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CHAPTER 88--H.F.No. 1298
An act
relating to the financing and operation of state and local government;
making policy, technical, administrative, enforcement, clarifying, and other
changes to income, corporate franchise, estate, property; sales, use, gross
receipts, local, solid waste, gambling, mortgage, deed, petroleum, insurance,
minerals, production, and other taxes and tax-related provisions; providing
terms and conditions relating to issuance of obligations and financing of public
improvements; making changes to tax increment financing and local government
aid provisions, conforming to certain federal provisions; providing clarification
for eligibility for property tax exemption for institutions of public charity;
modifying truth in taxation, tax preparation services, police and firefighter relief
association amortization state-aid provisions; making changes to local taxing
authorities; providing emergency debt certificates; authorizing the issuance of
local bonds; providing temporary suspension of new or increased maintenance of
effort requirements; requiring studies; appropriating money;amending Minnesota
Statutes 2008, sections 37.31, subdivision 8; 123B.10, subdivision 1; 124D.4531,
by adding a subdivision; 126C.41, subdivision 2; 126C.55, subdivision 4;
144F.01, subdivision 3; 204B.46; 270B.14, subdivision 16; 270C.12, by adding
a subdivision; 270C.445; 270C.446, subdivisions 2, 5; 270C.56, subdivisions
1, 3; 272.02, subdivisions 7, 55, 86, by adding subdivisions; 272.029,
subdivision 6; 273.11, subdivision 23; 273.111, subdivision 4, by adding a
subdivision; 273.1115, subdivision 2; 273.113, subdivisions 1, 2; 273.1231,
subdivision 8; 273.124, subdivisions 3, 3a, 21; 273.13, subdivisions 23, 25, 33;
273.33, subdivision 2; 273.37, subdivision 2; 274.13, subdivision 2; 274.135,
subdivision 3; 274.14; 274.175; 275.065, subdivisions 1, 3, 6; 275.07, by
adding a subdivision; 275.70, subdivision 5; 276.04, subdivision 2; 279.01,
subdivision 1; 279.10; 282.08; 287.04; 287.05, by adding a subdivision; 287.08;
287.22; 287.25; 289A.02, subdivision 7, as amended; 289A.08, subdivision 3;
289A.11, subdivision 1; 289A.12, by adding a subdivision; 289A.18, subdivision
1; 289A.19, subdivision 4; 289A.20, subdivision 4; 289A.31, subdivision 5;
289A.38, subdivision 7; 289A.41; 290.01, subdivisions 19, as amended, 19a, as
amended, 19b, 19c, as amended, 19d, as amended, 31, as amended; 290.06,
subdivision 2c; 290.067, subdivision 2a, as amended; 290.0671, subdivision
1; 290.0678, as added; 290.091, subdivision 2; 290A.03, subdivisions 3, as
amended, 15, as amended; 290A.10; 290A.14; 290B.03, subdivision 1; 290C.06;
290C.07; 291.005, subdivision 1, as amended; 295.56; 295.57, subdivision 5;
296A.21, subdivision 1; 297A.62, by adding a subdivision; 297A.64, subdivision
2; 297A.70, subdivisions 2, 4; 297A.71, by adding a subdivision; 297A.75,
subdivisions 1, 2; 297A.94; 297A.992, subdivision 2; 297A.993, subdivision 1;
297B.02, subdivision 1; 297E.02, subdivision 4; 297E.06, subdivision 4, by
adding a subdivision; 297E.11, subdivision 1; 297F.09, subdivision 7; 297G.09,
subdivision 6; 297H.06, subdivision 1; 297I.30, by adding a subdivision; 297I.35,
subdivision 2; 298.227; 298.28, subdivisions 2, 4, 11; 298.75, subdivision 2;
309.53, subdivision 3; 349.1641; 349.19, subdivision 9; 360.036, subdivision
2; 366.095, subdivision 1; 373.47, subdivision 1; 373.48, subdivision 1, by
adding a subdivision; 375.194, subdivision 5; 383A.75, subdivision 3; 423A.02,
subdivisions 1, 1b, 3, by adding a subdivision; 428A.03, subdivision 1; 428A.08;
428A.09; 428A.10; 428A.101; 428A.13, by adding a subdivision; 428A.14,
subdivision 1; 428A.21; 429.011, subdivision 2a; 446A.086, subdivision 8, by
adding a subdivision; 465.719, subdivision 9; 469.005, subdivision 1; 469.015,
subdivisions 1, 2, 3; 469.034, subdivision 2; 469.040, subdivisions 2, 4; 469.053,
by adding a subdivision; 469.153, subdivision 2; 469.174, subdivision 22;
469.175, subdivisions 1, 6; 469.176, subdivisions 3, 6; 469.1763, subdivision 3;
469.178, subdivision 7; 469.312, subdivision 5; 471.191, subdivision 1; 473.13,
subdivision 1; 473.39, by adding a subdivision; 473.843, subdivision 3; 474A.02,
subdivisions 2, 14; 475.58, subdivision 1; 475.67, subdivision 8; 477A.011,
subdivisions 34, 36, 42; 477A.013, subdivision 8; 645.44, subdivision 19; Laws
1971, chapter 773, section 4, as amended; Laws 1976, chapter 162, section
3, as amended; Laws 1986, chapter 396, section 4, subdivision 3; by adding
a subdivision; Laws 1986, chapter 400, section 44, as amended; Laws 1991,
chapter 291, article 8, section 27, subdivision 3, as amended; Laws 1993, chapter
375, article 9, section 46, subdivision 2, as amended, by adding a subdivision;
Laws 1996, chapter 471, article 2, section 30; Laws 1998, chapter 389, article
8, section 37, subdivision 1; Laws 2001, First Special Session chapter 5, article
3, section 8, as amended; Laws 2002, chapter 377, article 3, section 25; Laws
2006, chapter 259, article 3, section 12, subdivision 3; Laws 2008, chapter 366,
article 5, section 34; article 6, sections 9; 10; 46, subdivisions 1, 2; article 7,
sections 16, subdivision 3; 18, subdivisions 2, 3; Laws 2009, chapter 12, article
2, section 5, subdivision 2; proposing coding for new law in Minnesota Statutes,
chapters 16A; 270C; 275; 469; 475; repealing Minnesota Statutes 2008, sections
126C.21, subdivision 4; 275.065, subdivisions 5a, 6b, 6c, 8, 9, 10; 287.26;
287.27, subdivision 1; 297A.67, subdivision 24; 298.28, subdivisions 11a, 13;
Laws 1993, chapter 375, article 5, section 42, as amended; Laws 1998, chapter
407, article 8, section 12, subdivision 4; Laws 2009, chapter 37, article 1, section
31, subdivision 3; Minnesota Rules, parts 8009.3000; 8115.0200; 8115.0300;
8115.0400; 8115.0500; 8115.0600; 8115.1000; 8115.1100; 8115.1200;
8115.1300; 8115.1400; 8115.1500; 8115.1600; 8115.1700; 8115.1800;
8115.1900; 8115.2000; 8115.2100; 8115.2200; 8115.2300; 8115.2400;
8115.2500; 8115.2600; 8115.2700; 8115.2800; 8115.2900; 8115.3000;
8115.4000; 8115.4100; 8115.4200; 8115.4300; 8115.4400; 8115.4500;
8115.4600; 8115.4700; 8115.4800; 8115.4900; 8115.5000; 8115.5100;
8115.5200; 8115.5300; 8115.5400; 8115.5500; 8115.5600; 8115.5700;
8115.5800; 8115.5900; 8115.6000; 8115.6100; 8115.6200; 8115.6300;
8115.6400; 8115.9900.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1
FEDERAL UPDATE

    Section 1. Minnesota Statutes 2008, section 289A.02, subdivision 7, as amended by
Laws 2009, chapter 12, article 1, section 1, is amended to read:
    Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, 2008 March 31, 2009.
EFFECTIVE DATE.This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective at the same time as the
changes were effective for federal purposes.

    Sec. 2. Minnesota Statutes 2008, section 290.01, subdivision 19, as amended by Laws
2009, chapter 12, article 1, section 2, is amended to read:
    Subd. 19. Net income. The term "net income" means the federal taxable income,
as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
date named in this subdivision, incorporating the federal effective dates of changes to the
Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in subdivisions 19a to 19f.
    In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:
    (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;
    (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
Revenue Code must be applied by allowing a deduction for capital gain dividends and
exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
Revenue Code; and
    (3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.
    The net income of a real estate investment trust as defined and limited by section
856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
    The net income of a designated settlement fund as defined in section 468B(d) of
the Internal Revenue Code means the gross income as defined in section 468B(b) of the
Internal Revenue Code.
    The Internal Revenue Code of 1986, as amended through December 31, 2008 March
31, 2009, shall be in effect for taxable years beginning after December 31, 1996.
    Except as otherwise provided, references to the Internal Revenue Code in
subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
the applicable year.
EFFECTIVE DATE.This section is effective the day following final enactment. In
enacting this section and other provisions of this article, the legislature intends net income
to include and tax to apply to interest paid on any Build America Bond, as defined under
section 54AA of the Internal Revenue Code of 1986, notwithstanding the provisions of
section 1531 of Division B, Title I of the American Recovery and Reinvestment Act of
2009, Public Law 111-5.

    Sec. 3. Minnesota Statutes 2008, section 290.01, subdivision 19a, as amended by Laws
2009, chapter 12, article 1, section 3, 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 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 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 or, 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 or, 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 amount amounts allowed under section
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 or, sales and use tax is, motor vehicle sales, or excise
taxes are the last itemized deduction 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; and
(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 for taxable years beginning after
December 31, 2008, except that clause (16) is effective for taxable years ending after
December 31, 2008.

    Sec. 4. Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to read:
    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:
    (1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;
    (2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;
    (3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. 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 and
under the provisions of Public Law 109-1;
    (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) 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) 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) job opportunity building zone income as provided under section 469.316;
    (11) 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) 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) 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) 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) 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) international economic development zone income as provided under section
469.325; and
    (17) 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) 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 for taxable years ending after
December 31, 2008.

    Sec. 5. Minnesota Statutes 2008, section 290.01, subdivision 19c, as amended by Laws
2009, chapter 12, article 1, section 4, is amended to read:
    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
there shall be added to federal taxable income:
    (1) the amount of any deduction taken for federal income tax purposes for income,
excise, or franchise taxes based on net income or related minimum taxes, including but not
limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
another state, a political subdivision of another state, the District of Columbia, or any
foreign country or possession of the United States;
    (2) interest not subject to federal tax upon obligations of: the United States, its
possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its municipalities, or any
of its governmental agencies or instrumentalities; the District of Columbia; or Indian
tribal governments;
    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
Revenue Code;
    (4) the amount of any net operating loss deduction taken for federal income tax
purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
deduction under section 810 of the Internal Revenue Code;
    (5) the amount of any special deductions taken for federal income tax purposes
under sections 241 to 247 and 965 of the Internal Revenue Code;
    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
clause (a), that are not subject to Minnesota income tax;
    (7) the amount of any capital losses deducted for federal income tax purposes under
sections 1211 and 1212 of the Internal Revenue Code;
    (8) the exempt foreign trade income of a foreign sales corporation under sections
921(a) and 291 of the Internal Revenue Code;
    (9) the amount of percentage depletion deducted under sections 611 through 614 and
291 of the Internal Revenue Code;
    (10) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, the amount of the amortization deduction allowed in computing federal taxable
income for those facilities;
    (11) the amount of any deemed dividend from a foreign operating corporation
determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
shall be reduced by the amount of the addition to income required by clauses (20), (21),
(22), and (23);
    (12) 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;
    (13) the amount of net income excluded under section 114 of the Internal Revenue
Code;
    (14) any increase in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section 304(a)(1)-(2) 303(b) of Public Law 110-343;
    (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
has an activity that in the taxable year generates a deduction for depreciation under
section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k)(1)(A) and (k)(4)(A) is allowed;
    (16) 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;
    (17) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;
    (18) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;
    (19) the amount of expenses disallowed under section 290.10, subdivision 2;
    (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
of a corporation that is a member of the taxpayer's unitary business group that qualifies
as a foreign operating corporation. For purposes of this clause, intangible expenses and
costs include:
    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
use, maintenance or management, ownership, sale, exchange, or any other disposition of
intangible property;
    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
transactions;
    (iii) royalty, patent, technical, and copyright fees;
    (iv) licensing fees; and
    (v) other similar expenses and costs.
For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.
This clause does not apply to any item of interest or intangible expenses or costs paid,
accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
to such item of income to the extent that the income to the foreign operating corporation
is income from sources without the United States as defined in subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code;
    (21) except as already included in the taxpayer's taxable income pursuant to clause
(20), any interest income and income generated from intangible property received or
accrued by a foreign operating corporation that is a member of the taxpayer's unitary
group. For purposes of this clause, income generated from intangible property includes:
    (i) income related to the direct or indirect acquisition, use, maintenance or
management, ownership, sale, exchange, or any other disposition of intangible property;
    (ii) income from factoring transactions or discounting transactions;
    (iii) royalty, patent, technical, and copyright fees;
    (iv) licensing fees; and
    (v) other similar income.
For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.
This clause does not apply to any item of interest or intangible income received or accrued
by a foreign operating corporation with respect to such item of income to the extent that
the income is income from sources without the United States as defined in subtitle A,
chapter 1, subchapter N, part 1, of the Internal Revenue Code;
    (22) the dividends attributable to the income of a foreign operating corporation that
is a member of the taxpayer's unitary group in an amount that is equal to the dividends
paid deduction of a real estate investment trust under section 561(a) of the Internal
Revenue Code for amounts paid or accrued by the real estate investment trust to the
foreign operating corporation;
    (23) the income of a foreign operating corporation that is a member of the taxpayer's
unitary group in an amount that is equal to gains derived from the sale of real or personal
property located in the United States; and
    (24) the additional amount allowed as a deduction for donation of computer
technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
extent deducted from taxable income; and
(25) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2007, except that clause (25) is effective for taxable years ending after
December 31, 2008.

    Sec. 6. Minnesota Statutes 2008, section 290.01, subdivision 19d, as amended by Laws
2009, chapter 12, article 1, section 5, 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) 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) 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 304(a)(1)-(2) 303(b) of Public Law 110-343;
    (18) 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; and
    (19) 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) 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 for taxable years beginning after
December 31, 2007, except that clause (20) is effective for taxable years ending after
December 31, 2008.

    Sec. 7. Minnesota Statutes 2008, section 290.01, subdivision 31, as amended by Laws
2009, chapter 12, article 1, section 7, is amended to read:
    Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, 2008 March 31, 2009. Internal Revenue Code also includes any uncodified provision
in federal law that relates to provisions of the Internal Revenue Code that are incorporated
into Minnesota law.
EFFECTIVE DATE.This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective at the same time as the
changes were effective for federal purposes.

    Sec. 8. Minnesota Statutes 2008, 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), and
(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),
and (16), and (18), after applying the allocation and assignability provisions of section
290.081, clause (a), or 290.17; and
    (2) the denominator is the individual's federal adjusted gross income as defined in
section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), and (13), (16), and
(17), and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1),
(9), (10), (14), (15), and (16), and (18).
EFFECTIVE DATE.This section is effective for taxable years ending after
December 31, 2008.

    Sec. 9. Minnesota Statutes 2008, section 290.067, subdivision 2a, as amended by Laws
2009, chapter 12, article 1, section 8, is amended to read:
    Subd. 2a. Income. (a) For purposes of this section, "income" means the sum of
the following:
(1) federal adjusted gross income as defined in section 62 of the Internal Revenue
Code; and
(2) the sum of the following amounts to the extent not included in clause (1):
(i) all nontaxable income;
(ii) the amount of a passive activity loss that is not disallowed as a result of section
469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal Revenue Code;
(iii) an amount equal to the total of any discharge of qualified farm indebtedness
of a solvent individual excluded from gross income under section 108(g) of the Internal
Revenue Code;
(iv) cash public assistance and relief;
(v) any pension or annuity (including railroad retirement benefits, all payments
received under the federal Social Security Act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or spouse, or which was
funded exclusively by the claimant or spouse and which funding payments were excluded
from federal adjusted gross income in the years when the payments were made;
(vi) interest received from the federal or a state government or any instrumentality
or political subdivision thereof;
(vii) workers' compensation;
(viii) nontaxable strike benefits;
(ix) the gross amounts of payments received in the nature of disability income or
sick pay as a result of accident, sickness, or other disability, whether funded through
insurance or otherwise;
(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;
(xi) contributions made by the claimant to an individual retirement account,
including a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
of the Internal Revenue Code; or deferred compensation plan under section 457 of the
Internal Revenue Code;
(xii) nontaxable scholarship or fellowship grants;
(xiii) the amount of deduction allowed under section 199 of the Internal Revenue
Code;
(xiv) the amount of deduction allowed under section 220 or 223 of the Internal
Revenue Code;
(xv) the amount of tuition expenses required to be added to income under section
290.01, subdivision 19a, clause (12); and
(xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code; and
(xvii) unemployment compensation.
In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" means federal adjusted gross income reflected in the
fiscal year ending in the next calendar year. Federal adjusted gross income may not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.
(b) "Income" does not include:
(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and
102;
(2) amounts of any pension or annuity that were exclusively funded by the claimant
or spouse if the funding payments were not excluded from federal adjusted gross income
in the years when the payments were made;
(3) surplus food or other relief in kind supplied by a governmental agency;
(4) relief granted under chapter 290A;
(5) child support payments received under a temporary or final decree of dissolution
or legal separation; and
(6) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
2001, Public Law 107-16.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2008.

    Sec. 10. Minnesota Statutes 2008, 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), and (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) and, (9) to (16), and (18).
    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) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.
    (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) "Net minimum tax" means the minimum tax imposed by this section.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2008.

    Sec. 11. Minnesota Statutes 2008, section 290A.03, subdivision 3, as amended by
Laws 2009, chapter 12, article 1, section 9, is amended to read:
    Subd. 3. Income. (1) "Income" means the sum of the following:
(a) federal adjusted gross income as defined in the Internal Revenue Code; and
(b) the sum of the following amounts to the extent not included in clause (a):
(i) all nontaxable income;
(ii) the amount of a passive activity loss that is not disallowed as a result of section
469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal Revenue Code;
(iii) an amount equal to the total of any discharge of qualified farm indebtedness
of a solvent individual excluded from gross income under section 108(g) of the Internal
Revenue Code;
(iv) cash public assistance and relief;
(v) any pension or annuity (including railroad retirement benefits, all payments
received under the federal Social Security Act, Supplemental Security Income, and
veterans benefits), which was not exclusively funded by the claimant or spouse, or which
was funded exclusively by the claimant or spouse and which funding payments were
excluded from federal adjusted gross income in the years when the payments were made;
(vi) interest received from the federal or a state government or any instrumentality
or political subdivision thereof;
(vii) workers' compensation;
(viii) nontaxable strike benefits;
(ix) the gross amounts of payments received in the nature of disability income or
sick pay as a result of accident, sickness, or other disability, whether funded through
insurance or otherwise;
(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;
(xi) contributions made by the claimant to an individual retirement account,
including a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
of the Internal Revenue Code; or deferred compensation plan under section 457 of the
Internal Revenue Code;
(xii) nontaxable scholarship or fellowship grants;
(xiii) the amount of deduction allowed under section 199 of the Internal Revenue
Code;
(xiv) the amount of deduction allowed under section 220 or 223 of the Internal
Revenue Code;
(xv) the amount of tuition expenses required to be added to income under section
290.01, subdivision 19a, clause (12); and
(xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code; and
(xvii) unemployment compensation.
In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" shall mean federal adjusted gross income reflected
in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.
(2) "Income" does not include:
(a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and
102;
(b) amounts of any pension or annuity which was exclusively funded by the claimant
or spouse and which funding payments were not excluded from federal adjusted gross
income in the years when the payments were made;
(c) surplus food or other relief in kind supplied by a governmental agency;
(d) relief granted under this chapter;
(e) child support payments received under a temporary or final decree of dissolution
or legal separation; or
(f) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
2001, Public Law 107-16.
(3) The sum of the following amounts may be subtracted from income:
(a) for the claimant's first dependent, the exemption amount multiplied by 1.4;
(b) for the claimant's second dependent, the exemption amount multiplied by 1.3;
(c) for the claimant's third dependent, the exemption amount multiplied by 1.2;
(d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
(e) for the claimant's fifth dependent, the exemption amount; and
(f) if the claimant or claimant's spouse was disabled or attained the age of 65
on or before December 31 of the year for which the taxes were levied or rent paid, the
exemption amount.
For purposes of this subdivision, the "exemption amount" means the exemption
amount under section 151(d) of the Internal Revenue Code for the taxable year for which
the income is reported.
EFFECTIVE DATE.This section is effective for property tax refunds based on
property taxes payable after December 31, 2009, and rent paid after December 31, 2008,
and thereafter.

    Sec. 12. Minnesota Statutes 2008, section 290A.03, subdivision 15, as amended by
Laws 2009, chapter 12, article 1, section 10, is amended to read:
    Subd. 15. Internal Revenue Code. "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 2008 March 31, 2009.
EFFECTIVE DATE.This section is effective for property tax refunds based on
property taxes payable after December 31, 2009, and rent paid after December 31, 2008,
and thereafter.

    Sec. 13. Minnesota Statutes 2008, section 291.005, subdivision 1, as amended by Laws
2009, chapter 12, article 1, section 11, is amended to read:
    Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
terms used in this chapter shall have the following meanings:
    (1) "Federal gross estate" means the gross estate of a decedent as valued and
otherwise determined for federal estate tax purposes by federal taxing authorities pursuant
to the provisions of the Internal Revenue Code.
    (2) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included therein which has its situs outside Minnesota,
and (b) including therein any property omitted from the federal gross estate which is
includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
authorities.
    (3) "Personal representative" means the executor, administrator or other person
appointed by the court to administer and dispose of the property of the decedent. If there
is no executor, administrator or other person appointed, qualified, and acting within this
state, then any person in actual or constructive possession of any property having a situs in
this state which is included in the federal gross estate of the decedent shall be deemed
to be a personal representative to the extent of the property and the Minnesota estate tax
due with respect to the property.
    (4) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota.
    (5) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.
    (6) "Situs of property" means, with respect to real property, the state or country in
which it is located; with respect to tangible personal property, the state or country in which
it was normally kept or located at the time of the decedent's death; and with respect to
intangible personal property, the state or country in which the decedent was domiciled
at death.
    (7) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.
    (8) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through December 31, 2008 March 31, 2009.
    (9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of
deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.
EFFECTIVE DATE.This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective at the same time as the
changes were effective for federal purposes.

ARTICLE 2
PROPERTY TAXES

    Section 1. Minnesota Statutes 2008, section 124D.4531, is amended by adding a
subdivision to read:
    Subd. 5. Allocation from districts participating in agreements for secondary
education or interdistrict cooperation. For purposes of this section, a district with a
career and technical program approved under this section that participates in an agreement
under section 123A.30 or 123A.32 must allocate its levy authority under this section
among participating districts.
EFFECTIVE DATE.This section is effective retroactively for taxes payable in
2008.

    Sec. 2. Minnesota Statutes 2008, section 126C.41, subdivision 2, is amended to read:
    Subd. 2. Retired employee health benefits. A district may levy an amount up to the
amount the district is required by the collective bargaining agreement in effect on March
30, 1992, to pay for health insurance or unreimbursed medical expenses for licensed
and nonlicensed employees who have terminated services in the employing district and
withdrawn from active teaching service or other active service, as applicable, either (1)
before July 1, 1992, or (2) before July 1, 1998, but for employees retiring after June 30,
1992, and before July 1, 1998, only if a sunset clause is in effect for the current collective
bargaining agreement. The total amount of the levy each year may not exceed $600,000.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 3. Minnesota Statutes 2008, section 144F.01, subdivision 3, is amended to read:
    Subd. 3. Board. The special taxing district under this section is governed by a
board made up initially of representatives of each participating political subdivision in
the proportions set out in the establishing resolution, subject to change as provided in the
district's charter, if any, or in the district's bylaws. If a township states in its resolution that
less than the entire township will participate in the district, the partial townships shall be
represented on the board by only one member, appointed from among those townships
so participating. The method for appointment shall be governed by the bylaws of the
district's joint powers agreement. Each participant's representative serves at the pleasure
of that participant's governing body or bodies.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2008, section 272.02, subdivision 7, is amended to read:
    Subd. 7. Institutions of public charity. (a) Institutions of purely public charity that
are exempt from federal income taxation under section 501(c)(3) of the Internal Revenue
Code are exempt. if they meet the requirements of this subdivision. In determining
whether real property is exempt under this subdivision, the following factors must be
considered:
(1) whether the stated purpose of the undertaking is to be helpful to others without
immediate expectation of material reward;
(2) whether the institution of public charity is supported by material donations, gifts,
or government grants for services to the public in whole or in part;
(3) whether a material number of the recipients of the charity receive benefits or
services at reduced or no cost, or whether the organization provides services to the public
that alleviate burdens or responsibilities that would otherwise be borne by the government;
(4) whether the income received, including material gifts and donations, produces a
profit to the charitable institution that is not distributed to private interests;
(5) whether the beneficiaries of the charity are restricted or unrestricted, and, if
restricted, whether the class of persons to whom the charity is made available is one
having a reasonable relationship to the charitable objectives; and
(6) whether dividends, in form or substance, or assets upon dissolution, are not
available to private interests.
A charitable organization must satisfy the factors in clauses (1) to (6) for its property
to be exempt under this subdivision, unless there is a reasonable justification for failing to
meet the factors in clause (2), (3), or (5), and the organization provides to the assessor the
factual basis for that justification. If there is reasonable justification for failing to meet
the factors in clause (2), (3), or (5), an organization is a purely public charity under this
subdivision without meeting those factors. After an exemption is properly granted under
this subdivision, it will remain in effect unless there is a material change in facts.
(b) For purposes of this subdivision, a grant is a written instrument or electronic
document defining a legal relationship between a granting agency and a grantee when
the principal purpose of the relationship is to transfer cash or something of value to the
grantee to support a public purpose authorized by law in a general manner instead of
acquiring by professional or technical contract, purchase, lease, or barter property or
services for the direct benefit or use of the granting agency.
(c) In determining whether rental housing property qualifies for exemption under
this subdivision, the following are not gifts or donations to the owner of the rental housing:
(1) rent assistance provided by the government to or on behalf of tenants; and
(2) financing assistance or tax credits provided by the government to the owner on
condition that specific units or a specific quantity of units be set aside for persons or
families with certain income characteristics.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 5. Minnesota Statutes 2008, section 272.02, subdivision 55, is amended to read:
    Subd. 55. Electric generation facility; personal property. Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property which is part of
an electric generating facility that meets the requirements of this subdivision is exempt. At
the time of construction, the facility must (i) be eligible to be designated as an innovative
energy project as defined in under section 216B.1694, except that, notwithstanding
anything to the contrary in section 216B.1694, a project may include gas-fired generating
facilities that are adaptable for subsequent incorporation into a facility that uses coal as
a primary fuel, provided that this exception applies only to the eligibility for exemption
under this section, (ii) be within a tax relief area as defined in section 273.134, (iii) have
access to existing railroad infrastructure within less than three miles, (iv) have received by
resolution approval from the governing body of the county and township or city in which
the proposed facility is to be located for the exemption of personal property under this
subdivision, and (v) be designed to host at least 500 megawatts of electrical generation.
    Construction of the first 500 100 megawatts of the facility must be commenced after
January 1, 2006, and before January 1, 2012. Construction of up to an additional 750
megawatts of generation must be commenced before January 1, 2015. Property eligible
for this exemption does not include electric transmission lines and interconnections or gas
pipelines and interconnections appurtenant to the property or the facility. To qualify for an
exemption under this subdivision, the owner of the electric generation facility must have
an agreement with the host county, township or city, and school district, for payment in
lieu of personal property taxes to the host county, township or city, and school district.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2008, section 272.02, subdivision 86, is amended to read:
    Subd. 86. Apprenticeship training facilities. All or a portion of a building used
exclusively for a state-approved apprenticeship program through the Department of
Labor and Industry is exempt if (1) it is owned and operated by a nonprofit corporation
organization or a nonprofit trust, and operated by a nonprofit organization or a nonprofit
trust, (2) the program participants receive no compensation, and (3) it is located in the
Minneapolis and St. Paul standard metropolitan statistical area as determined by the 2000
federal census or in a city outside the Minneapolis and St. Paul standard metropolitan
statistical area that has a population of 7,500 or greater according to the most recent
federal census. Use of the property for advanced skills training of incumbent workers does
not disqualify the property for the exemption under this subdivision. This exemption
does not include includes up to five acres of the land on which the building is located and
associated parking areas on that land. If a parking area associated with the facility is
used for the purposes of the facility and for other purposes, a portion of the parking area
shall be exempt in proportion to the square footage of the facility used for purposes of
apprenticeship training.
EFFECTIVE DATE.This section is effective for assessment year 2009, for taxes
payable in 2010, and thereafter.

    Sec. 7. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:
    Subd. 90. Nursing homes. A nursing home licensed under section 144A.02 or a
boarding care home certified as a nursing facility under title 19 of the Social Security
Act that is exempt from federal income taxation pursuant to section 501(c)(3) of the
Internal Revenue Code is exempt from property taxation if the nursing home or boarding
care home either:
(1) is certified to participate in the medical assistance program under title 19 of
the Social Security Act; or
(2) certifies to the commissioner of revenue that it does not discharge residents
due to the inability to pay.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 8. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:
    Subd. 91. Railroad wye connections. Any real or personal property of a railroad
wye connection, including the track, ties, ballast, switch gear, and related improvements,
is exempt if it meets all of the following: (1) is publicly owned; (2) is funded, in whole or
in part, by state grants; (3) is located within the metropolitan area as defined in section
473.121, subdivision 2; (4) includes a single track segment that is no longer than 2,500 feet
in length; (5) connects intersecting rail lines; and (6) is constructed after January 1, 2009.
EFFECTIVE DATE.This section is effective for assessment year 2009 and
thereafter, for taxes payable in 2010 and thereafter.

    Sec. 9. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:
    Subd. 92. Electric generation facility; personal property. (a) Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property that is part of
an electric generation facility that exceeds 150 megawatts of installed capacity, does
not exceed 780 megawatts of summer capacity, and that meets the requirements of this
subdivision, is exempt. At the start of construction, the facility must:
(1) be designed to utilize natural gas as a primary fuel;
(2) be owned by an entity other than a public utility as defined in section 216B.02,
subdivision 4;
(3) be located within five miles of two or more interstate natural gas pipelines;
(4) be located within one mile of an existing electrical transmission substation with
operating alternating current voltages of 115 kV, 345 kV, and 500 kV;
(5) be designed to provide electrical capacity, energy, and ancillary services;
(6) have satisfied all of the requirements under section 216B.243;
(7) have executed an interconnection agreement with the Midwest Independent
System Operator that does not require the acquisition of more than one mile of new
electric transmission right-of-way within the county where the facility is located, and does
not provide for any other new routes or corridors for future electric transmission lines in
the county where the facility is located;
(8) be located in a county with an essential services and transmission services
ordinance;
(9) have signed a development agreement with the county board in the county in
which the facility is located. The development agreement must be adopted by a two-thirds
vote of the county board, and must contain provisions ensuring:
(i) the facility is designed to use effluent from a wastewater treatment facility as
its preferred water source if it includes any combined-cycle units, and will not seek an
exemption from legislative approval under section 103G.265, subdivision 3, paragraph
(b); and
(ii) all processed wastewater discharge will be colocated with the outfall of a
wastewater treatment facility;
(10) have signed a development agreement with the township board in the township
in which the facility is located containing provisions ensuring that noise and visual
impacts of the facility are mitigated. The development agreement must be adopted by a
two-thirds vote of the township board; and
(11) have an agreement with the host county, township, and school district for
payment in lieu of personal property taxes to the host county, township, and school
district for a total amount not to exceed $600,000 per year for the operating life of the
facility. Any amount distributed to the school district is not subject to the deductions
under section 126C.21.
(b) Construction of the facility must begin after March 1, 2010, and before March 1,
2014. Property eligible for this exemption does not include electric transmission lines and
interconnections or gas pipelines and interconnections appurtenant to the facility.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:
    Subd. 93. Electric generation facility; personal property. Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property that is part of
a simple-cycle electric generation facility of more than 40 megawatts and less than 125
megawatts of installed capacity and that meets the requirements of this subdivision is
exempt. At the time of construction, the facility must:
(1) utilize natural gas as a primary fuel;
(2) be located within two miles of parallel existing 36-inch natural gas pipelines and
an existing 115-kilovolt high-voltage electric transmission line;
(3) be designed to provide peaking, emergency backup, or contingency services;
(4) satisfy a resource deficiency identified in an approved integrated resource plan
filed under section 216B.2422; and
(5) have an agreement with the host county, township, and school district for
payment in lieu of personal property taxes to the host county, township, and school district
for the operating life of the facility. Any amount distributed to the school district is not
subject to the deductions under section 126C.21.
Construction of the facility must be commenced after January 1, 2010, and
before January 1, 2014. Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.
EFFECTIVE DATE.This section is effective for assessments in 2011, taxes
payable in 2012, and thereafter.

    Sec. 11. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:
    Subd. 94. Elderly living facility. (a) The first $5,000,000 in market value of an
elderly living facility is exempt from taxation if it meets all of the following requirements:
(1) the facility consists of no more than 75 living units;
(2) the facility is located in a city of the first class with a population of more than
350,000;
(3) the facility is owned and operated by a nonprofit corporation organized under
chapter 317A;
(4) the owner of the facility is an affiliate of entities that own and operate assisted
living and skilled nursing facilities that:
(i) are located across a street from the facility;
(ii) are adjacent to a church that is exempt from taxation under subdivision 6;
(iii) include a congregate dining program; and
(iv) provide assisted living or similar social and physical support;
(5) the residents of the facility must be:
(i) at least 62 years of age; or
(ii) handicapped;
(6) at least 30 percent of the units in the facility are occupied by persons whose
annual income does not exceed 50 percent of median family income for the area; and
(7) before the effective date of this subdivision, the facility has received approval of
street vacation and land use applications from the city in which it is to be located.
(b) In this subdivision, "affiliate" means any entity directly or indirectly controlling
or controlled by or under direct or indirect common control with an entity, and "control"
means the power to direct management and policies through membership or ownership
of voting securities.
(c) The exemption provided in this subdivision applies to taxes levied in each
year or partial year of the term of the facility's initial permanent financing or 25 years,
whichever is later.
EFFECTIVE DATE.This section is effective beginning with taxes payable in 2010.

    Sec. 12. Minnesota Statutes 2008, section 272.029, subdivision 6, is amended to read:
    Subd. 6. Distribution of revenues. Revenues from the taxes imposed under
subdivision 5 must be part of the settlement between the county treasurer and the county
auditor under section 276.09. The revenue must be distributed by the county auditor or the
county treasurer to local taxing jurisdictions in which the wind energy conversion system
is located as follows: beginning with distributions in 2006 2010, 80 percent to counties;
and 20 percent to cities and townships; and for distributions occurring in 2006 to 2009, 80
percent to counties; 14 percent to cities and townships; and six percent to school districts;
and for distributions occurring in 2004 and 2005 in the same proportion that each of the
local taxing jurisdiction's current year's net tax capacity based tax rate is to the current
year's total local net tax capacity based rate.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2008, section 273.11, subdivision 23, is amended to read:
    Subd. 23. First tier valuation limit; agricultural homestead property. (a)
Beginning with assessment year 2006, The commissioner of revenue shall annually certify
the first tier limit for agricultural homestead property as. For assessment year 2010, the
limit is $1,140,000. Beginning with assessment year 2011, the limit is the product of (i)
$600,000 the first tier limit for the preceding assessment year, and (ii) the ratio of the
statewide average taxable market value of agricultural property per acre of deeded farm
land in the preceding assessment year to the statewide average taxable market value of
agricultural property per acre of deeded farm land for the second preceding assessment
year 2004. The limit shall be rounded to the nearest $10,000.
(b) For the purposes of this subdivision, "agricultural property" means all class
2 2a property under section 273.13, subdivision 23, except for (1) timberland, (2) a
landing area or public access area of a privately owned public use airport, and (3) property
consisting of the house, garage, and immediately surrounding one acre of land of an
agricultural homestead.
(c) The commissioner shall certify the limit by January 2 of each assessment year,
except that for assessment year 2006 the commissioner shall certify the limit by June
1, 2006.
EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
thereafter.

