1.2 relating to financing of state and local government; making changes to individual
1.3income, corporate franchise, property, sales and use, estate, mineral, liquor,
1.4tobacco, aggregate materials, local, and other taxes and tax-related provisions;
1.5restoring the school district current year aid payment shift percentage to 90;
1.6conforming to federal section 179 expensing allowances; imposing an income
1.7surcharge; allowing an up-front exemption for capital equipment; modifying
1.8the definition of income for the property tax refund; decreasing the threshold
1.9percentage for the homestead credit refund for homeowners and the property
1.10tax refund for renters; increasing the maximum refunds for renters; changing
1.11property tax aids and credits; imposing an insurance surcharge; modifying
1.12pension aids; providing pension funding; changing provisions of the Sustainable
1.13Forest Incentive Act; modifying definitions for property taxes; providing
1.14exemptions; creating joint entertainment facilities coordination; imposing a
1.15sports memorabilia gross receipts tax; changing tax rates on tobacco and liquor;
1.16providing reimbursement for certain property tax abatement; modifying the small
1.17business investment tax credit; expanding the definition of domestic corporation
1.18to include foreign corporations incorporated in or doing business in tax havens;
1.19making changes to additions and subtractions from federal taxable income;
1.20changing rates for individuals, estates, and trusts; providing for charitable
1.21contributions and veterans jobs tax credits; modifying estate tax exclusions for
1.22qualifying small business and farm property; imposing a gift tax; expanding
1.23the sales tax to include suite and box seat rentals; modifying the definition
1.24of sales and purchase; changing the tax rate and modifying provisions for the
1.25rental motor vehicle tax; modifying nexus provisions; providing for multiple
1.26points of use certificates; modifying exemptions; authorizing local sales taxes;
1.27authorizing economic development powers; providing authority, organization,
1.28powers, and duties for development of a Destination Medical Center; authorizing
1.29state infrastructure aid; imposing a tax on extraction and processing of fracturing
1.30sand; providing a taconite production tax grant for water supply improvements;
1.31authorizing taconite production tax bonds for grants to school districts; modifying
1.32and providing provisions for public finance; modifying the definition of market
1.33value for tax, debt, and other purposes; making conforming, policy, and technical
1.34changes to tax provisions; requiring studies and reports; appropriating money;
1.35amending Minnesota Statutes 2012, sections 16A.152, subdivision 2; 16A.46;
1.3638.18; 40A.15, subdivision 2; 69.011, subdivision 1; 69.021, subdivisions 7, 8, by
1.37adding a subdivision; 88.51, subdivision 3; 103B.102, subdivision 3; 103B.245,
1.38subdivision 3; 103B.251, subdivision 8; 103B.335; 103B.3369, subdivision 5;
1.39103B.635, subdivision 2; 103B.691, subdivision 2; 103C.501, subdivision 4;
2.1103D.905, subdivisions 2, 3, 8; 103F.405, subdivision 1; 116J.8737, subdivisions
2.21, 2, 8; 117.025, subdivision 7; 118A.04, subdivision 3; 118A.05, subdivision
2.35; 123A.455, subdivision 1; 123B.75, subdivision 5; 126C.48, subdivision 8;
2.4127A.45, subdivision 2; 127A.48, subdivision 1; 138.053; 144F.01, subdivision
2.54; 162.07, subdivisions 3, 4; 163.04, subdivision 3; 163.051; 163.06, subdivision
2.66; 165.10, subdivision 1; 168.012, subdivision 9, by adding a subdivision;
2.7216C.436, subdivision 7; 237.52, subdivision 3, by adding a subdivision;
2.8270.077; 270.41, subdivision 5; 270B.01, subdivision 8; 270B.12, subdivision
2.94; 270C.34, subdivision 1; 270C.38, subdivision 1; 270C.42, subdivision 2;
2.10270C.56, subdivision 1; 271.06, by adding a subdivision; 272.01, subdivision 2;
2.11272.02, subdivisions 39, 97, by adding subdivisions; 272.03, subdivision 9, by
2.12adding subdivisions; 273.032; 273.11, subdivision 1, by adding a subdivision;
2.13273.114, subdivision 6; 273.124, subdivisions 3a, 13; 273.13, subdivisions
2.1421b, 23, 25; 273.1398, subdivisions 3, 4; 273.19, subdivision 1; 273.372,
2.15subdivision 4; 273.39; 275.011, subdivision 1; 275.077, subdivision 2; 275.71,
2.16subdivision 4; 276.04, subdivision 2; 276A.01, subdivisions 10, 12, 13, 15;
2.17276A.06, subdivision 10; 279.01, subdivision 1, by adding a subdivision; 279.02;
2.18279.06, subdivision 1; 287.05, by adding a subdivision; 287.08; 287.20, by
2.19adding a subdivision; 287.23, subdivision 1; 287.385, subdivision 7; 289A.02,
2.20subdivision 7; 289A.08, subdivisions 1, 3, 7; 289A.10, subdivision 1, by adding
2.21a subdivision; 289A.12, subdivision 14, by adding a subdivision; 289A.18, by
2.22adding a subdivision; 289A.20, subdivisions 3, 4, by adding a subdivision;
2.23289A.26, subdivisions 3, 4, 7, 9; 289A.55, subdivision 9; 289A.60, subdivision
2.244; 290.01, subdivisions 5, 19, as amended, 19a, 19b, 19c, 19d, 31, as amended,
2.25by adding subdivisions; 290.06, subdivisions 2c, 2d, by adding subdivisions;
2.26290.067, subdivisions 1, 2a; 290.0671, subdivision 1; 290.0675, subdivision 1;
2.27290.0677, subdivision 2; 290.068, subdivisions 3, 6a; 290.0681, subdivisions 1,
2.283, 4, 5; 290.091, subdivision 2; 290.0921, subdivision 3; 290.0922, subdivision
2.291; 290.17, subdivision 4; 290.21, subdivision 4; 290.9705, subdivision 1;
2.30290A.03, subdivisions 3, 15, as amended; 290A.04, subdivisions 2, 2a, 4;
2.31290B.04, subdivision 2; 290C.02, subdivision 6; 290C.05; 290C.07; 291.005,
2.32subdivision 1; 291.03, subdivisions 1, 8, 9, 10, 11, by adding a subdivision;
2.33296A.01, subdivision 19, by adding a subdivision; 296A.22, subdivisions 1, 3;
2.34297A.61, subdivisions 3, 4, by adding a subdivision; 297A.64, subdivisions
2.351, 2; 297A.66, by adding a subdivision; 297A.665; 297A.668, by adding
2.36a subdivision; 297A.67, subdivision 7; 297A.68, subdivision 5; 297A.70,
2.37subdivisions 4, 8, by adding subdivisions; 297A.71, by adding subdivisions;
2.38297A.75, subdivisions 1, 2, 3; 297A.815, subdivision 3; 297A.993, subdivisions
2.391, 2; 297B.11; 297E.021, subdivision 2; 297E.14, subdivision 7; 297F.01,
2.40subdivisions 3, 19, 23, by adding a subdivision; 297F.05, subdivisions 1, 3, 4, by
2.41adding a subdivision; 297F.09, subdivision 9; 297F.18, subdivision 7; 297F.24,
2.42subdivision 1; 297F.25, subdivision 1; 297G.03, subdivision 1, by adding a
2.43subdivision; 297G.04; 297G.09, subdivision 8; 297G.17, subdivision 7; 297I.05,
2.44subdivisions 7, 11, 12; 297I.30, subdivisions 1, 2; 297I.80, subdivision 1; 298.01,
2.45subdivisions 3, 3b, 4; 298.018; 298.227, as amended; 298.24, subdivision 1;
2.46298.28, subdivisions 4, 6, 10; 298.75, subdivision 2; 325D.32, subdivision 2;
2.47353G.08, subdivision 2; 365.025, subdivision 4; 366.095, subdivision 1; 366.27;
2.48368.01, subdivision 23; 368.47; 370.01; 373.01, subdivisions 1, 3; 373.40,
2.49subdivisions 1, 2, 4; 375.167, subdivision 1; 375.18, subdivision 3; 375.555;
2.50383B.152; 383B.245; 383B.73, subdivision 1; 383D.41, by adding a subdivision;
2.51383E.20; 383E.23; 385.31; 394.36, subdivision 1; 398A.04, subdivision 8;
2.52401.05, subdivision 3; 403.02, subdivision 21, by adding subdivisions; 403.06,
2.53subdivision 1a; 403.11, subdivision 1, by adding a subdivision; 410.32; 412.221,
2.54subdivision 2; 412.301; 428A.02, subdivision 1; 430.102, subdivision 2; 447.10;
2.55450.19; 450.25; 458A.10; 458A.31, subdivision 1; 465.04; 469.033, subdivision
2.566; 469.034, subdivision 2; 469.053, subdivisions 4, 4a, 6; 469.071, subdivision 5;
2.57469.107, subdivision 1; 469.169, by adding a subdivision; 469.176, subdivisions
2.584c, 4g, 6; 469.177, by adding a subdivision; 469.180, subdivision 2; 469.187;
3.1469.190, subdivision 7, by adding a subdivision; 469.206; 469.319, subdivision
3.24; 469.340, subdivision 4; 471.24; 471.571, subdivisions 1, 2; 471.73; 473.325,
3.3subdivision 2; 473.39, by adding a subdivision; 473.629; 473.661, subdivision 3;
3.4473.667, subdivision 9; 473.671; 473.711, subdivision 2a; 473F.02, subdivisions
3.512, 14, 15, 23; 473F.08, subdivision 10, by adding a subdivision; 474A.04,
3.6subdivision 1a; 474A.062; 474A.091, subdivision 3a; 475.521, subdivisions 1, 2,
3.74; 475.53, subdivisions 1, 3, 4; 475.58, subdivisions 2, 3b; 475.73, subdivision 1;
3.8477A.011, subdivisions 20, 30, 32, 34, 42, by adding subdivisions; 477A.0124,
3.9subdivision 2; 477A.013, subdivisions 8, 9, by adding a subdivision; 477A.03,
3.10subdivisions 2a, 2b, by adding a subdivision; 641.23; 641.24; 645.44, by adding
3.11a subdivision; Laws 1971, chapter 773, section 1, subdivision 2, as amended;
3.12Laws 1988, chapter 645, section 3, as amended; Laws 1993, chapter 375, article
3.139, section 46, subdivisions 2, as amended, 5, as amended; Laws 1998, chapter
3.14389, article 8, section 43, subdivisions 1, 3, as amended, 5, as amended; Laws
3.151999, chapter 243, article 6, section 11; Laws 2002, chapter 377, article 3, section
3.1625, as amended; Laws 2005, First Special Session chapter 3, article 5, section
3.1737, subdivisions 2, 4; Laws 2008, chapter 366, article 5, sections 26; 33; 34, as
3.18amended; article 7, section 19, subdivision 3, as amended; Laws 2010, chapter
3.19216, section 55; Laws 2010, chapter 389, article 1, section 12; article 5, section 6,
3.20subdivisions 4, 6; Laws 2010, First Special Session chapter 1, article 13, section 4,
3.21subdivision 1, as amended; proposing coding for new law in Minnesota Statutes,
3.22chapters 116C; 287; 290; 290A; 292; 295; 297I; 403; 435; 469; proposing coding
3.23for new law as Minnesota Statutes, chapter 297J; repealing Minnesota Statutes
3.242012, sections 16A.725; 256.9658; 272.69; 273.11, subdivisions 1a, 22; 276A.01,
3.25subdivision 11; 289A.60, subdivision 31; 290.01, subdivision 6b; 290.06,
3.26subdivision 22a; 290.0672; 290.0921, subdivision 7; 383A.80, subdivision 4;
3.27383B.80, subdivision 4; 428A.101; 428A.21; 473F.02, subdivision 13; 477A.011,
3.28subdivisions 2a, 19, 21, 29, 31, 32, 33, 36, 39, 40, 41, 42; 477A.013, subdivisions
3.2911, 12; 477A.0133; 477A.0134; Laws 2006, chapter 259, article 11, section 3, as
3.30amended; Laws 2009, chapter 88, article 4, section 23, as amended.
3.31BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:


3.34    Section 1. Minnesota Statutes 2012, section 16A.152, subdivision 2, is amended to read:
3.35    Subd. 2. Additional revenues; priority. (a) If on the basis of a forecast of general
3.36fund revenues and expenditures, the commissioner of management and budget determines
3.37that there will be a positive unrestricted budgetary general fund balance at the close of
3.38the biennium, the commissioner of management and budget must allocate money to the
3.39following accounts and purposes in priority order:
3.40    (1) the cash flow account established in subdivision 1 until that account reaches
3.41$350,000,000;
3.42    (2) the budget reserve account established in subdivision 1a until that account
3.43reaches $653,000,000;
3.44    (3) the amount necessary to increase the aid payment schedule for school district
3.45aids and credits payments in section 127A.45 to not more than 90 percent rounded to the
4.1nearest tenth of a percent without exceeding the amount available and with any remaining
4.2funds deposited in the budget reserve;
4.3    (4) the amount necessary to restore all or a portion of the net aid reductions under
4.4section 127A.441 and to reduce the property tax revenue recognition shift under section
4.5123B.75, subdivision 5 , by the same amount;
4.6(5) to reduce the rate of the surcharge in section 290.06, subdivision 2g, for taxable
4.7years beginning after December 31, 2013, and before January 1, 2015, to not less than
4.8zero with the rate rounded to the nearest tenth of a percent, without exceeding the amount
4.9available, and with any remaining funds deposited in the budget reserve; and
4.10(5) (6) to the state airports fund, the amount necessary to restore the amount
4.11transferred from the state airports fund under Laws 2008, chapter 363, article 11, section
4.123, subdivision 5.
4.13    (b) The amounts necessary to meet the requirements of this section are appropriated
4.14from the general fund within two weeks after the forecast is released or, in the case of
4.15transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations
4.16schedules otherwise established in statute.
4.17    (c) The commissioner of management and budget shall certify the total dollar
4.18amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of
4.19education. The commissioner of education shall increase the aid payment percentage and
4.20reduce the property tax shift percentage by these amounts and apply those reductions to
4.21the current fiscal year and thereafter.
4.22(d) The commissioner of management and budget shall certify the total dollar
4.23amount available under paragraph (a), clause (5), to the commissioner of revenue. The
4.24commissioner of revenue shall determine the percentage reduction in the surcharge rate
4.25for taxable years beginning after December 31, 2013, and before January 1, 2015, and
4.26shall reduce the surcharge rate.

4.27    Sec. 2. Minnesota Statutes 2012, section 123B.75, subdivision 5, is amended to read:
4.28    Subd. 5. Levy recognition. (a) For fiscal years 2009 and 2010, in June of each
4.29year, the school district must recognize as revenue, in the fund for which the levy was
4.30made, the lesser of:
4.31(1) the sum of May, June, and July school district tax settlement revenue received in
4.32that calendar year, plus general education aid according to section 126C.13, subdivision
4.334 , received in July and August of that calendar year; or
4.34(2) the sum of:
5.1(i) 31 percent of the referendum levy certified according to section 126C.17, in
5.2calendar year 2000; and
5.3(ii) the entire amount of the levy certified in the prior calendar year according to
5.4section 124D.86, subdivision 4, for school districts receiving revenue under sections
5.5124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, paragraph (a),
5.6and 3 , paragraphs (b), (c), and (d); 126C.43, subdivision 2; and 126C.48, subdivision 6; plus
5.7(iii) zero percent of the amount of the levy certified in the prior calendar year for the
5.8school district's general and community service funds, plus or minus auditor's adjustments,
5.9not including the levy portions that are assumed by the state, that remains after subtracting
5.10the referendum levy certified according to section 126C.17 and the amount recognized
5.11according to item (ii).
5.12(b) (a) For fiscal year 2011 and later years 2011, 2012, and 2013, in June of each
5.13year, the school district must recognize as revenue, in the fund for which the levy was
5.14made, the lesser of:
5.15(1) the sum of May, June, and July school district tax settlement revenue received in
5.16that calendar year, plus general education aid according to section 126C.13, subdivision
5.174 , received in July and August of that calendar year; or
5.18(2) the sum of:
5.19(i) the greater of 48.6 percent of the referendum levy certified according to section
5.20126C.17 in the prior calendar year, or 31 percent of the referendum levy certified
5.21according to section 126C.17 in calendar year 2000; plus
5.22(ii) the entire amount of the levy certified in the prior calendar year according to
5.23section 124D.4531, 124D.86, subdivision 4, for school districts receiving revenue under
5.24sections 124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2,
5.25paragraph (a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; and 126C.48,
5.26subdivision 6; plus
5.27(iii) 48.6 percent of the amount of the levy certified in the prior calendar year for the
5.28school district's general and community service funds, plus or minus auditor's adjustments,
5.29that remains after subtracting the referendum levy certified according to section 126C.17
5.30and the amount recognized according to item (ii).
5.31(b) For fiscal year 2014 and later years, in June of each year, the school district must
5.32recognize as revenue, in the fund for which the levy was made, the lesser of:
5.33(1) the sum of May, June, and July school district tax settlement revenue received in
5.34that calendar year, plus general education aid according to section 126C.13, subdivision
5.354 , received in July and August of that calendar year; or
5.36(2) the sum of:
6.1(i) 31 percent of the referendum levy certified according to section 126C.17 in
6.2calendar year 2000;
6.3(ii) the entire amount of the levy certified in the prior calendar year according to
6.4section 124D.4531; 124D.86, subdivision 4, for school districts receiving revenue under
6.5sections 124D.86, subdivision 3, clauses (1) to (3); 126C.41, subdivisions 1, 2, paragraph
6.6(a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; and 126C.48, subdivision
6.76; and
6.8(iii) zero percent of the amount of the levy certified in the prior calendar year for the
6.9school district's general and community service funds, plus or minus auditor's adjustments,
6.10that remains after subtracting the referendum levy certified according to section 126C.17
6.11and the amount recognized according to item (ii).
6.12EFFECTIVE DATE.This section is effective July 1, 2013.

6.13    Sec. 3. Minnesota Statutes 2012, section 127A.45, subdivision 2, is amended to read:
6.14    Subd. 2. Definitions. (a) "Other district receipts" means payments by county
6.15treasurers pursuant to section 276.10, apportionments from the school endowment fund
6.16pursuant to section 127A.33, apportionments by the county auditor pursuant to section
6.17127A.34, subdivision 2 , and payments to school districts by the commissioner of revenue
6.18pursuant to chapter 298.
6.19(b) "Cumulative amount guaranteed" means the product of
6.20(1) the cumulative disbursement percentage shown in subdivision 3; times
6.21(2) the sum of
6.22(i) the current year aid payment percentage of the estimated aid and credit
6.23entitlements paid according to subdivision 13; plus
6.24(ii) 100 percent of the entitlements paid according to subdivisions 11 and 12; plus
6.25(iii) the other district receipts.
6.26(c) "Payment date" means the date on which state payments to districts are made
6.27by the electronic funds transfer method. If a payment date falls on a Saturday, a Sunday,
6.28or a weekday which is a legal holiday, the payment shall be made on the immediately
6.29preceding business day. The commissioner may make payments on dates other than
6.30those listed in subdivision 3, but only for portions of payments from any preceding
6.31payment dates which could not be processed by the electronic funds transfer method due
6.32to documented extenuating circumstances.
6.33(d) The current year aid payment percentage equals 73 in fiscal year 2010 and 70 in
6.34fiscal year 2011, and 60 90 in fiscal years 2012 2014 and later.
7.1EFFECTIVE DATE.This section is effective July 1, 2013.

7.2    Sec. 4. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
7.3    Subd. 19a. Additions to federal taxable income. For individuals, estates, and
7.4trusts, there shall be added to federal taxable income:
7.5    (1)(i) interest income on obligations of any state other than Minnesota or a political
7.6or governmental subdivision, municipality, or governmental agency or instrumentality
7.7of any state other than Minnesota exempt from federal income taxes under the Internal
7.8Revenue Code or any other federal statute; and
7.9    (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
7.10Code, except:
7.11(A) the portion of the exempt-interest dividends exempt from state taxation under
7.12the laws of the United States; and
7.13(B) the portion of the exempt-interest dividends derived from interest income
7.14on obligations of the state of Minnesota or its political or governmental subdivisions,
7.15municipalities, governmental agencies or instrumentalities, but only if the portion of the
7.16exempt-interest dividends from such Minnesota sources paid to all shareholders represents
7.1795 percent or more of the exempt-interest dividends, including any dividends exempt
7.18under subitem (A), that are paid by the regulated investment company as defined in section
7.19851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
7.20defined in section 851(g) of the Internal Revenue Code, making the payment; and
7.21    (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
7.22government described in section 7871(c) of the Internal Revenue Code shall be treated as
7.23interest income on obligations of the state in which the tribe is located;
7.24    (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
7.25accrued within the taxable year under this chapter and the amount of taxes based on net
7.26income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state
7.27or to any province or territory of Canada, to the extent allowed as a deduction under
7.28section 63(d) of the Internal Revenue Code, but the addition may not be more than the
7.29amount by which the itemized deductions as allowed under section 63(d) of the Internal
7.30Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of
7.31the Internal Revenue Code, disregarding the amounts allowed under sections 63(c)(1)(C)
7.32and 63(c)(1)(E) of the Internal Revenue Code, minus any addition that would have been
7.33required under clause (21) if the taxpayer had claimed the standard deduction. For the
7.34purpose of this paragraph, the disallowance of itemized deductions under section 68 of
8.1the Internal Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise
8.2taxes are the last itemized deductions disallowed;
8.3    (3) the capital gain amount of a lump-sum distribution to which the special tax under
8.4section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
8.5    (4) the amount of income taxes paid or accrued within the taxable year under this
8.6chapter and taxes based on net income paid to any other state or any province or territory
8.7of Canada, to the extent allowed as a deduction in determining federal adjusted gross
8.8income. For the purpose of this paragraph, income taxes do not include the taxes imposed
8.9by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
8.10    (5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
8.11other than expenses or interest used in computing net interest income for the subtraction
8.12allowed under subdivision 19b, clause (1);
8.13    (6) the amount of a partner's pro rata share of net income which does not flow
8.14through to the partner because the partnership elected to pay the tax on the income under
8.15section 6242(a)(2) of the Internal Revenue Code;
8.16    (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
8.17Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
8.18in the taxable year generates a deduction for depreciation under section 168(k) and the
8.19activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
8.20the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
8.21limited to excess of the depreciation claimed by the activity under section 168(k) over the
8.22amount of the loss from the activity that is not allowed in the taxable year. In succeeding
8.23taxable years when the losses not allowed in the taxable year are allowed, the depreciation
8.24under section 168(k) is allowed;
8.25    (8) for taxable years beginning before January 1, 2013, 80 percent of the amount by
8.26which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
8.27deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
8.28through December 31, 2003;
8.29    (9) to the extent deducted in computing federal taxable income, the amount of the
8.30deduction allowable under section 199 of the Internal Revenue Code;
8.31    (10) for taxable years beginning before January 1, 2013, the exclusion allowed under
8.32section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
8.33(11) the amount of expenses disallowed under section 290.10, subdivision 2;
8.34    (12) for taxable years beginning before January 1, 2010, the amount deducted for
8.35qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
8.36the extent deducted from gross income;
9.1    (13) for taxable years beginning before January 1, 2010, the amount deducted for
9.2certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
9.3of the Internal Revenue Code, to the extent deducted from gross income;
9.4(14) the additional standard deduction for property taxes payable that is allowable
9.5under section 63(c)(1)(C) of the Internal Revenue Code;
9.6(15) the additional standard deduction for qualified motor vehicle sales taxes
9.7allowable under section 63(c)(1)(E) of the Internal Revenue Code;
9.8(16) discharge of indebtedness income resulting from reacquisition of business
9.9indebtedness and deferred under section 108(i) of the Internal Revenue Code;
9.10(17) the amount of unemployment compensation exempt from tax under section
9.1185(c) of the Internal Revenue Code;
9.12(18) changes to federal taxable income attributable to a net operating loss that the
9.13taxpayer elected to carry back for more than two years for federal purposes but for which
9.14the losses can be carried back for only two years under section 290.095, subdivision
9.1511, paragraph (c);
9.16(19) to the extent included in the computation of federal taxable income in taxable
9.17years beginning after December 31, 2010, the amount of disallowed itemized deductions,
9.18but the amount of disallowed itemized deductions plus the addition required under clause
9.19(2) may not be more than the amount by which the itemized deductions as allowed under
9.20section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction
9.21as defined in section 63(c) of the Internal Revenue Code, disregarding the amounts
9.22allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code, and
9.23reduced by any addition that would have been required under clause (21) if the taxpayer
9.24had claimed the standard deduction:
9.25(i) the amount of disallowed itemized deductions is equal to the lesser of:
9.26(A) three percent of the excess of the taxpayer's federal adjusted gross income
9.27over the applicable amount; or
9.28(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
9.29taxpayer under the Internal Revenue Code for the taxable year;
9.30(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
9.31married individual filing a separate return. Each dollar amount shall be increased by
9.32an amount equal to:
9.33(A) such dollar amount, multiplied by
9.34(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
9.35Revenue Code for the calendar year in which the taxable year begins, by substituting
9.36"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
10.1(iii) the term "itemized deductions" does not include:
10.2(A) the deduction for medical expenses under section 213 of the Internal Revenue
10.3Code;
10.4(B) any deduction for investment interest as defined in section 163(d) of the Internal
10.5Revenue Code; and
10.6(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
10.7theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
10.8Code or for losses described in section 165(d) of the Internal Revenue Code;
10.9(20) to the extent included in federal taxable income in taxable years beginning after
10.10December 31, 2010, the amount of disallowed personal exemptions for taxpayers with
10.11federal adjusted gross income over the threshold amount:
10.12(i) the disallowed personal exemption amount is equal to the dollar amount of the
10.13personal exemptions claimed by the taxpayer in the computation of federal taxable income
10.14multiplied by the applicable percentage;
10.15(ii) "applicable percentage" means two percentage points for each $2,500 (or
10.16fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
10.17year exceeds the threshold amount. In the case of a married individual filing a separate
10.18return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
10.19no event shall the applicable percentage exceed 100 percent;
10.20(iii) the term "threshold amount" means:
10.21(A) $150,000 in the case of a joint return or a surviving spouse;
10.22(B) $125,000 in the case of a head of a household;
10.23(C) $100,000 in the case of an individual who is not married and who is not a
10.24surviving spouse or head of a household; and
10.25(D) $75,000 in the case of a married individual filing a separate return; and
10.26(iv) the thresholds shall be increased by an amount equal to:
10.27(A) such dollar amount, multiplied by
10.28(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
10.29Revenue Code for the calendar year in which the taxable year begins, by substituting
10.30"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and
10.31(21) to the extent deducted in the computation of federal taxable income, for taxable
10.32years beginning after December 31, 2010, and before January 1, 2013, the difference
10.33between the standard deduction allowed under section 63(c) of the Internal Revenue Code
10.34and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code
10.35as amended through December 1, 2010.
11.1EFFECTIVE DATE.This section is effective for taxable years beginning after
11.2December 31, 2012.

11.3    Sec. 5. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
11.4    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
11.5there shall be added to federal taxable income:
11.6    (1) the amount of any deduction taken for federal income tax purposes for income,
11.7excise, or franchise taxes based on net income or related minimum taxes, including but not
11.8limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
11.9another state, a political subdivision of another state, the District of Columbia, or any
11.10foreign country or possession of the United States;
11.11    (2) interest not subject to federal tax upon obligations of: the United States, its
11.12possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
11.13state, any of its political or governmental subdivisions, any of its municipalities, or any
11.14of its governmental agencies or instrumentalities; the District of Columbia; or Indian
11.15tribal governments;
11.16    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
11.17Revenue Code;
11.18    (4) the amount of any net operating loss deduction taken for federal income tax
11.19purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
11.20deduction under section 810 of the Internal Revenue Code;
11.21    (5) the amount of any special deductions taken for federal income tax purposes
11.22under sections 241 to 247 and 965 of the Internal Revenue Code;
11.23    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
11.24clause (a), that are not subject to Minnesota income tax;
11.25    (7) the amount of any capital losses deducted for federal income tax purposes under
11.26sections 1211 and 1212 of the Internal Revenue Code;
11.27    (8) the exempt foreign trade income of a foreign sales corporation under sections
11.28921(a) and 291 of the Internal Revenue Code;
11.29    (9) the amount of percentage depletion deducted under sections 611 through 614 and
11.30291 of the Internal Revenue Code;
11.31    (10) for certified pollution control facilities placed in service in a taxable year
11.32beginning before December 31, 1986, and for which amortization deductions were elected
11.33under section 169 of the Internal Revenue Code of 1954, as amended through December
11.3431, 1985, the amount of the amortization deduction allowed in computing federal taxable
11.35income for those facilities;
12.1    (11) the amount of any deemed dividend from a foreign operating corporation
12.2determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
12.3shall be reduced by the amount of the addition to income required by clauses (20), (21),
12.4(22), and (23);
12.5    (12) the amount of a partner's pro rata share of net income which does not flow
12.6through to the partner because the partnership elected to pay the tax on the income under
12.7section 6242(a)(2) of the Internal Revenue Code;
12.8    (13) the amount of net income excluded under section 114 of the Internal Revenue
12.9Code;
12.10    (14) any increase in subpart F income, as defined in section 952(a) of the Internal
12.11Revenue Code, for the taxable year when subpart F income is calculated without regard to
12.12the provisions of Division C, title III, section 303(b) of Public Law 110-343;
12.13    (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
12.14and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
12.15has an activity that in the taxable year generates a deduction for depreciation under
12.16section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
12.17that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
12.18under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
12.19depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
12.20amount of the loss from the activity that is not allowed in the taxable year. In succeeding
12.21taxable years when the losses not allowed in the taxable year are allowed, the depreciation
12.22under section 168(k)(1)(A) and (k)(4)(A) is allowed;
12.23    (16) for taxable years beginning before January 1, 2013, 80 percent of the amount by
12.24which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
12.25deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
12.26through December 31, 2003;
12.27    (17) to the extent deducted in computing federal taxable income, the amount of the
12.28deduction allowable under section 199 of the Internal Revenue Code;
12.29    (18) for taxable years beginning before January 1, 2013, the exclusion allowed under
12.30section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
12.31    (19) the amount of expenses disallowed under section 290.10, subdivision 2;
12.32    (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
12.33accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
12.34of a corporation that is a member of the taxpayer's unitary business group that qualifies
12.35as a foreign operating corporation. For purposes of this clause, intangible expenses and
12.36costs include:
13.1    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
13.2use, maintenance or management, ownership, sale, exchange, or any other disposition of
13.3intangible property;
13.4    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
13.5transactions;
13.6    (iii) royalty, patent, technical, and copyright fees;
13.7    (iv) licensing fees; and
13.8    (v) other similar expenses and costs.
13.9For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
13.10applications, trade names, trademarks, service marks, copyrights, mask works, trade
13.11secrets, and similar types of intangible assets.
13.12This clause does not apply to any item of interest or intangible expenses or costs paid,
13.13accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
13.14to such item of income to the extent that the income to the foreign operating corporation
13.15is income from sources without the United States as defined in subtitle A, chapter 1,
13.16subchapter N, part 1, of the Internal Revenue Code;
13.17    (21) except as already included in the taxpayer's taxable income pursuant to clause
13.18(20), any interest income and income generated from intangible property received or
13.19accrued by a foreign operating corporation that is a member of the taxpayer's unitary
13.20group. For purposes of this clause, income generated from intangible property includes:
13.21    (i) income related to the direct or indirect acquisition, use, maintenance or
13.22management, ownership, sale, exchange, or any other disposition of intangible property;
13.23    (ii) income from factoring transactions or discounting transactions;
13.24    (iii) royalty, patent, technical, and copyright fees;
13.25    (iv) licensing fees; and
13.26    (v) other similar income.
13.27For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
13.28applications, trade names, trademarks, service marks, copyrights, mask works, trade
13.29secrets, and similar types of intangible assets.
13.30This clause does not apply to any item of interest or intangible income received or accrued
13.31by a foreign operating corporation with respect to such item of income to the extent that
13.32the income is income from sources without the United States as defined in subtitle A,
13.33chapter 1, subchapter N, part 1, of the Internal Revenue Code;
13.34    (22) the dividends attributable to the income of a foreign operating corporation that
13.35is a member of the taxpayer's unitary group in an amount that is equal to the dividends
14.1paid deduction of a real estate investment trust under section 561(a) of the Internal
14.2Revenue Code for amounts paid or accrued by the real estate investment trust to the
14.3foreign operating corporation;
14.4    (23) the income of a foreign operating corporation that is a member of the taxpayer's
14.5unitary group in an amount that is equal to gains derived from the sale of real or personal
14.6property located in the United States;
14.7    (24) for taxable years beginning before January 1, 2010, the additional amount
14.8allowed as a deduction for donation of computer technology and equipment under section
14.9170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
14.10(25) discharge of indebtedness income resulting from reacquisition of business
14.11indebtedness and deferred under section 108(i) of the Internal Revenue Code.
14.12EFFECTIVE DATE.This section is effective for taxable years beginning after
14.13December 31, 2012.

14.14    Sec. 6. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
14.15to read:
14.16    Subd. 2g. Income surcharge. (a) In addition to the tax computed under subdivision
14.172c and section 290.091, for taxable years beginning after December 31, 2012, and
14.18before January 1, 2015, there is a surcharge imposed on individuals, estates, and trusts.
14.19The surcharge equals four percent of taxable net income over a threshold. For married
14.20individuals filing separately, estates, and trusts, the threshold is $250,000. For all other
14.21filers, the threshold is $500,000.
14.22(b) For a nonresident or part-year resident, the surcharge must be allocated based on
14.23the percentage calculated under section 290.06, subdivision 2c, paragraph (e).
14.24EFFECTIVE DATE.This section is effective for taxable years beginning after
14.25December 31, 2012.

14.26    Sec. 7. Minnesota Statutes 2012, section 297A.68, subdivision 5, is amended to read:
14.27    Subd. 5. Capital equipment. (a) Capital equipment is exempt. The tax must be
14.28imposed and collected as if the rate under section 297A.62, subdivision 1, applied, and
14.29then refunded in the manner provided in section 297A.75.
14.30"Capital equipment" means machinery and equipment purchased or leased, and used
14.31in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining,
14.32or refining tangible personal property to be sold ultimately at retail if the machinery and
14.33equipment are essential to the integrated production process of manufacturing, fabricating,
15.1mining, or refining. Capital equipment also includes machinery and equipment
15.2used primarily to electronically transmit results retrieved by a customer of an online
15.3computerized data retrieval system.
15.4(b) Capital equipment includes, but is not limited to:
15.5(1) machinery and equipment used to operate, control, or regulate the production
15.6equipment;
15.7(2) machinery and equipment used for research and development, design, quality
15.8control, and testing activities;
15.9(3) environmental control devices that are used to maintain conditions such as
15.10temperature, humidity, light, or air pressure when those conditions are essential to and are
15.11part of the production process;
15.12(4) materials and supplies used to construct and install machinery or equipment;
15.13(5) repair and replacement parts, including accessories, whether purchased as spare
15.14parts, repair parts, or as upgrades or modifications to machinery or equipment;
15.15(6) materials used for foundations that support machinery or equipment;
15.16(7) materials used to construct and install special purpose buildings used in the
15.17production process;
15.18(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed
15.19as part of the delivery process regardless if mounted on a chassis, repair parts for
15.20ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
15.21(9) machinery or equipment used for research, development, design, or production
15.22of computer software.
15.23(c) Capital equipment does not include the following:
15.24(1) motor vehicles taxed under chapter 297B;
15.25(2) machinery or equipment used to receive or store raw materials;
15.26(3) building materials, except for materials included in paragraph (b), clauses (6)
15.27and (7);
15.28(4) machinery or equipment used for nonproduction purposes, including, but not
15.29limited to, the following: plant security, fire prevention, first aid, and hospital stations;
15.30support operations or administration; pollution control; and plant cleaning, disposal of
15.31scrap and waste, plant communications, space heating, cooling, lighting, or safety;
15.32(5) farm machinery and aquaculture production equipment as defined by section
15.33297A.61 , subdivisions 12 and 13;
15.34(6) machinery or equipment purchased and installed by a contractor as part of an
15.35improvement to real property;
16.1(7) machinery and equipment used by restaurants in the furnishing, preparing, or
16.2serving of prepared foods as defined in section 297A.61, subdivision 31;
16.3(8) machinery and equipment used to furnish the services listed in section 297A.61,
16.4subdivision 3 , paragraph (g), clause (6), items (i) to (vi) and (viii);
16.5(9) machinery or equipment used in the transportation, transmission, or distribution
16.6of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines,
16.7tanks, mains, or other means of transporting those products. This clause does not apply to
16.8machinery or equipment used to blend petroleum or biodiesel fuel as defined in section
16.9239.77 ; or
16.10(10) any other item that is not essential to the integrated process of manufacturing,
16.11fabricating, mining, or refining.
16.12(d) For purposes of this subdivision:
16.13(1) "Equipment" means independent devices or tools separate from machinery but
16.14essential to an integrated production process, including computers and computer software,
16.15used in operating, controlling, or regulating machinery and equipment; and any subunit or
16.16assembly comprising a component of any machinery or accessory or attachment parts of
16.17machinery, such as tools, dies, jigs, patterns, and molds.
16.18(2) "Fabricating" means to make, build, create, produce, or assemble components or
16.19property to work in a new or different manner.
16.20(3) "Integrated production process" means a process or series of operations through
16.21which tangible personal property is manufactured, fabricated, mined, or refined. For
16.22purposes of this clause, (i) manufacturing begins with the removal of raw materials
16.23from inventory and ends when the last process prior to loading for shipment has been
16.24completed; (ii) fabricating begins with the removal from storage or inventory of the
16.25property to be assembled, processed, altered, or modified and ends with the creation
16.26or production of the new or changed product; (iii) mining begins with the removal of
16.27overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and
16.28ends when the last process before stockpiling is completed; and (iv) refining begins with
16.29the removal from inventory or storage of a natural resource and ends with the conversion
16.30of the item to its completed form.
16.31(4) "Machinery" means mechanical, electronic, or electrical devices, including
16.32computers and computer software, that are purchased or constructed to be used for the
16.33activities set forth in paragraph (a), beginning with the removal of raw materials from
16.34inventory through completion of the product, including packaging of the product.
17.1(5) "Machinery and equipment used for pollution control" means machinery and
17.2equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity
17.3described in paragraph (a).
17.4(6) "Manufacturing" means an operation or series of operations where raw materials
17.5are changed in form, composition, or condition by machinery and equipment and which
17.6results in the production of a new article of tangible personal property. For purposes of
17.7this subdivision, "manufacturing" includes the generation of electricity or steam to be
17.8sold at retail.
17.9(7) "Mining" means the extraction of minerals, ores, stone, or peat.
17.10(8) "Online data retrieval system" means a system whose cumulation of information
17.11is equally available and accessible to all its customers.
17.12(9) "Primarily" means machinery and equipment used 50 percent or more of the time
17.13in an activity described in paragraph (a).
17.14(10) "Refining" means the process of converting a natural resource to an intermediate
17.15or finished product, including the treatment of water to be sold at retail.
17.16(11) This subdivision does not apply to telecommunications equipment as
17.17provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit
17.18for telecommunications services.
17.19EFFECTIVE DATE.This section is effective for sales and purchases made after
17.20June 30, 2013.

17.21    Sec. 8. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
17.22    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
17.23following exempt items must be imposed and collected as if the sale were taxable and the
17.24rate under section 297A.62, subdivision 1, applied. The exempt items include:
17.25    (1) capital equipment exempt under section 297A.68, subdivision 5;
17.26    (2) (1) building materials for an agricultural processing facility exempt under section
17.27297A.71, subdivision 13 ;
17.28    (3) (2) building materials for mineral production facilities exempt under section
17.29297A.71, subdivision 14 ;
17.30    (4) (3) building materials for correctional facilities under section 297A.71,
17.31subdivision 3 ;
17.32    (5) (4) building materials used in a residence for disabled veterans exempt under
17.33section 297A.71, subdivision 11;
17.34    (6) (5) elevators and building materials exempt under section 297A.71, subdivision
17.3512 ;
18.1    (7) (6) building materials for the Long Lake Conservation Center exempt under
18.2section 297A.71, subdivision 17;
18.3    (8) (7) materials and supplies for qualified low-income housing under section
18.4297A.71, subdivision 23 ;
18.5    (9) (8) materials, supplies, and equipment for municipal electric utility facilities
18.6under section 297A.71, subdivision 35;
18.7    (10) (9) equipment and materials used for the generation, transmission, and
18.8distribution of electrical energy and an aerial camera package exempt under section
18.9297A.68 , subdivision 37;
18.10    (11) (10) commuter rail vehicle and repair parts under section 297A.70, subdivision
18.113, paragraph (a), clause (10);
18.12    (12) (11) materials, supplies, and equipment for construction or improvement of
18.13projects and facilities under section 297A.71, subdivision 40;
18.14(13) (12) materials, supplies, and equipment for construction or improvement of a
18.15meat processing facility exempt under section 297A.71, subdivision 41;
18.16(14) (13) materials, supplies, and equipment for construction, improvement, or
18.17expansion of an aerospace defense manufacturing facility exempt under section 297A.71,
18.18subdivision 42;
18.19(15) (14) enterprise information technology equipment and computer software for
18.20use in a qualified data center exempt under section 297A.68, subdivision 42; and
18.21(16) (15) materials, supplies, and equipment for qualifying capital projects under
18.22section 297A.71, subdivision 44.
18.23EFFECTIVE DATE.This section is effective for sales and purchases made after
18.24June 30, 2013.

18.25    Sec. 9. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
18.26    Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
18.27commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
18.28must be paid to the applicant. Only the following persons may apply for the refund:
18.29    (1) for subdivision 1, clauses (1) to (3) and (2), the applicant must be the purchaser;
18.30    (2) for subdivision 1, clauses (4) (3) and (7) (6), the applicant must be the
18.31governmental subdivision;
18.32    (3) for subdivision 1, clause (5) (4), the applicant must be the recipient of the
18.33benefits provided in United States Code, title 38, chapter 21;
18.34    (4) for subdivision 1, clause (6) (5), the applicant must be the owner of the
18.35homestead property;
19.1    (5) for subdivision 1, clause (8) (7), the owner of the qualified low-income housing
19.2project;
19.3    (6) for subdivision 1, clause (9) (8), the applicant must be a municipal electric utility
19.4or a joint venture of municipal electric utilities;
19.5    (7) for subdivision 1, clauses (10) (9), (12), (13), and (14), and (15), the owner
19.6of the qualifying business; and
19.7    (8) for subdivision 1, clauses (10), (11), (12), and (16) (15), the applicant must be
19.8the governmental entity that owns or contracts for the project or facility.
19.9EFFECTIVE DATE.This section is effective for sales and purchases made after
19.10June 30, 2013.

19.11    Sec. 10. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
19.12    Subd. 3. Application. (a) The application must include sufficient information
19.13to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
19.14subcontractor, or builder, under subdivision 1, clause (3), (4), (5), (6), (7), (8), (9), (10),
19.15(11), (12), (13), (14), or (15), or (16), the contractor, subcontractor, or builder must
19.16furnish to the refund applicant a statement including the cost of the exempt items and the
19.17taxes paid on the items unless otherwise specifically provided by this subdivision. The
19.18provisions of sections 289A.40 and 289A.50 apply to refunds under this section.
19.19    (b) An applicant may not file more than two applications per calendar year for
19.20refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
19.21    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
19.22exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
19.23of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
19.24subdivision 40, must not be filed until after June 30, 2009.
19.25EFFECTIVE DATE.This section is effective for sales and purchases made after
19.26June 30, 2013.

19.27    Sec. 11. ESTIMATED TAXES; EXCEPTIONS.
19.28No addition to tax, penalties, or interest may be made under Minnesota Statutes,
19.29section 289A.25, for any period before July 1, 2013, with respect to an underpayment
19.30of estimated tax, to the extent that the underpayment was created or increased by the
19.31surcharge imposed under this article.
19.32EFFECTIVE DATE.This section is effective for taxable years beginning after
19.33December 31, 2012.

20.1    Sec. 12. APPROPRIATIONS.
20.2(a) The amount necessary to increase the aid payment percentage in section 3 to 90
20.3percent, estimated to be $262,600,000, is appropriated in fiscal year 2014 from the general
20.4fund to the commissioner of education.
20.5(b) The amount necessary to reduce the percentage of levy recognized in the prior
20.6calendar year in section 2 from 48.6 percent to zero percent, estimated to be $569,900,000,
20.7is appropriated in fiscal year 2014 from the general fund to the commissioner of education.
20.8(c) The amount paid in additional state general education aids and other school aids
20.9as a result of reducing the percentage of levy recognized in the prior calendar year in
20.10Minnesota Statutes, section 123B.75, subdivision 5, from 48.6 percent to zero percent,
20.11estimated to be $21,700,000, is appropriated in fiscal year 2015 from the general fund to
20.12the commissioner of education.
20.13EFFECTIVE DATE.This section is effective the day following final enactment.


20.16    Section 1. Minnesota Statutes 2012, section 290A.03, subdivision 3, is amended to read:
20.17    Subd. 3. Income. (1) "Income" means the sum of the following:
20.18    (a) federal adjusted gross income as defined in the Internal Revenue Code; and
20.19    (b) the sum of the following amounts to the extent not included in clause (a):
20.20    (i) all nontaxable income;
20.21    (ii) the amount of a passive activity loss that is not disallowed as a result of section
20.22469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
20.23loss carryover allowed under section 469(b) of the Internal Revenue Code;
20.24    (iii) an amount equal to the total of any discharge of qualified farm indebtedness
20.25of a solvent individual excluded from gross income under section 108(g) of the Internal
20.26Revenue Code;
20.27    (iv) cash public assistance and relief;
20.28    (v) any pension or annuity (including railroad retirement benefits, all payments
20.29received under the federal Social Security Act, Supplemental Security Income, and
20.30veterans benefits), which was not exclusively funded by the claimant or spouse, or which
20.31was funded exclusively by the claimant or spouse and which funding payments were
20.32excluded from federal adjusted gross income in the years when the payments were made;
20.33    (vi) interest received from the federal or a state government or any instrumentality
20.34or political subdivision thereof;
21.1    (vii) workers' compensation;
21.2    (viii) nontaxable strike benefits;
21.3    (ix) the gross amounts of payments received in the nature of disability income or
21.4sick pay as a result of accident, sickness, or other disability, whether funded through
21.5insurance or otherwise;
21.6    (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
21.71986, as amended through December 31, 1995;
21.8    (xi) contributions made by the claimant to an individual retirement account,
21.9including a qualified voluntary employee contribution; simplified employee pension plan;
21.10self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
21.11of the Internal Revenue Code; or deferred compensation plan under section 457 of the
21.12Internal Revenue Code, to the extent the sum of amounts exceeds the retirement base
21.13amount for the claimant and spouse;
21.14    (xii) to the extent not included in federal adjusted gross income, distributions received
21.15by the claimant or spouse from a traditional or Roth style retirement account or plan;
21.16    (xiii) nontaxable scholarship or fellowship grants;
21.17    (xiii) (xiv) the amount of deduction allowed under section 199 of the Internal
21.18Revenue Code;
21.19    (xiv) (xv) the amount of deduction allowed under section 220 or 223 of the Internal
21.20Revenue Code;
21.21    (xv) (xvi) the amount of deducted for tuition expenses required to be added to
21.22income under section 290.01, subdivision 19a, clause (12); under section 222 of the
21.23Internal Revenue Code; and
21.24    (xvi) (xvii) the amount deducted for certain expenses of elementary and secondary
21.25school teachers under section 62(a)(2)(D) of the Internal Revenue Code; and.
21.26    (xvii) unemployment compensation.
21.27    In the case of an individual who files an income tax return on a fiscal year basis, the
21.28term "federal adjusted gross income" shall mean federal adjusted gross income reflected
21.29in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
21.30reduced by the amount of a net operating loss carryback or carryforward or a capital loss
21.31carryback or carryforward allowed for the year.
21.32    (2) "Income" does not include:
21.33    (a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
21.34    (b) amounts of any pension or annuity which was exclusively funded by the claimant
21.35or spouse and which funding payments were not excluded from federal adjusted gross
21.36income in the years when the payments were made;
22.1    (c) to the extent included in federal adjusted gross income, amounts contributed by
22.2the claimant or spouse to a traditional or Roth style retirement account or plan, but not
22.3to exceed the retirement base amount reduced by the amount of contributions excluded
22.4from federal adjusted gross income, but not less than zero;
22.5    (d) surplus food or other relief in kind supplied by a governmental agency;
22.6    (d) (e) relief granted under this chapter;
22.7    (e) (f) child support payments received under a temporary or final decree of
22.8dissolution or legal separation; or
22.9    (f) (g) restitution payments received by eligible individuals and excludable interest
22.10as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
22.112001, Public Law 107-16.
22.12    (3) The sum of the following amounts may be subtracted from income:
22.13    (a) for the claimant's first dependent, the exemption amount multiplied by 1.4;
22.14    (b) for the claimant's second dependent, the exemption amount multiplied by 1.3;
22.15    (c) for the claimant's third dependent, the exemption amount multiplied by 1.2;
22.16    (d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
22.17    (e) for the claimant's fifth dependent, the exemption amount; and
22.18    (f) if the claimant or claimant's spouse was disabled or attained the age of 65
22.19on or before December 31 of the year for which the taxes were levied or rent paid, the
22.20exemption amount.
22.21    For purposes of this subdivision, the "exemption amount" means the exemption
22.22amount under section 151(d) of the Internal Revenue Code for the taxable year for which
22.23the income is reported; and "retirement base amount" means the deductible amount for
22.24the taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal
22.25Revenue Code, adjusted for inflation as provided in section 219(b)(5)(D) of the Internal
22.26Revenue Code, without regard to whether the claimant or spouse claimed a deduction.
22.27EFFECTIVE DATE.This section is effective beginning with refunds based on
22.28property taxes payable in 2014 and rent paid in 2013.

22.29    Sec. 2. Minnesota Statutes 2012, section 290A.04, subdivision 2, is amended to read:
22.30    Subd. 2. Homeowners; homestead credit refund. A claimant whose property
22.31taxes payable are in excess of the percentage of the household income stated below shall
22.32pay an amount equal to the percent of income shown for the appropriate household
22.33income level along with the percent to be paid by the claimant of the remaining amount
22.34of property taxes payable. The state refund equals the amount of property taxes payable
22.35that remain, up to the state refund amount shown below.

23.1 23.2 23.3	Household Income	Percent of Income	Percent Paid by Claimant	Maximum State Refund
23.4	$0 to 1,549	1.0 percent	15 percent	$	2,460
23.5	1,550 to 3,089	1.1 percent	15 percent	$	2,460
23.6	3,090 to 4,669	1.2 percent	15 percent	$	2,460
23.7	4,670 to 6,229	1.3 percent	20 percent	$	2,460
23.8	6,230 to 7,769	1.4 percent	20 percent	$	2,460
23.9	7,770 to 10,879	1.5 percent	20 percent	$	2,460
23.10	10,880 to 12,429	1.6 percent	20 percent	$	2,460
23.11	12,430 to 13,989	1.7 percent	20 percent	$	2,460
23.12	13,990 to 15,539	1.8 percent	20 percent	$	2,460
23.13	15,540 to 17,079	1.9 percent	25 percent	$	2,460
23.14	17,080 to 18,659	2.0 percent	25 percent	$	2,460
23.15	18,660 to 21,759	2.1 percent	25 percent	$	2,460
23.16	21,760 to 23,309	2.2 percent	30 percent	$	2,460
23.17	23,310 to 24,859	2.3 percent	30 percent	$	2,460
23.18	24,860 to 26,419	2.4 percent	30 percent	$	2,460
23.19	26,420 to 32,629	2.5 percent	35 percent	$	2,460
23.20	32,630 to 37,279	2.6 percent	35 percent	$	2,460
23.21	37,280 to 46,609	2.7 percent	35 percent	$	2,000
23.22	46,610 to 54,369	2.8 percent	35 percent	$	2,000
23.23	54,370 to 62,139	2.8 percent	40 percent	$	1,750
23.24	62,140 to 69,909	3.0 percent	40 percent	$	1,440
23.25	69,910 to 77,679	3.0 percent	40 percent	$	1,290
23.26	77,680 to 85,449	3.0 percent	40 percent	$	1,130
23.27	85,450 to 90,119	3.5 percent	45 percent	$	960
23.28	90,120 to 93,239	3.5 percent	45 percent	$	790
23.29	93,240 to 97,009	3.5 percent	50 percent	$	650
23.30	97,010 to 100,779	3.5 percent	50 percent	$	480

23.31 23.32 23.33	Household Income	Percent of Income	Percent Paid by Claimant	Maximum State Refund
23.34	$0 to 1,619	1.0 percent	15 percent	$	2,580
23.35	1,620 to 3,229	1.1 percent	15 percent	$	2,580
23.36	3,230 to 4,889	1.2 percent	15 percent	$	2,580
23.37	4,890 to 6,519	1.3 percent	20 percent	$	2,580
23.38	6,520 to 8,129	1.4 percent	20 percent	$	2,580
23.39	8,130 to 11,389	1.5 percent	20 percent	$	2,580
23.40	11,390 to 13,009	1.6 percent	20 percent	$	2,580
23.41	13,010 to 14,649	1.7 percent	20 percent	$	2,580
23.42	14,650 to 16,269	1.8 percent	20 percent	$	2,580
23.43	16,270 to 17,879	1.9 percent	25 percent	$	2,580
23.44	17,880 to 22,779	2.0 percent	25 percent	$	2,580
24.1	22,780 to 24,399	2.0 percent	30 percent	$	2,580
24.2	24,400 to 27,659	2.0 percent	30 percent	$	2,580
24.3	27,660 to 39,029	2.0 percent	35 percent	$	2,580
24.4	39,030 to 56,919	2.0 percent	35 percent	$	2,090
24.5	56,920 to 65,049	2.0 percent	40 percent	$	1,830
24.6	65,050 to 73,189	2.1 percent	40 percent	$	1,510
24.7	73,190 to 81,319	2.2 percent	40 percent	$	1,350
24.8	81,320 to 89,449	2.3 percent	40 percent	$	1,180
24.9	89,450 to 94,339	2.4 percent	45 percent	$	1,000
24.10	94,340 to 97,609	2.5 percent	45 percent	$	830
24.11	97,610 to 101,559	2.5 percent	50 percent	$	680
24.12	101,560 to 105,499	2.5 percent	50 percent	$	500

24.13    The payment made to a claimant shall be the amount of the state refund calculated
24.14under this subdivision. No payment is allowed if the claimant's household income is
24.15$100,780 $105,500 or more.
24.16EFFECTIVE DATE.This section is effective for refund claims based on taxes
24.17payable in 2014 and thereafter.

24.18    Sec. 3. Minnesota Statutes 2012, section 290A.04, subdivision 2a, is amended to read:
24.19    Subd. 2a. Renters. A claimant whose rent constituting property taxes exceeds the
24.20percentage of the household income stated below must pay an amount equal to the percent
24.21of income shown for the appropriate household income level along with the percent to
24.22be paid by the claimant of the remaining amount of rent constituting property taxes. The
24.23state refund equals the amount of rent constituting property taxes that remain, up to the
24.24maximum state refund amount shown below.

24.25 24.26 24.27	Household Income	Percent of Income	Percent Paid by Claimant	Maximum State Refund
24.28	$0 to 3,589	1.0 percent	5 percent	$	1,190
24.29	3,590 to 4,779	1.0 percent	10 percent	$	1,190
24.30	4,780 to 5,969	1.1 percent	10 percent	$	1,190
24.31	5,970 to 8,369	1.2 percent	10 percent	$	1,190
24.32	8,370 to 10,759	1.3 percent	15 percent	$	1,190
24.33	10,760 to 11,949	1.4 percent	15 percent	$	1,190
24.34	11,950 to 13,139	1.4 percent	20 percent	$	1,190
24.35	13,140 to 15,539	1.5 percent	20 percent	$	1,190
24.36	15,540 to 16,729	1.6 percent	20 percent	$	1,190
24.37	16,730 to 17,919	1.7 percent	25 percent	$	1,190
24.38	17,920 to 20,319	1.8 percent	25 percent	$	1,190
25.1	20,320 to 21,509	1.9 percent	30 percent	$	1,190
25.2	21,510 to 22,699	2.0 percent	30 percent	$	1,190
25.3	22,700 to 23,899	2.2 percent	30 percent	$	1,190
25.4	23,900 to 25,089	2.4 percent	30 percent	$	1,190
25.5	25,090 to 26,289	2.6 percent	35 percent	$	1,190
25.6	26,290 to 27,489	2.7 percent	35 percent	$	1,190
25.7	27,490 to 28,679	2.8 percent	35 percent	$	1,190
25.8	28,680 to 29,869	2.9 percent	40 percent	$	1,190
25.9	29,870 to 31,079	3.0 percent	40 percent	$	1,190
25.10	31,080 to 32,269	3.1 percent	40 percent	$	1,190
25.11	32,270 to 33,459	3.2 percent	40 percent	$	1,190
25.12	33,460 to 34,649	3.3 percent	45 percent	$	1,080
25.13	34,650 to 35,849	3.4 percent	45 percent	$	960
25.14	35,850 to 37,049	3.5 percent	45 percent	$	830
25.15	37,050 to 38,239	3.5 percent	50 percent	$	720
25.16	38,240 to 39,439	3.5 percent	50 percent	$	600
25.17	38,440 to 40,629	3.5 percent	50 percent	$	360
25.18	40,630 to 41,819	3.5 percent	50 percent	$	120

25.19	$0 to 4,909	1.0 percent	5 percent	$	2,000
25.20	4,910 to 6,529	1.0 percent	10 percent	$	2,000
25.21	6,530 to 8,159	1.1 percent	10 percent	$	1,950
25.22	8,160 to 11,439	1.2 percent	10 percent	$	1,900
25.23	11,440 to 14,709	1.3 percent	15 percent	$	1,850
25.24	14,710 to 16,339	1.4 percent	15 percent	$	1,800
25.25	16,340 to 17,959	1.4 percent	20 percent	$	1,750
25.26	17,960 to 21,239	1.5 percent	20 percent	$	1,700
25.27	21,240 to 22,869	1.6 percent	20 percent	$	1,650
25.28	22,870 to 24,499	1.7 percent	25 percent	$	1,650
25.29	24,500 to 27,779	1.8 percent	25 percent	$	1,650
25.30	27,780 to 29,399	1.9 percent	30 percent	$	1,650
25.31	29,400 to 34,299	2.0 percent	30 percent	$	1,650
25.32	34,300 to 39,199	2.0 percent	35 percent	$	1,650
25.33	39,200 to 45,739	2.0 percent	40 percent	$	1,650
25.34	45,740 to 47,369	2.0 percent	45 percent	$	1,500
25.35	47,370 to 49,009	2.0 percent	45 percent	$	1,350
25.36	49,010 to 50,649	2.0 percent	45 percent	$	1,150
25.37	50,650 to 52,269	2.0 percent	50 percent	$	1,000
25.38	52,270 to 53,909	2.0 percent	50 percent	$	900
25.39	53,910 to 55,539	2.0 percent	50 percent	$	500
25.40	55,540 to 57,169	2.0 percent	50 percent	$	200

26.1    The payment made to a claimant is the amount of the state refund calculated under
26.2this subdivision. No payment is allowed if the claimant's household income is $41,820
26.3 $57,170 or more.
26.4EFFECTIVE DATE.This section is effective for claims based on rent paid in
26.52013 and following years.

26.6    Sec. 4. Minnesota Statutes 2012, section 290A.04, subdivision 4, is amended to read:
26.7    Subd. 4. Inflation adjustment. (a) Beginning for property tax refunds payable in
26.8calendar year 2002, the commissioner shall annually adjust the dollar amounts of the
26.9income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation.
26.10The commissioner shall make the inflation adjustments in accordance with section 1(f) of
26.11the Internal Revenue Code, except that for purposes of this subdivision the percentage
26.12increase shall be determined as provided in this subdivision.
26.13    (b) In adjusting the dollar amounts of the income thresholds and the maximum
26.14refunds under subdivision 2 for inflation, the percentage increase shall be determined
26.15from the year ending on June 30, 2011 2013, to the year ending on June 30 of the year
26.16preceding that in which the refund is payable.
26.17    (c) In adjusting the dollar amounts of the income thresholds and the maximum
26.18refunds under subdivision 2a for inflation, the percentage increase shall be determined
26.19from the year ending on June 30, 2000 2013, to the year ending on June 30 of the year
26.20preceding that in which the refund is payable.
26.21    (d) The commissioner shall use the appropriate percentage increase to annually
26.22adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for
26.23inflation without regard to whether or not the income tax brackets are adjusted for inflation
26.24in that year. The commissioner shall round the thresholds and the maximum amounts,
26.25as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall
26.26round it up to the next $10 amount.
26.27    (e) The commissioner shall annually announce the adjusted refund schedule at the
26.28same time provided under section 290.06. The determination of the commissioner under
26.29this subdivision is not a rule under the Administrative Procedure Act.
26.30EFFECTIVE DATE.This section is effective for refund claims based on taxes
26.31payable in 2014 and rent paid in 2013 and following years.

26.32    Sec. 5. [290A.28] NOTIFICATION OF POTENTIAL ELIGIBILITY.
27.1    Subdivision 1. Notification of eligibility. (a) By August 1, 2014, the commissioner
27.2shall notify, in writing or electronically, individual homeowners whom the commissioner
27.3determines likely will be eligible for a homestead credit refund under this chapter for
27.4that property taxes payable year. In determining whether to notify a homeowner, the
27.5commissioner shall consider the property tax information available to the commissioner
27.6under paragraph (b) and the most recent income information available to the commissioner
27.7from filing under this chapter for the prior year or under chapter 290 for the current or
27.8prior year. The notification must include information on how to file for the homestead
27.9credit refund and the range of potential homestead credit refunds that the homeowner
27.10could qualify to receive. The notification requirement under this section does not apply
27.11to a homeowner who has already filed for the homestead credit refund for the current
27.12or prior year.
27.13    (b) By May 15, 2014, each county auditor shall transmit to the commissioner
27.14of revenue the following information for each property classified as a residential or
27.15agricultural homestead under section 273.13, subdivision 22 or 23:
27.16    (1) the property taxes payable;
27.17    (2) the name and address of the owner;
27.18    (3) the Social Security number or numbers of the owners; and
27.19    (4) any other information the commissioner deems necessary or useful to carry
27.20out the provisions of this section.
27.21The information must be provided in the form and manner prescribed by the commissioner.
27.22    Subd. 2. Report. By March 15, 2015, the commissioner must provide written
27.23reports to the chairs and ranking minority members of the legislative committees with
27.24jurisdiction over taxes, in compliance with Minnesota Statutes, sections 3.195 and 3.197.
27.25The report must provide information on the number and dollar amount of homeowner
27.26property tax refund claims based on taxes payable in 2014, including:
27.27    (i) the number and dollar amount of claims projected for homestead credit refunds
27.28based on taxes payable in 2014 prior to enactment of the notification requirement in
27.29this section;
27.30    (ii) the number of notifications issued as provided in this section, including the
27.31number issued by county;
27.32    (iii) the number and dollar amount of claims for homestead credit refunds based on
27.33taxes payable in 2014 processed through December 31, 2014; and
27.34    (iv) a description of any outreach efforts undertaken by the commissioner for
27.35homestead credit refunds based on taxes payable in 2014, in addition to the notification
27.36required in this section.
28.1EFFECTIVE DATE.This section is effective for refund claims based on property
28.2taxes payable in 2014.


28.5    Section 1. Minnesota Statutes 2012, section 69.021, is amended by adding a
28.6subdivision to read:
28.7    Subd. 12. Surcharge aid accounts. (a) A surcharge fire pension aid account is
28.8established in the special revenue fund to receive amounts as provided under section
28.9297I.07, subdivision 3, clause (1). The commissioner shall administer the account and
28.10allocate money in the account as follows:
28.11    (1) 17.342 percent as supplemental state pension funding paid to the executive
28.12director of the Public Employees Retirement Association for deposit in the public
28.13employees police and fire retirement fund established by section 353.65, subdivision 1;
28.14    (2) 8.658 percent to municipalities employing firefighters with retirement coverage
28.15by the public employees police and fire retirement plan, allocated in proportion to the
28.16relationship that the preceding December 31 number of firefighters employed by each
28.17municipality who have public employees police and fire retirement plan coverage bears to
28.18the total preceding December 31 number of municipal firefighters covered by the public
28.19employees police and fire retirement plan; and
28.20    (3) 74 percent for municipalities other than the municipalities receiving a
28.21disbursement under clause (2) which qualified to receive fire state aid in that calendar year,
28.22allocated in proportion to the most recent amount of fire state aid paid under subdivision 7
28.23for the municipality bears to the most recent total fire state aid for all municipalities other
28.24than the municipalities receiving a disbursement under clause (2) paid under subdivision
28.257, with the allocated amount for fire departments participating in the voluntary statewide
28.26lump-sum volunteer firefighter retirement plan paid to the executive director of the Public
28.27Employees Retirement Association for deposit in the fund established by section 353G.02,
28.28subdivision 3, and credited to the respective account and with the balance paid to the
28.29treasurer of each municipality for transmittal within 30 days of receipt to the treasurer of
28.30the applicable volunteer firefighter relief association for deposit in its special fund.
28.31    (b) A surcharge police pension aid account is established in the special revenue
28.32fund to receive amounts as provided by section 297I.07, subdivision 3, clause (2). The
28.33commissioner shall administer the account and allocate money in the account as follows:
28.34    (1) one-third to be distributed as police state aid as provided under subdivision 7a; and
29.1    (2) two-thirds to be apportioned, on the basis of the number of active police officers
29.2certified for police state aid receipt under section 69.011, subdivisions 2 and 2b, between:
29.3    (i) the executive director of the Public Employees Retirement Association for
29.4deposit as a supplemental state pension funding aid in the public employees police and fire
29.5retirement fund established by section 353.65, subdivision 1; and
29.6    (ii) the executive director of the Minnesota State Retirement System for deposit as a
29.7supplemental state pension funding aid in the state patrol retirement fund.
29.8    (c) On or before September 1, annually, the executive director of the Public
29.9Employees Retirement Association shall report to the commissioner the following:
29.10    (1) the municipalities which employ firefighters with retirement coverage by the
29.11public employees police and fire retirement plan;
29.12    (2) the number of firefighters with public employees police and fire retirement plan
29.13employed by each municipality;
29.14    (3) the fire departments covered by the voluntary statewide lump-sum volunteer
29.15firefighter retirement plan; and
29.16    (4) any other information requested by the commissioner to administer the surcharge
29.17fire pension aid account.
29.18    (d) For this subdivision, (i) the number of firefighters employed by a municipality
29.19who have public employees police and fire retirement plan coverage means the number
29.20of firefighters with public employees police and fire retirement plan coverage that were
29.21employed by the municipality for not less than 30 hours per week for a minimum of six
29.22months prior to December 31 preceding the date of the payment under this section and, if
29.23the person was employed for less than the full year, prorated to the number of full months
29.24employed; and, (ii) the number of active police officers certified for police state aid receipt
29.25under section 69.011, subdivisions 2 and 2b means, for each municipality, the number of
29.26police officers meeting the definition of peace officer in section 69.011, subdivision 1,
29.27counted as provided and limited by section 69.011, subdivisions 2 and 2b.
29.28    (e) The payments under this section shall be made on October 1 each year, based
29.29on the amount in the surcharge fire pension aid account and the amount in the surcharge
29.30police pension aid account on the preceding June 30, with interest at 1 percent for each
29.31month, or portion of a month, that the amount remains unpaid after October 1. The
29.32amounts necessary to make the payments under this subdivision are annually appropriated
29.33to the commissioner from the surcharge fire and police pension aid accounts. Any
29.34necessary adjustments shall be made to subsequent payments.
29.35    (f) The provisions of this chapter that prevent municipalities and relief associations
29.36from being eligible for, or receiving state aid under this chapter until the applicable
30.1financial reporting requirements have been complied with, apply to the amounts payable
30.2to municipalities and relief associations under this subdivision.
30.3    (g) The amounts necessary to make the payments under this subdivision are
30.4appropriated to the commissioner from the respective accounts in the special revenue fund.
30.5EFFECTIVE DATE.This section is effective beginning in the fiscal year beginning
30.6July 1, 2013.

30.7    Sec. 2. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
30.8    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
30.9class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property
30.10is located in a border city that has an enterprise zone, as defined in section 469.166; (2)
30.11the property is located in a city with a population greater than 2,500 and less than 35,000
30.12according to the 1980 decennial census; (3) the city is adjacent to a city in another state or
30.13immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city
30.14in the other state has a population of greater than 5,000 and less than 75,000 according to
30.15the 1980 decennial census.
30.16    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
30.17property to 2.3 2 percent of the property's market value and (ii) the tax on class 3a property
30.18to 2.3 2 percent of market value.
30.19    (c) The county auditor shall annually certify the costs of the credits to the
30.20Department of Revenue. The department shall reimburse local governments for the
30.21property taxes forgone as the result of the credits in proportion to their total levies.
30.22EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.

30.23    Sec. 3. Minnesota Statutes 2012, section 290C.02, subdivision 6, is amended to read:
30.24    Subd. 6. Forest land. "Forest land" means land containing a minimum of 20
30.25contiguous acres for which the owner has implemented a forest management plan that was
30.26prepared or updated within the past ten years by an approved plan writer. For purposes of
30.27this subdivision, acres are considered to be contiguous even if they are separated by a road,
30.28waterway, railroad track, or other similar intervening property. At least 50 percent of the
30.29contiguous acreage must meet the definition of forest land in section 88.01, subdivision 7.
30.30For the purposes of sections 290C.01 to 290C.11, forest land does not include the following:
30.31    (i) land used for residential or agricultural purposes,;
30.32    (ii) land enrolled in the reinvest in Minnesota program, a state or federal conservation
30.33reserve or easement reserve program under sections 103F.501 to 103F.531, the Minnesota
31.1agricultural property tax law under section 273.111, or land subject to agricultural land
31.2preservation controls or restrictions as defined in section 40A.02 or under the Metropolitan
31.3Agricultural Preserves Act under chapter 473H, or;
31.4    (iii) land subject to a conservation easement funded under section 97A.056 or a
31.5comparable permanent easement conveyed to a governmental or nonprofit entity; or
31.6    (iv) land improved with a structure, pavement, sewer, campsite, or any road, other
31.7than a township road, used for purposes not prescribed in the forest management plan.
31.8EFFECTIVE DATE.This section is effective for payments made beginning in
31.9calendar year 2014.

31.10    Sec. 4. Minnesota Statutes 2012, section 290C.05, is amended to read:
31.11290C.05 ANNUAL CERTIFICATION.
31.12    On or before July 1 of each year, beginning with the year after the original claimant
31.13has received an approved application, the commissioner shall send each claimant enrolled
31.14under the sustainable forest incentive program a certification form. For purposes of this
31.15section, the original claimant is the person that filed the first application under section
31.16290C.04 to enroll the land in the program. The claimant must sign the certification,
31.17attesting that the requirements and conditions for continued enrollment in the program are
31.18currently being met, and must return the signed certification form, along with a copy of
31.19the property tax statement for the property taxes payable on the enrolled property for the
31.20calendar year and any other information the commissioner deems necessary to determine
31.21whether the property is qualified under section 290C.02, subdivision 6, or the amount of
31.22the payment under section 290C.07, paragraph (a), clause (2), to the commissioner by
31.23August 15 of that same year. If the claimant does not return an annual certification form
31.24by the due date, the provisions in section 290C.11 apply.
31.25EFFECTIVE DATE.This section is effective for payments made beginning in
31.26calendar year 2014.

31.27    Sec. 5. Minnesota Statutes 2012, section 290C.07, is amended to read:
31.28290C.07 CALCULATION OF INCENTIVE PAYMENT.
31.29    (a) An approved claimant under the sustainable forest incentive program is eligible
31.30to receive an annual payment. The payment shall be equal to the lesser of (1) $7 per acre
31.31 or (2) one-half of the property tax payable for the calendar year for each acre enrolled in
31.32the sustainable forest incentive program.
32.1    (b) The annual payment for each Social Security number or state or federal business
32.2tax identification number must not exceed $100,000.
32.3EFFECTIVE DATE.This section is effective for payments made beginning in
32.4calendar year 2014.

32.5    Sec. 6. [297I.07] SURCHARGE ON HOMEOWNERS AND AUTO POLICIES.
32.6    Subdivision 1. Surcharge on policies. (a) Each licensed insurer engaged in writing
32.7insurance shall collect a surcharge equal to $5 per calendar year for each policy issued
32.8or renewed during that calendar year for:
32.9    (1) homeowners insurance authorized in section 60A.06, subdivision 1, clause
32.10(1)(c); and
32.11    (2) automobile insurance as defined in section 65B.14, subdivision 2.
32.12    (b) The surcharge amount collected under this subdivision must not be considered
32.13premium for any other purpose. The surcharge amount must be separately stated on either a
32.14billing or policy declaration or document containing similar information sent to an insured.
32.15    Subd. 2. Collection and administration. The commissioner shall administer the
32.16surcharge imposed by this section in the same manner as the taxes imposed by this chapter.
32.17    Subd. 3. Deposit of revenues. The commissioner shall deposit revenues from the
32.18surcharge under this section as follows:
32.19    (1) amounts from the surcharge imposed under subdivision 1, paragraph (a), clause
32.20(1), in a surcharge fire pension aid account in the special revenue fund; and
32.21    (2) amounts from the surcharge imposed under subdivision 1, paragraph (a), clause
32.22(2), in a surcharge police pension aid account in the special revenue fund.
32.23    Subd. 4. Surcharge termination. The surcharge imposed under subdivision
32.241 ends on the December 31 next following the actuarial valuation date on which the
32.25assets of the retirement plan on a market value equals or exceeds 90 percent of the total
32.26actuarial accrued liabilities of the retirement plan as disclosed in an actuarial valuation
32.27prepared under section 356.215 and the Standards for Actuarial Work promulgated by the
32.28Legislative Commission on Pensions and Retirement, for the State Patrol retirement plan
32.29or the public employees police and fire retirement plan, whichever occurs last.
32.30EFFECTIVE DATE.This section is effective for policies issued after June 30, 2013.

32.31    Sec. 7. Minnesota Statutes 2012, section 477A.011, subdivision 30, is amended to read:
32.32    Subd. 30. Pre-1940 housing percentage. (a) Except as provided in paragraph (b),
32.33"pre-1940 housing percentage" for a city is 100 times the most recent federal census count
33.1by the United States Bureau of the Census of all housing units in the city built before
33.21940, divided by the total number of all housing units in the city. Housing units includes
33.3both occupied and vacant housing units as defined by the federal census.
33.4    (b) For the city of East Grand Forks only, "pre-1940 housing percentage" is equal
33.5to 100 times the 1990 federal census count of all housing units in the city built before
33.61940, divided by the most recent count by the United States Bureau of the Census of all
33.7housing units in the city. Housing units includes both occupied and vacant housing units
33.8as defined by the federal census.
33.9EFFECTIVE DATE.This section is effective for aids payable in calendar year
33.102014 and thereafter.

33.11    Sec. 8. Minnesota Statutes 2012, section 477A.011, is amended by adding a
33.12subdivision to read:
33.13    Subd. 30a. Percent of housing built between 1940 and 1970. "Percent of housing
33.14built between 1940 and 1970" is equal to 100 times the most recent count by the United
33.15States Bureau of the Census of all housing units in the city built after 1939 but before
33.161970, divided by the total number of all housing units in the city. Housing units includes
33.17both occupied and vacant housing units as defined by the federal census.
33.18EFFECTIVE DATE.This section is effective for aids payable in calendar year
33.192014 and thereafter.

33.20    Sec. 9. Minnesota Statutes 2012, section 477A.011, subdivision 34, is amended to read:
33.21    Subd. 34. City revenue need. (a) For a city with a population equal to or greater
33.22than 2,500 10,000, "city revenue need" is the greater of 285 or 1.15 times the sum of (1)
33.235.0734098 4.59 times the pre-1940 housing percentage; plus (2) 19.141678 times the
33.24population decline percentage 0.622 times the percent of housing built between 1940 and
33.251970; plus (3) 2504.06334 times the road accidents factor 169.415 times the jobs per
33.26capita; plus (4) 355.0547; minus (5) the metropolitan area factor; minus (6) 49.10638
33.27times the household size the sparsity adjustment; plus (5) 307.664.
33.28    (b) For a city with a population equal to or greater than 2,500 and less than 10,000,
33.29"city revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940
33.30housing percentage; minus (3) 53.768 times household size; plus (4) 14.022 times peak
33.31population decline.
33.32    (b) (c) For a city with a population less than 2,500, "city revenue need" is the sum of
33.33(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
34.1industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
34.21.206 times the transformed population; minus (5) 62.772 410 plus 0.367 times the city's
34.3population over 100. The city revenue need under this paragraph shall not exceed 630.
34.4    (c) (d) For a city with a population of at least 2,500 or more and a population in one
34.5of the most recently available five years that was less than 2,500, "city revenue need"
34.6is the sum of (1) its city revenue need calculated under paragraph (a) multiplied by its
34.7transition factor; plus (2) its city revenue need calculated under the formula in paragraph
34.8(b) multiplied by the difference between one and its transition factor. For purposes of this
34.9paragraph, a city's "transition factor" is equal to 0.2 multiplied by the number of years that
34.10the city's population estimate has been 2,500 or more. This provision only applies for aids
34.11payable in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500.
34.12It applies to any city for aids payable in 2009 and thereafter but less than 3,000, the "city
34.13revenue need" equals (1) the transition factor times the city's revenue need calculated in
34.14paragraph (b) plus (2) 630 times the difference between one and the transition factor. For
34.15a city with a population of at least 10,000 but less than 10,500, the "city revenue need"
34.16equals (1) the transition factor times the city's revenue need calculated in paragraph (a)
34.17plus (2) the city's revenue need calculated under the formula in paragraph (b) times the
34.18difference between one and the transition factor. For purposes of this paragraph "transition
34.19factor" is 0.2 percent times the amount that the city's population exceeds the minimum
34.20threshold in either of the first two sentences.
34.21    (d) (e) The city revenue need cannot be less than zero.
34.22    (e) (f) For calendar year 2005 2015 and subsequent years, the city revenue need for
34.23a city, as determined in paragraphs (a) to (d) (e), is multiplied by the ratio of the annual
34.24implicit price deflator for government consumption expenditures and gross investment for
34.25state and local governments as prepared by the United States Department of Commerce,
34.26for the most recently available year to the 2003 2013 implicit price deflator for state
34.27and local government purchases.
34.28EFFECTIVE DATE.This section is effective for aids payable in calendar year
34.292014 and thereafter.

34.30    Sec. 10. Minnesota Statutes 2012, section 477A.011, subdivision 42, is amended to read:
34.31    Subd. 42. City jobs base Jobs per capita. (a) "City jobs base" for a city with a
34.32population of 5,000 or more is equal to the product of (1) $25.20, (2) the number of
34.33jobs per capita in the city, and (3) its population. For cities with a population less than
34.345,000, the city jobs base is equal to zero. For a city receiving aid under subdivision 36,
34.35paragraph (k), its city jobs base is reduced by the lesser of 36 percent of the amount of
35.1aid received under that paragraph or $1,000,000. No city's city jobs base may exceed
35.2$4,725,000 under this paragraph.
35.3    (b) For calendar year 2010 and subsequent years, the city jobs base for a city, as
35.4determined in paragraph (a), is multiplied by the ratio of the appropriation under section
35.5477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under
35.6that section for aids payable in 2009.
35.7    (c) For purposes of this subdivision, "Jobs per capita in the city" means (1) the
35.8average annual number of employees in the city based on the data from the Quarterly
35.9Census of Employment and Wages, as reported by the Department of Employment and
35.10Economic Development, for the most recent calendar year available as of May 1, 2008
35.11 November 1 of every odd-numbered year, divided by (2) the city's population for the
35.12same calendar year as the employment data. The commissioner of the Department of
35.13Employment and Economic Development shall certify to the city the average annual
35.14number of employees for each city by June 1, 2008 January 15, of every even-numbered
35.15year beginning with January 15, 2014. A city may challenge an estimate under this
35.16paragraph by filing its specific objection, including the names of employers that it feels
35.17may have misreported data, in writing with the commissioner by June 20, 2008 December
35.181 of every odd-numbered year. The commissioner shall make every reasonable effort
35.19to address the specific objection and adjust the data as necessary. The commissioner
35.20shall certify the estimates of the annual employment to the commissioner of revenue by
35.21July 15, 2008 January 15 of all even-numbered years, including any estimates still under
35.22objection. For aids payable in 2014, "jobs per capita" shall be based on the annual number
35.23of employees and population for calendar year 2010 without additional review.
35.24EFFECTIVE DATE.This section is effective for aids payable in calendar year
35.252014 and thereafter.

35.26    Sec. 11. Minnesota Statutes 2012, section 477A.011, is amended by adding a
35.27subdivision to read:
35.28    Subd. 44. Peak population decline. "Peak population decline" is equal to 100
35.29times the difference between one and the ratio of the city's current population, to the
35.30highest city population reported in a federal census from the 1970 census or later. "Peak
35.31population decline" shall not be less than zero.
35.32EFFECTIVE DATE.This section is effective for aids payable in calendar year
35.332014 and thereafter.

36.1    Sec. 12. Minnesota Statutes 2012, section 477A.011, is amended by adding a
36.2subdivision to read:
36.3    Subd. 45. Sparsity adjustment. For a city with a population of 10,000 or more, the
36.4sparsity adjustment is 100 for any city with an average population density less than 150
36.5per square mile, according to the most recent federal census, and the sparsity adjustment is
36.6zero for all other cities.
36.7EFFECTIVE DATE.This section is effective for aids payable in calendar year
36.82014 and thereafter.

36.9    Sec. 13. Minnesota Statutes 2012, section 477A.013, subdivision 8, is amended to read:
36.10    Subd. 8. City formula aid. (a) For aids payable in 2014 only, the formula aid for
36.11a city is equal to the lesser of its unmet need or the sum of (1) its 2013 certified aid and
36.12(2) the product of (i) the difference between its unmet need and its 2013 certified aid
36.13and (ii) the aid gap percentage.
36.14    (b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to
36.15the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase
36.16percentage multiplied by the average of its unmet need for the most recently available two
36.17years formula aid in the previous year and (2) the product of (i) the difference between
36.18its unmet need and its certified aid in the previous year under subdivision 9, and (ii)
36.19the aid gap percentage.
36.20No city may have a formula aid amount less than zero. The need increase aid gap
36.21 percentage must be the same for all cities.
36.22    The applicable need increase aid gap percentage must be calculated by the
36.23Department of Revenue so that the total of the aid under subdivision 9 equals the total
36.24amount available for aid under section 477A.03. Data used in calculating aids to cities
36.25under sections 477A.011 to 477A.013 shall be the most recently available data as of
36.26January 1 in the year in which the aid is calculated except that the data used to compute "net
36.27levy" in subdivision 9 is the data most recently available at the time of the aid computation.
36.28EFFECTIVE DATE.This section is effective for aids payable in calendar year
36.292014 and thereafter.

36.30    Sec. 14. Minnesota Statutes 2012, section 477A.013, subdivision 9, is amended to read:
36.31    Subd. 9. City aid distribution. (a) In calendar year 2013 2014 and thereafter, each
36.32city shall receive an aid distribution equal to the sum of (1) the city formula aid under
36.33subdivision 8, and (2) its city aid base aid adjustment under subdivision 13.
37.1    (b) For aids payable in 2013 and 2014 only, the total aid in the previous year for
37.2any city shall mean the amount of aid it was certified to receive for aids payable in 2012
37.3under this section. For aids payable in 2015 and thereafter, the total aid in the previous
37.4year for any city means the amount of aid it was certified to receive under this section in
37.5the previous payable year.
37.6    (c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
37.7the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
37.8plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total
37.9aid for any city with a population of 2,500 or more may not be less than its total aid under
37.10this section in the previous year minus the lesser of $10 multiplied by its population, or ten
37.11percent of its net levy in the year prior to the aid distribution.
37.12    (d) (b) For aids payable in 2014 only, the total aid for a city may not be less than the
37.13amount it was certified to receive in 2013. For aids payable in 2010 2015 and thereafter,
37.14the total aid for a city with a population less than 2,500 must not be less than the amount
37.15it was certified to receive in the previous year minus the lesser of $10 multiplied by its
37.16population, or five percent of its 2003 certified aid amount. For aids payable in 2009 only,
37.17the total aid for a city with a population less than 2,500 must not be less than what it
37.18received under this section in the previous year unless its total aid in calendar year 2008
37.19was aid under section 477A.011, subdivision 36, paragraph (s), in which case its minimum
37.20aid is zero its net levy in the year prior to the aid distribution.
37.21    (e) A city's aid loss under this section may not exceed $300,000 in any year in
37.22which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or
37.23greater than the appropriation under that subdivision in the previous year, unless the
37.24city has an adjustment in its city net tax capacity under the process described in section
37.25469.174, subdivision 28.
37.26    (f) If a city's net tax capacity used in calculating aid under this section has decreased
37.27in any year by more than 25 percent from its net tax capacity in the previous year due to
37.28property becoming tax-exempt Indian land, the city's maximum allowed aid increase
37.29under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
37.30year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
37.31resulting from the property becoming tax exempt.
37.32EFFECTIVE DATE.This section is effective for aids payable in calendar year
37.332014 and thereafter.

37.34    Sec. 15. Minnesota Statutes 2012, section 477A.013, is amended by adding a
37.35subdivision to read:
38.1    Subd. 13. Certified aid adjustments. (a) A city that received an aid base increase
38.2under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall
38.3have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids
38.4payable in 2014 through 2018.
38.5    (b) A city that received a temporary aid increase under Minnesota Statutes 2012,
38.6section 477A.011, subdivision 36, paragraph (m), (v), or (w), shall have its total aid under
38.7subdivision 9 decreased by the amount of its aid base increase under those paragraphs in
38.8calendar year 2013.

38.9    Sec. 16. Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read:
38.10    Subd. 2a. Cities. For aids payable in 2013 2014 and thereafter, the total aid paid
38.11under section 477A.013, subdivision 9, is $426,438,012 $506,438,012. For aids payable
38.12in 2015 and thereafter, the total aid paid under section 477A.013, subdivision 9, is the
38.13amount certified under that section in the previous year multiplied by the inflation
38.14adjustment under subdivision 6.
38.15EFFECTIVE DATE.This section is effective for aids payable in calendar year
38.162014 and thereafter.

38.17    Sec. 17. Minnesota Statutes 2012, section 477A.03, subdivision 2b, is amended to read:
38.18    Subd. 2b. Counties. (a) For aids payable in 2013 2014 and thereafter, the total aid
38.19payable under section 477A.0124, subdivision 3, is $80,795,000 $95,795,000. Each
38.20calendar year, $500,000 of this appropriation shall be retained by the commissioner
38.21of revenue to make reimbursements to the commissioner of management and budget
38.22for payments made under section 611.27. For calendar year 2004, the amount shall
38.23be in addition to the payments authorized under section 477A.0124, subdivision 1.
38.24For calendar year 2005 and subsequent years, the amount shall be deducted from the
38.25appropriation under this paragraph. The reimbursements shall be to defray the additional
38.26costs associated with court-ordered counsel under section 611.27. Any retained amounts
38.27not used for reimbursement in a year shall be included in the next distribution of county
38.28need aid that is certified to the county auditors for the purpose of property tax reduction
38.29for the next taxes payable year.
38.30    (b) For aids payable in 2013 2014 and thereafter, the total aid under section
38.31477A.0124, subdivision 4 , is $84,909,575 $99,909,575. The commissioner of management
38.32and budget shall bill the commissioner of revenue for the cost of preparation of local impact
38.33notes as required by section 3.987, not to exceed $207,000 in each fiscal year 2004 and
38.34thereafter. The commissioner of education shall bill the commissioner of revenue for the
39.1cost of preparation of local impact notes for school districts as required by section 3.987,
39.2not to exceed $7,000 in each fiscal year 2004 and thereafter. The commissioner of revenue
39.3shall deduct the amounts billed under this paragraph from the appropriation under this
39.4paragraph. The amounts deducted are appropriated to the commissioner of management
39.5and budget and the commissioner of education for the preparation of local impact notes.
39.6EFFECTIVE DATE.This section is effective for aid payable in 2014 and thereafter.

39.7    Sec. 18. Minnesota Statutes 2012, section 477A.03, is amended by adding a
39.8subdivision to read:
39.9    Subd. 6. Inflation adjustment. In 2015 and thereafter, the amount paid under
39.10subdivision 2a shall be multiplied by an amount equal to one plus the sum of (1) the
39.11percentage increase in the implicit price deflator for government expenditures and gross
39.12investment for state and local government purchases as prepared by the United States
39.13Department of Commerce, for the 12-month period ending March 31 of the previous
39.14calendar year, and (2) the percentage increase in total city population for the most recently
39.15available years as of January 15 of the current year. The percentage increase in this
39.16subdivision shall not be less than 2.5 percent or greater than five percent.
39.17EFFECTIVE DATE.This section is effective for aids payable in calendar year
39.182014 and thereafter.

39.19    Sec. 19. REPEALER.
39.20(a) Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33,
39.2136, 39, 40, 41, and 42; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, are
39.22repealed.
39.23(b) Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008, chapter
39.24154, article 1, section 4, is repealed.
39.25EFFECTIVE DATE.This section is effective for aids payable in calendar year
39.262014 and thereafter.


39.29    Section 1. Minnesota Statutes 2012, section 103B.102, subdivision 3, is amended to
39.30read:
40.1    Subd. 3. Evaluation and report. The Board of Water and Soil Resources shall
40.2evaluate performance, financial, and activity information for each local water management
40.3entity. The board shall evaluate the entities' progress in accomplishing their adopted plans
40.4on a regular basis as determined by the board based on budget and operations of the local
40.5water management entity, but not less than once every five ten years. The board shall
40.6maintain a summary of local water management entity performance on the board's Web site.
40.7Beginning February 1, 2008, and annually thereafter, the board shall provide an analysis
40.8of local water management entity performance to the chairs of the house of representatives
40.9and senate committees having jurisdiction over environment and natural resources policy.

40.10    Sec. 2. Minnesota Statutes 2012, section 103B.335, is amended to read:
40.11103B.335 TAX LEVY AUTHORITY.
40.12    Subdivision 1. Local water planning and management. The governing body of
40.13any county, municipality, or township may levy a tax in an amount required to implement
40.14sections 103B.301 to 103B.355 or a comprehensive watershed management plan as
40.15defined in section 103B.3363.
40.16    Subd. 2. Priority programs; conservation and watershed districts. A county
40.17may levy amounts necessary to pay the reasonable increased costs to soil and water
40.18conservation districts and watershed districts of administering and implementing priority
40.19programs identified in an approved and adopted plan or a comprehensive watershed
40.20management plan as defined in section 103B.3363.

