1.1 	A bill for an act
1.2 	relating to taxation; reducing the corporate franchise tax rate; repealing the JOBZ 
1.3 	program; amending Minnesota Statutes 2008, sections 123B.53, subdivision 1; 
1.4 	270B.14, subdivision 3; 290.01, subdivision 29; 290.06, subdivision 1; 290.0921, 
1.5 	subdivisions 1, 3; 290.0922, subdivisions 2, 3; 297A.75, as amended; 297B.03; 
1.6 	Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19b; repealing 
1.7 	Minnesota Statutes 2008, sections 272.02, subdivision 64; 272.029, subdivision 
1.8 	7; 289A.12, subdivision 15; 290.06, subdivision 29; 297A.68, subdivision 37; 
1.9 	469.310; 469.311; 469.312, subdivisions 1, 2, 3, 4; 469.313; 469.314; 469.315; 
1.10 	469.316; 469.317; 469.318; 469.3192; 469.3193; 469.320.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2008, section 123B.53, subdivision 1, is amended to read:
1.13 		Subdivision 1.Definitions. (a) For purposes of this section, the eligible debt service 
1.14 	revenue of a district is defined as follows:
1.15 	(1) the amount needed to produce between five and six percent in excess of the 
1.16 	amount needed to meet when due the principal and interest payments on the obligations 
1.17 	of the district for eligible projects according to subdivision 2, including the amounts 
1.18 	necessary for repayment of energy loans according to section 216C.37 or sections 298.292
1.19 	to 298.298, debt service loans and capital loans, lease purchase payments under section 
1.20 	126C.40, subdivision 2, alternative facilities levies under section 123B.59, subdivision 
1.21 	5, paragraph (a), minus
1.22 	(2) the amount of debt service excess levy reduction for that school year calculated 
1.23 	according to the procedure established by the commissioner.
1.24 	(b) The obligations in this paragraph are excluded from eligible debt service revenue:
1.25 	(1) obligations under section 123B.61;
1.26 	(2) the part of debt service principal and interest paid from the taconite environmental 
1.27 	protection fund or Douglas J. Johnson economic protection trust;
2.1 	(3) obligations issued under Laws 1991, chapter 265, article 5, section 18, as 
2.2 	amended by Laws 1992, chapter 499, article 5, section 24; and
2.3 	(4) obligations under section 123B.62.
2.4 	(c) For purposes of this section, if a preexisting school district reorganized under 
2.5 	sections 123A.35 to 123A.43, 123A.46, and 123A.48 is solely responsible for retirement 
2.6 	of the preexisting district's bonded indebtedness, capital loans or debt service loans, debt 
2.7 	service equalization aid must be computed separately for each of the preexisting districts.
2.8 	~~(d) For purposes of this section, the adjusted net tax capacity determined according~~ 
2.9 	~~to section 127A.48 shall be adjusted to include the tax capacity of property generally~~ 
2.10 	~~exempted from ad valorem taxes under section 272.02, subdivision 64.~~

2.11 	EFFECTIVE DATE. This section is effective for property taxes payable in 2011 
2.12 	and thereafter.

2.13 	Sec. 2. Minnesota Statutes 2008, section 270B.14, subdivision 3, is amended to read:
2.14 		Subd. 3.Administration of enterprise, job opportunity, and biotechnology 
2.15 	and health sciences industry zone programs. The commissioner may disclose return 
2.16 	information relating to the taxes imposed by chapters 290 and 297A to the Department 
2.17 	of Employment and Economic Development or a municipality receiving an enterprise 
2.18 	zone designation under section 469.169 but only as necessary to administer the funding 
2.19 	limitations under section 469.169, subdivision 7, or to the Department of Employment 
2.20 	and Economic Development and appropriate officials from the local government units in 
2.21 	which a qualified business is located but only as necessary to enforce ~~the job opportunity~~ 
2.22 	~~building zone benefits under section 469.315, or~~ biotechnology and health sciences 
2.23 	industry zone benefits under section 469.336. 

