1.1 	A bill for an act
1.2 	relating to taxation; making technical, administrative, and clarifying changes to 
1.3 	individual income, corporate franchise, estate, property, sales and use, special, 
1.4 	mineral, and various taxes and tax-related provisions;amending Minnesota 
1.5 	Statutes 2010, sections 13.4965, subdivision 3; 16A.46; 270.41, subdivision 
1.6 	5; 270C.42, subdivision 2; 272.01, subdivision 2; 273.124, subdivision 13; 
1.7 	273.1315, subdivisions 1, 2; 273.19, subdivision 1; 273.39; 279.06, subdivision 
1.8 	1; 287.20, by adding a subdivision; 287.385, subdivision 7; 289A.02, by 
1.9 	adding a subdivision; 289A.10, by adding a subdivision; 289A.12, by adding 
1.10 	a subdivision; 289A.18, by adding a subdivision; 289A.20, subdivision 3, by 
1.11 	adding a subdivision; 289A.26, subdivisions 3, 4, 7, 9; 289A.38, subdivisions 7, 
1.12 	8, 9; 289A.42, subdivision 2; 289A.55, subdivision 9; 289A.60, subdivisions 4, 
1.13 	24; 290.01, subdivisions 6b, 19d; 290.0921, subdivision 3; 290.095, subdivision 
1.14 	3; 290.17, subdivision 4; 290A.25; 290B.04, subdivision 2; 296A.22; 297E.14, 
1.15 	subdivision 7; 297F.09, subdivision 9; 297F.18, subdivision 7; 297G.09, 
1.16 	subdivision 8; 297G.17, subdivision 7; 297I.05, subdivision 11; 297I.80, 
1.17 	subdivision 1; 298.018, subdivision 2; Minnesota Statutes 2011 Supplement, 
1.18 	sections 270C.34, subdivision 1; 272.02, subdivision 97; 273.13, subdivision 
1.19 	23; 290.01, subdivisions 19b, 19c; 291.03, subdivision 11; 298.01, subdivision 
1.20 	3; 373.01, subdivision 1; Laws 2011, First Special Session chapter 7, article 
1.21 	10, section 7; repealing Minnesota Statutes 2010, sections 272.69; 273.11, 
1.22 	subdivision 22.
1.23 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.24 	ARTICLE 1
1.25 	INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

1.26 	Section 1. Minnesota Statutes 2010, section 289A.02, is amended by adding a 
1.27 	subdivision to read:
1.28 		Subd. 9.Field audit. "Field audit" means an audit that includes the physical 
1.29 	presence of examiners in the taxpayer's or taxpayer's representative's office conducting 
1.30 	an examination of the taxpayer with the intention of issuing an assessment or notice of 
1.31 	change in tax. The examination may include inspecting a taxpayer's place of business, 
2.1 	tangible personal property, equipment, computer systems and facilities, pertinent books, 
2.2 	records, papers, vouchers, computer printouts, accounts, and documents. The field audit 
2.3 	is completed at the later of an order issued under section 270C.33 or notification that 
2.4 	no change will be made.

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

2.6 	Sec. 2. Minnesota Statutes 2010, section 289A.26, subdivision 3, is amended to read:
2.7 		Subd. 3.Short taxable year. (a) A corporation or an entity with a short taxable 
2.8 	year of less than 12 months, but at least four months, must pay estimated tax in equal 
2.9 	installments on or before the 15th day of the third, sixth, ninth, and final month of the 
2.10 	short taxable year, to the extent applicable based on the number of months in the short 
2.11 	taxable year.
2.12 	(b) A corporation or an entity is not required to make estimated tax payments for a 
2.13 	short taxable year unless its tax liability before the first day of the last month of the taxable 
2.14 	year can reasonably be expected to exceed $500.
2.15 	(c) No payment is required for a short taxable year of less than four months.

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

2.17 	Sec. 3. Minnesota Statutes 2010, section 289A.26, subdivision 4, is amended to read:
2.18 		Subd. 4.Underpayment of estimated tax. If there is an underpayment of estimated 
2.19 	tax by a corporation or an entity, there shall be added to the tax for the taxable year an 
2.20 	amount determined at the rate in section 270C.40 on the amount of the underpayment, 
2.21 	determined under subdivision 5, for the period of the underpayment determined under 
2.22 	subdivision 6. This subdivision does not apply in the first taxable year that a corporation is 
2.23 	subject to the tax imposed under section 290.02 or an entity is subject to the tax imposed 
2.24 	under section 290.05, subdivision 3.

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

2.26 	Sec. 4. Minnesota Statutes 2010, section 289A.26, subdivision 7, is amended to read:
2.27 		Subd. 7.Required installments. (a) Except as otherwise provided in this 
2.28 	subdivision, the amount of a required installment is 25 percent of the required annual 
2.29 	payment.
2.30 	(b) Except as otherwise provided in this subdivision, the term "required annual 
2.31 	payment" means the lesser of:
3.1 	(1) 100 percent of the tax shown on the return for the taxable year, or, if no return is 
3.2 	filed, 100 percent of the tax for that year; or
3.3 	(2) 100 percent of the tax shown on the return of the corporation or entity for the 
3.4 	preceding taxable year provided the return was for a full 12-month period, showed a 
3.5 	liability, and was filed by the corporation or entity.
3.6 	(c) Except for determining the first required installment for any taxable year, 
3.7 	paragraph (b), clause (2), does not apply in the case of a large corporation. The term 
3.8 	"large corporation" means a corporation or any predecessor corporation that had taxable 
3.9 	net income of $1,000,000 or more for any taxable year during the testing period. The 
3.10 	term "testing period" means the three taxable years immediately preceding the taxable 
3.11 	year involved. A reduction allowed to a large corporation for the first installment that is 
3.12 	allowed by applying paragraph (b), clause (2), must be recaptured by increasing the next 
3.13 	required installment by the amount of the reduction.
3.14 	(d) In the case of a required installment, if the corporation or entity establishes that 
3.15 	the annualized income installment is less than the amount determined in paragraph (a), the 
3.16 	amount of the required installment is the annualized income installment and the recapture 
3.17 	of previous quarters' reductions allowed by this paragraph must be recovered by increasing 
3.18 	later required installments to the extent the reductions have not previously been recovered.
3.19 	(e) The "annualized income installment" is the excess, if any, of:
3.20 	(1) an amount equal to the applicable percentage of the tax for the taxable year 
3.21 	computed by placing on an annualized basis the taxable income:
3.22 	(i) for the first two months of the taxable year, in the case of the first required 
3.23 	installment;
3.24 	(ii) for the first two months or for the first five months of the taxable year, in the 
3.25 	case of the second required installment;
3.26 	(iii) for the first six months or for the first eight months of the taxable year, in the 
3.27 	case of the third required installment; and
3.28 	(iv) for the first nine months or for the first 11 months of the taxable year, in the 
3.29 	case of the fourth required installment, over
3.30 	(2) the aggregate amount of any prior required installments for the taxable year.
3.31 	(3) For the purpose of this paragraph, the annualized income shall be computed 
3.32 	by placing on an annualized basis the taxable income for the year up to the end of the 
3.33 	month preceding the due date for the quarterly payment multiplied by 12 and dividing 
3.34 	the resulting amount by the number of months in the taxable year (2, 5, 6, 8, 9, or 11 as 
3.35 	the case may be) referred to in clause (1).
3.36 	(4) The "applicable percentage" used in clause (1) is:

4.1
4.2
4.3		For the following 
required 
installments:
		The applicable
percentage is:
	
4.4			1st
		25
		
4.5			2nd
		50
		
4.6			3rd
		75
		
4.7			4th
		100
		
4.8 	(f)(1) If this paragraph applies, the amount determined for any installment must 
4.9 	be determined in the following manner:
4.10 	(i) take the taxable income for the months during the taxable year preceding the 
4.11 	filing month;
4.12 	(ii) divide that amount by the base period percentage for the months during the 
4.13 	taxable year preceding the filing month;
4.14 	(iii) determine the tax on the amount determined under item (ii); and
4.15 	(iv) multiply the tax computed under item (iii) by the base period percentage for the 
4.16 	filing month and the months during the taxable year preceding the filing month.
4.17 	(2) For purposes of this paragraph:
4.18 	(i) the "base period percentage" for a period of months is the average percent that the 
4.19 	taxable income for the corresponding months in each of the three preceding taxable years 
4.20 	bears to the taxable income for the three preceding taxable years;
4.21 	(ii) the term "filing month" means the month in which the installment is required 
4.22 	to be paid;
4.23 	(iii) this paragraph only applies if the base period percentage for any six consecutive 
4.24 	months of the taxable year equals or exceeds 70 percent; and
4.25 	(iv) the commissioner may provide by rule for the determination of the base period 
4.26 	percentage in the case of reorganizations, new corporations or entities, and other similar 
4.27 	circumstances.
4.28 	(3) In the case of a required installment determined under this paragraph, if the
4.29 	corporation or entity determines that the installment is less than the amount determined in 
4.30 	paragraph (a), the amount of the required installment is the amount determined under this 
4.31 	paragraph and the recapture of previous quarters' reductions allowed by this paragraph 
4.32 	must be recovered by increasing later required installments to the extent the reductions 
4.33 	have not previously been recovered.

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

4.35 	Sec. 5. Minnesota Statutes 2010, section 289A.26, subdivision 9, is amended to read:
5.1 		Subd. 9.Failure to file an estimate. In the case of a corporation or an entity 
5.2 	that fails to file an estimated tax for a taxable year when one is required, the period of 
5.3 	the underpayment runs from the four installment dates in subdivision 2 or 3, whichever 
5.4 	applies, to the earlier of the periods in subdivision 6, clauses (1) and (2).

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

5.6 	Sec. 6. Minnesota Statutes 2010, section 289A.38, subdivision 7, is amended to read:
5.7 		Subd. 7.Federal tax changes. If the amount of income, items of tax preference, 
5.8 	deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for 
5.9 	any period, as reported to the Internal Revenue Service is changed or corrected by the 
5.10 	commissioner of Internal Revenue or other officer of the United States or other competent 
5.11 	authority, or where a renegotiation of a contract or subcontract with the United States 
5.12 	results in a change in income, items of tax preference, deductions, credits, or withholding 
5.13 	tax, or, in the case of estate tax, where there are adjustments to the taxable estate, the 
5.14 	taxpayer shall report the change or correction or renegotiation results in writing to the 
5.15 	commissioner of revenue. The report must be submitted within 180 days after the 
5.16 	final determination and must be in the form of either an amended Minnesota estate, 
5.17 	withholding tax, corporate franchise tax, or income tax return conceding the accuracy of 
5.18 	the federal determination or a letter detailing how the federal determination is incorrect 
5.19 	or does not change the Minnesota tax. An amended Minnesota income tax return must 
5.20 	be accompanied by an amended property tax refund return, if necessary. A taxpayer 
5.21 	filing an amended federal tax return must also file a copy of the amended return with the 
5.22 	commissioner of revenue within 180 days after filing the amended return.

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

5.24 	Sec. 7. Minnesota Statutes 2010, section 289A.38, subdivision 8, is amended to read:
5.25 		Subd. 8.Failure to report change or correction of federal return Time 
5.26 	requirement to report federal tax changes. If a taxpayer fails to make a report as 
5.27 	required by subdivision 7, the commissioner may recompute the tax, including a refund, 
5.28 	based on information available to the commissioner. The tax may be recomputed within 
5.29 	six years after the report should have been filed, notwithstanding any period of limitations 
5.30 	to the contrary. A taxpayer must submit the report or file the amended return required by 
5.31 	subdivision 7 within 180 days after the final determination by the commissioner of internal 
5.32 	revenue or other officer of the United States or other competent authority of a change or 
5.33 	correction of the person's federal tax return or the filing of an amended federal tax return.

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

6.2 	Sec. 8. Minnesota Statutes 2010, section 289A.38, subdivision 9, is amended to read:
6.3 		Subd. 9.Report made of change or correction of federal return Limitations 
6.4 	on time for assessment for federal tax changes. (a) If a taxpayer is required to make a
6.5 	submits the report under or files the amended return as required by subdivision 7, and does 
6.6 	report the change or files a copy of the amended return at any time within six years after 
6.7 	the time period provided by subdivision 8, the commissioner may recompute and reassess 
6.8 	the tax due, including a refund (1) within one year after the report or amended return is 
6.9 	filed with the commissioner, notwithstanding any period of limitations to the contrary, or 
6.10 	(2) within any other applicable period stated in this section, whichever period is longer. 
6.11 	The period provided for the carryback of any amount of loss or credit is also extended as 
6.12 	provided in this subdivision, notwithstanding any law to the contrary.
6.13 	(b) If a taxpayer fails to submit the report or file the amended return as required by 
6.14 	subdivision 7, the commissioner may recompute the tax, including a refund, based on 
6.15 	information available to the commissioner. The tax may be recomputed within six years 
6.16 	after the time period provided by subdivision 8, notwithstanding any period of limitations 
6.17 	to the contrary.
6.18 	(c) If the commissioner has completed a field audit of the taxpayer, and, but for this 
6.19 	subdivision, the commissioner's time period to adjust the tax has expired, the additional 
6.20 	tax due or refund is limited to only those changes that are required to be made to the 
6.21 	return which relate to the changes made on the federal return. This subdivision does not 
6.22 	apply to sales and use tax.
6.23 	For purposes of this subdivision and section 289A.42, subdivision 2, a "field audit" 
6.24 	is the physical presence of examiners in the taxpayer's or taxpayer's representative's office 
6.25 	conducting an examination of the taxpayer with the intention of issuing an assessment or 
6.26 	notice of change in tax or which results in the issuing of an assessment or notice of change 
6.27 	in tax. The examination may include inspecting a taxpayer's place of business, tangible 
6.28 	personal property, equipment, computer systems and facilities, pertinent books, records, 
6.29 	papers, vouchers, computer printouts, accounts, and documents.

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

6.31 	Sec. 9. Minnesota Statutes 2010, section 289A.42, subdivision 2, is amended to read:
6.32 		Subd. 2.Federal extensions. When a taxpayer consents to an extension of time 
6.33 	for the assessment of federal withholding or income taxes, the period in which the 
7.1 	commissioner may recompute the tax is also extended, notwithstanding any period of 
7.2 	limitations to the contrary, as follows:
7.3 	(1) for the periods provided in section 289A.38, subdivisions 8 and 9;
7.4 	(2) for six months following the expiration of the extended federal period of 
7.5 	limitations when no change is made by the federal authority. If no change is made by the 
7.6 	federal authority, and, but for this subdivision, the commissioner's time period to adjust 
7.7 	the tax has expired, and if the commissioner has completed a field audit of the taxpayer, no 
7.8 	additional changes resulting in additional tax due or a refund may be made. For purposes 
7.9 	of this subdivision, "field audit" has the meaning given it in section 289A.38, subdivision 9.

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

7.11 	Sec. 10. Minnesota Statutes 2010, section 289A.60, subdivision 24, is amended to read:
7.12 		Subd. 24.Penalty for failure to notify of federal change. If a person fails to 
7.13 	report to the commissioner a change or correction of the person's federal return in the 
7.14 	manner prescribed by section 289A.38, subdivision 7, and within the 180-day time period 
7.15 	prescribed in section 289A.38, subdivision 7 8, there must be added to the tax an amount 
7.16 	equal to ten percent of the amount of any underpayment of Minnesota tax attributable to 
7.17 	the federal change.

