Bill Text: MN HF3167 | 2013-2014 | 88th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Omnibus supplemental tax bill.

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Passed) 2014-05-20 - Secretary of State Chapter 308 [HF3167 Detail]

Download: Minnesota-2013-HF3167-Engrossed.html

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A bill for an act

relating to financing of state and local government; making changes to individual
income, property, sales and use, excise, estate, mineral, tobacco, alcohol, special,
local, and other taxes and tax-related provisions; providing for and increasing
credits; modifying local government aids; modifying exclusions, exemptions,
and levy deadlines; imposing a tax on solar energy production; modifying sales,
use, and excise tax exemptions; changing sales, use, and excise tax remittances;
modifying certain local sales and use taxes; allowing for temporary sales and
use tax amnesty; modifying income tax credits and subtractions; clarifying
estate tax provisions; providing for certain local development projects; changing
license revocation procedures; modifying installment payments; modifying
certain county levy authority; allocating additional tax reductions for border
cities; removing obsolete, redundant, and unnecessary laws and administrative
rules administered by the Department of Revenue; making various policy and
technical changes; requiring a report; appropriating money;amending Minnesota
Statutes 2012, sections 16D.02, subdivisions 3, 6; 16D.04, subdivisions 3,
4; 16D.07; 16D.11, subdivisions 1, 3, 7; 84A.20, subdivision 2; 84A.31,
subdivision 2; 115B.49, subdivision 4; 116J.8737, by adding a subdivision;
163.06, subdivision 1; 270.11, subdivision 1; 270.12, subdivisions 2, 4; 270.87;
270A.03, subdivision 2; 270B.14, subdivision 3; 270C.085; 270C.34, subdivision
2; 270C.52, subdivision 2; 270C.56, subdivision 3; 270C.72, subdivisions 1, 3;
272.01, subdivisions 1, 3; 272.02, subdivisions 10, 24; 272.0211, subdivisions
1, 2; 272.025, subdivision 1; 272.027, subdivision 1; 272.029, subdivisions
4a, 6; 272.03, subdivision 1; 273.01; 273.061, subdivision 6; 273.10; 273.11,
subdivision 13; 273.112, subdivision 6a; 273.13, subdivision 34; 273.1384,
subdivision 2; 273.18; 273.33, subdivision 2; 273.37, subdivision 2; 273.3711;
274.01, subdivisions 1, 2; 274.014, subdivision 3; 275.025, subdivision 2;
275.065, subdivision 1; 275.08, subdivisions 1a, 1d; 275.74, subdivision 2;
275.75; 279.03; 279.16; 279.23; 279.25; 280.001; 280.03; 280.07; 280.11;
281.03; 281.327; 282.01, subdivision 6; 282.04, subdivision 4; 282.261,
subdivisions 2, 4, 5; 282.322; 287.30; 289A.02, subdivision 7, as amended;
289A.18, subdivision 2; 289A.25, subdivision 1; 289A.60, subdivision 15;
290.01, subdivisions 5, 19f, 29; 290.015, subdivision 1; 290.068, subdivision
1; 290.07, subdivisions 1, 2; 290.0922, subdivision 3; 290.095, subdivision 3;
290.9728, subdivision 2; 296A.01, subdivision 16; 297A.67, subdivision 13a, by
adding a subdivision; 297A.68, by adding a subdivision; 297A.70, subdivision
10; 297A.71, by adding a subdivision; 297A.94; 297B.03; 297B.09; 297F.03,
subdivision 2; 297F.09, subdivision 10; 297G.03, by adding a subdivision;
297G.09, subdivision 9; 297I.05, subdivision 14; 298.75, subdivisions 1, 2;
383D.41, by adding a subdivision; 383E.21, subdivisions 1, 2; 412.131; 469.171,
subdivision 6; 469.176, subdivisions 1b, 3; 469.1763, subdivision 3; 469.177,
subdivision 3; 473.665, subdivision 5; 477A.0124, subdivision 5; 477A.014,
subdivision 1; 477A.03, by adding a subdivision; 611.27, subdivisions 13, 15;
Minnesota Statutes 2013 Supplement, sections 116J.8737, subdivision 2, as
amended; 116J.8738, subdivisions 2, 3, 4; 270B.01, subdivision 8; 270B.03,
subdivision 1; 273.032; 273.1325, subdivisions 1, 2; 273.1398, subdivisions 3, 4;
275.70, subdivision 5; 279.37, subdivision 2; 281.17; 289A.20, subdivision 4;
290.01, subdivisions 19, as amended, 19b, as amended, 19d, 31, as amended;
290.091, subdivision 2, as amended; 290.0921, subdivision 3; 290.191,
subdivision 5; 290A.03, subdivision 15, as amended; 290C.03; 291.005,
subdivision 1, as amended; 297A.61, subdivision 3, as amended; 297A.68,
subdivisions 42, 44; 297A.70, subdivisions 2, 13, 14; 297A.75, subdivisions 1,
2, 3; 297B.01, subdivision 16; 360.531, subdivision 2; 403.162, subdivision 5;
423A.02, subdivision 3; 423A.022, subdivisions 2, 3; 465.04; 469.169, by adding
a subdivision; 469.1763, subdivision 2; 477A.013, subdivision 8; 477A.03,
subdivision 2a; 477A.12, subdivision 1; 477A.14, subdivision 1; Laws 1980,
chapter 511, sections 1, subdivision 2, as amended; 2, as amended; Laws 2005,
First Special Session chapter 3, article 5, section 38, subdivision 4; Laws 2006,
chapter 259, article 3, sections 10, subdivisions 3, 4, 5; 11, subdivisions 3, 4, 5;
Laws 2008, chapter 366, article 10, section 15; Laws 2013, chapter 143, article 8,
sections 3; 37; article 9, section 23; article 11, section 10; Laws 2014, chapter
150, article 3, section 4; proposing coding for new law in Minnesota Statutes,
chapters 69; 168A; 272; 383A; 477A; repealing Minnesota Statutes 2012,
sections 16D.02, subdivisions 5, 8; 16D.11, subdivision 2; 270C.131; 270C.53;
270C.991, subdivision 4; 272.02, subdivisions 1, 1a, 43, 48, 51, 53, 67, 72, 82;
272.027, subdivision 2; 272.031; 273.015, subdivision 1; 273.03, subdivision 3;
273.075; 273.13, subdivision 21a; 273.1383; 273.1386; 273.1398, subdivision
4b; 273.80; 275.77; 279.32; 281.173, subdivision 8; 281.174, subdivision 8;
281.328; 282.10; 282.23; 287.20, subdivision 4; 287.27, subdivision 2; 289A.56,
subdivision 7; 290.01, subdivisions 4b, 19e, 20e; 290.06, subdivisions 30, 31;
290.0674, subdivision 3; 290.191, subdivision 4; 290.33; 290C.02, subdivisions
5, 9; 290C.06; 295.52, subdivision 7; 297A.666; 297A.68, subdivision 38;
297A.71, subdivisions 4, 5, 7, 9, 10, 17, 18, 20, 32, 41; 297F.08, subdivision 11;
297H.10, subdivision 2; 469.174, subdivision 10c; 469.175, subdivision 2b;
469.176, subdivision 1i; 469.1764; 469.177, subdivision 10; 469.330; 469.331;
469.332; 469.333; 469.334; 469.335; 469.336; 469.337; 469.338; 469.339;
469.340, subdivisions 1, 2, 3, 5; 469.341; 477A.0124, subdivisions 1, 6; 505.173;
Minnesota Statutes 2013 Supplement, sections 273.1103; 469.340, subdivision 4;
Laws 1993, chapter 375, article 9, section 47; Minnesota Rules, parts 8002.0200,
subpart 8; 8007.0200; 8100.0800; 8130.7500, subpart 7; 8130.8900, subpart 3;
8130.9500, subparts 1, 1a, 2, 3, 4, 5.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

PROPERTY TAX AIDS, CREDITS, AND REFUNDS

    Section 1. [69.022] VOLUNTEER RETENTION STIPEND AID PILOT.
    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
have the meanings given them.
(b) "Emergency medical services provider" means a licensee as defined under
section 144E.001, subdivision 8.
(c) "Independent nonprofit firefighting corporation" has the same meaning as used in
chapter 424A.
(d) "Municipality" has the meaning given in section 69.011, but only if the
municipality uses one or more qualified volunteers to provide service.
(e) "Qualified entity" means an emergency medical services provider, independent
nonprofit firefighting corporation, or municipality.
(f) "Qualified volunteer" means one of the following types of volunteers who has
provided service for the entire prior calendar year to a qualified entity:
(1) a volunteer firefighter as defined in section 424A.001, subdivision 10;
(2) a volunteer ambulance attendant as defined in section 144E.001, subdivision 15; or
(3) an emergency medical responder as defined in section 144E.001, subdivision 6,
who provides emergency medical services as a volunteer.
(g) "Pilot area" means the counties of Blue Earth, Faribault, Freeborn, Martin,
Steele, Waseca, and Watonwan.
(h) "State fire marshal" has the meaning given in section 299F.01.
    Subd. 2. Aid payment and calculation. The commissioner of revenue shall pay aid
to qualified entities located in the pilot area to provide funds for the qualified entities to
pay annual volunteer retention stipends to qualified volunteers who provide services to
the qualified entities. A qualified entity is located in the pilot area if it is a municipality
located in whole or in part in the pilot area, or if it is an emergency medical services
provider or independent nonprofit firefighting corporation with its main office located in
the pilot area. The amount of the aid equals $500 multiplied by the number of qualified
volunteers. For purposes of calculating this aid, each individual providing volunteer
service, regardless of the different types of service provided, is one qualified volunteer.
The commissioner shall pay the aid to qualified entities by July 31 of the calendar year
following the year in which the qualified volunteer provided service.
    Subd. 3. Application. Each year each qualified entity in the pilot area may apply to
the commissioner for aid under this section. The application must be made at the time and
in the form prescribed by the commissioner and must provide sufficient information to
permit the commissioner to determine the applicant's entitlement to aid under this section.
    Subd. 4. Payment of stipends. A qualified entity receiving state aid under this
section must pay the aid as retention stipends to qualified volunteers no later than
September 15 of the year in which the aid was received.
    Subd. 5. Report. No later than January 15, 2018, the state fire marshal, in
consultation with the commissioner of revenue, must report to the chairs and ranking
minority members of the legislative committees having jurisdiction over public safety and
taxes in the senate and the house of representatives, in compliance with sections 3.195 and
3.197, on aid paid under this section. The report must include:
(1) for each county in the pilot area, a listing of the qualified entities that received
aid in each of the three years of the pilot;
(2) the amount of aid paid to each qualified entity that received aid in each of the
three years of the pilot; and
(3) for each qualified entity that received aid, the number of qualified volunteers
who were paid stipends in each of the three years of the pilot.
The report must also provide information on the number of qualified volunteers
providing service to qualified entities in each of the counties adjacent to the pilot area
in each of the three years of the pilot, and must summarize changes in the number of
qualified volunteers during the three years of the pilot both within the pilot area and in the
adjacent counties. For purposes of this subdivision "counties adjacent to the pilot area"
means the counties of Brown, Cottonwood, Dodge, Jackson, Le Sueur, Mower, Nicollet,
and Rice. Qualified entities in counties adjacent to the pilot area must provide information
to the commissioner necessary to the report in this subdivision in the form and manner
required by the commissioner. The commissioner must share with the state fire marshal
the information necessary to the report.
    Subd. 6. Appropriation. An amount sufficient to pay the state aid under this
section in fiscal years 2016, 2017, and 2018 is appropriated from the general fund to the
commissioner of revenue. This appropriation does not become part of the agency's base
budget and expires after fiscal year 2018.
EFFECTIVE DATE.This section is effective the day following final enactment
and applies for volunteer service provided beginning in calendar years 2014, 2015, and
2016, and for aid payable in calendar years 2015, 2016, and 2017.

    Sec. 2. Minnesota Statutes 2012, section 273.1384, subdivision 2, is amended to read:
    Subd. 2. Agricultural homestead market value credit. Property classified as
agricultural homestead under section 273.13, subdivision 23, paragraph (a), is eligible for
an agricultural credit. The credit is computed using the property's agricultural credit market
value, defined for this purpose as the property's market value excluding the market value of
the house, garage, and immediately surrounding one acre of land. The credit is equal to 0.3
percent of the first $115,000 of the property's agricultural credit market value minus .05 plus
0.1 percent of the property's agricultural credit market value in excess of $115,000, subject
to a maximum reduction credit of $115 $490. In the case of property that is classified
as part homestead and part nonhomestead solely because not all the owners occupy or
farm the property, not all the owners have qualifying relatives occupying or farming the
property, or solely because not all the spouses of owners occupy the property, the credit
must be initially computed as if that nonhomestead agricultural land was also classified as
agricultural homestead and then prorated to the owner-occupant's percentage of ownership.
EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.

    Sec. 3. Minnesota Statutes 2013 Supplement, section 273.1398, subdivision 4, is
amended to read:
    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
Class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property
is located in a border city that has an enterprise zone, as defined in section 469.166; (2)
the property is located in a city with a population greater than 2,500 and less than 35,000
according to the 1980 decennial census; (3) the city is adjacent to a city in another state or
immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city
in the other state has a population of greater than 5,000 and less than 75,000 according to
the 1980 decennial census.
    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
property to 1.9 1.7 percent of the property's taxable market value and (ii) the tax on class
3a property to 1.9 1.7 percent of taxable market value.
    (c) The county auditor shall annually certify the costs of the credits to the
Department of Revenue. The department shall reimburse local governments for the
property taxes forgone as the result of the credits in proportion to their total levies.
EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.

    Sec. 4. Minnesota Statutes 2013 Supplement, section 423A.022, subdivision 2, is
amended to read:
    Subd. 2. Allocation. (a) Of the total amount appropriated as supplemental state aid:
    (1) 58.065 58.064 percent must be paid to the executive director of the Public
Employees Retirement Association for deposit in the public employees police and fire
retirement fund established by section 353.65, subdivision 1;
    (2) 35.484 percent must be paid to municipalities other than municipalities solely
employing firefighters with retirement coverage provided by the public employees police
and fire retirement plan which qualified to receive fire state aid in that calendar year,
allocated in proportion to the most recent amount of fire state aid paid under section
69.021, subdivision 7 , for the municipality bears to the most recent total fire state aid
for all municipalities other than the municipalities solely employing firefighters with
retirement coverage provided by the public employees police and fire retirement plan
paid under section 69.021, subdivision 7, with the allocated amount for fire departments
participating in the voluntary statewide lump-sum volunteer firefighter retirement plan
paid to the executive director of the Public Employees Retirement Association for deposit
in the fund established by section 353G.02, subdivision 3, and credited to the respective
account and with the balance paid to the treasurer of each municipality for transmittal
within 30 days of receipt to the treasurer of the applicable volunteer firefighter relief
association for deposit in its special fund; and
    (3) 6.452 percent must be paid to the executive director of the Minnesota State
Retirement System for deposit in the state patrol retirement fund.
(b) For purposes of this section, the term "municipalities" includes independent
nonprofit firefighting corporations that participate in the voluntary statewide lump-sum
volunteer firefighter retirement plan under chapter 356G or with subsidiary volunteer
firefighter relief associations operating under chapter 424A.

    Sec. 5. Minnesota Statutes 2013 Supplement, section 477A.013, subdivision 8, is
amended to read:
    Subd. 8. City formula aid. (a) For aids payable in 2014 only, the formula aid for a
city is equal to the sum of (1) its 2013 certified aid, and (2) the product of (i) the difference
between its unmet need and its 2013 certified aid, and (ii) the aid gap percentage.
    (b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to the
sum of (1) its formula aid in the previous year and (2) the product of (i) the difference
between its unmet need and its certified formula aid in the previous year under subdivision
9, and (ii) the aid gap percentage.
    (c) For aids payable in 2015 and thereafter, if a city's certified aid from the previous
year is greater than the sum of its unmet need plus its aid adjustment under subdivision 13,
its formula aid is adjusted to equal its unmet need.
    (d) No city may have a formula aid amount less than zero. The aid gap percentage
must be the same for all cities subject to paragraph (b).
    (e) The applicable aid gap percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03. Data used in calculating aids to cities under sections
477A.011 to 477A.013 shall be the most recently available data as of January 1 in the
year in which the aid is calculated.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2015 and thereafter.

    Sec. 6. Minnesota Statutes 2013 Supplement, section 477A.03, subdivision 2a, is
amended to read:
    Subd. 2a. Cities. For aids payable in 2014, the total aid paid under section
477A.013, subdivision 9 , is $507,598,012. The total aid paid under section 477A.013,
subdivision 9 , is $509,098,012 for aids payable in 2015. For aids payable in 2016 2015
and thereafter, the total aid paid under section 477A.013, subdivision 9, is $511,598,012
the amount certified under that section in the previous year, multiplied by the inflation
adjustment under subdivision 6.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2015 and thereafter.

    Sec. 7. Minnesota Statutes 2012, section 477A.03, is amended by adding a subdivision
to read:
    Subd. 6. Inflation adjustment. In 2015 and thereafter, the amount paid under
subdivision 2a shall be multiplied by an amount equal to one plus the sum of (1) the
percentage increase in the implicit price deflator for government expenditures and gross
investment for state and local government purchases as prepared by the United States
Department of Commerce, for the 12-month period ending March 31 of the previous
calendar year, and (2) the percentage increase in total city population for the most recently
available years as of January 15 of the current year. The percentage increase in this
subdivision shall not be greater than five percent.
EFFECTIVE DATE.This section is effective for aids payable in calendar year
2015 and thereafter.

    Sec. 8. [477A.18] PRODUCTION PROPERTY TRANSITION AID.
    Subdivision 1. Definitions. (a) When used in this section, the following terms have
the meanings indicated in this subdivision.
(b) "Local unit" means a home rule charter or statutory city, or a town.
(c) "Net tax capacity differential" means the positive difference, if any, by which the
local unit's net tax capacity was reduced from assessment year 2014 to assessment year
2015 due to the change in the definition of real property in section 272.03, subdivision 1,
enacted by article 2, section 6, of this act. For purposes of determining the net tax capacity
differential, any property in a job opportunity building zone under section 469.314 may
not be included when calculating a local unit's net tax capacity.
    Subd. 2. Aid eligibility; payment. (a) If the net tax capacity differential of the local
unit exceeds five percent of its 2015 net tax capacity, the local unit is eligible for transition
aid computed under paragraphs (b) to (f).
(b) For aids payable in 2016, transition aid under this section for an eligible local
unit equals (1) the net tax capacity differential, times (2) the jurisdiction's tax rate for
taxes payable in 2015.
(c) For aids payable in 2017, transition aid under this section for an eligible local
unit equals 80 percent of (1) the net tax capacity differential, times (2) the jurisdiction's
tax rate for taxes payable in 2016.
(d) For aids payable in 2018, transition aid under this section for an eligible local
unit equals 60 percent of (1) the net tax capacity differential, times (2) the jurisdiction's
tax rate for taxes payable in 2017.
(e) For aids payable in 2019, transition aid under this section for an eligible local
unit equals 40 percent of (1) the net tax capacity differential, times (2) the jurisdiction's
tax rate for taxes payable in 2018.
(f) For aids payable in 2020, transition aid under this section for an eligible local
unit equals 20 percent of (1) the net tax capacity differential, times (2) the jurisdiction's
tax rate for taxes payable in 2019.
(g) No aids shall be payable under this section in 2021 and thereafter.
(h) The commissioner of revenue shall compute the amount of transition aid payable
to each local unit under this section. On or before August 1 of each year, the commissioner
shall certify the amount of transition aid computed for aids payable in the following year
for each recipient local unit. The commissioner shall pay transition aid to local units
annually at the times provided in section 477A.015.
(i) The commissioner of revenue may require counties to provide any data that the
commissioner deems necessary to administer this section.
    Subd. 3. Appropriation. An amount sufficient to pay transition aid under this
section is annually appropriated to the commissioner of revenue from the general fund.
EFFECTIVE DATE.This section is effective beginning with assessment year 2015.

    Sec. 9. SUPPLEMENTAL COUNTY PROGRAM AID FOR 2014.
(a) Each county whose certified aid for 2014 under Minnesota Statutes, section
477A.0124, is less than the aid it received under that section in 2013 shall be eligible for
supplemental aid in 2014 equal to the difference between the amount received in 2013
and the amount certified for 2014.
(b) The aid under this section shall be paid in the same manner and at the same time
as the regular aid payments under Minnesota Statutes, section 477A.0124.
(c) The amount necessary to pay supplemental aid under this section is appropriated
from the general fund to the commissioner of revenue.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 10. SUPPLEMENTAL CREDIT FOR TAXES PAYABLE IN 2014 ONLY.
    Subdivision 1. Eligibility. Each agricultural homestead qualifying for a credit
for taxes payable in 2014 under Minnesota Statutes, section 273.1384, is eligible for a
supplemental credit equal to the lesser of (i) $230, or (ii) the net property taxes payable on
the property, excluding the taxes attributable to the house, garage, and surrounding one acre
of land. A supplemental credit must not be paid to any property that has delinquent property
taxes. By August 15, 2014, the county auditor must notify the commissioner of revenue of
the name and address of the property owner of each homestead that received an agricultural
credit for taxes payable in 2014, along with the net taxes due upon the agricultural
homestead, whether there are any delinquent taxes on the property, and whatever other
information the commissioner deems necessary, in a form prescribed by the commissioner.
    Subd. 2. Payment of supplemental credit. The commissioner must pay
supplemental credit amounts to each qualifying taxpayer by October 15, 2014.
    Subd. 3. Property tax statements for taxes payable in 2015. In preparing
proposed property tax notices for taxes payable in 2015 under Minnesota Statutes, section
275.065, and final property tax statements for taxes payable in 2015 under Minnesota
Statutes, section 276.04, the auditor must indicate that the taxpayer may have received a
supplemental credit under this section for taxes payable in 2014.
    Subd. 4. Appropriation. The amount necessary to make the payments required
under subdivision 2 is appropriated from the general fund to the commissioner of revenue
for fiscal year 2015.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. HOMESTEAD CREDIT REFUND AND RENTER PROPERTY TAX
REFUND INCREASE.
    Subdivision 1. Homestead credit refund increase. For claims filed based on taxes
payable in 2014, the commissioner shall increase by three percent the refund otherwise
payable under Minnesota Statutes, section 290A.04, subdivision 2.
    Subd. 2. Renter property tax refund increase. For claims filed based on rent paid
in 2013, the commissioner shall increase by six percent the refund otherwise payable
under Minnesota Statutes, section 290A.04, subdivision 2a.
    Subd. 3. Appropriation. The amount necessary to make the payments required
under this section in fiscal years 2015 and 2016 is appropriated from the general fund
to the commissioner of revenue.
EFFECTIVE DATE.This section is effective for refund claims based on taxes
payable in 2014 and rent paid in 2013 only.

    Sec. 12. 2013 CITY AID PENALTY FORGIVENESS; CITY OF BLUFFTON.
Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the city of
Bluffton shall receive the half of its aid payments for calendar years 2011, 2012, and
2013 under Minnesota Statutes, section 477A.013, that were withheld under Minnesota
Statutes, section 477A.017, subdivision 3, provided that the state auditor certifies to the
commissioner of revenue that it received audited financial statements from the city for
calendar years 2010, 2011, and 2012 by December 31, 2013, and for calendar year 2013
by June 30, 2014. The commissioner of revenue shall make a payment of $20,000 with
the first payment of aids under Minnesota Statutes, section 477A.015, in calendar year
2014. The commissioner shall pay the remaining amount, totaling $28,151.50, with the
first payment of aids under Minnesota Statutes, section 477A.015, in calendar year 2015.
$20,000 in fiscal year 2015 and $28,151.50 in fiscal year 2016 are appropriated from the
general fund to the commissioner of revenue to make payments under this section.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. ADDITIONAL SUPPLEMENTAL AID REVISION FOR OMITTED
2013 INDEPENDENT NONPROFIT FIREFIGHTING CORPORATIONS.
(a) Notwithstanding any provision of Minnesota Statutes, chapter 423A, to the
contrary, this section modifies the allocation of the police and fire supplemental retirement
state aid under Minnesota Statutes 2013 Supplement, section 423A.022, for October
1, 2014.
(b) Before the allocation of the police and fire supplemental retirement state aid is
made for October 1, 2014, the commissioner of revenue shall:
(1) determine those fire departments that qualified for fire state aid under Minnesota
Statutes 2012, section 69.021, subdivision 7, on October 1, 2013, did not receive a 2013
allocation of police and fire supplemental retirement state aid, and were an independent
nonprofit firefighting corporation; and
(2) determine the amount of police and fire supplemental retirement state aid
under Minnesota Statutes 2013 Supplement, section 423A.022, that the fire departments
described in clause (1) would have received on October 1, 2013, if the fire departments
had been included in that allocation.
(c) The total amount determined in paragraph (b), clause (2), must be deducted from
the amount available for allocation under Minnesota Statutes 2013 Supplement, section
423A.022, subdivision 2, clause (2), and the commissioner of revenue shall pay to the fire
departments determined in paragraph (b), clause (1), their respective portion of the total as
an additional payment on October 1, 2014.
(d) The remaining amount after the deduction of the total amount under paragraph
(c) must be allocated as provided in section 1.

ARTICLE 2

PROPERTY TAXES

    Section 1. Minnesota Statutes 2012, section 272.02, subdivision 10, is amended to read:
    Subd. 10. Personal property used for pollution control. Personal property used
primarily for the abatement and control of air, water, or land pollution is exempt to the
extent that it is so used, and real property is exempt if it is used primarily for abatement
and control of air, water, or land pollution as part of an agricultural operation, as a part
of a centralized treatment and recovery facility operating under a permit issued by the
Minnesota Pollution Control Agency pursuant to chapters 115 and 116 and Minnesota
Rules, parts 7001.0500 to 7001.0730, and 7045.0020 to 7045.1260, as a wastewater
treatment facility and for the treatment, recovery, and stabilization of metals, oils,
chemicals, water, sludges, or inorganic materials from hazardous industrial wastes, or as
part of an electric generation system. For purposes of this subdivision, personal property
includes ponderous machinery and equipment used in a business or production activity
that at common law is considered real property.
Any taxpayer requesting exemption of all or a portion of any real property or any
equipment or device, or part thereof, operated primarily for the control or abatement of air,
water, or land pollution shall file an application with the commissioner of revenue. If the
property is an electric power generation facility located in a city, then the commissioner
shall notify the county assessor and city finance officer of the jurisdictions that host the
facility that the application has been received. The Minnesota Pollution Control Agency
shall upon request of the commissioner furnish information and advice to the commissioner.
The information and advice furnished by the Minnesota Pollution Control Agency
must include statements as to whether the equipment, device, or real property meets
a standard, rule, criteria, guideline, policy, or order of the Minnesota Pollution Control
Agency, and whether the equipment, device, or real property is installed or operated
in accordance with it. On determining that property qualifies for exemption, the
commissioner shall issue an order exempting the property from taxation. If the property is
an electric power generation facility located in a city, then the commissioner shall provide
notification of the order to the county assessor and city finance officer of the jurisdictions
that host the facility. The equipment, device, or real property shall continue to be exempt
from taxation as long as the order issued by the commissioner remains in effect.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 272.02, subdivision 24, is amended to read:
    Subd. 24. Electric power photovoltaic devices Solar energy-generating systems.
Photovoltaic devices Personal property consisting of solar energy-generating systems, as
defined in section 216C.06, subdivision 16 272.0295, installed after January 1, 1992, and
used to produce or store electric power are is exempt. The value of the real property on
which the solar energy-generating system is located shall be valued in the same manner as
similar real property that has not been improved with a solar energy-generating system.
The real property shall be classified based on the most probable use of the property if it
was not improved with a solar energy-generating system.
EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.

    Sec. 3. Minnesota Statutes 2012, section 272.0211, subdivision 1, is amended to read:
    Subdivision 1. Efficiency determination and certification. An owner or operator
of a new or existing electric power generation facility, excluding wind energy conversion
systems, may apply to the commissioner of revenue for a market value exclusion on the
property as provided for in this section. This exclusion shall apply only to the market
value of the equipment of the facility, and shall not apply to the structures and the land
upon which the facility is located. The commissioner of revenue shall prescribe the forms
and procedures for this application. Upon receiving the application, the commissioner of
revenue shall: (1) request the commissioner of commerce to make a determination of the
efficiency of the applicant's electric power generation facility; and (2), if the facility is
in a city, notify the county assessor and city finance officer of the jurisdictions that host
the facility that an application for an exclusion is being processed. The commissioner
of commerce shall calculate efficiency as the ratio of useful energy outputs to energy
inputs, expressed as a percentage, based on the performance of the facility's equipment
during normal full load operation. The commissioner must include in this formula the
energy used in any on-site preparation of materials necessary to convert the materials
into the fuel used to generate electricity, such as a process to gasify petroleum coke.
The commissioner shall use the Higher Heating Value (HHV) for all substances in the
commissioner's efficiency calculations, except for wood for fuel in a biomass-eligible
project under section 216B.2424; for these instances, the commissioner shall adjust the
heating value to allow for energy consumed for evaporation of the moisture in the wood.
The applicant shall provide the commissioner of commerce with whatever information the
commissioner deems necessary to make the determination. Within 30 days of the receipt
of the necessary information, the commissioner of commerce shall certify the findings of
the efficiency determination to the commissioner of revenue and to the applicant. The
commissioner of commerce shall determine the efficiency of the facility and certify the
findings of that determination to the commissioner of revenue every two years thereafter
from the date of the original certification.
EFFECTIVE DATE.This section is effective beginning with assessment year 2014.

    Sec. 4. Minnesota Statutes 2012, section 272.0211, subdivision 2, is amended to read:
    Subd. 2. Sliding scale exclusion. Based upon the efficiency determination provided
by the commissioner of commerce as described in subdivision 1, the commissioner of
revenue shall subtract eight percent of the taxable market value of the qualifying property
for each percentage point that the efficiency of the specific facility, as determined by the
commissioner of commerce, is above 40 percent. The reduction in taxable market value
shall be reflected in the taxable market value of the facility beginning with the assessment
year immediately following the determination. For a facility that is assessed by the county
in which the facility is located, The commissioner of revenue shall certify to the assessor
of that county and, if located in a city, the finance officer of that city, the percentage of the
taxable market value of the facility to be excluded.
EFFECTIVE DATE.This section is effective beginning with assessment year 2014.

    Sec. 5. [272.0295] SOLAR ENERGY PRODUCTION TAX.
    Subdivision 1. Production tax. A tax is imposed on the production of electricity
from a solar energy-generating system used as an electric power source.
    Subd. 2. Definitions. (a) For the purposes of this section, the term "solar
energy-generating system" means a set of devices whose primary purpose is to produce
electricity by means of any combination of collecting, transferring, or converting
solar-generated energy.
(b) The total size of a solar energy-generating system under this subdivision shall
be determined according to this paragraph. Unless the systems are interconnected with
different distribution systems, the nameplate capacity of a solar energy-generating system
shall be combined with the nameplate capacity of any other solar energy-generating
system that is:
(1) constructed within the same 12-month period as the solar energy-generating
system; and
(2) exhibits characteristics of being a single development, including but not
limited to ownership structure, an umbrella sales arrangement, shared interconnection,
revenue-sharing arrangements, and common debt or equity financing.
In the case of a dispute, the commissioner of commerce shall determine the total size of
the system and shall draw all reasonable inferences in favor of combining the systems.
(c) In making a determination under paragraph (b), the commissioner of commerce
may determine that two solar energy-generating systems are under common ownership
when the underlying ownership structure contains similar persons or entities, even if the
ownership shares differ between the two systems. Solar energy-generating systems are
not under common ownership solely because the same person or entity provided equity
financing for the systems.
    Subd. 3. Rate of tax. (a) For a solar energy-generating system with a capacity
exceeding one megawatt alternating current, the tax is $1.20 per megawatt-hour.
(b) A solar energy-generating system with a capacity of one megawatt alternating
current or less is exempt from the tax imposed under this section.
    Subd. 4. Reports. An owner of a solar energy-generating system subject to tax
under this section shall file a report with the commissioner of revenue annually on or
before January 15 detailing the amount of electricity in megawatt-hours that was produced
by the system in the previous calendar year. The commissioner shall prescribe the form
of the report. The report must contain the information required by the commissioner to
determine the tax due to each county under this section for the current year. If an owner
of a solar energy-generating system subject to taxation under this section fails to file the
report by the due date, the commissioner of revenue shall determine the tax based upon
the nameplate capacity of the system multiplied by a capacity factor of 30 percent.
    Subd. 5. Notification of tax. (a) On or before February 28, the commissioner of
revenue shall notify the owner of each solar energy-generating system of the tax due to
each county for the current year and shall certify to the county auditor of each county in
which the system is located the tax due from each owner for the current year.
(b) If the commissioner of revenue determines that the amount of production tax has
been erroneously calculated, the commissioner may correct the error. The commissioner
must notify the owner of the solar energy-generating system of the correction and the
amount of tax due to each county and must certify the correction to the county auditor of
each county in which the system is located on or before April 1 of the current year.
    Subd. 6. Payment of tax; collection. The amount of production tax determined
under subdivision 5 must be paid to the county treasurer at the time and in the manner
provided for payment of property taxes under section 277.01, subdivision 3, and, if unpaid,
is subject to the same enforcement, collection, and interest and penalties as delinquent
personal property taxes. Except to the extent inconsistent with this section, the provisions
of sections 277.01 to 277.24 and 278.01 to 278.14 apply to the taxes imposed under this
section, and for purposes of those provisions, the taxes imposed under this section are
considered personal property taxes.
    Subd. 7. Distribution of revenues. Revenues from the taxes imposed under this
section must be part of the settlement between the county treasurer and the county auditor
under section 276.09. The revenue must be distributed by the county auditor or the county
treasurer to local taxing jurisdictions in which the solar energy-generating system is
located as follows: 80 percent to counties; and 20 percent to cities and townships.
EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.

    Sec. 6. Minnesota Statutes 2012, section 272.03, subdivision 1, is amended to read:
    Subdivision 1. Real property. (a) For the purposes of taxation, "real property"
includes the land itself, rails, ties, and other track materials annexed to the land, and all
buildings, structures, and improvements or other fixtures on it, bridges of bridge companies,
and all rights and privileges belonging or appertaining to the land, and all mines, iron ore
and taconite minerals not otherwise exempt, quarries, fossils, and trees on or under it.
(b) A building or structure shall include the building or structure itself, together with
all improvements or fixtures annexed to the building or structure, which are integrated
with and of permanent benefit to the building or structure, regardless of the present use
of the building, and which cannot be removed without substantial damage to itself or to
the building or structure.
(c)(i) Real property does not include tools, implements, machinery, and equipment
attached to or installed in real property for use in the business or production activity
conducted thereon, regardless of size, weight or method of attachment, and mine shafts,
tunnels, and other underground openings used to extract ores and minerals taxed under
chapter 298 together with steel, concrete, and other materials used to support such openings.
(ii) The exclusion provided in clause (i) shall not apply to machinery and equipment
includable as real estate by paragraphs (a) and (b) even though such machinery and
equipment is used in the business or production activity conducted on the real property if
and to the extent such business or production activity consists of furnishing services or
products to other buildings or structures which are subject to taxation under this chapter.
(iii) The exclusion provided in clause (i) does not apply to the exterior shell of a
structure which constitutes walls, ceilings, roofs, or floors if the shell of the structure has
structural, insulation, or temperature control functions or provides protection from the
elements, unless the structure is primarily used in the production of biofuels, wine, beer,
distilled beverages, or dairy products. Such an exterior shell is included in the definition
of real property even if it also has special functions distinct from that of a building, or if
such an exterior shell is primarily used for the storage of ingredients or materials used in
the production of biofuels, wine, beer, distilled beverages, or dairy products, or for the
storage of finished biofuels, wine, beer, distilled beverages, or dairy products.
(d) The term real property does not include tools, implements, machinery,
equipment, poles, lines, cables, wires, conduit, and station connections which are part of a
telephone communications system, regardless of attachment to or installation in real
property and regardless of size, weight, or method of attachment or installation.
EFFECTIVE DATE.This section is effective beginning with assessment year 2015.

    Sec. 7. Minnesota Statutes 2012, 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 and serving as the veteran's
homestead under this section is excluded in determining the property's taxable market
value if the veteran has 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 the current taxes payable
year and for five eight additional taxes payable years 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 eight 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).
    (f) In the case of an agricultural homestead, only the portion of the property
consisting of the house and garage and immediately surrounding one acre of land qualifies
for the valuation exclusion under this subdivision.
    (g) A property qualifying for a valuation exclusion under this subdivision is not
eligible for the market value exclusion under subdivision 35, or classification under
subdivision 22, paragraph (b).
    (h) To qualify for a valuation exclusion under this subdivision a property owner
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.This section is effective for taxes payable in 2015, and
applies to homesteads that initially qualified for the exclusion for taxes payable in 2009
and thereafter.

    Sec. 8. Minnesota Statutes 2012, section 275.025, subdivision 2, is amended to read:
    Subd. 2. Commercial-industrial tax capacity. For the purposes of this section,
"commercial-industrial tax capacity" means the tax capacity of all taxable property
classified as class 3 or class 5(1) under section 273.13, except for excluding: (1) the
first tier of commercial-industrial value as defined under section 273.13, subdivision 24;
(2) electric generation attached machinery under class 3; and (3) property described in
section 473.625. County commercial-industrial tax capacity amounts are not adjusted
for the captured net tax capacity of a tax increment financing district under section
469.177, subdivision 2 , the net tax capacity of transmission lines deducted from a local
government's total net tax capacity under section 273.425, or fiscal disparities contribution
and distribution net tax capacities under chapter 276A or 473F.
EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.

