Bill Text: MN HF20 | 2011 | 87th Legislature 1st Special | Chaptered
Bill Title: Special Session Tax bill.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Enrolled - Dead) 2011-07-20 - Governor's action Approval [HF20 Detail]
Download: Minnesota-2011-HF20-Chaptered.html
CHAPTER 7--H.F.No. 20
An act
relating to the financing of state and local government; making changes to individual income, corporate franchise, estate, property, aids, credits,
payments, refunds, sales and use, minerals, local, tax increment financing,
insurance, and other taxes and tax-related provisions; authorizing local taxes;
modifying sustainable forest resource management incentive; providing a
science and technology program; conforming to changes made to the Internal
Revenue Code; requiring commissioner of revenue to initiate negotiations for
reciprocity agreement with state of Wisconsin; setting the levels of the cash
flow account and the budget reserve account; reducing certain maintenance of
effort requirements; modifying powers of commissioner of revenue resulting
from temporary state shutdown; providing disaster relief; authorizing income
tax data sharing with Wisconsin; providing alternative process for consolidation
of counties; authorizing tobacco bonds; requiring studies; requiring reports;
appropriating money;amending Minnesota Statutes 2010, sections 16A.151,
subdivision 2; 97A.061, subdivision 1; 126C.01, subdivision 3; 270B.12,
by adding a subdivision; 270C.13, subdivision 1; 270C.991, subdivision 4;
272.02, subdivision 39, by adding subdivisions; 273.121, subdivision 1; 273.13,
subdivisions 23, as amended, 25, 34, by adding a subdivision; 273.1384,
subdivisions 3, 4; 273.1393; 275.025, subdivision 3; 276.04, subdivision 2;
289A.02, subdivision 7, as amended; 290.01, subdivisions 19, as amended, 19a,
as amended, 19c, as amended, 31, as amended; 290.05, subdivision 1; 290.0671,
subdivision 1; 290.0675, subdivision 1; 290.9201, subdivision 11; 290A.03,
subdivisions 11, 13, 15, as amended; 290A.04, subdivisions 2, 4; 290C.07;
291.005, subdivision 1; 291.03, subdivision 1, by adding subdivisions; 297A.61,
subdivision 3, as amended, by adding subdivisions; 297A.66, by adding a
subdivision; 297A.668, by adding a subdivision; 297A.68, subdivision 4, by
adding subdivisions; 297A.70, subdivisions 1, 2, 3, 6; 297A.75, subdivisions 1,
2, 3; 297A.99, subdivisions 1, 3; 297B.03; 297I.01, subdivisions 9, 16, by adding
subdivisions; 297I.05, subdivisions 7, 12; 297I.30, subdivisions 1, 2; 298.001,
by adding a subdivision; 298.01, subdivisions 3, 3a; 298.015, subdivisions
1, 2; 298.016, subdivision 4; 473.757, subdivision 11; 477A.011, subdivision
20; 477A.0124, by adding a subdivision; 477A.013, subdivision 9, by adding a
subdivision; 477A.03; 477A.11, subdivision 1; 477A.12, subdivision 1; 477A.14,
subdivision 1; Laws 1995, chapter 264, article 5, section 45, subdivision 1,
as amended; Laws 1996, chapter 471, article 2, section 29, subdivision 1, as
amended; Laws 1998, chapter 389, article 8, section 43, subdivisions 3, as
amended, 4, as amended, 5, as amended; Laws 2006, chapter 257, section 2;
Laws 2008, chapter 366, article 7, section 19, subdivision 3; Laws 2010, chapter
389, article 5, section 6, subdivision 1; Laws 2010, First Special Session chapter
1, article 13, section 4, subdivision 1; proposing coding for new law in Minnesota
Statutes, chapters 16A; 116W; 275; 373; repealing Minnesota Statutes 2010,
sections 273.1384, subdivisions 1, 6; 275.295; 290.0678; 290.9201, subdivision
3; 297I.05, subdivisions 9, 10; 298.017; 477A.145.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
INDIVIDUAL INCOME AND ESTATE TAXES
Section 1. Minnesota Statutes 2010, section 270B.12, is amended by adding a
subdivision to read:
Subd. 14. Wisconsin secretary of revenue; income tax reciprocity benchmark
study. The commissioner may disclose return information to the secretary of revenue
of the state of Wisconsin for the purpose of conducting a joint individual income tax
reciprocity study.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 2. Minnesota Statutes 2010, section 290.9201, subdivision 11, is amended to read:
Subd. 11.
(1) compensation paid to nonresident public speakers, if the compensation paid to
the speaker is less than $2,000 or is only a payment of the speaker's expenses
(2) compensation paid to an entertainment entity if the compensation paid to the
entertainment entity is less than $600.
(b) Compensation paid to a public speaker or an entertainment entity that is not
subject to withholding tax under this subdivision is not subject to tax under subdivision 2
unless the total compensation received by the public speaker or entertainment entity in the
tax year exceeds the individual income tax filing requirements for a nonresident individual
under section 289A.08, subdivision 1, paragraph (a), clause (1).
EFFECTIVE DATE.This section is effective for compensation paid or received
after December 31, 2011.
Sec. 3. Minnesota Statutes 2010, section 291.005, subdivision 1, is amended to read:
Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
terms used in this chapter shall have the following meanings:
(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.
(2) "Federal gross estate" means the gross estate of a decedent as required to be
valued and otherwise determined for federal estate tax purposes under the Internal
Revenue Code.
(3) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through March 18, 2010, but without regard to the provisions of
sections 501 and 901 of Public Law 107-16.
(4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
defined by section 2011(b)(3) of the Internal Revenue Code,
(i) the amount of deduction for state death taxes allowed under section 2058 of
the Internal Revenue Code; less
(ii) (A) the value of qualified small business property under section 291.03,
subdivision 9, and the value of qualified farm property under section 291.03, subdivision
10, or (B) $4,000,000, whichever is less.
(5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included therein which has its situs outside Minnesota,
and (b) including therein any property omitted from the federal gross estate which is
includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
authorities.
(6) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.
(7) "Personal representative" means the executor, administrator or other person
appointed by the court to administer and dispose of the property of the decedent. If there
is no executor, administrator or other person appointed, qualified, and acting within this
state, then any person in actual or constructive possession of any property having a situs in
this state which is included in the federal gross estate of the decedent shall be deemed
to be a personal representative to the extent of the property and the Minnesota estate tax
due with respect to the property.
(8) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota.
(9) "Situs of property" means, with respect to real property, the state or country in
which it is located; with respect to tangible personal property, the state or country in which
it was normally kept or located at the time of the decedent's death; and with respect to
intangible personal property, the state or country in which the decedent was domiciled
at death.
EFFECTIVE DATE.This section is effective for decedents dying after June 30,
2011.
Sec. 4. Minnesota Statutes 2010, section 291.03, subdivision 1, is amended to read:
Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
proportion of the maximum credit for state death taxes computed under section 2011
of the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of
federal adjusted taxable estate, as the Minnesota gross estate bears to the value of the
federal gross estate.
(b) The tax determined under this subdivision must not be greater than the sum of
the following amounts multiplied by a fraction, the numerator of which is the Minnesota
gross estate and the denominator of which is the federal gross estate:
(1) the rates and brackets under section 2001(c) of the Internal Revenue Code
multiplied by the sum of:
(i) the taxable estate, as defined under section 2051 of the Internal Revenue Code;
plus
(ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
Code; less
(iii) the lesser of (A) the sum of the value of qualified small business property
under subdivision 9, and the value of qualified farm property under subdivision 10,
or (B) $4,000,000; less
(2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
Code; and less
(3) the federal credit allowed under section 2010 of the Internal Revenue Code.
(c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 2000.
EFFECTIVE DATE.This section is effective for decedents dying after June 30,
2011.
Sec. 5. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision
to read:
Subd. 8. Definitions. (a) For purposes of this section, the following terms have the
meanings given in this subdivision.
(b) "Family member" means a family member as defined in section 2032A(e)(2) of
the Internal Revenue Code.
(c) "Qualified heir" means a family member who acquired qualified property from
the decedent and satisfies the requirement under subdivision 9, clause (6), or subdivision
10, clause (4), for the property.
(d) "Qualified property" means qualified small businesss property under subdivision
9 and qualified farm property under subdivision 10.
EFFECTIVE DATE.This section is effective for decedents dying after June 30,
2011.
Sec. 6. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision
to read:
Subd. 9. Qualified small business property. Property satisfying all of the following
requirements is qualified small business property:
(1) The value of the property was included in the federal adjusted taxable estate.
(2) The property consists of the assets of a trade or business or shares of stock or
other ownership interests in a corporation or other entity engaged in a trade or business.
The decedent or the decedent's spouse must have materially participated in the trade or
business within the meaning of section 469 of the Internal Revenue Code during the
taxable year that ended before the date of the decedent's death. Shares of stock in a
corporation or an ownership interest in another type of entity do not qualify under this
subdivision if the shares or ownership interests are traded on a public stock exchange at
any time during the three-year period ending on the decedent's date of death.
(3) The gross annual sales of the trade or business were $10,000,000 or less for the
last taxable year that ended before the date of the death of the decedent.
(4) The property does not consist of cash or cash equivalents. For property consisting
of shares of stock or other ownership interests in an entity, the amount of cash or cash
equivalents held by the corporation or other entity must be deducted from the value of
the property qualifying under this subdivision in proportion to the decedent's share of
ownership of the entity on the date of death.
(5) The decedent continuously owned the property for the three-year period ending
on the date of death of the decedent.
(6) A family member continuously uses the property in the operation of the trade or
business for three years following the date of death of the decedent.
(7) The estate and the qualified heir elect to treat the property as qualified small
business property and agree, in the form prescribed by the commissioner, to pay the
recapture tax under subdivision 11, if applicable.
EFFECTIVE DATE.This section is effective for decedents dying after June 30,
2011.
Sec. 7. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision
to read:
Subd. 10. Qualified farm property. Property satisfying all of the following
requirements is qualified farm property:
(1) The value of the property was included in the federal adjusted taxable estate.
(2) The property consists of a farm meeting the requirements of section 500.24,
and was classified for property tax purposes as the homestead of the decedent or the
decedent's spouse or both under section 273.124, and as class 2a property under section
273.13, subdivision 23.
(3) The decedent continuously owned the property for the three-year period ending
on the date of death of the decedent.
(4) A family member continuously uses the property in the operation of the trade or
business for three years following the date of death of the decedent.
(5) The estate and the qualified heir elect to treat the property as qualified farm
property and agree, in a form prescribed by the commissioner, to pay the recapture tax
under subdivision 11, if applicable.
EFFECTIVE DATE.This section is effective for decedents dying after June 30,
2011.
Sec. 8. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision
to read:
Subd. 11. Recapture tax. (a) If, within three years after the decedent's death and
before the death of the qualified heir, the qualified heir disposes of any interest in the
qualified property, other than by a disposition to a family member, or a family member
ceases to use the qualified property which was acquired or passed from the decedent, an
additional estate tax is imposed on the property.
(b) The amount of the additional tax equals the amount of the exclusion claimed by
the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
(c) The additional tax under this subdivision is due on the day which is six months
after the date of the disposition or cessation in paragraph (a).
EFFECTIVE DATE.This section is effective for decedents dying after June 30,
2011.
Sec. 9. INCOME TAX RECIPROCITY BENCHMARK STUDY.
(a) The Department of Revenue, in conjunction with the Wisconsin Department of
Revenue, must, provided the conditions of paragraph (d) are satisfied, conduct a study to
determine at least the following:
(1) the number of residents of each state who earn income from personal services in
the other state;
(2) the total amount of income earned by residents of each state who earn income
from personal services in the other state; and
(3) the change in tax revenue in each state if an income tax reciprocity arrangement
were resumed between the two states under which the taxpayers were required to pay
income taxes on the income only in their state of residence.
(b) The study must use information obtained from each state's income tax returns
for tax year 2011, and from any other source of information the departments determine is
necessary to complete the study.
(c) No later than March 1, 2013, the Department of Revenue must submit a report
containing the results of the study to the governor and to the chairs and ranking minority
members of the legislative committees having jurisdiction over taxes, in compliance with
Minnesota Statutes, sections 3.195 and 3.197.
(d) The department shall conduct the study only if the commissioner of revenue
receives notice from the secretary of revenue that the Wisconsin Department of Revenue
will fully participate in the study.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 10. ESTATE TAX; STUDY.
(a) The commissioner of revenue shall conduct a study of the Minnesota estate tax.
The study must include at least the following elements:
(1) evaluation of the estate tax using standard tax policy principles and methods of
analysis;
(2) consideration of the implications of recent federal estate tax changes, including
the repeal of the federal credit for state death taxes, the increase in the federal exclusion
amount, and the portability of the federal exclusion, for state estate and inheritance taxes;
(3) consideration of the advantages and disadvantages of revenue neutral alternatives
to the estate tax, such as an inheritance tax, a complementary gift tax, or imposition of
the income tax on bequests; and
(4) analysis of the available empirical evidence on the effects of the present and
alternative tax structures of a Minnesota tax on estates or inheritances on domicile and
migration decisions of residents and the implications for state revenues.
(b) In preparing the study, the commissioner shall consult with and seek advice from
the probate and estate section of the Minnesota State Bar Association.
(c) By February 1, 2013, the commissioner shall submit a report to the chairs and
ranking minority members of the house of representatives and senate committees with
jurisdiction over taxation, in compliance with Minnesota Statutes, sections 3.195 and
3.197, of the findings of the study and identification of issues for policy makers to consider
in deciding whether to revise, reform, replace, or repeal the estate tax.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 11. NEW RECIPROCITY AGREEMENT WITH WISCONSIN.
(a) The commissioner of revenue shall initiate negotiations with the secretary of
revenue of Wisconsin, with the objective of entering into an income tax reciprocity
agreement effective for tax years beginning after December 31, 2011.
(b) At least 30 days before entering a final income tax reciprocity agreement with
Wisconsin, the commissioner of revenue shall provide a copy of the proposed agreement
and any supporting documentation, including an estimate of the impact of the agreement
on state revenues, to the chairs and ranking minority members of the committees of the
house of representatives and senate with jurisdiction over taxes. The commissioner shall
consider any comments on the proposed agreement provided by the chairs or ranking
minority members.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 12. APPROPRIATIONS.
$291,000 in fiscal year 2012 and $314,000 in fiscal year 2013 are appropriated from
the general fund to the commissioner of revenue for the income reciprocity benchmark
study required under section 9. The appropriations under this section are onetime and
are not added to the agency's base budget.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 13. REPEALER.
(a) Minnesota Statutes 2010, section 290.0678, is repealed.
(b) Minnesota Statutes 2010, section 290.9201, subdivision 3, is repealed.
EFFECTIVE DATE.Paragraph (a) is effective for taxable years beginning after
December 31, 2011. Paragraph (b) is effective for compensation received after December
31, 2011.
ARTICLE 2
FEDERAL UPDATE
Section 1. Minnesota Statutes 2010, section 289A.02, subdivision 7, as amended by
Laws 2011, chapter 8, section 1, is amended to read:
Subd. 7. Internal Revenue Code. Unless specifically defined otherwise,
Code" means the Internal Revenue Code of 1986,
EFFECTIVE DATE.This section is effective the day following final enactment for
taxable years beginning after December 31, 2009.
Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19, as amended by Laws
2011, chapter 8, section 2, is amended to read:
Subd. 19. Net income. The term "net income" means the federal taxable income,
as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
date named in this subdivision, incorporating the federal effective dates of changes to the
Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in subdivisions 19a to 19f.
In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:
(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;
(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
Revenue Code must be applied by allowing a deduction for capital gain dividends and
exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
Revenue Code; and
(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.
The net income of a real estate investment trust as defined and limited by section
856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
The net income of a designated settlement fund as defined in section 468B(d) of
the Internal Revenue Code means the gross income as defined in section 468B(b) of the
Internal Revenue Code.
The Internal Revenue Code of 1986, as amended through
2011, shall be in effect for taxable years beginning after December 31, 1996
to accelerate the benefits for charitable cash contributions for the relief of victims of the
Haitian earthquake, are effective at the same time it became effective for federal purposes
and apply to the subtraction under subdivision 19b, clause (6). The provisions of title II,
section 2112, of the act of September 27, 2010, Public Law 111-240, rollovers from
elective deferral plans to designated Roth accounts, are effective at the same time they
became effective for federal purposes and taxable rollovers are included in net income at
the same time they are included in gross income for federal purposes.
Except as otherwise provided, references to the Internal Revenue Code in
subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
the applicable year.
EFFECTIVE DATE.This section is effective the day following final enactment,
except that the changes incorporated by federal changes are effective at the same time as
the changes were effective for federal purposes.
Sec. 3. Minnesota Statutes 2010, section 290.01, subdivision 19a, as amended by
Laws 2011, chapter 8, section 3, and Laws 2011, chapter 112, article 6, section 1, is
amended to read:
Subd. 19a. Additions to federal taxable income. For individuals, estates, and
trusts, there shall be added to federal taxable income:
(1)(i) interest income on obligations of any state other than Minnesota or a political
or governmental subdivision, municipality, or governmental agency or instrumentality
of any state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and
(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except:
(A) the portion of the exempt-interest dividends exempt from state taxation under
the laws of the United States; and
(B) the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends, including any dividends exempt
under subitem (A), that are paid by the regulated investment company as defined in section
851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
defined in section 851(g) of the Internal Revenue Code, making the payment; and
(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
government described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;
(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
accrued within the taxable year under this chapter and the amount of taxes based on net
income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state
or to any province or territory of Canada, to the extent allowed as a deduction under
section 63(d) of the Internal Revenue Code, but the addition may not be more than the
amount by which the itemized deductions as allowed under section 63(d) of the Internal
Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of
the Internal Revenue Code, disregarding the amounts allowed under sections 63(c)(1)(C)
and 63(c)(1)(E) of the Internal Revenue Code, minus any addition that would have been
required under clause (21) if the taxpayer had claimed the standard deduction. For the
purpose of this paragraph, the disallowance of itemized deductions under section 68 of
the Internal Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise
taxes are the last itemized deductions disallowed;
(3) the capital gain amount of a lump-sum distribution to which the special tax under
section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
(4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income paid to any other state or any province or territory
of Canada, to the extent allowed as a deduction in determining federal adjusted gross
income. For the purpose of this paragraph, income taxes do not include the taxes imposed
by sections
(5) the amount of expense, interest, or taxes disallowed pursuant to section
allowed under subdivision 19b, clause (1);
(6) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;
(7) 80 percent of the depreciation deduction allowed under section 168(k) of the
Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
in the taxable year generates a deduction for depreciation under section 168(k) and the
activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section 168(k) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k) is allowed;
(8) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;
(9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;
(10) for taxable years beginning before January 1, 2013, the exclusion allowed
under section 139A of the Internal Revenue Code for federal subsidies for prescription
drug plans;
(11) the amount of expenses disallowed under section 290.10, subdivision 2;
(12) for taxable years beginning before January 1, 2010,
the Internal Revenue Code, to the extent deducted from gross income;
(13) for taxable years beginning before January 1, 2010,
teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
from gross income;
(14) the additional standard deduction for property taxes payable that is allowable
under section 63(c)(1)(C) of the Internal Revenue Code;
(15) the additional standard deduction for qualified motor vehicle sales taxes
allowable under section 63(c)(1)(E) of the Internal Revenue Code;
(16) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code;
(17) the amount of unemployment compensation exempt from tax under section
85(c) of the Internal Revenue Code;
(18) changes to federal taxable income attributable to a net operating loss that the
taxpayer elected to carry back for more than two years for federal purposes but for which
the losses can be carried back for only two years under section
(19) to the extent included in the computation of federal taxable income in taxable
years beginning after December 31, 2010, the amount of disallowed itemized deductions,
but the amount of disallowed itemized deductions plus the addition required under clause
(2) may not be more than the amount by which the itemized deductions as allowed under
section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction
as defined in section 63(c) of the Internal Revenue Code, disregarding the amounts
allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code, and
reduced by any addition that would have been required under clause (21) if the taxpayer
had claimed the standard deduction;
(i) The amount of disallowed itemized deductions is equal to the lesser of:
(A) three percent of the excess of the taxpayer's federal adjusted gross income
over the applicable amount; or
(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
taxpayer under the Internal Revenue Code for the taxable year.
(ii) The term "applicable amount" means $100,000, or $50,000 in the case of a
married individual filing a separate return. Each dollar amount shall be increased by
an amount equal to:
(A) such dollar amount, multiplied by
(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof.
(iii) The term "itemized deductions" does not include:
(A) the deduction for medical expenses under section 213 of the Internal Revenue
Code;
(B) any deduction for investment interest as defined in section 163(d) of the Internal
Revenue Code; and
(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
Code or for losses described in section 165(d) of the Internal Revenue Code;
(20) to the extent included in federal taxable income in taxable years beginning after
December 31, 2010, the amount of disallowed personal exemptions for taxpayers with
federal adjusted gross income over the threshold amount;
(i) The disallowed personal exemption amount is equal to the dollar amount of the
personal exemptions claimed by the taxpayer in the computation of federal taxable income
multiplied by the applicable percentage.
(ii) "Applicable percentage" means two percentage points for each $2,500 (or
fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
year exceeds the threshold amount. In the case of a married individual filing a separate
return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In no
event shall the applicable percentage exceed 100 percent.
(iii) The term "threshold amount" means:
(A) $150,000 in the case of a joint return or a surviving spouse;
(B) $125,000 in the case of a head of a household;
(C) $100,000 in the case of an individual who is not married and who is not a
surviving spouse or head of a household; and
(D) $75,000 in the case of a married individual filing a separate return.
(iv) The thresholds shall be increased by an amount equal to:
(A) such dollar amount, multiplied by
(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and
(21) to the extent deducted in the computation of federal taxable income, for taxable
years beginning after December 31, 2010, and before January 1, 2013, the difference
between the standard deduction allowed under section 63(c) of the Internal Revenue Code
and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code
as amended through December 1, 2010.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010, except that the change to clause (10) is effective the day following
final enactment.
Sec. 4. Minnesota Statutes 2010, section 290.01, subdivision 19c, as amended by Laws
2011, chapter 8, section 4, is amended to read:
Subd. 19c. Corporations; additions to federal taxable income. For corporations,
there shall be added to federal taxable income:
(1) the amount of any deduction taken for federal income tax purposes for income,
excise, or franchise taxes based on net income or related minimum taxes, including but not
limited to the tax imposed under section
another state, a political subdivision of another state, the District of Columbia, or any
foreign country or possession of the United States;
(2) interest not subject to federal tax upon obligations of: the United States, its
possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its municipalities, or any
of its governmental agencies or instrumentalities; the District of Columbia; or Indian
tribal governments;
(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
Revenue Code;
(4) the amount of any net operating loss deduction taken for federal income tax
purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
deduction under section 810 of the Internal Revenue Code;
(5) the amount of any special deductions taken for federal income tax purposes
under sections 241 to 247 and 965 of the Internal Revenue Code;
(6) losses from the business of mining, as defined in section
clause (a), that are not subject to Minnesota income tax;
(7) the amount of any capital losses deducted for federal income tax purposes under
sections 1211 and 1212 of the Internal Revenue Code;
(8) the exempt foreign trade income of a foreign sales corporation under sections
921(a) and 291 of the Internal Revenue Code;
(9) the amount of percentage depletion deducted under sections 611 through 614 and
291 of the Internal Revenue Code;
(10) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, the amount of the amortization deduction allowed in computing federal taxable
income for those facilities;
(11) the amount of any deemed dividend from a foreign operating corporation
determined pursuant to section
shall be reduced by the amount of the addition to income required by clauses (20), (21),
(22), and (23);
(12) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;
(13) the amount of net income excluded under section 114 of the Internal Revenue
Code;
(14) any increase in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section 303(b) of Public Law 110-343;
(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
has an activity that in the taxable year generates a deduction for depreciation under
section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k)(1)(A) and (k)(4)(A) is allowed;
(16) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;
(17) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;
(18) for taxable years beginning before January 1, 2013, the exclusion allowed
under section 139A of the Internal Revenue Code for federal subsidies for prescription
drug plans;
(19) the amount of expenses disallowed under section
(20) an amount equal to the interest and intangible expenses, losses, and costs paid,
accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
of a corporation that is a member of the taxpayer's unitary business group that qualifies
as a foreign operating corporation. For purposes of this clause, intangible expenses and
costs include:
(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
use, maintenance or management, ownership, sale, exchange, or any other disposition of
intangible property;
(ii) losses incurred, directly or indirectly, from factoring transactions or discounting
transactions;
(iii) royalty, patent, technical, and copyright fees;
(iv) licensing fees; and
(v) other similar expenses and costs.
For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.
This clause does not apply to any item of interest or intangible expenses or costs paid,
accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
to such item of income to the extent that the income to the foreign operating corporation
is income from sources without the United States as defined in subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code;
(21) except as already included in the taxpayer's taxable income pursuant to clause
(20), any interest income and income generated from intangible property received or
accrued by a foreign operating corporation that is a member of the taxpayer's unitary
group. For purposes of this clause, income generated from intangible property includes:
(i) income related to the direct or indirect acquisition, use, maintenance or
management, ownership, sale, exchange, or any other disposition of intangible property;
(ii) income from factoring transactions or discounting transactions;
(iii) royalty, patent, technical, and copyright fees;
(iv) licensing fees; and
(v) other similar income.
For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.
This clause does not apply to any item of interest or intangible income received or accrued
by a foreign operating corporation with respect to such item of income to the extent that
the income is income from sources without the United States as defined in subtitle A,
chapter 1, subchapter N, part 1, of the Internal Revenue Code;
(22) the dividends attributable to the income of a foreign operating corporation that
is a member of the taxpayer's unitary group in an amount that is equal to the dividends
paid deduction of a real estate investment trust under section 561(a) of the Internal
Revenue Code for amounts paid or accrued by the real estate investment trust to the
foreign operating corporation;
(23) the income of a foreign operating corporation that is a member of the taxpayer's
unitary group in an amount that is equal to gains derived from the sale of real or personal
property located in the United States;
(24) for taxable years beginning before January 1, 2010,
and equipment under section 170(e)(6) of the Internal Revenue Code, to the extent
deducted from taxable income; and
(25) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code.