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

7.19 	Sec. 11. Minnesota Statutes 2010, section 290.01, subdivision 6b, is amended to read:
7.20 		Subd. 6b.Foreign operating corporation. The term "foreign operating 
7.21 	corporation," when applied to a corporation, means a domestic corporation with the 
7.22 	following characteristics:
7.23 	(1) it is part of a unitary business at least one member of which is taxable in this state;
7.24 	(2) it is not a foreign sales corporation under section 922 of the Internal Revenue 
7.25 	Code, as amended through December 31, 1999, for the taxable year;
7.26 	(3) it is not an interest charge domestic international sales corporation under sections 
7.27 	992, 993, 994, and 995 of the Internal Revenue Code;
7.28 	(4) either (i) it has in effect a valid election under section 936 of the Internal Revenue 
7.29 	Code; or (ii) at least 80 percent of the gross income from all sources of the corporation in 
7.30 	the tax year is active foreign business income; and
7.31 	(5) for purposes of this subdivision, active foreign business income means gross 
7.32 	income that is (i) derived from sources without the United States, as defined in subtitle A, 
8.1 	chapter 1, subchapter N, part 1, of the Internal Revenue Code; and (ii) attributable to the 
8.2 	active conduct of a trade or business in a foreign country.

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

8.5 	Sec. 12. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19b, 
8.6 	is amended to read:
8.7 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
8.8 	and trusts, there shall be subtracted from federal taxable income:
8.9 	(1) net interest income on obligations of any authority, commission, or 
8.10 	instrumentality of the United States to the extent includable in taxable income for federal 
8.11 	income tax purposes but exempt from state income tax under the laws of the United States;
8.12 	(2) if included in federal taxable income, the amount of any overpayment of income 
8.13 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
8.14 	is received as a refund or as a credit to another taxable year's income tax liability;
8.15 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
8.16 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
8.17 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
8.18 	transportation of each qualifying child in attending an elementary or secondary school 
8.19 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
8.20 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
8.21 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
8.22 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
8.23 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
8.24 	"textbooks" includes books and other instructional materials and equipment purchased 
8.25 	or leased for use in elementary and secondary schools in teaching only those subjects 
8.26 	legally and commonly taught in public elementary and secondary schools in this state. 
8.27 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
8.28 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
8.29 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
8.30 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
8.31 	or materials for, or transportation to, extracurricular activities including sporting events, 
8.32 	musical or dramatic events, speech activities, driver's education, or similar programs. No 
8.33 	deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or 
8.34 	the qualifying child's vehicle to provide such transportation for a qualifying child. For 
9.1 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
9.2 	given in section 32(c)(3) of the Internal Revenue Code;
9.3 	(4) income as provided under section 290.0802;
9.4 	(5) to the extent included in federal adjusted gross income, income realized on 
9.5 	disposition of property exempt from tax under section 290.491;
9.6 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
9.7 	of the Internal Revenue Code in determining federal taxable income by an individual 
9.8 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
9.9 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
9.10 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, 
9.11 	under the provisions of Public Law 109-1 and Public Law 111-126;
9.12 	(7) for individuals who are allowed a federal foreign tax credit for taxes that do not 
9.13 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
9.14 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
9.15 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
9.16 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
9.17 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
9.18 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
9.19 	the extent they exceed the federal foreign tax credit;
9.20 	(8) in each of the five tax years immediately following the tax year in which an 
9.21 	addition is required under subdivision 19a, clause (7), or 19c, clause (15) (14), in the case 
9.22 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
9.23 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
9.24 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
9.25 	subdivision 19c, clause (15) (14), in the case of a shareholder of an S corporation, minus 
9.26 	the positive value of any net operating loss under section 172 of the Internal Revenue 
9.27 	Code generated for the tax year of the addition. The resulting delayed depreciation 
9.28 	cannot be less than zero;
9.29 	(9) job opportunity building zone income as provided under section 469.316;
9.30 	(10) to the extent included in federal taxable income, the amount of compensation 
9.31 	paid to members of the Minnesota National Guard or other reserve components of the 
9.32 	United States military for active service, excluding compensation for services performed 
9.33 	under the Active Guard Reserve (AGR) program. For purposes of this clause, "active 
9.34 	service" means (i) state active service as defined in section 190.05, subdivision 5a, clause 
9.35 	(1); or (ii) federally funded state active service as defined in section 190.05, subdivision 
10.1 	5b, but "active service" excludes service performed in accordance with section 190.08, 
10.2 	subdivision 3;
10.3 	(11) to the extent included in federal taxable income, the amount of compensation 
10.4 	paid to Minnesota residents who are members of the armed forces of the United States 
10.5 	or United Nations for active duty performed under United States Code, title 10; or the 
10.6 	authority of the United Nations;
10.7 	(12) an amount, not to exceed $10,000, equal to qualified expenses related to a 
10.8 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
10.9 	to another person for human organ transplantation. For purposes of this clause, "organ" 
10.10 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
10.11 	"human organ transplantation" means the medical procedure by which transfer of a human 
10.12 	organ is made from the body of one person to the body of another person; "qualified 
10.13 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
10.14 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
10.15 	may be subtracted under this clause only once; and "qualified donor" means the individual 
10.16 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
10.17 	individual may claim the subtraction in this clause for each instance of organ donation for 
10.18 	transplantation during the taxable year in which the qualified expenses occur;
10.19 	(13) in each of the five tax years immediately following the tax year in which an 
10.20 	addition is required under subdivision 19a, clause (8), or 19c, clause (16) (15), in the case 
10.21 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
10.22 	of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause 
10.23 	(16) (15), in the case of a shareholder of a corporation that is an S corporation, minus the 
10.24 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
10.25 	generated for the tax year of the addition. If the net operating loss exceeds the addition for 
10.26 	the tax year, a subtraction is not allowed under this clause;
10.27 	(14) to the extent included in the federal taxable income of a nonresident of 
10.28 	Minnesota, compensation paid to a service member as defined in United States Code, title 
10.29 	10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief 
10.30 	Act, Public Law 108-189, section 101(2);
10.31 	(15) international economic development zone income as provided under section 
10.32 	469.325;
10.33 	(16) to the extent included in federal taxable income, the amount of national service 
10.34 	educational awards received from the National Service Trust under United States Code, 
10.35 	title 42, sections 12601 to 12604, for service in an approved Americorps National Service 
10.36 	program;
11.1 	(17) to the extent included in federal taxable income, discharge of indebtedness 
11.2 	income resulting from reacquisition of business indebtedness included in federal taxable 
11.3 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
11.4 	to the extent that the income was included in net income in a prior year as a result of the 
11.5 	addition under section 290.01, subdivision 19a, clause (16); and
11.6 	(18) the amount of the net operating loss allowed under section 290.095, subdivision 
11.7 	11, paragraph (c).

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

11.10 	Sec. 13. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19c, 
11.11 	is amended to read:
11.12 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
11.13 	there shall be added to federal taxable income:
11.14 	(1) the amount of any deduction taken for federal income tax purposes for income, 
11.15 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
11.16 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
11.17 	another state, a political subdivision of another state, the District of Columbia, or any 
11.18 	foreign country or possession of the United States;
11.19 	(2) interest not subject to federal tax upon obligations of: the United States, its 
11.20 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
11.21 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
11.22 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
11.23 	tribal governments;
11.24 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
11.25 	Revenue Code;
11.26 	(4) the amount of any net operating loss deduction taken for federal income tax 
11.27 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
11.28 	deduction under section 810 of the Internal Revenue Code;
11.29 	(5) the amount of any special deductions taken for federal income tax purposes 
11.30 	under sections 241 to 247 and 965 of the Internal Revenue Code;
11.31 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
11.32 	clause (a), that are not subject to Minnesota income tax;
11.33 	(7) the amount of any capital losses deducted for federal income tax purposes under 
11.34 	sections 1211 and 1212 of the Internal Revenue Code;
12.1 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
12.2 	921(a) and 291 of the Internal Revenue Code;
12.3 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
12.4 	291 of the Internal Revenue Code;
12.5 	(10) for certified pollution control facilities placed in service in a taxable year 
12.6 	beginning before December 31, 1986, and for which amortization deductions were elected 
12.7 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
12.8 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
12.9 	income for those facilities;
12.10 	(11) the amount of any deemed dividend from a foreign operating corporation 
12.11 	determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 
12.12 	shall be reduced by the amount of the addition to income required by clauses (19), (20), 
12.13 	(21), and (22), and (23);
12.14 	(12) the amount of a partner's pro rata share of net income which does not flow 
12.15 	through to the partner because the partnership elected to pay the tax on the income under 
12.16 	section 6242(a)(2) of the Internal Revenue Code;
12.17 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
12.18 	Code;
12.19 	(14) (13) any increase in subpart F income, as defined in section 952(a) of the 
12.20 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
12.21 	regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
12.22 	(15) (14) 80 percent of the depreciation deduction allowed under section 
12.23 	168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if 
12.24 	the taxpayer has an activity that in the taxable year generates a deduction for depreciation 
12.25 	under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable 
12.26 	year that the taxpayer is not allowed to claim for the taxable year, "the depreciation 
12.27 	allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess 
12.28 	of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) 
12.29 	over the amount of the loss from the activity that is not allowed in the taxable year. In 
12.30 	succeeding taxable years when the losses not allowed in the taxable year are allowed, the 
12.31 	depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
12.32 	(16) (15) 80 percent of the amount by which the deduction allowed by section 179 of 
12.33 	the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
12.34 	Revenue Code of 1986, as amended through December 31, 2003;
12.35 	(17) (16) to the extent deducted in computing federal taxable income, the amount of 
12.36 	the deduction allowable under section 199 of the Internal Revenue Code;
13.1 	(18) (17) for taxable years beginning before January 1, 2013, the exclusion allowed 
13.2 	under section 139A of the Internal Revenue Code for federal subsidies for prescription 
13.3 	drug plans;
13.4 	(19) (18) the amount of expenses disallowed under section 290.10, subdivision 2;
13.5 	(20) (19) an amount equal to the interest and intangible expenses, losses, and 
13.6 	costs paid, accrued, or incurred by any member of the taxpayer's unitary group to or for 
13.7 	the benefit of a corporation that is a member of the taxpayer's unitary business group 
13.8 	that qualifies as a foreign operating corporation. For purposes of this clause, intangible 
13.9 	expenses and costs include:
13.10 	(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 
13.11 	use, maintenance or management, ownership, sale, exchange, or any other disposition of 
13.12 	intangible property;
13.13 	(ii) losses incurred, directly or indirectly, from factoring transactions or discounting 
13.14 	transactions;
13.15 	(iii) royalty, patent, technical, and copyright fees;
13.16 	(iv) licensing fees; and
13.17 	(v) other similar expenses and costs.
13.18 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
13.19 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
13.20 	secrets, and similar types of intangible assets.
13.21 	This clause does not apply to any item of interest or intangible expenses or costs paid, 
13.22 	accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 
13.23 	to such item of income to the extent that the income to the foreign operating corporation 
13.24 	is income from sources without the United States as defined in subtitle A, chapter 1, 
13.25 	subchapter N, part 1, of the Internal Revenue Code;
13.26 	(21) (20) except as already included in the taxpayer's taxable income pursuant to 
13.27 	clause (20) (19), any interest income and income generated from intangible property 
13.28 	received or accrued by a foreign operating corporation that is a member of the taxpayer's 
13.29 	unitary group. For purposes of this clause, income generated from intangible property 
13.30 	includes:
13.31 	(i) income related to the direct or indirect acquisition, use, maintenance or 
13.32 	management, ownership, sale, exchange, or any other disposition of intangible property;
13.33 	(ii) income from factoring transactions or discounting transactions;
13.34 	(iii) royalty, patent, technical, and copyright fees;
13.35 	(iv) licensing fees; and
13.36 	(v) other similar income.
14.1 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
14.2 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
14.3 	secrets, and similar types of intangible assets.
14.4 	This clause does not apply to any item of interest or intangible income received or accrued 
14.5 	by a foreign operating corporation with respect to such item of income to the extent that 
14.6 	the income is income from sources without the United States as defined in subtitle A, 
14.7 	chapter 1, subchapter N, part 1, of the Internal Revenue Code;
14.8 	(22) (21) the dividends attributable to the income of a foreign operating corporation 
14.9 	that is a member of the taxpayer's unitary group in an amount that is equal to the dividends 
14.10 	paid deduction of a real estate investment trust under section 561(a) of the Internal 
14.11 	Revenue Code for amounts paid or accrued by the real estate investment trust to the 
14.12 	foreign operating corporation;
14.13 	(23) (22) the income of a foreign operating corporation that is a member of the 
14.14 	taxpayer's unitary group in an amount that is equal to gains derived from the sale of real or 
14.15 	personal property located in the United States;
14.16 	(24) (23) for taxable years beginning before January 1, 2010, the additional amount 
14.17 	allowed as a deduction for donation of computer technology and equipment under section 
14.18 	170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
14.19 	(25) (24) discharge of indebtedness income resulting from reacquisition of business 
14.20 	indebtedness and deferred under section 108(i) of the Internal Revenue Code.

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

14.23 	Sec. 14. Minnesota Statutes 2010, section 290.01, subdivision 19d, is amended to read:
14.24 		Subd. 19d.Corporations; modifications decreasing federal taxable income. For 
14.25 	corporations, there shall be subtracted from federal taxable income after the increases 
14.26 	provided in subdivision 19c:
14.27 	(1) the amount of foreign dividend gross-up added to gross income for federal 
14.28 	income tax purposes under section 78 of the Internal Revenue Code;
14.29 	(2) the amount of salary expense not allowed for federal income tax purposes due to 
14.30 	claiming the work opportunity credit under section 51 of the Internal Revenue Code;
14.31 	(3) any dividend (not including any distribution in liquidation) paid within the 
14.32 	taxable year by a national or state bank to the United States, or to any instrumentality of 
14.33 	the United States exempt from federal income taxes, on the preferred stock of the bank 
14.34 	owned by the United States or the instrumentality;
15.1 	(4) amounts disallowed for intangible drilling costs due to differences between 
15.2 	this chapter and the Internal Revenue Code in taxable years beginning before January 
15.3 	1, 1987, as follows:
15.4 	(i) to the extent the disallowed costs are represented by physical property, an amount 
15.5 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
15.6 	subdivision 7, subject to the modifications contained in subdivision 19e; and
15.7 	(ii) to the extent the disallowed costs are not represented by physical property, an 
15.8 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
15.9 	290.09, subdivision 8;
15.10 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
15.11 	Internal Revenue Code, except that:
15.12 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
15.13 	capital loss carrybacks shall not be allowed;
15.14 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
15.15 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
15.16 	allowed;
15.17 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
15.18 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
15.19 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
15.20 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
15.21 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
15.22 	extent such loss was not used in a prior taxable year and subject to the provisions of 
15.23 	Minnesota Statutes 1986, section 290.16, shall be allowed;
15.24 	(6) an amount for interest and expenses relating to income not taxable for federal 
15.25 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
15.26 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
15.27 	291 of the Internal Revenue Code in computing federal taxable income;
15.28 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
15.29 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a 
15.30 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
15.31 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
15.32 	by the commissioner. In the case of property held in trust, the allowable deduction must 
15.33 	be apportioned between the income beneficiaries and the trustee in accordance with the 
15.34 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
15.35 	of the trust's income allocable to each;
16.1 	(8) for certified pollution control facilities placed in service in a taxable year 
16.2 	beginning before December 31, 1986, and for which amortization deductions were elected 
16.3 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
16.4 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
16.5 	1986, section 290.09, subdivision 7;
16.6 	(9) amounts included in federal taxable income that are due to refunds of income, 
16.7 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
16.8 	corporation to Minnesota, another state, a political subdivision of another state, the 
16.9 	District of Columbia, or a foreign country or possession of the United States to the extent 
16.10 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
16.11 	clause (1), in a prior taxable year;
16.12 	(10) 80 percent of royalties, fees, or other like income accrued or received from a 
16.13 	foreign operating corporation or a foreign corporation which is part of the same unitary 
16.14 	business as the receiving corporation, unless the income resulting from such payments or 
16.15 	accruals is income from sources within the United States as defined in subtitle A, chapter 
16.16 	1, subchapter N, part 1, of the Internal Revenue Code;
16.17 	(11) income or gains from the business of mining as defined in section 290.05, 
16.18 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax;
16.19 	(12) the amount of disability access expenditures in the taxable year which are not 
16.20 	allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
16.21 	(13) the amount of qualified research expenses not allowed for federal income tax 
16.22 	purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that 
16.23 	the amount exceeds the amount of the credit allowed under section 290.068;
16.24 	(14) the amount of salary expenses not allowed for federal income tax purposes due 
16.25 	to claiming the Indian employment credit under section 45A(a) of the Internal Revenue 
16.26 	Code;
16.27 	(15) for a corporation whose foreign sales corporation, as defined in section 922 
16.28 	of the Internal Revenue Code, constituted a foreign operating corporation during any 
16.29 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
16.30 	claiming the deduction under section 290.21, subdivision 4, for income received from 
16.31 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
16.32 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
16.33 	not income of a foreign operating company;
16.34 	(16) (15) any decrease in subpart F income, as defined in section 952(a) of the 
16.35 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
16.36 	regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
17.1 	(17) (16) in each of the five tax years immediately following the tax year in which an 
17.2 	addition is required under subdivision 19c, clause (15) (14), an amount equal to one-fifth 
17.3 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 
17.4 	amount of the addition made by the taxpayer under subdivision 19c, clause (15) (14). The 
17.5 	resulting delayed depreciation cannot be less than zero;
17.6 	(18) (17) in each of the five tax years immediately following the tax year in which an 
17.7 	addition is required under subdivision 19c, clause (16) (15), an amount equal to one-fifth 
17.8 	of the amount of the addition; and
17.9 	(19) (18) to the extent included in federal taxable income, discharge of indebtedness 
17.10 	income resulting from reacquisition of business indebtedness included in federal taxable 
17.11 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
17.12 	to the extent that the income was included in net income in a prior year as a result of the 
17.13 	addition under section 290.01, subdivision 19c, clause (25) (24).

