1.1 	A bill for an act
1.2 	relating to the Minnesota business climate; permitting sales in this state of 
1.3 	health insurance permitted in another state under certain conditions; modifying 
1.4 	environmental review requirements; modifying payment of appropriations to 
1.5 	public postsecondary systems; modifying certain conditions of employment; 
1.6 	modifying the individual income, mining occupation, and property taxes; 
1.7 	allowing an angel investment credit; conforming to section 179 expensing 
1.8 	rules; reducing the commercial-industrial property tax class rate; repealing 
1.9 	the state general tax on commercial and industrial property; repealing the 
1.10 	corporate franchise tax; repealing prevailing wage requirement;amending 
1.11 	Minnesota Statutes 2008, sections 62A.047; 62L.056; 115A.31; 135A.031, by 
1.12 	adding subdivisions; 177.24, subdivision 2; 216B.243, subdivision 7; 273.13, 
1.13 	subdivision 24; 275.025, subdivisions 1, 4; 289A.20, subdivision 1; 289A.30, 
1.14 	subdivision 1; 289A.31, subdivision 1; 289A.38, subdivision 12; 289A.50, 
1.15 	subdivision 1; 289A.60, subdivisions 1, 4; 290.01, subdivisions 19f, 22, 29; 
1.16 	290.03; 290.04, subdivision 1; 290.06, subdivision 33; 290.0922, subdivision 
1.17 	1; 290.095, subdivision 3; 290.17, subdivisions 1, 4; 290.191, subdivision 4; 
1.18 	290.32; Minnesota Statutes 2009 Supplement, sections 62L.02, subdivision 
1.19 	26; 289A.18, subdivision 1; 289A.38, subdivision 7; 290.01, subdivision 19a; 
1.20 	proposing coding for new law in Minnesota Statutes, chapters 62Q; 116J; 179; 
1.21 	repealing Minnesota Statutes 2008, sections 62A.0411; 62A.149, subdivision 
1.22 	1; 62A.152; 62A.25; 62A.26; 62A.28; 62A.304; 62Q.47; 116C.01; 116C.02; 
1.23 	116C.03, subdivisions 1, 2, 2a, 3a, 4, 5, 6; 116C.04, subdivisions 1, 2, 3, 4, 7, 10, 
1.24 	11; 116C.06; 116C.08; 116D.04, subdivisions 1a, 2a, 2b, 3a, 4a, 5a, 6, 6a, 7, 8, 9, 
1.25 	10, 11, 12, 13; 116D.045, subdivisions 1, 2, 3, 4; 177.41; 177.42, subdivisions 
1.26 	1, 2, 3, 4, 5; 177.43, subdivisions 1, 2, 4, 5, 6, 6a, 7; 177.435; 177.44; 275.025, 
1.27 	subdivision 2; 289A.19, subdivision 2; 289A.26; 290.01, subdivisions 5, 
1.28 	5a, 6b, 19e; 290.014, subdivision 5; 290.02; 290.06, subdivisions 1, 24, 27; 
1.29 	290.068, subdivisions 1, 2, 3, 4, 5; 290.0921, subdivisions 1, 2, 3, 3a, 4, 6, 7, 
1.30 	8; 290.21, subdivisions 1, 4; 290.34, subdivisions 1, 2; 290.371, subdivisions 
1.31 	1, 2, 3, 4; 290.432; 298.01, subdivisions 3, 3a, 3b, 4, 4a, 4b, 4c, 5, 6; 298.17; 
1.32 	Minnesota Statutes 2009 Supplement, sections 177.42, subdivisions 6, 7; 177.43, 
1.33 	subdivision 3; 289A.08, subdivision 3; 290.01, subdivisions 19c, 19d; Minnesota 
1.34 	Rules, parts 4410.0200; 4410.0300; 4410.0400; 4410.0500; 4410.1000; 
1.35 	4410.1100; 4410.1200; 4410.1300; 4410.1400; 4410.1500; 4410.1600; 
1.36 	4410.1700; 4410.2000; 4410.2100; 4410.2200; 4410.2300; 4410.2400; 
1.37 	4410.2500; 4410.2600; 4410.2700; 4410.2800; 4410.2900; 4410.3000; 
1.38 	4410.3100; 4410.3600; 4410.3610; 4410.3700; 4410.3800; 4410.3900; 
1.39 	4410.4000; 4410.4300; 4410.4400; 4410.4500; 4410.4600; 4410.5000; 
2.1 	4410.5100; 4410.5200; 4410.5300; 4410.5400; 4410.5500; 4410.5600; 
2.2 	4410.6000; 4410.6100; 4410.6200; 4410.6410; 4410.6500; 4410.7055.
2.3 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.4 	Section 1. TITLE.
 2.5 	This act may be cited as "The Minnesota Prosperity Act."

2.6 	Sec. 2. Minnesota Statutes 2008, section 62A.047, is amended to read:
2.7 	62A.047 CHILDREN'S HEALTH SUPERVISION SERVICES AND
2.8 	PRENATAL CARE SERVICES.
2.9 	A policy of individual or group health and accident insurance regulated under this 
2.10 	chapter, or individual or group subscriber contract regulated under chapter 62C, health 
2.11 	maintenance contract regulated under chapter 62D, or health benefit certificate regulated 
2.12 	under chapter 64B, issued, renewed, or continued to provide coverage to a Minnesota 
2.13 	resident, must provide coverage for child health supervision services and prenatal care 
2.14 	services. The policy, contract, or certificate must specifically exempt reasonable and 
2.15 	customary charges for child health supervision services and prenatal care services from 
2.16 	a deductible, co-payment, or other coinsurance or dollar limitation requirement. This 
2.17 	section does not prohibit the use of policy waiting periods or preexisting condition 
2.18 	limitations for these services. Minimum benefits may be limited to one visit payable to 
2.19 	one provider for all of the services provided at each visit cited in this section subject to the 
2.20 	schedule set forth in this section. Nothing in this section applies to a commercial health 
2.21 	insurance policy issued as a companion to a health maintenance organization contract, a 
2.22 	policy designed primarily to provide coverage payable on a per diem, fixed indemnity, or 
2.23 	nonexpense incurred basis, or a policy that provides only accident coverage.
2.24 	"Child health supervision services" means pediatric preventive services, appropriate 
2.25 	immunizations, developmental assessments, and laboratory services appropriate to the age 
2.26 	of a child from birth to age six, and appropriate immunizations from ages six to 18, as 
2.27 	defined by Standards of Child Health Care issued by the American Academy of Pediatrics. 
2.28 	Reimbursement must be made for at least five child health supervision visits from birth 
2.29 	to 12 months, three child health supervision visits from 12 months to 24 months, once a 
2.30 	year from 24 months to 72 months.
2.31 	"Prenatal care services" means the comprehensive package of medical and 
2.32 	psychosocial support provided throughout the pregnancy, including risk assessment, 
2.33 	serial surveillance, prenatal education, and use of specialized skills and technology, 
3.1 	when needed, as defined by Standards for Obstetric-Gynecologic Services issued by the 
3.2 	American College of Obstetricians and Gynecologists.

3.3 	Sec. 3. Minnesota Statutes 2009 Supplement, section 62L.02, subdivision 26, is 
3.4 	amended to read:
3.5 		Subd. 26.Small employer. (a) "Small employer" means, with respect to a calendar 
3.6 	year and a plan year, a person, firm, corporation, partnership, association, or other entity 
3.7 	actively engaged in business in Minnesota, including a political subdivision of the state, 
3.8 	that employed an average of no fewer than two nor more than 50 150 current employees 
3.9 	on business days during the preceding calendar year and that employs at least two current 
3.10 	employees on the first day of the plan year. If an employer has only one eligible employee 
3.11 	who has not waived coverage, the sale of a health plan to or for that eligible employee 
3.12 	is not a sale to a small employer and is not subject to this chapter and may be treated as 
3.13 	the sale of an individual health plan. A small employer plan may be offered through a 
3.14 	domiciled association to self-employed individuals and small employers who are members 
3.15 	of the association, even if the self-employed individual or small employer has fewer than 
3.16 	two current employees. Entities that are treated as a single employer under subsection (b), 
3.17 	(c), (m), or (o) of section 414 of the federal Internal Revenue Code are considered a single 
3.18 	employer for purposes of determining the number of current employees. Small employer 
3.19 	status must be determined on an annual basis as of the renewal date of the health benefit 
3.20 	plan. The provisions of this chapter continue to apply to an employer who no longer meets 
3.21 	the requirements of this definition until the annual renewal date of the employer's health 
3.22 	benefit plan. If an employer was not in existence throughout the preceding calendar year, 
3.23 	the determination of whether the employer is a small employer is based upon the average 
3.24 	number of current employees that it is reasonably expected that the employer will employ 
3.25 	on business days in the current calendar year. For purposes of this definition, the term 
3.26 	employer includes any predecessor of the employer. An employer that has more than 50
3.27 	150 current employees but has 50 150 or fewer employees, as "employee" is defined under 
3.28 	United States Code, title 29, section 1002(6), is a small employer under this subdivision.
3.29 	(b) Where an association, as defined in section 62L.045, comprised of employers 
3.30 	contracts with a health carrier to provide coverage to its members who are small employers, 
3.31 	the association and health benefit plans it provides to small employers, are subject to 
3.32 	section 62L.045, with respect to small employers in the association, even though the 
3.33 	association also provides coverage to its members that do not qualify as small employers.
3.34 	(c) If an employer has employees covered under a trust specified in a collective 
3.35 	bargaining agreement under the federal Labor-Management Relations Act of 1947, 
4.1 	United States Code, title 29, section 141, et seq., as amended, or employees whose health 
4.2 	coverage is determined by a collective bargaining agreement and, as a result of the 
4.3 	collective bargaining agreement, is purchased separately from the health plan provided 
4.4 	to other employees, those employees are excluded in determining whether the employer 
4.5 	qualifies as a small employer. Those employees are considered to be a separate small 
4.6 	employer if they constitute a group that would qualify as a small employer in the absence 
4.7 	of the employees who are not subject to the collective bargaining agreement.

