8,
14; 273.13, subdivision 22; 273.1392; 275.71, subdivisions 4, 5; 275.75; 276.02;
279.01, subdivision 3; 279.025; 279.37, subdivision 1; 282.01, subdivisions
1, 1a, 1b, 1c, 1d, 2, 3, 4, 7, 7a, by adding subdivisions; 289A.08, subdivision
7; 289A.09, subdivision 2; 289A.12, subdivision 14; 289A.30, subdivision 2;
289A.50, subdivisions 2, 4; 289A.60, subdivision 7; 290.014, subdivision 2;
290.067, subdivision 1; 290.081; 290.0921, subdivision 3; 290.17, subdivision
2; 295.55, subdivisions 2, 3; 297A.62, as amended; 297A.665; 297A.68,
subdivision 39; 297A.70, subdivision 13; 297A.71, subdivision 23, by adding a
subdivision; 297A.75, subdivision 3; 297A.995, subdivisions 10, 11; 297F.01,
subdivision 22a; 297F.04, by adding a subdivision; 297F.07, subdivision
4; 297F.25, subdivision 1; 297I.01, subdivision 9; 297I.05, subdivision 7;
297I.30, subdivisions 1, 2, 7, 8; 297I.40, subdivisions 1, 5; 297I.65, by
adding a subdivision; 298.282, subdivision 1; 373.40, subdivision 1; 383B.79,
subdivision 5; 428A.12; 428A.18, subdivision 2; 469.101, subdivision 1;
469.319, subdivision 5; 469.3193; 473.39, by adding a subdivision; 473H.05,
subdivision 1; 474A.04, subdivision 6; 474A.091, subdivision 3; 477A.17;
Minnesota Statutes 2009 Supplement, sections 134.34, subdivision 4; 273.111,
subdivisions 3a, 4; 273.114, subdivisions 1, 2, 5; 273.124, subdivision 3a;
273.13, subdivisions 23, 25; 275.065, subdivision 3; 275.70, subdivision 5, as
amended; 279.01, subdivision 1; 289A.18, subdivision 1; 290.01, subdivisions
19a, 19b, as amended, 19d; 290.06, subdivision 2c; 290.0671, subdivision 1;
290.091, subdivision 2; 297A.75, subdivisions 1, 2; 297I.35, subdivision 2;
349.12, subdivision 25; 429.011, subdivision 2a; 475.755; 477A.013, subdivision
8; Laws 1999, chapter 243, article 4, section 18, subdivisions 3, as amended, 4;
Laws 2001, First Special Session chapter 5, article 3, section 50, as amended;
Laws 2002, chapter 377, article 3, section 25, as amended; Laws 2009, chapter
88, article 2, section 49; article 4, sections 5; 23, subdivision 4; Laws 2010,
chapter 216, sections 2, subdivision 3; 3, subdivision 6; by adding subdivisions;
4, subdivisions 1, 2, 4, 6, 7, 8; 58, as amended; proposing coding for new law
in Minnesota Statutes, chapters 3; 6; 270C; 296A; 645; repealing Minnesota
Statutes 2008, sections 282.01, subdivisions 9, 10, 11; 297I.30, subdivisions
4, 5, 6; 383A.76.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1
PROPERTY TAXES

    Section 1. Minnesota Statutes 2008, section 270.075, subdivision 1, is amended to read:
    Subdivision 1. Rate of tax. The commissioner shall determine the rate of tax to be
levied and collected against the net tax capacity as determined pursuant to section 270.074,
subdivision 2 3
, to generate revenues sufficient to fund the airflight property tax portion
of each year's state airport fund appropriation, as certified to the commissioner by the
commissioner of transportation. The certification shall be presented to the commissioner
prior to December 31 of each year. The property tax portion of the state airport fund
appropriation is the difference between the total fund appropriation and the estimated total
fund revenues from other sources for the state fiscal year in which the tax is payable
and may include a portion of the balance in the state airports fund as determined to be
available by the commissioner of transportation. If a levy amount has not been certified by
September 1 of a levy year, the commissioner shall use the last previous certified amount
to determine the rate of tax. The certification by the commissioner of transportation to
the commissioner shall state the total fund appropriation and shall list individually the
estimated fund revenues including the account carryover balance in the airport fund.
The difference of these amounts shall be shown as the property tax portion of the state
airport fund appropriation.
If a levy amount has not been certified by December 31 of a levy year, the
commissioner shall use the last previous certified amount to determine the rate of tax, and
shall notify the chairs and the ranking minority members of the committees of the house
of representatives and senate having jurisdiction over the Department of Transportation
that a certification was not made under this subdivision.
EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
thereafter.

    Sec. 2. Minnesota Statutes 2008, section 270.075, subdivision 2, is amended to read:
    Subd. 2. Notice of taxes; payment. As soon as practicable and not later than
December March 1 next following the levy of the tax, the commissioner shall give actual
notice to the airline company of the net tax capacity and of the tax. The taxes imposed
under sections 270.071 to 270.079 shall become due and payable on January April 1
following the levy thereof. If any tax is not paid on the due date or, if an appeal is made
pursuant to section 270.076, within 60 days after notice of an increased tax, a late payment
penalty of five percent of the unpaid tax shall be assessed. If the tax remains unpaid for
more than 30 days, an additional penalty of five percent of the unpaid tax is imposed for
each additional 30 days or fraction of 30 days that the tax remains unpaid. The penalty
imposed under this section must not exceed the lesser of $25,000 or 25 percent of the
unpaid tax. The unpaid tax and penalty shall bear interest at the rate specified in section
270C.40 from the time such tax should have been paid until paid. All interest and penalties
shall be added to the tax and collected as a part thereof.
EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
thereafter.

    Sec. 3. Minnesota Statutes 2008, section 272.02, subdivision 31, is amended to read:
    Subd. 31. Business incubator property. Property owned by a nonprofit charitable
organization that qualifies for tax exemption under section 501(c)(3) of the Internal
Revenue Code that is intended to be used as a business incubator in a high-unemployment
county, is exempt. As used in this subdivision, a "business incubator" is a facility
used for the development of nonretail businesses, offering access to equipment, space,
services, and advice to the tenant businesses, for the purpose of encouraging economic
development, diversification, and job creation in the area served by the organization, and
"high-unemployment county" is a county that had an average annual unemployment rate
of 7.9 percent or greater in 1997. Property that qualifies for the exemption under this
subdivision is limited to no more than two contiguous parcels and structures that do not
exceed in the aggregate 40,000 square feet. This exemption expires after taxes payable
in 2011 2016.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2008, section 272.0213, is amended to read:
272.0213 LEASED SEASONAL-RECREATIONAL LAND.
    (a) A county board may elect, by resolution, to exempt from taxation, including the
tax under section 273.19, qualified lands. "Qualified lands" for purposes of this section
means property that:
    (1) is owned by a county, city, town, or the state, or the federal governments;
    (2) is rented by the entity for noncommercial seasonal-recreational or noncommercial
seasonal-recreational residential use; and
    (3) was rented for the purposes specified in clause (2) and was exempt from taxation
for property taxes payable in 2008.
(b) Lands owned by the federal government and rented for noncommercial
seasonal-recreational or noncommercial seasonal-recreational residential use is exempt
from taxation, including the tax under section 273.19.
EFFECTIVE DATE.This section is effective beginning with taxes payable in 2011.

    Sec. 5. Minnesota Statutes 2009 Supplement, section 273.111, subdivision 3a, is
amended to read:
    Subd. 3a. Property no longer eligible for deferment. (a) Real estate receiving the
tax deferment under this section for assessment year 2008, but that does not qualify for
the 2009 assessment year due to changes in qualification requirements under Laws 2008,
chapter 366, shall continue to qualify until: (1) the land is sold, transferred, or subdivided,
or (2) the 2013 assessment, whichever is earlier, provided that the property continues to
meet the requirements of Minnesota Statutes 2006, section 273.111, subdivision 3.
    (b) Except as provided in paragraph (c), and subdivision 9, paragraph (b), when
property assessed under this subdivision is withdrawn from the program or becomes
ineligible, the property shall be subject to additional taxes as provided in subdivision 9.
(c) If land described in paragraph (a) is (1) sold or otherwise transferred to a son or
daughter of the owner, or (2) transferred from a family farm limited liability company
upon its termination to a son or daughter of an individual who had an ownership interest
in the company, it will continue to qualify for treatment under this section as long as
it continues to meet the requirements of Minnesota Statutes 2006, section 273.111,
subdivision 3, but no later than the 2013 assessment.
(d) When property assessed under this subdivision is removed from the program
and is enrolled in the rural preserve property tax law program under section 273.114,
the property is not subject to the additional taxes required under this subdivision or
subdivision 9.
EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
thereafter.

    Sec. 6. Minnesota Statutes 2009 Supplement, section 273.111, subdivision 4, is
amended to read:
    Subd. 4. Determination of value. (a) The value of any real estate described
in subdivision 3 shall upon timely application by the owner, in the manner provided
in subdivision 8, be determined solely with reference to its appropriate agricultural
classification and value notwithstanding sections 272.03, subdivision 8, and 273.11.
Furthermore, the assessor shall not consider any added values resulting from
nonagricultural factors. In order to account for the presence of nonagricultural influences
that may affect the value of agricultural land, the commissioner of revenue shall, in
consultation with the Department of Applied Economics at the University of Minnesota,
develop a fair and uniform method of determining agricultural values the average value
of agricultural land for each county in the state that are consistent with this subdivision.
The values must be determined using appropriate sales data. When appropriate, the
commissioner may make reasonable adjustments to the values based on the most
recent available county or regional data for agricultural production, commodity prices,
production expenses, rent, and investment return. The commissioner shall annually assign
the resulting values countywide average value to each county, and these values shall be
used as the basis for determining the agricultural value for all properties in the county
qualifying for tax deferment under this section. The county assessor, in consultation with
the Department of Revenue, shall determine the relative value of agricultural land for each
assessment district in comparison to the countywide average value, considering and giving
recognition to appropriate agricultural market and soil data available.
    (b) In the case of property qualifying for tax deferment only under subdivision 3a,
the assessor shall not consider the presence of commercial, industrial, residential, or
seasonal recreational land use influences in determining the value for ad valorem tax
purposes provided that in no case shall the value exceed the value prescribed by the
commissioner of revenue for class 2a tillable property in that county.
EFFECTIVE DATE.This section is effective for assessment year 2012 and
thereafter.

    Sec. 7. Minnesota Statutes 2009 Supplement, section 273.114, subdivision 1, is
amended to read:
    Subdivision 1. Definitions. (a) In this section, the terms defined in this subdivision
have the meanings given them.
(b) "Conservation management assessment plan" means a written document
approved by the soil and water conservation district providing a framework for
site-specific healthy, productive, and sustainable conservation resources. A conservation
management assessment plan must include at least the following:
(1) conservation management goals for the land;
(2) a reliable field inventory of the individual conservation practices and cover types
United States Department of Agriculture field map;
(3) a description of the soil type and quality;
(4) an aerial photo or map of the vegetation and other natural features of the land
clearly indicating the boundaries of the conservation land;
(5) the proposed future conditions of the land;
(6) prescriptions to meet proposed future conditions of the land;
(7) a recommended timetable for implementing the prescribed practices; and
(8) a legal description of the land encompassing the parcels included in the plan.
(c) The Board of Water and Soil Resources shall develop and distribute guidance for
conservation management assessment plan preparation and approval.
(d) The commissioner of revenue is the final arbiter of disputes arising over plan
approvals.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2009 Supplement, section 273.114, subdivision 2, is
amended to read:
    Subd. 2. Requirements. Class 2a or 2b property that had been assessed under
Minnesota Statutes 2006, section 273.111, or that is part of an agricultural homestead
under Minnesota Statutes, section 273.13, subdivision 23, paragraph (a), is entitled to
valuation and tax deferment under this section if:
(1) the land consists of at least ten acres;
(2) a conservation management assessment plan for the land must be prepared by an
approved plan writer and implemented during the period in which the land is subject to
valuation and deferment under this section;
(3) the land must be enrolled for a minimum of ten eight years; and
(4) there are no delinquent property taxes on the land.; and
Real estate may (5) the property is not be also enrolled for valuation and deferment
under this section and section 273.111, or 273.112, or 273.117, or chapter 290C,
concurrently or 473H.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2009 Supplement, section 273.114, subdivision 5, is
amended to read:
    Subd. 5. Application and covenant agreement. (a) Application for deferment
of taxes and assessment under this section shall be filed by May 1 of the year prior to
the year in which the taxes are payable. Any application filed under this subdivision
and granted shall continue in effect for subsequent years until the termination of the
covenant agreement under paragraph (b). The application must be filed with the assessor
of the taxing district in which the real property is located on the form prescribed by the
commissioner of revenue. The assessor may require proof by affidavit or otherwise that
the property qualifies under subdivision 2.
    (b) The owner of the property must sign a covenant agreement that is filed with the
county recorder and recorded in the county where the property is located. The covenant
agreement must include all of the following:
    (1) legal description of the area to which the covenant applies;
    (2) name and address of the owner;
    (3) a statement that the land described in the covenant must be kept as rural preserve
land, which meets the requirements of subdivision 2, for the duration of the covenant;
    (4) a statement that the landowner may terminate the covenant agreement by
notifying the county assessor in writing five three years in advance of the date of proposed
termination, provided that the notice of intent to terminate may not be given at any time
before the land has been subject to the covenant for a period of five years;
    (5) a statement that the covenant is binding on the owner or the owner's successor or
assigns and runs with the land; and
    (6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as
described in subdivision 2.
(c) After a covenant under this section has been terminated, the land that had been
subject to the covenant is ineligible for subsequent valuation under this section for a
period of three years after the termination.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2009 Supplement, section 273.124, subdivision 3a,
is amended to read:
    Subd. 3a. Manufactured home park cooperative. (a) When a manufactured home
park is owned by a corporation or association organized under chapter 308A or 308B,
and each person who owns a share or shares in the corporation or association is entitled
to occupy a lot within the park, the corporation or association may claim homestead
treatment for each lot occupied by a shareholder the park. Each lot must be designated
by legal description or number, and each lot is limited to not more than one-half acre of
land for each homestead.
(b) The manufactured home park shall be valued and assessed as if it were
homestead property within class 1 entitled to homestead treatment if all of the following
criteria are met:
(1) the occupant is using the property as a permanent residence;
(2) the occupant or the cooperative corporation or association is paying the ad
valorem property taxes and any special assessments levied against the land and structure
either directly, or indirectly through dues to the corporation or association; and
(3) (2) the corporation or association organized under chapter 308A or 308B is
wholly owned by persons having a right to occupy a lot owned by the corporation or
association.
(c) A charitable corporation, organized under the laws of Minnesota with no
outstanding stock, and granted a ruling by the Internal Revenue Service for 501(c)(3)
tax-exempt status, qualifies for homestead treatment with respect to member residents of
the a manufactured home park who if its members hold residential participation warrants
entitling them to occupy a lot in the manufactured home park.
(d) "Homestead treatment" under this subdivision means the class rate provided for
class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause (5),
item (ii). The homestead market value credit under section 273.1384 does not apply and
the property taxes assessed against the park shall not be included in the determination of
taxes payable for rent paid under section 290A.03.
EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
thereafter.

    Sec. 11. Minnesota Statutes 2008, section 273.124, subdivision 8, is amended to read:
    Subd. 8. Homestead owned by or leased to family farm corporation, joint farm
venture, limited liability company, or partnership. (a) Each family farm corporation;
each joint family farm venture; and each limited liability company or partnership which
operates a family farm; is entitled to class 1b under section 273.13, subdivision 22,
paragraph (b), or class 2a assessment for one homestead occupied by a shareholder,
member, or partner thereof who is residing on the land, and actively engaged in farming of
the land owned by the family farm corporation, joint family farm venture, limited liability
company, or partnership. Homestead treatment applies even if legal title to the property is
in the name of the family farm corporation, joint family farm venture, limited liability
company, or partnership, and not in the name of the person residing on it.
"Family farm corporation," "family farm," and "partnership operating a family
farm" have the meanings given in section 500.24, except that the number of allowable
shareholders, members, or partners under this subdivision shall not exceed 12. "Limited
liability company" has the meaning contained in sections 322B.03, subdivision 28, and
500.24, subdivision 2, paragraphs (l) and (m). "Joint family farm venture" means a
cooperative agreement among two or more farm enterprises authorized to operate a family
farm under section 500.24.
(b) In addition to property specified in paragraph (a), any other residences owned
by family farm corporations, joint family farm ventures, limited liability companies,
or partnerships described in paragraph (a) which are located on agricultural land and
occupied as homesteads by its shareholders, members, or partners who are actively
engaged in farming on behalf of that corporation, joint farm venture, limited liability
company, or partnership must also be assessed as class 2a property or as class 1b property
under section 273.13.
(c) Agricultural property that is owned by a member, partner, or shareholder of a
family farm corporation or joint family farm venture, limited liability company operating
a family farm, or by a partnership operating a family farm and leased to the family farm
corporation, limited liability company, partnership, or joint farm venture, as defined in
paragraph (a), is eligible for classification as class 1b or class 2a under section 273.13, if
the owner is actually residing on the property, and is actually engaged in farming the land
on behalf of that corporation, joint farm venture, limited liability company, or partnership.
This paragraph applies without regard to any legal possession rights of the family farm
corporation, joint family farm venture, limited liability company, or partnership under
the lease.
(d) Agricultural property that (1) is owned by a family farm corporation, joint
farm venture, limited liability company, or partnership and (2) is contiguous to a class
2a homestead under section 273.13, subdivision 23, or if noncontiguous, is located in
the same township or city, or not farther than four townships or cities, or combination
thereof from a class 2a homestead, and the class 2a homestead is owned by one of the
shareholders, members, or partners; is entitled to receive the first tier homestead class rate
up to the first tier maximum market value on any remaining market value not received
on the shareholder's, member's, or partner's homestead class 2a property. The owner
must notify the county assessor by July 1 that a portion of the market value under this
subdivision may be eligible for homestead classification for the current assessment year,
for taxes payable in the following year.
EFFECTIVE DATE.This section is effective for assessment year 2010 and
thereafter, for taxes payable in 2011 and thereafter.

    Sec. 12. Minnesota Statutes 2008, section 273.124, subdivision 14, is amended to read:
    Subd. 14. Agricultural homesteads; special provisions. (a) Real estate of less than
ten acres that is the homestead of its owner must be classified as class 2a under section
273.13, subdivision 23, paragraph (a), if:
    (1) the parcel on which the house is located is contiguous on at least two sides to (i)
agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
Service, or (iii) land administered by the Department of Natural Resources on which in
lieu taxes are paid under sections 477A.11 to 477A.14;
    (2) its owner also owns a noncontiguous parcel of agricultural land that is at least
20 acres;
    (3) the noncontiguous land is located not farther than four townships or cities, or a
combination of townships or cities from the homestead; and
    (4) the agricultural use value of the noncontiguous land and farm buildings is equal
to at least 50 percent of the market value of the house, garage, and one acre of land.
    Homesteads initially classified as class 2a under the provisions of this paragraph shall
remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
properties, as long as the homestead remains under the same ownership, the owner owns a
noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
value qualifies under clause (4). Homestead classification under this paragraph is limited
to property that qualified under this paragraph for the 1998 assessment.
    (b)(i) Agricultural property shall be classified as the owner's homestead, to the same
extent as other agricultural homestead property, if all of the following criteria are met:
    (1) the property consists of at least 40 acres including undivided government lots
and correctional 40's;
    (2) the owner, the owner's spouse, the son or daughter of the owner or owner's
spouse, the brother or sister of the owner or owner's spouse, or the grandson or
granddaughter of the owner or the owner's spouse, is actively farming the agricultural
property, either on the person's own behalf as an individual or on behalf of a partnership
operating a family farm, family farm corporation, joint family farm venture, or limited
liability company of which the person is a partner, shareholder, or member;
    (3) both the owner of the agricultural property and the person who is actively
farming the agricultural property under clause (2), are Minnesota residents;
    (4) neither the owner nor the spouse of the owner claims another agricultural
homestead in Minnesota; and
    (5) neither the owner nor the person actively farming the property lives farther
than four townships or cities, or a combination of four townships or cities, from the
agricultural property, except that if the owner or the owner's spouse is required to live in
employer-provided housing, the owner or owner's spouse, whichever is actively farming
the agricultural property, may live more than four townships or cities, or combination of
four townships or cities from the agricultural property.
    The relationship under this paragraph may be either by blood or marriage.
    (ii) Real property held by a trustee under a trust is eligible for agricultural homestead
classification under this paragraph if the qualifications in clause (i) are met, except that
"owner" means the grantor of the trust.
    (iii) Property containing the residence of an owner who owns qualified property
under clause (i) shall be classified as part of the owner's agricultural homestead, if that
property is also used for noncommercial storage or drying of agricultural crops.
    (c) Noncontiguous land shall be included as part of a homestead under section
273.13, subdivision 23, paragraph (a), only if the homestead is classified as class 2a
and the detached land is located in the same township or city, or not farther than four
townships or cities or combination thereof from the homestead. Any taxpayer of these
noncontiguous lands must notify the county assessor that the noncontiguous land is part of
the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer
must also notify the assessor of the other county.
    (d) Agricultural land used for purposes of a homestead and actively farmed by a
person holding a vested remainder interest in it must be classified as a homestead under
section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a,
any other dwellings on the land used for purposes of a homestead by persons holding
vested remainder interests who are actively engaged in farming the property, and up to
one acre of the land surrounding each homestead and reasonably necessary for the use of
the dwelling as a home, must also be assessed class 2a.
    (e) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain
classified as agricultural homesteads for subsequent assessments if:
    (1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the April 1997 floods;
    (2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman,
or Wilkin;
    (3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 1997 assessment year and continue to be used
for agricultural purposes;
    (4) the dwelling occupied by the owner is located in Minnesota and is within 30
miles of one of the parcels of agricultural land that is owned by the taxpayer; and
    (5) the owner notifies the county assessor that the relocation was due to the 1997
floods, and the owner furnishes the assessor any information deemed necessary by the
assessor in verifying the change in dwelling. Further notifications to the assessor are not
required if the property continues to meet all the requirements in this paragraph and any
dwellings on the agricultural land remain uninhabited.
    (f) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain
classified agricultural homesteads for subsequent assessments if:
    (1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by a March 29, 1998, tornado;
    (2) the property is located in the county of Blue Earth, Brown, Cottonwood,
LeSueur, Nicollet, Nobles, or Rice;
    (3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 1998 assessment year;
    (4) the dwelling occupied by the owner is located in this state and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and
    (5) the owner notifies the county assessor that the relocation was due to a March 29,
1998, tornado, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
owner must notify the assessor by December 1, 1998. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph
and any dwellings on the agricultural land remain uninhabited.
    (g) Agricultural property of a family farm corporation, joint family farm venture,
family farm limited liability company, or partnership operating a family farm as described
under subdivision 8 shall be classified homestead, to the same extent as other agricultural
homestead property, if all of the following criteria are met:
    (1) the property consists of at least 40 acres including undivided government lots
and correctional 40's;
    (2) a shareholder, member, or partner of that entity is actively farming the
agricultural property;
    (3) that shareholder, member, or partner who is actively farming the agricultural
property is a Minnesota resident;
    (4) neither that shareholder, member, or partner, nor the spouse of that shareholder,
member, or partner claims another agricultural homestead in Minnesota; and
    (5) that shareholder, member, or partner does not live farther than four townships or
cities, or a combination of four townships or cities, from the agricultural property.
    Homestead treatment applies under this paragraph for property leased to a family
farm corporation, joint farm venture, limited liability company, or partnership operating a
family farm if legal title to the property is in the name of an individual who is a member,
shareholder, or partner in the entity.
    (h) To be eligible for the special agricultural homestead under this subdivision, an
initial full application must be submitted to the county assessor where the property is
located. Owners and the persons who are actively farming the property shall be required
to complete only a one-page abbreviated version of the application in each subsequent
year provided that none of the following items have changed since the initial application:
    (1) the day-to-day operation, administration, and financial risks remain the same;
    (2) the owners and the persons actively farming the property continue to live within
the four townships or city criteria and are Minnesota residents;
    (3) the same operator of the agricultural property is listed with the Farm Service
Agency;
    (4) a Schedule F or equivalent income tax form was filed for the most recent year;
    (5) the property's acreage is unchanged; and
    (6) none of the property's acres have been enrolled in a federal or state farm program
since the initial application.
    The owners and any persons who are actively farming the property must include
the appropriate Social Security numbers, and sign and date the application. If any of the
specified information has changed since the full application was filed, the owner must
notify the assessor, and must complete a new application to determine if the property
continues to qualify for the special agricultural homestead. The commissioner of revenue
shall prepare a standard reapplication form for use by the assessors.
    (i) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain
classified agricultural homesteads for subsequent assessments if:
    (1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by the August 2007 floods;
    (2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted,
Steele, Wabasha, or Winona;
    (3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 2007 assessment year;
    (4) the dwelling occupied by the owner is located in this state and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and
    (5) the owner notifies the county assessor that the relocation was due to the August
2007 floods, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the
owner must notify the assessor by December 1, 2008. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph
and any dwellings on the agricultural land remain uninhabited.
    (j) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain
classified as agricultural homesteads for subsequent assessments if:
    (1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the March 2009 floods;
    (2) the property is located in the county of Marshall;
    (3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 2008 assessment year and continue to be used
for agricultural purposes;
    (4) the dwelling occupied by the owner is located in Minnesota and is within 50
miles of one of the parcels of agricultural land that is owned by the taxpayer; and
    (5) the owner notifies the county assessor that the relocation was due to the 2009
floods, and the owner furnishes the assessor any information deemed necessary by the
assessor in verifying the change in dwelling. Further notifications to the assessor are not
required if the property continues to meet all the requirements in this paragraph and any
dwellings on the agricultural land remain uninhabited.
EFFECTIVE DATE.This section is effective for assessment years 2010 and 2011,
for taxes payable in 2011 and 2012.

    Sec. 13. Minnesota Statutes 2008, section 273.13, subdivision 22, is amended to read:
    Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b)
and (c), real estate which is residential and used for homestead purposes is class 1a. In the
case of a duplex or triplex in which one of the units is used for homestead purposes, the
entire property is deemed to be used for homestead purposes. The market value of class 1a
property must be determined based upon the value of the house, garage, and land.
    The first $500,000 of market value of class 1a property has a net class rate of
one percent of its market value; and the market value of class 1a property that exceeds
$500,000 has a class rate of 1.25 percent of its market value.
    (b) Class 1b property includes homestead real estate or homestead manufactured
homes used for the purposes of a homestead by:
    (1) any person who is blind as defined in section 256D.35, or the blind person and
the blind person's spouse;
    (2) any person who is permanently and totally disabled or by the disabled person and
the disabled person's spouse; or
    (3) the surviving spouse of a permanently and totally disabled veteran homesteading
a property classified under this paragraph for taxes payable in 2008.
    Property is classified and assessed under clause (2) only if the government agency or
income-providing source certifies, upon the request of the homestead occupant, that the
homestead occupant satisfies the disability requirements of this paragraph, and that the
property is not eligible for the valuation exclusion under subdivision 34.
    Property is classified and assessed under paragraph (b) only if the commissioner
of revenue or the county assessor certifies that the homestead occupant satisfies the
requirements of this paragraph.
    Permanently and totally disabled for the purpose of this subdivision means a
condition which is permanent in nature and totally incapacitates the person from working
at an occupation which brings the person an income. The first $50,000 market value of
class 1b property has a net class rate of .45 percent of its market value. The remaining
market value of class 1b property has a class rate using the rates for class 1a or class 2a
property, whichever is appropriate, of similar market value.
    (c) Class 1c property is commercial use real and personal property that abuts public
water as defined in section 103G.005, subdivision 15, and is devoted to temporary and
seasonal residential occupancy for recreational purposes but not devoted to commercial
purposes for more than 250 days in the year preceding the year of assessment, and that
includes a portion used as a homestead by the owner, which includes a dwelling occupied
as a homestead by a shareholder of a corporation that owns the resort, a partner in a
partnership that owns the resort, or a member of a limited liability company that owns
the resort even if the title to the homestead is held by the corporation, partnership, or
limited liability company. For purposes of this clause, property is devoted to a commercial
purpose on a specific day if any portion of the property, excluding the portion used
exclusively as a homestead, is used for residential occupancy and a fee is charged for
residential occupancy. Class 1c property 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. Class
1c property must provide recreational activities such as the rental of ice fishing houses,
boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing tackle. Any unit in
which the right to use the property is transferred to an individual or entity by deeded
interest, or the sale of shares or stock, no longer qualifies for class 1c even though it may
remain available for rent. A camping pad offered for rent by a property that otherwise
qualifies for class 1c is also class 1c, regardless of the term of the rental agreement, as
long as the use of the camping pad does not exceed 250 days. If an owner of property
that had been classified as class 1c ceases to use that property as a homestead but retains
ownership of that property and continues to operate it as a resort, and begins to occupy
a second property that is located in the same township as the original class 1c property,
both properties will be assessed as a single class 1c property, provided that the second
property would separately qualify to be assessed as class 1c property. The portion of the
property used as a homestead is class 1a property under paragraph (a). The remainder
of the property is classified as follows: the first $600,000 of market value is tier I, the
next $1,700,000 of market value is tier II, and any remaining market value is tier III.
The class rates for class 1c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III,
1.25 percent. Owners of real and personal property devoted to temporary and seasonal
residential occupancy for recreation purposes in which all or a portion of the property
was devoted to commercial purposes for not more than 250 days in the year preceding
the year of assessment desiring classification as class 1c, 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 as class
1c as otherwise provided. The remainder of the cabins or units and a proportionate share
of the land on which they are located must be designated as class 3a commercial. The
owner of property desiring designation as class 1c property must provide guest registers or
other records demonstrating that the units for which class 1c 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 1c.
    (d) Class 1d property includes structures that meet all of the following criteria:
    (1) the structure is located on property that is classified as agricultural property under
section 273.13, subdivision 23;
    (2) the structure is occupied exclusively by seasonal farm workers during the time
when they work on that farm, and the occupants are not charged rent for the privilege of
occupying the property, provided that use of the structure for storage of farm equipment
and produce does not disqualify the property from classification under this paragraph;
    (3) the structure meets all applicable health and safety requirements for the
appropriate season; and
    (4) the structure is not salable as residential property because it does not comply
with local ordinances relating to location in relation to streets or roads.
    The market value of class 1d property has the same class rates as class 1a property
under paragraph (a).
EFFECTIVE DATE.This section is effective for taxes levied in 2010, payable
in 2011, and thereafter.