40.21    Sec. 3. Minnesota Statutes 2012, section 103B.3369, subdivision 5, is amended to read:
40.22    Subd. 5. Financial assistance. A base grant may be awarded to a county that
40.23provides a match utilizing a water implementation tax or other local source. A water
40.24implementation tax that a county intends to use as a match to the base grant must be
40.25levied at a rate sufficient to generate a minimum amount determined by the board.
40.26The board may award performance-based grants to local units of government that are
40.27responsible for implementing elements of applicable portions of watershed management
40.28plans, comprehensive plans, local water management plans, or comprehensive watershed
40.29management plans, developed or amended, adopted and approved, according to chapter
40.30103B, 103C, or 103D. Upon request by a local government unit, the board may also
40.31award performance-based grants to local units of government to carry out TMDL
40.32implementation plans as provided in chapter 114D, if the TMDL implementation plan has
40.33been incorporated into the local water management plan according to the procedures for
40.34approving comprehensive plans, watershed management plans, local water management
41.1plans, or comprehensive watershed management plans under chapter 103B, 103C, or
41.2103D, or if the TMDL implementation plan has undergone a public review process.
41.3Notwithstanding section 16A.41, the board may award performance-based grants on an
41.4advanced basis. The fee authorized in section 40A.152 may be used as a local match
41.5or as a supplement to state funding to accomplish implementation of comprehensive
41.6plans, watershed management plans, local water management plans, or comprehensive
41.7watershed management plans under chapter 103B, 103C, or 103D.

41.8    Sec. 4. Minnesota Statutes 2012, section 103C.501, subdivision 4, is amended to read:
41.9    Subd. 4. Cost-sharing funds. (a) The state board shall allocate at least 70 percent
41.10of cost-sharing funds to areas with high priority erosion, sedimentation, or water quality
41.11problems or water quantity problems due to altered hydrology. The areas must be selected
41.12based on the statewide priorities established by the state board.
41.13    (b) The allocated funds must be used for conservation practices for high priority
41.14problems identified in the comprehensive and annual work plans of the districts, for
41.15the technical assistance portion of the grant funds to leverage federal or other nonstate
41.16funds, or to address high-priority needs identified in local water management plans or
41.17comprehensive watershed management plans.
41.18    (b) The remaining cost-sharing funds may be allocated to districts as follows:
41.19    (1) for technical and administrative assistance, not more than 20 percent of the
41.20funds; and
41.21    (2) for conservation practices for lower priority erosion, sedimentation, or water
41.22quality problems.

41.23    Sec. 5. Minnesota Statutes 2012, section 103F.405, subdivision 1, is amended to read:
41.24    Subdivision 1. Authority. Each statutory or home rule charter city, town, or
41.25county that has planning and zoning authority under sections 366.10 to 366.19, 394.21
41.26to 394.37, or 462.351 to 462.365 is encouraged to adopt a soil loss ordinance. The soil
41.27loss ordinance must use the soil loss tolerance for each soil series described in the United
41.28States Soil Natural Resources Conservation Service Field Office Technical Guide, or
41.29another method approved by the Board of Water and Soil Resources, to determine the
41.30soil loss limits, but the soil loss limits must be attainable by the best practicable soil
41.31conservation practice. Ordinances adopted by local governments within the metropolitan
41.32area defined in section 473.121 must be consistent with local water management plans
41.33adopted under section 103B.235 a comprehensive plan, local water management plan, or
42.1watershed management plan developed or amended, adopted and approved, according
42.2to chapter 103B, 103C, or 103D.

42.3    Sec. 6. Minnesota Statutes 2012, section 168.012, subdivision 9, is amended to read:
42.4    Subd. 9. Manufactured homes and park trailers. Manufactured homes and park
42.5trailers shall not be taxed as motor vehicles using the public streets and highways and shall
42.6be exempt from the motor vehicle tax provisions of this chapter. Except as provided in
42.7section 273.125, manufactured homes and park trailers shall be taxed as personal property.
42.8The provisions of Minnesota Statutes 1957, section 272.02 or any other act providing for
42.9tax exemption shall be inapplicable to manufactured homes and park trailers, except such
42.10manufactured homes as are held by a licensed dealer or limited dealer and exempted as
42.11inventory under subdivision 9a. Travel trailers not conspicuously displaying current
42.12registration plates on the property tax assessment date shall be taxed as manufactured
42.13homes if occupied as human dwelling places.
42.14EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
42.15thereafter.

42.16    Sec. 7. Minnesota Statutes 2012, section 168.012, is amended by adding a subdivision
42.17to read:
42.18    Subd. 9a. Manufactured home as dealer inventory. Manufactured homes as
42.19defined in section 327.31, subdivision 6, shall be considered as dealer inventory if the
42.20home is:
42.21(1) listed as inventory and held by a licensed or limited dealer;
42.22(2) unoccupied and not available for rent;
42.23(3) may or may not be permanently connected to utilities when located in a
42.24manufactured park; and
42.25(4) may or may not be temporarily connected to utilities when located at a dealer's
42.26sales center.
42.27EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
42.28thereafter.

42.29    Sec. 8. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
42.30    Subd. 39. Economic development; public purpose. The holding of property by a
42.31political subdivision of the state for later resale for economic development purposes shall
42.32be considered a public purpose in accordance with subdivision 8 for a period not to exceed
43.1nine years, except that for property located in a city of 5,000 20,000 population or under
43.2that is located outside of the metropolitan area as defined in section 473.121, subdivision
43.32 , the period must not exceed 15 years.
43.4The holding of property by a political subdivision of the state for later resale (1)
43.5which is purchased or held for housing purposes, or (2) which meets the conditions
43.6described in section 469.174, subdivision 10, shall be considered a public purpose in
43.7accordance with subdivision 8.
43.8The governing body of the political subdivision which acquires property which is
43.9subject to this subdivision shall after the purchase of the property certify to the city or
43.10county assessor whether the property is held for economic development purposes or
43.11housing purposes, or whether it meets the conditions of section 469.174, subdivision 10.
43.12If the property is acquired for economic development purposes and buildings or other
43.13improvements are constructed after acquisition of the property, and if more than one-half
43.14of the floor space of the buildings or improvements which is available for lease to or use
43.15by a private individual, corporation, or other entity is leased to or otherwise used by
43.16a private individual, corporation, or other entity the provisions of this subdivision shall
43.17not apply to the property. This subdivision shall not create an exemption from section
43.18272.01, subdivision 2 ; 272.68; 273.19; or 469.040, subdivision 3; or other provision of
43.19law providing for the taxation of or for payments in lieu of taxes for publicly held property
43.20which is leased, loaned, or otherwise made available and used by a private person.
43.21EFFECTIVE DATE.This section is effective for assessment year 2013 and
43.22thereafter and for taxes payable in 2014 and thereafter.

43.23    Sec. 9. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
43.24to read:
43.25    Subd. 98. Certain property owned by an Indian tribe. (a) Property is exempt that:
43.26    (1) was classified as 3a under section 273.13, subdivision 24, for taxes payable
43.27in 2013;
43.28    (2) is located in a city of the first class with a population greater than 300,000 as of
43.29the 2010 federal census;
43.30    (3) is owned and occupied directly or indirectly by a federally recognized Indian
43.31tribe within the state of Minnesota; and
43.32    (4) is used exclusively for tribal purposes or institutions of public charity as defined
43.33in subdivision 7.
43.34    (b) For purposes of this subdivision, a "tribal purpose" is a public purpose as defined
43.35in subdivision 8 and includes noncommercial tribal government activities. Property
44.1that qualifies for the exemption under this subdivision is limited to no more than two
44.2contiguous parcels and structures that do not exceed in the aggregate 20,000 square feet.
44.3Property acquired for single-family housing, market-rate apartments, agriculture, or
44.4forestry does not qualify for this exemption. The exemption created by this subdivision
44.5expires with taxes payable in 2024.
44.6EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.

44.7    Sec. 10. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
44.8to read:
44.9    Subd. 99. Public entertainment facility; property tax exemption; special
44.10assessment. Any real or personal property acquired, owned, leased, controlled, used,
44.11or occupied by a first class city for the primary purpose of providing an arena for a
44.12professional basketball team is declared to be acquired, owned, leased, controlled, used,
44.13and occupied for public, governmental, and municipal purposes, and is exempt from ad
44.14valorem taxation by the state or any political subdivision of the state, provided that the
44.15properties are subject to special assessments levied by a political subdivision for a local
44.16improvement in amounts proportionate to and not exceeding the special benefit received
44.17by the properties from the improvement. In determining the special benefit received by
44.18the properties, no possible use of any of the properties in any manner different from their
44.19intended use for providing a professional basketball arena at the time may be considered.
44.20Notwithstanding section 272.01, subdivision 2, or 273.19, real or personal property subject
44.21to a lease or use agreement between the city and another person for uses related to the
44.22purposes of the operation of the arena is exempt from taxation regardless of the length of
44.23the lease or use agreement. This section, insofar as it provides an exemption or special
44.24treatment, does not apply to any real property that is leased for residential, business, or
44.25commercial development, or to a restaurant that is open for general business more than
44.26200 days a year, or for other purposes different from those necessary to the provision
44.27and operation of the arena.
44.28EFFECTIVE DATE.This section is effective beginning with assessment year 2013.

44.29    Sec. 11. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
44.30to read:
44.31    Subd. 100. Public entertainment facility; property tax exemption; special
44.32assessment. Any real or personal property acquired, owned, leased, controlled, used,
44.33or occupied by a first class city for the primary purpose of providing a ball park for a
45.1minor league baseball team is declared to be acquired, owned, leased, controlled, used,
45.2and occupied for public, governmental, and municipal purposes, and is exempt from ad
45.3valorem taxation by the state or any political subdivision of the state, provided that the
45.4properties are subject to special assessments levied by a political subdivision for a local
45.5improvement in amounts proportionate to and not exceeding the special benefit received
45.6by the properties from the improvement. In determining the special benefit received by
45.7the properties, no possible use of any of the properties in any manner different from
45.8their intended use for providing a minor league ballpark at the time may be considered.
45.9Notwithstanding section 272.01, subdivision 2, or 273.19, real or personal property
45.10subject to a lease or use agreement between the city and another person for uses related to
45.11the purposes of the operation of the ballpark and related parking facilities is exempt from
45.12taxation regardless of the length of the lease or use agreement. This section, insofar as it
45.13provides an exemption or special treatment, does not apply to any real property that is
45.14leased for residential, business, or commercial development or other purposes different
45.15from those necessary to the provision and operation of the ball park.
45.16EFFECTIVE DATE.This section is effective beginning with assessment year 2013.

45.17    Sec. 12. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
45.18to read:
45.19    Subd. 101. Electric generation facility; personal property. (a) Notwithstanding
45.20subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and
45.21other personal property which is part of an electric generation facility that exceeds five
45.22megawatts of installed capacity and meets the requirements of this subdivision is exempt.
45.23At the time of construction, the facility must be:
45.24    (1) designed to utilize natural gas as a primary fuel;
45.25    (2) owned and operated by a municipal power agency as defined in section 453.52,
45.26subdivision 8;
45.27    (3) designed to utilize reciprocating engines paired with generators to produce
45.28electrical power;
45.29    (4) located within the service territory of a municipal power agency's electrical
45.30municipal utility that serves load exclusively in a metropolitan county as defined in
45.31section 473.121, subdivision 4; and
45.32(5) designed to connect directly with a municipality's substation.
45.33    (b) Construction of the facility must be commenced after June 1, 2013, and before
45.34June 1, 2017. Property eligible for this exemption does not include electric transmission
46.1lines and interconnections or gas pipelines and interconnections appurtenant to the
46.2property or the facility.
46.3EFFECTIVE DATE.This section is effective for assessment year 2013, taxes
46.4payable in 2014, and thereafter.

46.5    Sec. 13. Minnesota Statutes 2012, section 273.11, is amended by adding a subdivision
46.6to read:
46.7    Subd. 24. Valuation limit for class 4d property. Notwithstanding the provisions of
46.8subdivision 1, the taxable value of any property classified as class 4d under section 273.13,
46.9subdivision 25, is limited as provided under this section. For assessment year 2013, the
46.10value may not exceed $100,000 times the number of dwelling units. For subsequent years,
46.11the limit is adjusted each year by the average statewide change in estimated market value
46.12of property classified as class 4a and 4d under section 273.13, subdivision 25, for the
46.13previous assessment year, excluding valuation change due to new construction, rounded to
46.14the nearest $1,000. Beginning with assessment year 2014, the commissioner of revenue
46.15must certify the limit for each assessment year by November 1 of the previous year.
46.16EFFECTIVE DATE.This section is effective beginning with assessment year 2013.

46.17    Sec. 14. Minnesota Statutes 2012, section 279.01, subdivision 1, is amended to read:
46.18    Subdivision 1. Due dates; penalties. Except as provided in subdivision subdivisions
46.19 3 or 4 to 5, on May 16 or 21 days after the postmark date on the envelope containing the
46.20property tax statement, whichever is later, a penalty accrues and thereafter is charged upon
46.21all unpaid taxes on real estate on the current lists in the hands of the county treasurer. The
46.22penalty is at a rate of two percent on homestead property until May 31 and four percent on
46.23June 1. The penalty on nonhomestead property is at a rate of four percent until May 31 and
46.24eight percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days
46.25after the postmark date on the envelope containing the property tax statements, whichever
46.26is later, on commercial use real property used for seasonal residential recreational purposes
46.27and classified as class 1c or 4c, and on other commercial use real property classified as
46.28class 3a, provided that over 60 percent of the gross income earned by the enterprise on the
46.29class 3a property is earned during the months of May, June, July, and August. In order for
46.30the first half of the tax due on class 3a property to be paid after May 15 and before June 1,
46.31or 21 days after the postmark date on the envelope containing the property tax statement,
46.32whichever is later, without penalty, the owner of the property must attach an affidavit
46.33to the payment attesting to compliance with the income provision of this subdivision.
47.1Thereafter, for both homestead and nonhomestead property, on the first day of each month
47.2beginning July 1, up to and including October 1 following, an additional penalty of one
47.3percent for each month accrues and is charged on all such unpaid taxes provided that if the
47.4due date was extended beyond May 15 as the result of any delay in mailing property tax
47.5statements no additional penalty shall accrue if the tax is paid by the extended due date. If
47.6the tax is not paid by the extended due date, then all penalties that would have accrued if
47.7the due date had been May 15 shall be charged. When the taxes against any tract or lot
47.8exceed $100, one-half thereof may be paid prior to May 16 or 21 days after the postmark
47.9date on the envelope containing the property tax statement, whichever is later; and, if so
47.10paid, no penalty attaches; the remaining one-half may be paid at any time prior to October
47.1116 following, without penalty; but, if not so paid, then a penalty of two percent accrues
47.12thereon for homestead property and a penalty of four percent on nonhomestead property.
47.13Thereafter, for homestead property, on the first day of November an additional penalty of
47.14four percent accrues and on the first day of December following, an additional penalty of
47.15two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead
47.16property, on the first day of November and December following, an additional penalty of
47.17four percent for each month accrues and is charged on all such unpaid taxes. If one-half of
47.18such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope
47.19containing the property tax statement, whichever is later, the same may be paid at any time
47.20prior to October 16, with accrued penalties to the date of payment added, and thereupon
47.21no penalty attaches to the remaining one-half until October 16 following.
47.22    This section applies to payment of personal property taxes assessed against
47.23improvements to leased property, except as provided by section 277.01, subdivision 3.
47.24    A county may provide by resolution that in the case of a property owner that has
47.25multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in
47.26installments as provided in this subdivision.
47.27    The county treasurer may accept payments of more or less than the exact amount of
47.28a tax installment due. Payments must be applied first to the oldest installment that is due
47.29but which has not been fully paid. If the accepted payment is less than the amount due,
47.30payments must be applied first to the penalty accrued for the year or the installment being
47.31paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
47.32payment required as a condition for filing an appeal under section 278.03 or any other law,
47.33nor does it affect the order of payment of delinquent taxes under section 280.39.

47.34    Sec. 15. Minnesota Statutes 2012, section 279.01, is amended by adding a subdivision
47.35to read:
48.1    Subd. 5. Federal active service exception. In the case of a homestead property
48.2owned by an individual who is on federal active service, as defined in section 190.05,
48.3subdivision 5c, as a member of the National Guard or a reserve component, a six-month
48.4grace period is granted for complying with the due dates imposed by subdivision 1. During
48.5this period, no late fees or penalties shall accrue against the property. The due date for
48.6property taxes owed under this chapter for an individual covered by this subdivision shall
48.7be November 16 for taxes due on May 16, and April 16 of the following year for taxes due
48.8on October 16. A taxpayer making a payment under this subdivision must accompany
48.9the payment with a signed copy of the taxpayer's orders or form DD214 showing the
48.10dates of active service which clearly indicate that the taxpayer was in active service as a
48.11member of the National Guard or a reserve component on the date the payment was due.
48.12This grace period applies to all homestead property owned by individuals on federal active
48.13service, as herein defined, for all of that property's due dates which fall on a day that is
48.14included in the taxpayer's federal active service.

48.15    Sec. 16. Minnesota Statutes 2012, section 279.02, is amended to read:
48.16279.02 DUTIES OF COUNTY AUDITOR AND TREASURER.
48.17    Subdivision 1. Delinquent property; rates. On the first business day in January, of
48.18each year, the county treasurer shall return the tax lists on hand to the county auditor, who
48.19shall compare the same with the statements receipted for by the treasurer on file in the
48.20auditor's office and each tract or lot of real property against which the taxes, or any part
48.21thereof, remain unpaid, shall be deemed delinquent, and thereupon an additional penalty
48.22of two percent on the amount of the original tax remaining unpaid shall immediately
48.23accrue and thereafter be charged upon all such delinquent taxes; and any auditor who
48.24shall make out and deliver any statement of delinquent taxes without including therein
48.25the penalties imposed by law, and any treasurer who shall receive payment of such taxes
48.26without including in such payment all items as shown on the auditor's statement, shall be
48.27liable to the county for the amounts of any items omitted.
48.28    Subd. 2. Federal active service exception. Notwithstanding subdivision 1, a
48.29homestead property owned by an individual who is on federal active service, as defined
48.30in section 190.05, subdivision 5c, as a member of the National Guard or a reserve
48.31component, shall not be deemed delinquent under this section if the due dates imposed
48.32under section 279.01 fall on a day in which the individual was on federal active service.

48.33    Sec. 17. Minnesota Statutes 2012, section 287.05, is amended by adding a subdivision
48.34to read:
49.1    Subd. 10. Hennepin and Ramsey Counties. For properties located in Hennepin
49.2and Ramsey Counties, the county may impose an additional mortgage registry tax as
49.3defined in sections 383A.80 and 383B.80.
49.4EFFECTIVE DATE.This section is effective the day following final enactment.

49.5    Sec. 18. [287.40] HENNEPIN AND RAMSEY COUNTIES.
49.6    For properties located in Hennepin and Ramsey Counties, the county may impose an
49.7additional deed tax as defined in sections 383A.80 and 383B.80.
49.8EFFECTIVE DATE.This section is effective the day following final enactment.

49.9    Sec. 19. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
49.10article 6, section 9, Laws 2000, chapter 490, article 6, section 15, and Laws 2008, chapter
49.11154, article 2, section 30, is amended to read:
49.12    Sec. 3. TAX; PAYMENT OF EXPENSES.
49.13    (a) The tax levied by the hospital district under Minnesota Statutes, section 447.34,
49.14must not be levied at a rate that exceeds the amount authorized to be levied under that
49.15section. The proceeds of the tax may be used for all purposes of the hospital district,
49.16except as provided in paragraph (b).
49.17    (b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used
49.18solely by the Cook ambulance service and the Orr ambulance service for the purpose of
49.19capital expenditures as it relates to:
49.20    (1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance
49.21service and not;
49.22    (2) attached and portable equipment for use in and for the ambulances; and
49.23    (3) parts and replacement parts for maintenance and repair of the ambulances.
49.24The money may not be used for administrative, operation, or salary expenses.
49.25    (c) The part of the levy referred to in paragraph (b) must be administered by the
49.26Cook Hospital and passed on in equal amounts directly to the Cook area ambulance
49.27service board and the city of Orr to be held in trust until funding for a new ambulance is
49.28needed by either the Cook ambulance service or the Orr ambulance service used for the
49.29purposes in paragraph (b).

49.30    Sec. 20. Laws 1999, chapter 243, article 6, section 11, is amended to read:
49.31    Sec. 11. CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.
50.1    Subdivision 1. Levy authorized. Notwithstanding other law to the contrary, the
50.2Carlton county board of commissioners may annually levy in and for the unorganized
50.3township territory of Sawyer an amount up to $1,000 annually for cemetery purposes,
50.4beginning with taxes payable in 2000 and ending with taxes payable in 2009.
50.5    Subd. 2. Effective date. This section is effective June 1, 1999, without local
50.6approval.
50.7EFFECTIVE DATE; LOCAL APPROVAL.This section applies to taxes
50.8payable in 2014 and thereafter, and is effective the day after the Carlton county board
50.9of commissioners and its chief clerical officer timely complete their compliance with
50.10Minnesota Statutes, section 645.021, subdivisions 2 and 3.

50.11    Sec. 21. Laws 2008, chapter 366, article 5, section 33, the effective date, is amended to
50.12read:
50.13EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in
50.142009, and is repealed effective for taxes levied in 2013 2018, payable in 2014 2019,
50.15and thereafter.
50.16EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.

50.17    Sec. 22. Laws 2010, chapter 389, article 1, section 12, the effective date, is amended to
50.18read:
50.19EFFECTIVE DATE.This section is effective for assessment years year 2010 and
50.202011, for taxes payable in 2011 and 2012 thereafter.
50.21EFFECTIVE DATE.This section is effective for assessment year 2012 and
50.22thereafter.

50.23    Sec. 23. MINNEAPOLIS AND ST. PAUL; ENTERTAINMENT FACILITIES
50.24COORDINATION.
50.25    (a) On or before January 1, 2015, the cities of St. Paul and Minneapolis shall establish
50.26a joint governing structure to coordinate and provide for joint marketing, promotion, and
50.27scheduling of conventions and events at the Target Center and Xcel Energy Center.
50.28    (b) On or before February 1, 2014, the cities of St. Paul and Minneapolis, and
50.29representatives from the primary professional sports team tenant of each facility, shall also
50.30study and report to the legislature on creating a joint governing structure to provide for
50.31joint administration, financing, and operations of the facilities and the possible effects of
51.1joint governance on the finances of each facility and each city. The study under this
51.2paragraph must:
51.3    (1) examine the current finances of each facility, including past and projected costs
51.4and revenues; projected capital improvements; and the current and projected impact
51.5of each facility on the city's general fund;
51.6    (2) determine the impacts of joint governance on the future finances of each facility
51.7and city;
51.8    (3) examine the inclusion of other entertainment venues in the joint governance, and
51.9the impact the inclusion of those facilities would have on all the facilities within the joint
51.10governing structure and the cities in which they are located; and
51.11    (4) consider the amount of city, regional, and state funding, if any, that would be
51.12required to fund and operate the facilities under a joint governing structure.
51.13    (c) In considering joint governing structures under paragraph (b), the study shall
51.14specifically consider the feasibility of joining the Target Center and the Xcel Energy
51.15Center, and possibly other venues, to the Minnesota Sports Facilities Authority under
51.16Minnesota Statutes, section 473J.08.
51.17    (d) Representatives of the cities and the primary professional sports team tenants
51.18of each facility shall meet within 30 days of the effective date of this section to begin
51.19implementation of this section.
51.20EFFECTIVE DATE.This section is effective the day following final enactment
51.21upon compliance with the provisions of Minnesota Statutes, section 645.021, subdivisions
51.222 and 3, by the governing bodies of the cities of St. Paul and Minneapolis and their chief
51.23clerical officers, and provided that, notwithstanding the time limits under Minnesota
51.24Statutes, section 645.021, subdivision 3, the certificates of approval are filed with the
51.25secretary of state within 30 days after enactment of this act.

51.26    Sec. 24. MORATORIUM ON CHANGES IN ASSESSMENT PRACTICE.
51.27    (a) An assessor may not deviate from current practices or policies used generally in
51.28assessing or determining the taxable status of property used in the production of biofuels,
51.29wine, beer, distilled beverages, or dairy products.
51.30    (b) An assessor may not change the taxable status of any existing property involved
51.31in the industrial processes identified in paragraph (a), unless the change is made as a result
51.32of a change in use of the property, or to correct an error. For currently taxable properties,
51.33the assessor may change the estimated market value of the property.
51.34EFFECTIVE DATE.This section is effective for assessment year 2013 only.

52.1    Sec. 25. STUDY AND REPORT ON CERTAIN PROPERTY USED IN
52.2BUSINESS AND PRODUCTION.
52.3In order to provide the legislature with information on the assessment of property
52.4used in business and production activities, the commissioner of revenue must study the
52.5impact of the exception contained in Minnesota Statutes, section 272.03, subdivision
52.61(c)(iii). The commissioner must report a summary of findings and recommendations to
52.7the chairs and ranking minority members of the taxes committees of the senate and house
52.8of representatives by February 1, 2014.
52.9EFFECTIVE DATE.This section is effective the day following final enactment.

52.10    Sec. 26. REIMBURSEMENT FOR PROPERTY TAX ABATEMENTS.
52.11    Subdivision 1. Reimbursement. The commissioner of revenue shall reimburse
52.12taxing jurisdictions for property tax abatements granted in Hennepin County under Laws
52.132011, First Special Session chapter 7, article 5, section 13, notwithstanding the time limits
52.14contained in that section. The reimbursements must be made to each taxing jurisdiction
52.15pursuant to the certification of the Hennepin County auditor.
52.16    Subd. 2. Appropriation. The amount necessary, not to exceed $400,000, is
52.17appropriated to the commissioner of revenue from the general fund to make the payments
52.18required under this section. This appropriation does not cancel but is available until June
52.1930, 2014.
52.20EFFECTIVE DATE.This section is effective the day following final enactment.

52.21    Sec. 27. IRON RANGE FISCAL DISPARITIES STUDY.
52.22    Subdivision 1. Study required. The commissioner of revenue shall conduct a study
52.23of the tax relief area revenue distribution program contained in Minnesota Statutes, chapter
52.24276A, commonly known as the Iron Range fiscal disparities program. By February 1,
52.252015, the commissioner shall submit a report to the chairs and ranking minority members
52.26of the house of representatives and senate tax committees consisting of the findings of the
52.27study and identification of issues for policy makers to consider. The study must analyze:
52.28    (1) the extent to which the benefits of the economic growth in the region are shared
52.29throughout the region, especially for growth that results from state or regional decisions;
52.30    (2) the program's impact on the variability of tax rates across jurisdictions of the
52.31region;
52.32    (3) the program's impact on the distribution of homestead property tax burdens
52.33across jurisdictions of the region; and
53.1    (4) the relationship between the impacts of the program and overburden on
53.2jurisdictions containing properties that provide regional benefits, specifically the costs
53.3those properties impose on their host jurisdictions in excess of their tax payments. The
53.4report must include a description of other property tax, aid, and local development
53.5programs that interact with the fiscal disparities program.
53.6    Subd. 2. Funds transfer from fiscal disparities levy. For taxes payable in 2014
53.7only, $75,000 must be added to St. Louis County's areawide levy as otherwise determined
53.8under Minnesota Statutes, section 276A.06, subdivision 5. Upon receipt of the proceeds of
53.9this levy, St. Louis County must transfer this money to the commissioner of management
53.10and budget for deposit into an account in the special revenue fund. One-half of the
53.11proceeds of the levy must be transferred prior to June 30, 2014.
53.12    Subd. 3. Appropriation. $37,500 in fiscal year 2014 and $37,500 in fiscal year
53.132015 are appropriated from the account in the special revenue fund established under
53.14subdivision 2 to the commissioner of revenue to pay for the study required by this section.
53.15Any amounts remaining in the account in the special revenue fund on June 30, 2015, must
53.16be distributed to St. Louis County for the purposes of reducing the areawide tax rate
53.17for taxes payable in 2016.
53.18EFFECTIVE DATE.This section is effective July 1, 2013.

53.19    Sec. 28. REPEALER.
53.20(a) Minnesota Statutes 2012, sections 428A.101; and 428A.21, are repealed.
53.21(b) Minnesota Statutes 2012, sections 383A.80, subdivision 4; and 383B.80,
53.22subdivision 4, are repealed.
53.23EFFECTIVE DATE.This section is effective the day following final enactment,
53.24and paragraph (b) reinstates the authority for Hennepin and Ramsey Counties to
53.25impose the additional mortgage registry and deed tax effective for deeds and mortgages
53.26acknowledged on or after July 1, 2013.


53.29    Section 1. Minnesota Statutes 2012, section 270C.56, subdivision 1, is amended to read:
53.30    Subdivision 1. Liability imposed. A person who, either singly or jointly with
53.31others, has the control of, supervision of, or responsibility for filing returns or reports,
53.32paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
53.33person who is liable under any other law, is liable for the payment of taxes arising under
54.1chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658, 290.92, and 297E.02,
54.2and the applicable penalties and interest on those taxes.
54.3EFFECTIVE DATE.This section is effective July 1, 2013.

54.4    Sec. 2. [295.61] SPORTS MEMORABILIA GROSS RECEIPTS TAX.
54.5    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
54.6have the meanings given, unless the context clearly indicates otherwise.
54.7(b) "Commissioner" means the commissioner of revenue.
54.8(c) "Sale" means a transfer of title or possession of tangible personal property,
54.9whether absolutely or conditionally.
54.10(d) "Sports memorabilia" means items available for sale to the public that are sold
54.11under a license granted by any professional sports league or a team that is a franchise of a
54.12professional sports league, or an affiliate or subsidiary of a league or a team, including:
54.13(1) one-of-a-kind items related to sports figures, teams, or events;
54.14(2) trading cards;
54.15(3) photographs;
54.16(4) clothing;
54.17(5) sports event licensed items;
54.18(6) sports equipment; and
54.19(7) similar items.
54.20(e) "Wholesale" or "sale at wholesale" means a sale to a retailer, as defined in section
54.21297A.61, subdivision 9, for the purpose of reselling the property to a third party.
54.22(f) "Wholesaler" means any person making wholesale sales of sports memorabilia
54.23to purchasers in the state.
54.24    Subd. 2. Imposition. A tax is imposed on each sale at wholesale of sports
54.25memorabilia equal to ten percent of the gross revenues from the sale.
54.26    Subd. 3. Estimated payments; annual return. (a) Each wholesaler must make
54.27estimated payments of the tax for the calendar year to the commissioner in quarterly
54.28installments by April 15, July 15, October 15, and January 15 of the following calendar
54.29year. Estimated tax payments are not required if the tax for the calendar year is less than
54.30$500. An underpayment of estimated installments bears interest at the rate specified in
54.31section 270C.40, from the due date of the payment until paid or until the due date of the
54.32annual return at the rate specified in section 270C.40. An underpayment of an estimated
54.33installment is the difference between the amount paid and the lesser of (1) 90 percent of
54.34one-quarter of the tax for the calendar year, or (2) the tax for the actual gross revenues
54.35received during the quarter.
55.1(b) A taxpayer with an aggregate tax liability of $10,000 or more during a fiscal
55.2year ending June 30, must remit all liabilities by funds transfer as defined in section
55.3336.4A-104, paragraph (a), in the next calendar year. The funds-transfer payment date,
55.4as defined in section 336.4A-401, is on or before the first funds-transfer business day
55.5after the date the tax is due.
55.6(c) The taxpayer must file an annual return reconciling the estimated payments by
55.7March 15 of the following calendar year.
55.8(d) The estimated payments and annual return must contain the information and be
55.9in the form prescribed by the commissioner.
55.10    Subd. 4. Compensating use tax. If the tax is not paid under subdivision 2, a
55.11compensating tax is imposed on possession for sale or use of sports memorabilia in
55.12the state. The rate of tax equals the rate under subdivision 2, and must be paid by the
55.13possessor of the items.
55.14    Subd. 5. Administrative provisions. Unless specifically provided otherwise by this
55.15section, the audit, assessment, refund, penalty, interest, enforcement, collection remedies,
55.16appeal, and administrative provisions of chapters 270C and 289A that apply to taxes
55.17imposed under chapter 297A apply to taxes imposed under this section.
55.18    Subd. 6. Disposition of revenues. The commissioner shall deposit the revenues
55.19from the tax in the general fund.
55.20EFFECTIVE DATE.This section is effective for sales made after June 30, 2013.

55.21    Sec. 3. Minnesota Statutes 2012, section 297F.01, subdivision 3, is amended to read:
55.22    Subd. 3. Cigarette. "Cigarette" means any roll for smoking made wholly or in part
55.23of tobacco, that weighs 4.5 pounds or less per thousand:
55.24(1) the wrapper or cover of which is made of paper or another substance or material
55.25except tobacco; or
55.26(2) wrapped in any substance containing tobacco, however labeled or named, which,
55.27because of its appearance, size, the type of tobacco used in the filler, or its packaging,
55.28pricing, marketing, or labeling, is likely to be offered to or purchased by consumers as
55.29a cigarette, as defined in clause (1), unless it is wrapped in whole tobacco leaf and does
55.30not have a cellulose acetate or other cigarette-like filter.
55.31EFFECTIVE DATE.This section is effective July 1, 2013.

55.32    Sec. 4. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision
55.33to read:
56.1    Subd. 10b. Moist snuff. "Moist snuff" means any finely cut, ground, or powdered
56.2smokeless tobacco that is intended to be placed or dipped in the mouth.

56.3    Sec. 5. Minnesota Statutes 2012, section 297F.01, subdivision 19, is amended to read:
56.4    Subd. 19. Tobacco products. "Tobacco products" means any product containing,
56.5made, or derived from tobacco that is intended for human consumption, whether chewed,
56.6smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means,
56.7or any component, part, or accessory of a tobacco product, including, but not limited
56.8to, cigars; little cigars; cheroots; stogies; periques; granulated, plug cut, crimp cut,
56.9ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug and twist
56.10tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings, cuttings
56.11and sweepings of tobacco, and other kinds and forms of tobacco; but does not include
56.12cigarettes as defined in this section. Tobacco products excludes any tobacco product
56.13that has been approved by the United States Food and Drug Administration for sale as
56.14a tobacco cessation product, as a tobacco dependence product, or for other medical
56.15purposes, and is being marketed and sold solely for such an approved purpose.
56.16EFFECTIVE DATE.This section is effective July 1, 2013.

56.17    Sec. 6. Minnesota Statutes 2012, section 297F.05, subdivision 1, is amended to read:
56.18    Subdivision 1. Rates; cigarettes. A tax is imposed upon the sale of cigarettes in
56.19this state, upon having cigarettes in possession in this state with intent to sell, upon any
56.20person engaged in business as a distributor, and upon the use or storage by consumers, at
56.21the following rates:
56.22(1) on cigarettes weighing not more than three pounds per thousand, 24 141.5 mills
56.23on each such cigarette; and
56.24(2) on cigarettes weighing more than three pounds per thousand, 48 283 mills on
56.25each such cigarette.
56.26EFFECTIVE DATE.This section is effective July 1, 2013.

56.27    Sec. 7. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
56.28to read:
56.29    Subd. 1a. Annual indexing. (a) Each year the commissioner shall adjust the
56.30tax rates under subdivision 1, including any adjustment made in prior years under this
56.31subdivision, by multiplying the mill rates for the current calendar year by an adjustment
56.32factor. The adjustment factor equals the in-lieu sales tax rate that applies to the following
57.1calendar year divided by the in-lieu sales tax rate for the current calendar year. For
57.2purposes of this subdivision, "in-lieu sales tax rate" means the tax rate established under
57.3section 297F.25, subdivision 1, in tenths of a cent per pack.
57.4    (b) The commissioner shall publish the resulting rate by November 1 and the rate
57.5applies to sales made on or after January 1 of the following year.
57.6(c) The determination of the commissioner under this subdivision is not a rule and is
57.7not subject to the Administrative Procedure Act in chapter 14.

57.8    Sec. 8. Minnesota Statutes 2012, section 297F.05, subdivision 3, is amended to read:
57.9    Subd. 3. Rates; tobacco products. (a) A tax is imposed upon all tobacco products
57.10in this state and upon any person engaged in business as a distributor, at the rate of 35
57.11 95 percent of the wholesale sales price of the tobacco products. The tax is imposed at
57.12the time the distributor:
57.13(1) brings, or causes to be brought, into this state from outside the state tobacco
57.14products for sale;
57.15(2) makes, manufactures, or fabricates tobacco products in this state for sale in
57.16this state; or
57.17(3) ships or transports tobacco products to retailers in this state, to be sold by those
57.18retailers.
57.19(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a
57.20pack of 20 cigarettes weighing not more than three pounds per thousand, as established
57.21under subdivision 1, is imposed on each container of moist snuff.
57.22For purposes of this subdivision, a "container" means the smallest consumer-size can,
57.23package, or other container that is marketed or packaged by the manufacturer, distributor,
57.24or retailer for separate sale to a retail purchaser.
57.25EFFECTIVE DATE.This section is effective July 1, 2013, except the minimum
57.26tax under paragraph (b) is effective January 1, 2014.

57.27    Sec. 9. Minnesota Statutes 2012, section 297F.05, subdivision 4, is amended to read:
57.28    Subd. 4. Use tax; tobacco products. A tax is imposed upon the use or storage by
57.29consumers of tobacco products in this state, and upon such consumers, at the rate of 35 95
57.30 percent of the cost to the consumer of the tobacco products or the minimum tax under
57.31subdivision 3, paragraph (b), whichever is greater.
57.32EFFECTIVE DATE.This section is effective July 1, 2013.

58.1    Sec. 10. Minnesota Statutes 2012, section 297F.24, subdivision 1, is amended to read:
58.2    Subdivision 1. Fee imposed. (a) A fee is imposed upon the sale of nonsettlement
58.3cigarettes in this state, upon having nonsettlement cigarettes in possession in this state
58.4with intent to sell, upon any person engaged in business as a distributor, and upon the use
58.5or storage by consumers of nonsettlement cigarettes. The fee equals a rate of 1.75 2.5
58.6cents per cigarette.
58.7(b) The purpose of this fee is to:
58.8(1) ensure that manufacturers of nonsettlement cigarettes pay fees to the state that
58.9are comparable to costs attributable to the use of the cigarettes;
58.10(2) prevent manufacturers of nonsettlement cigarettes from undermining the state's
58.11policy of discouraging underage smoking by offering nonsettlement cigarettes at prices
58.12substantially below the cigarettes of other manufacturers; and
58.13(3) fund such other purposes as the legislature determines appropriate.

58.14    Sec. 11. Minnesota Statutes 2012, section 297F.25, subdivision 1, is amended to read:
58.15    Subdivision 1. Imposition. (a) A tax is imposed on distributors on the sale of
58.16cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this
58.17state. The tax is equal to 6.5 percent of the combined tax rate under section 297A.62,
58.18multiplied by the weighted average retail price and must be expressed in cents per pack
58.19rounded to the nearest one-tenth of a cent. The weighted average retail price must be
58.20determined annually, with new rates published by November 1, and effective for sales
58.21on or after January 1 of the following year. The weighted average retail price must be
58.22established by surveying cigarette retailers statewide in a manner and time determined by
58.23the commissioner. The commissioner shall make an inflation adjustment in accordance
58.24with the Consumer Price Index for all urban consumers inflation indicator as published in
58.25the most recent state budget forecast. The commissioner shall use the inflation factor for
58.26the calendar year in which the new tax rate takes effect. If the survey indicates that the
58.27average retail price of cigarettes has not increased relative to the average retail price in
58.28the previous year's survey, then the commissioner shall not make an inflation adjustment.
58.29The determination of the commissioner pursuant to this subdivision is not a "rule" and is
58.30not subject to the Administrative Procedure Act contained in chapter 14. For packs of
58.31cigarettes with other than 20 cigarettes, the tax must be adjusted proportionally.
58.32(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the
58.33tax calculation of the weighted average retail price for the sales of cigarettes from August
58.341, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average
58.35retail price per pack of 20 cigarettes from the most recent survey by the percentage change
59.1in a weighted average of the presumed legal prices for cigarettes during the year after
59.2completion of that survey, as reported and published by the Department of Commerce
59.3under section 325D.371; (2) subtracting the sales tax included in the retail price; and (3)
59.4adjusting for expected inflation. The rate must be published by May 1 and is effective for
59.5sales after July 31. If the weighted average of the presumed legal prices indicates that the
59.6average retail price of cigarettes has not increased relative to the average retail price in the
59.7most recent survey, then no inflation adjustment must be made. For packs of cigarettes
59.8with other than 20 cigarettes, the tax must be adjusted proportionally.
59.9EFFECTIVE DATE.This section is effective July 1, 2013.

59.10    Sec. 12. Minnesota Statutes 2012, section 297G.03, subdivision 1, is amended to read:
59.11    Subdivision 1. General rate; distilled spirits and wine. The following excise tax is
59.12imposed on all distilled spirits and wine manufactured, imported, sold, or possessed in
59.13this state:

59.14			Standard		Metric
59.15 59.16 59.17	(a) Distilled spirits, liqueurs, cordials, and specialties regardless of alcohol content (excluding ethyl alcohol)	$	5.03 11.02 per gallon	$	1.33 2.91 per liter
59.18 59.19 59.20 59.21	(b) Wine containing 14 percent or less alcohol by volume (except cider as defined in section 297G.01, subdivision 3a )	$	.30 2.08 per gallon	$	.08 .55 per liter
59.22 59.23 59.24	(c) Wine containing more than 14 percent but not more than 21 percent alcohol by volume	$	.95 2.73 per gallon	$	.25 .72 per liter
59.25 59.26 59.27	(d) Wine containing more than 21 percent but not more than 24 percent alcohol by volume	$	1.82 3.64 per gallon	$	.48 .97 per liter
59.28 59.29	(e) Wine containing more than 24 percent alcohol by volume	$	3.52 5.34 per gallon	$	.93 1.42 per liter
59.30 59.31	(f) Natural and artificial sparkling wines containing alcohol	$	1.82 3.60 per gallon	$	.48 .95 per liter
59.32 59.33	(g) Cider as defined in section 297G.01, subdivision 3a	$	.15 1.93 per gallon	$	.04 .51 per liter
59.34 59.35	(h) Low-alcohol dairy cocktails	$	.08 1.36 per gallon	$	.02 .36 per liter

59.36In computing the tax on a package of distilled spirits or wine, a proportional tax at a
59.37like rate on all fractional parts of a gallon or liter must be paid, except that the tax on a
59.38fractional part of a gallon less than 1/16 of a gallon is the same as for 1/16 of a gallon.
59.39EFFECTIVE DATE.This section is effective July 1, 2013.

60.1    Sec. 13. Minnesota Statutes 2012, section 297G.03, is amended by adding a
60.2subdivision to read:
60.3    Subd. 5. Small winery credit. (a) A qualified winery is entitled to a tax credit of
60.4$2.08 per gallon on 50,000 gallons sold in any fiscal year beginning July 1. Qualified
60.5wineries may take the credit on the 18th day of each month, but the total credit allowed
60.6may not exceed in any fiscal year the lesser of:
60.7(1) the liability for tax; or
60.8(2) $104,000.
60.9(b) For purposes of this subdivision, a "qualified winery" means a winery, whether
60.10or not located in this state, producing less than 100,000 gallons of wine in the calendar
60.11year immediately preceding the calendar year for which the credit under this subdivision
60.12is claimed. In determining the number of gallons, all brands or labels of a winery must
60.13be combined. All facilities for the production of wine owned or controlled by the same
60.14person, corporation, or other entity must be treated as a single winery.
60.15EFFECTIVE DATE.This section is effective July 1, 2013.

60.16    Sec. 14. Minnesota Statutes 2012, section 297G.04, is amended to read:
60.17297G.04 FERMENTED MALT BEVERAGES; RATE OF TAX.
60.18    Subdivision 1. Tax imposed. The following excise tax is imposed on all fermented
60.19malt beverages that are imported, directly or indirectly sold, or possessed in this state:
60.20(1) on fermented malt beverages containing not more than 3.2 percent alcohol by
60.21weight, $2.40 $25.55 per 31-gallon barrel; and
60.22(2) on fermented malt beverages containing more than 3.2 percent alcohol by
60.23weight, $4.60 $27.75 per 31-gallon barrel.
60.24For fractions of a 31-gallon barrel, the tax rate is calculated proportionally.
60.25    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages is
60.26entitled to a tax credit of $4.60 $27.75 per barrel on 25,000 50,000 barrels sold in any
60.27fiscal year beginning July 1, regardless of the alcohol content of the product. Qualified
60.28brewers may take the credit on the 18th day of each month, but the total credit allowed
60.29may not exceed in any fiscal year the lesser of:
60.30(1) the liability for tax; or
60.31(2) $115,000 $1,387,500.
60.32For purposes of this subdivision, a "qualified brewer" means a brewer, whether or
60.33not located in this state, manufacturing less than 100,000 200,000 barrels of fermented
60.34malt beverages in the calendar year immediately preceding the calendar year for which
61.1the credit under this subdivision is claimed. In determining the number of barrels, all
61.2brands or labels of a brewer must be combined. All facilities for the manufacture of
61.3fermented malt beverages owned or controlled by the same person, corporation, or other
61.4entity must be treated as a single brewer.
61.5EFFECTIVE DATE.This section is effective July 1, 2013.

61.6    Sec. 15. Minnesota Statutes 2012, section 325D.32, subdivision 2, is amended to read:
61.7    Subd. 2. Cigarettes. "Cigarettes" means and includes any roll for smoking, made
61.8wholly or in part of tobacco, irrespective of size and shape and whether or not such
61.9tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover
61.10of which is made of paper or any other substance or material except whole tobacco leaf,
61.11and includes any cigarette as defined in section 297F.01, subdivision 3.
61.12EFFECTIVE DATE.This section is effective July 1, 2013.

61.13    Sec. 16. FLOOR STOCKS TAX.
61.14    Subdivision 1. Cigarettes. (a) A floor stocks tax is imposed on every person
61.15engaged in the business in this state as a distributor, retailer, subjobber, vendor,
61.16manufacturer, or manufacturer's representative of cigarettes, on the stamped cigarettes and
61.17unaffixed stamps in the person's possession or under the person's control at 12:01 a.m. on
61.18July 1, 2013. The tax is imposed at the rate of 80 mills on each cigarette.
61.19(b) Each distributor, on or before July 11, 2013, shall file a return with the
61.20commissioner of revenue, in the form the commissioner prescribes, showing the stamped
61.21cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2013, and the amount
61.22of tax due on the cigarettes and unaffixed stamps. Each retailer, subjobber, vendor,
61.23manufacturer, or manufacturer's representative, on or before July 11, 2013, shall file
61.24a return with the commissioner, in the form the commissioner prescribes, showing the
61.25cigarettes on hand at 12:01 a.m. on July 1, 2013, and the amount of tax due on the
61.26cigarettes. The tax imposed by this section is due and payable on or before August 8,
61.272013, and after that date bears interest at the rate of one percent per month.
61.28    Subd. 2. Audit and enforcement. The tax imposed by this section is subject to
61.29the audit, assessment, interest, appeal, refund, penalty, enforcement, administrative, and
61.30collection provisions of Minnesota Statutes, chapters 270C and 297F. The commissioner
61.31of revenue may require a distributor to receive and maintain copies of floor stocks fee
61.32returns filed by all persons requesting a credit for returned cigarettes.
62.1    Subd. 3. Deposit of proceeds. The commissioner of revenue shall deposit the
62.2revenues from the tax under this section in the state treasury and credit them to the
62.3general fund.
62.4EFFECTIVE DATE.This section is effective July 1, 2013.

62.5    Sec. 17. INTERIM SALES TAX RATE.
62.6Notwithstanding the provisions of Minnesota Statutes, section 297F.25, the
62.7commissioner shall adjust the weighted average retail price in section 297F.25, subdivision
62.81, on July 1, 2013, to reflect the price changes under this act. This weighted average
62.9shall be used to compute cigarette sales tax under Minnesota Statutes, section 297F.25,
62.10subdivision 1, until December 31, 2013, when the commissioner shall resume annual
62.11adjustments to the weighted average sales price. The commissioner's determination of
62.12the adjustment that takes effect on January 1, 2014, must be limited to the change in the
62.13weighted average retail that occurs during calendar year 2013 but after July 15, 2013.
62.14EFFECTIVE DATE.This section is effective July 1, 2013.

62.15    Sec. 18. TOBACCO TAX COLLECTION REPORT.
62.16    Subdivision 1. Report to legislature. (a) The commissioner of revenue shall report
62.17to the 2014 legislature on the tobacco tax collection system, including recommendations
62.18to improve compliance under the excise tax for both cigarettes and other tobacco products.
62.19The purpose of the report is to provide information and guidance to the legislature on
62.20improvements to the tobacco tax collection system to:
62.21(1) provide a unified system of collecting both the cigarette and other tobacco
62.22taxes, regardless of category, size, or shape, that ensures the highest reasonable rates of
62.23tax collection;
62.24(2) discourage tax evasion; and
62.25(3) help to prevent illegal sale of tobacco products, which may make these products
62.26more accessible to youth.
62.27(b) In the report, the commissioner shall:
62.28(1) provide a detailed review of the present excise tax collection and compliance
62.29system as it applies to both cigarettes and other tobacco products. This must include
62.30an assessment of the levels of compliance for each category of products and the effect
62.31of the stamping requirement on compliance for each category of products and the effect
62.32of the stamping requirement on compliance rates for cigarettes relative to other tobacco
62.33products. It also must identify any weaknesses in the system;
63.1(2) survey the methods of collection and enforcement used by other states or nations,
63.2including identifying and discussing emerging best practices that ensure tracking of both
63.3cigarettes and other tobacco products and result in the highest rates of tax collection and
63.4compliance. These best practices must consider high-technology alternatives, such as use
63.5of bar codes, radio-frequency identification tags, or similar mechanisms for tracking
63.6compliance;
63.7(3) evaluate the adequacy and effectiveness of the existing penalties and other
63.8sanctions for noncompliance;
63.9(4) evaluate the adequacy of the resources allocated by the state to enforce the
63.10tobacco tax and prevention laws; and
63.11(5) make recommendations on implementation of a comprehensive tobacco tax
63.12collection system for Minnesota that can be implemented by January 1, 2014, including:
63.13(i) recommendations on the specific steps needed to institute and implement the new
63.14system, including estimates of the state's costs of doing so and any additional personnel
63.15requirements;
63.16(ii) recommendations on methods to recover the cost of implementing the system
63.17from the industry;
63.18(iii) evaluation of the extent to which the proposed system is sufficiently flexible
63.19and adaptable to adjust to modifications in the construction, packaging, formatting, and
63.20marketing of tobacco products by the industry; and
63.21(iv) recommendations to modify existing penalties or to impose new penalties or
63.22other sanctions to ensure compliance with the system.
63.23    Subd. 2. Due date. The report required by subdivision 1 is due January 1, 2014.
63.24    Subd. 3. Procedure. The report required under this section must be made in the
63.25manner provided under Minnesota Statutes, section 3.195. In addition, copies must be
63.26provided to the chairs and ranking minority members of the legislative committees and
63.27divisions with jurisdiction over taxation.
63.28    Subd. 4. Appropriation. (a) $100,000 is appropriated from the general fund to the
63.29commissioner of revenue for fiscal year 2014 for the cost of preparing the report under
63.30subdivision 1.
63.31(b) The appropriation under this subdivision is a onetime appropriation and is not
63.32included in the base budget.
63.33EFFECTIVE DATE.This section is effective the day following final enactment.

64.1    Sec. 19. REPEALER.
64.2Minnesota Statutes 2012, sections 16A.725; and 256.9658, are repealed.
64.3EFFECTIVE DATE.This section is effective July 1, 2013.


64.6    Section 1. Minnesota Statutes 2012, section 116J.8737, subdivision 1, is amended to
64.7read:
64.8    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
64.9have the meanings given.
64.10(b) "Qualified small business" means a business that has been certified by the
64.11commissioner under subdivision 2.
64.12(c) "Qualified investor" means an investor who has been certified by the
64.13commissioner under subdivision 3.
64.14(d) "Qualified fund" means a pooled angel investment network fund that has been
64.15certified by the commissioner under subdivision 4.
64.16(e) "Qualified investment" means a cash investment in a qualified small business
64.17of a minimum of:
64.18(1) $10,000 in a calendar year by a qualified investor; or
64.19(2) $30,000 in a calendar year by a qualified fund.
64.20A qualified investment must be made in exchange for common stock, a partnership
64.21or membership interest, preferred stock, debt with mandatory conversion to equity, or an
64.22equivalent ownership interest as determined by the commissioner.
64.23(f) "Family" means a family member within the meaning of the Internal Revenue
64.24Code, section 267(c)(4).
64.25(g) "Pass-through entity" means a corporation that for the applicable taxable year is
64.26treated as an S corporation or a general partnership, limited partnership, limited liability
64.27partnership, trust, or limited liability company and which for the applicable taxable year is
64.28not taxed as a corporation under chapter 290.
64.29(h) "Intern" means a student of an accredited institution of higher education, or a
64.30former student who has graduated in the past six months from an accredited institution
64.31of higher education, who is employed by a qualified small business in a nonpermanent
64.32position for a duration of nine months or less that provides training and experience in the
64.33primary business activity of the business.
65.1(i) "Liquidation event" means a conversion of qualified investment for cash, cash
65.2and other consideration, or any other form of equity or debt interest.
65.3EFFECTIVE DATE.This section is effective for qualified small businesses
65.4certified after June 30, 2013.

65.5    Sec. 2. Minnesota Statutes 2012, section 116J.8737, subdivision 2, is amended to read:
65.6    Subd. 2. Certification of qualified small businesses. (a) Businesses may apply
65.7to the commissioner for certification as a qualified small business for a calendar year.
65.8The application must be in the form and be made under the procedures specified by the
65.9commissioner, accompanied by an application fee of $150. Application fees are deposited
65.10in the small business investment tax credit administration account in the special revenue
65.11fund. The application for certification for 2010 must be made available on the department's
65.12Web site by August 1, 2010. Applications for subsequent years' certification must be made
65.13available on the department's Web site by November 1 of the preceding year.
65.14(b) Within 30 days of receiving an application for certification under this subdivision,
65.15the commissioner must either certify the business as satisfying the conditions required of a
65.16qualified small business, request additional information from the business, or reject the
65.17application for certification. If the commissioner requests additional information from the
65.18business, the commissioner must either certify the business or reject the application within
65.1930 days of receiving the additional information. If the commissioner neither certifies the
65.20business nor rejects the application within 30 days of receiving the original application or
65.21within 30 days of receiving the additional information requested, whichever is later, then
65.22the application is deemed rejected, and the commissioner must refund the $150 application
65.23fee. A business that applies for certification and is rejected may reapply.
65.24(c) To receive certification, a business must satisfy all of the following conditions:
65.25(1) the business has its headquarters in Minnesota;
65.26(2) at least 51 percent of the business's employees are employed in Minnesota, and
65.2751 percent of the business's total payroll is paid or incurred in the state;
65.28(3) the business is engaged in, or is committed to engage in, innovation in Minnesota
65.29in one of the following as its primary business activity:
65.30(i) using proprietary technology to add value to a product, process, or service in a
65.31qualified high-technology field;
65.32(ii) researching or developing a proprietary product, process, or service in a qualified
65.33high-technology field; or
65.34(iii) researching, developing, or producing a new proprietary technology for use in
65.35the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;
66.1(4) other than the activities specifically listed in clause (3), the business is not
66.2engaged in real estate development, insurance, banking, lending, lobbying, political
66.3consulting, information technology consulting, wholesale or retail trade, leisure,
66.4hospitality, transportation, construction, ethanol production from corn, or professional
66.5services provided by attorneys, accountants, business consultants, physicians, or health
66.6care consultants;
66.7(5) the business has fewer than 25 employees;
66.8(6) the business must pay its employees annual wages of at least 175 percent of the
66.9federal poverty guideline for the year for a family of four and must pay its interns annual
66.10wages of at least 175 percent of the federal minimum wage used for federally covered
66.11employers, except that this requirement must be reduced proportionately for employees
66.12and interns who work less than full-time, and does not apply to an executive, officer, or
66.13member of the board of the business, or to any employee who owns, controls, or holds
66.14power to vote more than 20 percent of the outstanding securities of the business;
66.15(7) the business has (i) not been in operation for more than ten years, or (ii) the
66.16business has not been in operation for more than 20 years if the business is engaged
66.17in the research, development, or production of medical devices or pharmaceuticals for
66.18which United States Food and Drug Administration approval is required for use in the
66.19treatment or diagnosis of a disease or condition;
66.20(8) the business has not previously received private equity investments of more
66.21than $4,000,000; and
66.22    (9) the business is not an entity disqualified under section 80A.50, paragraph (b),
66.23clause (3).; and
66.24(10) the business has not issued securities that are traded on a public exchange.
66.25(d) In applying the limit under paragraph (c), clause (5), the employees in all members
66.26of the unitary business, as defined in section 290.17, subdivision 4, must be included.
66.27(e) In order for a qualified investment in a business to be eligible for tax credits,:
66.28(1) the business must have applied for and received certification for the calendar
66.29year in which the investment was made prior to the date on which the qualified investment
66.30was made.;
66.31(2) the business must not have issued securities that are traded on a public exchange;
66.32(3) the business must not issue securities that are traded on a public exchange within
66.33180 days after the date on which the qualified investment was made; and
66.34(4) the business must not have a liquidation event within 180 days after the date on
66.35which the qualified investment was made.
67.1(f) The commissioner must maintain a list of businesses certified under this
67.2subdivision for the calendar year and make the list accessible to the public on the
67.3department's Web site.
67.4(g) For purposes of this subdivision, the following terms have the meanings given:
67.5(1) "qualified high-technology field" includes aerospace, agricultural processing,
67.6renewable energy, energy efficiency and conservation, environmental engineering, food
67.7technology, cellulosic ethanol, information technology, materials science technology,
67.8nanotechnology, telecommunications, biotechnology, medical device products,
67.9pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar
67.10fields; and
67.11(2) "proprietary technology" means the technical innovations that are unique and
67.12legally owned or licensed by a business and includes, without limitation, those innovations
67.13that are patented, patent pending, a subject of trade secrets, or copyrighted.
67.14EFFECTIVE DATE.This section is effective for qualified small businesses
67.15certified after June 30, 2013, except the amendments to paragraph (c), clause (7), are
67.16effective the day following final enactment.

67.17    Sec. 3. Minnesota Statutes 2012, section 116J.8737, subdivision 8, is amended to read:
67.18    Subd. 8. Data privacy. (a) Data contained in an application submitted to the
67.19commissioner under subdivision 2, 3, or 4 are nonpublic data, or private data on
67.20individuals, as defined in section 13.02, subdivision 9 or 12, except that the following
67.21data items are public:
67.22(1) the name, mailing address, telephone number, e-mail address, contact person's
67.23name, and industry type of a qualified small business upon approval of the application
67.24and certification by the commissioner under subdivision 2;
67.25(2) the name of a qualified investor upon approval of the application and certification
67.26by the commissioner under subdivision 3;
67.27(3) the name of a qualified fund upon approval of the application and certification
67.28by the commissioner under subdivision 4;
67.29(4) for credit certificates issued under subdivision 5, the amount of the credit
67.30certificate issued, amount of the qualifying investment, the name of the qualifying investor
67.31or qualifying fund that received the certificate, and the name of the qualifying small
67.32business in which the qualifying investment was made;
67.33(5) for credits revoked under subdivision 7, paragraph (a), the amount revoked and
67.34the name of the qualified investor or qualified fund; and
68.1(6) for credits revoked under subdivision 7, paragraphs (b) and (c), the amount
68.2revoked and the name of the qualified small business.
68.3(b) The following data, including data classified as nonpublic or private, must be
68.4provided to the consultant for use in conducting the program evaluation under subdivision
68.510:
68.6(1) the commissioner of employment and economic development shall provide data
68.7contained in an application for certification received from a qualified small business,
68.8qualified investor, or qualified fund, and any annual reporting information received on a
68.9qualified small business, qualified investor, or qualified fund; and
68.10(2) the commissioner of revenue shall provide data contained in any applicable tax
68.11returns of a qualified small business, qualified investor, or qualified fund.
68.12EFFECTIVE DATE.This section is effective the day following final enactment.

68.13    Sec. 4. Minnesota Statutes 2012, section 289A.02, subdivision 7, is amended to read:
68.14    Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal
68.15Revenue Code" means the Internal Revenue Code of 1986, as amended through April
68.1614, 2011 January 3, 2013.
68.17EFFECTIVE DATE.This section is effective the day following final enactment.

68.18    Sec. 5. Minnesota Statutes 2012, section 289A.08, subdivision 1, is amended to read:
68.19    Subdivision 1. Generally; individuals. (a) A taxpayer must file a return for each
68.20taxable year the taxpayer is required to file a return under section 6012 of the Internal
68.21Revenue Code, except that:
68.22(1) an individual who is not a Minnesota resident for any part of the year is not
68.23required to file a Minnesota income tax return if the individual's gross income derived
68.24from Minnesota sources as determined under sections 290.081, paragraph (a), and 290.17,
68.25is less than the filing requirements for a single individual who is a full year resident of
68.26Minnesota; and
68.27(2) an individual who is a Minnesota resident is not required to file a Minnesota
68.28income tax return if the individual's gross income derived from Minnesota sources as
68.29determined under section 290.17, less the subtraction allowed under section 290.01,
68.30subdivision 19b , clauses (11) and (14) (9) and (12), is less than the filing requirements for
68.31a single individual who is a full-year resident of Minnesota.
68.32(b) The decedent's final income tax return, and other income tax returns for prior
68.33years where the decedent had gross income in excess of the minimum amount at which
69.1an individual is required to file and did not file, must be filed by the decedent's personal
69.2representative, if any. If there is no personal representative, the return or returns must
69.3be filed by the transferees, as defined in section 270C.58, subdivision 3, who receive
69.4property of the decedent.
69.5(c) The term "gross income," as it is used in this section, has the same meaning
69.6given it in section 290.01, subdivision 20.

69.7    Sec. 6. Minnesota Statutes 2012, section 289A.08, subdivision 3, is amended to read:
69.8    Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
69.9tax under section 290.014, subdivision 5, must file a return, except that a foreign operating
69.10corporation as defined in section 290.01, subdivision 6b, is not required to file a return.
69.11(b) Members of a unitary business that are required to file a combined report on one
69.12return must designate a member of the unitary business to be responsible for tax matters,
69.13including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
69.14or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
69.15taxes lawfully due. The designated member must be a member of the unitary business that
69.16is filing the single combined report and either:
69.17(1) a corporation that is subject to the taxes imposed by chapter 290; or
69.18(2) a corporation that is not subject to the taxes imposed by chapter 290:
69.19(i) Such corporation consents by filing the return as a designated member under this
69.20clause to remit taxes, penalties, interest, or additions to tax due from the members of the
69.21unitary business subject to tax, and receive refunds or other payments on behalf of other
69.22members of the unitary business. The member designated under this clause is a "taxpayer"
69.23for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
69.24on the unitary business under this chapter and chapter 290.
69.25(ii) If the state does not otherwise have the jurisdiction to tax the member designated
69.26under this clause, consenting to be the designated member does not create the jurisdiction
69.27to impose tax on the designated member, other than as described in item (i).
69.28(iii) The member designated under this clause must apply for a business tax account
69.29identification number.
69.30(c) The commissioner shall adopt rules for the filing of one return on behalf of the
69.31members of an affiliated group of corporations that are required to file a combined report.
69.32All members of an affiliated group that are required to file a combined report must file one
69.33return on behalf of the members of the group under rules adopted by the commissioner.
70.1(d) If a corporation claims on a return that it has paid tax in excess of the amount of
70.2taxes lawfully due, that corporation must include on that return information necessary for
70.3payment of the tax in excess of the amount lawfully due by electronic means.
70.4EFFECTIVE DATE.This section is effective for taxable years beginning after
70.5December 31, 2012.

70.6    Sec. 7. Minnesota Statutes 2012, section 289A.08, subdivision 7, is amended to read:
70.7    Subd. 7. Composite income tax returns for nonresident partners, shareholders,
70.8and beneficiaries. (a) The commissioner may allow a partnership with nonresident
70.9partners to file a composite return and to pay the tax on behalf of nonresident partners who
70.10have no other Minnesota source income. This composite return must include the names,
70.11addresses, Social Security numbers, income allocation, and tax liability for the nonresident
70.12partners electing to be covered by the composite return.
70.13(b) The computation of a partner's tax liability must be determined by multiplying
70.14the income allocated to that partner by the highest rate used to determine the tax liability
70.15for individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
70.16deductions, or personal exemptions are not allowed.
70.17(c) The partnership must submit a request to use this composite return filing method
70.18for nonresident partners. The requesting partnership must file a composite return in the
70.19form prescribed by the commissioner of revenue. The filing of a composite return is
70.20considered a request to use the composite return filing method.
70.21(d) The electing partner must not have any Minnesota source income other than the
70.22income from the partnership and other electing partnerships. If it is determined that the
70.23electing partner has other Minnesota source income, the inclusion of the income and tax
70.24liability for that partner under this provision will not constitute a return to satisfy the
70.25requirements of subdivision 1. The tax paid for the individual as part of the composite return
70.26is allowed as a payment of the tax by the individual on the date on which the composite
70.27return payment was made. If the electing nonresident partner has no other Minnesota
70.28source income, filing of the composite return is a return for purposes of subdivision 1.
70.29(e) This subdivision does not negate the requirement that an individual pay estimated
70.30tax if the individual's liability would exceed the requirements set forth in section 289A.25.
70.31The individual's liability to pay estimated tax is, however, satisfied when the partnership
70.32pays composite estimated tax in the manner prescribed in section 289A.25.
70.33(f) If an electing partner's share of the partnership's gross income from Minnesota
70.34sources is less than the filing requirements for a nonresident under this subdivision, the tax
71.1liability is zero. However, a statement showing the partner's share of gross income must
71.2be included as part of the composite return.
71.3(g) The election provided in this subdivision is only available to a partner who has
71.4no other Minnesota source income and who is either (1) a full-year nonresident individual
71.5or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of
71.6the Internal Revenue Code.
71.7(h) A corporation defined in section 290.9725 and its nonresident shareholders may
71.8make an election under this paragraph. The provisions covering the partnership apply to
71.9the corporation and the provisions applying to the partner apply to the shareholder.
71.10(i) Estates and trusts distributing current income only and the nonresident individual
71.11beneficiaries of the estates or trusts may make an election under this paragraph. The
71.12provisions covering the partnership apply to the estate or trust. The provisions applying to
71.13the partner apply to the beneficiary.
71.14(j) For the purposes of this subdivision, "income" means the partner's share of
71.15federal adjusted gross income from the partnership modified by the additions provided in
71.16section 290.01, subdivision 19a, clauses (6) to (10) (9), and the subtractions provided in:
71.17(i) section 290.01, subdivision 19b, clause (8), to the extent the amount is assignable or
71.18allocable to Minnesota under section 290.17; and (ii) section 290.01, subdivision 19b,
71.19clause (13). The subtraction allowed under section 290.01, subdivision 19b, clause (8), is
71.20only allowed on the composite tax computation to the extent the electing partner would
71.21have been allowed the subtraction.

71.22    Sec. 8. Minnesota Statutes 2012, section 290.01, subdivision 5, is amended to read:
71.23    Subd. 5. Domestic corporation. The term "domestic" when applied to a corporation
71.24means a corporation:
71.25(1) created or organized in the United States, or under the laws of the United States or
71.26of any state, the District of Columbia, or any political subdivision of any of the foregoing
71.27but not including the Commonwealth of Puerto Rico, or any possession of the United States;
71.28(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
71.29Code; or
71.30(3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.
71.31    (2) which, regardless of the place where the corporation was incorporated:
71.32    (i) has the average of its property, payroll, and sales factors, as defined under section
71.33290.191, within the territorial limits of the 50 states of the United States and the District of
71.34Columbia of 20 percent or more; or
71.35    (ii) derives less than 80 percent of its income from foreign sources;
72.1(3) which is:
72.2(i) a foreign corporation, foreign partnership, or other foreign entity that has its
72.3income included in the federal taxable income, as defined in section 63 of the Internal
72.4Revenue Code, of an entity as defined in clause (1) or an individual who is a United States
72.5resident, as defined in section 865(g) of the Internal Revenue Code; and
72.6(ii) not treated as a corporation for federal income tax purposes;
72.7(4) which is incorporated in a tax haven; or
72.8(5) which is engaged in activity in a tax haven sufficient for the tax haven to impose a
72.9net income tax under United States constitutional standards and section 290.015, and which
72.10reports that 20 percent or more of its income is attributable to business in the tax haven.
72.11EFFECTIVE DATE.This section is effective for taxable years beginning after
72.12December 31, 2012.

72.13    Sec. 9. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision
72.14to read:
72.15    Subd. 5c. Tax haven. (a) "Tax haven" means the following foreign jurisdictions,
72.16unless the listing of the jurisdiction does not apply under paragraph (b):
72.17(1) Anguilla;
72.18(2) Antigua and Barbuda;
72.19(3) Aruba;
72.20(4) Bahamas;
72.21(5) Bahrain;
72.22(6) Belize;
72.23(7) Bermuda;
72.24(8) British Virgin Islands;
72.25(9) Cayman Islands;
72.26(10) Cook Islands;
72.27(11) Costa Rica;
72.28(12) Cyprus;
72.29(13) Dominica;
72.30(14) Gibraltar;
72.31(15) Grenada;
72.32(16) Guernsey-Sark-Alderney;
72.33(17) Isle of Man;
72.34(18) Jersey;
72.35(19) Jordan;
73.1(20) Lebanon;
73.2(21) Liberia;
73.3(22) Liechtenstein;
73.4(23) Malta;
73.5(24) Marshall Islands;
73.6(25) Monaco;
73.7(26) Nauru;
73.8(27) Netherlands Antilles;
73.9(28) Niue;
73.10(29) Panama;
73.11(30) St. Kitts and Nevis;
73.12(31) St. Lucia;
73.13(32) St. Vincent and Grenadines;
73.14(33) Samoa;
73.15(34) Turks and Caicos; and
73.16(35) Vanuatu.
73.17(b) A foreign jurisdiction's listing under paragraph (a) does not apply to the first
73.18taxable year after:
73.19(1) the United States enters into a tax treaty or other agreement with the foreign
73.20jurisdiction that provides for prompt, obligatory, and automatic exchange of information
73.21with the United States government relevant to enforcing the provisions of federal tax laws
73.22applicable to both individuals and all corporations and other entities and the treaty or other
73.23agreement was in effect for the taxable year; and
73.24(2) the foreign jurisdiction imposes a tax rate of at least ten percent on a tax base
73.25equal to at least 90 percent of the tax base that applies to corporations under the Internal
73.26Revenue Code.
73.27EFFECTIVE DATE.This section is effective for returns filed for taxable years
73.28beginning after December 31, 2012.

73.29    Sec. 10. Minnesota Statutes 2012, section 290.01, subdivision 19, as amended by Laws
73.302013, chapter 3, section 3, is amended to read:
73.31    Subd. 19. Net income. The term "net income" means the federal taxable income,
73.32as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
73.33date named in this subdivision, incorporating the federal effective dates of changes to the
73.34Internal Revenue Code and any elections made by the taxpayer in accordance with the
74.1Internal Revenue Code in determining federal taxable income for federal income tax
74.2purposes, and with the modifications provided in subdivisions 19a to 19f.
74.3    In the case of a regulated investment company or a fund thereof, as defined in section
74.4851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
74.5company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
74.6except that:
74.7    (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
74.8Revenue Code does not apply;
74.9    (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
74.10Revenue Code must be applied by allowing a deduction for capital gain dividends and
74.11exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
74.12Revenue Code; and
74.13    (3) the deduction for dividends paid must also be applied in the amount of any
74.14undistributed capital gains which the regulated investment company elects to have treated
74.15as provided in section 852(b)(3)(D) of the Internal Revenue Code.
74.16    The net income of a real estate investment trust as defined and limited by section
74.17856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
74.18taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
74.19    The net income of a designated settlement fund as defined in section 468B(d) of
74.20the Internal Revenue Code means the gross income as defined in section 468B(b) of the
74.21Internal Revenue Code.
74.22    The Internal Revenue Code of 1986, as amended through April 14, 2011 January 3,
74.232013, shall be in effect for taxable years beginning after December 31, 1996, and before
74.24January 1, 2012, and for taxable years beginning after December 31, 2012. The Internal
74.25Revenue Code of 1986, as amended through January 3, 2013, is in effect for taxable years
74.26beginning after December 31, 2011, and before January 1, 2013.
74.27    Except as otherwise provided, references to the Internal Revenue Code in
74.28subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
74.29the applicable year.
74.30EFFECTIVE DATE.This section is effective the day following final enactment,
74.31except the changes incorporated by federal changes are effective at the same time as the
74.32changes were effective for federal purposes.

74.33    Sec. 11. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
74.34    Subd. 19a. Additions to federal taxable income. For individuals, estates, and
74.35trusts, there shall be added to federal taxable income:
75.1    (1)(i) interest income on obligations of any state other than Minnesota or a political
75.2or governmental subdivision, municipality, or governmental agency or instrumentality
75.3of any state other than Minnesota exempt from federal income taxes under the Internal
75.4Revenue Code or any other federal statute; and
75.5    (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
75.6Code, except:
75.7(A) the portion of the exempt-interest dividends exempt from state taxation under
75.8the laws of the United States; and
75.9(B) the portion of the exempt-interest dividends derived from interest income
75.10on obligations of the state of Minnesota or its political or governmental subdivisions,
75.11municipalities, governmental agencies or instrumentalities, but only if the portion of the
75.12exempt-interest dividends from such Minnesota sources paid to all shareholders represents
75.1395 percent or more of the exempt-interest dividends, including any dividends exempt
75.14under subitem (A), that are paid by the regulated investment company as defined in section
75.15851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
75.16defined in section 851(g) of the Internal Revenue Code, making the payment; and
75.17    (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
75.18government described in section 7871(c) of the Internal Revenue Code shall be treated as
75.19interest income on obligations of the state in which the tribe is located;
75.20    (2) to the extent allowed as a deduction under section 63(d) of the Internal Revenue
75.21Code the amount of:
75.22    (i) income, sales and use, motor vehicle sales, or excise taxes paid or accrued within
75.23the taxable year under this chapter and the amount of;
75.24    (ii) taxes based on net income paid, sales and use, motor vehicle sales, or excise
75.25taxes paid to any other state or to any province or territory of Canada, to the extent allowed
75.26as a deduction under section 63(d) of the Internal Revenue Code,;
75.27(iii) charitable contributions, as defined in section 170(c) of the Internal Revenue
75.28Code, to the extent allowed as a deduction under section 170(a) of the Internal Revenue
75.29Code.
75.30 but The addition sum of the additions under items (i) to (iii) may not be more
75.31than the amount by which the itemized deductions as allowed under section 63(d) of
75.32the Internal Revenue Code state itemized deduction exceeds the amount of the standard
75.33deduction as defined in section 63(c) of the Internal Revenue Code, disregarding the
75.34amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue
75.35Code, minus any addition that would have been required under clause (21) if the taxpayer
75.36had claimed the standard deduction. For the purpose of this paragraph, the disallowance of
76.1itemized deductions under section 68 of the Internal Revenue Code of 1986, income, sales
76.2and use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed.
76.3For purposes of this clause, income, sales and use, and charitable contributions are the last
76.4itemized deductions disallowed under clause (13);
76.5    (3) the capital gain amount of a lump-sum distribution to which the special tax under
76.6section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
76.7    (4) the amount of income taxes paid or accrued within the taxable year under this
76.8chapter and taxes based on net income paid to any other state or any province or territory
76.9of Canada, to the extent allowed as a deduction in determining federal adjusted gross
76.10income. For the purpose of this paragraph, income taxes do not include the taxes imposed
76.11by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
76.12    (5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
76.13other than expenses or interest used in computing net interest income for the subtraction
76.14allowed under subdivision 19b, clause (1);
76.15    (6) the amount of a partner's pro rata share of net income which does not flow
76.16through to the partner because the partnership elected to pay the tax on the income under
76.17section 6242(a)(2) of the Internal Revenue Code;
76.18    (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
76.19Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
76.20in the taxable year generates a deduction for depreciation under section 168(k) and the
76.21activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
76.22the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
76.23limited to excess of the depreciation claimed by the activity under section 168(k) over the
76.24amount of the loss from the activity that is not allowed in the taxable year. In succeeding
76.25taxable years when the losses not allowed in the taxable year are allowed, the depreciation
76.26under section 168(k) is allowed;
76.27    (8) 80 percent of the amount by which the deduction allowed by section 179 of the
76.28Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
76.29Revenue Code of 1986, as amended through December 31, 2003;
76.30    (9) to the extent deducted in computing federal taxable income, the amount of the
76.31deduction allowable under section 199 of the Internal Revenue Code;
76.32    (10) for taxable years beginning before January 1, 2013, the exclusion allowed under
76.33section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
76.34(11) (10) the amount of expenses disallowed under section 290.10, subdivision 2;
77.1    (12) for taxable years beginning before January 1, 2010, the amount deducted for
77.2qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
77.3the extent deducted from gross income;
77.4    (13) for taxable years beginning before January 1, 2010, the amount deducted for
77.5certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
77.6of the Internal Revenue Code, to the extent deducted from gross income;
77.7(14) the additional standard deduction for property taxes payable that is allowable
77.8under section 63(c)(1)(C) of the Internal Revenue Code;
77.9(15) the additional standard deduction for qualified motor vehicle sales taxes
77.10allowable under section 63(c)(1)(E) of the Internal Revenue Code;
77.11(16) (11) discharge of indebtedness income resulting from reacquisition of business
77.12indebtedness and deferred under section 108(i) of the Internal Revenue Code;
77.13(17) the amount of unemployment compensation exempt from tax under section
77.1485(c) of the Internal Revenue Code;
77.15(18) (12) changes to federal taxable income attributable to a net operating loss that
77.16the taxpayer elected to carry back for more than two years for federal purposes but for
77.17which the losses can be carried back for only two years under section 290.095, subdivision
77.1811, paragraph (c);
77.19(19) (13) to the extent included in the computation of federal taxable income in
77.20taxable years beginning after December 31, 2010, the amount of disallowed itemized
77.21deductions, but the amount of disallowed itemized deductions plus the addition required
77.22under clause (2) may not be more than the amount by which the itemized deductions as
77.23allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the
77.24standard deduction as defined in section 63(c) of the Internal Revenue Code, disregarding
77.25the amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue
77.26Code, and reduced by any addition that would have been required under clause (21) if the
77.27taxpayer had claimed the standard deduction:
77.28(i) the amount of disallowed itemized deductions is equal to the lesser of:
77.29(A) three percent of the excess of the taxpayer's federal adjusted gross income
77.30over the applicable amount; or
77.31(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
77.32taxpayer under the Internal Revenue Code for the taxable year;
77.33(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
77.34married individual filing a separate return. Each dollar amount shall be increased by
77.35an amount equal to:
77.36(A) such dollar amount, multiplied by
78.1(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
78.2Revenue Code for the calendar year in which the taxable year begins, by substituting
78.3"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
78.4(iii) the term "itemized deductions" does not include:
78.5(A) the deduction for medical expenses under section 213 of the Internal Revenue
78.6Code;
78.7(B) any deduction for investment interest as defined in section 163(d) of the Internal
78.8Revenue Code; and
78.9(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
78.10theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
78.11Code or for losses described in section 165(d) of the Internal Revenue Code; and
78.12(20) (14) to the extent included in federal taxable income in taxable years beginning
78.13after December 31, 2010, the amount of disallowed personal exemptions for taxpayers
78.14with federal adjusted gross income over the threshold amount:
78.15(i) the disallowed personal exemption amount is equal to the dollar amount of the
78.16personal exemptions claimed by the taxpayer in the computation of federal taxable income
78.17multiplied by the applicable percentage;
78.18(ii) "applicable percentage" means two percentage points for each $2,500 (or
78.19fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
78.20year exceeds the threshold amount. In the case of a married individual filing a separate
78.21return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
78.22no event shall the applicable percentage exceed 100 percent;
78.23(iii) the term "threshold amount" means:
78.24(A) $150,000 in the case of a joint return or a surviving spouse;
78.25(B) $125,000 in the case of a head of a household;
78.26(C) $100,000 in the case of an individual who is not married and who is not a
78.27surviving spouse or head of a household; and
78.28(D) $75,000 in the case of a married individual filing a separate return; and
78.29(iv) the thresholds shall be increased by an amount equal to:
78.30(A) such dollar amount, multiplied by
78.31(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
78.32Revenue Code for the calendar year in which the taxable year begins, by substituting
78.33"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and.
78.34(21) to the extent deducted in the computation of federal taxable income, for taxable
78.35years beginning after December 31, 2010, and before January 1, 2013, the difference
78.36between the standard deduction allowed under section 63(c) of the Internal Revenue Code
79.1and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code
79.2as amended through December 1, 2010.
79.3EFFECTIVE DATE.This section is effective for taxable years beginning after
79.4December 31, 2012.

79.5    Sec. 12. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
79.6    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
79.7and trusts, there shall be subtracted from federal taxable income:
79.8    (1) net interest income on obligations of any authority, commission, or
79.9instrumentality of the United States to the extent includable in taxable income for federal
79.10income tax purposes but exempt from state income tax under the laws of the United States;
79.11    (2) if included in federal taxable income, the amount of any overpayment of income
79.12tax to Minnesota or to any other state, for any previous taxable year, whether the amount
79.13is received as a refund or as a credit to another taxable year's income tax liability;
79.14    (3) the amount paid to others, less the amount used to claim the credit allowed under
79.15section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
79.16to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
79.17transportation of each qualifying child in attending an elementary or secondary school
79.18situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
79.19resident of this state may legally fulfill the state's compulsory attendance laws, which
79.20is not operated for profit, and which adheres to the provisions of the Civil Rights Act
79.21of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
79.22tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
79.23"textbooks" includes books and other instructional materials and equipment purchased
79.24or leased for use in elementary and secondary schools in teaching only those subjects
79.25legally and commonly taught in public elementary and secondary schools in this state.
79.26Equipment expenses qualifying for deduction includes expenses as defined and limited in
79.27section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
79.28books and materials used in the teaching of religious tenets, doctrines, or worship, the
79.29purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
79.30or materials for, or transportation to, extracurricular activities including sporting events,
79.31musical or dramatic events, speech activities, driver's education, or similar programs. No
79.32deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
79.33the qualifying child's vehicle to provide such transportation for a qualifying child. For
79.34purposes of the subtraction provided by this clause, "qualifying child" has the meaning
79.35given in section 32(c)(3) of the Internal Revenue Code;
80.1    (4) income as provided under section 290.0802;
80.2    (5) to the extent included in federal adjusted gross income, income realized on
80.3disposition of property exempt from tax under section 290.491;
80.4    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
80.5of the Internal Revenue Code in determining federal taxable income by an individual
80.6who does not itemize deductions for federal income tax purposes for the taxable year, an
80.7amount equal to 50 percent of the excess of charitable contributions over $500 allowable
80.8as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
80.9under the provisions of Public Law 109-1 and Public Law 111-126;
80.10    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
80.11qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
80.12of subnational foreign taxes for the taxable year, but not to exceed the total subnational
80.13foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
80.14"federal foreign tax credit" means the credit allowed under section 27 of the Internal
80.15Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
80.16under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
80.17the extent they exceed the federal foreign tax credit;
80.18    (8) (6) in each of the five tax years immediately following the tax year in which an
80.19addition is required under subdivision 19a, clause (7), or 19c, clause (15) (12), in the case
80.20of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
80.21delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
80.22of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
80.23clause (15) (12), in the case of a shareholder of an S corporation, minus the positive value
80.24of any net operating loss under section 172 of the Internal Revenue Code generated for the
80.25tax year of the addition. The resulting delayed depreciation cannot be less than zero;
80.26    (9) (7) job opportunity building zone income as provided under section 469.316;
80.27    (10) (8) to the extent included in federal taxable income, the amount of compensation
80.28paid to members of the Minnesota National Guard or other reserve components of the
80.29United States military for active service, excluding compensation for services performed
80.30under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
80.31service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
80.32(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
80.335b , but "active service" excludes service performed in accordance with section 190.08,
80.34subdivision 3 ;
80.35    (11) (9) to the extent included in federal taxable income, the amount of compensation
80.36paid to Minnesota residents who are members of the armed forces of the United States
81.1or United Nations for active duty performed under United States Code, title 10; or the
81.2authority of the United Nations;
81.3    (12) (10) an amount, not to exceed $10,000, equal to qualified expenses related to a
81.4qualified donor's donation, while living, of one or more of the qualified donor's organs
81.5to another person for human organ transplantation. For purposes of this clause, "organ"
81.6means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
81.7"human organ transplantation" means the medical procedure by which transfer of a human
81.8organ is made from the body of one person to the body of another person; "qualified
81.9expenses" means unreimbursed expenses for both the individual and the qualified donor
81.10for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
81.11may be subtracted under this clause only once; and "qualified donor" means the individual
81.12or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
81.13individual may claim the subtraction in this clause for each instance of organ donation for
81.14transplantation during the taxable year in which the qualified expenses occur;
81.15    (13) (11) in each of the five tax years immediately following the tax year in which an
81.16addition is required under subdivision 19a, clause (8), or 19c, clause (16) (13), in the case
81.17of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of
81.18the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16)
81.19 (13), in the case of a shareholder of a corporation that is an S corporation, minus the
81.20positive value of any net operating loss under section 172 of the Internal Revenue Code
81.21generated for the tax year of the addition. If the net operating loss exceeds the addition for
81.22the tax year, a subtraction is not allowed under this clause;
81.23    (14) (12) to the extent included in the federal taxable income of a nonresident of
81.24Minnesota, compensation paid to a service member as defined in United States Code, title
81.2510, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
81.26Act, Public Law 108-189, section 101(2);
81.27    (15) (13) to the extent included in federal taxable income, the amount of national
81.28service educational awards received from the National Service Trust under United States
81.29Code, title 42, sections 12601 to 12604, for service in an approved Americorps National
81.30Service program;
81.31(16) (14) to the extent included in federal taxable income, discharge of indebtedness
81.32income resulting from reacquisition of business indebtedness included in federal taxable
81.33income under section 108(i) of the Internal Revenue Code. This subtraction applies only
81.34to the extent that the income was included in net income in a prior year as a result of the
81.35addition under section 290.01, subdivision 19a, clause (16) (11); and
82.1(17) (15) the amount of the net operating loss allowed under section 290.095,
82.2subdivision 11 , paragraph (c).;
82.3(16) the amount of the limitation on itemized deductions under section 68(b) of the
82.4Internal Revenue Code;
82.5(17) the amount of the phase-out of personal exemptions under section 151(d) of
82.6the Internal Revenue Code; and
82.7(18) in the year that the expenditures are made for railroad track maintenance, as
82.8defined in section 45G(d) of the Internal Revenue Code, in the case of a shareholder of a
82.9corporation that is an S corporation or a partner in a partnership, an amount equal to the
82.10credit awarded under section 45G(a) of the Internal Revenue Code. The subtraction is
82.11reduced to an amount equal to the percentage of the shareholder's or partner's share of the
82.12net income of the S corporation or partnership.
82.13EFFECTIVE DATE.This section is effective for taxable years beginning after
82.14December 31, 2012.

82.15    Sec. 13. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
82.16    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
82.17there shall be added to federal taxable income:
82.18    (1) the amount of any deduction taken for federal income tax purposes for income,
82.19excise, or franchise taxes based on net income or related minimum taxes, including but not
82.20limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
82.21another state, a political subdivision of another state, the District of Columbia, or any
82.22foreign country or possession of the United States;
82.23    (2) interest not subject to federal tax upon obligations of: the United States, its
82.24possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
82.25state, any of its political or governmental subdivisions, any of its municipalities, or any
82.26of its governmental agencies or instrumentalities; the District of Columbia; or Indian
82.27tribal governments;
82.28    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
82.29Revenue Code;
82.30    (4) the amount of any net operating loss deduction taken for federal income tax
82.31purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
82.32deduction under section 810 of the Internal Revenue Code;
82.33    (5) the amount of any special deductions taken for federal income tax purposes
82.34under sections 241 to 247 and 965 of the Internal Revenue Code;
83.1    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
83.2clause (a), that are not subject to Minnesota income tax;
83.3    (7) the amount of any capital losses deducted for federal income tax purposes under
83.4sections 1211 and 1212 of the Internal Revenue Code;
83.5    (8) the exempt foreign trade income of a foreign sales corporation under sections
83.6921(a) and 291 of the Internal Revenue Code;
83.7    (9) (8) the amount of percentage depletion deducted under sections 611 through
83.8614 and 291 of the Internal Revenue Code;
83.9    (10) (9) for certified pollution control facilities placed in service in a taxable year
83.10beginning before December 31, 1986, and for which amortization deductions were elected
83.11under section 169 of the Internal Revenue Code of 1954, as amended through December
83.1231, 1985, the amount of the amortization deduction allowed in computing federal taxable
83.13income for those facilities;
83.14    (11) the amount of any deemed dividend from a foreign operating corporation
83.15determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
83.16shall be reduced by the amount of the addition to income required by clauses (20), (21),
83.17(22), and (23);
83.18    (12) (10) the amount of a partner's pro rata share of net income which does not flow
83.19through to the partner because the partnership elected to pay the tax on the income under
83.20section 6242(a)(2) of the Internal Revenue Code;
83.21    (13) the amount of net income excluded under section 114 of the Internal Revenue
83.22Code;
83.23    (14) (11) any increase in subpart F income, as defined in section 952(a) of the
83.24Internal Revenue Code, for the taxable year when subpart F income is calculated without
83.25regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
83.26    (15) (12) 80 percent of the depreciation deduction allowed under section
83.27168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
83.28the taxpayer has an activity that in the taxable year generates a deduction for depreciation
83.29under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
83.30year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
83.31allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
83.32of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
83.33over the amount of the loss from the activity that is not allowed in the taxable year. In
83.34succeeding taxable years when the losses not allowed in the taxable year are allowed, the
83.35depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
84.1    (16) (13) 80 percent of the amount by which the deduction allowed by section 179 of
84.2the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
84.3Revenue Code of 1986, as amended through December 31, 2003;
84.4    (17) (14) to the extent deducted in computing federal taxable income, the amount of
84.5the deduction allowable under section 199 of the Internal Revenue Code;
84.6    (18) for taxable years beginning before January 1, 2013, the exclusion allowed under
84.7section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
84.8    (19) (15) the amount of expenses disallowed under section 290.10, subdivision 2; and
84.9    (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
84.10accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
84.11of a corporation that is a member of the taxpayer's unitary business group that qualifies
84.12as a foreign operating corporation. For purposes of this clause, intangible expenses and
84.13costs include:
84.14    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
84.15use, maintenance or management, ownership, sale, exchange, or any other disposition of
84.16intangible property;
84.17    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
84.18transactions;
84.19    (iii) royalty, patent, technical, and copyright fees;
84.20    (iv) licensing fees; and
84.21    (v) other similar expenses and costs.
84.22For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
84.23applications, trade names, trademarks, service marks, copyrights, mask works, trade
84.24secrets, and similar types of intangible assets.
84.25This clause does not apply to any item of interest or intangible expenses or costs paid,
84.26accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
84.27to such item of income to the extent that the income to the foreign operating corporation
84.28is income from sources without the United States as defined in subtitle A, chapter 1,
84.29subchapter N, part 1, of the Internal Revenue Code;
84.30    (21) except as already included in the taxpayer's taxable income pursuant to clause
84.31(20), any interest income and income generated from intangible property received or
84.32accrued by a foreign operating corporation that is a member of the taxpayer's unitary
84.33group. For purposes of this clause, income generated from intangible property includes:
84.34    (i) income related to the direct or indirect acquisition, use, maintenance or
84.35management, ownership, sale, exchange, or any other disposition of intangible property;
84.36    (ii) income from factoring transactions or discounting transactions;
85.1    (iii) royalty, patent, technical, and copyright fees;
85.2    (iv) licensing fees; and
85.3    (v) other similar income.
85.4For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
85.5applications, trade names, trademarks, service marks, copyrights, mask works, trade
85.6secrets, and similar types of intangible assets.
85.7This clause does not apply to any item of interest or intangible income received or accrued
85.8by a foreign operating corporation with respect to such item of income to the extent that
85.9the income is income from sources without the United States as defined in subtitle A,
85.10chapter 1, subchapter N, part 1, of the Internal Revenue Code;
85.11    (22) the dividends attributable to the income of a foreign operating corporation that
85.12is a member of the taxpayer's unitary group in an amount that is equal to the dividends
85.13paid deduction of a real estate investment trust under section 561(a) of the Internal
85.14Revenue Code for amounts paid or accrued by the real estate investment trust to the
85.15foreign operating corporation;
85.16    (23) the income of a foreign operating corporation that is a member of the taxpayer's
85.17unitary group in an amount that is equal to gains derived from the sale of real or personal
85.18property located in the United States;
85.19    (24) for taxable years beginning before January 1, 2010, the additional amount
85.20allowed as a deduction for donation of computer technology and equipment under section
85.21170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
85.22(25) (16) discharge of indebtedness income resulting from reacquisition of business
85.23indebtedness and deferred under section 108(i) of the Internal Revenue Code.
85.24EFFECTIVE DATE.This section is effective for taxable years beginning after
85.25December 31, 2012.