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

17.16 	Sec. 15. Minnesota Statutes 2010, section 290.0921, subdivision 3, is amended to read:
17.17 		Subd. 3.Alternative minimum taxable income. "Alternative minimum taxable 
17.18 	income" is Minnesota net income as defined in section 290.01, subdivision 19, and 
17.19 	includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 
17.20 	(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 
17.21 	Minnesota tax return, the minimum tax must be computed on a separate company basis. 
17.22 	If a corporation is part of a tax group filing a unitary return, the minimum tax must be 
17.23 	computed on a unitary basis. The following adjustments must be made.
17.24 	(1) For purposes of the depreciation adjustments under section 56(a)(1) and 
17.25 	56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 
17.26 	service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 
17.27 	income tax purposes, including any modification made in a taxable year under section 
17.28 	290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7, 
17.29 	paragraph (c).
17.30 	For taxable years beginning after December 31, 2000, the amount of any remaining 
17.31 	modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 
17.32 	section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 
17.33 	allowance in the first taxable year after December 31, 2000.
17.34 	(2) The portion of the depreciation deduction allowed for federal income tax 
17.35 	purposes under section 168(k) of the Internal Revenue Code that is required as an addition 
18.1 	under section 290.01, subdivision 19c, clause (15) (14), is disallowed in determining 
18.2 	alternative minimum taxable income.
18.3 	(3) The subtraction for depreciation allowed under section 290.01, subdivision 
18.4 	19d, clause (17) (16), is allowed as a depreciation deduction in determining alternative 
18.5 	minimum taxable income.
18.6 	(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 
18.7 	of the Internal Revenue Code does not apply.
18.8 	(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 
18.9 	Revenue Code does not apply.
18.10 	(6) The special rule for dividends from section 936 companies under section 
18.11 	56(g)(4)(C)(iii) does not apply.
18.12 	(7) (6) The tax preference for depletion under section 57(a)(1) of the Internal 
18.13 	Revenue Code does not apply.
18.14 	(8) (7) The tax preference for intangible drilling costs under section 57(a)(2) of the 
18.15 	Internal Revenue Code must be calculated without regard to subparagraph (E) and the 
18.16 	subtraction under section 290.01, subdivision 19d, clause (4).
18.17 	(9) (8) The tax preference for tax exempt interest under section 57(a)(5) of the 
18.18 	Internal Revenue Code does not apply.
18.19 	(10) (9) The tax preference for charitable contributions of appreciated property 
18.20 	under section 57(a)(6) of the Internal Revenue Code does not apply.
18.21 	(11) (10) For purposes of calculating the tax preference for accelerated depreciation 
18.22 	or amortization on certain property placed in service before January 1, 1987, under section 
18.23 	57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 
18.24 	deduction allowed under section 290.01, subdivision 19e.
18.25 	For taxable years beginning after December 31, 2000, the amount of any remaining 
18.26 	modification made under section 290.01, subdivision 19e, not previously deducted is a 
18.27 	depreciation or amortization allowance in the first taxable year after December 31, 2004.
18.28 	(12) (11) For purposes of calculating the adjustment for adjusted current earnings 
18.29 	in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 
18.30 	income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 
18.31 	minimum taxable income as defined in this subdivision, determined without regard to the 
18.32 	adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
18.33 	(13) (12) For purposes of determining the amount of adjusted current earnings 
18.34 	under section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under 
18.35 	section 56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign 
18.36 	dividend gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), 
19.1 	(ii) the amount of refunds of income, excise, or franchise taxes subtracted as provided in 
19.2 	section 290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other 
19.3 	like income subtracted as provided in section 290.01, subdivision 19d, clause (10).
19.4 	(14) (13) Alternative minimum taxable income excludes the income from operating 
19.5 	in a job opportunity building zone as provided under section 469.317.
19.6 	(15) (14) Alternative minimum taxable income excludes the income from operating 
19.7 	in a biotechnology and health sciences industry zone as provided under section 469.337.
19.8 	(16) (15) Alternative minimum taxable income excludes the income from operating 
19.9 	in an international economic development zone as provided under section 469.326.
19.10 	Items of tax preference must not be reduced below zero as a result of the 
19.11 	modifications in this subdivision.

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

19.14 	Sec. 16. Minnesota Statutes 2010, section 290.095, subdivision 3, is amended to read:
19.15 		Subd. 3.Carryover. (a) A net operating loss incurred in a taxable year: (i) 
19.16 	beginning after December 31, 1986, shall be a net operating loss carryover to each of the 
19.17 	15 taxable years following the taxable year of such loss; (ii) beginning before January 1, 
19.18 	1987, shall be a net operating loss carryover to each of the five taxable years following the 
19.19 	taxable year of such loss subject to the provisions of Minnesota Statutes 1986, section 
19.20 	290.095; and (iii) beginning before January 1, 1987, shall be a net operating loss carryback 
19.21 	to each of the three taxable years preceding the loss year subject to the provisions of 
19.22 	Minnesota Statutes 1986, section 290.095.
19.23 	(b) The entire amount of the net operating loss for any taxable year shall be carried to 
19.24 	the earliest of the taxable years to which such loss may be carried. The portion of such loss 
19.25 	which shall be carried to each of the other taxable years shall be the excess, if any, of the 
19.26 	amount of such loss over the sum of the taxable net income, adjusted by the modifications 
19.27 	specified in subdivision 4, for each of the taxable years to which such loss may be carried.
19.28 	(c) Where a corporation apportions its income under the provisions of section 
19.29 	290.191, the net operating loss deduction incurred in any taxable year shall be allowed 
19.30 	to the extent of the apportionment ratio of the loss year plus the excess loss assigned 
19.31 	by section 290.17, subdivision 2. The loss carryover is applied to income allocated to 
19.32 	Minnesota in the carryover year.
19.33 	(d) The provisions of sections 381, 382, and 384 of the Internal Revenue Code apply 
19.34 	to carryovers in certain corporate acquisitions and special limitations on net operating loss 
20.1 	carryovers. The limitation amount determined under section 382 shall be applied to net 
20.2 	income, before apportionment, in each post change year to which a loss is carried.

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

20.4 	Sec. 17. Minnesota Statutes 2010, section 290.17, subdivision 4, is amended to read:
20.5 		Subd. 4.Unitary business principle. (a) If a trade or business conducted wholly 
20.6 	within this state or partly within and partly without this state is part of a unitary business, 
20.7 	the entire income of the unitary business is subject to apportionment pursuant to section 
20.8 	290.191. Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary 
20.9 	business is considered to be derived from any particular source and none may be allocated 
20.10 	to a particular place except as provided by the applicable apportionment formula. The 
20.11 	provisions of this subdivision do not apply to business income subject to subdivision 5, 
20.12 	income of an insurance company, or income of an investment company determined under 
20.13 	section 290.36.
20.14 	(b) The term "unitary business" means business activities or operations which 
20.15 	result in a flow of value between them. The term may be applied within a single legal 
20.16 	entity or between multiple entities and without regard to whether each entity is a sole 
20.17 	proprietorship, a corporation, a partnership or a trust.
20.18 	(c) Unity is presumed whenever there is unity of ownership, operation, and use, 
20.19 	evidenced by centralized management or executive force, centralized purchasing, 
20.20 	advertising, accounting, or other controlled interaction, but the absence of these 
20.21 	centralized activities will not necessarily evidence a nonunitary business. Unity is also 
20.22 	presumed when business activities or operations are of mutual benefit, dependent upon or 
20.23 	contributory to one another, either individually or as a group.
20.24 	(d) Where a business operation conducted in Minnesota is owned by a business 
20.25 	entity that carries on business activity outside the state different in kind from that 
20.26 	conducted within this state, and the other business is conducted entirely outside the state, it 
20.27 	is presumed that the two business operations are unitary in nature, interrelated, connected, 
20.28 	and interdependent unless it can be shown to the contrary.
20.29 	(e) Unity of ownership is does not deemed to exist when a corporation istwo or 
20.30 	more corporations are involved unless that corporation is a member of a group of two or 
20.31 	more business entities and more than 50 percent of the voting stock of each member of 
20.32 	the group corporation is directly or indirectly owned by a common owner or by common 
20.33 	owners, either corporate or noncorporate, or by one or more of the member corporations 
20.34 	of the group. For this purpose, the term "voting stock" shall include membership interests 
20.35 	of mutual insurance holding companies formed under section 66A.40.
21.1 	(f) The net income and apportionment factors under section 290.191 or 290.20 of 
21.2 	foreign corporations and other foreign entities which are part of a unitary business shall 
21.3 	not be included in the net income or the apportionment factors of the unitary business. 
21.4 	A foreign corporation or other foreign entity which is required to file a return under this 
21.5 	chapter shall file on a separate return basis. The net income and apportionment factors 
21.6 	under section 290.191 or 290.20 of foreign operating corporations shall not be included in 
21.7 	the net income or the apportionment factors of the unitary business except as provided in 
21.8 	paragraph (g).
21.9 	(g) The adjusted net income of a foreign operating corporation shall be deemed to 
21.10 	be paid as a dividend on the last day of its taxable year to each shareholder thereof, in 
21.11 	proportion to each shareholder's ownership, with which such corporation is engaged in 
21.12 	a unitary business. Such deemed dividend shall be treated as a dividend under section 
21.13 	290.21, subdivision 4.
21.14 	Dividends actually paid by a foreign operating corporation to a corporate shareholder 
21.15 	which is a member of the same unitary business as the foreign operating corporation shall 
21.16 	be eliminated from the net income of the unitary business in preparing a combined report 
21.17 	for the unitary business. The adjusted net income of a foreign operating corporation 
21.18 	shall be its net income adjusted as follows:
21.19 	(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto 
21.20 	Rico, or a United States possession or political subdivision of any of the foregoing shall 
21.21 	be a deduction; and
21.22 	(2) the subtraction from federal taxable income for payments received from foreign 
21.23 	corporations or foreign operating corporations under section 290.01, subdivision 19d, 
21.24 	clause (10), shall not be allowed.
21.25 	If a foreign operating corporation incurs a net loss, neither income nor deduction 
21.26 	from that corporation shall be included in determining the net income of the unitary 
21.27 	business.
21.28 	(h) For purposes of determining the net income of a unitary business and the factors 
21.29 	to be used in the apportionment of net income pursuant to section 290.191 or 290.20, there 
21.30 	must be included only the income and apportionment factors of domestic corporations or 
21.31 	other domestic entities other than foreign operating corporations that are determined to 
21.32 	be part of the unitary business pursuant to this subdivision, notwithstanding that foreign 
21.33 	corporations or other foreign entities might be included in the unitary business.
21.34 	(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter 
21.35 	that are connected with or allocable against dividends, deemed dividends described 
22.1 	in paragraph (g), or royalties, fees, or other like income described in section 290.01, 
22.2 	subdivision 19d, clause (10), shall not be disallowed.
22.3 	(j) Each corporation or other entity, except a sole proprietorship, that is part of a 
22.4 	unitary business must file combined reports as the commissioner determines. On the 
22.5 	reports, all intercompany transactions between entities included pursuant to paragraph 
22.6 	(h) must be eliminated and the entire net income of the unitary business determined in 
22.7 	accordance with this subdivision is apportioned among the entities by using each entity's 
22.8 	Minnesota factors for apportionment purposes in the numerators of the apportionment 
22.9 	formula and the total factors for apportionment purposes of all entities included pursuant 
22.10 	to paragraph (h) in the denominators of the apportionment formula.
22.11 	(k) If a corporation has been divested from a unitary business and is included in a 
22.12 	combined report for a fractional part of the common accounting period of the combined 
22.13 	report:
22.14 	(1) its income includable in the combined report is its income incurred for that part 
22.15 	of the year determined by proration or separate accounting; and
22.16 	(2) its sales, property, and payroll included in the apportionment formula must 
22.17 	be prorated or accounted for separately.

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

22.19 	ARTICLE 2
22.20 	ESTATE TAXES

22.21 	Section 1. Minnesota Statutes 2010, section 289A.10, is amended by adding a 
22.22 	subdivision to read:
22.23 		Subd. 1a.Recapture tax return required. If a disposition or cessation as provided 
22.24 	by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as 
22.25 	defined under section 291.03, subdivision 8, paragraph (c), or personal representative of 
22.26 	the decedent's estate must submit a recapture tax return to the commissioner.

22.27 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
22.28 	June 30, 2011.

22.29 	Sec. 2. Minnesota Statutes 2010, section 289A.12, is amended by adding a subdivision 
22.30 	to read:
22.31 		Subd. 18.Returns by qualified heirs. Within 24 months and within 36 months 
22.32 	after a decedent's death, a qualified heir, as defined under section 291.03, subdivision 8, 
23.1 	paragraph (c), must file a return with the commissioner relating to the qualified property 
23.2 	received from the decedent.

23.3 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
23.4 	June 30, 2011.

23.5 	Sec. 3. Minnesota Statutes 2010, section 289A.18, is amended by adding a subdivision 
23.6 	to read:
23.7 		Subd. 3a.Recapture tax return. A recapture tax return is due within six months 
23.8 	after the date of the disposition or cessation as provided by section 291.03, subdivision 
23.9 	11, paragraph (a).

23.10 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
23.11 	June 30, 2011.

23.12 	Sec. 4. Minnesota Statutes 2010, section 289A.20, subdivision 3, is amended to read:
23.13 		Subd. 3.Estate tax. Taxes imposed by chapter 291 section 291.03, subdivision 1,
23.14 	take effect at and upon the death of the person whose estate is subject to taxation and are 
23.15 	due and payable on or before the expiration of nine months from that death.

