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; requiring labor peace agreements on
1.34certain qualifying projects; making conforming, policy, and technical changes to
1.35tax provisions; requiring studies and reports; appropriating money;amending
1.36Minnesota Statutes 2012, sections 16A.152, subdivision 2; 16A.46; 38.18;
1.3740A.15, subdivision 2; 69.011, subdivision 1; 69.021, subdivisions 7, 8, by
1.38adding a subdivision; 88.51, subdivision 3; 103B.102, subdivision 3; 103B.245,
1.39subdivision 3; 103B.251, subdivision 8; 103B.335; 103B.3369, subdivision 5;
2.1103B.635, subdivision 2; 103B.691, subdivision 2; 103C.501, subdivision 4;
2.2103D.905, subdivisions 2, 3, 8; 103F.405, subdivision 1; 116J.8737, subdivisions
2.31, 2, 8; 117.025, subdivision 7; 118A.04, subdivision 3; 118A.05, subdivision
2.45; 123A.455, subdivision 1; 123B.75, subdivision 5; 126C.48, subdivision 8;
2.5127A.45, subdivision 2; 127A.48, subdivision 1; 138.053; 144F.01, subdivision
2.64; 162.07, subdivisions 3, 4; 163.04, subdivision 3; 163.051; 163.06, subdivision
2.76; 165.10, subdivision 1; 168.012, subdivision 9, by adding a subdivision;
2.8216C.436, subdivision 7; 237.52, subdivision 3, by adding a subdivision;
2.9270.077; 270.41, subdivision 5; 270B.01, subdivision 8; 270B.12, subdivision
2.104; 270C.34, subdivision 1; 270C.38, subdivision 1; 270C.42, subdivision 2;
2.11270C.56, subdivision 1; 271.06, by adding a subdivision; 272.01, subdivision 2;
2.12272.02, subdivisions 39, 97, by adding subdivisions; 272.03, subdivision 9, by
2.13adding subdivisions; 273.032; 273.11, subdivision 1, by adding a subdivision;
2.14273.114, subdivision 6; 273.124, subdivisions 3a, 13; 273.13, subdivisions
2.1521b, 23, 25; 273.1398, subdivisions 3, 4; 273.19, subdivision 1; 273.372,
2.16subdivision 4; 273.39; 275.011, subdivision 1; 275.077, subdivision 2; 275.71,
2.17subdivision 4; 276.04, subdivision 2; 276A.01, subdivisions 10, 12, 13, 15;
2.18276A.06, subdivision 10; 279.01, subdivision 1, by adding a subdivision; 279.02;
2.19279.06, subdivision 1; 287.05, by adding a subdivision; 287.08; 287.20, by
2.20adding a subdivision; 287.23, subdivision 1; 287.385, subdivision 7; 289A.02,
2.21subdivision 7; 289A.08, subdivisions 1, 3, 7; 289A.10, subdivision 1, by adding
2.22a subdivision; 289A.12, subdivision 14, by adding a subdivision; 289A.18, by
2.23adding a subdivision; 289A.20, subdivisions 3, 4, by adding a subdivision;
2.24289A.26, subdivisions 3, 4, 7, 9; 289A.55, subdivision 9; 289A.60, subdivision
2.254; 290.01, subdivisions 5, 19, as amended, 19a, 19b, 19c, 19d, 31, as amended,
2.26by adding subdivisions; 290.06, subdivisions 2c, 2d, by adding subdivisions;
2.27290.067, subdivisions 1, 2a; 290.0671, subdivision 1; 290.0675, subdivision 1;
2.28290.0677, subdivision 2; 290.068, subdivisions 3, 6a; 290.0681, subdivisions 1,
2.293, 4, 5; 290.091, subdivision 2; 290.0921, subdivision 3; 290.0922, subdivision 1;
2.30290.17, subdivision 4; 290.21, subdivision 4; 290.9705, subdivision 1; 290A.03,
2.31subdivisions 3, 15, as amended; 290A.04, subdivisions 2, 2a, 4; 290B.04,
2.32subdivision 2; 290C.02, subdivision 6; 290C.05; 290C.07; 291.005, subdivision
2.331; 291.03, subdivisions 1, 8, 9, 10, 11, by adding a subdivision; 296A.01,
2.34subdivision 19, by adding a subdivision; 296A.22, subdivisions 1, 3; 297A.61,
2.35subdivisions 3, 4, by adding a subdivision; 297A.64, subdivisions 1, 2; 297A.66,
2.36by adding a subdivision; 297A.665; 297A.668, by adding a subdivision;
2.37297A.67, subdivision 7; 297A.68, subdivision 5; 297A.70, subdivisions 4, 8, by
2.38adding subdivisions; 297A.71, by adding subdivisions; 297A.75, subdivisions 1,
2.392, 3; 297A.815, subdivision 3; 297A.993, subdivisions 1, 2; 297B.11; 297E.021,
2.40subdivision 2; 297E.14, subdivision 7; 297F.01, subdivisions 3, 19, 23, by
2.41adding a subdivision; 297F.05, subdivisions 1, 3, 4, by adding a subdivision;
2.42297F.09, subdivision 9; 297F.18, subdivision 7; 297F.24, subdivision 1; 297F.25,
2.43subdivision 1; 297G.03, subdivision 1, by adding a subdivision; 297G.04;
2.44297G.09, subdivision 8; 297G.17, subdivision 7; 297I.05, subdivisions 7, 11, 12;
2.45297I.30, subdivisions 1, 2; 297I.80, subdivision 1; 298.01, subdivisions 3, 3b,
2.464; 298.018; 298.227, as amended; 298.24, subdivision 1; 298.28, subdivisions
2.474, 6, 10; 298.75, subdivision 2; 325D.32, subdivision 2; 353G.08, subdivision
2.482; 365.025, subdivision 4; 366.095, subdivision 1; 366.27; 368.01, subdivision
2.4923; 368.47; 370.01; 373.01, subdivisions 1, 3; 373.40, subdivisions 1, 2, 4;
2.50375.167, subdivision 1; 375.18, subdivision 3; 375.555; 383B.152; 383B.245;
2.51383B.73, subdivision 1; 383D.41, by adding a subdivision; 383E.20; 383E.23;
2.52385.31; 394.36, subdivision 1; 398A.04, subdivision 8; 401.05, subdivision 3;
2.53403.02, subdivision 21, by adding subdivisions; 403.06, subdivision 1a; 403.11,
2.54subdivision 1, by adding a subdivision; 410.32; 412.221, subdivision 2; 412.301;
2.55428A.02, subdivision 1; 430.102, subdivision 2; 447.10; 450.19; 450.25;
2.56458A.10; 458A.31, subdivision 1; 465.04; 469.033, subdivision 6; 469.034,
2.57subdivision 2; 469.053, subdivisions 4, 4a, 6; 469.071, subdivision 5; 469.107,
2.58subdivision 1; 469.169, by adding a subdivision; 469.176, subdivisions 4c, 4g,
3.16; 469.177, by adding a subdivision; 469.180, subdivision 2; 469.187; 469.190,
3.2subdivision 7, by adding a subdivision; 469.206; 469.319, subdivision 4; 469.340,
3.3subdivision 4; 471.24; 471.571, subdivisions 1, 2; 471.73; 473.325, subdivision
3.42; 473.39, by adding a subdivision; 473.629; 473.661, subdivision 3; 473.667,
3.5subdivision 9; 473.671; 473.711, subdivision 2a; 473F.02, subdivisions 12, 14,
3.615, 23; 473F.08, subdivision 10, by adding a subdivision; 474A.04, subdivision
3.71a; 474A.062; 474A.091, subdivision 3a; 475.521, subdivisions 1, 2, 4; 475.53,
3.8subdivisions 1, 3, 4; 475.58, subdivisions 2, 3b; 475.73, subdivision 1; 477A.011,
3.9subdivisions 20, 30, 32, 34, 42, by adding subdivisions; 477A.0124, subdivision
3.102; 477A.013, subdivisions 8, 9, by adding a subdivision; 477A.015; 477A.03,
3.11subdivisions 2a, 2b, by adding a subdivision; 641.23; 641.24; 645.44, by adding
3.12a subdivision; Laws 1971, chapter 773, section 1, subdivision 2, as amended;
3.13Laws 1988, chapter 645, section 3, as amended; Laws 1993, chapter 375, article
3.149, section 46, subdivisions 2, as amended, 5, as amended; Laws 1998, chapter
3.15389, article 8, section 43, subdivisions 1, 3, as amended, 5, as amended; Laws
3.161999, chapter 243, article 6, section 11; Laws 2002, chapter 377, article 3, section
3.1725, as amended; Laws 2005, First Special Session chapter 3, article 5, section
3.1837, subdivisions 2, 4; Laws 2008, chapter 366, article 5, sections 26; 33; 34, as
3.19amended; article 7, section 19, subdivision 3, as amended; Laws 2010, chapter
3.20216, section 55; Laws 2010, chapter 389, article 1, section 12; article 5, section 6,
3.21subdivisions 4, 6; Laws 2010, First Special Session chapter 1, article 13, section 4,
3.22subdivision 1, as amended; proposing coding for new law in Minnesota Statutes,
3.23chapters 116C; 287; 290; 290A; 292; 295; 297I; 403; 435; 469; proposing coding
3.24for new law as Minnesota Statutes, chapter 297J; repealing Minnesota Statutes
3.252012, sections 16A.725; 256.9658; 272.69; 273.11, subdivisions 1a, 22; 276A.01,
3.26subdivision 11; 289A.60, subdivision 31; 290.01, subdivision 6b; 290.06,
3.27subdivision 22a; 290.0672; 290.0921, subdivision 7; 383A.80, subdivision 4;
3.28383B.80, subdivision 4; 428A.101; 428A.21; 473F.02, subdivision 13; 477A.011,
3.29subdivisions 2a, 19, 21, 29, 31, 32, 33, 36, 39, 40, 41, 42; 477A.013, subdivisions
3.3011, 12; 477A.0133; 477A.0134; Laws 2006, chapter 259, article 11, section 3, as
3.31amended; Laws 2009, chapter 88, article 4, section 23, as amended.
3.32BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:


3.35    Section 1. Minnesota Statutes 2012, section 16A.152, subdivision 2, is amended to read:
3.36    Subd. 2. Additional revenues; priority. (a) If on the basis of a forecast of general
3.37fund revenues and expenditures, the commissioner of management and budget determines
3.38that there will be a positive unrestricted budgetary general fund balance at the close of
3.39the biennium, the commissioner of management and budget must allocate money to the
3.40following accounts and purposes in priority order:
3.41    (1) the cash flow account established in subdivision 1 until that account reaches
3.42$350,000,000;
3.43    (2) the budget reserve account established in subdivision 1a until that account
3.44reaches $653,000,000;
3.45    (3) the amount necessary to increase the aid payment schedule for school district
3.46aids 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.015, is amended to read:
38.10477A.015 PAYMENT DATES.
38.11The commissioner of revenue shall make the payments of local government aid to
38.12affected taxing authorities in two installments on July 20 and December 26 annually.
38.13When the commissioner of public safety determines that a local government has
38.14suffered financial hardship due to a natural disaster, the commissioner of public safety
38.15shall notify the commissioner of revenue, who shall make payments of aids under sections
38.16477A.011 to 477A.014, which are otherwise due on December 26, as soon as is practical
38.17after the determination is made but not before July 20.
38.18The commissioner may pay all or part of the payments of aids under sections
38.19477A.011 to 477A.014, which are due on December 26 at any time after August 15 if a
38.20local government requests such payment as being necessary for meeting its cash flow
38.21needs. For aids payable in 2013 only, a city that is located in an area deemed a disaster
38.22area during the month of April 2013, as defined in section 12A.01, subdivision 5, shall
38.23receive its December 26, 2013 payment with its July 20, 2013 payment.
38.24EFFECTIVE DATE.This section is effective for aids payable in calendar year
38.252013 and thereafter.

38.26    Sec. 17. Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read:
38.27    Subd. 2a. Cities. For aids payable in 2013 2014 and thereafter, the total aid paid
38.28under section 477A.013, subdivision 9, is $426,438,012 $506,438,012. For aids payable
38.29in 2015 and thereafter, the total aid paid under section 477A.013, subdivision 9, is the
38.30amount certified under that section in the previous year multiplied by the inflation
38.31adjustment under subdivision 6.
38.32EFFECTIVE DATE.This section is effective for aids payable in calendar year
38.332014 and thereafter.

39.1    Sec. 18. Minnesota Statutes 2012, section 477A.03, subdivision 2b, is amended to read:
39.2    Subd. 2b. Counties. (a) For aids payable in 2013 2014 and thereafter, the total aid
39.3payable under section 477A.0124, subdivision 3, is $80,795,000 $95,795,000. Each
39.4calendar year, $500,000 of this appropriation shall be retained by the commissioner
39.5of revenue to make reimbursements to the commissioner of management and budget
39.6for payments made under section 611.27. For calendar year 2004, the amount shall
39.7be in addition to the payments authorized under section 477A.0124, subdivision 1.
39.8For calendar year 2005 and subsequent years, the amount shall be deducted from the
39.9appropriation under this paragraph. The reimbursements shall be to defray the additional
39.10costs associated with court-ordered counsel under section 611.27. Any retained amounts
39.11not used for reimbursement in a year shall be included in the next distribution of county
39.12need aid that is certified to the county auditors for the purpose of property tax reduction
39.13for the next taxes payable year.
39.14    (b) For aids payable in 2013 2014 and thereafter, the total aid under section
39.15477A.0124, subdivision 4 , is $84,909,575 $99,909,575. The commissioner of management
39.16and budget shall bill the commissioner of revenue for the cost of preparation of local impact
39.17notes as required by section 3.987, not to exceed $207,000 in each fiscal year 2004 and
39.18thereafter. The commissioner of education shall bill the commissioner of revenue for the
39.19cost of preparation of local impact notes for school districts as required by section 3.987,
39.20not to exceed $7,000 in each fiscal year 2004 and thereafter. The commissioner of revenue
39.21shall deduct the amounts billed under this paragraph from the appropriation under this
39.22paragraph. The amounts deducted are appropriated to the commissioner of management
39.23and budget and the commissioner of education for the preparation of local impact notes.
39.24EFFECTIVE DATE.This section is effective for aid payable in 2014 and thereafter.

39.25    Sec. 19. Minnesota Statutes 2012, section 477A.03, is amended by adding a
39.26subdivision to read:
39.27    Subd. 6. Inflation adjustment. In 2015 and thereafter, the amount paid under
39.28subdivision 2a shall be multiplied by an amount equal to one plus the sum of (1) the
39.29percentage increase in the implicit price deflator for government expenditures and gross
39.30investment for state and local government purchases as prepared by the United States
39.31Department of Commerce, for the 12-month period ending March 31 of the previous
39.32calendar year, and (2) the percentage increase in total city population for the most recently
39.33available years as of January 15 of the current year. The percentage increase in this
39.34subdivision shall not be less than 2.5 percent or greater than five percent.
40.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
40.22014 and thereafter.

40.3    Sec. 20. REPEALER.
40.4(a) Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33,
40.536, 39, 40, 41, and 42; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, are
40.6repealed.
40.7(b) Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008, chapter
40.8154, article 1, section 4, is repealed.
40.9EFFECTIVE DATE.This section is effective for aids payable in calendar year
40.102014 and thereafter.


40.13    Section 1. Minnesota Statutes 2012, section 103B.102, subdivision 3, is amended to
40.14read:
40.15    Subd. 3. Evaluation and report. The Board of Water and Soil Resources shall
40.16evaluate performance, financial, and activity information for each local water management
40.17entity. The board shall evaluate the entities' progress in accomplishing their adopted plans
40.18on a regular basis as determined by the board based on budget and operations of the local
40.19water management entity, but not less than once every five ten years. The board shall
40.20maintain a summary of local water management entity performance on the board's Web site.
40.21Beginning February 1, 2008, and annually thereafter, the board shall provide an analysis
40.22of local water management entity performance to the chairs of the house of representatives
40.23and senate committees having jurisdiction over environment and natural resources policy.

40.24    Sec. 2. Minnesota Statutes 2012, section 103B.335, is amended to read:
40.25103B.335 TAX LEVY AUTHORITY.
40.26    Subdivision 1. Local water planning and management. The governing body of
40.27any county, municipality, or township may levy a tax in an amount required to implement
40.28sections 103B.301 to 103B.355 or a comprehensive watershed management plan as
40.29defined in section 103B.3363.
40.30    Subd. 2. Priority programs; conservation and watershed districts. A county
40.31may levy amounts necessary to pay the reasonable increased costs to soil and water
40.32conservation districts and watershed districts of administering and implementing priority
41.1programs identified in an approved and adopted plan or a comprehensive watershed
41.2management plan as defined in section 103B.3363.

41.3    Sec. 3. Minnesota Statutes 2012, section 103B.3369, subdivision 5, is amended to read:
41.4    Subd. 5. Financial assistance. A base grant may be awarded to a county that
41.5provides a match utilizing a water implementation tax or other local source. A water
41.6implementation tax that a county intends to use as a match to the base grant must be
41.7levied at a rate sufficient to generate a minimum amount determined by the board.
41.8The board may award performance-based grants to local units of government that are
41.9responsible for implementing elements of applicable portions of watershed management
41.10plans, comprehensive plans, local water management plans, or comprehensive watershed
41.11management plans, developed or amended, adopted and approved, according to chapter
41.12103B, 103C, or 103D. Upon request by a local government unit, the board may also
41.13award performance-based grants to local units of government to carry out TMDL
41.14implementation plans as provided in chapter 114D, if the TMDL implementation plan has
41.15been incorporated into the local water management plan according to the procedures for
41.16approving comprehensive plans, watershed management plans, local water management
41.17plans, or comprehensive watershed management plans under chapter 103B, 103C, or
41.18103D, or if the TMDL implementation plan has undergone a public review process.
41.19Notwithstanding section 16A.41, the board may award performance-based grants on an
41.20advanced basis. The fee authorized in section 40A.152 may be used as a local match
41.21or as a supplement to state funding to accomplish implementation of comprehensive
41.22plans, watershed management plans, local water management plans, or comprehensive
41.23watershed management plans under chapter 103B, 103C, or 103D.

41.24    Sec. 4. Minnesota Statutes 2012, section 103C.501, subdivision 4, is amended to read:
41.25    Subd. 4. Cost-sharing funds. (a) The state board shall allocate at least 70 percent
41.26of cost-sharing funds to areas with high priority erosion, sedimentation, or water quality
41.27problems or water quantity problems due to altered hydrology. The areas must be selected
41.28based on the statewide priorities established by the state board.
41.29    (b) The allocated funds must be used for conservation practices for high priority
41.30problems identified in the comprehensive and annual work plans of the districts, for
41.31the technical assistance portion of the grant funds to leverage federal or other nonstate
41.32funds, or to address high-priority needs identified in local water management plans or
41.33comprehensive watershed management plans.
41.34    (b) The remaining cost-sharing funds may be allocated to districts as follows:
42.1    (1) for technical and administrative assistance, not more than 20 percent of the
42.2funds; and
42.3    (2) for conservation practices for lower priority erosion, sedimentation, or water
42.4quality problems.

42.5    Sec. 5. Minnesota Statutes 2012, section 103F.405, subdivision 1, is amended to read:
42.6    Subdivision 1. Authority. Each statutory or home rule charter city, town, or
42.7county that has planning and zoning authority under sections 366.10 to 366.19, 394.21
42.8to 394.37, or 462.351 to 462.365 is encouraged to adopt a soil loss ordinance. The soil
42.9loss ordinance must use the soil loss tolerance for each soil series described in the United
42.10States Soil Natural Resources Conservation Service Field Office Technical Guide, or
42.11another method approved by the Board of Water and Soil Resources, to determine the
42.12soil loss limits, but the soil loss limits must be attainable by the best practicable soil
42.13conservation practice. Ordinances adopted by local governments within the metropolitan
42.14area defined in section 473.121 must be consistent with local water management plans
42.15adopted under section 103B.235 a comprehensive plan, local water management plan, or
42.16watershed management plan developed or amended, adopted and approved, according
42.17to chapter 103B, 103C, or 103D.

42.18    Sec. 6. Minnesota Statutes 2012, section 168.012, subdivision 9, is amended to read:
42.19    Subd. 9. Manufactured homes and park trailers. Manufactured homes and park
42.20trailers shall not be taxed as motor vehicles using the public streets and highways and shall
42.21be exempt from the motor vehicle tax provisions of this chapter. Except as provided in
42.22section 273.125, manufactured homes and park trailers shall be taxed as personal property.
42.23The provisions of Minnesota Statutes 1957, section 272.02 or any other act providing for
42.24tax exemption shall be inapplicable to manufactured homes and park trailers, except such
42.25manufactured homes as are held by a licensed dealer or limited dealer and exempted as
42.26inventory under subdivision 9a. Travel trailers not conspicuously displaying current
42.27registration plates on the property tax assessment date shall be taxed as manufactured
42.28homes if occupied as human dwelling places.
42.29EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
42.30thereafter.

42.31    Sec. 7. Minnesota Statutes 2012, section 168.012, is amended by adding a subdivision
42.32to read:
43.1    Subd. 9a. Manufactured home as dealer inventory. Manufactured homes as
43.2defined in section 327.31, subdivision 6, shall be considered as dealer inventory if the
43.3home is:
43.4(1) listed as inventory and held by a licensed or limited dealer;
43.5(2) unoccupied and not available for rent;
43.6(3) may or may not be permanently connected to utilities when located in a
43.7manufactured park; and
43.8(4) may or may not be temporarily connected to utilities when located at a dealer's
43.9sales center.
43.10EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
43.11thereafter.

43.12    Sec. 8. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
43.13    Subd. 39. Economic development; public purpose. The holding of property by a
43.14political subdivision of the state for later resale for economic development purposes shall
43.15be considered a public purpose in accordance with subdivision 8 for a period not to exceed
43.16nine years, except that for property located in a city of 5,000 20,000 population or under
43.17that is located outside of the metropolitan area as defined in section 473.121, subdivision
43.182 , the period must not exceed 15 years.
43.19The holding of property by a political subdivision of the state for later resale (1)
43.20which is purchased or held for housing purposes, or (2) which meets the conditions
43.21described in section 469.174, subdivision 10, shall be considered a public purpose in
43.22accordance with subdivision 8.
43.23The governing body of the political subdivision which acquires property which is
43.24subject to this subdivision shall after the purchase of the property certify to the city or
43.25county assessor whether the property is held for economic development purposes or
43.26housing purposes, or whether it meets the conditions of section 469.174, subdivision 10.
43.27If the property is acquired for economic development purposes and buildings or other
43.28improvements are constructed after acquisition of the property, and if more than one-half
43.29of the floor space of the buildings or improvements which is available for lease to or use
43.30by a private individual, corporation, or other entity is leased to or otherwise used by
43.31a private individual, corporation, or other entity the provisions of this subdivision shall
43.32not apply to the property. This subdivision shall not create an exemption from section
43.33272.01, subdivision 2 ; 272.68; 273.19; or 469.040, subdivision 3; or other provision of
43.34law providing for the taxation of or for payments in lieu of taxes for publicly held property
43.35which is leased, loaned, or otherwise made available and used by a private person.
44.1EFFECTIVE DATE.This section is effective for assessment year 2013 and
44.2thereafter and for taxes payable in 2014 and thereafter.

44.3    Sec. 9. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
44.4to read:
44.5    Subd. 98. Certain property owned by an Indian tribe. (a) Property is exempt that:
44.6    (1) was classified as 3a under section 273.13, subdivision 24, for taxes payable
44.7in 2013;
44.8    (2) is located in a city of the first class with a population greater than 300,000 as of
44.9the 2010 federal census;
44.10    (3) is owned and occupied directly or indirectly by a federally recognized Indian
44.11tribe within the state of Minnesota; and
44.12    (4) is used exclusively for tribal purposes or institutions of public charity as defined
44.13in subdivision 7.
44.14    (b) For purposes of this subdivision, a "tribal purpose" is a public purpose as defined
44.15in subdivision 8 and includes noncommercial tribal government activities. Property
44.16that qualifies for the exemption under this subdivision is limited to no more than two
44.17contiguous parcels and structures that do not exceed in the aggregate 20,000 square feet.
44.18Property acquired for single-family housing, market-rate apartments, agriculture, or
44.19forestry does not qualify for this exemption. The exemption created by this subdivision
44.20expires with taxes payable in 2024.
44.21EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.

44.22    Sec. 10. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
44.23to read:
44.24    Subd. 99. Public entertainment facility; property tax exemption; special
44.25assessment. Any real or personal property acquired, owned, leased, controlled, used,
44.26or occupied by a first class city for the primary purpose of providing an arena for a
44.27professional basketball team is declared to be acquired, owned, leased, controlled, used,
44.28and occupied for public, governmental, and municipal purposes, and is exempt from ad
44.29valorem taxation by the state or any political subdivision of the state, provided that the
44.30properties are subject to special assessments levied by a political subdivision for a local
44.31improvement in amounts proportionate to and not exceeding the special benefit received
44.32by the properties from the improvement. In determining the special benefit received by
44.33the properties, no possible use of any of the properties in any manner different from their
44.34intended use for providing a professional basketball arena at the time may be considered.
45.1Notwithstanding section 272.01, subdivision 2, or 273.19, real or personal property subject
45.2to a lease or use agreement between the city and another person for uses related to the
45.3purposes of the operation of the arena is exempt from taxation regardless of the length of
45.4the lease or use agreement. This section, insofar as it provides an exemption or special
45.5treatment, does not apply to any real property that is leased for residential, business, or
45.6commercial development, or to a restaurant that is open for general business more than
45.7200 days a year, or for other purposes different from those necessary to the provision
45.8and operation of the arena.
45.9EFFECTIVE DATE.This section is effective beginning with assessment year 2013.

45.10    Sec. 11. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
45.11to read:
45.12    Subd. 100. Public entertainment facility; property tax exemption; special
45.13assessment. Any real or personal property acquired, owned, leased, controlled, used,
45.14or occupied by a first class city for the primary purpose of providing a ball park for a
45.15minor league baseball team is declared to be acquired, owned, leased, controlled, used,
45.16and occupied for public, governmental, and municipal purposes, and is exempt from ad
45.17valorem taxation by the state or any political subdivision of the state, provided that the
45.18properties are subject to special assessments levied by a political subdivision for a local
45.19improvement in amounts proportionate to and not exceeding the special benefit received
45.20by the properties from the improvement. In determining the special benefit received by
45.21the properties, no possible use of any of the properties in any manner different from
45.22their intended use for providing a minor league ballpark at the time may be considered.
45.23Notwithstanding section 272.01, subdivision 2, or 273.19, real or personal property
45.24subject to a lease or use agreement between the city and another person for uses related to
45.25the purposes of the operation of the ballpark and related parking facilities is exempt from
45.26taxation regardless of the length of the lease or use agreement. This section, insofar as it
45.27provides an exemption or special treatment, does not apply to any real property that is
45.28leased for residential, business, or commercial development or other purposes different
45.29from those necessary to the provision and operation of the ball park.
45.30EFFECTIVE DATE.This section is effective beginning with assessment year 2013.

45.31    Sec. 12. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
45.32to read:
46.1    Subd. 101. Electric generation facility; personal property. (a) Notwithstanding
46.2subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and
46.3other personal property which is part of an electric generation facility that exceeds five
46.4megawatts of installed capacity and meets the requirements of this subdivision is exempt.
46.5At the time of construction, the facility must be:
46.6    (1) designed to utilize natural gas as a primary fuel;
46.7    (2) owned and operated by a municipal power agency as defined in section 453.52,
46.8subdivision 8;
46.9    (3) designed to utilize reciprocating engines paired with generators to produce
46.10electrical power;
46.11    (4) located within the service territory of a municipal power agency's electrical
46.12municipal utility that serves load exclusively in a metropolitan county as defined in
46.13section 473.121, subdivision 4; and
46.14(5) designed to connect directly with a municipality's substation.
46.15    (b) Construction of the facility must be commenced after June 1, 2013, and before
46.16June 1, 2017. Property eligible for this exemption does not include electric transmission
46.17lines and interconnections or gas pipelines and interconnections appurtenant to the
46.18property or the facility.
46.19EFFECTIVE DATE.This section is effective for assessment year 2013, taxes
46.20payable in 2014, and thereafter.

46.21    Sec. 13. Minnesota Statutes 2012, section 273.11, is amended by adding a subdivision
46.22to read:
46.23    Subd. 24. Valuation limit for class 4d property. Notwithstanding the provisions of
46.24subdivision 1, the taxable value of any property classified as class 4d under section 273.13,
46.25subdivision 25, is limited as provided under this section. For assessment year 2013, the
46.26value may not exceed $100,000 times the number of dwelling units. For subsequent years,
46.27the limit is adjusted each year by the average statewide change in estimated market value
46.28of property classified as class 4a and 4d under section 273.13, subdivision 25, for the
46.29previous assessment year, excluding valuation change due to new construction, rounded to
46.30the nearest $1,000. Beginning with assessment year 2014, the commissioner of revenue
46.31must certify the limit for each assessment year by November 1 of the previous year.
46.32EFFECTIVE DATE.This section is effective beginning with assessment year 2013.

46.33    Sec. 14. Minnesota Statutes 2012, section 279.01, subdivision 1, is amended to read:
47.1    Subdivision 1. Due dates; penalties. Except as provided in subdivision subdivisions
47.2 3 or 4 to 5, on May 16 or 21 days after the postmark date on the envelope containing the
47.3property tax statement, whichever is later, a penalty accrues and thereafter is charged upon
47.4all unpaid taxes on real estate on the current lists in the hands of the county treasurer. The
47.5penalty is at a rate of two percent on homestead property until May 31 and four percent on
47.6June 1. The penalty on nonhomestead property is at a rate of four percent until May 31 and
47.7eight percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days
47.8after the postmark date on the envelope containing the property tax statements, whichever
47.9is later, on commercial use real property used for seasonal residential recreational purposes
47.10and classified as class 1c or 4c, and on other commercial use real property classified as
47.11class 3a, provided that over 60 percent of the gross income earned by the enterprise on the
47.12class 3a property is earned during the months of May, June, July, and August. In order for
47.13the first half of the tax due on class 3a property to be paid after May 15 and before June 1,
47.14or 21 days after the postmark date on the envelope containing the property tax statement,
47.15whichever is later, without penalty, the owner of the property must attach an affidavit
47.16to the payment attesting to compliance with the income provision of this subdivision.
47.17Thereafter, for both homestead and nonhomestead property, on the first day of each month
47.18beginning July 1, up to and including October 1 following, an additional penalty of one
47.19percent for each month accrues and is charged on all such unpaid taxes provided that if the
47.20due date was extended beyond May 15 as the result of any delay in mailing property tax
47.21statements no additional penalty shall accrue if the tax is paid by the extended due date. If
47.22the tax is not paid by the extended due date, then all penalties that would have accrued if
47.23the due date had been May 15 shall be charged. When the taxes against any tract or lot
47.24exceed $100, one-half thereof may be paid prior to May 16 or 21 days after the postmark
47.25date on the envelope containing the property tax statement, whichever is later; and, if so
47.26paid, no penalty attaches; the remaining one-half may be paid at any time prior to October
47.2716 following, without penalty; but, if not so paid, then a penalty of two percent accrues
47.28thereon for homestead property and a penalty of four percent on nonhomestead property.
47.29Thereafter, for homestead property, on the first day of November an additional penalty of
47.30four percent accrues and on the first day of December following, an additional penalty of
47.31two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead
47.32property, on the first day of November and December following, an additional penalty of
47.33four percent for each month accrues and is charged on all such unpaid taxes. If one-half of
47.34such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope
47.35containing the property tax statement, whichever is later, the same may be paid at any time
48.1prior to October 16, with accrued penalties to the date of payment added, and thereupon
48.2no penalty attaches to the remaining one-half until October 16 following.
48.3    This section applies to payment of personal property taxes assessed against
48.4improvements to leased property, except as provided by section 277.01, subdivision 3.
48.5    A county may provide by resolution that in the case of a property owner that has
48.6multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in
48.7installments as provided in this subdivision.
48.8    The county treasurer may accept payments of more or less than the exact amount of
48.9a tax installment due. Payments must be applied first to the oldest installment that is due
48.10but which has not been fully paid. If the accepted payment is less than the amount due,
48.11payments must be applied first to the penalty accrued for the year or the installment being
48.12paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
48.13payment required as a condition for filing an appeal under section 278.03 or any other law,
48.14nor does it affect the order of payment of delinquent taxes under section 280.39.

48.15    Sec. 15. Minnesota Statutes 2012, section 279.01, is amended by adding a subdivision
48.16to read:
48.17    Subd. 5. Federal active service exception. In the case of a homestead property
48.18owned by an individual who is on federal active service, as defined in section 190.05,
48.19subdivision 5c, as a member of the National Guard or a reserve component, a six-month
48.20grace period is granted for complying with the due dates imposed by subdivision 1. During
48.21this period, no late fees or penalties shall accrue against the property. The due date for
48.22property taxes owed under this chapter for an individual covered by this subdivision shall
48.23be November 16 for taxes due on May 16, and April 16 of the following year for taxes due
48.24on October 16. A taxpayer making a payment under this subdivision must accompany
48.25the payment with a signed copy of the taxpayer's orders or form DD214 showing the
48.26dates of active service which clearly indicate that the taxpayer was in active service as a
48.27member of the National Guard or a reserve component on the date the payment was due.
48.28This grace period applies to all homestead property owned by individuals on federal active
48.29service, as herein defined, for all of that property's due dates which fall on a day that is
48.30included in the taxpayer's federal active service.

48.31    Sec. 16. Minnesota Statutes 2012, section 279.02, is amended to read:
48.32279.02 DUTIES OF COUNTY AUDITOR AND TREASURER.
48.33    Subdivision 1. Delinquent property; rates. On the first business day in January, of
48.34each year, the county treasurer shall return the tax lists on hand to the county auditor, who
49.1shall compare the same with the statements receipted for by the treasurer on file in the
49.2auditor's office and each tract or lot of real property against which the taxes, or any part
49.3thereof, remain unpaid, shall be deemed delinquent, and thereupon an additional penalty
49.4of two percent on the amount of the original tax remaining unpaid shall immediately
49.5accrue and thereafter be charged upon all such delinquent taxes; and any auditor who
49.6shall make out and deliver any statement of delinquent taxes without including therein
49.7the penalties imposed by law, and any treasurer who shall receive payment of such taxes
49.8without including in such payment all items as shown on the auditor's statement, shall be
49.9liable to the county for the amounts of any items omitted.
49.10    Subd. 2. Federal active service exception. Notwithstanding subdivision 1, a
49.11homestead property owned by an individual who is on federal active service, as defined
49.12in section 190.05, subdivision 5c, as a member of the National Guard or a reserve
49.13component, shall not be deemed delinquent under this section if the due dates imposed
49.14under section 279.01 fall on a day in which the individual was on federal active service.

49.15    Sec. 17. Minnesota Statutes 2012, section 287.05, is amended by adding a subdivision
49.16to read:
49.17    Subd. 10. Hennepin and Ramsey Counties. For properties located in Hennepin
49.18and Ramsey Counties, the county may impose an additional mortgage registry tax as
49.19defined in sections 383A.80 and 383B.80.
49.20EFFECTIVE DATE.This section is effective for deeds and mortgages
49.21acknowledged on or after July 1, 2013.

49.22    Sec. 18. [287.40] HENNEPIN AND RAMSEY COUNTIES.
49.23    For properties located in Hennepin and Ramsey Counties, the county may impose an
49.24additional deed tax as defined in sections 383A.80 and 383B.80.
49.25EFFECTIVE DATE.This section is effective for deeds and mortgages
49.26acknowledged on or after July 1, 2013.

49.27    Sec. 19. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
49.28article 6, section 9, Laws 2000, chapter 490, article 6, section 15, and Laws 2008, chapter
49.29154, article 2, section 30, is amended to read:
49.30    Sec. 3. TAX; PAYMENT OF EXPENSES.
49.31    (a) The tax levied by the hospital district under Minnesota Statutes, section 447.34,
49.32must not be levied at a rate that exceeds the amount authorized to be levied under that
50.1section. The proceeds of the tax may be used for all purposes of the hospital district,
50.2except as provided in paragraph (b).
50.3    (b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used
50.4solely by the Cook ambulance service and the Orr ambulance service for the purpose of
50.5capital expenditures as it relates to:
50.6    (1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance
50.7service and not;
50.8    (2) attached and portable equipment for use in and for the ambulances; and
50.9    (3) parts and replacement parts for maintenance and repair of the ambulances.
50.10The money may not be used for administrative, operation, or salary expenses.
50.11    (c) The part of the levy referred to in paragraph (b) must be administered by the
50.12Cook Hospital and passed on in equal amounts directly to the Cook area ambulance
50.13service board and the city of Orr to be held in trust until funding for a new ambulance is
50.14needed by either the Cook ambulance service or the Orr ambulance service used for the
50.15purposes in paragraph (b).

50.16    Sec. 20. Laws 1999, chapter 243, article 6, section 11, is amended to read:
50.17    Sec. 11. CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.
50.18    Subdivision 1. Levy authorized. Notwithstanding other law to the contrary, the
50.19Carlton county board of commissioners may annually levy in and for the unorganized
50.20township territory of Sawyer an amount up to $1,000 annually for cemetery purposes,
50.21beginning with taxes payable in 2000 and ending with taxes payable in 2009.
50.22    Subd. 2. Effective date. This section is effective June 1, 1999, without local
50.23approval.
50.24EFFECTIVE DATE; LOCAL APPROVAL.This section applies to taxes
50.25payable in 2014 and thereafter, and is effective the day after the Carlton county board
50.26of commissioners and its chief clerical officer timely complete their compliance with
50.27Minnesota Statutes, section 645.021, subdivisions 2 and 3.

50.28    Sec. 21. Laws 2008, chapter 366, article 5, section 33, the effective date, is amended to
50.29read:
50.30EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in
50.312009, and is repealed effective for taxes levied in 2013 2018, payable in 2014 2019,
50.32and thereafter.
51.1EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.

51.2    Sec. 22. Laws 2010, chapter 389, article 1, section 12, the effective date, is amended to
51.3read:
51.4EFFECTIVE DATE.This section is effective for assessment years year 2010 and
51.52011, for taxes payable in 2011 and 2012 thereafter.
51.6EFFECTIVE DATE.This section is effective for assessment year 2012 and
51.7thereafter.

51.8    Sec. 23. MINNEAPOLIS AND ST. PAUL; ENTERTAINMENT FACILITIES
51.9COORDINATION.
51.10    (a) On or before January 1, 2015, the cities of St. Paul and Minneapolis shall establish
51.11a joint governing structure to coordinate and provide for joint marketing, promotion, and
51.12scheduling of conventions and events at the Target Center and Xcel Energy Center.
51.13    (b) On or before February 1, 2014, the cities of St. Paul and Minneapolis, and
51.14representatives from the primary professional sports team tenant of each facility, shall also
51.15study and report to the legislature on creating a joint governing structure to provide for
51.16joint administration, financing, and operations of the facilities and the possible effects of
51.17joint governance on the finances of each facility and each city. The study under this
51.18paragraph must:
51.19    (1) examine the current finances of each facility, including past and projected costs
51.20and revenues; projected capital improvements; and the current and projected impact
51.21of each facility on the city's general fund;
51.22    (2) determine the impacts of joint governance on the future finances of each facility
51.23and city;
51.24    (3) examine the inclusion of other entertainment venues in the joint governance, and
51.25the impact the inclusion of those facilities would have on all the facilities within the joint
51.26governing structure and the cities in which they are located; and
51.27    (4) consider the amount of city, regional, and state funding, if any, that would be
51.28required to fund and operate the facilities under a joint governing structure.
51.29    (c) In considering joint governing structures under paragraph (b), the study shall
51.30specifically consider the feasibility of joining the Target Center and the Xcel Energy
51.31Center, and possibly other venues, to the Minnesota Sports Facilities Authority under
51.32Minnesota Statutes, section 473J.08.
52.1    (d) Representatives of the cities and the primary professional sports team tenants
52.2of each facility shall meet within 30 days of the effective date of this section to begin
52.3implementation of this section.
52.4EFFECTIVE DATE.This section is effective the day following final enactment
52.5upon compliance with the provisions of Minnesota Statutes, section 645.021, subdivisions
52.62 and 3, by the governing bodies of the cities of St. Paul and Minneapolis and their chief
52.7clerical officers, and provided that, notwithstanding the time limits under Minnesota
52.8Statutes, section 645.021, subdivision 3, the certificates of approval are filed with the
52.9secretary of state within 30 days after enactment of this act.

52.10    Sec. 24. MORATORIUM ON CHANGES IN ASSESSMENT PRACTICE.
52.11    (a) An assessor may not deviate from current practices or policies used generally in
52.12assessing or determining the taxable status of property used in the production of biofuels,
52.13wine, beer, distilled beverages, or dairy products.
52.14    (b) An assessor may not change the taxable status of any existing property involved
52.15in the industrial processes identified in paragraph (a), unless the change is made as a result
52.16of a change in use of the property, or to correct an error. For currently taxable properties,
52.17the assessor may change the estimated market value of the property.
52.18EFFECTIVE DATE.This section is effective for assessment year 2013 only.

52.19    Sec. 25. STUDY AND REPORT ON CERTAIN PROPERTY USED IN
52.20BUSINESS AND PRODUCTION.
52.21In order to provide the legislature with information on the assessment of property
52.22used in business and production activities, the commissioner of revenue must study the
52.23impact of the exception contained in Minnesota Statutes, section 272.03, subdivision
52.241(c)(iii). The commissioner must report a summary of findings and recommendations to
52.25the chairs and ranking minority members of the taxes committees of the senate and house
52.26of representatives by February 1, 2014.
52.27EFFECTIVE DATE.This section is effective the day following final enactment.

52.28    Sec. 26. REIMBURSEMENT FOR PROPERTY TAX ABATEMENTS.
52.29    Subdivision 1. Reimbursement. The commissioner of revenue shall reimburse
52.30taxing jurisdictions for property tax abatements granted in Hennepin County under Laws
52.312011, First Special Session chapter 7, article 5, section 13, notwithstanding the time limits
53.1contained in that section. The reimbursements must be made to each taxing jurisdiction
53.2pursuant to the certification of the Hennepin County auditor.
53.3    Subd. 2. Appropriation. The amount necessary, not to exceed $400,000, is
53.4appropriated to the commissioner of revenue from the general fund to make the payments
53.5required under this section. This appropriation does not cancel but is available until June
53.630, 2014.
53.7EFFECTIVE DATE.This section is effective the day following final enactment.

53.8    Sec. 27. IRON RANGE FISCAL DISPARITIES STUDY.
53.9    Subdivision 1. Study required. The commissioner of revenue shall conduct a study
53.10of the tax relief area revenue distribution program contained in Minnesota Statutes, chapter
53.11276A, commonly known as the Iron Range fiscal disparities program. By February 1,
53.122015, the commissioner shall submit a report to the chairs and ranking minority members
53.13of the house of representatives and senate tax committees consisting of the findings of the
53.14study and identification of issues for policy makers to consider. The study must analyze:
53.15    (1) the extent to which the benefits of the economic growth in the region are shared
53.16throughout the region, especially for growth that results from state or regional decisions;
53.17    (2) the program's impact on the variability of tax rates across jurisdictions of the
53.18region;
53.19    (3) the program's impact on the distribution of homestead property tax burdens
53.20across jurisdictions of the region; and
53.21    (4) the relationship between the impacts of the program and overburden on
53.22jurisdictions containing properties that provide regional benefits, specifically the costs
53.23those properties impose on their host jurisdictions in excess of their tax payments. The
53.24report must include a description of other property tax, aid, and local development
53.25programs that interact with the fiscal disparities program.
53.26    Subd. 2. Funds transfer from fiscal disparities levy. For taxes payable in 2014
53.27only, $75,000 must be added to St. Louis County's areawide levy as otherwise determined
53.28under Minnesota Statutes, section 276A.06, subdivision 5. Upon receipt of the proceeds of
53.29this levy, St. Louis County must transfer this money to the commissioner of management
53.30and budget for deposit into an account in the special revenue fund. One-half of the
53.31proceeds of the levy must be transferred prior to June 30, 2014.
53.32    Subd. 3. Appropriation. $37,500 in fiscal year 2014 and $37,500 in fiscal year
53.332015 are appropriated from the account in the special revenue fund established under
53.34subdivision 2 to the commissioner of revenue to pay for the study required by this section.
53.35Any amounts remaining in the account in the special revenue fund on June 30, 2015, must
54.1be distributed to St. Louis County for the purposes of reducing the areawide tax rate
54.2for taxes payable in 2016.
54.3EFFECTIVE DATE.This section is effective July 1, 2013.

54.4    Sec. 28. REPEALER.
54.5(a) Minnesota Statutes 2012, sections 428A.101; and 428A.21, are repealed.
54.6(b) Minnesota Statutes 2012, sections 383A.80, subdivision 4; and 383B.80,
54.7subdivision 4, are repealed.
54.8EFFECTIVE DATE.This section is effective the day following final enactment,
54.9and paragraph (b) reinstates the authority for Hennepin and Ramsey Counties to
54.10impose the additional mortgage registry and deed tax effective for deeds and mortgages
54.11acknowledged on or after July 1, 2013.


54.14    Section 1. Minnesota Statutes 2012, section 270C.56, subdivision 1, is amended to read:
54.15    Subdivision 1. Liability imposed. A person who, either singly or jointly with
54.16others, has the control of, supervision of, or responsibility for filing returns or reports,
54.17paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
54.18person who is liable under any other law, is liable for the payment of taxes arising under
54.19chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658, 290.92, and 297E.02,
54.20and the applicable penalties and interest on those taxes.
54.21EFFECTIVE DATE.This section is effective July 1, 2013.

54.22    Sec. 2. [295.61] SPORTS MEMORABILIA GROSS RECEIPTS TAX.
54.23    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
54.24have the meanings given, unless the context clearly indicates otherwise.
54.25(b) "Commissioner" means the commissioner of revenue.
54.26(c) "Sale" means a transfer of title or possession of tangible personal property,
54.27whether absolutely or conditionally.
54.28(d) "Sports memorabilia" means items available for sale to the public that are sold
54.29under a license granted by any professional sports league or a team that is a franchise of a
54.30professional sports league, or an affiliate or subsidiary of a league or a team, including:
54.31(1) one-of-a-kind items related to sports figures, teams, or events;
55.1(2) trading cards;
55.2(3) photographs;
55.3(4) clothing;
55.4(5) sports event licensed items;
55.5(6) sports equipment; and
55.6(7) similar items.
55.7(e) "Wholesale" or "sale at wholesale" means a sale to a retailer, as defined in section
55.8297A.61, subdivision 9, for the purpose of reselling the property to a third party.
55.9(f) "Wholesaler" means any person making wholesale sales of sports memorabilia
55.10to purchasers in the state.
55.11    Subd. 2. Imposition. A tax is imposed on each sale at wholesale of sports
55.12memorabilia equal to ten percent of the gross revenues from the sale.
55.13    Subd. 3. Estimated payments; annual return. (a) Each wholesaler must make
55.14estimated payments of the tax for the calendar year to the commissioner in quarterly
55.15installments by April 15, July 15, October 15, and January 15 of the following calendar
55.16year. Estimated tax payments are not required if the tax for the calendar year is less than
55.17$500. An underpayment of estimated installments bears interest at the rate specified in
55.18section 270C.40, from the due date of the payment until paid or until the due date of the
55.19annual return at the rate specified in section 270C.40. An underpayment of an estimated
55.20installment is the difference between the amount paid and the lesser of (1) 90 percent of
55.21one-quarter of the tax for the calendar year, or (2) the tax for the actual gross revenues
55.22received during the quarter.
55.23(b) A taxpayer with an aggregate tax liability of $10,000 or more during a fiscal
55.24year ending June 30, must remit all liabilities by funds transfer as defined in section
55.25336.4A-104, paragraph (a), in the next calendar year. The funds-transfer payment date,
55.26as defined in section 336.4A-401, is on or before the first funds-transfer business day
55.27after the date the tax is due.
55.28(c) The taxpayer must file an annual return reconciling the estimated payments by
55.29March 15 of the following calendar year.
55.30(d) The estimated payments and annual return must contain the information and be
55.31in the form prescribed by the commissioner.
55.32    Subd. 4. Compensating use tax. If the tax is not paid under subdivision 2, a
55.33compensating tax is imposed on possession for sale or use of sports memorabilia in
55.34the state. The rate of tax equals the rate under subdivision 2, and must be paid by the
55.35possessor of the items.
56.1    Subd. 5. Administrative provisions. Unless specifically provided otherwise by this
56.2section, the audit, assessment, refund, penalty, interest, enforcement, collection remedies,
56.3appeal, and administrative provisions of chapters 270C and 289A that apply to taxes
56.4imposed under chapter 297A apply to taxes imposed under this section.
56.5    Subd. 6. Disposition of revenues. The commissioner shall deposit the revenues
56.6from the tax in the general fund.
56.7EFFECTIVE DATE.This section is effective for sales made after June 30, 2013.

56.8    Sec. 3. Minnesota Statutes 2012, section 297F.01, subdivision 3, is amended to read:
56.9    Subd. 3. Cigarette. "Cigarette" means any roll for smoking made wholly or in part
56.10of tobacco, that weighs 4.5 pounds or less per thousand:
56.11(1) the wrapper or cover of which is made of paper or another substance or material
56.12except tobacco; or
56.13(2) wrapped in any substance containing tobacco, however labeled or named, which,
56.14because of its appearance, size, the type of tobacco used in the filler, or its packaging,
56.15pricing, marketing, or labeling, is likely to be offered to or purchased by consumers as
56.16a cigarette, as defined in clause (1), unless it is wrapped in whole tobacco leaf and does
56.17not have a cellulose acetate or other cigarette-like filter.
56.18EFFECTIVE DATE.This section is effective July 1, 2013.

56.19    Sec. 4. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision
56.20to read:
56.21    Subd. 10b. Moist snuff. "Moist snuff" means any finely cut, ground, or powdered
56.22smokeless tobacco that is intended to be placed or dipped in the mouth.

56.23    Sec. 5. Minnesota Statutes 2012, section 297F.01, subdivision 19, is amended to read:
56.24    Subd. 19. Tobacco products. "Tobacco products" means any product containing,
56.25made, or derived from tobacco that is intended for human consumption, whether chewed,
56.26smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means,
56.27or any component, part, or accessory of a tobacco product, including, but not limited
56.28to, cigars; little cigars; cheroots; stogies; periques; granulated, plug cut, crimp cut,
56.29ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug and twist
56.30tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings, cuttings
56.31and sweepings of tobacco, and other kinds and forms of tobacco; but does not include
56.32cigarettes as defined in this section. Tobacco products excludes any tobacco product
57.1that has been approved by the United States Food and Drug Administration for sale as
57.2a tobacco cessation product, as a tobacco dependence product, or for other medical
57.3purposes, and is being marketed and sold solely for such an approved purpose.
57.4EFFECTIVE DATE.This section is effective July 1, 2013.

57.5    Sec. 6. Minnesota Statutes 2012, section 297F.05, subdivision 1, is amended to read:
57.6    Subdivision 1. Rates; cigarettes. A tax is imposed upon the sale of cigarettes in
57.7this state, upon having cigarettes in possession in this state with intent to sell, upon any
57.8person engaged in business as a distributor, and upon the use or storage by consumers, at
57.9the following rates:
57.10(1) on cigarettes weighing not more than three pounds per thousand, 24 141.5 mills
57.11on each such cigarette; and
57.12(2) on cigarettes weighing more than three pounds per thousand, 48 283 mills on
57.13each such cigarette.
57.14EFFECTIVE DATE.This section is effective July 1, 2013.

57.15    Sec. 7. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
57.16to read:
57.17    Subd. 1a. Annual indexing. (a) Each year the commissioner shall adjust the
57.18tax rates under subdivision 1, including any adjustment made in prior years under this
57.19subdivision, by multiplying the mill rates for the current calendar year by an adjustment
57.20factor. The adjustment factor equals the in-lieu sales tax rate that applies to the following
57.21calendar year divided by the in-lieu sales tax rate for the current calendar year. For
57.22purposes of this subdivision, "in-lieu sales tax rate" means the tax rate established under
57.23section 297F.25, subdivision 1, in tenths of a cent per pack.
57.24    (b) The commissioner shall publish the resulting rate by November 1 and the rate
57.25applies to sales made on or after January 1 of the following year.
57.26(c) The determination of the commissioner under this subdivision is not a rule and is
57.27not subject to the Administrative Procedure Act in chapter 14.

57.28    Sec. 8. Minnesota Statutes 2012, section 297F.05, subdivision 3, is amended to read:
57.29    Subd. 3. Rates; tobacco products. (a) A tax is imposed upon all tobacco products
57.30in this state and upon any person engaged in business as a distributor, at the rate of 35
57.31 95 percent of the wholesale sales price of the tobacco products. The tax is imposed at
57.32the time the distributor:
58.1(1) brings, or causes to be brought, into this state from outside the state tobacco
58.2products for sale;
58.3(2) makes, manufactures, or fabricates tobacco products in this state for sale in
58.4this state; or
58.5(3) ships or transports tobacco products to retailers in this state, to be sold by those
58.6retailers.
58.7(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a
58.8pack of 20 cigarettes weighing not more than three pounds per thousand, as established
58.9under subdivision 1, is imposed on each container of moist snuff.
58.10For purposes of this subdivision, a "container" means the smallest consumer-size can,
58.11package, or other container that is marketed or packaged by the manufacturer, distributor,
58.12or retailer for separate sale to a retail purchaser.
58.13EFFECTIVE DATE.This section is effective July 1, 2013, except the minimum
58.14tax under paragraph (b) is effective January 1, 2014.

58.15    Sec. 9. Minnesota Statutes 2012, section 297F.05, subdivision 4, is amended to read:
58.16    Subd. 4. Use tax; tobacco products. A tax is imposed upon the use or storage by
58.17consumers of tobacco products in this state, and upon such consumers, at the rate of 35 95
58.18 percent of the cost to the consumer of the tobacco products or the minimum tax under
58.19subdivision 3, paragraph (b), whichever is greater.
58.20EFFECTIVE DATE.This section is effective July 1, 2013.

58.21    Sec. 10. Minnesota Statutes 2012, section 297F.24, subdivision 1, is amended to read:
58.22    Subdivision 1. Fee imposed. (a) A fee is imposed upon the sale of nonsettlement
58.23cigarettes in this state, upon having nonsettlement cigarettes in possession in this state
58.24with intent to sell, upon any person engaged in business as a distributor, and upon the use
58.25or storage by consumers of nonsettlement cigarettes. The fee equals a rate of 1.75 2.5
58.26cents per cigarette.
58.27(b) The purpose of this fee is to:
58.28(1) ensure that manufacturers of nonsettlement cigarettes pay fees to the state that
58.29are comparable to costs attributable to the use of the cigarettes;
58.30(2) prevent manufacturers of nonsettlement cigarettes from undermining the state's
58.31policy of discouraging underage smoking by offering nonsettlement cigarettes at prices
58.32substantially below the cigarettes of other manufacturers; and
58.33(3) fund such other purposes as the legislature determines appropriate.

59.1    Sec. 11. Minnesota Statutes 2012, section 297F.25, subdivision 1, is amended to read:
59.2    Subdivision 1. Imposition. (a) A tax is imposed on distributors on the sale of
59.3cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this
59.4state. The tax is equal to 6.5 percent of the combined tax rate under section 297A.62,
59.5multiplied by the weighted average retail price and must be expressed in cents per pack
59.6rounded to the nearest one-tenth of a cent. The weighted average retail price must be
59.7determined annually, with new rates published by November 1, and effective for sales
59.8on or after January 1 of the following year. The weighted average retail price must be
59.9established by surveying cigarette retailers statewide in a manner and time determined by
59.10the commissioner. The commissioner shall make an inflation adjustment in accordance
59.11with the Consumer Price Index for all urban consumers inflation indicator as published in
59.12the most recent state budget forecast. The commissioner shall use the inflation factor for
59.13the calendar year in which the new tax rate takes effect. If the survey indicates that the
59.14average retail price of cigarettes has not increased relative to the average retail price in
59.15the previous year's survey, then the commissioner shall not make an inflation adjustment.
59.16The determination of the commissioner pursuant to this subdivision is not a "rule" and is
59.17not subject to the Administrative Procedure Act contained in chapter 14. For packs of
59.18cigarettes with other than 20 cigarettes, the tax must be adjusted proportionally.
59.19(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the
59.20tax calculation of the weighted average retail price for the sales of cigarettes from August
59.211, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average
59.22retail price per pack of 20 cigarettes from the most recent survey by the percentage change
59.23in a weighted average of the presumed legal prices for cigarettes during the year after
59.24completion of that survey, as reported and published by the Department of Commerce
59.25under section 325D.371; (2) subtracting the sales tax included in the retail price; and (3)
59.26adjusting for expected inflation. The rate must be published by May 1 and is effective for
59.27sales after July 31. If the weighted average of the presumed legal prices indicates that the
59.28average retail price of cigarettes has not increased relative to the average retail price in the
59.29most recent survey, then no inflation adjustment must be made. For packs of cigarettes
59.30with other than 20 cigarettes, the tax must be adjusted proportionally.
59.31EFFECTIVE DATE.This section is effective July 1, 2013.

59.32    Sec. 12. Minnesota Statutes 2012, section 297G.03, subdivision 1, is amended to read:
59.33    Subdivision 1. General rate; distilled spirits and wine. The following excise tax is
59.34imposed on all distilled spirits and wine manufactured, imported, sold, or possessed in
59.35this state:

60.1			Standard		Metric
60.2 60.3 60.4	(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
60.5 60.6 60.7 60.8	(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
60.9 60.10 60.11	(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
60.12 60.13 60.14	(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
60.15 60.16	(e) Wine containing more than 24 percent alcohol by volume	$	3.52 5.34 per gallon	$	.93 1.42 per liter
60.17 60.18	(f) Natural and artificial sparkling wines containing alcohol	$	1.82 3.60 per gallon	$	.48 .95 per liter
60.19 60.20	(g) Cider as defined in section 297G.01, subdivision 3a	$	.15 1.93 per gallon	$	.04 .51 per liter
60.21 60.22	(h) Low-alcohol dairy cocktails	$	.08 1.36 per gallon	$	.02 .36 per liter

60.23In computing the tax on a package of distilled spirits or wine, a proportional tax at a
60.24like rate on all fractional parts of a gallon or liter must be paid, except that the tax on a
60.25fractional part of a gallon less than 1/16 of a gallon is the same as for 1/16 of a gallon.
60.26EFFECTIVE DATE.This section is effective July 1, 2013.

60.27    Sec. 13. Minnesota Statutes 2012, section 297G.03, is amended by adding a
60.28subdivision to read:
60.29    Subd. 5. Small winery credit. (a) A qualified winery is entitled to a tax credit of
60.30$2.08 per gallon on 50,000 gallons sold in any fiscal year beginning July 1. Qualified
60.31wineries may take the credit on the 18th day of each month, but the total credit allowed
60.32may not exceed in any fiscal year the lesser of:
60.33(1) the liability for tax; or
60.34(2) $104,000.
60.35(b) For purposes of this subdivision, a "qualified winery" means a winery, whether
60.36or not located in this state, producing less than 100,000 gallons of wine in the calendar
60.37year immediately preceding the calendar year for which the credit under this subdivision
60.38is claimed. In determining the number of gallons, all brands or labels of a winery must
60.39be combined. All facilities for the production of wine owned or controlled by the same
60.40person, corporation, or other entity must be treated as a single winery.
61.1EFFECTIVE DATE.This section is effective July 1, 2013.

61.2    Sec. 14. Minnesota Statutes 2012, section 297G.04, is amended to read:
61.3297G.04 FERMENTED MALT BEVERAGES; RATE OF TAX.
61.4    Subdivision 1. Tax imposed. The following excise tax is imposed on all fermented
61.5malt beverages that are imported, directly or indirectly sold, or possessed in this state:
61.6(1) on fermented malt beverages containing not more than 3.2 percent alcohol by
61.7weight, $2.40 $25.55 per 31-gallon barrel; and
61.8(2) on fermented malt beverages containing more than 3.2 percent alcohol by
61.9weight, $4.60 $27.75 per 31-gallon barrel.
61.10For fractions of a 31-gallon barrel, the tax rate is calculated proportionally.
61.11    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages is
61.12entitled to a tax credit of $4.60 $27.75 per barrel on 25,000 50,000 barrels sold in any
61.13fiscal year beginning July 1, regardless of the alcohol content of the product. Qualified
61.14brewers may take the credit on the 18th day of each month, but the total credit allowed
61.15may not exceed in any fiscal year the lesser of:
61.16(1) the liability for tax; or
61.17(2) $115,000 $1,387,500.
61.18For purposes of this subdivision, a "qualified brewer" means a brewer, whether or
61.19not located in this state, manufacturing less than 100,000 200,000 barrels of fermented
61.20malt beverages in the calendar year immediately preceding the calendar year for which
61.21the credit under this subdivision is claimed. In determining the number of barrels, all
61.22brands or labels of a brewer must be combined. All facilities for the manufacture of
61.23fermented malt beverages owned or controlled by the same person, corporation, or other
61.24entity must be treated as a single brewer.
61.25EFFECTIVE DATE.This section is effective July 1, 2013.

