Legislative Session number- 86

Bill Name: SF2074

2E Relating to taxation and the financing and operation of state and local
government; making policy, technical, administrative, enforcement, collection,
refund, and other changes to income, franchise, property, sales and use, motor
vehicle, estate, gambling, solid waste management, health care provider,
cigarette and tobacco products, insurance premiums, aggregate removal, mortgage,
deed, occupation, and production taxes, and other taxes and tax-related
provisions; conforming provisions to certain changes in federal laws

ARTICLE
1 - INDIVIDUAL INCOME, CORPORATE FRANCHISE, AND INSURANCE PREMIUM
TAXES

Providing and modifying income tax credits; providing a Minnesota
business investment company tax credit; modifying a certain prior provision
relating to additions to federal taxable income for individuals, trusts, and
estates, requiring taxpayers to add back any mortgage interest on a second
residence taken as an itemized deduction on the federal return; providing a
certain income tax subtraction for a shareholder of an S corporation or a
partner of a partnership; modifying certain provisions relating to individual
income tax nexus rules for a single member limited liability company (LLC),
individual income tax rates, and inflation adjustments langague; providing an
investment tax credit for qualified high technology, biotechnology, or medical
device or green manufacturing business; providing an historic structure
rehabilitation income tax credit; providing a film production investment credit;
modifying the alternative minimum tax rate for individuals, trusts, and estates;
providing a surtax on certain interest income derived from conduct of a trade of
business; clarifying the capital gain on the sale of a single member LLC;
modifying apportionment of net income; providing for a Minnesota business
investment company credit; repealing certain provisions relating to low income
motor fuels credit and the dedication of revenue from the motor vehicle lease
sales tax

ARTICLE 2 - FEDERAL UPDATE

Updating administrative tax
provisions and the federal definition of taxable income; conforming provisions
to certain changes in federal laws; providing for certain additions and
subtractions to federal taxable income (FTI) for individuals and corporations;
adopting federal changes to federal adjusted gross income (FAGI); conforming
changes to the calculation of the ratio used by nonresidents and part-year
residents to apportionment of state tax; providing for adjustments of
alternative minimum taxable income; updating certain property tax refund and
estate tax references

ARTICLE 3 - SALES AND EXCISE TAXES

Modifying and
authorizing certain sales tax exemptions and modifying and authorizing certain
local governmental sales taxes; modifying the fee exemption for certain
short-term motor vehicle rentals; defining solicitor; modifying certain upfront
sales tax exemption requirements for capital equipment; providing a construction
materials sales tax exemption for a certain meat processing facility; modifying
the imposition and refund application of sales tax on capital equipment;
modifying certain provisions relating to the Minneapolis downtown taxing area,
the Mankato local sales tax revenue use requirements, the St. Paul local sales
tax revenue use requirements, and unexpended funds, interest, and requirements
for the neighborhood STAR program, providing for a Rochester lodging tax
increase, modifying Owatonna local sales tax revenue use requirements, the
Mankato local restaurant and entertainment taxes use requirements, the Cook
county local sales tax revenue use requirements and increasing bond limits, and
authorizing the imposition of an additional Rochester food and beverage
tax