    Sec. 14. Minnesota Statutes 2008, 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 develop a
fair and uniform method of determining agricultural values for each county in the state
that are consistent with this subdivision. The commissioner shall annually assign the
resulting values 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.
    (b) In the case of property qualifying for tax deferment only under subdivision 3a,
the value shall be based on the value in effect for assessment year 2008, multiplied by
the ratio of the total taxable market value of all property in the county for the current
assessment year divided by the total taxable market value of all property in the county for
assessment year 2008 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 2009 and
thereafter.

    Sec. 15. Minnesota Statutes 2008, section 273.111, is amended by adding a subdivision
to read:
    Subd. 9a. Cross-compliance with agricultural chemical and water laws. (a) A
parcel of property enrolled under this section whose owner is subject to two or more final
enforcement actions for violations of chapter 18B, 18C, 18D, 103E, 103F, 103G, or 103H,
or any rule adopted under these chapters including but not limited to the agricultural
shoreland use standards in Minnesota Rules, chapter 6120, occurring on the parcel, shall
be subject to a property tax penalty as defined in this subdivision.
(b) For the purposes of this subdivision, "final enforcement action" means any
administrative, civil, or criminal penalty other than a verbal or written warning. An
enforcement action is not final until any time period for corrective action has expired,
and until the completion or expiration of any applicable review or appeal procedure or
period provided by law.
(c) The first time a final enforcement action is taken based on a violation occurring
on a parcel enrolled under this section, the owner must be notified that if a second final
enforcement action is issued, the property is subject to a property tax penalty, as defined
in this subdivision.
(d) When a second final enforcement action is taken based on a violation occurring
on a parcel enrolled under this section within three years from the first violation, the law
enforcement officer or other person enforcing the law or rule must notify the county
auditor. The auditor must then determine the property tax penalty, equal to the deferred
taxes on the parcel for the current year and the two previous years, but not to exceed the
current owner's time of ownership, and extend the penalty against the property on the tax
list for the current year, provided that no interest or penalties shall be levied on the penalty
if timely paid. The penalty levied under this subdivision is in addition to any additional
taxes levied under subdivision 9 at the time a property is withdrawn from the program.
EFFECTIVE DATE.This section is effective for final enforcement actions issued
after January 1, 2010, and before December 31, 2013.

    Sec. 16. Minnesota Statutes 2008, section 273.113, subdivision 1, is amended to read:
    Subdivision 1. Definition. For the purposes of this section, the following terms
have the meanings given to them:
    (1) "proposed bovine tuberculosis modified accredited zone" means the modified
accredited zone proposed designated by the Board of Animal Health under section 35.244;
and
    (2) "located within" means that the herd is kept in the area for at least a part of
calendar year 2006, 2007, or 2008; and
(3) "animal" means cattle, bison, goats, and farmed cervidae.
EFFECTIVE DATE.This section is effective for property taxes payable in 2010
and thereafter.

    Sec. 17. Minnesota Statutes 2008, section 273.113, subdivision 2, is amended to read:
    Subd. 2. Eligibility; amount of credit. Agricultural and rural vacant land classified
under section 273.13, subdivision 23, located within a proposed bovine tuberculosis
modified accredited zone is eligible for a property tax credit equal to the property tax
greater of: (1) $5 per acre on the parcel first 160 acres of the property where the herd had
been located, excluding any tax attributable to residential structures.; or (2) an amount
equal to $5 per acre times five acres times the highest number of animals tested on the
property for bovine tuberculosis in a whole-herd test as reported by the Board of Animal
Health in 2006, 2007, or 2008. The amount of the credit cannot exceed the property tax
payable on the property where the herd had been located, excluding any tax attributable
to residential structures. To begin to qualify for the tax credit, the owner shall file an
application with the county by December 1 of the levy year. The credit must be given
for each subsequent taxes payable year until the credit terminates under subdivision 4.
The assessor shall indicate the amount of the property tax reduction on the property tax
statement of each taxpayer receiving a credit under this section. The credit paid pursuant
to this section shall be deducted from the tax due on the property as provided in section
273.1393.
EFFECTIVE DATE.This section is effective for property taxes payable in 2010
and thereafter.

    Sec. 18. Minnesota Statutes 2008, 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), or subdivision 23, paragraph
(b), clause (1), 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 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 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 is also class 4c
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 also includes commercial use real property
used exclusively for recreational purposes in conjunction with class 4c property 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 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 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 that is not used for residential
purposes on either a temporary or permanent basis, qualifies for class 4c provided that
it meets either of the following:
    (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), (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 qualifying under item (i) which is used for revenue-producing
activities for more than six days in the calendar year preceding the year of assessment
shall be assessed as 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) manufactured home parks as defined in section 327.14, subdivision 3;
    (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; and
    (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. 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) have the same class rate as class 4b property, (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 assessment year 2009, taxes
payable in 2010, and thereafter.

    Sec. 19. Minnesota Statutes 2008, section 275.07, is amended by adding a subdivision
to read:
    Subd. 6. Recertification due to unallotment. If a local government's December
aid or credit payments under sections 477A.011 to 477A.014 and section 273.1384 are
reduced due to unallotment under section 16A.152, the local government may recertify
its levy under subdivision 1, by January 15 of the year in which the levy will be paid.
The local government must report the recertified amount to the county auditor within
two business days of January 15 or the levy will remain at the amount certified under
subdivision 1. Notwithstanding subdivision 4, the county auditor shall report to the
commissioner of revenue any recertified levies under this subdivision by January 30
of the year in which the levy will be paid.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 20. Minnesota Statutes 2008, section 275.70, subdivision 5, 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;
    (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; and
    (22) an amount equal to any reductions in the certified aids or credits payable
under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment under
section 16A.152. The amount of the levy allowed under this clause is equal to the amount
unallotted in the calendar year in which the tax is levied unless the unallotment amount is
not known by September 1 of the levy 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
unallotment 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 credits under section 273.1384 for
credits payable in the year in which the levy is payable.
EFFECTIVE DATE.This section is effective for levies certified in calendar year
2009 and thereafter, payable in 2010 and thereafter.

    Sec. 21. [275.77] TEMPORARY SUSPENSION OF NEW OR INCREASED
MAINTENANCE OF EFFORT AND MATCHING FUND REQUIREMENTS.
    Subdivision 1. Definitions. For purposes of this section, the following terms have
the meanings given them:
(1) "maintenance of effort" means a requirement imposed on a political subdivision
by state law to continue providing funding of a service or program at a given or increasing
level based on its funding of the service and program in prior years;
(2) "matching fund requirement" means a requirement imposed on a political
subdivision by state law to fund a portion of a program or service but does not mean
required nonstate contributions to state capital funded projects or other nonstate
contributions required in order to receive a grant or loan the political subdivision has
requested or applied for; and
(3) "political subdivision" means a county, town, or statutory or home rule charter
city.
    Subd. 2. Temporary suspension. (a) Notwithstanding any other provision of law
to the contrary, any new maintenance of effort or matching fund requirement enacted
after January 1, 2009, that will require spending by a political subdivision shall not be
effective until July 1, 2011.
(b) Notwithstanding any other provision of law to the contrary, any changes to
existing maintenance of effort or matching fund requirement enacted after January 1,
2009, that will require new spending by a political subdivision shall not be effective
until July 1, 2011.
(c) The suspension of changes to existing maintenance of effort and matching fund
requirements under paragraph (b) does not apply if the spending is required by federal law
and there would be a cost to the state budget without the change.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 22. Minnesota Statutes 2008, section 276.04, subdivision 2, is amended to read:
    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the
printing of the tax statements. The commissioner of revenue shall prescribe the form of
the property tax statement and its contents. The tax statement must not state or imply
that property tax credits are paid by the state of Minnesota. The statement must contain
a tabulated statement of the dollar amount due to each taxing authority and the amount
of the state tax from the parcel of real property for which a particular tax statement is
prepared. The dollar amounts attributable to the county, the state tax, the voter approved
school tax, the other local school tax, the township or municipality, and the total of
the metropolitan special taxing districts as defined in section 275.065, subdivision 3,
paragraph (i), must be separately stated. The amounts due all other special taxing districts,
if any, may be aggregated except that any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be listed on a separate line directly under the appropriate county's levy. If the
county levy under this paragraph includes an amount for a lake improvement district as
defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount. In the case of Ramsey
County, if the county levy under this paragraph includes an amount for public library
service under section 134.07, the amount attributable for that purpose may be separated
from the remaining county levy amount. The amount of the tax on homesteads qualifying
under the senior citizens' property tax deferral program under chapter 290B is the total
amount of property tax before subtraction of the deferred property tax amount. The
amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any,
must also be separately stated. The dollar amounts, including the dollar amount of any
special assessments, may be rounded to the nearest even whole dollar. For purposes of this
section whole odd-numbered dollars may be adjusted to the next higher even-numbered
dollar. The amount of market value excluded under section 273.11, subdivision 16, if any,
must also be listed on the tax statement.
    (b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.
    (c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:
    (1) the property's estimated market value under section 273.11, subdivision 1;
    (2) the property's taxable market value after reductions under section 273.11,
subdivisions 1a and 16
;
    (3) the property's gross tax, before credits;
    (4) for homestead residential and agricultural properties, the credits under section
273.1384;
    (5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
credit received under section 273.135 must be separately stated and identified as "taconite
tax relief"; and
    (6) the net tax payable in the manner required in paragraph (a).
    (d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 23. Minnesota Statutes 2008, 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
$50 $250, 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 $50 $250, 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 2010 and
thereafter.

    Sec. 24. Minnesota Statutes 2008, section 279.10, is amended to read:
279.10 PUBLICATION CORRECTED.
Immediately after preparing forms for printing such notice and list, and at least five
days before the first day for the publication thereof, every such publisher shall furnish
proof of the proposed publication to the county auditor for correction. When such the copy
has been corrected, the auditor shall return the same it to the printer, who shall publish it
as corrected. On the first day on which such the notice and list are published, the publisher
shall mail a copy of the newspaper containing the same the notice and list to the auditor. If
during the publication of the notice and list, or within ten days after the last publication
thereof, the auditor shall discover discovers that such the publication is invalid contains an
error, the auditor shall forthwith direct the publisher to republish the same as corrected
publish the correct information for an additional period of two weeks. The auditor does
not have to direct the publisher to republish the entire list. The publisher, if not neglectful,
shall be is entitled to the same compensation as allowed by law for the original publication
of the corrected information, but shall receive no further compensation therefor if such the
republication is necessary by reason of the neglect of the publisher.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 25. Minnesota Statutes 2008, section 282.08, is amended to read:
282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.
    The net proceeds from the sale or rental of any parcel of forfeited land, or from the
sale of products from the forfeited land, must be apportioned by the county auditor to the
taxing districts interested in the land, as follows:
    (1) the portion required to pay any amounts included in the appraised value
under section 282.01, subdivision 3, as representing increased value due to any public
improvement made after forfeiture of the parcel to the state, but not exceeding the
amount certified by the appropriate governmental authority must be apportioned to the
governmental subdivision entitled to it;
    (2) the portion required to pay any amount included in the appraised value under
section 282.019, subdivision 5, representing increased value due to response actions
taken after forfeiture of the parcel to the state, but not exceeding the amount of expenses
certified by the Pollution Control Agency or the commissioner of agriculture, must be
apportioned to the agency or the commissioner of agriculture and deposited in the fund
from which the expenses were paid;
    (3) the portion of the remainder required to discharge any special assessment
chargeable against the parcel for drainage or other purpose whether due or deferred at the
time of forfeiture, must be apportioned to the governmental subdivision entitled to it; and
    (4) any balance must be apportioned as follows:
    (i)(A) Except as provided in subitem (B), the county board may annually by
resolution set aside no more than 30 percent of the receipts remaining to be used for forest
development on tax-forfeited land and dedicated memorial forests, to be expended under
the supervision of the county board. It must be expended only on projects improving the
health and management of the forest resource.
(B) For a county that received an aid payment in calendar year 2009 under section
477A.0124, subdivision 5, paragraph (b), the county board is authorized to use some of the
money set aside under subitem (A) to replace all or a portion of the amount of aid or credit
reimbursement that the county was to receive under sections 273.1384 and 477A.0124,
but did not receive due to aid cuts or unallotment from the state. Within six months of
the actual aid or credit reimbursement loss, the county board may adopt a resolution
transferring money from this fund to the county's general fund, not to exceed the amount of
aid or credit reimbursement loss to the county. This subitem expires December 31, 2010.
    (ii) The county board may annually by resolution set aside no more than 20 percent
of the receipts remaining to be used for the acquisition and maintenance of county parks
or recreational areas as defined in sections 398.31 to 398.36, to be expended under the
supervision of the county board.
    (iii) Any balance remaining must be apportioned as follows: county, 40 percent;
town or city, 20 percent; and school district, 40 percent, provided, however, that in
unorganized territory that portion which would have accrued to the township must be
administered by the county board of commissioners.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 26. Minnesota Statutes 2008, section 290B.03, subdivision 1, is amended to read:
    Subdivision 1. Program qualifications. The qualifications for the senior citizens'
property tax deferral program are as follows:
(1) the property must be owned and occupied as a homestead by a person 65 years
of age or older. In the case of a married couple, both at least one of the spouses must
be at least 65 years old at the time the first property tax deferral is granted, regardless
of whether the property is titled in the name of one spouse or both spouses, or titled in
another way that permits the property to have homestead status, and the other spouse
must be at least 62 years of age;
(2) the total household income of the qualifying homeowners, as defined in section
290A.03, subdivision 5, for the calendar year preceding the year of the initial application
may not exceed $60,000;
(3) the homestead must have been owned and occupied as the homestead of at
least one of the qualifying homeowners for at least 15 years prior to the year the initial
application is filed;
(4) there are no state or federal tax liens or judgment liens on the homesteaded
property;
(5) there are no mortgages or other liens on the property that secure future advances,
except for those subject to credit limits that result in compliance with clause (6); and
(6) the total unpaid balances of debts secured by mortgages and other liens on the
property, including unpaid and delinquent special assessments and interest and any
delinquent property taxes, penalties, and interest, but not including property taxes payable
during the year, does not exceed 75 percent of the assessor's estimated market value for
the year.
EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

    Sec. 27. Minnesota Statutes 2008, section 428A.101, is amended to read:
428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
GENERAL LAW.
The establishment of a new special service district after June 30, 2009 2013, requires
enactment of a special law authorizing the establishment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 28. Minnesota Statutes 2008, section 428A.13, is amended by adding a
subdivision to read:
    Subd. 1a. Prerequisites for establishing. Prior to establishment of a housing
improvement area, the governing body of the city must:
(1) provide full disclosure of public expenditures, as well as the terms of any loans,
bonds, or other financing arrangements for housing improvement area projects; and
(2) determine whether the association or the implementing entity will contract for
the housing improvements, and ensure that any contracts made by the implementing
entity are subject to section 471.345.

    Sec. 29. Minnesota Statutes 2008, section 428A.14, subdivision 1, is amended to read:
    Subdivision 1. Authority. Fees may be imposed by the implementing entity on the
housing units within the housing improvement area at a rate, term, or amount sufficient
to produce revenue required to provide housing improvements in the area to reimburse
the implementing entity for advances made to pay for the housing improvements or to
pay principal of, interest on, and premiums, if any, on bonds issued by the implementing
entity under section 428A.16. The fee can be imposed on the basis of the tax capacity of
the housing unit, or the total amount of square footage of the housing unit, or a method
determined by the council and specified in the resolution. If a fee is imposed on a basis
other than the tax capacity or square footage of the housing unit, the council must make
a finding that the alternative basis for the fee is more fair and reasonable. Before the
imposition of the fees, a hearing must be held and notice must be published in the official
newspaper at least seven days before the hearing and shall be mailed at least seven days
before the hearing to any housing unit owner subject to a fee. For purposes of this section,
the notice must also include:
(1) a statement that all interested persons will be given an opportunity to be heard at
the hearing regarding a proposed housing improvement fee;
(2) the estimated cost of improvements including administrative costs to be paid for
in whole or in part by the fee imposed under the ordinance;
(3) the amount to be charged against the particular property;
(4) the right of the property owner to prepay the entire fee;
(5) the number of years the fee will be in effect; and
(6) a statement that the petition requirements of section 428A.12 have either been
met or do not apply to the proposed fee.
Within six months of the public hearing, the implementing entity may adopt a
resolution imposing a fee within the area not exceeding the amount expressed in the
notice issued under this section.
Prior to adoption of the resolution approving the fee, the condominium associations
located in the housing improvement area shall submit to the implementing entity a
financial plan prepared by an independent third party, acceptable to the implementing
entity and associations, that provides for the associations to finance maintenance and
operation of the common elements in the condominium and a long-range plan to conduct
and finance capital improvements.

    Sec. 30. Minnesota Statutes 2008, section 428A.21, is amended to read:
428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER
GENERAL LAW.
The establishment of a new housing improvement area after June 30, 2009 2013,
requires enactment of a special law authorizing the establishment of the area.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 31. Minnesota Statutes 2008, 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 or;
(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
; and
(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.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 32. Minnesota Statutes 2008, section 469.040, subdivision 2, is amended to read:
    Subd. 2. Leased property, exception. Notwithstanding the provisions of
subdivision 1, any property other than property to be operated as a parking facility that
the authority leases to private individuals or corporations for development in connection
with a redevelopment project shall have the same tax status as if the leased property were
owned by the private individuals or corporations. This subdivision does not apply to
leases by the authority to individuals or families for residential use.
EFFECTIVE DATE.This section applies to housing projects and housing
development projects constructed or acquired by an authority after July 1, 1987, for
property taxes payable in 2010 and thereafter.

    Sec. 33. Minnesota Statutes 2008, section 469.040, subdivision 4, is amended to read:
    Subd. 4. Facilities funded from multiple sources. In the metropolitan area, as
defined in section 473.121, subdivision 2, the tax treatment provided in subdivision 3
applies to that portion of any multifamily rental housing facility represented by the ratio of
(1) the number of units in the facility that are subject to the requirements of constructed
with funds provided under Section 5 of the United States Housing Act of 1937, and are
receiving operating subsidy under Section 9 or rental assistance under Section 8 of the
United States Housing Act of 1937 as the result of the implementation of a federal court
order or consent decree to (2) the total number of units within the facility.
    The housing and redevelopment authority for the city in which the facility is located,
any public entity exercising the powers of such housing and redevelopment authority, or
the county housing and redevelopment authority for the county in which the facility is
located, shall annually certify to the assessor responsible for assessing the facility, at the
time and in the manner required by the assessor, the number of units in the facility that
are subject to the requirements of constructed with funds provided under Section 5 of the
United States Housing Act of 1937, and are receiving operating subsidy under Section 9
or rental assistance under Section 8 of the United States Housing Act of 1937.
    Nothing in this subdivision shall prevent that portion of the facility not subject to
this subdivision from meeting the requirements of section 273.128, and for that purpose
the total number of units in the facility must be taken into account.

    Sec. 34. Minnesota Statutes 2008, section 469.053, is amended by adding a subdivision
to read:
    Subd. 4a. Seaway port authority levy. A levy made under this subdivision shall
replace the mandatory city levy under subdivision 4. A seaway port authority is a special
taxing district under section 275.066 and may levy a tax in any year for the benefit of the
seaway port authority. The tax must not exceed 0.01813 percent of taxable market value.
The county auditor shall distribute the proceeds of the property tax levy to the seaway
port authority.
EFFECTIVE DATE.This section is effective for property taxes levied in 2009 and
thereafter, payable in 2010 and thereafter.

    Sec. 35. [469.1816] ABATEMENTS FOR BUSINESSES WITH DISRUPTED
ACCESS.
The governing body of a home rule charter or statutory city may abate the property
taxes it has imposed, in whole or in part, on the property of a business with an estimated
market value of $250,000 or less, if access to the property has been impeded for a period
of more than three consecutive months, resulting in loss of revenue to the business, due to
a public transportation project in the vicinity of the business. If an abatement is granted,
the property taxes shall be levied on the property and shall be due and payable to the
county at the times provided under section 279.01. The city granting the abatement will
pay the property owner or lessee the amount of abatement as determined by the city.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 through
2014.

    Sec. 36. Minnesota Statutes 2008, section 475.58, subdivision 1, is amended to read:
    Subdivision 1. Approval by electors; exceptions. Obligations authorized by law or
charter may be issued by any municipality upon obtaining the approval of a majority of
the electors voting on the question of issuing the obligations, but an election shall not be
required to authorize obligations issued:
    (1) to pay any unpaid judgment against the municipality;
    (2) for refunding obligations;
    (3) for an improvement or improvement program, which obligation is payable wholly
or partly from the proceeds of special assessments levied upon property specially benefited
by the improvement or by an improvement within the improvement program, or from tax
increments, as defined in section 469.174, subdivision 25, including obligations which are
the general obligations of the municipality, if the municipality is entitled to reimbursement
in whole or in part from the proceeds of such special assessments or tax increments and
not less than 20 percent of the cost of the improvement or the improvement program is to
be assessed against benefited property or is to be paid from the proceeds of federal grant
funds or a combination thereof, or is estimated to be received from tax increments;
    (4) payable wholly from the income of revenue producing conveniences;
    (5) under the provisions of a home rule charter which permits the issuance of
obligations of the municipality without election;
    (6) under the provisions of a law which permits the issuance of obligations of a
municipality without an election;
    (7) to fund pension or retirement fund or postemployment benefit liabilities of a
municipality or postemployment benefit liabilities of a school district pursuant to section
475.52, subdivision 6;
    (8) under a capital improvement plan under section 373.40; and
    (9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if
the proceeds of the bonds are not used for a purpose prohibited under section 469.176,
subdivision 4g
, paragraph (b);
(10) to fund postemployment benefit liabilities pursuant to section 475.52,
subdivision 6, of a municipality, other than a school district, if the liabilities are limited to:
(i) satisfying the requirements of section 471.61, subdivision 2b; and
(ii) other postemployment benefits, which the municipality no longer provides to
employees hired after a date before the obligations are issued; and
(11) under section 475.755.
EFFECTIVE DATE.This section is effective the day following final enactment,
except that the changes made to clause (7) are effective for obligations sold after August
1, 2009.

    Sec. 37. [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 not use a
special levy for the aid reduction under section 275.70, subdivision 5, clause (22), or a
similar or successor provision. This provision does not affect the status of the levy under
section 475.61 to pay the certificates as 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 the day following final enactment.

    Sec. 38. Minnesota Statutes 2008, section 477A.011, subdivision 36, is amended to
read:
    Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision,
"city aid base" is zero.
    (b) The city aid base for any city with a population less than 500 is increased by
$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $40,000 for aids payable in calendar year 1995 only, provided that:
    (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
    (ii) the city portion of the tax capacity rate exceeds 100 percent; and
    (iii) its city aid base is less than $60 per capita.
    (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
    (i) the city has a population in 1994 of 2,500 or more;
    (ii) the city is located in a county, outside of the metropolitan area, which contains a
city of the first class;
    (iii) the city's net tax capacity used in calculating its 1996 aid under section
477A.013 is less than $400 per capita; and
    (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
property located in the city is classified as railroad property.
    (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
    (i) the city was incorporated as a statutory city after December 1, 1993;
    (ii) its city aid base does not exceed $5,600; and
    (iii) the city had a population in 1996 of 5,000 or more.
    (e) The city aid base for a city is increased by $150,000 for aids payable in 2000 and
thereafter, and the maximum amount of total aid it may receive under section 477A.013,
subdivision 9
, paragraph (c), is also increased by $150,000 in calendar year 2000 only,
provided that:
    (1) the city has a population that is greater than 1,000 and less than 2,500;
    (2) its commercial and industrial percentage for aids payable in 1999 is greater
than 45 percent; and
    (3) the total market value of all commercial and industrial property in the city
for assessment year 1999 is at least 15 percent less than the total market value of all
commercial and industrial property in the city for assessment year 1998.
    (f) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
    (1) the city had a population in 1997 of 2,500 or more;
    (2) the net tax capacity of the city used in calculating its 1999 aid under section
477A.013 is less than $650 per capita;
    (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
section 477A.013 is greater than 12 percent;
    (4) the 1999 local government aid of the city under section 477A.013 is less than
20 percent of the amount that the formula aid of the city would have been if the need
increase percentage was 100 percent; and
    (5) the city aid base of the city used in calculating aid under section 477A.013
is less than $7 per capita.
    (g) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
    (1) the city has a population in 1997 of 2,000 or more;
    (2) the net tax capacity of the city used in calculating its 1999 aid under section
477A.013 is less than $455 per capita;
    (3) the net levy of the city used in calculating 1999 aid under section 477A.013 is
greater than $195 per capita; and
    (4) the 1999 local government aid of the city under section 477A.013 is less than
38 percent of the amount that the formula aid of the city would have been if the need
increase percentage was 100 percent.
    (h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
    (1) the city has a population in 1998 that is greater than 200 but less than 500;
    (2) the city's revenue need used in calculating aids payable in 2000 was greater
than $200 per capita;
    (3) the city net tax capacity for the city used in calculating aids available in 2000
was equal to or less than $200 per capita;
    (4) the city aid base of the city used in calculating aid under section 477A.013
is less than $65 per capita; and
    (5) the city's formula aid for aids payable in 2000 was greater than zero.
    (i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
    (1) the city had a population in 1998 that is greater than 200 but less than 500;
    (2) the city's commercial industrial percentage used in calculating aids payable in
2000 was less than ten percent;
    (3) more than 25 percent of the city's population was 60 years old or older according
to the 1990 census;
    (4) the city aid base of the city used in calculating aid under section 477A.013
is less than $15 per capita; and
    (5) the city's formula aid for aids payable in 2000 was greater than zero.
    (j) The city aid base for a city is increased by $45,000 in 2001 and thereafter and
by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
only, provided that:
    (1) the net tax capacity of the city used in calculating its 2000 aid under section
477A.013 is less than $810 per capita;
    (2) the population of the city declined more than two percent between 1988 and 1998;
    (3) the net levy of the city used in calculating 2000 aid under section 477A.013 is
greater than $240 per capita; and
    (4) the city received less than $36 per capita in aid under section 477A.013,
subdivision 9
, for aids payable in 2000.
    (k) The city aid base for a city with a population of 10,000 or more which is located
outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
the lesser of:
    (1)(i) the total population of the city, as determined by the United States Bureau of
the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
    (2) $2,500,000.
    (l) The city aid base is increased by $50,000 in 2002 and thereafter, and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
    (1) the city is located in the seven-county metropolitan area;
    (2) its population in 2000 is between 10,000 and 20,000; and
    (3) its commercial industrial percentage, as calculated for city aid payable in 2001,
was greater than 25 percent.
    (m) The city aid base for a city is increased by $150,000 in calendar years 2002 to
2011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum
amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
2009 only, provided that:
    (1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
    (2) its home county is located within the seven-county metropolitan area;
    (3) its pre-1940 housing percentage is less than 15 percent; and
    (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
per capita.
    (n) The city aid base for a city is increased by $200,000 beginning in calendar
year 2003 and the maximum amount of total aid it may receive under section 477A.013,
subdivision 9
, paragraph (c), is also increased by $200,000 in calendar year 2003 only,
provided that the city qualified for an increase in homestead and agricultural credit aid
under Laws 1995, chapter 264, article 8, section 18.
    (o) The city aid base for a city is increased by $200,000 in 2004 only and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
dry cask storage facility.
    (p) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster
designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by
more than 40 percent between 1990 and 2000.
    (q) The city aid base for a city is increased by $30,000 in 2009 and thereafter and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000
and has a state park for which the city provides rescue services and which comprised at
least 14 percent of the total geographic area included within the city boundaries in 2000.
    (r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and
the minimum and maximum amount of total aid it may receive under section 477A.013,
subdivision 9, is also increased by $80,000 in calendar year 2009 only, if:
    (1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
to be placed in trust status as tax-exempt Indian land;
    (2) the placement of the land is being challenged administratively or in court; and
    (3) due to the challenge, the land proposed to be placed in trust is still on the tax
rolls as of May 1, 2006.
    (s) The city aid base for a city is increased by $100,000 in 2007 and thereafter and
the minimum and maximum total amount of aid it may receive under this section is also
increased in calendar year 2007 only, provided that:
    (1) the city has a 2004 estimated population greater than 200 but less than 2,000;
    (2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;
    (3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
payable in 2006 was greater than 110 percent; and
    (4) it is located in a county where at least 15,000 acres of land are classified as
tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.
    (t) The city aid base for a city is increased by $30,000 in 2009 only, and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than
3,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities
and one township in 2002.
    (u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and
the maximum total aid it may receive under section 477A.013, subdivision 9, is also
increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for
aids payable in 2007 of less than $150 per capita and the city experienced flooding on
March 14, 2007, that resulted in evacuation of at least 40 homes.
    (v) The city aid base for a city is increased by $100,000 in 2009 to 2013, and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $100,000 in calendar year 2009 only, if the city:
    (1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical
area;
    (2) has a 2005 population greater than 7,000 but less than 8,000; and
    (3) has a 2005 net tax capacity per capita of less than $500.
    (w) The city aid base is increased by $25,000 in calendar years 2009 to 2013 and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
increased by $25,000 in calendar year 2009 only, provided that:
    (1) the city is located in the seven-county metropolitan area;
    (2) its population in 2006 is less than 200; and
    (3) the percentage of its housing stock built before 1940, according to the 2000
United States Census, is greater than 40 percent.
    (x) The city aid base is increased by $90,000 in calendar year 2009 only and the
minimum and maximum total amount of aid it may receive under section 477A.013,
subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the
city is located in the seven-county metropolitan area, has a 2006 population between 5,000
and 7,000 and has a 1997 population of over 7,000.
    (y) In calendar year 2010 only, the city aid base for a city is increased by $225,000 if
it was eligible for a $450,000 payment in calendar year 2008 under Minnesota Statutes
2006, section 477A.011, subdivision 36, paragraph (e), and the second half of the payment
under that paragraph in December 2008 was canceled due to the governor's unallotment.
The payment under this paragraph is not subject to any aid reductions under section
477A.0133 or any future unallotment of the city aid under section 16A.152.
(z) The city aid base and the maximum total aid the city may receive under section
477A.013, subdivision 9, is increased by $25,000 in calendar year 2010 only if:
(1) the city is a first class city in the seven-county metropolitan area with a
population below 300,000; and
(2) the city has made an equivalent grant to its local growers' association to
reimburse up to $1,000 each for membership fees and retail leases for members of the
association who farm in and around Dakota County and who incurred crop damage as a
result of the hail storm in that area on July 10, 2008.
The payment under this paragraph is not subject to any aid reductions under section
477A.0133 or any future unallotment of the city aid under section 16A.152.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2010 and thereafter.

    Sec. 39. Laws 1976, chapter 162, section 3, as amended by Laws 1991, chapter 167,
section 3, is amended to read:
    Sec. 3. COOPERATION.
    The Red River watershed management board may cooperate with water management
and flood control authorities in Minnesota, North Dakota, South Dakota, and the province
of Manitoba and may enter into contracts, compacts and agreements which may be
necessary to insure integration of its projects, to control the effects of flooding or to assure
the beneficial use of water in the Red River basin. The Red River Watershed Management
Board may conduct its meetings at a public facility within the Red River basin, or within
the jurisdiction of an authority with which the Red River Watershed Management Board is
authorized to cooperate.

    Sec. 40. Laws 2001, First Special Session chapter 5, article 3, section 8, the effective
date, as amended by Laws 2005, chapter 151, article 3, section 19, and Laws 2006, chapter
259, article 4, section 20, is amended to read:
    EFFECTIVE DATE. This section is effective for taxes levied in 2002, payable in
2003, through taxes levied in 2011, payable in 2012 and thereafter.

    Sec. 41. Laws 2008, chapter 366, article 6, section 9, the effective date, is amended to
read:
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter on land platted after May 18, 2008.

    Sec. 42. Laws 2008, chapter 366, article 6, section 10, the effective date, is amended to
read:
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter on land platted after May 18, 2008.

    Sec. 43. Laws 2009, chapter 12, article 2, section 5, 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 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 years; and
(4) there are no delinquent property taxes on the land.
Real estate may not be enrolled for valuation and deferment under this section
and Minnesota Statutes, sections 273.111, 273.112, or 273.117, or Minnesota Statutes,
chapter 290C, concurrently.
No more than 50 percent of the total acreage of an agricultural homestead may be
class 2b property enrolled in this program.

    Sec. 44. COUNTY AID PAYMENT.
The county program aid payable to Beltrami County under Minnesota Statutes,
section 477A.0124, must be increased in calendar year 2009 only by $500,000, to be
distributed by the county to the governing body of the Red Lake Band of Chippewa
Indians. The money must be used by the band for the cost of implementing the Fostering
Connections to Success and Increasing Adoptions Act of 2008, Public Law 110-351.
$500,000 is appropriated from the general fund to the commissioner of revenue for the
purpose of this section, and this amount is not subject to unallotment under Minnesota
Statutes, section 16A.152.
EFFECTIVE DATE.This section is effective for aids payable in 2009.

    Sec. 45. MINNEAPOLIS CONVENTION CENTER; LEASE; PROPERTY TAX
EXEMPTION.
Notwithstanding Minnesota Statutes, section 272.01, subdivision 2, or 273.19, real
or personal property subject to a lease or use agreement between the city of Minneapolis
and a private entity for purposes of providing food and beverage services within the
Minneapolis Convention Center is exempt from property taxation.
EFFECTIVE DATE.This section is effective for assessment year 2009 and
thereafter, for taxes payable in 2010 and thereafter.