4.8 	Sec. 4. Minnesota Statutes 2008, section 62L.056, is amended to read:
4.9 	62L.056 SMALL EMPLOYER FLEXIBLE BENEFITS PLANS.
4.10 	(a) Notwithstanding any provision of this chapter, chapter 62A, chapter 62Q, chapter 
4.11 	363A, or any other law to the contrary, a health carrier plan company may offer, sell, issue, 
4.12 	and renew a health benefit plan that is a flexible benefits plan under this section to a small 
4.13 	employer an individual or employer of any size if the following requirements are satisfied:
4.14 	(1) the health benefit plan must be offered in compliance with this chapter the laws 
4.15 	of this state, except as otherwise permitted in this section;
4.16 	(2) the health benefit plan to be offered must be designed to enable employers and
4.17 	covered persons to better manage costs and coverage options through the use of co-pays, 
4.18 	deductibles, and other cost-sharing arrangements;
4.19 	(3) the health benefit plan must be issued and administered in compliance with 
4.20 	sections 62E.141; 62L.03, subdivision 6; and 62L.12, subdivisions 3 and 4, as applicable,
4.21 	relating to prohibitions against enrolling in the Minnesota Comprehensive Health 
4.22 	Association persons eligible for employer group coverage;
4.23 	(4) the health benefit plan may modify or exclude any or all coverages of benefits 
4.24 	that would otherwise be required by law, except for maternity benefits and other benefits 
4.25 	required under federal law;
4.26 	(5) each health benefit plan must be approved by the commissioner of commerce, 
4.27 	but the commissioner may not disapprove a plan on the grounds of a modification or 
4.28 	exclusion permitted under clause (4); and
4.29 	(6) prior to sale of the health benefit plan, the small employer purchaser must be 
4.30 	given a written list of the coverages otherwise required by law that are modified or 
4.31 	excluded in the health benefit plan. The list must include a description of each coverage 
4.32 	in the list and indicate whether the coverage is modified or excluded. If a coverage is 
4.33 	modified, the list must describe the modification. The list may, but need not, also list any 
4.34 	or all coverages otherwise required by law that are included in the health benefit plan and 
4.35 	indicate that they are included. In the case of employer coverage, the insurer health plan 
5.1 	company must require that a copy of this written list be provided, prior to the effective 
5.2 	date of the health benefit plan, to each employee who is eligible for health coverage 
5.3 	under the employer's plan.
5.4 	(b) The definitions in section 62L.02 apply to this section as modified by this section.
5.5 	(c) (b) An employer may provide a health benefit plan permitted under this section 
5.6 	to its employees, the employees' dependents, and other persons eligible for coverage under 
5.7 	the employer's plan, notwithstanding chapter 363A or any other law to the contrary.

5.8 	Sec. 5. [62Q.022] HEALTH PLANS APPROVED IN OTHER STATES; SALE IN 
5.9 	MINNESOTA PERMITTED.
5.10 		Subdivision 1.Sale permitted. An individual or group health plan, as defined in 
5.11 	section 62Q.01, subdivision 3, that meets the requirements of the laws of another state 
5.12 	may be offered, issued, sold, or renewed to a Minnesota resident or employer, regardless 
5.13 	of whether the health plan complies with the otherwise applicable requirements of this 
5.14 	state if it satisfies the requirements specified in this section.
5.15 		Subd. 2.Requirements and exemptions. (a) An individual or group health plan 
5.16 	qualifies under subdivision 1 if the commissioner of commerce or commissioner of health, 
5.17 	whichever is appropriate for the type of health plan company, has determined that:
5.18 	(1) the entity providing the health plan is a health plan company, as defined in 
5.19 	section 62Q.01, subdivision 4, that holds a certificate of authority under chapter 60A, 62C, 
5.20 	62D, 62H, 62N, or 64B authorizing it to do business as a health plan company in this state, 
5.21 	regardless of whether the health plan company is domiciled in this state;
5.22 	(2) the state insurance regulator in the health plan company's state of domicile is 
5.23 	accredited by the National Association of Insurance Commissioners;
5.24 	(3) the health plan company is not in a condition of insolvency, as defined in section 
5.25 	60B.03, subdivision 15, paragraph (b);
5.26 	(4) the insurance regulator in the state of domicile has reviewed and approved 
5.27 	the policy form proposed to be used in this state for compliance with the laws of the 
5.28 	domiciliary state;
5.29 	(5) the health plan provides that the health plan company will comply with sections 
5.30 	72A.20 and 72A.201, relating to regulation of trade practices and claims settlement 
5.31 	practices;
5.32 	(6) the health plan and the health plan company comply with this state's underwriting, 
5.33 	premium rating bands, and minimum loss ratio requirements;
5.34 	(7) the health plan will be sold through insurance producers licensed to sell health 
5.35 	plans in this state;
6.1 	(8) the health plan company has agreed to pay, and does pay, the same taxes, 
6.2 	assessments, and other fees that apply to other health plan companies of the same type 
6.3 	doing business in this state, including assessments by the Minnesota Comprehensive 
6.4 	Health Association under chapter 62E and the Minnesota Life and Health Insurance 
6.5 	Guaranty Association under chapter 61B;
6.6 	(9) the health plan complies with all applicable federal laws; and
6.7 	(10) the health plan company's state of domicile is designated in rules adopted by the 
6.8 	Minnesota commissioner of commerce, in consultation with the commissioner of health, as 
6.9 	one of the top 25 states in effective regulation of health insurance products and companies 
6.10 	and in achieving efficient and high-quality health care outcomes for its residents.
6.11 	(b) A health plan offered, issued, sold, or renewed under this section may, but is 
6.12 	not required to, provide coverage of specific benefits, care provided by specific types of 
6.13 	health care providers, and categories of dependents and other persons, otherwise required 
6.14 	to be covered under the laws of this state. If a health plan does not provide coverages 
6.15 	referenced in this paragraph, the health plan company must provide to the purchaser, at the 
6.16 	time of initial purchase and each renewal, a written disclosure of the otherwise-required 
6.17 	coverage that the health plan does not cover.
6.18 	(c) A health plan company that qualifies under this section, except if it is a for-profit 
6.19 	health maintenance organization, is eligible for a certificate of authority from the 
6.20 	commissioner of health on the same basis as nonprofit entities for purposes of providing 
6.21 	health plan coverage under this section, notwithstanding section 62D.03, subdivision 1, 
6.22 	and other provisions requiring that health maintenance organizations that do business 
6.23 	in this state be nonprofit entities.
6.24 	(d) The commissioner of commerce or the commissioner of health, whichever has 
6.25 	authority over the type of health plan company involved, shall enforce compliance with 
6.26 	this section.
6.27 		Subd. 3.Conflict of laws. In the event of any conflict between this section and 
6.28 	other laws of this state, this section governs.
6.29 		Subd. 4.Interstate compacts. The commissioner may seek to arrange one or more 
6.30 	interstate compacts to facilitate the operation of this section.

6.31 	EFFECTIVE DATE. This section is effective January 1, 2011, and applies to 
6.32 	coverage offered, issued, sold, or renewed on or after that date.

6.33 	Sec. 6. Minnesota Statutes 2008, section 115A.31, is amended to read:
6.34 	115A.31 LOCAL GOVERNMENT DECISIONS; TIMELINES.
7.1 	If a county applies for or requests approval of establishment of a solid waste facility 
7.2 	within the boundaries of a local government unit, the local government unit shall approve 
7.3 	or disapprove the application or request within 120 days following the delivery by the 
7.4 	county to the local government unit of the application or request completed in accordance 
7.5 	with the requirements of applicable local ordinances.
7.6 	If the proposed facility is one for which an environmental impact statement or 
7.7 	environmental assessment worksheet is required under section 116D.04, the local 
7.8 	government unit shall approve or disapprove the application or request within 90 days 
7.9 	after the final determination of adequacy of the environmental impact statement or 
7.10 	environmental assessment worksheet.