ARTICLE 4 - PROPERTY TAXES

Relating to property taxes; modifying truth
in taxation procedures; allowing school districts with interdistrict cooperative
agreement career and technical programs to allocate the levy for the program
among the participating districts; modifying referendum market value exclusions
for seasonal recreational property, clarify the effective date for school levies
for retired employee health benefits; modifying certain duties of the emergency
medical services taxing district board; clarifying the property tax exemption
for certain institutions of public charity currently exempt from federal income
taxation; changing and providing certain property tax exemptions for utility
pollution control, apprenticeship training facilities, electric generation
personal property, apprenticeship training facilities, phaseout of exemptions
for electric generation personal property, elderly living facilities exemption,
nursing home property, railroad wye connection, and leased seasonal recreational
land; modifying bovine tuberculosis credit definitions and calculation
requirements; increasing the property tax class rate on public utility
properties; providing for classification of certain seasonal recreational
commercial property and eliminating certain seasonal recreational property levy
limits; eliminating certain truth in taxation hearing requirements and
temporarily suspending advertising requirements for proposed property taxes;
increasing the property tax amount for unpaid real estate taxes installment
payments; modifying publication correction requirements; allowing airport
authorities to exercise the municipal power of airport zoning; extending the
deadline for the establishment of special service districts and housing
improvement areas without requiring a special law and specifying certain
prerequisites for housing improvement areas; expanding county special
assessments authority for the the abatement of nuisances; authorizing the seaway
port authority of Duluth to establish a property tax levy to replace the
mandatory city property tax levy; defining implicit price deflator; modifying
certain provisions relating to the fiscal disparities programs within the
seven-county metropolitan area, eliminating the one-year lag in determining
fiscal disparities contribution net tax capacities and distribution levies;
authorizing local governments to sell emergency certificates of indebtedness
under budget (revenue) shortfall conditions, specifying levy restrictions,
defining local government to include counties, cities, or towns and defining
receipts; authorizing certain meeting authority for the Red River watershed
management board; removing the sunset date for emergency medical services
special taxing districts; clarifying the platted lands law effective date;
specifying certain conservation management plans requirements for the rural
preserve property tax program; authorizing the city of Cloquet and Perch Lake
township to establish the Cloquet area fire and ambulance taxing district for
cooperative fire and ambulance services, establishing a board and a property
tax; requiring the commissioners of revenue and agriculture to study and report
on the property tax treatment of horse breeding and horse boarding properties;
providing for abatements for businesses with disrupted access; modifying certain
duties relating to areawide tax rate determinations by county auditors and
requiring report to the legislature by the administrative auditor; providing a
public charity purpose statement; repealing certain provisions relating to truth
in taxation requirements, levy limits applicable to certain county governments
and cities, and the allocation of the statewide general levy between seasonal
recreational and commercial industrial properties

ARTICLE 5 - AIDS AND
CREDITS

Modifying market value credit reductions; eliminating the targeted
property tax refund; providing city aid base adjustments for certain cities;
providing county program aid reductions; providing local government aid
reductions; requiring the commissioner of revenue to compute 2010, 2011, and
2012 city and county aid reductions, defining the levy plus aid revenue base;
repealing certain provisions relating to the targeted refund and utility
transition aid

ARTICLE 6 - LOCAL DEVELOPMENT

Prohibiting new municipal
incorporations; defining special services for a special service district for
cities that includes a portion of the central corridor light rail transit
project; modifying tax increment financing (TIF) district standards, modifying
TIF plan content requirements and certain annual financial reporting
requirements; establishing compact development districts as a type of TIF
district, specifying conditions for establishment and tax increments payment
uses, specifying duration limits; specifying certain limitations on
administrative expenses; authorizing expenditure of tax increments from
districts located within transit improvement areas outside of the district;
extending tax increment financing (TIF) tourism facility property development
region eligibility to Pine, Mille Lacs, Kanabec, Isanti and Chisago counties;
extending the five-year rule for certain redevelopment, renewal or renovation
districts after the certification of the district under certain conditions;
eliminating additional JOBZ designations after a certain date; authorizing the
city of Brooklyn Park to establish housing replacement TIF projects; modifying
the availability of the public financing for public improvements at the Mall of
America, authorizing the sale of revenue bonds to pay for public improvements
not related to parking, and imposing a labor peace agreement requirement as a
condition of providing financing; modifying the description of a TIF area in the
city of Oakdale; authorizing the cities of Chisago City and Lindstrom and
Chisago county to enter into a joint powers agreement to develop a business
park; authorizing the city of Mankato to expend increments from a certain TIF
district and specifying project requirements; authorizing the city of North
Mankato to expand the boundaries of an existing TIF district to include
specified property; authorizing a duration extension for a TIF district in the
city of St. Louis Park; authorizing the St. Paul housing and redevelopment
authority to establish the central corridor light rail transit project area as a
redevelopment project; authorizing the cities of St. Paul and Fridley to operate
under a certain law granting housing improvement districts authority;
authorizing certain existing TIF districts in the city of St. Paul to be allowed
to expend money for central corridor costs; authorizing a certain TIF authority
for the city of Sauk Rapids and specifying conditions; authorizing the South St.
Paul housing and redevelopment authority to establish a redevelopment TIF
district; appropriating money from the Minnesota investment fund to commissioner
of employment and economic development (DEED) for a loan to an aircraft
manufacturing and assembly company to establish an aircraft completion center at
the Minneapolis-St. Paul international airport; authorizing the Mountain Iron
economic development authority and the Winona county economic development
authority to form or become a member of a limited liability company (LLC) for
developing a community-based wind energy project; authorizing the Seaway port
authority of Duluth to create TIF district consisting of one or more certain
parcels of land exempt from the five-year rule; repealing certain provisions
relating to expenditure limitations from a certain Bloomington TIF district and
a certain review requirement relating to Mall of America financing
information