61.26    Sec. 15. Minnesota Statutes 2012, section 325D.32, subdivision 2, is amended to read:
61.27    Subd. 2. Cigarettes. "Cigarettes" means and includes any roll for smoking, made
61.28wholly or in part of tobacco, irrespective of size and shape and whether or not such
61.29tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover
61.30of which is made of paper or any other substance or material except whole tobacco leaf,
61.31and includes any cigarette as defined in section 297F.01, subdivision 3.
61.32EFFECTIVE DATE.This section is effective July 1, 2013.

62.1    Sec. 16. FLOOR STOCKS TAX.
62.2    Subdivision 1. Cigarettes. (a) A floor stocks tax is imposed on every person
62.3engaged in the business in this state as a distributor, retailer, subjobber, vendor,
62.4manufacturer, or manufacturer's representative of cigarettes, on the stamped cigarettes and
62.5unaffixed stamps in the person's possession or under the person's control at 12:01 a.m. on
62.6July 1, 2013. The tax is imposed at the rate of 80 mills on each cigarette.
62.7(b) Each distributor, on or before July 11, 2013, shall file a return with the
62.8commissioner of revenue, in the form the commissioner prescribes, showing the stamped
62.9cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2013, and the amount
62.10of tax due on the cigarettes and unaffixed stamps. Each retailer, subjobber, vendor,
62.11manufacturer, or manufacturer's representative, on or before July 11, 2013, shall file
62.12a return with the commissioner, in the form the commissioner prescribes, showing the
62.13cigarettes on hand at 12:01 a.m. on July 1, 2013, and the amount of tax due on the
62.14cigarettes. The tax imposed by this section is due and payable on or before August 8,
62.152013, and after that date bears interest at the rate of one percent per month.
62.16    Subd. 2. Audit and enforcement. The tax imposed by this section is subject to
62.17the audit, assessment, interest, appeal, refund, penalty, enforcement, administrative, and
62.18collection provisions of Minnesota Statutes, chapters 270C and 297F. The commissioner
62.19of revenue may require a distributor to receive and maintain copies of floor stocks fee
62.20returns filed by all persons requesting a credit for returned cigarettes.
62.21    Subd. 3. Deposit of proceeds. The commissioner of revenue shall deposit the
62.22revenues from the tax under this section in the state treasury and credit them to the
62.23general fund.
62.24EFFECTIVE DATE.This section is effective July 1, 2013.

62.25    Sec. 17. INTERIM SALES TAX RATE.
62.26Notwithstanding the provisions of Minnesota Statutes, section 297F.25, the
62.27commissioner shall adjust the weighted average retail price in section 297F.25, subdivision
62.281, on July 1, 2013, to reflect the price changes under this act. This weighted average
62.29shall be used to compute cigarette sales tax under Minnesota Statutes, section 297F.25,
62.30subdivision 1, until December 31, 2013, when the commissioner shall resume annual
62.31adjustments to the weighted average sales price. The commissioner's determination of
62.32the adjustment that takes effect on January 1, 2014, must be limited to the change in the
62.33weighted average retail that occurs during calendar year 2013 but after July 15, 2013.
62.34EFFECTIVE DATE.This section is effective July 1, 2013.

63.1    Sec. 18. TOBACCO TAX COLLECTION REPORT.
63.2    Subdivision 1. Report to legislature. (a) The commissioner of revenue shall report
63.3to the 2014 legislature on the tobacco tax collection system, including recommendations
63.4to improve compliance under the excise tax for both cigarettes and other tobacco products.
63.5The purpose of the report is to provide information and guidance to the legislature on
63.6improvements to the tobacco tax collection system to:
63.7(1) provide a unified system of collecting both the cigarette and other tobacco
63.8taxes, regardless of category, size, or shape, that ensures the highest reasonable rates of
63.9tax collection;
63.10(2) discourage tax evasion; and
63.11(3) help to prevent illegal sale of tobacco products, which may make these products
63.12more accessible to youth.
63.13(b) In the report, the commissioner shall:
63.14(1) provide a detailed review of the present excise tax collection and compliance
63.15system as it applies to both cigarettes and other tobacco products. This must include
63.16an assessment of the levels of compliance for each category of products and the effect
63.17of the stamping requirement on compliance for each category of products and the effect
63.18of the stamping requirement on compliance rates for cigarettes relative to other tobacco
63.19products. It also must identify any weaknesses in the system;
63.20(2) survey the methods of collection and enforcement used by other states or nations,
63.21including identifying and discussing emerging best practices that ensure tracking of both
63.22cigarettes and other tobacco products and result in the highest rates of tax collection and
63.23compliance. These best practices must consider high-technology alternatives, such as use
63.24of bar codes, radio-frequency identification tags, or similar mechanisms for tracking
63.25compliance;
63.26(3) evaluate the adequacy and effectiveness of the existing penalties and other
63.27sanctions for noncompliance;
63.28(4) evaluate the adequacy of the resources allocated by the state to enforce the
63.29tobacco tax and prevention laws; and
63.30(5) make recommendations on implementation of a comprehensive tobacco tax
63.31collection system for Minnesota that can be implemented by January 1, 2014, including:
63.32(i) recommendations on the specific steps needed to institute and implement the new
63.33system, including estimates of the state's costs of doing so and any additional personnel
63.34requirements;
63.35(ii) recommendations on methods to recover the cost of implementing the system
63.36from the industry;
64.1(iii) evaluation of the extent to which the proposed system is sufficiently flexible
64.2and adaptable to adjust to modifications in the construction, packaging, formatting, and
64.3marketing of tobacco products by the industry; and
64.4(iv) recommendations to modify existing penalties or to impose new penalties or
64.5other sanctions to ensure compliance with the system.
64.6    Subd. 2. Due date. The report required by subdivision 1 is due January 1, 2014.
64.7    Subd. 3. Procedure. The report required under this section must be made in the
64.8manner provided under Minnesota Statutes, section 3.195. In addition, copies must be
64.9provided to the chairs and ranking minority members of the legislative committees and
64.10divisions with jurisdiction over taxation.
64.11    Subd. 4. Appropriation. (a) $100,000 is appropriated from the general fund to the
64.12commissioner of revenue for fiscal year 2014 for the cost of preparing the report under
64.13subdivision 1.
64.14(b) The appropriation under this subdivision is a onetime appropriation and is not
64.15included in the base budget.
64.16EFFECTIVE DATE.This section is effective the day following final enactment.

64.17    Sec. 19. REPEALER.
64.18Minnesota Statutes 2012, sections 16A.725; and 256.9658, are repealed.
64.19EFFECTIVE DATE.This section is effective July 1, 2013.


64.22    Section 1. Minnesota Statutes 2012, section 116J.8737, subdivision 1, is amended to
64.23read:
64.24    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
64.25have the meanings given.
64.26(b) "Qualified small business" means a business that has been certified by the
64.27commissioner under subdivision 2.
64.28(c) "Qualified investor" means an investor who has been certified by the
64.29commissioner under subdivision 3.
64.30(d) "Qualified fund" means a pooled angel investment network fund that has been
64.31certified by the commissioner under subdivision 4.
65.1(e) "Qualified investment" means a cash investment in a qualified small business
65.2of a minimum of:
65.3(1) $10,000 in a calendar year by a qualified investor; or
65.4(2) $30,000 in a calendar year by a qualified fund.
65.5A qualified investment must be made in exchange for common stock, a partnership
65.6or membership interest, preferred stock, debt with mandatory conversion to equity, or an
65.7equivalent ownership interest as determined by the commissioner.
65.8(f) "Family" means a family member within the meaning of the Internal Revenue
65.9Code, section 267(c)(4).
65.10(g) "Pass-through entity" means a corporation that for the applicable taxable year is
65.11treated as an S corporation or a general partnership, limited partnership, limited liability
65.12partnership, trust, or limited liability company and which for the applicable taxable year is
65.13not taxed as a corporation under chapter 290.
65.14(h) "Intern" means a student of an accredited institution of higher education, or a
65.15former student who has graduated in the past six months from an accredited institution
65.16of higher education, who is employed by a qualified small business in a nonpermanent
65.17position for a duration of nine months or less that provides training and experience in the
65.18primary business activity of the business.
65.19(i) "Liquidation event" means a conversion of qualified investment for cash, cash
65.20and other consideration, or any other form of equity or debt interest.
65.21EFFECTIVE DATE.This section is effective for qualified small businesses
65.22certified after June 30, 2013.

65.23    Sec. 2. Minnesota Statutes 2012, section 116J.8737, subdivision 2, is amended to read:
65.24    Subd. 2. Certification of qualified small businesses. (a) Businesses may apply
65.25to the commissioner for certification as a qualified small business for a calendar year.
65.26The application must be in the form and be made under the procedures specified by the
65.27commissioner, accompanied by an application fee of $150. Application fees are deposited
65.28in the small business investment tax credit administration account in the special revenue
65.29fund. The application for certification for 2010 must be made available on the department's
65.30Web site by August 1, 2010. Applications for subsequent years' certification must be made
65.31available on the department's Web site by November 1 of the preceding year.
65.32(b) Within 30 days of receiving an application for certification under this subdivision,
65.33the commissioner must either certify the business as satisfying the conditions required of a
65.34qualified small business, request additional information from the business, or reject the
65.35application for certification. If the commissioner requests additional information from the
66.1business, the commissioner must either certify the business or reject the application within
66.230 days of receiving the additional information. If the commissioner neither certifies the
66.3business nor rejects the application within 30 days of receiving the original application or
66.4within 30 days of receiving the additional information requested, whichever is later, then
66.5the application is deemed rejected, and the commissioner must refund the $150 application
66.6fee. A business that applies for certification and is rejected may reapply.
66.7(c) To receive certification, a business must satisfy all of the following conditions:
66.8(1) the business has its headquarters in Minnesota;
66.9(2) at least 51 percent of the business's employees are employed in Minnesota, and
66.1051 percent of the business's total payroll is paid or incurred in the state;
66.11(3) the business is engaged in, or is committed to engage in, innovation in Minnesota
66.12in one of the following as its primary business activity:
66.13(i) using proprietary technology to add value to a product, process, or service in a
66.14qualified high-technology field;
66.15(ii) researching or developing a proprietary product, process, or service in a qualified
66.16high-technology field; or
66.17(iii) researching, developing, or producing a new proprietary technology for use in
66.18the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;
66.19(4) other than the activities specifically listed in clause (3), the business is not
66.20engaged in real estate development, insurance, banking, lending, lobbying, political
66.21consulting, information technology consulting, wholesale or retail trade, leisure,
66.22hospitality, transportation, construction, ethanol production from corn, or professional
66.23services provided by attorneys, accountants, business consultants, physicians, or health
66.24care consultants;
66.25(5) the business has fewer than 25 employees;
66.26(6) the business must pay its employees annual wages of at least 175 percent of the
66.27federal poverty guideline for the year for a family of four and must pay its interns annual
66.28wages of at least 175 percent of the federal minimum wage used for federally covered
66.29employers, except that this requirement must be reduced proportionately for employees
66.30and interns who work less than full-time, and does not apply to an executive, officer, or
66.31member of the board of the business, or to any employee who owns, controls, or holds
66.32power to vote more than 20 percent of the outstanding securities of the business;
66.33(7) the business has (i) not been in operation for more than ten years, or (ii) the
66.34business has not been in operation for more than 20 years if the business is engaged
66.35in the research, development, or production of medical devices or pharmaceuticals for
67.1which United States Food and Drug Administration approval is required for use in the
67.2treatment or diagnosis of a disease or condition;
67.3(8) the business has not previously received private equity investments of more
67.4than $4,000,000; and
67.5    (9) the business is not an entity disqualified under section 80A.50, paragraph (b),
67.6clause (3).; and
67.7(10) the business has not issued securities that are traded on a public exchange.
67.8(d) In applying the limit under paragraph (c), clause (5), the employees in all members
67.9of the unitary business, as defined in section 290.17, subdivision 4, must be included.
67.10(e) In order for a qualified investment in a business to be eligible for tax credits,:
67.11(1) the business must have applied for and received certification for the calendar
67.12year in which the investment was made prior to the date on which the qualified investment
67.13was made.;
67.14(2) the business must not have issued securities that are traded on a public exchange;
67.15(3) the business must not issue securities that are traded on a public exchange within
67.16180 days after the date on which the qualified investment was made; and
67.17(4) the business must not have a liquidation event within 180 days after the date on
67.18which the qualified investment was made.
67.19(f) The commissioner must maintain a list of businesses certified under this
67.20subdivision for the calendar year and make the list accessible to the public on the
67.21department's Web site.
67.22(g) For purposes of this subdivision, the following terms have the meanings given:
67.23(1) "qualified high-technology field" includes aerospace, agricultural processing,
67.24renewable energy, energy efficiency and conservation, environmental engineering, food
67.25technology, cellulosic ethanol, information technology, materials science technology,
67.26nanotechnology, telecommunications, biotechnology, medical device products,
67.27pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar
67.28fields; and
67.29(2) "proprietary technology" means the technical innovations that are unique and
67.30legally owned or licensed by a business and includes, without limitation, those innovations
67.31that are patented, patent pending, a subject of trade secrets, or copyrighted.
67.32EFFECTIVE DATE.This section is effective for qualified small businesses
67.33certified after June 30, 2013, except the amendments to paragraph (c), clause (7), are
67.34effective the day following final enactment.

67.35    Sec. 3. Minnesota Statutes 2012, section 116J.8737, subdivision 8, is amended to read:
68.1    Subd. 8. Data privacy. (a) Data contained in an application submitted to the
68.2commissioner under subdivision 2, 3, or 4 are nonpublic data, or private data on
68.3individuals, as defined in section 13.02, subdivision 9 or 12, except that the following
68.4data items are public:
68.5(1) the name, mailing address, telephone number, e-mail address, contact person's
68.6name, and industry type of a qualified small business upon approval of the application
68.7and certification by the commissioner under subdivision 2;
68.8(2) the name of a qualified investor upon approval of the application and certification
68.9by the commissioner under subdivision 3;
68.10(3) the name of a qualified fund upon approval of the application and certification
68.11by the commissioner under subdivision 4;
68.12(4) for credit certificates issued under subdivision 5, the amount of the credit
68.13certificate issued, amount of the qualifying investment, the name of the qualifying investor
68.14or qualifying fund that received the certificate, and the name of the qualifying small
68.15business in which the qualifying investment was made;
68.16(5) for credits revoked under subdivision 7, paragraph (a), the amount revoked and
68.17the name of the qualified investor or qualified fund; and
68.18(6) for credits revoked under subdivision 7, paragraphs (b) and (c), the amount
68.19revoked and the name of the qualified small business.
68.20(b) The following data, including data classified as nonpublic or private, must be
68.21provided to the consultant for use in conducting the program evaluation under subdivision
68.2210:
68.23(1) the commissioner of employment and economic development shall provide data
68.24contained in an application for certification received from a qualified small business,
68.25qualified investor, or qualified fund, and any annual reporting information received on a
68.26qualified small business, qualified investor, or qualified fund; and
68.27(2) the commissioner of revenue shall provide data contained in any applicable tax
68.28returns of a qualified small business, qualified investor, or qualified fund.
68.29EFFECTIVE DATE.This section is effective the day following final enactment.

68.30    Sec. 4. Minnesota Statutes 2012, section 289A.02, subdivision 7, is amended to read:
68.31    Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal
68.32Revenue Code" means the Internal Revenue Code of 1986, as amended through April
68.3314, 2011 January 3, 2013.
68.34EFFECTIVE DATE.This section is effective the day following final enactment.

69.1    Sec. 5. Minnesota Statutes 2012, section 289A.08, subdivision 1, is amended to read:
69.2    Subdivision 1. Generally; individuals. (a) A taxpayer must file a return for each
69.3taxable year the taxpayer is required to file a return under section 6012 of the Internal
69.4Revenue Code, except that:
69.5(1) an individual who is not a Minnesota resident for any part of the year is not
69.6required to file a Minnesota income tax return if the individual's gross income derived
69.7from Minnesota sources as determined under sections 290.081, paragraph (a), and 290.17,
69.8is less than the filing requirements for a single individual who is a full year resident of
69.9Minnesota; and
69.10(2) an individual who is a Minnesota resident is not required to file a Minnesota
69.11income tax return if the individual's gross income derived from Minnesota sources as
69.12determined under section 290.17, less the subtraction allowed under section 290.01,
69.13subdivision 19b , clauses (11) and (14) (9) and (12), is less than the filing requirements for
69.14a single individual who is a full-year resident of Minnesota.
69.15(b) The decedent's final income tax return, and other income tax returns for prior
69.16years where the decedent had gross income in excess of the minimum amount at which
69.17an individual is required to file and did not file, must be filed by the decedent's personal
69.18representative, if any. If there is no personal representative, the return or returns must
69.19be filed by the transferees, as defined in section 270C.58, subdivision 3, who receive
69.20property of the decedent.
69.21(c) The term "gross income," as it is used in this section, has the same meaning
69.22given it in section 290.01, subdivision 20.

69.23    Sec. 6. Minnesota Statutes 2012, section 289A.08, subdivision 3, is amended to read:
69.24    Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
69.25tax under section 290.014, subdivision 5, must file a return, except that a foreign operating
69.26corporation as defined in section 290.01, subdivision 6b, is not required to file a return.
69.27(b) Members of a unitary business that are required to file a combined report on one
69.28return must designate a member of the unitary business to be responsible for tax matters,
69.29including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
69.30or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
69.31taxes lawfully due. The designated member must be a member of the unitary business that
69.32is filing the single combined report and either:
69.33(1) a corporation that is subject to the taxes imposed by chapter 290; or
69.34(2) a corporation that is not subject to the taxes imposed by chapter 290:
70.1(i) Such corporation consents by filing the return as a designated member under this
70.2clause to remit taxes, penalties, interest, or additions to tax due from the members of the
70.3unitary business subject to tax, and receive refunds or other payments on behalf of other
70.4members of the unitary business. The member designated under this clause is a "taxpayer"
70.5for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
70.6on the unitary business under this chapter and chapter 290.
70.7(ii) If the state does not otherwise have the jurisdiction to tax the member designated
70.8under this clause, consenting to be the designated member does not create the jurisdiction
70.9to impose tax on the designated member, other than as described in item (i).
70.10(iii) The member designated under this clause must apply for a business tax account
70.11identification number.
70.12(c) The commissioner shall adopt rules for the filing of one return on behalf of the
70.13members of an affiliated group of corporations that are required to file a combined report.
70.14All members of an affiliated group that are required to file a combined report must file one
70.15return on behalf of the members of the group under rules adopted by the commissioner.
70.16(d) If a corporation claims on a return that it has paid tax in excess of the amount of
70.17taxes lawfully due, that corporation must include on that return information necessary for
70.18payment of the tax in excess of the amount lawfully due by electronic means.
70.19EFFECTIVE DATE.This section is effective for taxable years beginning after
70.20December 31, 2012.

70.21    Sec. 7. Minnesota Statutes 2012, section 289A.08, subdivision 7, is amended to read:
70.22    Subd. 7. Composite income tax returns for nonresident partners, shareholders,
70.23and beneficiaries. (a) The commissioner may allow a partnership with nonresident
70.24partners to file a composite return and to pay the tax on behalf of nonresident partners who
70.25have no other Minnesota source income. This composite return must include the names,
70.26addresses, Social Security numbers, income allocation, and tax liability for the nonresident
70.27partners electing to be covered by the composite return.
70.28(b) The computation of a partner's tax liability must be determined by multiplying
70.29the income allocated to that partner by the highest rate used to determine the tax liability
70.30for individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
70.31deductions, or personal exemptions are not allowed.
70.32(c) The partnership must submit a request to use this composite return filing method
70.33for nonresident partners. The requesting partnership must file a composite return in the
70.34form prescribed by the commissioner of revenue. The filing of a composite return is
70.35considered a request to use the composite return filing method.
71.1(d) The electing partner must not have any Minnesota source income other than the
71.2income from the partnership and other electing partnerships. If it is determined that the
71.3electing partner has other Minnesota source income, the inclusion of the income and tax
71.4liability for that partner under this provision will not constitute a return to satisfy the
71.5requirements of subdivision 1. The tax paid for the individual as part of the composite return
71.6is allowed as a payment of the tax by the individual on the date on which the composite
71.7return payment was made. If the electing nonresident partner has no other Minnesota
71.8source income, filing of the composite return is a return for purposes of subdivision 1.
71.9(e) This subdivision does not negate the requirement that an individual pay estimated
71.10tax if the individual's liability would exceed the requirements set forth in section 289A.25.
71.11The individual's liability to pay estimated tax is, however, satisfied when the partnership
71.12pays composite estimated tax in the manner prescribed in section 289A.25.
71.13(f) If an electing partner's share of the partnership's gross income from Minnesota
71.14sources is less than the filing requirements for a nonresident under this subdivision, the tax
71.15liability is zero. However, a statement showing the partner's share of gross income must
71.16be included as part of the composite return.
71.17(g) The election provided in this subdivision is only available to a partner who has
71.18no other Minnesota source income and who is either (1) a full-year nonresident individual
71.19or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of
71.20the Internal Revenue Code.
71.21(h) A corporation defined in section 290.9725 and its nonresident shareholders may
71.22make an election under this paragraph. The provisions covering the partnership apply to
71.23the corporation and the provisions applying to the partner apply to the shareholder.
71.24(i) Estates and trusts distributing current income only and the nonresident individual
71.25beneficiaries of the estates or trusts may make an election under this paragraph. The
71.26provisions covering the partnership apply to the estate or trust. The provisions applying to
71.27the partner apply to the beneficiary.
71.28(j) For the purposes of this subdivision, "income" means the partner's share of
71.29federal adjusted gross income from the partnership modified by the additions provided in
71.30section 290.01, subdivision 19a, clauses (6) to (10) (9), and the subtractions provided in:
71.31(i) section 290.01, subdivision 19b, clause (8), to the extent the amount is assignable or
71.32allocable to Minnesota under section 290.17; and (ii) section 290.01, subdivision 19b,
71.33clause (13). The subtraction allowed under section 290.01, subdivision 19b, clause (8), is
71.34only allowed on the composite tax computation to the extent the electing partner would
71.35have been allowed the subtraction.

72.1    Sec. 8. Minnesota Statutes 2012, section 290.01, subdivision 5, is amended to read:
72.2    Subd. 5. Domestic corporation. The term "domestic" when applied to a corporation
72.3means a corporation:
72.4(1) created or organized in the United States, or under the laws of the United States or
72.5of any state, the District of Columbia, or any political subdivision of any of the foregoing
72.6but not including the Commonwealth of Puerto Rico, or any possession of the United States;
72.7(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
72.8Code; or
72.9(3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.
72.10    (2) which, regardless of the place where the corporation was incorporated:
72.11    (i) has the average of its property, payroll, and sales factors, as defined under section
72.12290.191, within the territorial limits of the 50 states of the United States and the District of
72.13Columbia of 20 percent or more; or
72.14    (ii) derives less than 80 percent of its income from foreign sources;
72.15(3) which is:
72.16(i) a foreign corporation, foreign partnership, or other foreign entity that has its
72.17income included in the federal taxable income, as defined in section 63 of the Internal
72.18Revenue Code, of an entity as defined in clause (1) or an individual who is a United States
72.19resident, as defined in section 865(g) of the Internal Revenue Code; and
72.20(ii) not treated as a corporation for federal income tax purposes;
72.21(4) which is incorporated in a tax haven; or
72.22(5) which is engaged in activity in a tax haven sufficient for the tax haven to impose a
72.23net income tax under United States constitutional standards and section 290.015, and which
72.24reports that 20 percent or more of its income is attributable to business in the tax haven.
72.25EFFECTIVE DATE.This section is effective for taxable years beginning after
72.26December 31, 2012.

72.27    Sec. 9. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision
72.28to read:
72.29    Subd. 5c. Tax haven. (a) "Tax haven" means the following foreign jurisdictions,
72.30unless the listing of the jurisdiction does not apply under paragraph (b):
72.31(1) Anguilla;
72.32(2) Antigua and Barbuda;
72.33(3) Aruba;
72.34(4) Bahamas;
72.35(5) Bahrain;
73.1(6) Belize;
73.2(7) Bermuda;
73.3(8) British Virgin Islands;
73.4(9) Cayman Islands;
73.5(10) Cook Islands;
73.6(11) Costa Rica;
73.7(12) Cyprus;
73.8(13) Dominica;
73.9(14) Gibraltar;
73.10(15) Grenada;
73.11(16) Guernsey-Sark-Alderney;
73.12(17) Isle of Man;
73.13(18) Jersey;
73.14(19) Jordan;
73.15(20) Lebanon;
73.16(21) Liberia;
73.17(22) Liechtenstein;
73.18(23) Malta;
73.19(24) Marshall Islands;
73.20(25) Monaco;
73.21(26) Nauru;
73.22(27) Netherlands Antilles;
73.23(28) Niue;
73.24(29) Panama;
73.25(30) St. Kitts and Nevis;
73.26(31) St. Lucia;
73.27(32) St. Vincent and Grenadines;
73.28(33) Samoa;
73.29(34) Turks and Caicos; and
73.30(35) Vanuatu.
73.31(b) A foreign jurisdiction's listing under paragraph (a) does not apply to the first
73.32taxable year after:
73.33(1) the United States enters into a tax treaty or other agreement with the foreign
73.34jurisdiction that provides for prompt, obligatory, and automatic exchange of information
73.35with the United States government relevant to enforcing the provisions of federal tax laws
74.1applicable to both individuals and all corporations and other entities and the treaty or other
74.2agreement was in effect for the taxable year; and
74.3(2) the foreign jurisdiction imposes a tax rate of at least ten percent on a tax base
74.4equal to at least 90 percent of the tax base that applies to corporations under the Internal
74.5Revenue Code.
74.6EFFECTIVE DATE.This section is effective for returns filed for taxable years
74.7beginning after December 31, 2012.

74.8    Sec. 10. Minnesota Statutes 2012, section 290.01, subdivision 19, as amended by Laws
74.92013, chapter 3, section 3, is amended to read:
74.10    Subd. 19. Net income. The term "net income" means the federal taxable income,
74.11as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
74.12date named in this subdivision, incorporating the federal effective dates of changes to the
74.13Internal Revenue Code and any elections made by the taxpayer in accordance with the
74.14Internal Revenue Code in determining federal taxable income for federal income tax
74.15purposes, and with the modifications provided in subdivisions 19a to 19f.
74.16    In the case of a regulated investment company or a fund thereof, as defined in section
74.17851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
74.18company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
74.19except that:
74.20    (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
74.21Revenue Code does not apply;
74.22    (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
74.23Revenue Code must be applied by allowing a deduction for capital gain dividends and
74.24exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
74.25Revenue Code; and
74.26    (3) the deduction for dividends paid must also be applied in the amount of any
74.27undistributed capital gains which the regulated investment company elects to have treated
74.28as provided in section 852(b)(3)(D) of the Internal Revenue Code.
74.29    The net income of a real estate investment trust as defined and limited by section
74.30856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
74.31taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
74.32    The net income of a designated settlement fund as defined in section 468B(d) of
74.33the Internal Revenue Code means the gross income as defined in section 468B(b) of the
74.34Internal Revenue Code.
75.1    The Internal Revenue Code of 1986, as amended through April 14, 2011 January 3,
75.22013, shall be in effect for taxable years beginning after December 31, 1996, and before
75.3January 1, 2012, and for taxable years beginning after December 31, 2012. The Internal
75.4Revenue Code of 1986, as amended through January 3, 2013, is in effect for taxable years
75.5beginning after December 31, 2011, and before January 1, 2013.
75.6    Except as otherwise provided, references to the Internal Revenue Code in
75.7subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
75.8the applicable year.
75.9EFFECTIVE DATE.This section is effective the day following final enactment,
75.10except the changes incorporated by federal changes are effective at the same time as the
75.11changes were effective for federal purposes.

75.12    Sec. 11. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
75.13    Subd. 19a. Additions to federal taxable income. For individuals, estates, and
75.14trusts, there shall be added to federal taxable income:
75.15    (1)(i) interest income on obligations of any state other than Minnesota or a political
75.16or governmental subdivision, municipality, or governmental agency or instrumentality
75.17of any state other than Minnesota exempt from federal income taxes under the Internal
75.18Revenue Code or any other federal statute; and
75.19    (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
75.20Code, except:
75.21(A) the portion of the exempt-interest dividends exempt from state taxation under
75.22the laws of the United States; and
75.23(B) the portion of the exempt-interest dividends derived from interest income
75.24on obligations of the state of Minnesota or its political or governmental subdivisions,
75.25municipalities, governmental agencies or instrumentalities, but only if the portion of the
75.26exempt-interest dividends from such Minnesota sources paid to all shareholders represents
75.2795 percent or more of the exempt-interest dividends, including any dividends exempt
75.28under subitem (A), that are paid by the regulated investment company as defined in section
75.29851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
75.30defined in section 851(g) of the Internal Revenue Code, making the payment; and
75.31    (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
75.32government described in section 7871(c) of the Internal Revenue Code shall be treated as
75.33interest income on obligations of the state in which the tribe is located;
75.34    (2) to the extent allowed as a deduction under section 63(d) of the Internal Revenue
75.35Code the amount of:
76.1    (i) income, sales and use, motor vehicle sales, or excise taxes paid or accrued within
76.2the taxable year under this chapter and the amount of;
76.3    (ii) taxes based on net income paid, sales and use, motor vehicle sales, or excise
76.4taxes paid to any other state or to any province or territory of Canada, to the extent allowed
76.5as a deduction under section 63(d) of the Internal Revenue Code,; and
76.6(iii) charitable contributions, as defined in section 170(c) of the Internal Revenue
76.7Code, to the extent allowed as a deduction under section 170(a) of the Internal Revenue
76.8Code.
76.9 but The addition sum of the additions under items (i) to (iii) may not be more
76.10than the amount by which the itemized deductions as allowed under section 63(d) of
76.11the Internal Revenue Code state itemized deduction exceeds the amount of the standard
76.12deduction as defined in section 63(c) of the Internal Revenue Code, disregarding the
76.13amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue
76.14Code, minus any addition that would have been required under clause (21) if the taxpayer
76.15had claimed the standard deduction. For the purpose of this paragraph, the disallowance of
76.16itemized deductions under section 68 of the Internal Revenue Code of 1986, income, sales
76.17and use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed.
76.18For purposes of this clause, income, sales and use, and charitable contributions are the last
76.19itemized deductions disallowed under clause (13);
76.20    (3) the capital gain amount of a lump-sum distribution to which the special tax under
76.21section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
76.22    (4) the amount of income taxes paid or accrued within the taxable year under this
76.23chapter and taxes based on net income paid to any other state or any province or territory
76.24of Canada, to the extent allowed as a deduction in determining federal adjusted gross
76.25income. For the purpose of this paragraph, income taxes do not include the taxes imposed
76.26by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
76.27    (5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
76.28other than expenses or interest used in computing net interest income for the subtraction
76.29allowed under subdivision 19b, clause (1);
76.30    (6) the amount of a partner's pro rata share of net income which does not flow
76.31through to the partner because the partnership elected to pay the tax on the income under
76.32section 6242(a)(2) of the Internal Revenue Code;
76.33    (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
76.34Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
76.35in the taxable year generates a deduction for depreciation under section 168(k) and the
76.36activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
77.1the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
77.2limited to excess of the depreciation claimed by the activity under section 168(k) over the
77.3amount of the loss from the activity that is not allowed in the taxable year. In succeeding
77.4taxable years when the losses not allowed in the taxable year are allowed, the depreciation
77.5under section 168(k) is allowed;
77.6    (8) 80 percent of the amount by which the deduction allowed by section 179 of the
77.7Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
77.8Revenue Code of 1986, as amended through December 31, 2003;
77.9    (9) to the extent deducted in computing federal taxable income, the amount of the
77.10deduction allowable under section 199 of the Internal Revenue Code;
77.11    (10) for taxable years beginning before January 1, 2013, the exclusion allowed under
77.12section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
77.13(11) (10) the amount of expenses disallowed under section 290.10, subdivision 2;
77.14    (12) for taxable years beginning before January 1, 2010, the amount deducted for
77.15qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
77.16the extent deducted from gross income;
77.17    (13) for taxable years beginning before January 1, 2010, the amount deducted for
77.18certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
77.19of the Internal Revenue Code, to the extent deducted from gross income;
77.20(14) the additional standard deduction for property taxes payable that is allowable
77.21under section 63(c)(1)(C) of the Internal Revenue Code;
77.22(15) the additional standard deduction for qualified motor vehicle sales taxes
77.23allowable under section 63(c)(1)(E) of the Internal Revenue Code;
77.24(16) (11) discharge of indebtedness income resulting from reacquisition of business
77.25indebtedness and deferred under section 108(i) of the Internal Revenue Code;
77.26(17) the amount of unemployment compensation exempt from tax under section
77.2785(c) of the Internal Revenue Code;
77.28(18) (12) changes to federal taxable income attributable to a net operating loss that
77.29the taxpayer elected to carry back for more than two years for federal purposes but for
77.30which the losses can be carried back for only two years under section 290.095, subdivision
77.3111, paragraph (c);
77.32(19) (13) to the extent included in the computation of federal taxable income in
77.33taxable years beginning after December 31, 2010, the amount of disallowed itemized
77.34deductions, but the amount of disallowed itemized deductions plus the addition required
77.35under clause (2) may not be more than the amount by which the itemized deductions as
77.36allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the
78.1standard deduction as defined in section 63(c) of the Internal Revenue Code, disregarding
78.2the amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue
78.3Code, and reduced by any addition that would have been required under clause (21) if the
78.4taxpayer had claimed the standard deduction:
78.5(i) the amount of disallowed itemized deductions is equal to the lesser of:
78.6(A) three percent of the excess of the taxpayer's federal adjusted gross income
78.7over the applicable amount; or
78.8(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
78.9taxpayer under the Internal Revenue Code for the taxable year;
78.10(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
78.11married individual filing a separate return. Each dollar amount shall be increased by
78.12an amount equal to:
78.13(A) such dollar amount, multiplied by
78.14(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
78.15Revenue Code for the calendar year in which the taxable year begins, by substituting
78.16"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
78.17(iii) the term "itemized deductions" does not include:
78.18(A) the deduction for medical expenses under section 213 of the Internal Revenue
78.19Code;
78.20(B) any deduction for investment interest as defined in section 163(d) of the Internal
78.21Revenue Code; and
78.22(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
78.23theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
78.24Code or for losses described in section 165(d) of the Internal Revenue Code; and
78.25(20) (14) to the extent included in federal taxable income in taxable years beginning
78.26after December 31, 2010, the amount of disallowed personal exemptions for taxpayers
78.27with federal adjusted gross income over the threshold amount:
78.28(i) the disallowed personal exemption amount is equal to the dollar amount of the
78.29personal exemptions claimed by the taxpayer in the computation of federal taxable income
78.30multiplied by the applicable percentage;
78.31(ii) "applicable percentage" means two percentage points for each $2,500 (or
78.32fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
78.33year exceeds the threshold amount. In the case of a married individual filing a separate
78.34return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
78.35no event shall the applicable percentage exceed 100 percent;
78.36(iii) the term "threshold amount" means:
79.1(A) $150,000 in the case of a joint return or a surviving spouse;
79.2(B) $125,000 in the case of a head of a household;
79.3(C) $100,000 in the case of an individual who is not married and who is not a
79.4surviving spouse or head of a household; and
79.5(D) $75,000 in the case of a married individual filing a separate return; and
79.6(iv) the thresholds shall be increased by an amount equal to:
79.7(A) such dollar amount, multiplied by
79.8(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
79.9Revenue Code for the calendar year in which the taxable year begins, by substituting
79.10"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and.
79.11(21) to the extent deducted in the computation of federal taxable income, for taxable
79.12years beginning after December 31, 2010, and before January 1, 2013, the difference
79.13between the standard deduction allowed under section 63(c) of the Internal Revenue Code
79.14and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code
79.15as amended through December 1, 2010.
79.16EFFECTIVE DATE.This section is effective for taxable years beginning after
79.17December 31, 2012.

79.18    Sec. 12. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
79.19    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
79.20and trusts, there shall be subtracted from federal taxable income:
79.21    (1) net interest income on obligations of any authority, commission, or
79.22instrumentality of the United States to the extent includable in taxable income for federal
79.23income tax purposes but exempt from state income tax under the laws of the United States;
79.24    (2) if included in federal taxable income, the amount of any overpayment of income
79.25tax to Minnesota or to any other state, for any previous taxable year, whether the amount
79.26is received as a refund or as a credit to another taxable year's income tax liability;
79.27    (3) the amount paid to others, less the amount used to claim the credit allowed under
79.28section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
79.29to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
79.30transportation of each qualifying child in attending an elementary or secondary school
79.31situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
79.32resident of this state may legally fulfill the state's compulsory attendance laws, which
79.33is not operated for profit, and which adheres to the provisions of the Civil Rights Act
79.34of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
79.35tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
80.1"textbooks" includes books and other instructional materials and equipment purchased
80.2or leased for use in elementary and secondary schools in teaching only those subjects
80.3legally and commonly taught in public elementary and secondary schools in this state.
80.4Equipment expenses qualifying for deduction includes expenses as defined and limited in
80.5section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
80.6books and materials used in the teaching of religious tenets, doctrines, or worship, the
80.7purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
80.8or materials for, or transportation to, extracurricular activities including sporting events,
80.9musical or dramatic events, speech activities, driver's education, or similar programs. No
80.10deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
80.11the qualifying child's vehicle to provide such transportation for a qualifying child. For
80.12purposes of the subtraction provided by this clause, "qualifying child" has the meaning
80.13given in section 32(c)(3) of the Internal Revenue Code;
80.14    (4) income as provided under section 290.0802;
80.15    (5) to the extent included in federal adjusted gross income, income realized on
80.16disposition of property exempt from tax under section 290.491;
80.17    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
80.18of the Internal Revenue Code in determining federal taxable income by an individual
80.19who does not itemize deductions for federal income tax purposes for the taxable year, an
80.20amount equal to 50 percent of the excess of charitable contributions over $500 allowable
80.21as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
80.22under the provisions of Public Law 109-1 and Public Law 111-126;
80.23    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
80.24qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
80.25of subnational foreign taxes for the taxable year, but not to exceed the total subnational
80.26foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
80.27"federal foreign tax credit" means the credit allowed under section 27 of the Internal
80.28Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
80.29under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
80.30the extent they exceed the federal foreign tax credit;
80.31    (8) (6) in each of the five tax years immediately following the tax year in which an
80.32addition is required under subdivision 19a, clause (7), or 19c, clause (15) (12), in the case
80.33of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
80.34delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
80.35of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
80.36clause (15) (12), in the case of a shareholder of an S corporation, minus the positive value
81.1of any net operating loss under section 172 of the Internal Revenue Code generated for the
81.2tax year of the addition. The resulting delayed depreciation cannot be less than zero;
81.3    (9) (7) job opportunity building zone income as provided under section 469.316;
81.4    (10) (8) to the extent included in federal taxable income, the amount of compensation
81.5paid to members of the Minnesota National Guard or other reserve components of the
81.6United States military for active service, excluding compensation for services performed
81.7under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
81.8service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
81.9(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
81.105b , but "active service" excludes service performed in accordance with section 190.08,
81.11subdivision 3 ;
81.12    (11) (9) to the extent included in federal taxable income, the amount of compensation
81.13paid to Minnesota residents who are members of the armed forces of the United States
81.14or United Nations for active duty performed under United States Code, title 10; or the
81.15authority of the United Nations;
81.16    (12) (10) an amount, not to exceed $10,000, equal to qualified expenses related to a
81.17qualified donor's donation, while living, of one or more of the qualified donor's organs
81.18to another person for human organ transplantation. For purposes of this clause, "organ"
81.19means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
81.20"human organ transplantation" means the medical procedure by which transfer of a human
81.21organ is made from the body of one person to the body of another person; "qualified
81.22expenses" means unreimbursed expenses for both the individual and the qualified donor
81.23for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
81.24may be subtracted under this clause only once; and "qualified donor" means the individual
81.25or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
81.26individual may claim the subtraction in this clause for each instance of organ donation for
81.27transplantation during the taxable year in which the qualified expenses occur;
81.28    (13) (11) in each of the five tax years immediately following the tax year in which an
81.29addition is required under subdivision 19a, clause (8), or 19c, clause (16) (13), in the case
81.30of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of
81.31the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16)
81.32 (13), in the case of a shareholder of a corporation that is an S corporation, minus the
81.33positive value of any net operating loss under section 172 of the Internal Revenue Code
81.34generated for the tax year of the addition. If the net operating loss exceeds the addition for
81.35the tax year, a subtraction is not allowed under this clause;
82.1    (14) (12) to the extent included in the federal taxable income of a nonresident of
82.2Minnesota, compensation paid to a service member as defined in United States Code, title
82.310, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
82.4Act, Public Law 108-189, section 101(2);
82.5    (15) (13) to the extent included in federal taxable income, the amount of national
82.6service educational awards received from the National Service Trust under United States
82.7Code, title 42, sections 12601 to 12604, for service in an approved Americorps National
82.8Service program;
82.9(16) (14) to the extent included in federal taxable income, discharge of indebtedness
82.10income resulting from reacquisition of business indebtedness included in federal taxable
82.11income under section 108(i) of the Internal Revenue Code. This subtraction applies only
82.12to the extent that the income was included in net income in a prior year as a result of the
82.13addition under section 290.01, subdivision 19a, clause (16) (11); and
82.14(17) (15) the amount of the net operating loss allowed under section 290.095,
82.15subdivision 11 , paragraph (c).;
82.16(16) the amount of the limitation on itemized deductions under section 68(b) of the
82.17Internal Revenue Code;
82.18(17) the amount of the phase-out of personal exemptions under section 151(d) of
82.19the Internal Revenue Code; and
82.20(18) in the year that the expenditures are made for railroad track maintenance, as
82.21defined in section 45G(d) of the Internal Revenue Code, in the case of a shareholder of a
82.22corporation that is an S corporation or a partner in a partnership, an amount equal to the
82.23credit awarded under section 45G(a) of the Internal Revenue Code. The subtraction is
82.24reduced to an amount equal to the percentage of the shareholder's or partner's share of the
82.25net income of the S corporation or partnership.
82.26EFFECTIVE DATE.This section is effective for taxable years beginning after
82.27December 31, 2012.

82.28    Sec. 13. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
82.29    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
82.30there shall be added to federal taxable income:
82.31    (1) the amount of any deduction taken for federal income tax purposes for income,
82.32excise, or franchise taxes based on net income or related minimum taxes, including but not
82.33limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
82.34another state, a political subdivision of another state, the District of Columbia, or any
82.35foreign country or possession of the United States;
83.1    (2) interest not subject to federal tax upon obligations of: the United States, its
83.2possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
83.3state, any of its political or governmental subdivisions, any of its municipalities, or any
83.4of its governmental agencies or instrumentalities; the District of Columbia; or Indian
83.5tribal governments;
83.6    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
83.7Revenue Code;
83.8    (4) the amount of any net operating loss deduction taken for federal income tax
83.9purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
83.10deduction under section 810 of the Internal Revenue Code;
83.11    (5) the amount of any special deductions taken for federal income tax purposes
83.12under sections 241 to 247 and 965 of the Internal Revenue Code;
83.13    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
83.14clause (a), that are not subject to Minnesota income tax;
83.15    (7) the amount of any capital losses deducted for federal income tax purposes under
83.16sections 1211 and 1212 of the Internal Revenue Code;
83.17    (8) the exempt foreign trade income of a foreign sales corporation under sections
83.18921(a) and 291 of the Internal Revenue Code;
83.19    (9) (8) the amount of percentage depletion deducted under sections 611 through
83.20614 and 291 of the Internal Revenue Code;
83.21    (10) (9) for certified pollution control facilities placed in service in a taxable year
83.22beginning before December 31, 1986, and for which amortization deductions were elected
83.23under section 169 of the Internal Revenue Code of 1954, as amended through December
83.2431, 1985, the amount of the amortization deduction allowed in computing federal taxable
83.25income for those facilities;
83.26    (11) the amount of any deemed dividend from a foreign operating corporation
83.27determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
83.28shall be reduced by the amount of the addition to income required by clauses (20), (21),
83.29(22), and (23);
83.30    (12) (10) the amount of a partner's pro rata share of net income which does not flow
83.31through to the partner because the partnership elected to pay the tax on the income under
83.32section 6242(a)(2) of the Internal Revenue Code;
83.33    (13) the amount of net income excluded under section 114 of the Internal Revenue
83.34Code;
84.1    (14) (11) any increase in subpart F income, as defined in section 952(a) of the
84.2Internal Revenue Code, for the taxable year when subpart F income is calculated without
84.3regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
84.4    (15) (12) 80 percent of the depreciation deduction allowed under section
84.5168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
84.6the taxpayer has an activity that in the taxable year generates a deduction for depreciation
84.7under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
84.8year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
84.9allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
84.10of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
84.11over the amount of the loss from the activity that is not allowed in the taxable year. In
84.12succeeding taxable years when the losses not allowed in the taxable year are allowed, the
84.13depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
84.14    (16) (13) 80 percent of the amount by which the deduction allowed by section 179 of
84.15the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
84.16Revenue Code of 1986, as amended through December 31, 2003;
84.17    (17) (14) to the extent deducted in computing federal taxable income, the amount of
84.18the deduction allowable under section 199 of the Internal Revenue Code;
84.19    (18) for taxable years beginning before January 1, 2013, the exclusion allowed under
84.20section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
84.21    (19) (15) the amount of expenses disallowed under section 290.10, subdivision 2; and
84.22    (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
84.23accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
84.24of a corporation that is a member of the taxpayer's unitary business group that qualifies
84.25as a foreign operating corporation. For purposes of this clause, intangible expenses and
84.26costs include:
84.27    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
84.28use, maintenance or management, ownership, sale, exchange, or any other disposition of
84.29intangible property;
84.30    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
84.31transactions;
84.32    (iii) royalty, patent, technical, and copyright fees;
84.33    (iv) licensing fees; and
84.34    (v) other similar expenses and costs.
85.1For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
85.2applications, trade names, trademarks, service marks, copyrights, mask works, trade
85.3secrets, and similar types of intangible assets.
85.4This clause does not apply to any item of interest or intangible expenses or costs paid,
85.5accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
85.6to such item of income to the extent that the income to the foreign operating corporation
85.7is income from sources without the United States as defined in subtitle A, chapter 1,
85.8subchapter N, part 1, of the Internal Revenue Code;
85.9    (21) except as already included in the taxpayer's taxable income pursuant to clause
85.10(20), any interest income and income generated from intangible property received or
85.11accrued by a foreign operating corporation that is a member of the taxpayer's unitary
85.12group. For purposes of this clause, income generated from intangible property includes:
85.13    (i) income related to the direct or indirect acquisition, use, maintenance or
85.14management, ownership, sale, exchange, or any other disposition of intangible property;
85.15    (ii) income from factoring transactions or discounting transactions;
85.16    (iii) royalty, patent, technical, and copyright fees;
85.17    (iv) licensing fees; and
85.18    (v) other similar income.
85.19For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
85.20applications, trade names, trademarks, service marks, copyrights, mask works, trade
85.21secrets, and similar types of intangible assets.
85.22This clause does not apply to any item of interest or intangible income received or accrued
85.23by a foreign operating corporation with respect to such item of income to the extent that
85.24the income is income from sources without the United States as defined in subtitle A,
85.25chapter 1, subchapter N, part 1, of the Internal Revenue Code;
85.26    (22) the dividends attributable to the income of a foreign operating corporation that
85.27is a member of the taxpayer's unitary group in an amount that is equal to the dividends
85.28paid deduction of a real estate investment trust under section 561(a) of the Internal
85.29Revenue Code for amounts paid or accrued by the real estate investment trust to the
85.30foreign operating corporation;
85.31    (23) the income of a foreign operating corporation that is a member of the taxpayer's
85.32unitary group in an amount that is equal to gains derived from the sale of real or personal
85.33property located in the United States;
86.1    (24) for taxable years beginning before January 1, 2010, the additional amount
86.2allowed as a deduction for donation of computer technology and equipment under section
86.3170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
86.4(25) (16) discharge of indebtedness income resulting from reacquisition of business
86.5indebtedness and deferred under section 108(i) of the Internal Revenue Code.
86.6EFFECTIVE DATE.This section is effective for taxable years beginning after
86.7December 31, 2012.

86.8    Sec. 14. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
86.9    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
86.10corporations, there shall be subtracted from federal taxable income after the increases
86.11provided in subdivision 19c:
86.12    (1) the amount of foreign dividend gross-up added to gross income for federal
86.13income tax purposes under section 78 of the Internal Revenue Code;
86.14    (2) the amount of salary expense not allowed for federal income tax purposes due to
86.15claiming the work opportunity credit under section 51 of the Internal Revenue Code;
86.16    (3) any dividend (not including any distribution in liquidation) paid within the
86.17taxable year by a national or state bank to the United States, or to any instrumentality of
86.18the United States exempt from federal income taxes, on the preferred stock of the bank
86.19owned by the United States or the instrumentality;
86.20    (4) amounts disallowed for intangible drilling costs due to differences between
86.21this chapter and the Internal Revenue Code in taxable years beginning before January
86.221, 1987, as follows:
86.23    (i) to the extent the disallowed costs are represented by physical property, an amount
86.24equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
86.25subdivision 7 , subject to the modifications contained in subdivision 19e; and
86.26    (ii) to the extent the disallowed costs are not represented by physical property, an
86.27amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
86.28290.09, subdivision 8 ;
86.29    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
86.30Internal Revenue Code, except that:
86.31    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
86.32capital loss carrybacks shall not be allowed;
86.33    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
86.34a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
86.35allowed;
87.1    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
87.2capital loss carryback to each of the three taxable years preceding the loss year, subject to
87.3the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
87.4    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
87.5a capital loss carryover to each of the five taxable years succeeding the loss year to the
87.6extent such loss was not used in a prior taxable year and subject to the provisions of
87.7Minnesota Statutes 1986, section 290.16, shall be allowed;
87.8    (6) an amount for interest and expenses relating to income not taxable for federal
87.9income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
87.10expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
87.11291 of the Internal Revenue Code in computing federal taxable income;
87.12    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
87.13which percentage depletion was disallowed pursuant to subdivision 19c, clause (9) (8), a
87.14reasonable allowance for depletion based on actual cost. In the case of leases the deduction
87.15must be apportioned between the lessor and lessee in accordance with rules prescribed
87.16by the commissioner. In the case of property held in trust, the allowable deduction must
87.17be apportioned between the income beneficiaries and the trustee in accordance with the
87.18pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
87.19of the trust's income allocable to each;
87.20    (8) for certified pollution control facilities placed in service in a taxable year
87.21beginning before December 31, 1986, and for which amortization deductions were elected
87.22under section 169 of the Internal Revenue Code of 1954, as amended through December
87.2331, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
87.241986, section 290.09, subdivision 7;
87.25    (9) amounts included in federal taxable income that are due to refunds of income,
87.26excise, or franchise taxes based on net income or related minimum taxes paid by the
87.27corporation to Minnesota, another state, a political subdivision of another state, the
87.28District of Columbia, or a foreign country or possession of the United States to the extent
87.29that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
87.30clause (1), in a prior taxable year;
87.31    (10) 80 50 percent of royalties, fees, or other like income accrued or received from a
87.32foreign operating corporation or a foreign corporation which is part of the same unitary
87.33business as the receiving corporation, unless the income resulting from such payments or
87.34accruals is income from sources within the United States as defined in subtitle A, chapter
87.351, subchapter N, part 1, of the Internal Revenue Code;
88.1    (11) income or gains from the business of mining as defined in section 290.05,
88.2subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
88.3    (12) the amount of disability access expenditures in the taxable year which are not
88.4allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
88.5    (13) the amount of qualified research expenses not allowed for federal income tax
88.6purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
88.7the amount exceeds the amount of the credit allowed under section 290.068;
88.8    (14) the amount of salary expenses not allowed for federal income tax purposes due to
88.9claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;
88.10    (15) for a corporation whose foreign sales corporation, as defined in section 922
88.11of the Internal Revenue Code, constituted a foreign operating corporation during any
88.12taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
88.13claiming the deduction under section 290.21, subdivision 4, for income received from
88.14the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
88.15income excluded under section 114 of the Internal Revenue Code, provided the income is
88.16not income of a foreign operating company;
88.17    (16) (15) any decrease in subpart F income, as defined in section 952(a) of the
88.18Internal Revenue Code, for the taxable year when subpart F income is calculated without
88.19regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
88.20    (17) (16) in each of the five tax years immediately following the tax year in which an
88.21addition is required under subdivision 19c, clause (15) (12), an amount equal to one-fifth
88.22of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
88.23amount of the addition made by the taxpayer under subdivision 19c, clause (15) (12). The
88.24resulting delayed depreciation cannot be less than zero;
88.25    (18) (17) in each of the five tax years immediately following the tax year in which an
88.26addition is required under subdivision 19c, clause (16) (13), an amount equal to one-fifth
88.27of the amount of the addition; and
88.28(19) (18) to the extent included in federal taxable income, discharge of indebtedness
88.29income resulting from reacquisition of business indebtedness included in federal taxable
88.30income under section 108(i) of the Internal Revenue Code. This subtraction applies only
88.31to the extent that the income was included in net income in a prior year as a result of the
88.32addition under section 290.01, subdivision 19c, clause (25). (16); and
88.33(19) in the year that the expenditures are made for railroad track maintenance, as
88.34defined in section 45G(d) of the Internal Revenue Code, an amount equal to the credit
88.35awarded under section 45G(a) of the Internal Revenue Code.
89.1EFFECTIVE DATE.This section is effective for taxable years beginning after
89.2December 31, 2012.

89.3    Sec. 15. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision
89.4to read:
89.5    Subd. 29a. State itemized deduction. The term "state itemized deduction" means
89.6federal itemized deductions, as defined in section 63(d) of the Internal Revenue Code,
89.7disregarding any limitation under section 68 of the Internal Revenue Code, and reduced
89.8by the amount of the addition required under subdivision 19a, clause (13).
89.9EFFECTIVE DATE.This section is effective for taxable years beginning after
89.10December 31, 2012.

89.11    Sec. 16. Minnesota Statutes 2012, section 290.01, subdivision 31, as amended by Laws
89.122013, chapter 3, section 4, is amended to read:
89.13    Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, for
89.14taxable years beginning before January 1, 2012, and after December 31, 2012, "Internal
89.15Revenue Code" means the Internal Revenue Code of 1986, as amended through April 14,
89.162011; and for taxable years beginning after December 31, 2011, and before January 1,
89.172013, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
89.18through January 3, 2013. Internal Revenue Code also includes any uncodified provision in
89.19federal law that relates to provisions of the Internal Revenue Code that are incorporated
89.20into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1,
89.21subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as
89.22amended through March 18, 2010.
89.23EFFECTIVE DATE.This section is effective the day following final enactment,
89.24except the changes incorporated by federal changes are effective at the same time as the
89.25changes were effective for federal purposes.

89.26    Sec. 17. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision
89.27to read:
89.28    Subd. 33. Foreign source income; income from foreign sources. The terms
89.29"foreign source income" and "income from foreign sources" means income from sources
89.30without the United States as defined in subtitle A, chapter 1, subchapter N, part 1, of the
89.31Internal Revenue Code.
90.1EFFECTIVE DATE.This section is effective for taxable years beginning after
90.2December 31, 2012.

90.3    Sec. 18. Minnesota Statutes 2012, section 290.06, subdivision 2c, is amended to read:
90.4    Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income
90.5taxes imposed by this chapter upon married individuals filing joint returns and surviving
90.6spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
90.7applying to their taxable net income the following schedule of rates:
90.8    (1) On the first $25,680 $31,650, 5.35 percent;
90.9    (2) On all over $25,680 $31,650, but not over $102,030 $130,000, 7.05 percent;
90.10    (3) On all over $102,030 $130,000, but not over $400,000, 7.85 percent.;
90.11(4) On all over $400,000, 8.49 percent.
90.12    Married individuals filing separate returns, estates, and trusts must compute their
90.13income tax by applying the above rates to their taxable income, except that the income
90.14brackets will be one-half of the above amounts.
90.15    (b) The income taxes imposed by this chapter upon unmarried individuals must be
90.16computed by applying to taxable net income the following schedule of rates:
90.17    (1) On the first $17,570 $21,650, 5.35 percent;
90.18    (2) On all over $17,570 $21,650, but not over $57,710 $73,500, 7.05 percent;
90.19    (3) On all over $57,710 $73,500, but not over $226,200, 7.85 percent.;
90.20(4) On all over $226,200, 8.49 percent.
90.21    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying
90.22as a head of household as defined in section 2(b) of the Internal Revenue Code must be
90.23computed by applying to taxable net income the following schedule of rates:
90.24    (1) On the first $21,630 $26,650, 5.35 percent;
90.25    (2) On all over $21,630 $26,650, but not over $86,910 $110,700, 7.05 percent;
90.26    (3) On all over $86,910 $110,700, but not over $340,700, 7.85 percent.;
90.27(4) On all over $340,700, 8.49 percent.
90.28    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the
90.29tax of any individual taxpayer whose taxable net income for the taxable year is less than
90.30an amount determined by the commissioner must be computed in accordance with tables
90.31prepared and issued by the commissioner of revenue based on income brackets of not
90.32more than $100. The amount of tax for each bracket shall be computed at the rates set
90.33forth in this subdivision, provided that the commissioner may disregard a fractional part of
90.34a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
91.1    (e) An individual who is not a Minnesota resident for the entire year must compute
91.2the individual's Minnesota income tax as provided in this subdivision. After the
91.3application of the nonrefundable credits provided in this chapter, the tax liability must
91.4then be multiplied by a fraction in which:
91.5    (1) the numerator is the individual's Minnesota source federal adjusted gross income
91.6as defined in section 62 of the Internal Revenue Code and increased by the additions
91.7required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12),
91.8(13), and (16) to (18) (5) to (9), (11), and (12), and reduced by the Minnesota assignable
91.9portion of the subtraction for United States government interest under section 290.01,
91.10subdivision 19b , clause (1), and the subtractions under section 290.01, subdivision 19b,
91.11clauses (8), (9), (13), (14), (16), and (17) (6), (7), (11), (12), (14), and (15), after applying
91.12the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
91.13    (2) the denominator is the individual's federal adjusted gross income as defined in
91.14section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
91.15section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16) to
91.16(18) (5) to (9), (11), and (12), and reduced by the amounts specified in section 290.01,
91.17subdivision 19b , clauses (1), (8), (9), (13), (14), (16), and (17) (6), (7), (11), (12), (14),
91.18and (15).
91.19EFFECTIVE DATE.This section is effective for taxable years beginning after
91.20December 31, 2012.

91.21    Sec. 19. Minnesota Statutes 2012, section 290.06, subdivision 2d, is amended to read:
91.22    Subd. 2d. Inflation adjustment of brackets. (a) For taxable years beginning after
91.23December 31, 2000 2013, the minimum and maximum dollar amounts for each rate
91.24bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the
91.25percentage determined under paragraph (b). For the purpose of making the adjustment as
91.26provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the
91.27rate brackets as they existed for taxable years beginning after December 31, 1999 2012,
91.28and before January 1, 2001 2014. The rate applicable to any rate bracket must not be
91.29changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes
91.30in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10
91.31amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
91.32(b) The commissioner shall adjust the rate brackets and by the percentage determined
91.33pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
91.34section 1(f)(3)(B) the word "1999" "2012" shall be substituted for the word "1992." For
91.352001 2014, the commissioner shall then determine the percent change from the 12 months
92.1ending on August 31, 1999 2012, to the 12 months ending on August 31, 2000 2013, and
92.2in each subsequent year, from the 12 months ending on August 31, 1999 2012, to the 12
92.3months ending on August 31 of the year preceding the taxable year. The determination of
92.4the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
92.5not be subject to the Administrative Procedure Act contained in chapter 14.
92.6No later than December 15 of each year, the commissioner shall announce the
92.7specific percentage that will be used to adjust the tax rate brackets.
92.8EFFECTIVE DATE.This section is effective for taxable years beginning after
92.9December 31, 2012.