    Sec. 46. CLOQUET AREA FIRE AND AMBULANCE SPECIAL TAXING
DISTRICT.
    Subdivision 1. Agreement. The city of Cloquet and Perch Lake Township, by
resolution of each of their governing bodies, may establish the Cloquet Area Fire and
Ambulance Taxing District for the purpose of providing fire and ambulance services
throughout the district. In this section, "municipality" means home rule charter and
statutory cities, towns, and Indian tribes. The district may exercise all the powers relating
to fire and ambulance services of the municipalities that receive fire and ambulance
services from the district. Any other municipality that is contiguous to a municipality that
is a member of the district may join the district with the agreement of the municipalities
that comprise the district at the time of its application to join.
    Subd. 2. Board. The Cloquet Area Fire and Ambulance Taxing District Board is
governed by a board made up initially of one or more elected officials of the governing
body of each participating municipality in the proportions set out in the establishing
resolution, subject to change as provided in the district's charter, if any, or in the district's
bylaws. Each municipality's representatives serve at the pleasure of that municipality's
governing body.
    Subd. 3. Tax. The district board may impose a property tax on taxable property
in the district. This tax shall be imposed at a rate that does not exceed 0.2835 percent of
taxable market value for taxes payable in 2010. The board shall annually determine the
separate amounts of the levy that are attributable to the cost of providing fire services and
the cost of providing ambulance services. Costs for the provision of ambulance services
shall be levied against taxable property within the area of the district that receive the
services. Costs for the provision of fire services shall be levied against taxable property
within the area of the district that receive the services.
When an additional municipality becomes a member of the district, the additional
cost of providing ambulance and fire services to that municipality will be determined by
the board and added to the maximum levy amount.
Each county auditor of a county that contains a municipality subject to the tax under
this section must collect the tax and pay it to the Fire and Ambulance Special Taxing
District. The district may also impose other fees or charges as allowed by law for the
provision of fire and ambulance services.
    Subd. 4. Public indebtedness. The district may incur debt in the manner provided
for a municipality by Minnesota Statutes, chapter 475, when necessary to accomplish
its duties.
    Subd. 5. Withdrawal. Notice of intent to withdraw from participation in the district
may be given only in the month of January, with a minimum of twelve months notice of
intent to withdraw. Withdrawal becomes effective for taxes levied in the year when the
notice is given. The district and its members may develop and agree upon continuing
obligations after withdrawal of a municipality.
EFFECTIVE DATE.This section is effective in Cloquet and Perch Lake Township
the day after compliance with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of each.

    Sec. 47. PROPERTY TAX TREATMENT OF HORSE BREEDING AND HORSE
BOARDING PROPERTIES.
    Subdivision 1. Study. In order to provide for the uniform assessment and
classification for property tax purposes of real property used for horse breeding and
horse boarding activities, the commissioner of revenue, in consultation with the
commissioner of agriculture, shall study the treatment of such properties under current
law. The commissioner must report by February 1, 2010, to the chairs and ranking
minority members of the taxes committees of the senate and the house of representatives,
summarizing the current treatment and making recommendations for needed or useful
law changes.
    Subd. 2. Appeals to the commissioner. A person who has a right, title, interest, or
lien in or upon property that had been classified as agricultural for property tax purposes
for taxes payable in 2009 based on the use of the land for breeding or boarding horses,
may appeal the classification of the land for taxes payable in 2010 to the commissioner
of revenue if the use of the land has not substantially changed. The appeal must be in
written form, and must be received by the commissioner before September 1, 2009. The
commissioner must resolve the appeal by issuance of a written order accompanied by a
statement of the commissioner's reasons for the order, on or before December 31, 2009.
When the commissioner issues an order, a copy must be sent to both the appellant and the
county assessor. The order is appealable in tax court only by the owner or taxpayer, and
only within 60 days of issuance.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 48. PROPOSAL FOR REFORM OF LOCAL GOVERNMENT FUNDING
OF HUMAN SERVICES.
(a) The commissioner of human services, in consultation with county representatives
designated by the Association of Minnesota Counties, the Minnesota Inter-County
Association, and the Minnesota Association of County Social Service Administrators;
representatives from organizations that represent people who receive these services; and
the commissioner of the department of revenue shall develop a proposal for establishing
and transitioning from current maintenance of effort and matching fund requirements to a
new consolidated local county property tax contribution across all mandated health and
human services and report it to the governor and the chairs and ranking minority members
of the house or representative and senate committees with jurisdiction over the policy
areas of property taxes and health and human services funding by February 1, 2010.
The report shall be made electronically, with paper copies available upon request. The
following criteria shall be considered in designing the new system:
(1) providing a funding mechanism that is relatively simple to predict and administer
at both the state and local levels;
(2) providing application across programs;
(3) maintaining current services, adjusted for fluctuations in demand for services;
(4) clarifying property tax impacts of funding decisions;
(5) ensuring that all eligible citizens have equal access to mandated services; and
(6) enabling the service system to maximally focus county staff time on service
delivery.
(b) Efforts to control state and county costs and service utilization rates shall focus
on eligibility, level of difficulty, and other programmatic priorities.
(c) The new system must be designed and implemented in a way that:
(1) ensures that counties have the resources available to continue to serve clients
at the current level;
(2) ensure the ability to earn federal match funds;
(3) provide for as much stability as possible in overall property tax demands after
full implementation;
(4) provide that increased county contributions shall be in a form that clearly
indicates the impact on local property taxes at both the state and county level; and
(5) provide for mechanisms that mitigate property tax increases in a county in any
given year.
(d) Any group formed as a result of this section expires February 15, 2010.
EFFECTIVE DATE.This section is effective the day following final enactment.

    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. 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 for assessment years 2010 to 2012,
for taxes payable in 2011 to 2013.

    Sec. 50. REPORT BY ADMINISTRATIVE AUDITOR.
The administrative auditor selected pursuant to Minnesota Statutes, section
473F.03, with the cooperation of the county auditors in the area defined by Minnesota
Statutes, section 473F.02, subdivision 2, shall study the feasibility of basing fiscal
disparities calculations on current year tax rates rather than previous year tax rates,
and report the results of the study to the chairs and ranking minority members of the
house of representatives and senate tax committees by February 1, 2011. The study shall
specifically address any complications that arise from the inclusion of the referendum
market value levy in the fiscal disparities calculations. The report should include any
recommendations for amendments to Minnesota Statutes, chapter 473F, that would be
necessary to implement the change.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 51. STUDY OF RIPARIAN BUFFER AREAS.
The drainage working group, facilitated by the Board of Water and Soil Resources,
must study the condition of riparian buffer areas across the state, and report on the extent
to which the buffer areas are being maintained in a natural state, and the extent to which
the buffer areas are being used in a way that risks environmental damage to public waters.
The working group must make a report to the chairs and ranking minority members of the
house of representatives and senate tax committees by March 1, 2010, on the condition of
buffer areas, along with recommendations, if deemed necessary, for policy options such
as tax incentives and any other types of incentives that might be necessary to promote
the preservation of buffer areas.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 52. STUDY OF POLLUTION CONTROL EXEMPTION.
The commissioner of revenue, in consultation with the commissioner of the
Pollution Control Agency, must study the process used to determine the eligibility of
personal property located at an electric generating facility for the property tax exemption
provided under Minnesota Statutes, section 272.02, subdivision 10. The study must
include a review of the process used, and must compile information on the location, value,
and tax impact of the exemptions provided to date, as well as an assessment of the efficacy
of the equipment in reducing pollution. The results of the study must be presented to the
chairs and ranking minority members of the committees on taxes of the senate and the
house of representatives by January 15, 2010.

    Sec. 53. PURPOSE; COMMISSIONER OF REVENUE GUIDANCE.
The purpose of section 4 is not to contract or expand the definition of "institutions
of purely public charity" but to provide clear standards that can be applied uniformly to
determine eligibility for exemption from property taxation. To carry out this purpose and
to promote uniformity in application of the provisions of section 4, the commissioner of
revenue shall prepare a bulletin providing guidance to assessors as to the commissioner's
interpretation of section 4. The bulletin may include a discussion of court decisions that
provide background to and context for the provisions in section 4, as the commissioner
deems appropriate. This guidance must include examples of facts or circumstances that
satisfy the requirement of "a reasonable justification for failing to meet the factors in clause
(2), (3), or (5)" under section 4, paragraph (a). Assessors shall give due consideration to
the bulletin in assessing property requesting an exemption as an institution of purely public
charity. The commissioner shall distribute the bulletin to all assessors by July 1, 2010.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 54. REPEALER.
Laws 1993, chapter 375, article 5, section 42, as amended by Laws 2002, chapter
377, article 10, section 30, is repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 3
TRUTH IN TAXATION

    Section 1. Minnesota Statutes 2008, section 123B.10, subdivision 1, is amended to read:
    Subdivision 1. Budgets; form of notification. (a) Every board must publish revenue
and expenditure budgets for the current year and the actual revenues, expenditures, fund
balances for the prior year and projected fund balances for the current year in a form
prescribed by the commissioner within one week of the acceptance of the final audit by
the board, or November 30, whichever is earlier. The forms prescribed must be designed
so that year to year comparisons of revenue, expenditures and fund balances can be made.
    (b) A school board annually must notify the public of its revenue, expenditures, fund
balances, and other relevant budget information. The board must include the budget
information required by this section in the materials provided as a part of its truth in
taxation hearing, post the materials in a conspicuous place on the district's official Web
site, including a link to the district's school report card on the Department of Education's
Web site, and publish the information in a qualified newspaper of general circulation
in the district.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 2. Minnesota Statutes 2008, section 275.065, subdivision 1, is amended to read:
    Subdivision 1. Proposed levy. (a) Notwithstanding any law or charter to the
contrary, on or before September 15, each taxing authority, other than a school district,
shall adopt a proposed budget and shall certify to the county auditor the proposed or, in
the case of a town, the final property tax levy for taxes payable in the following year.
    (b) On or before September 30, each school district that has not mutually agreed
with its home county to extend this date shall certify to the county auditor the proposed
property tax levy for taxes payable in the following year. Each school district that has
agreed with its home county to delay the certification of its proposed property tax levy
must certify its proposed property tax levy for the following year no later than October
7. The school district shall certify the proposed levy as:
    (1) a specific dollar amount by school district fund, broken down between
voter-approved and non-voter-approved levies and between referendum market value
and tax capacity levies; or
    (2) the maximum levy limitation certified by the commissioner of education
according to section 126C.48, subdivision 1.
    (c) If the board of estimate and taxation or any similar board that establishes
maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
property tax levies for funds under its jurisdiction by charter to the county auditor by
September 15, the city shall be deemed to have certified its levies for those taxing
jurisdictions.
    (d) For purposes of this section, "taxing authority" includes all home rule and
statutory cities, towns, counties, school districts, and special taxing districts as defined
in section 275.066. Intermediate school districts that levy a tax under chapter 124 or
136D, joint powers boards established under sections 123A.44 to 123A.446, and Common
School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing
districts for purposes of this section.
(e) At the meeting at which the taxing authority, other than a town, adopts its
proposed tax levy under paragraph (a) or (b), the taxing authority shall announce the time
and place of its subsequent regularly scheduled meetings at which the budget and levy will
be discussed and at which the public will be allowed to speak. The time and place of those
meetings must be included in the proceedings or summary of proceedings published in the
official newspaper of the taxing authority under sections 123B.09, 375.12, or 412.191.

    Sec. 3. Minnesota Statutes 2008, 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. In the case of taxing authorities required to hold a public meeting under subdivision 6,
the notice must clearly state that each taxing authority, including regional library districts
established under section 134.201, and including the metropolitan taxing districts as
defined in paragraph (i), but excluding all other special taxing districts and towns, will
hold a public meeting to receive public testimony on the proposed budget and proposed or
final property tax levy, or, in case of a school district, on the current budget and proposed
property tax levy. 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 clearly
state the time and place of each taxing authority's meeting, 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, subdivisions 5a and 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 and shall be discussed at that
county's public hearing.
    (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 taxes payable in 2010 and
thereafter.

    Sec. 4. Minnesota Statutes 2008, section 275.065, subdivision 6, is amended to read:
    Subd. 6. Public hearing; Adoption of budget and levy. (a) For purposes of this
section, the following terms shall have the meanings given:
(1) "Initial hearing" means the first and primary hearing held to discuss the taxing
authority's proposed budget and proposed property tax levy for taxes payable in the
following year, or, for school districts, the current budget and the proposed property tax
levy for taxes payable in the following year.
(2) "Continuation hearing" means a hearing held to complete the initial hearing, if
the initial hearing is not completed on its scheduled date.
(3) "Subsequent hearing" means the hearing held to adopt the taxing authority's final
property tax levy, and, in the case of taxing authorities other than school districts, the final
budget, for taxes payable in the following year.
(b) Between November 29 and December 20, the governing bodies of a city that has a
population over 500, county, metropolitan special taxing districts as defined in subdivision
3, paragraph (i), and regional library districts shall each hold an initial public hearing
to discuss and seek public comment on its final budget and property tax levy for taxes
payable in the following year, and the governing body of the school district shall hold an
initial public hearing to review its current budget and proposed property tax levy for taxes
payable in the following year. The metropolitan special taxing districts shall be required to
hold only a single joint initial public hearing, the location of which will be determined by
the affected metropolitan agencies. A city, county, metropolitan special taxing district as
defined in subdivision 3, paragraph (i), regional library district established under section
134.201, or school district is not required to hold a public hearing under this subdivision
unless its proposed property tax levy for taxes payable in the following year, as certified
under subdivision 1, has increased over its final property tax levy for taxes payable in the
current year by a percentage that is greater than the percentage increase in the implicit
price deflator for government consumption expenditures and gross investment for state
and local governments prepared by the Bureau of Economic Analysts of the United States
Department of Commerce for the 12-month period ending March 31 of the current year.
(c) The initial hearing must be held after 5:00 p.m. if scheduled on a day other than
Saturday. No initial hearing may be held on a Sunday.
(d) At the initial hearing under this subdivision, the percentage increase in property
taxes proposed by the taxing authority, if any, and the specific purposes for which property
tax revenues are being increased must be discussed. During the discussion, the governing
body shall hear comments regarding a proposed increase and explain the reasons for the
proposed increase. The public shall be allowed to speak and to ask questions. At the public
hearing, the school district must also provide and discuss information on the distribution
of its revenues by revenue source, and the distribution of its spending by program area.
(e) If the initial hearing is not completed on its scheduled date, the taxing authority
must announce, prior to adjournment of the hearing, the date, time, and place for the
continuation of the hearing. The continuation hearing must be held at least five business
days but no more than 14 business days after the initial hearing. A continuation hearing
may not be held later than December 20 except as provided in paragraphs (f) and (g).
A continuation hearing must be held after 5:00 p.m. if scheduled on a day other than
Saturday. No continuation hearing may be held on a Sunday.
(f) The governing body of a county shall hold its initial hearing on the first Thursday
in December each year, and may hold additional initial hearings on other dates before
December 20 if necessary for the convenience of county residents. If the county needs a
continuation of its hearing, the continuation hearing shall be held on the third Tuesday
in December. If the third Tuesday in December falls on December 21, the county's
continuation hearing shall be held on Monday, December 20.
(g) The metropolitan special taxing districts shall hold a joint initial public hearing
on the first Wednesday of December. A continuation hearing, if necessary, shall be held on
the second Wednesday of December even if that second Wednesday is after December 10.
(h) The county auditor shall provide for the coordination of initial and continuation
hearing dates for all school districts and cities within the county to prevent conflicts under
clauses (i) and (j).
(i) By August 10, each school board and the board of the regional library district
shall certify to the county auditors of the counties in which the school district or regional
library district is located the dates on which it elects to hold its initial hearing and any
continuation hearing. If a school board or regional library district does not certify these
dates by August 10, the auditor will assign the initial and continuation hearing dates. The
dates elected or assigned must not conflict with the initial and continuation hearing dates
of the county or the metropolitan special taxing districts.
(j) By August 20, the county auditor shall notify the clerks of the cities within the
county of the dates on which school districts and regional library districts have elected to
hold their initial and continuation hearings. At the time a city certifies its proposed levy
under subdivision 1 it shall certify the dates on which it elects to hold its initial hearing and
any continuation hearing. Until September 15, the first and second Mondays of December
are reserved for the use of the cities. If a city does not certify its hearing dates by
September 15, the auditor shall assign the initial and continuation hearing dates. The dates
elected or assigned for the initial hearing must not conflict with the initial hearing dates
of the county, metropolitan special taxing districts, regional library districts, or school
districts within which the city is located. To the extent possible, the dates of the city's
continuation hearing should not conflict with the continuation hearing dates of the county,
metropolitan special taxing districts, regional library districts, or school districts within
which the city is located. This paragraph does not apply to cities of 500 population or less.
(k) The county initial hearing date and the city, metropolitan special taxing district,
regional library district, and school district initial hearing dates must be designated on
the notices required under subdivision 3. The continuation hearing dates need not be
stated on the notices.
(l) At a subsequent hearing, each county, school district, city over 500 population,
and metropolitan special taxing district may amend its proposed property tax levy
and must adopt a final property tax levy. Each county, city over 500 population, and
metropolitan special taxing district may also amend its proposed budget and must adopt a
final budget at the subsequent hearing. The final property tax levy must be adopted prior
to adopting the final budget. A school district is not required to adopt its final budget at the
subsequent hearing. The subsequent hearing of a taxing authority must be held on a date
subsequent to the date of the taxing authority's initial public hearing. If a continuation
hearing is held, the subsequent hearing must be held either immediately following the
continuation hearing or on a date subsequent to the continuation hearing. The subsequent
hearing may be held at a regularly scheduled board or council meeting or at a special
meeting scheduled for the purposes of the subsequent hearing. The subsequent hearing
of a taxing authority does not have to be coordinated by the county auditor to prevent a
conflict with an initial hearing, a continuation hearing, or a subsequent hearing of any
other taxing authority. All subsequent hearings must be held prior to five working days
after December 20 of the levy year. The date, time, and place of the subsequent hearing
must be announced at the initial public hearing or at the continuation hearing.
(m) (a) The property tax levy certified under section 275.07 by a city of any
population, county, metropolitan special taxing district, regional library district, or school
district must not exceed the proposed levy determined under subdivision 1, except by an
amount up to the sum of the following amounts:
(1) the amount of a school district levy whose voters approved a referendum to
increase taxes under section 123B.63, subdivision 3, or 126C.17, subdivision 9, after
the proposed levy was certified;
(2) the amount of a city or county levy approved by the voters after the proposed
levy was certified;
(3) the amount of a levy to pay principal and interest on bonds approved by the
voters under section 475.58 after the proposed levy was certified;
(4) the amount of a levy to pay costs due to a natural disaster occurring after the
proposed levy was certified, if that amount is approved by the commissioner of revenue
under subdivision 6a;
(5) the amount of a levy to pay tort judgments against a taxing authority that become
final after the proposed levy was certified, if the amount is approved by the commissioner
of revenue under subdivision 6a;
(6) the amount of an increase in levy limits certified to the taxing authority by the
commissioner of education or the commissioner of revenue after the proposed levy was
certified; and
(7) the amount required under section 126C.55.;
(8) the levy to pay emergency debt certificates under section 475.755 authorized and
issued after the proposed levy was certified; and
(9) the amount of unallotment under section 16A.152 that was recertified under
section 275.07, subdivision 6.
(n) (b) This subdivision does not apply to towns and special taxing districts other
than regional library districts and metropolitan special taxing districts.
(o) (c) Notwithstanding the requirements of this section, the employer is required to
meet and negotiate over employee compensation as provided for in chapter 179A.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 5. Minnesota Statutes 2008, section 375.194, subdivision 5, is amended to read:
    Subd. 5. Determination of county tax rate. The eligible county's proposed and
final tax rates shall be determined by dividing the certified levy by the total taxable net tax
capacity, without regard to any abatements granted under this section. The county board
shall make available the estimated amount of the abatement at the public hearing under
section 275.065, subdivision 6.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 6. Minnesota Statutes 2008, section 383A.75, subdivision 3, is amended to read:
    Subd. 3. Duties. The committee is authorized to and shall meet from time to time
to make appropriate recommendations for the efficient and effective use of property tax
dollars raised by the jurisdictions for programs, buildings, and operations. In addition,
the committee shall:
(1) identify trends and factors likely to be driving budget outcomes over the next
five years with recommendations for how the jurisdictions should manage those trends
and factors to increase efficiency and effectiveness;
(2) agree, by October 1 of each year, on the appropriate level of overall property tax
levy for the three jurisdictions and publicly report such to the governing bodies of each
jurisdiction for ratification or modification by resolution; and
(3) plan for the joint truth-in-taxation hearings under section 275.065, subdivision
8
; and
(4) identify, by December 31 of each year, areas of the budget to be targeted in the
coming year for joint review to improve services or achieve efficiencies.
In carrying out its duties, the committee shall consult with public employees of
each jurisdiction and with other stakeholders of the city, county, and school district, as
appropriate.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 7. Minnesota Statutes 2008, section 446A.086, subdivision 8, is amended to read:
    Subd. 8. Tax levy for repayment. (a) With the approval of the authority, a
governmental unit may levy in the year the state makes a payment under this section an
amount up to the amount necessary to provide funds for the repayment of the amount paid
by the state plus interest through the date of estimated repayment by the governmental
unit. The proceeds of this levy may be used only for this purpose unless they exceed the
amount actually due. Any excess must be used to repay other state payments made under
this section or must be deposited in the debt redemption fund of the governmental unit.
The amount of aids to be reduced to repay the state are decreased by the amount levied.
    (b) If the state is not repaid in full for a payment made under this section by
November 30 of the calendar year following the year in which the state makes the
payment, the authority shall require the governmental unit to certify a property tax levy in
an amount up to the amount necessary to provide funds for repayment of the amount paid
by the state plus interest through the date of estimated repayment by the governmental unit.
To prevent undue hardship, the authority may allow the governmental unit to certify the
levy over a five-year period. The proceeds of the levy may be used only for this purpose
unless they are in excess of the amount actually due, in which case the excess must be used
to repay other state payments made under this section or must be deposited in the debt
redemption fund of the governmental unit. If the authority orders the governmental unit to
levy, the amount of aids reduced to repay the state are decreased by the amount levied.
    (c) A levy under this subdivision is an increase in the levy limits of the governmental
unit for purposes of section 275.065, subdivision 6, and must be explained as a specific
increase at the meeting required under that provision.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 8. Minnesota Statutes 2008, section 465.719, subdivision 9, is amended to read:
    Subd. 9. Application of other laws. A corporation created by a political subdivision
under this section must comply with every law that applies to the political subdivision,
as if the corporation is a part of the political subdivision, unless the resolution ratifying
creation of the corporation specifically exempts the corporation from part or all of a law.
If the resolution exempts the corporation from part or all of a law, the resolution must
make a detailed and specific finding as to why the corporation cannot fulfill its purpose if
the corporation is subject to that law. A corporation may not be exempted from chapter
13D, the Minnesota Open Meeting Law, sections 138.163 to 138.25, governing records
management, or chapter 13, the Minnesota Government Data Practices Act. Any affected
or interested person may bring an action in district court to void the resolution on the
grounds that the findings are not sufficiently detailed and specific, or that the corporation
can fulfill its purpose if it is subject to the law from which the resolution exempts the
corporation. Laws that apply to a political subdivision that also apply to a corporation
created by a political subdivision under this subdivision include, but are not limited to:
(1) chapter 13D, the Minnesota Open Meeting Law;
(2) chapter 13, the Minnesota Government Data Practices Act;
(3) section 471.345, the Uniform Municipal Contracting Law;
(4) sections 43A.17, limiting the compensation of employees based on the governor's
salary; 471.991 to 471.999, providing for equitable pay; and 465.72 and 465.722,
governing severance pay;
(5) section 275.065, providing for truth-in-taxation hearings. If any tax revenues of
the political subdivision will be appropriated to the corporation, the corporation's annual
operating and capital budgets must be included in the truth-in-taxation hearing of the
political subdivision that created the corporation;
(6) if the corporation issues debt, its debt is included in the political subdivision's
debt limit if it would be included if issued by the political subdivision, and issuance of the
debt is subject to the election and other requirements of chapter 475 and section 471.69;
(7) (6) section 471.895, prohibiting acceptance of gifts from interested parties, and
sections 471.87 to 471.89, relating to interests in contracts;
(8) (7) chapter 466, relating to municipal tort liability;
(9) (8) chapter 118A, requiring deposit insurance or bond or pledged collateral for
deposits;
(10) (9) chapter 118A, restricting investments;
(11) (10) section 471.346, requiring ownership of vehicles to be identified;
(12) (11) sections 471.38 to 471.41, requiring claims to be in writing, itemized, and
approved by the governing board before payment can be made; and
(13) (12) the corporation cannot make advances of pay, make or guarantee loans to
employees, or provide in-kind benefits unless authorized by law.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 9. Minnesota Statutes 2008, section 473.13, subdivision 1, is amended to read:
    Subdivision 1. Budget. (a) On or before December 20 of each year, the council,
after the public hearing required in section 275.065, shall adopt a final budget covering its
anticipated receipts and disbursements for the ensuing year and shall decide upon the total
amount necessary to be raised from ad valorem tax levies to meet its budget. The budget
shall state in detail the expenditures for each program to be undertaken, including the
expenses for salaries, consultant services, overhead, travel, printing, and other items. The
budget shall state in detail the capital expenditures of the council for the budget year, based
on a five-year capital program adopted by the council and transmitted to the legislature.
After adoption of the budget and no later than five working days after December 20, the
council shall certify to the auditor of each metropolitan county the share of the tax to be
levied within that county, which must be an amount bearing the same proportion to the
total levy agreed on by the council as the net tax capacity of the county bears to the net tax
capacity of the metropolitan area. The maximum amount of any levy made for the purpose
of this chapter may not exceed the limits set by the statute authorizing the levy.
(b) Each even-numbered year the council shall prepare for its transit programs a
financial plan for the succeeding three calendar years, in half-year segments. The financial
plan must contain schedules of user charges and any changes in user charges planned or
anticipated by the council during the period of the plan. The financial plan must contain a
proposed request for state financial assistance for the succeeding biennium.
(c) In addition, the budget must show for each year:
(1) the estimated operating revenues from all sources including funds on hand at the
beginning of the year, and estimated expenditures for costs of operation, administration,
maintenance, and debt service;
(2) capital improvement funds estimated to be on hand at the beginning of the year
and estimated to be received during the year from all sources and estimated cost of capital
improvements to be paid out or expended during the year, all in such detail and form as
the council may prescribe; and
(3) the estimated source and use of pass-through funds.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 10. REPEALER.
Minnesota Statutes 2008, section 275.065, subdivisions 5a, 6b, 6c, 8, 9, and 10, are
repealed.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

ARTICLE 4
SALES AND USE TAXES

    Section 1. [270C.085] NOTIFICATION REQUIREMENTS; SALES AND USE
TAXES.
The commissioner of revenue shall establish a means of electronically notifying
persons holding a sales tax permit under section 297A.84 of any statutory change in
chapter 297A and any issuance or change in any administrative rule, revenue notice, or
sales tax fact sheet or other written information provided by the department explaining the
interpretation or administration of the tax imposed under that chapter. The notification
must indicate the basic subject of the statute, rule, fact sheet, or other material and provide
an electronic link to the material. Any person holding a sales tax permit that provides
an electronic address to the department must receive these notifications unless they
specifically request electronically, or in writing, to be removed from the notification list.
This requirement does not replace traditional means of notifying the general public or
persons without access to electronic communications of changes in the sales tax law. The
electronic notification must begin no later than December 31, 2009.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2008, section 289A.11, subdivision 1, is amended to read:
    Subdivision 1. Return required. (a) Except as provided in section 289A.18,
subdivision 4
, for the month in which taxes imposed by chapter 297A are payable, or for
which a return is due, a return for the preceding reporting period must be filed with the
commissioner in the form and manner the commissioner prescribes. A person making
sales at retail at two or more places of business may file a consolidated return subject to
rules prescribed by the commissioner. In computing the dollar amount of items on the
return, the amounts are rounded off to the nearest whole dollar, disregarding amounts less
than 50 cents and increasing amounts of 50 cents to 99 cents to the next highest dollar.
(b) Notwithstanding this subdivision, a person who is not required to hold a sales tax
permit under chapter 297A and who makes annual purchases, for use in a trade or business,
of less than $18,500, or a person who is not required to hold a sales tax permit and who
makes purchases for personal use, that are subject to the use tax imposed by section
297A.63, may file an annual use tax return on a form prescribed by the commissioner. If a
person who qualifies for an annual use tax reporting period is required to obtain a sales tax
permit or makes use tax purchases, for use in a trade or business, in excess of $18,500
during the calendar year, the reporting period must be considered ended at the end of the
month in which the permit is applied for or the purchase in excess of $18,500 is made and
a return must be filed for the preceding reporting period.
(c) Notwithstanding paragraph (a), a person prohibited by the person's religious
beliefs from using electronics shall be allowed to file by mail, without any additional fees.
The filer must notify the commissioner of revenue of the intent to file by mail on a form
prescribed by the commissioner. A return filed under this paragraph must be postmarked
no later than the day the return is due in order to be considered filed on a timely basis.
EFFECTIVE DATE.This section is effective for returns filed after June 30, 2009.

    Sec. 3. Minnesota Statutes 2008, section 289A.20, subdivision 4, is amended to read:
    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following the
month in which the taxable event occurred, or following another reporting period as the
commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
(f) or (g), except that use taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.
    (b) A vendor having a liability of $120,000 or more during a fiscal year ending June
30 must remit the June liability for the next year in the following manner:
    (1) Two business days before June 30 of the year, the vendor must remit 90 percent
of the estimated June liability to the commissioner.
    (2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.
    (c) A vendor having a liability of:
    (1) $20,000 or more in the fiscal year ending June 30, 2005; or
    (2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years
thereafter,
must remit all liabilities on returns due for periods beginning in the subsequent calendar
year by electronic means on or before the 20th day of the month following the month in
which the taxable event occurred, or on or before the 20th day of the month following the
month in which the sale is reported under section 289A.18, subdivision 4, except for 90
percent of the estimated June liability, which is due two business days before June 30. The
remaining amount of the June liability is due on August 20.
(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
religious beliefs from paying electronically shall be allowed to remit the payment by mail.
The filer must notify the commissioner of revenue of the intent to pay by mail before
doing so on a form prescribed by the commissioner. No extra fee may be charged to a
person making payment by mail under this paragraph. The payment must be postmarked
at least two business days before the due date for making the payment in order to be
considered paid on a timely basis.
EFFECTIVE DATE.This section is effective for payments remitted after June
30, 2009.

    Sec. 4. Minnesota Statutes 2008, section 297A.62, is amended by adding a subdivision
to read:
    Subd. 1a. Constitutionally required sales tax increase. 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.

    Sec. 5. Minnesota Statutes 2008, section 297A.64, subdivision 2, is amended to read:
    Subd. 2. Fee imposed. (a) A fee equal to five percent of the sales price is imposed
on leases or rentals of vehicles subject to the tax under subdivision 1. The lessor on the
invoice to the customer may designate the fee as "a fee imposed by the State of Minnesota
for the registration of rental cars."
(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
corporation or similar entity, consisting of individual or group members who pay the
organization for the use of a motor vehicle, if the organization:
(1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1
that are available to its members for use, priced on the basis of intervals of one hour or less;
(2) parks its vehicles at unstaffed, self-service locations that are accessible at any
time of the day;
(3) maintains its vehicles, insures its vehicles on behalf of its members, and
purchases fuel for its fleet; and
(4) does not charge usage rates that decline on a per unit basis, whether specified
based on distance or time.
EFFECTIVE DATE.This section is effective July 1, 2009, and applies to
registrations made or renewed on or after that date.

    Sec. 6. Minnesota Statutes 2008, section 297A.71, is amended by adding a subdivision
to read:
    Subd. 41. Construction materials; meat processing facility. Materials and
supplies used or consumed in, and equipment incorporated into, the construction or
improvement of a meat processing facility are exempt. This facility must be constructed to
replace a meat processing facility destroyed in a fire in April 2009, that employed more
than 200 employees at the time of the destruction. The tax must be imposed and collected
as if the rate under section 297A.62, subdivision 1, applied and then refunded after June
30, 2011, in the manner provided in section 297A.75.
EFFECTIVE DATE.This section is effective for sales and purchases made after
April 30, 2009.

    Sec. 7. Minnesota Statutes 2008, 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, supplies, fixtures, furnishings, and equipment for a county law
enforcement and family service center under section 297A.71, subdivision 26;
    (9) (8) materials and supplies for qualified low-income housing under section
297A.71, subdivision 23;
    (10) (9) materials, supplies, and equipment for municipal electric utility facilities
under section 297A.71, subdivision 35;
    (11) (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;
    (12) (11) tangible personal property and taxable services and construction materials,
supplies, and equipment exempt under section 297A.68, subdivision 41;
    (13) (12) commuter rail vehicle and repair parts under section 297A.70, subdivision
3, clause (11); and
    (14) (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.
EFFECTIVE DATE.This section is effective for sales and purchases made after
April 30, 2009.

    Sec. 8. Minnesota Statutes 2008, 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), and (8), 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 (9) (8), the owner of the qualified low-income housing
project;
    (6) for subdivision 1, clause (10) (9), the applicant must be a municipal electric
utility or a joint venture of municipal electric utilities;
    (7) for subdivision 1, clauses (11) (10) and (12), (11), and (14), the owner of the
qualifying business; and
    (8) for subdivision 1, clauses (13) (12) and (14) (13), the applicant must be the
governmental entity that owns or contracts for the project or facility.
EFFECTIVE DATE.This section is effective for sales and purchases made after
April 30, 2009.

    Sec. 9. Minnesota Statutes 2008, section 297A.94, is amended to read:
297A.94 DEPOSIT OF REVENUES.
(a) Except as provided in this section, the commissioner shall deposit the revenues,
including interest and penalties, derived from the taxes imposed by this chapter in the state
treasury and credit them to the general fund.
(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
account in the special revenue fund if:
(1) the taxes are derived from sales and use of property and services purchased for
the construction and operation of an agricultural resource project; and
(2) the purchase was made on or after the date on which a conditional commitment
was made for a loan guaranty for the project under section 41A.04, subdivision 3.
The commissioner of finance shall certify to the commissioner the date on which the
project received the conditional commitment. The amount deposited in the loan guaranty
account must be reduced by any refunds and by the costs incurred by the Department of
Revenue to administer and enforce the assessment and collection of the taxes.
(c) The commissioner shall deposit the revenues, including interest and penalties,
derived from the taxes imposed on sales and purchases included in section 297A.61,
subdivision 3
, paragraph (g), clauses (1) and (4), in the state treasury, and credit them
as follows:
(1) first to the general obligation special tax bond debt service account in each fiscal
year the amount required by section 16A.661, subdivision 3, paragraph (b); and
(2) after the requirements of clause (1) have been met, the balance to the general
fund.
(d) The commissioner shall deposit the revenues, including interest and penalties,
collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
general fund. By July 15 of each year the commissioner shall transfer to the highway user
tax distribution fund an amount equal to the excess fees collected under section 297A.64,
subdivision 5
, for the previous calendar year.
(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and
penalties, transmitted to the commissioner under section 297A.65, must be deposited by
the commissioner in the state treasury as follows:
(1) 50 percent of the receipts must be deposited in the heritage enhancement account
in the game and fish fund, and may be spent only on activities that improve, enhance, or
protect fish and wildlife resources, including conservation, restoration, and enhancement
of land, water, and other natural resources of the state;
(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only for state parks and trails;
(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only on metropolitan park and trail grants;
(4) three percent of the receipts must be deposited in the natural resources fund, and
may be spent only on local trail grants; and
(5) two percent of the receipts must be deposited in the natural resources fund,
and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
Conservatory, and the Duluth Zoo.
(f) The revenue dedicated under paragraph (e) may not be used as a substitute
for traditional sources of funding for the purposes specified, but the dedicated revenue
shall supplement traditional sources of funding for those purposes. Land acquired with
money deposited in the game and fish fund under paragraph (e) must be open to public
hunting and fishing during the open season, except that in aquatic management areas or
on lands where angling easements have been acquired, fishing may be prohibited during
certain times of the year and hunting may be prohibited. At least 87 percent of the money
deposited in the game and fish fund for improvement, enhancement, or protection of fish
and wildlife resources under paragraph (e) must be allocated for field operations.
(g) The revenues deposited under paragraphs (a) to (f) do not include the revenues,
including interest and penalties, generated by the sales tax imposed under section
297A.62, subdivision 1a, which must be deposited as provided under the Minnesota
Constitution, article XI, section 15.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2008, section 297B.02, subdivision 1, is amended to read:
    Subdivision 1. Rate. There is imposed an excise tax at the rate provided in chapter
297A of 6.5 percent on the purchase price of any motor vehicle purchased or acquired,
either in or outside of the state of Minnesota, which is required to be registered under
the laws of this state.
The excise tax is also imposed on the purchase price of motor vehicles purchased
or acquired on Indian reservations when the tribal council has entered into a sales tax on
motor vehicles refund agreement with the state of Minnesota.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2009.