7.11 	EFFECTIVE DATE. This section is effective July 1, 2010.

7.12 	Sec. 7. [116J.8737] JOB GROWTH INVESTMENT TAX CREDIT.
7.13 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms 
7.14 	have the meanings given.
7.15 	(b) "Qualifying small business" means a business that:
7.16 	(1) is engaged in, or is committed to engage in, biotechnology, technology, 
7.17 	manufacturing, agriculture, processing or assembling products, conducting research and 
7.18 	development, or developing a new product or business process;
7.19 	(2) is not engaged in real estate development, insurance, banking, lobbying, political 
7.20 	consulting, wholesale or retail trade, leisure, hospitality, construction, or professional 
7.21 	services provided by attorneys, accountants, business consultants, physicians, or health 
7.22 	care consultants;
7.23 	(3) has its headquarters in Minnesota;
7.24 	(4) employs at least 51 percent of the business's employees in Minnesota;
7.25 	(5) has less than 100 employees;
7.26 	(6) has less than $2,000,000 in annual gross sales receipts for the previous year;
7.27 	(7) is not a subsidiary or an affiliate of a business which employs more than 100 
7.28 	employees or has total gross sales receipts for the previous year of more than $2,000,000, 
7.29 	computed by aggregating all of the employees and gross sales receipts of the business 
7.30 	entities affiliated with the business;
7.31 	(8) has not previously received more than $2,000,000 in private equity investments;
7.32 	(9) has not previously received more than $500,000 in investments that have 
7.33 	qualified for and received tax credits under this section; and
7.34 	(10) for a business with five or more employees, measured on a full-time equivalent 
7.35 	basis:
8.1 	(i) provides wages and benefits to at least 75 percent of its employees in excess of 
8.2 	the first five employees, equal to or greater than 175 percent of the federal poverty level 
8.3 	for a family of four; and
8.4 	(ii) provides wages and benefits to its employees in excess of the first five employees, 
8.5 	equal to or greater than 110 percent of the federal poverty level for a family of four.
8.6 	(c) "Regional investment fund" means a pooled investment fund that:
8.7 	(1) invests in qualifying small businesses;
8.8 	(2) is organized as a limited liability company or other pass-through entity; and
8.9 	(3) has no fewer than five separate investors, each of whom is a qualified taxpayer, as 
8.10 	defined in paragraph (d), and owns no more than 20 percent of the outstanding ownership 
8.11 	interests in the fund.
8.12 	For purposes of determining the number of investors and the ownership interests of 
8.13 	an investor under this clause, the ownership interests of an investor include those of the 
8.14 	investor's spouse, children, or siblings, and any corporation, limited liability company, 
8.15 	partnership, or trust in which the investor has a controlling equity interest or in which the 
8.16 	investor exercises management control.
8.17 	(d) "Qualified taxpayer" means:
8.18 	(1) an accredited investor, within the meaning of Regulation D of the Securities and 
8.19 	Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether 
8.20 	part of a pass-through entity or not, who:
8.21 	(i) does not own, control, or hold power to vote 20 percent or more of the outstanding 
8.22 	securities of the qualifying small business in which the eligible investment is proposed; or
8.23 	(ii) does not receive more than 50 percent of the gross annual income from the 
8.24 	qualifying small business in which the eligible investment is proposed.
8.25 	(2) A member of the immediate family of a taxpayer disqualified by this subdivision 
8.26 	is not eligible for a credit under this section. For purposes of this subdivision, "immediate 
8.27 	family" means the taxpayer's spouse, parent, sibling, or child, or the spouse of any person 
8.28 	listed in this clause.
8.29 		Subd. 2.Credit allowed; limitations; carryover. (a) A qualified taxpayer is 
8.30 	allowed a credit against the tax imposed under chapter 290 for investments made in a 
8.31 	qualified regional investment fund or a qualifying small business. The credit equals 50 
8.32 	percent of the qualified taxpayer's investment in the business, but not to exceed the 
8.33 	lesser of:
8.34 	(1) the liability for tax under chapter 290, including the applicable alternative 
8.35 	minimum tax, but excluding the minimum fee under section 290.0922; or
9.1 	(2)(i) the amount of the certificate provided to the taxpayer under subdivision 
9.2 	4, paragraph (c); or
9.3 	(ii) the amount of the certificate provided to the qualified individual investor under 
9.4 	subdivision 6.
9.5 	(b) If the amount of the credit under this subdivision for any taxable year exceeds 
9.6 	the limitations under paragraph (a), the excess is a credit carryover to each of the ten 
9.7 	succeeding taxable years. The entire amount of the excess unused credit for the taxable 
9.8 	year must be carried first to the earliest of the taxable years to which the credit may be 
9.9 	carried. The amount of the unused credit that may be added under this paragraph may not 
9.10 	exceed the taxpayer's liability for tax less the credit for the taxable year.
9.11 		Subd. 3.Qualified regional investment fund; requirements. (a) To be certified as 
9.12 	a qualified regional investment fund for the purposes of this section, a regional investment 
9.13 	fund must:
9.14 	(1) have a minimum of two-thirds of the regional investment fund's members, 
9.15 	shareholders, or partners be residents of the region that is the focus of the fund; and
9.16 	(2) allocate at least 60 percent of the funds it invests to qualifying small businesses 
9.17 	within its region of focus.
9.18 	(b) Investments from other qualified regional investment funds into the qualifying 
9.19 	small businesses that are the recipients of the qualified regional investment fund's 
9.20 	investment shall count toward the allocations in paragraph (a), clause (2).
9.21 	(c) Investments in the fund may consist of equity investments or notes that pay 
9.22 	interest or other fixed amounts, or any combination of both, as the fund's governing body 
9.23 	determines appropriate.
9.24 		Subd. 4.Certification of funds. (a) Regional investment funds may apply to the 
9.25 	commissioner for certification as a qualified regional investment fund. The application 
9.26 	must be in the form and be made under the procedures specified by the commissioner, 
9.27 	accompanied by an application fee of $1,250. Fees are appropriated to the commissioner 
9.28 	for personnel and administrative expenses related to administering the program.
9.29 	(b) The commissioner may certify up to 20 regional investment funds per year. 
9.30 	Certifications shall be awarded in the order of the qualifying applications received, subject 
9.31 	to the following limitations:
9.32 	(1) the commissioner may certify no more than three regional investment funds per 
9.33 	year that seek business investment opportunities that may qualify for and receive tax 
9.34 	credits under this section in more than 15 Minnesota counties; and
9.35 	(2) the commissioner may certify no more than five regional investment funds 
9.36 	per year that seek business investment opportunities that may qualify for and receive 
10.1 	tax credits under this section in the metropolitan area, as defined in section 473.121, 
10.2 	subdivision 2.
10.3 	(c) The commissioner shall provide credit certificates to investors in a qualified 
10.4 	regional fund to credits under this section, in proportion to the investment of the investor 
10.5 	in the fund and upon a showing by the fund of an investment in a qualifying small 
10.6 	business, of no more than $500,000 per fund per year. The commissioner may not issue a 
10.7 	total of more than $15,000,000 per year in credit certificates to fund investors.
10.8 		Subd. 5.Fund requirements. The commissioner shall enter into an agreement 
10.9 	with each of the qualified regional investment funds certified under subdivision 4. Each 
10.10 	agreement must include a provision requiring the qualified regional investment fund to 
10.11 	annually report on the employment figures and wages and benefits paid by the businesses 
10.12 	in which investments are made and a provision stating the specific manner in which 
10.13 	the qualified regional investment fund will comply or is complying with the allocation 
10.14 	requirements under subdivision 3, paragraph (a), clause (2).
10.15 		Subd. 6.Certification of individual investors. (a) Qualified taxpayers may apply 
10.16 	to the commissioner of employment and economic development for certification as a 
10.17 	qualified individual investor. The application must be in the form and be made under the 
10.18 	procedures specified by the commissioner, accompanied by an application fee of $250. 
10.19 	Fees are appropriated to the commissioner for personnel and administrative expenses 
10.20 	related to administering the program.
10.21 	(b) The commissioner may certify up to 40 qualified individual investors per year. 
10.22 	Certifications shall be awarded in the order of qualifying applications received; however, 
10.23 	the commissioner may certify no more than ten qualified individual investors per year that 
10.24 	seek business investment opportunities that may qualify for and receive tax credits under 
10.25 	this section in the metropolitan area, as defined in section 473.121, subdivision 2.
10.26 	(c) The commissioner shall provide credit certificates to qualified individual 
10.27 	investors, upon a showing by the qualified individual investor of investments of at least 
10.28 	$25,000 in qualifying small businesses. 
10.29 		Subd. 7.Qualified individual investor requirements. The commissioner shall 
10.30 	enter into an agreement with each qualified individual investor certified under subdivision 
10.31 	6. Each agreement must include a provision requiring the qualified individual investor to 
10.32 	annually report on the employment figures and wages and benefits paid by the businesses 
10.33 	in which investments are made and a provision stating the specific manner in which the 
10.34 	qualified individual investor will comply or is complying with the allocation requirements 
10.35 	under subdivision 6, paragraph (c).
11.1 		Subd. 8.Rulemaking. The commissioner's actions in establishing procedures and 
11.2 	requirements and in making determinations and certifications to administer this section are 
11.3 	not a rule for purposes of chapter 14, are not subject to the Administrative Procedure Act 
11.4 	contained in chapter 14, and are not subject to section 14.386.

11.5 	EFFECTIVE DATE. This section is effective the day following final enactment, 
11.6 	for taxable years beginning after December 31, 2009, and only applies to investments 
11.7 	made after the qualified regional investment fund or qualified individual investor has been 
11.8 	certified by the commissioner of economic development.

11.9 	Sec. 8. Minnesota Statutes 2008, section 135A.031, is amended by adding a 
11.10 	subdivision to read:
11.11 		Subd. 8.Incentives for appropriations; University of Minnesota.  (a) Beginning 
11.12 	in fiscal year 2012 and every fiscal year thereafter, .... percent of any general fund 
11.13 	appropriation to the Board of Regents for the operation and maintenance of the University 
11.14 	of Minnesota is available after the board demonstrates to the commissioner of management 
11.15 	and budget that its job placement goals have been achieved. Job placement goals for 
11.16 	graduates of the University of Minnesota must be submitted by the board to the governor 
11.17 	and the legislature as part of the biennial budget request. Specific job placement goals for 
11.18 	a biennium must be established in law for each fiscal year. Appropriations retained for a 
11.19 	fiscal year under this subdivision are payable after the goals have been achieved.
11.20 	(b) Beginning in fiscal year 2012 and every fiscal year thereafter, an additional 
11.21 	general fund incentive payment may be made to the Board of Regents based on successful 
11.22 	commercialization of intellectual property through the university's Office for Technology 
11.23 	Commercialization or other university business development efforts. Measurements of 
11.24 	successful commercialization must be submitted to the governor and the legislature as 
11.25 	part of the biennial budget request. The criteria and the amount of the incentive payment 
11.26 	must be established in law and achievement of the criteria must be demonstrated to the 
11.27 	commissioner of management and budget prior to the incentive payment. 

11.28 	Sec. 9. Minnesota Statutes 2008, section 135A.031, is amended by adding a 
11.29 	subdivision to read:
11.30 		Subd. 9.Incentives for appropriations; Minnesota State Colleges and 
11.31 	Universities.  Beginning in fiscal year 2012 and every fiscal year thereafter, ... percent 
11.32 	of any general fund appropriation to the board of trustees for the general operations of 
11.33 	the Minnesota State Colleges and Universities or one of its campuses is available after 
11.34 	the board demonstrates to the commissioner of management and budget that its job 
12.1 	placement goals have been achieved. Job placement goals for graduates of the Minnesota 
12.2 	State Colleges and Universities must be submitted by the board to the governor and the 
12.3 	legislature as part of the biennial budget request. Specific job placement goals for a 
12.4 	biennium must be established in law.

12.5 	Sec. 10. Minnesota Statutes 2008, section 177.24, subdivision 2, is amended to read:
12.6 		Subd. 2.Gratuities not applied. No employer may directly or indirectly credit, 
12.7 	apply, or utilize gratuities towards payment of the minimum wage set by this section or 
12.8 	federal law. An employer may pay an employee engaged in an occupation in which the 
12.9 	employee customarily and regularly receives more than $30 per month in gratuities an 
12.10 	amount less than the applicable minimum wage under subdivision 1 if the employer can 
12.11 	establish that after adding the gratuities received by the employee to the wages paid by 
12.12 	the employer, no less than the minimum wage under subdivision 1 was received by the 
12.13 	employee. Regardless of the amount of gratuities received by the employee, no employer 
12.14 	may pay the employee less than $2.13 per hour. This subdivision shall not apply to any 
12.15 	employee unless the employee has been informed by the employer of the provisions 
12.16 	of this subdivision and all gratuities received by the employee have been retained by 
12.17 	the employee.

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

12.19 	Sec. 11. [179.87] COMPULSORY MEMBERSHIP IN LABOR ORGANIZATION 
12.20 	PROHIBITED.
12.21 	Notwithstanding any other state law or rule to the contrary, no person, as a condition 
12.22 	of employment, is required to become a member of a labor union or pay any dues, fees, 
12.23 	assessments, or other charges of any kind to a labor union or to any charity or other third 
12.24 	party in lieu of such payments. Nothing in this section prevents a person from voluntarily 
12.25 	belonging or voluntarily providing financial support to a labor union. Any person who 
12.26 	directly or indirectly violates this section is guilty of a gross misdemeanor. This section 
12.27 	applies to all union employment contracts entered into after the effective date of this 
12.28 	section and applies to any renewal or extension of any existing contract. As used in 
12.29 	this section, labor union means any organization, agency, or employee representation 
12.30 	committee or organization that exists for the purpose, in whole or in part, of dealing 
12.31 	with employees concerning wages, rates of pay, hours of work, other conditions of 
12.32 	employment, or other forms of compensation; any organization that exists for the purpose 
12.33 	of collective bargaining or of dealing with employers concerning grievances; and any 
12.34 	organization providing other mutual aid or protection in connection with employment.

13.1 	EFFECTIVE DATE. This section is effective the day following final enactment.

13.2 	Sec. 12. Minnesota Statutes 2008, section 216B.243, subdivision 7, is amended to read:
13.3 		Subd. 7.Participation by other agency or political subdivision. (a) Other 
13.4 	state agencies authorized to issue permits for siting, construction or operation of large 
13.5 	energy facilities, and those state agencies authorized to participate in matters before the 
13.6 	commission involving utility rates and adequacy of utility services, shall present their 
13.7 	position regarding need and participate in the public hearing process prior to the issuance 
13.8 	or denial of a certificate of need. Issuance or denial of certificates of need shall be the sole 
13.9 	and exclusive prerogative of the commission and these determinations and certificates 
13.10 	shall be binding upon other state departments and agencies, regional, county, and local 
13.11 	governments and special purpose government districts except as provided in sections 
13.12 	116C.01 to 116C.08and 116D.04, subdivision 9.
13.13 	(b) An applicant for a certificate of need shall notify the commissioner of agriculture 
13.14 	if the proposed project will impact cultivated agricultural land, as that term is defined in 
13.15 	section 216G.01, subdivision 4. The commissioner may participate in any proceeding on 
13.16 	the application and advise the commission as to whether to grant the certificate of need, 
13.17 	and the best options for mitigating adverse impacts to agricultural lands if the certificate is 
13.18 	granted. The Department of Agriculture shall be the lead agency on the development of 
13.19 	any agricultural mitigation plan required for the project.