2.24 	EFFECTIVE DATE. This section is effective January 1, 2011.

2.25 	Sec. 3. Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19b, is 
2.26 	amended to read:
2.27 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
2.28 	and trusts, there shall be subtracted from federal taxable income:
2.29 	(1) net interest income on obligations of any authority, commission, or 
2.30 	instrumentality of the United States to the extent includable in taxable income for federal 
2.31 	income tax purposes but exempt from state income tax under the laws of the United States;
3.1 	(2) if included in federal taxable income, the amount of any overpayment of income 
3.2 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
3.3 	is received as a refund or as a credit to another taxable year's income tax liability;
3.4 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
3.5 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
3.6 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
3.7 	transportation of each qualifying child in attending an elementary or secondary school 
3.8 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
3.9 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
3.10 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
3.11 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
3.12 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
3.13 	"textbooks" includes books and other instructional materials and equipment purchased 
3.14 	or leased for use in elementary and secondary schools in teaching only those subjects 
3.15 	legally and commonly taught in public elementary and secondary schools in this state. 
3.16 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
3.17 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
3.18 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
3.19 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
3.20 	or materials for, or transportation to, extracurricular activities including sporting events, 
3.21 	musical or dramatic events, speech activities, driver's education, or similar programs. No 
3.22 	deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or 
3.23 	the qualifying child's vehicle to provide such transportation for a qualifying child. For 
3.24 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
3.25 	given in section 32(c)(3) of the Internal Revenue Code;
3.26 	(4) income as provided under section 290.0802;
3.27 	(5) to the extent included in federal adjusted gross income, income realized on 
3.28 	disposition of property exempt from tax under section 290.491;
3.29 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
3.30 	of the Internal Revenue Code in determining federal taxable income by an individual 
3.31 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
3.32 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
3.33 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
3.34 	under the provisions of Public Law 109-1;
4.1 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
4.2 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
4.3 	which is included in gross income under section 87 of the Internal Revenue Code;
4.4 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
4.5 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
4.6 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
4.7 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
4.8 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
4.9 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
4.10 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
4.11 	the extent they exceed the federal foreign tax credit;
4.12 	(9) in each of the five tax years immediately following the tax year in which an 
4.13 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
4.14 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
4.15 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
4.16 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
4.17 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
4.18 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
4.19 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
4.20 	less than zero;
4.21 	(10) for taxable years beginning before January 1, 2011, job opportunity building 
4.22 	zone income as provided under section 469.316;
4.23 	(11) to the extent included in federal taxable income, the amount of compensation 
4.24 	paid to members of the Minnesota National Guard or other reserve components of the 
4.25 	United States military for active service performed in Minnesota, excluding compensation 
4.26 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
4.27 	this clause, "active service" means (i) state active service as defined in section 190.05, 
4.28 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
4.29 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
4.30 	subdivision 5c, but "active service" excludes service performed in accordance with section 
4.31 	190.08, subdivision 3;
4.32 	(12) to the extent included in federal taxable income, the amount of compensation 
4.33 	paid to Minnesota residents who are members of the armed forces of the United States or 
4.34 	United Nations for active duty performed outside Minnesota under United States Code, 
4.35 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
4.36 	the United Nations;
5.1 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
5.2 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
5.3 	to another person for human organ transplantation. For purposes of this clause, "organ" 
5.4 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
5.5 	"human organ transplantation" means the medical procedure by which transfer of a human 
5.6 	organ is made from the body of one person to the body of another person; "qualified 
5.7 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
5.8 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
5.9 	may be subtracted under this clause only once; and "qualified donor" means the individual 
5.10 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
5.11 	individual may claim the subtraction in this clause for each instance of organ donation for 
5.12 	transplantation during the taxable year in which the qualified expenses occur;
5.13 	(14) in each of the five tax years immediately following the tax year in which an 
5.14 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
5.15 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
5.16 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
5.17 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
5.18 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
5.19 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
5.20 	subtraction is not allowed under this clause;
5.21 	(15) to the extent included in federal taxable income, compensation paid to a service 
5.22 	member as defined in United States Code, title 10, section 101(a)(5), for military service 
5.23 	as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2);
5.24 	(16) international economic development zone income as provided under section 
5.25 	469.325;
5.26 	(17) to the extent included in federal taxable income, the amount of national service 
5.27 	educational awards received from the National Service Trust under United States Code, 
5.28 	title 42, sections 12601 to 12604, for service in an approved Americorps National Service 
5.29 	program; and
5.30 	(18) to the extent included in federal taxable income, discharge of indebtedness 
5.31 	income resulting from reacquisition of business indebtedness included in federal taxable 
5.32 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
5.33 	to the extent that the income was included in net income in a prior year as a result of the 
5.34 	addition under section 290.01, subdivision 19a, clause (16).