92.10    Sec. 20. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
92.11to read:
92.12    Subd. 36. Charitable contributions credit. (a) A taxpayer, other than a corporation,
92.13estate, or trust, is allowed a credit against the tax imposed by this chapter equal to eight
92.14percent of the amount by which eligible charitable contributions exceed the greater of:
92.15(1) two percent of the taxpayer's adjusted gross income for the taxable year; or
92.16(2) $400 ($800 for married filing jointly).
92.17(b) For purposes of this subdivision, "eligible charitable contributions" means
92.18charitable contributions allowable as a deduction for the taxable year under section 170(a)
92.19of the Internal Revenue Code, subject to the limitations of section 170(b) of the Internal
92.20Revenue Code, and determined without regard to whether or not the taxpayer itemizes
92.21deductions.
92.22(c) For purposes of this subdivision, "adjusted gross income" has the meaning given
92.23in section 62 of the Internal Revenue Code.
92.24(d) For a nonresident or part-year resident, the credit must be allocated based on the
92.25percentage calculated under subdivision 2c, paragraph (e).
92.26EFFECTIVE DATE.This section is effective for taxable years beginning after
92.27December 31, 2012.

92.28    Sec. 21. Minnesota Statutes 2012, section 290.067, subdivision 1, is amended to read:
92.29    Subdivision 1. Amount of credit. (a) A taxpayer may take as a credit against the
92.30tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
92.31dependent care credit for which the taxpayer is eligible pursuant to the provisions of
92.32section 21 of the Internal Revenue Code subject to the limitations provided in subdivision
92.332 except that in determining whether the child qualified as a dependent, income received
93.1as a Minnesota family investment program grant or allowance to or on behalf of the child
93.2must not be taken into account in determining whether the child received more than half
93.3of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of
93.4the Internal Revenue Code do not apply.
93.5(b) If a child who has not attained the age of six years at the close of the taxable year
93.6is cared for at a licensed family day care home operated by the child's parent, the taxpayer
93.7is deemed to have paid employment-related expenses. If the child is 16 months old or
93.8younger at the close of the taxable year, the amount of expenses deemed to have been paid
93.9equals the maximum limit for one qualified individual under section 21(c) and (d) of the
93.10Internal Revenue Code. If the child is older than 16 months of age but has not attained the
93.11age of six years at the close of the taxable year, the amount of expenses deemed to have
93.12been paid equals the amount the licensee would charge for the care of a child of the same
93.13age for the same number of hours of care.
93.14(c) If a married couple:
93.15(1) has a child who has not attained the age of one year at the close of the taxable year;
93.16(2) files a joint tax return for the taxable year; and
93.17(3) does not participate in a dependent care assistance program as defined in section
93.18129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid
93.19for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of
93.20(i) the combined earned income of the couple or (ii) the amount of the maximum limit for
93.21one qualified individual under section 21(c) and (d) of the Internal Revenue Code will
93.22be deemed to be the employment related expense paid for that child. The earned income
93.23limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed
93.24amount. These deemed amounts apply regardless of whether any employment-related
93.25expenses have been paid.
93.26(d) If the taxpayer is not required and does not file a federal individual income tax
93.27return for the tax year, no credit is allowed for any amount paid to any person unless:
93.28(1) the name, address, and taxpayer identification number of the person are included
93.29on the return claiming the credit; or
93.30(2) if the person is an organization described in section 501(c)(3) of the Internal
93.31Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code,
93.32the name and address of the person are included on the return claiming the credit.
93.33In the case of a failure to provide the information required under the preceding sentence,
93.34the preceding sentence does not apply if it is shown that the taxpayer exercised due
93.35diligence in attempting to provide the information required.
94.1In the case of a nonresident, part-year resident, or a person who has earned income
94.2not subject to tax under this chapter including earned income excluded pursuant to section
94.3290.01, subdivision 19b , clause (9) (7), the credit determined under section 21 of the
94.4Internal Revenue Code must be allocated based on the ratio by which the earned income
94.5of the claimant and the claimant's spouse from Minnesota sources bears to the total earned
94.6income of the claimant and the claimant's spouse.
94.7For residents of Minnesota, the subtractions for military pay under section 290.01,
94.8subdivision 19b , clauses (10) and (11) (8) and (9), are not considered "earned income not
94.9subject to tax under this chapter."
94.10For residents of Minnesota, the exclusion of combat pay under section 112 of the
94.11Internal Revenue Code is not considered "earned income not subject to tax under this
94.12chapter."
94.13EFFECTIVE DATE.This section is effective for taxable years beginning after
94.14December 31, 2012.

94.15    Sec. 22. Minnesota Statutes 2012, section 290.067, subdivision 2a, is amended to read:
94.16    Subd. 2a. Income. (a) For purposes of this section, "income" means the sum of
94.17the following:
94.18(1) federal adjusted gross income as defined in section 62 of the Internal Revenue
94.19Code; and
94.20(2) the sum of the following amounts to the extent not included in clause (1):
94.21(i) all nontaxable income;
94.22(ii) the amount of a passive activity loss that is not disallowed as a result of section
94.23469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
94.24loss carryover allowed under section 469(b) of the Internal Revenue Code;
94.25(iii) an amount equal to the total of any discharge of qualified farm indebtedness
94.26of a solvent individual excluded from gross income under section 108(g) of the Internal
94.27Revenue Code;
94.28(iv) cash public assistance and relief;
94.29(v) any pension or annuity (including railroad retirement benefits, all payments
94.30received under the federal Social Security Act, supplemental security income, and veterans
94.31benefits), which was not exclusively funded by the claimant or spouse, or which was
94.32funded exclusively by the claimant or spouse and which funding payments were excluded
94.33from federal adjusted gross income in the years when the payments were made;
94.34(vi) interest received from the federal or a state government or any instrumentality
94.35or political subdivision thereof;
95.1(vii) workers' compensation;
95.2(viii) nontaxable strike benefits;
95.3(ix) the gross amounts of payments received in the nature of disability income or
95.4sick pay as a result of accident, sickness, or other disability, whether funded through
95.5insurance or otherwise;
95.6(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
95.71986, as amended through December 31, 1995;
95.8(xi) contributions made by the claimant to an individual retirement account,
95.9including a qualified voluntary employee contribution; simplified employee pension plan;
95.10self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
95.11of the Internal Revenue Code; or deferred compensation plan under section 457 of the
95.12Internal Revenue Code;
95.13(xii) nontaxable scholarship or fellowship grants;
95.14(xiii) the amount of deduction allowed under section 199 of the Internal Revenue
95.15Code;
95.16(xiv) the amount of deduction allowed under section 220 or 223 of the Internal
95.17Revenue Code;
95.18(xv) the amount of deducted for tuition expenses required to be added to income
95.19under section 290.01, subdivision 19a, clause (12) under section 222 of the Internal
95.20Revenue Code; and
95.21(xvi) the amount deducted for certain expenses of elementary and secondary school
95.22teachers under section 62(a)(2)(D) of the Internal Revenue Code; and.
95.23(xvii) unemployment compensation.
95.24In the case of an individual who files an income tax return on a fiscal year basis, the
95.25term "federal adjusted gross income" means federal adjusted gross income reflected in the
95.26fiscal year ending in the next calendar year. Federal adjusted gross income may not be
95.27reduced by the amount of a net operating loss carryback or carryforward or a capital loss
95.28carryback or carryforward allowed for the year.
95.29(b) "Income" does not include:
95.30(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
95.31(2) amounts of any pension or annuity that were exclusively funded by the claimant
95.32or spouse if the funding payments were not excluded from federal adjusted gross income
95.33in the years when the payments were made;
95.34(3) surplus food or other relief in kind supplied by a governmental agency;
95.35(4) relief granted under chapter 290A;
96.1(5) child support payments received under a temporary or final decree of dissolution
96.2or legal separation; and
96.3(6) restitution payments received by eligible individuals and excludable interest as
96.4defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
96.52001, Public Law 107-16.
96.6EFFECTIVE DATE.This section is effective for taxable years beginning after
96.7December 31, 2012.

96.8    Sec. 23. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
96.9    Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
96.10imposed by this chapter equal to a percentage of earned income. To receive a credit, a
96.11taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
96.12(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
96.13the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
96.14income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
96.15case is the credit less than zero.
96.16(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
96.17$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
96.18$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
96.19whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
96.20(d) For individuals with two or more qualifying children, the credit equals ten percent
96.21of the first $9,720 of earned income and 20 percent of earned income over $14,860 but less
96.22than $16,800. The credit is reduced by 10.3 percent of earned income or adjusted gross
96.23income, whichever is greater, in excess of $17,890, but in no case is the credit less than zero.
96.24(e) For a nonresident or part-year resident, the credit must be allocated based on the
96.25percentage calculated under section 290.06, subdivision 2c, paragraph (e).
96.26(f) For a person who was a resident for the entire tax year and has earned income
96.27not subject to tax under this chapter, including income excluded under section 290.01,
96.28subdivision 19b , clause (9), the credit must be allocated based on the ratio of federal
96.29adjusted gross income reduced by the earned income not subject to tax under this chapter
96.30over federal adjusted gross income. For purposes of this paragraph, the subtractions for
96.31military pay under section 290.01, subdivision 19b, clauses (10) and (11) (8) and (9), are
96.32not considered "earned income not subject to tax under this chapter."
96.33For the purposes of this paragraph, the exclusion of combat pay under section 112
96.34of the Internal Revenue Code is not considered "earned income not subject to tax under
96.35this chapter."
97.1(g) For tax years beginning after December 31, 2007, and before December 31,
97.22010, and for tax years beginning after December 31, 2017, the $5,770 in paragraph (b),
97.3the $15,080 in paragraph (c), and the $17,890 in paragraph (d), after being adjusted for
97.4inflation under subdivision 7, are each increased by $3,000 for married taxpayers filing joint
97.5returns. For tax years beginning after December 31, 2008, the commissioner shall annually
97.6adjust the $3,000 by the percentage determined pursuant to the provisions of section 1(f)
97.7of the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2007" shall be
97.8substituted for the word "1992." For 2009, the commissioner shall then determine the
97.9percent change from the 12 months ending on August 31, 2007, to the 12 months ending on
97.10August 31, 2008, and in each subsequent year, from the 12 months ending on August 31,
97.112007, to the 12 months ending on August 31 of the year preceding the taxable year. The
97.12earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
97.13amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
97.14commissioner under this subdivision is not a rule under the Administrative Procedure Act.
97.15(h) For tax years beginning after December 31, 2010, and before January 1, 2012,
97.16 and for tax years beginning after December 31, 2012, and before January 1, 2018, the
97.17$5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
97.18(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000
97.19for married taxpayers filing joint returns. For tax years beginning after December 31,
97.202010, and before January 1, 2012, and for tax years beginning after December 31, 2012,
97.21and before January 1, 2018, the commissioner shall annually adjust the $5,000 by the
97.22percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
97.23Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for the word
97.24"1992." For 2011, the commissioner shall then determine the percent change from the 12
97.25months ending on August 31, 2008, to the 12 months ending on August 31, 2010, and in
97.26each subsequent year, from the 12 months ending on August 31, 2008, to the 12 months
97.27ending on August 31 of the year preceding the taxable year. The earned income thresholds
97.28as adjusted for inflation must be rounded to the nearest $10. If the amount ends in $5, the
97.29amount is rounded up to the nearest $10. The determination of the commissioner under
97.30this subdivision is not a rule under the Administrative Procedure Act.
97.31(i) The commissioner shall construct tables showing the amount of the credit at
97.32various income levels and make them available to taxpayers. The tables shall follow
97.33the schedule contained in this subdivision, except that the commissioner may graduate
97.34the transition between income brackets.
97.35EFFECTIVE DATE.This section is effective for taxable years beginning after
97.36December 31, 2012.

98.1    Sec. 24. Minnesota Statutes 2012, section 290.0675, subdivision 1, is amended to read:
98.2    Subdivision 1. Definitions. (a) For purposes of this section the following terms
98.3have the meanings given.
98.4(b) "Earned income" means the sum of the following, to the extent included in
98.5Minnesota taxable income:
98.6(1) earned income as defined in section 32(c)(2) of the Internal Revenue Code;
98.7(2) income received from a retirement pension, profit-sharing, stock bonus, or
98.8annuity plan; and
98.9(3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue
98.10Code.
98.11(c) "Taxable income" means net income as defined in section 290.01, subdivision 19.
98.12(d) "Earned income of lesser-earning spouse" means the earned income of the
98.13spouse with the lesser amount of earned income as defined in paragraph (b) for the taxable
98.14year minus the sum of (i) the amount for one exemption under section 151(d) of the
98.15Internal Revenue Code and (ii) one-half the amount of the standard deduction under
98.16section 63(c)(2)(A) and (4) of the Internal Revenue Code minus one-half of any addition
98.17required under section 290.01, subdivision 19a, clause (21), and one-half of the addition
98.18that would have been required under section 290.01, subdivision 19a, clause (21), if the
98.19taxpayer had claimed the standard deduction.
98.20EFFECTIVE DATE.This section is effective for taxable years beginning after
98.21December 31, 2012.

98.22    Sec. 25. Minnesota Statutes 2012, section 290.0677, subdivision 2, is amended to read:
98.23    Subd. 2. Definitions. (a) For purposes of this section, the following terms have
98.24the meanings given.
98.25    (b) "Designated area" means a:
98.26    (1) combat zone designated by Executive Order from the President of the United
98.27States;
98.28    (2) qualified hazardous duty area, designated in Public Law; or
98.29    (3) location certified by the U. S. Department of Defense as eligible for combat zone
98.30tax benefits due to the location's direct support of military operations.
98.31    (c) "Active military service" means active duty service in any of the United States
98.32armed forces, the National Guard, or reserves.
98.33    (d) "Qualified individual" means an individual who has:
98.34    (1) either (i) met one of the following criteria:
98.35    (i) has served at least 20 years in the military or;
99.1    (ii) has a service-connected disability rating of 100 percent for a total and permanent
99.2disability; or
99.3    (iii) has been determined by the military to be eligible for compensation from a
99.4pension or other retirement pay from the federal government for service in the military,
99.5as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455,
99.6or 12733; and
99.7    (2) separated from military service before the end of the taxable year.
99.8    (e) "Adjusted gross income" has the meaning given in section 61 of the Internal
99.9Revenue Code.
99.10EFFECTIVE DATE.This section is effective for taxable years beginning after
99.11December 31, 2012.

99.12    Sec. 26. Minnesota Statutes 2012, section 290.068, subdivision 3, is amended to read:
99.13    Subd. 3. Limitation; carryover. (a)(1) The credit for a taxable year beginning
99.14before January 1, 2010, and after December 31, 2012, shall not exceed the liability for
99.15tax. "Liability for tax" for purposes of this section means the tax imposed under section
99.16290.06, subdivision 1 , for the taxable year reduced by the sum of the nonrefundable
99.17credits allowed under this chapter.
99.18    (2) In the case of a corporation which is a partner in a partnership, the credit allowed
99.19for the taxable year shall not exceed the lesser of the amount determined under clause (1)
99.20for the taxable year or an amount (separately computed with respect to the corporation's
99.21interest in the trade or business or entity) equal to the amount of tax attributable to that
99.22portion of taxable income which is allocable or apportionable to the corporation's interest
99.23in the trade or business or entity.
99.24    (b) If the amount of the credit determined under this section for any taxable year
99.25exceeds the limitation under clause (a), the excess shall be a research credit carryover to
99.26each of the 15 succeeding taxable years. The entire amount of the excess unused credit for
99.27the taxable year shall be carried first to the earliest of the taxable years to which the credit
99.28may be carried and then to each successive year to which the credit may be carried. The
99.29amount of the unused credit which may be added under this clause shall not exceed the
99.30taxpayer's liability for tax less the research credit for the taxable year.
99.31EFFECTIVE DATE.This section is effective for taxable years beginning after
99.32December 31, 2012.

99.33    Sec. 27. Minnesota Statutes 2012, section 290.068, subdivision 6a, is amended to read:
100.1    Subd. 6a. Credit to be refundable. If the amount of credit allowed in this section
100.2for qualified research expenses incurred in taxable years beginning after December 31,
100.32009, and before January 1, 2013, exceeds the taxpayer's tax liability under this chapter,
100.4the commissioner shall refund the excess amount. The credit allowed for qualified research
100.5expenses incurred in taxable years beginning after December 31, 2009, and before January
100.61, 2013, must be used before any research credit earned under subdivision 3.
100.7EFFECTIVE DATE.This section is effective for taxable years beginning after
100.8December 31, 2012.

100.9    Sec. 28. Minnesota Statutes 2012, section 290.0681, subdivision 1, is amended to read:
100.10    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
100.11have the meanings given.
100.12(b) "Account" means the historic credit administration account in the special
100.13revenue fund.
100.14(c) "Office" means the State Historic Preservation Office of the Minnesota Historical
100.15Society.
100.16(d) "Project" means rehabilitation of a certified historic structure, as defined in
100.17section 47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is
100.18allowed a federal credit under section 47(a)(2) of the Internal Revenue Code.
100.19(e) "Society" means the Minnesota Historical Society.
100.20(f) "Federal credit" means the credit allowed under section 47(a)(2) of the Internal
100.21Revenue Code.
100.22(g) "Placed in service" has the meaning used in section 47 of the Internal Revenue
100.23Code.
100.24(h) "Qualified rehabilitation expenditures" has the meaning given in section 47 of
100.25the Internal Revenue Code.
100.26EFFECTIVE DATE.This section is effective the day following final enactment.

100.27    Sec. 29. Minnesota Statutes 2012, section 290.0681, subdivision 3, is amended to read:
100.28    Subd. 3. Applications; allocations. (a) To qualify for a credit or grant under this
100.29section, the developer of a project must apply to the office before the rehabilitation
100.30begins. The application must contain the information and be in the form prescribed by
100.31the office. The office may collect a fee for application of up to $5,000, based on 0.5
100.32percent of estimated qualified rehabilitation expenses, not to exceed $35,000, to offset
100.33costs associated with personnel and administrative expenses related to administering the
101.1credit and preparing the economic impact report in subdivision 9. Application fees are
101.2deposited in the account. The application must indicate if the application is for a credit
101.3or a grant in lieu of the credit or a combination of the two and designate the taxpayer
101.4qualifying for the credit or the recipient of the grant.
101.5    (b) Upon approving an application for credit, the office shall issue allocation
101.6certificates that:
101.7    (1) verify eligibility for the credit or grant;
101.8    (2) state the amount of credit or grant anticipated with the project, with the credit
101.9amount equal to 100 percent and the grant amount equal to 90 percent of the federal
101.10credit anticipated in the application;
101.11    (3) state that the credit or grant allowed may increase or decrease if the federal
101.12credit the project receives at the time it is placed in service is different than the amount
101.13anticipated at the time the allocation certificate is issued; and
101.14    (4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer
101.15or grant recipient is entitled to receive the credit or grant at the time the project is placed
101.16in service, provided that date is within three calendar years following the issuance of
101.17the allocation certificate.
101.18    (c) The office, in consultation with the commissioner of revenue, shall determine
101.19if the project is eligible for a credit or a grant under this section and must notify the
101.20developer in writing of its determination. Eligibility for the credit is subject to review
101.21and audit by the commissioner of revenue.
101.22    (d) The federal credit recapture and repayment requirements under section 50 of the
101.23Internal Revenue Code do not apply to the credit allowed under this section.
101.24(e) Any decision of the office under paragraph (c) may be challenged as a contested
101.25case under chapter 14. The contested case proceeding must be initiated within 45 days of
101.26the date of written notification by the office.
101.27EFFECTIVE DATE.This section is effective the day following final enactment.

101.28    Sec. 30. Minnesota Statutes 2012, section 290.0681, subdivision 4, is amended to read:
101.29    Subd. 4. Credit certificates; grants. (a)(1) The developer of a project for which the
101.30office has issued an allocation certificate must notify the office when the project is placed
101.31in service. Upon verifying that the project has been placed in service, and was allowed a
101.32federal credit, the office must issue a credit certificate to the taxpayer designated in the
101.33application or must issue a grant to the recipient designated in the application. The credit
101.34certificate must state the amount of the credit.
101.35    (2) The credit amount equals the federal credit allowed for the project.
102.1    (3) The grant amount equals 90 percent of the federal credit allowed for the project.
102.2    (b) The recipient of a credit certificate may assign the certificate to another taxpayer,
102.3which is then allowed the credit under this section or section 297I.20, subdivision 3. An
102.4assignment is not valid unless the assignee notifies the commissioner within 30 days of the
102.5date that the assignment is made. The commissioner shall prescribe the forms necessary
102.6for notifying the commissioner of the assignment of a credit certificate and for claiming
102.7a credit by assignment.
102.8    (c) Credits passed through to partners, members, shareholders, or owners pursuant to
102.9subdivision 5 are not an assignment of a credit certificate under this subdivision.
102.10    (d) A grant agreement between the office and the recipient of a grant may allow the
102.11grant to be issued to another individual or entity.
102.12EFFECTIVE DATE.This section is effective the day following final enactment.

102.13    Sec. 31. Minnesota Statutes 2012, section 290.0681, subdivision 5, is amended to read:
102.14    Subd. 5. Partnerships; multiple owners. Credits granted to a partnership, a limited
102.15liability company taxed as a partnership, S corporation, or multiple owners of property
102.16are passed through to the partners, members, shareholders, or owners, respectively, pro
102.17rata to each partner, member, shareholder, or owner based on their share of the entity's
102.18assets or as specially allocated in their organizational documents or any other executed
102.19agreement, as of the last day of the taxable year.
102.20EFFECTIVE DATE.This section is effective the day following final enactment.

102.21    Sec. 32. [290.0693] VETERANS JOBS TAX CREDIT.
102.22    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
102.23have the meanings given.
102.24(b) "Date of hire" means the day that the qualified employee begins performing
102.25services as an employee of the qualified employer.
102.26(c) "Disabled veteran" is a veteran who has had a service-connected disability rating
102.27as adjudicated by the United States Veterans Administration, or by the retirement board of
102.28one of the several branches of the armed forces.
102.29(d)(1) "Qualified employee" means an employee as defined in section 290.92,
102.30subdivision 1, who meets the following criteria:
102.31(i) the employee is a resident of Minnesota on the date of hire;
102.32(ii) the employee is paid wages as defined in section 290.92, subdivision 1; and
103.1(iii) the employee's wages are attributable to Minnesota under section 290.191,
103.2subdivision 12;
103.3(2) Qualified employee does not include:
103.4(i) any employee who bears any of the relationships to the employer described in
103.5subparagraphs (A) to (G) of section 152(d)(2) of the Internal Revenue Code;
103.6(ii) if the employer is a corporation, an employee who owns, directly or indirectly,
103.7more than 50 percent in value of the outstanding stock of the corporation, or if the
103.8employer is an entity other than a corporation, an employee who owns, directly or
103.9indirectly, more than 50 percent of the capital and profits interests in the entity, as
103.10determined with the application of section 267(c) of the Internal Revenue Code; or
103.11(iii) if the employer is an estate or trust, any employee who is a fiduciary of the estate
103.12or trust, or is an individual who bears any of the relationships described in subparagraphs
103.13(A) to (G) of section 152(d)(2) of the Internal Revenue Code to a grantor, beneficiary,
103.14or fiduciary of the estate or trust.
103.15(e) "Qualified employer" means an employer that hired a disabled veteran, or an
103.16unemployed veteran as a qualified employee.
103.17(f) "Unemployed veteran" is a veteran who:
103.18(1) received unemployment compensation under state or federal law at any time
103.19during the two-year period prior to the date of hire; and
103.20(2) was unemployed on the date of hire.
103.21(g) "Veteran" has the meaning given in section 197.447.
103.22    Subd. 2. Credit allowed. (a) A qualified employer is allowed a credit for each of
103.23the following individuals that the qualified employer hires as a qualified employee during
103.24taxable years beginning after December 31, 2012, and before January 1, 2017:
103.25(1) a disabled veteran; or
103.26(2) an unemployed veteran.
103.27(b) Subject to the requirements of this section, there is no limit to the number of
103.28credits that a qualified employer may claim under this section during a taxable year.
103.29(c) A qualified employer may claim the credit either for the taxable year in which
103.30the qualified employee is hired, or in the next taxable year, but may claim the credit only
103.31once for each qualified employee.
103.32    Subd. 3. Credit amount for hiring certain veterans. (a) A qualified employer who
103.33is required to file a return under section 289A.08, subdivision 1, 2, or 3, is allowed a credit
103.34against the tax imposed by this chapter as determined under this subdivision.
104.1(b) For hiring a disabled veteran as a qualified employee, the credit equals ten
104.2percent of the wages paid to the qualified employee during the taxable year, but the
104.3amount of the credit shall not exceed $1,200.
104.4(c) For hiring an unemployed veteran as a qualified employee, the credit equals
104.5ten percent of the wages paid to the qualified employee during the taxable year, but the
104.6amount of the credit shall not exceed $600.
104.7(d) The credit is limited to the liability for tax under this chapter for the taxable year.
104.8(e) A qualified employer is allowed only one of the credits authorized under
104.9paragraphs (b) and (c) upon hiring a disabled veteran, or an unemployed veteran as a
104.10qualified employee.
104.11(f) A qualified employer may not claim a credit under this subdivision for hiring
104.12a disabled veteran, or an unemployed veteran as a qualified employee if the qualified
104.13employer currently employs or has previously employed the disabled veteran, or
104.14unemployed veteran.
104.15    Subd. 4. Flow-through entities. Credits granted to a partnership, limited liability
104.16company taxed as a partnership, S corporation, or multiple owners of a business are passed
104.17through to the partners, members, shareholders, or owners, respectively, pro rata to each
104.18partner, member, shareholder, or owner based on their share of the entity's assets or as
104.19specially allocated in their organizational documents, as of the last day of the taxable year.
104.20EFFECTIVE DATE.This section is effective for taxable years beginning after
104.21December 31, 2012.

104.22    Sec. 33. Minnesota Statutes 2012, section 290.091, subdivision 2, is amended to read:
104.23    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
104.24terms have the meanings given:
104.25    (a) "Alternative minimum taxable income" means the sum of the following for
104.26the taxable year:
104.27    (1) the taxpayer's federal alternative minimum taxable income as defined in section
104.2855(b)(2) of the Internal Revenue Code;
104.29    (2) the taxpayer's itemized deductions allowed in computing federal alternative
104.30minimum taxable income, but excluding:
104.31    (i) the charitable contribution deduction under section 170 of the Internal Revenue
104.32Code;
104.33    (ii) (i) the medical expense deduction;
104.34    (iii) (ii) the casualty, theft, and disaster loss deduction; and
104.35    (iv) (iii) the impairment-related work expenses of a disabled person;
105.1    (3) for depletion allowances computed under section 613A(c) of the Internal
105.2Revenue Code, with respect to each property (as defined in section 614 of the Internal
105.3Revenue Code), to the extent not included in federal alternative minimum taxable income,
105.4the excess of the deduction for depletion allowable under section 611 of the Internal
105.5Revenue Code for the taxable year over the adjusted basis of the property at the end of the
105.6taxable year (determined without regard to the depletion deduction for the taxable year);
105.7    (4) to the extent not included in federal alternative minimum taxable income, the
105.8amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
105.9Internal Revenue Code determined without regard to subparagraph (E);
105.10    (5) to the extent not included in federal alternative minimum taxable income, the
105.11amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
105.12    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
105.13to (9), (12), (13), and (16) to (18) (7) to (9), (11), and (12);
105.14    less the sum of the amounts determined under the following:
105.15    (1) interest income as defined in section 290.01, subdivision 19b, clause (1);
105.16    (2) an overpayment of state income tax as provided by section 290.01, subdivision
105.1719b , clause (2), to the extent included in federal alternative minimum taxable income;
105.18    (3) the amount of investment interest paid or accrued within the taxable year on
105.19indebtedness to the extent that the amount does not exceed net investment income, as
105.20defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
105.21amounts deducted in computing federal adjusted gross income;
105.22    (4) amounts subtracted from federal taxable income as provided by section 290.01,
105.23subdivision 19b , clauses (6), (8) to (14), and (16) (6) to (12), (14), and (18); and
105.24(5) the amount of the net operating loss allowed under section 290.095, subdivision
105.2511 , paragraph (c).
105.26    In the case of an estate or trust, alternative minimum taxable income must be
105.27computed as provided in section 59(c) of the Internal Revenue Code.
105.28    (b) "Investment interest" means investment interest as defined in section 163(d)(3)
105.29of the Internal Revenue Code.
105.30    (c) "Net minimum tax" means the minimum tax imposed by this section.
105.31    (d) "Regular tax" means the tax that would be imposed under this chapter (without
105.32regard to this section and section 290.032), reduced by the sum of the nonrefundable
105.33credits allowed under this chapter.
105.34    (e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
105.35income after subtracting the exemption amount determined under subdivision 3.
106.1EFFECTIVE DATE.This section is effective for taxable years beginning after
106.2December 31, 2012.

106.3    Sec. 34. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
106.4    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
106.5income" is Minnesota net income as defined in section 290.01, subdivision 19, and
106.6includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
106.7(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
106.8Minnesota tax return, the minimum tax must be computed on a separate company basis.
106.9If a corporation is part of a tax group filing a unitary return, the minimum tax must be
106.10computed on a unitary basis. The following adjustments must be made.
106.11(1) For purposes of the depreciation adjustments under section 56(a)(1) and
106.1256(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
106.13service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
106.14income tax purposes, including any modification made in a taxable year under section
106.15290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
106.16paragraph (c).
106.17For taxable years beginning after December 31, 2000, the amount of any remaining
106.18modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
106.19section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
106.20allowance in the first taxable year after December 31, 2000.
106.21(2) The portion of the depreciation deduction allowed for federal income tax
106.22purposes under section 168(k) of the Internal Revenue Code that is required as an addition
106.23under section 290.01, subdivision 19c, clause (15) (12), is disallowed in determining
106.24alternative minimum taxable income.
106.25(3) The subtraction for depreciation allowed under section 290.01, subdivision
106.2619d , clause (17) (16), is allowed as a depreciation deduction in determining alternative
106.27minimum taxable income.
106.28(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
106.29of the Internal Revenue Code does not apply.
106.30(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
106.31Revenue Code does not apply.
106.32(6) The special rule for dividends from section 936 companies under section
106.3356(g)(4)(C)(iii) does not apply.
106.34(7) (6) The tax preference for depletion under section 57(a)(1) of the Internal
106.35Revenue Code does not apply.
107.1(8) (7) The tax preference for intangible drilling costs under section 57(a)(2) of the
107.2Internal Revenue Code must be calculated without regard to subparagraph (E) and the
107.3subtraction under section 290.01, subdivision 19d, clause (4).
107.4(9) (8) The tax preference for tax exempt interest under section 57(a)(5) of the
107.5Internal Revenue Code does not apply.
107.6(10) (9) The tax preference for charitable contributions of appreciated property
107.7under section 57(a)(6) of the Internal Revenue Code does not apply.
107.8(11) (10) For purposes of calculating the tax preference for accelerated depreciation
107.9or amortization on certain property placed in service before January 1, 1987, under section
107.1057(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
107.11deduction allowed under section 290.01, subdivision 19e.
107.12For taxable years beginning after December 31, 2000, the amount of any remaining
107.13modification made under section 290.01, subdivision 19e, not previously deducted is a
107.14depreciation or amortization allowance in the first taxable year after December 31, 2004.
107.15(12) (11) For purposes of calculating the adjustment for adjusted current earnings
107.16in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
107.17income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
107.18minimum taxable income as defined in this subdivision, determined without regard to the
107.19adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
107.20(13) (12) For purposes of determining the amount of adjusted current earnings
107.21under section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under
107.22section 56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign
107.23dividend gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1),
107.24(ii) the amount of refunds of income, excise, or franchise taxes subtracted as provided in
107.25section 290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other
107.26like income subtracted as provided in section 290.01, subdivision 19d, clause (10).
107.27(14) (13) Alternative minimum taxable income excludes the income from operating
107.28in a job opportunity building zone as provided under section 469.317.
107.29(15) (14) Alternative minimum taxable income excludes the income from operating
107.30in a biotechnology and health sciences industry zone as provided under section 469.337.
107.31Items of tax preference must not be reduced below zero as a result of the
107.32modifications in this subdivision.
107.33EFFECTIVE DATE.This section is effective for taxable years beginning after
107.34December 31, 2012.

107.35    Sec. 35. Minnesota Statutes 2012, section 290.0922, subdivision 1, is amended to read:
108.1    Subdivision 1. Imposition. (a) In addition to the tax imposed by this chapter without
108.2regard to this section, the franchise tax imposed on a corporation required to file under
108.3section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation
108.4under section 290.9725 for the taxable year includes a tax equal to the following amounts:

108.5 108.6	If the sum of the corporation's Minnesota property, payrolls, and sales or receipts is:							the tax equals:
108.7			less than		$	500,000		$	0
108.8		$	500,000	to	$	999,999		$	100
108.9		$	1,000,000	to	$	4,999,999		$	300
108.10		$	5,000,000	to	$	9,999,999		$	1,000
108.11		$	10,000,000	to	$	19,999,999		$	2,000
108.12		$	20,000,000	or	more			$	5,000
108.13			less than		$	930,000		$	0
108.14		$	930,000	to	$	1,869,999		$	190
108.15		$	1,870,000	to	$	9,339,999		$	560
108.16		$	9,340,000	to	$	18,679,999		$	1,870
108.17		$	18,680,000	to	$	37,359,999		$	3,740
108.18		$	37,360,000	or	more			$	9,340

108.19    (b) A tax is imposed for each taxable year on a corporation required to file a return
108.20under section 289A.12, subdivision 3, that is treated as an "S" corporation under section
108.21290.9725 and on a partnership required to file a return under section 289A.12, subdivision
108.223 , other than a partnership that derives over 80 percent of its income from farming. The
108.23tax imposed under this paragraph is due on or before the due date of the return for the
108.24taxpayer due under section 289A.18, subdivision 1. The commissioner shall prescribe
108.25the return to be used for payment of this tax. The tax under this paragraph is equal to
108.26the following amounts:

108.27 108.28 108.29 108.30	If the sum of the S corporation's or partnership's Minnesota property, payrolls, and sales or receipts is:							the tax equals:
108.31			less than		$	500,000		$	0
108.32		$	500,000	to	$	999,999		$	100
108.33		$	1,000,000	to	$	4,999,999		$	300
108.34		$	5,000,000	to	$	9,999,999		$	1,000
108.35		$	10,000,000	to	$	19,999,999		$	2,000
108.36		$	20,000,000	or	more			$	5,000
108.37			less than		$	930,000		$	0
108.38		$	930,000	to	$	1,869,999		$	190
108.39		$	1,870,000	to	$	9,339,999		$	560
108.40		$	9,340,000	to	$	18,679,999		$	1,870
109.1		$	18,680,000	to	$	37,359,999		$	3,740
109.2		$	37,360,000	or	more			$	9,340

109.3    (c) The commissioner shall adjust the dollar amounts of both the tax and the property,
109.4payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage
109.5determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
109.6that in section 1(f)(3)(B) the word "2012" must be substituted for the word "1992." For
109.72014, the commissioner shall determine the percentage change from the 12 months ending
109.8on August 31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent
109.9year, from the 12 months ending on August 31, 2012, to the 12 months ending on August
109.1031 of the year preceding the taxable year. The determination of the commissioner pursuant
109.11to this subdivision is not a "rule" subject to the Administrative Procedure Act contained in
109.12chapter 14. The tax amounts as adjusted must be rounded to the nearest $10 amount and
109.13the threshold amounts must be adjusted to the nearest $10,000 amount. For tax amounts
109.14that end in $5, the amount is rounded up to the nearest $10 amount and for the threshold
109.15amounts that end in $5,000, the amount is rounded up to the nearest $10,000.
109.16EFFECTIVE DATE.This section is effective for taxable years beginning after
109.17December 31, 2012.

109.18    Sec. 36. Minnesota Statutes 2012, section 290.17, subdivision 4, is amended to read:
109.19    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
109.20within this state or partly within and partly without this state is part of a unitary business,
109.21the entire income of the unitary business is subject to apportionment pursuant to section
109.22290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
109.23business is considered to be derived from any particular source and none may be allocated
109.24to a particular place except as provided by the applicable apportionment formula. The
109.25provisions of this subdivision do not apply to business income subject to subdivision 5,
109.26income of an insurance company, or income of an investment company determined under
109.27section 290.36.
109.28(b) The term "unitary business" means business activities or operations which
109.29result in a flow of value between them. The term may be applied within a single legal
109.30entity or between multiple entities and without regard to whether each entity is a sole
109.31proprietorship, a corporation, a partnership or a trust.
109.32(c) Unity is presumed whenever there is unity of ownership, operation, and use,
109.33evidenced by centralized management or executive force, centralized purchasing,
109.34advertising, accounting, or other controlled interaction, but the absence of these
110.1centralized activities will not necessarily evidence a nonunitary business. Unity is also
110.2presumed when business activities or operations are of mutual benefit, dependent upon or
110.3contributory to one another, either individually or as a group.
110.4(d) Where a business operation conducted in Minnesota is owned by a business
110.5entity that carries on business activity outside the state different in kind from that
110.6conducted within this state, and the other business is conducted entirely outside the state, it
110.7is presumed that the two business operations are unitary in nature, interrelated, connected,
110.8and interdependent unless it can be shown to the contrary.
110.9(e) Unity of ownership is does not deemed to exist when a corporation is two or
110.10more corporations are involved unless that corporation is a member of a group of two or
110.11more business entities and more than 50 percent of the voting stock of each member of
110.12the group corporation is directly or indirectly owned by a common owner or by common
110.13owners, either corporate or noncorporate, or by one or more of the member corporations
110.14of the group. For this purpose, the term "voting stock" shall include membership interests
110.15of mutual insurance holding companies formed under section 66A.40.
110.16(f) The net income and apportionment factors under section 290.191 or 290.20 of
110.17foreign corporations and other foreign entities which are part of a unitary business shall
110.18not be included in the net income or the apportionment factors of the unitary business. A
110.19foreign corporation or other foreign entity which is not included on a combined report and
110.20which is required to file a return under this chapter shall file on a separate return basis.
110.21The net income and apportionment factors under section 290.191 or 290.20 of foreign
110.22operating corporations shall not be included in the net income or the apportionment
110.23factors of the unitary business except as provided in paragraph (g). The legislature intends
110.24that the provisions of this paragraph are not severable from the provisions of section
110.25290.01, subdivision 5, clauses (4) and (5), and if any of those provisions are found to be
110.26unconstitutional, the provisions of this paragraph are void for the respective taxable years.
110.27(g) The adjusted net income of a foreign operating corporation shall be deemed to
110.28be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
110.29proportion to each shareholder's ownership, with which such corporation is engaged in
110.30a unitary business. Such deemed dividend shall be treated as a dividend under section
110.31290.21, subdivision 4.
110.32Dividends actually paid by a foreign operating corporation to a corporate shareholder
110.33which is a member of the same unitary business as the foreign operating corporation shall
110.34be eliminated from the net income of the unitary business in preparing a combined report
110.35for the unitary business. The adjusted net income of a foreign operating corporation
110.36shall be its net income adjusted as follows:
111.1(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
111.2Rico, or a United States possession or political subdivision of any of the foregoing shall
111.3be a deduction; and
111.4(2) the subtraction from federal taxable income for payments received from foreign
111.5corporations or foreign operating corporations under section 290.01, subdivision 19d,
111.6clause (10), shall not be allowed.
111.7If a foreign operating corporation incurs a net loss, neither income nor deduction from
111.8that corporation shall be included in determining the net income of the unitary business.
111.9(h) (g) For purposes of determining the net income of a unitary business and the
111.10factors to be used in the apportionment of net income pursuant to section 290.191 or
111.11290.20 , there must be included only the income and apportionment factors of domestic
111.12corporations or other domestic entities other than foreign operating corporations that are
111.13determined to be part of the unitary business pursuant to this subdivision, notwithstanding
111.14that foreign corporations or other foreign entities might be included in the unitary business.
111.15(i) (h) Deductions for expenses, interest, or taxes otherwise allowable under
111.16this chapter that are connected with or allocable against dividends, deemed dividends
111.17described in paragraph (g), or royalties, fees, or other like income described in section
111.18290.01, subdivision 19d , clause (10), shall not be disallowed.
111.19(j) (i) Each corporation or other entity, except a sole proprietorship, that is part
111.20of a unitary business must file combined reports as the commissioner determines.
111.21On the reports, all intercompany transactions between entities included pursuant to
111.22paragraph (h) (g) must be eliminated and the entire net income of the unitary business
111.23determined in accordance with this subdivision is apportioned among the entities by
111.24using each entity's Minnesota factors for apportionment purposes in the numerators of
111.25the apportionment formula and the total factors for apportionment purposes of all entities
111.26included pursuant to paragraph (h) (g) in the denominators of the apportionment formula.
111.27 Except as otherwise provided by paragraph (f), all sales of the unitary business made
111.28within Minnesota pursuant to section 290.191 or 290.20 must be included on the separate
111.29combined report of a corporation that is a member of the unitary business and is subject to
111.30the jurisdiction of this state to impose tax under this chapter.
111.31(k) (j) If a corporation has been divested from a unitary business and is included in a
111.32combined report for a fractional part of the common accounting period of the combined
111.33report:
111.34(1) its income includable in the combined report is its income incurred for that part
111.35of the year determined by proration or separate accounting; and
112.1(2) its sales, property, and payroll included in the apportionment formula must
112.2be prorated or accounted for separately.
112.3EFFECTIVE DATE.This section is effective for taxable years beginning after
112.4December 31, 2012.

112.5    Sec. 37. Minnesota Statutes 2012, section 290.21, subdivision 4, is amended to read:
112.6    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
112.7of dividends received by a corporation during the taxable year from another corporation,
112.8in which the recipient owns 20 percent or more of the stock, by vote and value, not
112.9including stock described in section 1504(a)(4) of the Internal Revenue Code when the
112.10corporate stock with respect to which dividends are paid does not constitute the stock in
112.11trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
112.12constitute property held by the taxpayer primarily for sale to customers in the ordinary
112.13course of the taxpayer's trade or business, or when the trade or business of the taxpayer
112.14does not consist principally of the holding of the stocks and the collection of the income
112.15and gains therefrom; and
112.16    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
112.17an affiliated company transferred in an overall plan of reorganization and the dividend
112.18is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
112.19amended through December 31, 1989;
112.20    (ii) the remaining 20 percent of dividends if the dividends are received from a
112.21corporation which is subject to tax under section 290.36 and which is a member of an
112.22affiliated group of corporations as defined by the Internal Revenue Code and the dividend
112.23is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
112.24amended through December 31, 1989, or is deducted under an election under section
112.25243(b) of the Internal Revenue Code; or
112.26    (iii) the remaining 20 percent of the dividends if the dividends are received from a
112.27property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
112.28member of an affiliated group of corporations as defined by the Internal Revenue Code
112.29and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
112.301.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
112.31under an election under section 243(b) of the Internal Revenue Code.
112.32    (b) Seventy percent of dividends received by a corporation during the taxable year
112.33from another corporation in which the recipient owns less than 20 percent of the stock,
112.34by vote or value, not including stock described in section 1504(a)(4) of the Internal
112.35Revenue Code when the corporate stock with respect to which dividends are paid does not
113.1constitute the stock in trade of the taxpayer, or does not constitute property held by the
113.2taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
113.3business, or when the trade or business of the taxpayer does not consist principally of the
113.4holding of the stocks and the collection of income and gain therefrom.
113.5    (c) The dividend deduction provided in this subdivision shall be allowed only with
113.6respect to dividends that are included in a corporation's Minnesota taxable net income
113.7for the taxable year.
113.8    The dividend deduction provided in this subdivision does not apply to a dividend
113.9from a corporation which, for the taxable year of the corporation in which the distribution
113.10is made or for the next preceding taxable year of the corporation, is a corporation exempt
113.11from tax under section 501 of the Internal Revenue Code.
113.12The dividend deduction provided in this subdivision does not apply to a dividend
113.13received from a real estate investment trust, as defined in section 856 of the Internal
113.14Revenue Code.
113.15    The dividend deduction provided in this subdivision applies to the amount of
113.16regulated investment company dividends only to the extent determined under section
113.17854(b) of the Internal Revenue Code.
113.18    The dividend deduction provided in this subdivision shall not be allowed with
113.19respect to any dividend for which a deduction is not allowed under the provisions of
113.20section 246(c) of the Internal Revenue Code.
113.21    (d) If dividends received by a corporation that does not have nexus with Minnesota
113.22under the provisions of Public Law 86-272 are included as income on the return of
113.23an affiliated corporation permitted or required to file a combined report under section
113.24290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the
113.25determination as to whether the trade or business of the corporation consists principally
113.26of the holding of stocks and the collection of income and gains therefrom shall be made
113.27with reference to the trade or business of the affiliated corporation having a nexus with
113.28Minnesota.
113.29    (e) The deduction provided by this subdivision does not apply if the dividends are
113.30paid by a FSC as defined in section 922 of the Internal Revenue Code.
113.31    (f) If one or more of the members of the unitary group whose income is included on
113.32the combined report received a dividend, the deduction under this subdivision for each
113.33member of the unitary business required to file a return under this chapter is the product
113.34of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
113.35allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
113.36income apportionable to this state for the taxable year under section 290.191 or 290.20.
114.1EFFECTIVE DATE.This section is effective for taxable years beginning after
114.2December 31, 2012.

114.3    Sec. 38. Minnesota Statutes 2012, section 290A.03, subdivision 15, as amended by
114.4Laws 2013, chapter 3, section 5, is amended to read:
114.5    Subd. 15. Internal Revenue Code. For taxable years beginning before January 1,
114.62012, and after December 31, 2012, "Internal Revenue Code" means the Internal Revenue
114.7Code of 1986, as amended through April 14, 2011; and for taxable years beginning after
114.8December 31, 2011, and before January 1, 2013, "Internal Revenue Code" means the
114.9Internal Revenue Code of 1986, as amended through January 3, 2013.
114.10EFFECTIVE DATE.This section is effective for property tax refunds based on
114.11property taxes payable after December 31, 2013, and rent paid after December 31, 2012.

114.12    Sec. 39. Minnesota Statutes 2012, section 298.01, subdivision 3b, is amended to read:
114.13    Subd. 3b. Deductions. (a) For purposes of determining taxable income under
114.14subdivision 3, the deductions from gross income include only those expenses necessary
114.15to convert raw ores to marketable quality. Such expenses include costs associated with
114.16refinement but do not include expenses such as transportation, stockpiling, marketing, or
114.17marine insurance that are incurred after marketable ores are produced, unless the expenses
114.18are included in gross income. The allowable deductions from a mine or plant that mines
114.19and produces more than one mineral, metal, or energy resource must be determined
114.20separately for the purposes of computing the deduction in section 290.01, subdivision 19c,
114.21clause (9) (8). These deductions may be combined on one occupation tax return to arrive
114.22at the deduction from gross income for all production.
114.23(b) The provisions of section 290.01, subdivisions 19c, clauses (6) and (9), and 19d,
114.24clauses (7) and (11), are not used to determine taxable income.

114.25    Sec. 40. ESTIMATED TAXES; EXCEPTIONS.
114.26No addition to tax, penalties, or interest may be made under Minnesota Statutes,
114.27section 289A.25, for any period before September 15, 2013, with respect to an
114.28underpayment of estimated tax, to the extent that the underpayment was created or
114.29increased by the increase in income tax rates under this article.
114.30EFFECTIVE DATE.This section is effective for taxable years beginning after
114.31December 31, 2012.

115.1    Sec. 41. REPEALER.
115.2Minnesota Statutes 2012, sections 290.01, subdivision 6b; 290.06, subdivision 22a;
115.3290.0672; and 290.0921, subdivision 7, are repealed.
115.4EFFECTIVE DATE.This section is effective for taxable years beginning after
115.5December 31, 2012.


115.8    Section 1. Minnesota Statutes 2012, section 289A.10, subdivision 1, is amended to read:
115.9    Subdivision 1. Return required. In the case of a decedent who has an interest in
115.10property with a situs in Minnesota, the personal representative must submit a Minnesota
115.11estate tax return to the commissioner, on a form prescribed by the commissioner, if:
115.12(1) a federal estate tax return is required to be filed; or
115.13(2) the sum of the federal gross estate and federal adjusted taxable gifts made within
115.14three years of the date of the decedent's death exceeds $1,000,000.
115.15The return must contain a computation of the Minnesota estate tax due. The return
115.16must be signed by the personal representative.
115.17EFFECTIVE DATE.This section is effective for estates of decedents dying after
115.18December 31, 2012.

115.19    Sec. 2. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
115.20    Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
115.21terms used in this chapter shall have the following meanings:
115.22    (1) "Commissioner" means the commissioner of revenue or any person to whom the
115.23commissioner has delegated functions under this chapter.
115.24    (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
115.25and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
115.26    (3) "Internal Revenue Code" means the United States Internal Revenue Code of
115.271986, as amended through April 14, 2011 January 3, 2013, but without regard to the
115.28provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law
115.29111-312, and section 301(c) of Public Law 111-312 section 2011, paragraph (f), of the
115.30Internal Revenue Code.
115.31    (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
115.32defined by section 2011(b)(3) of the Internal Revenue Code, plus
116.1(i) the amount of deduction for state death taxes allowed under section 2058 of the
116.2Internal Revenue Code;
116.3(ii) the amount of taxable gifts, as defined in section 292.16, and made by the
116.4decedent within three years of the decedent's date of death; less
116.5(ii) (iii)(A) the value of qualified small business property under section 291.03,
116.6subdivision 9 , and the value of qualified farm property under section 291.03, subdivision
116.710 , or (B) $4,000,000, whichever is less.
116.8    (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
116.9excluding therefrom any property included therein which has its situs outside Minnesota,
116.10and (b) including therein any property omitted from the federal gross estate which is
116.11includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
116.12authorities.
116.13    (6) "Nonresident decedent" means an individual whose domicile at the time of
116.14death was not in Minnesota.
116.15    (7) "Personal representative" means the executor, administrator or other person
116.16appointed by the court to administer and dispose of the property of the decedent. If there
116.17is no executor, administrator or other person appointed, qualified, and acting within this
116.18state, then any person in actual or constructive possession of any property having a situs in
116.19this state which is included in the federal gross estate of the decedent shall be deemed
116.20to be a personal representative to the extent of the property and the Minnesota estate tax
116.21due with respect to the property.
116.22    (8) "Resident decedent" means an individual whose domicile at the time of death
116.23was in Minnesota.
116.24    (9) "Situs of property" means, with respect to:
116.25    (i) real property, the state or country in which it is located; with respect to
116.26    (ii) tangible personal property, the state or country in which it was normally kept or
116.27located at the time of the decedent's death or for a gift of tangible personal property within
116.28three years of death, the state or country in which it was normally kept or located when
116.29the gift was executed; and with respect to
116.30    (iii) intangible personal property, the state or country in which the decedent was
116.31domiciled at death or for a gift of intangible personal property within three years of death,
116.32the state or country in which the decedent was domiciled when the gift was executed.
116.33    For a nonresident decedent with an ownership interest in a pass-through entity
116.34with assets that include real or tangible personal property, situs of the real or tangible
116.35personal property is determined as if the pass-through entity does not exist and the real
116.36or tangible personal property is personally owned by the decedent. If the pass-through
117.1entity is owned by a person or persons in addition to the decedent, ownership of the
117.2property is attributed to the decedent in proportion to the decedent's capital ownership
117.3share of the pass-through entity.
117.4(10) "Pass-through entity" includes the following:
117.5(i) an entity electing S corporation status under section 1362 of the Internal Revenue
117.6Code;
117.7(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
117.8(iii) a single-member limited liability company or similar entity, regardless of
117.9whether it is taxed as an association or is disregarded for federal income tax purposes
117.10under Code of Federal Regulations, title 26, section 301.7701-3; or
117.11(iv) a trust to the extent the property is includible in the decedent's federal gross estate.
117.12EFFECTIVE DATE.This section is effective for decedents dying after December
117.1331, 2012.

117.14    Sec. 3. Minnesota Statutes 2012, section 291.03, subdivision 1, is amended to read:
117.15    Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
117.16proportion of the maximum credit for state death taxes computed under section 2011 of
117.17the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal
117.18adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal
117.19gross estate. The tax is reduced by:
117.20    (1) the gift tax paid by the decedent under section 292.17 on gifts included in the
117.21Minnesota adjusted gross estate and not subtracted as qualified farm or small business
117.22property; and
117.23    (2) any credit allowed under subdivision 1c.
117.24    (b) The tax determined under this subdivision must not be greater than the sum of
117.25the following amounts multiplied by a fraction, the numerator of which is the Minnesota
117.26gross estate and the denominator of which is the federal gross estate:
117.27    (1) the rates and brackets under section 2001(c) of the Internal Revenue Code
117.28multiplied by the sum of:
117.29    (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
117.30    (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
117.31Code; less
117.32(iii) the lesser of (A) the sum of the value of qualified small business property
117.33under subdivision 9, and the value of qualified farm property under subdivision 10, or
117.34(B) $4,000,000; less
118.1    (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
118.2Code; and less
118.3    (3) the federal credit allowed under section 2010 of the Internal Revenue Code.
118.4    (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
118.5Revenue Code of 1986, as amended through December 31, 2000.
118.6EFFECTIVE DATE.This section is effective for decedents dying after December
118.731, 2012.

118.8    Sec. 4. Minnesota Statutes 2012, section 291.03, is amended by adding a subdivision
118.9to read:
118.10    Subd. 1c. Nonresident decedent tax credit. (a) The estate of a nonresident
118.11decedent that is subject to tax under this chapter on the value of Minnesota situs property
118.12held in a pass-through entity is allowed a credit against the tax due under this section
118.13equal to the lesser of:
118.14(1) the amount of estate or inheritance tax paid to another state that is attributable to
118.15the Minnesota situs property held in the pass-through entity; or
118.16(2) the amount of tax paid under this section attributable to the Minnesota situs
118.17property held in the pass-through entity.
118.18(b) The amount of tax attributable to the Minnesota situs property held in the
118.19pass-through entity must be determined by the increase in the estate or inheritance tax that
118.20results from including the market value of the property in the estate or treating the value
118.21as a taxable inheritance to the recipient of the property.
118.22EFFECTIVE DATE.This section is effective for decedents dying after December
118.2331, 2012.

118.24    Sec. 5. Minnesota Statutes 2012, section 291.03, subdivision 8, is amended to read:
118.25    Subd. 8. Definitions. (a) For purposes of this section, the following terms have the
118.26meanings given in this subdivision.
118.27(b) "Family member" means a family member as defined in section 2032A(e)(2) of
118.28the Internal Revenue Code, or a trust whose present beneficiaries are all family members
118.29as defined in section 2032A(e)(2) of the Internal Revenue Code.
118.30(c) "Qualified heir" means a family member who acquired qualified property from
118.31 upon the death of the decedent and satisfies the requirement under subdivision 9, clause
118.32(6) (7), or subdivision 10, clause (4) (5), for the property.
119.1(d) "Qualified property" means qualified small business property under subdivision
119.29 and qualified farm property under subdivision 10.
119.3EFFECTIVE DATE.This section is effective retroactively for estates of decedents
119.4dying after June 30, 2011.

119.5    Sec. 6. Minnesota Statutes 2012, section 291.03, subdivision 9, is amended to read:
119.6    Subd. 9. Qualified small business property. Property satisfying all of the following
119.7requirements is qualified small business property:
119.8(1) The value of the property was included in the federal adjusted taxable estate.
119.9(2) The property consists of the assets of a trade or business or shares of stock or
119.10other ownership interests in a corporation or other entity engaged in a trade or business.
119.11The decedent or the decedent's spouse must have materially participated in the trade or
119.12business within the meaning of section 469 of the Internal Revenue Code during the
119.13taxable year that ended before the date of the decedent's death. Shares of stock in a
119.14corporation or an ownership interest in another type of entity do not qualify under this
119.15subdivision if the shares or ownership interests are traded on a public stock exchange at
119.16any time during the three-year period ending on the decedent's date of death. For purposes
119.17of this subdivision, an ownership interest includes the interest the decedent is deemed to
119.18own under sections 2036, 2037, and 2038 of the Internal Revenue Code.
119.19(3) During the taxable year that ended before the decedent's death, the trade or
119.20business must not have been a passive activity within the meaning of section 469(c) of the
119.21Internal Revenue Code, and the decedent or the decedent's spouse must have materially
119.22participated in the trade or business within the meaning of section 469(h) of the Internal
119.23Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other
119.24provision provided by United States Treasury Department regulation that substitutes
119.25material participation in prior taxable years for material participation in the taxable year
119.26that ended before the decedent's death.
119.27(4) The gross annual sales of the trade or business were $10,000,000 or less for the
119.28last taxable year that ended before the date of the death of the decedent.
119.29(4) (5) The property does not consist of cash or, cash equivalents, publicly traded
119.30securities, or assets not used in the operation of the trade or business. For property
119.31consisting of shares of stock or other ownership interests in an entity, the amount value of
119.32cash or, cash equivalents, publicly traded securities, or assets not used in the operation of
119.33the trade or business held by the corporation or other entity must be deducted from the
119.34value of the property qualifying under this subdivision in proportion to the decedent's
119.35share of ownership of the entity on the date of death.
120.1(5) (6) The decedent continuously owned the property, including property the
120.2decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue
120.3Code, for the three-year period ending on the date of death of the decedent. In the case of
120.4a sole proprietor, if the property replaced similar property within the three-year period,
120.5the replacement property will be treated as having been owned for the three-year period
120.6ending on the date of death of the decedent.
120.7(6) A family member continuously uses the property in the operation of the trade or
120.8business for three years following the date of death of the decedent.
120.9(7) For three years following the date of death of the decedent, the trade or business
120.10is not a passive activity within the meaning of section 469(c) of the Internal Revenue Code,
120.11and a family member materially participates in the operation of the trade or business within
120.12the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3)
120.13of the Internal Revenue Code and any other provision provided by United States Treasury
120.14Department regulation that substitutes material participation in prior taxable years for
120.15material participation in the three years following the date of death of the decedent.
120.16(8) The estate and the qualified heir elect to treat the property as qualified small
120.17business property and agree, in the form prescribed by the commissioner, to pay the
120.18recapture tax under subdivision 11, if applicable.
120.19EFFECTIVE DATE.This section is effective retroactively for estates of decedents
120.20dying after June 30, 2011.

120.21    Sec. 7. Minnesota Statutes 2012, section 291.03, subdivision 10, is amended to read:
120.22    Subd. 10. Qualified farm property. Property satisfying all of the following
120.23requirements is qualified farm property:
120.24(1) The value of the property was included in the federal adjusted taxable estate.
120.25(2) The property consists of a farm meeting the requirements of agricultural land as
120.26defined in section 500.24, subdivision 2, paragraph (g), and is owned by a person or entity
120.27that is not excluded from owning agricultural land by section 500.24, and was classified
120.28for property tax purposes as the homestead of the decedent or the decedent's spouse or
120.29both under section 273.124, and as class 2a property under section 273.13, subdivision 23.
120.30(3) For property taxes payable in the taxable year of decedent's death, the property is
120.31classified as class 2a property under section 273.13, subdivision 23, and is classified as
120.32agricultural homestead, agricultural relative homestead, or special agricultural homestead
120.33under section 273.124.
120.34(4) The decedent continuously owned the property, including property the decedent
120.35is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for
121.1the three-year period ending on the date of death of the decedent either by ownership of
121.2the agricultural land or pursuant to holding an interest in an entity that is not excluded
121.3from owning agricultural land under section 500.24.
121.4(4) A family member continuously uses the property in the operation of the trade or
121.5business (5) The property is classified for property tax purposes as class 2a property under
121.6section 273.13, subdivision 23, for three years following the date of death of the decedent.
121.7(5) (6) The estate and the qualified heir elect to treat the property as qualified farm
121.8property and agree, in a form prescribed by the commissioner, to pay the recapture tax
121.9under subdivision 11, if applicable.
121.10EFFECTIVE DATE.This section is effective retroactively for estates of decedents
121.11dying after June 30, 2011.