85.26    Sec. 14. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
85.27    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
85.28corporations, there shall be subtracted from federal taxable income after the increases
85.29provided in subdivision 19c:
85.30    (1) the amount of foreign dividend gross-up added to gross income for federal
85.31income tax purposes under section 78 of the Internal Revenue Code;
85.32    (2) the amount of salary expense not allowed for federal income tax purposes due to
85.33claiming the work opportunity credit under section 51 of the Internal Revenue Code;
86.1    (3) any dividend (not including any distribution in liquidation) paid within the
86.2taxable year by a national or state bank to the United States, or to any instrumentality of
86.3the United States exempt from federal income taxes, on the preferred stock of the bank
86.4owned by the United States or the instrumentality;
86.5    (4) amounts disallowed for intangible drilling costs due to differences between
86.6this chapter and the Internal Revenue Code in taxable years beginning before January
86.71, 1987, as follows:
86.8    (i) to the extent the disallowed costs are represented by physical property, an amount
86.9equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
86.10subdivision 7 , subject to the modifications contained in subdivision 19e; and
86.11    (ii) to the extent the disallowed costs are not represented by physical property, an
86.12amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
86.13290.09, subdivision 8 ;
86.14    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
86.15Internal Revenue Code, except that:
86.16    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
86.17capital loss carrybacks shall not be allowed;
86.18    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
86.19a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
86.20allowed;
86.21    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
86.22capital loss carryback to each of the three taxable years preceding the loss year, subject to
86.23the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
86.24    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
86.25a capital loss carryover to each of the five taxable years succeeding the loss year to the
86.26extent such loss was not used in a prior taxable year and subject to the provisions of
86.27Minnesota Statutes 1986, section 290.16, shall be allowed;
86.28    (6) an amount for interest and expenses relating to income not taxable for federal
86.29income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
86.30expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
86.31291 of the Internal Revenue Code in computing federal taxable income;
86.32    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
86.33which percentage depletion was disallowed pursuant to subdivision 19c, clause (9) (8), a
86.34reasonable allowance for depletion based on actual cost. In the case of leases the deduction
86.35must be apportioned between the lessor and lessee in accordance with rules prescribed
86.36by the commissioner. In the case of property held in trust, the allowable deduction must
87.1be apportioned between the income beneficiaries and the trustee in accordance with the
87.2pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
87.3of the trust's income allocable to each;
87.4    (8) for certified pollution control facilities placed in service in a taxable year
87.5beginning before December 31, 1986, and for which amortization deductions were elected
87.6under section 169 of the Internal Revenue Code of 1954, as amended through December
87.731, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
87.81986, section 290.09, subdivision 7;
87.9    (9) amounts included in federal taxable income that are due to refunds of income,
87.10excise, or franchise taxes based on net income or related minimum taxes paid by the
87.11corporation to Minnesota, another state, a political subdivision of another state, the
87.12District of Columbia, or a foreign country or possession of the United States to the extent
87.13that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
87.14clause (1), in a prior taxable year;
87.15    (10) 80 50 percent of royalties, fees, or other like income accrued or received from a
87.16foreign operating corporation or a foreign corporation which is part of the same unitary
87.17business as the receiving corporation, unless the income resulting from such payments or
87.18accruals is income from sources within the United States as defined in subtitle A, chapter
87.191, subchapter N, part 1, of the Internal Revenue Code;
87.20    (11) income or gains from the business of mining as defined in section 290.05,
87.21subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
87.22    (12) the amount of disability access expenditures in the taxable year which are not
87.23allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
87.24    (13) the amount of qualified research expenses not allowed for federal income tax
87.25purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
87.26the amount exceeds the amount of the credit allowed under section 290.068;
87.27    (14) the amount of salary expenses not allowed for federal income tax purposes due to
87.28claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;
87.29    (15) for a corporation whose foreign sales corporation, as defined in section 922
87.30of the Internal Revenue Code, constituted a foreign operating corporation during any
87.31taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
87.32claiming the deduction under section 290.21, subdivision 4, for income received from
87.33the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
87.34income excluded under section 114 of the Internal Revenue Code, provided the income is
87.35not income of a foreign operating company;
88.1    (16) (15) any decrease in subpart F income, as defined in section 952(a) of the
88.2Internal Revenue Code, for the taxable year when subpart F income is calculated without
88.3regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
88.4    (17) (16) in each of the five tax years immediately following the tax year in which an
88.5addition is required under subdivision 19c, clause (15) (12), an amount equal to one-fifth
88.6of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
88.7amount of the addition made by the taxpayer under subdivision 19c, clause (15) (12). The
88.8resulting delayed depreciation cannot be less than zero;
88.9    (18) (17) in each of the five tax years immediately following the tax year in which an
88.10addition is required under subdivision 19c, clause (16) (13), an amount equal to one-fifth
88.11of the amount of the addition; and
88.12(19) (18) to the extent included in federal taxable income, discharge of indebtedness
88.13income resulting from reacquisition of business indebtedness included in federal taxable
88.14income under section 108(i) of the Internal Revenue Code. This subtraction applies only
88.15to the extent that the income was included in net income in a prior year as a result of the
88.16addition under section 290.01, subdivision 19c, clause (25). (16); and
88.17(19) in the year that the expenditures are made for railroad track maintenance, as
88.18defined in section 45G(d) of the Internal Revenue Code, an amount equal to the credit
88.19awarded under section 45G(a) of the Internal Revenue Code.
88.20EFFECTIVE DATE.This section is effective for taxable years beginning after
88.21December 31, 2012.

88.22    Sec. 15. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision
88.23to read:
88.24    Subd. 29a. State itemized deduction. The term "state itemized deduction" means
88.25federal itemized deductions, as defined in section 63(d) of the Internal Revenue Code,
88.26disregarding any limitation under section 68 of the Internal Revenue Code, and reduced
88.27by the amount of the addition required under subdivision 19a, clause (13).
88.28EFFECTIVE DATE.This section is effective for taxable years beginning after
88.29December 31, 2012.

88.30    Sec. 16. Minnesota Statutes 2012, section 290.01, subdivision 31, as amended by Laws
88.312013, chapter 3, section 4, is amended to read:
88.32    Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, for
88.33taxable years beginning before January 1, 2012, and after December 31, 2012, "Internal
89.1Revenue Code" means the Internal Revenue Code of 1986, as amended through April 14,
89.22011; and for taxable years beginning after December 31, 2011, and before January 1,
89.32013, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
89.4through January 3, 2013. Internal Revenue Code also includes any uncodified provision in
89.5federal law that relates to provisions of the Internal Revenue Code that are incorporated
89.6into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1,
89.7subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as
89.8amended through March 18, 2010.
89.9EFFECTIVE DATE.This section is effective the day following final enactment,
89.10except the changes incorporated by federal changes are effective at the same time as the
89.11changes were effective for federal purposes.

89.12    Sec. 17. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision
89.13to read:
89.14    Subd. 33. Foreign source income; income from foreign sources. The terms
89.15"foreign source income" and "income from foreign sources" means income from sources
89.16without the United States as defined in subtitle A, chapter 1, subchapter N, part 1, of the
89.17Internal Revenue Code.
89.18EFFECTIVE DATE.This section is effective for taxable years beginning after
89.19December 31, 2012.

89.20    Sec. 18. Minnesota Statutes 2012, section 290.06, subdivision 2c, is amended to read:
89.21    Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income
89.22taxes imposed by this chapter upon married individuals filing joint returns and surviving
89.23spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
89.24applying to their taxable net income the following schedule of rates:
89.25    (1) On the first $25,680 $31,250, 5.35 percent;
89.26    (2) On all over $25,680 $31,250, but not over $102,030 $130,000, 7.05 percent;
89.27    (3) On all over $102,030 $130,000, but not over $400,000, 7.85 percent.;
89.28(4) On all over $400,000, 8.49 percent.
89.29    Married individuals filing separate returns, estates, and trusts must compute their
89.30income tax by applying the above rates to their taxable income, except that the income
89.31brackets will be one-half of the above amounts.
89.32    (b) The income taxes imposed by this chapter upon unmarried individuals must be
89.33computed by applying to taxable net income the following schedule of rates:
90.1    (1) On the first $17,570 $21,400, 5.35 percent;
90.2    (2) On all over $17,570 $21,400, but not over $57,710 $73,500, 7.05 percent;
90.3    (3) On all over $57,710 $73,500, but not over $226,200, 7.85 percent.;
90.4(4) On all over $226,200, 8.49 percent.
90.5    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying
90.6as a head of household as defined in section 2(b) of the Internal Revenue Code must be
90.7computed by applying to taxable net income the following schedule of rates:
90.8    (1) On the first $21,630 $26,300, 5.35 percent;
90.9    (2) On all over $21,630 $26,300, but not over $86,910 $110,700, 7.05 percent;
90.10    (3) On all over $86,910 $110,700, but not over $340,700, 7.85 percent.;
90.11(4) On all over $340,700, 8.49 percent.
90.12    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the
90.13tax of any individual taxpayer whose taxable net income for the taxable year is less than
90.14an amount determined by the commissioner must be computed in accordance with tables
90.15prepared and issued by the commissioner of revenue based on income brackets of not
90.16more than $100. The amount of tax for each bracket shall be computed at the rates set
90.17forth in this subdivision, provided that the commissioner may disregard a fractional part of
90.18a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
90.19    (e) An individual who is not a Minnesota resident for the entire year must compute
90.20the individual's Minnesota income tax as provided in this subdivision. After the
90.21application of the nonrefundable credits provided in this chapter, the tax liability must
90.22then be multiplied by a fraction in which:
90.23    (1) the numerator is the individual's Minnesota source federal adjusted gross income
90.24as defined in section 62 of the Internal Revenue Code and increased by the additions
90.25required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12),
90.26(13), and (16) to (18) (5) to (9), (11), and (12), and reduced by the Minnesota assignable
90.27portion of the subtraction for United States government interest under section 290.01,
90.28subdivision 19b , clause (1), and the subtractions under section 290.01, subdivision 19b,
90.29clauses (8), (9), (13), (14), (16), and (17) (6), (7), (11), (12), (14), and (15), after applying
90.30the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
90.31    (2) the denominator is the individual's federal adjusted gross income as defined in
90.32section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
90.33section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16) to
90.34(18) (5) to (9), (11), and (12), and reduced by the amounts specified in section 290.01,
90.35subdivision 19b , clauses (1), (8), (9), (13), (14), (16), and (17) (6), (7), (11), (12), (14),
90.36and (15).
91.1EFFECTIVE DATE.This section is effective for taxable years beginning after
91.2December 31, 2012.

91.3    Sec. 19. Minnesota Statutes 2012, section 290.06, subdivision 2d, is amended to read:
91.4    Subd. 2d. Inflation adjustment of brackets. (a) For taxable years beginning after
91.5December 31, 2000 2013, the minimum and maximum dollar amounts for each rate
91.6bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the
91.7percentage determined under paragraph (b). For the purpose of making the adjustment as
91.8provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the
91.9rate brackets as they existed for taxable years beginning after December 31, 1999 2012,
91.10and before January 1, 2001 2014. The rate applicable to any rate bracket must not be
91.11changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes
91.12in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10
91.13amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
91.14(b) The commissioner shall adjust the rate brackets and by the percentage determined
91.15pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
91.16section 1(f)(3)(B) the word "1999" "2012" shall be substituted for the word "1992." For
91.172001 2014, the commissioner shall then determine the percent change from the 12 months
91.18ending on August 31, 1999 2012, to the 12 months ending on August 31, 2000 2013, and
91.19in each subsequent year, from the 12 months ending on August 31, 1999 2012, to the 12
91.20months ending on August 31 of the year preceding the taxable year. The determination of
91.21the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
91.22not be subject to the Administrative Procedure Act contained in chapter 14.
91.23No later than December 15 of each year, the commissioner shall announce the
91.24specific percentage that will be used to adjust the tax rate brackets.
91.25EFFECTIVE DATE.This section is effective for taxable years beginning after
91.26December 31, 2012.

91.27    Sec. 20. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
91.28to read:
91.29    Subd. 36. Charitable contributions credit. (a) A taxpayer, other than a corporation,
91.30estate, or trust, is allowed a credit against the tax imposed by this chapter equal to eight
91.31percent of the amount by which eligible charitable contributions exceed the greater of:
91.32(1) two percent of the taxpayer's adjusted gross income for the taxable year; or
91.33(2) $400 ($800 for married filing jointly).
92.1(b) For purposes of this subdivision, "eligible charitable contributions" means
92.2charitable contributions allowable as a deduction for the taxable year under section 170(a)
92.3of the Internal Revenue Code, subject to the limitations of section 170(b) of the Internal
92.4Revenue Code, and determined without regard to whether or not the taxpayer itemizes
92.5deductions.
92.6(c) For purposes of this subdivision, "adjusted gross income" has the meaning given
92.7in section 62 of the Internal Revenue Code.
92.8(d) For a nonresident or part-year resident, the credit must be allocated based on the
92.9percentage calculated under subdivision 2c, paragraph (e).
92.10EFFECTIVE DATE.This section is effective for taxable years beginning after
92.11December 31, 2012.

92.12    Sec. 21. Minnesota Statutes 2012, section 290.067, subdivision 1, is amended to read:
92.13    Subdivision 1. Amount of credit. (a) A taxpayer may take as a credit against the
92.14tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
92.15dependent care credit for which the taxpayer is eligible pursuant to the provisions of
92.16section 21 of the Internal Revenue Code subject to the limitations provided in subdivision
92.172 except that in determining whether the child qualified as a dependent, income received
92.18as a Minnesota family investment program grant or allowance to or on behalf of the child
92.19must not be taken into account in determining whether the child received more than half
92.20of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of
92.21the Internal Revenue Code do not apply.
92.22(b) If a child who has not attained the age of six years at the close of the taxable year
92.23is cared for at a licensed family day care home operated by the child's parent, the taxpayer
92.24is deemed to have paid employment-related expenses. If the child is 16 months old or
92.25younger at the close of the taxable year, the amount of expenses deemed to have been paid
92.26equals the maximum limit for one qualified individual under section 21(c) and (d) of the
92.27Internal Revenue Code. If the child is older than 16 months of age but has not attained the
92.28age of six years at the close of the taxable year, the amount of expenses deemed to have
92.29been paid equals the amount the licensee would charge for the care of a child of the same
92.30age for the same number of hours of care.
92.31(c) If a married couple:
92.32(1) has a child who has not attained the age of one year at the close of the taxable year;
92.33(2) files a joint tax return for the taxable year; and
92.34(3) does not participate in a dependent care assistance program as defined in section
92.35129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid
93.1for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of
93.2(i) the combined earned income of the couple or (ii) the amount of the maximum limit for
93.3one qualified individual under section 21(c) and (d) of the Internal Revenue Code will
93.4be deemed to be the employment related expense paid for that child. The earned income
93.5limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed
93.6amount. These deemed amounts apply regardless of whether any employment-related
93.7expenses have been paid.
93.8(d) If the taxpayer is not required and does not file a federal individual income tax
93.9return for the tax year, no credit is allowed for any amount paid to any person unless:
93.10(1) the name, address, and taxpayer identification number of the person are included
93.11on the return claiming the credit; or
93.12(2) if the person is an organization described in section 501(c)(3) of the Internal
93.13Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code,
93.14the name and address of the person are included on the return claiming the credit.
93.15In the case of a failure to provide the information required under the preceding sentence,
93.16the preceding sentence does not apply if it is shown that the taxpayer exercised due
93.17diligence in attempting to provide the information required.
93.18In the case of a nonresident, part-year resident, or a person who has earned income
93.19not subject to tax under this chapter including earned income excluded pursuant to section
93.20290.01, subdivision 19b , clause (9) (7), the credit determined under section 21 of the
93.21Internal Revenue Code must be allocated based on the ratio by which the earned income
93.22of the claimant and the claimant's spouse from Minnesota sources bears to the total earned
93.23income of the claimant and the claimant's spouse.
93.24For residents of Minnesota, the subtractions for military pay under section 290.01,
93.25subdivision 19b , clauses (10) and (11) (8) and (9), are not considered "earned income not
93.26subject to tax under this chapter."
93.27For residents of Minnesota, the exclusion of combat pay under section 112 of the
93.28Internal Revenue Code is not considered "earned income not subject to tax under this
93.29chapter."
93.30EFFECTIVE DATE.This section is effective for taxable years beginning after
93.31December 31, 2012.

93.32    Sec. 22. Minnesota Statutes 2012, section 290.067, subdivision 2a, is amended to read:
93.33    Subd. 2a. Income. (a) For purposes of this section, "income" means the sum of
93.34the following:
94.1(1) federal adjusted gross income as defined in section 62 of the Internal Revenue
94.2Code; and
94.3(2) the sum of the following amounts to the extent not included in clause (1):
94.4(i) all nontaxable income;
94.5(ii) the amount of a passive activity loss that is not disallowed as a result of section
94.6469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
94.7loss carryover allowed under section 469(b) of the Internal Revenue Code;
94.8(iii) an amount equal to the total of any discharge of qualified farm indebtedness
94.9of a solvent individual excluded from gross income under section 108(g) of the Internal
94.10Revenue Code;
94.11(iv) cash public assistance and relief;
94.12(v) any pension or annuity (including railroad retirement benefits, all payments
94.13received under the federal Social Security Act, supplemental security income, and veterans
94.14benefits), which was not exclusively funded by the claimant or spouse, or which was
94.15funded exclusively by the claimant or spouse and which funding payments were excluded
94.16from federal adjusted gross income in the years when the payments were made;
94.17(vi) interest received from the federal or a state government or any instrumentality
94.18or political subdivision thereof;
94.19(vii) workers' compensation;
94.20(viii) nontaxable strike benefits;
94.21(ix) the gross amounts of payments received in the nature of disability income or
94.22sick pay as a result of accident, sickness, or other disability, whether funded through
94.23insurance or otherwise;
94.24(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
94.251986, as amended through December 31, 1995;
94.26(xi) contributions made by the claimant to an individual retirement account,
94.27including a qualified voluntary employee contribution; simplified employee pension plan;
94.28self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
94.29of the Internal Revenue Code; or deferred compensation plan under section 457 of the
94.30Internal Revenue Code;
94.31(xii) nontaxable scholarship or fellowship grants;
94.32(xiii) the amount of deduction allowed under section 199 of the Internal Revenue
94.33Code;
94.34(xiv) the amount of deduction allowed under section 220 or 223 of the Internal
94.35Revenue Code;
95.1(xv) the amount of deducted for tuition expenses required to be added to income
95.2under section 290.01, subdivision 19a, clause (12) under section 222 of the Internal
95.3Revenue Code; and
95.4(xvi) the amount deducted for certain expenses of elementary and secondary school
95.5teachers under section 62(a)(2)(D) of the Internal Revenue Code; and.
95.6(xvii) unemployment compensation.
95.7In the case of an individual who files an income tax return on a fiscal year basis, the
95.8term "federal adjusted gross income" means federal adjusted gross income reflected in the
95.9fiscal year ending in the next calendar year. Federal adjusted gross income may not be
95.10reduced by the amount of a net operating loss carryback or carryforward or a capital loss
95.11carryback or carryforward allowed for the year.
95.12(b) "Income" does not include:
95.13(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
95.14(2) amounts of any pension or annuity that were exclusively funded by the claimant
95.15or spouse if the funding payments were not excluded from federal adjusted gross income
95.16in the years when the payments were made;
95.17(3) surplus food or other relief in kind supplied by a governmental agency;
95.18(4) relief granted under chapter 290A;
95.19(5) child support payments received under a temporary or final decree of dissolution
95.20or legal separation; and
95.21(6) restitution payments received by eligible individuals and excludable interest as
95.22defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
95.232001, Public Law 107-16.
95.24EFFECTIVE DATE.This section is effective for taxable years beginning after
95.25December 31, 2012.

95.26    Sec. 23. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
95.27    Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
95.28imposed by this chapter equal to a percentage of earned income. To receive a credit, a
95.29taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
95.30(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
95.31the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
95.32income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
95.33case is the credit less than zero.
95.34(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
95.35$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
96.1$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
96.2whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
96.3(d) For individuals with two or more qualifying children, the credit equals ten percent
96.4of the first $9,720 of earned income and 20 percent of earned income over $14,860 but less
96.5than $16,800. The credit is reduced by 10.3 percent of earned income or adjusted gross
96.6income, whichever is greater, in excess of $17,890, but in no case is the credit less than zero.
96.7(e) For a nonresident or part-year resident, the credit must be allocated based on the
96.8percentage calculated under section 290.06, subdivision 2c, paragraph (e).
96.9(f) For a person who was a resident for the entire tax year and has earned income
96.10not subject to tax under this chapter, including income excluded under section 290.01,
96.11subdivision 19b , clause (9), the credit must be allocated based on the ratio of federal
96.12adjusted gross income reduced by the earned income not subject to tax under this chapter
96.13over federal adjusted gross income. For purposes of this paragraph, the subtractions for
96.14military pay under section 290.01, subdivision 19b, clauses (10) and (11) (8) and (9), are
96.15not considered "earned income not subject to tax under this chapter."
96.16For the purposes of this paragraph, the exclusion of combat pay under section 112
96.17of the Internal Revenue Code is not considered "earned income not subject to tax under
96.18this chapter."
96.19(g) For tax years beginning after December 31, 2007, and before December 31,
96.202010, and for tax years beginning after December 31, 2017, the $5,770 in paragraph (b),
96.21the $15,080 in paragraph (c), and the $17,890 in paragraph (d), after being adjusted for
96.22inflation under subdivision 7, are each increased by $3,000 for married taxpayers filing joint
96.23returns. For tax years beginning after December 31, 2008, the commissioner shall annually
96.24adjust the $3,000 by the percentage determined pursuant to the provisions of section 1(f)
96.25of the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2007" shall be
96.26substituted for the word "1992." For 2009, the commissioner shall then determine the
96.27percent change from the 12 months ending on August 31, 2007, to the 12 months ending on
96.28August 31, 2008, and in each subsequent year, from the 12 months ending on August 31,
96.292007, to the 12 months ending on August 31 of the year preceding the taxable year. The
96.30earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
96.31amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
96.32commissioner under this subdivision is not a rule under the Administrative Procedure Act.
96.33(h) For tax years beginning after December 31, 2010, and before January 1, 2012,
96.34 and for tax years beginning after December 31, 2012, and before January 1, 2018, the
96.35$5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
96.36(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000
97.1for married taxpayers filing joint returns. For tax years beginning after December 31,
97.22010, and before January 1, 2012, and for tax years beginning after December 31, 2012,
97.3and before January 1, 2018, the commissioner shall annually adjust the $5,000 by the
97.4percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
97.5Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for the word
97.6"1992." For 2011, the commissioner shall then determine the percent change from the 12
97.7months ending on August 31, 2008, to the 12 months ending on August 31, 2010, and in
97.8each subsequent year, from the 12 months ending on August 31, 2008, to the 12 months
97.9ending on August 31 of the year preceding the taxable year. The earned income thresholds
97.10as adjusted for inflation must be rounded to the nearest $10. If the amount ends in $5, the
97.11amount is rounded up to the nearest $10. The determination of the commissioner under
97.12this subdivision is not a rule under the Administrative Procedure Act.
97.13(i) The commissioner shall construct tables showing the amount of the credit at
97.14various income levels and make them available to taxpayers. The tables shall follow
97.15the schedule contained in this subdivision, except that the commissioner may graduate
97.16the transition between income brackets.
97.17EFFECTIVE DATE.This section is effective for taxable years beginning after
97.18December 31, 2012.

97.19    Sec. 24. Minnesota Statutes 2012, section 290.0675, subdivision 1, is amended to read:
97.20    Subdivision 1. Definitions. (a) For purposes of this section the following terms
97.21have the meanings given.
97.22(b) "Earned income" means the sum of the following, to the extent included in
97.23Minnesota taxable income:
97.24(1) earned income as defined in section 32(c)(2) of the Internal Revenue Code;
97.25(2) income received from a retirement pension, profit-sharing, stock bonus, or
97.26annuity plan; and
97.27(3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue
97.28Code.
97.29(c) "Taxable income" means net income as defined in section 290.01, subdivision 19.
97.30(d) "Earned income of lesser-earning spouse" means the earned income of the
97.31spouse with the lesser amount of earned income as defined in paragraph (b) for the taxable
97.32year minus the sum of (i) the amount for one exemption under section 151(d) of the
97.33Internal Revenue Code and (ii) one-half the amount of the standard deduction under
97.34section 63(c)(2)(A) and (4) of the Internal Revenue Code minus one-half of any addition
97.35required under section 290.01, subdivision 19a, clause (21), and one-half of the addition
98.1that would have been required under section 290.01, subdivision 19a, clause (21), if the
98.2taxpayer had claimed the standard deduction.
98.3EFFECTIVE DATE.This section is effective for taxable years beginning after
98.4December 31, 2012.

98.5    Sec. 25. Minnesota Statutes 2012, section 290.0677, subdivision 2, is amended to read:
98.6    Subd. 2. Definitions. (a) For purposes of this section, the following terms have
98.7the meanings given.
98.8    (b) "Designated area" means a:
98.9    (1) combat zone designated by Executive Order from the President of the United
98.10States;
98.11    (2) qualified hazardous duty area, designated in Public Law; or
98.12    (3) location certified by the U. S. Department of Defense as eligible for combat zone
98.13tax benefits due to the location's direct support of military operations.
98.14    (c) "Active military service" means active duty service in any of the United States
98.15armed forces, the National Guard, or reserves.
98.16    (d) "Qualified individual" means an individual who has:
98.17    (1) either (i) met one of the following criteria:
98.18    (i) has served at least 20 years in the military or;
98.19    (ii) has a service-connected disability rating of 100 percent for a total and permanent
98.20disability; or
98.21    (iii) has been determined by the military to be eligible for compensation from a
98.22pension or other retirement pay from the federal government for service in the military,
98.23as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455,
98.24or 12733; and
98.25    (2) separated from military service before the end of the taxable year.
98.26    (e) "Adjusted gross income" has the meaning given in section 61 of the Internal
98.27Revenue Code.
98.28EFFECTIVE DATE.This section is effective for taxable years beginning after
98.29December 31, 2012.

98.30    Sec. 26. Minnesota Statutes 2012, section 290.068, subdivision 3, is amended to read:
98.31    Subd. 3. Limitation; carryover. (a)(1) The credit for a taxable year beginning
98.32before January 1, 2010, and after December 31, 2012, shall not exceed the liability for
98.33tax. "Liability for tax" for purposes of this section means the tax imposed under section
99.1290.06, subdivision 1 , for the taxable year reduced by the sum of the nonrefundable
99.2credits allowed under this chapter.
99.3    (2) In the case of a corporation which is a partner in a partnership, the credit allowed
99.4for the taxable year shall not exceed the lesser of the amount determined under clause (1)
99.5for the taxable year or an amount (separately computed with respect to the corporation's
99.6interest in the trade or business or entity) equal to the amount of tax attributable to that
99.7portion of taxable income which is allocable or apportionable to the corporation's interest
99.8in the trade or business or entity.
99.9    (b) If the amount of the credit determined under this section for any taxable year
99.10exceeds the limitation under clause (a), the excess shall be a research credit carryover to
99.11each of the 15 succeeding taxable years. The entire amount of the excess unused credit for
99.12the taxable year shall be carried first to the earliest of the taxable years to which the credit
99.13may be carried and then to each successive year to which the credit may be carried. The
99.14amount of the unused credit which may be added under this clause shall not exceed the
99.15taxpayer's liability for tax less the research credit for the taxable year.
99.16EFFECTIVE DATE.This section is effective for taxable years beginning after
99.17December 31, 2012.

99.18    Sec. 27. Minnesota Statutes 2012, section 290.068, subdivision 6a, is amended to read:
99.19    Subd. 6a. Credit to be refundable. If the amount of credit allowed in this section
99.20for qualified research expenses incurred in taxable years beginning after December 31,
99.212009, and before January 1, 2013, exceeds the taxpayer's tax liability under this chapter,
99.22the commissioner shall refund the excess amount. The credit allowed for qualified research
99.23expenses incurred in taxable years beginning after December 31, 2009, and before January
99.241, 2013, must be used before any research credit earned under subdivision 3.
99.25EFFECTIVE DATE.This section is effective for taxable years beginning after
99.26December 31, 2012.

99.27    Sec. 28. Minnesota Statutes 2012, section 290.0681, subdivision 1, is amended to read:
99.28    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
99.29have the meanings given.
99.30(b) "Account" means the historic credit administration account in the special
99.31revenue fund.
99.32(c) "Office" means the State Historic Preservation Office of the Minnesota Historical
99.33Society.
100.1(d) "Project" means rehabilitation of a certified historic structure, as defined in
100.2section 47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is
100.3allowed a federal credit under section 47(a)(2) of the Internal Revenue Code.
100.4(e) "Society" means the Minnesota Historical Society.
100.5(f) "Federal credit" means the credit allowed under section 47(a)(2) of the Internal
100.6Revenue Code.
100.7(g) "Placed in service" has the meaning used in section 47 of the Internal Revenue
100.8Code.
100.9(h) "Qualified rehabilitation expenditures" has the meaning given in section 47 of
100.10the Internal Revenue Code.
100.11EFFECTIVE DATE.This section is effective the day following final enactment.

100.12    Sec. 29. Minnesota Statutes 2012, section 290.0681, subdivision 3, is amended to read:
100.13    Subd. 3. Applications; allocations. (a) To qualify for a credit or grant under this
100.14section, the developer of a project must apply to the office before the rehabilitation
100.15begins. The application must contain the information and be in the form prescribed by
100.16the office. The office may collect a fee for application of up to $5,000, based on 0.5
100.17percent of estimated qualified rehabilitation expenses, not to exceed $35,000, to offset
100.18costs associated with personnel and administrative expenses related to administering the
100.19credit and preparing the economic impact report in subdivision 9. Application fees are
100.20deposited in the account. The application must indicate if the application is for a credit
100.21or a grant in lieu of the credit or a combination of the two and designate the taxpayer
100.22qualifying for the credit or the recipient of the grant.
100.23    (b) Upon approving an application for credit, the office shall issue allocation
100.24certificates that:
100.25    (1) verify eligibility for the credit or grant;
100.26    (2) state the amount of credit or grant anticipated with the project, with the credit
100.27amount equal to 100 percent and the grant amount equal to 90 percent of the federal
100.28credit anticipated in the application;
100.29    (3) state that the credit or grant allowed may increase or decrease if the federal
100.30credit the project receives at the time it is placed in service is different than the amount
100.31anticipated at the time the allocation certificate is issued; and
100.32    (4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer
100.33or grant recipient is entitled to receive the credit or grant at the time the project is placed
100.34in service, provided that date is within three calendar years following the issuance of
100.35the allocation certificate.
101.1    (c) The office, in consultation with the commissioner of revenue, shall determine
101.2if the project is eligible for a credit or a grant under this section and must notify the
101.3developer in writing of its determination. Eligibility for the credit is subject to review
101.4and audit by the commissioner of revenue.
101.5    (d) The federal credit recapture and repayment requirements under section 50 of the
101.6Internal Revenue Code do not apply to the credit allowed under this section.
101.7(e) Any decision of the office under paragraph (c) may be challenged as a contested
101.8case under chapter 14. The contested case proceeding must be initiated within 45 days of
101.9the date of written notification by the office.
101.10EFFECTIVE DATE.This section is effective the day following final enactment.

101.11    Sec. 30. Minnesota Statutes 2012, section 290.0681, subdivision 4, is amended to read:
101.12    Subd. 4. Credit certificates; grants. (a)(1) The developer of a project for which the
101.13office has issued an allocation certificate must notify the office when the project is placed
101.14in service. Upon verifying that the project has been placed in service, and was allowed a
101.15federal credit, the office must issue a credit certificate to the taxpayer designated in the
101.16application or must issue a grant to the recipient designated in the application. The credit
101.17certificate must state the amount of the credit.
101.18    (2) The credit amount equals the federal credit allowed for the project.
101.19    (3) The grant amount equals 90 percent of the federal credit allowed for the project.
101.20    (b) The recipient of a credit certificate may assign the certificate to another taxpayer,
101.21which is then allowed the credit under this section or section 297I.20, subdivision 3. An
101.22assignment is not valid unless the assignee notifies the commissioner within 30 days of the
101.23date that the assignment is made. The commissioner shall prescribe the forms necessary
101.24for notifying the commissioner of the assignment of a credit certificate and for claiming
101.25a credit by assignment.
101.26    (c) Credits passed through to partners, members, shareholders, or owners pursuant to
101.27subdivision 5 are not an assignment of a credit certificate under this subdivision.
101.28    (d) A grant agreement between the office and the recipient of a grant may allow the
101.29grant to be issued to another individual or entity.
101.30EFFECTIVE DATE.This section is effective the day following final enactment.

101.31    Sec. 31. Minnesota Statutes 2012, section 290.0681, subdivision 5, is amended to read:
101.32    Subd. 5. Partnerships; multiple owners. Credits granted to a partnership, a limited
101.33liability company taxed as a partnership, S corporation, or multiple owners of property
102.1are passed through to the partners, members, shareholders, or owners, respectively, pro
102.2rata to each partner, member, shareholder, or owner based on their share of the entity's
102.3assets or as specially allocated in their organizational documents or any other executed
102.4agreement, as of the last day of the taxable year.
102.5EFFECTIVE DATE.This section is effective the day following final enactment.

102.6    Sec. 32. [290.0693] VETERANS JOBS TAX CREDIT.
102.7    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
102.8have the meanings given.
102.9(b) "Date of hire" means the day that the qualified employee begins performing
102.10services as an employee of the qualified employer.
102.11(c) "Disabled veteran" is a veteran who has had a service-connected disability rating
102.12as adjudicated by the United States Veterans Administration, or by the retirement board of
102.13one of the several branches of the armed forces.
102.14(d)(1) "Qualified employee" means an employee as defined in section 290.92,
102.15subdivision 1, who meets the following criteria:
102.16(i) the employee is a resident of Minnesota on the date of hire;
102.17(ii) the employee is paid wages as defined in section 290.92, subdivision 1; and
102.18(iii) the employee's wages are attributable to Minnesota under section 290.191,
102.19subdivision 12;
102.20(2) Qualified employee does not include:
102.21(i) any employee who bears any of the relationships to the employer described in
102.22subparagraphs (A) to (G) of section 152(d)(2) of the Internal Revenue Code;
102.23(ii) if the employer is a corporation, an employee who owns, directly or indirectly,
102.24more than 50 percent in value of the outstanding stock of the corporation, or if the
102.25employer is an entity other than a corporation, an employee who owns, directly or
102.26indirectly, more than 50 percent of the capital and profits interests in the entity, as
102.27determined with the application of section 267(c) of the Internal Revenue Code; or
102.28(iii) if the employer is an estate or trust, any employee who is a fiduciary of the estate
102.29or trust, or is an individual who bears any of the relationships described in subparagraphs
102.30(A) to (G) of section 152(d)(2) of the Internal Revenue Code to a grantor, beneficiary,
102.31or fiduciary of the estate or trust.
102.32(e) "Qualified employer" means an employer that hired a disabled veteran, or an
102.33unemployed veteran as a qualified employee.
102.34(f) "Unemployed veteran" is a veteran who:
103.1(1) received unemployment compensation under state or federal law at any time
103.2during the two-year period prior to the date of hire; and
103.3(2) was unemployed on the date of hire.
103.4(g) "Veteran" has the meaning given in section 197.447.
103.5    Subd. 2. Credit allowed. (a) A qualified employer is allowed a credit for each of
103.6the following individuals that the qualified employer hires as a qualified employee during
103.7taxable years beginning after December 31, 2012, and before January 1, 2017:
103.8(1) a disabled veteran; or
103.9(2) an unemployed veteran.
103.10(b) Subject to the requirements of this section, there is no limit to the number of
103.11credits that a qualified employer may claim under this section during a taxable year.
103.12(c) A qualified employer may claim the credit either for the taxable year in which
103.13the qualified employee is hired, or in the next taxable year, but may claim the credit only
103.14once for each qualified employee.
103.15    Subd. 3. Credit amount for hiring certain veterans. (a) A qualified employer who
103.16is required to file a return under section 289A.08, subdivision 1, 2, or 3, is allowed a credit
103.17against the tax imposed by this chapter as determined under this subdivision.
103.18(b) For hiring a disabled veteran as a qualified employee, the credit equals ten
103.19percent of the wages paid to the qualified employee during the taxable year, but the
103.20amount of the credit shall not exceed $1,200.
103.21(c) For hiring an unemployed veteran as a qualified employee, the credit equals
103.22ten percent of the wages paid to the qualified employee during the taxable year, but the
103.23amount of the credit shall not exceed $600.
103.24(d) The credit is limited to the liability for tax under this chapter for the taxable year.
103.25(e) A qualified employer is allowed only one of the credits authorized under
103.26paragraphs (b) and (c) upon hiring a disabled veteran, or an unemployed veteran as a
103.27qualified employee.
103.28(f) A qualified employer may not claim a credit under this subdivision for hiring
103.29a disabled veteran, or an unemployed veteran as a qualified employee if the qualified
103.30employer currently employs or has previously employed the disabled veteran, or
103.31unemployed veteran.
103.32    Subd. 4. Flow-through entities. Credits granted to a partnership, limited liability
103.33company taxed as a partnership, S corporation, or multiple owners of a business are passed
103.34through to the partners, members, shareholders, or owners, respectively, pro rata to each
103.35partner, member, shareholder, or owner based on their share of the entity's assets or as
103.36specially allocated in their organizational documents, as of the last day of the taxable year.
104.1EFFECTIVE DATE.This section is effective for taxable years beginning after
104.2December 31, 2012.

104.3    Sec. 33. Minnesota Statutes 2012, section 290.091, subdivision 2, is amended to read:
104.4    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
104.5terms have the meanings given:
104.6    (a) "Alternative minimum taxable income" means the sum of the following for
104.7the taxable year:
104.8    (1) the taxpayer's federal alternative minimum taxable income as defined in section
104.955(b)(2) of the Internal Revenue Code;
104.10    (2) the taxpayer's itemized deductions allowed in computing federal alternative
104.11minimum taxable income, but excluding:
104.12    (i) the charitable contribution deduction under section 170 of the Internal Revenue
104.13Code;
104.14    (ii) (i) the medical expense deduction;
104.15    (iii) (ii) the casualty, theft, and disaster loss deduction; and
104.16    (iv) (iii) the impairment-related work expenses of a disabled person;
104.17    (3) for depletion allowances computed under section 613A(c) of the Internal
104.18Revenue Code, with respect to each property (as defined in section 614 of the Internal
104.19Revenue Code), to the extent not included in federal alternative minimum taxable income,
104.20the excess of the deduction for depletion allowable under section 611 of the Internal
104.21Revenue Code for the taxable year over the adjusted basis of the property at the end of the
104.22taxable year (determined without regard to the depletion deduction for the taxable year);
104.23    (4) to the extent not included in federal alternative minimum taxable income, the
104.24amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
104.25Internal Revenue Code determined without regard to subparagraph (E);
104.26    (5) to the extent not included in federal alternative minimum taxable income, the
104.27amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
104.28    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
104.29to (9), (12), (13), and (16) to (18) (7) to (9), (11), and (12);
104.30    less the sum of the amounts determined under the following:
104.31    (1) interest income as defined in section 290.01, subdivision 19b, clause (1);
104.32    (2) an overpayment of state income tax as provided by section 290.01, subdivision
104.3319b , clause (2), to the extent included in federal alternative minimum taxable income;
104.34    (3) the amount of investment interest paid or accrued within the taxable year on
104.35indebtedness to the extent that the amount does not exceed net investment income, as
105.1defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
105.2amounts deducted in computing federal adjusted gross income;
105.3    (4) amounts subtracted from federal taxable income as provided by section 290.01,
105.4subdivision 19b , clauses (6), (8) to (14), and (16) (6) to (12), (14), and (18); and
105.5(5) the amount of the net operating loss allowed under section 290.095, subdivision
105.611 , paragraph (c).
105.7    In the case of an estate or trust, alternative minimum taxable income must be
105.8computed as provided in section 59(c) of the Internal Revenue Code.
105.9    (b) "Investment interest" means investment interest as defined in section 163(d)(3)
105.10of the Internal Revenue Code.
105.11    (c) "Net minimum tax" means the minimum tax imposed by this section.
105.12    (d) "Regular tax" means the tax that would be imposed under this chapter (without
105.13regard to this section and section 290.032), reduced by the sum of the nonrefundable
105.14credits allowed under this chapter.
105.15    (e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
105.16income after subtracting the exemption amount determined under subdivision 3.
105.17EFFECTIVE DATE.This section is effective for taxable years beginning after
105.18December 31, 2012.

105.19    Sec. 34. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
105.20    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
105.21income" is Minnesota net income as defined in section 290.01, subdivision 19, and
105.22includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
105.23(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
105.24Minnesota tax return, the minimum tax must be computed on a separate company basis.
105.25If a corporation is part of a tax group filing a unitary return, the minimum tax must be
105.26computed on a unitary basis. The following adjustments must be made.
105.27(1) For purposes of the depreciation adjustments under section 56(a)(1) and
105.2856(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
105.29service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
105.30income tax purposes, including any modification made in a taxable year under section
105.31290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
105.32paragraph (c).
105.33For taxable years beginning after December 31, 2000, the amount of any remaining
105.34modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
106.1section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
106.2allowance in the first taxable year after December 31, 2000.
106.3(2) The portion of the depreciation deduction allowed for federal income tax
106.4purposes under section 168(k) of the Internal Revenue Code that is required as an addition
106.5under section 290.01, subdivision 19c, clause (15) (12), is disallowed in determining
106.6alternative minimum taxable income.
106.7(3) The subtraction for depreciation allowed under section 290.01, subdivision
106.819d , clause (17) (16), is allowed as a depreciation deduction in determining alternative
106.9minimum taxable income.
106.10(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
106.11of the Internal Revenue Code does not apply.
106.12(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
106.13Revenue Code does not apply.
106.14(6) The special rule for dividends from section 936 companies under section
106.1556(g)(4)(C)(iii) does not apply.
106.16(7) (6) The tax preference for depletion under section 57(a)(1) of the Internal
106.17Revenue Code does not apply.
106.18(8) (7) The tax preference for intangible drilling costs under section 57(a)(2) of the
106.19Internal Revenue Code must be calculated without regard to subparagraph (E) and the
106.20subtraction under section 290.01, subdivision 19d, clause (4).
106.21(9) (8) The tax preference for tax exempt interest under section 57(a)(5) of the
106.22Internal Revenue Code does not apply.
106.23(10) (9) The tax preference for charitable contributions of appreciated property
106.24under section 57(a)(6) of the Internal Revenue Code does not apply.
106.25(11) (10) For purposes of calculating the tax preference for accelerated depreciation
106.26or amortization on certain property placed in service before January 1, 1987, under section
106.2757(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
106.28deduction allowed under section 290.01, subdivision 19e.
106.29For taxable years beginning after December 31, 2000, the amount of any remaining
106.30modification made under section 290.01, subdivision 19e, not previously deducted is a
106.31depreciation or amortization allowance in the first taxable year after December 31, 2004.
106.32(12) (11) For purposes of calculating the adjustment for adjusted current earnings
106.33in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
106.34income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
106.35minimum taxable income as defined in this subdivision, determined without regard to the
106.36adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
107.1(13) (12) For purposes of determining the amount of adjusted current earnings
107.2under section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under
107.3section 56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign
107.4dividend gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1),
107.5(ii) the amount of refunds of income, excise, or franchise taxes subtracted as provided in
107.6section 290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other
107.7like income subtracted as provided in section 290.01, subdivision 19d, clause (10).
107.8(14) (13) Alternative minimum taxable income excludes the income from operating
107.9in a job opportunity building zone as provided under section 469.317.
107.10(15) (14) Alternative minimum taxable income excludes the income from operating
107.11in a biotechnology and health sciences industry zone as provided under section 469.337.
107.12Items of tax preference must not be reduced below zero as a result of the
107.13modifications in this subdivision.
107.14EFFECTIVE DATE.This section is effective for taxable years beginning after
107.15December 31, 2012.

107.16    Sec. 35. Minnesota Statutes 2012, section 290.0922, subdivision 1, is amended to read:
107.17    Subdivision 1. Imposition. (a) In addition to the tax imposed by this chapter without
107.18regard to this section, the franchise tax imposed on a corporation required to file under
107.19section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation
107.20under section 290.9725 for the taxable year includes a tax equal to the following amounts:

107.21 107.22	If the sum of the corporation's Minnesota property, payrolls, and sales or receipts is:							the tax equals:
107.23			less than		$	500,000		$	0
107.24		$	500,000	to	$	999,999		$	100
107.25		$	1,000,000	to	$	4,999,999		$	300
107.26		$	5,000,000	to	$	9,999,999		$	1,000
107.27		$	10,000,000	to	$	19,999,999		$	2,000
107.28		$	20,000,000	or	more			$	5,000
107.29			less than		$	930,000		$	0
107.30		$	930,000	to	$	1,869,999		$	190
107.31		$	1,870,000	to	$	9,339,999		$	560
107.32		$	9,340,000	to	$	18,679,999		$	1,870
107.33		$	18,680,000	to	$	37,359,999		$	3,740
107.34		$	37,360,000	or	more			$	9,340

107.35    (b) A tax is imposed for each taxable year on a corporation required to file a return
107.36under section 289A.12, subdivision 3, that is treated as an "S" corporation under section
107.37290.9725 and on a partnership required to file a return under section 289A.12, subdivision
108.13 , other than a partnership that derives over 80 percent of its income from farming. The
108.2tax imposed under this paragraph is due on or before the due date of the return for the
108.3taxpayer due under section 289A.18, subdivision 1. The commissioner shall prescribe
108.4the return to be used for payment of this tax. The tax under this paragraph is equal to
108.5the following amounts:

108.6 108.7 108.8 108.9	If the sum of the S corporation's or partnership's Minnesota property, payrolls, and sales or receipts is:							the tax equals:
108.10			less than		$	500,000		$	0
108.11		$	500,000	to	$	999,999		$	100
108.12		$	1,000,000	to	$	4,999,999		$	300
108.13		$	5,000,000	to	$	9,999,999		$	1,000
108.14		$	10,000,000	to	$	19,999,999		$	2,000
108.15		$	20,000,000	or	more			$	5,000
108.16			less than		$	930,000		$	0
108.17		$	930,000	to	$	1,869,999		$	190
108.18		$	1,870,000	to	$	9,339,999		$	560
108.19		$	9,340,000	to	$	18,679,999		$	1,870
108.20		$	18,680,000	to	$	37,359,999		$	3,740
108.21		$	37,360,000	or	more			$	9,340

108.22    (c) The commissioner shall adjust the dollar amounts of both the tax and the property,
108.23payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage
108.24determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
108.25that in section 1(f)(3)(B) the word "2012" must be substituted for the word "1992." For
108.262014, the commissioner shall determine the percentage change from the 12 months ending
108.27on August 31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent
108.28year, from the 12 months ending on August 31, 2012, to the 12 months ending on August
108.2931 of the year preceding the taxable year. The determination of the commissioner pursuant
108.30to this subdivision is not a "rule" subject to the Administrative Procedure Act contained in
108.31chapter 14. The tax amounts as adjusted must be rounded to the nearest $10 amount and
108.32the threshold amounts must be adjusted to the nearest $10,000 amount. For tax amounts
108.33that end in $5, the amount is rounded up to the nearest $10 amount and for the threshold
108.34amounts that end in $5,000, the amount is rounded up to the nearest $10,000.
108.35EFFECTIVE DATE.This section is effective for taxable years beginning after
108.36December 31, 2012.

108.37    Sec. 36. Minnesota Statutes 2012, section 290.17, subdivision 4, is amended to read:
109.1    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
109.2within this state or partly within and partly without this state is part of a unitary business,
109.3the entire income of the unitary business is subject to apportionment pursuant to section
109.4290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
109.5business is considered to be derived from any particular source and none may be allocated
109.6to a particular place except as provided by the applicable apportionment formula. The
109.7provisions of this subdivision do not apply to business income subject to subdivision 5,
109.8income of an insurance company, or income of an investment company determined under
109.9section 290.36.
109.10(b) The term "unitary business" means business activities or operations which
109.11result in a flow of value between them. The term may be applied within a single legal
109.12entity or between multiple entities and without regard to whether each entity is a sole
109.13proprietorship, a corporation, a partnership or a trust.
109.14(c) Unity is presumed whenever there is unity of ownership, operation, and use,
109.15evidenced by centralized management or executive force, centralized purchasing,
109.16advertising, accounting, or other controlled interaction, but the absence of these
109.17centralized activities will not necessarily evidence a nonunitary business. Unity is also
109.18presumed when business activities or operations are of mutual benefit, dependent upon or
109.19contributory to one another, either individually or as a group.
109.20(d) Where a business operation conducted in Minnesota is owned by a business
109.21entity that carries on business activity outside the state different in kind from that
109.22conducted within this state, and the other business is conducted entirely outside the state, it
109.23is presumed that the two business operations are unitary in nature, interrelated, connected,
109.24and interdependent unless it can be shown to the contrary.
109.25(e) Unity of ownership is does not deemed to exist when a corporation is two or
109.26more corporations are involved unless that corporation is a member of a group of two or
109.27more business entities and more than 50 percent of the voting stock of each member of
109.28the group corporation is directly or indirectly owned by a common owner or by common
109.29owners, either corporate or noncorporate, or by one or more of the member corporations
109.30of the group. For this purpose, the term "voting stock" shall include membership interests
109.31of mutual insurance holding companies formed under section 66A.40.
109.32(f) The net income and apportionment factors under section 290.191 or 290.20 of
109.33foreign corporations and other foreign entities which are part of a unitary business shall
109.34not be included in the net income or the apportionment factors of the unitary business. A
109.35foreign corporation or other foreign entity which is not included on a combined report and
109.36which is required to file a return under this chapter shall file on a separate return basis.
110.1The net income and apportionment factors under section 290.191 or 290.20 of foreign
110.2operating corporations shall not be included in the net income or the apportionment
110.3factors of the unitary business except as provided in paragraph (g). The legislature intends
110.4that the provisions of this paragraph are not severable from the provisions of section
110.5290.01, subdivision 5, clauses (4) and (5), and if any of those provisions are found to be
110.6unconstitutional, the provisions of this paragraph are void for the respective taxable years.
110.7(g) The adjusted net income of a foreign operating corporation shall be deemed to
110.8be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
110.9proportion to each shareholder's ownership, with which such corporation is engaged in
110.10a unitary business. Such deemed dividend shall be treated as a dividend under section
110.11290.21, subdivision 4.
110.12Dividends actually paid by a foreign operating corporation to a corporate shareholder
110.13which is a member of the same unitary business as the foreign operating corporation shall
110.14be eliminated from the net income of the unitary business in preparing a combined report
110.15for the unitary business. The adjusted net income of a foreign operating corporation
110.16shall be its net income adjusted as follows:
110.17(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
110.18Rico, or a United States possession or political subdivision of any of the foregoing shall
110.19be a deduction; and
110.20(2) the subtraction from federal taxable income for payments received from foreign
110.21corporations or foreign operating corporations under section 290.01, subdivision 19d,
110.22clause (10), shall not be allowed.
110.23If a foreign operating corporation incurs a net loss, neither income nor deduction from
110.24that corporation shall be included in determining the net income of the unitary business.
110.25(h) (g) For purposes of determining the net income of a unitary business and the
110.26factors to be used in the apportionment of net income pursuant to section 290.191 or
110.27290.20 , there must be included only the income and apportionment factors of domestic
110.28corporations or other domestic entities other than foreign operating corporations that are
110.29determined to be part of the unitary business pursuant to this subdivision, notwithstanding
110.30that foreign corporations or other foreign entities might be included in the unitary business.
110.31(i) (h) Deductions for expenses, interest, or taxes otherwise allowable under
110.32this chapter that are connected with or allocable against dividends, deemed dividends
110.33described in paragraph (g), or royalties, fees, or other like income described in section
110.34290.01, subdivision 19d , clause (10), shall not be disallowed.
110.35(j) (i) Each corporation or other entity, except a sole proprietorship, that is part
110.36of a unitary business must file combined reports as the commissioner determines.
111.1On the reports, all intercompany transactions between entities included pursuant to
111.2paragraph (h) (g) must be eliminated and the entire net income of the unitary business
111.3determined in accordance with this subdivision is apportioned among the entities by
111.4using each entity's Minnesota factors for apportionment purposes in the numerators of
111.5the apportionment formula and the total factors for apportionment purposes of all entities
111.6included pursuant to paragraph (h) (g) in the denominators of the apportionment formula.
111.7 Except as otherwise provided by paragraph (f), all sales of the unitary business made
111.8within Minnesota pursuant to section 290.191 or 290.20 must be included on the separate
111.9combined report of a corporation that is a member of the unitary business and is subject to
111.10the jurisdiction of this state to impose tax under this chapter.
111.11(k) (j) If a corporation has been divested from a unitary business and is included in a
111.12combined report for a fractional part of the common accounting period of the combined
111.13report:
111.14(1) its income includable in the combined report is its income incurred for that part
111.15of the year determined by proration or separate accounting; and
111.16(2) its sales, property, and payroll included in the apportionment formula must
111.17be prorated or accounted for separately.
111.18EFFECTIVE DATE.This section is effective for taxable years beginning after
111.19December 31, 2012.

111.20    Sec. 37. Minnesota Statutes 2012, section 290.21, subdivision 4, is amended to read:
111.21    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
111.22of dividends received by a corporation during the taxable year from another corporation,
111.23in which the recipient owns 20 percent or more of the stock, by vote and value, not
111.24including stock described in section 1504(a)(4) of the Internal Revenue Code when the
111.25corporate stock with respect to which dividends are paid does not constitute the stock in
111.26trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
111.27constitute property held by the taxpayer primarily for sale to customers in the ordinary
111.28course of the taxpayer's trade or business, or when the trade or business of the taxpayer
111.29does not consist principally of the holding of the stocks and the collection of the income
111.30and gains therefrom; and
111.31    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
111.32an affiliated company transferred in an overall plan of reorganization and the dividend
111.33is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
111.34amended through December 31, 1989;
112.1    (ii) the remaining 20 percent of dividends if the dividends are received from a
112.2corporation which is subject to tax under section 290.36 and which is a member of an
112.3affiliated group of corporations as defined by the Internal Revenue Code and the dividend
112.4is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
112.5amended through December 31, 1989, or is deducted under an election under section
112.6243(b) of the Internal Revenue Code; or
112.7    (iii) the remaining 20 percent of the dividends if the dividends are received from a
112.8property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
112.9member of an affiliated group of corporations as defined by the Internal Revenue Code
112.10and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
112.111.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
112.12under an election under section 243(b) of the Internal Revenue Code.
112.13    (b) Seventy percent of dividends received by a corporation during the taxable year
112.14from another corporation in which the recipient owns less than 20 percent of the stock,
112.15by vote or value, not including stock described in section 1504(a)(4) of the Internal
112.16Revenue Code when the corporate stock with respect to which dividends are paid does not
112.17constitute the stock in trade of the taxpayer, or does not constitute property held by the
112.18taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
112.19business, or when the trade or business of the taxpayer does not consist principally of the
112.20holding of the stocks and the collection of income and gain therefrom.
112.21    (c) The dividend deduction provided in this subdivision shall be allowed only with
112.22respect to dividends that are included in a corporation's Minnesota taxable net income
112.23for the taxable year.
112.24    The dividend deduction provided in this subdivision does not apply to a dividend
112.25from a corporation which, for the taxable year of the corporation in which the distribution
112.26is made or for the next preceding taxable year of the corporation, is a corporation exempt
112.27from tax under section 501 of the Internal Revenue Code.
112.28The dividend deduction provided in this subdivision does not apply to a dividend
112.29received from a real estate investment trust, as defined in section 856 of the Internal
112.30Revenue Code.
112.31    The dividend deduction provided in this subdivision applies to the amount of
112.32regulated investment company dividends only to the extent determined under section
112.33854(b) of the Internal Revenue Code.
112.34    The dividend deduction provided in this subdivision shall not be allowed with
112.35respect to any dividend for which a deduction is not allowed under the provisions of
112.36section 246(c) of the Internal Revenue Code.
113.1    (d) If dividends received by a corporation that does not have nexus with Minnesota
113.2under the provisions of Public Law 86-272 are included as income on the return of
113.3an affiliated corporation permitted or required to file a combined report under section
113.4290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the
113.5determination as to whether the trade or business of the corporation consists principally
113.6of the holding of stocks and the collection of income and gains therefrom shall be made
113.7with reference to the trade or business of the affiliated corporation having a nexus with
113.8Minnesota.
113.9    (e) The deduction provided by this subdivision does not apply if the dividends are
113.10paid by a FSC as defined in section 922 of the Internal Revenue Code.
113.11    (f) If one or more of the members of the unitary group whose income is included on
113.12the combined report received a dividend, the deduction under this subdivision for each
113.13member of the unitary business required to file a return under this chapter is the product
113.14of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
113.15allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
113.16income apportionable to this state for the taxable year under section 290.191 or 290.20.
113.17EFFECTIVE DATE.This section is effective for taxable years beginning after
113.18December 31, 2012.

113.19    Sec. 38. Minnesota Statutes 2012, section 290A.03, subdivision 15, as amended by
113.20Laws 2013, chapter 3, section 5, is amended to read:
113.21    Subd. 15. Internal Revenue Code. For taxable years beginning before January 1,
113.222012, and after December 31, 2012, "Internal Revenue Code" means the Internal Revenue
113.23Code of 1986, as amended through April 14, 2011; and for taxable years beginning after
113.24December 31, 2011, and before January 1, 2013, "Internal Revenue Code" means the
113.25Internal Revenue Code of 1986, as amended through January 3, 2013.
113.26EFFECTIVE DATE.This section is effective for property tax refunds based on
113.27property taxes payable after December 31, 2013, and rent paid after December 31, 2012.

113.28    Sec. 39. Minnesota Statutes 2012, section 298.01, subdivision 3b, is amended to read:
113.29    Subd. 3b. Deductions. (a) For purposes of determining taxable income under
113.30subdivision 3, the deductions from gross income include only those expenses necessary
113.31to convert raw ores to marketable quality. Such expenses include costs associated with
113.32refinement but do not include expenses such as transportation, stockpiling, marketing, or
113.33marine insurance that are incurred after marketable ores are produced, unless the expenses
114.1are included in gross income. The allowable deductions from a mine or plant that mines
114.2and produces more than one mineral, metal, or energy resource must be determined
114.3separately for the purposes of computing the deduction in section 290.01, subdivision 19c,
114.4clause (9) (8). These deductions may be combined on one occupation tax return to arrive
114.5at the deduction from gross income for all production.
114.6(b) The provisions of section 290.01, subdivisions 19c, clauses (6) and (9), and 19d,
114.7clauses (7) and (11), are not used to determine taxable income.

114.8    Sec. 40. ESTIMATED TAXES; EXCEPTIONS.
114.9No addition to tax, penalties, or interest may be made under Minnesota Statutes,
114.10section 289A.25, for any period before September 15, 2013, with respect to an
114.11underpayment of estimated tax, to the extent that the underpayment was created or
114.12increased by the increase in income tax rates under this article.
114.13EFFECTIVE DATE.This section is effective for taxable years beginning after
114.14December 31, 2012.

114.15    Sec. 41. REPEALER.
114.16Minnesota Statutes 2012, sections 290.01, subdivision 6b; 290.06, subdivision 22a;
114.17290.0672; and 290.0921, subdivision 7, are repealed.
114.18EFFECTIVE DATE.This section is effective for taxable years beginning after
114.19December 31, 2012.


114.22    Section 1. Minnesota Statutes 2012, section 289A.10, subdivision 1, is amended to read:
114.23    Subdivision 1. Return required. In the case of a decedent who has an interest in
114.24property with a situs in Minnesota, the personal representative must submit a Minnesota
114.25estate tax return to the commissioner, on a form prescribed by the commissioner, if:
114.26(1) a federal estate tax return is required to be filed; or
114.27(2) the sum of the federal gross estate and federal adjusted taxable gifts made within
114.28three years of the date of the decedent's death exceeds $1,000,000.
114.29The return must contain a computation of the Minnesota estate tax due. The return
114.30must be signed by the personal representative.
115.1EFFECTIVE DATE.This section is effective for estates of decedents dying after
115.2December 31, 2012.

115.3    Sec. 2. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
115.4    Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
115.5terms used in this chapter shall have the following meanings:
115.6    (1) "Commissioner" means the commissioner of revenue or any person to whom the
115.7commissioner has delegated functions under this chapter.
115.8    (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
115.9and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
115.10    (3) "Internal Revenue Code" means the United States Internal Revenue Code of
115.111986, as amended through April 14, 2011 January 3, 2013, but without regard to the
115.12provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law
115.13111-312, and section 301(c) of Public Law 111-312 section 2011, paragraph (f), of the
115.14Internal Revenue Code.
115.15    (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
115.16defined by section 2011(b)(3) of the Internal Revenue Code, plus
115.17(i) the amount of deduction for state death taxes allowed under section 2058 of the
115.18Internal Revenue Code;
115.19(ii) the amount of taxable gifts, as defined in section 292.16, and made by the
115.20decedent within three years of the decedent's date of death; less
115.21(ii) (iii)(A) the value of qualified small business property under section 291.03,
115.22subdivision 9 , and the value of qualified farm property under section 291.03, subdivision
115.2310 , or (B) $4,000,000, whichever is less.
115.24    (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
115.25excluding therefrom any property included therein which has its situs outside Minnesota,
115.26and (b) including therein any property omitted from the federal gross estate which is
115.27includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
115.28authorities.
115.29    (6) "Nonresident decedent" means an individual whose domicile at the time of
115.30death was not in Minnesota.
115.31    (7) "Personal representative" means the executor, administrator or other person
115.32appointed by the court to administer and dispose of the property of the decedent. If there
115.33is no executor, administrator or other person appointed, qualified, and acting within this
115.34state, then any person in actual or constructive possession of any property having a situs in
115.35this state which is included in the federal gross estate of the decedent shall be deemed
116.1to be a personal representative to the extent of the property and the Minnesota estate tax
116.2due with respect to the property.
116.3    (8) "Resident decedent" means an individual whose domicile at the time of death
116.4was in Minnesota.
116.5    (9) "Situs of property" means, with respect to:
116.6    (i) real property, the state or country in which it is located; with respect to
116.7    (ii) tangible personal property, the state or country in which it was normally kept or
116.8located at the time of the decedent's death or for a gift of tangible personal property within
116.9three years of death, the state or country in which it was normally kept or located when
116.10the gift was executed; and with respect to
116.11    (iii) intangible personal property, the state or country in which the decedent was
116.12domiciled at death or for a gift of intangible personal property within three years of death,
116.13the state or country in which the decedent was domiciled when the gift was executed.
116.14    For a nonresident decedent with an ownership interest in a pass-through entity
116.15with assets that include real or tangible personal property, situs of the real or tangible
116.16personal property is determined as if the pass-through entity does not exist and the real
116.17or tangible personal property is personally owned by the decedent. If the pass-through
116.18entity is owned by a person or persons in addition to the decedent, ownership of the
116.19property is attributed to the decedent in proportion to the decedent's capital ownership
116.20share of the pass-through entity.
116.21(10) "Pass-through entity" includes the following:
116.22(i) an entity electing S corporation status under section 1362 of the Internal Revenue
116.23Code;
116.24(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
116.25(iii) a single-member limited liability company or similar entity, regardless of
116.26whether it is taxed as an association or is disregarded for federal income tax purposes
116.27under Code of Federal Regulations, title 26, section 301.7701-3; or
116.28(iv) a trust to the extent the property is includible in the decedent's federal gross estate.
116.29EFFECTIVE DATE.This section is effective for decedents dying after December
116.3031, 2012.

116.31    Sec. 3. Minnesota Statutes 2012, section 291.03, subdivision 1, is amended to read:
116.32    Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
116.33proportion of the maximum credit for state death taxes computed under section 2011 of
116.34the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal
117.1adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal
117.2gross estate. The tax is reduced by:
117.3    (1) the gift tax paid by the decedent under section 292.17 on gifts included in the
117.4Minnesota adjusted gross estate and not subtracted as qualified farm or small business
117.5property; and
117.6    (2) any credit allowed under subdivision 1c.
117.7    (b) The tax determined under this subdivision must not be greater than the sum of
117.8the following amounts multiplied by a fraction, the numerator of which is the Minnesota
117.9gross estate and the denominator of which is the federal gross estate:
117.10    (1) the rates and brackets under section 2001(c) of the Internal Revenue Code
117.11multiplied by the sum of:
117.12    (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
117.13    (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
117.14Code; less
117.15(iii) the lesser of (A) the sum of the value of qualified small business property
117.16under subdivision 9, and the value of qualified farm property under subdivision 10, or
117.17(B) $4,000,000; less
117.18    (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
117.19Code; and less
117.20    (3) the federal credit allowed under section 2010 of the Internal Revenue Code.
117.21    (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
117.22Revenue Code of 1986, as amended through December 31, 2000.
117.23EFFECTIVE DATE.This section is effective for decedents dying after December
117.2431, 2012.

117.25    Sec. 4. Minnesota Statutes 2012, section 291.03, is amended by adding a subdivision
117.26to read:
117.27    Subd. 1c. Nonresident decedent tax credit. (a) The estate of a nonresident
117.28decedent that is subject to tax under this chapter on the value of Minnesota situs property
117.29held in a pass-through entity is allowed a credit against the tax due under this section
117.30equal to the lesser of:
117.31(1) the amount of estate or inheritance tax paid to another state that is attributable to
117.32the Minnesota situs property held in the pass-through entity; or
117.33(2) the amount of tax paid under this section attributable to the Minnesota situs
117.34property held in the pass-through entity.
118.1(b) The amount of tax attributable to the Minnesota situs property held in the
118.2pass-through entity must be determined by the increase in the estate or inheritance tax that
118.3results from including the market value of the property in the estate or treating the value
118.4as a taxable inheritance to the recipient of the property.
118.5EFFECTIVE DATE.This section is effective for decedents dying after December
118.631, 2012.

118.7    Sec. 5. Minnesota Statutes 2012, section 291.03, subdivision 8, is amended to read:
118.8    Subd. 8. Definitions. (a) For purposes of this section, the following terms have the
118.9meanings given in this subdivision.
118.10(b) "Family member" means a family member as defined in section 2032A(e)(2) of
118.11the Internal Revenue Code, or a trust whose present beneficiaries are all family members
118.12as defined in section 2032A(e)(2) of the Internal Revenue Code.
118.13(c) "Qualified heir" means a family member who acquired qualified property from
118.14 upon the death of the decedent and satisfies the requirement under subdivision 9, clause
118.15(6) (7), or subdivision 10, clause (4) (5), for the property.
118.16(d) "Qualified property" means qualified small business property under subdivision
118.179 and qualified farm property under subdivision 10.
118.18EFFECTIVE DATE.This section is effective retroactively for estates of decedents
118.19dying after June 30, 2011.

118.20    Sec. 6. Minnesota Statutes 2012, section 291.03, subdivision 9, is amended to read:
118.21    Subd. 9. Qualified small business property. Property satisfying all of the following
118.22requirements is qualified small business property:
118.23(1) The value of the property was included in the federal adjusted taxable estate.
118.24(2) The property consists of the assets of a trade or business or shares of stock or
118.25other ownership interests in a corporation or other entity engaged in a trade or business.
118.26The decedent or the decedent's spouse must have materially participated in the trade or
118.27business within the meaning of section 469 of the Internal Revenue Code during the
118.28taxable year that ended before the date of the decedent's death. Shares of stock in a
118.29corporation or an ownership interest in another type of entity do not qualify under this
118.30subdivision if the shares or ownership interests are traded on a public stock exchange at
118.31any time during the three-year period ending on the decedent's date of death. For purposes
118.32of this subdivision, an ownership interest includes the interest the decedent is deemed to
118.33own under sections 2036, 2037, and 2038 of the Internal Revenue Code.
119.1(3) During the taxable year that ended before the decedent's death, the trade or
119.2business must not have been a passive activity within the meaning of section 469(c) of the
119.3Internal Revenue Code, and the decedent or the decedent's spouse must have materially
119.4participated in the trade or business within the meaning of section 469(h) of the Internal
119.5Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other
119.6provision provided by United States Treasury Department regulation that substitutes
119.7material participation in prior taxable years for material participation in the taxable year
119.8that ended before the decedent's death.
119.9(4) The gross annual sales of the trade or business were $10,000,000 or less for the
119.10last taxable year that ended before the date of the death of the decedent.
119.11(4) (5) The property does not consist of cash or, cash equivalents, publicly traded
119.12securities, or assets not used in the operation of the trade or business. For property
119.13consisting of shares of stock or other ownership interests in an entity, the amount value of
119.14cash or, cash equivalents, publicly traded securities, or assets not used in the operation of
119.15the trade or business held by the corporation or other entity must be deducted from the
119.16value of the property qualifying under this subdivision in proportion to the decedent's
119.17share of ownership of the entity on the date of death.
119.18(5) (6) The decedent continuously owned the property, including property the
119.19decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue
119.20Code, for the three-year period ending on the date of death of the decedent. In the case of
119.21a sole proprietor, if the property replaced similar property within the three-year period,
119.22the replacement property will be treated as having been owned for the three-year period
119.23ending on the date of death of the decedent.
119.24(6) A family member continuously uses the property in the operation of the trade or
119.25business for three years following the date of death of the decedent.
119.26(7) For three years following the date of death of the decedent, the trade or business
119.27is not a passive activity within the meaning of section 469(c) of the Internal Revenue Code,
119.28and a family member materially participates in the operation of the trade or business within
119.29the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3)
119.30of the Internal Revenue Code and any other provision provided by United States Treasury
119.31Department regulation that substitutes material participation in prior taxable years for
119.32material participation in the three years following the date of death of the decedent.
119.33(8) The estate and the qualified heir elect to treat the property as qualified small
119.34business property and agree, in the form prescribed by the commissioner, to pay the
119.35recapture tax under subdivision 11, if applicable.
120.1EFFECTIVE DATE.This section is effective retroactively for estates of decedents
120.2dying after June 30, 2011.

120.3    Sec. 7. Minnesota Statutes 2012, section 291.03, subdivision 10, is amended to read:
120.4    Subd. 10. Qualified farm property. Property satisfying all of the following
120.5requirements is qualified farm property:
120.6(1) The value of the property was included in the federal adjusted taxable estate.
120.7(2) The property consists of a farm meeting the requirements of agricultural land as
120.8defined in section 500.24, subdivision 2, paragraph (g), and is owned by a person or entity
120.9that is not excluded from owning agricultural land by section 500.24, and was classified
120.10for property tax purposes as the homestead of the decedent or the decedent's spouse or
120.11both under section 273.124, and as class 2a property under section 273.13, subdivision 23.
120.12(3) For property taxes payable in the taxable year of decedent's death, the property is
120.13classified as class 2a property under section 273.13, subdivision 23, and is classified as
120.14agricultural homestead, agricultural relative homestead, or special agricultural homestead
120.15under section 273.124.
120.16(4) The decedent continuously owned the property, including property the decedent
120.17is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for
120.18the three-year period ending on the date of death of the decedent either by ownership of
120.19the agricultural land or pursuant to holding an interest in an entity that is not excluded
120.20from owning agricultural land under section 500.24.
120.21(4) A family member continuously uses the property in the operation of the trade or
120.22business (5) The property is classified for property tax purposes as class 2a property under
120.23section 273.13, subdivision 23, for three years following the date of death of the decedent.
120.24(5) (6) The estate and the qualified heir elect to treat the property as qualified farm
120.25property and agree, in a form prescribed by the commissioner, to pay the recapture tax
120.26under subdivision 11, if applicable.
120.27EFFECTIVE DATE.This section is effective retroactively for estates of decedents
120.28dying after June 30, 2011.

120.29    Sec. 8. Minnesota Statutes 2012, section 291.03, subdivision 11, is amended to read:
120.30    Subd. 11. Recapture tax. (a) If, within three years after the decedent's death and
120.31before the death of the qualified heir, the qualified heir disposes of any interest in the
120.32qualified property, other than by a disposition to a family member, or a family member
120.33ceases to use the qualified property which was acquired or passed from the decedent
120.34 satisfy the requirement under subdivision 9, clause (7); or 10, clause (5), an additional
121.1estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir
121.2replaces qualified small business property excluded under subdivision 9 with similar
121.3property, then the qualified heir will not be treated as having disposed of an interest in the
121.4qualified property.
121.5(b) The amount of the additional tax equals the amount of the exclusion claimed by
121.6the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
121.7(c) The additional tax under this subdivision is due on the day which is six months
121.8after the date of the disposition or cessation in paragraph (a).
121.9EFFECTIVE DATE.This section is effective retroactively for estates of decedents
121.10dying after June 30, 2011.

121.11    Sec. 9. [292.16] DEFINITIONS.
121.12(a) For purposes of this chapter, the following definitions apply.
121.13(b) The definitions of terms defined in section 291.005 apply.
121.14(c) "Resident" has the meaning given in section 290.01.
121.15(d) "Taxable gifts" means:
121.16(1) the transfers by gift which are included in taxable gifts for federal gift tax
121.17purposes under the following sections of the Internal Revenue Code:
121.18(i) section 2503;
121.19(ii) sections 2511 to 2514; and
121.20(iii) sections 2516 to 2519; less
121.21(2) the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.
121.22EFFECTIVE DATE.This section is effective for taxable gifts made after June
121.2330, 2013.

121.24    Sec. 10. [292.17] GIFT TAX.
121.25    Subdivision 1. Imposition. (a) A tax is imposed on the transfer of property by gift
121.26by any individual resident or nonresident in an amount equal to ten percent of the amount
121.27of the taxable gift.
121.28(b) The donor is liable for payment of the tax. If the gift tax is not paid when due,
121.29the donee of any gift is personally liable for the tax to the extent of the value of the gift.
121.30    Subd. 2. Lifetime credit. A credit is allowed against the tax imposed under this
121.31section equal to $100,000. This credit applies to the cumulative amount of taxable gifts
121.32made by the donor during the donor's lifetime.
121.33    Subd. 3. Out-of-state gifts. Taxable gifts exclude the transfer of:
122.1(1) real property located outside of this state;
122.2(2) tangible personal property that was normally kept at a location outside of the
122.3state on the date the gift was executed; and
122.4(3) intangible personal property made by an individual who is not a resident.
122.5EFFECTIVE DATE.This section is effective for taxable gifts made after June
122.630, 2013.

122.7    Sec. 11. [292.18] RETURNS.
122.8(a) Any individual who makes a taxable gift during the taxable year shall file a gift
122.9tax return in the form and manner prescribed by the commissioner.
122.10(b) If the donor dies before filing the return, the executor of the donor's will or
122.11the administrator of the donor's estate shall file the return. If the donor becomes legally
122.12incompetent before filing the return, the guardian or conservator shall file the return.
122.13(c) The return must include:
122.14(1) each gift made during the calendar year which is to be included in computing the
122.15taxable gifts;
122.16(2) the deductions claimed and allowable under section 292.16, paragraph (d),
122.17clause (2);
122.18(3) a description of the gift, and the donee's name, address, and Social Security
122.19number;
122.20(4) the fair market value of gifts not made in money; and
122.21(5) any other information the commissioner requires to administer the gift tax.
122.22EFFECTIVE DATE.This section is effective for taxable gifts made after June
122.2330, 2013.

122.24    Sec. 12. [292.19] FILING REQUIREMENTS.
122.25Gift tax returns must be filed by the April 15 following the close of the calendar
122.26year, except if a gift is made during the calendar year in which the donor dies, the return
122.27for the donor must be filed by the last date, including extensions, for filing the gift tax
122.28return for federal gift tax purposes for the donor.
122.29EFFECTIVE DATE.This section is effective for taxable gifts made after June
122.3030, 2013.

122.31    Sec. 13. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
123.1The commissioner may require the donor or the donee to show the property subject to
123.2the tax under section 292.17 to the commissioner upon demand and may employ a suitable
123.3person to appraise the property. The donor shall submit a declaration, in a form prescribed
123.4by the commissioner and including any certification required by the commissioner, that the
123.5property shown by the donor on the gift tax return includes all of the property transferred by
123.6gift for the calendar year and not deductible under section 292.16, paragraph (d), clause (2).
123.7EFFECTIVE DATE.This section is effective for taxable gifts made after June
123.830, 2013.

123.9    Sec. 14. [292.21] ADMINISTRATIVE PROVISIONS.
123.10    Subdivision 1. Payment of tax; penalty for late payment. The tax imposed under
123.11section 292.17 is due and payable to the commissioner by the April 15 following the close
123.12of the calendar year during which the gift was made. The return required under section
123.13292.19 must be included with the payment. If a taxable gift is made during the calendar
123.14year in which the donor dies, the due date is the last date, including extensions, for filing
123.15the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the
123.16tax due within the time specified under this section, a penalty applies equal to ten percent
123.17of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty
123.18bear interest at the rate under section 270C.40 from the due date of the return.
123.19    Subd. 2. Extensions. The commissioner may, for good cause, extend the time for
123.20filing a gift tax return, if a written request is filed with a tentative return accompanied by a
123.21payment of the tax, which is estimated in the tentative return, on or before the last day for
123.22filing the return. Any person to whom an extension is granted must pay, in addition to the
123.23tax, interest at the rate under section 270C.40 from the date on which the tax would have
123.24been due without the extension.
123.25    Subd. 3. Changes in federal gift tax. If the amount of a taxpayer's taxable gifts
123.26for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any
123.27calendar year, is changed or corrected by the Internal Revenue Service or other officer
123.28of the United States or other competent authority, the taxpayer shall report the change or
123.29correction in federal taxable gifts within 180 days after the final determination of the change
123.30or correction, and concede the accuracy of the determination or provide a letter detailing
123.31how the federal determination is incorrect or does not change the Minnesota gift tax. Any
123.32taxpayer filing an amended federal gift tax return shall also file within 180 days an amended
123.33return under this chapter and shall include any information the commissioner requires. The
123.34time for filing the report or amended return may be extended by the commissioner upon due
123.35cause shown. Notwithstanding any limitation of time in this chapter, if, upon examination,
124.1the commissioner finds that the taxpayer is liable for the payment of an additional tax, the
124.2commissioner shall, within a reasonable time from the receipt of the report or amended
124.3return, notify the taxpayer of the amount of additional tax, together with interest computed
124.4at the rate under section 270C.40 from the date when the original tax was due and payable.
124.5Within 30 days of the mailing of the notice, the taxpayer shall pay the commissioner the
124.6amount of the additional tax and interest. If, upon examination of the report or amended
124.7return and related information, the commissioner finds that the taxpayer has overpaid the
124.8tax due the state, the commissioner shall refund the overpayment to the taxpayer.
124.9    Subd. 4. Application of federal rules. In administering the tax under this chapter,
124.10the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal
124.11Revenue Code. The words "secretary or his delegate," as used in those sections of the
124.12Internal Revenue Code, mean the commissioner.
124.13EFFECTIVE DATE.This section is effective for taxable gifts made after June
124.1430, 2013.

124.15    Sec. 15. [292.22] CREDIT AGAINST ESTATE TAX.
124.16A credit is allowed against the estate tax imposed under chapter 291 in the amount
124.17of any tax imposed and paid under this chapter for a gift includable in the Minnesota
124.18adjusted taxable estate of the donor under section 291.005.
124.19EFFECTIVE DATE.This section is effective for taxable gifts made after June
124.2030, 2013.


124.23    Section 1. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:
124.24    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
124.25to, each of the transactions listed in this subdivision.
124.26    (b) Sale and purchase include:
124.27    (1) any transfer of title or possession, or both, of tangible personal property, whether
124.28absolutely or conditionally, for a consideration in money or by exchange or barter; and
124.29    (2) the leasing of or the granting of a license to use or consume, for a consideration
124.30in money or by exchange or barter, tangible personal property, other than a manufactured
124.31home used for residential purposes for a continuous period of 30 days or more.
125.1    (c) Sale and purchase include the production, fabrication, printing, or processing of
125.2tangible personal property for a consideration for consumers who furnish either directly or
125.3indirectly the materials used in the production, fabrication, printing, or processing.
125.4    (d) Sale and purchase include the preparing for a consideration of food.
125.5Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
125.6to, the following:
125.7    (1) prepared food sold by the retailer;
125.8    (2) soft drinks;
125.9    (3) candy;
125.10    (4) dietary supplements; and
125.11    (5) all food sold through vending machines.
125.12    (e) A sale and a purchase includes the furnishing for a consideration of electricity,
125.13gas, water, or steam for use or consumption within this state.
125.14    (f) A sale and a purchase includes the transfer for a consideration of prewritten
125.15computer software whether delivered electronically, by load and leave, or otherwise.
125.16    (g) A sale and a purchase includes the furnishing for a consideration of the following
125.17services:
125.18    (1) the privilege of admission to places of amusement, recreational areas, or athletic
125.19events, including seat licenses, the rental of box seats, suites, sky boxes, and similar
125.20facilities in stadiums and arenas and the making available of amusement devices, tanning
125.21facilities, reducing salons, steam baths, Turkish baths, health clubs, and spas or athletic
125.22facilities;
125.23    (2) lodging and related services by a hotel, rooming house, resort, campground,
125.24motel, or trailer camp, including furnishing the guest of the facility with access to
125.25telecommunication services, and the granting of any similar license to use real property in
125.26a specific facility, other than the renting or leasing of it for a continuous period of 30 days
125.27or more under an enforceable written agreement that may not be terminated without prior
125.28notice and including accommodations intermediary services provided in connection with
125.29other services provided under this clause;
125.30    (3) nonresidential parking services, whether on a contractual, hourly, or other
125.31periodic basis, except for parking at a meter;
125.32    (4) the granting of membership in a club, association, or other organization if:
125.33    (i) the club, association, or other organization makes available for the use of its
125.34members sports and athletic facilities, without regard to whether a separate charge is
125.35assessed for use of the facilities; and
126.1    (ii) use of the sports and athletic facility is not made available to the general public
126.2on the same basis as it is made available to members.
126.3Granting of membership means both onetime initiation fees and periodic membership
126.4dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
126.5squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
126.6swimming pools; and other similar athletic or sports facilities;
126.7    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
126.8material used in road construction; and delivery of concrete block by a third party if the
126.9delivery would be subject to the sales tax if provided by the seller of the concrete block; and
126.10    (6) services as provided in this clause:
126.11    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
126.12and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
126.13drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
126.14include services provided by coin operated facilities operated by the customer;
126.15    (ii) motor vehicle washing, waxing, and cleaning services, including services
126.16provided by coin operated facilities operated by the customer, and rustproofing,
126.17undercoating, and towing of motor vehicles;
126.18    (iii) building and residential cleaning, maintenance, and disinfecting services and
126.19pest control and exterminating services;
126.20    (iv) detective, security, burglar, fire alarm, and armored car services; but not including
126.21services performed within the jurisdiction they serve by off-duty licensed peace officers as
126.22defined in section 626.84, subdivision 1, or services provided by a nonprofit organization
126.23for monitoring and electronic surveillance of persons placed on in-home detention
126.24pursuant to court order or under the direction of the Minnesota Department of Corrections;
126.25    (v) pet grooming services;
126.26    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
126.27and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
126.28plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
126.29clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
126.30public utility lines. Services performed under a construction contract for the installation of
126.31shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
126.32    (vii) massages, except when provided by a licensed health care facility or
126.33professional or upon written referral from a licensed health care facility or professional for
126.34treatment of illness, injury, or disease; and
126.35    (viii) the furnishing of lodging, board, and care services for animals in kennels and
126.36other similar arrangements, but excluding veterinary and horse boarding services.
127.1    In applying the provisions of this chapter, the terms "tangible personal property"
127.2and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
127.3and the provision of these taxable services, unless specifically provided otherwise.
127.4Services performed by an employee for an employer are not taxable. Services performed
127.5by a partnership or association for another partnership or association are not taxable if
127.6one of the entities owns or controls more than 80 percent of the voting power of the
127.7equity interest in the other entity. Services performed between members of an affiliated
127.8group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
127.9group of corporations" means those entities that would be classified as members of an
127.10affiliated group as defined under United States Code, title 26, section 1504, disregarding
127.11the exclusions in section 1504(b).
127.12    For purposes of clause (5), "road construction" means construction of (1) public
127.13roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
127.14metropolitan area up to the point of the emergency response location sign.
127.15    (h) A sale and a purchase includes the furnishing for a consideration of tangible
127.16personal property or taxable services by the United States or any of its agencies or
127.17instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
127.18subdivisions.
127.19    (i) A sale and a purchase includes the furnishing for a consideration of
127.20telecommunications services, ancillary services associated with telecommunication
127.21services, cable television services, and direct satellite services. Telecommunication
127.22services include, but are not limited to, the following services, as defined in section
127.23297A.669 : air-to-ground radiotelephone service, mobile telecommunication service,
127.24postpaid calling service, prepaid calling service, prepaid wireless calling service, and
127.25private communication services. The services in this paragraph are taxed to the extent
127.26allowed under federal law.
127.27    (j) A sale and a purchase includes the furnishing for a consideration of installation if
127.28the installation charges would be subject to the sales tax if the installation were provided
127.29by the seller of the item being installed.
127.30    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
127.31to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
127.32the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
127.3359B.02, subdivision 11.
127.34EFFECTIVE DATE.This section is effective for sales made after June 30, 2013.

127.35    Sec. 2. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
128.1    Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
128.2purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
128.3course of business as defined in subdivision 21.
128.4    (b) A sale of property used by the owner only by leasing it to others or by holding it
128.5in an effort to lease it, and put to no use by the owner other than resale after the lease or
128.6effort to lease, is a sale of property for resale.
128.7    (c) A sale of master computer software that is purchased and used to make copies for
128.8sale or lease is a sale of property for resale.
128.9    (d) A sale of building materials, supplies, and equipment to owners, contractors,
128.10subcontractors, or builders for the erection of buildings or the alteration, repair, or
128.11improvement of real property is a retail sale in whatever quantity sold, whether the sale is
128.12for purposes of resale in the form of real property or otherwise.
128.13    (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
128.14for installation of the floor covering is a retail sale and not a sale for resale since a sale of
128.15floor covering which includes installation is a contract for the improvement of real property.
128.16    (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
128.17for installation of the items is a retail sale and not a sale for resale since a sale of
128.18shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
128.19the improvement of real property.
128.20    (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
128.21is not considered a sale of property for resale.
128.22    (h) A sale of tangible personal property utilized or employed in the furnishing or
128.23providing of services under subdivision 3, paragraph (g), clause (1), including, but not
128.24limited to, property given as promotional items, is a retail sale and is not considered a
128.25sale of property for resale.
128.26    (i) A sale of tangible personal property used in conducting lawful gambling under
128.27chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
128.28given as promotional items, is a retail sale and is not considered a sale of property for resale.
128.29    (j) Except as otherwise provided in this paragraph, a sale of machines, equipment,
128.30or devices that are used to furnish, provide, or dispense goods or services, including,
128.31but not limited to, coin-operated devices, is a retail sale and is not considered a sale of
128.32property for resale. A sale of coin-operated entertainment and amusement machines,
128.33including, but not limited to, fortune-telling machines, cranes, foosball and pool tables,
128.34video and pinball games, batting cages, rides, photo or video booths, and jukeboxes is a
128.35sale of property for resale.
129.1    (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
129.2payment becomes due under the terms of the agreement or the trade practices of the lessor
129.3or; (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, subdivision
129.411 , but excluding vehicles with a manufacturer's gross vehicle weight rating greater than
129.510,000 pounds and rentals of vehicles for not more than 28 days, at the time the lease is
129.6executed; or (3) for rent-to-own or lease-to-own used vehicles where the lessee may
129.7purchase or return the vehicle at any time without penalty, at the time each payment is
129.8made under the terms of the agreement.
129.9    (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
129.10title or possession of the tangible personal property.
129.11    (m) A sale of a bundled transaction in which one or more of the products included
129.12in the bundle is a taxable product is a retail sale, except that if one of the products
129.13is a telecommunication service, ancillary service, Internet access, or audio or video
129.14programming service, and the seller has maintained books and records identifying through
129.15reasonable and verifiable standards the portions of the price that are attributable to the
129.16distinct and separately identifiable products, then the products are not considered part of a
129.17bundled transaction. For purposes of this paragraph:
129.18    (1) the books and records maintained by the seller must be maintained in the regular
129.19course of business, and do not include books and records created and maintained by the
129.20seller primarily for tax purposes;
129.21    (2) books and records maintained in the regular course of business include, but are
129.22not limited to, financial statements, general ledgers, invoicing and billing systems and
129.23reports, and reports for regulatory tariffs and other regulatory matters; and
129.24    (3) books and records are maintained primarily for tax purposes when the books
129.25and records identify taxable and nontaxable portions of the price, but the seller maintains
129.26other books and records that identify different prices attributable to the distinct products
129.27included in the same bundled transaction.
129.28    (n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
129.29body shop business is a retail sale and the sales tax is imposed on the gross receipts from the
129.30retail sale of the paint and materials. The motor vehicle repair or body shop that purchases
129.31motor vehicle repair paint and motor vehicle repair materials for resale must either:
129.32    (1) separately state each item of paint and each item of materials, and the sales price
129.33of each, on the invoice to the purchaser; or
129.34    (2) in order to calculate the sales price of the paint and materials, use a method
129.35which estimates the amount and monetary value of the paint and materials used in
129.36the repair of the motor vehicle by multiplying the number of labor hours by a rate of
130.1consideration for the paint and materials used in the repair of the motor vehicle following
130.2industry standard practices that fairly calculate the gross receipts from the retail sale of
130.3the motor vehicle repair paint and motor vehicle repair materials. An industry standard
130.4practice fairly calculates the gross receipts if the sales price of the paint and materials used
130.5or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid
130.6by the motor vehicle repair or body shop business. Under this clause, the invoice must
130.7either separately state the "paint and materials" as a single taxable item, or separately state
130.8"paint" as a taxable item and "materials" as a taxable item. This clause does not apply to
130.9wholesale transactions at an auto auction facility.
130.10    (o) A payment made to a cooperative electric association or public utility as a
130.11contribution in aid of construction is a contract for improvement to real property and
130.12is not a retail sale.
130.13EFFECTIVE DATE.This section is effective for sales and purchases made after
130.14June 30, 2013.

