Bill Text: MN SF2136 | 2011-2012 | 87th Legislature | Engrossed


Bill Title: Tax policy and technical provisions modifications

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2012-04-25 - HF substituted on General Orders HF2690 [SF2136 Detail]

Download: Minnesota-2011-SF2136-Engrossed.html

1.1A bill for an act
1.2relating to financing of state and local government; making policy, technical,
1.3administrative, and clarifying changes to individual income, corporate franchise,
1.4estate, property, sales and use, special, mineral, liquor, aggregate materials,
1.5local, and other taxes and tax-related provisions; making technical, minor,
1.6and clarifying changes in enterprise zone and economic development powers
1.7and eliminating obsolete provisions; making clarifying, technical, and other
1.8changes to the issuance of municipal bonds; modifying tax-exempt bonding
1.9provisions; authorizing certain local governments to issue public debt; modifying
1.10use of revenues and authorizing extension of certain sales and lodging taxes
1.11for certain cities; requiring a solicitor nexus study; exempting certain cities
1.12from 2011 aid payment penalties;amending Minnesota Statutes 2010, sections
1.1313.4965, subdivision 3; 16A.46; 16C.16, subdivision 7; 41A.036, subdivision
1.142; 65B.84, subdivision 1; 117.025, subdivision 10; 126C.48, subdivision 8;
1.15270.077; 270.41, subdivision 5; 270B.14, subdivision 3; 270C.38, subdivision 1;
1.16270C.42, subdivision 2; 270C.69, subdivision 1; 272.01, subdivision 2; 272.02,
1.17subdivision 77; 272.03, subdivision 9; 273.111, by adding a subdivision; 273.124,
1.18subdivision 13; 273.13, subdivision 24; 273.1315, subdivisions 1, 2; 273.1398,
1.19subdivision 4; 273.19, subdivision 1; 273.372, subdivision 4; 273.39; 275.065,
1.20subdivision 3; 276A.01, subdivision 3; 279.06, subdivision 1; 287.20, by adding
1.21a subdivision; 287.385, subdivision 7; 289A.02, by adding a subdivision;
1.22289A.10, by adding a subdivision; 289A.12, by adding a subdivision; 289A.18,
1.23by adding a subdivision; 289A.20, subdivision 3, by adding a subdivision;
1.24289A.26, subdivisions 3, 4, 7, 9; 289A.38, subdivisions 7, 8, 9; 289A.42,
1.25subdivision 2; 289A.55, subdivision 9; 289A.60, subdivisions 4, 24; 290.01,
1.26subdivisions 6b, 19d, 29; 290.067, subdivision 1; 290.0921, subdivision 3;
1.27290.095, subdivision 3; 290.17, subdivision 4; 290A.25; 290B.04, subdivision 2;
1.28296A.22; 297A.665; 297A.8155; 297A.99, subdivision 4; 297E.14, subdivision
1.297; 297F.01, subdivision 23; 297F.09, subdivision 9; 297F.18, subdivision 7;
1.30297G.04, subdivision 2; 297G.09, subdivision 8; 297G.17, subdivision 7;
1.31297I.05, subdivision 11; 297I.30, by adding a subdivision; 297I.80, subdivision
1.321; 298.018, subdivision 2; 298.75, by adding a subdivision; 373.40, subdivisions
1.331, 2, 4; 383A.80, subdivision 4; 383B.80, subdivision 4; 469.015, subdivision
1.344; 469.033, subdivision 7; 469.166, subdivisions 3, 5, 6; 469.167, subdivision
1.352; 469.171, subdivisions 1, 4, 6a, 7, 9, 11; 469.172; 469.173, subdivisions 5, 6;
1.36469.174, subdivisions 20, 25; 469.176, subdivision 7; 469.1763, subdivision
1.376; 469.1764, subdivision 1; 469.177, subdivision 1; 469.1793; 469.1813,
1.38subdivision 6b; 473F.02, subdivision 3; 474A.02, subdivision 23a; 474A.04,
1.39subdivision 1a; 474A.062; 474A.091, subdivision 3a; 475.521, subdivisions
2.12, 4; 475.58, subdivision 3b; 477A.017, subdivision 3; Minnesota Statutes
2.22011 Supplement, sections 270C.34, subdivision 1; 272.02, subdivisions 39,
2.397; 273.114, subdivision 6; 273.13, subdivisions 23, 25; 276.04, subdivision 2;
2.4290.01, subdivisions 19b, 19c; 290.06, subdivision 2c; 290.0671, subdivision
2.51; 290.091, subdivision 2; 290.0922, subdivisions 2, 3; 291.03, subdivisions
2.68, 9, 10, 11; 297A.75, subdivision 1; 297I.05, subdivisions 7, 12; 297I.30,
2.7subdivisions 1, 2; 298.01, subdivision 3; 373.01, subdivision 1; Laws 1971,
2.8chapter 773, section 1, subdivision 2, as amended; Laws 1988, chapter 645,
2.9section 3, as amended; Laws 1998, chapter 389, article 8, section 43, subdivision
2.103, as amended; Laws 2002, chapter 377, article 3, section 25, as amended; Laws
2.112003, chapter 127, article 12, section 28; Laws 2005, First Special Session
2.12chapter 3, article 5, section 37, subdivisions 2, 4; Laws 2008, chapter 366, article
2.137, section 19, subdivision 3, as amended; Laws 2011, First Special Session
2.14chapter 7, article 10, section 7; proposing coding for new law in Minnesota
2.15Statutes, chapter 297I; repealing Minnesota Statutes 2010, sections 168A.40,
2.16subdivisions 3, 4; 270C.991, subdivision 5; 272.02, subdivision 83; 272.69;
2.17273.11, subdivision 22; 290.06, subdivisions 24, 32; 297A.68, subdivision
2.1841; 469.042, subdivisions 2, 3, 4; 469.043; 469.059, subdivision 13; 469.129;
2.19469.134; 469.162, subdivision 2; 469.1651; 469.166, subdivisions 7, 8, 9, 10, 11,
2.2012; 469.167, subdivisions 1, 3; 469.168; 469.169, subdivisions 1, 2, 3, 4, 5, 6, 7,
2.218, 9, 10, 11, 13; 469.170, subdivisions 1, 2, 3, 4, 5, 5a, 5b, 5c, 5d, 5e, 6, 7, 8;
2.22469.171, subdivisions 2, 5, 6b; 469.173, subdivisions 1, 3; 469.1765; 469.1791;
2.23469.1799, subdivision 2; 469.301, subdivisions 1, 2, 3, 4, 5; 469.302; 469.303;
2.24469.304; 469.321; 469.3215; 469.322; 469.323; 469.324; 469.325; 469.326;
2.25469.327; 469.328; 469.329; 473.680; Laws 2009, chapter 88, article 4, section
2.2623, as amended.
2.27BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.28ARTICLE 1
2.29DEPARTMENT POLICY AND TECHNICAL: INCOME AND
2.30CORPORATE FRANCHISE TAXES

2.31    Section 1. Minnesota Statutes 2010, section 289A.02, is amended by adding a
2.32subdivision to read:
2.33    Subd. 9. Field audit. "Field audit" means the physical presence of examiners
2.34in the taxpayer's or taxpayer's representative's office conducting an examination of the
2.35taxpayer with the intention of issuing an assessment or notice of change in tax or which
2.36results in the issuing of an assessment or notice of change in tax. The examination may
2.37include inspecting a taxpayer's place of business, tangible personal property, equipment,
2.38computer systems and facilities, pertinent books, records, papers, vouchers, computer
2.39printouts, accounts, and documents.
2.40EFFECTIVE DATE.This section is effective the day following final enactment.

2.41    Sec. 2. Minnesota Statutes 2010, section 289A.26, subdivision 3, is amended to read:
2.42    Subd. 3. Short taxable year. (a) A corporation or an entity with a short taxable
2.43year of less than 12 months, but at least four months, must pay estimated tax in equal
3.1installments on or before the 15th day of the third, sixth, ninth, and final month of the
3.2short taxable year, to the extent applicable based on the number of months in the short
3.3taxable year.
3.4(b) A corporation or an entity is not required to make estimated tax payments for a
3.5short taxable year unless its tax liability before the first day of the last month of the taxable
3.6year can reasonably be expected to exceed $500.
3.7(c) No payment is required for a short taxable year of less than four months.
3.8EFFECTIVE DATE.This section is effective the day following final enactment.

3.9    Sec. 3. Minnesota Statutes 2010, section 289A.26, subdivision 4, is amended to read:
3.10    Subd. 4. Underpayment of estimated tax. If there is an underpayment of estimated
3.11tax by a corporation or an entity, there shall be added to the tax for the taxable year an
3.12amount determined at the rate in section 270C.40 on the amount of the underpayment,
3.13determined under subdivision 5, for the period of the underpayment determined under
3.14subdivision 6. This subdivision does not apply in the first taxable year that a corporation is
3.15subject to the tax imposed under section 290.02 or an entity is subject to the tax imposed
3.16under section 290.05, subdivision 3.
3.17EFFECTIVE DATE.This section is effective the day following final enactment.

3.18    Sec. 4. Minnesota Statutes 2010, section 289A.26, subdivision 7, is amended to read:
3.19    Subd. 7. Required installments. (a) Except as otherwise provided in this
3.20subdivision, the amount of a required installment is 25 percent of the required annual
3.21payment.
3.22(b) Except as otherwise provided in this subdivision, the term "required annual
3.23payment" means the lesser of:
3.24(1) 100 percent of the tax shown on the return for the taxable year, or, if no return is
3.25filed, 100 percent of the tax for that year; or
3.26(2) 100 percent of the tax shown on the return of the corporation or entity for the
3.27preceding taxable year provided the return was for a full 12-month period, showed a
3.28liability, and was filed by the corporation or entity.
3.29(c) Except for determining the first required installment for any taxable year,
3.30paragraph (b), clause (2), does not apply in the case of a large corporation. The term
3.31"large corporation" means a corporation or any predecessor corporation that had taxable
3.32net income of $1,000,000 or more for any taxable year during the testing period. The
3.33term "testing period" means the three taxable years immediately preceding the taxable
4.1year involved. A reduction allowed to a large corporation for the first installment that is
4.2allowed by applying paragraph (b), clause (2), must be recaptured by increasing the next
4.3required installment by the amount of the reduction.
4.4(d) In the case of a required installment, if the corporation or entity establishes that
4.5the annualized income installment is less than the amount determined in paragraph (a), the
4.6amount of the required installment is the annualized income installment and the recapture
4.7of previous quarters' reductions allowed by this paragraph must be recovered by increasing
4.8later required installments to the extent the reductions have not previously been recovered.
4.9(e) The "annualized income installment" is the excess, if any, of:
4.10(1) an amount equal to the applicable percentage of the tax for the taxable year
4.11computed by placing on an annualized basis the taxable income:
4.12(i) for the first two months of the taxable year, in the case of the first required
4.13installment;
4.14(ii) for the first two months or for the first five months of the taxable year, in the
4.15case of the second required installment;
4.16(iii) for the first six months or for the first eight months of the taxable year, in the
4.17case of the third required installment; and
4.18(iv) for the first nine months or for the first 11 months of the taxable year, in the
4.19case of the fourth required installment, over
4.20(2) the aggregate amount of any prior required installments for the taxable year.
4.21(3) For the purpose of this paragraph, the annualized income shall be computed
4.22by placing on an annualized basis the taxable income for the year up to the end of the
4.23month preceding the due date for the quarterly payment multiplied by 12 and dividing
4.24the resulting amount by the number of months in the taxable year (2, 5, 6, 8, 9, or 11 as
4.25the case may be) referred to in clause (1).
4.26(4) The "applicable percentage" used in clause (1) is:
4.27
4.28
4.29
For the following
required
installments:
The applicable
percentage is:
4.30
1st
25
4.31
2nd
50
4.32
3rd
75
4.33
4th
100
4.34(f)(1) If this paragraph applies, the amount determined for any installment must
4.35be determined in the following manner:
4.36(i) take the taxable income for the months during the taxable year preceding the
4.37filing month;
5.1(ii) divide that amount by the base period percentage for the months during the
5.2taxable year preceding the filing month;
5.3(iii) determine the tax on the amount determined under item (ii); and
5.4(iv) multiply the tax computed under item (iii) by the base period percentage for the
5.5filing month and the months during the taxable year preceding the filing month.
5.6(2) For purposes of this paragraph:
5.7(i) the "base period percentage" for a period of months is the average percent that the
5.8taxable income for the corresponding months in each of the three preceding taxable years
5.9bears to the taxable income for the three preceding taxable years;
5.10(ii) the term "filing month" means the month in which the installment is required
5.11to be paid;
5.12(iii) this paragraph only applies if the base period percentage for any six consecutive
5.13months of the taxable year equals or exceeds 70 percent; and
5.14(iv) the commissioner may provide by rule for the determination of the base period
5.15percentage in the case of reorganizations, new corporations or entities, and other similar
5.16circumstances.
5.17(3) In the case of a required installment determined under this paragraph, if the
5.18corporation or entity determines that the installment is less than the amount determined in
5.19paragraph (a), the amount of the required installment is the amount determined under this
5.20paragraph and the recapture of previous quarters' reductions allowed by this paragraph
5.21must be recovered by increasing later required installments to the extent the reductions
5.22have not previously been recovered.
5.23EFFECTIVE DATE.This section is effective the day following final enactment.

5.24    Sec. 5. Minnesota Statutes 2010, section 289A.26, subdivision 9, is amended to read:
5.25    Subd. 9. Failure to file an estimate. In the case of a corporation or an entity
5.26that fails to file an estimated tax for a taxable year when one is required, the period of
5.27the underpayment runs from the four installment dates in subdivision 2 or 3, whichever
5.28applies, to the earlier of the periods in subdivision 6, clauses (1) and (2).
5.29EFFECTIVE DATE.This section is effective the day following final enactment.

5.30    Sec. 6. Minnesota Statutes 2010, section 289A.38, subdivision 7, is amended to read:
5.31    Subd. 7. Federal tax changes. If the amount of income, items of tax preference,
5.32deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for
5.33any period, as reported to the Internal Revenue Service is changed or corrected by the
6.1commissioner of Internal Revenue or other officer of the United States or other competent
6.2authority, or where a renegotiation of a contract or subcontract with the United States
6.3results in a change in income, items of tax preference, deductions, credits, or withholding
6.4tax, or, in the case of estate tax, where there are adjustments to the taxable estate, the
6.5taxpayer shall report the change or correction or renegotiation results in writing to the
6.6commissioner of revenue. The report must be submitted within 180 days after the
6.7final determination and must be in the form of either an amended Minnesota estate,
6.8withholding tax, corporate franchise tax, or income tax return conceding the accuracy of
6.9the federal determination or a letter detailing how the federal determination is incorrect
6.10or does not change the Minnesota tax. An amended Minnesota income tax return must
6.11be accompanied by an amended property tax refund return, if necessary. A taxpayer
6.12filing an amended federal tax return must also file a copy of the amended return with the
6.13commissioner of revenue within 180 days after filing the amended return.
6.14EFFECTIVE DATE.This section is effective the day following final enactment.

6.15    Sec. 7. Minnesota Statutes 2010, section 289A.38, subdivision 8, is amended to read:
6.16    Subd. 8. Failure to report change or correction of federal return Time
6.17requirement to report federal tax changes. If a taxpayer fails to make a report as
6.18required by subdivision 7, the commissioner may recompute the tax, including a refund,
6.19based on information available to the commissioner. The tax may be recomputed within
6.20six years after the report should have been filed, notwithstanding any period of limitations
6.21to the contrary. A taxpayer must submit the report or file the amended return required by
6.22subdivision 7 within 180 days after the final determination by the commissioner of internal
6.23revenue or other officer of the United States or other competent authority of a change or
6.24correction of the person's federal tax return or the filing of an amended federal tax return.
6.25EFFECTIVE DATE.This section is effective the day following final enactment.

6.26    Sec. 8. Minnesota Statutes 2010, section 289A.38, subdivision 9, is amended to read:
6.27    Subd. 9. Report made of change or correction of federal return Limitations
6.28on time for assessment for federal tax changes. (a) If a taxpayer is required to make a
6.29submits the report under or files the amended return as required by subdivision 7, and does
6.30report the change or files a copy of the amended return at any time within six years after
6.31the time period provided by subdivision 8, the commissioner may recompute and reassess
6.32the tax due, including a refund (1) within one year after the report or amended return is
6.33filed with the commissioner, notwithstanding any period of limitations to the contrary, or
7.1(2) within any other applicable period stated in this section, whichever period is longer.
7.2The period provided for the carryback of any amount of loss or credit is also extended as
7.3provided in this subdivision, notwithstanding any law to the contrary.
7.4(b) If a taxpayer fails to submit the report or file the amended return as required by
7.5subdivision 7, the commissioner may recompute the tax, including a refund, based on
7.6information available to the commissioner. The tax may be recomputed within six years
7.7after the time period provided by subdivision 8, notwithstanding any period of limitations
7.8to the contrary.
7.9(c) If the commissioner has completed a field audit of the taxpayer, and, but for this
7.10subdivision, the commissioner's time period to adjust the tax has expired, the additional
7.11tax due or refund is limited to only those changes that are required to be made to the
7.12return which relate to the changes made on the federal return. This subdivision does not
7.13apply to sales and use tax.
7.14For purposes of this subdivision and section 289A.42, subdivision 2, a "field audit"
7.15is the physical presence of examiners in the taxpayer's or taxpayer's representative's office
7.16conducting an examination of the taxpayer with the intention of issuing an assessment or
7.17notice of change in tax or which results in the issuing of an assessment or notice of change
7.18in tax. The examination may include inspecting a taxpayer's place of business, tangible
7.19personal property, equipment, computer systems and facilities, pertinent books, records,
7.20papers, vouchers, computer printouts, accounts, and documents.
7.21EFFECTIVE DATE.This section is effective the day following final enactment.

7.22    Sec. 9. Minnesota Statutes 2010, section 289A.42, subdivision 2, is amended to read:
7.23    Subd. 2. Federal extensions. When a taxpayer consents to an extension of time
7.24for the assessment of federal withholding or income taxes, the period in which the
7.25commissioner may recompute the tax is also extended, notwithstanding any period of
7.26limitations to the contrary, as follows:
7.27(1) for the periods provided in section 289A.38, subdivisions 8 and 9;
7.28(2) for six months following the expiration of the extended federal period of
7.29limitations when no change is made by the federal authority. If no change is made by the
7.30federal authority, and, but for this subdivision, the commissioner's time period to adjust
7.31the tax has expired, and if the commissioner has completed a field audit of the taxpayer, no
7.32additional changes resulting in additional tax due or a refund may be made. For purposes
7.33of this subdivision, "field audit" has the meaning given it in section 289A.38, subdivision 9.
7.34EFFECTIVE DATE.This section is effective the day following final enactment.

8.1    Sec. 10. Minnesota Statutes 2010, section 289A.60, subdivision 24, is amended to read:
8.2    Subd. 24. Penalty for failure to notify of federal change. If a person fails to
8.3report to the commissioner a change or correction of the person's federal return in the
8.4manner prescribed by section 289A.38, subdivision 7, and within the 180-day time period
8.5prescribed in section 289A.38, subdivision 7 8, there must be added to the tax an amount
8.6equal to ten percent of the amount of any underpayment of Minnesota tax attributable to
8.7the federal change.
8.8EFFECTIVE DATE.This section is effective the day following final enactment.

8.9    Sec. 11. Minnesota Statutes 2010, section 290.01, subdivision 6b, is amended to read:
8.10    Subd. 6b. Foreign operating corporation. The term "foreign operating
8.11corporation," when applied to a corporation, means a domestic corporation with the
8.12following characteristics:
8.13    (1) it is part of a unitary business at least one member of which is taxable in this state;
8.14    (2) it is not a foreign sales corporation under section 922 of the Internal Revenue
8.15Code, as amended through December 31, 1999, for the taxable year;
8.16    (3) it is not an interest charge domestic international sales corporation under sections
8.17992, 993, 994, and 995 of the Internal Revenue Code;
8.18    (4) either (i) it has in effect a valid election under section 936 of the Internal Revenue
8.19Code; or (ii) at least 80 percent of the gross income from all sources of the corporation in
8.20the tax year is active foreign business income; and
8.21    (5) for purposes of this subdivision, active foreign business income means gross
8.22income that is (i) derived from sources without the United States, as defined in subtitle A,
8.23chapter 1, subchapter N, part 1, of the Internal Revenue Code; and (ii) attributable to the
8.24active conduct of a trade or business in a foreign country.
8.25EFFECTIVE DATE.This section is effective for taxable years beginning after
8.26December 31, 2011.

8.27    Sec. 12. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19b,
8.28is amended to read:
8.29    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
8.30and trusts, there shall be subtracted from federal taxable income:
8.31    (1) net interest income on obligations of any authority, commission, or
8.32instrumentality of the United States to the extent includable in taxable income for federal
8.33income tax purposes but exempt from state income tax under the laws of the United States;
9.1    (2) if included in federal taxable income, the amount of any overpayment of income
9.2tax to Minnesota or to any other state, for any previous taxable year, whether the amount
9.3is received as a refund or as a credit to another taxable year's income tax liability;
9.4    (3) the amount paid to others, less the amount used to claim the credit allowed under
9.5section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
9.6to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
9.7transportation of each qualifying child in attending an elementary or secondary school
9.8situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
9.9resident of this state may legally fulfill the state's compulsory attendance laws, which
9.10is not operated for profit, and which adheres to the provisions of the Civil Rights Act
9.11of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
9.12tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
9.13"textbooks" includes books and other instructional materials and equipment purchased
9.14or leased for use in elementary and secondary schools in teaching only those subjects
9.15legally and commonly taught in public elementary and secondary schools in this state.
9.16Equipment expenses qualifying for deduction includes expenses as defined and limited in
9.17section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
9.18books and materials used in the teaching of religious tenets, doctrines, or worship, the
9.19purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
9.20or materials for, or transportation to, extracurricular activities including sporting events,
9.21musical or dramatic events, speech activities, driver's education, or similar programs. No
9.22deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
9.23the qualifying child's vehicle to provide such transportation for a qualifying child. For
9.24purposes of the subtraction provided by this clause, "qualifying child" has the meaning
9.25given in section 32(c)(3) of the Internal Revenue Code;
9.26    (4) income as provided under section 290.0802;
9.27    (5) to the extent included in federal adjusted gross income, income realized on
9.28disposition of property exempt from tax under section 290.491;
9.29    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
9.30of the Internal Revenue Code in determining federal taxable income by an individual
9.31who does not itemize deductions for federal income tax purposes for the taxable year, an
9.32amount equal to 50 percent of the excess of charitable contributions over $500 allowable
9.33as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
9.34under the provisions of Public Law 109-1 and Public Law 111-126;
9.35    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
9.36qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
10.1of subnational foreign taxes for the taxable year, but not to exceed the total subnational
10.2foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
10.3"federal foreign tax credit" means the credit allowed under section 27 of the Internal
10.4Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
10.5under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
10.6the extent they exceed the federal foreign tax credit;
10.7    (8) in each of the five tax years immediately following the tax year in which an
10.8addition is required under subdivision 19a, clause (7), or 19c, clause (15) (14), in the case
10.9of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
10.10of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
10.11the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
10.12subdivision 19c, clause (15) (14), in the case of a shareholder of an S corporation, minus
10.13the positive value of any net operating loss under section 172 of the Internal Revenue
10.14Code generated for the tax year of the addition. The resulting delayed depreciation
10.15cannot be less than zero;
10.16    (9) job opportunity building zone income as provided under section 469.316;
10.17    (10) to the extent included in federal taxable income, the amount of compensation
10.18paid to members of the Minnesota National Guard or other reserve components of the
10.19United States military for active service, excluding compensation for services performed
10.20under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
10.21service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
10.22(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
10.235b
, but "active service" excludes service performed in accordance with section 190.08,
10.24subdivision 3
;
10.25    (11) to the extent included in federal taxable income, the amount of compensation
10.26paid to Minnesota residents who are members of the armed forces of the United States
10.27or United Nations for active duty performed under United States Code, title 10; or the
10.28authority of the United Nations;
10.29    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
10.30qualified donor's donation, while living, of one or more of the qualified donor's organs
10.31to another person for human organ transplantation. For purposes of this clause, "organ"
10.32means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
10.33"human organ transplantation" means the medical procedure by which transfer of a human
10.34organ is made from the body of one person to the body of another person; "qualified
10.35expenses" means unreimbursed expenses for both the individual and the qualified donor
10.36for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
11.1may be subtracted under this clause only once; and "qualified donor" means the individual
11.2or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
11.3individual may claim the subtraction in this clause for each instance of organ donation for
11.4transplantation during the taxable year in which the qualified expenses occur;
11.5    (13) in each of the five tax years immediately following the tax year in which an
11.6addition is required under subdivision 19a, clause (8), or 19c, clause (16) (15), in the case
11.7of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
11.8of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause
11.9(16) (15), in the case of a shareholder of a corporation that is an S corporation, minus the
11.10positive value of any net operating loss under section 172 of the Internal Revenue Code
11.11generated for the tax year of the addition. If the net operating loss exceeds the addition for
11.12the tax year, a subtraction is not allowed under this clause;
11.13    (14) to the extent included in the federal taxable income of a nonresident of
11.14Minnesota, compensation paid to a service member as defined in United States Code, title
11.1510, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
11.16Act, Public Law 108-189, section 101(2);
11.17    (15) international economic development zone income as provided under section
11.18469.325 ;
11.19    (16) to the extent included in federal taxable income, the amount of national service
11.20educational awards received from the National Service Trust under United States Code,
11.21title 42, sections 12601 to 12604, for service in an approved Americorps National Service
11.22program;
11.23(17) to the extent included in federal taxable income, discharge of indebtedness
11.24income resulting from reacquisition of business indebtedness included in federal taxable
11.25income under section 108(i) of the Internal Revenue Code. This subtraction applies only
11.26to the extent that the income was included in net income in a prior year as a result of the
11.27addition under section 290.01, subdivision 19a, clause (16); and
11.28(18) the amount of the net operating loss allowed under section 290.095, subdivision
11.2911, paragraph (c).
11.30EFFECTIVE DATE.This section is effective for taxable years beginning after
11.31December 31, 2011.

11.32    Sec. 13. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19c,
11.33is amended to read:
11.34    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
11.35there shall be added to federal taxable income:
12.1    (1) the amount of any deduction taken for federal income tax purposes for income,
12.2excise, or franchise taxes based on net income or related minimum taxes, including but not
12.3limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
12.4another state, a political subdivision of another state, the District of Columbia, or any
12.5foreign country or possession of the United States;
12.6    (2) interest not subject to federal tax upon obligations of: the United States, its
12.7possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
12.8state, any of its political or governmental subdivisions, any of its municipalities, or any
12.9of its governmental agencies or instrumentalities; the District of Columbia; or Indian
12.10tribal governments;
12.11    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
12.12Revenue Code;
12.13    (4) the amount of any net operating loss deduction taken for federal income tax
12.14purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
12.15deduction under section 810 of the Internal Revenue Code;
12.16    (5) the amount of any special deductions taken for federal income tax purposes
12.17under sections 241 to 247 and 965 of the Internal Revenue Code;
12.18    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
12.19clause (a), that are not subject to Minnesota income tax;
12.20    (7) the amount of any capital losses deducted for federal income tax purposes under
12.21sections 1211 and 1212 of the Internal Revenue Code;
12.22    (8) the exempt foreign trade income of a foreign sales corporation under sections
12.23921(a) and 291 of the Internal Revenue Code;
12.24    (9) the amount of percentage depletion deducted under sections 611 through 614 and
12.25291 of the Internal Revenue Code;
12.26    (10) for certified pollution control facilities placed in service in a taxable year
12.27beginning before December 31, 1986, and for which amortization deductions were elected
12.28under section 169 of the Internal Revenue Code of 1954, as amended through December
12.2931, 1985, the amount of the amortization deduction allowed in computing federal taxable
12.30income for those facilities;
12.31    (11) the amount of any deemed dividend from a foreign operating corporation
12.32determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
12.33shall be reduced by the amount of the addition to income required by clauses (19), (20),
12.34(21), and (22), and (23);
13.1    (12) the amount of a partner's pro rata share of net income which does not flow
13.2through to the partner because the partnership elected to pay the tax on the income under
13.3section 6242(a)(2) of the Internal Revenue Code;
13.4    (13) the amount of net income excluded under section 114 of the Internal Revenue
13.5Code;
13.6    (14) (13) any increase in subpart F income, as defined in section 952(a) of the
13.7Internal Revenue Code, for the taxable year when subpart F income is calculated without
13.8regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
13.9    (15) (14) 80 percent of the depreciation deduction allowed under section
13.10168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
13.11the taxpayer has an activity that in the taxable year generates a deduction for depreciation
13.12under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
13.13year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
13.14allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
13.15of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
13.16over the amount of the loss from the activity that is not allowed in the taxable year. In
13.17succeeding taxable years when the losses not allowed in the taxable year are allowed, the
13.18depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
13.19    (16) (15) 80 percent of the amount by which the deduction allowed by section 179 of
13.20the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
13.21Revenue Code of 1986, as amended through December 31, 2003;
13.22    (17) (16) to the extent deducted in computing federal taxable income, the amount of
13.23the deduction allowable under section 199 of the Internal Revenue Code;
13.24    (18) (17) for taxable years beginning before January 1, 2013, the exclusion allowed
13.25under section 139A of the Internal Revenue Code for federal subsidies for prescription
13.26drug plans;
13.27    (19) (18) the amount of expenses disallowed under section 290.10, subdivision 2;
13.28    (20) (19) an amount equal to the interest and intangible expenses, losses, and
13.29costs paid, accrued, or incurred by any member of the taxpayer's unitary group to or for
13.30the benefit of a corporation that is a member of the taxpayer's unitary business group
13.31that qualifies as a foreign operating corporation. For purposes of this clause, intangible
13.32expenses and costs include:
13.33    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
13.34use, maintenance or management, ownership, sale, exchange, or any other disposition of
13.35intangible property;
14.1    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
14.2transactions;
14.3    (iii) royalty, patent, technical, and copyright fees;
14.4    (iv) licensing fees; and
14.5    (v) other similar expenses and costs.
14.6For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
14.7applications, trade names, trademarks, service marks, copyrights, mask works, trade
14.8secrets, and similar types of intangible assets.
14.9This clause does not apply to any item of interest or intangible expenses or costs paid,
14.10accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
14.11to such item of income to the extent that the income to the foreign operating corporation
14.12is income from sources without the United States as defined in subtitle A, chapter 1,
14.13subchapter N, part 1, of the Internal Revenue Code;
14.14    (21) (20) except as already included in the taxpayer's taxable income pursuant to
14.15clause (20) (19), any interest income and income generated from intangible property
14.16received or accrued by a foreign operating corporation that is a member of the taxpayer's
14.17unitary group. For purposes of this clause, income generated from intangible property
14.18includes:
14.19    (i) income related to the direct or indirect acquisition, use, maintenance or
14.20management, ownership, sale, exchange, or any other disposition of intangible property;
14.21    (ii) income from factoring transactions or discounting transactions;
14.22    (iii) royalty, patent, technical, and copyright fees;
14.23    (iv) licensing fees; and
14.24    (v) other similar income.
14.25For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
14.26applications, trade names, trademarks, service marks, copyrights, mask works, trade
14.27secrets, and similar types of intangible assets.
14.28This clause does not apply to any item of interest or intangible income received or accrued
14.29by a foreign operating corporation with respect to such item of income to the extent that
14.30the income is income from sources without the United States as defined in subtitle A,
14.31chapter 1, subchapter N, part 1, of the Internal Revenue Code;
14.32    (22) (21) the dividends attributable to the income of a foreign operating corporation
14.33that is a member of the taxpayer's unitary group in an amount that is equal to the dividends
14.34paid deduction of a real estate investment trust under section 561(a) of the Internal
15.1Revenue Code for amounts paid or accrued by the real estate investment trust to the
15.2foreign operating corporation;
15.3    (23) (22) the income of a foreign operating corporation that is a member of the
15.4taxpayer's unitary group in an amount that is equal to gains derived from the sale of real or
15.5personal property located in the United States;
15.6    (24) (23) for taxable years beginning before January 1, 2010, the additional amount
15.7allowed as a deduction for donation of computer technology and equipment under section
15.8170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
15.9(25) (24) discharge of indebtedness income resulting from reacquisition of business
15.10indebtedness and deferred under section 108(i) of the Internal Revenue Code.
15.11EFFECTIVE DATE.This section is effective for taxable years beginning after
15.12December 31, 2011.

15.13    Sec. 14. Minnesota Statutes 2010, section 290.01, subdivision 19d, is amended to read:
15.14    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
15.15corporations, there shall be subtracted from federal taxable income after the increases
15.16provided in subdivision 19c:
15.17    (1) the amount of foreign dividend gross-up added to gross income for federal
15.18income tax purposes under section 78 of the Internal Revenue Code;
15.19    (2) the amount of salary expense not allowed for federal income tax purposes due to
15.20claiming the work opportunity credit under section 51 of the Internal Revenue Code;
15.21    (3) any dividend (not including any distribution in liquidation) paid within the
15.22taxable year by a national or state bank to the United States, or to any instrumentality of
15.23the United States exempt from federal income taxes, on the preferred stock of the bank
15.24owned by the United States or the instrumentality;
15.25    (4) amounts disallowed for intangible drilling costs due to differences between
15.26this chapter and the Internal Revenue Code in taxable years beginning before January
15.271, 1987, as follows:
15.28    (i) to the extent the disallowed costs are represented by physical property, an amount
15.29equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
15.30subdivision 7
, subject to the modifications contained in subdivision 19e; and
15.31    (ii) to the extent the disallowed costs are not represented by physical property, an
15.32amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
15.33290.09, subdivision 8 ;
15.34    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
15.35Internal Revenue Code, except that:
16.1    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
16.2capital loss carrybacks shall not be allowed;
16.3    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
16.4a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
16.5allowed;
16.6    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
16.7capital loss carryback to each of the three taxable years preceding the loss year, subject to
16.8the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
16.9    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
16.10a capital loss carryover to each of the five taxable years succeeding the loss year to the
16.11extent such loss was not used in a prior taxable year and subject to the provisions of
16.12Minnesota Statutes 1986, section 290.16, shall be allowed;
16.13    (6) an amount for interest and expenses relating to income not taxable for federal
16.14income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
16.15expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
16.16291 of the Internal Revenue Code in computing federal taxable income;
16.17    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
16.18which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
16.19reasonable allowance for depletion based on actual cost. In the case of leases the deduction
16.20must be apportioned between the lessor and lessee in accordance with rules prescribed
16.21by the commissioner. In the case of property held in trust, the allowable deduction must
16.22be apportioned between the income beneficiaries and the trustee in accordance with the
16.23pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
16.24of the trust's income allocable to each;
16.25    (8) for certified pollution control facilities placed in service in a taxable year
16.26beginning before December 31, 1986, and for which amortization deductions were elected
16.27under section 169 of the Internal Revenue Code of 1954, as amended through December
16.2831, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
16.291986, section 290.09, subdivision 7;
16.30    (9) amounts included in federal taxable income that are due to refunds of income,
16.31excise, or franchise taxes based on net income or related minimum taxes paid by the
16.32corporation to Minnesota, another state, a political subdivision of another state, the
16.33District of Columbia, or a foreign country or possession of the United States to the extent
16.34that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
16.35clause (1), in a prior taxable year;
17.1    (10) 80 percent of royalties, fees, or other like income accrued or received from a
17.2foreign operating corporation or a foreign corporation which is part of the same unitary
17.3business as the receiving corporation, unless the income resulting from such payments or
17.4accruals is income from sources within the United States as defined in subtitle A, chapter
17.51, subchapter N, part 1, of the Internal Revenue Code;
17.6    (11) income or gains from the business of mining as defined in section 290.05,
17.7subdivision 1
, clause (a), that are not subject to Minnesota franchise tax;
17.8    (12) the amount of disability access expenditures in the taxable year which are not
17.9allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
17.10    (13) the amount of qualified research expenses not allowed for federal income tax
17.11purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
17.12the amount exceeds the amount of the credit allowed under section 290.068;
17.13    (14) the amount of salary expenses not allowed for federal income tax purposes due
17.14to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
17.15Code;
17.16    (15) for a corporation whose foreign sales corporation, as defined in section 922
17.17of the Internal Revenue Code, constituted a foreign operating corporation during any
17.18taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
17.19claiming the deduction under section 290.21, subdivision 4, for income received from
17.20the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
17.21income excluded under section 114 of the Internal Revenue Code, provided the income is
17.22not income of a foreign operating company;
17.23    (16) (15) any decrease in subpart F income, as defined in section 952(a) of the
17.24Internal Revenue Code, for the taxable year when subpart F income is calculated without
17.25regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
17.26    (17) (16) in each of the five tax years immediately following the tax year in which an
17.27addition is required under subdivision 19c, clause (15) (14), an amount equal to one-fifth
17.28of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
17.29amount of the addition made by the taxpayer under subdivision 19c, clause (15) (14). The
17.30resulting delayed depreciation cannot be less than zero;
17.31    (18) (17) in each of the five tax years immediately following the tax year in which an
17.32addition is required under subdivision 19c, clause (16) (15), an amount equal to one-fifth
17.33of the amount of the addition; and
17.34(19) (18) to the extent included in federal taxable income, discharge of indebtedness
17.35income resulting from reacquisition of business indebtedness included in federal taxable
17.36income under section 108(i) of the Internal Revenue Code. This subtraction applies only
18.1to the extent that the income was included in net income in a prior year as a result of the
18.2addition under section 290.01, subdivision 19c, clause (25) (24).
18.3EFFECTIVE DATE.This section is effective for taxable years beginning after
18.4December 31, 2011.