121.12    Sec. 8. Minnesota Statutes 2012, section 291.03, subdivision 11, is amended to read:
121.13    Subd. 11. Recapture tax. (a) If, within three years after the decedent's death and
121.14before the death of the qualified heir, the qualified heir disposes of any interest in the
121.15qualified property, other than by a disposition to a family member, or a family member
121.16ceases to use the qualified property which was acquired or passed from the decedent
121.17 satisfy the requirement under subdivision 9, clause (7); or 10, clause (5), an additional
121.18estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir
121.19replaces qualified small business property excluded under subdivision 9 with similar
121.20property, then the qualified heir will not be treated as having disposed of an interest in the
121.21qualified property.
121.22(b) The amount of the additional tax equals the amount of the exclusion claimed by
121.23the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
121.24(c) The additional tax under this subdivision is due on the day which is six months
121.25after the date of the disposition or cessation in paragraph (a).
121.26EFFECTIVE DATE.This section is effective retroactively for estates of decedents
121.27dying after June 30, 2011.

121.28    Sec. 9. [292.16] DEFINITIONS.
121.29(a) For purposes of this chapter, the following definitions apply.
121.30(b) The definitions of terms defined in section 291.005 apply.
121.31(c) "Resident" has the meaning given in section 290.01.
121.32(d) "Taxable gifts" means:
122.1(1) the transfers by gift which are included in taxable gifts for federal gift tax
122.2purposes under the following sections of the Internal Revenue Code:
122.3(i) section 2503;
122.4(ii) sections 2511 to 2514; and
122.5(iii) sections 2516 to 2519; less
122.6(2) the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.
122.7EFFECTIVE DATE.This section is effective for taxable gifts made after June
122.830, 2013.

122.9    Sec. 10. [292.17] GIFT TAX.
122.10    Subdivision 1. Imposition. (a) A tax is imposed on the transfer of property by gift
122.11by any individual resident or nonresident in an amount equal to ten percent of the amount
122.12of the taxable gift.
122.13(b) The donor is liable for payment of the tax. If the gift tax is not paid when due,
122.14the donee of any gift is personally liable for the tax to the extent of the value of the gift.
122.15    Subd. 2. Lifetime credit. A credit is allowed against the tax imposed under this
122.16section equal to $100,000. This credit applies to the cumulative amount of taxable gifts
122.17made by the donor during the donor's lifetime.
122.18    Subd. 3. Out-of-state gifts. Taxable gifts exclude the transfer of:
122.19(1) real property located outside of this state;
122.20(2) tangible personal property that was normally kept at a location outside of the
122.21state on the date the gift was executed; and
122.22(3) intangible personal property made by an individual who is not a resident.
122.23EFFECTIVE DATE.This section is effective for taxable gifts made after June
122.2430, 2013.

122.25    Sec. 11. [292.18] RETURNS.
122.26(a) Any individual who makes a taxable gift during the taxable year shall file a gift
122.27tax return in the form and manner prescribed by the commissioner.
122.28(b) If the donor dies before filing the return, the executor of the donor's will or
122.29the administrator of the donor's estate shall file the return. If the donor becomes legally
122.30incompetent before filing the return, the guardian or conservator shall file the return.
122.31(c) The return must include:
122.32(1) each gift made during the calendar year which is to be included in computing the
122.33taxable gifts;
123.1(2) the deductions claimed and allowable under section 292.16, paragraph (d),
123.2clause (2);
123.3(3) a description of the gift, and the donee's name, address, and Social Security
123.4number;
123.5(4) the fair market value of gifts not made in money; and
123.6(5) any other information the commissioner requires to administer the gift tax.
123.7EFFECTIVE DATE.This section is effective for taxable gifts made after June
123.830, 2013.

123.9    Sec. 12. [292.19] FILING REQUIREMENTS.
123.10Gift tax returns must be filed by the April 15 following the close of the calendar
123.11year, except if a gift is made during the calendar year in which the donor dies, the return
123.12for the donor must be filed by the last date, including extensions, for filing the gift tax
123.13return for federal gift tax purposes for the donor.
123.14EFFECTIVE DATE.This section is effective for taxable gifts made after June
123.1530, 2013.

123.16    Sec. 13. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
123.17The commissioner may require the donor or the donee to show the property subject to
123.18the tax under section 292.17 to the commissioner upon demand and may employ a suitable
123.19person to appraise the property. The donor shall submit a declaration, in a form prescribed
123.20by the commissioner and including any certification required by the commissioner, that the
123.21property shown by the donor on the gift tax return includes all of the property transferred by
123.22gift for the calendar year and not deductible under section 292.16, paragraph (d), clause (2).
123.23EFFECTIVE DATE.This section is effective for taxable gifts made after June
123.2430, 2013.

123.25    Sec. 14. [292.21] ADMINISTRATIVE PROVISIONS.
123.26    Subdivision 1. Payment of tax; penalty for late payment. The tax imposed under
123.27section 292.17 is due and payable to the commissioner by the April 15 following the close
123.28of the calendar year during which the gift was made. The return required under section
123.29292.19 must be included with the payment. If a taxable gift is made during the calendar
123.30year in which the donor dies, the due date is the last date, including extensions, for filing
123.31the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the
123.32tax due within the time specified under this section, a penalty applies equal to ten percent
124.1of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty
124.2bear interest at the rate under section 270C.40 from the due date of the return.
124.3    Subd. 2. Extensions. The commissioner may, for good cause, extend the time for
124.4filing a gift tax return, if a written request is filed with a tentative return accompanied by a
124.5payment of the tax, which is estimated in the tentative return, on or before the last day for
124.6filing the return. Any person to whom an extension is granted must pay, in addition to the
124.7tax, interest at the rate under section 270C.40 from the date on which the tax would have
124.8been due without the extension.
124.9    Subd. 3. Changes in federal gift tax. If the amount of a taxpayer's taxable gifts
124.10for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any
124.11calendar year, is changed or corrected by the Internal Revenue Service or other officer
124.12of the United States or other competent authority, the taxpayer shall report the change or
124.13correction in federal taxable gifts within 180 days after the final determination of the change
124.14or correction, and concede the accuracy of the determination or provide a letter detailing
124.15how the federal determination is incorrect or does not change the Minnesota gift tax. Any
124.16taxpayer filing an amended federal gift tax return shall also file within 180 days an amended
124.17return under this chapter and shall include any information the commissioner requires. The
124.18time for filing the report or amended return may be extended by the commissioner upon due
124.19cause shown. Notwithstanding any limitation of time in this chapter, if, upon examination,
124.20the commissioner finds that the taxpayer is liable for the payment of an additional tax, the
124.21commissioner shall, within a reasonable time from the receipt of the report or amended
124.22return, notify the taxpayer of the amount of additional tax, together with interest computed
124.23at the rate under section 270C.40 from the date when the original tax was due and payable.
124.24Within 30 days of the mailing of the notice, the taxpayer shall pay the commissioner the
124.25amount of the additional tax and interest. If, upon examination of the report or amended
124.26return and related information, the commissioner finds that the taxpayer has overpaid the
124.27tax due the state, the commissioner shall refund the overpayment to the taxpayer.
124.28    Subd. 4. Application of federal rules. In administering the tax under this chapter,
124.29the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal
124.30Revenue Code. The words "secretary or his delegate," as used in those sections of the
124.31Internal Revenue Code, mean the commissioner.
124.32EFFECTIVE DATE.This section is effective for taxable gifts made after June
124.3330, 2013.

124.34    Sec. 15. [292.22] CREDIT AGAINST ESTATE TAX.
125.1A credit is allowed against the estate tax imposed under chapter 291 in the amount
125.2of any tax imposed and paid under this chapter for a gift includable in the Minnesota
125.3adjusted taxable estate of the donor under section 291.005.
125.4EFFECTIVE DATE.This section is effective for taxable gifts made after June
125.530, 2013.


125.8    Section 1. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:
125.9    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
125.10to, each of the transactions listed in this subdivision.
125.11    (b) Sale and purchase include:
125.12    (1) any transfer of title or possession, or both, of tangible personal property, whether
125.13absolutely or conditionally, for a consideration in money or by exchange or barter; and
125.14    (2) the leasing of or the granting of a license to use or consume, for a consideration
125.15in money or by exchange or barter, tangible personal property, other than a manufactured
125.16home used for residential purposes for a continuous period of 30 days or more.
125.17    (c) Sale and purchase include the production, fabrication, printing, or processing of
125.18tangible personal property for a consideration for consumers who furnish either directly or
125.19indirectly the materials used in the production, fabrication, printing, or processing.
125.20    (d) Sale and purchase include the preparing for a consideration of food.
125.21Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
125.22to, the following:
125.23    (1) prepared food sold by the retailer;
125.24    (2) soft drinks;
125.25    (3) candy;
125.26    (4) dietary supplements; and
125.27    (5) all food sold through vending machines.
125.28    (e) A sale and a purchase includes the furnishing for a consideration of electricity,
125.29gas, water, or steam for use or consumption within this state.
125.30    (f) A sale and a purchase includes the transfer for a consideration of prewritten
125.31computer software whether delivered electronically, by load and leave, or otherwise.
125.32    (g) A sale and a purchase includes the furnishing for a consideration of the following
125.33services:
126.1    (1) the privilege of admission to places of amusement, recreational areas, or athletic
126.2events, including seat licenses, the rental of box seats, suites, sky boxes, and similar
126.3facilities in stadiums and arenas and the making available of amusement devices, tanning
126.4facilities, reducing salons, steam baths, Turkish baths, health clubs, and spas or athletic
126.5facilities;
126.6    (2) lodging and related services by a hotel, rooming house, resort, campground,
126.7motel, or trailer camp, including furnishing the guest of the facility with access to
126.8telecommunication services, and the granting of any similar license to use real property in
126.9a specific facility, other than the renting or leasing of it for a continuous period of 30 days
126.10or more under an enforceable written agreement that may not be terminated without prior
126.11notice and including accommodations intermediary services provided in connection with
126.12other services provided under this clause;
126.13    (3) nonresidential parking services, whether on a contractual, hourly, or other
126.14periodic basis, except for parking at a meter;
126.15    (4) the granting of membership in a club, association, or other organization if:
126.16    (i) the club, association, or other organization makes available for the use of its
126.17members sports and athletic facilities, without regard to whether a separate charge is
126.18assessed for use of the facilities; and
126.19    (ii) use of the sports and athletic facility is not made available to the general public
126.20on the same basis as it is made available to members.
126.21Granting of membership means both onetime initiation fees and periodic membership
126.22dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
126.23squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
126.24swimming pools; and other similar athletic or sports facilities;
126.25    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
126.26material used in road construction; and delivery of concrete block by a third party if the
126.27delivery would be subject to the sales tax if provided by the seller of the concrete block; and
126.28    (6) services as provided in this clause:
126.29    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
126.30and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
126.31drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
126.32include services provided by coin operated facilities operated by the customer;
126.33    (ii) motor vehicle washing, waxing, and cleaning services, including services
126.34provided by coin operated facilities operated by the customer, and rustproofing,
126.35undercoating, and towing of motor vehicles;
127.1    (iii) building and residential cleaning, maintenance, and disinfecting services and
127.2pest control and exterminating services;
127.3    (iv) detective, security, burglar, fire alarm, and armored car services; but not including
127.4services performed within the jurisdiction they serve by off-duty licensed peace officers as
127.5defined in section 626.84, subdivision 1, or services provided by a nonprofit organization
127.6for monitoring and electronic surveillance of persons placed on in-home detention
127.7pursuant to court order or under the direction of the Minnesota Department of Corrections;
127.8    (v) pet grooming services;
127.9    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
127.10and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
127.11plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
127.12clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
127.13public utility lines. Services performed under a construction contract for the installation of
127.14shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
127.15    (vii) massages, except when provided by a licensed health care facility or
127.16professional or upon written referral from a licensed health care facility or professional for
127.17treatment of illness, injury, or disease; and
127.18    (viii) the furnishing of lodging, board, and care services for animals in kennels and
127.19other similar arrangements, but excluding veterinary and horse boarding services.
127.20    In applying the provisions of this chapter, the terms "tangible personal property"
127.21and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
127.22and the provision of these taxable services, unless specifically provided otherwise.
127.23Services performed by an employee for an employer are not taxable. Services performed
127.24by a partnership or association for another partnership or association are not taxable if
127.25one of the entities owns or controls more than 80 percent of the voting power of the
127.26equity interest in the other entity. Services performed between members of an affiliated
127.27group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
127.28group of corporations" means those entities that would be classified as members of an
127.29affiliated group as defined under United States Code, title 26, section 1504, disregarding
127.30the exclusions in section 1504(b).
127.31    For purposes of clause (5), "road construction" means construction of (1) public
127.32roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
127.33metropolitan area up to the point of the emergency response location sign.
127.34    (h) A sale and a purchase includes the furnishing for a consideration of tangible
127.35personal property or taxable services by the United States or any of its agencies or
128.1instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
128.2subdivisions.
128.3    (i) A sale and a purchase includes the furnishing for a consideration of
128.4telecommunications services, ancillary services associated with telecommunication
128.5services, cable television services, and direct satellite services. Telecommunication
128.6services include, but are not limited to, the following services, as defined in section
128.7297A.669 : air-to-ground radiotelephone service, mobile telecommunication service,
128.8postpaid calling service, prepaid calling service, prepaid wireless calling service, and
128.9private communication services. The services in this paragraph are taxed to the extent
128.10allowed under federal law.
128.11    (j) A sale and a purchase includes the furnishing for a consideration of installation if
128.12the installation charges would be subject to the sales tax if the installation were provided
128.13by the seller of the item being installed.
128.14    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
128.15to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
128.16the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
128.1759B.02, subdivision 11.
128.18EFFECTIVE DATE.This section is effective for sales made after June 30, 2013.

128.19    Sec. 2. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
128.20    Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
128.21purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
128.22course of business as defined in subdivision 21.
128.23    (b) A sale of property used by the owner only by leasing it to others or by holding it
128.24in an effort to lease it, and put to no use by the owner other than resale after the lease or
128.25effort to lease, is a sale of property for resale.
128.26    (c) A sale of master computer software that is purchased and used to make copies for
128.27sale or lease is a sale of property for resale.
128.28    (d) A sale of building materials, supplies, and equipment to owners, contractors,
128.29subcontractors, or builders for the erection of buildings or the alteration, repair, or
128.30improvement of real property is a retail sale in whatever quantity sold, whether the sale is
128.31for purposes of resale in the form of real property or otherwise.
128.32    (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
128.33for installation of the floor covering is a retail sale and not a sale for resale since a sale of
128.34floor covering which includes installation is a contract for the improvement of real property.
129.1    (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
129.2for installation of the items is a retail sale and not a sale for resale since a sale of
129.3shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
129.4the improvement of real property.
129.5    (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
129.6is not considered a sale of property for resale.
129.7    (h) A sale of tangible personal property utilized or employed in the furnishing or
129.8providing of services under subdivision 3, paragraph (g), clause (1), including, but not
129.9limited to, property given as promotional items, is a retail sale and is not considered a
129.10sale of property for resale.
129.11    (i) A sale of tangible personal property used in conducting lawful gambling under
129.12chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
129.13given as promotional items, is a retail sale and is not considered a sale of property for resale.
129.14    (j) Except as otherwise provided in this paragraph, a sale of machines, equipment,
129.15or devices that are used to furnish, provide, or dispense goods or services, including,
129.16but not limited to, coin-operated devices, is a retail sale and is not considered a sale of
129.17property for resale. A sale of coin-operated entertainment and amusement machines,
129.18including, but not limited to, fortune-telling machines, cranes, foosball and pool tables,
129.19video and pinball games, batting cages, rides, photo or video booths, and jukeboxes is a
129.20sale of property for resale.
129.21    (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
129.22payment becomes due under the terms of the agreement or the trade practices of the lessor
129.23or; (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, subdivision
129.2411 , but excluding vehicles with a manufacturer's gross vehicle weight rating greater than
129.2510,000 pounds and rentals of vehicles for not more than 28 days, at the time the lease is
129.26executed; or (3) for rent-to-own or lease-to-own used vehicles where the lessee may
129.27purchase or return the vehicle at any time without penalty, at the time each payment is
129.28made under the terms of the agreement.
129.29    (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
129.30title or possession of the tangible personal property.
129.31    (m) A sale of a bundled transaction in which one or more of the products included
129.32in the bundle is a taxable product is a retail sale, except that if one of the products
129.33is a telecommunication service, ancillary service, Internet access, or audio or video
129.34programming service, and the seller has maintained books and records identifying through
129.35reasonable and verifiable standards the portions of the price that are attributable to the
130.1distinct and separately identifiable products, then the products are not considered part of a
130.2bundled transaction. For purposes of this paragraph:
130.3    (1) the books and records maintained by the seller must be maintained in the regular
130.4course of business, and do not include books and records created and maintained by the
130.5seller primarily for tax purposes;
130.6    (2) books and records maintained in the regular course of business include, but are
130.7not limited to, financial statements, general ledgers, invoicing and billing systems and
130.8reports, and reports for regulatory tariffs and other regulatory matters; and
130.9    (3) books and records are maintained primarily for tax purposes when the books
130.10and records identify taxable and nontaxable portions of the price, but the seller maintains
130.11other books and records that identify different prices attributable to the distinct products
130.12included in the same bundled transaction.
130.13    (n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
130.14body shop business is a retail sale and the sales tax is imposed on the gross receipts from the
130.15retail sale of the paint and materials. The motor vehicle repair or body shop that purchases
130.16motor vehicle repair paint and motor vehicle repair materials for resale must either:
130.17    (1) separately state each item of paint and each item of materials, and the sales price
130.18of each, on the invoice to the purchaser; or
130.19    (2) in order to calculate the sales price of the paint and materials, use a method
130.20which estimates the amount and monetary value of the paint and materials used in
130.21the repair of the motor vehicle by multiplying the number of labor hours by a rate of
130.22consideration for the paint and materials used in the repair of the motor vehicle following
130.23industry standard practices that fairly calculate the gross receipts from the retail sale of
130.24the motor vehicle repair paint and motor vehicle repair materials. An industry standard
130.25practice fairly calculates the gross receipts if the sales price of the paint and materials used
130.26or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid
130.27by the motor vehicle repair or body shop business. Under this clause, the invoice must
130.28either separately state the "paint and materials" as a single taxable item, or separately state
130.29"paint" as a taxable item and "materials" as a taxable item. This clause does not apply to
130.30wholesale transactions at an auto auction facility.
130.31    (o) A payment made to a cooperative electric association or public utility as a
130.32contribution in aid of construction is a contract for improvement to real property and
130.33is not a retail sale.
130.34EFFECTIVE DATE.This section is effective for sales and purchases made after
130.35June 30, 2013.

131.1    Sec. 3. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
131.2to read:
131.3    Subd. 49. Motor vehicle repair paint and motor vehicle repair materials. "Motor
131.4vehicle repair paint" means a substance composed of solid matter suspended in a liquid
131.5medium and applied as a protective or decorative coating to the surface of a motor vehicle in
131.6order to restore the motor vehicle to its original condition, and includes primer, body paint,
131.7clear coat, and paint thinner used to paint motor vehicles, as defined in section 297B.01.
131.8"Motor vehicle repair materials" means items, other than motor vehicle repair paint
131.9or motor vehicle parts, that become a part of a repaired motor vehicle or are consumed in
131.10repairing the motor vehicle at retail, and include abrasives, battery water, body filler or
131.11putty, bolts and nuts, brake fluid, buffing pads, chamois, cleaning compounds, degreasing
131.12compounds, glaze, grease, grinding discs, hydraulic jack oil, lubricants, masking tape,
131.13oxygen and acetylene, polishes, rags, razor blades, sandpaper, sanding discs, scuff pads,
131.14sealer, solder, solvents, striping tape, tack cloth, thinner, waxes, and welding rods. Motor
131.15vehicle repair materials do not include items that are not used directly on the motor vehicle,
131.16such as floor dry that is used to clean the shop, or cleaning compounds and rags that are
131.17used to clean tools, equipment, or the shop and are not used to clean the motor vehicle.
131.18EFFECTIVE DATE.This section is effective for sales and purchases made after
131.19June 30, 2013.

131.20    Sec. 4. Minnesota Statutes 2012, section 297A.64, subdivision 1, is amended to read:
131.21    Subdivision 1. Tax imposed. (a) A tax is imposed on the lease or rental in this
131.22state for not more than 28 days of a passenger automobile as defined in section 168.002,
131.23subdivision 24 , a van as defined in section 168.002, subdivision 40, or a pickup truck as
131.24defined in section 168.002, subdivision 26. The rate of tax is 6.2 9.2 percent of the sales
131.25price. The tax applies whether or not the vehicle is licensed in the state.
131.26(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
131.27corporation or similar entity, consisting of members who pay the organization for the
131.28use of a motor vehicle, if the organization:
131.29(1) owns or leases a fleet of vehicles of the type subject to the tax under paragraph (a)
131.30that are available to its members for use, priced on the basis of intervals of one hour or less;
131.31(2) parks its vehicles at unstaffed, self-service locations that are accessible to its
131.32members at any time; and
131.33(3) maintains its vehicles, insures its vehicles on behalf of its members, and
131.34purchases fuel for its fleet.
132.1EFFECTIVE DATE.This section is effective for sales and purchases made after
132.2June 30, 2013.

132.3    Sec. 5. Minnesota Statutes 2012, section 297A.64, subdivision 2, is amended to read:
132.4    Subd. 2. Fee imposed. (a) A fee equal to five percent of the sales price is imposed
132.5on leases or rentals of vehicles subject to the tax under subdivision 1, paragraph (a). The
132.6lessor on the invoice to the customer may designate the fee as "a fee imposed by the State
132.7of Minnesota for the registration of rental cars."
132.8(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
132.9corporation or similar entity, consisting of individual or group members who pay the
132.10organization for the use of a motor vehicle, if the organization:
132.11(1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1
132.12that are available to its members for use, priced on the basis of intervals of one hour or less;
132.13(2) parks its vehicles at unstaffed, self-service locations that are accessible at any
132.14time of the day;
132.15(3) maintains its vehicles, insures its vehicles on behalf of its members, and
132.16purchases fuel for its fleet; and
132.17(4) does not charge usage rates that decline on a per unit basis, whether specified
132.18based on distance or time exempt from the tax imposed under subdivision 1, paragraph (b).
132.19EFFECTIVE DATE.This section is effective for sales and purchases made after
132.20June 30, 2013.

132.21    Sec. 6. Minnesota Statutes 2012, section 297A.66, is amended by adding a subdivision
132.22to read:
132.23    Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
132.24means a person, whether an independent contractor or other representative, who directly
132.25or indirectly solicits business for the retailer.
132.26(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
132.27with a resident under which the resident, for a commission or other consideration, directly
132.28or indirectly refers potential customers, whether by a link on an Internet Web site, or
132.29otherwise, to the seller. This paragraph only applies if the total gross receipts are at least
132.30$10,000 in the 12-month period ending on the last day of the most recent calendar quarter
132.31before the calendar quarter in which the sale is made. For purposes of this paragraph,
132.32gross receipts means receipts from sales to customers located in the state who were
132.33referred to the retailer by all residents with this type of agreement with the retailer.
133.1(c) The presumption under paragraph (b) may be rebutted by proof that the resident
133.2with whom the seller has an agreement did not engage in any solicitation in the state
133.3on behalf of the retailer that would satisfy the nexus requirement of the United States
133.4Constitution during the 12-month period in question. Nothing in this section shall be
133.5construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
133.6representative for purposes of subdivision 1, paragraph (a).
133.7(d) For purposes of this paragraph, "resident" includes an individual who is a
133.8resident of this state, as defined in section 290.01, or a business that owns tangible
133.9personal property located in this state or has one or more employees providing services for
133.10the business in this state.
133.11(e) This subdivision does not apply to chapter 290 and does not expand or contract
133.12the jurisdiction to tax a trade or business under chapter 290.
133.13EFFECTIVE DATE.This section is effective for sales and purchases made after
133.14June 30, 2013.

133.15    Sec. 7. Minnesota Statutes 2012, section 297A.668, is amended by adding a
133.16subdivision to read:
133.17    Subd. 6a. Multiple points of use. (a) Notwithstanding the provisions of subdivisions
133.182 to 5, a business purchaser that is not a holder of a direct pay permit that knows at the
133.19time of its purchase of a digital good, computer software delivered electronically, or a
133.20service that the digital good, computer software delivered electronically, or service will be
133.21concurrently available for use in more than one jurisdiction shall deliver to the seller in
133.22conjunction with its purchase a multiple points of use exemption certificate disclosing
133.23this fact.
133.24(b) Upon receipt of the multiple points of use certificate, the seller is relieved of the
133.25obligation to collect, pay, or remit the applicable tax and the purchaser is obligated to
133.26collect, pay, or remit the applicable tax on a direct pay basis.
133.27(c) A purchaser delivering the multiple points of use exemption certificate may use
133.28any reasonable, but consistent and uniform, method of apportionment that is supported by
133.29the purchaser's business records as they exist at the time of the consummation of the sale.
133.30(d) The multiple points of use exemption certificate remains in effect for all future
133.31sales by the seller to the purchaser until it is revoked in writing, except as to the subsequent
133.32sale's specific apportionment that is governed by the principle of paragraph (c) and the
133.33facts existing at the time of the sale.
133.34(e) A holder of a direct pay permit is not required to deliver a multiple points of use
133.35exemption certificate to the seller. A direct pay permit holder shall follow the provisions
134.1of paragraph (c) in apportioning the tax due on a digital good, computer software delivered
134.2electronically, or a service that will be concurrently available for use in more than one
134.3jurisdiction.
134.4EFFECTIVE DATE.This section is effective for sales and purchases made after
134.5June 30, 2013.

134.6    Sec. 8. Minnesota Statutes 2012, section 297A.67, subdivision 7, is amended to read:
134.7    Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical
134.8devices for human use are exempt:
134.9    (1) drugs, including over-the-counter drugs;
134.10    (2) single-use finger-pricking devices for the extraction of blood and other single-use
134.11devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
134.12diabetes;
134.13    (3) insulin and medical oxygen for human use, regardless of whether prescribed
134.14or sold over the counter;
134.15    (4) prosthetic devices;
134.16    (5) durable medical equipment for home use only;
134.17    (6) mobility enhancing equipment;
134.18    (7) prescription corrective eyeglasses; and
134.19    (8) kidney dialysis equipment, including repair and replacement parts.
134.20(b) Items purchased in transactions covered by:
134.21(1) Medicare as defined under title XVIII of the Social Security Act, United States
134.22Code, title 42, sections 1395, et seq.; or
134.23(2) Medicaid as defined under title XIX of the Social Security Act, United States
134.24Code, title 42, sections 1396, et seq.
134.25    (b) (c) For purposes of this subdivision:
134.26    (1) "Drug" means a compound, substance, or preparation, and any component of
134.27a compound, substance, or preparation, other than food and food ingredients, dietary
134.28supplements, or alcoholic beverages that is:
134.29    (i) recognized in the official United States Pharmacopoeia, official Homeopathic
134.30Pharmacopoeia of the United States, or official National Formulary, and supplement
134.31to any of them;
134.32    (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
134.33of disease; or
134.34    (iii) intended to affect the structure or any function of the body.
135.1    (2) "Durable medical equipment" means equipment, including repair and
135.2replacement parts and all accessories and supplies, including single patient use items
135.3required for the effective use of the durable medical equipment device, but not including
135.4mobility enhancing equipment, that:
135.5    (i) can withstand repeated use;
135.6    (ii) is primarily and customarily used to serve a medical purpose;
135.7    (iii) generally is not useful to a person in the absence of illness or injury; and
135.8    (iv) is not worn in or on the body.
135.9    For purposes of this clause, "repair and replacement parts" includes all components
135.10or attachments used in conjunction with the durable medical equipment, but does not
135.11include including repair and replacement parts which are for single patient use only.
135.12    (3) "Mobility enhancing equipment" means equipment, including repair and
135.13replacement parts, but not including durable medical equipment, that:
135.14    (i) is primarily and customarily used to provide or increase the ability to move from
135.15one place to another and that is appropriate for use either in a home or a motor vehicle;
135.16    (ii) is not generally used by persons with normal mobility; and
135.17    (iii) does not include any motor vehicle or equipment on a motor vehicle normally
135.18provided by a motor vehicle manufacturer.
135.19    (4) "Over-the-counter drug" means a drug that contains a label that identifies the
135.20product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The
135.21label must include a "drug facts" panel or a statement of the active ingredients with a list of
135.22those ingredients contained in the compound, substance, or preparation. Over-the-counter
135.23drugs do not include grooming and hygiene products, regardless of whether they otherwise
135.24meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
135.25shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
135.26    (5) "Prescribed" and "prescription" means a direction in the form of an order,
135.27formula, or recipe issued in any form of oral, written, electronic, or other means of
135.28transmission by a duly licensed health care professional.
135.29    (6) "Prosthetic device" means a replacement, corrective, or supportive device,
135.30including repair and replacement parts, and all necessary accessories, supplies, and items
135.31required for the effective use of the prosthetic device, worn on or in the body to:
135.32    (i) artificially replace a missing portion of the body;
135.33    (ii) prevent or correct physical deformity or malfunction; or
135.34    (iii) support a weak or deformed portion of the body.
135.35Prosthetic device does not include corrective eyeglasses.
135.36    (7) "Kidney dialysis equipment" means equipment that:
136.1    (i) is used to remove waste products that build up in the blood when the kidneys are
136.2not able to do so on their own; and
136.3    (ii) can withstand repeated use, including multiple use by a single patient,
136.4notwithstanding the provisions of clause (2).
136.5(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of
136.6the item purchased in the transaction is paid for or reimbursed by the federal government
136.7or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private
136.8insurance company administering the Medicare or Medicaid program on behalf of the
136.9federal government or the state of Minnesota, or by a managed care organization for the
136.10benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu
136.11of conventional Medicare or Medicaid coverage pursuant to agreement with the federal
136.12government or the state of Minnesota.
136.13EFFECTIVE DATE.This section is effective for sales and purchases made after
136.14June 30, 2013.

136.15    Sec. 9. Minnesota Statutes 2012, section 297A.70, subdivision 4, is amended to read:
136.16    Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
136.17(b), to the following "nonprofit organizations" are exempt:
136.18(1) a corporation, society, association, foundation, or institution organized and
136.19operated exclusively for charitable, religious, or educational purposes if the item
136.20purchased is used in the performance of charitable, religious, or educational functions; and
136.21(2) any senior citizen group or association of groups that:
136.22(i) in general limits membership to persons who are either age 55 or older, or
136.23physically disabled;
136.24(ii) is organized and operated exclusively for pleasure, recreation, and other
136.25nonprofit purposes, not including housing, no part of the net earnings of which inures to
136.26the benefit of any private shareholders; and
136.27(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
136.28For purposes of this subdivision, charitable purpose includes the maintenance of a
136.29cemetery owned by a religious organization.
136.30(b) This exemption does not apply to the following sales:
136.31(1) building, construction, or reconstruction materials purchased by a contractor
136.32or a subcontractor as a part of a lump-sum contract or similar type of contract with a
136.33guaranteed maximum price covering both labor and materials for use in the construction,
136.34alteration, or repair of a building or facility;
137.1(2) construction materials purchased by tax-exempt entities or their contractors to
137.2be used in constructing buildings or facilities that will not be used principally by the
137.3tax-exempt entities; and
137.4(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
137.5(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
137.6297A.67, subdivision 2 , except wine purchased by an established religious organization
137.7for sacramental purposes or as allowed under subdivision 9a; and
137.8(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
137.9as provided in paragraph (c).
137.10(c) This exemption applies to the leasing of a motor vehicle as defined in section
137.11297B.01, subdivision 11 , only if the vehicle is:
137.12(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
137.13passenger automobile, as defined in section 168.002, if the automobile is designed and
137.14used for carrying more than nine persons including the driver; and
137.15(2) intended to be used primarily to transport tangible personal property or
137.16individuals, other than employees, to whom the organization provides service in
137.17performing its charitable, religious, or educational purpose.
137.18(d) A limited liability company also qualifies for exemption under this subdivision if
137.19(1) it consists of a sole member that would qualify for the exemption, and (2) the items
137.20purchased qualify for the exemption.
137.21EFFECTIVE DATE.This section is effective retroactively for sales and purchases
137.22made after June 30, 2012.

137.23    Sec. 10. Minnesota Statutes 2012, section 297A.70, subdivision 8, is amended to read:
137.24    Subd. 8. Regionwide Public safety radio communication system systems;
137.25products and services. (a) Products and services including, but not limited to, end user
137.26equipment used for construction, ownership, operation, maintenance, and enhancement
137.27of the backbone system of the regionwide public safety radio communication system
137.28established under sections 403.21 to 403.40, are exempt. For purposes of this subdivision,
137.29backbone system is defined in section 403.21, subdivision 9. This subdivision is effective
137.30for purchases, sales, storage, use, or consumption for use in the first and second phases of
137.31the system, as defined in section 403.21, subdivisions 3, 10, and 11, that portion of the
137.32third phase of the system that is located in the southeast district of the State Patrol and
137.33the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system
137.34that is located in Itasca County.
138.1(b) Products and services, including, but not limited to, end-user equipment used
138.2for construction, ownership, operation, maintenance, and enhancement of public safety
138.3radio communication systems not already exempt under paragraph (a), including public
138.4safety radio dispatch centers, are exempt.
138.5EFFECTIVE DATE.This section is effective for sales and purchases made after
138.6June 30, 2013.

138.7    Sec. 11. Minnesota Statutes 2012, section 297A.70, is amended by adding a
138.8subdivision to read:
138.9    Subd. 9a. Established religious orders. (a) Sales of lodging, prepared food, candy,
138.10soft drinks, and alcoholic beverages at noncatered events between an established religious
138.11order and an affiliated institution of higher education are exempt.
138.12(b) For purposes of this subdivision, "established religious order" means an
138.13organization directly or indirectly under the control or supervision of a church or
138.14convention or association of churches, where members of the organization:
138.15(1) normally live together as part of a community;
138.16(2) make long-term commitments to live under a strict set of moral and spiritual
138.17rules; and
138.18(3) work or engage full time in a combination of prayer, religious study, church
138.19reform or renewal, or other religious, educational, or charitable goals of the organization.
138.20(c) For purposes of this subdivision, an institution of higher education is "affiliated"
138.21with an established religious order if members of the religious order are represented
138.22on the governing board of the institution of higher education and the two organization
138.23share campus space and common facilities.
138.24EFFECTIVE DATE.This section is effective retroactively for sales and purchases
138.25made after June 30, 2012.

138.26    Sec. 12. Minnesota Statutes 2012, section 297A.70, is amended by adding a
138.27subdivision to read:
138.28    Subd. 18. Nursing homes and boarding care homes. (a) All sales, except those
138.29listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding
138.30care home certified as a nursing facility under title 19 of the Social Security Act are
138.31exempt if the facility:
138.32(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the
138.33Internal Revenue Code; and
139.1(2) is certified to participate in the medical assistance program under title 19 of the
139.2Social Security Act, or certifies to the commissioner that it does not discharge residents
139.3due to the inability to pay.
139.4(b) This exemption does not apply to the following sales:
139.5(1) building, construction, or reconstruction materials purchased by a contractor
139.6or a subcontractor as a part of a lump-sum contract or similar type of contract with a
139.7guaranteed maximum price covering both labor and materials for use in the construction,
139.8alteration, or repair of a building or facility;
139.9(2) construction materials purchased by tax-exempt entities or their contractors to
139.10be used in constructing buildings or facilities that will not be used principally by the
139.11tax-exempt entities;
139.12(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
139.13(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
139.14297A.67, subdivision 2; and
139.15(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
139.16as provided in paragraph (c).
139.17(c) This exemption applies to the leasing of a motor vehicle as defined in section
139.18297B.01, subdivision 11, only if the vehicle is:
139.19(1) a truck, as defined in section 168.002; a bus, as defined in section 168.002; or a
139.20passenger automobile, as defined in section 168.002, if the automobile is designed and
139.21used for carrying more than nine persons including the driver; and
139.22(2) intended to be used primarily to transport tangible personal property or residents
139.23of the nursing home or boarding care home.
139.24EFFECTIVE DATE.This section is effective for sales and purchases made after
139.25June 30, 2013.

139.26    Sec. 13. Minnesota Statutes 2012, section 297A.71, is amended by adding a
139.27subdivision to read:
139.28    Subd. 45. Industrial measurement manufacturing and controls facility. (a)
139.29Materials and supplies used or consumed in, capital equipment incorporated into,
139.30fixtures installed in, and privately owned infrastructure in support of the construction,
139.31improvement, or expansion of an industrial measurement manufacturing and controls
139.32facility are exempt if:
139.33(1) the total capital investment made at the facility is at least $60,000,000;
139.34(2) the facility employs at least 250 full-time equivalent employees that are not
139.35employees currently employed by the company in the state; and
140.1(3) the Department of Employment and Economic Development determines that
140.2the expansion, remodeling, or improvement of the facility has a significant impact on
140.3the state economy.
140.4(b) The tax must be imposed and collected as if the rate under section 297A.62,
140.5subdivisions 1 and 1a, applied and refunded in the manner provided in section 297A.75,
140.6only after the following criteria are met:
140.7(1) a refund may not be issued until the owner of the facility has received
140.8certification from the Department of Employment and Economic Development that the
140.9company meets the requirements in paragraph (a); and
140.10(2) to receive the refund, the owner of the industrial measurement manufacturing
140.11and controls facility must initially apply to the Department of Employment and Economic
140.12Development for certification no later than one year from the final completion date of
140.13construction, improvement, or expansion of the industrial measurement manufacturing
140.14and controls facility.
140.15EFFECTIVE DATE.This section is effective for sales and purchases made after
140.16June 30, 2013, and before December 31, 2015.

140.17    Sec. 14. Minnesota Statutes 2012, section 297A.71, is amended by adding a
140.18subdivision to read:
140.19    Subd. 46. Building materials; resorts and recreational camping areas. Materials
140.20and supplies used or consumed in, and equipment incorporated into, the improvement of
140.21an existing structure located at a resort, as defined in section 157.15, subdivision 11, or
140.22recreational camping area, as defined in section 327.14, are exempt. The tax on purchases
140.23exempt under this provision must be imposed and collected as if the rate under section
140.24297A.62, subdivision 1, applied and then refunded in the manner provided in section
140.25297A.75. For purposes of this subdivision, a structure includes a cabin located on resort
140.26property and any other structure available for use by guests of the resort or recreational
140.27camping area.
140.28EFFECTIVE DATE.This section is effective for sales and purchases made after
140.29June 30, 2013.

140.30    Sec. 15. Minnesota Statutes 2012, section 297A.71, is amended by adding a
140.31subdivision to read:
140.32    Subd. 47. Biopharmaceutical manufacturing facility. (a) Materials and
140.33supplies used or consumed in, capital equipment incorporated into, and privately
141.1owned infrastructure in support of the construction, improvement, or expansion of a
141.2biopharmaceutical manufacturing facility in the state are exempt if the following criteria
141.3are met:
141.4(1) the facility is used for the manufacturing of biologics;
141.5(2) the total capital investment made at the facility exceeds $50,000,000; and
141.6(3) the facility creates and maintains at least 190 full-time equivalent positions at the
141.7facility. These positions must be new jobs in Minnesota and not the result of relocating
141.8jobs that currently exist in Minnesota.
141.9(b) The tax must be imposed and collected as if the rate under section 297A.62,
141.10subdivision 1, applied, and refunded in the manner provided in section 297A.75.
141.11(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing
141.12facility must:
141.13(1) initially apply to the Department of Employment and Economic Development
141.14for certification no later than one year from the final completion date of construction,
141.15improvement, or expansion of the facility; and
141.16(2) for each year that the owner of the biopharmaceutical manufacturing facility
141.17applies for a refund, the owner must have received written certification from the
141.18Department of Employment and Economic Development that the facility has met the
141.19criteria of paragraph (a).
141.20(d) The refund is to be paid annually at a rate of 25 percent of the total allowable
141.21refund payable to date, with the commissioner making annual payments of the remaining
141.22refund until all of the refund has been paid.
141.23(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are
141.24interchangeable and mean medical drugs or medicinal preparations produced using
141.25technology that uses biological systems, living organisms or derivatives of living
141.26organisms, to make or modify products or processes for specific use. The medical drugs or
141.27medicinal preparations include but are not limited to proteins, antibodies, nucleic acids,
141.28and vaccines.
141.29EFFECTIVE DATE.This section is effective retroactively to investments entered
141.30into and jobs created after December 31, 2012, and effective retroactively for sales and
141.31purchases made after December 31, 2012, and before July 1, 2019.

141.32    Sec. 16. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
141.33    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
141.34following exempt items must be imposed and collected as if the sale were taxable and the
141.35rate under section 297A.62, subdivision 1, applied. The exempt items include:
142.1    (1) capital equipment exempt under section 297A.68, subdivision 5;
142.2    (2) building materials for an agricultural processing facility exempt under section
142.3297A.71, subdivision 13 ;
142.4    (3) building materials for mineral production facilities exempt under section
142.5297A.71, subdivision 14 ;
142.6    (4) building materials for correctional facilities under section 297A.71, subdivision 3;
142.7    (5) building materials used in a residence for disabled veterans exempt under section
142.8297A.71, subdivision 11 ;
142.9    (6) elevators and building materials exempt under section 297A.71, subdivision 12;
142.10    (7) building materials for the Long Lake Conservation Center exempt under section
142.11297A.71, subdivision 17 ;
142.12    (8) materials and supplies for qualified low-income housing under section 297A.71,
142.13subdivision 23 ;
142.14    (9) materials, supplies, and equipment for municipal electric utility facilities under
142.15section 297A.71, subdivision 35;
142.16    (10) equipment and materials used for the generation, transmission, and distribution
142.17of electrical energy and an aerial camera package exempt under section 297A.68,
142.18subdivision 37;
142.19    (11) commuter rail vehicle and repair parts under section 297A.70, subdivision 3,
142.20paragraph (a), clause (10);
142.21    (12) materials, supplies, and equipment for construction or improvement of projects
142.22and facilities under section 297A.71, subdivision 40;
142.23(13) materials, supplies, and equipment for construction or improvement of a meat
142.24processing facility exempt under section 297A.71, subdivision 41;
142.25(14) materials, supplies, and equipment for construction, improvement, or
142.26expansion of an aerospace defense manufacturing facility exempt under section 297A.71,
142.27subdivision 42, and construction, expansion, or improvement of an industrial measurement
142.28manufacturing and controls facility under section 297A.71, subdivision 45;
142.29(15) enterprise information technology equipment and computer software for use in
142.30a qualified data center exempt under section 297A.68, subdivision 42; and
142.31(16) materials, supplies, and equipment for qualifying capital projects under section
142.32297A.71, subdivision 44 .;
142.33(17) materials, supplies, and equipment for structure improvements at resort and
142.34camping areas under section 297A.71, subdivision 46; and
143.1(18) materials, supplies, and equipment for construction, improvement, or expansion
143.2of a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision
143.347.
143.4EFFECTIVE DATE.This section is effective the day following final enactment.

143.5    Sec. 17. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
143.6    Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
143.7commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
143.8must be paid to the applicant. Only the following persons may apply for the refund:
143.9    (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
143.10    (2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental
143.11subdivision;
143.12    (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
143.13provided in United States Code, title 38, chapter 21;
143.14    (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
143.15property;
143.16    (5) for subdivision 1, clause (8), the owner of the qualified low-income housing
143.17project;
143.18    (6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or
143.19a joint venture of municipal electric utilities;
143.20    (7) for subdivision 1, clauses (10), (13), (14), and (15), and (18), the owner of the
143.21qualifying business; and
143.22    (8) for subdivision 1, clauses (11), (12), and (16), the applicant must be the
143.23governmental entity that owns or contracts for the project or facility.; and
143.24    (9) for subdivision 1, clause (17), the applicant must be the owner of the resort
143.25or recreational camping facility.
143.26EFFECTIVE DATE.This section is effective the day following final enactment.

143.27    Sec. 18. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
143.28    Subd. 3. Application. (a) The application must include sufficient information
143.29to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
143.30subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11),
143.31(12), (13), (14), (15), or (16), (17), or (18), the contractor, subcontractor, or builder must
143.32furnish to the refund applicant a statement including the cost of the exempt items and the
144.1taxes paid on the items unless otherwise specifically provided by this subdivision. The
144.2provisions of sections 289A.40 and 289A.50 apply to refunds under this section.
144.3    (b) An applicant may not file more than two applications per calendar year for
144.4refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
144.5    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
144.6exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
144.7of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
144.8subdivision 40, must not be filed until after June 30, 2009. Applications for refunds for
144.9purchases of items in section 297A.71, subdivision 47, must not be filed until after June
144.1030, 2016, and only one refund may be filed annually thereafter.
144.11EFFECTIVE DATE.This section is effective the day following final enactment.

144.12    Sec. 19. Minnesota Statutes 2012, section 297A.815, subdivision 3, is amended to read:
144.13    Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this
144.14subdivision, "net revenue" means an amount equal to:
144.15    (1) the revenues, including interest and penalties, collected under this section and
144.16on the leases under section 297A.61, subdivision 4, paragraph (k), clause (3), during
144.17the fiscal year; less
144.18    (2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal
144.19year 2013 and following fiscal years, $32,000,000.
144.20    (b) On or before June 30 of each fiscal year, the commissioner of revenue shall
144.21estimate the amount of the revenues and subtraction under paragraph (a) for the current
144.22fiscal year.
144.23    (c) On or after July 1 of the subsequent fiscal year, the commissioner of management
144.24and budget shall transfer the net revenue as estimated in paragraph (b) from the general
144.25fund, as follows:
144.26    (1) 50 percent to the greater Minnesota transit account; and
144.27    (2) 50 percent to the county state-aid highway fund. Notwithstanding any other law
144.28to the contrary, the commissioner of transportation shall allocate the funds transferred
144.29under this clause to the counties in the metropolitan area, as defined in section 473.121,
144.30subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall
144.31receive of such amount the percentage that its population, as defined in section 477A.011,
144.32subdivision 3, estimated or established by July 15 of the year prior to the current calendar
144.33year, bears to the total population of the counties receiving funds under this clause.
144.34    (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must
144.35be calculated using the following percentages of the total revenues:
145.1    (1) for fiscal year 2010, 83.75 percent; and
145.2    (2) for fiscal year 2011, 93.75 percent.
145.3EFFECTIVE DATE.This section is effective for leases entered into after June
145.430, 2013.

145.5    Sec. 20. Minnesota Statutes 2012, section 297A.993, subdivision 1, is amended to read:
145.6    Subdivision 1. Authorization; rates. Notwithstanding section 297A.99,
145.7subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside
145.8the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or
145.9more than one county outside the metropolitan transportation area acting under a joint
145.10powers agreement, may by resolution of the county board, or each of the county boards,
145.11following a public hearing impose (1) a transportation sales tax at a rate of up to one-half
145.12of one percent on retail sales and uses taxable under this chapter, and (2) an excise tax
145.13of $20 per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or
145.14acquired from any person engaged in the business of selling motor vehicles at retail,
145.15occurring within the jurisdiction of the taxing authority. The taxes imposed under this
145.16section are subject to approval by a majority of the voters in each of the counties affected
145.17at a general election who vote on the question to impose the taxes.
145.18EFFECTIVE DATE.This section is effective the day following final enactment.

145.19    Sec. 21. Minnesota Statutes 2012, section 297A.993, subdivision 2, is amended to read:
145.20    Subd. 2. Allocation; termination. The proceeds of the taxes must be dedicated
145.21exclusively to: (1) payment of the capital cost of a specific transportation project or
145.22improvement; (2) payments of the costs, which may include both capital and operating
145.23costs, of a specific transit project or improvement; or (3) payment of transit operating
145.24costs. The transportation project or improvement must be designated by the board of the
145.25county, or more than one county acting under a joint powers agreement. Except for taxes
145.26for operating costs of a transit project or improvement, or for transit operations, the taxes
145.27must terminate after the project or improvement has been completed when revenues
145.28raised are sufficient to finance the project.
145.29EFFECTIVE DATE.This section is effective the day following final enactment.

145.30    Sec. 22. Minnesota Statutes 2012, section 469.190, is amended by adding a subdivision
145.31to read:
146.1    Subd. 1a. Tax base; locally collected taxes. A tax imposed on the gross receipts
146.2from lodging under this section or under a special law applies to the same base as taxes
146.3collected by the commissioner of revenue under subdivision 7 and section 270C.171.
146.4EFFECTIVE DATE.This section is effective the day following final enactment.
146.5In enacting this section, the legislature confirms its original intent in enacting Minnesota
146.6Statutes, section 469.190, its predecessor provisions, and any special laws authorizing
146.7political subdivisions to impose lodging taxes, and that those taxes were and are intended
146.8to apply to the entire consideration paid to obtain access to transient lodging, including
146.9ancillary or related services, such as services provided by accommodation intermediaries
146.10as defined in Minnesota Statutes, section 297A.61, and similar services. The provisions of
146.11this section must not be interpreted to imply a narrower construction of the tax base under
146.12lodging tax provisions of Minnesota law prior to the enactment of this section.

146.13    Sec. 23. Minnesota Statutes 2012, section 469.190, subdivision 7, is amended to read:
146.14    Subd. 7. Collection. (a) The statutory or home rule charter city may agree with the
146.15commissioner of revenue that a tax imposed pursuant to this section shall be collected
146.16by the commissioner together with the tax imposed by chapter 297A, and subject to the
146.17same interest, penalties, and other rules and that its proceeds, less the cost of collection,
146.18shall be remitted to the city.
146.19    (b) If a tax imposed under this section or under a special law is not collected by
146.20the commissioner of revenue, the local government imposing the tax may only require
146.21an accommodations intermediary, as defined in section 297A.61, subdivision 47, to file
146.22and remit the tax related to accommodations intermediary services once in every calendar
146.23year. The local government must inform the tax intermediary of the date when the return
146.24and remittance is due.
146.25EFFECTIVE DATE.This section is effective for sales and purchases made after
146.26June 30, 2013.

146.27    Sec. 24. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
146.28Laws 1997, chapter 231, article 7, section 40, Laws 1998, chapter 389, article 8, section
146.2930, Laws 2003, First Special Session chapter 21, article 8, section 13, Laws 2005, First
146.30Special Session chapter 3, article 5, section 26, and Laws 2009, chapter 88, article 4,
146.31section 15, is amended to read:
146.32    Subd. 2. Use of revenues. Revenues received from the tax authorized by subdivision
146.331 may only be used by the city to pay the cost of collecting the tax, and, except as provided in
147.1paragraph (e), to pay for the following projects or to secure or pay any principal, premium,
147.2or interest on bonds issued in accordance with subdivision 3 for the following projects.
147.3    (a) To pay all or a portion of the capital expenses of construction, equipment and
147.4acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
147.5including the demolition of the existing arena and the construction and equipping of a
147.6new arena.
147.7    (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
147.8spent for:
147.9    (1) capital projects to further residential, cultural, commercial, and economic
147.10development in both downtown St. Paul and St. Paul neighborhoods; and
147.11    (2) capital and operating expenses of cultural organizations in the city, provided
147.12that the amount spent under this clause must equal ten percent of the total amount spent
147.13under this paragraph in any year.
147.14    (c) The amount apportioned under paragraph (b) shall be no less than 60 percent
147.15of the revenues derived from the tax each year, except to the extent that a portion of that
147.16amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a)
147.17prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1,
147.181998, but only if the city council determines that 40 percent of the revenues derived from
147.19the tax together with other revenues pledged to the payment of the bonds, including the
147.20proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
147.21    (d) If in any year more than 40 percent of the revenue derived from the tax authorized
147.22by subdivision 1 is used to pay debt service on the bonds issued for the purposes of
147.23paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment
147.24that exceeds 40 percent of the revenue must be determined for that year. In any year when
147.2540 percent of the revenue produced by the sales tax exceeds the amount required to pay
147.26debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the
147.27amount of the excess must be made available for capital projects to further residential,
147.28cultural, commercial, and economic development in the neighborhoods and downtown
147.29until the cumulative amounts determined for all years under the preceding sentence have
147.30been made available under this sentence. The amount made available as reimbursement in
147.31the preceding sentence is not included in the 60 percent determined under paragraph (c).
147.32    (e) In each of calendar years 2006 to 2014, revenue not to exceed $3,500,000 may be
147.33used to pay the principal of bonds issued for capital projects of the city. After December
147.3431, 2014, revenue from the tax imposed under subdivision 1 may not be used for this
147.35purpose. If the amount necessary to meet obligations under paragraphs (a) and (d) are less
147.36than 40 percent of the revenue from the tax in any year, the city may place the difference
148.1between 40 percent of the revenue and the amounts allocated under paragraphs (a) and (d)
148.2in an economic development fund to be used for any economic development purposes.
148.3    (f) By January 15 of each year, the mayor and the city council must report to the
148.4legislature on the use of sales tax revenues during the preceding one-year period.
148.5EFFECTIVE DATE.This section is effective the day after compliance by the
148.6governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
148.7subdivisions 2 and 3.

148.8    Sec. 25. Laws 1993, chapter 375, article 9, section 46, subdivision 5, as amended by
148.9Laws 1998, chapter 389, article 8, section 32, is amended to read:
148.10    Subd. 5. Expiration of taxing authority. The authority granted by subdivision 1 to
148.11the city to impose a sales tax shall expire on December 31, 2030 2042, or at an earlier
148.12time as the city shall, by ordinance, determine. Any funds remaining after completion of
148.13projects approved under subdivision 2, paragraph (a) and retirement or redemption of any
148.14bonds or other obligations may be placed in the general fund of the city.
148.15EFFECTIVE DATE.This section is effective the day after compliance by the
148.16governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
148.17subdivisions 2 and 3.

148.18    Sec. 26. Laws 2002, chapter 377, article 3, section 25, as amended by Laws 2009,
148.19chapter 88, article 4, section 19, and Laws 2010, chapter 389, article 5, section 3, is
148.20amended to read:
148.21    Sec. 25. ROCHESTER LODGING TAX.
148.22    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
148.23469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
148.24tax of one percent on the gross receipts from the furnishing for consideration of lodging at
148.25a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
148.26for a continuous period of 30 days or more.
148.27    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190 or
148.28477A.016 , or any other law, and in addition to the tax authorized by subdivision 1, the city
148.29of Rochester may impose an additional tax of one three percent on the gross receipts from
148.30the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
148.31resort, other than the renting or leasing of it for a continuous period of 30 days or more only
148.32upon the approval of the city governing body of a total financial package for the project.
149.1    Subd. 2. Disposition of proceeds. (a) The gross proceeds from the tax imposed
149.2under subdivision 1 must be used by the city to fund a local convention or tourism bureau
149.3for the purpose of marketing and promoting the city as a tourist or convention center.
149.4(b) The gross proceeds from the one three percent tax imposed under subdivision
149.51a shall be used to pay for (1) design, construction, renovation, improvement, and
149.6expansion of the Mayo Civic Center Complex and related infrastructure, including but not
149.7limited to, skyway access, lighting, parking, or landscaping; and (2) for payment of any
149.8principal, interest, or premium on bonds issued to finance the construction, renovation,
149.9improvement, and expansion of the Mayo Civic Center Complex.
149.10    Subd. 2a. Bonds. The city of Rochester may issue, without an election, general
149.11obligation bonds of the city, in one or more series, in the aggregate principal amount not to
149.12exceed $43,500,000 $50,000,000, to pay for capital and administrative costs for the design,
149.13construction, renovation, improvement, and expansion of the Mayo Civic Center Complex,
149.14and related infrastructure, including but not limited to, skyway, access, lighting, parking,
149.15and landscaping. The city may pledge the lodging tax authorized by subdivision 1a and the
149.16food and beverage tax authorized under Laws 2009, chapter 88, article 4, section 23, to the
149.17payment of the bonds. The debt represented by the bonds is not included in computing any
149.18debt limitations applicable to the city, and the levy of taxes required by Minnesota Statutes,
149.19section 475.61, to pay the principal of and interest on the bonds is not subject to any levy
149.20limitation or included in computing or applying any levy limitation applicable to the city.
149.21    Subd. 3. Expiration of taxing authority. The authority of the city to impose a tax
149.22under subdivision 1a shall expire when the principal and interest on any bonds or other
149.23obligations issued prior to December 31, 2014, to finance the construction, renovation,
149.24improvement, and expansion of the Mayo Civic Center Complex and related skyway
149.25access, lighting, parking, or landscaping have been paid, including any bonds issued to
149.26refund such bonds, or at an earlier time as the city shall, by ordinance, determine. Any
149.27funds remaining after completion of the project and retirement or redemption of the bonds
149.28shall be placed in the general fund of the city. The city may, by ordinance, repeal the
149.29tax provided that:
149.30(1) the revenues raised before the repeal are sufficient to meet all bond or other
149.31obligations backed by revenues of the tax; and
149.32(2) the repeal date meets the requirements of section 297A.99, subdivision 12.
149.33EFFECTIVE DATE.This section is effective the day after the governing body of
149.34the city of Rochester and its chief fiscal officer comply with Minnesota Statutes, section
149.35645.021, subdivisions 2 and 3.

150.1    Sec. 27. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision
150.22, is amended to read:
150.3    Subd. 2. Use of revenues. (a) Revenues received from the tax authorized by
150.4subdivision 1 by the city of St. Cloud must be used for the cost of collecting and
150.5administering the tax and to pay all or part of the capital or administrative costs of the
150.6development, acquisition, construction, improvement, and securing and paying debt
150.7service on bonds or other obligations issued to finance the following regional projects as
150.8approved by the voters and specifically detailed in the referendum authorizing the tax or
150.9extending the tax:
150.10    (1) St. Cloud Regional Airport;
150.11    (2) regional transportation improvements;
150.12    (3) regional community and aquatics and recreation centers and facilities;
150.13    (4) regional public libraries; and
150.14    (5) acquisition and improvement of regional park land and open space.
150.15    (b) Revenues received from the tax authorized by subdivision 1 by the cities of St.
150.16Joseph, Waite Park, Sartell, Sauk Rapids, and St. Augusta must be used for the cost of
150.17collecting and administering the tax and to pay all or part of the capital or administrative
150.18costs of the development, acquisition, construction, improvement, and securing and paying
150.19debt service on bonds or other obligations issued to fund the projects specifically approved
150.20by the voters at the referendum authorizing the tax or extending the tax. The portion of
150.21revenues from the city going to fund the regional airport or regional library located in the
150.22city of St. Cloud will be as required under the applicable joint powers agreement.
150.23    (c) The use of revenues received from the taxes authorized in subdivision 1 for
150.24projects allowed under paragraphs (a) and (b) are limited to the amount authorized for
150.25each project under the enabling referendum.
150.26EFFECTIVE DATE.This section is effective for a city that approves it the day
150.27after compliance by the governing body of that city with Minnesota Statutes, section
150.28645.021, subdivision 3.

150.29    Sec. 28. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision
150.304, is amended to read:
150.31    Subd. 4. Termination of tax. The tax imposed in the cities of St. Joseph, St. Cloud,
150.32St. Augusta, Sartell, Sauk Rapids, and Waite Park under subdivision 1 expires when the
150.33city council determines that sufficient funds have been collected from the tax to retire or
150.34redeem the bonds and obligations authorized under subdivision 2, paragraph (a), but no
150.35later than December 31, 2018. Notwithstanding Minnesota Statutes, section 297A.99,
151.1subdivision 3, paragraphs (a), (c), and (d), a city may extend the tax imposed under
151.2subdivision 1 through December 31, 2038, if approved under the referendum authorizing
151.3the tax under subdivision 1 or if approved by voters of the city at a general election held
151.4no later than November 6, 2018.
151.5EFFECTIVE DATE.This section is effective for a city that approves it the day
151.6after compliance by the governing body of that city with Minnesota Statutes, section
151.7645.021, subdivision 3.

151.8    Sec. 29. Laws 2008, chapter 366, article 7, section 19, subdivision 3, as amended by
151.9Laws 2011, First Special Session chapter 7, article 4, section 8, is amended to read:
151.10    Subd. 3. Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99,
151.11subdivision 3 , paragraph (b), the proceeds of the tax imposed under this section shall be
151.12used to pay for the costs of improvements to the Sportsman Park/Ballfields, Riverside
151.13Park, Lions Park/Pavilion, Cedar South Park also known as Eldorado Park, and Spring
151.14Street Park; improvements to and extension of the River County Bike Trail; acquisition,
151.15 and construction, improvement, and development of regional parks, bicycle trails, park
151.16land, open space, and of a pedestrian walkways, as described in the city improvement
151.17plan adopted by the city council by resolution on December 12, 2006, and walkway
151.18over Interstate 94 and State Highway 24; and the acquisition of land and construction of
151.19buildings for a community and recreation center. The total amount of revenues from the
151.20taxes in subdivisions 1 and 2 that may be used to fund these projects is $12,000,000
151.21plus any associated bond costs.
151.22EFFECTIVE DATE.This section is effective the day after compliance by the
151.23governing body of the city of Clearwater with Minnesota Statutes, section 645.021,
151.24subdivisions 2 and 3.