    Sec. 14. Minnesota Statutes 2009 Supplement, 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 class 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 net class rate
of 0.5 percent of market value. The remaining property over the first tier has a class 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 net class rate of one percent of
market value, unless it is part of an agricultural homestead under paragraph (a). Class
2a property must also include any property that would otherwise be classified as 2b,
but is interspersed with class 2a property, including but not limited to sloughs, wooded
wind shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback
requirement, and other similar land that is impractical for the assessor to value separately
from the rest of the property or that is unlikely to be able to be sold separately from
the rest of the property.
    An assessor may classify the part of a parcel described in this subdivision that is used
for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
    (c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
that are unplatted real estate, rural in character and not used for agricultural purposes,
including land used for growing trees for timber, lumber, and wood and wood products,
that is not improved with a structure. The presence of a minor, ancillary nonresidential
structure as defined by the commissioner of revenue does not disqualify the property from
classification under this paragraph. Any parcel of 20 acres or more improved with a
structure that is not a minor, ancillary nonresidential structure must be split-classified, and
ten acres must be assigned to the split parcel containing the structure. Class 2b property
has a net class 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 class 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 contiguous acreage of ten
acres or more, used during the preceding year for agricultural purposes. "Agricultural
purposes" as used in this section means the raising, cultivation, drying, or storage of
agricultural products for sale, or the storage of machinery or equipment used in support
of agricultural production by the same farm entity. For a property to be classified as
agricultural based only on the drying or storage of agricultural products, the products
being dried or stored must have been produced by the same farm entity as the entity
operating the drying or storage facility. "Agricultural purposes" also includes enrollment
in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal
Conservation Reserve Program as contained in Public Law 99-198 or a similar state
or federal conservation program if the property was classified as agricultural (i) under
this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment.
Agricultural classification shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same ownership.
    (f) Real estate of less than ten acres, which is exclusively or intensively used for
raising or cultivating agricultural products, shall be considered as agricultural land. To
qualify under this paragraph, property that includes a residential structure must be used
intensively for one of the following purposes:
    (i) for drying or storage of grain or storage of machinery or equipment 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 to produce nursery stock are
considered agricultural land;
    (iii) for livestock or poultry confinement, provided that land that is used only for
pasturing and grazing does not qualify; or
    (iv) for 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.
    (g) Land shall be classified as agricultural even if all or a portion of the agricultural
use of that property is the leasing to, or use by another person for agricultural purposes.
    Classification under this subdivision is not determinative for qualifying under
section 273.111.
    (h) The property classification under this section supersedes, for property tax
purposes only, any locally administered agricultural policies or land use restrictions that
define minimum or maximum farm acreage.
    (i) The term "agricultural products" as used in this subdivision includes production
for sale of:
    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
bees, and apiary products by the owner;
    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
for agricultural use;
    (3) the commercial boarding of horses, which may include related horse training
and riding instruction, if the boarding is done in conjunction with 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 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 class 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 class rate of one percent of market
value. To qualify for classification under this paragraph, the property must be at least
ten contiguous acres in size and the owner of the property must record with the county
recorder of the county in which the property is located an affidavit containing:
    (1) a legal description of the property;
    (2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;
    (3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and
    (4) documentation that a permit has been issued by the local unit of government
or the mining activity is allowed under local ordinance. The disclosure must include a
statement from a registered professional geologist, engineer, or soil scientist delineating
the deposit and certifying that it is a commercial aggregate deposit.
    For purposes of this section and section 273.1115, "commercial aggregate deposit"
means a deposit that will yield crushed stone or sand and gravel that is suitable for use
as a construction aggregate; and "actively mined" means the removal of top soil and
overburden in preparation for excavation or excavation of a commercial deposit.
    (n) When any portion of the property under this subdivision or subdivision 22 begins
to be actively mined, the owner must file a supplemental affidavit within 60 days from
the day any aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively being mined must be (1) valued and classified
under subdivision 24 in the next subsequent assessment year, and (2) removed from the
aggregate resource preservation property tax program under section 273.1115, if the
land was enrolled in that program. Copies of the original affidavit and all supplemental
affidavits must be filed with the county assessor, the local zoning administrator, and the
Department of Natural Resources, Division of Land and Minerals. A supplemental
affidavit must be filed each time a subsequent portion of the property is actively mined,
provided that the minimum acreage change is five acres, even if the actual mining activity
constitutes less than five acres.
(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
in section 14.386 concerning exempt rules do not apply.
EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
thereafter.

    Sec. 15. Minnesota Statutes 2009 Supplement, 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 class rate of 1.25 percent.
    (b) Class 4b includes:
    (1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;
    (2) manufactured homes not classified under any other provision;
    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
farm classified under subdivision 23, paragraph (b) containing two or three units; and
    (4) unimproved property that is classified residential as determined under subdivision
33.
    The market value of class 4b property has a class rate of 1.25 percent.
    (c) Class 4bb includes:
    (1) nonhomestead residential real estate containing one unit, other than seasonal
residential recreational property; and
    (2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b).
    Class 4bb property has the same class 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 temporary and seasonal residential occupancy for recreation purposes,
including real and personal property devoted to temporary and seasonal residential
occupancy for recreation purposes and not devoted to commercial purposes for 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. Class 4c property
under this clause must provide recreational activities such as renting ice fishing houses,
boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing tackle. 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 as
class 4c, seasonal residential recreational for commercial purposes under this clause, 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 (i) 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 (ii) at least 20 percent of the annual gross receipts must be from charges for
rental of fish houses, boats and motors, snowmobiles, downhill or cross-country ski
equipment, or charges for marina services, launch services, and guide services, or the
sale of bait and fishing tackle. For purposes of this determination, a paid booking of
five or more nights shall be counted as two bookings. Class 4c property classified under
this clause 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. Owners of real and personal property
devoted to temporary and seasonal residential occupancy for recreation purposes and all
or a portion of which was devoted to commercial purposes for not more than 250 days in
the year preceding the year of assessment desiring classification as class 4c, 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;
    (2) qualified property used as a golf course if:
    (i) it is open to the public on a daily fee basis. It may charge membership fees or
dues, but a membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically charged by
municipal courses; and
    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
with the golf course is classified as class 3a property;
    (3) real property up to a maximum of three acres of land owned and used by a
nonprofit community service oriented organization and not used for residential purposes
on either a temporary or permanent basis, provided that:
    (i) the property is not used for a revenue-producing activity for more than six days
in the calendar year preceding the year of assessment; or
    (ii) the organization makes annual charitable contributions and donations at least
equal to the property's previous year's property taxes and the property is allowed to be
used for public and community meetings or events for no charge, as appropriate to the
size of the facility.
    For purposes of this clause,
    (A) "charitable contributions and donations" has the same meaning as lawful
gambling purposes under section 349.12, subdivision 25, excluding those purposes
relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
    (B) "property taxes" excludes the state general tax;
    (C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
Revenue Code; and
    (D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.
Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use
of the property for social events open exclusively to members and their guests for periods
of less than 24 hours, when an admission is not charged nor any revenues are received by
the organization shall not be considered a revenue-producing activity.
    The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the
requirement under item (ii) must file an application by May 1 with the assessor for
eligibility for the current year's assessment. The commissioner shall prescribe a uniform
application form and instructions;
    (4) postsecondary student housing of not more than one acre of land that is owned by
a nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;
    (5)(i) manufactured home parks as defined in section 327.14, subdivision 3,
excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii)
manufactured home parks as defined in section 327.14, subdivision 3, that are described in
section 273.124, subdivision 3a;
    (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: (A) is located on a lake
as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
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 subitem (B). 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; and
(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.
    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
parcel of seasonal residential recreational property not used for commercial purposes
has the same class rates as class 4bb property, (ii) manufactured home parks assessed
under clause (5), item (i), have the same class rate as class 4b property, and the market
value of manufactured home parks assessed under clause (5), item (ii), has the same class
rate as class 4d property if more than 50 percent of the lots in the park are occupied by
shareholders in the cooperative corporation or association and a class rate of one percent if
50 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential
recreational property and marina recreational land as described in clause (11), has a
class 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
class rate of one percent, (v) the market value of property described in clauses (2), (6), and
(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property
in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
of the units in the building qualify as low-income rental housing units as certified under
section 273.128, subdivision 3, only the proportion of qualifying units to the total number
of units in the building qualify for class 4d. The remaining portion of the building shall be
classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units in the building.
For all properties qualifying as class 4d, the market value determined by the assessor must
be based on the normal approach to value using normal unrestricted rents.
    Class 4d property has a class rate of 0.75 percent.
EFFECTIVE DATE.This section is effective for taxes levied in 2010, payable in
2011 and thereafter.

    Sec. 16. Minnesota Statutes 2009 Supplement, 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, county, school district, regional library
authority established under section 134.201, and metropolitan taxing districts as defined in
paragraph (i), the time and place of the taxing authorities' regularly scheduled meetings in
which the budget and levy will be discussed and the final budget and levy determined,
which must occur after November 24. 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 the meetings
and the meetings shall 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, net of the residential and agricultural homestead credit under section 273.1384, voter
approved school levy, other local school levy, and the sum of the special taxing districts,
and as a total of all taxing authorities:
    (i) the actual tax for taxes payable in the current year; and
    (ii) the proposed tax amount.
    If the county levy under clause (2) includes an amount for a lake improvement
district as defined under sections 103B.501 to 103B.581, the amount attributable for that
purpose must be separately stated from the remaining county levy amount.
    In the case of a town or the state general tax, the final tax shall also be its proposed
tax unless the town changes its levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision 9, that a referendum will
be held in the school district at the November general election, the county auditor must
note next to the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the notice. In the
case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
listed separately from the remaining amount of the city's levy. In the case of the city of
St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In the case of Ramsey County, any amount levied
under section 134.07 may be listed separately from the remaining amount of the county's
levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide tax must each be stated
separately and not included in the sum of the special taxing districts; and
    (3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage.
    For purposes of this section, the amount of the tax on homesteads qualifying under
the senior citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.
    (e) The notice must clearly state that the proposed or final taxes do not include
the following:
    (1) special assessments;
    (2) levies approved by the voters after the date the proposed taxes are certified,
including bond referenda and school district levy referenda;
    (3) a levy limit increase approved by the voters by the first Tuesday after the first
Monday in November of the levy year as provided under section 275.73;
    (4) amounts necessary to pay cleanup or other costs due to a natural disaster
occurring after the date the proposed taxes are certified;
    (5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and
    (6) the contamination tax imposed on properties which received market value
reductions for contamination.
    (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
the county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.
    (g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.
    (h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:
    (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
renter, or lessee; or
    (2) post a copy of the notice in a conspicuous place on the premises of the property.
    The notice must be mailed or posted by the taxpayer by November 27 or within
three days of receipt of the notice, whichever is later. A taxpayer may notify the county
treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
which the notice must be mailed in order to fulfill the requirements of this paragraph.
    (i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:
    (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
473.446, 473.521, 473.547, or 473.834;
    (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
and
    (3) Metropolitan Mosquito Control Commission under section 473.711.
    For purposes of this section, any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy.
    (j) The governing body of a county, city, or school district may, with the consent
of the county board, include supplemental information with the statement of proposed
property taxes about the impact of state aid increases or decreases on property tax
increases or decreases and on the level of services provided in the affected jurisdiction.
This supplemental information may include information for the following year, the current
year, and for as many consecutive preceding years as deemed appropriate by the governing
body of the county, city, or school district. It may include only information regarding:
    (1) the impact of inflation as measured by the implicit price deflator for state and
local government purchases;
    (2) population growth and decline;
    (3) state or federal government action; and
    (4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.
    The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.
EFFECTIVE DATE.This section is effective for notices prepared in 2010, for
taxes payable in 2011 and thereafter.

    Sec. 17. Minnesota Statutes 2008, section 275.71, subdivision 4, is amended to read:
    Subd. 4. Adjusted levy limit base. For taxes levied in 2008 through 2010, the
adjusted levy limit base is equal to the levy limit base computed under subdivision 2
or section 275.72, multiplied by:
    (1) one plus the lesser of 3.9 percent or the percentage growth in the implicit price
deflator, but the percentage shall not be less than zero or exceed 3.9 percent;
    (2) one plus a percentage equal to 50 percent of the percentage increase in the number
of households, if any, for the most recent 12-month period for which data is available; and
    (3) one plus a percentage equal to 50 percent of the percentage increase in the
taxable market value of the jurisdiction due to new construction of class 3 property, as
defined in section 273.13, subdivision 4, except for state-assessed utility and railroad
property, for the most recent year for which data is available.
EFFECTIVE DATE.This section is effective for taxes levied in 2010 and thereafter.

    Sec. 18. Minnesota Statutes 2008, section 275.75, is amended to read:
275.75 CHARTER EXEMPTION FOR AID LOSS.
Notwithstanding any other provision of a municipal charter that limits ad valorem
taxes to a lesser amount, or that would require voter approval for any increase, the
governing body of a municipality may by resolution increase its levy for taxes payable in
2004 and 2005 only by an amount equal to the reduction in the amount of aid it is certified
to receive under sections 477A.011 to 477A.03 for that same payable year compared to
the amount certified for payment in 2003 in any year by an amount equal to its special
levies under section 275.70, subdivision 5, clauses 22 and 25.
EFFECTIVE DATE.This section is effective for levies payable in calendar year
2011 and thereafter.

    Sec. 19. Minnesota Statutes 2008, section 276.02, is amended to read:
276.02 TREASURER TO BE COLLECTOR.
The county treasurer shall collect all taxes extended on the tax lists of the county
and the fines, forfeitures, or penalties received by any person or officer for the use of
the county. The treasurer shall collect the taxes according to law and credit them to the
proper funds. This section does not apply to fines and penalties accruing to municipal
corporations for the violation of their ordinances that are recoverable before a city justice.
Taxes, fines, interest, and penalties must be paid with United States currency or by check
or, money order, or electronic payments, including, but not limited to, automated clearing
house transactions and federal wires drawn on a bank or other financial institution in the
United States. The county board may by resolution authorize the treasurer to impose a
charge for any dishonored checks or electronic payments. The charges for dishonored
payment of property taxes may be added to the tax, shall constitute a lien on the property,
and when collected shall be distributed to the county.
The county board may, by resolution, authorize the treasurer and/or other designees
to accept payments of real property taxes by credit card provided that a fee is charged for
its use. The fee charged must be commensurate with the costs assessed by the card issuer.
If a credit card transaction under this section is subsequently voided or otherwise reversed,
the lien of real property taxes under section 272.31 is revived and attaches in the manner
and time provided in that section as though the credit card transaction had never occurred,
and the voided or reversed credit card transaction shall not impair the right of a lienholder
under section 272.31 to enforce the lien in its favor.
EFFECTIVE DATE.This section is effective for property taxes payable in 2011
and thereafter.

    Sec. 20. Minnesota Statutes 2009 Supplement, section 279.01, subdivision 1, is
amended to read:
    Subdivision 1. Due dates; penalties. Except as provided in subdivision 3 or 4, on
May 16 or 21 days after the postmark date on the envelope containing the property tax
statement, whichever is later, a penalty accrues and thereafter is charged upon all unpaid
taxes on real estate on the current lists in the hands of the county treasurer. The penalty is
at a rate of two percent on homestead property until May 31 and four percent on June 1.
The penalty on nonhomestead property is at a rate of four percent until May 31 and eight
percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days after
the postmark date on the envelope containing the property tax statements, whichever is
later, on commercial use real property used for seasonal residential recreational purposes
and classified as class 1c or 4c, and on other commercial use real property classified as
class 3a, provided that over 60 percent of the gross income earned by the enterprise on the
class 3a property is earned during the months of May, June, July, and August. In order for
the first half of the tax due on class 3a property to be paid after May 15 and before June 1,
or 21 days after the postmark date on the envelope containing the property tax statement,
whichever is later, without penalty, the owner of the property must attach an affidavit to the
payment attesting to compliance with the income provision of this subdivision. Thereafter,
for both homestead and nonhomestead property, on the first day of each month beginning
July 1, up to and including October 1 following, an additional penalty of one percent for
each month accrues and is charged on all such unpaid taxes provided that if the due date
was extended beyond May 15 as the result of any delay in mailing property tax statements
no additional penalty shall accrue if the tax is paid by the extended due date. If the tax is
not paid by the extended due date, then all penalties that would have accrued if the due
date had been May 15 shall be charged. When the taxes against any tract or lot exceed
$250 $100, one-half thereof may be paid prior to May 16 or 21 days after the postmark
date on the envelope containing the property tax statement, whichever is later; and, if so
paid, no penalty attaches; the remaining one-half may be paid at any time prior to October
16 following, without penalty; but, if not so paid, then a penalty of two percent accrues
thereon for homestead property and a penalty of four percent on nonhomestead property.
Thereafter, for homestead property, on the first day of November an additional penalty of
four percent accrues and on the first day of December following, an additional penalty of
two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead
property, on the first day of November and December following, an additional penalty of
four percent for each month accrues and is charged on all such unpaid taxes. If one-half of
such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope
containing the property tax statement, whichever is later, the same may be paid at any time
prior to October 16, with accrued penalties to the date of payment added, and thereupon
no penalty attaches to the remaining one-half until October 16 following.
    This section applies to payment of personal property taxes assessed against
improvements to leased property, except as provided by section 277.01, subdivision 3.
    A county may provide by resolution that in the case of a property owner that has
multiple tracts or parcels with aggregate taxes exceeding $250 $100, payments may be
made in installments as provided in this subdivision.
    The county treasurer may accept payments of more or less than the exact amount of
a tax installment due. Payments must be applied first to the oldest installment that is due
but which has not been fully paid. If the accepted payment is less than the amount due,
payments must be applied first to the penalty accrued for the year or the installment being
paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
payment required as a condition for filing an appeal under section 278.03 or any other law,
nor does it affect the order of payment of delinquent taxes under section 280.39.
EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
thereafter.

    Sec. 21. Minnesota Statutes 2008, section 279.025, is amended to read:
279.025 PAYMENT OF DELINQUENT PROPERTY TAXES, SPECIAL
ASSESSMENTS.
Payment of delinquent property tax and related interest and penalties and special
assessments shall be paid with United States currency or by check or, money order, or
electronic means, including, but not limited to, automated clearing house transactions and
federal wires drawn on a bank or other financial institution in the United States.
EFFECTIVE DATE.This section is effective for property taxes payable in 2011
and thereafter.

    Sec. 22. Minnesota Statutes 2008, section 428A.12, is amended to read:
428A.12 PETITION REQUIRED.
No action may be taken under sections 428A.13 and 428A.14 unless owners of
25 50 percent or more of the housing units that would be subject to fees in the proposed
housing improvement area file a petition requesting a public hearing on the proposed
action with the city clerk. No action may be taken under section 428A.14 to impose a fee
unless owners of 25 50 percent or more of the housing units subject to the proposed
fee file a petition requesting a public hearing on the proposed fee with the city clerk or
other appropriate official.
EFFECTIVE DATE.This section is effective for petitions filed beginning July
1, 2010.

    Sec. 23. Minnesota Statutes 2008, section 428A.18, subdivision 2, is amended to read:
    Subd. 2. Requirements for veto. If residents of 35 45 percent or more of the
housing units in the area subject to the fee file an objection to the ordinance adopted by the
city under section 428A.13 with the city clerk before the effective date of the ordinance,
the ordinance does not become effective. If owners of 35 45 percent or more of the housing
units' tax capacity subject to the fee under section 428A.14 file an objection with the city
clerk before the effective date of the resolution, the resolution does not become effective.
EFFECTIVE DATE.This section is effective beginning July 1, 2010.

    Sec. 24. Minnesota Statutes 2008, section 473H.05, subdivision 1, is amended to read:
    Subdivision 1. Before March June 1 for next year's taxes. An owner or owners
of certified long-term agricultural land may apply to the authority with jurisdiction over
the land on forms provided by the commissioner of agriculture for the creation of an
agricultural preserve at any time. Land for which application is received prior to March
June 1 of any year shall be assessed pursuant to section 473H.10 for taxes payable in the
following year. Land for which application is received on or after March June 1 of any
year shall be assessed pursuant to section 473H.10 in the following year. The application
shall be executed and acknowledged in the manner required by law to execute and
acknowledge a deed and shall contain at least the following information and such other
information as the commissioner deems necessary:
(a) Legal description of the area proposed to be designated and parcel identification
numbers if so designated by the county auditor and the certificate of title number if the
land is registered;
(b) Name and address of owner;
(c) An affidavit by the authority evidencing that the land is certified long-term
agricultural land at the date of application;
(d) A statement by the owner covenanting that the land shall be kept in agricultural
use, and shall be used in accordance with the provisions of sections 473H.02 to 473H.17
which exist on the date of application and providing that the restrictive covenant shall be
binding on the owner or the owner's successor or assignee, and shall run with the land.
EFFECTIVE DATE.This section is effective the day following final enactment,
except that in 2010 the application date in this section shall be extended to August 1.

    Sec. 25. Minnesota Statutes 2008, section 477A.17, is amended to read:
477A.17 LAKE VERMILION STATE PARK AND SOUDAN
UNDERGROUND MINE STATE PARK; ANNUAL PAYMENTS.
    (a) Beginning in fiscal year 2010 2012, in lieu of the payment amount provided under
section 477A.12, subdivision 1, clause (1), the county shall receive an annual payment for
land acquired for Lake Vermilion State Park, established in section 85.012, subdivision
38a, and land within the boundary of Soudan Underground Mine State Park, established in
section 85.012, subdivision 53a, equal to 1.5 percent of the appraised value of the land.
    (b) For the purposes of this section, the appraised value of the land acquired for
Lake Vermilion 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.
The appraised value must be redetermined by the county assessor every five years after
the land is acquired.
    (c) The annual payments under this section shall be distributed to the taxing
jurisdictions containing the property as follows: one-third to the school districts; one-third
to the town; and one-third to the county. The payment to school districts is not a county
apportionment under section 127A.34 and is not subject to aid recapture. Each of those
taxing jurisdictions may use the payments for their general purposes.
    (d) Except as provided in this section, the payments shall be made as provided
in sections 477A.11 to 477A.13.

    Sec. 26. Laws 2009, chapter 88, article 2, section 49, is amended to read:
    Sec. 49. TAX ABATEMENT; NEWLY CONSTRUCTED RESIDENTIAL
STRUCTURES IN FLOOD-DAMAGED CITIES.
    Subdivision 1. Eligibility. A residential structure qualifies for a tax abatement
under this section if:
(1) the structure is located in a city that is eligible to designate a development zone
under Minnesota Statutes, section 469.1731;
(2) the structure is located in a county designated as an emergency area under
presidential declaration FEMA-3304-EM;
(3) the structure is located on property classified as class 1a, 1b, 2a, 4a, 4b, 4bb, or
4d under Minnesota Statutes, section 273.13;
(4) no part of the structure was in existence prior to January 1, 2009, unless (i) the
structure is located on property classified as 1a, 1b, 2a, 4b, or 4bb; (ii) a building permit
was issued and construction commenced in 2008; and (iii) as of March 26, 2009, the
property was owned by the original builder, was not subject to any form of purchase
contract or agreement, and had never been occupied; and
(5) construction of the structure is commenced prior to December 31, 2010 2011.
For the purposes of this clause, construction is deemed to have been commenced if a
proper building permit has been issued and the mandatory footing or foundation inspection
has been completed.
    Subd. 2. Application. Application for the abatement authorized under this section
must be filed by January 2 of the year following the year in which construction began,
except that those qualifying structures for which construction commenced in 2008 must
file an application no later than January 2, 2010, for assessment years 2010 and 2011. The
application must be filed with the assessor of the county or city in which the property is
located on a form prescribed by the commissioner of revenue.
    Subd. 3. Tax abated. (a) For a property qualifying under subdivision 1 and
classified as either 1a, 1b, 2a, 4b, or 4bb, the tax attributable to (1) $200,000 of market
value, or (2) the entire market value of the structure, whichever is less, shall be abated.
For a property qualifying under subdivision 1 and classified as class 4a or 4d, the tax
attributable to (1) $20,000 of market value per residential unit, or (2) the entire market
value of the structure, whichever is less, shall be abated.
(b) The abatement under paragraph (a) shall be in effect for two taxes payable years,
corresponding to the two assessment years after construction has begun. The abatement
shall not apply to any special assessments that have been levied against the property.
    Subd. 4. Reimbursement. By May 1 of each taxes payable year in which an
abatement has been authorized under this section, the auditor shall report the amount of
taxes abated for each jurisdiction within the county to the commissioner of revenue, on a
form prescribed by the commissioner. On or before September 1 of each taxes payable
year in which an abatement has been authorized under this section, the commissioner of
revenue shall reimburse each local jurisdiction for the amount of taxes abated for the
year under this section.
    Subd. 5. Appropriation. The amount necessary to make the reimbursements
required under this section is annually appropriated to the commissioner of revenue from
the general fund.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 27. Laws 2009, chapter 88, article 2, section 49, the effective date, is amended to
read:
EFFECTIVE DATE.This section is effective for assessment years 2010 to 2012
2013, for taxes payable in 2011 to 2013 2014.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 28. FISCAL DISPARITIES STUDY.
The commissioner of revenue shall conduct a study of the metropolitan revenue
distribution program contained in Minnesota Statutes, chapter 473F, commonly known
as the fiscal disparities program. By February 1, 2012, the commissioner shall submit a
report to the chairs and ranking minority members of the house of representatives and
senate tax committees consisting of the findings of the study and identification of issues
for policy makers to consider. The study must analyze:
(1) the extent to which the benefits of economic growth of the region are shared
throughout the region, especially for growth that results from state or regional decisions;
(2) the program's impact on the variability of tax rates across jurisdictions of the
region;
(3) the program's impact on the distribution of homestead property tax burdens
across jurisdictions of the region; and
(4) the relationship between the impacts of the program and overburden on
jurisdictions containing properties that provide regional benefits, specifically the costs
those properties impose on their host jurisdictions in excess of their tax payments.
The report must include a description of other property tax, aid, and local
development programs that interact with the fiscal disparities program.
EFFECTIVE DATE.This section is effective January 1, 2011.

    Sec. 29. FUND TRANSFER FROM FISCAL DISPARITIES LEVY.
For taxes payable in 2011 only, the Metropolitan Council must certify to the Ramsey
County auditor the amount of $100,000, to be certified by the Ramsey County auditor to
the administrative auditor as an addition to the Metropolitan Council's areawide levy
under Minnesota Statutes, section 473F.08, subdivision 5. Upon receipt of the proceeds
of this levy, the Metropolitan Council must transfer this money to the commissioner of
management and budget for deposit into the general fund. One-half of the proceeds of the
levy must be transferred prior to June 30, 2011.

    Sec. 30. THIEF RIVER FALLS AIRPORT AUTHORITY; SPECIAL LEVY
AUTHORITY.
If an airport authority is established under Minnesota Statutes, section 360.042, that
includes the city of Thief River Falls within its boundaries, the authority may exercise
its levy authority through a levy on the referendum market value of the area, as defined
in Minnesota Statutes, section 126C.01, subdivision 3, in lieu of a levy on the net tax
capacity of the area. If an authority exercises its option under this section, the intent to do
so must be stated in the joint agreement establishing the authority.
EFFECTIVE DATE.This section is effective the day following final enactment,
without local approval, as provided by Minnesota Statutes, section 654.023, subdivision 1,
paragraph (a).

    Sec. 31. CITY OF ST. CHARLES; ADDITIONAL AID, 2010 ONLY.
$50,000 is appropriated in fiscal year 2011 from the general fund to the commissioner
of revenue to make a payment to the city of St. Charles to compensate the city for a loss of
a major manufacturing facility in the city due to a fire in April 2009. The payment shall be
made with the December 2010 payment under Minnesota Statutes, section 477A.015.

    Sec. 32. APPROPRIATION.
The sum of $50,000 in fiscal year 2011 and $50,000 in fiscal year 2012 is
appropriated from the general fund to the commissioner of revenue to pay for the study
required under section 28. These are onetime appropriations.

ARTICLE 2
PROPERTY TAX REFORM, ACCOUNTABILITY, VALUE, AND
EFFICIENCY PROVISIONS

    Section 1. [6.90] COUNCIL ON LOCAL RESULTS AND INNOVATION.
    Subdivision 1. Creation. The Council on Local Results and Innovation consists of
11 members, as follows:
(1) the state auditor;
(2) two persons appointed by the chair of the Property and Local Sales Tax Division
of the house of representatives Taxes Committee;
(3) two persons appointed by the designated lead member of the largest minority
party of the Property and Local Sales Tax Division of the house of representatives Taxes
Committee;
(4) four persons appointed by the Subcommittee on Committees of the Senate Rules
and Administration Committee;
(5) one person appointed by the Association of Minnesota Counties; and
(6) one person appointed by the League of Minnesota Cities.
Each appointment under clauses (2) to (4) must include one person with expertise
or interest in county government and one person with expertise or interest in city
government. No members appointed under clauses (2) to (4) may be members of the
legislature. The appointing authorities must use their best efforts to ensure that a majority
of council members have experience with local performance measurement systems. The
membership of the council must include geographically balanced representation as well as
representation balanced between large and small jurisdictions. The appointments under
clauses (2) to (6) must be made within two months of the date of enactment.
Appointees to the council under clauses (2) to (4) serve terms of four years, except
that one of each of the initial appointments under clauses (2) to (4) shall serve a term of
two years; each appointing agent must designate which appointee is serving the two-year
term. Subsequent appointments for members appointed under clauses (2) to (4) must
be made by the council, including appointments to replace any appointees who might
resign from the council prior to completion of their term. Appointees under clauses (2) to
(4) are not eligible to vote on appointing their successor, nor on the successors of other
appointees whose terms are expiring contemporaneously. In making appointments, the
council shall make all possible efforts to reflect the geographical distribution and meet the
qualifications of appointees required of the initial appointees. Subsequent appointments
for members appointed under clauses (5) and (6) must be made by the original appointing
authority. Appointees to the council under clauses (2) to (6) may serve no more than two
consecutive terms.
    Subd. 2. Duties. (a) By February 15, 2011, the council shall develop a standard
set of approximately ten performance measures for counties and ten performance
measures for cities that will aid residents, taxpayers, and state and local elected officials
in determining the efficacy of counties and cities in providing services, and measure
residents' opinions of those services. In developing its measures, the council must solicit
input from private citizens. Counties and cities that elect to participate in the standard
measures system shall report their results to the state auditor under section 6.91, who
shall compile the results and make them available to all interested parties by publishing
them on the auditor's Web site and report them to the legislative tax committees. Each
year after the initial designation of performance measures, the council shall evaluate the
usefulness of the standard set of performance measures and may revise the set by adding
or removing measures as it deems appropriate.
(b) By February 15, 2012, the council shall develop minimum standards for
comprehensive performance measurement systems, which may vary by size and type
of governing jurisdiction.
(c) In addition to its specific duties under paragraphs (a) and (b), the council
shall generally promote the use of performance measurement for governmental entities
across the state and shall serve as a resource for all governmental entities seeking to
implement a system of local performance measurement. The council may highlight and
promote systems that are innovative, or are ones that it deems to be best practices of local
performance measurement systems across the state and nation. The council should give
preference in its recommendations to systems that are results-oriented. The council may,
with the cooperation of the state auditor, establish and foster a collaborative network
of practitioners of local performance measurement systems. The council may support
the Association of Minnesota Counties and the League of Minnesota Cities to seek and
receive private funding to provide expert technical assistance to local governments for
the purposes of replicating best practices.
    Subd. 3. Reports. (a) The council shall report its initial set of standard performance
measures to the Property and Local Sales Tax Division of the house of representatives
Taxes Committee and the Taxes Division on Property Taxes of the senate Taxes Committee
by February 28, 2011.
(b) By February 1 of each subsequent year, the council shall report to the committees
with jurisdiction over taxes in the house of representatives and the senate on participation
in and results of the performance measurement system, along with any revisions in the
standard set of performance measures for the upcoming year. These reports may be made
by the state auditor in lieu of the council if agreed to by the auditor and the council.
    Subd. 4. Operation of council. (a) The state auditor shall convene the initial
meeting of the council.
(b) The chair of the council shall be elected by the members. Once elected, a chair
shall serve a term of two years.
(c) Members of the council serve without compensation.
(d) Council members shall share and rotate responsibilities for administrative
support of the council.
(e) Chapter 13D does not apply to meetings of the council. Meetings of the council
must be open to the public and the council must provide notice of a meeting on the state
auditor's Web site at least seven days before the meeting. A meeting of the council occurs
when a quorum is present.
(f) The council must meet at least two times prior to the initial release of the standard
set of measurements. After the initial set has been developed, the council must meet a
minimum of once per year.
    Subd. 5. Termination. The council expires on January 1, 2020.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. [6.91] LOCAL PERFORMANCE MEASUREMENT AND REPORTING.
    Subdivision 1. Reports of local performance measures. (a) A county or city
that elects to participate in the standard measures program must report its results to its
citizens annually through publication, direct mailing, posting on the jurisdiction's Web
site, or through a public hearing at which the budget and levy will be discussed and public
input allowed.
(b) Each year, jurisdictions participating in the local performance measurement
and improvement program must file a report with the state auditor by July 1, in a form
prescribed by the auditor. All reports must include a declaration that the jurisdiction has
complied with, or will have complied with by the end of the year, the requirement in
paragraph (a). For jurisdictions participating in the standard measures program, the report
shall consist of the jurisdiction's results for the standard set of performance measures
under section 6.90, subdivision 2, paragraph (a). In 2012, jurisdictions participating in the
comprehensive performance measurement program must submit a resolution approved by
its local governing body indicating that it either has implemented or is in the process of
implementing a local performance measurement system that meets the minimum standards
specified by the council under section 6.90, subdivision 2, paragraph (b). In 2013 and
thereafter, jurisdictions participating in the comprehensive performance measurement
program must submit a statement approved by its local governing body affirming that
it has implemented a local performance measurement system that meets the minimum
standards specified by the council under section 6.90, subdivision 2, paragraph (b).
    Subd. 2. Benefits of participation. (a) A county or city that elects to participate in
the standard measures program for 2011 is: (1) eligible for per capita reimbursement of
$0.14 per capita, but not to exceed $25,000 for any government entity; and (2) exempt
from levy limits under sections 275.70 to 275.74 for taxes payable in 2012, if levy limits
are in effect.
(b) Any county or city that elects to participate in the standard measures program
for 2012 is eligible for per capita reimbursement of $0.14 per capita, but not to exceed
$25,000 for any government entity. Any jurisdiction participating in the comprehensive
performance measurement program is exempt from levy limits under sections 275.70 to
275.74 for taxes payable in 2013 if levy limits are in effect.
(c) Any county or city that elects to participate in the standard measures program for
2013 or any year thereafter is eligible for per capita reimbursement of $0.14 per capita,
but not to exceed $25,000 for any government entity. Any jurisdiction participating in
the comprehensive performance measurement program for 2013 or any year thereafter is
exempt from levy limits under sections 275.70 to 275.74 for taxes payable in the following
year, if levy limits are in effect.
    Subd. 3. Certification of participation. (a) The state auditor shall certify to
the commissioner of revenue by August 1 of each year the counties and cities that are
participating in the standard measures program and the comprehensive performance
measurement program.
(b) The commissioner of revenue shall make per capita aid payments under this
section on the second payment date specified in section 477A.015, in the same year that
the measurements were reported.
(c) The commissioner of revenue shall notify each county and city that is entitled to
exemption from levy limits by August 10 of each levy year.
    Subd. 4. Appropriation. (a) The amount necessary to fund obligations under
subdivision 2 is annually appropriated from the general fund to the commissioner of
revenue.
(b) The sum of $6,000 in fiscal year 2011 and $2,000 in each fiscal year thereafter is
annually appropriated from the general fund to the state auditor to carry out the auditor's
responsibilities under sections 6.90 to 6.91.
EFFECTIVE DATE.This section is effective December 31, 2010.