13.20 	EFFECTIVE DATE. This section is effective July 1, 2010.

13.21 	Sec. 13. Minnesota Statutes 2008, section 273.13, subdivision 24, is amended to read:
13.22 		Subd. 24.Class 3. (a) Commercial and industrial property and utility real and 
13.23 	personal property is class 3a.
13.24 	(1) Except as otherwise provided, Each parcel of commercial, industrial, or utility 
13.25 	real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 one
13.26 	percent of the remaining market value. In the case of contiguous parcels of property 
13.27 	owned by the same person or entity, only the value equal to the first-tier value of the 
13.28 	contiguous parcels qualifies for the reduced class rate, except that contiguous parcels 
13.29 	owned by the same person or entity shall be eligible for the first-tier value class rate on 
13.30 	each separate business operated by the owner of the property, provided the business is 
13.31 	housed in a separate structure. For the purposes of this subdivision, the first tier means the 
13.32 	first $150,000 of market value. Real property owned in fee by a utility for transmission 
13.33 	line right-of-way shall be classified at the class rate for the higher tier.
14.1 	For purposes of this subdivision, parcels are considered to be contiguous even if 
14.2 	they are separated from each other by a road, street, waterway, or other similar intervening 
14.3 	type of property. Connections between parcels that consist of power lines or pipelines do 
14.4 	not cause the parcels to be contiguous. Property owners who have contiguous parcels of 
14.5 	property that constitute separate businesses that may qualify for the first-tier class rate shall 
14.6 	notify the assessor by July 1, for treatment beginning in the following taxes payable year.
14.7 	(2) All personal property that is: (i) part of an electric generation, transmission, or 
14.8 	distribution system; or (ii) part of a pipeline system transporting or distributing water, gas, 
14.9 	crude oil, or petroleum products; and (iii) not described in clause (3), and all railroad 
14.10 	operating property has a class rate as provided under clause (1) for the first tier of market 
14.11 	value and the remaining market value. In the case of multiple parcels in one county that 
14.12 	are owned by one person or entity, only one first tier amount is eligible for the reduced rate.
14.13 	(3) The entire market value of personal property that is: (i) tools, implements, and 
14.14 	machinery of an electric generation, transmission, or distribution system; (ii) tools, 
14.15 	implements, and machinery of a pipeline system transporting or distributing water, gas, 
14.16 	crude oil, or petroleum products; or (iii) the mains and pipes used in the distribution of 
14.17 	steam or hot or chilled water for heating or cooling buildings, has a class rate as provided 
14.18 	under clause (1) for the remaining market value in excess of the first tier.
14.19 	(b) Employment property defined in section 469.166, during the period provided 
14.20 	in section 469.170, shall constitute class 3b. The class rates for class 3b property are 
14.21 	determined under paragraph (a). 

14.22 	EFFECTIVE DATE. This section is effective for property taxes payable in 2011 
14.23 	and thereafter.

14.24 	Sec. 14. Minnesota Statutes 2008, section 275.025, subdivision 1, is amended to read:
14.25 		Subdivision 1.Levy amount. The state general levy is levied against 
14.26 	commercial-industrial property and seasonal residential recreational property, as defined 
14.27 	in this section. The state general levy base amount is $592,000,000 $38,950,000 for taxes 
14.28 	payable in 2002 2010. For taxes payable in subsequent years, the levy base amount is 
14.29 	increased each year by multiplying the levy base amount for the prior year by the sum 
14.30 	of one plus the rate of increase, if any, in the implicit price deflator for government 
14.31 	consumption expenditures and gross investment for state and local governments prepared 
14.32 	by the Bureau of Economic Analysts of the United States Department of Commerce for 
14.33 	the 12-month period ending March 31 of the year prior to the year the taxes are payable. 
14.34 	The tax under this section is not treated as a local tax rate under section 469.177 and is not 
14.35 	the levy of a governmental unit under chapters 276A and 473F.
15.1 	The commissioner shall increase or decrease the preliminary or final rate for a year 
15.2 	as necessary to account for errors and tax base changes that affected a preliminary or final 
15.3 	rate for either of the two preceding years. Adjustments are allowed to the extent that the 
15.4 	necessary information is available to the commissioner at the time the rates for a year must 
15.5 	be certified, and for the following reasons:
15.6 	(1) an erroneous report of taxable value by a local official;
15.7 	(2) an erroneous calculation by the commissioner; and
15.8 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
15.9 	residential recreational property reported on the abstracts of tax lists submitted under 
15.10 	section 275.29 that was not reported on the abstracts of assessment submitted under 
15.11 	section 270C.89 for the same year.
15.12 	The commissioner may, but need not, make adjustments if the total difference in the tax 
15.13 	levied for the year would be less than $100,000.

15.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2011 and 
15.15 	thereafter.

15.16 	Sec. 15. Minnesota Statutes 2008, section 275.025, subdivision 4, is amended to read:
15.17 		Subd. 4.Apportionment and levy of state general tax. Ninety-five percent of the 
15.18 	state general tax must be levied by applying a uniform rate to all commercial-industrial tax 
15.19 	capacity and five percent of The state general tax must be levied by applying a uniform 
15.20 	rate to all seasonal residential recreational tax capacity. On or before October 1 each year, 
15.21 	the commissioner of revenue shall certify the preliminary state general levy rates to each 
15.22 	county auditor that must be used to prepare the notices of proposed property taxes for taxes 
15.23 	payable in the following year. By January 1 of each year, the commissioner shall certify 
15.24 	the final state general levy rate to each county auditor that shall be used in spreading taxes.

15.25 	EFFECTIVE DATE. This section is effective for taxes payable in 2011 and 
15.26 	thereafter.

15.27 	Sec. 16. Minnesota Statutes 2009 Supplement, section 289A.18, subdivision 1, is 
15.28 	amended to read:
15.29 		Subdivision 1.Individual income, fiduciary income, corporate franchise, and 
15.30 	entertainment taxes; partnership and S corporation returns; information returns; 
15.31 	mining company returns. The returns required to be made under sections 289A.08 and 
15.32 	289A.12 must be filed at the following times:
16.1 	(1) returns made on the basis of the calendar year must be filed on April 15 following 
16.2 	the close of the calendar year, except that returns of corporations must be filed on March 
16.3 	15 following the close of the calendar year;
16.4 	(2) returns made on the basis of the fiscal year must be filed on the 15th day of the 
16.5 	fourth month following the close of the fiscal year, except that returns of corporations 
16.6 	must be filed on the 15th day of the third month following the close of the fiscal year;
16.7 	(3) returns for a fractional part of a year must be filed on the 15th day of the fourth 
16.8 	month following the end of the month in which falls the last day of the period for which 
16.9 	the return is made, except that the returns of corporations must be filed on the 15th day of 
16.10 	the third month following the end of the tax year; or, in the case of a corporation which is 
16.11 	a member of a unitary group, the return of the corporation must be filed on the 15th day of 
16.12 	the third month following the end of the tax year of the unitary group in which falls the 
16.13 	last day of the period for which the return is made;
16.14 	(4) in the case of a final return of a decedent for a fractional part of a year, the return 
16.15 	must be filed on the 15th day of the fourth month following the close of the 12-month 
16.16 	period that began with the first day of that fractional part of a year;
16.17 	(5) in the case of the return of a cooperative association, returns must be filed on or 
16.18 	before the 15th day of the ninth month following the close of the taxable year;
16.19 	(6) if a corporation has been divested from a unitary group and files a return for 
16.20 	a fractional part of a year in which it was a member of a unitary business that files a 
16.21 	combined report under section 290.17, subdivision 4, the divested corporation's return 
16.22 	must be filed on the 15th day of the third month following the close of the common 
16.23 	accounting period that includes the fractional year;
16.24 	(7) returns of entertainment entities must be filed on April 15 following the close of 
16.25 	the calendar year;
16.26 	(8)(7) returns required to be filed under section 289A.08, subdivision 4, must be 
16.27 	filed on the 15th day of the fifth month following the close of the taxable year;
16.28 	(9) returns of mining companies must be filed on May 1 following the close of the 
16.29 	calendar year; and
16.30 	(10) (8) returns required to be filed with the commissioner under section 289A.12, 
16.31 	subdivision 2, 4 to 10, or 16 must be filed within 30 days after being demanded by the 
16.32 	commissioner.

16.33 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
16.34 	December 31, 2009.

16.35 	Sec. 17. Minnesota Statutes 2008, section 289A.20, subdivision 1, is amended to read:
17.1 		Subdivision 1.Individual income, fiduciary income, mining company, corporate 
17.2 	franchise, and entertainment taxes. (a) Individual income, and fiduciary, mining 
17.3 	company, and corporate franchise taxes must be paid to the commissioner on or before the 
17.4 	date the return must be filed under section 289A.18, subdivision 1, or the extended due 
17.5 	date as provided in section 289A.19, unless an earlier date for payment is provided. 
17.6 	Notwithstanding any other law, a taxpayer whose unpaid liability for income or 
17.7 	corporate franchise taxes, as reflected upon the return, is $1 or less need not pay the tax.
17.8 	(b) Entertainment taxes must be paid on or before the date the return must be filed 
17.9 	under section 289A.18, subdivision 1. 
17.10 	(c) If a fiduciary administers 100 or more trusts, fiduciary income taxes for all trusts 
17.11 	administered by the fiduciary must be paid by electronic means.

17.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
17.13 	December 31, 2009.

17.14 	Sec. 18. Minnesota Statutes 2008, section 289A.30, subdivision 1, is amended to read:
17.15 		Subdivision 1.Fiduciary income, corporate franchise tax. Where good cause 
17.16 	exists, the commissioner may extend the time for payment of the amount determined as a 
17.17 	fiduciary income tax or corporate franchise tax by the taxpayer, or an amount determined 
17.18 	as a deficiency, for a period of not more than six months from the date prescribed for 
17.19 	the payment of the tax.

17.20 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
17.21 	December 31, 2009.

17.22 	Sec. 19. Minnesota Statutes 2008, section 289A.31, subdivision 1, is amended to read:
17.23 		Subdivision 1.Individual income, fiduciary income, mining company, corporate 
17.24 	franchise, and entertainment taxes. (a) Individual income, and fiduciary income, mining 
17.25 	company, and corporate franchise taxes, and interest and penalties, must be paid by the 
17.26 	taxpayer upon whom the tax is imposed, except in the following cases:
17.27 	(1) The tax due from a decedent for that part of the taxable year in which the 
17.28 	decedent died during which the decedent was alive and the taxes, interest, and penalty 
17.29 	due for the prior years must be paid by the decedent's personal representative, if any. 
17.30 	If there is no personal representative, the taxes, interest, and penalty must be paid by 
17.31 	the transferees, as defined in section 270C.58, subdivision 3, to the extent they receive 
17.32 	property from the decedent;
18.1 	(2) The tax due from an infant or other incompetent person must be paid by the 
18.2 	person's guardian or other person authorized or permitted by law to act for the person;
18.3 	(3) The tax due from the estate of a decedent must be paid by the estate's personal 
18.4 	representative;
18.5 	(4) The tax due from a trust, including those within the definition of a corporation, as 
18.6 	defined in section 290.01, subdivision 4, must be paid by a trustee; and
18.7 	(5) The tax due from a taxpayer whose business or property is in charge of a 
18.8 	receiver, trustee in bankruptcy, assignee, or other conservator, must be paid by the 
18.9 	person in charge of the business or property so far as the tax is due to the income from 
18.10 	the business or property.
18.11 	(b) Entertainment taxes are the joint and several liability of the entertainer and the 
18.12 	entertainment entity. The payor is liable to the state for the payment of the tax required to 
18.13 	be deducted and withheld under section 290.9201, subdivision 7, and is not liable to the 
18.14 	entertainer for the amount of the payment.
18.15 	(c) The tax imposed under section 290.0922 on partnerships is the joint and several 
18.16 	liability of the partnership and the general partners.