151.25    Sec. 30. Laws 2010, chapter 389, article 5, section 6, subdivision 4, is amended to read:
151.26    Subd. 4. Use of lodging tax revenues. The revenues derived from the tax imposed
151.27under subdivision 3 must be used by the city of Marshall to pay the costs of collecting
151.28and administering the lodging tax, to pay all or part of the operating costs of the new and
151.29existing facilities of the Minnesota Emergency Response and Industry Training Center,
151.30including the payment of debt service on bonds issued under subdivision 2, and to pay
151.31all or part of the operating costs of the facilities of the Southwest Minnesota Regional
151.32Amateur Sports Center, including the payment of debt service on bonds issued under
151.33subdivision 2. Authorized expenses include, but are not limited to, acquiring property;
152.1predesign; design; and paying construction, furnishing, and equipment costs related to
152.2these facilities and paying debt service on bonds or other obligations issued by the city.
152.3EFFECTIVE DATE.This section is effective the day following final enactment.

152.4    Sec. 31. Laws 2010, chapter 389, article 5, section 6, subdivision 6, is amended to read:
152.5    Subd. 6. Use of food and beverages tax. The revenues derived from the tax
152.6imposed under subdivision 5 must be used by the city of Marshall to pay the costs of
152.7collecting and administering the food and beverages tax, to pay all or part of the operating
152.8costs of the new and existing facilities of the Minnesota Emergency Response and
152.9Industry Training Center, including the payment of debt service on bonds issued under
152.10subdivision 2, and to pay all or part of the operating costs of the facilities of the Southwest
152.11Minnesota Regional Amateur Sports Center, including the payment of debt service on
152.12bonds issued under subdivision 2. Authorized expenses for each organization include,
152.13but are not limited to, acquiring property; predesign; design; and paying construction,
152.14furnishing, and equipment costs related to these facilities and paying debt service on
152.15bonds or other obligations issued by the city.
152.16EFFECTIVE DATE.This section is effective the day following final enactment.

152.17    Sec. 32. CITY OF MARSHALL; VALIDATION OF PRIOR ACT.
152.18    (a) Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city
152.19of Marshall may approve Laws 2010, chapter 389, article 5, section 6, as amended by
152.20Laws 201l, First Special Session chapter 7, article 4, section 9, and file its approval with
152.21the secretary of state by June 15, 2013. If approved as authorized under this paragraph,
152.22actions undertaken by the city pursuant to the approval of the voters on November 6, 2012,
152.23and otherwise in accordance with Laws 2010, chapter 389, article 5, section 6, as amended
152.24by Laws 201l, First Special Session chapter 7, article 4, section 9, are validated.
152.25    (b) Notwithstanding the time limit on the imposition of tax under Laws 2010,
152.26chapter 389, article 5, section 6, subdivision 1, as amended by Laws 201l, First Special
152.27Session chapter 7, article 4, section 9, and subject to local approval under paragraph (a),
152.28the city of Marshall may impose the tax on or before July 1, 2013.
152.29EFFECTIVE DATE.This section is effective the day following final enactment.

152.30    Sec. 33. CITY OF PROCTOR; VALIDATION OF PRIOR ACT.
152.31    Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city of
152.32Proctor may approve, by resolution, Laws 2008, chapter 366, article 7, section 13, and
153.1Laws 2010, chapter 389, article 5, sections 1 and 2, and file its approval with the secretary
153.2of state by January 1, 2014. If approved under this paragraph, actions undertaken by
153.3the city pursuant to the approval of the voters on November 2, 2010, and otherwise in
153.4accordance with those laws are validated.
153.5EFFECTIVE DATE.This section is effective the day following final enactment.

153.6    Sec. 34. CITY OF BEMIDJI; LOCAL TAXES AUTHORIZED.
153.7    Subdivision 1. Food and beverage tax authorized. Notwithstanding Minnesota
153.8Statutes, section 477A.016, or any ordinance, city charter, or other provision of law, the
153.9city of Bemidji may, by ordinance, impose a sales tax of up to one percent on the gross
153.10receipts of all food and beverages sold by a restaurant or place of refreshment located
153.11within the city. For purposes of this section, "food and beverages" include retail on-sale of
153.12intoxicating liquor and fermented malt beverages.
153.13    Subd. 2. Lodging tax. Notwithstanding Minnesota Statutes, section 469.190 or
153.14477A.016, or any other provision of law, ordinance, or city charter, the city of Bemidji
153.15may impose, by ordinance, a tax of up to one percent on the gross receipts for the
153.16furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
153.17resort, other than for the renting or leasing of it for a continuous period of 30 days or more.
153.18    Subd. 3. Use of proceeds from authorized taxes. The proceeds of the taxes
153.19imposed under subdivisions 1 and 2 must only be used by the city to fund the costs of
153.20operation, maintenance, and capital replacement costs for the Sanford Center.
153.21    Subd. 4. Collection, administration, and enforcement. The city may enter into
153.22an agreement with the commissioner of revenue to administer, collect, and enforce the
153.23taxes under subdivisions 1 and 2. If the commissioner agrees to collect the tax, the
153.24provisions of Minnesota Statutes, section 297A.99, related to collection, administration,
153.25and enforcement, and Minnesota Statutes, section 270C.171, apply.
153.26EFFECTIVE DATE.This section is effective the day after the governing body of
153.27the city of Bemidji and its chief clerical officer comply with Minnesota Statutes, section
153.28645.021, subdivisions 2 and 3.

153.29    Sec. 35. ROCHESTER SALES TAX SHARING.
153.30The city council may, after holding a public hearing and passing a resolution, use
153.31$5,000,000 of the $10,000,000 allocated to an economic development fund in Laws 1998,
153.32chapter 389, article 8, section 43, subdivision 3, as amended by Laws 2005, First Special
153.33Session chapter 3, article 5, section 28, and Laws 2011, First Special Session chapter 7,
154.1article 4, section 5, paragraph (c), clause (9), for grants to any or all of the cities of Altura,
154.2Byron, Chatfield, Dodge Center, Dover, Elgin, Eyota, Grand Meadow, Hayfield, Kasson,
154.3Mantorville, Mazeppa, Oronoco, Pine Island, Plainview, Spring Valley, St. Charles,
154.4Stewartville, Wanamingo, West Concord, and Zumbrota for economic development
154.5projects that these communities would fund through their economic development authority
154.6or housing and redevelopment authority. The public hearing may be part of a regular city
154.7council meeting. If the council does not pass the resolution by September 1, 2013, the
154.8$5,000,000 may not be used for grants to the other cities but shall instead be used to
154.9fund public infrastructure projects contained in the development plan under Minnesota
154.10Statutes, section 469.42.
154.11EFFECTIVE DATE.This section is effective the day following final enactment.

154.12    Sec. 36. REPEALER.
154.13Laws 2009, chapter 88, article 4, section 23, as amended by Laws 2010, chapter 389,
154.14article 5, section 4, is repealed.
154.15EFFECTIVE DATE.This section is effective the day following final enactment.


154.18    Section 1. Minnesota Statutes 2012, section 469.071, subdivision 5, is amended to read:
154.19    Subd. 5. Exception; parking facilities. Notwithstanding section 469.068, the
154.20Bloomington port authority need not require competitive bidding with respect to a
154.21structured parking facility or other public improvements constructed in conjunction with,
154.22and directly above or below, or adjacent and integrally related to, a development and
154.23financed with the proceeds of tax increment or, revenue bonds, or other funds of the
154.24port authority and the city of Bloomington.
154.25EFFECTIVE DATE.This section is effective upon compliance of the governing
154.26body of the city of Bloomington with the requirements of Minnesota Statutes, section
154.27645.021, subdivision 3.

154.28    Sec. 2. Minnesota Statutes 2012, section 469.169, is amended by adding a subdivision
154.29to read:
154.30    Subd. 19. Additional border city allocation; 2013. (a) In addition to the tax
154.31reductions authorized in subdivisions 12 to 18, the commissioner shall allocate $750,000
155.1for tax reductions to border city enterprise zones in cities located on the western border
155.2of the state. The commissioner shall allocate this amount among cities on a per capita
155.3basis. Allocations made under this subdivision may be used for tax reductions under
155.4section 469.171, or for other offsets of taxes imposed on or remitted by businesses located
155.5in the enterprise zone, but only if the municipality determines that the granting of the tax
155.6reduction or offset is necessary to retain a business within or attract a business to the zone.
155.7The city alternatively may elect to use any portion of the allocation under this paragraph
155.8for tax reductions under section 469.1732 or 469.1734.
155.9    (b) The commissioner shall allocate $750,000 for tax reductions under section
155.10469.1732 or 469.1734 to cities with border city enterprise zones located on the western
155.11border of the state. The commissioner shall allocate this amount among the cities on a per
155.12capita basis. The city alternatively may elect to use any portion of the allocation provided
155.13in this paragraph for tax reductions under section 469.171.
155.14EFFECTIVE DATE.This section is effective July 1, 2013.

155.15    Sec. 3. Minnesota Statutes 2012, section 469.176, subdivision 4c, is amended to read:
155.16    Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
155.17from an economic development district may not be used to provide improvements, loans,
155.18subsidies, grants, interest rate subsidies, or assistance in any form to developments
155.19consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
155.20facilities (determined on the basis of square footage) are used for a purpose other than:
155.21    (1) the manufacturing or production of tangible personal property, including
155.22processing resulting in the change in condition of the property;
155.23    (2) warehousing, storage, and distribution of tangible personal property, excluding
155.24retail sales;
155.25    (3) research and development related to the activities listed in clause (1) or (2);
155.26    (4) telemarketing if that activity is the exclusive use of the property;
155.27    (5) tourism facilities; or
155.28    (6) qualified border retail facilities; or
155.29    (7) space necessary for and related to the activities listed in clauses (1) to (6) (5).
155.30    (b) Notwithstanding the provisions of this subdivision, revenues derived from tax
155.31increment from an economic development district may be used to provide improvements,
155.32loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
155.33square feet of any separately owned commercial facility located within the municipal
155.34jurisdiction of a small city, if the revenues derived from increments are spent only to
155.35assist the facility directly or for administrative expenses, the assistance is necessary to
156.1develop the facility, and all of the increments, except those for administrative expenses,
156.2are spent only for activities within the district.
156.3    (c) A city is a small city for purposes of this subdivision if the city was a small city
156.4in the year in which the request for certification was made and applies for the rest of
156.5the duration of the district, regardless of whether the city qualifies or ceases to qualify
156.6as a small city.
156.7    (d) Notwithstanding the requirements of paragraph (a) and the finding requirements
156.8of section 469.174, subdivision 12, tax increments from an economic development district
156.9may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or
156.10assistance in any form to developments consisting of buildings and ancillary facilities, if
156.11all the following conditions are met:
156.12    (1) the municipality finds that the project will create or retain jobs in this state,
156.13including construction jobs, and that construction of the project would not have
156.14commenced before July 1, 2012, without the authority providing assistance under the
156.15provisions of this paragraph;
156.16    (2) construction of the project begins no later than July 1, 2012;
156.17    (3) the request for certification of the district is made no later than June 30, 2012; and
156.18    (4) for development of housing under this paragraph, the construction must begin
156.19before January 1, 2012.
156.20    The provisions of this paragraph may not be used to assist housing that is developed
156.21to qualify under section 469.1761, subdivision 2 or 3, or similar requirements of other law,
156.22if construction of the project begins later than July 1, 2011.
156.23EFFECTIVE DATE.This section is effective for districts for which the request for
156.24certification was made after June 30, 2012.

156.25    Sec. 4. Minnesota Statutes 2012, section 469.176, subdivision 4g, is amended to read:
156.26    Subd. 4g. General government use prohibited. (a) Tax increments may not be
156.27used to circumvent existing levy limit law.
156.28    (b) No tax increment from any district may be used for the acquisition, construction,
156.29renovation, operation, or maintenance of a building to be used primarily and regularly
156.30for conducting the business of a municipality, county, school district, or any other local
156.31unit of government or the state or federal government. This provision does not prohibit
156.32the use of revenues derived from tax increments for the construction or renovation of
156.33a parking structure.
156.34    (c)(1) Tax increments may not be used to pay for the cost of public improvements,
156.35equipment, or other items, if:
157.1    (i) the improvements, equipment, or other items are located outside of the area of the
157.2tax increment financing district from which the increments were collected; and
157.3    (ii) the improvements, equipment, or items that (A) primarily serve a decorative or
157.4aesthetic purpose, or (B) serve a functional purpose, but their cost is increased by more than
157.5100 percent as a result of the selection of materials, design, or type as compared with more
157.6commonly used materials, designs, or types for similar improvements, equipment, or items.
157.7    (2) The provisions of this paragraph do not apply to expenditures related to the
157.8rehabilitation of historic structures that are:
157.9    (i) individually listed on the National Register of Historic Places; or
157.10    (ii) a contributing element to a historic district listed on the National Register
157.11of Historic Places.
157.12EFFECTIVE DATE.This section is effective the day following final enactment for
157.13all tax increment financing districts, regardless of when the request for certification was
157.14made, but applies only to amounts spent after final enactment.

157.15    Sec. 5. Minnesota Statutes 2012, section 469.176, subdivision 6, is amended to read:
157.16    Subd. 6. Action required. (a) If, after four years from the date of certification of
157.17the original net tax capacity of the tax increment financing district pursuant to section
157.18469.177 , no demolition, rehabilitation, or renovation of property or other site preparation,
157.19including qualified improvement of a street adjacent to a parcel but not installation
157.20of utility service including sewer or water systems, has been commenced on a parcel
157.21located within a tax increment financing district by the authority or by the owner of the
157.22parcel in accordance with the tax increment financing plan, no additional tax increment
157.23may be taken from that parcel, and the original net tax capacity of that parcel shall be
157.24excluded from the original net tax capacity of the tax increment financing district. If the
157.25authority or the owner of the parcel subsequently commences demolition, rehabilitation,
157.26or renovation or other site preparation on that parcel including qualified improvement of
157.27a street adjacent to that parcel, in accordance with the tax increment financing plan, the
157.28authority shall certify to the county auditor that the activity has commenced, and the
157.29county auditor shall certify the net tax capacity thereof as most recently certified by the
157.30commissioner of revenue and add it to the original net tax capacity of the tax increment
157.31financing district. The county auditor must enforce the provisions of this subdivision. The
157.32authority must submit to the county auditor evidence that the required activity has taken
157.33place for each parcel in the district. The evidence for a parcel must be submitted by
157.34February 1 of the fifth year following the year in which the parcel was certified as included
157.35in the district. For purposes of this subdivision, qualified improvements of a street are
158.1limited to (1) construction or opening of a new street, (2) relocation of a street, and (3)
158.2substantial reconstruction or rebuilding of an existing street.
158.3    (b) For districts which were certified on or after January 1, 2005, and before April
158.420, 2009, the four-year period under paragraph (a) is increased to six years deemed to end
158.5on December 31, 2016.
158.6EFFECTIVE DATE.This section is effective the day following final enactment
158.7and applies to districts certified on or after January 1, 2006, and before April 20, 2009.

158.8    Sec. 6. Minnesota Statutes 2012, section 469.177, is amended by adding a subdivision
158.9to read:
158.10    Subd. 1d. Original net tax capacity adjustment; homestead market value
158.11exclusion. (a) Upon approval by the municipality, by resolution, the authority may elect
158.12to reduce the net tax capacity of a qualified district by the amount of the tax capacity
158.13attributable to the market value exclusion under section 273.13, subdivision 35. The
158.14amount of the reduction may not reduce the original net tax capacity below zero.
158.15    (b) For purposes of this subdivision, a qualified district means a tax increment
158.16financing district that satisfies the following conditions:
158.17    (1) for taxes payable in 2011, the authority received a homestead market value credit
158.18reimbursement under section 273.1384 for the district of $10,000 or more;
158.19    (2) for taxes payable in 2013, the reduction in captured tax capacity resulting from
158.20the market value exclusion for the district was equal to or greater than 1.75 percent of the
158.21district's captured tax capacity; and
158.22    (3) either (i) the authority is permitted to expend increments on activities under the
158.23provisions of section 469.1763, subdivision 3, or an equivalent provision of special law
158.24on July 1, 2013, or (ii) the district's tax increments received for taxes payable in 2012
158.25exceeded the amount of debt service payments due during calendar year 2012 on bonds
158.26issued under section 469.178 to which the district's increments are pledged.
158.27The calculation of the amount under clause (2) must reflect any adjustments to original
158.28net tax capacity made under subdivision 1, paragraphs (d) and (e), for the homestead
158.29market value exclusion.
158.30    (c) The authority must notify the county auditor of its election under this section no
158.31later than July 1, 2014. Notifications made by July 1, 2013, are effective beginning for
158.32taxes payable in 2014, and notifications made after July 1, 2013, are effective beginning
158.33for taxes payable in 2015.
159.1EFFECTIVE DATE.This section is effective the day following final enactment
159.2and applies to all tax increment financing districts regardless of when the request for
159.3certification was made.

159.4    Sec. 7. Minnesota Statutes 2012, section 473F.08, is amended by adding a subdivision
159.5to read:
159.6    Subd. 3c. Mall of America. (a) When computing the net tax capacity under section
159.7473F.05, the Hennepin County auditor shall exclude the captured tax capacity of Tax
159.8Increment Financing Districts No. 1-C and No. 1-G in the city of Bloomington.
159.9    (b) Notwithstanding the provisions of subdivision 2, paragraph (a), the
159.10commercial-industrial contribution percentage for the city of Bloomington is the
159.11contribution net tax capacity divided by the total net tax capacity of commercial-industrial
159.12property in the city, excluding any commercial-industrial property that is captured tax
159.13capacity of Tax Increment Financing Districts No. 1-C and No. 1-G.
159.14    (c) The property taxes to be paid on commercial-industrial tax capacity that is
159.15included in the captured tax capacity of Tax Increment Financing Districts No. 1-C and
159.16No. 1-G in the city of Bloomington must be determined as described in subdivision 6,
159.17except that the portion of the tax that is based on the areawide tax rate is to be treated
159.18as tax increment under section 469.176.
159.19    (d) The provisions of this subdivision take effect only if the clerk of the city of
159.20Bloomington certifies to the Hennepin County auditor that the city has entered into a
159.21binding written agreement with the Metropolitan Council to repair and restore, or to
159.22replace, the old Cedar Avenue bridge for use by bicycle commuters and recreational users.
159.23    (e) This subdivision expires on the earliest of the following dates:
159.24    (1) when the tax increment financing districts have been decertified in 2024 or 2035,
159.25as provided by section 11, subdivision 2 or 4; or
159.26    (2) on January 1, 2014, if the city clerk fails to make the certification provided in
159.27paragraph (d) or if the city fails to file its local approval of section 18 with the secretary
159.28of state by December 31, 2013.
159.29EFFECTIVE DATE.This section is effective beginning for property taxes payable
159.30in 2014.

159.31    Sec. 8. Laws 2008, chapter 366, article 5, section 26, is amended to read:
159.32    Sec. 26. BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR
159.33RULE.
160.1    (a) The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
160.2activities must be undertaken within a five-year period from the date of certification of
160.3a tax increment financing district, are increased to a ten-year 15-year period for the
160.4Port Authority of the City of Bloomington's Tax Increment Financing District No. 1-I,
160.5Bloomington Central Station.
160.6    (b) Notwithstanding the provisions of Minnesota Statutes, section 469.176, or any
160.7other law to the contrary, the city of Bloomington and its port authority may extend the
160.8duration limits of the district for a period through December 31, 2039.
160.9    (c) Effective for taxes payable in 2014, tax increment for the district must be
160.10computed using the current local tax rate, notwithstanding the provisions of Minnesota
160.11Statutes, section 469.177, subdivision 1a.
160.12EFFECTIVE DATE.Paragraphs (a) and (c) are effective upon compliance by
160.13the governing body of the city of Bloomington with the requirements of Minnesota
160.14Statutes, section 645.021, subdivision 3. Paragraph (b) is effective upon compliance by
160.15the governing bodies of the city of Bloomington, Hennepin County, and Independent
160.16School District No. 271 with the requirements of Minnesota Statutes, sections 469.1782,
160.17subdivision 2, and 645.021, subdivision 3.

160.18    Sec. 9. Laws 2008, chapter 366, article 5, section 34, as amended by Laws 2009,
160.19chapter 88, article 5, section 11, is amended to read:
160.20    Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY PARCELS
160.21DEEMED OCCUPIED.
160.22    (a) The provisions of this section apply to redevelopment tax increment financing
160.23districts created by the Housing and Redevelopment Authority in and for the city of
160.24Oakdale in the areas comprised of the parcels with the following parcel identification
160.25numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056;
160.263102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059;
160.273102921320060; 3102921320061; 3102921330005; and 3102921330004; and (2)
160.282902921330001 and 2902921330005.
160.29    (b) For a district subject to this section, the Housing and Redevelopment Authority
160.30may, when requesting certification of the original tax capacity of the district under
160.31Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district
160.32be certified as the tax capacity of the land.
160.33    (c) The authority to request certification of a district under this section expires on
160.34July 1, 2013.
161.1    (a) Parcel numbers 3102921320054, 3102921320055, 3102921320056,
161.23102921320057, 3102921320061, and 3102921330004 are deemed to meet the
161.3requirements of Minnesota Statutes, section 469.174, subdivision 10, paragraph (d),
161.4notwithstanding any contrary provisions of that paragraph, if the following conditions
161.5are met:
161.6    (1) a building located on any part of each of the specified parcels was demolished after
161.7the Housing and Redevelopment Authority for the city of Oakdale adopted a resolution
161.8under Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), clause (3);
161.9    (2) the building was removed either by the authority, by a developer under a
161.10development agreement with the Housing and Redevelopment Authority for the city of
161.11Oakdale, or by the owner of the property without entering into a development agreement
161.12with the Housing and Redevelopment Authority for the city of Oakdale; and
161.13    (3) the request for certification of the parcel as part of a district is filed with the
161.14county auditor by December 31, 2017.
161.15    (b) The provisions of this section allow an election by the Housing and
161.16Redevelopment Authority for the city of Oakdale for the parcels deemed occupied under
161.17paragraph (a), notwithstanding the provisions of Minnesota Statutes, sections 469.174,
161.18subdivision 10, paragraph (d), and 469.177, subdivision 1, paragraph (f).
161.19    (c) The city may elect, in the tax increment financing plan, to collect increment from
161.20a redevelopment district created under the provisions of this section for an additional ten
161.21years beyond the limit in Minnesota Statutes, section 469.176, subdivision 1b.
161.22EFFECTIVE DATE.This section is effective upon compliance by the governing
161.23body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021,
161.24subdivision 3, except that the provisions of paragraph (c) are effective only upon
161.25compliance with Minnesota Statutes, section 469.1782, subdivision 2, by Ramsey County
161.26and Independent School District No. 622.

161.27    Sec. 10. Laws 2010, chapter 216, section 55, is amended to read:
161.28    Sec. 55. OAKDALE; TAX INCREMENT FINANCING DISTRICT.
161.29    Subdivision 1. Duration of district. Notwithstanding the provisions of Minnesota
161.30Statutes, section 469.176, subdivision 1b, the city of Oakdale may collect tax increments
161.31from Tax Increment Financing District No. 6 (Bergen Plaza) through December 31, 2024
161.32 2040, subject to the conditions described in subdivision 2.
161.33    Subd. 2. Conditions for extension. (a) Subdivision 1 applies only if the following
161.34conditions are met:
162.1    (1) by July 1, 2011, the city of Oakdale has entered into a development agreement
162.2with a private developer for development or redevelopment of all or a substantial part of
162.3the area parcels described in clause (2); and
162.4    (2) by November 1, 2011, the city of Oakdale or a private developer commences
162.5construction of streets, traffic improvements, water, sewer, or related infrastructure that
162.6serves one or both of the parcels with the following parcel identification numbers:
162.72902921330001 and 2902921330005. For the purposes of this section, construction
162.8commences upon grading or other visible improvements that are part of the subject
162.9infrastructure.
162.10    (b) All tax increments received by the city of Oakdale under subdivision 1 after
162.11December 31, 2016, must be used only to pay costs that are both:
162.12    (1) related to redevelopment of the parcels specified in this subdivision or
162.13parcel numbers 3102921320053, 3102921320054, 3102921320055, 3102921320056,
162.143102921320057, 3102921320058, 3102921320059, 3102921320060, 3102921320061,
162.153102921320062, 3102921320063, 3102921330004, and 3102921330005, including,
162.16without limitation, any of the infrastructure referenced in this subdivision that serves
162.17any of the referenced parcels; and
162.18    (2) otherwise eligible under law to be paid with increments from the specified tax
162.19increment financing district, except the authority under this clause does not apply to
162.20increments collected after the conclusion of the duration limit under general law.
162.21EFFECTIVE DATE.This section is effective upon compliance by the governing
162.22body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021,
162.23subdivision 3, except that the amendments to subdivision 1 are effective only upon
162.24compliance with Minnesota Statutes, section 469.1782, subdivision 2, by Ramsey County
162.25and Independent School District No. 622.

162.26    Sec. 11. CITY OF BLOOMINGTON; TAX INCREMENT FINANCING.
162.27    Subdivision 1. Addition of property to Tax Increment Financing District
162.28No. 1-G. (a) Notwithstanding the provisions of Minnesota Statutes, section 469.175,
162.29subdivision 4, or any other law to the contrary, the governing bodies of the Port Authority
162.30of the city of Bloomington and the city of Bloomington may elect to eliminate the real
162.31property north of the existing building line on Lot 1, Block 1, Mall of America 7th
162.32Addition, exclusive of Lots 2 and 3 from Tax Increment Financing District No. 1-C
162.33within Industrial Development District No. 1 Airport South in the city of Bloomington,
162.34Minnesota, and expand the boundaries of Tax Increment Financing District No. 1-G
162.35to include that property.
163.1    (b) If the city elects to transfer parcels under this authority, the county auditor shall
163.2transfer the original tax capacity of the affected parcels from Tax Increment Financing
163.3District No. 1-C to Tax Increment Financing District No. 1-G.
163.4    Subd. 2. Authority to extend duration limit; computation of increment. (a)
163.5Notwithstanding Minnesota Statutes, section 469.176, or Laws 1996, chapter 464, article
163.61, section 8, or any other law to the contrary, the city of Bloomington and its port authority
163.7may extend the duration limits of Tax Increment Financing Districts No. 1-C and No.
163.81-G through December 31, 2034.
163.9    (b) Effective for property taxes payable in 2017 through 2034, the captured tax
163.10capacity of Tax Increment Financing District No. 1-C must be included in computing the
163.11tax rates of each local taxing district and the tax increment equals only the amount of tax
163.12computed under Minnesota Statutes, section 473F.08, subdivision 3c, paragraph (c).
163.13    (c) Effective for property taxes payable in 2019 through 2034, the captured tax
163.14capacity of Tax Increment Financing District No. 1-G must be included in computing the
163.15tax rates of each local taxing district and the tax increment for the district equals only
163.16the amount of tax computed under Minnesota Statutes, section 473F.08, subdivision
163.173c, paragraph (c).
163.18    Subd. 3. Treatment of increment. Increments received under the provisions
163.19of subdivision 2, paragraph (b) or (c), and Minnesota Statutes, section 473F.08,
163.20subdivision 3c, are deemed to be tax increments of Tax Increment Financing District No.
163.211-G, notwithstanding any law to the contrary, and without regard to whether they are
163.22attributable to captured tax capacity of Tax Increment Financing District No. 1-C.
163.23    Subd. 4. Condition. The authority under this section expires and Tax Increment
163.24Financing Districts No. 1-C and No. 1-G must be decertified for taxes payable in 2024
163.25and thereafter, if the total estimated market value of improvements for parcels located in
163.26Tax Increment Financing District No. 1-G, as modified, do not exceed $100,000,000
163.27by taxes payable in 2023.
163.28EFFECTIVE DATE.This section is effective upon compliance of the governing
163.29body of the city of Bloomington with the requirements of Minnesota Statutes, section
163.30645.021, subdivision 3, but only if the city enters into a binding written agreement with
163.31the Metropolitan Council to repair and restore, or to replace, the old Cedar Avenue bridge
163.32for use by bicycle commuters and recreational users. This section is effective without
163.33approval of the county and school district under Minnesota Statutes, section 469.1782,
163.34subdivision 2. The legislature finds that the county and school district are not "affected
163.35local government units" within the meaning of Minnesota Statutes, section 469.1782,
163.36because the provision allowing extended collection of increment by the tax increment
164.1financing districts does not affect their tax bases and tax rates dissimilarly to other counties
164.2and school districts in the metropolitan area.

164.3    Sec. 12. ST. CLOUD; TAX INCREMENT FINANCING.
164.4    The request for certification of Tax Increment Financing District No. 2, commonly
164.5referred to as the Norwest District, in the city of St. Cloud is deemed to have been made
164.6on or after August 1, 1979, and before July 1, 1982. Revenues derived from tax increment
164.7for that district must be treated for purposes of any law as revenue of a tax increment
164.8financing district for which the request for certification was made during that time period.
164.9EFFECTIVE DATE.This section is effective upon approval by the governing
164.10body of the city of St. Cloud and compliance with Minnesota Statutes, section 645.021,
164.11subdivision 3.

164.12    Sec. 13. DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY; TAX
164.13INCREMENT FINANCING DISTRICT.
164.14    Subdivision 1. Authorization. Notwithstanding the provisions of any other law,
164.15the Dakota County Community Development Agency may establish a redevelopment tax
164.16increment financing district comprised of the properties that were:
164.17    (1) included in the CDA 10 Robert and South Street district in the city of West
164.18St. Paul; and
164.19    (2) not decertified before July 1, 2012.
164.20The district created under this section terminates no later than December 31, 2018.
164.21    Subd. 2. Special rules. The requirements for qualifying a redevelopment district
164.22under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located
164.23within the district. Minnesota Statutes, section 469.176, subdivision 4j, do not apply to the
164.24district. The original tax capacity of the district is $93,239.
164.25    Subd. 3. Authorized expenditures. Tax increment from the district may be
164.26expended to pay for any eligible activities authorized by Minnesota Statutes, chapter 469,
164.27within the redevelopment area that includes the district, provided that the boundaries of
164.28the redevelopment area may not be expanded to add new area after April 1, 2013. All
164.29expenditures for eligible activities are deemed to be activities within the district under
164.30Minnesota Statutes, section 469.1763, subdivisions 2 to 4.
164.31    Subd. 4. Adjusted net tax capacity. The captured tax capacity of the district must
164.32be included in the adjusted net tax capacity of the city, county, and school district for the
164.33purposes of determining local government aid, education aid, and county program aid.
165.1The county auditor shall report to the commissioner of revenue the amount of the captured
165.2tax capacity for the district at the time the assessment abstracts are filed.
165.3EFFECTIVE DATE.This section is effective upon compliance by the governing
165.4body of the Dakota County Community Development Agency with the requirements of
165.5Minnesota Statutes, section 645.021, subdivision 3.

165.6    Sec. 14. CITY OF GLENCOE; TAX INCREMENT FINANCING DISTRICT
165.7EXTENSION.
165.8    Subdivision 1. Duration of district. Notwithstanding the provisions of Minnesota
165.9Statutes, section 469.176, subdivision 1b, paragraph (a), clause (4), or any other law to the
165.10contrary, the city of Glencoe may collect tax increments from Tax Increment Financing
165.11District No. 4 (McLeod County District No. 007) through December 31, 2023, subject to
165.12the conditions in subdivision 2.
165.13    Subd. 2. Exclusive use of revenues. (a) All tax increments derived from Tax
165.14Increment Financing District No. 4 (McLeod County District No. 007) that are collected
165.15after December 31, 2013, must be used only to pay debt service on or to defease bonds that
165.16were outstanding on January 1, 2013 and that were issued to finance improvements serving:
165.17    (1) Tax Increment Financing District No. 14 (McLeod County District No. 033)
165.18(Downtown);
165.19    (2) Tax Increment Financing District No. 15 (McLeod County District No. 035)
165.20(Industrial Park); and
165.21    (3) benefited properties as further described in proceedings related to the city's series
165.222007A bonds, dated September 1, 2007, and any bonds issued to refund those bonds.
165.23    (b) Increments may also be used to pay debt service on or to defease bonds issued to
165.24refund the bonds described in paragraph (a), if the refunding bonds do not increase the
165.25present value of debt service due on the refunded bonds when the refunding is closed.
165.26    (c) When the bonds described in paragraphs (a) and (b) have been paid or defeased,
165.27the district must be decertified and any remaining increment returned to the city, county,
165.28and school district as provided in Minnesota Statutes, section 469.176, subdivision 2,
165.29paragraph (c), clause (4).
165.30EFFECTIVE DATE.This section is effective upon compliance by the governing
165.31bodies of the city of Glencoe, McLeod County, and Independent School District No.
165.322859 with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and
165.33645.021, subdivision 3.

166.1    Sec. 15. CITY OF ELY; TAX INCREMENT FINANCING.
166.2    Subdivision 1. Extension of district. Notwithstanding Minnesota Statutes, section
166.3469.176, subdivision 1b, or any other law to the contrary, the city of Ely may collect
166.4tax increment from Tax Increment Financing District No. 1 through December 31,
166.52021. Increments from the district may only be used to pay binding obligations and
166.6administrative expenses.
166.7    Subd. 2. Binding obligations. For purposes of this section, "binding obligations"
166.8means the binding contractual or debt obligation of Tax Increment Financing District
166.9No. 1 entered into before January 1, 2013.
166.10    Subd. 3. Expenditures outside district. Notwithstanding Minnesota Statutes,
166.11section 469.1763, subdivision 2, the governing body of the city of Ely may elect to
166.12transfer revenues derived from increments from its Tax Increment Financing District No.
166.133 to the tax increment account established under Minnesota Statutes, section 469.177,
166.14subdivision 5, for Tax Increment Financing District No. 1. The amount that may be
166.15transferred is limited to the lesser of:
166.16    (1) $168,000; or
166.17    (2) the total amount due on binding obligations and outstanding on that date, less the
166.18amount of increment collected by Tax Increment Financing District No. 1 after December
166.1931, 2012, and administrative expenses of Tax Increment Financing District No. 1 incurred
166.20after December 31, 2012.
166.21EFFECTIVE DATE.This section is effective upon approval by the governing
166.22bodies of the city of Ely, St. Louis County, and Independent School District No. 696 with
166.23the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021,
166.24subdivision 3.

166.25    Sec. 16. CITY OF MAPLEWOOD; TAX INCREMENT FINANCING
166.26DISTRICT; SPECIAL RULES.
166.27    (a) If the city of Maplewood elects, upon the adoption of a tax increment financing
166.28plan for a district, the rules under this section apply to one or more redevelopment
166.29tax increment financing districts established by the city or the economic development
166.30authority of the city. The area within which the redevelopment tax increment districts may
166.31be created is parcel 362922240002 (the "parcel") or any replatted parcels constituting a
166.32part of the parcel and the adjacent rights-of-way. For purposes of this section, the parcel is
166.33the "3M Renovation and Retention Project Area" or "project area."
167.1    (b) The requirements for qualifying redevelopment tax increment districts under
167.2Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcel, which is
167.3deemed eligible for inclusion in a redevelopment tax increment district.
167.4    (c) The 90 percent rule under Minnesota Statutes, section 469.176, subdivision
167.54j, does not apply to the parcel.
167.6    (d) The expenditures outside district rule under Minnesota Statutes, section
167.7469.1763, subdivision 2, does not apply; the five-year rule under Minnesota Statutes,
167.8section 469.1763, subdivision 3, is extended to ten years; and expenditures must only
167.9be made within the project area.
167.10    (e) If, after one year from the date of certification of the original net tax capacity
167.11of the tax increment district, no demolition, rehabilitation, or renovation of property has
167.12been commenced on a parcel located within the tax increment district, no additional tax
167.13increment may be taken from that parcel, and the original net tax capacity of the parcel
167.14shall be excluded from the original net tax capacity of the tax increment district. If 3M
167.15Company subsequently commences demolition, rehabilitation, or renovation, the authority
167.16shall certify to the county auditor that the activity has commenced, and the county auditor
167.17shall certify the net tax capacity thereof as most recently certified by the commissioner
167.18of revenue and add it to the original net tax capacity of the tax increment district. The
167.19authority must submit to the county auditor evidence that the required activity has taken
167.20place for each parcel in the district.
167.21    (f) The authority to approve a tax increment financing plan and to establish a tax
167.22increment financing district under this section expires December 31, 2018.
167.23EFFECTIVE DATE.This section is effective upon approval by the governing
167.24body of the city of Maplewood and upon compliance with Minnesota Statutes, section
167.25645.021, subdivision 3.

167.26    Sec. 17. CITY OF MINNEAPOLIS; STREETCAR FINANCING.
167.27    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
167.28have the meanings given them.
167.29    (b) "City" means the city of Minneapolis.
167.30    (c) "County" means Hennepin County.
167.31    (d) "District" means the areas certified by the city under subdivision 2 for collection
167.32of value capture taxes.
167.33    (e) "Project area" means the area including one city block on either side of a streetcar
167.34line designated by the city to serve the downtown and adjacent neighborhoods of the city.
168.1    Subd. 2. Authority to establish district. (a) The governing body of the city may, by
168.2resolution, establish a value capture district consisting of some or all of the taxable parcels
168.3located within one or more of the following areas of the city, as described in the resolution:
168.4    (1) the area bounded by Nicollet Avenue on the west, 16th Street East on the south,
168.5First Avenue South on the east, and 14th Street East on the north;
168.6    (2) the area bounded by Spruce Place on the west, 14th Street West on the south,
168.7LaSalle Avenue on the east, and Grant Street West on the north;
168.8    (3) the area bounded by Nicollet Avenue or Mall on the west, Fifth Street South on
168.9the south, Marquette Avenue on the east, and Fourth Street South on the north; and
168.10    (4) the area bounded by First Avenue North on the west, Washington Avenue on the
168.11south, Hennepin Avenue on the east, and Second Street North on the north.
168.12    (b) The city may establish the district and the project area only after holding a public
168.13hearing on its proposed creation after publishing notice of the hearing and the proposal at
168.14least once not less than ten days nor more than 30 days before the date of the hearing.
168.15    Subd. 3. Calculation of value capture district; administrative provisions. (a) If
168.16the city establishes a value capture district under subdivision 2, the city shall request the
168.17county auditor to certify the district for calculation of the district's tax revenues.
168.18    (b) For purposes of calculating the tax revenues of the district, the county auditor
168.19shall treat the district as if it were a request for certification of a tax increment financing
168.20district under the provisions of Minnesota Statutes, section 469.177, subdivision 1,
168.21and shall calculate the tax revenues of the district for each year of its duration under
168.22subdivision 4 as equaling the amount of tax increment that would be computed by
168.23applying the provisions of Minnesota Statutes, section 469.177, subdivisions 1, 2, and
168.243, to determine captured tax capacity and multiplying by the current tax rate, excluding
168.25the state general tax rate. The city shall provide the county auditor with the necessary
168.26information to certify the district, including the option for calculating revenues derived
168.27from the areawide tax rate under Minnesota Statutes, chapter 473F.
168.28    (c) The county auditor shall pay to the city at the same times provided for settlement
168.29of taxes and payment of tax increments the tax revenues of the district. The city must use
168.30the tax revenues as provided under subdivision 4.
168.31    Subd. 4. Permitted uses of district tax revenues. (a) In addition to paying for
168.32reasonable administrative costs of the district, the city may spend tax revenues of the
168.33district for property acquisition, improvements, and equipment to be used for operations
168.34within the project area, along with related costs, for:
168.35    (1) planning, design, and engineering services related to the construction of the
168.36streetcar line;
169.1    (2) acquiring property for, constructing, and installing a streetcar line;
169.2    (3) acquiring and maintaining equipment and rolling stock and related facilities, such
169.3as maintenance facilities, which need not be located in the project area;
169.4    (4) acquiring, constructing, or improving transit stations; and
169.5    (5) acquiring or improving public space, including the construction and installation
169.6of improvements to streets and sidewalks, decorative lighting and surfaces, and plantings
169.7related to the streetcar line.
169.8    (b) The city may issue bonds or other obligations under Minnesota Statutes, chapter
169.9475, without an election, to fund acquisition or improvement of property of a capital
169.10nature authorized by this section, including any costs of issuance. The city may also issue
169.11bonds or other obligations to refund those bonds or obligations. Payment of principal
169.12and interest on the bonds or other obligations issued under this paragraph is a permitted
169.13use of the district's tax revenues.
169.14    (c) Tax revenues of the district may not be used for the operation of the streetcar line.
169.15    Subd. 5. Duration of the district. A district established under this section is limited
169.16to the lesser of (1) 25 years of tax revenues, or (2) the time necessary to collect tax revenues
169.17equal to the amount of the capital costs permitted under subdivision 4 or the amount needed
169.18to pay or defease bonds or other obligations issued under subdivision 4, whichever is later.
169.19EFFECTIVE DATE.This section is effective the day following final enactment.

169.20    Sec. 18. CITY OF BLOOMINGTON; OLD CEDAR AVENUE BRIDGE.
169.21    (a) Notwithstanding any law to the contrary, the city of Bloomington shall transfer
169.22from the tax increment financing accounts for its Tax Increment Financing District No.
169.231-C and Tax Increment Financing District No. 1-G an amount equal to the tax increment
169.24for each district that is computed under the provisions of Minnesota Statutes, section
169.25473F.08, subdivision 3c, for taxes payable in 2014 to an account or fund established for
169.26the repair, restoration, or replacement of the Old Cedar Avenue bridge for use by bicycle
169.27commuters and recreational users. The city is authorized to and must use the transferred
169.28funds to complete the repair, renovation, or replacement of the bridge.
169.29    (b) No signs, plaques, or markers acknowledging or crediting donations for,
169.30sponsorships of, or naming rights may be posted on or in the vicinity of the Old Cedar
169.31Avenue bridge.
169.32EFFECTIVE DATE.This section is effective upon compliance by the city of
169.33Bloomington with the requirements of Minnesota Statutes, section 645.021, subdivision 3.

170.1    Sec. 19. LABOR PEACE AGREEMENTS.
170.2(a) The state recognizes the need to protect public investments made in certain
170.3capital projects which may involve hospitality operations such as hotels. The efficient and
170.4uninterrupted operation of these hospitality services, and the associated public investment,
170.5may be threatened by labor disputes. The state finds that labor peace agreements in which
170.6labor unions voluntarily agree not to engage in picketing, boycotts, work stoppages, or
170.7any other economic interference at a hospitality business are the most effective method of
170.8ensuring continuous operation of hospitality businesses receiving state or local government
170.9investment. It is the policy of the state that labor peace agreements are required as a
170.10prerequisite for receiving state or local government participation on any qualifying project
170.11in which the state or a local government has a proprietary interest, or acts as a market
170.12participant, if the project will result in the employment of hospitality workers.
170.13(b) For the purposes of this section:
170.14(1) the state or a local government has a proprietary interest in a project where
170.15it finances the project in whole or in part by any of the following: providing a grant,
170.16providing a loan, guaranteeing any payment under any loan, lease, or other obligation,
170.17providing tax increment financing, contributing revenue on general obligation bonds, or
170.18providing a tax abatement, reduction, deferral, or credit;
170.19(2) the state or a local government acts as a market participant in a project when it is
170.20the owner of the project, is an equity investor in the project, or donates, sells, or leases real
170.21property, personal property, or infrastructure in support of the project;
170.22(3) "qualifying project" means a project that is located in a county that contains a
170.23city of the first class as defined under Minnesota Statutes, section 410.01, and includes
170.24the construction or development of a hotel; a food and beverage operation that is integral
170.25to a hotel, a major league or minor league sports facility, a convention center, or a civic
170.26center; or a cultural venue with catering or cafeteria facilities;
170.27(4) "hospitality workers" means all full-time or regular part-time employees of
170.28hotels and their integral food and beverage operations as well as all full-time or regular
170.29part-time employees providing food and beverage, concession, catering, cafeteria, or
170.30merchandise services at sports facilities, convention centers, civic centers, or cultural
170.31venues, excluding supervisors, managers, and guards;
170.32(5) "employer of hospitality workers" means an employer of hospitality workers
170.33who will be employed as a result of a qualifying project, and includes a developer of a
170.34state or local government-owned facility that is all or part of a qualifying project and a
170.35developer of a facility benefiting from state or local government financial participation in
170.36a qualifying project;
171.1(6) "labor peace agreement" means a valid contract that sets forth agreements by
171.2and between an employer of hospitality workers and any labor organization seeking to
171.3represent hospitality workers on the process the employer and union will follow as the
171.4hospitality workers who will be employed as a result of the project choose whether or not
171.5to organize as a unit for collective bargaining with the employer; and
171.6(7) "local government" includes counties, cities, towns, and any development
171.7authority established under Minnesota Statutes, chapter 469.
171.8(c) Any employer of hospitality workers on a qualifying project must have
171.9negotiated and executed a labor peace agreement with any interested labor organization
171.10prior to, and as a condition precedent of, the approval of financial assistance that causes
171.11the state or local government to hold a proprietary interest in the project. When the state or
171.12a local government acts as a market participant in the project, any employer of hospitality
171.13workers must have a signed labor peace agreement with any interested labor organization
171.14prior to, and as a condition precedent to, its contract with the state or local government.
171.15(d) To fulfill the condition precedent to state or local government participation, a
171.16labor peace agreement must contain:
171.17(1) a provision prohibiting the labor organization and its members from engaging
171.18in any picketing, work stoppages, boycotts, or any other economic interference with the
171.19employer's hospitality operations on the qualifying project for the duration of the state or
171.20local government's ongoing financial interest in the qualifying project or for five years,
171.21whichever is greater;
171.22(2) a provision requiring that during the duration of the agreement all disputes
171.23relating to employment conditions or the negotiation thereof shall be submitted to final
171.24and binding arbitration; and
171.25(3) a provision requiring the employer of hospitality workers to incorporate the
171.26terms of the labor peace agreement in any contract, subcontract, lease, sublease, operating
171.27agreement, concessionaire agreement, franchise agreement, or other agreement or
171.28instrument giving a right to any other employer of hospitality workers to own or operate
171.29the project or activities within the project.
171.30(e) If an employer of hospitality workers has valid collective bargaining agreements
171.31with recognized unions that cover, or will cover, the hospitality workers that will be
171.32employed as a result of the qualifying project, those agreements satisfy the requirements
171.33of this section.
171.34(f) This section shall not apply to projects that receive less than $1,000,000 of the
171.35total cost of the project from state and local government sources.
172.1(g) Nothing in this section requires an employer to recognize a particular labor
172.2organization. This section is not intended to enact or express any generally applicable
172.3policy regarding labor management relations or to regulate those relations in any way.
172.4This section is not intended to favor any particular outcome in the determination of
172.5employee preference regarding union representation.
172.6(h) Nothing in this section denies any financial assistance approved prior to August
172.71, 2013.


172.10    Section 1. Minnesota Statutes 2012, section 297A.71, is amended by adding a
172.11subdivision to read:
172.12    Subd. 48. Construction materials, public infrastructure related to the
172.13Destination medical center. Materials and supplies used in, and equipment incorporated
172.14into, the construction and improvement of publicly owned buildings and infrastructure
172.15included in the development plan adopted under section 469.42, and financed with public
172.16funds, are exempt.
172.17EFFECTIVE DATE.This section is effective for sales and purchases made after
172.18June 30, 2015.

172.19    Sec. 2. [469.40] DEFINITIONS.
172.20    Subdivision 1. Application. For the purposes of section 469.40 to 469.46, the terms
172.21defined in this section have the meanings given them.
172.22    Subd. 2. City. "City" means the city of Rochester.
172.23    Subd. 3. County. "County" means Olmsted County.
172.24    Subd. 4. Destination Medical Center Corporation, corporation, DMCC.
172.25"Destination Medical Center Corporation," "corporation," or "DMCC" means the
172.26nonprofit corporation created by the city as provided in section 469.41, and organized
172.27under chapter 317A.
172.28    Subd. 5. Destination medical center development district. "Destination medical
172.29center development district" or "development district" means a geographic area in the
172.30city identified in the adopted DMCC development plan in which public infrastructure
172.31projects are implemented.
172.32    Subd. 6. Development plan. "Development plan" means the plan adopted by
172.33the DMCC under section 469.42.
173.1    Subd. 7. Medical business entity. "Medical business entity" means a medical
173.2business entity with its principal place of business in the city that, as of the effective date
173.3of this section, together with all business entities of which it is the sole member or sole
173.4shareholder, collectively employs more than 30,000 persons in the state.
173.5    Subd. 8. Public infrastructure project. (a) "Public infrastructure project" means
173.6a project financed in part or whole with public money in order to support the medical
173.7business entity's development plans, as identified in the adopted DMCC development
173.8plan. A project may be to:
173.9(1) acquire real property and other assets associated with the real property;
173.10(2) demolish, repair, or rehabilitate buildings;
173.11(3) remediate land and buildings as required to prepare the property for acquisition
173.12or development;
173.13(4) install, construct, or reconstruct elements of public infrastructure required to
173.14support the overall development of the destination medical center development district,
173.15including, but not limited to, streets, roadways, utilities systems and related facilities,
173.16utility relocations and replacements, network and communication systems, streetscape
173.17improvements, drainage systems, sewer and water systems, subgrade structures and
173.18associated improvements, landscaping, façade construction and restoration, wayfinding
173.19and signage, and other components of community infrastructure;
173.20(5) acquire, construct or reconstruct, and equip parking facilities and other facilities
173.21to encourage intermodal transportation and public transit;
173.22(6) install, construct or reconstruct, furnish, and equip parks, cultural, and
173.23recreational facilities, facilities to promote tourism and hospitality, conferencing and
173.24conventions, broadcast and related multimedia infrastructure;
173.25(7) make related site improvements, including, without limitation, excavation, earth
173.26retention, soil stabilization and correction, site improvements to support the destination
173.27medical center development district; and
173.28(8) prepare land for private development and to sell or lease land.
173.29    (b) A public infrastructure project is not a business subsidy under section 116J.993.

173.30    Sec. 3. [469.41] DESTINATION MEDICAL CENTER CORPORATION
173.31ESTABLISHED.
173.32    Subdivision 1. DMCC created. The city shall establish a destination medical
173.33center corporation as a nonprofit corporation under chapter 317A to provide the city with
173.34expertise in preparing and implementing the development plan to establish the city as a
174.1destination medical center. Except as provided in this article, the nonprofit corporation
174.2is not subject to laws governing the city.
174.3    Subd. 2. Membership. (a) The corporation's governing board consists of nine
174.4voting members, as follows:
174.5    (1) the mayor of the city, or the mayor's designee, subject to approval by the city
174.6council;
174.7    (2) a member of the city council, selected by the city council;
174.8    (3) a member of the county board, selected by the county board;
174.9    (4) two representatives of the medical business entity defined in section 469.40,
174.10subdivision 7, appointed by the city council from among five candidates nominated by the
174.11medical business entity;
174.12(5) one representative of labor, appointed by the city council from among three
174.13candidates nominated by the Southeast Minnesota Area Labor Council;
174.14(6) one representative of the city business community other than the medical
174.15business entity, appointed by the city council from among three candidates nominated by
174.16the Rochester Area Chamber of Commerce; and
174.17    (7) two members, appointed by the governor.
174.18    (b) Appointing authorities must make their appointments as soon as practicable after
174.19the effective date of this section.
174.20    Subd. 3. Bylaws. The corporation shall adopt bylaws governing the terms of
174.21members, filling vacancies, removal of members, selection of officers and other personnel
174.22and contractors, and other matters of organization and operation of the corporation.
174.23    Subd. 4. Open meeting law; data practices. Meetings of the corporation and any
174.24committee or subcommittee of the corporation are subject to the open meeting law in
174.25chapter 13D. The corporation is a government entity for purposes of chapter 13.
174.26    Subd. 5. Conflicts of interest. Except for the members appointed under subdivision
174.272, paragraph (a), clause (4), to represent the medical business entity, within one year
174.28prior to or at any time during a member's term of service on the corporation's governing
174.29board, a member must not be employed by, be a member of the board of directors of, or
174.30otherwise be a representative of the medical business entity. No member may serve as a
174.31lobbyist, as defined under section 10A.01, subdivision 21.
174.32    Subd. 6. Powers; gifts. The corporation may exercise any other powers that are
174.33granted by its articles of incorporation and bylaws to the extent that those powers are not
174.34inconsistent with the provisions of sections 469.40 to 469.46. Notwithstanding any law to
174.35the contrary, the corporation may accept and use gifts of money or in-kind and may use
175.1any of its money or assets, other than money or assets received from the city, county, or
175.2state, to develop and implement the adopted development plan.
175.3    Subd. 7. Dissolution. The city shall provide for the terms for dissolution of the
175.4corporation in the articles of incorporation.

175.5    Sec. 4. [469.42] DEVELOPMENT PLAN.
175.6    Subdivision 1. Development plan; adoption by DMCC; notice; findings. (a)
175.7The corporation shall prepare and adopt a development plan. The corporation must
175.8hold a public hearing before adopting a development plan. At least 45 days before the
175.9hearing, the corporation shall make copies of the proposed plan available to the public at
175.10the corporation and city offices during normal business hours, on the corporation's and
175.11city's Web site, and as otherwise determined appropriate by the corporation. At least ten
175.12days before the hearing, the corporation shall publish notice of the hearing in a daily
175.13newspaper of general circulation in the city. The development plan may not be adopted
175.14unless the corporation finds by resolution that:
175.15(1) the plan provides an outline for the development of the city as a destination
175.16medical center, and the plan is sufficiently complete, including the identification of planned
175.17and anticipated projects, to indicate its relationship to definite state and local objectives;
175.18(2) the proposed development affords maximum opportunity, consistent with the
175.19needs of the city, county, and state, for the development of the city by private enterprise
175.20as a destination medical center;
175.21(3) the proposed development conforms to the general plan for the development of
175.22the city and is consistent with the city comprehensive plan;
175.23(4) the plan includes:
175.24(i) strategic planning consistent with a destination medical center in the core areas of
175.25commercial research and technology, learning environment, hospitality and convention,
175.26sports and recreation, livable communities, including mixed-use urban development
175.27and neighborhood residential development, retail/dining/entertainment, and health and
175.28wellness;
175.29(ii) estimates of short- and long-range fiscal and economic impacts;
175.30(iii) a framework to identify and prioritize short- and long-term public investment
175.31and public infrastructure project development and to facilitate private investment and
175.32development;
175.33(iv) land use planning;
175.34(v) transportation and transit planning;
176.1(vi) operational planning required to support the medical center development
176.2district; and
176.3(vii) ongoing market research plans; and
176.4(5) the city has approved the plan.
176.5(b) The identification of planned and anticipated projects under paragraph (a), clause
176.6(1), must give priority to projects that will pay wages at least equal to the basic cost of
176.7living wage as calculated by the commissioner of employment and economic development
176.8for the county in which the project is located. The calculation of the basic cost of living
176.9wage shall be done as provided for under Minnesota Statutes, section 116J.013, if enacted
176.10by the 2013 legislature.
176.11    Subd. 2. Modification of development plan. The corporation may modify the
176.12development plan at any time. The corporation must update the development plan not less
176.13than every five years. A modification or update under this subdivision must be adopted by
176.14the corporation upon the notice and after the public hearing and findings required for the
176.15original adoption of the development plan.
176.16    Subd. 3. Medical center development districts; creation; notice; findings. As
176.17part of the development plan, the corporation may create and define the boundaries of
176.18medical center development districts and subdistricts at any place or places within the
176.19city. Projects may be undertaken within defined medical center development districts
176.20consistent with the development plan.
176.21    Subd. 4. DMCC consultant. (a) The corporation may engage a business entity
176.22consultant to provide experience and expertise in developing the destination medical
176.23center. The consultant may assist the corporation in preparing the development plan and
176.24provide services to assist the corporation or city in implementing, consistent with the
176.25development plan, the goals, objectives, and strategies in the development plan, including,
176.26but not limited to:
176.27(1) developing and updating the criteria for evaluating and underwriting
176.28development proposals;
176.29(2) implementing the development plan, including soliciting and evaluating
176.30proposals for development and evaluating and making recommendations to the corporation
176.31and the city regarding those proposals;
176.32(3) providing transactional services in connection with approved projects;
176.33(4) developing patient, visitor, and community outreach programs for a destination
176.34medical center development district;
176.35(5) working with the corporation to acquire and facilitate the sale, lease, or other
176.36transactions involving land and real property;
177.1(6) seeking financial support for the corporation, the city, and a project;
177.2(7) partnering with other development agencies and organizations and the county in
177.3joint efforts to promote economic development and establish a destination medical center;
177.4(8) supporting and administering the planning and development activities required to
177.5implement the development plan;
177.6(9) preparing and supporting the marketing and promotion of the medical center
177.7development district;
177.8(10) preparing and implementing a program for community and public relations in
177.9support of the medical center development district;
177.10(11) assisting the corporation or city and others in applications for federal grants, tax
177.11credits, and other sources of funding to aid both private and public development; and
177.12(12) making other general advisory recommendations to the corporation and the
177.13city, as requested.
177.14(b) The corporation may contract with the consultant to provide administrative
177.15services to the corporation with regard to the destination medical center plan
177.16implementation. The corporation may pay for those services out of any revenue sources
177.17available to it.
177.18    Subd. 5. Audit of consultant contracts. Any contract for services between the
177.19corporation and a consultant paid, in whole or in part, with public money gives the
177.20corporation, the city, and the state auditor the right to audit the books and records of the
177.21consultant that are necessary to certify (1) the nature and extent of the services furnished
177.22pursuant to the contract, and (2) that the payment for services and related disbursements
177.23complies with all state laws, regulations, and the terms of the contract. Any contract for
177.24services between the corporation and the consultant paid, in whole or in part, with public
177.25money shall require the corporation to maintain for the life of the corporation accurate and
177.26complete books and records directly relating to the contract.
177.27    Subd. 6. Report. By January 15 of each year, the corporation and city must submit
177.28a report to the chairs and ranking minority members of the legislative committees with
177.29jurisdiction over local and state government operations, economic development, and taxes,
177.30and to the commissioners of revenue and employment and economic development, and
177.31the county. The corporation and city must also submit the report as provided in section
177.323.195. The report must include:
177.33(1) the adopted development plan and any proposed changes to the development plan;
177.34(2) progress of projects identified in the development plan;
178.1(3) actual costs and financing sources, including the amount paid with state aid under
178.2section 469.46 and required local contributions, of projects completed in the previous two
178.3years by the corporation, city, the county, and the medical business entity;
178.4(4) estimated costs and financing sources for projects to be begun in the next two
178.5years by the corporation, city, the county, and the medical business entity; and
178.6(5) debt service schedules for all outstanding obligations of the city for debt issued
178.7for projects identified in the plan.

178.8    Sec. 5. [469.43] CITY POWERS, DUTIES; AUTHORITY TO ISSUE BONDS.
178.9    Subdivision 1. Port authority powers. The city may exercise the powers of a
178.10port authority under sections 469.048 to 469.068, for the purposes of implementing the
178.11destination medical center development plan.
178.12    Subd. 2. Support to the corporation. The city may provide financial and
178.13administrative support and office and other space to the corporation. The city may
178.14appropriate money of the city to the corporation for its work.
178.15    Subd. 3. City to issue debt. The city may issue general obligation bonds, revenue
178.16bonds, or other obligations, as it determines appropriate, to finance public infrastructure
178.17projects, as provided by chapter 475. Notwithstanding section 475.53 obligations issued
178.18under this section are not subject to the limits on net debt, regardless of their source of
178.19security or payment. Notwithstanding section 475.58 or any other law or charter provision
178.20to the contrary, issuance of obligations under the provisions of this section are not subject
178.21to approval of the electors. The city may pledge any of its revenues, including property
178.22taxes, the taxes authorized by sections 469.44 and 469.45, and the state aid under section
178.23469.46, as security for and to pay the obligations. The city must not issue obligations that
178.24are only payable from or secured by state aid under section 469.46.
178.25    Subd. 4. American made steel. The city must require that a public infrastructure
178.26project use American steel products to the extent practicable. In determining whether it
178.27is practicable, the city may consider the exceptions to the requirement in Public Law
178.28111-5, section 1605.