    Sec. 3. [270C.991] PROPERTY TAX SYSTEM BENCHMARKS AND
CRITICAL INDICATORS.
    Subdivision 1. Purpose. State policy makers should be provided with the tools to
create a more accountable and efficient property tax system. This section provides the
principles and available tools necessary to work toward achieving that goal.
    Subd. 2. Property tax principles. To better evaluate the various property tax
proposals that come before the legislature, the following basic property tax principles
should be taken into consideration. The property taxes proposed should be:
(1) transparent and understandable;
(2) simple and efficient;
(3) equitable;
(4) stable and predictable;
(5) compliance and accountability;
(6) competitive, both nationally and globally; and
(7) responsive to economic conditions.
    Subd. 3. Major indicators. There are many different types of indicators available to
legislators to evaluate tax legislation. Indicators are useful to have available as benchmarks
when legislators are contemplating changes. Each tool has its own limitation, and no one
tool is perfect or should be used independently. Some of the tools measure the global
characteristics of the entire tax system, while others are only a measure of the property tax
impacts and its administration. The following is a list of the available major indicators:
(1) property tax principles scale, the components of which are listed in subdivision
2, as they relate to the various features of the property tax system;
(2) price of government report, as required under section 16A.102;
(3) tax incidence report, as required under section 270C.13;
(4) tax expenditure budget and report, as required under section 270C.11;
(5) state tax rankings;
(6) property tax levy plus aid data, and market value and net tax capacity data, by
taxing district for current and past years;
(7) effective tax rate (tax as a percent of market value) and the equalized effective
tax rate (effective tax rate adjusted for assessment differences);
(8) assessment sales ratio study, as required under section 127A.48;
(9) "Voss" database, which matches homeowner property taxes and household
income;
(10) revenue estimates under section 270C.11, subdivision 5, and state fiscal notes
under section 477A.03, subdivision 2b; and
(11) local impact notes under section 3.987.
    Subd. 4. Property tax working group. (a) A property tax working group is
established as provided in this subdivision. The goals of the working group are:
(1) to investigate ways to simplify the property tax system and make advisory
recommendations on ways to make the system more understandable;
(2) to reexamine the property tax calendar to determine what changes could be made
to shorten the two-year cycle from assessment through property tax collection; and
(3) to determine the cost versus the benefits of the various property tax components,
including property classifications, credits, aids, exclusions, exemptions, and abatements,
and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
(b) The 13-member working group shall consist of the following members:
(1) two state representatives, both appointed by the chair of the house of
representatives Taxes Committee, one from the majority party and one from the largest
minority party;
(2) two senators appointed by the Subcommittee on Committees of the Senate Rules
and Administration Committee, one from the majority party and one from the largest
minority party;
(3) the commissioner of revenue, or designee;
(4) one person appointed by the Association of Minnesota Counties;
(5) one person appointed by the League of Minnesota Cities;
(6) one person appointed by the Minnesota Association of Townships;
(7) one person appointed by the Minnesota Chamber of Commerce;
(8) one person appointed by the Minnesota Association of Assessing Officers;
(9) two homeowners, one who is under 65 years of age, and one who is 65 years of
age or older, both appointed by the commissioner of revenue; and
(10) one person jointly appointed by the Minnesota Farm Bureau and the Minnesota
Farmers Union.
The commissioner of revenue shall chair the initial meeting, and the working
group shall elect a chair at that initial meeting. The working group will meet at the call
of the chair. Members of the working group shall serve without compensation. The
commissioner of revenue must provide administrative support to the working group.
Chapter 13D does not apply to meetings of the working group. Meetings of the working
group must be open to the public and the working group must provide notice of a meeting
to potentially interested persons at least seven days before the meeting. A meeting of the
council occurs when a quorum is present.
(c) The working group shall make its advisory recommendations to the chairs of the
house of representatives and senate Taxes Committees on or before February 1, 2012, at
which time the working group shall be finished and this subdivision expires. The advisory
recommendations should be reviewed by the Taxes Committee under subdivision 5.
    Subd. 5. Taxes Committee review and resolution. On or before March 1,
2012, and every two years thereafter, the house of representatives and senate Taxes
Committees must review the major indicators as contained in subdivision 3, and ascertain
the accountability and efficiency of the property tax system. The house of representatives
and senate Taxes Committees shall prepare a resolution on targets and benchmarks for
use during the current biennium.
    Subd. 6. Department of Revenue; revenue estimates. As provided under
section 270C.11, subdivision 5, the Department of Revenue is required to prepare an
estimate of the effect on the state's tax revenues which result from the passage of a
legislative bill establishing, extending, or restricting a tax expenditure. Beginning
with the 2011 legislative session, those revenue estimates must also identify how the
property tax principles contained in subdivision 2 apply to the proposed tax changes. The
commissioner of revenue shall develop a scale for measuring the appropriate principles
for each proposed change. The department shall quantify the effects, if possible, or at a
minimum, shall identify the relevant factors so that legislators are aware of possible
outcomes, including administrative difficulties and cost. The interaction of property tax
shifting should be identified and quantified to the degree possible.
    Subd. 7. Appropriation. The sum of $30,000 in fiscal year 2011 and $25,000 in
each fiscal year thereafter is appropriated from the general fund to the commissioner of
revenue to carry out the commissioner's added responsibilities under subdivision 6.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 3
INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES

    Section 1. Minnesota Statutes 2008, 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 and other electing partnerships. 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.
A composite estimate may, however, be filed in a manner similar to and containing the
information required under paragraph (a).
(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 290.01, subdivision 19a, clauses (6) to (10), and the subtractions provided in: (i)
section 290.01, subdivision 19b, clause (9) (8), to the extent the amount is assignable or
allocable to Minnesota under section 290.17; and (ii) section 290.01, subdivision 19b,
clause (14) (13). The subtraction allowed under section 290.01, subdivision 19b, clause
(9) (8), is only allowed on the composite tax computation to the extent the electing partner
would have been allowed the subtraction.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2008, section 289A.09, subdivision 2, is amended to read:
    Subd. 2. Withholding statement. (a) A person required to deduct and withhold
from an employee a tax under section 290.92, subdivision 2a or 3, or 290.923, subdivision
2
, or who would have been required to deduct and withhold a tax under section 290.92,
subdivision 2a
or 3, or persons required to withhold tax under section 290.923, subdivision
2
, determined without regard to section 290.92, subdivision 19, if the employee or payee
had claimed no more than one withholding exemption, or who paid wages or made
payments not subject to withholding under section 290.92, subdivision 2a or 3, or 290.923,
subdivision 2
, to an employee or person receiving royalty payments in excess of $600,
or who has entered into a voluntary withholding agreement with a payee under section
290.92, subdivision 20, must give every employee or person receiving royalty payments in
respect to the remuneration paid by the person to the employee or person receiving royalty
payments during the calendar year, on or before January 31 of the succeeding year, or, if
employment is terminated before the close of the calendar year, within 30 days after the
date of receipt of a written request from the employee if the 30-day period ends before
January 31, a written statement showing the following:
    (1) name of the person;
    (2) the name of the employee or payee and the employee's or payee's Social Security
account number;
    (3) the total amount of wages as that term is defined in section 290.92, subdivision
1
, paragraph (1); the total amount of remuneration subject to withholding under section
290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the
Internal Revenue Code; and the amount of royalties subject to withholding under section
290.923, subdivision 2; and
    (4) the total amount deducted and withheld as tax under section 290.92, subdivision
2a
or 3, or 290.923, subdivision 2.
    (b) The statement required to be furnished by paragraph (a) with respect to any
remuneration must be furnished at those times, must contain the information required, and
must be in the form the commissioner prescribes.
    (c) The commissioner may prescribe rules providing for reasonable extensions of
time, not in excess of 30 days, to employers or payers required to give the statements to
their employees or payees under this subdivision.
    (d) A duplicate of any statement made under this subdivision and in accordance
with rules prescribed by the commissioner, along with a reconciliation in the form the
commissioner prescribes of the statements for the calendar year, including a reconciliation
of the quarterly returns required to be filed under subdivision 1, must be filed with the
commissioner on or before February 28 of the year after the payments were made.
    (e) If an employer cancels the employer's Minnesota withholding account number
required by section 290.92, subdivision 24, the information required by paragraph (d),
must be filed with the commissioner within 30 days of the end of the quarter in which
the employer cancels its account number.
    (f) The employer must submit the statements required to be sent to the commissioner
in the same manner required to satisfy the federal reporting requirements of section
6011(e) of the Internal Revenue Code and the regulations issued under it. For wages paid
in calendar year 2008, An employer must submit statements to the commissioner required
by this section by electronic means if the employer is required to send more than 100
25 statements to the commissioner, even though the employer is not required to submit
the returns federally by electronic means. For calendar year 2009, the 100 statements
threshold is reduced to 50, and for calendar year 2010, the threshold is reduced to 25, and
for statements issued for wages paid in 2011 and after, the threshold is reduced to ten.
All statements issued for withholding required under section 290.92 are aggregated for
purposes of determining whether the electronic submission threshold is met.
    (g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph
(a), clause (2), must submit the returns required by this subdivision and subdivision 1,
paragraph (a), with the commissioner by electronic means.
EFFECTIVE DATE.This section is effective for statements required to be filed
after December 31, 2010.

    Sec. 3. Minnesota Statutes 2008, section 289A.12, subdivision 14, is amended to read:
    Subd. 14. Regulated investment companies; reporting exempt-interest
dividends. (a) A regulated investment company paying $10 or more in exempt-interest
dividends to an individual who is a resident of Minnesota must make a return indicating
the amount of the exempt-interest dividends, the name, address, and Social Security
number of the recipient, and any other information that the commissioner specifies. The
return must be provided to the shareholder no later than 30 days after the close of the
taxable year by February 15 of the year following the year of the payment. The return
provided to the shareholder must include a clear statement, in the form prescribed by the
commissioner, that the exempt-interest dividends must be included in the computation of
Minnesota taxable income. The regulated investment company is required in a manner
prescribed by the commissioner to file a copy of the return with the commissioner. By
June 1 of each year, the regulated investment company must file a copy of the return
with the commissioner.
    (b) This subdivision applies to regulated investment companies required to register
under chapter 80A.
    (c) For purposes of this subdivision, the following definitions apply.
    (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
exempt-interest dividends that are not required to be added to federal taxable income
under section 290.01, subdivision 19a, clause (1)(ii).
    (2) "Regulated investment company" means regulated investment company as
defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
investment company as defined in section 851(g) of the Internal Revenue Code.
EFFECTIVE DATE.This section is effective for returns due after December 31,
2010.

    Sec. 4. Minnesota Statutes 2009 Supplement, section 289A.18, subdivision 1, is
amended to read:
    Subdivision 1. Individual income, fiduciary income, corporate franchise, and
entertainment taxes; partnership and S corporation returns; information returns;
mining company returns. The returns required to be made under sections 289A.08 and
289A.12 must be filed at the following times:
    (1) returns made on the basis of the calendar year must be filed on April 15
following the close of the calendar year, except that returns of corporations must be filed
on March 15 following the close of the calendar year the due date for filing the federal
income tax return;
    (2) returns made on the basis of the fiscal year must be filed on the 15th day of the
fourth month following the close of the fiscal year, except that returns of corporations
must be filed on the 15th day of the third month following the close of the fiscal year due
date for filing the federal income tax return;
    (3) returns for a fractional part of a year must be filed on the 15th day of the fourth
month following the end of the month in which falls the last day of the period for which
the return is made, except that the returns of corporations must be filed on the 15th day of
the third month following the end of the tax year; or, in the case of a corporation which
is a member of a unitary group, the return of the corporation must be filed on the 15th
day of the third month following the end of the tax year of the unitary group in which
falls the last day of the period for which the return is made due date for filing the federal
income tax return;
    (4) in the case of a final return of a decedent for a fractional part of a year, the return
must be filed on the 15th day of the fourth month following the close of the 12-month
period that began with the first day of that fractional part of a year;
    (5) in the case of the return of a cooperative association, returns must be filed on or
before the 15th day of the ninth month following the close of the taxable year;
    (6) if a corporation has been divested from a unitary group and files a return for
a fractional part of a year in which it was a member of a unitary business that files a
combined report under section 290.17, subdivision 4, the divested corporation's return
must be filed on the 15th day of the third month following the close of the common
accounting period that includes the fractional year;
    (7) returns of entertainment entities must be filed on April 15 following the close of
the calendar year;
    (8) returns required to be filed under section 289A.08, subdivision 4, must be filed
on the 15th day of the fifth month following the close of the taxable year;
    (9) returns of mining companies must be filed on May 1 following the close of the
calendar year; and
    (10) returns required to be filed with the commissioner under section 289A.12,
subdivision 2
, 4 to 10, or 16 must be filed within 30 days after being demanded by the
commissioner.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2009.

    Sec. 5. Minnesota Statutes 2008, section 289A.30, subdivision 2, is amended to read:
    Subd. 2. Estate tax. Where good cause exists, the commissioner may extend the
time for payment of estate tax for a period of not more than six months. If an extension to
pay the federal estate tax has been granted under section 6161 of the Internal Revenue
Code, the time for payment of the estate tax without penalty is extended for that period. A
taxpayer who owes at least $5,000 in taxes and who, under section 6161 or 6166 of the
Internal Revenue Code has been granted an extension for payment of the tax shown on the
return, may elect to pay the tax due to the commissioner in equal amounts at the same
time as required for federal purposes. A taxpayer electing to pay the tax in installments
shall defer a percentage of tax that does not exceed the percentage of federal tax deferred
and must notify the commissioner in writing no later than nine months after the death of
the person whose estate is subject to taxation. If the taxpayer fails to pay an installment on
time, unless it is shown that the failure is due to reasonable cause, the election is revoked
and the entire amount of unpaid tax plus accrued interest is due and payable 90 days after
the date on which the installment was payable.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2008, section 289A.50, subdivision 4, is amended to read:
    Subd. 4. Notice of refund. The commissioner shall determine the amount of refund,
if any, that is due, and notify the taxpayer of the determination as soon as practicable
after a claim has been filed.
If the commissioner determines that the address provided by the taxpayer to claim a
refund is invalid or is no longer the current address of the taxpayer, then the date of the
mailing of the notification provided under this subdivision is considered the date that
the refund is paid for purposes of the payment of interest under section 289A.56 and is
considered the date of issuance of the original warrant or check for purposes of issuing a
new warrant or check under section 270C.347.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2008, section 289A.60, subdivision 7, is amended to read:
    Subd. 7. Penalty for frivolous return. If a taxpayer files what purports to be
a tax return or a claim for refund but which does not contain information on which
the substantial correctness of the purported return or claim for refund may be judged
or contains information that on its face shows that the purported return or claim for
refund is substantially incorrect and the conduct is due to a position that is frivolous or
a desire that appears on the purported return or claim for refund to delay or impede the
administration of Minnesota tax laws, then the individual taxpayer shall pay a penalty of
the greater of $1,000 or 25 percent of the amount of tax required to be shown on the
return. In a proceeding involving the issue of whether or not a person taxpayer is liable for
this penalty, the burden of proof is on the commissioner.
EFFECTIVE DATE.This section is effective the day following final enactment
and applies to returns filed after that date.

    Sec. 8. Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19a, is
amended to read:
    Subd. 19a. Additions to federal taxable income. For individuals, estates, and
trusts, there shall be added to federal taxable income:
    (1)(i) interest income on obligations of any state other than Minnesota or a political
or governmental subdivision, municipality, or governmental agency or instrumentality
of any state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and
    (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except:
(A) the portion of the exempt-interest dividends exempt from state taxation under
the laws of the United States; and
(B) the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends, including any dividends exempt
under subitem (A), that are paid by the regulated investment company as defined in section
851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
defined in section 851(g) of the Internal Revenue Code, making the payment; and
    (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
government described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;
    (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
or accrued within the taxable year under this chapter and the amount of taxes based on
net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
state or to any province or territory of Canada, to the extent allowed as a deduction
under section 63(d) of the Internal Revenue Code, but the addition may not be more
than the amount by which the itemized deductions as allowed under section 63(d) of
the Internal Revenue Code exceeds the amount of the standard deduction as defined in
section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
this paragraph, the disallowance of itemized deductions under section 68 of the Internal
Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed;
    (3) the capital gain amount of a lump-sum distribution to which the special tax under
section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
    (4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income paid to any other state or any province or territory
of Canada, to the extent allowed as a deduction in determining federal adjusted gross
income. For the purpose of this paragraph, income taxes do not include the taxes imposed
by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
    (5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
other than expenses or interest used in computing net interest income for the subtraction
allowed under subdivision 19b, clause (1);
    (6) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;
    (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
in the taxable year generates a deduction for depreciation under section 168(k) and the
activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section 168(k) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k) is allowed;
    (8) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;
    (9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;
    (10) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;
(11) the amount of expenses disallowed under section 290.10, subdivision 2;
    (12) the amount deducted for qualified tuition and related expenses under section
222 of the Internal Revenue Code, to the extent deducted from gross income;
    (13) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
from gross income;
(14) the additional standard deduction for property taxes payable that is allowable
under section 63(c)(1)(C) of the Internal Revenue Code;
(15) the additional standard deduction for qualified motor vehicle sales taxes
allowable under section 63(c)(1)(E) of the Internal Revenue Code;
(16) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code; and
(17) the amount of unemployment compensation exempt from tax under section
85(c) of the Internal Revenue Code.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19b, as
amended by Laws 2010, chapter 187, section 2, is amended to read:
    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:
    (1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;
    (2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;
    (3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. No
deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
the qualifying child's vehicle to provide such transportation for a qualifying child. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;
    (4) income as provided under section 290.0802;
    (5) to the extent included in federal adjusted gross income, income realized on
disposition of property exempt from tax under section 290.491;
    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
under the provisions of Public Law 109-1 and Public Law 111-126;
    (7) for taxable years beginning before January 1, 2008, the amount of the federal
small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
which is included in gross income under section 87 of the Internal Revenue Code;
    (8) (7) for individuals who are allowed a federal foreign tax credit for taxes that do
not qualify for a credit under section 290.06, subdivision 22, an amount equal to the
carryover of subnational foreign taxes for the taxable year, but not to exceed the total
subnational foreign taxes reported in claiming the foreign tax credit. For purposes of
this clause, "federal foreign tax credit" means the credit allowed under section 27 of the
Internal Revenue Code, and "carryover of subnational foreign taxes" equals the carryover
allowed under section 904(c) of the Internal Revenue Code minus national level foreign
taxes to the extent they exceed the federal foreign tax credit;
    (9) (8) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
positive value of any net operating loss under section 172 of the Internal Revenue Code
generated for the tax year of the addition. The resulting delayed depreciation cannot be
less than zero;
    (10) (9) job opportunity building zone income as provided under section 469.316;
    (11) (10) to the extent included in federal taxable income, the amount of
compensation paid to members of the Minnesota National Guard or other reserve
components of the United States military for active service performed in Minnesota,
excluding compensation for services performed under the Active Guard Reserve (AGR)
program. For purposes of this clause, "active service" means (i) state active service as
defined in section 190.05, subdivision 5a, clause (1); (ii) federally funded state active
service as defined in section 190.05, subdivision 5b; or (iii) federal active service as
defined in section 190.05, subdivision 5c, but "active service" excludes service performed
in accordance with section 190.08, subdivision 3;
    (12) (11) to the extent included in federal taxable income, the amount of
compensation paid to Minnesota residents who are members of the armed forces of the
United States or United Nations for active duty performed outside Minnesota under United
States Code, title 10, section 101(d); United States Code, title 32, section 101(12); or the
authority of the United Nations;
    (13) (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
qualified donor's donation, while living, of one or more of the qualified donor's organs
to another person for human organ transplantation. For purposes of this clause, "organ"
means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
"human organ transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person; "qualified
expenses" means unreimbursed expenses for both the individual and the qualified donor
for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
may be subtracted under this clause only once; and "qualified donor" means the individual
or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
individual may claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;
    (14) (13) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
case of a shareholder of a corporation that is an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
subtraction is not allowed under this clause;
    (15) (14) to the extent included in federal taxable income, compensation paid to a
service member as defined in United States Code, title 10, section 101(a)(5), for military
service as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section
101(2);
    (16) (15) international economic development zone income as provided under
section 469.325;
    (17) (16) to the extent included in federal taxable income, the amount of national
service educational awards received from the National Service Trust under United States
Code, title 42, sections 12601 to 12604, for service in an approved Americorps National
Service program; and
(18) (17) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under section 290.01, subdivision 19a, clause (16).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19d,
is amended to read:
    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
corporations, there shall be subtracted from federal taxable income after the increases
provided in subdivision 19c:
    (1) the amount of foreign dividend gross-up added to gross income for federal
income tax purposes under section 78 of the Internal Revenue Code;
    (2) the amount of salary expense not allowed for federal income tax purposes due to
claiming the work opportunity credit under section 51 of the Internal Revenue Code;
    (3) any dividend (not including any distribution in liquidation) paid within the
taxable year by a national or state bank to the United States, or to any instrumentality of
the United States exempt from federal income taxes, on the preferred stock of the bank
owned by the United States or the instrumentality;
    (4) amounts disallowed for intangible drilling costs due to differences between
this chapter and the Internal Revenue Code in taxable years beginning before January
1, 1987, as follows:
    (i) to the extent the disallowed costs are represented by physical property, an amount
equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7
, subject to the modifications contained in subdivision 19e; and
    (ii) to the extent the disallowed costs are not represented by physical property, an
amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
290.09, subdivision 8;
    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
Internal Revenue Code, except that:
    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
capital loss carrybacks shall not be allowed;
    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
allowed;
    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
capital loss carryback to each of the three taxable years preceding the loss year, subject to
the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
a capital loss carryover to each of the five taxable years succeeding the loss year to the
extent such loss was not used in a prior taxable year and subject to the provisions of
Minnesota Statutes 1986, section 290.16, shall be allowed;
    (6) an amount for interest and expenses relating to income not taxable for federal
income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
291 of the Internal Revenue Code in computing federal taxable income;
    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
reasonable allowance for depletion based on actual cost. In the case of leases the deduction
must be apportioned between the lessor and lessee in accordance with rules prescribed
by the commissioner. In the case of property held in trust, the allowable deduction must
be apportioned between the income beneficiaries and the trustee in accordance with the
pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
of the trust's income allocable to each;
    (8) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
1986, section 290.09, subdivision 7;
    (9) amounts included in federal taxable income that are due to refunds of income,
excise, or franchise taxes based on net income or related minimum taxes paid by the
corporation to Minnesota, another state, a political subdivision of another state, the
District of Columbia, or a foreign country or possession of the United States to the extent
that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
clause (1), in a prior taxable year;
    (10) 80 percent of royalties, fees, or other like income accrued or received from a
foreign operating corporation or a foreign corporation which is part of the same unitary
business as the receiving corporation, unless the income resulting from such payments or
accruals is income from sources within the United States as defined in subtitle A, chapter
1, subchapter N, part 1, of the Internal Revenue Code;
    (11) income or gains from the business of mining as defined in section 290.05,
subdivision 1
, clause (a), that are not subject to Minnesota franchise tax;
    (12) the amount of disability access expenditures in the taxable year which are not
allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
    (13) the amount of qualified research expenses not allowed for federal income tax
purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
the amount exceeds the amount of the credit allowed under section 290.068;
    (14) the amount of salary expenses not allowed for federal income tax purposes due
to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
Code;
    (15) for taxable years beginning before January 1, 2008, the amount of the federal
small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
which is included in gross income under section 87 of the Internal Revenue Code;
    (16) (15) for a corporation whose foreign sales corporation, as defined in section
922 of the Internal Revenue Code, constituted a foreign operating corporation during any
taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
claiming the deduction under section 290.21, subdivision 4, for income received from
the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
income excluded under section 114 of the Internal Revenue Code, provided the income is
not income of a foreign operating company;
    (17) (16) any decrease in subpart F income, as defined in section 952(a) of the
Internal Revenue Code, for the taxable year when subpart F income is calculated without
regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
    (18) (17) in each of the five tax years immediately following the tax year in which
an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
resulting delayed depreciation cannot be less than zero;
    (19) (18) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
the amount of the addition; and
(20) (19) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under section 290.01, subdivision 19c, clause (25).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2008, section 290.014, subdivision 2, is amended to read:
    Subd. 2. Nonresident individuals. Except as provided in section 290.015, a
nonresident individual is subject to the return filing requirements and to tax as provided in
this chapter to the extent that the income of the nonresident individual is:
(1) allocable to this state under section 290.17, 290.191, or 290.20;
(2) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character which is taxable under
this chapter) in the individual's capacity as a beneficiary of an estate with income allocable
to this state under section 290.17, 290.191, or 290.20 and the income, taking into account
the income character provisions of section 662(b) of the Internal Revenue Code, would be
allocable to this state under section 290.17, 290.191, or 290.20 if realized by the individual
directly from the source from which realized by the estate;
(3) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character that is taxable under
this chapter) in the individual's capacity as a beneficiary or grantor or other person treated
as a substantial owner of a trust with income allocable to this state under section 290.17,
290.191, or 290.20 and the income, taking into account the income character provisions of
section 652(b), 662(b), or 664(b) of the Internal Revenue Code, would be allocable to this
state under section 290.17, 290.191, or 290.20 if realized by the individual directly from
the source from which realized by the trust;
(4) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character which is taxable under
this chapter) in the individual's capacity as a limited or general partner in a partnership
with income allocable to this state under section 290.17, 290.191, or 290.20 and the
income, taking into account the income character provisions of section 702(b) of the
Internal Revenue Code, would be allocable to this state under section 290.17, 290.191,
or 290.20 if realized by the individual directly from the source from which realized by
the partnership; or
(5) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character which is taxable under
this chapter) in the individual's capacity as a shareholder of a corporation treated as an
"S" corporation under section 290.9725, and income allocable to this state under section
290.17, 290.191, or 290.20 and the income, taking into account the income character
provisions of section 1366(b) of the Internal Revenue Code, would be allocable to this
state under section 290.17, 290.191, or 290.20 if realized by the individual directly from
the source from which realized by the corporation; or
(6) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character which is taxable under
this chapter) in the individual's capacity as the sole member of a limited liability company
that is disregarded for federal income tax purposes, with income allocable to this state
under section 290.17, 290.191, or 290.20, as though realized by the individual directly
from the source from which it was realized by the limited liability company.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2009 Supplement, section 290.06, subdivision 2c, is
amended to read:
    Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income
taxes imposed by this chapter upon married individuals filing joint returns and surviving
spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
applying to their taxable net income the following schedule of rates:
    (1) On the first $25,680, 5.35 percent;
    (2) On all over $25,680, but not over $102,030, 7.05 percent;
    (3) On all over $102,030, 7.85 percent.
    Married individuals filing separate returns, estates, and trusts must compute their
income tax by applying the above rates to their taxable income, except that the income
brackets will be one-half of the above amounts.
    (b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:
    (1) On the first $17,570, 5.35 percent;
    (2) On all over $17,570, but not over $57,710, 7.05 percent;
    (3) On all over $57,710, 7.85 percent.
    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying
as a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:
    (1) On the first $21,630, 5.35 percent;
    (2) On all over $21,630, but not over $86,910, 7.05 percent;
    (3) On all over $86,910, 7.85 percent.
    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the
tax of any individual taxpayer whose taxable net income for the taxable year is less than
an amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not
more than $100. The amount of tax for each bracket shall be computed at the rates set
forth in this subdivision, provided that the commissioner may disregard a fractional part of
a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
    (e) An individual who is not a Minnesota resident for the entire year must compute
the individual's Minnesota income tax as provided in this subdivision. After the
application of the nonrefundable credits provided in this chapter, the tax liability must
then be multiplied by a fraction in which:
    (1) the numerator is the individual's Minnesota source federal adjusted gross income
as defined in section 62 of the Internal Revenue Code and increased by the additions
required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12),
(13), (16), and (17), and reduced by the Minnesota assignable portion of the subtraction
for United States government interest under section 290.01, subdivision 19b, clause
(1), and the subtractions under section 290.01, subdivision 19b, clauses (9), (10), (14),
(15), (16), and (18) (8), (9), (13), (14), (15), and (17), after applying the allocation and
assignability provisions of section 290.081, clause (a), or 290.17; and
    (2) the denominator is the individual's federal adjusted gross income as defined in
section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), (16), and
(17), and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1),
(9), (10), (14), (15), (16), and (18) (8), (9), (13), (14), (15), and (17).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2008, section 290.067, subdivision 1, is amended to read:
    Subdivision 1. Amount of credit. (a) A taxpayer may take as a credit against the
tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
dependent care credit for which the taxpayer is eligible pursuant to the provisions of
section 21 of the Internal Revenue Code subject to the limitations provided in subdivision
2 except that in determining whether the child qualified as a dependent, income received
as a Minnesota family investment program grant or allowance to or on behalf of the child
must not be taken into account in determining whether the child received more than half
of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of
the Internal Revenue Code do not apply.
(b) If a child who has not attained the age of six years at the close of the taxable year
is cared for at a licensed family day care home operated by the child's parent, the taxpayer
is deemed to have paid employment-related expenses. If the child is 16 months old or
younger at the close of the taxable year, the amount of expenses deemed to have been paid
equals the maximum limit for one qualified individual under section 21(c) and (d) of the
Internal Revenue Code. If the child is older than 16 months of age but has not attained the
age of six years at the close of the taxable year, the amount of expenses deemed to have
been paid equals the amount the licensee would charge for the care of a child of the same
age for the same number of hours of care.
(c) If a married couple:
(1) has a child who has not attained the age of one year at the close of the taxable
year;
(2) files a joint tax return for the taxable year; and
(3) does not participate in a dependent care assistance program as defined in section
129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid
for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of
(i) the combined earned income of the couple or (ii) the amount of the maximum limit for
one qualified individual under section 21(c) and (d) of the Internal Revenue Code will
be deemed to be the employment related expense paid for that child. The earned income
limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed
amount. These deemed amounts apply regardless of whether any employment-related
expenses have been paid.
(d) If the taxpayer is not required and does not file a federal individual income tax
return for the tax year, no credit is allowed for any amount paid to any person unless:
(1) the name, address, and taxpayer identification number of the person are included
on the return claiming the credit; or
(2) if the person is an organization described in section 501(c)(3) of the Internal
Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code,
the name and address of the person are included on the return claiming the credit.
In the case of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer exercised due
diligence in attempting to provide the information required.
In the case of a nonresident, part-year resident, or a person who has earned income
not subject to tax under this chapter including earned income excluded pursuant to section
290.01, subdivision 19b, clause (10) (9) or (16) (15), the credit determined under section
21 of the Internal Revenue Code must be allocated based on the ratio by which the earned
income of the claimant and the claimant's spouse from Minnesota sources bears to the
total earned income of the claimant and the claimant's spouse.
For residents of Minnesota, the subtractions for military pay under section 290.01,
subdivision 19b
, clauses (11) (10) and (12) (11), are not considered "earned income not
subject to tax under this chapter."
For residents of Minnesota, the exclusion of combat pay under section 112 of the
Internal Revenue Code is not considered "earned income not subject to tax under this
chapter."
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2009 Supplement, section 290.0671, subdivision 1,
is amended to read:
    Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
imposed by this chapter equal to a percentage of earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
case is the credit less than zero.
(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
(d) For individuals with two or more qualifying children, the credit equals ten
percent of the first $9,720 of earned income and 20 percent of earned income over
$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income
or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is
the credit less than zero.
(e) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section 290.01,
subdivision 19b
, clause (10) (9) or (16) (15), the credit must be allocated based on the
ratio of federal adjusted gross income reduced by the earned income not subject to tax
under this chapter over federal adjusted gross income. For purposes of this paragraph, the
subtractions for military pay under section 290.01, subdivision 19b, clauses (11) (10) and
(12) (11), are not considered "earned income not subject to tax under this chapter."
For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."
(g) For tax years beginning after December 31, 2007, and before December 31,
2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$3,000 for married taxpayers filing joint returns. For tax years beginning after December
31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
31 of the year preceding the taxable year. The earned income thresholds as adjusted
for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
is rounded up to the nearest $10. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.
(h) The commissioner shall construct tables showing the amount of the credit at
various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Minnesota Statutes 2008, section 290.081, is amended to read:
290.081 INCOME OF NONRESIDENTS, RECIPROCITY.
(a) The compensation received for the performance of personal or professional
services within this state by an individual whose residence, place of abode, and place
customarily returned to at least once a month is in another state, shall be excluded from
gross income to the extent such compensation is subject to an income tax imposed by the
state of residence; provided that such state allows a similar exclusion of compensation
received by residents of Minnesota for services performed therein.
(b) When it is deemed to be in the best interests of the people of this state, the
commissioner may determine that the provisions of paragraph (a) shall not apply. As long
as the provisions of paragraph (a) apply between Minnesota and Wisconsin, the provisions
of paragraph (a) shall apply to any individual who is domiciled in Wisconsin.
(c) For the purposes of paragraph (a), whenever the Wisconsin tax on Minnesota
residents which would have been paid Wisconsin without paragraph (a) exceeds the
Minnesota tax on Wisconsin residents which would have been paid Minnesota without
paragraph (a), or vice versa, then the state with the net revenue loss resulting from
paragraph (a) shall receive from must be compensated by the other state the amount
of such loss as provided in the agreement under paragraph (d). This provision shall be
effective for all years beginning after December 31, 1972. The data used for computing
the loss to either state shall be determined on or before September 30 of the year following
the close of the previous calendar year.
(d) Interest is payable on all amounts calculated under paragraph (c) relating to
taxable years beginning after December 31, 2000. Interest accrues from July 1 of the
taxable year. The commissioner of revenue is authorized to enter into agreements with
the state of Wisconsin specifying the compensation required under paragraph (b), the
reciprocity payment due date, conditions constituting delinquency, interest rates, and a
method for computing interest due. Calculation of compensation under the agreement
must specify if the revenue loss is determined before or after the allowance of each state's
credit for taxes paid to the other state.
(e) If an agreement cannot be reached as to the amount of the loss, the commissioner
of revenue and the taxing official of the state of Wisconsin shall each appoint a member
of a board of arbitration and these members shall appoint the third member of the board.
The board shall select one of its members as chair. Such board may administer oaths, take
testimony, subpoena witnesses, and require their attendance, require the production of
books, papers and documents, and hold hearings at such places as are deemed necessary.
The board shall then make a determination as to the amount to be paid the other state
which determination shall be final and conclusive.
(f) The commissioner may furnish copies of returns, reports, or other information to
the taxing official of the state of Wisconsin, a member of the board of arbitration, or a
consultant under joint contract with the states of Minnesota and Wisconsin for the purpose
of making a determination as to the amount to be paid the other state under the provisions
of this section. Prior to the release of any information under the provisions of this section,
the person to whom the information is to be released shall sign an agreement which
provides that the person will protect the confidentiality of the returns and information
revealed thereby to the extent that it is protected under the laws of the state of Minnesota.