130.15    Sec. 3. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
130.16to read:
130.17    Subd. 49. Motor vehicle repair paint and motor vehicle repair materials. "Motor
130.18vehicle repair paint" means a substance composed of solid matter suspended in a liquid
130.19medium and applied as a protective or decorative coating to the surface of a motor vehicle in
130.20order to restore the motor vehicle to its original condition, and includes primer, body paint,
130.21clear coat, and paint thinner used to paint motor vehicles, as defined in section 297B.01.
130.22"Motor vehicle repair materials" means items, other than motor vehicle repair paint
130.23or motor vehicle parts, that become a part of a repaired motor vehicle or are consumed in
130.24repairing the motor vehicle at retail, and include abrasives, battery water, body filler or
130.25putty, bolts and nuts, brake fluid, buffing pads, chamois, cleaning compounds, degreasing
130.26compounds, glaze, grease, grinding discs, hydraulic jack oil, lubricants, masking tape,
130.27oxygen and acetylene, polishes, rags, razor blades, sandpaper, sanding discs, scuff pads,
130.28sealer, solder, solvents, striping tape, tack cloth, thinner, waxes, and welding rods. Motor
130.29vehicle repair materials do not include items that are not used directly on the motor vehicle,
130.30such as floor dry that is used to clean the shop, or cleaning compounds and rags that are
130.31used to clean tools, equipment, or the shop and are not used to clean the motor vehicle.
130.32EFFECTIVE DATE.This section is effective for sales and purchases made after
130.33June 30, 2013.

131.1    Sec. 4. Minnesota Statutes 2012, section 297A.64, subdivision 1, is amended to read:
131.2    Subdivision 1. Tax imposed. (a) A tax is imposed on the lease or rental in this
131.3state for not more than 28 days of a passenger automobile as defined in section 168.002,
131.4subdivision 24 , a van as defined in section 168.002, subdivision 40, or a pickup truck as
131.5defined in section 168.002, subdivision 26. The rate of tax is 6.2 9.2 percent of the sales
131.6price. The tax applies whether or not the vehicle is licensed in the state.
131.7(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
131.8corporation or similar entity, consisting of members who pay the organization for the
131.9use of a motor vehicle, if the organization:
131.10(1) owns or leases a fleet of vehicles of the type subject to the tax under paragraph (a)
131.11that are available to its members for use, priced on the basis of intervals of one hour or less;
131.12(2) parks its vehicles at unstaffed, self-service locations that are accessible to its
131.13members at any time; and
131.14(3) maintains its vehicles, insures its vehicles on behalf of its members, and
131.15purchases fuel for its fleet.
131.16EFFECTIVE DATE.This section is effective for sales and purchases made after
131.17June 30, 2013.

131.18    Sec. 5. Minnesota Statutes 2012, section 297A.64, subdivision 2, is amended to read:
131.19    Subd. 2. Fee imposed. (a) A fee equal to five percent of the sales price is imposed
131.20on leases or rentals of vehicles subject to the tax under subdivision 1, paragraph (a). The
131.21lessor on the invoice to the customer may designate the fee as "a fee imposed by the State
131.22of Minnesota for the registration of rental cars."
131.23(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
131.24corporation or similar entity, consisting of individual or group members who pay the
131.25organization for the use of a motor vehicle, if the organization:
131.26(1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1
131.27that are available to its members for use, priced on the basis of intervals of one hour or less;
131.28(2) parks its vehicles at unstaffed, self-service locations that are accessible at any
131.29time of the day;
131.30(3) maintains its vehicles, insures its vehicles on behalf of its members, and
131.31purchases fuel for its fleet; and
131.32(4) does not charge usage rates that decline on a per unit basis, whether specified
131.33based on distance or time exempt from the tax imposed under subdivision 1, paragraph (b).
132.1EFFECTIVE DATE.This section is effective for sales and purchases made after
132.2June 30, 2013.

132.3    Sec. 6. Minnesota Statutes 2012, section 297A.66, is amended by adding a subdivision
132.4to read:
132.5    Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
132.6means a person, whether an independent contractor or other representative, who directly
132.7or indirectly solicits business for the retailer.
132.8(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
132.9with a resident under which the resident, for a commission or other consideration, directly
132.10or indirectly refers potential customers, whether by a link on an Internet Web site, or
132.11otherwise, to the seller. This paragraph only applies if the total gross receipts are at least
132.12$10,000 in the 12-month period ending on the last day of the most recent calendar quarter
132.13before the calendar quarter in which the sale is made. For purposes of this paragraph,
132.14gross receipts means receipts from sales to customers located in the state who were
132.15referred to the retailer by all residents with this type of agreement with the retailer.
132.16(c) The presumption under paragraph (b) may be rebutted by proof that the resident
132.17with whom the seller has an agreement did not engage in any solicitation in the state
132.18on behalf of the retailer that would satisfy the nexus requirement of the United States
132.19Constitution during the 12-month period in question. Nothing in this section shall be
132.20construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
132.21representative for purposes of subdivision 1, paragraph (a).
132.22(d) For purposes of this paragraph, "resident" includes an individual who is a
132.23resident of this state, as defined in section 290.01, or a business that owns tangible
132.24personal property located in this state or has one or more employees providing services for
132.25the business in this state.
132.26(e) This subdivision does not apply to chapter 290 and does not expand or contract
132.27the jurisdiction to tax a trade or business under chapter 290.
132.28EFFECTIVE DATE.This section is effective for sales and purchases made after
132.29June 30, 2013.

132.30    Sec. 7. Minnesota Statutes 2012, section 297A.668, is amended by adding a
132.31subdivision to read:
132.32    Subd. 6a. Multiple points of use. (a) Notwithstanding the provisions of subdivisions
132.332 to 5, a business purchaser that is not a holder of a direct pay permit that knows at the
132.34time of its purchase of a digital good, computer software delivered electronically, or a
133.1service that the digital good, computer software delivered electronically, or service will be
133.2concurrently available for use in more than one jurisdiction shall deliver to the seller in
133.3conjunction with its purchase a multiple points of use exemption certificate disclosing
133.4this fact.
133.5(b) Upon receipt of the multiple points of use certificate, the seller is relieved of the
133.6obligation to collect, pay, or remit the applicable tax and the purchaser is obligated to
133.7collect, pay, or remit the applicable tax on a direct pay basis.
133.8(c) A purchaser delivering the multiple points of use exemption certificate may use
133.9any reasonable, but consistent and uniform, method of apportionment that is supported by
133.10the purchaser's business records as they exist at the time of the consummation of the sale.
133.11(d) The multiple points of use exemption certificate remains in effect for all future
133.12sales by the seller to the purchaser until it is revoked in writing, except as to the subsequent
133.13sale's specific apportionment that is governed by the principle of paragraph (c) and the
133.14facts existing at the time of the sale.
133.15(e) A holder of a direct pay permit is not required to deliver a multiple points of use
133.16exemption certificate to the seller. A direct pay permit holder shall follow the provisions
133.17of paragraph (c) in apportioning the tax due on a digital good, computer software delivered
133.18electronically, or a service that will be concurrently available for use in more than one
133.19jurisdiction.
133.20EFFECTIVE DATE.This section is effective for sales and purchases made after
133.21June 30, 2013.

133.22    Sec. 8. Minnesota Statutes 2012, section 297A.67, subdivision 7, is amended to read:
133.23    Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical
133.24devices for human use are exempt:
133.25    (1) drugs, including over-the-counter drugs;
133.26    (2) single-use finger-pricking devices for the extraction of blood and other single-use
133.27devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
133.28diabetes;
133.29    (3) insulin and medical oxygen for human use, regardless of whether prescribed
133.30or sold over the counter;
133.31    (4) prosthetic devices;
133.32    (5) durable medical equipment for home use only;
133.33    (6) mobility enhancing equipment;
133.34    (7) prescription corrective eyeglasses; and
133.35    (8) kidney dialysis equipment, including repair and replacement parts.
134.1(b) Items purchased in transactions covered by:
134.2(1) Medicare as defined under title XVIII of the Social Security Act, United States
134.3Code, title 42, sections 1395, et seq.; or
134.4(2) Medicaid as defined under title XIX of the Social Security Act, United States
134.5Code, title 42, sections 1396, et seq.
134.6    (b) (c) For purposes of this subdivision:
134.7    (1) "Drug" means a compound, substance, or preparation, and any component of
134.8a compound, substance, or preparation, other than food and food ingredients, dietary
134.9supplements, or alcoholic beverages that is:
134.10    (i) recognized in the official United States Pharmacopoeia, official Homeopathic
134.11Pharmacopoeia of the United States, or official National Formulary, and supplement
134.12to any of them;
134.13    (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
134.14of disease; or
134.15    (iii) intended to affect the structure or any function of the body.
134.16    (2) "Durable medical equipment" means equipment, including repair and
134.17replacement parts and all accessories and supplies, including single patient use items
134.18required for the effective use of the durable medical equipment device, but not including
134.19mobility enhancing equipment, that:
134.20    (i) can withstand repeated use;
134.21    (ii) is primarily and customarily used to serve a medical purpose;
134.22    (iii) generally is not useful to a person in the absence of illness or injury; and
134.23    (iv) is not worn in or on the body.
134.24    For purposes of this clause, "repair and replacement parts" includes all components
134.25or attachments used in conjunction with the durable medical equipment, but does not
134.26include including repair and replacement parts which are for single patient use only.
134.27    (3) "Mobility enhancing equipment" means equipment, including repair and
134.28replacement parts, but not including durable medical equipment, that:
134.29    (i) is primarily and customarily used to provide or increase the ability to move from
134.30one place to another and that is appropriate for use either in a home or a motor vehicle;
134.31    (ii) is not generally used by persons with normal mobility; and
134.32    (iii) does not include any motor vehicle or equipment on a motor vehicle normally
134.33provided by a motor vehicle manufacturer.
134.34    (4) "Over-the-counter drug" means a drug that contains a label that identifies the
134.35product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The
134.36label must include a "drug facts" panel or a statement of the active ingredients with a list of
135.1those ingredients contained in the compound, substance, or preparation. Over-the-counter
135.2drugs do not include grooming and hygiene products, regardless of whether they otherwise
135.3meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
135.4shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
135.5    (5) "Prescribed" and "prescription" means a direction in the form of an order,
135.6formula, or recipe issued in any form of oral, written, electronic, or other means of
135.7transmission by a duly licensed health care professional.
135.8    (6) "Prosthetic device" means a replacement, corrective, or supportive device,
135.9including repair and replacement parts, and all necessary accessories, supplies, and items
135.10required for the effective use of the prosthetic device, worn on or in the body to:
135.11    (i) artificially replace a missing portion of the body;
135.12    (ii) prevent or correct physical deformity or malfunction; or
135.13    (iii) support a weak or deformed portion of the body.
135.14Prosthetic device does not include corrective eyeglasses.
135.15    (7) "Kidney dialysis equipment" means equipment that:
135.16    (i) is used to remove waste products that build up in the blood when the kidneys are
135.17not able to do so on their own; and
135.18    (ii) can withstand repeated use, including multiple use by a single patient,
135.19notwithstanding the provisions of clause (2).
135.20(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of
135.21the item purchased in the transaction is paid for or reimbursed by the federal government
135.22or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private
135.23insurance company administering the Medicare or Medicaid program on behalf of the
135.24federal government or the state of Minnesota, or by a managed care organization for the
135.25benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu
135.26of conventional Medicare or Medicaid coverage pursuant to agreement with the federal
135.27government or the state of Minnesota.
135.28EFFECTIVE DATE.This section is effective for sales and purchases made after
135.29June 30, 2013.

135.30    Sec. 9. Minnesota Statutes 2012, section 297A.70, subdivision 4, is amended to read:
135.31    Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
135.32(b), to the following "nonprofit organizations" are exempt:
136.1(1) a corporation, society, association, foundation, or institution organized and
136.2operated exclusively for charitable, religious, or educational purposes if the item
136.3purchased is used in the performance of charitable, religious, or educational functions; and
136.4(2) any senior citizen group or association of groups that:
136.5(i) in general limits membership to persons who are either age 55 or older, or
136.6physically disabled;
136.7(ii) is organized and operated exclusively for pleasure, recreation, and other
136.8nonprofit purposes, not including housing, no part of the net earnings of which inures to
136.9the benefit of any private shareholders; and
136.10(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
136.11For purposes of this subdivision, charitable purpose includes the maintenance of a
136.12cemetery owned by a religious organization.
136.13(b) This exemption does not apply to the following sales:
136.14(1) building, construction, or reconstruction materials purchased by a contractor
136.15or a subcontractor as a part of a lump-sum contract or similar type of contract with a
136.16guaranteed maximum price covering both labor and materials for use in the construction,
136.17alteration, or repair of a building or facility;
136.18(2) construction materials purchased by tax-exempt entities or their contractors to
136.19be used in constructing buildings or facilities that will not be used principally by the
136.20tax-exempt entities; and
136.21(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
136.22(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
136.23297A.67, subdivision 2 , except wine purchased by an established religious organization
136.24for sacramental purposes or as allowed under subdivision 9a; and
136.25(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
136.26as provided in paragraph (c).
136.27(c) This exemption applies to the leasing of a motor vehicle as defined in section
136.28297B.01, subdivision 11 , only if the vehicle is:
136.29(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
136.30passenger automobile, as defined in section 168.002, if the automobile is designed and
136.31used for carrying more than nine persons including the driver; and
136.32(2) intended to be used primarily to transport tangible personal property or
136.33individuals, other than employees, to whom the organization provides service in
136.34performing its charitable, religious, or educational purpose.
137.1(d) A limited liability company also qualifies for exemption under this subdivision if
137.2(1) it consists of a sole member that would qualify for the exemption, and (2) the items
137.3purchased qualify for the exemption.
137.4EFFECTIVE DATE.This section is effective retroactively for sales and purchases
137.5made after June 30, 2012.

137.6    Sec. 10. Minnesota Statutes 2012, section 297A.70, subdivision 8, is amended to read:
137.7    Subd. 8. Regionwide Public safety radio communication system systems;
137.8products and services. (a) Products and services including, but not limited to, end user
137.9equipment used for construction, ownership, operation, maintenance, and enhancement
137.10of the backbone system of the regionwide public safety radio communication system
137.11established under sections 403.21 to 403.40, are exempt. For purposes of this subdivision,
137.12backbone system is defined in section 403.21, subdivision 9. This subdivision is effective
137.13for purchases, sales, storage, use, or consumption for use in the first and second phases of
137.14the system, as defined in section 403.21, subdivisions 3, 10, and 11, that portion of the
137.15third phase of the system that is located in the southeast district of the State Patrol and
137.16the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system
137.17that is located in Itasca County.
137.18(b) Products and services, including, but not limited to, end-user equipment used
137.19for construction, ownership, operation, maintenance, and enhancement of public safety
137.20radio communication systems not already exempt under paragraph (a), including public
137.21safety radio dispatch centers, are exempt.
137.22EFFECTIVE DATE.This section is effective for sales and purchases made after
137.23June 30, 2013.

137.24    Sec. 11. Minnesota Statutes 2012, section 297A.70, is amended by adding a
137.25subdivision to read:
137.26    Subd. 9a. Established religious orders. (a) Sales of lodging, prepared food, candy,
137.27soft drinks, and alcoholic beverages at noncatered events between an established religious
137.28order and an affiliated institution of higher education are exempt.
137.29(b) For purposes of this subdivision, "established religious order" means an
137.30organization directly or indirectly under the control or supervision of a church or
137.31convention or association of churches, where members of the organization:
137.32(1) normally live together as part of a community;
138.1(2) make long-term commitments to live under a strict set of moral and spiritual
138.2rules; and
138.3(3) work or engage full time in a combination of prayer, religious study, church
138.4reform or renewal, or other religious, educational, or charitable goals of the organization.
138.5(c) For purposes of this subdivision, an institution of higher education is "affiliated"
138.6with an established religious order if members of the religious order are represented
138.7on the governing board of the institution of higher education and the two organization
138.8share campus space and common facilities.
138.9EFFECTIVE DATE.This section is effective retroactively for sales and purchases
138.10made after June 30, 2012.

138.11    Sec. 12. Minnesota Statutes 2012, section 297A.70, is amended by adding a
138.12subdivision to read:
138.13    Subd. 18. Nursing homes and boarding care homes. (a) All sales, except those
138.14listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding
138.15care home certified as a nursing facility under title 19 of the Social Security Act are
138.16exempt if the facility:
138.17(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the
138.18Internal Revenue Code; and
138.19(2) is certified to participate in the medical assistance program under title 19 of the
138.20Social Security Act, or certifies to the commissioner that it does not discharge residents
138.21due to the inability to pay.
138.22(b) This exemption does not apply to the following sales:
138.23(1) building, construction, or reconstruction materials purchased by a contractor
138.24or a subcontractor as a part of a lump-sum contract or similar type of contract with a
138.25guaranteed maximum price covering both labor and materials for use in the construction,
138.26alteration, or repair of a building or facility;
138.27(2) construction materials purchased by tax-exempt entities or their contractors to
138.28be used in constructing buildings or facilities that will not be used principally by the
138.29tax-exempt entities;
138.30(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
138.31(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
138.32297A.67, subdivision 2; and
138.33(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
138.34as provided in paragraph (c).
139.1(c) This exemption applies to the leasing of a motor vehicle as defined in section
139.2297B.01, subdivision 11, only if the vehicle is:
139.3(1) a truck, as defined in section 168.002; a bus, as defined in section 168.002; or a
139.4passenger automobile, as defined in section 168.002, if the automobile is designed and
139.5used for carrying more than nine persons including the driver; and
139.6(2) intended to be used primarily to transport tangible personal property or residents
139.7of the nursing home or boarding care home.
139.8EFFECTIVE DATE.This section is effective for sales and purchases made after
139.9June 30, 2013.

139.10    Sec. 13. Minnesota Statutes 2012, section 297A.71, is amended by adding a
139.11subdivision to read:
139.12    Subd. 45. Industrial measurement manufacturing and controls facility. (a)
139.13Materials and supplies used or consumed in, capital equipment incorporated into,
139.14fixtures installed in, and privately owned infrastructure in support of the construction,
139.15improvement, or expansion of an industrial measurement manufacturing and controls
139.16facility are exempt if:
139.17(1) the total capital investment made at the facility is at least $60,000,000;
139.18(2) the facility employs at least 250 full-time equivalent employees that are not
139.19employees currently employed by the company in the state; and
139.20(3) the Department of Employment and Economic Development determines that
139.21the expansion, remodeling, or improvement of the facility has a significant impact on
139.22the state economy.
139.23(b) The tax must be imposed and collected as if the rate under section 297A.62,
139.24subdivisions 1 and 1a, applied and refunded in the manner provided in section 297A.75,
139.25only after the following criteria are met:
139.26(1) a refund may not be issued until the owner of the facility has received
139.27certification from the Department of Employment and Economic Development that the
139.28company meets the requirements in paragraph (a); and
139.29(2) to receive the refund, the owner of the industrial measurement manufacturing
139.30and controls facility must initially apply to the Department of Employment and Economic
139.31Development for certification no later than one year from the final completion date of
139.32construction, improvement, or expansion of the industrial measurement manufacturing
139.33and controls facility.
140.1EFFECTIVE DATE.This section is effective for sales and purchases made after
140.2June 30, 2013, and before December 31, 2015.

140.3    Sec. 14. Minnesota Statutes 2012, section 297A.71, is amended by adding a
140.4subdivision to read:
140.5    Subd. 46. Building materials; resorts and recreational camping areas. Materials
140.6and supplies used or consumed in, and equipment incorporated into, the improvement of
140.7an existing structure located at a resort, as defined in section 157.15, subdivision 11, or
140.8recreational camping area, as defined in section 327.14, are exempt. The tax on purchases
140.9exempt under this provision must be imposed and collected as if the rate under section
140.10297A.62, subdivision 1, applied and then refunded in the manner provided in section
140.11297A.75. For purposes of this subdivision, a structure includes a cabin located on resort
140.12property and any other structure available for use by guests of the resort or recreational
140.13camping area.
140.14EFFECTIVE DATE.This section is effective for sales and purchases made after
140.15June 30, 2013.

140.16    Sec. 15. Minnesota Statutes 2012, section 297A.71, is amended by adding a
140.17subdivision to read:
140.18    Subd. 47. Biopharmaceutical manufacturing facility. (a) Materials and
140.19supplies used or consumed in, capital equipment incorporated into, and privately
140.20owned infrastructure in support of the construction, improvement, or expansion of a
140.21biopharmaceutical manufacturing facility in the state are exempt if the following criteria
140.22are met:
140.23(1) the facility is used for the manufacturing of biologics;
140.24(2) the total capital investment made at the facility exceeds $50,000,000; and
140.25(3) the facility creates and maintains at least 190 full-time equivalent positions at the
140.26facility. These positions must be new jobs in Minnesota and not the result of relocating
140.27jobs that currently exist in Minnesota.
140.28(b) The tax must be imposed and collected as if the rate under section 297A.62,
140.29subdivision 1, applied, and refunded in the manner provided in section 297A.75.
140.30(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing
140.31facility must:
140.32(1) initially apply to the Department of Employment and Economic Development
140.33for certification no later than one year from the final completion date of construction,
140.34improvement, or expansion of the facility; and
141.1(2) for each year that the owner of the biopharmaceutical manufacturing facility
141.2applies for a refund, the owner must have received written certification from the
141.3Department of Employment and Economic Development that the facility has met the
141.4criteria of paragraph (a).
141.5(d) The refund is to be paid annually at a rate of 25 percent of the total allowable
141.6refund payable to date, with the commissioner making annual payments of the remaining
141.7refund until all of the refund has been paid.
141.8(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are
141.9interchangeable and mean medical drugs or medicinal preparations produced using
141.10technology that uses biological systems, living organisms or derivatives of living
141.11organisms, to make or modify products or processes for specific use. The medical drugs or
141.12medicinal preparations include but are not limited to proteins, antibodies, nucleic acids,
141.13and vaccines.
141.14EFFECTIVE DATE.This section is effective retroactively to investments entered
141.15into and jobs created after December 31, 2012, and effective retroactively for sales and
141.16purchases made after December 31, 2012, and before July 1, 2019.

141.17    Sec. 16. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
141.18    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
141.19following exempt items must be imposed and collected as if the sale were taxable and the
141.20rate under section 297A.62, subdivision 1, applied. The exempt items include:
141.21    (1) capital equipment exempt under section 297A.68, subdivision 5;
141.22    (2) building materials for an agricultural processing facility exempt under section
141.23297A.71, subdivision 13 ;
141.24    (3) building materials for mineral production facilities exempt under section
141.25297A.71, subdivision 14 ;
141.26    (4) building materials for correctional facilities under section 297A.71, subdivision 3;
141.27    (5) building materials used in a residence for disabled veterans exempt under section
141.28297A.71, subdivision 11 ;
141.29    (6) elevators and building materials exempt under section 297A.71, subdivision 12;
141.30    (7) building materials for the Long Lake Conservation Center exempt under section
141.31297A.71, subdivision 17 ;
141.32    (8) materials and supplies for qualified low-income housing under section 297A.71,
141.33subdivision 23 ;
141.34    (9) materials, supplies, and equipment for municipal electric utility facilities under
141.35section 297A.71, subdivision 35;
142.1    (10) equipment and materials used for the generation, transmission, and distribution
142.2of electrical energy and an aerial camera package exempt under section 297A.68,
142.3subdivision 37;
142.4    (11) commuter rail vehicle and repair parts under section 297A.70, subdivision 3,
142.5paragraph (a), clause (10);
142.6    (12) materials, supplies, and equipment for construction or improvement of projects
142.7and facilities under section 297A.71, subdivision 40;
142.8(13) materials, supplies, and equipment for construction or improvement of a meat
142.9processing facility exempt under section 297A.71, subdivision 41;
142.10(14) materials, supplies, and equipment for construction, improvement, or
142.11expansion of an aerospace defense manufacturing facility exempt under section 297A.71,
142.12subdivision 42, and construction, expansion, or improvement of an industrial measurement
142.13manufacturing and controls facility under section 297A.71, subdivision 45;
142.14(15) enterprise information technology equipment and computer software for use in
142.15a qualified data center exempt under section 297A.68, subdivision 42; and
142.16(16) materials, supplies, and equipment for qualifying capital projects under section
142.17297A.71, subdivision 44 .;
142.18(17) materials, supplies, and equipment for structure improvements at resort and
142.19camping areas under section 297A.71, subdivision 46; and
142.20(18) materials, supplies, and equipment for construction, improvement, or expansion
142.21of a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision
142.2247.
142.23EFFECTIVE DATE.This section is effective the day following final enactment.

142.24    Sec. 17. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
142.25    Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
142.26commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
142.27must be paid to the applicant. Only the following persons may apply for the refund:
142.28    (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
142.29    (2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental
142.30subdivision;
142.31    (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
142.32provided in United States Code, title 38, chapter 21;
142.33    (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
142.34property;
143.1    (5) for subdivision 1, clause (8), the owner of the qualified low-income housing
143.2project;
143.3    (6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or
143.4a joint venture of municipal electric utilities;
143.5    (7) for subdivision 1, clauses (10), (13), (14), and (15), and (18), the owner of the
143.6qualifying business; and
143.7    (8) for subdivision 1, clauses (11), (12), and (16), the applicant must be the
143.8governmental entity that owns or contracts for the project or facility.; and
143.9    (9) for subdivision 1, clause (17), the applicant must be the owner of the resort
143.10or recreational camping facility.
143.11EFFECTIVE DATE.This section is effective the day following final enactment.

143.12    Sec. 18. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
143.13    Subd. 3. Application. (a) The application must include sufficient information
143.14to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
143.15subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11),
143.16(12), (13), (14), (15), or (16), (17), or (18), the contractor, subcontractor, or builder must
143.17furnish to the refund applicant a statement including the cost of the exempt items and the
143.18taxes paid on the items unless otherwise specifically provided by this subdivision. The
143.19provisions of sections 289A.40 and 289A.50 apply to refunds under this section.
143.20    (b) An applicant may not file more than two applications per calendar year for
143.21refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
143.22    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
143.23exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
143.24of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
143.25subdivision 40, must not be filed until after June 30, 2009. Applications for refunds for
143.26purchases of items in section 297A.71, subdivision 47, must not be filed until after June
143.2730, 2016, and only one refund may be filed annually thereafter.
143.28EFFECTIVE DATE.This section is effective the day following final enactment.

143.29    Sec. 19. Minnesota Statutes 2012, section 297A.815, subdivision 3, is amended to read:
143.30    Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this
143.31subdivision, "net revenue" means an amount equal to:
144.1    (1) the revenues, including interest and penalties, collected under this section and
144.2on the leases under section 297A.61, subdivision 4, paragraph (k), clause (3), during
144.3the fiscal year; less
144.4    (2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal
144.5year 2013 and following fiscal years, $32,000,000.
144.6    (b) On or before June 30 of each fiscal year, the commissioner of revenue shall
144.7estimate the amount of the revenues and subtraction under paragraph (a) for the current
144.8fiscal year.
144.9    (c) On or after July 1 of the subsequent fiscal year, the commissioner of management
144.10and budget shall transfer the net revenue as estimated in paragraph (b) from the general
144.11fund, as follows:
144.12    (1) 50 percent to the greater Minnesota transit account; and
144.13    (2) 50 percent to the county state-aid highway fund. Notwithstanding any other law
144.14to the contrary, the commissioner of transportation shall allocate the funds transferred
144.15under this clause to the counties in the metropolitan area, as defined in section 473.121,
144.16subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall
144.17receive of such amount the percentage that its population, as defined in section 477A.011,
144.18subdivision 3, estimated or established by July 15 of the year prior to the current calendar
144.19year, bears to the total population of the counties receiving funds under this clause.
144.20    (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must
144.21be calculated using the following percentages of the total revenues:
144.22    (1) for fiscal year 2010, 83.75 percent; and
144.23    (2) for fiscal year 2011, 93.75 percent.
144.24EFFECTIVE DATE.This section is effective for leases entered into after June
144.2530, 2013.

144.26    Sec. 20. Minnesota Statutes 2012, section 297A.993, subdivision 1, is amended to read:
144.27    Subdivision 1. Authorization; rates. Notwithstanding section 297A.99,
144.28subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside
144.29the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or
144.30more than one county outside the metropolitan transportation area acting under a joint
144.31powers agreement, may by resolution of the county board, or each of the county boards,
144.32following a public hearing impose (1) a transportation sales tax at a rate of up to one-half
144.33of one percent on retail sales and uses taxable under this chapter, and (2) an excise tax
144.34of $20 per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or
144.35acquired from any person engaged in the business of selling motor vehicles at retail,
145.1occurring within the jurisdiction of the taxing authority. The taxes imposed under this
145.2section are subject to approval by a majority of the voters in each of the counties affected
145.3at a general election who vote on the question to impose the taxes.
145.4EFFECTIVE DATE.This section is effective the day following final enactment.

145.5    Sec. 21. Minnesota Statutes 2012, section 297A.993, subdivision 2, is amended to read:
145.6    Subd. 2. Allocation; termination. The proceeds of the taxes must be dedicated
145.7exclusively to: (1) payment of the capital cost of a specific transportation project or
145.8improvement; (2) payments of the costs, which may include both capital and operating
145.9costs, of a specific transit project or improvement; or (3) payment of transit operating
145.10costs. The transportation project or improvement must be designated by the board of the
145.11county, or more than one county acting under a joint powers agreement. Except for taxes
145.12for operating costs of a transit project or improvement, or for transit operations, the taxes
145.13must terminate after the project or improvement has been completed when revenues
145.14raised are sufficient to finance the project.
145.15EFFECTIVE DATE.This section is effective the day following final enactment.

145.16    Sec. 22. Minnesota Statutes 2012, section 469.190, is amended by adding a subdivision
145.17to read:
145.18    Subd. 1a. Tax base; locally collected taxes. A tax imposed on the gross receipts
145.19from lodging under this section or under a special law applies to the same base as taxes
145.20collected by the commissioner of revenue under subdivision 7 and section 270C.171.
145.21EFFECTIVE DATE.This section is effective the day following final enactment.
145.22In enacting this section, the legislature confirms its original intent in enacting Minnesota
145.23Statutes, section 469.190, its predecessor provisions, and any special laws authorizing
145.24political subdivisions to impose lodging taxes, and that those taxes were and are intended
145.25to apply to the entire consideration paid to obtain access to transient lodging, including
145.26ancillary or related services, such as services provided by accommodation intermediaries
145.27as defined in Minnesota Statutes, section 297A.61, and similar services. The provisions of
145.28this section must not be interpreted to imply a narrower construction of the tax base under
145.29lodging tax provisions of Minnesota law prior to the enactment of this section.

145.30    Sec. 23. Minnesota Statutes 2012, section 469.190, subdivision 7, is amended to read:
145.31    Subd. 7. Collection. (a) The statutory or home rule charter city may agree with the
145.32commissioner of revenue that a tax imposed pursuant to this section shall be collected
146.1by the commissioner together with the tax imposed by chapter 297A, and subject to the
146.2same interest, penalties, and other rules and that its proceeds, less the cost of collection,
146.3shall be remitted to the city.
146.4    (b) If a tax imposed under this section or under a special law is not collected by
146.5the commissioner of revenue, the local government imposing the tax may only require
146.6an accommodations intermediary, as defined in section 297A.61, subdivision 47, to file
146.7and remit the tax related to accommodations intermediary services once in every calendar
146.8year. The local government must inform the tax intermediary of the date when the return
146.9and remittance is due.
146.10EFFECTIVE DATE.This section is effective for sales and purchases made after
146.11June 30, 2013.

146.12    Sec. 24. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
146.13Laws 1997, chapter 231, article 7, section 40, Laws 1998, chapter 389, article 8, section
146.1430, Laws 2003, First Special Session chapter 21, article 8, section 13, Laws 2005, First
146.15Special Session chapter 3, article 5, section 26, and Laws 2009, chapter 88, article 4,
146.16section 15, is amended to read:
146.17    Subd. 2. Use of revenues. Revenues received from the tax authorized by subdivision
146.181 may only be used by the city to pay the cost of collecting the tax, and, except as provided in
146.19paragraph (e), to pay for the following projects or to secure or pay any principal, premium,
146.20or interest on bonds issued in accordance with subdivision 3 for the following projects.
146.21    (a) To pay all or a portion of the capital expenses of construction, equipment and
146.22acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
146.23including the demolition of the existing arena and the construction and equipping of a
146.24new arena.
146.25    (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
146.26spent for:
146.27    (1) capital projects to further residential, cultural, commercial, and economic
146.28development in both downtown St. Paul and St. Paul neighborhoods; and
146.29    (2) capital and operating expenses of cultural organizations in the city, provided
146.30that the amount spent under this clause must equal ten percent of the total amount spent
146.31under this paragraph in any year.
146.32    (c) The amount apportioned under paragraph (b) shall be no less than 60 percent
146.33of the revenues derived from the tax each year, except to the extent that a portion of that
146.34amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a)
146.35prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1,
147.11998, but only if the city council determines that 40 percent of the revenues derived from
147.2the tax together with other revenues pledged to the payment of the bonds, including the
147.3proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
147.4    (d) If in any year more than 40 percent of the revenue derived from the tax authorized
147.5by subdivision 1 is used to pay debt service on the bonds issued for the purposes of
147.6paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment
147.7that exceeds 40 percent of the revenue must be determined for that year. In any year when
147.840 percent of the revenue produced by the sales tax exceeds the amount required to pay
147.9debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the
147.10amount of the excess must be made available for capital projects to further residential,
147.11cultural, commercial, and economic development in the neighborhoods and downtown
147.12until the cumulative amounts determined for all years under the preceding sentence have
147.13been made available under this sentence. The amount made available as reimbursement in
147.14the preceding sentence is not included in the 60 percent determined under paragraph (c).
147.15    (e) In each of calendar years 2006 to 2014, revenue not to exceed $3,500,000 may be
147.16used to pay the principal of bonds issued for capital projects of the city. After December
147.1731, 2014, revenue from the tax imposed under subdivision 1 may not be used for this
147.18purpose. If the amount necessary to meet obligations under paragraphs (a) and (d) are less
147.19than 40 percent of the revenue from the tax in any year, the city may place the difference
147.20between 40 percent of the revenue and the amounts allocated under paragraphs (a) and (d)
147.21in an economic development fund to be used for any economic development purposes.
147.22    (f) By January 15 of each year, the mayor and the city council must report to the
147.23legislature on the use of sales tax revenues during the preceding one-year period.
147.24EFFECTIVE DATE.This section is effective the day after compliance by the
147.25governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
147.26subdivisions 2 and 3.

147.27    Sec. 25. Laws 1993, chapter 375, article 9, section 46, subdivision 5, as amended by
147.28Laws 1998, chapter 389, article 8, section 32, is amended to read:
147.29    Subd. 5. Expiration of taxing authority. The authority granted by subdivision 1 to
147.30the city to impose a sales tax shall expire on December 31, 2030 2042, or at an earlier
147.31time as the city shall, by ordinance, determine. Any funds remaining after completion of
147.32projects approved under subdivision 2, paragraph (a) and retirement or redemption of any
147.33bonds or other obligations may be placed in the general fund of the city.
148.1EFFECTIVE DATE.This section is effective the day after compliance by the
148.2governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
148.3subdivisions 2 and 3.

148.4    Sec. 26. Laws 2002, chapter 377, article 3, section 25, as amended by Laws 2009,
148.5chapter 88, article 4, section 19, and Laws 2010, chapter 389, article 5, section 3, is
148.6amended to read:
148.7    Sec. 25. ROCHESTER LODGING TAX.
148.8    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
148.9469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
148.10tax of one percent on the gross receipts from the furnishing for consideration of lodging at
148.11a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
148.12for a continuous period of 30 days or more.
148.13    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190 or
148.14477A.016 , or any other law, and in addition to the tax authorized by subdivision 1, the city
148.15of Rochester may impose an additional tax of one three percent on the gross receipts from
148.16the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
148.17resort, other than the renting or leasing of it for a continuous period of 30 days or more only
148.18upon the approval of the city governing body of a total financial package for the project.
148.19    Subd. 2. Disposition of proceeds. (a) The gross proceeds from the tax imposed
148.20under subdivision 1 must be used by the city to fund a local convention or tourism bureau
148.21for the purpose of marketing and promoting the city as a tourist or convention center.
148.22(b) The gross proceeds from the one three percent tax imposed under subdivision
148.231a shall be used to pay for (1) design, construction, renovation, improvement, and
148.24expansion of the Mayo Civic Center Complex and related infrastructure, including but not
148.25limited to, skyway access, lighting, parking, or landscaping; and (2) for payment of any
148.26principal, interest, or premium on bonds issued to finance the construction, renovation,
148.27improvement, and expansion of the Mayo Civic Center Complex.
148.28    Subd. 2a. Bonds. The city of Rochester may issue, without an election, general
148.29obligation bonds of the city, in one or more series, in the aggregate principal amount not to
148.30exceed $43,500,000 $50,000,000, to pay for capital and administrative costs for the design,
148.31construction, renovation, improvement, and expansion of the Mayo Civic Center Complex,
148.32and related infrastructure, including but not limited to, skyway, access, lighting, parking,
148.33and landscaping. The city may pledge the lodging tax authorized by subdivision 1a and the
148.34food and beverage tax authorized under Laws 2009, chapter 88, article 4, section 23, to the
148.35payment of the bonds. The debt represented by the bonds is not included in computing any
149.1debt limitations applicable to the city, and the levy of taxes required by Minnesota Statutes,
149.2section 475.61, to pay the principal of and interest on the bonds is not subject to any levy
149.3limitation or included in computing or applying any levy limitation applicable to the city.
149.4    Subd. 3. Expiration of taxing authority. The authority of the city to impose a tax
149.5under subdivision 1a shall expire when the principal and interest on any bonds or other
149.6obligations issued prior to December 31, 2014, to finance the construction, renovation,
149.7improvement, and expansion of the Mayo Civic Center Complex and related skyway
149.8access, lighting, parking, or landscaping have been paid, including any bonds issued to
149.9refund such bonds, or at an earlier time as the city shall, by ordinance, determine. Any
149.10funds remaining after completion of the project and retirement or redemption of the bonds
149.11shall be placed in the general fund of the city. The city may, by ordinance, repeal the
149.12tax provided that:
149.13(1) the revenues raised before the repeal are sufficient to meet all bond or other
149.14obligations backed by revenues of the tax; and
149.15(2) the repeal date meets the requirements of section 297A.99, subdivision 12.
149.16EFFECTIVE DATE.This section is effective the day after the governing body of
149.17the city of Rochester and its chief fiscal officer comply with Minnesota Statutes, section
149.18645.021, subdivisions 2 and 3.

149.19    Sec. 27. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision
149.202, is amended to read:
149.21    Subd. 2. Use of revenues. (a) Revenues received from the tax authorized by
149.22subdivision 1 by the city of St. Cloud must be used for the cost of collecting and
149.23administering the tax and to pay all or part of the capital or administrative costs of the
149.24development, acquisition, construction, improvement, and securing and paying debt
149.25service on bonds or other obligations issued to finance the following regional projects as
149.26approved by the voters and specifically detailed in the referendum authorizing the tax or
149.27extending the tax:
149.28    (1) St. Cloud Regional Airport;
149.29    (2) regional transportation improvements;
149.30    (3) regional community and aquatics and recreation centers and facilities;
149.31    (4) regional public libraries; and
149.32    (5) acquisition and improvement of regional park land and open space.
149.33    (b) Revenues received from the tax authorized by subdivision 1 by the cities of St.
149.34Joseph, Waite Park, Sartell, Sauk Rapids, and St. Augusta must be used for the cost of
149.35collecting and administering the tax and to pay all or part of the capital or administrative
150.1costs of the development, acquisition, construction, improvement, and securing and paying
150.2debt service on bonds or other obligations issued to fund the projects specifically approved
150.3by the voters at the referendum authorizing the tax or extending the tax. The portion of
150.4revenues from the city going to fund the regional airport or regional library located in the
150.5city of St. Cloud will be as required under the applicable joint powers agreement.
150.6    (c) The use of revenues received from the taxes authorized in subdivision 1 for
150.7projects allowed under paragraphs (a) and (b) are limited to the amount authorized for
150.8each project under the enabling referendum.
150.9EFFECTIVE DATE.This section is effective for a city that approves it the day
150.10after compliance by the governing body of that city with Minnesota Statutes, section
150.11645.021, subdivision 3.

150.12    Sec. 28. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision
150.134, is amended to read:
150.14    Subd. 4. Termination of tax. The tax imposed in the cities of St. Joseph, St. Cloud,
150.15St. Augusta, Sartell, Sauk Rapids, and Waite Park under subdivision 1 expires when the
150.16city council determines that sufficient funds have been collected from the tax to retire or
150.17redeem the bonds and obligations authorized under subdivision 2, paragraph (a), but no
150.18later than December 31, 2018. Notwithstanding Minnesota Statutes, section 297A.99,
150.19subdivision 3, paragraphs (a), (c), and (d), a city may extend the tax imposed under
150.20subdivision 1 through December 31, 2038, if approved under the referendum authorizing
150.21the tax under subdivision 1 or if approved by voters of the city at a general election held
150.22no later than November 6, 2018.
150.23EFFECTIVE DATE.This section is effective for a city that approves it the day
150.24after compliance by the governing body of that city with Minnesota Statutes, section
150.25645.021, subdivision 3.

150.26    Sec. 29. Laws 2008, chapter 366, article 7, section 19, subdivision 3, as amended by
150.27Laws 2011, First Special Session chapter 7, article 4, section 8, is amended to read:
150.28    Subd. 3. Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99,
150.29subdivision 3 , paragraph (b), the proceeds of the tax imposed under this section shall be
150.30used to pay for the costs of improvements to the Sportsman Park/Ballfields, Riverside
150.31Park, Lions Park/Pavilion, Cedar South Park also known as Eldorado Park, and Spring
150.32Street Park; improvements to and extension of the River County Bike Trail; acquisition,
150.33 and construction, improvement, and development of regional parks, bicycle trails, park
151.1land, open space, and of a pedestrian walkways, as described in the city improvement
151.2plan adopted by the city council by resolution on December 12, 2006, and walkway
151.3over Interstate 94 and State Highway 24; and the acquisition of land and construction of
151.4buildings for a community and recreation center. The total amount of revenues from the
151.5taxes in subdivisions 1 and 2 that may be used to fund these projects is $12,000,000
151.6plus any associated bond costs.
151.7EFFECTIVE DATE.This section is effective the day after compliance by the
151.8governing body of the city of Clearwater with Minnesota Statutes, section 645.021,
151.9subdivisions 2 and 3.

151.10    Sec. 30. Laws 2010, chapter 389, article 5, section 6, subdivision 4, is amended to read:
151.11    Subd. 4. Use of lodging tax revenues. The revenues derived from the tax imposed
151.12under subdivision 3 must be used by the city of Marshall to pay the costs of collecting
151.13and administering the lodging tax, to pay all or part of the operating costs of the new and
151.14existing facilities of the Minnesota Emergency Response and Industry Training Center,
151.15including the payment of debt service on bonds issued under subdivision 2, and to pay
151.16all or part of the operating costs of the facilities of the Southwest Minnesota Regional
151.17Amateur Sports Center, including the payment of debt service on bonds issued under
151.18subdivision 2. Authorized expenses include, but are not limited to, acquiring property;
151.19predesign; design; and paying construction, furnishing, and equipment costs related to
151.20these facilities and paying debt service on bonds or other obligations issued by the city.
151.21EFFECTIVE DATE.This section is effective the day following final enactment.

151.22    Sec. 31. Laws 2010, chapter 389, article 5, section 6, subdivision 6, is amended to read:
151.23    Subd. 6. Use of food and beverages tax. The revenues derived from the tax
151.24imposed under subdivision 5 must be used by the city of Marshall to pay the costs of
151.25collecting and administering the food and beverages tax, to pay all or part of the operating
151.26costs of the new and existing facilities of the Minnesota Emergency Response and
151.27Industry Training Center, including the payment of debt service on bonds issued under
151.28subdivision 2, and to pay all or part of the operating costs of the facilities of the Southwest
151.29Minnesota Regional Amateur Sports Center, including the payment of debt service on
151.30bonds issued under subdivision 2. Authorized expenses for each organization include,
151.31but are not limited to, acquiring property; predesign; design; and paying construction,
151.32furnishing, and equipment costs related to these facilities and paying debt service on
151.33bonds or other obligations issued by the city.
152.1EFFECTIVE DATE.This section is effective the day following final enactment.

152.2    Sec. 32. CITY OF MARSHALL; VALIDATION OF PRIOR ACT.
152.3    (a) Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city
152.4of Marshall may approve Laws 2010, chapter 389, article 5, section 6, as amended by
152.5Laws 201l, First Special Session chapter 7, article 4, section 9, and file its approval with
152.6the secretary of state by June 15, 2013. If approved as authorized under this paragraph,
152.7actions undertaken by the city pursuant to the approval of the voters on November 6, 2012,
152.8and otherwise in accordance with Laws 2010, chapter 389, article 5, section 6, as amended
152.9by Laws 201l, First Special Session chapter 7, article 4, section 9, are validated.
152.10    (b) Notwithstanding the time limit on the imposition of tax under Laws 2010,
152.11chapter 389, article 5, section 6, subdivision 1, as amended by Laws 201l, First Special
152.12Session chapter 7, article 4, section 9, and subject to local approval under paragraph (a),
152.13the city of Marshall may impose the tax on or before July 1, 2013.
152.14EFFECTIVE DATE.This section is effective the day following final enactment.

152.15    Sec. 33. CITY OF PROCTOR; VALIDATION OF PRIOR ACT.
152.16    Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city of
152.17Proctor may approve, by resolution, Laws 2008, chapter 366, article 7, section 13, and
152.18Laws 2010, chapter 389, article 5, sections 1 and 2, and file its approval with the secretary
152.19of state by January 1, 2014. If approved under this paragraph, actions undertaken by
152.20the city pursuant to the approval of the voters on November 2, 2010, and otherwise in
152.21accordance with those laws are validated.
152.22EFFECTIVE DATE.This section is effective the day following final enactment.

152.23    Sec. 34. CITY OF BEMIDJI; LOCAL TAXES AUTHORIZED.
152.24    Subdivision 1. Food and beverage tax authorized. Notwithstanding Minnesota
152.25Statutes, section 477A.016, or any ordinance, city charter, or other provision of law, the
152.26city of Bemidji may, by ordinance, impose a sales tax of up to one percent on the gross
152.27receipts of all food and beverages sold by a restaurant or place of refreshment located
152.28within the city. For purposes of this section, "food and beverages" include retail on-sale of
152.29intoxicating liquor and fermented malt beverages.
152.30    Subd. 2. Lodging tax. Notwithstanding Minnesota Statutes, section 469.190 or
152.31477A.016, or any other provision of law, ordinance, or city charter, the city of Bemidji
152.32may impose, by ordinance, a tax of up to one percent on the gross receipts for the
153.1furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
153.2resort, other than for the renting or leasing of it for a continuous period of 30 days or more.
153.3    Subd. 3. Use of proceeds from authorized taxes. The proceeds of the taxes
153.4imposed under subdivisions 1 and 2 must only be used by the city to fund the costs of
153.5operation, maintenance, and capital replacement costs for the Sanford Center.
153.6    Subd. 4. Collection, administration, and enforcement. The city may enter into
153.7an agreement with the commissioner of revenue to administer, collect, and enforce the
153.8taxes under subdivisions 1 and 2. If the commissioner agrees to collect the tax, the
153.9provisions of Minnesota Statutes, section 297A.99, related to collection, administration,
153.10and enforcement, and Minnesota Statutes, section 270C.171, apply.
153.11EFFECTIVE DATE.This section is effective the day after the governing body of
153.12the city of Bemidji and its chief clerical officer comply with Minnesota Statutes, section
153.13645.021, subdivisions 2 and 3.

153.14    Sec. 35. ROCHESTER SALES TAX SHARING.
153.15The city council may, after holding a public hearing and passing a resolution, use
153.16$5,000,000 of the $10,000,000 allocated to an economic development fund in Laws 1998,
153.17chapter 389, article 8, section 43, subdivision 3, as amended by Laws 2005, First Special
153.18Session chapter 3, article 5, section 28, and Laws 2011, First Special Session chapter 7,
153.19article 4, section 5, paragraph (c), clause (9), for grants to any or all of the cities of Altura,
153.20Byron, Chatfield, Dodge Center, Dover, Elgin, Eyota, Grand Meadow, Hayfield, Kasson,
153.21Mantorville, Mazeppa, Oronoco, Pine Island, Plainview, Spring Valley, St. Charles,
153.22Stewartville, Wanamingo, West Concord, and Zumbrota for economic development
153.23projects that these communities would fund through their economic development authority
153.24or housing and redevelopment authority. The public hearing may be part of a regular city
153.25council meeting. If the council does not pass the resolution by September 1, 2013, the
153.26$5,000,000 may not be used for grants to the other cities but shall instead be used to
153.27fund public infrastructure projects contained in the development plan under Minnesota
153.28Statutes, section 469.42.
153.29EFFECTIVE DATE.This section is effective the day following final enactment.

153.30    Sec. 36. REPEALER.
153.31Laws 2009, chapter 88, article 4, section 23, as amended by Laws 2010, chapter 389,
153.32article 5, section 4, is repealed.
153.33EFFECTIVE DATE.This section is effective the day following final enactment.


154.3    Section 1. Minnesota Statutes 2012, section 469.071, subdivision 5, is amended to read:
154.4    Subd. 5. Exception; parking facilities. Notwithstanding section 469.068, the
154.5Bloomington port authority need not require competitive bidding with respect to a
154.6structured parking facility or other public improvements constructed in conjunction with,
154.7and directly above or below, or adjacent and integrally related to, a development and
154.8financed with the proceeds of tax increment or, revenue bonds, or other funds of the
154.9port authority and the city of Bloomington.
154.10EFFECTIVE DATE.This section is effective upon compliance of the governing
154.11body of the city of Bloomington with the requirements of Minnesota Statutes, section
154.12645.021, subdivision 3.

154.13    Sec. 2. Minnesota Statutes 2012, section 469.169, is amended by adding a subdivision
154.14to read:
154.15    Subd. 19. Additional border city allocation; 2013. (a) In addition to the tax
154.16reductions authorized in subdivisions 12 to 18, the commissioner shall allocate $750,000
154.17for tax reductions to border city enterprise zones in cities located on the western border
154.18of the state. The commissioner shall allocate this amount among cities on a per capita
154.19basis. Allocations made under this subdivision may be used for tax reductions under
154.20section 469.171, or for other offsets of taxes imposed on or remitted by businesses located
154.21in the enterprise zone, but only if the municipality determines that the granting of the tax
154.22reduction or offset is necessary to retain a business within or attract a business to the zone.
154.23The city alternatively may elect to use any portion of the allocation under this paragraph
154.24for tax reductions under section 469.1732 or 469.1734.
154.25    (b) The commissioner shall allocate $750,000 for tax reductions under section
154.26469.1732 or 469.1734 to cities with border city enterprise zones located on the western
154.27border of the state. The commissioner shall allocate this amount among the cities on a per
154.28capita basis. The city alternatively may elect to use any portion of the allocation provided
154.29in this paragraph for tax reductions under section 469.171.
154.30EFFECTIVE DATE.This section is effective July 1, 2013.

154.31    Sec. 3. Minnesota Statutes 2012, section 469.176, subdivision 4c, is amended to read:
155.1    Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
155.2from an economic development district may not be used to provide improvements, loans,
155.3subsidies, grants, interest rate subsidies, or assistance in any form to developments
155.4consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
155.5facilities (determined on the basis of square footage) are used for a purpose other than:
155.6    (1) the manufacturing or production of tangible personal property, including
155.7processing resulting in the change in condition of the property;
155.8    (2) warehousing, storage, and distribution of tangible personal property, excluding
155.9retail sales;
155.10    (3) research and development related to the activities listed in clause (1) or (2);
155.11    (4) telemarketing if that activity is the exclusive use of the property;
155.12    (5) tourism facilities; or
155.13    (6) qualified border retail facilities; or
155.14    (7) space necessary for and related to the activities listed in clauses (1) to (6) (5).
155.15    (b) Notwithstanding the provisions of this subdivision, revenues derived from tax
155.16increment from an economic development district may be used to provide improvements,
155.17loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
155.18square feet of any separately owned commercial facility located within the municipal
155.19jurisdiction of a small city, if the revenues derived from increments are spent only to
155.20assist the facility directly or for administrative expenses, the assistance is necessary to
155.21develop the facility, and all of the increments, except those for administrative expenses,
155.22are spent only for activities within the district.
155.23    (c) A city is a small city for purposes of this subdivision if the city was a small city
155.24in the year in which the request for certification was made and applies for the rest of
155.25the duration of the district, regardless of whether the city qualifies or ceases to qualify
155.26as a small city.
155.27    (d) Notwithstanding the requirements of paragraph (a) and the finding requirements
155.28of section 469.174, subdivision 12, tax increments from an economic development district
155.29may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or
155.30assistance in any form to developments consisting of buildings and ancillary facilities, if
155.31all the following conditions are met:
155.32    (1) the municipality finds that the project will create or retain jobs in this state,
155.33including construction jobs, and that construction of the project would not have
155.34commenced before July 1, 2012, without the authority providing assistance under the
155.35provisions of this paragraph;
155.36    (2) construction of the project begins no later than July 1, 2012;
156.1    (3) the request for certification of the district is made no later than June 30, 2012; and
156.2    (4) for development of housing under this paragraph, the construction must begin
156.3before January 1, 2012.
156.4    The provisions of this paragraph may not be used to assist housing that is developed
156.5to qualify under section 469.1761, subdivision 2 or 3, or similar requirements of other law,
156.6if construction of the project begins later than July 1, 2011.
156.7EFFECTIVE DATE.This section is effective for districts for which the request for
156.8certification was made after June 30, 2012.

156.9    Sec. 4. Minnesota Statutes 2012, section 469.176, subdivision 4g, is amended to read:
156.10    Subd. 4g. General government use prohibited. (a) Tax increments may not be
156.11used to circumvent existing levy limit law.
156.12    (b) No tax increment from any district may be used for the acquisition, construction,
156.13renovation, operation, or maintenance of a building to be used primarily and regularly
156.14for conducting the business of a municipality, county, school district, or any other local
156.15unit of government or the state or federal government. This provision does not prohibit
156.16the use of revenues derived from tax increments for the construction or renovation of
156.17a parking structure.
156.18    (c)(1) Tax increments may not be used to pay for the cost of public improvements,
156.19equipment, or other items, if:
156.20    (i) the improvements, equipment, or other items are located outside of the area of the
156.21tax increment financing district from which the increments were collected; and
156.22    (ii) the improvements, equipment, or items that (A) primarily serve a decorative or
156.23aesthetic purpose, or (B) serve a functional purpose, but their cost is increased by more than
156.24100 percent as a result of the selection of materials, design, or type as compared with more
156.25commonly used materials, designs, or types for similar improvements, equipment, or items.
156.26    (2) The provisions of this paragraph do not apply to expenditures related to the
156.27rehabilitation of historic structures that are:
156.28    (i) individually listed on the National Register of Historic Places; or
156.29    (ii) a contributing element to a historic district listed on the National Register
156.30of Historic Places.
156.31EFFECTIVE DATE.This section is effective the day following final enactment for
156.32all tax increment financing districts, regardless of when the request for certification was
156.33made, but applies only to amounts spent after final enactment.

157.1    Sec. 5. Minnesota Statutes 2012, section 469.176, subdivision 6, is amended to read:
157.2    Subd. 6. Action required. (a) If, after four years from the date of certification of
157.3the original net tax capacity of the tax increment financing district pursuant to section
157.4469.177 , no demolition, rehabilitation, or renovation of property or other site preparation,
157.5including qualified improvement of a street adjacent to a parcel but not installation
157.6of utility service including sewer or water systems, has been commenced on a parcel
157.7located within a tax increment financing district by the authority or by the owner of the
157.8parcel in accordance with the tax increment financing plan, no additional tax increment
157.9may be taken from that parcel, and the original net tax capacity of that parcel shall be
157.10excluded from the original net tax capacity of the tax increment financing district. If the
157.11authority or the owner of the parcel subsequently commences demolition, rehabilitation,
157.12or renovation or other site preparation on that parcel including qualified improvement of
157.13a street adjacent to that parcel, in accordance with the tax increment financing plan, the
157.14authority shall certify to the county auditor that the activity has commenced, and the
157.15county auditor shall certify the net tax capacity thereof as most recently certified by the
157.16commissioner of revenue and add it to the original net tax capacity of the tax increment
157.17financing district. The county auditor must enforce the provisions of this subdivision. The
157.18authority must submit to the county auditor evidence that the required activity has taken
157.19place for each parcel in the district. The evidence for a parcel must be submitted by
157.20February 1 of the fifth year following the year in which the parcel was certified as included
157.21in the district. For purposes of this subdivision, qualified improvements of a street are
157.22limited to (1) construction or opening of a new street, (2) relocation of a street, and (3)
157.23substantial reconstruction or rebuilding of an existing street.
157.24    (b) For districts which were certified on or after January 1, 2005, and before April
157.2520, 2009, the four-year period under paragraph (a) is increased to six years deemed to end
157.26on December 31, 2016.
157.27EFFECTIVE DATE.This section is effective the day following final enactment
157.28and applies to districts certified on or after January 1, 2006, and before April 20, 2009.

157.29    Sec. 6. Minnesota Statutes 2012, section 469.177, is amended by adding a subdivision
157.30to read:
157.31    Subd. 1d. Original net tax capacity adjustment; homestead market value
157.32exclusion. (a) Upon approval by the municipality, by resolution, the authority may elect
157.33to reduce the net tax capacity of a qualified district by the amount of the tax capacity
157.34attributable to the market value exclusion under section 273.13, subdivision 35. The
157.35amount of the reduction may not reduce the original net tax capacity below zero.
158.1    (b) For purposes of this subdivision, a qualified district means a tax increment
158.2financing district that satisfies the following conditions:
158.3    (1) for taxes payable in 2011, the authority received a homestead market value credit
158.4reimbursement under section 273.1384 for the district of $10,000 or more;
158.5    (2) for taxes payable in 2013, the reduction in captured tax capacity resulting from
158.6the market value exclusion for the district was equal to or greater than 1.75 percent of the
158.7district's captured tax capacity; and
158.8    (3) either (i) the authority is permitted to expend increments on activities under the
158.9provisions of section 469.1763, subdivision 3, or an equivalent provision of special law
158.10on July 1, 2013, or (ii) the district's tax increments received for taxes payable in 2012
158.11exceeded the amount of debt service payments due during calendar year 2012 on bonds
158.12issued under section 469.178 to which the district's increments are pledged.
158.13The calculation of the amount under clause (2) must reflect any adjustments to original
158.14net tax capacity made under subdivision 1, paragraphs (d) and (e), for the homestead
158.15market value exclusion.
158.16    (c) The authority must notify the county auditor of its election under this section no
158.17later than July 1, 2014. Notifications made by July 1, 2013, are effective beginning for
158.18taxes payable in 2014, and notifications made after July 1, 2013, are effective beginning
158.19for taxes payable in 2015.
158.20EFFECTIVE DATE.This section is effective the day following final enactment
158.21and applies to all tax increment financing districts regardless of when the request for
158.22certification was made.

158.23    Sec. 7. Minnesota Statutes 2012, section 473F.08, is amended by adding a subdivision
158.24to read:
158.25    Subd. 3c. Mall of America. (a) When computing the net tax capacity under section
158.26473F.05, the Hennepin County auditor shall exclude the captured tax capacity of Tax
158.27Increment Financing Districts No. 1-C and No. 1-G in the city of Bloomington.
158.28    (b) Notwithstanding the provisions of subdivision 2, paragraph (a), the
158.29commercial-industrial contribution percentage for the city of Bloomington is the
158.30contribution net tax capacity divided by the total net tax capacity of commercial-industrial
158.31property in the city, excluding any commercial-industrial property that is captured tax
158.32capacity of Tax Increment Financing Districts No. 1-C and No. 1-G.
158.33    (c) The property taxes to be paid on commercial-industrial tax capacity that is
158.34included in the captured tax capacity of Tax Increment Financing Districts No. 1-C and
159.1No. 1-G in the city of Bloomington must be determined as described in subdivision 6,
159.2except that the portion of the tax that is based on the areawide tax rate is to be treated
159.3as tax increment under section 469.176.
159.4    (d) The provisions of this subdivision take effect only if the clerk of the city of
159.5Bloomington certifies to the Hennepin County auditor that the city has entered into a
159.6binding written agreement with the Metropolitan Council to repair and restore, or to
159.7replace, the old Cedar Avenue bridge for use by bicycle commuters and recreational users.
159.8    (e) This subdivision expires on the earliest of the following dates:
159.9    (1) when the tax increment financing districts have been decertified in 2024 or 2035,
159.10as provided by section 10, subdivision 2 or 4; or
159.11    (2) on January 1, 2014, if the city clerk fails to make the certification provided in
159.12paragraph (d) or if the city fails to file its local approval of section 18 with the secretary
159.13of state by December 31, 2013.
159.14EFFECTIVE DATE.This section is effective beginning for property taxes payable
159.15in 2014.

159.16    Sec. 8. Laws 2008, chapter 366, article 5, section 26, is amended to read:
159.17    Sec. 26. BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR
159.18RULE.
159.19    (a) The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
159.20activities must be undertaken within a five-year period from the date of certification of
159.21a tax increment financing district, are increased to a ten-year 15-year period for the
159.22Port Authority of the City of Bloomington's Tax Increment Financing District No. 1-I,
159.23Bloomington Central Station.
159.24    (b) Notwithstanding the provisions of Minnesota Statutes, section 469.176, or any
159.25other law to the contrary, the city of Bloomington and its port authority may extend the
159.26duration limits of the district for a period through December 31, 2039.
159.27    (c) Effective for taxes payable in 2014, tax increment for the district must be
159.28computed using the current local tax rate, notwithstanding the provisions of Minnesota
159.29Statutes, section 469.177, subdivision 1a.
159.30EFFECTIVE DATE.Paragraphs (a) and (c) are effective upon compliance by
159.31the governing body of the city of Bloomington with the requirements of Minnesota
159.32Statutes, section 645.021, subdivision 3. Paragraph (b) is effective upon compliance by
159.33the governing bodies of the city of Bloomington, Hennepin County, and Independent
160.1School District No. 271 with the requirements of Minnesota Statutes, sections 469.1782,
160.2subdivision 2, and 645.021, subdivision 3.

160.3    Sec. 9. Laws 2008, chapter 366, article 5, section 34, as amended by Laws 2009,
160.4chapter 88, article 5, section 11, is amended to read:
160.5    Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY PARCELS
160.6DEEMED OCCUPIED.
160.7    (a) The provisions of this section apply to redevelopment tax increment financing
160.8districts created by the Housing and Redevelopment Authority in and for the city of
160.9Oakdale in the areas comprised of the parcels with the following parcel identification
160.10numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056;
160.113102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059;
160.123102921320060; 3102921320061; 3102921330005; and 3102921330004; and (2)
160.132902921330001 and 2902921330005.
160.14    (b) For a district subject to this section, the Housing and Redevelopment Authority
160.15may, when requesting certification of the original tax capacity of the district under
160.16Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district
160.17be certified as the tax capacity of the land.
160.18    (c) The authority to request certification of a district under this section expires on
160.19July 1, 2013.
160.20    (a) Parcel numbers 3102921320054, 3102921320055, 3102921320056,
160.213102921320057, 3102921320061, and 3102921330004 are deemed to meet the
160.22requirements of Minnesota Statutes, section 469.174, subdivision 10, paragraph (d),
160.23notwithstanding any contrary provisions of that paragraph, if the following conditions
160.24are met:
160.25    (1) a building located on any part of each of the specified parcels was demolished after
160.26the Housing and Redevelopment Authority for the city of Oakdale adopted a resolution
160.27under Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), clause (3);
160.28    (2) the building was removed either by the authority, by a developer under a
160.29development agreement with the Housing and Redevelopment Authority for the city of
160.30Oakdale, or by the owner of the property without entering into a development agreement
160.31with the Housing and Redevelopment Authority for the city of Oakdale; and
160.32    (3) the request for certification of the parcel as part of a district is filed with the
160.33county auditor by December 31, 2017.
160.34    (b) The provisions of this section allow an election by the Housing and
160.35Redevelopment Authority for the city of Oakdale for the parcels deemed occupied under
161.1paragraph (a), notwithstanding the provisions of Minnesota Statutes, sections 469.174,
161.2subdivision 10, paragraph (d), and 469.177, subdivision 1, paragraph (f).
161.3    (c) The city may elect, in the tax increment financing plan, to collect increment from
161.4a redevelopment district created under the provisions of this section for an additional ten
161.5years beyond the limit in Minnesota Statutes, section 469.176, subdivision 1b.
161.6EFFECTIVE DATE.This section is effective upon compliance by the governing
161.7body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021,
161.8subdivision 3, except that the provisions of paragraph (c) are effective only upon
161.9compliance with Minnesota Statutes, section 469.1782, subdivision 2, by Ramsey County
161.10and Independent School District No. 622.

161.11    Sec. 10. Laws 2010, chapter 216, section 55, is amended to read:
161.12    Sec. 55. OAKDALE; TAX INCREMENT FINANCING DISTRICT.
161.13    Subdivision 1. Duration of district. Notwithstanding the provisions of Minnesota
161.14Statutes, section 469.176, subdivision 1b, the city of Oakdale may collect tax increments
161.15from Tax Increment Financing District No. 6 (Bergen Plaza) through December 31, 2024
161.16 2040, subject to the conditions described in subdivision 2.
161.17    Subd. 2. Conditions for extension. (a) Subdivision 1 applies only if the following
161.18conditions are met:
161.19    (1) by July 1, 2011, the city of Oakdale has entered into a development agreement
161.20with a private developer for development or redevelopment of all or a substantial part of
161.21the area parcels described in clause (2); and
161.22    (2) by November 1, 2011, the city of Oakdale or a private developer commences
161.23construction of streets, traffic improvements, water, sewer, or related infrastructure that
161.24serves one or both of the parcels with the following parcel identification numbers:
161.252902921330001 and 2902921330005. For the purposes of this section, construction
161.26commences upon grading or other visible improvements that are part of the subject
161.27infrastructure.
161.28    (b) All tax increments received by the city of Oakdale under subdivision 1 after
161.29December 31, 2016, must be used only to pay costs that are both:
161.30    (1) related to redevelopment of the parcels specified in this subdivision or
161.31parcel numbers 3102921320053, 3102921320054, 3102921320055, 3102921320056,
161.323102921320057, 3102921320058, 3102921320059, 3102921320060, 3102921320061,
161.333102921320062, 3102921320063, 3102921330004, and 3102921330005, including,
161.34without limitation, any of the infrastructure referenced in this subdivision that serves
161.35any of the referenced parcels; and
162.1    (2) otherwise eligible under law to be paid with increments from the specified tax
162.2increment financing district, except the authority under this clause does not apply to
162.3increments collected after the conclusion of the duration limit under general law.
162.4EFFECTIVE DATE.This section is effective upon compliance by the governing
162.5body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021,
162.6subdivision 3, except that the amendments to subdivision 1 are effective only upon
162.7compliance with Minnesota Statutes, section 469.1782, subdivision 2, by Ramsey County
162.8and Independent School District No. 622.

162.9    Sec. 11. CITY OF BLOOMINGTON; TAX INCREMENT FINANCING.
162.10    Subdivision 1. Addition of property to Tax Increment Financing District
162.11No. 1-G. (a) Notwithstanding the provisions of Minnesota Statutes, section 469.175,
162.12subdivision 4, or any other law to the contrary, the governing bodies of the Port Authority
162.13of the city of Bloomington and the city of Bloomington may elect to eliminate the real
162.14property north of the existing building line on Lot 1, Block 1, Mall of America 7th
162.15Addition, exclusive of Lots 2 and 3 from Tax Increment Financing District No. 1-C
162.16within Industrial Development District No. 1 Airport South in the city of Bloomington,
162.17Minnesota, and expand the boundaries of Tax Increment Financing District No. 1-G
162.18to include that property.
162.19    (b) If the city elects to transfer parcels under this authority, the county auditor shall
162.20transfer the original tax capacity of the affected parcels from Tax Increment Financing
162.21District No. 1-C to Tax Increment Financing District No. 1-G.
162.22    Subd. 2. Authority to extend duration limit; computation of increment. (a)
162.23Notwithstanding Minnesota Statutes, section 469.176, or Laws 1996, chapter 464, article
162.241, section 8, or any other law to the contrary, the city of Bloomington and its port authority
162.25may extend the duration limits of Tax Increment Financing Districts No. 1-C and No.
162.261-G through December 31, 2034.
162.27    (b) Effective for property taxes payable in 2017 through 2034, the captured tax
162.28capacity of Tax Increment Financing District No. 1-C must be included in computing the
162.29tax rates of each local taxing district and the tax increment equals only the amount of tax
162.30computed under Minnesota Statutes, section 473F.08, subdivision 3c, paragraph (c).
162.31    (c) Effective for property taxes payable in 2019 through 2034, the captured tax
162.32capacity of Tax Increment Financing District No. 1-G must be included in computing the
162.33tax rates of each local taxing district and the tax increment for the district equals only
162.34the amount of tax computed under Minnesota Statutes, section 473F.08, subdivision
162.353c, paragraph (c).
163.1    Subd. 3. Treatment of increment. Increments received under the provisions
163.2of subdivision 2, paragraph (b) or (c), and Minnesota Statutes, section 473F.08,
163.3subdivision 3c, are deemed to be tax increments of Tax Increment Financing District No.
163.41-G, notwithstanding any law to the contrary, and without regard to whether they are
163.5attributable to captured tax capacity of Tax Increment Financing District No. 1-C.
163.6    Subd. 4. Condition. The authority under this section expires and Tax Increment
163.7Financing Districts No. 1-C and No. 1-G must be decertified for taxes payable in 2024
163.8and thereafter, if the total estimated market value of improvements for parcels located in
163.9Tax Increment Financing District No. 1-G, as modified, do not exceed $100,000,000
163.10by taxes payable in 2023.
163.11EFFECTIVE DATE.This section is effective upon compliance of the governing
163.12body of the city of Bloomington with the requirements of Minnesota Statutes, section
163.13645.021, subdivision 3, but only if the city enters into a binding written agreement with
163.14the Metropolitan Council to repair and restore, or to replace, the old Cedar Avenue bridge
163.15for use by bicycle commuters and recreational users. This section is effective without
163.16approval of the county and school district under Minnesota Statutes, section 469.1782,
163.17subdivision 2. The legislature finds that the county and school district are not "affected
163.18local government units" within the meaning of Minnesota Statutes, section 469.1782,
163.19because the provision allowing extended collection of increment by the tax increment
163.20financing districts does not affect their tax bases and tax rates dissimilarly to other counties
163.21and school districts in the metropolitan area.

163.22    Sec. 12. ST. CLOUD; TAX INCREMENT FINANCING.
163.23    The request for certification of Tax Increment Financing District No. 2, commonly
163.24referred to as the Norwest District, in the city of St. Cloud is deemed to have been made
163.25on or after August 1, 1979, and before July 1, 1982. Revenues derived from tax increment
163.26for that district must be treated for purposes of any law as revenue of a tax increment
163.27financing district for which the request for certification was made during that time period.
163.28EFFECTIVE DATE.This section is effective upon approval by the governing
163.29body of the city of St. Cloud and compliance with Minnesota Statutes, section 645.021,
163.30subdivision 3.

163.31    Sec. 13. DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY; TAX
163.32INCREMENT FINANCING DISTRICT.
164.1    Subdivision 1. Authorization. Notwithstanding the provisions of any other law,
164.2the Dakota County Community Development Agency may establish a redevelopment tax
164.3increment financing district comprised of the properties that were:
164.4    (1) included in the CDA 10 Robert and South Street district in the city of West
164.5St. Paul; and
164.6    (2) not decertified before July 1, 2012.
164.7The district created under this section terminates no later than December 31, 2018.
164.8    Subd. 2. Special rules. The requirements for qualifying a redevelopment district
164.9under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located
164.10within the district. Minnesota Statutes, section 469.176, subdivision 4j, do not apply to the
164.11district. The original tax capacity of the district is $93,239.
164.12    Subd. 3. Authorized expenditures. Tax increment from the district may be
164.13expended to pay for any eligible activities authorized by Minnesota Statutes, chapter 469,
164.14within the redevelopment area that includes the district, provided that the boundaries of
164.15the redevelopment area may not be expanded to add new area after April 1, 2013. All
164.16expenditures for eligible activities are deemed to be activities within the district under
164.17Minnesota Statutes, section 469.1763, subdivisions 2 to 4.
164.18    Subd. 4. Adjusted net tax capacity. The captured tax capacity of the district must
164.19be included in the adjusted net tax capacity of the city, county, and school district for the
164.20purposes of determining local government aid, education aid, and county program aid.
164.21The county auditor shall report to the commissioner of revenue the amount of the captured
164.22tax capacity for the district at the time the assessment abstracts are filed.
164.23EFFECTIVE DATE.This section is effective upon compliance by the governing
164.24body of the Dakota County Community Development Agency with the requirements of
164.25Minnesota Statutes, section 645.021, subdivision 3.

164.26    Sec. 14. CITY OF GLENCOE; TAX INCREMENT FINANCING DISTRICT
164.27EXTENSION.
164.28    Subdivision 1. Duration of district. Notwithstanding the provisions of Minnesota
164.29Statutes, section 469.176, subdivision 1b, paragraph (a), clause (4), or any other law to the
164.30contrary, the city of Glencoe may collect tax increments from Tax Increment Financing
164.31District No. 4 (McLeod County District No. 007) through December 31, 2023, subject to
164.32the conditions in subdivision 2.
164.33    Subd. 2. Exclusive use of revenues. (a) All tax increments derived from Tax
164.34Increment Financing District No. 4 (McLeod County District No. 007) that are collected
165.1after December 31, 2013, must be used only to pay debt service on or to defease bonds that
165.2were outstanding on January 1, 2013 and that were issued to finance improvements serving:
165.3    (1) Tax Increment Financing District No. 14 (McLeod County District No. 033)
165.4(Downtown);
165.5    (2) Tax Increment Financing District No. 15 (McLeod County District No. 035)
165.6(Industrial Park); and
165.7    (3) benefited properties as further described in proceedings related to the city's series
165.82007A bonds, dated September 1, 2007, and any bonds issued to refund those bonds.
165.9    (b) Increments may also be used to pay debt service on or to defease bonds issued to
165.10refund the bonds described in paragraph (a), if the refunding bonds do not increase the
165.11present value of debt service due on the refunded bonds when the refunding is closed.
165.12    (c) When the bonds described in paragraphs (a) and (b) have been paid or defeased,
165.13the district must be decertified and any remaining increment returned to the city, county,
165.14and school district as provided in Minnesota Statutes, section 469.176, subdivision 2,
165.15paragraph (c), clause (4).
165.16EFFECTIVE DATE.This section is effective upon compliance by the governing
165.17bodies of the city of Glencoe, McLeod County, and Independent School District No.
165.182859 with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and
165.19645.021, subdivision 3.

165.20    Sec. 15. CITY OF ELY; TAX INCREMENT FINANCING.
165.21    Subdivision 1. Extension of district. Notwithstanding Minnesota Statutes, section
165.22469.176, subdivision 1b, or any other law to the contrary, the city of Ely may collect
165.23tax increment from Tax Increment Financing District No. 1 through December 31,
165.242021. Increments from the district may only be used to pay binding obligations and
165.25administrative expenses.
165.26    Subd. 2. Binding obligations. For purposes of this section, "binding obligations"
165.27means the binding contractual or debt obligation of Tax Increment Financing District
165.28No. 1 entered into before January 1, 2013.
165.29    Subd. 3. Expenditures outside district. Notwithstanding Minnesota Statutes,
165.30section 469.1763, subdivision 2, the governing body of the city of Ely may elect to
165.31transfer revenues derived from increments from its Tax Increment Financing District No.
165.323 to the tax increment account established under Minnesota Statutes, section 469.177,
165.33subdivision 5, for Tax Increment Financing District No. 1. The amount that may be
165.34transferred is limited to the lesser of:
165.35    (1) $168,000; or
166.1    (2) the total amount due on binding obligations and outstanding on that date, less the
166.2amount of increment collected by Tax Increment Financing District No. 1 after December
166.331, 2012, and administrative expenses of Tax Increment Financing District No. 1 incurred
166.4after December 31, 2012.
166.5EFFECTIVE DATE.This section is effective upon approval by the governing
166.6bodies of the city of Ely, St. Louis County, and Independent School District No. 696 with
166.7the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021,
166.8subdivision 3.

166.9    Sec. 16. CITY OF MAPLEWOOD; TAX INCREMENT FINANCING
166.10DISTRICT; SPECIAL RULES.
166.11    (a) If the city of Maplewood elects, upon the adoption of a tax increment financing
166.12plan for a district, the rules under this section apply to one or more redevelopment
166.13tax increment financing districts established by the city or the economic development
166.14authority of the city. The area within which the redevelopment tax increment districts may
166.15be created is parcel 362922240002 (the "parcel") or any replatted parcels constituting a
166.16part of the parcel and the adjacent rights-of-way. For purposes of this section, the parcel is
166.17the "3M Renovation and Retention Project Area" or "project area."
166.18    (b) The requirements for qualifying redevelopment tax increment districts under
166.19Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcel, which is
166.20deemed eligible for inclusion in a redevelopment tax increment district.
166.21    (c) The 90 percent rule under Minnesota Statutes, section 469.176, subdivision
166.224j, does not apply to the parcel.
166.23    (d) The expenditures outside district rule under Minnesota Statutes, section
166.24469.1763, subdivision 2, does not apply; the five-year rule under Minnesota Statutes,
166.25section 469.1763, subdivision 3, is extended to ten years; and expenditures must only
166.26be made within the project area.
166.27    (e) If, after one year from the date of certification of the original net tax capacity
166.28of the tax increment district, no demolition, rehabilitation, or renovation of property has
166.29been commenced on a parcel located within the tax increment district, no additional tax
166.30increment may be taken from that parcel, and the original net tax capacity of the parcel
166.31shall be excluded from the original net tax capacity of the tax increment district. If 3M
166.32Company subsequently commences demolition, rehabilitation, or renovation, the authority
166.33shall certify to the county auditor that the activity has commenced, and the county auditor
166.34shall certify the net tax capacity thereof as most recently certified by the commissioner
166.35of revenue and add it to the original net tax capacity of the tax increment district. The
167.1authority must submit to the county auditor evidence that the required activity has taken
167.2place for each parcel in the district.
167.3    (f) The authority to approve a tax increment financing plan and to establish a tax
167.4increment financing district under this section expires December 31, 2018.
167.5EFFECTIVE DATE.This section is effective upon approval by the governing
167.6body of the city of Maplewood and upon compliance with Minnesota Statutes, section
167.7645.021, subdivision 3.

167.8    Sec. 17. CITY OF MINNEAPOLIS; STREETCAR FINANCING.
167.9    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
167.10have the meanings given them.
167.11    (b) "City" means the city of Minneapolis.
167.12    (c) "County" means Hennepin County.
167.13    (d) "District" means the areas certified by the city under subdivision 2 for collection
167.14of value capture taxes.
167.15    (e) "Project area" means the area including one city block on either side of a streetcar
167.16line designated by the city to serve the downtown and adjacent neighborhoods of the city.
167.17    Subd. 2. Authority to establish district. (a) The governing body of the city may, by
167.18resolution, establish a value capture district consisting of some or all of the taxable parcels
167.19located within one or more of the following areas of the city, as described in the resolution:
167.20    (1) the area bounded by Nicollet Avenue on the west, 16th Street East on the south,
167.21First Avenue South on the east, and 14th Street East on the north;
167.22    (2) the area bounded by Spruce Place on the west, 14th Street West on the south,
167.23LaSalle Avenue on the east, and Grant Street West on the north;
167.24    (3) the area bounded by Nicollet Avenue or Mall on the west, Fifth Street South on
167.25the south, Marquette Avenue on the east, and Fourth Street South on the north; and
167.26    (4) the area bounded by First Avenue North on the west, Washington Avenue on the
167.27south, Hennepin Avenue on the east, and Second Street North on the north.
167.28    (b) The city may establish the district and the project area only after holding a public
167.29hearing on its proposed creation after publishing notice of the hearing and the proposal at
167.30least once not less than ten days nor more than 30 days before the date of the hearing.
167.31    Subd. 3. Calculation of value capture district; administrative provisions. (a) If
167.32the city establishes a value capture district under subdivision 2, the city shall request the
167.33county auditor to certify the district for calculation of the district's tax revenues.
167.34    (b) For purposes of calculating the tax revenues of the district, the county auditor
167.35shall treat the district as if it were a request for certification of a tax increment financing
168.1district under the provisions of Minnesota Statutes, section 469.177, subdivision 1,
168.2and shall calculate the tax revenues of the district for each year of its duration under
168.3subdivision 4 as equaling the amount of tax increment that would be computed by
168.4applying the provisions of Minnesota Statutes, section 469.177, subdivisions 1, 2, and
168.53, to determine captured tax capacity and multiplying by the current tax rate, excluding
168.6the state general tax rate. The city shall provide the county auditor with the necessary
168.7information to certify the district, including the option for calculating revenues derived
168.8from the areawide tax rate under Minnesota Statutes, chapter 473F.
168.9    (c) The county auditor shall pay to the city at the same times provided for settlement
168.10of taxes and payment of tax increments the tax revenues of the district. The city must use
168.11the tax revenues as provided under subdivision 4.
168.12    Subd. 4. Permitted uses of district tax revenues. (a) In addition to paying for
168.13reasonable administrative costs of the district, the city may spend tax revenues of the
168.14district for property acquisition, improvements, and equipment to be used for operations
168.15within the project area, along with related costs, for:
168.16    (1) planning, design, and engineering services related to the construction of the
168.17streetcar line;
168.18    (2) acquiring property for, constructing, and installing a streetcar line;
168.19    (3) acquiring and maintaining equipment and rolling stock and related facilities, such
168.20as maintenance facilities, which need not be located in the project area;
168.21    (4) acquiring, constructing, or improving transit stations; and
168.22    (5) acquiring or improving public space, including the construction and installation
168.23of improvements to streets and sidewalks, decorative lighting and surfaces, and plantings
168.24related to the streetcar line.
168.25    (b) The city may issue bonds or other obligations under Minnesota Statutes, chapter
168.26475, without an election, to fund acquisition or improvement of property of a capital
168.27nature authorized by this section, including any costs of issuance. The city may also issue
168.28bonds or other obligations to refund those bonds or obligations. Payment of principal
168.29and interest on the bonds or other obligations issued under this paragraph is a permitted
168.30use of the district's tax revenues.
168.31    (c) Tax revenues of the district may not be used for the operation of the streetcar line.
168.32    Subd. 5. Duration of the district. A district established under this section is limited
168.33to the lesser of (1) 25 years of tax revenues, or (2) the time necessary to collect tax revenues
168.34equal to the amount of the capital costs permitted under subdivision 4 or the amount needed
168.35to pay or defease bonds or other obligations issued under subdivision 4, whichever is later.
168.36EFFECTIVE DATE.This section is effective the day following final enactment.

169.1    Sec. 18. CITY OF BLOOMINGTON; OLD CEDAR AVENUE BRIDGE.
169.2    (a) Notwithstanding any law to the contrary, the city of Bloomington shall transfer
169.3from the tax increment financing accounts for its Tax Increment Financing District No.
169.41-C and Tax Increment Financing District No. 1-G an amount equal to the tax increment
169.5for each district that is computed under the provisions of Minnesota Statutes, section
169.6473F.08, subdivision 3c, for taxes payable in 2014 to an account or fund established for
169.7the repair, restoration, or replacement of the Old Cedar Avenue bridge for use by bicycle
169.8commuters and recreational users. The city is authorized to and must use the transferred
169.9funds to complete the repair, renovation, or replacement of the bridge.
169.10    (b) No signs, plaques, or markers acknowledging or crediting donations for,
169.11sponsorships of, or naming rights may be posted on or in the vicinity of the Old Cedar
169.12Avenue bridge.
169.13EFFECTIVE DATE.This section is effective upon compliance by the city of
169.14Bloomington with the requirements of Minnesota Statutes, section 645.021, subdivision 3.

169.15    Sec. 19. LABOR PEACE AGREEMENTS.
169.16(a) Labor peace agreements are required on any qualifying project in which the state
169.17or a local government has a proprietary interest or acts as a market participant if the
169.18project will result in the employment of hospitality workers.
169.19(b) For the purposes of this section:
169.20(1) the state or a local government has a proprietary interest or acts as a market
169.21participant in a project where it is the owner of the project or finances the project in whole
169.22or in part by any of the following: providing a grant; providing a loan; contributing real
169.23property, personal property, or infrastructure; guaranteeing any payment under any loan,
169.24lease, or other obligation; providing tax increment financing; contributing revenue on
169.25general obligation bonds; or providing a tax abatement, reduction, deferral, or credit;
169.26(2) "qualifying project" means a project that is located in a county that contains a
169.27city of the first class as defined under Minnesota Statutes, section 410.01, and includes the
169.28construction or development of a hotel, a food and beverage operation that is integral to
169.29or adjacent to a hotel, a sports facility, a convention center, a civic center, or a cultural
169.30venue with catering or cafeteria facilities;
169.31(3) "hospitality workers" means all full-time or regular part-time employees of
169.32hotels and their adjacent or integral food and beverage operations as well as all full-time or
169.33regular part-time employees providing food and beverage, concession, catering, cafeteria,
169.34or merchandise services at sports facilities, convention centers, civic centers, or cultural
169.35venues, excluding supervisors, managers, and guards;
170.1(4) "employer of hospitality workers" means an employer of hospitality workers
170.2on a qualifying project and includes a developer of a state or local government-owned
170.3facility on a qualifying project or a developer of a facility benefiting from state or local
170.4government financing on a qualifying project; and
170.5(5) "labor peace agreement" means a valid collective bargaining agreement or other
170.6contract under United States Code, title 29, section 185, between an employer of hospitality
170.7workers and any labor organization seeking to represent hospitality workers on a qualifying
170.8project. Such agreements must contain a provision prohibiting the labor organization and
170.9its members, and in the case of a collective bargaining agreement, all employees covered
170.10by the agreement, from engaging in any picketing, work stoppages, boycotts, or any other
170.11economic interference with the employer's hospitality operations on the qualifying project
170.12for the duration of the state or local government's proprietary interest in the qualifying
170.13project or as long as the state or local government acts as a market participant in the
170.14qualifying project. Each such agreement must provide that during this time period all
170.15disputes relating to employment conditions or the negotiation thereof shall be submitted
170.16to final and binding arbitration. Each such agreement must provide that the employer of
170.17hospitality workers shall require that any services to be performed by hospitality workers
170.18employed by the employer's contractors, subcontractors, tenants, or subtenants shall be
170.19done under collective bargaining agreements or other contracts under United States Code,
170.20title 29, section 185, containing the same provisions as specified in this clause.
170.21(c) Any employer of hospitality workers on a qualifying project in which the state or
170.22a local government has a proprietary interest or acts as a market participant must have a
170.23labor peace agreement with any interested labor organization prior to, and as a condition
170.24precedent of, state or local government financing. When the state or a local government
170.25acts as project owner, any employer of hospitality workers must have a signed labor peace
170.26agreement with any interested labor organization prior to, and as a condition precedent to,
170.27its contract with the state or local government.


170.30    Section 1. Minnesota Statutes 2012, section 297A.71, is amended by adding a
170.31subdivision to read:
170.32    Subd. 45. Construction materials, public infrastructure related to the
170.33Destination medical center. Materials and supplies used in, and equipment incorporated
170.34into, the construction and improvement of publicly owned buildings and infrastructure
171.1included in the development plan adopted under section 469.42, and financed with public
171.2funds, are exempt.
171.3EFFECTIVE DATE.This section is effective for sales and purchases made after
171.4June 30, 2015.

171.5    Sec. 2. [469.40] DEFINITIONS.
171.6    Subdivision 1. Application. For the purposes of section 469.40 to 469.46, the terms
171.7defined in this section have the meanings given them.
171.8    Subd. 2. City. "City" means the city of Rochester.
171.9    Subd. 3. County. "County" means Olmsted County.
171.10    Subd. 4. Destination Medical Center Corporation, corporation, DMCC.
171.11"Destination Medical Center Corporation," "corporation," or "DMCC" means the
171.12nonprofit corporation created by the city as provided in section 469.41, and organized
171.13under chapter 317A.
171.14    Subd. 5. Destination medical center development district. "Destination medical
171.15center development district" or "development district" means a geographic area in the
171.16city identified in the adopted DMCC development plan in which public infrastructure
171.17projects are implemented.
171.18    Subd. 6. Development plan. "Development plan" means the plan adopted by
171.19the DMCC under section 469.42.
171.20    Subd. 7. Medical business entity. "Medical business entity" means a medical
171.21business entity with its principal place of business in the city that, as of the effective date
171.22of this section, together with all business entities of which it is the sole member or sole
171.23shareholder, collectively employs more than 30,000 persons in the state.
171.24    Subd. 8. Public infrastructure project. (a) "Public infrastructure project" means
171.25a project financed in part or whole with public money in order to support the medical
171.26business entity's development plans, as identified in the adopted DMCC development
171.27plan. A project may be to:
171.28(1) acquire real property and other assets associated with the real property;
171.29(2) demolish, repair, or rehabilitate buildings;
171.30(3) remediate land and buildings as required to prepare the property for acquisition
171.31or development;
171.32(4) install, construct, or reconstruct elements of public infrastructure required to
171.33support the overall development of the destination medical center development district,
171.34including, but not limited to, streets, roadways, utilities systems and related facilities,
171.35utility relocations and replacements, network and communication systems, streetscape
172.1improvements, drainage systems, sewer and water systems, subgrade structures and
172.2associated improvements, landscaping, façade construction and restoration, wayfinding
172.3and signage, and other components of community infrastructure;
172.4(5) acquire, construct or reconstruct, and equip parking facilities and other facilities
172.5to encourage intermodal transportation and public transit;
172.6(6) install, construct or reconstruct, furnish, and equip parks, cultural, and
172.7recreational facilities, facilities to promote tourism and hospitality, conferencing and
172.8conventions, broadcast and related multimedia infrastructure;
172.9(7) make related site improvements, including, without limitation, excavation, earth
172.10retention, soil stabilization and correction, site improvements to support the destination
172.11medical center development district; and
172.12(8) prepare land for private development and to sell or lease land.
172.13    (b) A public infrastructure project is not a business subsidy under section 116J.993.