18.5    Sec. 15. Minnesota Statutes 2010, section 290.0921, subdivision 3, is amended to read:
18.6    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
18.7income" is Minnesota net income as defined in section 290.01, subdivision 19, and
18.8includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
18.9(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
18.10Minnesota tax return, the minimum tax must be computed on a separate company basis.
18.11If a corporation is part of a tax group filing a unitary return, the minimum tax must be
18.12computed on a unitary basis. The following adjustments must be made.
18.13(1) For purposes of the depreciation adjustments under section 56(a)(1) and
18.1456(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
18.15service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
18.16income tax purposes, including any modification made in a taxable year under section
18.17290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
18.18paragraph (c).
18.19For taxable years beginning after December 31, 2000, the amount of any remaining
18.20modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
18.21section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
18.22allowance in the first taxable year after December 31, 2000.
18.23(2) The portion of the depreciation deduction allowed for federal income tax
18.24purposes under section 168(k) of the Internal Revenue Code that is required as an addition
18.25under section 290.01, subdivision 19c, clause (15) (14), is disallowed in determining
18.26alternative minimum taxable income.
18.27(3) The subtraction for depreciation allowed under section 290.01, subdivision
18.2819d
, clause (17) (16), is allowed as a depreciation deduction in determining alternative
18.29minimum taxable income.
18.30(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
18.31of the Internal Revenue Code does not apply.
18.32(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
18.33Revenue Code does not apply.
18.34(6) The special rule for dividends from section 936 companies under section
18.3556(g)(4)(C)(iii) does not apply.
19.1(7) (6) The tax preference for depletion under section 57(a)(1) of the Internal
19.2Revenue Code does not apply.
19.3(8) (7) The tax preference for intangible drilling costs under section 57(a)(2) of the
19.4Internal Revenue Code must be calculated without regard to subparagraph (E) and the
19.5subtraction under section 290.01, subdivision 19d, clause (4).
19.6(9) (8) The tax preference for tax exempt interest under section 57(a)(5) of the
19.7Internal Revenue Code does not apply.
19.8(10) (9) The tax preference for charitable contributions of appreciated property
19.9under section 57(a)(6) of the Internal Revenue Code does not apply.
19.10(11) (10) For purposes of calculating the tax preference for accelerated depreciation
19.11or amortization on certain property placed in service before January 1, 1987, under section
19.1257(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
19.13deduction allowed under section 290.01, subdivision 19e.
19.14For taxable years beginning after December 31, 2000, the amount of any remaining
19.15modification made under section 290.01, subdivision 19e, not previously deducted is a
19.16depreciation or amortization allowance in the first taxable year after December 31, 2004.
19.17(12) (11) For purposes of calculating the adjustment for adjusted current earnings
19.18in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
19.19income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
19.20minimum taxable income as defined in this subdivision, determined without regard to the
19.21adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
19.22(13) (12) For purposes of determining the amount of adjusted current earnings
19.23under section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under
19.24section 56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign
19.25dividend gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1),
19.26(ii) the amount of refunds of income, excise, or franchise taxes subtracted as provided in
19.27section 290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other
19.28like income subtracted as provided in section 290.01, subdivision 19d, clause (10).
19.29(14) (13) Alternative minimum taxable income excludes the income from operating
19.30in a job opportunity building zone as provided under section 469.317.
19.31(15) (14) Alternative minimum taxable income excludes the income from operating
19.32in a biotechnology and health sciences industry zone as provided under section 469.337.
19.33(16) (15) Alternative minimum taxable income excludes the income from operating
19.34in an international economic development zone as provided under section 469.326.
19.35Items of tax preference must not be reduced below zero as a result of the
19.36modifications in this subdivision.
20.1EFFECTIVE DATE.This section is effective for taxable years beginning after
20.2December 31, 2011.

20.3    Sec. 16. Minnesota Statutes 2010, section 290.095, subdivision 3, is amended to read:
20.4    Subd. 3. Carryover. (a) A net operating loss incurred in a taxable year: (i)
20.5beginning after December 31, 1986, shall be a net operating loss carryover to each of the
20.615 taxable years following the taxable year of such loss; (ii) beginning before January 1,
20.71987, shall be a net operating loss carryover to each of the five taxable years following the
20.8taxable year of such loss subject to the provisions of Minnesota Statutes 1986, section
20.9290.095 ; and (iii) beginning before January 1, 1987, shall be a net operating loss carryback
20.10to each of the three taxable years preceding the loss year subject to the provisions of
20.11Minnesota Statutes 1986, section 290.095.
20.12(b) The entire amount of the net operating loss for any taxable year shall be carried to
20.13the earliest of the taxable years to which such loss may be carried. The portion of such loss
20.14which shall be carried to each of the other taxable years shall be the excess, if any, of the
20.15amount of such loss over the sum of the taxable net income, adjusted by the modifications
20.16specified in subdivision 4, for each of the taxable years to which such loss may be carried.
20.17(c) Where a corporation apportions its income under the provisions of section
20.18290.191 , the net operating loss deduction incurred in any taxable year shall be allowed to
20.19the extent of the apportionment ratio of the loss year, plus the loss assigned by section
20.20290.17, subdivision 2.
20.21(d) The provisions of sections 381, 382, and 384 of the Internal Revenue Code apply
20.22to carryovers in certain corporate acquisitions and special limitations on net operating loss
20.23carryovers. The limitation amount determined under section 382 shall be applied to net
20.24income, before apportionment, in each post change year to which a loss is carried.
20.25EFFECTIVE DATE.This section is effective the day following final enactment.

20.26    Sec. 17. Minnesota Statutes 2010, section 290.17, subdivision 4, is amended to read:
20.27    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
20.28within this state or partly within and partly without this state is part of a unitary business,
20.29the entire income of the unitary business is subject to apportionment pursuant to section
20.30290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
20.31business is considered to be derived from any particular source and none may be allocated
20.32to a particular place except as provided by the applicable apportionment formula. The
20.33provisions of this subdivision do not apply to business income subject to subdivision 5,
21.1income of an insurance company, or income of an investment company determined under
21.2section 290.36.
21.3(b) The term "unitary business" means business activities or operations which
21.4result in a flow of value between them. The term may be applied within a single legal
21.5entity or between multiple entities and without regard to whether each entity is a sole
21.6proprietorship, a corporation, a partnership or a trust.
21.7(c) Unity is presumed whenever there is unity of ownership, operation, and use,
21.8evidenced by centralized management or executive force, centralized purchasing,
21.9advertising, accounting, or other controlled interaction, but the absence of these
21.10centralized activities will not necessarily evidence a nonunitary business. Unity is also
21.11presumed when business activities or operations are of mutual benefit, dependent upon or
21.12contributory to one another, either individually or as a group.
21.13(d) Where a business operation conducted in Minnesota is owned by a business
21.14entity that carries on business activity outside the state different in kind from that
21.15conducted within this state, and the other business is conducted entirely outside the state, it
21.16is presumed that the two business operations are unitary in nature, interrelated, connected,
21.17and interdependent unless it can be shown to the contrary.
21.18(e) Unity of ownership is does not deemed to exist when a corporation is two or
21.19more corporations are involved unless that corporation is a member of a group of two or
21.20more business entities and more than 50 percent of the voting stock of each member of
21.21the group corporation is directly or indirectly owned by a common owner or by common
21.22owners, either corporate or noncorporate, or by one or more of the member corporations
21.23of the group. For this purpose, the term "voting stock" shall include membership interests
21.24of mutual insurance holding companies formed under section 66A.40.
21.25(f) The net income and apportionment factors under section 290.191 or 290.20 of
21.26foreign corporations and other foreign entities which are part of a unitary business shall
21.27not be included in the net income or the apportionment factors of the unitary business.
21.28A foreign corporation or other foreign entity which is required to file a return under this
21.29chapter shall file on a separate return basis. The net income and apportionment factors
21.30under section 290.191 or 290.20 of foreign operating corporations shall not be included in
21.31the net income or the apportionment factors of the unitary business except as provided in
21.32paragraph (g).
21.33(g) The adjusted net income of a foreign operating corporation shall be deemed to
21.34be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
21.35proportion to each shareholder's ownership, with which such corporation is engaged in
22.1a unitary business. Such deemed dividend shall be treated as a dividend under section
22.2290.21, subdivision 4 .
22.3Dividends actually paid by a foreign operating corporation to a corporate shareholder
22.4which is a member of the same unitary business as the foreign operating corporation shall
22.5be eliminated from the net income of the unitary business in preparing a combined report
22.6for the unitary business. The adjusted net income of a foreign operating corporation
22.7shall be its net income adjusted as follows:
22.8(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
22.9Rico, or a United States possession or political subdivision of any of the foregoing shall
22.10be a deduction; and
22.11(2) the subtraction from federal taxable income for payments received from foreign
22.12corporations or foreign operating corporations under section 290.01, subdivision 19d,
22.13clause (10), shall not be allowed.
22.14If a foreign operating corporation incurs a net loss, neither income nor deduction
22.15from that corporation shall be included in determining the net income of the unitary
22.16business.
22.17(h) For purposes of determining the net income of a unitary business and the factors
22.18to be used in the apportionment of net income pursuant to section 290.191 or 290.20, there
22.19must be included only the income and apportionment factors of domestic corporations or
22.20other domestic entities other than foreign operating corporations that are determined to
22.21be part of the unitary business pursuant to this subdivision, notwithstanding that foreign
22.22corporations or other foreign entities might be included in the unitary business.
22.23(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter
22.24that are connected with or allocable against dividends, deemed dividends described
22.25in paragraph (g), or royalties, fees, or other like income described in section 290.01,
22.26subdivision 19d
, clause (10), shall not be disallowed.
22.27(j) Each corporation or other entity, except a sole proprietorship, that is part of a
22.28unitary business must file combined reports as the commissioner determines. On the
22.29reports, all intercompany transactions between entities included pursuant to paragraph
22.30(h) must be eliminated and the entire net income of the unitary business determined in
22.31accordance with this subdivision is apportioned among the entities by using each entity's
22.32Minnesota factors for apportionment purposes in the numerators of the apportionment
22.33formula and the total factors for apportionment purposes of all entities included pursuant
22.34to paragraph (h) in the denominators of the apportionment formula.
23.1(k) If a corporation has been divested from a unitary business and is included in a
23.2combined report for a fractional part of the common accounting period of the combined
23.3report:
23.4(1) its income includable in the combined report is its income incurred for that part
23.5of the year determined by proration or separate accounting; and
23.6(2) its sales, property, and payroll included in the apportionment formula must
23.7be prorated or accounted for separately.
23.8EFFECTIVE DATE.This section is effective the day following final enactment.

23.9ARTICLE 2
23.10DEPARTMENT POLICY AND TECHNICAL: ESTATE TAXES

23.11    Section 1. Minnesota Statutes 2010, section 289A.10, is amended by adding a
23.12subdivision to read:
23.13    Subd. 1a. Recapture tax return required. If a disposition or cessation as provided
23.14by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as
23.15defined under section 291.03, subdivision 8, paragraph (c), or personal representative of
23.16the decedent's estate must submit a recapture tax return to the commissioner.
23.17EFFECTIVE DATE.This section is effective for estates of decedents dying after
23.18June 30, 2011.

23.19    Sec. 2. Minnesota Statutes 2010, section 289A.12, is amended by adding a subdivision
23.20to read:
23.21    Subd. 18. Returns by qualified heirs. Within 24 months and within 36 months
23.22after a decedent's death, a qualified heir, as defined under section 291.03, subdivision 8,
23.23paragraph (c), must file a return with the commissioner relating to the qualified property
23.24received from the decedent.
23.25EFFECTIVE DATE.This section is effective for estates of decedents dying after
23.26June 30, 2011.

23.27    Sec. 3. Minnesota Statutes 2010, section 289A.18, is amended by adding a subdivision
23.28to read:
23.29    Subd. 3a. Recapture tax return. A recapture tax return is due within six months
23.30after the date of the disposition or cessation as provided by section 291.03, subdivision
23.3111, paragraph (a).
24.1EFFECTIVE DATE.This section is effective for estates of decedents dying after
24.2June 30, 2011.

24.3    Sec. 4. Minnesota Statutes 2010, section 289A.20, subdivision 3, is amended to read:
24.4    Subd. 3. Estate tax. Taxes imposed by chapter 291 section 291.03, subdivision 1,
24.5take effect at and upon the death of the person whose estate is subject to taxation and are
24.6due and payable on or before the expiration of nine months from that death.
24.7EFFECTIVE DATE.This section is effective for estates of decedents dying after
24.8June 30, 2011.

24.9    Sec. 5. Minnesota Statutes 2010, section 289A.20, is amended by adding a subdivision
24.10to read:
24.11    Subd. 3a. Recapture tax. Taxes imposed by section 291.03, subdivision 11,
24.12paragraph (b), are due and payable on or before the expiration of six months from the date
24.13of disposition or cessation as provided by section 291.03, subdivision 11, paragraph (a).
24.14EFFECTIVE DATE.This section is effective for estates of decedents dying after
24.15June 30, 2011.

24.16    Sec. 6. Minnesota Statutes 2011 Supplement, section 291.03, subdivision 8, is
24.17amended to read:
24.18    Subd. 8. Definitions. (a) For purposes of this section, the following terms have the
24.19meanings given in this subdivision.
24.20(b) "Family member" means a family member as defined in section 2032A(e)(2) of
24.21the Internal Revenue Code or a trust whose present beneficiaries are all family members as
24.22defined in section 2032A(e)(2) of the Internal Revenue Code.
24.23(c) "Qualified heir" means a family member who acquired qualified property from
24.24upon the death of the decedent and satisfies the requirement under subdivision 9, clause
24.25(6) (8), or subdivision 10, clause (4) (5), for the property.
24.26(d) "Qualified property" means qualified small business property under subdivision
24.279 and qualified farm property under subdivision 10.
24.28EFFECTIVE DATE.This section is effective for estates of decedents dying after
24.29June 30, 2011.

24.30    Sec. 7. Minnesota Statutes 2011 Supplement, section 291.03, subdivision 9, is
24.31amended to read:
25.1    Subd. 9. Qualified small business property. Property satisfying all of the following
25.2requirements is qualified small business property:
25.3(1) The value of the property was included in the federal adjusted taxable estate.
25.4(2) The property consists of the assets of a trade or business or shares of stock or
25.5other ownership interests in a corporation or other entity engaged in a trade or business.
25.6The decedent or the decedent's spouse must have materially participated in the trade or
25.7business within the meaning of section 469 of the Internal Revenue Code during the
25.8taxable year that ended before the date of the decedent's death. Shares of stock in a
25.9corporation or an ownership interest in another type of entity do not qualify under this
25.10subdivision if the shares or ownership interests are traded on a public stock exchange at
25.11any time during the three-year period ending on the decedent's date of death. For purposes
25.12of this subdivision, an ownership interest includes those interests the decedent is deemed
25.13to own pursuant to sections 2036, 2037, and 2038 of the Internal Revenue Code.
25.14(3) During the decedent's taxable year that ended before the decedent's death, the
25.15trade or business must not have been a passive activity within the meaning of section
25.16469(c) of the Internal Revenue Code and the decedent or decedent's spouse must have
25.17materially participated in the trade or business within the meaning of section 469(h) of the
25.18Internal Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and
25.19any other provision provided by Treasury Department regulation that substitutes material
25.20participation in prior taxable years for material participation in the taxable year that ended
25.21before the decedent's death.
25.22(3) (4) The gross annual sales of the trade or business were $10,000,000 or less for
25.23the last taxable year that ended before the date of the death of the decedent.
25.24(4) (5) The property does not consist of cash or, cash equivalents, publicly traded
25.25securities, or assets not used in the operation of the trade or business. For property
25.26consisting of shares of stock or other ownership interests in an entity, the amount value of
25.27cash or, cash equivalents, publicly traded securities, or assets not used in the operation of
25.28the trade or business held by the corporation or other entity must be deducted from the
25.29value of the property qualifying under this subdivision in proportion to the decedent's
25.30share of ownership of the entity on the date of death.
25.31(6) The property does not consist of agricultural land as defined by section 500.24,
25.32subdivision 2, paragraph (g). For property consisting of shares of stock or other ownership
25.33interests in an entity, the value of agricultural land held by the corporation or other entity
25.34must be deducted from the value of the property qualifying under this subdivision in
25.35proportion to the decedent's share of ownership of the entity on the date of death.
26.1(5) (7) The decedent continuously owned the property, including property the
26.2decedent is deemed to own pursuant to sections 2036, 2037, and 2038 of the Internal
26.3Revenue Code, for the three-year period ending on the date of death of the decedent. In
26.4the case of a sole proprietor, if the property replaced similar property within the three-year
26.5period, the replacement property will be treated as having been owned for the three-year
26.6period ending on the date of death of the decedent.
26.7(6) A family member continuously uses the property in the operation of the trade or
26.8business for three years following the date of death of the decedent.
26.9(8) For three years following the date of death of the decedent, the trade or business
26.10is not a passive activity within the meaning of section 469(c) of the Internal Revenue
26.11Code and a family member materially participates in the operation of the trade or business
26.12within the meaning of section 469(h) of the Internal Revenue Code, excluding section
26.13469(h)(3) of the Internal Revenue Code and any other provision provided by Treasury
26.14Department regulation that substitutes material participation in prior taxable years for
26.15material participation in the three years following the date of death of the decedent.
26.16(7) (9) The estate and the qualified heir elect to treat the property as qualified small
26.17business property and agree, in the form prescribed by the commissioner, to pay the
26.18recapture tax under subdivision 11, if applicable.
26.19EFFECTIVE DATE.This section is effective for estates of decedents dying after
26.20June 30, 2011.

26.21    Sec. 8. Minnesota Statutes 2011 Supplement, section 291.03, subdivision 10, is
26.22amended to read:
26.23    Subd. 10. Qualified farm property. Property satisfying all of the following
26.24requirements is qualified farm property:
26.25(1) The value of the property was included in the federal adjusted taxable estate.
26.26(2) The property consists of agricultural land as defined by section 500.24,
26.27subdivision 2, paragraph (g), and owned by a farm meeting the requirements of person
26.28or entity that is not excluded from owning agricultural land by section 500.24, and was
26.29classified for property tax purposes as the homestead of the decedent or the decedent's
26.30spouse or both under section 273.124, and as class 2a property under section 273.13,
26.31subdivision 23
.
26.32(3) The decedent continuously owned the For property for taxes payable in the
26.33three-year period ending on the date year of the decedent's death of, the decedent property
26.34was classified for property tax purposes as the homestead of the decedent or the decedent's
27.1spouse or both under section 273.124, and as class 2a property under section 273.13,
27.2subdivision 23.
27.3(4) A family member The decedent continuously uses the property in the operation
27.4of the trade or business owned the property, including property the decedent is deemed
27.5to own pursuant to sections 2036, 2307, and 2308 of the Internal Revenue Code, for the
27.6three-year period ending on the date of death of the decedent, either by ownership of the
27.7agricultural land or pursuant to holding an interest in an entity that is not excluded from
27.8owning agricultural land by section 500.24.
27.9(5) The property is classified for property tax purposes as class 2a property under
27.10section 273.13, subdivision 23, for three years following the date of death of the decedent.
27.11(5) (6) The estate and the qualified heir elect to treat the property as qualified farm
27.12property and agree, in a form prescribed by the commissioner, to pay the recapture tax
27.13under subdivision 11, if applicable.
27.14EFFECTIVE DATE.This section is effective for estates of decedents dying after
27.15June 30, 2011.

27.16    Sec. 9. Minnesota Statutes 2011 Supplement, section 291.03, subdivision 11, is
27.17amended to read:
27.18    Subd. 11. Recapture tax. (a) If, within three years after the decedent's death and
27.19before the death of the qualified heir, the qualified heir disposes of any interest in the
27.20qualified property, other than by a disposition to a family member, or a family member
27.21ceases to use the qualified property which was acquired or passed from the decedent
27.22satisfy the requirement under subdivision 9, clause (8); or 10, clause (5), an additional
27.23estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir
27.24replaces qualified small business property excluded under subdivision 9 with similar
27.25property, then the qualified heir will not be treated as having disposed of an interest in the
27.26qualified property.
27.27(b) The amount of the additional tax equals the amount of the exclusion claimed by
27.28the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
27.29(c) The additional tax under this subdivision is due on the day which is six months
27.30after the date of the disposition or cessation in paragraph (a).
27.31EFFECTIVE DATE.This section is effective for estates of decedents dying after
27.32June 30, 2011.

28.1ARTICLE 3
28.2DEPARTMENT POLICY AND TECHNICAL: PROPERTY TAX

28.3    Section 1. Minnesota Statutes 2010, section 13.4965, subdivision 3, is amended to read:
28.4    Subd. 3. Homestead and other applications. The classification and disclosure of
28.5certain information collected to determine eligibility of property for a homestead or other
28.6classification or benefit under section 273.13 are governed by section sections 273.124,
28.7subdivision subdivisions 13, 13a, 13c, and 13d, and 273.1315.
28.8EFFECTIVE DATE.This section is effective the day following final enactment.

28.9    Sec. 2. Minnesota Statutes 2010, section 270.077, is amended to read:
28.10270.077 TAXES CREDITED TO STATE AIRPORTS FUND.
28.11All taxes levied under sections 270.071 to 270.079 must be collected by the
28.12commissioner and credited to the state airports fund created in section 360.017.
28.13EFFECTIVE DATE.This section is effective for reports filed on July 1, 2012,
28.14and thereafter.

28.15    Sec. 3. Minnesota Statutes 2010, section 270.41, subdivision 5, is amended to read:
28.16    Subd. 5. Prohibited activity. A licensed assessor or other person employed by an
28.17assessment jurisdiction or contracting with an assessment jurisdiction for the purpose
28.18of valuing or classifying property for property tax purposes is prohibited from making
28.19appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report
28.20as defined in section 82B.021, subdivisions 2, 4, 6, and 7, on any property within the
28.21assessment jurisdiction where the individual is employed or performing the duties of the
28.22assessor under contract. Violation of this prohibition shall result in immediate revocation
28.23of the individual's license to assess property for property tax purposes. This prohibition
28.24must not be construed to prohibit an individual from carrying out any duties required
28.25for the proper assessment of property for property tax purposes or performing duties
28.26enumerated in section 273.061, subdivision 7 or 8. If a formal resolution has been adopted
28.27by the governing body of a governmental unit, which specifies the purposes for which
28.28such work will be done, this prohibition does not apply to appraisal activities undertaken
28.29on behalf of and at the request of the governmental unit that has employed or contracted
28.30with the individual. The resolution may only allow appraisal activities which are related to
28.31condemnations, right-of-way acquisitions, land exchanges, or special assessments.
29.1EFFECTIVE DATE.This section is effective the day following final enactment.

29.2    Sec. 4. Minnesota Statutes 2011 Supplement, section 270C.34, subdivision 1, is
29.3amended to read:
29.4    Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any
29.5penalty or interest that is imposed by a law administered by the commissioner, or imposed
29.6by section 270.0725, subdivision 1 or 2, or 270.075, as a result of the late payment of tax
29.7or late filing of a return, or any part of an additional tax charge under section 289A.25,
29.8subdivision 2
, or 289A.26, subdivision 4, if the failure to timely pay the tax or failure
29.9to timely file the return is due to reasonable cause, or if the taxpayer is located in a
29.10presidentially declared disaster or in a presidentially declared state of emergency area or
29.11in an area declared to be in a state of emergency by the governor under section 12.31.
29.12    (b) The commissioner shall abate any part of a penalty or additional tax charge
29.13under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous
29.14advice given to the taxpayer in writing by an employee of the department acting in
29.15an official capacity, if the advice:
29.16    (1) was reasonably relied on and was in response to a specific written request of the
29.17taxpayer; and
29.18    (2) was not the result of failure by the taxpayer to provide adequate or accurate
29.19information.
29.20EFFECTIVE DATE.This section is effective the day following final enactment.

29.21    Sec. 5. Minnesota Statutes 2010, section 272.01, subdivision 2, is amended to read:
29.22    Subd. 2. Exempt property used by private entity for profit. (a) When any real or
29.23personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is
29.24leased, loaned, or otherwise made available and used by a private individual, association,
29.25or corporation in connection with a business conducted for profit, there shall be imposed a
29.26tax, for the privilege of so using or possessing such real or personal property, in the same
29.27amount and to the same extent as though the lessee or user was the owner of such property.
29.28    (b) The tax imposed by this subdivision shall not apply to:
29.29    (1) property leased or used as a concession in or relative to the use in whole
29.30or part of a public park, market, fairgrounds, port authority, economic development
29.31authority established under chapter 469, municipal auditorium, municipal parking facility,
29.32municipal museum, or municipal stadium;
29.33    (2) property of an airport owned by a city, town, county, or group thereof which is:
29.34    (i) leased to or used by any person or entity including a fixed base operator; and
30.1    (ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods,
30.2services, or facilities to the airport or general public;
30.3the exception from taxation provided in this clause does not apply to:
30.4    (i) property located at an airport owned or operated by the Metropolitan Airports
30.5Commission or by a city of over 50,000 population according to the most recent federal
30.6census or such a city's airport authority; or
30.7    (ii) hangars leased by a private individual, association, or corporation in connection
30.8with a business conducted for profit other than an aviation-related business;
30.9    (3) property constituting or used as a public pedestrian ramp or concourse in
30.10connection with a public airport;
30.11    (4) property constituting or used as a passenger check-in area or ticket sale counter,
30.12boarding area, or luggage claim area in connection with a public airport but not the
30.13airports owned or operated by the Metropolitan Airports Commission or cities of over
30.1450,000 population or an airport authority therein. Real estate owned by a municipality
30.15in connection with the operation of a public airport and leased or used for agricultural
30.16purposes is not exempt;
30.17    (5) property leased, loaned, or otherwise made available to a private individual,
30.18corporation, or association under a cooperative farming agreement made pursuant to
30.19section 97A.135; or
30.20    (6) property leased, loaned, or otherwise made available to a private individual,
30.21corporation, or association under section 272.68, subdivision 4.
30.22    (c) Taxes imposed by this subdivision are payable as in the case of personal property
30.23taxes and shall be assessed to the lessees or users of real or personal property in the same
30.24manner as taxes assessed to owners of real or personal property, except that such taxes
30.25shall not become a lien against the property. When due, the taxes shall constitute a debt
30.26due from the lessee or user to the state, township, city, county, and school district for
30.27which the taxes were assessed and shall be collected in the same manner as personal
30.28property taxes. If property subject to the tax imposed by this subdivision is leased or used
30.29jointly by two or more persons, each lessee or user shall be jointly and severally liable for
30.30payment of the tax.
30.31    (d) The tax on real property of the federal government, the state or any of its political
30.32subdivisions that is leased by a private individual, association, or corporation and becomes
30.33taxable under this subdivision or other provision of law must be assessed and collected as
30.34a personal property assessment. The taxes do not become a lien against the real property.
30.35EFFECTIVE DATE.This section is effective the day following final enactment.

31.1    Sec. 6. Minnesota Statutes 2010, section 272.03, subdivision 9, is amended to read:
31.2    Subd. 9. Person. "Person" includes means an individual, association, estate, trust,
31.3partnership, firm, company, or corporation.
31.4EFFECTIVE DATE.This section is effective the day following final enactment.

31.5    Sec. 7. Minnesota Statutes 2011 Supplement, section 273.114, subdivision 6, is
31.6amended to read:
31.7    Subd. 6. Additional taxes. (a) When real property which is being, or has been
31.8valued and assessed under this section is sold, transferred, or no longer qualifies under
31.9subdivision 2, the portion sold, transferred, or no longer qualifying shall be subject to
31.10additional taxes in the amount equal to the difference between the taxes determined in
31.11accordance with subdivision 3 and the amount determined under subdivision 4, provided
31.12that the amount determined under subdivision 4 shall not be greater than it would have
31.13been had the actual bona fide sale price of the real property at an arm's-length transaction
31.14been used in lieu of the market value determined under subdivision 4. The additional taxes
31.15shall be extended against the property on the tax list for taxes payable in the current year,
31.16provided that no interest or penalties shall be levied on the additional taxes if timely paid
31.17and provided that the additional taxes shall only be levied with respect to the current year
31.18plus two prior years that the property has been valued and assessed under this section.
31.19(b) In the case of a sale or transfer, the additional taxes under paragraph (a) shall not
31.20be extended against the property if the new owner submits a successful application by the
31.21later of May 1 of the current year or 30 days after the sale or transfer.
31.22(c) For the purposes of this section, the following events do not constitute a sale or
31.23transfer for property that qualified under subdivision 2 prior to the event:
31.24(1) death of a property owner when the surviving owners retain ownership of the
31.25property;
31.26(2) divorce of a married couple when one of the spouses retains ownership of the
31.27property;
31.28(3) marriage of a single property owner when that owner retains ownership of the
31.29property in whole or in part;
31.30(4) the organization or reorganization of a farm ownership entity that is not prohibited
31.31from owning agricultural land in this state under section 500.24, if all owners maintain the
31.32same beneficial interest both before and after the organization or reorganization; and
31.33(5) transfer of the property to a trust or trustee, provided that the individual owners
31.34of the property are the grantors of the trust and they maintain the same beneficial interest
31.35both before and after placement of the property in trust.
32.1EFFECTIVE DATE.This section is effective the day following final enactment.

32.2    Sec. 8. Minnesota Statutes 2010, section 273.124, subdivision 13, is amended to read:
32.3    Subd. 13. Homestead application. (a) A person who meets the homestead
32.4requirements under subdivision 1 must file a homestead application with the county
32.5assessor to initially obtain homestead classification.
32.6    (b) The format and contents of a uniform homestead application shall be prescribed
32.7by the commissioner of revenue. The application must clearly inform the taxpayer that
32.8this application must be signed by all owners who occupy the property or by the qualifying
32.9relative and returned to the county assessor in order for the property to receive homestead
32.10treatment.
32.11    (c) Every property owner applying for homestead classification must furnish to the
32.12county assessor the Social Security number of each occupant who is listed as an owner
32.13of the property on the deed of record, the name and address of each owner who does not
32.14occupy the property, and the name and Social Security number of each owner's spouse who
32.15occupies the property. The application must be signed by each owner who occupies the
32.16property and by each owner's spouse who occupies the property, or, in the case of property
32.17that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
32.18    If a property owner occupies a homestead, the property owner's spouse may not
32.19claim another property as a homestead unless the property owner and the property owner's
32.20spouse file with the assessor an affidavit or other proof required by the assessor stating that
32.21the property qualifies as a homestead under subdivision 1, paragraph (e).
32.22    Owners or spouses occupying residences owned by their spouses and previously
32.23occupied with the other spouse, either of whom fail to include the other spouse's name
32.24and Social Security number on the homestead application or provide the affidavits or
32.25other proof requested, will be deemed to have elected to receive only partial homestead
32.26treatment of their residence. The remainder of the residence will be classified as
32.27nonhomestead residential. When an owner or spouse's name and Social Security number
32.28appear on homestead applications for two separate residences and only one application is
32.29signed, the owner or spouse will be deemed to have elected to homestead the residence for
32.30which the application was signed.
32.31    The Social Security numbers, state or federal tax returns or tax return information,
32.32including the federal income tax schedule F, required by this section, or section 273.13,
32.33and affidavits or other proofs of the property owners and spouses submitted under this
32.34or another section to support a claim for a property tax homestead classification or other
32.35classification or benefit under section 273.13, are private data on individuals as defined by
33.1section 13.02, subdivision 12, or nonpublic data as defined in section 13.02, subdivision 9,
33.2but, notwithstanding that section, the private and nonpublic data may be disclosed to the
33.3commissioner of revenue, or, for purposes of proceeding under the Revenue Recapture
33.4Act to recover personal property taxes owing, to the county treasurer.
33.5    (d) If residential real estate is occupied and used for purposes of a homestead by a
33.6relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
33.7order for the property to receive homestead status, a homestead application must be filed
33.8with the assessor. The Social Security number of each relative and spouse of a relative
33.9occupying the property shall be required on the homestead application filed under this
33.10subdivision. If a different relative of the owner subsequently occupies the property, the
33.11owner of the property must notify the assessor within 30 days of the change in occupancy.
33.12The Social Security number of a relative or relative's spouse occupying the property
33.13is private data on individuals as defined by section 13.02, subdivision 12, but may be
33.14disclosed to the commissioner of revenue, or, for the purposes of proceeding under the
33.15Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
33.16    (e) The homestead application shall also notify the property owners that the
33.17application filed under this section will not be mailed annually and that if the property
33.18is granted homestead status for any assessment year, that same property shall remain
33.19classified as homestead until the property is sold or transferred to another person, or
33.20the owners, the spouse of the owner, or the relatives no longer use the property as their
33.21homestead. Upon the sale or transfer of the homestead property, a certificate of value must
33.22be timely filed with the county auditor as provided under section 272.115. Failure to
33.23notify the assessor within 30 days that the property has been sold, transferred, or that the
33.24owner, the spouse of the owner, or the relative is no longer occupying the property as a
33.25homestead, shall result in the penalty provided under this subdivision and the property
33.26will lose its current homestead status.
33.27    (f) If the homestead application is not returned within 30 days, the county will send a
33.28second application to the present owners of record. The notice of proposed property taxes
33.29prepared under section 275.065, subdivision 3, shall reflect the property's classification. If
33.30a homestead application has not been filed with the county by December 15, the assessor
33.31shall classify the property as nonhomestead for the current assessment year for taxes
33.32payable in the following year, provided that the owner may be entitled to receive the
33.33homestead classification by proper application under section 375.192.
33.34    Subd. 13a. Occupant list. (g) At the request of the commissioner, each county
33.35must give the commissioner a list that includes the name and Social Security number
33.36of each occupant of homestead property who is the property owner, property owner's
34.1spouse, qualifying relative of a property owner, or a spouse of a qualifying relative. The
34.2commissioner shall use the information provided on the lists as appropriate under the law,
34.3including for the detection of improper claims by owners, or relatives of owners, under
34.4chapter 290A.
34.5    Subd. 13b. Improper homestead. (h) (a) If the commissioner finds that a
34.6property owner may be claiming a fraudulent homestead, the commissioner shall notify
34.7the appropriate counties. Within 90 days of the notification, the county assessor shall
34.8investigate to determine if the homestead classification was properly claimed. If the
34.9property owner does not qualify, the county assessor shall notify the county auditor who
34.10will determine the amount of homestead benefits that had been improperly allowed. For the
34.11purpose of this section subdivision, "homestead benefits" means the tax reduction resulting
34.12from the classification as a homestead under section 273.13, the taconite homestead credit
34.13under section 273.135, the residential homestead and agricultural homestead credits under
34.14section 273.1384, and the supplemental homestead credit under section 273.1391.
34.15    The county auditor shall send a notice to the person who owned the affected property
34.16at the time the homestead application related to the improper homestead was filed,
34.17demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
34.18of the homestead benefits. The person notified may appeal the county's determination
34.19by serving copies of a petition for review with county officials as provided in section
34.20278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax
34.21Court within 60 days of the date of the notice from the county. Procedurally, the appeal
34.22is governed by the provisions in chapter 271 which apply to the appeal of a property tax
34.23assessment or levy, but without requiring any prepayment of the amount in controversy. If
34.24the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
34.25has been filed, the county auditor shall certify the amount of taxes and penalty to the county
34.26treasurer. The county treasurer will add interest to the unpaid homestead benefits and
34.27penalty amounts at the rate provided in section 279.03 for real property taxes becoming
34.28delinquent in the calendar year during which the amount remains unpaid. Interest may be
34.29assessed for the period beginning 60 days after demand for payment was made.
34.30    If the person notified is the current owner of the property, the treasurer may add the
34.31total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
34.32otherwise payable on the property by including the amounts on the property tax statements
34.33under section 276.04, subdivision 3. The amounts added under this paragraph to the ad
34.34valorem taxes shall include interest accrued through December 31 of the year preceding
34.35the taxes payable year for which the amounts are first added. These amounts, when added
35.1to the property tax statement, become subject to all the laws for the enforcement of real or
35.2personal property taxes for that year, and for any subsequent year.
35.3    If the person notified is not the current owner of the property, the treasurer may
35.4collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
35.5the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment
35.6of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
35.7tax obligations of the person who owned the property at the time the application related
35.8to the improperly allowed homestead was filed. The treasurer may relieve a prior owner
35.9of personal liability for the homestead benefits, penalty, interest, and costs, and instead
35.10extend those amounts on the tax lists against the property as provided in this paragraph
35.11to the extent that the current owner agrees in writing. On all demands, billings, property
35.12tax statements, and related correspondence, the county must list and state separately the
35.13amounts of homestead benefits, penalty, interest and costs being demanded, billed or
35.14assessed.
35.15    (i) (b) Any amount of homestead benefits recovered by the county from the property
35.16owner shall be distributed to the county, city or town, and school district where the
35.17property is located in the same proportion that each taxing district's levy was to the total
35.18of the three taxing districts' levy for the current year. Any amount recovered attributable
35.19to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
35.20deposited in the taconite property tax relief account. Any amount recovered that is
35.21attributable to supplemental homestead credit is to be transmitted to the commissioner of
35.22revenue for deposit in the general fund of the state treasury. The total amount of penalty
35.23collected must be deposited in the county general fund.
35.24    (j) (c) If a property owner has applied for more than one homestead and the county
35.25assessors cannot determine which property should be classified as homestead, the county
35.26assessors will refer the information to the commissioner. The commissioner shall make
35.27the determination and notify the counties within 60 days.
35.28    Subd. 13c. Property lists. (k) In addition to lists of homestead properties, the
35.29commissioner may ask the counties to furnish lists of all properties and the record owners.
35.30The Social Security numbers and federal identification numbers that are maintained by
35.31a county or city assessor for property tax administration purposes, and that may appear
35.32on the lists retain their classification as private or nonpublic data; but may be viewed,
35.33accessed, and used by the county auditor or treasurer of the same county for the limited
35.34purpose of assisting the commissioner in the preparation of microdata samples under
35.35section 270C.12. The commissioner shall use the information provided on the lists as
36.1appropriate under the law, including for the detection of improper claims by owners, or
36.2relatives of owners, under chapter 290A.
36.3    Subd. 13d. Homestead data. (l) On or before April 30 each year beginning in 2007,
36.4each county must provide the commissioner with the following data for each parcel of
36.5homestead property by electronic means as defined in section 289A.02, subdivision 8:
36.6    (i) (1) the property identification number assigned to the parcel for purposes of
36.7taxes payable in the current year;
36.8    (ii) (2) the name and Social Security number of each occupant of homestead property
36.9who is the property owner, property owner's spouse, qualifying relative of a property
36.10owner, or spouse of a qualifying relative;
36.11    (iii) (3) the classification of the property under section 273.13 for taxes payable
36.12in the current year and in the prior year;
36.13    (iv) (4) an indication of whether the property was classified as a homestead for
36.14taxes payable in the current year because of occupancy by a relative of the owner or
36.15by a spouse of a relative;
36.16    (v) (5) the property taxes payable as defined in section 290A.03, subdivision 13, for
36.17the current year and the prior year;
36.18    (vi) (6) the market value of improvements to the property first assessed for tax
36.19purposes for taxes payable in the current year;
36.20    (vii) (7) the assessor's estimated market value assigned to the property for taxes
36.21payable in the current year and the prior year;
36.22    (viii) (8) the taxable market value assigned to the property for taxes payable in the
36.23current year and the prior year;
36.24    (ix) (9) whether there are delinquent property taxes owing on the homestead;
36.25    (x) (10) the unique taxing district in which the property is located; and
36.26    (xi) (11) such other information as the commissioner decides is necessary.
36.27    The commissioner shall use the information provided on the lists as appropriate
36.28under the law, including for the detection of improper claims by owners, or relatives
36.29of owners, under chapter 290A.
36.30EFFECTIVE DATE.This section is effective the day following final enactment.

