HF 2407

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/25/2021 02:09pm

A bill for an act
relating to energy; providing for a revenue-neutral assessment on environmental
emissions; providing for refundable FICA and property tax credits; providing for
credits against income taxes to be paid as dividends; authorizing loans for energy
efficiency and renewable energy projects; providing rulemaking authority; requiring
reports; appropriating money; amending Minnesota Statutes 2020, sections
273.1392; 273.1393; 275.065, subdivision 3; 276.04, subdivision 2; proposing
coding for new law in Minnesota Statutes, chapters 273; 290; proposing coding
for new law as Minnesota Statutes, chapter 216I.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. CITATION.

This act may be cited as the "Carbon Assessment and Dividend Act" or "CADA."

Sec. 2.

[216I.01] DEFINITIONS.

Subdivision 1.

Scope.

The definitions in this section apply to this chapter.

Subd. 2.

Coal.

"Coal" means bituminous coal, subbituminous coal, lignite, and coke.

Subd. 3.

Commissioner.

"Commissioner" means the commissioner of revenue.

Subd. 4.

Importer.

"Importer" means the entity that receives assessed fuels liable for
assessment under this chapter.

Subd. 5.

Liquid fuels.

"Liquid fuels" means gasoline, liquefied petroleum gas, aviation
gasoline, fuel oil and kerosene, diesel fuel, methanol from nonplant sources, biofuel, and
kerosene.

Subd. 6.

Natural gas.

"Natural gas" means a naturally occurring mixture of hydrocarbons
and nonhydrocarbon gases found in porous geologic formations beneath the earth's surface,
the principal constituent of which is methane.

Subd. 7.

Primary carbon-based fuels.

"Primary carbon-based fuels" means coal, mixed
municipal solid waste and refuse-derived fuel, natural gas, and liquid fuels.

Subd. 8.

Program year.

"Program year" means January 1 through December 31.

EFFECTIVE DATE.

This section is effective the day following final enactment for
assessments beginning on January 1, 2022, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.

Sec. 3.

[216I.02] ENVIRONMENTAL EMISSIONS ASSESSMENT.

Subdivision 1.

Assessed fuels.

(a) The use of primary carbon-based fuels and the use
of fuels to generate electricity to provide for in-state energy consumption are subject to an
environmental emissions assessment under this section.

(b) Use of the following are not subject to the assessment under this chapter: ethanol;
biofuel; methanol from plant materials, wood, wood wastes, agricultural crops, crop residues,
sludge, solvents, waste oil, hazardous waste, or medical waste; and hydro-electricity.

(c) The assessment does not apply to the use of liquid fuel as a lubricant or physical
component of a manufactured product.

Subd. 2.

Amount of assessment.

(a) The environmental emissions assessment applies
based on the amount of carbon dioxide emitted from the burning of fuel. The amount of
carbon dioxide emitted must be calculated by determining the estimated amount of carbon
dioxide emitted from the burning of fuel according to fuel type or subtype as provided in
subdivision 3.

(b) The assessment in the first program year, beginning January 1, 2022, is $50 per ton
of carbon dioxide emitted from the burning of each assessed fuel. The assessment increases
each succeeding program year by $5 per ton of carbon dioxide emitted, until the assessment
equals a maximum amount of $200 per ton of carbon emitted.

Subd. 3.

Calculation of assessment; special rules.

(a) In consultation with the
commissioner of the Pollution Control Agency, the commissioner must:

(1) estimate the average amount of carbon dioxide emitted by burning a unit of each
assessed fuel;

(2) multiply the amount in clause (1) by the number of units of the assessed fuel at the
point of assessment to determine the number of tons of carbon dioxide that would be emitted
by the burning of those units; and

(3) multiply the result of clause (2) by the applicable rate per ton of carbon dioxide
emitted specified under subdivision 2.

(b) For electricity generated in another state and imported under contract by a utility for
consumption in Minnesota, the commissioner must estimate the amount of carbon dioxide
emitted in paragraph (a), clause (1), based on the proportions of the mix of assessed fuels
used to generate the electricity purchased under the contract.