EFFECTIVE DATE.The change to clause (24) is effective for taxable years
beginning after December 31, 2010. The change to clause (18) is effective the day
following final enactment.
Sec. 5. Minnesota Statutes 2010, section 290.01, subdivision 31, as amended by Laws
2011, chapter 8, section 5, is amended to read:
Subd. 31. Internal Revenue Code. Unless specifically defined otherwise,
Revenue Code" means the Internal Revenue Code of 1986, as amended through
uncodified provision in federal law that relates to provisions of the Internal Revenue
Code that are incorporated into Minnesota law. When used in this chapter, the reference
to "subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code" is to the
Internal Revenue Code as amended through March 18, 2010.
EFFECTIVE DATE.This section is effective the day following final enactment,
except the changes incorporated by federal changes are effective at the same time as the
changes were effective for federal purposes.
Sec. 6. Minnesota Statutes 2010, section 290.0671, subdivision 1, is amended to read:
Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
imposed by this chapter equal to a percentage of earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
(b) For individuals with no qualifying children, the credit equals
the first $4,620 of earned income. The credit is reduced by
income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
case is the credit less than zero.
(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
$13,450. The credit is reduced by
whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
(d) For individuals with two or more qualifying children, the credit equals ten
percent of the first $9,720 of earned income and 20 percent of earned income over
$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income
or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is
the credit less than zero.
(e) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section
(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section
subdivision 19b
federal adjusted gross income reduced by the earned income not subject to tax under
this chapter over federal adjusted gross income. For purposes of this paragraph, the
subtractions for military pay under section
are not considered "earned income not subject to tax under this chapter."
For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."
(g) For tax years beginning after December 31, 2007, and before December 31,
2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$3,000 for married taxpayers filing joint returns. For tax years beginning after December
31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
31 of the year preceding the taxable year. The earned income thresholds as adjusted
for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
is rounded up to the nearest $10. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.
(h) For tax years beginning after December 31, 2010, and before January 1, 2012,
the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000
for married taxpayers filing joint returns. For tax years beginning after December 31,
2010, and before January 1, 2012, the commissioner shall annually adjust the $5,000
by the percentage determined pursuant to the provisions of section 1(f) of the Internal
Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for
the word "1992." For 2011, the commissioner shall then determine the percent change
from the 12 months ending on August 31, 2008, to the 12 months ending on August
31, 2010. The earned income thresholds as adjusted for inflation must be rounded to
the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10.
The determination of the commissioner under this subdivision is not a rule under the
Administrative Procedure Act.
at various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
Sec. 7. Minnesota Statutes 2010, section 290.0675, subdivision 1, is amended to read:
Subdivision 1. Definitions. (a) For purposes of this section the following terms
have the meanings given.
(b) "Earned income" means the sum of the following, to the extent included in
Minnesota taxable income:
(1) earned income as defined in section 32(c)(2) of the Internal Revenue Code;
(2) income received from a retirement pension, profit-sharing, stock bonus, or
annuity plan; and
(3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue
Code.
(c) "Taxable income" means net income as defined in section
(d) "Earned income of lesser-earning spouse" means the earned income of the
spouse with the lesser amount of earned income as defined in paragraph (b) for the taxable
year minus the sum of (i) the amount for one exemption under section 151(d) of the
Internal Revenue Code and (ii) one-half the amount of the standard deduction under
section 63(c)(2)(A) and (4) of the Internal Revenue Code minus one-half of any addition
required under section 290.01, subdivision 19a, clause (21), and one-half of the addition
that would have been required under section 290.01, subdivision 19a, clause (21), if the
taxpayer had claimed the standard deduction.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
Sec. 8. Minnesota Statutes 2010, section 290A.03, subdivision 15, as amended by
Laws 2011, chapter 8, section 6, is amended to read:
Subd. 15. Internal Revenue Code.
Code of 1986, as amended through
EFFECTIVE DATE.This section is effective for property tax refunds based on
property taxes payable on or after December 31, 2011, and rent paid on or after December
31, 2010.
Sec. 9. Minnesota Statutes 2010, section 291.005, subdivision 1, is amended to read:
Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
terms used in this chapter shall have the following meanings:
(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.
(2) "Federal gross estate" means the gross estate of a decedent as required to be
valued and otherwise determined for federal estate tax purposes under the Internal
Revenue Code.
(3) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through
provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law
111-312, and section 301(c) of Public Law 111-312.
(4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of
deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.
(5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included therein which has its situs outside Minnesota,
and (b) including therein any property omitted from the federal gross estate which is
includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
authorities.
(6) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.
(7) "Personal representative" means the executor, administrator or other person
appointed by the court to administer and dispose of the property of the decedent. If there
is no executor, administrator or other person appointed, qualified, and acting within this
state, then any person in actual or constructive possession of any property having a situs in
this state which is included in the federal gross estate of the decedent shall be deemed
to be a personal representative to the extent of the property and the Minnesota estate tax
due with respect to the property.
(8) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota.
(9) "Situs of property" means, with respect to real property, the state or country in
which it is located; with respect to tangible personal property, the state or country in which
it was normally kept or located at the time of the decedent's death; and with respect to
intangible personal property, the state or country in which the decedent was domiciled
at death.
EFFECTIVE DATE.This section is effective the day following final enactment.
ARTICLE 3
SALES AND USE TAXES
Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 3, as amended by
Laws 2011, chapter 112, article 8, section 1, is amended to read:
Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
to, each of the transactions listed in this subdivision.
(b) Sale and purchase include:
(1) any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, for a consideration in money or by exchange or barter; and
(2) the leasing of or the granting of a license to use or consume, for a consideration
in money or by exchange or barter, tangible personal property, other than a manufactured
home used for residential purposes for a continuous period of 30 days or more.
(c) Sale and purchase include the production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication, printing, or processing.
(d) Sale and purchase include the preparing for a consideration of food.
Notwithstanding section
to, the following:
(1) prepared food sold by the retailer;
(2) soft drinks;
(3) candy;
(4) dietary supplements; and
(5) all food sold through vending machines.
(e) A sale and a purchase includes the furnishing for a consideration of electricity,
gas, water, or steam for use or consumption within this state.
(f) A sale and a purchase includes the transfer for a consideration of prewritten
computer software whether delivered electronically, by load and leave, or otherwise.
(g) A sale and a purchase includes the furnishing for a consideration of the following
services:
(1) the privilege of admission to places of amusement, recreational areas, or athletic
events, and the making available of amusement devices, tanning facilities, reducing
salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
(2) lodging and related services by a hotel, rooming house, resort, campground,
motel, or trailer camp, including furnishing the guest of the facility with access to
telecommunication services, and the granting of any similar license to use real property in
a specific facility, other than the renting or leasing of it for a continuous period of 30 days
or more under an enforceable written agreement that may not be terminated without prior
notice and including accommodations intermediary services provided in connection with
other services provided under this clause;
(3) nonresidential parking services, whether on a contractual, hourly, or other
periodic basis, except for parking at a meter;
(4) the granting of membership in a club, association, or other organization if:
(i) the club, association, or other organization makes available for the use of its
members sports and athletic facilities, without regard to whether a separate charge is
assessed for use of the facilities; and
(ii) use of the sports and athletic facility is not made available to the general public
on the same basis as it is made available to members.
Granting of membership means both onetime initiation fees and periodic membership
dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
swimming pools; and other similar athletic or sports facilities;
(5) delivery of aggregate materials by a third party, excluding delivery of aggregate
material used in road construction; and delivery of concrete block by a third party if
the delivery would be subject to the sales tax if provided by the seller of the concrete
block; and
(6) services as provided in this clause:
(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
include services provided by coin operated facilities operated by the customer;
(ii) motor vehicle washing, waxing, and cleaning services, including services
provided by coin operated facilities operated by the customer, and rustproofing,
undercoating, and towing of motor vehicles;
(iii) building and residential cleaning, maintenance, and disinfecting services and
pest control and exterminating services;
(iv) detective, security, burglar, fire alarm, and armored car services; but not
including services performed within the jurisdiction they serve by off-duty licensed peace
officers as defined in section
organization for monitoring and electronic surveillance of persons placed on in-home
detention pursuant to court order or under the direction of the Minnesota Department
of Corrections;
(v) pet grooming services;
(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
clearing contract as defined in section
public utility lines. Services performed under a construction contract for the installation of
shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
(vii) massages, except when provided by a licensed health care facility or
professional or upon written referral from a licensed health care facility or professional for
treatment of illness, injury, or disease; and
(viii) the furnishing of lodging, board, and care services for animals in kennels and
other similar arrangements, but excluding veterinary and horse boarding services.
In applying the provisions of this chapter, the terms "tangible personal property"
and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
and the provision of these taxable services, unless specifically provided otherwise.
Services performed by an employee for an employer are not taxable. Services performed
by a partnership or association for another partnership or association are not taxable if
one of the entities owns or controls more than 80 percent of the voting power of the
equity interest in the other entity. Services performed between members of an affiliated
group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
group of corporations" means those entities that would be classified as members of an
affiliated group as defined under United States Code, title 26, section 1504, disregarding
the exclusions in section 1504(b).
For purposes of clause (5), "road construction" means construction of (1) public
roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
metropolitan area up to the point of the emergency response location sign.
(h) A sale and a purchase includes the furnishing for a consideration of tangible
personal property or taxable services by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
subdivisions.
(i) A sale and a purchase includes the furnishing for a consideration of
telecommunications services, ancillary services associated with telecommunication
services, cable television services, and direct satellite services
Telecommunication services include, but are not limited to, the following services,
as defined in section
telecommunication service, postpaid calling service, prepaid calling service, prepaid
wireless calling service, and private communication services. The services in this
paragraph are taxed to the extent allowed under federal law.
(j) A sale and a purchase includes the furnishing for a consideration of installation if
the installation charges would be subject to the sales tax if the installation were provided
by the seller of the item being installed.
(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
EFFECTIVE DATE.This section is effective for sales and purchases made after
September 30, 2011, except the change in paragraph (g), clause (2), is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2010, section 297A.61, is amended by adding a subdivision
to read:
Subd. 47. Accommodations intermediary. "Accommodations intermediary"
means any person or entity, other than an accommodations provider, that facilitates the sale
of lodging as defined in subdivision 3, paragraph (g), clause (2), and that charges a room
charge to a customer. The term "facilitates the sale" includes brokering, coordinating, or in
any way arranging for the purchase of or the right to use accommodations by a customer.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 3. Minnesota Statutes 2010, section 297A.61, is amended by adding a subdivision
to read:
Subd. 48. Accommodations provider. "Accommodations provider" means any
person or entity that furnishes lodging as defined in subdivision 3, paragraph (g), clause
(2), to the general public for compensation. The term "furnishes" includes the sale of use
or possession, or the sale of the right to use or possess.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 4. Minnesota Statutes 2010, section 297A.66, is amended by adding a subdivision
to read:
Subd. 6. Lodging services. An accommodations intermediary shall collect sales
tax and remit it to the commissioner under section 297A.77 for services provided in
connection with or for lodging located in this state.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 5. Minnesota Statutes 2010, section 297A.668, is amended by adding a
subdivision to read:
Subd. 9. Florist sales. (a) Notwithstanding other subdivisions of this section, the
retail sale of "florist sales" is sourced as follows:
(1) When a Minnesota retailer takes a florist sales order directly from a customer,
whether or not the customer is physically present in Minnesota when placing the order,
and delivers the items to the customer or a third person, either within this state or outside
this state, and regardless of the delivery method, the florist sale is sourced according to
subdivision 2.
(2) When one retailer transmits a florist sales order to another retailer of florist sales
through a floral network service or floral delivery association, whether by telephone,
telegraph, Internet, or other means of communication, the florist sale is sourced to the
location of the retailer which originally takes the order from the customer and accepts
payment.
(b) For purposes of this subdivision, florist sales means sales at retail of flowers,
wreaths, floral bouquets, potted plants, hospital baskets, funeral designs, seeds, nursery
seedling stock, trees, shrubs, plants, sod, soil, bulbs, sand, rock, and all other floral
or nursery products.
EFFECTIVE DATE.This section is effective for sales and purchases made after
September 30, 2011.
Sec. 6. Minnesota Statutes 2010, section 297A.68, subdivision 4, is amended to read:
Subd. 4. Taconite, other ores, metals, or minerals; production materials. Mill
liners, grinding rods, and grinding balls that are substantially consumed in the production
of taconite or other ores, metals, or minerals are exempt when sold to or stored, used, or
consumed by persons taxed under the in-lieu or net proceeds provisions of chapter 298.
EFFECTIVE DATE.This section is effective for sales and purchases made after
September 30, 2011.
Sec. 7. Minnesota Statutes 2010, section 297A.68, is amended by adding a subdivision
to read:
Subd. 42. Qualified data centers. (a) Purchases of enterprise information
technology equipment and computer software for use in a qualified data center are exempt.
The tax on purchases exempt under this paragraph must be imposed and collected as if
the rate under section 297A.62, subdivision 1, applied, and then refunded after June 30,
2013, in the manner provided in section 297A.75. This exemption includes enterprise
information technology equipment and computer software purchased to replace or upgrade
enterprise information technology equipment and computer software in a qualified data
center.
(b) Electricity used or consumed in the operation of a qualified data center is exempt.
(c) For purposes of this subdivision, "qualified data center" means a facility in
Minnesota:
(1) that is comprised of one or more buildings that consist in the aggregate of
at least 30,000 square feet, and that are located on a single parcel or on contiguous
parcels, where the total cost of construction or refurbishment, investment in enterprise
information technology equipment, and computer software is at least $50,000,000 within
a 24-month period;
(2) that is constructed or substantially refurbished after June 30, 2012, where
"substantially refurbished" means that at least 30,000 square feet has been rebuilt or
modified; and
(3) that is used to house enterprise information technology equipment, where the
facility has the following characteristics:
(i) uninterruptible power supplies, generator backup power, or both;
(ii) sophisticated fire suppression and prevention systems; and
(iii) enhanced security. A facility will be considered to have enhanced security if it
has restricted access to the facility to selected personnel; permanent security guards; video
camera surveillance; an electronic system requiring pass codes, keycards, or biometric
scans, such as hand scans and retinal or fingerprint recognition; or similar security features.
In determining whether the facility has the required square footage, the square
footage of the following spaces shall be included if the spaces support the operation of
enterprise information technology equipment: office space, meeting space, and mechanical
and other support facilities.
(d) For purposes of this subdivision, "enterprise information technology equipment"
means computers and equipment supporting computing, networking, or data storage,
including servers and routers. It includes, but is not limited to: cooling systems,
cooling towers, and other temperature control infrastructure; power infrastructure for
transformation, distribution, or management of electricity used for the maintenance
and operation of a qualified data center, including but not limited to exterior dedicated
business-owned substations, backup power generation systems, battery systems, and
related infrastructure; and racking systems, cabling, and trays, which are necessary for
the maintenance and operation of the qualified data center.
(e) A qualified data center may claim the exemptions in this subdivision for
purchases made either within 20 years of the date of its first purchase qualifying for the
exemption under paragraph (a), or by June 30, 2042, whichever is earlier.
(f) The purpose of this exemption is to create jobs in the construction and data
center industries.
(g) This subdivision is effective for sales and purchases made after June 30, 2012,
and before July 1, 2042.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2012, and before July 1, 2042.
Sec. 8. Minnesota Statutes 2010, section 297A.68, is amended by adding a subdivision
to read:
Subd. 43. Resold admission tickets. (a) When a ticket reseller who purchased
a ticket from a seller who is in the business of selling tickets resells the ticket, the
ticket reseller must charge tax on the total amount for which the ticket is resold and the
following rules apply:
(1) if the ticket reseller did not use a fully completed exemption certificate to claim
the exemption from tax for resale, but instead paid tax on the original purchase, then the
ticket reseller may do one of the following:
(i) seek a refund of that tax under section 289A.50; or
(ii) pass through to the purchaser the amount of the tax the ticket reseller paid on
the original purchase, by giving the purchaser credit for the Minnesota state and local tax
paid by the ticket reseller on the ticket reseller's original purchase of the ticket. Credit
for the tax cannot exceed either the sales tax paid on the original price of the ticket or the
sales tax charged by the ticket reseller to the final purchaser;
(2) if the ticket reseller did not pay tax on the original purchase, tax is due on the full
amount of the ticket when resold, without a credit given to the final purchaser; and
(3) the ticket reseller must retain records documenting the price and tax paid by the
ticket reseller when purchasing the ticket and the price and tax collected when the ticket
reseller resells the ticket.
(b) When a ticket reseller who purchased a ticket from a seller who is not in the
business of selling tickets resells the ticket, the ticket reseller must charge tax on the total
amount for which the ticket is resold and the following rules apply:
(1) the ticket reseller may credit its purchaser an amount equal to the tax the ticket
reseller would have paid its seller, had the seller been registered to collect tax on its
sale of the ticket to the ticket reseller. Credit for the tax cannot exceed either the sales
tax paid on the original price of the ticket or the sales tax charged by the ticket reseller
to the final purchaser. It is presumed that the original purchase price of the ticket is the
face amount of the ticket;
(2) if no tax was paid on the original purchase, tax is due on the full amount of the
ticket when resold, without a credit given to the ticket reseller's purchaser; and
(3) the ticket reseller must retain records documenting the price and tax paid by the
ticket reseller when purchasing the ticket and the price and tax collected when the ticket
reseller resells the ticket.
(c) For purposes of this subdivision, "ticket reseller" means a person who:
(1) purchases admission tickets to a sporting event, theater, musical performance, or
place of public entertainment or amusement of any kind;
(2) resells admission tickets to events under clause (1); and
(3) is registered to collect tax under this chapter.
EFFECTIVE DATE.This section is effective for sales and purchases made after
September 30, 2011.
Sec. 9. Minnesota Statutes 2010, section 297A.70, subdivision 1, is amended to read:
Subdivision 1. Scope. (a) To the extent provided in this section, the gross receipts
from sales of items to or by, and storage, distribution, use, or consumption of items by the
organizations or units of local government listed in this section are specifically exempted
from the taxes imposed by this chapter.
(b) Notwithstanding any law to the contrary enacted before 1992, only sales to
governments and political subdivisions listed in this section are exempt from the taxes
imposed by this chapter.
(c) "Sales" includes purchases under an installment contract or lease purchase
agreement under section
EFFECTIVE DATE.This section is effective for sales and purchases made after
September 30, 2011.
Sec. 10. Minnesota Statutes 2010, section 297A.70, subdivision 2, is amended to read:
Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:
(1) the United States and its agencies and instrumentalities;
(2) school districts, the University of Minnesota, state universities, community
colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;
(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;
(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section
(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state;
(6)
systems as defined in section
agency libraries, the state library under section
Library; and
(7) towns.
(b) This exemption does not apply to the sales of the following products and services:
(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;
(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;
(3) the leasing of a motor vehicle as defined in section
except for leases entered into by the United States or its agencies or instrumentalities;
(4) lodging as defined under section
clause (2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in
section
and alcoholic beverages purchased directly by the United States or its agencies or
instrumentalities; or
(5) goods or services purchased by a town as inputs to goods and services that are
generally provided by a private business and the purchases would be taxable if made by a
private business engaged in the same activity.
(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section
(d) As used in this subdivision, "goods or services generally provided by a private
business" include, but are not limited to, goods or services provided by liquor stores, gas
and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
and laundromats. "Goods or services generally provided by a private business" do not
include housing services, sewer and water services, wastewater treatment, ambulance and
other public safety services, correctional services, chore or homemaking services provided
to elderly or disabled individuals, or road and street maintenance or lighting.
EFFECTIVE DATE.This section is effective for sales and purchases made after
September 30, 2011.
Sec. 11. Minnesota Statutes 2010, section 297A.70, subdivision 3, is amended to read:
Subd. 3. Sales of certain goods and services to government. (a) The following
sales to or use by the specified governments and political subdivisions of the state are
exempt:
(1) repair and replacement parts for emergency rescue vehicles, fire trucks, and
fire apparatus to a political subdivision;
(2) machinery and equipment, except for motor vehicles, used directly for mixed
municipal solid waste management services at a solid waste disposal facility as defined in
section
(3) chore and homemaking services to a political subdivision of the state to be
provided to elderly or disabled individuals;
(4) telephone services to the Office of Enterprise Technology that are used to provide
telecommunications services through the enterprise technology revolving fund;
(5) firefighter personal protective equipment as defined in paragraph (b), if purchased
or authorized by and for the use of an organized fire department, fire protection district, or
fire company regularly charged with the responsibility of providing fire protection to the
state or a political subdivision;
(6) bullet-resistant body armor that provides the wearer with ballistic and trauma
protection, if purchased by a law enforcement agency of the state or a political subdivision
of the state, or a licensed peace officer, as defined in section
(7) motor vehicles purchased or leased by political subdivisions of the state if the
vehicles are exempt from registration under section
exempt from taxation under section
under section
(8) equipment designed to process, dewater, and recycle biosolids for wastewater
treatment facilities of political subdivisions, and materials incidental to installation of
that equipment;
of roads, trails, or firebreaks when purchased by an agency of the state or a political
subdivision of the state;
of vehicles and repair parts to equip operations provided for in section
but not limited to, the Northstar Corridor Rail project
(11) purchases of water used directly in providing public safety services by an
organized fire department, fire protection district, or fire company regularly charged with
the responsibility of providing fire protection to the state or a political subdivision.
(b) For purposes of this subdivision, "firefighters personal protective equipment"
means helmets, including face shields, chin straps, and neck liners; bunker coats and
pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets;
protective coveralls; goggles; self-contained breathing apparatus; canister filter masks;
personal alert safety systems; spanner belts; optical or thermal imaging search devices;
and all safety equipment required by the Occupational Safety and Health Administration.
(c) For purchases of items listed in paragraph (a), clause (11), the tax must be
imposed and collected as if the rate under section
then refunded in the manner provided in section
EFFECTIVE DATE.This section is effective for sales and purchases made after
September 30, 2011, except that the new clause (11) is effective retroactively for sales
and purchases made after June 30, 2007; however, no refunds may be made for amounts
already paid on water purchased between June 30, 2007, and January 30, 2010.
Sec. 12. Minnesota Statutes 2010, section 297A.70, subdivision 6, is amended to read:
Subd. 6. Ambulances. The lease of a motor vehicle
an ambulance service licensed under section
intended for emergency response or for providing ambulance services is exempt.
EFFECTIVE DATE.This section is effective for sales and purchases made after
September 30, 2011.
Sec. 13. Minnesota Statutes 2010, section 297A.75, subdivision 1, is amended to read:
Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
following exempt items must be imposed and collected as if the sale were taxable and the
rate under section
(1) capital equipment exempt under section
(2) building materials for an agricultural processing facility exempt under section
(3) building materials for mineral production facilities exempt under section
(4) building materials for correctional facilities under section
3
(5) building materials used in a residence for disabled veterans exempt under section
(6) elevators and building materials exempt under section
(7) building materials for the Long Lake Conservation Center exempt under section
(8) materials and supplies for qualified low-income housing under section
subdivision 23
(9) materials, supplies, and equipment for municipal electric utility facilities under
section
(10) equipment and materials used for the generation, transmission, and distribution
of electrical energy and an aerial camera package exempt under section
subdivision 37;
(11) tangible personal property and taxable services and construction materials,
supplies, and equipment exempt under section
(12) commuter rail vehicle and repair parts under section
3, clause (11);
(13) materials, supplies, and equipment for construction or improvement of projects
and facilities under section
(14) materials, supplies, and equipment for construction or improvement of a meat
processing facility exempt under section
(15) materials, supplies, and equipment for construction, improvement, or expansion
of an aerospace defense manufacturing facility exempt under section
42
(16) enterprise information technology equipment and computer software for use in
a qualified data center exempt under section 297A.68, subdivision 42.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2012.
Sec. 14. Minnesota Statutes 2010, section 297A.75, subdivision 2, is amended to read:
Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
must be paid to the applicant. Only the following persons may apply for the refund:
(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
(2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental
subdivision;
(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;
(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
property;
(5) for subdivision 1, clause (8), the owner of the qualified low-income housing
project;
(6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilities;
(7) for subdivision 1, clauses (10), (11), (14),
qualifying business; and
(8) for subdivision 1, clauses (12) and (13), the applicant must be the governmental
entity that owns or contracts for the project or facility.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2012.
Sec. 15. Minnesota Statutes 2010, section 297A.75, subdivision 3, is amended to read:
Subd. 3. Application. (a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11),
(12), (13), (14),
the refund applicant a statement including the cost of the exempt items and the taxes paid
on the items unless otherwise specifically provided by this subdivision. The provisions of
sections
(b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section
(c) Total refunds for purchases of items in section
exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
of items in sections
subdivision 40, must not be filed until after June 30, 2009.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2012.
Sec. 16. Minnesota Statutes 2010, section 297B.03, is amended to read:
297B.03 EXEMPTIONS.