    Sec. 16. Minnesota Statutes 2009 Supplement, section 290.091, subdivision 2, is
amended to read:
    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
terms have the meanings given:
    (a) "Alternative minimum taxable income" means the sum of the following for
the taxable year:
    (1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;
    (2) the taxpayer's itemized deductions allowed in computing federal alternative
minimum taxable income, but excluding:
    (i) the charitable contribution deduction under section 170 of the Internal Revenue
Code;
    (ii) the medical expense deduction;
    (iii) the casualty, theft, and disaster loss deduction; and
    (iv) the impairment-related work expenses of a disabled person;
    (3) for depletion allowances computed under section 613A(c) of the Internal
Revenue Code, with respect to each property (as defined in section 614 of the Internal
Revenue Code), to the extent not included in federal alternative minimum taxable income,
the excess of the deduction for depletion allowable under section 611 of the Internal
Revenue Code for the taxable year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion deduction for the taxable year);
    (4) to the extent not included in federal alternative minimum taxable income, the
amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
Internal Revenue Code determined without regard to subparagraph (E);
    (5) to the extent not included in federal alternative minimum taxable income, the
amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
to (9), (12), (13), (16), and (17);
    less the sum of the amounts determined under the following:
    (1) interest income as defined in section 290.01, subdivision 19b, clause (1);
    (2) an overpayment of state income tax as provided by section 290.01, subdivision
19b
, clause (2), to the extent included in federal alternative minimum taxable income;
    (3) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as
defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
amounts deducted in computing federal adjusted gross income; and
    (4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b
, clauses (6), (9) (8) to (16) (15), and (18) (17).
    In the case of an estate or trust, alternative minimum taxable income must be
computed as provided in section 59(c) of the Internal Revenue Code.
    (b) "Investment interest" means investment interest as defined in section 163(d)(3)
of the Internal Revenue Code.
    (c) "Net minimum tax" means the minimum tax imposed by this section.
    (d) "Regular tax" means the tax that would be imposed under this chapter (without
regard to this section and section 290.032), reduced by the sum of the nonrefundable
credits allowed under this chapter.
    (e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 17. Minnesota Statutes 2008, section 290.0921, subdivision 3, is amended to read:
    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
income" is Minnesota net income as defined in section 290.01, subdivision 19, and
includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
Minnesota tax return, the minimum tax must be computed on a separate company basis.
If a corporation is part of a tax group filing a unitary return, the minimum tax must be
computed on a unitary basis. The following adjustments must be made.
(1) For purposes of the depreciation adjustments under section 56(a)(1) and
56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
income tax purposes, including any modification made in a taxable year under section
290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7,
paragraph (c).
For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
allowance in the first taxable year after December 31, 2000.
(2) The portion of the depreciation deduction allowed for federal income tax
purposes under section 168(k) of the Internal Revenue Code that is required as an
addition under section 290.01, subdivision 19c, clause (15), is disallowed in determining
alternative minimum taxable income.
(3) The subtraction for depreciation allowed under section 290.01, subdivision
19d
, clause (18) (17), is allowed as a depreciation deduction in determining alternative
minimum taxable income.
(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
of the Internal Revenue Code does not apply.
(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
Revenue Code does not apply.
(6) The special rule for dividends from section 936 companies under section
56(g)(4)(C)(iii) does not apply.
(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
Code does not apply.
(8) The tax preference for intangible drilling costs under section 57(a)(2) of the
Internal Revenue Code must be calculated without regard to subparagraph (E) and the
subtraction under section 290.01, subdivision 19d, clause (4).
(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
Revenue Code does not apply.
(10) The tax preference for charitable contributions of appreciated property under
section 57(a)(6) of the Internal Revenue Code does not apply.
(11) For purposes of calculating the tax preference for accelerated depreciation or
amortization on certain property placed in service before January 1, 1987, under section
57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
deduction allowed under section 290.01, subdivision 19e.
For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, not previously deducted is a
depreciation or amortization allowance in the first taxable year after December 31, 2004.
(12) For purposes of calculating the adjustment for adjusted current earnings in
section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
minimum taxable income as defined in this subdivision, determined without regard to the
adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
(13) For purposes of determining the amount of adjusted current earnings under
section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the
amount of refunds of income, excise, or franchise taxes subtracted as provided in section
290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other like
income subtracted as provided in section 290.01, subdivision 19d, clause (10).
(14) Alternative minimum taxable income excludes the income from operating in a
job opportunity building zone as provided under section 469.317.
(15) Alternative minimum taxable income excludes the income from operating in a
biotechnology and health sciences industry zone as provided under section 469.337.
(16) Alternative minimum taxable income excludes the income from operating in an
international economic development zone as provided under section 469.326.
Items of tax preference must not be reduced below zero as a result of the
modifications in this subdivision.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 18. Minnesota Statutes 2008, section 290.17, subdivision 2, is amended to read:
    Subd. 2. Income not derived from conduct of a trade or business. The income of
a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or
business must be assigned in accordance with paragraphs (a) to (f):
    (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in
section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, and to the
extent that, the work of the employee is performed within it; all other income from such
sources is treated as income from sources without this state.
    Severance pay shall be considered income from labor or personal or professional
services.
    (2) In the case of an individual who is a nonresident of Minnesota and who is an
athlete or entertainer, income from compensation for labor or personal services performed
within this state shall be determined in the following manner:
    (i) The amount of income to be assigned to Minnesota for an individual who is a
nonresident salaried athletic team employee shall be determined by using a fraction in
which the denominator contains the total number of days in which the individual is under
a duty to perform for the employer, and the numerator is the total number of those days
spent in Minnesota. For purposes of this paragraph, off-season training activities, unless
conducted at the team's facilities as part of a team imposed program, are not included in
the total number of duty days. Bonuses earned as a result of play during the regular season
or for participation in championship, play-off, or all-star games must be allocated under
the formula. Signing bonuses are not subject to allocation under the formula if they are
not conditional on playing any games for the team, are payable separately from any other
compensation, and are nonrefundable; and
    (ii) The amount of income to be assigned to Minnesota for an individual who is a
nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's
athletic or entertainment performance in Minnesota shall be determined by assigning to
this state all income from performances or athletic contests in this state.
    (3) For purposes of this section, amounts received by a nonresident as "retirement
income" as defined in section (b)(1) of the State Income Taxation of Pension Income
Act, Public Law 104-95, are not considered income derived from carrying on a trade
or business or from wages or other compensation for work an employee performed in
Minnesota, and are not taxable under this chapter.
    (b) Income or gains from tangible property located in this state that is not employed
in the business of the recipient of the income or gains must be assigned to this state.
    (c) Income or gains from intangible personal property not employed in the business
of the recipient of the income or gains must be assigned to this state if the recipient of the
income or gains is a resident of this state or is a resident trust or estate.
    Gain on the sale of a partnership interest is allocable to this state in the ratio of the
original cost of partnership tangible property in this state to the original cost of partnership
tangible property everywhere, determined at the time of the sale. If more than 50 percent
of the value of the partnership's assets consists of intangibles, gain or loss from the sale
of the partnership interest is allocated to this state in accordance with the sales factor of
the partnership for its first full tax period immediately preceding the tax period of the
partnership during which the partnership interest was sold.
Gain on the sale of an interest in a single member limited liability company that
is disregarded for federal income tax purposes is allocable to this state as if the single
member limited liability company did not exist and the assets of the limited liability
company are personally owned by the sole member.
    Gain on the sale of goodwill or income from a covenant not to compete that is
connected with a business operating all or partially in Minnesota is allocated to this state
to the extent that the income from the business in the year preceding the year of sale was
assignable to Minnesota under subdivision 3.
    When an employer pays an employee for a covenant not to compete, the income
allocated to this state is in the ratio of the employee's service in Minnesota in the calendar
year preceding leaving the employment of the employer over the total services performed
by the employee for the employer in that year.
    (d) Income from winnings on a bet made by an individual while in Minnesota is
assigned to this state. In this paragraph, "bet" has the meaning given in section 609.75,
subdivision 2
, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3).
    (e) All items of gross income not covered in paragraphs (a) to (d) and not part of the
taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
    (f) For the purposes of this section, working as an employee shall not be considered
to be conducting a trade or business.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 19. Laws 2010, chapter 216, section 2, subdivision 3, is amended to read:
    Subd. 3. Certification of qualified investors. (a) Investors may apply to the
commissioner for certification as a qualified investor for a taxable year. The application
must be in the form and be made under the procedures specified by the commissioner,
accompanied by an application fee of $350. Application fees are deposited in the small
business investment tax credit administration account in the special revenue fund. The
application for certification for 2010 must be made available on the department's Web
site by August 1, 2010. Applications for subsequent years' certification must be made
available on the department's Web site by November 1 of the preceding year.
(b) Within 30 days of receiving an application for certification under this subdivision,
the commissioner must either certify the investor as satisfying the conditions required
of a qualified investor, request additional information from the investor, or reject the
application for certification. If the commissioner requests additional information from the
investor, the commissioner must either certify the investor or reject the application within
30 days of receiving the additional information. If the commissioner neither certifies the
investor nor rejects the application within 30 days of receiving the original application or
within 30 days of receiving the additional information requested, whichever is later, then
the application is deemed rejected, and the commissioner must refund the $350 application
fee. An investor who applies for certification and is rejected may reapply.
(c) To receive certification, an investor must (1) be a natural person; and (2) certify
to the commissioner that the investor will only invest in a transaction that is exempt under
section 80A.46, clause (13) or (14), or in a security registered under section 80A.50,
paragraph (b).
(d) In order for a qualified investment in a qualified small business to be eligible
for tax credits, a qualified investor who makes the investment must have applied for
and received certification for the calendar year prior to making the qualified investment,
except in the case of an investor who is not an accredited investor, within the meaning of
Regulation D of the Securities and Exchange Commission, Code of Federal Regulations,
title 17, section 230.501, paragraph (a), application for certification may be made within
30 days after making the qualified investment.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 4
SALES AND USE TAXES

    Section 1. Minnesota Statutes 2008, section 289A.50, subdivision 2, is amended to
read:
    Subd. 2. Refund of sales tax to vendors; limitation. (a) If a vendor has collected
from a purchaser and remitted to the state a tax on a transaction that is not subject to the
tax imposed by chapter 297A, the tax is refundable to the vendor only if and to the extent
that the tax and any interest earned on the tax is credited to amounts due to the vendor by
the purchaser or returned to the purchaser by the vendor.
(b) In addition to the requirements of subdivision 1, a claim for refund under this
subdivision must state in writing that the tax and interest earned on the tax has been or
will be refunded or credited to the purchaser by the vendor.
(c) Within 60 days after the date the commissioner issues the refund, any amount not
refunded or credited to the purchaser by the vendor, as required by paragraph (a), must be
returned to the commissioner by the vendor.
(d) After the commissioner refunds the tax and interest to the vendor, if the
commissioner determines that the vendor did not refund or credit the tax and interest as
provided in this subdivision, or did not return the amount required to be returned under
paragraph (c), the commissioner may assess the vendor for underpayment of tax and
interest equal to that portion of the amount that was not refunded or credited to the
purchaser. The assessment bears interest which is computed at the rate specified in section
270C.40, subdivision 5, on the unpaid amount from the date the commissioner issues the
refund until the date the amount is paid to the commissioner. The assessment may be made
at any time within 3-1/2 years after the commissioner refunds the tax and interest to the
vendor. If part of the refund was induced by fraud or misrepresentation of a material fact,
the assessment may be made at any time.
EFFECTIVE DATE.This section is effective for refunds issued after June 30, 2010.

    Sec. 2. Minnesota Statutes 2008, section 297A.62, as amended by Laws 2009, chapter
88, article 4, section 4, is amended to read:
297A.62 SALES TAX IMPOSED; RATES.
    Subdivision 1. Generally. Except as otherwise provided in subdivision 3 or in this
chapter, a sales tax of 6.5 percent is imposed on the gross receipts from retail sales as
defined in section 297A.61, subdivision 4, made in this state or to a destination in this
state by a person who is required to have or voluntarily obtains a permit under section
297A.83, subdivision 1.
    Subd. 1a. Constitutionally required sales tax increase. Except as otherwise
provided in subdivision 3 or in this chapter, an additional sales tax of 0.375 percent, as
required under the Minnesota Constitution, article XI, section 15, is imposed on the gross
receipts from retail sales as defined in section 297A.61, subdivision 4, made in this state or
to a destination in this state by a person who is required to have or voluntarily obtains a
permit under section 297A.83, subdivision 1. This additional tax expires July 1, 2034.
    Subd. 3. Manufactured housing and park trailers. For retail sales of
manufactured homes as defined in section 327.31, subdivision 6, for residential uses, the
sales tax under subdivision subdivisions 1 and 1a is imposed on 65 percent of the dealer's
cost of the manufactured home. For retail sales of new or used park trailers, as defined in
section 168.002, subdivision 23, the sales tax under subdivision subdivisions 1 and 1a is
imposed on 65 percent of the sales price of the park trailer.
    Subd. 4. Combined rates. In this chapter, wherever there is a reference to the rate
under subdivision 1, or to a combined rate under subdivisions 1 and 1a, the rate to be
applied is the combined rate under subdivisions 1 and 1a until the additional tax imposed
by subdivision 1a expires. This subdivision does not apply to section 297A.65.
EFFECTIVE DATE.This section is effective retroactively for sales and purchases
made after June 30, 2009, except for sales and purchases subject to subdivision 3. This
section is effective for sales and purchases subject to subdivision 3 made after June 30,
2010.

    Sec. 3. Minnesota Statutes 2008, section 297A.665, is amended to read:
297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
    (a) For the purpose of the proper administration of this chapter and to prevent
evasion of the tax, until the contrary is established, it is presumed that:
    (1) all gross receipts are subject to the tax; and
    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
in Minnesota.
    (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
However, a seller is relieved of liability if:
    (1) the seller obtains a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, at the time of the sale or within
90 days after the date of the sale; or
    (2) if the seller has not obtained a fully completed exemption certificate or all the
relevant information required by section 297A.72, subdivision 2, within the time provided
in clause (1), within 120 days after a request for substantiation by the commissioner,
the seller either:
    (i) obtains in good faith a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, from the purchaser; or
    (ii) proves by other means that the transaction was not subject to tax.
    (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
    (1) fraudulently fails to collect the tax; or
    (2) solicits purchasers to participate in the unlawful claim of an exemption.
    (d) A certified service provider, as defined in section 297A.995, subdivision 2, is
relieved of liability under this section to the extent a seller who is its client is relieved of
liability.
    (e) A purchaser of tangible personal property or any items listed in section 297A.63
that are shipped or brought to Minnesota by the purchaser has the burden of proving
that the property was not purchased from a retailer for storage, use, or consumption in
Minnesota.
(f) If a seller claims that certain sales are exempt and does not provide the certificate,
information, or proof required by paragraph (b), clause (2), within 120 days after the date
of the commissioner's request for substantiation, then the exemptions claimed by the seller
that required substantiation are disallowed.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2008, section 297A.68, subdivision 39, is amended to read:
    Subd. 39. Preexisting bids or contracts. (a) The sale of tangible personal property
or services is exempt from tax or a tax rate increase for a period of six months from
the effective date of the law change that results in the imposition of the tax or the tax
rate increase under this chapter if:
(1) the act imposing the tax or increasing the tax rate does not have transitional
effective date language for existing construction contracts and construction bids; and
(2) the requirements of paragraph (b) are met.
(b) A sale is tax exempt under paragraph (a) if it meets the requirements of either
clause (1) or (2):
(1) For a construction contract:
(i) the goods or services sold must be used for the performance of a bona fide written
lump sum or fixed price construction contract;
(ii) the contract must be entered into before the date the goods or services become
subject to the sales tax or the tax rate was increased;
(iii) the contract must not provide for allocation of future taxes; and
(iv) for each qualifying contract the contractor must give the seller keep
documentation of the contract on which an exemption is to be claimed.
(2) For a construction bid:
(i) the goods or services sold must be used pursuant to an obligation of a bid or bids;
(ii) the bid or bids must be submitted and accepted before the date the goods or
services became subject to the sales tax or the tax rate was increased;
(iii) the bid or bids must not be able to be withdrawn, modified, or changed without
forfeiting a bond; and
(iv) for each qualifying bid, the contractor must give the seller keep documentation
of the bid on which an exemption is to be claimed.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2008, 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 an 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 if the gross
annual receipts of the organization from fund-raising do not exceed $10,000; and
(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 2, or be recorded in
the same manner as other revenues or expenditures of the school district under section
123B.49, subdivision 4.
(c) Sales of tangible personal property are exempt if the entire proceeds, less the
necessary expenses for obtaining the property, 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 $10,000 limit.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2008, section 297A.71, subdivision 23, is amended to read:
    Subd. 23. Construction materials for qualified low-income housing projects. (a)
Purchases of materials and supplies used or consumed in and equipment incorporated into
the construction, improvement, or expansion of qualified low-income housing projects are
exempt from the tax imposed under this chapter if the owner of the qualified low-income
housing project is:
    (1) the public housing agency or housing and redevelopment authority of a political
subdivision;
    (2) an entity exercising the powers of a housing and redevelopment authority within
a political subdivision;
    (3) a limited partnership in which the sole or managing general partner is an
authority under clause (1) or an entity under clause (2) or, (4), or (5);
    (4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying
under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or
    (5) a limited liability company if it consists of a sole member that is an entity under
clause (4); or
(6) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604,
for a qualified low-income housing project described in paragraph (b), clause (5).
    This exemption applies regardless of whether the purchases are made by the owner
of the facility or a contractor.
    (b) For purposes of this exemption, "qualified low-income housing project" means:
    (1) a housing or mixed use project in which at least 20 percent of the residential units
are qualifying low-income rental housing units as defined in section 273.126;
    (2) a federally assisted low-income housing project financed by a mortgage insured
or held by the United States Department of Housing and Urban Development under
United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United
States Code, title 42, section 1437f; the Native American Housing Assistance and
Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar
successor federal low-income housing program;
    (3) a qualified low-income housing project as defined in United States Code, title
26, section 42(g), meeting all of the requirements for a low-income housing credit under
section 42 of the Internal Revenue Code regardless of whether the project actually applies
for or receives a low-income housing credit;
    (4) a project that will be operated in compliance with Internal Revenue Service
revenue procedure 96-32; or
    (5) a housing or mixed use project in which all or a portion of the residential units
are subject to the requirements of section 5 of the United States Housing Act of 1937.
    (c) For a project, a portion of which is not used for low-income housing units,
the amount of purchases that are exempt under this subdivision must be determined by
multiplying the total purchases, as specified in paragraph (a), by the ratio of:
    (1) the total gross square footage of units subject to the income limits under section
273.126, the financing for the project, the federal low-income housing tax credit, revenue
procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable
to the project; and
    (2) the total gross square footage of all units in the project.
    (d) The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1
, applied, and then refunded in the manner provided in section 297A.75.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2010.

    Sec. 7. Minnesota Statutes 2008, section 297A.71, subdivision 39, is amended to read:
    Subd. 39. Hydroelectric generating facility. Materials and supplies used or
consumed in the construction of a 10.3 megawatt run-of-the-river hydroelectric generating
facility that meets the requirements of this subdivision are exempt. To qualify for the
exemption under this subdivision, a hydroelectric generating facility must:
(1) utilize between 12 and 16 turbine generators at a dam site existing on March
31, 1994;
(2) be located on land within 3,000 feet of a 13.8 kilovolt distribution circuit; and
(3) be eligible to receive a renewable energy production incentive payment under
section 216C.41.
This exemption applies to materials and supplies purchased after April 30, 2006, and
on or before December 31, 2010.
EFFECTIVE DATE.This section is effective retroactively for sales and purchases
made after December 31, 2009.

    Sec. 8. Minnesota Statutes 2008, section 297A.71, is amended by adding a subdivision
to read:
    Subd. 42. Aerospace defense manufacturing facility. (a) Materials and
supplies used or consumed in, capital equipment incorporated into, and privately owned
infrastructure in support of the construction, improvement, or expansion of an aerospace
defense manufacturing facility are exempt if:
(1) the facility is used for the manufacturing of aerospace or defense-related sensors
and the production of micro-electro-mechanical systems; and
(2) the total capital investment made at the facility is at least $59,000,000.
(b) The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied, and refunded in the manner provided in section 297A.75, only
after the following criteria have been met:
(1) a refund may not be issued until the owner of the aerospace defense
manufacturing facility has received certification from the Department of Employment and
Economic Development that the aerospace defense manufacturing facility employs no
less than 1,653 full-time equivalent workers within the state, and has made a total capital
investment of at least $59,000,000;
(2) for each year that the owner of the aerospace defense manufacturing facility
receives certification from the Department of Employment and Economic Development
that no less than 1,653 full-time equivalent worker residents are employed workers within
the state, the refund may be issued to the owner of the aerospace defense manufacturing
facility at a rate of 25 percent of the total allowable refund payable to date, provided that
the Department of Employment and Economic Development continues to certify that no
less than 1,653 full-time equivalent workers are employed workers within the state, the
commissioner of revenue may make annual payments of the remaining refund until all
of the refund has been paid; and
(3) to receive the refund, the owner of the aerospace defense manufacturing facility
must initially apply to the Department of Employment and Economic Development for
certification no later than one year from the final completion date of construction of the
expansion of the aerospace defense manufacturing facility.
EFFECTIVE DATE.This section is effective for sales and purchases made after
July 1, 2010, and before December 31, 2015.

    Sec. 9. Minnesota Statutes 2009 Supplement, 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) capital equipment exempt under section 297A.68, subdivision 5;
    (2) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;
    (3) building materials for mineral production facilities exempt under section
297A.71, subdivision 14;
    (4) building materials for correctional facilities under section 297A.71, subdivision
3
;
    (5) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11;
    (6) elevators and building materials exempt under section 297A.71, subdivision 12;
    (7) building materials for the Long Lake Conservation Center exempt under section
297A.71, subdivision 17;
    (8) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23
;
    (9) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;
    (10) 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;
    (11) tangible personal property and taxable services and construction materials,
supplies, and equipment exempt under section 297A.68, subdivision 41;
    (12) commuter rail vehicle and repair parts under section 297A.70, subdivision
3, clause (11);
    (13) materials, supplies, and equipment for construction or improvement of projects
and facilities under section 297A.71, subdivision 40; and
(14) materials, supplies, and equipment for construction or improvement of a meat
processing facility exempt under section 297A.71, subdivision 41; and
(15) materials, supplies, and equipment for construction, improvement, or expansion
of an aerospace defense manufacturing facility exempt under section 297A.71, subdivision
42.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2009 Supplement, 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) to (3), the applicant must be the purchaser;
    (2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental
subdivision;
    (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;
    (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
property;
    (5) for subdivision 1, clause (8), the owner of the qualified low-income housing
project;
    (6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilities;
    (7) for subdivision 1, clauses (10), (11), and (14), and (15), the owner of the
qualifying business; and
    (8) for subdivision 1, clauses (12) and (13), the applicant must be the governmental
entity that owns or contracts for the project or facility.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2008, 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, clause (4), (5), (6), (7), (8), (9), (10), (11),
(12), (13), or (14), or (15), 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.
    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
subdivision 40, must not be filed until after June 30, 2009.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2008, section 297A.995, subdivision 10, is amended to
read:
    Subd. 10. Relief from certain liability. (a) Notwithstanding subdivision 9, sellers
and certified service providers are relieved from liability to the state for having charged
and collected the incorrect amount of sales or use tax resulting from the seller or certified
service provider (1) relying on erroneous data provided by the commissioner in the
database files on tax rates, boundaries, or taxing jurisdiction assignments, or (2) relying
on erroneous data provided by the state in its taxability matrix concerning the taxability
of products and services.
    (b) Notwithstanding subdivision 9, sellers and certified service providers are
relieved from liability to the state for having charged and collected the incorrect amount
of sales or use tax resulting from the seller or certified service provider relying on the
certification by the commissioner as to the accuracy of a certified automated system as to
the taxability of product categories. The relief from liability provided by this paragraph
does not apply when the sellers or certified service providers have incorrectly classified
an item or transaction into a product category, unless the item or transaction within a
product category was approved by the commissioner or approved jointly by the states that
are signatories to the agreement. The sellers and certified service providers must revise a
classification within ten days after receipt of notice from the commissioner that an item or
transaction within a product category is incorrectly classified as to its taxability, or they
are not relieved from liability for the incorrect classification following the notification.
(c) Notwithstanding subdivision 9, if there are not at least 30 days between the
enactment of a new tax rate and the effective date of the new rate, sellers and certified
service providers shall be relieved from liability for failing to collect tax at the new rate
during the first 30 days of the rate change, beginning on the day after the date of enactment
of the rate change, provided the seller or certified service provider continued to impose
and collect the tax at the immediately preceding tax rate during this period. Relief from
liability provided by this paragraph shall not apply if the failure to collect at the newly
effective rate extends beyond 30 days after the enactment of the new rate. The relief
provided by this paragraph shall not apply if the commissioner determines that the seller or
certified service provider fraudulently failed to collect at the new rate or that the seller or
certified service provider solicited purchasers based on the immediately preceding tax rate.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2008, section 297A.995, subdivision 11, is amended to
read:
    Subd. 11. Purchaser relief from certain liability. (a) Notwithstanding other
provisions in the law, a purchaser is relieved from liability resulting from having paid
the incorrect amount of sales or use tax if a purchaser, whether or not holding a the
commissioner gave the purchaser direct pay permit authorization, or a purchaser's seller or
certified service provider relied on erroneous data provided by this state in the database
files on tax rates, boundaries, taxing jurisdiction assignments, or in the taxability matrix.
After providing an address-based database for assigning taxing jurisdictions and their
associated rates, no relief for errors resulting from the purchaser's reliance on a database
using zip codes is allowed.
    (b) With respect to reliance on the taxability matrix provided by this state in
paragraph (a), relief is limited to erroneous classifications in the taxability matrix for
items included within the classifications as "taxable," "exempt," "included in sales
price," "excluded from sales price," "included in the definition," and "excluded from
the definition."
(c) Notwithstanding other provisions in the law, if there are not at least 30 days
between the enactment of a new tax rate and the effective date of the new rate, a purchaser
shall be relieved from liability resulting from failing to pay the tax at the new rate during
the first 30 days of the rate change, beginning on the day after the date of enactment of
the rate change, whether or not the purchaser has been given direct pay authorization by
the commissioner. Relief from liability provided by this paragraph shall not apply if the
failure to pay at the newly effective rate extends beyond 30 days after the enactment of
the new rate, and shall not apply to a purchaser that did not continue to pay the tax at the
immediately preceding tax rate during the 30-day period. The relief provided by this
paragraph shall not apply if the commissioner determines that the purchaser fraudulently
failed to pay at the new rate.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. [645.025] SPECIAL LAWS; LOCAL TAXES.
    Subdivision 1. Definitions. (a) If a special law grants a local government unit
or group of units the authority to impose a local tax other than sales tax, including but
not limited to taxes such as lodging, entertainment, admissions, or food and beverage
taxes, and the Department of Revenue either has agreed to or is required to administer
the tax, such that the tax is reported and paid with the chapter 297A taxes, then the local
government unit or group of units must adopt each definition used in the special law
as follows:
(1) the definition must be identical to the definition found in chapter 297A or in
Minnesota Rules, chapter 8130; or
(2) if the specific term is not defined either in chapter 297A or in Minnesota Rules,
chapter 8130, then the definition must be consistent with the position of the Department of
Revenue as to the extent of the tax base.
(b) This subdivision does not apply to terms that are defined by the authorizing
special law.
    Subd. 2. Application. This section applies to a special law that is described in
subdivision 1 that was:
(1) originally enacted prior to 2010, and that was amended by special law in or after
2010, to extend the time for imposing the tax or to modify the tax base; or
(2) first enacted in or after 2010.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Laws 2009, chapter 88, article 4, section 5, the effective date, is amended to
read:
EFFECTIVE DATE.This section is effective July 1, 2009, and applies to
registrations leases or rentals made or renewed on or after that date.
EFFECTIVE DATE.This section is effective retroactively for leases or rentals
made or renewed after June 30, 2009.

ARTICLE 5
LOCAL SALES TAX

    Section 1. Laws 1999, chapter 243, article 4, section 18, subdivision 3, as amended by
Laws 2008, chapter 366, article 7, section 13, is amended to read:
    Subd. 3. Use of revenues. (a) Revenues received from taxes authorized by
subdivisions 1 and 2 must be used by the city to pay the cost of collecting the taxes and to
pay for construction and improvement of the following city facilities:
    (1) streets; and
    (2) constructing and equipping the Proctor community activity center.
    Authorized expenses include, but are not limited to, acquiring property, paying
construction and operating expenses related to the development of an authorized facility,
and paying debt service on bonds or other obligations, including lease obligations, issued
to finance the construction, expansion, or improvement of an authorized facility. The
capital expenses for all projects authorized under this paragraph that may be paid with
these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance
of the bonds.
    (b) Additional revenues received from taxes authorized by subdivision 1, may be
used by the city to pay for the following capital improvement projects: public utilities,
including water, sanitary sewer, storm sewer, and electric; sidewalks; bikeways and trails;
and parks and recreation.
EFFECTIVE DATE.This section is effective the day following final enactment,
upon compliance by the city of Proctor with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.