    Sec. 11. Laws 1986, chapter 396, section 4, subdivision 3, is amended to read:
    Subd. 3. Use of property. Revenues received from the tax may only be used:
    (1) to pay costs of collection;
    (2) to pay or secure the payment of any principal of, premium or interest on bonds
issued in accordance with this act;
    (3) to pay costs to acquire, design, equip, construct, improve, maintain, operate,
administer, or promote the convention center or related facilities, including financing
costs related to them;
    (4) to pay reasonable and appropriate costs determined by the city to replace housing
removed from the site; and
    (5) to maintain reserves for the foregoing purposes deemed reasonable and
appropriate by the city.; and
(6) to fund projects under subdivision 4.
In the event of any amendment to chapter 297A enacted subsequent to the effective date
of this act which exempts sales or uses which were taxable under chapter 297A on the
effective date of this act, the city may by ordinance extend the tax authorized hereby to
any such sales or uses provided that the city council shall have determined that such
extension is necessary to provide revenues for the uses to which taxes may be applied
under this section and further provided that, in the estimation of the city council, the
aggregate annual collections following such extension will not exceed the aggregate
annual collections which would have been generated if chapter 297A, as in effect on the
effective date of this act, were then in effect. Any revenue bonds issued in accordance
with this act may, with the consent of the city council, contain a covenant that the tax will
be so extended to the extent necessary to pay principal and interest on the bonds when due.
    Money for replacement housing shall be made available by the city only for new
construction, conversion of nonresidential buildings, and for rehabilitation of vacant
residential structures, only if all of the units in the newly constructed building, converted
nonresidential building, or rehabilitated residential structure are to be used for replacement
housing.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Laws 1986, chapter 396, section 4, is amended by adding a subdivision to read:
    Subd. 4. Minneapolis downtown and neighborhood projects. (a) For revenues
collected in calendar years 2009 and 2010, to the extent that revenues from the tax
authorized in subdivision 1 exceeds the amount needed to fund the purposes in subdivision
3, the city may use the excess revenue to fund any city services. The total amount used in
both years for this purpose may not exceed the total amount of aid and credit reductions
under Minnesota Statutes, sections 273.1384 and 477A.011 to 477A.014 in calendar years
2008, 2009, and 2010 due to a governor's unallotment or due to statutory reductions.
(b) Beginning with revenues collected in calendar year 2011, to the extent that
revenues from the tax authorized in subdivision 1 exceeds the amount needed to fund the
purposes in subdivision 3, the city may use the excess revenue in any year to fund capital
projects to further residential, cultural, commercial, and economic development in both
downtown Minneapolis and the Minneapolis neighborhoods.
EFFECTIVE DATE.This section is effective upon compliance of the governing
body of the city of Minneapolis with Minnesota Statutes, section 645.021, subdivisions
2 and 3.

    Sec. 13. Laws 1986, chapter 400, section 44, as amended by Laws 1995, chapter 264,
article 2, section 39, is amended to read:
    Sec. 44. DOWNTOWN TAXING AREA.
    If a bill is enacted into law in the 1986 legislative session which authorizes the city
of Minneapolis to issue bonds and expend certain funds including taxes to finance the
acquisition and betterment of a convention center and related facilities, which authorizes
certain taxes to be levied in a downtown taxing area, then, notwithstanding the provisions
of that law "downtown taxing area" shall mean the geographic area bounded by the
portion of the Mississippi River between I-35W and Washington Avenue, the portion
of Washington Avenue between the river and I-35W, the portion of I-35W between
Washington Avenue and 8th Street South, the portion of 8th Street South between I-35W
and Portland Avenue South, the portion of Portland Avenue South between 8th Street
South and I-94, the portion of I-94 from the intersection of Portland Avenue South to
the intersection of I-94 and the Burlington Northern Railroad tracks, the portion of the
Burlington Northern Railroad tracks from I-94 to Main Street and including Nicollet
Island, and the portion of Main Street to Hennepin Avenue and the portion of Hennepin
Avenue between Main Street and 2nd Street S.E., and the portion of 2nd Street S.E.
between Main Street and Bank Street, and the portion of Bank Street between 2nd Street
S.E. and University Avenue S.E., and the portion of University Avenue S.E. between Bank
Street and I-35W, and by I-35W from University Avenue S.E., to the river. The downtown
taxing area excludes the area bounded on the south and west by Oak Grove Street, on the
east by Spruce Place, and on the north by West 15th Street. The downtown taxing area also
excludes any property located in a zone that is contained in chapter 546 of the Minneapolis
Zoning Code of Ordinances on which a restaurant with a wine license is operated.
EFFECTIVE DATE.This section is effective for sales made after July 31, 2012,
provided that the proceeds of the tax collected between July 1, 2009, and July 31, 2012,
by a restaurant with a wine license that is excluded from the downtown taxing area by
this section, when collected by the commissioner of revenue, shall be deposited in the
general fund of the state treasury.

    Sec. 14. Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended
by Laws 1998, chapter 389, article 8, section 28, and Laws 2008, chapter 366, article
7, section 9, is amended to read:
    Subd. 3. Use of revenues. Revenues received from taxes authorized by subdivisions
1 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or
a portion of the expenses of constructing and improving facilities as part of an urban
revitalization project in downtown Mankato known as Riverfront 2000. Authorized
expenses include, but are not limited to, acquiring property and paying relocation expenses
related to the development of Riverfront 2000 and related facilities, and securing or paying
debt service on bonds or other obligations issued to finance the construction of Riverfront
2000 and related facilities. For purposes of this section, "Riverfront 2000 and related
facilities" means a civic-convention center, an arena, a riverfront park, a technology center
and related educational facilities, and all publicly owned real or personal property that
the governing body of the city determines will be necessary to facilitate the use of these
facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and
landscaping. It also includes the performing arts theatre and the Southern Minnesota
Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by
Minnesota State University, Mankato.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 15. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
Laws 1997, chapter 231, article 7, section 40, and Laws 1998, chapter 389, article 8,
section 30, and Laws 2003, First Special Session chapter 21, article 8, section 13, and
Laws 2005, First Special Session chapter 3, article 5, section 26, is amended to read:
    Subd. 2. Use of revenues. Revenues received from the tax authorized by
subdivision 1 may only be used by the city to pay the cost of collecting the tax, and to pay
for the following projects or to secure or pay any principal, premium, or interest on bonds
issued in accordance with subdivision 3 for the following projects.
    (a) To pay all or a portion of the capital expenses of construction, equipment and
acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
including the demolition of the existing arena and the construction and equipping of a
new arena.
    (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
spent for:
    (1) capital projects to further residential, cultural, commercial, and economic
development in both downtown St. Paul and St. Paul neighborhoods; and
    (2) capital and operating expenses of cultural organizations in the city, provided
that the amount spent under this clause must equal ten percent of the total amount spent
under this paragraph in any year.
    (c) The amount apportioned under paragraph (b) shall be no less than 60 percent
of the revenues derived from the tax each year, except to the extent that a portion of that
amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a)
prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1,
1998, but only if the city council determines that 40 percent of the revenues derived from
the tax together with other revenues pledged to the payment of the bonds, including the
proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
    (d) If in any year more than 40 percent of the revenue derived from the tax authorized
by subdivision 1 is used to pay debt service on the bonds issued for the purposes of
paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment
that exceeds 40 percent of the revenue must be determined for that year. In any year when
40 percent of the revenue produced by the sales tax exceeds the amount required to pay
debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the
amount of the excess must be made available for capital projects to further residential,
cultural, commercial, and economic development in the neighborhoods and downtown
until the cumulative amounts determined for all years under the preceding sentence have
been made available under this sentence. The amount made available as reimbursement in
the preceding sentence is not included in the 60 percent determined under paragraph (c).
    (e) In each of calendar years 2006, 2007, 2008, and 2009 to 2014, revenue not to
exceed $3,500,000 may be used to pay the principal of bonds issued for capital projects of
the city. After December 31, 2009 2014, revenue from the tax imposed under subdivision
1 may not be used for this purpose.
    (f) By January 15 of each year, the mayor and the city council must report to the
legislature on the use of sales tax revenues during the preceding one-year period.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 16. Laws 1993, chapter 375, article 9, section 46, is amended by adding a
subdivision to read:
    Subd. 2a. Unexpended funds and interest. Any interest from loan repayments
or returned funds from revenues apportioned under subdivision 2, paragraph (b), clause
(1), must be made available only for projects qualifying under subdivision 2, paragraph
(b), clause (1).
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 17. Laws 1996, chapter 471, article 2, section 30, is amended to read:
    Sec. 30. CITY OF LITTLE FALLS; TAX AUTHORIZED.
    Subdivision 1. Sales of food; tax. The city of Little Falls may by ordinance impose
a tax of one-half percent on the gross receipts from the retail sale of food and nonalcoholic
beverages sold by the operator of a restaurant or place of refreshment within the city. The
tax imposed may be effective at any time after July 1, 1996.
    Subd. 1a. Sale of alcoholic beverages. The city of Little Falls may also by
ordinance impose the tax in subdivision 1 on the sales of alcoholic beverages sold by the
operator of a restaurant or place of refreshment in the city. Notwithstanding subdivision
5, and regardless of when the city imposes the tax under this subdivision, this tax will
expire when the tax in subdivision 1 expires.
    Subd. 2. Definitions. For purposes of this section:
    (1) "restaurant" means every building or other structure or enclosure, or any part
thereof and all buildings in connection, kept, used or maintained as, or held out to the
public to be an enclosure where meals or lunches are served or prepared for service
elsewhere, except schools;
    (2) "place of refreshment" means every building, structure, vehicle, sidewalk cart or
any part thereof, used as, maintained as, or advertised as, or held out to be a place where
confectionery, ice cream, or drinks of various kinds are made, sold, or served at retail,
excepting schools and school sponsored events; and
    (3) "operator" means the person who is the proprietor of the restaurant, or place of
refreshment, whether in the capacity of owner, lessee, subleases, licensee, or an other
capacity.
    Subd. 3. Use of proceeds. The ordinance adopted by the city shall provide for
distribution of the proceeds of the tax. The proceeds of the tax must be used for tourism
purposes, including operating and maintaining the activities and programs of the tourism
and convention bureau.
    Subd. 4. Enforcement, collection, and administration of taxes. The tax imposed
under this section shall be enforced, administered, and collected by the city of Little Falls
provided that the city may contract with the commissioner of revenue to perform audits of
the tax on behalf of the city. The commissioner shall charge the city an amount that equals
the direct and indirect costs incurred by the department that are necessary to audit the tax.
    Subd. 5. Expiration of taxing authority. The tax imposed under this section shall
expire 15 subdivision 1 expires 30 years after it first becomes effective.
    Subd. 6. Effective date. This section is effective the day following compliance by
the governing body of the city of Little Falls with Minnesota Statutes, section 645.021,
subdivision 3
.
EFFECTIVE DATE.This section is effective the day following compliance by
the governing body of the city of Little Falls with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.

    Sec. 18. Laws 1998, chapter 389, article 8, section 37, subdivision 1, is amended to
read:
    Subdivision 1. Requirement. Expenditures of revenues from the sales tax imposed
by the city of St. Paul that are dedicated to neighborhood investments may be made only
after review of the proposals for expenditures by the citizen review panel described in this
section. The panel must ensure that the application process for all proposals is open, fair,
and competitive. All proposals must be reviewed by the panel prior to presentation of the
proposal to the city council. The panel must evaluate the proposals and provide a report
to the city council that makes recommendations regarding the proposed expenditures
in rank order.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 19. Laws 2002, chapter 377, article 3, section 25, 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 any 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. 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 or at an earlier time as the city
shall, by ordinance, determine.
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. 20. Laws 2006, chapter 259, article 3, section 12, subdivision 3, is amended to
read:
    Subd. 3. Use of revenues. Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation
projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota
Department of Transportation, Steele County, and the city of Owatonna; regional parks
and trail developments; and the West Hills complex, including the firehall, and library
improvement projects; as described in the city resolution No. 4-06, Exhibit A, as adopted
by the city on January 17, 2006. Notwithstanding the specific transportation projects
described in city resolution No. 4-06, Exhibit A, the city may transfer up to $1,500,000
of the sales and use tax revenues from the Alexander Street to 39th Avenue Southwest
project to the reconstruction of 18th Street Southwest from 24th Avenue Southwest to 39th
Avenue West. The amount paid from these revenues for transportation projects may not
exceed $4,450,000 plus associated bond costs. The amount paid from these revenues for
park and trail projects may not exceed $5,400,000 plus associated bond costs. The amount
paid from these revenues for West Hills complex, fire hall, and library improvement
projects may not exceed $2,823,000 plus associated bond costs.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Owatonna with Minnesota Statutes, section 645.021,
subdivision 3.

    Sec. 21. Laws 2008, chapter 366, article 7, section 16, subdivision 3, is amended to
read:
    Subd. 3. Use of proceeds from authorized taxes. The proceeds of any tax imposed
under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses
of operation and maintenance of the Riverfront 2000 and related facilities, including a
performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center,
attached to the Mankato Civic Center for use by Minnesota State University, Mankato.
Authorized expenses include securing or paying debt service on bonds or other obligations
issued to finance the construction of the facilities.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 22. Laws 2008, chapter 366, article 7, section 18, subdivision 2, is amended to
read:
    Subd. 2. Use of revenues. Revenues received from the tax authorized by
subdivision 1 must be used by Cook County to pay the costs of collecting the tax and
to pay for the following projects:
    (1) construction and, improvements, and additions to a county community center
centers and public recreation area areas, including, but not limited to, improvements and
additions to the skateboard park, hockey rink, ball fields, community center addition,
county public parking area, tennis courts, and all associated improvements areas; and
    (2) construction of and improvements to the Grand Marais Public Library;
(3) construction and improvement of a countywide high-speed communications
infrastructure network; and
(4) construction and improvement of a district energy plant for public facilities in
Grand Marais.
Authorized expenses include, but are not limited to, paying construction expenses related
to these improvements, and paying debt service on bonds or other obligations issued to
finance acquisition and construction of these improvements. The total amount of revenues
from the taxes in subdivision 1 that may be used to fund these projects is $14,000,000
$20,000,000 plus any associated bond costs.
EFFECTIVE DATE.This section is effective the day after the governing body
of Cook County and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 23. ROCHESTER FOOD AND BEVERAGE TAX.
    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
477A.016, or any other law or charter provision, the city of Rochester may impose a tax of
one percent on the gross receipts on all sales of food and beverages by restaurants and
places of refreshment, as defined by resolution of the city, that occur in 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. The proceeds of this tax shall be used for (1) paying the
cost of collection; (2) to pay for construction, renovation, improvement, and expansion
of the Mayo Civic Center Complex and related skyway access, lighting, parking, or
landscaping; and (3) 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. 3. Imposition of the tax. The tax under this section may only be imposed
upon approval of the city governing body of a total financing package for the project.
    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 have
been paid or at an earlier time as the city shall, by ordinance, determine.
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, and upon approval of the city governing body of a total
financing package to renovate, improve, or expand the Mayo Civic Center Complex.

ARTICLE 5
LOCAL DEVELOPMENT

    Section 1. Minnesota Statutes 2008, section 373.48, subdivision 1, is amended to read:
    Subdivision 1. Definitions. For the purpose of this section, "project" means a facility
that generates electricity from renewable energy sources listed in section 216B.1691,
subdivision 1, paragraph (a), clause (1).

    Sec. 2. Minnesota Statutes 2008, section 373.48, is amended by adding a subdivision
to read:
    Subd. 3. Joint purchase of energy and acquisition of generation projects;
financing. (a) A county may enter into agreements under section 471.59 with other
counties for joint purchase of energy or joint acquisition of interests in projects. A county
that enters into a multiyear agreement for purchase of energy or acquires an interest in
a project, including C-BED projects pursuant to section 216B.1612, subdivision 9, may
finance the estimated cost of the energy to be purchased during the term of the agreement
or the cost to the county of the interest in the project by the issuance of revenue bonds of
the county, including clean renewable energy revenue bonds, provided that the annual debt
service on all bonds issued under this section, together with the amounts to be paid by the
county in any year for the purchase of energy under agreements entered into under this
section, must not exceed the estimated revenues of the project.
(b) An agreement entered into under section 471.59 as provided by this section
may provide that:
(1) each county issues bonds to pay their respective shares of the cost of the projects;
(2) one of the counties issues bonds to pay the full costs of the project and that the
other participating counties pay any available revenues of the project and pledge the
revenues to the county that issues the bonds; or
(3) the joint powers board issues revenue bonds to pay the full costs of the project
and that the participating counties pay any available revenues of the project under this
subdivision and pledge the revenues to the joint powers entity for payment of the revenue
bonds.

    Sec. 3. Minnesota Statutes 2008, section 469.174, subdivision 22, is amended to read:
    Subd. 22. Tourism facility. "Tourism facility" means property that:
(1) is located in a county where the median income is no more than 85 percent of
the state median income;
(2) is located in a county in development region 2, 3, 4, or 5, or 7E, as defined
in section 462.385;
(3) is not located in a city with a population in excess of 20,000; and
(4) is acquired, constructed, or rehabilitated for use as a convention and meeting
facility that is privately owned, marina, hotel, motel, lodging facility, or nonhomestead
dwelling unit that in each case is intended to serve primarily individuals from outside
the county.
EFFECTIVE DATE.This section is effective for requests for certification made
after June 30, 2009.

    Sec. 4. Minnesota Statutes 2008, section 469.175, subdivision 1, is amended to read:
    Subdivision 1. Tax increment financing plan. (a) A tax increment financing plan
shall contain:
    (1) a statement of objectives of an authority for the improvement of a project;
    (2) a statement as to the development program for the project, including the property
within the project, if any, that the authority intends to acquire, identified by parcel number,
identifiable property name, block, or other appropriate means indicating the area in which
the authority intends to acquire properties;
    (3) a list of any development activities that the plan proposes to take place within
the project, for which contracts have been entered into at the time of the preparation of
the plan, for which the authority has entered into an agreement or designated a developer
including the names of the parties to the contract or designated developer, the activity
governed by the contract agreement or designation, the cost stated in the contract, and the
expected date of completion of that activity;
    (4) identification or description of the type of any other specific development
reasonably expected to take place within the project district, and the date when the
development is likely to occur;
    (5) estimates of the following:
    (i) cost of the project, including administrative expenses, except that if part of the
cost of the project is paid or financed with increment from the tax increment financing
district, the tax increment financing plan for the district must contain an estimate of the
amount of the cost of the project, including administrative expenses, that and interest as a
financing cost, which will be paid or financed with tax increments from the district, but
not to exceed the estimated tax increment generated by the development activity;
    (ii) amount of bonded indebtedness to be incurred bonds to be issued;
    (iii) sources of revenue to finance or otherwise pay public costs;
    (iv) the most recent original net tax capacity of taxable real property within the tax
increment financing district and within any subdistrict;
    (v) (iv) the estimated captured net tax capacity of the tax increment financing district
at completion; and
    (vi) (v) the duration of the tax increment financing district's and any subdistrict's
existence;
    (6) statements of the authority's alternate estimates of the impact of tax increment
financing on the net tax capacities of all taxing jurisdictions in which the tax increment
financing district is located in whole or in part. For purposes of one statement, the
authority shall assume that the estimated captured net tax capacity would be available to
the taxing jurisdictions without creation of the district, and for purposes of the second
statement, the authority shall assume that none of the estimated captured net tax capacity
would be available to the taxing jurisdictions without creation of the district or subdistrict;
    (7) identification and description of studies and analyses used to make the
determination set forth in subdivision 3, clause (2); and
    (8) identification of all parcels to be included in the district or any subdistrict.
    (b) The authority may specify in the tax increment financing plan the first year in
which it elects to receive increment, up to four years following the year of approval of the
district. This paragraph does not apply to an economic development district.
EFFECTIVE DATE.This section is effective for tax increment financing plans
approved after June 30, 2009.

    Sec. 5. Minnesota Statutes 2008, section 469.175, subdivision 6, is amended to read:
    Subd. 6. Annual financial reporting. (a) The state auditor shall develop a uniform
system of accounting and financial reporting for tax increment financing districts. The
system of accounting and financial reporting shall, as nearly as possible:
(1) provide for full disclosure of the sources and uses of public funds in tax
increments of the district;
(2) permit comparison and reconciliation with the affected local government's
accounts and financial reports;
(3) permit auditing of the funds expended on behalf of a district, including a single
district that is part of a multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from other districts or
with other public money;
(4) be consistent with generally accepted accounting principles.
(b) The authority must annually submit to the state auditor a financial report
in compliance with paragraph (a). Copies of the report must also be provided to the
county auditor and to the governing body of the municipality, if the authority is not
the municipality. To the extent necessary to permit compliance with the requirement
of financial reporting, the county and any other appropriate local government unit or
private entity must provide the necessary records or information to the authority or the
state auditor as provided by the system of accounting and financial reporting developed
pursuant to paragraph (a). The authority must submit the annual report for a year on or
before August 1 of the next year.
(c) The annual financial report must also include the following items:
(1) the original net tax capacity of the district and any subdistrict under section
469.177, subdivision 1;
(2) the net tax capacity for the reporting period of the district and any subdistrict;
(3) the captured net tax capacity of the district;
(4) any fiscal disparity deduction from the captured net tax capacity under section
469.177, subdivision 3;
(5) the captured net tax capacity retained for tax increment financing under section
469.177, subdivision 2, paragraph (a), clause (1);
(6) any captured net tax capacity distributed among affected taxing districts under
section 469.177, subdivision 2, paragraph (a), clause (2);
(7) the type of district;
(8) the date the municipality approved the tax increment financing plan and the
date of approval of any modification of the tax increment financing plan, the approval of
which requires notice, discussion, a public hearing, and findings under subdivision 4,
paragraph (a);
(9) the date the authority first requested certification of the original net tax capacity
of the district and the date of the request for certification regarding any parcel added
to the district;
(10) the date the county auditor first certified the original net tax capacity of the
district and the date of certification of the original net tax capacity of any parcel added
to the district;
(11) the month and year in which the authority has received or anticipates it will
receive the first increment from the district;
(12) the date the district must be decertified;
(13) for the reporting period and prior years of the district, the actual amount
received from, at least, the following categories:
(i) tax increments paid by the captured net tax capacity retained for tax increment
financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding
any excess taxes;
(ii) tax increments that are interest or other investment earnings on or from tax
increments;
(iii) tax increments that are proceeds from the sale or lease of property, tangible or
intangible, purchased by the authority with tax increments;
(iv) tax increments that are repayments of loans or other advances made by the
authority with tax increments;
(v) bond or loan proceeds; and
(vi) special assessments;
(vii) grants;
(viii) transfers from funds not exclusively associated with the district; and
(ix) (vi) the market value homestead credit paid to the authority under section
273.1384;
(14) for the reporting period and for the prior years of the district, the actual amount
expended for, at least, the following categories:
(i) acquisition of land and buildings through condemnation or purchase;
(ii) site improvements or preparation costs;
(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or
other similar public improvements;
(iv) administrative costs, including the allocated cost of the authority; and
(v) public park facilities, facilities for social, recreational, or conference purposes, or
other similar public improvements; and for housing districts, construction of affordable
housing;
(vi) transfers to funds not exclusively associated with the district;
(15) the amount of any payments for activities and improvements located outside of
the district that are paid for or financed with tax increments;
(16) the amount of payments of principal and interest that are made during the
reporting period on any nondefeased:
(i) general obligation tax increment financing bonds; and
(ii) other tax increment financing bonds, including pay-as-you-go contracts and
notes; and
(iii) notes and pay-as-you-go contracts;
(17) the principal amount, at the end of the reporting period, of any nondefeased:
(i) general obligation tax increment financing bonds; and
(ii) other tax increment financing bonds, including pay-as-you-go contracts and
notes; and
(iii) notes and pay-as-you-go contracts;
(18) the amount of principal and interest payments that are due for the current
calendar year on any nondefeased:
(i) general obligation tax increment financing bonds; and
(ii) other tax increment financing bonds, including pay-as-you-go contracts and
notes; and
(iii) notes and pay-as-you-go contracts;
(19) if the fiscal disparities contribution under chapter 276A or 473F for the district
is computed under section 469.177, subdivision 3, paragraph (a), the amount of total
increased property taxes imposed on other properties in the municipality that approved the
tax increment financing plan as a result of the fiscal disparities contribution; to be paid
from outside the tax increment financing district; and
(20) the estimate, if any, contained in the tax increment financing plan of the amount
of the cost of the project, including administrative expenses, that will be paid or financed
with tax increment; and
(21) any additional information the state auditor may require.
(d) The commissioner of revenue shall prescribe the method of calculating the
increased property taxes under paragraph (c), clause (19), and the form of the statement
disclosing this information on the annual statement under subdivision 5.
(e) (d) The reporting requirements imposed by this subdivision apply to districts
certified before, on, and after August 1, 1979.
EFFECTIVE DATE.This section is effective for tax increment financing reports
due after December 31, 2009.

    Sec. 6. Minnesota Statutes 2008, section 469.176, subdivision 3, is amended to read:
    Subd. 3. Limitation on administrative expenses. (a) For districts for which
certification was requested before August 1, 1979, or after June 30, 1982 and before
August 1, 2001, no tax increment shall be used to pay any administrative expenses for
a project which exceed ten percent of the total estimated tax increment expenditures
authorized by the tax increment financing plan or the total tax increment expenditures
for the project, whichever is less.
(b) For districts for which certification was requested after July 31, 1979, and before
July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in
Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the
total tax increment expenditures authorized by the tax increment financing plan or the total
estimated tax increment expenditures for the district, whichever is less.
(c) For districts for which certification was requested after July 31, 2001, no tax
increment may be used to pay any administrative expenses for a project which exceed
ten percent of total estimated tax increment expenditures authorized by the tax increment
financing plan or the total tax increments, as defined in section 469.174, subdivision 25,
clause (1), from the district, whichever is less.
(d) Increments used to pay the county's administrative expenses under subdivision
4h are not subject to the percentage limits in this subdivision.
EFFECTIVE DATE.This section is effective for all districts, regardless of when
the request for certification was made.

    Sec. 7. Minnesota Statutes 2008, section 469.176, subdivision 6, is amended to read:
    Subd. 6. Action required. (a) If, after four years from the date of certification of
the original net tax capacity of the tax increment financing district pursuant to section
469.177, no demolition, rehabilitation, or renovation of property or other site preparation,
including qualified improvement of a street adjacent to a parcel but not installation
of utility service including sewer or water systems, has been commenced on a parcel
located within a tax increment financing district by the authority or by the owner of the
parcel in accordance with the tax increment financing plan, no additional tax increment
may be taken from that parcel, and the original net tax capacity of that parcel shall be
excluded from the original net tax capacity of the tax increment financing district. If the
authority or the owner of the parcel subsequently commences demolition, rehabilitation,
or renovation or other site preparation on that parcel including qualified improvement of
a street adjacent to that parcel, in accordance with the tax increment financing plan, the
authority shall certify to the county auditor that the activity has commenced, and the
county auditor shall certify the net tax capacity thereof as most recently certified by the
commissioner of revenue and add it to the original net tax capacity of the tax increment
financing district. The county auditor must enforce the provisions of this subdivision. The
authority must submit to the county auditor evidence that the required activity has taken
place for each parcel in the district. The evidence for a parcel must be submitted by
February 1 of the fifth year following the year in which the parcel was certified as included
in the district. For purposes of this subdivision, qualified improvements of a street are
limited to (1) construction or opening of a new street, (2) relocation of a street, and (3)
substantial reconstruction or rebuilding of an existing street.
(b) For districts which were certified on or after January 1, 2005, and before April
20, 2009, the four-year period under paragraph (a) is increased to six years.
EFFECTIVE DATE.This section is effective for districts certified on or after
January 1, 2005.

    Sec. 8. Minnesota Statutes 2008, section 469.1763, subdivision 3, is amended to read:
    Subd. 3. Five-year rule. (a) Revenues derived from tax increments are considered
to have been expended on an activity within the district under subdivision 2 only if one
of the following occurs:
(1) before or within five years after certification of the district, the revenues are
actually paid to a third party with respect to the activity;
(2) bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within five years after certification, the revenues are spent
to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
reasonably expected to be spent before the end of the later of (i) the five-year period, or
(ii) a reasonable temporary period within the meaning of the use of that term under section
148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve
or replacement fund;
(3) binding contracts with a third party are entered into for performance of the
activity before or within five years after certification of the district and the revenues are
spent under the contractual obligation;
(4) costs with respect to the activity are paid before or within five years after
certification of the district and the revenues are spent to reimburse a party for payment
of the costs, including interest on unreimbursed costs; or
(5) expenditures are made for housing purposes as permitted by subdivision 2,
paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
by subdivision 2, paragraph (e).
(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
the original refunded bonds meet the requirements of paragraph (a), clause (2).
(c) For a redevelopment district or a renewal and renovation district certified after
June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph
(a) are extended to ten years after certification of the district. This extension is provided
primarily to accommodate delays in development activities due to unanticipated economic
circumstances.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2008, section 469.178, subdivision 7, is amended to read:
    Subd. 7. Interfund loans. The authority or municipality may advance or loan
money to finance expenditures under section 469.176, subdivision 4, from its general
fund or any other fund under which it has legal authority to do so. The loan or advance
must be authorized, by resolution of the governing body or of the authority, whichever
has jurisdiction over the fund from which the advance or loan is made authorized, before
money is transferred, advanced, or spent, whichever is earliest. The resolution may
generally grant to the authority the power to make interfund loans under one or more tax
increment financing plans or for one or more districts. The terms and conditions for
repayment of the loan must be provided in writing and include, at a minimum, the principal
amount, the interest rate, and maximum term. The maximum rate of interest permitted to
be charged is limited to the greater of the rates specified under section 270C.40 or 549.09
as of the date the loan or advance is made authorized, unless the written agreement states
that the maximum interest rate will fluctuate as the interest rates specified under section
270C.40 or 549.09 are from time to time adjusted.
EFFECTIVE DATE.This section is effective for interfund loans made after June
30, 2009.

    Sec. 10. Minnesota Statutes 2008, section 469.312, subdivision 5, is amended to read:
    Subd. 5. Duration limit. (a) The maximum duration of a zone is 12 years. The
applicant may request a shorter duration. The commissioner may specify a shorter
duration, regardless of the requested duration.
(b) The duration limit under this subdivision and the duration of the zone for
purposes of allowance of tax incentives described in section 469.315 is extended by three
calendar years for each parcel of property that meets the following requirements:
(1) the qualified business operates an ethanol plant, as defined in section 41A.09, on
the site that includes the parcel; and
(2) the business subsidy agreement was executed after April 30, 2006.
(c) The duration limit under this subdivision and the duration of the zone for
purposes of allowance of tax incentives described in section 469.315 is extended by five
calendar years for each parcel of property that meets the following requirements:
(1) the parcel is located in a county with an unemployment rate that on the date that
the business subsidy agreement is executed (i) equals or exceeds ten percent or (ii) is ten
percent higher than the statewide average;
(2) the operations of the qualified business on the site include:
(i) its headquarters;
(ii) facilities for research and development; and
(iii) the manufacturing of products, used by the building, transport, consumer
products, and industrial products sectors, that reduce the use of or increase the efficiency
of the use of energy resources and that are manufactured using innovative and high
technology processes; and
(3) the business subsidy agreement is executed after July 1, 2009, and before July 1,
2011.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Laws 2008, chapter 366, article 5, section 34, is amended to read:
    Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY.
    (a) The provisions of this section apply to redevelopment tax increment financing
districts created by the Housing and Redevelopment Authority in and for the city of
Oakdale in the areas comprised of the parcels with the following parcel identification
numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056;
3102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059;
3102921320060; and 3102921320061; and (2) 3102921330005; and 3102921330004; and
(2) 2902921330001 and 2902921330005.
    (b) For a district subject to this section, the Housing and Redevelopment Authority
may, when requesting certification of the original tax capacity of the district under
Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district
be certified as the tax capacity of the land.
    (c) The authority to request certification of a district under this section expires on
July 1, 2013.
EFFECTIVE DATE.This section is effective upon approval by the governing
body of the city of Oakdale and compliance with Minnesota Statutes, section 645.021,
subdivision 3
.

    Sec. 12. CHISAGO CITY AND LINDSTROM JOINT VENTURE.
Any two or more of the cities of Chisago City and Lindstrom, their economic
development authorities, housing and redevelopment authorities, and the county of
Chisago may enter into a joint powers agreement to acquire and develop or redevelop
a business park in either city. Any party to the agreement may spend money or issue
debt for all or a part of the project, regardless of whether the project is located within its
corporate boundaries. Issuance of debt under this section is subject to Minnesota Statutes,
chapter 475, except that an election is not required. The agreement may provide for the
parties to share revenues from the project. Any party to the agreement may levy taxes
or spend its funds, as otherwise permitted by law, to pay for the project, including debt
issued to finance the project.
If the project is included in a tax increment financing district, each city and authority
that is a party to the agreement may treat the tax increment financing district as being
located within its corporate boundaries for purposes of the authority under the tax
increment financing act, Minnesota Statutes, sections 469.174 to 469.1799, to spend
increments or issue bonds for the project.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. CITY OF SAUK RAPIDS; TIF.
Any parcel in the city of Sauk Rapids located within Blocks 26, 27, 59, 61, and 62,
original town of Sauk Rapids Plat, 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 in compliance with Minnesota Statutes,
section 469.174, subdivision 10, paragraph (d), clause (2), after the authority adopted a
resolution pursuant to Minnesota Statutes, section 469.174, subdivision 10, paragraph
(d), clause (3); and
(2) the request for certification of the parcel as part of a district is filed with the
county auditor by December 31, 2012.
EFFECTIVE DATE.This section is effective upon compliance by the governing
body of the city of Sauk Rapids with the requirements of Minnesota Statutes, section
645.021, subdivision 3.

    Sec. 14. HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF
SOUTH ST. PAUL; TAX INCREMENT FINANCING DISTRICT.
    Subdivision 1. Authorization. Notwithstanding the provisions of any other law,
the Housing and Redevelopment Authority of the city of South St. Paul may establish a
redevelopment tax increment financing district comprised of the properties included in the
existing Concord Street tax increment district in the city that are exempt under Minnesota
Statutes, section 469.179, subdivision 1, and were not decertified before July 1, 2009. The
district created under this section may be certified after August 1, 2009, and terminates no
later than December 31, 2024. The Housing and Redevelopment Authority of the city of
South St. Paul may create the district under this section only if it enters into an agreement
with Dakota County to pay the county annually out of the increment from this district an
amount equal to the tax that would have been payable to the county on the captured tax
capacity of the district had the district not been created.
    Subd. 2. Special rules. The requirements for qualifying a redevelopment district
under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located
within the district. Minnesota Statutes, section 469.176, subdivisions 4j and 4l, do not
apply to the district. The original tax capacity of the district is $354,945.
    Subd. 3. Authorized expenditures. Tax increment from the district may be
expended to pay for any eligible activities authorized by Minnesota Statutes, chapter
469, within the redevelopment area that includes the district. All such expenditures are
deemed to be activities within the district under Minnesota Statutes, section 469.1763,
subdivisions 2, 3, and 4.
    Subd. 4. Adjusted net tax capacity. The captured tax capacity of the district must
be included in the adjusted net tax capacity of the city, county, and school district for the
purposes of determining local government aid, education aid, and county program aid.
The county auditor shall report to the commissioner of revenue the amount of the captured
tax capacity for the district at the time the assessment abstracts are filed.
EFFECTIVE DATE.This section is effective upon compliance with Minnesota
Statutes, section 645.021, subdivision 3, by the governing body of the city of South St.
Paul.