There is specifically exempted from the provisions of this chapter and from
computation of the amount of tax imposed by it the following:
(1) purchase or use, including use under a lease purchase agreement or installment
sales contract made pursuant to section
and its agencies and instrumentalities and by any person described in and subject to the
conditions provided in section
(2) purchase or use of any motor vehicle by any person who was a resident of
another state or country at the time of the purchase and who subsequently becomes a
resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
such person began residing in the state of Minnesota and the motor vehicle was registered
in the person's name in the other state or country;
(3) purchase or use of any motor vehicle by any person making a valid election to be
taxed under the provisions of section
(4) purchase or use of any motor vehicle previously registered in the state of
Minnesota when such transfer constitutes a transfer within the meaning of section 118,
331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
Revenue Code;
(5) purchase or use of any vehicle owned by a resident of another state and leased
to a Minnesota-based private or for-hire carrier for regular use in the transportation of
persons or property in interstate commerce provided the vehicle is titled in the state of
the owner or secured party, and that state does not impose a sales tax or sales tax on
motor vehicles used in interstate commerce;
(6) purchase or use of a motor vehicle by a private nonprofit or public educational
institution for use as an instructional aid in automotive training programs operated by the
institution. "Automotive training programs" includes motor vehicle body and mechanical
repair courses but does not include driver education programs;
(7) purchase of a motor vehicle
licensed under section
emergency response or for providing ambulance service;
(8) purchase of a motor vehicle by or for a public library, as defined in section
(9) purchase of a ready-mixed concrete truck;
(10) purchase or use of a motor vehicle by a town for use exclusively for road
maintenance, including snowplows and dump trucks, but not including automobiles,
vans, or pickup trucks;
(11) purchase or use of a motor vehicle by a corporation, society, association,
foundation, or institution organized and operated exclusively for charitable, religious,
or educational purposes, except a public school, university, or library, but only if the
vehicle is:
(i) a truck, as defined in section
passenger automobile, as defined in section
used for carrying more than nine persons including the driver; and
(ii) intended to be used primarily to transport tangible personal property or
individuals, other than employees, to whom the organization provides service in
performing its charitable, religious, or educational purpose;
(12) purchase of a motor vehicle for use by a transit provider exclusively to provide
transit service is exempt if the transit provider is either (i) receiving financial assistance or
reimbursement under section
(13) purchase or use of a motor vehicle by a qualified business, as defined in section
garaged in the job opportunity building zone and is primarily used as part of or in direct
support of the person's operations carried on in the job opportunity building zone. The
exemption under this clause applies to sales, if the purchase was made and delivery
received during the duration of the job opportunity building zone. The exemption under
this clause also applies to any local sales and use tax; and
(14) purchase of a leased vehicle by the lessee who was a participant in a
lease-to-own program from a charitable organization that is:
(i) described in section 501(c)(3) of the Internal Revenue Code; and
(ii) licensed as a motor vehicle lessor under section
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 17. Laws 2006, chapter 257, section 2, the effective date, is amended to read:
EFFECTIVE DATE.This section is effective for sales and purchases after June
30, 2006, and before July 1,
EFFECTIVE DATE.This section is effective retroactively for sales and purchases
made after June 30, 2011.
ARTICLE 4
LOCAL TAXES
Section 1. Minnesota Statutes 2010, section 297A.99, subdivision 1, is amended to
read:
Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
impose a general sales tax (1) under section
permitted by special law
enacted and imposed the tax before January 1, 1982, and its predecessor provision.
(b) This section governs the imposition of a general sales tax by the political
subdivision. The provisions of this section preempt the provisions of any special law:
(1) enacted before June 2, 1997, or
(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
provision from this section's rules by reference.
(c) This section does not apply to or preempt a sales tax on motor vehicles or a
special excise tax on motor vehicles.
(d) A political subdivision may not advertise or expend funds for the promotion of a
referendum to support imposing a local option sales tax. A political subdivision may only
expend funds to conduct the referendum.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 2. Minnesota Statutes 2010, section 297A.99, subdivision 3, is amended to read:
Subd. 3. Requirements for adoption, use, termination. (a) Imposition of a local
sales tax is subject to approval by voters of the political subdivision at a general election.
The election must be conducted before the governing body of the political subdivision
requests legislative approval of the tax.
(b) The proceeds of the tax must be dedicated exclusively to payment of the cost of a
specific capital improvement which is designated at least 90 days before the referendum
on imposition of the tax is conducted.
(c) The tax must terminate after the improvement designated under paragraph (b)
has been completed.
(d) After a sales tax imposed by a political subdivision has expired or been
terminated, the political subdivision is prohibited from imposing a local sales tax for a
period of one year. Notwithstanding subdivision 13, this paragraph applies to all local
sales taxes in effect at the time of or imposed after May 26, 1999.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 3. Minnesota Statutes 2010, section 473.757, subdivision 11, is amended to read:
Subd. 11. Uses of tax. (a) Revenues received from the tax imposed under
subdivision 10 may be used:
(1) to pay costs of collection;
(2) to pay or reimburse or secure the payment of any principal of, premium, or
interest on bonds issued in accordance with this act;
(3) to pay costs and make expenditures and grants described in this section, including
financing costs related to them;
(4) to maintain reserves for the foregoing purposes deemed reasonable and
appropriate by the county;
(5) to pay for operating costs of the ballpark authority other than the cost of
operating or maintaining the ballpark; and
(6) to make expenditures and grants for youth activities and amateur sports and
extension of library hours as described in subdivision 2;
and for no other purpose.
(b) Revenues from the tax designated for use under paragraph (a), clause (5), must
be deposited in the operating fund of the ballpark authority.
(c) After completion of the ballpark and public infrastructure, the tax revenues not
required for current payments of the expenditures described in paragraph (a), clauses (1) to
(6), shall be used to (i) redeem or defease the bonds and (ii) prepay or establish a fund for
payment of future obligations under grants or other commitments for future expenditures
which are permitted by this section. Upon the redemption or defeasance of the bonds and
the establishment of reserves adequate to meet such future obligations, the taxes shall
terminate and shall not be reimposed. For purposes of this subdivision, "reserves adequate
to meet such future obligations" means a reserve that does not exceed the net present value
of the county's obligation to make grants under paragraph (a), clauses (5) and (6), and to
fund the reserve for capital improvements required under section 473.759, subdivision 3,
for the 30-year period beginning on the date of the original issuance of the bonds, less
those obligations that the county has already paid.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 4. Laws 1996, chapter 471, article 2, section 29, subdivision 1, as amended by
Laws 2006, chapter 259, article 3, section 3, is amended to read:
Subdivision 1. Sales tax authorized. (a) Notwithstanding Minnesota Statutes,
section 477A.016, or any other contrary provision of law, ordinance, or city charter, the
city of Hermantown may, by ordinance, impose an additional sales tax of up to one
percent on sales transactions taxable pursuant to Minnesota Statutes, chapter 297A, that
occur within the city. The proceeds of the tax imposed under this section must be used to
meet the costs of:
(1) extending a sewer interceptor line;
(2) construction of a booster pump station, reservoirs, and related improvements
to the water system; and
(3) construction of a building containing a police and fire station and an
administrative services facility.
(b) If the city imposed a sales tax of only one-half of one percent under paragraph
(a), it may increase the tax to one percent to fund the purposes under paragraph (a)
provided it is approved by the voters at a general election held before December 31, 2012.
EFFECTIVE DATE.This section is effective the day following compliance by the
city of Hermantown with Minnesota Statutes, section 645.021.
Sec. 5. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by
Laws 2005, First Special Session chapter 3, article 5, section 28, is amended to read:
Subd. 3. Use of revenues. (a) Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used by the city to pay for the cost of collecting and
administering the taxes and to pay for the following projects:
(1) transportation infrastructure improvements including regional highway and
airport improvements;
(2) improvements to the civic center complex;
(3) a municipal water, sewer, and storm sewer project necessary to improve regional
ground water quality; and
(4) construction of a regional recreation and sports center and other higher education
facilities available for both community and student use.
(b) The total amount of capital expenditures or bonds for
paragraph (a) that may be paid from the revenues raised from the taxes authorized in this
section may not exceed $111,500,000. The total amount of capital expenditures or bonds
for the project in clause (4) that may be paid from the revenues raised from the taxes
authorized in this section may not exceed $28,000,000.
(c) In addition to the projects authorized in paragraph (a) and not subject to the
amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an
election under subdivision 5, paragraph (c), use the revenues received from the taxes and
bonds authorized in this section to pay the costs of or bonds for the following purposes:
(1) $17,000,000 for capital expenditures and bonds for the following Olmsted
County transportation infrastructure improvements:
(i) County State Aid Highway 34 reconstruction;
(ii) Trunk Highway 63 and County State Aid Highway 16 interchange;
(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22
interchange;
(iv) widening of County State Aid Highway 22 West Circle Drive; and
(v) 60th Avenue Northwest corridor preservation;
(2) $30,000,000 for city transportation projects including:
(i) Trunk Highway 52 and 65th Street interchange;
(ii) NW transportation corridor acquisition;
(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;
(iv) Trunk Highway 14 and Trunk Highway 63 intersection;
(v) Southeast transportation corridor acquisition;
(vi) Rochester International Airport expansion; and
(vii) a transit operations center bus facility;
(3) $14,000,000 for the University of Minnesota Rochester academic and
complementary facilities;
(4) $6,500,000 for the Rochester Community and Technical College/Winona State
University career technical education and science and math facilities;
(5) $6,000,000 for the Rochester Community and Technical College regional
recreation facilities at University Center Rochester;
(6) $20,000,000 for the Destination Medical Community Initiative;
(7) $8,000,000 for the regional public safety and 911 dispatch center facilities;
(8) $20,000,000 for a regional recreation/senior center;
(9) $10,000,000 for an economic development fund; and
(10) $8,000,000 for downtown infrastructure.
(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1
and 2 may be used to fund transportation improvements related to a railroad bypass that
would divert traffic from the city of Rochester.
(e) The city shall use $5,000,000 of the money allocated to the purpose in paragraph
(c), clause (9), for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin,
Eyota, Kasson, Mantorville, Oronoco, Pine Island, Plainview, St. Charles, Stewartville,
Zumbrota, Spring Valley, West Concord, and Hayfield for economic development projects
that these communities would fund through their economic development authority or
housing and redevelopment authority.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Rochester with Minnesota Statutes, section 645.021.
Sec. 6. Laws 1998, chapter 389, article 8, section 43, subdivision 4, as amended by
Laws 2005, First Special Session chapter 3, article 5, section 29, is amended to read:
Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota
Statutes, chapter 475, to finance the capital expenditure and improvement projects.
An election to approve up to $71,500,000 in bonds under Minnesota Statutes, section
under subdivision 1. Whether to permit imposition of the tax and issuance of bonds
may be posed to the voters as a single question. The question must state that the sales
tax revenues are pledged to pay the bonds, but that the bonds are general obligations
and will be guaranteed by the city's property taxes. An election to approve up to an
additional $40,000,000 of bonds under Minnesota Statutes, section
in combination with the election to authorize extension of the tax under subdivision 5,
paragraph (b). An election to approve bonds under Minnesota Statutes, section 475.58,
in an amount not to exceed $139,500,000 plus an amount equal to the costs of issuance
of the bonds, may be held in combination with the election to authorize the extension of
the tax under subdivision 5, paragraph (c).
(b) The city
city and the county agree to jointly undertake and finance certain roadway infrastructure
improvements. The agreement
county a portion of the sales tax revenues collected pursuant to the authority granted in
this section and the bonding authority provided in this subdivision. The county may,
pursuant to the agreement, issue its general obligation bonds in a principal amount not
exceeding the amount authorized by its agreement with the city payable primarily from
the sales tax revenues from the city under the agreement. The county's bonds must be
issued in accordance with the provisions of Minnesota Statutes, chapter 475, except that
no election is required for the issuance of the bonds and the bonds are not included in
the net debt of the county.
Statutes, section
city, and the levy of taxes under Minnesota Statutes, section
and interest on the bonds is not subject to any levy limitation.
(e) The aggregate principal amount of bonds, plus the aggregate of the taxes used
directly to pay eligible capital expenditures and improvements for projects listed in
subdivision 3, paragraph (a), may not exceed $111,500,000, plus an amount equal to the
costs related to issuance of the bonds. The aggregate principal amount of bonds plus the
aggregate of the taxes used directly to pay the costs of eligible projects under subdivision
3, paragraph (c), may not exceed $139,500,000 plus an amount equal to the costs of
issuance of the bonds.
any bonds issued to refund them, only if the bonds and any refunding bonds are general
obligations of the city.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Rochester with Minnesota Statutes, section 645.021.
Sec. 7. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by
Laws 2005, First Special Session chapter 3, article 5, section 30, is amended to read:
Subd. 5. Termination of taxes. (a) The taxes imposed under subdivisions 1 and
2 expire at the later of (1) December 31, 2009, or (2) when the city council determines
that sufficient funds have been received from the taxes to finance the first $71,500,000
of capital expenditures and bonds for the projects authorized in subdivision 3, including
the amount to prepay or retire at maturity the principal, interest, and premium due on any
bonds issued for the projects under subdivision 4, unless the taxes are extended as allowed
in paragraph (b). Any funds remaining after completion of the project and retirement or
redemption of the bonds shall also be used to fund the projects under subdivision 3. The
taxes imposed under subdivisions 1 and 2 may expire at an earlier time if the city so
determines by ordinance.
(b) Notwithstanding Minnesota Statutes, sections
other contrary provision of law, ordinance, or city charter, the city of Rochester may, by
ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009,
if approved by the voters of the city at a special election in 2005 or the general election in
2006. The question put to the voters must indicate that an affirmative vote would allow
up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000
of bonds to be issued above the amount authorized in the June 23, 1998, referendum for
the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are
extended under this paragraph, the taxes expire when the city council determines that
sufficient funds have been received from the taxes to finance the projects and to prepay
or retire at maturity the principal, interest, and premium due on any bonds issued for the
projects under subdivision 4. Any funds remaining after completion of the project and
retirement or redemption of the bonds may be placed in the general fund of the city.
(c) Notwithstanding Minnesota Statutes, sections
other contrary provision of law, ordinance, or city charter, the city of Rochester may, by
ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond the date the city
council determines that sufficient funds have been received from the taxes to finance
$111,500,000 of expenditures and bonds for the projects authorized in subdivision 3,
paragraph (a), plus an amount equal to the costs of issuance of the bonds and including
the amount to prepay or retire at maturity the principal, interest, and premiums due on
any bonds issued for the projects under subdivision 4, paragraph (a), if approved by the
voters of the city at the general election in 2012. If the election to authorize the additional
$139,500,000 of bonds plus an amount equal to the costs of the issuance of the bonds is
placed on the general election ballot in 2012, the city may continue to collect the taxes
authorized in subdivisions 1 and 2 until December 31, 2012. The question put to the
voters must indicate that an affirmative vote would allow sales tax revenues be raised for
an extended period of time and an additional $139,500,000 of bonds plus an amount
equal to the costs of issuance of the bonds, to be issued above the amount authorized in
the previous elections required under paragraphs (a) and (b) for the projects and amounts
specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended
under this paragraph, the taxes expire when the city council determines that $139,500,000
has been received from the taxes to finance the projects plus an amount sufficient to
prepay or retire at maturity the principal, interest, and premium due on any bonds issued
for the projects under subdivision 4, including any bonds issued to refund the bonds. Any
funds remaining after completion of the projects and retirement or redemption of the
bonds may be placed in the general fund of the city.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Rochester with Minnesota Statutes, section 645.021.
Sec. 8. Laws 2008, chapter 366, article 7, section 19, subdivision 3, is amended to read:
Subd. 3. Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99,
subdivision 3, paragraph (b), the proceeds of the tax imposed under this section shall be
used to pay for the costs of acquisition, construction, improvement, and development of
as described in the city improvement plan adopted by the city council by resolution on
December 12, 2006, and land and buildings for a community and recreation center. The
total amount of revenues from the taxes in subdivisions 1 and 2 that may be used to fund
these projects is $12,000,000 plus any associated bond costs.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Clearwater with Minnesota Statutes, section 645.021.
Sec. 9. Laws 2010, chapter 389, article 5, section 6, subdivision 1, is amended to read:
Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
charter, the city of Marshall, if imposed within
enactment of this section, may impose any or all of the taxes described in this section.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 10. CITY OF CLOQUET; TAXES AUTHORIZED.
Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
297A.99, subdivision 1, 477A.016, or any other provision of law, ordinance, or city
charter, if approved by the voters pursuant to Minnesota Statutes, section 297A.99, the
city of Cloquet may impose by ordinance a sales and use tax of up to one-half of one
percent for the purposes specified in subdivision 3. Except as provided in this section, the
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.
Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
297A.99, subdivision 1, 477A.016, or any other provision of law, ordinance, or city
charter, the city of Cloquet may impose by ordinance, for the purposes specified in
subdivision 3, an excise tax of up to $20 per motor vehicle, as defined by ordinance,
purchased or acquired from any person engaged within the city in the business of selling
motor vehicles at retail.
Subd. 3. Use of revenues. Revenues received from taxes authorized by subdivisions
1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for the
following projects:
(1) $4,500,000 for construction and completion of park improvement projects,
including St. Louis River riverfront improvements; Veteran's Park construction and
improvements; improvements to the Hilltop Park soccer complex and Braun Park baseball
complex; capital equipment and building and grounds improvements at the Pine Valley
Park/Pine Valley Hockey Arena/Cloquet Area Recreation Center; and development of
pedestrian trails within the city;
(2) $5,800,00 for extension of utilities and the construction of all improvements
associated with the development of property adjacent to Highway 33 and Interstate
Highway 35, including payment of all debt service on bonds issued for these; and
(3) $6,200,000 for engineering and construction of infrastructure improvements,
including, but not limited to, storm sewer, sanitary sewer, and water in areas identified as
part of the city's comprehensive land use plan.
Authorized expenses include, but are not limited to, acquiring property and paying
construction expenses related to these improvements, and paying debt service on bonds or
other obligations issued to finance acquisition and construction of these improvements.
Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota
Statutes, chapter 475, to pay capital and administrative expenses for the improvements
described in subdivision 3 in an amount that does not exceed $16,500,000. An election to
approve the bonds under Minnesota Statutes, section 475.58, is not required.
(b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes,
sections 275.60 and 275.61.
(c) The debt represented by the bonds is not included in computing any debt
limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
475.61, to pay principal of and interest on the bonds is not subject to any levy limitation.
Subd. 5. Termination of taxes. The taxes imposed under subdivisions 1 and 2
expire at the earlier of (1) 30 years, or (2) when the city council determines that the amount
of revenues received from the taxes to finance the improvements described in subdivision
3 first equals or exceeds $16,500,000, plus the additional amount needed to pay the costs
related to issuance of bonds under subdivision 4, including interest on the bonds. Any
funds remaining after completion of the project and retirement or redemption of the bonds
may be placed in the general fund of the city. The taxes imposed under subdivisions 1 and
2 may expire at an earlier time if the city so determines by ordinance.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Cloquet and its chief clerical officer timely comply with Minnesota Statutes,
section 645.021.
Sec. 11. CITY OF FERGUS FALLS; SALES AND USE TAX AUTHORIZED.
Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
297A.99, subdivision 1, or 477A.016, or any other provision of law, ordinance, or city
charter, as approved by the voters at the November 2, 2010 general election, the city
of Fergus Falls may impose by ordinance a sales and use tax of up to one-half of one
percent for the purposes specified in subdivision 2. Except as provided in this section, the
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.
Subd. 2. Use of revenues. Revenues received from taxes authorized by subdivision
1 must be used by the city of Fergus Falls to pay the cost of collecting the tax and to pay for
all or part of the costs of the acquisition and betterment of a regional community ice arena
facility. Authorized expenses include, but are not limited to, acquiring property, predesign,
design, and paying construction, furnishing, and equipment costs related to the facility and
paying debt service on bonds or other obligations issued by the Fergus Falls Port Authority
to finance the facility. The amount of revenues from the tax imposed under subdivision 1
that may be used to finance the facility and any associated costs is limited to $6,600,000.
Subd. 3. Termination of taxes. The tax imposed under this section expires when
the Fergus Falls City Council determines that sufficient funds have been received from
the taxes to finance the facility and to prepay or retire at maturity the principal, interest,
and premium due on any bonds, including refunding bonds, issued by the Fergus Falls
Port Authority for the facility. Any funds remaining after completion of the facility and
retirement or redemption of the bonds may be placed in the general fund of the city of
Fergus Falls. The tax imposed under subdivision 1 may expire at an earlier time if the
city so determines by ordinance.
EFFECTIVE DATE.This section is effective the day after the governing body
of the city of Fergus Falls and its chief clerical officer timely comply with Minnesota
Statutes, section 645.021.
Sec. 12. CITY OF HUTCHINSON; TAXES AUTHORIZED.
Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, as approved by
the voters at a referendum held at the 2010 general election, the city of Hutchinson
may impose by ordinance a sales and use tax of up to one-half of one percent for the
purposes specified in subdivision 3. Except as otherwise provided in this section,
Minnesota Statutes, section 297A.99, governs the imposition, administration, collection,
and enforcement of the tax authorized under this subdivision. Minnesota Statutes, section
297A.99, subdivision 1, paragraph (d), does not apply to this section.
Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, the city of Hutchinson
may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up
to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person
engaged within the city in the business of selling motor vehicles at retail.
Subd. 3. Use of revenues. Revenues received from the taxes authorized by this
section must be used to pay the cost of collecting and administering the tax and to finance
the costs of constructing the water treatment facility and renovating the wastewater
treatment facility in the city of Hutchinson. Authorized costs include, but are not limited
to, construction and engineering costs of the projects and associated bond costs.
Subd. 4. Termination of tax. The taxes authorized under subdivisions 1 and 2
terminate at the earlier of: (1) 18 years after the date of initial imposition of the tax; or
(2) when the Hutchinson City Council determines that the amount of revenues raised is
sufficient to pay for the projects under subdivision 3, plus the amount needed to finance
the capital and administrative costs for the projects specified in subdivision 3, and to repay
or retire at maturity the principal, interest, and premium due on any bonds issued for the
projects. Any funds remaining after completion of the projects specified in subdivision
3 and retirement or redemption of the associated bonds may be placed in the general
fund of the city. The taxes imposed under subdivisions 1 and 2 may expire at an earlier
time if the city so determines by ordinance.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Hutchinson with Minnesota Statutes, section 645.021.
Sec. 13. CITY OF LANESBORO; SALES AND USE TAX AUTHORIZED.
Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
sections 297A.99, subdivision 1, and 477A.016, or any other provision of law, ordinance,
or city charter, as approved by the voters at the November 2, 2010, general election, the
city of Lanesboro may impose by ordinance a sales and use tax of up to one-half of one
percent for the purposes specified in subdivision 2. Except as provided in this section,
the provisions of Minnesota Statutes, section 297A.99, govern the imposition of the tax
authorized under this subdivision.
Subd. 2. Use of revenues. Revenues received from the tax authorized under
subdivision 1 must be used by the city of Lanesboro to pay the costs of collecting the tax
and to pay for all or a part of the improvements to city streets and utility systems, and the
betterment of city municipal buildings consisting of (i) street and utility improvements to
Calhoun Avenue, Fillmore Avenue, Kenilworth Avenue, Pleasant Street, Kirkwood Street,
Auburn Avenue, and Zenith Street, and street light replacement on State Highways 250
and 16; (ii) improvements to utility systems consisting of wastewater treatment facility
improvements and electric utility improvements to the Lanesboro High Hazard Dam; and
(iii) improvements to the Lanesboro community center, library, and city hall, including
paying debt service on bonds or other obligations issued to fund these projects under
subdivision 3. The total amount of revenues from the taxes in subdivision 1 that may be
used to fund these projects is $800,000 plus any associated bond costs.
Subd. 3. Bonding authority. The city of Lanesboro may issue bonds under
Minnesota Statutes, chapter 475, to pay capital and administrative expenses related to the
projects authorized in subdivision 2. An election to approve the bonds under Minnesota
Statutes, section 475.58, is not required. The issuance of bonds under this subdivision
is not subject to Minnesota Statutes, sections 275.60 and 275.61. The bonds are not
included in computing any debt limitation applicable to the city and the levy of taxes
under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is
not subject to any levy limitation.
The aggregate principal amount of the bonds plus the aggregate of the taxes used
directly to pay costs of the projects listed in subdivision 2 may not exceed $800,000, plus
an amount equal to the costs related to issuance of the bonds and capitalized interest.
The taxes authorized in subdivision 1 may be pledged and used for payments of
the bonds and bonds issued to refund them, only if the bonds and any refunding bonds
are general obligations of the city.
Subd. 4. Termination of tax. The tax imposed under subdivision 1 expires when
the Lanesboro City Council determines that sufficient funds have been raised from the
taxes to finance the projects authorized under subdivision 2 and to prepay or retire at
maturity the principal, interest, and premium due on any bonds issued under subdivision 3.
Any funds remaining after completion of the project and retirement or redemption of the
bonds may be placed in the general fund of the city. The tax imposed under subdivision 1
may expire at an earlier time if the city so determines by ordinance.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Lanesboro and its chief clerical officer comply with Minnesota Statutes, section
645.021.
Sec. 14. CITY OF MARSHALL; SALES AND USE TAX.
Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
297A.99, subdivisions 1 and 2, or 477A.016, or any other law, ordinance, or city charter,
the city of Marshall, if approved by the voters at a general election held within two
years of the date of final enactment of this section, may impose the tax authorized under
subdivision 2. Two separate ballot questions must be presented to the voters, one for each
of the two facility projects named in subdivision 3.
Subd. 2. Sales and use tax authorized. The city of Marshall may impose by
ordinance a sales and use tax of up to one-half of one percent for the purposes specified in
subdivision 3. The provisions of Minnesota Statutes, section 297A.99, except subdivisions
1 and 2, govern the imposition, administration, collection, and enforcement of the tax
authorized under this subdivision.
Subd. 3. Use of sales and use tax revenues. The revenues derived from the tax
authorized under subdivision 2 must be used by the city of Marshall to pay the costs of
collecting and administering the sales and use tax and to pay all or part of the costs of the
new and existing facilities of the Minnesota Emergency Response and Industry Training
Center and all or part of the costs of the new facilities of the Southwest Minnesota
Regional Amateur Sports Center. Authorized expenses include, but are not limited to,
acquiring property, predesign, design, and paying construction, furnishing, and equipment
costs related to these facilities and paying debt service on bonds or other obligations issued
by the city of Marshall under subdivision 4 to finance the capital costs of these facilities.
Subd. 4. Bonds. (a) If the imposition of a sales and use tax is approved by the voters,
the city of Marshall may issue bonds under Minnesota Statutes, chapter 475, to finance all
or a portion of the costs of the facilities authorized in subdivision 3, and may issue bonds
to refund bonds previously issued. The aggregate principal amount of bonds issued under
this subdivision may not exceed $17,290,000, plus an amount to be applied to the payment
of the costs of issuing the bonds. The bonds may be paid from or secured by any funds
available to the city of Marshall, including the tax authorized under subdivision 2.
(b) The bonds are not included in computing any debt limitation applicable to the
city of Marshall, and any levy of taxes under Minnesota Statutes, section 475.61, to pay
principal and interest on the bonds, is not subject to any levy limitation. A separate
election to approve the bonds under Minnesota Statutes, section 475.58, is not required.