172.14    Sec. 3. [469.41] DESTINATION MEDICAL CENTER CORPORATION
172.15ESTABLISHED.
172.16    Subdivision 1. DMCC created. The city shall establish a destination medical
172.17center corporation as a nonprofit corporation under chapter 317A to provide the city with
172.18expertise in preparing and implementing the development plan to establish the city as a
172.19destination medical center. Except as provided in this article, the nonprofit corporation
172.20is not subject to laws governing the city.
172.21    Subd. 2. Membership. (a) The corporation's governing board consists of nine
172.22voting members, as follows:
172.23    (1) the mayor of the city, or the mayor's designee, subject to approval by the city
172.24council;
172.25    (2) a member of the city council, selected by the city council;
172.26    (3) a member of the county board, selected by the county board;
172.27    (4) two representatives of the medical business entity defined in section 469.40,
172.28subdivision 7, appointed by the city council from among five candidates nominated by the
172.29medical business entity;
172.30(5) one representative of labor, appointed by the city council from among three
172.31candidates nominated by the Southeast Minnesota Area Labor Council;
172.32(6) one representative of the city business community other than the medical
172.33business entity, appointed by the city council from among three candidates nominated by
172.34the Rochester Area Chamber of Commerce; and
172.35    (7) two members, appointed by the governor.
173.1    (b) Appointing authorities must make their appointments as soon as practicable after
173.2the effective date of this section.
173.3    Subd. 3. Bylaws. The corporation shall adopt bylaws governing the terms of
173.4members, filling vacancies, removal of members, selection of officers and other personnel
173.5and contractors, and other matters of organization and operation of the corporation.
173.6    Subd. 4. Open meeting law; data practices. Meetings of the corporation and any
173.7committee or subcommittee of the corporation are subject to the open meeting law in
173.8chapter 13D. The corporation is a government entity for purposes of chapter 13.
173.9    Subd. 5. Conflicts of interest. Except for the members appointed under subdivision
173.102, paragraph (a), clause (4), to represent the medical business entity, within one year
173.11prior to or at any time during a member's term of service on the corporation's governing
173.12board, a member must not be employed by, be a member of the board of directors of, or
173.13otherwise be a representative of the medical business entity. No member may serve as a
173.14lobbyist, as defined under section 10A.01, subdivision 21.
173.15    Subd. 6. Powers; gifts. The corporation may exercise any other powers that are
173.16granted by its articles of incorporation and bylaws to the extent that those powers are not
173.17inconsistent with the provisions of sections 469.40 to 469.46. Notwithstanding any law to
173.18the contrary, the corporation may accept and use gifts of money or in-kind and may use
173.19any of its money or assets, other than money or assets received from the city, county, or
173.20state, to develop and implement the adopted development plan.
173.21    Subd. 7. Dissolution. The city shall provide for the terms for dissolution of the
173.22corporation in the articles of incorporation.

173.23    Sec. 4. [469.42] DEVELOPMENT PLAN.
173.24    Subdivision 1. Development plan; adoption by DMCC; notice; findings. (a)
173.25The corporation shall prepare and adopt a development plan. The corporation must
173.26hold a public hearing before adopting a development plan. At least 45 days before the
173.27hearing, the corporation shall make copies of the proposed plan available to the public at
173.28the corporation and city offices during normal business hours, on the corporation's and
173.29city's Web site, and as otherwise determined appropriate by the corporation. At least ten
173.30days before the hearing, the corporation shall publish notice of the hearing in a daily
173.31newspaper of general circulation in the city. The development plan may not be adopted
173.32unless the corporation finds by resolution that:
173.33(1) the plan provides an outline for the development of the city as a destination
173.34medical center, and the plan is sufficiently complete, including the identification of planned
173.35and anticipated projects, to indicate its relationship to definite state and local objectives;
174.1(2) the proposed development affords maximum opportunity, consistent with the
174.2needs of the city, county, and state, for the development of the city by private enterprise
174.3as a destination medical center;
174.4(3) the proposed development conforms to the general plan for the development of
174.5the city and is consistent with the city comprehensive plan;
174.6(4) the plan includes:
174.7(i) strategic planning consistent with a destination medical center in the core areas of
174.8commercial research and technology, learning environment, hospitality and convention,
174.9sports and recreation, livable communities, including mixed-use urban development
174.10and neighborhood residential development, retail/dining/entertainment, and health and
174.11wellness;
174.12(ii) estimates of short- and long-range fiscal and economic impacts;
174.13(iii) a framework to identify and prioritize short- and long-term public investment
174.14and public infrastructure project development and to facilitate private investment and
174.15development;
174.16(iv) land use planning;
174.17(v) transportation and transit planning;
174.18(vi) operational planning required to support the medical center development
174.19district; and
174.20(vii) ongoing market research plans; and
174.21(5) the city has approved the plan.
174.22(b) The identification of planned and anticipated projects under paragraph (a), clause
174.23(1), must give priority to projects that will pay wages at least equal to the basic cost of
174.24living wage as calculated by the commissioner of employment and economic development
174.25for the county in which the project is located. The calculation of the basic cost of living
174.26wage shall be done as provided for under Minnesota Statutes, section 116J.013, if enacted
174.27by the 2013 legislature.
174.28    Subd. 2. Modification of development plan. The corporation may modify the
174.29development plan at any time. The corporation must update the development plan not less
174.30than every five years. A modification or update under this subdivision must be adopted by
174.31the corporation upon the notice and after the public hearing and findings required for the
174.32original adoption of the development plan.
174.33    Subd. 3. Medical center development districts; creation; notice; findings. As
174.34part of the development plan, the corporation may create and define the boundaries of
174.35medical center development districts and subdistricts at any place or places within the
175.1city. Projects may be undertaken within defined medical center development districts
175.2consistent with the development plan.
175.3    Subd. 4. DMCC consultant. (a) The corporation may engage a business entity
175.4consultant to provide experience and expertise in developing the destination medical
175.5center. The consultant may assist the corporation in preparing the development plan and
175.6provide services to assist the corporation or city in implementing, consistent with the
175.7development plan, the goals, objectives, and strategies in the development plan, including,
175.8but not limited to:
175.9(1) developing and updating the criteria for evaluating and underwriting
175.10development proposals;
175.11(2) implementing the development plan, including soliciting and evaluating
175.12proposals for development and evaluating and making recommendations to the corporation
175.13and the city regarding those proposals;
175.14(3) providing transactional services in connection with approved projects;
175.15(4) developing patient, visitor, and community outreach programs for a destination
175.16medical center development district;
175.17(5) working with the corporation to acquire and facilitate the sale, lease, or other
175.18transactions involving land and real property;
175.19(6) seeking financial support for the corporation, the city, and a project;
175.20(7) partnering with other development agencies and organizations and the county in
175.21joint efforts to promote economic development and establish a destination medical center;
175.22(8) supporting and administering the planning and development activities required to
175.23implement the development plan;
175.24(9) preparing and supporting the marketing and promotion of the medical center
175.25development district;
175.26(10) preparing and implementing a program for community and public relations in
175.27support of the medical center development district;
175.28(11) assisting the corporation or city and others in applications for federal grants, tax
175.29credits, and other sources of funding to aid both private and public development; and
175.30(12) making other general advisory recommendations to the corporation and the
175.31city, as requested.
175.32(b) The corporation may contract with the consultant to provide administrative
175.33services to the corporation with regard to the destination medical center plan
175.34implementation. The corporation may pay for those services out of any revenue sources
175.35available to it.
176.1    Subd. 5. Audit of consultant contracts. Any contract for services between the
176.2corporation and a consultant paid, in whole or in part, with public money gives the
176.3corporation, the city, and the state auditor the right to audit the books and records of the
176.4consultant that are necessary to certify (1) the nature and extent of the services furnished
176.5pursuant to the contract, and (2) that the payment for services and related disbursements
176.6complies with all state laws, regulations, and the terms of the contract. Any contract for
176.7services between the corporation and the consultant paid, in whole or in part, with public
176.8money shall require the corporation to maintain for the life of the corporation accurate and
176.9complete books and records directly relating to the contract.
176.10    Subd. 6. Report. By January 15 of each year, the corporation and city must submit
176.11a report to the chairs and ranking minority members of the legislative committees with
176.12jurisdiction over local and state government operations, economic development, and taxes,
176.13and to the commissioners of revenue and employment and economic development, and
176.14the county. The corporation and city must also submit the report as provided in section
176.153.195. The report must include:
176.16(1) the adopted development plan and any proposed changes to the development plan;
176.17(2) progress of projects identified in the development plan;
176.18(3) actual costs and financing sources, including the amount paid with state aid under
176.19section 469.46 and required local contributions, of projects completed in the previous two
176.20years by the corporation, city, the county, and the medical business entity;
176.21(4) estimated costs and financing sources for projects to be begun in the next two
176.22years by the corporation, city, the county, and the medical business entity; and
176.23(5) debt service schedules for all outstanding obligations of the city for debt issued
176.24for projects identified in the plan.

176.25    Sec. 5. [469.43] CITY POWERS, DUTIES; AUTHORITY TO ISSUE BONDS.
176.26    Subdivision 1. Port authority powers. The city may exercise the powers of a
176.27port authority under sections 469.048 to 469.068, for the purposes of implementing the
176.28destination medical center development plan.
176.29    Subd. 2. Support to the corporation. The city may provide financial and
176.30administrative support and office and other space to the corporation. The city may
176.31appropriate money of the city to the corporation for its work.
176.32    Subd. 3. City to issue debt. The city may issue general obligation bonds, revenue
176.33bonds, or other obligations, as it determines appropriate, to finance public infrastructure
176.34projects, as provided by chapter 475. Notwithstanding section 475.53 obligations issued
176.35under this section are not subject to the limits on net debt, regardless of their source of
177.1security or payment. Notwithstanding section 475.58 or any other law or charter provision
177.2to the contrary, issuance of obligations under the provisions of this section are not subject
177.3to approval of the electors. The city may pledge any of its revenues, including property
177.4taxes, the taxes authorized by sections 469.44 and 469.45, and the state aid under section
177.5469.46, as security for and to pay the obligations. The city must not issue obligations that
177.6are only payable from or secured by state aid under section 469.46.
177.7    Subd. 4. American made steel. The city must require that a public infrastructure
177.8project use American steel products to the extent practicable. In determining whether it
177.9is practicable, the city may consider the exceptions to the requirement in Public Law
177.10111-5, section 1605.

177.11    Sec. 6. [469.44] CITY TAX AUTHORITY.
177.12    Subdivision 1. Rochester, other local taxes authorized. (a) Notwithstanding
177.13section 477A.016, or any other contrary provision of law, ordinance, or city charter, and in
177.14addition to any taxes the city may impose on these transactions under another statute or
177.15law, the city of Rochester may, by ordinance impose at a rate or rates, determined by the
177.16city, any of the following taxes:
177.17(1) a tax on the gross receipts from the furnishing for consideration of lodging and
177.18related services as defined in section 297A.61, subdivision 3, paragraph (g), clause (2); the
177.19city may choose to impose a differential tax based on the number of rooms in the facility;
177.20(2) a tax on the gross receipts of food and beverages sold primarily for consumption
177.21on the premises by restaurants and places of refreshment that occur in the city of
177.22Rochester; the city may elect to impose the tax in a defined district of the city; and
177.23(3) a tax on the admission receipts to entertainment and recreational facilities, as
177.24defined by ordinance, in the city of Rochester.
177.25(b) The provisions of section 297A.99, subdivisions 4 to 13, govern the
177.26administration, collection, and enforcement of any tax imposed by the city under
177.27paragraph (a).
177.28(c) The proceeds of any taxes imposed under this subdivision, less refunds and costs
177.29of collection, must be used by the city to fund obligations related to public infrastructure
177.30projects contained in the development plan, including any associated financing costs. Any
177.31tax imposed under paragraph (a) expires at the earlier of December 31, 2041, or when the
177.32city council determines that sufficient funds have been raised from the tax plus all other
177.33local funding sources authorized in this article to meet the city obligation for financing a
177.34public infrastructure project contained in the development plan, including any associated
177.35financing costs.
178.1    Subd. 2. General sales tax authority. The city may elect to extend the existing
178.2local sales and use tax under section 11 or to impose an additional rate of up to one-half of
178.3one percent tax on sales and use under section 9.
178.4    Subd. 3. Special abatement rules. (a) If the city or the county elects to use tax
178.5abatement under sections 469.1812 to 469.1815 to finance costs of public infrastructure
178.6projects, the special rules under this subdivision apply.
178.7(b) The limitations under section 469.1813, subdivision 6, do not apply to the city
178.8or the county.
178.9(c) The limitations under section 469.1813, subdivision 8, do not apply and property
178.10taxes abated by the city or the county to finance costs of public infrastructure projects are
178.11not included for purposes of applying section 469.1813, subdivision 8, to the use of tax
178.12abatement for other purposes of the city or the county; however, the total amount of property
178.13taxes abated by the city and the county under this authority must not exceed $87,750,000.
178.14    Subd. 4. Special tax increment financing rules. If the city elects to establish
178.15a redevelopment tax increment financing district or districts within the area of the
178.16destination medical center development district, the requirements of section 469.174,
178.17subdivision 10, restricting the geographic areas that may be designated as a district do not
178.18apply and increments from the district are not required to be spent in accordance with the
178.19requirements of section 469.176, subdivision 4j.

178.20    Sec. 7. [469.45] COUNTY TAX AUTHORITY.
178.21(a) Notwithstanding sections 297A.99, 297A.993, and 477A.016, or any other
178.22contrary provision of law, ordinance, or charter, and in addition to any taxes the county
178.23may impose under another law or statute, the board of commissioners of Olmsted County
178.24may, by resolution, impose a transit tax of up to one quarter of one percent on retail sales
178.25and uses taxable under chapter 297A. The provisions of section 297A.99, subdivisions
178.264 to 13, govern the imposition, administration, collection, and enforcement of the tax
178.27authorized under this paragraph.
178.28(b) The board of commissioners of Olmsted County may, by resolution, levy an
178.29annual wheelage tax of up to $10 on each motor vehicle kept in the county when not in
178.30operation which is subject to annual registration and taxation under chapter 168. The
178.31wheelage tax shall not be imposed on the vehicles exempt from wheelage tax under
178.32section 163.051, subdivision 1. The board by resolution may provide for collection of the
178.33wheelage tax by county officials or it may request that the tax be collected by the state
178.34registrar on behalf of the county. The provisions of section 163.051, subdivisions 2, 2a, 3,
178.35and 7, shall govern the administration, collection, and enforcement of the tax authorized
179.1under this paragraph. The tax authorized under this section is in addition to any tax the
179.2county may be authorized to impose under section 163.051, but until January 1, 2018,
179.3the county tax imposed under this paragraph, in combination with any tax imposed under
179.4section 163.051, must equal the specified rate under section 163.051.
179.5(c) The proceeds of any taxes imposed under this subdivision, less refunds and
179.6costs of collection, must be first used by the county to meet its share of obligations for
179.7financing transit infrastructure related to the public infrastructure projects contained in
179.8the development plan, including any associated financing costs. Revenues collected in
179.9any calendar year in excess of the county obligation to pay for projects contained in the
179.10development plan may be retained by the county and used for funding other transportation
179.11projects, including roads and bridges, airport and transit improvements.
179.12(d) Any taxes imposed under paragraph (a), expire December 31, 2041, or at an
179.13earlier time if approved by resolution of the county board of commissioners. However,
179.14the taxes may not terminate before the county board of commissioners determines that
179.15revenues from these taxes and any other revenue source the county dedicates are sufficient
179.16to pay the county share of transit project costs and associated financing costs under the
179.17adopted development plan.

179.18    Sec. 8. [469.46] STATE INFRASTRUCTURE AID.
179.19    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
179.20have the meanings given them.
179.21(b) "Commissioner" means the commissioner of employment and economic
179.22development.
179.23(c) "Construction projects" means construction of buildings in the city for which the
179.24building permit was issued after June 30, 2013.
179.25(d) "Expenditures" means expenditures made by a medical business entity, including
179.26any affiliated entities, on construction projects for the capital cost of the project, including
179.27but not limited to:
179.28(1) design and predesign, including architectural, engineering, and similar services;
179.29(2) legal, regulatory, and other compliance costs of the project;
179.30(3) land acquisition, demolition of existing improvements, and other site preparation
179.31costs;
179.32(4) construction costs including all materials and supplies of the project; and
179.33(5) equipment and furnishings that are attached to or become part of the real property.
180.1Expenditures exclude supplies and other items with a useful life of less than a year that
180.2are not used or consumed in constructing improvements to real property or are otherwise
180.3chargeable to capital costs.
180.4(e) "Qualified expenditures" has the following meaning. In the first year in which
180.5aid is paid under this section "qualified expenditures" mean the total certified expenditures
180.6since June 30, 2013, through the end of the previous calendar year minus $200,000,000.
180.7For subsequent years "qualified expenditures" mean the certified expenditures for the
180.8previous calendar year.
180.9(f) "Transit costs" means the portions of a public infrastructure project that are for
180.10public transit intended primarily to serve the district, such as transit stations, equipment,
180.11right-of-way, and similar costs.
180.12    Subd. 2. Certification of expenditures. By April 1 of each year, the medical
180.13business entity must certify to the commissioner the amount of expenditures made in the
180.14prior calendar year. The certification must be made in the form that the commissioner
180.15prescribes and include any documentation of and supporting information regarding the
180.16expenditures that the commissioner requires. By August 1 of each year, the commissioner
180.17shall determine the amount of the expenditures for the prior calendar year.
180.18    Subd. 3. General state infrastructure aid. (a) General state infrastructure aid may
180.19not be paid out under this section until total expenditures exceed $200,000,000.
180.20(b) The amount of the general state infrastructure aid for a fiscal year equals the sum
180.21of qualified expenditures, multiplied by 2.75 percent. The maximum amount of general
180.22state aid payable in any year is limited to no more than $30,000,000. If the aid entitlement
180.23for the year exceeds the maximum annual limit, the excess is an aid carryover to later
180.24years. The carryover aid must be paid in the first year in which the aid entitlement for the
180.25current year is less than the maximum annual limit, but only to the extent the carryover,
180.26when added to the current year aid, is less than the maximum annual limit.
180.27(c) If the commissioner determines that the city has made the required matching
180.28local contribution under subdivision 4, the commissioner shall pay to the city the amount
180.29of general state infrastructure aid for the year by September 1.
180.30(d) The city must use general state infrastructure aid it receives under this
180.31subdivision for improvements and other capital costs related to the public infrastructure
180.32project, other than transit costs. The city shall maintain appropriate records to document
180.33the use of the funds under this requirement.
180.34(e) The commissioner, in consultation with the commissioner of management and
180.35budget and representatives of the city and the corporation, shall establish a total limit on
180.36the amount of state aid payable under this subdivision that is sufficient, in combination
181.1with the local contribution, to pay for $455,000,000 of general public infrastructure
181.2projects, plus financing costs.
181.3    Subd. 4. General aid; local matching contribution. In order to qualify for general
181.4state infrastructure aid, the city must enter a written agreement with the commissioner that
181.5requires the city to make a qualifying local matching contribution to pay for $128,000,000
181.6of the cost of public infrastructure projects, including associated financing costs, using
181.7funds other than state aid received under this section. This agreement must provide for the
181.8manner, timing, and amounts of the city contributions, including the city's commitment for
181.9each year. The commissioner and city may agree to amend the agreement at any time in
181.10light of new information or other appropriate factors. The city may enter arrangements
181.11with the county to pay for or otherwise meet the local matching contribution requirement.
181.12    Subd. 5. State transit aid. (a) The city qualifies for state transit aid under this
181.13section if:
181.14(1) the county has elected to impose the transit sales tax under section 469.45 for a
181.15calendar year; and
181.16(2) the county contributes the required local matching contribution under subdivision
181.176 or the city or county have agreed to make an equivalent contribution out of other funds.
181.18(b) The amount of the state transit aid for a fiscal year equals the sum of qualified
181.19expenditures, as certified by the commissioner for the prior calendar year, multiplied
181.20by 0.75 percent, reduced by the amount of the local contribution under subdivision 6.
181.21The maximum amount of state transit aid payable in any year is limited to no more than
181.22$7,500,000. If the aid entitlement for the year exceeds the maximum annual limit, the
181.23excess is an aid carryover to later years. The carryover aid must be paid in the first year
181.24in which the aid entitlement for the current year is less than the maximum annual limit,
181.25but only to the extent the carryover, when added to the current year aid, is less than the
181.26maximum annual limit.
181.27    (c) The commissioner, in consultation with the commissioner of management and
181.28budget and representatives of the city and the corporation, shall establish a total limit on
181.29the amount of state aid payable under this subdivision that is sufficient, in combination
181.30with the local contribution, to pay for $116,000,000 of general public infrastructure
181.31projects, plus financing costs.
181.32    Subd. 6. Transit aid; local matching contribution. (a) The required local matching
181.33contribution for state transit aid equals the lesser of (1) 40 percent of the state transit aid
181.34under subdivision 5, or (2) the amount that would be raised by a 0.15 percent sales tax
181.35imposed by the county in the prior calendar year. The county may impose the sales tax or
181.36the wheelage tax under section 469.45 to meet this obligation.
182.1(b) If the county elects not to impose any of the taxes authorized under section 469.45,
182.2the county or city or both may agree to make the local contribution out of other available
182.3funds, other than state aid payable under this section. The commissioner of revenue shall
182.4estimate the required amount and certify it to the commissioner, city, and county.
182.5    Subd. 7. Termination. No aid may be paid under this section after fiscal year 2041.
182.6    Subd. 8. Appropriation. An amount sufficient to pay the state general infrastructure
182.7and state transit aid authorized under this section is appropriated to the commissioner
182.8from the general fund.

182.9    Sec. 9. Laws 1998, chapter 389, article 8, section 43, subdivision 1, is amended to read:
182.10    Subdivision 1. Sales and use taxes authorized. (a) Notwithstanding Minnesota
182.11Statutes, section 477A.016, or any other contrary provision of law, ordinance, or city
182.12charter, upon termination of the taxes authorized under Laws 1992, chapter 511, article
182.138, section 33, subdivision 1, and if approved by the voters of the city at a general or
182.14special election held within one year of the date of final enactment of this act, the city of
182.15Rochester may, by ordinance, impose an additional sales and use tax of up to one-half
182.16of one percent. The provisions of Minnesota Statutes, section 297A.48, 297A.99 govern
182.17the imposition, administration, collection, and enforcement of the tax authorized under
182.18this subdivision paragraph.
182.19    (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
182.20other contrary provision of law, ordinance, or charter, the city of Rochester may, by
182.21ordinance, impose an additional sales and use tax of up to one half of one percent. The
182.22provisions of Minnesota Statutes, section 297A.99, subdivisions 1 and 4 to 13, govern
182.23the imposition, administration, collection, and enforcement of the tax authorized under
182.24this paragraph.

182.25    Sec. 10. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by
182.26Laws 2005, First Special Session chapter 3, article 5, section 28, and Laws 2011, First
182.27Special Session chapter 7, article 4, section 5, is amended to read:
182.28    Subd. 3. Use of revenues. (a) Revenues received from the taxes authorized by
182.29subdivisions 1, paragraph (a), and 2 must be used by the city to pay for the cost of
182.30collecting and administering the taxes and to pay for the following projects:
182.31    (1) transportation infrastructure improvements including regional highway and
182.32airport improvements;
182.33    (2) improvements to the civic center complex;
183.1    (3) a municipal water, sewer, and storm sewer project necessary to improve regional
183.2ground water quality; and
183.3    (4) construction of a regional recreation and sports center and other higher education
183.4facilities available for both community and student use.
183.5    (b) The total amount of capital expenditures or bonds for projects listed in paragraph
183.6(a) that may be paid from the revenues raised from the taxes authorized in this section
183.7may not exceed $111,500,000. The total amount of capital expenditures or bonds for the
183.8project in clause (4) that may be paid from the revenues raised from the taxes authorized
183.9in this section may not exceed $28,000,000.
183.10(c) In addition to the projects authorized in paragraph (a) and not subject to the
183.11amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an
183.12election under subdivision 5, paragraph (c), use the revenues received from the taxes and
183.13bonds authorized in this section to pay the costs of or bonds for the following purposes:
183.14(1) $17,000,000 for capital expenditures and bonds for the following Olmsted
183.15County transportation infrastructure improvements:
183.16(i) County State Aid Highway 34 reconstruction;
183.17(ii) Trunk Highway 63 and County State Aid Highway 16 interchange;
183.18(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22 interchange;
183.19(iv) widening of County State Aid Highway 22 West Circle Drive; and
183.20(v) 60th Avenue Northwest corridor preservation;
183.21(2) $30,000,000 for city transportation projects including:
183.22(i) Trunk Highway 52 and 65th Street interchange;
183.23(ii) NW transportation corridor acquisition;
183.24(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;
183.25(iv) Trunk Highway 14 and Trunk Highway 63 intersection;
183.26(v) Southeast transportation corridor acquisition;
183.27(vi) Rochester International Airport expansion; and
183.28(vii) a transit operations center bus facility;
183.29(3) $14,000,000 for the University of Minnesota Rochester academic and
183.30complementary facilities;
183.31(4) $6,500,000 for the Rochester Community and Technical College/Winona State
183.32University career technical education and science and math facilities;
183.33(5) $6,000,000 for the Rochester Community and Technical College regional
183.34recreation facilities at University Center Rochester;
183.35(6) $20,000,000 for the Destination Medical Community Initiative;
183.36(7) $8,000,000 for the regional public safety and 911 dispatch center facilities;
184.1(8) $20,000,000 for a regional recreation/senior center;
184.2(9) $10,000,000 for an economic development fund; and
184.3(10) $8,000,000 for downtown infrastructure.
184.4(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1
184.5and 2 may be used to fund transportation improvements related to a railroad bypass that
184.6would divert traffic from the city of Rochester.
184.7(e) The city shall use $5,000,000 of the money allocated to the purpose in paragraph
184.8(c), clause (9), for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin,
184.9Eyota, Kasson, Mantorville, Oronoco, Pine Island, Plainview, St. Charles, Stewartville,
184.10Zumbrota, Spring Valley, West Concord, and Hayfield for economic development projects
184.11that these communities would fund through their economic development authority or
184.12housing and redevelopment authority.
184.13(e) Notwithstanding Minnesota Statutes, section 297A.99, subdivisions 2 and 3, if
184.14the city decides to extend the taxes in subdivisions 1, paragraph (a), and 2, as allowed
184.15under subdivision 5, paragraph (c), the city must use any amount in excess of the amount
184.16necessary to meet obligations under paragraphs (a) to (c) from those taxes to fund
184.17obligations, including associated financing costs, related to public infrastructure projects
184.18in the development plan adopted under Minnesota Statutes, section 469.42.
184.19(f) Revenues from the tax under subdivision 1, paragraph (b), must be used to fund
184.20obligations, including associated financing costs, related to the public infrastructure
184.21projects contained in the development plan adopted by the city under Minnesota Statutes,
184.22section 469.42.

184.23    Sec. 11. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by
184.24Laws 2005, First Special Session chapter 3, article 5, section 30, and Laws 2011, First
184.25Special Session chapter 7, article 4, section 7, is amended to read:
184.26    Subd. 5. Termination of taxes. (a) The taxes imposed under subdivisions 1 and 2
184.27expire at the later of (1) December 31, 2009, or (2) when the city council determines that
184.28sufficient funds have been received from the taxes to finance the first $71,500,000 of capital
184.29expenditures and bonds for the projects authorized in subdivision 3, including the amount to
184.30prepay or retire at maturity the principal, interest, and premium due on any bonds issued for
184.31the projects under subdivision 4, unless the taxes are extended as allowed in paragraph (b).
184.32Any funds remaining after completion of the project and retirement or redemption of the
184.33bonds shall also be used to fund the projects under subdivision 3. The taxes imposed under
184.34subdivisions 1 and 2 may expire at an earlier time if the city so determines by ordinance.
185.1    (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
185.2other contrary provision of law, ordinance, or city charter, the city of Rochester may, by
185.3ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009,
185.4if approved by the voters of the city at a special election in 2005 or the general election in
185.52006. The question put to the voters must indicate that an affirmative vote would allow
185.6up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000
185.7of bonds to be issued above the amount authorized in the June 23, 1998, referendum for
185.8the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are
185.9extended under this paragraph, the taxes expire when the city council determines that
185.10sufficient funds have been received from the taxes to finance the projects and to prepay
185.11or retire at maturity the principal, interest, and premium due on any bonds issued for the
185.12projects under subdivision 4. Any funds remaining after completion of the project and
185.13retirement or redemption of the bonds may be placed in the general fund of the city.
185.14(c) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
185.15other contrary provision of law, ordinance, or city charter, the city of Rochester may,
185.16by ordinance, extend the taxes authorized in subdivisions 1, paragraph (a), and 2 up to
185.17December 31, 2041, provided that all additional revenues above those necessary to fund
185.18the projects and associated financing costs listed in subdivision 3, paragraphs (a) to (e),
185.19are committed to fund public infrastructure projects contained in the development plan
185.20adopted under Minnesota Statutes, section 469.42, including all associated financing
185.21costs; otherwise the taxes terminate when beyond the date the city council determines
185.22that sufficient funds have been received from the taxes to finance $111,500,000 of the
185.23expenditures and bonds for the projects authorized in subdivision 3, paragraph (a)
185.24 paragraphs (a) to (e), plus an amount equal to the costs of issuance of the bonds and
185.25including the amount to prepay or retire at maturity the principal, interest, and premiums
185.26due on any bonds issued for the projects under subdivision 4, paragraph (a), if approved
185.27by the voters of the city at the general election in 2012. If the election to authorize the
185.28additional $139,500,000 of bonds plus an amount equal to the costs of the issuance of the
185.29bonds is placed on the general election ballot in 2012, the city may continue to collect the
185.30taxes authorized in subdivisions 1 and 2 until December 31, 2012. The question put to
185.31the voters must indicate that an affirmative vote would allow sales tax revenues be raised
185.32for an extended period of time and an additional $139,500,000 of bonds plus an amount
185.33equal to the costs of issuance of the bonds, to be issued above the amount authorized in
185.34the previous elections required under paragraphs (a) and (b) for the projects and amounts
185.35specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended
185.36under this paragraph, the taxes expire when the city council determines that $139,500,000
186.1has been received from the taxes to finance the projects plus an amount sufficient to
186.2prepay or retire at maturity the principal, interest, and premium due on any bonds issued
186.3for the projects under subdivision 4, including any bonds issued to refund the bonds. Any
186.4funds remaining after completion of the projects and retirement or redemption of the
186.5bonds may be placed in the general fund of the city.
186.6(d) The tax imposed under subdivision 1, paragraph (b), expires at the earlier of
186.72041, or when the city council determines that sufficient funds have been raised from the
186.8tax plus all other city funding sources authorized in this article to meet the city obligation
186.9for financing the public infrastructure projects contained in the development plan adopted
186.10under Minnesota Statutes, section 469.42, including all associated financing costs.

186.11    Sec. 12. ROCHESTER AREA DEVELOPMENT AND TRANSPORTATION
186.12IMPACTS STUDY.
186.13(a) From funds appropriated by law for the purposes of this section, the commissioner
186.14of transportation shall in consultation with the Rochester-Olmsted Council of Governments
186.15enter into an agreement with a consultant to perform a study of economic development
186.16and transportation impacts in the Rochester metropolitan area, including the feasibility of
186.17high-speed rail between Rochester and the seven-county metropolitan area. To be eligible,
186.18a consultant must have experience and expertise in a majority of the following: economics,
186.19economic development, demography, urban planning, engineering, and transportation.
186.20(b) At a minimum, the study under this section must:
186.21(1) utilize at least a 20-year planning horizon;
186.22(2) perform a comprehensive planning assessment of key transportation
186.23infrastructure throughout the Rochester metropolitan area based on (i) long-range
186.24transportation plans developed by the Rochester-Olmsted Council of Governments, and
186.25(ii) expected and potential economic development patterns;
186.26(3) analyze major roadways across all jurisdictions including, but not limited to,
186.27trunk highways; county highways; and arterial city streets; and interconnections with other
186.28modes in conjunction with ongoing rail and airports studies;
186.29(4) analyze the feasibility of a high-speed rail connection between Rochester and the
186.30Mall of America via Minnesota State Highway 77 with connections to the Minneapolis-St.
186.31Paul International Airport and the Union Depot in St. Paul;
186.32(5) to the extent feasible, take into account available data, forecasts, available
186.33transportation demand modeling information, and transportation impacts of major
186.34economic initiatives and proposals including, but not limited to, expansion of the Mayo
186.35Clinic; and
187.1(6) provide scenarios and identify revenue shortfalls to address both short-term and
187.2long-term deficiencies in safety, mobility, congestion, and transportation infrastructure
187.3condition.
187.4(c) By January 15, 2014, the commissioner shall provide an electronic copy of the
187.5study to the chairs and ranking minority members of the legislative committees with
187.6jurisdiction over transportation policy and finance, as provided in Minnesota Statutes,
187.7section 174.02, subdivision 8.

187.8    Sec. 13. EFFECTIVE DATE.
187.9Except as otherwise provided, this article is effective the day after the governing
187.10body of the city of Rochester and its chief clerical officer timely comply with Minnesota
187.11Statutes, section 645.021, subdivisions 2 and 3.


187.14    Section 1. [116C.992] SILICA SAND MINING ACCOUNT.
187.15    A silica sand mining account is created in the special revenue fund. Money in the
187.16account is available for development of model standards, technical assistance to counties
187.17and other governments, other assistance to counties, and other purposes as appropriated
187.18by law.

187.19    Sec. 2. Minnesota Statutes 2012, section 126C.48, subdivision 8, is amended to read:
187.20    Subd. 8. Taconite payment and other reductions. (1) Reductions in levies
187.21pursuant to subdivision 1 must be made prior to the reductions in clause (2).
187.22(2) Notwithstanding any other law to the contrary, districts that have revenue
187.23pursuant to sections 298.018; 298.225; 298.24 to 298.28, except an amount distributed
187.24under sections 298.26; 298.28, subdivision 4, paragraphs (c), clause (ii), and (d); 298.34
187.25to 298.39; 298.391 to 298.396; 298.405; 477A.15; and any law imposing a tax upon
187.26severed mineral values must reduce the levies authorized by this chapter and chapters
187.27120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A by 95 percent of the sum of the
187.28previous year's revenue specified under this clause and the amount attributable to the same
187.29production year distributed to the cities and townships within the school district under
187.30section 298.28, subdivision 2, paragraph (c).
187.31(3) The amount of any voter approved referendum, facilities down payment, and
187.32debt levies shall not be reduced by more than 50 percent under this subdivision. In
187.33administering this paragraph, the commissioner shall first reduce the nonvoter approved
188.1levies of a district; then, if any payments, severed mineral value tax revenue or recognized
188.2revenue under paragraph (2) remains, the commissioner shall reduce any voter approved
188.3referendum levies authorized under section 126C.17; then, if any payments, severed
188.4mineral value tax revenue or recognized revenue under paragraph (2) remains, the
188.5commissioner shall reduce any voter approved facilities down payment levies authorized
188.6under section 123B.63 and then, if any payments, severed mineral value tax revenue or
188.7recognized revenue under paragraph (2) remains, the commissioner shall reduce any
188.8voter approved debt levies.
188.9(4) Before computing the reduction pursuant to this subdivision of the health and
188.10safety levy authorized by sections 123B.57 and 126C.40, subdivision 5, the commissioner
188.11shall ascertain from each affected school district the amount it proposes to levy under
188.12each section or subdivision. The reduction shall be computed on the basis of the amount
188.13so ascertained.
188.14(5) To the extent the levy reduction calculated under paragraph (2) exceeds the
188.15limitation in paragraph (3), an amount equal to the excess must be distributed from the
188.16school district's distribution under sections 298.225, 298.28, and 477A.15 in the following
188.17year to the cities and townships within the school district in the proportion that their
188.18taxable net tax capacity within the school district bears to the taxable net tax capacity of
188.19the school district for property taxes payable in the year prior to distribution. No city or
188.20township shall receive a distribution greater than its levy for taxes payable in the year prior
188.21to distribution. The commissioner of revenue shall certify the distributions of cities and
188.22towns under this paragraph to the county auditor by September 30 of the year preceding
188.23distribution. The county auditor shall reduce the proposed and final levies of cities and
188.24towns receiving distributions by the amount of their distribution. Distributions to the cities
188.25and towns shall be made at the times provided under section 298.27.
188.26EFFECTIVE DATE.This section is effective for levies certified in 2013 and later.

188.27    Sec. 3. [297J.01] DEFINITIONS.
188.28    Subdivision 1. Scope. Unless otherwise defined in this chapter, or unless the
188.29context clearly indicates otherwise, the terms used in this chapter have the meaning given
188.30them in this section. The definitions in this section are for tax administration purposes
188.31and apply to this chapter.
188.32    Subd. 2. Commissioner. "Commissioner" means the commissioner of revenue or a
188.33person to whom the commissioner has delegated functions.
189.1    Subd. 3. Mining. "Mining" means excavating and mining of silica sand by any
189.2process, including digging, excavating, drilling, blasting, tunneling, dredging, stripping,
189.3or by shaft.
189.4    Subd. 4. Person. "Person" means an individual, fiduciary, estate, trust, partnership,
189.5or corporation.
189.6    Subd. 5. Processing. "Processing" means washing, cleaning, screening, crushing,
189.7filtering, sorting, stockpiling, and storing silica sand at the mining site or at any other site.
189.8    Subd. 6. Qualified processor. "Qualified processor" means any person who
189.9operates a mining and processing facility at the same location and uses means to
189.10reasonably prevent silica sand particles from becoming airborne. These methods include,
189.11but are not limited to, prohibiting outdoor storage piles, the use of a slurry pipeline to
189.12carry aggregate material into the washing facility, completely enclosing the washing
189.13facility, and any other means necessary or reasonable to significantly prevent silica sand
189.14particles from becoming airborne.
189.15    Subd. 7. Silica sand. "Silica sand" means well-rounded, sand-sized grains of quartz
189.16(silica dioxide) with very few impurities in terms of other minerals. Specifically, silica
189.17sand for the purpose of this section is commercially valuable for use in the hydraulic
189.18fracturing of shale to obtain oil and natural gas. Silica sand does not include common
189.19rock, stone, aggregate, gravel, sand with a low quartz level, or silica compounds recovered
189.20as a by-product of metallic mining.
189.21    Subd. 8. Temporary storage. "Temporary storage" means the storage of stockpiles
189.22of silica sand that have been transported and are awaiting further transport or processing.
189.23    Subd. 9. Ton. "Ton" means 2,000 pounds.
189.24    Subd. 10. Transporting. "Transporting" means hauling silica sand, by any carrier:
189.25    (1) from the mining site to a processing or transfer site; or
189.26    (2) from a processing or storage site to a rail, barge, or transfer site for shipment.
189.27    Subd. 11. Year. "Year" means a calendar year.
189.28EFFECTIVE DATE.This section is effective the day following final enactment.

189.29    Sec. 4. [297J.02] TAX IMPOSED.
189.30    Subdivision 1. Mining and storage tax; rate. A tax is hereby imposed on any
189.31person who: (1) mines silica sand from within the state; or (2) transports silica sand into
189.32and stores the sand in the state. The rate of tax imposed is 55 cents per cubic yard of silica
189.33sand mined or stored. The volume includes any material removed from the extraction site
189.34prior to washing. For any person mining silica sand in a county that imposes the aggregate
190.1tax authorized under section 298.75, subdivisions 2 and 3, a credit equal to the amount of
190.2aggregate tax paid to the county is applied against the tax due under this section.
190.3    Subd. 2. Processing tax; rate. (a) A tax is hereby imposed on any person engaged
190.4in washing or processing silica sand within the state. The rate of tax imposed is three
190.5percent of the market value of the silica sand processed. Market value is determined based
190.6on the sale price of the processed silica sand.
190.7(b) Notwithstanding paragraph (a), the rate of tax imposed on a qualified processor
190.8is one percent of the market value of the silica sand processed in the state.
190.9    Subd. 3. Exemption. A person is exempt from the mining tax in subdivision 1 if the
190.10person transports less than ten percent of the finished product on public roads.
190.11    Subd. 4. Report and remittance. Taxes imposed by this section are due and
190.12payable to the commissioner when the fracturing sand return is required to be filed.
190.13Persons mining or processing fracturing sand must file their monthly fracturing sand
190.14reports showing the amount of fracturing sand extracted or processed during the month
190.15reported on a form prescribed by the commissioner. Reports of extraction and processing
190.16fracturing sand and taxes imposed under this section must be filed with the commissioner
190.17on or before the 20th day of the month following the close of the previous calendar month.
190.18    Subd. 5. Proceeds of taxes. Revenue received from taxes under this chapter, as
190.19well as all related penalties, interest, fees, and miscellaneous sources of revenue, must be
190.20deposited by the commissioner in the state treasury and credited as follows:
190.21(1) $2,000,000 in fiscal year 2014, $2,690,000 in fiscal year 2015, and $2,000,000 in
190.22each fiscal year thereafter must be credited to the silica sand mining account in the special
190.23revenue fund under section 116C.992; and
190.24(2) the balance of revenues derived from taxes, penalties, interest, fees, and
190.25miscellaneous sources of income are credited to the general fund.
190.26    Subd. 6. Personal debt. The tax imposed by this section, and interest and penalties
190.27imposed with respect to it, are a personal debt of the person required to file a return from
190.28the time the liability for it arises, irrespective of when the time for payment of the liability
190.29occurs. The debt must, in the case of the executor or administrator of the estate of a
190.30decedent and in the case of a fiduciary, be that of the person in the person's official or
190.31fiduciary capacity only unless the person has voluntarily distributed the assets held in that
190.32capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which
190.33event the person is personally liable for any deficiency.
190.34    Subd. 7. Refunds; appropriation. A person who has, under this chapter, paid
190.35to the commissioner an amount of tax for a period in excess of the amount legally due
190.36for that period, may file with the commissioner a claim for a refund of the excess. The
191.1amount necessary to pay the refunds under this subdivision is appropriated from the
191.2general fund to the commissioner.
191.3EFFECTIVE DATE.This section is effective the day following final enactment

191.4    Sec. 5. [297J.03] REGISTRATION; REPORTING; FILING REQUIREMENTS.
191.5    Subdivision 1. Registration. A person who extracts or processes silica sand within
191.6the state must register with the commissioner, on a form prescribed by the commissioner,
191.7for a silica sand identification number. The commissioner shall issue the applicant a
191.8registration number. A registration number is not assignable and is valid only for the
191.9person in whose name it is issued.
191.10    Subd. 2. Reporting. (a) A person who extracts or processes silica sand in this state
191.11must file a report showing the amount of silica sand extracted or processed monthly on or
191.12before the 20th day of the month following the month in which the silica sand was extracted
191.13or processed. The commissioner may inspect the premises, books, and records, of a person
191.14subject to the silica sand tax during the normal business hours of the person extracting or
191.15processing silica sand. A person violating this section is guilty of a misdemeanor.
191.16    (b) A person shall keep at each place of business complete and accurate records
191.17for that place of business, including records of silica sand extracted or processed in the
191.18state. Scale records, sales records, or any other records of tons of silica sand extracted
191.19or processed in this state, produced or maintained by the person extracting or processing
191.20silica sand, must be retained by the person extracting or processing silica sand in this
191.21state. Books, records, invoices, and other papers and documents required by this section
191.22must be kept for a period of at least 3-1/2 years after the date of the monthly silica sand
191.23report unless the commissioner of revenue authorizes, in writing, their destruction or
191.24disposal at an earlier date.
191.25    Subd. 3. Extensions. If, in the commissioner's judgment, good cause exists, the
191.26commissioner may extend the time for filing reports under this section and silica sand
191.27returns under section 297J.02 and for paying taxes under section 297J.02 for not more
191.28than six months.
191.29EFFECTIVE DATE.This section is effective the day following final enactment.

191.30    Sec. 6. [297J.04] LIMITATIONS ON TIME FOR ASSESSMENT OF TAX.
191.31    Subdivision 1. Assessment. Except as otherwise provided in this chapter, the
191.32amount of taxes assessable must be assessed within 3-1/2 years after the date the return is
191.33filed, whether or not the return is filed on or after the date prescribed. A return must not be
192.1treated as filed until it is in processible form. A return is in processible form if it is filed
192.2on a permitted form and contains sufficient data to identify the taxpayer and permit the
192.3mathematical verification of the tax liability shown on the return. For purposes of this
192.4section, a return filed before the last day prescribed by law for filing is considered to
192.5be filed on the last day.
192.6    Subd. 2. False or fraudulent return. Notwithstanding subdivision 1, the tax may be
192.7assessed at any time if a false or fraudulent return is filed or if a taxpayer fails to file a return.
192.8    Subd. 3. Omission in excess of 25 percent. Additional taxes may be assessed
192.9within 6-1/2 years after the due date of the return or the date the return was filed,
192.10whichever is later, if the taxpayer omits from a return taxes in excess of 25 percent of
192.11the taxes reported in the return.
192.12    Subd. 4. Time limit on refunds. Unless otherwise provided in this chapter, a claim
192.13for a refund of an overpayment of tax must be filed within 3-1/2 years from the date
192.14prescribed for filing the silica sand tax return. Interest on refunds must be computed at
192.15the rate specified in section 270C.405 from the date of payment to the date the refund is
192.16paid or credited. For purposes of this subdivision, the date of payment is the later of the
192.17date the tax was finally due or was paid.
192.18    Subd. 5. Bankruptcy; suspension of time. The time during which a tax must be
192.19assessed or collection proceedings begun is suspended during the period from the date of a
192.20filing of a petition in bankruptcy until 30 days after either: (1) notice to the commissioner
192.21that the bankruptcy proceedings have been closed or dismissed; or (2) the automatic stay
192.22has been ended or has expired, whichever occurs first. The suspension of the statute of
192.23limitations under this subdivision applies to the person the petition in bankruptcy is filed
192.24against, and all other persons who may also be wholly or partially liable for the tax.
192.25    Subd. 6. Extension agreement. If, before the expiration of time prescribed in
192.26subdivisions 1 and 4 for the assessment of tax or the filing of a claim for refund, both the
192.27commissioner and the taxpayer have consented in writing to the assessment or filing of a
192.28claim for refund after that time, the tax may be assessed or the claim for refund filed at any
192.29time before the expiration of the agreed upon period. The period may be extended by later
192.30agreements in writing before the expiration of the period previously agreed upon.
192.31EFFECTIVE DATE.This section is effective the day following final enactment

192.32    Sec. 7. [297J.05] CIVIL PENALTIES.
192.33    Subdivision 1. Penalty for failure to pay tax. If a tax is not paid within the time
192.34specified for payment, a penalty is added to the amount required to be shown as tax. The
192.35penalty is five percent of the unpaid tax if the failure is for not more than 30 days, with
193.1an additional penalty of five percent of the amount of tax remaining unpaid during each
193.2additional 30 days or fraction of 30 days during which the failure continues, not exceeding
193.315 percent in the aggregate. For purposes of this subdivision, if the taxpayer has not filed
193.4a return, the time specified for payment is the final date a return should have been filed.
193.5    Subd. 2. Penalty for failure to make and file return. If a taxpayer fails to make
193.6and file a return within the time prescribed or an extension, a penalty is added to the tax.
193.7The penalty is five percent of the amount of tax not paid on or before the date prescribed
193.8for payment of the tax.
193.9    Subd. 3. Penalty for intentional disregard of law or rules. If part of an additional
193.10assessment is due to negligence or intentional disregard of the provisions of this chapter or
193.11rules of the commissioner of revenue (but without intent to defraud), there is added to the
193.12tax an amount equal to ten percent of the additional assessment.
193.13    Subd. 4. Penalty for false or fraudulent return; evasion. If a person files a false
193.14or fraudulent return, or attempts in any manner to evade or defeat a tax or payment of
193.15tax, there is imposed on the person a penalty equal to 50 percent of the tax found due
193.16for the period to which the return related, less amounts paid by the person on the basis
193.17of the false or fraudulent return.
193.18    Subd. 5. Penalty for repeated failures to file returns or pay taxes. If there is a
193.19pattern by a person of repeated failures to timely file returns or timely pay taxes, and
193.20written notice is given that a penalty will be imposed if such failures continue, a penalty
193.21of 25 percent of the amount of tax not timely paid as a result of each such subsequent
193.22failure is added to the tax. The penalty can be abated under the abatement authority in
193.23section 270C.34.
193.24    Subd. 6. Payment of penalties. The penalties imposed by this section must be
193.25collected and paid in the same manner as taxes. These penalties are in addition to criminal
193.26penalties imposed by this chapter.
193.27EFFECTIVE DATE.This section is effective the day following final enactment.

193.28    Sec. 8. [297J.07] INTEREST.
193.29    Subdivision 1. Rate. If an interest assessment is required under this section, interest
193.30is computed at the rate specified in section 270C.40.
193.31    Subd. 2. Late payment. If a tax is not paid within the time specified by law for
193.32payment, the unpaid tax bears interest from the date the tax should have been paid until
193.33the date the tax is paid.
194.1    Subd. 3. Extensions. If an extension of time for payment has been granted, interest
194.2must be paid from the date the payment should have been made if no extension had been
194.3granted, until the date the tax is paid.
194.4    Subd. 4. Additional assessments. If a taxpayer is liable for additional taxes because
194.5of a redetermination by the commissioner, or for any other reason, the additional taxes
194.6bear interest from the time the tax should have been paid, without regard to any extension
194.7allowed, until the date the tax is paid.
194.8    Subd. 5. Erroneous refunds. In the case of an erroneous refund, interest accrues
194.9from the date the refund was paid unless the erroneous refund results from a mistake of
194.10the department, then no interest or penalty is imposed unless the deficiency assessment is
194.11not satisfied within 60 days of the order.
194.12    Subd. 6. Interest on judgments. Notwithstanding section 549.09, if judgment is
194.13entered in favor of the commissioner with regard to any tax, the judgment bears interest
194.14at the rate specified in section 270C.40 from the date the judgment is entered until the
194.15date of payment.
194.16    Subd. 7. Interest on penalties. A penalty imposed under section 297J.05,
194.17subdivision 1, 2, 3, 4, or 5, bears interest from the date the return or payment was required
194.18to be filed or paid, including any extensions, to the date of payment of the penalty.
194.19EFFECTIVE DATE.This section is effective the day following final enactment.

194.20    Sec. 9. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
194.21    Subd. 3. Occupation tax; other ores. Every person engaged in the business of
194.22mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
194.23taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
194.24in this subdivision. For purposes of this subdivision, mining includes the application
194.25of hydrometallurgical processes. The tax is determined in the same manner as the tax
194.26imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17,
194.27subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must be
194.28computed by applying to taxable income the rate of 2.45 percent equal to one-half of
194.29the rate that applies under section 290.06, subdivision 1, for the taxable year. A person
194.30subject to occupation tax under this section shall apportion its net income on the basis of
194.31the percentage obtained by taking the sum of:
194.32(1) 75 percent of the percentage which the sales made within this state in connection
194.33with the trade or business during the tax period are of the total sales wherever made in
194.34connection with the trade or business during the tax period;
195.1(2) 12.5 percent of the percentage which the total tangible property used by the
195.2taxpayer in this state in connection with the trade or business during the tax period is of
195.3the total tangible property, wherever located, used by the taxpayer in connection with the
195.4trade or business during the tax period; and
195.5(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
195.6in this state or paid in respect to labor performed in this state in connection with the trade
195.7or business during the tax period are of the taxpayer's total payrolls paid or incurred in
195.8connection with the trade or business during the tax period.
195.9The tax is in addition to all other taxes.
195.10EFFECTIVE DATE.This section is effective the day following final enactment.

195.11    Sec. 10. Minnesota Statutes 2012, section 298.01, subdivision 4, is amended to read:
195.12    Subd. 4. Occupation tax; iron ore; taconite concentrates. A person engaged in
195.13the business of mining or producing of iron ore, taconite concentrates or direct reduced ore
195.14in this state shall pay an occupation tax to the state of Minnesota. The tax is determined
195.15in the same manner as the tax imposed by section 290.02, except that sections 290.05,
195.16subdivision 1 , clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not apply,
195.17and the occupation tax shall be computed by applying to taxable income the rate of 2.45
195.18 percent equal to one-half of the rate that applies under section 290.06, subdivision 1, for
195.19the taxable year. A person subject to occupation tax under this section shall apportion its
195.20net income on the basis of the percentage obtained by taking the sum of:
195.21(1) 75 percent of the percentage which the sales made within this state in connection
195.22with the trade or business during the tax period are of the total sales wherever made in
195.23connection with the trade or business during the tax period;
195.24(2) 12.5 percent of the percentage which the total tangible property used by the
195.25taxpayer in this state in connection with the trade or business during the tax period is of
195.26the total tangible property, wherever located, used by the taxpayer in connection with the
195.27trade or business during the tax period; and
195.28(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
195.29in this state or paid in respect to labor performed in this state in connection with the trade
195.30or business during the tax period are of the taxpayer's total payrolls paid or incurred in
195.31connection with the trade or business during the tax period.
195.32The tax is in addition to all other taxes.
195.33EFFECTIVE DATE.This section is effective for taxable years beginning after
195.34December 31, 2012.

196.1    Sec. 11. Minnesota Statutes 2012, section 298.227, as amended by Laws 2013, chapter
196.23, section 17, is amended to read:
196.3298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
196.4    (a) An amount equal to that distributed pursuant to each taconite producer's taxable
196.5production and qualifying sales under section 298.28, subdivision 9a, shall be held by
196.6the Iron Range Resources and Rehabilitation Board in a separate taconite economic
196.7development fund for each taconite and direct reduced ore producer. Money from the
196.8fund for each producer shall be released by the commissioner after review by a joint
196.9committee consisting of an equal number of representatives of the salaried employees and
196.10the nonsalaried production and maintenance employees of that producer. The District 11
196.11director of the United States Steelworkers of America, on advice of each local employee
196.12president, shall select the employee members. In nonorganized operations, the employee
196.13committee shall be elected by the nonsalaried production and maintenance employees. The
196.14review must be completed no later than six months after the producer presents a proposal
196.15for expenditure of the funds to the committee. The funds held pursuant to this section may
196.16be released only for workforce development and associated public facility improvement,
196.17or for acquisition of plant and stationary mining equipment and facilities for the producer
196.18or for research and development in Minnesota on new mining, or taconite, iron, or steel
196.19production technology, but only if the producer provides a matching expenditure equal to
196.20the amount of the distribution to be used for the same purpose of at least 50 percent of
196.21the distribution based on 14.7 cents per ton beginning with distributions in 2002 2014.
196.22Effective for proposals for expenditures of money from the fund beginning May 26, 2007,
196.23the commissioner may not release the funds before the next scheduled meeting of the
196.24board. If a proposed expenditure is not approved by the board, the funds must be deposited
196.25in the Taconite Environmental Protection Fund under sections 298.222 to 298.225. If a
196.26producer uses money which has been released from the fund prior to May 26, 2007 to
196.27procure haulage trucks, mobile equipment, or mining shovels, and the producer removes
196.28the piece of equipment from the taconite tax relief area defined in section 273.134 within
196.29ten years from the date of receipt of the money from the fund, a portion of the money
196.30granted from the fund must be repaid to the taconite economic development fund. The
196.31portion of the money to be repaid is 100 percent of the grant if the equipment is removed
196.32from the taconite tax relief area within 12 months after receipt of the money from the fund,
196.33declining by ten percent for each of the subsequent nine years during which the equipment
196.34remains within the taconite tax relief area. If a taconite production facility is sold after
196.35operations at the facility had ceased, any money remaining in the fund for the former
196.36producer may be released to the purchaser of the facility on the terms otherwise applicable
197.1to the former producer under this section. If a producer fails to provide matching funds
197.2for a proposed expenditure within six months after the commissioner approves release
197.3of the funds, the funds are available for release to another producer in proportion to the
197.4distribution provided and under the conditions of this section. Any portion of the fund
197.5which is not released by the commissioner within one year of its deposit in the fund shall
197.6be divided between the taconite environmental protection fund created in section 298.223
197.7and the Douglas J. Johnson economic protection trust fund created in section 298.292 for
197.8placement in their respective special accounts. Two-thirds of the unreleased funds shall be
197.9distributed to the taconite environmental protection fund and one-third to the Douglas J.
197.10Johnson economic protection trust fund.
197.11    (b)(i) Notwithstanding the requirements of paragraph (a), setting the amount of
197.12distributions and the review process, an amount equal to ten cents per taxable ton of
197.13production in 2007, for distribution in 2008 only, that would otherwise be distributed
197.14under paragraph (a), may be used for a loan or grant for the cost of providing for a
197.15value-added wood product facility located in the taconite tax relief area and in a county
197.16that contains a city of the first class. This amount must be deducted from the distribution
197.17under paragraph (a) for which a matching expenditure by the producer is not required. The
197.18granting of the loan or grant is subject to approval by the board. If the money is provided
197.19as a loan, interest must be payable on the loan at the rate prescribed in section 298.2213,
197.20subdivision 3 . (ii) Repayments of the loan and interest, if any, must be deposited in the
197.21taconite environment protection fund under sections 298.222 to 298.225. If a loan or
197.22grant is not made under this paragraph by July 1, 2012, the amount that had been made
197.23available for the loan under this paragraph must be transferred to the taconite environment
197.24protection fund under sections 298.222 to 298.225. (iii) Money distributed in 2008 to the
197.25fund established under this section that exceeds ten cents per ton is available to qualifying
197.26producers under paragraph (a) on a pro rata basis.
197.27(c) Repayment or transfer of money to the taconite environmental protection fund
197.28under paragraph (b), item (ii), must be allocated by the Iron Range Resources and
197.29Rehabilitation Board for public works projects in house legislative districts in the same
197.30proportion as taxable tonnage of production in 2007 in each house legislative district, for
197.31distribution in 2008, bears to total taxable tonnage of production in 2007, for distribution
197.32in 2008. Notwithstanding any other law to the contrary, expenditures under this paragraph
197.33do not require approval by the governor. For purposes of this paragraph, "house legislative
197.34districts" means the legislative districts in existence on May 15, 2009.
197.35EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

198.1    Sec. 12. Minnesota Statutes 2012, section 298.24, subdivision 1, is amended to read:
198.2    Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002,
198.3and 2003 2013, there is imposed upon taconite and iron sulphides, and upon the mining
198.4and quarrying thereof, and upon the production of iron ore concentrate therefrom, and
198.5upon the concentrate so produced, a tax of $2.103 $2.56 per gross ton of merchantable
198.6iron ore concentrate produced therefrom. For concentrates produced in 2005, the tax rate
198.7is the same rate imposed for concentrates produced in 2004. For concentrates produced in
198.82009 and subsequent years, The tax is also imposed upon other iron-bearing material.
198.9    (b) For concentrates produced in 2006 2014 and subsequent years, the tax rate shall
198.10be equal to the preceding year's tax rate plus an amount equal to the preceding year's tax
198.11rate multiplied by the percentage increase in the implicit price deflator from the fourth
198.12quarter of the second preceding year to the fourth quarter of the preceding year. "Implicit
198.13price deflator" means the implicit price deflator for the gross domestic product prepared by
198.14the Bureau of Economic Analysis of the United States Department of Commerce.
198.15    (c) An additional tax is imposed equal to three cents per gross ton of merchantable
198.16iron ore concentrate for each one percent that the iron content of the product exceeds 72
198.17percent, when dried at 212 degrees Fahrenheit.
198.18    (d) The tax on taconite and iron sulphides shall be imposed on the average of the
198.19production for the current year and the previous two years. The rate of the tax imposed
198.20will be the current year's tax rate. This clause shall not apply in the case of the closing
198.21of a taconite facility if the property taxes on the facility would be higher if this clause
198.22and section 298.25 were not applicable. The tax on other iron-bearing material shall be
198.23imposed on the current year production.
198.24    (e) If the tax or any part of the tax imposed by this subdivision is held to be
198.25unconstitutional, a tax of $2.103 $2.56 per gross ton of merchantable iron ore concentrate
198.26produced shall be imposed.
198.27    (f) Consistent with the intent of this subdivision to impose a tax based upon the
198.28weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
198.29determine the weight of merchantable iron ore concentrate included in fluxed pellets by
198.30subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
198.31flux additives included in the pellets from the weight of the pellets. For purposes of this
198.32paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
198.33olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
198.34No subtraction from the weight of the pellets shall be allowed for binders, mineral and
198.35chemical additives other than basic flux additives, or moisture.
199.1    (g)(1) Notwithstanding any other provision of this subdivision, for the first two years
199.2of a plant's commercial production of direct reduced ore from ore mined in this state, no
199.3tax is imposed under this section. As used in this paragraph, "commercial production" is
199.4production of more than 50,000 tons of direct reduced ore in the current year or in any prior
199.5year, "noncommercial production" is production of 50,000 tons or less of direct reduced ore
199.6in any year, and "direct reduced ore" is ore that results in a product that has an iron content
199.7of at least 75 percent. For the third year of a plant's commercial production of direct
199.8reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate otherwise
199.9determined under this subdivision. For the fourth commercial production year, the rate is
199.1050 percent of the rate otherwise determined under this subdivision; for the fifth commercial
199.11production year, the rate is 75 percent of the rate otherwise determined under this
199.12subdivision; and for all subsequent commercial production years, the full rate is imposed.
199.13    (2) Subject to clause (1), production of direct reduced ore in this state is subject to
199.14the tax imposed by this section, but if that production is not produced by a producer of
199.15taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron
199.16sulfides, or other iron-bearing material, that is consumed in the production of direct
199.17reduced iron in this state is not subject to the tax imposed by this section on taconite,
199.18iron sulfides, or other iron-bearing material.
199.19    (3) Notwithstanding any other provision of this subdivision, no tax is imposed
199.20on direct reduced ore under this section during the facility's noncommercial production
199.21of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
199.22production of direct reduced ore is subject to the tax imposed by this section on taconite
199.23and iron sulphides. Three-year average production of direct reduced ore does not
199.24include production of direct reduced ore in any noncommercial year. Three-year average
199.25production for a direct reduced ore facility that has noncommercial production is the
199.26average of the commercial production of direct reduced ore for the current year and the
199.27previous two commercial years.
199.28    (4) This paragraph applies only to plants for which all environmental permits have
199.29been obtained and construction has begun before July 1, 2008.
199.30EFFECTIVE DATE.This section is effective beginning for the 2013 production
199.31year.

199.32    Sec. 13. Minnesota Statutes 2012, section 298.28, subdivision 4, is amended to read:
199.33    Subd. 4. School districts. (a) 23.15 32.15 cents per taxable ton, plus the increase
199.34provided in paragraph (d), less the amount that would have been computed under
199.35Minnesota Statutes 2008, section 126C.21, subdivision 4, for the current year for that
200.1district, must be allocated to qualifying school districts to be distributed, based upon the
200.2certification of the commissioner of revenue, under paragraphs (b), (c), and (f).
200.3    (b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which
200.4the lands from which taconite was mined or quarried were located or within which the
200.5concentrate was produced. The distribution must be based on the apportionment formula
200.6prescribed in subdivision 2.
200.7    (ii) Four cents per taxable ton from each taconite facility must be distributed to
200.8each affected school district for deposit in a fund dedicated to building maintenance
200.9and repairs, as follows:
200.10    (1) proceeds from Keewatin Taconite or its successor are distributed to Independent
200.11School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
200.12districts;
200.13    (2) proceeds from the Hibbing Taconite Company or its successor are distributed to
200.14Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
200.15districts;
200.16    (3) proceeds from the Mittal Steel Company and Minntac or their successors are
200.17distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
200.182711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
200.19    (4) proceeds from the Northshore Mining Company or its successor are distributed
200.20to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
200.21or their successor districts; and
200.22    (5) proceeds from United Taconite or its successor are distributed to Independent
200.23School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
200.24successor districts.
200.25    Revenues that are required to be distributed to more than one district shall be
200.26apportioned according to the number of pupil units identified in section 126C.05,
200.27subdivision 1 , enrolled in the second previous year.
200.28    (c)(i) 15.72 24.72 cents per taxable ton, less any amount distributed under paragraph
200.29(e), shall be distributed to a group of school districts comprised of those school districts
200.30which qualify as a tax relief area under section 273.134, paragraph (b), or in which there is
200.31a qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
200.32to school district indexes as follows: for each school district, its pupil units determined
200.33under section 126C.05 for the prior school year shall be multiplied by the ratio of the
200.34average adjusted net tax capacity per pupil unit for school districts receiving aid under
200.35this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
200.36ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
201.1Each district shall receive that portion of the distribution which its index bears to the sum
201.2of the indices for all school districts that receive the distributions.
201.3    (ii) Notwithstanding clause (i), each school district that receives a distribution
201.4under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
201.5clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
201.6severed mineral values after reduction for any portion distributed to cities and towns
201.7under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its
201.8levy reduction under section 126C.48, subdivision 8, for the second year prior to the
201.9year of the distribution shall receive a distribution equal to the difference; the amount
201.10necessary to make this payment shall be derived from proportionate reductions in the
201.11initial distribution to other school districts under clause (i). If there are insufficient tax
201.12proceeds to make the distribution provided under this paragraph in any year, money must
201.13be transferred from the taconite property tax relief account in subdivision 6, to the extent
201.14of the shortfall in the distribution.
201.15    (d)(1) Any school district described in paragraph (c) where a levy increase pursuant
201.16to section 126C.17, subdivision 9, was authorized by referendum for taxes payable in
201.172001, shall receive a distribution of 21.3 cents per ton. Each district shall receive $175
201.18times the pupil units identified in section 126C.05, subdivision 1, enrolled in the second
201.19previous year or the 1983-1984 school year, whichever is greater, less the product of 1.8
201.20percent times the district's taxable net tax capacity in the second previous year 2011.
201.21(2) Districts qualifying under paragraph (c) must receive additional taconite aid each
201.22year equal to 22.5 percent of the amount obtained by subtracting:
201.23(i) 1.8 percent of the district's net tax capacity for 2011, from:
201.24(ii) the district's weighted average daily membership for fiscal year 2012 multiplied
201.25by the sum of:
201.26(A) $415, plus
201.27(B) the district's referendum revenue allowance for fiscal year 2013.
201.28    If the total amount provided by paragraph (d) is insufficient to make the payments
201.29herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
201.30so as not to exceed the funds available. Any amounts received by a qualifying school
201.31district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
201.32education aid which the district receives pursuant to section 126C.13 or the permissible
201.33levies of the district. Any amount remaining after the payments provided in this paragraph
201.34shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
201.35deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
201.36economic protection trust fund as provided in subdivision 11.
202.1    Each district receiving money according to this paragraph shall reserve the lesser of
202.2the amount received under this paragraph or $25 times the number of pupil units served
202.3in the district. It may use the money for early childhood programs or for outcome-based
202.4learning programs that enhance the academic quality of the district's curriculum. The
202.5outcome-based learning programs must be approved by the commissioner of education.
202.6    (e) There shall be distributed to any school district the amount which the school
202.7district was entitled to receive under section 298.32 in 1975.
202.8    (f) Four cents per taxable ton must be distributed to qualifying school districts
202.9according to the distribution specified in paragraph (b), clause (ii), and two 11 cents
202.10per taxable ton must be distributed according to the distribution specified in paragraph
202.11(c). These amounts are not subject to sections 126C.21, subdivision 4, and 126C.48,
202.12subdivision 8 .
202.13EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

202.14    Sec. 14. Minnesota Statutes 2012, section 298.28, subdivision 6, is amended to read:
202.15    Subd. 6. Property tax relief. (a) In 2002 2014 and thereafter, 33.9 34.8 cents per
202.16taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or
202.17section 298.2961, subdivision 5, must be allocated to St. Louis County acting as the
202.18counties' fiscal agent, to be distributed as provided in sections 273.134 to 273.136.
202.19    (b) If an electric power plant owned by and providing the primary source of power
202.20for a taxpayer mining and concentrating taconite is located in a county other than the
202.21county in which the mining and the concentrating processes are conducted, .1875 cent per
202.22taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.
202.23    (c) If an electric power plant owned by and providing the primary source of power
202.24for a taxpayer mining and concentrating taconite is located in a school district other than
202.25a school district in which the mining and concentrating processes are conducted, .4541
202.26cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to
202.27the school district.
202.28EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

202.29    Sec. 15. Minnesota Statutes 2012, section 298.28, subdivision 10, is amended to read:
202.30    Subd. 10. Increase. (a) Except as provided in paragraph (b), beginning with
202.31distributions in 2000, the amount determined under subdivision 9 shall be increased in the
202.32same proportion as the increase in the implicit price deflator as provided in section 298.24,
202.33subdivision 1 . Beginning with distributions in 2003 2015, the amount determined under
203.1subdivision 6, paragraph (a), shall be increased in the same proportion as the increase in
203.2the implicit price deflator as provided in section 298.24, subdivision 1.
203.3(b) For distributions in 2005 and subsequent years, an amount equal to the increased
203.4tax proceeds attributable to the increase in the implicit price deflator as provided in
203.5section 298.24, subdivision 1, for taxes paid in 2005, except for the amount of revenue
203.6increases provided in subdivision 4, paragraph (d), is distributed to the grant and loan fund
203.7established in section 298.2961, subdivision 4.
203.8EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

203.9    Sec. 16. Minnesota Statutes 2012, section 298.75, subdivision 2, is amended to read:
203.10    Subd. 2. Tax imposed. (a) Except as provided in paragraph (e), a county that
203.11imposes the aggregate production tax shall impose upon every operator a production tax
203.12of 21.5 cents per cubic yard or 15 cents per ton of aggregate material excavated in the
203.13county except that the county board may decide not to impose this tax if it determines
203.14that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
203.15aggregate material from that county. A county board may authorize an additional tax on
203.16aggregate material excavated in the county of up to 43 cents per cubic yard or 30 cents
203.17per ton of aggregate material excavated in the county. The tax shall not be imposed on
203.18aggregate material excavated in the county until the aggregate material is transported from
203.19the extraction site or sold, whichever occurs first. When aggregate material is stored in a
203.20stockpile within the state of Minnesota and a public highway, road or street is not used
203.21for transporting the aggregate material, the tax shall not be imposed until either when the
203.22aggregate material is sold, or when it is transported from the stockpile site, or when it is
203.23used from the stockpile, whichever occurs first.
203.24    (b) Except as provided in paragraph (e), a county that imposes the aggregate
203.25production tax under paragraph (a) shall impose upon every importer a production tax
203.26of 21.5 cents per cubic yard or 15 cents per ton of aggregate material imported into the
203.27county. A county board may authorize an additional tax on every importer of up to 43
203.28cents per cubic yard or 30 cents per ton of aggregate material imported into the county.
203.29 The tax shall be imposed when the aggregate material is imported from the extraction site
203.30or sold. When imported aggregate material is stored in a stockpile within the state of
203.31Minnesota and a public highway, road, or street is not used for transporting the aggregate
203.32material, the tax shall be imposed either when the aggregate material is sold, when it is
203.33transported from the stockpile site, or when it is used from the stockpile, whichever occurs
203.34first. The tax shall be imposed on an importer when the aggregate material is imported
203.35into the county that imposes the tax.
204.1    (c) If the aggregate material is transported directly from the extraction site to a
204.2waterway, railway, or another mode of transportation other than a highway, road or street,
204.3the tax imposed by this section shall be apportioned equally between the county where the
204.4aggregate material is extracted and the county to which the aggregate material is originally
204.5transported. If that destination is not located in Minnesota, then the county where the
204.6aggregate material was extracted shall receive all of the proceeds of the tax.
204.7    (d) A county, city, or town that receives revenue under this section is prohibited
204.8from imposing any additional host community fees on aggregate production within that
204.9county, city, or town.
204.10    (e) A county that borders two other states and that is not contiguous to a county
204.11that imposes a tax under this section may impose the taxes under paragraphs (a) and (b)
204.12at the rate of ten cents per cubic yard or seven cents per ton. This paragraph expires
204.13December 31, 2014.
204.14EFFECTIVE DATE.This section is effective the day following final enactment.

204.15    Sec. 17. 2013 DISTRIBUTION ONLY.
204.16For the 2013 distribution, a special fund is established to receive $4,700,000 of the
204.17amount that otherwise would be distributed under Minnesota Statutes, section 298.28,
204.18subdivision 6, and this amount must be paid as follows:
204.19(1) $2,000,000 to the city of Hibbing for improvements to the city's water supply
204.20system;
204.21(2) $1,700,000 to the city of Mountain Iron for the cost of moving utilities required
204.22as a result of actions undertaken by United States Steel Corporation; and
204.23(3) $1,000,000 to the city of Tower for improvements to a marina.
204.24EFFECTIVE DATE.This section is effective for the 2013 distribution, all of which
204.25must be made in the August 2013 payment.

204.26    Sec. 18. IRON RANGE RESOURCES AND REHABILITATION
204.27COMMISSIONER; BONDS AUTHORIZED.
204.28    Subdivision 1. Issuance; purpose. Notwithstanding any provision of Minnesota
204.29Statutes, chapter 298, to the contrary, the commissioner of Iron Range resources and
204.30rehabilitation may issue revenue bonds in a principal amount of $38,000,000 in one or more
204.31series, and bonds to refund those bonds. The proceeds of the bonds must be used to make
204.32grants to school districts located in the taconite tax relief area defined in Minnesota Statutes,
204.33section 273.134, or the taconite assistance area defined in Minnesota Statutes, section
205.1273.1341, to be used by the school districts to pay for building projects, such as energy
205.2efficiency, technology, infrastructure, health, safety, and maintenance improvements.
205.3    Subd. 2. Appropriation. (a) There is annually appropriated from the distribution of
205.4taconite production tax revenues under Minnesota Statues, section 298.28, prior to the
205.5calculation of the amount of the remainder under Minnesota Statutes, section 298.28,
205.6subdivision 11, an amount sufficient to pay when due the principal and interest on the
205.7bonds issued pursuant to subdivision 1. The appropriation under this section must not
205.8exceed an amount equal to ten cents per taxable ton.
205.9    (b) If in any year the amount available under paragraph (a) is insufficient to pay
205.10principal and interest due on the bonds in that year, an additional amount is appropriated
205.11from the Douglas J. Johnson fund to make up the deficiency.
205.12    (c) The appropriation under this subdivision terminates upon payment or maturity of
205.13the last of the bonds issued under this section.
205.14    Subd. 3. Credit enhancement. The bonds issued under this section are "debt
205.15obligations" and the commissioner of Iron Range resources and rehabilitation is a "district"
205.16for purposes of Minnesota Statutes, section 126C.55, provided that advances made under
205.17Minnesota Statutes, section 126C.55, subdivision 2, are not subject to Minnesota Statutes,
205.18section 126C.55, subdivisions 4 to 7.
205.19EFFECTIVE DATE.This section is effective the day following final enactment and
205.20applies beginning with the 2014 distribution under Minnesota Statutes, section 298.28.


205.23    Section 1. Minnesota Statutes 2012, section 118A.04, subdivision 3, is amended to read:
205.24    Subd. 3. State and local securities. Funds may be invested in the following:
205.25(1) any security which is a general obligation of any state or local government with
205.26taxing powers which is rated "A" or better by a national bond rating service;
205.27(2) any security which is a revenue obligation of any state or local government with
205.28taxing powers which is rated "AA" or better by a national bond rating service; and
205.29(3) a general obligation of the Minnesota housing finance agency which is a moral
205.30obligation of the state of Minnesota and is rated "A" or better by a national bond rating
205.31agency.; and
205.32(4) any security which is an obligation of a school district with an original maturity
205.33not exceeding 13 months and (i) rated in the highest category by a national bond rating
205.34service or (ii) enrolled in the credit enhancement program pursuant to section 126C.55.

206.1    Sec. 2. Minnesota Statutes 2012, section 118A.05, subdivision 5, is amended to read:
206.2    Subd. 5. Guaranteed investment contracts. Agreements or contracts for
206.3guaranteed investment contracts may be entered into if they are issued or guaranteed
206.4by United States commercial banks, domestic branches of foreign banks, United States
206.5insurance companies, or their Canadian subsidiaries, or the domestic affiliates of any
206.6of the foregoing. The credit quality of the issuer's or guarantor's short- and long-term
206.7unsecured debt must be rated in one of the two highest categories by a nationally
206.8recognized rating agency. Agreements or contracts for guaranteed investment contracts
206.9with a term of 18 months or less may be entered into regardless of the credit quality of
206.10the issuer's or guarantor's long-term unsecured debt, provided that the credit quality of
206.11the issuer's short-term unsecured debt is rated in the highest category by a nationally
206.12recognized rating agency. Should the issuer's or guarantor's credit quality be downgraded
206.13below "A", the government entity must have withdrawal rights.

206.14    Sec. 3. Minnesota Statutes 2012, section 216C.436, subdivision 7, is amended to read:
206.15    Subd. 7. Repayment. An implementing entity that finances an energy improvement
206.16under this section must:
206.17(1) secure payment with a lien against the benefited qualifying real property; and
206.18(2) collect repayments as a special assessment as provided for in section 429.101
206.19or by charter, provided that special assessments may be made payable in up to 20 equal
206.20annual installments.
206.21If the implementing entity is an authority, the local government that authorized
206.22the authority to act as implementing entity shall impose and collect special assessments
206.23necessary to pay debt service on bonds issued by the implementing entity under subdivision
206.248, and shall transfer all collections of the assessments upon receipt to the authority.

206.25    Sec. 4. Minnesota Statutes 2012, section 373.01, subdivision 3, is amended to read:
206.26    Subd. 3. Capital notes. (a) A county board may, by resolution and without
206.27referendum, issue capital notes subject to the county debt limit to purchase capital
206.28equipment useful for county purposes that has an expected useful life at least equal to the
206.29term of the notes. The notes shall be payable in not more than ten years and shall be
206.30issued on terms and in a manner the board determines. A tax levy shall be made for
206.31payment of the principal and interest on the notes, in accordance with section 475.61,
206.32as in the case of bonds.
206.33    (b) For purposes of this subdivision, "capital equipment" means:
207.1    (1) public safety, ambulance, road construction or maintenance, and medical
207.2equipment; and
207.3    (2) computer hardware and software, without regard to its expected useful life,
207.4whether bundled with machinery or equipment or unbundled., together with application
207.5development services and training related to the use of the computer hardware or software.

207.6    Sec. 5. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read:
207.7    Subdivision 1. Definitions. For purposes of this section, the following terms have
207.8the meanings given.
207.9(a) "Bonds" means an obligation as defined under section 475.51.
207.10(b) "Capital improvement" means acquisition or betterment of public lands,
207.11buildings, or other improvements within the county for the purpose of a county courthouse,
207.12administrative building, health or social service facility, correctional facility, jail, law
207.13enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads
207.14and bridges, public works facilities, fairground buildings, and records and data storage
207.15facilities, and the acquisition of development rights in the form of conservation easements
207.16under chapter 84C. An improvement must have an expected useful life of five years or more
207.17to qualify. "Capital improvement" does not include a recreation or sports facility building
207.18(such as, but not limited to, a gymnasium, ice arena, racquet sports facility, swimming
207.19pool, exercise room or health spa), unless the building is part of an outdoor park facility
207.20and is incidental to the primary purpose of outdoor recreation. For purposes of this section,
207.21"capital improvement" includes expenditures for purposes described in this paragraph that
207.22have been incurred by a county before approval of a capital improvement plan, if such
207.23expenditures are included in a capital improvement plan approved on or before the date of
207.24the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
207.25(c) "Metropolitan county" means a county located in the seven-county metropolitan
207.26area as defined in section 473.121 or a county with a population of 90,000 or more.
207.27(d) "Population" means the population established by the most recent of the
207.28following (determined as of the date the resolution authorizing the bonds was adopted):
207.29(1) the federal decennial census,
207.30(2) a special census conducted under contract by the United States Bureau of the
207.31Census, or
207.32(3) a population estimate made either by the Metropolitan Council or by the state
207.33demographer under section 4A.02.
207.34(e) "Qualified indoor ice arena" means a facility that meets the requirements of
207.35section 373.43.
208.1(f) "Tax capacity" means total taxable market value, but does not include captured
208.2market value.

208.3    Sec. 6. Minnesota Statutes 2012, section 373.40, subdivision 2, is amended to read:
208.4    Subd. 2. Application of election requirement. (a) Bonds issued by a county
208.5to finance capital improvements under an approved capital improvement plan are not
208.6subject to the election requirements of section 375.18 or 475.58. The bonds must be
208.7approved by vote of at least three-fifths of the members of the county board. In the case
208.8of a metropolitan county, the bonds must be approved by vote of at least two-thirds of
208.9the members of the county board.
208.10(b) Before issuance of bonds qualifying under this section, the county must publish
208.11a notice of its intention to issue the bonds and the date and time of a hearing to obtain
208.12public comment on the matter. The notice must be published in the official newspaper
208.13of the county or in a newspaper of general circulation in the county. The notice must be
208.14published at least 14, but not more than 28, days before the date of the hearing.
208.15(c) A county may issue the bonds only upon obtaining the approval of a majority of
208.16the voters voting on the question of issuing the obligations, if a petition requesting a vote
208.17on the issuance is signed by voters equal to five percent of the votes cast in the county in
208.18the last county general election and is filed with the county auditor within 30 days after
208.19the public hearing. The commissioner of revenue shall prepare a suggested form of the
208.20question to be presented at the election. If the county elects not to submit the question to
208.21the voters, the county shall not propose the issuance of bonds under this section for the
208.22same purpose and in the same amount for a period of 365 days from the date of receipt
208.23of the petition. If the question of issuing the bonds is submitted and not approved by the
208.24voters, the provisions of section 475.58, subdivision 1a, shall apply.

208.25    Sec. 7. Minnesota Statutes 2012, section 383D.41, is amended by adding a subdivision
208.26to read:
208.27    Subd. 10. Housing improvement areas. (a) The Dakota County Community
208.28Development Agency has all powers of a city, in addition to its existing powers as an
208.29implementing entity, under sections 428A.11 to 428A.21, in connection with housing
208.30improvement areas in Dakota County. For purposes of the Dakota County Community
208.31Development Agency's exercise of those powers the provisions of this subdivision apply.
208.32(b) References in sections 428A.11 to 428A.21 to:
208.33(1) a "mayor" are references to the executive director of the Dakota County
208.34Community Development Agency;
209.1(2) a "council" are references to the board of commissioners of the Dakota County
209.2Community Development Agency; and
209.3(3) a "city clerk" are references to an official of the Dakota County Community
209.4Development Agency designated from time to time by the executive director of the Dakota
209.5County Community Development Agency.
209.6(c) Notwithstanding section 428A.11, subdivision 3, and 428A.13, subdivision 1,
209.7the governing body of the Dakota County Community Development Agency may adopt
209.8a resolution, rather than an ordinance, establishing one or more housing improvement
209.9areas, and "enabling ordinance" means a resolution so adopted for purposes of sections
209.10428A.11 to 428A.21.
209.11(d) As long as the governing body of the Dakota County Community Development
209.12Agency and the Dakota County Board of Commissioners consists of identical membership,
209.13the Dakota County Community Development Agency may pledge the full faith, credit and
209.14taxing power of Dakota County to obligations issued by the Dakota County Community
209.15Development Agency under section 428A.16.
209.16(e) Notwithstanding the provisions of section 428A.21, the establishment by the
209.17Dakota County Community Development Agency of a new housing improvement area
209.18after June 30, 2016, requires enactment of a special law authorizing establishment of the
209.19area. Any extensions of the deadline for housing improvement districts under general law
209.20beyond that date or repeal of the deadline also applies to housing improvement areas
209.21established by the Dakota County Community Development Agency.

209.22    Sec. 8. Minnesota Statutes 2012, section 410.32, is amended to read:
209.23410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
209.24    (a) Notwithstanding any contrary provision of other law or charter, a home rule
209.25charter city may, by resolution and without public referendum, issue capital notes subject
209.26to the city debt limit to purchase capital equipment.
209.27    (b) For purposes of this section, "capital equipment" means:
209.28    (1) public safety equipment, ambulance and other medical equipment, road
209.29construction and maintenance equipment, and other capital equipment; and
209.30    (2) computer hardware and software, without regard to its expected useful life,
209.31 whether bundled with machinery or equipment or unbundled., together with application
209.32development services and training related to the use of the computer hardware and software.
209.33    (c) The equipment or software must have an expected useful life at least as long
209.34as the term of the notes.
210.1    (d) The notes shall be payable in not more than ten years and be issued on terms and
210.2in the manner the city determines. The total principal amount of the capital notes issued
210.3in a fiscal year shall not exceed 0.03 percent of the market value of taxable property
210.4in the city for that year.
210.5    (e) A tax levy shall be made for the payment of the principal and interest on the
210.6notes, in accordance with section 475.61, as in the case of bonds.
210.7    (f) Notes issued under this section shall require an affirmative vote of two-thirds of
210.8the governing body of the city.
210.9    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
210.10city may also issue capital notes subject to its debt limit in the manner and subject to the
210.11limitations applicable to statutory cities pursuant to section 412.301.

210.12    Sec. 9. Minnesota Statutes 2012, section 412.301, is amended to read:
210.13412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
210.14    (a) The council may issue certificates of indebtedness or capital notes subject to the
210.15city debt limits to purchase capital equipment.
210.16    (b) For purposes of this section, "capital equipment" means:
210.17    (1) public safety equipment, ambulance and other medical equipment, road
210.18construction and maintenance equipment, and other capital equipment; and
210.19    (2) computer hardware and software, without regard to its expected useful life,
210.20 whether bundled with machinery or equipment or unbundled., together with application
210.21development services and training related to the use of the computer hardware or software.
210.22    (c) The equipment or software must have an expected useful life at least as long as
210.23the terms of the certificates or notes.
210.24    (d) Such certificates or notes shall be payable in not more than ten years and shall be
210.25issued on such terms and in such manner as the council may determine.
210.26    (e) If the amount of the certificates or notes to be issued to finance any such purchase
210.27exceeds 0.25 percent of the market value of taxable property in the city, they shall not
210.28be issued for at least ten days after publication in the official newspaper of a council
210.29resolution determining to issue them; and if before the end of that time, a petition asking
210.30for an election on the proposition signed by voters equal to ten percent of the number of
210.31voters at the last regular municipal election is filed with the clerk, such certificates or notes
210.32shall not be issued until the proposition of their issuance has been approved by a majority
210.33of the votes cast on the question at a regular or special election.
210.34    (f) A tax levy shall be made for the payment of the principal and interest on such
210.35certificates or notes, in accordance with section 475.61, as in the case of bonds.

211.1    Sec. 10. [435.39] MUNICIPAL STREET IMPROVEMENT DISTRICTS.
211.2    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
211.3have the meanings given them.
211.4(b) "Governing body" means the city council of a municipality.
211.5(c) "Improvements" means construction, reconstruction, and facility upgrades
211.6involving: right-of-way acquisition; paving; curbs and gutters; bridges and culverts and
211.7their repair; milling; overlaying; drainage and storm sewers; excavation; base work;
211.8subgrade corrections; street lighting; traffic signals; signage; sidewalks; pavement
211.9markings; boulevard and easement restoration; impact mitigation; connection and
211.10reconnection of utilities; turn lanes; medians; street and alley returns; retaining walls;
211.11fences; lane additions; and fixed transit infrastructure, trails, or pathways. "Fixed transit
211.12infrastructure" does not include commuter rail rolling stock, light rail vehicles, or
211.13transit way buses; capital costs for park-and-ride facilities; feasibility studies, planning,
211.14alternative analyses, environmental studies, engineering, or construction of transit ways;
211.15or operating assistance for transit ways.
211.16(d) "Maintenance" means striping, seal coating, crack sealing, pavement repair,
211.17sidewalk maintenance, signal maintenance, street light maintenance, and signage.
211.18(e) "Municipal street" means a street, alley, or public way in which the municipality
211.19is the road authority with powers conferred by section 429.021.
211.20(f) "Municipality" means a home rule charter or statutory city.
211.21(g) "Street improvement district" means a geographic area designated by a
211.22municipality and located within the municipality within which street improvements and
211.23maintenance may be undertaken and financed according to this section.
211.24(h) "Unimproved parcel" means a parcel of land that abuts an:
211.25(1) unimproved municipal street and that is not served by municipal sewer or water
211.26utilities; or
211.27(2) improved municipal street and served by municipal sewer or water utilities
211.28and that:
211.29(i) is not improved by construction of an authorized structure; or
211.30(ii) contains a structure that has not previously been occupied.
211.31    Subd. 2. Authorization. A municipality may establish by ordinance municipal
211.32street improvement districts and may defray all or part of the total costs of municipal street
211.33improvements and maintenance by apportioning street improvement fees to all of the
211.34developed parcels located in the district. A street improvement district must not include
211.35any property already located in another street improvement district.
212.1    Subd. 3. Uniformity. (a) The total costs of municipal street improvements and
212.2maintenance must be apportioned to all developed parcels or developed tracts of land
212.3located in the established street improvement district on a uniform basis within each
212.4classification of real estate. Apportionment must be made on the basis of one of the
212.5following:
212.6(1) estimated market value;
212.7(2) tax capacity;
212.8(3) front footage;
212.9(4) land or building area; or
212.10(5) some combination of clauses (1) to (4).
212.11(b) Costs must not be apportioned in such a way that the cost borne by any
212.12classification of property is more than twice the cost that would be borne by that
212.13classification if costs were apportioned uniformly to all classifications of property under
212.14the method selected in paragraph (a), clauses (1) to (5).
212.15    Subd. 4. Adoption of plan. Before establishing a municipal street improvement
212.16district or authorizing a street improvement fee, a municipality must propose and adopt a
212.17street improvement plan that identifies the location of the municipal street improvement
212.18district and identifies and estimates the costs of the proposed improvements during the
212.19proposed period of collection of municipal street improvement fees, which must be for
212.20a period of at least five years and at most 20 years. Notice of a public hearing on the
212.21proposed plan must be given by mail to all affected landowners at least 30 days before
212.22the hearing and posted for at least 30 days before the hearing. At the public hearing, the
212.23governing body must present the plan and all affected landowners in attendance must have
212.24the opportunity to comment before the governing body considers adoption of the plan.
212.25    Subd. 5. Use of fees. Revenues from street improvement fees must be placed in
212.26a separate account and used only for projects located within the district and identified
212.27in the municipal street improvement plan.
212.28    Subd. 6. Collection; up to 20 years. (a) An ordinance adopted under this section
212.29must provide for billing and payment of the fee on a monthly, quarterly, or other basis
212.30as directed by the governing body. The governing body may collect municipal street
212.31improvement fees within a street improvement district for a maximum of 20 years.
212.32    (b) Fees that, as of October 15 of each year, have remained unpaid for at least 30
212.33days may be certified to the county auditor for collection as a special assessment payable
212.34in the following calendar year against the affected property.
212.35    Subd. 7. Improvement fee. A municipality may impose a municipal street
212.36improvement fee by ordinance. The ordinance must not be voted on or adopted until after
213.1public notice is provided and a public hearing is held in the same manner as provided in
213.2subdivision 4.
213.3    Subd. 8. Not exclusive means of financing improvements. The use of the
213.4municipal street improvement fee by a municipality does not restrict the municipality from
213.5imposing other measures to pay the costs of local street improvements or maintenance,
213.6except that a municipality must not impose special assessments for projects funded with
213.7street improvement fees.
213.8    Subd. 9. Unimproved parcels; fees. A municipality may not impose a street
213.9improvement fee on any unimproved parcel located within an established street
213.10improvement district until at least three years after either the date of substantial completion
213.11of the paving of the previous unimproved municipal street or the date which a structure is
213.12built and first occupied pursuant to a certificate of occupancy, whichever is later.
213.13    Subd. 10. Exempt property. A municipality must not impose a municipal street
213.14improvement fee on property that is exempt from taxation under the provisions of the
213.15Minnesota Constitution, article X, section 1.
213.16EFFECTIVE DATE.This section is effective July 1, 2013.

213.17    Sec. 11. Minnesota Statutes 2012, section 473.39, is amended by adding a subdivision
213.18to read:
213.19    Subd. 1s. Obligations. After July 1, 2013, in addition to other authority in this
213.20section, the council may issue certificates of indebtedness, bonds, or other obligations
213.21under this section in an amount not exceeding $35,800,000 for capital expenditures as
213.22prescribed in the council's transit capital improvement program and for related costs,
213.23including the costs of issuance and sale of the obligations.
213.24EFFECTIVE DATE.This section is effective the day following final enactment
213.25and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
213.26Washington.