36.31    Sec. 9. Minnesota Statutes 2011 Supplement, section 273.13, subdivision 23, is
36.32amended to read:
36.33    Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural
36.34land that is homesteaded, along with any class 2b rural vacant land that is contiguous to
36.35the class 2a land under the same ownership. The market value of the house and garage
37.1and immediately surrounding one acre of land has the same class rates as class 1a or 1b
37.2property under subdivision 22. The value of the remaining land including improvements
37.3up to the first tier valuation limit of agricultural homestead property has a net class rate
37.4of 0.5 percent of market value. The remaining property over the first tier has a class rate
37.5of one percent of market value. For purposes of this subdivision, the "first tier valuation
37.6limit of agricultural homestead property" and "first tier" means the limit certified under
37.7section 273.11, subdivision 23.
37.8    (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
37.9are agricultural land and buildings. Class 2a property has a net class rate of one percent of
37.10market value, unless it is part of an agricultural homestead under paragraph (a). Class
37.112a property must also include any property that would otherwise be classified as 2b,
37.12but is interspersed with class 2a property, including but not limited to sloughs, wooded
37.13wind shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback
37.14requirement, and other similar land that is impractical for the assessor to value separately
37.15from the rest of the property or that is unlikely to be able to be sold separately from
37.16the rest of the property.
37.17    An assessor may classify the part of a parcel described in this subdivision that is used
37.18for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
37.19    (c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
37.20that are unplatted real estate, rural in character and not used for agricultural purposes,
37.21including land used for growing trees for timber, lumber, and wood and wood products,
37.22that is not improved with a structure. The presence of a minor, ancillary nonresidential
37.23structure as defined by the commissioner of revenue does not disqualify the property from
37.24classification under this paragraph. Any parcel of 20 acres or more improved with a
37.25structure that is not a minor, ancillary nonresidential structure must be split-classified, and
37.26ten acres must be assigned to the split parcel containing the structure. Class 2b property
37.27has a net class rate of one percent of market value unless it is part of an agricultural
37.28homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
37.29    (d) Class 2c managed forest land consists of no less than 20 and no more than 1,920
37.30acres statewide per taxpayer that is being managed under a forest management plan that
37.31meets the requirements of chapter 290C, but is not enrolled in the sustainable forest
37.32resource management incentive program. It has a class rate of .65 percent, provided that
37.33the owner of the property must apply to the assessor in order for the property to initially
37.34qualify for the reduced rate and provide the information required by the assessor to verify
37.35that the property qualifies for the reduced rate. If the assessor receives the application
37.36and information before May 1 in an assessment year, the property qualifies beginning
38.1with that assessment year. If the assessor receives the application and information after
38.2April 30 in an assessment year, the property may not qualify until the next assessment
38.3year. The commissioner of natural resources must concur that the land is qualified. The
38.4commissioner of natural resources shall annually provide county assessors verification
38.5information on a timely basis. The presence of a minor, ancillary nonresidential structure
38.6as defined by the commissioner of revenue does not disqualify the property from
38.7classification under this paragraph.
38.8    (e) Agricultural land as used in this section means:
38.9(1) contiguous acreage of ten acres or more, used during the preceding year for
38.10agricultural purposes; or
38.11(2) contiguous acreage used during the preceding year for an intensive livestock or
38.12poultry confinement operation, provided that land used only for pasturing or grazing
38.13does not qualify under this clause.
38.14"Agricultural purposes" as used in this section means the raising, cultivation, drying,
38.15or storage of agricultural products for sale, or the storage of machinery or equipment
38.16used in support of agricultural production by the same farm entity. For a property to be
38.17classified as agricultural based only on the drying or storage of agricultural products,
38.18the products being dried or stored must have been produced by the same farm entity as
38.19the entity operating the drying or storage facility. "Agricultural purposes" also includes
38.20enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or
38.21the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar
38.22state or federal conservation program if the property was classified as agricultural (i)
38.23under this subdivision for the assessment year 2002 for taxes payable in 2003 because of
38.24its enrollment in a qualifying program and the land remains enrolled or (ii) in the year
38.25prior to its enrollment. Agricultural classification shall not be based upon the market value
38.26of any residential structures on the parcel or contiguous parcels under the same ownership.
38.27For purposes of this paragraph, "contiguous acreage" means all of, or a contiguous
38.28portion of, a tax parcel as defined in section 272.193, or all of, or a contiguous portion of,
38.29a set of contiguous tax parcels under section 272.193 that are owned by the same person.
38.30    (f) Real estate of Agricultural land under this section also includes:
38.31(1) contiguous acreage that is less than ten acres, which is in size and exclusively or
38.32intensively used in the preceding year for raising or cultivating agricultural products, shall
38.33be considered as agricultural land. To qualify under this paragraph, property that includes
38.34a residential structure must be used intensively for one of the following purposes; or
39.1(2) contiguous acreage that contains a residence and is less than 11 acres in size, if
39.2the contiguous acreage was used in the preceding year for one or more of the following
39.3three uses:
39.4    (i) for an intensive grain drying or storage of grain operation, or for intensive
39.5machinery or equipment storage of machinery or equipment activities used to support
39.6agricultural activities conducted on other parcels of property operated by the same farming
39.7entity person;
39.8    (ii) as a nursery, provided that only those acres used intensively to produce nursery
39.9stock are considered agricultural land; or
39.10    (iii) for livestock or poultry confinement, provided that land that is used only for
39.11pasturing and grazing does not qualify; or
39.12    (iv) (iii) for intensive market farming; for purposes of this paragraph, "market
39.13farming" means the cultivation of one or more fruits or vegetables or production of animal
39.14or other agricultural products for sale to local markets by the farmer or an organization
39.15with which the farmer is affiliated.
39.16For purposes of this paragraph, "contiguous acreage" means all of a tax parcel as defined
39.17in section 272.193, or, all of a set of contiguous tax parcels under section 272.193 that
39.18are owned by the same person.
39.19    (g) Land shall be classified as agricultural even if all or a portion of the agricultural
39.20use of that property is the leasing to, or use by another person for agricultural purposes.
39.21    Classification under this subdivision is not determinative for qualifying under
39.22section 273.111.
39.23    (h) The property classification under this section supersedes, for property tax
39.24purposes only, any locally administered agricultural policies or land use restrictions that
39.25define minimum or maximum farm acreage.
39.26    (i) The term "agricultural products" as used in this subdivision includes production
39.27for sale of:
39.28    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
39.29animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
39.30bees, and apiary products by the owner;
39.31    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
39.32for agricultural use;
39.33    (3) the commercial boarding of horses, which may include related horse training and
39.34riding instruction, if the boarding is done on property that is also used for raising pasture
39.35to graze horses or raising or cultivating other agricultural products as defined in clause (1);
40.1    (4) property which is owned and operated by nonprofit organizations used for
40.2equestrian activities, excluding racing;
40.3    (5) game birds and waterfowl bred and raised (i) on a game farm licensed under
40.4section 97A.105, provided that the annual licensing report to the Department of Natural
40.5Resources, which must be submitted annually by March 30 to the assessor, indicates
40.6that at least 500 birds were raised or used for breeding stock on the property during the
40.7preceding year and that the owner provides a copy of the owner's most recent schedule F;
40.8or (ii) for use on a shooting preserve licensed under section 97A.115;
40.9    (6) insects primarily bred to be used as food for animals;
40.10    (7) trees, grown for sale as a crop, including short rotation woody crops, and not
40.11sold for timber, lumber, wood, or wood products; and
40.12    (8) maple syrup taken from trees grown by a person licensed by the Minnesota
40.13Department of Agriculture under chapter 28A as a food processor.
40.14    (j) If a parcel used for agricultural purposes is also used for commercial or industrial
40.15purposes, including but not limited to:
40.16    (1) wholesale and retail sales;
40.17    (2) processing of raw agricultural products or other goods;
40.18    (3) warehousing or storage of processed goods; and
40.19    (4) office facilities for the support of the activities enumerated in clauses (1), (2),
40.20and (3),
40.21the assessor shall classify the part of the parcel used for agricultural purposes as class
40.221b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
40.23use. The grading, sorting, and packaging of raw agricultural products for first sale is
40.24considered an agricultural purpose. A greenhouse or other building where horticultural
40.25or nursery products are grown that is also used for the conduct of retail sales must be
40.26classified as agricultural if it is primarily used for the growing of horticultural or nursery
40.27products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
40.28those products. Use of a greenhouse or building only for the display of already grown
40.29horticultural or nursery products does not qualify as an agricultural purpose.
40.30    (k) The assessor shall determine and list separately on the records the market value
40.31of the homestead dwelling and the one acre of land on which that dwelling is located. If
40.32any farm buildings or structures are located on this homesteaded acre of land, their market
40.33value shall not be included in this separate determination.
40.34    (l) Class 2d airport landing area consists of a landing area or public access area of
40.35a privately owned public use airport. It has a class rate of one percent of market value.
40.36To qualify for classification under this paragraph, a privately owned public use airport
41.1must be licensed as a public airport under section 360.018. For purposes of this paragraph,
41.2"landing area" means that part of a privately owned public use airport properly cleared,
41.3regularly maintained, and made available to the public for use by aircraft and includes
41.4runways, taxiways, aprons, and sites upon which are situated landing or navigational aids.
41.5A landing area also includes land underlying both the primary surface and the approach
41.6surfaces that comply with all of the following:
41.7    (i) the land is properly cleared and regularly maintained for the primary purposes of
41.8the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
41.9facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
41.10    (ii) the land is part of the airport property; and
41.11    (iii) the land is not used for commercial or residential purposes.
41.12The land contained in a landing area under this paragraph must be described and certified
41.13by the commissioner of transportation. The certification is effective until it is modified,
41.14or until the airport or landing area no longer meets the requirements of this paragraph.
41.15For purposes of this paragraph, "public access area" means property used as an aircraft
41.16parking ramp, apron, or storage hangar, or an arrival and departure building in connection
41.17with the airport.
41.18    (m) Class 2e consists of land with a commercial aggregate deposit that is not actively
41.19being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
41.20located in a county that has elected to opt-out of the aggregate preservation program as
41.21provided in section 273.1115, subdivision 6. It has a class rate of one percent of market
41.22value. To qualify for classification under this paragraph, the property must be at least
41.23ten contiguous acres in size and the owner of the property must record with the county
41.24recorder of the county in which the property is located an affidavit containing:
41.25    (1) a legal description of the property;
41.26    (2) a disclosure that the property contains a commercial aggregate deposit that is not
41.27actively being mined but is present on the entire parcel enrolled;
41.28    (3) documentation that the conditional use under the county or local zoning
41.29ordinance of this property is for mining; and
41.30    (4) documentation that a permit has been issued by the local unit of government
41.31or the mining activity is allowed under local ordinance. The disclosure must include a
41.32statement from a registered professional geologist, engineer, or soil scientist delineating
41.33the deposit and certifying that it is a commercial aggregate deposit.
41.34    For purposes of this section and section 273.1115, "commercial aggregate deposit"
41.35means a deposit that will yield crushed stone or sand and gravel that is suitable for use
42.1as a construction aggregate; and "actively mined" means the removal of top soil and
42.2overburden in preparation for excavation or excavation of a commercial deposit.
42.3    (n) When any portion of the property under this subdivision or subdivision 22 begins
42.4to be actively mined, the owner must file a supplemental affidavit within 60 days from
42.5the day any aggregate is removed stating the number of acres of the property that is
42.6actively being mined. The acres actively being mined must be (1) valued and classified
42.7under subdivision 24 in the next subsequent assessment year, and (2) removed from the
42.8aggregate resource preservation property tax program under section 273.1115, if the
42.9land was enrolled in that program. Copies of the original affidavit and all supplemental
42.10affidavits must be filed with the county assessor, the local zoning administrator, and the
42.11Department of Natural Resources, Division of Land and Minerals. A supplemental
42.12affidavit must be filed each time a subsequent portion of the property is actively mined,
42.13provided that the minimum acreage change is five acres, even if the actual mining activity
42.14constitutes less than five acres.
42.15(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
42.16not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
42.17in section 14.386 concerning exempt rules do not apply.
42.18EFFECTIVE DATE.This section is effective the day following final enactment.

42.19    Sec. 10. Minnesota Statutes 2011 Supplement, section 273.13, subdivision 25, is
42.20amended to read:
42.21    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
42.22units and used or held for use by the owner or by the tenants or lessees of the owner
42.23as a residence for rental periods of 30 days or more, excluding property qualifying for
42.24class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
42.25than hospitals exempt under section 272.02, and contiguous property used for hospital
42.26purposes, without regard to whether the property has been platted or subdivided. The
42.27market value of class 4a property has a class rate of 1.25 percent.
42.28    (b) Class 4b includes:
42.29    (1) residential real estate containing less than four units that does not qualify as class
42.304bb, other than seasonal residential recreational property;
42.31    (2) manufactured homes not classified under any other provision;
42.32    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
42.33farm classified under subdivision 23, paragraph (b) containing two or three units; and
42.34    (4) unimproved property that is classified residential as determined under subdivision
42.3533.
43.1    The market value of class 4b property has a class rate of 1.25 percent.
43.2    (c) Class 4bb includes:
43.3    (1) nonhomestead residential real estate containing one unit, other than seasonal
43.4residential recreational property; and
43.5    (2) a single family dwelling, garage, and surrounding one acre of property on a
43.6nonhomestead farm classified under subdivision 23, paragraph (b).
43.7    Class 4bb property has the same class rates as class 1a property under subdivision 22.
43.8    Property that has been classified as seasonal residential recreational property at
43.9any time during which it has been owned by the current owner or spouse of the current
43.10owner does not qualify for class 4bb.
43.11    (d) Class 4c property includes:
43.12    (1) except as provided in subdivision 22, paragraph (c), real and personal property
43.13devoted to commercial temporary and seasonal residential occupancy for recreation
43.14purposes, for not more than 250 days in the year preceding the year of assessment. For
43.15purposes of this clause, property is devoted to a commercial purpose on a specific day
43.16if any portion of the property is used for residential occupancy, and a fee is charged for
43.17residential occupancy. Class 4c property under this clause must contain three or more
43.18rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
43.19or individual camping site equipped with water and electrical hookups for recreational
43.20vehicles. A camping pad offered for rent by a property that otherwise qualifies for class
43.214c under this clause is also class 4c under this clause regardless of the term of the rental
43.22agreement, as long as the use of the camping pad does not exceed 250 days. In order for a
43.23property to be classified under this clause, either (i) the business located on the property
43.24must provide recreational activities, at least 40 percent of the annual gross lodging receipts
43.25related to the property must be from business conducted during 90 consecutive days,
43.26and either (A) at least 60 percent of all paid bookings by lodging guests during the year
43.27must be for periods of at least two consecutive nights; or (B) at least 20 percent of the
43.28annual gross receipts must be from charges for providing recreational activities, or (ii) the
43.29business must contain 20 or fewer rental units, and must be located in a township or a city
43.30with a population of 2,500 or less located outside the metropolitan area, as defined under
43.31section 473.121, subdivision 2, that contains a portion of a state trail administered by the
43.32Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or
43.33more nights shall be counted as two bookings. Class 4c property also includes commercial
43.34use real property used exclusively for recreational purposes in conjunction with other class
43.354c property classified under this clause and devoted to temporary and seasonal residential
43.36occupancy for recreational purposes, up to a total of two acres, provided the property is
44.1not devoted to commercial recreational use for more than 250 days in the year preceding
44.2the year of assessment and is located within two miles of the class 4c property with which
44.3it is used. In order for a property to qualify for classification under this clause, the owner
44.4must submit a declaration to the assessor designating the cabins or units occupied for 250
44.5days or less in the year preceding the year of assessment by January 15 of the assessment
44.6year. Those cabins or units and a proportionate share of the land on which they are located
44.7must be designated class 4c under this clause as otherwise provided. The remainder of the
44.8cabins or units and a proportionate share of the land on which they are located will be
44.9designated as class 3a. The owner of property desiring designation as class 4c property
44.10under this clause must provide guest registers or other records demonstrating that the units
44.11for which class 4c designation is sought were not occupied for more than 250 days in the
44.12year preceding the assessment if so requested. The portion of a property operated as a
44.13(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
44.14nonresidential facility operated on a commercial basis not directly related to temporary and
44.15seasonal residential occupancy for recreation purposes does not qualify for class 4c. For
44.16the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
44.17boats and motors, snowmobiles, downhill or cross-country ski equipment; providing
44.18marina services, launch services, or guide services; or selling bait and fishing tackle;
44.19    (2) qualified property used as a golf course if:
44.20    (i) it is open to the public on a daily fee basis. It may charge membership fees or
44.21dues, but a membership fee may not be required in order to use the property for golfing,
44.22and its green fees for golfing must be comparable to green fees typically charged by
44.23municipal courses; and
44.24    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
44.25    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
44.26with the golf course is classified as class 3a property;
44.27    (3) real property up to a maximum of three acres of land owned and used by a
44.28nonprofit community service oriented organization and not used for residential purposes
44.29on either a temporary or permanent basis, provided that:
44.30    (i) the property is not used for a revenue-producing activity for more than six days
44.31in the calendar year preceding the year of assessment; or
44.32    (ii) the organization makes annual charitable contributions and donations at least
44.33equal to the property's previous year's property taxes and the property is allowed to be
44.34used for public and community meetings or events for no charge, as appropriate to the
44.35size of the facility.
44.36    For purposes of this clause:
45.1    (A) "charitable contributions and donations" has the same meaning as lawful
45.2gambling purposes under section 349.12, subdivision 25, excluding those purposes
45.3relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
45.4    (B) "property taxes" excludes the state general tax;
45.5    (C) a "nonprofit community service oriented organization" means any corporation,
45.6society, association, foundation, or institution organized and operated exclusively for
45.7charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
45.8federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
45.9Revenue Code; and
45.10    (D) "revenue-producing activities" shall include but not be limited to property or that
45.11portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
45.12liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
45.13alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
45.14insurance business, or office or other space leased or rented to a lessee who conducts a
45.15for-profit enterprise on the premises.
45.16Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use
45.17of the property for social events open exclusively to members and their guests for periods
45.18of less than 24 hours, when an admission is not charged nor any revenues are received by
45.19the organization shall not be considered a revenue-producing activity.
45.20    The organization shall maintain records of its charitable contributions and donations
45.21and of public meetings and events held on the property and make them available upon
45.22request any time to the assessor to ensure eligibility. An organization meeting the
45.23requirement under item (ii) must file an application by May 1 with the assessor for
45.24eligibility for the current year's assessment. The commissioner shall prescribe a uniform
45.25application form and instructions;
45.26    (4) postsecondary student housing of not more than one acre of land that is owned by
45.27a nonprofit corporation organized under chapter 317A and is used exclusively by a student
45.28cooperative, sorority, or fraternity for on-campus housing or housing located within two
45.29miles of the border of a college campus;
45.30    (5)(i) manufactured home parks as defined in section 327.14, subdivision 3,
45.31excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii)
45.32manufactured home parks as defined in section 327.14, subdivision 3, that are described in
45.33section 273.124, subdivision 3a;
45.34    (6) real property that is actively and exclusively devoted to indoor fitness, health,
45.35social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
45.36and is located within the metropolitan area as defined in section 473.121, subdivision 2;
46.1    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
46.2under section 272.01, subdivision 2, and the land on which it is located, provided that:
46.3    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
46.4Airports Commission, or group thereof; and
46.5    (ii) the land lease, or any ordinance or signed agreement restricting the use of the
46.6leased premise, prohibits commercial activity performed at the hangar.
46.7    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
46.8be filed by the new owner with the assessor of the county where the property is located
46.9within 60 days of the sale;
46.10    (8) a privately owned noncommercial aircraft storage hangar not exempt under
46.11section 272.01, subdivision 2, and the land on which it is located, provided that:
46.12    (i) the land abuts a public airport; and
46.13    (ii) the owner of the aircraft storage hangar provides the assessor with a signed
46.14agreement restricting the use of the premises, prohibiting commercial use or activity
46.15performed at the hangar; and
46.16    (9) residential real estate, a portion of which is used by the owner for homestead
46.17purposes, and that is also a place of lodging, if all of the following criteria are met:
46.18    (i) rooms are provided for rent to transient guests that generally stay for periods
46.19of 14 or fewer days;
46.20    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
46.21in the basic room rate;
46.22    (iii) meals are not provided to the general public except for special events on fewer
46.23than seven days in the calendar year preceding the year of the assessment; and
46.24    (iv) the owner is the operator of the property.
46.25The market value subject to the 4c classification under this clause is limited to five rental
46.26units. Any rental units on the property in excess of five, must be valued and assessed as
46.27class 3a. The portion of the property used for purposes of a homestead by the owner must
46.28be classified as class 1a property under subdivision 22;
46.29    (10) real property up to a maximum of three acres and operated as a restaurant
46.30as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake
46.31as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
46.32is either devoted to commercial purposes for not more than 250 consecutive days, or
46.33receives at least 60 percent of its annual gross receipts from business conducted during
46.34four consecutive months. Gross receipts from the sale of alcoholic beverages must be
46.35included in determining the property's qualification under subitem (B). The property's
46.36primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
47.1sales located on the premises must be excluded. Owners of real property desiring 4c
47.2classification under this clause must submit an annual declaration to the assessor by
47.3February 1 of the current assessment year, based on the property's relevant information for
47.4the preceding assessment year;
47.5(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
47.6as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to
47.7the public and devoted to recreational use for marina services. The marina owner must
47.8annually provide evidence to the assessor that it provides services, including lake or river
47.9access to the public by means of an access ramp or other facility that is either located on
47.10the property of the marina or at a publicly owned site that abuts the property of the marina.
47.11No more than 800 feet of lakeshore may be included in this classification. Buildings used
47.12in conjunction with a marina for marina services, including but not limited to buildings
47.13used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
47.14tackle, are classified as class 3a property; and
47.15(12) real and personal property devoted to noncommercial temporary and seasonal
47.16residential occupancy for recreation purposes.
47.17    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
47.18parcel of noncommercial seasonal residential recreational property under clause (12)
47.19has the same class rates as class 4bb property, (ii) manufactured home parks assessed
47.20under clause (5), item (i), have the same class rate as class 4b property, and the market
47.21value of manufactured home parks assessed under clause (5), item (ii), has the same class
47.22rate as class 4d property if more than 50 percent of the lots in the park are occupied by
47.23shareholders in the cooperative corporation or association and a class rate of one percent if
47.2450 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential
47.25recreational property and marina recreational land as described in clause (11), has a
47.26class rate of one percent for the first $500,000 of market value, and 1.25 percent for the
47.27remaining market value, (iv) the market value of property described in clause (4) has a
47.28class rate of one percent, (v) the market value of property described in clauses (2), (6), and
47.29(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property
47.30in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
47.31    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
47.32by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
47.33of the units in the building qualify as low-income rental housing units as certified under
47.34section 273.128, subdivision 3, only the proportion of qualifying units to the total number
47.35of units in the building qualify for class 4d. The remaining portion of the building shall be
47.36classified by the assessor based upon its use. Class 4d also includes the same proportion of
48.1land as the qualifying low-income rental housing units are to the total units in the building.
48.2For all properties qualifying as class 4d, the market value determined by the assessor must
48.3be based on the normal approach to value using normal unrestricted rents.
48.4    Class 4d property has a class rate of 0.75 percent.
48.5EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
48.6thereafter.

48.7    Sec. 11. Minnesota Statutes 2010, section 273.1315, subdivision 1, is amended to read:
48.8    Subdivision 1. Class 1b homestead declaration before 2009. Any property owner
48.9seeking classification and assessment of the owner's homestead as class 1b property
48.10pursuant to section 273.13, subdivision 22, paragraph (b), on or before October 1, 2008,
48.11shall file with the commissioner of revenue a 1b homestead declaration, on a form
48.12prescribed by the commissioner. The declaration shall contain the following information:
48.13    (a) (1) the information necessary to verify that on or before June 30 of the filing year,
48.14the property owner or the owner's spouse satisfies the requirements of section 273.13,
48.15subdivision 22
, paragraph (b), for 1b classification; and
48.16    (b) (2) any additional information prescribed by the commissioner.
48.17    The declaration must be filed on or before October 1 to be effective for property
48.18taxes payable during the succeeding calendar year. The declaration and any supplementary
48.19information received from the property owner pursuant to this subdivision shall be subject
48.20to chapter 270B. If approved by the commissioner, the declaration remains in effect until
48.21the property no longer qualifies under section 273.13, subdivision 22, paragraph (b).
48.22Failure to notify the commissioner within 30 days that the property no longer qualifies
48.23under that paragraph because of a sale, change in occupancy, or change in the status
48.24or condition of an occupant shall result in the penalty provided in section 273.124,
48.25subdivision 13 13b, computed on the basis of the class 1b benefits for the property, and
48.26the property shall lose its current class 1b classification.
48.27    The commissioner shall provide to the assessor on or before November 1 a listing
48.28of the parcels of property qualifying for 1b classification.
48.29EFFECTIVE DATE.This section is effective the day following final enactment.

48.30    Sec. 12. Minnesota Statutes 2010, section 273.1315, subdivision 2, is amended to read:
48.31    Subd. 2. Class 1b homestead declaration 2009 and thereafter. (a) Any property
48.32owner seeking classification and assessment of the owner's homestead as class 1b property
48.33pursuant to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file
49.1with the county assessor a class 1b homestead declaration, on a form prescribed by the
49.2commissioner of revenue. The declaration must contain the following information:
49.3    (1) the information necessary to verify that, on or before June 30 of the filing year,
49.4the property owner or the owner's spouse satisfies the requirements of section 273.13,
49.5subdivision 22, paragraph (b), for class 1b classification; and
49.6    (2) any additional information prescribed by the commissioner.
49.7    (b) The declaration must be filed on or before October 1 to be effective for property
49.8taxes payable during the succeeding calendar year. The Social Security numbers and
49.9income and medical information received from the property owner pursuant to this
49.10subdivision are private data on individuals as defined in section 13.02. If approved by
49.11the assessor, the declaration remains in effect until the property no longer qualifies under
49.12section 273.13, subdivision 22, paragraph (b). Failure to notify the assessor within 30
49.13days that the property no longer qualifies under that paragraph because of a sale, change in
49.14occupancy, or change in the status or condition of an occupant shall result in the penalty
49.15provided in section 273.124, subdivision 13 13b, computed on the basis of the class 1b
49.16benefits for the property, and the property shall lose its current class 1b classification.
49.17EFFECTIVE DATE.This section is effective the day following final enactment.

49.18    Sec. 13. Minnesota Statutes 2010, section 273.19, subdivision 1, is amended to read:
49.19    Subdivision 1. Tax-exempt property; lease. Except as provided in subdivision 3 or
49.204, tax-exempt property held under a lease for a term of at least one year, and not taxable
49.21under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall
49.22be considered, for all purposes of taxation, as the property of the person holding it. In
49.23this subdivision, "tax-exempt property" means property owned by the United States, the
49.24state or any of its political subdivisions, a school, or any religious, scientific, or benevolent
49.25society or institution, incorporated or unincorporated, or any corporation whose property
49.26is not taxed in the same manner as other property. This subdivision does not apply to
49.27property exempt from taxation under section 272.01, subdivision 2, paragraph (b), clauses
49.28(2), (3), and (4), or to property exempt from taxation under section 272.0213.
49.29EFFECTIVE DATE.This section is effective the day following final enactment.

49.30    Sec. 14. Minnesota Statutes 2010, section 273.372, subdivision 4, is amended to read:
49.31    Subd. 4. Administrative appeals. (a) Companies that submit the reports under
49.32section 270.82 or 273.371 by the date specified in that section, or by the date specified by
50.1the commissioner in an extension, may appeal administratively to the commissioner prior
50.2to bringing an action in court by submitting.
50.3(b) Companies that must submit reports under section 270.82 must submit a written
50.4request with to the commissioner for a conference within ten days after the date of the
50.5commissioner's valuation certification or notice to the company, or by May June 15,
50.6whichever is earlier.
50.7(c) Companies that submit reports under section 273.371 must submit a written
50.8request to the commissioner for a conference within ten days after the date of the
50.9commissioner's valuation certification or notice to the company, or by July 1, whichever
50.10is earlier.
50.11(d) The commissioner shall conduct the conference upon the commissioner's entire
50.12files and records and such further information as may be offered. The conference must
50.13be held no later than 20 days after the date of the commissioner's valuation certification
50.14or notice to the company, or by the date specified by the commissioner in an extension.
50.15Within 60 days after the conference the commissioner shall make a final determination of
50.16the matter and shall notify the company promptly of the determination. The conference
50.17is not a contested case hearing.
50.18(b) (e) In addition to the opportunity for a conference under paragraph (a), the
50.19commissioner shall also provide the railroad and utility companies the opportunity to
50.20discuss any questions or concerns relating to the values established by the commissioner
50.21through certification or notice in a less formal manner. This does not change or modify
50.22the deadline for requesting a conference under paragraph (a), the deadline in section
50.23271.06 for appealing an order of the commissioner, or the deadline in section 278.01 for
50.24appealing property taxes in court.
50.25EFFECTIVE DATE.This section is effective beginning with assessment year 2013.

50.26    Sec. 15. Minnesota Statutes 2010, section 273.39, is amended to read:
50.27273.39 RURAL AREA.
50.28As used in sections 273.39 to 273.41, the term "rural area" shall be deemed to mean
50.29any area of the state not included within the boundaries of any incorporated statutory
50.30city or home rule charter city, and such term shall be deemed to include both farm and
50.31nonfarm population thereof.
50.32EFFECTIVE DATE.This section is effective beginning with assessment year 2012.

50.33    Sec. 16. Minnesota Statutes 2010, section 279.06, subdivision 1, is amended to read:
51.1    Subdivision 1. List and notice. Within five days after the filing of such list, the
51.2court administrator shall return a copy thereof to the county auditor, with a notice prepared
51.3and signed by the court administrator, and attached thereto, which may be substantially in
51.4the following form:
51.5
State of Minnesota
)
51.6
) ss.
51.7
County of
.....
)
51.8
District Court
51.9
..... Judicial District.
51.10The state of Minnesota, to all persons, companies, or corporations who have or claim
51.11any estate, right, title, or interest in, claim to, or lien upon, any of the several parcels of
51.12land described in the list hereto attached:
51.13The list of taxes and penalties on real property for the county of ...............................
51.14remaining delinquent on the first Monday in January, ......., has been filed in the office of
51.15the court administrator of the district court of said county, of which that hereto attached is a
51.16copy. Therefore, you, and each of you, are hereby required to file in the office of said court
51.17administrator, on or before the 20th day after the publication of this notice and list, your
51.18answer, in writing, setting forth any objection or defense you may have to the taxes, or any
51.19part thereof, upon any parcel of land described in the list, in, to, or on which you have or
51.20claim any estate, right, title, interest, claim, or lien, and, in default thereof, judgment will
51.21be entered against such parcel of land for the taxes on such list appearing against it, and
51.22for all penalties, interest, and costs. Based upon said judgment, the land shall be sold to
51.23the state of Minnesota on the second Monday in May, ....... The period of redemption for
51.24all lands sold to the state at a tax judgment sale shall be three years from the date of sale to
51.25the state of Minnesota if the land is within an incorporated area unless it is:
51.26(a) nonagricultural homesteaded land as defined in section 273.13, subdivision 22;
51.27(b) homesteaded agricultural land as defined in section 273.13, subdivision 23,
51.28paragraph (a);
51.29(c) seasonal residential recreational land as defined in section 273.13, subdivisions
51.3022, paragraph (c)
, and 25, paragraph (d), clause (1), in which event the period of
51.31redemption is five years from the date of sale to the state of Minnesota;
51.32(d) abandoned property and pursuant to section 281.173 a court order has been
51.33entered shortening the redemption period to five weeks; or
51.34(e) vacant property as described under section 281.174, subdivision 2, and for which
51.35a court order is entered shortening the redemption period under section 281.174.
51.36The period of redemption for all other lands sold to the state at a tax judgment sale
51.37shall be five years from the date of sale.
52.1Inquiries as to the proceedings set forth above can be made to the county auditor of
52.2..... county whose address is ......
52.3
(Signed) ..... ,
52.4
52.5
Court Administrator of the District Court of the
County of
.....
52.6
(Here insert list.)
52.7The notice must contain a narrative description of the various periods to redeem
52.8specified in sections 281.17, 281.173, and 281.174, in the manner prescribed by the
52.9commissioner of revenue under subdivision 2.
52.10The list referred to in the notice shall be substantially in the following form:
52.11List of real property for the county of ......................., on which taxes remain
52.12delinquent on the first Monday in January, .......
52.13Town of (Fairfield),
52.14Township (40), Range (20),
52.15
52.16
52.17
52.18
52.19
52.20
52.21
52.22
Names (and Current
Filed Addresses) for
the Taxpayers and Fee
Owners and in Addition
Those Parties Who Have
Filed Their Addresses
Pursuant to section
276.041
Subdivision of
Section
Section
Tax Parcel
Number
Total Tax
and Penalty
52.23
$ cts.
52.24
52.25
John Jones (825 Fremont
Fairfield, MN 55000)
S.E. 1/4 of S.W. 1/4
10
23101
2.20
52.26
52.27
52.28
52.29
52.30
52.31
52.32
52.33
52.34
52.35
52.36
52.37
52.38
52.39
52.40
52.41
52.42
52.43
52.44
Bruce Smith (2059 Hand
Fairfield, MN 55000)
and Fairfield State
Bank (100 Main Street
Fairfield, MN 55000)
That part of N.E. 1/4
of S.W. 1/4 desc. as
follows: Beg. at the
S.E. corner of said N.E.
1/4 of S.W. 1/4; thence
N. along the E. line of
said N.E. 1/4 of S.W.
1/4 a distance of 600
ft.; thence W. parallel
with the S. line of said
N.E. 1/4 of S.W. 1/4
a distance of 600 ft.;
thence S. parallel with
said E. line a distance of
600 ft. to S. line of said
N.E. 1/4 of S.W. 1/4;
thence E. along said S.
line a distance of 600 ft.
to the point of beg.
21
33211
3.15
52.45As to platted property, the form of heading shall conform to circumstances and be
52.46substantially in the following form:
53.1City of (Smithtown)
53.2Brown's Addition, or Subdivision
53.3
53.4
53.5
53.6
53.7
53.8
53.9
53.10
Names (and Current
Filed Addresses) for
the Taxpayers and Fee
Owners and in Addition
Those Parties Who Have
Filed Their Addresses
Pursuant to section
276.041
Lot
Block
Tax Parcel
Number
Total Tax
and Penalty
53.11
$ cts.
53.12
53.13
John Jones (825 Fremont
Fairfield, MN 55000)
15
9
58243
2.20
53.14
53.15
53.16
53.17
53.18
Bruce Smith (2059 Hand
Fairfield, MN 55000)
and Fairfield State
Bank (100 Main Street
Fairfield, MN 55000)
16
9
58244
3.15
53.19The names, descriptions, and figures employed in parentheses in the above forms are
53.20merely for purposes of illustration.
53.21The name of the town, township, range or city, and addition or subdivision, as the
53.22case may be, shall be repeated at the head of each column of the printed lists as brought
53.23forward from the preceding column.
53.24Errors in the list shall not be deemed to be a material defect to affect the validity
53.25of the judgment and sale.
53.26EFFECTIVE DATE.This section is effective for lists and notices required after
53.27December 31, 2012.