Subd. 5. Termination of taxes. The tax imposed under subdivision 2 expires at the
earlier of (1) 15 years after the tax is first imposed, or (2) when the city council determines
that the amount of revenues received from the tax to pay for the capital and administrative
costs of the facilities under subdivision 3 first equals or exceeds the amount authorized to
be spent for the facilities plus the additional amount needed to pay the costs related to
issuance of the bonds under subdivision 4, including interest on the bonds. Any funds
remaining after payment of all such costs and retirement or redemption of the bonds shall
be placed in the general fund of the city. The tax imposed under subdivision 2 may expire
at an earlier time if the city so determines by ordinance.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Marshall with Minnesota Statutes, section 645.021.
Sec. 15. CITY OF MEDFORD; SALES AND USE TAX.
Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
sections 297A.99, subdivision 1, and 477A.016, or any other provision of law, ordinance,
or city charter, if approved by the voters pursuant to Minnesota Statutes, section 297A.99,
at the next general election, the city of Medford may impose by ordinance a sales and use
tax of one-half of one percent for the purposes specified in subdivision 2. Except as
otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99,
govern the imposition, administration, collection, and enforcement of the tax authorized
under this subdivision.
Subd. 2. Use of revenues. The proceeds of the tax imposed under this section must
be used by the city of Medford to pay the costs of collecting and administering the tax
and to repay loans received from the Minnesota Public Facilities Authority since 2007
that were used to finance $4,200,000 of improvements to the city's water and wastewater
systems.
Subd. 3. Termination of taxes. The tax imposed under this section expires at the
earlier of (1) 20 years after the date the taxes are first imposed, or (2) when the Medford
City Council determines that the amount of revenues received from the tax equals or
exceeds the sum of loans made to the city by the Minnesota Public Facilities Authority
as described in subdivision 2, including interest on the loans. Any funds remaining
after completion of the repayment of the loans may be placed in the general fund of the
city. The tax imposed under subdivision 1 may expire at an earlier time if the city so
determines by ordinance.
EFFECTIVE DATE.This section is effective the day after compliance by the
governing body of the city of Medford with Minnesota Statutes, section 645.021.
ARTICLE 5
PROPERTY TAXES
Section 1. Minnesota Statutes 2010, section 126C.01, subdivision 3, is amended to read:
Subd. 3. Referendum market value. "Referendum market value" means the market
value of all taxable property, excluding property classified as class 2,
of the house, garage, and surrounding one acre of land of an agricultural homestead is
included in referendum market value. Any class of property, or any portion of a class of
property, that is included in the definition of referendum market value and that has a class
rate of less than one percent under section
equal to its net tax capacity multiplied by 100.
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 2. Minnesota Statutes 2010, section 270C.991, subdivision 4, is amended to read:
Subd. 4. Property tax working group. (a) A property tax working group is
established as provided in this subdivision. The goals of the working group are:
(1) to investigate ways to simplify the property tax system and make advisory
recommendations on ways to make the system more understandable;
(2) to reexamine the property tax calendar to determine what changes could be made
to shorten the two-year cycle from assessment through property tax collection; and
(3) to determine the cost versus the benefits of the various property tax components,
including property classifications, credits, aids, exclusions, exemptions, and abatements,
and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
(b) The
(1) two state representatives, both appointed by the chair of the house of
representatives Taxes Committee, one from the majority party and one from the largest
minority party;
(2) two senators appointed by the Subcommittee on Committees of the Senate Rules
and Administration Committee, one from the majority party and one from the largest
minority party;
of age or older, both appointed by the commissioner of revenue; and
Minnesota Farmers Union.
The commissioner of revenue shall chair the initial meeting, and the working
group shall elect a chair at that initial meeting. The working group will meet at the call
of the chair. Members of the working group shall serve without compensation. The
commissioner of revenue must provide administrative support to the working group.
Chapter 13D does not apply to meetings of the working group. Meetings of the working
group must be open to the public and the working group must provide notice of a meeting
to potentially interested persons at least seven days before the meeting. A meeting of the
council occurs when a quorum is present.
(c) The working group shall make its advisory recommendations to the chairs of
the house of representatives and senate Taxes Committees on or before February 1,
2013, at which time the working group shall be finished and this subdivision expires.
The advisory recommendations should be reviewed by the Taxes Committee under
subdivision 5.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 3. Minnesota Statutes 2010, section 272.02, subdivision 39, is amended to read:
Subd. 39. Economic development; public purpose. The holding of property by a
political subdivision of the state for later resale for economic development purposes shall
be considered a public purpose in accordance with subdivision 8 for a period not to exceed
is located outside of the metropolitan area as defined in section
period must not exceed 15 years.
The holding of property by a political subdivision of the state for later resale (1)
which is purchased or held for housing purposes, or (2) which meets the conditions
described in section
accordance with subdivision 8.
The governing body of the political subdivision which acquires property which is
subject to this subdivision shall after the purchase of the property certify to the city or
county assessor whether the property is held for economic development purposes or
housing purposes, or whether it meets the conditions of section
If the property is acquired for economic development purposes and buildings or other
improvements are constructed after acquisition of the property, and if more than one-half
of the floor space of the buildings or improvements which is available for lease to or use
by a private individual, corporation, or other entity is leased to or otherwise used by
a private individual, corporation, or other entity the provisions of this subdivision shall
not apply to the property. This subdivision shall not create an exemption from section
law providing for the taxation of or for payments in lieu of taxes for publicly held property
which is leased, loaned, or otherwise made available and used by a private person.
EFFECTIVE DATE.This section is effective for taxes levied in 2011, payable
in 2012, and thereafter.
Sec. 4. Minnesota Statutes 2010, section 272.02, is amended by adding a subdivision
to read:
Subd. 96. Electric generation facility; personal property. (a) Notwithstanding
subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and other
personal property that is part of a multiple reciprocating engine electric generation facility
that adds more than 20 and less than 30 megawatts of installed capacity at a site where
there is presently more than ten megawatts and fewer than 15 megawatts of installed
capacity and that meets the requirements of this subdivision is exempt from taxation and
from payments in lieu of taxation. At the time of construction, the facility must:
(1) be designed to utilize natural gas as a primary fuel;
(2) be owned and operated by a municipal power agency as defined in section
453.52, subdivision 8;
(3) be located within one mile of an existing natural gas pipeline;
(4) be designed to have black start capability and to furnish emergency backup
power service to the city in which it is located;
(5) satisfy a resource deficiency identified in an approved integrated resource plan
filed under section 216B.2422; and
(6) have received, by resolution, the approval of the governing bodies of the city
and county in which it is located for the exemption of personal property provided by
this subdivision.
(b) Construction of the facility must be commenced after December 31, 2011, and
before January 1, 2015. Property eligible for this exemption does not include (i) electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility; or (ii) property located on the site on the enactment date
of this subdivision.
EFFECTIVE DATE.This section is effective for assessments in 2012, taxes
payable in 2013, and thereafter.
Sec. 5. Minnesota Statutes 2010, section 273.121, subdivision 1, is amended to read:
Subdivision 1. Notice. Any county assessor or city assessor having the powers of a
county assessor, valuing or classifying taxable real property shall in each year notify those
persons whose property is to be included on the assessment roll that year if the person's
address is known to the assessor, otherwise the occupant of the property. The notice shall
be in writing and shall be sent by ordinary mail at least ten days before the meeting of
the local board of appeal and equalization under section
established under section
property, the assessor may send the notice in electronic form or by electronic mail instead
of on paper or by ordinary mail. It shall contain: (1) the market value for the current and
prior assessment, (2)
section
to taxation after subtracting the amount of any qualifying improvements for the current
assessment,
meetings of the local board of appeal and equalization, the review process established
under section
the classification of the property has changed between the current and prior assessments, a
specific note to that effect shall be prominently listed on the statement. The commissioner
of revenue shall specify the form of the notice. The assessor shall attach to the assessment
roll a statement that the notices required by this section have been mailed. Any assessor
who is not provided sufficient funds from the assessor's governing body to provide such
notices, may make application to the commissioner of revenue to finance such notices.
The commissioner of revenue shall conduct an investigation and, if satisfied that the
assessor does not have the necessary funds, issue a certification to the commissioner
of management and budget of the amount necessary to provide such notices. The
commissioner of management and budget shall issue a warrant for such amount and shall
deduct such amount from any state payment to such county or municipality. The necessary
funds to make such payments are hereby appropriated. Failure to receive the notice shall in
no way affect the validity of the assessment, the resulting tax, the procedures of any board
of review or equalization, or the enforcement of delinquent taxes by statutory means.
EFFECTIVE DATE.This section is effective for notifications for taxes payable in
2013 and thereafter.
Sec. 6. Minnesota Statutes 2010, section 273.13, subdivision 23, as amended by Laws
2011, chapter 112, article 11, section 8, is amended to read:
Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural
land that is homesteaded, along with any class 2b rural vacant land that is contiguous to
the class 2a land under the same ownership. The market value of the house and garage
and immediately surrounding one acre of land has the same class rates as class 1a or 1b
property under subdivision 22. The value of the remaining land including improvements
up to the first tier valuation limit of agricultural homestead property has a net class rate
of 0.5 percent of market value. The remaining property over the first tier has a class rate
of one percent of market value. For purposes of this subdivision, the "first tier valuation
limit of agricultural homestead property" and "first tier" means the limit certified under
section
(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
are agricultural land and buildings. Class 2a property has a net class rate of one percent of
market value, unless it is part of an agricultural homestead under paragraph (a). Class
2a property must also include any property that would otherwise be classified as 2b,
but is interspersed with class 2a property, including but not limited to sloughs, wooded
wind shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback
requirement, and other similar land that is impractical for the assessor to value separately
from the rest of the property or that is unlikely to be able to be sold separately from
the rest of the property.
An assessor may classify the part of a parcel described in this subdivision that is used
for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
(c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
that are unplatted real estate, rural in character and not used for agricultural purposes,
including land used for growing trees for timber, lumber, and wood and wood products,
that is not improved with a structure. The presence of a minor, ancillary nonresidential
structure as defined by the commissioner of revenue does not disqualify the property from
classification under this paragraph. Any parcel of 20 acres or more improved with a
structure that is not a minor, ancillary nonresidential structure must be split-classified, and
ten acres must be assigned to the split parcel containing the structure. Class 2b property
has a net class rate of one percent of market value unless it is part of an agricultural
homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920
acres statewide per taxpayer that is being managed under a forest management plan that
meets the requirements of chapter 290C, but is not enrolled in the sustainable forest
resource management incentive program. It has a class rate of .65 percent, provided that
the owner of the property must apply to the assessor in order for the property to initially
qualify for the reduced rate and provide the information required by the assessor to verify
that the property qualifies for the reduced rate. If the assessor receives the application
and information before May 1 in an assessment year, the property qualifies beginning
with that assessment year. If the assessor receives the application and information after
April 30 in an assessment year, the property may not qualify until the next assessment
year. The commissioner of natural resources must concur that the land is qualified. The
commissioner of natural resources shall annually provide county assessors verification
information on a timely basis. The presence of a minor, ancillary nonresidential structure
as defined by the commissioner of revenue does not disqualify the property from
classification under this paragraph.
(e) Agricultural land as used in this section means contiguous acreage of ten
acres or more, used during the preceding year for agricultural purposes. "Agricultural
purposes" as used in this section means the raising, cultivation, drying, or storage of
agricultural products for sale, or the storage of machinery or equipment used in support
of agricultural production by the same farm entity. For a property to be classified as
agricultural based only on the drying or storage of agricultural products, the products
being dried or stored must have been produced by the same farm entity as the entity
operating the drying or storage facility. "Agricultural purposes" also includes enrollment
in the Reinvest in Minnesota program under sections
Conservation Reserve Program as contained in Public Law 99-198 or a similar state
or federal conservation program if the property was classified as agricultural (i) under
this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment.
Agricultural classification shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same ownership.
(f) Real estate of less than ten acres, which is exclusively or intensively used for
raising or cultivating agricultural products, shall be considered as agricultural land. To
qualify under this paragraph, property that includes a residential structure must be used
intensively for one of the following purposes:
(i) for drying or storage of grain or storage of machinery or equipment used to
support agricultural activities on other parcels of property operated by the same farming
entity;
(ii) as a nursery, provided that only those acres used to produce nursery stock are
considered agricultural land;
(iii) for livestock or poultry confinement, provided that land that is used only for
pasturing and grazing does not qualify; or
(iv) for market farming; for purposes of this paragraph, "market farming" means the
cultivation of one or more fruits or vegetables or production of animal or other agricultural
products for sale to local markets by the farmer or an organization with which the farmer
is affiliated.
(g) Land shall be classified as agricultural even if all or a portion of the agricultural
use of that property is the leasing to, or use by another person for agricultural purposes.
Classification under this subdivision is not determinative for qualifying under
section
(h) The property classification under this section supersedes, for property tax
purposes only, any locally administered agricultural policies or land use restrictions that
define minimum or maximum farm acreage.
(i) The term "agricultural products" as used in this subdivision includes production
for sale of:
(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
bees, and apiary products by the owner;
(2) fish bred for sale and consumption if the fish breeding occurs on land zoned
for agricultural use;
(3) the commercial boarding of horses, which may include related horse training and
riding instruction, if the boarding is done on property that is also used for raising pasture
to graze horses or raising or cultivating other agricultural products as defined in clause (1);
(4) property which is owned and operated by nonprofit organizations used for
equestrian activities, excluding racing;
(5) game birds and waterfowl bred and raised (i) on a game farm licensed under
section
Resources, which must be submitted annually by March 30 to the assessor,
breeding stock on the property during the preceding year and that the owner provides a
copy of the owner's most recent schedule F; or (ii) for use on a shooting preserve licensed
under section
(6) insects primarily bred to be used as food for animals;
(7) trees, grown for sale as a crop, including short rotation woody crops, and not
sold for timber, lumber, wood, or wood products; and
(8) maple syrup taken from trees grown by a person licensed by the Minnesota
Department of Agriculture under chapter 28A as a food processor.
(j) If a parcel used for agricultural purposes is also used for commercial or industrial
purposes, including but not limited to:
(1) wholesale and retail sales;
(2) processing of raw agricultural products or other goods;
(3) warehousing or storage of processed goods; and
(4) office facilities for the support of the activities enumerated in clauses (1), (2),
and (3),
the assessor shall classify the part of the parcel used for agricultural purposes as class
1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural products for first sale is
considered an agricultural purpose. A greenhouse or other building where horticultural
or nursery products are grown that is also used for the conduct of retail sales must be
classified as agricultural if it is primarily used for the growing of horticultural or nursery
products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
those products. Use of a greenhouse or building only for the display of already grown
horticultural or nursery products does not qualify as an agricultural purpose.
(k) The assessor shall determine and list separately on the records the market value
of the homestead dwelling and the one acre of land on which that dwelling is located. If
any farm buildings or structures are located on this homesteaded acre of land, their market
value shall not be included in this separate determination.
(l) Class 2d airport landing area consists of a landing area or public access area of
a privately owned public use airport. It has a class rate of one percent of market value.
To qualify for classification under this paragraph, a privately owned public use airport
must be licensed as a public airport under section
"landing area" means that part of a privately owned public use airport properly cleared,
regularly maintained, and made available to the public for use by aircraft and includes
runways, taxiways, aprons, and sites upon which are situated landing or navigational aids.
A landing area also includes land underlying both the primary surface and the approach
surfaces that comply with all of the following:
(i) the land is properly cleared and regularly maintained for the primary purposes of
the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
(ii) the land is part of the airport property; and
(iii) the land is not used for commercial or residential purposes.
The land contained in a landing area under this paragraph must be described and certified
by the commissioner of transportation. The certification is effective until it is modified,
or until the airport or landing area no longer meets the requirements of this paragraph.
For purposes of this paragraph, "public access area" means property used as an aircraft
parking ramp, apron, or storage hangar, or an arrival and departure building in connection
with the airport.
(m) Class 2e consists of land with a commercial aggregate deposit that is not actively
being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
located in a county that has elected to opt-out of the aggregate preservation program as
provided in section
value. To qualify for classification under this paragraph, the property must be at least
ten contiguous acres in size and the owner of the property must record with the county
recorder of the county in which the property is located an affidavit containing:
(1) a legal description of the property;
(2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;
(3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and
(4) documentation that a permit has been issued by the local unit of government
or the mining activity is allowed under local ordinance. The disclosure must include a
statement from a registered professional geologist, engineer, or soil scientist delineating
the deposit and certifying that it is a commercial aggregate deposit.
For purposes of this section and section
means a deposit that will yield crushed stone or sand and gravel that is suitable for use
as a construction aggregate; and "actively mined" means the removal of top soil and
overburden in preparation for excavation or excavation of a commercial deposit.
(n) When any portion of the property under this subdivision or subdivision 22 begins
to be actively mined, the owner must file a supplemental affidavit within 60 days from
the day any aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively being mined must be (1) valued and classified
under subdivision 24 in the next subsequent assessment year, and (2) removed from the
aggregate resource preservation property tax program under section
land was enrolled in that program. Copies of the original affidavit and all supplemental
affidavits must be filed with the county assessor, the local zoning administrator, and the
Department of Natural Resources, Division of Land and Minerals. A supplemental
affidavit must be filed each time a subsequent portion of the property is actively mined,
provided that the minimum acreage change is five acres, even if the actual mining activity
constitutes less than five acres.
(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
in section
EFFECTIVE DATE.This section is effective for property taxes payable in 2012
and thereafter.
Sec. 7. Minnesota Statutes 2010, section 273.13, subdivision 25, is amended to read:
Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
units and used or held for use by the owner or by the tenants or lessees of the owner
as a residence for rental periods of 30 days or more, excluding property qualifying for
class 4d. Class 4a also includes hospitals licensed under sections
than hospitals exempt under section
purposes, without regard to whether the property has been platted or subdivided. The
market value of class 4a property has a class rate of 1.25 percent.
(b) Class 4b includes:
(1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;
(2) manufactured homes not classified under any other provision;
(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
farm classified under subdivision 23, paragraph (b) containing two or three units; and
(4) unimproved property that is classified residential as determined under subdivision
33.
The market value of class 4b property has a class rate of 1.25 percent.
(c) Class 4bb includes:
(1) nonhomestead residential real estate containing one unit, other than seasonal
residential recreational property; and
(2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b).
Class 4bb property has the same class rates as class 1a property under subdivision 22.
Property that has been classified as seasonal residential recreational property at
any time during which it has been owned by the current owner or spouse of the current
owner does not qualify for class 4bb.
(d) Class 4c property includes:
(1) except as provided in subdivision 22, paragraph (c), real and personal property
devoted to commercial temporary and seasonal residential occupancy for recreation
purposes,
not more than 250 days in the year preceding the year of assessment. For purposes of this
clause, property is devoted to a commercial purpose on a specific day if any portion of the
property is used for residential occupancy, and a fee is charged for residential occupancy.
Class 4c property under this clause must contain three or more rental units. A "rental unit"
is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site
equipped with water and electrical hookups for recreational vehicles.
offered for rent by a property that otherwise qualifies for class 4c under this clause is also
class 4c under this clause regardless of the term of the rental agreement, as long as the use
of the camping pad does not exceed 250 days. In order for a property to be classified
(i) the business located on the property must provide recreational activities, at least 40
percent of the annual gross lodging receipts related to the property must be from business
conducted during 90 consecutive days, and either
bookings by lodging guests during the year must be for periods of at least two consecutive
nights; or
for
20 or fewer rental units, and must be located in a township or a city with a population of
2,500 or less located outside the metropolitan area, as defined under section 473.121,
subdivision 2, that contains a portion of a state trail administered by the Department of
Natural Resources. For purposes of
five or more nights shall be counted as two bookings. Class 4c property
purposes in conjunction with other class 4c property classified under this clause and
devoted to temporary and seasonal residential occupancy for recreational purposes, up to a
total of two acres, provided the property is not devoted to commercial recreational use for
more than 250 days in the year preceding the year of assessment and is located within two
miles of the class 4c property with which it is used.
property to qualify for classification under this clause, the owner must submit a declaration
to the assessor designating the cabins or units occupied for 250 days or less in the year
preceding the year of assessment by January 15 of the assessment year. Those cabins or
units and a proportionate share of the land on which they are located must be designated
class 4c under this clause as otherwise provided. The remainder of the cabins or units and
a proportionate share of the land on which they are located will be designated as class 3a.
The owner of property desiring designation as class 4c property under this clause must
provide guest registers or other records demonstrating that the units for which class 4c
designation is sought were not occupied for more than 250 days in the year preceding the
assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar,
(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility
operated on a commercial basis not directly related to temporary and seasonal residential
occupancy for recreation purposes does not qualify for class 4c. For the purposes of this
paragraph, "recreational activities" means renting ice fishing houses, boats and motors,
snowmobiles, downhill or cross-country ski equipment; providing marina services, launch
services, or guide services; or selling bait and fishing tackle;
(2) qualified property used as a golf course if:
(i) it is open to the public on a daily fee basis. It may charge membership fees or
dues, but a membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically charged by
municipal courses; and
(ii) it meets the requirements of section
A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
with the golf course is classified as class 3a property;
(3) real property up to a maximum of three acres of land owned and used by a
nonprofit community service oriented organization and not used for residential purposes
on either a temporary or permanent basis, provided that:
(i) the property is not used for a revenue-producing activity for more than six days
in the calendar year preceding the year of assessment; or
(ii) the organization makes annual charitable contributions and donations at least
equal to the property's previous year's property taxes and the property is allowed to be
used for public and community meetings or events for no charge, as appropriate to the
size of the facility.
For purposes of this clause,
(A) "charitable contributions and donations" has the same meaning as lawful
gambling purposes under section
relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
(B) "property taxes" excludes the state general tax;
(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
Revenue Code; and
(D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.
Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use
of the property for social events open exclusively to members and their guests for periods
of less than 24 hours, when an admission is not charged nor any revenues are received by
the organization shall not be considered a revenue-producing activity.
The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the
requirement under item (ii) must file an application by May 1 with the assessor for
eligibility for the current year's assessment. The commissioner shall prescribe a uniform
application form and instructions;
(4) postsecondary student housing of not more than one acre of land that is owned by
a nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;
(5) (i) manufactured home parks as defined in section
excluding manufactured home parks described in section
manufactured home parks as defined in section
section
(6) real property that is actively and exclusively devoted to indoor fitness, health,
social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
and is located within the metropolitan area as defined in section
(7) a leased or privately owned noncommercial aircraft storage hangar not exempt
under section
(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and
(ii) the land lease, or any ordinance or signed agreement restricting the use of the
leased premise, prohibits commercial activity performed at the hangar.
If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
be filed by the new owner with the assessor of the county where the property is located
within 60 days of the sale;
(8) a privately owned noncommercial aircraft storage hangar not exempt under
section
(i) the land abuts a public airport; and
(ii) the owner of the aircraft storage hangar provides the assessor with a signed
agreement restricting the use of the premises, prohibiting commercial use or activity
performed at the hangar; and
(9) residential real estate, a portion of which is used by the owner for homestead
purposes, and that is also a place of lodging, if all of the following criteria are met:
(i) rooms are provided for rent to transient guests that generally stay for periods
of 14 or fewer days;
(ii) meals are provided to persons who rent rooms, the cost of which is incorporated
in the basic room rate;
(iii) meals are not provided to the general public except for special events on fewer
than seven days in the calendar year preceding the year of the assessment; and
(iv) the owner is the operator of the property.
The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22;
(10) real property up to a maximum of three acres and operated as a restaurant
as defined under section
as defined under section
is either devoted to commercial purposes for not more than 250 consecutive days, or
receives at least 60 percent of its annual gross receipts from business conducted during
four consecutive months. Gross receipts from the sale of alcoholic beverages must be
included in determining the property's qualification under subitem (B). The property's
primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
sales located on the premises must be excluded. Owners of real property desiring 4c
classification under this clause must submit an annual declaration to the assessor by
February 1 of the current assessment year, based on the property's relevant information for
the preceding assessment year;
(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
as a marina, as defined in section
the public and devoted to recreational use for marina services. The marina owner must
annually provide evidence to the assessor that it provides services, including lake or river
access to the public by means of an access ramp or other facility that is either located on
the property of the marina or at a publicly owned site that abuts the property of the marina.
No more than 800 feet of lakeshore may be included in this classification. Buildings used
in conjunction with a marina for marina services, including but not limited to buildings
used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
tackle, are classified as class 3a property; and
(12) real and personal property devoted to noncommercial temporary and seasonal
residential occupancy for recreation purposes.
Class 4c property has a class rate of 1.5 percent of market value, except that (i)
each parcel of noncommercial seasonal residential recreational property
manufactured home parks assessed under clause (5), item (i), have the same class rate
as class 4b property, and the market value of manufactured home parks assessed under
clause (5), item (ii), has the same class rate as class 4d property if more than 50 percent
of the lots in the park are occupied by shareholders in the cooperative corporation or
association and a class rate of one percent if 50 percent or less of the lots are so occupied,
(iii) commercial-use seasonal residential recreational property and marina recreational
land as described in clause (11), has a class rate of one percent for the first $500,000 of
market value, and 1.25 percent for the remaining market value, (iv) the market value of
property described in clause (4) has a class rate of one percent, (v) the market value of
property described in clauses (2), (6), and (10) has a class rate of 1.25 percent, and (vi)
that portion of the market value of property in clause (9) qualifying for class 4c property
has a class rate of 1.25 percent.
(e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section
of the units in the building qualify as low-income rental housing units as certified under
section
of units in the building qualify for class 4d. The remaining portion of the building shall be
classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units in the building.
For all properties qualifying as class 4d, the market value determined by the assessor must
be based on the normal approach to value using normal unrestricted rents.
Class 4d property has a class rate of 0.75 percent.
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 8. Minnesota Statutes 2010, section 273.13, subdivision 34, is amended to read:
Subd. 34. Homestead of disabled veteran or family caregiver. (a) All or a portion
of the market value of property owned by a veteran
as the veteran's
a service-connected disability of 70 percent or more as certified by the United States
Department of Veterans Affairs. To qualify for exclusion under this subdivision, the
veteran must have been honorably discharged from the United States armed forces, as
indicated by United States Government Form DD214 or other official military discharge
papers
(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is
excluded, except as provided in clause (2); and
(2) for a total (100 percent) and permanent disability, $300,000 of market value is
excluded.