    Sec. 15. CITY OF MINNETONKA; TAX INCREMENT FINANCING
DISTRICT EXTENSION.
Notwithstanding the provisions of Minnesota Statutes, section 469.176, subdivision
1b, paragraph (a), clause (1), the governing bodies of the city of Minnetonka and its
economic development authority may elect to extend the maximum duration of all or
a portion the Glenhaven Tax Increment Financing District by up to seven years. The
city may make the election under this section only if it finds by resolution that when it
approved the original tax increment financing plan for the Glenhaven Tax Increment
Financing District the area of the district qualified to be certified as a redevelopment
district under Minnesota Statutes, section 469.174, subdivision 10, or that the portion of
the district it is electing to extend so qualified. The city must document this finding in the
manner provided under Minnesota Statutes, section 469.175, subdivision 3, paragraph (b),
clause (1), for a redevelopment district.
EFFECTIVE DATE.This section is effective upon compliance with Minnesota
Statutes, sections 469.1782, subdivision 2, and 645.021, subdivision 3.

    Sec. 16. CITY OF ARDEN HILLS; SPECIAL TAX INCREMENT FINANCING
AUTHORITY.
    Subdivision 1. Establishment. The city of Arden Hills may establish within the
corporate boundaries of the city a redevelopment tax increment financing district subject
to the special rules under subdivision 2. The district must be located within the area
described in the TCAAP Boundary Survey dated December 12, 2007, by W. Brown Land
Surveying, Inc.
    Subd. 2. Special rules. (a) If the city elects to adopt the tax increment financing
plan in subdivision 1 for the district, the following rules apply to the district:
(1) the district is deemed to meet all the requirements of Minnesota Statutes, section
469.174, subdivision 10;
(2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, is
extended to a ten-year period; and
(3) the duration limit under Minnesota Statutes, section 469.176, subdivision 1b,
paragraph (a), clause (4), is extended to 30 years after receipt of the first increment.
(b) Notwithstanding Minnesota Statutes, section 469.175, subdivision 1, paragraph
(b), the city may designate the first year in which it elects to receive an increment, up to six
years following the year of approval of the district. The city must make the designation
by written notice to the county auditor delivered by June 30 of the year prior to the
designated year of first receipt.
    Subd. 3. Expiration. The authority to approve a tax increment financing plan to
establish a tax increment financing district under this section expires December 31, 2019.
EFFECTIVE DATE.This section is effective upon approval by the governing body
of the city of Arden Hills and upon compliance by the city with Minnesota Statutes,
sections 469.1782, subdivision 2, and 645.021, subdivision 3.

    Sec. 17. SEAWAY PORT AUTHORITY OF DULUTH; TAX INCREMENT
FINANCING DISTRICT; SPECIAL RULES.
(a) If the Seaway Port Authority of Duluth adopts a tax increment financing plan and
the governing body of the city of Duluth approves the plan for the tax increment financing
district consisting of one or more parcels identified as: 010-2730-00010; 010-2730-00020;
010-2730-00040; 010-2730-00050; 010-2730-00070; 010-2730-00080; 010-2730-00090;
010-2730-00100; 010-2730-00160; 010-2730-00180; 010-2730-00200; 010-2730-01250;
010-2730-01340; 010-2730-01350; 010-2730-01490; 010-2730-01500; 010-2730-01510;
010-2730-01520; 010-2730-01530; 010-2730-01540; 010-2730-01550; 010-2730-01560;
010-2730-01570; 010-2730-01580; 010-2730-01590; 010-2730-1300; 010-2746-1330;
010-2746-1440; 010-2746-1380; 010-3300-4560; 010-3300-4565; 010-3300-04570;
010-3300-04580; 010-3300-04640; 010-3300-04645; and 010-3300-04650, the five-year
rule under Minnesota Statutes, section 469.1763, subdivision 3, that activities must be
undertaken within a five-year period from the date of certification of the tax increment
financing district, must be considered to be met if the activities are undertaken within five
years after the date all qualifying parcels are delisted from the Federal Superfund list.
(b) The requirements of Minnesota Statutes, section 469.1763, subdivision 4,
beginning in the sixth year following certification of the district requirement, will begin
in the sixth year following the date all qualifying parcels are delisted from the Federal
Superfund list.
(c) The action required under Minnesota Statutes, section 469.176 subdivision 6,
are satisfied if the action is commenced within four years after the date all qualifying
parcels are delisted from the Federal Superfund list and evidence of the action required is
submitted to the county auditor by February 1 of the fifth year following the year in which
all qualifying parcels are delisted from the Federal Superfund list.
(d) For purposes of this section, "qualifying parcels" means United States Steel
parcels listed in paragraph (a) and shown by the Minnesota Pollution Control Agency as
part of the USS Site (USEPA OU 02) that are included in the tax increment financing
district.
(e) In addition to the reporting requirements of Minnesota Statutes, section 469.175,
subdivision 5, the Seaway Port Authority of Duluth shall report the status of all parcels
listed in paragraph (a) and shown as part of the USS Site (USEPA OU 02). The status
report must show the parcel numbers, the listed or delisted status, and if delisted, the
delisting date.
EFFECTIVE DATE.This section is effective upon approval by the governing
body of the city of Duluth and compliance with Minnesota Statutes, section 645.021,
subdivision 3.

    Sec. 18. CITY OF MANKATO; TAX INCREMENT FINANCING DISTRICT;
PROJECT REQUIREMENTS.
    Subdivision 1. Expenditures outside district. Notwithstanding Minnesota Statutes,
section 469.1763, subdivision 2, or any other law to the contrary, the city of Mankato may
expend increments generated from its South Riverfront tax increment financing district for
construction of street and roadway improvements under the Sibley Parkway Plan, provided
the improvements are located within 500 feet or less of the boundaries of the district.
    Subd. 2. Five-year rule. The five-year rule under Minnesota Statutes, section
469.1763, subdivision 3, is extended to an 11-year period for the South Riverfront tax
increment financing district.
EFFECTIVE DATE.This section is effective upon approval by the governing
body of the city of Mankato and upon compliance by the city with Minnesota Statutes,
section 645.021, subdivision 3.

    Sec. 19. CITY OF ST. LOUIS PARK; EXTENSION OF TAX INCREMENT
DISTRICT DURATION.
Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the duration
of the Elmwood Village Tax Increment Financing District is extended to 22 years after
receipt by the St. Louis Park Economic Development Authority of the first increment
from the district.
EFFECTIVE DATE.This section is effective upon compliance by the governing
body of the city of St. Louis Park with the requirements of Minnesota Statutes, sections
469.1782, subdivision 2, and 645.021, subdivision 3.

    Sec. 20. MOUNTAIN IRON ECONOMIC DEVELOPMENT AUTHORITY;
WIND ENERGY PROJECT.
(a) The Mountain Iron economic development authority may form or become a
member of a limited liability company organized under Minnesota Statutes, chapter 322B,
for the purpose of developing a community-based energy development project pursuant
to Minnesota Statutes, section 216B.1612. A limited liability company formed or joined
under this section is subject to the open meeting requirements established in Minnesota
Statutes, chapter 13D. A project authorized by this section may not sell, transmit, or
distribute the electrical energy at retail or provide for end use of the electrical energy to an
off-site facility of the economic development authority or the limited liability company.
Nothing in this section modifies the exclusive service territories or exclusive right to serve
as provided in Minnesota Statutes, sections 216B.37 to 216B.43.
(b) The authority may acquire a leasehold interest in property outside its corporate
boundaries for the purpose of developing a community-based energy development project
as provided in Minnesota Statutes, section 216B.1612.
EFFECTIVE DATE.This section is effective the day after the city of Mountain
Iron and its chief clerical officer comply with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.

    Sec. 21. WINONA COUNTY ECONOMIC DEVELOPMENT AUTHORITY;
WIND ENERGY PROJECT.
(a) The Winona County economic development authority may form or become a
member of a limited liability company organized under Minnesota Statutes, chapter 322B,
for the purpose of developing a community-based energy development project pursuant
to Minnesota Statutes, section 216B.1612. A limited liability company formed or joined
under this section is subject to the open meeting requirements established in Minnesota
Statutes, chapter 13D. A project authorized by this section may not sell, transmit, or
distribute the electrical energy at retail or provide for end use of the electrical energy to an
off-site facility of the economic development authority or the limited liability company.
Nothing in this section modifies the exclusive service territories or exclusive right to serve
as provided in Minnesota Statutes, sections 216B.37 to 216B.43.
(b) The authority may acquire a leasehold interest in property outside its corporate
boundaries for the purpose of developing a community-based energy development project
as provided in Minnesota Statutes, section 216B.1612.
EFFECTIVE DATE.This section is effective the day after the county of Winona
and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions
2 and 3.

ARTICLE 6
PUBLIC FINANCE

    Section 1. [16A.647] TAX CREDIT AND INTEREST SUBSIDY BONDS.
    Subdivision 1. Authority to issue. When authorized by law to issue state general
obligation bonds, the commissioner may issue all or part of the bonds as tax credit bonds
or as interest subsidy bonds or a combination of the two.
    Subd. 2. Definitions. (a) For purposes of this section, the following terms have
the meanings given them.
(b) "Tax credit bonds" means bonds, the interest on which is includable in the
income of the owner of the bonds for federal income tax purposes, but for which the
owner is entitled to a federal tax credit.
(c) "Interest subsidy bonds" means bonds, the interest on which is includable in the
income of the owner of the bonds for federal income tax purposes, but for which the
issuer is entitled to federal interest subsidy payments based on a percentage of the interest
payable on the interest subsidy bonds.
    Subd. 3. Method of sale. Notwithstanding the provisions of section 16A.641,
subdivision 4, the commissioner may sell any series of tax credit bonds or interest
subsidy bonds at negotiated sale upon the terms and conditions and the restrictions the
commissioner prescribes, but the commissioner may contract for investment banking
and banking services only after receiving competitive proposals for the services. The
commissioner may enter into all contracts deemed necessary or desirable to accomplish
the sale in a cost-effective manner.
    Subd. 4. Sinking fund. The commissioner's order authorizing the issuance of
interest subsidy bonds must establish a separate sinking fund account for the interest
subsidy bonds in the state bond fund. There is annually appropriated, as received, to each
interest subsidy bond account, in addition to amounts appropriated under section 16A.641,
the interest subsidy payments received from the federal government with respect to that
issue of interest subsidy bonds in that year.
    Subd. 5. Sale. Tax credit bonds and interest subsidy bonds must be sold at a price
not less than 98 percent of their stated principal amount. No state trunk highway bond
may be sold for a price of less than par and accrued interest.

    Sec. 2. Minnesota Statutes 2008, section 37.31, subdivision 8, is amended to read:
    Subd. 8. Expiration. The authority to issue bonds, other than bonds to refund
outstanding bonds, under this section expires July 1, 2009 2015.

    Sec. 3. Minnesota Statutes 2008, section 126C.55, subdivision 4, is amended to read:
    Subd. 4. Pledge of district's full faith and credit. If, at the request of a school
district or intermediate school district, the state has paid part or all of the principal or
interest due on a district's debt obligation on a specific date, the pledge of the full faith and
credit and unlimited taxing powers of the school district or the member districts of the
intermediate district to repay the principal and interest due on those debt obligations shall
also, without an election or the requirement of a further authorization, become a pledge of
the full faith and credit and unlimited taxing powers of the school district or the member
districts of the intermediate district to repay to the state the amount paid, with interest.
Amounts paid by the state must be repaid in the order in which the state payments were
made. Whenever the state pays under this section interest on bonds for which the issuer is
entitled to federal interest subsidy payments, the state is subrogated to the issuer's rights to
any federal interest subsidy payments relating to the interest paid by the state, unless and
until the state has been reimbursed by the issuer in full.

    Sec. 4. Minnesota Statutes 2008, section 204B.46, is amended to read:
204B.46 MAIL ELECTIONS; QUESTIONS.
    A county, municipality, or school district submitting questions to the voters at a
special election may conduct an election by mail with no polling place other than the office
of the auditor or clerk. No more than two questions may be submitted at a mail election
and no offices may be voted on at a mail election. Notice of the election must be given
to the county auditor at least 53 days prior to the election. This notice shall also fulfill
the requirements of Minnesota Rules, part 8210.3000. The special mail ballot procedures
must be posted at least six weeks prior to the election. No earlier than 20 or later than 14
days prior to the election, the auditor or clerk shall mail ballots by nonforwardable mail
to all voters registered in the county, municipality, or school district. Eligible voters not
registered at the time the ballots are mailed may apply for ballots pursuant to chapter 203B.

    Sec. 5. Minnesota Statutes 2008, section 360.036, subdivision 2, is amended to read:
    Subd. 2. Issuance of bonds. (a) Bonds to be issued by a municipality under sections
360.011 to 360.076, shall be authorized and issued in the manner and within the limitation
prescribed by laws or the charter of the municipality for the issuance and authorization of
bonds for public purposes generally, except as provided in paragraphs (b) and (c).
(b) No election is required to authorize the issuance of the bonds if:
(1) a board organized under section 360.042 recommends by a resolution adopted
by a vote of not less than 60 percent of its members the issuance of bonds, and the
bonds are authorized by a resolution of the governing body of each of the municipalities
acting jointly pursuant to section 360.042, adopted by a vote of not less than 60 percent
of its members; or
(2) the bonds are authorized by a resolution of the governing body of the
municipality, adopted by a vote of not less than 60 percent of its members; or
(3) the bonds are being issued for the purpose of financing the costs of constructing,
enlarging, or improving airports and other air navigation facilities; and
(i) the governing body estimates that passenger facility charges and other revenues
pledged to the payment thereof will be at least 20 percent of the debt service payable
on the bonds in any year;
(ii) the project will be funded in part by a state or federal grant for airport
development; and
(iii) the principal amount of the bonds issued under this clause does not exceed 25
percent of the amount of the state or federal grant.
(c) If the bonds are general obligations of the municipality, the levy of taxes required
by section 475.61 to pay principal and interest on the bonds is not included in computing
or applying any levy limitation applicable to the municipality.

    Sec. 6. Minnesota Statutes 2008, section 366.095, subdivision 1, is amended to read:
    Subdivision 1. Certificates of indebtedness. The town board may issue certificates
of indebtedness within the debt limits for a town purpose otherwise authorized by law.
The certificates shall be payable in not more than five ten years and be issued on the terms
and in the manner as the board may determine. If the amount of the certificates to be
issued exceeds 0.25 percent of the market value of the town, they shall not be issued for at
least ten days after publication in a newspaper of general circulation in the town of the
board's resolution determining to issue them. If within that time, a petition asking for an
election on the proposition signed by voters equal to ten percent of the number of voters
at the last regular town election is filed with the clerk, the certificates shall not be issued
until their issuance has been approved by a majority of the votes cast on the question at
a regular or special election. A tax levy shall be made to pay the principal and interest
on the certificates as in the case of bonds.

    Sec. 7. Minnesota Statutes 2008, section 373.47, subdivision 1, is amended to read:
    Subdivision 1. Authority to incur debt. Subject to prior approval by the Statewide
Radio Board under section 403.36, the governing body of a county may finance the cost of
designing, constructing, and acquiring public safety communication system infrastructure
and equipment for use on the statewide, shared public safety radio system by issuing:
    (1) capital improvement bonds under section 373.40, as if the infrastructure and
equipment qualified as a "capital improvement" within the meaning of section 373.40,
subdivision 1
, paragraph (b), bonds issued under this section are exempt from and shall
not be included in calculating the limitations in section 373.40, subdivision 4; and
    (2) capital notes under the provisions of section 373.01, subdivision 3, as if the
equipment qualified as "capital equipment" within the meaning of section 373.01,
subdivision 3
.
EFFECTIVE DATE.This section is effective the day following final enactment,
and applies to bonds issued after May 22, 2002.

    Sec. 8. Minnesota Statutes 2008, section 428A.03, subdivision 1, is amended to read:
    Subdivision 1. Hearing. Service charges may be imposed by the city within the
special service district at a rate or amount sufficient to produce the revenues required to
provide special services in the district. To determine the appropriate rate for a service
charge based on net tax capacity, taxable property or net tax capacity must be determined
without regard to captured or original net tax capacity under section 469.177 or to the
distribution or contribution value under section 473F.08. Service charges may not be
imposed to finance a special service if the service is ordinarily provided by the city from
its general fund revenues unless the service is provided in the district at an increased level.
In that case, a service charge may be imposed only in the amount needed to pay for the
increased level of service. A service charge may not be imposed on the receipts from the
sale of intoxicating liquor, food, or lodging. Before the imposition of service charges in a
district, for each calendar year, a hearing must be held under section 428A.02 and notice
must be given and must be mailed to any owner, individual, or business organization
subject to a service charge. For purposes of this section, the notice shall also include:
(1) a statement that all interested persons will be given an opportunity to be heard at
the hearing regarding a proposed service charge;
(2) the estimated cost of improvements to be paid for in whole or in part by service
charges imposed under this section, the estimated cost of operating and maintaining
the improvements during the first year and upon completion of the improvements, the
proposed method and source of financing the improvements, and the annual cost of
operating and maintaining the improvements;
(3) the proposed rate or amount of the proposed service charge to be imposed in
the district during the calendar year and the nature and character of special services to
be rendered in the district during the calendar year in which the service charge is to be
collected; and
(4) a statement that the petition requirements of section 428A.08 have either been
met or do not apply to the proposed service charge.
Within six months of the public hearing, the city may adopt a resolution imposing
a service charge within the district not exceeding the amount or rate expressed in the
notice issued under this section.

    Sec. 9. Minnesota Statutes 2008, section 428A.08, is amended to read:
428A.08 PETITION REQUIRED.
No action may be taken under section 428A.02 or 428A.03, unless owners of 25
percent or more of the land area of property that would be subject to service charges in the
proposed special service district and either: (1) owners of 25 percent or more of the net tax
capacity of property that would be subject to a proposed service charges in the proposed
special service district charge, based on net tax capacity; or (2) owners, individuals, and
business organizations subject to 25 percent or more of a proposed service charge based
on other than net tax capacity file a petition requesting a public hearing on the proposed
action with the city clerk. No action may be taken under section 428A.03 to impose
a service charge based on net tax capacity unless owners of 25 percent or more of the
land area subject to a proposed service charge and owners of 25 percent or more of the
net tax capacity subject to a proposed service charge file a petition requesting a public
hearing on the proposed action with the city clerk. No action may be taken under section
428A.03 to impose any other type of service charge unless 25 percent or more of the
individual or business organizations subject to the proposed service charge file a petition
requesting a public hearing on the proposed action with the city clerk. If the boundaries of
a proposed district are changed or the land area or net tax capacity subject to a service
charge or the individuals or business organizations subject to a service charge are changed
after the public hearing, a petition meeting the requirements of this section must be filed
with the city clerk before the ordinance establishing the district or resolution imposing
the service charge may become effective.

    Sec. 10. Minnesota Statutes 2008, section 428A.09, is amended to read:
428A.09 VETO POWER OF OWNERS.
    Subdivision 1. Notice of right to file objections. Except as provided in section
428A.10, the effective date of any ordinance or resolution adopted under sections 428A.02
and 428A.03 must be at least 45 days after it is adopted. Within five days after adoption
of the ordinance or resolution, a summary of the ordinance or resolution must be mailed
to the owner of each parcel included in the special service district and any individual or
business organization subject to a service charge in the same manner that notice is mailed
under section 428A.02. The mailing must include a notice that owners subject to a service
charge based on net tax capacity and owners, individuals, and business organizations
subject to a service charge imposed on another basis have a right to veto the ordinance
or resolution by filing the required number of objections with the city clerk before the
effective date of the ordinance or resolution and that a copy of the ordinance or resolution
is on file with the city clerk for public inspection.
    Subd. 2. Requirements for veto. If owners of 35 percent or more of the land
area in the district subject to the service charge based on net tax capacity or owners
of, individuals, and business organizations subject to 35 percent or more of the net tax
capacity in the district subject to the service charge based on net tax capacity service
charges to be imposed in the district, file an objection to the ordinance adopted by the city
under section 428A.02 with the city clerk before the effective date of the ordinance, the
ordinance does not become effective. If owners of 35 percent or more of the land area
subject to the service charge based on net tax capacity or owners of 35 percent or more
of the net tax capacity subject to the service charge based on net tax capacity file an
objection to the resolution adopted imposing a service charge based on net tax capacity
under section 428A.03 with the city clerk before the effective date of the resolution, the
resolution does not become effective. If 35 percent or more of owners, individuals, and
business organizations subject to a 35 percent or more of the service charge charges to
be imposed in the district file an objection to the resolution adopted imposing a service
charge on a basis other than net tax capacity under section 428A.03 with the city clerk
before the effective date of the resolution, the resolution does not become effective. In the
event of a veto, no district shall be established during the current calendar year and until a
petition meeting the qualifications set forth in this subdivision for a veto has been filed.

    Sec. 11. Minnesota Statutes 2008, section 428A.10, is amended to read:
428A.10 EXCLUSION FROM PETITION REQUIREMENTS AND VETO
POWER.
The petition requirements of section 428A.08 and do not apply to second or
subsequent years' action to impose service charges under section 428A.03. The right of
owners and those subject to a service charge to veto a resolution in section 428A.09
do does not apply to second or subsequent years' applications of a service charge that
is authorized to be in effect for more than one year under a resolution that has met the
petition requirements of section 428A.08 and which has not been vetoed under section
428A.09 for the first year's application. A resolution imposing a service charge for more
than one year must not be adopted unless the notice of public hearing required by section
428A.03 and the notice mailed with the adopted resolution under section 428A.09 include
the following information:
(1) in the case of improvements, the maximum service charge to be imposed in any
year and the maximum number of years the service charges charge is imposed to pay
for the improvement; and
(2) in the case of operating and maintenance services, the maximum service charge
to be imposed in any year and the maximum number of years, or a statement that the
service charge will be imposed for an indefinite number of years, the service charges will
be imposed to pay for operation and maintenance services.
The resolution may provide that the maximum service charge to be imposed in any
year will increase or decrease from the maximum amount authorized in the preceding
year based on an indicator of increased cost or a percentage amount established by the
resolution.

    Sec. 12. Minnesota Statutes 2008, section 446A.086, is amended by adding a
subdivision to read:
    Subd. 12. Federal interest subsidy payments. Whenever the state pays under
this section interest on bonds for which the issuer is entitled to federal interest subsidy
payments, the state is subrogated to the issuer's rights to any federal interest subsidy
payments relating to the interest paid by the state, unless and until the state has been
reimbursed by the issuer in full.

    Sec. 13. Minnesota Statutes 2008, section 469.005, subdivision 1, is amended to read:
    Subdivision 1. County and multicounty authorities. The area of operation of a
county authority shall include all of the county for which it is created, and in case of
a multicounty authority, it shall include all of the political subdivisions for which the
multicounty authority is created; provided, that a county authority or a multicounty
authority shall not undertake any project within the boundaries of any city which has not
empowered the authority to function therein as provided in section 469.004 unless a
resolution has been adopted by the governing body of the city, and by any authority which
has been established in the city, declaring that there is a need for the county or multicounty
authority to exercise its powers in the city. A resolution is not required for the operation of
a Section 8 program or a public housing scattered site project.

    Sec. 14. Minnesota Statutes 2008, section 469.015, subdivision 1, is amended to read:
    Subdivision 1. Bids; notice. All construction work, and work of demolition or
clearing, and every purchase of equipment, supplies, or materials, necessary in carrying
out the purposes of sections 469.001 to 469.047, that involve expenditure of $50,000 or
more shall be awarded by contract as provided in section 471.345. Before receiving
bids under section 471.345, subdivision 3, the authority shall publish, once a week for
two consecutive weeks in an official newspaper of general circulation in the community a
notice that bids will be received for that construction work, or that purchase of equipment,
supplies, or materials. The notice shall state the nature of the work and the terms and
conditions upon which the contract is to be let, naming a time and place where bids will
be received, opened and read publicly, which time shall be not less than seven days after
the date of the last publication. After the bids have been received, opened and read
publicly and recorded, the authority shall award the contract to the lowest responsible
bidder, provided that the authority reserves the right to reject any or all bids. Each
contract shall be executed in writing, and the person to whom the contract is awarded
shall give sufficient bond to the authority for its faithful performance. If no satisfactory
bid is received, the authority may readvertise. The authority may establish reasonable
qualifications to determine the fitness and responsibility of bidders and to require bidders
to meet the qualifications before bids are accepted.

    Sec. 15. Minnesota Statutes 2008, section 469.015, subdivision 2, is amended to read:
    Subd. 2. Exception; emergency. If the authority by a vote of four-fifths of its
members shall declare that an emergency exists requiring the immediate purchase of
any equipment or material or supplies at a cost in excess of $50,000 but not exceeding
$75,000 the amount provided in section 471.345, or making of emergency repairs, it shall
not be necessary to advertise for bids, but the material, equipment, or supplies may be
purchased in the open market at the lowest price obtainable, or the emergency repairs may
be contracted for or performed without securing formal competitive bids. An emergency,
for purposes of this subdivision, shall be understood to be unforeseen circumstances or
conditions which result in the placing in jeopardy of human life or property.

    Sec. 16. Minnesota Statutes 2008, section 469.015, subdivision 3, is amended to read:
    Subd. 3. Performance and payment bonds. Performance and payment bonds shall
be required from contractors for any works of construction as provided in and subject to
all the provisions of sections 574.26 to 574.31 except for contracts entered into by an
authority for an expenditure of less than $50,000.

    Sec. 17. Minnesota Statutes 2008, section 469.034, subdivision 2, is amended to read:
    Subd. 2. General obligation revenue bonds. (a) An authority may pledge the
general obligation of the general jurisdiction governmental unit as additional security for
bonds payable from income or revenues of the project or the authority. The authority
must find that the pledged revenues will equal or exceed 110 percent of the principal and
interest due on the bonds for each year. The proceeds of the bonds must be used for a
qualified housing development project or projects. The obligations must be issued and
sold in the manner and following the procedures provided by chapter 475, except the
obligations are not subject to approval by the electors, and the maturities may extend to
not more than 35 years for obligations sold to finance housing for the elderly and 40 years
for other obligations issued under this subdivision. The authority is the municipality for
purposes of chapter 475.
(b) The principal amount of the issue must be approved by the governing body of
the general jurisdiction governmental unit whose general obligation is pledged. Public
hearings must be held on issuance of the obligations by both the authority and the general
jurisdiction governmental unit. The hearings must be held at least 15 days, but not more
than 120 days, before the sale of the obligations.
(c) The maximum amount of general obligation bonds that may be issued and
outstanding under this section equals the greater of (1) one-half of one percent of
the taxable market value of the general jurisdiction governmental unit whose general
obligation is pledged, or (2) $3,000,000. In the case of county or multicounty general
obligation bonds, the outstanding general obligation bonds of all cities in the county
or counties issued under this subdivision must be added in calculating the limit under
clause (1).
(d) "General jurisdiction governmental unit" means the city in which the housing
development project is located. In the case of a county or multicounty authority, the
county or counties may act as the general jurisdiction governmental unit. In the case of
a multicounty authority, the pledge of the general obligation is a pledge of a tax on the
taxable property in each of the counties.
(e) "Qualified housing development project" means a housing development project
providing housing either for the elderly or for individuals and families with incomes not
greater than 80 percent of the median family income as estimated by the United States
Department of Housing and Urban Development for the standard metropolitan statistical
area or the nonmetropolitan county in which the project is located. The project must be
owned for the term of the bonds either by the authority or by a limited partnership or other
entity in which the authority or another entity under the sole control of the authority is the
sole general partner and the partnership or other entity must receive (1) an allocation from
the Department of Finance or an entitlement issuer of tax-exempt bonding authority for
the project and a preliminary determination by the Minnesota Housing Finance Agency
or the applicable suballocator of tax credits that the project will qualify for four percent
low-income housing tax credits or (2) a reservation of nine percent low-income housing
tax credits from the Minnesota Housing Finance Agency or a suballocator of tax credits
for the project. A qualified housing development project may admit nonelderly individuals
and families with higher incomes if:
(1) three years have passed since initial occupancy;
(2) the authority finds the project is experiencing unanticipated vacancies resulting in
insufficient revenues, because of changes in population or other unforeseen circumstances
that occurred after the initial finding of adequate revenues; and
(3) the authority finds a tax levy or payment from general assets of the general
jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher
income individuals or families are not admitted.
(f) The authority may issue bonds to refund bonds issued under this subdivision in
accordance with section 475.67. The finding of the adequacy of pledged revenues required
by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the
issuance of refunding bonds. This paragraph applies to refunding bonds issued on and
after July 1, 1992.

    Sec. 18. Minnesota Statutes 2008, section 469.153, subdivision 2, is amended to read:
    Subd. 2. Project. (a) "Project" means (1) any properties, real or personal, used
or useful in connection with a revenue producing enterprise, or any combination of
two or more such enterprises engaged or to be engaged in generating, transmitting, or
distributing electricity, assembling, fabricating, manufacturing, mixing, processing,
storing, warehousing, or distributing any products of agriculture, forestry, mining, or
manufacture, or in research and development activity in this field, or in the manufacturing,
creation, or production of intangible property, including any patent, copyright, formula,
process, design, know how, format, or other similar item; (2) any properties, real or
personal, used or useful in the abatement or control of noise, air, or water pollution, or in
the disposal of solid wastes, in connection with a revenue producing enterprise, or any
combination of two or more such enterprises engaged or to be engaged in any business
or industry; (3) any properties, real or personal, used or useful in connection with the
business of telephonic communications, conducted or to be conducted by a telephone
company, including toll lines, poles, cables, switching, and other electronic equipment
and administrative, data processing, garage, and research and development facilities;
(4) any properties, real or personal, used or useful in connection with a district heating
system, consisting of the use of one or more energy conversion facilities to produce hot
water or steam for distribution to homes and businesses, including cogeneration facilities,
distribution lines, service facilities, and retrofit facilities for modifying the user's heating
or water system to use the heat energy converted from the steam or hot water.
(b) "Project" also includes any properties, real or personal, used or useful in
connection with a revenue producing enterprise, or any combination of two or more
such enterprises engaged in any business.
(c) "Project" also includes any properties, real or personal, used or useful for the
promotion of tourism in the state. Properties may include hotels, motels, lodges, resorts,
recreational facilities of the type that may be acquired under section 471.191, and related
facilities.
(d) "Project" also includes any properties, real or personal, used or useful in
connection with a revenue producing enterprise, whether or not operated for profit,
engaged in providing health care services, including hospitals, nursing homes, and related
medical facilities.
(e) "Project" does not include any property to be sold or to be affixed to or consumed
in the production of property for sale, and does not include any housing facility to be
rented or used as a permanent residence.
(f) "Project" also means the activities of any revenue producing enterprise involving
the construction, fabrication, sale, or leasing of equipment or products to be used in
gathering, processing, generating, transmitting, or distributing solar, wind, geothermal,
biomass, agricultural or forestry energy crops, or other alternative energy sources for
use by any person or any residential, commercial, industrial, or governmental entity in
heating, cooling, or otherwise providing energy for a facility owned or operated by that
person or entity.
(g) "Project" also includes any properties, real or personal, used or useful in
connection with a county jail, county regional jail, community corrections facilities
authorized by chapter 401, or other law enforcement facilities, the plans for which are
approved by the commissioner of corrections; provided that the provisions of section
469.155, subdivisions 7 and 13, do not apply to those projects.
(h) "Project" also includes any real properties used or useful in furtherance of the
purpose and policy of section 469.141.
(i) "Project" also includes related facilities as defined by section 471A.02,
subdivision 11
.
(j) "Project" also includes an undertaking to purchase the obligations of local
governments located in whole or in part within the boundaries of the municipality that are
issued or to be issued for public purposes.

    Sec. 19. Minnesota Statutes 2008, section 471.191, subdivision 1, is amended to read:
    Subdivision 1. Lease to nonprofit. Any city operating a program of public
recreation and playgrounds pursuant to sections 471.15 to 471.19 may acquire or lease,
equip, and maintain land, buildings, and other recreational facilities, including, but
without limitation, outdoor or indoor swimming pools, skating rinks and arenas, athletic
fields, golf courses, marinas, concert halls, museums, and facilities for other kinds of
athletic or cultural participation, contests, conventions, conferences, and exhibitions,
together with related automobile parking facilities as defined in section 459.14, and may
expend funds for the operation of such program and borrow and expend funds for capital
costs thereof pursuant to the provisions of this section. A school district operating a
program of public recreation and playgrounds has the rights provided in this section. Any
facilities to be operated by a nonprofit corporation, as contemplated in section 471.16,
may be leased to the corporation upon such rentals and for such term, not exceeding 30
years, and subject to such other provisions as may be agreed; including but not limited to
provisions (a) permitting the lessee, subject to whatever conditions are stated, to provide
for the construction and equipment of the facilities by any means available to it and in the
manner determined by it, without advertisement for bids as required for other municipal
facilities, and (b) granting the lessee the option to renew the lease upon such conditions
and rentals, or to purchase the facilities at such price, as may be agreed; provided that (c)
any such lease shall require the lessee to pay net rentals sufficient to pay the principal,
interest, redemption premiums, and other expenses when due with respect to all city
bonds issued for the acquisition or betterment of the facilities, less such amount of taxes
and special assessments, if any, as may become payable in any year of the term of the
lease, on the land, building, or other facilities leased, and (d) no option shall be granted
to purchase the facilities at any time at a price less than the amount required to pay all
principal and interest to become due on such bonds to the earliest date or dates on which
they may be paid and redeemed, and all redemption premiums and other expenses of
such payment and redemption.

    Sec. 20. Minnesota Statutes 2008, section 473.39, is amended by adding a subdivision
to read:
    Subd. 1o. Obligations. After July 1, 2009, 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 $34,200,000 for capital expenditures as
prescribed in the council's regional transit master plan and transit capital improvement
program and for related costs, including the costs of issuance and sale of the obligations.
EFFECTIVE DATE; APPLICATION.This section is effective the day following
final enactment and applies to the counties of Anoka, Carver, Dakota, Hennepin, Ramsey,
Scott, and Washington.

    Sec. 21. Minnesota Statutes 2008, section 474A.02, subdivision 2, is amended to read:
    Subd. 2. Annual volume cap. "Annual volume cap" means the aggregate dollar
amount of obligations constituting "private activity bonds" under federal tax law and
bearing interest excluded from gross income for purposes of federal income taxation
which, under the provisions of federal tax law, may be issued in one year by issuers.
The commissioner shall administer the volume cap allocations for obligations permitted
under the federal American Recovery and Reinvestment Act of 2009, whether taxable or
tax-exempt, in accordance with orders of the commissioner.

    Sec. 22. Minnesota Statutes 2008, section 474A.02, subdivision 14, is amended to read:
    Subd. 14. Manufacturing project. "Manufacturing project" means any facility
which is used in the manufacturing or production of tangible personal property,
including the processing resulting in a change in the condition of the property, or in the
manufacturing, creation, or production of intangible property, including any patent,
copyright, formula, process, design, know how, format, or other similar item.