213.27    Sec. 12. Minnesota Statutes 2012, section 474A.04, subdivision 1a, is amended to read:
213.28    Subd. 1a. Entitlement reservations; carryforward; deduction. Any amount
213.29returned by an entitlement issuer before July 15 shall be reallocated through the housing
213.30pool. Any amount returned on or after July 15 shall be reallocated through the unified
213.31pool. An amount returned after the last Monday in November shall be reallocated to the
213.32Minnesota Housing Finance Agency. Any amount of bonding authority that an entitlement
213.33issuer carries forward under federal tax law that is not permanently issued or for which
214.1the governing body of the entitlement issuer has not enacted a resolution electing to use
214.2the authority for mortgage credit certificates and has not provided a notice of issue to the
214.3commissioner before 4:30 p.m. on the last business day in December of the succeeding
214.4calendar year shall be deducted from the entitlement allocation for that entitlement issuer
214.5in the next succeeding calendar year. Any amount deducted from an entitlement issuer's
214.6allocation under this subdivision shall be reallocated to other entitlement issuers, the
214.7housing pool, the small issue pool, and the public facilities pool on a proportional basis
214.8consistent with section 474A.03.
214.9EFFECTIVE DATE.This section is effective the day following final enactment
214.10and applies to any bonding authority allocated in 2012 and subsequent years.

214.11    Sec. 13. Minnesota Statutes 2012, section 474A.062, is amended to read:
214.12474A.062 MINNESOTA OFFICE OF HIGHER EDUCATION 120-DAY
214.13ISSUANCE EXEMPTION.
214.14    The Minnesota Office of Higher Education is exempt from the 120-day issuance
214.15requirements in this chapter and may carry forward allocations for student loan bonds into
214.16one successive calendar year, subject to carryforward notice requirements of section
214.17474A.131, subdivision 2 .
214.18EFFECTIVE DATE.This section is effective the day following final enactment
214.19and applies to any bonding authority allocated in 2012 and subsequent years.

214.20    Sec. 14. Minnesota Statutes 2012, section 474A.091, subdivision 3a, is amended to read:
214.21    Subd. 3a. Mortgage bonds. (a) Bonding authority remaining in the unified pool on
214.22October 1 is available for single-family housing programs for cities that applied in January
214.23and received an allocation under section 474A.061, subdivision 2a, in the same calendar
214.24year. The Minnesota Housing Finance Agency shall receive an allocation for mortgage
214.25bonds pursuant to this section, minus any amounts for a city or consortium that intends to
214.26issue bonds on its own behalf under paragraph (c).
214.27    (b) The agency may issue bonds on behalf of participating cities. The agency shall
214.28request an allocation from the commissioner for all applicants who choose to have the
214.29agency issue bonds on their behalf and the commissioner shall allocate the requested
214.30amount to the agency. Allocations shall be awarded by the commissioner each Monday
214.31commencing on the first Monday in October through the last Monday in November for
214.32applications received by 4:30 p.m. on the Monday of the week preceding an allocation.
215.1    For cities who choose to have the agency issue bonds on their behalf, allocations
215.2will be made loan by loan, on a first-come, first-served basis among the cities. The
215.3agency shall submit an application fee pursuant to section 474A.03, subdivision 4, and an
215.4application deposit equal to two percent of the requested allocation to the commissioner
215.5when requesting an allocation from the unified pool. After awarding an allocation and
215.6receiving a notice of issuance for mortgage bonds issued on behalf of the participating
215.7cities, the commissioner shall transfer the application deposit to the Minnesota Housing
215.8Finance Agency.
215.9    For purposes of paragraphs (a) to (d), "city" means a county or a consortium of
215.10local government units that agree through a joint powers agreement to apply together
215.11for single-family housing programs, and has the meaning given it in section 462C.02,
215.12subdivision 6 . "Agency" means the Minnesota Housing Finance Agency.
215.13    (c) Any city that received an allocation pursuant to section 474A.061, subdivision
215.142a, paragraph (f) , in the current year that wishes to receive an additional allocation from
215.15the unified pool and issue bonds on its own behalf or pursuant to a joint powers agreement
215.16shall notify the Minnesota Housing Finance Agency by the third Monday in September.
215.17The total amount of allocation for mortgage bonds for a city choosing to issue bonds on its
215.18own behalf or through a joint powers agreement is limited to the lesser of: (i) the amount
215.19requested, or (ii) the product of the total amount available for mortgage bonds from the
215.20unified pool, multiplied by the ratio of the population of each city that applied in January
215.21and received an allocation under section 474A.061, subdivision 2a, in the same calendar
215.22year, as determined by the most recent estimate of the city's population released by the
215.23state demographer's office to the total of the population of all the cities that applied in
215.24January and received an allocation under section 474A.061, subdivision 2a, in the same
215.25calendar year. If a city choosing to issue bonds on its own behalf or through a joint powers
215.26agreement is located within a county that has also chosen to issue bonds on its own behalf
215.27or through a joint powers agreement, the city's population will be deducted from the
215.28county's population in calculating the amount of allocations under this paragraph.
215.29    The Minnesota Housing Finance Agency shall notify each city choosing to issue
215.30bonds on its own behalf or pursuant to a joint powers agreement of the amount of its
215.31allocation by October 15. Upon determining the amount of the allocation of each choosing
215.32to issue bonds on its own behalf or through a joint powers agreement, the agency shall
215.33forward a list specifying the amounts allotted to each city.
215.34    A city that chooses to issue bonds on its own behalf or through a joint powers
215.35agreement may request an allocation from the commissioner by forwarding an application
215.36with an application fee pursuant to section 474A.03, subdivision 4, and an application
216.1deposit equal to two percent of the requested amount to the commissioner no later than
216.24:30 p.m. on the Monday of the week preceding an allocation. Allocations to cities that
216.3choose to issue bonds on their own behalf shall be awarded by the commissioner on
216.4the first Monday after October 15 through the last Monday in November. No city may
216.5receive an allocation from the commissioner after the last Monday in November. The
216.6commissioner shall allocate the requested amount to the city or cities subject to the
216.7limitations under this subdivision.
216.8    If a city issues mortgage bonds from an allocation received under this paragraph,
216.9the issuer must provide for the recycling of funds into new loans. If the issuer is not
216.10able to provide for recycling, the issuer must notify the commissioner in writing of the
216.11reason that recycling was not possible and the reason the issuer elected not to have the
216.12Minnesota Housing Finance Agency issue the bonds. "Recycling" means the use of money
216.13generated from the repayment and prepayment of loans for further eligible loans or for the
216.14redemption of bonds and the issuance of current refunding bonds.
216.15    (d) No entitlement city or county or city in an entitlement county may apply for or
216.16be allocated authority to issue mortgage bonds or use mortgage credit certificates from
216.17the unified pool.
216.18    (e) An allocation awarded to the agency for mortgage bonds under this section
216.19may be carried forward by the agency into the next succeeding calendar year subject to
216.20notice requirements under section 474A.131 and is available until the last business day in
216.21December of that succeeding calendar year.
216.22EFFECTIVE DATE.This section is effective the day following final enactment
216.23and applies to any bonding authority allocated in 2012 and subsequent years.

216.24    Sec. 15. Minnesota Statutes 2012, section 475.521, subdivision 1, is amended to read:
216.25    Subdivision 1. Definitions. For purposes of this section, the following terms have
216.26the meanings given.
216.27(a) "Bonds" mean an obligation defined under section 475.51.
216.28(b) "Capital improvement" means acquisition or betterment of public lands,
216.29buildings or other improvements for the purpose of a city hall, town hall, library, public
216.30safety facility, and public works facility. An improvement must have an expected useful
216.31life of five years or more to qualify. Capital improvement does not include light rail transit
216.32or any activity related to it, or a park, road, bridge, administrative building other than a
216.33city or town hall, or land for any of those facilities. For purposes of this section, "capital
216.34improvement" includes expenditures for purposes described in this paragraph that have
216.35been incurred by a municipality before approval of a capital improvement plan, if such
217.1expenditures are included in a capital improvement plan approved on or before the date of
217.2the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
217.3(c) "Municipality" means a home rule charter or statutory city or a town described in
217.4section 368.01, subdivision 1 or 1a.

217.5    Sec. 16. Minnesota Statutes 2012, section 475.521, subdivision 2, is amended to read:
217.6    Subd. 2. Election requirement. (a) Bonds issued by a municipality to finance
217.7capital improvements under an approved capital improvements plan are not subject to the
217.8election requirements of section 475.58. The bonds must be approved by an affirmative
217.9vote of three-fifths of the members of a five-member governing body. In the case of a
217.10governing body having more or less than five members, the bonds must be approved by a
217.11vote of at least two-thirds of the members of the governing body.
217.12(b) Before the issuance of bonds qualifying under this section, the municipality
217.13must publish a notice of its intention to issue the bonds and the date and time of the
217.14hearing to obtain public comment on the matter. The notice must be published in the
217.15official newspaper of the municipality or in a newspaper of general circulation in the
217.16municipality. Additionally, the notice may be posted on the official Web site, if any, of the
217.17municipality. The notice must be published at least 14 but not more than 28 days before
217.18the date of the hearing.
217.19(c) A municipality may issue the bonds only after obtaining the approval of a
217.20majority of the voters voting on the question of issuing the obligations, if a petition
217.21requesting a vote on the issuance is signed by voters equal to five percent of the votes cast
217.22in the municipality in the last municipal general election and is filed with the clerk within
217.2330 days after the public hearing. The commissioner of revenue shall prepare a suggested
217.24form of the question to be presented at the election. If the municipality elects not to submit
217.25the question to the voters, the municipality shall not propose the issuance of bonds under
217.26this section for the same purpose and in the same amount for a period of 365 days from the
217.27date of receipt of the petition. If the question of issuing the bonds is submitted and not
217.28approved by the voters, the provisions of section 475.58, subdivision 1a, shall apply.

217.29    Sec. 17. Minnesota Statutes 2012, section 475.58, subdivision 3b, is amended to read:
217.30    Subd. 3b. Street reconstruction and bituminous overlays. (a) A municipality may,
217.31without regard to the election requirement under subdivision 1, issue and sell obligations
217.32for street reconstruction or bituminous overlays, if the following conditions are met:
217.33    (1) the streets are reconstructed or overlaid under a street reconstruction or overlay
217.34plan that describes the street reconstruction or overlay to be financed, the estimated costs,
218.1and any planned reconstruction or overlay of other streets in the municipality over the
218.2next five years, and the plan and issuance of the obligations has been approved by a vote
218.3of all of the members of the governing body present at the meeting following a public
218.4hearing for which notice has been published in the official newspaper at least ten days but
218.5not more than 28 days prior to the hearing; and
218.6    (2) if a petition requesting a vote on the issuance is signed by voters equal to
218.7five percent of the votes cast in the last municipal general election and is filed with the
218.8municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
218.9only after obtaining the approval of a majority of the voters voting on the question of the
218.10issuance of the obligations. If the municipality elects not to submit the question to the
218.11voters, the municipality shall not propose the issuance of bonds under this section for the
218.12same purpose and in the same amount for a period of 365 days from the date of receipt
218.13of the petition. If the question of issuing the bonds is submitted and not approved by the
218.14voters, the provisions of section 475.58, subdivision 1a, shall apply.
218.15    (b) Obligations issued under this subdivision are subject to the debt limit of the
218.16municipality and are not excluded from net debt under section 475.51, subdivision 4.
218.17    (c) For purposes of this subdivision, street reconstruction and bituminous overlays
218.18includes utility replacement and relocation and other activities incidental to the street
218.19reconstruction, turn lanes and other improvements having a substantial public safety
218.20function, realignments, other modifications to intersect with state and county roads, and
218.21the local share of state and county road projects. For purposes of this subdivision, "street
218.22reconstruction" includes expenditures for street reconstruction that have been incurred
218.23by a municipality before approval of a street reconstruction plan, if such expenditures
218.24are included in a street reconstruction plan approved on or before the date of the public
218.25hearing under paragraph (a), clause (1) regarding issuance of bonds for such expenditures.
218.26    (d) Except in the case of turn lanes, safety improvements, realignments, intersection
218.27modifications, and the local share of state and county road projects, street reconstruction
218.28and bituminous overlays does not include the portion of project cost allocable to widening
218.29a street or adding curbs and gutters where none previously existed.

218.30    Sec. 18. Laws 1971, chapter 773, section 1, subdivision 2, as amended by Laws 1974,
218.31chapter 351, section 5, Laws 1976, chapter 234, sections 1 and 7, Laws 1978, chapter 788,
218.32section 1, Laws 1981, chapter 369, section 1, Laws 1983, chapter 302, section 1, Laws
218.331988, chapter 513, section 1, Laws 1992, chapter 511, article 9, section 23, Laws 1998,
218.34chapter 389, article 3, section 27, and Laws 2002, chapter 390, section 23, is amended to
218.35read:
219.1    Subd. 2. For each of the years 2003 to 2013 to 2024, the city of St. Paul is
219.2authorized to issue bonds in the aggregate principal amount of $20,000,000 for each year.
219.3EFFECTIVE DATE.This section is effective the day after compliance by the
219.4governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
219.5subdivisions 2 and 3.

219.6    Sec. 19. CARRYFORWARD OF BONDING AUTHORITY FOR 2011; NO
219.7DEDUCTION FROM ENTITLEMENT ALLOCATION.
219.8    Notwithstanding Minnesota Statutes, section 474A.04, subdivision 1a, bonding
219.9authority that was allocated to an entitlement issuer in 2011 and that was carried forward
219.10under federal tax law, but for which the entitlement issuer did not provide a notice of issue
219.11to the commissioner of management and budget before 4:30 p.m. on the last business
219.12day of December 2012 must not be deducted from the entitlement allocation for that
219.13entitlement issuer in 2013.
219.14EFFECTIVE DATE.This section is effective the day following final enactment
219.15and applies retroactively to rescind any reallocation by the commissioner of management
219.16and budget under Minnesota Statues, section 474A.04, subdivision 1a, of any amounts so
219.17deducted.


219.20    Section 1. Minnesota Statutes 2012, section 163.051, is amended to read:
219.21163.051 METROPOLITAN COUNTY WHEELAGE TAX.
219.22    Subdivision 1. Tax authorized. (a) Except as provided in paragraph (b) (c), the
219.23board of commissioners of each metropolitan county is authorized to levy by resolution a
219.24wheelage tax of $5 for the year 1972 and each subsequent year thereafter by resolution
219.25 at the rate specified in paragraph (b), on each motor vehicle that is kept in such county
219.26when not in operation and that is subject to annual registration and taxation under chapter
219.27168. The board may provide by resolution for collection of the wheelage tax by county
219.28officials or it may request that the tax be collected by the state registrar of motor vehicles,
219.29and. The state registrar of motor vehicles shall collect such tax on behalf of the county if
219.30requested, as provided in subdivision 2.
219.31    (b) The wheelage tax under this section is at the rate of:
220.1(1) from January 1, 2014, through December 31, 2017, $10 per year for each county
220.2that authorizes the tax; and
220.3(2) on and after January 1, 2018, up to $20 per year, in any increment of a whole
220.4dollar, as specified by each county that authorizes the tax.
220.5    (c) The following vehicles are exempt from the wheelage tax:
220.6    (1) motorcycles, as defined in section 169.011, subdivision 44;
220.7    (2) motorized bicycles, as defined in section 169.011, subdivision 45; and
220.8    (3) electric-assisted bicycles, as defined in section 169.011, subdivision 27; and
220.9    (4) (3) motorized foot scooters, as defined in section 169.011, subdivision 46.
220.10(d) For any county that authorized the tax prior to the effective date of this section,
220.11the wheelage tax continues at the rate provided under paragraph (b).
220.12    Subd. 2. Collection by registrar of motor vehicles. The wheelage tax levied by
220.13any metropolitan county, if made collectible by the state registrar of motor vehicles,
220.14shall be certified by the county auditor to the registrar not later than August 1 in the year
220.15before the calendar year or years for which the tax is levied, and the registrar shall collect
220.16such tax with the motor vehicle taxes on the affected vehicles for such year or years.
220.17Every owner and every operator of such a motor vehicle shall furnish to the registrar all
220.18information requested by the registrar. No state motor vehicle tax on any such motor
220.19vehicle for any such year shall be received or deemed paid unless the applicable wheelage
220.20tax is paid therewith. The proceeds of the wheelage tax levied by any metropolitan county,
220.21less any amount retained by the registrar to pay costs of collection of the wheelage tax,
220.22shall be paid to the commissioner of management and budget and deposited in the state
220.23treasury to the credit of the county wheelage tax fund of each metropolitan county.
220.24    Subd. 2a. Tax proceeds deposited; costs of collection; appropriation.
220.25Notwithstanding the provisions of any other law, the state registrar of motor vehicles shall
220.26deposit the proceeds of the wheelage tax imposed by subdivision 2, to the credit of the
220.27county wheelage tax fund account of each metropolitan county. The amount necessary to
220.28pay the costs of collection of said tax is appropriated from the county wheelage tax fund
220.29 account of each metropolitan county to the state registrar of motor vehicles.
220.30    Subd. 3. Distribution to metropolitan county; appropriation. On or before
220.31April 1 in 1972 and each subsequent year, the commissioner of management and budget
220.32 On a monthly basis, the registrar of motor vehicles shall issue a warrant in favor of the
220.33treasurer of each metropolitan county for which the registrar has collected a wheelage tax
220.34in the amount of such tax then on hand in the county wheelage tax fund account. There
220.35is hereby appropriated from the county wheelage tax fund account each year, to each
221.1metropolitan county entitled to payments authorized by this section, sufficient moneys
221.2to make such payments.
221.3    Subd. 4. Use of tax. The treasurer of each metropolitan county receiving moneys
221.4 payments under subdivision 3 shall deposit such moneys payments in the county road and
221.5bridge fund. The moneys shall be used for purposes authorized by law which are highway
221.6purposes within the meaning of the Minnesota Constitution, article 14.
221.7    Subd. 6. Metropolitan county defined. "Metropolitan county" means any of the
221.8counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
221.9    Subd. 7. Offenses; penalties; application of other laws. (a) Any owner or operator
221.10of a motor vehicle who shall willfully give gives any false information relative to the tax
221.11herein authorized by this section to the registrar of motor vehicles or any metropolitan
221.12 county, or who shall willfully fail or refuse fails or refuses to furnish any such information,
221.13shall be is guilty of a misdemeanor.
221.14(b) Except as otherwise herein provided in this section, the collection and payment
221.15of a wheelage tax and all matters relating thereto shall be are subject to all provisions of
221.16law relating to collection and payment of motor vehicle taxes so far as applicable.
221.17EFFECTIVE DATE.This section is effective the day following final enactment
221.18and applies to a registration period under Minnesota Statutes, chapter 168, starting on
221.19or after January 1, 2014.

221.20    Sec. 2. Minnesota Statutes 2012, section 237.52, subdivision 3, is amended to read:
221.21    Subd. 3. Collection. Every provider of services capable of originating a TRS call,
221.22including cellular communications and other nonwire access services, in this state shall,
221.23except as provided in subdivision 3a, collect the charges established by the commission
221.24under subdivision 2 and transfer amounts collected to the commissioner of public
221.25safety in the same manner as provided in section 403.11, subdivision 1, paragraph (d).
221.26The commissioner of public safety must deposit the receipts in the fund established in
221.27subdivision 1.
221.28EFFECTIVE DATE.This section is effective January 1, 2014.

221.29    Sec. 3. Minnesota Statutes 2012, section 237.52, is amended by adding a subdivision
221.30to read:
221.31    Subd. 3a. Fee for prepaid wireless telecommunications service. The fee
221.32established in subdivision 2 does not apply to prepaid wireless telecommunications
221.33services as defined in section 403.02, subdivision 17b, which are instead subject to the
222.1prepaid wireless telecommunications access Minnesota fee established in section 403.161,
222.2subdivision 1, paragraph (b). Collection, remittance, and deposit of prepaid wireless
222.3telecommunications access Minnesota fees are governed by sections 403.161 and 403.162.
222.4EFFECTIVE DATE.This section is effective January 1, 2014.

222.5    Sec. 4. Minnesota Statutes 2012, section 270B.01, subdivision 8, is amended to read:
222.6    Subd. 8. Minnesota tax laws. For purposes of this chapter only, unless expressly
222.7stated otherwise, "Minnesota tax laws" means:
222.8    (1) the taxes, refunds, and fees administered by or paid to the commissioner under
222.9chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24),
222.10290, 290A, 291, 295, 297A, 297B, and 297H, and 403, or any similar Indian tribal tax
222.11administered by the commissioner pursuant to any tax agreement between the state and
222.12the Indian tribal government, and includes any laws for the assessment, collection, and
222.13enforcement of those taxes, refunds, and fees; and
222.14    (2) section 273.1315.
222.15EFFECTIVE DATE.This section is effective January 1, 2014.

222.16    Sec. 5. Minnesota Statutes 2012, section 270B.12, subdivision 4, is amended to read:
222.17    Subd. 4. Department of Public Safety. The commissioner may disclose return
222.18information to the Department of Public Safety for the purpose of and to the extent
222.19necessary to administer section sections 270C.725 and 403.16 to 403.162.
222.20EFFECTIVE DATE.This section is effective January 1, 2014.

222.21    Sec. 6. Minnesota Statutes 2012, section 271.06, is amended by adding a subdivision
222.22to read:
222.23    Subd. 2a. Timely mailing treated as timely filing. (a) If, after the period prescribed
222.24by subdivision 2, the original notice of appeal, proof of service upon the commissioner,
222.25and filing fee are delivered by mail in the United States to the Tax Court administrator
222.26or the court administrator of district court acting as court administrator of the Tax Court,
222.27then the date of filing is the date of the United States postmark stamped on the envelope
222.28or other appropriate wrapper in which the notice of appeal, proof of service upon the
222.29commissioner, and filing fee are mailed.
222.30(b) This subdivision applies only if the postmark date falls within the period
222.31prescribed by subdivision 2 and the original notice of appeal, proof of service upon the
222.32commissioner, and filing fee are deposited in the mail in the United States in an envelope
223.1or other appropriate wrapper, postage prepaid, properly addressed to the Tax Court
223.2administrator or the court administrator of district court acting as court administrator of
223.3the Tax Court.
223.4(c) Only the postmark of the United States Postal Service qualifies as proof of
223.5timely mailing under this subdivision. Private postage meters do not qualify as proof of
223.6timely filing under this subdivision. If the original notice of appeal, proof of service
223.7upon the commissioner, and filing fee are sent by United States registered mail, the date
223.8of registration is the postmark date. If the original notice of appeal, proof of service
223.9upon the commissioner, and filing fee are sent by United States certified mail and the
223.10sender's receipt is postmarked by the postal employee to whom the envelope containing
223.11the original notice of appeal, proof of service upon the commissioner, and filing fee is
223.12presented, the date of the United States postmark on the receipt is the postmark date.
223.13(d) A reference in this section to mail in the United States must be treated as
223.14including a reference to any designated delivery service and a reference in this section to
223.15a postmark by the United States Postal Service must be treated as including a reference
223.16to any date recorded or marked by any designated delivery service in accordance with
223.17section 7502(f) of the Internal Revenue Code.
223.18EFFECTIVE DATE.This section is effective for filings delivered by the United
223.19States Postal Service with a postmark date after August 1, 2013.

223.20    Sec. 7. Minnesota Statutes 2012, section 297E.021, subdivision 2, is amended to read:
223.21    Subd. 2. Determination of revenue increase. By March 15 of each fiscal year, the
223.22commissioner of management and budget, in consultation with the commissioner, shall
223.23determine the estimated increase in revenues received from (1) taxes imposed under this
223.24chapter, and (2) the taxes imposed under section 295.61 and the amendments to section
223.25297A.61, subdivision 3, under article 8, section 1, of this act, over (3) the estimated
223.26revenues under the February 2012 state budget forecast from the taxes imposed under this
223.27chapter for that fiscal year. For fiscal years after fiscal year 2015, the commissioner of
223.28management and budget shall use the February 2012 state budget forecast for fiscal year
223.292015 for the amount of taxes collected under this chapter as the baseline. All calculations
223.30under this subdivision must be made net of estimated refunds of the taxes required to be
223.31paid.
223.32EFFECTIVE DATE.This section is effective the day following final enactment.

224.1    Sec. 8. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision
224.2to read:
224.3    Subd. 17b. Prepaid wireless telecommunications service. "Prepaid wireless
224.4telecommunications service" means a wireless telecommunications service that allows the
224.5caller to dial 911 to access the 911 system, which service must be paid for in advance and is:
224.6(1) sold in predetermined units or dollars of which the number declines with use in a
224.7known amount; or
224.8(2) provides unlimited use for a predetermined time period.
224.9The inclusion of nontelecommunications services, including the download of digital
224.10products delivered electronically, content, and ancillary services, with a prepaid wireless
224.11telecommunications service does not preclude that service from being considered a
224.12prepaid wireless telecommunications service under this chapter.
224.13EFFECTIVE DATE.This section is effective January 1, 2014.

224.14    Sec. 9. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision
224.15to read:
224.16    Subd. 20a. Wireless telecommunications service. Wireless telecommunications
224.17service means a commercial mobile radio service, as that term is defined in United
224.18States Code, title 47, section 332, subsection (d), including all broadband personal
224.19communication services, wireless radio telephone services, and geographic area
224.20specialized mobile radio licensees, that offer real-time, two-way voice service
224.21interconnected with the public switched telephone network.
224.22EFFECTIVE DATE.This section is effective January 1, 2014.

224.23    Sec. 10. Minnesota Statutes 2012, section 403.02, subdivision 21, is amended to read:
224.24    Subd. 21. Wireless telecommunications service provider. "Wireless
224.25telecommunications service provider" means a provider of commercial mobile radio
224.26services, as that term is defined in United States Code, title 47, section 332, subsection
224.27(d), including all broadband personal communications services, wireless radio telephone
224.28services, geographic area specialized and enhanced specialized mobile radio services, and
224.29incumbent wide area specialized mobile radio licensees, that offers real-time, two-way
224.30voice service interconnected with the public switched telephone network and that is doing
224.31business in the state of Minnesota wireless telecommunications service.
224.32EFFECTIVE DATE.This section is effective January 1, 2014.

225.1    Sec. 11. Minnesota Statutes 2012, section 403.06, subdivision 1a, is amended to read:
225.2    Subd. 1a. Biennial budget; annual financial report. The commissioner shall
225.3prepare a biennial budget for maintaining the 911 system. By December 15 of each year,
225.4the commissioner shall submit a report to the legislature detailing the expenditures for
225.5maintaining the 911 system, the 911 fees collected, the balance of the 911 fund, and the
225.6911-related administrative expenses of the commissioner, and the most recent forecast of
225.7revenues and expenditures for the 911 emergency telecommunications service account,
225.8including a separate projection of E911 fees from prepaid wireless customers and
225.9projections of year-end fund balances. The commissioner is authorized to expend money
225.10that has been appropriated to pay for the maintenance, enhancements, and expansion
225.11of the 911 system.
225.12EFFECTIVE DATE.This section is effective the day following final enactment.

225.13    Sec. 12. Minnesota Statutes 2012, section 403.11, subdivision 1, is amended to read:
225.14    Subdivision 1. Emergency telecommunications service fee; account. (a) Each
225.15customer of a wireless or wire-line switched or packet-based telecommunications service
225.16provider connected to the public switched telephone network that furnishes service capable
225.17of originating a 911 emergency telephone call is assessed a fee based upon the number
225.18of wired or wireless telephone lines, or their equivalent, to cover the costs of ongoing
225.19maintenance and related improvements for trunking and central office switching equipment
225.20for 911 emergency telecommunications service, to offset administrative and staffing costs
225.21of the commissioner related to managing the 911 emergency telecommunications service
225.22program, to make distributions provided for in section 403.113, and to offset the costs,
225.23including administrative and staffing costs, incurred by the State Patrol Division of the
225.24Department of Public Safety in handling 911 emergency calls made from wireless phones.
225.25    (b) Money remaining in the 911 emergency telecommunications service account
225.26after all other obligations are paid must not cancel and is carried forward to subsequent
225.27years and may be appropriated from time to time to the commissioner to provide financial
225.28assistance to counties for the improvement of local emergency telecommunications
225.29services. The improvements may include providing access to 911 service for
225.30telecommunications service subscribers currently without access and upgrading existing
225.31911 service to include automatic number identification, local location identification,
225.32automatic location identification, and other improvements specified in revised county
225.33911 plans approved by the commissioner.
225.34    (c) The fee may not be less than eight cents nor more than 65 cents a month until
225.35June 30, 2008, not less than eight cents nor more than 75 cents a month until June 30,
226.12009, not less than eight cents nor more than 85 cents a month until June 30, 2010, and
226.2not less than eight cents nor more than 95 cents a month on or after July 1, 2010, for
226.3each customer access line or other basic access service, including trunk equivalents as
226.4designated by the Public Utilities Commission for access charge purposes and including
226.5wireless telecommunications services. With the approval of the commissioner of
226.6management and budget, the commissioner of public safety shall establish the amount of
226.7the fee within the limits specified and inform the companies and carriers of the amount to
226.8be collected. When the revenue bonds authorized under section 403.27, subdivision 1,
226.9have been fully paid or defeased, the commissioner shall reduce the fee to reflect that debt
226.10service on the bonds is no longer needed. The commissioner shall provide companies and
226.11carriers a minimum of 45 days' notice of each fee change. The fee must be the same for all
226.12customers, except that the fee imposed under this subdivision does not apply to prepaid
226.13wireless telecommunications service, which is instead subject to the fee imposed under
226.14section 403.161, subdivision 1, paragraph (a).
226.15    (d) The fee must be collected by each wireless or wire-line telecommunications
226.16service provider subject to the fee. Fees are payable to and must be submitted to the
226.17commissioner monthly before the 25th of each month following the month of collection,
226.18except that fees may be submitted quarterly if less than $250 a month is due, or annually if
226.19less than $25 a month is due. Receipts must be deposited in the state treasury and credited
226.20to a 911 emergency telecommunications service account in the special revenue fund. The
226.21money in the account may only be used for 911 telecommunications services.
226.22    (e) This subdivision does not apply to customers of interexchange carriers.
226.23    (f) The installation and recurring charges for integrating wireless 911 calls into
226.24enhanced 911 systems are eligible for payment by the commissioner if the 911 service
226.25provider is included in the statewide design plan and the charges are made pursuant to
226.26contract.
226.27    (g) Competitive local exchanges carriers holding certificates of authority from the
226.28Public Utilities Commission are eligible to receive payment for recurring 911 services.
226.29EFFECTIVE DATE.This section is effective January 1, 2014.

226.30    Sec. 13. Minnesota Statutes 2012, section 403.11, is amended by adding a subdivision
226.31to read:
226.32    Subd. 6. Report. (a) Beginning September 1, 2013, and continuing semiannually
226.33thereafter, each wireless telecommunications service provider shall report to the
226.34commissioner, based on the mobile telephone number, both the total number of prepaid
226.35wireless telecommunications subscribers sourced to Minnesota and the total number of
227.1wireless telecommunications subscribers sourced to Minnesota. The report must be filed
227.2on the same schedule as Federal Communications Commission Form 477.
227.3(b) The commissioner shall make a standard form available to all wireless
227.4telecommunications service providers for submitting information required to compile
227.5the report required under this subdivision.
227.6(c) The information provided to the commissioner under this subdivision is
227.7considered trade secret information under section 13.37 and may only be used for purposes
227.8of administering this chapter.
227.9EFFECTIVE DATE.This section is effective January 1, 2014.

227.10    Sec. 14. [403.16] DEFINITIONS.
227.11    Subdivision 1. Scope. For the purposes of sections 403.16 to 403.164, the terms
227.12defined in this section have the meanings given them.
227.13    Subd. 2. Consumer. "Consumer" means a person who purchases prepaid wireless
227.14telecommunications service in a retail transaction.
227.15    Subd. 3. Department. "Department" means the Department of Revenue.
227.16    Subd. 4. Prepaid wireless E911 fee. "Prepaid wireless E911 fee" means the fee that
227.17is required to be collected by a seller from a consumer as established in section 403.161,
227.18subdivision 1, paragraph (a).
227.19    Subd. 5. Prepaid wireless telecommunications access Minnesota fee. "Prepaid
227.20wireless telecommunications access Minnesota fee" means the fee that is required to be
227.21collected by a seller from a consumer as established in section 403.161, subdivision 1,
227.22paragraph (b).
227.23    Subd. 6. Provider. "Provider" means a person that provides prepaid wireless
227.24telecommunications service under a license issued by the Federal Communications
227.25Commission.
227.26    Subd. 7. Retail transaction. "Retail transaction" means the purchase of prepaid
227.27wireless telecommunications service from a seller for any purpose other than resale.
227.28    Subd. 8. Seller. "Seller" means a person who sells prepaid wireless
227.29telecommunications service to another person.
227.30EFFECTIVE DATE.This section is effective January 1, 2014.

227.31    Sec. 15. [403.161] PREPAID WIRELESS FEES IMPOSED; COLLECTION;
227.32REMITTANCE.
228.1    Subdivision 1. Fees imposed. (a) A prepaid wireless E911 fee of 80 cents per retail
228.2transaction is imposed on prepaid wireless telecommunications service until the fee is
228.3adjusted as an amount per retail transaction under subdivision 7.
228.4(b) A prepaid wireless telecommunications access Minnesota fee, in the amount of
228.5the monthly charge provided for in section 237.52, subdivision 2, is imposed on each
228.6retail transaction for prepaid wireless telecommunications service until the fee is adjusted
228.7as an amount per retail transaction under subdivision 7.
228.8    Subd. 2. Exemption. The fees established under subdivision 1 are not imposed on a
228.9minimal amount of prepaid wireless telecommunications service that is sold with a prepaid
228.10wireless device and is charged a single nonitemized price, and a seller may not apply the
228.11fees to such a transaction. For purposes of this subdivision, a minimal amount of service
228.12means an amount of service denominated as either ten minutes or less or $5 or less.
228.13    Subd. 3. Fee collected. The prepaid wireless E911 and telecommunications
228.14access Minnesota fees must be collected by the seller from the consumer for each retail
228.15transaction occurring in this state. The amount of each fee must be combined into one
228.16amount, which must be separately stated on an invoice, receipt, or other similar document
228.17that is provided to the consumer by the seller, or otherwise disclosed to the consumer.
228.18    Subd. 4. Sales and use tax treatment. For purposes of this section, a retail
228.19transaction conducted in person by a consumer at a business location of the seller must
228.20be treated as occurring in this state if that business location is in this state, and any other
228.21retail transaction must be treated as occurring in this state if the retail transaction is treated
228.22as occurring in this state for purposes of the sales and use tax as specified in section
228.23297A.669, subdivision 3, paragraph (c).
228.24    Subd. 5. Remittance. The prepaid wireless E911 and telecommunications access
228.25Minnesota fees are the liability of the consumer and not of the seller or of any provider,
228.26except that the seller is liable to remit all fees that the seller collects from consumers as
228.27provided in section 403.162, including all fees that the seller is deemed to collect in which
228.28the amount of the fee has not been separately stated on an invoice, receipt, or other similar
228.29document provided to the consumer by the seller.
228.30    Subd. 6. Exclusion for calculating other charges. The combined amount of the
228.31prepaid wireless E911 and telecommunications access Minnesota fees collected by a seller
228.32from a consumer must not be included in the base for measuring any tax, fee, surcharge,
228.33or other charge that is imposed by this state, any political subdivision of this state, or
228.34any intergovernmental agency.
228.35    Subd. 7. Fee changes. (a) The prepaid wireless E911 and telecommunications
228.36access Minnesota fee must be proportionately increased or reduced upon any change to
229.1the fee imposed under section 403.11, subdivision 1, paragraph (c), after July 1, 2013, or
229.2the fee imposed under section 237.52, subdivision 2, as applicable.
229.3(b) The department shall post notice of any fee changes on its Web site at least 30
229.4days in advance of the effective date of the fee changes. It is the responsibility of sellers to
229.5monitor the department's Web site for notice of fee changes.
229.6(c) Fee changes are effective 60 days after the first day of the first calendar month
229.7after the commissioner of public safety or the Public Utilities Commission, as applicable,
229.8changes the fee.
229.9EFFECTIVE DATE.This section is effective January 1, 2014.

229.10    Sec. 16. [403.162] ADMINISTRATION OF PREPAID WIRELESS E911 FEES.
229.11    Subdivision 1. Remittance. Prepaid wireless E911 and telecommunications access
229.12Minnesota fees collected by sellers must be remitted to the commissioner of revenue
229.13at the times and in the manner provided by chapter 297A with respect to the general
229.14sales and use tax. The commissioner of revenue shall establish registration and payment
229.15procedures that substantially coincide with the registration and payment procedures that
229.16apply in chapter 297A.
229.17    Subd. 2. Seller's fee retention. A seller may deduct and retain three percent of
229.18prepaid wireless E911 and telecommunications access Minnesota fees collected by the
229.19seller from consumers.
229.20    Subd. 3. Department of Revenue provisions. The audit, assessment, appeal,
229.21collection, refund, penalty, interest, enforcement, and administrative provisions of
229.22chapters 270C and 289A that are applicable to the taxes imposed by chapter 297A apply
229.23to any fee imposed under section 403.161.
229.24    Subd. 4. Procedures for resale transactions. The commissioner of revenue shall
229.25establish procedures by which a seller of prepaid wireless telecommunications service
229.26may document that a sale is not a retail transaction. These procedures must substantially
229.27coincide with the procedures for documenting sale for resale transactions as provided in
229.28chapter 297A.
229.29    Subd. 5. Fees deposited. (a) The commissioner of revenue shall, based on
229.30the relative proportion of the prepaid wireless E911 fee and the prepaid wireless
229.31telecommunications access Minnesota fee imposed per retail transaction, divide the fees
229.32collected in corresponding proportions. Within 30 days of receipt of the collected fees,
229.33the commissioner shall:
230.1(1) deposit the proportion of the collected fees attributable to the prepaid wireless
230.2E911 fee in the 911 emergency telecommunications service account in the special revenue
230.3fund; and
230.4(2) deposit the proportion of collected fees attributable to the prepaid wireless
230.5telecommunications access Minnesota fee in the telecommunications access fund
230.6established in section 237.52, subdivision 1.
230.7(b) The department may deduct and retain an amount, not to exceed two percent of
230.8collected fees, to reimburse its direct costs of administering the collection and remittance
230.9of prepaid wireless E911 fees and prepaid wireless telecommunications access Minnesota
230.10fees.
230.11EFFECTIVE DATE.This section is effective January 1, 2014.

230.12    Sec. 17. [403.163] LIABILITY PROTECTION FOR SELLERS AND
230.13PROVIDERS.
230.14(a) A provider or seller of prepaid wireless telecommunications service is not liable
230.15for damages to any person resulting from or incurred in connection with providing any
230.16lawful assistance in good faith to any investigative or law enforcement officer of the
230.17United States, this or any other state, or any political subdivision of this or any other state.
230.18(b) In addition to the protection from liability provided by paragraph (a), section
230.19403.08, subdivision 11, applies to sellers and providers.
230.20EFFECTIVE DATE.This section is effective the day following final enactment.

230.21    Sec. 18. [403.164] EXCLUSIVITY OF PREPAID WIRELESS E911 FEE.
230.22The prepaid wireless E911 fee imposed by section 403.161 is the only E911 funding
230.23obligation imposed with respect to prepaid wireless telecommunications service in this
230.24state, and no tax, fee, surcharge, or other charge may be imposed by this state, any political
230.25subdivision of this state, or any intergovernmental agency, for E911 funding purposes,
230.26upon any provider, seller, or consumer with respect to the sale, purchase, use, or provision
230.27of prepaid wireless telecommunications service.
230.28EFFECTIVE DATE.This section is effective January 1, 2014.

230.29    Sec. 19. Laws 2010, First Special Session chapter 1, article 13, section 4, subdivision
230.301, as amended by Laws 2011, First Special Session chapter 7, article 6, section 22, is
230.31amended to read:
231.1    Subdivision 1. Political contribution credit. Notwithstanding the provisions of
231.2Minnesota Statutes, section 290.06, subdivision 23, or any other law to the contrary, the
231.3political contribution refund does not apply to contributions made after June 30, 2009, and
231.4before July 1, 2013 2017.
231.5EFFECTIVE DATE.This section is effective the day following final enactment.

231.6    Sec. 20. REPORT; RECOMMENDATIONS.
231.7(a) By March 1, 2014, the commissioner of public safety shall submit a report to
231.8the chairs and ranking minority members of the legislative committees with primary
231.9jurisdiction over public safety and telecommunications that assesses the amount of
231.10revenue collected from the fees imposed under Minnesota Statutes, section 403.161,
231.11and recommends any adjustment of those fees that the commissioner of public safety
231.12determines is necessary in order to:
231.13(1) fund legislative appropriations from the 911 emergency telecommunications
231.14service account and to maintain a reasonable fund reserve; and
231.15(2) maintain fairness with respect to the amount of fees paid by customers of
231.16prepaid wireless telecommunications service as compared with customers of other
231.17telecommunications services.
231.18(b) A wireless telecommunications service provider shall provide any information
231.19requested by the commissioner of public safety for the purposes of the report.
231.20EFFECTIVE DATE.This section is effective January 1, 2014.

231.21    Sec. 21. PURPOSE STATEMENTS; TAX EXPENDITURES.
231.22    Subdivision 1. Authority. This section is intended to fulfill the requirement under
231.23Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax
231.24expenditure provide a purpose for the tax expenditure and a standard or goal against
231.25which its effectiveness may be measured.
231.26    Subd. 2. Federal conformity. The provisions of article 6 conforming Minnesota
231.27individual income tax to changes in federal law are intended to simplify compliance with
231.28and administration of the individual income tax.
231.29    Subd. 3. Employment of qualified veterans tax credit. The provisions of article 6,
231.30section 30, providing a tax credit for the employment of qualified veterans, are intended to
231.31give an incentive to employers to hire unemployed and disabled veterans. The standard
231.32against which the effectiveness of the credit is to be measured is the additional number of
231.33veterans who are hired as a result of the tax credit.
232.1    Subd. 4. Railroad track maintenance subtraction. The provisions of article 6,
232.2sections 10 and 12, allowing an individual income and corporate franchise tax subtraction
232.3for the amount allowed under the federal credit for railroad maintenance expenses, are
232.4intended to increase the combined federal and state tax incentives available to Class II
232.5and Class III railroads for maintaining and upgrading track in Minnesota. The standard
232.6against which effectiveness is to be measured is the additional miles of track maintained
232.7or upgraded following allowance of the state tax subtraction in addition to the existing
232.8federal tax credit.
232.9    Subd. 5. Sales tax exemption of coin-operated amusement devices. The
232.10provisions of article 8, section 2, exempting certain sales of coin-operated entertainment
232.11and amusement devices is intended to reduce tax pyramiding by eliminating the tax on an
232.12input used in providing a taxable service.
232.13    Subd. 6. Motor vehicle rental tax exemption for car sharing. The provisions of
232.14article 8, section 4, exempting nonprofit car sharing companies from the extra tax on short
232.15term car rentals is intended to provide a similar tax treatment between motor vehicle
232.16ownership and motor vehicle sharing.
232.17    Subd. 7. Expansion of the sales tax exemption on durable medical products and
232.18prosthetics. The provisions of article 8, section 8, expanding the definition of items
232.19included in repair and replacement parts of durable medical equipment and prosthetics
232.20and exempting Medicare and medicaid purchases is intended to simplify sales tax
232.21administration in this area and provide relief for sellers who cannot collect the tax under
232.22these programs.
232.23    Subd. 8. Exemption for public safety radio communication systems. The
232.24provisions of article 8, section 10, expanding the existing sales tax exemption for certain
232.25types of public safety radio systems in certain counties to all types of systems in all
232.26counties is intended to provide equal tax treatment to all local governments in the state
232.27on these purchases.
232.28    Subd. 9. Sales tax exemption for established religious orders. The provisions of
232.29article 8, section 11, exempting certain sales between a religious order and an affiliated
232.30institute of higher education, is intended to retain an existing sales tax exemption that
232.31exists between St. John's Abbey and St. John's University after a governing restructure
232.32between the two entities.
232.33    Subd. 10. Sales tax exemption for nursing homes and boarding care homes.
232.34The provisions of article 8, section 12, exempting certain nursing homes and boarding
232.35care homes is intended to clarify that an existing exemption for these facilities is not
233.1affected by a recent property tax case related to defining nonprofit organizations engaged
233.2in charitable activities.
233.3    Subd. 11. Construction sales tax exemptions. The provisions of article 8, sections
233.413, 14, and 15, exempting from sales tax construction materials for various entities, are
233.5intended to increase jobs and reduce tax pyramiding by reducing the tax on inputs used to
233.6provide taxable goods and services.
233.7    Subd. 12. Sales tax exemption on certain public infrastructure. The provisions
233.8of article 10, section 1, exempting construction materials used in public infrastructure
233.9projects related to the destination medical center plan is intended to reduce city costs
233.10for those projects.
233.11EFFECTIVE DATE.This section is effective the day following final enactment.


233.14    Section 1. Minnesota Statutes 2012, section 38.18, is amended to read:
233.1538.18 COUNTY FAIRGROUNDS; IMPROVEMENT AIDED.
233.16    Any Each town, statutory city, or school district in this state, now or hereafter at any
233.17time having a an estimated market value of all its taxable property, exclusive of money and
233.18credits, of more than $105,000,000, and having a county fair located within its corporate
233.19limits, is hereby authorized to aid in defraying may pay part of the expense of improving
233.20any such the fairground, by appropriating and paying over to the treasurer of the county
233.21owning the fairground such sum of money, not exceeding $10,000, for each of the political
233.22subdivisions, as the its governing body of the town, statutory city, or school district may,
233.23by resolution, determine determines to be for the best interest of the political subdivision,.
233.24 The sums so appropriated to amounts paid to the county must be used solely for the purpose
233.25of aiding in the improvement of to improve the fairground in such the manner as the county
233.26board of the county shall determine determines to be for the best interest of the county.

233.27    Sec. 2. Minnesota Statutes 2012, section 40A.15, subdivision 2, is amended to read:
233.28    Subd. 2. Eligible recipients. All counties within the state, municipalities that prepare
233.29plans and official controls instead of a county, and districts are eligible for assistance
233.30under the program. Counties and districts may apply for assistance on behalf of other
233.31municipalities. In order to be eligible for financial assistance a county or municipality must
233.32agree to levy at least 0.01209 percent of taxable estimated market value for agricultural
234.1land preservation and conservation activities or otherwise spend the equivalent amount of
234.2local money on those activities, or spend $15,000 of local money, whichever is less.

234.3    Sec. 3. Minnesota Statutes 2012, section 69.011, subdivision 1, is amended to read:
234.4    Subdivision 1. Definitions. Unless the language or context clearly indicates that
234.5a different meaning is intended, the following words and terms, for the purposes of this
234.6chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
234.7    (a) "Commissioner" means the commissioner of revenue.
234.8    (b) "Municipality" means:
234.9    (1) a home rule charter or statutory city;
234.10    (2) an organized town;
234.11    (3) a park district subject to chapter 398;
234.12    (4) the University of Minnesota;
234.13    (5) for purposes of the fire state aid program only, an American Indian tribal
234.14government entity located within a federally recognized American Indian reservation;
234.15    (6) for purposes of the police state aid program only, an American Indian tribal
234.16government with a tribal police department which exercises state arrest powers under
234.17section 626.90, 626.91, 626.92, or 626.93;
234.18    (7) for purposes of the police state aid program only, the Metropolitan Airports
234.19Commission; and
234.20    (8) for purposes of the police state aid program only, the Department of Natural
234.21Resources and the Department of Public Safety with respect to peace officers covered
234.22under chapter 352B.
234.23    (c) "Minnesota Firetown Premium Report" means a form prescribed by the
234.24commissioner containing space for reporting by insurers of fire, lightning, sprinkler
234.25leakage and extended coverage premiums received upon risks located or to be performed
234.26in this state less return premiums and dividends.
234.27    (d) "Firetown" means the area serviced by any municipality having a qualified fire
234.28department or a qualified incorporated fire department having a subsidiary volunteer
234.29firefighters' relief association.
234.30    (e) "Estimated market value" means latest available estimated market value of all
234.31property in a taxing jurisdiction, whether the property is subject to taxation, or exempt
234.32from ad valorem taxation obtained from information which appears on abstracts filed with
234.33the commissioner of revenue or equalized by the State Board of Equalization.
234.34    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the
234.35commissioner for reporting by each fire and casualty insurer of all premiums received
235.1upon direct business received by it in this state, or by its agents for it, in cash or otherwise,
235.2during the preceding calendar year, with reference to insurance written for insuring against
235.3the perils contained in auto insurance coverages as reported in the Minnesota business
235.4schedule of the annual financial statement which each insurer is required to file with
235.5the commissioner in accordance with the governing laws or rules less return premiums
235.6and dividends.
235.7    (g) "Peace officer" means any person:
235.8    (1) whose primary source of income derived from wages is from direct employment
235.9by a municipality or county as a law enforcement officer on a full-time basis of not less
235.10than 30 hours per week;
235.11    (2) who has been employed for a minimum of six months prior to December 31
235.12preceding the date of the current year's certification under subdivision 2, clause (b);
235.13    (3) who is sworn to enforce the general criminal laws of the state and local ordinances;
235.14    (4) who is licensed by the Peace Officers Standards and Training Board and is
235.15authorized to arrest with a warrant; and
235.16    (5) who is a member of the State Patrol retirement plan or the public employees
235.17police and fire fund.
235.18    (h) "Full-time equivalent number of peace officers providing contract service" means
235.19the integral or fractional number of peace officers which would be necessary to provide
235.20the contract service if all peace officers providing service were employed on a full-time
235.21basis as defined by the employing unit and the municipality receiving the contract service.
235.22    (i) "Retirement benefits other than a service pension" means any disbursement
235.23authorized under section 424A.05, subdivision 3, clauses (3) and (4).
235.24    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means:
235.25    (1) for the police state aid program and police relief association financial reports:
235.26    (i) the person who was elected or appointed to the specified position or, in the
235.27absence of the person, another person who is designated by the applicable governing body;
235.28    (ii) in a park district, the secretary of the board of park district commissioners;
235.29    (iii) in the case of the University of Minnesota, the official designated by the Board
235.30of Regents;
235.31    (iv) for the Metropolitan Airports Commission, the person designated by the
235.32commission;
235.33    (v) for the Department of Natural Resources or the Department of Public Safety, the
235.34respective commissioner;
236.1    (vi) for a tribal police department which exercises state arrest powers under section
236.2626.90 , 626.91, 626.92, or 626.93, the person designated by the applicable American
236.3Indian tribal government; and
236.4    (2) for the fire state aid program and fire relief association financial reports, the
236.5person who was elected or appointed to the specified position, or, for governmental
236.6entities other than counties, if the governing body of the governmental entity designates
236.7the position to perform the function, the chief financial official of the governmental entity
236.8or the chief administrative official of the governmental entity.
236.9    (k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the
236.10retirement plan established by chapter 353G.

236.11    Sec. 4. Minnesota Statutes 2012, section 69.021, subdivision 7, is amended to read:
236.12    Subd. 7. Apportionment of fire state aid to municipalities and relief associations.
236.13    (a) The commissioner shall apportion the fire state aid relative to the premiums reported
236.14on the Minnesota Firetown Premium Reports filed under this chapter to each municipality
236.15and/or firefighters relief association.
236.16    (b) The commissioner shall calculate an initial fire state aid allocation amount for
236.17each municipality or fire department under paragraph (c) and a minimum fire state aid
236.18allocation amount for each municipality or fire department under paragraph (d). The
236.19municipality or fire department must receive the larger fire state aid amount.
236.20    (c) The initial fire state aid allocation amount is the amount available for
236.21apportionment as fire state aid under subdivision 5, without inclusion of any additional
236.22funding amount to support a minimum fire state aid amount under section 423A.02,
236.23subdivision 3 , allocated one-half in proportion to the population as shown in the last official
236.24statewide federal census for each fire town and one-half in proportion to the estimated
236.25market value of each fire town, including (1) the estimated market value of tax-exempt
236.26property and (2) the estimated market value of natural resources lands receiving in lieu
236.27payments under sections 477A.11 to 477A.14, but excluding the estimated market value
236.28of minerals. In the case of incorporated or municipal fire departments furnishing fire
236.29protection to other cities, towns, or townships as evidenced by valid fire service contracts
236.30filed with the commissioner, the distribution must be adjusted proportionately to take
236.31into consideration the crossover fire protection service. Necessary adjustments must be
236.32made to subsequent apportionments. In the case of municipalities or independent fire
236.33departments qualifying for the aid, the commissioner shall calculate the state aid for the
236.34municipality or relief association on the basis of the population and the estimated market
236.35value of the area furnished fire protection service by the fire department as evidenced by
237.1duly executed and valid fire service agreements filed with the commissioner. If one or
237.2more fire departments are furnishing contracted fire service to a city, town, or township,
237.3only the population and estimated market value of the area served by each fire department
237.4may be considered in calculating the state aid and the fire departments furnishing service
237.5shall enter into an agreement apportioning among themselves the percent of the population
237.6and the estimated market value of each service area. The agreement must be in writing
237.7and must be filed with the commissioner.
237.8    (d) The minimum fire state aid allocation amount is the amount in addition to the
237.9initial fire state allocation amount that is derived from any additional funding amount
237.10to support a minimum fire state aid amount under section 423A.02, subdivision 3, and
237.11allocated to municipalities with volunteer firefighters relief associations or covered by the
237.12voluntary statewide lump-sum volunteer firefighter retirement plan based on the number
237.13of active volunteer firefighters who are members of the relief association as reported
237.14in the annual financial reporting for the calendar year 1993 to the Office of the State
237.15Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or
237.16fire departments with volunteer firefighters relief associations receive in total at least a
237.17minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of
237.1830 firefighters. If a relief association is established after calendar year 1993 and before
237.19calendar year 2000, the number of active volunteer firefighters who are members of the
237.20relief association as reported in the annual financial reporting for calendar year 1998
237.21to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters,
237.22shall be used in this determination. If a relief association is established after calendar
237.23year 1999, the number of active volunteer firefighters who are members of the relief
237.24association as reported in the first annual financial reporting submitted to the Office of
237.25the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this
237.26determination. If a relief association is terminated as a result of providing retirement
237.27coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer
237.28firefighter retirement plan under chapter 353G, the number of active volunteer firefighters
237.29of the municipality covered by the statewide plan as certified by the executive director of
237.30the Public Employees Retirement Association to the commissioner and the state auditor,
237.31but not to exceed 30 active firefighters, must be used in this determination.
237.32    (e) Unless the firefighters of the applicable fire department are members of the
237.33voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must
237.34be paid to the treasurer of the municipality where the fire department is located and the
237.35treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit
237.36the aid to the relief association if the relief association has filed a financial report with the
238.1treasurer of the municipality and has met all other statutory provisions pertaining to the
238.2aid apportionment. If the firefighters of the applicable fire department are members of
238.3the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid
238.4must be paid to the executive director of the Public Employees Retirement Association
238.5and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.
238.6    (f) The commissioner may make rules to permit the administration of the provisions
238.7of this section.
238.8    (g) Any adjustments needed to correct prior misallocations must be made to
238.9subsequent apportionments.

238.10    Sec. 5. Minnesota Statutes 2012, section 69.021, subdivision 8, is amended to read:
238.11    Subd. 8. Population and estimated market value. (a) In computations relating to
238.12fire state aid requiring the use of population figures, only official statewide federal census
238.13figures are to be used. Increases or decreases in population disclosed by reason of any
238.14special census must not be taken into consideration.
238.15    (b) In calculations relating to fire state aid requiring the use of estimated market
238.16value property figures, only the latest available estimated market value property figures
238.17may be used.

238.18    Sec. 6. Minnesota Statutes 2012, section 88.51, subdivision 3, is amended to read:
238.19    Subd. 3. Determination of estimated market value. In determining the net tax
238.20capacity of property within any taxing district the value of the surface of lands within any
238.21auxiliary forest therein, as determined by the county board under the provisions of section
238.2288.48, subdivision 3 , shall, for all purposes except the levying of taxes on lands within any
238.23such forest, be deemed the estimated market value thereof.

238.24    Sec. 7. Minnesota Statutes 2012, section 103B.245, subdivision 3, is amended to read:
238.25    Subd. 3. Tax. After adoption of the ordinance under subdivision 2, a local
238.26government unit may annually levy a tax on all taxable property in the district for the
238.27purposes for which the tax district is established. The tax may not exceed 0.02418 percent
238.28of estimated market value on taxable property located in rural towns other than urban
238.29towns, unless allowed by resolution of the town electors. The proceeds of the tax shall
238.30be paid into a fund reserved for these purposes. Any proceeds remaining in the reserve
238.31fund at the time the tax is terminated or the district is dissolved shall be transferred and
238.32irrevocably pledged to the debt service fund of the local unit to be used solely to reduce
238.33tax levies for bonded indebtedness of taxable property in the district.

239.1    Sec. 8. Minnesota Statutes 2012, section 103B.251, subdivision 8, is amended to read:
239.2    Subd. 8. Tax. (a) For the payment of principal and interest on the bonds issued
239.3under subdivision 7 and the payment required under subdivision 6, the county shall
239.4irrevocably pledge and appropriate the proceeds of a tax levied on all taxable property
239.5located within the territory of the watershed management organization or subwatershed
239.6unit for which the bonds are issued. Each year until the reserve for payment of the bonds
239.7is sufficient to retire the bonds, the county shall levy on all taxable property in the territory
239.8of the organization or unit, without respect to any statutory or other limitation on taxes, an
239.9amount of taxes sufficient to pay principal and interest on the bonds and to restore any
239.10deficiencies in reserves required to be maintained for payment of the bonds.
239.11    (b) The tax levied on rural towns other than urban towns may not exceed 0.02418
239.12percent of taxable estimated market value, unless approved by resolution of the town
239.13electors.
239.14    (c) If at any time the amounts available from the levy on property in the territory of
239.15the organization are insufficient to pay principal and interest on the bonds when due, the
239.16county shall make payment from any available funds in the county treasury.
239.17    (d) The amount of any taxes which are required to be levied outside of the territory
239.18of the watershed management organization or unit or taken from the general funds of the
239.19county to pay principal or interest on the bonds shall be reimbursed to the county from
239.20taxes levied within the territory of the watershed management organization or unit.

239.21    Sec. 9. Minnesota Statutes 2012, section 103B.635, subdivision 2, is amended to read:
239.22    Subd. 2. Municipal funding of district. (a) The governing body or board of
239.23supervisors of each municipality in the district must provide the funds necessary to meet
239.24its proportion of the total cost determined by the board, provided the total funding from
239.25all municipalities in the district for the costs shall not exceed an amount equal to .00242
239.26percent of the total taxable estimated market value within the district, unless three-fourths
239.27of the municipalities in the district pass a resolution concurring to the additional costs.
239.28    (b) The funds must be deposited in the treasury of the district in amounts and at
239.29times as the treasurer of the district requires.

239.30    Sec. 10. Minnesota Statutes 2012, section 103B.691, subdivision 2, is amended to read:
239.31    Subd. 2. Municipal funding of district. (a) The governing body or board of
239.32supervisors of each municipality in the district shall provide the funds necessary to meet its
239.33proportion of the total cost to be borne by the municipalities as finally certified by the board.
240.1    (b) The municipality's funds may be raised by any means within the authority of
240.2the municipality. The municipalities may each levy a tax not to exceed .02418 percent of
240.3taxable estimated market value on the taxable property located in the district to provide
240.4the funds. The levy shall be within all other limitations provided by law.
240.5    (c) The funds must be deposited into the treasury of the district in amounts and at
240.6times as the treasurer of the district requires.

240.7    Sec. 11. Minnesota Statutes 2012, section 103D.905, subdivision 2, is amended to read:
240.8    Subd. 2. Organizational expense fund. (a) An organizational expense fund,
240.9consisting of an ad valorem tax levy, shall not exceed 0.01596 percent of taxable estimated
240.10 market value, or $60,000, whichever is less. The money in the fund shall be used for
240.11organizational expenses and preparation of the watershed management plan for projects.
240.12    (b) The managers may borrow from the affected counties up to 75 percent of the
240.13anticipated funds to be collected from the organizational expense fund levy and the
240.14counties affected may make the advancements.
240.15    (c) The advancement of anticipated funds shall be apportioned among affected
240.16counties in the same ratio as the net tax capacity of the area of the counties within
240.17the watershed district bears to the net tax capacity of the entire watershed district. If a
240.18watershed district is enlarged, an organizational expense fund may be levied against the
240.19area added to the watershed district in the same manner as provided in this subdivision.
240.20    (d) Unexpended funds collected for the organizational expense may be transferred to
240.21the administrative fund and used for the purposes of the administrative fund.

240.22    Sec. 12. Minnesota Statutes 2012, section 103D.905, subdivision 3, is amended to read:
240.23    Subd. 3. General fund. A general fund, consisting of an ad valorem tax levy, may
240.24not exceed 0.048 percent of taxable estimated market value, or $250,000, whichever is
240.25less. The money in the fund shall be used for general administrative expenses and for
240.26the construction or implementation and maintenance of projects of common benefit to
240.27the watershed district. The managers may make an annual levy for the general fund as
240.28provided in section 103D.911. In addition to the annual general levy, the managers may
240.29annually levy a tax not to exceed 0.00798 percent of taxable estimated market value
240.30for a period not to exceed 15 consecutive years to pay the cost attributable to the basic
240.31water management features of projects initiated by petition of a political subdivision
240.32within the watershed district or by petition of at least 50 resident owners whose property
240.33is within the watershed district.

241.1    Sec. 13. Minnesota Statutes 2012, section 103D.905, subdivision 8, is amended to read:
241.2    Subd. 8. Survey and data acquisition fund. (a) A survey and data acquisition fund
241.3is established and used only if other funds are not available to the watershed district to pay
241.4for making necessary surveys and acquiring data.
241.5    (b) The survey and data acquisition fund consists of the proceeds of a property tax
241.6that can be levied only once every five years. The levy may not exceed 0.02418 percent of
241.7taxable estimated market value.
241.8    (c) The balance of the survey and data acquisition fund may not exceed $50,000.
241.9    (d) In a subsequent proceeding for a project where a survey has been made, the
241.10attributable cost of the survey as determined by the managers shall be included as a part of
241.11the cost of the work and the sum shall be repaid to the survey and data acquisition fund.

241.12    Sec. 14. Minnesota Statutes 2012, section 117.025, subdivision 7, is amended to read:
241.13    Subd. 7. Structurally substandard. "Structurally substandard" means a building:
241.14    (1) that was inspected by the appropriate local government and cited for one or more
241.15enforceable housing, maintenance, or building code violations;
241.16    (2) in which the cited building code violations involve one or more of the following:
241.17    (i) a roof and roof framing element;
241.18    (ii) support walls, beams, and headers;
241.19    (iii) foundation, footings, and subgrade conditions;
241.20    (iv) light and ventilation;
241.21    (v) fire protection, including egress;
241.22    (vi) internal utilities, including electricity, gas, and water;
241.23    (vii) flooring and flooring elements; or
241.24    (viii) walls, insulation, and exterior envelope;
241.25    (3) in which the cited housing, maintenance, or building code violations have not
241.26been remedied after two notices to cure the noncompliance; and
241.27    (4) has uncured housing, maintenance, and building code violations, satisfaction of
241.28which would cost more than 50 percent of the assessor's taxable estimated market value
241.29for the building, excluding land value, as determined under section 273.11 for property
241.30taxes payable in the year in which the condemnation is commenced.
241.31A local government is authorized to seek from a judge or magistrate an administrative
241.32warrant to gain access to inspect a specific building in a proposed development or
241.33redevelopment area upon showing of probable cause that a specific code violation has
241.34occurred and that the violation has not been cured, and that the owner has denied the local
241.35government access to the property. Items of evidence that may support a conclusion of
242.1probable cause may include recent fire or police inspections, housing inspection, exterior
242.2evidence of deterioration, or other similar reliable evidence of deterioration in the specific
242.3building.

242.4    Sec. 15. Minnesota Statutes 2012, section 127A.48, subdivision 1, is amended to read:
242.5    Subdivision 1. Computation. The Department of Revenue must annually conduct
242.6an assessment/sales ratio study of the taxable property in each county, city, town, and
242.7school district in accordance with the procedures in subdivisions 2 and 3. Based upon the
242.8results of this assessment/sales ratio study, the Department of Revenue must determine an
242.9aggregate equalized net tax capacity for the various classes of taxable property in each
242.10taxing district, the aggregate of which tax capacity shall be is designated as the adjusted net
242.11tax capacity. The adjusted net tax capacity must be reduced by the captured tax capacity of
242.12tax increment districts under section 469.177, subdivision 2, fiscal disparities contribution
242.13tax capacities under sections 276A.06 and 473F.08, and the tax capacity of transmission
242.14lines required to be subtracted from the local tax base under section 273.425; and increased
242.15by fiscal disparities distribution tax capacities under sections 276A.06 and 473F.08. The
242.16adjusted net tax capacities shall be determined using the net tax capacity percentages in
242.17effect for the assessment year following the assessment year of the study. The Department
242.18of Revenue must make whatever estimates are necessary to account for changes in the
242.19classification system. The Department of Revenue may incur the expense necessary to
242.20make the determinations. The commissioner of revenue may reimburse any county or
242.21governmental official for requested services performed in ascertaining the adjusted net tax
242.22capacity. On or before March 15 annually, the Department of Revenue shall file with the
242.23chair of the Tax Committee of the house of representatives and the chair of the Committee
242.24on Taxes and Tax laws of the senate a report of adjusted net tax capacities for school
242.25districts. On or before June 15 annually, the Department of Revenue shall file its final report
242.26on the adjusted net tax capacities for school districts established by the previous year's
242.27assessments and the current year's net tax capacity percentages with the commissioner of
242.28education and each county auditor for those school districts for which the auditor has the
242.29responsibility for determination of local tax rates. A copy of the report so filed shall be
242.30mailed to the clerk of each school district involved and to the county assessor or supervisor
242.31of assessments of the county or counties in which each school district is located.
242.32EFFECTIVE DATE.This section is effective the day following final enactment.

243.1    Sec. 16. Minnesota Statutes 2012, section 138.053, is amended to read:
243.2138.053 COUNTY HISTORICAL SOCIETY; TAX LEVY; CITIES OR
243.3TOWNS.
243.4    The governing body of any home rule charter or statutory city or town may annually
243.5appropriate from its general fund an amount not to exceed 0.02418 percent of taxable
243.6 estimated market value, derived from ad valorem taxes on property or other revenues, to
243.7be paid to the historical society of its respective county to be used for the promotion of
243.8historical work and to aid in defraying the expenses of carrying on the historical work in the
243.9county. No city or town may appropriate any funds for the benefit of any historical society
243.10unless the society is affiliated with and approved by the Minnesota Historical Society.

243.11    Sec. 17. Minnesota Statutes 2012, section 144F.01, subdivision 4, is amended to read:
243.12    Subd. 4. Property tax levy authority. The district's board may levy a tax on the
243.13taxable real and personal property in the district. The ad valorem tax levy may not exceed
243.140.048 percent of the taxable estimated market value of the district or $400,000, whichever
243.15is less. The proceeds of the levy must be used as provided in subdivision 5. The board shall
243.16certify the levy at the times as provided under section 275.07. The board shall provide the
243.17county with whatever information is necessary to identify the property that is located within
243.18the district. If the boundaries include a part of a parcel, the entire parcel shall be included
243.19in the district. The county auditors must spread, collect, and distribute the proceeds of the
243.20tax at the same time and in the same manner as provided by law for all other property taxes.

243.21    Sec. 18. Minnesota Statutes 2012, section 162.07, subdivision 3, is amended to read:
243.22    Subd. 3. Computation for rural counties. An amount equal to a levy of 0.01596
243.23percent on each rural county's total taxable estimated market value for the last preceding
243.24calendar year shall be computed and shall be subtracted from the county's total estimated
243.25construction costs. The result thereof shall be the money needs of the county. For the
243.26purpose of this section, "rural counties" means all counties having a population of less
243.27than 175,000.

243.28    Sec. 19. Minnesota Statutes 2012, section 162.07, subdivision 4, is amended to read:
243.29    Subd. 4. Computation for urban counties. An amount equal to a levy of 0.00967
243.30percent on each urban county's total taxable estimated market value for the last preceding
243.31calendar year shall be computed and shall be subtracted from the county's total estimated
243.32construction costs. The result thereof shall be the money needs of the county. For
244.1the purpose of this section, "urban counties" means all counties having a population
244.2of 175,000 or more.

244.3    Sec. 20. Minnesota Statutes 2012, section 163.04, subdivision 3, is amended to read:
244.4    Subd. 3. Bridges within certain cities. When the council of any statutory city or
244.5city of the third or fourth class may determine that it is necessary to build or improve any
244.6bridge or bridges, including approaches thereto, and any dam or retaining works connected
244.7therewith, upon or forming a part of streets or highways either wholly or partly within
244.8its limits, the county board shall appropriate one-half of the money as may be necessary
244.9therefor from the county road and bridge fund, not exceeding during any year one-half
244.10the amount of taxes paid into the county road and bridge fund during the preceding year,
244.11on property within the corporate limits of the city. The appropriation shall be made upon
244.12the petition of the council, which petition shall be filed by the council with the county
244.13board prior to the fixing by the board of the annual county tax levy. The county board
244.14shall determine the plans and specifications, shall let all necessary contracts, shall have
244.15charge of construction, and upon its request, warrants in payment thereof shall be issued
244.16by the county auditor, from time to time, as the construction work proceeds. Any unpaid
244.17balance may be paid or advanced by the city. On petition of the council, the appropriations
244.18of the county board, during not to exceed three successive years, may be made to apply
244.19on the construction of the same items and to repay any money advanced by the city in
244.20the construction thereof. None of the provisions of this section shall be construed to
244.21be mandatory as applied to any city whose estimated market value exceeds $2,100 per
244.22capita of its population.

244.23    Sec. 21. Minnesota Statutes 2012, section 163.06, subdivision 6, is amended to read:
244.24    Subd. 6. Expenditure in certain counties. In any county having not less than 95
244.25nor more than 105 full and fractional townships, and having a an estimated market value
244.26of not less than $12,000,000 nor more than $21,000,000, exclusive of money and credits,
244.27 the county board, by resolution, may expend the funds provided in subdivision 4 in any
244.28organized or unorganized township town or unorganized territory or portion thereof in
244.29such county.

244.30    Sec. 22. Minnesota Statutes 2012, section 165.10, subdivision 1, is amended to read:
244.31    Subdivision 1. Certain counties may issue and sell. The county board of any
244.32county having no outstanding road and bridge bonds may issue and sell county road bonds
244.33in an amount not exceeding 0.12089 percent of the estimated market value of the taxable
245.1property within the county exclusive of money and credits, for the purpose of constructing,
245.2reconstructing, improving, or maintaining any bridge or bridges on any highway under its
245.3jurisdiction, without submitting the matter to a vote of the electors of the county.

245.4    Sec. 23. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision
245.5to read:
245.6    Subd. 14. Estimated market value. "Estimated market value" means the assessor's
245.7determination of market value, including the effects of any orders made under section
245.8270.12 or chapter 274, for the parcel. The provisions of section 273.032 apply for certain
245.9uses in determining the total estimated market value for the taxing jurisdiction.

245.10    Sec. 24. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision
245.11to read:
245.12    Subd. 15. Taxable market value. "Taxable market value" means estimated market
245.13value for the parcel as reduced by market value exclusions, deferments of value, or other
245.14adjustments required by law, that reduce market value before the application of class rates.

245.15    Sec. 25. Minnesota Statutes 2012, section 273.032, is amended to read:
245.16273.032 MARKET VALUE DEFINITION.
245.17    (a) Unless otherwise provided, for the purpose of determining any property tax
245.18levy limitation based on market value or any limit on net debt, the issuance of bonds,
245.19certificates of indebtedness, or capital notes based on market value, any qualification to
245.20receive state aid based on market value, or any state aid amount based on market value, the
245.21terms "market value," "taxable estimated market value," and "market valuation," whether
245.22equalized or unequalized, mean the total taxable estimated market value of taxable property
245.23within the local unit of government before any of the following or similar adjustments for:
245.24    (1) the market value exclusions under:
245.25    (i) section 273.11, subdivisions 14a and 14c (vacant platted land);
245.26    (ii) section 273.11, subdivision 16 (certain improvements to homestead property);
245.27    (iii) section 273.11, subdivisions 19 and 20 (certain improvements to business
245.28properties);
245.29    (iv) section 273.11, subdivision 21 (homestead property damaged by mold);
245.30    (v) section 273.11, subdivision 22 (qualifying lead hazardous reduction projects);
245.31    (vi) section 273.13, subdivision 34 (homestead of a disabled veteran or family
245.32caregiver);
245.33    (vii) section 273.13, subdivision 35 (homestead market value exclusion); or
246.1    (2) the deferment of value under:
246.2    (i) the Minnesota Agricultural Property Tax Law, section 273.111;
246.3    (ii) the Aggregate Resource Preservation Law, section 273.1115;
246.4    (iii) the Minnesota Open Space Property Tax Law, section 273.112;
246.5    (iv) the rural preserves property tax program, section 273.114; or
246.6    (v) the Metropolitan Agricultural Preserves Act, section 473H.10; or
246.7    (3) the adjustments to tax capacity for:
246.8    (i) tax increment, financing under sections 469.174 to 469.1794;
246.9    (ii) fiscal disparity, disparities under chapter 276A or 473F; or
246.10    (iii) powerline credit, or wind energy values, but after the limited market adjustments
246.11under section 273.11, subdivision 1a, and after the market value exclusions of certain
246.12improvements to homestead property under section 273.11, subdivision 16 under section
246.13273.425.
246.14    (b) Estimated market value under paragraph (a) also includes the market value
246.15of tax-exempt property if the applicable law specifically provides that the limitation,
246.16qualification, or aid calculation includes tax-exempt property.
246.17    (c) Unless otherwise provided, "market value," "taxable estimated market value,"
246.18and "market valuation" for purposes of this paragraph property tax levy limitations and
246.19calculation of state aid, refer to the taxable estimated market value for the previous
246.20assessment year and for purposes of limits on net debt, the issuance of bonds, certificates of
246.21indebtedness, or capital notes refer to the estimated market value as last finally equalized.
246.22    For the purpose of determining any net debt limit based on market value, or any limit
246.23on the issuance of bonds, certificates of indebtedness, or capital notes based on market
246.24value, the terms "market value," "taxable market value," and "market valuation," whether
246.25equalized or unequalized, mean the total taxable market value of property within the local
246.26unit of government before any adjustments for tax increment, fiscal disparity, powerline
246.27credit, or wind energy values, but after the limited market value adjustments under section
246.28273.11, subdivision 1a, and after the market value exclusions of certain improvements to
246.29homestead property under section 273.11, subdivision 16. Unless otherwise provided,
246.30"market value," "taxable market value," and "market valuation" for purposes of this
246.31paragraph, mean the taxable market value as last finally equalized.
246.32    (d) For purposes of a provision of a home rule charter or of any special law that is not
246.33codified in the statutes and that imposes a levy limitation based on market value or any limit
246.34on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market
246.35value, the terms "market value," "taxable market value," and "market valuation," whether
246.36equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

247.1    Sec. 26. Minnesota Statutes 2012, section 273.11, subdivision 1, is amended to read:
247.2    Subdivision 1. Generally. Except as provided in this section or section 273.17,
247.3subdivision 1 , all property shall be valued at its market value. The market value as
247.4determined pursuant to this section shall be stated such that any amount under $100 is
247.5rounded up to $100 and any amount exceeding $100 shall be rounded to the nearest $100.
247.6In estimating and determining such value, the assessor shall not adopt a lower or different
247.7standard of value because the same is to serve as a basis of taxation, nor shall the assessor
247.8adopt as a criterion of value the price for which such property would sell at a forced sale,
247.9or in the aggregate with all the property in the town or district; but the assessor shall value
247.10each article or description of property by itself, and at such sum or price as the assessor
247.11believes the same to be fairly worth in money. The assessor shall take into account the
247.12effect on the market value of property of environmental factors in the vicinity of the
247.13property. In assessing any tract or lot of real property, the value of the land, exclusive of
247.14structures and improvements, shall be determined, and also the value of all structures and
247.15improvements thereon, and the aggregate value of the property, including all structures
247.16and improvements, excluding the value of crops growing upon cultivated land. In valuing
247.17real property upon which there is a mine or quarry, it shall be valued at such price as such
247.18property, including the mine or quarry, would sell for at a fair, voluntary sale, for cash,
247.19if the material being mined or quarried is not subject to taxation under section 298.015
247.20and the mine or quarry is not exempt from the general property tax under section 298.25.
247.21In valuing real property which is vacant, platted property shall be assessed as provided
247.22in subdivision 14 subdivisions 14a and 14c. All property, or the use thereof, which is
247.23taxable under section 272.01, subdivision 2, or 273.19, shall be valued at the market
247.24value of such property and not at the value of a leasehold estate in such property, or at
247.25some lesser value than its market value.

247.26    Sec. 27. Minnesota Statutes 2012, section 273.124, subdivision 3a, is amended to read:
247.27    Subd. 3a. Manufactured home park cooperative. (a) When a manufactured home
247.28park is owned by a corporation or association organized under chapter 308A or 308B,
247.29and each person who owns a share or shares in the corporation or association is entitled
247.30to occupy a lot within the park, the corporation or association may claim homestead
247.31treatment for the park. Each lot must be designated by legal description or number, and
247.32each lot is limited to not more than one-half acre of land.
247.33    (b) The manufactured home park shall be entitled to homestead treatment if all
247.34of the following criteria are met:
248.1    (1) the occupant or the cooperative corporation or association is paying the ad
248.2valorem property taxes and any special assessments levied against the land and structure
248.3either directly, or indirectly through dues to the corporation or association; and
248.4    (2) the corporation or association organized under chapter 308A or 308B is wholly
248.5owned by persons having a right to occupy a lot owned by the corporation or association.
248.6    (c) A charitable corporation, organized under the laws of Minnesota with no
248.7outstanding stock, and granted a ruling by the Internal Revenue Service for 501(c)(3)
248.8tax-exempt status, qualifies for homestead treatment with respect to a manufactured home
248.9park if its members hold residential participation warrants entitling them to occupy a lot
248.10in the manufactured home park.
248.11    (d) "Homestead treatment" under this subdivision means the class rate provided for
248.12class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause (5),
248.13item (ii). The homestead market value credit exclusion under section 273.1384 273.13,
248.14subdivision 35, does not apply and the property taxes assessed against the park shall not
248.15be included in the determination of taxes payable for rent paid under section 290A.03.
248.16EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
248.17thereafter.

248.18    Sec. 28. Minnesota Statutes 2012, section 273.124, subdivision 13, is amended to read:
248.19    Subd. 13. Homestead application. (a) A person who meets the homestead
248.20requirements under subdivision 1 must file a homestead application with the county
248.21assessor to initially obtain homestead classification.
248.22    (b) The format and contents of a uniform homestead application shall be prescribed
248.23by the commissioner of revenue. The application must clearly inform the taxpayer that
248.24this application must be signed by all owners who occupy the property or by the qualifying
248.25relative and returned to the county assessor in order for the property to receive homestead
248.26treatment.
248.27    (c) Every property owner applying for homestead classification must furnish to the
248.28county assessor the Social Security number of each occupant who is listed as an owner
248.29of the property on the deed of record, the name and address of each owner who does not
248.30occupy the property, and the name and Social Security number of each owner's spouse who
248.31occupies the property. The application must be signed by each owner who occupies the
248.32property and by each owner's spouse who occupies the property, or, in the case of property
248.33that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
248.34    If a property owner occupies a homestead, the property owner's spouse may not
248.35claim another property as a homestead unless the property owner and the property owner's
249.1spouse file with the assessor an affidavit or other proof required by the assessor stating that
249.2the property qualifies as a homestead under subdivision 1, paragraph (e).
249.3    Owners or spouses occupying residences owned by their spouses and previously
249.4occupied with the other spouse, either of whom fail to include the other spouse's name
249.5and Social Security number on the homestead application or provide the affidavits or
249.6other proof requested, will be deemed to have elected to receive only partial homestead
249.7treatment of their residence. The remainder of the residence will be classified as
249.8nonhomestead residential. When an owner or spouse's name and Social Security number
249.9appear on homestead applications for two separate residences and only one application is
249.10signed, the owner or spouse will be deemed to have elected to homestead the residence for
249.11which the application was signed.
249.12    The Social Security numbers, state or federal tax returns or tax return information,
249.13including the federal income tax schedule F required by this section, or affidavits or other
249.14proofs of the property owners and spouses submitted under this or another section to
249.15support a claim for a property tax homestead classification are private data on individuals as
249.16defined by section 13.02, subdivision 12, but, notwithstanding that section, the private data
249.17may be disclosed to the commissioner of revenue, or, for purposes of proceeding under the
249.18Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
249.19    (d) If residential real estate is occupied and used for purposes of a homestead by a
249.20relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
249.21order for the property to receive homestead status, a homestead application must be filed
249.22with the assessor. The Social Security number of each relative and spouse of a relative
249.23occupying the property shall be required on the homestead application filed under this
249.24subdivision. If a different relative of the owner subsequently occupies the property, the
249.25owner of the property must notify the assessor within 30 days of the change in occupancy.
249.26The Social Security number of a relative or relative's spouse occupying the property
249.27is private data on individuals as defined by section 13.02, subdivision 12, but may be
249.28disclosed to the commissioner of revenue, or, for the purposes of proceeding under the
249.29Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
249.30    (e) The homestead application shall also notify the property owners that the
249.31application filed under this section will not be mailed annually and that if the property
249.32is granted homestead status for any assessment year, that same property shall remain
249.33classified as homestead until the property is sold or transferred to another person, or
249.34the owners, the spouse of the owner, or the relatives no longer use the property as their
249.35homestead. Upon the sale or transfer of the homestead property, a certificate of value must
249.36be timely filed with the county auditor as provided under section 272.115. Failure to
250.1notify the assessor within 30 days that the property has been sold, transferred, or that the
250.2owner, the spouse of the owner, or the relative is no longer occupying the property as a
250.3homestead, shall result in the penalty provided under this subdivision and the property
250.4will lose its current homestead status.
250.5    (f) If the homestead application is not returned within 30 days, the county will send a
250.6second application to the present owners of record. The notice of proposed property taxes
250.7prepared under section 275.065, subdivision 3, shall reflect the property's classification. If
250.8a homestead application has not been filed with the county by December 15, the assessor
250.9shall classify the property as nonhomestead for the current assessment year for taxes
250.10payable in the following year, provided that the owner may be entitled to receive the
250.11homestead classification by proper application under section 375.192.
250.12    (g) At the request of the commissioner, each county must give the commissioner a
250.13list that includes the name and Social Security number of each occupant of homestead
250.14property who is the property owner, property owner's spouse, qualifying relative of a
250.15property owner, or a spouse of a qualifying relative. The commissioner shall use the
250.16information provided on the lists as appropriate under the law, including for the detection
250.17of improper claims by owners, or relatives of owners, under chapter 290A.
250.18    (h) If the commissioner finds that a property owner may be claiming a fraudulent
250.19homestead, the commissioner shall notify the appropriate counties. Within 90 days of
250.20the notification, the county assessor shall investigate to determine if the homestead
250.21classification was properly claimed. If the property owner does not qualify, the county
250.22assessor shall notify the county auditor who will determine the amount of homestead
250.23benefits that had been improperly allowed. For the purpose of this section, "homestead
250.24benefits" means the tax reduction resulting from the classification as a homestead and the
250.25homestead market value exclusion under section 273.13, the taconite homestead credit
250.26under section 273.135, the residential homestead and agricultural homestead credits credit
250.27 under section 273.1384, and the supplemental homestead credit under section 273.1391.
250.28    The county auditor shall send a notice to the person who owned the affected property
250.29at the time the homestead application related to the improper homestead was filed,
250.30demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
250.31of the homestead benefits. The person notified may appeal the county's determination
250.32by serving copies of a petition for review with county officials as provided in section
250.33278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax
250.34Court within 60 days of the date of the notice from the county. Procedurally, the appeal
250.35is governed by the provisions in chapter 271 which apply to the appeal of a property tax
250.36assessment or levy, but without requiring any prepayment of the amount in controversy. If
251.1the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
251.2has been filed, the county auditor shall certify the amount of taxes and penalty to the county
251.3treasurer. The county treasurer will add interest to the unpaid homestead benefits and
251.4penalty amounts at the rate provided in section 279.03 for real property taxes becoming
251.5delinquent in the calendar year during which the amount remains unpaid. Interest may be
251.6assessed for the period beginning 60 days after demand for payment was made.
251.7    If the person notified is the current owner of the property, the treasurer may add the
251.8total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
251.9otherwise payable on the property by including the amounts on the property tax statements
251.10under section 276.04, subdivision 3. The amounts added under this paragraph to the ad
251.11valorem taxes shall include interest accrued through December 31 of the year preceding
251.12the taxes payable year for which the amounts are first added. These amounts, when added
251.13to the property tax statement, become subject to all the laws for the enforcement of real or
251.14personal property taxes for that year, and for any subsequent year.
251.15    If the person notified is not the current owner of the property, the treasurer may
251.16collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
251.17the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment
251.18of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
251.19tax obligations of the person who owned the property at the time the application related to
251.20the improperly allowed homestead was filed. The treasurer may relieve a prior owner of
251.21personal liability for the homestead benefits, penalty, interest, and costs, and instead extend
251.22those amounts on the tax lists against the property as provided in this paragraph to the extent
251.23that the current owner agrees in writing. On all demands, billings, property tax statements,
251.24and related correspondence, the county must list and state separately the amounts of
251.25homestead benefits, penalty, interest and costs being demanded, billed or assessed.
251.26    (i) Any amount of homestead benefits recovered by the county from the property
251.27owner shall be distributed to the county, city or town, and school district where the
251.28property is located in the same proportion that each taxing district's levy was to the total
251.29of the three taxing districts' levy for the current year. Any amount recovered attributable
251.30to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
251.31deposited in the taconite property tax relief account. Any amount recovered that is
251.32attributable to supplemental homestead credit is to be transmitted to the commissioner of
251.33revenue for deposit in the general fund of the state treasury. The total amount of penalty
251.34collected must be deposited in the county general fund.
251.35    (j) If a property owner has applied for more than one homestead and the county
251.36assessors cannot determine which property should be classified as homestead, the county
252.1assessors will refer the information to the commissioner. The commissioner shall make
252.2the determination and notify the counties within 60 days.
252.3    (k) In addition to lists of homestead properties, the commissioner may ask the
252.4counties to furnish lists of all properties and the record owners. The Social Security
252.5numbers and federal identification numbers that are maintained by a county or city
252.6assessor for property tax administration purposes, and that may appear on the lists retain
252.7their classification as private or nonpublic data; but may be viewed, accessed, and used by
252.8the county auditor or treasurer of the same county for the limited purpose of assisting the
252.9commissioner in the preparation of microdata samples under section 270C.12.
252.10    (l) On or before April 30 each year beginning in 2007, each county must provide the
252.11commissioner with the following data for each parcel of homestead property by electronic
252.12means as defined in section 289A.02, subdivision 8:
252.13    (i) the property identification number assigned to the parcel for purposes of taxes
252.14payable in the current year;
252.15    (ii) the name and Social Security number of each occupant of homestead property
252.16who is the property owner, property owner's spouse, qualifying relative of a property
252.17owner, or spouse of a qualifying relative;
252.18    (iii) the classification of the property under section 273.13 for taxes payable in the
252.19current year and in the prior year;
252.20    (iv) an indication of whether the property was classified as a homestead for taxes
252.21payable in the current year because of occupancy by a relative of the owner or by a
252.22spouse of a relative;
252.23    (v) the property taxes payable as defined in section 290A.03, subdivision 13, for the
252.24current year and the prior year;
252.25    (vi) the market value of improvements to the property first assessed for tax purposes
252.26for taxes payable in the current year;
252.27    (vii) the assessor's estimated market value assigned to the property for taxes payable
252.28in the current year and the prior year;
252.29    (viii) the taxable market value assigned to the property for taxes payable in the
252.30current year and the prior year;
252.31    (ix) whether there are delinquent property taxes owing on the homestead;
252.32    (x) the unique taxing district in which the property is located; and
252.33    (xi) such other information as the commissioner decides is necessary.
252.34    The commissioner shall use the information provided on the lists as appropriate
252.35under the law, including for the detection of improper claims by owners, or relatives
252.36of owners, under chapter 290A.
253.1EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
253.2thereafter.

253.3    Sec. 29. Minnesota Statutes 2012, section 273.13, subdivision 21b, is amended to read:
253.4    Subd. 21b. Net tax capacity. (a) Gross tax capacity means the product of the
253.5appropriate gross class rates in this section and market values.
253.6    (b) Net tax capacity means the product of the appropriate net class rates in this
253.7section and taxable market values.
253.8EFFECTIVE DATE.This section is effective the day following final enactment.

253.9    Sec. 30. Minnesota Statutes 2012, section 273.1398, subdivision 3, is amended to read:
253.10    Subd. 3. Disparity reduction aid. The amount of disparity aid certified for each
253.11taxing district within each unique taxing jurisdiction for taxes payable in the prior year
253.12shall be multiplied by the ratio of (1) the jurisdiction's tax capacity using the class rates for
253.13taxes payable in the year for which aid is being computed, to (2) its tax capacity using
253.14the class rates for taxes payable in the year prior to that for which aid is being computed,
253.15both based upon taxable market values for taxes payable in the year prior to that for which
253.16aid is being computed. If the commissioner determines that insufficient information is
253.17available to reasonably and timely calculate the numerator in this ratio for the first taxes
253.18payable year that a class rate change or new class rate is effective, the commissioner shall
253.19omit the effects of that class rate change or new class rate when calculating this ratio for
253.20aid payable in that taxes payable year. For aid payable in the year following a year for
253.21which such omission was made, the commissioner shall use in the denominator for the
253.22class that was changed or created, the tax capacity for taxes payable two years prior to that
253.23in which the aid is payable, based on taxable market values for taxes payable in the year
253.24prior to that for which aid is being computed.

253.25    Sec. 31. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
253.26    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
253.27class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property
253.28is located in a border city that has an enterprise zone, as defined in section 469.166; (2)
253.29the property is located in a city with a population greater than 2,500 and less than 35,000
253.30according to the 1980 decennial census; (3) the city is adjacent to a city in another state or
253.31immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city
253.32in the other state has a population of greater than 5,000 and less than 75,000 according to
253.33the 1980 decennial census.
254.1    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
254.2property to 2.3 percent of the property's taxable market value and (ii) the tax on class 3a
254.3property to 2.3 percent of taxable market value.
254.4    (c) The county auditor shall annually certify the costs of the credits to the
254.5Department of Revenue. The department shall reimburse local governments for the
254.6property taxes forgone as the result of the credits in proportion to their total levies.

254.7    Sec. 32. Minnesota Statutes 2012, section 275.011, subdivision 1, is amended to read:
254.8    Subdivision 1. Determination of levy limit. The property tax levied for any
254.9purpose under a special law that is not codified in Minnesota Statutes or a city charter
254.10provision and that is subject to a mill rate limitation imposed by the special law or city
254.11charter provision, excluding levies subject to mill rate limitations that use adjusted
254.12assessed values determined by the commissioner of revenue under section 124.2131, must
254.13not exceed the following amount for the years specified:
254.14    (a) for taxes payable in 1988, the product of the applicable mill rate limitation
254.15imposed by special law or city charter provision multiplied by the total assessed valuation
254.16of all taxable property subject to the tax as adjusted by the provisions of Minnesota
254.17Statutes 1986, sections 272.64; 273.13, subdivision 7a; and 275.49;
254.18    (b) for taxes payable in 1989, the product of (1) the property tax levy limitation for
254.19the taxes payable year 1988 determined under clause (a) multiplied by (2) an index for
254.20market valuation changes equal to the assessment year 1988 total market valuation of all
254.21taxable property subject to the tax divided by the assessment year 1987 total market
254.22valuation of all taxable property subject to the tax; and
254.23    (c) for taxes payable in 1990 and subsequent years, the product of (1) the property
254.24tax levy limitation for the previous year determined pursuant to this subdivision multiplied
254.25by (2) an index for market valuation changes equal to the total market valuation of all
254.26taxable property subject to the tax for the current assessment year divided by the total
254.27market valuation of all taxable property subject to the tax for the previous assessment year.
254.28    For the purpose of determining the property tax levy limitation for the taxes payable
254.29year 1988 2014 and subsequent years under this subdivision, "total market valuation"
254.30means the total estimated market valuation value of all taxable property subject to the
254.31tax without valuation adjustments for fiscal disparities (chapters 276A and 473F), tax
254.32increment financing (sections 469.174 to 469.179), or powerline credit (section 273.425)
254.33 as provided under section 273.032.