(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
spouse holds the legal or beneficial title to the homestead and permanently resides there,
the exclusion shall carry over to the benefit of the veteran's spouse for
or until such time as the spouse remarries, or sells, transfers, or otherwise disposes of the
property, whichever comes first. Qualification under this paragraph requires an annual
application under paragraph (h).
(d) If the spouse of a member of any branch or unit of the United States armed
forces who dies due to a service-connected cause while serving honorably in active
service, as indicated on United States Government Form DD1300 or DD2064, holds
the legal or beneficial title to a homestead and permanently resides there, the spouse is
entitled to the benefit described in paragraph (b), clause (2), for five taxes payable years,
or until such time as the spouse remarries or sells, transfers, or otherwise disposes of the
property, whichever comes first.
(e) If a veteran meets the disability criteria of paragraph (a) but does not own
property classified as homestead in the state of Minnesota, then the homestead of the
veteran's primary family caregiver, if any, is eligible for the exclusion that the veteran
would otherwise qualify for under paragraph (b).
consisting of the house and garage and immediately surrounding one acre of land qualifies
for the valuation exclusion under this subdivision.
eligible for the
subdivision 35, or classification under subdivision 22, paragraph (b).
must apply to the assessor by July 1 of each assessment year, except that an annual
reapplication is not required once a property has been accepted for a valuation exclusion
under paragraph (a) and qualifies for the benefit described in paragraph (b), clause (2), and
the property continues to qualify until there is a change in ownership. For an application
received after July 1 of any calendar year, the exclusion shall become effective for the
following assessment year.
(i) A first-time application by a qualifying spouse for the market value exclusion
under paragraph (d) must be made any time within two years of the death of the service
member.
(j) For purposes of this subdivision:
(1) "active service" has the meaning given in section 190.05;
(2) "own" means that the person's name is present as an owner on the property deed;
(3) "primary family caregiver" means a person who is approved by the secretary of
the United States Department of Veterans Affairs for assistance as the primary provider
of personal care services for an eligible veteran under the Program of Comprehensive
Assistance for Family Caregivers, codified as United States Code, title 38, section 1720G;
and
(4) "veteran" has the meaning given the term in section 197.447.
(k) The purpose of this provision of law providing a level of homestead property tax
relief for gravely disabled veterans, their primary family caregivers, and their surviving
spouses is to help ease the burdens of war for those among our state's citizens who bear
those burdens most heavily.
EFFECTIVE DATE.(a) This section is effective for taxes payable in 2012 and
thereafter, and applies to homesteads that initially qualified for the exclusion for taxes
payable in 2009 and thereafter.
(b) Notwithstanding the deadline contained in paragraph (h), applications for a
market value exclusion under paragraph (c) must be received prior to August 16, 2011,
to be eligible for an exclusion for taxes payable in 2012.
(c) A qualifier under paragraph (c) that would have been eligible for a market value
exclusion under this section for taxes payable in 2011, if the change under this section had
been effective for that year, shall be eligible to receive the benefit of the exclusion for the
remaining number of total taxes payable years provided under paragraph (c).
Sec. 9. Minnesota Statutes 2010, section 275.025, subdivision 3, is amended to read:
Subd. 3. Seasonal residential recreational tax capacity. For the purposes of this
section, "seasonal residential recreational tax capacity" means the tax capacity of tier III
of class 1c under section
4c(12) property under section
market value of each noncommercial class
purpose equal to 40 percent of its tax capacity under section
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 10. [275.761] MAINTENANCE OF EFFORT REQUIREMENTS
REDUCED.
(a) Notwithstanding any law to the contrary and except as provided in paragraphs (b)
and (c), the amounts required to be expended under the maintenance of effort requirements
for counties under sections 134.34, 245.4835, 256F.10, and 256F.13, are reduced to 90
percent of the amounts required for 2011.
(b) This section does not permit a county to reduce compliance with maintenance of
effort requirements to the extent that the reduction would:
(1) require the state to expend additional money or incur additional costs; or
(2) cause a reduction in the receipt by the state or the county of federal funds.
(c) The commissioner of management and budget may determine the maintenance
of effort requirements that are not permitted, in whole or in part, to be reduced under
paragraph (b). The commissioner shall publish these determinations on the department's
Web site and no county may reduce compliance with a maintenance of effort requirement
that the commissioner determines is not subject to reduction.
(d) Notwithstanding any law to the contrary, the amounts required to be expended
under the maintenance of effort requirements for all statutory and home rule charter cities
under section 134.34 are reduced to 90 percent of the amounts required for 2011.
EFFECTIVE DATE.This section is effective for maintenance of effort
requirements in 2012 and thereafter.
Sec. 11. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by
Laws 1996, chapter 471, article 7, section 22, Laws 1997, chapter 231, article 10, section
13, Laws 2002, chapter 377, article 7, section 6, Laws 2008, chapter 154, article 9, section
19, and Laws 2010, chapter 216, section 46, is amended to read:
Subdivision 1. Creation of projects. (a) An authority may create a housing
replacement project under sections 44 to 47, as provided in this section.
(b) For the cities of Crystal, Fridley, Richfield, Columbia Heights, and Brooklyn
Park, the authority may designate up to 100 parcels in the city to be included in a housing
replacement district over the life of a district or districts. For the cities of St. Paul and
Duluth, each authority may designate not more than 200 parcels in the city to be included
in a housing replacement district over the life of the district. For the city of Minneapolis,
the authority may designate not more than 500 parcels in the city to be included in housing
replacement districts over the life of the districts. The authority may designate up to
200 additional parcels, on a onetime basis, within the area of the city of Minneapolis
designated by the Presidential declaration of major disaster FEMA-1990-DR. The only
parcels that may be included in a district are (1) vacant sites, (2) parcels containing vacant
houses, or (3) parcels containing houses that are structurally substandard, as defined in
Minnesota Statutes, section
(c) The city in which the authority is located must pay at least 25 percent of the
housing replacement project costs from its general fund, a property tax levy, or other
unrestricted money, not including tax increments.
(d) The housing replacement district plan must have as its sole object the acquisition
of parcels for the purpose of preparing the site to be sold for market rate housing. As
used in this section, "market rate housing" means housing that has a market value that
does not exceed 150 percent of the average market value of single-family housing in that
municipality.
EFFECTIVE DATE.This section is effective upon local approval and compliance
by the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 12. CITY OF MINNEAPOLIS; TAX INCREMENT FINANCING.
(a) Notwithstanding the provisions of Minnesota Statutes, section 469.176 or
469.1763, or any other law to the contrary, a development authority of the city of
Minneapolis may spend or contractually commit tax increment revenues, generated from
any tax increment district located anywhere within the city, within the area of the city
designated by the Presidential declaration of major disaster FEMA-1990-DR within the
36-month period beginning on the date of the declaration of the disaster.
(b) The authority to spend tax increments under this section is limited to one or
more of the following purposes:
(1) to provide improvements, loans, interest rate subsidies, or assistance in any
form to private individuals and businesses to undertake the reconstruction or substantial
rehabilitation of residential or commercial buildings and ancillary facilities, damaged as a
result of the disaster; and
(2) to pay or finance costs of the authority relating to the recovery of properties
within the disaster area, including, but not limited to, acquisition, demolition, site
improvements, and related administrative costs permitted under Minnesota Statutes,
section 469.176, subdivision 3.
(c) Expenditures made under this section are considered to be expenditures for
activities within the district. An authority may undertake actions provided in this section
only after approval by the city of a written spending plan that specifically authorizes the
authority to take the actions. Before approving the spending plan, the city shall hold a
public hearing after publishing notice in a newspaper of general circulation in the city at
least once, not less than ten days nor more than 30 days prior to the date of the hearing.
(d) For purposes of this section, "development authority" or "authority" has the
meaning given in Minnesota Statutes, section 469.174, subdivision 2, and includes the
city of Minneapolis.
EFFECTIVE DATE.This section is effective upon local approval and compliance
by the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 3.
Sec. 13. PROPERTY TAX RELIEF FOR HOMES DAMAGED BY MAY 22,
2011 TORNADOES.
Subdivision 1. Abatement authorization. Notwithstanding Minnesota Statutes,
section 375.192, the county boards of Anoka County and Hennepin County may grant
an abatement of net tax for taxes payable in 2011 for homestead property located within
the area covered by Presidential Disaster Declaration FEMA-1990-DR or added later by
federal government actions, provided that:
(1) the property was found to have sustained a loss in value under the reassessment
required under Minnesota Statutes, section 273.1232;
(2) the property's loss in value was not of sufficient magnitude to allow it to qualify
for the abatement authorized under Minnesota Statutes, section 273.1233; and
(3) the owner submits a written application to the county assessor within 60 days
of the effective date of this act.
Subd. 2. Abatement limit. The abatement under this section is subject to the
limitation under Minnesota Statutes, section 273.1233, subdivision 2, paragraph (a).
Subd. 3. Refund required if taxes already paid. If application is made after
payment of all or a portion of the taxes being abated, the portion already paid shall be
refunded to the taxpayer by the county treasurer as soon as practical.
Subd. 4. Reimbursement. The county auditor shall certify the abatements granted
under this section to the commissioner of revenue for reimbursement to each taxing
jurisdiction in which the damaged property is located. The commissioner shall make the
payments to the taxing jurisdictions containing the property, other than school districts, at
the time distributions are made under Minnesota Statutes, section 473H.10, subdivision
3. Reimbursements to school districts shall be made as provided in Minnesota Statutes,
section 273.1392.
Subd. 5. Ineligibility for credit in following year. Any property which applies for
and is granted an abatement for taxes payable in 2011 under this section is not eligible
for the credits provided under Minnesota Statutes, sections 273.1234 and 273.1235, for
taxes payable in 2012.
Subd. 6. Appropriation. The amount necessary to make the payments required
under subdivision 4 is appropriated to the commissioner of revenue from the general
fund in fiscal year 2012.
EFFECTIVE DATE.This section is effective the day following final enactment.
ARTICLE 6
AIDS, CREDITS, PAYMENTS, AND REFUNDS
Section 1. Minnesota Statutes 2010, section 97A.061, subdivision 1, is amended to
read:
Subdivision 1. Applicability; amount. (a) The commissioner shall annually make a
payment to each county having public hunting areas and game refuges. Money to make
the payments is annually appropriated for that purpose from the general fund. Except as
provided in paragraph (b), this section does not apply to state trust fund land and other
state land not purchased for game refuge or public hunting purposes. Except as provided
in paragraph (b), the payment shall be the greatest of:
(1) 35 percent of the gross receipts from all special use permits and leases of land
acquired for public hunting and game refuges;
(2) 50 cents per acre on land purchased actually used for public hunting or game
refuges; or
(3) three-fourths of one percent of the appraised value of purchased land actually
used for public hunting and game refuges.
(b) The payment shall be 50 percent of the dollar amount
determined under section
by the number of acres of land in the county that are owned by another state agency for
military purposes and designated as a game refuge under section
(c) The payment must be reduced by the amount paid under subdivision 3 for
croplands managed for wild geese.
(d) The appraised value is the purchase price for five years after acquisition.
The appraised value shall be determined by the county assessor every five years after
acquisition.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2011 and thereafter.
Sec. 2. Minnesota Statutes 2010, section 126C.01, subdivision 3, is amended to read:
Subd. 3. Referendum market value. "Referendum market value" means the market
value of all taxable property, excluding property classified as class 2, noncommercial
4c(1), or 4c(4) under section
house, garage, and surrounding one acre of land of an agricultural homestead is included
in referendum market value. For the purposes of this subdivision, in the case of class 1a,
1b, or 2a property, "market value" means the value prior to the exclusion under section
273.13, subdivision 35. Any class of property, or any portion of a class of property, that
is included in the definition of referendum market value and that has a class rate of less
than one percent under section
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 3. Minnesota Statutes 2010, section 273.13, is amended by adding a subdivision
to read:
Subd. 35. Homestead market value exclusion. (a) Prior to determining a property's
net tax capacity under this section, property classified as class 1a or 1b under subdivision
22, and the portion of property classified as class 2a under subdivision 23 consisting of
the house, garage, and surrounding one acre of land, shall be eligible for a market value
exclusion as determined under paragraph (b).
(b) For a homestead valued at $76,000 or less, the exclusion is 40 percent of market
value. For a homestead valued between $76,000 and $413,800, the exclusion is $30,400
minus nine percent of the valuation over $76,000. For a homestead valued at $413,800 or
more, there is no valuation exclusion. The valuation exclusion shall be rounded to the
nearest whole dollar, and may not be less than zero.
(c) Any valuation exclusions or adjustments under section 273.11 shall be applied
prior to determining the amount of the valuation exclusion under this subdivision.
(d) In the case of a property that is classified as part homestead and part
nonhomestead, (i) the exclusion shall apply only to the homestead portion of the property,
but (ii) if a portion of a property is classified as nonhomestead solely because not all
the owners occupy the property, not all the owners have qualifying relatives occupying
the property, or solely because not all the spouses of owners occupy the property, the
exclusion amount shall be initially computed as if that nonhomestead portion were also in
the homestead class and then prorated to the owner-occupant's percentage of ownership.
For the purpose of this section, when an owner-occupant's spouse does not occupy the
property, the percentage of ownership for the owner-occupant spouse is one-half of the
couple's ownership percentage.
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 4. Minnesota Statutes 2010, section 273.1384, subdivision 3, is amended to read:
Subd. 3. Credit reimbursements. The county auditor shall determine the tax
reductions allowed under
payable year and shall certify that amount to the commissioner of revenue as a part of the
abstracts of tax lists submitted by the county auditors under section
year adjustments shall also be certified on the abstracts of tax lists. 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 proportionately reduce the net tax capacity-based
property tax payable to each local taxing jurisdiction as provided in section
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 5. Minnesota Statutes 2010, section 273.1384, subdivision 4, is amended to read:
Subd. 4. Payment. (a) The commissioner of revenue shall reimburse each local
taxing jurisdiction, other than school districts, for the tax reductions granted under
taxes payable year for which the reductions are granted, including in each payment
the prior year adjustments certified on the abstracts for that taxes payable year. The
reimbursements related to tax increments shall be issued in one installment each year on
December 26.
(b) The commissioner of revenue shall certify the total of the tax reductions granted
under
the commissioner of the Department of Education and the commissioner of education shall
pay the reimbursement amounts to each school district as provided in section
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 6. Minnesota Statutes 2010, 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
(2) powerline credit as provided in section
(3) agricultural preserves credit as provided in section
(4) enterprise zone credit as provided in section
(5) disparity reduction credit;
(6) conservation tax credit as provided in section
(7)
(8) taconite homestead credit as provided in section
(9) supplemental homestead credit as provided in section
The combination of all property tax credits must not exceed the gross tax amount.
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 7. Minnesota Statutes 2010, 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
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
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
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
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
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
(2) the property's homestead market value exclusion under section 273.13,
subdivision 35;
section
credit received under section
tax relief"; and
(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 for taxes payable in 2012 and
thereafter.
Sec. 8. Minnesota Statutes 2010, section 290A.03, subdivision 11, is amended to read:
Subd. 11. Rent constituting property taxes. "Rent constituting property taxes"
means
of rent paid in lieu of property taxes, in any calendar year by a claimant for the right
of occupancy of the claimant's Minnesota homestead in the calendar year, and which
rent constitutes the basis, in the succeeding calendar year of a claim for relief under this
chapter by the claimant.
EFFECTIVE DATE.This section is effective for claims based on rent paid in
2011 and following years.
Sec. 9. Minnesota Statutes 2010, section 290A.03, subdivision 13, is amended to read:
Subd. 13. Property taxes payable. "Property taxes payable" means the property tax
exclusive of special assessments, penalties, and interest payable on a claimant's homestead
after deductions made under sections
and any other state paid property tax credits in any calendar year, and after any refund
claimed and allowable under section
the year that the property tax is payable. In the case of a claimant who makes ground
lease payments, "property taxes payable" includes the amount of the payments directly
attributable to the property taxes assessed against the parcel on which the house is located.
No apportionment or reduction of the "property taxes payable" shall be required for the
use of a portion of the claimant's homestead for a business purpose if the claimant does not
deduct any business depreciation expenses for the use of a portion of the homestead in the
determination of federal adjusted gross income. For homesteads which are manufactured
homes as defined in section
trailers taxed as manufactured homes under section
taxes payable" shall also include
year for the site on which the homestead is located. When a homestead is owned by
two or more persons as joint tenants or tenants in common, such tenants shall determine
between them which tenant may claim the property taxes payable on the homestead. If
they are unable to agree, the matter shall be referred to the commissioner of revenue
whose decision shall be final. Property taxes are considered payable in the year prescribed
by law for payment of the taxes.
In the case of a claim relating to "property taxes payable," the claimant must have
owned and occupied the homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead property pursuant to section
payable" relate; or (ii) the claimant must provide documentation from the local assessor
that application for homestead classification has been made on or before December 15
of the year in which the "property taxes payable" were payable and that the assessor has
approved the application.
EFFECTIVE DATE.This section is effective for claims based on rent paid in
2011 and following years.
Sec. 10. Minnesota Statutes 2010, section 290A.04, subdivision 2, is amended to read:
Subd. 2. Homeowners. A claimant whose property taxes payable are in excess
of the percentage of the household income stated below shall pay an amount equal to
the percent of income shown for the appropriate household income level along with the
percent to be paid by the claimant of the remaining amount of property taxes payable.
The state refund equals the amount of property taxes payable that remain, up to the state
refund amount shown below.
| Household Income |
Percent of Income |
Percent Paid by Claimant |
Maximum State Refund |
||
| $0 to 1,549 |
1.0 percent |
15 percent |
$ |
2,460 |
|
| 1,550 to 3,089 |
1.1 percent |
15 percent |
$ |
2,460 |
|
| 3,090 to 4,669 |
1.2 percent |
15 percent |
$ |
2,460 |
|
| 4,670 to 6,229 |
1.3 percent |
20 percent |
$ |
2,460 |
|
| 6,230 to 7,769 |
1.4 percent |
20 percent |
$ |
2,460 |
|
| 7,770 to 10,879 |
1.5 percent |
20 percent |
$ |
2,460 |
|
| 10,880 to 12,429 |
1.6 percent |
20 percent |
$ |
2,460 |
|
| 12,430 to 13,989 |
1.7 percent |
20 percent |
$ |
2,460 |
|
| 13,990 to 15,539 |
1.8 percent |
20 percent |
$ |
2,460 |
|
| 15,540 to 17,079 |
1.9 percent |
25 percent |
$ |
2,460 |
|
| 17,080 to 18,659 |
2.0 percent |
25 percent |
$ |
2,460 |
|
| 18,660 to 21,759 |
2.1 percent |
25 percent |
$ |
2,460 |
|
| 21,760 to 23,309 |
2.2 percent |
30 percent |
$ |
2,460 |
|
| 23,310 to 24,859 |
2.3 percent |
30 percent |
$ |
2,460 |
|
| 24,860 to 26,419 |
2.4 percent |
30 percent |
$ |
2,460 |
|
| 26,420 to 32,629 |
2.5 percent |
35 percent |
$ |
2,460 |
|
| 32,630 to 37,279 |
2.6 percent |
35 percent |
$ |
2,460 |
|
| 37,280 to 46,609 |
2.7 percent |
35 percent |
$ |
2,000 |
|
| 46,610 to 54,369 |
2.8 percent |
35 percent |
$ |
2,000 |
|
| 54,370 to 62,139 |
2.8 percent |
40 percent |
$ |
1,750 |
|
| 62,140 to 69,909 |
3.0 percent |
40 percent |
$ |
1,440 |
|
| 69,910 to 77,679 |
3.0 percent |
40 percent |
$ |
1,290 |
|
| 77,680 to 85,449 |
3.0 percent |
40 percent |
$ |
1,130 |
|
| 85,450 to 90,119 |
3.5 percent |
45 percent |
$ |
960 |
|
| 90,120 to 93,239 |
3.5 percent |
45 percent |
$ |
790 |
|
| 93,240 to 97,009 |
3.5 percent |
50 percent |
$ |
650 |
|
| 97,010 to 100,779 |
3.5 percent |
50 percent |
$ |
480 |
|
under this subdivision. No payment is allowed if the claimant's household income is
EFFECTIVE DATE.This section is effective beginning with refunds based on
taxes payable in 2012.
Sec. 11. Minnesota Statutes 2010, section 290A.04, subdivision 4, is amended to read:
Subd. 4. Inflation adjustment. (a) Beginning for property tax refunds payable in
calendar year 2002, the commissioner shall annually adjust the dollar amounts of the
income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation.
The commissioner shall make the inflation adjustments in accordance with section 1(f) of
the Internal Revenue Code, except that for purposes of this subdivision the percentage
increase shall be determined as provided in this subdivision.
(b) In adjusting the dollar amounts of the income thresholds and the maximum
refunds under subdivision 2 for inflation, the percentage increase shall be determined from
the year ending on June 30, 2011, to the year ending on June 30 of the year preceding that
in which the refund is payable.
(c) In adjusting the dollar amounts of the income thresholds and the maximum
refunds under subdivision 2a for inflation, the percentage increase shall be determined
from the year ending on June 30, 2000, to the year ending on June 30 of the year preceding
that in which the refund is payable.
(d) The commissioner shall use the appropriate percentage increase to annually
adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for
inflation without regard to whether or not the income tax brackets are adjusted for inflation
in that year. The commissioner shall round the thresholds and the maximum amounts,
as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall
round it up to the next $10 amount.
(e) The commissioner shall annually announce the adjusted refund schedule at the
same time provided under section
this subdivision is not a rule under the Administrative Procedure Act.
EFFECTIVE DATE.This section is effective beginning for refunds based on
taxes payable in 2013.
Sec. 12. Minnesota Statutes 2010, section 290C.07, is amended to read:
290C.07 CALCULATION OF INCENTIVE PAYMENT.
(a) An approved claimant under the sustainable forest incentive program is eligible
to receive an annual payment. The payment shall equal
(b) The annual payment for each Social Security number or state or federal business
tax identification number must not exceed $100,000.
EFFECTIVE DATE.This section is effective beginning for payments in calendar
year 2011. A claimant whose calendar year 2011 payment is limited by paragraph (b) or
whose calendar year 2010 payment was limited by Laws 2010, First Special Session
chapter 1, article 13, section 4, subdivision 3, may elect, through December 31, 2011, to
terminate participation in the sustainable forest incentive program and to terminate its
covenant under the program without regard to the limitations under Minnesota Statutes,
section 290C.055. The commissioner of revenue shall issue a document to each claimant
so electing releasing the land from the covenant as provided in Minnesota Statutes, section
290C.04, paragraph (c), effective retroactive to the date of the election, provided that if
the claimant certified to the commissioner under Minnesota Statutes, section 290C.05, its
participation in the program for calendar year 2011, the release is effective on December
31, 2011.
Sec. 13. [373.51] ALTERNATIVE PROCESS FOR CONSOLIDATION.
Notwithstanding the provisions relating to petitions in sections 371.02 and 371.03,
two or more counties may begin the process for consolidation by filing with the secretary
of state a resolution unanimously adopted by the board of each affected county to seek
voter approval for consolidation of the counties following the procedures in chapter 371.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 14. Minnesota Statutes 2010, section 477A.011, subdivision 20, is amended to
read:
Subd. 20. City net tax capacity. "City net tax capacity" means (1) the net tax
capacity computed using the net tax capacity rates in section
in the year of the aid distribution, and the market values, after the exclusion in section
273.13, subdivision 35, for taxes payable in the year prior to the aid distribution plus (2)
a city's fiscal disparities distribution tax capacity under section
paragraph (b), or
to that for which aids are being calculated. The market value utilized in computing city
net tax capacity shall be reduced by the sum of (1) a city's market value of commercial
industrial property as defined in section
multiplied by the ratio determined pursuant to section
(a), or
of tax increment financing districts as defined in section
the market value of transmission lines deducted from a city's total net tax capacity under
section
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2013 and thereafter.
Sec. 15. Minnesota Statutes 2010, section 477A.0124, is amended by adding a
subdivision to read:
Subd. 6. Aid payments in 2011 and 2012. Notwithstanding total aids calculated or
certified for 2011 under subdivisions 3, 4, and 5, for 2011 and 2012, each county shall
receive an aid distribution under this section equal to the lesser of (1) the total amount of
aid it received under this section in 2010 after the reductions under sections 477A.0133
and 477A.0134, or (2) the total amount the county is certified to receive in 2011 under
subdivisions 3 to 5.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2011 and 2012.
Sec. 16. Minnesota Statutes 2010, section 477A.013, subdivision 9, is amended to read:
Subd. 9. City aid distribution. (a) In calendar year 2009 and thereafter, each
city shall receive an aid distribution equal to the sum of (1) the city formula aid under
subdivision 8, and (2) its city aid base.
(b) For aids payable in
city shall mean the amount of aid it was certified to receive for aids payable in
under this section
payable in
the amount of aid it was certified to receive under this section in the previous payable year.
(c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total
aid for any city with a population of 2,500 or more may not be less than its total aid under
this section in the previous year minus the lesser of $10 multiplied by its population, or ten
percent of its net levy in the year prior to the aid distribution.
(d) For aids payable in 2010 and thereafter, the total aid for a city with a population
less than 2,500 must not be less than the amount it was certified to receive in the
previous year minus the lesser of $10 multiplied by its population, or five percent of its
2003 certified aid amount. For aids payable in 2009 only, the total aid for a city with a
population less than 2,500 must not be less than what it received under this section in the
previous year unless its total aid in calendar year 2008 was aid under section
subdivision 36, paragraph (s), in which case its minimum aid is zero.
(e) A city's aid loss under this section may not exceed $300,000 in any year in
which the total city aid appropriation under section
greater than the appropriation under that subdivision in the previous year, unless the
city has an adjustment in its city net tax capacity under the process described in section
(f) If a city's net tax capacity used in calculating aid under this section has decreased
in any year by more than 25 percent from its net tax capacity in the previous year due to
property becoming tax-exempt Indian land, the city's maximum allowed aid increase
under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
resulting from the property becoming tax exempt.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2013 and thereafter.