    Sec. 2. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to read:
    Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota
Statutes, chapter 475, to finance the capital expenditure and improvement projects
described in subdivision 3. An election to approve the bonds under Minnesota Statutes,
section 475.58, is not required.
    (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes,
sections 275.60 and 279.61.
    (c) The bonds are not included in computing any debt limitation applicable to the
city, and the 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.
    (d) The aggregate principal amount of bonds, plus the aggregate of the taxes
used directly to pay eligible capital expenditures and improvements, may not exceed
$3,600,000, plus an amount equal to the costs related to issuance of the bonds, including
interest on the bonds $10,000,000.
    (e) The sales and use and excise taxes authorized in this section may be pledged to
and used for the payment of the bonds and any bonds issued to refund them only if the
bonds and any refunding bonds are general obligations of the city.
EFFECTIVE DATE.This section is effective when approved by the voters at a
general or special election held within two years after enactment of this section and upon
compliance by the city of Proctor with Minnesota Statutes, section 645.021, subdivisions
2 and 3.

    Sec. 3. Laws 2002, chapter 377, article 3, section 25, as amended by Laws 2009,
chapter 88, article 4, section 19, is amended to read:
    Sec. 25. ROCHESTER LODGING TAX.
    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
tax of one percent on the gross receipts from the furnishing for consideration of lodging at
a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
for a continuous period of 30 days or more.
    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190 or
477A.016, or any other law, and in addition to the tax authorized by subdivision 1, the city
of Rochester may impose an additional tax of one percent on the gross receipts from the
furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
resort, other than the renting or leasing of it for a continuous period of 30 days or more only
upon the approval of the city governing body of a total financial package for the project.
    Subd. 2. Disposition of proceeds. (a) The gross proceeds from the tax imposed
under subdivision 1 must be used by the city to fund a local convention or tourism bureau
for the purpose of marketing and promoting the city as a tourist or convention center.
(b) The gross proceeds from the one percent tax imposed under subdivision 1a shall
be used to pay for (1) construction, renovation, improvement, and expansion of the Mayo
Civic Center and related skyway access, lighting, parking, or landscaping; and (2) for
payment of any principal, interest, or premium on bonds issued to finance the construction,
renovation, improvement, and expansion of the Mayo Civic Center Complex.
    Subd. 2a. Bonds. The city of Rochester may issue, without an election, general
obligation bonds of the city, in one or more series, in the aggregate principal amount
not to exceed $43,500,000, to pay for capital and administrative costs for the design,
construction, renovation, improvement, and expansion of the Mayo Civic Center Complex,
and related skyway, access, lighting, parking, and landscaping. The city may pledge
the lodging tax authorized by subdivision 1a and the food and beverage tax authorized
under Laws 2009, chapter 88, article 4, section 23, to the payment of the bonds. The debt
represented by the bonds is not included in computing any debt limitations applicable to
the city, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the
principal of and interest on the bonds is not subject to any levy limitation or included in
computing or applying any levy limitation applicable to the city.
    Subd. 3. Expiration of taxing authority. The authority of the city to impose a tax
under subdivision 1a shall expire when the principal and interest on any bonds or other
obligations issued prior to December 31, 2014, to finance the construction, renovation,
improvement, and expansion of the Mayo Civic Center Complex and related skyway
access, lighting, parking, or landscaping have been paid, including any bonds issued to
refund such bonds, or at an earlier time as the city shall, by ordinance, determine. Any
funds remaining after completion of the project and retirement or redemption of the bonds
shall be placed in the general fund of the city.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 4. Laws 2009, chapter 88, article 4, section 23, subdivision 4, is amended to read:
    Subd. 4. Expiration of taxing authority. The authority granted under subdivision
1 to the city to impose a one percent tax on food and beverages shall expire when the
principal and interest on any bonds or other obligations issued prior to December 31,
2014, to finance the construction, renovation, improvement, and expansion of the Mayo
Civic Center Complex and related skyway access, lighting, parking, or landscaping, and
any bonds issued to refund such bonds, have been paid or at an earlier time as the city
shall, by ordinance, determine. Any funds remaining after completion of the project and
retirement or redemption of the bonds shall be placed in the general fund of the city.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 5. CITY OF DETROIT LAKES; LOCAL TAXES AUTHORIZED.
    Subdivision 1. Food and beverage tax authorized. Notwithstanding Minnesota
Statutes, section 477A.016, or any ordinance, city charter, or other provision of law, the
city of Detroit Lakes may, if approved by the voters at a general or special election held
within two years of enactment of this section, impose a sales tax of up to one percent on
the gross receipts of all food and beverages sold by a restaurant or place of refreshment,
as defined by resolution 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 pay all or a portion of the
expenses of the following projects:
(1) control of flowering rush infestation;
(2) construction and improvement of bike trail facilities;
(3) parking improvements near public facilities; and
(4) redevelopment of the area returned to the city as a result of realignment of
Highway 10.
    Subd. 3. Expiration of taxing authority. The taxes authorized under subdivision 1
expire when the governing body of the city determines that sufficient revenues have been
raised to finance the projects in subdivision 2, including the amount to prepay to retire at
maturity the principal, interest, and premium due on any bonds issued for the projects.
    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, section 297A.99, related to collection, administration, and
enforcement apply.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Detroit Lakes and its chief clerical officer comply with Minnesota Statutes,
section 645.021, subdivisions 2 and 3.

    Sec. 6. CITY OF MARSHALL; LOCAL TAXES AUTHORIZED.
    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
297A.99, subdivisions 1, 2, and 3, or 477A.016, or any other law, ordinance, or city
charter, the city of Marshall, if imposed within two years of the date of final enactment of
this section, may impose any or all of the taxes described in this section.
    Subd. 2. Bonds. (a) The city of Marshall may issue bonds under Minnesota Statutes,
chapter 475, to finance all or a portion of the costs of the new and existing facilities of the
Minnesota Emergency Response and Industry Training Center and all or part of the costs
of the facilities of the Southwest Minnesota Regional Amateur Sports Center, and may
issue bonds to refund bonds previously issued. Authorized expenses include, but are not
limited to, acquiring property, predesign, design, and paying construction, furnishing, and
equipment costs related to these facilities. The aggregate principal amount of bonds issued
under this subdivision may not exceed $17,290,000, 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 Marshall.
(b) The bonds are not included in computing any debt limitation applicable to the
city of Marshall, and any levy of taxes under Minnesota Statutes, section 475.61, to pay
principal and interest on the bonds, is not subject to any levy limitation. A separate
election to approve the bonds under Minnesota Statutes, section 475.58, is not required.
    Subd. 3. Lodging tax. The city of Marshall may impose by ordinance a tax of up to
1-1/2 percent on the gross receipts subject to the lodging tax under Minnesota Statutes,
section 469.190, for the purposes specified in subdivision 4. This lodging tax is in addition
to any tax imposed under Minnesota Statutes, section 469.190, and may be imposed within
a tax district defined by the city council.
    Subd. 4. Use of lodging tax revenues. The revenues derived from the tax imposed
under subdivision 3 must be used by the city of Marshall to pay the costs of collecting
and administering the lodging tax, to pay all or part of the operating costs of the new and
existing facilities of the Minnesota Emergency Response and Industry Training Center,
including the payment of debt service on bonds issued under subdivision 2, and to pay
all or part of the operating costs of the facilities of the Southwest Minnesota Regional
Amateur Sports Center, including the payment of debt service on bonds issued under
subdivision 2.
    Subd. 5. Food and beverages tax. The city of Marshall may impose, if approved
by the voters at a general or special election held within two years of enactment of
this section, an additional sales tax of up to 1-1/2 percent on gross receipts of food and
beverages sold primarily for consumption on the premises by restaurants and places of
refreshment that occur in the city of Marshall. The provisions of Minnesota Statutes,
section 297A.99, except subdivisions 1, 2, and 3, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.
    Subd. 6. Use of food and beverages tax. The revenues derived from the tax
imposed under subdivision 5 must be used by the city of Marshall to pay the costs of
collecting and administering the food and beverages tax, to pay all or part of the operating
costs of the new and existing facilities of the Minnesota Emergency Response and
Industry Training Center, including the payment of debt service on bonds issued under
subdivision 2, and to pay all or part of the operating costs of the facilities of the Southwest
Minnesota Regional Amateur Sports Center, including the payment of debt service on
bonds issued under subdivision 2.
    Subd. 7. Termination of taxes. The taxes imposed under subdivisions 3 and 5
expire at the earlier of (1) 30 years after the tax is first imposed, or (2) when the city
council determines that the amount of revenues received from the taxes to pay for the
capital, operating, and administrative costs of the facilities under subdivisions 2, 4,
and 6 first equals or exceeds the amount authorized to be spent for the facilities plus
the additional amount needed to pay the costs related to issuance of the bonds under
subdivision 2, including interest on the bonds. Any funds remaining after payment of all
the costs and retirement or redemption of the bonds must be placed in the general fund of
the city. The taxes imposed under subdivisions 3 and 5 may expire at an earlier time if the
city so determines by ordinance.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Marshall with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.

    Sec. 7. GIANTS RIDGE RECREATION AREA TAXING AUTHORITY.
    Subdivision 1. Additional taxes authorized. Notwithstanding Minnesota Statutes,
section 477A.016, or any other law, ordinance, or charter provision to the contrary, the
city of Biwabik, upon approval both by its governing body and by the vote of at least
seven members of the Iron Range Resources and Rehabilitation Board, may impose any or
all of the taxes described in this section.
    Subd. 2. Use of proceeds. The proceeds of any taxes imposed under this section,
less refunds and costs of collection, must be deposited into the Iron Range Resources and
Rehabilitation Board account enterprise fund created under the provisions of Minnesota
Statutes, section 298.221, paragraph (c), and must be dedicated and expended by the
commissioner of the Iron Range Resources and Rehabilitation Board, upon approval by
the vote of at least seven members of the Iron Range Resources and Rehabilitation Board,
to pay costs for the construction, renovation, improvement, expansion, and maintenance
of public recreational facilities located in those portions of the city within the Giants
Ridge Recreation Area as defined in Minnesota Statutes, section 298.22, subdivision 7, or
to pay any principal, interest, or premium on any bond issued to finance the construction,
renovation, improvement, or expansion of such public recreational facilities.
    Subd. 3. Lodging tax. The city of Biwabik, upon approval both by its governing
body and by the vote of at least seven members of the Iron Range Resources and
Rehabilitation Board, may impose, by ordinance, a tax of not more than five percent on the
gross receipts subject to the lodging tax under Minnesota Statutes, section 469.190. This
tax is in addition to any tax imposed under Minnesota Statutes, section 469.190, and may
be imposed only on gross lodging receipts generated within the Giants Ridge Recreation
Area as defined in Minnesota Statutes, section 298.22, subdivision 7.
    Subd. 4. Admissions and recreation tax. (a) The city of Biwabik, upon approval
both by its governing body and by the vote of at least seven members of the Iron Range
Resources and Rehabilitation Board, may impose, by ordinance, a tax of not more than five
percent on admission receipts to entertainment and recreational facilities and on receipts
from the rental of recreation equipment, at sites within the Giants Ridge Recreation Area as
defined in Minnesota Statutes, section 298.22, subdivision 7. The provisions of Minnesota
Statutes, section 297A.99, except for subdivisions 2 and 3, govern the imposition,
administration, collection, and enforcement of the tax authorized in this subdivision.
(b) If the city imposes the tax under paragraph (a), it must include in the ordinance
an exemption for purchases of season tickets or passes.
    Subd. 5. Food and beverage tax. The city of Biwabik, upon approval both by its
governing body and by the vote of at least seven members of the Iron Range Resources
and Rehabilitation Board, may impose, by ordinance, an additional sales tax of not more
than one percent on gross receipts of food and beverages sold whether it is consumed on
or off the premises by restaurants and places of refreshment as defined by resolution of the
city within the Giants Ridge Recreation Area as defined in Minnesota Statutes, section
298.22, subdivision 7. The provisions of Minnesota Statutes, section 297A.99, except for
subdivisions 2 and 3, govern the imposition, administration, collection, and enforcement
of the tax authorized in this subdivision.
EFFECTIVE DATE.This section shall be effective the day after compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3, by the governing body of the
city of Biwabik. Notwithstanding Minnesota Statutes, section 645.021, subdivision 3, the
city may comply with Minnesota Statutes, section 645.021, at any time before January
1, 2012.

ARTICLE 6
SPECIAL TAXES

    Section 1. Minnesota Statutes 2008, section 60A.209, subdivision 1, is amended to
read:
    Subdivision 1. Authorization; regulation. A resident of this state may obtain
insurance from an ineligible surplus lines insurer in this state through a surplus lines
licensee. The licensee shall first attempt to place the insurance with a licensed insurer, or
if that is not possible, with an eligible surplus lines insurer. If coverage is not obtainable
from a licensed insurer or an eligible surplus lines insurer, the licensee shall certify to the
commissioner, on a form prescribed by the commissioner, that these attempts were made.
Upon obtaining coverage from an ineligible surplus lines insurer, the licensee shall:
(a) Have printed, typed, or stamped in red ink upon the face of the policy in
not less than 10-point type the following notice: "THIS INSURANCE IS ISSUED
PURSUANT TO THE MINNESOTA SURPLUS LINES INSURANCE ACT. THIS
INSURANCE IS PLACED WITH AN INSURER THAT IS NOT LICENSED BY THE
STATE NOR RECOGNIZED BY THE COMMISSIONER OF COMMERCE AS AN
ELIGIBLE SURPLUS LINES INSURER. IN CASE OF ANY DISPUTE RELATIVE
TO THE TERMS OR CONDITIONS OF THE POLICY OR THE PRACTICES OF
THE INSURER, THE COMMISSIONER OF COMMERCE WILL NOT BE ABLE TO
ASSIST IN THE DISPUTE. IN CASE OF INSOLVENCY, PAYMENT OF CLAIMS IS
NOT GUARANTEED." The notice may not be covered or concealed in any manner; and
(b) Collect from the insured appropriate premium taxes, as provided under chapter
297I, and report the transaction to the commissioner of revenue on a form prescribed by
the commissioner. If the insured fails to pay the taxes when due, the insured shall be
subject to a civil fine of not more than $3,000, plus accrued interest from the inception of
the insurance.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2008, section 295.55, subdivision 2, is amended to read:
    Subd. 2. Estimated tax; hospitals; surgical centers. (a) Each hospital or surgical
center must make estimated payments of the taxes for the calendar year in monthly
installments to the commissioner within 15 days after the end of the month.
(b) Estimated tax payments are not required of hospitals or surgical centers if: (1)
the tax for the current calendar year is less than $500 or less; or (2) the tax for the previous
calendar year is less than $500, if the taxpayer had a tax liability and was doing business
the entire year or less.
(c) Underpayment of estimated installments bear interest at the rate specified in
section 270C.40, from the due date of the payment until paid or until the due date of the
annual return whichever comes first. An underpayment of an estimated installment is the
difference between the amount paid and the lesser of (1) 90 percent of one-twelfth of the
tax for the calendar year or (2) one-twelfth of the total tax for the previous calendar year
if the taxpayer had a tax liability and was doing business the entire year.
EFFECTIVE DATE.This section is effective for gross revenues received after
December 31, 2010.

    Sec. 3. Minnesota Statutes 2008, section 295.55, subdivision 3, is amended to read:
    Subd. 3. Estimated tax; other taxpayers. (a) Each taxpayer, other than a hospital
or surgical center, must make estimated payments of the taxes for the calendar year in
quarterly installments to the commissioner by April 15, July 15, October 15, and January
15 of the following calendar year.
(b) Estimated tax payments are not required if: (1) the tax for the current calendar
year is less than $500 or less; or (2) the tax for the previous calendar year is less than
$500, if the taxpayer had a tax liability and was doing business the entire year or less.
(c) Underpayment of estimated installments bear interest at the rate specified in
section 270C.40, from the due date of the payment until paid or until the due date of the
annual return whichever comes first. An underpayment of an estimated installment is the
difference between the amount paid and the lesser of (1) 90 percent of one-quarter of the
tax for the calendar year or (2) one-quarter of the total tax for the previous calendar year
if the taxpayer had a tax liability and was doing business the entire year.
EFFECTIVE DATE.This section is effective for gross revenues received after
December 31, 2010.

    Sec. 4. [296A.061] CANCELLATION OR NONRENEWAL OF LICENSES.
The commissioner may cancel a license or not renew a license if one of the following
conditions occurs:
(1) the license holder has not filed a petroleum tax return or report for at least one
year;
(2) the license holder has not reported any petroleum tax liability on the license
holder's returns or reports for at least one year; or
(3) the license holder requests cancellation of the license.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2008, section 297F.01, subdivision 22a, is amended to read:
    Subd. 22a. Weighted average retail price. "Weighted average retail price" means
(1) the average retail price per pack of 20 cigarettes, with the average price weighted by
the number of packs sold at each price, (2) reduced by the sales tax included in the retail
price, and (3) adjusted for the expected inflation from the time of the survey to the average
of the 12 months that the sales tax will be imposed. The commissioner shall make the
inflation adjustment in accordance with the Consumer Price Index for all urban consumers
inflation indicator as published in the most recent state budget forecast. The inflation
factor for the calendar year in which the new tax rate takes effect must be used. If the
survey indicates that the average retail price of cigarettes has not increased relative to the
average retail price in the previous year's survey, then no inflation adjustment must be
made as provided in section 297F.25, subdivision 1.
EFFECTIVE DATE.This section is effective January 1, 2011.

    Sec. 6. Minnesota Statutes 2008, section 297F.04, is amended by adding a subdivision
to read:
    Subd. 2a. Cancellation or nonrenewal. The commissioner may cancel a license or
not renew a license if one of the following conditions occurs:
(1) the license holder has not filed a cigarette or tobacco products tax return for at
least one year;
(2) the license holder has not reported any cigarette or tobacco products tax liability
on the license holder's returns for at least one year; or
(3) the license holder requests cancellation of the license.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2008, section 297F.07, subdivision 4, is amended to read:
    Subd. 4. Sales to nonqualified buyers. A retailer who sells or otherwise disposes of
unstamped or untaxed stock other than to a qualified purchaser shall collect from the buyer
or transferee the tax imposed by section 297F.05, and remit the tax to the Department of
Revenue at the same time and manner as required by section 297F.09. If the retailer fails
to collect the tax from the buyer or transferee, or fails to remit the tax, the retailer is
personally responsible for the tax and the commissioner may seize any product destined to
be delivered to the retailer. The product so seized shall be considered contraband and be
subject to the procedures outlined in section 297F.21, subdivision 3. The proceeds of the
sale of the stock may be applied to any tax liability owed by the retailer after deducting all
costs and expenses.
This section does not relieve the buyer or possessor of unstamped or untaxed stock
from personal liability for the tax.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2008, section 297F.25, subdivision 1, is amended to read:
    Subdivision 1. Imposition. (a) A tax is imposed on distributors on the sale of
cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this
state. The tax is equal to 6.5 percent of the weighted average retail price. The weighted
average retail price and must be expressed in cents per pack when rounded to the nearest
one-tenth of a cent. The weighted average retail price must be determined annually,
with new rates published by May November 1, and effective for sales on or after August
January 1 of the following year. The weighted average retail price must be established
by surveying cigarette retailers statewide in a manner and time determined by the
commissioner. The commissioner shall make an inflation adjustment in accordance with
the Consumer Price Index for all urban consumers inflation indicator as published in the
most recent state budget forecast. The commissioner shall use the inflation factor for
the calendar year in which the new tax rate takes effect. If the survey indicates that the
average retail price of cigarettes has not increased relative to the average retail price in
the previous year's survey, then the commissioner shall not make an inflation adjustment.
The determination of the commissioner pursuant to this subdivision is not a "rule" and is
not subject to the Administrative Procedure Act contained in chapter 14. As of August 1,
2005, the tax is 25.5 cents per pack of 20 cigarettes. For packs of cigarettes with other
than 20 cigarettes, the tax must be adjusted proportionally.
(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the
tax calculation of the weighted average retail price for the sales of cigarettes from August
1, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average
retail price per pack of 20 cigarettes from the most recent survey by the percentage change
in a weighted average of the presumed legal prices for cigarettes during the year after
completion of that survey, as reported and published by the Department of Commerce
under section 325D.371; (2) subtracting the sales tax included in the retail price; and (3)
adjusting for expected inflation. The rate must be published by May 1 and is effective for
sales after July 31. If the weighted average of the presumed legal prices indicates that the
average retail price of cigarettes has not increased relative to the average retail price in the
most recent survey, then no inflation adjustment must be made. For packs of cigarettes
with other than 20 cigarettes, the tax must be adjusted proportionally.
EFFECTIVE DATE.This section is effective January 1, 2011.

    Sec. 9. Minnesota Statutes 2008, section 297I.01, subdivision 9, is amended to read:
    Subd. 9. Gross premiums. "Gross premiums" means total premiums paid by
policyholders and applicants of policies, whether received in the form of money or other
valuable consideration, on property, persons, lives, interests and other risks located,
resident, or to be performed in this state, but excluding consideration and premiums for
reinsurance assumed from other insurance companies.
The term (a) "Gross premiums" includes the total consideration paid to bail bond
agents for bail bonds.
(b) For title insurance companies, "gross premiums" means the charge for title
insurance made by a title insurance company or its agents according to the company's rate
filing approved by the commissioner of commerce without a deduction for commissions
paid to or retained by the agent. Gross premiums of a title insurance company does not
include any other charge or fee for abstracting, searching, or examining the title, or
escrow, closing, or other related services.
The term (c) "Gross premiums" includes any workers' compensation special
compensation fund premium surcharge pursuant to section 176.129.
(d) "Gross premiums" for surplus lines insurance includes all related charges,
commissions, and fees received by the licensee. Gross premiums does not include the
stamping fee, as provided under section 60A.2085, subdivision 7, nor the operating
assessment, as provided under section 60A.208, subdivision 8.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2008, section 297I.05, subdivision 7, is amended to read:
    Subd. 7. Surplus lines tax. (a) A tax is imposed on surplus lines licensees. The rate
of tax is equal to three percent of the gross premiums less return premiums received by the
licensee minus any licensee association operating assessments paid under section 60A.208.
(b) If surplus lines insurance placed by a surplus lines licensee and taxed under this
subdivision covers a subject of insurance residing, located, or to be performed outside
this state, a proper pro rata portion of the entire premium payable for all of that insurance
must be allocated according to the subjects of insurance residing, located, or to be
performed in this state.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2008, section 297I.30, subdivision 1, is amended to read:
    Subdivision 1. General rule. On or before March 1, every insurer taxpayer subject
to taxation under section 297I.05, subdivisions 1 to 6 5, and 9, 10, 12, paragraphs
(a), clauses (1) to (5) (4), and (b), (c), and (d), and 14, shall file an annual return for
the preceding calendar year setting forth such information as the commissioner may
reasonably require on forms in the form prescribed by the commissioner.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2008, section 297I.30, subdivision 2, is amended to read:
    Subd. 2. Surplus lines licensees and purchasing groups. On or before February 15
and August 15 of each year, every surplus lines licensee subject to taxation under section
297I.05, subdivision 7, and every purchasing group or member of a purchasing group
subject to tax under section 297I.05, subdivision 12, paragraph (a), clause (6) (5), shall file
a return with the commissioner for the preceding six-month period ending December 31,
or June 30, setting forth any information the commissioner reasonably prescribes on forms
in the form prescribed by the commissioner.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2008, section 297I.30, subdivision 7, is amended to read:
    Subd. 7. Surcharge. (a)(1) By April 30 of each year, every company required to pay
the surcharge under section 297I.10, subdivision 1, shall file a return for the five-month
period ending March 31 setting forth any information the commissioner reasonably
requires on forms in the form prescribed by the commissioner.
(2) (b) By June 30 of each year, every company required to pay the surcharge under
section 297I.10, subdivision 1, shall file a return for the two-month period ending May 31
setting forth any information the commissioner reasonably requires on forms in the form
prescribed by the commissioner.
(3) (c) By November 30 of each year, every company required to pay the surcharge
under section 297I.10, subdivision 1, shall file a return for the five-month period ending
October 31 setting forth any information the commissioner reasonably requires on forms
in the form prescribed by the commissioner.
(b) By February 15 and August 15 of each year, every company required to pay
a surcharge under section 297I.10, subdivision 2, must file a return for the preceding
six-month period ending December 31 and June 30.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2008, section 297I.30, subdivision 8, is amended to read:
    Subd. 8. Fire insurance surcharge. On or before May 15, August 15, November
15, and February 15 of each year, every insurer required to pay the surcharge under
section 297I.06, subdivisions 1 and 2, shall file a return with the commissioner for the
preceding three-month period ending March 31, June 30, September 30, and December
31, setting forth any information the commissioner reasonably requires on forms in the
form prescribed by the commissioner.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Minnesota Statutes 2009 Supplement, section 297I.35, subdivision 2, is
amended to read:
    Subd. 2. Electronic payments. If the aggregate amount of tax and surcharges
due under this chapter during a calendar fiscal year ending June 30 is equal to or
exceeds $10,000, or if the taxpayer is required to make payment of any other tax to the
commissioner by electronic means, then all tax and surcharge payments in the subsequent
calendar year must be paid by electronic means.
EFFECTIVE DATE.This section is effective for payments due in calendar year
2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30,
2009, and in fiscal years thereafter.

    Sec. 16. Minnesota Statutes 2008, section 297I.40, subdivision 1, is amended to read:
    Subdivision 1. Requirement to pay. On or before March 15, June 15, September
15, and December 15 of the current year, every taxpayer subject to tax under section
297I.05, subdivisions 1 to 6 5, and 12, paragraphs paragraph (a), clauses (1) to (5), (b),
and (e) (4), and 14, must pay to the commissioner an installment equal to one-fourth of the
insurer's total estimated tax for the current year.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 17. Minnesota Statutes 2008, section 297I.40, subdivision 5, is amended to read:
    Subd. 5. Definition of tax. The term "tax" as used in this section means the tax
imposed by section 297I.05, subdivisions 1 to 6 5, 11, and 12, paragraphs (a), clauses (1)
to (5) (4), (b), and (d), and 14, less any offset in section 297I.20.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 18. Minnesota Statutes 2008, section 297I.65, is amended by adding a subdivision
to read:
    Subd. 4. Omission in excess of 25 percent. Additional taxes or surcharges may be
assessed within 6-1/2 years after the due date of the return or the date the return was filed,
whichever is later, if the taxpayer omits from a gross premiums tax or surcharge return an
amount of tax in excess of 25 percent of the tax or surcharge reported in the return.
EFFECTIVE DATE.This section is effective for premium taxes due after
December 31, 2010.

    Sec. 19. Minnesota Statutes 2008, section 298.282, subdivision 1, is amended to read:
    Subdivision 1. Distribution of taconite municipal aid account. The amount
deposited with the county as provided in section 298.28, subdivision 3, must be distributed
as provided by this section among: (1) the municipalities comprising a tax relief taconite
assistance area under section 273.134, paragraph (b) 273.1341; (2) a township that
contains a state park consisting primarily of an underground iron ore mine; and (3) a city
located within five miles of that state park, each being referred to in this section as a
qualifying municipality.
EFFECTIVE DATE.This section is effective for distributions made after the
day following final enactment.

    Sec. 20. REPEALER.
Minnesota Statutes 2008, section 297I.30, subdivisions 4, 5, and 6, are repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 7
PUBLIC FINANCE

    Section 1. Minnesota Statutes 2008, section 103D.335, subdivision 17, is amended to
read:
    Subd. 17. Borrowing funds. The managers may borrow funds from an agency of
the federal government, a state agency, a county where the watershed district is located
in whole or in part, or a financial institution authorized under chapter 47 to do business
in this state. A county board may lend the amount requested by a watershed district. A
watershed district may not have more than a total of $600,000 $2,000,000 in loans from
counties and financial institutions under this subdivision outstanding at any time.

    Sec. 2. Minnesota Statutes 2008, section 373.40, subdivision 1, is amended to read:
    Subdivision 1. Definitions. For purposes of this section, the following terms have
the meanings given.
(a) "Bonds" means an obligation as defined under section 475.51.
(b) "Capital improvement" means acquisition or betterment of public lands,
buildings, or other improvements within the county for the purpose of a county
courthouse, administrative building, health or social service facility, correctional facility,
jail, law enforcement center, hospital, morgue, library, park, qualified indoor ice arena,
roads and bridges, and the acquisition of development rights in the form of conservation
easements under chapter 84C. An improvement must have an expected useful life of
five years or more to qualify. "Capital improvement" does not include light rail transit
or any activity related to it or a recreation or sports facility building (such as, but not
limited to, a gymnasium, ice arena, racquet sports facility, swimming pool, exercise room
or health spa), unless the building is part of an outdoor park facility and is incidental to
the primary purpose of outdoor recreation.
(c) "Metropolitan county" means a county located in the seven-county metropolitan
area as defined in section 473.121 or a county with a population of 90,000 or more.
(d) "Population" means the population established by the most recent of the
following (determined as of the date the resolution authorizing the bonds was adopted):
(1) the federal decennial census,
(2) a special census conducted under contract by the United States Bureau of the
Census, or
(3) a population estimate made either by the Metropolitan Council or by the state
demographer under section 4A.02.
(e) "Qualified indoor ice arena" means a facility that meets the requirements of
section 373.43.
(f) "Tax capacity" means total taxable market value, but does not include captured
market value.

    Sec. 3. Minnesota Statutes 2008, section 383B.79, subdivision 5, is amended to read:
    Subd. 5. Financing. Hennepin County may appropriate funds for any of the
activities described in subdivision 1, whether or not state funds are appropriated for the
activity. Hennepin County may include any part of the costs of a project described in
section 469.002, subdivision 12, in a capital improvement plan adopted under section
373.40, and may issue bonds for such purposes pursuant to and subject to the procedures
and limitations set forth in section 373.40, whether or not the capital improvement to be
financed is to be owned by the county or any other governmental entity. Such purposes are
in addition to the capital improvements described in section 373.40, but shall not include
light rail transit, commuter rail, or any activity related to either of those, or a sports facility
building designed or used primarily for professional sports. No funds appropriated under
this subdivision may be used to pay operating expenses.

    Sec. 4. Minnesota Statutes 2009 Supplement, section 429.011, subdivision 2a, is
amended to read:
    Subd. 2a. Municipality; certain counties. "Municipality" also includes the
following:
(1) a county in the case of construction, reconstruction, or improvement of a county
state-aid highway;
(2) a county in the case of construction, reconstruction, or improvement of a county
highway as defined in section 160.02 including curbs and gutters and storm sewers;
(3) a county exercising its powers and duties under section 444.075, subdivision 1;
(4) a county for expenses not paid for under section 403.113, subdivision 3,
paragraph (b), clause (3); and
(5) a county in the case of the abatement of nuisances; and
(6) a county operating an energy improvements financing program under section
216C.436.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2008, section 469.101, subdivision 1, is amended to read:
    Subdivision 1. Establishment. An economic development authority may create and
define the boundaries of economic development districts at any place or places within the
city if the district satisfies the requirements of section 469.174, subdivision 10, except that
the district boundaries must be contiguous, and may use the powers granted in sections
469.090 to 469.108 to carry out its purposes. First the authority must hold a public hearing
on the matter. At least ten days before the hearing, the authority shall publish notice of
the hearing in a daily newspaper of general circulation in the city. Also, the authority
shall find that an economic development district is proper and desirable to establish and
develop within the city.
EFFECTIVE DATE.This section is effective for economic development districts
created after the day following final enactment.

    Sec. 6. Minnesota Statutes 2008, section 469.319, subdivision 5, is amended to read:
    Subd. 5. Waiver authority. (a) The commissioner may waive all or part of a
repayment required under subdivision 1, if the commissioner, in consultation with
the commissioner of employment and economic development and appropriate officials
from the local government units in which the qualified business is located, determines
that requiring repayment of the tax is not in the best interest of the state or the local
government units and the business ceased operating as a result of circumstances beyond
its control including, but not limited to:
    (1) a natural disaster;
    (2) unforeseen industry trends; or
    (3) loss of a major supplier or customer.
    (b)(1) The commissioner shall waive repayment required under subdivision 1a if
the commissioner has waived repayment by the operating business under subdivision 1,
unless the person that received benefits without having to operate a business in the zone
was a contributing factor in the qualified business becoming subject to repayment under
subdivision 1;
    (2) the commissioner shall waive the repayment required under subdivision 1a, even
if the repayment has not been waived for the operating business if:
    (i) the person that received benefits without having to operate a business in the zone
and the business that operated in the zone are not related parties as defined in section
267(b) of the Internal Revenue Code of 1986, as amended through December 31, 2007; and
    (ii) actions of the person were not a contributing factor in the qualified business
becoming subject to repayment under subdivision 1.
(c) Requests for waiver must be made no later than 60 days after the notice date of
an order issued under subdivision 4, paragraph (d), or, in the case of property taxes, within
60 days of the date of a tax statement issued under subdivision 4, paragraph (c).
EFFECTIVE DATE.This section is effective for waivers requested in response
to notices issued after the day following final enactment.