254.34    Sec. 33. Minnesota Statutes 2012, section 275.077, subdivision 2, is amended to read:
255.1    Subd. 2. Correction of levy amount. The difference between the correct levy and
255.2the erroneous levy shall be added to the township levy for the subsequent levy year;
255.3provided that if the amount of the difference exceeds 0.12089 percent of taxable estimated
255.4 market value, the excess shall be added to the township levy for the second and later
255.5subsequent levy years, not to exceed an additional levy of 0.12089 percent of taxable
255.6 estimated market value in any year, until the full amount of the difference has been levied.
255.7The funds collected from the corrected levies shall be used to reimburse the county for the
255.8payment required by subdivision 1.

255.9    Sec. 34. Minnesota Statutes 2012, section 275.71, subdivision 4, is amended to read:
255.10    Subd. 4. Adjusted levy limit base. For taxes levied in 2008 through 2010, the
255.11adjusted levy limit base is equal to the levy limit base computed under subdivision 2
255.12or section 275.72, multiplied by:
255.13    (1) one plus the percentage growth in the implicit price deflator, but the percentage
255.14shall not be less than zero or exceed 3.9 percent;
255.15    (2) one plus a percentage equal to 50 percent of the percentage increase in the number
255.16of households, if any, for the most recent 12-month period for which data is available; and
255.17    (3) one plus a percentage equal to 50 percent of the percentage increase in the
255.18taxable estimated market value of the jurisdiction due to new construction of class 3
255.19property, as defined in section 273.13, subdivision 4, except for state-assessed utility and
255.20railroad property, for the most recent year for which data is available.

255.21    Sec. 35. Minnesota Statutes 2012, section 276.04, subdivision 2, is amended to read:
255.22    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the printing
255.23of the tax statements. The commissioner of revenue shall prescribe the form of the property
255.24tax statement and its contents. The tax statement must not state or imply that property tax
255.25credits are paid by the state of Minnesota. The statement must contain a tabulated statement
255.26of the dollar amount due to each taxing authority and the amount of the state tax from the
255.27parcel of real property for which a particular tax statement is prepared. The dollar amounts
255.28attributable to the county, the state tax, the voter approved school tax, the other local school
255.29tax, the township or municipality, and the total of the metropolitan special taxing districts
255.30as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated.
255.31The amounts due all other special taxing districts, if any, may be aggregated except that
255.32any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota,
255.33Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate
255.34line directly under the appropriate county's levy. If the county levy under this paragraph
256.1includes an amount for a lake improvement district as defined under sections 103B.501
256.2to 103B.581, the amount attributable for that purpose must be separately stated from the
256.3remaining county levy amount. In the case of Ramsey County, if the county levy under this
256.4paragraph includes an amount for public library service under section 134.07, the amount
256.5attributable for that purpose may be separated from the remaining county levy amount.
256.6The amount of the tax on homesteads qualifying under the senior citizens' property tax
256.7deferral program under chapter 290B is the total amount of property tax before subtraction
256.8of the deferred property tax amount. The amount of the tax on contamination value
256.9imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar
256.10amounts, including the dollar amount of any special assessments, may be rounded to the
256.11nearest even whole dollar. For purposes of this section whole odd-numbered dollars may
256.12be adjusted to the next higher even-numbered dollar. The amount of market value excluded
256.13under section 273.11, subdivision 16, if any, must also be listed on the tax statement.
256.14    (b) The property tax statements for manufactured homes and sectional structures
256.15taxed as personal property shall contain the same information that is required on the
256.16tax statements for real property.
256.17    (c) Real and personal property tax statements must contain the following information
256.18in the order given in this paragraph. The information must contain the current year tax
256.19information in the right column with the corresponding information for the previous year
256.20in a column on the left:
256.21    (1) the property's estimated market value under section 273.11, subdivision 1;
256.22    (2) the property's homestead market value exclusion under section 273.13,
256.23subdivision 35;
256.24    (3) the property's taxable market value after reductions under sections 273.11,
256.25subdivisions 1a and 16, and 273.13, subdivision 35 section 272.03, subdivision 15;
256.26    (4) the property's gross tax, before credits;
256.27    (5) for homestead agricultural properties, the credit under section 273.1384;
256.28    (6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
256.29273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
256.30credit received under section 273.135 must be separately stated and identified as "taconite
256.31tax relief"; and
256.32    (7) the net tax payable in the manner required in paragraph (a).
256.33    (d) If the county uses envelopes for mailing property tax statements and if the county
256.34agrees, a taxing district may include a notice with the property tax statement notifying
256.35taxpayers when the taxing district will begin its budget deliberations for the current
256.36year, and encouraging taxpayers to attend the hearings. If the county allows notices to
257.1be included in the envelope containing the property tax statement, and if more than
257.2one taxing district relative to a given property decides to include a notice with the tax
257.3statement, the county treasurer or auditor must coordinate the process and may combine
257.4the information on a single announcement.

257.5    Sec. 36. Minnesota Statutes 2012, section 276A.01, subdivision 10, is amended to read:
257.6    Subd. 10. Adjusted market value. "Adjusted market value" of real and personal
257.7property within a municipality means the assessor's estimated taxable market value,
257.8as defined in section 272.03, of all real and personal property, including the value of
257.9manufactured housing, within the municipality. For purposes of sections 276A.01 to
257.10276A.09, the commissioner of revenue shall annually make determinations and reports
257.11with respect to each municipality which are comparable to those it makes for school
257.12districts, adjusted for sales ratios in a manner similar to the adjustments made to city and
257.13town net tax capacities under section 127A.48, subdivisions 1 to 6, in the same manner
257.14and at the same times prescribed by the subdivision. The commissioner of revenue shall
257.15annually determine, for each municipality, information comparable to that required by
257.16section 475.53, subdivision 4, for school districts, as soon as practicable after it becomes
257.17available. The commissioner of revenue shall then compute the equalized market value of
257.18property within each municipality.
257.19EFFECTIVE DATE.This section is effective the day following final enactment.

257.20    Sec. 37. Minnesota Statutes 2012, section 276A.01, subdivision 12, is amended to read:
257.21    Subd. 12. Fiscal capacity. "Fiscal capacity" of a municipality means its valuation
257.22 adjusted market value, determined as of January 2 of any year, divided by its population,
257.23determined as of a date in the same year.

257.24    Sec. 38. Minnesota Statutes 2012, section 276A.01, subdivision 13, is amended to read:
257.25    Subd. 13. Average fiscal capacity. "Average fiscal capacity" of municipalities
257.26means the sum of the valuations adjusted market values of all municipalities, determined
257.27as of January 2 of any year, divided by the sum of their populations, determined as of
257.28a date in the same year.

257.29    Sec. 39. Minnesota Statutes 2012, section 276A.01, subdivision 15, is amended to read:
257.30    Subd. 15. Net tax capacity. "Net tax capacity" means the taxable market value of
257.31real and personal property multiplied by its net tax capacity rates in section 273.13.

258.1    Sec. 40. Minnesota Statutes 2012, section 276A.06, subdivision 10, is amended to read:
258.2    Subd. 10. Adjustment of values for other computations. For the purpose of
258.3computing the amount or rate of any salary, aid, tax, or debt authorized, required, or
258.4limited by any provision of any law or charter, where the authorization, requirement, or
258.5limitation is related to any value or valuation of taxable property within any governmental
258.6unit, the value or net tax capacity fiscal capacity under section 276A.01, subdivision 12, a
258.7municipality's taxable market value must be adjusted to reflect the adjustments reductions
258.8 to net tax capacity effected by subdivision 2, clause (a), provided that: (1) in determining
258.9the taxable market value of commercial-industrial property or any class thereof within
258.10a governmental unit for any purpose other than section 276A.05 municipality, (a) the
258.11reduction required by this subdivision is that amount which bears the same proportion to
258.12the amount subtracted from the governmental unit's municipality's net tax capacity pursuant
258.13to subdivision 2, clause (a), as the taxable market value of commercial-industrial property,
258.14or such class thereof, located within the governmental unit municipality bears to the net
258.15tax capacity of commercial-industrial property, or such class thereof, located within the
258.16governmental unit, and (b) the increase required by this subdivision is that amount which
258.17bears the same proportion to the amount added to the governmental unit's net tax capacity
258.18pursuant to subdivision 2, clause (b), as the market value of commercial-industrial property,
258.19or such class thereof, located within the governmental unit bears to the net tax capacity of
258.20commercial-industrial property, or such class thereof, located within the governmental unit;
258.21and (2) in determining the market value of real property within a municipality for purposes
258.22of section 276A.05, the adjustment prescribed by clause (1)(a) must be made and that
258.23prescribed by clause (1)(b) must not be made municipality. No adjustment shall be made
258.24to taxable market value for the increase in net tax capacity under subdivision 2, clause (b).

258.25    Sec. 41. Minnesota Statutes 2012, section 287.08, is amended to read:
258.26287.08 TAX, HOW PAYABLE; RECEIPTS.
258.27    (a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of
258.28any county in this state in which the real property or some part is located at or before
258.29the time of filing the mortgage for record. The treasurer shall endorse receipt on the
258.30mortgage and the receipt is conclusive proof that the tax has been paid in the amount
258.31stated and authorizes any county recorder or registrar of titles to record the mortgage. Its
258.32form, in substance, shall be "registration tax hereon of ..................... dollars paid." If the
258.33mortgage is exempt from taxation the endorsement shall, in substance, be "exempt from
258.34registration tax." In either case the receipt must be signed by the treasurer. In case the
258.35treasurer is unable to determine whether a claim of exemption should be allowed, the tax
259.1must be paid as in the case of a taxable mortgage. For documents submitted electronically,
259.2the endorsements and tax amount shall be affixed electronically and no signature by the
259.3treasurer will be required. The actual payment method must be arranged in advance
259.4between the submitter and the receiving county.
259.5    (b) The county treasurer may refund in whole or in part any mortgage registry tax
259.6overpayment if a written application by the taxpayer is submitted to the county treasurer
259.7within 3-1/2 years from the date of the overpayment. If the county has not issued a denial
259.8of the application, the taxpayer may bring an action in Tax Court in the county in which
259.9the tax was paid at any time after the expiration of six months from the time that the
259.10application was submitted. A denial of refund may be appealed within 60 days from
259.11the date of the denial by bringing an action in Tax Court in the county in which the tax
259.12was paid. The action is commenced by the serving of a petition for relief on the county
259.13treasurer, and by filing a copy with the court. The county attorney shall defend the action.
259.14The county treasurer shall notify the treasurer of each county that has or would receive a
259.15portion of the tax as paid.
259.16    (c) If the county treasurer determines a refund should be paid, or if a refund is
259.17ordered by the court, the county treasurer of each county that actually received a portion
259.18of the tax shall immediately pay a proportionate share of three percent of the refund
259.19using any available county funds. The county treasurer of each county that received, or
259.20would have received, a portion of the tax shall also pay their county's proportionate share
259.21of the remaining 97 percent of the court-ordered refund on or before the 20th day of the
259.22following month using solely the mortgage registry tax funds that would be paid to the
259.23commissioner of revenue on that date under section 287.12. If the funds on hand under
259.24this procedure are insufficient to fully fund 97 percent of the court-ordered refund, the
259.25county treasurer of the county in which the action was brought shall file a claim with the
259.26commissioner of revenue under section 16A.48 for the remaining portion of 97 percent of
259.27the refund, and shall pay over the remaining portion upon receipt of a warrant from the
259.28state issued pursuant to the claim.
259.29    (d) When any mortgage covers real property located in more than one county in this
259.30state the total tax must be paid to the treasurer of the county where the mortgage is first
259.31presented for recording, and the payment must be receipted as provided in paragraph
259.32(a). If the principal debt or obligation secured by such a multiple county mortgage
259.33exceeds $10,000,000, the nonstate portion of the tax must be divided and paid over by
259.34the county treasurer receiving it, on or before the 20th day of each month after receipt,
259.35to the county or counties entitled in the ratio that the estimated market value of the real
259.36property covered by the mortgage in each county bears to the estimated market value of
260.1all the real property in this state described in the mortgage. In making the division and
260.2payment the county treasurer shall send a statement giving the description of the real
260.3property described in the mortgage and the estimated market value of the part located in
260.4each county. For this purpose, the treasurer of any county may require the treasurer of
260.5any other county to certify to the former the estimated market valuation value of any tract
260.6of real property in any mortgage.
260.7    (e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The
260.8mortgagee may undertake to collect and remit the tax on behalf of the mortgagor. If the
260.9mortgagee collects money from the mortgagor to remit the tax on behalf of the mortgagor,
260.10the mortgagee has a fiduciary duty to remit the tax on behalf of the mortgagor as to the
260.11amount of the tax collected for that purpose and the mortgagor is relieved of any further
260.12obligation to pay the tax as to the amount collected by the mortgagee for this purpose.

260.13    Sec. 42. Minnesota Statutes 2012, section 287.23, subdivision 1, is amended to read:
260.14    Subdivision 1. Real property outside county. If any taxable deed or instrument
260.15describes any real property located in more than one county in this state, the total tax must
260.16be paid to the treasurer of the county where the document is first presented for recording,
260.17and the payment must be receipted as provided in section 287.08. If the net consideration
260.18exceeds $700,000, the nonstate portion of the tax must be divided and paid over by the
260.19county treasurer receiving it, on or before the 20th day of each month after receipt, to
260.20the county or counties entitled in the ratio which the estimated market value of the real
260.21property covered by the document in each county bears to the estimated market value of
260.22all the real property in this state described in the document. In making the division and
260.23payment the county treasurer shall send a statement to the other involved counties giving
260.24the description of the real property described in the document and the estimated market
260.25value of the part located in each county. The treasurer of any county may require the
260.26treasurer of any other county to certify to the former the estimated market valuation value
260.27 of any parcel of real property for this purpose.

260.28    Sec. 43. Minnesota Statutes 2012, section 353G.08, subdivision 2, is amended to read:
260.29    Subd. 2. Cash flow funding requirement. If the executive director determines that
260.30an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has
260.31insufficient assets to meet the service pensions determined payable from the account,
260.32the executive director shall certify the amount of the potential service pension shortfall
260.33to the municipality or municipalities and the municipality or municipalities shall make
260.34an additional employer contribution to the account within ten days of the certification.
261.1If more than one municipality is associated with the account, unless the municipalities
261.2agree to a different allocation, the municipalities shall allocate the additional employer
261.3contribution one-half in proportion to the population of each municipality and one-half in
261.4proportion to the estimated market value of the property of each municipality.

261.5    Sec. 44. Minnesota Statutes 2012, section 365.025, subdivision 4, is amended to read:
261.6    Subd. 4. Major purchases: notice, petition, election. Before buying anything
261.7under subdivision 2 that costs more than 0.24177 percent of the estimated market value of
261.8the town, the town must follow this subdivision.
261.9    The town must publish in its official newspaper the board's resolution to pay for the
261.10property over time. Then a petition for an election on the contract may be filed with the
261.11clerk. The petition must be filed within ten days after the resolution is published. To require
261.12the election the petition must be signed by a number of voters equal to ten percent of the
261.13voters at the last regular town election. The contract then must be approved by a majority of
261.14those voting on the question. The question may be voted on at a regular or special election.

261.15    Sec. 45. Minnesota Statutes 2012, section 366.095, subdivision 1, is amended to read:
261.16    Subdivision 1. Certificates of indebtedness. The town board may issue certificates
261.17of indebtedness within the debt limits for a town purpose otherwise authorized by law.
261.18The certificates shall be payable in not more than ten years and be issued on the terms and
261.19in the manner as the board may determine. If the amount of the certificates to be issued
261.20exceeds 0.25 percent of the estimated market value of the town, they shall not be issued
261.21for at least ten days after publication in a newspaper of general circulation in the town of
261.22the board's resolution determining to issue them. If within that time, a petition asking for
261.23an election on the proposition signed by voters equal to ten percent of the number of voters
261.24at the last regular town election is filed with the clerk, the certificates shall not be issued
261.25until their issuance has been approved by a majority of the votes cast on the question at
261.26a regular or special election. A tax levy shall be made to pay the principal and interest
261.27on the certificates as in the case of bonds.

261.28    Sec. 46. Minnesota Statutes 2012, section 366.27, is amended to read:
261.29366.27 FIREFIGHTERS' RELIEF; TAX LEVY.
261.30    The town board of any town in this state having therein a platted portion on
261.31which resides 1,200 or more people, and wherein a duly incorporated firefighters' relief
261.32association is located may each year levy a tax not to exceed 0.00806 percent of taxable
261.33 estimated market value for the benefit of the relief association.

262.1    Sec. 47. Minnesota Statutes 2012, section 368.01, subdivision 23, is amended to read:
262.2    Subd. 23. Financing purchase of certain equipment. The town board may issue
262.3certificates of indebtedness within debt limits to purchase fire or police equipment or
262.4ambulance equipment or street construction or maintenance equipment. The certificates
262.5shall be payable in not more than five years and be issued on terms and in the manner as the
262.6board may determine. If the amount of the certificates to be issued to finance a purchase
262.7exceeds 0.24177 percent of the estimated market value of the town, excluding money
262.8and credits, they shall not be issued for at least ten days after publication in the official
262.9newspaper of a town board resolution determining to issue them. If before the end of that
262.10time, a petition asking for an election on the proposition signed by voters equal to ten
262.11percent of the number of voters at the last regular town election is filed with the clerk, the
262.12certificates shall not be issued until the proposition of their issuance has been approved by a
262.13majority of the votes cast on the question at a regular or special election. A tax levy shall be
262.14made for the payment of the principal and interest on the certificates as in the case of bonds.

262.15    Sec. 48. Minnesota Statutes 2012, section 368.47, is amended to read:
262.16368.47 TOWNS MAY BE DISSOLVED.
262.17    (1) When the voters residing within a town have failed to elect any town officials for
262.18more than ten years continuously;
262.19    (2) when a town has failed for a period of ten years to exercise any of the powers
262.20and functions of a town;
262.21    (3) when the estimated market value of a town drops to less than $165,000;
262.22    (4) when the tax delinquency of a town, exclusive of taxes that are delinquent or
262.23unpaid because they are contested in proceedings for the enforcement of taxes, amounts to
262.2412 percent of its market value; or
262.25    (5) when the state or federal government has acquired title to 50 percent of the
262.26real estate of a town,
262.27which facts, or any of them, may be found and determined by the resolution of the county
262.28board of the county in which the town is located, according to the official records in the
262.29office of the county auditor, the county board by resolution may declare the town, naming
262.30it, dissolved and no longer entitled to exercise any of the powers or functions of a town.
262.31    In Cass, Itasca, and St. Louis Counties, before the dissolution is effective the voters
262.32of the town shall express their approval or disapproval. The town clerk shall, upon a
262.33petition signed by a majority of the registered voters of the town, filed with the clerk at
262.34least 60 days before a regular or special town election, give notice at the same time and
262.35in the same manner of the election that the question of dissolution of the town will be
263.1submitted for determination at the election. At the election the question shall be voted
263.2upon by a separate ballot, the terms of which shall be either "for dissolution" or "against
263.3dissolution." The ballot shall be deposited in a separate ballot box and the result of the
263.4voting canvassed, certified, and returned in the same manner and at the same time as
263.5other facts and returns of the election. If a majority of the votes cast at the election are
263.6for dissolution, the town shall be dissolved. If a majority of the votes cast at the election
263.7are against dissolution, the town shall not be dissolved.
263.8    When a town is dissolved under sections 368.47 to 368.49 the county shall acquire
263.9title to any telephone company or other business conducted by the town. The business
263.10shall be operated by the board of county commissioners until it can be sold. The
263.11subscribers or patrons of the business shall have the first opportunity of purchase. If the
263.12town has any outstanding indebtedness chargeable to the business, the county auditor shall
263.13levy a tax against the property situated in the dissolved town to pay the indebtedness
263.14as it becomes due.

263.15    Sec. 49. Minnesota Statutes 2012, section 370.01, is amended to read:
263.16370.01 CHANGE OF BOUNDARIES; CREATION OF NEW COUNTIES.
263.17    The boundaries of counties may be changed by taking territory from a county and
263.18attaching it to an adjoining county, and new counties may be established out of territory of
263.19one or more existing counties. A new county shall contain at least 400 square miles and
263.20have at least 4,000 inhabitants. A proposed new county must have a total taxable estimated
263.21 market value of at least 35 percent of (i) the total taxable estimated market value of the
263.22existing county, or (ii) the average total taxable estimated market value of the existing
263.23counties, included in the proposition. The determination of the taxable estimated market
263.24value of a county must be made by the commissioner of revenue. An existing county shall
263.25not be reduced in area below 400 square miles, have less than 4,000 inhabitants, or have a
263.26total taxable estimated market value of less than that required of a new county.
263.27    No change in the boundaries of any county having an area of more than 2,500 square
263.28miles, whether by the creation of a new county, or otherwise, shall detach from the existing
263.29county any territory within 12 miles of the county seat.

263.30    Sec. 50. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read:
263.31    Subdivision 1. Definitions. For purposes of this section, the following terms have
263.32the meanings given.
263.33    (a) "Bonds" means an obligation as defined under section 475.51.
264.1    (b) "Capital improvement" means acquisition or betterment of public lands,
264.2buildings, or other improvements within the county for the purpose of a county courthouse,
264.3administrative building, health or social service facility, correctional facility, jail, law
264.4enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads and
264.5bridges, and the acquisition of development rights in the form of conservation easements
264.6under chapter 84C. An improvement must have an expected useful life of five years or
264.7more to qualify. "Capital improvement" does not include a recreation or sports facility
264.8building (such as, but not limited to, a gymnasium, ice arena, racquet sports facility,
264.9swimming pool, exercise room or health spa), unless the building is part of an outdoor
264.10park facility and is incidental to the primary purpose of outdoor recreation.
264.11    (c) "Metropolitan county" means a county located in the seven-county metropolitan
264.12area as defined in section 473.121 or a county with a population of 90,000 or more.
264.13    (d) "Population" means the population established by the most recent of the
264.14following (determined as of the date the resolution authorizing the bonds was adopted):
264.15    (1) the federal decennial census,
264.16    (2) a special census conducted under contract by the United States Bureau of the
264.17Census, or
264.18    (3) a population estimate made either by the Metropolitan Council or by the state
264.19demographer under section 4A.02.
264.20    (e) "Qualified indoor ice arena" means a facility that meets the requirements of
264.21section 373.43.
264.22    (f) "Tax capacity" means total taxable market value, but does not include captured
264.23market value.

264.24    Sec. 51. Minnesota Statutes 2012, section 373.40, subdivision 4, is amended to read:
264.25    Subd. 4. Limitations on amount. A county may not issue bonds under this section
264.26if the maximum amount of principal and interest to become due in any year on all the
264.27outstanding bonds issued pursuant to this section (including the bonds to be issued) will
264.28equal or exceed 0.12 percent of taxable the estimated market value of property in the
264.29county. Calculation of the limit must be made using the taxable estimated market value for
264.30the taxes payable year in which the obligations are issued and sold. This section does not
264.31limit the authority to issue bonds under any other special or general law.

264.32    Sec. 52. Minnesota Statutes 2012, section 375.167, subdivision 1, is amended to read:
264.33    Subdivision 1. Appropriations. Notwithstanding any contrary law, a county board
264.34may appropriate from the general revenue fund to any nonprofit corporation a sum not
265.1to exceed 0.00604 percent of taxable estimated market value to provide legal assistance
265.2to persons who are unable to afford private legal counsel.

265.3    Sec. 53. Minnesota Statutes 2012, section 375.18, subdivision 3, is amended to read:
265.4    Subd. 3. Courthouse. Each county board may erect, furnish, and maintain a
265.5suitable courthouse. No indebtedness shall be created for a courthouse in excess of an
265.6amount equal to a levy of 0.04030 percent of taxable estimated market value without the
265.7approval of a majority of the voters of the county voting on the question of issuing the
265.8obligation at an election.

265.9    Sec. 54. Minnesota Statutes 2012, section 375.555, is amended to read:
265.10375.555 FUNDING.
265.11    To implement the county emergency jobs program, the county board may expend
265.12an amount equal to what would be generated by a levy of 0.01209 percent of taxable
265.13 estimated market value. The money to be expended may be from any available funds
265.14not otherwise earmarked.

265.15    Sec. 55. Minnesota Statutes 2012, section 383B.152, is amended to read:
265.16383B.152 BUILDING AND MAINTENANCE FUND.
265.17    The county board may by resolution levy a tax to provide money which shall be kept
265.18in a fund known as the county reserve building and maintenance fund. Money in the fund
265.19shall be used solely for the construction, maintenance, and equipping of county buildings
265.20that are constructed or maintained by the board. The levy shall not be subject to any limit
265.21fixed by any other law or by any board of tax levy or other corresponding body, but shall
265.22not exceed 0.02215 percent of taxable estimated market value, less the amount required by
265.23chapter 475 to be levied in the year for the payment of the principal of and interest on all
265.24bonds issued pursuant to Extra Session Laws 1967, chapter 47, section 1.

265.25    Sec. 56. Minnesota Statutes 2012, section 383B.245, is amended to read:
265.26383B.245 LIBRARY LEVY.
265.27    (a) The county board may levy a tax on the taxable property within the county to
265.28acquire, better, and construct county library buildings and branches and to pay principal
265.29and interest on bonds issued for that purpose.
265.30    (b) The county board may by resolution adopted by a five-sevenths vote issue and
265.31sell general obligation bonds of the county in the manner provided in sections 475.60 to
266.1475.73 . The bonds shall not be subject to the limitations of sections 475.51 to 475.59,
266.2but the maturity years and amounts and interest rates of each series of bonds shall be
266.3fixed so that the maximum amount of principal and interest to become due in any year,
266.4on the bonds of that series and of all outstanding series issued by or for the purposes of
266.5libraries, shall not exceed an amount equal to 0.01612 percent of estimated market value
266.6of all taxable property in the county as last finally equalized before the issuance of the new
266.7series. When the tax levy authorized in this section is collected it shall be appropriated
266.8and credited to a debt service fund for the bonds in amounts required each year in lieu of a
266.9countywide tax levy for the debt service fund under section 475.61.

266.10    Sec. 57. Minnesota Statutes 2012, section 383B.73, subdivision 1, is amended to read:
266.11    Subdivision 1. Levy. To provide funds for the purposes of the Three Rivers Park
266.12District as set forth in its annual budget, in lieu of the levies authorized by any other
266.13special law for such purposes, the Board of Park District Commissioners may levy taxes
266.14on all the taxable property in the county and park district at a rate not exceeding 0.03224
266.15percent of estimated market value. Notwithstanding section 398.16, on or before October
266.161 of each year, after public hearing, the Board of Park District Commissioners shall adopt
266.17a budget for the ensuing year and shall determine the total amount necessary to be raised
266.18from ad valorem tax levies to meet its budget. The Board of Park District Commissioners
266.19shall submit the budget to the county board. The county board may veto or modify an item
266.20contained in the budget. If the county board determines to veto or to modify an item in the
266.21budget, it must, within 15 days after the budget was submitted by the district board, state
266.22in writing the specific reasons for its objection to the item vetoed or the reason for the
266.23modification. The Park District Board, after consideration of the county board's objections
266.24and proposed modifications, may reapprove a vetoed item or the original version of an item
266.25with respect to which a modification has been proposed, by a two-thirds majority. If the
266.26district board does not reapprove a vetoed item, the item shall be deleted from the budget.
266.27If the district board does not reapprove the original version of a modified item, the item
266.28shall be included in the budget as modified by the county board. After adoption of the final
266.29budget and no later than October 1, the superintendent of the park district shall certify to the
266.30office of the Hennepin County director of tax and public records exercising the functions
266.31of the county auditor the total amount to be raised from ad valorem tax levies to meet its
266.32budget for the ensuing year. The director of tax and public records shall add the amount of
266.33any levy certified by the district to other tax levies on the property of the county within the
266.34district for collection by the director of tax and public records with other taxes. When
267.1collected, the director shall make settlement of such taxes with the district in the same
267.2manner as other taxes are distributed to the other political subdivisions in Hennepin County.

267.3    Sec. 58. Minnesota Statutes 2012, section 383E.20, is amended to read:
267.4383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS.
267.5    The Anoka County Board may, by resolution adopted by a four-sevenths vote, issue
267.6and sell general obligation bonds of the county in the manner provided in chapter 475 to
267.7acquire, better, and construct county library buildings. The bonds shall not be subject to the
267.8requirements of sections 475.57 to 475.59. The maturity years and amounts and interest
267.9rates of each series of bonds shall be fixed so that the maximum amount of principal and
267.10interest to become due in any year, on the bonds of that series and of all outstanding series
267.11issued by or for the purposes of libraries, shall not exceed an amount equal to .01 percent
267.12of the taxable estimated market value of all taxable property in the county, excluding any
267.13taxable property taxed by any city for the support of any free public library. When the tax
267.14levy authorized in this section is collected, it shall be appropriated and credited to a debt
267.15service fund for the bonds. The tax levy for the debt service fund under section 475.61
267.16shall be reduced by the amount available or reasonably anticipated to be available in the
267.17fund to make payments otherwise payable from the levy pursuant to section 475.61.

267.18    Sec. 59. Minnesota Statutes 2012, section 383E.23, is amended to read:
267.19383E.23 LIBRARY TAX.
267.20    The Anoka County Board may levy a tax of not more than .01 percent of the taxable
267.21 estimated market value of taxable property located within the county excluding any
267.22taxable property taxed by any city for the support of any free public library, to acquire,
267.23better, and construct county library buildings and to pay principal and interest on bonds
267.24issued for that purpose. The tax shall be disregarded in the calculation of levies or limits
267.25on levies provided by section 373.40, or other law.

267.26    Sec. 60. Minnesota Statutes 2012, section 385.31, is amended to read:
267.27385.31 PAYMENT OF COUNTY ORDERS OR WARRANTS.
267.28    When any order or warrant drawn on the treasurer is presented for payment, if there
267.29is money in the treasury for that purpose, the county treasurer shall redeem the same, and
267.30write across the entire face thereof the word "redeemed," the date of the redemption, and
267.31the treasurer's official signature. If there is not sufficient funds in the proper accounts to
267.32pay such orders they shall be numbered and registered in their order of presentation,
268.1and proper endorsement thereof shall be made on such orders and they shall be entitled
268.2to payment in like order. Such orders shall bear interest at not to exceed the rate of six
268.3percent per annum from such date of presentment. The treasurer, as soon as there is
268.4sufficient money in the treasury, shall appropriate and set apart a sum sufficient for the
268.5payment of the orders so presented and registered, and, if entitled to interest, issue to the
268.6original holder a notice that interest will cease in 30 days from the date of such notice; and,
268.7if orders thus entitled to priority of payment are not then presented, the next in order of
268.8registry may be paid until such orders are presented. No interest shall be paid on any order,
268.9except upon a warrant drawn by the county auditor for that purpose, giving the number
268.10and the date of the order on account of which the interest warrant is drawn. In any county
268.11in this state now or hereafter having a an estimated market value of all taxable property,
268.12exclusive of money and credits, of not less than $1,033,000,000, the county treasurer, in
268.13order to save payment of interest on county warrants drawn upon a fund in which there
268.14shall be temporarily insufficient money in the treasury to redeem the same, may borrow
268.15temporarily from any other fund in the county treasury in which there is a sufficient balance
268.16to care for the needs of such fund and allow a temporary loan or transfer to any other fund,
268.17and may pay such warrants out of such funds. Any such money so transferred and used in
268.18redeeming such county warrants shall be returned to the fund from which drawn as soon
268.19as money shall come in to the credit of such fund on which any such warrant was drawn
268.20and paid as aforesaid. Any county operating on a cash basis may use a combined form of
268.21warrant or order and check, which, when signed by the chair of the county board and by
268.22the auditor, is an order or warrant for the payment of the claim, and, when countersigned
268.23by the county treasurer, is a check for the payment of the amount thereof.

268.24    Sec. 61. Minnesota Statutes 2012, section 394.36, subdivision 1, is amended to read:
268.25    Subdivision 1. Continuation of nonconformity; limitations. Except as provided in
268.26subdivision 2, 3, or 4, any nonconformity, including the lawful use or occupation of land
268.27or premises existing at the time of the adoption of an official control under this chapter,
268.28may be continued, although the use or occupation does not conform to the official control.
268.29If the nonconformity or occupancy is discontinued for a period of more than one year, or
268.30any nonconforming building or structure is destroyed by fire or other peril to the extent of
268.3150 percent of its estimated market value, any subsequent use or occupancy of the land or
268.32premises shall be a conforming use or occupancy.

268.33    Sec. 62. Minnesota Statutes 2012, section 398A.04, subdivision 8, is amended to read:
269.1    Subd. 8. Taxation. Before deciding to exercise the power to tax, the authority shall
269.2give six weeks' published notice in all municipalities in the region. If a number of voters
269.3in the region equal to five percent of those who voted for candidates for governor at the
269.4last gubernatorial election present a petition within nine weeks of the first published notice
269.5to the secretary of state requesting that the matter be submitted to popular vote, it shall be
269.6submitted at the next general election. The question prepared shall be:
269.7    "Shall the regional rail authority have the power to impose a property tax?

269.8		Yes .....
269.9		No ..... "

269.10    If a majority of those voting on the question approve or if no petition is presented
269.11within the prescribed time the authority may levy a tax at any annual rate not exceeding
269.120.04835 percent of estimated market value of all taxable property situated within the
269.13municipality or municipalities named in its organization resolution. Its recording officer
269.14shall file, on or before September 15, in the office of the county auditor of each county
269.15in which territory under the jurisdiction of the authority is located a certified copy of the
269.16board of commissioners' resolution levying the tax, and each county auditor shall assess
269.17and extend upon the tax rolls of each municipality named in the organization resolution the
269.18portion of the tax that bears the same ratio to the whole amount that the net tax capacity of
269.19taxable property in that municipality bears to the net tax capacity of taxable property in
269.20all municipalities named in the organization resolution. Collections of the tax shall be
269.21remitted by each county treasurer to the treasurer of the authority. For taxes levied in 1991,
269.22the amount levied for light rail transit purposes under this subdivision shall not exceed 75
269.23percent of the amount levied in 1990 for light rail transit purposes under this subdivision.

269.24    Sec. 63. Minnesota Statutes 2012, section 401.05, subdivision 3, is amended to read:
269.25    Subd. 3. Leasing. (a) A county or joint powers board of a group of counties
269.26which acquires or constructs and equips or improves facilities under this chapter may,
269.27with the approval of the board of county commissioners of each county, enter into a
269.28lease agreement with a city situated within any of the counties, or a county housing and
269.29redevelopment authority established under chapter 469 or any special law. Under the lease
269.30agreement, the city or county housing and redevelopment authority shall:
269.31    (1) construct or acquire and equip or improve a facility in accordance with plans
269.32prepared by or at the request of a county or joint powers board of the group of counties
269.33and approved by the commissioner of corrections; and
269.34    (2) finance the facility by the issuance of revenue bonds.
270.1    (b) The county or joint powers board of a group of counties may lease the facility
270.2site, improvements, and equipment for a term upon rental sufficient to produce revenue
270.3for the prompt payment of the revenue bonds and all interest accruing on them. Upon
270.4completion of payment, the lessee shall acquire title. The real and personal property
270.5acquired for the facility constitutes a project and the lease agreement constitutes a revenue
270.6agreement as provided in sections 469.152 to 469.165. All proceedings by the city or
270.7county housing and redevelopment authority and the county or joint powers board shall be
270.8as provided in sections 469.152 to 469.165, with the following adjustments:
270.9    (1) no tax may be imposed upon the property;
270.10    (2) the approval of the project by the commissioner of employment and economic
270.11development is not required;
270.12    (3) the Department of Corrections shall be furnished and shall record information
270.13concerning each project as it may prescribe, in lieu of reports required on other projects to
270.14the commissioner of employment and economic development;
270.15    (4) the rentals required to be paid under the lease agreement shall not exceed in any
270.16year one-tenth of one percent of the estimated market value of property within the county
270.17or group of counties as last equalized before the execution of the lease agreement;
270.18    (5) the county or group of counties shall provide for payment of all rentals due
270.19during the term of the lease agreement in the manner required in subdivision 4;
270.20    (6) no mortgage on the facilities shall be granted for the security of the bonds, but
270.21compliance with clause (5) may be enforced as a nondiscretionary duty of the county
270.22or group of counties; and
270.23    (7) the county or the joint powers board of the group of counties may sublease any
270.24part of the facilities for purposes consistent with their maintenance and operation.

270.25    Sec. 64. Minnesota Statutes 2012, section 410.32, is amended to read:
270.26410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
270.27    (a) Notwithstanding any contrary provision of other law or charter, a home rule
270.28charter city may, by resolution and without public referendum, issue capital notes subject
270.29to the city debt limit to purchase capital equipment.
270.30    (b) For purposes of this section, "capital equipment" means:
270.31    (1) public safety equipment, ambulance and other medical equipment, road
270.32construction and maintenance equipment, and other capital equipment; and
270.33    (2) computer hardware and software, whether bundled with machinery or equipment
270.34or unbundled.
271.1    (c) The equipment or software must have an expected useful life at least as long
271.2as the term of the notes.
271.3    (d) The notes shall be payable in not more than ten years and be issued on terms
271.4and in the manner the city determines. The total principal amount of the capital notes
271.5issued in a fiscal year shall not exceed 0.03 percent of the estimated market value of
271.6taxable property in the city for that year.
271.7    (e) A tax levy shall be made for the payment of the principal and interest on the
271.8notes, in accordance with section 475.61, as in the case of bonds.
271.9    (f) Notes issued under this section shall require an affirmative vote of two-thirds of
271.10the governing body of the city.
271.11    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
271.12city may also issue capital notes subject to its debt limit in the manner and subject to the
271.13limitations applicable to statutory cities pursuant to section 412.301.

271.14    Sec. 65. Minnesota Statutes 2012, section 412.221, subdivision 2, is amended to read:
271.15    Subd. 2. Contracts. The council shall have power to make such contracts as may
271.16be deemed necessary or desirable to make effective any power possessed by the council.
271.17The city may purchase personal property through a conditional sales contract and real
271.18property through a contract for deed under which contracts the seller is confined to the
271.19remedy of recovery of the property in case of nonpayment of all or part of the purchase
271.20price, which shall be payable over a period of not to exceed five years. When the contract
271.21price of property to be purchased by contract for deed or conditional sales contract
271.22exceeds 0.24177 percent of the estimated market value of the city, the city may not enter
271.23into such a contract for at least ten days after publication in the official newspaper of a
271.24council resolution determining to purchase property by such a contract; and, if before the
271.25end of that time a petition asking for an election on the proposition signed by voters equal
271.26to ten percent of the number of voters at the last regular city election is filed with the clerk,
271.27the city may not enter into such a contract until the proposition has been approved by a
271.28majority of the votes cast on the question at a regular or special election.

271.29    Sec. 66. Minnesota Statutes 2012, section 412.301, is amended to read:
271.30412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
271.31    (a) The council may issue certificates of indebtedness or capital notes subject to the
271.32city debt limits to purchase capital equipment.
271.33    (b) For purposes of this section, "capital equipment" means:
272.1    (1) public safety equipment, ambulance and other medical equipment, road
272.2construction and maintenance equipment, and other capital equipment; and
272.3    (2) computer hardware and software, whether bundled with machinery or equipment
272.4or unbundled.
272.5    (c) The equipment or software must have an expected useful life at least as long as
272.6the terms of the certificates or notes.
272.7    (d) Such certificates or notes shall be payable in not more than ten years and shall be
272.8issued on such terms and in such manner as the council may determine.
272.9    (e) If the amount of the certificates or notes to be issued to finance any such purchase
272.10exceeds 0.25 percent of the estimated market value of taxable property in the city, they
272.11shall not be issued for at least ten days after publication in the official newspaper of
272.12a council resolution determining to issue them; and if before the end of that time, a
272.13petition asking for an election on the proposition signed by voters equal to ten percent
272.14of the number of voters at the last regular municipal election is filed with the clerk, such
272.15certificates or notes shall not be issued until the proposition of their issuance has been
272.16approved by a majority of the votes cast on the question at a regular or special election.
272.17    (f) A tax levy shall be made for the payment of the principal and interest on such
272.18certificates or notes, in accordance with section 475.61, as in the case of bonds.

272.19    Sec. 67. Minnesota Statutes 2012, section 428A.02, subdivision 1, is amended to read:
272.20    Subdivision 1. Ordinance. The governing body of a city may adopt an ordinance
272.21establishing a special service district. Only property that is classified under section 273.13
272.22and used for commercial, industrial, or public utility purposes, or is vacant land zoned or
272.23designated on a land use plan for commercial or industrial use and located in the special
272.24service district, may be subject to the charges imposed by the city on the special service
272.25district. Other types of property may be included within the boundaries of the special
272.26service district but are not subject to the levies or charges imposed by the city on the
272.27special service district. If 50 percent or more of the estimated market value of a parcel of
272.28property is classified under section 273.13 as commercial, industrial, or vacant land zoned
272.29or designated on a land use plan for commercial or industrial use, or public utility for the
272.30current assessment year, then the entire taxable market value of the property is subject to a
272.31service charge based on net tax capacity for purposes of sections 428A.01 to 428A.10.
272.32The ordinance shall describe with particularity the area within the city to be included in
272.33the district and the special services to be furnished in the district. The ordinance may not
272.34be adopted until after a public hearing has been held on the question. Notice of the hearing
272.35shall include the time and place of hearing, a map showing the boundaries of the proposed
273.1district, and a statement that all persons owning property in the proposed district that
273.2would be subject to a service charge will be given opportunity to be heard at the hearing.
273.3Within 30 days after adoption of the ordinance under this subdivision, the governing body
273.4shall send a copy of the ordinance to the commissioner of revenue.

273.5    Sec. 68. Minnesota Statutes 2012, section 430.102, subdivision 2, is amended to read:
273.6    Subd. 2. Council approval; special tax levy limitation. The council shall receive
273.7and consider the estimate required in subdivision 1 and the items of cost after notice and
273.8hearing before it or its appropriate committee as it considers necessary or expedient, and
273.9shall approve the estimate, with necessary amendments. The amounts of each item of cost
273.10estimated are then appropriated to operate, maintain, and improve the pedestrian mall
273.11during the next fiscal year. The amount of the special tax to be charged under subdivision
273.121, clause (3), must not, however, exceed 0.12089 percent of estimated market value of
273.13taxable property in the district. The council shall make any necessary adjustment in costs of
273.14operating and maintaining the district to keep the amount of the tax within this limitation.

273.15    Sec. 69. Minnesota Statutes 2012, section 447.10, is amended to read:
273.16447.10 TAX LEVY FOR OPERATING AND MAINTAINING HOSPITAL.
273.17    The governing body of a city of the first class owning a hospital may annually levy
273.18a tax to operate and maintain the hospital. The tax must not exceed 0.00806 percent of
273.19taxable estimated market value.

273.20    Sec. 70. Minnesota Statutes 2012, section 450.19, is amended to read:
273.21450.19 TOURIST CAMPING GROUNDS.
273.22    A home rule charter or statutory city or town may establish and maintain public
273.23tourist camping grounds. The governing body thereof may acquire by lease, purchase, or
273.24gift, suitable lands located either within or without the corporate limits for use as public
273.25tourist camping grounds and provide for the equipment, operation, and maintenance
273.26of the same. The amount that may be expended for the maintenance, improvement, or
273.27operation of tourist camping grounds shall not exceed, in any year, a sum equal to 0.00806
273.28percent of taxable estimated market value.

273.29    Sec. 71. Minnesota Statutes 2012, section 450.25, is amended to read:
273.30450.25 MUSEUM, GALLERY, OR SCHOOL OF ARTS OR CRAFTS; TAX
273.31LEVY.
274.1    After the acquisition of any museum, gallery, or school of arts or crafts, the board
274.2of park commissioners of the city in which it is located shall cause to be included in the
274.3annual tax levy upon all the taxable property of the county in which the museum, gallery,
274.4or school of arts or crafts is located, a tax of 0.00846 percent of estimated market value.
274.5The board shall certify the levy to the county auditor and it shall be added to, and collected
274.6with and as part of, the general, real, and personal property taxes, with like penalties and
274.7interest, in case of nonpayment and default, and all provisions of law in respect to the
274.8levy, collection, and enforcement of other taxes shall, so far as applicable, be followed in
274.9respect of these taxes. All of these taxes, penalties, and interest, when collected, shall be
274.10paid to the city treasurer of the city in which is located the museum, gallery, or school
274.11of arts or crafts and credited to a fund to be known as the park museum fund, and shall
274.12be used only for the purposes specified in sections 450.23 to 450.25. Any part of the
274.13proceeds of the levy not expended for the purposes specified in section 450.24 may be
274.14used for the erection of new buildings for the same purposes.

274.15    Sec. 72. Minnesota Statutes 2012, section 458A.10, is amended to read:
274.16458A.10 PROPERTY TAX.
274.17    The commission shall annually levy a tax not to exceed 0.12089 percent of estimated
274.18market value on all the taxable property in the transit area at a rate sufficient to produce
274.19an amount necessary for the purposes of sections 458A.01 to 458A.15, other than the
274.20payment of principal and interest due on any revenue bonds issued pursuant to section
274.21458A.05 . Property taxes levied under this section shall be certified by the commission to
274.22the county auditors of the transit area, extended, assessed, and collected in the manner
274.23provided by law for the property taxes levied by the governing bodies of cities. The
274.24proceeds of the taxes levied under this section shall be remitted by the respective county
274.25treasurers to the treasurer of the commission, who shall credit the same to the funds of
274.26the commission for use for the purposes of sections 458A.01 to 458A.15 subject to any
274.27applicable pledges or limitations on account of tax anticipation certificates or other
274.28specific purposes. At any time after making a tax levy under this section and certifying
274.29it to the county auditors, the commission may issue general obligation certificates of
274.30indebtedness in anticipation of the collection of the taxes as provided by section 412.261.

274.31    Sec. 73. Minnesota Statutes 2012, section 458A.31, subdivision 1, is amended to read:
274.32    Subdivision 1. Levy limit. Notwithstanding anything to the contrary contained in
274.33the charter of the city of Duluth, any ordinance thereof, or any statute applicable thereto,
274.34limiting the amount levied in any one year for general or special purposes, the city council
275.1of the city of Duluth shall each year levy a tax in an amount not to exceed 0.07253
275.2percent of taxable estimated market value, by ordinance. An ordinance fixing the levy
275.3shall take effect immediately upon its passage and approval. The proceeds of the levy
275.4shall be paid into the city treasury and deposited in the operating fund provided for in
275.5section 458A.24, subdivision 3.

275.6    Sec. 74. Minnesota Statutes 2012, section 465.04, is amended to read:
275.7465.04 ACCEPTANCE OF GIFTS.
275.8    Cities of the second, third, or fourth class, having at any time a an estimated
275.9 market value of not more than $41,000,000, exclusive of money and credits, as officially
275.10equalized by the commissioner of revenue, either under home rule charter or under the
275.11laws of this state, in addition to all other powers possessed by them, hereby are authorized
275.12and empowered to receive and accept gifts and donations for the use and benefit of
275.13such cities and the inhabitants thereof upon terms and conditions to be approved by the
275.14governing bodies of such cities; and such cities are authorized to comply with and perform
275.15such terms and conditions, which may include payment to the donor or donors of interest
275.16on the value of the gift at not exceeding five percent per annum payable annually or
275.17semiannually, during the remainder of the natural life or lives of such donor or donors.

275.18    Sec. 75. Minnesota Statutes 2012, section 469.033, subdivision 6, is amended to read:
275.19    Subd. 6. Operation area as taxing district, special tax. All of the territory included
275.20within the area of operation of any authority shall constitute a taxing district for the
275.21purpose of levying and collecting special benefit taxes as provided in this subdivision. All
275.22of the taxable property, both real and personal, within that taxing district shall be deemed
275.23to be benefited by projects to the extent of the special taxes levied under this subdivision.
275.24Subject to the consent by resolution of the governing body of the city in and for which
275.25it was created, an authority may levy a tax upon all taxable property within that taxing
275.26district. The tax shall be extended, spread, and included with and as a part of the general
275.27taxes for state, county, and municipal purposes by the county auditor, to be collected and
275.28enforced therewith, together with the penalty, interest, and costs. As the tax, including any
275.29penalties, interest, and costs, is collected by the county treasurer it shall be accumulated
275.30and kept in a separate fund to be known as the "housing and redevelopment project fund."
275.31The money in the fund shall be turned over to the authority at the same time and in the same
275.32manner that the tax collections for the city are turned over to the city, and shall be expended
275.33only for the purposes of sections 469.001 to 469.047. It shall be paid out upon vouchers
275.34signed by the chair of the authority or an authorized representative. The amount of the
276.1levy shall be an amount approved by the governing body of the city, but shall not exceed
276.20.0185 percent of taxable estimated market value. The authority shall each year formulate
276.3and file a budget in accordance with the budget procedure of the city in the same manner as
276.4required of executive departments of the city or, if no budgets are required to be filed, by
276.5August 1. The amount of the tax levy for the following year shall be based on that budget.

276.6    Sec. 76. Minnesota Statutes 2012, section 469.034, subdivision 2, is amended to read:
276.7    Subd. 2. General obligation revenue bonds. (a) An authority may pledge the
276.8general obligation of the general jurisdiction governmental unit as additional security for
276.9bonds payable from income or revenues of the project or the authority. The authority
276.10must find that the pledged revenues will equal or exceed 110 percent of the principal and
276.11interest due on the bonds for each year. The proceeds of the bonds must be used for a
276.12qualified housing development project or projects. The obligations must be issued and
276.13sold in the manner and following the procedures provided by chapter 475, except the
276.14obligations are not subject to approval by the electors, and the maturities may extend to
276.15not more than 35 years for obligations sold to finance housing for the elderly and 40 years
276.16for other obligations issued under this subdivision. The authority is the municipality for
276.17purposes of chapter 475.
276.18    (b) The principal amount of the issue must be approved by the governing body of
276.19the general jurisdiction governmental unit whose general obligation is pledged. Public
276.20hearings must be held on issuance of the obligations by both the authority and the general
276.21jurisdiction governmental unit. The hearings must be held at least 15 days, but not more
276.22than 120 days, before the sale of the obligations.
276.23    (c) The maximum amount of general obligation bonds that may be issued and
276.24outstanding under this section equals the greater of (1) one-half of one percent of the
276.25taxable estimated market value of the general jurisdiction governmental unit whose
276.26general obligation is pledged, or (2) $3,000,000. In the case of county or multicounty
276.27general obligation bonds, the outstanding general obligation bonds of all cities in the
276.28county or counties issued under this subdivision must be added in calculating the limit
276.29under clause (1).
276.30    (d) "General jurisdiction governmental unit" means the city in which the housing
276.31development project is located. In the case of a county or multicounty authority, the
276.32county or counties may act as the general jurisdiction governmental unit. In the case of
276.33a multicounty authority, the pledge of the general obligation is a pledge of a tax on the
276.34taxable property in each of the counties.
277.1    (e) "Qualified housing development project" means a housing development project
277.2providing housing either for the elderly or for individuals and families with incomes not
277.3greater than 80 percent of the median family income as estimated by the United States
277.4Department of Housing and Urban Development for the standard metropolitan statistical
277.5area or the nonmetropolitan county in which the project is located. The project must be
277.6owned for the term of the bonds either by the authority or by a limited partnership or other
277.7entity in which the authority or another entity under the sole control of the authority is
277.8the sole general partner and the partnership or other entity must receive (1) an allocation
277.9from the Department of Management and Budget or an entitlement issuer of tax-exempt
277.10bonding authority for the project and a preliminary determination by the Minnesota
277.11Housing Finance Agency or the applicable suballocator of tax credits that the project
277.12will qualify for four percent low-income housing tax credits or (2) a reservation of nine
277.13percent low-income housing tax credits from the Minnesota Housing Finance Agency or a
277.14suballocator of tax credits for the project. A qualified housing development project may
277.15admit nonelderly individuals and families with higher incomes if:
277.16    (1) three years have passed since initial occupancy;
277.17    (2) the authority finds the project is experiencing unanticipated vacancies resulting in
277.18insufficient revenues, because of changes in population or other unforeseen circumstances
277.19that occurred after the initial finding of adequate revenues; and
277.20    (3) the authority finds a tax levy or payment from general assets of the general
277.21jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher
277.22income individuals or families are not admitted.
277.23    (f) The authority may issue bonds to refund bonds issued under this subdivision in
277.24accordance with section 475.67. The finding of the adequacy of pledged revenues required
277.25by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the
277.26issuance of refunding bonds. This paragraph applies to refunding bonds issued on and
277.27after July 1, 1992.

277.28    Sec. 77. Minnesota Statutes 2012, section 469.053, subdivision 4, is amended to read:
277.29    Subd. 4. Mandatory city levy. A city shall, at the request of the port authority, levy
277.30a tax in any year for the benefit of the port authority. The tax must not exceed 0.01813
277.31percent of taxable estimated market value. The amount levied must be paid by the city
277.32treasurer to the treasurer of the port authority, to be spent by the authority.

277.33    Sec. 78. Minnesota Statutes 2012, section 469.053, subdivision 4a, is amended to read:
278.1    Subd. 4a. Seaway port authority levy. A levy made under this subdivision shall
278.2replace the mandatory city levy under subdivision 4. A seaway port authority is a special
278.3taxing district under section 275.066 and may levy a tax in any year for the benefit of the
278.4seaway port authority. The tax must not exceed 0.01813 percent of taxable estimated
278.5 market value. The county auditor shall distribute the proceeds of the property tax levy to
278.6the seaway port authority.

278.7    Sec. 79. Minnesota Statutes 2012, section 469.053, subdivision 6, is amended to read:
278.8    Subd. 6. Discretionary city levy. Upon request of a port authority, the port
278.9authority's city may levy a tax to be spent by and for its port authority. The tax must
278.10enable the port authority to carry out efficiently and in the public interest sections 469.048
278.11to 469.068 to create and develop industrial development districts. The levy must not be
278.12more than 0.00282 percent of taxable estimated market value. The county treasurer shall
278.13pay the proceeds of the tax to the port authority treasurer. The money may be spent by
278.14the authority in performance of its duties to create and develop industrial development
278.15districts. In spending the money the authority must judge what best serves the public
278.16interest. The levy in this subdivision is in addition to the levy in subdivision 4.

278.17    Sec. 80. Minnesota Statutes 2012, section 469.107, subdivision 1, is amended to read:
278.18    Subdivision 1. City tax levy. A city may, at the request of the authority, levy a tax in
278.19any year for the benefit of the authority. The tax must be not more than 0.01813 percent of
278.20taxable estimated market value. The amount levied must be paid by the city treasurer to
278.21the treasurer of the authority, to be spent by the authority.

278.22    Sec. 81. Minnesota Statutes 2012, section 469.180, subdivision 2, is amended to read:
278.23    Subd. 2. Tax levies. Notwithstanding any law, the county board of any county may
278.24appropriate from the general revenue fund a sum not to exceed a county levy of 0.00080
278.25percent of taxable estimated market value to carry out the purposes of this section.

278.26    Sec. 82. Minnesota Statutes 2012, section 469.187, is amended to read:
278.27469.187 FIRST CLASS CITY SPENDING FOR PUBLICITY; PUBLICITY
278.28BOARD.
278.29    Any city of the first class may expend money for city publicity purposes. The city may
278.30levy a tax, not exceeding 0.00080 percent of taxable estimated market value. The proceeds
278.31of the levy shall be expended in the manner and for the city publicity purposes the council
279.1directs. The council may establish and provide for a publicity board or bureau to administer
279.2the fund, subject to the conditions and limitations the council prescribes by ordinance.

279.3    Sec. 83. Minnesota Statutes 2012, section 469.206, is amended to read:
279.4469.206 HAZARDOUS PROPERTY PENALTY.
279.5    A city may assess a penalty up to one percent of the estimated market value of
279.6real property, including any building located within the city that the city determines to
279.7be hazardous as defined in section 463.15, subdivision 3. The city shall send a written
279.8notice to the address to which the property tax statement is sent at least 90 days before it
279.9may assess the penalty. If the owner of the property has not paid the penalty or fixed the
279.10property within 90 days after receiving notice of the penalty, the penalty is considered
279.11delinquent and is increased by 25 percent each 60 days the penalty is not paid and the
279.12property remains hazardous. For the purposes of this section, a penalty that is delinquent
279.13is considered a delinquent property tax and subject to chapters 279, 280, and 281, in the
279.14same manner as delinquent property taxes.

279.15    Sec. 84. Minnesota Statutes 2012, section 471.24, is amended to read:
279.16471.24 TOWNS, STATUTORY CITIES; JOINT MAINTENANCE OF
279.17CEMETERY.
279.18    Where a statutory city or town owns and maintains an established cemetery or burial
279.19ground, either within or without the municipal limits, the statutory city or town may, by
279.20mutual agreement with contiguous statutory cities and towns, each having a an estimated
279.21 market value of not less than $2,000,000, join together in the maintenance of such public
279.22cemetery or burial ground for the use of the inhabitants of each of such municipalities; and
279.23each such municipality is hereby authorized, by action of its council or governing body,
279.24to levy a tax or make an appropriation for the annual support and maintenance of such
279.25cemetery or burial ground; provided, the amount thus appropriated by each municipality
279.26shall not exceed a total of $10,000 in any one year.

279.27    Sec. 85. Minnesota Statutes 2012, section 471.571, subdivision 1, is amended to read:
279.28    Subdivision 1. Application. This section applies to each city in which the net tax
279.29capacity of real and personal property consists in part of iron ore or lands containing
279.30taconite or semitaconite and in which the total taxable estimated market value of real
279.31and personal property exceeds $2,500,000.

279.32    Sec. 86. Minnesota Statutes 2012, section 471.571, subdivision 2, is amended to read:
280.1    Subd. 2. Creation of fund, tax levy. The governing body of the city may create a
280.2permanent improvement and replacement fund to be maintained by an annual tax levy.
280.3The governing body may levy a tax in excess of any charter limitation for the support of
280.4the permanent improvement and replacement fund, but not exceeding the following:
280.5    (a) in cities having a population of not more than 500 inhabitants, the lesser of $20
280.6per capita or 0.08059 percent of taxable estimated market value;
280.7    (b) in cities having a population of more than 500 and less than 2500 2,500, the
280.8greater of $12.50 per capita or $10,000 but not exceeding 0.08059 percent of taxable
280.9 estimated market value;
280.10    (c) in cities having a population of more than 2500 2,500 or more inhabitants,
280.11the greater of $10 per capita or $31,500 but not exceeding 0.08059 percent of taxable
280.12 estimated market value.

280.13    Sec. 87. Minnesota Statutes 2012, section 471.73, is amended to read:
280.14471.73 ACCEPTANCE OF PROVISIONS.
280.15    In the case of any city within the class specified in section 471.72 having a an
280.16estimated market value, as defined in section 471.72, in excess of $37,000,000; and in the
280.17case of any statutory city within such class having a an estimated market value, as defined
280.18in section 471.72, of less than $5,000,000; and in the case of any statutory city within such
280.19class which is governed by Laws 1933, chapter 211, or Laws 1937, chapter 356; and in
280.20the case of any statutory city within such class which is governed by Laws 1929, chapter
280.21208, and has a an estimated market value of less than $83,000,000; and in the case of
280.22any school district within such class having a an estimated market value, as defined in
280.23section 471.72, of more than $54,000,000; and in the case of all towns within said class;
280.24sections 471.71 to 471.83 apply only if the governing body of the city or statutory city, the
280.25board of the school district, or the town board of the town shall have adopted a resolution
280.26determining to issue bonds under the provisions of sections 471.71 to 471.83 or to go
280.27upon a cash basis in accordance with the provisions thereof.

280.28    Sec. 88. Minnesota Statutes 2012, section 473.325, subdivision 2, is amended to read:
280.29    Subd. 2. Chapter 475 applies; exceptions. The Metropolitan Council shall sell and
280.30issue the bonds in the manner provided in chapter 475, and shall have the same powers
280.31and duties as a municipality issuing bonds under that law, except that the approval of a
280.32majority of the electors shall not be required and the net debt limitations shall not apply.
280.33The terms of each series of bonds shall be fixed so that the amount of principal and interest
280.34on all outstanding and undischarged bonds, together with the bonds proposed to be issued,
281.1due in any year shall not exceed 0.01209 percent of estimated market value of all taxable
281.2property in the metropolitan area as last finally equalized prior to a proposed issue. The
281.3bonds shall be secured in accordance with section 475.61, subdivision 1, and any taxes
281.4required for their payment shall be levied by the council, shall not affect the amount or rate
281.5of taxes which may be levied by the council for other purposes, shall be spread against all
281.6taxable property in the metropolitan area and shall not be subject to limitation as to rate or
281.7amount. Any taxes certified by the council to the county auditors for collection shall be
281.8reduced by the amount received by the council from the commissioner of management and
281.9budget or the federal government for the purpose of paying the principal and interest on
281.10bonds to which the levy relates. The council shall certify the fact and amount of all money
281.11so received to the county auditors, and the auditors shall reduce the levies previously made
281.12for the bonds in the manner and to the extent provided in section 475.61, subdivision 3.

281.13    Sec. 89. Minnesota Statutes 2012, section 473.629, is amended to read:
281.14473.629 VALUE OF PROPERTY FOR BOND ISSUES BY SCHOOL
281.15DISTRICTS.
281.16    As to any lands to be detached from any school district under the provisions hereof
281.17 section 473.625, notwithstanding such prospective the detachment, the estimated market
281.18value of such the detached lands and the net tax capacity of taxable properties now located
281.19therein or thereon shall be and on the lands on the date of the detachment constitute
281.20from and after the date of the enactment hereof a part of the estimated market value of
281.21properties upon the basis of which such used to calculate the net debt limit of the school
281.22district may issue its bonds,. The value of such the lands for such purpose to be and other
281.23taxable properties for purposes of the school district's net debt limit are 33-1/3 percent of
281.24the estimated market value thereof as determined and certified by said the assessor to said
281.25 the school district, and it shall be the duty of such the assessor annually on or before the
281.26tenth day of October from and after the passage hereof, to so of each year, shall determine
281.27and certify that value; provided, however, that the value of such the detached lands and
281.28such taxable properties shall never exceed 20 percent of the estimated market value of
281.29all properties constituting and making up the basis aforesaid used to calculate the net
281.30debt limit of the school district.

281.31    Sec. 90. Minnesota Statutes 2012, section 473.661, subdivision 3, is amended to read:
281.32    Subd. 3. Levy limit. In any budget certified by the commissioners under this section,
281.33the amount included for operation and maintenance shall not exceed an amount which,
281.34when extended against the property taxable therefor under section 473.621, subdivision 5,
282.1will require a levy at a rate of 0.00806 percent of estimated market value. Taxes levied by
282.2the corporation shall not affect the amount or rate of taxes which may be levied by any other
282.3local government unit within the metropolitan area under the provisions of any charter.

282.4    Sec. 91. Minnesota Statutes 2012, section 473.667, subdivision 9, is amended to read:
282.5    Subd. 9. Additional taxes. Nothing herein shall prevent the commission from
282.6levying a tax not to exceed 0.00121 percent of estimated market value on taxable property
282.7within its taxing jurisdiction, in addition to any levies found necessary for the debt
282.8service fund authorized by section 473.671. Nothing herein shall prevent the levy and
282.9appropriation for purposes of the commission of any other tax on property or on any
282.10income, transaction, or privilege, when and if authorized by law. All collections of any
282.11taxes so levied shall be included in the revenues appropriated for the purposes referred
282.12to in this section, unless otherwise provided in the law authorizing the levies; but no
282.13covenant as to the continuance or as to the rate and amount of any such levy shall be made
282.14with the holders of the commission's bonds unless specifically authorized by law.

282.15    Sec. 92. Minnesota Statutes 2012, section 473.671, is amended to read:
282.16473.671 LIMIT OF TAX LEVY.
282.17    The taxes levied against the property of the metropolitan area in any one year shall
282.18not exceed 0.00806 percent of taxable estimated market value, exclusive of taxes levied
282.19to pay the principal or interest on any bonds or indebtedness of the city issued under
282.20Laws 1943, chapter 500, and exclusive of any taxes levied to pay the share of the city for
282.21payments on bonded indebtedness of the corporation provided for in Laws 1943, chapter
282.22500. The levy of taxes authorized in Laws 1943, chapter 500, shall be in addition to the
282.23maximum rate allowed to be levied to defray the cost of government under the provisions
282.24of the charter of any city affected by Laws 1943, chapter 500.

282.25    Sec. 93. Minnesota Statutes 2012, section 473.711, subdivision 2a, is amended to read:
282.26    Subd. 2a. Tax levy. (a) The commission may levy a tax on all taxable property in the
282.27district as defined in section 473.702 to provide funds for the purposes of sections 473.701
282.28to 473.716. The tax shall not exceed the property tax levy limitation determined in this
282.29subdivision. A participating county may agree to levy an additional tax to be used by the
282.30commission for the purposes of sections 473.701 to 473.716 but the sum of the county's and
282.31commission's taxes may not exceed the county's proportionate share of the property tax levy
282.32limitation determined under this subdivision based on the ratio of its total net tax capacity
282.33to the total net tax capacity of the entire district as adjusted by section 270.12, subdivision
283.13 . The auditor of each county in the district shall add the amount of the levy made by the
283.2district to other taxes of the county for collection by the county treasurer with other taxes.
283.3When collected, the county treasurer shall make settlement of the tax with the district in
283.4the same manner as other taxes are distributed to political subdivisions. No county shall
283.5levy any tax for mosquito, disease vectoring tick, and black gnat (Simuliidae) control
283.6except under this section. The levy shall be in addition to other taxes authorized by law.
283.7    (b) The property tax levied by the Metropolitan Mosquito Control Commission shall
283.8not exceed the product of (i) the commission's property tax levy limitation for the previous
283.9year determined under this subdivision multiplied by (ii) an index for market valuation
283.10changes equal to the total estimated market valuation value of all taxable property for the
283.11current tax payable year located within the district plus any area that has been added to the
283.12district since the previous year, divided by the total estimated market valuation value of all
283.13taxable property located within the district for the previous taxes payable year.
283.14    (c) For the purpose of determining the commission's property tax levy limitation
283.15under this subdivision, "total market valuation" means the total market valuation of all
283.16taxable property within the district without valuation adjustments for fiscal disparities
283.17(chapter 473F), tax increment financing (sections 469.174 to 469.179), and high voltage
283.18transmission lines (section 273.425).

283.19    Sec. 94. Minnesota Statutes 2012, section 473F.02, subdivision 12, is amended to read:
283.20    Subd. 12. Adjusted market value. "Adjusted market value" of real and personal
283.21property within a municipality means the assessor's estimated taxable market value,
283.22as defined in section 272.03, of all real and personal property, including the value of
283.23manufactured housing, within the municipality, adjusted for sales ratios in a manner
283.24similar to the adjustments made to city and town net tax capacities. For purposes
283.25of sections 473F.01 to 473F.13, the commissioner of revenue shall annually make
283.26determinations and reports with respect to each municipality which are comparable to
283.27those it makes for school districts under section 127A.48, subdivisions 1 to 6, in the same
283.28manner and at the same times as are prescribed by the subdivisions. The commissioner
283.29of revenue shall annually determine, for each municipality, information comparable to
283.30that required by section 475.53, subdivision 4, for school districts, as soon as practicable
283.31after it becomes available. The commissioner of revenue shall then compute the equalized
283.32market value of property within each municipality using the aggregate sales ratios from
283.33the Department of Revenue's sales ratio study.

283.34    Sec. 95. Minnesota Statutes 2012, section 473F.02, subdivision 14, is amended to read:
284.1    Subd. 14. Fiscal capacity. "Fiscal capacity" of a municipality means its valuation
284.2 adjusted market value, determined as of January 2 of any year, divided by its population,
284.3determined as of a date in the same year.

284.4    Sec. 96. Minnesota Statutes 2012, section 473F.02, subdivision 15, is amended to read:
284.5    Subd. 15. Average fiscal capacity. "Average fiscal capacity" of municipalities
284.6means the sum of the valuations adjusted market values of all municipalities, determined
284.7as of January 2 of any year, divided by the sum of their populations, determined as of
284.8a date in the same year.

284.9    Sec. 97. Minnesota Statutes 2012, section 473F.02, subdivision 23, is amended to read:
284.10    Subd. 23. Net tax capacity. "Net tax capacity" means the taxable market value of
284.11real and personal property multiplied by its net tax capacity rates in section 273.13.

284.12    Sec. 98. Minnesota Statutes 2012, section 473F.08, subdivision 10, is amended to read:
284.13    Subd. 10. Adjustment of value or net tax capacity. For the purpose of computing
284.14the amount or rate of any salary, aid, tax, or debt authorized, required, or limited by any
284.15provision of any law or charter, where such authorization, requirement, or limitation
284.16is related in any manner to any value or valuation of taxable property within any
284.17governmental unit, such value or net tax capacity fiscal capacity under section 473F.02,
284.18subdivision 14, a municipality's taxable market value shall be adjusted to reflect the
284.19adjustments reductions to net tax capacity effected by subdivision 2, clause (a), provided
284.20that: (1) in determining the taxable market value of commercial-industrial property
284.21or any class thereof within a governmental unit for any purpose other than section
284.22473F.07 municipality, (a) the reduction required by this subdivision shall be that amount
284.23which bears the same proportion to the amount subtracted from the governmental unit's
284.24 municipality's net tax capacity pursuant to subdivision 2, clause (a), as the taxable
284.25market value of commercial-industrial property, or such class thereof, located within the
284.26governmental unit municipality bears to the net tax capacity of commercial-industrial
284.27property, or such class thereof, located within the governmental unit, and (b) the increase
284.28required by this subdivision shall be that amount which bears the same proportion to
284.29the amount added to the governmental unit's net tax capacity pursuant to subdivision 2,
284.30clause (b), as the market value of commercial-industrial property, or such class thereof,
284.31located within the governmental unit bears to the net tax capacity of commercial-industrial
284.32property, or such class thereof, located within the governmental unit; and (2) in determining
284.33the market value of real property within a municipality for purposes of section 473F.07,
285.1the adjustment prescribed by clause (1)(a) hereof shall be made and that prescribed by
285.2clause (1)(b) hereof shall not be made municipality. No adjustment shall be made to
285.3taxable market value for the increase in net tax capacity under subdivision 2, clause (b).

285.4    Sec. 99. Minnesota Statutes 2012, section 475.521, subdivision 4, is amended to read:
285.5    Subd. 4. Limitations on amount. A municipality may not issue bonds under this
285.6section if the maximum amount of principal and interest to become due in any year on
285.7all the outstanding bonds issued under this section, including the bonds to be issued,
285.8will equal or exceed 0.16 percent of the taxable estimated market value of property
285.9in the municipality. Calculation of the limit must be made using the taxable estimated
285.10 market value for the taxes payable year in which the obligations are issued and sold. In
285.11the case of a municipality with a population of 2,500 or more, the bonds are subject to
285.12the net debt limits under section 475.53. In the case of a shared facility in which more
285.13than one municipality participates, upon compliance by each participating municipality
285.14with the requirements of subdivision 2, the limitations in this subdivision and the net debt
285.15represented by the bonds shall be allocated to each participating municipality in proportion
285.16to its required financial contribution to the financing of the shared facility, as set forth in
285.17the joint powers agreement relating to the shared facility. This section does not limit the
285.18authority to issue bonds under any other special or general law.

285.19    Sec. 100. Minnesota Statutes 2012, section 475.53, subdivision 1, is amended to read:
285.20    Subdivision 1. Generally. Except as otherwise provided in sections 475.51 to
285.21475.74 , no municipality, except a school district or a city of the first class, shall incur or be
285.22subject to a net debt in excess of three percent of the estimated market value of taxable
285.23property in the municipality.

285.24    Sec. 101. Minnesota Statutes 2012, section 475.53, subdivision 3, is amended to read:
285.25    Subd. 3. Cities first class. Unless its charter permits a greater net debt a city of
285.26the first class may not incur a net debt in excess of two percent of the estimated market
285.27value of all taxable property therein. If the charter of the city permits a net debt of the city
285.28in excess of two percent of its valuation, it may not incur a net debt in excess of 3-2/3
285.29percent of the estimated market value of the taxable property therein.
285.30    The county auditor, at the time of preparing the tax list of the city, shall compile a
285.31statement setting forth the total net tax capacity and the total estimated market value of
285.32each class of taxable property in such city for such year.

286.1    Sec. 102. Minnesota Statutes 2012, section 475.53, subdivision 4, is amended to read:
286.2    Subd. 4. School districts. Except as otherwise provided by law, no school district
286.3shall be subject to a net debt in excess of 15 percent of the actual estimated market value of
286.4all taxable property situated within its corporate limits, as computed in accordance with this
286.5subdivision. The county auditor of each county containing taxable real or personal property
286.6situated within any school district shall certify to the district upon request the estimated
286.7market value of all such property. Whenever the commissioner of revenue, in accordance
286.8with section 127A.48, subdivisions 1 to 6, has determined that the net tax capacity of any
286.9district furnished by county auditors is not based upon the adjusted market value of taxable
286.10property in the district exceeds the estimated market value of property within the district,
286.11the commissioner of revenue shall certify to the district upon request the ratio most recently
286.12ascertained to exist between such the estimated market value and the actual adjusted
286.13 market value of property within the district., and the actual market value of property
286.14within a district, on which its debt limit under this subdivision is will be based, is (a) the
286.15value certified by the county auditors, or (b) this on the estimated market value divided by
286.16the ratio certified by the commissioner of revenue, whichever results in a higher value.

286.17    Sec. 103. Minnesota Statutes 2012, section 475.58, subdivision 2, is amended to read:
286.18    Subd. 2. Funding, refunding. Any county, city, town, or school district whose
286.19outstanding gross debt, including all items referred to in section 475.51, subdivision
286.204 , exceed in amount 1.62 percent of its estimated market value may issue bonds under
286.21this subdivision for the purpose of funding or refunding such indebtedness or any part
286.22thereof. A list of the items of indebtedness to be funded or refunded shall be made by the
286.23recording officer and treasurer and filed in the office of the recording officer. The initial
286.24resolution of the governing body shall refer to this subdivision as authority for the issue,
286.25state the amount of bonds to be issued and refer to the list of indebtedness to be funded or
286.26refunded. This resolution shall be published once each week for two successive weeks
286.27in a legal newspaper published in the municipality or if there be no such newspaper, in
286.28a legal newspaper published in the county seat. Such bonds may be issued without the
286.29submission of the question of their issue to the electors unless within ten days after the
286.30second publication of the resolution a petition requesting such election signed by ten or
286.31more voters who are taxpayers of the municipality, shall be filed with the recording officer.
286.32In event such petition is filed, no bonds shall be issued hereunder unless authorized by a
286.33majority of the electors voting on the question.

286.34    Sec. 104. Minnesota Statutes 2012, section 475.73, subdivision 1, is amended to read:
287.1    Subdivision 1. May purchase these bonds; conditions. Obligations sold under the
287.2provisions of section 475.60 may be purchased by the State Board of Investment if the
287.3obligations meet the requirements of section 11A.24, subdivision 2, upon the approval of
287.4the attorney general as to form and execution of the application therefor, and under rules
287.5as the board may specify, and the state board shall have authority to purchase the same
287.6to an amount not exceeding 3.63 percent of the estimated market value of the taxable
287.7property of the municipality, according to the last preceding assessment. The obligations
287.8shall not run for a shorter period than one year, nor for a longer period than 30 years and
287.9shall bear interest at a rate to be fixed by the state board but not less than two percent per
287.10annum. Forthwith upon the delivery to the state of Minnesota of any obligations issued by
287.11virtue thereof, the commissioner of management and budget shall certify to the respective
287.12auditors of the various counties wherein are situated the municipalities issuing the same,
287.13the number, denomination, amount, rate of interest and date of maturity of each obligation.

287.14    Sec. 105. Minnesota Statutes 2012, section 477A.011, subdivision 20, is amended to
287.15read:
287.16    Subd. 20. City net tax capacity. "City net tax capacity" means (1) the net tax
287.17capacity computed using the net tax capacity rates in section 273.13 for taxes payable
287.18in the year of the aid distribution, and the market values, after the exclusion in section
287.19273.13, subdivision 35, for taxes payable in the year prior to the aid distribution plus (2)
287.20a city's fiscal disparities distribution tax capacity under section 276A.06, subdivision 2,
287.21paragraph (b), or 473F.08, subdivision 2, paragraph (b), for taxes payable in the year prior
287.22to that for which aids are being calculated. The market value utilized in computing city
287.23net tax capacity shall be reduced by the sum of (1) a city's market value of commercial
287.24industrial property as defined in section 276A.01, subdivision 3, or 473F.02, subdivision 3,
287.25multiplied by the ratio determined pursuant to section 276A.06, subdivision 2, paragraph
287.26(a), or 473F.08, subdivision 2, paragraph (a), (2) the market value of the captured value
287.27of tax increment financing districts as defined in section 469.177, subdivision 2, and (3)
287.28the market value of transmission lines deducted from a city's total net tax capacity under
287.29section 273.425. The city net tax capacity will be computed using equalized market values
287.30 the city's adjusted net tax capacity under section 273.1325.
287.31EFFECTIVE DATE.This section is effective the day following final enactment.

287.32    Sec. 106. Minnesota Statutes 2012, section 477A.011, subdivision 32, is amended to
287.33read:
288.1    Subd. 32. Commercial industrial percentage. "Commercial industrial percentage"
288.2for a city is 100 times the sum of the estimated market values of all real property in the
288.3city classified as class 3 under section 273.13, subdivision 24, excluding public utility
288.4property, to the total estimated market value of all taxable real and personal property in
288.5the city. The estimated market values are the amounts computed before any adjustments
288.6for fiscal disparities under section 276A.06 or 473F.08. The estimated market values
288.7used for this subdivision are not equalized.
288.8EFFECTIVE DATE.This section is effective for aids payable in 2014 and thereafter.

288.9    Sec. 107. Minnesota Statutes 2012, section 477A.0124, subdivision 2, is amended to
288.10read:
288.11    Subd. 2. Definitions. (a) For the purposes of this section, the following terms
288.12have the meanings given them.
288.13    (b) "County program aid" means the sum of "county need aid," "county tax base
288.14equalization aid," and "county transition aid."
288.15    (c) "Age-adjusted population" means a county's population multiplied by the county
288.16age index.
288.17    (d) "County age index" means the percentage of the population over age 65 within
288.18the county divided by the percentage of the population over age 65 within the state, except
288.19that the age index for any county may not be greater than 1.8 nor less than 0.8.
288.20    (e) "Population over age 65" means the population over age 65 established as of
288.21July 15 in an aid calculation year by the most recent federal census, by a special census
288.22conducted under contract with the United States Bureau of the Census, by a population
288.23estimate made by the Metropolitan Council, or by a population estimate of the state
288.24demographer made pursuant to section 4A.02, whichever is the most recent as to the stated
288.25date of the count or estimate for the preceding calendar year and which has been certified
288.26to the commissioner of revenue on or before July 15 of the aid calculation year. A revision
288.27to an estimate or count is effective for these purposes only if certified to the commissioner
288.28on or before July 15 of the aid calculation year. Clerical errors in the certification or use of
288.29estimates and counts established as of July 15 in the aid calculation year are subject to
288.30correction within the time periods allowed under section 477A.014.
288.31    (f) "Part I crimes" means the three-year average annual number of Part I crimes
288.32reported for each county by the Department of Public Safety for the most recent years
288.33available. By July 1 of each year, the commissioner of public safety shall certify to the
288.34commissioner of revenue the number of Part I crimes reported for each county for the
288.35three most recent calendar years available.
289.1    (g) "Households receiving food stamps" means the average monthly number of
289.2households receiving food stamps for the three most recent years for which data is
289.3available. By July 1 of each year, the commissioner of human services must certify to the
289.4commissioner of revenue the average monthly number of households in the state and in
289.5each county that receive food stamps, for the three most recent calendar years available.
289.6    (h) "County net tax capacity" means the net tax capacity of the county, computed
289.7analogously to city net tax capacity under section 477A.011, subdivision 20 county's
289.8adjusted net tax capacity under section 273.1325.
289.9EFFECTIVE DATE.This section is effective the day following final enactment.

289.10    Sec. 108. Minnesota Statutes 2012, section 641.23, is amended to read:
289.11641.23 FUNDS; HOW PROVIDED.
289.12    Before any contract is made for the erection of a county jail, sheriff's residence, or
289.13both, the county board shall either levy a sufficient tax to provide the necessary funds, or
289.14issue county bonds therefor in accordance with the provisions of chapter 475, provided
289.15that no election is required if the amount of all bonds issued for this purpose and interest
289.16on them which are due and payable in any year does not exceed an amount equal to
289.170.09671 percent of estimated market value of taxable property within the county, as last
289.18determined before the bonds are issued.

289.19    Sec. 109. Minnesota Statutes 2012, section 641.24, is amended to read:
289.20641.24 LEASING.
289.21    The county may, by resolution of the county board, enter into a lease agreement with
289.22any statutory or home rule charter city situated within the county, or a county housing and
289.23redevelopment authority established pursuant to chapter 469 or any special law whereby
289.24the city or county housing and redevelopment authority will construct a jail or other law
289.25enforcement facilities for the county sheriff, deputy sheriffs, and other employees of the
289.26sheriff and other law enforcement agencies, in accordance with plans prepared by or at
289.27the request of the county board and, when required, approved by the commissioner of
289.28corrections and will finance it by the issuance of revenue bonds, and the county may lease
289.29the site and improvements for a term and upon rentals sufficient to produce revenue for the
289.30prompt payment of the bonds and all interest accruing thereon and, upon completion of
289.31payment, will acquire title thereto. The real and personal property acquired for the jail
289.32shall constitute a project and the lease agreement shall constitute a revenue agreement
289.33as contemplated in chapter 469, and all proceedings shall be taken by the city or county
290.1housing and redevelopment authority and the county in the manner and with the force and
290.2effect provided in chapter 469; provided that:
290.3    (1) no tax shall be imposed upon or in lieu of a tax upon the property;
290.4    (2) the approval of the project by the commissioner of commerce shall not be required;
290.5    (3) the Department of Corrections shall be furnished and shall record such
290.6information concerning each project as it may prescribe;
290.7    (4) the rentals required to be paid under the lease agreement shall not exceed in any
290.8year one-tenth of one percent of the estimated market value of property within the county,
290.9as last finally equalized before the execution of the agreement;
290.10    (5) the county board shall provide for the payment of all rentals due during the term
290.11of the lease, in the manner required in section 641.264, subdivision 2;
290.12    (6) no mortgage on the property shall be granted for the security of the bonds, but
290.13compliance with clause (5) hereof may be enforced as a nondiscretionary duty of the
290.14county board; and
290.15    (7) the county board may sublease any part of the jail property for purposes consistent
290.16with the maintenance and operation of a county jail or other law enforcement facility.

290.17    Sec. 110. Minnesota Statutes 2012, section 645.44, is amended by adding a subdivision
290.18to read:
290.19    Subd. 20. Estimated market value. When used in determining or calculating a
290.20limit on taxation, spending, state aid amounts, or debt, bond, certificate of indebtedness, or
290.21capital note issuance by or for a local government unit, "estimated market value" has the
290.22meaning given in section 273.032.

290.23    Sec. 111. REVISOR'S INSTRUCTION.
290.24    The revisor of statutes shall recodify Minnesota Statutes, section 127.48,
290.25subdivisions 1 to 6, as section 273.1325, subdivisions 1 to 6, and change all
290.26cross-references to the affected subdivisions accordingly.
290.27EFFECTIVE DATE.This section is effective the day following final enactment.

290.28    Sec. 112. REPEALER.
290.29Minnesota Statutes 2012, sections 276A.01, subdivision 11; 473F.02, subdivision
290.3013; and 477A.011, subdivision 21, are repealed.

290.31    Sec. 113. EFFECTIVE DATE.
291.1    Unless otherwise specifically provided, this article is effective the day following
291.2final enactment for purposes of limits on net debt, the issuance of bonds, certificates of
291.3indebtedness, and capital notes and is effective beginning for taxes payable in 2014 for
291.4all other purposes.


291.8    Section 1. Minnesota Statutes 2012, section 289A.10, is amended by adding a
291.9subdivision to read:
291.10    Subd. 1a. Recapture tax return required. If a disposition or cessation as provided
291.11by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as
291.12defined under section 291.03, subdivision 8, paragraph (c), or personal representative of
291.13the decedent's estate must submit a recapture tax return to the commissioner.
291.14EFFECTIVE DATE.This section is effective for estates of decedents dying after
291.15June 30, 2011.

291.16    Sec. 2. Minnesota Statutes 2012, section 289A.12, subdivision 14, is amended to read:
291.17    Subd. 14. Regulated investment companies; reporting exempt-interest
291.18dividends. (a) A regulated investment company paying $10 or more in exempt-interest
291.19dividends to an individual who is a resident of Minnesota must make a return indicating
291.20the amount of the exempt-interest dividends, the name, address, and Social Security
291.21number of the recipient, and any other information that the commissioner specifies. The
291.22return must be provided to the shareholder by February 15 of the year following the year
291.23of the payment. The return provided to the shareholder must include a clear statement,
291.24in the form prescribed by the commissioner, that the exempt-interest dividends must be
291.25included in the computation of Minnesota taxable income. By June 1 of each year, the
291.26regulated investment company must file a copy of the return with the commissioner.
291.27    (b) This subdivision applies to regulated investment companies required to register
291.28under chapter 80A.
291.29    (c) (b) For purposes of this subdivision, the following definitions apply.
291.30    (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
291.31section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
291.32exempt-interest dividends that are not required to be added to federal taxable income
291.33under section 290.01, subdivision 19a, clause (1)(ii).
292.1    (2) "Regulated investment company" means regulated investment company as
292.2defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
292.3investment company as defined in section 851(g) of the Internal Revenue Code.
292.4EFFECTIVE DATE.This section is effective the day following final enactment.

292.5    Sec. 3. Minnesota Statutes 2012, section 289A.12, is amended by adding a subdivision
292.6to read:
292.7    Subd. 18. Returns by qualified heirs. A qualified heir, as defined in section 291.03,
292.8subdivision 8, paragraph (c), must file two returns with the commissioner attesting that
292.9no disposition or cessation as provided by section 291.03, subdivision 11, paragraph
292.10(a), occurred. The first return must be filed no earlier than 24 months and no later than
292.1126 months after the decedent's death. The second return must be filed no earlier than 36
292.12months and no later than 39 months after the decedent's death.
292.13EFFECTIVE DATE.This section is effective for returns required to be filed after
292.14December 31, 2013.

292.15    Sec. 4. Minnesota Statutes 2012, section 289A.18, is amended by adding a subdivision
292.16to read:
292.17    Subd. 3a. Recapture tax return. A recapture tax return must be filed with the
292.18commissioner within six months after the date of the disposition or cessation as provided
292.19by section 291.03, subdivision 11, paragraph (a).
292.20EFFECTIVE DATE.This section is effective for estates of decedents dying after
292.21June 30, 2011.

292.22    Sec. 5. Minnesota Statutes 2012, section 289A.20, subdivision 3, is amended to read:
292.23    Subd. 3. Estate tax. Taxes imposed by chapter 291 section 291.03, subdivision 1,
292.24 take effect at and upon the death of the person whose estate is subject to taxation and are
292.25due and payable on or before the expiration of nine months from that death.
292.26EFFECTIVE DATE.This section is effective for estates of decedents dying after
292.27June 30, 2011.

292.28    Sec. 6. Minnesota Statutes 2012, section 289A.20, is amended by adding a subdivision
292.29to read:
293.1    Subd. 3a. Recapture tax. The additional estate tax imposed by section 291.03,
293.2subdivision 11, paragraph (b), is due and payable on or before the expiration of the date
293.3provided by section 291.03, subdivision 11, paragraph (c).
293.4EFFECTIVE DATE.This section is effective for estates of decedents dying after
293.5June 30, 2011.

293.6    Sec. 7. Minnesota Statutes 2012, section 289A.26, subdivision 3, is amended to read:
293.7    Subd. 3. Short taxable year. (a) A corporation or an entity with a short taxable year
293.8of less than 12 months, but at least four months, must pay estimated tax in equal installments
293.9on or before the 15th day of the third, sixth, ninth, and final month of the short taxable
293.10year, to the extent applicable based on the number of months in the short taxable year.
293.11(b) A corporation or an entity is not required to make estimated tax payments for a
293.12short taxable year unless its tax liability before the first day of the last month of the taxable
293.13year can reasonably be expected to exceed $500.
293.14(c) No payment is required for a short taxable year of less than four months.
293.15EFFECTIVE DATE.This section is effective the day following final enactment.

293.16    Sec. 8. Minnesota Statutes 2012, section 289A.26, subdivision 4, is amended to read:
293.17    Subd. 4. Underpayment of estimated tax. If there is an underpayment of estimated
293.18tax by a corporation or an entity, there shall be added to the tax for the taxable year an
293.19amount determined at the rate in section 270C.40 on the amount of the underpayment,
293.20determined under subdivision 5, for the period of the underpayment determined under
293.21subdivision 6. This subdivision does not apply in the first taxable year that a corporation is
293.22subject to the tax imposed under section 290.02 or an entity is subject to the tax imposed
293.23under section 290.05, subdivision 3.
293.24EFFECTIVE DATE.This section is effective the day following final enactment.