Sec. 17. Minnesota Statutes 2010, section 477A.013, is amended by adding a
subdivision to read:
Subd. 11. Aid payments in 2011 and 2012. Notwithstanding aids calculated or
certified for 2011 under subdivision 9, for 2011 and 2012, each city shall receive an aid
distribution under this section equal to the lesser of (1) the total amount of aid it received
under this section in 2010 after the reductions under sections 477A.0133 and 477A.0134,
and reduced by the amount of payments made under section 477A.011, subdivision
36, paragraphs (y) and (z), or (2) the amount it was certified to receive in 2011 under
subdivision 9. In 2011 only, a city that qualifies for the aid base adjustment under section
477A.011, subdivision 36, paragraph (aa), shall receive the amount that it was certified to
receive in 2011. In 2012, a city that qualifies for the aid base adjustment under section
477A.011, subdivision 36, paragraph (aa), shall receive the amount that it was certified
to receive in 2011, minus the aid base adjustment provided under section 477A.011,
subdivision 36, paragraph (aa).
EFFECTIVE DATE.This section is effective for aids payable in calendar years
2011 and 2012.
Sec. 18. Minnesota Statutes 2010, section 477A.03, is amended to read:
477A.03 APPROPRIATION.
Subd. 2. Annual appropriation. A sum sufficient to discharge the duties imposed
by sections
commissioner of revenue.
Subd. 2a. Cities. For aids payable in
under section
Subd. 2b. Counties. (a) For aids payable in
payable under section
calendar year, $500,000 shall be retained by the commissioner of revenue to make
reimbursements to the commissioner of management and budget for payments made
under section
payments authorized under section
and subsequent years, the amount shall be deducted from the appropriation under
this paragraph. The reimbursements shall be to defray the additional costs associated
with court-ordered counsel under section
reimbursement in a year shall be included in the next distribution of county need aid
that is certified to the county auditors for the purpose of property tax reduction for the
next taxes payable year.
(b) For aids payable in
management and budget shall bill the commissioner of revenue for the cost of preparation
of local impact notes as required by section
2004 and thereafter. The commissioner of education shall bill the commissioner of
revenue for the cost of preparation of local impact notes for school districts as required by
section
of revenue shall deduct the amounts billed under this paragraph from the appropriation
under this paragraph. The amounts deducted are appropriated to the commissioner of
management and budget and the commissioner of education for the preparation of local
impact notes.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2012 and thereafter.
Sec. 19. Minnesota Statutes 2010, section 477A.11, subdivision 1, is amended to read:
Subdivision 1. Terms. For the purpose of sections
the terms defined in this section have the meanings given them.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2011 and thereafter.
Sec. 20. Minnesota Statutes 2010, section 477A.12, subdivision 1, is amended to read:
Subdivision 1. Types of land; payments. (a) As an offset for expenses incurred
by counties and towns in support of natural resources lands, the following amounts are
annually appropriated to the commissioner of natural resources from the general fund for
transfer to the commissioner of revenue. The commissioner of revenue shall pay the
transferred funds to counties as required by sections
The amounts are:
(1) for acquired natural resources land,
land or, at the county's option three-fourths of one percent of the appraised value of all
acquired natural resources land in the county, whichever is greater;
(2)
the number of acres of county-administered other natural resources land;
(3)
the total number of acres of land utilization project land; and
(4)
the number of acres of commissioner-administered other natural resources land located in
each county as of July 1 of each year prior to the payment year.
(b) The amount determined under paragraph (a), clause (1), is payable for land
that is acquired from a private owner and owned by the Department of Transportation
for the purpose of replacing wetland losses caused by transportation projects, but only
if the county contains more than 500 acres of such land at the time the certification is
made under subdivision 2.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2011 and thereafter.
Sec. 21. Minnesota Statutes 2010, section 477A.14, subdivision 1, is amended to read:
Subdivision 1. General distribution. Except as provided in subdivision 2 or in
section
deposited in the county general revenue fund to be used to provide property tax levy
reduction. The remainder shall be distributed by the county in the following priority:
(a)
acre of county-administered other natural resources land shall be deposited in a
resource development fund to be created within the county treasury for use in resource
development, forest management, game and fish habitat improvement, and recreational
development and maintenance of county-administered other natural resources land. Any
county receiving less than $5,000 annually for the resource development fund may elect to
deposit that amount in the county general revenue fund;
(b) From the funds remaining, within 30 days of receipt of the payment to the
county, the county treasurer shall pay each organized township
and each acre of land described in section
natural resources land and each acre of land utilization project land located within its
boundaries. Payments for natural resources lands not located in an organized township
shall be deposited in the county general revenue fund. Payments to counties and townships
pursuant to this paragraph shall be used to provide property tax levy reduction, except
that of the payments for natural resources lands not located in an organized township, the
county may allocate the amount determined to be necessary for maintenance of roads in
unorganized townships. Provided that, if the total payment to the county pursuant to
section
the amount available shall be distributed to each township and the county general revenue
fund on a pro rata basis; and
(c) Any remaining funds shall be deposited in the county general revenue fund.
Provided that, if the distribution to the county general revenue fund exceeds $35,000, the
excess shall be used to provide property tax levy reduction.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2011 and thereafter.
Sec. 22. Laws 2010, First Special Session chapter 1, article 13, section 4, subdivision
1, is amended to read:
Subdivision 1. Political contribution credit. Notwithstanding the provisions of
Minnesota Statutes, section
political contribution refund does not apply to contributions made after June 30, 2009, and
before July 1,
EFFECTIVE DATE.This section is effective retroactively from July 1, 2011.
Sec. 23. CREDIT REDUCTIONS AND LIMITATION; COUNTIES AND
CITIES.
In 2011, the market value credit reimbursement payment to each county and city
authorized under Minnesota Statutes, section 273.1384, subdivision 4, may not exceed the
reimbursement payment received by the county or city for taxes payable in 2010.
EFFECTIVE DATE.This section is effective for credit reimbursements in 2011.
Sec. 24. PROPERTY TAX STATEMENT FOR TAXES PAYABLE IN 2012 ONLY.
For the purposes of the property tax statements required under Minnesota Statutes,
section 276.04, subdivision 2, for taxes payable in 2012 only, the gross tax amount shown
for the previous year is the gross tax minus the residential homestead market value credit.
EFFECTIVE DATE.This section is effective for taxes payable in 2012 only.
Sec. 25. DELAY IN CERTAIN JULY STATE PAYMENTS TO LOCAL
GOVERNMENTS.
Notwithstanding any law to the contrary, the commissioner of revenue shall not make
July 20, 2011, payments under Minnesota Statutes, section 477A.015, until July 27, 2011.
EFFECTIVE DATE.This section is effective upon final enactment and applies
to the July 20, 2011, payments.
Sec. 26. SUSTAINABLE FOREST INCENTIVE ACT REDUCTION; PURPOSE
STATEMENT; TRANSITION PROVISIONS.
(a) Given the limits on state budgetary resources for the current and future fiscal
biennia, the projected cost of the sustainable forest resource management incentive
program under Minnesota Statutes, chapter 290C, of over $31,000,000 for the fiscal 2012
and 2013 biennium, and the modest amount of tangible public benefits of that program,
the legislature determines that it is prudent and necessary to reduce that program effective
immediately to help balance the state budget for the fiscal 2012 and 2013 biennium
and to help provide permanent structural balance to the state budget. The legislature
takes notice of and finds that many of the eligibility requirements for participants in
the sustainable forest incentive program are in the participants' own financial interests,
determined without regard to whether they receive state payments for doing so, and that
the participants with the largest amounts of acreage in the program do follow and would
likely continue to follow similar or more stringent management practices, regardless
of whether the program exists.
(b) Land enrolled in the sustainable forest incentive program on May 1, 2011, for
which the owner elects to terminate its enrollment before September 1, 2011, under the
effective date provision of section 12, may be reclassified as class 2(c) managed forest
land for taxes payable in 2012 if the owner applies to the assessor for the reclassification
before September 1, 2011, notwithstanding the application date in Minnesota Statutes,
section 273.13, subdivision 23, paragraph (d).
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 27. REPEALER.
(a) Minnesota Statutes 2010, sections 275.295; and 477A.145, are repealed.
(b) Minnesota Statutes 2010, section 273.1384, subdivisions 1 and 6, are repealed.
EFFECTIVE DATE.Paragraph (a) is effective for aids payable in 2012 and
thereafter. Paragraph (b) is effective for taxes payable in 2012 and thereafter.
ARTICLE 7
MINERALS
Section 1. Minnesota Statutes 2010, section 272.02, is amended by adding a
subdivision to read:
Subd. 97. Property used in business of mining subject to net proceeds tax. The
following property used in the business of mining that is subject to the net proceeds tax
under section 298.015 is exempt:
(1) deposits of ores, metals, and minerals and the lands in which they are contained;
(2) all real and personal property used in mining, quarrying, producing, or refining
ores, minerals, or metals, including lands occupied by or used in connection with the
mining, quarrying, production, or ore refining facilities; and
(3) concentrate or direct reduced ore.
This exemption applies for each year that a person subject to tax under section
298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or
minerals.
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 2. Minnesota Statutes 2010, section 290.05, subdivision 1, is amended to read:
Subdivision 1. Exempt entities. The following corporations, individuals, estates,
trusts, and organizations shall be exempted from taxation under this chapter, provided
that every such person or corporation claiming exemption under this chapter, in whole
or in part, must establish to the satisfaction of the commissioner the taxable status of
any income or activity:
(a) corporations, individuals, estates, and trusts engaged in the business of mining or
producing iron ore and mining, producing, or refining other ores, metals, and minerals,
the mining
by section
other business or activity or has income from any property not used in such business it
shall be subject to this tax computed on the net income from such property or such other
business or activity. Royalty shall not be considered as income from the business of
mining or producing iron ore within the meaning of this section;
(b) the United States of America, the state of Minnesota or any political subdivision
of either agencies or instrumentalities, whether engaged in the discharge of governmental
or proprietary functions; and
(c) any insurance company.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
Sec. 3. Minnesota Statutes 2010, section 298.001, is amended by adding a subdivision
to read:
Subd. 10. Refining. "Refining" means and is limited to refining:
(1) of ores, metals, or mineral products, the mining, extraction, or quarrying of
which were subject to tax under section 298.015; and
(2) carried out by the entity, or an affiliated entity, that mined, extracted, or quarried
the metal or mineral products.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
Sec. 4. Minnesota Statutes 2010, section 298.01, subdivision 3, is amended to read:
Subd. 3. Occupation tax; other ores. Every person engaged in the business of
mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
in this subdivision. For purposes of this subdivision, mining includes the application
of hydrometallurgical processes. The tax is determined in the same manner as the tax
imposed by section
subdivision 4
be computed by applying to taxable income the rate of 2.45 percent. A person subject
to occupation tax under this section shall apportion its net income on the basis of the
percentage obtained by taking the sum of:
(1) 75 percent of the percentage which the sales made within this state in connection
with the trade or business during the tax period are of the total sales wherever made in
connection with the trade or business during the tax period;
(2) 12.5 percent of the percentage which the total tangible property used by the
taxpayer in this state in connection with the trade or business during the tax period is of
the total tangible property, wherever located, used by the taxpayer in connection with the
trade or business during the tax period; and
(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
in this state or paid in respect to labor performed in this state in connection with the trade
or business during the tax period are of the taxpayer's total payrolls paid or incurred in
connection with the trade or business during the tax period.
The tax is in addition to all other taxes.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
Sec. 5. Minnesota Statutes 2010, section 298.01, subdivision 3a, is amended to read:
Subd. 3a. Gross income. (a) For purposes of determining a person's taxable income
under subdivision 3, gross income is determined by the amount of gross proceeds from
mining in this state under section
from the sale or disposition of assets used in the business in this state. If more than one
ore, mineral, or metal
processed at the same mine and plant, a gross income for each ore, mineral, or metal
one occupation tax return to arrive at the gross income of all production.
(b) In applying section
that are subject to tax under this chapter are deemed to be sales in this state.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
Sec. 6. Minnesota Statutes 2010, section 298.015, subdivision 1, is amended to read:
Subdivision 1. Tax imposed. A person engaged in the business of mining shall pay
to the state of Minnesota for distribution as provided in section
equal to two percent of the net proceeds from mining in Minnesota. The tax applies to all
or refined within the state of Minnesota except for sand, silica sand, gravel, building
stone, crushed rock, limestone, granite, dimension granite, dimension stone, horticultural
peat, clay, soil, iron ore, and taconite concentrates. The tax is in addition to all other
taxes provided for by law.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
Sec. 7. Minnesota Statutes 2010, section 298.015, subdivision 2, is amended to read:
Subd. 2. Net proceeds. For purposes of this section, the term "net proceeds" means
the gross proceeds from mining, as defined in section
subdivision 3b, applied to the mining, production, processing, beneficiation, smelting, or
refining of metal or mineral products. No other credits or deductions shall apply to this tax
EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
thereafter.
Sec. 8. Minnesota Statutes 2010, section 298.016, subdivision 4, is amended to read:
Subd. 4.
metals, and minerals subject to the tax provided in section
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
Sec. 9. REPEALER.
Minnesota Statutes 2010, section 298.017, is repealed.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2010.
ARTICLE 8
INSURANCE TAXES
Section 1. Minnesota Statutes 2010, section 297I.01, is amended by adding a
subdivision to read:
Subd. 1a. Affiliated group. "Affiliated group" means a group that includes the
insured and any entity, or group of entities, that controls, is controlled by, or is under
common control with the insured. An entity has control over another entity when: (1) the
entity directly or indirectly or acting through one or more other persons owns, controls,
or has the power to vote 25 percent or more of any class of voting securities of the other
entity; or (2) the entity controls in any manner the election of a majority of the directors or
trustees of the other entity.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 2. Minnesota Statutes 2010, section 297I.01, subdivision 9, is amended to read:
Subd. 9. Gross premiums. "Gross premiums" means total premiums paid by
policyholders and applicants of policies, whether received in the form of money or other
valuable consideration, on property, persons, lives, interests and other risks located,
resident, or to be performed in this state, but excluding consideration and premiums for
reinsurance assumed from other insurance companies.
(a) "Gross premiums" includes the total consideration paid to bail bond agents
for bail bonds.
(b) For title insurance companies, "gross premiums" means the charge for title
insurance made by a title insurance company or its agents according to the company's rate
filing approved by the commissioner of commerce without a deduction for commissions
paid to or retained by the agent. Gross premiums of a title insurance company does not
include any other charge or fee for abstracting, searching, or examining the title, or
escrow, closing, or other related services.
(c) "Gross premiums" includes any workers' compensation special compensation
fund premium surcharge pursuant to section
(d) "Gross premiums" for
consideration for an insurance contract for such insurance, including premium deposits,
assessments, fees, and any other compensation given in consideration for a contract
of insurance. Gross premiums does not include the stamping fee, as provided under
section
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 3. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision
to read:
Subd. 10a. Home state. "Home state" means the state in which an insured maintains
its principal place of business, or in the case of an individual, the individual's principal
residence; or if 100 percent of the insured risk is located out of the state, the state to
which the greatest percentage of the insured's taxable premium for that insurance contract
is allocated. If more than one insured from an affiliated group are named insureds on a
single nonadmitted insurance contract, the term home state means the home state of the
member of the affiliated group that has the largest percentage of premium attributed to
it under that insurance contract.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 4. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision
to read:
Subd. 10b. Independently procured insurance. "Independently procured
insurance" means insurance procured directly by an insured from a nonadmitted insurer.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 5. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision
to read:
Subd. 10c. Nonadmitted insurance. "Nonadmitted insurance" means any property
and casualty insurance permitted to be placed directly or through a surplus lines broker
with a nonadmitted insurer.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 6. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision
to read:
Subd. 10d. Nonadmitted insurance premium tax. "Nonadmitted insurance
premium tax" means, with respect to surplus lines or independently procured insurance
coverage, any tax, fee, assessment, or other charge imposed directly or indirectly by a
government entity.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 7. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision
to read:
Subd. 10e. Nonadmitted insurer. "Nonadmitted insurer" means an insurer not
licensed to engage in the business of insurance in Minnesota, but does not include a risk
retention group as the term is defined in section 2(a)(4) of the Liability Risk Retention Act
of 1986, United States Code, title 15, section 3901(a)(4).
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 8. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision
to read:
Subd. 15a. Surplus lines broker. "Surplus lines broker" means an individual,
firm, or corporation which is licensed in a state to sell, solicit, or negotiate insurance on
properties, risks, or exposures located or to be performed in a state with nonadmitted
insurers.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 9. Minnesota Statutes 2010, section 297I.01, subdivision 16, is amended to read:
Subd. 16. Taxpayer. "Taxpayer" means any insurance company, association,
surplus lines
or entity required to pay any amount due under this chapter.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 10. Minnesota Statutes 2010, section 297I.05, subdivision 7, is amended to read:
Subd. 7.
on surplus lines
premiums less return premiums paid by an insured whose home state is Minnesota.
(b)
directly from a nonadmitted insurer. The rate of tax is equal to two percent of the gross
premiums less return premiums paid by an insured whose home state is Minnesota.
(c) No state other than the home state of an insured may require any premium tax
payment for nonadmitted insurance. When Minnesota is the home state of the insured,
as provided under section 297I.01, 100 percent of the gross premiums are taxable in
Minnesota with no allocation of the tax to other states.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 11. Minnesota Statutes 2010, section 297I.05, subdivision 12, is amended to read:
Subd. 12. Other entities. (a) A tax is imposed equal to two percent of:
(1) gross premiums less return premiums written for risks resident or located in
Minnesota by a risk retention group;
(2) gross premiums less return premiums received by an attorney in fact acting
in accordance with chapter 71A;
(3) gross premiums less return premiums received pursuant to assigned risk policies
and contracts of coverage under chapter 79;
(4) the direct funded premium received by the reinsurance association under section
self-insure; and
(5) gross premiums less return premiums paid to an insurer other than a licensed
insurance company or a surplus lines
located in Minnesota by a purchasing group or any members of the purchasing group to a
broker or agent for the purchasing group.
(b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The
rate of tax is equal to two percent of the total amount of claims paid during the fund year,
with no deduction for claims wholly or partially reimbursed through stop-loss insurance.
(c) A tax is imposed on a joint self-insurance plan operating under chapter 62H.
The rate of tax is equal to two percent of the total amount of claims paid during the
fund's fiscal year, with no deduction for claims wholly or partially reimbursed through
stop-loss insurance.
(d) A tax is imposed equal to the tax imposed under section
on the gross premiums less return premiums on all coverages received by an accountable
provider network or agents of an accountable provider network in Minnesota, in cash or
otherwise, during the year.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 12. Minnesota Statutes 2010, section 297I.30, subdivision 1, is amended to read:
Subdivision 1. General rule. On or before March 1, every taxpayer subject to
taxation under section
(a), clauses (1) to (4), (b), (c), and (d), and 14, shall file an annual return for the preceding
calendar year in the form prescribed by the commissioner.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 13. Minnesota Statutes 2010, section 297I.30, subdivision 2, is amended to read:
Subd. 2. Surplus lines
February 15 and August 15 of each year, every surplus lines
taxation under section
or member of a purchasing group subject to tax under section
paragraph (a), clause (5), shall file a return with the commissioner for the preceding
six-month period ending December 31, or June 30, in the form prescribed by the
commissioner.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
Sec. 14. REPEALER.
Minnesota Statutes 2010, section 297I.05, subdivisions 9 and 10, are repealed.
EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
that go into effect after July 20, 2011.
ARTICLE 9
SCIENCE AND TECHNOLOGY PROGRAM
Section 1. [116W.25] CITATION.
Sections 116W.26 to 116W.34 may be cited as the "Minnesota science and
technology program."
Sec. 2. [116W.26] DEFINITIONS.
Subdivision 1. Applicability. For the purposes of sections 116W.26 to 116W.34,
the terms in this section have the meanings given them.
Subd. 2. Authority. "Authority" means the Minnesota Science and Technology
Authority established under this chapter.
Subd. 3. College or university. "College or university" means an institution of
postsecondary education, public or private, that grants undergraduate or postgraduate
academic degrees, conducts significant research or development activities in the areas of
science and technology.
Subd. 4. Commercialization. "Commercialization" means any of the full spectrum
of activities required for a new technology, product, or process to be developed from
its basic research of conceptual stage through applied research or development to the
marketplace including, without limitation, the steps leading up to and including licensure,
sales, and services.
Subd. 5. Commercialized research project. "Commercialized research project"
means research conducted within a college or university or nonprofit research institution
or by a qualified science and technology company that has shown advanced commercial
potential through license agreements, patents, or other forms of invention disclosure, and
by which a qualified science and technology company has been or is being currently
formed.
Subd. 6. Fund. "Fund" means the Minnesota science and technology fund.
Subd. 7. Nonprofit research institution. "Nonprofit research institution" means an
entity with its principle place of business in Minnesota, that qualifies under section 501(c)
of the Internal Revenue Code, and that conducts significant research or development
activities in this state in the areas of science and technology.
Subd. 8. Program. "Program" means the Minnesota science and technology
program.
Subd. 9. Qualified science and technology company. "Qualified science and
technology company" means a corporation, limited liability company, S corporation,
partnership, limited liability partnership, or sole proprietorship with fewer than 100
employees that is engaged in research, development, or production of science or
technology in this state including, without limitation, research, development, or production
directed toward developing or providing science and technology products, processes, or
services for specific commercial or public purposes.
Sec. 3. [116W.27] MINNESOTA SCIENCE AND TECHNOLOGY FUND.
A Minnesota science and technology fund is created in the state treasury. The fund
is a direct-appropriated special revenue fund. Money of the authority must be paid to the
commissioner of management and budget as agent of the authority and the commissioner
shall not commingle the money with other money. The money in the fund must be paid out
only on warrants drawn by the commissioner of management and budget on requisition of
the executive director of the authority or designee.
Sec. 4. [116W.28] MINNESOTA SCIENCE AND TECHNOLOGY FUND;
AUTHORIZED USES.
The Minnesota science and technology fund may be used for the following to:
(1) establish the commercialized research program authorized under section
116W.29;
(2) establish the federal research and development support program under section
116W.30;
(3) establish the industry technology and competitiveness program under section
116W.31; and
(4) carry out the powers of the authority authorized under sections 116W.04 and
116W.32 that are in support of the programs in clauses (1) to (3).
Sec. 5. [116W.29] COMMERCIALIZED RESEARCH PROGRAM.
(a) The authority may establish a commercialized research program. The purpose of
the program is to accelerate the commercialization of science and technology products,
processes, or services from colleges or universities, nonprofit research institutions or
qualified science and technology companies that lead to an increase in science and
technology businesses and jobs. The program shall:
(1) provide science and technology gap funding of up to $250,000 per science and
technology research project to assist in the commercialization and transfer of science and
technology research projects from a college or university or nonprofit research institution
to a qualified science and technology company; and
(2) provide funding of up to $250,000 for early stage development for qualified
science and technology companies to conduct commercialized research projects.
(b) All activities under the commercialized research program must require:
(1) written criteria set by the authority for the application, award, and use of the
funds;
(2) matching funds by the participating qualified science and technology company,
college or university, or nonprofit research institution;
(3) no more than 15 percent of the funds awarded by the authority may be used
for overhead costs; and
(4) a report by the participating qualified science and technology company, college
or university, or nonprofit research institution that provides documentation of the use of
funds and outcomes of the award. The report must be submitted to the authority within
one calendar year of the date of the award.
Sec. 6. [116W.30] FEDERAL RESEARCH AND DEVELOPMENT SUPPORT
PROGRAM.
The authority may establish a federal research and development support program.
The purpose of the program is to increase and coordinate efforts to procure federal funding
for research projects of primary benefit to qualified science and technology companies,
colleges or universities, and nonprofit research institutions. The program shall:
(1) develop and execute a strategy to identify specific federal agencies and programs
that support the growth of science and technology industries in this state; and
(2) provide grants to qualified science and technology companies:
(i) to assist in the development of federal Small Business Innovation (SBIR) or
Small Business Technology Transfer (STTR) proposals; and
(ii) to match funds received through SBIR or STTR awards. No more than
$1,500,000 may be awarded in a year for matching grants under this clause.
Sec. 7. [116W.31] INDUSTRY INNOVATION AND COMPETITIVENESS
PROGRAM.
(a) The authority may establish an industry technology and competitiveness program.
The purpose of the program is to advance the technological capacity and competitiveness
of existing and emerging science and technology industries. The program shall:
(1) provide matching funds to programs and organizations that assist entrepreneurs
in starting and growing qualified science and technology companies including, but not
limited to, matching funds for mentoring programs, consulting and technical services,
and related activities;
(2) fund initiatives that retain engineering, science, technology, and mathematical
occupations in the state including, but not limited to, internships, mentoring, and support
of industry and professional organizations; and
(3) fund initiatives that support the growth of targeted industry clusters and the
competitiveness of existing qualified science and technology companies in developing
and marketing new products and services.
(b) All activities under the industry innovation and competitiveness program shall
require:
(i) written criteria set by the authority for the application, award, and use of the funds;
(ii) matching funds by the participating qualified science and technology company,
college or university, or nonprofit research institution; and
(iii) a report by the participating qualified science and technology company, college
or university, or nonprofit research institution providing documentation on the use of the
funds and outcomes of the award. The report must be submitted to the authority within
one calendar year from the date of the award.
Sec. 8. [116W.32] MINNESOTA SCIENCE AND TECHNOLOGY AUTHORITY;
POWERS UNDER FUND.
Subdivision 1. General powers. The authority shall have all of the powers
necessary to carry out the purposes and provisions of sections 116W.26 to 116W.34,
including, but not limited to, those provided under section 116W.04 and the following:
(1) The authority may make awards in the forms of grants or loans, and charge and
receive a reasonable interest for the loans, or take an equity position in form of stock, a
convertible note, or other securities in consideration of an award. Interests, revenues, or
other proceeds received as a result of a transaction authorized by use of this fund shall be
deposited to the corpus of the fund and used in the same manner as the corpus of the fund.
(2) In awarding money from the fund, priority shall be given to proposals from
qualified science and technology companies that have demonstrable economic benefit to
the state in terms of the formation of a new private sector business entity, the creation of
jobs, or the attraction of federal and private funding.