53.28    Sec. 17. Minnesota Statutes 2010, section 290A.25, is amended to read:
53.29290A.25 VERIFICATION OF SOCIAL SECURITY NUMBERS.
53.30Annually, the commissioner of revenue shall furnish a list to the county assessor
53.31containing the names and Social Security numbers of persons who have applied for both
53.32homestead classification under section 273.13 and a property tax refund as a renter
53.33under this chapter.
53.34Within 90 days of the notification, the county assessor shall investigate to determine
53.35if the homestead classification was improperly claimed. If the property owner does
53.36not qualify, the county assessor shall notify the county auditor who will determine the
53.37amount of homestead benefits that has been improperly allowed. For the purpose of this
53.38section, "homestead benefits" has the meaning given in section 273.124, subdivision
53.3913
, paragraph (h) 13b. The county auditor shall send a notice to persons who owned the
54.1affected property at the time the homestead application related to the improper homestead
54.2was filed, demanding reimbursement of the homestead benefits plus a penalty equal to
54.3100 percent of the homestead benefits. The person notified may appeal the county's
54.4determination with the Minnesota Tax Court within 60 days of the date of the notice from
54.5the county as provided in section 273.124, subdivision 13, paragraph (h) 13b.
54.6If the amount of homestead benefits and penalty is not paid within 60 days, and if
54.7no appeal has been filed, the county auditor shall certify the amount of taxes and penalty
54.8to the county treasurer. The county treasurer will add interest to the unpaid homestead
54.9benefits and penalty amounts at the rate provided for delinquent personal property taxes
54.10for the period beginning 60 days after demand for payment was made until payment. If
54.11the person notified is the current owner of the property, the treasurer may add the total
54.12amount of benefits, penalty, interest, and costs to the real estate taxes otherwise payable on
54.13the property in the following year. If the person notified is not the current owner of the
54.14property, the treasurer may collect the amounts due under the Revenue Recapture Act in
54.15chapter 270A, or use any of the powers granted in sections 277.20 and 277.21 without
54.16exclusion, to enforce payment of the benefits, penalty, interest, and costs, as if those
54.17amounts were delinquent tax obligations of the person who owned the property at the time
54.18the application related to the improperly allowed homestead was filed. The treasurer may
54.19relieve a prior owner of personal liability for the benefits, penalty, interest, and costs, and
54.20instead extend those amounts on the tax lists against the property for taxes payable in the
54.21following year to the extent that the current owner agrees in writing.
54.22Any amount of homestead benefits recovered by the county from the property owner
54.23shall be distributed to the county, city or town, and school district where the property is
54.24located in the same proportion that each taxing district's levy was to the total of the three
54.25taxing districts' levy for the current year. Any amount recovered attributable to taconite
54.26homestead credit shall be transmitted to the St. Louis County auditor to be deposited in
54.27the taconite property tax relief account. Any amount recovered that is attributable to
54.28supplemental homestead credit is to be transmitted to the commissioner of revenue for
54.29deposit in the general fund of the state treasury. The total amount of penalty collected
54.30must be deposited in the county general fund.
54.31EFFECTIVE DATE.This section is effective the day following final enactment.

54.32    Sec. 18. Minnesota Statutes 2010, section 290B.04, subdivision 2, is amended to read:
54.33    Subd. 2. Approval; recording. The commissioner shall approve all initial
54.34applications that qualify under this chapter and shall notify qualifying homeowners on or
54.35before December 1. The commissioner may investigate the facts or require confirmation
55.1in regard to an application. The commissioner shall record or file a notice of qualification
55.2for deferral, including the names of the qualifying homeowners and a legal description
55.3of the property, in the office of the county recorder, or registrar of titles, whichever is
55.4applicable, in the county where the qualifying property is located. The notice must state
55.5that it serves as a notice of lien and that it includes deferrals under this section for future
55.6years. The commissioner shall prescribe the form of the notice. Execution of the notice
55.7by the original or facsimile signature of the commissioner or a delegate entitles them to
55.8be recorded, and no other attestation, certification, or acknowledgment is necessary. The
55.9homeowner shall pay the recording or filing fees for the notice, which, notwithstanding
55.10section 357.18, shall be paid by the homeowner at the time of satisfaction of the lien.
55.11EFFECTIVE DATE.This section is effective for notices that are both executed
55.12and recorded after June 30, 2012.

55.13    Sec. 19. Minnesota Statutes 2011 Supplement, section 373.01, subdivision 1, is
55.14amended to read:
55.15    Subdivision 1. Public corporation; listed powers. (a) Each county is a body politic
55.16and corporate and may:
55.17    (1) Sue and be sued.
55.18    (2) Acquire and hold real and personal property for the use of the county, and lands
55.19sold for taxes as provided by law.
55.20    (3) Purchase and hold for the benefit of the county real estate sold by virtue of
55.21judicial proceedings, to which the county is a party.
55.22    (4) Sell, lease, and convey real or personal estate owned by the county, and give
55.23contracts or options to sell, lease, or convey it, and make orders respecting it as deemed
55.24conducive to the interests of the county's inhabitants.
55.25    (5) Make all contracts and do all other acts in relation to the property and concerns
55.26of the county necessary to the exercise of its corporate powers.
55.27    (b) No sale, lease, or conveyance of real estate owned by the county, except the lease
55.28of a residence acquired for the furtherance of an approved capital improvement project, nor
55.29any contract or option for it, shall be valid, without first advertising for bids or proposals in
55.30the official newspaper of the county for three consecutive weeks and once in a newspaper
55.31of general circulation in the area where the property is located. The notice shall state the
55.32time and place of considering the proposals, contain a legal description of any real estate,
55.33and a brief description of any personal property. Leases that do not exceed $15,000 for any
55.34one year may be negotiated and are not subject to the competitive bid procedures of this
55.35section. All proposals estimated to exceed $15,000 in any one year shall be considered at
56.1the time set for the bid opening, and the one most favorable to the county accepted, but the
56.2county board may, in the interest of the county, reject any or all proposals.
56.3    (c) Sales of personal property the value of which is estimated to be $15,000 or
56.4more shall be made only after advertising for bids or proposals in the county's official
56.5newspaper, on the county's Web site, or in a recognized industry trade journal. At the same
56.6time it posts on its Web site or publishes in a trade journal, the county must publish in the
56.7official newspaper, either as part of the minutes of a regular meeting of the county board
56.8or in a separate notice, a summary of all requests for bids or proposals that the county
56.9advertises on its Web site or in a trade journal. After publication in the official newspaper,
56.10on the Web site, or in a trade journal, bids or proposals may be solicited and accepted by
56.11the electronic selling process authorized in section 471.345, subdivision 17. Sales of
56.12personal property the value of which is estimated to be less than $15,000 may be made
56.13either on competitive bids or in the open market, in the discretion of the county board.
56.14"Web site" means a specific, addressable location provided on a server connected to the
56.15Internet and hosting World Wide Web pages and other files that are generally accessible
56.16on the Internet all or most of a day.
56.17    (d) Notwithstanding anything to the contrary herein, the county may, when acquiring
56.18real property for county highway right-of-way, exchange parcels of real property of
56.19substantially similar or equal value without advertising for bids. The estimated values for
56.20these parcels shall be determined by the county assessor.
56.21(e) Notwithstanding anything in this section to the contrary, the county may, when
56.22acquiring real property for purposes other than county highway right-of-way, exchange
56.23parcels of real property of substantially similar or equal value without advertising for bids.
56.24The estimated values for these parcels must be determined by the county assessor or a
56.25private appraisal performed by a licensed Minnesota real estate appraiser. For the purpose
56.26of making these estimates, the county assessor need not be licensed under chapter 82B.
56.27Before giving final approval to any exchange of land, the county board shall hold a public
56.28hearing on the exchange. At least two weeks before the hearing, the county auditor shall
56.29post a notice in the auditor's office and the official newspaper of the county of the hearing
56.30that contains a description of the lands affected.
56.31    (f) If real estate or personal property remains unsold after advertising for and
56.32consideration of bids or proposals the county may employ a broker to sell the property.
56.33The broker may sell the property for not less than 90 percent of its appraised market value
56.34as determined by the county. The broker's fee shall be set by agreement with the county but
56.35may not exceed ten percent of the sale price and must be paid from the proceeds of the sale.
57.1    (g) A county or its agent may rent a county-owned residence acquired for the
57.2furtherance of an approved capital improvement project subject to the conditions set
57.3by the county board and not subject to the conditions for lease otherwise provided by
57.4paragraph (a), clause (4), and paragraphs (b), (c), (d), (f), and (h).
57.5    (h) In no case shall lands be disposed of without there being reserved to the county
57.6all iron ore and other valuable minerals in and upon the lands, with right to explore for,
57.7mine and remove the iron ore and other valuable minerals, nor shall the minerals and
57.8mineral rights be disposed of, either before or after disposition of the surface rights,
57.9otherwise than by mining lease, in similar general form to that provided by section 93.20
57.10for mining leases affecting state lands. The lease shall be for a term not exceeding 50
57.11years, and be issued on a royalty basis, the royalty to be not less than 25 cents per ton of
57.122,240 pounds, and fix a minimum amount of royalty payable during each year, whether
57.13mineral is removed or not. Prospecting options for mining leases may be granted for
57.14periods not exceeding one year. The options shall require, among other things, periodical
57.15showings to the county board of the results of exploration work done.
57.16    (i) Notwithstanding anything in this subdivision to the contrary, the county may,
57.17when selling real property owned in fee simple that cannot be improved because of
57.18noncompliance with local ordinances regarding minimum area, shape, frontage, or access,
57.19proceed to sell the nonconforming parcel without advertising for bid. At the county's
57.20discretion, the real property may be restricted to sale to adjoining landowners or may be
57.21sold to any other interested party. The property shall be sold to the highest bidder, but
57.22in no case shall the property be sold for less than 90 percent of its fair market value as
57.23determined by the county assessor. All owners of land adjoining the land to be sold shall
57.24be given a written notice at least 30 days before the sale. This paragraph shall be liberally
57.25construed to encourage the sale of nonconforming real property and promote its return to
57.26the tax roles.
57.27EFFECTIVE DATE.This section is effective the day following final enactment.

57.28    Sec. 20. REPEALER.
57.29(a) Minnesota Statutes 2010, section 272.69, is repealed.
57.30(b) Minnesota Statutes 2010, section 273.11, subdivision 22, is repealed.
57.31EFFECTIVE DATE.Paragraph (a) is effective the day following final enactment.
57.32Paragraph (b) is effective for taxes payable in 2013 and thereafter.

58.1ARTICLE 4
58.2DEPARTMENT POLICY AND TECHNICAL: SALES AND USE
58.3TAXES; SPECIAL TAXES

58.4    Section 1. Minnesota Statutes 2010, section 65B.84, subdivision 1, is amended to read:
58.5    Subdivision 1. Program described; commissioner's duties; appropriation. (a)
58.6The commissioner of commerce shall:
58.7(1) develop and sponsor the implementation of statewide plans, programs, and
58.8strategies to combat automobile theft, improve the administration of the automobile theft
58.9laws, and provide a forum for identification of critical problems for those persons dealing
58.10with automobile theft;
58.11(2) coordinate the development, adoption, and implementation of plans, programs,
58.12and strategies relating to interagency and intergovernmental cooperation with respect
58.13to automobile theft enforcement;
58.14(3) annually audit the plans and programs that have been funded in whole or in part
58.15to evaluate the effectiveness of the plans and programs and withdraw funding should the
58.16commissioner determine that a plan or program is ineffective or is no longer in need
58.17of further financial support from the fund;
58.18(4) develop a plan of operation including:
58.19(i) an assessment of the scope of the problem of automobile theft, including areas
58.20of the state where the problem is greatest;
58.21(ii) an analysis of various methods of combating the problem of automobile theft;
58.22(iii) a plan for providing financial support to combat automobile theft;
58.23(iv) a plan for eliminating car hijacking; and
58.24(v) an estimate of the funds required to implement the plan; and
58.25(5) distribute money, in consultation with the commissioner of public safety,
58.26pursuant to subdivision 3 from the automobile theft prevention special revenue account
58.27for automobile theft prevention activities, including:
58.28(i) paying the administrative costs of the program;
58.29(ii) providing financial support to the State Patrol and local law enforcement
58.30agencies for automobile theft enforcement teams;
58.31(iii) providing financial support to state or local law enforcement agencies for
58.32programs designed to reduce the incidence of automobile theft and for improved
58.33equipment and techniques for responding to automobile thefts;
58.34(iv) providing financial support to local prosecutors for programs designed to reduce
58.35the incidence of automobile theft;
59.1(v) providing financial support to judicial agencies for programs designed to reduce
59.2the incidence of automobile theft;
59.3(vi) providing financial support for neighborhood or community organizations or
59.4business organizations for programs designed to reduce the incidence of automobile
59.5theft and to educate people about the common methods of automobile theft, the models
59.6of automobiles most likely to be stolen, and the times and places automobile theft is
59.7most likely to occur; and
59.8(vii) providing financial support for automobile theft educational and training
59.9programs for state and local law enforcement officials, driver and vehicle services exam
59.10and inspections staff, and members of the judiciary.
59.11(b) The commissioner may not spend in any fiscal year more than ten percent of the
59.12money in the fund for the program's administrative and operating costs. The commissioner
59.13is annually appropriated and must distribute the amount of the proceeds credited to
59.14the automobile theft prevention special revenue account each year, less the transfer
59.15of $1,300,000 each year to the general fund described in section 168A.40, subdivision
59.164
297I.11, subdivision 2.
59.17EFFECTIVE DATE.This section is effective for premiums collected after June
59.1830, 2012.

59.19    Sec. 2. Minnesota Statutes 2010, section 287.20, is amended by adding a subdivision
59.20to read:
59.21    Subd. 11. Partition. "Partition" means the division by conveyance of real property
59.22that is held jointly or in common by two or more persons into individually owned interests.
59.23If one of the co-owners gives consideration for all or a part of the individually owned
59.24interest conveyed to them, that portion of the conveyance is not a part of the partition.
59.25EFFECTIVE DATE.This section is effective the day following final enactment.

59.26    Sec. 3. Minnesota Statutes 2010, section 297A.665, is amended to read:
59.27297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
59.28    (a) For the purpose of the proper administration of this chapter and to prevent
59.29evasion of the tax, until the contrary is established, it is presumed that:
59.30    (1) all gross receipts are subject to the tax; and
59.31    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
59.32in Minnesota.
60.1    (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
60.2However, a seller is relieved of liability if:
60.3    (1) the seller obtains a fully completed exemption certificate or all the relevant
60.4information required by section 297A.72, subdivision 2, at the time of the sale or within
60.590 days after the date of the sale; or
60.6    (2) if the seller has not obtained a fully completed exemption certificate or all the
60.7relevant information required by section 297A.72, subdivision 2, within the time provided
60.8in clause (1), within 120 days after a request for substantiation by the commissioner,
60.9the seller either:
60.10    (i) obtains in good faith from the purchaser a fully completed exemption certificate
60.11or all the relevant information required by section 297A.72, subdivision 2, from the
60.12purchaser taken in good faith which means that the exemption certificate claims an
60.13exemption that (A) was statutorily available on the date of the transaction, (B) could be
60.14applicable to the item for which the exemption is claimed, and (C) is reasonable for the
60.15purchaser's type of business; or
60.16    (ii) proves by other means that the transaction was not subject to tax.
60.17    (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
60.18    (1) fraudulently fails to collect the tax; or
60.19    (2) solicits purchasers to participate in the unlawful claim of an exemption.
60.20(d) Notwithstanding paragraph (b), relief from liability does not apply to a seller
60.21who has obtained information under paragraph (b), clause (2), if through the audit process
60.22the commissioner finds the following:
60.23(1) that at the time the information was provided the seller had knowledge or had
60.24reason to know that the information relating to the exemption was materially false; or
60.25(2) that the seller knowingly participated in activity intended to purposefully evade
60.26the sales tax due on the transaction.
60.27    (d) (e) A certified service provider, as defined in section 297A.995, subdivision 2, is
60.28relieved of liability under this section to the extent a seller who is its client is relieved of
60.29liability.
60.30    (e) (f) A purchaser of tangible personal property or any items listed in section
60.31297A.63 that are shipped or brought to Minnesota by the purchaser has the burden
60.32of proving that the property was not purchased from a retailer for storage, use, or
60.33consumption in Minnesota.
60.34(f) (g) If a seller claims that certain sales are exempt and does not provide the
60.35certificate, information, or proof required by paragraph (b), clause (2), within 120 days
61.1after the date of the commissioner's request for substantiation, then the exemptions
61.2claimed by the seller that required substantiation are disallowed.
61.3EFFECTIVE DATE.This section is effective the day following final enactment.

61.4    Sec. 4. Minnesota Statutes 2010, section 297F.01, subdivision 23, is amended to read:
61.5    Subd. 23. Wholesale sales price. "Wholesale sales price" means the price stated on
61.6the price list in effect at the time of sale for which a manufacturer or person sells a tobacco
61.7product to a distributor, exclusive of any discount, promotional offer, or other reduction.
61.8For purposes of this subdivision, "price list" means the manufacturer's price at which
61.9tobacco products are made available for sale to all distributors on an ongoing basis at which
61.10a distributor purchases a tobacco product without any reduction for federal excise taxes,
61.11freight charges, discounts, packaging, or other reductions. Wholesale sales price includes
61.12the applicable federal excise tax regardless of whether it is included in the purchase price.
61.13EFFECTIVE DATE.This section is effective for purchases made after December
61.1431, 2012.

61.15    Sec. 5. Minnesota Statutes 2010, section 297G.04, subdivision 2, is amended to read:
61.16    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages
61.17is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year
61.18beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
61.19take the credit on the 18th day of each month, but the total credit allowed may not exceed
61.20in any fiscal year the lesser of:
61.21(1) the liability for tax; or
61.22(2) $115,000.
61.23For purposes of this subdivision, a "qualified brewer" means a brewer, whether
61.24or not located in this state, manufacturing less than 100,000 barrels of fermented malt
61.25beverages in the calendar year immediately preceding the calendar fiscal year for which
61.26the credit under this subdivision is claimed. In determining the number of barrels, all
61.27brands or labels of a brewer must be combined. All facilities for the manufacture of
61.28fermented malt beverages owned or controlled by the same person, corporation, or other
61.29entity must be treated as a single brewer. A brewer is owned or controlled when more than
61.3050 percent of the voting stock of each member of the group is directly or indirectly owned
61.31by a common owner or by common owners, whether they are corporate or noncorporate.
61.32EFFECTIVE DATE.This section is effective for claims filed after December
61.3331, 2012.

62.1    Sec. 6. Minnesota Statutes 2011 Supplement, section 297I.05, subdivision 7, is
62.2amended to read:
62.3    Subd. 7. Nonadmitted insurance premium tax. (a) A tax is imposed on surplus
62.4lines brokers. The rate of tax is equal to three percent of the gross premiums less return
62.5premiums paid by an insured whose home state is Minnesota.
62.6(b) A tax is imposed on persons, firms, or corporations a person, firm, corporation,
62.7or purchasing group as defined in section 60E.02, or any member of a purchasing group,
62.8that procure insurance directly from a nonadmitted insurer. The rate of tax is equal to two
62.9percent of the gross premiums less return premiums paid by an insured whose home
62.10state is Minnesota.
62.11(c) No state other than the home state of an insured may require any premium tax
62.12payment for nonadmitted insurance. When Minnesota is the home state of the insured,
62.13as provided under section 297I.01, 100 percent of the gross premiums are taxable in
62.14Minnesota with no allocation of the tax to other states.
62.15EFFECTIVE DATE.This section is effective for premiums received after
62.16December 31, 2012.

62.17    Sec. 7. Minnesota Statutes 2010, section 297I.05, subdivision 11, is amended to read:
62.18    Subd. 11. Retaliatory provisions. (a) If any other state or country imposes any
62.19taxes, fines, deposits, penalties, licenses, or fees upon any insurance companies of this
62.20state and their agents doing business in another state or country that are in addition to or in
62.21excess of those imposed by the laws of this state upon foreign insurance companies and
62.22their agents doing business in this state, the same taxes, fines, deposits, penalties, licenses,
62.23and fees are imposed upon every similar insurance company of that state or country and
62.24their agents doing or applying to do business in this state.
62.25(b) If any conditions precedent to the right to do business in any other state or
62.26country are imposed by the laws of that state or country, beyond those imposed upon
62.27foreign companies by the laws of this state, the same conditions precedent are imposed
62.28upon every similar insurance company of that state or country and their agents doing or
62.29applying to do business in that state.
62.30(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or
62.31fees" means an amount of money that is deposited in the general revenue fund of the state
62.32or other similar fund in another state or country and is not dedicated to a special purpose
62.33or use or money deposited in the general revenue fund of the state or other similar fund in
62.34another state or country and appropriated to the commissioner of commerce or insurance
63.1for the operation of the Department of Commerce or other similar agency with jurisdiction
63.2over insurance. Taxes, fines, deposits, penalties, licenses, or fees do not include:
63.3(1) special purpose obligations or assessments imposed in connection with particular
63.4kinds of insurance, including but not limited to assessments imposed in connection with
63.5residual market mechanisms; or
63.6(2) assessments made by the insurance guaranty association, life and health
63.7guarantee association, or similar association.
63.8(d) This subdivision applies to taxes imposed under subdivisions 1,; 3,; 4, 6, and; 12,
63.9paragraph (a), clauses (1) and (2); and 14.
63.10(e) This subdivision does not apply to insurance companies organized or domiciled
63.11in a state or country, the laws of which do not impose retaliatory taxes, fines, deposits,
63.12penalties, licenses, or fees or which grant, on a reciprocal basis, exemptions from
63.13retaliatory taxes, fines, deposits, penalties, licenses, or fees to insurance companies
63.14domiciled in this state.
63.15EFFECTIVE DATE.This section is effective the day following final enactment.

63.16    Sec. 8. Minnesota Statutes 2011 Supplement, section 297I.05, subdivision 12, is
63.17amended to read:
63.18    Subd. 12. Other entities. (a) A tax is imposed equal to two percent of:
63.19    (1) gross premiums less return premiums written for risks resident or located in
63.20Minnesota by a risk retention group;
63.21    (2) gross premiums less return premiums received by an attorney in fact acting
63.22in accordance with chapter 71A;
63.23    (3) gross premiums less return premiums received pursuant to assigned risk policies
63.24and contracts of coverage under chapter 79; and
63.25    (4) the direct funded premium received by the reinsurance association under section
63.2679.34 from self-insurers approved under section 176.181 and political subdivisions that
63.27self-insure; and.
63.28    (5) gross premiums less return premiums paid to an insurer other than a licensed
63.29insurance company or a surplus lines broker for coverage of risks resident or located in
63.30Minnesota by a purchasing group or any members of the purchasing group to a broker or
63.31agent for the purchasing group.
63.32    (b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The
63.33rate of tax is equal to two percent of the total amount of claims paid during the fund year,
63.34with no deduction for claims wholly or partially reimbursed through stop-loss insurance.
64.1    (c) A tax is imposed on a joint self-insurance plan operating under chapter 62H.
64.2The rate of tax is equal to two percent of the total amount of claims paid during the
64.3fund's fiscal year, with no deduction for claims wholly or partially reimbursed through
64.4stop-loss insurance.
64.5    (d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5,
64.6on the gross premiums less return premiums on all coverages received by an accountable
64.7provider network or agents of an accountable provider network in Minnesota, in cash or
64.8otherwise, during the year.
64.9EFFECTIVE DATE.This section is effective for premiums received after
64.10December 31, 2012.

64.11    Sec. 9. [297I.11] AUTOMOBILE THEFT PREVENTION SURCHARGE.
64.12    Subdivision 1. Surcharge. Each insurer engaged in the writing of policies of
64.13automobile insurance shall collect a surcharge, at the rate of 50 cents per vehicle
64.14for every six months of coverage, on each policy of automobile insurance providing
64.15comprehensive insurance coverage issued or renewed in this state. The surcharge may not
64.16be considered premium for any purpose, including the computation of premium tax or
64.17agents' commissions. The amount of the surcharge must be separately stated on either a
64.18billing or policy declaration sent to an insured. Insurers shall remit the revenue derived
64.19from this surcharge to the commissioner of revenue for purposes of the automobile theft
64.20prevention program described in section 65B.84. For purposes of this subdivision, "policy
64.21of automobile insurance" has the meaning given it in section 65B.14, covering only the
64.22following types of vehicles as defined in section 168.002:
64.23(1) a passenger automobile;
64.24(2) a pickup truck;
64.25(3) a van but not commuter vans as defined in section 168.126; or
64.26(4) a motorcycle,
64.27except that no vehicle with a gross vehicle weight in excess of 10,000 pounds is included
64.28within this definition.
64.29    Subd. 2. Automobile theft prevention account. A special revenue account in
64.30the state treasury shall be credited with the proceeds of the surcharge imposed under
64.31subdivision 1. Of the revenue in the account, $1,300,000 each year must be transferred to
64.32the general fund. Revenues in excess of $1,300,000 each year may be used only for the
64.33automobile theft prevention program described in section 65B.84.
65.1    Subd. 3. Collection and administration. The commissioner shall collect and
65.2administer the surcharge imposed by this section in the same manner as the taxes imposed
65.3by this chapter. The commissioner is appropriated annually, from the automobile theft
65.4prevention special revenue account, an amount to reimburse the Department of Revenue
65.5for the costs incurred in administering and collecting the surcharge imposed under
65.6subdivision 1.
65.7EFFECTIVE DATE.This section is effective for premiums collected after June
65.830, 2012.

65.9    Sec. 10. Minnesota Statutes 2011 Supplement, section 297I.30, subdivision 1, is
65.10amended to read:
65.11    Subdivision 1. General rule. On or before March 1, every taxpayer subject to
65.12taxation under section 297I.05, subdivisions 1 to 5,; 7, paragraph (b),; 12, paragraphs (a),
65.13clauses (1) to (4), (b), (c), and (d),; and 14, shall file an annual return for the preceding
65.14calendar year in the form prescribed by the commissioner.
65.15EFFECTIVE DATE.This section is effective for premiums received after
65.16December 31, 2012.

65.17    Sec. 11. Minnesota Statutes 2011 Supplement, section 297I.30, subdivision 2, is
65.18amended to read:
65.19    Subd. 2. Surplus lines brokers and purchasing groups. On or before February
65.2015 and August 15 of each year, every surplus lines broker subject to taxation under
65.21section 297I.05, subdivision 7, paragraph (a), and every purchasing group or member of
65.22a purchasing group subject to tax under section 297I.05, subdivision 12, paragraph (a),
65.23clause (5), shall file a return with the commissioner for the preceding six-month period
65.24ending December 31, or June 30, in the form prescribed by the commissioner.
65.25EFFECTIVE DATE.This section is effective for premiums received after
65.26December 31, 2012.

65.27    Sec. 12. Minnesota Statutes 2010, section 297I.30, is amended by adding a subdivision
65.28to read:
65.29    Subd. 10. Automobile theft prevention surcharge. On or before May 1, August
65.301, November 1, and February 1 of each year, every insurer required to pay the surcharge
65.31under section 297I.11 shall file a return with the commissioner for the preceding
66.1three-month period ending March 31, June 30, September 30, and December 31, in the
66.2form prescribed by the commissioner.
66.3EFFECTIVE DATE.This section is effective for premiums collected after June
66.430, 2012.

66.5    Sec. 13. Minnesota Statutes 2010, section 383A.80, subdivision 4, is amended to read:
66.6    Subd. 4. Expiration. The authority to impose the tax under this section expires
66.7January 1, 2013 2015.
66.8EFFECTIVE DATE.This section is effective the day following final enactment.

66.9    Sec. 14. Minnesota Statutes 2010, section 383B.80, subdivision 4, is amended to read:
66.10    Subd. 4. Expiration. The authority to impose the tax under this section expires
66.11January 1, 2013 2015.
66.12EFFECTIVE DATE.This section is effective the day following final enactment.

66.13    Sec. 15. Laws 2011, First Special Session chapter 7, article 10, section 7, is amended to
66.14read:
66.15    Sec. 7. PURPOSE STATEMENTS; TAX EXPENDITURES.
66.16    Subdivision 1. Authority. This section is intended to fulfill the requirement under
66.17Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax
66.18expenditure provide a purpose for the tax expenditure and a standard or goal against
66.19which its effectiveness may be measured.
66.20    Subd. 2. Estate tax exclusion for qualified farm and small business property.
66.21The provisions of article 1, sections 3 through 8, providing an estate tax subtraction of
66.22the combined value of qualified farm property and qualified small business property up
66.23to $4,000,000 from the federal adjusted taxable estate, are intended to provide estate tax
66.24reductions to owner-operators of family farms and small businesses to allow retention and
66.25continued operation of those farms and businesses by the families.
66.26    Subd. 3. Federal update. The provisions of article 2, conforming Minnesota
66.27individual income, corporate franchise, and estate taxes to changes in federal law, are
66.28intended to simplify compliance with and administration of those taxes.
66.29    Subd. 4. Sales tax exemption for ring tones. The provisions of article 3, section 1,
66.30exempting ring tones from sales taxation are intended (1) to bring the state of Minnesota
66.31into compliance with the requirements of the streamlined sales tax agreement and (2) to
66.32simplify the tax and to make compliance with the sales tax by remote sellers easier to
67.1encourage congress to enact federal legislation allowing state and local governments to
67.2require remote sellers to collect use tax on behalf of the state and its local governments.
67.3    Subd. 5. Materials used in minerals processing equipment. The provisions of
67.4article 3, section 6, extending the sales tax exemption for certain equipment milling and
67.5grinding materials used in processing of minerals is intended to provide sales tax treatment
67.6for the nonferrous mining industry equivalent to that provided to the taconite mining
67.7industry. Because these purchases are intermediate inputs to production, the legislature
67.8does not consider this allowance to be a tax expenditure.
67.9    Subd. 6. Sales tax exemption for on resold admission tickets. The provisions
67.10of article 3, section 8, providing an exemption for resold admission tickets by allowing
67.11resale ticket sellers (ticket resellers) to claim a refund or provide a credit to the purchaser
67.12of resold tickets for the value of sales tax paid on the original ticket, is intended to reduce
67.13the competitive advantage of ticket resellers that do not have nexus in Minnesota requiring
67.14them to collect Minnesota sales tax and to ensure while ensuring that resold the overall
67.15sales tax remitted on admission tickets that are subject to sold to individuals or ticket
67.16resellers, and then finally resold by ticket resellers, equals or exceeds sales tax only on the
67.17full, sales price on the final retail price sale of the tickets. As a result, the legislature does
67.18not consider this to be a tax expenditure.
67.19    Subd. 7. Sales tax exemption for sales to townships. The provisions of article 3,
67.20sections 10 and 11, exempting goods and services purchased by townships, is intended
67.21to provide state assistance for the functions of Minnesota townships not exempted under
67.22current law.
67.23    Subd. 8. Sales tax exemption; water purchases. The provisions of article 3,
67.24section 11, exempting water purchases by fire departments, fire protection districts, and
67.25fire companies is intended to provide state assistance for this public safety function
67.26of Minnesota local governments.
67.27    Subd. 9. Emergency vehicles. The provisions of article 3, section 12, extending
67.28the sales tax exemption for lease of ambulances to other emergency vehicles are intended
67.29to clarify the exemption and to provide consistent treatment of emergency vehicles. The
67.30underlying purpose of the exemption is to provide state assistance to local governments
67.31and other organizations that provide emergency response services.
67.32EFFECTIVE DATE.This section is effective retroactively from July 21, 2011.

67.33    Sec. 16. REPEALER.
67.34Minnesota Statutes 2010, section 168A.40, subdivisions 3 and 4, are repealed.
68.1EFFECTIVE DATE.This section is effective for premiums collected after June
68.230, 2012.

68.3ARTICLE 5
68.4DEPARTMENT POLICY AND TECHNICAL: MINERALS

68.5    Section 1. Minnesota Statutes 2011 Supplement, section 272.02, subdivision 97,
68.6is amended to read:
68.7    Subd. 97. Property used in business of mining subject to net proceeds tax. The
68.8following property used in the business of mining that is subject to the net proceeds tax
68.9under section 298.015 is exempt:
68.10(1) deposits of ores, metals, and minerals and the lands in which they are contained;
68.11(2) all real and personal property used in mining, quarrying, producing, or refining
68.12ores, minerals, or metals, including lands occupied by or used in connection with the
68.13mining, quarrying, production, or ore refining facilities; and
68.14(3) concentrate or direct reduced ore.
68.15This exemption applies for each year that a person subject to tax under section
68.16298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or
68.17minerals.
68.18EFFECTIVE DATE.This section is effective the day following final enactment.

68.19    Sec. 2. Minnesota Statutes 2011 Supplement, section 298.01, subdivision 3, is
68.20amended to read:
68.21    Subd. 3. Occupation tax; other ores. Every person engaged in the business of
68.22mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
68.23taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
68.24in this subdivision. For purposes of this subdivision, mining includes the application of
68.25hydrometallurgical processes. Hydrometallurgical processes are processes that extract
68.26the ores, metals, or minerals, by use of aqueous solutions that leach, concentrate, and
68.27recover the ore, metal, or mineral. The tax is determined in the same manner as the tax
68.28imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17,
68.29subdivision 4
, and 290.191, subdivision 2, do not apply, and the occupation tax must
68.30be computed by applying to taxable income the rate of 2.45 percent. A person subject
68.31to occupation tax under this section shall apportion its net income on the basis of the
68.32percentage obtained by taking the sum of:
69.1(1) 75 percent of the percentage which the sales made within this state in connection
69.2with the trade or business during the tax period are of the total sales wherever made in
69.3connection with the trade or business during the tax period;
69.4(2) 12.5 percent of the percentage which the total tangible property used by the
69.5taxpayer in this state in connection with the trade or business during the tax period is of
69.6the total tangible property, wherever located, used by the taxpayer in connection with the
69.7trade or business during the tax period; and
69.8(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
69.9in this state or paid in respect to labor performed in this state in connection with the trade
69.10or business during the tax period are of the taxpayer's total payrolls paid or incurred in
69.11connection with the trade or business during the tax period.
69.12The tax is in addition to all other taxes.
69.13EFFECTIVE DATE.This section is effective the day following final enactment.

69.14    Sec. 3. Minnesota Statutes 2010, section 298.018, subdivision 2, is amended to read:
69.15    Subd. 2. Outside taconite assistance area. The proceeds of the tax paid under
69.16sections 298.015 to 298.017 on ores, metals, or minerals and energy resources mined
69.17or extracted outside of the taconite assistance area defined in section 273.1341, shall
69.18be deposited in the general fund.
69.19EFFECTIVE DATE.This section is effective the day following final enactment.

69.20ARTICLE 6
69.21DEPARTMENT POLICY AND TECHNICAL: MISCELLANEOUS

69.22    Section 1. Minnesota Statutes 2010, section 16A.46, is amended to read:
69.2316A.46 LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.
69.24    Subdivision 1. Duplicate warrant. The commissioner may issue a duplicate
69.25of an unpaid warrant to an owner if the owner certifies that the original was lost or
69.26destroyed. The commissioner may require certification be documented by affidavit.
69.27The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the
69.28commissioner acts in good faith the commissioner is not liable, whether the application is
69.29granted or denied.
69.30    Subd. 2. Original warrant is void. When the duplicate is issued, the original is
69.31void. The commissioner may require an indemnity bond from the applicant to the state for
69.32double the amount of the warrant for anyone damaged by the issuance of the duplicate.
70.1The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the
70.2commissioner acts in good faith the commissioner is not liable, whether the application is
70.3granted or denied is not liable to any holder who took the void original warrant for value,
70.4whether the commissioner required an indemnity bond from the applicant or not.
70.5    Subd. 3. Unpaid refund or rebate. For an unpaid refund or rebate issued under a
70.6tax law administered by the commissioner of revenue that has been lost or destroyed, an
70.7affidavit is not required for the commissioner to issue a duplicate if the duplicate is issued
70.8to the same name and Social Security number as the original warrant and that information
70.9is verified on a tax return filed by the recipient.
70.10EFFECTIVE DATE.This section is effective the day following final enactment.