ARTICLE 7 - PUBLIC FINANCE

Providing for the issuance of state
general obligation bonds as tax credit bonds, interest subsidy bonds, or a
combination of the two; extending the sunset for the authority to issue bonds by
the state fair board; specifying certain pledge of school district or
intermediate school districts full faith and credit requirements relating to
federal interest subsidy payments; modifying certain mail elections
requirements; modifying terms and conditions relating to issuance of obligations
and financing of public improvements; modifying local government unit bond
issuance requirements for airport projects; modifying certain town board
certificates of indebtedness payment requirements; extending the maximum
maturity of certificates of indebtedness issued by towns; modifying certain
public safety radio system bond issuance requirements; specifying certain
federal interest subsidy payment requirements; modifying certain county and
multicounty housing and redevelopment authority; modifying certain bidding,
payment, and performance bond requirements for housing and redevelopment
authorities (HRAs); modifying certain HRA project regulations, expanding the
definition of project in the municipal industrial development law; expanding the
leasing authority to nonprofit for cities operating a program of public
recreation and playgrounds; modifying the definitions of annual volume cap and
manufacturing project in the bond allocation law; defining rating category for
escrow account securities purposes; extending the maturity date of bond issued
by St. Paul for public buildings or parking structure; providing the St. Paul
port authority application fee credit toward a future bond sale for District
Cooling St. Paul, Inc.

ARTICLE 8 - MINERALS

Modifying certain provisions
governing the taconite tax and the distribution of revenues from the tax;
specifying certain 2009 occupation tax proceeds collection requirements;
extending the authorization for taconite economic development fund use of the
production tax for a biomass energy facility; clarifying certain taconite and
iron sulphides production tax rate application requirements; providing certain
fund transfers for school distribution purposes if insufficient production tax
proceeds; applying the definition of taconite assistance area for distribution
of taconite municipal aid account purposes; specifying fund retention
requirements for Breitung township; providing grants or loans for a certain
green manufacturing facility located within the taconite tax relief area,
appropriating money from the Douglas J. Johnson economic protection trust fund
upon approval of the Iron Range resources and rehabilitation board
(LRRRB)

ARTICLE 9 - DEPARTMENT INDIVIDUAL INCOME, CORPORATE FRANCHISE, AND
ESTATE TAXES

Modifying corporate franchise filing requiring requirements for
members of a unitary business; specifying certain filing requirements for
information returns for qualified intermediaries; modifying the time limit for
filing estate tax returns; modifying the treatment of federal tax changes for
assessment of taxes; providing penalties for failure to withhold tax from the
wages of an employee or from pay to independent contractors in the construction
trades; clarifying a K-12 education income tax subtraction for certain vehicle
expenses of a qualifying child; modifying income credit allowances for the
Minnesota working family credit; clarifying certain property tax statement
confession of judgments for manufactured homes; repealing a certain rule
relating to school tuition and transportation

ARTICLE 10 - DEPARTMENT SALES
AND USE TAXES

Modifying the sales tax exemption for sales to local government
units and
nonprofit groups to exclude alcohol; providing the definition of
motor vehicle for purposes of the metropolitan transit improvement tax and the
greater Minnesota transportation tax; repealing a certain provision relating to
constitutional prohibitions for general exemptions