18.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
18.18 	December 31, 2009.

18.19 	Sec. 20. Minnesota Statutes 2009 Supplement, section 289A.38, subdivision 7, is 
18.20 	amended to read:
18.21 		Subd. 7.Federal tax changes. If the amount of income, items of tax preference, 
18.22 	deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for 
18.23 	any period, as reported to the Internal Revenue Service is changed or corrected by the 
18.24 	commissioner of Internal Revenue or other officer of the United States or other competent 
18.25 	authority, or where a renegotiation of a contract or subcontract with the United States 
18.26 	results in a change in income, items of tax preference, deductions, credits, or withholding 
18.27 	tax, or, in the case of estate tax, where there are adjustments to the taxable estate, the 
18.28 	taxpayer shall report the change or correction or renegotiation results in writing to the 
18.29 	commissioner. The report must be submitted within 180 days after the final determination 
18.30 	and must be in the form of either an amended Minnesota estate, withholding tax, corporate 
18.31 	franchise tax, or income tax return conceding the accuracy of the federal determination 
18.32 	or a letter detailing how the federal determination is incorrect or does not change the 
18.33 	Minnesota tax. An amended Minnesota income tax return must be accompanied by an 
18.34 	amended property tax refund return, if necessary. A taxpayer filing an amended federal 
19.1 	tax return must also file a copy of the amended return with the commissioner of revenue 
19.2 	within 180 days after filing the amended return.

19.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
19.4 	December 31, 2009.

19.5 	Sec. 21. Minnesota Statutes 2008, section 289A.38, subdivision 12, is amended to read:
19.6 		Subd. 12.Request for early audit for individual income, and fiduciary income, 
19.7 	mining company, and corporate franchise taxes. (a) Tax must be assessed within 
19.8 	18 months after written request for an assessment has been made in the case of income 
19.9 	received (1) during the lifetime of a decedent, (2) by the decedent's estate during the 
19.10 	period of administration, or (3) by a trustee of a terminating trust or other fiduciary 
19.11 	who, because of custody of assets, would be liable for the payment of tax under section 
19.12 	270C.58, subdivision 2, or (4) by a mining company or a corporation. A proceeding in 
19.13 	court for the collection of the tax must begin within two years after written request for the 
19.14 	assessment (filed after the return is made and in the form the commissioner prescribes) by 
19.15 	the personal representative or other fiduciary representing the estate of the decedent, or 
19.16 	by the trustee of a terminating trust or other fiduciary who, because of custody of assets, 
19.17 	would be liable for the payment of tax under section 270C.58, subdivision 2, or by the 
19.18 	corporation. Except as provided in section 289A.42, subdivision 1, an assessment must 
19.19 	not be made after the expiration of 3-1/2 years after the return was filed, and an action 
19.20 	must not be brought after the expiration of four years after the return was filed.
19.21 	(b) Paragraph (a) only applies in the case of a mining company or a corporation if:
19.22 	(1) the written request notifies the commissioner that the corporation contemplates 
19.23 	dissolution at or before the expiration of the 18-month period;
19.24 	(2) the dissolution is begun in good faith before the expiration of the 18-month 
19.25 	period; and
19.26 	(3) the dissolution is completed within the 18-month period.

19.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
19.28 	December 31, 2009.

19.29 	Sec. 22. Minnesota Statutes 2008, section 289A.50, subdivision 1, is amended to read:
19.30 		Subdivision 1.General right to refund. (a) Subject to the requirements of this 
19.31 	section and section 289A.40, a taxpayer who has paid a tax in excess of the taxes lawfully 
19.32 	due and who files a written claim for refund will be refunded or credited the overpayment 
19.33 	of the tax determined by the commissioner to be erroneously paid.
20.1 	(b) The claim must specify the name of the taxpayer, the date when and the period 
20.2 	for which the tax was paid, the kind of tax paid, the amount of the tax that the taxpayer 
20.3 	claims was erroneously paid, the grounds on which a refund is claimed, and other 
20.4 	information relative to the payment and in the form required by the commissioner. An 
20.5 	income tax, or estate tax, or corporate franchise tax return, or amended return claiming an 
20.6 	overpayment constitutes a claim for refund.
20.7 	(c) When, in the course of an examination, and within the time for requesting a 
20.8 	refund, the commissioner determines that there has been an overpayment of tax, the 
20.9 	commissioner shall refund or credit the overpayment to the taxpayer and no demand 
20.10 	is necessary. If the overpayment exceeds $1, the amount of the overpayment must 
20.11 	be refunded to the taxpayer. If the amount of the overpayment is less than $1, the 
20.12 	commissioner is not required to refund. In these situations, the commissioner does not 
20.13 	have to make written findings or serve notice by mail to the taxpayer.
20.14 	(d) If the amount allowable as a credit for withholding, estimated taxes, or dependent 
20.15 	care exceeds the tax against which the credit is allowable, the amount of the excess is 
20.16 	considered an overpayment. The refund allowed by section 290.06, subdivision 23, is also 
20.17 	considered an overpayment. The requirements of section 270C.33 do not apply to the 
20.18 	refunding of such an overpayment shown on the original return filed by a taxpayer.
20.19 	(e) If the entertainment tax withheld at the source exceeds by $1 or more the taxes, 
20.20 	penalties, and interest reported in the return of the entertainment entity or imposed by 
20.21 	section 290.9201, the excess must be refunded to the entertainment entity. If the excess is 
20.22 	less than $1, the commissioner need not refund that amount.
20.23 	(f) If the surety deposit required for a construction contract exceeds the liability of 
20.24 	the out-of-state contractor, the commissioner shall refund the difference to the contractor.
20.25 	(g) An action of the commissioner in refunding the amount of the overpayment does 
20.26 	not constitute a determination of the correctness of the return of the taxpayer.
20.27 	(h) There is appropriated from the general fund to the commissioner of revenue the 
20.28 	amount necessary to pay refunds allowed under this section.

20.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
20.30 	December 31, 2009.

20.31 	Sec. 23. Minnesota Statutes 2008, section 289A.60, subdivision 1, is amended to read:
20.32 		Subdivision 1.Penalty for failure to pay tax. (a) If a corporate franchise, fiduciary 
20.33 	income, mining company, estate, partnership, S corporation, or nonresident entertainer 
20.34 	tax is not paid within the time specified for payment, a penalty of six percent is added to 
21.1 	the unpaid tax, except that if a corporation or mining company meets the requirements of 
21.2 	section 289A.19, subdivision 2, the penalty is not imposed. 
21.3 	(b) For the taxes listed in paragraph (a), in addition to the penalty in that paragraph, 
21.4 	whether imposed or not, if a return or amended return is filed after the due date, without 
21.5 	regard to extensions, and any tax reported as remaining due is not remitted with the return 
21.6 	or amended return, a penalty of five percent of the tax not paid is added to the tax. If the 
21.7 	commissioner issues an order assessing additional tax for a tax listed in paragraph (a), 
21.8 	and the tax is not paid within 60 days after the mailing of the order or, if appealed, within 
21.9 	60 days after final resolution of the appeal, a penalty of five percent of the unpaid tax 
21.10 	is added to the tax.
21.11 	(c) If an individual income tax is not paid within the time specified for payment, a 
21.12 	penalty of four percent is added to the unpaid tax. There is a presumption of reasonable 
21.13 	cause for the late payment if the individual: (i) pays by the due date of the return at 
21.14 	least 90 percent of the amount of tax, after credits other than withholding and estimated 
21.15 	payments, shown owing on the return; (ii) files the return within six months after the due 
21.16 	date; and (iii) pays the remaining balance of the reported tax when the return is filed.
21.17 	(d) If the commissioner issues an order assessing additional individual income tax, 
21.18 	and the tax is not paid within 60 days after the mailing of the order or, if appealed, within 
21.19 	60 days after final resolution of the appeal, a penalty of four percent of the unpaid tax 
21.20 	is added to the tax.
21.21 	(e) If a withholding or sales or use tax is not paid within the time specified for 
21.22 	payment, a penalty must be added to the amount required to be shown as tax. The penalty 
21.23 	is five percent of the tax not paid on or before the date specified for payment of the tax 
21.24 	if the failure is for not more than 30 days, with an additional penalty of five percent of 
21.25 	the amount of tax remaining unpaid during each additional 30 days or fraction of 30 days 
21.26 	during which the failure continues, not exceeding 15 percent in the aggregate.

21.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
21.28 	December 31, 2009.

21.29 	Sec. 24. Minnesota Statutes 2008, section 289A.60, subdivision 4, is amended to read:
21.30 		Subd. 4.Substantial understatement of liability; penalty. (a) The commissioner 
21.31 	of revenue shall impose a penalty for substantial understatement of any tax payable to the 
21.32 	commissioner, except a tax imposed under chapter 297A.
21.33 	(b) There must be added to the tax an amount equal to 20 percent of the amount of any 
21.34 	underpayment attributable to the understatement. There is a substantial understatement of 
21.35 	tax for the period if the amount of the understatement for the period exceeds the greater of:
22.1 	(1) ten percent of the tax required to be shown on the return for the period; or
22.2 	(2)(i) $10,000 in the case of a mining company or a corporation, other than an S 
22.3 	corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or 
22.4 	section 298.01 or 298.015, or
22.5 	(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or 
22.6 	a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015.
22.7 	(c) For a corporation, other than an S corporation, there is also a substantial 
22.8 	understatement of tax for any taxable year if the amount of the understatement for the 
22.9 	taxable year exceeds the lesser of:
22.10 	(1) ten percent of the tax required to be shown on the return for the taxable year 
22.11 	(or, if greater, $10,000); or
22.12 	(2) $10,000,000.
22.13 	(d) The term "understatement" means the excess of the amount of the tax required 
22.14 	to be shown on the return for the period, over the amount of the tax imposed that is 
22.15 	shown on the return. The excess must be determined without regard to items to which 
22.16 	subdivision 27 applies. The amount of the understatement shall be reduced by that part of 
22.17 	the understatement that is attributable to the tax treatment of any item by the taxpayer if 
22.18 	(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to 
22.19 	which the relevant facts affecting the item's tax treatment are adequately disclosed in the 
22.20 	return or in a statement attached to the return and (ii) there is a reasonable basis for the tax 
22.21 	treatment of the item. The exception for substantial authority under clause (1) does not 
22.22 	apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the 
22.23 	Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment 
22.24 	of an item attributable to a multiple-party financing transaction if the treatment does not 
22.25 	clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B) 
22.26 	of the Internal Revenue Code. The special rules in cases involving tax shelters provided in 
22.27 	section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax 
22.28 	shelter the principal purpose of which is the avoidance or evasion of state taxes.
22.29 	(e) (d) The commissioner may abate all or any part of the addition to the tax 
22.30 	provided by this section on a showing by the taxpayer that there was reasonable cause for 
22.31 	the understatement, or part of it, and that the taxpayer acted in good faith. The additional 
22.32 	tax and penalty shall bear interest at the rate specified in section 270C.40 from the time 
22.33 	the tax should have been paid until paid.