    Sec. 9. Minnesota Statutes 2012, section 275.065, subdivision 1, is amended to read:
    Subdivision 1. Proposed levy. (a) Notwithstanding any law or charter to the
contrary, on or before September 15 30, each taxing authority, other than a school district,
shall adopt a proposed budget and county and each home rule charter or statutory city shall
certify to the county auditor the proposed or, in the case of a town, the final property tax
levy for taxes payable in the following year.
    (b) Notwithstanding any law or charter to the contrary, on or before September 15,
each town and each special taxing district shall adopt and certify to the county auditor a
proposed property tax levy for taxes payable in the following year. For towns, the final
certified levy shall also be considered the proposed levy.
    (c) On or before September 30, each school district that has not mutually agreed
with its home county to extend this date shall certify to the county auditor the proposed
property tax levy for taxes payable in the following year. Each school district that has
agreed with its home county to delay the certification of its proposed property tax levy
must certify its proposed property tax levy for the following year no later than October
7. The school district shall certify the proposed levy as:
    (1) a specific dollar amount by school district fund, broken down between
voter-approved and non-voter-approved levies and between referendum market value
and tax capacity levies; or
    (2) the maximum levy limitation certified by the commissioner of education
according to section 126C.48, subdivision 1.
    (c) (d) If the board of estimate and taxation or any similar board that establishes
maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
property tax levies for funds under its jurisdiction by charter to the county auditor by
September 15 the date specified in paragraph (a), the city shall be deemed to have certified
its levies for those taxing jurisdictions.
    (d) (e) For purposes of this section, "taxing authority" includes all home rule and
statutory cities, towns, counties, school districts, and "special taxing district" means a
special taxing districts district as defined in section 275.066. Intermediate school districts
that levy a tax under chapter 124 or 136D, joint powers boards established under sections
123A.44 to 123A.446, and Common School Districts No. 323, Franconia, and No. 815,
Prinsburg, are also special taxing districts for purposes of this section.
(e) (f) At the meeting at which the a taxing authority, other than a town, adopts its
proposed tax levy under paragraph (a) or (b) this subdivision, the taxing authority shall
announce the time and place of its subsequent regularly scheduled meetings at which
the budget and levy will be discussed and at which the public will be allowed to speak.
The time and place of those meetings must be included in the proceedings or summary
of proceedings published in the official newspaper of the taxing authority under section
123B.09 , 375.12, or 412.191.
EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.

ARTICLE 3

SALES, USE, AND EXCISE TAXES

    Section 1. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 2,
is amended to read:
    Subd. 2. Qualified business. (a) A business is a qualified business if it satisfies the
requirement of this paragraph and is not disqualified under the provisions of paragraph
(b). To qualify, the business must:
(1) have operated its trade or business in a city or cities in greater Minnesota for at
least one year before applying under subdivision 3;
(2) pay or agree to pay in the future each employee compensation, including benefits
not mandated by law, that on an annualized basis equal at least 120 percent of the federal
poverty level for a family of four;
(3) plan and agree to expand its employment in one or more cities in greater Minnesota
by the minimum number of employees required under subdivision 3, paragraph (c); and
(4) have received certification from the commissioner under subdivision 3 that
it is a qualified business.
(b) A business is not a qualified business if it is either:
(1) primarily engaged in making retail sales to purchasers who are physically present
at the business's location or locations in greater Minnesota; or
(2) a public utility, as defined in section 336B.01; or
(3) primarily engaged in lobbying; gambling; entertainment; professional sports;
political consulting; leisure; hospitality; or professional services provided by attorneys,
accountants, business consultants, physicians, or health care consultants.
(c) The requirements in paragraph (a) that the business's operations and expansion
be located in a city do not apply to an agricultural processing facility.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 3, is
amended to read:
    Subd. 3. Certification of qualified business. (a) A business may apply to the
commissioner for certification as a qualified business under this section. The commissioner
shall specify the form of the application, the manner and times for applying, and the
information required to be included in the application. The commissioner may impose an
application fee in an amount sufficient to defray the commissioner's cost of processing
certifications. A business must file a copy of its application with the chief clerical officer
of the city at the same time it applies to the commissioner. For an agricultural processing
facility located outside the boundaries of a city, the business must file a copy of the
application with the county auditor.
(b) The commissioner shall certify each business as a qualified business that:
(1) satisfies the requirements of subdivision 2;
(2) the commissioner determines would not expand its operations in greater
Minnesota without the tax incentives available under subdivision 4; and
(3) enters a business subsidy agreement with the commissioner that pledges to
satisfy the minimum expansion requirements of paragraph (c) within three years or less
following execution of the agreement.
The commissioner must act on an application within 60 90 days after its filing.
Failure by the commissioner to take action within the 60-day 90-day period is deemed
approval of the application.
(c) The following minimum expansion requirements apply, based on the number of
employees of the business at locations in greater Minnesota:
(1) a business that employs 50 or fewer full-time equivalent employees in greater
Minnesota when the agreement is executed must increase its employment by five or more
full-time equivalent employees;
(2) a business that employs more than 50 but fewer than 200 full-time equivalent
employees in greater Minnesota when the agreement is executed must increase the number
of its full-time equivalent employees in greater Minnesota by at least ten percent; or
(3) a business that employs 200 or more full-time equivalent employees in greater
Minnesota when the agreement is executed must increase its employment by at least 21
full-time equivalent employees (c) The business must increase the number of full-time
equivalent employees in greater Minnesota from the time the business subsidy agreement
is executed by two employees or ten percent, whichever is greater.
(d) The city, or a county for an agricultural processing facility located outside the
boundaries of a city, in which the business proposes to expand its operations may file
comments supporting or opposing the application with the commissioner. The comments
must be filed within 30 days after receipt by the city of the application and may include a
notice of any contribution the city or county intends to make to encourage or support the
business expansion, such as the use of tax increment financing, property tax abatement,
additional city or county services, or other financial assistance.
(e) Certification of a qualified business is effective for the 12-year seven-year period
beginning on the first day of the calendar month immediately following execution of
the business subsidy agreement the date that the commissioner informs the business of
the award of the benefit.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 4, is
amended to read:
    Subd. 4. Available tax incentives. A qualified business is entitled to a sales tax
exemption, up to $2,000,000 annually and $10,000,000 during the total period of the
agreement, as provided in section 297A.68, subdivision 44, for purchases made during
the period the business was certified as a qualified business under this section. The
commissioner has discretion to set the maximum amounts of the annual and total sales tax
exemption allowed for each qualifying business as part of the business subsidy agreement.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. [168A.125] TRANSFER-ON-DEATH OF TITLE TO MOTOR VEHICLE.
    Subdivision 1. Titled as transfer-on-death. A motor vehicle may be titled in
transfer-on-death or TOD form by a natural person by including in the certificate of title a
designation of a beneficiary or beneficiaries who are natural persons to whom the motor
vehicle must be transferred on death of the owner or the last survivor of joint owners with
rights of survivorship, subject to the rights of all secured parties.
    Subd. 2. Designation of beneficiary. A motor vehicle is registered in
transfer-on-death form by designating on the certificate of title the name of the owner
and the names of joint owners with identification of rights of survivorship, followed by
the words "transfer-on-death to (name of beneficiary or beneficiaries)." The designation
"TOD" may be used instead of "transfer-on-death." A title in transfer-on-death form is
not required to be supported by consideration, and the certificate of title in which the
designation is made is not required to be delivered to the beneficiary or beneficiaries in
order for the designation to be effective.
    Subd. 3. Interest of beneficiary. The transfer-on-death beneficiary or beneficiaries
shall have no interest in the motor vehicle until the death of the owner or the last survivor
of the joint owners with right of survivorship. A beneficiary designation may be changed at
any time by the owner or by all joint owners with rights of survivorship, without the consent
of the beneficiary or beneficiaries, by filing an application for a new certificate of title.
    Subd. 4. Vesting of ownership in beneficiary. Ownership of a motor vehicle
titled in transfer-on-death form shall vest in the designated beneficiary or beneficiaries on
the death of the owner or the last of the joint owners with right of survivorship, subject
to the rights of all secured parties. The transfer-on-death beneficiary or beneficiaries
who survive the owner may apply for a new certificate of title to the motor vehicle upon
submitting proof of the death of the owner of the motor vehicle. If no transfer-on-death
beneficiary or beneficiaries survive the owner of a motor vehicle, the motor vehicle must
be included in the probate estate of the deceased owner. A transfer of a motor vehicle to a
transfer-on-death beneficiary or beneficiaries is not a testamentary transfer.
    Subd. 5. Rights of creditors. This section does not limit the rights of any secured
party or creditor of the owner of a motor vehicle against a transfer-on-death beneficiary or
beneficiaries.

    Sec. 5. Minnesota Statutes 2013 Supplement, section 289A.20, subdivision 4, is
amended to read:
    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following the
month in which the taxable event occurred, or following another reporting period as the
commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
(f) or (g), except that use taxes due on an annual use tax return as provided under section
289A.11, subdivision 1 , are payable by April 15 following the close of the calendar year.
    (b) A vendor having a liability of $120,000 $250,000 or more during a fiscal year
ending June 30 must remit the June liability for the next year in the following manner:
    (1) Two business days before June 30 of the year, the vendor must remit 90 81.4
percent of the estimated June liability to the commissioner.
    (2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.
    (c) A vendor having a liability of:
    (1) $10,000 or more, but less than $120,000 $250,000 during a fiscal year ending
June 30, 2013, and fiscal years thereafter, must remit by electronic means all liabilities
on returns due for periods beginning in all subsequent calendar years on or before the
20th day of the month following the month in which the taxable event occurred, or on
or before the 20th day of the month following the month in which the sale is reported
under section 289A.18, subdivision 4; or
(2) $120,000 $250,000 or more, during a fiscal year ending June 30, 2009 2013,
and fiscal years thereafter, must remit by electronic means all liabilities in the manner
provided in paragraph (a) on returns due for periods beginning in the subsequent calendar
year, except for 90 81.4 percent of the estimated June liability, which is due two business
days before June 30. The remaining amount of the June liability is due on August 20.
(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
religious beliefs from paying electronically shall be allowed to remit the payment by mail.
The filer must notify the commissioner of revenue of the intent to pay by mail before
doing so on a form prescribed by the commissioner. No extra fee may be charged to a
person making payment by mail under this paragraph. The payment must be postmarked
at least two business days before the due date for making the payment in order to be
considered paid on a timely basis.
EFFECTIVE DATE.This section is effective for taxes remitted after May 30, 2014.

    Sec. 6. Minnesota Statutes 2012, section 289A.60, subdivision 15, is amended to read:
    Subd. 15. Accelerated payment of June sales tax liability; penalty for
underpayment. For payments made after December 31, 2006 2013, if a vendor is
required by law to submit an estimation of June sales tax liabilities and 90 81.4 percent
payment by a certain date, the vendor shall pay a penalty equal to ten percent of the
amount of actual June liability required to be paid in June less the amount remitted in
June. The penalty must not be imposed, however, if the amount remitted in June equals
the lesser of 90 81.4 percent of the preceding May's liability or 90 81.4 percent of the
average monthly liability for the previous calendar year.
EFFECTIVE DATE.This section is effective for taxes remitted after May 30, 2014.

    Sec. 7. Minnesota Statutes 2012, section 297A.67, subdivision 13a, is amended to read:
    Subd. 13a. Instructional materials. Instructional materials, other than textbooks,
that are prescribed for use in conjunction with a course of study in a postsecondary school,
college, university, or private career school to students who are regularly enrolled at such
institutions are exempt. For purposes of this subdivision, "instructional materials" means
materials required to be used directly in the completion of the course of study, including,
but not limited to, interactive CDs, tapes, digital audio works, digital audiovisual works,
and computer software.
Instructional materials do not include general reference works or other items
incidental to the instructional process such as pens, pencils, paper, folders, or computers.
For purposes of this subdivision, "school" and "private career school" have the meanings
given in subdivision 13.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2012, section 297A.67, is amended by adding a subdivision
to read:
    Subd. 33. Presentations accessed as digital audio and audiovisual works.
The charge for a live or prerecorded presentation, such as a lecture, seminar,
workshop, or course, where participants access the presentation as a digital audio
work or digital audiovisual work, and are connected to the presentation via the
Internet, telecommunications equipment or other device that transfers the presentation
electronically, is exempt if:
(1) participants and the presenter, during the time that participants access the
presentation, are able to give, receive, and discuss the presentation with each other,
although the amount of interaction and when in the presentation the interaction occurs
may be limited by the presenter; and
(2) for those presentations where participants are given the option to attend the
same presentation in person:
(i) any limitations on the amount of interaction and when it occurs during the
presentation are the same for those participants accessing the presentation electronically
as those attending in person; and
(ii) the admission to the in person presentation is not subject to tax under this chapter.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2014.

    Sec. 9. Minnesota Statutes 2012, section 297A.68, is amended by adding a subdivision
to read:
    Subd. 3a. Coin-operated entertainment and amusement devices. Coin-operated
entertainment and amusement devices, including, but not limited to, fortune-telling
machines, cranes, foosball and pool tables, video and pinball games, batting cages, rides,
photo or video booths, and jukeboxes, are exempt when purchased by retailers selling
admission to places of amusement and making available amusement devices as provided
in section 297A.61, subdivision 3, paragraph (g), clause (1).
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2014.

    Sec. 10. Minnesota Statutes 2013 Supplement, section 297A.68, subdivision 42,
is amended to read:
    Subd. 42. Qualified data centers. (a) Purchases of enterprise information
technology equipment and computer software for use in a qualified data center, or a
qualified refurbished 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, or a qualified refurbished
data center.
(b) Electricity used or consumed in the operation of a qualified data center, or a
qualified refurbished data center, is exempt.
(c) For purposes of this subdivision, "qualified data center, or a qualified refurbished
data center," means a facility in Minnesota:
(1) that is comprised of one or more buildings that consist in the aggregate of
at least 25,000 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 $30,000,000 within
a 48-month period;
(2) that is constructed or substantially refurbished after June 30, 2012, where
"substantially refurbished" means that at least 25,000 square feet have been rebuilt or
modified, including:
(i) installation of enterprise information technology equipment, environmental
control, computer software, and energy efficiency improvements; and
(ii) building improvements; 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. For purposes of this subdivision, "computer software" includes, but is
not limited to, software utilized or loaded at the a qualified data center or a qualified
refurbished data center, including maintenance, licensing, and software customization.
(d) For purposes of this subdivision, a "qualified refurbished data center" means an
existing facility that qualifies as a data center under paragraph (c), clauses (2) and (3), but
that is comprised of one or more buildings that consist in the aggregate of at least 25,000
square feet, and that are located on a single parcel or 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.
(e) 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 or a qualified refurbished 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 a qualified data center
or a qualified refurbished data center.
(f) A qualified data center or a qualified refurbished 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.
(g) The purpose of this exemption is to create jobs in the construction and data
center industries.
(h) This subdivision is effective for sales and purchases made after June 30, 2012,
and before July 1, 2042.
EFFECTIVE DATE.This section is effective retroactively for sales and purchases
made after June 30, 2013.

    Sec. 11. Minnesota Statutes 2013 Supplement, section 297A.68, subdivision 44,
is amended to read:
    Subd. 44. Greater Minnesota business expansions. (a) Purchases and use of
tangible personal property or taxable services by a qualified business, as defined in section
116J.8738 , are exempt if:
(1) the business subsidy agreement provides that the exemption under this
subdivision applies;
(2) the property or services are primarily used or consumed at the facility in greater
Minnesota identified in the business subsidy agreement; and
(3) the purchase was made and delivery received during the duration of the
certification of the business as a qualified business under section 116J.8738.
(b) Purchase and use of construction materials and supplies used or consumed in,
and equipment incorporated into, the construction of improvements to real property in
greater Minnesota are exempt if the improvements after completion of construction are
to be used in the conduct of the trade or business of the qualified business, as defined in
section 116J.8738. This exemption applies regardless of whether the purchases are made
by the business or a contractor.
(c) The exemptions under this subdivision apply to a local sales and use tax.
(d) The tax on purchases imposed under this subdivision must be imposed and
collected as if the rate under section 297A.62 applied, and then refunded in the manner
provided in section 297A.75. The total amount refunded for a facility over the certification
period is limited to the amount listed in the business subsidy agreement. No more than
$7,000,000 may be refunded in a fiscal year for all purchases under this subdivision.
Refunds must be allocated on a first-come, first-served basis. If more than $7,000,000 of
eligible claims are made in a fiscal year, claims by qualified businesses carry over to the
next fiscal year, and the commissioner must first allocate refunds to qualified businesses
eligible for a refund in the preceding fiscal year. Any portion of the balance of funds
allocated for refunds under this paragraph does not cancel and shall be carried forward to
and available for refunds in subsequent fiscal years.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2013 Supplement, 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, local governments, 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 473.4051;
(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and
(6) public libraries, public library systems, multicounty, multitype library systems
as defined in section 134.001, county law libraries under chapter 134A, state agency
libraries, the state library under section 480.09, and the Legislative Reference Library.
(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 297B.01, subdivision 11,
except for leases entered into by the United States or its agencies or instrumentalities;
(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
297A.67, subdivision 2 , except for lodging, prepared food, candy, soft drinks, and alcoholic
beverages purchased directly by the United States or its agencies or instrumentalities; or
(5) goods or services purchased by a local government 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 a liquor store, gas or
electric utility, solid waste hauling service, solid waste recycling service, landfill, golf
course, marina, health and fitness center, campground, cafe, or laundromat.
(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 471.59.
(d) As used in this subdivision, "local governments" means:
(1) home rule charter or statutory cities,;
(2) counties, and;
(3) townships.;
(4) housing and redevelopment authorities under sections 469.001 to 469.047;
(5) port authorities under sections 469.048 to 469.068;
(6) economic development authorities under sections 469.090 to 469.1081; and
(7) any joint powers board or organization created under section 471.59 provided
that at least 50 percent or more of the governmental units that are party to the joint powers
agreement are exempt from sales tax under clauses (1) to (6) or paragraph (a).
(e) 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.The amendment to paragraph (d) is effective for sales and
purchases made after June 30, 2015. The other amendments to this section are effective
for sales and purchases made after June 30, 2014.

    Sec. 13. Minnesota Statutes 2013 Supplement, section 297A.70, subdivision 13,
is amended to read:
    Subd. 13. Fund-raising sales by or for nonprofit groups. (a) The following
sales by the specified organizations for fund-raising purposes are exempt, subject to the
limitations listed in paragraph (b):
(1) all sales made by a nonprofit organization that exists solely for the purpose of
providing educational or social activities for young people primarily age 18 and under;
(2) all sales made by an organization that is a senior citizen group or association of
groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized
and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii)
no part of its net earnings inures to the benefit of any private shareholders;
(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if
the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization
under section 501(c)(3) of the Internal Revenue Code; and
(4) sales of candy sold for fund-raising purposes by a nonprofit organization that
provides educational and social activities primarily for young people age 18 and under.
(b) The exemptions listed in paragraph (a) are limited in the following manner:
(1) the exemption under paragraph (a), clauses (1) and (2), applies only if to the first
$20,000, as adjusted under paragraph (e), of the gross annual receipts of the organization
from fund-raising do not exceed $10,000; and
(2) the exemption under paragraph (a), clause (1), does not apply if the sales are
derived from admission charges or from activities for which the money must be deposited
with the school district treasurer under section 123B.49, subdivision 2, or be recorded in
the same manner as other revenues or expenditures of the school district under section
123B.49, subdivision 4 .
(c) Sales of tangible personal property and services are exempt if the entire proceeds,
less the necessary expenses for obtaining the property or services, will be contributed to
a registered combined charitable organization described in section 43A.50, to be used
exclusively for charitable, religious, or educational purposes, and the registered combined
charitable organization has given its written permission for the sale. Sales that occur over
a period of more than 24 days per year are not exempt under this paragraph.
(d) For purposes of this subdivision, a club, association, or other organization of
elementary or secondary school students organized for the purpose of carrying on sports,
educational, or other extracurricular activities is a separate organization from the school
district or school for purposes of applying the $10,000 $20,000 limit, as adjusted under
paragraph (e).
(e) By December 1, 2015, and every December 1 thereafter, the commissioner shall
calculate and publish an adjusted exemption limit for this subdivision. The adjusted
limit is equal to $20,000 multiplied by the ratio of the Consumer Price Index for urban
consumers for the most recently available calendar year to the Consumer Price Index
for urban consumers for calendar year 2013, as prepared by the United States Bureau
of Labor Statistics.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2014.

    Sec. 14. Minnesota Statutes 2013 Supplement, section 297A.70, subdivision 14,
is amended to read:
    Subd. 14. Fund-raising events sponsored by nonprofit groups. (a) Sales of
tangible personal property or services at, and admission charges for fund-raising events
sponsored by, a nonprofit organization are exempt if:
(1) all gross receipts are recorded as such, in accordance with generally accepted
accounting practices, on the books of the nonprofit organization; and
(2) the entire proceeds, less the necessary expenses for the event, will be used solely
and exclusively for charitable, religious, or educational purposes. Exempt sales include
the sale of prepared food, candy, and soft drinks at the fund-raising event.
(b) This exemption is limited in the following manner:
(1) it does not apply to admission charges for events involving bingo or other
gambling activities or to charges for use of amusement devices involving bingo or other
gambling activities;
(2) all gross receipts are taxable if the profits are not used solely and exclusively for
charitable, religious, or educational purposes;
(3) it does not apply unless the organization keeps a separate accounting record,
including receipts and disbursements from each fund-raising event that documents all
deductions from gross receipts with receipts and other records;
(4) it does not apply to any sale made by or in the name of a nonprofit corporation as
the active or passive agent of a person that is not a nonprofit corporation;
(5) all gross receipts are taxable if fund-raising events exceed 24 days per year;
(6) it does not apply to fund-raising events conducted on premises leased for more
than five days but less than 30 days; and
(7) it does not apply if the risk of the event is not borne by the nonprofit organization
and the benefit to the nonprofit organization is less than the total amount of the state and
local tax revenues forgone by this exemption.
(c) For purposes of this subdivision, a "nonprofit organization" means any unit of
government, corporation, society, association, foundation, or institution organized and
operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
veterans' purposes, no part of the net earnings of which inures to the benefit of a private
individual.
(d) For purposes of this subdivision, "fund-raising events" means activities of
limited duration, not regularly carried out in the normal course of business, that attract
patrons for community, social, and entertainment purposes, such as auctions, bake sales,
ice cream socials, block parties, carnivals, competitions, concerts, concession stands,
craft sales, bazaars, dinners, dances, door-to-door sales of merchandise, fairs, fashion
shows, festivals, galas, special event workshops, sporting activities such as marathons and
tournaments, and similar events. Fund-raising events do not include the operation of a
regular place of business in which services are provided or sales are made during regular
hours such as bookstores, thrift stores, gift shops, restaurants, ongoing Internet sales,
regularly scheduled classes, or other activities carried out in the normal course of business.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2014.

    Sec. 15. Minnesota Statutes 2012, section 297A.71, is amended by adding a
subdivision to read:
    Subd. 49. Donated materials for a library expansion. Building materials and
supplies purchased and donated by a private entity and used in the construction of an
addition to a city library facility are exempt.
EFFECTIVE DATE.This section is effective for materials and supplies used in
construction occurring after April 1, 2014, and before July 1, 2015.

    Sec. 16. Minnesota Statutes 2013 Supplement, section 297B.01, subdivision 16,
is amended to read:
    Subd. 16. Sale, sells, selling, purchase, purchased, or acquired. (a) "Sale,"
"sells," "selling," "purchase," "purchased," or "acquired" means any transfer of title of any
motor vehicle, whether absolutely or conditionally, for a consideration in money or by
exchange or barter for any purpose other than resale in the regular course of business.
    (b) Any motor vehicle utilized by the owner only by leasing such vehicle to others
or by holding it in an effort to so lease it, and which is put to no other use by the owner
other than resale after such lease or effort to lease, shall be considered property purchased
for resale.
    (c) The terms also shall include any transfer of title or ownership of a motor vehicle
by other means, for or without consideration, except that these terms shall not include:
    (1) the acquisition of a motor vehicle by inheritance from or by bequest of, or
transfer-on-death of title by, a decedent who owned it;
    (2) the transfer of a motor vehicle which was previously licensed in the names of
two or more joint tenants and subsequently transferred without monetary consideration to
one or more of the joint tenants;
    (3) the transfer of a motor vehicle by way of gift from a limited used vehicle dealer
licensed under section 168.27, subdivision 4a, to an individual, when the transfer is with
no monetary or other consideration or expectation of consideration and the parties to the
transfer submit an affidavit to that effect at the time the title transfer is recorded;
    (4) the transfer of a motor vehicle by gift between:
(i) spouses;
(ii) parents and a child; or
(iii) grandparents and a grandchild;
(5) the voluntary or involuntary transfer of a motor vehicle between a husband and
wife in a divorce proceeding; or
    (6) the transfer of a motor vehicle by way of a gift to an organization that is exempt
from federal income taxation under section 501(c)(3) of the Internal Revenue Code when
the motor vehicle will be used exclusively for religious, charitable, or educational purposes.

    Sec. 17. Minnesota Statutes 2012, 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 465.71, of any motor vehicle by the United States
and its agencies and instrumentalities and by any person described in and subject to the
conditions provided in section 297A.67, subdivision 11;
    (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 297A.90;
    (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 by an ambulance service licensed under section
144E.10 when that vehicle is equipped and specifically intended for emergency response
or for providing ambulance service;
    (8) purchase of a motor vehicle by or for a public library, as defined in section
134.001, subdivision 2 , as a bookmobile or library delivery vehicle;
    (9) purchase of a ready-mixed concrete truck;
    (10) purchase or use of a motor vehicle by a town home rule charter or statutory cities,
counties, and townships or any joint powers board or organization created under section
471.59 where at least 50 percent of the members of the agreement are home rule charter or
statutory cities, counties, or townships, 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 168.002, a bus, as defined in section 168.002, or a
passenger automobile, as defined in section 168.002, if the automobile is designed and
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 174.24 or 473.384, or (ii) operating under section 174.29,
473.388 , or 473.405;
    (13) purchase or use of a motor vehicle by a qualified business, as defined in section
469.310 , located in a job opportunity building zone, if the motor vehicle is principally
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;
    (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 168.27, subdivision 4; and
(15) purchase of a motor vehicle used exclusively as a mobile medical unit for the
provision of medical or dental services by a federally qualified health center, as defined
under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus
Budget Reconciliation Act of 1990.
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2015.

    Sec. 18. Minnesota Statutes 2012, section 297F.09, subdivision 10, is amended to read:
    Subd. 10. Accelerated tax payment; cigarette or tobacco products distributor.
    A cigarette or tobacco products distributor having a liability of $120,000 $250,000 or
more during a fiscal year ending June 30, shall remit the June liability for the next year
in the following manner:
    (a) Two business days before June 30 of the year, the distributor shall remit the
actual May liability and 90 81.4 percent of the estimated June liability to the commissioner
and file the return in the form and manner prescribed by the commissioner.
    (b) On or before August 18 of the year, the distributor shall submit a return showing
the actual June liability and pay any additional amount of tax not remitted in June. A
penalty is imposed equal to ten percent of the amount of June liability required to be paid
in June, less the amount remitted in June. However, the penalty is not imposed if the
amount remitted in June equals the lesser of:
    (1) 90 81.4 percent of the actual June liability; or
    (2) 90 81.4 percent of the preceding May's May liability.
EFFECTIVE DATE.This section is effective for taxes remitted after May 30, 2014.

    Sec. 19. Minnesota Statutes 2012, section 297G.03, is amended by adding a
subdivision to read:
    Subd. 5. Microdistillery credit. (a) A qualified distiller producing distilled spirits is
entitled to a tax credit of $1.33 per liter on 100,000 liters sold in any fiscal year beginning
July 1. A qualified distiller may take the credit on the 18th day of each month, but the total
credit allowed may not exceed in any fiscal year the lesser of:
(1) the liability for tax; or
(2) $133,000.
(b) For purposes of this subdivision, "qualified distiller" means a microdistillery
qualifying under section 340A.101, subdivision 17a, in the calendar year immediately
preceding the calendar year for which the credit under this subdivision is claimed.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 20. Minnesota Statutes 2012, section 297G.09, subdivision 9, is amended to read:
    Subd. 9. Accelerated tax payment; penalty. A person liable for tax under this
chapter having a liability of $120,000 $250,000 or more during a fiscal year ending June
30, shall remit the June liability for the next year in the following manner:
    (a) Two business days before June 30 of the year, the taxpayer shall remit the actual
May liability and 90 81.4 percent of the estimated June liability to the commissioner and
file the return in the form and manner prescribed by the commissioner.
    (b) On or before August 18 of the year, the taxpayer shall submit a return showing
the actual June liability and pay any additional amount of tax not remitted in June. A
penalty is imposed equal to ten percent of the amount of June liability required to be paid
in June less the amount remitted in June. However, the penalty is not imposed if the
amount remitted in June equals the lesser of:
    (1) 90 81.4 percent of the actual June liability; or
    (2) 90 81.4 percent of the preceding May liability.
EFFECTIVE DATE.This section is effective for taxes remitted after May 30, 2014.

    Sec. 21. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
chapter 291, article 8, section 22, Laws 1998, chapter 389, article 8, section 25, Laws
2003, First Special Session chapter 21, article 8, section 11, and Laws 2008, chapter
154, article 5, section 2, is amended to read:
    Subd. 2. (a) Notwithstanding Minnesota Statutes, section 477A.016, or any
other law, ordinance, or city charter provision to the contrary, the city of Duluth may,
by ordinance, impose an additional sales tax of up to two and one-quarter one and
three-quarter percent on sales transactions which are described in Minnesota Statutes 2000,
section 297A.01, subdivision 3, clause (c). When the city council determines that the taxes
imposed under this subdivision and under Laws 1998, chapter 389, article 8, section 26, at a
rate of one-half of one percent have produced revenue sufficient to pay (1) the debt service
on bonds in a principal amount of $8,000,000 issued for capital improvements to the
Duluth Entertainment and Convention Center, and (2) debt service on outstanding bonds
originally issued in the principal amount of $4,970,000 to finance capital improvements to
the Great Lakes Aquarium since the imposition of the taxes at the rate of one and one-half
percent, the rate of the tax under this subdivision is reduced by one-half of one percent.
The imposition of this tax shall not be subject to voter referendum under either state law
or city charter provisions. When the city council determines that the taxes imposed under
this subdivision paragraph at a rate of three-quarters of one percent and other sources of
revenue produce revenue sufficient to pay debt service on bonds in the principal amount
of $40,285,000 plus issuance and discount costs, issued for capital improvements at the
Duluth Entertainment and Convention Center, which include a new arena, the rate of tax
under this subdivision must be reduced by three-quarters of one percent.
(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes,
section 477A.016, or any other law, ordinance, or city charter provision to the contrary,
the city of Duluth may, by ordinance, impose an additional sales tax of up to one-half of
one percent on sales transactions which are described in Minnesota Statutes 2000, section
297A.01, subdivision 3, clause (c). This tax expires when the city council determines
that the tax imposed under this paragraph, along with the tax imposed under section
22, paragraph (b), has produced revenues sufficient to pay the debt service on bonds
in a principal amount of no more than $18,000,000, plus issuance and discount costs,
to finance capital improvements to public facilities to support tourism and recreational
activities in that portion of the city west of 34th Avenue West.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 22. Laws 1980, chapter 511, section 2, as amended by Laws 1998, chapter 389,
article 8, section 26, and Laws 2003, First Special Session chapter 21, article 8, section
12, is amended to read:
    Sec. 22. CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND
MOTELS.
    (a) Notwithstanding Minnesota Statutes, section 477A.016, or any other law, or
ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
impose an additional tax of one and one-half percent upon the gross receipts from the
sale of lodging for periods of less than 30 days in hotels and motels located in the city.
When the city council determines that the taxes imposed under this section and section 25
at a rate of one-half of one percent have produced revenue sufficient to pay (1) the debt
service on bonds in a principal amount of $8,000,000 issued for capital improvements
for the Duluth Entertainment and Convention Center, and (2) the debt service on
outstanding bonds originally issued in the principal amount of $4,970,000 to finance
capital improvements to the Great Lakes Aquarium since the imposition of the taxes at the
rate of one and one-half percent, the rate of the tax under this section is reduced to one
percent. The tax shall be collected in the same manner as the tax set forth in the Duluth
city charter, section 54(d), paragraph one. The imposition of this tax shall not be subject to
voter referendum under either state law or city charter provisions.
(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes,
section 477A.016, or any other law, ordinance, or city charter provision to the contrary,
the city of Duluth may, by ordinance, impose an additional sales tax of up to one-half
of one percent on the gross receipts from the sale of lodging for periods of less than
30 days in hotels and motels located in the city. This tax expires when the city council
first determines that the tax imposed under this paragraph, along with the tax imposed
under section 21, paragraph (b), has produced revenues sufficient to pay the debt
service on bonds in a principal amount of no more than $18,000,000, plus issuance and
discount costs, to finance capital improvements to public facilities to support tourism and
recreational activities in that portion of the city west of 34th Avenue West.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 23. Laws 2005, First Special Session chapter 3, article 5, section 38, subdivision
4, is amended to read:
    Subd. 4. Termination of taxes. The taxes imposed under this section expire at the
earlier of (1) ten 15 years after the taxes are first imposed, or (2) when the city council first
determines that the amount of revenues raised to pay for the projects under subdivision 2,
shall meet or exceed the sum of $15,000,000. Any funds remaining after completion of
the projects 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 Albert Lea and its chief clerical officer with Minnesota
Statutes, section 645.021, subdivisions 2 and 3.

    Sec. 24. Laws 2006, chapter 259, article 3, section 10, subdivision 3, is amended to read:
    Subd. 3. Use of revenues. (a) Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax
and to finance the acquisition and betterment of water and wastewater facilities to serve the
cities of Brainerd and Baxter, building and equipping a fire substation, as approved by the
voters at the referendum authorizing the tax. Authorized costs include, but are not limited
to, acquiring property and paying construction and engineering costs related to the projects.
(b) In addition to the projects authorized in paragraph (a), the city of Baxter may,
if approved by the voters at an election under subdivision 5, paragraph (b), allocate up
to an additional $32,000,000 of the revenues received from the taxes authorized by
subdivisions 1 and 2 to a capital infrastructure fund. Money from this fund may only be
used to finance (1) sanitary sewer, storm sewer, and water projects, and (2) transportation
safety improvements.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Baxter and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 25. Laws 2006, chapter 259, article 3, section 10, subdivision 4, is amended to read:
    Subd. 4. Bonds. (a) The city of Baxter, pursuant to the approval of the voters at the
November 2, 2004, referendum authorizing the imposition of the taxes in this section, may
issue general obligation bonds of the city, in one or more series, in the aggregate principal
amount not to exceed $15,000,000 to finance the projects listed in subdivision 3, paragraph
(a). The debt represented by the bonds is not included in computing any debt limitations
applicable to the city, and the levy of taxes required by Minnesota Statutes, section 475.61,
to pay the principal of and interest on the bonds is not subject to any levy limitation or
included in computing or applying any levy limitation applicable to the city of Baxter.
(b) The city of Baxter, pursuant to the approval of the voters at the 2014 general
election to extend the tax under this section, may issue general obligation bonds of the
city, in one or more series, in the aggregate principal amount not to exceed $32,000,000
plus an amount equal to the costs of issuance of the bonds to finance the projects listed
in subdivision 3, paragraph (b). The debt represented by the bonds is not included in
computing any debt limitations applicable to the city, and the levy of taxes required by
Minnesota Statutes, section 475.61, to pay the principal of and interest on the bonds is not
subject to any levy limitation or included in computing or applying any levy limitation
applicable to the city of Baxter.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 26. Laws 2006, chapter 259, article 3, section 10, subdivision 5, is amended to read:
    Subd. 5. Termination of taxes. (a) The taxes imposed under subdivisions 1 and 2
expire at the earlier of a date 12 years after the imposition of the tax or when the Baxter
City Council first determines that the amount of revenues raised from the taxes to pay for
the projects under subdivision 3 equals or exceeds $15,000,000 plus any interest on bonds
issued for the projects under subdivision 4, paragraph (a). Any funds remaining after the
expiration of the taxes and retirement of the bonds shall be placed in a capital project fund
of the city of Baxter. The taxes imposed under subdivisions 1 and 2 may expire at an
earlier time if the city of Baxter so determines by ordinance.
(b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
other contrary provision of law, ordinance, or city charter, the city of Baxter may, by
ordinance, extend the taxes authorized under subdivisions 1 and 2 beyond the termination
date in paragraph (a) if approved by the voters of the city at a general election held in
2014. The question put to the voters must indicate that an affirmative vote would extend
the imposition of the taxes until 2031 or until an additional $32,000,000, plus an amount
equal to interest and issuance costs associated with bonds issued under subdivision 4,
paragraph (b), above the initial amount authorized to pay for $15,000,000 in bonds and
associated bond cost and projects, listed in subdivision 3, paragraph (a), is raised. If
extended under this paragraph, the taxes authorized in subdivisions 1 and 2 will terminate
at the earlier of (1) when an additional $32,000,000, plus an amount equal to interest and
issuance costs associated with bonds issued under subdivision 4, paragraph (b), above the
amount authorized under paragraph (a), is raised, or (2) December 31, 2031.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Baxter and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 27. Laws 2006, chapter 259, article 3, section 11, subdivision 3, is amended to read:
    Subd. 3. Use of revenues. (a) Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax
and to finance all or part of the costs of constructing upgraded water and wastewater
treatment facilities to serve the cities of Brainerd and Baxter, water infrastructure
improvements, and trail development, contingent on approval by Brainerd voters at the
November 7, 2006, referendum. Authorized costs include, but are not limited to, acquiring
property and paying construction and engineering costs related to the projects.
(b) In addition to the projects authorized in paragraph (a), the city of Brainerd may,
if approved by the voters at an election under subdivision 5, paragraph (b), spend up to an
additional $15,000,000 from revenues raised from the taxes authorized in subdivisions 1
and 2 on the following projects:
(1) an upgraded waste treatment facility jointly serving the cities of Brainerd and
Baxter;
(2) with any funds not needed for the project in clause (1), water infrastructure
improvements; and
(3) with any funds not needed for the projects in clauses (1) and (2), trail
improvements.
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Brainerd and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 28. Laws 2006, chapter 259, article 3, section 11, subdivision 4, is amended to read:
    Subd. 4. Bonds. The city of Brainerd, contingent on approval of the voters at
the November 7, 2006, referendum authorizing the imposition of taxes in this section,
may issue general obligation bonds of the city, in one or more series, in the aggregate
principal amount not to exceed $22,030,000 to finance the projects listed in subdivision 3,
paragraph (a). The debt represented by the bonds is not included in computing any debt
limitations applicable to Brainerd, and the levy of taxes required by Minnesota Statutes,
section 475.61, to pay the principal and interest on the bonds is not subject to any levy
limitation or included in computing any levy limitation applicable to the city of Brainerd.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 29. Laws 2006, chapter 259, article 3, section 11, subdivision 5, is amended to read:
    Subd. 5. Termination of taxes. (a) The taxes imposed under subdivisions 1 and
2 expire at the earlier of a date 12 years after the imposition of the tax or when the city
council first determines that the amount of revenues raised from the taxes to pay for
projects under subdivision 3 equals or exceeds $22,030,000 plus any interest on bonds
issued for the projects under subdivision 4. Any funds remaining after the expiration of
the taxes and retirement of the bonds shall be placed in a capital project fund of the city of
Brainerd. The taxes imposed under subdivision 1 and 2 may expire at an earlier time if the
city of Brainerd so determines by ordinance.
(b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
other contrary provision of law, ordinance, or city charter, the city of Brainerd may, by
ordinance, extend the taxes authorized under subdivisions 1 and 2 beyond the termination
date in paragraph (a) if approved by the voters of the city at a general election held in 2014.
The question put to the voters must indicate that an affirmative vote would extend the
imposition of the taxes for an additional 12 years or until an additional $15,000,000 above
the initial amount authorized to pay for $22,030,000 in bonds is raised. If extended under
this paragraph, the taxes authorized in subdivisions 1 and 2 will terminate at the earlier of
(1) when an additional $15,000,000 above the amount authorized under paragraph (a) is
raised, or (2) 12 years after the taxes would have expired under paragraph (a).
EFFECTIVE DATE.This section is effective the day after the governing body of
the city of Brainerd and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.