    Sec. 7. Minnesota Statutes 2008, section 469.3193, is amended to read:
469.3193 CERTIFICATION OF CONTINUING ELIGIBILITY FOR JOBZ
BENEFITS.
    (a) By December 1 October 15 of each year, every qualified business must certify
to the commissioner of revenue, on a form prescribed by the commissioner of revenue,
whether it is in compliance with any agreement required as a condition for eligibility for
benefits listed under section 469.315. A business that fails to submit the certification, or
any business, including those still operating in the zone, that submits a certification that
the commissioner of revenue later determines materially misrepresents the business's
compliance with the agreement, is subject to the repayment provisions under section
469.319 from January 1 of the year in which the report is due or the date that the business
became subject to section 469.319, whichever is earlier. Any such business is permanently
barred from obtaining benefits under section 469.315. For purposes of this section, the bar
applies to an entity and also applies to any individuals or entities that have an ownership
interest of at least 20 percent of the entity.
    (b) Before the sanctions under paragraph (a) apply to a business that fails to
submit the certification, the commissioner of revenue shall send notice to the business,
demanding that the certification be submitted within 30 days and advising the business
of the consequences for failing to do so. The commissioner of revenue shall notify
the commissioner of employment and economic development and the appropriate job
opportunity subzone administrator whenever notice is sent to a business under this
paragraph.
    (c) The certification required under this section is public.
    (d) The commissioner of revenue shall promptly notify the commissioner of
employment and economic development of all businesses that certify that they are not
in compliance with the terms of their business subsidy agreement and all businesses
that fail to file the certification.
EFFECTIVE DATE.This section is effective for certifications required to be
made in 2010 and thereafter.

    Sec. 8. Minnesota Statutes 2008, section 473.39, is amended by adding a subdivision
to read:
    Subd. 1p. Obligations. After July 1, 2010, in addition to other authority in this
section, the council may issue certificates of indebtedness, bonds, or other obligations
under this section in an amount not exceeding $34,600,000 for capital expenditures as
prescribed in the council's transit capital improvement program and for related costs,
including the costs of issuance and sale of the obligations.
EFFECTIVE DATE.This section is effective the day following final enactment
and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington.

    Sec. 9. Minnesota Statutes 2008, section 474A.04, subdivision 6, is amended to read:
    Subd. 6. Entitlement transfers. An entitlement issuer may enter into an agreement
with another entitlement issuer whereby the recipient entitlement issuer issues obligations
pursuant to bonding authority allocated to the original entitlement issuer under this
section. An entitlement issuer may enter into an agreement with an issuer which is not
an entitlement issuer whereby the recipient issuer issues qualified mortgage bonds, up to
$100,000 of which are issued pursuant to bonding authority allocated to the original
entitlement issuer under this section. The agreement may be approved and executed by the
mayor of the entitlement issuer with or without approval or review by the city council.
Notwithstanding section 474A.091, subdivision 4, prior to December 1, the Minnesota
Housing Finance Agency, Minnesota Office of Higher Education, and Minnesota Rural
Finance Authority may transfer allocated bonding authority made available under this
chapter to one another under an agreement by each agency and the commissioner.

    Sec. 10. Minnesota Statutes 2008, section 474A.091, subdivision 3, is amended to read:
    Subd. 3. Allocation procedure. (a) The commissioner shall allocate available
bonding authority under this section on the Monday of every other week beginning with
the first Monday in August through and on the last Monday in November. Applications
for allocations must be received by the department by 4:30 p.m. on the Monday preceding
the Monday on which allocations are to be made. If a Monday falls on a holiday, the
allocation will be made or the applications must be received by the next business day
after the holiday.
(b) Prior to October 1, only the following applications shall be awarded allocations
from the unified pool. Allocations shall be awarded in the following order of priority:
(1) applications for residential rental project bonds;
(2) applications for small issue bonds for manufacturing projects; and
(3) applications for small issue bonds for agricultural development bond loan
projects.
(c) On the first Monday in October through the last Monday in November,
allocations shall be awarded from the unified pool in the following order of priority:
(1) applications for student loan bonds issued by or on behalf of the Minnesota
Office of Higher Education;
(2) applications for mortgage bonds;
(3) applications for public facility projects funded by public facility bonds;
(4) applications for small issue bonds for manufacturing projects;
(5) applications for small issue bonds for agricultural development bond loan
projects;
(6) applications for residential rental project bonds;
(7) applications for enterprise zone facility bonds;
(8) applications for governmental bonds; and
(9) applications for redevelopment bonds.
(d) If there are two or more applications for manufacturing projects from the
unified pool and there is insufficient bonding authority to provide allocations for all
manufacturing projects in any one allocation period, the available bonding authority shall
be awarded based on the number of points awarded a project under section 474A.045
with those projects receiving the greatest number of points receiving allocation first. If
two or more applications for manufacturing projects receive an equal amount of points,
available bonding authority shall be awarded by lot unless otherwise agreed to by the
respective issuers.
(e) If there are two or more applications for enterprise zone facility projects from
the unified pool and there is insufficient bonding authority to provide allocations for
all enterprise zone facility projects in any one allocation period, the available bonding
authority shall be awarded based on the number of points awarded a project under section
474A.045 with those projects receiving the greatest number of points receiving allocation
first. If two or more applications for enterprise zone facility projects receive an equal
amount of points, available bonding authority shall be awarded by lot unless otherwise
agreed to by the respective issuers.
(f) If there are two or more applications for residential rental projects from the
unified pool and there is insufficient bonding authority to provide allocations for all
residential rental projects in any one allocation period, the available bonding authority
shall be awarded in the following order of priority: (1) projects that preserve existing
federally subsidized housing; (2) projects that are not restricted to persons who are 55
years of age or older; and (3) other residential rental projects.
(g) From the first Monday in August through the last Monday in November,
$20,000,000 of bonding authority or an amount equal to the total annual amount of
bonding authority allocated to the small issue pool under section 474A.03, subdivision 1,
less the amount allocated to issuers from the small issue pool for that year, whichever is
less, is reserved within the unified pool for small issue bonds to the extent such amounts
are available within the unified pool.
(h) The total amount of allocations for mortgage bonds from the housing pool and
the unified pool may not exceed:
(1) $10,000,000 for any one city; or
(2) $20,000,000 for any number of cities in any one county.
(i) The total amount of allocations for student loan bonds from the unified pool may
not exceed $10,000,000 $25,000,000 per year.
(j) If there is insufficient bonding authority to fund all projects within any qualified
bond category other than enterprise zone facility projects, manufacturing projects, and
residential rental projects, allocations shall be awarded by lot unless otherwise agreed to
by the respective issuers.
(k) If an application is rejected, the commissioner must notify the applicant and
return the application deposit to the applicant within 30 days unless the applicant requests
in writing that the application be resubmitted.
(l) The granting of an allocation of bonding authority under this section must be
evidenced by issuance of a certificate of allocation.

    Sec. 11. Laws 2010, chapter 216, section 3, is amended by adding a subdivision to read:
    Subd. 3a. Authority. "Authority" means a housing and redevelopment authority
or economic development authority created pursuant to section 469.003, 469.004, or
469.091, a port authority pursuant to section 469.049, 469.1082, or special law, or another
entity authorized by law to exercise the powers of an authority created pursuant to one of
those sections.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Laws 2010, chapter 216, section 3, is amended by adding a subdivision to read:
    Subd. 3b. Implementing entity. "Implementing entity" means the local government
or an authority designated by the local government by resolution to implement and
administer programs described in section 216C.436.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Laws 2010, chapter 216, section 3, subdivision 6, is amended to read:
    Subd. 6. Qualifying real property. "Qualifying real property" means a
single-family or multifamily residential dwelling, or a commercial or industrial building,
that the city implementing entity has determined, after review of an energy audit or
renewable energy system feasibility study, can be benefited by installation of energy
improvements.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Laws 2010, chapter 216, section 4, subdivision 1, is amended to read:
    Subdivision 1. Program authority. A local government An implementing entity
may establish a program to finance energy improvements to enable owners of qualifying
real property to pay for cost-effective energy improvements to the qualifying real property
with the net proceeds and interest earnings of revenue bonds authorized in this section.
A local government An implementing entity may limit the number of qualifying real
properties for which a property owner may receive program financing.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Laws 2010, chapter 216, section 4, subdivision 2, is amended to read:
    Subd. 2. Program requirements. A financing program must:
(1) impose requirements and conditions on financing arrangements to ensure timely
repayment;
(2) require an energy audit or renewable energy system feasibility study to be
conducted on the qualifying real property and reviewed by the local government
implementing entity prior to approval of the financing;
(3) require the inspection of all installations and a performance verification of at
least ten percent of the energy improvements financed by the program;
(4) require that all cost-effective energy improvements be made to a qualifying
real property prior to, or in conjunction with, an applicant's repayment of financing for
energy improvements for that property;
(5) have energy improvements financed by the program performed by licensed
contractors as required by chapter 326B or other law or ordinance;
(6) require disclosures to borrowers by the local government implementing entity
of the risks involved in borrowing, including the risk of foreclosure if a tax delinquency
results from a default;
(7) provide financing only to those who demonstrate an ability to repay;
(8) not provide financing for a qualifying real property in which the owner is not
current on mortgage or real property tax payments;
(9) require a petition to the implementing entity by all owners of the qualifying
real property requesting collections of repayments as a special assessment under section
429.101;
(10) provide that payments and assessments are not accelerated due to a default and
that a tax delinquency exists only for assessments not paid when due; and
(11) require that liability for special assessments related to the financing runs with
the qualifying real property.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 16. Laws 2010, chapter 216, section 4, subdivision 4, is amended to read:
    Subd. 4. Financing terms. Financing provided under this section must have:
(1) a term not to exceed the weighted average of weighted average maturity not
exceeding the useful life of the energy improvements installed, as determined by the local
government implementing entity, but in no event may a term exceed 20 years;
(2) a principal amount not to exceed the lesser of ten percent of the assessed value
of the real property on which the improvements are to be installed or the actual cost of
installing the energy improvements, including the costs of necessary equipment, materials,
and labor, the costs of each related energy audit or renewable energy system feasibility
study, and the cost of verification of installation; and
(3) an interest rate sufficient to pay the financing costs of the program, including the
issuance of bonds and any financing delinquencies.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 17. Laws 2010, chapter 216, section 4, subdivision 6, is amended to read:
    Subd. 6. Certificate of participation. Upon completion of a project, a local
government an implementing entity shall provide a borrower with a certificate stating
participation in the program and what energy improvements have been made with
financing program proceeds.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 18. Laws 2010, chapter 216, section 4, subdivision 7, is amended to read:
    Subd. 7. Repayment. A local government financing An implementing entity that
finances an energy improvement under this section must:
(1) secure payment with a lien against the benefited qualifying real property; and
(2) collect repayments as a special assessment as provided for in section 429.101
or by charter.
If the implementing entity is an authority, the local government that authorized
the authority to act as implementing entity shall impose and collect special assessments
necessary to pay debt service on bonds issued by the implementing entity under
subdivision 8, and shall transfer all collections of the assessments upon receipt to the
authority.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 19. Laws 2010, chapter 216, section 4, subdivision 8, is amended to read:
    Subd. 8. Bond issuance; repayment. (a) A local government An implementing
entity may issue revenue bonds as provided in chapter 475 for the purposes of this section.
(b) The bonds must be payable as to both principal and interest solely from the
revenues from the assessments established in subdivision 7.
(c) No holder of bonds issued under this subdivision may compel any exercise of the
taxing power of the implementing entity that issued the bonds to pay principal or interest
on the bonds, and if the implementing entity is an authority, no holder of the bonds may
compel any exercise of the taxing power of the local government that issued the bonds
to pay principal or interest on the bonds. Bonds issued under this subdivision are not
a debt or obligation of the issuer or any local government that issued them, nor is the
payment of the bonds enforceable out of any money other than the revenue pledged to
the payment of the bonds.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 20. Laws 2010, chapter 216, section 58, as amended by Laws 2010, chapter
347, article 7, section 1, is amended to read:
    Sec. 58. 2010 DISTRIBUTIONS ONLY.
    For distributions in 2010 only, a special fund is established to receive 31.463 cents
per ton the sum of the following amounts that otherwise would be allocated under
Minnesota Statutes, section 298.28, subdivision 6. The following amounts are allocated to
St. Louis County acting as the fiscal agent for the recipients for the specific purposes:
    (1) 0.764 cent per ton must be paid to Northern Minnesota Dental to provide
incentives for at least two dentists to establish dental practices in high-need areas of the
taconite tax relief area;
(2) 0.955 cent per ton must be paid to the city of Virginia for repairs and geothermal
heat at the Olcott Park Greenhouse/Virginia Commons project;
(3) 0.796 cent per ton must be paid to the city of Virginia for health and safety
repairs at the Miners Memorial;
(4) 1.114 cents per ton must be paid to the city of Eveleth for the reconstruction
of Highway 142/Grant and Park Avenues;
(5) 0.478 cent per ton must be paid to the Greenway Joint Recreation Board for
upgrades and capital improvements to the public arena in Coleraine;
(6) 0.796 cent per ton must be paid to the city of Calumet for water treatment and
pumphouse modifications;
(7) 0.159 cent per ton must be paid to the city of Bovey for residential and
commercial claims for water damage due to water and flood-related damage caused by
the Canisteo Pit;
(8) 0.637 cent per ton must be paid to the city of Nashwauk for a community and
child care center;
(9) 0.637 cent per ton must be paid to the city of Keewatin for water and sewer
upgrades;
(10) 0.637 cent per ton must be paid to the city of Marble for the city hall and
library project;
(11) 0.955 cent per ton must be paid to the city of Grand Rapids for extension of
water and sewer services for Lakewood Housing;
(12) 0.159 cent per ton must be paid to the city of Grand Rapids for exhibits at
the Children's Museum;
(13) 0.637 cent per ton must be paid to the city of Grand Rapids for Block 20/21 soil
corrections. This amount must be matched by local sources;
(14) 0.605 cent per ton must be paid to the city of Aitkin for three water loops;
(15) 0.048 cent per ton must be paid to the city of Aitkin for signage;
(16) 0.159 cent per ton must be paid to Aitkin County for a trail;
(17) 0.637 cent per ton must be paid to the city of Cohasset for the Beiers Road
railroad crossing;
(18) 0.088 cent per ton must be paid to the town of Clinton for expansion and
striping of the community center parking lot;
(19) 0.398 cent per ton must be paid to the city of Kinney for water line replacement;
(20) 0.796 cent per ton must be paid to the city of Gilbert for infrastructure
improvements, milling, and overlay for Summit Street between Alaska Avenue and
Highway 135;
(21) 0.318 cent per ton must be paid to the city of Gilbert for sanitary sewer main
replacements and improvements in the Northeast Lower Alley area;
(22) 0.637 cent per ton must be paid to the town of White for replacement of the
Stepetz Road culvert;
(23) 0.796 cent per ton must be paid to the city of Buhl for reconstruction of Sharon
Street and associated infrastructure;
(24) 0.796 cent per ton must be paid to the city of Mountain Iron for site
improvements at the Park Ridge development;
(25) 0.796 cent per ton must be paid to the city of Mountain Iron for infrastructure
and site preparation for its renewable and sustainable energy park;
(26) 0.637 cent per ton must be paid to the city of Biwabik for sanitary sewer
improvements;
(27) 0.796 cent per ton must be paid to the city of Aurora for alley and road
rebuilding for the Summit Addition;
(28) 0.955 cent per ton must be paid to the city of Silver Bay for bioenergy facility
improvements;
(29) 0.318 cent per ton must be paid to the city of Grand Marais for water and
sewer infrastructure improvements;
(30) 0.318 cent per ton must be paid to the city of Orr for airport, water, and sewer
improvements;
(31) 0.716 cent per ton must be paid to the city of Cook for street and bridge
improvements and land purchase, provided that if the city sells or otherwise disposes of
any of the land purchased with the money provided under this clause within a period of
ten years after it was purchased, the city must transfer a portion of the proceeds of the
sale equal to the amount of the purchase price paid from the money provided under this
clause to the commissioner of Iron Range Resources and Rehabilitation for deposit in the
taconite environmental protection fund to be used for the purposes of the fund under
Minnesota Statutes, section 298.223;
(32) 0.955 cent per ton must be paid to the city of Ely for street, water, and sewer
improvements;
(33) 0.318 cent per ton must be paid to the city of Tower for water and sewer
improvements;
(34) 0.955 cent per ton must be paid to the city of Two Harbors for water and sewer
improvements;
(35) 0.637 cent per ton must be paid to the city of Babbitt for water and sewer
improvements;
(36) 0.096 cent per ton must be paid to the township of Duluth for infrastructure
improvements;
(37) 0.096 cent per ton must be paid to the township of Tofte for infrastructure
improvements;
(38) 3.184 cents per ton must be paid to the city of Hibbing for sewer improvements;
(39) 1.273 cents per ton must be paid to the city of Chisholm for NW Area Project
infrastructure improvements;
(40) 0.318 cent per ton must be paid to the city of Chisholm for health and safety
improvements at the athletic facility;
(41) 0.796 cent per ton must be paid to the city of Hoyt Lakes for residential street
improvements;
(42) 0.796 cent per ton must be paid to the Bois Forte Indian Reservation for
infrastructure related to a housing development;
(43) 0.159 cent per ton must be paid to Balkan Township for building improvements;
(44) 0.159 cent per ton must be paid to the city of Grand Rapids for a grant to
a nonprofit for a signage kiosk;
(45) 0.318 cent per ton must be paid to the city of Crane Lake for sanitary sewer
lines and adjacent development near County State-Aid Highway 24; and
(46) 0.159 cent per ton must be paid to the city of Chisholm to rehabilitate historic
wall infrastructure around the athletic complex; and.
(47) 2.706 cents per ton must be paid to the Virginia Regional Medical Center for
operating room equipment and renovations.
EFFECTIVE DATE.This section is effective retroactively from April 2, 2010.

    Sec. 21. CITY OF LANDFALL VILLAGE; TAX INCREMENT FINANCING
DISTRICT; SPECIAL RULES.
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. 1-1 in the city of Landfall Village if the activities were undertaken within
eight years from the date of certification of the district.
EFFECTIVE DATE.This section is effective upon compliance by the governing
body of the city of Landfall Village with the requirements of Minnesota Statutes, section
645.021, subdivision 3.

    Sec. 22. CITY OF RAMSEY; TAX INCREMENT FINANCING DISTRICT;
SPECIAL RULES.
(a) If the city of Ramsey or an authority of the city elects upon the adoption of
a tax increment financing plan for a district, the rules under this section apply to a
redevelopment tax increment financing district established by the city or an authority
of the city. The redevelopment tax increment district includes parcels within the area
bounded on the North by Bunker Lake Boulevard as extended West to Llama Street, on the
West by Llama Street, and on the south by a line running parallel to and 600 feet south of
the southerly right-of-way for U.S. Highway 10, but including Parcels 28-32-25-43-0007
and 28-32-25-34-0002 in their entirety, and excluding the Anoka County Regional Park
property in its entirety. A parcel within this area that is included in a tax increment
financing district that was certified before the date of enactment of this act may be included
in the district created under this act if the initial district is decertified.
(b) The requirements for qualifying a redevelopment tax increment district under
Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located
within the district.
(c) In addition to the costs permitted by Minnesota Statutes, section 469.176,
subdivision 4j, eligible expenditures within the district include the city's share of the
costs necessary to provide for the construction of the Northstar Transit Station and
related infrastructure, including structured parking, a pedestrian overpass, and roadway
improvements.
(d) The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of a
tax increment financing district, is considered to be met for the district if the activities
were undertaken within ten years from the date of certification of the district.
(e) Except for administrative expenses, the in-district percentage for purposes of
the restriction on pooling under Minnesota Statutes, section 469.1763, subdivision 2, for
this district is 100 percent.
EFFECTIVE DATE.This section is effective upon approval by the governing
body of the city of Ramsey, and upon compliance by the city with Minnesota Statutes,
section 645.021, subdivision 3.

    Sec. 23. CITY OF WAYZATA; TAX INCREMENT FINANCING DISTRICT;
SPECIAL RULES.
    Subdivision 1. First receipt extended. Notwithstanding Minnesota Statutes, section
469.175, subdivision 1, paragraph (b), the city of Wayzata may modify the tax increment
financing plan for Redevelopment Tax Increment Financing District No. 5 to change the
first year in which it elects to receive increment, up to six years following the year of
approval of the district. Minnesota Statutes, section 469.175, subdivision 4, paragraph (b),
does not apply to such modification of the tax increment financing plan.
    Subd. 2. Five-year rule. 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
Redevelopment Tax Increment Financing District No. 5 in the city of Wayzata if the
activities were undertaken within ten years from the date of certification of the district.
    Subd. 3. Parcels deemed occupied. Any parcel in Redevelopment Tax Increment
Financing District No. 5 in the city of Wayzata is deemed to meet the requirements of
Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), clause (1), if the
following conditions are met:
(1) a building on the parcel was demolished by a developer or the city after the city
council found the building to be structurally substandard upon approval of original tax
increment financing plan for the district; and
(2) the city decertifies Redevelopment Tax Increment Financing District No. 5,
but files a request with the county auditor for certification of the parcel as part of a
subsequent redevelopment or renewal and renovation district within ten years after the
date of demolition.
EFFECTIVE DATE.This section is effective upon compliance by the governing
body of the city of Wayzata with the requirements of Minnesota Statutes, section 645.021,
subdivision 3.

    Sec. 24. REVISOR INSTRUCTION.
The revisor of statutes shall code section 20 as Minnesota Statutes, section 298.2961,
subdivision 7.

ARTICLE 8
PROPERTY TAXES - TECHNICAL

    Section 1. Minnesota Statutes 2009 Supplement, section 134.34, subdivision 4, is
amended to read:
    Subd. 4. Limitation. (a) For calendar year 2010 and later, a regional library
basic system support grant shall not be made to a regional public library system for a
participating city or county which decreases the dollar amount provided for support for
operating purposes of public library service below the amount provided by it for the
second, or third preceding year, whichever is less. For purposes of this subdivision and
subdivision 1, any funds provided under section 473.757, subdivision 2, for extending
library hours of operation shall not be considered amounts provided by a city or county for
support for operating purposes of public library service. This subdivision shall not apply
to participating cities or counties where the adjusted net tax capacity of that city or county
has decreased, if the dollar amount of the reduction in support is not greater than the dollar
amount by which support would be decreased if the reduction in support were made in
direct proportion to the decrease in adjusted net tax capacity.
(b) For calendar year 2009 and later, in any calendar year in which a city's or
county's aid under sections 477A.011 to 477A.014 or credits credit reimbursement under
section 273.1384 is reduced after the city or county has certified its levy payable in that
year, it may reduce its local support by the lesser of:
(1) ten percent; or
(2) a percent equal to the ratio of the aid and credit reimbursement reductions to the
city's or county's revenue base, based on aids certified for the current calendar year. For
calendar year 2009 only, the reduction under this paragraph shall be based on 2008 aid and
credit reimbursement reductions under the December 2008 unallotment, as well as any
aid and credit reimbursement reductions in calendar year 2009. For pay 2009 only, the
commissioner of revenue will calculate the reductions under this paragraph and certify
them to the commissioner of education within 15 days of May 17, 2009.
(c) For taxes payable in 2010 and later, in any payable year in which the total
amounts certified for city or county aids under sections 477A.011 to 477A.014 are less
than the total amounts paid under those sections in the previous calendar year, a city or
county may reduce its local support by the lesser of:
(1) ten percent; or
(2) a percent equal to the ratio of:
(i) the difference between (A) the sum of the aid it was paid under sections 477A.011
to 477A.014 and the credits credit reimbursement it received under section 273.1398
273.1384 in the previous calendar year and (B) the sum of the aid it is certified to be paid
in the current calendar year under sections 477A.011 to 477A.014 and the credits credit
reimbursement estimated to be paid under section 273.1398 273.1384; to
(ii) its revenue base for the previous year, based on aids actually paid in the previous
calendar year. The commissioner of revenue shall calculate the percent aid cut for each
county and city under this paragraph and certify the percentage cuts to the commissioner
of education by August 1 of the year prior to the year in which the reduced aids and credits
credit reimbursements are to be paid. The percentage of reduction related to reductions to
credits credit reimbursements under section 273.1384 shall be based on the best estimation
available as of July 30.
(d) Notwithstanding paragraph (a), (b), or (c), no city or county shall reduce its
support for public libraries below the minimum level specified in subdivision 1.
(e) For purposes of this subdivision, "revenue base" means the sum of:
(1) its levy for taxes payable in the current calendar year, including the levy on
the fiscal disparities distribution under section 276A.06, subdivision 3, paragraph (a),
or 473F.08, subdivision 3, paragraph (a);
(2) its aid under sections 477A.011 to 477A.014 in the current calendar year; and
(3) its taconite aid in the current calendar year under sections 298.28 and 298.282.
EFFECTIVE DATE.This section is effective retroactively for support in calendar
year 2009 and thereafter and for library grants paid in fiscal year 2010 and thereafter.

    Sec. 2. Minnesota Statutes 2008, section 270C.87, is amended to read:
270C.87 REVISION OF MINNESOTA ASSESSORS' MANUAL.
In accordance with the provisions of section 270C.06 270C.85, the commissioner
shall periodically revise the Minnesota assessors' manual.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2008, section 270C.94, subdivision 3, is amended to read:
    Subd. 3. Failure to appraise. When an assessor has failed to properly appraise at
least one-fifth of the parcels of property in a district or county as provided in section
273.01, the commissioner shall may appoint a special assessor and deputy assessor
as necessary and cause a reappraisal to be made of the property due for reassessment
in accordance with law.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2008, section 272.025, subdivision 1, is amended to read:
    Subdivision 1. Statement of exemption. (a) Except in the case of churches and
houses of worship, property solely used for educational purposes by academies, colleges,
universities or seminaries of learning, property owned by the state of Minnesota or any
political subdivision thereof, and property exempt from taxation under section 272.02,
subdivisions 9, 10, 13, 15, 18, 20, and 22
to 26 25, and at the times provided in subdivision
3, a taxpayer claiming an exemption from taxation on property described in section
272.02, subdivisions 1 to 33, shall must file a statement of exemption with the assessor of
the assessment district in which the property is located.
(b) A taxpayer claiming an exemption from taxation on property described in section
272.02, subdivision 10, shall must file a statement of exemption with the commissioner
of revenue, on or before February 15 of each year for which the taxpayer claims an
exemption.
(c) In case of sickness, absence or other disability or for good cause, the assessor
or the commissioner may extend the time for filing the statement of exemption for a
period not to exceed 60 days.
(d) The commissioner of revenue shall prescribe the form and contents of the
statement of exemption.
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.

    Sec. 5. Minnesota Statutes 2008, section 272.025, subdivision 3, is amended to read:
    Subd. 3. Filing dates. (a) The statement required by subdivision 1, paragraph
(a), must be filed with the assessor by February 1 of the assessment year, however, any
taxpayer who has filed the statement required by subdivision 1 more than 12 months prior
to February 1, 1983, or February 1 of each third year after 1983, shall file a statement by
February 1, 1983, and by February 1 of each third year thereafter.
(b) For churches and houses of worship, and property solely used for educational
purposes by academies, colleges, universities, or seminaries of learning, no statement is
required after the statement filed for the assessment year in which the exemption began.
(c) This section does not apply to existing churches and houses of worship, and
property solely used for educational purposes by academies, colleges, universities, or
seminaries of learning that were exempt for taxes payable in 2011.
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.

    Sec. 6. Minnesota Statutes 2008, section 272.029, subdivision 4, is amended to read:
    Subd. 4. Reports. (a) An owner of a wind energy conversion system subject to tax
under subdivision 3 shall file a report with the commissioner of revenue annually on or
before February 1 detailing the amount of electricity in kilowatt-hours that was produced
by the wind energy conversion system for the previous calendar year. The commissioner
shall prescribe the form of the report. The report must contain the information required
by the commissioner to determine the tax due to each county under this section for the
current year. If an owner of a wind energy conversion system subject to taxation under
this section fails to file the report by the due date, the commissioner of revenue shall
determine the tax based upon the nameplate capacity of the system multiplied by a
capacity factor of 40 60 percent.
(b) On or before February 28, the commissioner of revenue shall notify the owner of
the wind energy conversion systems of the tax due to each county for the current year and
shall certify to the county auditor of each county in which the systems are located the tax
due from each owner for the current year.
EFFECTIVE DATE.This section is effective beginning with reports due on
February 1, 2011, and thereafter.

    Sec. 7. Minnesota Statutes 2008, section 272.029, subdivision 7, is amended to read:
    Subd. 7. Exemption. The tax imposed under this section does not apply to
electricity produced by wind energy conversion systems located in a job opportunity
building zone, designated under section 469.314, for the duration of the zone. The
exemption applies beginning for the first calendar year after designation of the zone
and applies to each calendar year that begins during the designation of the zone. The
exemption only applies if the owner of the system is a qualified business under section
469.310, subdivision 11, who has entered into a business subsidy agreement that covers
the land on which the system is situated.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2008, section 273.113, subdivision 3, is amended to read:
    Subd. 3. Reimbursement for lost revenue. The county auditor shall certify
to the commissioner of revenue, as part of the abstracts of tax lists required to be filed
with the commissioner under section 275.29, the amount of tax lost to the county from
the property tax credit under subdivision 2. Any prior year adjustments must also be
certified in the abstracts of tax lists. The commissioner of revenue shall review the
certifications to determine their accuracy. The commissioner may make the changes
in the certification that are considered necessary or return a certification to the county
auditor for corrections. The commissioner shall reimburse each taxing district, other than
school districts, for the taxes lost. The payments must be made at the time provided in
section 473H.10 for payment to taxing jurisdictions in the same proportion that the ad
valorem tax is distributed. Reimbursements to school districts must be made as provided
in section 273.1392. The amount necessary to make the reimbursements under this section
is annually appropriated from the general fund to the commissioner of revenue.
EFFECTIVE DATE.This section is effective retroactively for taxes payable in
2009 and thereafter.

    Sec. 9. Minnesota Statutes 2008, section 273.1392, is amended to read:
273.1392 PAYMENT; SCHOOL DISTRICTS.
The amounts of bovine tuberculosis credit reimbursements under section 273.113;
conservation tax credits under section 273.119; disaster or emergency reimbursement
under sections 273.1231 to 273.1235; homestead and agricultural credits under section
273.1384; aids and credits under section 273.1398; wetlands reimbursement under
section 275.295; enterprise zone property credit payments under section 469.171; and
metropolitan agricultural preserve reduction under section 473H.10 for school districts,
shall be certified to the Department of Education by the Department of Revenue. The
amounts so certified shall be paid according to section 127A.45, subdivisions 9 and 13.
EFFECTIVE DATE.This section is effective retroactively for taxes payable in
2009 and thereafter.