70.11    Sec. 2. Minnesota Statutes 2010, section 270C.38, subdivision 1, is amended to read:
70.12    Subdivision 1. Sufficient notice. (a) If no method of notification of a written
70.13determination or action of the commissioner is otherwise specifically provided for by
70.14law, notice of the determination or action sent postage prepaid by United States mail to
70.15the taxpayer or other person affected by the determination or action at the taxpayer's
70.16or person's last known address, is sufficient. If the taxpayer or person being notified is
70.17deceased or is under a legal disability, or, in the case of a corporation being notified that
70.18has terminated its existence, notice to the last known address of the taxpayer, person, or
70.19corporation is sufficient, unless the department has been provided with a new address by a
70.20party authorized to receive notices from the commissioner.
70.21(b) If a taxpayer or other person agrees to accept notification by electronic means,
70.22notice of a determination or action of the commissioner sent by electronic mail to the
70.23taxpayer's or person's last known electronic mailing address as provided for in section
70.24325L.08 is sufficient.
70.25EFFECTIVE DATE.This section is effective the day following final enactment.

70.26    Sec. 3. Minnesota Statutes 2010, section 270C.42, subdivision 2, is amended to read:
70.27    Subd. 2. Penalty for failure to pay electronically. In addition to other applicable
70.28penalties imposed by law, after notification from the commissioner to the taxpayer that
70.29payments for a tax payable to the commissioner are required to be made by electronic
70.30means, and the payments are remitted by some other means, there is a penalty in the
70.31amount of five percent of each payment that should have been remitted electronically.
70.32After the commissioner's initial notification to the taxpayer that payments are required to
70.33be made by electronic means, the commissioner is not required to notify the taxpayer in
71.1subsequent periods if the initial notification specified the amount of tax liability at which a
71.2taxpayer is required to remit payments by electronic means. The penalty can be abated
71.3under the abatement procedures prescribed in section 270C.34 if the failure to remit the
71.4payment electronically is due to reasonable cause. The penalty bears interest at the rate
71.5specified in section 270C.40 from the due date of the payment of the tax provided in
71.6section 270C.40, subdivision 3, to the date of payment of the penalty.
71.7EFFECTIVE DATE.This section is effective the day following final enactment.

71.8    Sec. 4. Minnesota Statutes 2010, section 270C.69, subdivision 1, is amended to read:
71.9    Subdivision 1. Notice and procedures. (a) The commissioner may, within five years
71.10after the date of assessment of the tax, or if a lien has been filed under section 270C.63,
71.11within the statutory period for enforcement of the lien, give notice to any employer
71.12deriving income which has a taxable situs in this state regardless of whether the income is
71.13exempt from taxation, that an employee of that employer is delinquent in a certain amount
71.14with respect to any taxes, including penalties, interest, and costs. The commissioner can
71.15proceed under this section only if the tax is uncontested or if the time for appeal of the tax
71.16has expired. The commissioner shall not proceed under this section until the expiration of
71.1730 days after mailing to the taxpayer, at the taxpayer's last known address, a written notice
71.18of (1) the amount of taxes, interest, and penalties due from the taxpayer and demand for
71.19their payment, and (2) the commissioner's intention to require additional withholding by
71.20the taxpayer's employer pursuant to this section. The effect of the notice shall expire one
71.21year after it has been mailed to the taxpayer provided that the notice may be renewed by
71.22mailing a new notice which is in accordance with this section. The renewed notice shall
71.23have the effect of reinstating the priority of the original claim. The notice to the taxpayer
71.24shall be in substantially the same form as that provided in section 571.72. The notice
71.25shall further inform the taxpayer of the wage exemptions contained in section 550.37,
71.26subdivision 14
. If no statement of exemption is received by the commissioner within 30
71.27days from the mailing of the notice, the commissioner may proceed under this section.
71.28The notice to the taxpayer's employer may be served by mail or by delivery by an agent of
71.29the department and shall be in substantially the same form as provided in section 571.75.
71.30Upon receipt of notice, the employer shall withhold from compensation due or to become
71.31due to the employee, the total amount shown by the notice, subject to the provisions of
71.32section 571.922. The employer shall continue to withhold each pay period until the notice
71.33is released by the commissioner under section 270C.7109. Upon receipt of notice by the
71.34employer, the claim of the state of Minnesota shall have priority over any subsequent
71.35garnishments or wage assignments. The commissioner may arrange between the employer
72.1and the employee for withholding a portion of the total amount due the employee each pay
72.2period, until the total amount shown by the notice plus accrued interest has been withheld.
72.3(b) The "compensation due" any employee is defined in accordance with the
72.4provisions of section 571.921. The maximum withholding allowed under this section for
72.5any one pay period shall be decreased by any amounts payable pursuant to a garnishment
72.6action with respect to which the employer was served prior to being served with the notice
72.7of delinquency and any amounts covered by any irrevocable and previously effective
72.8assignment of wages; the employer shall give notice to the commissioner of the amounts
72.9and the facts relating to such assignments within ten days after the service of the notice of
72.10delinquency on the form provided by the commissioner as noted in this section.
72.11(c) Within ten days after the expiration of such pay period, the employer shall remit
72.12to the commissioner, on a form and in the manner prescribed by the commissioner, the
72.13amount withheld during each pay period under this section. The employer must file all
72.14wage levy disclosure forms and remit all wage levy payments by electronic means. The
72.15requirement in this section to use electronic means may be waived by the commissioner
72.16if the commissioner determines that the requirement causes an undue hardship. The
72.17employer must request the waiver in the form and manner prescribed by the commissioner
72.18before making their payment or submitting their disclosure form by mail. In determining
72.19whether the electronic means requirement causes an undue hardship the commissioner
72.20may consider unusual circumstances which may prevent the employer from using
72.21electronic means and any other factor that the commissioner determines is pertinent.
72.22"Unusual circumstances" includes not having access to a telephone or a computer, being
72.23physically unable to use a telephone or a computer, or the telephone or computer system
72.24available to the employer is incompatible with the department's system used for electronic
72.25filing or payments.
72.26EFFECTIVE DATE.This section is effective for wage levy disclosures or wage
72.27levy payments filed or made after December 31, 2012.

72.28    Sec. 5. Minnesota Statutes 2010, section 287.385, subdivision 7, is amended to read:
72.29    Subd. 7. Interest on penalties. A penalty imposed under this chapter bears interest
72.30from the date payment was required to be paid, including any extensions, provided in
72.31section 270C.40, subdivision 3, to the date of payment of the penalty.
72.32EFFECTIVE DATE.This section is effective the day following final enactment.

72.33    Sec. 6. Minnesota Statutes 2010, section 289A.55, subdivision 9, is amended to read:
73.1    Subd. 9. Interest on penalties. (a) A penalty imposed under section 289A.60,
73.2subdivision 1
, 2, 2a, 4, 5, 6, or 21 bears interest from the date the return or payment
73.3was required to be filed or paid, including any extensions provided in section 270C.40,
73.4subdivision 3, to the date of payment of the penalty.
73.5(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
73.660 days from the date of notice. In that case interest is imposed from the date of notice
73.7to the date of payment.
73.8EFFECTIVE DATE.This section is effective the day following final enactment.

73.9    Sec. 7. Minnesota Statutes 2010, section 289A.60, subdivision 4, is amended to read:
73.10    Subd. 4. Substantial understatement of liability; penalty. (a) The commissioner
73.11of revenue shall impose a penalty for substantial understatement of any tax payable to the
73.12commissioner, except a tax imposed under chapter 297A.
73.13(b) There must be added to the tax an amount equal to 20 percent of the amount of any
73.14underpayment attributable to the understatement. There is a substantial understatement of
73.15tax for the period if the amount of the understatement for the period exceeds the greater of:
73.16(1) ten percent of the tax required to be shown on the return for the period; or
73.17(2)(i) $10,000 in the case of a mining company or a corporation, other than an S
73.18corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or
73.19section 298.01 or 298.015, or
73.20(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or
73.21a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015.
73.22(c) For a corporation, other than an S corporation, there is also a substantial
73.23understatement of tax for any taxable year if the amount of the understatement for the
73.24taxable year exceeds the lesser of:
73.25(1) ten percent of the tax required to be shown on the return for the taxable year
73.26(or, if greater, $10,000); or
73.27(2) $10,000,000.
73.28(d) The term "understatement" means the excess of the amount of the tax required
73.29to be shown on the return for the period, over the amount of the tax imposed that is
73.30shown on the return. The excess must be determined without regard to items to which
73.31subdivision 27 applies. The amount of the understatement shall be reduced by that part of
73.32the understatement that is attributable to the tax treatment of any item by the taxpayer if
73.33(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to
73.34which the relevant facts affecting the item's tax treatment are adequately disclosed in the
73.35return or in a statement attached to the return and (ii) there is a reasonable basis for the tax
74.1treatment of the item. The exception for substantial authority under clause (1) does not
74.2apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the
74.3Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment
74.4of an item attributable to a multiple-party financing transaction if the treatment does not
74.5clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B)
74.6of the Internal Revenue Code. The special rules in cases involving tax shelters provided in
74.7section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax
74.8shelter the principal purpose of which is the avoidance or evasion of state taxes.
74.9(e) The commissioner may abate all or any part of the addition to the tax provided
74.10by this section on a showing by the taxpayer that there was reasonable cause for the
74.11understatement, or part of it, and that the taxpayer acted in good faith. The additional tax
74.12and penalty shall bear interest at the rate as specified in section 270C.40 from the time
74.13the tax should have been paid until paid.
74.14EFFECTIVE DATE.This section is effective the day following final enactment.

74.15    Sec. 8. Minnesota Statutes 2010, section 296A.22, is amended to read:
74.16296A.22 NONPAYMENT OF TAX; CIVIL PENALTIES.
74.17    Subdivision 1. Penalty for failure to pay tax, general rule. Upon the failure of
74.18any person to pay any tax or fee when due, a penalty of one percent per day for the first
74.19ten days of delinquency shall accrue, and thereafter the tax, fees, and penalty shall bear
74.20interest at the rate specified in section 270C.40 until paid.
74.21    Subd. 2. Collection authority. Upon such a failure to pay any tax or fees within the
74.22time provided by this chapter, all taxes and fees imposed by this chapter shall become
74.23immediately due and payable, and may be collected as provided in chapter 270C.
74.24    Subd. 3. Operating without license. If any person operates as a distributor, special
74.25fuel dealer, bulk purchaser, or motor carrier without first securing the license required
74.26under this chapter, any tax or fee imposed by this chapter shall become immediately due
74.27and payable. A penalty of 25 percent is imposed upon the tax and fee due. The tax, and
74.28fees, and penalty shall bear interest at the rate specified in section 270C.40. The penalty
74.29imposed in this subdivision shall bear interest from the date provided in section 270C.40,
74.30subdivision 3, to the date of payment of the penalty.
74.31    Subd. 4. Unlawful use of dyed fuel. (a) If any dyed fuel is sold or held for sale by a
74.32person for any use which the person knows or has reason to know is not a nontaxable use
74.33of the fuel; or if any dyed fuel is held for use or used in a licensed motor vehicle or for any
74.34other use by a person for a use other than a nontaxable use and the person knew, or had
75.1reason to know, that the fuel was so dyed; or if a person willfully alters, or attempts to
75.2alter, the strength or composition of any dye or marking in any dyed fuel, then the person
75.3shall pay a penalty in addition to the tax, if any.
75.4(b) Except as provided in paragraph (c), the amount of penalty under paragraph (a)
75.5for each act is the greater of $1,000, or $10 for each gallon of dyed fuel involved.
75.6(c) With regard to a multiple violation under paragraph (a), the penalty shall be
75.7applied by increasing the amount in paragraph (b) by the product of (1) such amount, and
75.8(2) the number of prior penalties, if any, imposed by this section on the person, or a related
75.9person, or any predecessor of the person or related person.
75.10(d) If a penalty is imposed under this subdivision on a business entity, each officer,
75.11employee, or agent of the entity who willfully participated in any act giving rise to the
75.12penalty is jointly and severally liable with the entity for the penalty.
75.13    Subd. 5. Receiver appointed. In the event a suit is instituted as provided in
75.14subdivision 2, the court shall, upon application, appoint a receiver of the property and
75.15business of the delinquent defendant for the purpose of impounding the same as security
75.16for any judgment which has been or may be recovered.
75.17    Subd. 6. Sale prohibited under certain conditions. No petroleum product shall
75.18be unloaded or sold by any person or distributor whose tax and fees are the basis for
75.19collection action under subdivision 2.
75.20    Subd. 7. Payment of penalties. The penalties imposed by this section are collected
75.21and paid in the same manner as taxes.
75.22    Subd. 8. Penalties are additional. The civil penalties imposed by this section are in
75.23addition to the criminal penalties imposed by this chapter.
75.24    Subd. 9. Abatement of penalty. (a) The commissioner may by written order
75.25abate any penalty imposed under this section, if in the commissioner's opinion there is
75.26reasonable cause to do so.
75.27(b) A request for abatement of penalty must be filed with the commissioner within
75.2860 days of the date the notice stating that a penalty has been imposed was mailed to
75.29the taxpayer's last known address.
75.30(c) If the commissioner issues an order denying a request for abatement of penalty,
75.31the taxpayer may file an administrative appeal as provided in section 270C.35 or appeal to
75.32Tax Court as provided in section 271.06. If the commissioner does not issue an order on
75.33the abatement request within 60 days from the date the request is received, the taxpayer
75.34may appeal to Tax Court as provided in section 271.06.
75.35EFFECTIVE DATE.This section is effective the day following final enactment.

76.1    Sec. 9. Minnesota Statutes 2010, section 297E.14, subdivision 7, is amended to read:
76.2    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297E.12,
76.3subdivision 1
, 2, 3, 4, or 5, bears interest from the date the return or payment was required
76.4to be filed or paid, including any extensions provided in section 270C.40, subdivision 3, to
76.5the date of payment of the penalty.
76.6(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
76.7ten days from the date of notice. In that case interest is imposed from the date of notice
76.8to the date of payment.
76.9EFFECTIVE DATE.This section is effective the day following final enactment.

76.10    Sec. 10. Minnesota Statutes 2010, section 297F.09, subdivision 9, is amended to read:
76.11    Subd. 9. Interest. The amount of tax not timely paid, together with any penalty
76.12imposed in this section, bears interest at the rate specified in section 270C.40 from the
76.13time such tax should have been paid until paid. The penalty imposed in this section bears
76.14interest from the date provided in section 270C.40, subdivision 3, to the date of payment
76.15of the penalty. Any interest and penalty is added to the tax and collected as a part of it.
76.16EFFECTIVE DATE.This section is effective the day following final enactment.

76.17    Sec. 11. Minnesota Statutes 2010, section 297F.18, subdivision 7, is amended to read:
76.18    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297F.19,
76.19subdivisions 2 to 7
, bears interest from the date the return or payment was required to be
76.20filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
76.21date of payment of the penalty.
76.22(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
76.23ten days from the date of the notice. In that case interest is imposed from the date of notice
76.24to the date of payment.
76.25EFFECTIVE DATE.This section is effective the day following final enactment.

76.26    Sec. 12. Minnesota Statutes 2010, section 297G.09, subdivision 8, is amended to read:
76.27    Subd. 8. Interest. The amount of tax not timely paid, together with any penalty
76.28imposed by this chapter, bears interest at the rate specified in section 270C.40 from the
76.29time the tax should have been paid until paid. Any penalty imposed by this chapter bears
76.30interest from the date provided in section 270C.40, subdivision 3, to the date of payment
76.31of the penalty. Any interest and penalty is added to the tax and collected as a part of it.
77.1EFFECTIVE DATE.This section is effective the day following final enactment.

77.2    Sec. 13. Minnesota Statutes 2010, section 297G.17, subdivision 7, is amended to read:
77.3    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297G.18,
77.4subdivisions 2 to 7
, bears interest from the date the return or payment was required to be
77.5filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
77.6date of payment of the penalty.
77.7(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
77.8ten days from the date of the notice. In that case interest is imposed from the date of notice
77.9to the date of payment.
77.10EFFECTIVE DATE.This section is effective the day following final enactment.

77.11    Sec. 14. Minnesota Statutes 2010, section 297I.80, subdivision 1, is amended to read:
77.12    Subdivision 1. Payable to commissioner. (a) When interest is required under this
77.13section, interest is computed at the rate specified in section 270C.40.
77.14(b) If a tax or surcharge is not paid within the time named by law for payment, the
77.15unpaid tax or surcharge bears interest from the date the tax or surcharge should have been
77.16paid until the date the tax or surcharge is paid.
77.17(c) Whenever a taxpayer is liable for additional tax or surcharge because of a
77.18redetermination by the commissioner or other reason, the additional tax or surcharge
77.19bears interest from the time the tax or surcharge should have been paid until the date the
77.20tax or surcharge is paid.
77.21(d) A penalty bears interest from the date the return or payment was required to be
77.22filed or paid provided in section 270C.40, subdivision 3, to the date of payment of the
77.23penalty.
77.24EFFECTIVE DATE.This section is effective the day following final enactment.

77.25ARTICLE 7
77.26ECONOMIC DEVELOPMENT PROVISIONS CLEANUP

77.27    Section 1. Minnesota Statutes 2010, section 16C.16, subdivision 7, is amended to read:
77.28    Subd. 7. Economically disadvantaged areas. (a) Except as otherwise provided in
77.29paragraph (b), the commissioner may award up to a six percent preference in the amount
77.30bid on state procurement to small businesses located in an economically disadvantaged
77.31area.
78.1(b) The commissioner may award up to a four percent preference in the amount bid
78.2on state construction to small businesses located in an economically disadvantaged area.
78.3(c) A business is located in an economically disadvantaged area if:
78.4(1) the owner resides in or the business is located in a county in which the median
78.5income for married couples is less than 70 percent of the state median income for married
78.6couples;
78.7(2) the owner resides in or the business is located in an area designated a labor
78.8surplus area by the United States Department of Labor; or
78.9(3) the business is a certified rehabilitation facility or extended employment provider
78.10as described in chapter 268A.
78.11(d) The commissioner may designate one or more areas designated as targeted
78.12neighborhoods under section 469.202 or as border city enterprise zones under section
78.13469.167 469.166 as economically disadvantaged areas for purposes of this subdivision
78.14if the commissioner determines that this designation would further the purposes of this
78.15section. If the owner of a small business resides or is employed in a designated area, the
78.16small business is eligible for any preference provided under this subdivision.
78.17(e) The Department of Revenue shall gather data necessary to make the
78.18determinations required by paragraph (c), clause (1), and shall annually certify counties
78.19that qualify under paragraph (c), clause (1). An area designated a labor surplus area
78.20retains that status for 120 days after certified small businesses in the area are notified of
78.21the termination of the designation by the United States Department of Labor.

78.22    Sec. 2. Minnesota Statutes 2010, section 41A.036, subdivision 2, is amended to read:
78.23    Subd. 2. Small business development loans; preferences. The following eligible
78.24small businesses have preference among all business applicants for small business
78.25development loans:
78.26(1) businesses located in rural areas of the state that are experiencing the most
78.27severe unemployment rates in the state;
78.28(2) businesses that are likely to expand and provide additional permanent
78.29employment in rural areas of the state, or enhance the quality of existing jobs in those
78.30areas;
78.31(3) businesses located in border communities that experience a competitive
78.32disadvantage due to location;
78.33(4) businesses that have been unable to obtain traditional financial assistance due to
78.34a disadvantageous location, minority ownership, or other factors rather than due to the
78.35business having been considered a poor financial risk;
79.1(5) businesses that utilize state resources and reduce state dependence on outside
79.2resources, and that produce products or services consistent with the long-term social and
79.3economic needs of the state; and
79.4(6) businesses located in designated border city enterprise zones, as described in
79.5section 469.168 469.166.

79.6    Sec. 3. Minnesota Statutes 2010, section 117.025, subdivision 10, is amended to read:
79.7    Subd. 10. Public service corporation. "Public service corporation" means a
79.8utility, as defined by section 216E.01, subdivision 10; gas, electric, telephone, or cable
79.9communications company; cooperative association; natural gas pipeline company;
79.10crude oil or petroleum products pipeline company; municipal utility; municipality when
79.11operating its municipally owned utilities; joint venture created pursuant to section 452.25
79.12or 452.26; or municipal power or gas agency. Public service corporation also means a
79.13municipality or public corporation when operating an airport under chapter 360 or 473, a
79.14common carrier, a watershed district, or a drainage authority. Public service corporation
79.15also means an entity operating a regional distribution center within an international
79.16economic development zone designated under section 469.322.

79.17    Sec. 4. Minnesota Statutes 2010, section 270B.14, subdivision 3, is amended to read:
79.18    Subd. 3. Administration of enterprise, job opportunity, and biotechnology
79.19and health sciences industry zone programs. The commissioner may disclose return
79.20information relating to the taxes imposed by chapters 290 and 297A to the Department of
79.21Employment and Economic Development or a municipality receiving an with a border
79.22city enterprise zone designation as defined under section 469.169 469.166, but only as
79.23necessary to administer the funding limitations under section 469.169, subdivision 7, or
79.24to the Department of Employment and Economic Development and appropriate officials
79.25from the local government units in which a qualified business is located but only as
79.26necessary to enforce the job opportunity building zone benefits under section 469.315, or
79.27biotechnology and health sciences industry zone benefits under section 469.336.

79.28    Sec. 5. Minnesota Statutes 2010, section 272.02, subdivision 77, is amended to read:
79.29    Subd. 77. Property of housing and redevelopment authorities. Property of
79.30projects of housing and redevelopment authorities are exempt to the extent permitted by
79.31sections section 469.042, subdivision 1, and 469.043, subdivisions 2 and 5.

79.32    Sec. 6. Minnesota Statutes 2010, section 273.13, subdivision 24, is amended to read:
80.1    Subd. 24. Class 3. (a) Commercial and industrial property and utility real and
80.2personal property is class 3a.
80.3(1) Except as otherwise provided, each parcel of commercial, industrial, or utility
80.4real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent
80.5of the remaining market value. In the case of contiguous parcels of property owned by the
80.6same person or entity, only the value equal to the first-tier value of the contiguous parcels
80.7qualifies for the reduced class rate, except that contiguous parcels owned by the same
80.8person or entity shall be eligible for the first-tier value class rate on each separate business
80.9operated by the owner of the property, provided the business is housed in a separate
80.10structure. For the purposes of this subdivision, the first tier means the first $150,000 of
80.11market value. Real property owned in fee by a utility for transmission line right-of-way
80.12shall be classified at the class rate for the higher tier.
80.13For purposes of this subdivision, parcels are considered to be contiguous even if
80.14they are separated from each other by a road, street, waterway, or other similar intervening
80.15type of property. Connections between parcels that consist of power lines or pipelines do
80.16not cause the parcels to be contiguous. Property owners who have contiguous parcels of
80.17property that constitute separate businesses that may qualify for the first-tier class rate shall
80.18notify the assessor by July 1, for treatment beginning in the following taxes payable year.
80.19(2) All personal property that is: (i) part of an electric generation, transmission, or
80.20distribution system; or (ii) part of a pipeline system transporting or distributing water, gas,
80.21crude oil, or petroleum products; and (iii) not described in clause (3), and all railroad
80.22operating property has a class rate as provided under clause (1) for the first tier of market
80.23value and the remaining market value. In the case of multiple parcels in one county that
80.24are owned by one person or entity, only one first tier amount is eligible for the reduced rate.
80.25(3) The entire market value of personal property that is: (i) tools, implements, and
80.26machinery of an electric generation, transmission, or distribution system; (ii) tools,
80.27implements, and machinery of a pipeline system transporting or distributing water, gas,
80.28crude oil, or petroleum products; or (iii) the mains and pipes used in the distribution of
80.29steam or hot or chilled water for heating or cooling buildings, has a class rate as provided
80.30under clause (1) for the remaining market value in excess of the first tier.
80.31(b) Employment property defined in section 469.166, during the period provided
80.32in section 469.170, shall constitute class 3b. The class rates for class 3b property are
80.33determined under paragraph (a).

80.34    Sec. 7. Minnesota Statutes 2010, section 273.1398, subdivision 4, is amended to read:
81.1    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
81.2class 4a, and class 3a, and class 3b property qualifies for a disparity reduction credit if: (1)
81.3the property is located in a border city that has an enterprise zone designated pursuant to
81.4section 469.168, subdivision 4, as defined in section 469.166; (2) the property is located
81.5in a city with a population greater than 2,500 and less than 35,000 according to the
81.61980 decennial census; (3) the city is adjacent to a city in another state or immediately
81.7adjacent to a city adjacent to a city in another state; and (4) the adjacent city in the
81.8other state has a population of greater than 5,000 and less than 75,000 according to the
81.91980 decennial census.
81.10    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
81.11property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class
81.123b property to 2.3 percent of market value.
81.13    (c) The county auditor shall annually certify the costs of the credits to the
81.14Department of Revenue. The department shall reimburse local governments for the
81.15property taxes forgone as the result of the credits in proportion to their total levies.

81.16    Sec. 8. Minnesota Statutes 2010, section 276A.01, subdivision 3, is amended to read:
81.17    Subd. 3. Commercial-industrial property. "Commercial-industrial property"
81.18means the following categories of property, as defined in section 273.13, excluding that
81.19portion of the property (i) that may, by law, constitute the tax base for a tax increment
81.20pledged pursuant to section 469.042 or 469.162 or sections 469.174 to 469.178,
81.21certification of which was requested prior to May 1, 1996, to the extent and while the tax
81.22increment is so pledged; or (ii) that is exempt from taxation under section 272.02:
81.23    (1) that portion of class 5 property consisting of unmined iron ore and low-grade
81.24iron-bearing formations as defined in section 273.14, tools, implements, and machinery,
81.25except the portion of high voltage transmission lines, the value of which is deducted from
81.26net tax capacity under section 273.425; and
81.27    (2) that portion of class 3 and class 5 property which is either used or zoned for
81.28use for any commercial or industrial purpose, including property that becomes taxable
81.29under section 298.25, except for such property which is, or, in the case of property under
81.30construction, will when completed be used exclusively for residential occupancy and
81.31the provision of services to residential occupants thereof. Property must be considered
81.32as used exclusively for residential occupancy only if each of not less than 80 percent
81.33of its occupied residential units is, or, in the case of property under construction, will
81.34when completed be occupied under an oral or written agreement for occupancy over a
81.35continuous period of not less than 30 days.
82.1    If the classification of property prescribed by section 273.13 is modified by
82.2legislative amendment, the references in this subdivision are to the successor class or
82.3classes of property, or portions thereof, that include the kinds of property designated
82.4in this subdivision.

82.5    Sec. 9. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19b, is
82.6amended to read:
82.7    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
82.8and trusts, there shall be subtracted from federal taxable income:
82.9    (1) net interest income on obligations of any authority, commission, or
82.10instrumentality of the United States to the extent includable in taxable income for federal
82.11income tax purposes but exempt from state income tax under the laws of the United States;
82.12    (2) if included in federal taxable income, the amount of any overpayment of income
82.13tax to Minnesota or to any other state, for any previous taxable year, whether the amount
82.14is received as a refund or as a credit to another taxable year's income tax liability;
82.15    (3) the amount paid to others, less the amount used to claim the credit allowed under
82.16section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
82.17to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
82.18transportation of each qualifying child in attending an elementary or secondary school
82.19situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
82.20resident of this state may legally fulfill the state's compulsory attendance laws, which
82.21is not operated for profit, and which adheres to the provisions of the Civil Rights Act
82.22of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
82.23tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
82.24"textbooks" includes books and other instructional materials and equipment purchased
82.25or leased for use in elementary and secondary schools in teaching only those subjects
82.26legally and commonly taught in public elementary and secondary schools in this state.
82.27Equipment expenses qualifying for deduction includes expenses as defined and limited in
82.28section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
82.29books and materials used in the teaching of religious tenets, doctrines, or worship, the
82.30purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
82.31or materials for, or transportation to, extracurricular activities including sporting events,
82.32musical or dramatic events, speech activities, driver's education, or similar programs. No
82.33deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
82.34the qualifying child's vehicle to provide such transportation for a qualifying child. For
83.1purposes of the subtraction provided by this clause, "qualifying child" has the meaning
83.2given in section 32(c)(3) of the Internal Revenue Code;
83.3    (4) income as provided under section 290.0802;
83.4    (5) to the extent included in federal adjusted gross income, income realized on
83.5disposition of property exempt from tax under section 290.491;
83.6    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
83.7of the Internal Revenue Code in determining federal taxable income by an individual
83.8who does not itemize deductions for federal income tax purposes for the taxable year, an
83.9amount equal to 50 percent of the excess of charitable contributions over $500 allowable
83.10as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
83.11under the provisions of Public Law 109-1 and Public Law 111-126;
83.12    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
83.13qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
83.14of subnational foreign taxes for the taxable year, but not to exceed the total subnational
83.15foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
83.16"federal foreign tax credit" means the credit allowed under section 27 of the Internal
83.17Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
83.18under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
83.19the extent they exceed the federal foreign tax credit;
83.20    (8) in each of the five tax years immediately following the tax year in which an
83.21addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
83.22of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
83.23of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
83.24the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
83.25subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
83.26positive value of any net operating loss under section 172 of the Internal Revenue Code
83.27generated for the tax year of the addition. The resulting delayed depreciation cannot be
83.28less than zero;
83.29    (9) job opportunity building zone income as provided under section 469.316;
83.30    (10) to the extent included in federal taxable income, the amount of compensation
83.31paid to members of the Minnesota National Guard or other reserve components of the
83.32United States military for active service, excluding compensation for services performed
83.33under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
83.34service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
83.35(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
84.15b
, but "active service" excludes service performed in accordance with section 190.08,
84.2subdivision 3
;
84.3    (11) to the extent included in federal taxable income, the amount of compensation
84.4paid to Minnesota residents who are members of the armed forces of the United States
84.5or United Nations for active duty performed under United States Code, title 10; or the
84.6authority of the United Nations;
84.7    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
84.8qualified donor's donation, while living, of one or more of the qualified donor's organs
84.9to another person for human organ transplantation. For purposes of this clause, "organ"
84.10means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
84.11"human organ transplantation" means the medical procedure by which transfer of a human
84.12organ is made from the body of one person to the body of another person; "qualified
84.13expenses" means unreimbursed expenses for both the individual and the qualified donor
84.14for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
84.15may be subtracted under this clause only once; and "qualified donor" means the individual
84.16or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
84.17individual may claim the subtraction in this clause for each instance of organ donation for
84.18transplantation during the taxable year in which the qualified expenses occur;
84.19    (13) in each of the five tax years immediately following the tax year in which an
84.20addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
84.21shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
84.22addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
84.23case of a shareholder of a corporation that is an S corporation, minus the positive value of
84.24any net operating loss under section 172 of the Internal Revenue Code generated for the
84.25tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
84.26subtraction is not allowed under this clause;
84.27    (14) to the extent included in the federal taxable income of a nonresident of
84.28Minnesota, compensation paid to a service member as defined in United States Code, title
84.2910, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
84.30Act, Public Law 108-189, section 101(2);
84.31    (15) international economic development zone income as provided under section
84.32469.325;
84.33    (16) to the extent included in federal taxable income, the amount of national service
84.34educational awards received from the National Service Trust under United States Code,
84.35title 42, sections 12601 to 12604, for service in an approved Americorps National Service
84.36program;
85.1(17) (16) to the extent included in federal taxable income, discharge of indebtedness
85.2income resulting from reacquisition of business indebtedness included in federal taxable
85.3income under section 108(i) of the Internal Revenue Code. This subtraction applies only
85.4to the extent that the income was included in net income in a prior year as a result of the
85.5addition under section 290.01, subdivision 19a, clause (16); and
85.6(18) (17) the amount of the net operating loss allowed under section 290.095,
85.7subdivision
11, paragraph (c).

85.8    Sec. 10. Minnesota Statutes 2010, section 290.01, subdivision 29, is amended to read:
85.9    Subd. 29. Taxable income. The term "taxable income" means:
85.10(1) for individuals, estates, and trusts, the same as taxable net income;
85.11(2) for corporations, the taxable net income less
85.12(i) the net operating loss deduction under section 290.095;
85.13(ii) the dividends received deduction under section 290.21, subdivision 4;
85.14(iii) the exemption for operating in a job opportunity building zone under section
85.15469.317 ; and
85.16(iv) the exemption for operating in a biotechnology and health sciences industry
85.17zone under section 469.337; and
85.18(v) the exemption for operating in an international economic development zone
85.19under section 469.326.

85.20    Sec. 11. Minnesota Statutes 2011 Supplement, section 290.06, subdivision 2c, is
85.21amended to read:
85.22    Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income
85.23taxes imposed by this chapter upon married individuals filing joint returns and surviving
85.24spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
85.25applying to their taxable net income the following schedule of rates:
85.26    (1) On the first $25,680, 5.35 percent;
85.27    (2) On all over $25,680, but not over $102,030, 7.05 percent;
85.28    (3) On all over $102,030, 7.85 percent.
85.29    Married individuals filing separate returns, estates, and trusts must compute their
85.30income tax by applying the above rates to their taxable income, except that the income
85.31brackets will be one-half of the above amounts.
85.32    (b) The income taxes imposed by this chapter upon unmarried individuals must be
85.33computed by applying to taxable net income the following schedule of rates:
85.34    (1) On the first $17,570, 5.35 percent;
86.1    (2) On all over $17,570, but not over $57,710, 7.05 percent;
86.2    (3) On all over $57,710, 7.85 percent.
86.3    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying
86.4as a head of household as defined in section 2(b) of the Internal Revenue Code must be
86.5computed by applying to taxable net income the following schedule of rates:
86.6    (1) On the first $21,630, 5.35 percent;
86.7    (2) On all over $21,630, but not over $86,910, 7.05 percent;
86.8    (3) On all over $86,910, 7.85 percent.
86.9    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the
86.10tax of any individual taxpayer whose taxable net income for the taxable year is less than
86.11an amount determined by the commissioner must be computed in accordance with tables
86.12prepared and issued by the commissioner of revenue based on income brackets of not
86.13more than $100. The amount of tax for each bracket shall be computed at the rates set
86.14forth in this subdivision, provided that the commissioner may disregard a fractional part of
86.15a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
86.16    (e) An individual who is not a Minnesota resident for the entire year must compute
86.17the individual's Minnesota income tax as provided in this subdivision. After the
86.18application of the nonrefundable credits provided in this chapter, the tax liability must
86.19then be multiplied by a fraction in which:
86.20    (1) the numerator is the individual's Minnesota source federal adjusted gross income
86.21as defined in section 62 of the Internal Revenue Code and increased by the additions
86.22required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12),
86.23(13), and (16) to (18), and reduced by the Minnesota assignable portion of the subtraction
86.24for United States government interest under section 290.01, subdivision 19b, clause (1),
86.25and the subtractions under section 290.01, subdivision 19b, clauses (8), (9), (13), (14),
86.26(15), (17), (16), and (18) (17), after applying the allocation and assignability provisions of
86.27section 290.081, clause (a), or 290.17; and
86.28    (2) the denominator is the individual's federal adjusted gross income as defined in
86.29section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
86.30section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16) to
86.31(18), and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1),
86.32(8), (9), (13), (14), (15), (17) (16), and (18) (17).

86.33    Sec. 12. Minnesota Statutes 2010, section 290.067, subdivision 1, is amended to read:
86.34    Subdivision 1. Amount of credit. (a) A taxpayer may take as a credit against the
86.35tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
87.1dependent care credit for which the taxpayer is eligible pursuant to the provisions of
87.2section 21 of the Internal Revenue Code subject to the limitations provided in subdivision
87.32 except that in determining whether the child qualified as a dependent, income received
87.4as a Minnesota family investment program grant or allowance to or on behalf of the child
87.5must not be taken into account in determining whether the child received more than half
87.6of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of
87.7the Internal Revenue Code do not apply.
87.8(b) If a child who has not attained the age of six years at the close of the taxable year
87.9is cared for at a licensed family day care home operated by the child's parent, the taxpayer
87.10is deemed to have paid employment-related expenses. If the child is 16 months old or
87.11younger at the close of the taxable year, the amount of expenses deemed to have been paid
87.12equals the maximum limit for one qualified individual under section 21(c) and (d) of the
87.13Internal Revenue Code. If the child is older than 16 months of age but has not attained the
87.14age of six years at the close of the taxable year, the amount of expenses deemed to have
87.15been paid equals the amount the licensee would charge for the care of a child of the same
87.16age for the same number of hours of care.
87.17(c) If a married couple:
87.18(1) has a child who has not attained the age of one year at the close of the taxable
87.19year;
87.20(2) files a joint tax return for the taxable year; and
87.21(3) does not participate in a dependent care assistance program as defined in section
87.22129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid
87.23for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of
87.24(i) the combined earned income of the couple or (ii) the amount of the maximum limit for
87.25one qualified individual under section 21(c) and (d) of the Internal Revenue Code will
87.26be deemed to be the employment related expense paid for that child. The earned income
87.27limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed
87.28amount. These deemed amounts apply regardless of whether any employment-related
87.29expenses have been paid.
87.30(d) If the taxpayer is not required and does not file a federal individual income tax
87.31return for the tax year, no credit is allowed for any amount paid to any person unless:
87.32(1) the name, address, and taxpayer identification number of the person are included
87.33on the return claiming the credit; or
87.34(2) if the person is an organization described in section 501(c)(3) of the Internal
87.35Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code,
87.36the name and address of the person are included on the return claiming the credit.
88.1In the case of a failure to provide the information required under the preceding sentence,
88.2the preceding sentence does not apply if it is shown that the taxpayer exercised due
88.3diligence in attempting to provide the information required.
88.4In the case of a nonresident, part-year resident, or a person who has earned income
88.5not subject to tax under this chapter including earned income excluded pursuant to section
88.6290.01, subdivision 19b , clause (9) or (15), the credit determined under section 21 of the
88.7Internal Revenue Code must be allocated based on the ratio by which the earned income
88.8of the claimant and the claimant's spouse from Minnesota sources bears to the total earned
88.9income of the claimant and the claimant's spouse.
88.10For residents of Minnesota, the subtractions for military pay under section 290.01,
88.11subdivision 19b
, clauses (10) and (11), are not considered "earned income not subject to
88.12tax under this chapter."
88.13For residents of Minnesota, the exclusion of combat pay under section 112 of the
88.14Internal Revenue Code is not considered "earned income not subject to tax under this
88.15chapter."