    Sec. 30. Laws 2013, chapter 143, article 8, section 37, the effective date, is amended to
read:
EFFECTIVE DATE.This section is effective retroactively to capital investments
made and jobs created after December 31, 2012, and effective retroactively for sales and
purchases made after December 31, 2012, and before July 1, 2019. Applications for
refunds on purchases exempt under this section must not be filed before June 30, 2015.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 31. VALIDATION OF PRIOR ACT; AUTHORIZATION.
Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city of
Albert Lea may approve Laws 2005, First Special Session chapter 3, article 5, section 38,
as amended by Laws 2006, chapter 259, article 3, section 6, and file its approval with the
secretary of state by June 15, 2014. If approved as authorized under this section, actions
undertaken by the city pursuant to the approval of the voters on November 8, 2005, and
otherwise in accordance with Laws 2005, First Special Session chapter 3, article 5, section
38, as amended by Laws 2006, chapter 259, article 3, section 6, are validated.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 32. TEMPORARY SALES TAX AMNESTY; ANIMAL SHELTERS.
(a) Notwithstanding any other law to the contrary, amnesty is provided to any
nonprofit organization that is primarily engaged in the business of rescuing, sheltering, and
finding homes for unwanted animals if the organization registers and begins collecting the
sales and use tax within four months of the day following enactment of this provision. This
amnesty applies to qualifying organizations that are currently not registered to collect the
tax under Minnesota Statutes, chapter 297A, and to qualifying organizations that received
notice of the commencement of an audit and the audit is not yet finally resolved, provided
that the organization was not registered to collect sales and use tax at the time of the audit.
(b) The amnesty shall preclude assessment for uncollected and unpaid sales and use
tax under Minnesota Statutes, chapter 297A, and to local taxes subject to Minnesota
Statutes, section 297A.99, together with penalty and interest for sales made during the
period the qualifying organization was not registered in this state. The amnesty also
applies to unpaid use tax on sales made by the organization during the same period. The
amnesty is not available for sales and use taxes already paid or remitted to the state or to
sales taxes already collected by the seller.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 33. TEMPORARY SALES TAX AMNESTY; AGRICULTURAL CENTERS.
(a) Notwithstanding any other law to the contrary, amnesty is provided on unpaid
sales tax attributable only to sales of tickets or admissions to a performance or event on
the premises of a tax-exempt organization under section 501(c)(3) of the Internal Revenue
Code, provided that the nonprofit organization is primarily engaged in the business of
preserving Minnesota's rural agricultural heritage and educating the public about rural
history and how farms in Minnesota helped to provide food for the nation and the world,
and begins collecting the sales and use tax on sales of tickets or admissions by July 1, 2014.
(b) An organization qualifies for an exemption under this section if:
(1) the premises of the organization is at least 115 acres;
(2) the performances or events were sponsored and conducted exclusively by
volunteers, employees of the nonprofit organization, or members of the board of directors
of the organization; and
(3) the performances or events were consistent with the organization's purposes
under section 501(c)(3) of the Internal Revenue Code.
(c) This amnesty applies to qualifying organizations that received notice of the
commencement of an audit and the audit is not yet finally resolved.
(d) Amnesty granted under this section precludes assessment for uncollected and
unpaid sales and use tax under Minnesota Statutes, chapter 297A, and to local taxes
subject to Minnesota Statutes, section 297A.99, together with penalty and interest for sales
made during the period beginning December 31, 2008, and ending December 31, 2011.
The amnesty is not available for sales and use taxes already paid or remitted to the state or
to sales taxes already collected by the seller.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 4

INCOME AND ESTATE TAXES

    Section 1. Minnesota Statutes 2013 Supplement, section 116J.8737, subdivision 2, as
amended by Laws 2014, chapter 150, article 1, section 2, is amended to read:
    Subd. 2. Certification of qualified small businesses. (a) Businesses may apply
to the commissioner for certification as a qualified small business or qualified greater
Minnesota small business for a calendar year. The application must be in the form
and be made under the procedures specified by the commissioner, accompanied by an
application fee of $150. Application fees are deposited in the small business investment
tax credit administration account in the special revenue fund. The application for
certification for 2010 must be made available on the department's Web site by August 1,
2010. Applications for subsequent years' certification must be made available on the
department's Web site by November 1 of the preceding year.
(b) Within 30 days of receiving an application for certification under this subdivision,
the commissioner must either certify the business as satisfying the conditions required
of a qualified small business or qualified greater Minnesota small business, request
additional information from the business, or reject the application for certification. If
the commissioner requests additional information from the business, the commissioner
must either certify the business or reject the application within 30 days of receiving the
additional information. If the commissioner neither certifies the business nor rejects
the application within 30 days of receiving the original application or within 30 days of
receiving the additional information requested, whichever is later, then the application is
deemed rejected, and the commissioner must refund the $150 application fee. A business
that applies for certification and is rejected may reapply.
(c) To receive certification as a qualified small business, a business must satisfy
all of the following conditions:
(1) the business has its headquarters in Minnesota;
(2) at least 51 percent of the business's employees are employed in Minnesota, and
51 percent of the business's total payroll is paid or incurred in the state;
(3) the business is engaged in, or is committed to engage in, innovation in Minnesota
in one of the following as its primary business activity:
(i) using proprietary technology to add value to a product, process, or service in a
qualified high-technology field;
(ii) researching or developing a proprietary product, process, or service in a qualified
high-technology field; or
(iii) researching or developing a proprietary product, process, or service in the fields
of agriculture, tourism, forestry, mining, manufacturing, or transportation; or
(iii) (iv) researching, developing, or producing a new proprietary technology for use
in the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;
(4) other than the activities specifically listed in clause (3), the business is not
engaged in real estate development, insurance, banking, lending, lobbying, political
consulting, information technology consulting, wholesale or retail trade, leisure,
hospitality, transportation, construction, ethanol production from corn, or professional
services provided by attorneys, accountants, business consultants, physicians, or health
care consultants;
(5) the business has fewer than 25 employees;
(6) the business must pay its employees annual wages of at least 175 percent of the
federal poverty guideline for the year for a family of four and must pay its interns annual
wages of at least 175 percent of the federal minimum wage used for federally covered
employers, except that this requirement must be reduced proportionately for employees
and interns who work less than full-time, and does not apply to an executive, officer, or
member of the board of the business, or to any employee who owns, controls, or holds
power to vote more than 20 percent of the outstanding securities of the business;
(7) the business has (i) not been in operation for more than ten years, or (ii) not
been in operation for more than 20 years if the business is engaged in the research,
development, or production of medical devices or pharmaceuticals for which United
States Food and Drug Administration approval is required for use in the treatment or
diagnosis of a disease or condition;
(8) the business has not previously received private equity investments of more
than $4,000,000;
    (9) the business is not an entity disqualified under section 80A.50, paragraph (b),
clause (3); and
(10) the business has not issued securities that are traded on a public exchange.
(d) In applying the limit under paragraph (c), clause (5), the employees in all members
of the unitary business, as defined in section 290.17, subdivision 4, must be included.
(e) In order for a qualified investment in a business to be eligible for tax credits:
(1) the business must have applied for and received certification for the calendar
year in which the investment was made prior to the date on which the qualified investment
was made;
(2) the business must not have issued securities that are traded on a public exchange;
(3) the business must not issue securities that are traded on a public exchange within
180 days after the date on which the qualified investment was made; and
(4) the business must not have a liquidation event within 180 days after the date on
which the qualified investment was made.
(f) The commissioner must maintain a list of qualified small businesses and qualified
greater Minnesota businesses certified under this subdivision for the calendar year and
make the list accessible to the public on the department's Web site.
(g) For purposes of this subdivision, the following terms have the meanings given:
(1) "qualified high-technology field" includes aerospace, agricultural processing,
renewable energy, energy efficiency and conservation, environmental engineering, food
technology, cellulosic ethanol, information technology, materials science technology,
nanotechnology, telecommunications, biotechnology, medical device products,
pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar fields;
(2) "proprietary technology" means the technical innovations that are unique and
legally owned or licensed by a business and includes, without limitation, those innovations
that are patented, patent pending, a subject of trade secrets, or copyrighted; and
(3) "greater Minnesota" means the area of Minnesota located outside of the
metropolitan area as defined in section 473.121, subdivision 2.
(h) To receive certification as a qualified greater Minnesota business, a business must
satisfy all of the requirements of paragraph (c) and must satisfy the following conditions:
(1) the business has its headquarters in greater Minnesota; and
(2) at least 51 percent of the business's employees are employed in greater Minnesota,
and 51 percent of the business's total payroll is paid or incurred in greater Minnesota.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 2. Minnesota Statutes 2012, section 116J.8737, is amended by adding a
subdivision to read:
    Subd. 5a. Promotion of credit in greater Minnesota. (a) By July 1, 2014,
the commissioner shall develop a plan to increase awareness of and use of the credit
for investments in qualified greater Minnesota businesses and minority-owned and
women-owned qualified small businesses with the goal that the portion of the credit
reserved for investments in qualified greater Minnesota businesses and minority-owned
and women-owned qualified small businesses is allocated in full to those investments.
(b) Beginning with the legislative report due on March 15, 2015, under subdivision
9, the commissioner shall report on its plan under this subdivision and the results achieved.

    Sec. 3. Minnesota Statutes 2013 Supplement, section 270B.01, subdivision 8, is
amended to read:
    Subd. 8. Minnesota tax laws. For purposes of this chapter only, unless expressly
stated otherwise, "Minnesota tax laws" means:
    (1) the taxes, refunds, and fees administered by or paid to the commissioner under
chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24),
290, 290A, 291, 292, 295, 297A, 297B, 297H, and 403, or any similar Indian tribal tax
administered by the commissioner pursuant to any tax agreement between the state and
the Indian tribal government, and includes any laws for the assessment, collection, and
enforcement of those taxes, refunds, and fees; and
    (2) section 273.1315.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2013 Supplement, section 270B.03, subdivision 1, is
amended to read:
    Subdivision 1. Who may inspect. Returns and return information must, on request,
be made open to inspection by or disclosure to the data subject. The request must be made
in writing or in accordance with written procedures of the chief disclosure officer of the
department that have been approved by the commissioner to establish the identification
of the person making the request as the data subject. For purposes of this chapter, the
following are the data subject:
(1) in the case of an individual return, that individual;
(2) in the case of an income tax return filed jointly, either of the individuals with
respect to whom the return is filed;
(3) in the case of a return filed by a business entity, an officer of a corporation,
a shareholder owning more than one percent of the stock, or any shareholder of an S
corporation; a general partner in a partnership; the owner of a sole proprietorship; a
member or manager of a limited liability company; a participant in a joint venture; the
individual who signed the return on behalf of the business entity; or an employee who is
responsible for handling the tax matters of the business entity, such as the tax manager,
bookkeeper, or managing agent;
(4) in the case of an estate return:
(i) the personal representative or trustee of the estate; and
(ii) any beneficiary of the estate as shown on the federal estate tax return;
(5) in the case of a trust return:
(i) the trustee or trustees, jointly or separately; and
(ii) any beneficiary of the trust as shown in the trust instrument;
(6) if liability has been assessed to a transferee under section 270C.58, subdivision
1 , the transferee is the data subject with regard to the returns and return information
relating to the assessed liability;
(7) in the case of an Indian tribal government or an Indian tribal government-owned
entity,
(i) the chair of the tribal government, or
(ii) any person authorized by the tribal government; and
(8) in the case of a successor as defined in section 270C.57, subdivision 1, paragraph
(b), the successor is the data subject and information may be disclosed as provided by
section 270C.57, subdivision 4; and.
(9) in the case of a gift return, the donor.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2012, section 289A.02, subdivision 7, as amended by Laws
2014, chapter 150, article 1, section 7, is amended to read:
    Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
20, 2013 March 26, 2014.
EFFECTIVE DATE.This section is effective retroactively for taxable years
beginning after December 31, 2012.

    Sec. 6. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 19, as
amended by Laws 2014, chapter 150, article 1, section 9, 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 December 20, 2013 March
26, 2014, shall be in effect for taxable years beginning after December 31, 1996.
    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 the changes incorporated by federal changes are effective retroactively at the same
time as the changes were effective for federal purposes.

    Sec. 7. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 19b, as
amended by Laws 2014, chapter 150, article 1, section 11, is amended to read:
    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:
    (1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;
    (2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;
    (3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. No
deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
the qualifying child's vehicle to provide such transportation for a qualifying child. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;
    (4) income as provided under section 290.0802;
    (5) to the extent included in federal adjusted gross income, income realized on
disposition of property exempt from tax under section 290.491;
    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
under the provisions of Public Law 109-1 and Public Law 111-126;
    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
of subnational foreign taxes for the taxable year, but not to exceed the total subnational
foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
"federal foreign tax credit" means the credit allowed under section 27 of the Internal
Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
the extent they exceed the federal foreign tax credit;
    (8) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
clause (12), in the case of a shareholder of an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. The resulting delayed depreciation cannot be less than zero;
    (9) job opportunity building zone income as provided under section 469.316;
    (10) to the extent included in federal taxable income, the amount of compensation
paid to members of the Minnesota National Guard or other reserve components of
the United States military for active service, excluding including compensation for
services performed under the Active Guard Reserve (AGR) program. For purposes of
this clause, "active service" means (i) state active service as defined in section 190.05,
subdivision 5a , clause (1); or (ii) federally funded state active service as defined in section
190.05, subdivision 5b , but and "active service" excludes includes service performed in
accordance with section 190.08, subdivision 3;
    (11) to the extent included in federal taxable income, the amount of compensation
paid to Minnesota residents who are members of the armed forces of the United States
or United Nations for active duty performed under United States Code, title 10; or the
authority of the United Nations;
    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
qualified donor's donation, while living, of one or more of the qualified donor's organs
to another person for human organ transplantation. For purposes of this clause, "organ"
means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
"human organ transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person; "qualified
expenses" means unreimbursed expenses for both the individual and the qualified donor
for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
may be subtracted under this clause only once; and "qualified donor" means the individual
or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
individual may claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;
    (13) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the
case of a shareholder of a corporation that is an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
subtraction is not allowed under this clause;
    (14) to the extent included in the federal taxable income of a nonresident of
Minnesota, compensation paid to a service member as defined in United States Code, title
10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
Act, Public Law 108-189, section 101(2);
    (15) to the extent included in federal taxable income, the amount of national service
educational awards received from the National Service Trust under United States Code,
title 42, sections 12601 to 12604, for service in an approved Americorps National Service
program;
(16) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under section 290.01, subdivision 19a, clause (13);
(17) the amount of the net operating loss allowed under section 290.095, subdivision
11 , paragraph (c);
(18) the amount of expenses not allowed for federal income tax purposes due
to claiming the railroad track maintenance credit under section 45G(a) of the Internal
Revenue Code;
(19) the amount of the limitation on itemized deductions under section 68(b) of
the Internal Revenue Code; and
(20) the amount of the phaseout of personal exemptions under section 151(d) of
the Internal Revenue Code.; and
(21) for taxable years beginning after December 31, 2013, and before January 1,
2015, to the extent included in federal taxable income, discharge of qualified principal
residence indebtedness, as provided in subparagraph (E) of section 108(a)(1) of the
Internal Revenue Code, without regard to whether subparagraph (E) of section 108(a)(1)
of the Internal Revenue Code is in effect for the taxable year.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 8. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 31, as
amended by Laws 2014, chapter 150, article 1, section 13, is amended to read:
    Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
20, 2013 March 26, 2014. Internal Revenue Code also includes any 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 retroactively at the same
time as the changes were effective for federal purposes.

    Sec. 9. Minnesota Statutes 2012, section 290.068, subdivision 1, is amended to read:
    Subdivision 1. Credit allowed. A corporation, partners in a partnership, or
shareholders in a corporation treated as an "S" corporation under section 290.9725 are
individual, trust, or estate is allowed a credit against the tax computed under this chapter
for the taxable year equal to:
    (a) ten percent of the first $2,000,000 of the excess (if any) of
    (1) the qualified research expenses for the taxable year, over
    (2) the base amount; and
    (b) 2.5 percent on all of such excess expenses over $2,000,000.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 10. Minnesota Statutes 2013 Supplement, section 290.091, subdivision 2, as
amended by Laws 2014, chapter 150, article 1, section 21, is amended to read:
    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
terms have the meanings given:
    (a) "Alternative minimum taxable income" means the sum of the following for
the taxable year:
    (1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;
    (2) the taxpayer's itemized deductions allowed in computing federal alternative
minimum taxable income, but excluding:
    (i) the charitable contribution deduction under section 170 of the Internal Revenue
Code;
    (ii) the medical expense deduction;
    (iii) the casualty, theft, and disaster loss deduction; and
    (iv) the impairment-related work expenses of a disabled person;
    (3) for depletion allowances computed under section 613A(c) of the Internal
Revenue Code, with respect to each property (as defined in section 614 of the Internal
Revenue Code), to the extent not included in federal alternative minimum taxable income,
the excess of the deduction for depletion allowable under section 611 of the Internal
Revenue Code for the taxable year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion deduction for the taxable year);
    (4) to the extent not included in federal alternative minimum taxable income, the
amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
Internal Revenue Code determined without regard to subparagraph (E);
    (5) to the extent not included in federal alternative minimum taxable income, the
amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
to (9), and (11) to (14);
    less the sum of the amounts determined under the following:
    (1) interest income as defined in section 290.01, subdivision 19b, clause (1);
    (2) an overpayment of state income tax as provided by section 290.01, subdivision
19b , clause (2), to the extent included in federal alternative minimum taxable income;
    (3) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as
defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
amounts deducted in computing federal adjusted gross income;
    (4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b , clauses (6), (8) to (14), and (16), and (21); and
(5) the amount of the net operating loss allowed under section 290.095, subdivision
11 , paragraph (c).
    In the case of an estate or trust, alternative minimum taxable income must be
computed as provided in section 59(c) of the Internal Revenue Code.
    (b) "Investment interest" means investment interest as defined in section 163(d)(3)
of the Internal Revenue Code.
    (c) "Net minimum tax" means the minimum tax imposed by this section.
    (d) "Regular tax" means the tax that would be imposed under this chapter (without
regard to this section and section 290.032), reduced by the sum of the nonrefundable
credits allowed under this chapter.
    (e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 11. Minnesota Statutes 2013 Supplement, section 290A.03, subdivision 15, as
amended by Laws 2014, chapter 150, article 1, section 22, is amended to read:
    Subd. 15. Internal Revenue Code. "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 20, 2013 March 26, 2014.
EFFECTIVE DATE.This section is effective retroactively for property tax refunds
based on property taxes payable after December 31, 2013, and rent paid after December
31, 2012.

    Sec. 12. Minnesota Statutes 2013 Supplement, section 291.005, subdivision 1, as
amended by Laws 2014, chapter 150, article 3, section 3, 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 1 March 26, 2014.
    (4) "Minnesota gross estate" means the federal gross estate of a decedent after
(a) excluding therefrom any property included in the estate which has its situs outside
Minnesota, and (b) including any property omitted from the federal gross estate which
is includable in the estate, has its situs in Minnesota, and was not disclosed to federal
taxing authorities.
    (5) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.
    (6) "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.
    (7) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota.
    (8) "Situs of property" means, with respect to:
    (i) real property, the state or country in which it is located;
    (ii) tangible personal property, the state or country in which it was normally kept
or located at the time of the decedent's death or for a gift of tangible personal property
within three years of death, the state or country in which it was normally kept or located
when the gift was executed; and
    (iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and
    (iv) intangible personal property, the state or country in which the decedent was
domiciled at death or for a gift of intangible personal property within three years of death,
the state or country in which the decedent was domiciled when the gift was executed.
    For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent.
If the pass-through entity is owned by a person or persons in addition to the decedent,
ownership of the property is attributed to the decedent in proportion to the decedent's
capital ownership share of the pass-through entity.
(9) "Pass-through entity" includes the following:
(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;
(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
(iii) a single-member limited liability company or similar entity, regardless of
whether it is taxed as an association or is disregarded for federal income tax purposes
under Code of Federal Regulations, title 26, section 301.7701-3; or
(iv) a trust to the extent the property is includible in the decedent's federal gross
estate; but excludes
    (v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under
section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.
EFFECTIVE DATE.This section is effective retroactively for estates of decedents
dying after December 31, 2013.

    Sec. 13. Laws 2014, chapter 150, article 3, section 4, the effective date, is amended to
read:
EFFECTIVE DATE.This section is effective retroactively for estates of decedents
dying after December 31, 2013, and for taxable gifts made after June 30, 2013.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. DEFINITION OF TAXABLE GIFT FOR DECEDENTS DYING
BEFORE JANUARY 1, 2014.
For estates of decedents dying before January 1, 2014, "taxable gift" as used by
Minnesota Statutes, section 291.005, subdivision 1, paragraph (4), means a transfer by gift
which is included in taxable gifts for federal gift tax purposes under the following sections
of the Internal Revenue Code: section 529; section 530; section 2501(a)(4); section 2503;
sections 2511 to 2514; and sections 2516 to 2519; less the deductions allowed in sections
2522 to 2524 of the Internal Revenue Code, and after excluding taxable gifts of any
property that has its situs outside Minnesota and including taxable gifts of any property
that has its situs in Minnesota and were not disclosed to federal taxing authorities.
EFFECTIVE DATE.This section is effective retroactively for taxable gifts made
after June 30, 2013.

ARTICLE 5

MINERALS TAXES

    Section 1. Minnesota Statutes 2012, section 298.75, subdivision 2, is amended to read:
    Subd. 2. Tax imposed. (a) Except as provided in paragraph (e), a county that
imposes the aggregate production tax shall impose upon every operator a production tax
of 21.5 cents per cubic yard or 15 cents per ton of aggregate material excavated in the
county except that the county board may decide not to impose this tax if it determines
that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
aggregate material from that county. The tax shall not be imposed on aggregate material
excavated in the county until the aggregate material is transported from the extraction site
or sold, whichever occurs first. When aggregate material is stored in a stockpile within the
state of Minnesota and a public highway, road or street is not used for transporting the
aggregate material, the tax shall not be imposed until either when the aggregate material
is sold, or when it is transported from the stockpile site, or when it is used from the
stockpile, whichever occurs first.
    (b) Except as provided in paragraph (e), a county that imposes the aggregate
production tax under paragraph (a) shall impose upon every importer a production tax
of 21.5 cents per cubic yard or 15 cents per ton of aggregate material imported into the
county. The tax shall be imposed when the aggregate material is imported from the
extraction site or sold. When imported aggregate material is stored in a stockpile within
the state of Minnesota and a public highway, road, or street is not used for transporting
the aggregate material, the tax shall be imposed either when the aggregate material is
sold, when it is transported from the stockpile site, or when it is used from the stockpile,
whichever occurs first. The tax shall be imposed on an importer when the aggregate
material is imported into the county that imposes the tax.
    (c) If the aggregate material is transported directly from the extraction site to a
waterway, railway, or another mode of transportation other than a highway, road or street,
the tax imposed by this section shall be apportioned equally between the county where the
aggregate material is extracted and the county to which the aggregate material is originally
transported. If that destination is not located in Minnesota, then the county where the
aggregate material was extracted shall receive all of the proceeds of the tax.
    (d) A county, city, or town that receives revenue under this section is prohibited
from imposing any additional host community fees on aggregate production within that
county, city, or town.
(e) A county that borders two other states and that is not contiguous to a county
that imposes a tax under this section may impose the taxes under paragraphs (a) and (b)
at the rate of ten cents per cubic yard or seven cents per ton. This paragraph expires
December 31, 2014.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Laws 2008, chapter 366, article 10, section 15, is amended to read:
    Sec. 15. 2008 DISTRIBUTIONS ONLY.
    For distribution in 2008 only, a special fund is established to receive 11.4 cents per ton
that otherwise would be allocated under Minnesota Statutes, section 298.28, subdivision 6.
If sufficient funds are not available under Minnesota Statutes, section 298.28, subdivision
6 , to make the payments required under this section and under Minnesota Statutes, section
298.28, subdivision 6 , the remaining amount needed to total 11.4 cents per ton may be
taken from funds available under Minnesota Statutes, section 298.28, subdivision 9. If
2008 H.F. No. 1812 is enacted and includes a provision that distributes funds that would
otherwise be allocated under Minnesota Statutes, section 298.28, subdivision 6, in a
manner different from the distribution required in this section, the distribution in this
section supersedes the distribution set in 2008 H.F. No. 1812 notwithstanding Minnesota
Statutes, section 645.26. The following amounts are allocated to St. Louis County acting
as the fiscal agent for the recipients for the following specified purposes:
    (1) two cents per ton must be paid to the Hibbing Economic Development Authority
to retire bonds and for economic development purposes;
    (2) one cent per ton must be divided among and paid in equal shares to each of the
board of St. Louis County School District No. 2142, the board of Ely School District No.
696, the board of Mountain Iron-Buhl School District No. 712, and the board of Virginia
School District No. 706 for each to study the potential for and impact of consolidation
and streamlining the operations of their school districts;
    (3) 0.25 cent per ton must be paid to the city of Grand Rapids, for industrial park work;
    (4) 0.65 cent per ton must be paid to the city of Aitkin, for sewer and water for
housing economic development projects;
    (5) 0.5 cent per ton must be paid to the city of Crosby, for well and water tower
infrastructure;
    (6) 0.5 cent per ton must be paid to the city of Two Harbors, for well and water
tower infrastructure;
    (7) 1.5 cents per ton must be paid to the city of Silver Bay to pay for health and
safety and maintenance improvements at a former elementary school building that is
currently owned by the city, to be used for economic development purposes;
    (8) 1.5 cents per ton must be paid to St. Louis County to extend water and sewer
lines from the city of Chisholm to the St. Louis County fairgrounds;
    (9) 1.5 cents per ton must be paid to the White Community Hospital for debt
restructuring;
    (10) 0.5 cent per ton must be paid to the city of Keewatin for street, sewer, and
water improvements;
    (11) 0.5 cent per ton must be paid to the city of Calumet for street, sewer, and water
improvements; and
    (12) one cent per ton must be paid to Breitung township for sewer and water
extensions associated with the development of a state park, provided that if a new state
park is not established in Breitung township by July 1, 2009, the money provided in
this clause must be transferred to the northeast Minnesota economic development fund
established in Minnesota Statutes, section 298.2213.
EFFECTIVE DATE.This section is effective the day following final enactment.
Upon enactment, the city of Aitkin must release all funds under this section to St. Louis
County acting as fiscal agent by July 1, 2014.

    Sec. 3. Laws 2013, chapter 143, article 11, section 10, is amended to read:
    Sec. 10. 2013 DISTRIBUTION ONLY.
For the 2013 distribution, a special fund is established to receive 38.7 cents per ton of
any excess of the balance remaining after distribution of amounts required under Minnesota
Statutes, section 298.28, subdivision 6. The following amounts are allocated to St. Louis
County acting as the fiscal agent for the recipients for the following specific purposes:
(1) 5.1 cents per ton to the city of Hibbing for improvements to the city's water
supply system;
(2) 4.3 cents per ton to the city of Mountain Iron for the cost of moving utilities
required as a result of actions undertaken by United States Steel Corporation;
(3) 2.5 cents per ton to the city of Biwabik for improvements to the city's water supply
system, payable upon agreement with ArcelorMittal to satisfy water permit conditions;
(4) 2 cents per ton to the city of Tower for the Tower Marina;
(5) 2.4 cents per ton to the city of Grand Rapids for an eco-friendly heat transfer
system to replace aging effluent lines and for parking lot repaving;
(6) 2.4 cents per ton to the city of Two Harbors for wastewater treatment plant
improvements;
(7) 0.9 cents per ton to the city of Ely for the sanitary sewer replacement project;
(8) 0.6 cents per ton to the town of Crystal Bay for debt service of the Claire Nelson
Intermodal Transportation Center;
(9) 0.5 cents per ton to the Greenway Joint Recreation Board for the Coleraine
hockey arena renovations;
(10) 1.2 cents per ton for the West Range Regional Fire Hall and Training Center
to merge the existing fire services of Coleraine, Bovey, Taconite Marble, Calumet, and
Greenway Township;
(11) 2.5 cents per ton to the city of Hibbing for the Memorial Building;
(12) 0.7 cents per ton to the city of Chisholm for public works infrastructure;
(13) 1.8 cents per ton to the Crane Lake Water and Sanitary District for sanitary
sewer extension;
(14) 2.5 cents per ton for the city of Buhl for the roof on the Mesabi Academy;
(15) 1.2 cents per ton to the city of Gilbert for the New Jersey/Ohio Avenue project;
(16) 1.5 2.0 cents per ton to the city of Cook for street improvements, business park
infrastructure, and a maintenance garage;
(17) 0.5 cents per ton to the city of Cook for a water line project;
(18) (17) 1.8 cents per ton to the city of Eveleth to be used for Jones Street
reconstruction and the city auditorium;
(19) (18) 0.5 cents per ton for the city of Keewatin for an electrical substation and
water line replacements;
(20) (19) 3.3 cents per ton for the city of Virginia for Fourth Street North
infrastructure and Franklin Park improvement; and
(21) (20) 0.5 cents per ton to the city of Grand Rapids for an economic development
project.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 6

LOCAL DEVELOPMENT

    Section 1. [383A.155] HOUSING IMPROVEMENT AREAS.
    Subdivision 1. Powers of a housing improvement authority. The Ramsey County
Housing and Redevelopment Authority shall have the powers of a city under sections
428A.11 to 428A.21 to establish housing improvement areas in Ramsey County.
    Subd. 2. Definitions. (a) For purposes of exercising the powers in sections 428A.11
to 428A.21, references in those sections to the terms in paragraphs (b) to (e) have the
meanings given them for purposes of this section.
(b) "Mayor" means the chair of the Ramsey County Housing and Redevelopment
Authority.
(c) "Council" or "governing body of the city" means the Ramsey County Housing
and Redevelopment Authority.
(d) "City clerk" means the person designated by the Ramsey County Housing and
Redevelopment Authority to carry out the duties of the city clerk under sections 428A.11
to 428A.21.
(e) "Enabling ordinance" means a resolution adopted under subdivision 3 by the
Ramsey County Housing and Redevelopment Authority.
    Subd. 3. Establishment of housing improvement areas. The Ramsey County
Housing and Redevelopment Authority may adopt a resolution establishing one or
more housing improvement areas within the county under this section. The Ramsey
County Housing and Redevelopment Authority shall send a copy of each petition for the
establishment of a housing improvement area to the city in which the proposed housing
improvement area is located. The public hearings under sections 428A.13 and 428A.14
may be held at the times and places determined by the Ramsey County Housing and
Redevelopment Authority, except that they must be held at least 30 days after the date the
applicable petition was sent to the city. If the city council adopts a resolution opposing
the establishment within 30 days of the date the copy of the petition was sent to the city
under this subdivision, the Ramsey County Housing and Redevelopment Authority may
not establish the proposed housing improvement area.
    Subd. 4. Applicability. Except as otherwise provided in this section, sections
428A.11 to 428A.21 apply to the establishment of a housing improvement area by the
Ramsey County Housing and Redevelopment Authority.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 383D.41, is amended by adding a subdivision
to read:
    Subd. 11. Tax credit allocation threshold criteria. (a) In addition to the projects
described in section 462A.222, subdivision 3, paragraph (d), the Dakota County
Community Development Agency may allocate tax credits in the first round for up to three
projects of the following type: new construction or substantial rehabilitation multifamily
housing projects that are not restricted to persons who are 55 years of age or older and that
are located within one of the following areas at the time a reservation for tax credits is made:
(1) an area within one-half mile of a completed or planned light rail transit way, bus
rapid transit way, or commuter rail station;
(2) an area within one-fourth mile from any spot along a high-frequency local bus line;
(3) an area within one-half mile from a bus stop or station on a high-frequency
express route;
(4) an area within one-half mile from a park and ride lot; or
(5) an area within one-fourth mile of a high-service public transportation fixed
route stop.
(b) For purposes of this section, the following terms have the meaning given them:
(1) "high-frequency local bus line" means a local bus route providing service at
least every 15 minutes and running between 6:00 a.m. and 7:00 p.m. on weekdays and
between 9:00 a.m. and 6:00 p.m. on Saturdays;
(2) "high-frequency express route" means an express route with bus service
providing six or more trips during at least one of the peak morning hours between 6:00
a.m. and 9:00 a.m. and every ten minutes during the peak morning hour; and
(3) "high-service public transportation fixed route stop" means a stop serviced
between 6:00 a.m. and 7:00 p.m. on weekdays and 9:00 a.m. and 6:00 p.m. on Saturdays
and with service approximately every 30 minutes during that time.
EFFECTIVE DATE.This section is effective beginning with the 2015 allocation of
tax credit.

    Sec. 3. Minnesota Statutes 2012, section 469.1763, subdivision 3, is amended to read:
    Subd. 3. Five-year rule. (a) Revenues derived from tax increments are considered
to have been expended on an activity within the district under subdivision 2 only if one
of the following occurs:
(1) before or within five years after certification of the district, the revenues are
actually paid to a third party with respect to the activity;
(2) bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within five years after certification, the revenues are spent
to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
reasonably expected to be spent before the end of the later of (i) the five-year period, or
(ii) a reasonable temporary period within the meaning of the use of that term under section
148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve
or replacement fund;
(3) binding contracts with a third party are entered into for performance of the
activity before or within five years after certification of the district and the revenues are
spent under the contractual obligation;
(4) costs with respect to the activity are paid before or within five years after
certification of the district and the revenues are spent to reimburse a party for payment
of the costs, including interest on unreimbursed costs; or
(5) expenditures are made for housing purposes as permitted by subdivision 2,
paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
by subdivision 2, paragraph (e).
(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
the original refunded bonds meet the requirements of paragraph (a), clause (2).
(c) For a redevelopment district or a renewal and renovation district certified after
June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph
(a) are extended to (1) ten years after certification of the district or (2) June 30, 2017,
whichever is later. This extension is provided primarily to accommodate delays in
development activities due to unanticipated economic circumstances.
EFFECTIVE DATE.This section is effective the day following final enactment
and applies to all districts, regardless of when the request for certification was made.