5.35 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
5.36 	December 31, 2010.

6.1 	Sec. 4. Minnesota Statutes 2008, section 290.01, subdivision 29, is amended to read:
6.2 		Subd. 29.Taxable income. The term "taxable income" means:
6.3 	(1) for individuals, estates, and trusts, the same as taxable net income;
6.4 	(2) for corporations, the taxable net income less
6.5 	(i) the net operating loss deduction under section 290.095;
6.6 	(ii) the dividends received deduction under section 290.21, subdivision 4;
6.7 	~~(iii) the exemption for operating in a job opportunity building zone under section~~ 
6.8 	~~469.317;~~
6.9 	~~(iv)~~ (iii) the exemption for operating in a biotechnology and health sciences industry 
6.10 	zone under section 469.337; and
6.11 	~~(v)~~ (iv) the exemption for operating in an international economic development 
6.12 	zone under section 469.326.

6.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
6.14 	December 31, 2010.

6.15 	Sec. 5. Minnesota Statutes 2008, section 290.06, subdivision 1, is amended to read:
6.16 		Subdivision 1.Computation, corporations. The franchise tax imposed upon 
6.17 	corporations shall be computed by applying to their taxable income the rate of ~~9.8~~ 9.4
6.18 	percent.

6.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
6.20 	December 31, 2011.

6.21 	Sec. 6. Minnesota Statutes 2008, section 290.0921, subdivision 1, is amended to read:
6.22 		Subdivision 1.Tax imposed. In addition to the taxes computed under this chapter 
6.23 	without regard to this section, the franchise tax imposed on corporations includes a tax 
6.24 	equal to the excess, if any, for the taxable year of:
6.25 	(1) ~~5.8~~ 5.6 percent of Minnesota alternative minimum taxable income; over
6.26 	(2) the tax imposed under section 290.06, subdivision 1, without regard to this 
6.27 	section. 

6.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
6.29 	December 31, 2011.