(c) For electricity generated in another state and purchased by a utility in the wholesale
electricity markets operated by the Midcontinent Independent System Operator for
consumption in Minnesota, the commissioner must estimate the amount in paragraph (a),
clause (1), based on the average proportion of the mix of assessed fuels used to generate
electricity by all generators who are members of the Midcontinent Independent System
Operator.

(d) For a blend of assessed and nonassessed fuels produced or blended in another state
for use in this state, the commissioner must calculate the assessment based on the volume
of the assessed fuel in the blended fuel.

Subd. 4.

Assessment procedure.

(a) For an assessed fuel produced in another state and
used in this state, the assessment under this section applies to the first receipt of the assessed
fuel in this state. The importer in this state who first receives the assessed fuel is liable for
the assessment. An importer who receives an assessed fuel has the burden of proving to the
satisfaction of the commissioner that the assessed fuel was not received for use in Minnesota.

(b) For an assessed fuel produced in this state, the assessment under this section applies
at the point of production. The producer who produces the assessed fuel is liable for the
assessment.

(c) An assessment under this section is prohibited if and to the extent that the assessment
is duplicative of a charge made by federal law or regulation or a multistate agreement to
which Minnesota is a signatory.

(d) If an assessed fuel is produced in or transported to Minnesota from another state that
assesses the fuel based on the amount of carbon dioxide emitted when the fuel is used, a
credit against the assessment authorized under this section is allowed in the amount of the
assessment paid to the state where the fuel is produced.

(e) The commissioner must not assess a unit of fuel more than once under this section.

Subd. 5.

Data provision.

Upon request of the commissioner, a person must provide to
the commissioner information the commissioner determines is necessary to accurately make
the assessment required under this section.

Subd. 6.

Technical assistance.

Upon request of the commissioners of revenue and the
Pollution Control Agency, an agency as defined in section 14.02 must provide technical
assistance to the commissioners to facilitate the administration of this section.

EFFECTIVE DATE.

This section is effective the day following final enactment for
assessments beginning on January 1, 2022, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.

Sec. 4.

[216I.03] ACCOUNT ESTABLISHED; EXPENDITURES.

Subdivision 1.

Account established.

(a) A carbon assessment dividend account is
established as a separate account in the special revenue fund in the state treasury. The
account must be administered by the commissioner as provided under this chapter and
sections 273.1388, 290.0693, and 290.98.

(b) The commissioner must deposit all assessments collected under section 216I.02 into
the account established under this subdivision.

Subd. 2.

Allowable expenditures.

Amounts in the carbon assessment dividend account
are appropriated as provided in:

(1) section 216I.04 to pay refunds;

(2) section 216I.07 to make loans to businesses for energy efficiency or renewable energy
projects;

(3) section 273.1388 to pay for the cover and tillage credit;

(4) section 290.0693 to pay dividends; and

(5) section 290.98 to pay rebates.

Subd. 3.

Allocation of assessment revenues.

(a) Revenue from the carbon assessment
dividend account must be used as provided by this section. By August 1 of each year, the
commissioner of the Pollution Control Agency shall estimate:

(1) the amount of revenues to be collected in the next calendar year from the assessment,
less:

(i) in fiscal year 2023 only, $50,000,000 to be appropriated to the commissioner of
commerce for deposit in the revolving loan account established under section 216I.07, to
make loans to businesses for energy efficiency or renewable energy projects; and

(ii) the refund under section 216I.04; and

(2) the respective proportions of the assessments that are attributable to energy usage
by individuals and households and by business firms.

(b) Amounts in the account, less the appropriation and refund amounts determined under
paragraph (a), must be divided in proportion to the shares determined under paragraph (a),
clause (2), and appropriated as follows:

(1) of the amount attributable to energy usage by individuals and households, ... percent
must be used to pay a dividend as provided by section 290.0693, and ... percent must be
used to pay for the property tax credit under section 273.1388; and

(2) the amount attributable to energy usage by business firms must be used for a
refundable payroll tax rebate as provided in section 290.98.

EFFECTIVE DATE.