ARTICLE 11 - DEPARTMENT
SPECIAL TAXES

Updating the property tax classification provision for
agricultural property; modifying mortgage registry tax exemptions and certain
payment of tax requirements; clarifying the deed tax transfer on death
provision; clarifying certain gross receipt transfer of accounts receivable
requirements for surgical centers and wholesale drug distributors; including
surgical centers for exemptions for amounts paid for legend drugs; clarifying
gasoline tax filing provisions; modifying certain gambling tax provisions,
specifying certain gambling organization signature requirements for tax returns
and providing for filing date provisions; modifying certain electronic payment
filing requirements relating to liabilities for pull-tab and tipboard
distributors, tobacco products distributors, liquor distributors, insurance
companies, and the metropolitan solid waste landfill fee; modifying certain
taconite tax allocation requirements for school districts; modifying
metropolitan solid waste landfill fee payment requirements; repealing certain
provisions relating to mortgage registry tax stamps and the division and
distribution of mineral tax proceeds

ARTICLE 12 - DEPARTMENT PROPERTY TAXES
AND AIDS

Modifying the agricultural homestead property tax first tier
valuation limit; indexing low value for nonproductive land (green acres),
clarifying real estate value determinations for tax deferment purposes;
modifying the aggregate resource preservation property tax act; modifying
requirements for disaster related abatements and credits for damaged properties;
providing for inclusion of cooperative associations; modifying certain homestead
application requirements; clarifying property requirements for homestead
classification of trust held property; modifying the class 2c managed forest
land provision and clarifying rules; modifying and clarifying class 4c property
application requirements; clarifying classification of unimproved real property;
modifying the date requirement for personal property assessment certification of
pipeline utility property and transmission line property by the commissioner of
revenue; modifying certain provisions of county boards of appeal and
equalization; conforming certain calculation of annual average market value of
class 2c managed forest land requirements and modifying incentive payment
calculations under the sustainable forest incentive act; modifying certain local
government aid (LGA) provisions, modifying the city revenue need formula;
repealing certain rules

ARTICLE 13 - DEPARTMENT CONDITIONAL USE
DEEDS

Modifying the process for land classification and reclassification as
conservation and nonconservation tax-forfeited lands, specifying certain duties
of the county board; providing for conveyances to public entities under certain
conditions; modifying deed of conveyance form requirements; modifying
regulations for conveyance of tax-forfeited land to a governmental subdivision
and the reverter for failure to use provision; imposing conditional use deed
fees on applications; modifying county board supervision duties for conservation
lands; modifying certain tax-forfeited conservation and nonconservation land
sale and method requirements; repealing certain provisions relating to
conveyance of targeted neighborhood lands and certain sale ratification
provisions

ARTICLE 14 - DEPARTMENT MISCELLANEOUS

Regulating tax preparers;
adding harassment of a department of revenue employee to incidents warranting
the disclosure of tax data to law enforcement authorities; modifying duties of
the commissioner of revenue relating to publishing of tax preparers lists,
modifying penalty and interest assessments procedures for personal liability;
clarifying certain suspension of time requirements for tax assessment or
collection bankruptcy proceedings

ARTICLE 15 - MISCELLANEOUS

Modifying
certain tax preparation services provisions; providing a procedure for filing
claims for refunds of payments imposing personal liability on responsible
officers and directors for unpaid taxes of a business entity; modifying mortgage
registry tax payments requirements; clarifying estate tax nexus to impose tax on
pass-through interests of nonresident decedents; modifying hospital and surgical
center taxes under the MinnesotaCare program; modifying certain regulations for
gambling tax reports and records, specifying certain audit, certified inventory
and cash count requirements, and requiring the development of reporting
standards by the commissioner of revenue; exempting service charges or fees
imposed by certain home rule charter cities from the solid waste management tax;
increasing certain charitable organization revenue amounts requiring an audit
and specifying certain gambling tax compliance requirements; clarifying certain
local police and firefighters relief association amortization state aid
distribution requirements and appropriating money; providing for a contingency
appropriation to the commissioner of management and budget for certain economic
development purposes
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