    Sec. 4. Minnesota Statutes 2012, section 469.177, subdivision 3, is amended to read:
    Subd. 3. Tax increment, relationship to chapters 276A and 473F. (a) Unless the
governing body elects pursuant to paragraph (b) the following method of computation
shall apply to a district other than an economic development district for which the request
for certification was made after June 30, 1997:
(1) The original net tax capacity and the current net tax capacity shall be determined
before the application of the fiscal disparity provisions of chapter 276A or 473F. Where
the original net tax capacity is equal to or greater than the current net tax capacity, there is
no captured net tax capacity and no tax increment determination. Where the original net
tax capacity is less than the current net tax capacity, the difference between the original
net tax capacity and the current net tax capacity is the captured net tax capacity. This
amount less any portion thereof which the authority has designated, in its tax increment
financing plan, to share with the local taxing districts is the retained captured net tax
capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the
authority from the net tax capacity of the local taxing districts in determining local taxing
district tax rates. The local tax rates so determined are to be extended against the retained
captured net tax capacity of the authority as well as the net tax capacity of the local taxing
districts. The tax generated by the extension of the lesser of (A) the local taxing district
tax rates or (B) the original local tax rate to the retained captured net tax capacity of the
authority is the tax increment of the authority.
(b) The following method of computation applies to any economic development
district for which the request for certification was made after June 30, 1997, and to any
other district for which the governing body, by resolution approving the tax increment
financing plan pursuant to section 469.175, subdivision 3, elects:
(1) The original net tax capacity shall be determined before the application of the
fiscal disparity provisions of chapter 276A or 473F. The current net tax capacity shall
exclude any fiscal disparity commercial-industrial net tax capacity increase between
the original year and the current year multiplied by the fiscal disparity ratio determined
pursuant to section 276A.06, subdivision 7, or 473F.08, subdivision 6. Where the original
net tax capacity is equal to or greater than the current net tax capacity, there is no captured
net tax capacity and no tax increment determination. Where the original net tax capacity is
less than the current net tax capacity, the difference between the original net tax capacity
and the current net tax capacity is the captured net tax capacity. This amount less any
portion thereof which the authority has designated, in its tax increment financing plan, to
share with the local taxing districts is the retained captured net tax capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the
authority from the net tax capacity of the local taxing districts in determining local taxing
district tax rates. The local tax rates so determined are to be extended against the retained
captured net tax capacity of the authority as well as the net tax capacity of the local taxing
districts. The tax generated by the extension of the lesser of (A) the local taxing district
tax rates or (B) the original local tax rate to the retained captured net tax capacity of the
authority is the tax increment of the authority.
(3) An election by the governing body pursuant to paragraph (b) shall be submitted
to the county auditor by the authority at the time of the request for certification pursuant to
subdivision 1.
(c) The method of computation of tax increment applied to a district pursuant to
paragraph (a) or (b) shall remain the same for the duration of the district, except that
the governing body may elect to change its election from the method of computation in
paragraph (a) to the method in paragraph (b).
EFFECTIVE DATE.This section is effective for districts for which the request for
certification is made after June 30, 2014.

    Sec. 5. Laws 2013, chapter 143, article 9, section 23, is amended to read:
    Sec. 23. CITY OF BLOOMINGTON; OLD CEDAR AVENUE BRIDGE.
    (a) Notwithstanding any law to the contrary, the city of Bloomington shall transfer
from the tax increment financing accounts for its Tax Increment Financing District No.
1-C and Tax Increment Financing District No. 1-G an amount equal to the tax increment
for each district that is computed under the provisions of Minnesota Statutes, section
473F.08, subdivision 3c , for taxes payable in 2014 to an account or fund established for
the repair, restoration, or replacement of the Old Cedar Avenue bridge for use by bicycle
commuters and recreational users. The city is authorized to and must use the transferred
funds to complete the repair, renovation, or replacement of the bridge. Upon completion
of the repair, renovation, or replacement of the bridge, the city may use any remaining
funds in the account for costs of improving bicycle and pedestrian trails that access the
bridge and that use is deemed to be a permitted use of the increments.
    (b) No signs, plaques, or markers acknowledging or crediting donations for,
sponsorships of, or naming rights may be posted on or in the vicinity of the Old Cedar
Avenue bridge.
EFFECTIVE DATE.This section is effective without local approval under
Minnesota Statutes, section 645.023, subdivision 1, paragraph (a).

    Sec. 6. CITY OF EAGAN; TAX INCREMENT FINANCING.
(a) Effective for taxes payable in 2015, the city of Eagan may elect to compute tax
increment for the Cedar Grove Tax Increment Financing District using the current local tax
rate, notwithstanding the provisions of Minnesota Statutes, section 469.177, subdivision 1a.
(b) The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of a
tax increment financing district, is considered to be met for TIF District 2-5 in the city
of Eagan if the activities are undertaken within seven years from the date of certification
of the district.
EFFECTIVE DATE.This section is effective upon compliance by the governing
body of the city of Eagan with the requirements of Minnesota Statutes, section 645.021,
subdivision 3.

    Sec. 7. CITY OF EDINA; TAX INCREMENT FINANCING.
    Subdivision 1. Authority to create districts. (a) The governing body of the city of
Edina or its development authority may establish one or more tax increment financing
housing districts in the Southeast Edina Redevelopment Project Area, as the boundaries
exist on March 31, 2014.
(b) The authority to request certification of districts under this section expires on
June 30, 2017.
    Subd. 2. Rules governing districts. (a) Housing districts established under this
section are subject to the provisions of Minnesota Statutes, sections 469.174 to 469.1794,
except as otherwise provided in this subdivision.
(b) Notwithstanding the provisions of Minnesota Statutes, section 469.176,
subdivision 1b, no increment must be paid to the authority after 15 years after receipt by
the authority of the first increment from a district established under this section.
(c) Notwithstanding the provisions of Minnesota Statutes, section 469.1761,
subdivision 3, for a residential rental project, the city may elect to substitute "10 percent"
for "40 percent" in the 40-60 test under section 142(d)(1)(B) of the Internal Revenue Code
in determining the applicable income limits.
    Subd. 3. Pooling authority. The city may elect to treat expenditures of increment
from the Southdale 2 district for a housing project of a district established under
this section as expenditures qualifying under Minnesota Statutes, section 469.1763,
subdivision 2, paragraph (d), without regard to whether the housing meets the requirement
of a qualified building under section 42 of the Internal Revenue Code.
EFFECTIVE DATE.This section is effective upon compliance by the governing
body of the city of Edina with the requirements of Minnesota Statutes, section 645.021,
subdivisions 2 and 3.

    Sec. 8. SHOREVIEW TAX INCREMENT FINANCING PILOT PROJECT.
    Subdivision 1. Authority to establish districts. (a) The governing body of the
city of Shoreview or a development authority it designates may establish one or more
economic development tax increment financing districts in the city subject to the special
rules under this section. The purpose of these districts is the retention and expansion of
existing businesses in the city and the attraction of new business to the state to create and
retain high paying jobs.
(b) The authority to establish or approve the tax increment financing plans and
request certification for districts under this section expires on June 30, 2019.
    Subd. 2. Qualified businesses. For purposes of this section, a "qualified business"
must satisfy the following requirements:
(1) the business must qualify under one of the following when the tax increment
financing plan is approved:
(i) it operates at a location in the city of Shoreview;
(ii) it does not have substantial operations in Minnesota; or
(iii) the assistance is provided for relocation of a portion of the business's operation
from another state;
(2) the expansion or location of the operations of the business in the city, as
provided in the business subsidy agreement under Minnesota Statues, sections 116J.993 to
116J.995, will result in an increase in manufacturing, research, service, or professional
jobs, at least 75 percent of which pay an average wage or salary that is equal to or greater
than 25 percent of the median wage or salary for all jobs within the metropolitan area; and
(3) the business is not engaged in making retail sales or in providing other services,
such as legal, medical, accounting, financial, entertainment, or similar, to third parties, at
the location receiving assistance.
    Subd. 3. Applicable rules. (a) Unless otherwise stated, the provisions of Minnesota
Statutes, sections 469.174 to 469.1794, apply to districts established under this section.
(b) Notwithstanding the provisions of section 469.176, subdivision 1b, the duration
limit for districts created under this section is 12 years after the receipt of the first increment.
(c) The provisions of Minnesota Statutes, section 469.176, subdivision 4c, apply
to determining the permitted uses of increments from the districts with the following
exceptions:
(1) any building and facilities must be for a qualified business;
(2) the building and facilities must not be used by the qualified business or its
lessees or tenants to relocate operations from another location in this state outside of the
city of Shoreview;
(3) the 15 percent limit in subdivision 4c, paragraph (a), is increased to 25 percent; and
(4) the city or development authority may elect to deposit up to 20 percent of the
increments in the fund established under subdivision 4. If the city elects to use this
authority, all of the remaining increments must be expended for administrative expenses
or for activities within the district under Minnesota Statutes, section 469.1763.
(d) The governing body of the city may elect, by resolution, to determine the
original and current net tax capacity of a district established under this section using the
computation under Minnesota Statutes, section 469.177, subdivision 3, paragraph (a) or (b).
    Subd. 4. Business retention and expansion fund. (a) The city may establish a
business retention and expansion fund and deposit in the fund:
(1) increments as provided under subdivision 3, paragraph (c), clause (4); and
(2) increments from a district for which the request for certification of the district
was made prior to April 30, 1990, if the amount necessary to meet all of the debt and other
obligations incurred for that district has been received by the city.
(b) Amounts in the fund may be expended to assist qualified businesses, as permitted
under subdivisions 2 and 3, and are not otherwise subject to the restrictions in Minnesota
Statutes, sections 469.174 to 469.1794.
EFFECTIVE DATE.This section is effective upon compliance by the governing
body of the city of Shoreview with the requirements of Minnesota Statutes, section
645.021, subdivision 3.

    Sec. 9. CITY OF NORTH ST. PAUL; TAX INCREMENT FINANCING;
PARCELS DEEMED OCCUPIED.
If the city of North St. Paul authorizes the creation of a redevelopment tax increment
financing district under Minnesota Statutes, section 469.174, subdivision 10, parcel
number 122922330059 is deemed to meet the requirements of Minnesota Statutes, section
469.174, subdivision 10, paragraph (d), notwithstanding any contrary provisions of that
paragraph, if the following conditions are met:
(1) buildings located on the parcel were demolished after the city of North St. Paul
adopted a resolution under Minnesota Statutes, section 469.174, subdivision 10, paragraph
(d), clause (3);
(2) the buildings were removed either by the city of North St. Paul or by the owner
of the property by entering into a development agreement; and
(3) the request for certification of the parcel as part of a district is filed with the
county auditor by December 31, 2016.
EFFECTIVE DATE.This section is effective upon compliance by the governing
body of the city of North St. Paul with the requirements of Minnesota Statutes, section
645.021, subdivisions 2 and 3.

ARTICLE 7

MISCELLANEOUS

    Section 1. Minnesota Statutes 2012, section 270C.72, subdivision 1, is amended to read:
    Subdivision 1. Tax clearance required. (a) The state or a political subdivision of
the state may not issue, transfer, or renew, and must revoke, a license for the conduct of
a profession, occupation, trade, or business, if the commissioner notifies the licensing
authority that the applicant owes the state delinquent taxes payable to the commissioner,
penalties, or interest. The commissioner may not notify the licensing authority unless the
applicant taxpayer owes $500 or more in delinquent taxes, penalties, or interest, or has
not filed returns. If the applicant taxpayer does not owe delinquent taxes, penalties, or
interest, but has not filed returns, the commissioner may not notify the licensing authority
unless the taxpayer has been given 90 days' written notice to file the returns or show
that the returns are not required to be filed.
(b) Within ten days after receipt of the notification from the commissioner under
paragraph (a), the licensing authority must notify the license holder by certified mail of
the potential revocation of the license for the applicable reason under paragraph (a).
The notice must include a copy of the commissioner's notice to the licensing agency
and information, in the form specified by the commissioner, on the licensee's option for
receiving a tax clearance from the commissioner. The licensing authority must revoke the
license 30 days after receiving the notice from the commissioner, unless it receives a tax
clearance from the commissioner as provided in paragraph (c).
(c) A licensing authority that has received a notice from the commissioner may
issue, transfer, renew, or not revoke the applicant's license only if (a) (1) the commissioner
issues a tax clearance certificate and (b) (2) the commissioner or the applicant forwards a
copy of the clearance to the authority. The commissioner may issue a clearance certificate
only if the applicant does not owe the state any uncontested delinquent taxes, penalties, or
interest and has filed all required returns.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 2. Minnesota Statutes 2012, section 270C.72, subdivision 3, is amended to read:
    Subd. 3. Notice and hearing. (a) The commissioner, on notifying a licensing
authority pursuant to subdivision 1 not to issue, transfer, or renew a license, must send a
copy of the notice to the applicant. If the applicant requests, in writing, within 30 days
of the date of the notice a hearing, a contested case hearing must be held. The hearing
must be held within 45 days of the date the commissioner refers the case to the Office of
Administrative Hearings. Notwithstanding any law to the contrary, the applicant must be
served with 20 days' notice in writing specifying the time and place of the hearing and the
allegations against the applicant. The notice may be served personally or by mail.
(b) (a) Prior to notifying a licensing authority pursuant to subdivision 1 to revoke a
license, the commissioner must send a notice to the applicant of the commissioner's intent
to require revocation of the license and of the applicant's right to a hearing under paragraph
(a). If the applicant requests a hearing in writing within 30 days of the date of the notice, a
contested case hearing must be held. The hearing must be held within 45 days of the date
the commissioner refers the case to the Office of Administrative Hearings. Notwithstanding
any law to the contrary, the applicant must be served with 20 days notice in writing
specifying the time and place of the hearing and the allegations against the applicant. The
notice may be served personally or by mail. A license is subject to revocation when 30
days have passed following the date of the notice in this paragraph without the applicant
requesting a hearing, or, if a hearing is timely requested, upon final determination of the
hearing under section 14.62, subdivision 1. A license shall be revoked by the licensing
authority within 30 days after receiving notice from the commissioner to revoke.
(b) The commissioner may notify a licensing authority under subdivision 1 only
after the requirements of paragraph (a) have been satisfied.
(c) A hearing under this subdivision is in lieu of any other hearing or proceeding
provided by law arising from any action taken under subdivision 1.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 3. Minnesota Statutes 2012, section 279.03, subdivision 2, is amended to read:
    Subd. 2. Composite judgment. Amounts included in composite judgments
authorized by section 279.37, subdivision 1, and confessed on or after July 1, 1982, are
subject to interest at the rate determined pursuant to section 549.09. Amounts confessed
under this authority after December 31, 1990, (a) Except as provided in paragraph (b),
amounts included in composite judgments authorized by section 279.37, subdivision 1, are
subject to interest at the rate calculated under subdivision 1a. During each calendar year,
interest shall accrue on the unpaid balance of the composite judgment from the time it is
confessed until it is paid. The rate of interest is subject to change each year in the same
manner that section 549.09 or subdivision 1a, whichever is applicable, for rate changes.
Interest on the unpaid contract balance on judgments confessed before July 1, 1982,
is payable at the rate applicable to the judgment at the time that it was confessed. The
interest rate established at the time the judgment is confessed is fixed for the duration of
that judgment.
(b) A confession of judgment covering any part of a parcel classified as 1a or 1b, and
used as the primary homestead of the owner, is subject to interest at the rate provided in
section 279.37, subdivision 2, paragraph (b).
EFFECTIVE DATE.This section is effective for confession judgments entered
into on or after January 1, 2015.

    Sec. 4. Minnesota Statutes 2013 Supplement, section 279.37, subdivision 2, is
amended to read:
    Subd. 2. Installment payments. (a) The owner of any such parcel, or any person to
whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
make and file with the county auditor of the county in which the parcel is located a written
offer to pay the current taxes each year before they become delinquent, or to contest the
taxes under Minnesota Statutes 1941, sections 278.01 to 278.13, and agree to confess
judgment for the amount provided, as determined by the county auditor. By filing the
offer, the owner waives all irregularities in connection with the tax proceedings affecting
the parcel and any defense or objection which the owner may have to the proceedings, and
also waives the requirements of any notice of default in the payment of any installment or
interest to become due pursuant to the composite judgment to be so entered. Unless the
property is subject to subdivision 1a, with the offer, the owner shall (i) tender one-tenth of
the amount of the delinquent taxes, costs, penalty, and interest, and (ii) tender all current
year taxes and penalty due at the time the confession of judgment is entered. In the offer,
the owner shall agree to pay the balance in nine equal installments, with interest as provided
in section 279.03, payable annually on installments remaining unpaid from time to time, on
or before December 31 of each year following the year in which judgment was confessed.
(b) If any part of the parcel consists of real estate classified as 1a or 1b and used as the
homestead by the owner of the property, the commissioner of revenue shall set annually
the interest rate on offers made under paragraph (a) at the greater of five percent or two
percent above the prime rate charged by banks during the six-month period ending on
September 30 of that year, rounded to the nearest full percent, provided that the rate must
not exceed the maximum annum rate specified under section 279.03, subdivision 1a. The
rate of interest becomes effective on January 1 of the immediately succeeding year. If a
default occurs in the payments under any confessed judgment entered under this paragraph,
the taxes and penalties due are subject to the interest rate specified in section 279.03.
For the purposes of this subdivision:
(1) the term "prime rate charged by banks" means the average predominant prime
rate quoted by commercial banks to large businesses, as determined by the Board of
Governors of the Federal Reserve System; and
(2) "default" means the cancellation of the confession of judgment due to
nonpayment of the current year tax or failure to make any installment payment required by
this confessed judgment within 60 days from the date on which payment was due.
(c) The interest rate established at the time judgment is confessed is fixed for the
duration of the judgment. By October 15 of each year, the commissioner of revenue must
determine the rate of interest as provided under paragraph (b) and, by November 1 of each
year, must certify the rate to the county auditor.
(d) A qualified property owner eligible to enter into a second confession of judgment
may do so at the interest rate provided in paragraph (b).
(e) Repurchase agreements or contracts for repurchase for properties being
repurchased under section 282.261 are not eligible to receive the interest rate under
paragraph (b).
(f) The offer must be substantially as follows:
"To the court administrator of the district court of ........... county, I, .....................,
am the owner of the following described parcel of real estate located in ....................
county, Minnesota:
.............................. Upon that real estate there are delinquent taxes for the year ........., and
prior years, as follows: (here insert year of delinquency and the total amount of delinquent
taxes, costs, interest, and penalty). By signing this document I offer to confess judgment in
the sum of $...... and waive all irregularities in the tax proceedings affecting these taxes and
any defense or objection which I may have to them, and direct judgment to be entered for
the amount stated above, minus the sum of $............, to be paid with this document, which
is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and interest stated above.
I agree to pay the balance of the judgment in nine or four equal, annual installments, with
interest as provided in section 279.03, payable annually, on the installments remaining
unpaid. I agree to pay the installments and interest on or before December 31 of each year
following the year in which this judgment is confessed and current taxes each year before
they become delinquent, or within 30 days after the entry of final judgment in proceedings
to contest the taxes under Minnesota Statutes, sections 278.01 to 278.13.
Dated .............., ......."
EFFECTIVE DATE.This section shall be effective for confession judgments
entered into on or after January 1, 2015.

    Sec. 5. Minnesota Statutes 2013 Supplement, section 360.531, subdivision 2, is
amended to read:
    Subd. 2. Rate. The tax shall be as follows:

	Base Price		Tax
	Under $499,999 Not over $500,000		$100
	over $500,000 to $999,999 but not over $1,000,000		$200
	over $1,000,000 to $2,499,999 but not over $2,500,000		$2,000
	over $2,500,000 to $4,999,999 but not over $5,000,000		$4,000
	over $5,000,000 to $7,499,999 but not over $7,500,000		$7,500
	over $7,500,000 to $9,999,999 but not over $10,000,000		$10,000
	over $10,000,000 to $12,499,999 but not over $12,500,000		$12,500
	over $12,500,000 to $14,999,999 but not over $15,000,000		$15,000
	over $15,000,000 to $17,499,999 but not over $17,500,000		$17,500
	over $17,500,000 to $19,999,999 but not over $20,000,000		$20,000
	over $20,000,000 to $22,499,999 but not over $22,500,000		$22,500
	over $22,500,000 to $24,999,999 but not over $25,000,000		$25,000
	over $25,000,000 to $27,499,999 but not over $27,500,000		$27,500
	over $27,500,000 to $29,999,999 but not over $30,000,000		$30,000
	over $30,000,000 to $39,999,999 but not over $40,000,000		$50,000
	over $40,000,000 and over		$75,000

EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
tax due on or after that date.

    Sec. 6. Minnesota Statutes 2012, section 383E.21, subdivision 1, is amended to read:
    Subdivision 1. Authority to levy property taxes and incur debt. (a) To finance the
cost of designing, constructing, and acquiring countywide public safety improvements
and equipment, including personal property, benefiting both Anoka County and the
municipalities located within Anoka County, the governing body of Anoka County may
levy property taxes for public safety improvements and equipment, and issue:
(1) capital improvement bonds under the provisions of section 373.40 as if the
infrastructure and equipment qualified as a "capital improvement" within the meaning of
section 373.40, subdivision 1, paragraph (b); and
(2) capital notes under the provisions of section 373.01, subdivision 3, as if the
equipment qualified as "capital equipment" within the meaning of section 373.01,
subdivision 3. Personal property acquired with the proceeds of the bonds or capital
notes issued under this section must have an expected useful life at least as long as the
term of debt.
(b) The outstanding principal amount of the bonds and the capital notes issued under
this section may not exceed $8,000,000 at any time. Any bonds or notes issued pursuant
to this section must only be issued after approval by a majority vote of the Anoka County
Joint Law Enforcement Council, a joint powers board.
EFFECTIVE DATE.This section is effective beginning for taxes payable in 2013
and expires under Minnesota Statutes, section 383E.21, subdivision 3.

    Sec. 7. Minnesota Statutes 2012, section 383E.21, subdivision 2, is amended to read:
    Subd. 2. Treatment of levy. Notwithstanding sections 275.065, subdivision 3,
and 276.04, the county may report the tax attributable to any levy to fund public safety
capital improvements or equipment projects approved by the Anoka County Joint Law
Enforcement Council or pay principal and interest on bonds or notes issued under this
section as a separate line item on the proposed property tax notice and the property tax
statement. Notwithstanding any provision in chapter 275 or 373 to the contrary, bonds or
notes issued by Anoka County under this section must not be included in the computation
of the net debt of Anoka County.
EFFECTIVE DATE.This section is effective beginning for taxes payable in 2013
and expires under Minnesota Statutes, section 383E.21, subdivision 3.

    Sec. 8. Minnesota Statutes 2013 Supplement, section 469.169, is amended by adding a
subdivision to read:
    Subd. 20. Additional zone allocations. $3,000,000 is allocated per year for calendar
years 2014 through 2019 for tax reductions in border city enterprise zones and border city
development zones. The commissioner shall allocate this amount among the cities on a
per capita basis. Allocations may be used for tax reductions for that year under either:
(1) the border city enterprise zone program under section 469.171, or for other
offsets of taxes imposed on or remitted by businesses located in the enterprise zone, if
the municipality determines that the granting of the tax reduction or offset is necessary to
retain a business within or attract a business to the zone; or
(2) the border city development zone program under section 469.1732 or 469.1734.
EFFECTIVE DATE.This section is effective July 1, 2014, but only $1,500,000 is
available in calendar year 2014.

    Sec. 9. Minnesota Statutes 2012, section 469.171, subdivision 6, is amended to read:
    Subd. 6. Additional border city tax reductions. In addition to the tax reductions
authorized by subdivision 1, for a border city zone, the following types of tax reductions
may be approved:
(1) a credit against income tax for workers employed in the zone and not qualifying
for a credit under subdivision 1, clause (2), subject to a maximum of $1,500 $3,000 per
employee per year;
(2) a state paid property tax credit for a portion of the property taxes paid by a
commercial or industrial facility located in the zone.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. CARLTON COUNTY; LEVY FOR SOIL AND WATER
CONSERVATION DISTRICT.
    Subdivision 1. Definitions. (a) For the purposes of this section, "district" means
the Carlton County Soil and Water Conservation District.
(b) For the purposes of this section, "county" means Carlton County.
    Subd. 2. Special project levy. Notwithstanding any law to the contrary, the county
may levy ad valorem property taxes on taxable property within the area of its jurisdiction
for the purposes specified in subdivision 3. The proceeds of the tax must be placed in a
separate account and used only for the purposes specified in subdivision 3. The amount
levied is separate from any other amount to be levied for the district by the county under
Minnesota Statutes, section 103C.331, subdivision 16.
    Subd. 3. Purpose; limit on levy amount. (a) The county must allocate the
proceeds of any tax imposed under this section to the district solely to pay principal,
interest, and any associated costs of obtaining and servicing a loan to finance the planning,
constructing, and equipping of an office and storage facility for the district.
(b) The maximum amount of the levy in any year may not exceed the amount
necessary, after deduction of any amount remaining from the levy imposed in prior years,
to pay 105 percent of the principal and interest due in the following calendar year and
through July 1 of the next year.
    Subd. 4. Expiration. (a) This section expires:
(1) following the final payment of principal, interest, and any associated costs of the
loan under subdivision 3, or any loan or other financing that refinanced the original loan; or
(2) if the district does not obtain the loan under subdivision 3 prior to May 1, 2017.
(b) Upon expiration of this section, any amount remaining in the account created
under subdivision 2 must be transferred to the general account of the county and used to
reduce any amount to be levied for the district by the county under Minnesota Statutes,
section 103C.331, subdivision 16, for the following year, and any subsequent years, until
the amount remaining is exhausted.
EFFECTIVE DATE.This section is effective the day following compliance by
Carlton County with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

    Sec. 11. 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. Income tax subtraction for discharge of indebtedness income. The
provisions of article 4, section 7, clause (21), are intended to exclude from state taxation in
2014 amounts otherwise recognizable as income but excluded at the federal level for tax
years 2007 through 2013 in response to the national housing crisis.
    Subd. 3. Income tax subtraction for military pay; Active Guard/Reserve
members of the National Guard. The provisions of article 4, section 7, clause (10), are
intended to provide equitable tax treatment to Minnesota residents who are members of
the National Guard and serve full time in Active Guard/Reserve (AGR) status by allowing
an income tax subtraction for military pay equivalent to that allowed under Minnesota
Statutes, section 290.01, subdivision 19b, clause (11), for Minnesota residents who serve
full time in the armed forces of the United States.
    Subd. 4. Research credit for sole proprietors. The provisions of article 4, section
9, are intended to provide equitable tax treatment for Minnesota businesses operated as
sole proprietorships by allowing sole proprietors to claim the research credit on the same
basis as it is allowed for businesses operated as C corporations or pass-through entities.
    Subd. 5. Estate tax situs rule for qualified art. The provisions of article 4, section
12, deeming certain qualified art on loan to Minnesota nonprofit entities as property with
a situs outside Minnesota under the estate tax are intended to prevent the Minnesota
estate tax from discouraging nonresident owners of art from loaning it to Minnesota
nonprofit museums.
    Subd. 6. Sales of coin-operated amusement devices defined as sales for resale.
The provisions of article 3, section 9, defining certain coin-operated amusement devices
as sales for resale are intended to reduce tax pyramiding by exempting an input to a
taxable service.
    Subd. 7. Expansion of sales tax exemption for local governments. The provisions
of article 3, sections 12 and 17, modifying the sales tax on certain local government
purchases are intended to reduce the cost of providing local government services,
remove a barrier for intergovernmental cooperation, and reduce existing compliance and
administration costs for local governments.
    Subd. 8. Fund-raising sales by nonprofit groups. The provisions of article 3,
section 13, raising the limit on tax exempt fund-raising by nonprofit organizations is
intended to reflect the impact on inflation over time on the limit and reduce compliance
costs for groups that exceed the limit.
    Subd. 10. Microdistillery credit. The provisions of article 3, section 19, allowing a
microdistillery credit is to relieve small distillers of the burden of paying excise tax on
the distribution of free samples of their products and to encourage the development and
marketing of products by niche distillers in the state.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 8

UNSESSION

    Section 1. Minnesota Statutes 2012, section 16D.02, subdivision 3, is amended to read:
    Subd. 3. Debt. "Debt" means an amount owed to the state directly, or through a
state agency, on account of a fee, duty, lease, direct loan, loan insured or guaranteed by
the state, rent, service, sale of real or personal property, overpayment, fine, assessment,
penalty, restitution, damages, interest, tax, bail bond, forfeiture, reimbursement, liability
owed, an assignment to the state including assignments under section 256.741, the Social
Security Act, or other state or federal law, recovery of costs incurred by the state, or any
other source of indebtedness to the state. Debt also includes amounts owed to individuals
as a result of civil, criminal, or administrative action brought by the state or a state agency
pursuant to its statutory authority or for which the state or state agency acts in a fiduciary
capacity in providing collection services in accordance with the regulations adopted under
the Social Security Act at Code of Federal Regulations, title 45, section 302.33. When
the commissioner provides collection services pursuant to a debt qualification plan to a
referring agency, debt also includes an amount owed to the courts, local government
units, Minnesota state colleges and universities governed by the Board of Trustees of the
Minnesota State Colleges and Universities, or University of Minnesota.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 16D.02, subdivision 6, is amended to read:
    Subd. 6. Referring agency. "Referring agency" means a state agency, local
government unit, Minnesota state colleges and universities governed by the Board of
Trustees of the Minnesota State Colleges and Universities, University of Minnesota, or a
court, that has entered into a debt qualification plan an agreement with the commissioner
to refer debts to the commissioner for collection.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 16D.04, subdivision 3, is amended to read:
    Subd. 3. Services. The commissioner shall provide collection services for a state
agency, and may provide for collection services for a court, in accordance with the terms and
conditions of a signed debt qualification plan referring agencies other than state agencies.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2012, section 16D.04, subdivision 4, is amended to read:
    Subd. 4. Authority to contract. The commissioners commissioner of revenue and
management and budget may contract with credit bureaus, private collection agencies, and
other entities as necessary for the collection of debts. A private collection agency acting
under a contract with the commissioner of revenue or management and budget is subject
to sections 332.31 to 332.45, except that the private collection agency may indicate that it
is acting under a contract with the state. The commissioner may not delegate the powers
provided under section 16D.08 to any nongovernmental entity.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2012, section 16D.07, is amended to read:
16D.07 NOTICE TO DEBTOR.
The referring agency shall send notice to the debtor by United States mail or
personal delivery at the debtor's last known address at least 20 days before the debt is
referred to the commissioner. The notice must state the nature and amount of the debt,
identify to whom the debt is owed, and inform the debtor of the remedies available under
this chapter. The referring agency shall advise the debtor of collection costs imposed
under section 16D.11 and of the debtor's right to cancellation of collection costs under
section 16D.11, subdivision 3.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2012, section 16D.11, subdivision 1, is amended to read:
    Subdivision 1. Imposition. As determined by the commissioner of management and
budget revenue, collection costs shall be added to the debts referred to the commissioner
or private collection agency for collection. Collection costs are collectible by the
commissioner or private agency from the debtor at the same time and in the same
manner as the referred debt. The referring agency shall advise the debtor of collection
costs under this section and the debtor's right to cancellation of collection costs under
subdivision 3 at the time the agency sends notice to the debtor under section 16D.07.
If the commissioner or private agency collects an amount less than the total due, the
payment is applied proportionally to collection costs and the underlying debt unless
the commissioner of management and budget has waived this requirement for certain
categories of debt pursuant to the department's internal guidelines. Collection costs
collected by the commissioner under this subdivision or retained under subdivision 6 shall
be deposited in the general fund as nondedicated receipts. Collection costs collected by
private agencies are appropriated to the referring agency to pay the collection fees charged
by the private agency. Collections of collection costs in excess of collection agency fees
must be deposited in the general fund as nondedicated receipts.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2012, section 16D.11, subdivision 3, is amended to read:
    Subd. 3. Cancellation. Collection costs imposed under subdivision 1 shall be
canceled and subtracted from the amount due if:
(1) the debtor's household income as defined in section 290A.03, subdivision 5,
excluding the exemption subtractions in subdivision 3, paragraph (3) of that section, for
the 12 months preceding the date of referral is less than twice the annual federal poverty
guideline under United States Code, title 42, section 9902, subsection (2);
(2) within 60 days after the first contact with the debtor by the enterprise
commissioner or collection agency, the debtor establishes reasonable cause for the failure
to pay the debt prior to referral of the debt to the enterprise commissioner;
(3) a good faith dispute as to the legitimacy or the amount of the debt is made,
and payment is remitted or a payment agreement is entered into within 30 days after
resolution of the dispute;
(4) good faith litigation occurs and the debtor's position is substantially justified, and
if the debtor does not totally prevail, the debt is paid or a payment agreement is entered
into within 30 days after the judgment becomes final and nonappealable; or
(5) collection costs have been added by the referring agency and are included in
the amount of the referred debt.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2012, section 16D.11, subdivision 7, is amended to read:
    Subd. 7. Adjustment of rate. By June 1 of each year, the commissioner shall
determine the rate of collection costs for debts referred to the enterprise commissioner
during the next fiscal year. The rate is a percentage of the debts in an amount that most
nearly equals the costs of the enterprise commissioner necessary to process and collect
referred debts under this chapter. In no event shall the rate of the collection costs exceed
25 percent of the debt. Determination of the rate of collection costs under this section is
not subject to the fee setting requirements of section 16A.1283.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2012, section 84A.20, subdivision 2, is amended to read:
    Subd. 2. County proposal to state. Under certain conditions, The board of county
commissioners of any county may by resolution propose to the state that one or more
areas in the county be taken over by the state for afforestation, reforestation, flood control
projects, or other state purposes. The projects are to be managed, controlled, and used for
the purposes in subdivision 1 on lands to be acquired by the state within the projects, as set
forth in sections 84A.20 to 84A.30. The county board may propose this if (1) the county
contains lands suitable for the purposes in subdivision 1, (2) on January 1, 1931, the taxes
on more than 35 percent of the taxable land in the county are delinquent, (3) on January 1,
1931, the county's bonded ditch indebtedness, including accrued interest, equals or exceeds
nine percent of the assessed valuation of the county, exclusive of money and credits.
The area taken over must include lands that have been assessed for all or part of
the cost of the establishment and construction of public drainage ditches under state law,
and on which the assessments or installments are delinquent. A certified copy of the
county board's resolution must be filed with the department and considered and acted
upon by the department. If approved by the department, it must then be submitted to,
considered, and acted upon by the executive council. If approved by the Executive
Council, the proposition must be formally accepted by the governor. Acceptance must be
communicated in writing to and filed with the county auditor.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2012, section 84A.31, subdivision 2, is amended to read:
    Subd. 2. County proposal to state. Under certain conditions, The board of county
commissioners of any county may by resolution propose that the state take over part of the
tax-delinquent lands in the county. The board may propose this if:
(1) the county contains land suitable for the purposes in subdivision 1;.
(2) on January 1, 1933, the taxes on more than 25 percent of the acreage of the lands
in a town in the county are delinquent, as shown by its tax books;
(3) on January 1, 1933, the taxes or ditch assessments on more than 50 percent of the
acreage of the lands to be taken over are delinquent, as shown by the county's tax books; and
(4) on January 1, 1933, the bonded ditch indebtedness of the county equals or
exceeds 15 percent of the assessed value of the county for 1932 as fixed by the Minnesota
Tax Commission, exclusive of money and credits.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2012, section 115B.49, subdivision 4, is amended to read:
    Subd. 4. Registration; fees. (a) The owner or operator of a dry cleaning facility
shall register on or before October 1 of each year with the commissioner of revenue in
a manner prescribed by the commissioner of revenue and pay a registration fee for the
facility. The amount of the fee is:
(1) $500, for facilities with a full-time equivalence of fewer than five;
(2) $1,000, for facilities with a full-time equivalence of five to ten; and
(3) $1,500, for facilities with a full-time equivalence of more than ten.
The registration fee must be paid on or before October 18 or the owner or operator
of a dry cleaning facility may elect to pay the fee in equal installments. Installment
payments must be paid on or before October 18, on or before January 18, on or before
April 18, and on or before June 18. All payments made after October 18 bear interest
at the rate specified in section 270C.40.
(b) A person who sells dry cleaning solvents for use by dry cleaning facilities in
the state shall collect and remit to the commissioner of revenue in a the same manner
prescribed by the commissioner of revenue, on or before the 20th day of the month
following the month in which the sales of dry cleaning solvents are made for the taxes
imposed under chapter 297A, a fee of:
(1) $3.50 for each gallon of perchloroethylene sold for use by dry cleaning facilities
in the state;
(2) 70 cents for each gallon of hydrocarbon-based dry cleaning solvent sold for use
by dry cleaning facilities in the state; and
(3) 35 cents for each gallon of other nonaqueous solvents sold for use by dry
cleaning facilities in the state.
(c) The audit, assessment, appeal, collection, enforcement, and administrative
provisions of chapters 270C and 289A apply to the fee imposed by this subdivision. To
enforce this subdivision, the commissioner of revenue may grant extensions to file returns
and pay fees, impose penalties and interest on the annual registration fee under paragraph
(a) and the monthly fee under paragraph (b), and abate penalties and interest in the manner
provided in chapters 270C and 289A. The penalties and interest imposed on taxes under
chapter 297A apply to the fees imposed under this subdivision. Disclosure of data collected
by the commissioner of revenue under this subdivision is governed by chapter 270B.
EFFECTIVE DATE.This section is effective for fees due after June 30, 2014.