This section is effective the day following final enactment for
assessments beginning on January 1, 2022, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.

Sec. 5.

[216I.04] REFUNDS.

Subdivision 1.

Definitions.

(a) For the purposes of this section, the following terms have
the meanings given.

(b) "Assessment adjustment factor" means the percentage of the annual average increase
in the retail cost of each energy source that is due to the assessment on an assessed fuel used
to produce that energy source as determined by the commissioner of commerce.

(c) "Energy project" means:

(1) an energy conservation improvement, as defined in section 216B.241, subdivision
1;

(2) the installation of a renewable energy system on or adjacent to a place of business;
or

(3) a combination of clauses (1) and (2).

(d) "Energy source" means any source of energy that is produced using an assessed fuel.

(e) "Qualifying sales" means a person's total annual sales wherever made in connection
with the person's employment or business conducted in this state, as determined under
section 290.191.

(f) "Renewable energy" has the meaning given in section 216C.435, subdivision 9.

(g) "Total energy costs for each energy source" means the total annual cost to a business
firm to purchase an energy source that is used in a trade or business, excluding any energy
source that is sold.

Subd. 2.

Determination of aggregate increased energy cost.

(a) For purposes of
calculating the refund in subdivision 3, the commissioner of commerce must determine a
business firm's aggregate increased energy cost under this subdivision. The aggregate
increased energy cost equals the sum of the total increased energy costs for each energy
source as determined in paragraph (b).

(b) The total increased energy costs for each energy source are calculated by multiplying:

(1) the total energy costs for each energy source; by

(2) the assessment adjustment factor of each energy source.

Subd. 3.

High impact refund.

(a) A business firm who is not a utility, importer, or
producer of assessed fuels is allowed a refund equal to the product of:

(1) the amount of the business firm's aggregate increased energy cost minus three percent
of the taxpayer's qualifying sales; and

(2) 75 percent.

(b) The amount of a refund paid to an importer or producer under paragraph (a) for a
taxable year must not exceed the annual cost to the importer or producer of implementing
the required energy project in subdivision 4.

Subd. 4.

Energy project.

(a) A person is allowed a refund under this section only if the
person implements an energy project that has been approved by the commissioner of
commerce. An applicant for a refund must submit a proposed energy project to the
commissioner of commerce that contains the following information:

(1) a description of the energy project, including existing equipment, operating
characteristics, energy sources, and other elements that the energy project is designed to
modify or replace;

(2) a budget for the energy project;

(3) annual and cumulative energy and monetary savings projected to result from
implementation of the energy project and calculations demonstrating that the energy project
will have a payback period of less than ten years;

(4) the current level of carbon dioxide emissions at the facility where the energy project
is to be implemented and the estimated amount of carbon dioxide emissions after the project
is implemented; and

(5) information demonstrating the ability of the person to repay any loan received under
section 216I.07 to finance or partially finance the energy project.

(b) The commissioner of commerce may not approve an energy project that does not
reduce the amount of carbon dioxide emissions from the facility implementing the energy
project by less than ... percent from the current amount of emissions.

(c) An applicant for a refund must provide evidence to the commissioner of commerce
demonstrating that the energy project has been implemented. If a determination is made
that the person qualifies for a refund under this section, the commissioner of commerce
shall notify the person and the commissioner in writing within 15 days of the determination.

(d) A person may apply for and receive a refund annually under this section for five
years following the first issuance of the notice under paragraph (c).

Subd. 5.

Liquid fuel used as lubricant or physical component.

A person who uses
liquid fuel that is exempt from the assessment under section 216I.02, subdivision 1, paragraph
(c), may apply for a refund of any assessment paid on the fuel.

Subd. 6.

Application.

A person may apply for a refund under this section. The
commissioner of commerce must prescribe the form of the application. An application for
refund must be filed at the same time as the return under section 216I.05. Claims for a refund
are subject to section 289A.40.

Subd. 7.

Appropriation.

An amount as determined under section 216I.03, subdivision
3, is appropriated to the commissioner of commerce from the carbon assessment and dividend
account to pay refunds under this section.