    Sec. 23. Minnesota Statutes 2008, section 475.67, subdivision 8, is amended to read:
    Subd. 8. Escrow account securities. Securities purchased for the escrow account
shall be limited to:
(a) general obligations of the United States, securities whose principal and interest
payments are guaranteed by the United States, and securities issued by the following
agencies of the United States: Banks for Cooperatives, Federal Home Loan Banks,
Federal Intermediate Credit Banks, Federal Land Banks, and the Federal National
Mortgage Association; or
(b) obligations issued or guaranteed by any state or any political subdivision of a
state, which at the date of purchase are rated in the highest or the next highest rating
given category by Standard and Poor's Corporation, Moody's Investors Service, or a
similar nationally recognized rating agency, but not less than the rating on the refunded
bonds immediately prior to the refunding.
"Rating category," as used in this subdivision, means a generic securities rating
category, without regard in the case of a long-term rating category to any refinement or
gradation of such long-term rating category by a numerical modifier or otherwise.

    Sec. 24. Laws 1971, chapter 773, section 4, as amended by Laws 1976, chapter 234,
section 2, is amended to read:
Sec. 4. No proceeds of any bonds issued pursuant to section 1 hereof shall be
expended for the construction or equipment of any portion of the St. Paul auditorium or
civic center connected thereto; nor shall any proceeds be expended for the acquisition or
betterment of the building known as the Lowry Medical Arts Annex. All bonds issued
under this act shall mature at any time or times within ten or, for bonds for public buildings
or parking structures, 30 years from the date of issue.
EFFECTIVE DATE.This section is effective the day after the city council and the
chief clerical officer of the city of St. Paul have timely completed their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.

    Sec. 25. Laws 2008, chapter 366, article 7, section 18, subdivision 3, is amended to
read:
    Subd. 3. Bonding authority. Cook County may issue bonds under Minnesota
Statutes, chapter 475, to pay capital and administrative expenses for the projects
authorized in subdivision 2, in an amount that does not exceed $14,000,000 $20,000,000.
An election to approve the bonds under Minnesota Statutes, section 475.58, is not
required. The issuance of bonds under this subdivision is not subject to Minnesota
Statutes, sections 275.60 and 275.61. The debt represented by the bonds is not included
in computing any debt limitation applicable to the county, and any levy of taxes under
Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not
subject to any levy limitation.
EFFECTIVE DATE.This section is effective the day after the governing body
of Cook County and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 26. ST. PAUL PORT AUTHORITY CREDIT.
Notwithstanding Minnesota Statutes, section 474A.061, subdivision 4, the
commissioner of finance shall apply the $31,800 deposit paid in 2008 for a proposed issue
of $1,590,000 in tax exempt bonds by the St. Paul Port Authority for District Cooling
St. Paul, Inc. to an application for an allocation of tax exempt bonds by the St. Paul Port
Authority for the same project.
EFFECTIVE DATE.This section is effective the day following final enactment
and expires January 1, 2011.

    Sec. 27. TEMPORARY CARRYFORWARD EXTENSION.
Notwithstanding Minnesota Statutes, section 474A.04, subdivision 1a, bonding
authority allocated to an entitlement issuer in 2008, except the bonding authority allocated
in Laws 2008, chapter 366, article 5, section 38, or 2009, that an entitlement issuer carries
forward under federal tax law that is not permanently issued or for which the governing
body of the entitlement issuer has not enacted a resolution electing to use the authority for
mortgage credit certificates and has not provided a notice of issue to the commissioner of
finance before 4:30 p.m. on the last business day in December 2011 must be deducted
from the entitlement allocation for that entitlement issuer in 2012.

    Sec. 28. EFFECTIVE DATE.
Except where provided otherwise, this article is effective the day following final
enactment.

ARTICLE 7
DEPARTMENT INDIVIDUAL INCOME, CORPORATE FRANCHISE,
AND ESTATE TAXES

    Section 1. Minnesota Statutes 2008, section 289A.08, subdivision 3, is amended to
read:
    Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
tax under section 290.014, subdivision 5, must file a return, except that a foreign operating
corporation as defined in section 290.01, subdivision 6b, is not required to file a return.
(b) Members of a unitary business that are required to file a combined report on one
return must designate a member of the unitary business to be responsible for tax matters,
including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
taxes lawfully due. The designated member must be a member of the unitary business that
is filing the single combined report and either:
(1) a corporation that is subject to the taxes imposed by chapter 290; or
(2) a corporation that is not subject to the taxes imposed by chapter 290:
(i) Such corporation consents by filing the return as a designated member under this
clause to remit taxes, penalties, interest, or additions to tax due from the members of the
unitary business subject to tax, and receive refunds or other payments on behalf of other
members of the unitary business. The member designated under this clause is a "taxpayer"
for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
on the unitary business under this chapter and chapter 290.
(ii) If the state does not otherwise have the jurisdiction to tax the member designated
under this clause, consenting to be the designated member does not create the jurisdiction
to impose tax on the designated member, other than as described in item (i).
(iii) The member designated under this clause must apply for a business tax account
identification number.
(c) The commissioner shall adopt rules for the filing of one return on behalf of the
members of an affiliated group of corporations that are required to file a combined report.
All members of an affiliated group that are required to file a combined report must file one
return on behalf of the members of the group under rules adopted by the commissioner.
(d) If a corporation claims on a return that it has paid tax in excess of the amount of
taxes lawfully due, that corporation must include on that return information necessary for
payment of the tax in excess of the amount lawfully due by electronic means.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2008.

    Sec. 2. Minnesota Statutes 2008, section 289A.12, is amended by adding a subdivision
to read:
    Subd. 16. Qualified intermediaries. The commissioner may by notice and demand
require a qualified intermediary to file a return relating to transactions for which the
intermediary acted to facilitate exchanges under section 1031 of the Internal Revenue
Code. The return must include the name, address, and state or federal tax identification
number or Social Security number of each of the parties to the exchange, information
relating to the property subject to the exchange, and any other information required by
the commissioner.
EFFECTIVE DATE.This section is effective July 1, 2009, and applies to all
transactions whether facilitated on, before, or after that date.

    Sec. 3. Minnesota Statutes 2008, 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;
    (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;
    (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;
    (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
or, 4 to 10, or 16 must be filed within 30 days after being demanded by
the commissioner.
EFFECTIVE DATE.This section is effective July 1, 2009.

    Sec. 4. Minnesota Statutes 2008, section 289A.19, subdivision 4, is amended to read:
    Subd. 4. Estate tax returns. When an extension to file the federal estate tax return
has been granted under section 6081 of the Internal Revenue Code, the time for filing
the estate tax return is extended for that period. If the estate requests an extension to
file an estate tax return within the time provided in section 289A.18, subdivision 3, the
commissioner shall extend the time for filing the estate tax return for six months. The time
for filing an estate tax return shall be extended for either six months or the amount of
time granted under section 6081 of the Internal Revenue Code to file the federal estate
tax return, whichever is longer.
EFFECTIVE DATE.This section is effective for estates of decedents dying after
December 31, 2008.

    Sec. 5. Minnesota Statutes 2008, section 289A.31, subdivision 5, is amended to read:
    Subd. 5. Withholding tax, withholding from payments to out-of-state
contractors, and withholding by partnerships and small business corporations. (a)
Except as provided in paragraph (b), an employer or person withholding tax under section
290.92 or 290.923, subdivision 2, who fails to pay to or deposit with the commissioner a
sum or sums required by those sections to be deducted, withheld, and paid, is personally
and individually liable to the state for the sum or sums, and added penalties and interest,
and is not liable to another person for that payment or payments. The sum or sums
deducted and withheld under section 290.92, subdivision 2a or 3, or 290.923, subdivision
2
, must be held as a special fund in trust for the state of Minnesota.
(b) If the employer or person withholding tax under section 290.92 or 290.923,
subdivision 2
, fails to deduct and withhold the tax in violation of those sections, and later
the taxes against which the tax may be credited are paid, the tax required to be deducted
and withheld will not be collected from the employer. This does not, however, relieve the
employer from liability for any penalties and interest otherwise applicable for failure to
deduct and withhold. This paragraph does not apply to an employer subject to paragraph
(g), or to a contractor required to withhold under section 290.92, subdivision 31.
(c) Liability for payment of withholding taxes includes a responsible person or entity
described in the personal liability provisions of section 270C.56.
(d) Liability for payment of withholding taxes includes a third party lender or surety
described in section 270C.59.
(e) A partnership or S corporation required to withhold and remit tax under section
290.92, subdivisions 4b and 4c, is liable for payment of the tax to the commissioner, and a
person having control of or responsibility for the withholding of the tax or the filing of
returns due in connection with the tax is personally liable for the tax due.
(f) A payor of sums required to be withheld under section 290.9705, subdivision
1
, is liable to the state for the amount required to be deducted, and is not liable to an
out-of-state contractor for the amount of the payment.
(g) If an employer fails to withhold tax from the wages of an employee when
required to do so under section 290.92, subdivision 2a, by reason of treating such
employee as not being an employee, then the liability for tax is equal to three percent of
the wages paid to the employee. The liability for tax of an employee is not affected by
the assessment or collection of tax under this paragraph. The employer is not entitled to
recover from the employee any tax determined under this paragraph.
EFFECTIVE DATE.This section is effect for taxes required to be withheld after
June 30, 2009.

    Sec. 6. Minnesota Statutes 2008, section 289A.38, subdivision 7, is amended to read:
    Subd. 7. Federal tax changes. If the amount of income, items of tax preference,
deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for
any period, as reported to the Internal Revenue Service is changed or corrected by the
commissioner of Internal Revenue or other officer of the United States or other competent
authority, or where a renegotiation of a contract or subcontract with the United States
results in a change in income, items of tax preference, deductions, credits, or withholding
tax, or, in the case of estate tax, where there are adjustments to the taxable estate, the
taxpayer shall report the change or correction or renegotiation results in writing to the
commissioner. The report must be submitted within 180 days after the final determination
and must be in the form of either an amended Minnesota estate, withholding tax, corporate
franchise tax, or income tax return conceding the accuracy of the federal determination
or a letter detailing how the federal determination is incorrect or does not change the
Minnesota tax. An amended Minnesota income tax return must be accompanied by an
amended property tax refund return, if necessary. A taxpayer filing an amended federal
tax return must also file a copy of the amended return with the commissioner of revenue
within 180 days after filing the amended return.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to read:
    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:
    (1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;
    (2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;
    (3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. No
deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
the qualifying child's vehicle to provide such transportation for a qualifying child. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;
    (4) income as provided under section 290.0802;
    (5) to the extent included in federal adjusted gross income, income realized on
disposition of property exempt from tax under section 290.491;
    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
under the provisions of Public Law 109-1;
    (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) 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) 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) job opportunity building zone income as provided under section 469.316;
    (11) 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) 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) 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) 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) 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) international economic development zone income as provided under section
469.325; and
    (17) 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.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2008, 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) or (16), 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) and (12),
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, 2001, and before December 31,
2004, 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
$1,000 for married taxpayers filing joint returns.
(h) For tax years beginning after December 31, 2004, and before December 31,
2007, 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
$2,000 for married taxpayers filing joint returns.
(i) (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 is adjusted annually for
inflation under subdivision 7 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.
(j) (h) The commissioner shall construct tables showing the amount of the credit
at various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2008.

    Sec. 9. Minnesota Statutes 2008, section 290A.10, is amended to read:
290A.10 PROOF OF TAXES PAID.
Every claimant who files a claim for relief for property taxes payable shall include
with the claim a property tax statement or a reproduction thereof in a form deemed
satisfactory by the commissioner of revenue indicating that there are no delinquent
property taxes on the homestead. Indication on the property tax statement from the county
treasurer that there are no delinquent taxes on the homestead shall be sufficient proof.
Taxes included in a confession of judgment under section 277.23 or 279.37 shall not
constitute delinquent taxes as long as the claimant is current on the payments required to
be made under section 277.23 or 279.37.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2008, section 290A.14, is amended to read:
290A.14 PROPERTY TAX STATEMENT.
The county treasurer shall prepare and send a sufficient number of copies of the
property tax statement to the owner, and to the owner's escrow agent if the taxes are
paid via an escrow account, to enable the owner to comply with the filing requirements
of this chapter and to retain one copy as a record. The property tax statement, in a form
prescribed by the commissioner, shall indicate the manner in which the claimant may
claim relief from the state under both this chapter and chapter 290B, and the amount of the
tax for which the applicant may claim relief. The statement shall also indicate if there
are delinquent property taxes on the property in the preceding year. Taxes included in a
confession of judgment under section 277.23 or 279.37 shall not constitute delinquent
taxes as long as the claimant is current on the payments required to be made under section
277.23 or 279.37.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. REPEALER.
Minnesota Rules, part 8009.3000, is repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 8
DEPARTMENT SALES AND USE TAXES

    Section 1. Minnesota Statutes 2008, section 297A.70, subdivision 2, is amended to
read:
    Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:
(1) the United States and its agencies and instrumentalities;
(2) school districts, the University of Minnesota, state universities, community
colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;
(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;
(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section 473.4051;
(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and
(6) sales to public libraries, public library systems, multicounty, multitype library
systems as defined in section 134.001, county law libraries under chapter 134A, state
agency libraries, the state library under section 480.09, and the Legislative Reference
Library.
(b) This exemption does not apply to the sales of the following products and services:
(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;
(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;
(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11,
except for leases entered into by the United States or its agencies or instrumentalities; or
(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, and soft drinks, and alcoholic beverages as defined in
section 297A.67, subdivision 2, except for lodging, prepared food, candy, and soft
drinks, and alcoholic beverages purchased directly by the United States or its agencies
or instrumentalities.
(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2009.

    Sec. 2. Minnesota Statutes 2008, section 297A.70, subdivision 4, is amended to read:
    Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
(b), to the following "nonprofit organizations" are exempt:
(1) a corporation, society, association, foundation, or institution organized and
operated exclusively for charitable, religious, or educational purposes if the item
purchased is used in the performance of charitable, religious, or educational functions; and
(2) any senior citizen group or association of groups that:
(i) in general limits membership to persons who are either age 55 or older, or
physically disabled; and
(ii) is organized and operated exclusively for pleasure, recreation, and other
nonprofit purposes, not including housing, no part of the net earnings of which inures to
the benefit of any private shareholders; and
(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
For purposes of this subdivision, charitable purpose includes the maintenance of a
cemetery owned by a religious organization.
(b) This exemption does not apply to the following sales:
(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;
(2) construction materials purchased by tax-exempt entities or their contractors to
be used in constructing buildings or facilities that will not be used principally by the
tax-exempt entities; and
(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, and soft drinks, and alcoholic beverages as defined in
section 297A.67, subdivision 2, except wine purchased by an established religious
organization for sacramental purposes; and
(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
as provided in paragraph (c).
(c) This exemption applies to the leasing of a motor vehicle as defined in section
297B.01, subdivision 11, only if the vehicle is:
(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
passenger automobile, as defined in section 168.002, if the automobile is designed and
used for carrying more than nine persons including the driver; and
(2) intended to be used primarily to transport tangible personal property or
individuals, other than employees, to whom the organization provides service in
performing its charitable, religious, or educational purpose.
(d) A limited liability company also qualifies for exemption under this subdivision if
(1) it consists of a sole member that would qualify for the exemption, and (2) the items
purchased qualify for the exemption.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2009, except that the amendment to paragraph (a) is effective the day following
final enactment.

    Sec. 3. Minnesota Statutes 2008, section 297A.992, subdivision 2, is amended to read:
    Subd. 2. Authorization; rates. (a) Notwithstanding section 297A.99, subdivisions
1, 2, and 3, or 477A.016, or any other law, the board of a county participating in a
joint powers agreement as specified in this section shall impose by resolution (1) a
transportation sales and use tax at a rate of one-quarter of one percent on retail sales and
uses taxable under this chapter, and (2) an excise tax of $20 per motor vehicle, as defined
in section 297B.01, subdivision 11, purchased or acquired from any person engaged in the
business of selling motor vehicles at retail, occurring within the jurisdiction of the taxing
authority. The taxes authorized are to fund transportation improvements as specified in
this section, including debt service on obligations issued to finance such improvements
pursuant to subdivision 7.
    (b) The tax imposed under this section is not included in determining if the total tax
on lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986,
chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article
12, section 87, or in determining a tax that may be imposed under any other limitations.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2008, section 297A.993, subdivision 1, is amended to read:
    Subdivision 1. Authorization; rates. Notwithstanding section 297A.99,
subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside
the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or
more than one county outside the metropolitan transportation area acting under a joint
powers agreement, may impose (1) a transportation sales tax at a rate of up to one-half of
one percent on retail sales and uses taxable under this chapter, and (2) an excise tax of $20
per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or acquired
from any person engaged in the business of selling motor vehicles at retail, occurring
within the jurisdiction of the taxing authority. The taxes imposed under this section are
subject to approval by a majority of the voters in each of the counties affected at a general
election who vote on the question to impose the taxes.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. REPEALER.
Minnesota Statutes 2008, section 297A.67, subdivision 24, is repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 9
DEPARTMENT SPECIAL TAXES

    Section 1. Minnesota Statutes 2008, section 287.04, is amended to read:
287.04 EXEMPTIONS.
The tax imposed by section 287.035 does not apply to:
(a) A decree of marriage dissolution or an instrument made pursuant to it.
(b) A mortgage given to correct a misdescription of the mortgaged property.
(c) A mortgage or other instrument that adds additional security for the same debt
for which mortgage registry tax has been paid.
(d) A contract for the conveyance of any interest in real property, including a
contract for deed.
(e) A mortgage secured by real property subject to the minerals production tax of
sections 298.24 to 298.28.
(f) The principal amount of a mortgage loan made under a low and moderate
income or other affordable housing program, if the mortgagee is a federal, state, or local
government agency.
(g) Mortgages granted by fraternal benefit societies subject to section 64B.24.
(h) A mortgage amendment or extension, as defined in section 287.01.
(i) An agricultural mortgage if the proceeds of the loan secured by the mortgage are
used to acquire or improve real property classified under section 273.13, subdivision 23,
paragraph (a), or (b), clause (1), (2), or (3).
(j) A mortgage on an armory building as set forth in section 193.147.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2008, section 287.05, is amended by adding a subdivision
to read:
    Subd. 9. Modification of mortgage. If a mortgage, or a document modifying a
mortgage, contains more than one statement that purports to limit: the enforcement of
the mortgage to a certain dollar amount; the tax imposed on the mortgage under this
chapter; or the effect of a modifying document, including but not limited to the statements
authorized in subdivisions 1, 1a, and 8, then the tax must be imposed based on the
combined effect, if any, of all the statements.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2008, section 287.22, is amended to read:
287.22 EXEMPTIONS.
    The tax imposed by section 287.21 does not apply to:
    (1) an executory contract for the sale of real property under which the purchaser is
entitled to or does take possession of the real property, or any assignment or cancellation
of the contract;
    (2) a mortgage or an amendment, assignment, extension, partial release, or
satisfaction of a mortgage;
    (3) a will;
    (4) a plat;
    (5) a lease, amendment of lease, assignment of lease, or memorandum of lease;
    (6) a deed, instrument, or writing in which the United States or any agency or
instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee;
    (7) a deed for a cemetery lot or lots;
    (8) a deed of distribution by a personal representative;
    (9) a deed to or from a co-owner partitioning their undivided interest in the same
piece of real property;
    (10) a deed or other instrument of conveyance issued pursuant to a permanent school
fund land exchange under section 92.121 and related laws;
    (11) a referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale;
    (12) a referee's, sheriff's, or certificate holder's certificate of redemption from a
mortgage or lien foreclosure sale issued under section 580.23 or other statute applicable to
redemption by an owner of real property;
    (13) a deed, instrument, or writing which grants, creates, modifies, or terminates
an easement;
    (14) a decree of marriage dissolution, as defined in section 287.01, subdivision 4,
or a deed or other instrument between the parties to the dissolution made pursuant to the
terms of the decree; and
    (15) a transfer on death deed under section 507.071, and any affidavit or other
document to the extent it references a transfer on death deed.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2008, section 287.25, is amended to read:
287.25 PAYMENT OF TAX; STAMPS.
    Except for documents filed electronically, the county board shall determine the
method for collection of the tax imposed by section 287.21:
    (1) The tax imposed by section 287.21 may be paid by the affixing of a documentary
stamp or stamps in the amount of the tax to the document or instrument with respect to
which the tax is paid, provided that the county board may permit the payment of the
tax without the affixing of the documentary stamps and in such cases shall direct the
treasurer to endorse a receipt for such tax upon the face of the document or instrument.
Documents submitted electronically must have the deed tax data affixed electronically and
the tax paid as provided in section 287.08.
    (2) the tax imposed by section 287.21 may must be paid in the manner prescribed by
section 287.08 relating to payment of mortgage registration tax, and the treasurer must
endorse a receipt for the tax on the face of the document or instrument.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2008, section 295.56, is amended to read:
295.56 TRANSFER OF ACCOUNTS RECEIVABLE.
When a hospital or, surgical center, health care provider, or wholesale drug
distributor transfers, assigns, or sells accounts receivable to another person who is subject
to tax under this chapter, liability for the tax on the accounts receivable is imposed on the
transferee, assignee, or buyer of the accounts receivable. No liability for these accounts
receivable is imposed on the transferor, assignor, or seller of the accounts receivable.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2008, section 295.57, subdivision 5, is amended to read:
    Subd. 5. Exemption for amounts paid for legend drugs. If a hospital, surgical
center, or health care provider cannot determine the actual cost or reimbursement of
legend drugs under the exemption provided in section 295.53, subdivision 1, paragraph
(a), clause (6) (5), the following method must be used:
A hospital, surgical center, or health care provider must determine the amount paid
for legend drugs used during the month or quarter and multiply that amount by a ratio,
the numerator of which is the total amount received for taxable patient services, and the
denominator of which is the total amount received for all patient services, including
amounts exempt under section 295.53, subdivision 1. The result represents the allowable
exemption for the monthly or quarterly cost of drugs.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2008, section 296A.21, subdivision 1, is amended to read:
    Subdivision 1. General rules. (a) The commissioner shall make determinations,
corrections, assessments, and refunds with respect to taxes and fees under this chapter,
including interest, additions to taxes, and assessable penalties. Except as otherwise
provided in this section, the amount of taxes assessable must be assessed within 3-1/2
years after the date the return is filed. For purposes of this section, a tax return filed before
the last day prescribed by law for filing is considered to be filed on the last day.
(b) A claim for a refund of an overpayment of state tax or fees must be filed within
3-1/2 years from the date prescribed for filing the return, plus any extension of time
granted for filing the return, but only if filed within the extended time; or the claim must
be filed within one year from the date of an order assessing tax or fees, or from the date of
a return filed by the commissioner, upon payment in full of the tax, fees, penalties, and
interest shown on the order or return, whichever period expires later.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2008, section 297E.02, subdivision 4, is amended to read:
    Subd. 4. Pull-tab and tipboard tax. (a) A tax is imposed on the sale of each deal
of pull-tabs and tipboards sold by a distributor. The rate of the tax is 1.7 percent of the
ideal gross of the pull-tab or tipboard deal. The sales tax imposed by chapter 297A on the
sale of the pull-tabs and tipboards by the distributor is imposed on the retail sales price
less the tax imposed by this subdivision. The retail sale of pull-tabs or tipboards by the
organization is exempt from taxes imposed by chapter 297A and is exempt from all local
taxes and license fees except a fee authorized under section 349.16, subdivision 8.
(b) The liability for the tax imposed by this section is incurred when the pull-tabs
and tipboards are delivered by the distributor to the customer or to a common or contract
carrier for delivery to the customer, or when received by the customer's authorized
representative at the distributor's place of business, regardless of the distributor's method
of accounting or the terms of the sale.
The tax imposed by this subdivision is imposed on all sales of pull-tabs and
tipboards, except the following:
(1) sales to the governing body of an Indian tribal organization for use on an Indian
reservation;
(2) sales to distributors licensed under the laws of another state or of a province of
Canada, as long as all statutory and regulatory requirements are met in the other state or
province;
(3) sales of promotional tickets as defined in section 349.12; and
(4) pull-tabs and tipboards sold to an organization that sells pull-tabs and tipboards
under the exemption from licensing in section 349.166, subdivision 2. A distributor shall
require an organization conducting exempt gambling to show proof of its exempt status
before making a tax-exempt sale of pull-tabs or tipboards to the organization. A distributor
shall identify, on all reports submitted to the commissioner, all sales of pull-tabs and
tipboards that are exempt from tax under this subdivision.
(c) A distributor having a liability of $120,000 $10,000 or more during a fiscal year
ending June 30 must remit all liabilities in the subsequent calendar year by electronic
means.
(d) Any customer who purchases deals of pull-tabs or tipboards from a distributor
may file an annual claim for a refund or credit of taxes paid pursuant to this subdivision
for unsold pull-tab and tipboard tickets. The claim must be filed with the commissioner on
a form prescribed by the commissioner by March 20 of the year following the calendar
year for which the refund is claimed. The refund must be filed as part of the customer's
February monthly return. The refund or credit is equal to 1.7 percent of the face value
of the unsold pull-tab or tipboard tickets, provided that the refund or credit will be 1.75
percent of the face value of the unsold pull-tab or tipboard tickets for claims for a refund
or credit of taxes filed on the February 2001 monthly return. The refund claimed will be
applied as a credit against tax owing under this chapter on the February monthly return. If
the refund claimed exceeds the tax owing on the February monthly return, that amount
will be refunded. The amount refunded will bear interest pursuant to section 270C.405
from 90 days after the claim is filed.
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. 9. Minnesota Statutes 2008, section 297E.06, is amended by adding a subdivision
to read:
    Subd. 1a. Required signatures. The gambling manager and the chief executive
officer of the organization, or their respective designees, and the person who completed
the tax return must sign the tax return. The organization shall inform the commissioner of
revenue in writing of the identity of the designees as soon as practicable in the form and
manner prescribed by the commissioner.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2008, section 297E.11, subdivision 1, is amended to read:
    Subdivision 1. General rule. Except as otherwise provided in this chapter, the
amount of taxes assessable must be assessed within 3-1/2 years after the return is filed,
whether or not the return is filed on or after the date prescribed. A return must not be
treated as filed until it is in processible form. A return is in processible form if it is filed
on a permitted form and contains sufficient data to identify the taxpayer and permit the
mathematical verification of the tax liability shown on the return. For purposes of this
section, a tax return filed before the last day prescribed by law for filing is considered to
be filed on the last day.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2008, section 297F.09, subdivision 7, is amended to read:
    Subd. 7. Electronic payment. A cigarette or tobacco products distributor having a
liability of $120,000 $10,000 or more during a fiscal year ending June 30 must remit all
liabilities in the subsequent calendar year 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. 12. Minnesota Statutes 2008, section 297G.09, subdivision 6, is amended to read:
    Subd. 6. Electronic payments. A licensed brewer, importer, or wholesaler having
an excise tax liability of $120,000 $10,000 or more during a fiscal year ending June 30
must remit all excise tax liabilities in the subsequent calendar year 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. 13. Minnesota Statutes 2008, section 297I.30, is amended by adding a subdivision
to read:
    Subd. 9. Extensions for filing returns. When, in the commissioner's judgment,
good cause exists, the commissioner may extend the time for filing returns for not more
than six months.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2008, 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 year is equal to or exceeds $120,000 $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. 15. Minnesota Statutes 2008, section 298.28, subdivision 11, is amended to read:
    Subd. 11. Remainder. (a) The proceeds of the tax imposed by section 298.24
which remain after the distributions and payments in subdivisions 2 to 10a, as certified
by the commissioner of revenue, and paragraphs (b), (c), and (d), and (e) have been
made, together with interest earned on all money distributed under this section prior to
distribution, shall be divided between the taconite environmental protection fund created
in section 298.223 and the Douglas J. Johnson economic protection trust fund created in
section 298.292 as follows: Two-thirds to the taconite environmental protection fund and
one-third to the Douglas J. Johnson economic protection trust fund. The proceeds shall be
placed in the respective special accounts.
(b) There shall be distributed to each city, town, and county the amount that it
received under section 294.26 in calendar year 1977; provided, however, that the amount
distributed in 1981 to the unorganized territory number 2 of Lake County and the town
of Beaver Bay based on the between-terminal trackage of Erie Mining Company will be
distributed in 1982 and subsequent years to the unorganized territory number 2 of Lake
County and the towns of Beaver Bay and Stony River based on the miles of track of Erie
Mining Company in each taxing district.
(c) There shall be distributed to the Iron Range Resources and Rehabilitation Board
the amounts it received in 1977 under section 298.22. The amount distributed under
this paragraph shall be expended within or for the benefit of the taconite assistance area
defined in section 273.1341.
(d) There shall be distributed to each school district 62 percent of the amount that it
received under section 294.26 in calendar year 1977.
(e) In 2003 only, $100,000 must be distributed to a township located in a taconite
tax relief area as defined in section 273.134, paragraph (a), that received $119,259 of
homestead and agricultural credit aid and $182,014 in local government aid in 2001.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 16. Minnesota Statutes 2008, section 473.843, subdivision 3, is amended to read:
    Subd. 3. Payment of fee. On or before the 20th day of each month each operator
shall pay the fee due under this section for the previous month, using a form provided
by the commissioner of revenue.
An operator having a fee of $120,000 $10,000 or more during a fiscal year ending
June 30 must pay all fees in the subsequent calendar year 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. 17. REPEALER.
Minnesota Statutes 2008, sections 287.26; 287.27, subdivision 1; and 298.28,
subdivisions 11a and 13, are repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 10
DEPARTMENT PROPERTY TAXES AND AIDS

    Section 1. Minnesota Statutes 2008, section 273.1115, subdivision 2, is amended to
read:
    Subd. 2. Requirement. Real estate is entitled to valuation under this section only if
all of the following requirements are met:
    (1) the property is classified as class 1a, 1b, 2a, or 2b property under section 273.13,
subdivisions 22 and 23, or the property is classified as class 2e under section 273.13,
subdivision 23, and immediately before being classified as class 2e was classified as
class 1a or 1b;
    (2) the property is at least ten contiguous acres, when the application is filed under
subdivision 3;
    (3) the owner has filed a completed application for deferment as specified in
subdivision 3 with the county assessor in the county in which the property is located;
    (4) there are no delinquent taxes on the property; and
    (5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 2. Minnesota Statutes 2008, section 273.1231, subdivision 8, is amended to read:
    Subd. 8. Utility property. "Utility property" means property appraised and
classified for tax purposes by order of the commissioner of revenue under sections 273.33
to 273.3711.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2008, section 273.124, subdivision 3, is amended to read:
    Subd. 3. Cooperatives and charitable corporations; homestead and other
property. (a) When property 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 building on the property, or a unit within a building
on the property, the corporation or association may claim homestead treatment for each
dwelling, or for each unit in the case of a building containing several dwelling units, or for
the part of the value of the building occupied by a shareholder. Each building or unit must
be designated by legal description or number. The net tax capacity of each building or
unit that qualifies for assessment as a homestead under this subdivision must include not
more than one-half acre of land, if platted, nor more than 80 acres if unplatted. The net
tax capacity of the property is the sum of the net tax capacities of each of the respective
buildings or units comprising the property, including the net tax capacity of each unit's
or building's proportionate share of the land and any common buildings. To qualify for
the treatment provided by this subdivision, the corporation or association must be wholly
owned by persons having a right to occupy a building or unit owned by the corporation
or association. A charitable corporation organized under the laws of Minnesota and not
otherwise exempt thereunder with no outstanding stock qualifies for homestead treatment
with respect to member residents of the dwelling units who have purchased and hold
residential participation warrants entitling them to occupy the units.
(b) To the extent provided in paragraph (a), a cooperative or corporation organized
under chapter 308A or 308B may obtain separate assessment and valuation, and separate
property tax statements for each residential homestead, residential nonhomestead, or for
each seasonal residential recreational building or unit not used for commercial purposes.
The appropriate class rates under section 273.13 shall be applicable as if each building or
unit were a separate tax parcel; provided, however, that the tax parcel which exists at the
time the cooperative or corporation makes application under this subdivision shall be a
single parcel for purposes of property taxes or the enforcement and collection thereof,
other than as provided in paragraph (a) or this paragraph.
(c) A member of a corporation or association may initially obtain the separate
assessment and valuation and separate property tax statements, as provided in paragraph
(b), by applying to the assessor by June 30 of the assessment year.
(d) When a building, or dwelling units within a building, no longer qualify under
paragraph (a) or (b), the current owner must notify the assessor within 30 days. Failure to
notify the assessor within 30 days shall result in the loss of benefits under paragraph (a) or
(b) for taxes payable in the year that the failure is discovered. For these purposes, "benefits
under paragraph (a) or (b)" means the difference in the net tax capacity of the building or
units which no longer qualify as computed under paragraph (a) or (b) and as computed
under the otherwise applicable law, times the local tax rate applicable to the building for
that taxes payable year. Upon discovery of a failure to notify, the assessor shall inform the
auditor of the difference in net tax capacity for the building or buildings in which units no
longer qualify, and the auditor shall calculate the benefits under paragraph (a) or (b). Such
amount, plus a penalty equal to 100 percent of that amount, shall then be demanded of the
building's owner. The property owner may appeal the county's determination by serving
copies of a petition for review with county officials as provided in section 278.01 and
filing a proof of service as provided in section 278.01 with the Minnesota Tax Court within
60 days of the date of the notice from the county. The appeal shall be governed by the Tax
Court procedures provided in chapter 271, for cases relating to the tax laws as defined in
section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and 278.03,
but including section 278.05, subdivision 2. If the amount of the benefits under paragraph
(a) or (b) and penalty are not paid within 60 days, and if no appeal has been filed, the
county auditor shall certify the amount of the benefit and penalty to the succeeding year's
tax list to be collected as part of the property taxes on the affected property.

    Sec. 4. Minnesota Statutes 2008, section 273.124, subdivision 3a, is amended to read:
    Subd. 3a. Manufactured home park cooperative. 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. 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. The manufactured home park shall be valued and assessed as if it were
homestead property within class 1 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 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; and
(3) 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.
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
manufactured home park who hold residential participation warrants entitling them to
occupy a lot in the manufactured home park.

    Sec. 5. Minnesota Statutes 2008, section 273.124, subdivision 21, is amended to read:
    Subd. 21. Trust property; homestead. Real or personal property held by a trustee
under a trust is eligible for classification as homestead property if: the property satisfies
the requirements of paragraph (a), (b), (c), or (d).
    (1) (a) The grantor or surviving spouse of the grantor of the trust occupies and
uses the property as a homestead;.
    (2) (b) A relative or surviving relative of the grantor who meets the requirements
of subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1,
paragraph (d), in the case of agricultural property, occupies and uses the property as
a homestead;.
    (3) (c) A family farm corporation, joint farm venture, limited liability company, or
partnership operating a family farm in which the grantor or the grantor's surviving spouse
is a shareholder, member, or partner rents the property,; and, either (1) a shareholder,
member, or partner of the corporation, joint farm venture, limited liability company, or
partnership occupies and uses the property as a homestead,; or is actively farming (2) the
property is at least 40 acres, including undivided government lots and correctional 40's, and
a shareholder, member, or partner of the tenant-entity is actively farming the property on
behalf of the corporation, joint farm venture, limited liability company, or partnership; or.
    (4) (d) A person who has received homestead classification for property taxes
payable in 2000 on the basis of an unqualified legal right under the terms of the trust
agreement to occupy the property as that person's homestead and who continues to use the
property as a homestead; or, a person who received the homestead classification for taxes
payable in 2005 under clause (3) paragraph (c) who does not qualify under clause (3)
paragraph (c) for taxes payable in 2006 or thereafter but who continues to qualify under
clause (3) paragraph (c) as it existed for taxes payable in 2005.
    For purposes of this subdivision, "grantor" is defined as the person creating or
establishing a testamentary, inter Vivos, revocable or irrevocable trust by written
instrument or through the exercise of a power of appointment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2008, 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 may contain property that would otherwise be classified as 2b, including but not
limited to sloughs, wooded wind shelters, acreage abutting ditches, and other similar land
impractical for the assessor to value 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 to receive the reduced class 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 if the boarding is done in conjunction with
raising or cultivating 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.
    (k) (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.
    (l) (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.
    (m) (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, are exempt from the rulemaking provisions of chapter 14, and the provisions
in section 14.386 concerning exempt rules do not apply.
EFFECTIVE DATE.The section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2008, 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), or subdivision 23, paragraph
(b), clause (1), 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 that is not used for residential
purposes on either a temporary or permanent basis, qualifies for class 4c provided that
it meets either of the following:
    (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) which is used for
revenue-producing activities for more than six days in the calendar year preceding the
year of assessment shall be assessed as 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) manufactured home parks as defined in section 327.14, subdivision 3;
    (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; and
    (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.
    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) have the same class rate as class 4b property, (iii) commercial-use seasonal
residential recreational property 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 the day following final enactment.