    Sec. 12. Minnesota Statutes 2012, section 163.06, subdivision 1, is amended to read:
    Subdivision 1. Levy. The county board of any county in which there are unorganized
townships may levy a tax for road and bridge purposes upon all the real and personal
property in such unorganized townships, exclusive of money and credits taxed under the
provisions of chapter 285.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2012, section 270.11, subdivision 1, is amended to read:
    Subdivision 1. To act as State Board of Equalization. The commissioner of
revenue shall have and exercise all the rights, powers and authority by law vested in the
State Board of Equalization, which board of equalization is hereby continued, with full
power and authority to review, modify, and revise all of the acts and proceedings of the
commissioner in so far as they relate to the equalization and valuation of property assessed
for taxation, as prescribed by section 270.12.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2012, section 270.12, subdivision 2, is amended to read:
    Subd. 2. Meeting dates; duties. The board shall meet annually between April 15
and June 30 at the office of the commissioner of revenue and examine and compare the
returns of the assessment of the property in the several counties, and equalize the same so
that all the taxable property in the state shall be assessed at its market value, subject to
the following rules:
(1) The board shall add to or deduct from the aggregate valuation of the real property
of every county, which the board believes to be valued below or above its market value in
money, such percent as will bring the same to its market value in money;
(2) The board shall deduct from the aggregate valuation of the real property of every
county, which the board believes to be valued above its market value in money, such
percent as will reduce the same to its market value in money;
(3) (2) If the board believes the valuation for a part of a class determined by a range
of market value under clause (8) (6) or otherwise, a class, or classes of the real property of
any town or district in any county, or the valuation for a part of a class, a class, or classes
of the real property of any county not in towns or cities, should be raised or reduced,
without raising or reducing the other real property of such county, or without raising or
reducing it in the same ratio, the board may add to, or take from, the valuation of a part of
a class, a class, or classes in any one or more of such towns or cities, or of the property not
in towns or cities, such percent as the board believes will raise or reduce the same to its
market value in money;
(4) (3) The board shall add to or take from the aggregate valuation of any part of a
class, a class, or classes of personal property of any county, town, or city, which the
board believes to be valued below or above the market value thereof, such percent as will
raise the same to its market value in money;
(5) The board shall take from the aggregate valuation of any part of a class, a class,
or classes of personal property in any county, town or city, which the board believes to
be valued above the market value thereof, such percent as will reduce the same to its
market value in money;
(6) (4) The board shall not reduce the aggregate valuation of all the property of the
state, as returned by the several county auditors, more than one percent on the whole
valuation thereof;
(7) (5) When it would be of assistance in equalizing values the board may require any
county auditor to furnish statements showing assessments of real and personal property
of any individuals, firms, or corporations within the county. The board shall consider
and equalize such assessments and may increase the assessment of individuals, firms, or
corporations above the amount returned by the county board of equalization when it shall
appear to be undervalued, first giving notice to such persons of the intention of the board
so to do, which notice shall fix a time and place of hearing. The board shall not decrease
any such assessment below the valuation placed by the county board of equalization;
(8) (6) In equalizing values pursuant to this section, the board shall utilize a 12-month
assessment/sales ratio study conducted by the Department of Revenue containing only
sales that are filed in the county auditor's office under section 272.115, by November 1 of
the previous year and that occurred between October 1 of the year immediately preceding
the previous year and September 30 of the previous year.
The assessment/sales ratio study may separate the values of residential property
into market value categories. The board may adjust the market value categories and the
number of categories as necessary to create an adequate sample size for each market value
category. The board may determine the adequate sample size. To the extent practicable,
the methodology used in preparing the assessment/sales ratio study must be consistent
with the most recent Standard on Assessment Sales Ratio Studies published by the
Assessment Standards Committee of the International Association of Assessing Officers.
The board may determine the geographic area used in preparing the study to accurately
equalize values. A sales ratio study separating residential property into market value
categories may not be used as the basis for a petition under chapter 278.
The sales prices used in the study must be discounted for terms of financing. The
board shall use the median ratio as the statistical measure of the level of assessment for
any particular category of property; and
(9) (7) The board shall receive from each county the estimated market values on the
assessment date falling within the study period for all parcels by magnetic tape or other a
medium as prescribed by the commissioner of revenue.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Minnesota Statutes 2012, section 270.12, subdivision 4, is amended to read:
    Subd. 4. Public utility property. For purposes of equalization only, public utility
personal property shall be treated as a separate class of property notwithstanding the fact
that its class rate is the same as commercial-industrial property.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 16. Minnesota Statutes 2012, section 270A.03, subdivision 2, is amended to read:
    Subd. 2. Claimant agency. "Claimant agency" means any state agency, as defined
by section 14.02, subdivision 2, the regents of the University of Minnesota, any district
court of the state, any county, any statutory or home rule charter city, including a city that
is presenting a claim for a municipal hospital or a public library or a municipal ambulance
service, a hospital district, a private nonprofit hospital that leases its building from the
county or city in which it is located, any ambulance service licensed under chapter 144E,
any public agency responsible for child support enforcement, any public agency responsible
for the collection of court-ordered restitution, and any public agency established by
general or special law that is responsible for the administration of a low-income housing
program, and the Minnesota collection enterprise as defined in section 16D.02, subdivision
8 , for the purpose of collecting the costs imposed under section 16D.11.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 17. Minnesota Statutes 2012, section 270B.14, subdivision 3, is amended to read:
    Subd. 3. Administration of enterprise, and job opportunity, and biotechnology
and health sciences industry zone programs. The commissioner may disclose return
information relating to the taxes imposed by chapters 290 and 297A to the Department of
Employment and Economic Development or a municipality with a border city enterprise
zone as defined under section 469.166, but only as necessary to administer the funding
limitations under section 469.169, or to the Department of Employment and Economic
Development and appropriate officials from the local government units in which a
qualified business is located but only as necessary to enforce the job opportunity building
zone benefits under section 469.315, or biotechnology and health sciences industry zone
benefits under section 469.336.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 18. Minnesota Statutes 2012, section 270C.085, is amended to read:
270C.085 NOTIFICATION REQUIREMENTS; SALES AND USE TAXES.
The commissioner of revenue shall establish a means of electronically notifying
persons holding a sales tax permit under section 297A.84 of any statutory change in
chapter 297A and any issuance or change in any administrative rule, revenue notice, or
sales tax fact sheet or other written information provided by the department explaining the
interpretation or administration of the tax imposed under that chapter. The notification
must indicate the basic subject of the statute, rule, fact sheet, or other material and provide
an electronic link to the material. Any person holding a sales tax permit that provides
an electronic address to the department must receive these notifications unless they
specifically request electronically, or in writing, to be removed from the notification list.
This requirement does not replace traditional means of notifying the general public or
persons without access to electronic communications of changes in the sales tax law. The
electronic notification must begin no later than December 31, 2009.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 19. Minnesota Statutes 2012, section 270C.52, subdivision 2, is amended to read:
    Subd. 2. Payment agreements. (a) When any portion of any tax payable to the
commissioner together with interest and penalty thereon, if any, has not been paid, the
commissioner may extend the time for payment for a further period. When the authority
of this section is invoked, the extension shall be evidenced by written agreement signed by
the taxpayer and the commissioner, stating the amount of the tax with penalty and interest,
if any, and providing for the payment of the amount in installments.
(b) The agreement may contain a confession of judgment for the amount and for any
unpaid portion thereof. If the agreement contains a confession of judgment, the confession
of judgment must provide that the commissioner may enter judgment against the taxpayer
in the district court of the county of residence as shown upon the taxpayer's tax return for
the unpaid portion of the amount specified in the extension agreement.
(c) The agreement shall provide that it can be terminated, after notice by the
commissioner, if information provided by the taxpayer prior to the agreement was
inaccurate or incomplete, collection of the tax covered by the agreement is in jeopardy,
there is a subsequent change in the taxpayer's financial condition, the taxpayer has failed
to make a payment due under the agreement, or the taxpayer has failed to pay any other
tax or file a tax return coming due after the agreement.
(d) The notice must be given at least 14 calendar days prior to termination, and shall
advise the taxpayer of the right to request a reconsideration from the commissioner of
whether termination is reasonable and appropriate under the circumstances. A request for
reconsideration does not stay collection action beyond the 14-day notice period. If the
commissioner has reason to believe that collection of the tax covered by the agreement
is in jeopardy, the commissioner may proceed under section 270C.36 and terminate the
agreement without regard to the 14-day period.
(e) The commissioner may accept other collateral the commissioner considers
appropriate to secure satisfaction of the tax liability. The principal sum specified in the
agreement shall bear interest at the rate specified in section 270C.40 on all unpaid portions
thereof until the same has been fully paid or the unpaid portion thereof has been entered as
a judgment. The judgment shall bear interest at the rate specified in section 270C.40.
(f) If it appears to the commissioner that the tax reported by the taxpayer is in excess
of the amount actually owing by the taxpayer, the extension agreement or the judgment
entered pursuant thereto shall be corrected. If after making the extension agreement
or entering judgment with respect thereto, the commissioner determines that the tax as
reported by the taxpayer is less than the amount actually due, the commissioner shall
assess a further tax in accordance with the provisions of law applicable to the tax.
(g) The authority granted to the commissioner by this section is in addition to any
other authority granted to the commissioner by law to extend the time of payment or the
time for filing a return and shall not be construed in limitation thereof.
(h) The commissioner shall charge a fee for entering into payment agreements that
reflects the commissioner's costs for entering into payment agreements. The fee is set at
$50 and is charged for entering into a payment agreement, for entering into a new payment
agreement after the taxpayer has defaulted on a prior agreement, and for entering into a
new payment agreement as a result of renegotiation of the terms of an existing agreement.
The fee is paid to the commissioner before the payment agreement becomes effective and
does not reduce the amount of the liability.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 20. Minnesota Statutes 2012, section 272.01, subdivision 1, is amended to read:
    Subdivision 1. Generally taxable. All real and personal property in this state, and
all personal property of persons residing therein, including the property of corporations,
banks, banking companies, and bankers, is taxable, except Indian lands and such other
property as is by law exempt from taxation.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 21. Minnesota Statutes 2012, section 272.01, subdivision 3, is amended to read:
    Subd. 3. Exceptions. The provisions of subdivision 2 shall not apply to:
(a) Federal property for which payments are made in lieu of taxes in amounts
equivalent to taxes which might otherwise be lawfully assessed;
(b) Real estate exempt from ad valorem taxes and taxes in lieu thereof which is
leased, loaned, or otherwise made available to telephone companies or electric, light
and power companies upon which personal property consisting of transmission and
distribution lines is situated and assessed pursuant to sections 273.37, 273.38, 273.40
and 273.41, or upon which are situated the communication lines of express, railway, or
telephone or telegraph companies, or pipelines used for the transmission and distribution
of petroleum products, or the equipment items of a cable communications company
subject to sections 238.35 to 238.42;
(c) Property presently owned by any educational institution chartered by the
territorial legislature;
(d) Indian lands;
(e) Property of any corporation organized as a tribal corporation under the Indian
Reorganization Act of June 18, 1934, (Statutes at Large, volume 48, page 984);
(f) Real property owned by the state and leased pursuant to section 161.23 or
161.431 , and acts amendatory thereto;
(g) Real property owned by a seaway port authority on June 1, 1967, upon which
there has been constructed docks, warehouses, tank farms, administrative and maintenance
buildings, railroad and ship terminal facilities and other maritime and transportation
facilities or those directly related thereto, together with facilities for the handling of
passengers and baggage and for the handling of freight and bulk liquids, and personal
property owned by a seaway port authority used or usable in connection therewith, when
said property is leased to a private individual, association or corporation, but only when
such lease provides that the said facilities are available to the public for the loading and
unloading of passengers and their baggage and the handling, storage, care, shipment,
and delivery of merchandise, freight and baggage and other maritime and transportation
activities and functions directly related thereto, but not including property used for grain
elevator facilities; it being the declared policy of this state that such property when
so leased is public property used exclusively for a public purpose, notwithstanding the
one-year limitation in the provisions of section 273.19;
(h) Notwithstanding the provisions of clause (g), when the annual rental received by
a seaway port authority in any calendar year for such leased property exceeds an amount
reasonably required for administrative expense of the authority per year, plus promotional
expense for the authority not to exceed the sum of $100,000 per year, to be expended
when and in the manner decided upon by the commissioners, plus an amount sufficient to
pay all installments of principal and interest due, or to become due, during such calendar
year and the next succeeding year on any revenue bonds issued by the authority, plus
25 percent of the gross annual rental to be retained by the authority for improvement,
development, or other contingencies, the authority shall make a payment in lieu of real
and personal property taxes of a reasonable portion of the remaining annual rental to the
county treasurer of the county in which such seaway port authority is principally located.
Any such payments to the county treasurer shall be disbursed by the treasurer on the same
basis as real estate taxes are divided among the various governmental units, but if such
port authority shall have received funds from the state of Minnesota and funds from any
city and county pursuant to Laws 1957, chapters 648, 831, and 849 and acts amendatory
thereof, then such disbursement by the county treasurer shall be on the same basis as real
estate taxes are divided among the various governmental units, except that the portion of
such payments which would otherwise go to other taxing units shall be divided equally
among the state of Minnesota and said county and city.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 22. Minnesota Statutes 2012, section 272.025, subdivision 1, is amended to read:
    Subdivision 1. Statement of exemption. (a) Except in the case of property owned
by the state of Minnesota or any political subdivision thereof, and property exempt from
taxation under section 272.02, subdivisions 9, 10, 13, 15, 18, 20, and 22 to 25, and at the
times provided in subdivision 3, a taxpayer claiming an exemption from taxation on
property described in section 272.02, subdivisions 1 2 to 33, must file a statement of
exemption with the assessor of the assessment district in which the property is located.
(b) A taxpayer claiming an exemption from taxation on property described in section
272.02, subdivision 10 , must file a statement of exemption with the commissioner of
revenue, on or before February 15 of each year for which the taxpayer claims an exemption.
(c) In case of sickness, absence or other disability or for good cause, the assessor
or the commissioner may extend the time for filing the statement of exemption for a
period not to exceed 60 days.
(d) The commissioner of revenue shall prescribe the form and contents of the
statement of exemption.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 23. Minnesota Statutes 2012, section 272.027, subdivision 1, is amended to read:
    Subdivision 1. Electricity generated to produce goods and services. Personal
property used to generate electric power is exempt from property taxation if the electric
power is used to manufacture or produce goods, products, or services, other than electric
power, by the owner of the electric generation plant. Except as provided in subdivisions 2
and 3, The exemption does not apply to property used to produce electric power for sale
to others and does not apply to real property. In determining the value subject to tax,
a proportionate share of the value of the generating facilities, equal to the proportion
that the power sold to others bears to the total generation of the plant, is subject to the
general property tax in the same manner as other property. Power generated in such a
plant and exchanged for an equivalent amount of power that is used for the manufacture or
production of goods, products, or services other than electric power by the owner of the
generating plant is considered to be used by the owner of the plant.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 24. Minnesota Statutes 2012, section 272.029, subdivision 6, is amended to read:
    Subd. 6. Distribution of revenues. Revenues from the taxes imposed under
subdivision 5 must be part of the settlement between the county treasurer and the county
auditor under section 276.09. The revenue must be distributed by the county auditor or the
county treasurer to local taxing jurisdictions in which the wind energy conversion system
is located as follows: beginning with distributions in 2010, 80 percent to counties; and 20
percent to cities and townships; and for distributions occurring in 2006 to 2009, 80 percent
to counties; 14 percent to cities and townships; and six percent to school districts.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 25. Minnesota Statutes 2013 Supplement, section 273.032, is amended to read:
273.032 MARKET VALUE DEFINITION.
    (a) Unless otherwise provided, for the purpose of determining any property tax
levy limitation based on market value or any limit on net debt, the issuance of bonds,
certificates of indebtedness, or capital notes based on market value, any qualification to
receive state aid based on market value, or any state aid amount based on market value,
the terms "market value," "estimated market value," and "market valuation," whether
equalized or unequalized, mean the estimated market value of taxable property within the
local unit of government before any of the following or similar adjustments for:
    (1) the market value exclusions under:
    (i) section 273.11, subdivisions 14a and 14c (vacant platted land);
    (ii) section 273.11, subdivision 16 (certain improvements to homestead property);
    (iii) section 273.11, subdivisions 19 and 20 (certain improvements to business
properties);
    (iv) section 273.11, subdivision 21 (homestead property damaged by mold);
    (v) section 273.11, subdivision 22 (qualifying lead hazardous reduction projects);
    (vi) section 273.13, subdivision 34 (homestead of a disabled veteran or family
caregiver);
    (vii) section 273.13, subdivision 35 (homestead market value exclusion); or
    (2) the deferment of value under:
    (i) the Minnesota Agricultural Property Tax Law, section 273.111;
    (ii) the Aggregate Resource Preservation Law, section 273.1115;
    (iii) (ii) the Minnesota Open Space Property Tax Law, section 273.112;
    (iv) (iii) the rural preserves property tax program, section 273.114; or
    (v) (iv) the Metropolitan Agricultural Preserves Act, section 473H.10; or
    (3) the adjustments to tax capacity for:
    (i) tax increment financing under sections 469.174 to 469.1794;
    (ii) fiscal disparities under chapter 276A or 473F; or
    (iii) powerline credit under section 273.425.
    (b) Estimated market value under paragraph (a) also includes the market value
of tax-exempt property if the applicable law specifically provides that the limitation,
qualification, or aid calculation includes tax-exempt property.
    (c) Unless otherwise provided, "market value," "estimated market value," and
"market valuation" for purposes of property tax levy limitations and calculation of state
aid, refer to the estimated market value for the previous assessment year and for purposes
of limits on net debt, the issuance of bonds, certificates of indebtedness, or capital notes
refer to the estimated market value as last finally equalized.
    (d) For purposes of a provision of a home rule charter or of any special law that is not
codified in the statutes and that imposes a levy limitation based on market value or any limit
on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market
value, the terms "market value," "taxable market value," and "market valuation," whether
equalized or unequalized, mean "estimated market value" as defined in paragraph (a).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 26. Minnesota Statutes 2012, section 273.061, subdivision 6, is amended to read:
    Subd. 6. Salaries; expenses. The salaries of the county assessor and assistants and
clerical help, shall be fixed by the board of county commissioners and shall be payable in
monthly installments out of the general revenue fund of the county. In counties with a
population of less than 50,000 inhabitants, according to the then last preceding federal
census, the board of county commissioners shall not fix the salary of the county assessor at
an amount below the following schedule:
In counties with a population of less than 6,500, $5,900;
In counties with a population of 6,500 but less than 12,000, $6,200;
In counties with a population of 12,000 but less than 16,000, $6,500;
In counties with a population of 16,000 but less than 21,000, $6,700;
In counties with a population of 21,000 but less than 30,000, $6,900;
In counties with a population of 30,000 but less than 39,500, $7,100;
In counties with a population of 39,500 but less than 50,000, $7,300;
In counties with a population of 50,000 or more, $8,300.
In addition to their salaries, the county assessor and assistants shall be allowed their
expenses for reasonable and necessary travel in the performance of their duties, including
necessary travel, lodging and meal expense incurred by them while attending meetings of
instructions or official hearings called by the commissioner of revenue. These expenses
shall be payable out of the general revenue fund of the county, and shall be allowed on the
same basis as such expenses are allowed to other county officers.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 27. Minnesota Statutes 2012, section 273.10, is amended to read:
273.10 SCHOOL DISTRICTS.
When assessing personal property the county assessor shall designate the number of
the school district in which each person assessed is liable for tax, by writing the number
of the district opposite each assessment in a column provided for that purpose in the
assessment book. When the personal property of any person is assessable in several
school districts, the amount in each shall be assessed separately, and the name of the
owner placed opposite each amount.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 28. Minnesota Statutes 2012, section 273.11, subdivision 13, is amended to read:
    Subd. 13. Valuation of income-producing property. Beginning with the 1995
assessment, Only accredited assessors or senior accredited assessors or other licensed
assessors who have successfully completed at least two income-producing property
appraisal courses may value income-producing property for ad valorem tax purposes.
"Income-producing property" as used in this subdivision means the taxable property in
class 3a and 3b in section 273.13, subdivision 24; class 4a and 4c, except for seasonal
recreational property not used for commercial purposes; and class 5 in section 273.13,
subdivision 31 . "Income-producing property" includes any property in class 4e in section
273.13, subdivision 25 , that would be income-producing property under the definition in
this subdivision if it were not substandard. "Income-producing property appraisal course"
as used in this subdivision means a course of study of approximately 30 instructional
hours, with a final comprehensive test. An assessor must successfully complete the final
examination for each of the two required courses. The course must be approved by the
board of assessors.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 29. Minnesota Statutes 2012, section 273.112, subdivision 6a, is amended to read:
    Subd. 6a. Guidelines issued by commissioner. The commissioner of revenue shall
develop and issue guidelines for qualification by private golf clubs under this section
covering the access to and use of the golf course by members and other adults so as to be
consistent with the purposes and terms of this section. The guidelines shall be mailed to
the county attorney and assessor of each county not later than 60 days following May 26,
1989. Within 15 days of receipt of the guidelines from the commissioner, the assessor
shall mail a copy of the guidelines to each golf club in the county.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 30. Minnesota Statutes 2013 Supplement, section 273.1325, subdivision 2,
is amended to read:
    Subd. 2. Methodology. In making its annual assessment/sales ratio studies, the
Department of Revenue must use a methodology consistent with the most recent Standard
on Assessment Ratio Studies published by the assessment standards committee of the
International Association of Assessing Officers. The commissioner of revenue shall
supplement this general methodology with specific procedures necessary for execution of
the study in accordance with other Minnesota laws impacting the assessment/sales ratio
study. The commissioner shall document these specific procedures in writing and shall
publish the procedures in the State Register, but these procedures will not be considered
"rules" pursuant to the Minnesota Administrative Procedure Act. When property is sold and
the purchaser changes its use in a manner that would result in a change of classification of
the property, the assessment sales ratio study under this subdivision must take into account
that changed classification as soon as practicable. A change in status from homestead to
nonhomestead or from nonhomestead to homestead is not a change under this subdivision.
For purposes of this section, sections 270.12, subdivision 2, clause (8) (6), and 278.05,
subdivision 4 , the commissioner of revenue shall exclude from the assessment/sales ratio
study the sale of any nonagricultural property which does not contain an improvement,
if (1) the statutory basis on which the property's taxable value as most recently assessed
is less than market value as defined in section 273.11, or (2) the property has undergone
significant physical change or a change of use since the most recent assessment.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 31. Minnesota Statutes 2013 Supplement, section 273.1398, subdivision 3,
is amended to read:
    Subd. 3. Disparity reduction aid. The amount of disparity aid certified for each
taxing district within each unique taxing jurisdiction is the amount certified for taxes
payable in the prior year shall be multiplied by the ratio of (1) the jurisdiction's tax
capacity using the class rates for taxes payable in the year for which aid is being computed,
to (2) its tax capacity using the class rates for taxes payable in the year prior to that for
which aid is being computed, both based upon taxable market values for taxes payable in
the year prior to that for which aid is being computed. If the commissioner determines
that insufficient information is available to reasonably and timely calculate the numerator
in this ratio for the first taxes payable year that a class rate change or new class rate is
effective, the commissioner shall omit the effects of that class rate change or new class
rate when calculating this ratio for aid payable in that taxes payable year. For aid payable
in the year following a year for which such omission was made, the commissioner shall
use in the denominator for the class that was changed or created, the tax capacity for taxes
payable two years prior to that in which the aid is payable, based on taxable market values
for taxes payable in the year prior to that for which aid is being computed.
EFFECTIVE DATE.This section is effective beginning for taxes payable in 2015.

    Sec. 32. Minnesota Statutes 2012, section 273.18, is amended to read:
273.18 LISTING, VALUATION, AND ASSESSMENT OF EXEMPT
PROPERTY BY COUNTY AUDITORS.
(a) In every sixth year after the year 1926 2010, the county auditor shall enter, in
a separate place in the real estate assessment books, the description of each tract of real
property exempt by law from taxation, with the name of the owner, if known, and the
assessor shall value and assess the same in the same manner that other real property is
valued and assessed, and shall designate in each case the purpose for which the property is
used.
(b) For purposes of the apportionment of fire state aid under section 69.021,
subdivision 7 , the county auditor shall include on the abstract of assessment of exempt real
property filed under this section, the total number of acres of all natural resources lands for
which in lieu payments are made under sections 477A.11 to 477A.14. The assessor shall
estimate its market value, provided that if the assessor is not able to estimate the market
value of the land on a per parcel basis, the assessor shall furnish the commissioner of
revenue with an estimate of the average value per acre of this land within the county.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 33. Minnesota Statutes 2012, section 274.01, subdivision 1, is amended to read:
    Subdivision 1. Ordinary board; meetings, deadlines, grievances. (a) The town
board of a town, or the council or other governing body of a city, is the board of appeal
and equalization except (1) in cities whose charters provide for a board of equalization or
(2) in any city or town that has transferred its local board of review power and duties to
the county board as provided in subdivision 3. The county assessor shall fix a day and
time when the board or the board of equalization shall meet in the assessment districts
of the county. Notwithstanding any law or city charter to the contrary, a city board of
equalization shall be referred to as a board of appeal and equalization. On or before
February 15 of each year the assessor shall give written notice of the time to the city or
town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings
must be held between April 1 and May 31 each year. The clerk shall give published and
posted notice of the meeting at least ten days before the date of the meeting.
    The board shall meet at the office of the clerk to review the assessment and
classification of property in the town or city. No changes in valuation or classification
which are intended to correct errors in judgment by the county assessor may be made by
the county assessor after the board has adjourned in those cities or towns that hold a
local board of review; however, corrections of errors that are merely clerical in nature or
changes that extend homestead treatment to property are permitted after adjournment until
the tax extension date for that assessment year. The changes must be fully documented and
maintained in the assessor's office and must be available for review by any person. A copy
of the changes made during this period in those cities or towns that hold a local board of
review must be sent to the county board no later than December 31 of the assessment year.
    (b) The board shall determine whether the taxable property in the town or city has
been properly placed on the list and properly valued by the assessor. If real or personal
property has been omitted, the board shall place it on the list with its market value, and
correct the assessment so that each tract or lot of real property, and each article, parcel,
or class of personal property, is entered on the assessment list at its market value. No
assessment of the property of any person may be raised unless the person has been
duly notified of the intent of the board to do so. On application of any person feeling
aggrieved, the board shall review the assessment or classification, or both, and correct
it as appears just. The board may not make an individual market value adjustment or
classification change that would benefit the property if the owner or other person having
control over the property has refused the assessor access to inspect the property and the
interior of any buildings or structures as provided in section 273.20. A board member
shall not participate in any actions of the board which result in market value adjustments
or classification changes to property owned by the board member, the spouse, parent,
stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew,
or niece of a board member, or property in which a board member has a financial interest.
The relationship may be by blood or marriage.
    (c) A local board may reduce assessments upon petition of the taxpayer but the total
reductions must not reduce the aggregate assessment made by the county assessor by more
than one percent. If the total reductions would lower the aggregate assessments made by
the county assessor by more than one percent, none of the adjustments may be made. The
assessor shall correct any clerical errors or double assessments discovered by the board
without regard to the one percent limitation.
    (d) A local board does not have authority to grant an exemption or to order property
removed from the tax rolls.
    (e) A majority of the members may act at the meeting, and adjourn from day to day
until they finish hearing the cases presented. The assessor shall attend, with the assessment
books and papers, and take part in the proceedings, but must not vote. The county assessor,
or an assistant delegated by the county assessor shall attend the meetings. The board shall
list separately, on a form appended to the assessment book, all omitted property added
to the list by the board and all items of property increased or decreased, with the market
value of each item of property, added or changed by the board, placed opposite the item.
The county assessor shall enter all changes made by the board in the assessment book.
    (f) Except as provided in subdivision 3, if a person fails to appear in person, by
counsel, or by written communication before the board after being duly notified of the
board's intent to raise the assessment of the property, or if a person feeling aggrieved by an
assessment or classification fails to apply for a review of the assessment or classification,
the person may not appear before the county board of appeal and equalization for a review
of the assessment or classification. This paragraph does not apply if an assessment was
made after the local board meeting, as provided in section 273.01, or if the person can
establish not having received notice of market value at least five days before the local
board meeting.
    (g) The local board must complete its work and adjourn within 20 days from the
time of convening stated in the notice of the clerk, unless a longer period is approved by
the commissioner of revenue. No action taken after that date is valid. All complaints
about an assessment or classification made after the meeting of the board must be heard
and determined by the county board of equalization. A nonresident may, at any time,
before the meeting of the board file written objections to an assessment or classification
with the county assessor. The objections must be presented to the board at its meeting by
the county assessor for its consideration.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 34. Minnesota Statutes 2012, section 274.01, subdivision 2, is amended to read:
    Subd. 2. Special board; duties delegated. The governing body of a city, including
a city whose charter provides for a board of equalization, may appoint a special board of
review. The city may delegate to the special board of review all of the powers and duties
in subdivision 1. The special board of review shall serve at the direction and discretion
of the appointing body, subject to the restrictions imposed by law. The appointing body
shall determine the number of members of the board, the compensation and expenses to be
paid, and the term of office of each member. At least one member of the special board
of review must be an appraiser, realtor, or other person familiar with property valuations
in the assessment district.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 35. Minnesota Statutes 2012, section 275.08, subdivision 1a, is amended to read:
    Subd. 1a. Computation of tax capacity. For taxes payable in 1989, the county
auditor shall compute the gross tax capacity for each parcel according to the class rates
specified in section 273.13. The gross tax capacity will be the appropriate class rate
multiplied by the parcel's market value. For taxes payable in 1990 and subsequent years,
The county auditor shall compute the net tax capacity for each parcel according to the
class rates specified in section 273.13. The net tax capacity will be the appropriate class
rate multiplied by the parcel's market value.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 36. Minnesota Statutes 2012, section 275.08, subdivision 1d, is amended to read:
    Subd. 1d. Additional adjustment. If, after computing each local government's
adjusted local tax rate within a unique taxing jurisdiction pursuant to subdivision 1c, the
auditor finds that the total adjusted local tax rate of all local governments combined is
less than 90 percent of gross tax capacity for taxes payable in 1989 and 90 percent of net
tax capacity for taxes payable in 1990 and thereafter, the auditor shall increase each local
government's adjusted local tax rate proportionately so the total adjusted local tax rate of
all local governments combined equals 90 percent. The total amount of the increase in
tax resulting from the increased local tax rates must not exceed the amount of disparity
aid allocated to the unique taxing district under section 273.1398. The auditor shall
certify to the Department of Revenue the difference between the disparity aid originally
allocated under section 273.1398, subdivision 3, and the amount necessary to reduce
the total adjusted local tax rate of all local governments combined to 90 percent. Each
local government's disparity reduction aid payment under section 273.1398, subdivision
6 , must be reduced accordingly.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 37. Minnesota Statutes 2013 Supplement, section 275.70, subdivision 5, is
amended to read:
    Subd. 5. Special levies. "Special levies" means those portions of ad valorem taxes
levied by a local governmental unit for the following purposes or in the following manner:
    (1) to pay the costs of the principal and interest on bonded indebtedness or to
reimburse for the amount of liquor store revenues used to pay the principal and interest
due on municipal liquor store bonds in the year preceding the year for which the levy
limit is calculated;
    (2) to pay the costs of principal and interest on certificates of indebtedness issued for
any corporate purpose except for the following:
    (i) tax anticipation or aid anticipation certificates of indebtedness;
    (ii) certificates of indebtedness issued under sections 298.28 and 298.282;
    (iii) certificates of indebtedness used to fund current expenses or to pay the costs of
extraordinary expenditures that result from a public emergency; or
    (iv) certificates of indebtedness used to fund an insufficiency in tax receipts or an
insufficiency in other revenue sources, provided that nothing in this subdivision limits the
special levy authorized under section 475.755;
    (3) to provide for the bonded indebtedness portion of payments made to another
political subdivision of the state of Minnesota;
    (4) to fund payments made to the Minnesota State Armory Building Commission
under section 193.145, subdivision 2, to retire the principal and interest on armory
construction bonds;
    (5) property taxes approved by voters which are levied against the referendum
market value as provided under section 275.61;
    (6) to fund matching requirements needed to qualify for federal or state grants or
programs to the extent that either (i) the matching requirement exceeds the matching
requirement in calendar year 2001, or (ii) it is a new matching requirement that did not
exist prior to 2002;
    (7) to pay the expenses reasonably and necessarily incurred in preparing for or
repairing the effects of natural disaster including the occurrence or threat of widespread
or severe damage, injury, or loss of life or property resulting from natural causes, in
accordance with standards formulated by the Emergency Services Division of the state
Department of Public Safety, as allowed by the commissioner of revenue under section
275.74, subdivision 2 ;
    (8) pay amounts required to correct an error in the levy certified to the county
auditor by a city or county in a levy year, but only to the extent that when added to the
preceding year's levy it is not in excess of an applicable statutory, special law or charter
limitation, or the limitation imposed on the governmental subdivision by sections 275.70
to 275.74 in the preceding levy year;
    (9) to pay an abatement under section 469.1815;
    (10) to pay any costs attributable to increases in the employer contribution rates under
chapter 353, or locally administered pension plans, that are effective after June 30, 2001;
    (11) to pay the operating or maintenance costs of a county jail as authorized in section
641.01 or 641.262, or of a correctional facility as defined in section 241.021, subdivision 1,
paragraph (f), to the extent that the county can demonstrate to the commissioner of revenue
that the amount has been included in the county budget as a direct result of a rule, minimum
requirement, minimum standard, or directive of the Department of Corrections, or to pay
the operating or maintenance costs of a regional jail as authorized in section 641.262. For
purposes of this clause, a district court order is not a rule, minimum requirement, minimum
standard, or directive of the Department of Corrections. If the county utilizes this special
levy, except to pay operating or maintenance costs of a new regional jail facility under
sections 641.262 to 641.264 which will not replace an existing jail facility, any amount
levied by the county in the previous levy year for the purposes specified under this clause
and included in the county's previous year's levy limitation computed under section
275.71 , shall be deducted from the levy limit base under section 275.71, subdivision 2,
when determining the county's current year levy limitation. The county shall provide the
necessary information to the commissioner of revenue for making this determination;
    (12) to pay for operation of a lake improvement district, as authorized under section
103B.555 . If the county utilizes this special levy, any amount levied by the county in the
previous levy year for the purposes specified under this clause and included in the county's
previous year's levy limitation computed under section 275.71 shall be deducted from
the levy limit base under section 275.71, subdivision 2, when determining the county's
current year levy limitation. The county shall provide the necessary information to the
commissioner of revenue for making this determination;
    (13) to repay a state or federal loan used to fund the direct or indirect required
spending by the local government due to a state or federal transportation project or other
state or federal capital project. This authority may only be used if the project is not a
local government initiative;
    (14) to pay for court administration costs as required under section 273.1398,
subdivision 4b , less the (i) county's share of transferred fines and fees collected by the
district courts in the county for calendar year 2001 and (ii) the aid amount certified to be
paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes
levied to pay for these costs in the year in which the court financing is transferred to the
state, the amount under this clause is limited to the amount of aid the county is certified to
receive under section 273.1398, subdivision 4a;
    (15) (14) to fund a firefighters relief association as required under Laws 2013,
chapter 111, article 5, sections 31 to 42, to the extent that the required amount exceeds the
amount levied for this purpose in 2001;
    (16) (15) for purposes of a storm sewer improvement district under section 444.20;
    (17) (16) to pay for the maintenance and support of a city or county society for
the prevention of cruelty to animals under section 343.11, but not to exceed in any year
$4,800 or the sum of $1 per capita based on the county's or city's population as of the most
recent federal census, whichever is greater. If the city or county uses this special levy, any
amount levied by the city or county in the previous levy year for the purposes specified
in this clause and included in the city's or county's previous year's levy limit computed
under section 275.71, must be deducted from the levy limit base under section 275.71,
subdivision 2 , in determining the city's or county's current year levy limit;
    (18) (17) for counties, to pay for the increase in their share of health and human
service costs caused by reductions in federal health and human services grants effective
after September 30, 2007;
    (19) (18) for a city, for the costs reasonably and necessarily incurred for securing,
maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by
the commissioner of revenue under section 275.74, subdivision 2. A city must have either
(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in
the city or in a zip code area of the city that is at least 50 percent higher than the average
foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2,
to use this special levy. For purposes of this paragraph, "foreclosure rate" means the
number of foreclosures, as indicated by sheriff sales records, divided by the number of
households in the city in 2007;
    (20) for a city, for the unreimbursed costs of redeployed traffic-control agents and
lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified
to the Federal Highway Administration;
    (21) (19) to pay costs attributable to wages and benefits for sheriff, police, and fire
personnel. If a local governmental unit did not use this special levy in the previous year its
levy limit base under section 275.71 shall be reduced by the amount equal to the amount it
levied for the purposes specified in this clause in the previous year;
    (22) (20) an amount equal to any reductions in the certified aids or credit
reimbursements payable under sections 477A.011 to 477A.014, and section 273.1384,
due to unallotment under section 16A.152 or reductions under another provision of law.
The amount of the levy allowed under this clause for each year is limited to the amount
unallotted or reduced from the aids and credit reimbursements certified for payment in the
year following the calendar year in which the tax levy is certified unless the unallotment
or reduction amount is not known by September 1 of the levy certification year, and
the local government has not adjusted its levy under section 275.065, subdivision 6, or
275.07, subdivision 6 , in which case that unallotment or reduction amount may be levied
in the following year;
(23) (21) to pay for the difference between one-half of the costs of confining sex
offenders undergoing the civil commitment process and any state payments for this
purpose pursuant to section 253D.12;
(24) (22) for a county to pay the costs of the first year of maintaining and operating
a new facility or new expansion, either of which contains courts, corrections, dispatch,
criminal investigation labs, or other public safety facilities and for which all or a portion
of the funding for the site acquisition, building design, site preparation, construction, and
related equipment was issued or authorized prior to the imposition of levy limits in 2008.
The levy limit base shall then be increased by an amount equal to the new facility's first
full year's operating costs as described in this clause; and
(25) (23) for the estimated amount of reduction to market value credit reimbursements
under section 273.1384 for credits payable in the year in which the levy is payable.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 38. Minnesota Statutes 2012, section 275.74, subdivision 2, is amended to read:
    Subd. 2. Authorization for special levies. (a) A local governmental unit may
request authorization to levy for unreimbursed costs for natural disasters under section
275.70, subdivision 5 , clause (7). The local governmental unit shall submit a request to
levy under section 275.70, subdivision 5, clause (7), to the commissioner of revenue by
September 30 of the levy year and the request must include information documenting the
estimated unreimbursed costs. The commissioner of revenue may grant levy authority,
up to the amount requested based on the documentation submitted. All decisions of the
commissioner are final.
    (b) A city may request authorization to levy for reasonable and necessary costs for
securing, maintaining, or demolishing foreclosed or abandoned residential properties under
section 275.70, subdivision 5, clause (19) (18). The local governmental unit shall submit a
request to levy under section 275.70, subdivision 5, clause (19) (18), to the commissioner
of revenue by September 30 of the levy year and the request must include information
documenting the estimated costs. For taxes payable in 2009, the amount may include
unanticipated costs incurred above the amount budgeted for these purposes in 2008. Costs
of securing foreclosed or abandoned residential properties include payment for police and
fire department services. The commissioner of revenue may grant levy authority, up to the
lesser of (1) the amount requested based on the documentation submitted, or (2) $3,000
multiplied by the number of foreclosed residential properties, as defined by sheriff sales
records, in calendar year 2007. All decisions of the commissioner are final.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 39. Minnesota Statutes 2012, section 275.75, is amended to read:
275.75 CHARTER EXEMPTION FOR AID LOSS.
Notwithstanding any other provision of a municipal charter that limits ad valorem
taxes to a lesser amount, or that would require voter approval for any increase, the
governing body of a municipality may by resolution increase its levy in any year by an
amount equal to its special levies under section 275.70, subdivision 5, clauses (22) and
(25) (20) and (23).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 40. Minnesota Statutes 2012, section 279.03, is amended to read:
279.03 INTEREST ON DELINQUENT PROPERTY TAXES.
    Subdivision 1. Rate Interest calculation. The rate of interest on delinquent
property taxes levied in 1979 and prior years is fixed at six percent per year until January
1, 1983. Thereafter Interest is payable at the rate determined pursuant to section 549.09.
The rate of interest on delinquent property taxes levied in 1980 and subsequent years is
the rate determined pursuant to section 549.09. All provisions of law except section
549.09 providing for the calculation of interest at any different rate on delinquent taxes in
any notice or proceeding in connection with the payment, collection, sale, or assignment
of delinquent taxes, or redemption from such sale or assignment are hereby amended
to correspond herewith. Section 549.09 shall continue in force applies with respect to
judgments arising out of petitions for review filed pursuant to chapter 278 irrespective of
the levy year.
For property taxes levied in 1980 and prior years, interest is to be calculated at
simple interest from the second Monday in May following the year in which the taxes
become due until the time that the taxes and penalties are paid, computed on the amount
of unpaid taxes, penalties and costs. For property taxes levied in 1981 and subsequent
years, Interest shall commence on the first day of January following the year in which the
taxes become due, but the county treasurer need not calculate interest on unpaid taxes and
penalties on the tax list returned to the county auditor pursuant to section 279.01.
If interest is payable for a portion of a year, the interest is calculated only for the
months that the taxes or penalties remain unpaid, and for this purpose a portion of a month
is deemed to be a whole month.
    Subd. 1a. Rate after December 31, 1990. (a) Except as provided in paragraph (b),
interest on delinquent property taxes, penalties, and costs unpaid on or after January 1,
1991, shall be is payable at the per annum rate determined in section 270C.40, subdivision
5 . If the rate so determined is less than ten percent, the rate of interest shall be is ten
percent. The maximum per annum rate shall be is 14 percent if the rate specified under
section 270C.40, subdivision 5, exceeds 14 percent. The rate shall be is subject to change
on January 1 of each year.
(b) If a person is the owner of one or more parcels of property on which taxes are
delinquent, and the delinquent taxes are more than 25 percent of the prior year's school
district levy, interest on the delinquent property taxes, penalties, and costs unpaid after
January 1, 1992, shall be is payable at twice the rate determined under paragraph (a) for
the year.
    Subd. 2. Composite judgment. Amounts included in composite judgments
authorized by section 279.37, subdivision 1, and confessed on or after July 1, 1982, are
subject to interest at the rate determined pursuant to section 549.09. Amounts confessed
under this authority after December 31, 1990, are subject to interest at the rate calculated
under subdivision 1a. During each calendar year, interest shall accrue accrues on the
unpaid balance of the composite judgment from the time it is confessed until it is paid.
The rate of interest is subject to change each year in the same manner that section 549.09
or as provided in subdivision 1a, whichever is applicable, for rate changes. Interest on the
unpaid contract balance on judgments confessed before July 1, 1982, is payable at the rate
applicable to the judgment at the time that it was confessed.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 41. Minnesota Statutes 2012, section 279.16, is amended to read:
279.16 JUDGMENT WHEN NO ANSWER; FORM; ENTRY.
Upon the expiration of 20 days from the later of the filing of the affidavit of
publication or the filing of the affidavit of mailing pursuant to section 279.131, the
court administrator shall enter judgment against each and every such parcel as to which
no answer has been filed, which judgment shall include all such parcels, and shall be
substantially in the following form:

	State of Minnesota	)	District Court,
		) ss.
	County of .....	)	.............. Judicial District.

In the matter of the proceedings to enforce payment of the taxes on real estate
remaining delinquent on the first Monday in January, ......., for the county of ....................,
state of Minnesota.
A list of taxes on real property, delinquent on the first Monday in January, ......., for
said county of ................., having been duly filed in the office of the court administrator of
this court, and the notice and list required by law having been duly published and mailed
as required by law, and more than 20 days having elapsed since the last publication of the
notice and list, and no answer having been filed by any person, company, or corporation
to the taxes upon any of the parcels of land hereinafter described, it is hereby adjudged
that each parcel of land hereinafter described is liable for taxes, penalties, and costs to the
amount set opposite the same, as follows:

Description.

Parcel Number.

Amount.

The amount of taxes, penalties, and cost to which, as hereinbefore stated, each of
such parcels of land is liable, is hereby declared a lien upon such parcel of land as against
the estate, right, title, interest, claim, or lien, of whatever nature, in law or equity, of every
person, company, or corporation; and it is adjudged that, unless the amount to which
each of such parcels is liable be paid, each of such parcels be sold, as provided by law,
to satisfy the amount to which it is liable.

		Dated this ............. day of ..............., .......
		..... Court Administrator of the District Court, County of .....

The judgment shall be entered by the court administrator in a book to be kept by
the court administrator, to be called the real estate tax judgment book, and signed by the
court administrator. The judgment shall be written out on the left-hand pages of the book,
leaving the right-hand pages blank for the entries in this chapter hereinafter provided; and
The same presumption in favor of the regularity and validity of the judgment shall be
deemed to exist as in respect to judgments in civil actions in such court, except where taxes
have been paid before the entry of judgment, or where the land is exempt from taxation, in
which cases the judgment shall be prima facie evidence only of its regularity and validity.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 42. Minnesota Statutes 2012, section 279.23, is amended to read:
279.23 COPY OF JUDGMENT TO COUNTY AUDITOR.
When any real estate tax judgment is entered, the court administrator shall forthwith
deliver to the county auditor, in a book to be provided by the auditor, a certified copy of
such judgment, which shall be written on the left-hand pages of the book, leaving the
right-hand pages blank.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 43. Minnesota Statutes 2012, section 279.25, is amended to read:
279.25 PAYMENT BEFORE JUDGMENT.
Before sale any person may pay the amount adjudged against any parcel of land.
If payment is made before entry of judgment, and the delinquent list has been filed with
the court administrator, the county auditor shall immediately certify such payment to the
court administrator, who shall note the same on such delinquent list; and all proceedings
pending against such parcel shall thereupon be discontinued. If payment is made after
judgment is entered and before sale, the auditor shall certify such payment to the clerk,
who, upon production of such certificate and the payment of a fee of ten cents, shall enter
on the right-hand page of the real estate tax judgment book, and opposite the description
of such parcel, satisfaction of the judgment against the same. The auditor shall make
proper records of all payments made under this section.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 44. Minnesota Statutes 2013 Supplement, section 279.37, subdivision 2, is
amended to read:
    Subd. 2. Installment payments. The owner of any such parcel, or any person to
whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
make and file with the county auditor of the county in which the parcel is located a written
offer to pay the current taxes each year before they become delinquent, or to contest the
taxes under Minnesota Statutes 1941, sections 278.01 to 278.13 chapter 278, and agree
to confess judgment for the amount provided, as determined by the county auditor. By
filing the offer, the owner waives all irregularities in connection with the tax proceedings
affecting the parcel and any defense or objection which the owner may have to the
proceedings, and also waives the requirements of any notice of default in the payment of
any installment or interest to become due pursuant to the composite judgment to be so
entered. Unless the property is subject to subdivision 1a, with the offer, the owner shall (i)
tender one-tenth of the amount of the delinquent taxes, costs, penalty, and interest, and
(ii) tender all current year taxes and penalty due at the time the confession of judgment is
entered. In the offer, the owner shall agree to pay the balance in nine equal installments,
with interest as provided in section 279.03, payable annually on installments remaining
unpaid from time to time, on or before December 31 of each year following the year in
which judgment was confessed. The offer must be substantially as follows:
"To the court administrator of the district court of ........... county, I, .....................,
am the owner of the following described parcel of real estate located in ....................
county, Minnesota:
.............................. Upon that real estate there are delinquent taxes for the year ........., and
prior years, as follows: (here insert year of delinquency and the total amount of delinquent
taxes, costs, interest, and penalty). By signing this document I offer to confess judgment in
the sum of $...... and waive all irregularities in the tax proceedings affecting these taxes and
any defense or objection which I may have to them, and direct judgment to be entered for
the amount stated above, minus the sum of $............, to be paid with this document, which
is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and interest stated above.
I agree to pay the balance of the judgment in nine or four equal, annual installments, with
interest as provided in section 279.03, payable annually, on the installments remaining
unpaid. I agree to pay the installments and interest on or before December 31 of each year
following the year in which this judgment is confessed and current taxes each year before
they become delinquent, or within 30 days after the entry of final judgment in proceedings
to contest the taxes under Minnesota Statutes, sections 278.01 to 278.13 chapter 278.
Dated .............., ......."
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 45. Minnesota Statutes 2012, section 280.001, is amended to read:
280.001 PUBLIC SALES, AUDITOR'S CERTIFICATES ABOLISHED.
Effective the second Monday in May 1974, and each year thereafter, No parcel of
land against which judgment has been entered and remains unsatisfied for the taxes of
the preceding year or years may be sold at public vendue as provided in sections 280.01
and 280.02 by the county auditor but shall be treated in the same manner and regarded in
all respects as land bid in for the state by the auditor in the manner provided in section
280.02 . No notice of sale required by section 280.01 shall be published or posted in 1974
and in years thereafter, and no auditor's certificate authorized by section 280.03 shall be
issued on the second Monday in May 1974, or thereafter.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 46. Minnesota Statutes 2012, section 280.03, is amended to read:
280.03 CERTIFICATE OF SALE.
The county auditor shall execute to the purchaser of each parcel a certificate which
may be substantially in the following form:
"I, .........., auditor of the county of .........., state of Minnesota, do hereby certify that
at the sale of lands pursuant to the real estate tax judgment entered in the district court
in the county of .........., on the .......... day of .........., ......., in proceedings to enforce the
payment of taxes delinquent on real estate for the years .........., for the county of ..........,
which sale was held at ..............., in said county of ........, on the ........ day of ........, .......,
the following described parcel of land, situate in said county of .........., state of Minnesota:
(insert description), was offered for sale to the bidder who should offer to pay the amount
for which the same was to be sold, at the lowest annual rate of interest on such amount;
and at said sale I did sell the said parcel of land to .......... for the sum of .......... dollars,
with interest at .......... percent per annum on such amount, that being the sum for which the
same was to be sold, and such rate of interest being the lowest rate percent per annum bid
on such sum; and, the sum having been paid, I do therefore, in consideration thereof, and
pursuant to the statute in such case made and provided, convey the said parcel of land, in
fee simple, subject to easements and restrictions of record at the date of the tax judgment
sale, including, but without limitation, permits for telephone, telegraph and electric
power lines either by underground cable or conduit or otherwise, sewer and water lines,
highways, railroads, and pipe lines for gas, liquids, or solids in suspension, to said ..........,
and the heirs and assigns of ......., forever, subject to redemption as provided by law.
Witness my hand and official seal this ........ day of ........, ....... .

..... County Auditor."

If the land shall not be redeemed as provided in chapter 281, such certificate shall
pass to the purchaser an estate therein, in fee simple, without any other act or deed
whatever subject to easements and restrictions of record at the date of the tax judgment
sale, including, but without limitation, permits for telephone, telegraph, and electric
power lines either by underground cable or conduit or otherwise, sewer and water lines,
highways, railroads, and pipe lines for gas, liquids, or solids in suspension. Such certificate
may be recorded, after the time for redemption shall have expired, as other deeds of real
estate, and with like effect. If any purchaser at such sale shall purchase more than one
parcel, the auditor shall issue to the purchaser a certificate for each parcel so purchased.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 47. Minnesota Statutes 2012, section 280.07, is amended to read:
280.07 ENTRIES IN JUDGMENT BOOKS AFTER SALE.
Immediately after such sale the county auditor shall set out in the copy judgment
book record that all parcels were bid in for the state. The county auditor shall thereupon
deliver such book to notify the court administrator, who shall forthwith enter on the
right-hand page of the real estate tax judgment book, opposite the description of each
parcel sold, the words "bid in for the state," and thereupon redeliver the copy judgment
book to the auditor. Upon redemption the auditor shall make a note thereon in the copy
judgment book, opposite the parcel redeemed.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 48. Minnesota Statutes 2012, section 280.11, is amended to read:
280.11 LANDS BID IN FOR STATE.
At any time after any parcel of land has been bid in for the state, the same not having
been redeemed, the county auditor shall assign and convey the same, and all the right of
the state therein acquired at such sale, to any person who shall pay the amount for which
the same was bid in, with interest at the rate of 12 percent per annum, and the amount of
all subsequent delinquent taxes, penalties, costs, and interest at such rate upon the same
from the time when such taxes became delinquent. The county auditor shall execute to
such person a certificate for such parcel, which may be substantially in the following form:
"I, .........., auditor of the county of .........., state of Minnesota, do hereby certify that
at the sale of lands pursuant to the real estate tax judgment entered in the district court
in the county of .........., on the .......... day of .........., ......., in proceedings to enforce the
payment of taxes delinquent upon real estate for the years .......... for the county of ..........,
which sale was held at .........., in said county of .........., on the .......... day of .........., .......,
the following described parcel of land, situate in said county of .........., state of Minnesota:
(insert description), was duly offered for sale; and, no one bidding upon such offer an
amount equal to that for which the parcel was subject to be sold, the same was then bid in
for the state at such amount, being the sum of .......... dollars; and the same still remaining
unredeemed, and on this day .......... having paid into the treasury of the county the amount
for which the same was so bid in, and all subsequent delinquent taxes, penalties, costs,
and interest, amounting in all to .......... dollars, therefore, in consideration thereof, and
pursuant to the statute in such case made and provided, I do hereby assign and convey this
parcel of land, in fee simple, subject to easements and restrictions of record at the date of
the tax judgment sale, including but without limitation, permits for telephone, telegraph,
and electric power lines either by underground cable or conduit or otherwise, sewer and
water lines, highways, railroads, and pipe lines for gas, liquids, or solids in suspension,
with all the right, title and interest of the state acquired therein at such sale to .........., and
the heirs and assigns of ........, forever, subject to redemption as provided by law.
Witness my hand and official seal this .......... day of .........., .......

..... County Auditor."

If the land shall not be redeemed, as provided in chapter 281, such certificate shall
pass to the purchaser or assignee an estate therein, in fee simple, without any other act
or deed whatever subject to easements and restrictions of record at the date of the tax
judgment sale, including, but without limitation, permits for telephone, telegraph and
electric power lines either by underground cable or conduit or otherwise, sewer and water
lines, highways, railroads, and pipe lines for gas, liquids, or solids in suspension. Such
certificate or conveyance may be recorded, after the time for redemption shall have
expired, as other deeds of real estate, and with like effect. No assignment of the right of
the state shall be given pursuant to this section after January 1, 1972.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 49. Minnesota Statutes 2012, section 281.03, is amended to read:
281.03 AUDITOR'S CERTIFICATE.
The county auditor shall certify to the amount due on such redemption, and, on
payment of the same to the county treasurer, shall make duplicate receipts for the certified
amount, describing the property redeemed, one of which shall be filed with the auditor.
Such receipts shall be governed by the provisions of this chapter regulating the payment
of current taxes and such payment shall have the effect to annul the sale. If the amount
certified by the auditor and received in payment for redemption be less than that required
by law, it shall not invalidate the redemption. On redemption being made, the auditor shall
enter upon the copy of the tax judgment book, opposite the description of record the
parcel as redeemed, the word, "redeemed.".
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 50. Minnesota Statutes 2013 Supplement, section 281.17, is amended to read:
281.17 PERIOD FOR REDEMPTION.
Except for properties for which the period of redemption has been limited under
sections 281.173 and 281.174, the following periods for redemption apply.
The period of redemption for all lands sold to the state at a tax judgment sale shall
be three years from the date of sale to the state of Minnesota.
The period of redemption for homesteaded lands as defined in section 273.13,
subdivision 22 , located in a targeted neighborhood as defined in Laws 1987, chapter 386,
article 6, section 4, and sold to the state at a tax judgment sale is three years from the date
of sale. The period of redemption for all lands located in a targeted neighborhood as
defined in Laws 1987, chapter 386, article 6, section 4, except (1) homesteaded lands as
defined in section 273.13, subdivision 22, and (2) for periods of redemption beginning
after June 30, 1991, but before July 1, 1996, lands located in the Loring Park targeted
neighborhood on which a notice of lis pendens has been served, and sold to the state at a
tax judgment sale is one year from the date of sale.
The period of redemption for all real property constituting a mixed municipal solid
waste disposal facility that is a qualified facility under section 115B.39, subdivision 1, is
one year from the date of the sale to the state of Minnesota.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 51. Minnesota Statutes 2012, section 281.327, is amended to read:
281.327 CANCELLATION OF CERTIFICATE UPON JUDICIAL ORDER.
Upon the petition of any person interested in the land covered by a real estate tax
sale certificate, state assignment certificate, or forfeited tax sale certificate and, upon the
giving of such notice to the holder of such certificate as may be ordered, the district court,
in the proceedings resulting in the judgment upon which a real estate tax judgment sale
certificate, state assignment certificate, or forfeited tax sale certificate is based, may order
the cancellation of a real estate tax judgment sale certificate, state assignment certificate,
or forfeited tax sale certificate upon which notice of expiration of time of redemption
has been issued when the certificate or a deed issued thereon has not been recorded in
the office of the county recorder or filed in that of the registrar of titles, if the land is
registered, within seven years after the date of the issuance of such certificate; the county
auditor, on the filing of the order, shall make an entry in the proper copy real estate tax
judgment book, opposite the description of the land, "canceled by order of court" record
the land as canceled by order of court; and the rights of the holder under the certificate
shall thereupon be terminated of record in the office of the county auditor.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 52. Minnesota Statutes 2012, section 282.01, subdivision 6, is amended to read:
    Subd. 6. Duties of commissioner after sale. When any sale has been made by the
county auditor under sections 282.01 to 282.13, the auditor shall immediately certify to
the commissioner of revenue such information relating to such sale, on such forms as the
commissioner of revenue may prescribe as will enable the commissioner of revenue to
prepare an appropriate deed if the sale is for cash, or keep necessary records if the sale
is on terms; and not later than October 31 of each year the county auditor shall submit
to the commissioner of revenue a statement of all instances wherein any payment of
principal, interest, or current taxes on lands held under certificate, due or to be paid during
the preceding calendar years, are still outstanding at the time such certificate is made.
When such statement shows that a purchaser or the purchaser's assignee is in default, the
commissioner of revenue may instruct the county board of the county in which the land is
located to cancel said certificate of sale in the manner provided by subdivision 5, provided
that upon recommendation of the county board, and where the circumstances are such
that the commissioner of revenue after investigation is satisfied that the purchaser has
made every effort reasonable to make payment of both the annual installment and said
taxes, and that there has been no willful neglect on the part of the purchaser in meeting
these obligations, then the commissioner of revenue may extend the time for the payment
for such period as the commissioner may deem warranted, not to exceed one year. On
payment in full of the purchase price, appropriate conveyance in fee, in such form as may
be prescribed by the attorney general, shall be issued by the commissioner of revenue,
which conveyance must be recorded by the county and shall have the force and effect of
a patent from the state subject to easements and restrictions of record at the date of the
tax judgment sale, including, but without limitation, permits for telephone, telegraph, and
electric power lines either by underground cable or conduit or otherwise, sewer and water
lines, highways, railroads, and pipe lines for gas, liquids, or solids in suspension.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 53. Minnesota Statutes 2012, section 282.04, subdivision 4, is amended to read:
    Subd. 4. Easements. The county auditor, when and for such price and on such
terms and for such period as the county board prescribes, may grant easements or permits
on unsold tax-forfeited land for telephone, telegraph, and electric power lines either by
underground cable or conduit or otherwise, sewer and water lines, highways, recreational
trails, railroads, and pipe lines for gas, liquids, or solids in suspension. Any such easement
or permit may be canceled by resolution of the county board after reasonable notice for
any substantial breach of its terms or if at any time its continuance will conflict with
public use of the land, or any part thereof, on which it is granted. Land affected by any
such easement or permit may be sold or leased for mineral or other legal purpose, but sale
or lease shall be subject to the easement or permit, and all rights granted by the easement
or permit shall be excepted from the conveyance or lease of the land and be reserved,
and may be canceled by the county board in the same manner and for the same reasons
as it could have been canceled before sale and in that case the rights granted thereby
shall vest in the state in trust as the land on which it was granted was held before sale or
lease. Any easement or permit granted before passage of Laws 1951, Chapter 203, may
be governed thereby if the holder thereof and county board so agree. Reasonable notice
as used in this subdivision, means a 90-day written notice addressed to the record owner
of the easement at the last known address, and upon cancellation the county board may
grant extensions of time to vacate the premises affected.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 54. Minnesota Statutes 2012, section 282.261, subdivision 2, is amended to read:
    Subd. 2. Interest rate. The unpaid balance on any repurchase contract approved
by the county board on or after July 1, 1982, is subject to interest at the rate determined
pursuant to section 549.09. Repurchase contracts approved after December 31, 1990, are
subject to interest at the rate determined in section 279.03, subdivision 1a. The interest
rate is subject to change each year on the unpaid balance in the manner provided for rate
changes in section 549.09 or 279.03, subdivision 1a, whichever is applicable. Interest on
the unpaid contract balance on repurchases approved before July 1, 1982, is payable at the
rate applicable to the repurchase contract at the time that it was approved.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 55. Minnesota Statutes 2012, section 282.261, subdivision 4, is amended to read:
    Subd. 4. Service fee. The county auditor may collect a service fee to cover
administrative costs as set by the county board for each repurchase application received
after July 1, 1985. The fee must be paid at the time of application and must be credited to
the county general revenue fund.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 56. Minnesota Statutes 2012, section 282.261, subdivision 5, is amended to read:
    Subd. 5. County may impose conditions of repurchase. The county auditor, after
receiving county board approval, may impose conditions on repurchase of tax-forfeited
lands limiting the use of the parcel subject to the repurchase, including, but not limited to,
environmental remediation action plan restrictions or covenants, or easements for lines or
equipment for telephone, telegraph, electric power, or telecommunications.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 57. Minnesota Statutes 2012, section 282.322, is amended to read:
282.322 FORFEITED LANDS LIST.
The county board of any county may at any time after the passage of Laws 1945,
chapter 296, file a list of forfeited lands with the county auditor, if the board is of the
opinion that such lands may be acquired by the state or any municipal subdivision thereof
for public purposes. Upon the filing of such list the county auditor shall withhold said
lands from repurchase. If no proceeding shall be started to acquire such lands by the
state or some municipal subdivision thereof within one year after the filing of such list
the county board shall withdraw said list and thereafter the owner shall have one year in
which to repurchase as otherwise provided in Laws 1945, chapter 296.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 58. Minnesota Statutes 2012, section 287.30, is amended to read:
287.30 COUNTY TREASURER; DUTIES.
The care of documentary stamps entrusted to county treasurers and the duties imposed
upon county treasurers by this chapter are within the duties of such office and are within
the coverage of any official bond delivered to the state, conditioned that any such officer
shall faithfully execute the duties of office. The county board may by resolution require
the county auditor to perform any duty imposed on the county treasurer under this chapter.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 59. Minnesota Statutes 2012, section 289A.25, subdivision 1, is amended to read:
    Subdivision 1. Requirements to pay. An individual, trust, S corporation, or
partnership must, when prescribed in subdivision 3, paragraph (b), make payments of
estimated tax. For individuals, the term "estimated tax" means the amount the taxpayer
estimates is the sum of the taxes imposed by chapter 290 for the taxable year. For trusts,
S corporations, and partnerships, the term estimated tax means the amount the taxpayer
estimates is the sum of the taxes for the taxable year imposed by chapter 290 and the
composite income tax imposed by section 289A.08, subdivision 7. If the individual is an
infant or incompetent person, the payments must be made by the individual's guardian. If
joint payments on estimated tax are made but a joint return is not made for the taxable
year, the estimated tax for that year may be treated as the estimated tax of either the
husband or the wife or may be divided between them.
Notwithstanding the provisions of this section, no payments of estimated tax are
required if the estimated tax, as defined in this subdivision, less the credits allowed against
the tax, is less than $500.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 60. Minnesota Statutes 2012, section 290.01, subdivision 5, is amended to read:
    Subd. 5. Domestic corporation. The term "domestic" when applied to a corporation
means a corporation:
(1) created or organized in the United States, or under the laws of the United
States or of any state, the District of Columbia, or any political subdivision of any of
the foregoing but not including the Commonwealth of Puerto Rico, or any possession
of the United States; or
(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
Code; or.
(3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 61. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 19d,
is amended to read:
    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
corporations, there shall be subtracted from federal taxable income after the increases
provided in subdivision 19c:
    (1) the amount of foreign dividend gross-up added to gross income for federal
income tax purposes under section 78 of the Internal Revenue Code;
    (2) the amount of salary expense not allowed for federal income tax purposes due to
claiming the work opportunity credit under section 51 of the Internal Revenue Code;
    (3) any dividend (not including any distribution in liquidation) paid within the
taxable year by a national or state bank to the United States, or to any instrumentality of
the United States exempt from federal income taxes, on the preferred stock of the bank
owned by the United States or the instrumentality;
    (4) amounts disallowed for intangible drilling costs due to differences between
this chapter and the Internal Revenue Code in taxable years beginning before January
1, 1987, as follows:
    (i) to the extent the disallowed costs are represented by physical property, an amount
equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7 , subject to the modifications contained in subdivision 19e; and
    (ii) to the extent the disallowed costs are not represented by physical property, an
amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
290.09, subdivision 8;
    (5) (4) the deduction for capital losses pursuant to sections 1211 and 1212 of the
Internal Revenue Code, except that:
    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
capital loss carrybacks shall not be allowed;
    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
allowed;
    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
capital loss carryback to each of the three taxable years preceding the loss year, subject to
the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
a capital loss carryover to each of the five taxable years succeeding the loss year to the
extent such loss was not used in a prior taxable year and subject to the provisions of
Minnesota Statutes 1986, section 290.16, shall be allowed;
    (6) (5) an amount for interest and expenses relating to income not taxable for federal
income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
291 of the Internal Revenue Code in computing federal taxable income;
    (7) (6) in the case of mines, oil and gas wells, other natural deposits, and timber for
which percentage depletion was disallowed pursuant to subdivision 19c, clause (8), a
reasonable allowance for depletion based on actual cost. In the case of leases the deduction
must be apportioned between the lessor and lessee in accordance with rules prescribed
by the commissioner. In the case of property held in trust, the allowable deduction must
be apportioned between the income beneficiaries and the trustee in accordance with the
pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
of the trust's income allocable to each;
    (8) (7) 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, an amount equal to the allowance for depreciation under Minnesota Statutes
1986, section 290.09, subdivision 7;
    (9) (8) amounts included in federal taxable income that are due to refunds of
income, excise, or franchise taxes based on net income or related minimum taxes paid
by the corporation to Minnesota, another state, a political subdivision of another state,
the District of Columbia, or a foreign country or possession of the United States to the
extent that the taxes were added to federal taxable income under subdivision 19c, clause
(1), in a prior taxable year;
    (10) (9) income or gains from the business of mining as defined in section 290.05,
subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
    (11) (10) the amount of disability access expenditures in the taxable year which are not
allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
    (12) (11) the amount of qualified research expenses not allowed for federal income
tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
that the amount exceeds the amount of the credit allowed under section 290.068;
    (13) (12) the amount of salary expenses not allowed for federal income tax purposes
due to claiming the Indian employment credit under section 45A(a) of the Internal
Revenue Code;
    (14) (13) any decrease 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) (14) in each of the five tax years immediately following the tax year in which
an addition is required under subdivision 19c, clause (12), an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
the amount of the addition made by the taxpayer under subdivision 19c, clause (12). The
resulting delayed depreciation cannot be less than zero;
    (16) (15) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (13), an amount equal to one-fifth of the
amount of the addition;
(17) (16) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under subdivision 19c, clause (16); and
(18) (17) the amount of expenses not allowed for federal income tax purposes due
to claiming the railroad track maintenance credit under section 45G(a) of the Internal
Revenue Code.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 62. Minnesota Statutes 2012, section 290.01, subdivision 19f, is amended to read:
    Subd. 19f. Basis modifications affecting gain or loss on disposition of property.
(a) For individuals, estates, and trusts, the basis of property is its adjusted basis for federal
income tax purposes except as set forth in paragraphs (e) and (f), (g), and (m). For
corporations, the basis of property is its adjusted basis for federal income tax purposes,
without regard to the time when the property became subject to tax under this chapter or to
whether out-of-state losses or items of tax preference with respect to the property were not
deductible under this chapter, except that the modifications to the basis for federal income
tax purposes set forth in paragraphs (b) to (j) (i) are allowed to corporations, and the
resulting modifications to federal taxable income must be made in the year in which gain
or loss on the sale or other disposition of property is recognized.
(b) The basis of property shall not be reduced to reflect federal investment tax credit.
(c) The basis of property subject to the accelerated cost recovery system under
section 168 of the Internal Revenue Code shall be modified to reflect the modifications in
depreciation with respect to the property provided for in subdivision 19e. For certified
pollution control facilities for which amortization deductions were elected under section
169 of the Internal Revenue Code of 1954, the basis of the property must be increased by
the amount of the amortization deduction not previously allowed under this chapter.
(d) For property acquired before January 1, 1933, the basis for computing a gain is
the fair market value of the property as of that date. The basis for determining a loss is
the cost of the property to the taxpayer less any depreciation, amortization, or depletion,
actually sustained before that date. If the adjusted cost exceeds the fair market value of the
property, then the basis is the adjusted cost regardless of whether there is a gain or loss.
(e) (d) The basis is reduced by the allowance for amortization of bond premium if
an election to amortize was made pursuant to Minnesota Statutes 1986, section 290.09,
subdivision 13, and the allowance could have been deducted by the taxpayer under this
chapter during the period of the taxpayer's ownership of the property.
(f) (e) For assets placed in service before January 1, 1987, corporations, partnerships,
or individuals engaged in the business of mining ores other than iron ore or taconite
concentrates subject to the occupation tax under chapter 298 must use the occupation
tax basis of property used in that business.
(g) (f) For assets placed in service before January 1, 1990, corporations, partnerships,
or individuals engaged in the business of mining iron ore or taconite concentrates subject
to the occupation tax under chapter 298 must use the occupation tax basis of property
used in that business.
(h) (g) In applying the provisions of sections 301(c)(3)(B), 312(f) and (g), and
316(a)(1) of the Internal Revenue Code, the dates December 31, 1932, and January 1,
1933, shall be substituted for February 28, 1913, and March 1, 1913, respectively.
(i) (h) In applying the provisions of section 362(a) and (c) of the Internal Revenue
Code, the date December 31, 1956, shall be substituted for June 22, 1954.
(j) (i) The basis of property shall be increased by the amount of intangible drilling
costs not previously allowed due to differences between this chapter and the Internal
Revenue Code.
(k) (j) The adjusted basis of any corporate partner's interest in a partnership is
the same as the adjusted basis for federal income tax purposes modified as required to
reflect the basis modifications set forth in paragraphs (b) to (j) (i). The adjusted basis
of a partnership in which the partner is an individual, estate, or trust is the same as the
adjusted basis for federal income tax purposes modified as required to reflect the basis
modifications set forth in paragraphs (e) and (f) and (g).
(l) (k) The modifications contained in paragraphs (b) to (j) (i) also apply to the basis
of property that is determined by reference to the basis of the same property in the hands
of a different taxpayer or by reference to the basis of different property.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 63. Minnesota Statutes 2012, section 290.01, subdivision 29, is amended to read:
    Subd. 29. Taxable income. The term "taxable income" means:
(1) for individuals, estates, and trusts, the same as taxable net income;
(2) for corporations, the taxable net income less
(i) the net operating loss deduction under section 290.095;
(ii) the dividends received deduction under section 290.21, subdivision 4; and
(iii) the exemption for operating in a job opportunity building zone under section
469.317 ; and.
(iv) the exemption for operating in a biotechnology and health sciences industry
zone under section 469.337.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 64. Minnesota Statutes 2012, section 290.015, subdivision 1, is amended to read:
    Subdivision 1. General rule. (a) Except as provided in subdivision 3, a person
that conducts a trade or business that has a place of business in this state, regularly has
employees or independent contractors conducting business activities on its behalf in this
state, or owns or leases real property that is located in this state or tangible personal
property, including but not limited to mobile property, that is present in this state is subject
to the taxes imposed by this chapter.
(b) Except as provided in subdivision 3, a person that conducts a trade or business
not described in paragraph (a) is subject to the taxes imposed by this chapter if the trade
or business obtains or regularly solicits business from within this state, without regard
to physical presence in this state.
(c) For purposes of paragraph (b), business from within this state includes, but is
not limited to:
(1) sales of products or services of any kind or nature to customers in this state who
receive the product or service in this state;
(2) sales of services which are performed from outside this state but the services
are received in this state;
(3) transactions with customers in this state that involve intangible property and
result in receipts attributed to this state as provided in section 290.191, subdivision 5 or 6;
(4) leases of tangible personal property that is located in this state as defined in
section 290.191, subdivision 5, paragraph (g), or 6, paragraph (e); and
(5) sales and leases of real property located in this state.
(d) For purposes of paragraph (b), solicitation includes, but is not limited to:
(1) the distribution, by mail or otherwise, without regard to the state from which such
distribution originated or in which the materials were prepared, of catalogs, periodicals,
advertising flyers, or other written solicitations of business to customers in this state;
(2) display of advertisements on billboards or other outdoor advertising in this state;
(3) advertisements in newspapers published in this state;
(4) advertisements in trade journals or other periodicals, the circulation of which is
primarily within this state;
(5) advertisements in a Minnesota edition of a national or regional publication or a
limited regional edition of which this state is included of a broader regional or national
publication which are not placed in other geographically defined editions of the same issue
of the same publication;
(6) advertisements in regional or national publications in an edition which is not
by its contents geographically targeted to Minnesota, but which is sold over the counter
in Minnesota or by subscription to Minnesota residents;
(7) advertisements broadcast on a radio or television station located in Minnesota; or
(8) any other solicitation by telegraph, telephone, computer database, cable, optic,
microwave, or other communication system.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 65. Minnesota Statutes 2012, section 290.07, subdivision 1, is amended to read:
    Subdivision 1. Annual accounting period. Net income and taxable net income
shall be computed upon the basis of the taxpayer's annual accounting period. If a taxpayer
has no annual accounting period, or has one other than a fiscal year, as heretofore defined,
the net income and taxable net income shall be computed on the basis of the calendar year.
Taxpayers shall employ the same accounting period on which they report, or would be
required to report, their net income under the Internal Revenue Code. The commissioner
shall provide by rule for the determination of the accounting period for taxpayers who file
a combined report under section 290.17, subdivision 4, when members of the group use
different accounting periods for federal income tax purposes. Unless the taxpayer changes
its accounting period for federal purposes, the due date of the return is not changed.
    A taxpayer may change accounting periods only with the consent of the
commissioner. In case of any such change, the taxpayer shall pay a tax for the period
not included in either the taxpayer's former or newly adopted taxable year, computed as
provided in section 290.32.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 66. Minnesota Statutes 2012, section 290.07, subdivision 2, is amended to read:
    Subd. 2. Accounting methods. Except as specifically provided to the contrary by
this chapter, net income and taxable net income shall be computed in accordance with
the method of accounting regularly employed in keeping the taxpayer's books. If no such
accounting system has been regularly employed, or if that employed does not clearly or
fairly reflect income or the income taxable under this chapter, the computation shall be
made in accordance with such method as in the opinion of the commissioner does clearly
and fairly reflect income and the income taxable under this chapter.
Except as otherwise expressly provided in this chapter, a taxpayer who changes the
method of accounting for regularly computing the taxpayer's income in keeping books
shall, before computing net income and taxable net income under the new method, secure
the consent of the commissioner.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 67. Minnesota Statutes 2013 Supplement, section 290.0921, subdivision 3,
is amended to read:
    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
income" is Minnesota net income as defined in section 290.01, subdivision 19, and
includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
Minnesota tax return, the minimum tax must be computed on a separate company basis.
If a corporation is part of a tax group filing a unitary return, the minimum tax must be
computed on a unitary basis. The following adjustments must be made.
(1) For purposes of the depreciation adjustments under section 56(a)(1) and
56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
income tax purposes, including any modification made in a taxable year under section
290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7,
paragraph (c).
For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
allowance in the first taxable year after December 31, 2000.
(2) (1) The portion of the depreciation deduction allowed for federal income tax
purposes under section 168(k) of the Internal Revenue Code that is required as an
addition under section 290.01, subdivision 19c, clause (12), is disallowed in determining
alternative minimum taxable income.
(3) (2) The subtraction for depreciation allowed under section 290.01, subdivision
19d , clause (15) (14), is allowed as a depreciation deduction in determining alternative
minimum taxable income.
(4) (3) The alternative tax net operating loss deduction under sections 56(a)(4) and
56(d) of the Internal Revenue Code does not apply.
(5) (4) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the
Internal Revenue Code does not apply.
(6) (5) The tax preference for depletion under section 57(a)(1) of the Internal
Revenue Code does not apply.
(7) The tax preference for intangible drilling costs under section 57(a)(2) of the
Internal Revenue Code must be calculated without regard to subparagraph (E) and the
subtraction under section 290.01, subdivision 19d, clause (4).
(8) (6) The tax preference for tax exempt interest under section 57(a)(5) of the
Internal Revenue Code does not apply.
(9) (7) The tax preference for charitable contributions of appreciated property under
section 57(a)(6) of the Internal Revenue Code does not apply.
(10) For purposes of calculating the tax preference for accelerated depreciation or
amortization on certain property placed in service before January 1, 1987, under section
57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
deduction allowed under section 290.01, subdivision 19e.
For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, not previously deducted is a
depreciation or amortization allowance in the first taxable year after December 31, 2004.
(11) (8) For purposes of calculating the adjustment for adjusted current earnings
in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
minimum taxable income as defined in this subdivision, determined without regard to the
adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
(12) (9) For purposes of determining the amount of adjusted current earnings under
section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), or (ii) the
amount of refunds of income, excise, or franchise taxes subtracted as provided in section
290.01, subdivision 19d , clause (9).
(13) (10) Alternative minimum taxable income excludes the income from operating
in a job opportunity building zone as provided under section 469.317.
(14) Alternative minimum taxable income excludes the income from operating in a
biotechnology and health sciences industry zone as provided under section 469.337.
Items of tax preference must not be reduced below zero as a result of the
modifications in this subdivision.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 68. Minnesota Statutes 2012, section 290.0922, subdivision 3, is amended to read:
    Subd. 3. Definitions. (a) "Minnesota sales or receipts" means the total sales
apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts
attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the
total sales or receipts apportioned or attributed to Minnesota pursuant to any other
apportionment formula applicable to the taxpayer.
(b) "Minnesota property" means total Minnesota tangible property as provided in
section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota,
but does not include: (1) the property of a qualified business as defined under section
469.310, subdivision 11 , that is located in a job opportunity building zone designated
under section 469.314 and (2) property of a qualified business located in a biotechnology
and health sciences industry zone designated under section 469.334. Intangible property
shall not be included in Minnesota property for purposes of this section. Taxpayers who
do not utilize tangible property to apportion income shall nevertheless include Minnesota
property for purposes of this section. On a return for a short taxable year, the amount of
Minnesota property owned, as determined under section 290.191, shall be included in
Minnesota property based on a fraction in which the numerator is the number of days in
the short taxable year and the denominator is 365.
(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section
290.191, subdivision 12 , but does not include: (1) the job opportunity building zone payroll
under section 469.310, subdivision 8, of a qualified business as defined under section
469.310, subdivision 11 , and (2) biotechnology and health sciences industry zone payrolls
under section 469.330, subdivision 8. Taxpayers who do not utilize payrolls to apportion
income shall nevertheless include Minnesota payrolls for purposes of this section.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 69. Minnesota Statutes 2012, section 290.095, subdivision 3, is amended to read:
    Subd. 3. Carryover. (a) A net operating loss incurred in a during the taxable year:
(i) beginning after December 31, 1986, shall be a net operating loss carryover to each of
the 15 taxable years following the taxable year of such loss; (ii) beginning before January
1, 1987, shall be a net operating loss carryover to each of the five taxable years following
the taxable year of such loss subject to the provisions of Minnesota Statutes 1986, section
290.095; and (iii) beginning before January 1, 1987, shall be a net operating loss carryback
to each of the three taxable years preceding the loss year subject to the provisions of
Minnesota Statutes 1986, section 290.095.
(b) The entire amount of the net operating loss for any taxable year shall be carried to
the earliest of the taxable years to which such loss may be carried. The portion of such loss
which shall be carried to each of the other taxable years shall be the excess, if any, of the
amount of such loss over the sum of the taxable net income, adjusted by the modifications
specified in subdivision 4, for each of the taxable years to which such loss may be carried.
(c) Where a corporation apportions its income under the provisions of section
290.191 , the net operating loss deduction incurred in any taxable year shall be allowed
to the extent of the apportionment ratio of the loss year.
(d) The provisions of sections 381, 382, and 384 of the Internal Revenue Code apply
to carryovers in certain corporate acquisitions and special limitations on net operating loss
carryovers. The limitation amount determined under section 382 shall be applied to net
income, before apportionment, in each post change year to which a loss is carried.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 70. Minnesota Statutes 2013 Supplement, section 290.191, subdivision 5, is
amended to read:
    Subd. 5. Determination of sales factor. For purposes of this section, the following
rules apply in determining the sales factor.
    (a) The sales factor includes all sales, gross earnings, or receipts received in the
ordinary course of the business, except that the following types of income are not included
in the sales factor:
    (1) interest;
    (2) dividends;
    (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;
    (4) sales of property used in the trade or business, except sales of leased property of
a type which is regularly sold as well as leased; and
    (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
Code or sales of stock.
    (b) Sales of tangible personal property are made within this state if the property is
received by a purchaser at a point within this state, and the taxpayer is taxable in this state,
regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination
of the property.
    (c) Tangible personal property delivered to a common or contract carrier or foreign
vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
regardless of f.o.b. point or other conditions of the sale.
    (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
licensed by a state or political subdivision to resell this property only within the state of
ultimate destination, the sale is made in that state.
    (e) Sales made by or through a corporation that is qualified as a domestic
international sales corporation under section 992 of the Internal Revenue Code are not
considered to have been made within this state.
    (f) Sales, rents, royalties, and other income in connection with real property is
attributed to the state in which the property is located.
    (g) Receipts from the lease or rental of tangible personal property, including finance
leases and true leases, must be attributed to this state if the property is located in this
state and to other states if the property is not located in this state. Receipts from the
lease or rental of moving property including, but not limited to, motor vehicles, rolling
stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
factor to the extent that the property is used in this state. The extent of the use of moving
property is determined as follows:
    (1) A motor vehicle is used wholly in the state in which it is registered.
    (2) The extent that rolling stock is used in this state is determined by multiplying
the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
which is the miles traveled within this state by the leased or rented rolling stock and the
denominator of which is the total miles traveled by the leased or rented rolling stock.
    (3) The extent that an aircraft is used in this state is determined by multiplying the
receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
the number of landings of the aircraft in this state and the denominator of which is the
total number of landings of the aircraft.
    (4) The extent that a vessel, mobile equipment, or other mobile property is used in
the state is determined by multiplying the receipts from the lease or rental of the property
by a fraction, the numerator of which is the number of days during the taxable year the
property was in this state and the denominator of which is the total days in the taxable year.
    (h) Royalties and other income received for the use of or for the privilege of using
intangible property, including patents, know-how, formulas, designs, processes, patterns,
copyrights, trade names, service names, franchises, licenses, contracts, customer lists, or
similar items, must be attributed to the state in which the property is used by the purchaser.
If the property is used in more than one state, the royalties or other income must be
apportioned to this state pro rata according to the portion of use in this state. If the portion
of use in this state cannot be determined, the royalties or other income must be excluded
from both the numerator and the denominator. Intangible property is used in this state if
the purchaser uses the intangible property or the rights therein in the regular course of its
business operations in this state, regardless of the location of the purchaser's customers.
    (i) Sales of intangible property are made within the state in which the property is
used by the purchaser. If the property is used in more than one state, the sales must be
apportioned to this state pro rata according to the portion of use in this state. If the
portion of use in this state cannot be determined, the sale must be excluded from both the
numerator and the denominator of the sales factor. Intangible property is used in this
state if the purchaser used the intangible property in the regular course of its business
operations in this state.
    (j) Receipts from the performance of services must be attributed to the state where
the services are received. For the purposes of this section, receipts from the performance
of services provided to a corporation, partnership, or trust may only be attributed to a state
where it has a fixed place of doing business. If the state where the services are received is
not readily determinable or is a state where the corporation, partnership, or trust receiving
the service does not have a fixed place of doing business, the services shall be deemed
to be received at the location of the office of the customer from which the services were
ordered in the regular course of the customer's trade or business. If the ordering office
cannot be determined, the services shall be deemed to be received at the office of the
customer to which the services are billed.
    (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
from management, distribution, or administrative services performed by a corporation
or trust for a fund of a corporation or trust regulated under United States Code, title 15,
sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
the fund resides. Under this paragraph, receipts for services attributed to shareholders are
determined on the basis of the ratio of: (1) the average of the outstanding shares in the
fund owned by shareholders residing within Minnesota at the beginning and end of each
year; and (2) the average of the total number of outstanding shares in the fund at the
beginning and end of each year. Residence of the shareholder, in the case of an individual,
is determined by the mailing address furnished by the shareholder to the fund. Residence
of the shareholder, when the shares are held by an insurance company as a depositor for
the insurance company policyholders, is the mailing address of the policyholders. In
the case of an insurance company holding the shares as a depositor for the insurance
company policyholders, if the mailing address of the policyholders cannot be determined
by the taxpayer, the receipts must be excluded from both the numerator and denominator.
Residence of other shareholders is the mailing address of the shareholder.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 71. Minnesota Statutes 2012, section 290.9728, subdivision 2, is amended to read:
    Subd. 2. Taxable income. For purposes of this section, taxable income means
the lesser of:
(1) the amount of the net capital gain of the S corporation for the taxable year, as
determined under sections 1222 and 1374 of the Internal Revenue Code, and subject to the
modifications provided in section 290.01, subdivisions 19e and subdivision 19f, in excess
of $25,000 that is allocable to this state under section 290.17, 290.191, or 290.20; or
(2) the amount of the S corporation's federal taxable income, subject to the
provisions of section 290.01, subdivisions 19c to 19f, that is allocable to this state under
section 290.17, 290.191, or 290.20.
EFFECTIVE DATE.This section is effective for taxable years beginning after
December 31, 2013.