178.29    Sec. 6. [469.44] CITY TAX AUTHORITY.
178.30    Subdivision 1. Rochester, other local taxes authorized. (a) Notwithstanding
178.31section 477A.016, or any other contrary provision of law, ordinance, or city charter, and in
178.32addition to any taxes the city may impose on these transactions under another statute or
178.33law, the city of Rochester may, by ordinance impose at a rate or rates, determined by the
178.34city, any of the following taxes:
179.1(1) a tax on the gross receipts from the furnishing for consideration of lodging and
179.2related services as defined in section 297A.61, subdivision 3, paragraph (g), clause (2); the
179.3city may choose to impose a differential tax based on the number of rooms in the facility;
179.4(2) a tax on the gross receipts of food and beverages sold primarily for consumption
179.5on the premises by restaurants and places of refreshment that occur in the city of
179.6Rochester; the city may elect to impose the tax in a defined district of the city; and
179.7(3) a tax on the admission receipts to entertainment and recreational facilities, as
179.8defined by ordinance, in the city of Rochester.
179.9(b) The provisions of section 297A.99, subdivisions 4 to 13, govern the
179.10administration, collection, and enforcement of any tax imposed by the city under
179.11paragraph (a).
179.12(c) The proceeds of any taxes imposed under this subdivision, less refunds and costs
179.13of collection, must be used by the city to fund obligations related to public infrastructure
179.14projects contained in the development plan, including any associated financing costs. Any
179.15tax imposed under paragraph (a) expires at the earlier of December 31, 2041, or when the
179.16city council determines that sufficient funds have been raised from the tax plus all other
179.17local funding sources authorized in this article to meet the city obligation for financing a
179.18public infrastructure project contained in the development plan, including any associated
179.19financing costs.
179.20    Subd. 2. General sales tax authority. The city may elect to extend the existing
179.21local sales and use tax under section 11 or to impose an additional rate of up to one-half of
179.22one percent tax on sales and use under section 9.
179.23    Subd. 3. Special abatement rules. (a) If the city or the county elects to use tax
179.24abatement under sections 469.1812 to 469.1815 to finance costs of public infrastructure
179.25projects, the special rules under this subdivision apply.
179.26(b) The limitations under section 469.1813, subdivision 6, do not apply to the city
179.27or the county.
179.28(c) The limitations under section 469.1813, subdivision 8, do not apply and property
179.29taxes abated by the city or the county to finance costs of public infrastructure projects are
179.30not included for purposes of applying section 469.1813, subdivision 8, to the use of tax
179.31abatement for other purposes of the city or the county; however, the total amount of property
179.32taxes abated by the city and the county under this authority must not exceed $87,750,000.
179.33    Subd. 4. Special tax increment financing rules. If the city elects to establish
179.34a redevelopment tax increment financing district or districts within the area of the
179.35destination medical center development district, the requirements of section 469.174,
179.36subdivision 10, restricting the geographic areas that may be designated as a district do not
180.1apply and increments from the district are not required to be spent in accordance with the
180.2requirements of section 469.176, subdivision 4j.

180.3    Sec. 7. [469.45] COUNTY TAX AUTHORITY.
180.4(a) Notwithstanding sections 297A.99, 297A.993, and 477A.016, or any other
180.5contrary provision of law, ordinance, or charter, and in addition to any taxes the county
180.6may impose under another law or statute, the board of commissioners of Olmsted County
180.7may, by resolution, impose a transit tax of up to one quarter of one percent on retail sales
180.8and uses taxable under chapter 297A. The provisions of section 297A.99, subdivisions
180.94 to 13, govern the imposition, administration, collection, and enforcement of the tax
180.10authorized under this paragraph.
180.11(b) The board of commissioners of Olmsted County may, by resolution, levy an
180.12annual wheelage tax of up to $10 on each motor vehicle kept in the county when not in
180.13operation which is subject to annual registration and taxation under chapter 168. The
180.14wheelage tax shall not be imposed on the vehicles exempt from wheelage tax under
180.15section 163.051, subdivision 1. The board by resolution may provide for collection of the
180.16wheelage tax by county officials or it may request that the tax be collected by the state
180.17registrar on behalf of the county. The provisions of section 163.051, subdivisions 2, 2a, 3,
180.18and 7, shall govern the administration, collection, and enforcement of the tax authorized
180.19under this paragraph. The tax authorized under this section is in addition to any tax the
180.20county may be authorized to impose under section 163.051, but until January 1, 2018,
180.21the county tax imposed under this paragraph, in combination with any tax imposed under
180.22section 163.051, must equal the specified rate under section 163.051.
180.23(c) The proceeds of any taxes imposed under this subdivision, less refunds and
180.24costs of collection, must be first used by the county to meet its share of obligations for
180.25financing transit infrastructure related to the public infrastructure projects contained in
180.26the development plan, including any associated financing costs. Revenues collected in
180.27any calendar year in excess of the county obligation to pay for projects contained in the
180.28development plan may be retained by the county and used for funding other transportation
180.29projects, including roads and bridges, airport and transit improvements.
180.30(d) Any taxes imposed under paragraph (a), expire December 31, 2041, or at an
180.31earlier time if approved by resolution of the county board of commissioners. However,
180.32the taxes may not terminate before the county board of commissioners determines that
180.33revenues from these taxes and any other revenue source the county dedicates are sufficient
180.34to pay the county share of transit project costs and associated financing costs under the
180.35adopted development plan.

181.1    Sec. 8. [469.46] STATE INFRASTRUCTURE AID.
181.2    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
181.3have the meanings given them.
181.4(b) "Commissioner" means the commissioner of employment and economic
181.5development.
181.6(c) "Construction projects" means construction of buildings in the city for which the
181.7building permit was issued after June 30, 2013.
181.8(d) "Expenditures" means expenditures made by a medical business entity, including
181.9any affiliated entities, on construction projects for the capital cost of the project, including
181.10but not limited to:
181.11(1) design and predesign, including architectural, engineering, and similar services;
181.12(2) legal, regulatory, and other compliance costs of the project;
181.13(3) land acquisition, demolition of existing improvements, and other site preparation
181.14costs;
181.15(4) construction costs including all materials and supplies of the project; and
181.16(5) equipment and furnishings that are attached to or become part of the real property.
181.17Expenditures exclude supplies and other items with a useful life of less than a year that
181.18are not used or consumed in constructing improvements to real property or are otherwise
181.19chargeable to capital costs.
181.20(e) "Qualified expenditures" has the following meaning. In the first year in which
181.21aid is paid under this section "qualified expenditures" mean the total certified expenditures
181.22since June 30, 2013, through the end of the previous calendar year minus $200,000,000.
181.23For subsequent years "qualified expenditures" mean the certified expenditures for the
181.24previous calendar year.
181.25(f) "Transit costs" means the portions of a public infrastructure project that are for
181.26public transit intended primarily to serve the district, such as transit stations, equipment,
181.27right-of-way, and similar costs.
181.28    Subd. 2. Certification of expenditures. By April 1 of each year, the medical
181.29business entity must certify to the commissioner the amount of expenditures made in the
181.30prior calendar year. The certification must be made in the form that the commissioner
181.31prescribes and include any documentation of and supporting information regarding the
181.32expenditures that the commissioner requires. By August 1 of each year, the commissioner
181.33shall determine the amount of the expenditures for the prior calendar year.
181.34    Subd. 3. General state infrastructure aid. (a) General state infrastructure aid may
181.35not be paid out under this section until total expenditures exceed $200,000,000.
182.1(b) The amount of the general state infrastructure aid for a fiscal year equals the sum
182.2of qualified expenditures, multiplied by 2.75 percent. The maximum amount of general
182.3state aid payable in any year is limited to no more than $30,000,000. If the aid entitlement
182.4for the year exceeds the maximum annual limit, the excess is an aid carryover to later
182.5years. The carryover aid must be paid in the first year in which the aid entitlement for the
182.6current year is less than the maximum annual limit, but only to the extent the carryover,
182.7when added to the current year aid, is less than the maximum annual limit.
182.8(c) If the commissioner determines that the city has made the required matching
182.9local contribution under subdivision 4, the commissioner shall pay to the city the amount
182.10of general state infrastructure aid for the year by September 1.
182.11(d) The city must use general state infrastructure aid it receives under this
182.12subdivision for improvements and other capital costs related to the public infrastructure
182.13project, other than transit costs. The city shall maintain appropriate records to document
182.14the use of the funds under this requirement.
182.15(e) The commissioner, in consultation with the commissioner of management and
182.16budget and representatives of the city and the corporation, shall establish a total limit on
182.17the amount of state aid payable under this subdivision that is sufficient, in combination
182.18with the local contribution, to pay for $455,000,000 of general public infrastructure
182.19projects, plus financing costs.
182.20    Subd. 4. General aid; local matching contribution. In order to qualify for general
182.21state infrastructure aid, the city must enter a written agreement with the commissioner that
182.22requires the city to make a qualifying local matching contribution to pay for $128,000,000
182.23of the cost of public infrastructure projects, including associated financing costs, using
182.24funds other than state aid received under this section. This agreement must provide for the
182.25manner, timing, and amounts of the city contributions, including the city's commitment for
182.26each year. The commissioner and city may agree to amend the agreement at any time in
182.27light of new information or other appropriate factors. The city may enter arrangements
182.28with the county to pay for or otherwise meet the local matching contribution requirement.
182.29    Subd. 5. State transit aid. (a) The city qualifies for state transit aid under this
182.30section if:
182.31(1) the county has elected to impose the transit sales tax under section 469.45 for a
182.32calendar year; and
182.33(2) the county contributes the required local matching contribution under subdivision
182.346 or the city or county have agreed to make an equivalent contribution out of other funds.
182.35(b) The amount of the state transit aid for a fiscal year equals the sum of qualified
182.36expenditures, as certified by the commissioner for the prior calendar year, multiplied
183.1by 0.75 percent, reduced by the amount of the local contribution under subdivision 6.
183.2The maximum amount of state transit aid payable in any year is limited to no more than
183.3$7,500,000. If the aid entitlement for the year exceeds the maximum annual limit, the
183.4excess is an aid carryover to later years. The carryover aid must be paid in the first year
183.5in which the aid entitlement for the current year is less than the maximum annual limit,
183.6but only to the extent the carryover, when added to the current year aid, is less than the
183.7maximum annual limit.
183.8    (c) The commissioner, in consultation with the commissioner of management and
183.9budget and representatives of the city and the corporation, shall establish a total limit on
183.10the amount of state aid payable under this subdivision that is sufficient, in combination
183.11with the local contribution, to pay for $116,000,000 of general public infrastructure
183.12projects, plus financing costs.
183.13    Subd. 6. Transit aid; local matching contribution. (a) The required local matching
183.14contribution for state transit aid equals the lesser of (1) 40 percent of the state transit aid
183.15under subdivision 5, or (2) the amount that would be raised by a 0.15 percent sales tax
183.16imposed by the county in the prior calendar year. The county may impose the sales tax or
183.17the wheelage tax under section 469.45 to meet this obligation.
183.18(b) If the county elects not to impose any of the taxes authorized under section 469.45,
183.19the county or city or both may agree to make the local contribution out of other available
183.20funds, other than state aid payable under this section. The commissioner of revenue shall
183.21estimate the required amount and certify it to the commissioner, city, and county.
183.22    Subd. 7. Termination. No aid may be paid under this section after fiscal year 2041.
183.23    Subd. 8. Appropriation. An amount sufficient to pay the state general infrastructure
183.24and state transit aid authorized under this section is appropriated to the commissioner
183.25from the general fund.

183.26    Sec. 9. Laws 1998, chapter 389, article 8, section 43, subdivision 1, is amended to read:
183.27    Subdivision 1. Sales and use taxes authorized. (a) Notwithstanding Minnesota
183.28Statutes, section 477A.016, or any other contrary provision of law, ordinance, or city
183.29charter, upon termination of the taxes authorized under Laws 1992, chapter 511, article
183.308, section 33, subdivision 1, and if approved by the voters of the city at a general or
183.31special election held within one year of the date of final enactment of this act, the city of
183.32Rochester may, by ordinance, impose an additional sales and use tax of up to one-half
183.33of one percent. The provisions of Minnesota Statutes, section 297A.48, 297A.99 govern
183.34the imposition, administration, collection, and enforcement of the tax authorized under
183.35this subdivision paragraph.
184.1    (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
184.2other contrary provision of law, ordinance, or charter, the city of Rochester may, by
184.3ordinance, impose an additional sales and use tax of up to one half of one percent. The
184.4provisions of Minnesota Statutes, section 297A.99, subdivisions 1 and 4 to 13, govern
184.5the imposition, administration, collection, and enforcement of the tax authorized under
184.6this paragraph.

184.7    Sec. 10. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by
184.8Laws 2005, First Special Session chapter 3, article 5, section 28, and Laws 2011, First
184.9Special Session chapter 7, article 4, section 5, is amended to read:
184.10    Subd. 3. Use of revenues. (a) Revenues received from the taxes authorized by
184.11subdivisions 1, paragraph (a), and 2 must be used by the city to pay for the cost of
184.12collecting and administering the taxes and to pay for the following projects:
184.13    (1) transportation infrastructure improvements including regional highway and
184.14airport improvements;
184.15    (2) improvements to the civic center complex;
184.16    (3) a municipal water, sewer, and storm sewer project necessary to improve regional
184.17ground water quality; and
184.18    (4) construction of a regional recreation and sports center and other higher education
184.19facilities available for both community and student use.
184.20    (b) The total amount of capital expenditures or bonds for projects listed in paragraph
184.21(a) that may be paid from the revenues raised from the taxes authorized in this section
184.22may not exceed $111,500,000. The total amount of capital expenditures or bonds for the
184.23project in clause (4) that may be paid from the revenues raised from the taxes authorized
184.24in this section may not exceed $28,000,000.
184.25(c) In addition to the projects authorized in paragraph (a) and not subject to the
184.26amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an
184.27election under subdivision 5, paragraph (c), use the revenues received from the taxes and
184.28bonds authorized in this section to pay the costs of or bonds for the following purposes:
184.29(1) $17,000,000 for capital expenditures and bonds for the following Olmsted
184.30County transportation infrastructure improvements:
184.31(i) County State Aid Highway 34 reconstruction;
184.32(ii) Trunk Highway 63 and County State Aid Highway 16 interchange;
184.33(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22 interchange;
184.34(iv) widening of County State Aid Highway 22 West Circle Drive; and
184.35(v) 60th Avenue Northwest corridor preservation;
185.1(2) $30,000,000 for city transportation projects including:
185.2(i) Trunk Highway 52 and 65th Street interchange;
185.3(ii) NW transportation corridor acquisition;
185.4(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;
185.5(iv) Trunk Highway 14 and Trunk Highway 63 intersection;
185.6(v) Southeast transportation corridor acquisition;
185.7(vi) Rochester International Airport expansion; and
185.8(vii) a transit operations center bus facility;
185.9(3) $14,000,000 for the University of Minnesota Rochester academic and
185.10complementary facilities;
185.11(4) $6,500,000 for the Rochester Community and Technical College/Winona State
185.12University career technical education and science and math facilities;
185.13(5) $6,000,000 for the Rochester Community and Technical College regional
185.14recreation facilities at University Center Rochester;
185.15(6) $20,000,000 for the Destination Medical Community Initiative;
185.16(7) $8,000,000 for the regional public safety and 911 dispatch center facilities;
185.17(8) $20,000,000 for a regional recreation/senior center;
185.18(9) $10,000,000 for an economic development fund; and
185.19(10) $8,000,000 for downtown infrastructure.
185.20(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1
185.21and 2 may be used to fund transportation improvements related to a railroad bypass that
185.22would divert traffic from the city of Rochester.
185.23(e) The city shall use $5,000,000 of the money allocated to the purpose in paragraph
185.24(c), clause (9), for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin,
185.25Eyota, Kasson, Mantorville, Oronoco, Pine Island, Plainview, St. Charles, Stewartville,
185.26Zumbrota, Spring Valley, West Concord, and Hayfield for economic development projects
185.27that these communities would fund through their economic development authority or
185.28housing and redevelopment authority.
185.29(e) Notwithstanding Minnesota Statutes, section 297A.99, subdivisions 2 and 3, if
185.30the city decides to extend the taxes in subdivisions 1, paragraph (a), and 2, as allowed
185.31under subdivision 5, paragraph (c), the city must use any amount in excess of the amount
185.32necessary to meet obligations under paragraphs (a) to (c) from those taxes to fund
185.33obligations, including associated financing costs, related to public infrastructure projects
185.34in the development plan adopted under Minnesota Statutes, section 469.42.
185.35(f) Revenues from the tax under subdivision 1, paragraph (b), must be used to fund
185.36obligations, including associated financing costs, related to the public infrastructure
186.1projects contained in the development plan adopted by the city under Minnesota Statutes,
186.2section 469.42.

186.3    Sec. 11. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by
186.4Laws 2005, First Special Session chapter 3, article 5, section 30, and Laws 2011, First
186.5Special Session chapter 7, article 4, section 7, is amended to read:
186.6    Subd. 5. Termination of taxes. (a) The taxes imposed under subdivisions 1 and 2
186.7expire at the later of (1) December 31, 2009, or (2) when the city council determines that
186.8sufficient funds have been received from the taxes to finance the first $71,500,000 of capital
186.9expenditures and bonds for the projects authorized in subdivision 3, including the amount to
186.10prepay or retire at maturity the principal, interest, and premium due on any bonds issued for
186.11the projects under subdivision 4, unless the taxes are extended as allowed in paragraph (b).
186.12Any funds remaining after completion of the project and retirement or redemption of the
186.13bonds shall also be used to fund the projects under subdivision 3. The taxes imposed under
186.14subdivisions 1 and 2 may expire at an earlier time if the city so determines by ordinance.
186.15    (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
186.16other contrary provision of law, ordinance, or city charter, the city of Rochester may, by
186.17ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009,
186.18if approved by the voters of the city at a special election in 2005 or the general election in
186.192006. The question put to the voters must indicate that an affirmative vote would allow
186.20up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000
186.21of bonds to be issued above the amount authorized in the June 23, 1998, referendum for
186.22the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are
186.23extended under this paragraph, the taxes expire when the city council determines that
186.24sufficient funds have been received from the taxes to finance the projects and to prepay
186.25or retire at maturity the principal, interest, and premium due on any bonds issued for the
186.26projects under subdivision 4. Any funds remaining after completion of the project and
186.27retirement or redemption of the bonds may be placed in the general fund of the city.
186.28(c) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
186.29other contrary provision of law, ordinance, or city charter, the city of Rochester may,
186.30by ordinance, extend the taxes authorized in subdivisions 1, paragraph (a), and 2 up to
186.31December 31, 2041, provided that all additional revenues above those necessary to fund
186.32the projects and associated financing costs listed in subdivision 3, paragraphs (a) to (e),
186.33are committed to fund public infrastructure projects contained in the development plan
186.34adopted under Minnesota Statutes, section 469.42, including all associated financing
186.35costs; otherwise the taxes terminate when beyond the date the city council determines
187.1that sufficient funds have been received from the taxes to finance $111,500,000 of the
187.2expenditures and bonds for the projects authorized in subdivision 3, paragraph (a)
187.3 paragraphs (a) to (e), plus an amount equal to the costs of issuance of the bonds and
187.4including the amount to prepay or retire at maturity the principal, interest, and premiums
187.5due on any bonds issued for the projects under subdivision 4, paragraph (a), if approved
187.6by the voters of the city at the general election in 2012. If the election to authorize the
187.7additional $139,500,000 of bonds plus an amount equal to the costs of the issuance of the
187.8bonds is placed on the general election ballot in 2012, the city may continue to collect the
187.9taxes authorized in subdivisions 1 and 2 until December 31, 2012. The question put to
187.10the voters must indicate that an affirmative vote would allow sales tax revenues be raised
187.11for an extended period of time and an additional $139,500,000 of bonds plus an amount
187.12equal to the costs of issuance of the bonds, to be issued above the amount authorized in
187.13the previous elections required under paragraphs (a) and (b) for the projects and amounts
187.14specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended
187.15under this paragraph, the taxes expire when the city council determines that $139,500,000
187.16has been received from the taxes to finance the projects plus an amount sufficient to
187.17prepay or retire at maturity the principal, interest, and premium due on any bonds issued
187.18for the projects under subdivision 4, including any bonds issued to refund the bonds. Any
187.19funds remaining after completion of the projects and retirement or redemption of the
187.20bonds may be placed in the general fund of the city.
187.21(d) The tax imposed under subdivision 1, paragraph (b), expires at the earlier of
187.222041, or when the city council determines that sufficient funds have been raised from the
187.23tax plus all other city funding sources authorized in this article to meet the city obligation
187.24for financing the public infrastructure projects contained in the development plan adopted
187.25under Minnesota Statutes, section 469.42, including all associated financing costs.

187.26    Sec. 12. ROCHESTER AREA DEVELOPMENT AND TRANSPORTATION
187.27IMPACTS STUDY.
187.28(a) From funds appropriated by law for the purposes of this section, the commissioner
187.29of transportation shall in consultation with the Rochester-Olmsted Council of Governments
187.30enter into an agreement with a consultant to perform a study of economic development
187.31and transportation impacts in the Rochester metropolitan area, including the feasibility of
187.32high-speed rail between Rochester and the seven-county metropolitan area. To be eligible,
187.33a consultant must have experience and expertise in a majority of the following: economics,
187.34economic development, demography, urban planning, engineering, and transportation.
187.35(b) At a minimum, the study under this section must:
188.1(1) utilize at least a 20-year planning horizon;
188.2(2) perform a comprehensive planning assessment of key transportation
188.3infrastructure throughout the Rochester metropolitan area based on (i) long-range
188.4transportation plans developed by the Rochester-Olmsted Council of Governments, and
188.5(ii) expected and potential economic development patterns;
188.6(3) analyze major roadways across all jurisdictions including, but not limited to,
188.7trunk highways; county highways; and arterial city streets; and interconnections with other
188.8modes in conjunction with ongoing rail and airports studies;
188.9(4) analyze the feasibility of a high-speed rail connection between Rochester and the
188.10Mall of America via Minnesota State Highway 77 with connections to the Minneapolis-St.
188.11Paul International Airport and the Union Depot in St. Paul;
188.12(5) to the extent feasible, take into account available data, forecasts, available
188.13transportation demand modeling information, and transportation impacts of major
188.14economic initiatives and proposals including, but not limited to, expansion of the Mayo
188.15Clinic; and
188.16(6) provide scenarios and identify revenue shortfalls to address both short-term and
188.17long-term deficiencies in safety, mobility, congestion, and transportation infrastructure
188.18condition.
188.19(c) By January 15, 2014, the commissioner shall provide an electronic copy of the
188.20study to the chairs and ranking minority members of the legislative committees with
188.21jurisdiction over transportation policy and finance, as provided in Minnesota Statutes,
188.22section 174.02, subdivision 8.

188.23    Sec. 13. EFFECTIVE DATE.
188.24Except as otherwise provided, this article is effective the day after the governing
188.25body of the city of Rochester and its chief clerical officer timely comply with Minnesota
188.26Statutes, section 645.021, subdivisions 2 and 3.


188.29    Section 1. [116C.992] SILICA SAND MINING ACCOUNT.
188.30    A silica sand mining account is created in the special revenue fund. Money in the
188.31account is available for development of model standards, technical assistance to counties
188.32and other governments, other assistance to counties, and other purposes as appropriated
188.33by law.

189.1    Sec. 2. Minnesota Statutes 2012, section 126C.48, subdivision 8, is amended to read:
189.2    Subd. 8. Taconite payment and other reductions. (1) Reductions in levies
189.3pursuant to subdivision 1 must be made prior to the reductions in clause (2).
189.4(2) Notwithstanding any other law to the contrary, districts that have revenue
189.5pursuant to sections 298.018; 298.225; 298.24 to 298.28, except an amount distributed
189.6under sections 298.26; 298.28, subdivision 4, paragraphs (c), clause (ii), and (d); 298.34
189.7to 298.39; 298.391 to 298.396; 298.405; 477A.15; and any law imposing a tax upon
189.8severed mineral values must reduce the levies authorized by this chapter and chapters
189.9120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A by 95 percent of the sum of the
189.10previous year's revenue specified under this clause and the amount attributable to the same
189.11production year distributed to the cities and townships within the school district under
189.12section 298.28, subdivision 2, paragraph (c).
189.13(3) The amount of any voter approved referendum, facilities down payment, and
189.14debt levies shall not be reduced by more than 50 percent under this subdivision. In
189.15administering this paragraph, the commissioner shall first reduce the nonvoter approved
189.16levies of a district; then, if any payments, severed mineral value tax revenue or recognized
189.17revenue under paragraph (2) remains, the commissioner shall reduce any voter approved
189.18referendum levies authorized under section 126C.17; then, if any payments, severed
189.19mineral value tax revenue or recognized revenue under paragraph (2) remains, the
189.20commissioner shall reduce any voter approved facilities down payment levies authorized
189.21under section 123B.63 and then, if any payments, severed mineral value tax revenue or
189.22recognized revenue under paragraph (2) remains, the commissioner shall reduce any
189.23voter approved debt levies.
189.24(4) Before computing the reduction pursuant to this subdivision of the health and
189.25safety levy authorized by sections 123B.57 and 126C.40, subdivision 5, the commissioner
189.26shall ascertain from each affected school district the amount it proposes to levy under
189.27each section or subdivision. The reduction shall be computed on the basis of the amount
189.28so ascertained.
189.29(5) To the extent the levy reduction calculated under paragraph (2) exceeds the
189.30limitation in paragraph (3), an amount equal to the excess must be distributed from the
189.31school district's distribution under sections 298.225, 298.28, and 477A.15 in the following
189.32year to the cities and townships within the school district in the proportion that their
189.33taxable net tax capacity within the school district bears to the taxable net tax capacity of
189.34the school district for property taxes payable in the year prior to distribution. No city or
189.35township shall receive a distribution greater than its levy for taxes payable in the year prior
189.36to distribution. The commissioner of revenue shall certify the distributions of cities and
190.1towns under this paragraph to the county auditor by September 30 of the year preceding
190.2distribution. The county auditor shall reduce the proposed and final levies of cities and
190.3towns receiving distributions by the amount of their distribution. Distributions to the cities
190.4and towns shall be made at the times provided under section 298.27.
190.5EFFECTIVE DATE.This section is effective for levies certified in 2013 and later.

190.6    Sec. 3. [297J.01] DEFINITIONS.
190.7    Subdivision 1. Scope. Unless otherwise defined in this chapter, or unless the
190.8context clearly indicates otherwise, the terms used in this chapter have the meaning given
190.9them in this section. The definitions in this section are for tax administration purposes
190.10and apply to this chapter.
190.11    Subd. 2. Commissioner. "Commissioner" means the commissioner of revenue or a
190.12person to whom the commissioner has delegated functions.
190.13    Subd. 3. Mining. "Mining" means excavating and mining of silica sand by any
190.14process, including digging, excavating, drilling, blasting, tunneling, dredging, stripping,
190.15or by shaft.
190.16    Subd. 4. Person. "Person" means an individual, fiduciary, estate, trust, partnership,
190.17or corporation.
190.18    Subd. 5. Processing. "Processing" means washing, cleaning, screening, crushing,
190.19filtering, sorting, stockpiling, and storing silica sand at the mining site or at any other site.
190.20    Subd. 6. Qualified processor. "Qualified processor" means any person who
190.21operates a mining and processing facility at the same location and uses means to
190.22reasonably prevent silica sand particles from becoming airborne. These methods include,
190.23but are not limited to, prohibiting outdoor storage piles, the use of a slurry pipeline to
190.24carry aggregate material into the washing facility, completely enclosing the washing
190.25facility, and any other means necessary or reasonable to significantly prevent silica sand
190.26particles from becoming airborne.
190.27    Subd. 7. Silica sand. "Silica sand" means well-rounded, sand-sized grains of quartz
190.28(silica dioxide) with very few impurities in terms of other minerals. Specifically, silica
190.29sand for the purpose of this section is commercially valuable for use in the hydraulic
190.30fracturing of shale to obtain oil and natural gas. Silica sand does not include common
190.31rock, stone, aggregate, gravel, sand with a low quartz level, or silica compounds recovered
190.32as a by-product of metallic mining.
190.33    Subd. 8. Temporary storage. "Temporary storage" means the storage of stockpiles
190.34of silica sand that have been transported and are awaiting further transport or processing.
190.35    Subd. 9. Ton. "Ton" means 2,000 pounds.
191.1    Subd. 10. Transporting. "Transporting" means hauling silica sand, by any carrier:
191.2    (1) from the mining site to a processing or transfer site; or
191.3    (2) from a processing or storage site to a rail, barge, or transfer site for shipment.
191.4    Subd. 11. Year. "Year" means a calendar year.
191.5EFFECTIVE DATE.This section is effective the day following final enactment.

191.6    Sec. 4. [297J.02] TAX IMPOSED.
191.7    Subdivision 1. Mining and storage tax; rate. A tax is hereby imposed on any
191.8person who: (1) mines silica sand from within the state; or (2) transports silica sand into
191.9and stores the sand in the state. The rate of tax imposed is 55 cents per cubic yard of silica
191.10sand mined or stored. The volume includes any material removed from the extraction site
191.11prior to washing. For any person mining silica sand in a county that imposes the aggregate
191.12tax authorized under section 298.75, subdivisions 2 and 3, a credit equal to the amount of
191.13aggregate tax paid to the county is applied against the tax due under this section.
191.14    Subd. 2. Processing tax; rate. (a) A tax is hereby imposed on any person engaged
191.15in washing or processing silica sand within the state. The rate of tax imposed is three
191.16percent of the market value of the silica sand processed. Market value is determined based
191.17on the sale price of the processed silica sand.
191.18(b) Notwithstanding paragraph (a), the rate of tax imposed on a qualified processor
191.19is one percent of the market value of the silica sand processed in the state.
191.20    Subd. 3. Exemption. A person is exempt from the mining tax in subdivision 1 if the
191.21person transports less than ten percent of the finished product on public roads.
191.22    Subd. 4. Report and remittance. Taxes imposed by this section are due and
191.23payable to the commissioner when the fracturing sand return is required to be filed.
191.24Persons mining or processing fracturing sand must file their monthly fracturing sand
191.25reports showing the amount of fracturing sand extracted or processed during the month
191.26reported on a form prescribed by the commissioner. Reports of extraction and processing
191.27fracturing sand and taxes imposed under this section must be filed with the commissioner
191.28on or before the 20th day of the month following the close of the previous calendar month.
191.29    Subd. 5. Proceeds of taxes. Revenue received from taxes under this chapter, as
191.30well as all related penalties, interest, fees, and miscellaneous sources of revenue, must be
191.31deposited by the commissioner in the state treasury and credited as follows:
191.32(1) $2,000,000 in fiscal year 2014, $2,690,000 in fiscal year 2015, and $2,000,000 in
191.33each fiscal year thereafter must be credited to the silica sand mining account in the special
191.34revenue fund under section 116C.992; and
192.1(2) the balance of revenues derived from taxes, penalties, interest, fees, and
192.2miscellaneous sources of income are credited to the general fund.
192.3    Subd. 6. Personal debt. The tax imposed by this section, and interest and penalties
192.4imposed with respect to it, are a personal debt of the person required to file a return from
192.5the time the liability for it arises, irrespective of when the time for payment of the liability
192.6occurs. The debt must, in the case of the executor or administrator of the estate of a
192.7decedent and in the case of a fiduciary, be that of the person in the person's official or
192.8fiduciary capacity only unless the person has voluntarily distributed the assets held in that
192.9capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which
192.10event the person is personally liable for any deficiency.
192.11    Subd. 7. Refunds; appropriation. A person who has, under this chapter, paid
192.12to the commissioner an amount of tax for a period in excess of the amount legally due
192.13for that period, may file with the commissioner a claim for a refund of the excess. The
192.14amount necessary to pay the refunds under this subdivision is appropriated from the
192.15general fund to the commissioner.
192.16EFFECTIVE DATE.This section is effective the day following final enactment

192.17    Sec. 5. [297J.03] REGISTRATION; REPORTING; FILING REQUIREMENTS.
192.18    Subdivision 1. Registration. A person who extracts or processes silica sand within
192.19the state must register with the commissioner, on a form prescribed by the commissioner,
192.20for a silica sand identification number. The commissioner shall issue the applicant a
192.21registration number. A registration number is not assignable and is valid only for the
192.22person in whose name it is issued.
192.23    Subd. 2. Reporting. (a) A person who extracts or processes silica sand in this state
192.24must file a report showing the amount of silica sand extracted or processed monthly on or
192.25before the 20th day of the month following the month in which the silica sand was extracted
192.26or processed. The commissioner may inspect the premises, books, and records, of a person
192.27subject to the silica sand tax during the normal business hours of the person extracting or
192.28processing silica sand. A person violating this section is guilty of a misdemeanor.
192.29    (b) A person shall keep at each place of business complete and accurate records
192.30for that place of business, including records of silica sand extracted or processed in the
192.31state. Scale records, sales records, or any other records of tons of silica sand extracted
192.32or processed in this state, produced or maintained by the person extracting or processing
192.33silica sand, must be retained by the person extracting or processing silica sand in this
192.34state. Books, records, invoices, and other papers and documents required by this section
192.35must be kept for a period of at least 3-1/2 years after the date of the monthly silica sand
193.1report unless the commissioner of revenue authorizes, in writing, their destruction or
193.2disposal at an earlier date.
193.3    Subd. 3. Extensions. If, in the commissioner's judgment, good cause exists, the
193.4commissioner may extend the time for filing reports under this section and silica sand
193.5returns under section 297J.02 and for paying taxes under section 297J.02 for not more
193.6than six months.
193.7EFFECTIVE DATE.This section is effective the day following final enactment.

193.8    Sec. 6. [297J.04] LIMITATIONS ON TIME FOR ASSESSMENT OF TAX.
193.9    Subdivision 1. Assessment. Except as otherwise provided in this chapter, the
193.10amount of taxes assessable must be assessed within 3-1/2 years after the date the return is
193.11filed, whether or not the return is filed on or after the date prescribed. A return must not be
193.12treated as filed until it is in processible form. A return is in processible form if it is filed
193.13on a permitted form and contains sufficient data to identify the taxpayer and permit the
193.14mathematical verification of the tax liability shown on the return. For purposes of this
193.15section, a return filed before the last day prescribed by law for filing is considered to
193.16be filed on the last day.
193.17    Subd. 2. False or fraudulent return. Notwithstanding subdivision 1, the tax may be
193.18assessed at any time if a false or fraudulent return is filed or if a taxpayer fails to file a return.
193.19    Subd. 3. Omission in excess of 25 percent. Additional taxes may be assessed
193.20within 6-1/2 years after the due date of the return or the date the return was filed,
193.21whichever is later, if the taxpayer omits from a return taxes in excess of 25 percent of
193.22the taxes reported in the return.
193.23    Subd. 4. Time limit on refunds. Unless otherwise provided in this chapter, a claim
193.24for a refund of an overpayment of tax must be filed within 3-1/2 years from the date
193.25prescribed for filing the silica sand tax return. Interest on refunds must be computed at
193.26the rate specified in section 270C.405 from the date of payment to the date the refund is
193.27paid or credited. For purposes of this subdivision, the date of payment is the later of the
193.28date the tax was finally due or was paid.
193.29    Subd. 5. Bankruptcy; suspension of time. The time during which a tax must be
193.30assessed or collection proceedings begun is suspended during the period from the date of a
193.31filing of a petition in bankruptcy until 30 days after either: (1) notice to the commissioner
193.32that the bankruptcy proceedings have been closed or dismissed; or (2) the automatic stay
193.33has been ended or has expired, whichever occurs first. The suspension of the statute of
193.34limitations under this subdivision applies to the person the petition in bankruptcy is filed
193.35against, and all other persons who may also be wholly or partially liable for the tax.
194.1    Subd. 6. Extension agreement. If, before the expiration of time prescribed in
194.2subdivisions 1 and 4 for the assessment of tax or the filing of a claim for refund, both the
194.3commissioner and the taxpayer have consented in writing to the assessment or filing of a
194.4claim for refund after that time, the tax may be assessed or the claim for refund filed at any
194.5time before the expiration of the agreed upon period. The period may be extended by later
194.6agreements in writing before the expiration of the period previously agreed upon.
194.7EFFECTIVE DATE.This section is effective the day following final enactment

194.8    Sec. 7. [297J.05] CIVIL PENALTIES.
194.9    Subdivision 1. Penalty for failure to pay tax. If a tax is not paid within the time
194.10specified for payment, a penalty is added to the amount required to be shown as tax. The
194.11penalty is five percent of the unpaid tax if the failure is for not more than 30 days, with
194.12an additional penalty of five percent of the amount of tax remaining unpaid during each
194.13additional 30 days or fraction of 30 days during which the failure continues, not exceeding
194.1415 percent in the aggregate. For purposes of this subdivision, if the taxpayer has not filed
194.15a return, the time specified for payment is the final date a return should have been filed.
194.16    Subd. 2. Penalty for failure to make and file return. If a taxpayer fails to make
194.17and file a return within the time prescribed or an extension, a penalty is added to the tax.
194.18The penalty is five percent of the amount of tax not paid on or before the date prescribed
194.19for payment of the tax.
194.20    Subd. 3. Penalty for intentional disregard of law or rules. If part of an additional
194.21assessment is due to negligence or intentional disregard of the provisions of this chapter or
194.22rules of the commissioner of revenue (but without intent to defraud), there is added to the
194.23tax an amount equal to ten percent of the additional assessment.
194.24    Subd. 4. Penalty for false or fraudulent return; evasion. If a person files a false
194.25or fraudulent return, or attempts in any manner to evade or defeat a tax or payment of
194.26tax, there is imposed on the person a penalty equal to 50 percent of the tax found due
194.27for the period to which the return related, less amounts paid by the person on the basis
194.28of the false or fraudulent return.
194.29    Subd. 5. Penalty for repeated failures to file returns or pay taxes. If there is a
194.30pattern by a person of repeated failures to timely file returns or timely pay taxes, and
194.31written notice is given that a penalty will be imposed if such failures continue, a penalty
194.32of 25 percent of the amount of tax not timely paid as a result of each such subsequent
194.33failure is added to the tax. The penalty can be abated under the abatement authority in
194.34section 270C.34.
195.1    Subd. 6. Payment of penalties. The penalties imposed by this section must be
195.2collected and paid in the same manner as taxes. These penalties are in addition to criminal
195.3penalties imposed by this chapter.
195.4EFFECTIVE DATE.This section is effective the day following final enactment.

195.5    Sec. 8. [297J.07] INTEREST.
195.6    Subdivision 1. Rate. If an interest assessment is required under this section, interest
195.7is computed at the rate specified in section 270C.40.
195.8    Subd. 2. Late payment. If a tax is not paid within the time specified by law for
195.9payment, the unpaid tax bears interest from the date the tax should have been paid until
195.10the date the tax is paid.
195.11    Subd. 3. Extensions. If an extension of time for payment has been granted, interest
195.12must be paid from the date the payment should have been made if no extension had been
195.13granted, until the date the tax is paid.
195.14    Subd. 4. Additional assessments. If a taxpayer is liable for additional taxes because
195.15of a redetermination by the commissioner, or for any other reason, the additional taxes
195.16bear interest from the time the tax should have been paid, without regard to any extension
195.17allowed, until the date the tax is paid.
195.18    Subd. 5. Erroneous refunds. In the case of an erroneous refund, interest accrues
195.19from the date the refund was paid unless the erroneous refund results from a mistake of
195.20the department, then no interest or penalty is imposed unless the deficiency assessment is
195.21not satisfied within 60 days of the order.
195.22    Subd. 6. Interest on judgments. Notwithstanding section 549.09, if judgment is
195.23entered in favor of the commissioner with regard to any tax, the judgment bears interest
195.24at the rate specified in section 270C.40 from the date the judgment is entered until the
195.25date of payment.
195.26    Subd. 7. Interest on penalties. A penalty imposed under section 297J.05,
195.27subdivision 1, 2, 3, 4, or 5, bears interest from the date the return or payment was required
195.28to be filed or paid, including any extensions, to the date of payment of the penalty.
195.29EFFECTIVE DATE.This section is effective the day following final enactment.

195.30    Sec. 9. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
195.31    Subd. 3. Occupation tax; other ores. Every person engaged in the business of
195.32mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
195.33taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
196.1in this subdivision. For purposes of this subdivision, mining includes the application
196.2of hydrometallurgical processes. The tax is determined in the same manner as the tax
196.3imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17,
196.4subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must be
196.5computed by applying to taxable income the rate of 2.45 percent equal to one-half of
196.6the rate that applies under section 290.06, subdivision 1, for the taxable year. A person
196.7subject to occupation tax under this section shall apportion its net income on the basis of
196.8the percentage obtained by taking the sum of:
196.9(1) 75 percent of the percentage which the sales made within this state in connection
196.10with the trade or business during the tax period are of the total sales wherever made in
196.11connection with the trade or business during the tax period;
196.12(2) 12.5 percent of the percentage which the total tangible property used by the
196.13taxpayer in this state in connection with the trade or business during the tax period is of
196.14the total tangible property, wherever located, used by the taxpayer in connection with the
196.15trade or business during the tax period; and
196.16(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
196.17in this state or paid in respect to labor performed in this state in connection with the trade
196.18or business during the tax period are of the taxpayer's total payrolls paid or incurred in
196.19connection with the trade or business during the tax period.
196.20The tax is in addition to all other taxes.
196.21EFFECTIVE DATE.This section is effective the day following final enactment.

196.22    Sec. 10. Minnesota Statutes 2012, section 298.01, subdivision 4, is amended to read:
196.23    Subd. 4. Occupation tax; iron ore; taconite concentrates. A person engaged in
196.24the business of mining or producing of iron ore, taconite concentrates or direct reduced ore
196.25in this state shall pay an occupation tax to the state of Minnesota. The tax is determined
196.26in the same manner as the tax imposed by section 290.02, except that sections 290.05,
196.27subdivision 1 , clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not apply,
196.28and the occupation tax shall be computed by applying to taxable income the rate of 2.45
196.29 percent equal to one-half of the rate that applies under section 290.06, subdivision 1, for
196.30the taxable year. A person subject to occupation tax under this section shall apportion its
196.31net income on the basis of the percentage obtained by taking the sum of:
196.32(1) 75 percent of the percentage which the sales made within this state in connection
196.33with the trade or business during the tax period are of the total sales wherever made in
196.34connection with the trade or business during the tax period;
197.1(2) 12.5 percent of the percentage which the total tangible property used by the
197.2taxpayer in this state in connection with the trade or business during the tax period is of
197.3the total tangible property, wherever located, used by the taxpayer in connection with the
197.4trade or business during the tax period; and
197.5(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
197.6in this state or paid in respect to labor performed in this state in connection with the trade
197.7or business during the tax period are of the taxpayer's total payrolls paid or incurred in
197.8connection with the trade or business during the tax period.
197.9The tax is in addition to all other taxes.
197.10EFFECTIVE DATE.This section is effective for taxable years beginning after
197.11December 31, 2012.

197.12    Sec. 11. Minnesota Statutes 2012, section 298.227, as amended by Laws 2013, chapter
197.133, section 17, is amended to read:
197.14298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
197.15    (a) An amount equal to that distributed pursuant to each taconite producer's taxable
197.16production and qualifying sales under section 298.28, subdivision 9a, shall be held by
197.17the Iron Range Resources and Rehabilitation Board in a separate taconite economic
197.18development fund for each taconite and direct reduced ore producer. Money from the
197.19fund for each producer shall be released by the commissioner after review by a joint
197.20committee consisting of an equal number of representatives of the salaried employees and
197.21the nonsalaried production and maintenance employees of that producer. The District 11
197.22director of the United States Steelworkers of America, on advice of each local employee
197.23president, shall select the employee members. In nonorganized operations, the employee
197.24committee shall be elected by the nonsalaried production and maintenance employees. The
197.25review must be completed no later than six months after the producer presents a proposal
197.26for expenditure of the funds to the committee. The funds held pursuant to this section may
197.27be released only for workforce development and associated public facility improvement,
197.28or for acquisition of plant and stationary mining equipment and facilities for the producer
197.29or for research and development in Minnesota on new mining, or taconite, iron, or steel
197.30production technology, but only if the producer provides a matching expenditure equal to
197.31the amount of the distribution to be used for the same purpose of at least 50 percent of
197.32the distribution based on 14.7 cents per ton beginning with distributions in 2002 2014.
197.33Effective for proposals for expenditures of money from the fund beginning May 26, 2007,
197.34the commissioner may not release the funds before the next scheduled meeting of the
198.1board. If a proposed expenditure is not approved by the board, the funds must be deposited
198.2in the Taconite Environmental Protection Fund under sections 298.222 to 298.225. If a
198.3producer uses money which has been released from the fund prior to May 26, 2007 to
198.4procure haulage trucks, mobile equipment, or mining shovels, and the producer removes
198.5the piece of equipment from the taconite tax relief area defined in section 273.134 within
198.6ten years from the date of receipt of the money from the fund, a portion of the money
198.7granted from the fund must be repaid to the taconite economic development fund. The
198.8portion of the money to be repaid is 100 percent of the grant if the equipment is removed
198.9from the taconite tax relief area within 12 months after receipt of the money from the fund,
198.10declining by ten percent for each of the subsequent nine years during which the equipment
198.11remains within the taconite tax relief area. If a taconite production facility is sold after
198.12operations at the facility had ceased, any money remaining in the fund for the former
198.13producer may be released to the purchaser of the facility on the terms otherwise applicable
198.14to the former producer under this section. If a producer fails to provide matching funds
198.15for a proposed expenditure within six months after the commissioner approves release
198.16of the funds, the funds are available for release to another producer in proportion to the
198.17distribution provided and under the conditions of this section. Any portion of the fund
198.18which is not released by the commissioner within one year of its deposit in the fund shall
198.19be divided between the taconite environmental protection fund created in section 298.223
198.20and the Douglas J. Johnson economic protection trust fund created in section 298.292 for
198.21placement in their respective special accounts. Two-thirds of the unreleased funds shall be
198.22distributed to the taconite environmental protection fund and one-third to the Douglas J.
198.23Johnson economic protection trust fund.
198.24    (b)(i) Notwithstanding the requirements of paragraph (a), setting the amount of
198.25distributions and the review process, an amount equal to ten cents per taxable ton of
198.26production in 2007, for distribution in 2008 only, that would otherwise be distributed
198.27under paragraph (a), may be used for a loan or grant for the cost of providing for a
198.28value-added wood product facility located in the taconite tax relief area and in a county
198.29that contains a city of the first class. This amount must be deducted from the distribution
198.30under paragraph (a) for which a matching expenditure by the producer is not required. The
198.31granting of the loan or grant is subject to approval by the board. If the money is provided
198.32as a loan, interest must be payable on the loan at the rate prescribed in section 298.2213,
198.33subdivision 3 . (ii) Repayments of the loan and interest, if any, must be deposited in the
198.34taconite environment protection fund under sections 298.222 to 298.225. If a loan or
198.35grant is not made under this paragraph by July 1, 2012, the amount that had been made
198.36available for the loan under this paragraph must be transferred to the taconite environment
199.1protection fund under sections 298.222 to 298.225. (iii) Money distributed in 2008 to the
199.2fund established under this section that exceeds ten cents per ton is available to qualifying
199.3producers under paragraph (a) on a pro rata basis.
199.4(c) Repayment or transfer of money to the taconite environmental protection fund
199.5under paragraph (b), item (ii), must be allocated by the Iron Range Resources and
199.6Rehabilitation Board for public works projects in house legislative districts in the same
199.7proportion as taxable tonnage of production in 2007 in each house legislative district, for
199.8distribution in 2008, bears to total taxable tonnage of production in 2007, for distribution
199.9in 2008. Notwithstanding any other law to the contrary, expenditures under this paragraph
199.10do not require approval by the governor. For purposes of this paragraph, "house legislative
199.11districts" means the legislative districts in existence on May 15, 2009.
199.12EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

199.13    Sec. 12. Minnesota Statutes 2012, section 298.24, subdivision 1, is amended to read:
199.14    Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002,
199.15and 2003 2013, there is imposed upon taconite and iron sulphides, and upon the mining
199.16and quarrying thereof, and upon the production of iron ore concentrate therefrom, and
199.17upon the concentrate so produced, a tax of $2.103 $2.56 per gross ton of merchantable
199.18iron ore concentrate produced therefrom. For concentrates produced in 2005, the tax rate
199.19is the same rate imposed for concentrates produced in 2004. For concentrates produced in
199.202009 and subsequent years, The tax is also imposed upon other iron-bearing material.
199.21    (b) For concentrates produced in 2006 2014 and subsequent years, the tax rate shall
199.22be equal to the preceding year's tax rate plus an amount equal to the preceding year's tax
199.23rate multiplied by the percentage increase in the implicit price deflator from the fourth
199.24quarter of the second preceding year to the fourth quarter of the preceding year. "Implicit
199.25price deflator" means the implicit price deflator for the gross domestic product prepared by
199.26the Bureau of Economic Analysis of the United States Department of Commerce.
199.27    (c) An additional tax is imposed equal to three cents per gross ton of merchantable
199.28iron ore concentrate for each one percent that the iron content of the product exceeds 72
199.29percent, when dried at 212 degrees Fahrenheit.
199.30    (d) The tax on taconite and iron sulphides shall be imposed on the average of the
199.31production for the current year and the previous two years. The rate of the tax imposed
199.32will be the current year's tax rate. This clause shall not apply in the case of the closing
199.33of a taconite facility if the property taxes on the facility would be higher if this clause
199.34and section 298.25 were not applicable. The tax on other iron-bearing material shall be
199.35imposed on the current year production.
200.1    (e) If the tax or any part of the tax imposed by this subdivision is held to be
200.2unconstitutional, a tax of $2.103 $2.56 per gross ton of merchantable iron ore concentrate
200.3produced shall be imposed.
200.4    (f) Consistent with the intent of this subdivision to impose a tax based upon the
200.5weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
200.6determine the weight of merchantable iron ore concentrate included in fluxed pellets by
200.7subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
200.8flux additives included in the pellets from the weight of the pellets. For purposes of this
200.9paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
200.10olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
200.11No subtraction from the weight of the pellets shall be allowed for binders, mineral and
200.12chemical additives other than basic flux additives, or moisture.
200.13    (g)(1) Notwithstanding any other provision of this subdivision, for the first two years
200.14of a plant's commercial production of direct reduced ore from ore mined in this state, no
200.15tax is imposed under this section. As used in this paragraph, "commercial production" is
200.16production of more than 50,000 tons of direct reduced ore in the current year or in any prior
200.17year, "noncommercial production" is production of 50,000 tons or less of direct reduced ore
200.18in any year, and "direct reduced ore" is ore that results in a product that has an iron content
200.19of at least 75 percent. For the third year of a plant's commercial production of direct
200.20reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate otherwise
200.21determined under this subdivision. For the fourth commercial production year, the rate is
200.2250 percent of the rate otherwise determined under this subdivision; for the fifth commercial
200.23production year, the rate is 75 percent of the rate otherwise determined under this
200.24subdivision; and for all subsequent commercial production years, the full rate is imposed.
200.25    (2) Subject to clause (1), production of direct reduced ore in this state is subject to
200.26the tax imposed by this section, but if that production is not produced by a producer of
200.27taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron
200.28sulfides, or other iron-bearing material, that is consumed in the production of direct
200.29reduced iron in this state is not subject to the tax imposed by this section on taconite,
200.30iron sulfides, or other iron-bearing material.
200.31    (3) Notwithstanding any other provision of this subdivision, no tax is imposed
200.32on direct reduced ore under this section during the facility's noncommercial production
200.33of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
200.34production of direct reduced ore is subject to the tax imposed by this section on taconite
200.35and iron sulphides. Three-year average production of direct reduced ore does not
200.36include production of direct reduced ore in any noncommercial year. Three-year average
201.1production for a direct reduced ore facility that has noncommercial production is the
201.2average of the commercial production of direct reduced ore for the current year and the
201.3previous two commercial years.
201.4    (4) This paragraph applies only to plants for which all environmental permits have
201.5been obtained and construction has begun before July 1, 2008.
201.6EFFECTIVE DATE.This section is effective beginning for the 2013 production
201.7year.

201.8    Sec. 13. Minnesota Statutes 2012, section 298.28, subdivision 4, is amended to read:
201.9    Subd. 4. School districts. (a) 23.15 32.15 cents per taxable ton, plus the increase
201.10provided in paragraph (d), less the amount that would have been computed under
201.11Minnesota Statutes 2008, section 126C.21, subdivision 4, for the current year for that
201.12district, must be allocated to qualifying school districts to be distributed, based upon the
201.13certification of the commissioner of revenue, under paragraphs (b), (c), and (f).
201.14    (b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which
201.15the lands from which taconite was mined or quarried were located or within which the
201.16concentrate was produced. The distribution must be based on the apportionment formula
201.17prescribed in subdivision 2.
201.18    (ii) Four cents per taxable ton from each taconite facility must be distributed to
201.19each affected school district for deposit in a fund dedicated to building maintenance
201.20and repairs, as follows:
201.21    (1) proceeds from Keewatin Taconite or its successor are distributed to Independent
201.22School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
201.23districts;
201.24    (2) proceeds from the Hibbing Taconite Company or its successor are distributed to
201.25Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
201.26districts;
201.27    (3) proceeds from the Mittal Steel Company and Minntac or their successors are
201.28distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
201.292711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
201.30    (4) proceeds from the Northshore Mining Company or its successor are distributed
201.31to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
201.32or their successor districts; and
201.33    (5) proceeds from United Taconite or its successor are distributed to Independent
201.34School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
201.35successor districts.
202.1    Revenues that are required to be distributed to more than one district shall be
202.2apportioned according to the number of pupil units identified in section 126C.05,
202.3subdivision 1 , enrolled in the second previous year.
202.4    (c)(i) 15.72 24.72 cents per taxable ton, less any amount distributed under paragraph
202.5(e), shall be distributed to a group of school districts comprised of those school districts
202.6which qualify as a tax relief area under section 273.134, paragraph (b), or in which there is
202.7a qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
202.8to school district indexes as follows: for each school district, its pupil units determined
202.9under section 126C.05 for the prior school year shall be multiplied by the ratio of the
202.10average adjusted net tax capacity per pupil unit for school districts receiving aid under
202.11this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
202.12ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
202.13Each district shall receive that portion of the distribution which its index bears to the sum
202.14of the indices for all school districts that receive the distributions.
202.15    (ii) Notwithstanding clause (i), each school district that receives a distribution
202.16under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
202.17clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
202.18severed mineral values after reduction for any portion distributed to cities and towns
202.19under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its
202.20levy reduction under section 126C.48, subdivision 8, for the second year prior to the
202.21year of the distribution shall receive a distribution equal to the difference; the amount
202.22necessary to make this payment shall be derived from proportionate reductions in the
202.23initial distribution to other school districts under clause (i). If there are insufficient tax
202.24proceeds to make the distribution provided under this paragraph in any year, money must
202.25be transferred from the taconite property tax relief account in subdivision 6, to the extent
202.26of the shortfall in the distribution.
202.27    (d)(1) Any school district described in paragraph (c) where a levy increase pursuant
202.28to section 126C.17, subdivision 9, was authorized by referendum for taxes payable in
202.292001, shall receive a distribution of 21.3 cents per ton. Each district shall receive $175
202.30times the pupil units identified in section 126C.05, subdivision 1, enrolled in the second
202.31previous year or the 1983-1984 school year, whichever is greater, less the product of 1.8
202.32percent times the district's taxable net tax capacity in the second previous year 2011.
202.33(2) Districts qualifying under paragraph (c) must receive additional taconite aid each
202.34year equal to 22.5 percent of the amount obtained by subtracting:
202.35(i) 1.8 percent of the district's net tax capacity for 2011, from:
203.1(ii) the district's weighted average daily membership for fiscal year 2012 multiplied
203.2by the sum of:
203.3(A) $415, plus
203.4(B) the district's referendum revenue allowance for fiscal year 2013.
203.5    If the total amount provided by paragraph (d) is insufficient to make the payments
203.6herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
203.7so as not to exceed the funds available. Any amounts received by a qualifying school
203.8district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
203.9education aid which the district receives pursuant to section 126C.13 or the permissible
203.10levies of the district. Any amount remaining after the payments provided in this paragraph
203.11shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
203.12deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
203.13economic protection trust fund as provided in subdivision 11.
203.14    Each district receiving money according to this paragraph shall reserve the lesser of
203.15the amount received under this paragraph or $25 times the number of pupil units served
203.16in the district. It may use the money for early childhood programs or for outcome-based
203.17learning programs that enhance the academic quality of the district's curriculum. The
203.18outcome-based learning programs must be approved by the commissioner of education.
203.19    (e) There shall be distributed to any school district the amount which the school
203.20district was entitled to receive under section 298.32 in 1975.
203.21    (f) Four cents per taxable ton must be distributed to qualifying school districts
203.22according to the distribution specified in paragraph (b), clause (ii), and two 11 cents
203.23per taxable ton must be distributed according to the distribution specified in paragraph
203.24(c). These amounts are not subject to sections 126C.21, subdivision 4, and 126C.48,
203.25subdivision 8 .
203.26EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

203.27    Sec. 14. Minnesota Statutes 2012, section 298.28, subdivision 6, is amended to read:
203.28    Subd. 6. Property tax relief. (a) In 2002 2014 and thereafter, 33.9 34.8 cents per
203.29taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or
203.30section 298.2961, subdivision 5, must be allocated to St. Louis County acting as the
203.31counties' fiscal agent, to be distributed as provided in sections 273.134 to 273.136.
203.32    (b) If an electric power plant owned by and providing the primary source of power
203.33for a taxpayer mining and concentrating taconite is located in a county other than the
203.34county in which the mining and the concentrating processes are conducted, .1875 cent per
203.35taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.
204.1    (c) If an electric power plant owned by and providing the primary source of power
204.2for a taxpayer mining and concentrating taconite is located in a school district other than
204.3a school district in which the mining and concentrating processes are conducted, .4541
204.4cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to
204.5the school district.
204.6EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

204.7    Sec. 15. Minnesota Statutes 2012, section 298.28, subdivision 10, is amended to read:
204.8    Subd. 10. Increase. (a) Except as provided in paragraph (b), beginning with
204.9distributions in 2000, the amount determined under subdivision 9 shall be increased in the
204.10same proportion as the increase in the implicit price deflator as provided in section 298.24,
204.11subdivision 1 . Beginning with distributions in 2003 2015, the amount determined under
204.12subdivision 6, paragraph (a), shall be increased in the same proportion as the increase in
204.13the implicit price deflator as provided in section 298.24, subdivision 1.
204.14(b) For distributions in 2005 and subsequent years, an amount equal to the increased
204.15tax proceeds attributable to the increase in the implicit price deflator as provided in
204.16section 298.24, subdivision 1, for taxes paid in 2005, except for the amount of revenue
204.17increases provided in subdivision 4, paragraph (d), is distributed to the grant and loan fund
204.18established in section 298.2961, subdivision 4.
204.19EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

204.20    Sec. 16. Minnesota Statutes 2012, section 298.75, subdivision 2, is amended to read:
204.21    Subd. 2. Tax imposed. (a) Except as provided in paragraph (e), a county that
204.22imposes the aggregate production tax shall impose upon every operator a production tax
204.23of 21.5 cents per cubic yard or 15 cents per ton of aggregate material excavated in the
204.24county except that the county board may decide not to impose this tax if it determines
204.25that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
204.26aggregate material from that county. A county board may authorize an additional tax on
204.27aggregate material excavated in the county of up to 43 cents per cubic yard or 30 cents
204.28per ton of aggregate material excavated in the county. The tax shall not be imposed on
204.29aggregate material excavated in the county until the aggregate material is transported from
204.30the extraction site or sold, whichever occurs first. When aggregate material is stored in a
204.31stockpile within the state of Minnesota and a public highway, road or street is not used
204.32for transporting the aggregate material, the tax shall not be imposed until either when the
205.1aggregate material is sold, or when it is transported from the stockpile site, or when it is
205.2used from the stockpile, whichever occurs first.
205.3    (b) Except as provided in paragraph (e), a county that imposes the aggregate
205.4production tax under paragraph (a) shall impose upon every importer a production tax
205.5of 21.5 cents per cubic yard or 15 cents per ton of aggregate material imported into the
205.6county. A county board may authorize an additional tax on every importer of up to 43
205.7cents per cubic yard or 30 cents per ton of aggregate material imported into the county.
205.8 The tax shall be imposed when the aggregate material is imported from the extraction site
205.9or sold. When imported aggregate material is stored in a stockpile within the state of
205.10Minnesota and a public highway, road, or street is not used for transporting the aggregate
205.11material, the tax shall be imposed either when the aggregate material is sold, when it is
205.12transported from the stockpile site, or when it is used from the stockpile, whichever occurs
205.13first. The tax shall be imposed on an importer when the aggregate material is imported
205.14into the county that imposes the tax.
205.15    (c) If the aggregate material is transported directly from the extraction site to a
205.16waterway, railway, or another mode of transportation other than a highway, road or street,
205.17the tax imposed by this section shall be apportioned equally between the county where the
205.18aggregate material is extracted and the county to which the aggregate material is originally
205.19transported. If that destination is not located in Minnesota, then the county where the
205.20aggregate material was extracted shall receive all of the proceeds of the tax.
205.21    (d) A county, city, or town that receives revenue under this section is prohibited
205.22from imposing any additional host community fees on aggregate production within that
205.23county, city, or town.
205.24    (e) A county that borders two other states and that is not contiguous to a county
205.25that imposes a tax under this section may impose the taxes under paragraphs (a) and (b)
205.26at the rate of ten cents per cubic yard or seven cents per ton. This paragraph expires
205.27December 31, 2014.
205.28EFFECTIVE DATE.This section is effective the day following final enactment.