88.16    Sec. 13. Minnesota Statutes 2011 Supplement, section 290.0671, subdivision 1,
88.17is amended to read:
88.18    Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
88.19imposed by this chapter equal to a percentage of earned income. To receive a credit, a
88.20taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
88.21(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
88.22the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
88.23income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
88.24case is the credit less than zero.
88.25(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
88.26$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
88.27$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
88.28whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
88.29(d) For individuals with two or more qualifying children, the credit equals ten
88.30percent of the first $9,720 of earned income and 20 percent of earned income over
88.31$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income
88.32or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is
88.33the credit less than zero.
88.34(e) For a nonresident or part-year resident, the credit must be allocated based on the
88.35percentage calculated under section 290.06, subdivision 2c, paragraph (e).
89.1(f) For a person who was a resident for the entire tax year and has earned income
89.2not subject to tax under this chapter, including income excluded under section 290.01,
89.3subdivision 19b
, clause (9) or (15), the credit must be allocated based on the ratio of
89.4federal adjusted gross income reduced by the earned income not subject to tax under
89.5this chapter over federal adjusted gross income. For purposes of this paragraph, the
89.6subtractions for military pay under section 290.01, subdivision 19b, clauses (10) and (11),
89.7are not considered "earned income not subject to tax under this chapter."
89.8For the purposes of this paragraph, the exclusion of combat pay under section 112
89.9of the Internal Revenue Code is not considered "earned income not subject to tax under
89.10this chapter."
89.11(g) For tax years beginning after December 31, 2007, and before December 31,
89.122010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
89.13paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
89.14$3,000 for married taxpayers filing joint returns. For tax years beginning after December
89.1531, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined
89.16pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
89.17section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009,
89.18the commissioner shall then determine the percent change from the 12 months ending on
89.19August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
89.20year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
89.2131 of the year preceding the taxable year. The earned income thresholds as adjusted
89.22for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
89.23is rounded up to the nearest $10. The determination of the commissioner under this
89.24subdivision is not a rule under the Administrative Procedure Act.
89.25(h) For tax years beginning after December 31, 2010, and before January 1, 2012,
89.26the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
89.27(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000
89.28for married taxpayers filing joint returns. For tax years beginning after December 31,
89.292010, and before January 1, 2012, the commissioner shall annually adjust the $5,000
89.30by the percentage determined pursuant to the provisions of section 1(f) of the Internal
89.31Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for
89.32the word "1992." For 2011, the commissioner shall then determine the percent change
89.33from the 12 months ending on August 31, 2008, to the 12 months ending on August
89.3431, 2010. The earned income thresholds as adjusted for inflation must be rounded to
89.35the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10.
90.1The determination of the commissioner under this subdivision is not a rule under the
90.2Administrative Procedure Act.
90.3(i) The commissioner shall construct tables showing the amount of the credit at
90.4various income levels and make them available to taxpayers. The tables shall follow
90.5the schedule contained in this subdivision, except that the commissioner may graduate
90.6the transition between income brackets.

90.7    Sec. 14. Minnesota Statutes 2011 Supplement, section 290.091, subdivision 2, is
90.8amended to read:
90.9    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
90.10terms have the meanings given:
90.11    (a) "Alternative minimum taxable income" means the sum of the following for
90.12the taxable year:
90.13    (1) the taxpayer's federal alternative minimum taxable income as defined in section
90.1455(b)(2) of the Internal Revenue Code;
90.15    (2) the taxpayer's itemized deductions allowed in computing federal alternative
90.16minimum taxable income, but excluding:
90.17    (i) the charitable contribution deduction under section 170 of the Internal Revenue
90.18Code;
90.19    (ii) the medical expense deduction;
90.20    (iii) the casualty, theft, and disaster loss deduction; and
90.21    (iv) the impairment-related work expenses of a disabled person;
90.22    (3) for depletion allowances computed under section 613A(c) of the Internal
90.23Revenue Code, with respect to each property (as defined in section 614 of the Internal
90.24Revenue Code), to the extent not included in federal alternative minimum taxable income,
90.25the excess of the deduction for depletion allowable under section 611 of the Internal
90.26Revenue Code for the taxable year over the adjusted basis of the property at the end of the
90.27taxable year (determined without regard to the depletion deduction for the taxable year);
90.28    (4) to the extent not included in federal alternative minimum taxable income, the
90.29amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
90.30Internal Revenue Code determined without regard to subparagraph (E);
90.31    (5) to the extent not included in federal alternative minimum taxable income, the
90.32amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
90.33    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
90.34to (9), (12), (13), and (16) to (18);
90.35    less the sum of the amounts determined under the following:
91.1    (1) interest income as defined in section 290.01, subdivision 19b, clause (1);
91.2    (2) an overpayment of state income tax as provided by section 290.01, subdivision
91.319b
, clause (2), to the extent included in federal alternative minimum taxable income;
91.4    (3) the amount of investment interest paid or accrued within the taxable year on
91.5indebtedness to the extent that the amount does not exceed net investment income, as
91.6defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
91.7amounts deducted in computing federal adjusted gross income;
91.8    (4) amounts subtracted from federal taxable income as provided by section 290.01,
91.9subdivision 19b
, clauses (6), (8) to (15) (14), and (17) (16); and
91.10(5) the amount of the net operating loss allowed under section 290.095, subdivision
91.1111, paragraph (c).
91.12    In the case of an estate or trust, alternative minimum taxable income must be
91.13computed as provided in section 59(c) of the Internal Revenue Code.
91.14    (b) "Investment interest" means investment interest as defined in section 163(d)(3)
91.15of the Internal Revenue Code.
91.16    (c) "Net minimum tax" means the minimum tax imposed by this section.
91.17    (d) "Regular tax" means the tax that would be imposed under this chapter (without
91.18regard to this section and section 290.032), reduced by the sum of the nonrefundable
91.19credits allowed under this chapter.
91.20    (e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
91.21income after subtracting the exemption amount determined under subdivision 3.

91.22    Sec. 15. Minnesota Statutes 2010, section 290.0921, subdivision 3, is amended to read:
91.23    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
91.24income" is Minnesota net income as defined in section 290.01, subdivision 19, and
91.25includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
91.26(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
91.27Minnesota tax return, the minimum tax must be computed on a separate company basis.
91.28If a corporation is part of a tax group filing a unitary return, the minimum tax must be
91.29computed on a unitary basis. The following adjustments must be made.
91.30(1) For purposes of the depreciation adjustments under section 56(a)(1) and
91.3156(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
91.32service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
91.33income tax purposes, including any modification made in a taxable year under section
91.34290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
91.35paragraph (c).
92.1For taxable years beginning after December 31, 2000, the amount of any remaining
92.2modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
92.3section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
92.4allowance in the first taxable year after December 31, 2000.
92.5(2) The portion of the depreciation deduction allowed for federal income tax
92.6purposes under section 168(k) of the Internal Revenue Code that is required as an
92.7addition under section 290.01, subdivision 19c, clause (15), is disallowed in determining
92.8alternative minimum taxable income.
92.9(3) The subtraction for depreciation allowed under section 290.01, subdivision 19d,
92.10clause (17), is allowed as a depreciation deduction in determining alternative minimum
92.11taxable income.
92.12(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
92.13of the Internal Revenue Code does not apply.
92.14(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
92.15Revenue Code does not apply.
92.16(6) The special rule for dividends from section 936 companies under section
92.1756(g)(4)(C)(iii) does not apply.
92.18(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
92.19Code does not apply.
92.20(8) The tax preference for intangible drilling costs under section 57(a)(2) of the
92.21Internal Revenue Code must be calculated without regard to subparagraph (E) and the
92.22subtraction under section 290.01, subdivision 19d, clause (4).
92.23(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
92.24Revenue Code does not apply.
92.25(10) The tax preference for charitable contributions of appreciated property under
92.26section 57(a)(6) of the Internal Revenue Code does not apply.
92.27(11) For purposes of calculating the tax preference for accelerated depreciation or
92.28amortization on certain property placed in service before January 1, 1987, under section
92.2957(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
92.30deduction allowed under section 290.01, subdivision 19e.
92.31For taxable years beginning after December 31, 2000, the amount of any remaining
92.32modification made under section 290.01, subdivision 19e, not previously deducted is a
92.33depreciation or amortization allowance in the first taxable year after December 31, 2004.
92.34(12) For purposes of calculating the adjustment for adjusted current earnings in
92.35section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
92.36income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
93.1minimum taxable income as defined in this subdivision, determined without regard to the
93.2adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
93.3(13) For purposes of determining the amount of adjusted current earnings under
93.4section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
93.556(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
93.6gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the
93.7amount of refunds of income, excise, or franchise taxes subtracted as provided in section
93.8290.01, subdivision 19d , clause (9), or (iii) the amount of royalties, fees or other like
93.9income subtracted as provided in section 290.01, subdivision 19d, clause (10).
93.10(14) Alternative minimum taxable income excludes the income from operating in a
93.11job opportunity building zone as provided under section 469.317.
93.12(15) Alternative minimum taxable income excludes the income from operating in a
93.13biotechnology and health sciences industry zone as provided under section 469.337.
93.14(16) Alternative minimum taxable income excludes the income from operating in an
93.15international economic development zone as provided under section 469.326.
93.16Items of tax preference must not be reduced below zero as a result of the
93.17modifications in this subdivision.

93.18    Sec. 16. Minnesota Statutes 2011 Supplement, section 290.0922, subdivision 2,
93.19is amended to read:
93.20    Subd. 2. Exemptions. The following entities are exempt from the tax imposed
93.21by this section:
93.22(1) corporations exempt from tax under section 290.05;
93.23(2) real estate investment trusts;
93.24(3) regulated investment companies or a fund thereof; and
93.25(4) entities having a valid election in effect under section 860D(b) of the Internal
93.26Revenue Code;
93.27(5) town and farmers' mutual insurance companies;
93.28(6) cooperatives organized under chapter 308A or 308B that provide housing
93.29exclusively to persons age 55 and over and are classified as homesteads under section
93.30273.124, subdivision 3 ; and
93.31(7) a qualified business as defined under section 469.310, subdivision 11, if for the
93.32taxable year all of its property is located in a job opportunity building zone designated
93.33under section 469.314 and all of its payroll is a job opportunity building zone payroll
93.34under section 469.310; and.
94.1(8) an entity, if for the taxable year all of its property is located in an international
94.2economic development zone designated under section 469.322, and all of its payroll is
94.3international economic development zone payroll under section 469.321. The exemption
94.4under this clause applies to taxable years beginning during the duration of the international
94.5economic development zone.
94.6Entities not specifically exempted by this subdivision are subject to tax under this
94.7section, notwithstanding section 290.05.

94.8    Sec. 17. Minnesota Statutes 2011 Supplement, section 290.0922, subdivision 3,
94.9is amended to read:
94.10    Subd. 3. Definitions. (a) "Minnesota sales or receipts" means the total sales
94.11apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts
94.12attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the
94.13total sales or receipts apportioned or attributed to Minnesota pursuant to any other
94.14apportionment formula applicable to the taxpayer.
94.15(b) "Minnesota property" means total Minnesota tangible property as provided in
94.16section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota,
94.17but does not include: (1) the property of a qualified business as defined under section
94.18469.310, subdivision 11 , that is located in a job opportunity building zone designated under
94.19section 469.314, and (2) property of a qualified business located in a biotechnology and
94.20health sciences industry zone designated under section 469.334, or (3) for taxable years
94.21beginning during the duration of the zone, property of a qualified business located in the
94.22international economic development zone designated under section 469.322. Intangible
94.23property shall not be included in Minnesota property for purposes of this section.
94.24Taxpayers who do not utilize tangible property to apportion income shall nevertheless
94.25include Minnesota property for purposes of this section. On a return for a short taxable
94.26year, the amount of Minnesota property owned, as determined under section 290.191,
94.27shall be included in Minnesota property based on a fraction in which the numerator is the
94.28number of days in the short taxable year and the denominator is 365.
94.29(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section
94.30290.191, subdivision 12 , but does not include: (1) the job opportunity building zone
94.31payroll under section 469.310, subdivision 8, of a qualified business as defined under
94.32section 469.310, subdivision 11, and (2) biotechnology and health sciences industry zone
94.33payrolls under section 469.330, subdivision 8, or (3) for taxable years beginning during
94.34the duration of the zone, international economic development zone payrolls under section
95.1469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income shall
95.2nevertheless include Minnesota payrolls for purposes of this section.

95.3    Sec. 18. Minnesota Statutes 2011 Supplement, section 297A.75, subdivision 1, is
95.4amended to read:
95.5    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
95.6following exempt items must be imposed and collected as if the sale were taxable and the
95.7rate under section 297A.62, subdivision 1, applied. The exempt items include:
95.8    (1) capital equipment exempt under section 297A.68, subdivision 5;
95.9    (2) building materials for an agricultural processing facility exempt under section
95.10297A.71, subdivision 13 ;
95.11    (3) building materials for mineral production facilities exempt under section
95.12297A.71, subdivision 14 ;
95.13    (4) building materials for correctional facilities under section 297A.71, subdivision
95.143
;
95.15    (5) building materials used in a residence for disabled veterans exempt under section
95.16297A.71, subdivision 11 ;
95.17    (6) elevators and building materials exempt under section 297A.71, subdivision 12;
95.18    (7) building materials for the Long Lake Conservation Center exempt under section
95.19297A.71, subdivision 17 ;
95.20    (8) materials and supplies for qualified low-income housing under section 297A.71,
95.21subdivision 23
;
95.22    (9) materials, supplies, and equipment for municipal electric utility facilities under
95.23section 297A.71, subdivision 35;
95.24    (10) equipment and materials used for the generation, transmission, and distribution
95.25of electrical energy and an aerial camera package exempt under section 297A.68,
95.26subdivision 37;
95.27    (11) tangible personal property and taxable services and construction materials,
95.28supplies, and equipment exempt under section 297A.68, subdivision 41;
95.29    (12) commuter rail vehicle and repair parts under section 297A.70, subdivision
95.303, clause (11);
95.31    (13) (12) materials, supplies, and equipment for construction or improvement of
95.32projects and facilities under section 297A.71, subdivision 40;
95.33(14) (13) materials, supplies, and equipment for construction or improvement of a
95.34meat processing facility exempt under section 297A.71, subdivision 41;
96.1(15) (14) materials, supplies, and equipment for construction, improvement, or
96.2expansion of an aerospace defense manufacturing facility exempt under section 297A.71,
96.3subdivision 42; and
96.4(16) (15) enterprise information technology equipment and computer software for
96.5use in a qualified data center exempt under section 297A.68, subdivision 42.

96.6    Sec. 19. Minnesota Statutes 2010, section 469.015, subdivision 4, is amended to read:
96.7    Subd. 4. Exceptions. (a) An authority need not require competitive bidding in the
96.8following circumstances:
96.9(1) in the case of a contract for the acquisition of a low-rent housing project:
96.10(i) for which financial assistance is provided by the federal government;
96.11(ii) which does not require any direct loan or grant of money from the municipality
96.12as a condition of the federal financial assistance; and
96.13(iii) for which the contract provides for the construction of the project upon land that
96.14is either owned by the authority for redevelopment purposes or not owned by the authority
96.15at the time of the contract but the contract provides for the conveyance or lease to the
96.16authority of the project or improvements upon completion of construction;
96.17(2) with respect to a structured parking facility:
96.18(i) constructed in conjunction with, and directly above or below, a development; and
96.19(ii) financed with the proceeds of tax increment or parking ramp general obligation
96.20or revenue bonds; and
96.21(3) until August 1, 2009, with respect to a facility built for the purpose of facilitating
96.22the operation of public transit or encouraging its use:
96.23(i) constructed in conjunction with, and directly above or below, a development; and
96.24(ii) financed with the proceeds of parking ramp general obligation or revenue bonds
96.25or with at least 60 percent of the construction cost being financed with funding provided
96.26by the federal government; and
96.27(4) in the case of any building in which at least 75 percent of the usable square
96.28footage constitutes a housing development project if:
96.29(i) the project is financed with the proceeds of bonds issued under section 469.034 or
96.30from nongovernmental sources;
96.31(ii) the project is either located on land that is owned or is being acquired by the
96.32authority only for development purposes, or is not owned by the authority at the time the
96.33contract is entered into but the contract provides for conveyance or lease to the authority
96.34of the project or improvements upon completion of construction; and
97.1(iii) the authority finds and determines that elimination of the public bidding
97.2requirements is necessary in order for the housing development project to be economical
97.3and feasible.
97.4(b) An authority need not require a performance bond for the following projects:
97.5(1) a contract described in paragraph (a), clause (1);
97.6(2) a construction change order for a housing project in which 30 percent of the
97.7construction has been completed;
97.8(3) a construction contract for a single-family housing project in which the authority
97.9acts as the general construction contractor; or
97.10(4) a services or materials contract for a housing project.
97.11For purposes of this paragraph, "services or materials contract" does not include
97.12construction contracts.

97.13    Sec. 20. Minnesota Statutes 2010, section 469.033, subdivision 7, is amended to read:
97.14    Subd. 7. Inactive authorities; transfer of funds; dissolution. The authority may
97.15transfer to the city in and for which it was created all property, assets, cash or other
97.16funds held or used by the authority which were derived from the special benefit tax
97.17for redevelopment levied pursuant to subdivision 6 prior to March 6, 1953, whenever
97.18collected. Upon any such transfer, an authority shall not thereafter levy the tax or exercise
97.19the redevelopment powers of sections 469.001 to 469.047. All cash or other funds
97.20transferred to the city shall be used exclusively for permanent improvements in the city
97.21or the retirement of debts or bonds incurred for permanent improvements in the city.
97.22An authority which transfers its property, assets, cash, or other funds derived from the
97.23special benefit tax for redevelopment and which has not entered into a contract with
97.24the federal government with respect to any low-rent public housing project prior to
97.25March 6, 1953, shall be dissolved as herein provided in this subdivision. After a public
97.26hearing after ten days' published notice thereof in a newspaper of general circulation in
97.27the city, the governing body of a city in and for which an authority has been created
97.28may dissolve the authority if the authority has not entered into any contract with the
97.29federal government or any agency or instrumentality thereof for a loan or a grant with
97.30respect to any urban redevelopment or low-rent public housing project that remains in
97.31effect. The resolution or ordinance dissolving the authority shall be published in the
97.32same manner in which ordinances are published in the city and the authority shall be
97.33dissolved when the resolution or ordinance becomes finally effective. The clerk of the
97.34governing body of the municipality shall furnish to the commissioner of employment and
97.35economic development a certified copy of the resolution or ordinance of the governing
98.1body dissolving the authority. All property, records, assets, cash, or other funds held or
98.2used by an authority shall be transferred to and become the property of the municipality
98.3and cash or other funds shall be used as herein provided. Upon dissolution of an authority,
98.4all rights of an authority against any person, firm, or corporation shall accrue to and
98.5be enforced by the municipality.

98.6    Sec. 21. Minnesota Statutes 2010, section 469.166, subdivision 3, is amended to read:
98.7    Subd. 3. Border city enterprise zone. "Border city enterprise zone" means an area
98.8in the state designated as such an enterprise zone by the commissioner in the cities of
98.9Breckenridge, Dilworth, East Grand Forks, Moorhead, or Ortonville.

98.10    Sec. 22. Minnesota Statutes 2010, section 469.166, subdivision 5, is amended to read:
98.11    Subd. 5. Municipality. "Municipality" means a city, or a county for an area located
98.12outside the boundaries of a city. If an area lies in two or more cities or in both incorporated
98.13and unincorporated areas, "municipality" shall include an entity formed pursuant to
98.14section 471.59 by the governing bodies of the cities with jurisdiction over the incorporated
98.15area and the counties with jurisdiction over the unincorporated area.

98.16    Sec. 23. Minnesota Statutes 2010, section 469.166, subdivision 6, is amended to read:
98.17    Subd. 6. Governing body. "Governing body" means the county board in the case
98.18of a county, the city council or other body designated by its the charter in the case of a
98.19of the city, or the tribal or federal agency recognized as the governing body of an Indian
98.20reservation by the United States Secretary of the Interior.

98.21    Sec. 24. Minnesota Statutes 2010, section 469.167, subdivision 2, is amended to read:
98.22    Subd. 2. Duration. The designation of an area as an a border city enterprise zone
98.23shall be effective for seven years after the date of designation, except that enterprise zones
98.24in border cities eligible to receive allocations for tax reductions under section 469.169,
98.25subdivisions 7 and 8
, and under section 469.171, subdivision 6a or 6b, shall be is effective
98.26until terminated by resolution adopted by the city in which the border city enterprise
98.27zone is located.

98.28    Sec. 25. Minnesota Statutes 2010, section 469.171, subdivision 1, is amended to read:
98.29    Subdivision 1. Authorized types. (a) The following types of tax reductions may
98.30be approved by the commissioner for businesses located in an a border city enterprise
98.31zone, after the governing body of the border city has designated an area or areas, each
99.1consisting of at least 100 acres, of the city not in excess of a total of 400 acres in which the
99.2tax reductions may be provided:
99.3(1) an exemption from the general sales tax imposed by chapter 297A for purchases
99.4of construction materials or equipment for use in the zone if the purchase was made
99.5after the date of application for the zone;
99.6(2) a credit against the income tax of an employer for additional workers employed
99.7in the zone, other than workers employed in construction, up to a maximum of $3,000
99.8per employee per year;
99.9(3) an income tax credit for a percentage of the cost of debt financing to construct
99.10new or expanded facilities in the zone; and
99.11(4) a state paid property tax credit for a portion of the property taxes paid by a new
99.12commercial or industrial facility or the additional property taxes paid by an expansion of
99.13an existing commercial or industrial facility in the zone.
99.14(b) An application for a tax reduction under this subdivision may not be approved
99.15unless the governing body finds that the construction or improvement of the facility is
99.16not likely to have the effect of transferring existing employment from a location outside
99.17of the municipality but within the state.

99.18    Sec. 26. Minnesota Statutes 2010, section 469.171, subdivision 4, is amended to read:
99.19    Subd. 4. Restriction. The tax reductions provided by this section shall not
99.20apply to (1) a facility the primary purpose of which is one of the following: retail food
99.21and beverage services, automobile sales or service, or the provision of recreation or
99.22entertainment, or a private or commercial golf course, country club, massage parlor, tennis
99.23club, skating facility including roller skating, skateboard, and ice skating, racquet sports
99.24facility, including any handball or racquetball court, hot tub facility, suntan facility, or
99.25racetrack; (2) property of a public utility; (3) property used in the operation of a financial
99.26institution; (4) property owned by a fraternal or veterans' organization; or (5) property of a
99.27business operating under a franchise agreement that requires the business to be located in
99.28the state; except that, in an enterprise zone designated under section 469.168, subdivision
99.294, paragraph (c)
, that is not in a city of the first class, tax reductions may be provided to
99.30a retail food or beverage facility or an automobile sales or service facility, or a business
99.31operating under a franchise agreement that requires the business to be located in this state
99.32except for such a franchised retail food or beverage facility.

99.33    Sec. 27. Minnesota Statutes 2010, section 469.171, subdivision 6a, is amended to read:
100.1    Subd. 6a. Additional border city allocations. In addition to tax reductions
100.2authorized in section 469.169, subdivisions 7 and 8, The commissioner may allocate
100.3$2,000,000 for tax reductions pursuant to subdivision 9 to border city enterprise zones
100.4designated under section 469.168, subdivision 4, paragraph (c), except for zones located
100.5in cities of the first class. This money shall be allocated among the zones on a per
100.6capita basis. Limits on the maximum allocation to a zone imposed by section 469.169,
100.7subdivision 7
, do not apply to allocations made under this subdivision. Tax reductions
100.8authorized by this subdivision may not be allocated to any property which is:
100.9(1) a facility the primary purpose of which is one of the following: the provision
100.10of recreation or entertainment, or a private or commercial golf course, country club,
100.11massage parlor, tennis club, skating facility including roller skating, skateboard, and
100.12ice skating, racquet sports facility, including any handball or racquetball court, hot tub
100.13facility, suntan facility, or racetrack;
100.14(2) property of a public utility;
100.15(3) property used in the operation of a financial institution;
100.16(4) property owned by a fraternal or veterans' organization;
100.17(5) property of a retail food or beverage service business operating under a franchise
100.18agreement that requires the business to be located in the state.

100.19    Sec. 28. Minnesota Statutes 2010, section 469.171, subdivision 7, is amended to read:
100.20    Subd. 7. Duration. Each tax reduction provided to a business pursuant to this
100.21subdivision shall terminate not longer than five years after the effective date of the tax
100.22reduction for the business unless the business is located in a border city enterprise zone
100.23designated under section 469.168, subdivision 4, paragraph (c), that is not a city of the
100.24first class. Each tax reduction provided to a business that is located in a border city
100.25enterprise zone designated under section 469.168, subdivision 4, paragraph (c), that is not
100.26located in a city of the first class, may be provided until the allocations provided under
100.27subdivision 6a, and under section 469.169, subdivisions 7 and 8, have been expended.
100.28Subject to the limitation in this subdivision, the tax reductions may be provided after
100.29expiration of the zone's designation.

100.30    Sec. 29. Minnesota Statutes 2010, section 469.171, subdivision 9, is amended to read:
100.31    Subd. 9. Recapture. Any business that (1) receives tax reductions authorized by
100.32subdivisions 1 to 8, classification as employment property pursuant to section 469.170, or
100.33an alternative local contribution under section 469.169, subdivision 5; and (2) ceases to
100.34operate its facility located within the border city enterprise zone shall repay the amount of
101.1the tax reduction or local contribution received during the two years immediately before
101.2it ceased to operate in the zone.
101.3The repayment must be paid to the state to the extent it represents a tax reduction
101.4under subdivisions 1 to 8 and to the municipality to the extent it represents a property tax
101.5reduction or other local contribution. Any amount repaid to the state must be credited
101.6to the amount certified as available for tax reductions in the zone pursuant to section
101.7469.169, subdivision 7 the city's allocation. Any amount repaid to the municipality must
101.8be used by the municipality for economic development purposes. The commissioner of
101.9revenue may seek repayment of tax credits from a business ceasing to operate within an
101.10enterprise zone by utilizing any remedies available for the collection of tax.

101.11    Sec. 30. Minnesota Statutes 2010, section 469.171, subdivision 11, is amended to read:
101.12    Subd. 11. Limitations; last eight months of duration. This subdivision applies
101.13only to state tax reductions first authorized by the municipality to be provided to a business
101.14within eight months of the expiration of the border city enterprise zone's designation.
101.15Before agreeing with a business to provide tax reductions, the municipality must
101.16submit the proposed tax reductions to the commissioner for approval. The commissioner
101.17shall review and analyze the proposal in light of, at least: (1) the proposed investment that
101.18the business will make in the zone, (2) the number and quality of new jobs that will be
101.19created in the zone, (3) the overall positive impact on economic activity in the zone, and
101.20(4) the extent to which the impacts in clauses (1) to (3) are dependent upon providing the
101.21state tax reductions to the business. The commissioner shall disapprove the proposal if the
101.22commissioner determines the public benefits of increased investment and employment
101.23resulting from the tax reductions is disproportionately small relative to the cost of the
101.24state tax reductions. If the commissioner disapproves of the proposal, the tax reductions
101.25are not allowed to the business.
101.26If the municipality submits the proposal to the commissioner before expiration
101.27of the zone designation, the authority to grant the tax reductions continues until the
101.28commissioner acts on the proposal.

101.29    Sec. 31. Minnesota Statutes 2010, section 469.172, is amended to read:
101.30469.172 DEVELOPMENT AND REDEVELOPMENT POWERS.
101.31Notwithstanding any contrary provision of law or charter, any city of the first or
101.32second class that contains an a border city enterprise zone or that has been designated as
101.33an enterprise zone may, in addition to its other powers, exercise the powers granted to
101.34a governmental subdivision by sections 469.001 to 469.047, 469.048 to 469.068, and
102.1469.109 to 469.113. Section 469.059, subdivision 15, shall apply applies to the city in
102.2the exercise of the powers granted pursuant to this section. It may exercise the powers
102.3assigned to redevelopment agencies pursuant to sections 469.152 to 469.165, without
102.4limitation to further the purposes of sections 469.001 to 469.047, 469.048 to 469.068, and
102.5469.109 to 469.134. It may exercise the powers set forth in sections 469.001 to 469.047,
102.6469.048 to 469.068, and 469.109 to 469.164 without limitation to further the purposes
102.7and policies set forth in sections 469.152 to 469.165. It may exercise the powers granted
102.8by this subdivision and any other development or redevelopment powers authorized by
102.9other laws, including sections 469.124 to 469.134 and 469.152 to 469.165, independently
102.10or in conjunction with each other as though all the powers had been granted to a single
102.11entity. Any project undertaken to accomplish the purposes of sections 469.001 to 469.047
102.12that qualifies as single-family housing under section 462C.02, subdivision 4, shall be is
102.13subject to the provisions of chapter 462C.
102.14Upon expiration of the designation of the enterprise zone, the powers granted by
102.15this subdivision may be exercised only with respect to any project, program, or activity
102.16commenced or established prior to that date. The powers granted by this subdivision may
102.17only be exercised within the zone.

102.18    Sec. 32. Minnesota Statutes 2010, section 469.173, subdivision 5, is amended to read:
102.19    Subd. 5. Information sharing. Pursuant to section 270B.14, subdivision 3,
102.20the commissioner of revenue may share information with the commissioner or with a
102.21municipality receiving an enterprise zone designation, insofar as necessary to administer
102.22the funding limitations provided by section 469.169, subdivision 7.

102.23    Sec. 33. Minnesota Statutes 2010, section 469.173, subdivision 6, is amended to read:
102.24    Subd. 6. Zone boundary realignment. The commissioner may approve specific
102.25applications by a municipality to amend the boundaries of a border city enterprise zone
102.26or of an area or areas designated pursuant to section 469.171, subdivision 5, at any time.
102.27Boundaries of a zone may not be amended to create noncontiguous subdivisions. If the
102.28commissioner approves the amended boundaries, the change is effective on the date of
102.29approval. Notwithstanding the area limitation under section 469.168, subdivision 3, the
102.30commissioner may approve a specific application to amend the boundaries of an enterprise
102.31zone which is located within five municipalities and was designated in 1984, to increase
102.32its area to not more than 800 acres, and may approve an additional specific application to
102.33amend the boundaries of that enterprise zone to include a sixth municipality or to further
103.1increase its area to include all or part of the territory of a town that surrounds one of
103.2the five municipalities, or both.
103.3Notwithstanding the area limitation under section 469.168, subdivision 3, the
103.4commissioner may approve a specific application to amend the boundaries of an enterprise
103.5zone that is located within four municipalities to include a fifth municipality. The addition
103.6of the fifth municipality may only be approved after the existing municipalities, by
103.7adoption of a resolution by each municipality's governing board, agree to the addition
103.8of the fifth municipality.

103.9    Sec. 34. Minnesota Statutes 2010, section 469.174, subdivision 20, is amended to read:
103.10    Subd. 20. Internal Revenue Code. "Internal Revenue Code" means the Internal
103.11Revenue Code of 1986, as amended through December 31, 1993.

103.12    Sec. 35. Minnesota Statutes 2010, section 469.174, subdivision 25, is amended to read:
103.13    Subd. 25. Increment. "Increment," "tax increment," "tax increment revenues,"
103.14"revenues derived from tax increment," and other similar terms for a district include:
103.15(1) taxes paid by the captured net tax capacity, but excluding any excess taxes, as
103.16computed under section 469.177;
103.17(2) the proceeds from the sale or lease of property, tangible or intangible, to the
103.18extent the property was purchased by the authority with tax increments;
103.19(3) principal and interest received on loans or other advances made by the authority
103.20with tax increments;
103.21(4) interest or other investment earnings on or from tax increments; and
103.22(5) repayments or return of tax increments made to the authority under agreements
103.23for districts for which the request for certification was made after August 1, 1993; and
103.24(6) the market value homestead credit paid to the authority under section 273.1384.

103.25    Sec. 36. Minnesota Statutes 2010, section 469.176, subdivision 7, is amended to read:
103.26    Subd. 7. Parcels not includable in districts. (a) The authority may request
103.27inclusion in a tax increment financing district and the county auditor may certify the
103.28original tax capacity of a parcel or a part of a parcel that qualified under the provisions of
103.29section 273.111 or, 273.112, 273.114, or chapter 473H for taxes payable in any of the five
103.30calendar years before the filing of the request for certification only for:
103.31    (1) a district in which 85 percent or more of the planned buildings and facilities
103.32(determined on the basis of square footage) are a qualified manufacturing facility or a
103.33qualified distribution facility or a combination of both; or
104.1    (2) a housing district.
104.2    (b)(1) A distribution facility means buildings and other improvements to real
104.3property that are used to conduct activities in at least each of the following categories:
104.4    (i) to store or warehouse tangible personal property;
104.5    (ii) to take orders for shipment, mailing, or delivery;
104.6    (iii) to prepare personal property for shipment, mailing, or delivery; and
104.7    (iv) to ship, mail, or deliver property.
104.8    (2) A manufacturing facility includes space used for manufacturing or producing
104.9tangible personal property, including processing resulting in the change in condition of the
104.10property, and space necessary for and related to the manufacturing activities.
104.11    (3) To be a qualified facility, the owner or operator of a manufacturing or distribution
104.12facility must agree to pay and pay 90 percent or more of the employees of the facility at
104.13a rate equal to or greater than 160 percent of the federal minimum wage for individuals
104.14over the age of 20.