293.25    Sec. 9. Minnesota Statutes 2012, section 289A.26, subdivision 7, is amended to read:
293.26    Subd. 7. Required installments. (a) Except as otherwise provided in this
293.27subdivision, the amount of a required installment is 25 percent of the required annual
293.28payment.
293.29(b) Except as otherwise provided in this subdivision, the term "required annual
293.30payment" means the lesser of:
293.31(1) 100 percent of the tax shown on the return for the taxable year, or, if no return is
293.32filed, 100 percent of the tax for that year; or
294.1(2) 100 percent of the tax shown on the return of the corporation or entity for the
294.2preceding taxable year provided the return was for a full 12-month period, showed a
294.3liability, and was filed by the corporation or entity.
294.4(c) Except for determining the first required installment for any taxable year,
294.5paragraph (b), clause (2), does not apply in the case of a large corporation. The term
294.6"large corporation" means a corporation or any predecessor corporation that had taxable
294.7net income of $1,000,000 or more for any taxable year during the testing period. The
294.8term "testing period" means the three taxable years immediately preceding the taxable
294.9year involved. A reduction allowed to a large corporation for the first installment that is
294.10allowed by applying paragraph (b), clause (2), must be recaptured by increasing the next
294.11required installment by the amount of the reduction.
294.12(d) In the case of a required installment, if the corporation or entity establishes that
294.13the annualized income installment is less than the amount determined in paragraph (a), the
294.14amount of the required installment is the annualized income installment and the recapture
294.15of previous quarters' reductions allowed by this paragraph must be recovered by increasing
294.16later required installments to the extent the reductions have not previously been recovered.
294.17(e) The "annualized income installment" is the excess, if any, of:
294.18(1) an amount equal to the applicable percentage of the tax for the taxable year
294.19computed by placing on an annualized basis the taxable income:
294.20(i) for the first two months of the taxable year, in the case of the first required
294.21installment;
294.22(ii) for the first two months or for the first five months of the taxable year, in the
294.23case of the second required installment;
294.24(iii) for the first six months or for the first eight months of the taxable year, in the
294.25case of the third required installment; and
294.26(iv) for the first nine months or for the first 11 months of the taxable year, in the
294.27case of the fourth required installment, over
294.28(2) the aggregate amount of any prior required installments for the taxable year.
294.29(3) For the purpose of this paragraph, the annualized income shall be computed
294.30by placing on an annualized basis the taxable income for the year up to the end of the
294.31month preceding the due date for the quarterly payment multiplied by 12 and dividing
294.32the resulting amount by the number of months in the taxable year (2, 5, 6, 8, 9, or 11 as
294.33the case may be) referred to in clause (1).
294.34(4) The "applicable percentage" used in clause (1) is:

295.1 295.2 295.3		For the following required installments:			The applicable percentage is:
295.4			1st		25
295.5			2nd		50
295.6			3rd		75
295.7			4th		100

295.8(f)(1) If this paragraph applies, the amount determined for any installment must
295.9be determined in the following manner:
295.10(i) take the taxable income for the months during the taxable year preceding the
295.11filing month;
295.12(ii) divide that amount by the base period percentage for the months during the
295.13taxable year preceding the filing month;
295.14(iii) determine the tax on the amount determined under item (ii); and
295.15(iv) multiply the tax computed under item (iii) by the base period percentage for the
295.16filing month and the months during the taxable year preceding the filing month.
295.17(2) For purposes of this paragraph:
295.18(i) the "base period percentage" for a period of months is the average percent that the
295.19taxable income for the corresponding months in each of the three preceding taxable years
295.20bears to the taxable income for the three preceding taxable years;
295.21(ii) the term "filing month" means the month in which the installment is required
295.22to be paid;
295.23(iii) this paragraph only applies if the base period percentage for any six consecutive
295.24months of the taxable year equals or exceeds 70 percent; and
295.25(iv) the commissioner may provide by rule for the determination of the base period
295.26percentage in the case of reorganizations, new corporations or entities, and other similar
295.27circumstances.
295.28(3) In the case of a required installment determined under this paragraph, if the
295.29 corporation or entity determines that the installment is less than the amount determined in
295.30paragraph (a), the amount of the required installment is the amount determined under this
295.31paragraph and the recapture of previous quarters' reductions allowed by this paragraph
295.32must be recovered by increasing later required installments to the extent the reductions
295.33have not previously been recovered.
295.34EFFECTIVE DATE.This section is effective the day following final enactment.

295.35    Sec. 10. Minnesota Statutes 2012, section 289A.26, subdivision 9, is amended to read:
296.1    Subd. 9. Failure to file an estimate. In the case of a corporation or an entity
296.2that fails to file an estimated tax for a taxable year when one is required, the period of
296.3the underpayment runs from the four installment dates in subdivision 2 or 3, whichever
296.4applies, to the earlier of the periods in subdivision 6, clauses (1) and (2).
296.5EFFECTIVE DATE.This section is effective the day following final enactment.

296.6    Sec. 11. Minnesota Statutes 2012, section 290.9705, subdivision 1, is amended to read:
296.7    Subdivision 1. Withholding of payments to out-of-state contractors. (a) In this
296.8section, "person" means a person, corporation, or cooperative, the state of Minnesota and
296.9its political subdivisions, and a city, county, and school district in Minnesota.
296.10(b) A person who in the regular course of business is hiring, contracting, or having a
296.11contract with a nonresident person or foreign corporation, as defined in Minnesota Statutes
296.121986, section 290.01, subdivision 5, to perform construction work in Minnesota, shall
296.13deduct and withhold eight percent of cumulative calendar year payments made to the
296.14contractor which exceed if the value of the contract exceeds $50,000.
296.15EFFECTIVE DATE.This section is effective for payments made to contractors
296.16after December 31, 2013.


296.19    Section 1. Minnesota Statutes 2012, section 287.20, is amended by adding a
296.20subdivision to read:
296.21    Subd. 11. Partition. "Partition" means the division by conveyance of real property
296.22that is held jointly or in common by two or more persons into individually owned interests.
296.23If one of the co-owners gives consideration for all or a part of the individually owned
296.24interest conveyed to them, that portion of the conveyance is not a part of the partition.
296.25EFFECTIVE DATE.This section is effective the day following final enactment.

296.26    Sec. 2. Minnesota Statutes 2012, section 289A.20, subdivision 4, is amended to read:
296.27    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and
296.28payable to the commissioner monthly on or before the 20th day of the month following
296.29the month in which the taxable event occurred, or following another reporting period
296.30as the commissioner prescribes or as allowed under section 289A.18, subdivision 4,
296.31paragraph (f) or (g), except that:
297.1(1) use taxes due on an annual use tax return as provided under section 289A.11,
297.2subdivision 1 , are payable by April 15 following the close of the calendar year; and.
297.3(2) except as provided in paragraph (f), for a vendor having a liability of $120,000
297.4or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the taxes
297.5imposed by chapter 297A, except as provided in paragraph (b), are due and payable to the
297.6commissioner monthly in the following manner:
297.7(i) On or before the 14th day of the month following the month in which the taxable
297.8event occurred, the vendor must remit to the commissioner 90 percent of the estimated
297.9liability for the month in which the taxable event occurred.
297.10(ii) On or before the 20th day of the month in which the taxable event occurs, the
297.11vendor must remit to the commissioner a prepayment for the month in which the taxable
297.12event occurs equal to 67 percent of the liability for the previous month.
297.13(iii) On or before the 20th day of the month following the month in which the taxable
297.14event occurred, the vendor must pay any additional amount of tax not previously remitted
297.15under either item (i) or (ii ) or, if the payment made under item (i) or (ii) was greater than
297.16the vendor's liability for the month in which the taxable event occurred, the vendor may
297.17take a credit against the next month's liability in a manner prescribed by the commissioner.
297.18(iv) Once the vendor first pays under either item (i) or (ii), the vendor is required to
297.19continue to make payments in the same manner, as long as the vendor continues having a
297.20liability of $120,000 or more during the most recent fiscal year ending June 30.
297.21(v) Notwithstanding items (i), (ii), and (iv), if a vendor fails to make the required
297.22payment in the first month that the vendor is required to make a payment under either item
297.23(i) or (ii), then the vendor is deemed to have elected to pay under item (ii) and must make
297.24subsequent monthly payments in the manner provided in item (ii).
297.25(vi) For vendors making an accelerated payment under item (ii), for the first month
297.26that the vendor is required to make the accelerated payment, on the 20th of that month, the
297.27vendor will pay 100 percent of the liability for the previous month and a prepayment for
297.28the first month equal to 67 percent of the liability for the previous month.
297.29    (b) Notwithstanding paragraph (a), A vendor having a liability of $120,000 or more
297.30during a fiscal year ending June 30 must remit the June liability for the next year in the
297.31following manner:
297.32    (1) Two business days before June 30 of the year, the vendor must remit 90 percent
297.33of the estimated June liability to the commissioner.
297.34    (2) On or before August 20 of the year, the vendor must pay any additional amount
297.35of tax not remitted in June.
297.36    (c) A vendor having a liability of:
298.1    (1) $10,000 or more, but less than $120,000 during a fiscal year ending June 30,
298.22009, and fiscal years thereafter, must remit by electronic means all liabilities on returns
298.3due for periods beginning in the subsequent calendar year on or before the 20th day of
298.4the month following the month in which the taxable event occurred, or on or before the
298.520th day of the month following the month in which the sale is reported under section
298.6289A.18, subdivision 4 ; or
298.7(2) $120,000 or more, during a fiscal year ending June 30, 2009, and fiscal years
298.8thereafter, must remit by electronic means all liabilities in the manner provided in
298.9paragraph (a), clause (2), on returns due for periods beginning in the subsequent calendar
298.10year, except for 90 percent of the estimated June liability, which is due two business days
298.11before June 30. The remaining amount of the June liability is due on August 20.
298.12(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
298.13religious beliefs from paying electronically shall be allowed to remit the payment by mail.
298.14The filer must notify the commissioner of revenue of the intent to pay by mail before
298.15doing so on a form prescribed by the commissioner. No extra fee may be charged to a
298.16person making payment by mail under this paragraph. The payment must be postmarked
298.17at least two business days before the due date for making the payment in order to be
298.18considered paid on a timely basis.
298.19(e) Whenever the liability is $120,000 or more separately for: (1) the tax imposed
298.20under chapter 297A; (2) a fee that is to be reported on the same return as and paid with the
298.21chapter 297A taxes; or (3) any other tax that is to be reported on the same return as and
298.22paid with the chapter 297A taxes, then the payment of all the liabilities on the return must
298.23be accelerated as provided in this subdivision.
298.24(f) At the start of the first calendar quarter at least 90 days after the cash flow account
298.25established in section 16A.152, subdivision 1, and the budget reserve account established in
298.26section 16A.152, subdivision 1a, reach the amounts listed in section 16A.152, subdivision
298.272 , paragraph (a), the remittance of the accelerated payments required under paragraph (a),
298.28clause (2), must be suspended. The commissioner of management and budget shall notify
298.29the commissioner of revenue when the accounts have reached the required amounts.
298.30Beginning with the suspension of paragraph (a), clause (2), for a vendor with a liability of
298.31$120,000 or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the
298.32taxes imposed by chapter 297A are due and payable to the commissioner on the 20th day
298.33of the month following the month in which the taxable event occurred. Payments of tax
298.34liabilities for taxable events occurring in June under paragraph (b) are not changed.
298.35EFFECTIVE DATE.This section is effective the day following final enactment.

299.1    Sec. 3. Minnesota Statutes 2012, section 297A.665, is amended to read:
299.2297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
299.3    (a) For the purpose of the proper administration of this chapter and to prevent
299.4evasion of the tax, until the contrary is established, it is presumed that:
299.5    (1) all gross receipts are subject to the tax; and
299.6    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
299.7in Minnesota.
299.8    (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
299.9However, a seller is relieved of liability if:
299.10    (1) the seller obtains a fully completed exemption certificate or all the relevant
299.11information required by section 297A.72, subdivision 2, at the time of the sale or within
299.1290 days after the date of the sale; or
299.13    (2) if the seller has not obtained a fully completed exemption certificate or all the
299.14relevant information required by section 297A.72, subdivision 2, within the time provided
299.15in clause (1), within 120 days after a request for substantiation by the commissioner,
299.16the seller either:
299.17    (i) obtains in good faith from the purchaser a fully completed exemption certificate
299.18or all the relevant information required by section 297A.72, subdivision 2, from the
299.19purchaser taken in good faith which means that the exemption certificate claims an
299.20exemption that (A) was statutorily available on the date of the transaction, (B) could be
299.21applicable to the item for which the exemption is claimed, and (C) is reasonable for the
299.22purchaser's type of business; or
299.23    (ii) proves by other means that the transaction was not subject to tax.
299.24    (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
299.25    (1) fraudulently fails to collect the tax; or
299.26    (2) solicits purchasers to participate in the unlawful claim of an exemption.
299.27(d) Notwithstanding paragraph (b), relief from liability does not apply to a seller
299.28who has obtained information under paragraph (b), clause (2), if through the audit process
299.29the commissioner finds the following:
299.30(1) that at the time the information was provided the seller had knowledge or had
299.31reason to know that the information relating to the exemption was materially false; or
299.32(2) that the seller knowingly participated in activity intended to purposefully evade
299.33the sales tax due on the transaction.
299.34    (d) (e) A certified service provider, as defined in section 297A.995, subdivision 2, is
299.35relieved of liability under this section to the extent a seller who is its client is relieved of
299.36liability.
300.1    (e) (f) A purchaser of tangible personal property or any items listed in section 297A.63
300.2that are shipped or brought to Minnesota by the purchaser has the burden of proving that the
300.3property was not purchased from a retailer for storage, use, or consumption in Minnesota.
300.4(f) (g) If a seller claims that certain sales are exempt and does not provide the
300.5certificate, information, or proof required by paragraph (b), clause (2), within 120 days
300.6after the date of the commissioner's request for substantiation, then the exemptions
300.7claimed by the seller that required substantiation are disallowed.
300.8EFFECTIVE DATE.This section is effective retroactively from January 1, 2013.

300.9    Sec. 4. Minnesota Statutes 2012, section 297F.01, subdivision 23, is amended to read:
300.10    Subd. 23. Wholesale sales price. "Wholesale sales price" means the price stated
300.11on the price list in effect at the time of sale for which a manufacturer or person sells a
300.12tobacco product to a distributor, exclusive of any discount, promotional offer, or other
300.13reduction. For purposes of this subdivision, "price list" means the manufacturer's price at
300.14which tobacco products are made available for sale to all distributors on an ongoing basis
300.15 at which a distributor purchases a tobacco product. Wholesale sales price includes the
300.16applicable federal excise tax, freight charges, or packaging costs, regardless of whether
300.17they were included in the purchase price.
300.18EFFECTIVE DATE.This section is effective for purchases made after December
300.1931, 2013.

300.20    Sec. 5. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read:
300.21    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages
300.22is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year
300.23beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
300.24take the credit on the 18th day of each month, but the total credit allowed may not exceed
300.25in any fiscal year the lesser of:
300.26(1) the liability for tax; or
300.27(2) $115,000.
300.28For purposes of this subdivision, a "qualified brewer" means a brewer, whether
300.29or not located in this state, manufacturing less than 100,000 barrels of fermented malt
300.30beverages in the calendar year immediately preceding the calendar fiscal year for which
300.31the credit under this subdivision is claimed. In determining the number of barrels, all
300.32brands or labels of a brewer must be combined. All facilities for the manufacture of
301.1fermented malt beverages owned or controlled by the same person, corporation, or other
301.2entity must be treated as a single brewer.
301.3EFFECTIVE DATE.This section is effective the day following final enactment.

301.4    Sec. 6. Minnesota Statutes 2012, section 297I.05, subdivision 7, is amended to read:
301.5    Subd. 7. Nonadmitted insurance premium tax. (a) A tax is imposed on surplus
301.6lines brokers. The rate of tax is equal to three percent of the gross premiums less return
301.7premiums paid by an insured whose home state is Minnesota.
301.8(b) A tax is imposed on persons, firms, or corporations a person, firm, corporation,
301.9or purchasing group as defined in section 60E.02, or any member of a purchasing group,
301.10 that procure procures insurance directly from a nonadmitted insurer. The rate of tax is
301.11equal to two percent of the gross premiums less return premiums paid by an insured
301.12whose home state is Minnesota.
301.13(c) No state other than the home state of an insured may require any premium tax
301.14payment for nonadmitted insurance. When Minnesota is the home state of the insured,
301.15as provided under section 297I.01, 100 percent of the gross premiums are taxable in
301.16Minnesota with no allocation of the tax to other states.
301.17EFFECTIVE DATE.This section is effective for premiums received after
301.18December 31, 2013.

301.19    Sec. 7. Minnesota Statutes 2012, section 297I.05, subdivision 11, is amended to read:
301.20    Subd. 11. Retaliatory provisions. (a) If any other state or country imposes any
301.21taxes, fines, deposits, penalties, licenses, or fees upon any insurance companies of this
301.22state and their agents doing business in another state or country that are in addition to or in
301.23excess of those imposed by the laws of this state upon foreign insurance companies and
301.24their agents doing business in this state, the same taxes, fines, deposits, penalties, licenses,
301.25and fees are imposed upon every similar insurance company of that state or country and
301.26their agents doing or applying to do business in this state.
301.27(b) If any conditions precedent to the right to do business in any other state or
301.28country are imposed by the laws of that state or country, beyond those imposed upon
301.29foreign companies by the laws of this state, the same conditions precedent are imposed
301.30upon every similar insurance company of that state or country and their agents doing or
301.31applying to do business in that state.
301.32(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or
301.33fees" means an amount of money that is deposited in the general revenue fund of the state
302.1or other similar fund in another state or country and is not dedicated to a special purpose
302.2or use or money deposited in the general revenue fund of the state or other similar fund in
302.3another state or country and appropriated to the commissioner of commerce or insurance
302.4for the operation of the Department of Commerce or other similar agency with jurisdiction
302.5over insurance. Taxes, fines, deposits, penalties, licenses, or fees do not include:
302.6(1) special purpose obligations or assessments imposed in connection with particular
302.7kinds of insurance, including but not limited to assessments imposed in connection with
302.8residual market mechanisms; or
302.9(2) assessments made by the insurance guaranty association, life and health
302.10guarantee association, or similar association.
302.11(d) This subdivision applies to taxes imposed under subdivisions 1,; 3,; 4, 6, and; 12,
302.12paragraph (a), clauses (1) and (2); and 14.
302.13(e) This subdivision does not apply to insurance companies organized or domiciled
302.14in a state or country, the laws of which do not impose retaliatory taxes, fines, deposits,
302.15penalties, licenses, or fees or which grant, on a reciprocal basis, exemptions from
302.16retaliatory taxes, fines, deposits, penalties, licenses, or fees to insurance companies
302.17domiciled in this state.
302.18EFFECTIVE DATE.This section is effective the day following final enactment.

302.19    Sec. 8. Minnesota Statutes 2012, section 297I.05, subdivision 12, is amended to read:
302.20    Subd. 12. Other entities. (a) A tax is imposed equal to two percent of:
302.21    (1) gross premiums less return premiums written for risks resident or located in
302.22Minnesota by a risk retention group;
302.23    (2) gross premiums less return premiums received by an attorney in fact acting
302.24in accordance with chapter 71A;
302.25    (3) gross premiums less return premiums received pursuant to assigned risk policies
302.26and contracts of coverage under chapter 79; and
302.27    (4) the direct funded premium received by the reinsurance association under section
302.2879.34 from self-insurers approved under section 176.181 and political subdivisions that
302.29self-insure; and.
302.30    (5) gross premiums less return premiums paid to an insurer other than a licensed
302.31insurance company or a surplus lines broker for coverage of risks resident or located in
302.32Minnesota by a purchasing group or any members of the purchasing group to a broker or
302.33agent for the purchasing group.
303.1    (b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The
303.2rate of tax is equal to two percent of the total amount of claims paid during the fund year,
303.3with no deduction for claims wholly or partially reimbursed through stop-loss insurance.
303.4    (c) A tax is imposed on a joint self-insurance plan operating under chapter 62H.
303.5The rate of tax is equal to two percent of the total amount of claims paid during the
303.6fund's fiscal year, with no deduction for claims wholly or partially reimbursed through
303.7stop-loss insurance.
303.8    (d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5,
303.9on the gross premiums less return premiums on all coverages received by an accountable
303.10provider network or agents of an accountable provider network in Minnesota, in cash or
303.11otherwise, during the year.
303.12EFFECTIVE DATE.This section is effective for premiums received after
303.13December 31, 2013.

303.14    Sec. 9. Minnesota Statutes 2012, section 297I.30, subdivision 1, is amended to read:
303.15    Subdivision 1. General rule. On or before March 1, every taxpayer subject to
303.16taxation under section 297I.05, subdivisions 1 to 5,; 7, paragraph (b),; 12, paragraphs (a),
303.17clauses (1) to (4), (b), (c), and (d),; and 14, shall file an annual return for the preceding
303.18calendar year in the form prescribed by the commissioner.
303.19EFFECTIVE DATE.This section is effective for premiums received after
303.20December 31, 2013.

303.21    Sec. 10. Minnesota Statutes 2012, section 297I.30, subdivision 2, is amended to read:
303.22    Subd. 2. Surplus lines brokers and purchasing groups. On or before February
303.2315 and August 15 of each year, every surplus lines broker subject to taxation under
303.24section 297I.05, subdivision 7, paragraph (a), and every purchasing group or member of
303.25a purchasing group subject to tax under section 297I.05, subdivision 12, paragraph (a),
303.26clause (5), shall file a return with the commissioner for the preceding six-month period
303.27ending December 31, or June 30, in the form prescribed by the commissioner.
303.28EFFECTIVE DATE.This section is effective for premiums received after
303.29December 31, 2013.

303.30    Sec. 11. REPEALER.
303.31Minnesota Statutes 2012, section 289A.60, subdivision 31, is repealed.
304.1EFFECTIVE DATE.This section is effective the day following final enactment.


304.4    Section 1. Minnesota Statutes 2012, section 123A.455, subdivision 1, is amended to
304.5read:
304.6    Subdivision 1. Definitions. "Split residential property parcel" means a parcel of
304.7real estate that is located within the boundaries of more than one school district and that
304.8is classified as residential property under:
304.9    (1) section 273.13, subdivision 22, paragraph (a) or (b);
304.10    (2) section 273.13, subdivision 25, paragraph (b), clause (1); or
304.11    (3) section 273.13, subdivision 25, paragraph (c), clause (1).
304.12EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
304.13thereafter.

304.14    Sec. 2. Minnesota Statutes 2012, section 270.077, is amended to read:
304.15270.077 TAXES CREDITED TO STATE AIRPORTS FUND.
304.16    All taxes levied under sections 270.071 to 270.079 must be collected by the
304.17commissioner and credited to the state airports fund created in section 360.017.
304.18EFFECTIVE DATE.This section is effective the day following final enactment.

304.19    Sec. 3. Minnesota Statutes 2012, section 270.41, subdivision 5, is amended to read:
304.20    Subd. 5. Prohibited activity. A licensed assessor or other person employed by an
304.21assessment jurisdiction or contracting with an assessment jurisdiction for the purpose
304.22of valuing or classifying property for property tax purposes is prohibited from making
304.23appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report
304.24as defined in section 82B.021, subdivisions 2, 4, 6, and 7, on any property within the
304.25assessment jurisdiction where the individual is employed or performing the duties of the
304.26assessor under contract. Violation of this prohibition shall result in immediate revocation
304.27of the individual's license to assess property for property tax purposes. This prohibition
304.28must not be construed to prohibit an individual from carrying out any duties required
304.29for the proper assessment of property for property tax purposes or performing duties
304.30enumerated in section 273.061, subdivision 7 or 8. If a formal resolution has been adopted
304.31by the governing body of a governmental unit, which specifies the purposes for which
305.1such work will be done, this prohibition does not apply to appraisal activities undertaken
305.2on behalf of and at the request of the governmental unit that has employed or contracted
305.3with the individual. The resolution may only allow appraisal activities which are related to
305.4condemnations, right-of-way acquisitions, land exchanges, or special assessments.
305.5EFFECTIVE DATE.This section is effective the day following final enactment.

305.6    Sec. 4. Minnesota Statutes 2012, section 270C.34, subdivision 1, is amended to read:
305.7    Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any
305.8penalty or interest that is imposed by a law administered by the commissioner, or imposed
305.9by section 270.0725, subdivision 1 or 2, or 270.075, subdivision 2, as a result of the late
305.10payment of tax or late filing of a return, or any part of an additional tax charge under
305.11section 289A.25, subdivision 2, or 289A.26, subdivision 4, if the failure to timely pay the
305.12tax or failure to timely file the return is due to reasonable cause, or if the taxpayer is located
305.13in a presidentially declared disaster or in a presidentially declared state of emergency area
305.14or in an area declared to be in a state of emergency by the governor under section 12.31.
305.15    (b) The commissioner shall abate any part of a penalty or additional tax charge
305.16under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous
305.17advice given to the taxpayer in writing by an employee of the department acting in
305.18an official capacity, if the advice:
305.19    (1) was reasonably relied on and was in response to a specific written request of the
305.20taxpayer; and
305.21    (2) was not the result of failure by the taxpayer to provide adequate or accurate
305.22information.
305.23EFFECTIVE DATE.This section is effective the day following final enactment.

305.24    Sec. 5. Minnesota Statutes 2012, section 272.01, subdivision 2, is amended to read:
305.25    Subd. 2. Exempt property used by private entity for profit. (a) When any real or
305.26personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is
305.27leased, loaned, or otherwise made available and used by a private individual, association,
305.28or corporation in connection with a business conducted for profit, there shall be imposed a
305.29tax, for the privilege of so using or possessing such real or personal property, in the same
305.30amount and to the same extent as though the lessee or user was the owner of such property.
305.31    (b) The tax imposed by this subdivision shall not apply to:
305.32    (1) property leased or used as a concession in or relative to the use in whole
305.33or part of a public park, market, fairgrounds, port authority, economic development
306.1authority established under chapter 469, municipal auditorium, municipal parking facility,
306.2municipal museum, or municipal stadium;
306.3    (2) property of an airport owned by a city, town, county, or group thereof which is:
306.4    (i) leased to or used by any person or entity including a fixed base operator; and
306.5    (ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods,
306.6services, or facilities to the airport or general public;
306.7the exception from taxation provided in this clause does not apply to:
306.8    (i) property located at an airport owned or operated by the Metropolitan Airports
306.9Commission or by a city of over 50,000 population according to the most recent federal
306.10census or such a city's airport authority; or
306.11    (ii) hangars leased by a private individual, association, or corporation in connection
306.12with a business conducted for profit other than an aviation-related business;
306.13    (3) property constituting or used as a public pedestrian ramp or concourse in
306.14connection with a public airport;
306.15    (4) property constituting or used as a passenger check-in area or ticket sale counter,
306.16boarding area, or luggage claim area in connection with a public airport but not the
306.17airports owned or operated by the Metropolitan Airports Commission or cities of over
306.1850,000 population or an airport authority therein. Real estate owned by a municipality
306.19in connection with the operation of a public airport and leased or used for agricultural
306.20purposes is not exempt;
306.21    (5) property leased, loaned, or otherwise made available to a private individual,
306.22corporation, or association under a cooperative farming agreement made pursuant to
306.23section 97A.135; or
306.24    (6) property leased, loaned, or otherwise made available to a private individual,
306.25corporation, or association under section 272.68, subdivision 4.
306.26    (c) Taxes imposed by this subdivision are payable as in the case of personal property
306.27taxes and shall be assessed to the lessees or users of real or personal property in the same
306.28manner as taxes assessed to owners of real or personal property, except that such taxes
306.29shall not become a lien against the property. When due, the taxes shall constitute a debt due
306.30from the lessee or user to the state, township, city, county, and school district for which the
306.31taxes were assessed and shall be collected in the same manner as personal property taxes.
306.32If property subject to the tax imposed by this subdivision is leased or used jointly by two or
306.33more persons, each lessee or user shall be jointly and severally liable for payment of the tax.
306.34    (d) The tax on real property of the federal government, the state or any of its political
306.35subdivisions that is leased by, loaned, or otherwise made available to a private individual,
306.36association, or corporation and becomes taxable under this subdivision or other provision
307.1of law must be assessed and collected as a personal property assessment. The taxes do
307.2not become a lien against the real property.
307.3EFFECTIVE DATE.This section is effective the day following final enactment.

307.4    Sec. 6. Minnesota Statutes 2012, section 272.02, subdivision 97, is amended to read:
307.5    Subd. 97. Property used in business of mining subject to net proceeds tax. The
307.6following property used in the business of mining that is subject to the net proceeds tax
307.7under section 298.015 is exempt:
307.8    (1) deposits of ores, metals, and minerals and the lands in which they are contained;
307.9    (2) all real and personal property used in mining, quarrying, producing, or refining
307.10ores, minerals, or metals, including lands occupied by or used in connection with the
307.11mining, quarrying, production, or ore refining facilities; and
307.12    (3) concentrate or direct reduced ore.
307.13    This exemption applies for each year that a person subject to tax under section
307.14298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or
307.15minerals.
307.16EFFECTIVE DATE.This section is effective the day following final enactment.

307.17    Sec. 7. Minnesota Statutes 2012, section 272.03, subdivision 9, is amended to read:
307.18    Subd. 9. Person. "Person" includes means an individual, association, estate, trust,
307.19partnership, firm, company, or corporation.
307.20EFFECTIVE DATE.This section is effective the day following final enactment.

307.21    Sec. 8. Minnesota Statutes 2012, section 273.114, subdivision 6, is amended to read:
307.22    Subd. 6. Additional taxes. (a) When real property which is being, or has been
307.23valued and assessed under this section is sold, transferred, or no longer qualifies under
307.24subdivision 2, the portion sold, transferred, or no longer qualifying shall be subject to
307.25additional taxes in the amount equal to the difference between the taxes determined in
307.26accordance with subdivision 3 and the amount determined under subdivision 4, provided
307.27that the amount determined under subdivision 4 shall not be greater than it would have
307.28been had the actual bona fide sale price of the real property at an arm's-length transaction
307.29been used in lieu of the market value determined under subdivision 4. The additional taxes
307.30shall be extended against the property on the tax list for taxes payable in the current year,
307.31provided that no interest or penalties shall be levied on the additional taxes if timely paid
308.1and provided that the additional taxes shall only be levied with respect to the current year
308.2plus two prior years that the property has been valued and assessed under this section.
308.3    (b) In the case of a sale or transfer, the additional taxes under paragraph (a) shall not
308.4be extended against the property if the new owner submits a successful application under
308.5this section by the later of May 1 of the current year or 30 days after the sale or transfer.
308.6    (c) For the purposes of this section, the following events do not constitute a sale or
308.7transfer for property that qualified under subdivision 2 prior to the event:
308.8    (1) death of a property owner when the surviving owners retain ownership of the
308.9property;
308.10    (2) divorce of a married couple when one of the spouses retains ownership of the
308.11property;
308.12    (3) marriage of a single property owner when that owner retains ownership of the
308.13property in whole or in part;
308.14    (4) the organization or reorganization of a farm ownership entity that is not prohibited
308.15from owning agricultural land in this state under section 500.24, if all owners maintain the
308.16same beneficial interest both before and after the organization or reorganization; and
308.17    (5) transfer of the property to a trust or trustee, provided that the individual owners
308.18of the property are the grantors of the trust and they maintain the same beneficial interest
308.19both before and after placement of the property in trust.
308.20EFFECTIVE DATE.This section is effective the day following final enactment.

308.21    Sec. 9. Minnesota Statutes 2012, section 273.13, subdivision 23, is amended to read:
308.22    Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural
308.23land that is homesteaded, along with any class 2b rural vacant land that is contiguous to
308.24the class 2a land under the same ownership. The market value of the house and garage
308.25and immediately surrounding one acre of land has the same class rates as class 1a or 1b
308.26property under subdivision 22. The value of the remaining land including improvements
308.27up to the first tier valuation limit of agricultural homestead property has a net class rate
308.28of 0.5 percent of market value. The remaining property over the first tier has a class rate
308.29of one percent of market value. For purposes of this subdivision, the "first tier valuation
308.30limit of agricultural homestead property" and "first tier" means the limit certified under
308.31section 273.11, subdivision 23.
308.32    (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
308.33are agricultural land and buildings. Class 2a property has a net class rate of one percent of
308.34market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a
308.35property must also include any property that would otherwise be classified as 2b, but is
309.1interspersed with class 2a property, including but not limited to sloughs, wooded wind
309.2shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
309.3and other similar land that is impractical for the assessor to value separately from the rest of
309.4the property or that is unlikely to be able to be sold separately from the rest of the property.
309.5    An assessor may classify the part of a parcel described in this subdivision that is used
309.6for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
309.7    (c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
309.8that are unplatted real estate, rural in character and not used for agricultural purposes,
309.9including land used for growing trees for timber, lumber, and wood and wood products,
309.10that is not improved with a structure. The presence of a minor, ancillary nonresidential
309.11structure as defined by the commissioner of revenue does not disqualify the property from
309.12classification under this paragraph. Any parcel of 20 acres or more improved with a
309.13structure that is not a minor, ancillary nonresidential structure must be split-classified, and
309.14ten acres must be assigned to the split parcel containing the structure. Class 2b property
309.15has a net class rate of one percent of market value unless it is part of an agricultural
309.16homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
309.17    (d) Class 2c managed forest land consists of no less than 20 and no more than 1,920
309.18acres statewide per taxpayer that is being managed under a forest management plan that
309.19meets the requirements of chapter 290C, but is not enrolled in the sustainable forest
309.20resource management incentive program. It has a class rate of .65 percent, provided that
309.21the owner of the property must apply to the assessor in order for the property to initially
309.22qualify for the reduced rate and provide the information required by the assessor to verify
309.23that the property qualifies for the reduced rate. If the assessor receives the application
309.24and information before May 1 in an assessment year, the property qualifies beginning
309.25with that assessment year. If the assessor receives the application and information after
309.26April 30 in an assessment year, the property may not qualify until the next assessment
309.27year. The commissioner of natural resources must concur that the land is qualified. The
309.28commissioner of natural resources shall annually provide county assessors verification
309.29information on a timely basis. The presence of a minor, ancillary nonresidential structure
309.30as defined by the commissioner of revenue does not disqualify the property from
309.31classification under this paragraph.
309.32    (e) Agricultural land as used in this section means:
309.33    (1) contiguous acreage of ten acres or more, used during the preceding year for
309.34agricultural purposes.; or
310.1    (2) contiguous acreage used during the preceding year for an intensive livestock or
310.2poultry confinement operation, provided that land used only for pasturing or grazing
310.3does not qualify under this clause.
310.4    "Agricultural purposes" as used in this section means the raising, cultivation, drying,
310.5or storage of agricultural products for sale, or the storage of machinery or equipment
310.6used in support of agricultural production by the same farm entity. For a property to be
310.7classified as agricultural based only on the drying or storage of agricultural products,
310.8the products being dried or stored must have been produced by the same farm entity as
310.9the entity operating the drying or storage facility. "Agricultural purposes" also includes
310.10enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or
310.11the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar
310.12state or federal conservation program if the property was classified as agricultural (i)
310.13under this subdivision for the assessment year 2002 taxes payable in 2003 because of its
310.14enrollment in a qualifying program and the land remains enrolled or (ii) in the year prior
310.15to its enrollment. Agricultural classification shall not be based upon the market value of
310.16any residential structures on the parcel or contiguous parcels under the same ownership.
310.17    "Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
310.18portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
310.19of, a set of contiguous tax parcels under that section that are owned by the same person.
310.20    (f) Real estate of Agricultural land under this section also includes:
310.21    (1) contiguous acreage that is less than ten acres, which is in size and exclusively or
310.22intensively used in the preceding year for raising or cultivating agricultural products, shall
310.23be considered as agricultural land. To qualify under this paragraph, property that includes
310.24a residential structure must be used intensively for one of the following purposes:; or
310.25    (2) contiguous acreage that contains a residence and is less than 11 acres in size, if
310.26the contiguous acreage exclusive of the house, garage, and surrounding one acre of land
310.27was used in the preceding year for one or more of the following three uses:
310.28    (i) for an intensive grain drying or storage of grain operation, or for intensive
310.29machinery or equipment storage of machinery or equipment activities used to support
310.30agricultural activities on other parcels of property operated by the same farming entity;
310.31    (ii) as a nursery, provided that only those acres used intensively to produce nursery
310.32stock are considered agricultural land; or
310.33    (iii) for livestock or poultry confinement, provided that land that is used only for
310.34pasturing and grazing does not qualify; or
310.35    (iv) (iii) for intensive market farming; for purposes of this paragraph, "market
310.36farming" means the cultivation of one or more fruits or vegetables or production of animal
311.1or other agricultural products for sale to local markets by the farmer or an organization
311.2with which the farmer is affiliated.
311.3    "Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
311.4described in section 272.193, or all of a set of contiguous tax parcels under that section
311.5that are owned by the same person.
311.6    (g) Land shall be classified as agricultural even if all or a portion of the agricultural
311.7use of that property is the leasing to, or use by another person for agricultural purposes.
311.8    Classification under this subdivision is not determinative for qualifying under
311.9section 273.111.
311.10    (h) The property classification under this section supersedes, for property tax
311.11purposes only, any locally administered agricultural policies or land use restrictions that
311.12define minimum or maximum farm acreage.
311.13    (i) The term "agricultural products" as used in this subdivision includes production
311.14for sale of:
311.15    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
311.16animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
311.17bees, and apiary products by the owner;
311.18    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
311.19for agricultural use;
311.20    (3) the commercial boarding of horses, which may include related horse training and
311.21riding instruction, if the boarding is done on property that is also used for raising pasture
311.22to graze horses or raising or cultivating other agricultural products as defined in clause (1);
311.23    (4) property which is owned and operated by nonprofit organizations used for
311.24equestrian activities, excluding racing;
311.25    (5) game birds and waterfowl bred and raised (i) on a game farm licensed under
311.26section 97A.105, provided that the annual licensing report to the Department of Natural
311.27Resources, which must be submitted annually by March 30 to the assessor, indicates
311.28that at least 500 birds were raised or used for breeding stock on the property during the
311.29preceding year and that the owner provides a copy of the owner's most recent schedule F;
311.30or (ii) for use on a shooting preserve licensed under section 97A.115;
311.31    (6) insects primarily bred to be used as food for animals;
311.32    (7) trees, grown for sale as a crop, including short rotation woody crops, and not
311.33sold for timber, lumber, wood, or wood products; and
311.34    (8) maple syrup taken from trees grown by a person licensed by the Minnesota
311.35Department of Agriculture under chapter 28A as a food processor.
312.1    (j) If a parcel used for agricultural purposes is also used for commercial or industrial
312.2purposes, including but not limited to:
312.3    (1) wholesale and retail sales;
312.4    (2) processing of raw agricultural products or other goods;
312.5    (3) warehousing or storage of processed goods; and
312.6    (4) office facilities for the support of the activities enumerated in clauses (1), (2),
312.7and (3),
312.8the assessor shall classify the part of the parcel used for agricultural purposes as class
312.91b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
312.10use. The grading, sorting, and packaging of raw agricultural products for first sale is
312.11considered an agricultural purpose. A greenhouse or other building where horticultural
312.12or nursery products are grown that is also used for the conduct of retail sales must be
312.13classified as agricultural if it is primarily used for the growing of horticultural or nursery
312.14products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
312.15those products. Use of a greenhouse or building only for the display of already grown
312.16horticultural or nursery products does not qualify as an agricultural purpose.
312.17    (k) The assessor shall determine and list separately on the records the market value
312.18of the homestead dwelling and the one acre of land on which that dwelling is located. If
312.19any farm buildings or structures are located on this homesteaded acre of land, their market
312.20value shall not be included in this separate determination.
312.21    (l) Class 2d airport landing area consists of a landing area or public access area of
312.22a privately owned public use airport. It has a class rate of one percent of market value.
312.23To qualify for classification under this paragraph, a privately owned public use airport
312.24must be licensed as a public airport under section 360.018. For purposes of this paragraph,
312.25"landing area" means that part of a privately owned public use airport properly cleared,
312.26regularly maintained, and made available to the public for use by aircraft and includes
312.27runways, taxiways, aprons, and sites upon which are situated landing or navigational aids.
312.28A landing area also includes land underlying both the primary surface and the approach
312.29surfaces that comply with all of the following:
312.30    (i) the land is properly cleared and regularly maintained for the primary purposes of
312.31the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
312.32facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
312.33    (ii) the land is part of the airport property; and
312.34    (iii) the land is not used for commercial or residential purposes.
312.35The land contained in a landing area under this paragraph must be described and certified
312.36by the commissioner of transportation. The certification is effective until it is modified,
313.1or until the airport or landing area no longer meets the requirements of this paragraph.
313.2For purposes of this paragraph, "public access area" means property used as an aircraft
313.3parking ramp, apron, or storage hangar, or an arrival and departure building in connection
313.4with the airport.
313.5    (m) Class 2e consists of land with a commercial aggregate deposit that is not actively
313.6being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
313.7located in a county that has elected to opt-out of the aggregate preservation program as
313.8provided in section 273.1115, subdivision 6. It has a class rate of one percent of market
313.9value. To qualify for classification under this paragraph, the property must be at least
313.10ten contiguous acres in size and the owner of the property must record with the county
313.11recorder of the county in which the property is located an affidavit containing:
313.12    (1) a legal description of the property;
313.13    (2) a disclosure that the property contains a commercial aggregate deposit that is not
313.14actively being mined but is present on the entire parcel enrolled;
313.15    (3) documentation that the conditional use under the county or local zoning
313.16ordinance of this property is for mining; and
313.17    (4) documentation that a permit has been issued by the local unit of government
313.18or the mining activity is allowed under local ordinance. The disclosure must include a
313.19statement from a registered professional geologist, engineer, or soil scientist delineating
313.20the deposit and certifying that it is a commercial aggregate deposit.
313.21    For purposes of this section and section 273.1115, "commercial aggregate deposit"
313.22means a deposit that will yield crushed stone or sand and gravel that is suitable for use
313.23as a construction aggregate; and "actively mined" means the removal of top soil and
313.24overburden in preparation for excavation or excavation of a commercial deposit.
313.25    (n) When any portion of the property under this subdivision or subdivision 22 begins
313.26to be actively mined, the owner must file a supplemental affidavit within 60 days from
313.27the day any aggregate is removed stating the number of acres of the property that is
313.28actively being mined. The acres actively being mined must be (1) valued and classified
313.29under subdivision 24 in the next subsequent assessment year, and (2) removed from the
313.30aggregate resource preservation property tax program under section 273.1115, if the
313.31land was enrolled in that program. Copies of the original affidavit and all supplemental
313.32affidavits must be filed with the county assessor, the local zoning administrator, and the
313.33Department of Natural Resources, Division of Land and Minerals. A supplemental
313.34affidavit must be filed each time a subsequent portion of the property is actively mined,
313.35provided that the minimum acreage change is five acres, even if the actual mining activity
313.36constitutes less than five acres.
314.1    (o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
314.2not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
314.3in section 14.386 concerning exempt rules do not apply.
314.4EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
314.5thereafter.

314.6    Sec. 10. Minnesota Statutes 2012, section 273.13, subdivision 25, is amended to read:
314.7    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
314.8units and used or held for use by the owner or by the tenants or lessees of the owner
314.9as a residence for rental periods of 30 days or more, excluding property qualifying for
314.10class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
314.11than hospitals exempt under section 272.02, and contiguous property used for hospital
314.12purposes, without regard to whether the property has been platted or subdivided. The
314.13market value of class 4a property has a class rate of 1.25 percent.
314.14    (b) Class 4b includes:
314.15    (1) residential real estate containing less than four units that does not qualify as class
314.164bb, other than seasonal residential recreational property;
314.17    (2) manufactured homes not classified under any other provision;
314.18    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
314.19farm classified under subdivision 23, paragraph (b) containing two or three units; and
314.20    (4) unimproved property that is classified residential as determined under subdivision
314.2133.
314.22    The market value of class 4b property has a class rate of 1.25 percent.
314.23    (c) Class 4bb includes:
314.24    (1) nonhomestead residential real estate containing one unit, other than seasonal
314.25residential recreational property; and
314.26    (2) a single family dwelling, garage, and surrounding one acre of property on a
314.27nonhomestead farm classified under subdivision 23, paragraph (b).
314.28    Class 4bb property has the same class rates as class 1a property under subdivision 22.
314.29    Property that has been classified as seasonal residential recreational property at
314.30any time during which it has been owned by the current owner or spouse of the current
314.31owner does not qualify for class 4bb.
314.32    (d) Class 4c property includes:
314.33    (1) except as provided in subdivision 22, paragraph (c), real and personal property
314.34devoted to commercial temporary and seasonal residential occupancy for recreation
314.35purposes, for not more than 250 days in the year preceding the year of assessment. For
315.1purposes of this clause, property is devoted to a commercial purpose on a specific day
315.2if any portion of the property is used for residential occupancy, and a fee is charged for
315.3residential occupancy. Class 4c property under this clause must contain three or more
315.4rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
315.5or individual camping site equipped with water and electrical hookups for recreational
315.6vehicles. A camping pad offered for rent by a property that otherwise qualifies for class
315.74c under this clause is also class 4c under this clause regardless of the term of the rental
315.8agreement, as long as the use of the camping pad does not exceed 250 days. In order for a
315.9property to be classified under this clause, either (i) the business located on the property
315.10must provide recreational activities, at least 40 percent of the annual gross lodging receipts
315.11related to the property must be from business conducted during 90 consecutive days,
315.12and either (A) at least 60 percent of all paid bookings by lodging guests during the year
315.13must be for periods of at least two consecutive nights; or (B) at least 20 percent of the
315.14annual gross receipts must be from charges for providing recreational activities, or (ii) the
315.15business must contain 20 or fewer rental units, and must be located in a township or a city
315.16with a population of 2,500 or less located outside the metropolitan area, as defined under
315.17section 473.121, subdivision 2, that contains a portion of a state trail administered by the
315.18Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or
315.19more nights shall be counted as two bookings. Class 4c property also includes commercial
315.20use real property used exclusively for recreational purposes in conjunction with other class
315.214c property classified under this clause and devoted to temporary and seasonal residential
315.22occupancy for recreational purposes, up to a total of two acres, provided the property is
315.23not devoted to commercial recreational use for more than 250 days in the year preceding
315.24the year of assessment and is located within two miles of the class 4c property with which
315.25it is used. In order for a property to qualify for classification under this clause, the owner
315.26must submit a declaration to the assessor designating the cabins or units occupied for 250
315.27days or less in the year preceding the year of assessment by January 15 of the assessment
315.28year. Those cabins or units and a proportionate share of the land on which they are located
315.29must be designated class 4c under this clause as otherwise provided. The remainder of the
315.30cabins or units and a proportionate share of the land on which they are located will be
315.31designated as class 3a. The owner of property desiring designation as class 4c property
315.32under this clause must provide guest registers or other records demonstrating that the units
315.33for which class 4c designation is sought were not occupied for more than 250 days in the
315.34year preceding the assessment if so requested. The portion of a property operated as a
315.35(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
315.36nonresidential facility operated on a commercial basis not directly related to temporary and
316.1seasonal residential occupancy for recreation purposes does not qualify for class 4c. For
316.2the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
316.3boats and motors, snowmobiles, downhill or cross-country ski equipment; providing
316.4marina services, launch services, or guide services; or selling bait and fishing tackle;
316.5    (2) qualified property used as a golf course if:
316.6    (i) it is open to the public on a daily fee basis. It may charge membership fees or
316.7dues, but a membership fee may not be required in order to use the property for golfing,
316.8and its green fees for golfing must be comparable to green fees typically charged by
316.9municipal courses; and
316.10    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
316.11    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
316.12with the golf course is classified as class 3a property;
316.13    (3) real property up to a maximum of three acres of land owned and used by a
316.14nonprofit community service oriented organization and not used for residential purposes
316.15on either a temporary or permanent basis, provided that:
316.16    (i) the property is not used for a revenue-producing activity for more than six days
316.17in the calendar year preceding the year of assessment; or
316.18    (ii) the organization makes annual charitable contributions and donations at least
316.19equal to the property's previous year's property taxes and the property is allowed to be
316.20used for public and community meetings or events for no charge, as appropriate to the
316.21size of the facility.
316.22    For purposes of this clause:
316.23    (A) "charitable contributions and donations" has the same meaning as lawful
316.24gambling purposes under section 349.12, subdivision 25, excluding those purposes
316.25relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
316.26    (B) "property taxes" excludes the state general tax;
316.27    (C) a "nonprofit community service oriented organization" means any corporation,
316.28society, association, foundation, or institution organized and operated exclusively for
316.29charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
316.30federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
316.31Revenue Code; and
316.32    (D) "revenue-producing activities" shall include but not be limited to property or that
316.33portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
316.34liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
316.35alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
317.1insurance business, or office or other space leased or rented to a lessee who conducts a
317.2for-profit enterprise on the premises.
317.3Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use
317.4of the property for social events open exclusively to members and their guests for periods
317.5of less than 24 hours, when an admission is not charged nor any revenues are received by
317.6the organization shall not be considered a revenue-producing activity.
317.7    The organization shall maintain records of its charitable contributions and donations
317.8and of public meetings and events held on the property and make them available upon
317.9request any time to the assessor to ensure eligibility. An organization meeting the
317.10requirement under item (ii) must file an application by May 1 with the assessor for
317.11eligibility for the current year's assessment. The commissioner shall prescribe a uniform
317.12application form and instructions;
317.13    (4) postsecondary student housing of not more than one acre of land that is owned by
317.14a nonprofit corporation organized under chapter 317A and is used exclusively by a student
317.15cooperative, sorority, or fraternity for on-campus housing or housing located within two
317.16miles of the border of a college campus;
317.17    (5)(i) manufactured home parks as defined in section 327.14, subdivision 3,
317.18excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii)
317.19manufactured home parks as defined in section 327.14, subdivision 3, that are described in
317.20section 273.124, subdivision 3a;
317.21    (6) real property that is actively and exclusively devoted to indoor fitness, health,
317.22social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
317.23and is located within the metropolitan area as defined in section 473.121, subdivision 2;
317.24    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
317.25under section 272.01, subdivision 2, and the land on which it is located, provided that:
317.26    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
317.27Airports Commission, or group thereof; and
317.28    (ii) the land lease, or any ordinance or signed agreement restricting the use of the
317.29leased premise, prohibits commercial activity performed at the hangar.
317.30    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
317.31be filed by the new owner with the assessor of the county where the property is located
317.32within 60 days of the sale;
317.33    (8) a privately owned noncommercial aircraft storage hangar not exempt under
317.34section 272.01, subdivision 2, and the land on which it is located, provided that:
317.35    (i) the land abuts a public airport; and
318.1    (ii) the owner of the aircraft storage hangar provides the assessor with a signed
318.2agreement restricting the use of the premises, prohibiting commercial use or activity
318.3performed at the hangar; and
318.4    (9) residential real estate, a portion of which is used by the owner for homestead
318.5purposes, and that is also a place of lodging, if all of the following criteria are met:
318.6    (i) rooms are provided for rent to transient guests that generally stay for periods
318.7of 14 or fewer days;
318.8    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
318.9in the basic room rate;
318.10    (iii) meals are not provided to the general public except for special events on fewer
318.11than seven days in the calendar year preceding the year of the assessment; and
318.12    (iv) the owner is the operator of the property.
318.13The market value subject to the 4c classification under this clause is limited to five rental
318.14units. Any rental units on the property in excess of five, must be valued and assessed as
318.15class 3a. The portion of the property used for purposes of a homestead by the owner must
318.16be classified as class 1a property under subdivision 22;
318.17    (10) real property up to a maximum of three acres and operated as a restaurant
318.18as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake
318.19as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
318.20is either devoted to commercial purposes for not more than 250 consecutive days, or
318.21receives at least 60 percent of its annual gross receipts from business conducted during
318.22four consecutive months. Gross receipts from the sale of alcoholic beverages must be
318.23included in determining the property's qualification under subitem (B). The property's
318.24primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
318.25sales located on the premises must be excluded. Owners of real property desiring 4c
318.26classification under this clause must submit an annual declaration to the assessor by
318.27February 1 of the current assessment year, based on the property's relevant information for
318.28the preceding assessment year;
318.29    (11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
318.30as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to
318.31the public and devoted to recreational use for marina services. The marina owner must
318.32annually provide evidence to the assessor that it provides services, including lake or river
318.33access to the public by means of an access ramp or other facility that is either located on
318.34the property of the marina or at a publicly owned site that abuts the property of the marina.
318.35No more than 800 feet of lakeshore may be included in this classification. Buildings used
318.36in conjunction with a marina for marina services, including but not limited to buildings
319.1used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
319.2tackle, are classified as class 3a property; and
319.3    (12) real and personal property devoted to noncommercial temporary and seasonal
319.4residential occupancy for recreation purposes.
319.5    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
319.6parcel of noncommercial seasonal residential recreational property under clause (12)
319.7has the same class rates as class 4bb property, (ii) manufactured home parks assessed
319.8under clause (5), item (i), have the same class rate as class 4b property, and the market
319.9value of manufactured home parks assessed under clause (5), item (ii), has the same class
319.10rate as class 4d property if more than 50 percent of the lots in the park are occupied by
319.11shareholders in the cooperative corporation or association and a class rate of one percent if
319.1250 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential
319.13recreational property and marina recreational land as described in clause (11), has a
319.14class rate of one percent for the first $500,000 of market value, and 1.25 percent for the
319.15remaining market value, (iv) the market value of property described in clause (4) has a
319.16class rate of one percent, (v) the market value of property described in clauses (2), (6), and
319.17(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property
319.18in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
319.19    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
319.20by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
319.21of the units in the building qualify as low-income rental housing units as certified under
319.22section 273.128, subdivision 3, only the proportion of qualifying units to the total number
319.23of units in the building qualify for class 4d. The remaining portion of the building shall be
319.24classified by the assessor based upon its use. Class 4d also includes the same proportion of
319.25land as the qualifying low-income rental housing units are to the total units in the building.
319.26For all properties qualifying as class 4d, the market value determined by the assessor must
319.27be based on the normal approach to value using normal unrestricted rents.
319.28    Class 4d property has a class rate of 0.75 percent.
319.29EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
319.30thereafter.

319.31    Sec. 11. Minnesota Statutes 2012, section 273.19, subdivision 1, is amended to read:
319.32    Subdivision 1. Tax-exempt property; lease. Except as provided in subdivision 3 or
319.334, tax-exempt property held under a lease for a term of at least one year, and not taxable
319.34under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall be
319.35considered, for all purposes of taxation, as the property of the person holding it. In this
320.1subdivision, "tax-exempt property" means property owned by the United States, the state
320.2 or any of its political subdivisions, a school, or any religious, scientific, or benevolent
320.3society or institution, incorporated or unincorporated, or any corporation whose property
320.4is not taxed in the same manner as other property. This subdivision does not apply to
320.5property exempt from taxation under section 272.01, subdivision 2, paragraph (b), clauses
320.6(2), (3), and (4), or to property exempt from taxation under section 272.0213.
320.7EFFECTIVE DATE.This section is effective the day following final enactment.

320.8    Sec. 12. Minnesota Statutes 2012, section 273.372, subdivision 4, is amended to read:
320.9    Subd. 4. Administrative appeals. (a) Companies that submit the reports under
320.10section 270.82 or 273.371 by the date specified in that section, or by the date specified by
320.11the commissioner in an extension, may appeal administratively to the commissioner prior
320.12to bringing an action in court by submitting.
320.13    (b) Companies that must submit reports under section 270.82 must submit a written
320.14request with to the commissioner for a conference within ten days after the date of the
320.15commissioner's valuation certification or notice to the company, or by May June 15,
320.16whichever is earlier.
320.17    (c) Companies that submit reports under section 273.371 must submit a written
320.18request to the commissioner for a conference within ten days after the date of the
320.19commissioner's valuation certification or notice to the company, or by July 1, whichever
320.20is earlier.
320.21    (d) The commissioner shall conduct the conference upon the commissioner's entire
320.22files and records and such further information as may be offered. The conference must
320.23be held no later than 20 days after the date of the commissioner's valuation certification
320.24or notice to the company, or by the date specified by the commissioner in an extension.
320.25Within 60 days after the conference the commissioner shall make a final determination of
320.26the matter and shall notify the company promptly of the determination. The conference
320.27is not a contested case hearing.
320.28    (b) (e) In addition to the opportunity for a conference under paragraph (a), the
320.29commissioner shall also provide the railroad and utility companies the opportunity to
320.30discuss any questions or concerns relating to the values established by the commissioner
320.31through certification or notice in a less formal manner. This does not change or modify
320.32the deadline for requesting a conference under paragraph (a), the deadline in section
320.33271.06 for appealing an order of the commissioner, or the deadline in section 278.01 for
320.34appealing property taxes in court.
321.1EFFECTIVE DATE.This section is effective beginning with assessment year 2014.

321.2    Sec. 13. Minnesota Statutes 2012, section 273.39, is amended to read:
321.3273.39 RURAL AREA.
321.4    As used in sections 273.39 to 273.41, the term "rural area" shall be deemed to mean
321.5any area of the state not included within the boundaries of any incorporated statutory
321.6city or home rule charter city, and such term shall be deemed to include both farm and
321.7nonfarm population thereof.
321.8EFFECTIVE DATE.This section is effective the day following final enactment.

321.9    Sec. 14. Minnesota Statutes 2012, section 279.06, subdivision 1, is amended to read:
321.10    Subdivision 1. List and notice. Within five days after the filing of such list, the
321.11court administrator shall return a copy thereof to the county auditor, with a notice prepared
321.12and signed by the court administrator, and attached thereto, which may be substantially in
321.13the following form:

321.14	State of Minnesota	)
321.15		) ss.
321.16	County of .....	)
321.17				District Court
321.18				..... Judicial District.

321.19    The state of Minnesota, to all persons, companies, or corporations who have or claim
321.20any estate, right, title, or interest in, claim to, or lien upon, any of the several parcels of
321.21land described in the list hereto attached:
321.22    The list of taxes and penalties on real property for the county of ...............................
321.23remaining delinquent on the first Monday in January, ......., has been filed in the office of
321.24the court administrator of the district court of said county, of which that hereto attached is a
321.25copy. Therefore, you, and each of you, are hereby required to file in the office of said court
321.26administrator, on or before the 20th day after the publication of this notice and list, your
321.27answer, in writing, setting forth any objection or defense you may have to the taxes, or any
321.28part thereof, upon any parcel of land described in the list, in, to, or on which you have or
321.29claim any estate, right, title, interest, claim, or lien, and, in default thereof, judgment will
321.30be entered against such parcel of land for the taxes on such list appearing against it, and
321.31for all penalties, interest, and costs. Based upon said judgment, the land shall be sold to
321.32the state of Minnesota on the second Monday in May, ....... The period of redemption for
321.33all lands sold to the state at a tax judgment sale shall be three years from the date of sale to
321.34the state of Minnesota if the land is within an incorporated area unless it is:
322.1    (a) nonagricultural homesteaded land as defined in section 273.13, subdivision 22;
322.2    (b) homesteaded agricultural land as defined in section 273.13, subdivision 23,
322.3paragraph (a);
322.4    (c) seasonal residential recreational land as defined in section 273.13, subdivisions
322.522, paragraph (c) , and 25, paragraph (d), clause (1), in which event the period of
322.6redemption is five years from the date of sale to the state of Minnesota;
322.7    (d) abandoned property and pursuant to section 281.173 a court order has been
322.8entered shortening the redemption period to five weeks; or
322.9    (e) vacant property as described under section 281.174, subdivision 2, and for which
322.10a court order is entered shortening the redemption period under section 281.174.
322.11    The period of redemption for all other lands sold to the state at a tax judgment sale
322.12shall be five years from the date of sale.
322.13    Inquiries as to the proceedings set forth above can be made to the county auditor of
322.14..... county whose address is ......

322.15		(Signed) ..... ,
322.16 322.17		Court Administrator of the District Court of the County of .....
322.18		(Here insert list.)

322.19    The notice must contain a narrative description of the various periods to redeem
322.20specified in sections 281.17, 281.173, and 281.174, in the manner prescribed by the
322.21commissioner of revenue under subdivision 2.
322.22    The list referred to in the notice shall be substantially in the following form:
322.23    List of real property for the county of ......................., on which taxes remain
322.24delinquent on the first Monday in January, .......
322.26Township (40), Range (20),

322.27 322.28 322.29 322.30 322.31 322.32 322.33 322.34	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
322.35					$ cts.
322.36 322.37	John Jones (825 Fremont Fairfield, MN 55000)	S.E. 1/4 of S.W. 1/4	10	23101	2.20
323.1 323.2 323.3 323.4 323.5 323.6 323.7 323.8 323.9 323.10 323.11 323.12 323.13 323.14 323.15 323.16 323.17 323.18 323.19	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

323.20    As to platted property, the form of heading shall conform to circumstances and be
323.21substantially in the following form:
323.23Brown's Addition, or Subdivision

323.24 323.25 323.26 323.27 323.28 323.29 323.30 323.31	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
323.32					$ cts.
323.33 323.34	John Jones (825 Fremont Fairfield, MN 55000)	15	9	58243	2.20
323.35 323.36 323.37 323.38 323.39	Bruce Smith (2059 Hand Fairfield, MN 55000) and Fairfield State Bank (100 Main Street Fairfield, MN 55000)	16	9	58244	3.15

323.40    The names, descriptions, and figures employed in parentheses in the above forms are
323.41merely for purposes of illustration.
323.42    The name of the town, township, range or city, and addition or subdivision, as the
323.43case may be, shall be repeated at the head of each column of the printed lists as brought
323.44forward from the preceding column.
323.45    Errors in the list shall not be deemed to be a material defect to affect the validity
323.46of the judgment and sale.
324.1EFFECTIVE DATE.This section is effective for lists and notices required after
324.2December 31, 2013.

324.3    Sec. 15. Minnesota Statutes 2012, section 290B.04, subdivision 2, is amended to read:
324.4    Subd. 2. Approval; recording. The commissioner shall approve all initial
324.5applications that qualify under this chapter and shall notify qualifying homeowners on or
324.6before December 1. The commissioner may investigate the facts or require confirmation
324.7in regard to an application. The commissioner shall record or file a notice of qualification
324.8for deferral, including the names of the qualifying homeowners and a legal description
324.9of the property, in the office of the county recorder, or registrar of titles, whichever is
324.10applicable, in the county where the qualifying property is located. The notice must state
324.11that it serves as a notice of lien and that it includes deferrals under this section for future
324.12years. The commissioner shall prescribe the form of the notice. Execution of the notice
324.13by the original or facsimile signature of the commissioner or a delegate entitles them to
324.14be recorded, and no other attestation, certification, or acknowledgment is necessary. The
324.15homeowner shall pay the recording or filing fees for the notice, which, notwithstanding
324.16section 357.18, shall be paid by the homeowner at the time of satisfaction of the lien.
324.17EFFECTIVE DATE.This section is effective for notices that are both executed
324.18and recorded after June 30, 2013.

324.19    Sec. 16. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
324.20    Subd. 3. Occupation tax; other ores. Every person engaged in the business of
324.21mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
324.22taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
324.23in this subdivision. For purposes of this subdivision, mining includes the application of
324.24hydrometallurgical processes. Hydrometallurgical processes are processes that extract
324.25the ores, metals, or minerals, by use of aqueous solutions that leach, concentrate, and
324.26recover the ore, metal, or mineral. The tax is determined in the same manner as the tax
324.27imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17,
324.28subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must
324.29be computed by applying to taxable income the rate of 2.45 percent. A person subject
324.30to occupation tax under this section shall apportion its net income on the basis of the
324.31percentage obtained by taking the sum of:
324.32    (1) 75 percent of the percentage which the sales made within this state in connection
324.33with the trade or business during the tax period are of the total sales wherever made in
324.34connection with the trade or business during the tax period;
325.1    (2) 12.5 percent of the percentage which the total tangible property used by the
325.2taxpayer in this state in connection with the trade or business during the tax period is of
325.3the total tangible property, wherever located, used by the taxpayer in connection with the
325.4trade or business during the tax period; and
325.5    (3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
325.6in this state or paid in respect to labor performed in this state in connection with the trade
325.7or business during the tax period are of the taxpayer's total payrolls paid or incurred in
325.8connection with the trade or business during the tax period.
325.9    The tax is in addition to all other taxes.
325.10EFFECTIVE DATE.This section is effective the day following final enactment.

325.11    Sec. 17. Minnesota Statutes 2012, section 298.018, is amended to read:
325.12298.018 DISTRIBUTION OF PROCEEDS.
325.13    Subdivision 1. Within taconite assistance area. The proceeds of the tax paid
325.14under sections 298.015 and 298.016 on ores, metals, or minerals and energy resources
325.15 mined or extracted within the taconite assistance area defined in section 273.1341, shall
325.16be allocated as follows:
325.17    (1) five percent to the city or town within which the minerals or energy resources
325.18are mined or extracted;
325.19    (2) ten percent to the taconite municipal aid account to be distributed as provided
325.20in section 298.282;
325.21    (3) ten percent to the school district within which the minerals or energy resources
325.22are mined or extracted;
325.23    (4) 20 percent to a group of school districts comprised of those school districts
325.24wherein the mineral or energy resource was mined or extracted or in which there is a
325.25qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion
325.26to school district indexes as follows: for each school district, its pupil units determined
325.27under section 126C.05 for the prior school year shall be multiplied by the ratio of the
325.28average adjusted net tax capacity per pupil unit for school districts receiving aid under
325.29this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
325.30ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
325.31Each district shall receive that portion of the distribution which its index bears to the sum
325.32of the indices for all school districts that receive the distributions;
325.33    (5) 20 percent to the county within which the minerals or energy resources are
325.34mined or extracted;
326.1    (6) 20 percent to St. Louis County acting as the counties' fiscal agent to be
326.2distributed as provided in sections 273.134 to 273.136;
326.3    (7) five percent to the Iron Range Resources and Rehabilitation Board for the
326.4purposes of section 298.22;
326.5    (8) five percent to the Douglas J. Johnson economic protection trust fund; and
326.6    (9) five percent to the taconite environmental protection fund.
326.7    The proceeds of the tax shall be distributed on July 15 each year.
326.8    Subd. 2. Outside taconite assistance area. The proceeds of the tax paid under
326.9sections 298.015 and 298.016 on ores, metals, or minerals and energy resources mined
326.10or extracted outside of the taconite assistance area defined in section 273.1341, shall
326.11be deposited in the general fund.
326.12EFFECTIVE DATE.This section is effective the day following final enactment.

326.13    Sec. 18. Minnesota Statutes 2012, section 373.01, subdivision 1, is amended to read:
326.14    Subdivision 1. Public corporation; listed powers. (a) Each county is a body politic
326.15and corporate and may:
326.16    (1) Sue and be sued.
326.17    (2) Acquire and hold real and personal property for the use of the county, and lands
326.18sold for taxes as provided by law.
326.19    (3) Purchase and hold for the benefit of the county real estate sold by virtue of
326.20judicial proceedings, to which the county is a party.
326.21    (4) Sell, lease, and convey real or personal estate owned by the county, and give
326.22contracts or options to sell, lease, or convey it, and make orders respecting it as deemed
326.23conducive to the interests of the county's inhabitants.
326.24    (5) Make all contracts and do all other acts in relation to the property and concerns
326.25of the county necessary to the exercise of its corporate powers.
326.26    (b) No sale, lease, or conveyance of real estate owned by the county, except the lease
326.27of a residence acquired for the furtherance of an approved capital improvement project, nor
326.28any contract or option for it, shall be valid, without first advertising for bids or proposals in
326.29the official newspaper of the county for three consecutive weeks and once in a newspaper
326.30of general circulation in the area where the property is located. The notice shall state the
326.31time and place of considering the proposals, contain a legal description of any real estate,
326.32and a brief description of any personal property. Leases that do not exceed $15,000 for any
326.33one year may be negotiated and are not subject to the competitive bid procedures of this
326.34section. All proposals estimated to exceed $15,000 in any one year shall be considered at
327.1the time set for the bid opening, and the one most favorable to the county accepted, but the
327.2county board may, in the interest of the county, reject any or all proposals.
327.3    (c) Sales of personal property the value of which is estimated to be $15,000 or
327.4more shall be made only after advertising for bids or proposals in the county's official
327.5newspaper, on the county's Web site, or in a recognized industry trade journal. At the same
327.6time it posts on its Web site or publishes in a trade journal, the county must publish in the
327.7official newspaper, either as part of the minutes of a regular meeting of the county board
327.8or in a separate notice, a summary of all requests for bids or proposals that the county
327.9advertises on its Web site or in a trade journal. After publication in the official newspaper,
327.10on the Web site, or in a trade journal, bids or proposals may be solicited and accepted by
327.11the electronic selling process authorized in section 471.345, subdivision 17. Sales of
327.12personal property the value of which is estimated to be less than $15,000 may be made
327.13either on competitive bids or in the open market, in the discretion of the county board.
327.14"Web site" means a specific, addressable location provided on a server connected to the
327.15Internet and hosting World Wide Web pages and other files that are generally accessible
327.16on the Internet all or most of a day.
327.17    (d) Notwithstanding anything to the contrary herein, the county may, when acquiring
327.18real property for county highway right-of-way, exchange parcels of real property of
327.19substantially similar or equal value without advertising for bids. The estimated values for
327.20these parcels shall be determined by the county assessor.
327.21    (e) Notwithstanding anything in this section to the contrary, the county may, when
327.22acquiring real property for purposes other than county highway right-of-way, exchange
327.23parcels of real property of substantially similar or equal value without advertising for
327.24bids. The estimated values for these parcels must be determined by the county assessor
327.25or a private appraisal performed by a licensed Minnesota real estate appraiser. For the
327.26purpose of determining for the county the estimated values of parcels proposed to be
327.27exchanged, the county assessor need not be licensed under chapter 82B. Before giving
327.28final approval to any exchange of land, the county board shall hold a public hearing on
327.29the exchange. At least two weeks before the hearing, the county auditor shall post a
327.30notice in the auditor's office and the official newspaper of the county of the hearing that
327.31contains a description of the lands affected.
327.32    (f) If real estate or personal property remains unsold after advertising for and
327.33consideration of bids or proposals the county may employ a broker to sell the property.
327.34The broker may sell the property for not less than 90 percent of its appraised market value
327.35as determined by the county. The broker's fee shall be set by agreement with the county but
327.36may not exceed ten percent of the sale price and must be paid from the proceeds of the sale.
328.1    (g) A county or its agent may rent a county-owned residence acquired for the
328.2furtherance of an approved capital improvement project subject to the conditions set
328.3by the county board and not subject to the conditions for lease otherwise provided by
328.4paragraph (a), clause (4), and paragraphs (b), (c), (d), (f), and (h).
328.5    (h) In no case shall lands be disposed of without there being reserved to the county
328.6all iron ore and other valuable minerals in and upon the lands, with right to explore for,
328.7mine and remove the iron ore and other valuable minerals, nor shall the minerals and
328.8mineral rights be disposed of, either before or after disposition of the surface rights,
328.9otherwise than by mining lease, in similar general form to that provided by section 93.20
328.10for mining leases affecting state lands. The lease shall be for a term not exceeding 50
328.11years, and be issued on a royalty basis, the royalty to be not less than 25 cents per ton of
328.122,240 pounds, and fix a minimum amount of royalty payable during each year, whether
328.13mineral is removed or not. Prospecting options for mining leases may be granted for
328.14periods not exceeding one year. The options shall require, among other things, periodical
328.15showings to the county board of the results of exploration work done.
328.16    (i) Notwithstanding anything in this subdivision to the contrary, the county may,
328.17when selling real property owned in fee simple that cannot be improved because of
328.18noncompliance with local ordinances regarding minimum area, shape, frontage, or access,
328.19proceed to sell the nonconforming parcel without advertising for bid. At the county's
328.20discretion, the real property may be restricted to sale to adjoining landowners or may be
328.21sold to any other interested party. The property shall be sold to the highest bidder, but in no
328.22case shall the property be sold for less than 90 percent of its fair market value as determined
328.23by the county assessor. All owners of land adjoining the land to be sold shall be given a
328.24written notice at least 30 days before the sale. This paragraph shall be liberally construed to
328.25encourage the sale of nonconforming real property and promote its return to the tax roles.
328.26EFFECTIVE DATE.This section is effective the day following final enactment.

328.27    Sec. 19. REPEALER.
328.28Minnesota Statutes 2012, sections 272.69; and 273.11, subdivisions 1a and 22, are
328.29repealed.
328.30EFFECTIVE DATE.This section is effective the day following final enactment.


329.3    Section 1. Minnesota Statutes 2012, section 16A.46, is amended to read:
329.416A.46 LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.
329.5    Subdivision 1. Duplicate warrant. The commissioner may issue a duplicate of an
329.6unpaid warrant to an owner if the owner certifies that the original was lost or destroyed. The
329.7commissioner may require certification be documented by affidavit. The commissioner
329.8may refuse to issue a duplicate of an unpaid state warrant. If the commissioner acts in
329.9good faith, the commissioner is not liable, whether the application is granted or denied.
329.10    Subd. 2. Original warrant is void. When the duplicate is issued, the original is
329.11void. The commissioner may require an indemnity bond from the applicant to the state for
329.12double the amount of the warrant for anyone damaged by the issuance of the duplicate.
329.13The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the
329.14commissioner acts in good faith the commissioner is not liable, whether the application is
329.15granted or denied is not liable to any holder who took the void original warrant for value,
329.16whether or not the commissioner required an indemnity bond from the applicant.
329.17    Subd. 3. Unpaid refund or rebate. For an unpaid refund or rebate issued under a
329.18tax law administered by the commissioner of revenue that has been lost or destroyed, an
329.19affidavit is not required for the commissioner to issue a duplicate if the duplicate is issued
329.20to the same name and Social Security number as the original warrant and that information
329.21is verified on a tax return filed by the recipient.
329.22EFFECTIVE DATE.This section is effective the day following final enactment.

329.23    Sec. 2. Minnesota Statutes 2012, section 270C.38, subdivision 1, is amended to read:
329.24    Subdivision 1. Sufficient notice. (a) If no method of notification of a written
329.25determination or action of the commissioner is otherwise specifically provided for by
329.26law, notice of the determination or action sent postage prepaid by United States mail to
329.27the taxpayer or other person affected by the determination or action at the taxpayer's
329.28or person's last known address, is sufficient. If the taxpayer or person being notified is
329.29deceased or is under a legal disability, or, in the case of a corporation being notified that
329.30has terminated its existence, notice to the last known address of the taxpayer, person, or
329.31corporation is sufficient, unless the department has been provided with a new address by a
329.32party authorized to receive notices from the commissioner.
330.1(b) If a taxpayer or other person agrees to accept notification by electronic means,
330.2notice of a determination or action of the commissioner sent by electronic mail to the
330.3taxpayer's or person's last known electronic mailing address as provided for in section
330.4325L.08 is sufficient.
330.5EFFECTIVE DATE.This section is effective the day following final enactment.

330.6    Sec. 3. Minnesota Statutes 2012, section 270C.42, subdivision 2, is amended to read:
330.7    Subd. 2. Penalty for failure to pay electronically. In addition to other applicable
330.8penalties imposed by law, after notification from the commissioner to the taxpayer that
330.9payments for a tax payable to the commissioner are required to be made by electronic
330.10means, and the payments are remitted by some other means, there is a penalty in the
330.11amount of five percent of each payment that should have been remitted electronically.
330.12After the commissioner's initial notification to the taxpayer that payments are required to
330.13be made by electronic means, the commissioner is not required to notify the taxpayer in
330.14subsequent periods if the initial notification specified the amount of tax liability at which a
330.15taxpayer is required to remit payments by electronic means. The penalty can be abated
330.16under the abatement procedures prescribed in section 270C.34 if the failure to remit the
330.17payment electronically is due to reasonable cause. The penalty bears interest at the rate
330.18specified in section 270C.40 from the due date of the payment of the tax provided in
330.19section 270C.40, subdivision 3, to the date of payment of the penalty.
330.20EFFECTIVE DATE.This section is effective the day following final enactment.

330.21    Sec. 4. Minnesota Statutes 2012, section 287.385, subdivision 7, is amended to read:
330.22    Subd. 7. Interest on penalties. A penalty imposed under this chapter bears interest
330.23from the date payment was required to be paid, including any extensions, provided in
330.24section 270C.40, subdivision 3, to the date of payment of the penalty.
330.25EFFECTIVE DATE.This section is effective the day following final enactment.

330.26    Sec. 5. Minnesota Statutes 2012, section 289A.55, subdivision 9, is amended to read:
330.27    Subd. 9. Interest on penalties. (a) A penalty imposed under section 289A.60,
330.28subdivision 1 , 2, 2a, 4, 5, 6, or 21 bears interest from the date the return or payment
330.29was required to be filed or paid, including any extensions provided in section 270C.40,
330.30subdivision 3, to the date of payment of the penalty.
331.1(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
331.260 days from the date of notice. In that case interest is imposed from the date of notice
331.3to the date of payment.
331.4EFFECTIVE DATE.This section is effective the day following final enactment.

331.5    Sec. 6. Minnesota Statutes 2012, section 289A.60, subdivision 4, is amended to read:
331.6    Subd. 4. Substantial understatement of liability; penalty. (a) The commissioner
331.7of revenue shall impose a penalty for substantial understatement of any tax payable to the
331.8commissioner, except a tax imposed under chapter 297A.
331.9(b) There must be added to the tax an amount equal to 20 percent of the amount of any
331.10underpayment attributable to the understatement. There is a substantial understatement of
331.11tax for the period if the amount of the understatement for the period exceeds the greater of:
331.12(1) ten percent of the tax required to be shown on the return for the period; or
331.13(2)(i) $10,000 in the case of a mining company or a corporation, other than an S
331.14corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or
331.15section 298.01 or 298.015, or
331.16(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or
331.17a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015.
331.18(c) For a corporation, other than an S corporation, there is also a substantial
331.19understatement of tax for any taxable year if the amount of the understatement for the
331.20taxable year exceeds the lesser of:
331.21(1) ten percent of the tax required to be shown on the return for the taxable year
331.22(or, if greater, $10,000); or
331.23(2) $10,000,000.
331.24(d) The term "understatement" means the excess of the amount of the tax required
331.25to be shown on the return for the period, over the amount of the tax imposed that is
331.26shown on the return. The excess must be determined without regard to items to which
331.27subdivision 27 applies. The amount of the understatement shall be reduced by that part of
331.28the understatement that is attributable to the tax treatment of any item by the taxpayer if
331.29(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to
331.30which the relevant facts affecting the item's tax treatment are adequately disclosed in the
331.31return or in a statement attached to the return and (ii) there is a reasonable basis for the tax
331.32treatment of the item. The exception for substantial authority under clause (1) does not
331.33apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the
331.34Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment
331.35of an item attributable to a multiple-party financing transaction if the treatment does not
332.1clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B)
332.2of the Internal Revenue Code. The special rules in cases involving tax shelters provided in
332.3section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax
332.4shelter the principal purpose of which is the avoidance or evasion of state taxes.
332.5(e) The commissioner may abate all or any part of the addition to the tax provided
332.6by this section on a showing by the taxpayer that there was reasonable cause for the
332.7understatement, or part of it, and that the taxpayer acted in good faith. The additional tax
332.8and penalty shall bear interest at the rate as specified in section 270C.40 from the time
332.9the tax should have been paid until paid.
332.10EFFECTIVE DATE.This section is effective the day following final enactment.

332.11    Sec. 7. Minnesota Statutes 2012, section 296A.01, is amended by adding a subdivision
332.12to read:
332.13    Subd. 8b. Biobutanol. "Biobutanol" means isobutyl alcohol produced by
332.14fermenting agriculturally generated organic material that is to be blended with gasoline
332.15and meets either:
332.16    (1) the initial ASTM Standard Specification for Butanol for Blending with Gasoline
332.17for use as an Automotive Spark-Ignition Engine Fuel once it has been released by ASTM
332.18for general distribution; or
332.19    (2) in the absence of an ASTM Standard Specification, the following list of
332.20requirements:
332.21    (i) visually free of sediment and suspended matter;
332.22    (ii) clear and bright at the ambient temperature of 21 degrees Celsius or the ambient
332.23temperature whichever is higher;
332.24    (iii) free of any adulterant or contaminant that can render it unacceptable for its
332.25commonly used applications;
332.26    (iv) contains not less than 96 volume percent isobutyl alcohol;
332.27    (v) contains not more than 0.4 volume percent methanol;
332.28    (vi) contains not more than 1.0 volume percent water as determined by ASTM
332.29standard test method E203 or E1064;
332.30    (vii) acidity (as acetic acid) of not more than 0.007 mass percent as determined
332.31by ASTM standard test method D1613;
332.32    (viii) solvent washed gum content of not more than 5.0 milligrams per 100 milliliters
332.33as determined by ASTM standard test method D381;
332.34    (ix) sulfur content of not more than 30 parts per million as determined by ASTM
332.35standard test method D2622 or D5453; and
333.1    (x) contains not more than 4 parts per million total inorganic sulfate.

333.2    Sec. 8. Minnesota Statutes 2012, section 296A.01, subdivision 19, is amended to read:
333.3    Subd. 19. E85. "E85" means a petroleum product that is a blend of agriculturally
333.4derived denatured ethanol and gasoline or natural gasoline that typically contains not more
333.5than 85 percent ethanol by volume, but at a minimum must contain 60 51 percent ethanol by
333.6volume. For the purposes of this chapter, the energy content of E85 will be considered to be
333.782,000 BTUs per gallon. E85 produced for use as a motor fuel in alternative fuel vehicles
333.8as defined in subdivision 5 must comply with ASTM specification D5798-07 D5798-11.
333.9EFFECTIVE DATE.This section is effective the day following final enactment.

333.10    Sec. 9. Minnesota Statutes 2012, section 296A.22, subdivision 1, is amended to read:
333.11    Subdivision 1. Penalty for failure to pay tax, general rule. Upon the failure of
333.12any person to pay any tax or fee when due, a penalty of one percent per day for the first
333.13ten days of delinquency shall accrue, and thereafter the tax, fees, and penalty shall bear
333.14interest at the rate specified in section 270C.40 until paid.
333.15EFFECTIVE DATE.This section is effective the day following final enactment.

333.16    Sec. 10. Minnesota Statutes 2012, section 296A.22, subdivision 3, is amended to read:
333.17    Subd. 3. Operating without license. If any person operates as a distributor, special
333.18fuel dealer, bulk purchaser, or motor carrier without first securing the license required
333.19under this chapter, any tax or fee imposed by this chapter shall become immediately due
333.20and payable. A penalty of 25 percent is imposed upon the tax and fee due. The tax, and
333.21 fees, and penalty shall bear interest at the rate specified in section 270C.40. The penalty
333.22imposed in this subdivision shall bear interest from the date provided in section 270C.40,
333.23subdivision 3, to the date of payment of the penalty.
333.24EFFECTIVE DATE.This section is effective the day following final enactment.

333.25    Sec. 11. Minnesota Statutes 2012, section 297B.11, is amended to read:
333.26297B.11 REGISTRAR AS AGENT OF COMMISSIONER OF REVENUE;
333.27POWERS.
333.28The state commissioner of revenue is charged with the administration of the
333.29sales tax on motor vehicles. The commissioner may prescribe all rules not inconsistent
333.30with the provisions of this chapter, necessary and advisable for the proper and efficient
334.1administration of the law. The collection of this sales tax on motor vehicles shall be
334.2carried out by the motor vehicle registrar who shall act as the agent of the commissioner
334.3and who shall be subject to all rules not inconsistent with the provisions of this chapter,
334.4that may be prescribed by the commissioner.
334.5The provisions of chapters 270C, 289A, and 297A relating to the commissioner's
334.6authority to audit, assess, and collect the tax, and to issue refunds and to hear appeals,
334.7are applicable to the sales tax on motor vehicles. The commissioner may impose civil
334.8penalties as provided in chapters 289A and 297A, and the additional tax and penalties
334.9are subject to interest at the rate provided in section 270C.40 from the date provided in
334.10section 270C.40, subdivision 3, until paid.
334.11EFFECTIVE DATE.This section is effective the day following final enactment.

334.12    Sec. 12. Minnesota Statutes 2012, section 297E.14, subdivision 7, is amended to read:
334.13    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297E.12,
334.14subdivision 1 , 2, 3, 4, or 5, bears interest from the date the return or payment was required
334.15to be filed or paid, including any extensions provided in section 270C.40, subdivision
334.163, to the date of payment of the penalty.
334.17(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
334.18ten days from the date of notice. In that case interest is imposed from the date of notice
334.19to the date of payment.
334.20EFFECTIVE DATE.This section is effective the day following final enactment.

334.21    Sec. 13. Minnesota Statutes 2012, section 297F.09, subdivision 9, is amended to read:
334.22    Subd. 9. Interest. The amount of tax not timely paid, together with any penalty
334.23imposed in this section, bears interest at the rate specified in section 270C.40 from the
334.24time such tax should have been paid until paid. The penalty imposed in this section bears
334.25interest at the rate specified in section 270C.40 from the date provided in section 270C.40,
334.26subdivision 3, to the date of payment of the penalty. Any interest and penalty is added to
334.27the tax and collected as a part of it.
334.28EFFECTIVE DATE.This section is effective the day following final enactment.

334.29    Sec. 14. Minnesota Statutes 2012, section 297F.18, subdivision 7, is amended to read:
334.30    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297F.19,
334.31subdivisions 2 to 7, bears interest from the date the return or payment was required to be
335.1filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
335.2date of payment of the penalty.
335.3(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
335.4ten days from the date of the notice. In that case interest is imposed from the date of notice
335.5to the date of payment.
335.6EFFECTIVE DATE.This section is effective the day following final enactment.

335.7    Sec. 15. Minnesota Statutes 2012, section 297G.09, subdivision 8, is amended to read:
335.8    Subd. 8. Interest. The amount of tax not timely paid, together with any penalty
335.9imposed by this chapter, bears interest at the rate specified in section 270C.40 from the
335.10time the tax should have been paid until paid. Any penalty imposed by this chapter bears
335.11interest from the date provided in section 270C.40, subdivision 3, to the date of payment
335.12of the penalty. Any interest and penalty is added to the tax and collected as a part of it.
335.13EFFECTIVE DATE.This section is effective the day following final enactment.

335.14    Sec. 16. Minnesota Statutes 2012, section 297G.17, subdivision 7, is amended to read:
335.15    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297G.18,
335.16subdivisions 2 to 7, bears interest from the date the return or payment was required to be
335.17filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
335.18date of payment of the penalty.
335.19(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
335.20ten days from the date of the notice. In that case interest is imposed from the date of notice
335.21to the date of payment.
335.22EFFECTIVE DATE.This section is effective the day following final enactment.

335.23    Sec. 17. Minnesota Statutes 2012, section 297I.80, subdivision 1, is amended to read:
335.24    Subdivision 1. Payable to commissioner. (a) When interest is required under this
335.25section, interest is computed at the rate specified in section 270C.40.
335.26(b) If a tax or surcharge is not paid within the time named by law for payment, the
335.27unpaid tax or surcharge bears interest from the date the tax or surcharge should have been
335.28paid until the date the tax or surcharge is paid.
335.29(c) Whenever a taxpayer is liable for additional tax or surcharge because of a
335.30redetermination by the commissioner or other reason, the additional tax or surcharge
335.31bears interest from the time the tax or surcharge should have been paid until the date the
335.32tax or surcharge is paid.
336.1(d) A penalty bears interest from the date the return or payment was required to be
336.2filed or paid provided in section 270C.40, subdivision 3, to the date of payment of the
336.3penalty.
336.4EFFECTIVE DATE.This section is effective the day following final enactment.

336.5    Sec. 18. Minnesota Statutes 2012, section 469.319, subdivision 4, is amended to read:
336.6    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
336.7chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
336.8file an amended return with the commissioner of revenue and pay any taxes required
336.9to be repaid within 30 days after becoming subject to repayment under this section.
336.10The amount required to be repaid is determined by calculating the tax for the period or
336.11periods for which repayment is required without regard to the exemptions and credits
336.12allowed under section 469.315.
336.13    (b) For the repayment of taxes imposed under chapter 297B, a business must pay any
336.14taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of
336.15revenue, within 30 days after becoming subject to repayment under this section.
336.16    (c) For the repayment of property taxes, the county auditor shall prepare a tax
336.17statement for the business, applying the applicable tax extension rates for each payable
336.18year and provide a copy to the business and to the taxpayer of record. The business must
336.19pay the taxes to the county treasurer within 30 days after receipt of the tax statement. The
336.20business or the taxpayer of record may appeal the valuation and determination of the
336.21property tax to the Tax Court within 30 days after receipt of the tax statement.
336.22    (d) The provisions of chapters 270C and 289A relating to the commissioner's
336.23authority to audit, assess, and collect the tax and to hear appeals are applicable to the
336.24repayment required under paragraphs (a) and (b). The commissioner may impose civil
336.25penalties as provided in chapter 289A, and the additional tax and penalties are subject
336.26to interest at the rate provided in section 270C.40,. The additional tax shall bear interest
336.27 from 30 days after becoming subject to repayment under this section until the date the
336.28tax is paid. Any penalty imposed pursuant to this section shall bear interest from the date
336.29provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
336.30    (e) If a property tax is not repaid under paragraph (c), the county treasurer shall
336.31add the amount required to be repaid to the property taxes assessed against the property
336.32for payment in the year following the year in which the auditor provided the statement
336.33under paragraph (c).
336.34    (f) For determining the tax required to be repaid, a reduction of a state or local sales or
336.35use tax is deemed to have been received on the date that the good or service was purchased
337.1or first put to a taxable use. In the case of an income tax or franchise tax, including the
337.2credit payable under section 469.318, a reduction of tax is deemed to have been received
337.3for the two most recent tax years that have ended prior to the date that the business became
337.4subject to repayment under this section. In the case of a property tax, a reduction of tax is
337.5deemed to have been received for the taxes payable in the year that the business became
337.6subject to repayment under this section and for the taxes payable in the prior year.
337.7    (g) The commissioner may assess the repayment of taxes under paragraph (d) any
337.8time within two years after the business becomes subject to repayment under subdivision
337.91, or within any period of limitations for the assessment of tax under section 289A.38,
337.10whichever period is later. The county auditor may send the statement under paragraph
337.11(c) any time within three years after the business becomes subject to repayment under
337.12subdivision 1.
337.13    (h) A business is not entitled to any income tax or franchise tax benefits, including
337.14refundable credits, for any part of the year in which the business becomes subject to
337.15repayment under this section nor for any year thereafter. Property is not exempt from tax
337.16under section 272.02, subdivision 64, for any taxes payable in the year following the year
337.17in which the property became subject to repayment under this section nor for any year
337.18thereafter. A business is not eligible for any sales tax benefits beginning with goods
337.19or services purchased or first put to a taxable use on the day that the business becomes
337.20subject to repayment under this section.
337.21EFFECTIVE DATE.This section is effective the day following final enactment.

337.22    Sec. 19. Minnesota Statutes 2012, section 469.340, subdivision 4, is amended to read:
337.23    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
337.24chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
337.25file an amended return with the commissioner of revenue and pay any taxes required to be
337.26repaid within 30 days after ceasing to do business in the zone. The amount required to be
337.27repaid is determined by calculating the tax for the period or periods for which repayment
337.28is required without regard to the exemptions and credits allowed under section 469.336.
337.29(b) For the repayment of property taxes, the county auditor shall prepare a tax
337.30statement for the business, applying the applicable tax extension rates for each payable
337.31year and provide a copy to the business. The business must pay the taxes to the county
337.32treasurer within 30 days after receipt of the tax statement. The taxpayer may appeal the
337.33valuation and determination of the property tax to the Tax Court within 30 days after
337.34receipt of the tax statement.
338.1(c) The provisions of chapters 270C and 289A relating to the commissioner's
338.2authority to audit, assess, and collect the tax and to hear appeals are applicable to the
338.3repayment required under paragraph (a). The commissioner may impose civil penalties as
338.4provided in chapter 289A, and the additional tax and penalties are subject to interest at the
338.5rate provided in section 270C.40,. The additional tax shall bear interest from 30 days after
338.6ceasing to do business in the biotechnology and health sciences industry zone until the
338.7date the tax is paid. Any penalty imposed pursuant to this section shall bear interest from
338.8the date provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
338.9(d) If a property tax is not repaid under paragraph (b), the county treasurer shall add
338.10the amount required to be repaid to the property taxes assessed against the property for
338.11payment in the year following the year in which the treasurer discovers that the business
338.12ceased to operate in the biotechnology and health sciences industry zone.
338.13(e) For determining the tax required to be repaid, a tax reduction is deemed to have
338.14been received on the date that the tax would have been due if the taxpayer had not been
338.15entitled to the exemption, or on the date a refund was issued for a refundable credit.
338.16(f) The commissioner may assess the repayment of taxes under paragraph (c) any
338.17time within two years after the business ceases to operate in the biotechnology and health
338.18sciences industry zone, or within any period of limitations for the assessment of tax under
338.19section 289A.38, whichever period is later.
338.20EFFECTIVE DATE.This section is effective the day following final enactment.