    Sec. 8. Minnesota Statutes 2008, section 273.13, subdivision 33, is amended to read:
    Subd. 33. Classification of unimproved property. (a) All real property that is not
improved with a structure must be classified according to its current use.
    (b) Except as provided in subdivision 23, paragraph (c) or (d), real property that is
not improved with a structure and for which there is no identifiable current use must be
classified according to its highest and best use permitted under the local zoning ordinance.
If the ordinance permits more than one use, the land must be classified according to the
highest and best use permitted under the ordinance. If no such ordinance exists, the
assessor shall consider the most likely potential use of the unimproved land based upon
the use made of surrounding land or land in proximity to the unimproved land.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2008, section 273.33, subdivision 2, is amended to read:
    Subd. 2. Listing and assessment by commissioner. The personal property,
consisting of the pipeline system of mains, pipes, and equipment attached thereto, of
pipeline companies and others engaged in the operations or business of transporting natural
gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed with and
assessed by the commissioner of revenue and the values provided to the city or county
assessor by order. This subdivision shall not apply to the assessment of the products
transported through the pipelines nor to the lines of local commercial gas companies
engaged primarily in the business of distributing gas to consumers at retail nor to pipelines
used by the owner thereof to supply natural gas or other petroleum products exclusively
for such owner's own consumption and not for resale to others. If more than 85 percent
of the natural gas or other petroleum products actually transported over the pipeline is
used for the owner's own consumption and not for resale to others, then this subdivision
shall not apply; provided, however, that in that event, the pipeline shall be assessed in
proportion to the percentage of gas actually transported over such pipeline that is not used
for the owner's own consumption. On or before June 30 August 1, the commissioner shall
certify to the auditor of each county, the amount of such personal property assessment
against each company in each district in which such property is located.
EFFECTIVE DATE.This section is effective for assessment year 2009 and
thereafter.

    Sec. 10. Minnesota Statutes 2008, section 273.37, subdivision 2, is amended to read:
    Subd. 2. Listing and assessment by commissioner. Transmission lines of less
than 69 kv, transmission lines of 69 kv and above located in an unorganized township,
and distribution lines, and equipment attached thereto, having a fixed situs outside the
corporate limits of cities except distribution lines taxed as provided in sections 273.40 and
273.41, shall be listed with and assessed by the commissioner of revenue in the county
where situated and the values provided to the city or county assessor by order. The
commissioner shall assess such property at the percentage of market value fixed by law;
and, on or before June 30 August 1, shall certify to the auditor of each county in which
such property is located the amount of the assessment made against each company and
person owning such property.
EFFECTIVE DATE.This section is effective for assessment year 2009 and
thereafter.

    Sec. 11. Minnesota Statutes 2008, section 274.13, subdivision 2, is amended to read:
    Subd. 2. Special board; delegated duties. The board of equalization for any
county may appoint a special board of equalization and may delegate to it the powers and
duties in subdivision 1. The special board of equalization shall serve at the direction and
discretion of the appointing county board, subject to the restrictions imposed by law on
the appointing board. The appointing board may determine the number of members to be
appointed to the special board, the compensation and expenses to be paid, and the term of
office of each member. At least one member of the special board of equalization must be
an appraiser, realtor, or other person familiar with property valuations in the county. The
county auditor is a nonvoting member and serves as the recorder for the special board.
The special board is subject to the quorum requirements for county boards and the training
requirements for county boards in section 274.135, subdivision 2.
EFFECTIVE DATE.The section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2008, section 274.135, subdivision 3, is amended to read:
    Subd. 3. Proof of compliance; transfer of duties. (a) Any county that
conducts county boards of appeal and equalization meetings must provide proof to the
commissioner by December 1, 2009, and each year thereafter, that it is in compliance
with the requirements of subdivision 2. Beginning in 2009, this notice must also verify
that there was a quorum of voting members at each meeting of the board of appeal and
equalization in the current year. A county that does not comply with these requirements
is deemed to have transferred its board of appeal and equalization powers to the special
board of equalization appointed pursuant to section 274.13, subdivision 2, beginning
with the following year's assessment and continuing unless the powers are reinstated
under paragraph (c). A county that does not comply with the requirements of subdivision
2 and has not appointed a special board of equalization shall appoint a special board of
equalization before the following year's assessment.
    (b) The county shall notify the taxpayers when the board of appeal and equalization
for a county has been transferred to the special board of equalization under this subdivision
and, prior to the meeting time of the special board of equalization, the county shall make
available to those taxpayers a procedure for a review of the assessments, including, but
not limited to, open book meetings. This alternate review process must take place in
April and May.
    (c) A county board whose powers are transferred to the special board of equalization
under this subdivision may be reinstated by resolution of the county board and upon proof
of compliance with the requirements of subdivision 2. The resolution and proofs must be
provided to the commissioner by December 1 in order to be effective for the following
year's assessment.
(d) If a person who was entitled to appeal to the county board of appeal and
equalization or to the county special board of equalization is not able to do so in a
particular year because the county board or special board did not meet the quorum and
training requirements in this section and section 274.13, or because the special board
was not appointed, that person may instead appeal to the commissioner of revenue,
provided that the appeal is received by the commissioner prior to August 1. The appeal
is not subject to either chapter 14 or section 270C.92. The commissioner must issue
an appropriate order to the county assessor in response to each timely appeal, either
upholding or changing the valuation or classification of the property. Prior to October 1 of
each year, the commissioner must charge and bill the county where the property is located
$500 for each tax parcel covered by an order issued under this paragraph in that year.
Amounts received by the commissioner under this paragraph must be deposited in the
state's general fund. If payment of a billed amount is not received by the commissioner
before December 1 of the year when billed, the commissioner must deduct that unpaid
amount from any state aid the commissioner would otherwise pay to the county under
chapter 477A in the next year. Late payments may either be returned to the county
uncashed and undeposited or may be accepted. If a late payment is accepted, the state aid
paid to the county under chapter 477A must be adjusted within 12 months to eliminate any
reduction that occurred because the payment was late. Amounts needed to make these
adjustments are included in the appropriation under section 477A.03, subdivision 2.
EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
thereafter.

    Sec. 13. Minnesota Statutes 2008, section 274.14, is amended to read:
274.14 LENGTH OF SESSION; RECORD.
    The board may must meet on any after the second Friday in June on at least one
meeting day and may meet for up to ten consecutive meeting days in June, after the
second Friday in June. The actual meeting dates must be contained on the valuation
notices mailed to each property owner in the county as provided in section 273.121. For
this purpose, "meeting days" is defined as any day of the week excluding Sunday. At
the board's discretion, "meeting days" may include Saturday. No action taken by the
county board of review after June 30 is valid, except for corrections permitted in sections
273.01 and 274.01. The county auditor shall keep an accurate record of the proceedings
and orders of the board. The record must be published like other proceedings of county
commissioners. A copy of the published record must be sent to the commissioner of
revenue, with the abstract of assessment required by section 274.16.
    For counties that conduct either regular board of review meetings or open book
meetings, at least one of the meeting days must include a meeting that does not end
before 7:00 p.m. For counties that require taxpayer appointments for the board of review,
appointments must include some available times that extend until at least 7:00 p.m. The
county may have a Saturday meeting in lieu of, or in addition to, the extended meeting
times under this paragraph.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2008, section 274.175, is amended to read:
274.175 VALUES FINALIZED.
The assessments recorded by the county assessor and the county auditor under
sections 273.124, subdivision 9; 274.16; 274.17; or other law for real and personal
property are final on July 1 of the assessment year, except for property added to the
assessment rolls under section 272.02, subdivision 38, and assessments certified to the
auditor under sections 273.33, subdivision 2, and 273.37, subdivision 2, or deleted
because of tax forfeiture pursuant to chapter 281. No changes in value may be made
after July 1 of the assessment year, except for corrections permitted in sections 273.01
and 274.01, or assessments certified to the auditor under sections 273.33, subdivision 2,
and 273.37, subdivision 2.
EFFECTIVE DATE.This section is effective for assessment year 2009 and
thereafter.

    Sec. 15. Minnesota Statutes 2008, section 290C.06, is amended to read:
290C.06 CALCULATION OF AVERAGE ESTIMATED MARKET VALUE;
TIMBERLAND MANAGED FOREST LAND.
The commissioner shall annually calculate a statewide average estimated market
value per acre for class 2b timberland 2c managed forest land under section 273.13,
subdivision 23
, paragraph (b).
EFFECTIVE DATE.This section is effective for calculations made in 2010 and
thereafter.

    Sec. 16. Minnesota Statutes 2008, section 290C.07, is amended to read:
290C.07 CALCULATION OF INCENTIVE PAYMENT.
    An approved claimant under the sustainable forest incentive program is eligible to
receive an annual payment. The payment shall equal the greater of:
    (1) the difference between the property tax that would be paid on the land using the
previous year's statewide average total township tax rate and the a class rate for class 2b
timberland under section 273.13, subdivision 23, paragraph (b) of one percent, if the land
were valued at (i) the average statewide timberland managed forest land market value per
acre calculated under section 290C.06, and (ii) the average statewide timberland managed
forest land current use value per acre calculated under section 290C.02, subdivision 5; or
    (2) two-thirds of the property tax amount determined by using the previous
year's statewide average total township tax rate, the estimated market value per acre as
calculated in section 290C.06, and the a class rate for 2b timberland under section 273.13,
subdivision 23
, paragraph (b) of one percent, provided that the payment shall be no less
than $7 per acre for each acre enrolled in the sustainable forest incentive program.
EFFECTIVE DATE.This section is effective for calculations made in 2010 and
thereafter.

    Sec. 17. Minnesota Statutes 2008, section 477A.011, subdivision 34, is amended to
read:
    Subd. 34. City revenue need. (a) For a city with a population equal to or greater
than 2,500, "city revenue need" is the greater of 285 or the sum of (1) 5.0734098 times the
pre-1940 housing percentage; plus (2) 19.141678 times the population decline percentage;
plus (3) 2504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the
metropolitan area factor; minus (6) 49.10638 times the household size.
    (b) For a city with a population less than 2,500, "city revenue need" is the sum of
(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
1.206 times the transformed population; minus (5) 62.772.
    (c) For a city with a population of 2,500 or more and a population in one of the most
recently available five years that was less than 2,500, "city revenue need" is the sum of (1)
its city revenue need calculated under paragraph (a) multiplied by its transition factor;
plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied
by the difference between one and its transition factor. For purposes of this paragraph, a
city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's
population estimate has been 2,500 or more. This provision only applies for aids payable
in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It
applies to any city for aids payable in 2009 and thereafter. The city revenue need under
this paragraph may not be less than 285.
    (d) The city revenue need cannot be less than zero.
    (e) For calendar year 2005 and subsequent years, the city revenue need for a city,
as determined in paragraphs (a) to (d), is multiplied by the ratio of the annual implicit
price deflator for government consumption expenditures and gross investment for state
and local governments as prepared by the United States Department of Commerce, for
the most recently available year to the 2003 implicit price deflator for state and local
government purchases.
EFFECTIVE DATE.This section is effective for aids payable in 2009 and
thereafter.

    Sec. 18. Minnesota Statutes 2008, section 477A.011, subdivision 42, is amended to
read:
    Subd. 42. City jobs base. (a) "City jobs base" for a city with a population of 5,000 or
more is equal to the product of (1) $25.20, (2) the number of jobs per capita in the city, and
(3) its population. For cities with a population less than 5,000, the city jobs base is equal
to zero. For a city receiving aid under subdivision 36, paragraph (l) (k), its city jobs base
is reduced by the lesser of 36 percent of the amount of aid received under that paragraph
or $1,000,000. No city's city jobs base may exceed $4,725,000 under this paragraph.
    (b) For calendar year 2010 and subsequent years, the city jobs base for a city, as
determined in paragraph (a), is multiplied by the ratio of the appropriation under section
477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under
that section for aids payable in 2009.
    (c) For purposes of this subdivision, "jobs per capita in the city" means (1) the
average annual number of employees in the city based on the data from the Quarterly
Census of Employment and Wages, as reported by the Department of Employment and
Economic Development, for the most recent calendar year available as of May 1, 2008,
divided by (2) the city's population for the same calendar year as the employment data.
The commissioner of the Department of Employment and Economic Development shall
certify to the city the average annual number of employees for each city by June 1, 2008.
A city may challenge an estimate under this paragraph by filing its specific objection,
including the names of employers that it feels may have misreported data, in writing with
the commissioner by June 20, 2008. The commissioner shall make every reasonable effort
to address the specific objection and adjust the data as necessary. The commissioner shall
certify the estimates of the annual employment to the commissioner of revenue by July 15,
2008, including any estimates still under objection.
EFFECTIVE DATE.This section is effective for aids payable in 2009 and
thereafter.

    Sec. 19. Minnesota Statutes 2008, 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.
EFFECTIVE DATE.This section is effective for assessment year 2009 and
thereafter.

    Sec. 20. REPEALER.
Minnesota Rules, parts 8115.0200; 8115.0300; 8115.0400; 8115.0500; 8115.0600;
8115.1000; 8115.1100; 8115.1200; 8115.1300; 8115.1400; 8115.1500; 8115.1600;
8115.1700; 8115.1800; 8115.1900; 8115.2000; 8115.2100; 8115.2200; 8115.2300;
8115.2400; 8115.2500; 8115.2600; 8115.2700; 8115.2800; 8115.2900; 8115.3000;
8115.4000; 8115.4100; 8115.4200; 8115.4300; 8115.4400; 8115.4500; 8115.4600;
8115.4700; 8115.4800; 8115.4900; 8115.5000; 8115.5100; 8115.5200; 8115.5300;
8115.5400; 8115.5500; 8115.5600; 8115.5700; 8115.5800; 8115.5900; 8115.6000;
8115.6100; 8115.6200; 8115.6300; 8115.6400; and 8115.9900; are repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 11
DEPARTMENT MISCELLANEOUS

    Section 1. Minnesota Statutes 2008, section 270B.14, subdivision 16, is amended to
read:
    Subd. 16. Disclosure to law enforcement authorities. Under circumstances
involving threat of death or physical injury to any individual, or harassment of a
Department of Revenue employee, the commissioner may disclose return information
to the extent necessary to apprise appropriate federal, state, or local law enforcement
authorities of such circumstances. For purposes of this subdivision, "harassment" is
purposeful conduct directed at an individual and causing an individual to feel frightened,
threatened, oppressed, persecuted, or intimidated. For purposes of harassment, the return
information that initially can be disclosed is limited to the name, address, and phone
number of the harassing individual, the name of the employee being harassed, and the
nature and circumstances of the harassment. Data disclosed under this subdivision are
classified under section 13.82 once they are received by the law enforcement authority.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2008, section 270C.12, is amended by adding a subdivision
to read:
    Subd. 5. Duration. Notwithstanding the provisions of any statutes to the contrary,
including section 15.059, the coordinating committee as established by this section to
oversee and coordinate preparation of the microdata samples of income tax returns and
other information shall not expire.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2008, section 270C.446, subdivision 2, is amended to read:
    Subd. 2. Required and excluded tax preparers. (a) Subject to the limitations of
paragraph (b), the commissioner must publish lists of tax preparers as defined in section
289A.60, subdivision 13, paragraph (f), who have been convicted under section 289A.63
for returns or claims prepared as a tax preparer or assessed penalties in excess of $1,000
under section 289A.60, subdivision 13, paragraph (a).
    (b) For the purposes of this section, tax preparers are not subject to publication if:
    (1) an administrative or court action contesting the penalty has been filed or served
and is unresolved at the time when notice would be given under subdivision 3;
    (2) an appeal period to contest the penalty has not expired; or
    (3) the commissioner has been notified that the tax preparer is deceased.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2008, section 270C.446, subdivision 5, is amended to read:
    Subd. 5. Removal from list. The commissioner shall remove the name of a tax
preparer from the list of tax preparers published under this section:
(1) when the commissioner determines that the name was included on the list in error;
(2) within 90 days after the preparer has demonstrated to the commissioner that
the preparer fully paid all fines imposed, served any suspension, satisfied any sentence
imposed, and demonstrated to the satisfaction of the commissioner that the preparer has
successfully completed any remedial actions required by the commissioner, the State
Board of Accountancy, or the Lawyers Board of Professional Responsibility; or
(3) when the commissioner has been notified that the tax preparer is deceased.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2008, section 270C.56, subdivision 1, is amended to read:
    Subdivision 1. Liability imposed. A person who, either singly or jointly with
others, has the control of, supervision of, or responsibility for filing returns or reports,
paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
person who is liable under any other law, is liable for the payment of taxes, penalties, and
interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658,
290.92,
and 297E.02, and, for the taxes listed in this subdivision, the applicable penalties
for nonpayment under section 289A.60 and interest on those taxes.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2008, section 289A.41, is amended to read:
289A.41 BANKRUPTCY; SUSPENSION OF TIME.
The running of the period during which a tax must be assessed or collection
proceedings commenced is suspended during the period from the date of a filing of a
petition in bankruptcy until 30 days after either notice to the commissioner of revenue that
the bankruptcy proceedings have been closed or dismissed, or notice that the automatic
stay has been terminated or has expired, whichever occurs first.
The suspension of the statute of limitations under this section applies to the person
the petition in bankruptcy is filed against and other persons who may also be wholly or
partially liable for the tax.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 12
MISCELLANEOUS

    Section 1. Minnesota Statutes 2008, section 270C.445, is amended to read:
270C.445 TAX PREPARATION SERVICES.
    Subdivision 1. Scope. This section applies to a person who provides tax preparation
services., except:
(1) a person who provides tax preparation services for fewer than ten clients in a
calendar year;
(2) a person who provides tax preparation services only to immediate family
members. For the purposes of this section, "immediate family members" means a spouse,
parent, grandparent, child, or sibling;
(3) an employee who prepares a tax return for an employer's business;
(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of
the fiduciary estate, testator, trustor, grantor, or beneficiaries of them; and
(5) nonprofit organizations providing tax preparation services under the Internal
Revenue Service Volunteer Income Tax Assistance Program or Tax Counseling for the
Elderly Program.
    Subd. 2. Definitions. (a) For purposes of this section, the following terms have
the meanings given.
(b) "Client" means an individual for whom a tax preparer performs or agrees to
perform tax preparation services.
(c) "Person" means an individual, corporation, partnership, limited liability
company, association, trustee, or other legal entity.
(d) "Refund anticipation loan" means a loan or any other extension of credit, whether
provided by the tax preparer or another entity such as a financial institution, in anticipation
of, and whose payment is secured by, a client's federal or state income tax refund or both.
(e) "Tax preparation services" means services provided for a fee or other
consideration to a client to:
(1) assist with preparing or filing state or federal individual income tax returns;
(2) assume final responsibility for completed work on an individual income tax
return on which preliminary work has been done by another; or
(3) offer or facilitate the provision of refund anticipation loans and refund
anticipation checks.
(f) "Tax preparer" or "preparer" means a person providing tax preparation services
subject to this section.
(g) "Advertise" means to solicit business through any means or medium.
(h) "Facilitate" means to individually or in conjunction or cooperation with another
person:
(1) accept an application for a refund anticipation loan;
(2) pay to a client the proceeds, through direct deposit, a negotiable instrument, or
any other means, of a refund anticipation loan; or
(3) offer, arrange, process, provide, or in any other manner act to allow the making
of, a refund anticipation loan.
(i) "Refund anticipation check" means a negotiable instrument provided to a client
by the tax preparer or another person, which is issued from the proceeds of a taxpayer's
federal or state income tax refund or both and represents the net of the refund minus the tax
preparation fee and any other fees. A refund anticipation check includes a refund transfer.
    Subd. 3. Standards of conduct. No tax preparer shall:
(1) without good cause fail to promptly, diligently, and without unreasonable delay
complete a client's tax return;
(2) obtain the signature of a client to a tax return or authorizing document that
contains blank spaces to be filled in after it has been signed;
(3) fail to sign a client's tax return when payment for services rendered has been
made;
(4) fail or refuse to give a client a copy of any document requiring the client's
signature within a reasonable time after the client signs the document;
(5) fail to retain for at least four years a copy of individual income tax returns;
(6) fail to maintain a confidential relationship between themselves and their with
clients or former clients;
(7) fail to take commercially reasonable measures to safeguard a client's nonpublic
personal information;
(8) make, authorize, publish, disseminate, circulate, or cause to make, either directly
or indirectly, any false, deceptive, or misleading statement or representation relating to or
in connection with the offering or provision of tax preparation services;
(9) require a client to enter into a loan arrangement in order to complete a tax return;
(10) claim credits or deductions on a client's tax return for which the tax preparer
knows or reasonably should know the taxpayer client does not qualify;
(11) charge, offer to accept, or accept a fee based upon a percentage of an anticipated
refund for tax preparation services;
(12) under any circumstances, withhold or fail to return to a client a document
provided by the client for use in preparing the client's tax return.;
(13) establish an account in the preparer's name to receive a client's refund through
a direct deposit or any other instrument unless the client's name is also on the account,
except that a taxpayer may assign the portion of a refund representing the Minnesota
education credit available under section 290.0674 to a bank account without the client's
name, as provided under section 290.0679;
(14) fail to act in the best interests of the client;
(15) fail to safeguard and account for any money handled for the client;
(16) fail to disclose all material facts of which the preparer has knowledge which
might reasonably affect the client's rights and interests;
(17) violate any provision of section 332.37;
(18) include any of the following in any document provided or signed in connection
with the provision of tax preparation services:
(i) a hold harmless clause;
(ii) a confession of judgment or a power of attorney to confess judgment against the
client or appear as the client in any judicial proceeding;
(iii) a waiver of the right to a jury trial, if applicable, in any action brought by or
against a debtor;
(iv) an assignment of or an order for payment of wages or other compensation for
services;
(v) a provision in which the client agrees not to assert any claim or defense otherwise
available;
(vi) a waiver of any provision of this section or a release of any obligation required
to be performed on the part of the tax preparer; or
(vii) a waiver of the right to injunctive, declaratory, or other equitable relief or
relief on a class basis; or
(19) if making, providing, or facilitating a refund anticipation loan, fail to provide all
disclosures required by the federal Truth in Lending Act, United States Code, title 15, in a
form that may be retained by the client.
    Subd. 3a. Written agreements required; refund anticipation loans and checks.
(a) All agreements to make, provide, or facilitate a refund anticipation loan or refund
anticipation check must be in writing. No agreement may include a provision that
directly or indirectly arranges for payment of or deduction from any portion of the refund
anticipation loan or refund anticipation check for check cashing, credit insurance, attorney
fees, or the collection of any debt owed to any party for any other good or service other
than a debt owed to the facilitator for the repayment of a refund anticipation loan and tax
preparation fees associated with the refund anticipation loan or refund anticipation check.
(b) If a written agreement contains a mandatory arbitration clause, the tax preparer
must provide a separate written notice to the client that:
(1) arbitration is the exclusive means of dispute resolution for any dispute about the
written agreement;
(2) the client has the right to affirmatively opt out of the arbitration clause within 30
days of entering into an agreement; and
(3) the client is not bound to arbitration if the claim or dispute involves a violation of
this section or the client invokes the remedies provided in subdivision 7.
The tax preparer must advise the client, both orally and in writing, of the process by
which the client may exercise the right to opt out of the mandatory arbitration clause.
    Subd. 4. Required disclosures; refund anticipation loans. (a) If Before or at the
same time a tax preparer offers to make or facilitate a refund anticipation loan to the
client, the preparer must make the disclosures in this subdivision. The disclosures must
be made before or at the same time the preparer offers the refund anticipation loan to the
client. subdivision 4a. Before or at the same time a tax preparer offers or facilitates a
refund anticipation check or refund transfer, the tax preparer must make the disclosures
in subdivision 4b.
(b) The disclosures must be provided to a client in a written notice on a single sheet
of paper, separate from any other document or writing.
(c) All required statements must be in capital and small font type fonts, in a
minimum of 14-point type, with at least a double space between each statement.
(d) The notice must be signed and dated by the tax preparer and the client.
(e) All required disclosures, notices, and statements must be provided in the client's
primary language, if the tax preparer advertises in that language.
(b) The tax preparer must provide to a client a written notice on a single sheet of
paper, separate from any other document or writing, containing:
(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters,
and in 28-point type stating "NOTICE";
(2) the following verbatim statements:
(i) "This is a loan. The annual percentage rate (APR), based on the estimated
payment period, is (fill in the estimated APR)."
(ii) "Your refund will be used to repay the loan. As a result, the amount of your
refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other
charges."
(iii) "You can get your refund in about two weeks if you file your return electronically
and have the Internal Revenue Service send your refund to your own bank account." and
(3) if the client is subject to additional interest when a refund is delayed, the
following verbatim statement must also be included in the notice: "If you choose to take
this loan and your refund is delayed, you may have to pay additional interest."
(c) All required statements must be in capital and small font type fonts, in a
minimum of 14-point type, with at least a double space between each line in the statement
and four spaces between each statement.
(d) The notice must be signed and dated by the tax preparer and the client.
    Subd. 4a. Refund anticipation loan disclosures. The disclosure required under
subdivision 4 for a refund anticipation loan must contain:
(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters,
and in 28-point type stating "NOTICE";
(2) the following verbatim statements:
(i) "This is a loan. This is not your refund. The annual percentage rate (APR), based
on the estimated payment period, is (fill in the estimated APR).";
(ii) "Your refund will be used to repay the loan. As a result, the amount of your
refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other
charges.";
(iii) "You have the right to cancel this transaction by returning the loan check or the
amount of the loan in cash within one business day after you get the loan."; and
(iv) "You can get your refund in about two weeks if you file your return electronically
and have the Internal Revenue Service send your refund to your own bank account."; and
(3) if the client is subject to additional interest when a refund is delayed, the
following verbatim statement must also be included in the notice: "If you choose to take
this loan and your refund is delayed, you may have to pay."
    Subd. 4b. Refund anticipation check disclosures. (a) The disclosure required
under subdivision 4 for a refund anticipation check must contain:
(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters,
and in 28-point type stating "NOTICE";
(2) the following verbatim statements:
(i) "You do not have to purchase a refund anticipation check (RAC) to get your tax
refund.";
(ii) "Generally the IRS can direct deposit your income tax refund to your personal
bank account within 8 to 15 days after the IRS accepts your tax return for processing.";
(iii) "If you choose to purchase a RAC, your tax return funds will generally be
made available to you within 8 to 15 days.";
(iv) "A RAC is not a loan.";
(v) "The cost of the RAC is $ (fill in dollar amount).";
(vi) "You can either pay for your RAC now or you can have it withheld from your
refund."; and
(vii) "The cost of your tax return is not any more or any less if you purchase a RAC."
(b) A tax preparer offering a refund anticipation check that uses a different product
name, including but not limited to refund transfer, must substitute the product name for
"RAC" in all the statements required under this subdivision.
    Subd. 5. Itemized bill required. A tax preparer must provide an itemized statement
of the charges for services, at least separately stating the charges for:
(1) return preparation; and
(2) providing or facilitating a refund anticipation loan.; and
(3) each fee associated with the provision of a refund anticipation check.
    Subd. 5a. Nongame wildlife checkoff. A tax preparer must give written notice of
the option to contribute to the nongame wildlife management account in section 290.431
to corporate clients that file an income tax return and to individual clients who file an
income tax return or property tax refund claim form. This notification must be included
with information sent to the client at the same time as the preliminary worksheets or other
documents used in preparing the client's return and must include a line for displaying
contributions.
    Subd. 5b. Right to rescind refund anticipation loan. (a) A client may rescind a
refund anticipation loan on or before the close of business on the next day of business
following execution of the loan agreement or receipt of the proceeds of the loan by (1)
providing written notification to the tax preparer of the rescission, and (2) either (i)
returning the original check issued for the loan, or (ii) tendering the amount of the loan
to the tax preparer.
(b) The tax preparer may charge a fee for rescinding a refund anticipation loan
only if an account has been established at a financial institution to electronically receive
the refund and the financial institution has charged a fee to establish the account. The
allowable fee the tax preparer may charge the client rescinding the refund anticipation
loan may not exceed the fee charged to the tax preparer by the financial institution to
establish the account.
    Subd. 6. Enforcement; penalties. The commissioner may impose an administrative
penalty of not more than $1,000 per violation of subdivision 3, 3a, 4, or 5, or 5b, provided
that a penalty may not be imposed for any conduct that is also subject to the tax return
preparer penalties in section 289A.60, subdivision 13. The commissioner may terminate a
tax preparer's authority to transmit returns electronically to the state, if the commissioner
determines the tax preparer engaged in a pattern and practice of violating this section.
Imposition of a penalty under this subdivision is subject to the contested case procedure
under chapter 14. The commissioner shall collect the penalty in the same manner as the
income tax. Penalties imposed under this subdivision are public data.
    Subd. 6a. Exchange of data; State Board of Accountancy. The State Board of
Accountancy shall refer to the commissioner complaints it receives about tax preparers
who are not subject to the jurisdiction of the State Board of Accountancy and who are
alleged to have violated the provisions of subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b.
    Subd. 6b. Exchange of data; Lawyers Board of Professional Responsibility. The
Lawyers Board of Professional Responsibility may refer to the commissioner complaints
it receives about tax preparers who are not subject to its jurisdiction and who are alleged
to have violated the provisions of subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b.
    Subd. 6c. Exchange of data; commissioner. The commissioner shall refer
complaints about tax preparers who are alleged to have violated the provisions of
subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b to:
(1) the State Board of Accountancy, if the tax preparer is under its jurisdiction; and
(2) the Lawyers Board of Professional Responsibility, if the tax preparer is under
its jurisdiction.
    Subd. 6d. Data private. Information exchanged on individuals under subdivisions
6a to 6c are private data under section 13.02, subdivision 12, until such time as a penalty
is imposed as provided in section 326A.08 or by the Lawyers Board of Professional
Responsibility.
    Subd. 7. Enforcement; civil actions. (a) Any violation of this section is an unfair,
deceptive, and unlawful trade practice within the meaning of section 8.31. An action taken
under section 8.31 is in the public interest.
(b) A client may bring a civil action seeking redress for a violation of this section in
the conciliation or the district court of the county in which unlawful action is alleged to
have been committed or where the respondent resides or has a principal place of business.
(c) A district court finding for the plaintiff must award:
(1) actual damages, including;
(2) incidental and consequential damages,;
(3) statutory damages of twice the sum of: (i) the tax preparation fees; and (ii) if the
plaintiff violated subdivision 3a, 4, or 5b all interest and fees for a refund anticipation loan;
(4) reasonable attorney fees,;
(5) court costs,; and
(6) any other equitable relief as the court considers appropriate.
    Subd. 8. Limited exemptions; enforcement provisions. The provisions of this
section, except for subdivision subdivisions 3a, 4, and 5b, do not apply to:
(1) an attorney admitted to practice under section 481.01;
(2) a certified public accountant or other person who is subject to the jurisdiction of
the State Board of Accountancy;
(3) an enrolled agent who has passed the special enrollment examination
administered by the Internal Revenue Service; or
(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of
the fiduciary estate, the testator, trustor, grantor, or beneficiaries of them;
(5) a tax preparer who provides tax preparation services for fewer than six clients
in a calendar year;
(6) tax preparation services to a spouse, parent, grandparent, child, or sibling of
the tax preparer; and
(7) the preparation by an employee of the tax return of the employee's employer
(4) anyone who provides, or assists in providing, tax preparation services within
the scope of duties as an employee or supervisor of a person who is exempt under this
subdivision.

    Sec. 2. Minnesota Statutes 2008, section 270C.56, subdivision 3, is amended to read:
    Subd. 3. Procedure for assessment; claims for refunds. (a) The commissioner
may assess liability for the taxes described in subdivision 1 against a person liable
under this section. The assessment may be based upon information available to the
commissioner. It must be made within the prescribed period of limitations for assessing
the underlying tax, or within one year after the date of an order assessing underlying tax,
whichever period expires later. An order assessing personal liability under this section is
reviewable under section 270C.35 and is appealable to Tax Court.
(b) If the time for appealing the order has expired and a payment is made by or
collected from the person assessed on the order in excess of the amount lawfully due
from that person of any portion of the liability shown on the order, a claim for refund
may be made by that person within 120 days after any payment of the liability if the
payment is within 3-1/2 years after the date the order was issued. Claims for refund under
this paragraph are limited to the amount paid during the 120-day period. Any amounts
collected under paragraph (c) after a claim for refund is filed in order to satisfy the unpaid
balance of the assessment that is the subject of the claim shall be returned if the claim is
allowed. There is no claim for refund available under this paragraph if the assessment has
previously been the subject of an administrative or Tax Court appeal, or a denied claim
for refund. The taxpayer may contest denial of the refund as provided in the procedures
governing claims for refunds under section 289A.50, subdivision 7.
(c) If a person has been assessed under this section for an amount for a given period
and the time for appeal has expired, regardless of whether an action contesting denial of a
claim for refund has been filed under paragraph (b), or there has been a final determination
that the person is liable, collection action is not stayed pursuant to section 270C.33,
subdivision 5
, for that assessment or for subsequent assessments of additional amounts for
the same person for the same period and tax type.
EFFECTIVE DATE.This section is effective for orders issued after the date of
final enactment.