104.15    Sec. 37. Minnesota Statutes 2010, section 469.1763, subdivision 6, is amended to read:
104.16    Subd. 6. Pooling permitted for deficits. (a) This subdivision applies only to
104.17districts for which the request for certification was made before August 1, 2001, and
104.18without regard to whether the request for certification was made prior to August 1, 1979.
104.19(b) The municipality for the district may transfer available increments from another
104.20tax increment financing district located in the municipality, if the transfer is necessary to
104.21eliminate a deficit in the district to which the increments are transferred. The municipality
104.22may transfer increments as provided by this subdivision without regard to whether the
104.23transfer or expenditure is authorized by the tax increment financing plan for the district
104.24from which the transfer is made. A deficit in the district for purposes of this subdivision
104.25means the lesser of the following two amounts:
104.26(1)(i) the amount due during the calendar year to pay preexisting obligations of
104.27the district; minus
104.28(ii) the total increments collected or to be collected from properties located within
104.29the district that are available for the calendar year including amounts collected in prior
104.30years that are currently available; plus
104.31(iii) total increments from properties located in other districts in the municipality
104.32including amounts collected in prior years that are available to be used to meet the district's
104.33obligations under this section, excluding this subdivision, or other provisions of law (but
104.34excluding a special tax under section 469.1791 and the grant program under Laws 1997,
104.35chapter 231, article 1, section 19, or Laws 2001, First Special Session chapter 5); or
105.1(2) the reduction in increments collected from properties located in the district for
105.2the calendar year as a result of the changes in class rates in Laws 1997, chapter 231, article
105.31; Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, and Laws 2001, First
105.4Special Session chapter 5, or the elimination of the general education tax levy under
105.5Laws 2001, First Special Session chapter 5.
105.6The authority may compute the deficit amount under clause (1) only (without regard
105.7to the limit under clause (2)) if the authority makes an irrevocable commitment, by
105.8resolution, to use increments from the district to which increments are to be transferred and
105.9any transferred increments are only used to pay preexisting obligations and administrative
105.10expenses for the district that are required to be paid under section 469.176, subdivision
105.114h
, paragraph (a).
105.12(c) A preexisting obligation means:
105.13(1) bonds issued and sold before August 1, 2001, or bonds issued pursuant to a
105.14binding contract requiring the issuance of bonds entered into before July 1, 2001, and
105.15bonds issued to refund such bonds or to reimburse expenditures made in conjunction with
105.16a signed contractual agreement entered into before August 1, 2001, to the extent that the
105.17bonds are secured by a pledge of increments from the tax increment financing district; and
105.18(2) binding contracts entered into before August 1, 2001, to the extent that the
105.19contracts require payments secured by a pledge of increments from the tax increment
105.20financing district.
105.21(d) The municipality may require a development authority, other than a seaway port
105.22authority, to transfer available increments including amounts collected in prior years that
105.23are currently available for any of its tax increment financing districts in the municipality to
105.24make up an insufficiency in another district in the municipality, regardless of whether the
105.25district was established by the development authority or another development authority.
105.26This authority applies notwithstanding any law to the contrary, but applies only to a
105.27development authority that:
105.28(1) was established by the municipality; or
105.29(2) the governing body of which is appointed, in whole or part, by the municipality
105.30or an officer of the municipality or which consists, in whole or part, of members of
105.31the governing body of the municipality. The municipality may use this authority only
105.32after it has first used all available increments of the receiving development authority to
105.33eliminate the insufficiency and exercised any permitted action under section 469.1792,
105.34subdivision 3
, for preexisting districts of the receiving development authority to eliminate
105.35the insufficiency.
106.1(e) The authority under this subdivision to spend tax increments outside of the area
106.2of the district from which the tax increments were collected:
106.3(1) is an exception to the restrictions under section 469.176, subdivisions 4b, 4c,
106.44d, 4e, 4i, and 4j
; the expenditure limits under section 469.176, subdivision 1c; and the
106.5other provisions of this section; and the percentage restrictions under subdivision 2 must
106.6be calculated after deducting increments spent under this subdivision from the total
106.7increments for the district; and
106.8(2) applies notwithstanding the provisions of the Tax Increment Financing Act in
106.9effect for districts for which the request for certification was made before June 30, 1982,
106.10or any other law to the contrary.
106.11(f) If a preexisting obligation requires the development authority to pay an amount
106.12that is limited to the increment from the district or a specific development within the
106.13district and if the obligation requires paying a higher amount to the extent that increments
106.14are available, the municipality may determine that the amount due under the preexisting
106.15obligation equals the higher amount and may authorize the transfer of increments
106.16under this subdivision to pay up to the higher amount. The existence of a guarantee of
106.17obligations by the individual or entity that would receive the payment under this paragraph
106.18is disregarded in the determination of eligibility to pool under this subdivision. The
106.19authority to transfer increments under this paragraph may only be used to the extent
106.20that the payment of all other preexisting obligations in the municipality due during the
106.21calendar year have been satisfied.
106.22(g) For transfers of increments made in calendar year 2005 and later, the reduction in
106.23increments as a result of the elimination of the general education tax levy for purposes of
106.24paragraph (b), clause (2), for a taxes payable year equals the general education tax rate
106.25for the school district under Minnesota Statutes 2000, section 273.1382, subdivision 1,
106.26for taxes payable in 2001, multiplied by the captured tax capacity of the district for the
106.27current taxes payable year.

106.28    Sec. 38. Minnesota Statutes 2010, section 469.1764, subdivision 1, is amended to read:
106.29    Subdivision 1. Scope; application. (a) This section applies to a tax increment
106.30financing district or area added to a district, if the request for certification of the district or
106.31the area added to the district was made after July 31, 1979, and before July 1, 1982.
106.32(b) This section, section 469.1763, subdivision 6, and any special law applying to
106.33the district are the exclusive authority to spend tax increments on activities located outside
106.34of the geographic area of a tax increment financing district that is subject to this section.
107.1(c) This section does not apply to increments from a district that is subject to the
107.2provisions of this section, if:
107.3(1) the district was decertified before the enactment of this section and all increments
107.4spent on activities located outside of the geographic area of the district were repaid and
107.5distributed as excess increments under section 469.176, subdivision 2; or
107.6(2) the use of increments on activities located outside of the geographic area of
107.7the district consists solely of payment of debt service on bonds under section 469.129,
107.8subdivision 2
, before its repeal, and any bonds issued to refund bonds issued under that
107.9subdivision.

107.10    Sec. 39. Minnesota Statutes 2010, section 469.177, subdivision 1, is amended to read:
107.11    Subdivision 1. Original net tax capacity. (a) Upon or after adoption of a tax
107.12increment financing plan, the auditor of any county in which the district is situated shall,
107.13upon request of the authority, certify the original net tax capacity of the tax increment
107.14financing district and that portion of the district overlying any subdistrict as described in
107.15the tax increment financing plan and shall certify in each year thereafter the amount by
107.16which the original net tax capacity has increased or decreased as a result of a change in tax
107.17exempt status of property within the district and any subdistrict, reduction or enlargement
107.18of the district or changes pursuant to subdivision 4. The auditor shall certify the amount
107.19within 30 days after receipt of the request and sufficient information to identify the parcels
107.20included in the district. The certification relates to the taxes payable year as provided in
107.21subdivision 6.
107.22    (b) If the classification under section 273.13 of property located in a district changes
107.23to a classification that has a different assessment ratio, the original net tax capacity of that
107.24property must be redetermined at the time when its use is changed as if the property had
107.25originally been classified in the same class in which it is classified after its use is changed.
107.26    (c) The amount to be added to the original net tax capacity of the district as a result
107.27of previously tax exempt real property within the district becoming taxable equals the net
107.28tax capacity of the real property as most recently assessed pursuant to section 273.18 or, if
107.29that assessment was made more than one year prior to the date of title transfer rendering
107.30the property taxable, the net tax capacity assessed by the assessor at the time of the
107.31transfer. If improvements are made to tax exempt property after the municipality approves
107.32the district and before the parcel becomes taxable, the assessor shall, at the request of
107.33the authority, separately assess the estimated market value of the improvements. If the
107.34property becomes taxable, the county auditor shall add to original net tax capacity, the net
107.35tax capacity of the parcel, excluding the separately assessed improvements. If substantial
108.1taxable improvements were made to a parcel after certification of the district and if the
108.2property later becomes tax exempt, in whole or part, as a result of the authority acquiring
108.3the property through foreclosure or exercise of remedies under a lease or other revenue
108.4agreement or as a result of tax forfeiture, the amount to be added to the original net tax
108.5capacity of the district as a result of the property again becoming taxable is the amount
108.6of the parcel's value that was included in original net tax capacity when the parcel was
108.7first certified. The amount to be added to the original net tax capacity of the district as a
108.8result of enlargements equals the net tax capacity of the added real property as most
108.9recently certified by the commissioner of revenue as of the date of modification of the tax
108.10increment financing plan pursuant to section 469.175, subdivision 4.
108.11    (d) If the net tax capacity of a property increases because the property no longer
108.12qualifies under the Minnesota Agricultural Property Tax Law, section 273.111; the
108.13Minnesota Open Space Property Tax Law, section 273.112; or the Metropolitan
108.14Agricultural Preserves Act, chapter 473H, the Rural Preserve Property Tax Program under
108.15section 273.114, or because platted, unimproved property is improved or market value
108.16is increased after approval of the plat under section 273.11, subdivision 14, 14a, or 14b,
108.17the increase in net tax capacity must be added to the original net tax capacity. If the
108.18net tax capacity of a property increases because the property no longer qualifies for the
108.19homestead market value exclusion under section 273.13, subdivision 35, the increase in
108.20net tax capacity must be added to original net tax capacity if the original construction of
108.21the affected home was completed before the date the assessor certified the original net
108.22tax capacity of the district.
108.23    (e) The amount to be subtracted from the original net tax capacity of the district as a
108.24result of previously taxable real property within the district becoming tax exempt or
108.25qualifying in whole or part for an exclusion from taxable market value, or a reduction in
108.26the geographic area of the district, shall be the amount of original net tax capacity initially
108.27attributed to the property becoming tax exempt, being excluded from taxable market
108.28value, or being removed from the district. If the net tax capacity of property located within
108.29the tax increment financing district is reduced by reason of a court-ordered abatement,
108.30stipulation agreement, voluntary abatement made by the assessor or auditor or by order
108.31of the commissioner of revenue, the reduction shall be applied to the original net tax
108.32capacity of the district when the property upon which the abatement is made has not been
108.33improved since the date of certification of the district and to the captured net tax capacity
108.34of the district in each year thereafter when the abatement relates to improvements made
108.35after the date of certification. The county auditor may specify reasonable form and content
109.1of the request for certification of the authority and any modification thereof pursuant to
109.2section 469.175, subdivision 4.
109.3    (f) If a parcel of property contained a substandard building or improvements
109.4described in section 469.174, subdivision 10, paragraph (e), that were demolished or
109.5removed and if the authority elects to treat the parcel as occupied by a substandard
109.6building under section 469.174, subdivision 10, paragraph (b), or by improvements under
109.7section 469.174, subdivision 10, paragraph (e), the auditor shall certify the original net tax
109.8capacity of the parcel using the greater of (1) the current net tax capacity of the parcel, or
109.9(2) the estimated market value of the parcel for the year in which the building or other
109.10improvements were demolished or removed, but applying the class rates for the current
109.11year.
109.12    (g) For a redevelopment district qualifying under section 469.174, subdivision 10,
109.13paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of
109.14the land as the original tax capacity for any parcel in the district that contains a building
109.15that suffered substantial damage as a result of the disaster or emergency.

109.16    Sec. 40. Minnesota Statutes 2010, section 469.1793, is amended to read:
109.17469.1793 DEVELOPER OBLIGATIONS CONTINUED.
109.18If a developer or other private entity agreed to make payments to the authority or
109.19municipality to reimburse the municipality for the state aid offset under Minnesota Statutes
109.202000, section 273.1399, the obligation continues in effect, notwithstanding the repeal of
109.21section 273.1399. Payments received by the development authority are increments for
109.22purposes of the state grant program under section 469.1799.

109.23    Sec. 41. Minnesota Statutes 2010, section 469.1813, subdivision 6b, is amended to
109.24read:
109.25    Subd. 6b. Extended duration limit. (a) Notwithstanding the provisions of
109.26subdivision 6, a political subdivision may grant an abatement for a period of up to 20
109.27years, if the abatement is for a qualified business.
109.28(b) To be a qualified business for purposes of this subdivision, at least 50 percent of
109.29the payroll of the operations of the business that qualify for the abatement must be for
109.30employees engaged in one of the following lines of business or any combination of them:
109.31(1) manufacturing;
109.32(2) agricultural processing;
109.33(3) mining;
109.34(4) research and development;
110.1(5) warehousing; or
110.2(6) qualified high technology.
110.3Alternatively, a qualified business also includes a taxpayer whose real and personal
110.4property is subject to valuation under Minnesota Rules, chapter 8100.
110.5(c)(1) "Manufacturing" means the material staging and production of tangible
110.6personal property by procedures commonly regarded as manufacturing, processing,
110.7fabrication, or assembling which changes some existing material into new shapes, new
110.8qualities, or new combinations.
110.9(2) "Mining" has the meaning given in section 613(c) of the Internal Revenue Code
110.10of 1986.
110.11(3) "Agricultural processing" means transforming, packaging, sorting, or grading
110.12livestock or livestock products, agricultural commodities, or plants or plant products into
110.13goods that are used for intermediate or final consumption including goods for nonfood use.
110.14(4) "Research and development" means qualified research as defined in section
110.1541(d) of the Internal Revenue Code of 1986.
110.16(5) "Qualified high technology" means one or more of the following activities:
110.17(i) advanced computing, which is any technology used in the design and development
110.18of any of the following:
110.19(A) computer hardware and software;
110.20(B) data communications; and
110.21(C) information technologies;
110.22(ii) advanced materials, which are materials with engineered properties created
110.23through the development of specialized process and synthesis technology;
110.24(iii) biotechnology, which is any technology that uses living organisms, cells,
110.25macromolecules, microorganisms, or substances from living organisms to make or modify
110.26a product, improve plants or animals, or develop microorganisms for useful purposes;
110.27(iv) electronic device technology, which is any technology that involves
110.28microelectronics, semiconductors, electronic equipment, and instrumentation, radio
110.29frequency, microwave, and millimeter electronics, and optical and optic-electrical devices,
110.30or data and digital communications and imaging devices;
110.31(v) engineering or laboratory testing related to the development of a product;
110.32(vi) technology that assists in the assessment or prevention of threats or damage to
110.33human health or the environment, including, but not limited to, environmental cleanup
110.34technology, pollution prevention technology, or development of alternative energy sources;
111.1(vii) medical device technology, which is any technology that involves medical
111.2equipment or products other than a pharmaceutical product that has therapeutic or
111.3diagnostic value and is regulated; or
111.4(viii) advanced vehicles technology which is any technology that involves electric
111.5vehicles, hybrid vehicles, or alternative fuel vehicles, or components used in the
111.6construction of electric vehicles, hybrid vehicles, or alternative fuel vehicles. An electric
111.7vehicle is a road vehicle that draws propulsion energy only from an onboard source of
111.8electrical energy. A hybrid vehicle is a road vehicle that can draw propulsion energy from
111.9both a consumable fuel and a rechargeable energy storage system.
111.10(d) The authority to grant new abatements under this subdivision expires on July 1,
111.112004, except that the authority to grant new abatements for real and personal property
111.12subject to valuation under Minnesota Rules, chapter 8100, does not expire.

111.13    Sec. 42. Minnesota Statutes 2010, section 473F.02, subdivision 3, is amended to read:
111.14    Subd. 3. Commercial-industrial property. "Commercial-industrial property"
111.15means the following categories of property, as defined in section 273.13, excluding that
111.16portion of such property (1) which may, by law, constitute the tax base for a tax increment
111.17pledged under section 469.042 or 469.162, certification of which was requested prior to
111.18August 1, 1979, to the extent and while such tax increment is so pledged; or (2) which is
111.19exempt from taxation under section 272.02:
111.20(a) That portion of class 3 property defined in Minnesota Statutes 1971, section
111.21273.13 , consisting of stocks of merchandise and furniture and fixtures used therewith;
111.22manufacturers' materials and manufactured articles; and tools, implements and machinery,
111.23whether fixtures or otherwise.
111.24(b) That portion of class 4 property defined in Minnesota Statutes 1971, section
111.25273.13 , which is either used or zoned for use for any commercial or industrial purpose,
111.26except for such property which is, or, in the case of property under construction, will when
111.27completed be used exclusively for residential occupancy and the provision of services
111.28to residential occupants thereof. Property shall be considered as used exclusively for
111.29residential occupancy only if each of not less than 80 percent of its occupied residential
111.30units is, or, in the case of property under construction, will when completed be occupied
111.31under an oral or written agreement for occupancy over a continuous period of not less
111.32than 30 days.
111.33If the classification of property prescribed by section 273.13 is modified by
111.34legislative amendment, the references in this subdivision shall be to such successor class
112.1or classes of property, or portions thereof, as embrace the kinds of property designated
112.2in this subdivision.

112.3    Sec. 43. REPEALER.
112.4Minnesota Statutes 2010, sections 272.02, subdivision 83; 290.06, subdivisions
112.524 and 32; 297A.68, subdivision 41; 469.042, subdivisions 2, 3, and 4; 469.043;
112.6469.059, subdivision 13; 469.129; 469.134; 469.162, subdivision 2; 469.1651; 469.166,
112.7subdivisions 7, 8, 9, 10, 11, and 12; 469.167, subdivisions 1 and 3; 469.168; 469.169,
112.8subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 13; 469.170, subdivisions 1, 2, 3, 4, 5, 5a,
112.95b, 5c, 5d, 5e, 6, 7, and 8; 469.171, subdivisions 2, 5, and 6b; 469.173, subdivisions 1
112.10and 3; 469.1765; 469.1791; 469.1799, subdivision 2; 469.301, subdivisions 1, 2, 3, 4, and
112.115; 469.302; 469.303; 469.304; 469.321; 469.3215; 469.322; 469.323; 469.324; 469.325;
112.12469.326; 469.327; 469.328; 469.329; and 473.680, are repealed.

112.13    Sec. 44. EFFECTIVE DATE.
112.14This article is effective August 1, 2012, and the tax increment financing provisions
112.15apply to all districts, regardless of when the request for certification was made, provided
112.16that the adjustments to original tax capacity required under Minnesota Statutes, section
112.17469.177, subdivision 1, apply only to exclusions that reduced taxable market value
112.18beginning with taxes payable in 2012 or thereafter, regardless of when the law authorizing
112.19the exclusion became effective.

112.20ARTICLE 8
112.21PUBLIC FINANCE

112.22    Section 1. Minnesota Statutes 2010, section 373.40, subdivision 1, is amended to read:
112.23    Subdivision 1. Definitions. For purposes of this section, the following terms have
112.24the meanings given.
112.25(a) "Bonds" means an obligation as defined under section 475.51.
112.26(b) "Capital improvement" means acquisition or betterment of public lands,
112.27buildings, or other improvements within the county for the purpose of a county courthouse,
112.28administrative building, health or social service facility, correctional facility, jail, law
112.29enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads
112.30and bridges, public works facilities, fairgrounds buildings, and records and data storage
112.31facilities, and the acquisition of development rights in the form of conservation easements
112.32under chapter 84C. An improvement must have an expected useful life of five years or
112.33more to qualify. "Capital improvement" does not include a recreation or sports facility
113.1building (such as, but not limited to, a gymnasium, ice arena, racquet sports facility,
113.2swimming pool, exercise room or health spa), unless the building is part of an outdoor
113.3park facility and is incidental to the primary purpose of outdoor recreation.
113.4(c) "Metropolitan county" means a county located in the seven-county metropolitan
113.5area as defined in section 473.121 or a county with a population of 90,000 or more.
113.6(d) "Population" means the population established by the most recent of the
113.7following (determined as of the date the resolution authorizing the bonds was adopted):
113.8(1) the federal decennial census,
113.9(2) a special census conducted under contract by the United States Bureau of the
113.10Census, or
113.11(3) a population estimate made either by the Metropolitan Council or by the state
113.12demographer under section 4A.02.
113.13(e) "Qualified indoor ice arena" means a facility that meets the requirements of
113.14section 373.43.
113.15(f) "Tax capacity" means total taxable market value, but does not include captured
113.16market value.

113.17    Sec. 2. Minnesota Statutes 2010, section 373.40, subdivision 2, is amended to read:
113.18    Subd. 2. Application of election requirement. (a) Bonds issued by a county
113.19to finance capital improvements under an approved capital improvement plan are not
113.20subject to the election requirements of section 375.18 or 475.58. The bonds must be
113.21approved by vote of at least three-fifths of the members of the county board. In the case
113.22of a metropolitan county, the bonds must be approved by vote of at least two-thirds of
113.23the members of the county board.
113.24(b) Before issuance of bonds qualifying under this section, the county must publish
113.25a notice of its intention to issue the bonds and the date and time of a hearing to obtain
113.26public comment on the matter. The notice must be published in the official newspaper
113.27of the county or in a newspaper of general circulation in the county. The notice must be
113.28published at least 14, but not more than 28, days before the date of the hearing.
113.29(c) A county may issue the bonds only upon obtaining the approval of a majority of
113.30the voters voting on the question of issuing the obligations, if a petition requesting a vote
113.31on the issuance is signed by voters equal to five percent of the votes cast in the county in
113.32the last county general election and is filed with the county auditor within 30 days after
113.33the public hearing. The commissioner of revenue shall prepare a suggested form of the
113.34question to be presented at the election If the county elects not to submit the question to
113.35the voters, the county shall not propose the issuance of bonds under this section for the
114.1same purpose and in the same amount for a period of 365 days from the date of receipt
114.2of the petition. If the question of issuing the bonds is submitted and not approved by the
114.3voters, the provisions of section 475.58, subdivision 1a, apply.

114.4    Sec. 3. Minnesota Statutes 2010, section 373.40, subdivision 4, is amended to read:
114.5    Subd. 4. Limitations on amount. A county may not issue bonds under this section
114.6if the maximum amount of principal and interest to become due in any year on all the
114.7outstanding bonds issued pursuant to this section (including the bonds to be issued) will
114.8equal or exceed 0.12 percent of taxable market value of property in the county. Calculation
114.9of the limit must be made using the taxable market value for the taxes payable year in
114.10which the obligations are issued and sold, provided that, for purposes of determining
114.11the principal and interest due in any year, the county may deduct the amount of interest
114.12expected to be paid or reimbursed to the county by the federal government in that year on
114.13any outstanding bonds or the bonds to be issued. This section does not limit the authority
114.14to issue bonds under any other special or general law.

114.15    Sec. 4. Minnesota Statutes 2010, section 474A.02, subdivision 23a, is amended to read:
114.16    Subd. 23a. Qualified bonds. "Qualified bonds" means the specific type or types
114.17of obligations that are subject to the annual volume cap. Qualified bonds include the
114.18following types of obligations as defined in federal tax law:
114.19(a) "public facility bonds" means "exempt facility bonds" as defined in federal
114.20tax law, except for residential rental project bonds, which are those obligations issued
114.21to finance airports, docks and wharves, mass commuting facilities, facilities for the
114.22furnishing of water, sewage facilities, solid waste disposal facilities, facilities for the
114.23local furnishing of electric energy or gas, local district heating or cooling facilities, and
114.24qualified hazardous waste facilities. New bonds and other obligations are ineligible to
114.25receive state allocations or entitlement authority for public facility projects under this
114.26section if they have been issued:
114.27(1) for the purpose of refinancing, refunding, or otherwise defeasing existing debt;
114.28and
114.29(2) more than one calendar year prior to the date of application;
114.30(b) "residential rental project bonds" which are those obligations issued to finance
114.31qualified residential rental projects;
114.32(c) "mortgage bonds";
114.33(d) "small issue bonds" issued to finance manufacturing projects and the acquisition
114.34or improvement of agricultural real or personal property under sections 41C.01 to 41C.13;
115.1(e) "student loan bonds" issued by or on behalf of the Minnesota Office of Higher
115.2Education;
115.3(f) "redevelopment bonds";
115.4(g) "governmental bonds" with a nonqualified amount in excess of $15,000,000 as
115.5set forth in section 141(b)5 of federal tax law; and
115.6(h) "enterprise zone facility bonds" issued to finance facilities located within
115.7empowerment zones or enterprise communities, as authorized under Public Law 103-66,
115.8section 13301 section 1394 of the Internal Revenue Code.

115.9    Sec. 5. Minnesota Statutes 2010, section 474A.04, subdivision 1a, is amended to read:
115.10    Subd. 1a. Entitlement reservations; carryforward; deduction. Any amount
115.11returned by an entitlement issuer before July 15 shall be reallocated through the housing
115.12pool. Any amount returned on or after July 15 shall be reallocated through the unified
115.13pool. An amount returned after the last Monday in November shall be reallocated to the
115.14Minnesota housing finance agency. Any amount of bonding authority that an entitlement
115.15issuer carries forward under federal tax law that is not permanently issued or for which
115.16the governing body of the entitlement issuer has not enacted a resolution electing to use
115.17the authority for mortgage credit certificates and has not provided a notice of issue to the
115.18commissioner before 4:30 p.m. on the last business day in December of the succeeding
115.19calendar year shall be deducted from the entitlement allocation for that entitlement issuer
115.20in the next succeeding calendar year. Any amount deducted from an entitlement issuer's
115.21allocation under this subdivision shall be reallocated to other entitlement issuers, the
115.22housing pool, the small issue pool, and the public facilities pool on a proportional basis
115.23consistent with section 474A.03.
115.24EFFECTIVE DATE.This section is effective the day following final enactment
115.25and applies to any bonding authority allocated in 2011 and subsequent years.

115.26    Sec. 6. Minnesota Statutes 2010, section 474A.062, is amended to read:
115.27474A.062 MINNESOTA OFFICE OF HIGHER EDUCATION 120-DAY
115.28ISSUANCE EXEMPTION.
115.29The Minnesota Office of Higher Education is exempt from the 120-day issuance
115.30requirements in this chapter and may carry forward allocations for student loan bonds
115.31into one successive calendar year, subject to carryforward notice requirements of section
115.32474A.131, subdivision 2 .
116.1EFFECTIVE DATE.This section is effective the day following final enactment
116.2and applies to any bonding authority allocated in 2011 and subsequent years.

116.3    Sec. 7. Minnesota Statutes 2010, section 474A.091, subdivision 3a, is amended to read:
116.4    Subd. 3a. Mortgage bonds. (a) Bonding authority remaining in the unified pool on
116.5October 1 is available for single-family housing programs for cities that applied in January
116.6and received an allocation under section 474A.061, subdivision 2a, in the same calendar
116.7year. The Minnesota Housing Finance Agency shall receive an allocation for mortgage
116.8bonds pursuant to this section, minus any amounts for a city or consortium that intends to
116.9issue bonds on its own behalf under paragraph (c).
116.10(b) The agency may issue bonds on behalf of participating cities. The agency shall
116.11request an allocation from the commissioner for all applicants who choose to have the
116.12agency issue bonds on their behalf and the commissioner shall allocate the requested
116.13amount to the agency. Allocations shall be awarded by the commissioner each Monday
116.14commencing on the first Monday in October through the last Monday in November for
116.15applications received by 4:30 p.m. on the Monday of the week preceding an allocation.
116.16For cities who choose to have the agency issue bonds on their behalf, allocations
116.17will be made loan by loan, on a first-come, first-served basis among the cities. The
116.18agency shall submit an application fee pursuant to section 474A.03, subdivision 4, and an
116.19application deposit equal to two percent of the requested allocation to the commissioner
116.20when requesting an allocation from the unified pool. After awarding an allocation and
116.21receiving a notice of issuance for mortgage bonds issued on behalf of the participating
116.22cities, the commissioner shall transfer the application deposit to the Minnesota Housing
116.23Finance Agency.
116.24For purposes of paragraphs (a) to (d), "city" means a county or a consortium of
116.25local government units that agree through a joint powers agreement to apply together
116.26for single-family housing programs, and has the meaning given it in section 462C.02,
116.27subdivision 6
. "Agency" means the Minnesota Housing Finance Agency.
116.28(c) Any city that received an allocation pursuant to section 474A.061, subdivision
116.292a, paragraph (f)
, in the current year that wishes to receive an additional allocation from
116.30the unified pool and issue bonds on its own behalf or pursuant to a joint powers agreement
116.31shall notify the Minnesota Housing Finance Agency by the third Monday in September.
116.32The total amount of allocation for mortgage bonds for a city choosing to issue bonds on its
116.33own behalf or through a joint powers agreement is limited to the lesser of: (i) the amount
116.34requested, or (ii) the product of the total amount available for mortgage bonds from the
116.35unified pool, multiplied by the ratio of the population of each city that applied in January
117.1and received an allocation under section 474A.061, subdivision 2a, in the same calendar
117.2year, as determined by the most recent estimate of the city's population released by the
117.3state demographer's office to the total of the population of all the cities that applied in
117.4January and received an allocation under section 474A.061, subdivision 2a, in the same
117.5calendar year. If a city choosing to issue bonds on its own behalf or through a joint powers
117.6agreement is located within a county that has also chosen to issue bonds on its own behalf
117.7or through a joint powers agreement, the city's population will be deducted from the
117.8county's population in calculating the amount of allocations under this paragraph.
117.9The Minnesota Housing Finance Agency shall notify each city choosing to issue
117.10bonds on its own behalf or pursuant to a joint powers agreement of the amount of its
117.11allocation by October 15. Upon determining the amount of the allocation of each choosing
117.12to issue bonds on its own behalf or through a joint powers agreement, the agency shall
117.13forward a list specifying the amounts allotted to each city.
117.14A city that chooses to issue bonds on its own behalf or through a joint powers
117.15agreement may request an allocation from the commissioner by forwarding an application
117.16with an application fee pursuant to section 474A.03, subdivision 4, and an application
117.17deposit equal to two percent of the requested amount to the commissioner no later than
117.184:30 p.m. on the Monday of the week preceding an allocation. Allocations to cities that
117.19choose to issue bonds on their own behalf shall be awarded by the commissioner on
117.20the first Monday after October 15 through the last Monday in November. No city may
117.21receive an allocation from the commissioner after the last Monday in November. The
117.22commissioner shall allocate the requested amount to the city or cities subject to the
117.23limitations under this subdivision.
117.24If a city issues mortgage bonds from an allocation received under this paragraph,
117.25the issuer must provide for the recycling of funds into new loans. If the issuer is not
117.26able to provide for recycling, the issuer must notify the commissioner in writing of the
117.27reason that recycling was not possible and the reason the issuer elected not to have the
117.28Minnesota Housing Finance Agency issue the bonds. "Recycling" means the use of money
117.29generated from the repayment and prepayment of loans for further eligible loans or for the
117.30redemption of bonds and the issuance of current refunding bonds.
117.31(d) No entitlement city or county or city in an entitlement county may apply for or
117.32be allocated authority to issue mortgage bonds or use mortgage credit certificates from
117.33the unified pool.
117.34(e) An allocation awarded to the agency for mortgage bonds under this section
117.35may be carried forward by the agency into the next succeeding calendar year subject to
118.1notice requirements under section 474A.131 and is available until the last business day in
118.2December of that succeeding calendar year.
118.3EFFECTIVE DATE.This section is effective the day following final enactment
118.4and applies to any bonding authority allocated in 2011 and subsequent years.

118.5    Sec. 8. Minnesota Statutes 2010, section 475.521, subdivision 2, is amended to read:
118.6    Subd. 2. Election requirement. (a) Bonds issued by a municipality to finance
118.7capital improvements under an approved capital improvements plan are not subject to the
118.8election requirements of section 475.58. The bonds must be approved by an affirmative
118.9vote of three-fifths of the members of a five-member governing body. In the case of a
118.10governing body having more or less than five members, the bonds must be approved by a
118.11vote of at least two-thirds of the members of the governing body.
118.12(b) Before the issuance of bonds qualifying under this section, the municipality
118.13must publish a notice of its intention to issue the bonds and the date and time of the
118.14hearing to obtain public comment on the matter. The notice must be published in the
118.15official newspaper of the municipality or in a newspaper of general circulation in the
118.16municipality. Additionally, the notice may be posted on the official Web site, if any, of the
118.17municipality. The notice must be published at least 14 but not more than 28 days before
118.18the date of the hearing.
118.19(c) A municipality may issue the bonds only after obtaining the approval of a
118.20majority of the voters voting on the question of issuing the obligations, if a petition
118.21requesting a vote on the issuance is signed by voters equal to five percent of the votes cast
118.22in the municipality in the last municipal general election and is filed with the clerk within
118.2330 days after the public hearing. The commissioner of revenue shall prepare a suggested
118.24form of the question to be presented at the election If the municipality elects not to submit
118.25the question to the voters, the municipality shall not propose the issuance of bonds under
118.26this section for the same purpose and in the same amount for a period of 365 days from the
118.27date of receipt of the petition. If the question of issuing the bonds is submitted and not
118.28approved by the voters, the provisions of section 475.58, subdivision 1a, apply.

118.29    Sec. 9. Minnesota Statutes 2010, section 475.521, subdivision 4, is amended to read:
118.30    Subd. 4. Limitations on amount. A municipality may not issue bonds under
118.31this section if the maximum amount of principal and interest to become due in any
118.32year on all the outstanding bonds issued under this section, including the bonds to be
118.33issued, will equal or exceed 0.16 percent of the taxable market value of property in the
118.34municipality. Calculation of the limit must be made using the taxable market value for
119.1the taxes payable year in which the obligations are issued and sold, provided that, for
119.2purposes of determining the principal and interest due in any year, the municipality may
119.3deduct the amount of interest expected to be paid or reimbursed to the municipality by the
119.4federal government in that year on any outstanding bonds or the bonds to be issued. In
119.5the case of a municipality with a population of 2,500 or more, the bonds are subject to
119.6the net debt limits under section 475.53. In the case of a shared facility in which more
119.7than one municipality participates, upon compliance by each participating municipality
119.8with the requirements of subdivision 2, the limitations in this subdivision and the net debt
119.9represented by the bonds shall be allocated to each participating municipality in proportion
119.10to its required financial contribution to the financing of the shared facility, as set forth in
119.11the joint powers agreement relating to the shared facility. This section does not limit the
119.12authority to issue bonds under any other special or general law.

119.13    Sec. 10. Minnesota Statutes 2010, section 475.58, subdivision 3b, is amended to read:
119.14    Subd. 3b. Street reconstruction. (a) A municipality may, without regard to
119.15the election requirement under subdivision 1, issue and sell obligations for street
119.16reconstruction, if the following conditions are met:
119.17    (1) the streets are reconstructed under a street reconstruction plan that describes the
119.18street reconstruction to be financed, the estimated costs, and any planned reconstruction
119.19of other streets in the municipality over the next five years, and the plan and issuance of
119.20the obligations has been approved by a vote of all of the members of the governing body
119.21present at the meeting following a public hearing for which notice has been published in
119.22the official newspaper at least ten days but not more than 28 days prior to the hearing; and
119.23    (2) if a petition requesting a vote on the issuance is signed by voters equal to
119.24five percent of the votes cast in the last municipal general election and is filed with the
119.25municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
119.26only after obtaining the approval of a majority of the voters voting on the question of the
119.27issuance of the obligations. If the municipality elects not to submit the question to the
119.28voters, the municipality shall not propose the issuance of bonds under this section for the
119.29same purpose and in the same amount for a period of 365 days from the date of receipt
119.30of the petition. If the question of issuing the bonds is submitted and not approved by the
119.31voters, the provisions of subdivision 1a, apply.
119.32    (b) Obligations issued under this subdivision are subject to the debt limit of the
119.33municipality and are not excluded from net debt under section 475.51, subdivision 4.
119.34    (c) For purposes of this subdivision, street reconstruction includes utility
119.35replacement and relocation and other activities incidental to the street reconstruction, turn
120.1lanes and other improvements having a substantial public safety function, realignments,
120.2other modifications to intersect with state and county roads, and the local share of state
120.3and county road projects.
120.4    (d) Except in the case of turn lanes, safety improvements, realignments, intersection
120.5modifications, and the local share of state and county road projects, street reconstruction
120.6does not include the portion of project cost allocable to widening a street or adding curbs
120.7and gutters where none previously existed.

120.8    Sec. 11. Laws 1971, chapter 773, section 1, subdivision 2, as amended by Laws 1974,
120.9chapter 351, section 5, Laws 1976, chapter 234, sections 1 and 7, Laws 1978, chapter 788,
120.10section 1, Laws 1981, chapter 369, section 1, Laws 1983, chapter 302, section 1, Laws
120.111988, chapter 513, section 1, Laws 1992, chapter 511, article 9, section 23, Laws 1998,
120.12chapter 389, article 3, section 27, and Laws 2002, chapter 390, section 23, is amended to
120.13read:
120.14    Subd. 2. For each of the years 2003 to 2013 2012 to 2024, the city of St. Paul is
120.15authorized to issue bonds in the aggregate principal amount of $20,000,000 $25,000,000
120.16for each year.
120.17EFFECTIVE DATE.This section is effective the day following final enactment.

120.18    Sec. 12. Laws 2003, chapter 127, article 12, section 28, is amended to read:
120.19    Sec. 28. NURSING HOME BONDS AUTHORIZED.
120.20    Itasca County may issue bonds under Minnesota Statutes, sections 376.55 and
120.21376.56 , to finance the construction of a 35-bed nursing home facility to replace an existing
120.2235-bed private facility located in the county. The bonds issued under this section must
120.23may be payable solely from revenues and or may not be general obligations of the county.
120.24EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after
120.25the governing body of Itasca County and its chief clerical officer timely complete their
120.26compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

120.27    Sec. 13. CARRYFORWARD OF BONDING AUTHORITY FOR 2008, 2009,
120.28AND 2010; NO DEDUCTION FROM ENTITLEMENT ALLOCATION.
120.29Notwithstanding Minnesota Statutes, section 474A.04, subdivision 1a, and Laws
120.302009, chapter 88, article 6, section 27, bonding authority that was allocated to an
120.31entitlement issuer in 2008, 2009, and 2010 and that was carried forward under federal
120.32tax law, but for which the entitlement issuer did not provide a notice of issue to the
121.1commissioner of management and budget before 4:30 p.m. on the last business day of
121.2December 2011 must not be deducted from the entitlement allocation for that entitlement
121.3issuer in 2012.
121.4EFFECTIVE DATE.This section is effective the day following final enactment
121.5and applies retroactively to rescind any reallocation by the commissioner of management
121.6and budget under Minnesota Statutes, section 474A.04, subdivision 1a, of any amounts so
121.7deducted.