6.30 	Sec. 7. Minnesota Statutes 2008, section 290.0921, subdivision 3, is amended to read:
6.31 		Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable 
6.32 	income" is Minnesota net income as defined in section 290.01, subdivision 19, and 
7.1 	includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 
7.2 	(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 
7.3 	Minnesota tax return, the minimum tax must be computed on a separate company basis. 
7.4 	If a corporation is part of a tax group filing a unitary return, the minimum tax must be 
7.5 	computed on a unitary basis. The following adjustments must be made. 
7.6 	(1) For purposes of the depreciation adjustments under section 56(a)(1) and 
7.7 	56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 
7.8 	service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 
7.9 	income tax purposes, including any modification made in a taxable year under section 
7.10 	290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7, 
7.11 	paragraph (c). 
7.12 	For taxable years beginning after December 31, 2000, the amount of any remaining 
7.13 	modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 
7.14 	section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 
7.15 	allowance in the first taxable year after December 31, 2000. 
7.16 	(2) The portion of the depreciation deduction allowed for federal income tax 
7.17 	purposes under section 168(k) of the Internal Revenue Code that is required as an 
7.18 	addition under section 290.01, subdivision 19c, clause (15), is disallowed in determining 
7.19 	alternative minimum taxable income. 
7.20 	(3) The subtraction for depreciation allowed under section 290.01, subdivision 19d, 
7.21 	clause (18), is allowed as a depreciation deduction in determining alternative minimum 
7.22 	taxable income. 
7.23 	(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 
7.24 	of the Internal Revenue Code does not apply. 
7.25 	(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 
7.26 	Revenue Code does not apply. 
7.27 	(6) The special rule for dividends from section 936 companies under section 
7.28 	56(g)(4)(C)(iii) does not apply. 
7.29 	(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue 
7.30 	Code does not apply. 
7.31 	(8) The tax preference for intangible drilling costs under section 57(a)(2) of the 
7.32 	Internal Revenue Code must be calculated without regard to subparagraph (E) and the 
7.33 	subtraction under section 290.01, subdivision 19d, clause (4). 
7.34 	(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal 
7.35 	Revenue Code does not apply. 
8.1 	(10) The tax preference for charitable contributions of appreciated property under 
8.2 	section 57(a)(6) of the Internal Revenue Code does not apply. 
8.3 	(11) For purposes of calculating the tax preference for accelerated depreciation or 
8.4 	amortization on certain property placed in service before January 1, 1987, under section 
8.5 	57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 
8.6 	deduction allowed under section 290.01, subdivision 19e. 
8.7 	For taxable years beginning after December 31, 2000, the amount of any remaining 
8.8 	modification made under section 290.01, subdivision 19e, not previously deducted is a 
8.9 	depreciation or amortization allowance in the first taxable year after December 31, 2004. 
8.10 	(12) For purposes of calculating the adjustment for adjusted current earnings in 
8.11 	section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 
8.12 	income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 
8.13 	minimum taxable income as defined in this subdivision, determined without regard to the 
8.14 	adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code. 
8.15 	(13) For purposes of determining the amount of adjusted current earnings under 
8.16 	section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 
8.17 	56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend 
8.18 	gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the 
8.19 	amount of refunds of income, excise, or franchise taxes subtracted as provided in section 
8.20 	290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other like 
8.21 	income subtracted as provided in section 290.01, subdivision 19d, clause (10). 
8.22 	(14) For tax years beginning before January 1, 2011, alternative minimum taxable 
8.23 	income excludes the income from operating in a job opportunity building zone as provided 
8.24 	under section 469.317. 
8.25 	(15) Alternative minimum taxable income excludes the income from operating in a 
8.26 	biotechnology and health sciences industry zone as provided under section 469.337. 
8.27 	(16) Alternative minimum taxable income excludes the income from operating in an 
8.28 	international economic development zone as provided under section 469.326. 
8.29 	Items of tax preference must not be reduced below zero as a result of the 
8.30 	modifications in this subdivision. 

8.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
8.32 	December 31, 2010.

8.33 	Sec. 8. Minnesota Statutes 2008, section 290.0922, subdivision 2, is amended to read:
8.34 		Subd. 2.Exemptions. The following entities are exempt from the tax imposed 
8.35 	by this section:
9.1 	(1) corporations exempt from tax under section 290.05;
9.2 	(2) real estate investment trusts;
9.3 	(3) regulated investment companies or a fund thereof; and
9.4 	(4) entities having a valid election in effect under section 860D(b) of the Internal 
9.5 	Revenue Code;
9.6 	(5) town and farmers' mutual insurance companies;
9.7 	(6) cooperatives organized under chapter 308A or 308B that provide housing 
9.8 	exclusively to persons age 55 and over and are classified as homesteads under section 
9.9 	273.124, subdivision 3; and
9.10 	~~(7) an entity, if for the taxable year all of its property is located in a job opportunity~~ 
9.11 	~~building zone designated under section 469.314 and all of its payroll is a job opportunity~~ 
9.12 	~~building zone payroll under section 469.310; and~~
9.13 	~~(8)~~(7) an entity, if for the taxable year all of its property is located in an international 
9.14 	economic development zone designated under section 469.322, and all of its payroll is 
9.15 	international economic development zone payroll under section 469.321. The exemption 
9.16 	under this clause applies to taxable years beginning during the duration of the international 
9.17 	economic development zone.
9.18 	Entities not specifically exempted by this subdivision are subject to tax under this 
9.19 	section, notwithstanding section 290.05.

9.20 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
9.21 	December 31, 2010.