205.29    Sec. 17. 2013 DISTRIBUTION ONLY.
205.30For the 2013 distribution, a special fund is established to receive $4,700,000 of the
205.31amount that otherwise would be distributed under Minnesota Statutes, section 298.28,
205.32subdivision 6, and this amount must be paid as follows:
205.33(1) $2,000,000 to the city of Hibbing for improvements to the city's water supply
205.34system;
206.1(2) $1,700,000 to the city of Mountain Iron for the cost of moving utilities required
206.2as a result of actions undertaken by United States Steel Corporation; and
206.3(3) $1,000,000 to the city of Tower for improvements to a marina.
206.4EFFECTIVE DATE.This section is effective for the 2013 distribution, all of which
206.5must be made in the August 2013 payment.

206.6    Sec. 18. IRON RANGE RESOURCES AND REHABILITATION
206.7COMMISSIONER; BONDS AUTHORIZED.
206.8    Subdivision 1. Issuance; purpose. Notwithstanding any provision of Minnesota
206.9Statutes, chapter 298, to the contrary, the commissioner of Iron Range resources and
206.10rehabilitation may issue revenue bonds in a principal amount of $38,000,000 in one or more
206.11series, and bonds to refund those bonds. The proceeds of the bonds must be used to make
206.12grants to school districts located in the taconite tax relief area defined in Minnesota Statutes,
206.13section 273.134, or the taconite assistance area defined in Minnesota Statutes, section
206.14273.1341, to be used by the school districts to pay for building projects, such as energy
206.15efficiency, technology, infrastructure, health, safety, and maintenance improvements.
206.16    Subd. 2. Appropriation. (a) There is annually appropriated from the distribution of
206.17taconite production tax revenues under Minnesota Statues, section 298.28, prior to the
206.18calculation of the amount of the remainder under Minnesota Statutes, section 298.28,
206.19subdivision 11, an amount sufficient to pay when due the principal and interest on the
206.20bonds issued pursuant to subdivision 1. The appropriation under this section must not
206.21exceed an amount equal to ten cents per taxable ton.
206.22    (b) If in any year the amount available under paragraph (a) is insufficient to pay
206.23principal and interest due on the bonds in that year, an additional amount is appropriated
206.24from the Douglas J. Johnson fund to make up the deficiency.
206.25    (c) The appropriation under this subdivision terminates upon payment or maturity of
206.26the last of the bonds issued under this section.
206.27    Subd. 3. Credit enhancement. The bonds issued under this section are "debt
206.28obligations" and the commissioner of Iron Range resources and rehabilitation is a "district"
206.29for purposes of Minnesota Statutes, section 126C.55, provided that advances made under
206.30Minnesota Statutes, section 126C.55, subdivision 2, are not subject to Minnesota Statutes,
206.31section 126C.55, subdivisions 4 to 7.
206.32EFFECTIVE DATE.This section is effective the day following final enactment and
206.33applies beginning with the 2014 distribution under Minnesota Statutes, section 298.28.


207.3    Section 1. Minnesota Statutes 2012, section 118A.04, subdivision 3, is amended to read:
207.4    Subd. 3. State and local securities. Funds may be invested in the following:
207.5(1) any security which is a general obligation of any state or local government with
207.6taxing powers which is rated "A" or better by a national bond rating service;
207.7(2) any security which is a revenue obligation of any state or local government with
207.8taxing powers which is rated "AA" or better by a national bond rating service; and
207.9(3) a general obligation of the Minnesota housing finance agency which is a moral
207.10obligation of the state of Minnesota and is rated "A" or better by a national bond rating
207.11agency.; and
207.12(4) any security which is an obligation of a school district with an original maturity
207.13not exceeding 13 months and (i) rated in the highest category by a national bond rating
207.14service or (ii) enrolled in the credit enhancement program pursuant to section 126C.55.

207.15    Sec. 2. Minnesota Statutes 2012, section 118A.05, subdivision 5, is amended to read:
207.16    Subd. 5. Guaranteed investment contracts. Agreements or contracts for
207.17guaranteed investment contracts may be entered into if they are issued or guaranteed
207.18by United States commercial banks, domestic branches of foreign banks, United States
207.19insurance companies, or their Canadian subsidiaries, or the domestic affiliates of any
207.20of the foregoing. The credit quality of the issuer's or guarantor's short- and long-term
207.21unsecured debt must be rated in one of the two highest categories by a nationally
207.22recognized rating agency. Agreements or contracts for guaranteed investment contracts
207.23with a term of 18 months or less may be entered into regardless of the credit quality of
207.24the issuer's or guarantor's long-term unsecured debt, provided that the credit quality of
207.25the issuer's short-term unsecured debt is rated in the highest category by a nationally
207.26recognized rating agency. Should the issuer's or guarantor's credit quality be downgraded
207.27below "A", the government entity must have withdrawal rights.

207.28    Sec. 3. Minnesota Statutes 2012, section 216C.436, subdivision 7, is amended to read:
207.29    Subd. 7. Repayment. An implementing entity that finances an energy improvement
207.30under this section must:
207.31(1) secure payment with a lien against the benefited qualifying real property; and
208.1(2) collect repayments as a special assessment as provided for in section 429.101
208.2or by charter, provided that special assessments may be made payable in up to 20 equal
208.3annual installments.
208.4If the implementing entity is an authority, the local government that authorized
208.5the authority to act as implementing entity shall impose and collect special assessments
208.6necessary to pay debt service on bonds issued by the implementing entity under subdivision
208.78, and shall transfer all collections of the assessments upon receipt to the authority.

208.8    Sec. 4. Minnesota Statutes 2012, section 373.01, subdivision 3, is amended to read:
208.9    Subd. 3. Capital notes. (a) A county board may, by resolution and without
208.10referendum, issue capital notes subject to the county debt limit to purchase capital
208.11equipment useful for county purposes that has an expected useful life at least equal to the
208.12term of the notes. The notes shall be payable in not more than ten years and shall be
208.13issued on terms and in a manner the board determines. A tax levy shall be made for
208.14payment of the principal and interest on the notes, in accordance with section 475.61,
208.15as in the case of bonds.
208.16    (b) For purposes of this subdivision, "capital equipment" means:
208.17    (1) public safety, ambulance, road construction or maintenance, and medical
208.18equipment; and
208.19    (2) computer hardware and software, without regard to its expected useful life,
208.20whether bundled with machinery or equipment or unbundled., together with application
208.21development services and training related to the use of the computer hardware or software.

208.22    Sec. 5. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read:
208.23    Subdivision 1. Definitions. For purposes of this section, the following terms have
208.24the meanings given.
208.25(a) "Bonds" means an obligation as defined under section 475.51.
208.26(b) "Capital improvement" means acquisition or betterment of public lands,
208.27buildings, or other improvements within the county for the purpose of a county courthouse,
208.28administrative building, health or social service facility, correctional facility, jail, law
208.29enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads
208.30and bridges, public works facilities, fairground buildings, and records and data storage
208.31facilities, and the acquisition of development rights in the form of conservation easements
208.32under chapter 84C. An improvement must have an expected useful life of five years or more
208.33to qualify. "Capital improvement" does not include a recreation or sports facility building
208.34(such as, but not limited to, a gymnasium, ice arena, racquet sports facility, swimming
209.1pool, exercise room or health spa), unless the building is part of an outdoor park facility
209.2and is incidental to the primary purpose of outdoor recreation. For purposes of this section,
209.3"capital improvement" includes expenditures for purposes described in this paragraph that
209.4have been incurred by a county before approval of a capital improvement plan, if such
209.5expenditures are included in a capital improvement plan approved on or before the date of
209.6the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
209.7(c) "Metropolitan county" means a county located in the seven-county metropolitan
209.8area as defined in section 473.121 or a county with a population of 90,000 or more.
209.9(d) "Population" means the population established by the most recent of the
209.10following (determined as of the date the resolution authorizing the bonds was adopted):
209.11(1) the federal decennial census,
209.12(2) a special census conducted under contract by the United States Bureau of the
209.13Census, or
209.14(3) a population estimate made either by the Metropolitan Council or by the state
209.15demographer under section 4A.02.
209.16(e) "Qualified indoor ice arena" means a facility that meets the requirements of
209.17section 373.43.
209.18(f) "Tax capacity" means total taxable market value, but does not include captured
209.19market value.

209.20    Sec. 6. Minnesota Statutes 2012, section 373.40, subdivision 2, is amended to read:
209.21    Subd. 2. Application of election requirement. (a) Bonds issued by a county
209.22to finance capital improvements under an approved capital improvement plan are not
209.23subject to the election requirements of section 375.18 or 475.58. The bonds must be
209.24approved by vote of at least three-fifths of the members of the county board. In the case
209.25of a metropolitan county, the bonds must be approved by vote of at least two-thirds of
209.26the members of the county board.
209.27(b) Before issuance of bonds qualifying under this section, the county must publish
209.28a notice of its intention to issue the bonds and the date and time of a hearing to obtain
209.29public comment on the matter. The notice must be published in the official newspaper
209.30of the county or in a newspaper of general circulation in the county. The notice must be
209.31published at least 14, but not more than 28, days before the date of the hearing.
209.32(c) A county may issue the bonds only upon obtaining the approval of a majority of
209.33the voters voting on the question of issuing the obligations, if a petition requesting a vote
209.34on the issuance is signed by voters equal to five percent of the votes cast in the county in
209.35the last county general election and is filed with the county auditor within 30 days after
210.1the public hearing. The commissioner of revenue shall prepare a suggested form of the
210.2question to be presented at the election. If the county elects not to submit the question to
210.3the voters, the county shall not propose the issuance of bonds under this section for the
210.4same purpose and in the same amount for a period of 365 days from the date of receipt
210.5of the petition. If the question of issuing the bonds is submitted and not approved by the
210.6voters, the provisions of section 475.58, subdivision 1a, shall apply.

210.7    Sec. 7. Minnesota Statutes 2012, section 383D.41, is amended by adding a subdivision
210.8to read:
210.9    Subd. 10. Housing improvement areas. (a) The Dakota County Community
210.10Development Agency has all powers of a city, in addition to its existing powers as an
210.11implementing entity, under sections 428A.11 to 428A.21, in connection with housing
210.12improvement areas in Dakota County. For purposes of the Dakota County Community
210.13Development Agency's exercise of those powers the provisions of this subdivision apply.
210.14(b) References in sections 428A.11 to 428A.21 to:
210.15(1) a "mayor" are references to the executive director of the Dakota County
210.16Community Development Agency;
210.17(2) a "council" are references to the board of commissioners of the Dakota County
210.18Community Development Agency; and
210.19(3) a "city clerk" are references to an official of the Dakota County Community
210.20Development Agency designated from time to time by the executive director of the Dakota
210.21County Community Development Agency.
210.22(c) Notwithstanding section 428A.11, subdivision 3, and 428A.13, subdivision 1,
210.23the governing body of the Dakota County Community Development Agency may adopt
210.24a resolution, rather than an ordinance, establishing one or more housing improvement
210.25areas, and "enabling ordinance" means a resolution so adopted for purposes of sections
210.26428A.11 to 428A.21.
210.27(d) As long as the governing body of the Dakota County Community Development
210.28Agency and the Dakota County Board of Commissioners consists of identical membership,
210.29the Dakota County Community Development Agency may pledge the full faith, credit and
210.30taxing power of Dakota County to obligations issued by the Dakota County Community
210.31Development Agency under section 428A.16.
210.32(e) Notwithstanding the provisions of section 428A.21, the establishment by the
210.33Dakota County Community Development Agency of a new housing improvement area
210.34after June 30, 2016, requires enactment of a special law authorizing establishment of the
210.35area. Any extensions of the deadline for housing improvement districts under general law
211.1beyond that date or repeal of the deadline also applies to housing improvement areas
211.2established by the Dakota County Community Development Agency.

211.3    Sec. 8. Minnesota Statutes 2012, section 410.32, is amended to read:
211.4410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
211.5    (a) Notwithstanding any contrary provision of other law or charter, a home rule
211.6charter city may, by resolution and without public referendum, issue capital notes subject
211.7to the city debt limit to purchase capital equipment.
211.8    (b) For purposes of this section, "capital equipment" means:
211.9    (1) public safety equipment, ambulance and other medical equipment, road
211.10construction and maintenance equipment, and other capital equipment; and
211.11    (2) computer hardware and software, without regard to its expected useful life,
211.12 whether bundled with machinery or equipment or unbundled., together with application
211.13development services and training related to the use of the computer hardware and software.
211.14    (c) The equipment or software must have an expected useful life at least as long
211.15as the term of the notes.
211.16    (d) The notes shall be payable in not more than ten years and be issued on terms and
211.17in the manner the city determines. The total principal amount of the capital notes issued
211.18in a fiscal year shall not exceed 0.03 percent of the market value of taxable property
211.19in the city for that year.
211.20    (e) A tax levy shall be made for the payment of the principal and interest on the
211.21notes, in accordance with section 475.61, as in the case of bonds.
211.22    (f) Notes issued under this section shall require an affirmative vote of two-thirds of
211.23the governing body of the city.
211.24    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
211.25city may also issue capital notes subject to its debt limit in the manner and subject to the
211.26limitations applicable to statutory cities pursuant to section 412.301.

211.27    Sec. 9. Minnesota Statutes 2012, section 412.301, is amended to read:
211.28412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
211.29    (a) The council may issue certificates of indebtedness or capital notes subject to the
211.30city debt limits to purchase capital equipment.
211.31    (b) For purposes of this section, "capital equipment" means:
211.32    (1) public safety equipment, ambulance and other medical equipment, road
211.33construction and maintenance equipment, and other capital equipment; and
212.1    (2) computer hardware and software, without regard to its expected useful life,
212.2 whether bundled with machinery or equipment or unbundled., together with application
212.3development services and training related to the use of the computer hardware or software.
212.4    (c) The equipment or software must have an expected useful life at least as long as
212.5the terms of the certificates or notes.
212.6    (d) Such certificates or notes shall be payable in not more than ten years and shall be
212.7issued on such terms and in such manner as the council may determine.
212.8    (e) If the amount of the certificates or notes to be issued to finance any such purchase
212.9exceeds 0.25 percent of the market value of taxable property in the city, they shall not
212.10be issued for at least ten days after publication in the official newspaper of a council
212.11resolution determining to issue them; and if before the end of that time, a petition asking
212.12for an election on the proposition signed by voters equal to ten percent of the number of
212.13voters at the last regular municipal election is filed with the clerk, such certificates or notes
212.14shall not be issued until the proposition of their issuance has been approved by a majority
212.15of the votes cast on the question at a regular or special election.
212.16    (f) A tax levy shall be made for the payment of the principal and interest on such
212.17certificates or notes, in accordance with section 475.61, as in the case of bonds.

212.18    Sec. 10. [435.39] MUNICIPAL STREET IMPROVEMENT DISTRICTS.
212.19    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
212.20have the meanings given them.
212.21(b) "Governing body" means the city council of a municipality.
212.22(c) "Improvements" means construction, reconstruction, and facility upgrades
212.23involving: right-of-way acquisition; paving; curbs and gutters; bridges and culverts and
212.24their repair; milling; overlaying; drainage and storm sewers; excavation; base work;
212.25subgrade corrections; street lighting; traffic signals; signage; sidewalks; pavement
212.26markings; boulevard and easement restoration; impact mitigation; connection and
212.27reconnection of utilities; turn lanes; medians; street and alley returns; retaining walls;
212.28fences; lane additions; and fixed transit infrastructure, trails, or pathways. "Fixed transit
212.29infrastructure" does not include commuter rail rolling stock, light rail vehicles, or
212.30transit way buses; capital costs for park-and-ride facilities; feasibility studies, planning,
212.31alternative analyses, environmental studies, engineering, or construction of transit ways;
212.32or operating assistance for transit ways.
212.33(d) "Maintenance" means striping, seal coating, crack sealing, pavement repair,
212.34sidewalk maintenance, signal maintenance, street light maintenance, and signage.
213.1(e) "Municipal street" means a street, alley, or public way in which the municipality
213.2is the road authority with powers conferred by section 429.021.
213.3(f) "Municipality" means a home rule charter or statutory city.
213.4(g) "Street improvement district" means a geographic area designated by a
213.5municipality and located within the municipality within which street improvements and
213.6maintenance may be undertaken and financed according to this section.
213.7(h) "Unimproved parcel" means a parcel of land that abuts an:
213.8(1) unimproved municipal street and that is not served by municipal sewer or water
213.9utilities; or
213.10(2) improved municipal street and served by municipal sewer or water utilities
213.11and that:
213.12(i) is not improved by construction of an authorized structure; or
213.13(ii) contains a structure that has not previously been occupied.
213.14    Subd. 2. Authorization. A municipality may establish by ordinance municipal
213.15street improvement districts and may defray all or part of the total costs of municipal street
213.16improvements and maintenance by apportioning street improvement fees to all of the
213.17developed parcels located in the district. A street improvement district must not include
213.18any property already located in another street improvement district.
213.19    Subd. 3. Uniformity. (a) The total costs of municipal street improvements and
213.20maintenance must be apportioned to all developed parcels or developed tracts of land
213.21located in the established street improvement district on a uniform basis within each
213.22classification of real estate. Apportionment must be made on the basis of one of the
213.23following:
213.24(1) estimated market value;
213.25(2) tax capacity;
213.26(3) front footage;
213.27(4) land or building area; or
213.28(5) some combination of clauses (1) to (4).
213.29(b) Costs must not be apportioned in such a way that the cost borne by any
213.30classification of property is more than twice the cost that would be borne by that
213.31classification if costs were apportioned uniformly to all classifications of property under
213.32the method selected in paragraph (a), clauses (1) to (5).
213.33    Subd. 4. Adoption of plan. Before establishing a municipal street improvement
213.34district or authorizing a street improvement fee, a municipality must propose and adopt a
213.35street improvement plan that identifies the location of the municipal street improvement
213.36district and identifies and estimates the costs of the proposed improvements during the
214.1proposed period of collection of municipal street improvement fees, which must be for
214.2a period of at least five years and at most 20 years. Notice of a public hearing on the
214.3proposed plan must be given by mail to all affected landowners at least 30 days before
214.4the hearing and posted for at least 30 days before the hearing. At the public hearing, the
214.5governing body must present the plan and all affected landowners in attendance must have
214.6the opportunity to comment before the governing body considers adoption of the plan.
214.7    Subd. 5. Use of fees. Revenues from street improvement fees must be placed in
214.8a separate account and used only for projects located within the district and identified
214.9in the municipal street improvement plan.
214.10    Subd. 6. Collection; up to 20 years. (a) An ordinance adopted under this section
214.11must provide for billing and payment of the fee on a monthly, quarterly, or other basis
214.12as directed by the governing body. The governing body may collect municipal street
214.13improvement fees within a street improvement district for a maximum of 20 years.
214.14    (b) Fees that, as of October 15 of each year, have remained unpaid for at least 30
214.15days may be certified to the county auditor for collection as a special assessment payable
214.16in the following calendar year against the affected property.
214.17    Subd. 7. Improvement fee. A municipality may impose a municipal street
214.18improvement fee by ordinance. The ordinance must not be voted on or adopted until after
214.19public notice is provided and a public hearing is held in the same manner as provided in
214.20subdivision 4.
214.21    Subd. 8. Not exclusive means of financing improvements. The use of the
214.22municipal street improvement fee by a municipality does not restrict the municipality from
214.23imposing other measures to pay the costs of local street improvements or maintenance,
214.24except that a municipality must not impose special assessments for projects funded with
214.25street improvement fees.
214.26    Subd. 9. Unimproved parcels; fees. A municipality may not impose a street
214.27improvement fee on any unimproved parcel located within an established street
214.28improvement district until at least three years after either the date of substantial completion
214.29of the paving of the previous unimproved municipal street or the date which a structure is
214.30built and first occupied pursuant to a certificate of occupancy, whichever is later.
214.31    Subd. 10. Exempt property. A municipality must not impose a municipal street
214.32improvement fee on property that is exempt from taxation under the provisions of the
214.33Minnesota Constitution, article X, section 1.
214.34EFFECTIVE DATE.This section is effective July 1, 2013.

215.1    Sec. 11. Minnesota Statutes 2012, section 473.39, is amended by adding a subdivision
215.2to read:
215.3    Subd. 1s. Obligations. After July 1, 2013, in addition to other authority in this
215.4section, the council may issue certificates of indebtedness, bonds, or other obligations
215.5under this section in an amount not exceeding $35,800,000 for capital expenditures as
215.6prescribed in the council's transit capital improvement program and for related costs,
215.7including the costs of issuance and sale of the obligations.
215.8EFFECTIVE DATE.This section is effective the day following final enactment
215.9and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
215.10Washington.

215.11    Sec. 12. Minnesota Statutes 2012, section 474A.04, subdivision 1a, is amended to read:
215.12    Subd. 1a. Entitlement reservations; carryforward; deduction. Any amount
215.13returned by an entitlement issuer before July 15 shall be reallocated through the housing
215.14pool. Any amount returned on or after July 15 shall be reallocated through the unified
215.15pool. An amount returned after the last Monday in November shall be reallocated to the
215.16Minnesota Housing Finance Agency. Any amount of bonding authority that an entitlement
215.17issuer carries forward under federal tax law that is not permanently issued or for which
215.18the governing body of the entitlement issuer has not enacted a resolution electing to use
215.19the authority for mortgage credit certificates and has not provided a notice of issue to the
215.20commissioner before 4:30 p.m. on the last business day in December of the succeeding
215.21calendar year shall be deducted from the entitlement allocation for that entitlement issuer
215.22in the next succeeding calendar year. Any amount deducted from an entitlement issuer's
215.23allocation under this subdivision shall be reallocated to other entitlement issuers, the
215.24housing pool, the small issue pool, and the public facilities pool on a proportional basis
215.25consistent with section 474A.03.
215.26EFFECTIVE DATE.This section is effective the day following final enactment
215.27and applies to any bonding authority allocated in 2012 and subsequent years.

215.28    Sec. 13. Minnesota Statutes 2012, section 474A.062, is amended to read:
215.29474A.062 MINNESOTA OFFICE OF HIGHER EDUCATION 120-DAY
215.30ISSUANCE EXEMPTION.
215.31    The Minnesota Office of Higher Education is exempt from the 120-day issuance
215.32requirements in this chapter and may carry forward allocations for student loan bonds into
216.1one successive calendar year, subject to carryforward notice requirements of section
216.2474A.131, subdivision 2 .
216.3EFFECTIVE DATE.This section is effective the day following final enactment
216.4and applies to any bonding authority allocated in 2012 and subsequent years.

216.5    Sec. 14. Minnesota Statutes 2012, section 474A.091, subdivision 3a, is amended to read:
216.6    Subd. 3a. Mortgage bonds. (a) Bonding authority remaining in the unified pool on
216.7October 1 is available for single-family housing programs for cities that applied in January
216.8and received an allocation under section 474A.061, subdivision 2a, in the same calendar
216.9year. The Minnesota Housing Finance Agency shall receive an allocation for mortgage
216.10bonds pursuant to this section, minus any amounts for a city or consortium that intends to
216.11issue bonds on its own behalf under paragraph (c).
216.12    (b) The agency may issue bonds on behalf of participating cities. The agency shall
216.13request an allocation from the commissioner for all applicants who choose to have the
216.14agency issue bonds on their behalf and the commissioner shall allocate the requested
216.15amount to the agency. Allocations shall be awarded by the commissioner each Monday
216.16commencing on the first Monday in October through the last Monday in November for
216.17applications received by 4:30 p.m. on the Monday of the week preceding an allocation.
216.18    For cities who choose to have the agency issue bonds on their behalf, allocations
216.19will be made loan by loan, on a first-come, first-served basis among the cities. The
216.20agency shall submit an application fee pursuant to section 474A.03, subdivision 4, and an
216.21application deposit equal to two percent of the requested allocation to the commissioner
216.22when requesting an allocation from the unified pool. After awarding an allocation and
216.23receiving a notice of issuance for mortgage bonds issued on behalf of the participating
216.24cities, the commissioner shall transfer the application deposit to the Minnesota Housing
216.25Finance Agency.
216.26    For purposes of paragraphs (a) to (d), "city" means a county or a consortium of
216.27local government units that agree through a joint powers agreement to apply together
216.28for single-family housing programs, and has the meaning given it in section 462C.02,
216.29subdivision 6 . "Agency" means the Minnesota Housing Finance Agency.
216.30    (c) Any city that received an allocation pursuant to section 474A.061, subdivision
216.312a, paragraph (f) , in the current year that wishes to receive an additional allocation from
216.32the unified pool and issue bonds on its own behalf or pursuant to a joint powers agreement
216.33shall notify the Minnesota Housing Finance Agency by the third Monday in September.
216.34The total amount of allocation for mortgage bonds for a city choosing to issue bonds on its
216.35own behalf or through a joint powers agreement is limited to the lesser of: (i) the amount
217.1requested, or (ii) the product of the total amount available for mortgage bonds from the
217.2unified pool, multiplied by the ratio of the population of each city that applied in January
217.3and received an allocation under section 474A.061, subdivision 2a, in the same calendar
217.4year, as determined by the most recent estimate of the city's population released by the
217.5state demographer's office to the total of the population of all the cities that applied in
217.6January and received an allocation under section 474A.061, subdivision 2a, in the same
217.7calendar year. If a city choosing to issue bonds on its own behalf or through a joint powers
217.8agreement is located within a county that has also chosen to issue bonds on its own behalf
217.9or through a joint powers agreement, the city's population will be deducted from the
217.10county's population in calculating the amount of allocations under this paragraph.
217.11    The Minnesota Housing Finance Agency shall notify each city choosing to issue
217.12bonds on its own behalf or pursuant to a joint powers agreement of the amount of its
217.13allocation by October 15. Upon determining the amount of the allocation of each choosing
217.14to issue bonds on its own behalf or through a joint powers agreement, the agency shall
217.15forward a list specifying the amounts allotted to each city.
217.16    A city that chooses to issue bonds on its own behalf or through a joint powers
217.17agreement may request an allocation from the commissioner by forwarding an application
217.18with an application fee pursuant to section 474A.03, subdivision 4, and an application
217.19deposit equal to two percent of the requested amount to the commissioner no later than
217.204:30 p.m. on the Monday of the week preceding an allocation. Allocations to cities that
217.21choose to issue bonds on their own behalf shall be awarded by the commissioner on
217.22the first Monday after October 15 through the last Monday in November. No city may
217.23receive an allocation from the commissioner after the last Monday in November. The
217.24commissioner shall allocate the requested amount to the city or cities subject to the
217.25limitations under this subdivision.
217.26    If a city issues mortgage bonds from an allocation received under this paragraph,
217.27the issuer must provide for the recycling of funds into new loans. If the issuer is not
217.28able to provide for recycling, the issuer must notify the commissioner in writing of the
217.29reason that recycling was not possible and the reason the issuer elected not to have the
217.30Minnesota Housing Finance Agency issue the bonds. "Recycling" means the use of money
217.31generated from the repayment and prepayment of loans for further eligible loans or for the
217.32redemption of bonds and the issuance of current refunding bonds.
217.33    (d) No entitlement city or county or city in an entitlement county may apply for or
217.34be allocated authority to issue mortgage bonds or use mortgage credit certificates from
217.35the unified pool.
218.1    (e) An allocation awarded to the agency for mortgage bonds under this section
218.2may be carried forward by the agency into the next succeeding calendar year subject to
218.3notice requirements under section 474A.131 and is available until the last business day in
218.4December of that succeeding calendar year.
218.5EFFECTIVE DATE.This section is effective the day following final enactment
218.6and applies to any bonding authority allocated in 2012 and subsequent years.

218.7    Sec. 15. Minnesota Statutes 2012, section 475.521, subdivision 1, is amended to read:
218.8    Subdivision 1. Definitions. For purposes of this section, the following terms have
218.9the meanings given.
218.10(a) "Bonds" mean an obligation defined under section 475.51.
218.11(b) "Capital improvement" means acquisition or betterment of public lands,
218.12buildings or other improvements for the purpose of a city hall, town hall, library, public
218.13safety facility, and public works facility. An improvement must have an expected useful
218.14life of five years or more to qualify. Capital improvement does not include light rail transit
218.15or any activity related to it, or a park, road, bridge, administrative building other than a
218.16city or town hall, or land for any of those facilities. For purposes of this section, "capital
218.17improvement" includes expenditures for purposes described in this paragraph that have
218.18been incurred by a municipality before approval of a capital improvement plan, if such
218.19expenditures are included in a capital improvement plan approved on or before the date of
218.20the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
218.21(c) "Municipality" means a home rule charter or statutory city or a town described in
218.22section 368.01, subdivision 1 or 1a.

218.23    Sec. 16. Minnesota Statutes 2012, section 475.521, subdivision 2, is amended to read:
218.24    Subd. 2. Election requirement. (a) Bonds issued by a municipality to finance
218.25capital improvements under an approved capital improvements plan are not subject to the
218.26election requirements of section 475.58. The bonds must be approved by an affirmative
218.27vote of three-fifths of the members of a five-member governing body. In the case of a
218.28governing body having more or less than five members, the bonds must be approved by a
218.29vote of at least two-thirds of the members of the governing body.
218.30(b) Before the issuance of bonds qualifying under this section, the municipality
218.31must publish a notice of its intention to issue the bonds and the date and time of the
218.32hearing to obtain public comment on the matter. The notice must be published in the
218.33official newspaper of the municipality or in a newspaper of general circulation in the
218.34municipality. Additionally, the notice may be posted on the official Web site, if any, of the
219.1municipality. The notice must be published at least 14 but not more than 28 days before
219.2the date of the hearing.
219.3(c) A municipality may issue the bonds only after obtaining the approval of a
219.4majority of the voters voting on the question of issuing the obligations, if a petition
219.5requesting a vote on the issuance is signed by voters equal to five percent of the votes cast
219.6in the municipality in the last municipal general election and is filed with the clerk within
219.730 days after the public hearing. The commissioner of revenue shall prepare a suggested
219.8form of the question to be presented at the election. If the municipality elects not to submit
219.9the question to the voters, the municipality shall not propose the issuance of bonds under
219.10this section for the same purpose and in the same amount for a period of 365 days from the
219.11date of receipt of the petition. If the question of issuing the bonds is submitted and not
219.12approved by the voters, the provisions of section 475.58, subdivision 1a, shall apply.

219.13    Sec. 17. Minnesota Statutes 2012, section 475.58, subdivision 3b, is amended to read:
219.14    Subd. 3b. Street reconstruction and bituminous overlays. (a) A municipality may,
219.15without regard to the election requirement under subdivision 1, issue and sell obligations
219.16for street reconstruction or bituminous overlays, if the following conditions are met:
219.17    (1) the streets are reconstructed or overlaid under a street reconstruction or overlay
219.18plan that describes the street reconstruction or overlay to be financed, the estimated costs,
219.19and any planned reconstruction or overlay of other streets in the municipality over the
219.20next five years, and the plan and issuance of the obligations has been approved by a vote
219.21of all of the members of the governing body present at the meeting following a public
219.22hearing for which notice has been published in the official newspaper at least ten days but
219.23not more than 28 days prior to the hearing; and
219.24    (2) if a petition requesting a vote on the issuance is signed by voters equal to
219.25five percent of the votes cast in the last municipal general election and is filed with the
219.26municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
219.27only after obtaining the approval of a majority of the voters voting on the question of the
219.28issuance of the obligations. If the municipality elects not to submit the question to the
219.29voters, the municipality shall not propose the issuance of bonds under this section for the
219.30same purpose and in the same amount for a period of 365 days from the date of receipt
219.31of the petition. If the question of issuing the bonds is submitted and not approved by the
219.32voters, the provisions of section 475.58, subdivision 1a, shall apply.
219.33    (b) Obligations issued under this subdivision are subject to the debt limit of the
219.34municipality and are not excluded from net debt under section 475.51, subdivision 4.
220.1    (c) For purposes of this subdivision, street reconstruction and bituminous overlays
220.2includes utility replacement and relocation and other activities incidental to the street
220.3reconstruction, turn lanes and other improvements having a substantial public safety
220.4function, realignments, other modifications to intersect with state and county roads, and
220.5the local share of state and county road projects. For purposes of this subdivision, "street
220.6reconstruction" includes expenditures for street reconstruction that have been incurred
220.7by a municipality before approval of a street reconstruction plan, if such expenditures
220.8are included in a street reconstruction plan approved on or before the date of the public
220.9hearing under paragraph (a), clause (1) regarding issuance of bonds for such expenditures.
220.10    (d) Except in the case of turn lanes, safety improvements, realignments, intersection
220.11modifications, and the local share of state and county road projects, street reconstruction
220.12and bituminous overlays does not include the portion of project cost allocable to widening
220.13a street or adding curbs and gutters where none previously existed.

220.14    Sec. 18. Laws 1971, chapter 773, section 1, subdivision 2, as amended by Laws 1974,
220.15chapter 351, section 5, Laws 1976, chapter 234, sections 1 and 7, Laws 1978, chapter 788,
220.16section 1, Laws 1981, chapter 369, section 1, Laws 1983, chapter 302, section 1, Laws
220.171988, chapter 513, section 1, Laws 1992, chapter 511, article 9, section 23, Laws 1998,
220.18chapter 389, article 3, section 27, and Laws 2002, chapter 390, section 23, is amended to
220.19read:
220.20    Subd. 2. For each of the years 2003 to 2013 to 2024, the city of St. Paul is
220.21authorized to issue bonds in the aggregate principal amount of $20,000,000 for each year.
220.22EFFECTIVE DATE.This section is effective the day after compliance by the
220.23governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
220.24subdivisions 2 and 3.

220.25    Sec. 19. CARRYFORWARD OF BONDING AUTHORITY FOR 2011; NO
220.26DEDUCTION FROM ENTITLEMENT ALLOCATION.
220.27    Notwithstanding Minnesota Statutes, section 474A.04, subdivision 1a, bonding
220.28authority that was allocated to an entitlement issuer in 2011 and that was carried forward
220.29under federal tax law, but for which the entitlement issuer did not provide a notice of issue
220.30to the commissioner of management and budget before 4:30 p.m. on the last business
220.31day of December 2012 must not be deducted from the entitlement allocation for that
220.32entitlement issuer in 2013.
221.1EFFECTIVE DATE.This section is effective the day following final enactment
221.2and applies retroactively to rescind any reallocation by the commissioner of management
221.3and budget under Minnesota Statues, section 474A.04, subdivision 1a, of any amounts so
221.4deducted.


221.7    Section 1. Minnesota Statutes 2012, section 163.051, is amended to read:
221.8163.051 METROPOLITAN COUNTY WHEELAGE TAX.
221.9    Subdivision 1. Tax authorized. (a) Except as provided in paragraph (b) (c), the
221.10board of commissioners of each metropolitan county is authorized to levy by resolution a
221.11wheelage tax of $5 for the year 1972 and each subsequent year thereafter by resolution
221.12 at the rate specified in paragraph (b), on each motor vehicle that is kept in such county
221.13when not in operation and that is subject to annual registration and taxation under chapter
221.14168. The board may provide by resolution for collection of the wheelage tax by county
221.15officials or it may request that the tax be collected by the state registrar of motor vehicles,
221.16and. The state registrar of motor vehicles shall collect such tax on behalf of the county if
221.17requested, as provided in subdivision 2.
221.18    (b) The wheelage tax under this section is at the rate of:
221.19(1) from January 1, 2014, through December 31, 2017, $10 per year for each county
221.20that authorizes the tax; and
221.21(2) on and after January 1, 2018, up to $20 per year, in any increment of a whole
221.22dollar, as specified by each county that authorizes the tax.
221.23    (c) The following vehicles are exempt from the wheelage tax:
221.24    (1) motorcycles, as defined in section 169.011, subdivision 44;
221.25    (2) motorized bicycles, as defined in section 169.011, subdivision 45; and
221.26    (3) electric-assisted bicycles, as defined in section 169.011, subdivision 27; and
221.27    (4) (3) motorized foot scooters, as defined in section 169.011, subdivision 46.
221.28(d) For any county that authorized the tax prior to the effective date of this section,
221.29the wheelage tax continues at the rate provided under paragraph (b).
221.30    Subd. 2. Collection by registrar of motor vehicles. The wheelage tax levied by
221.31any metropolitan county, if made collectible by the state registrar of motor vehicles,
221.32shall be certified by the county auditor to the registrar not later than August 1 in the year
221.33before the calendar year or years for which the tax is levied, and the registrar shall collect
221.34such tax with the motor vehicle taxes on the affected vehicles for such year or years.
222.1Every owner and every operator of such a motor vehicle shall furnish to the registrar all
222.2information requested by the registrar. No state motor vehicle tax on any such motor
222.3vehicle for any such year shall be received or deemed paid unless the applicable wheelage
222.4tax is paid therewith. The proceeds of the wheelage tax levied by any metropolitan county,
222.5less any amount retained by the registrar to pay costs of collection of the wheelage tax,
222.6shall be paid to the commissioner of management and budget and deposited in the state
222.7treasury to the credit of the county wheelage tax fund of each metropolitan county.
222.8    Subd. 2a. Tax proceeds deposited; costs of collection; appropriation.
222.9Notwithstanding the provisions of any other law, the state registrar of motor vehicles shall
222.10deposit the proceeds of the wheelage tax imposed by subdivision 2, to the credit of the
222.11county wheelage tax fund account of each metropolitan county. The amount necessary to
222.12pay the costs of collection of said tax is appropriated from the county wheelage tax fund
222.13 account of each metropolitan county to the state registrar of motor vehicles.
222.14    Subd. 3. Distribution to metropolitan county; appropriation. On or before
222.15April 1 in 1972 and each subsequent year, the commissioner of management and budget
222.16 On a monthly basis, the registrar of motor vehicles shall issue a warrant in favor of the
222.17treasurer of each metropolitan county for which the registrar has collected a wheelage tax
222.18in the amount of such tax then on hand in the county wheelage tax fund account. There
222.19is hereby appropriated from the county wheelage tax fund account each year, to each
222.20metropolitan county entitled to payments authorized by this section, sufficient moneys
222.21to make such payments.
222.22    Subd. 4. Use of tax. The treasurer of each metropolitan county receiving moneys
222.23 payments under subdivision 3 shall deposit such moneys payments in the county road and
222.24bridge fund. The moneys shall be used for purposes authorized by law which are highway
222.25purposes within the meaning of the Minnesota Constitution, article 14.
222.26    Subd. 6. Metropolitan county defined. "Metropolitan county" means any of the
222.27counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
222.28    Subd. 7. Offenses; penalties; application of other laws. (a) Any owner or operator
222.29of a motor vehicle who shall willfully give gives any false information relative to the tax
222.30herein authorized by this section to the registrar of motor vehicles or any metropolitan
222.31 county, or who shall willfully fail or refuse fails or refuses to furnish any such information,
222.32shall be is guilty of a misdemeanor.
222.33(b) Except as otherwise herein provided in this section, the collection and payment
222.34of a wheelage tax and all matters relating thereto shall be are subject to all provisions of
222.35law relating to collection and payment of motor vehicle taxes so far as applicable.
223.1EFFECTIVE DATE.This section is effective the day following final enactment
223.2and applies to a registration period under Minnesota Statutes, chapter 168, starting on
223.3or after January 1, 2014.

223.4    Sec. 2. Minnesota Statutes 2012, section 237.52, subdivision 3, is amended to read:
223.5    Subd. 3. Collection. Every provider of services capable of originating a TRS call,
223.6including cellular communications and other nonwire access services, in this state shall,
223.7except as provided in subdivision 3a, collect the charges established by the commission
223.8under subdivision 2 and transfer amounts collected to the commissioner of public
223.9safety in the same manner as provided in section 403.11, subdivision 1, paragraph (d).
223.10The commissioner of public safety must deposit the receipts in the fund established in
223.11subdivision 1.
223.12EFFECTIVE DATE.This section is effective January 1, 2014.

223.13    Sec. 3. Minnesota Statutes 2012, section 237.52, is amended by adding a subdivision
223.14to read:
223.15    Subd. 3a. Fee for prepaid wireless telecommunications service. The fee
223.16established in subdivision 2 does not apply to prepaid wireless telecommunications
223.17services as defined in section 403.02, subdivision 17b, which are instead subject to the
223.18prepaid wireless telecommunications access Minnesota fee established in section 403.161,
223.19subdivision 1, paragraph (b). Collection, remittance, and deposit of prepaid wireless
223.20telecommunications access Minnesota fees are governed by sections 403.161 and 403.162.
223.21EFFECTIVE DATE.This section is effective January 1, 2014.

223.22    Sec. 4. Minnesota Statutes 2012, section 270B.01, subdivision 8, is amended to read:
223.23    Subd. 8. Minnesota tax laws. For purposes of this chapter only, unless expressly
223.24stated otherwise, "Minnesota tax laws" means:
223.25    (1) the taxes, refunds, and fees administered by or paid to the commissioner under
223.26chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24),
223.27290, 290A, 291, 295, 297A, 297B, and 297H, and 403, or any similar Indian tribal tax
223.28administered by the commissioner pursuant to any tax agreement between the state and
223.29the Indian tribal government, and includes any laws for the assessment, collection, and
223.30enforcement of those taxes, refunds, and fees; and
223.31    (2) section 273.1315.
223.32EFFECTIVE DATE.This section is effective January 1, 2014.

224.1    Sec. 5. Minnesota Statutes 2012, section 270B.12, subdivision 4, is amended to read:
224.2    Subd. 4. Department of Public Safety. The commissioner may disclose return
224.3information to the Department of Public Safety for the purpose of and to the extent
224.4necessary to administer section sections 270C.725 and 403.16 to 403.162.
224.5EFFECTIVE DATE.This section is effective January 1, 2014.

224.6    Sec. 6. Minnesota Statutes 2012, section 271.06, is amended by adding a subdivision
224.7to read:
224.8    Subd. 2a. Timely mailing treated as timely filing. (a) If, after the period prescribed
224.9by subdivision 2, the original notice of appeal, proof of service upon the commissioner,
224.10and filing fee are delivered by mail in the United States to the Tax Court administrator
224.11or the court administrator of district court acting as court administrator of the Tax Court,
224.12then the date of filing is the date of the United States postmark stamped on the envelope
224.13or other appropriate wrapper in which the notice of appeal, proof of service upon the
224.14commissioner, and filing fee are mailed.
224.15(b) This subdivision applies only if the postmark date falls within the period
224.16prescribed by subdivision 2 and the original notice of appeal, proof of service upon the
224.17commissioner, and filing fee are deposited in the mail in the United States in an envelope
224.18or other appropriate wrapper, postage prepaid, properly addressed to the Tax Court
224.19administrator or the court administrator of district court acting as court administrator of
224.20the Tax Court.
224.21(c) Only the postmark of the United States Postal Service qualifies as proof of
224.22timely mailing under this subdivision. Private postage meters do not qualify as proof of
224.23timely filing under this subdivision. If the original notice of appeal, proof of service
224.24upon the commissioner, and filing fee are sent by United States registered mail, the date
224.25of registration is the postmark date. If the original notice of appeal, proof of service
224.26upon the commissioner, and filing fee are sent by United States certified mail and the
224.27sender's receipt is postmarked by the postal employee to whom the envelope containing
224.28the original notice of appeal, proof of service upon the commissioner, and filing fee is
224.29presented, the date of the United States postmark on the receipt is the postmark date.
224.30(d) A reference in this section to mail in the United States must be treated as
224.31including a reference to any designated delivery service and a reference in this section to
224.32a postmark by the United States Postal Service must be treated as including a reference
224.33to any date recorded or marked by any designated delivery service in accordance with
224.34section 7502(f) of the Internal Revenue Code.
225.1EFFECTIVE DATE.This section is effective for filings delivered by the United
225.2States Postal Service with a postmark date after August 1, 2013.

225.3    Sec. 7. Minnesota Statutes 2012, section 297E.021, subdivision 2, is amended to read:
225.4    Subd. 2. Determination of revenue increase. By March 15 of each fiscal year, the
225.5commissioner of management and budget, in consultation with the commissioner, shall
225.6determine the estimated increase in revenues received from (1) taxes imposed under this
225.7chapter, and (2) the taxes imposed under section 295.61 and the amendments to section
225.8297A.61, subdivision 3, under article 8, section 1, of this act, over (3) the estimated
225.9revenues under the February 2012 state budget forecast from the taxes imposed under this
225.10chapter for that fiscal year. For fiscal years after fiscal year 2015, the commissioner of
225.11management and budget shall use the February 2012 state budget forecast for fiscal year
225.122015 for the amount of taxes collected under this chapter as the baseline. All calculations
225.13under this subdivision must be made net of estimated refunds of the taxes required to be
225.14paid.
225.15EFFECTIVE DATE.This section is effective the day following final enactment.

225.16    Sec. 8. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision
225.17to read:
225.18    Subd. 17b. Prepaid wireless telecommunications service. "Prepaid wireless
225.19telecommunications service" means a wireless telecommunications service that allows the
225.20caller to dial 911 to access the 911 system, which service must be paid for in advance and is:
225.21(1) sold in predetermined units or dollars of which the number declines with use in a
225.22known amount; or
225.23(2) provides unlimited use for a predetermined time period.
225.24The inclusion of nontelecommunications services, including the download of digital
225.25products delivered electronically, content, and ancillary services, with a prepaid wireless
225.26telecommunications service does not preclude that service from being considered a
225.27prepaid wireless telecommunications service under this chapter.
225.28EFFECTIVE DATE.This section is effective January 1, 2014.

225.29    Sec. 9. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision
225.30to read:
225.31    Subd. 20a. Wireless telecommunications service. Wireless telecommunications
225.32service means a commercial mobile radio service, as that term is defined in United
226.1States Code, title 47, section 332, subsection (d), including all broadband personal
226.2communication services, wireless radio telephone services, and geographic area
226.3specialized mobile radio licensees, that offer real-time, two-way voice service
226.4interconnected with the public switched telephone network.
226.5EFFECTIVE DATE.This section is effective January 1, 2014.

226.6    Sec. 10. Minnesota Statutes 2012, section 403.02, subdivision 21, is amended to read:
226.7    Subd. 21. Wireless telecommunications service provider. "Wireless
226.8telecommunications service provider" means a provider of commercial mobile radio
226.9services, as that term is defined in United States Code, title 47, section 332, subsection
226.10(d), including all broadband personal communications services, wireless radio telephone
226.11services, geographic area specialized and enhanced specialized mobile radio services, and
226.12incumbent wide area specialized mobile radio licensees, that offers real-time, two-way
226.13voice service interconnected with the public switched telephone network and that is doing
226.14business in the state of Minnesota wireless telecommunications service.
226.15EFFECTIVE DATE.This section is effective January 1, 2014.

226.16    Sec. 11. Minnesota Statutes 2012, section 403.06, subdivision 1a, is amended to read:
226.17    Subd. 1a. Biennial budget; annual financial report. The commissioner shall
226.18prepare a biennial budget for maintaining the 911 system. By December 15 of each year,
226.19the commissioner shall submit a report to the legislature detailing the expenditures for
226.20maintaining the 911 system, the 911 fees collected, the balance of the 911 fund, and the
226.21911-related administrative expenses of the commissioner, and the most recent forecast of
226.22revenues and expenditures for the 911 emergency telecommunications service account,
226.23including a separate projection of E911 fees from prepaid wireless customers and
226.24projections of year-end fund balances. The commissioner is authorized to expend money
226.25that has been appropriated to pay for the maintenance, enhancements, and expansion
226.26of the 911 system.
226.27EFFECTIVE DATE.This section is effective the day following final enactment.

226.28    Sec. 12. Minnesota Statutes 2012, section 403.11, subdivision 1, is amended to read:
226.29    Subdivision 1. Emergency telecommunications service fee; account. (a) Each
226.30customer of a wireless or wire-line switched or packet-based telecommunications service
226.31provider connected to the public switched telephone network that furnishes service capable
226.32of originating a 911 emergency telephone call is assessed a fee based upon the number
227.1of wired or wireless telephone lines, or their equivalent, to cover the costs of ongoing
227.2maintenance and related improvements for trunking and central office switching equipment
227.3for 911 emergency telecommunications service, to offset administrative and staffing costs
227.4of the commissioner related to managing the 911 emergency telecommunications service
227.5program, to make distributions provided for in section 403.113, and to offset the costs,
227.6including administrative and staffing costs, incurred by the State Patrol Division of the
227.7Department of Public Safety in handling 911 emergency calls made from wireless phones.
227.8    (b) Money remaining in the 911 emergency telecommunications service account
227.9after all other obligations are paid must not cancel and is carried forward to subsequent
227.10years and may be appropriated from time to time to the commissioner to provide financial
227.11assistance to counties for the improvement of local emergency telecommunications
227.12services. The improvements may include providing access to 911 service for
227.13telecommunications service subscribers currently without access and upgrading existing
227.14911 service to include automatic number identification, local location identification,
227.15automatic location identification, and other improvements specified in revised county
227.16911 plans approved by the commissioner.
227.17    (c) The fee may not be less than eight cents nor more than 65 cents a month until
227.18June 30, 2008, not less than eight cents nor more than 75 cents a month until June 30,
227.192009, not less than eight cents nor more than 85 cents a month until June 30, 2010, and
227.20not less than eight cents nor more than 95 cents a month on or after July 1, 2010, for
227.21each customer access line or other basic access service, including trunk equivalents as
227.22designated by the Public Utilities Commission for access charge purposes and including
227.23wireless telecommunications services. With the approval of the commissioner of
227.24management and budget, the commissioner of public safety shall establish the amount of
227.25the fee within the limits specified and inform the companies and carriers of the amount to
227.26be collected. When the revenue bonds authorized under section 403.27, subdivision 1,
227.27have been fully paid or defeased, the commissioner shall reduce the fee to reflect that debt
227.28service on the bonds is no longer needed. The commissioner shall provide companies and
227.29carriers a minimum of 45 days' notice of each fee change. The fee must be the same for all
227.30customers, except that the fee imposed under this subdivision does not apply to prepaid
227.31wireless telecommunications service, which is instead subject to the fee imposed under
227.32section 403.161, subdivision 1, paragraph (a).
227.33    (d) The fee must be collected by each wireless or wire-line telecommunications
227.34service provider subject to the fee. Fees are payable to and must be submitted to the
227.35commissioner monthly before the 25th of each month following the month of collection,
227.36except that fees may be submitted quarterly if less than $250 a month is due, or annually if
228.1less than $25 a month is due. Receipts must be deposited in the state treasury and credited
228.2to a 911 emergency telecommunications service account in the special revenue fund. The
228.3money in the account may only be used for 911 telecommunications services.
228.4    (e) This subdivision does not apply to customers of interexchange carriers.
228.5    (f) The installation and recurring charges for integrating wireless 911 calls into
228.6enhanced 911 systems are eligible for payment by the commissioner if the 911 service
228.7provider is included in the statewide design plan and the charges are made pursuant to
228.8contract.
228.9    (g) Competitive local exchanges carriers holding certificates of authority from the
228.10Public Utilities Commission are eligible to receive payment for recurring 911 services.
228.11EFFECTIVE DATE.This section is effective January 1, 2014.

228.12    Sec. 13. Minnesota Statutes 2012, section 403.11, is amended by adding a subdivision
228.13to read:
228.14    Subd. 6. Report. (a) Beginning September 1, 2013, and continuing semiannually
228.15thereafter, each wireless telecommunications service provider shall report to the
228.16commissioner, based on the mobile telephone number, both the total number of prepaid
228.17wireless telecommunications subscribers sourced to Minnesota and the total number of
228.18wireless telecommunications subscribers sourced to Minnesota. The report must be filed
228.19on the same schedule as Federal Communications Commission Form 477.
228.20(b) The commissioner shall make a standard form available to all wireless
228.21telecommunications service providers for submitting information required to compile
228.22the report required under this subdivision.
228.23(c) The information provided to the commissioner under this subdivision is
228.24considered trade secret information under section 13.37 and may only be used for purposes
228.25of administering this chapter.
228.26EFFECTIVE DATE.This section is effective January 1, 2014.

228.27    Sec. 14. [403.16] DEFINITIONS.
228.28    Subdivision 1. Scope. For the purposes of sections 403.16 to 403.164, the terms
228.29defined in this section have the meanings given them.
228.30    Subd. 2. Consumer. "Consumer" means a person who purchases prepaid wireless
228.31telecommunications service in a retail transaction.
228.32    Subd. 3. Department. "Department" means the Department of Revenue.
229.1    Subd. 4. Prepaid wireless E911 fee. "Prepaid wireless E911 fee" means the fee that
229.2is required to be collected by a seller from a consumer as established in section 403.161,
229.3subdivision 1, paragraph (a).
229.4    Subd. 5. Prepaid wireless telecommunications access Minnesota fee. "Prepaid
229.5wireless telecommunications access Minnesota fee" means the fee that is required to be
229.6collected by a seller from a consumer as established in section 403.161, subdivision 1,
229.7paragraph (b).
229.8    Subd. 6. Provider. "Provider" means a person that provides prepaid wireless
229.9telecommunications service under a license issued by the Federal Communications
229.10Commission.
229.11    Subd. 7. Retail transaction. "Retail transaction" means the purchase of prepaid
229.12wireless telecommunications service from a seller for any purpose other than resale.
229.13    Subd. 8. Seller. "Seller" means a person who sells prepaid wireless
229.14telecommunications service to another person.
229.15EFFECTIVE DATE.This section is effective January 1, 2014.

229.16    Sec. 15. [403.161] PREPAID WIRELESS FEES IMPOSED; COLLECTION;
229.17REMITTANCE.
229.18    Subdivision 1. Fees imposed. (a) A prepaid wireless E911 fee of 80 cents per retail
229.19transaction is imposed on prepaid wireless telecommunications service until the fee is
229.20adjusted as an amount per retail transaction under subdivision 7.
229.21(b) A prepaid wireless telecommunications access Minnesota fee, in the amount of
229.22the monthly charge provided for in section 237.52, subdivision 2, is imposed on each
229.23retail transaction for prepaid wireless telecommunications service until the fee is adjusted
229.24as an amount per retail transaction under subdivision 7.
229.25    Subd. 2. Exemption. The fees established under subdivision 1 are not imposed on a
229.26minimal amount of prepaid wireless telecommunications service that is sold with a prepaid
229.27wireless device and is charged a single nonitemized price, and a seller may not apply the
229.28fees to such a transaction. For purposes of this subdivision, a minimal amount of service
229.29means an amount of service denominated as either ten minutes or less or $5 or less.
229.30    Subd. 3. Fee collected. The prepaid wireless E911 and telecommunications
229.31access Minnesota fees must be collected by the seller from the consumer for each retail
229.32transaction occurring in this state. The amount of each fee must be combined into one
229.33amount, which must be separately stated on an invoice, receipt, or other similar document
229.34that is provided to the consumer by the seller, or otherwise disclosed to the consumer.
230.1    Subd. 4. Sales and use tax treatment. For purposes of this section, a retail
230.2transaction conducted in person by a consumer at a business location of the seller must
230.3be treated as occurring in this state if that business location is in this state, and any other
230.4retail transaction must be treated as occurring in this state if the retail transaction is treated
230.5as occurring in this state for purposes of the sales and use tax as specified in section
230.6297A.669, subdivision 3, paragraph (c).
230.7    Subd. 5. Remittance. The prepaid wireless E911 and telecommunications access
230.8Minnesota fees are the liability of the consumer and not of the seller or of any provider,
230.9except that the seller is liable to remit all fees that the seller collects from consumers as
230.10provided in section 403.162, including all fees that the seller is deemed to collect in which
230.11the amount of the fee has not been separately stated on an invoice, receipt, or other similar
230.12document provided to the consumer by the seller.
230.13    Subd. 6. Exclusion for calculating other charges. The combined amount of the
230.14prepaid wireless E911 and telecommunications access Minnesota fees collected by a seller
230.15from a consumer must not be included in the base for measuring any tax, fee, surcharge,
230.16or other charge that is imposed by this state, any political subdivision of this state, or
230.17any intergovernmental agency.
230.18    Subd. 7. Fee changes. (a) The prepaid wireless E911 and telecommunications
230.19access Minnesota fee must be proportionately increased or reduced upon any change to
230.20the fee imposed under section 403.11, subdivision 1, paragraph (c), after July 1, 2013, or
230.21the fee imposed under section 237.52, subdivision 2, as applicable.
230.22(b) The department shall post notice of any fee changes on its Web site at least 30
230.23days in advance of the effective date of the fee changes. It is the responsibility of sellers to
230.24monitor the department's Web site for notice of fee changes.
230.25(c) Fee changes are effective 60 days after the first day of the first calendar month
230.26after the commissioner of public safety or the Public Utilities Commission, as applicable,
230.27changes the fee.
230.28EFFECTIVE DATE.This section is effective January 1, 2014.

230.29    Sec. 16. [403.162] ADMINISTRATION OF PREPAID WIRELESS E911 FEES.
230.30    Subdivision 1. Remittance. Prepaid wireless E911 and telecommunications access
230.31Minnesota fees collected by sellers must be remitted to the commissioner of revenue
230.32at the times and in the manner provided by chapter 297A with respect to the general
230.33sales and use tax. The commissioner of revenue shall establish registration and payment
230.34procedures that substantially coincide with the registration and payment procedures that
230.35apply in chapter 297A.
231.1    Subd. 2. Seller's fee retention. A seller may deduct and retain three percent of
231.2prepaid wireless E911 and telecommunications access Minnesota fees collected by the
231.3seller from consumers.
231.4    Subd. 3. Department of Revenue provisions. The audit, assessment, appeal,
231.5collection, refund, penalty, interest, enforcement, and administrative provisions of
231.6chapters 270C and 289A that are applicable to the taxes imposed by chapter 297A apply
231.7to any fee imposed under section 403.161.
231.8    Subd. 4. Procedures for resale transactions. The commissioner of revenue shall
231.9establish procedures by which a seller of prepaid wireless telecommunications service
231.10may document that a sale is not a retail transaction. These procedures must substantially
231.11coincide with the procedures for documenting sale for resale transactions as provided in
231.12chapter 297A.
231.13    Subd. 5. Fees deposited. (a) The commissioner of revenue shall, based on
231.14the relative proportion of the prepaid wireless E911 fee and the prepaid wireless
231.15telecommunications access Minnesota fee imposed per retail transaction, divide the fees
231.16collected in corresponding proportions. Within 30 days of receipt of the collected fees,
231.17the commissioner shall:
231.18(1) deposit the proportion of the collected fees attributable to the prepaid wireless
231.19E911 fee in the 911 emergency telecommunications service account in the special revenue
231.20fund; and
231.21(2) deposit the proportion of collected fees attributable to the prepaid wireless
231.22telecommunications access Minnesota fee in the telecommunications access fund
231.23established in section 237.52, subdivision 1.
231.24(b) The department may deduct and retain an amount, not to exceed two percent of
231.25collected fees, to reimburse its direct costs of administering the collection and remittance
231.26of prepaid wireless E911 fees and prepaid wireless telecommunications access Minnesota
231.27fees.
231.28EFFECTIVE DATE.This section is effective January 1, 2014.

231.29    Sec. 17. [403.163] LIABILITY PROTECTION FOR SELLERS AND
231.30PROVIDERS.
231.31(a) A provider or seller of prepaid wireless telecommunications service is not liable
231.32for damages to any person resulting from or incurred in connection with providing any
231.33lawful assistance in good faith to any investigative or law enforcement officer of the
231.34United States, this or any other state, or any political subdivision of this or any other state.
232.1(b) In addition to the protection from liability provided by paragraph (a), section
232.2403.08, subdivision 11, applies to sellers and providers.
232.3EFFECTIVE DATE.This section is effective the day following final enactment.