121.8    Sec. 14. WOODBURY; EXEMPTION FROM REFERENDUM.
121.9(a) Notwithstanding the referendum requirement in Minnesota Statutes, section
121.10475.58, subdivision 1, or any other provision of law, the city of Woodbury may issue and
121.11sell obligations to pay for the cost of renovating, improving, expanding, and equipping the
121.12Bielenberg Sports Center, along with costs of issuance of the obligations and capitalized
121.13interest, if:
121.14(1) the obligations are secured by a pledge of revenues from the facility; and
121.15(2) the city finds, based on analysis provided by a professional experienced in
121.16finance, that the facility's revenues and a property tax levy equal to the maximum annual
121.17property tax levy used to pay the bonds previously issued to finance, in whole or in part,
121.18the facility will in the aggregate be sufficient to pay the obligations without the imposition
121.19of an additional property tax levy pledged to the obligations.
121.20(b) Before issuing bonds under this section, the city must publish a notice of its
121.21intention to issue the bonds and the date and time of a hearing to obtain public comment
121.22on the matter. The notice must be published on the official Web site of the city or in a
121.23newspaper of general circulation in the city. The notice must be published at least 14 but
121.24not more than 28 days before the date of the hearing. The city may issue the bonds only
121.25upon obtaining the approval of a majority of the voters voting on the question of issuing
121.26the obligations, if a petition requesting a vote on the issuance is signed by voters equal to
121.27five percent of the votes cast in the city in the last general election and is filed with the city
121.28clerk within 30 days after the public hearing.
121.29EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after
121.30the governing body of the city of Woodbury and its chief clerical officer timely complete
121.31their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

122.1ARTICLE 9
122.2SALES TAXES

122.3    Section 1. Minnesota Statutes 2010, section 297A.8155, is amended to read:
122.4297A.8155 LIQUOR REPORTING REQUIREMENTS; PENALTY.
122.5    (a) A person who sells liquor, as defined in section 295.75, subdivision 1, in
122.6Minnesota to a retailer that sells liquor, shall file with the commissioner an annual
122.7informational report, in the form and manner prescribed by the commissioner, indicating
122.8the name, address, and Minnesota business identification number of each retailer, and the
122.9total dollar amount of liquor sold to each retailer in the previous calendar year. The report
122.10must be filed on or before March 31 following the close of the calendar year. A person
122.11failing to file this report is subject to the penalty imposed under section 289A.60. A
122.12person required to file a report under this section is not required to provide a copy of an
122.13exemption certificate, as defined in section 297A.72, provided to the person by a retailer,
122.14along with the annual informational report.
122.15(b) A person who was required to submit an annual informational report under this
122.16section to the commissioner of revenue during calendar year 2010 or 2011 is not required
122.17to provide a copy of an exemption certificate or a retailer's tax identification number
122.18along with the informational report.
122.19EFFECTIVE DATE.Paragraph (a) is effective for reports required to be filed
122.20beginning in calendar year 2012 and thereafter. Paragraph (b) is effective the day following
122.21final enactment and applies to reports required to be filed in calendar year 2010 or 2011.

122.22    Sec. 2. Minnesota Statutes 2010, section 297A.99, subdivision 4, is amended to read:
122.23    Subd. 4. Tax base. (a) The tax applies to sales taxable under this chapter that occur
122.24within the political subdivision.
122.25    (b) Taxable goods or services are subject to a political subdivision's sales tax, if they
122.26are sourced to the political subdivision pursuant to section 297A.668.
122.27    (c) The requirement in paragraph (a) only applies to a local sales tax of general
122.28applicability; and to local taxes on specific items such as lodging, food and beverage, and
122.29admissions, if explicitly provided for in the authorizing law. The issue of whether the tax
122.30is collected by the commissioner has no bearing on this subdivision.
122.31EFFECTIVE DATE.This section is effective retroactively from July 1, 2011.

123.1    Sec. 3. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by
123.2Laws 2005, First Special Session chapter 3, article 5, section 28, and Laws 2011, First
123.3Special Session chapter 7, article 4, section 5, is amended to read:
123.4    Subd. 3. Use of revenues. (a) Revenues received from the taxes authorized by
123.5subdivisions 1 and 2 must be used by the city to pay for the cost of collecting and
123.6administering the taxes and to pay for the following projects:
123.7    (1) transportation infrastructure improvements including regional highway and
123.8airport improvements;
123.9    (2) improvements to the civic center complex;
123.10    (3) a municipal water, sewer, and storm sewer project necessary to improve regional
123.11ground water quality; and
123.12    (4) construction of a regional recreation and sports center and other higher education
123.13facilities available for both community and student use.
123.14    (b) The total amount of capital expenditures or bonds for projects listed in paragraph
123.15(a) that may be paid from the revenues raised from the taxes authorized in this section
123.16may not exceed $111,500,000. The total amount of capital expenditures or bonds for the
123.17project in clause (4) that may be paid from the revenues raised from the taxes authorized
123.18in this section may not exceed $28,000,000.
123.19(c) In addition to the projects authorized in paragraph (a) and not subject to the
123.20amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an
123.21election under subdivision 5, paragraph (c), use the revenues received from the taxes and
123.22bonds authorized in this section to pay the costs of or bonds for the following purposes:
123.23(1) $17,000,000 for capital expenditures and bonds for the following Olmsted
123.24County transportation infrastructure improvements:
123.25(i) County State Aid Highway 34 reconstruction;
123.26(ii) Trunk Highway 63 and County State Aid Highway 16 interchange;
123.27(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22
123.28interchange;
123.29(iv) widening of County State Aid Highway 22 West Circle Drive; and
123.30(v) 60th Avenue Northwest corridor preservation;
123.31(2) $30,000,000 for city transportation projects including:
123.32(i) Trunk Highway 52 and 65th Street interchange;
123.33(ii) NW transportation corridor acquisition;
123.34(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;
123.35(iv) Trunk Highway 14 and Trunk Highway 63 intersection;
123.36(v) Southeast transportation corridor acquisition;
124.1(vi) Rochester International Airport expansion; and
124.2(vii) a transit operations center bus facility;
124.3(3) $14,000,000 for the University of Minnesota Rochester academic and
124.4complementary facilities;
124.5(4) $6,500,000 for the Rochester Community and Technical College/Winona State
124.6University career technical education and science and math facilities;
124.7(5) $6,000,000 for the Rochester Community and Technical College regional
124.8recreation facilities at University Center Rochester;
124.9(6) $20,000,000 for the Destination Medical Community Initiative;
124.10(7) $8,000,000 for the regional public safety and 911 dispatch center facilities;
124.11(8) $20,000,000 for a regional recreation/senior center;
124.12(9) $10,000,000 for an economic development fund; and
124.13(10) $8,000,000 for downtown infrastructure.
124.14(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1
124.15and 2 may be used to fund transportation improvements related to a railroad bypass that
124.16would divert traffic from the city of Rochester.
124.17(e) The city shall use $5,000,000 of the money allocated to the purpose in paragraph
124.18(c), clause (9), for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin,
124.19Eyota, Kasson, Mantorville, Oronoco, Pine Island, Plainview, St. Charles, Stewartville,
124.20Zumbrota, Spring Valley, West Concord, and Hayfield, and any other city with a 2010
124.21population of at least 1,000 that has a city boundary within 25 miles of the geographic
124.22center of Rochester and is closer to Rochester than to any other city with a population of
124.2320,000 or more, for economic development projects that these communities would fund
124.24through their economic development authority or housing and redevelopment authority.
124.25EFFECTIVE DATE.This section is effective the day following final enactment.

124.26    Sec. 4. Laws 2002, chapter 377, article 3, section 25, as amended by Laws 2009,
124.27chapter 88, article 4, section 19, and Laws 2010, chapter 389, article 5, section 3, is
124.28amended to read:
124.29    Sec. 25. ROCHESTER LODGING TAX.
124.30    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
124.31469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
124.32tax of one percent on the gross receipts from the furnishing for consideration of lodging at
124.33a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
124.34for a continuous period of 30 days or more.
125.1    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190
125.2or 477A.016, or any other law, and in addition to the tax authorized by subdivision 1,
125.3the city of Rochester may impose an additional tax of one three percent on the gross
125.4receipts from the furnishing for consideration of lodging at a hotel, motel, rooming house,
125.5tourist court, or resort, other than the renting or leasing of it for a continuous period of
125.630 days or more only upon the approval of the city governing body of a total financial
125.7package for the project.
125.8    Subd. 2. Disposition of proceeds. (a) The gross proceeds from the tax imposed
125.9under subdivision 1 must be used by the city to fund a local convention or tourism bureau
125.10for the purpose of marketing and promoting the city as a tourist or convention center.
125.11(b) The gross proceeds from the one three percent tax imposed under subdivision
125.121a shall be used to pay for (1) construction, renovation, improvement, and expansion of
125.13the Mayo Civic Center and related skyway access, lighting, parking, or landscaping; and
125.14(2) for payment of any principal, interest, or premium on bonds issued to finance the
125.15construction, renovation, improvement, and expansion of the Mayo Civic Center Complex.
125.16    Subd. 2a. Bonds. The city of Rochester may issue, without an election, general
125.17obligation bonds of the city, in one or more series, in the aggregate principal amount
125.18not to exceed $43,500,000, to pay for capital and administrative costs for the design,
125.19construction, renovation, improvement, and expansion of the Mayo Civic Center Complex,
125.20and related skyway, access, lighting, parking, and landscaping. The city may pledge
125.21the lodging tax authorized by subdivision 1a and the food and beverage tax authorized
125.22under Laws 2009, chapter 88, article 4, section 23, to the payment of the bonds. The debt
125.23represented by the bonds is not included in computing any debt limitations applicable to
125.24the city, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the
125.25principal of and interest on the bonds is not subject to any levy limitation or included in
125.26computing or applying any levy limitation applicable to the city.
125.27    Subd. 3. Expiration of taxing authority. The authority of the city to impose a
125.28tax under subdivision 1a shall expire when the principal and interest on any bonds or
125.29other obligations issued prior to December 31, 2014 2016, to finance the construction,
125.30renovation, improvement, and expansion of the Mayo Civic Center Complex and related
125.31skyway access, lighting, parking, or landscaping have been paid, including any bonds
125.32issued to refund such bonds, or at an earlier time as the city shall, by ordinance, determine.
125.33Any funds remaining after completion of the project and retirement or redemption of the
125.34bonds shall be placed in the general fund of the city.
126.1EFFECTIVE DATE.This section is effective the day after the governing body of
126.2the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
126.3645.021, subdivisions 2 and 3.

126.4    Sec. 5. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision 2,
126.5is amended to read:
126.6    Subd. 2. Use of revenues. (a) Revenues received from the tax authorized by
126.7subdivision 1 by the city of St. Cloud must be used for the cost of collecting and
126.8administering the tax and to pay all or part of the capital or administrative costs of the
126.9development, acquisition, construction, improvement, and securing and paying debt
126.10service on bonds or other obligations issued to finance the following regional projects as
126.11approved by the voters and specifically detailed in the referendum authorizing the tax or
126.12extending the tax:
126.13    (1) St. Cloud Regional Airport;
126.14    (2) regional transportation improvements;
126.15    (3) regional community and aquatics centers and facilities;
126.16    (4) regional public libraries; and
126.17    (5) acquisition and improvement of regional park land and open space.
126.18    (b) Revenues received from the tax authorized by subdivision 1 by the cities of St.
126.19Joseph, Waite Park, Sartell, Sauk Rapids, and St. Augusta must be used for the cost of
126.20collecting and administering the tax and to pay all or part of the capital or administrative
126.21costs of the development, acquisition, construction, improvement, and securing and paying
126.22debt service on bonds or other obligations issued to fund the projects specifically approved
126.23by the voters at the referendum authorizing the tax or extending the tax. The portion of
126.24revenues from the city going to fund the regional airport or regional library located in the
126.25city of St. Cloud will be as required under the applicable joint powers agreement.
126.26    (c) The use of revenues received from the taxes authorized in subdivision 1 for
126.27projects allowed under paragraphs (a) and (b) are limited to the amount authorized for
126.28each project under the enabling referendum.
126.29EFFECTIVE DATE.This section is effective the day after the governing body of
126.30each city that approves it complies with Minnesota Statutes, section 645.021, subdivision
126.313.

126.32    Sec. 6. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision 4,
126.33is amended to read:
127.1    Subd. 4. Termination of tax. The tax imposed in the cities of St. Joseph, St. Cloud,
127.2St. Augusta, Sartell, Sauk Rapids, and Waite Park under subdivision 1 expires when the
127.3city council determines that sufficient funds have been collected from the tax to retire or
127.4redeem the bonds and obligations authorized under subdivision 2, paragraph (a), but no
127.5later than December 31, 2018. Notwithstanding Minnesota Statutes, section 297A.99,
127.6subdivision 3, paragraphs (a), (c), and (d), a city may extend the tax imposed under
127.7subdivision 1 through December 31, 2038, if approved under the referendum authorizing
127.8the tax under subdivision 1 or if approved by voters of the city at a general election held
127.9no later than November 6, 2017.
127.10EFFECTIVE DATE.This section is effective the day after the governing body of
127.11each city that approves it complies with Minnesota Statutes, section 645.021, subdivision
127.123.

127.13    Sec. 7. Laws 2008, chapter 366, article 7, section 19, subdivision 3, as amended by
127.14Laws 2011, First Special Session chapter 7, article 4, section 8, is amended to read:
127.15    Subd. 3. Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99,
127.16subdivision 3
, paragraph (b), the proceeds of the tax imposed under this section shall be
127.17used to pay for the costs of improvements to the Sportsman Park/Ballfields, Riverside
127.18Park, Lions Park/Pavilion, Cedar South Park also known as Eldorado Park, and Spring
127.19Street Park; improvements to and extension of the River County bike trail; acquisition,
127.20and construction, improvement, and development of regional parks, bicycle trails, park
127.21land, open space, and of a pedestrian walkways, as described in the city improvement plan
127.22adopted by the city council by resolution on December 12, 2006, and walkway over
127.23Interstate 94 and State Highway 24; and the acquisition of land and construction of
127.24buildings for a community and recreation center. The total amount of revenues from the
127.25taxes in subdivisions 1 and 2 that may be used to fund these projects is $12,000,000
127.26plus any associated bond costs.
127.27EFFECTIVE DATE.This section is effective the day after compliance by the
127.28governing body of the city of Clearwater with Minnesota Statutes, section 645.021,
127.29subdivisions 2 and 3.

127.30    Sec. 8. CITY OF PROCTOR; LOCAL TAXES AUTHORIZED.
127.31    Subdivision 1. Food and beverage tax authorized. Notwithstanding Minnesota
127.32Statutes, section 477A.016, or any ordinance, city charter, or other provision of law, the
127.33city of Proctor may, by ordinance, impose a sales tax of up to one percent on the gross
128.1receipts of all food and beverages sold by a restaurant or place of refreshment, as defined
128.2by resolution of the city, that is located within the city. For purposes of this section, "food
128.3and beverages" include retail on-sale of intoxicating liquor and fermented malt beverages.
128.4    Subd. 2. Entertainment tax. Notwithstanding Minnesota Statutes, section
128.5477A.016, or any ordinance, city charter, or other provision of law, the city of Proctor
128.6may, by ordinance, impose a tax of up to one percent on the gross receipts on admissions
128.7to an entertainment event, as defined by resolution of the city, located within the city. For
128.8purposes of this section, "entertainment event" means any event for which persons pay
128.9money in order to be admitted to the premises and to be entertained, including, but not
128.10limited to, theaters, concerts, sporting events, circuses, and fairs.
128.11    Subd. 3. Use of proceeds from authorized taxes. The proceeds of the taxes
128.12imposed under subdivisions 1 and 2 must be used by the city to fund: (1) operational
128.13costs of the Proctor recreation center, golf course, community center, and the South
128.14St. Louis County fairgrounds; and (2) construction and improvement of walking and
128.15bicycle trails and a multiuse civic center facility, parking improvements, festival and
128.16event coordination, and improvements related to the redevelopment and realignment of a
128.17road through the fairgrounds property recently ceded to the city of Proctor by the city of
128.18Duluth. Authorized expenses include securing or paying debt service on bonds or other
128.19obligations issued to finance construction and improvement projects.
128.20    Subd. 4. Collection, administration, and enforcement. The city may enter into
128.21an agreement with the commissioner of revenue to administer, collect, and enforce the
128.22taxes under subdivision 1. If the commissioner agrees to collect the tax, the provisions
128.23of Minnesota Statutes, section 297A.99, related to collection, administration, and
128.24enforcement apply.
128.25EFFECTIVE DATE.This section is effective the day after the governing body of
128.26the city of Proctor and its chief clerical officer comply with Minnesota Statutes, section
128.27645.021, subdivisions 2 and 3.

128.28    Sec. 9. SOLICITOR NEXUS STUDY.
128.29(a) The Department of Revenue shall conduct a study on solicitor nexus, which must
128.30include: a review of similar laws proposed and enacted in other states and if enacted, their
128.31revenue impacts; a discussion of the legal questions raised by state solicitor nexus laws; the
128.32impact of Internet sales in Minnesota; the status and potential impact to states of federal
128.33legislation on the issue; and any other information applicable to solicitor nexus laws.
128.34(b) By January 15, 2013, the commissioner shall submit a report on the study
128.35required under this section to the chairs and ranking minority members of the house of
129.1representatives and senate committees with jurisdiction over taxation, of the findings of
129.2the study and identification of issues for policy makers to consider in whether to adopt a
129.3solicitor nexus provision.
129.4EFFECTIVE DATE.This section is effective the day following final enactment.

129.5    Sec. 10. REPEALER.
129.6Laws 2009, chapter 88, article 4, section 23, as amended by Laws 2010, chapter 389,
129.7article 5, section 4, is repealed.

129.8ARTICLE 10
129.9PROPERTY TAXES

129.10    Section 1. Minnesota Statutes 2010, section 126C.48, subdivision 8, is amended to read:
129.11    Subd. 8. Taconite payment and other reductions. (1) Reductions in levies
129.12pursuant to subdivision 1 must be made prior to the reductions in clause (2).
129.13(2) Notwithstanding any other law to the contrary, districts that have revenue
129.14pursuant to sections 298.018; 298.225; 298.24 to 298.28, except an amount distributed
129.15under sections 298.26; 298.28, subdivision 4, paragraphs (c), clause (ii), and (d); 298.34 to
129.16298.39 ; 298.391 to 298.396; 298.405; 477A.15; and any law imposing a tax upon severed
129.17mineral values must reduce the levies authorized by this chapter and chapters 120B, 122A,
129.18123A, 123B, 124A, 124D, 125A, and 127A by 95 percent of the previous year's revenue
129.19specified under this clause sections 298.018; 298.225; 298.24 to 298.28, except an amount
129.20distributed under sections 298.26; 298.28, subdivision 4, paragraphs (c), clause (ii), and
129.21(d); 298.34 to 298.39; 298.391 to 298.396; 298.405; 477A.15; and any law imposing a
129.22tax upon severed mineral values.
129.23(3) The amount of any voter approved referendum, facilities down payment, and
129.24debt levies shall not be reduced by more than 50 percent under this subdivision. In
129.25administering this paragraph, the commissioner shall first reduce the nonvoter approved
129.26levies of a district; then, if any payments, severed mineral value tax revenue or recognized
129.27revenue under paragraph (2) remains, the commissioner shall reduce any voter approved
129.28referendum levies authorized under section 126C.17; then, if any payments, severed
129.29mineral value tax revenue or recognized revenue under paragraph (2) remains, the
129.30commissioner shall reduce any voter approved facilities down payment levies authorized
129.31under section 123B.63 and then, if any payments, severed mineral value tax revenue or
129.32recognized revenue under paragraph (2) remains, the commissioner shall reduce any
129.33voter approved debt levies.
130.1(4) Before computing the reduction pursuant to this subdivision of the health and
130.2safety levy authorized by sections 123B.57 and 126C.40, subdivision 5, the commissioner
130.3shall ascertain from each affected school district the amount it proposes to levy under
130.4each section or subdivision. The reduction shall be computed on the basis of the amount
130.5so ascertained.
130.6(5) To the extent the levy reduction calculated under paragraph (2) exceeds the
130.7limitation in paragraph (3), an amount equal to the excess must be distributed from the
130.8school district's distribution under sections 298.225, 298.28, and 477A.15 in the following
130.9year to the cities and townships within the school district in the proportion that their
130.10taxable net tax capacity within the school district bears to the taxable net tax capacity of
130.11the school district for property taxes payable in the year prior to distribution. No city or
130.12township shall receive a distribution greater than its levy for taxes payable in the year prior
130.13to distribution. The commissioner of revenue shall certify the distributions of cities and
130.14towns under this paragraph to the county auditor by September 30 of the year preceding
130.15distribution. The county auditor shall reduce the proposed and final levies of cities and
130.16towns receiving distributions by the amount of their distribution. Distributions to the cities
130.17and towns shall be made at the times provided under section 298.27.
130.18EFFECTIVE DATE.This section is effective for levies certified in 2013 and later.

130.19    Sec. 2. Minnesota Statutes 2011 Supplement, section 272.02, subdivision 39, is
130.20amended to read:
130.21    Subd. 39. Economic development; public purpose. The holding of property by a
130.22political subdivision of the state for later resale for economic development purposes shall
130.23be considered a public purpose in accordance with subdivision 8 for a period not to exceed
130.24nine ten years, except that for property located in a city of 5,000 population or under that
130.25is located outside of the metropolitan area as defined in section 473.121, subdivision 2, the
130.26period must not exceed 15 years.
130.27The holding of property by a political subdivision of the state for later resale (1)
130.28which is purchased or held for housing purposes, or (2) which meets the conditions
130.29described in section 469.174, subdivision 10, shall be considered a public purpose in
130.30accordance with subdivision 8.
130.31The governing body of the political subdivision which acquires property which is
130.32subject to this subdivision shall after the purchase of the property certify to the city or
130.33county assessor whether the property is held for economic development purposes or
130.34housing purposes, or whether it meets the conditions of section 469.174, subdivision 10.
130.35If the property is acquired for economic development purposes and buildings or other
131.1improvements are constructed after acquisition of the property, and if more than one-half
131.2of the floor space of the buildings or improvements which is available for lease to or use
131.3by a private individual, corporation, or other entity is leased to or otherwise used by
131.4a private individual, corporation, or other entity the provisions of this subdivision shall
131.5not apply to the property. This subdivision shall not create an exemption from section
131.6272.01, subdivision 2 ; 272.68; 273.19; or 469.040, subdivision 3; or other provision of
131.7law providing for the taxation of or for payments in lieu of taxes for publicly held property
131.8which is leased, loaned, or otherwise made available and used by a private person.
131.9EFFECTIVE DATE.This section is effective for assessment year 2012 and
131.10thereafter and for taxes payable in 2013 and thereafter.

131.11    Sec. 3. Minnesota Statutes 2010, section 273.111, is amended by adding a subdivision
131.12to read:
131.13    Subd. 17. Appeal. If an assessor denies an application for valuation under this
131.14section, the county board of appeal and equalization may hear an applicant's appeal of
131.15the assessor's decision, as provided under section 274.13.
131.16EFFECTIVE DATE.This section is effective for appeals denied after June 30,
131.172011.

131.18    Sec. 4. Minnesota Statutes 2010, section 275.065, subdivision 3, is amended to read:
131.19    Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
131.20and the county treasurer shall deliver after November 10 and on or before November 24
131.21each year, by first class mail to each taxpayer at the address listed on the county's current
131.22year's assessment roll, a notice of proposed property taxes. Upon written request by
131.23the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
131.24instead of on paper or by ordinary mail.
131.25    (b) The commissioner of revenue shall prescribe the form of the notice.
131.26    (c) The notice must inform taxpayers that it contains the amount of property taxes
131.27each taxing authority proposes to collect for taxes payable the following year. In the
131.28case of a town, or in the case of the state general tax, the final tax amount will be its
131.29proposed tax. The notice must clearly state For each city that has a population over 500,
131.30county, school district, regional library authority established under section 134.201, and
131.31metropolitan taxing districts as defined in paragraph (i), the notice must state the time and
131.32place of a meeting for each taxing authority in which the budget and levy will be discussed
131.33and public input allowed, prior to the final budget and levy determination. For each special
132.1taxing district, the notice must: (1) list separately any levy by a special taxing district that
132.2exceeds 25 percent of the total of all special taxing district levies; and (2) provide county
132.3government contact information where additional information may be obtained for each
132.4special taxing district. The taxing authorities must provide the county auditor with the
132.5information to be included in the notice on or before the time it certifies its proposed
132.6levy under subdivision 1. The public must be allowed to speak at that meeting, which
132.7must occur after November 24 and must not be held before 6:00 p.m. It must provide a
132.8telephone number for the taxing authority that taxpayers may call if they have questions
132.9related to the notice and an address where comments will be received by mail, except that
132.10no notice required under this section shall be interpreted as requiring the printing of a
132.11personal telephone number or address as the contact information for a taxing authority. If
132.12a taxing authority does not maintain public offices where telephone calls can be received
132.13by the authority, the authority may inform the county of the lack of a public telephone
132.14number and the county shall not list a telephone number for that taxing authority.
132.15    (d) The notice must state for each parcel:
132.16    (1) the market value of the property as determined under section 273.11, and used
132.17for computing property taxes payable in the following year and for taxes payable in the
132.18current year as each appears in the records of the county assessor on November 1 of the
132.19current year; and, in the case of residential property, whether the property is classified as
132.20homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
132.21which the market values apply and that the values are final values;
132.22    (2) the items listed below, shown separately by county, city or town, and state general
132.23tax, net of the residential and agricultural homestead credit under section 273.1384, voter
132.24approved school levy, other local school levy, a special taxing district levy that exceeds 25
132.25percent of the total of all special taxing districts, and the sum of the all other special taxing
132.26districts, and as a total of all taxing authorities:
132.27    (i) the actual tax for taxes payable in the current year; and
132.28    (ii) the proposed tax amount.
132.29    If the county levy under clause (2) includes an amount for a lake improvement
132.30district as defined under sections 103B.501 to 103B.581, the amount attributable for that
132.31purpose must be separately stated from the remaining county levy amount.
132.32    In the case of a town or the state general tax, the final tax shall also be its proposed
132.33tax unless the town changes its levy at a special town meeting under section 365.52. If a
132.34school district has certified under section 126C.17, subdivision 9, that a referendum will
132.35be held in the school district at the November general election, the county auditor must
132.36note next to the school district's proposed amount that a referendum is pending and that, if
133.1approved by the voters, the tax amount may be higher than shown on the notice. In the
133.2case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
133.3listed separately from the remaining amount of the city's levy. In the case of the city of
133.4St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
133.5remaining amount of the city's levy. In the case of Ramsey County, any amount levied
133.6under section 134.07 may be listed separately from the remaining amount of the county's
133.7levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
133.8under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
133.9proposed tax levy on the tax capacity subject to the areawide tax must each be stated
133.10separately and not included in the sum of the special taxing districts; and
133.11    (3) the increase or decrease between the total taxes payable in the current year and
133.12the total proposed taxes, expressed as a percentage.
133.13    For purposes of this section, the amount of the tax on homesteads qualifying under
133.14the senior citizens' property tax deferral program under chapter 290B is the total amount
133.15of property tax before subtraction of the deferred property tax amount.
133.16    (e) The notice must clearly state that the proposed or final taxes do not include
133.17the following:
133.18    (1) special assessments;
133.19    (2) levies approved by the voters after the date the proposed taxes are certified,
133.20including bond referenda and school district levy referenda;
133.21    (3) a levy limit increase approved by the voters by the first Tuesday after the first
133.22Monday in November of the levy year as provided under section 275.73;
133.23    (4) amounts necessary to pay cleanup or other costs due to a natural disaster
133.24occurring after the date the proposed taxes are certified;
133.25    (5) amounts necessary to pay tort judgments against the taxing authority that become
133.26final after the date the proposed taxes are certified; and
133.27    (6) the contamination tax imposed on properties which received market value
133.28reductions for contamination.
133.29    (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
133.30the county treasurer to deliver the notice as required in this section does not invalidate the
133.31proposed or final tax levy or the taxes payable pursuant to the tax levy.
133.32    (g) If the notice the taxpayer receives under this section lists the property as
133.33nonhomestead, and satisfactory documentation is provided to the county assessor by the
133.34applicable deadline, and the property qualifies for the homestead classification in that
133.35assessment year, the assessor shall reclassify the property to homestead for taxes payable
133.36in the following year.
134.1    (h) In the case of class 4 residential property used as a residence for lease or rental
134.2periods of 30 days or more, the taxpayer must either:
134.3    (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
134.4renter, or lessee; or
134.5    (2) post a copy of the notice in a conspicuous place on the premises of the property.
134.6    The notice must be mailed or posted by the taxpayer by November 27 or within
134.7three days of receipt of the notice, whichever is later. A taxpayer may notify the county
134.8treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
134.9which the notice must be mailed in order to fulfill the requirements of this paragraph.
134.10    (i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
134.11districts" means the following taxing districts in the seven-county metropolitan area that
134.12levy a property tax for any of the specified purposes listed below:
134.13    (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
134.14473.446 , 473.521, 473.547, or 473.834;
134.15    (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
134.16and
134.17    (3) Metropolitan Mosquito Control Commission under section 473.711.
134.18    For purposes of this section, any levies made by the regional rail authorities in the
134.19county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
134.20398A shall be included with the appropriate county's levy.
134.21    (j) The governing body of a county, city, or school district may, with the consent
134.22of the county board, include supplemental information with the statement of proposed
134.23property taxes about the impact of state aid increases or decreases on property tax
134.24increases or decreases and on the level of services provided in the affected jurisdiction.
134.25This supplemental information may include information for the following year, the current
134.26year, and for as many consecutive preceding years as deemed appropriate by the governing
134.27body of the county, city, or school district. It may include only information regarding:
134.28    (1) the impact of inflation as measured by the implicit price deflator for state and
134.29local government purchases;
134.30    (2) population growth and decline;
134.31    (3) state or federal government action; and
134.32    (4) other financial factors that affect the level of property taxation and local services
134.33that the governing body of the county, city, or school district may deem appropriate to
134.34include.
135.1    The information may be presented using tables, written narrative, and graphic
135.2representations and may contain instruction toward further sources of information or
135.3opportunity for comment.
135.4EFFECTIVE DATE.This section is effective for tax statements relating to taxes
135.5payable in 2013 and thereafter.

135.6    Sec. 5. Minnesota Statutes 2011 Supplement, section 276.04, subdivision 2, is
135.7amended to read:
135.8    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the
135.9printing of the tax statements. The commissioner of revenue shall prescribe the form of
135.10the property tax statement and its contents. The tax statement must not state or imply
135.11that property tax credits are paid by the state of Minnesota. The statement must contain
135.12a tabulated statement of the dollar amount due to each taxing authority and the amount
135.13of the state tax from the parcel of real property for which a particular tax statement is
135.14prepared. The dollar amounts attributable to the county, the state tax, the voter approved
135.15school tax, the other local school tax, the township or municipality, and the total of
135.16the metropolitan special taxing districts as defined in section 275.065, subdivision 3,
135.17paragraph (i), must be separately stated. The amounts due all other special taxing districts,
135.18if any, may be aggregated except that (1) any levies made by the regional rail authorities
135.19in the county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under
135.20chapter 398A shall be listed on a separate line directly under the appropriate county's
135.21levy and (2) any levy by a special taxing district that exceeds 25 percent of the total of all
135.22special taxing district levies on a tax statement must be separately stated. If the county
135.23levy under this paragraph includes an amount for a lake improvement district as defined
135.24under sections 103B.501 to 103B.581, the amount attributable for that purpose must be
135.25separately stated from the remaining county levy amount. In the case of Ramsey County,
135.26if the county levy under this paragraph includes an amount for public library service
135.27under section 134.07, the amount attributable for that purpose may be separated from the
135.28remaining county levy amount. The amount of the tax on homesteads qualifying under the
135.29senior citizens' property tax deferral program under chapter 290B is the total amount of
135.30property tax before subtraction of the deferred property tax amount. The amount of the
135.31tax on contamination value imposed under sections 270.91 to 270.98, if any, must also
135.32be separately stated. The dollar amounts, including the dollar amount of any special
135.33assessments, may be rounded to the nearest even whole dollar. For purposes of this section
135.34whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar.
136.1The amount of market value excluded under section 273.11, subdivision 16, if any, must
136.2also be listed on the tax statement.
136.3    (b) The property tax statements for manufactured homes and sectional structures
136.4taxed as personal property shall contain the same information that is required on the
136.5tax statements for real property.
136.6    (c) Real and personal property tax statements must contain the following information
136.7in the order given in this paragraph. The information must contain the current year tax
136.8information in the right column with the corresponding information for the previous year
136.9in a column on the left:
136.10    (1) the property's estimated market value under section 273.11, subdivision 1;
136.11(2) the property's homestead market value exclusion under section 273.13,
136.12subdivision 35;
136.13    (3) the property's taxable market value after reductions under sections 273.11,
136.14subdivisions 1a and 16, and 273.13, subdivision 35;
136.15    (4) the property's gross tax, before credits;
136.16    (5) for homestead agricultural properties, the credit under section 273.1384;
136.17    (6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
136.18273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
136.19credit received under section 273.135 must be separately stated and identified as "taconite
136.20tax relief"; and
136.21    (7) the net tax payable in the manner required in paragraph (a).
136.22    (d) If the county uses envelopes for mailing property tax statements and if the county
136.23agrees, a taxing district may include a notice with the property tax statement notifying
136.24taxpayers when the taxing district will begin its budget deliberations for the current
136.25year, and encouraging taxpayers to attend the hearings. If the county allows notices to
136.26be included in the envelope containing the property tax statement, and if more than
136.27one taxing district relative to a given property decides to include a notice with the tax
136.28statement, the county treasurer or auditor must coordinate the process and may combine
136.29the information on a single announcement.
136.30EFFECTIVE DATE.This section is effective for tax statements relating to taxes
136.31payable in 2013 and thereafter.

136.32    Sec. 6. Minnesota Statutes 2010, section 298.75, is amended by adding a subdivision
136.33to read:
136.34    Subd. 12. Tax may be imposed; Otter Tail County. (a) If Otter Tail County
136.35does not impose a tax under this section and approves imposition of the tax under this
137.1subdivision, the city of Vergas in Otter Tail County may impose the aggregate materials
137.2tax under this section.
137.3(b) For purposes of exercising the powers contained in this section, the "city" is
137.4deemed to be the "county."
137.5(c) All provisions in this section apply to the city of Vergas, except that all proceeds
137.6of the tax must be retained by the city and used for the purposes described in subdivision 7.
137.7(d) If Otter Tail County imposes an aggregate materials tax under this section, the
137.8tax imposed by the city of Vergas under this subdivision is repealed on the effective
137.9date of the Otter Tail County tax.
137.10EFFECTIVE DATE.This section is effective the day after the governing body of
137.11the city of Vergas and its chief clerical officer comply with Minnesota Statutes, section
137.12645.021, subdivisions 2 and 3.

137.13    Sec. 7. Minnesota Statutes 2010, section 477A.017, subdivision 3, is amended to read:
137.14    Subd. 3. Conformity. Other law to the contrary notwithstanding, in order to receive
137.15distributions under sections 477A.011 to 477A.03, counties and cities must conform to
137.16the standards set in subdivision 2 in making all financial reports required to be made to
137.17the state auditor after June 30, 1984 by the deadline set by the state auditor. Counties and
137.18cities that fail to submit the required information to the state auditor within 45 days of
137.19the reporting deadline shall forfeit an amount equal to ten percent of the distributions
137.20under sections 477A.011 to 477A.03. Counties and cities that fail to submit the required
137.21information within 60 days of the reporting deadline shall forfeit an amount equal to 30
137.22percent of the distributions. Counties and cities that fail to submit the required information
137.23within 90 days of the reporting deadline shall forfeit an amount equal to 50 percent of the
137.24distributions.

137.25    Sec. 8. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
137.26article 6, section 9, Laws 2000, chapter 490, article 6, section 15, and Laws 2008, chapter
137.27154, article 2, section 30, is amended to read:
137.28    Sec. 3. TAX; PAYMENT OF EXPENSES.
137.29    (a) The tax levied by the hospital district under Minnesota Statutes, section 447.34,
137.30must not be levied at a rate that exceeds the amount authorized to be levied under that
137.31section. The proceeds of the tax may be used for all purposes of the hospital district,
137.32except as provided in paragraph (b).
138.1    (b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used
138.2solely by the Cook ambulance service and the Orr ambulance service for the purpose of
138.3capital expenditures as it relates to:
138.4(1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance
138.5service and not;
138.6(2) attached and portable equipment for use in and for the ambulances; and
138.7(3) parts and replacement parts for maintenance and repair of the ambulances.
138.8The money may not be used for administrative, operation, or salary expenses.
138.9    (c) The part of the levy referred to in paragraph (b) must be administered by the Cook
138.10Hospital and passed on directly to the Cook area ambulance service board and the city of
138.11Orr to be held in trust until funding for a new ambulance is needed by either the Cook
138.12ambulance service or the Orr ambulance service used for the purposes in paragraph (b).

138.13    Sec. 9. 2011 CITY AID PENALTIES.
138.14(a) Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, any city
138.15that did not meet the requirements for filing calendar year 2010 financial reports with
138.16the state auditor imposed under Minnesota Statutes, section 477A.017, subdivision 2,
138.17shall receive its 2011 aid payment as calculated pursuant to Minnesota Statutes, section
138.18477A.013, subdivision 11, provided that the forms are submitted to the state auditor by
138.19March 31, 2012. The commissioner shall make payment to each qualifying city no later
138.20than June 30, 2012.
138.21(b) Up to $745,048 of the fiscal year 2012 appropriation for local government aid
138.22in Minnesota Statutes, section 477A.013, subdivision 11, is available for the payment
138.23under this section.
138.24EFFECTIVE DATE.This section is effective the day following final enactment.

138.25    Sec. 10. REPEALER.
138.26Minnesota Statutes 2010, section 270C.991, subdivision 5, is repealed.
138.27EFFECTIVE DATE.This section is effective the day following final enactment.
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