9.22 	Sec. 9. Minnesota Statutes 2008, section 290.0922, subdivision 3, is amended to read:
9.23 		Subd. 3.Definitions. (a) "Minnesota sales or receipts" means the total sales 
9.24 	apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts 
9.25 	attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the 
9.26 	total sales or receipts apportioned or attributed to Minnesota pursuant to any other 
9.27 	apportionment formula applicable to the taxpayer.
9.28 	(b) "Minnesota property" means total Minnesota tangible property as provided in 
9.29 	section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota, 
9.30 	but does not include: (1) ~~property located in a job opportunity building zone designated~~ 
9.31 	~~under section 469.314, (2)~~ property of a qualified business located in a biotechnology and 
9.32 	health sciences industry zone designated under section 469.334, or ~~(3)~~ (2) for taxable years 
9.33 	beginning during the duration of the zone, property of a qualified business located in the 
9.34 	international economic development zone designated under section 469.322. Intangible 
9.35 	property shall not be included in Minnesota property for purposes of this section. 
10.1 	Taxpayers who do not utilize tangible property to apportion income shall nevertheless 
10.2 	include Minnesota property for purposes of this section. On a return for a short taxable 
10.3 	year, the amount of Minnesota property owned, as determined under section 290.191, 
10.4 	shall be included in Minnesota property based on a fraction in which the numerator is the 
10.5 	number of days in the short taxable year and the denominator is 365.
10.6 	(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section 
10.7 	290.191, subdivision 12, but does not include: (1) ~~job opportunity building zone payrolls~~ 
10.8 	~~under section 469.310, subdivision 8, (2)~~ biotechnology and health sciences industry zone 
10.9 	payrolls under section 469.330, subdivision 8, or ~~(3)~~ (2) for taxable years beginning during 
10.10 	the duration of the zone, international economic development zone payrolls under section 
10.11 	469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income shall 
10.12 	nevertheless include Minnesota payrolls for purposes of this section.

10.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
10.14 	December 31, 2010.

10.15 	Sec. 10. Minnesota Statutes 2008, section 297A.75, as amended by Laws 2009, chapter 
10.16 	88, article 4, sections 7 and 8, is amended to read:
10.17 	297A.75 REFUND; APPROPRIATION.
10.18 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the 
10.19 	following exempt items must be imposed and collected as if the sale were taxable and the 
10.20 	rate under section 297A.62, subdivision 1, applied. The exempt items include:
10.21 	(1) capital equipment exempt under section 297A.68, subdivision 5;
10.22 	(2) building materials for an agricultural processing facility exempt under section 
10.23 	297A.71, subdivision 13;
10.24 	(3) building materials for mineral production facilities exempt under section 
10.25 	297A.71, subdivision 14;
10.26 	(4) building materials for correctional facilities under section 297A.71, subdivision 
10.27 	3;
10.28 	(5) building materials used in a residence for disabled veterans exempt under section 
10.29 	297A.71, subdivision 11;
10.30 	(6) elevators and building materials exempt under section 297A.71, subdivision 12;
10.31 	(7) building materials for the Long Lake Conservation Center exempt under section 
10.32 	297A.71, subdivision 17;
10.33 	(8) materials and supplies for qualified low-income housing under section 297A.71, 
10.34 	subdivision 23;
11.1 	(9) materials, supplies, and equipment for municipal electric utility facilities under 
11.2 	section 297A.71, subdivision 35;
11.3 	~~(10) equipment and materials used for the generation, transmission, and distribution~~ 
11.4 	~~of electrical energy and an aerial camera package exempt under section 297A.68,~~ 
11.5 	~~subdivision 37;~~
11.6 	~~(11)~~(10) tangible personal property and taxable services and construction materials, 
11.7 	supplies, and equipment exempt under section 297A.68, subdivision 41;
11.8 	~~(12)~~(11) commuter rail vehicle and repair parts under section 297A.70, subdivision 
11.9 	3, clause (11);
11.10 	~~(13)~~(12) materials, supplies, and equipment for construction or improvement of 
11.11 	projects and facilities under section 297A.71, subdivision 40; and
11.12 	~~(14)~~(13) materials, supplies, and equipment for construction or improvement of a 
11.13 	meat processing facility exempt under section 297A.71, subdivision 41.
11.14 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
11.15 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 
11.16 	must be paid to the applicant. Only the following persons may apply for the refund:
11.17 	(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
11.18 	(2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental 
11.19 	subdivision;
11.20 	(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits 
11.21 	provided in United States Code, title 38, chapter 21;
11.22 	(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead 
11.23 	property;
11.24 	(5) for subdivision 1, clause (8), the owner of the qualified low-income housing 
11.25 	project;
11.26 	(6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or 
11.27 	a joint venture of municipal electric utilities;
11.28 	(7) for subdivision 1, clauses (10)~~, (11),~~ and ~~(14)~~ (13), the owner of the qualifying 
11.29 	business; and
11.30 	(8) for subdivision 1, clauses ~~(12)~~(11) and ~~(13)~~ (12), the applicant must be the 
11.31 	governmental entity that owns or contracts for the project or facility.
11.32 		Subd. 3.Application. (a) The application must include sufficient information 
11.33 	to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 
11.34 	subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), 
11.35 	(11), (12), or (13), ~~or (14),~~ the contractor, subcontractor, or builder must furnish to the 
11.36 	refund applicant a statement including the cost of the exempt items and the taxes paid on 
12.1 	the items unless otherwise specifically provided by this subdivision. The provisions of 
12.2 	sections 289A.40 and 289A.50 apply to refunds under this section.
12.3 	(b) An applicant may not file more than two applications per calendar year for 
12.4 	refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
12.5 	(c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not 
12.6 	exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases 
12.7 	of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71, 
12.8 	subdivision 40, must not be filed until after June 30, 2009.
12.9 		Subd. 4.Interest. Interest must be paid on the refund at the rate in section 270C.405 
12.10 	from 90 days after the refund claim is filed with the commissioner for taxes paid under 
12.11 	subdivision 1.
12.12 		Subd. 5.Appropriation. The amount required to make the refunds is annually 
12.13 	appropriated to the commissioner.