(3) In awarding money from the fund, priority shall be given to proposals from
colleges or universities and nonprofit research institutions that:
(i) promote collaboration between any combination of colleges or universities,
nonprofit research institutions, and private industry;
(ii) enhance existing research superiority by attracting new research entities,
research talent, or resources to the state; and
(iii) create new research superiority that attracts significant researchers and resources
from outside the state.
(4) Subject to the limits in this clause, money within the fund may be used
for reasonable administrative expenses by the authority including staffing and direct
operational expenses, and professional fees for accounting, legal, and other technical
services required to carry out the intent of the program and administration of the fund.
Administrative expenses may not exceed five percent of the first $5,000,000 in the fund
and two percent of any amount in excess of $5,000,000.
(5) Before making an award, the authority shall enter into a written agreement with
the entity receiving the award that specifies the uses of the award.
(6) If the award recipient has not used the award received for the purposes intended,
as of the date provided in the agreement, the recipient shall repay that amount and any
interest applicable under the agreement to the authority. All repayments must be deposited
to the corpus of the fund.
Subd. 2. Rules. The authority may adopt rules to implement the programs
authorized under sections 116W.29 to 116W.31.
Sec. 9. [116W.33] REPAYMENT.
An entity must repay all or a portion of the amount of any award, grant, loan, or
financial assistance of any type paid by the authority under sections 116W.29 to 116W.32
if the entity relocates outside the state or ceases operation in Minnesota within four years
from the date the authority provided the financial award. If the entity relocates outside of
this state or ceases operation in Minnesota within three years of the financial award, the
entity must repay 100 percent of the award. If the entity relocates or ceases operation in
Minnesota after a period of three years but before four years from the date of the financial
award, the entity must repay 75 percent of the financial award.
Sec. 10. [116W.34] EXPIRATION.
Sections 116W.26 to 116W.33 expire on the expiration date of the authority under
section 116W.03, subdivision 7. Any unused money in the fund shall be deposited in the
general fund.
Sec. 11. APPROPRIATION.
Except as otherwise provided by law, $500,000 is appropriated to the Minnesota
science and technology fund for fiscal year 2012 and any unspent money carries over
to fiscal year 2013. Notwithstanding section 116W.32, subdivision 1, clause (4), up to
$107,000 of the appropriation may be used for administrative expenses of the authority.
This is a onetime appropriation and is not added to the authority's base budget.
Sec. 12. EFFECTIVE DATE.
Sections 1 to 11 are effective the day following final enactment.
ARTICLE 10
MISCELLANEOUS
Section 1. Minnesota Statutes 2010, section 270C.13, subdivision 1, is amended to read:
Subdivision 1. Biennial report. The commissioner shall report to the legislature
by March 1 of each odd-numbered year on the overall incidence of the income tax,
sales and excise taxes, and property tax. The report shall present information on the
distribution of the tax burden as follows: (1) for the overall income distribution, using
a systemwide incidence measure such as the Suits index or other appropriate measures
of equality and inequality; (2) by income classes, including at a minimum deciles of the
income distribution; and (3) by other appropriate taxpayer characteristics. The report
must also include information on the distribution of the burden of federal taxes borne
by Minnesota residents.
EFFECTIVE DATE.This section is effective beginning with the report due in
March 2013.
Sec. 2. BUDGET RESERVE REDUCTION.
Retroactive to July 1, 2011, the commissioner of management and budget shall
cancel $8,665,000 of the balance in the budget reserve account in Minnesota Statutes,
section 16A.152, to the general fund.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 3. CASH FLOW ACCOUNT REDUCTION.
Retroactive to July 1, 2011, the commissioner of management and budget shall
cancel $171,000,000 of the balance in the cash flow account in Minnesota Statutes,
section 16A.152, to the general fund.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 4. APPROPRIATION.
$15,000 in fiscal year 2012 and $15,000 in fiscal year 2013 are appropriated from
the general fund to the commissioner of revenue for the change in the tax incidence
report in section 1.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 5. APPROPRIATION; DISASTER RELIEF.
Subdivision 1. Disaster match appropriation. (a) $9,000,000 is appropriated from
the general fund for fiscal year 2012 to the commissioner of public safety to provide the
state and local match for Federal Emergency Management Agency disaster assistance to
state agencies and political subdivisions under Minnesota Statutes, section 12.221, for
disaster recovery work in:
(1) the area designated by Presidential Declaration of Major Disaster
FEMA-1982-DR, for the flooding in Minnesota in the spring of 2011, whether included in
the original declaration or added by later federal government action;
(2) the area designated by the Presidential Declaration of Major Disaster
FEMA-1990-DR, for the tornado in Hennepin and Anoka Counties on May 22, 2011,
whether included in the original declaration or added by later federal government action; or
(3) the area affected by the severe storms and tornadoes on or about July 1, 2011,
whether included in the original declaration or added by later federal government action.
(b) This is a onetime appropriation. The appropriation under this subdivision does
not lapse, notwithstanding the provisions of Minnesota Statutes, section 16A.28.
Subd. 2. Reserved funds. Of the appropriation in subdivision 1, $5,000,000 is
reserved for disaster recovery activities within the area designated as DR-1982, for spring
2011 flooding in Minnesota.
Subd. 3. Transfer of previous appropriation. Any unexpended portion of the
appropriation in Laws 2010, Second Special Session chapter 1, article 1, section 11, may
be transferred by the commissioner of management and budget to the commissioner of
public safety for the purposes of subdivision 1. Amounts transferred under this subdivision
are available to the commissioner of public safety until June 30, 2013. Any amounts
remaining unexpended and unencumbered on that date lapse to the general fund.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 6. MODIFICATION TO POWERS RESULTING FROM TEMPORARY
STATE SHUTDOWN.
(a) Any statute of limitation that limits the ability of a person to file a claim for
refund, appeal, or other document with the commissioner of revenue is tolled until 30 days
after the end of a Department of Revenue shutdown if the commissioner determines that
the shutdown contributed to that person being unable to file the claim for refund, appeal,
or other document within the applicable period of limitation.
(b) Any action required to be taken by the commissioner of revenue after June 30,
2011, and before 30 days after the date of final enactment of this section, is considered
timely if the commissioner failed to take the action in a timely manner as a result of the
budget-related shutdown of the Department of Revenue and the action is taken by the
commissioner within 30 days after the date of final enactment of this section. This section
does not, however, extend any statute of limitations concerning the assessment of tax.
(c)(1) If the commissioner of revenue determines that the state shutdown has made
it impractical for property tax administrators to take an action or make a determination
in 2011 by the date specified in law, the commissioner may by order either eliminate the
mandatory nature of the action or determination, or allow more time for it to be done,
provided that the commissioner also determines that taxpayers will not be significantly
prejudiced by the elimination or delay.
(2) An appeal may not be taken from an order of the commissioner made in the
exercise of a discretionary authority granted in this paragraph. This paragraph does not
limit or modify the provisions of law that govern appeals of the local property taxes
that are affected by an order made under the authority of this section, including but not
limited to Minnesota Statutes, section 278.01.
EFFECTIVE DATE.This section is effective the day following final enactment.
Paragraph (a) is effective only to periods of limitation that otherwise expire or expired
after June 30, 2011, and before 30 days after the date of final enactment of this section.
Sec. 7. PURPOSE STATEMENTS; TAX EXPENDITURES.
Subdivision 1. Authority. This section is intended to fulfill the requirement under
Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax
expenditure provide a purpose for the tax expenditure and a standard or goal against
which its effectiveness may be measured.
Subd. 2. Estate tax exclusion for qualified farm and small business property.
The provisions of article 1, sections 3 through 8, providing an estate tax subtraction of
the combined value of qualified farm property and qualified small business property up
to $4,000,000 from the federal adjusted taxable estate, are intended to provide estate tax
reductions to owner-operators of family farms and small businesses to allow retention and
continued operation of those farms and businesses by the families.
Subd. 3. Federal update. The provisions of article 2, conforming Minnesota
individual income, corporate franchise, and estate taxes to changes in federal law, are
intended to simplify compliance with and administration of those taxes.
Subd. 4. Sales tax exemption for ring tones. The provisions of article 3, section 1,
exempting ring tones from sales taxation are intended (1) to bring the state of Minnesota
into compliance with the requirements of the streamlined sales tax agreement and (2) to
simplify the tax and to make compliance with the sales tax by remote sellers easier to
encourage congress to enact federal legislation allowing state and local governments to
require remote sellers to collect use tax on behalf of the state and its local governments.
Subd. 5. Minerals processing equipment. The provisions of article 3, section
6, extending the sales tax exemption for certain equipment used in processing of
minerals is intended to provide sales tax treatment for the nonferrous mining industry
equivalent to that provided to the taconite mining industry. Because these purchases are
intermediate inputs to production, the legislature does not consider this allowance to be
a tax expenditure.
Subd. 6. Sales tax exemption for resold admission tickets. The provisions of
article 3, section 8, providing an exemption for resold admission tickets by allowing resale
ticket sellers to claim a refund or provide a credit to the purchaser of resold tickets for
the value of sales tax paid on the original ticket, is intended to reduce the competitive
advantage of ticket resellers that do not have nexus in Minnesota requiring them to
collect Minnesota sales tax and to ensure that resold admission tickets are subject to
sales tax only on the full, final retail price of the tickets. As a result, the legislature does
not consider this to be a tax expenditure.
Subd. 7. Sales tax exemption for sales to townships. The provisions of article 3,
sections 10 and 11, exempting goods and services purchased by townships, is intended
to provide state assistance for the functions of Minnesota townships not exempted under
current law.
Subd. 8. Sales tax exemption; water purchases. The provisions of article 3,
section 11, exempting water purchases by fire departments, fire protection districts, and
fire companies is intended to provide state assistance for this public safety function
of Minnesota local governments.
Subd. 9. Emergency vehicles. The provisions of article 3, section 12, extending
the sales tax exemption for lease of ambulances to other emergency vehicles are intended
to clarify the exemption and to provide consistent treatment of emergency vehicles. The
underlying purpose of the exemption is to provide state assistance to local governments
and other organizations that provide emergency response services.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 8. EFFECTIVE DATE; RELATIONSHIP TO OTHER APPROPRIATIONS.
Unless otherwise specified, this act is effective retroactively from July 1, 2011,
and supersedes and replaces funding authorized by order of the Second Judicial District
Court in Case No. 62-CV-11-5203.
ARTICLE 11
TOBACCO BONDS
Section 1. Minnesota Statutes 2010, section 16A.151, subdivision 2, is amended to
read:
Subd. 2. Exceptions. (a) If a state official litigates or settles a matter on behalf of
specific injured persons or entities, this section does not prohibit distribution of money
to the specific injured persons or entities on whose behalf the litigation or settlement
efforts were initiated. If money recovered on behalf of injured persons or entities cannot
reasonably be distributed to those persons or entities because they cannot readily be
located or identified or because the cost of distributing the money would outweigh the
benefit to the persons or entities, the money must be paid into the general fund.
(b) Money recovered on behalf of a fund in the state treasury other than the general
fund may be deposited in that fund.
(c) This section does not prohibit a state official from distributing money to a person
or entity other than the state in litigation or potential litigation in which the state is a
defendant or potential defendant.
(d) State agencies may accept funds as directed by a federal court for any restitution
or monetary penalty under United States Code, title 18, section 3663(a)(3) or United
States Code, title 18, section 3663A(a)(3). Funds received must be deposited in a special
revenue account and are appropriated to the commissioner of the agency for the purpose
as directed by the federal court.
(e) Tobacco settlement revenues as defined in section 16A.98, subdivision 1,
paragraph (t), may be deposited as provided in section 16A.98, subdivision 12.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 2. [16A.97] TOBACCO BONDS.
The commissioner may sell and issue debt under either or both of sections 16A.98
and 16A.99, but the net proceeds of bonds issued and sold under those sections together
must not exceed $640,000,000 during fiscal years 2012 and 2013.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 3. [16A.98] TOBACCO SECURITIZATION BONDS.
Subdivision 1. Definitions. The definitions in this subdivision apply to this section.
(a) "Authority" means the Tobacco Securitization Authority created and established
under subdivision 3.
(b) "Authorized officer" means any of the members of the authority identified and
described in subdivision 3.
(c) "Bond" means any instrument evidencing the obligation to pay money authorized
or issued by the authority as provided by this section, including without limitation, bonds,
notes, or certificates.
(d) "Bondholder" means, in the case of a bond issued in registered form, the
registered owner of the bond and otherwise, the owner of the bond.
(e) "Commissioner" means the commissioner of management and budget.
(f) "Consent judgment" means the consent judgment, as the same has been and may
be corrected, amended, or modified, in the action styled as The State of Minnesota, By
Hubert Humphrey, III, Its attorney general, and Blue Cross and Blue Shield of Minnesota
v. Philip Morris Incorporated, et al., No. C1-94-8565 (Minnesota District Court, Second
Judicial District, May 8, 1998).
(g) "General tobacco subaccount" means the account established by the authority
within the tobacco settlement recovery account established under subdivision 12 for
the net proceeds of bonds.
(h) "Settlement agreement" means the settlement agreement and stipulation for entry
of consent judgment, dated May 8, 1998, between the State of Minnesota, By Hubert
Humphrey, III, Its attorney general, and Blue Cross and Blue Shield of Minnesota, on
the one hand, and Philip Morris Incorporated, et al., on the other hand, and the subject
of the consent judgment.
(i) "Net proceeds of bonds" means the gross proceeds of the sale of bonds issued
under subdivision 5, less any amounts applied or to be applied to pay transaction and
administrative expenses, including underwriting discount, to pay capitalized interest
and to fund any reserves deemed necessary or appropriate by the authority, but does not
include any investment earnings realized thereon.
(j) "Participating manufacturer" means a tobacco product manufacturer that is or
becomes a signatory to the settlement agreement.
(k) "Pledged tobacco revenues" means the state's tobacco settlement revenues sold
to the authority under the sale agreement and pledged by the authority for the payment of
bonds and any related bond facility.
(l) "Related bond facility" means any interest rate exchange or similar agreement or
any bond insurance policy, letter of credit or other credit enhancement facility, liquidity
facility, guaranteed investment or reinvestment agreement, or other similar agreement,
arrangement, or contract.
(m) "Residual amount in tobacco settlement revenues" means any tobacco settlement
revenues determined as moneys received but not required for the identified period in
which revenues are received, to pay principal or interest on bonds or administrative or
transaction expenses of the authority, or to fund reserves or other requirements relating to
bonds issued or related bond facilities made under this section.
(n) "Sale agreement" means any agreement authorized as provided in this section
in which the state provides for the sale of all or a portion of the tobacco settlement
revenues to the authority.
(o) "State" means the state of Minnesota.
(p) "Tobacco settlement bond proceeds fund" is established within the state treasury
and consists of the net proceeds from any sale, conveyance, or transfer of the state's
tobacco settlement revenues from the authority.
(q) "Tobacco settlement recovery account" is the account established by the authority
outside of the state's treasury.
(r) "Tobacco settlement revenues subaccount" means the account established by the
authority within the tobacco settlement recovery account established under subdivision
12 for receipt of tobacco settlement revenues and for payment of debt service of bonds
authorized under this section.
(s) "Tobacco settlement residual subaccount" means the account established by the
authority within the tobacco settlement recovery account established under subdivision 12
for receipt of the residual amount in the tobacco settlement revenues subaccount.
(t) "Tobacco settlement revenues" means all tobacco settlement payments received
by the state on and after the effective date of this section and required to be made under
the terms of the settlement agreement by participating manufacturers, and the state's rights
to receive the tobacco settlement payments on and after the effective date of this section,
exclusive of any payments made with respect to liability to make those payments for
calendar years completed before the effective date of this section.
Subd. 2. Ownership, transfer, and sale of state's right to tobacco settlement
revenues. All tobacco settlement revenues received and to be received by the state are
the property of the state, to be used as provided by law, including a sale, assignment, or
transfer of the right to receive the tobacco settlement revenues under this subdivision.
During fiscal years 2012 and 2013, the commissioner may sell, convey, or otherwise
transfer to the authority, and may take any action necessary to facilitate and complete the
sale, conveyance, or transfer to the authority the tobacco settlement revenues in exchange
for the net proceeds of bonds and a right to the residual amount in the tobacco settlement
revenues subaccount. Unless otherwise directed by statute, the net proceeds of any such
sale, conveyance, or transfer shall be deposited in the general tobacco subaccount. The
authority's purchased interest in tobacco settlement revenues received by the state from
time to time shall be deposited in the tobacco settlement revenues subaccount, and the
residual amount in tobacco settlement revenues received by the state from time to time
shall be deposited in the tobacco settlement residual subaccount, in each case to be applied
for the purposes and in the manner described in this section.
Any sale, conveyance, or other transfer authorized by this subdivision shall be
evidenced by an instrument or agreement in writing signed on behalf of the state by
the commissioner. A certified copy of the instrument or agreement shall be filed with
the commissioner and the chairs of the senate Finance Committee and the house of
representatives Ways and Means Committee promptly upon execution and delivery
thereof. The instrument or agreement shall require, as a condition of the sale, conveyance,
or other transfer, that the authority notify the commissioner promptly upon the issuance,
sale, and delivery thereof if any bonds are issued that are secured by any of the tobacco
settlement revenues and provide the commissioner with all information on the distribution
of the bond proceeds. The commissioner shall submit a report to the chairs of the senate
finance committee and the house of representatives ways and means committee that
includes all of the information provided to the commissioner by the authority under
this subdivision. The instrument or agreement may include an irrevocable direction to
pay all or a specified portion of the tobacco settlement revenues directly to or upon the
order of the authority, or to any escrow agent or any trustee under an indenture or other
agreement securing any bonds issued or related bond facilities made under this section.
Upon execution and delivery of the sale agreement as provided in this section, the sale,
conveyance, or other transfer of the right to receive the tobacco settlement revenues, shall,
for all purposes, be a true sale and absolute conveyance of all right, title, and interest
therein and not as a pledge or other security interest for any borrowing, valid, binding,
and enforceable in accordance with the terms thereof and such instrument or agreements
and any related instrument, agreement, or other arrangement, including any pledge, grant
of security interest, or other encumbrance made by authority to secure any bonds issued
by the authority, and shall not be subject to disavowal, disaffirmance, cancellation, or
avoidance by reason of insolvency of any party, lack of consideration, or any other fact,
occurrence, or rule of law. On and after the effective date of the sale of any portion,
including all of the tobacco settlement revenues, the state shall have no right, title or
interest in or to the portion of the tobacco settlement revenues sold, and the portion of
the tobacco settlement revenues sold shall be the property of the authority, and shall be
received, held, and disbursed by the authority in a trust fund outside the state treasury.
Any portions of the tobacco settlement revenues sold to the authority and held in trust may
be invested in investments and deposit accounts or certificates, and with security, agreed
upon with the bondholders or a trustee for the bondholders.
The procedures and requirements set forth in this subdivision shall be the sole
procedures and requirements applicable to the sale of the tobacco settlement revenues.
Subd. 3. Establishment and powers of authority. (a) The authority is hereby
established as a body corporate and politic and a public instrumentality of, but having
a legal existence independent and separate from the state and, accordingly, the assets,
liabilities, and funds of the authority shall be neither consolidated nor commingled with
those of the state treasury, provided that the assets, liabilities, and funds of the authority
shall be held by a duly designated agent or fiduciary of the authority. If the authority does
not designate a fiduciary or an agent for the purposes of this subdivision, the assets and
funds of the authority shall be held in the state treasury. The authority and its corporate
existence shall continue until 12 months after all its liabilities have been met or otherwise
discharged. Upon the termination of the existence of the authority, all of its rights and
property shall pass to and be vested in the state. The authority shall be established for the
express limited public purposes set forth in this section, and no part of the net earnings of
the authority shall inure to any private individual.
(b) The authority shall be governed by a three-member board consisting of the
commissioner, the commissioner of revenue, and the commissioner of health. The
commissioner shall serve as the chair and chief executive officer of the authority,
who shall sign instruments or agreements authorized by this section on behalf of the
authority; provided that the authority may by resolution authorize a member other than
the commissioner to sign authorized instruments or agreements. The authority may
elect other officers as necessary from its members. The authority may also appoint a
nonremunerated chief financial officer who may or may not be a member of the authority
in order to provide financial analysis and advice regarding any transaction of the authority.
The powers of the authority shall be subject to the terms, conditions, and limitations
contained within this section, and any applicable covenants or agreements of the authority
in any indenture or other agreement relating to any then outstanding bonds or related bond
facilities. The authority may enter into contracts regarding any matter connected with
any corporate purpose within the objects and purposes of this section. The members of
the authority shall receive no salary or other compensation, either direct or indirect, for
serving as members of the authority, other than reimbursement for actual and necessary
expenses incurred in the performance of such person's duties. Notwithstanding the
foregoing, the authority shall not be authorized to make any covenant, pledge, promise, or
agreement purporting to bind the state with respect to tobacco settlement revenues, except
as otherwise specifically authorized by this section.
(c) A majority of the authority, excluding vacancies, constitutes a quorum to conduct
its business, to exercise its powers, and for all other purposes.
(d) The authority may conduct its business as provided under section 13D.015,
including teleconference calls or interactive video, that allows for an interaction between
members. If a meeting is conducted under this paragraph, a specific location must be
available for the public to attend the meeting and at least one member must be present at
that location.
(e) The authority may not file a voluntary petition under or be or become a debtor
or bankrupt under the federal bankruptcy code or any other federal or state bankruptcy,
insolvency, or moratorium law or statute as may, from time to time, be in effect, and
neither any public officer nor any organization, entity, or other person shall authorize the
authority to be or become a debtor or bankrupt under the federal bankruptcy code or any
other federal or state bankruptcy, insolvency, or moratorium law or statute, as may, from
time to time be in effect.
(f) The authority may not guarantee the debts of another.
(g) The commissioner shall provide administrative services to the authority.
(h) The authority may accept appropriations, gifts, grants, bequests, and devises,
and use or dispose of them for its purposes. All gifts, grants, bequests, and revenues from
those sources are appropriated to the authority.
(i) Proceeds of the authority's bonds, notes, and other obligations; amounts granted
or appropriated to the authority for bond debt service reserves; income from investment;
money in the funds; and all revenues from fees and charges of the authority including
rentals, royalties, dividends, or other proceeds are annually appropriated to the authority
for the accomplishment of its corporate purposes and must be spent, administered,
and accounted for in accordance with the applicable provisions of all bond and note
resolutions, indentures, and other instruments, contracts, and agreements of the authority.
Notwithstanding section 16A.28, these appropriations are available until expended.
Subd. 4. Certain powers of the authority. The authority shall have the power to:
(1) sue and be sued;
(2) have a seal and alter the same at pleasure;
(3) make and alter bylaws for its organization and internal management;
(4) make and execute contracts and all other instruments necessary or convenient
for the exercise of its powers and functions under this subdivision, including without
limitation the purchase from the state of all or a portion of the right to receive tobacco
settlement revenues, and request the attorney general to commence any action to protect
or enforce any right conferred upon it by any law, contract, or other agreement;
(5) retain or contract for the services of underwriters, financial advisors, accountants
or other consultants or agents;
(6) pay its operating expenses and its financing costs, including its reasonable costs
of issuance and sale of bonds and those of the attorney general, if any;
(7) borrow money in its name, issue negotiable bonds as named by the authority, and
provide for the rights of the holders thereof as otherwise provided in this section;
(8) procure insurance against any loss in connection with its activities, properties,
and assets in such amount and from such insurers as it deems desirable;
(9) invest any funds or other moneys under its custody and control in investment
securities or under any related bond facility;
(10) as security for the payment of the principal of and interest on any bonds issued
by it under this section and any agreement made in connection therewith and for its
obligations under any related bond facility, pledge all or any part of the tobacco settlement
revenues;
(11) establish and create debt service reserve funds and capitalized interest accounts
and deposit therein proceeds of bonds in such amount or amounts as shall be provided
by the resolutions or trust indentures for the bonds; and
(12) do any and all things necessary and proper to carry out its purposes and exercise
the powers expressly given and granted in this section.
Subd. 5. Bonds of the authority. (a) The authority shall have power and is hereby
authorized to issue bonds from time to time in one or more series, in an aggregate principal
amount no greater than $900,000,000, excluding refunding bonds sold and issued under
this section, to provide funds not to exceed $640,000,000 and subject to the limitation in
section 16A.97, for the purchase of all or a portion of the tobacco settlement revenues
pursuant to subdivision 2, and also to provide sufficient funds for the establishment of
a debt service reserve fund, and the payment or provision for capitalized interest and
financing costs, including, without limitation, the cost of any related credit facility.
The issuance of bonds shall be authorized by a resolution of the authority, adopted
by a majority of the members of the authority without further authorization or approval.
The issue of the bonds of the authority shall be special limited revenue obligations payable
from and secured by a pledge of the pledged tobacco revenues, those proceeds of bonds
deposited in a debt service reserve fund for the benefit of bondholders, and earnings on
funds of the authority, upon terms and conditions as specified by the authority in the
resolution under which the bonds are issued or in a related trust indenture.
The authority shall have the power and is hereby authorized from time to time to
issue bonds, whenever it deems refunding expedient, to refund any outstanding bonds by
the issuance of new bonds, provided that the refunding bonds mature not more than 30
years after the date of issuance as may be determined by the authority. The refunding
bonds may be exchanged for the bonds to be refunded or sold and the proceeds applied to
the purchase, redemption, or payment of the bonds to be refunded.
(b) The bonds of each issue shall be dated, shall bear interest, which may be
includable in or excludable from the gross income of the owners for federal income tax
purposes, at fixed or variable rates, payable at or prior to maturity, and shall mature
at such time or times, not more than 30 years after the date of issuance, as may be
determined by the authority, and may be made redeemable before maturity, at the option
of the authority, at such price or prices and under such terms and conditions as may be
fixed by the authority. The principal and interest of the bonds may be made payable
in any lawful medium. The resolution of the authority approving the issuance of the
bonds shall determine the form of the bonds and the manner of execution of the bonds
and shall fix the denomination or denominations of the bonds and the place or places of
payment of principal and interest thereof, which may be at any bank or trust company
within or outside the state. If any officer whose signature or a facsimile thereof appears
on any bonds shall cease to be an officer before the delivery of the bonds, the signature
or facsimile shall nevertheless be valid and sufficient for all purposes the same as if the
officer had remained in office until such delivery.