23.16 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
23.17 	June 30, 2011.

23.18 	Sec. 5. Minnesota Statutes 2010, section 289A.20, is amended by adding a subdivision 
23.19 	to read:
23.20 		Subd. 3a.Recapture tax. Taxes imposed by section 291.03, subdivision 11, 
23.21 	paragraph (b), are due and payable on or before the expiration of six months from the date 
23.22 	of disposition or cessation as provided by section 291.03, subdivision 11, paragraph (a).

23.23 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
23.24 	June 30, 2011.

23.25 	Sec. 6. Minnesota Statutes 2011 Supplement, section 291.03, subdivision 11, is 
23.26 	amended to read:
23.27 		Subd. 11.Recapture tax. (a) If, within three years after the decedent's death and 
23.28 	before the death of the qualified heir, the qualified heir disposes of any interest in the 
23.29 	qualified property, other than by a disposition to a family member, or a family member 
24.1 	ceases to use the qualified property which was acquired or passed from the decedent, an 
24.2 	additional estate tax is imposed on the property.
24.3 	(b) The amount of the additional tax equals the amount of the exclusion claimed by 
24.4 	the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
24.5 	(c) The additional tax under this subdivision is due on the day which is six months 
24.6 	after the date of the disposition or cessation in paragraph (a).

24.7 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
24.8 	June 30, 2011.

24.9 	ARTICLE 3
24.10 	PROPERTY TAX

24.11 	Section 1. Minnesota Statutes 2010, section 13.4965, subdivision 3, is amended to read:
24.12 		Subd. 3.Homestead and other applications. The classification and disclosure of 
24.13 	certain information collected to determine eligibility of property for a homestead or other 
24.14 	classification or benefit under section 273.13 are governed by section sections 273.124, 
24.15 	subdivision subdivisions 13, 13a, 13c, and 13d, and 273.1315.

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

24.17 	Sec. 2. Minnesota Statutes 2010, section 270.41, subdivision 5, is amended to read:
24.18 		Subd. 5.Prohibited activity. A licensed assessor or other person employed by an 
24.19 	assessment jurisdiction or contracting with an assessment jurisdiction for the purpose 
24.20 	of valuing or classifying property for property tax purposes is prohibited from making 
24.21 	appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report 
24.22 	as defined in section 82B.021, subdivisions 2, 4, 6, and 7, on any property within the 
24.23 	assessment jurisdiction where the individual is employed or performing the duties of the 
24.24 	assessor under contract. Violation of this prohibition shall result in immediate revocation 
24.25 	of the individual's license to assess property for property tax purposes. This prohibition 
24.26 	must not be construed to prohibit an individual from carrying out any duties required 
24.27 	for the proper assessment of property for property tax purposes or performing duties 
24.28 	enumerated in section 273.061, subdivision 7 or 8. If a formal resolution has been adopted 
24.29 	by the governing body of a governmental unit, which specifies the purposes for which 
24.30 	such work will be done, this prohibition does not apply to appraisal activities undertaken 
24.31 	on behalf of and at the request of the governmental unit that has employed or contracted 
24.32 	with the individual. The resolution may only allow appraisal activities which are related to 
24.33 	condemnations, right-of-way acquisitions, land exchanges, or special assessments.

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

25.2 	Sec. 3. Minnesota Statutes 2011 Supplement, section 270C.34, subdivision 1, is 
25.3 	amended to read:
25.4 		Subdivision 1.Authority. (a) The commissioner may abate, reduce, or refund any 
25.5 	penalty or interest that is imposed by a law administered by the commissioner, or imposed 
25.6 	by section 270.0725, subdivision 1 or 2, or 270.075, as a result of the late payment of tax 
25.7 	or late filing of a return, or any part of an additional tax charge under section 289A.25, 
25.8 	subdivision 2, or 289A.26, subdivision 4, if the failure to timely pay the tax or failure 
25.9 	to timely file the return is due to reasonable cause, or if the taxpayer is located in a 
25.10 	presidentially declared disaster or in a presidentially declared state of emergency area or 
25.11 	in an area declared to be in a state of emergency by the governor under section 12.31.
25.12 	(b) The commissioner shall abate any part of a penalty or additional tax charge 
25.13 	under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous 
25.14 	advice given to the taxpayer in writing by an employee of the department acting in 
25.15 	an official capacity, if the advice:
25.16 	(1) was reasonably relied on and was in response to a specific written request of the 
25.17 	taxpayer; and
25.18 	(2) was not the result of failure by the taxpayer to provide adequate or accurate 
25.19 	information.

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

25.21 	Sec. 4. Minnesota Statutes 2010, section 272.01, subdivision 2, is amended to read:
25.22 		Subd. 2.Exempt property used by private entity for profit. (a) When any real or 
25.23 	personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is 
25.24 	leased, loaned, or otherwise made available and used by a private individual, association, 
25.25 	or corporation in connection with a business conducted for profit, there shall be imposed a 
25.26 	tax, for the privilege of so using or possessing such real or personal property, in the same 
25.27 	amount and to the same extent as though the lessee or user was the owner of such property.
25.28 	(b) The tax imposed by this subdivision shall not apply to:
25.29 	(1) property leased or used as a concession in or relative to the use in whole 
25.30 	or part of a public park, market, fairgrounds, port authority, economic development 
25.31 	authority established under chapter 469, municipal auditorium, municipal parking facility, 
25.32 	municipal museum, or municipal stadium;
25.33 	(2) property of an airport owned by a city, town, county, or group thereof which is:
25.34 	(i) leased to or used by any person or entity including a fixed base operator; and
26.1 	(ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods, 
26.2 	services, or facilities to the airport or general public;
26.3 	the exception from taxation provided in this clause does not apply to:
26.4 	(i) property located at an airport owned or operated by the Metropolitan Airports 
26.5 	Commission or by a city of over 50,000 population according to the most recent federal 
26.6 	census or such a city's airport authority; or
26.7 	(ii) hangars leased by a private individual, association, or corporation in connection 
26.8 	with a business conducted for profit other than an aviation-related business;
26.9 	(3) property constituting or used as a public pedestrian ramp or concourse in 
26.10 	connection with a public airport;
26.11 	(4) property constituting or used as a passenger check-in area or ticket sale counter, 
26.12 	boarding area, or luggage claim area in connection with a public airport but not the 
26.13 	airports owned or operated by the Metropolitan Airports Commission or cities of over 
26.14 	50,000 population or an airport authority therein. Real estate owned by a municipality 
26.15 	in connection with the operation of a public airport and leased or used for agricultural 
26.16 	purposes is not exempt;
26.17 	(5) property leased, loaned, or otherwise made available to a private individual, 
26.18 	corporation, or association under a cooperative farming agreement made pursuant to 
26.19 	section 97A.135; or
26.20 	(6) property leased, loaned, or otherwise made available to a private individual, 
26.21 	corporation, or association under section 272.68, subdivision 4.
26.22 	(c) Taxes imposed by this subdivision are payable as in the case of personal property 
26.23 	taxes and shall be assessed to the lessees or users of real or personal property in the same 
26.24 	manner as taxes assessed to owners of real or personal property, except that such taxes 
26.25 	shall not become a lien against the property. When due, the taxes shall constitute a debt 
26.26 	due from the lessee or user to the state, township, city, county, and school district for 
26.27 	which the taxes were assessed and shall be collected in the same manner as personal 
26.28 	property taxes. If property subject to the tax imposed by this subdivision is leased or used 
26.29 	jointly by two or more persons, each lessee or user shall be jointly and severally liable for 
26.30 	payment of the tax.
26.31 	(d) The tax on real property of the federal government, the state or any of its political 
26.32 	subdivisions that is leased by a private individual, association, or corporation and becomes 
26.33 	taxable under this subdivision or other provision of law must be assessed and collected as 
26.34 	a personal property assessment. The taxes do not become a lien against the real property.

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

27.1 	Sec. 5. Minnesota Statutes 2010, section 273.124, subdivision 13, is amended to read:
27.2 		Subd. 13.Homestead application. (a) A person who meets the homestead 
27.3 	requirements under subdivision 1 must file a homestead application with the county 
27.4 	assessor to initially obtain homestead classification.
27.5 	(b) The format and contents of a uniform homestead application shall be prescribed 
27.6 	by the commissioner of revenue. The application must clearly inform the taxpayer that 
27.7 	this application must be signed by all owners who occupy the property or by the qualifying 
27.8 	relative and returned to the county assessor in order for the property to receive homestead 
27.9 	treatment.
27.10 	(c) Every property owner applying for homestead classification must furnish to the 
27.11 	county assessor the Social Security number of each occupant who is listed as an owner 
27.12 	of the property on the deed of record, the name and address of each owner who does not 
27.13 	occupy the property, and the name and Social Security number of each owner's spouse who 
27.14 	occupies the property. The application must be signed by each owner who occupies the 
27.15 	property and by each owner's spouse who occupies the property, or, in the case of property 
27.16 	that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
27.17 	If a property owner occupies a homestead, the property owner's spouse may not 
27.18 	claim another property as a homestead unless the property owner and the property owner's 
27.19 	spouse file with the assessor an affidavit or other proof required by the assessor stating that 
27.20 	the property qualifies as a homestead under subdivision 1, paragraph (e).
27.21 	Owners or spouses occupying residences owned by their spouses and previously 
27.22 	occupied with the other spouse, either of whom fail to include the other spouse's name 
27.23 	and Social Security number on the homestead application or provide the affidavits or 
27.24 	other proof requested, will be deemed to have elected to receive only partial homestead 
27.25 	treatment of their residence. The remainder of the residence will be classified as 
27.26 	nonhomestead residential. When an owner or spouse's name and Social Security number 
27.27 	appear on homestead applications for two separate residences and only one application is 
27.28 	signed, the owner or spouse will be deemed to have elected to homestead the residence for 
27.29 	which the application was signed.
27.30 	The Social Security numbers, state or federal tax returns or tax return information, 
27.31 	including the federal income tax schedule F, required by this section, or section 273.13, 
27.32 	and affidavits or other proofs of the property owners and spouses submitted under this 
27.33 	or another section to support a claim for a property tax homestead classification or other 
27.34 	classification or benefit under section 273.13, are private data on individuals as defined by 
27.35 	section 13.02, subdivision 12, or nonpublic data as defined in section 13.02, subdivision 9,
27.36 	but, notwithstanding that section, the private and nonpublic data may be disclosed to the 
28.1 	commissioner of revenue, or, for purposes of proceeding under the Revenue Recapture 
28.2 	Act to recover personal property taxes owing, to the county treasurer.
28.3 	(d) If residential real estate is occupied and used for purposes of a homestead by a 
28.4 	relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 
28.5 	order for the property to receive homestead status, a homestead application must be filed 
28.6 	with the assessor. The Social Security number of each relative and spouse of a relative 
28.7 	occupying the property shall be required on the homestead application filed under this 
28.8 	subdivision. If a different relative of the owner subsequently occupies the property, the 
28.9 	owner of the property must notify the assessor within 30 days of the change in occupancy. 
28.10 	The Social Security number of a relative or relative's spouse occupying the property 
28.11 	is private data on individuals as defined by section 13.02, subdivision 12, but may be 
28.12 	disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 
28.13 	Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
28.14 	(e) The homestead application shall also notify the property owners that the 
28.15 	application filed under this section will not be mailed annually and that if the property 
28.16 	is granted homestead status for any assessment year, that same property shall remain 
28.17 	classified as homestead until the property is sold or transferred to another person, or 
28.18 	the owners, the spouse of the owner, or the relatives no longer use the property as their 
28.19 	homestead. Upon the sale or transfer of the homestead property, a certificate of value must 
28.20 	be timely filed with the county auditor as provided under section 272.115. Failure to 
28.21 	notify the assessor within 30 days that the property has been sold, transferred, or that the 
28.22 	owner, the spouse of the owner, or the relative is no longer occupying the property as a 
28.23 	homestead, shall result in the penalty provided under this subdivision and the property 
28.24 	will lose its current homestead status.
28.25 	(f) If the homestead application is not returned within 30 days, the county will send a 
28.26 	second application to the present owners of record. The notice of proposed property taxes 
28.27 	prepared under section 275.065, subdivision 3, shall reflect the property's classification. If 
28.28 	a homestead application has not been filed with the county by December 15, the assessor 
28.29 	shall classify the property as nonhomestead for the current assessment year for taxes 
28.30 	payable in the following year, provided that the owner may be entitled to receive the 
28.31 	homestead classification by proper application under section 375.192.
28.32 		Subd. 13a.Occupant list. (g) At the request of the commissioner, each county 
28.33 	must give the commissioner a list that includes the name and Social Security number 
28.34 	of each occupant of homestead property who is the property owner, property owner's 
28.35 	spouse, qualifying relative of a property owner, or a spouse of a qualifying relative. The 
28.36 	commissioner shall use the information provided on the lists as appropriate under the law, 
29.1 	including for the detection of improper claims by owners, or relatives of owners, under 
29.2 	chapter 290A.
29.3 		Subd. 13b.Improper homestead. (h) (a) If the commissioner finds that a 
29.4 	property owner may be claiming a fraudulent homestead, the commissioner shall notify 
29.5 	the appropriate counties. Within 90 days of the notification, the county assessor shall 
29.6 	investigate to determine if the homestead classification was properly claimed. If the 
29.7 	property owner does not qualify, the county assessor shall notify the county auditor who 
29.8 	will determine the amount of homestead benefits that had been improperly allowed. For the 
29.9 	purpose of this section subdivision, "homestead benefits" means the tax reduction resulting 
29.10 	from the classification as a homestead under section 273.13, the taconite homestead credit 
29.11 	under section 273.135, the residential homestead and agricultural homestead credits under 
29.12 	section 273.1384, and the supplemental homestead credit under section 273.1391.
29.13 	The county auditor shall send a notice to the person who owned the affected property 
29.14 	at the time the homestead application related to the improper homestead was filed, 
29.15 	demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 
29.16 	of the homestead benefits. The person notified may appeal the county's determination 
29.17 	by serving copies of a petition for review with county officials as provided in section 
29.18 	278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 
29.19 	Court within 60 days of the date of the notice from the county. Procedurally, the appeal 
29.20 	is governed by the provisions in chapter 271 which apply to the appeal of a property tax 
29.21 	assessment or levy, but without requiring any prepayment of the amount in controversy. If 
29.22 	the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 
29.23 	has been filed, the county auditor shall certify the amount of taxes and penalty to the county 
29.24 	treasurer. The county treasurer will add interest to the unpaid homestead benefits and 
29.25 	penalty amounts at the rate provided in section 279.03 for real property taxes becoming 
29.26 	delinquent in the calendar year during which the amount remains unpaid. Interest may be 
29.27 	assessed for the period beginning 60 days after demand for payment was made.
29.28 	If the person notified is the current owner of the property, the treasurer may add the 
29.29 	total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 
29.30 	otherwise payable on the property by including the amounts on the property tax statements 
29.31 	under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 
29.32 	valorem taxes shall include interest accrued through December 31 of the year preceding 
29.33 	the taxes payable year for which the amounts are first added. These amounts, when added 
29.34 	to the property tax statement, become subject to all the laws for the enforcement of real or 
29.35 	personal property taxes for that year, and for any subsequent year.
30.1 	If the person notified is not the current owner of the property, the treasurer may 
30.2 	collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 
30.3 	the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 
30.4 	of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 
30.5 	tax obligations of the person who owned the property at the time the application related 
30.6 	to the improperly allowed homestead was filed. The treasurer may relieve a prior owner 
30.7 	of personal liability for the homestead benefits, penalty, interest, and costs, and instead 
30.8 	extend those amounts on the tax lists against the property as provided in this paragraph 
30.9 	to the extent that the current owner agrees in writing. On all demands, billings, property 
30.10 	tax statements, and related correspondence, the county must list and state separately the 
30.11 	amounts of homestead benefits, penalty, interest and costs being demanded, billed or 
30.12 	assessed.
30.13 	(i) (b) Any amount of homestead benefits recovered by the county from the property 
30.14 	owner shall be distributed to the county, city or town, and school district where the 
30.15 	property is located in the same proportion that each taxing district's levy was to the total 
30.16 	of the three taxing districts' levy for the current year. Any amount recovered attributable 
30.17 	to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 
30.18 	deposited in the taconite property tax relief account. Any amount recovered that is 
30.19 	attributable to supplemental homestead credit is to be transmitted to the commissioner of 
30.20 	revenue for deposit in the general fund of the state treasury. The total amount of penalty 
30.21 	collected must be deposited in the county general fund.
30.22 	(j) (c) If a property owner has applied for more than one homestead and the county 
30.23 	assessors cannot determine which property should be classified as homestead, the county 
30.24 	assessors will refer the information to the commissioner. The commissioner shall make 
30.25 	the determination and notify the counties within 60 days.
30.26 		Subd. 13c.Property lists. (k) In addition to lists of homestead properties, the 
30.27 	commissioner may ask the counties to furnish lists of all properties and the record owners. 
30.28 	The Social Security numbers and federal identification numbers that are maintained by 
30.29 	a county or city assessor for property tax administration purposes, and that may appear 
30.30 	on the lists retain their classification as private or nonpublic data; but may be viewed, 
30.31 	accessed, and used by the county auditor or treasurer of the same county for the limited 
30.32 	purpose of assisting the commissioner in the preparation of microdata samples under 
30.33 	section 270C.12. The commissioner shall use the information provided on the lists as 
30.34 	appropriate under the law, including for the detection of improper claims by owners, or 
30.35 	relatives of owners, under chapter 290A.
31.1 		Subd. 13d.Homestead data. (l) On or before April 30 each year beginning in 2007, 
31.2 	each county must provide the commissioner with the following data for each parcel of 
31.3 	homestead property by electronic means as defined in section 289A.02, subdivision 8:
31.4 	(i) (1) the property identification number assigned to the parcel for purposes of 
31.5 	taxes payable in the current year;
31.6 	(ii) (2) the name and Social Security number of each occupant of homestead property 
31.7 	who is the property owner, property owner's spouse, qualifying relative of a property 
31.8 	owner, or spouse of a qualifying relative;
31.9 	(iii) (3) the classification of the property under section 273.13 for taxes payable 
31.10 	in the current year and in the prior year;
31.11 	(iv) (4) an indication of whether the property was classified as a homestead for 
31.12 	taxes payable in the current year because of occupancy by a relative of the owner or 
31.13 	by a spouse of a relative;
31.14 	(v) (5) the property taxes payable as defined in section 290A.03, subdivision 13, for 
31.15 	the current year and the prior year;
31.16 	(vi) (6) the market value of improvements to the property first assessed for tax 
31.17 	purposes for taxes payable in the current year;
31.18 	(vii) (7) the assessor's estimated market value assigned to the property for taxes 
31.19 	payable in the current year and the prior year;
31.20 	(viii) (8) the taxable market value assigned to the property for taxes payable in the 
31.21 	current year and the prior year;
31.22 	(ix) (9) whether there are delinquent property taxes owing on the homestead;
31.23 	(x) (10) the unique taxing district in which the property is located; and
31.24 	(xi) (11) such other information as the commissioner decides is necessary.
31.25 	The commissioner shall use the information provided on the lists as appropriate 
31.26 	under the law, including for the detection of improper claims by owners, or relatives 
31.27 	of owners, under chapter 290A.