22.34 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
22.35 	December 31, 2009.

23.1 	Sec. 25. Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19a, 
23.2 	is amended to read:
23.3 		Subd. 19a.Additions to federal taxable income. For individuals, estates, and 
23.4 	trusts, there shall be added to federal taxable income:
23.5 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
23.6 	or governmental subdivision, municipality, or governmental agency or instrumentality 
23.7 	of any state other than Minnesota exempt from federal income taxes under the Internal 
23.8 	Revenue Code or any other federal statute; and
23.9 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
23.10 	Code, except the portion of the exempt-interest dividends derived from interest income 
23.11 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
23.12 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
23.13 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
23.14 	95 percent or more of the exempt-interest dividends that are paid by the regulated 
23.15 	investment company as defined in section 851(a) of the Internal Revenue Code, or the 
23.16 	fund of the regulated investment company as defined in section 851(g) of the Internal 
23.17 	Revenue Code, making the payment; and
23.18 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
23.19 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
23.20 	interest income on obligations of the state in which the tribe is located;
23.21 	(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid 
23.22 	or accrued within the taxable year under this chapter and the amount of taxes based on 
23.23 	net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other 
23.24 	state or to any province or territory of Canada, to the extent allowed as a deduction 
23.25 	under section 63(d) of the Internal Revenue Code, but the addition may not be more 
23.26 	than the amount by which the itemized deductions as allowed under section 63(d) of 
23.27 	the Internal Revenue Code exceeds the amount of the standard deduction as defined in 
23.28 	section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under 
23.29 	sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of 
23.30 	this paragraph, the disallowance of itemized deductions under section 68 of the Internal 
23.31 	Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are 
23.32 	the last itemized deductions disallowed;
23.33 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
23.34 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
23.35 	(4) the amount of income taxes paid or accrued within the taxable year under this 
23.36 	chapter and taxes based on net income paid to any other state or any province or territory 
24.1 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
24.2 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
24.3 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
24.4 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
24.5 	other than expenses or interest used in computing net interest income for the subtraction 
24.6 	allowed under subdivision 19b, clause (1);
24.7 	(6) the amount of a partner's pro rata share of net income which does not flow 
24.8 	through to the partner because the partnership elected to pay the tax on the income under 
24.9 	section 6242(a)(2) of the Internal Revenue Code;
24.10 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
24.11 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
24.12 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
24.13 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
24.14 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
24.15 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
24.16 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
24.17 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
24.18 	under section 168(k) is allowed;
24.19 	(8) for taxable years beginning before January 1, 2010, 80 percent of the amount by 
24.20 	which the deduction allowed by section 179 of the Internal Revenue Code exceeds the 
24.21 	deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended 
24.22 	through December 31, 2003;
24.23 	(9) to the extent deducted in computing federal taxable income, the amount of the 
24.24 	deduction allowable under section 199 of the Internal Revenue Code;
24.25 	(10) the exclusion allowed under section 139A of the Internal Revenue Code for 
24.26 	federal subsidies for prescription drug plans;
24.27 	(11) the amount of expenses disallowed under section 290.10, subdivision 2;
24.28 	(12) the amount deducted for qualified tuition and related expenses under section 
24.29 	222 of the Internal Revenue Code, to the extent deducted from gross income;
24.30 	(13) the amount deducted for certain expenses of elementary and secondary school 
24.31 	teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted 
24.32 	from gross income;
24.33 	(14) the additional standard deduction for property taxes payable that is allowable 
24.34 	under section 63(c)(1)(C) of the Internal Revenue Code;
24.35 	(15) the additional standard deduction for qualified motor vehicle sales taxes 
24.36 	allowable under section 63(c)(1)(E) of the Internal Revenue Code;
25.1 	(16) discharge of indebtedness income resulting from reacquisition of business 
25.2 	indebtedness and deferred under section 108(i) of the Internal Revenue Code; and
25.3 	(17) the amount of unemployment compensation exempt from tax under section 
25.4 	85(c) of the Internal Revenue Code.

25.5 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
25.6 	December 31, 2009.

25.7 	Sec. 26. Minnesota Statutes 2008, section 290.01, subdivision 19f, is amended to read:
25.8 		Subd. 19f.Basis modifications affecting gain or loss on disposition of property.
 25.9 	(a) For individuals, estates, and trusts, the basis of property is its adjusted basis for 
25.10 	federal income tax purposes except as set forth in paragraphs (f), (g), and (m). For 
25.11 	corporations, the basis of property is its adjusted basis for federal income tax purposes, 
25.12 	without regard to the time when the property became subject to tax under this chapter or to 
25.13 	whether out-of-state losses or items of tax preference with respect to the property were not 
25.14 	deductible under this chapter, except that the modifications to the basis for federal income 
25.15 	tax purposes set forth in paragraphs (b) to (j) are allowed to corporations, and the resulting 
25.16 	modifications to federal taxable income must be made in the year in which gain or loss 
25.17 	on the sale or other disposition of property is recognized.
25.18 	(b) The basis of property shall not be reduced to reflect federal investment tax credit.
25.19 	(c) The basis of property subject to the accelerated cost recovery system under 
25.20 	section 168 of the Internal Revenue Code shall be modified to reflect the modifications in 
25.21 	depreciation with respect to the property provided for in subdivision 19e. For certified 
25.22 	pollution control facilities for which amortization deductions were elected under section 
25.23 	169 of the Internal Revenue Code of 1954, the basis of the property must be increased by 
25.24 	the amount of the amortization deduction not previously allowed under this chapter.
25.25 	(d) For property acquired before January 1, 1933, the basis for computing a gain is 
25.26 	the fair market value of the property as of that date. The basis for determining a loss is 
25.27 	the cost of the property to the taxpayer less any depreciation, amortization, or depletion, 
25.28 	actually sustained before that date. If the adjusted cost exceeds the fair market value of the 
25.29 	property, then the basis is the adjusted cost regardless of whether there is a gain or loss.
25.30 	(e) The basis is reduced by the allowance for amortization of bond premium if an 
25.31 	election to amortize was made pursuant to Minnesota Statutes 1986, section 290.09, 
25.32 	subdivision 13, and the allowance could have been deducted by the taxpayer under this 
25.33 	chapter during the period of the taxpayer's ownership of the property. 
25.34 	(f) For assets placed in service before January 1, 1987, corporations, partnerships, 
25.35 	or individuals engaged in the business of mining ores other than iron ore or taconite 
26.1 	concentrates subject to the occupation tax under chapter 298 must use the occupation 
26.2 	tax basis of property used in that business.
26.3 	(g) For assets placed in service before January 1, 1990, corporations, partnerships, or 
26.4 	individuals engaged in the business of mining iron ore or taconite concentrates subject 
26.5 	to the occupation tax under chapter 298 must use the occupation tax basis of property 
26.6 	used in that business.
26.7 	(h) In applying the provisions of sections 301(c)(3)(B), 312(f) and (g), and 316(a)(1) 
26.8 	of the Internal Revenue Code, the dates December 31, 1932, and January 1, 1933, shall be 
26.9 	substituted for February 28, 1913, and March 1, 1913, respectively.
26.10 	(i) In applying the provisions of section 362(a) and (c) of the Internal Revenue Code, 
26.11 	the date December 31, 1956, shall be substituted for June 22, 1954.
26.12 	(j)(g) The basis of property shall be increased by the amount of intangible drilling 
26.13 	costs not previously allowed due to differences between this chapter and the Internal 
26.14 	Revenue Code.
26.15 	(k) The adjusted basis of any corporate partner's interest in a partnership is the same 
26.16 	as the adjusted basis for federal income tax purposes modified as required to reflect the 
26.17 	basis modifications set forth in paragraphs (b) to (j). The adjusted basis of a partnership 
26.18 	in which the partner is an individual, estate, or trust is the same as the adjusted basis for 
26.19 	federal income tax purposes modified as required to reflect the basis modifications set 
26.20 	forth in paragraphs (f) and (g).
26.21 	(l) (h) The modifications contained in paragraphs (b) to (j) (g) also apply to the basis 
26.22 	of property that is determined by reference to the basis of the same property in the hands 
26.23 	of a different taxpayer or by reference to the basis of different property.

26.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
26.25 	December 31, 2009.

26.26 	Sec. 27. Minnesota Statutes 2008, section 290.01, subdivision 22, is amended to read:
26.27 		Subd. 22.Taxable net income. For tax years beginning after December 31, 1986, 
26.28 	the term "taxable net income" means:
26.29 	(1) for resident individuals the same as net income;
26.30 	(2) for individuals who were not residents of Minnesota for the entire year, the same 
26.31 	as net income except that the tax is imposed only on the Minnesota apportioned share of 
26.32 	that income as determined pursuant to section 290.06, subdivision 2c, paragraph (e); 
26.33 	(3) for all other taxpayers, the part of net income that is allocable to Minnesota by 
26.34 	assignment or apportionment under one or more of sections 290.17, 290.191, 290.20, 
26.35 	and 290.36. 
27.1 	For tax years beginning before January 1, 1987, the term "taxable net income" 
27.2 	means the net income assignable to this state pursuant to sections 290.17 to 290.20. For 
27.3 	corporations, taxable net income is then reduced by the deductions contained in section 
27.4 	290.21.

27.5 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
27.6 	December 31, 2009.

27.7 	Sec. 28. Minnesota Statutes 2008, section 290.01, subdivision 29, is amended to read:
27.8 		Subd. 29.Taxable income. The term "taxable income" means:
27.9 	(1) for individuals, estates, and trusts, the same as taxable net income;.
27.10 	(2) for corporations, the taxable net income less
27.11 	(i) the net operating loss deduction under section 290.095;
27.12 	(ii) the dividends received deduction under section 290.21, subdivision 4;
27.13 	(iii) the exemption for operating in a job opportunity building zone under section 
27.14 	469.317;
27.15 	(iv) the exemption for operating in a biotechnology and health sciences industry 
27.16 	zone under section 469.337; and
27.17 	(v) the exemption for operating in an international economic development zone 
27.18 	under section 469.326.

27.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
27.20 	December 31, 2009.

27.21 	Sec. 29. Minnesota Statutes 2008, section 290.03, is amended to read:
27.22 	290.03 INCOME TAX; IMPOSITION, CLASSES OF TAXPAYERS.
27.23 	An annual tax for each taxable year, computed in the manner and at the rates 
27.24 	hereinafter provided, is hereby imposed upon the taxable income for such year of the 
27.25 	following classes of taxpayers:
27.26 	(1) Resident and nonresident individuals;
27.27 	(2) Estates of decedents, dying domiciled within or without this state;
27.28 	(3) Trusts (except those taxable as corporations) however created by residents or 
27.29 	nonresidents or by domestic or foreign corporations.

27.30 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
27.31 	December 31, 2009.