EFFECTIVE DATE.

This section is effective the day following final enactment for
assessments beginning on January 1, 2022, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.

Sec. 6.

[216I.05] ADMINISTRATION AND ENFORCEMENT.

Subdivision 1.

Annual returns.

A person required to pay the assessment under section
216I.02 must file a return relating to the assessment due for the preceding calendar year
with the commissioner by April 15 each year on a form prescribed by the commissioner.
Payment of the assessment to the extent not paid in full under subdivision 2 must be submitted
with the return.

Subd. 2.

Declaration of estimated assessment.

A person required to pay the assessment
under section 216I.02 must make a declaration of the amount of estimated assessment due
for the calendar year if the person reasonably expects the amount of estimated assessment
to be in excess of $1,000. The amount of estimated assessment with respect to which a
declaration is required must be paid in four equal installments on or before the 15th day of
March, June, September, and December. An amendment of a declaration may be filed
between installment dates but only one amendment may be filed in each interval. If an
amendment of a declaration is filed, the amount of each remaining installment must be
determined in a manner established by rule. The commissioner may grant a reasonable
extension of time of up to six months for filing a declaration.

Subd. 3.

Failure to pay estimated assessment.

Section 289A.25, subdivision 3, applies
to failure of a person to pay an estimated assessment due under this chapter.

Subd. 4.

Refunds.

Section 289A.50 applies to the refunds claimed and made under this
chapter. Refunds of overpayments of an estimated assessment must be made as provided
in section 289A.56, subdivision 2.

Subd. 5.

Exchange of information.

Notwithstanding sections 13.68 and 116.075, the
commissioner of the Pollution Control Agency may provide the commissioner with
information necessary for the enforcement of this chapter. Section 13.03, subdivision 4,
paragraph (c), applies to data shared under this subdivision. Information obtained in the
course of an audit of an importer, producer, or recipient of a dividend or rebate by the
commissioner is nonpublic data or private data on individuals to the extent it is not directly
divulged in a return.

Subd. 6.

Duties of the commissioner.

The commissioner of the Pollution Control Agency
shall provide to the commissioner the names and addresses of all persons subject to
assessments under this chapter, together with any information concerning the amount to be
assessed. Upon request by the commissioner, the commissioner of the Pollution Control
Agency shall examine returns and reports filed with the commissioner and notify the
commissioner of any suspected inaccurate or fraudulent declaration or return. The
commissioner of the Pollution Control Agency may assist in auditing a person subject to
the assessment under this chapter when requested by the commissioner.

Subd. 7.

Rules.

In consultation with the commissioners of commerce and the Pollution
Control Agency, the commissioner may adopt rules under chapter 14 necessary to administer
this chapter.

Subd. 8.

Enforcement.

The following audit, penalty, and enforcement provisions apply
to assessments under this chapter: sections 270B.18, subdivision 4; 270C.35; 289A.35;
289A.37; 289A.38, subdivisions 1, 2, 5, and 6; 289A.40, subdivision 1; 289A.41; 289A.42,
subdivision 1; 289A.55; 289A.60, subdivisions 1 to 10, 13, 18, and 19; and 289A.63,
subdivisions 1, 2, and 8 to 10.

EFFECTIVE DATE.

This section is effective the day following final enactment for
assessments beginning on January 1, 2022, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.

Sec. 7.

[216I.06] ADMINISTRATION OF DIVIDEND AND REBATE.

The commissioner may provide for any requirement necessary to administer this chapter,
including the time and manner for filing returns. All provisions not inconsistent with this
chapter relating to collection, audit, assessment, refunds, penalty, interest, enforcement,
collection remedies, appeal, and administration under chapters 270C and 289A apply to
this chapter.

EFFECTIVE DATE.

This section is effective the day following final enactment for
assessments beginning on January 1, 2022, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.

Sec. 8.

[216I.07] ENERGY REVOLVING LOAN FUND.

Subdivision 1.

Establishment of program.

The commissioner of commerce shall
establish an energy revolving loan program to make low-interest loans to businesses that
implement energy efficiency or renewable energy projects.