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

31.29 	Sec. 6. Minnesota Statutes 2011 Supplement, section 273.13, subdivision 23, is 
31.30 	amended to read:
31.31 		Subd. 23.Class 2. (a) An agricultural homestead consists of class 2a agricultural 
31.32 	land that is homesteaded, along with any class 2b rural vacant land that is contiguous to 
31.33 	the class 2a land under the same ownership. The market value of the house and garage 
31.34 	and immediately surrounding one acre of land has the same class rates as class 1a or 1b 
31.35 	property under subdivision 22. The value of the remaining land including improvements 
32.1 	up to the first tier valuation limit of agricultural homestead property has a net class rate 
32.2 	of 0.5 percent of market value. The remaining property over the first tier has a class rate 
32.3 	of one percent of market value. For purposes of this subdivision, the "first tier valuation 
32.4 	limit of agricultural homestead property" and "first tier" means the limit certified under 
32.5 	section 273.11, subdivision 23.
32.6 	(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 
32.7 	are agricultural land and buildings. Class 2a property has a net class rate of one percent of 
32.8 	market value, unless it is part of an agricultural homestead under paragraph (a). Class 
32.9 	2a property must also include any property that would otherwise be classified as 2b, 
32.10 	but is interspersed with class 2a property, including but not limited to sloughs, wooded 
32.11 	wind shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback 
32.12 	requirement, and other similar land that is impractical for the assessor to value separately 
32.13 	from the rest of the property or that is unlikely to be able to be sold separately from 
32.14 	the rest of the property.
32.15 	An assessor may classify the part of a parcel described in this subdivision that is used 
32.16 	for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
32.17 	(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, 
32.18 	that are unplatted real estate, rural in character and not used for agricultural purposes, 
32.19 	including land used for growing trees for timber, lumber, and wood and wood products, 
32.20 	that is not improved with a structure. The presence of a minor, ancillary nonresidential 
32.21 	structure as defined by the commissioner of revenue does not disqualify the property from 
32.22 	classification under this paragraph. Any parcel of 20 acres or more improved with a 
32.23 	structure that is not a minor, ancillary nonresidential structure must be split-classified, and 
32.24 	ten acres must be assigned to the split parcel containing the structure. Class 2b property 
32.25 	has a net class rate of one percent of market value unless it is part of an agricultural 
32.26 	homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
32.27 	(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 
32.28 	acres statewide per taxpayer that is being managed under a forest management plan that 
32.29 	meets the requirements of chapter 290C, but is not enrolled in the sustainable forest 
32.30 	resource management incentive program. It has a class rate of .65 percent, provided that 
32.31 	the owner of the property must apply to the assessor in order for the property to initially 
32.32 	qualify for the reduced rate and provide the information required by the assessor to verify 
32.33 	that the property qualifies for the reduced rate. If the assessor receives the application 
32.34 	and information before May 1 in an assessment year, the property qualifies beginning 
32.35 	with that assessment year. If the assessor receives the application and information after 
32.36 	April 30 in an assessment year, the property may not qualify until the next assessment 
33.1 	year. The commissioner of natural resources must concur that the land is qualified. The 
33.2 	commissioner of natural resources shall annually provide county assessors verification 
33.3 	information on a timely basis. The presence of a minor, ancillary nonresidential structure 
33.4 	as defined by the commissioner of revenue does not disqualify the property from 
33.5 	classification under this paragraph.
33.6 	(e) Agricultural land as used in this section means contiguous acreage of ten acres or 
33.7 	more, used during the preceding year for agricultural purposes.
33.8 	"Agricultural purposes" as used in this section means the raising, cultivation, drying, 
33.9 	or storage of agricultural products for sale, or the storage of machinery or equipment 
33.10 	used in support of agricultural production by the same farm entity. For a property to be 
33.11 	classified as agricultural based only on the drying or storage of agricultural products, 
33.12 	the products being dried or stored must have been produced by the same farm entity as 
33.13 	the entity operating the drying or storage facility. "Agricultural purposes" also includes 
33.14 	enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or 
33.15 	the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar 
33.16 	state or federal conservation program if the property was classified as agricultural (i) under 
33.17 	this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment. 
33.18 	Agricultural classification shall not be based upon the market value of any residential 
33.19 	structures on the parcel or contiguous parcels under the same ownership.
33.20 	(f) Real estate of less than ten acres, which is exclusively or intensively used for 
33.21 	raising or cultivating agricultural products, shall be considered as agricultural land. To 
33.22 	qualify under this paragraph, property that includes a residential structure must be used 
33.23 	intensively for one of the following purposes:
33.24 	(i) for drying or storage of grain or storage of machinery or equipment used to 
33.25 	support agricultural activities on other parcels of property owned and operated by the 
33.26 	same farming entity that owns the property with the residential structure;
33.27 	(ii) as a nursery, provided that only those acres used to produce nursery stock are 
33.28 	considered agricultural land;
33.29 	(iii) for livestock or poultry confinement, provided that land that is used only for 
33.30 	pasturing and grazing does not qualify; or
33.31 	(iv) for market farming; for purposes of this paragraph, "market farming" means the 
33.32 	cultivation of one or more fruits or vegetables or production of animal or other agricultural 
33.33 	products for sale to local markets by the farmer or an organization with which the farmer 
33.34 	is affiliated.
33.35 	(g) Land shall be classified as agricultural even if all or a portion of the agricultural 
33.36 	use of that property is the leasing to, or use by another person for agricultural purposes.
34.1 	Classification under this subdivision is not determinative for qualifying under 
34.2 	section 273.111.
34.3 	(h) The property classification under this section supersedes, for property tax 
34.4 	purposes only, any locally administered agricultural policies or land use restrictions that 
34.5 	define minimum or maximum farm acreage.
34.6 	(i) The term "agricultural products" as used in this subdivision includes production 
34.7 	for sale of:
34.8 	(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 
34.9 	animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 
34.10 	bees, and apiary products by the owner;
34.11 	(2) fish bred for sale and consumption if the fish breeding occurs on land zoned 
34.12 	for agricultural use;
34.13 	(3) the commercial boarding of horses, which may include related horse training and 
34.14 	riding instruction, if the boarding is done on property that is also used for raising pasture 
34.15 	to graze horses or raising or cultivating other agricultural products as defined in clause (1);
34.16 	(4) property which is owned and operated by nonprofit organizations used for 
34.17 	equestrian activities, excluding racing;
34.18 	(5) game birds and waterfowl bred and raised (i) on a game farm licensed under 
34.19 	section 97A.105, provided that the annual licensing report to the Department of Natural 
34.20 	Resources, which must be submitted annually by March 30 to the assessor, indicates 
34.21 	that at least 500 birds were raised or used for breeding stock on the property during the 
34.22 	preceding year and that the owner provides a copy of the owner's most recent schedule F; 
34.23 	or (ii) for use on a shooting preserve licensed under section 97A.115;
34.24 	(6) insects primarily bred to be used as food for animals;
34.25 	(7) trees, grown for sale as a crop, including short rotation woody crops, and not 
34.26 	sold for timber, lumber, wood, or wood products; and
34.27 	(8) maple syrup taken from trees grown by a person licensed by the Minnesota 
34.28 	Department of Agriculture under chapter 28A as a food processor.
34.29 	(j) If a parcel used for agricultural purposes is also used for commercial or industrial 
34.30 	purposes, including but not limited to:
34.31 	(1) wholesale and retail sales;
34.32 	(2) processing of raw agricultural products or other goods;
34.33 	(3) warehousing or storage of processed goods; and
34.34 	(4) office facilities for the support of the activities enumerated in clauses (1), (2), 
34.35 	and (3),
35.1 	the assessor shall classify the part of the parcel used for agricultural purposes as class 
35.2 	1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 
35.3 	use. The grading, sorting, and packaging of raw agricultural products for first sale is 
35.4 	considered an agricultural purpose. A greenhouse or other building where horticultural 
35.5 	or nursery products are grown that is also used for the conduct of retail sales must be 
35.6 	classified as agricultural if it is primarily used for the growing of horticultural or nursery 
35.7 	products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 
35.8 	those products. Use of a greenhouse or building only for the display of already grown 
35.9 	horticultural or nursery products does not qualify as an agricultural purpose.
35.10 	(k) The assessor shall determine and list separately on the records the market value 
35.11 	of the homestead dwelling and the one acre of land on which that dwelling is located. If 
35.12 	any farm buildings or structures are located on this homesteaded acre of land, their market 
35.13 	value shall not be included in this separate determination.
35.14 	(l) Class 2d airport landing area consists of a landing area or public access area of 
35.15 	a privately owned public use airport. It has a class rate of one percent of market value. 
35.16 	To qualify for classification under this paragraph, a privately owned public use airport 
35.17 	must be licensed as a public airport under section 360.018. For purposes of this paragraph, 
35.18 	"landing area" means that part of a privately owned public use airport properly cleared, 
35.19 	regularly maintained, and made available to the public for use by aircraft and includes 
35.20 	runways, taxiways, aprons, and sites upon which are situated landing or navigational aids. 
35.21 	A landing area also includes land underlying both the primary surface and the approach 
35.22 	surfaces that comply with all of the following:
35.23 	(i) the land is properly cleared and regularly maintained for the primary purposes of 
35.24 	the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 
35.25 	facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
35.26 	(ii) the land is part of the airport property; and
35.27 	(iii) the land is not used for commercial or residential purposes.
35.28 	The land contained in a landing area under this paragraph must be described and certified 
35.29 	by the commissioner of transportation. The certification is effective until it is modified, 
35.30 	or until the airport or landing area no longer meets the requirements of this paragraph. 
35.31 	For purposes of this paragraph, "public access area" means property used as an aircraft 
35.32 	parking ramp, apron, or storage hangar, or an arrival and departure building in connection 
35.33 	with the airport.
35.34 	(m) Class 2e consists of land with a commercial aggregate deposit that is not actively 
35.35 	being mined and is not otherwise classified as class 2a or 2b, provided that the land is not 
35.36 	located in a county that has elected to opt-out of the aggregate preservation program as 
36.1 	provided in section 273.1115, subdivision 6. It has a class rate of one percent of market 
36.2 	value. To qualify for classification under this paragraph, the property must be at least 
36.3 	ten contiguous acres in size and the owner of the property must record with the county 
36.4 	recorder of the county in which the property is located an affidavit containing:
36.5 	(1) a legal description of the property;
36.6 	(2) a disclosure that the property contains a commercial aggregate deposit that is not 
36.7 	actively being mined but is present on the entire parcel enrolled;
36.8 	(3) documentation that the conditional use under the county or local zoning 
36.9 	ordinance of this property is for mining; and
36.10 	(4) documentation that a permit has been issued by the local unit of government 
36.11 	or the mining activity is allowed under local ordinance. The disclosure must include a 
36.12 	statement from a registered professional geologist, engineer, or soil scientist delineating 
36.13 	the deposit and certifying that it is a commercial aggregate deposit.
36.14 	For purposes of this section and section 273.1115, "commercial aggregate deposit" 
36.15 	means a deposit that will yield crushed stone or sand and gravel that is suitable for use 
36.16 	as a construction aggregate; and "actively mined" means the removal of top soil and 
36.17 	overburden in preparation for excavation or excavation of a commercial deposit.
36.18 	(n) When any portion of the property under this subdivision or subdivision 22 begins 
36.19 	to be actively mined, the owner must file a supplemental affidavit within 60 days from 
36.20 	the day any aggregate is removed stating the number of acres of the property that is 
36.21 	actively being mined. The acres actively being mined must be (1) valued and classified 
36.22 	under subdivision 24 in the next subsequent assessment year, and (2) removed from the 
36.23 	aggregate resource preservation property tax program under section 273.1115, if the 
36.24 	land was enrolled in that program. Copies of the original affidavit and all supplemental 
36.25 	affidavits must be filed with the county assessor, the local zoning administrator, and the 
36.26 	Department of Natural Resources, Division of Land and Minerals. A supplemental 
36.27 	affidavit must be filed each time a subsequent portion of the property is actively mined, 
36.28 	provided that the minimum acreage change is five acres, even if the actual mining activity 
36.29 	constitutes less than five acres.
36.30 	(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are 
36.31 	not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions 
36.32 	in section 14.386 concerning exempt rules do not apply.