    Sec. 10. Minnesota Statutes 2009 Supplement, section 275.065, subdivision 3, is
amended to read:
    Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
and the county treasurer shall deliver after November 10 and on or before November 24
each year, by first class mail to each taxpayer at the address listed on the county's current
year's assessment roll, a notice of proposed property taxes. Upon written request by
the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
instead of on paper or by ordinary mail.
    (b) The commissioner of revenue shall prescribe the form of the notice.
    (c) The notice must inform taxpayers that it contains the amount of property taxes
each taxing authority proposes to collect for taxes payable the following year. In the
case of a town, or in the case of the state general tax, the final tax amount will be its
proposed tax. The notice must clearly state for each city that has a population over 500,
county, school district, regional library authority established under section 134.201, and
metropolitan taxing districts as defined in paragraph (i), the time and place of the a meeting
for each taxing authorities' regularly scheduled meetings authority in which the budget
and levy will be discussed and public input allowed, prior to the final budget and levy
determined, which must occur after November 24 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 the meetings and the meetings shall 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.
    (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, net of the residential and agricultural homestead credit under section 273.1384, voter
approved school levy, other local school levy, and the sum of the special taxing districts,
and as a total of all taxing authorities:
    (i) the actual tax for taxes payable in the current year; and
    (ii) the proposed tax amount.
    If the county levy under clause (2) includes an amount for a lake improvement
district as defined under sections 103B.501 to 103B.581, the amount attributable for that
purpose must be separately stated from the remaining county levy amount.
    In the case of a town or the state general tax, the final tax shall also be its proposed
tax unless the town changes its levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision 9, that a referendum will
be held in the school district at the November general election, the county auditor must
note next to the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the notice. In the
case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
listed separately from the remaining amount of the city's levy. In the case of the city of
St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In the case of Ramsey County, any amount levied
under section 134.07 may be listed separately from the remaining amount of the county's
levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide tax must each be stated
separately and not included in the sum of the special taxing districts; and
    (3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage.
    For purposes of this section, the amount of the tax on homesteads qualifying under
the senior citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.
    (e) The notice must clearly state that the proposed or final taxes do not include
the following:
    (1) special assessments;
    (2) levies approved by the voters after the date the proposed taxes are certified,
including bond referenda and school district levy referenda;
    (3) a levy limit increase approved by the voters by the first Tuesday after the first
Monday in November of the levy year as provided under section 275.73;
    (4) amounts necessary to pay cleanup or other costs due to a natural disaster
occurring after the date the proposed taxes are certified;
    (5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and
    (6) the contamination tax imposed on properties which received market value
reductions for contamination.
    (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
the county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.
    (g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.
    (h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:
    (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
renter, or lessee; or
    (2) post a copy of the notice in a conspicuous place on the premises of the property.
    The notice must be mailed or posted by the taxpayer by November 27 or within
three days of receipt of the notice, whichever is later. A taxpayer may notify the county
treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
which the notice must be mailed in order to fulfill the requirements of this paragraph.
    (i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:
    (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
473.446, 473.521, 473.547, or 473.834;
    (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
and
    (3) Metropolitan Mosquito Control Commission under section 473.711.
    For purposes of this section, any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy.
    (j) The governing body of a county, city, or school district may, with the consent
of the county board, include supplemental information with the statement of proposed
property taxes about the impact of state aid increases or decreases on property tax
increases or decreases and on the level of services provided in the affected jurisdiction.
This supplemental information may include information for the following year, the current
year, and for as many consecutive preceding years as deemed appropriate by the governing
body of the county, city, or school district. It may include only information regarding:
    (1) the impact of inflation as measured by the implicit price deflator for state and
local government purchases;
    (2) population growth and decline;
    (3) state or federal government action; and
    (4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.
    The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.
EFFECTIVE DATE.This section is effective retroactively for taxes payable in
2010 and thereafter.

    Sec. 11. Minnesota Statutes 2009 Supplement, section 275.70, subdivision 5, as
amended by Laws 2010, chapter 215, article 13, section 3, is amended to read:
    Subd. 5. Special levies. "Special levies" means those portions of ad valorem taxes
levied by a local governmental unit for the following purposes or in the following manner:
    (1) to pay the costs of the principal and interest on bonded indebtedness or to
reimburse for the amount of liquor store revenues used to pay the principal and interest
due on municipal liquor store bonds in the year preceding the year for which the levy
limit is calculated;
    (2) to pay the costs of principal and interest on certificates of indebtedness issued for
any corporate purpose except for the following:
    (i) tax anticipation or aid anticipation certificates of indebtedness;
    (ii) certificates of indebtedness issued under sections 298.28 and 298.282;
    (iii) certificates of indebtedness used to fund current expenses or to pay the costs of
extraordinary expenditures that result from a public emergency; or
    (iv) certificates of indebtedness used to fund an insufficiency in tax receipts or an
insufficiency in other revenue sources, provided that nothing in this subdivision limits the
special levy authorized under section 475.755;
    (3) to provide for the bonded indebtedness portion of payments made to another
political subdivision of the state of Minnesota;
    (4) to fund payments made to the Minnesota State Armory Building Commission
under section 193.145, subdivision 2, to retire the principal and interest on armory
construction bonds;
    (5) property taxes approved by voters which are levied against the referendum
market value as provided under section 275.61;
    (6) to fund matching requirements needed to qualify for federal or state grants or
programs to the extent that either (i) the matching requirement exceeds the matching
requirement in calendar year 2001, or (ii) it is a new matching requirement that did not
exist prior to 2002;
    (7) to pay the expenses reasonably and necessarily incurred in preparing for or
repairing the effects of natural disaster including the occurrence or threat of widespread
or severe damage, injury, or loss of life or property resulting from natural causes, in
accordance with standards formulated by the Emergency Services Division of the state
Department of Public Safety, as allowed by the commissioner of revenue under section
275.74, subdivision 2;
    (8) pay amounts required to correct an error in the levy certified to the county
auditor by a city or county in a levy year, but only to the extent that when added to the
preceding year's levy it is not in excess of an applicable statutory, special law or charter
limitation, or the limitation imposed on the governmental subdivision by sections 275.70
to 275.74 in the preceding levy year;
    (9) to pay an abatement under section 469.1815;
    (10) to pay any costs attributable to increases in the employer contribution rates
under chapter 353, or locally administered pension plans, that are effective after June
30, 2001;
    (11) to pay the operating or maintenance costs of a county jail as authorized in
section 641.01 or 641.262, or of a correctional facility as defined in section 241.021,
subdivision 1
, paragraph (f), to the extent that the county can demonstrate to the
commissioner of revenue that the amount has been included in the county budget as
a direct result of a rule, minimum requirement, minimum standard, or directive of the
Department of Corrections, or to pay the operating or maintenance costs of a regional jail
as authorized in section 641.262. For purposes of this clause, a district court order is
not a rule, minimum requirement, minimum standard, or directive of the Department of
Corrections. If the county utilizes this special levy, except to pay operating or maintenance
costs of a new regional jail facility under sections 641.262 to 641.264 which will not
replace an existing jail facility, any amount levied by the county in the previous levy year
for the purposes specified under this clause and included in the county's previous year's
levy limitation computed under section 275.71, shall be deducted from the levy limit
base under section 275.71, subdivision 2, when determining the county's current year
levy limitation. The county shall provide the necessary information to the commissioner
of revenue for making this determination;
    (12) to pay for operation of a lake improvement district, as authorized under section
103B.555. If the county utilizes this special levy, any amount levied by the county in the
previous levy year for the purposes specified under this clause and included in the county's
previous year's levy limitation computed under section 275.71 shall be deducted from
the levy limit base under section 275.71, subdivision 2, when determining the county's
current year levy limitation. The county shall provide the necessary information to the
commissioner of revenue for making this determination;
    (13) to repay a state or federal loan used to fund the direct or indirect required
spending by the local government due to a state or federal transportation project or other
state or federal capital project. This authority may only be used if the project is not a
local government initiative;
    (14) to pay for court administration costs as required under section 273.1398,
subdivision 4b
, less the (i) county's share of transferred fines and fees collected by the
district courts in the county for calendar year 2001 and (ii) the aid amount certified to be
paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes
levied to pay for these costs in the year in which the court financing is transferred to the
state, the amount under this clause is limited to the amount of aid the county is certified to
receive under section 273.1398, subdivision 4a;
    (15) to fund a police or firefighters relief association as required under section 69.77
to the extent that the required amount exceeds the amount levied for this purpose in 2001;
    (16) for purposes of a storm sewer improvement district under section 444.20;
    (17) to pay for the maintenance and support of a city or county society for the
prevention of cruelty to animals under section 343.11, but not to exceed in any year
$4,800 or the sum of $1 per capita based on the county's or city's population as of the most
recent federal census, whichever is greater. If the city or county uses this special levy, any
amount levied by the city or county in the previous levy year for the purposes specified
in this clause and included in the city's or county's previous year's levy limit computed
under section 275.71, must be deducted from the levy limit base under section 275.71,
subdivision 2
, in determining the city's or county's current year levy limit;
    (18) for counties, to pay for the increase in their share of health and human service
costs caused by reductions in federal health and human services grants effective after
September 30, 2007;
    (19) for a city, for the costs reasonably and necessarily incurred for securing,
maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by
the commissioner of revenue under section 275.74, subdivision 2. A city must have either
(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in
the city or in a zip code area of the city that is at least 50 percent higher than the average
foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2,
to use this special levy. For purposes of this paragraph, "foreclosure rate" means the
number of foreclosures, as indicated by sheriff sales records, divided by the number of
households in the city in 2007;
    (20) for a city, for the unreimbursed costs of redeployed traffic-control agents and
lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified
to the Federal Highway Administration;
    (21) to pay costs attributable to wages and benefits for sheriff, police, and fire
personnel. If a local governmental unit did not use this special levy in the previous year its
levy limit base under section 275.71 shall be reduced by the amount equal to the amount it
levied for the purposes specified in this clause in the previous year;
    (22) an amount equal to any reductions in the certified aids or credits credit
reimbursements payable under sections 477A.011 to 477A.014, and section 273.1384, due
to unallotment under section 16A.152 or reductions under another provision of law. The
amount of the levy allowed under this clause for each year is equal limited to the amount
unallotted or reduced in from the aids and credit reimbursements certified for payment in
the year following the calendar year in which the tax levy is levied certified unless the
unallotment or reduction amount is not known by September 1 of the levy certification
year, and the local government has not adjusted its levy under section 275.065, subdivision
6
, or 275.07, subdivision 6, in which case the that unallotment or reduction amount may
be levied in the following year;
(23) to pay for the difference between one-half of the costs of confining sex offenders
undergoing the civil commitment process and any state payments for this purpose pursuant
to section 253B.185, subdivision 5;
(24) for a county to pay the costs of the first year of maintaining and operating a new
facility or new expansion, either of which contains courts, corrections, dispatch, criminal
investigation labs, or other public safety facilities and for which all or a portion of the
funding for the site acquisition, building design, site preparation, construction, and related
equipment was issued or authorized prior to the imposition of levy limits in 2008. The
levy limit base shall then be increased by an amount equal to the new facility's first full
year's operating costs as described in this clause; and
(25) for the estimated amount of reduction to market value credit reimbursements
under section 273.1384 for credits payable in the year in which the levy is payable.
EFFECTIVE DATE.This section is effective retroactively for taxes payable in
2010 and thereafter.

    Sec. 12. Minnesota Statutes 2008, section 275.71, subdivision 5, is amended to read:
    Subd. 5. Property tax levy limit. (a) For taxes levied in 2008 through 2010, the
property tax levy limit for a local governmental unit is equal to its adjusted levy limit
base determined under subdivision 4 plus any additional levy authorized under section
275.73, which is levied against net tax capacity, reduced by the sum of (i) the total amount
of aids and reimbursements that the local governmental unit is certified to receive under
sections 477A.011 to 477A.014, (ii) taconite aids under sections 298.28 and 298.282
including any aid which was required to be placed in a special fund for expenditure in
the next succeeding year, (iii) estimated payments to the local governmental unit under
section 272.029, adjusted for any error in estimation in the preceding year, and (iv) aids
under section 477A.16.
(b) If an aid, payment, or other amount used in paragraph (a) to reduce a local
government unit's levy limit is reduced by an unallotment under section 16A.152, the
amount of the aid, payment, or other amount prior to the unallotment is used in the
computations in paragraph (a). In order for a local government unit to levy outside of its
limit to offset the reduction in revenues attributable to an unallotment, it must do so under,
and to the extent authorized by, a special levy authorization.
EFFECTIVE DATE.This section is effective retroactively for taxes payable in
2010 and thereafter.

    Sec. 13. Minnesota Statutes 2008, section 279.01, subdivision 3, is amended to read:
    Subd. 3. Agricultural property. (a) In the case of class 1b agricultural homestead,
class 2a agricultural homestead property, and class 2b(3) 2a agricultural nonhomestead
property, no penalties shall attach to the second one-half property tax payment as provided
in this section if paid by November 15. Thereafter for class 1b agricultural homestead
and class 2a homestead property, on November 16 following, a penalty of six percent
shall accrue and be charged on all such unpaid taxes and on December 1 following, an
additional two percent shall be charged on all such unpaid taxes. Thereafter for class
2b(3) 2a agricultural nonhomestead property, on November 16 following, a penalty of
eight percent shall accrue and be charged on all such unpaid taxes and on December 1
following, an additional four percent shall be charged on all such unpaid taxes.
If the owner of class 1b agricultural homestead, class 2a, or class 2b(3) 2a
agricultural property receives a consolidated property tax statement that shows only an
aggregate of the taxes and special assessments due on that property and on other property
not classified as class 1b agricultural homestead, class 2a, or class 2b(3) 2a agricultural
property, the aggregate tax and special assessments shown due on the property by the
consolidated statement will be due on November 15.
(b) Notwithstanding paragraph (a), for taxes payable in 2010 and 2011, for any class
2b property that was subject to a second-half due date of November 15 for taxes payable
in 2009, the county shall not impose, or if imposed, shall abate penalty amounts in excess
of those that would apply as if the second-half due date were November 15.
EFFECTIVE DATE.Paragraph (a) is effective for taxes payable in 2012 and
thereafter. Paragraph (b) is effective for taxes payable in 2010 and 2011 only.

    Sec. 14. Minnesota Statutes 2008, section 279.37, subdivision 1, is amended to read:
    Subdivision 1. Composition into one item. Delinquent taxes upon any parcel of real
estate may be composed into one item or amount by confession of judgment at any time
prior to the forfeiture of the parcel of land to the state for taxes, for the aggregate amount
of all the taxes, costs, penalties, and interest accrued against the parcel, as provided in this
section. Taxes upon property which, for the previous year's assessment, was classified
as mineral property, employment property, or commercial or industrial property are only
eligible to be composed into any confession of judgment under this section as provided in
subdivision 1a. Delinquent taxes for property that has been reclassified from 4bb to 4b
under section 273.1319 may not be composed into a confession of judgment under this
subdivision. Delinquent taxes on unimproved land are eligible to be composed into a
confession of judgment only if the land is classified under section 273.13 as homestead,
agricultural, or timberland rural vacant land, or managed forest land, in the previous year
or is eligible for installment payment under subdivision 1a. The entire parcel is eligible
for the ten-year installment plan as provided in subdivision 2 if 25 percent or more of the
market value of the parcel is eligible for confession of judgment under this subdivision.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Minnesota Statutes 2009 Supplement, section 475.755, is amended to read:
475.755 EMERGENCY DEBT CERTIFICATES.
(a) If at any time during a fiscal year the receipts of a local government are
reasonably expected to be reduced below the amount provided in the local government's
budget when the final property tax levy to be collected during the fiscal year was certified
and the receipts are insufficient to meet the expenses incurred or to be incurred during the
fiscal year, the governing body of the local government may authorize and sell certificates
of indebtedness to mature within two years or less from the end of the fiscal year in which
the certificates are issued. The maximum principal amount of the certificates that it may
issue in a fiscal year is limited to the expected reduction in receipts plus the cost of
issuance. The certificates may be issued in the manner and on the terms the governing
body determines by resolution.
(b) The governing body of the local government shall levy taxes for the payment of
principal and interest on the certificates in accordance with section 475.61.
(c) The certificates are not to be included in the net debt of the issuing local
government.
    (d) To the extent that a local government issues certificates under this section to fund
an unallotment or other reduction in its state aid, the local government may must not use a
the special levy authority for the aid reduction reductions under section 275.70, subdivision
5
, clause (22), or a similar or successor provision. This provision does not affect the status
of the, but must instead use the special levy authority for the repayment of indebtedness
under section 275.70, subdivision 5, clause (2), in order to levy under section 475.61 to
pay fund repayment of the certificates as with a levy that is not subject to levy limits.
(e) For purposes of this section, the following terms have the meanings given:
(1) "Local government" means a statutory or home rule charter city, a town, or
a county.
(2) "Receipts" includes the following amounts scheduled to be received by the
local government for the fiscal year from:
(i) taxes;
(ii) aid payments previously certified by the state to be paid to the local government;
(iii) state reimbursement payments for property tax credits; and
(iv) any other source.
EFFECTIVE DATE.This section is effective retroactively for taxes payable in
2010 and thereafter.

    Sec. 16. Minnesota Statutes 2009 Supplement, section 477A.013, subdivision 8,
is amended to read:
    Subd. 8. City formula aid. (a) In calendar year 2009, the formula aid for a city
is equal to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need
increase percentage multiplied by its unmet need.
    (b) In calendar year 2010 and subsequent years, The formula aid for a city is equal
to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase
percentage multiplied by the average of its unmet need for the most recently available
two years.
No city may have a formula aid amount less than zero. The need increase percentage
must be the same for all cities.
    The applicable need increase percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03. For aids payable in 2009 only, all data used in calculating
aid to cities under sections 477A.011 to 477A.013 will be based on the data available for
calculating aid to cities for aids payable in 2008. For aids payable in 2010 and thereafter,
Data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be the
most recently available data as of January 1 in the year in which the aid is calculated except
as provided in section 477A.011, subdivisions 3 and 35 that the data used to compute "net
levy" in subdivision 9 is the data most recently available at the time of the aid computation.
EFFECTIVE DATE.This section is effective for aid payable in 2010 and thereafter.

    Sec. 17. Laws 2001, First Special Session chapter 5, article 3, section 50, the effective
date, as amended by Laws 2009, chapter 86, article 1, section 87, is amended to read:
EFFECTIVE DATE.Clause (22) of this section is effective for taxes levied in 2002,
payable in 2003, through taxes levied in 2011, payable in 2012 and thereafter. Clause (23)
of this section is effective for taxes levied in 2001, payable in 2002, and thereafter.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 9
CONDITIONAL USE DEEDS

    Section 1. Minnesota Statutes 2008, section 282.01, subdivision 1, is amended to read:
    Subdivision 1. Classification as conservation or nonconservation. It is the
general policy of this state to encourage the best use of tax-forfeited lands, recognizing
(a) When acting on behalf of the state under laws allowing the county board to classify
and manage tax-forfeited lands held by the state in trust for the local units as provided in
section 281.25, the county board has the discretion to decide that some lands in public
ownership should be retained and managed for public benefits while other lands should be
returned to private ownership. Parcels of land becoming the property of the state in trust
under law declaring the forfeiture of lands to the state for taxes must be classified by the
county board of the county in which the parcels lie as conservation or nonconservation. In
making the classification the board shall consider the present use of adjacent lands, the
productivity of the soil, the character of forest or other growth, accessibility of lands
to established roads, schools, and other public services, their peculiar suitability or
desirability for particular uses, and the suitability of the forest resources on the land for
multiple use, and sustained yield management. The classification, furthermore, must: (1)
encourage and foster a mode of land utilization that will facilitate the economical and
adequate provision of transportation, roads, water supply, drainage, sanitation, education,
and recreation; (2) facilitate reduction of governmental expenditures; (3) conserve and
develop the natural resources; and (4) foster and develop agriculture and other industries
in the districts and places best suited to them.
In making the classification the county board may use information made available
by any office or department of the federal, state, or local governments, or by any other
person or agency possessing pertinent information at the time the classification is made.
The lands may be reclassified from time to time as the county board considers necessary
or desirable, except for conservation lands held by the state free from any trust in favor of
any taxing district.
If the lands are located within the boundaries of an organized town, with taxable
valuation in excess of $20,000, or incorporated municipality, the classification or
reclassification and sale must first be approved by the town board of the town or the
governing body of the municipality in which the lands are located. The town board of
the town or the governing body of the municipality is considered to have approved
the classification or reclassification and sale if the county board is not notified of the
disapproval of the classification or reclassification and sale within 60 days of the date the
request for approval was transmitted to the town board of the town or governing body
of the municipality. If the town board or governing body desires to acquire any parcel
lying in the town or municipality by procedures authorized in this section, it must file a
written application with the county board to withhold the parcel from public sale. The
application must be filed within 60 days of the request for classification or reclassification
and sale. The county board shall then withhold the parcel from public sale for six months.
A municipality or governmental subdivision shall pay maintenance costs incurred by
the county during the six-month period while the property is withheld from public sale,
provided the property is not offered for public sale after the six-month period. A clerical
error made by county officials does not serve to eliminate the request of the town board
or governing body if the board or governing body has forwarded the application to the
county auditor. If the town board or governing body of the municipality fails to submit an
application and a resolution of the board or governing body to acquire the property within
the withholding period, the county may offer the property for sale upon the expiration of
the withholding period.
(b) Whenever the county board deems it appropriate, the board may hold a meeting
for the purpose of reclassifying tax-forfeited land that has not been sold or released from
the trust. The criteria and procedures for reclassification are the same as those required for
an initial classification.
(c) Prior to meeting for the purpose of classifying or reclassifying tax-forfeited lands,
the county board must give notice of its intent to meet for that purpose as provided in this
paragraph. The notice must be given no more than 90 days and no less than 60 days before
the date of the meeting; provided that if the meeting is rescheduled, notice of the new
date, time, and location must be given at least 14 days before the date of the rescheduled
meeting. The notice must be posted on a Web site. The notice must also be mailed or
otherwise delivered to each person who has filed a request for notice of special meetings
with the public body, regardless of whether the matter is considered at a regular or special
meeting. The notice must be mailed or delivered at least 60 days before the date of the
meeting. If the meeting is rescheduled, notice of the new date, time, and location must be
mailed or delivered at least 14 days before the date of the rescheduled meeting. The public
body shall publish the notice once, at least 30 days before the meeting, in a newspaper of
general circulation within the area of the public body's authority. The board must also mail
a notice by electronic means to each person who requests notice of meetings dealing with
this subject and who agrees as provided in chapter 325L to accept notice that is mailed
by electronic means. Receipt of actual notice under the conditions specified in section
13D.04, subdivision 7, satisfies the notice requirements of this paragraph.
The board may classify or reclassify tax-forfeited lands at any regular or special
meeting, as those terms are defined in chapter 13D and may conduct only this business, or
this business as well as other business or activities at the meeting.
(d) At the meeting, the county board must allow any person or agency possessing
pertinent information to make or submit comments and recommendations about the
pending classification or reclassification. In addition, representatives of governmental
entities in attendance must be allowed to describe plans, ideas, or projects that may
involve use or acquisition of the property by that or another governmental entity. The
county board must solicit and consider any relevant components of current municipal or
metropolitan comprehensive land use plans that incorporate the area in which the land
is located. After allowing testimony, the board may classify, reclassify, or delay taking
action on any parcel or parcels. In order for a state agency or a governmental subdivision
of the state to preserve its right to request a purchase or other acquisition of a forfeited
parcel, it may, at any time following forfeiture, file a written request to withhold the parcel
from sale or lease to others under the provisions of subdivision 1a.
(e) When classifying, reclassifying, appraising, and selling lands under this chapter,
the county board may designate the tracts as assessed and acquired, or may by resolution
provide for the subdivision of the tracts into smaller units or for the grouping of several
tracts into one tract when the subdivision or grouping is deemed advantageous for
conservation or sale purposes. This paragraph does not authorize the county board to
subdivide a parcel or tract of tax-forfeited land that, as assessed and acquired, is withheld
from sale under section 282.018, subdivision 1.
(f) A county board may by resolution elect to use the classification and
reclassification procedures provided in paragraphs (g), (h), and (i), instead of the
procedures provided in paragraphs (b), (c), and (d). Once an election is made under this
paragraph, it is effective for a minimum of five years.
(g) The classification or reclassification of tax-forfeited land that has not been sold or
released from the trust may be made by the county board using information made available
to it by any office or department of the federal, state, or local governments, or by any other
person or agency possessing pertinent information at the time the classification is made.
(h) If the lands are located within the boundaries of an organized town or
incorporated municipality, a classification or reclassification and sale must first be
approved by the town board of the town or the governing body of the municipality in
which the lands are located. The town board of the town or the governing body of the
municipality is considered to have approved the classification or reclassification and sale
if the county board is not notified of the disapproval of the classification or reclassification
and sale within 60 days of the date the request for approval was transmitted to the town
board of the town or governing body of the municipality. If the town board or governing
body disapproves of the classification or reclassification and sale, the county board must
follow the procedures in paragraphs (c) and (d), with regard to the parcel, and must
additionally cause to be published in a newspaper a notice of the date, time, location, and
purpose of the required meeting.
(i) If a town board or a governing body of a municipality or a park and recreation
board in a city of the first class desires to acquire any parcel lying in the town or
municipality by procedures authorized in this section, it may file a written request under
subdivision 1a, paragraph (a).
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 2. Minnesota Statutes 2008, section 282.01, subdivision 1a, is amended to read:
    Subd. 1a. Conveyance; generally to public entities. (a) Upon written request
from a state agency or a governmental subdivision of the state, a parcel of unsold
tax-forfeited land must be withheld from sale or lease to others for a maximum of six
months. The request must be submitted to the county auditor. Upon receipt, the county
auditor must withhold the parcel from sale or lease to any other party for six months, and
must confirm the starting date of the six-month withholding period to the requesting
agency or subdivision. If the request is from a governmental subdivision of the state, the
governmental subdivision must pay the maintenance costs incurred by the county during
the period the parcel is withheld. The county board may approve a sale or conveyance to
the requesting party during the withholding period. A conveyance of the property to the
requesting party terminates the withholding period.
A governmental subdivision of the state must not make, and a county auditor must
not act upon, a second request to withhold a parcel from sale or lease within 18 months
of a previous request for that parcel. A county may reject a request made under this
paragraph if the request is made more than 30 days after the county has given notice to the
requesting state agency or governmental subdivision of the state that the county intends to
sell or otherwise dispose of the property.
(b) Nonconservation tax-forfeited lands may be sold by the county board, for
their market value as determined by the county board, to an organized or incorporated
governmental subdivision of the state for any public purpose for which the subdivision is
authorized to acquire property or. When the term "market value" is used in this section, it
means an estimate of the full and actual market value of the parcel as determined by the
county board, but in making this determination, the board and the persons employed by or
under contract with the board in order to perform, conduct, or assist in the determination,
are exempt from the licensure requirements of chapter 82B.
(c) Nonconservation tax-forfeited lands may be released from the trust in favor of the
taxing districts on application of to the county board by a state agency for an authorized
use at not less than their market value as determined by the county board.
(d) Nonconservation tax-forfeited lands may be sold by the county board to an
organized or incorporated governmental subdivision of the state or state agency for less
than their market value if:
(1) the county board determines that a sale at a reduced price is in the public interest
because a reduced price is necessary to provide an incentive to correct the blighted
conditions that make the lands undesirable in the open market, or the reduced price will
lead to the development of affordable housing; and
(2) the governmental subdivision or state agency has documented its specific plans
for correcting the blighted conditions or developing affordable housing, and the specific
law or laws that empower it to acquire real property in furtherance of the plans.
If the sale under this paragraph is to a governmental subdivision of the state, the
commissioner of revenue must convey the property on behalf of the state by quit claim
deed. If the sale under this paragraph is to a state agency, the commissioner must issue a
conveyance document that releases the property from the trust in favor of the taxing
districts.
(e) Nonconservation tax-forfeited land held in trust in favor of the taxing districts
may be conveyed by the commissioner of revenue may convey by deed in the name
of the state a tract of tax-forfeited land held in trust in favor of the taxing districts to a
governmental subdivision for an authorized public use, if an application is submitted to
the commissioner which includes a statement of facts as to the use to be made of the tract
and the need therefor and the favorable recommendation of the county board. For the
purposes of this paragraph, "authorized public use" means a use that allows an indefinite
segment of the public to physically use and enjoy the property in numbers appropriate
to its size and use, or is for a public service facility. Authorized public uses as defined
in this paragraph are limited to:
(1) a road, or right-of-way for a road;
(2) a park that is both available to, and accessible by, the public that contains
amenities such as campgrounds, playgrounds, athletic fields, trails, or shelters;
(3) trails for walking, bicycling, snowmobiling, or other recreational purposes, along
with a reasonable amount of surrounding land maintained in its natural state;
(4) transit facilities for buses, light rail transit, commuter rail or passenger rail,
including transit ways, park-and-ride lots, transit stations, maintenance and garage
facilities, and other facilities related to a public transit system;
(5) public beaches or boat launches;
(6) public parking;
(7) civic recreation or conference facilities; and
(8) public service facilities such as fire halls, police stations, lift stations, water
towers, sanitation facilities, water treatment facilities, and administrative offices.
No monetary compensation or consideration is required for the conveyance, except as
provided in subdivision 1g, but the conveyance is subject to the conditions provided in
law, including, but not limited to, the reversion provisions of subdivisions 1c and 1d.
(f) The commissioner of revenue shall convey a parcel of nonconservation
tax-forfeited land to a local governmental subdivision of the state by quit claim deed
on behalf of the state upon the favorable recommendation of the county board if the
governmental subdivision has certified to the board that prior to forfeiture the subdivision
was entitled to the parcel under a written development agreement or instrument, but
the conveyance failed to occur prior to forfeiture. No compensation or consideration is
required for, and no conditions attach to, the conveyance.
(g) The commissioner of revenue shall convey a parcel of nonconservation
tax-forfeited land to the association of a common interest community by quit claim deed
upon the favorable recommendation of the county board if the association certifies to the
board that prior to forfeiture the association was entitled to the parcel under a written
agreement, but the conveyance failed to occur prior to forfeiture. No compensation or
consideration is required for, and no conditions attach to, the conveyance.
(h) Conservation tax-forfeited land may be sold to a governmental subdivision of the
state for less than its market value for either: (1) creation or preservation of wetlands;
(2) drainage or storage of storm water under a storm water management plan; or (3)
preservation, or restoration and preservation, of the land in its natural state. The deed must
contain a restrictive covenant limiting the use of the land to one of these purposes for
30 years or until the property is reconveyed back to the state in trust. At any time, the
governmental subdivision may reconvey the property to the state in trust for the taxing
districts. The deed of reconveyance is subject to approval by the commissioner of revenue.
No part of a purchase price determined under this paragraph shall be refunded upon a
reconveyance, but the amount paid for a conveyance under this paragraph may be taken
into account by the county board when setting the terms of a future sale of the same
property to the same governmental subdivision under paragraph (b) or (d). If the lands
are unplatted and located outside of an incorporated municipality and the commissioner
of natural resources determines there is a mineral use potential, the sale is subject to the
approval of the commissioner of natural resources.
(i) A park and recreation board in a city of the first class is a governmental
subdivision for the purposes of this section.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 3. Minnesota Statutes 2008, section 282.01, subdivision 1b, is amended to read:
    Subd. 1b. Conveyance; targeted neighborhood community lands. (a)
Notwithstanding subdivision 1a, in the case of tax-forfeited lands located in a targeted
neighborhood, as defined in section 469.201, subdivision 10 community in a city of the
first class, the commissioner of revenue shall convey by quit claim deed in the name of the
state any tract of tax-forfeited land held in trust in favor of the taxing districts, to a political
subdivision of the state that submits an application to the commissioner of revenue and
the favorable recommendation of the county board. For purposes of this subdivision, the
term "targeted community" has the meaning given in section 469.201, subdivision 10,
except that the land must be located within a first class city.
(b) The application under paragraph (a) must include a statement of facts as to the
use to be made of the tract, the need therefor, and a resolution, adopted by the governing
body of the political subdivision, finding that the conveyance of a tract of tax-forfeited
land to the political subdivision is necessary to provide for the redevelopment of land as
productive taxable property. Deeds of conveyance issued under paragraph (a) are not
conditioned on continued use of the property for the use stated in the application.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 4. Minnesota Statutes 2008, section 282.01, subdivision 1c, is amended to read:
    Subd. 1c. Deed of conveyance; form; approvals. The deed of conveyance for
property conveyed for a an authorized public use under the authorities in subdivision
1a, paragraph (e), must be on a form approved by the attorney general and must be
conditioned on continued use for the purpose stated in the application as provided in this
section. These deeds are conditional use deeds that convey a defeasible estate. Reversion
of the estate occurs by operation of law and without the requirement for any affirmative
act by or on behalf of the state when there is a failure to put the property to the approved
authorized public use for which it was conveyed, or an abandonment of that use, except as
provided in subdivision 1d.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 5. Minnesota Statutes 2008, section 282.01, subdivision 1d, is amended to read:
    Subd. 1d. Reverter for failure to use; conveyance to state. (a) If after three years
from the date of the conveyance a governmental subdivision to which tax-forfeited land
has been conveyed for a specified an authorized public use as provided in this section
subdivision 1a, paragraph (e), fails to put the land to that use, or abandons that use, the
governing body of the subdivision may, must: (1) with the approval of the county board,
purchase the property for an authorized public purpose at the present appraised market
value as determined by the county board. In that case, the commissioner of revenue shall,
upon proper written application approved by the county board, issue an appropriate deed
to the subdivisions free of a use restriction and reverter. The governing body may also, or
(2) authorize the proper officers to convey the land, or the part of the land not required for
an authorized public use, to the state of Minnesota. in trust for the taxing districts. If the
governing body purchases the property under clause (1), the commissioner of revenue
shall, upon proper application submitted by the county auditor, convey the property on
behalf of the state by quit claim deed to the subdivision free of a use restriction and the
possibility of reversion or defeasement. If the governing body decides to reconvey the
property to the state under this clause, the officers shall execute a deed of conveyance
immediately. The conveyance is subject to the approval of the commissioner and its form
must be approved by the attorney general. A sale, lease, transfer, or other conveyance
of tax-forfeited lands by a housing and redevelopment authority, a port authority, an
economic development authority, or a city as authorized by chapter 469 is not an
abandonment of use and the lands shall not be reconveyed to the state nor shall they
revert to the state. A certificate made by a housing and redevelopment authority, a port
authority, an economic development authority, or a city referring to a conveyance by it
and stating that the conveyance has been made as authorized by chapter 469 may be filed
with the county recorder or registrar of titles, and the rights of reverter in favor of the state
provided by subdivision 1e will then terminate. No vote of the people is required for the
conveyance. For the purposes of this paragraph, there is no failure to put the land to the
authorized public use and no abandonment of that use if a formal plan of the governmental
subdivision, including, but not limited to, a comprehensive plan or land use plan that
shows an intended future use of the land for the authorized public use.
(b) Property held by a governmental subdivision of the state under a conditional use
deed executed under subdivision 1a, paragraph (e), by the commissioner of revenue on or
after January 1, 2007, may be acquired by that governmental subdivision after 15 years
from the date of the conveyance if the commissioner determines upon written application
from the subdivision that the subdivision has in fact put the property to the authorized
public use for which it was conveyed, and the subdivision has made a finding that it
has no current plans to change the use of the lands. Prior to conveying the property, the
commissioner shall inquire whether the county board where the land is located objects to a
conveyance of the property to the subdivision without conditions and without further act
by or obligation of the subdivision. If the county does not object within 60 days, and the
commissioner makes a favorable determination, the commissioner shall issue a quit claim
deed on behalf of the state unconditionally conveying the property to the governmental
subdivision. For purposes of this paragraph, demonstration of an intended future use
for the authorized public use in a formal plan of the governmental subdivision does not
constitute use for that authorized public use.
(c) Property held by a governmental subdivision of the state under a conditional
use deed executed under subdivision 1a, paragraph (e), by the commissioner of revenue
before January 1, 2007, is released from the use restriction and possibility of reversion on
January 1, 2022, if the county board records a resolution describing the land and citing
this paragraph. The county board may authorize the county treasurer to deduct the amount
of the recording fees from future settlements of property taxes to the subdivision.
(d) All property conveyed under a conditional use deed executed under subdivision
1a, paragraph (e), by the commissioner of revenue is released from the use restriction and
reverter, and any use restriction or reverter for which no declaration of reversion has been
recorded with the county recorder or registrar of titles, as appropriate, is nullified on the
later of: (1) January 1, 2015; (2) 30 years from the date the deed was acknowledged; or
(3) final resolution of an appeal to district court under subdivision 1e, if a lis pendens
related to the appeal is recorded in the office of the county recorder or registrar of titles,
as appropriate, prior to January 1, 2015.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 6. Minnesota Statutes 2008, section 282.01, is amended by adding a subdivision
to read:
    Subd. 1g. Conditional use deed fees. (a) A governmental subdivision of the state
applying for a conditional use deed under subdivision 1a, paragraph (e), must submit a fee
of $250 to the commissioner of revenue along with the application. If the application is
denied, the commissioner shall refund $150 of the application fee.
(b) The proceeds from the fees must be deposited in a Department of Revenue
conditional use deed revolving fund. The sums deposited into the revolving fund are
appropriated to the commissioner of revenue for the purpose of making the refunds
described in this subdivision, and administering conditional use deed laws.
EFFECTIVE DATE.This section is effective for applications received by the
commissioner after June 30, 2010.