Subd. 2.

Account established; appropriation.

An energy revolving loan account is
established as a separate account in the special revenue fund. This account is a revolving
fund for the loan program under this section. All repayment of loans, loan fees, investment
earnings, and other income of the program are credited to the account. Upon termination
of the program under this section, any money in the loan account cancels to the energy and
conservation account established in section 216B.241, subdivision 2a. Amounts in the energy
revolving loan account are appropriated to the commissioner of commerce to carry out this
section, including reimbursement of administrative costs.

Subd. 3.

Use of loan proceeds.

The commissioner of commerce may provide loans to
borrowers from amounts in the energy revolving loan fund. Borrowers must use loans to
pay for the purchase and installation of capital improvements to improve energy efficiency
or to access renewable energy sources in order to qualify for a refund under section 216I.04.

Subd. 4.

Underwriting standards.

The commissioner of commerce may establish
application forms, application procedures, underwriting standards, and other rules for
processing and originating loans under this program.

Subd. 5.

Loan terms.

(a) The commissioner of commerce shall specify the provisions
governing the loans, including whether they are secured or unsecured, the terms, principal
repayment schedules, and any other provisions the commissioner of commerce deems
appropriate.

(b) The commissioner of commerce may set and require that an application fee be paid
by applicants for loans under the program.

(c) The loans must bear interest at no less than the interest rate on the most recent sale
of Minnesota general obligation tax exempt state various purpose bonds at the time the loan
is made. Higher interest rates may be charged, based on the security of the loans.

Subd. 6.

Rulemaking.

The commissioner of commerce may adopt administrative rules
under chapter 14 necessary to implement the provisions of this section.

Subd. 7.

Expiration.

The authority to make loans under this section expires December
31, 2032.

EFFECTIVE DATE.

This section is effective July 1, 2022.

Sec. 9.

[216I.08] REPORTS.

By September 1 each year, beginning in 2024, the commissioner must, in consultation
with the commissioners of commerce and the Pollution Control Agency, submit a written
report to the chairs and ranking minority members of the legislative committees with primary
jurisdiction over environment policy and finance and energy policy and finance. The report
must contain the following information:

(1) the total amount of assessments collected annually under section 216I.02;

(2) the total number of refunds awarded annually under section 216I.04;

(3) the total number of carbon assessment dividends paid annually under section 290.0693
and the average amount of an individual dividend;

(4) the total number of payroll tax rebates paid annually under section 290.98 and the
average amount of a rebate;

(5) the total number of property tax credits awarded annually under section 273.1388;

(6) the annual total amount of carbon dioxide emissions;

(7) an analysis regarding (i) the success of efforts to identify and provide rebates and
dividends to nonfilers under chapter 290, including recommendations regarding how
additional nonfilers may be identified, and (ii) the feasibility and efficacy of providing
rebate and dividend application forms that eligible individuals can file with the Department
of Revenue;

(8) recommendations regarding the exemption of specific economic sectors that suffer
significant negative impacts as a result of the assessments imposed under section 216I.02;

(9) recommendations regarding the need to adjust the assessment level in order to meet
state or federal greenhouse gas emissions reduction goals;

(10) recommendations regarding additional fuels or gaseous emissions not subject to
assessments under section 216I.02 that may be candidates for future assessment; and

(11) any additional information the commissioners deem relevant.

EFFECTIVE DATE.

This section is effective July 1, 2022.

Sec. 10.

[273.1388] COVER AND TILLAGE AGRICULTURAL CREDIT.

Subdivision 1.

Eligibility.

A qualifying property is eligible to receive a credit under this
section. A qualifying property must be certified by the local soil and water conservation
district. The certification is effective until the local soil and water conservation district
notifies the county assessor that the property no longer qualifies.

Subd. 2.

Definitions.

(a) For the purposes of this section, the following terms have the
meanings given.

(b) "Qualifying acre" means an acre of land on qualifying property on which the practice
of no-till tillage, strip-till tillage, reduced tillage, or the planting of cover crop is used.