28.1 	Sec. 30. Minnesota Statutes 2008, section 290.04, subdivision 1, is amended to read:
28.2 		Subdivision 1.Accrual. The liability for the tax imposed by section 290.02 shall 
28.3 	arise upon the first day of the taxable year upon which a domestic corporation exercises 
28.4 	any of the privileges specified in section 290.02 or exists as a corporation, or on which 
28.5 	a foreign corporation is possessed of the privilege for the grant to it of the privilege of 
28.6 	transacting or for the actual transaction by it of any local business within this state during 
28.7 	any part of its taxable year, in corporate or organized form. The liability for the tax 
28.8 	imposed by section 290.03 shall arise concurrently with the receipt or accrual of income 
28.9 	during the taxable year. The provisions shall in no way affect the determination of the 
28.10 	amount of such taxes, the time for making returns, and the time for paying such taxes.  

28.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
28.12 	December 31, 2009.

28.13 	Sec. 31. Minnesota Statutes 2008, section 290.06, subdivision 33, is amended to read:
28.14 		Subd. 33. Bovine testing credit. (a) An owner of cattle in Minnesota may take a 
28.15 	credit against the tax due under this chapter for an amount equal to: (1) for corporate 
28.16 	filers, including shareholders of an S corporation under section 290.9725, 25 percent of 
28.17 	the expenses incurred during the taxable year to conduct tuberculosis testing on those 
28.18 	cattle; and (2) for all other filers, one-half the expenses incurred during the taxable year to 
28.19 	conduct tuberculosis testing on those cattle. 
28.20 	(b) If the amount of credit which the taxpayer is eligible to receive under this 
28.21 	subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of 
28.22 	revenue shall refund the excess to the taxpayer. 
28.23 	(c) The amount necessary to pay claims for the refund provided in this subdivision is 
28.24 	appropriated from the general fund to the commissioner of revenue. 
28.25 	(d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in 
28.26 	Minnesota is not federally required are not allowed in claiming the credit under paragraph 
28.27 	(a). 

28.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
28.29 	December 31, 2009.

28.30 	Sec. 32. Minnesota Statutes 2008, section 290.0922, subdivision 1, is amended to read:
28.31 		Subdivision 1.Imposition. (a) In addition to the tax imposed by this chapter without 
28.32 	regard to this section, the franchise tax imposed on a corporation required to file under 
29.1 	section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation 
29.2 	under section 290.9725 for the taxable year includes a tax equal to the following amounts:

29.3
29.4	If the sum of the corporation's Minnesota 
property, payrolls, and sales or receipts is:
		the tax equals: 
	
29.5			less than 
	$
	500,000
		$
	0
		
29.6		$
	500,000
	to
	$
	999,999
		$
	100
		
29.7		$
	1,000,000
	to
	$
	4,999,999
		$
	300
		
29.8		$
	5,000,000
	to
	$
	9,999,999
		$
	1,000
		
29.9		$
	10,000,000
	to
	$
	19,999,999
		$
	2,000
		
29.10		$
	20,000,000
	or more
		$
	5,000
		
29.11 	(b) A tax is imposed for each taxable year on a corporation required to file a return 
29.12 	under section 289A.12, subdivision 3, that is treated as an "S" corporation under section 
29.13 	290.9725 and on a partnership required to file a return under section 289A.12, subdivision 
29.14 	3, other than a partnership that derives over 80 percent of its income from farming. The 
29.15 	tax imposed under this paragraph is due on or before the due date of the return for the 
29.16 	taxpayer due under section 289A.18, subdivision 1. The commissioner shall prescribe 
29.17 	the return to be used for payment of this tax. The tax under this paragraph is equal to 
29.18 	the following amounts:

29.19
29.20
29.21
29.22	If the sum of the S 
corporation's or partnership's 
Minnesota property, payrolls, 
and sales or receipts is:
			the tax 
equals:
		
29.23			less than
	$
	500,000
		$
	0
		
29.24		$
	500,000
	to
	$
	999,999
		$
	100
		
29.25		$
	1,000,000
	to
	$
	4,999,999
		$
	300
		
29.26		$
	5,000,000
	to
	$
	9,999,999
		$
	1,000
		
29.27		$
	10,000,000
	to
	$
	19,999,999
		$
	2,000
		
29.28		$
	20,000,000
	or more
		$
	5,000

29.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
29.30 	December 31, 2009.

29.31 	Sec. 33. Minnesota Statutes 2008, section 290.095, subdivision 3, is amended to read:
29.32 		Subd. 3.Carryover. (a) A net operating loss incurred in a taxable year: (i) 
29.33 	beginning after December 31, 1986, shall be a net operating loss carryover to each of the 
29.34 	15 taxable years following the taxable year of such loss; (ii) beginning before January 1, 
29.35 	1987, shall be a net operating loss carryover to each of the five taxable years following the 
29.36 	taxable year of such loss subject to the provisions of Minnesota Statutes 1986, section 
29.37 	290.095; and (iii) beginning before January 1, 1987, shall be a net operating loss carryback 
30.1 	to each of the three taxable years preceding the loss year subject to the provisions of 
30.2 	Minnesota Statutes 1986, section 290.095.  
30.3 	(b) The entire amount of the net operating loss for any taxable year shall be carried to 
30.4 	the earliest of the taxable years to which such loss may be carried. The portion of such loss 
30.5 	which shall be carried to each of the other taxable years shall be the excess, if any, of the 
30.6 	amount of such loss over the sum of the taxable net income, adjusted by the modifications 
30.7 	specified in subdivision 4, for each of the taxable years to which such loss may be carried.
30.8 	(c) Where a corporation apportions its income under the provisions of section 
30.9 	290.191, the net operating loss deduction incurred in any taxable year shall be allowed 
30.10 	to the extent of the apportionment ratio of the loss year.  
30.11 	(d) The provisions of sections 381, 382, and 384 of the Internal Revenue Code apply 
30.12 	to carryovers in certain corporate acquisitions and special limitations on net operating loss 
30.13 	carryovers. The limitation amount determined under section 382 shall be applied to net 
30.14 	income, before apportionment, in each post change year to which a loss is carried.

30.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
30.16 	December 31, 2009.

30.17 	Sec. 34. Minnesota Statutes 2008, section 290.17, subdivision 1, is amended to read:
30.18 		Subdivision 1.Scope of allocation rules. (a) The income of resident individuals 
30.19 	is not subject to allocation outside this state. The allocation rules apply to nonresident 
30.20 	individuals, estates, trusts, nonresident partners of partnerships, and nonresident 
30.21 	shareholders of corporations treated as "S" corporations under section 290.9725, and all 
30.22 	corporations not having such an election in effect. If a partnership or corporation would 
30.23 	not otherwise be subject to the allocation rules, but conducts a trade or business that is part 
30.24 	of a unitary business involving another legal entity that is subject to the allocation rules, 
30.25 	the partnership or corporation is subject to the allocation rules. 
30.26 	(b) Expenses, losses, and other deductions (referred to collectively in this paragraph 
30.27 	as "deductions") must be allocated along with the item or class of gross income to which 
30.28 	they are definitely related for purposes of assignment under this section or apportionment 
30.29 	under section 290.191, 290.20, or 290.36. Deductions definitely related to any item of 
30.30 	gross income assigned under subdivision 2, paragraph (e), are assigned to the taxpayer's 
30.31 	domicile. 
30.32 	(c) In the case of an individual who is a resident for only part of a taxable year, 
30.33 	the individual's income, gains, losses, and deductions from the distributive share of a 
30.34 	partnership, S corporation, trust, or estate are not subject to allocation outside this state 
30.35 	to the extent of the distributive share multiplied by a ratio, the numerator of which is 
31.1 	the number of days the individual was a resident of this state during the tax year of the 
31.2 	partnership, S corporation, trust, or estate, and the denominator of which is the number of 
31.3 	days in the taxable year of the partnership, S corporation, trust, or estate.

31.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
31.5 	December 31, 2009.

31.6 	Sec. 35. Minnesota Statutes 2008, section 290.17, subdivision 4, is amended to read:
31.7 		Subd. 4.Unitary business principle. (a) If a trade or business conducted wholly 
31.8 	within this state or partly within and partly without this state is part of a unitary business, 
31.9 	the entire income of the unitary business is subject to apportionment pursuant to section 
31.10 	290.191. Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary 
31.11 	business is considered to be derived from any particular source and none may be allocated 
31.12 	to a particular place except as provided by the applicable apportionment formula. The 
31.13 	provisions of this subdivision do not apply to business income subject to subdivision 5, 
31.14 	income of an insurance company, or income of an investment company determined under 
31.15 	section 290.36. 
31.16 	(b) The term "unitary business" means business activities or operations which 
31.17 	result in a flow of value between them. The term may be applied within a single legal 
31.18 	entity or between multiple entities and without regard to whether each entity is a sole 
31.19 	proprietorship, a corporation, a partnership, or a trust.
31.20 	(c) Unity is presumed whenever there is unity of ownership, operation, and use, 
31.21 	evidenced by centralized management or executive force, centralized purchasing, 
31.22 	advertising, accounting, or other controlled interaction, but the absence of these 
31.23 	centralized activities will not necessarily evidence a nonunitary business. Unity is also 
31.24 	presumed when business activities or operations are of mutual benefit, dependent upon or 
31.25 	contributory to one another, either individually or as a group.
31.26 	(d) Where a business operation conducted in Minnesota is owned by a business 
31.27 	entity that carries on business activity outside the state different in kind from that 
31.28 	conducted within this state, and the other business is conducted entirely outside the state, it 
31.29 	is presumed that the two business operations are unitary in nature, interrelated, connected, 
31.30 	and interdependent unless it can be shown to the contrary.
31.31 	(e) Unity of ownership is not deemed to exist when a corporation is involved unless 
31.32 	that corporation is a member of a group of two or more business entities and more than 50 
31.33 	percent of the voting stock of each member of the group is directly or indirectly owned 
31.34 	by a common owner or by common owners, either corporate or noncorporate, or by one 
31.35 	or more of the member corporations of the group. For this purpose, the term "voting 
32.1 	stock" shall include membership interests of mutual insurance holding companies formed 
32.2 	under section 66A.40. 
32.3 	(f) The net income and apportionment factors under section 290.191 or 290.20 of 
32.4 	foreign corporations and other foreign entities which are part of a unitary business shall 
32.5 	not be included in the net income or the apportionment factors of the unitary business. 
32.6 	A foreign corporation or other foreign entity which is required to file a return under this 
32.7 	chapter shall file on a separate return basis. The net income and apportionment factors 
32.8 	under section 290.191 or 290.20 of foreign operating corporations shall not be included in 
32.9 	the net income or the apportionment factors of the unitary business except as provided in 
32.10 	paragraph (g).
32.11 	(g) The adjusted net income of a foreign operating corporation shall be deemed to 
32.12 	be paid as a dividend on the last day of its taxable year to each shareholder thereof, in 
32.13 	proportion to each shareholder's ownership, with which such corporation is engaged in 
32.14 	a unitary business. Such deemed dividend shall be treated as a dividend under section 
32.15 	290.21, subdivision 4. 
32.16 	Dividends actually paid by a foreign operating corporation to a corporate shareholder 
32.17 	which is a member of the same unitary business as the foreign operating corporation shall 
32.18 	be eliminated from the net income of the unitary business in preparing a combined report 
32.19 	for the unitary business. The adjusted net income of a foreign operating corporation 
32.20 	shall be its net income adjusted as follows:
32.21 	(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto 
32.22 	Rico, or a United States possession or political subdivision of any of the foregoing shall 
32.23 	be a deduction; and
32.24 	(2) the subtraction from federal taxable income for payments received from foreign 
32.25 	corporations or foreign operating corporations under section 290.01, subdivision 19d, 
32.26 	clause (10), shall not be allowed. 
32.27 	If a foreign operating corporation incurs a net loss, neither income nor deduction 
32.28 	from that corporation shall be included in determining the net income of the unitary 
32.29 	business.
32.30 	(h) (f) For purposes of determining the net income of a unitary business and the 
32.31 	factors to be used in the apportionment of net income pursuant to section 290.191 or 
32.32 	290.20, there must be included only the income and apportionment factors of domestic 
32.33 	corporations or other domestic entities other than foreign operating corporations that are 
32.34 	determined to be part of the unitary business pursuant to this subdivision, notwithstanding 
32.35 	that foreign corporations or other foreign entities might be included in the unitary business. 
33.1 	(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter 
33.2 	that are connected with or allocable against dividends, deemed dividends described 
33.3 	in paragraph (g), or royalties, fees, or other like income described in section 290.01, 
33.4 	subdivision 19d, clause (10), shall not be disallowed. 
33.5 	(j) (g) Each corporation or other entity, except a sole proprietorship, that is part of 
33.6 	a unitary business must file combined reports as the commissioner determines. On the 
33.7 	reports, all intercompany transactions between entities included pursuant to paragraph 
33.8 	(h) (f) must be eliminated and the entire net income of the unitary business determined in 
33.9 	accordance with this subdivision is apportioned among the entities by using each entity's 
33.10 	Minnesota factors for apportionment purposes in the numerators of the apportionment 
33.11 	formula and the total factors for apportionment purposes of all entities included pursuant 
33.12 	to paragraph (h) (f) in the denominators of the apportionment formula.
33.13 	(k) If a corporation has been divested from a unitary business and is included in a 
33.14 	combined report for a fractional part of the common accounting period of the combined 
33.15 	report:
33.16 	(1) its income includable in the combined report is its income incurred for that part 
33.17 	of the year determined by proration or separate accounting; and
33.18 	(2) its sales, property, and payroll included in the apportionment formula must 
33.19 	be prorated or accounted for separately.