    Sec. 3. Minnesota Statutes 2008, section 287.08, is amended to read:
287.08 TAX, HOW PAYABLE; RECEIPTS.
    (a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of
any county in this state in which the real property or some part is located at or before
the time of filing the mortgage for record. The treasurer shall endorse receipt on the
mortgage and the receipt is conclusive proof that the tax has been paid in the amount
stated and authorizes any county recorder or registrar of titles to record the mortgage. Its
form, in substance, shall be "registration tax hereon of ..................... dollars paid." If the
mortgage is exempt from taxation the endorsement shall, in substance, be "exempt from
registration tax." In either case the receipt must be signed by the treasurer. In case the
treasurer is unable to determine whether a claim of exemption should be allowed, the tax
must be paid as in the case of a taxable mortgage. For documents submitted electronically,
the endorsements and tax amount shall be affixed electronically and no signature by the
treasurer will be required. The actual payment method must be arranged in advance
between the submitter and the receiving county.
    (b) The county treasurer may refund in whole or in part any mortgage registry tax
overpayment if a written application by the taxpayer is submitted to the county treasurer
within 3-1/2 years from the date of the overpayment. If the county has not issued a denial
of the application, the taxpayer may bring an action in Tax Court in the county in which
the tax was paid at any time after the expiration of six months from the time that the
application was submitted. A denial of refund may be appealed within 60 days from
the date of the denial by bringing an action in Tax Court in the county in which the tax
was paid. The action is commenced by the serving of a petition for relief on the county
treasurer, and by filing a copy with the court. The county attorney shall defend the action.
The county treasurer shall notify the treasurer of each county that has or would receive a
portion of the tax as paid.
    (c) If the county treasurer determines a refund should be paid, or if a refund is
ordered by the court, the county treasurer of each county that actually received a portion
of the tax shall immediately pay a proportionate share of three percent of the refund
using any available county funds. The county treasurer of each county that received, or
would have received, a portion of the tax shall also pay their county's proportionate share
of the remaining 97 percent of the court-ordered refund on or before the 20th day of the
following month using solely the mortgage registry tax funds that would be paid to the
commissioner of revenue on that date under section 287.12. If the funds on hand under
this procedure are insufficient to fully fund 97 percent of the court-ordered refund, the
county treasurer of the county in which the action was brought shall file a claim with the
commissioner of revenue under section 16A.48 for the remaining portion of 97 percent of
the refund, and shall pay over the remaining portion upon receipt of a warrant from the
state issued pursuant to the claim.
    (d) When any mortgage covers real property located in more than one county in this
state the total tax must be paid to the treasurer of the county where the mortgage is first
presented for recording, and the payment must be receipted as provided in paragraph (a).
If the principal debt or obligation secured by such a multiple county mortgage exceeds
$1,000,000 $10,000,000, the nonstate portion of the tax must be divided and paid over by
the county treasurer receiving it, on or before the 20th day of each month after receipt,
to the county or counties entitled in the ratio that the market value of the real property
covered by the mortgage in each county bears to the market value of all the real property
in this state described in the mortgage. In making the division and payment the county
treasurer shall send a statement giving the description of the real property described in
the mortgage and the market value of the part located in each county. For this purpose,
the treasurer of any county may require the treasurer of any other county to certify to the
former the market valuation of any tract of real property in any mortgage.
    (e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The
mortgagee may undertake to collect and remit the tax on behalf of the mortgagor. If the
mortgagee collects money from the mortgagor to remit the tax on behalf of the mortgagor,
the mortgagee has a fiduciary duty to remit the tax on behalf of the mortgagor as to the
amount of the tax collected for that purpose and the mortgagor is relieved of any further
obligation to pay the tax as to the amount collected by the mortgagee for this purpose.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2008, section 290.0678, as added by Laws 2009, chapter
3, section 1, is amended to read:
290.0678 HEALTH INSURANCE PREMIUMS CREDIT.
    Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the
tax due under this chapter equal to 20 percent of the health insurance premiums paid
from a plan under section 125 of the Internal Revenue Code. The credit is allowed only
for premiums paid after the individual has not had coverage under a health care plan
for at least one year, and is allowed only for the first 12 months in which an individual
participates in the Section 125 Plan.
    (b) For a nonresident or part-year resident, the credit determined under this section
must be allocated based on the percentage calculated under section 290.06, subdivision
2c
, paragraph (e).
    Subd. 2. Limitations. The credit is allowed only for individuals with household
income for the taxable year between:
    (1) 275 percent and 300 percent of the federal poverty guidelines for the applicable
family size if the individual has dependents; or
    (2) 200 percent and 275 percent of the federal poverty guidelines for the applicable
family size if the individual has no dependents.
    Subd. 3. Definitions. For purposes of this section, "household income" means
income as defined in section 290.067, subdivision 2a, and "dependent" has the meaning
given in section 152 of the Internal Revenue Code.
    Subd. 4. Statement of premiums paid. Each Upon receiving a written request
from an employee, an employer must provide to each employee a statement that shows the
amount of health insurance premiums attributable to that employee paid from the Section
125 Plan for each month of the taxable year. The employer must provide the statement to
the employee at the same time as the annual written statement of wages paid as required
under section 289A.09, subdivision 2. that is included in the employee's first 12 months of
coverage under the Section 125 Plan, provided that the employee making the request did
not have coverage under a health care plan offered by the employer for the 12 months
preceding the date on which the employee began participating in the Section 125 Plan. An
employee may only make one request under this subdivision for each taxable year.
    Subd. 5. Transfer. Beginning in fiscal year 2010 and in each following fiscal year,
the amount necessary to pay the credits under this section is transferred from the health
care access fund to the general fund.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2008, for premiums paid in January 2009 and thereafter.

    Sec. 5. Minnesota Statutes 2008, section 297E.06, subdivision 4, is amended to read:
    Subd. 4. Annual audit, certified inventory, and cash count. (a) An organization
licensed under chapter 349 with gross receipts from lawful gambling of more than
$300,000 $500,000 in any year must have an annual financial audit of its lawful gambling
activities and funds for that year. An organization licensed under chapter 349 with gross
receipts from lawful gambling of more than $150,000 but not more than $300,000 in any
year must have an annual financial review of its lawful gambling activities and funds for
that year.
(b) The commissioner may require a financial audit of the lawful gambling activities
and funds of an organization licensed under chapter 349, with gross receipts less than
$500,000 annually, when an organization has:
(1) failed to timely file required gambling tax returns;
(2) failed to timely pay the gambling tax or regulatory fee;
(3) filed fraudulent gambling tax returns;
(4) failed to take corrective actions required by the commissioner; or
(5) failed to otherwise comply with chapter 297E.
(c) Audits and financial reviews under this subdivision must be performed by an
independent accountant licensed by the state of Minnesota.
(d) An organization licensed under chapter 349 must perform an annual certified
inventory and cash count at the end of its fiscal year and submit the report to the
commissioner within 30 days after the end of its fiscal year. The report shall be on a form
prescribed by the commissioner.
(b) (e) The commissioner of revenue shall prescribe standards for the audits and
financial review, certified inventory, and cash count reports required under this subdivision.
The standards may vary based on the gross receipts of the organization. The standards
must incorporate and be consistent with standards prescribed by the American Institute
of Certified Public Accountants. A complete, true, and correct copy of the audit audits,
certified inventory, and cash count report must be filed as prescribed by the commissioner.

    Sec. 6. Minnesota Statutes 2008, section 297H.06, subdivision 1, is amended to read:
    Subdivision 1. Certain surcharges or fees. The amount of a surcharge, fee, or
charge established pursuant to section 115A.919, 115A.921, 115A.923, 400.08, 473.811,
or 473.843, or a service charge by a home rule charter or statutory city that owns and
operates a solid waste-to-energy resource recovery facility, is exempt from the solid waste
management tax. The exemption does not apply to the tax imposed on market price under
section 297H.02, subdivision 1, paragraphs (b) and (c), or section 297H.03, subdivision
1
, paragraphs (b) and (c).
EFFECTIVE DATE.This section is effective for taxes imposed after March 31,
2007.

    Sec. 7. Minnesota Statutes 2008, section 298.227, is amended to read:
298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
    (a) An amount equal to that distributed pursuant to each taconite producer's taxable
production and qualifying sales under section 298.28, subdivision 9a, shall be held by
the Iron Range Resources and Rehabilitation Board in a separate taconite economic
development fund for each taconite and direct reduced ore producer. Money from the
fund for each producer shall be released by the commissioner after review by a joint
committee consisting of an equal number of representatives of the salaried employees and
the nonsalaried production and maintenance employees of that producer. The District 11
director of the United States Steelworkers of America, on advice of each local employee
president, shall select the employee members. In nonorganized operations, the employee
committee shall be elected by the nonsalaried production and maintenance employees.
The review must be completed no later than six months after the producer presents a
proposal for expenditure of the funds to the committee. The funds held pursuant to this
section may be released only for workforce development and associated public facility
improvement, or for acquisition of plant and stationary mining equipment and facilities
for the producer or for research and development in Minnesota on new mining, or
taconite, iron, or steel production technology, but only if the producer provides a matching
expenditure to be used for the same purpose of at least 50 percent of the distribution
based on 14.7 cents per ton beginning with distributions in 2002. Effective for proposals
for expenditures of money from the fund beginning May 26, 2007, the commissioner
may not release the funds before the next scheduled meeting of the board. If the board
rejects a proposed expenditure, the funds must be deposited in the Taconite Environmental
Protection Fund under sections 298.222 to 298.225. If a producer uses money which has
been released from the fund prior to May 26, 2007 to procure haulage trucks, mobile
equipment, or mining shovels, and the producer removes the piece of equipment from the
taconite tax relief area defined in section 273.134 within ten years from the date of receipt
of the money from the fund, a portion of the money granted from the fund must be repaid
to the taconite economic development fund. The portion of the money to be repaid is 100
percent of the grant if the equipment is removed from the taconite tax relief area within 12
months after receipt of the money from the fund, declining by ten percent for each of the
subsequent nine years during which the equipment remains within the taconite tax relief
area. If a taconite production facility is sold after operations at the facility had ceased, any
money remaining in the fund for the former producer may be released to the purchaser of
the facility on the terms otherwise applicable to the former producer under this section. If
a producer fails to provide matching funds for a proposed expenditure within six months
after the commissioner approves release of the funds, the funds are available for release to
another producer in proportion to the distribution provided and under the conditions of
this section. Any portion of the fund which is not released by the commissioner within
one year of its deposit in the fund shall be divided between the taconite environmental
protection fund created in section 298.223 and the Douglas J. Johnson economic protection
trust fund created in section 298.292 for placement in their respective special accounts.
Two-thirds of the unreleased funds shall be distributed to the taconite environmental
protection fund and one-third to the Douglas J. Johnson economic protection trust fund.
    (b) Notwithstanding the requirements of paragraph (a), setting the amount of
distributions and the review process, an amount equal to ten cents per taxable ton of
production in 2007, for distribution in 2008 only, that would otherwise be distributed
under paragraph (a), may be used for a loan for the cost of construction of providing for
a biomass energy facility. This amount must be deducted from the distribution under
paragraph (a) for which a matching expenditure by the producer is not required. The
granting of the loan is subject to approval by the Iron Range Resources and Rehabilitation
Board; interest must be payable on the loan at the rate prescribed in section 298.2213,
subdivision
3. Repayments of the loan and interest must be deposited in the northeast
Minnesota economic development fund established in section 298.2213. If a loan is not
made under this paragraph by July 1, 2009 2010, the amount that had been made available
for the loan under this paragraph must be transferred to the northeast Minnesota economic
development fund. Money distributed in 2008 to the fund established under this section
that exceeds ten cents per ton is available to qualifying producers under paragraph (a)
on a pro rata basis.
    If 2008 H.F. No. 1812 is enacted and includes a provision that amends this section
in a manner that is different from the amendment in this section, the amendment in this
section supersedes the amendment in 2008 H.F. No. 1812, notwithstanding section 645.26.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2008, section 298.28, subdivision 2, is amended to read:
    Subd. 2. City or town where quarried or produced. (a) 4.5 cents per gross ton of
merchantable iron ore concentrate, hereinafter referred to as "taxable ton," plus the amount
provided in paragraph (c), must be allocated to the city or town in the county in which
the lands from which taconite was mined or quarried were located or within which the
concentrate was produced. If the mining, quarrying, and concentration, or different steps
in either thereof are carried on in more than one taxing district, the commissioner shall
apportion equitably the proceeds of the part of the tax going to cities and towns among
such subdivisions upon the basis of attributing 40 50 percent of the proceeds of the tax to
the operation of mining or quarrying the taconite, and the remainder to the concentrating
plant and to the processes of concentration, and with respect to each thereof giving due
consideration to the relative extent of such operations performed in each such taxing
district. The commissioner's order making such apportionment shall be subject to review
by the Tax Court at the instance of any of the interested taxing districts, in the same
manner as other orders of the commissioner.
(b) Four cents per taxable ton shall be allocated to cities and organized townships
affected by mining because their boundaries are within three miles of a taconite mine pit
that has been actively mined in at least one of the prior three years. If a city or town is
located near more than one mine meeting these criteria, the city or town is eligible to
receive aid calculated from only the mine producing the largest taxable tonnage. When
more than one municipality qualifies for aid based on one company's production, the aid
must be apportioned among the municipalities in proportion to their populations. Of the
amounts distributed under this paragraph to each municipality, one-half must be used for
infrastructure improvement projects, and one-half must be used for projects in which two
or more municipalities cooperate. Each municipality that receives a distribution under this
paragraph must report annually to the Iron Range Resources and Rehabilitation Board and
the commissioner of Iron Range resources and rehabilitation on the projects involving
cooperation with other municipalities.
(c) The amount that would have been computed for the current year under Minnesota
Statutes 2008, section 126C.21, subdivision 4, for a school district within which the
taconite was mined or quarried or within which the concentrate is produced is added to
the amount to be distributed to the cities and towns located within that school district as
provided in paragraph (a).
EFFECTIVE DATE.This section is effective for distributions in 2010 and
thereafter.

    Sec. 9. Minnesota Statutes 2008, section 298.28, subdivision 4, is amended to read:
    Subd. 4. School districts. (a) 23.15 cents per taxable ton, plus the increase provided
in paragraph (d), less the amount that would have been computed under Minnesota
Statutes 2008, section 126C.21, subdivision 4, for the current year for that district, must be
allocated to qualifying school districts to be distributed, based upon the certification of the
commissioner of revenue, under paragraphs (b), (c), and (f).
    (b) (i) 3.43 cents per taxable ton must be distributed to the school districts in which
the lands from which taconite was mined or quarried were located or within which the
concentrate was produced. The distribution must be based on the apportionment formula
prescribed in subdivision 2.
    (ii) Four cents per taxable ton from each taconite facility must be distributed to
each affected school district for deposit in a fund dedicated to building maintenance
and repairs, as follows:
    (1) proceeds from Keewatin Taconite or its successor are distributed to Independent
School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
districts;
    (2) proceeds from the Hibbing Taconite Company or its successor are distributed to
Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
districts;
    (3) proceeds from the Mittal Steel Company and Minntac or their successors are
distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
2711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
    (4) proceeds from the Northshore Mining Company or its successor are distributed
to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
or their successor districts; and
    (5) proceeds from United Taconite or its successor are distributed to Independent
School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
successor districts.
    Revenues that are required to be distributed to more than one district shall be
apportioned according to the number of pupil units identified in section 126C.05,
subdivision 1
, enrolled in the second previous year.
    (c)(i) 15.72 cents per taxable ton, less any amount distributed under paragraph (e),
shall be distributed to a group of school districts comprised of those school districts which
qualify as a tax relief area under section 273.134, paragraph (b), or in which there is a
qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
to school district indexes as follows: for each school district, its pupil units determined
under section 126C.05 for the prior school year shall be multiplied by the ratio of the
average adjusted net tax capacity per pupil unit for school districts receiving aid under
this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
Each district shall receive that portion of the distribution which its index bears to the sum
of the indices for all school districts that receive the distributions.
    (ii) Notwithstanding clause (i), each school district that receives a distribution
under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
severed mineral values after reduction for any portion distributed to cities and towns under
section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy
reduction under section 126C.48, subdivision 8, for the second year prior to the year of the
distribution shall receive a distribution equal to the difference; the amount necessary to
make this payment shall be derived from proportionate reductions in the initial distribution
to other school districts under clause (i).
    (d) Any school district described in paragraph (c) where a levy increase pursuant to
section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001,
shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the
pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous
year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent
times the district's taxable net tax capacity in the second previous year.
    If the total amount provided by paragraph (d) is insufficient to make the payments
herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
so as not to exceed the funds available. Any amounts received by a qualifying school
district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
education aid which the district receives pursuant to section 126C.13 or the permissible
levies of the district. Any amount remaining after the payments provided in this paragraph
shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
economic protection trust fund as provided in subdivision 11.
    Each district receiving money according to this paragraph shall reserve the lesser of
the amount received under this paragraph or $25 times the number of pupil units served
in the district. It may use the money for early childhood programs or for outcome-based
learning programs that enhance the academic quality of the district's curriculum. The
outcome-based learning programs must be approved by the commissioner of education.
    (e) There shall be distributed to any school district the amount which the school
district was entitled to receive under section 298.32 in 1975.
    (f) Four cents per taxable ton must be distributed to qualifying school districts
according to the distribution specified in paragraph (b), clause (ii), and two cents per
taxable ton must be distributed according to the distribution specified in paragraph
(c). These amounts are not subject to sections 126C.21, subdivision 4, and 126C.48,
subdivision 8
.
EFFECTIVE DATE.This section is effective for distributions in 2010 and
thereafter.

    Sec. 10. Minnesota Statutes 2008, section 298.75, subdivision 2, is amended to read:
    Subd. 2. Tax imposed. (a) Except as provided in paragraph (e), a county that
imposes the aggregate production tax shall impose upon every operator a production tax
of 21.5 cents per cubic yard or 15 cents per ton of aggregate material excavated in the
county except that the county board may decide not to impose this tax if it determines
that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
aggregate material from that county. The tax shall not be imposed on aggregate material
excavated in the county until the aggregate material is transported from the extraction site
or sold, whichever occurs first. When aggregate material is stored in a stockpile within the
state of Minnesota and a public highway, road or street is not used for transporting the
aggregate material, the tax shall not be imposed until either when the aggregate material
is sold, or when it is transported from the stockpile site, or when it is used from the
stockpile, whichever occurs first.
    (b) Except as provided in paragraph (e), a county that imposes the aggregate
production tax under paragraph (a) shall impose upon every importer a production tax
of 21.5 cents per cubic yard or 15 cents per ton of aggregate material imported into the
county. The tax shall be imposed when the aggregate material is imported from the
extraction site or sold. When imported aggregate material is stored in a stockpile within
the state of Minnesota and a public highway, road, or street is not used for transporting
the aggregate material, the tax shall be imposed either when the aggregate material is
sold, when it is transported from the stockpile site, or when it is used from the stockpile,
whichever occurs first. The tax shall be imposed on an importer when the aggregate
material is imported into the county that imposes the tax.
    (c) If the aggregate material is transported directly from the extraction site to a
waterway, railway, or another mode of transportation other than a highway, road or street,
the tax imposed by this section shall be apportioned equally between the county where the
aggregate material is extracted and the county to which the aggregate material is originally
transported. If that destination is not located in Minnesota, then the county where the
aggregate material was extracted shall receive all of the proceeds of the tax.
    (d) A county, city, or town that receives revenue under this section is prohibited
from imposing any additional host community fees on aggregate production within that
county, city, or town.
(e) A county that borders two other states and that is not contiguous to a county
that imposes a tax under this section may impose the taxes under paragraphs (a) and (b)
at the rate of ten cents per cubic yard or seven cents per ton. This paragraph expires
December 31, 2014.

    Sec. 11. Minnesota Statutes 2008, section 309.53, subdivision 3, is amended to read:
    Subd. 3. Financial statement requirements. The financial statement shall include
a balance sheet, statement of income and expense, and statement of functional expenses,
shall be consistent with forms furnished by the attorney general, and shall be prepared in
accordance with generally accepted accounting principles so as to make a full disclosure
of the following, including necessary allocations between each item and the basis of
such allocations:
    (a) total receipts and total income from all sources;
    (b) cost of management and general;
    (c) program services;
    (d) cost of fund-raising;
    (e) cost of public education;
    (f) funds or properties transferred out of state, with explanation as to recipient and
purpose;
    (g) total net amount disbursed or dedicated within this state, broken down into total
amounts disbursed or dedicated for each major purpose, charitable or otherwise;
    (h) names of professional fund-raisers used during the accounting year and the
financial compensation and profit resulting to each professional fund-raiser; and
    (i) a list of the five highest paid directors, officers, and employees of the organization
and its related organizations, as that term is defined by section 317A.011, subdivision 18,
that receive total compensation of more than $50,000, together with the total compensation
paid to each. Total compensation shall include salaries, fees, bonuses, fringe benefits,
severance payments, and deferred compensation paid by the charitable organization and
all related organizations as that term is defined by section 317A.011, subdivision 18.
    Unless otherwise required by this subdivision, the financial statement need not be
certified.
    A financial statement of a charitable organization which has received total revenue
in excess of $350,000 $750,000 for the 12 months of operation covered by the statement
shall be accompanied by an audited financial statement prepared in accordance with
generally accepted accounting principles that has been examined by an independent
certified public accountant for the purpose of expressing an opinion. In preparing the audit
the certified public accountant shall take into consideration capital, endowment or other
reserve funds, if any, controlled by the charitable organization. For purposes of calculating
the $350,000 $750,000 total revenue threshold provided by this subdivision, the value
of donated food to a nonprofit food shelf may not be included if the food is donated for
subsequent distribution at no charge, and not for resale.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2008, section 349.1641, is amended to read:
349.1641 LICENSES; SUMMARY SUSPENSION.
    The board may (1) summarily suspend the license of an organization that is more
than three months 45 days late in filing a tax return or in paying a tax required under
chapter 297E and may keep the suspension in effect until all required returns are filed and
required taxes are paid; (2) summarily suspend for not more than 90 days any license
issued by the board or director for what the board determines are actions detrimental to the
integrity of lawful gambling in Minnesota; and (3) summarily suspend the license of a
gambling manager who has failed to receive the training required under section 349.167,
subdivision
4, clause (2), and may keep the suspension in effect until the gambling
manager passes an examination prepared and administered by the board. The examination
does not qualify as continuing education credit for the next calendar year. The board must
notify the licensee at least 14 days before suspending the license under this section. If a
license is summarily suspended under this section, a contested case hearing on the merits
must be held within 20 days of the issuance of the order of suspension, unless the parties
agree to a later hearing date. The administrative law judge's report must be issued within
20 days after the close of the hearing record. In all cases involving summary suspension,
the board must issue its final decision within 30 days after receipt of the report of the
administrative law judge and subsequent exceptions and argument under section 14.61.
When an organization's license is suspended under this section, the board shall within
three days notify all municipalities in which the organization's gambling premises are
located and all licensed distributors in the state.

    Sec. 13. Minnesota Statutes 2008, section 349.19, subdivision 9, is amended to read:
    Subd. 9. Annual financial audit; filing requirement. An organization licensed
under this chapter must have an annual financial audit or financial review when required
by section 297E.06, subdivision 4.

    Sec. 14. Minnesota Statutes 2008, section 423A.02, subdivision 1, is amended to read:
    Subdivision 1. Amortization state aid. (a) A municipality in which is located
a local police or salaried firefighters' relief association to which the provisions of
section 69.77, apply, that had an unfunded actuarial accrued liability in the most recent
relief association actuarial valuation, is entitled, upon application as required by the
commissioner of revenue, to receive local police and salaried firefighters' relief association
amortization state aid if the municipality and the appropriate relief association both comply
with the applicable provisions of sections 69.031, subdivision 5, 69.051, subdivisions 1
and 3
, and 69.77. If a municipality loses entitlement for amortization state aid in any year
because its local relief association no longer has an unfunded actuarial accrued liability,
the municipality is not entitled to amortization state aid in any subsequent year.
(b) The total amount of amortization state aid to all entitled municipalities must
not exceed $5,055,000.
(c) Subject to the adjustment for the city of Minneapolis provided in this paragraph,
the amount of amortization state aid to which a municipality is entitled annually is an
amount equal to the level annual dollar amount required to amortize, by December 31,
2010, the unfunded actuarial accrued liability of the special fund of the appropriate
relief association as reported in the December 31, 1978, actuarial valuation of the
relief association prepared under sections 356.215 and 356.216, reduced by the dollar
amount required to pay the interest on the unfunded actuarial accrued liability of the
special fund of the relief association for calendar year 1981 set at the rate specified in
Minnesota Statutes 1978, section 356.215, subdivision 8. For the city of Minneapolis, the
amortization state aid amount thus determined must be reduced by $747,232 on account of
the Minneapolis Police Relief Association and by $772,768 on account of the Minneapolis
Fire Department Relief Association. If the amortization state aid amounts determined
under this paragraph exceed the amount appropriated for this purpose, the amortization
state aid for actual allocation must be reduced pro rata.
(d) Payment of amortization state aid to municipalities must be made directly to
the municipalities involved in three equal installments on July 15, September 15, and
November 15 annually. Upon receipt of amortization state aid, the municipal treasurer
shall transmit the aid amount to the treasurer of the local relief association for immediate
deposit in the special fund of the relief association.
(e) The commissioner of revenue shall prescribe and periodically revise the form for
and content of the application for the amortization state aid.
(f) The amount required under this section, as provided in subdivision 3a, is
appropriated annually from the general fund to the commissioner of revenue.
EFFECTIVE DATE.This section is effective retroactively for fiscal year 2004, for
aid payable in 2003 and thereafter.

    Sec. 15. Minnesota Statutes 2008, section 423A.02, subdivision 1b, is amended to read:
    Subd. 1b. Additional amortization state aid. (a) Annually, on October 1, the
commissioner of revenue shall allocate the additional amortization state aid transferred
under section 69.021, subdivision 11, to:
    (1) all police or salaried firefighters relief associations governed by and in full
compliance with the requirements of section 69.77, that had an unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31;
    (2) all local police or salaried firefighter consolidation accounts governed by chapter
353A that are certified by the executive director of the public employees retirement
association as having for the current fiscal year an additional municipal contribution
amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented
section 353A.083, subdivision 1, if the effective date of the consolidation preceded May
24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date
of the consolidation preceded June 1, 1995; and
    (3) the municipalities that are required to make an additional municipal contribution
under section 353.665, subdivision 8, for the duration of the required additional
contribution.
    (b) The commissioner shall allocate the state aid on the basis of the proportional share
of the relief association or consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation accounts as of December 31,
1993, for relief associations, and as of June 30, 1994, for consolidation accounts.
    (c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
allocate the state aid, including any state aid in excess of the limitation in subdivision
4, on the following basis:
    (1) 64.5 percent to the municipalities to which section 353.665, subdivision
8
, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in
accordance with paragraph (b) and subject to the limitation in subdivision 4;
    (2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Fire Department Relief Association; and
    (3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding
December 31 for the Virginia Fire Department Relief Association.
    If there is no unfunded actuarial accrued liability in both the Minneapolis Police
Relief Association and the Minneapolis Fire Department Relief Association as disclosed
in the most recent actuarial valuations for the relief associations prepared under sections
356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
in the most recent actuarial valuation for the relief association prepared under sections
356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as
follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
Teachers Retirement Fund Association, and 30 percent as additional funding to support
minimum fire state aid for volunteer firefighters relief associations. Upon the final
payment to municipalities required by section 353.665, subdivision 8, paragraph (b),
or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate that 64.5
percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund
Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation proposed under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs
associated with the police and firefighters pensions, and 40 percent as additional funding to
support minimum fire state aid for volunteer firefighters relief associations. The allocation
must be made by the commissioner at the same time and under the same procedures
as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund
Association, annually, beginning on July 1, 2005, if the applicable teacher's association
five-year average time-weighted rate of investment return does not equal or exceed the
performance of a composite portfolio assumed passively managed (indexed) invested ten
percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
in domestic stock calculated using the formula under section 11A.04, clause (11), the aid
allocation to that retirement fund under this section ceases until the five-year annual rate
of investment return equals or exceeds the performance of that composite portfolio.
    (d) The amounts required under this subdivision are the amounts annually
appropriated to the commissioner of revenue under section 69.021, subdivision 11,
paragraph (e).
EFFECTIVE DATE.This section is effective retroactively for fiscal year 2004, for
aid payable in 2003 and thereafter.

    Sec. 16. Minnesota Statutes 2008, section 423A.02, subdivision 3, is amended to read:
    Subd. 3. Reallocation of amortization or supplementary amortization state
aid. (a) Seventy percent of the difference between $5,720,000 and the current year
amortization aid or and supplemental amortization aid distributed under subdivisions 1
and 1a that is not distributed for any reason to a municipality for use by a local police
or salaried fire relief association must be distributed by the commissioner of revenue
according to this paragraph. The commissioner shall distribute 70 percent of the amounts
derived under this paragraph to the Teachers Retirement Association and 30 percent to the
St. Paul Teachers Retirement Fund Association to fund the unfunded actuarial accrued
liabilities of the respective funds. These payments shall be made on or before June 30
each fiscal year. The amount required under this paragraph is appropriated annually from
the general fund to the commissioner of revenue. If the St. Paul Teachers Retirement Fund
Association becomes fully funded, its eligibility for this aid ceases. Amounts remaining
in the undistributed balance account at the end of the biennium if aid eligibility ceases
cancel to the general fund.
    (b) In order to receive amortization and supplementary amortization aid under
paragraph (a), Independent School District No. 625, St. Paul, must make contributions
to the St. Paul Teachers Retirement Fund Association in accordance with the following
schedule:

Fiscal Year
Amount

1996
$
0

1997
$
0

1998
$
200,000

1999
$
400,000

2000
$
600,000

2001 and thereafter
$
800,000
    (c) Special School District No. 1, Minneapolis, and the city of Minneapolis must
each make contributions to the Teachers Retirement Association in accordance with the
following schedule:


Fiscal Year
City amount
School district
amount

1996
$
0
$
0

1997
$
0
$
0

1998
$
250,000
$
250,000

1999
$
400,000
$
400,000

2000
$
550,000
$
550,000

2001
$
700,000
$
700,000

2002
$
850,000
$
850,000

2003 and thereafter
$
1,000,000
$
1,000,000
    (d) Money contributed under paragraph (a) and either paragraph (b) or (c), as
applicable, must be credited to a separate account in the applicable teachers retirement
fund and may not be used in determining any benefit increases. The separate account
terminates for a fund when the aid payments to the fund under paragraph (a) cease.
    (e) Thirty percent of the difference between $5,720,000 and the current year
amortization aid or and supplemental amortization aid under subdivisions 1 and 1a that
is not distributed for any reason to a municipality for use by a local police or salaried
firefighter relief association must be distributed under section 69.021, subdivision 7,
paragraph (d), as additional funding to support a minimum fire state aid amount for
volunteer firefighter relief associations. The amount required under this paragraph is
appropriated annually to the commissioner of revenue.
EFFECTIVE DATE.This section is effective retroactively for fiscal year 2004, for
aid payable in 2003 and thereafter.

    Sec. 17. Minnesota Statutes 2008, section 423A.02, is amended by adding a
subdivision to read:
    Subd. 3a. Appropriations for amortization state aid; supplementary
amortization state aid; and amortization state aid and supplementary state aid
reallocations. $4,720,000 is annually appropriated from the general fund to the
commissioner of revenue for amortization state aid under subdivision 1 and for the
reallocation of amortization aid under subdivision 3. $1,000,000 is annually appropriated
from the general fund to the commissioner of revenue for supplementary amortization
state aid under subdivision 1a, and for the reallocation of supplementary amortization state
aid under subdivision 3.
EFFECTIVE DATE.This section is effective retroactively for fiscal year 2004, for
aid payable in 2003 and thereafter.

    Sec. 18. Minnesota Statutes 2008, section 645.44, subdivision 19, is amended to read:
    Subd. 19. Fee and tax. (a) "Tax" means any fee, charge, exaction, or assessment
imposed by a governmental entity on an individual, person, entity, transaction, good,
service, or other thing. It excludes a price that an individual or entity chooses voluntarily
to pay in return for receipt of goods or services provided by the governmental entity.
A government good or service does not include access to or the authority to engage in
private market transactions with a nongovernmental party, such as licenses to engage in a
trade, profession, or business or to improve private property.
(b) For purposes of applying the laws of this state, a "fee," "charge," or other similar
term that satisfies the functional requirements of paragraph (a) must be treated as a tax for
all purposes, regardless of whether the statute or law names or describes it as a tax. The
provisions of this subdivision do not exempt a person, corporation, organization, or entity
from payment of a validly imposed fee, charge, exaction, or assessment, nor preempt or
supersede limitations under law that apply to fees, charges, or assessments.
(c) This subdivision is not intended to extend or limit article 4, section 18, of the
Minnesota Constitution.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 19. Laws 2008, chapter 366, article 6, section 46, subdivision 1, is amended to
read:
    Subdivision 1. Authorized. Notwithstanding the contiguity requirement in
Minnesota Statutes, section 447.31, subdivision 2, any two or more of the following cities
and towns in St. Louis County may establish by resolution of their respective governing
bodies the White Community Hospital District or its successor: the cities of Aurora,
Biwabik, and Hoyt Lakes, and the towns of Biwabik, White, and Colvin. The proposed
resolution to establish the hospital district must be published and is subject to referendum
as provided in section 447.31, subdivision 2.
EFFECTIVE DATE.This section is effective the day following final enactment
without local approval under Minnesota Statutes, section 645.023, subdivision 1,
paragraph (a), for taxes levied in 2009, payable in 2010, and thereafter.

    Sec. 20. Laws 2008, chapter 366, article 6, section 46, subdivision 2, is amended to
read:
    Subd. 2. Powers; may make grants. (a) Except as otherwise provided in this
section, the White Community Hospital District or its successor shall be organized and
have the powers and duties provided in Minnesota Statutes, sections 447.31, except
subdivisions 2, 5, and 6; 447.32, subdivisions 5, 7, and 9; 447.345; 447.37; and 447.38.
    (b) The hospital district may levy taxes as provided in this section to provide funding
to make grants to the White Community Hospital or its successor and any affiliated health
care facility or provider for any purpose authorized for hospital districts in Minnesota
Statutes, sections 447.31 to 447.38, except 447.331. A grant must not be made under
this section until the governing body of the White Community Hospital, and any of its
affiliated health care facilities or providers receiving a grant, have entered into a written
agreement with the hospital district board stating that the governing body will comply
with and is subject to all provisions of the Minnesota open meeting law in Minnesota
Statutes, chapter 13D.
EFFECTIVE DATE.This section is effective the day following final enactment
without local approval under Minnesota Statutes, section 645.023, subdivision 1,
paragraph (a), for taxes levied in 2009, payable in 2010, and thereafter.

    Sec. 21. SPECIAL ACCOUNT; TIMING DIFFERENCES.
Notwithstanding the provisions of Minnesota Statutes, section 290.62, the
commissioner of revenue shall deposit the additional income tax and corporate franchise
tax revenues collected as a result of the combination of: (1) the additions under Minnesota
Statutes, section 290.01, subdivision 19a, clauses (7) and (8), and subdivision 19c, clauses
(15) and (16); and (2) adopting the provisions of American Recovery and Reinvestment
Act of 2009, in a special timing account in the general fund, but not to exceed $10,149,000.
On July 11, 2011, the commissioner of revenue shall transfer the money in the account to
the general fund to offset the reduction in revenues resulting from the subtractions under
Minnesota Statutes, section 290.01, subdivision 19b, clauses (9) and (14), and subdivision
19d, clauses (18) and (19).

    Sec. 22. APPROPRIATION.
$680,000 in fiscal year 2010 and $680,000 in fiscal year 2011 are appropriated from
the general fund to the commissioner of natural resources to be used to cover the costs
associated with issuing mining permits. This is a onetime appropriation and does not
become part of the agency's base budget.

    Sec. 23. REPEALER.
(a) Laws 1998, chapter 407, article 8, section 12, subdivision 4, is repealed.
(b) Laws 2009, chapter 37, article 1, section 31, subdivision 3, is repealed.
(c) Minnesota Statutes 2008, section 126C.21, subdivision 4, is repealed.
EFFECTIVE DATE.Paragraph (a) is effective the day following final enactment.
Paragraph (b) is effective May 8, 2009. Paragraph (c) is effective for revenue for fiscal
year 2010 and thereafter.
Presented to the governor May 13, 2009
Signed by the governor May 16, 2009, 9:42 p.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