(c) "Qualifying property" means class 2a and 2b property under section 273.13,
subdivision 23, other than property consisting of the house, garage, and immediately
surrounding one acre of land of an agricultural homestead, and on which the practice of
no-till tillage, strip-till tillage, reduced tillage, or the planting of cover crop is used.

Subd. 3.

Credit amount.

For each qualifying property, the credit is equal to the amount
available for this credit under section 216I.03, subdivision 3, paragraph (b), clause (1),
multiplied by the ratio of (1) the number of qualifying acres on the property to (2) the total
number of acres that qualify for the credit statewide.

Subd. 4.

Credit reimbursement.

The county auditor shall determine the credit allowed
under this section within the county for each taxes payable year and shall certify that amount
to the commissioner of revenue as part of the data required under section 270C.85,
subdivision 2. Any prior-year adjustments must be certified as part of the data required
under section 270C.85, subdivision 2. The commissioner shall review the certifications for
accuracy and may make such changes as are deemed necessary or return the certification
to the county auditor for correction. The credit under this section must be used to reduce
the net tax capacity-based property tax payable to each local taxing jurisdiction as provided
in section 273.1393.

Subd. 5.

Payment.

(a) The commissioner of revenue shall reimburse each local taxing
jurisdiction, other than school districts, for the tax reductions granted under this section in
two equal installments on October 31 and December 26 of the taxes payable year for which
the reductions are granted, including in each payment the prior year adjustments certified
under section 270C.85, subdivision 2, for that taxes payable year.

(b) The commissioner of revenue shall certify the total of the tax reductions granted
under this section for each taxes payable year within each school district to the commissioner
of education and the commissioner of education must pay the reimbursement amounts to
each school district as provided in section 273.1392.

Subd. 6.

Appropriation.

An amount as determined under section 216I.04, subdivision
3, to make the payments required by this section to taxing jurisdictions other than school
districts is annually appropriated from the carbon assessment and dividend account to the
commissioner of revenue. An amount as determined under section 216I.04, subdivision 3,
to make the payments required by this section to school districts is annually appropriated
from the carbon assessment and dividend account to the commissioner of education.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2023.

Sec. 11.

Minnesota Statutes 2020, section 273.1392, is amended to read:

273.1392 PAYMENT; SCHOOL DISTRICTS.

The amounts of bovine tuberculosis credit reimbursements under section 273.113;
conservation tax credits under section 273.119; disaster or emergency reimbursement under
sections 273.1231 to 273.1235; agricultural credits under sections 273.1384 and, 273.1387,
and 273.1388; aids and credits under section 273.1398; enterprise zone property credit
payments under section 469.171; and metropolitan agricultural preserve reduction under
section 473H.10 for school districts, shall be certified to the Department of Education by
the Department of Revenue. The amounts so certified shall be paid according to section
127A.45, subdivisions 9, 10, and 13.

EFFECTIVE DATE.

This section is effective beginning with fiscal year 2024.

Sec. 12.

Minnesota Statutes 2020, section 273.1393, is amended to read:

273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are determined
by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

(7) the school bond credit as provided in section 273.1387;

(8) agricultural credit as provided in section 273.1384;

(9) the cover and tillage agricultural credit as provided in section 273.1388;

(10) taconite homestead credit as provided in section 273.135;

(10) (11) supplemental homestead credit as provided in section 273.1391; and

(11) (12) the bovine tuberculosis zone credit, as provided in section 273.113.

The combination of all property tax credits must not exceed the gross tax amount.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2023.

Sec. 13.