33.20 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
33.21 	December 31, 2009.

33.22 	Sec. 36. Minnesota Statutes 2008, section 290.191, subdivision 4, is amended to read:
33.23 		Subd. 4.Apportionment formula for certain mail order businesses. If the 
33.24 	business of a corporation, partnership, or proprietorship consists exclusively of the 
33.25 	selling of tangible personal property and services at retail, as defined in section 297A.61, 
33.26 	subdivision 4, paragraph (a), in response to orders received by United States mail, 
33.27 	telephone, facsimile, or other electronic media, and 99 percent of the taxpayer's property 
33.28 	and payroll is within Minnesota, then the taxpayer may apportion net income to Minnesota 
33.29 	based solely upon the percentage that the sales made within this state in connection 
33.30 	with its trade or business during the tax period are of the total sales wherever made in 
33.31 	connection with the trade or business during the tax period. Property and payroll factors 
33.32 	are disregarded. In determining eligibility for this subdivision: 
33.33 	(1) the sale not in the ordinary course of business of tangible or intangible assets 
33.34 	used in conducting business activities must be disregarded; and
34.1 	(2) property and payroll at a distribution center outside of Minnesota are disregarded 
34.2 	if the sole activity at the distribution center is the filling of orders, and no solicitation 
34.3 	of orders occurs at the distribution center.

34.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
34.5 	December 31, 2009.

34.6 	Sec. 37. Minnesota Statutes 2008, section 290.32, is amended to read:
34.7 	290.32 TAXES FOR PART OF YEAR, COMPUTATION.
34.8 	When under this chapter a taxpayer is permitted or required to make a return for a 
34.9 	fractional part of a year, the tax shall be computed in the same manner as if such fractional 
34.10 	part of a year were an entire year, except:
34.11 	(1) A taxpayer who is permitted to change the basis for reporting income from a 
34.12 	fiscal to a calendar year shall make a separate return for the period between the close of 
34.13 	the taxpayer's last fiscal year and the following December 31st; if the change is from a 
34.14 	calendar to a fiscal year, a separate return shall be made for the period between the close 
34.15 	of the taxpayer's last calendar year and the date designated as the close of the fiscal year; 
34.16 	and if the change is from one fiscal year to another fiscal year, a separate return shall be 
34.17 	made for the period between the close of the former fiscal year and the date designated as 
34.18 	the close of the new fiscal year. The taxable net income, or for corporations the taxable 
34.19 	net income as reduced by the deductions contained in section 290.21, for any such period 
34.20 	shall be put on an annual basis by multiplying the amount thereof by 12 and dividing by 
34.21 	the number of months included in the period for which such separate return is made; and 
34.22 	the tax shall be that part of a tax, computed on the taxable net income put on such annual 
34.23 	basis which the number of months in such period bears to 12 months.
34.24 	(2) Where any of the enumerated changes in accounting period referred to in clause 
34.25 	(1) involve a 52-53 week fiscal year and any such change results in a short period of less 
34.26 	than seven days, such short period shall be added to and deemed a part of the following 
34.27 	taxable year. If the change results in a short period of seven or more days, but less than 
34.28 	359 days, the taxable net income, or for corporations the taxable net income as reduced 
34.29 	by the deductions contained in section 290.21, for any such period shall be placed on an 
34.30 	annual basis by multiplying such income by 365 and dividing the result by the same 
34.31 	number of days in the short period; and the tax shall be that part of a tax, computed on the 
34.32 	taxable net income placed on such annual basis which the number of days in such short 
34.33 	period bears to 365 days. Where the short period is 359 days or more, the tax shall be 
34.34 	computed in the same manner as if such short period were an entire year.  

35.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
35.2 	December 31, 2009.

35.3 	Sec. 38. ENVIRONMENTAL QUALITY BOARD DUTIES TRANSFER 
35.4 	REPORT.
 35.5 	The commissioners of natural resources, agriculture, and the Pollution Control 
35.6 	Agency, and the Board of Water and Soil Resources shall review the duties of the 
35.7 	Environmental Quality Board and submit a report to the legislature, no later than January 
35.8 	15, 2011, with recommendation on how to transfer those duties to other state entities.

35.9 	Sec. 39. REVISOR'S INSTRUCTION.
 35.10 	The revisor of statutes shall recode Minnesota Statutes 2008, section 62L.056, as 
35.11 	Minnesota Statutes, section 62J.261.

35.12 	Sec. 40.  REPEALER.
 35.13 		Subdivision 1.Mental health, breast reconstruction, maternity hospital stay 
35.14 	minimum; elimination of overlap with federal laws. (a) Minnesota Statutes 2008, 
35.15 	sections 62A.149, subdivision 1; 62A.152; and 62Q.47, are repealed.
35.16 	(b) Minnesota Statutes 2008, section 62A.25, is repealed.
35.17 	(c) Minnesota Statutes 2008, section 62A.0411, is repealed.
35.18 		Subd. 2.Phenylketonuria (PKU) treatment. Minnesota Statutes 2008, section 
35.19 	62A.26, is repealed.
35.20 		Subd. 3.Wigs. Minnesota Statutes 2008, section 62A.28, is repealed.
35.21 		Subd. 4.Port-wine stain removal. Minnesota Statutes 2008, section 62A.304, is 
35.22 	repealed.
35.23 		Subd. 5.Taxation; unemployment compensation. (a) Minnesota Statutes 2008, 
35.24 	sections 275.025, subdivision 2; 289A.19, subdivision 2; 289A.26; 290.01, subdivisions 
35.25 	5, 5a, 6b, and 19e; 290.014, subdivision 5; 290.02; 290.06, subdivisions 1, 24, and 27; 
35.26 	290.068, subdivisions 1, 2, 3, 4, and 5; 290.0921, subdivisions 1, 2, 3, 3a, 4, 6, 7, and 8; 
35.27 	290.21, subdivisions 1 and 4; 290.34, subdivisions 1 and 2; 290.371, subdivisions 1, 2, 
35.28 	3, and 4; 290.432; 298.01, subdivisions 3, 3a, 3b, 4, 4a, 4b, 4c, 5, and 6; and 298.17,
35.29 	and Minnesota Statutes 2009 Supplement, sections 289A.08, subdivision 3; and 290.01, 
35.30 	subdivisions 19c and 19d, are repealed.
35.31 	(b) Minnesota Statutes 2008, sections 177.41; 177.42, subdivisions 1, 2, 3, 4, and 5; 
35.32 	177.43, subdivisions 1, 2, 4, 5, 6, 6a, and 7; 177.435; and 177.44, and  Minnesota Statutes 
36.1 	2009 Supplement, sections 177.42, subdivisions 6 and 7; and 177.43, subdivision 3, are 
36.2 	repealed.
36.3 		Subd. 6.Environmental review; Environmental Quality Board. (a) Minnesota 
36.4 	Statutes 2008, sections 116D.04, subdivisions 1a, 2a, 2b, 3a, 4a, 5a, 6, 6a, 7, 8, 9, 10, 
36.5 	11, 12, and 13; and 116D.045, subdivisions 1, 2, 3, and 4, and Minnesota Rules, parts 
36.6 	4410.0200; 4410.0300; 4410.0400; 4410.0500; 4410.1000; 4410.1100; 4410.1200; 
36.7 	4410.1300; 4410.1400; 4410.1500; 4410.1600; 4410.1700; 4410.2000; 4410.2100; 
36.8 	4410.2200; 4410.2300; 4410.2400; 4410.2500; 4410.2600; 4410.2700; 4410.2800; 
36.9 	4410.2900; 4410.3000; 4410.3100; 4410.3600; 4410.3610; 4410.3700; 4410.3800; 
36.10 	4410.3900; 4410.4000; 4410.4300; 4410.4400; 4410.4500; 4410.4600; 4410.5000; 
36.11 	4410.5100; 4410.5200; 4410.5300; 4410.5400; 4410.5500; 4410.5600; 4410.6000; 
36.12 	4410.6100; 4410.6200; 4410.6410; 4410.6500; and 4410.7055, are repealed.
36.13 	(b) Minnesota Statutes 2008, sections 116C.01; 116C.02; 116C.03, subdivisions 
36.14 	1, 2, 2a, 3a, 4, 5, and 6; 116C.04, subdivisions 1, 2, 3, 4, 7, 10, and 11; 116C.06; and 
36.15 	116C.08, are repealed.

36.16 	EFFECTIVE DATE. The provisions of subdivision 5, paragraph (a), relating to 
36.17 	income, corporate franchise, and mining taxation are effective for taxable years beginning 
36.18 	after December 31, 2009. The provisions of subdivision 5, paragraph (a), relating to 
36.19 	property taxation are effective for taxes payable in 2011 and thereafter. The provisions of 
36.20 	subdivision 5, paragraph (b), are effective for contracts entered into after June 30, 2011.
36.21 	Subdivision 6, paragraph (a), is effective July 1, 2010. Subdivision 6, paragraph (b), 
36.22 	is effective July 1, 2011.