    Sec. 7. Minnesota Statutes 2008, section 282.01, is amended by adding a subdivision
to read:
    Subd. 1h. Conveyance; form. The instruments of conveyance executed and issued
by the commissioner of revenue under subdivision 1a, paragraphs (c), (d), (e), (f), (g),
and (h), and subdivision 1d, paragraph (b), must be on a form approved by the attorney
general and are prima facie evidence of the facts stated therein and that the execution and
issuance of the conveyance complies with the applicable laws.
EFFECTIVE DATE.This section is effective for deeds executed by the
commissioner of revenue after June 30, 2010.

    Sec. 8. Minnesota Statutes 2008, section 282.01, subdivision 2, is amended to read:
    Subd. 2. Conservation lands; county board supervision. (a) Lands classified as
conservation lands, unless reclassified as nonconservation lands, sold to a governmental
subdivision of the state, designated as lands primarily suitable for forest production and
sold as hereinafter provided, or released from the trust in favor of the taxing districts, as
herein provided, will must be held under the supervision of the county board of the county
within which such the parcels lie. and must not be conveyed or sold unless the lands are:
The county board may, by resolution duly adopted, declare lands classified as
conservation lands as primarily suitable for timber production and as lands which should
be placed in private ownership for such purposes. If such action be approved by the
commissioner of natural resources, the lands so designated, or any part thereof, may be
sold by the county board in the same manner as provided for the sale of lands classified as
nonconservation lands. Such county action and the approval of the commissioner shall be
limited to lands lying within areas zoned for restricted uses under the provisions of Laws
1939, chapter 340, or any amendments thereof.
(1) reclassified as nonconservation lands;
(2) conveyed to a governmental subdivision of the state under subdivision 1a;
(3) released from the trust in favor of the taxing districts as provided in paragraph
(b); or
(4) conveyed or sold under the authority of another general or special law.
(b) The county board may, by resolution duly adopted, resolve that certain lands
classified as conservation lands shall be devoted to conservation uses and may submit
such a resolution to the commissioner of natural resources. If, upon investigation,
the commissioner of natural resources determines that the lands covered by such the
resolution, or any part thereof, can be managed and developed for conservation purposes,
the commissioner shall make a certificate describing the lands and reciting the acceptance
thereof on behalf of the state for such purposes. The commissioner shall transmit the
certificate to the county auditor, who shall note the same upon the auditor's records and
record the same with the county recorder. The title to all lands so accepted shall be held
by the state free from any trust in favor of any and all taxing districts and such the lands
shall be devoted thereafter to the purposes of forestry, water conservation, flood control,
parks, game refuges, controlled game management areas, public shooting grounds, or
other public recreational or conservation uses, and managed, controlled, and regulated
for such purposes under the jurisdiction of the commissioner of natural resources and
the divisions of the department.
(c) All proceeds derived from the sale of timber, lease of crops of hay, or other
revenue from lands under the jurisdiction of the commissioner of natural resources shall
be credited to the general fund of the state.
In case (d) If the commissioner of natural resources shall determine determines that
any tract of land so held acquired by the state under paragraph (b) and situated within or
adjacent to the boundaries of any governmental subdivision of the state is suitable for use
by such the subdivision for any authorized public purpose, the commissioner may convey
such the tract by deed in the name of the state to such the subdivision upon the filing
with the commissioner of a resolution adopted by a majority vote of all the members
of the governing body thereof, stating the purpose for which the land is desired. The
deed of conveyance shall be upon a form approved by the attorney general and must be
conditioned upon continued use for the purpose stated in the resolution. All proceeds
derived from the sale of timber, lease of hay stumpage, or other revenue from such
lands under the jurisdiction of the natural resources commissioner shall be paid into the
general fund of the state.
(e) The county auditor, with the approval of the county board, may lease conservation
lands remaining under the jurisdiction supervision of the county board and sell timber
and hay stumpage thereon in the manner hereinafter provided, and all proceeds derived
therefrom shall be distributed in the same manner as provided in section 282.04.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 9. Minnesota Statutes 2008, section 282.01, subdivision 3, is amended to read:
    Subd. 3. Nonconservation lands; appraisal and sale. (a) All parcels of land
classified as nonconservation, except those which may be reserved, shall be sold as
provided, if it is determined, by the county board of the county in which the parcels lie,
that it is advisable to do so, having in mind their accessibility, their proximity to existing
public improvements, and the effect of their sale and occupancy on the public burdens.
Any parcels of land proposed to be sold shall be first appraised by the county board of
the county in which the parcels lie. The parcels may be reappraised whenever the county
board deems it necessary to carry out the intent of sections 282.01 to 282.13.
(b) In an appraisal the value of the land and any standing timber on it shall be
separately determined. No parcel of land containing any standing timber may be sold until
the appraised value of the timber on it and the sale of the land have been approved by the
commissioner of natural resources. The commissioner shall base review of a proposed
sale on the policy and considerations specified in subdivision 1. The decision of the
commissioner shall be in writing and shall state the reasons for it. The commissioner's
decision is exempt from the rulemaking provisions of chapter 14 and section 14.386
does not apply. The county may appeal the decision of the commissioner in accordance
with chapter 14.
(c) In any county in which a state forest or any part of it is located, the county
auditor shall submit to the commissioner at least 60 days before the first publication of the
list of lands to be offered for sale a list of all lands included on the list which are situated
outside of any incorporated municipality. If, at any time before the opening of the sale, the
commissioner notifies the county auditor in writing that there is standing timber on any
parcel of such land, the parcel shall not be sold unless the requirements of this section
respecting the separate appraisal of the timber and the approval of the appraisal by the
commissioner have been complied with. The commissioner may waive the requirement
of the 60-day notice as to any parcel of land which has been examined and the timber
value approved as required by this section.
(d) If any public improvement is made by a municipality after any parcel of land has
been forfeited to the state for the nonpayment of taxes, and the improvement is assessed in
whole or in part against the property benefited by it, the clerk of the municipality shall
certify to the county auditor, immediately upon the determination of the assessments for
the improvement, the total amount that would have been assessed against the parcel of land
if it had been subject to assessment; or if the public improvement is made, petitioned for,
ordered in or assessed, whether the improvement is completed in whole or in part, at any
time between the appraisal and the sale of the parcel of land, the cost of the improvement
shall be included as a separate item and added to the appraised value of the parcel of land
at the time it is sold. No sale of a parcel of land shall discharge or free the parcel of land
from lien for the special benefit conferred upon it by reason of the public improvement
until the cost of it, including penalties, if any, is paid. The county board shall determine
the amount, if any, by which the value of the parcel was enhanced by the improvement and
include the amount as a separate item in fixing the appraised value for the purpose of sale.
In classifying, appraising, and selling the lands, the county board may designate the tracts
as assessed and acquired, or may by resolution provide for the subdivision of the tracts into
smaller units or for the grouping of several tracts into one tract when the subdivision or
grouping is deemed advantageous for the purpose of sale. Each such smaller tract or larger
tract must be classified and appraised as such before being offered for sale. If any such
lands have once been classified, the board of county commissioners, in its discretion, may,
by resolution, authorize the sale of the smaller tract or larger tract without reclassification.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 10. Minnesota Statutes 2008, section 282.01, subdivision 4, is amended to read:
    Subd. 4. Sale: method, requirements, effects. The sale authorized under
subdivision 3 must be conducted by the county auditor at the county seat of the county in
which the parcels lie, except that in St. Louis and Koochiching Counties, the sale may
be conducted in any county facility within the county. The sale must not be for less than
the appraised value except as provided in subdivision 7a. The parcels must be sold for
cash only and at not less than the appraised value, unless the county board of the county
has adopted a resolution providing for their sale on terms, in which event the resolution
controls with respect to the sale. When the sale is made on terms other than for cash only
(1) a payment of at least ten percent of the purchase price must be made at the time of
purchase, and the balance must be paid in no more than ten equal annual installments, or
(2) the payments must be made in accordance with county board policy, but in no event
may the board require more than 12 installments annually, and the contract term must not
be for more than ten years. Standing timber or timber products must not be removed from
these lands until an amount equal to the appraised value of all standing timber or timber
products on the lands at the time of purchase has been paid by the purchaser. If a parcel of
land bearing standing timber or timber products is sold at public auction for more than
the appraised value, the amount bid in excess of the appraised value must be allocated
between the land and the timber in proportion to their respective appraised values. In that
case, standing timber or timber products must not be removed from the land until the
amount of the excess bid allocated to timber or timber products has been paid in addition
to the appraised value of the land. The purchaser is entitled to immediate possession,
subject to the provisions of any existing valid lease made in behalf of the state.
For sales occurring on or after July 1, 1982, the unpaid balance of the purchase price
is subject to interest at the rate determined pursuant to section 549.09. The unpaid balance
of the purchase price for sales occurring after December 31, 1990, is subject to interest
at the rate determined in section 279.03, subdivision 1a. The interest rate is subject to
change each year on the unpaid balance in the manner provided for rate changes in section
549.09 or 279.03, subdivision 1a, whichever, is applicable. Interest on the unpaid contract
balance on sales occurring before July 1, 1982, is payable at the rate applicable to the sale
at the time that the sale occurred.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 11. Minnesota Statutes 2008, section 282.01, subdivision 7, is amended to read:
    Subd. 7. County sales; notice, purchase price, disposition. The sale must
commence at the time determined by the county board of the county in which the parcels
are located. The county auditor shall offer the parcels of land in order in which they
appear in the notice of sale, and shall sell them to the highest bidder, but not for a sum
less than the appraised value, until all of the parcels of land have been offered. Then the
county auditor shall sell any remaining parcels to anyone offering to pay the appraised
value, except that if the person could have repurchased a parcel of property under section
282.012 or 282.241, that person may not purchase that same parcel of property at the sale
under this subdivision for a purchase price less than the sum of all taxes, assessments,
penalties, interest, and costs due at the time of forfeiture computed under section 282.251,
and any special assessments for improvements certified as of the date of sale. The sale
must continue until all the parcels are sold or until the county board orders a reappraisal or
withdraws any or all of the parcels from sale. The list of lands may be added to and the
added lands may be sold at any time by publishing the descriptions and appraised values.
The added lands must be: (1) parcels of land that have become forfeited and classified
as nonconservation since the commencement of any prior sale; (2) parcels classified as
nonconservation that have been reappraised; (3) parcels that have been reclassified as
nonconservation; or (4) other parcels that are subject to sale but were omitted from the
existing list for any reason. The descriptions and appraised values must be published in
the same manner as provided for the publication of the original list. Parcels added to the
list must first be offered for sale to the highest bidder before they are sold at appraised
value. All parcels of land not offered for immediate sale, as well as parcels that are offered
and not immediately sold, continue to be held in trust by the state for the taxing districts
interested in each of the parcels, under the supervision of the county board. Those parcels
may be used for public purposes until sold, as directed by the county board.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 12. Minnesota Statutes 2008, section 282.01, subdivision 7a, is amended to read:
    Subd. 7a. City sales; alternate procedures. Land located in a home rule charter
or statutory city, or in a town which cannot be improved because of noncompliance with
local ordinances regarding minimum area, shape, frontage or access may be sold by the
county auditor pursuant to this subdivision if the auditor determines that a nonpublic sale
will encourage the approval of sale of the land by the city or town and promote its return
to the tax rolls. If the physical characteristics of the land indicate that its highest and best
use will be achieved by combining it with an adjoining parcel and the city or town has not
adopted a local ordinance governing minimum area, shape, frontage, or access, the land
may also be sold pursuant to this subdivision. If the property consists of an undivided
interest in land or land and improvements, the property may also be sold to the other
owners under this subdivision. The sale of land pursuant to this subdivision shall be
subject to any conditions imposed by the county board pursuant to section 282.03. The
governing body of the city or town may recommend to the county board conditions to be
imposed on the sale. The county auditor may restrict the sale to owners of lands adjoining
the land to be sold. The county auditor shall conduct the sale by sealed bid or may select
another means of sale. The land shall be sold to the highest bidder but in no event shall the
land and may be sold for less than its appraised value. All owners of land adjoining the
land to be sold shall be given a written notice at least 30 days prior to the sale.
This subdivision shall be liberally construed to encourage the sale and utilization
of tax-forfeited land, to eliminate nuisances and dangerous conditions and to increase
compliance with land use ordinances.
EFFECTIVE DATE.This section is effective July 1, 2010.

    Sec. 13. Minnesota Statutes 2008, section 282.01, is amended by adding a subdivision
to read:
    Subd. 12. Notice; public hearing for use change. If a governmental subdivision
that acquired a parcel for public use under this section later determines to change the use,
it must hold a public hearing on the proposed use change. The governmental subdivision
must mail written notice of the proposed use change and the public hearing to each owner
of property that is within 400 feet of the parcel at least ten days and no more than 60 days
before it holds the hearing. The notice must identify: (1) the parcel, (2) its current use,
(3) the proposed use, (4) the date, time, and place of the public hearing, and (5) where
to submit written comments on the proposal and that the public is invited to testify at
the public hearing.
EFFECTIVE DATE.This section is effective July 1, 2010, and applies to a change
in use of a parcel acquired under Minnesota Statutes, section 282.01, whether acquired by
the governmental subdivision before or after the effective date of this section.

    Sec. 14. REPEALER.
Minnesota Statutes 2008, sections 282.01, subdivisions 9, 10, and 11; and 383A.76,
are repealed.
EFFECTIVE DATE.This section is effective July 1, 2010.

ARTICLE 10
MISCELLANEOUS

    Section 1. [3.192] REQUIREMENTS FOR NEW OR RENEWED TAX
EXPENDITURES.
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. For purposes of this section, "tax
expenditure" has the meaning given in section 270C.11, subdivision 6.
EFFECTIVE DATE.This section is effective for tax expenditures enacted after
July 1, 2010.

    Sec. 2. Minnesota Statutes 2008, section 270C.34, subdivision 1, is amended to read:
    Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any
penalty or interest that is imposed by a law administered by the commissioner, or imposed
by section 270.0725, subdivision 1 or 2, as a result of the late payment of tax or late
filing of a return, if the failure to timely pay the tax or failure to timely file the return is
due to reasonable cause, or if the taxpayer is located in a presidentially declared disaster
or in a presidentially declared state of emergency area or in an area declared to be in a
state of emergency by the governor under section 12.31.
    (b) The commissioner shall abate any part of a penalty or additional tax charge
under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous
advice given to the taxpayer in writing by an employee of the department acting in
an official capacity, if the advice:
    (1) was reasonably relied on and was in response to a specific written request of the
taxpayer; and
    (2) was not the result of failure by the taxpayer to provide adequate or accurate
information.
    (c) The commissioner may abate a penalty imposed under section 270.0725,
subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline
company is located in a presidentially declared disaster area.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2008, section 270C.52, subdivision 2, is amended to read:
    Subd. 2. Payment agreements. (a) When any portion of any tax payable to the
commissioner together with interest and penalty thereon, if any, has not been paid, the
commissioner may extend the time for payment for a further period. When the authority
of this section is invoked, the extension shall be evidenced by written agreement signed by
the taxpayer and the commissioner, stating the amount of the tax with penalty and interest,
if any, and providing for the payment of the amount in installments.
(b) The agreement may contain a confession of judgment for the amount and for any
unpaid portion thereof. If the agreement contains a confession of judgment, the confession
of judgment must provide that the commissioner may enter judgment against the taxpayer
in the district court of the county of residence as shown upon the taxpayer's tax return for
the unpaid portion of the amount specified in the extension agreement.
(c) The agreement shall provide that it can be terminated, after notice by the
commissioner, if information provided by the taxpayer prior to the agreement was
inaccurate or incomplete, collection of the tax covered by the agreement is in jeopardy,
there is a subsequent change in the taxpayer's financial condition, the taxpayer has failed
to make a payment due under the agreement, or the taxpayer has failed to pay any other
tax or file a tax return coming due after the agreement.
(d) The notice must be given at least 14 calendar days prior to termination, and shall
advise the taxpayer of the right to request a reconsideration from the commissioner of
whether termination is reasonable and appropriate under the circumstances. A request for
reconsideration does not stay collection action beyond the 14-day notice period. If the
commissioner has reason to believe that collection of the tax covered by the agreement
is in jeopardy, the commissioner may proceed under section 270C.36 and terminate the
agreement without regard to the 14-day period.
(e) The commissioner may accept other collateral the commissioner considers
appropriate to secure satisfaction of the tax liability. The principal sum specified in the
agreement shall bear interest at the rate specified in section 270C.40 on all unpaid portions
thereof until the same has been fully paid or the unpaid portion thereof has been entered as
a judgment. The judgment shall bear interest at the rate specified in section 270C.40.
(f) If it appears to the commissioner that the tax reported by the taxpayer is in excess
of the amount actually owing by the taxpayer, the extension agreement or the judgment
entered pursuant thereto shall be corrected. If after making the extension agreement
or entering judgment with respect thereto, the commissioner determines that the tax as
reported by the taxpayer is less than the amount actually due, the commissioner shall
assess a further tax in accordance with the provisions of law applicable to the tax.
(g) The authority granted to the commissioner by this section is in addition to any
other authority granted to the commissioner by law to extend the time of payment or the
time for filing a return and shall not be construed in limitation thereof.
(h) The commissioner shall charge a fee for entering into payment agreements that
reflects the commissioner's costs for entering into payment agreements. The fee is set at
$50 and is charged for entering into a payment agreement, for entering into a new payment
agreement after the taxpayer has defaulted on a prior agreement, and for entering into a
new payment agreement as a result of renegotiation of the terms of an existing agreement.
The fee is paid to the commissioner before the payment agreement becomes effective and
does not reduce the amount of the liability.
EFFECTIVE DATE.This section is effective for payment agreements entered
into or renegotiated after June 30, 2010.

    Sec. 4. Minnesota Statutes 2009 Supplement, section 349.12, subdivision 25, is
amended to read:
    Subd. 25. Lawful purpose. (a) "Lawful purpose" means one or more of the
following:
    (1) any expenditure by or contribution to a 501(c)(3) or festival organization, as
defined in subdivision 15a, provided that the organization and expenditure or contribution
are in conformity with standards prescribed by the board under section 349.154, which
standards must apply to both types of organizations in the same manner and to the same
extent;
    (2) a contribution to or expenditure for goods and services for an individual or
family suffering from poverty, homelessness, or disability, which is used to relieve the
effects of that suffering;
    (3) a contribution to a program recognized by the Minnesota Department of Human
Services for the education, prevention, or treatment of problem gambling;
    (4) a contribution to or expenditure on a public or private nonprofit educational
institution registered with or accredited by this state or any other state;
    (5) a contribution to an individual, public or private nonprofit educational institution
registered with or accredited by this state or any other state, or to a scholarship fund of a
nonprofit organization whose primary mission is to award scholarships, for defraying the
cost of education to individuals where the funds are awarded through an open and fair
selection process;
    (6) activities by an organization or a government entity which recognize military
service to the United States, the state of Minnesota, or a community, subject to rules
of the board, provided that the rules must not include mileage reimbursements in the
computation of the per diem reimbursement limit and must impose no aggregate annual
limit on the amount of reasonable and necessary expenditures made to support:
    (i) members of a military marching or color guard unit for activities conducted
within the state;
    (ii) members of an organization solely for services performed by the members at
funeral services;
    (iii) members of military marching, color guard, or honor guard units may be
reimbursed for participating in color guard, honor guard, or marching unit events within
the state or states contiguous to Minnesota at a per participant rate of up to $35 per diem; or
    (iv) active military personnel and their immediate family members in need of
support services;
    (7) recreational, community, and athletic facilities and activities intended primarily
for persons under age 21, provided that such facilities and activities do not discriminate on
the basis of gender and the organization complies with section 349.154, subdivision 3a;
    (8) payment of local taxes authorized under this chapter, taxes imposed by the
United States on receipts from lawful gambling, the taxes imposed by section 297E.02,
subdivisions 1, 4, 5, and 6, and the tax imposed on unrelated business income by section
290.05, subdivision 3;
    (9) payment of real estate taxes and assessments on permitted gambling premises
owned by the licensed organization paying the taxes, or wholly leased by a licensed
veterans organization under a national charter recognized under section 501(c)(19) of the
Internal Revenue Code;
    (10) a contribution to the United States, this state or any of its political subdivisions,
or any agency or instrumentality thereof other than a direct contribution to a law
enforcement or prosecutorial agency;
    (11) a contribution to or expenditure by a nonprofit organization which is a church
or body of communicants gathered in common membership for mutual support and
edification in piety, worship, or religious observances;
    (12) an expenditure for citizen monitoring of surface water quality by individuals
or nongovernmental organizations that is consistent with section 115.06, subdivision 4,
and Minnesota Pollution Control Agency guidance on monitoring procedures, quality
assurance protocols, and data management, provided that the resulting data is submitted
to the Minnesota Pollution Control Agency for review and inclusion in the state water
quality database;
    (13) a contribution to or expenditure on projects or activities approved by the
commissioner of natural resources for:
    (i) wildlife management projects that benefit the public at large;
    (ii) grant-in-aid trail maintenance and grooming established under sections 84.83
and 84.927, and other trails open to public use, including purchase or lease of equipment
for this purpose; and
    (iii) supplies and materials for safety training and educational programs coordinated
by the Department of Natural Resources, including the Enforcement Division;
    (14) conducting nutritional programs, food shelves, and congregate dining programs
primarily for persons who are age 62 or older or disabled;
    (15) a contribution to a community arts organization, or an expenditure to sponsor
arts programs in the community, including but not limited to visual, literary, performing,
or musical arts;
    (16) an expenditure by a licensed fraternal organization or a licensed veterans
organization for payment of water, fuel for heating, electricity, and sewer costs for a
building wholly owned or wholly leased by and used as the primary headquarters of the
licensed veterans organization or fraternal organization:
(i) up to 100 percent for a building wholly owned or wholly leased by and used as
the primary headquarters of the licensed veteran or fraternal organization; or
(ii) a proportional amount subject to approval by the director and based on the
portion of a building used as the primary headquarters of the licensed veteran or fraternal
organization;
    (17) expenditure by a licensed veterans organization of up to $5,000 in a calendar
year in net costs to the organization for meals and other membership events, limited to
members and spouses, held in recognition of military service. No more than $5,000 can be
expended in total per calendar year under this clause by all licensed veterans organizations
sharing the same veterans post home;
    (18) payment of fees authorized under this chapter imposed by the state of Minnesota
to conduct lawful gambling in Minnesota;
    (19) a contribution or expenditure to honor an individual's humanitarian service
as demonstrated through philanthropy or volunteerism to the United States, this state,
or local community;
(20) a contribution by a licensed organization to another licensed organization with
prior board approval, with the contribution designated to be used for one or more of the
following lawful purposes under this section: clauses (1) to (7), (11) to (15), (19), and (25);
(21) an expenditure that is a contribution to a parent organization, if the parent
organization: (i) has not provided to the contributing organization within one year of the
contribution any money, grants, property, or other thing of value, and (ii) has received
prior board approval for the contribution that will be used for a program that meets one or
more of the lawful purposes under subdivision 7a;
(22) an expenditure for the repair, maintenance, or improvement of real property
and capital assets owned by an organization, or for the replacement of a capital asset that
can no longer be repaired, with a fiscal year limit of five percent of gross profits from
the previous fiscal year, with no carryforward of unused allowances. The fiscal year is
July 1 through June 30. Total expenditures for the fiscal year may not exceed the limit
unless the board has specifically approved the expenditures that exceed the limit due to
extenuating circumstances beyond the organization's control. An expansion of a building
or bar-related expenditures are not allowed under this provision.
(i) The expenditure must be related to the portion of the real property or capital asset
that must be made available for use free of any charge to other nonprofit organizations,
community groups, or service groups, or is used for the organization's primary mission or
headquarters.
(ii) An expenditure may be made to bring an existing building that the organization
owns into compliance with the Americans with Disabilities Act.
(iii) An organization may apply the amount that is allowed under item (ii) to the
erection or acquisition of a replacement building that is in compliance with the Americans
with Disabilities Act if the board has specifically approved the amount. The cost of
the erection or acquisition of a replacement building may not be made from gambling
proceeds, except for the portion allowed under this item;
(23) an expenditure for the acquisition or improvement of a capital asset with a cost
greater than $2,000, excluding real property, that will be used exclusively for lawful
purposes under this section if the board has specifically approved the amount;
(24) an expenditure for the acquisition, erection, improvement, or expansion of real
property, if the board has first specifically authorized the expenditure after finding that the
real property will be used exclusively for lawful purpose under this section; or
(25) an expenditure, including a mortgage payment or other debt service payment,
for the erection or acquisition of a comparable building to replace an organization-owned
building that was destroyed or made uninhabitable by fire or catastrophe or to replace an
organization-owned building that was taken or sold under an eminent domain proceeding.
The expenditure may be only for that part of the replacement cost not reimbursed by
insurance for the fire or catastrophe or compensation not received from a governmental
unit under the eminent domain proceeding, if the board has first specifically authorized
the expenditure.
(b) Expenditures authorized by the board under clauses (24) and (25) must be
51 percent completed within two years of the date of board approval; otherwise the
organization must reapply to the board for approval of the project. "Fifty-one percent
completed" means that the work completed must represent at least 51 percent of the value
of the project as documented by the contractor or vendor.
    (c) Notwithstanding paragraph (a), "lawful purpose" does not include:
    (1) any expenditure made or incurred for the purpose of influencing the nomination
or election of a candidate for public office or for the purpose of promoting or defeating a
ballot question;
    (2) any activity intended to influence an election or a governmental decision-making
process;
    (3) a contribution to a statutory or home rule charter city, county, or town by a
licensed organization with the knowledge that the governmental unit intends to use the
contribution for a pension or retirement fund; or
(4) a contribution to a 501(c)(3) organization or other entity with the intent or effect
of not complying with lawful purpose restrictions or requirements.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. TAX EXPENDITURE REVIEW REPORT.
    Subdivision 1. Report to the legislature. By February 15, 2011, the commissioner
of revenue shall provide a report to the chairs and ranking minority members of the house
of representatives and senate tax committees with jurisdiction over taxes suggesting a
process for the periodic review and sunset or extension of tax expenditures on an ongoing
basis.
    Subd. 2. Contents of the report. (a) The report shall include the following
information for every tax, as defined in Minnesota Statutes, section 270C.11, subdivision 6:
(1) a definition of the tax base for the tax;
(2) a definition of a tax expenditure for each tax; and
(3) a list of existing provisions in law that meet the definition of tax expenditure for
each tax.
(b) The report shall include a suggested list of information, currently not included in
the tax expenditure budget under Minnesota Statutes, section 270C.11, needed to allow
evaluation of the effectiveness of new and existing tax expenditures in meeting not only
the stated goal of the tax expenditure but also the general tax principles of:
(1) transparency and understandability;
(2) simplicity and efficiency;
(3) equity;
(4) stability and predictability;
(5) compliance and accountability;
(6) national and global competitiveness; and
(7) conformity of the expenditure with corresponding federal taxes and multistate
agreements.
(c) The report shall also include recommendations on specific procedures for
periodic review of tax expenditures, including the need for additional reports, study or
oversight groups, and fiscal or other resources, and a suggested timetable for systematic
review of the tax expenditures in the various tax areas.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. OTTERTAIL COUNTY; ADDITIONAL AID, 2010 ONLY.
$200,000 is appropriated in fiscal year 2011 from the general fund to the
commissioner of revenue to make a payment to Ottertail County to compensate the
county for costs incurred for repair of roads and other infrastructure due to flooding. The
payment shall be made with the December 2010 payment under Minnesota Statutes,
section 477A.015.

    Sec. 7. APPROPRIATION; CHISAGO COUNTY.
$100,000 is appropriated in fiscal year 2011 from the general fund to the
commissioner of commerce to be used to provide a grant to Chisago County for
development of a carbon neutral industrial park that received a grant under Laws 2009,
chapter 138, article 4. This is a onetime appropriation. * (The preceding section was
indicated as vetoed by the governor.)

    Sec. 8. APPROPRIATION; CITY OF PRINCETON.
$100,000 is appropriated in fiscal year 2011 from the general fund to the
commissioner of employment and economic development to be used to provide a grant
to the city of Princeton for engineering and preliminary design for a biomass facility
and industrial park improvements for renewable energy development. This is a onetime
appropriation. * (The preceding section was indicated as vetoed by the governor.)

    Sec. 9. APPROPRIATION; DEPARTMENT OF REVENUE FACILITY; ELY.
$100,000 is appropriated in fiscal year 2011 from the general fund to the
commissioner of revenue to be used for facility and parking improvements at the revenue
department facility in Ely. This is a onetime appropriation. * (The preceding section
was indicated as vetoed by the governor.)

    Sec. 10. APPROPRIATION; TAX EXPENDITURE REVIEW REPORT.
$60,000 is appropriated in fiscal year 2011 from the general fund to the commissioner
of revenue for the tax expenditure review report required under section 5. The
appropriation under this section is onetime and is not added to the agency's base budget.
Presented to the governor May 18, 2010
Signed by the governor May 27, 2010, 10:36 a.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569