Minnesota Statutes 2020, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare and
the county treasurer shall deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed on the county's current year's
assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer,
the treasurer may send the notice in electronic form or by electronic mail instead of on paper
or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes each
taxing authority proposes to collect for taxes payable the following year. In the case of a
town, or in the case of the state general tax, the final tax amount will be its proposed tax.
The notice must clearly state for each city that has a population over 500, county, school
district, regional library authority established under section 134.201, and metropolitan taxing
districts as defined in paragraph (i), the time and place of a meeting for each taxing authority
in which the budget and levy will be discussed and public input allowed, prior to the final
budget and levy determination. The taxing authorities must provide the county auditor with
the information to be included in the notice on or before the time it certifies its proposed
levy under subdivision 1. The public must be allowed to speak at that meeting, which must
occur after November 24 and must not be held before 6:00 p.m. It must provide a telephone
number for the taxing authority that taxpayers may call if they have questions related to the
notice and an address where comments will be received by mail, except that no notice
required under this section shall be interpreted as requiring the printing of a personal
telephone number or address as the contact information for a taxing authority. If a taxing
authority does not maintain public offices where telephone calls can be received by the
authority, the authority may inform the county of the lack of a public telephone number and
the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used for
computing property taxes payable in the following year and for taxes payable in the current
year as each appears in the records of the county assessor on November 1 of the current
year; and, in the case of residential property, whether the property is classified as homestead
or nonhomestead. The notice must clearly inform taxpayers of the years to which the market
values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general
tax, agricultural homestead credit under section 273.1384, school building bond agricultural
credit under section 273.1387, cover and tillage agricultural credit under section 273.1388,
voter approved school levy, other local school levy, and the sum of the special taxing
districts, and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement district
as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed tax
unless the town changes its levy at a special town meeting under section 365.52. If a school
district has certified under section 126C.17, subdivision 9, that a referendum will be held
in the school district at the November general election, the county auditor must note next
to the school district's proposed amount that a referendum is pending and that, if approved
by the voters, the tax amount may be higher than shown on the notice. In the case of the
city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately
from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for
the St. Paul Library Agency must be listed separately from the remaining amount of the
city's levy. In the case of Ramsey County, any amount levied under section 134.07 may be
listed separately from the remaining amount of the county's levy. In the case of a parcel
where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F
applies, the proposed tax levy on the captured value or the proposed tax levy on the tax
capacity subject to the areawide tax must each be stated separately and not included in the
sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and the
total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under the
senior citizens' property tax deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include the
following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified, including
bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday
in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring
after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value reductions
for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the
county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter,
or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within three
days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of the premises to which the
notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 473.446,
473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the county
of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent of the
county board, include supplemental information with the statement of proposed property
taxes about the impact of state aid increases or decreases on property tax increases or
decreases and on the level of services provided in the affected jurisdiction. This supplemental
information may include information for the following year, the current year, and for as
many consecutive preceding years as deemed appropriate by the governing body of the
county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and local
government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2023.

Sec. 14.

Minnesota Statutes 2020, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing of
the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. The
amounts due all other special taxing districts, if any, may be aggregated except that any
levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly
under the appropriate county's levy. If the county levy under this paragraph includes an
amount for a lake improvement district as defined under sections 103B.501 to 103B.581,
the amount attributable for that purpose must be separately stated from the remaining county
levy amount. In the case of Ramsey County, if the county levy under this paragraph includes
an amount for public library service under section 134.07, the amount attributable for that
purpose may be separated from the remaining county levy amount. The amount of the tax
on homesteads qualifying under the senior citizens' property tax deferral program under
chapter 290B is the total amount of property tax before subtraction of the deferred property
tax amount. The amount of the tax on contamination value imposed under sections 270.91
to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar
amount of any special assessments, may be rounded to the nearest even whole dollar. For
purposes of this section whole odd-numbered dollars may be adjusted to the next higher
even-numbered dollar. The amount of market value excluded under section 273.11,
subdivision 16, if any, must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures taxed
as personal property shall contain the same information that is required on the tax statements
for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's homestead market value exclusion under section 273.13, subdivision
35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for agricultural properties, the credits under sections 273.1384 and, 273.1387, and
273.1388;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit
received under section 273.135 must be separately stated and identified as "taconite tax
relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current year,
and encouraging taxpayers to attend the hearings. If the county allows notices to be included
in the envelope containing the property tax statement, and if more than one taxing district
relative to a given property decides to include a notice with the tax statement, the county
treasurer or auditor must coordinate the process and may combine the information on a
single announcement.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2023.

Sec. 15.

[290.0693] CARBON ASSESSMENT DIVIDEND.