12.14 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
12.15 	December 31, 2010.

12.16 	Sec. 11. Minnesota Statutes 2008, section 297B.03, is amended to read:
12.17 	297B.03 EXEMPTIONS.
12.18 	There is specifically exempted from the provisions of this chapter and from 
12.19 	computation of the amount of tax imposed by it the following:
12.20 	(1) purchase or use, including use under a lease purchase agreement or installment 
12.21 	sales contract made pursuant to section 465.71, of any motor vehicle by the United States 
12.22 	and its agencies and instrumentalities and by any person described in and subject to the 
12.23 	conditions provided in section 297A.67, subdivision 11; 
12.24 	(2) purchase or use of any motor vehicle by any person who was a resident of 
12.25 	another state or country at the time of the purchase and who subsequently becomes a 
12.26 	resident of Minnesota, provided the purchase occurred more than 60 days prior to the date 
12.27 	such person began residing in the state of Minnesota and the motor vehicle was registered 
12.28 	in the person's name in the other state or country;
12.29 	(3) purchase or use of any motor vehicle by any person making a valid election to be 
12.30 	taxed under the provisions of section 297A.90; 
12.31 	(4) purchase or use of any motor vehicle previously registered in the state of 
12.32 	Minnesota when such transfer constitutes a transfer within the meaning of section 118, 
12.33 	331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal 
12.34 	Revenue Code;
13.1 	(5) purchase or use of any vehicle owned by a resident of another state and leased 
13.2 	to a Minnesota-based private or for-hire carrier for regular use in the transportation of 
13.3 	persons or property in interstate commerce provided the vehicle is titled in the state of 
13.4 	the owner or secured party, and that state does not impose a sales tax or sales tax on 
13.5 	motor vehicles used in interstate commerce;
13.6 	(6) purchase or use of a motor vehicle by a private nonprofit or public educational 
13.7 	institution for use as an instructional aid in automotive training programs operated by the 
13.8 	institution. "Automotive training programs" includes motor vehicle body and mechanical 
13.9 	repair courses but does not include driver education programs;
13.10 	(7) purchase of a motor vehicle for use as an ambulance by an ambulance service 
13.11 	licensed under section 144E.10; 
13.12 	(8) purchase of a motor vehicle by or for a public library, as defined in section 
13.13 	134.001, subdivision 2, as a bookmobile or library delivery vehicle; 
13.14 	(9) purchase of a ready-mixed concrete truck;
13.15 	(10) purchase or use of a motor vehicle by a town for use exclusively for road 
13.16 	maintenance, including snowplows and dump trucks, but not including automobiles, 
13.17 	vans, or pickup trucks;
13.18 	(11) purchase or use of a motor vehicle by a corporation, society, association, 
13.19 	foundation, or institution organized and operated exclusively for charitable, religious, 
13.20 	or educational purposes, except a public school, university, or library, but only if the 
13.21 	vehicle is:
13.22 	(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
13.23 	passenger automobile, as defined in section 168.002, if the automobile is designed and 
13.24 	used for carrying more than nine persons including the driver; and 
13.25 	(ii) intended to be used primarily to transport tangible personal property or 
13.26 	individuals, other than employees, to whom the organization provides service in 
13.27 	performing its charitable, religious, or educational purpose;
13.28 	(12) purchase of a motor vehicle for use by a transit provider exclusively to provide 
13.29 	transit service is exempt if the transit provider is either (i) receiving financial assistance or 
13.30 	reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 
13.31 	473.388, or 473.405; and
13.32 	~~(13) purchase or use of a motor vehicle by a qualified business, as defined in section~~ 
13.33 	~~469.310, located in a job opportunity building zone, if the motor vehicle is principally~~ 
13.34 	~~garaged in the job opportunity building zone and is primarily used as part of or in direct~~ 
13.35 	~~support of the person's operations carried on in the job opportunity building zone. The~~ 
13.36 	~~exemption under this clause applies to sales, if the purchase was made and delivery~~ 
14.1 	~~received during the duration of the job opportunity building zone. The exemption under~~ 
14.2 	~~this clause also applies to any local sales and use tax; and~~
14.3 	~~(14)~~ (13) purchase of a leased vehicle by the lessee who was a participant in a 
14.4 	lease-to-own program from a charitable organization that is:
14.5 	(i) described in section 501(c)(3) of the Internal Revenue Code; and
14.6 	(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4.