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

36.34 	Sec. 7. Minnesota Statutes 2010, section 273.1315, subdivision 1, is amended to read:
37.1 		Subdivision 1.Class 1b homestead declaration before 2009. Any property owner 
37.2 	seeking classification and assessment of the owner's homestead as class 1b property 
37.3 	pursuant to section 273.13, subdivision 22, paragraph (b), on or before October 1, 2008, 
37.4 	shall file with the commissioner of revenue a 1b homestead declaration, on a form 
37.5 	prescribed by the commissioner. The declaration shall contain the following information:
37.6 	(a) (1) the information necessary to verify that on or before June 30 of the filing year, 
37.7 	the property owner or the owner's spouse satisfies the requirements of section 273.13, 
37.8 	subdivision 22, paragraph (b), for 1b classification; and
37.9 	(b) (2) any additional information prescribed by the commissioner.
37.10 	The declaration must be filed on or before October 1 to be effective for property 
37.11 	taxes payable during the succeeding calendar year. The declaration and any supplementary 
37.12 	information received from the property owner pursuant to this subdivision shall be subject 
37.13 	to chapter 270B. If approved by the commissioner, the declaration remains in effect until 
37.14 	the property no longer qualifies under section 273.13, subdivision 22, paragraph (b). 
37.15 	Failure to notify the commissioner within 30 days that the property no longer qualifies 
37.16 	under that paragraph because of a sale, change in occupancy, or change in the status 
37.17 	or condition of an occupant shall result in the penalty provided in section 273.124, 
37.18 	subdivision 13 13b, computed on the basis of the class 1b benefits for the property, and 
37.19 	the property shall lose its current class 1b classification.
37.20 	The commissioner shall provide to the assessor on or before November 1 a listing 
37.21 	of the parcels of property qualifying for 1b classification.

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

37.23 	Sec. 8. Minnesota Statutes 2010, section 273.1315, subdivision 2, is amended to read:
37.24 		Subd. 2.Class 1b homestead declaration 2009 and thereafter. (a) Any property 
37.25 	owner seeking classification and assessment of the owner's homestead as class 1b property 
37.26 	pursuant to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file 
37.27 	with the county assessor a class 1b homestead declaration, on a form prescribed by the 
37.28 	commissioner of revenue. The declaration must contain the following information:
37.29 	(1) the information necessary to verify that, on or before June 30 of the filing year, 
37.30 	the property owner or the owner's spouse satisfies the requirements of section 273.13, 
37.31 	subdivision 22, paragraph (b), for class 1b classification; and
37.32 	(2) any additional information prescribed by the commissioner.
37.33 	(b) The declaration must be filed on or before October 1 to be effective for property 
37.34 	taxes payable during the succeeding calendar year. The Social Security numbers and 
37.35 	income and medical information received from the property owner pursuant to this 
38.1 	subdivision are private data on individuals as defined in section 13.02. If approved by 
38.2 	the assessor, the declaration remains in effect until the property no longer qualifies under 
38.3 	section 273.13, subdivision 22, paragraph (b). Failure to notify the assessor within 30 
38.4 	days that the property no longer qualifies under that paragraph because of a sale, change in 
38.5 	occupancy, or change in the status or condition of an occupant shall result in the penalty 
38.6 	provided in section 273.124, subdivision 13 13b, computed on the basis of the class 1b 
38.7 	benefits for the property, and the property shall lose its current class 1b classification.

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

38.9 	Sec. 9. Minnesota Statutes 2010, section 273.19, subdivision 1, is amended to read:
38.10 		Subdivision 1.Tax-exempt property; lease. Except as provided in subdivision 3 or 
38.11 	4, tax-exempt property held under a lease for a term of at least one year, and not taxable 
38.12 	under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall 
38.13 	be considered, for all purposes of taxation, as the property of the person holding it. In 
38.14 	this subdivision, "tax-exempt property" means property owned by the United States, the 
38.15 	state or any of its political subdivisions, a school, or any religious, scientific, or benevolent 
38.16 	society or institution, incorporated or unincorporated, or any corporation whose property 
38.17 	is not taxed in the same manner as other property. This subdivision does not apply to 
38.18 	property exempt from taxation under section 272.01, subdivision 2, paragraph (b), clauses 
38.19 	(2), (3), and (4), or to property exempt from taxation under section 272.0213.

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

38.21 	Sec. 10. Minnesota Statutes 2010, section 273.39, is amended to read:
38.22 	273.39 RURAL AREA.
38.23 	As used in sections 273.39 to 273.41, the term "rural area" shall be deemed to mean 
38.24 	any area of the state not included within the boundaries of any incorporated statutory 
38.25 	city or home rule charter city, and such term shall be deemed to include both farm and 
38.26 	nonfarm population thereof.

38.27 	EFFECTIVE DATE. This section is effective beginning with assessment year 2012.

38.28 	Sec. 11. Minnesota Statutes 2010, section 279.06, subdivision 1, is amended to read:
38.29 		Subdivision 1.List and notice. Within five days after the filing of such list, the 
38.30 	court administrator shall return a copy thereof to the county auditor, with a notice prepared 
39.1 	and signed by the court administrator, and attached thereto, which may be substantially in 
39.2 	the following form:

39.3	State of Minnesota
	)
			
39.4		) ss.
			
39.5	County of 
........	)
			
39.6				District Court
	
39.7				........Judicial District.
	
39.8 	The state of Minnesota, to all persons, companies, or corporations who have or claim 
39.9 	any estate, right, title, or interest in, claim to, or lien upon, any of the several parcels of 
39.10 	land described in the list hereto attached:
39.11 	The list of taxes and penalties on real property for the county of ............................... 
39.12 	remaining delinquent on the first Monday in January, ......., has been filed in the office of 
39.13 	the court administrator of the district court of said county, of which that hereto attached is a 
39.14 	copy. Therefore, you, and each of you, are hereby required to file in the office of said court 
39.15 	administrator, on or before the 20th day after the publication of this notice and list, your 
39.16 	answer, in writing, setting forth any objection or defense you may have to the taxes, or any 
39.17 	part thereof, upon any parcel of land described in the list, in, to, or on which you have or 
39.18 	claim any estate, right, title, interest, claim, or lien, and, in default thereof, judgment will 
39.19 	be entered against such parcel of land for the taxes on such list appearing against it, and 
39.20 	for all penalties, interest, and costs. Based upon said judgment, the land shall be sold to 
39.21 	the state of Minnesota on the second Monday in May, ....... The period of redemption for 
39.22 	all lands sold to the state at a tax judgment sale shall be three years from the date of sale to 
39.23 	the state of Minnesota if the land is within an incorporated area unless it is:
39.24 	(a) nonagricultural homesteaded land as defined in section 273.13, subdivision 22;
39.25 	(b) homesteaded agricultural land as defined in section 273.13, subdivision 23, 
39.26 	paragraph (a);
39.27 	(c) seasonal residential recreational land as defined in section 273.13, subdivisions 
39.28 	22, paragraph (c), and 25, paragraph (d), clause (1), in which event the period of 
39.29 	redemption is five years from the date of sale to the state of Minnesota;
39.30 	(d) abandoned property and pursuant to section 281.173 a court order has been 
39.31 	entered shortening the redemption period to five weeks; or
39.32 	(e) vacant property as described under section 281.174, subdivision 2, and for which 
39.33 	a court order is entered shortening the redemption period under section 281.174.
39.34 	The period of redemption for all other lands sold to the state at a tax judgment sale 
39.35 	shall be five years from the date of sale.
39.36 	Inquiries as to the proceedings set forth above can be made to the county auditor of 
39.37 	..... county whose address is ......

40.1		(Signed) ........,
	
40.2
40.3		Court Administrator of the District Court of the
County of 
........	
40.4		(Here insert list.)
	
40.5 	The notice must contain a narrative description of the various periods to redeem 
40.6 	specified in sections 281.17, 281.173, and 281.174, in the manner prescribed by the 
40.7 	commissioner of revenue under subdivision 2.
40.8 	The list referred to in the notice shall be substantially in the following form:
40.9 	List of real property for the county of ......................., on which taxes remain 
40.10 	delinquent on the first Monday in January, .......
40.11 	Town of (Fairfield),
40.12 	Township (40), Range (20),

40.13
40.14
40.15
40.16
40.17
40.18
40.19
40.20	Names (and Current 
Filed Addresses) for 
the Taxpayers and Fee 
Owners and in Addition 
Those Parties Who Have 
Filed Their Addresses 
Pursuant to section 
276.041
	Subdivision of
Section
	Section
	Tax Parcel
Number
	Total Tax 
and Penalty
	
40.21					$ cts.

40.22
40.23	John Jones (825 Fremont 
Fairfield, MN 55000)
	S.E. 1/4 of S.W. 1/4
	10
	23101
	2.20

40.24
40.25
40.26
40.27
40.28
40.29
40.30
40.31
40.32
40.33
40.34
40.35
40.36
40.37
40.38
40.39
40.40
40.41
40.42	Bruce Smith (2059 Hand 
Fairfield, MN 55000) 
and Fairfield State 
Bank (100 Main Street 
Fairfield, MN 55000)
	That part of N.E. 1/4 
of S.W. 1/4 desc. as 
follows: Beg. at the 
S.E. corner of said N.E. 
1/4 of S.W. 1/4; thence 
N. along the E. line of 
said N.E. 1/4 of S.W. 
1/4 a distance of 600 
ft.; thence W. parallel 
with the S. line of said 
N.E. 1/4 of S.W. 1/4 
a distance of 600 ft.; 
thence S. parallel with 
said E. line a distance of 
600 ft. to S. line of said 
N.E. 1/4 of S.W. 1/4; 
thence E. along said S. 
line a distance of 600 ft. 
to the point of beg.
	21
	33211
	3.15
	
40.43 	As to platted property, the form of heading shall conform to circumstances and be 
40.44 	substantially in the following form:
40.45 	City of (Smithtown)
40.46 	Brown's Addition, or Subdivision

41.1
41.2
41.3
41.4
41.5
41.6
41.7
41.8	Names (and Current 
Filed Addresses) for 
the Taxpayers and Fee 
Owners and in Addition 
Those Parties Who Have 
Filed Their Addresses 
Pursuant to section 
276.041
	Lot
	Block
	Tax Parcel
Number
	Total Tax
and Penalty
	
41.9					$ cts.

41.10
41.11	John Jones (825 Fremont 
Fairfield, MN 55000)
	15
	9
	58243
	2.20
	
41.12
41.13
41.14
41.15
41.16	Bruce Smith (2059 Hand 
Fairfield, MN 55000) 
and Fairfield State 
Bank (100 Main Street 
Fairfield, MN 55000)
	16
	9
	58244
	3.15
	
41.17 	The names, descriptions, and figures employed in parentheses in the above forms are 
41.18 	merely for purposes of illustration.
41.19 	The name of the town, township, range or city, and addition or subdivision, as the 
41.20 	case may be, shall be repeated at the head of each column of the printed lists as brought 
41.21 	forward from the preceding column.
41.22 	Errors in the list shall not be deemed to be a material defect to affect the validity 
41.23 	of the judgment and sale.

41.24 	EFFECTIVE DATE. This section is effective for lists and notices required after 
41.25 	December 31, 2012.

41.26 	Sec. 12. Minnesota Statutes 2010, section 290A.25, is amended to read:
41.27 	290A.25 VERIFICATION OF SOCIAL SECURITY NUMBERS.
41.28 	Annually, the commissioner of revenue shall furnish a list to the county assessor 
41.29 	containing the names and Social Security numbers of persons who have applied for both 
41.30 	homestead classification under section 273.13 and a property tax refund as a renter 
41.31 	under this chapter.
41.32 	Within 90 days of the notification, the county assessor shall investigate to determine 
41.33 	if the homestead classification was improperly claimed. If the property owner does 
41.34 	not qualify, the county assessor shall notify the county auditor who will determine the 
41.35 	amount of homestead benefits that has been improperly allowed. For the purpose of this 
41.36 	section, "homestead benefits" has the meaning given in section 273.124, subdivision 
41.37 	13, paragraph (h) 13b. The county auditor shall send a notice to persons who owned the 
41.38 	affected property at the time the homestead application related to the improper homestead 
41.39 	was filed, demanding reimbursement of the homestead benefits plus a penalty equal to 
42.1 	100 percent of the homestead benefits. The person notified may appeal the county's 
42.2 	determination with the Minnesota Tax Court within 60 days of the date of the notice from 
42.3 	the county as provided in section 273.124, subdivision 13, paragraph (h) 13b.
42.4 	If the amount of homestead benefits and penalty is not paid within 60 days, and if 
42.5 	no appeal has been filed, the county auditor shall certify the amount of taxes and penalty 
42.6 	to the county treasurer. The county treasurer will add interest to the unpaid homestead 
42.7 	benefits and penalty amounts at the rate provided for delinquent personal property taxes 
42.8 	for the period beginning 60 days after demand for payment was made until payment. If 
42.9 	the person notified is the current owner of the property, the treasurer may add the total 
42.10 	amount of benefits, penalty, interest, and costs to the real estate taxes otherwise payable on 
42.11 	the property in the following year. If the person notified is not the current owner of the 
42.12 	property, the treasurer may collect the amounts due under the Revenue Recapture Act in 
42.13 	chapter 270A, or use any of the powers granted in sections 277.20 and 277.21 without 
42.14 	exclusion, to enforce payment of the benefits, penalty, interest, and costs, as if those 
42.15 	amounts were delinquent tax obligations of the person who owned the property at the time 
42.16 	the application related to the improperly allowed homestead was filed. The treasurer may 
42.17 	relieve a prior owner of personal liability for the benefits, penalty, interest, and costs, and 
42.18 	instead extend those amounts on the tax lists against the property for taxes payable in the 
42.19 	following year to the extent that the current owner agrees in writing.
42.20 	Any amount of homestead benefits recovered by the county from the property owner 
42.21 	shall be distributed to the county, city or town, and school district where the property is 
42.22 	located in the same proportion that each taxing district's levy was to the total of the three 
42.23 	taxing districts' levy for the current year. Any amount recovered attributable to taconite 
42.24 	homestead credit shall be transmitted to the St. Louis County auditor to be deposited in 
42.25 	the taconite property tax relief account. Any amount recovered that is attributable to 
42.26 	supplemental homestead credit is to be transmitted to the commissioner of revenue for 
42.27 	deposit in the general fund of the state treasury. The total amount of penalty collected 
42.28 	must be deposited in the county general fund.

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

42.30 	Sec. 13. Minnesota Statutes 2010, section 290B.04, subdivision 2, is amended to read:
42.31 		Subd. 2.Approval; recording. The commissioner shall approve all initial 
42.32 	applications that qualify under this chapter and shall notify qualifying homeowners on or 
42.33 	before December 1. The commissioner may investigate the facts or require confirmation 
42.34 	in regard to an application. The commissioner shall record or file a notice of qualification 
42.35 	for deferral, including the names of the qualifying homeowners and a legal description 
43.1 	of the property, in the office of the county recorder, or registrar of titles, whichever is 
43.2 	applicable, in the county where the qualifying property is located. The notice must state 
43.3 	that it serves as a notice of lien and that it includes deferrals under this section for future 
43.4 	years. The commissioner shall prescribe the form of the notice. Execution of the notice 
43.5 	by the original or facsimile signature of the commissioner or a delegate entitles them to 
43.6 	be recorded, and no other attestation, certification, or acknowledgment is necessary. The 
43.7 	homeowner shall pay the recording or filing fees for the notice, which, notwithstanding 
43.8 	section 357.18, shall be paid by the homeowner at the time of satisfaction of the lien.