    Sec. 72. Minnesota Statutes 2013 Supplement, section 297A.61, subdivision 3, as
amended by Laws 2014, chapter 150, article 2, 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. In applying the provisions of this
chapter, the terms "tangible personal property" and "retail sale" include the taxable
services listed in paragraph (g), 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).
    (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 297A.67, subdivision 2, taxable food includes, but is not limited
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.
For purposes of this clause, "road construction" means construction of:
    (i) public roads;
    (ii) cartways; and
    (iii) private roads in townships located outside of the seven-county metropolitan area
up to the point of the emergency response location sign; 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 626.84, subdivision 1, or services provided by a nonprofit
organization or any organization at the direction of a county 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 297A.68, subdivision 40; and tree trimming for
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.
    (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, and pay television services. Telecommunication services include, but are
not limited to, the following services, as defined in section 297A.669: air-to-ground
radiotelephone service, mobile 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
59B.02, subdivision 11.
    (l) A sale and a purchase includes furnishing for a consideration of specified digital
products or other digital products or granting the right for a consideration to use specified
digital products or other digital products on a temporary or permanent basis and regardless
of whether the purchaser is required to make continued payments for such right. Wherever
the term "tangible personal property" is used in this chapter, other than in subdivisions 10
and 38, the provisions also apply to specified digital products, or other digital products,
unless specifically provided otherwise or the context indicates otherwise.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 73. Minnesota Statutes 2012, section 297A.70, subdivision 10, is amended to read:
    Subd. 10. Nonprofit tickets or admissions. (a) Tickets or admissions to an event
are exempt if all the gross receipts are recorded as such, in accordance with generally
accepted accounting principles, on the books of one or more organizations whose primary
mission is to provide an opportunity for citizens of the state to participate in the creation,
performance, or appreciation of the arts, and provided that each organization is:
(1) an organization described in section 501(c)(3) of the Internal Revenue Code
in which voluntary contributions make up at least the following five percent of the
organization's annual revenue in its most recently completed 12-month fiscal year, or in
the current year if the organization has not completed a 12-month fiscal year:;
(i) for sales made after July 31, 2001, and before July 1, 2002, for the organization's
fiscal year completed in calendar year 2000, three percent;
(ii) for sales made on or after July 1, 2002, and on or before June 30, 2003, for the
organization's fiscal year completed in calendar year 2001, three percent;
(iii) for sales made on or after July 1, 2003, and on or before June 30, 2004, for the
organization's fiscal year completed in calendar year 2002, four percent; and
(iv) for sales made in each 12-month period, beginning on July 1, 2004, and each
subsequent year, for the organization's fiscal year completed in the preceding calendar
year, five percent;
(2) a municipal board that promotes cultural and arts activities; or
(3) the University of Minnesota, a state college and university, or a private nonprofit
college or university provided that the event is held at a facility owned by the educational
institution holding the event.
The exemption only applies if the entire proceeds, after reasonable expenses, are used
solely to provide opportunities for citizens of the state to participate in the creation,
performance, or appreciation of the arts.
(b) Tickets or admissions to the premises of the Minnesota Zoological Garden are
exempt, provided that the exemption under this paragraph does not apply to tickets or
admissions to performances or events held on the premises unless the performance or
event is sponsored and conducted exclusively by the Minnesota Zoological Board or
employees of the Minnesota Zoological Garden.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 74. Minnesota Statutes 2013 Supplement, 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 297A.62, subdivision 1, applied. The exempt items include:
    (1) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13 ;
    (2) building materials for mineral production facilities exempt under section
297A.71, subdivision 14 ;
    (3) building materials for correctional facilities under section 297A.71, subdivision 3;
    (4) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11 ;
    (5) elevators and building materials exempt under section 297A.71, subdivision 12;
    (6) building materials for the Long Lake Conservation Center exempt under section
297A.71, subdivision 17;
    (7) (6) materials and supplies for qualified low-income housing under section
297A.71, subdivision 23 ;
    (8) (7) materials, supplies, and equipment for municipal electric utility facilities
under section 297A.71, subdivision 35;
    (9) (8) equipment and materials used for the generation, transmission, and
distribution of electrical energy and an aerial camera package exempt under section
297A.68 , subdivision 37;
    (10) (9) commuter rail vehicle and repair parts under section 297A.70, subdivision
3, paragraph (a), clause (10);
    (11) (10) materials, supplies, and equipment for construction or improvement of
projects and facilities under section 297A.71, subdivision 40;
(12) materials, supplies, and equipment for construction or improvement of a meat
processing facility exempt under section 297A.71, subdivision 41;
(13) (11) materials, supplies, and equipment for construction, improvement, or
expansion of:
(i) an aerospace defense manufacturing facility exempt under section 297A.71,
subdivision 42 ;
(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71,
subdivision 45 ;
(iii) a research and development facility exempt under section 297A.71, subdivision
46 ; and
(iv) an industrial measurement manufacturing and controls facility exempt under
section 297A.71, subdivision 47;
(14) (12) enterprise information technology equipment and computer software for
use in a qualified data center exempt under section 297A.68, subdivision 42;
(15) (13) materials, supplies, and equipment for qualifying capital projects under
section 297A.71, subdivision 44;
(16) (14) items purchased for use in providing critical access dental services exempt
under section 297A.70, subdivision 7, paragraph (c); and
(17) (15) items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 44.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 75. Minnesota Statutes 2013 Supplement, 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), (2), and (16) (14), the applicant must be the
purchaser;
    (2) for subdivision 1, clauses clause (3) and (6), the applicant must be the
governmental subdivision;
    (3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;
    (4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;
    (5) for subdivision 1, clause (7) (6), the owner of the qualified low-income housing
project;
    (6) for subdivision 1, clause (8) (7), the applicant must be a municipal electric utility
or a joint venture of municipal electric utilities;
    (7) for subdivision 1, clauses (9), (12), (13), (14) (8), (11), (12), and (17) (15),
the owner of the qualifying business; and
    (8) for subdivision 1, clauses (9), (10), (11), and (15) (13), the applicant must be the
governmental entity that owns or contracts for the project or facility.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 76. Minnesota Statutes 2013 Supplement, 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, clauses (3) to (15) (13), or (17) (15), the
contractor, subcontractor, or builder must furnish to 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 289A.40 and
289A.50 apply to refunds under this section.
    (b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
subdivision 40, must not be filed until after June 30, 2009.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 77. Minnesota Statutes 2012, section 297A.94, is amended to read:
297A.94 DEPOSIT OF REVENUES.
(a) Except as provided in this section, the commissioner shall deposit the revenues,
including interest and penalties, derived from the taxes imposed by this chapter in the state
treasury and credit them to the general fund.
(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
account in the special revenue fund if:
(1) the taxes are derived from sales and use of property and services purchased for
the construction and operation of an agricultural resource project; and
(2) the purchase was made on or after the date on which a conditional commitment
was made for a loan guaranty for the project under section 41A.04, subdivision 3.
The commissioner of management and budget shall certify to the commissioner the date
on which the project received the conditional commitment. The amount deposited in
the loan guaranty account must be reduced by any refunds and by the costs incurred by
the Department of Revenue to administer and enforce the assessment and collection of
the taxes.
(c) The commissioner shall deposit the revenues, including interest and penalties,
derived from the taxes imposed on sales and purchases included in section 297A.61,
subdivision 3 , paragraph (g), clauses (1) and (4), in the state treasury, and credit them
as follows:
(1) first to the general obligation special tax bond debt service account in each fiscal
year the amount required by section 16A.661, subdivision 3, paragraph (b); and
(2) after the requirements of clause (1) have been met, the balance to the general fund.
(d) The commissioner shall deposit the revenues, including interest and penalties,
collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
general fund. By July 15 of each year the commissioner shall transfer to the highway user
tax distribution fund an amount equal to the excess fees collected under section 297A.64,
subdivision 5 , for the previous calendar year.
(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
For fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and
penalties, transmitted to the commissioner under section 297A.65, must be deposited by
the commissioner in the state treasury as follows:
(1) 50 percent of the receipts must be deposited in the heritage enhancement account
in the game and fish fund, and may be spent only on activities that improve, enhance, or
protect fish and wildlife resources, including conservation, restoration, and enhancement
of land, water, and other natural resources of the state;
(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only for state parks and trails;
(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only on metropolitan park and trail grants;
(4) three percent of the receipts must be deposited in the natural resources fund, and
may be spent only on local trail grants; and
(5) two percent of the receipts must be deposited in the natural resources fund,
and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
Conservatory, and the Duluth Zoo.
(f) The revenue dedicated under paragraph (e) may not be used as a substitute
for traditional sources of funding for the purposes specified, but the dedicated revenue
shall supplement traditional sources of funding for those purposes. Land acquired with
money deposited in the game and fish fund under paragraph (e) must be open to public
hunting and fishing during the open season, except that in aquatic management areas or
on lands where angling easements have been acquired, fishing may be prohibited during
certain times of the year and hunting may be prohibited. At least 87 percent of the money
deposited in the game and fish fund for improvement, enhancement, or protection of fish
and wildlife resources under paragraph (e) must be allocated for field operations.
(g) The revenues deposited under paragraphs (a) to (f) do not include the revenues,
including interest and penalties, generated by the sales tax imposed under section
297A.62, subdivision 1a , which must be deposited as provided under the Minnesota
Constitution, article XI, section 15.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 78. Minnesota Statutes 2012, section 297B.09, is amended to read:
297B.09 ALLOCATION OF REVENUE.
    Subdivision 1. Deposit of revenues. (a) Money collected and received under this
chapter must be deposited as provided in this subdivision.
    (b) From July 1, 2007, through June 30, 2008, 38.25 percent of the money collected
and received must be deposited in the highway user tax distribution fund, 24 percent must
be deposited in the metropolitan area transit account under section 16A.88, and 1.5 percent
must be deposited in the greater Minnesota transit account under section 16A.88. The
remaining money must be deposited in the general fund.
    (c) From July 1, 2008, through June 30, 2009, 44.25 percent of the money collected
and received must be deposited in the highway user tax distribution fund, 27.75 percent
must be deposited in the metropolitan area transit account under section 16A.88, 1.75
percent must be deposited in the greater Minnesota transit account under section 16A.88,
and the remaining money must be deposited in the general fund.
(d) From July 1, 2009, through June 30, 2010, 47.5 percent of the money collected
and received must be deposited in the highway user tax distribution fund, 30 percent
must be deposited in the metropolitan area transit account under section 16A.88, 3.5
percent must be deposited in the greater Minnesota transit account under section 16A.88,
and 16.25 percent must be deposited in the general fund. The remaining amount must
be deposited as follows:
(1) 1.5 percent in the metropolitan area transit account, except that any amount in
excess of $6,000,000 must be deposited in the highway user tax distribution fund; and
(2) 1.25 percent in the greater Minnesota transit account, except that any amount in
excess of $5,000,000 must be deposited in the highway user tax distribution fund.
(e) From July 1, 2010, through June 30, 2011, 54.5 percent of the money collected
and received must be deposited in the highway user tax distribution fund, 33.75 percent
must be deposited in the metropolitan area transit account under section 16A.88, 3.75
percent must be deposited in the greater Minnesota transit account under section 16A.88,
and 6.25 percent must be deposited in the general fund. The remaining amount must
be deposited as follows:
(1) 1.5 percent in the metropolitan area transit account, except that any amount in
excess of $6,750,000 must be deposited in the highway user tax distribution fund; and
(2) 0.25 percent in the greater Minnesota transit account, except that any amount in
excess of $1,250,000 must be deposited in the highway user tax distribution fund.
    (f) On and after July 1, 2011, (b) 60 percent of the money collected and received
must be deposited in the highway user tax distribution fund, 36 percent must be deposited
in the metropolitan area transit account under section 16A.88, and four percent must be
deposited in the greater Minnesota transit account under section 16A.88.
(g) (c) It is the intent of the legislature that the allocations under paragraph (f) (b)
remain unchanged for fiscal year 2012 and all subsequent fiscal years.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 79. Minnesota Statutes 2012, section 297F.03, subdivision 2, is amended to read:
    Subd. 2. Form of application. Every application for a cigarette or tobacco products
license shall be made on a form prescribed by the commissioner and shall state the name
and address of the applicant; if the applicant is a firm, partnership, or association, the name
and address of each of its members; if the applicant is a corporation, the name and address
of each of its officers; the address of its principal place of business; the place where the
business to be licensed is to be conducted; and any other information the commissioner
may require for the administration of this chapter.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 80. Minnesota Statutes 2012, section 297I.05, subdivision 14, is amended to read:
    Subd. 14. Life insurance. A tax is imposed on life insurance. The rate of tax equals
a percentage 1.5 percent of gross premiums less return premiums on all direct business
received by the insurer or agents of the insurer in Minnesota for life insurance, in cash or
otherwise, during the year. For premiums received after December 31, 2005, but before
January 1, 2007, the rate of tax is 1.875 percent. For premiums received after December
31, 2006, but before January 1, 2008, the rate of tax is 1.75 percent. For premiums
received after December 31, 2007, but before January 1, 2009, the rate of tax is 1.625
percent. For premiums received after December 31, 2008, the rate of tax is 1.5 percent.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 81. Minnesota Statutes 2012, section 298.75, subdivision 1, is amended to read:
    Subdivision 1. Definitions. Except as may otherwise be provided, the following
words, when used in this section, shall have the meanings herein ascribed to them.
    (a) "Aggregate material" means:
    (1) nonmetallic natural mineral aggregate including, but not limited to sand, silica
sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is
transported on a public road, street, or highway, provided that nonmetallic aggregate
material does not include dimension stone and dimension granite; and
    (2) taconite tailings, crushed rock, and architectural or dimension stone and dimension
granite removed from a taconite mine or the site of a previously operated taconite mine.
    Aggregate material must be measured or weighed after it has been extracted from
the pit, quarry, or deposit.
    (b) "Person" means any individual, firm, partnership, corporation, organization,
trustee, association, or other entity.
    (c) "Operator" means any person engaged in the business of removing aggregate
material from the surface or subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a marketable product or service.
    (d) "Extraction site" means a pit, quarry, or deposit containing aggregate material
and any contiguous property to the pit, quarry, or deposit which is used by the operator for
stockpiling the aggregate material.
    (e) "Importer" means any person who buys aggregate material excavated from a
county not listed in paragraph (f) or another state site on which the tax under this section is
not imposed and causes the aggregate material to be imported into a county in this state
which imposes a tax on aggregate material.
    (f) "County" means the counties of Pope, Stearns, Benton, Sherburne, Carver, Scott,
Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen,
Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley, Hennepin,
Washington, Chisago, and Ramsey. County also means a county imposing the tax under
this section on December 31, 2014, or any other county whose board has voted after a
public hearing to impose the tax under this section and has notified the commissioner of
revenue of the imposition of the tax.
    (g) "Borrow" means granular borrow, consisting of durable particles of gravel and
sand, crushed quarry or mine rock, crushed gravel or stone, or any combination thereof,
the ratio of the portion passing the (#200) sieve divided by the portion passing the (1 inch)
sieve may not exceed 20 percent by mass.
EFFECTIVE DATE.This section is effective January 1, 2015.

    Sec. 82. Minnesota Statutes 2012, section 412.131, is amended to read:
412.131 ASSESSOR; DUTIES, COMPENSATION.
The city assessor, if there is one, shall assess and return as provided by law all
property taxable within the city, if a separate assessment district, and the assessor of the
town within which the city lies shall not include in the return any property taxable in the
city. Any assessor may appoint a deputy assessor as provided in section 273.06. The
assessor may be compensated on a full-time or part-time basis at the option of the council
but the compensation shall be not less than $100 in any one year, if fixed on an annual
basis, or not more than $20 per day, if fixed on a per diem basis. If the compensation is
not fixed by the council the assessor shall be entitled to compensation at the rate of $20
per day for each days service necessarily rendered, and mileage at the rate paid other city
officers for each mile necessarily traveled in going to and returning from the county seat of
the county to attend any meeting of the assessors of the county legally called by the county
auditor, and also for each mile necessarily traveled in making the return of assessment
to the proper county officer and in attending sectional meetings called by the county
assessor, except when mileage is paid by the county. In addition to other compensation,
the council may allow the assessor mileage at the same rate per mile as paid other city
officers for each mile necessarily traveled in assessment work.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 83. Minnesota Statutes 2013 Supplement, section 423A.022, subdivision 3,
is amended to read:
    Subd. 3. Reporting; definitions. (a) On or before September 1, annually, the
executive director of the Public Employees Retirement Association shall report to the
commissioner of revenue the following:
    (1) the municipalities which employ firefighters with retirement coverage by the
public employees police and fire retirement plan;
    (2) the number of firefighters with public employees police and fire retirement plan
coverage employed by each municipality;
    (3) (2) the fire departments covered by the voluntary statewide lump-sum volunteer
firefighter retirement plan; and
    (4) (3) any other information requested by the commissioner to administer the police
and firefighter retirement supplemental state aid program.
    (b) For this subdivision, (i) the number of firefighters employed by a municipality
who have public employees police and fire retirement plan coverage means the number
of firefighters with public employees police and fire retirement plan coverage that were
employed by the municipality for not less than 30 hours per week for a minimum of six
months prior to December 31 preceding the date of the payment under this section and, if
the person was employed for less than the full year, prorated to the number of full months
employed; and (ii) the number of active police officers certified for police state aid receipt
under section 69.011, subdivisions 2 and 2b, means, for each municipality, the number of
police officers meeting the definition of peace officer in section 69.011, subdivision 1,
counted as provided and limited by section 69.011, subdivisions 2 and 2b.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 84. Minnesota Statutes 2013 Supplement, section 465.04, is amended to read:
465.04 ACCEPTANCE OF GIFTS.
    Cities A city of the second, third, or fourth class, having at any time an estimated
market value of not more than $41,000,000, as officially equalized by the commissioner
of revenue, either operating under a home rule charter or under the laws of this state, in
addition to all other powers possessed by them, hereby are authorized and empowered to
may receive and accept gifts and donations for the use and benefit of such cities and the
city and its inhabitants thereof upon terms and conditions to be approved by the governing
bodies body of such cities; and such cities are authorized to comply with and perform such
the city. The terms and conditions, which may include payment to the donor or donors of
interest on the value of the gift at not exceeding five percent per annum payable annually or
semiannually, during the remainder of the natural life or lives of such the donor or donors.

    Sec. 85. Minnesota Statutes 2012, section 469.176, subdivision 1b, is amended to read:
    Subd. 1b. Duration limits; terms. (a) No tax increment shall in any event be
paid to the authority:
(1) after 15 years after receipt by the authority of the first increment for a renewal
and renovation district;
(2) after 20 years after receipt by the authority of the first increment for a soils
condition district;
(3) after eight years after receipt by the authority of the first increment for an
economic development district;
(4) for a housing district, a compact development district, or a redevelopment
district, after 25 years from the date of receipt by the authority of the first increment.
(b) For purposes of determining a duration limit under this subdivision or subdivision
1e that is based on the receipt of an increment, any increments from taxes payable in the year
in which the district terminates shall be paid to the authority. This paragraph does not affect
a duration limit calculated from the date of approval of the tax increment financing plan or
based on the recovery of costs or to a duration limit under subdivision 1c. This paragraph
does not supersede the restrictions on payment of delinquent taxes in subdivision 1f.
(c) An action by the authority to waive or decline to accept an increment has no
effect for purposes of computing a duration limit based on the receipt of increment under
this subdivision or any other provision of law. The authority is deemed to have received an
increment for any year in which it waived or declined to accept an increment, regardless
of whether the increment was paid to the authority.
(d) Receipt by a hazardous substance subdistrict of an increment as a result of a
reduction in original net tax capacity under section 469.174, subdivision 7, paragraph
(b), does not constitute receipt of increment by the overlying district for the purpose of
calculating the duration limit under this section.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 86. Minnesota Statutes 2012, section 469.176, subdivision 3, is amended to read:
    Subd. 3. Limitation on administrative expenses. (a) For districts for which
certification was requested before August 1, 1979, or after June 30, 1982 and before
August 1, 2001, no tax increment shall be used to pay any administrative expenses for
a project which exceed ten percent of the total estimated tax increment expenditures
authorized by the tax increment financing plan or the total tax increment expenditures
for the project, whichever is less.
(b) For districts for which certification was requested after July 31, 1979, and before
July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in
Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the
total tax increment expenditures authorized by the tax increment financing plan or the total
estimated tax increment expenditures for the district, whichever is less.
(c) (b) For districts for which certification was requested after July 31, 2001, no tax
increment may be used to pay any administrative expenses for a project which exceed
ten percent of total estimated tax increment expenditures authorized by the tax increment
financing plan or the total tax increments, as defined in section 469.174, subdivision 25,
clause (1), from the district, whichever is less.
(d) (c) Increments used to pay the county's administrative expenses under
subdivision 4h are not subject to the percentage limits in this subdivision.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 87. Minnesota Statutes 2013 Supplement, section 469.1763, subdivision 2,
is amended to read:
    Subd. 2. Expenditures outside district. (a) For each tax increment financing
district, an amount equal to at least 75 percent of the total revenue derived from tax
increments paid by properties in the district must be expended on activities in the district
or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification
was made after June 30, 1995, the in-district percentage for purposes of the preceding
sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
increments paid by properties in the district may be expended, through a development fund
or otherwise, on activities outside of the district but within the defined geographic area of
the project except to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification was
made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
20 percent. The revenue derived from tax increments for the district that are expended on
costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before
calculating the percentages that must be expended within and without the district.
    (b) In the case of a housing district, a housing project, as defined in section 469.174,
subdivision 11 , is an activity in the district.
    (c) All administrative expenses are for activities outside of the district, except that
if the only expenses for activities outside of the district under this subdivision are for
the purposes described in paragraph (d), administrative expenses will be considered as
expenditures for activities in the district.
    (d) The authority may elect, in the tax increment financing plan for the district,
to increase by up to ten percentage points the permitted amount of expenditures for
activities located outside the geographic area of the district under paragraph (a). As
permitted by section 469.176, subdivision 4k, the expenditures, including the permitted
expenditures under paragraph (a), need not be made within the geographic area of the
project. Expenditures that meet the requirements of this paragraph are legally permitted
expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
To qualify for the increase under this paragraph, the expenditures must:
    (1) be used exclusively to assist housing that meets the requirement for a qualified
low-income building, as that term is used in section 42 of the Internal Revenue Code; and
    (2) not exceed the qualified basis of the housing, as defined under section 42(c) of
the Internal Revenue Code, less the amount of any credit allowed under section 42 of
the Internal Revenue Code; and
    (3) be used to:
    (i) acquire and prepare the site of the housing;
    (ii) acquire, construct, or rehabilitate the housing; or
    (iii) make public improvements directly related to the housing; or
(4) be used to develop housing:
(i) if the market value of the housing does not exceed the lesser of:
(A) 150 percent of the average market value of single-family homes in that
municipality; or
(B) $200,000 for municipalities located in the metropolitan area, as defined in
section 473.121, or $125,000 for all other municipalities; and
(ii) if the expenditures are used to pay the cost of site acquisition, relocation,
demolition of existing structures, site preparation, and pollution abatement on one or
more parcels, if the parcel contains a residence containing one to four family dwelling
units that has been vacant for six or more months and is in foreclosure as defined in
section 325N.10, subdivision 7, but without regard to whether the residence is the owner's
principal residence, and only after the redemption period has expired.
    (e) For a district created within a biotechnology and health sciences industry zone
as defined in section 469.330, subdivision 6, or for an existing district located within
such a zone, tax increment derived from such a district may be expended outside of the
district but within the zone only for expenditures required for the construction of public
infrastructure necessary to support the activities of the zone, land acquisition, and other
redevelopment costs as defined in section 469.176, subdivision 4j. These expenditures are
considered as expenditures for activities within the district. The authority provided by
this paragraph expires for expenditures made after the later of (1) December 31, 2015,
or (2) the end of the five-year period beginning on the date the district was certified,
provided that date was before January 1, 2016.
(f) The authority under paragraph (d), clause (4), expires on December 31, 2016.
Increments may continue to be expended under this authority after that date, if they are
used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph
(a), if December 31, 2016, is considered to be the last date of the five-year period after
certification under that provision.
EFFECTIVE DATE.This section is effective the day following final enactment
and applies to all districts, regardless of when the request for certification was made.