14.7 	EFFECTIVE DATE. This section is effective for purchases and sales made after 
14.8 	December 31, 2010.

14.9 	Sec. 12. JOBZ BUSINESS SUBSIDY AGREEMENTS.
 14.10 	Effective 30 days after enactment of this section, a qualified business, as defined 
14.11 	in Minnesota Statutes, section 469.310, subdivision 11, may elect to void a business 
14.12 	subsidy agreement beginning for obligations under the business subsidy agreement that 
14.13 	apply after June 30, 2010. A qualified business is not required to repay the tax benefits 
14.14 	enumerated under Minnesota Statutes, section 469.315, for ceasing to operate in a zone 
14.15 	or for breach of a business subsidy agreement that occurs after the day following final 
14.16 	enactment of this section.

14.17 	EFFECTIVE DATE. This section is effective day following enactment.

14.18 	Sec. 13.  REPEALER.
 14.19 	(a) Minnesota Statutes 2008, section 272.02, subdivision 64, is repealed.
14.20 	(b) Minnesota Statutes 2008, sections 290.06, subdivision 29; 469.316; 469.317; 
14.21 	and 469.318, are repealed.
14.22 	(c) Minnesota Statutes 2008, section 297A.68, subdivision 37, is repealed.
14.23 	(d) Minnesota Statutes 2008, sections 272.029, subdivision 7; 289A.12, subdivision 
14.24 	15; 469.310; 469.311; 469.312, subdivisions 1, 2, 3, and 4; 469.313; 469.314; 469.315; 
14.25 	469.3192; 469.3193; and 469.320, are repealed.

14.26 	EFFECTIVE DATE. Paragraph (a) is effective for property taxes payable in 2011 
14.27 	and thereafter. Paragraph (b) is effective for taxable years beginning after December 31, 
14.28 	2010. Paragraph (c) is effective for sales and purchases made after December 31, 2010, 
14.29 	but does not apply to binding contracts entered into before June 1, 2010. Paragraph (d) is 
14.30 	effective January 1, 2011.