43.9 	EFFECTIVE DATE. This section is effective for notices that are both executed 
43.10 	and recorded after June 30, 2012.

43.11 	Sec. 14. Minnesota Statutes 2011 Supplement, section 373.01, subdivision 1, is 
43.12 	amended to read:
43.13 		Subdivision 1.Public corporation; listed powers. (a) Each county is a body politic 
43.14 	and corporate and may:
43.15 	(1) Sue and be sued.
43.16 	(2) Acquire and hold real and personal property for the use of the county, and lands 
43.17 	sold for taxes as provided by law.
43.18 	(3) Purchase and hold for the benefit of the county real estate sold by virtue of 
43.19 	judicial proceedings, to which the county is a party.
43.20 	(4) Sell, lease, and convey real or personal estate owned by the county, and give 
43.21 	contracts or options to sell, lease, or convey it, and make orders respecting it as deemed 
43.22 	conducive to the interests of the county's inhabitants.
43.23 	(5) Make all contracts and do all other acts in relation to the property and concerns 
43.24 	of the county necessary to the exercise of its corporate powers.
43.25 	(b) No sale, lease, or conveyance of real estate owned by the county, except the lease 
43.26 	of a residence acquired for the furtherance of an approved capital improvement project, nor 
43.27 	any contract or option for it, shall be valid, without first advertising for bids or proposals in 
43.28 	the official newspaper of the county for three consecutive weeks and once in a newspaper 
43.29 	of general circulation in the area where the property is located. The notice shall state the 
43.30 	time and place of considering the proposals, contain a legal description of any real estate, 
43.31 	and a brief description of any personal property. Leases that do not exceed $15,000 for any 
43.32 	one year may be negotiated and are not subject to the competitive bid procedures of this 
43.33 	section. All proposals estimated to exceed $15,000 in any one year shall be considered at 
43.34 	the time set for the bid opening, and the one most favorable to the county accepted, but the 
43.35 	county board may, in the interest of the county, reject any or all proposals.
44.1 	(c) Sales of personal property the value of which is estimated to be $15,000 or 
44.2 	more shall be made only after advertising for bids or proposals in the county's official 
44.3 	newspaper, on the county's Web site, or in a recognized industry trade journal. At the same 
44.4 	time it posts on its Web site or publishes in a trade journal, the county must publish in the 
44.5 	official newspaper, either as part of the minutes of a regular meeting of the county board 
44.6 	or in a separate notice, a summary of all requests for bids or proposals that the county 
44.7 	advertises on its Web site or in a trade journal. After publication in the official newspaper, 
44.8 	on the Web site, or in a trade journal, bids or proposals may be solicited and accepted by 
44.9 	the electronic selling process authorized in section 471.345, subdivision 17. Sales of 
44.10 	personal property the value of which is estimated to be less than $15,000 may be made 
44.11 	either on competitive bids or in the open market, in the discretion of the county board. 
44.12 	"Web site" means a specific, addressable location provided on a server connected to the 
44.13 	Internet and hosting World Wide Web pages and other files that are generally accessible 
44.14 	on the Internet all or most of a day.
44.15 	(d) Notwithstanding anything to the contrary herein, the county may, when acquiring 
44.16 	real property for county highway right-of-way, exchange parcels of real property of 
44.17 	substantially similar or equal value without advertising for bids. The estimated values for 
44.18 	these parcels shall be determined by the county assessor.
44.19 	(e) Notwithstanding anything in this section to the contrary, the county may, when 
44.20 	acquiring real property for purposes other than county highway right-of-way, exchange 
44.21 	parcels of real property of substantially similar or equal value without advertising for bids. 
44.22 	The estimated values for these parcels must be determined by the county assessor or a 
44.23 	private appraisal performed by a licensed Minnesota real estate appraiser. For the purpose 
44.24 	of making these estimates, the county assessor need not be licensed under chapter 82B. 
44.25 	Before giving final approval to any exchange of land, the county board shall hold a public 
44.26 	hearing on the exchange. At least two weeks before the hearing, the county auditor shall 
44.27 	post a notice in the auditor's office and the official newspaper of the county of the hearing 
44.28 	that contains a description of the lands affected.
44.29 	(f) If real estate or personal property remains unsold after advertising for and 
44.30 	consideration of bids or proposals the county may employ a broker to sell the property. 
44.31 	The broker may sell the property for not less than 90 percent of its appraised market value 
44.32 	as determined by the county. The broker's fee shall be set by agreement with the county but 
44.33 	may not exceed ten percent of the sale price and must be paid from the proceeds of the sale.
44.34 	(g) A county or its agent may rent a county-owned residence acquired for the 
44.35 	furtherance of an approved capital improvement project subject to the conditions set 
45.1 	by the county board and not subject to the conditions for lease otherwise provided by 
45.2 	paragraph (a), clause (4), and paragraphs (b), (c), (d), (f), and (h).
45.3 	(h) In no case shall lands be disposed of without there being reserved to the county 
45.4 	all iron ore and other valuable minerals in and upon the lands, with right to explore for, 
45.5 	mine and remove the iron ore and other valuable minerals, nor shall the minerals and 
45.6 	mineral rights be disposed of, either before or after disposition of the surface rights, 
45.7 	otherwise than by mining lease, in similar general form to that provided by section 93.20 
45.8 	for mining leases affecting state lands. The lease shall be for a term not exceeding 50 
45.9 	years, and be issued on a royalty basis, the royalty to be not less than 25 cents per ton of 
45.10 	2,240 pounds, and fix a minimum amount of royalty payable during each year, whether 
45.11 	mineral is removed or not. Prospecting options for mining leases may be granted for 
45.12 	periods not exceeding one year. The options shall require, among other things, periodical 
45.13 	showings to the county board of the results of exploration work done.
45.14 	(i) Notwithstanding anything in this subdivision to the contrary, the county may, 
45.15 	when selling real property owned in fee simple that cannot be improved because of 
45.16 	noncompliance with local ordinances regarding minimum area, shape, frontage, or access, 
45.17 	proceed to sell the nonconforming parcel without advertising for bid. At the county's 
45.18 	discretion, the real property may be restricted to sale to adjoining landowners or may be 
45.19 	sold to any other interested party. The property shall be sold to the highest bidder, but 
45.20 	in no case shall the property be sold for less than 90 percent of its fair market value as 
45.21 	determined by the county assessor. All owners of land adjoining the land to be sold shall 
45.22 	be given a written notice at least 30 days before the sale. This paragraph shall be liberally 
45.23 	construed to encourage the sale of nonconforming real property and promote its return to 
45.24 	the tax roles.

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

45.26 	Sec. 15.  REPEALER.
 45.27 	(a) Minnesota Statutes 2010, section 272.69, is repealed.
45.28 	(b) Minnesota Statutes 2010, section 273.11, subdivision 22, is repealed.

45.29 	EFFECTIVE DATE. Paragraph (a) is effective the day following final enactment. 
45.30 	Paragraph (b) is effective for taxes payable in 2013 and thereafter.

46.1 	ARTICLE 4
46.2 	SALES AND USE TAXES; SPECIAL TAXES

46.3 	Section 1. Minnesota Statutes 2010, section 287.20, is amended by adding a 
46.4 	subdivision to read:
46.5 		Subd. 11.Partition. "Partition" means the division by conveyance of real property 
46.6 	that is held jointly or in common by two or more persons into individually owned interests. 
46.7 	If one of the co-owners gives consideration for all or a part of the individually owned 
46.8 	interest conveyed to them, that portion of the conveyance is not a part of the partition.

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

46.10 	Sec. 2. Minnesota Statutes 2010, section 297I.05, subdivision 11, is amended to read:
46.11 		Subd. 11.Retaliatory provisions. (a) If any other state or country imposes any 
46.12 	taxes, fines, deposits, penalties, licenses, or fees upon any insurance companies of this 
46.13 	state and their agents doing business in another state or country that are in addition to or in 
46.14 	excess of those imposed by the laws of this state upon foreign insurance companies and 
46.15 	their agents doing business in this state, the same taxes, fines, deposits, penalties, licenses, 
46.16 	and fees are imposed upon every similar insurance company of that state or country and 
46.17 	their agents doing or applying to do business in this state.
46.18 	(b) If any conditions precedent to the right to do business in any other state or 
46.19 	country are imposed by the laws of that state or country, beyond those imposed upon 
46.20 	foreign companies by the laws of this state, the same conditions precedent are imposed 
46.21 	upon every similar insurance company of that state or country and their agents doing or 
46.22 	applying to do business in that state.
46.23 	(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or 
46.24 	fees" means an amount of money that is deposited in the general revenue fund of the state 
46.25 	or other similar fund in another state or country and is not dedicated to a special purpose 
46.26 	or use or money deposited in the general revenue fund of the state or other similar fund in 
46.27 	another state or country and appropriated to the commissioner of commerce or insurance 
46.28 	for the operation of the Department of Commerce or other similar agency with jurisdiction 
46.29 	over insurance. Taxes, fines, deposits, penalties, licenses, or fees do not include:
46.30 	(1) special purpose obligations or assessments imposed in connection with particular 
46.31 	kinds of insurance, including but not limited to assessments imposed in connection with 
46.32 	residual market mechanisms; or
46.33 	(2) assessments made by the insurance guaranty association, life and health 
46.34 	guarantee association, or similar association.
47.1 	(d) This subdivision applies to taxes imposed under subdivisions 1,; 3,; 4, 6, and; 12, 
47.2 	paragraph (a), clauses (1) and (2); and 14.
47.3 	(e) This subdivision does not apply to insurance companies organized or domiciled 
47.4 	in a state or country, the laws of which do not impose retaliatory taxes, fines, deposits, 
47.5 	penalties, licenses, or fees or which grant, on a reciprocal basis, exemptions from 
47.6 	retaliatory taxes, fines, deposits, penalties, licenses, or fees to insurance companies 
47.7 	domiciled in this state.

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

47.9 	Sec. 3. Laws 2011, First Special Session chapter 7, article 10, section 7, is amended to 
47.10 	read:
47.11 	Sec. 7. PURPOSE STATEMENTS; TAX EXPENDITURES.
 47.12 		Subdivision 1.Authority. This section is intended to fulfill the requirement under 
47.13 	Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax 
47.14 	expenditure provide a purpose for the tax expenditure and a standard or goal against 
47.15 	which its effectiveness may be measured.
47.16 		Subd. 2.Estate tax exclusion for qualified farm and small business property.
 47.17 	The provisions of article 1, sections 3 through 8, providing an estate tax subtraction of 
47.18 	the combined value of qualified farm property and qualified small business property up 
47.19 	to $4,000,000 from the federal adjusted taxable estate, are intended to provide estate tax 
47.20 	reductions to owner-operators of family farms and small businesses to allow retention and 
47.21 	continued operation of those farms and businesses by the families.
47.22 		Subd. 3.Federal update. The provisions of article 2, conforming Minnesota 
47.23 	individual income, corporate franchise, and estate taxes to changes in federal law, are 
47.24 	intended to simplify compliance with and administration of those taxes.
47.25 		Subd. 4.Sales tax exemption for ring tones. The provisions of article 3, section 1, 
47.26 	exempting ring tones from sales taxation are intended (1) to bring the state of Minnesota 
47.27 	into compliance with the requirements of the streamlined sales tax agreement and (2) to 
47.28 	simplify the tax and to make compliance with the sales tax by remote sellers easier to 
47.29 	encourage congress to enact federal legislation allowing state and local governments to 
47.30 	require remote sellers to collect use tax on behalf of the state and its local governments.
47.31 		Subd. 5.Materials used in minerals processing equipment. The provisions of 
47.32 	article 3, section 6, extending the sales tax exemption for certain equipment milling and 
47.33 	grinding materials used in processing of minerals is intended to provide sales tax treatment 
47.34 	for the nonferrous mining industry equivalent to that provided to the taconite mining 
48.1 	industry. Because these purchases are intermediate inputs to production, the legislature 
48.2 	does not consider this allowance to be a tax expenditure.
48.3 		Subd. 6.Sales tax exemption for on resold admission tickets. The provisions 
48.4 	of article 3, section 8, providing an exemption for resold admission tickets by allowing 
48.5 	resale ticket sellers (ticket resellers) to claim a refund or provide a credit to the purchaser 
48.6 	of resold tickets for the value of sales tax paid on the original ticket, is intended to reduce 
48.7 	the competitive advantage of ticket resellers that do not have nexus in Minnesota requiring 
48.8 	them to collect Minnesota sales tax and to ensure while ensuring that resold the overall 
48.9 	sales tax remitted on admission tickets that are subject to sold to individuals or ticket 
48.10 	resellers, and then finally resold by ticket resellers, equals or exceeds sales tax only on the 
48.11 	full, sales price on the final retail price sale of the tickets. As a result, the legislature does 
48.12 	not consider this to be a tax expenditure.
48.13 		Subd. 7.Sales tax exemption for sales to townships. The provisions of article 3, 
48.14 	sections 10 and 11, exempting goods and services purchased by townships, is intended 
48.15 	to provide state assistance for the functions of Minnesota townships not exempted under 
48.16 	current law. 
48.17 		Subd. 8.Sales tax exemption; water purchases. The provisions of article 3, 
48.18 	section 11, exempting water purchases by fire departments, fire protection districts, and 
48.19 	fire companies is intended to provide state assistance for this public safety function 
48.20 	of Minnesota local governments.
48.21 		Subd. 9.Emergency vehicles. The provisions of article 3, section 12, extending 
48.22 	the sales tax exemption for lease of ambulances to other emergency vehicles are intended 
48.23 	to clarify the exemption and to provide consistent treatment of emergency vehicles. The 
48.24 	underlying purpose of the exemption is to provide state assistance to local governments 
48.25 	and other organizations that provide emergency response services.

48.26 	EFFECTIVE DATE. This section is effective retroactively from July 21, 2011.

48.27 	ARTICLE 5
48.28 	MINERALS

48.29 	Section 1. Minnesota Statutes 2011 Supplement, section 272.02, subdivision 97, 
48.30 	is amended to read:
48.31 		Subd. 97.Property used in business of mining subject to net proceeds tax. The 
48.32 	following property used in the business of mining that is subject to the net proceeds tax 
48.33 	under section 298.015 is exempt:
48.34 	(1) deposits of ores, metals, and minerals and the lands in which they are contained;
49.1 	(2) all real and personal property used in mining, quarrying, producing, or refining 
49.2 	ores, minerals, or metals, including lands occupied by or used in connection with the 
49.3 	mining, quarrying, production, or ore refining facilities; and
49.4 	(3) concentrate or direct reduced ore.
49.5 	This exemption applies for each year that a person subject to tax under section 
49.6 	298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or 
49.7 	minerals.