    Sec. 88. Minnesota Statutes 2012, section 473.665, subdivision 5, is amended to read:
    Subd. 5. Tax levy; surplus; reduction. The corporation, upon issuing any bonds
under the provisions of this section, shall, before the issuance thereof, levy for each year,
until the principal and interest are paid in full, a direct annual tax on all the taxable property
of the cities in and for which the corporation has been created in an amount not less than
five percent in excess of the sum required to pay the principal and interest thereof, when
and as such principal and interest matures. After any of such bonds have been delivered to
purchasers, such tax shall be irrepealable until all such indebtedness is paid, and after the
issuance of such bonds no further action of the corporation shall be necessary to authorize
the extensions, assessments, and collection of such tax. The secretary of the corporation
shall forthwith furnish a certified copy of such levy to the county auditor or county
auditors of the county or counties in which the cities in and for which the corporation has
been created are located, together with full information regarding the bonds for which the
tax is levied, and such county auditor or such county auditors, as the case may be, shall
enter the same in the register provided for in section 475.62, or a similar register, and shall
extend and assess the tax so levied. If both cities are located wholly within one county, the
county auditor thereof shall annually extend and assess the amount of the tax so levied. If
the cities are located in different counties, the county auditor of each such county shall
annually extend and assess such portion of the tax levied as the net tax capacity of the
taxable property, not including moneys and credits, located wholly within the city in such
county bears to the total net tax capacity of the taxable property, not including moneys and
credits, within both cities. Any surplus resulting from the excess levy herein provided
for shall be transferred to a sinking fund after the principal and interest for which the tax
was levied and collected has been paid; provided, that the corporation may, on or before
October 15 in any year, by appropriate action, cause its secretary to certify to the county
auditor, or auditors, the amount on hand and available in its treasury from earnings, or
otherwise, including the amount in the sinking fund, which it will use to pay principal or
interest or both on each specified issue of its bonds, and the county auditor or auditors
shall reduce the levy for that year, herein provided for by that amount. The amount of
funds so certified shall be set aside by the corporation, and be used for no other purpose
than for the payment of the principal and interest of the bonds. All taxes hereunder shall
be collected and remitted to the corporation by the county treasurer or county treasurers,
in accordance with the provisions of law governing the collection of other taxes, and shall
be used solely for the payment of the bonds where due.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 89. Minnesota Statutes 2012, section 477A.0124, subdivision 5, is amended to
read:
    Subd. 5. County transition aid. (a) For 2009 and each year thereafter, A county is
eligible to receive the transition aid it received in 2007.
    (b) In 2009 only, a county with (1) a 2006 population less than 30,000, and (2)
an average Part I crimes per capita greater than 3.9 percent based on factors used in
determining county program aid payable in 2008, shall receive $100,000.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 90. Minnesota Statutes 2012, section 477A.014, subdivision 1, is amended to read:
    Subdivision 1. Calculations and payments. (a) The commissioner of revenue shall
make all necessary calculations and make payments pursuant to sections 477A.013 and
477A.03 directly to the affected taxing authorities annually. In addition, the commissioner
shall notify the authorities of their aid amounts, as well as the computational factors used
in making the calculations for their authority, and those statewide total figures that are
pertinent, before August 1 of the year preceding the aid distribution year.
(b) For the purposes of this subdivision, aid is determined for a city or town based
on its city or town status as of June 30 of the year preceding the aid distribution year. If
the effective date for a municipal incorporation, consolidation, annexation, detachment,
dissolution, or township organization is on or before June 30 of the year preceding
the aid distribution year, such change in boundaries or form of government shall be
recognized for aid determinations for the aid distribution year. If the effective date for a
municipal incorporation, consolidation, annexation, detachment, dissolution, or township
organization is after June 30 of the year preceding the aid distribution year, such change in
boundaries or form of government shall not be recognized for aid determinations until
the following year.
(c) Changes in boundaries or form of government will only be recognized for the
purposes of this subdivision, to the extent that: (1) changes in market values are included
in market values reported by assessors to the commissioner, and changes in population,
and household size, and the road accidents factor are included in their respective
certifications to the commissioner as referenced in section 477A.011, or (2) an annexation
information report as provided in paragraph (d) is received by the commissioner on
or before July 15 of the aid calculation year. Revisions to estimates or data for use in
recognizing changes in boundaries or form of government are not effective for purposes
of this subdivision unless received by the commissioner on or before July 15 of the aid
calculation year. Clerical errors in the certification or use of estimates and data established
as of July 15 in the aid calculation year are subject to correction within the time periods
allowed under subdivision 3.
(d) In the case of an annexation, an annexation information report may be completed
by the annexing jurisdiction and submitted to the commissioner for purposes of this
subdivision if the net tax capacity of annexed area for the assessment year preceding the
effective date of the annexation exceeds five percent of the city's net tax capacity for the
same year. The form and contents of the annexation information report shall be prescribed
by the commissioner. The commissioner shall change the net tax capacity, the population,
the population decline, the commercial industrial percentage, and the transformed
population for the annexing jurisdiction only if the annexation information report provides
data the commissioner determines to be reliable for all of these factors used to compute city
revenue need for the annexing jurisdiction. The commissioner shall adjust the pre-1940
housing percentage, the road accidents factor, and household size only if the entire area of
an existing city or town is annexed or consolidated and only if reliable data is available for
all of these factors used to compute city revenue need for the annexing jurisdiction.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 91. Minnesota Statutes 2012, section 611.27, subdivision 13, is amended to read:
    Subd. 13. Public defense services; correctional facility inmates. All billings
for services rendered and ordered under subdivision 7 shall require the approval of the
chief district public defender before being forwarded on a monthly basis to the state
public defender. In cases where adequate representation cannot be provided by the district
public defender and where counsel has been appointed under a court order, the state
public defender shall forward to the commissioner of management and budget all billings
for services rendered under the court order. The commissioner shall pay for services
from county program aid retained by the commissioner of revenue for that purpose under
section 477A.0124, subdivision 1, clause (4), or 477A.03, subdivision 2b, paragraph (a).
    The costs of appointed counsel and associated services in cases arising from new
criminal charges brought against indigent inmates who are incarcerated in a Minnesota
state correctional facility are the responsibility of the state Board of Public Defense. In
such cases the state public defender may follow the procedures outlined in this section for
obtaining court-ordered counsel.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 92. Minnesota Statutes 2012, section 611.27, subdivision 15, is amended to read:
    Subd. 15. Costs of transcripts. In appeal cases and postconviction cases where
the appellate public defender's office does not have sufficient funds to pay for transcripts
and other necessary expenses because it has spent or committed all of the transcript
funds in its annual budget, the state public defender may forward to the commissioner
of management and budget all billings for transcripts and other necessary expenses. The
commissioner shall pay for these transcripts and other necessary expenses from county
program aid retained by the commissioner of revenue for that purpose under section
477A.0124, subdivision 1, clause (4), or 477A.03, subdivision 2b, paragraph (a).
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 93. REVISOR'S INSTRUCTION.
The revisor of statutes shall make all necessary cross-reference changes in
Minnesota Statutes and Minnesota Rules consistent with the amendments and repealers in
this act. The revisor can make changes to sentence structure to preserve the meaning of
the text. The revisor shall make other changes in chapter titles; section, subdivision, part,
and subpart headnotes; and in other terminology necessary as a result of the enactment of
this act. The Department of Revenue shall assist in making these corrections.

    Sec. 94. REPEALER.
(a) Minnesota Statutes 2012, sections 273.1398, subdivision 4b; 290.01, subdivision
19e; 290.0674, subdivision 3; 290.191, subdivision 4; and 290.33, and Minnesota Rules,
part 8007.0200, are repealed.
(b) Minnesota Statutes 2012, sections 16D.02, subdivisions 5 and 8; 16D.11,
subdivision 2; 270C.131; 270C.53; 270C.991, subdivision 4; 272.02, subdivisions 1, 1a,
43, 48, 51, 53, 67, 72, and 82; 272.027, subdivision 2; 272.031; 273.015, subdivision 1;
273.03, subdivision 3; 273.075; 273.1383; 273.1386; 273.80; 275.77; 279.32; 281.173,
subdivision 8; 281.174, subdivision 8; 281.328; 282.10; 282.23; 287.20, subdivision
4; 287.27, subdivision 2; 290.01, subdivisions 4b and 20e; 290C.02, subdivisions 5
and 9; 290C.06; 295.52, subdivision 7; 297A.666; 297A.71, subdivisions 4, 5, 7, 9,
10, 17, 18, 20, 32, and 41; 297F.08, subdivision 11; 297H.10, subdivision 2; 469.174,
subdivision 10c; 469.175, subdivision 2b; 469.176, subdivision 1i; 469.177, subdivision
10; 477A.0124, subdivisions 1 and 6; and 505.173, Minnesota Statutes 2013 Supplement,
section 273.1103, Laws 1993, chapter 375, article 9, section 47, and Minnesota Rules,
parts 8002.0200, subpart 8; 8100.0800; 8130.7500, subpart 7; 8130.8900, subpart 3; and
8130.9500, subparts 1, 1a, 2, 3, 4, and 5, are repealed.
(c) Minnesota Statutes 2012, section 469.1764, is repealed.
(d) Minnesota Statutes 2012, sections 289A.56, subdivision 7; 297A.68, subdivision
38; 469.330; 469.331; 469.332; 469.333; 469.334; 469.335; 469.336; 469.337; 469.338;
469.339; 469.340, subdivisions 1, 2, 3, and 5; and 469.341, and Minnesota Statutes 2013
Supplement, section 469.340, subdivision 4, are repealed.
(e) Minnesota Statutes 2012, section 290.06, subdivisions 30 and 31, are repealed.
EFFECTIVE DATE.Paragraph (a) is effective for taxable years beginning after
December 31, 2013.
Paragraph (b) is effective the day following final enactment.
Paragraph (c) is effective the day following final enactment and any remaining
unexpended tax increments from a district subject to Minnesota Statutes, section 469.1764,
must be distributed as excess increments to the city, county, and school district under
Minnesota Statutes, section 469.176, subdivision 2, paragraph (c), clause (4), on or before
December 31, 2014.
Paragraph (d) is effective the day following final enactment.
Paragraph (e) is effective for taxable years beginning after December 31, 2013.

ARTICLE 9

DEPARTMENT OF REVENUE - TECHNICAL AND POLICY
PROPERTY TAX PROVISIONS

    Section 1. Minnesota Statutes 2012, section 270.87, is amended to read:
270.87 CERTIFICATION TO COUNTY ASSESSORS.
After making an annual determination of the equalized fair market value of the
operating property of each company in each of the respective counties, and in the taxing
districts therein, the commissioner shall certify the equalized fair market value to the
county assessor on or before June 30. The equalized fair market value of the operating
property of the railroad company in the county and the taxing districts therein is the value
on which taxes must be levied and collected in the same manner as on the commercial and
industrial property of such county and the taxing districts therein. If the commissioner
determines that the equalized fair market value certified on or before June 30 is in error,
the commissioner may issue a corrected certification on or before August 31. The
commissioner may correct errors that are merely clerical in nature until December 31.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 272.029, subdivision 4a, is amended to read:
    Subd. 4a. Correction of errors. If the commissioner of revenue determines that
the amount of production tax has been erroneously calculated, the commissioner may
correct the error. The commissioner must notify the owner of the wind energy conversion
system of the correction and the amount of tax due to each county and must certify the
correction to the county auditor of each county in which the system is located on or before
April 1 of the current year. The commissioner may correct errors that are merely clerical
in nature until December 31.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 273.01, is amended to read:
273.01 LISTING AND ASSESSMENT, TIME.
All real property subject to taxation shall be listed and at least one-fifth of the parcels
listed shall be appraised each year with reference to their value on January 2 preceding the
assessment so that each parcel shall be reappraised at maximum intervals of five years. All
real property becoming taxable in any year shall be listed with reference to its value on
January 2 of that year. Except as provided in this section and section 274.01, subdivision
1 , all real property assessments shall be completed two weeks prior to the date scheduled
for the local board of review or equalization. No changes in valuation or classification
which are intended to correct errors in judgment by the county assessor may be made by
the county assessor after the board of review or the county board of equalization has
adjourned; however, corrections of errors for real or personal property that are merely
clerical in nature or changes that extend homestead treatment to property are permitted
after adjournment until the tax extension date for that assessment year. Any changes made
by the assessor after adjournment must be fully documented and maintained in a file in the
assessor's office and shall be available for review by any person. A copy of any changes
made during this period shall be sent to the county board no later than December 31 of
the assessment year. In the event a valuation and classification is not placed on any real
property by the dates scheduled for the local board of review or equalization the valuation
and classification determined in the preceding assessment shall be continued in effect and
the provisions of section 273.13 shall, in such case, not be applicable, except with respect
to real estate which has been constructed since the previous assessment. Real property
containing iron ore, the fee to which is owned by the state of Minnesota, shall, if leased by
the state after January 2 in any year, be subject to assessment for that year on the value of
any iron ore removed under said lease prior to January 2 of the following year. Personal
property subject to taxation shall be listed and assessed annually with reference to its value
on January 2; and, if acquired on that day, shall be listed by or for the person acquiring it.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2013 Supplement, section 273.1325, subdivision 1, is
amended to read:
    Subdivision 1. Computation. The Department of Revenue must annually conduct
an assessment/sales ratio study of the taxable property in each county, city, town, and
school district in accordance with the procedures in subdivisions 2 and 3. Based upon the
results of this assessment/sales ratio study, the Department of Revenue must determine
an equalized net tax capacity for the various classes of taxable property in each taxing
district, the aggregate of which is designated as the adjusted net tax capacity. The adjusted
net tax capacity must be reduced by the captured tax capacity of tax increment districts
under section 469.177, subdivision 2, fiscal disparities contribution tax capacities under
sections 276A.06 and 473F.08, and the tax capacity of transmission lines required to be
subtracted from the local tax base under section 273.425; and increased by fiscal disparities
distribution tax capacities under sections 276A.06 and 473F.08. The adjusted net tax
capacities shall be determined using the net tax capacity percentages in effect for the
assessment year following the assessment year of the study. The Department of Revenue
must make whatever estimates are necessary to account for changes in the classification
system. The Department of Revenue may incur the expense necessary to make the
determinations. The commissioner of revenue may reimburse any county or governmental
official for requested services performed in ascertaining the adjusted net tax capacity. On
or before March 15 annually, the Department of Revenue shall file with the chair of the
Tax Committee of the house of representatives and the chair of the Committee on Taxes
and Tax laws of the senate a report of adjusted net tax capacities for school districts.
On or before June 15 30 annually, the Department of Revenue shall file its final report
on the adjusted net tax capacities for school districts established by the previous year's
assessments and the current year's net tax capacity percentages with the commissioner of
education and each county auditor for those school districts for which the auditor has the
responsibility for determination of local tax rates. A copy of the report so filed shall be
mailed to the clerk of each school district involved and to the county assessor or supervisor
of assessments of the county or counties in which each school district is located.
EFFECTIVE DATE.This section is effective January 1, 2014.

    Sec. 5. Minnesota Statutes 2012, section 273.33, subdivision 2, is amended to read:
    Subd. 2. Listing and assessment by commissioner. The personal property,
consisting of the pipeline system of mains, pipes, and equipment attached thereto, of
pipeline companies and others engaged in the operations or business of transporting natural
gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed with and
assessed by the commissioner of revenue and the values provided to the city or county
assessor by order. This subdivision shall not apply to the assessment of the products
transported through the pipelines nor to the lines of local commercial gas companies
engaged primarily in the business of distributing gas to consumers at retail nor to pipelines
used by the owner thereof to supply natural gas or other petroleum products exclusively
for such owner's own consumption and not for resale to others. If more than 85 percent
of the natural gas or other petroleum products actually transported over the pipeline is
used for the owner's own consumption and not for resale to others, then this subdivision
shall not apply; provided, however, that in that event, the pipeline shall be assessed in
proportion to the percentage of gas actually transported over such pipeline that is not used
for the owner's own consumption. On or before August 1, the commissioner shall certify
to the auditor of each county, the amount of such personal property assessment against
each company in each district in which such property is located. If the commissioner
determines that the amount of personal property assessment certified on or before August
1 is in error, the commissioner may issue a corrected certification on or before October 1.
The commissioner may correct errors that are merely clerical in nature until December 31.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2012, section 273.37, subdivision 2, is amended to read:
    Subd. 2. Listing and assessment by commissioner. Transmission lines of less
than 69 kv, transmission lines of 69 kv and above located in an unorganized township,
and distribution lines, and equipment attached thereto, having a fixed situs outside the
corporate limits of cities except distribution lines taxed as provided in sections 273.40
and 273.41, shall be listed with and assessed by the commissioner of revenue in the
county where situated and the values provided to the city or county assessor by order.
The commissioner shall assess such property at the percentage of market value fixed by
law; and, on or before August 1, shall certify to the auditor of each county in which
such property is located the amount of the assessment made against each company and
person owning such property. If the commissioner determines that the amount of the
assessment certified on or before August 1 is in error, the commissioner may issue a
corrected certification on or before October 1. The commissioner may correct errors that
are merely clerical in nature until December 31.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2012, section 273.3711, is amended to read:
273.3711 RECOMMENDED AND ORDERED VALUES.
    For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372,
all values not required to be listed and assessed by the commissioner of revenue are
recommended values. If the commissioner provides recommended values, the values must
be certified to the auditor of each county in which the property is located on or before
August 1. If the commissioner determines that the certified recommended value is in
error the commissioner may issue a corrected certification on or before October 1. The
commissioner may correct errors that are merely clerical in nature until December 31.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2012, section 274.01, subdivision 1, is amended to read:
    Subdivision 1. Ordinary board; meetings, deadlines, grievances. (a) The town
board of a town, or the council or other governing body of a city, is the board of appeal
and equalization except (1) in cities whose charters provide for a board of equalization or
(2) in any city or town that has transferred its local board of review power and duties to
the county board as provided in subdivision 3. The county assessor shall fix a day and
time when the board or the board of equalization shall meet in the assessment districts
of the county. Notwithstanding any law or city charter to the contrary, a city board of
equalization shall be referred to as a board of appeal and equalization. On or before
February 15 of each year the assessor shall give written notice of the time to the city or
town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings
must be held between April 1 and May 31 each year. The clerk shall give published and
posted notice of the meeting at least ten days before the date of the meeting.
    The board shall meet either at a central location within the county or at the office of
the clerk to review the assessment and classification of property in the town or city. No
changes in valuation or classification which are intended to correct errors in judgment by
the county assessor may be made by the county assessor after the board has adjourned
in those cities or towns that hold a local board of review; however, corrections of errors
that are merely clerical in nature or changes that extend homestead treatment to property
are permitted after adjournment until the tax extension date for that assessment year. The
changes must be fully documented and maintained in the assessor's office and must be
available for review by any person. A copy of the changes made during this period in
those cities or towns that hold a local board of review must be sent to the county board no
later than December 31 of the assessment year.
    (b) The board shall determine whether the taxable property in the town or city has
been properly placed on the list and properly valued by the assessor. If real or personal
property has been omitted, the board shall place it on the list with its market value, and
correct the assessment so that each tract or lot of real property, and each article, parcel,
or class of personal property, is entered on the assessment list at its market value. No
assessment of the property of any person may be raised unless the person has been
duly notified of the intent of the board to do so. On application of any person feeling
aggrieved, the board shall review the assessment or classification, or both, and correct
it as appears just. The board may not make an individual market value adjustment or
classification change that would benefit the property if the owner or other person having
control over the property has refused the assessor access to inspect the property and the
interior of any buildings or structures as provided in section 273.20. A board member
shall not participate in any actions of the board which result in market value adjustments
or classification changes to property owned by the board member, the spouse, parent,
stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew,
or niece of a board member, or property in which a board member has a financial interest.
The relationship may be by blood or marriage.
    (c) A local board may reduce assessments upon petition of the taxpayer but the total
reductions must not reduce the aggregate assessment made by the county assessor by more
than one percent. If the total reductions would lower the aggregate assessments made by
the county assessor by more than one percent, none of the adjustments may be made. The
assessor shall correct any clerical errors or double assessments discovered by the board
without regard to the one percent limitation.
    (d) A local board does not have authority to grant an exemption or to order property
removed from the tax rolls.
    (e) A majority of the members may act at the meeting, and adjourn from day to day
until they finish hearing the cases presented. The assessor shall attend, with the assessment
books and papers, and take part in the proceedings, but must not vote. The county assessor,
or an assistant delegated by the county assessor shall attend the meetings. The board shall
list separately, on a form appended to the assessment book, all omitted property added
to the list by the board and all items of property increased or decreased, with the market
value of each item of property, added or changed by the board, placed opposite the item.
The county assessor shall enter all changes made by the board in the assessment book.
    (f) Except as provided in subdivision 3, if a person fails to appear in person, by
counsel, or by written communication before the board after being duly notified of the
board's intent to raise the assessment of the property, or if a person feeling aggrieved by an
assessment or classification fails to apply for a review of the assessment or classification,
the person may not appear before the county board of appeal and equalization for a review
of the assessment or classification. This paragraph does not apply if an assessment was
made after the local board meeting, as provided in section 273.01, or if the person can
establish not having received notice of market value at least five days before the local
board meeting.
    (g) The local board must complete its work and adjourn within 20 days from the
time of convening stated in the notice of the clerk, unless a longer period is approved by
the commissioner of revenue. No action taken after that date is valid. All complaints
about an assessment or classification made after the meeting of the board must be heard
and determined by the county board of equalization. A nonresident may, at any time,
before the meeting of the board file written objections to an assessment or classification
with the county assessor. The objections must be presented to the board at its meeting by
the county assessor for its consideration.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2012, section 274.014, subdivision 3, is amended to read:
    Subd. 3. Proof of compliance; transfer of duties. (a) Any city or town that
conducts local boards of appeal and equalization meetings must provide proof to the
county assessor by December 1, 2006 February 15, 2015, and each year thereafter, that it
is in compliance with the requirements of subdivision 2. Beginning in 2006 2015, this
notice must also verify that there was a quorum of voting members at each meeting of the
board of appeal and equalization in the current year. A city or town that does not comply
with these requirements is deemed to have transferred its board of appeal and equalization
powers to the county beginning with the following year's assessment and continuing
unless the powers are reinstated under paragraph (c).
    (b) The county shall notify the taxpayers when the board of appeal and equalization
for a city or town has been transferred to the county under this subdivision and, prior to
the meeting time of the county board of equalization, the county shall make available to
those taxpayers a procedure for a review of the assessments, including, but not limited to,
open book meetings. This alternate review process shall take place in April and May.
    (c) A local board whose powers are transferred to the county under this subdivision
may be reinstated by resolution of the governing body of the city or town and upon proof
of compliance with the requirements of subdivision 2. The resolution and proofs must be
provided to the county assessor by December 1 February 15 in order to be effective for
the following year's assessment.
    (d) A local board whose powers are transferred to the county under this subdivision
may continue to employ a local assessor and is not deemed to have transferred its powers
to make assessments.
EFFECTIVE DATE.This section is effective beginning with local boards of appeal
and equalization meetings held after December 31, 2014.

    Sec. 10. Minnesota Statutes 2013 Supplement, section 290C.03, is amended to read:
290C.03 ELIGIBILITY REQUIREMENTS.
(a) Land may be enrolled in the sustainable forest incentive program under this
chapter if all of the following conditions are met:
(1) the land consists of at least 20 contiguous acres and at least 50 percent of the
land must meet the definition of forest land in section 88.01, subdivision 7, during the
enrollment;
(2) a forest management plan for the land must be prepared by an approved plan
writer and implemented during the period in which the land is enrolled;
(3) timber harvesting and forest management guidelines must be used in conjunction
with any timber harvesting or forest management activities conducted on the land during
the period in which the land is enrolled;
(4) the land must be enrolled for a minimum of eight years;
(5) there are no delinquent property taxes on the land; and
(6) claimants enrolling more than 1,920 acres in the sustainable forest incentive
program must allow year-round, nonmotorized access to fish and wildlife resources and
motorized access on established and maintained roads and trails, unless the road or trail is
temporarily closed for safety, natural resource, or road damage reasons on enrolled land
except within one-fourth mile of a permanent dwelling or during periods of high fire
hazard as determined by the commissioner of natural resources.; and
(7) the land is not classified as class 2c managed forest land.
(b) Claimants required to allow access under paragraph (a), clause (6), do not by
that action:
(1) extend any assurance that the land is safe for any purpose;
(2) confer upon the person the legal status of an invitee or licensee to whom a duty
of care is owed; or
(3) assume responsibility for or incur liability for any injury to the person or property
caused by an act or omission of the person.
EFFECTIVE DATE.This section is effective for certifications and applications
due in 2014 and thereafter.

    Sec. 11. Minnesota Statutes 2013 Supplement, section 423A.02, subdivision 3, is
amended to read:
    Subd. 3. Reallocation of amortization state aid. (a) Seventy percent of the
difference between $5,720,000 and the current year amortization aid distributed under
subdivision 1 that is not distributed for any reason to a municipality must be distributed
by the commissioner of revenue according to this paragraph. The commissioner shall
distribute 50 percent of the amounts derived under this paragraph to the Teachers
Retirement Association, ten percent to the Duluth Teachers Retirement Fund Association,
and 40 percent to the St. Paul Teachers Retirement Fund Association to fund the unfunded
actuarial accrued liabilities of the respective funds. These payments must be made on July
15 each fiscal year. If the St. Paul Teachers Retirement Fund Association or the Duluth
Teachers Retirement Fund Association becomes fully funded, the association's eligibility
for its portion of this aid ceases. Amounts remaining in the undistributed balance account
at the end of the biennium if aid eligibility ceases cancel to the general fund.
    (b) In order to receive amortization aid under paragraph (a), before June 30 annually
Independent School District No. 625, St. Paul, must make an additional contribution of
$800,000 each year to the St. Paul Teachers Retirement Fund Association.
    (c) Thirty percent of the difference between $5,720,000 and the current year
amortization aid under subdivision 1a 1 that is not distributed for any reason to a
municipality must be distributed under section 69.021, subdivision 7, paragraph (d), as
additional funding to support a minimum fire state aid amount for volunteer firefighter
relief associations.
EFFECTIVE DATE.This section is effective retroactively from June 1, 2013.

    Sec. 12. Minnesota Statutes 2013 Supplement, section 477A.12, subdivision 1, is
amended to read:
    Subdivision 1. Types of land; payments. 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 477A.11 to 477A.14. The amounts, based on the
acreage as of July 1 of each year prior to the payment year, are:
(1) $5.133 multiplied by the total number of acres of acquired natural resources 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) $5.133, multiplied by the total number of acres of transportation wetland or, at
the county's option, three-fourths of one percent of the appraised value of all transportation
wetland in the county, whichever is greater;
(3) $5.133, multiplied by the total number of acres of wildlife management land, or,
at the county's option, three-fourths of one percent of the appraised value of all wildlife
management land in the county, whichever is greater;
(4) 50 percent of the dollar amount as determined under clause (1), multiplied by
the number of acres of military refuge land in the county;
(5) $1.50, multiplied by the number of acres of county-administered other natural
resources land in the county;
(6) $5.133, multiplied by the total number of acres of land utilization project land
in the county;
(7) $1.50, multiplied by the number of acres of commissioner-administered other
natural resources land in the county; and
    (8) without regard to acreage, $300,000 for local assessments under section 84A.55,
subdivision 9 .
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 13. Minnesota Statutes 2013 Supplement, section 477A.14, subdivision 1, is
amended to read:
    Subdivision 1. General distribution. Except as provided in subdivisions 2 and 3,
40 percent of the total payment to the county shall be 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) (1) 64.2 cents, for each 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, (2) within 30 days of receipt of the payment to
the county, the county treasurer shall pay each organized township ten percent of the
amount received a township with land that qualifies for payment under section 477A.12,
subdivision 1 , clauses (1), (2), and (5) to (7), ten percent of the payment the county
received for such land within that township. 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 477A.12 is not sufficient to fully fund the
distribution provided for in this clause, the amount available shall be distributed to each
township and the county general revenue fund on a pro rata basis; and
(c) (3) 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 July 1, 2014.

    Sec. 14. REVISOR'S INSTRUCTION.
The revisor of statutes shall change the terms "class rate" or "class rates" to
"classification rate" or "classification rates" or similar terms wherever they appear in
Minnesota Statutes when the terms are being used to refer to the calculation of net tax
capacity in the property tax system. The revisor can make changes to sentence structure
to preserve the meaning of the text. The revisor shall make other changes in section and
subdivision headnotes and in other terminology as necessary as a result of the enactment
of this section. The Department of Revenue shall assist in making these corrections.

    Sec. 15. REPEALER.
Minnesota Statutes 2012, sections 273.13, subdivision 21a; 290C.02, subdivisions 5
and 9; and 290C.06, are repealed.
EFFECTIVE DATE.This section is effective the day following final enactment,
except that section 273.13, subdivision 21a, is repealed effective beginning with
assessment year 2014.

ARTICLE 10

DEPARTMENT OF REVENUE - TECHNICAL AND POLICY INCOME AND
FRANCHISE, SALES AND USE, AND MISCELLANEOUS TAX PROVISIONS

    Section 1. Minnesota Statutes 2012, section 270C.34, subdivision 2, is amended to read:
    Subd. 2. Procedure. (a) A request for abatement of penalty under subdivision 1 or
section 289A.60, subdivision 4, or a request for abatement of interest or additional tax
charge, must be filed with the commissioner within 60 days of the date the notice was
mailed to the taxpayer's last known address, stating that a penalty has been imposed.
(b) If the commissioner issues an order denying a request for abatement of penalty,
interest, or additional tax charge, the taxpayer may file an administrative appeal as
provided in section 270C.35 or appeal to Tax Court as provided in section 271.06.
(c) If the commissioner does not issue an order on the abatement request within
60 days from the date the request is received, the taxpayer may appeal to Tax Court as
provided in section 271.06.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 270C.56, subdivision 3, is amended to read:
    Subd. 3. Procedure for assessment; claims for refunds. (a) The commissioner
may assess liability for the taxes described in subdivision 1 against a person liable
under this section. The assessment may be based upon information available to the
commissioner. It must be made within the prescribed period of limitations for assessing
the underlying tax, or within one year after the date of an order assessing underlying
tax, or within one year after the date of a final administrative or judicial determination,
whichever period expires later. An order assessing personal liability under this section is
reviewable under section 270C.35 and is appealable to Tax Court.
(b) If the time for appealing the order has expired and a payment is made by or
collected from the person assessed on the order in excess of the amount lawfully due
from that person of any portion of the liability shown on the order, a claim for refund
may be made by that person within 120 days after any payment of the liability if the
payment is within 3-1/2 years after the date the order was issued. Claims for refund under
this paragraph are limited to the amount paid during the 120-day period. Any amounts
collected under paragraph (c) after a claim for refund is filed in order to satisfy the unpaid
balance of the assessment that is the subject of the claim shall be returned if the claim is
allowed. There is no claim for refund available under this paragraph if the assessment has
previously been the subject of an administrative or Tax Court appeal, or a denied claim
for refund. The taxpayer may contest denial of the refund as provided in the procedures
governing claims for refunds under section 289A.50, subdivision 7.
(c) If a person has been assessed under this section for an amount for a given period
and the time for appeal has expired, regardless of whether an action contesting denial of a
claim for refund has been filed under paragraph (b), or there has been a final determination
that the person is liable, collection action is not stayed pursuant to section 270C.33,
subdivision 5 , for that assessment or for subsequent assessments of additional amounts for
the same person for the same period and tax type.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 289A.18, subdivision 2, is amended to read:
    Subd. 2. Withholding returns, entertainer withholding returns, returns for
withholding from payments to out-of-state contractors, and withholding returns
from partnerships and S corporations. (a) Withholding returns for the first, second,
and third quarters are due on or before the last day of the month following the close of
the quarterly period. However, if the return shows timely deposits in full payment of
the taxes due for that period, the returns for the first, second, and third quarters may be
filed on or before the tenth day of the second calendar month following the period. The
return for the fourth quarter must be filed on or before the 28th day of the second calendar
month following the period. An employer, in preparing a quarterly return, may take credit
for deposits previously made for that quarter. Entertainer withholding tax returns are
due within 30 days after each performance. Returns for withholding from payments to
out-of-state contractors are due within 30 days after the payment to the contractor. Returns
for withholding by partnerships are due on or before the due date specified for filing
partnership returns. Returns for withholding by S corporations are due on or before the
due date specified for filing corporate franchise tax returns.
(b) A seasonal employer who provides notice in the form and manner prescribed
by the commissioner before the end of the calendar quarter is not required to file a
withholding tax return for periods of anticipated inactivity unless the employer pays wages
during the period from which tax is withheld. For purposes of this paragraph, a seasonal
employer is an employer that regularly, in the same one or more quarterly periods of each
calendar year, pays no wages to employees.
EFFECTIVE DATE.(a) The amendments in paragraph (a) are effective for returns
due after January 1, 2016.
(b) The amendment adding paragraph (b) is effective for wages paid after December
31, 2015.

    Sec. 4. Minnesota Statutes 2013 Supplement, section 290.191, subdivision 5, is
amended to read:
    Subd. 5. Determination of sales factor. For purposes of this section, the following
rules apply in determining the sales factor.
    (a) The sales factor includes all sales, gross earnings, or receipts received in the
ordinary course of the business, except that the following types of income are not included
in the sales factor:
    (1) interest;
    (2) dividends;
    (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;
    (4) sales of property used in the trade or business, except sales of leased property of
a type which is regularly sold as well as leased; and
    (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
Code or sales of stock.
    (b) Sales of tangible personal property are made within this state if the property is
received by a purchaser at a point within this state, and the taxpayer is taxable in this state,
regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination
of the property.
    (c) Tangible personal property delivered to a common or contract carrier or foreign
vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
regardless of f.o.b. point or other conditions of the sale.
    (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
licensed by a state or political subdivision to resell this property only within the state of
ultimate destination, the sale is made in that state.
    (e) Sales made by or through a corporation that is qualified as a domestic
international sales corporation under section 992 of the Internal Revenue Code are not
considered to have been made within this state.
    (f) Sales, rents, royalties, and other income in connection with real property is
attributed to the state in which the property is located.
    (g) Receipts from the lease or rental of tangible personal property, including finance
leases and true leases, must be attributed to this state if the property is located in this
state and to other states if the property is not located in this state. Receipts from the
lease or rental of moving property including, but not limited to, motor vehicles, rolling
stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
factor to the extent that the property is used in this state. The extent of the use of moving
property is determined as follows:
    (1) A motor vehicle is used wholly in the state in which it is registered.
    (2) The extent that rolling stock is used in this state is determined by multiplying
the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
which is the miles traveled within this state by the leased or rented rolling stock and the
denominator of which is the total miles traveled by the leased or rented rolling stock.
    (3) The extent that an aircraft is used in this state is determined by multiplying the
receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
the number of landings of the aircraft in this state and the denominator of which is the
total number of landings of the aircraft.
    (4) The extent that a vessel, mobile equipment, or other mobile property is used in
the state is determined by multiplying the receipts from the lease or rental of the property
by a fraction, the numerator of which is the number of days during the taxable year the
property was in this state and the denominator of which is the total days in the taxable year.
    (h) Royalties and other income received for the use of or for the privilege of using
intangible property, including patents, know-how, formulas, designs, processes, patterns,
copyrights, trade names, service names, franchises, licenses, contracts, customer lists, or
similar items, must be attributed to the state in which the property is used by the purchaser.
If the property is used in more than one state, the royalties or other income must be
apportioned to this state pro rata according to the portion of use in this state. If the portion
of use in this state cannot be determined, the royalties or other income must be excluded
from both the numerator and the denominator. Intangible property is used in this state if
the purchaser uses the intangible property or the rights therein in the regular course of its
business operations in this state, regardless of the location of the purchaser's customers.
    (i) Sales of intangible property are made within the state in which the property is
used by the purchaser. If the property is used in more than one state, the sales must be
apportioned to this state pro rata according to the portion of use in this state. If the
portion of use in this state cannot be determined, the sale must be excluded from both the
numerator and the denominator of the sales factor. Intangible property is used in this
state if the purchaser used the intangible property in the regular course of its business
operations in this state.
    (j) Receipts from the performance of services must be attributed to the state where
the services are received. For the purposes of this section, receipts from the performance
of services provided to a corporation, partnership, or trust may only be attributed to a state
where it has a fixed place of doing business. If the state where the services are received is
not readily determinable or is a state where the corporation, partnership, or trust receiving
the service does not have a fixed place of doing business, the services shall be deemed
to be received at the location of the office of the customer from which the services were
ordered in the regular course of the customer's trade or business. If the ordering office
cannot be determined, the services shall be deemed to be received at the office of the
customer to which the services are billed.
    (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
from management, distribution, or administrative services performed by a corporation
or trust for a fund of a corporation or trust regulated under United States Code, title 15,
sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
the fund resides. Under this paragraph, receipts for services attributed to shareholders are
determined on the basis of the ratio of: (1) the average of the outstanding shares in the
fund owned by shareholders residing within Minnesota at the beginning and end of each
year; and (2) the average of the total number of outstanding shares in the fund at the
beginning and end of each year. Residence of the shareholder, in the case of an individual,
is determined by the mailing address furnished by the shareholder to the fund. Residence
of the shareholder, when the shares are held by an insurance company as a depositor for
the insurance company policyholders, is the mailing address of the policyholders. In
the case of an insurance company holding the shares as a depositor for the insurance
company policyholders, if the mailing address of the policyholders cannot be determined
by the taxpayer, the receipts must be excluded from both the numerator and denominator.
Residence of other shareholders is the mailing address of the shareholder.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2012, section 296A.01, subdivision 16, is amended to read:
    Subd. 16. Dyed fuel. "Dyed fuel" means diesel motor fuel to which indelible dye
has been added, either before or upon withdrawal at a terminal or refinery rack, and which
may be sold for exempt purposes. The dye may be either dye required to be added per the
EPA or dye that meets other specifications required by the Internal Revenue Service or
the commissioner.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2013 Supplement, section 403.162, subdivision 5, is
amended to read:
    Subd. 5. Fees deposited. (a) The commissioner of revenue shall, based on
the relative proportion of the prepaid wireless E911 fee and the prepaid wireless
telecommunications access Minnesota fee imposed per retail transaction, divide the fees
collected in corresponding proportions. Within 30 days of receipt of the collected fees,
the commissioner shall:
(1) deposit the proportion of the collected fees attributable to the prepaid wireless
E911 fee in the 911 emergency telecommunications service account in the special revenue
fund; and
(2) deposit the proportion of collected fees attributable to the prepaid wireless
telecommunications access Minnesota fee in the telecommunications access fund
established in section 237.52, subdivision 1.
(b) The department commissioner of revenue may deduct and retain deposit in a
special revenue account an amount, not to exceed two percent of collected fees,. Money
in the account is annually appropriated to the commissioner of revenue to reimburse its
direct costs of administering the collection and remittance of prepaid wireless E911 fees
and prepaid wireless telecommunications access Minnesota fees.
EFFECTIVE DATE.This section is effective retroactively from January 1, 2014.

    Sec. 7. Laws 2013, chapter 143, article 8, section 3, the effective date, is amended to
read:
EFFECTIVE DATE.This section is effective for sales and purchases made after
June 30, 2013, except for paragraph (p), which is effective the day following final
enactment.
EFFECTIVE DATE.This section is effective retroactively from the day following
final enactment of Laws 2013, chapter 143, article 8, section 3.

    Sec. 8. REPEALER.
Minnesota Rules, parts 8130.8900, subpart 3; and 8130.9500, subparts 1, 1a, 2,
3, 4, and 5, are repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.