Subdivision 1.

Dividend allowed.

A dividend is allowed to an individual as determined
under this section. The dividend shall be paid as a credit against the tax imposed by this
chapter equal to the allowable dollar amount, determined under subdivision 3, for each of
the following individuals:

(1) the taxpayer;

(2) the taxpayer's spouse for a dividend claimed on a joint return; and

(3) each qualified dependent of the taxpayer.

Subd. 2.

Definitions.

(a) For purposes of this section, the following terms have the
meanings given.

(b) "Dependent" means a dependent as defined in section 152 of the Internal Revenue
Code.

(c) "Qualified dependent" means a dependent who has attained the age of 16 by the close
of the taxable year.

Subd. 3.

Determination of allowable amount.

(a) By August 31 of each year, the
commissioner shall estimate the total number of filers, spouses, and qualified dependents
in the next taxable year.

(b) The allowable amount of the dividend for taxable years beginning in the next calendar
year equals the amount of revenues estimated by the commissioner of the Pollution Control
Agency under section 216I.03, subdivision 3, divided by the number estimated under
paragraph (a).

Subd. 4.

Dividend refundable.

If the claimant is eligible to receive a dividend that
exceeds the claimant's tax liability under this chapter, the commissioner shall refund the
excess to the claimant.

Subd. 5.

Dependent barred from claiming own dividend.

No dividend may be paid
to an individual claimed as a dependent on the federal tax return of another individual.

Subd. 6.

Appropriation.

An amount as determined under section 216I.03, subdivision
3, to pay the dividend required by this section is appropriated to the commissioner from the
carbon assessment dividend account.

EFFECTIVE DATE.

This section is effective July 1, 2022.

Sec. 16.

[290.98] REBATE OF PAYROLL TAXES.

Subdivision 1.

Rebate to employers.

(a) The amount determined under section 216I.03,
subdivision 3, must be used to provide a rebate to employers who make payments of Federal
Insurance Contributions Act taxes under section 3111 of the Internal Revenue Code.

(b) The amount of the rebate is determined for each employer by:

(1) multiplying the amount of the tax paid by an employer under section 3111 of the
Internal Revenue Code by a percentage equal to the percentage of the employer's total
payroll that is determined to be Minnesota payroll for purposes of section 290.191; and

(2) multiplying the amount determined under clause (1) by a percentage determined by
dividing the amount specified in paragraph (a) for all employers by the sum of the amounts
determined under clause (1) for all employers who apply for the rebate for the taxable year
and one-half of the self-employment tax paid by Minnesota residents who apply for a rebate
under subdivision 2 for the taxable year.

Subd. 2.

Rebate to individuals paying self-employment taxes.

The rebate for a
Minnesota resident who pays self-employment tax under section 1401 of the Internal Revenue
Code is determined by multiplying one-half of tax paid during the calendar year by a
percentage determined under subdivision 1, paragraph (b), clause (2).

Subd. 3.

Payment of rebates.

An applicant may claim the rebate under this section in
the form provided by the commissioner on the applicant's income tax return.

Subd. 4.

Appropriation.

The amount as determined under section 216I.03, subdivision
3, to pay the rebates provided in this section is appropriated from the carbon assessment
dividend account to the commissioner.

EFFECTIVE DATE.

This section is effective July 1, 2022.

Sec. 17. REPORT ON CARBON ASSESSMENT AND DIVIDEND ACT.

By January 1, 2025, the commissioner of revenue must, in consultation with the
commissioners of commerce and the Pollution Control Agency, submit a written report to
the chairs and ranking minority members of the legislative committees with primary
jurisdiction over environment policy and finance and energy policy and finance. The report
must:

(1) describe administrative procedures that could be implemented to enable payment of
the dividends and rebates required under Minnesota Statutes, sections 290.0693 and 290.98,
on a quarterly or monthly basis;

(2) estimate the administrative costs of a monthly payment system; and

(3) analyze the impact on carbon-based fuel consumption resulting from monthly
payments.

EFFECTIVE DATE.

This section is effective the day following final enactment.