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

49.9 	Sec. 2. Minnesota Statutes 2011 Supplement, section 298.01, subdivision 3, is 
49.10 	amended to read:
49.11 		Subd. 3.Occupation tax; other ores.  Every person engaged in the business of 
49.12 	mining, refining, or producing ores, metals, or minerals in this state, except iron ore or 
49.13 	taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided 
49.14 	in this subdivision. For purposes of this subdivision, mining includes the application of 
49.15 	hydrometallurgical processes. Hydrometallurgical processes are processes that extract 
49.16 	the ores, metals, or minerals, by use of aqueous solutions that leach, concentrate, and 
49.17 	recover the ore, metal, or mineral. The tax is determined in the same manner as the tax 
49.18 	imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17, 
49.19 	subdivision 4, and 290.191, subdivision 2, do not apply, and the occupation tax must 
49.20 	be computed by applying to taxable income the rate of 2.45 percent. A person subject 
49.21 	to occupation tax under this section shall apportion its net income on the basis of the 
49.22 	percentage obtained by taking the sum of:
49.23 	(1) 75 percent of the percentage which the sales made within this state in connection 
49.24 	with the trade or business during the tax period are of the total sales wherever made in 
49.25 	connection with the trade or business during the tax period;
49.26 	(2) 12.5 percent of the percentage which the total tangible property used by the 
49.27 	taxpayer in this state in connection with the trade or business during the tax period is of 
49.28 	the total tangible property, wherever located, used by the taxpayer in connection with the 
49.29 	trade or business during the tax period; and
49.30 	(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 
49.31 	in this state or paid in respect to labor performed in this state in connection with the trade 
49.32 	or business during the tax period are of the taxpayer's total payrolls paid or incurred in 
49.33 	connection with the trade or business during the tax period.
49.34 	The tax is in addition to all other taxes.

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

50.2 	Sec. 3. Minnesota Statutes 2010, section 298.018, subdivision 2, is amended to read:
50.3 		Subd. 2.Outside taconite assistance area. The proceeds of the tax paid under 
50.4 	sections 298.015 to 298.017 on ores, metals, or minerals and energy resources mined 
50.5 	or extracted outside of the taconite assistance area defined in section 273.1341, shall 
50.6 	be deposited in the general fund.

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

50.8 	ARTICLE 6
50.9 	MISCELLANEOUS

50.10 	Section 1. Minnesota Statutes 2010, section 16A.46, is amended to read:
50.11 	16A.46 LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.
50.12 		Subdivision 1.Duplicate warrant. The commissioner may issue a duplicate 
50.13 	of an unpaid warrant to an owner if the owner certifies that the original was lost or 
50.14 	destroyed. The commissioner may require certification be documented by affidavit.
50.15 	The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the 
50.16 	commissioner acts in good faith the commissioner is not liable, whether the application is 
50.17 	granted or denied.
50.18 		Subd. 2.Original warrant is void. When the duplicate is issued, the original is 
50.19 	void. The commissioner may require an indemnity bond from the applicant to the state for 
50.20 	double the amount of the warrant for anyone damaged by the issuance of the duplicate. 
50.21 	The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the 
50.22 	commissioner acts in good faith the commissioner is not liable, whether the application is 
50.23 	granted or denied is not liable to any holder who took the void original warrant for value, 
50.24 	whether the commissioner required an indemnity bond from the applicant or not.
50.25 		Subd. 3.Unpaid refund or rebate. For an unpaid refund or rebate issued under a 
50.26 	tax law administered by the commissioner of revenue that has been lost or destroyed, an 
50.27 	affidavit is not required for the commissioner to issue a duplicate if the duplicate is issued 
50.28 	to the same name and Social Security number as the original warrant and that information 
50.29 	is verified on a tax return filed by the recipient.

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

50.31 	Sec. 2. Minnesota Statutes 2010, section 270C.42, subdivision 2, is amended to read:
51.1 		Subd. 2.Penalty for failure to pay electronically. In addition to other applicable 
51.2 	penalties imposed by law, after notification from the commissioner to the taxpayer that 
51.3 	payments for a tax payable to the commissioner are required to be made by electronic 
51.4 	means, and the payments are remitted by some other means, there is a penalty in the 
51.5 	amount of five percent of each payment that should have been remitted electronically. 
51.6 	After the commissioner's initial notification to the taxpayer that payments are required to 
51.7 	be made by electronic means, the commissioner is not required to notify the taxpayer in 
51.8 	subsequent periods if the initial notification specified the amount of tax liability at which a 
51.9 	taxpayer is required to remit payments by electronic means. The penalty can be abated 
51.10 	under the abatement procedures prescribed in section 270C.34 if the failure to remit the 
51.11 	payment electronically is due to reasonable cause. The penalty bears interest at the rate 
51.12 	specified in section 270C.40 from the due date of the payment of the tax provided in 
51.13 	section 270C.40, subdivision 3, to the date of payment of the penalty.

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

51.15 	Sec. 3. Minnesota Statutes 2010, section 287.385, subdivision 7, is amended to read:
51.16 		Subd. 7.Interest on penalties. A penalty imposed under this chapter bears interest 
51.17 	from the date payment was required to be paid, including any extensions,provided in 
51.18 	section 270C.40, subdivision 3, to the date of payment of the penalty.

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

51.20 	Sec. 4. Minnesota Statutes 2010, section 289A.55, subdivision 9, is amended to read:
51.21 		Subd. 9.Interest on penalties. (a) A penalty imposed under section 289A.60, 
51.22 	subdivision 1, 2, 2a, 4, 5, 6, or 21 bears interest from the date the return or payment 
51.23 	was required to be filed or paid, including any extensions provided in section 270C.40, 
51.24 	subdivision 3, to the date of payment of the penalty.
51.25 	(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 
51.26 	60 days from the date of notice. In that case interest is imposed from the date of notice 
51.27 	to the date of payment.

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

51.29 	Sec. 5. Minnesota Statutes 2010, section 289A.60, subdivision 4, is amended to read:
51.30 		Subd. 4.Substantial understatement of liability; penalty. (a) The commissioner 
51.31 	of revenue shall impose a penalty for substantial understatement of any tax payable to the 
51.32 	commissioner, except a tax imposed under chapter 297A.
52.1 	(b) There must be added to the tax an amount equal to 20 percent of the amount of any 
52.2 	underpayment attributable to the understatement. There is a substantial understatement of 
52.3 	tax for the period if the amount of the understatement for the period exceeds the greater of:
52.4 	(1) ten percent of the tax required to be shown on the return for the period; or
52.5 	(2)(i) $10,000 in the case of a mining company or a corporation, other than an S 
52.6 	corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or 
52.7 	section 298.01 or 298.015, or
52.8 	(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or 
52.9 	a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015.
52.10 	(c) For a corporation, other than an S corporation, there is also a substantial 
52.11 	understatement of tax for any taxable year if the amount of the understatement for the 
52.12 	taxable year exceeds the lesser of:
52.13 	(1) ten percent of the tax required to be shown on the return for the taxable year 
52.14 	(or, if greater, $10,000); or
52.15 	(2) $10,000,000.
52.16 	(d) The term "understatement" means the excess of the amount of the tax required 
52.17 	to be shown on the return for the period, over the amount of the tax imposed that is 
52.18 	shown on the return. The excess must be determined without regard to items to which 
52.19 	subdivision 27 applies. The amount of the understatement shall be reduced by that part of 
52.20 	the understatement that is attributable to the tax treatment of any item by the taxpayer if 
52.21 	(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to 
52.22 	which the relevant facts affecting the item's tax treatment are adequately disclosed in the 
52.23 	return or in a statement attached to the return and (ii) there is a reasonable basis for the tax 
52.24 	treatment of the item. The exception for substantial authority under clause (1) does not 
52.25 	apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the 
52.26 	Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment 
52.27 	of an item attributable to a multiple-party financing transaction if the treatment does not 
52.28 	clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B) 
52.29 	of the Internal Revenue Code. The special rules in cases involving tax shelters provided in 
52.30 	section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax 
52.31 	shelter the principal purpose of which is the avoidance or evasion of state taxes.
52.32 	(e) The commissioner may abate all or any part of the addition to the tax provided 
52.33 	by this section on a showing by the taxpayer that there was reasonable cause for the 
52.34 	understatement, or part of it, and that the taxpayer acted in good faith. The additional tax 
52.35 	and penalty shall bear interest at the rate as specified in section 270C.40from the time 
52.36 	the tax should have been paid until paid.

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

53.2 	Sec. 6. Minnesota Statutes 2010, section 296A.22, is amended to read:
53.3 	296A.22 NONPAYMENT OF TAX; CIVIL PENALTIES.
53.4 		Subdivision 1.Penalty for failure to pay tax, general rule. Upon the failure of 
53.5 	any person to pay any tax or fee when due, a penalty of one percent per day for the first 
53.6 	ten days of delinquency shall accrue, and thereafter the tax, fees, and penalty shall bear 
53.7 	interest at the rate specified in section 270C.40 until paid.
53.8 		Subd. 2.Collection authority. Upon such a failure to pay any tax or fees within the 
53.9 	time provided by this chapter, all taxes and fees imposed by this chapter shall become 
53.10 	immediately due and payable, and may be collected as provided in chapter 270C.
53.11 		Subd. 3.Operating without license. If any person operates as a distributor, special 
53.12 	fuel dealer, bulk purchaser, or motor carrier without first securing the license required 
53.13 	under this chapter, any tax or fee imposed by this chapter shall become immediately due 
53.14 	and payable. A penalty of 25 percent is imposed upon the tax and fee due. The tax, and
53.15 	fees, and penalty shall bear interest at the rate specified in section 270C.40. The penalty 
53.16 	imposed in this subdivision shall bear interest from the date provided in section 270C.40, 
53.17 	subdivision 3, to the date of payment of the penalty.
53.18 		Subd. 4.Unlawful use of dyed fuel. (a) If any dyed fuel is sold or held for sale by a 
53.19 	person for any use which the person knows or has reason to know is not a nontaxable use 
53.20 	of the fuel; or if any dyed fuel is held for use or used in a licensed motor vehicle or for any 
53.21 	other use by a person for a use other than a nontaxable use and the person knew, or had 
53.22 	reason to know, that the fuel was so dyed; or if a person willfully alters, or attempts to 
53.23 	alter, the strength or composition of any dye or marking in any dyed fuel, then the person 
53.24 	shall pay a penalty in addition to the tax, if any.
53.25 	(b) Except as provided in paragraph (c), the amount of penalty under paragraph (a) 
53.26 	for each act is the greater of $1,000, or $10 for each gallon of dyed fuel involved.
53.27 	(c) With regard to a multiple violation under paragraph (a), the penalty shall be 
53.28 	applied by increasing the amount in paragraph (b) by the product of (1) such amount, and 
53.29 	(2) the number of prior penalties, if any, imposed by this section on the person, or a related 
53.30 	person, or any predecessor of the person or related person.
53.31 	(d) If a penalty is imposed under this subdivision on a business entity, each officer, 
53.32 	employee, or agent of the entity who willfully participated in any act giving rise to the 
53.33 	penalty is jointly and severally liable with the entity for the penalty.
53.34 		Subd. 5.Receiver appointed. In the event a suit is instituted as provided in 
53.35 	subdivision 2, the court shall, upon application, appoint a receiver of the property and 
54.1 	business of the delinquent defendant for the purpose of impounding the same as security 
54.2 	for any judgment which has been or may be recovered.
54.3 		Subd. 6.Sale prohibited under certain conditions. No petroleum product shall 
54.4 	be unloaded or sold by any person or distributor whose tax and fees are the basis for 
54.5 	collection action under subdivision 2.
54.6 		Subd. 7.Payment of penalties. The penalties imposed by this section are collected 
54.7 	and paid in the same manner as taxes.
54.8 		Subd. 8.Penalties are additional. The civil penalties imposed by this section are in 
54.9 	addition to the criminal penalties imposed by this chapter.
54.10 		Subd. 9.Abatement of penalty. (a) The commissioner may by written order 
54.11 	abate any penalty imposed under this section, if in the commissioner's opinion there is 
54.12 	reasonable cause to do so.
54.13 	(b) A request for abatement of penalty must be filed with the commissioner within 
54.14 	60 days of the date the notice stating that a penalty has been imposed was mailed to 
54.15 	the taxpayer's last known address.
54.16 	(c) If the commissioner issues an order denying a request for abatement of penalty, 
54.17 	the taxpayer may file an administrative appeal as provided in section 270C.35 or appeal to 
54.18 	Tax Court as provided in section 271.06. If the commissioner does not issue an order on 
54.19 	the abatement request within 60 days from the date the request is received, the taxpayer 
54.20 	may appeal to Tax Court as provided in section 271.06.

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

54.22 	Sec. 7. Minnesota Statutes 2010, section 297E.14, subdivision 7, is amended to read:
54.23 		Subd. 7.Interest on penalties. (a) A penalty imposed under section 297E.12, 
54.24 	subdivision 1, 2, 3, 4, or 5, bears interest from the date the return or payment was required 
54.25 	to be filed or paid, including any extensions provided in section 270C.40, subdivision 3, to 
54.26 	the date of payment of the penalty.
54.27 	(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 
54.28 	ten days from the date of notice. In that case interest is imposed from the date of notice 
54.29 	to the date of payment.

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

54.31 	Sec. 8. Minnesota Statutes 2010, section 297F.09, subdivision 9, is amended to read:
54.32 		Subd. 9.Interest. The amount of tax not timely paid, together with any penalty 
54.33 	imposed in this section, bears interest at the rate specified in section 270C.40 from the 
55.1 	time such tax should have been paid until paid. The penalty imposed in this section bears 
55.2 	interest from the date provided in section 270C.40, subdivision 3, to the date of payment 
55.3 	of the penalty. Any interest and penalty is added to the tax and collected as a part of it.

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

55.5 	Sec. 9. Minnesota Statutes 2010, section 297F.18, subdivision 7, is amended to read:
55.6 		Subd. 7.Interest on penalties. (a) A penalty imposed under section 297F.19, 
55.7 	subdivisions 2 to 7, bears interest from the date the return or payment was required to be 
55.8 	filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the 
55.9 	date of payment of the penalty.
55.10 	(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 
55.11 	ten days from the date of the notice. In that case interest is imposed from the date of notice 
55.12 	to the date of payment.

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

55.14 	Sec. 10. Minnesota Statutes 2010, section 297G.09, subdivision 8, is amended to read:
55.15 		Subd. 8.Interest. The amount of tax not timely paid, together with any penalty 
55.16 	imposed by this chapter, bears interest at the rate specified in section 270C.40 from the 
55.17 	time the tax should have been paid until paid. Any penalty imposed by this chapter bears 
55.18 	interest from the date provided in section 270C.40, subdivision 3, to the date of payment 
55.19 	of the penalty. Any interest and penalty is added to the tax and collected as a part of it.

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

55.21 	Sec. 11. Minnesota Statutes 2010, section 297G.17, subdivision 7, is amended to read:
55.22 		Subd. 7.Interest on penalties. (a) A penalty imposed under section 297G.18, 
55.23 	subdivisions 2 to 7, bears interest from the date the return or payment was required to be 
55.24 	filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the 
55.25 	date of payment of the penalty.
55.26 	(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 
55.27 	ten days from the date of the notice. In that case interest is imposed from the date of notice 
55.28 	to the date of payment.

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

55.30 	Sec. 12. Minnesota Statutes 2010, section 297I.80, subdivision 1, is amended to read:
56.1 		Subdivision 1.Payable to commissioner. (a) When interest is required under this 
56.2 	section, interest is computed at the rate specified in section 270C.40.
56.3 	(b) If a tax or surcharge is not paid within the time named by law for payment, the 
56.4 	unpaid tax or surcharge bears interest from the date the tax or surcharge should have been 
56.5 	paid until the date the tax or surcharge is paid.
56.6 	(c) Whenever a taxpayer is liable for additional tax or surcharge because of a 
56.7 	redetermination by the commissioner or other reason, the additional tax or surcharge 
56.8 	bears interest from the time the tax or surcharge should have been paid until the date the 
56.9 	tax or surcharge is paid.
56.10 	(d) A penalty bears interest from the date the return or payment was required to be 
56.11 	filed or paid provided in section 270C.40, subdivision 3, to the date of payment of the 
56.12 	penalty.

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