(c) The authority may sell such bonds at either public or private sale upon terms
as the commissioner shall determine are not inconsistent with this section and the bonds
may be sold at any price or percentage of par value. Any bid received may be rejected by
the authority. The proceeds of the bonds shall be disbursed for the purposes for which
the bonds were issued under the restrictions as the sale agreement and the resolution
authorizing the issuance of the bonds or the related trust indenture may provide. The bonds
shall be issued upon approval of the authority and without any other approvals, filings,
proceedings or the happening of any other conditions or things other than the approvals,
findings, proceedings, conditions, and things that are specified and required by this section.
(d) Any pledge made by the authority shall be valid and binding at the time the
pledge is made. The assets, property, revenues, reserves, or earnings so pledged shall
immediately be subject to the lien of the pledge without any physical delivery thereof or
further act, and the lien of any pledge shall be valid and binding as against all parties
having claims of any kind in tort, contract, or otherwise against the authority, irrespective
of whether such parties have notice thereof. Notwithstanding any other provision of law
to the contrary, neither the resolution nor any indenture or other instrument by which a
pledge is created or by which the authority's interest in pledged assets, property, revenues,
reserves, or earnings is assigned need be filed, perfected, or recorded in any public records
in order to protect the pledge or perfect the lien as against third parties, except that a copy
shall be filed in the records of the authority.
(e) Whether or not the bonds of the authority are of such form and character as to
be negotiable instruments under the terms of the Uniform Commercial Code, the bonds
are hereby made negotiable instruments for all purposes, subject only to the provisions of
the bonds for registration.
(f) At the sole discretion of the authority, any bonds issued by the authority and
any related bond facility made under the provisions of this section shall be secured by a
resolution or trust indenture by and between the authority and the indenture trustee, which
may be any trust company or bank having the powers of a trust company, whether located
within or outside the state. The trust indenture or resolution providing for the issuance
of the bonds shall, without limitation, (1) provide for the creation and maintenance of
reserves as the authority shall determine to be proper; (2) include covenants setting forth
the duties of the authority in relation to the bonds, the income of the authority, the related
sale agreement and the related tobacco settlement revenues; (3) contain provisions relating
to the transfer of the residual interest upon receipt of the tobacco settlement revenues; (4)
contain provisions respecting the custody, safeguarding, and application of all moneys and
securities; (5) contain provisions for protecting and enforcing against the authority or the
state the rights and remedies pursuant thereto and to the sale agreement of the owners of
the bonds and any provider of a related bond facility as may be reasonable and proper
and not in violation of law; and (6) contain other provisions as the authority may deem
reasonable and proper for priorities and subordination among the owners of the bonds and
providers of related bond facilities. Any reference in this section to a resolution of the
authority shall include any trust indenture authorized thereby.
(g) The net proceeds of any sale, conveyance, or transfer by the state of tobacco
settlement revenues shall be deposited into the authority's general tobacco subaccount. The
authority shall transfer all moneys in the general tobacco subaccount to the commissioner
for deposit in the tobacco settlement bond proceeds fund. Any residual amount in tobacco
settlement revenues shall be deposited in the tobacco settlement residual subaccount. The
balance in the tobacco residual subaccount shall be transferred to the commissioner for
deposit in the general fund, as provided in subdivision 12, paragraph (b).
(h) The authority may enter into, amend, or terminate, as it determines to be
necessary or appropriate, any related bond facility (1) to facilitate the issuance, sale, resale,
purchase, repurchase, or payment of bonds, interest rate savings or market diversification,
or the making or performance of swap contracts, including without limitation bond
insurance, letters of credit and liquidity facilities, or (2) to attempt to manage or hedge
risk or achieve a desirable effective interest rate or cash flow. Such facility shall be made
upon the terms and conditions established by the authority, including without limitation
provisions as to security, default, termination, payment, remedy, jurisdiction, and consent
to service of process.
(i) The authority may enter into, amend, or terminate, as it deems to be necessary
or appropriate, any related bond facility to place the obligations or investments of the
authority, as represented by the bonds or the investment of reserves securing the bonds or
related bond facilities or other tobacco settlement revenues or its other assets, in whole
or in part, on the interest rate, cash flow, or other basis approved by the authority, which
facility may include without limitation contracts commonly known as interest rate swap
agreements, forward purchase contracts, or guaranteed investment contracts and futures or
contracts providing for payments based on levels of, or changes in, interest rates. These
contracts or arrangements may be entered into by the authority in connection with, or
incidental to, entering into, or maintaining any (1) agreement that secures bonds of the
authority or (2) investment or contract providing for investment of reserves or similar
facility guaranteeing an investment rate for a period of years not to exceed the underlying
term of the bonds. The determination by the authority that a related bond facility or
the amendment or termination thereof is necessary or appropriate as aforesaid shall be
conclusive. Any related bond facility may contain such provisions as to security, default,
termination, payment, remedy, jurisdiction, and consent to service of process, and other
terms and conditions as determined by the authority, after giving due consideration to the
creditworthiness of the counterparty or other obligated party, including any rating by any
nationally recognized rating agency, and any other criteria as may be appropriate.
(j) Bonds or any related bond facility may contain a recital that they are issued or
executed, respectively, pursuant to this section, which recital shall be conclusive evidence
of their validity, respectively, and the regularity of the proceedings relating thereto.
(k) No member or officer of the authority or any person executing the bonds is liable
personally on the bonds or is subject to any personal liability or accountability by reason
of their issuance, or is liable for any other debt or obligation of the authority.
(l) Information in any register of ownership of bonds or certificates is nonpublic data
under section 13.02, subdivision 9, or private data on individuals under section 13.02,
subdivision 12. The information is open only to the subject of it, except as disclosure:
(1) is necessary for the registrar, the commissioner, or the legislative auditor to
perform a duty;
(2) is requested by an authorized representative of the commissioner of revenue,
the attorney general, or the United States commissioner of internal revenue to determine
the application of a tax; or
(3) is required under section 13.03, subdivision 4.
(m) The bonds of the authority are not subject to chapter 16C.
(n) The commissioner and any other member of the authority charged with the
responsibility of issuing bonds for or on behalf of the authority, may enter into written
agreements or contracts relating to the continuing disclosure of information necessary to
comply with, or facilitate the issuance of bonds in accordance with, federal securities
laws, rules, and regulations, including Securities and Exchange Commission rules and
regulations, in Code of Federal Regulations, title 17, section 240.15c2-12. An agreement
may be in the form of covenants with purchasers and holders of bonds set forth in the order
or resolution authorizing the issuance of the bonds, or a separate document authorized
by the order or resolution.
Subd. 6. State not liable on bonds or related bond facilities. The state is not
liable on bonds of the authority, and no bond or related bond facility shall constitute an
indebtedness or an obligation of the state or any subdivision thereof, within the meaning
of any constitutional or statutory limitation or provision or a charge against the general
credit or taxing powers, if any, of any of them but shall be payable solely from pledged
tobacco revenues. No owner of any bond or provider of any related bond facility shall
have the right to compel the exercise of the taxing power of the state to pay any principal
installment of, redemption premium, if any, or interest on the bonds or to make any
payment due under any related bond facility. The bonds must contain on their face a
statement to the effect of this subdivision.
Subd. 7. Agreement with the state. (a) The state pledges and agrees with the
authority, and the owners of the bonds of the authority in which the authority has included
such pledge and agreement, that the state shall: (1) irrevocably direct the transfer of
all pledged tobacco revenues received by the state under and in accordance with the
settlement agreement directly to the authority or its assignee; (2) diligently enforce its
right to collect all moneys due from the participating manufacturers under the settlement
agreement, in each case in the manner and to the extent deemed necessary in the judgment
of and consistent with the discretion of the attorney general of the state, provided,
however, that the sale agreement shall provide (i) that the remedies available to the
authority and the bondholders for any breach of the pledges and agreements of the state
set forth in this clause shall be limited to injunctive relief, and (ii) that the state shall be
deemed to have diligently enforced this subdivision so long as there has been no judicial
determination by a court of competent jurisdiction in this state, in an action commenced
by a participating tobacco manufacturer, that the state has failed to diligently enforce this
subdivision; (3) in any materially adverse way, neither amend the settlement agreement
or take any other action that would (i) impair the authority's right to receive pledged
tobacco revenues, or (ii) limit or alter the rights hereby vested in the authority to fulfill
the terms of its agreements with the bondholders, or (iii) impair the rights and remedies
of the bondholders or the security for such bonds until such bonds, together with the
interest thereon and all costs and expenses in connection with any action or proceedings
by or on behalf of the bondholders, are fully paid and discharged, provided, that nothing
herein shall be construed to preclude the state's regulation of smoking, smoking cessation
activities and laws, and taxation and regulation of the sale of cigarettes or the like or to
restrict the right of the state to amend, modify, repeal, or otherwise alter statutes imposing
or relating to the taxes; and (4) not amend, supersede or repeal the settlement agreement or
this section in any way that would materially adversely affect the amount of any payment
to, or the rights to such payments of, the authority or the bondholders. This pledge and
agreement may be included in the sale agreement and the authority may include this
pledge and agreement in any contract with the bondholders of the authority.
(b) The provisions of this section, the bonds issued pursuant to this section, and
the pledges and agreements by the state and the authority to the bondholders shall not
be interpreted or construed to limit or impair the authority or discretion of the attorney
general to administer and enforce provisions of the settlement agreement or to direct,
control, and settle any litigation or arbitration proceeding arising from or relating to the
settlement agreement.
Subd. 8. Enforcement of contract. The provisions of this section and of any
resolution or proceeding authorizing the issuance of bonds or a related bond facility shall
constitute a contract with the holders of the bonds or the related bond facility, and the
provisions thereof shall be enforceable either by mandamus or other proceeding in any
Minnesota court of competent jurisdiction in Ramsey County to enforce and compel the
performance of all duties required by this section and by any resolution authorizing the
issuance of bonds a related bond facility adopted in response hereto.
Subd. 9. Bonds as legal investments. Any of the following entities may legally
invest any sinking funds, money, or other funds belonging to them or under their control
in any bonds issued under this section: (1) the state, the investment board, public
officers, municipal corporations, political subdivisions, and public bodies; (2) banks and
bankers, savings and loan associations, credit unions, trust companies, savings banks and
institutions, investment companies, insurance companies, insurance associations, and other
persons carrying on a banking or insurance business; and (3) personal representatives,
guardians, trustees, and other fiduciaries.
Subd. 10. Exemption from taxation. It is hereby determined that the creation of
the authority and the carrying out of its corporate purposes are in all respects for the
benefit of the people of the state and are public purposes. Accordingly, the property of the
authority, its income, and its operations shall be exempt from taxation. The authority shall
not be required to pay any fees, taxes, or assessments of any kind, whether state or local,
including, but not limited to, fees, taxes, ad valorem taxes on real property, sales taxes
or other taxes, upon or with respect to any property owned by it or under its jurisdiction,
control or supervision, or upon the uses thereof, or upon or with respect to its activities or
operations in furtherance of the powers conferred upon it by this section.
Subd. 11. Report; audit. The authority shall report to the legislature and the
governor by the January 15 following the end of each fiscal year. The report must include
a complete operating and financial statement covering the authority's operations during
the fiscal year, including amounts of income from all sources. Books and records of
the authority are subject to audit by the legislative auditor in the manner prescribed for
state agencies.
Subd. 12. Tobacco settlement recovery account. (a) The authority shall establish
the tobacco settlement recovery account, which shall consist of three subaccounts: (1)
the general tobacco subaccount, (2) the tobacco settlement revenues subaccount, and (3)
the tobacco settlement residual subaccount. The authority shall deposit all moneys paid
pursuant to the settlement agreement, and any other moneys as provided by law into the
several subaccounts of the tobacco settlement recovery account. Money shall be deposited
into the tobacco settlement revenues subaccount and the tobacco settlement residual
subaccount as provided by the terms of this section, including any agreement between
the state and the authority implementing the same. All other moneys available to be
deposited into the tobacco settlement recovery account shall be deposited into the general
tobacco subaccount. An investment made from moneys credited to a specific subaccount
constitutes part of that subaccount and such subaccount shall be credited with all income
from the investment of such moneys. The commissioner may invest the moneys in the
several subaccounts of the tobacco settlement recovery account in the same manner, in
the same types of investments, and subject to the same limitations provided in section
11A.24. Notwithstanding the foregoing, to the extent necessary to preserve the tax-exempt
status of any bonds issued pursuant to this section, the interest on which is intended to be
excludable from the gross income of the owners for federal income tax purposes, moneys
on deposit in the tobacco settlement revenues subaccount and the tobacco settlement
residual subaccount may be invested in obligations the interest upon which is tax exempt
under the provisions of Section 103 of the Internal Revenue Code of 1986, as now or
hereafter amended, or any successor code or provision.
(b) Moneys on deposit in the tobacco settlement residual subaccount shall be
transferred to the commissioner for deposit in the general fund.
(c) The amounts deposited into the tobacco settlement bond proceeds fund from the
general tobacco subaccount and interest thereon are appropriated to the commissioner
for payment of working capital, debt service on outstanding obligations of the general
fund, the funding of debt service reserves for the bonds, each as permitted by state and
federal law, nonsalary expenses incurred in conjunction with the sale of the bonds and to
supplement the tobacco settlement residual subaccount to pay for appropriated obligations
of the tobacco settlement recovery account for state fiscal years 2012 and 2013. The
commissioner may transfer the amounts available to reduce debt service on outstanding
obligations of the general fund to the state bond fund under section 16A.641.
Subd. 13. Supplemental nature of section; construction and purpose. The
powers conferred by this section shall be in addition to and supplemental to the powers
conferred by any other law, general or special, and may be exercised notwithstanding the
provisions of any other such law. Insofar as the provisions of this section are inconsistent
with the provisions of any other law, general or special, the provisions of this section
shall be controlling.
Subd. 14. Severability. If any provision of this section is held invalid, such
provision shall be deemed to be excised and the invalidity thereof shall not affect any of
the other provisions of this section. If the application of any provision of this section to
any person or circumstance is held invalid, it shall not affect the application of such
provision to such persons or circumstances other than those as to which it is held invalid.
EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 4. [16A.99] TOBACCO APPROPRIATION BONDS.
Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this
section.
(b) "Appropriation bond" means a bond, note, or other similar instrument of the state
payable during a biennium in whole or in part from tobacco settlement revenues and
from one or more of the following sources:
(1) money appropriated by law in any biennium for debt service due with respect
to obligations described in subdivision 2, paragraph (b);
(2) proceeds of the sale of obligations described in subdivision 2, paragraph (b);
(3) payments received for that purpose under agreements and ancillary arrangements
described in subdivision 2, paragraph (d); and
(4) investment earnings on amounts in clauses (1) to (3).
(c) "Consent Judgment" means the Consent Judgment, as the same has been and
may be corrected, amended or modified, in the action styled as The State of Minnesota, By
Hubert Humphrey, III, Its Attorney General, and Blue Cross and Blue Shield of Minnesota
v. Philip Morris Incorporated, et al., No. C1-94-8565 (Minnesota District Court, Second
Judicial District, May 8, 1998).
(d) "Debt service" means the amount payable in any biennium of principal, premium,
if any, and interest on appropriation bonds.
(e) "Settlement agreement" means the settlement agreement and Stipulation
for Entry of Consent Judgment, dated May 8, 1998, between the State of Minnesota,
By Hubert Humphrey, III, Its Attorney General, and Blue Cross and Blue Shield of
Minnesota, on the one hand, and Philip Morris Incorporated, et al., on the other hand,
and the subject of the Consent Judgment.
(f) "Tobacco settlement revenues" means all tobacco settlement payments received
by the state on and after the effective date of this section and required to be made, pursuant
to the terms of the settlement agreement, by participating manufacturers and the state's
rights to receive the tobacco settlement payments on and after the effective date of this
section, exclusive of any payments made with respect to liability to make those payments
for calendar years completed before the effective date of this section.
Subd. 2. Authority. (a) Subject to the limitations of this subdivision, the
commissioner may sell and issue appropriation bonds of the state under this section for
public purposes as provided by law. Proceeds of the bonds must be credited to a special
appropriation bond proceeds fund in the state treasury. Net income from investment of the
proceeds, as estimated by the commissioner, must be credited to the special appropriation
bond proceeds fund.
(b) Appropriation bonds may be sold and issued in amounts that, in the opinion of
the commissioner, are necessary to provide sufficient funds, not to exceed $640,000,000
and subject to the limitation in section 16A.97, for achieving the purposes authorized as
provided under paragraph (a), and pay debt service, pay costs of issuance, make deposits
to reserve funds, pay the costs of credit enhancement, or make payments under other
agreements entered into under paragraph (d); provided, however, that bonds issued and
unpaid shall not exceed $800,000,000 in principal amount, excluding refunding bonds
sold and issued under subdivision 4.
(c) Appropriation bonds may be issued from time to time in one or more series on
the terms and conditions the commissioner determines to be in the best interests of the
state, but the term on any series of bonds may not exceed 30 years. The bonds of each
issue shall be dated and bear interest, and may be includable in or excludable from the
gross income of the owners for federal income tax purposes.
(d) At the time of, or in anticipation of, issuing the appropriation bonds, and at any
time thereafter, so long as the appropriation bonds are outstanding, the commissioner
may enter into agreements and ancillary arrangements relating to the appropriation
bonds, including but not limited to trust indentures, liquidity facilities, remarketing or
dealer agreements, letter of credit agreements, insurance policies, guaranty agreements,
reimbursement agreements, indexing agreements, or interest exchange agreements. Any
payments made or received according to the agreement or ancillary arrangement shall be
made from or deposited as provided in the agreement or ancillary arrangement. The
determination of the commissioner included in an interest exchange agreement that the
agreement relates to an appropriation bond shall be conclusive.
(e) The commissioner may enter into written agreements or contracts relating to the
continuing disclosure of information necessary to comply with, or facilitate the issuance
of appropriation bonds in accordance with federal securities laws, rules, and regulations,
including Securities and Exchange Commission rules and regulations in Code of Federal
Regulations, title 17, section 240.15c2-12. An agreement may be in the form of covenants
with purchasers and holders of appropriation bonds set forth in the order or resolution
authorizing the issuance of the appropriation bonds, or a separate document authorized
by the order or resolution.
(f) The appropriation bonds are not subject to chapter 16C.
Subd. 3. Form; procedure. (a) Appropriation bonds may be issued in the form
of bonds, notes, or other similar instruments, and in the manner provided in section
16A.672. In the event that any provision of section 16A.672 conflicts with this section,
this section shall control.
(b) Every appropriation bond shall include a conspicuous statement of the limitation
established in subdivision 6.
(c) Appropriation bonds may be sold at either public or private sale upon such terms
as the commissioner shall determine are not inconsistent with this section and may be sold
at any price or percentage of par value. Any bid received may be rejected.
(d) Appropriation bonds may bear interest at a fixed or variable rate.
(e) Notwithstanding any other law, appropriation bonds issued pursuant to this
section shall be fully negotiable.
Subd. 4. Refunding bonds. The commissioner from time to time may issue
appropriation bonds for the purpose of refunding any appropriation bonds or tobacco
securitization bonds authorized under section 16A.98 then outstanding, including the
payment of any redemption premiums on the bonds, any interest accrued or to accrue to
the redemption date, and costs related to the issuance and sale of the refunding bonds. The
proceeds of any refunding bonds may, in the discretion of the commissioner, be applied
to the purchase or payment at maturity of the appropriation bonds to be refunded, to the
redemption of the outstanding bonds on any redemption date, or to pay interest on the
refunding bonds and may, pending application, be placed in escrow to be applied to the
purchase, payment, retirement, or redemption. Any escrowed proceeds, pending such
use, may be invested and reinvested in obligations that are authorized investments under
section 11A.24. The income earned or realized on the investment may also be applied
to the payment of the bonds to be refunded or interest or premiums on the refunded
bonds, or to pay interest on the refunding bonds. After the terms of the escrow have
been fully satisfied, any balance of the proceeds and any investment income may be
returned to the general fund or, if applicable, the appropriation bond proceeds account
for use in any lawful manner. All refunding bonds issued under this subdivision must
be prepared, executed, delivered, and secured by appropriations in the same manner as
the bonds to be refunded.
Subd. 5. Appropriation bonds as legal investments. Any of the following entities
may legally invest any sinking funds, money, or other funds belonging to them or under
their control in any appropriation bonds issued under this section:
(1) the state, the investment board, public officers, municipal corporations, political
subdivisions, and public bodies;
(2) banks and bankers, savings and loan associations, credit unions, trust companies,
savings banks and institutions, investment companies, insurance companies, insurance
associations, and other persons carrying on a banking or insurance business; and
(3) personal representatives, guardians, trustees, and other fiduciaries.
Subd. 6. No full faith and credit; state not required to make appropriations.
The appropriation bonds are not public debt of the state, and the full faith, credit, and
taxing powers of the state are not pledged to the payment of the appropriation bonds or to
any payment that the state agrees to make under this section. Appropriation bonds shall
not be obligations paid directly, in whole or in part, from a tax of statewide application
on any class of property, income, transaction, or privilege. Appropriation bonds shall be
payable in each fiscal year only from amounts that the legislature may appropriate for
debt service for any fiscal year, provided that nothing in this section shall be construed
to require the state to appropriate funds sufficient to make debt service payments with
respect to the bonds in any fiscal year. Appropriation bonds shall be canceled and shall
no longer be outstanding on the earlier of (1) the first day of a fiscal year for which the
legislature shall not have appropriated amounts sufficient for debt service, or (2) the date
of final payment of the principal of and interest on the appropriation bonds.
Subd. 7. Appropriation of proceeds. The proceeds of appropriation bonds and
interest credited to the special appropriation bond proceeds fund are appropriated to
the commissioner for payment of working capital, capital expenses, debt service on
outstanding indebtedness of the state and the funding of debt service reserves for the
appropriation bonds, each as permitted by state and federal law, and nonsalary expenses
incurred in conjunction with the sale of the appropriation bonds.
Subd. 8. Appropriation for debt service. The amount needed to pay principal and
interest on appropriation bonds issued under this section is appropriated each year to the
commissioner from the general fund subject to the repeal, unallotment under section
16A.152, or cancellation otherwise pursuant to subdivision 6.
Subd. 9. Validation. (a) Appropriation bonds issued pursuant to this section may be
validated in the manner provided by this subdivision. Nothing in this subdivision shall be
construed to prevent sale or delivery of any appropriation bonds or notes after entry of a
judgment of validation by the Minnesota Supreme Court.
(b) Any appropriation bonds issued pursuant to this section that are validated shall
be validated in the manner provided by this subdivision.
(c) The Minnesota Supreme Court shall have original jurisdiction to determine the
validation of appropriation bonds and all matters connected therewith.
(d) The commissioner may determine the commissioner's authority to issue
appropriation bonds and the legality of all proceedings in connection therewith. For this
purpose a complaint shall be filed by the commissioner in the Minnesota Supreme Court
against the state and the taxpayers and citizens thereof.
(e) As a condition precedent to filing of a complaint for the validation of
appropriation bonds, the commissioner shall take action providing for the issuance of such
appropriation bonds in accordance with law.
(f) The complaint shall set out the state's authority to issue appropriation bonds, the
action or proceeding authorizing the issue and its adoption, all other essential proceedings
had or taken in connection therewith, the amount of the bonds to be issued and the
maximum interest they are to bear, and all other pertinent matters.
(g) The Minnesota Supreme Court shall issue an order directed against the state
and taxpayers, citizens and others having or claiming any right, title, or interest affected
by the issuance of appropriation bonds, or to be affected thereby, allowing all persons,
in general terms and without naming them, and the state through its attorney general to
appear before the Minnesota Supreme Court at a designated time and place and show why
the complaint should not be granted and the proceedings and bonds validated. A copy of
the complaint and order shall be served on the attorney general at least 20 days before the
time fixed for hearing. The attorney general shall examine the complaint, and, if it appears
or there is reason to believe that it is defective, insufficient, or untrue, or if in the opinion
of the attorney general the issuance of the bonds in question has not been duly authorized,
defense shall be made by the attorney general as the attorney general deems appropriate.
(h) Before the date set for hearing, as directed by the Minnesota Supreme Court,
either the clerk of the Minnesota Appellate Courts or the commissioner shall publish a
copy of the order in a legal newspaper of general circulation in Ramsey County and the
state, at least once each week for two consecutive weeks, commencing with the first
publication, which shall not be less than 20 days before the date set for hearing. By this
publication, all taxpayers, citizens, and others having or claiming any right, title or interest
in the state, are made parties defendant to the action and the Minnesota Supreme Court has
jurisdiction of them to the same extent as if named as defendants in the complaint and
personally served with process.
(i) Any taxpayer, citizen, or person interested may become a party to the action by
moving against or pleading to the complaint at or before the time set for hearing. The
Minnesota Supreme Court shall determine all questions of law and fact and make such
orders as will enable it to properly try and determine the action and render a final judgment
within 30 days of the hearing with the least possible delay.
(j) If the judgment validates such appropriation bonds, such judgment is forever
conclusive as to all matters adjudicated and as against all parties affected and all others
having or claiming any right, title, or interest affected by the issuance of said bonds,
or to be affected in any way thereby, and the validity of said bonds or of any revenues
pledged for the payment thereof, or of the proceedings authorizing the issuance thereof,
including any remedies provided for their collection, shall never be called in question in
any court by any person or party.
(k)(1) Bonds, when validated under this section, shall have stamped or written
thereon, by the proper officers of the state issuing them, a statement in substantially the
following form: "This bond is one of a series of bonds which were validated by judgment
of the Supreme Court of the State of Minnesota, rendered on ....., (year) ......"
(2) A certified copy of the judgment or decree shall be received as evidence in any
court in this state.
(l) The costs shall be paid by the state, except when a taxpayer, citizen, or other
person contests the action or intervenes, the court may tax the whole or any part of the
costs against the person is equitable.
(m) A justice of the Minnesota Supreme Court is not disqualified in any validation
action because the justice is a landowner or taxpayer of the state.
EFFECTIVE DATE.This section is effective the day following final enactment.
Presented to the governor July 20, 2011
Signed by the governor July 20, 2011, 9:10 a.m.