232.4    Sec. 18. [403.164] EXCLUSIVITY OF PREPAID WIRELESS E911 FEE.
232.5The prepaid wireless E911 fee imposed by section 403.161 is the only E911 funding
232.6obligation imposed with respect to prepaid wireless telecommunications service in this
232.7state, and no tax, fee, surcharge, or other charge may be imposed by this state, any political
232.8subdivision of this state, or any intergovernmental agency, for E911 funding purposes,
232.9upon any provider, seller, or consumer with respect to the sale, purchase, use, or provision
232.10of prepaid wireless telecommunications service.
232.11EFFECTIVE DATE.This section is effective January 1, 2014.

232.12    Sec. 19. Laws 2010, First Special Session chapter 1, article 13, section 4, subdivision
232.131, as amended by Laws 2011, First Special Session chapter 7, article 6, section 22, is
232.14amended to read:
232.15    Subdivision 1. Political contribution credit. Notwithstanding the provisions of
232.16Minnesota Statutes, section 290.06, subdivision 23, or any other law to the contrary, the
232.17political contribution refund does not apply to contributions made after June 30, 2009, and
232.18before July 1, 2013 2017.
232.19EFFECTIVE DATE.This section is effective the day following final enactment.

232.20    Sec. 20. REPORT; RECOMMENDATIONS.
232.21(a) By March 1, 2014, the commissioner of public safety shall submit a report to
232.22the chairs and ranking minority members of the legislative committees with primary
232.23jurisdiction over public safety and telecommunications that assesses the amount of
232.24revenue collected from the fees imposed under Minnesota Statutes, section 403.161,
232.25and recommends any adjustment of those fees that the commissioner of public safety
232.26determines is necessary in order to:
232.27(1) fund legislative appropriations from the 911 emergency telecommunications
232.28service account and to maintain a reasonable fund reserve; and
232.29(2) maintain fairness with respect to the amount of fees paid by customers of
232.30prepaid wireless telecommunications service as compared with customers of other
232.31telecommunications services.
233.1(b) A wireless telecommunications service provider shall provide any information
233.2requested by the commissioner of public safety for the purposes of the report.
233.3EFFECTIVE DATE.This section is effective January 1, 2014.

233.4    Sec. 21. PURPOSE STATEMENTS; TAX EXPENDITURES.
233.5    Subdivision 1. Authority. This section is intended to fulfill the requirement under
233.6Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax
233.7expenditure provide a purpose for the tax expenditure and a standard or goal against
233.8which its effectiveness may be measured.
233.9    Subd. 2. Federal conformity. The provisions of article 6 conforming Minnesota
233.10individual income tax to changes in federal law are intended to simplify compliance with
233.11and administration of the individual income tax.
233.12    Subd. 3. Employment of qualified veterans tax credit. The provisions of article 6,
233.13section 32, providing a tax credit for the employment of qualified veterans, are intended to
233.14give an incentive to employers to hire unemployed and disabled veterans. The standard
233.15against which the effectiveness of the credit is to be measured is the additional number of
233.16veterans who are hired as a result of the tax credit.
233.17    Subd. 4. Railroad track maintenance subtraction. The provisions of article 6,
233.18sections 12 and 14, allowing an individual income and corporate franchise tax subtraction
233.19for the amount allowed under the federal credit for railroad maintenance expenses, are
233.20intended to increase the combined federal and state tax incentives available to Class II
233.21and Class III railroads for maintaining and upgrading track in Minnesota. The standard
233.22against which effectiveness is to be measured is the additional miles of track maintained
233.23or upgraded following allowance of the state tax subtraction in addition to the existing
233.24federal tax credit.
233.25    Subd. 5. Sales tax exemption of coin-operated amusement devices. The
233.26provisions of article 8, section 2, exempting certain sales of coin-operated entertainment
233.27and amusement devices is intended to reduce tax pyramiding by eliminating the tax on an
233.28input used in providing a taxable service.
233.29    Subd. 6. Motor vehicle rental tax exemption for car sharing. The provisions of
233.30article 8, section 4, exempting nonprofit car sharing companies from the extra tax on short
233.31term car rentals is intended to provide a similar tax treatment between motor vehicle
233.32ownership and motor vehicle sharing.
233.33    Subd. 7. Expansion of the sales tax exemption on durable medical products and
233.34prosthetics. The provisions of article 8, section 8, expanding the definition of items
233.35included in repair and replacement parts of durable medical equipment and prosthetics
234.1and exempting Medicare and medicaid purchases is intended to simplify sales tax
234.2administration in this area and provide relief for sellers who cannot collect the tax under
234.3these programs.
234.4    Subd. 8. Exemption for public safety radio communication systems. The
234.5provisions of article 8, section 10, expanding the existing sales tax exemption for certain
234.6types of public safety radio systems in certain counties to all types of systems in all
234.7counties is intended to provide equal tax treatment to all local governments in the state
234.8on these purchases.
234.9    Subd. 9. Sales tax exemption for established religious orders. The provisions of
234.10article 8, section 11, exempting certain sales between a religious order and an affiliated
234.11institute of higher education, is intended to retain an existing sales tax exemption that
234.12exists between St. John's Abbey and St. John's University after a governing restructure
234.13between the two entities.
234.14    Subd. 10. Sales tax exemption for nursing homes and boarding care homes.
234.15The provisions of article 8, section 12, exempting certain nursing homes and boarding
234.16care homes is intended to clarify that an existing exemption for these facilities is not
234.17affected by a recent property tax case related to defining nonprofit organizations engaged
234.18in charitable activities.
234.19    Subd. 11. Construction sales tax exemptions. The provisions of article 8, sections
234.2013, 14, and 15, exempting from sales tax construction materials for various entities, are
234.21intended to increase jobs and reduce tax pyramiding by reducing the tax on inputs used to
234.22provide taxable goods and services.
234.23    Subd. 12. Sales tax exemption on certain public infrastructure. The provisions
234.24of article 10, section 1, exempting construction materials used in public infrastructure
234.25projects related to the destination medical center plan is intended to reduce city costs
234.26for those projects.
234.27EFFECTIVE DATE.This section is effective the day following final enactment.


234.30    Section 1. Minnesota Statutes 2012, section 38.18, is amended to read:
234.3138.18 COUNTY FAIRGROUNDS; IMPROVEMENT AIDED.
234.32    Any Each town, statutory city, or school district in this state, now or hereafter at any
234.33time having a an estimated market value of all its taxable property, exclusive of money and
234.34credits, of more than $105,000,000, and having a county fair located within its corporate
235.1limits, is hereby authorized to aid in defraying may pay part of the expense of improving
235.2any such the fairground, by appropriating and paying over to the treasurer of the county
235.3owning the fairground such sum of money, not exceeding $10,000, for each of the political
235.4subdivisions, as the its governing body of the town, statutory city, or school district may,
235.5by resolution, determine determines to be for the best interest of the political subdivision,.
235.6 The sums so appropriated to amounts paid to the county must be used solely for the purpose
235.7of aiding in the improvement of to improve the fairground in such the manner as the county
235.8board of the county shall determine determines to be for the best interest of the county.

235.9    Sec. 2. Minnesota Statutes 2012, section 40A.15, subdivision 2, is amended to read:
235.10    Subd. 2. Eligible recipients. All counties within the state, municipalities that prepare
235.11plans and official controls instead of a county, and districts are eligible for assistance
235.12under the program. Counties and districts may apply for assistance on behalf of other
235.13municipalities. In order to be eligible for financial assistance a county or municipality must
235.14agree to levy at least 0.01209 percent of taxable estimated market value for agricultural
235.15land preservation and conservation activities or otherwise spend the equivalent amount of
235.16local money on those activities, or spend $15,000 of local money, whichever is less.

235.17    Sec. 3. Minnesota Statutes 2012, section 69.011, subdivision 1, is amended to read:
235.18    Subdivision 1. Definitions. Unless the language or context clearly indicates that
235.19a different meaning is intended, the following words and terms, for the purposes of this
235.20chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
235.21    (a) "Commissioner" means the commissioner of revenue.
235.22    (b) "Municipality" means:
235.23    (1) a home rule charter or statutory city;
235.24    (2) an organized town;
235.25    (3) a park district subject to chapter 398;
235.26    (4) the University of Minnesota;
235.27    (5) for purposes of the fire state aid program only, an American Indian tribal
235.28government entity located within a federally recognized American Indian reservation;
235.29    (6) for purposes of the police state aid program only, an American Indian tribal
235.30government with a tribal police department which exercises state arrest powers under
235.31section 626.90, 626.91, 626.92, or 626.93;
235.32    (7) for purposes of the police state aid program only, the Metropolitan Airports
235.33Commission; and
236.1    (8) for purposes of the police state aid program only, the Department of Natural
236.2Resources and the Department of Public Safety with respect to peace officers covered
236.3under chapter 352B.
236.4    (c) "Minnesota Firetown Premium Report" means a form prescribed by the
236.5commissioner containing space for reporting by insurers of fire, lightning, sprinkler
236.6leakage and extended coverage premiums received upon risks located or to be performed
236.7in this state less return premiums and dividends.
236.8    (d) "Firetown" means the area serviced by any municipality having a qualified fire
236.9department or a qualified incorporated fire department having a subsidiary volunteer
236.10firefighters' relief association.
236.11    (e) "Estimated market value" means latest available estimated market value of all
236.12property in a taxing jurisdiction, whether the property is subject to taxation, or exempt
236.13from ad valorem taxation obtained from information which appears on abstracts filed with
236.14the commissioner of revenue or equalized by the State Board of Equalization.
236.15    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the
236.16commissioner for reporting by each fire and casualty insurer of all premiums received
236.17upon direct business received by it in this state, or by its agents for it, in cash or otherwise,
236.18during the preceding calendar year, with reference to insurance written for insuring against
236.19the perils contained in auto insurance coverages as reported in the Minnesota business
236.20schedule of the annual financial statement which each insurer is required to file with
236.21the commissioner in accordance with the governing laws or rules less return premiums
236.22and dividends.
236.23    (g) "Peace officer" means any person:
236.24    (1) whose primary source of income derived from wages is from direct employment
236.25by a municipality or county as a law enforcement officer on a full-time basis of not less
236.26than 30 hours per week;
236.27    (2) who has been employed for a minimum of six months prior to December 31
236.28preceding the date of the current year's certification under subdivision 2, clause (b);
236.29    (3) who is sworn to enforce the general criminal laws of the state and local ordinances;
236.30    (4) who is licensed by the Peace Officers Standards and Training Board and is
236.31authorized to arrest with a warrant; and
236.32    (5) who is a member of the State Patrol retirement plan or the public employees
236.33police and fire fund.
236.34    (h) "Full-time equivalent number of peace officers providing contract service" means
236.35the integral or fractional number of peace officers which would be necessary to provide
237.1the contract service if all peace officers providing service were employed on a full-time
237.2basis as defined by the employing unit and the municipality receiving the contract service.
237.3    (i) "Retirement benefits other than a service pension" means any disbursement
237.4authorized under section 424A.05, subdivision 3, clauses (3) and (4).
237.5    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means:
237.6    (1) for the police state aid program and police relief association financial reports:
237.7    (i) the person who was elected or appointed to the specified position or, in the
237.8absence of the person, another person who is designated by the applicable governing body;
237.9    (ii) in a park district, the secretary of the board of park district commissioners;
237.10    (iii) in the case of the University of Minnesota, the official designated by the Board
237.11of Regents;
237.12    (iv) for the Metropolitan Airports Commission, the person designated by the
237.13commission;
237.14    (v) for the Department of Natural Resources or the Department of Public Safety, the
237.15respective commissioner;
237.16    (vi) for a tribal police department which exercises state arrest powers under section
237.17626.90 , 626.91, 626.92, or 626.93, the person designated by the applicable American
237.18Indian tribal government; and
237.19    (2) for the fire state aid program and fire relief association financial reports, the
237.20person who was elected or appointed to the specified position, or, for governmental
237.21entities other than counties, if the governing body of the governmental entity designates
237.22the position to perform the function, the chief financial official of the governmental entity
237.23or the chief administrative official of the governmental entity.
237.24    (k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the
237.25retirement plan established by chapter 353G.

237.26    Sec. 4. Minnesota Statutes 2012, section 69.021, subdivision 7, is amended to read:
237.27    Subd. 7. Apportionment of fire state aid to municipalities and relief associations.
237.28    (a) The commissioner shall apportion the fire state aid relative to the premiums reported
237.29on the Minnesota Firetown Premium Reports filed under this chapter to each municipality
237.30and/or firefighters relief association.
237.31    (b) The commissioner shall calculate an initial fire state aid allocation amount for
237.32each municipality or fire department under paragraph (c) and a minimum fire state aid
237.33allocation amount for each municipality or fire department under paragraph (d). The
237.34municipality or fire department must receive the larger fire state aid amount.
238.1    (c) The initial fire state aid allocation amount is the amount available for
238.2apportionment as fire state aid under subdivision 5, without inclusion of any additional
238.3funding amount to support a minimum fire state aid amount under section 423A.02,
238.4subdivision 3 , allocated one-half in proportion to the population as shown in the last official
238.5statewide federal census for each fire town and one-half in proportion to the estimated
238.6market value of each fire town, including (1) the estimated market value of tax-exempt
238.7property and (2) the estimated market value of natural resources lands receiving in lieu
238.8payments under sections 477A.11 to 477A.14, but excluding the estimated market value
238.9of minerals. In the case of incorporated or municipal fire departments furnishing fire
238.10protection to other cities, towns, or townships as evidenced by valid fire service contracts
238.11filed with the commissioner, the distribution must be adjusted proportionately to take
238.12into consideration the crossover fire protection service. Necessary adjustments must be
238.13made to subsequent apportionments. In the case of municipalities or independent fire
238.14departments qualifying for the aid, the commissioner shall calculate the state aid for the
238.15municipality or relief association on the basis of the population and the estimated market
238.16value of the area furnished fire protection service by the fire department as evidenced by
238.17duly executed and valid fire service agreements filed with the commissioner. If one or
238.18more fire departments are furnishing contracted fire service to a city, town, or township,
238.19only the population and estimated market value of the area served by each fire department
238.20may be considered in calculating the state aid and the fire departments furnishing service
238.21shall enter into an agreement apportioning among themselves the percent of the population
238.22and the estimated market value of each service area. The agreement must be in writing
238.23and must be filed with the commissioner.
238.24    (d) The minimum fire state aid allocation amount is the amount in addition to the
238.25initial fire state allocation amount that is derived from any additional funding amount
238.26to support a minimum fire state aid amount under section 423A.02, subdivision 3, and
238.27allocated to municipalities with volunteer firefighters relief associations or covered by the
238.28voluntary statewide lump-sum volunteer firefighter retirement plan based on the number
238.29of active volunteer firefighters who are members of the relief association as reported
238.30in the annual financial reporting for the calendar year 1993 to the Office of the State
238.31Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or
238.32fire departments with volunteer firefighters relief associations receive in total at least a
238.33minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of
238.3430 firefighters. If a relief association is established after calendar year 1993 and before
238.35calendar year 2000, the number of active volunteer firefighters who are members of the
238.36relief association as reported in the annual financial reporting for calendar year 1998
239.1to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters,
239.2shall be used in this determination. If a relief association is established after calendar
239.3year 1999, the number of active volunteer firefighters who are members of the relief
239.4association as reported in the first annual financial reporting submitted to the Office of
239.5the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this
239.6determination. If a relief association is terminated as a result of providing retirement
239.7coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer
239.8firefighter retirement plan under chapter 353G, the number of active volunteer firefighters
239.9of the municipality covered by the statewide plan as certified by the executive director of
239.10the Public Employees Retirement Association to the commissioner and the state auditor,
239.11but not to exceed 30 active firefighters, must be used in this determination.
239.12    (e) Unless the firefighters of the applicable fire department are members of the
239.13voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must
239.14be paid to the treasurer of the municipality where the fire department is located and the
239.15treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit
239.16the aid to the relief association if the relief association has filed a financial report with the
239.17treasurer of the municipality and has met all other statutory provisions pertaining to the
239.18aid apportionment. If the firefighters of the applicable fire department are members of
239.19the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid
239.20must be paid to the executive director of the Public Employees Retirement Association
239.21and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.
239.22    (f) The commissioner may make rules to permit the administration of the provisions
239.23of this section.
239.24    (g) Any adjustments needed to correct prior misallocations must be made to
239.25subsequent apportionments.

239.26    Sec. 5. Minnesota Statutes 2012, section 69.021, subdivision 8, is amended to read:
239.27    Subd. 8. Population and estimated market value. (a) In computations relating to
239.28fire state aid requiring the use of population figures, only official statewide federal census
239.29figures are to be used. Increases or decreases in population disclosed by reason of any
239.30special census must not be taken into consideration.
239.31    (b) In calculations relating to fire state aid requiring the use of estimated market
239.32value property figures, only the latest available estimated market value property figures
239.33may be used.

239.34    Sec. 6. Minnesota Statutes 2012, section 88.51, subdivision 3, is amended to read:
240.1    Subd. 3. Determination of estimated market value. In determining the net tax
240.2capacity of property within any taxing district the value of the surface of lands within any
240.3auxiliary forest therein, as determined by the county board under the provisions of section
240.488.48, subdivision 3 , shall, for all purposes except the levying of taxes on lands within any
240.5such forest, be deemed the estimated market value thereof.

240.6    Sec. 7. Minnesota Statutes 2012, section 103B.245, subdivision 3, is amended to read:
240.7    Subd. 3. Tax. After adoption of the ordinance under subdivision 2, a local
240.8government unit may annually levy a tax on all taxable property in the district for the
240.9purposes for which the tax district is established. The tax may not exceed 0.02418 percent
240.10of estimated market value on taxable property located in rural towns other than urban
240.11towns, unless allowed by resolution of the town electors. The proceeds of the tax shall
240.12be paid into a fund reserved for these purposes. Any proceeds remaining in the reserve
240.13fund at the time the tax is terminated or the district is dissolved shall be transferred and
240.14irrevocably pledged to the debt service fund of the local unit to be used solely to reduce
240.15tax levies for bonded indebtedness of taxable property in the district.

240.16    Sec. 8. Minnesota Statutes 2012, section 103B.251, subdivision 8, is amended to read:
240.17    Subd. 8. Tax. (a) For the payment of principal and interest on the bonds issued
240.18under subdivision 7 and the payment required under subdivision 6, the county shall
240.19irrevocably pledge and appropriate the proceeds of a tax levied on all taxable property
240.20located within the territory of the watershed management organization or subwatershed
240.21unit for which the bonds are issued. Each year until the reserve for payment of the bonds
240.22is sufficient to retire the bonds, the county shall levy on all taxable property in the territory
240.23of the organization or unit, without respect to any statutory or other limitation on taxes, an
240.24amount of taxes sufficient to pay principal and interest on the bonds and to restore any
240.25deficiencies in reserves required to be maintained for payment of the bonds.
240.26    (b) The tax levied on rural towns other than urban towns may not exceed 0.02418
240.27percent of taxable estimated market value, unless approved by resolution of the town
240.28electors.
240.29    (c) If at any time the amounts available from the levy on property in the territory of
240.30the organization are insufficient to pay principal and interest on the bonds when due, the
240.31county shall make payment from any available funds in the county treasury.
240.32    (d) The amount of any taxes which are required to be levied outside of the territory
240.33of the watershed management organization or unit or taken from the general funds of the
241.1county to pay principal or interest on the bonds shall be reimbursed to the county from
241.2taxes levied within the territory of the watershed management organization or unit.

241.3    Sec. 9. Minnesota Statutes 2012, section 103B.635, subdivision 2, is amended to read:
241.4    Subd. 2. Municipal funding of district. (a) The governing body or board of
241.5supervisors of each municipality in the district must provide the funds necessary to meet
241.6its proportion of the total cost determined by the board, provided the total funding from
241.7all municipalities in the district for the costs shall not exceed an amount equal to .00242
241.8percent of the total taxable estimated market value within the district, unless three-fourths
241.9of the municipalities in the district pass a resolution concurring to the additional costs.
241.10    (b) The funds must be deposited in the treasury of the district in amounts and at
241.11times as the treasurer of the district requires.

241.12    Sec. 10. Minnesota Statutes 2012, section 103B.691, subdivision 2, is amended to read:
241.13    Subd. 2. Municipal funding of district. (a) The governing body or board of
241.14supervisors of each municipality in the district shall provide the funds necessary to meet its
241.15proportion of the total cost to be borne by the municipalities as finally certified by the board.
241.16    (b) The municipality's funds may be raised by any means within the authority of
241.17the municipality. The municipalities may each levy a tax not to exceed .02418 percent of
241.18taxable estimated market value on the taxable property located in the district to provide
241.19the funds. The levy shall be within all other limitations provided by law.
241.20    (c) The funds must be deposited into the treasury of the district in amounts and at
241.21times as the treasurer of the district requires.

241.22    Sec. 11. Minnesota Statutes 2012, section 103D.905, subdivision 2, is amended to read:
241.23    Subd. 2. Organizational expense fund. (a) An organizational expense fund,
241.24consisting of an ad valorem tax levy, shall not exceed 0.01596 percent of taxable estimated
241.25 market value, or $60,000, whichever is less. The money in the fund shall be used for
241.26organizational expenses and preparation of the watershed management plan for projects.
241.27    (b) The managers may borrow from the affected counties up to 75 percent of the
241.28anticipated funds to be collected from the organizational expense fund levy and the
241.29counties affected may make the advancements.
241.30    (c) The advancement of anticipated funds shall be apportioned among affected
241.31counties in the same ratio as the net tax capacity of the area of the counties within
241.32the watershed district bears to the net tax capacity of the entire watershed district. If a
242.1watershed district is enlarged, an organizational expense fund may be levied against the
242.2area added to the watershed district in the same manner as provided in this subdivision.
242.3    (d) Unexpended funds collected for the organizational expense may be transferred to
242.4the administrative fund and used for the purposes of the administrative fund.

242.5    Sec. 12. Minnesota Statutes 2012, section 103D.905, subdivision 3, is amended to read:
242.6    Subd. 3. General fund. A general fund, consisting of an ad valorem tax levy, may
242.7not exceed 0.048 percent of taxable estimated market value, or $250,000, whichever is
242.8less. The money in the fund shall be used for general administrative expenses and for
242.9the construction or implementation and maintenance of projects of common benefit to
242.10the watershed district. The managers may make an annual levy for the general fund as
242.11provided in section 103D.911. In addition to the annual general levy, the managers may
242.12annually levy a tax not to exceed 0.00798 percent of taxable estimated market value
242.13for a period not to exceed 15 consecutive years to pay the cost attributable to the basic
242.14water management features of projects initiated by petition of a political subdivision
242.15within the watershed district or by petition of at least 50 resident owners whose property
242.16is within the watershed district.

242.17    Sec. 13. Minnesota Statutes 2012, section 103D.905, subdivision 8, is amended to read:
242.18    Subd. 8. Survey and data acquisition fund. (a) A survey and data acquisition fund
242.19is established and used only if other funds are not available to the watershed district to pay
242.20for making necessary surveys and acquiring data.
242.21    (b) The survey and data acquisition fund consists of the proceeds of a property tax
242.22that can be levied only once every five years. The levy may not exceed 0.02418 percent of
242.23taxable estimated market value.
242.24    (c) The balance of the survey and data acquisition fund may not exceed $50,000.
242.25    (d) In a subsequent proceeding for a project where a survey has been made, the
242.26attributable cost of the survey as determined by the managers shall be included as a part of
242.27the cost of the work and the sum shall be repaid to the survey and data acquisition fund.

242.28    Sec. 14. Minnesota Statutes 2012, section 117.025, subdivision 7, is amended to read:
242.29    Subd. 7. Structurally substandard. "Structurally substandard" means a building:
242.30    (1) that was inspected by the appropriate local government and cited for one or more
242.31enforceable housing, maintenance, or building code violations;
242.32    (2) in which the cited building code violations involve one or more of the following:
242.33    (i) a roof and roof framing element;
243.1    (ii) support walls, beams, and headers;
243.2    (iii) foundation, footings, and subgrade conditions;
243.3    (iv) light and ventilation;
243.4    (v) fire protection, including egress;
243.5    (vi) internal utilities, including electricity, gas, and water;
243.6    (vii) flooring and flooring elements; or
243.7    (viii) walls, insulation, and exterior envelope;
243.8    (3) in which the cited housing, maintenance, or building code violations have not
243.9been remedied after two notices to cure the noncompliance; and
243.10    (4) has uncured housing, maintenance, and building code violations, satisfaction of
243.11which would cost more than 50 percent of the assessor's taxable estimated market value
243.12for the building, excluding land value, as determined under section 273.11 for property
243.13taxes payable in the year in which the condemnation is commenced.
243.14A local government is authorized to seek from a judge or magistrate an administrative
243.15warrant to gain access to inspect a specific building in a proposed development or
243.16redevelopment area upon showing of probable cause that a specific code violation has
243.17occurred and that the violation has not been cured, and that the owner has denied the local
243.18government access to the property. Items of evidence that may support a conclusion of
243.19probable cause may include recent fire or police inspections, housing inspection, exterior
243.20evidence of deterioration, or other similar reliable evidence of deterioration in the specific
243.21building.

243.22    Sec. 15. Minnesota Statutes 2012, section 127A.48, subdivision 1, is amended to read:
243.23    Subdivision 1. Computation. The Department of Revenue must annually conduct
243.24an assessment/sales ratio study of the taxable property in each county, city, town, and
243.25school district in accordance with the procedures in subdivisions 2 and 3. Based upon the
243.26results of this assessment/sales ratio study, the Department of Revenue must determine an
243.27aggregate equalized net tax capacity for the various classes of taxable property in each
243.28taxing district, the aggregate of which tax capacity shall be is designated as the adjusted net
243.29tax capacity. The adjusted net tax capacity must be reduced by the captured tax capacity of
243.30tax increment districts under section 469.177, subdivision 2, fiscal disparities contribution
243.31tax capacities under sections 276A.06 and 473F.08, and the tax capacity of transmission
243.32lines required to be subtracted from the local tax base under section 273.425; and increased
243.33by fiscal disparities distribution tax capacities under sections 276A.06 and 473F.08. The
243.34adjusted net tax capacities shall be determined using the net tax capacity percentages in
243.35effect for the assessment year following the assessment year of the study. The Department
244.1of Revenue must make whatever estimates are necessary to account for changes in the
244.2classification system. The Department of Revenue may incur the expense necessary to
244.3make the determinations. The commissioner of revenue may reimburse any county or
244.4governmental official for requested services performed in ascertaining the adjusted net tax
244.5capacity. On or before March 15 annually, the Department of Revenue shall file with the
244.6chair of the Tax Committee of the house of representatives and the chair of the Committee
244.7on Taxes and Tax laws of the senate a report of adjusted net tax capacities for school
244.8districts. On or before June 15 annually, the Department of Revenue shall file its final report
244.9on the adjusted net tax capacities for school districts established by the previous year's
244.10assessments and the current year's net tax capacity percentages with the commissioner of
244.11education and each county auditor for those school districts for which the auditor has the
244.12responsibility for determination of local tax rates. A copy of the report so filed shall be
244.13mailed to the clerk of each school district involved and to the county assessor or supervisor
244.14of assessments of the county or counties in which each school district is located.
244.15EFFECTIVE DATE.This section is effective the day following final enactment.

244.16    Sec. 16. Minnesota Statutes 2012, section 138.053, is amended to read:
244.17138.053 COUNTY HISTORICAL SOCIETY; TAX LEVY; CITIES OR
244.18TOWNS.
244.19    The governing body of any home rule charter or statutory city or town may annually
244.20appropriate from its general fund an amount not to exceed 0.02418 percent of taxable
244.21 estimated market value, derived from ad valorem taxes on property or other revenues, to
244.22be paid to the historical society of its respective county to be used for the promotion of
244.23historical work and to aid in defraying the expenses of carrying on the historical work in the
244.24county. No city or town may appropriate any funds for the benefit of any historical society
244.25unless the society is affiliated with and approved by the Minnesota Historical Society.

244.26    Sec. 17. Minnesota Statutes 2012, section 144F.01, subdivision 4, is amended to read:
244.27    Subd. 4. Property tax levy authority. The district's board may levy a tax on the
244.28taxable real and personal property in the district. The ad valorem tax levy may not exceed
244.290.048 percent of the taxable estimated market value of the district or $400,000, whichever
244.30is less. The proceeds of the levy must be used as provided in subdivision 5. The board shall
244.31certify the levy at the times as provided under section 275.07. The board shall provide the
244.32county with whatever information is necessary to identify the property that is located within
244.33the district. If the boundaries include a part of a parcel, the entire parcel shall be included
245.1in the district. The county auditors must spread, collect, and distribute the proceeds of the
245.2tax at the same time and in the same manner as provided by law for all other property taxes.

245.3    Sec. 18. Minnesota Statutes 2012, section 162.07, subdivision 3, is amended to read:
245.4    Subd. 3. Computation for rural counties. An amount equal to a levy of 0.01596
245.5percent on each rural county's total taxable estimated market value for the last preceding
245.6calendar year shall be computed and shall be subtracted from the county's total estimated
245.7construction costs. The result thereof shall be the money needs of the county. For the
245.8purpose of this section, "rural counties" means all counties having a population of less
245.9than 175,000.

245.10    Sec. 19. Minnesota Statutes 2012, section 162.07, subdivision 4, is amended to read:
245.11    Subd. 4. Computation for urban counties. An amount equal to a levy of 0.00967
245.12percent on each urban county's total taxable estimated market value for the last preceding
245.13calendar year shall be computed and shall be subtracted from the county's total estimated
245.14construction costs. The result thereof shall be the money needs of the county. For
245.15the purpose of this section, "urban counties" means all counties having a population
245.16of 175,000 or more.

245.17    Sec. 20. Minnesota Statutes 2012, section 163.04, subdivision 3, is amended to read:
245.18    Subd. 3. Bridges within certain cities. When the council of any statutory city or
245.19city of the third or fourth class may determine that it is necessary to build or improve any
245.20bridge or bridges, including approaches thereto, and any dam or retaining works connected
245.21therewith, upon or forming a part of streets or highways either wholly or partly within
245.22its limits, the county board shall appropriate one-half of the money as may be necessary
245.23therefor from the county road and bridge fund, not exceeding during any year one-half
245.24the amount of taxes paid into the county road and bridge fund during the preceding year,
245.25on property within the corporate limits of the city. The appropriation shall be made upon
245.26the petition of the council, which petition shall be filed by the council with the county
245.27board prior to the fixing by the board of the annual county tax levy. The county board
245.28shall determine the plans and specifications, shall let all necessary contracts, shall have
245.29charge of construction, and upon its request, warrants in payment thereof shall be issued
245.30by the county auditor, from time to time, as the construction work proceeds. Any unpaid
245.31balance may be paid or advanced by the city. On petition of the council, the appropriations
245.32of the county board, during not to exceed three successive years, may be made to apply
245.33on the construction of the same items and to repay any money advanced by the city in
246.1the construction thereof. None of the provisions of this section shall be construed to
246.2be mandatory as applied to any city whose estimated market value exceeds $2,100 per
246.3capita of its population.

246.4    Sec. 21. Minnesota Statutes 2012, section 163.06, subdivision 6, is amended to read:
246.5    Subd. 6. Expenditure in certain counties. In any county having not less than 95
246.6nor more than 105 full and fractional townships, and having a an estimated market value
246.7of not less than $12,000,000 nor more than $21,000,000, exclusive of money and credits,
246.8 the county board, by resolution, may expend the funds provided in subdivision 4 in any
246.9organized or unorganized township town or unorganized territory or portion thereof in
246.10such county.

246.11    Sec. 22. Minnesota Statutes 2012, section 165.10, subdivision 1, is amended to read:
246.12    Subdivision 1. Certain counties may issue and sell. The county board of any
246.13county having no outstanding road and bridge bonds may issue and sell county road bonds
246.14in an amount not exceeding 0.12089 percent of the estimated market value of the taxable
246.15property within the county exclusive of money and credits, for the purpose of constructing,
246.16reconstructing, improving, or maintaining any bridge or bridges on any highway under its
246.17jurisdiction, without submitting the matter to a vote of the electors of the county.

246.18    Sec. 23. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision
246.19to read:
246.20    Subd. 14. Estimated market value. "Estimated market value" means the assessor's
246.21determination of market value, including the effects of any orders made under section
246.22270.12 or chapter 274, for the parcel. The provisions of section 273.032 apply for certain
246.23uses in determining the total estimated market value for the taxing jurisdiction.

246.24    Sec. 24. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision
246.25to read:
246.26    Subd. 15. Taxable market value. "Taxable market value" means estimated market
246.27value for the parcel as reduced by market value exclusions, deferments of value, or other
246.28adjustments required by law, that reduce market value before the application of class rates.

246.29    Sec. 25. Minnesota Statutes 2012, section 273.032, is amended to read:
246.30273.032 MARKET VALUE DEFINITION.
247.1    (a) Unless otherwise provided, for the purpose of determining any property tax
247.2levy limitation based on market value or any limit on net debt, the issuance of bonds,
247.3certificates of indebtedness, or capital notes based on market value, any qualification to
247.4receive state aid based on market value, or any state aid amount based on market value, the
247.5terms "market value," "taxable estimated market value," and "market valuation," whether
247.6equalized or unequalized, mean the total taxable estimated market value of taxable property
247.7within the local unit of government before any of the following or similar adjustments for:
247.8    (1) the market value exclusions under:
247.9    (i) section 273.11, subdivisions 14a and 14c (vacant platted land);
247.10    (ii) section 273.11, subdivision 16 (certain improvements to homestead property);
247.11    (iii) section 273.11, subdivisions 19 and 20 (certain improvements to business
247.12properties);
247.13    (iv) section 273.11, subdivision 21 (homestead property damaged by mold);
247.14    (v) section 273.11, subdivision 22 (qualifying lead hazardous reduction projects);
247.15    (vi) section 273.13, subdivision 34 (homestead of a disabled veteran or family
247.16caregiver);
247.17    (vii) section 273.13, subdivision 35 (homestead market value exclusion); or
247.18    (2) the deferment of value under:
247.19    (i) the Minnesota Agricultural Property Tax Law, section 273.111;
247.20    (ii) the Aggregate Resource Preservation Law, section 273.1115;
247.21    (iii) the Minnesota Open Space Property Tax Law, section 273.112;
247.22    (iv) the rural preserves property tax program, section 273.114; or
247.23    (v) the Metropolitan Agricultural Preserves Act, section 473H.10; or
247.24    (3) the adjustments to tax capacity for:
247.25    (i) tax increment, financing under sections 469.174 to 469.1794;
247.26    (ii) fiscal disparity, disparities under chapter 276A or 473F; or
247.27    (iii) powerline credit, or wind energy values, but after the limited market adjustments
247.28under section 273.11, subdivision 1a, and after the market value exclusions of certain
247.29improvements to homestead property under section 273.11, subdivision 16 under section
247.30273.425.
247.31    (b) Estimated market value under paragraph (a) also includes the market value
247.32of tax-exempt property if the applicable law specifically provides that the limitation,
247.33qualification, or aid calculation includes tax-exempt property.
247.34    (c) Unless otherwise provided, "market value," "taxable estimated market value,"
247.35and "market valuation" for purposes of this paragraph property tax levy limitations and
247.36calculation of state aid, refer to the taxable estimated market value for the previous
248.1assessment year and for purposes of limits on net debt, the issuance of bonds, certificates of
248.2indebtedness, or capital notes refer to the estimated market value as last finally equalized.
248.3    For the purpose of determining any net debt limit based on market value, or any limit
248.4on the issuance of bonds, certificates of indebtedness, or capital notes based on market
248.5value, the terms "market value," "taxable market value," and "market valuation," whether
248.6equalized or unequalized, mean the total taxable market value of property within the local
248.7unit of government before any adjustments for tax increment, fiscal disparity, powerline
248.8credit, or wind energy values, but after the limited market value adjustments under section
248.9273.11, subdivision 1a, and after the market value exclusions of certain improvements to
248.10homestead property under section 273.11, subdivision 16. Unless otherwise provided,
248.11"market value," "taxable market value," and "market valuation" for purposes of this
248.12paragraph, mean the taxable market value as last finally equalized.
248.13    (d) For purposes of a provision of a home rule charter or of any special law that is not
248.14codified in the statutes and that imposes a levy limitation based on market value or any limit
248.15on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market
248.16value, the terms "market value," "taxable market value," and "market valuation," whether
248.17equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

248.18    Sec. 26. Minnesota Statutes 2012, section 273.11, subdivision 1, is amended to read:
248.19    Subdivision 1. Generally. Except as provided in this section or section 273.17,
248.20subdivision 1 , all property shall be valued at its market value. The market value as
248.21determined pursuant to this section shall be stated such that any amount under $100 is
248.22rounded up to $100 and any amount exceeding $100 shall be rounded to the nearest $100.
248.23In estimating and determining such value, the assessor shall not adopt a lower or different
248.24standard of value because the same is to serve as a basis of taxation, nor shall the assessor
248.25adopt as a criterion of value the price for which such property would sell at a forced sale,
248.26or in the aggregate with all the property in the town or district; but the assessor shall value
248.27each article or description of property by itself, and at such sum or price as the assessor
248.28believes the same to be fairly worth in money. The assessor shall take into account the
248.29effect on the market value of property of environmental factors in the vicinity of the
248.30property. In assessing any tract or lot of real property, the value of the land, exclusive of
248.31structures and improvements, shall be determined, and also the value of all structures and
248.32improvements thereon, and the aggregate value of the property, including all structures
248.33and improvements, excluding the value of crops growing upon cultivated land. In valuing
248.34real property upon which there is a mine or quarry, it shall be valued at such price as such
248.35property, including the mine or quarry, would sell for at a fair, voluntary sale, for cash,
249.1if the material being mined or quarried is not subject to taxation under section 298.015
249.2and the mine or quarry is not exempt from the general property tax under section 298.25.
249.3In valuing real property which is vacant, platted property shall be assessed as provided
249.4in subdivision 14 subdivisions 14a and 14c. All property, or the use thereof, which is
249.5taxable under section 272.01, subdivision 2, or 273.19, shall be valued at the market
249.6value of such property and not at the value of a leasehold estate in such property, or at
249.7some lesser value than its market value.

249.8    Sec. 27. Minnesota Statutes 2012, section 273.124, subdivision 3a, is amended to read:
249.9    Subd. 3a. Manufactured home park cooperative. (a) When a manufactured home
249.10park is owned by a corporation or association organized under chapter 308A or 308B,
249.11and each person who owns a share or shares in the corporation or association is entitled
249.12to occupy a lot within the park, the corporation or association may claim homestead
249.13treatment for the park. Each lot must be designated by legal description or number, and
249.14each lot is limited to not more than one-half acre of land.
249.15    (b) The manufactured home park shall be entitled to homestead treatment if all
249.16of the following criteria are met:
249.17    (1) the occupant or the cooperative corporation or association is paying the ad
249.18valorem property taxes and any special assessments levied against the land and structure
249.19either directly, or indirectly through dues to the corporation or association; and
249.20    (2) the corporation or association organized under chapter 308A or 308B is wholly
249.21owned by persons having a right to occupy a lot owned by the corporation or association.
249.22    (c) A charitable corporation, organized under the laws of Minnesota with no
249.23outstanding stock, and granted a ruling by the Internal Revenue Service for 501(c)(3)
249.24tax-exempt status, qualifies for homestead treatment with respect to a manufactured home
249.25park if its members hold residential participation warrants entitling them to occupy a lot
249.26in the manufactured home park.
249.27    (d) "Homestead treatment" under this subdivision means the class rate provided for
249.28class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause (5),
249.29item (ii). The homestead market value credit exclusion under section 273.1384 273.13,
249.30subdivision 35, does not apply and the property taxes assessed against the park shall not
249.31be included in the determination of taxes payable for rent paid under section 290A.03.
249.32EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
249.33thereafter.

249.34    Sec. 28. Minnesota Statutes 2012, section 273.124, subdivision 13, is amended to read:
250.1    Subd. 13. Homestead application. (a) A person who meets the homestead
250.2requirements under subdivision 1 must file a homestead application with the county
250.3assessor to initially obtain homestead classification.
250.4    (b) The format and contents of a uniform homestead application shall be prescribed
250.5by the commissioner of revenue. The application must clearly inform the taxpayer that
250.6this application must be signed by all owners who occupy the property or by the qualifying
250.7relative and returned to the county assessor in order for the property to receive homestead
250.8treatment.
250.9    (c) Every property owner applying for homestead classification must furnish to the
250.10county assessor the Social Security number of each occupant who is listed as an owner
250.11of the property on the deed of record, the name and address of each owner who does not
250.12occupy the property, and the name and Social Security number of each owner's spouse who
250.13occupies the property. The application must be signed by each owner who occupies the
250.14property and by each owner's spouse who occupies the property, or, in the case of property
250.15that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
250.16    If a property owner occupies a homestead, the property owner's spouse may not
250.17claim another property as a homestead unless the property owner and the property owner's
250.18spouse file with the assessor an affidavit or other proof required by the assessor stating that
250.19the property qualifies as a homestead under subdivision 1, paragraph (e).
250.20    Owners or spouses occupying residences owned by their spouses and previously
250.21occupied with the other spouse, either of whom fail to include the other spouse's name
250.22and Social Security number on the homestead application or provide the affidavits or
250.23other proof requested, will be deemed to have elected to receive only partial homestead
250.24treatment of their residence. The remainder of the residence will be classified as
250.25nonhomestead residential. When an owner or spouse's name and Social Security number
250.26appear on homestead applications for two separate residences and only one application is
250.27signed, the owner or spouse will be deemed to have elected to homestead the residence for
250.28which the application was signed.
250.29    The Social Security numbers, state or federal tax returns or tax return information,
250.30including the federal income tax schedule F required by this section, or affidavits or other
250.31proofs of the property owners and spouses submitted under this or another section to
250.32support a claim for a property tax homestead classification are private data on individuals as
250.33defined by section 13.02, subdivision 12, but, notwithstanding that section, the private data
250.34may be disclosed to the commissioner of revenue, or, for purposes of proceeding under the
250.35Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
251.1    (d) If residential real estate is occupied and used for purposes of a homestead by a
251.2relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
251.3order for the property to receive homestead status, a homestead application must be filed
251.4with the assessor. The Social Security number of each relative and spouse of a relative
251.5occupying the property shall be required on the homestead application filed under this
251.6subdivision. If a different relative of the owner subsequently occupies the property, the
251.7owner of the property must notify the assessor within 30 days of the change in occupancy.
251.8The Social Security number of a relative or relative's spouse occupying the property
251.9is private data on individuals as defined by section 13.02, subdivision 12, but may be
251.10disclosed to the commissioner of revenue, or, for the purposes of proceeding under the
251.11Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
251.12    (e) The homestead application shall also notify the property owners that the
251.13application filed under this section will not be mailed annually and that if the property
251.14is granted homestead status for any assessment year, that same property shall remain
251.15classified as homestead until the property is sold or transferred to another person, or
251.16the owners, the spouse of the owner, or the relatives no longer use the property as their
251.17homestead. Upon the sale or transfer of the homestead property, a certificate of value must
251.18be timely filed with the county auditor as provided under section 272.115. Failure to
251.19notify the assessor within 30 days that the property has been sold, transferred, or that the
251.20owner, the spouse of the owner, or the relative is no longer occupying the property as a
251.21homestead, shall result in the penalty provided under this subdivision and the property
251.22will lose its current homestead status.
251.23    (f) If the homestead application is not returned within 30 days, the county will send a
251.24second application to the present owners of record. The notice of proposed property taxes
251.25prepared under section 275.065, subdivision 3, shall reflect the property's classification. If
251.26a homestead application has not been filed with the county by December 15, the assessor
251.27shall classify the property as nonhomestead for the current assessment year for taxes
251.28payable in the following year, provided that the owner may be entitled to receive the
251.29homestead classification by proper application under section 375.192.
251.30    (g) At the request of the commissioner, each county must give the commissioner a
251.31list that includes the name and Social Security number of each occupant of homestead
251.32property who is the property owner, property owner's spouse, qualifying relative of a
251.33property owner, or a spouse of a qualifying relative. The commissioner shall use the
251.34information provided on the lists as appropriate under the law, including for the detection
251.35of improper claims by owners, or relatives of owners, under chapter 290A.
252.1    (h) If the commissioner finds that a property owner may be claiming a fraudulent
252.2homestead, the commissioner shall notify the appropriate counties. Within 90 days of
252.3the notification, the county assessor shall investigate to determine if the homestead
252.4classification was properly claimed. If the property owner does not qualify, the county
252.5assessor shall notify the county auditor who will determine the amount of homestead
252.6benefits that had been improperly allowed. For the purpose of this section, "homestead
252.7benefits" means the tax reduction resulting from the classification as a homestead and the
252.8homestead market value exclusion under section 273.13, the taconite homestead credit
252.9under section 273.135, the residential homestead and agricultural homestead credits credit
252.10 under section 273.1384, and the supplemental homestead credit under section 273.1391.
252.11    The county auditor shall send a notice to the person who owned the affected property
252.12at the time the homestead application related to the improper homestead was filed,
252.13demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
252.14of the homestead benefits. The person notified may appeal the county's determination
252.15by serving copies of a petition for review with county officials as provided in section
252.16278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax
252.17Court within 60 days of the date of the notice from the county. Procedurally, the appeal
252.18is governed by the provisions in chapter 271 which apply to the appeal of a property tax
252.19assessment or levy, but without requiring any prepayment of the amount in controversy. If
252.20the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
252.21has been filed, the county auditor shall certify the amount of taxes and penalty to the county
252.22treasurer. The county treasurer will add interest to the unpaid homestead benefits and
252.23penalty amounts at the rate provided in section 279.03 for real property taxes becoming
252.24delinquent in the calendar year during which the amount remains unpaid. Interest may be
252.25assessed for the period beginning 60 days after demand for payment was made.
252.26    If the person notified is the current owner of the property, the treasurer may add the
252.27total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
252.28otherwise payable on the property by including the amounts on the property tax statements
252.29under section 276.04, subdivision 3. The amounts added under this paragraph to the ad
252.30valorem taxes shall include interest accrued through December 31 of the year preceding
252.31the taxes payable year for which the amounts are first added. These amounts, when added
252.32to the property tax statement, become subject to all the laws for the enforcement of real or
252.33personal property taxes for that year, and for any subsequent year.
252.34    If the person notified is not the current owner of the property, the treasurer may
252.35collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
252.36the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment
253.1of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
253.2tax obligations of the person who owned the property at the time the application related to
253.3the improperly allowed homestead was filed. The treasurer may relieve a prior owner of
253.4personal liability for the homestead benefits, penalty, interest, and costs, and instead extend
253.5those amounts on the tax lists against the property as provided in this paragraph to the extent
253.6that the current owner agrees in writing. On all demands, billings, property tax statements,
253.7and related correspondence, the county must list and state separately the amounts of
253.8homestead benefits, penalty, interest and costs being demanded, billed or assessed.
253.9    (i) Any amount of homestead benefits recovered by the county from the property
253.10owner shall be distributed to the county, city or town, and school district where the
253.11property is located in the same proportion that each taxing district's levy was to the total
253.12of the three taxing districts' levy for the current year. Any amount recovered attributable
253.13to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
253.14deposited in the taconite property tax relief account. Any amount recovered that is
253.15attributable to supplemental homestead credit is to be transmitted to the commissioner of
253.16revenue for deposit in the general fund of the state treasury. The total amount of penalty
253.17collected must be deposited in the county general fund.
253.18    (j) If a property owner has applied for more than one homestead and the county
253.19assessors cannot determine which property should be classified as homestead, the county
253.20assessors will refer the information to the commissioner. The commissioner shall make
253.21the determination and notify the counties within 60 days.
253.22    (k) In addition to lists of homestead properties, the commissioner may ask the
253.23counties to furnish lists of all properties and the record owners. The Social Security
253.24numbers and federal identification numbers that are maintained by a county or city
253.25assessor for property tax administration purposes, and that may appear on the lists retain
253.26their classification as private or nonpublic data; but may be viewed, accessed, and used by
253.27the county auditor or treasurer of the same county for the limited purpose of assisting the
253.28commissioner in the preparation of microdata samples under section 270C.12.
253.29    (l) On or before April 30 each year beginning in 2007, each county must provide the
253.30commissioner with the following data for each parcel of homestead property by electronic
253.31means as defined in section 289A.02, subdivision 8:
253.32    (i) the property identification number assigned to the parcel for purposes of taxes
253.33payable in the current year;
253.34    (ii) the name and Social Security number of each occupant of homestead property
253.35who is the property owner, property owner's spouse, qualifying relative of a property
253.36owner, or spouse of a qualifying relative;
254.1    (iii) the classification of the property under section 273.13 for taxes payable in the
254.2current year and in the prior year;
254.3    (iv) an indication of whether the property was classified as a homestead for taxes
254.4payable in the current year because of occupancy by a relative of the owner or by a
254.5spouse of a relative;
254.6    (v) the property taxes payable as defined in section 290A.03, subdivision 13, for the
254.7current year and the prior year;
254.8    (vi) the market value of improvements to the property first assessed for tax purposes
254.9for taxes payable in the current year;
254.10    (vii) the assessor's estimated market value assigned to the property for taxes payable
254.11in the current year and the prior year;
254.12    (viii) the taxable market value assigned to the property for taxes payable in the
254.13current year and the prior year;
254.14    (ix) whether there are delinquent property taxes owing on the homestead;
254.15    (x) the unique taxing district in which the property is located; and
254.16    (xi) such other information as the commissioner decides is necessary.
254.17    The commissioner shall use the information provided on the lists as appropriate
254.18under the law, including for the detection of improper claims by owners, or relatives
254.19of owners, under chapter 290A.
254.20EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
254.21thereafter.

254.22    Sec. 29. Minnesota Statutes 2012, section 273.13, subdivision 21b, is amended to read:
254.23    Subd. 21b. Net tax capacity. (a) Gross tax capacity means the product of the
254.24appropriate gross class rates in this section and market values.
254.25    (b) Net tax capacity means the product of the appropriate net class rates in this
254.26section and taxable market values.
254.27EFFECTIVE DATE.This section is effective the day following final enactment.

254.28    Sec. 30. Minnesota Statutes 2012, section 273.1398, subdivision 3, is amended to read:
254.29    Subd. 3. Disparity reduction aid. The amount of disparity aid certified for each
254.30taxing district within each unique taxing jurisdiction for taxes payable in the prior year
254.31shall be multiplied by the ratio of (1) the jurisdiction's tax capacity using the class rates for
254.32taxes payable in the year for which aid is being computed, to (2) its tax capacity using
254.33the class rates for taxes payable in the year prior to that for which aid is being computed,
255.1both based upon taxable market values for taxes payable in the year prior to that for which
255.2aid is being computed. If the commissioner determines that insufficient information is
255.3available to reasonably and timely calculate the numerator in this ratio for the first taxes
255.4payable year that a class rate change or new class rate is effective, the commissioner shall
255.5omit the effects of that class rate change or new class rate when calculating this ratio for
255.6aid payable in that taxes payable year. For aid payable in the year following a year for
255.7which such omission was made, the commissioner shall use in the denominator for the
255.8class that was changed or created, the tax capacity for taxes payable two years prior to that
255.9in which the aid is payable, based on taxable market values for taxes payable in the year
255.10prior to that for which aid is being computed.

255.11    Sec. 31. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
255.12    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
255.13class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property
255.14is located in a border city that has an enterprise zone, as defined in section 469.166; (2)
255.15the property is located in a city with a population greater than 2,500 and less than 35,000
255.16according to the 1980 decennial census; (3) the city is adjacent to a city in another state or
255.17immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city
255.18in the other state has a population of greater than 5,000 and less than 75,000 according to
255.19the 1980 decennial census.
255.20    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
255.21property to 2.3 percent of the property's taxable market value and (ii) the tax on class 3a
255.22property to 2.3 percent of taxable market value.
255.23    (c) The county auditor shall annually certify the costs of the credits to the
255.24Department of Revenue. The department shall reimburse local governments for the
255.25property taxes forgone as the result of the credits in proportion to their total levies.

255.26    Sec. 32. Minnesota Statutes 2012, section 275.011, subdivision 1, is amended to read:
255.27    Subdivision 1. Determination of levy limit. The property tax levied for any
255.28purpose under a special law that is not codified in Minnesota Statutes or a city charter
255.29provision and that is subject to a mill rate limitation imposed by the special law or city
255.30charter provision, excluding levies subject to mill rate limitations that use adjusted
255.31assessed values determined by the commissioner of revenue under section 124.2131, must
255.32not exceed the following amount for the years specified:
255.33    (a) for taxes payable in 1988, the product of the applicable mill rate limitation
255.34imposed by special law or city charter provision multiplied by the total assessed valuation
256.1of all taxable property subject to the tax as adjusted by the provisions of Minnesota
256.2Statutes 1986, sections 272.64; 273.13, subdivision 7a; and 275.49;
256.3    (b) for taxes payable in 1989, the product of (1) the property tax levy limitation for
256.4the taxes payable year 1988 determined under clause (a) multiplied by (2) an index for
256.5market valuation changes equal to the assessment year 1988 total market valuation of all
256.6taxable property subject to the tax divided by the assessment year 1987 total market
256.7valuation of all taxable property subject to the tax; and
256.8    (c) for taxes payable in 1990 and subsequent years, the product of (1) the property
256.9tax levy limitation for the previous year determined pursuant to this subdivision multiplied
256.10by (2) an index for market valuation changes equal to the total market valuation of all
256.11taxable property subject to the tax for the current assessment year divided by the total
256.12market valuation of all taxable property subject to the tax for the previous assessment year.
256.13    For the purpose of determining the property tax levy limitation for the taxes payable
256.14year 1988 2014 and subsequent years under this subdivision, "total market valuation"
256.15means the total estimated market valuation value of all taxable property subject to the
256.16tax without valuation adjustments for fiscal disparities (chapters 276A and 473F), tax
256.17increment financing (sections 469.174 to 469.179), or powerline credit (section 273.425)
256.18 as provided under section 273.032.

256.19    Sec. 33. Minnesota Statutes 2012, section 275.077, subdivision 2, is amended to read:
256.20    Subd. 2. Correction of levy amount. The difference between the correct levy and
256.21the erroneous levy shall be added to the township levy for the subsequent levy year;
256.22provided that if the amount of the difference exceeds 0.12089 percent of taxable estimated
256.23 market value, the excess shall be added to the township levy for the second and later
256.24subsequent levy years, not to exceed an additional levy of 0.12089 percent of taxable
256.25 estimated market value in any year, until the full amount of the difference has been levied.
256.26The funds collected from the corrected levies shall be used to reimburse the county for the
256.27payment required by subdivision 1.

256.28    Sec. 34. Minnesota Statutes 2012, section 275.71, subdivision 4, is amended to read:
256.29    Subd. 4. Adjusted levy limit base. For taxes levied in 2008 through 2010, the
256.30adjusted levy limit base is equal to the levy limit base computed under subdivision 2
256.31or section 275.72, multiplied by:
256.32    (1) one plus the percentage growth in the implicit price deflator, but the percentage
256.33shall not be less than zero or exceed 3.9 percent;
257.1    (2) one plus a percentage equal to 50 percent of the percentage increase in the number
257.2of households, if any, for the most recent 12-month period for which data is available; and
257.3    (3) one plus a percentage equal to 50 percent of the percentage increase in the
257.4taxable estimated market value of the jurisdiction due to new construction of class 3
257.5property, as defined in section 273.13, subdivision 4, except for state-assessed utility and
257.6railroad property, for the most recent year for which data is available.

257.7    Sec. 35. Minnesota Statutes 2012, section 276.04, subdivision 2, is amended to read:
257.8    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the printing
257.9of the tax statements. The commissioner of revenue shall prescribe the form of the property
257.10tax statement and its contents. The tax statement must not state or imply that property tax
257.11credits are paid by the state of Minnesota. The statement must contain a tabulated statement
257.12of the dollar amount due to each taxing authority and the amount of the state tax from the
257.13parcel of real property for which a particular tax statement is prepared. The dollar amounts
257.14attributable to the county, the state tax, the voter approved school tax, the other local school
257.15tax, the township or municipality, and the total of the metropolitan special taxing districts
257.16as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated.
257.17The amounts due all other special taxing districts, if any, may be aggregated except that
257.18any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota,
257.19Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate
257.20line directly under the appropriate county's levy. If the county levy under this paragraph
257.21includes an amount for a lake improvement district as defined under sections 103B.501
257.22to 103B.581, the amount attributable for that purpose must be separately stated from the
257.23remaining county levy amount. In the case of Ramsey County, if the county levy under this
257.24paragraph includes an amount for public library service under section 134.07, the amount
257.25attributable for that purpose may be separated from the remaining county levy amount.
257.26The amount of the tax on homesteads qualifying under the senior citizens' property tax
257.27deferral program under chapter 290B is the total amount of property tax before subtraction
257.28of the deferred property tax amount. The amount of the tax on contamination value
257.29imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar
257.30amounts, including the dollar amount of any special assessments, may be rounded to the
257.31nearest even whole dollar. For purposes of this section whole odd-numbered dollars may
257.32be adjusted to the next higher even-numbered dollar. The amount of market value excluded
257.33under section 273.11, subdivision 16, if any, must also be listed on the tax statement.
258.1    (b) The property tax statements for manufactured homes and sectional structures
258.2taxed as personal property shall contain the same information that is required on the
258.3tax statements for real property.
258.4    (c) Real and personal property tax statements must contain the following information
258.5in the order given in this paragraph. The information must contain the current year tax
258.6information in the right column with the corresponding information for the previous year
258.7in a column on the left:
258.8    (1) the property's estimated market value under section 273.11, subdivision 1;
258.9    (2) the property's homestead market value exclusion under section 273.13,
258.10subdivision 35;
258.11    (3) the property's taxable market value after reductions under sections 273.11,
258.12subdivisions 1a and 16, and 273.13, subdivision 35 section 272.03, subdivision 15;
258.13    (4) the property's gross tax, before credits;
258.14    (5) for homestead agricultural properties, the credit under section 273.1384;
258.15    (6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
258.16273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
258.17credit received under section 273.135 must be separately stated and identified as "taconite
258.18tax relief"; and
258.19    (7) the net tax payable in the manner required in paragraph (a).
258.20    (d) If the county uses envelopes for mailing property tax statements and if the county
258.21agrees, a taxing district may include a notice with the property tax statement notifying
258.22taxpayers when the taxing district will begin its budget deliberations for the current
258.23year, and encouraging taxpayers to attend the hearings. If the county allows notices to
258.24be included in the envelope containing the property tax statement, and if more than
258.25one taxing district relative to a given property decides to include a notice with the tax
258.26statement, the county treasurer or auditor must coordinate the process and may combine
258.27the information on a single announcement.

258.28    Sec. 36. Minnesota Statutes 2012, section 276A.01, subdivision 10, is amended to read:
258.29    Subd. 10. Adjusted market value. "Adjusted market value" of real and personal
258.30property within a municipality means the assessor's estimated taxable market value,
258.31as defined in section 272.03, of all real and personal property, including the value of
258.32manufactured housing, within the municipality. For purposes of sections 276A.01 to
258.33276A.09, the commissioner of revenue shall annually make determinations and reports
258.34with respect to each municipality which are comparable to those it makes for school
258.35districts, adjusted for sales ratios in a manner similar to the adjustments made to city and
259.1town net tax capacities under section 127A.48, subdivisions 1 to 6, in the same manner
259.2and at the same times prescribed by the subdivision. The commissioner of revenue shall
259.3annually determine, for each municipality, information comparable to that required by
259.4section 475.53, subdivision 4, for school districts, as soon as practicable after it becomes
259.5available. The commissioner of revenue shall then compute the equalized market value of
259.6property within each municipality.
259.7EFFECTIVE DATE.This section is effective the day following final enactment.

259.8    Sec. 37. Minnesota Statutes 2012, section 276A.01, subdivision 12, is amended to read:
259.9    Subd. 12. Fiscal capacity. "Fiscal capacity" of a municipality means its valuation
259.10 adjusted market value, determined as of January 2 of any year, divided by its population,
259.11determined as of a date in the same year.

259.12    Sec. 38. Minnesota Statutes 2012, section 276A.01, subdivision 13, is amended to read:
259.13    Subd. 13. Average fiscal capacity. "Average fiscal capacity" of municipalities
259.14means the sum of the valuations adjusted market values of all municipalities, determined
259.15as of January 2 of any year, divided by the sum of their populations, determined as of
259.16a date in the same year.

259.17    Sec. 39. Minnesota Statutes 2012, section 276A.01, subdivision 15, is amended to read:
259.18    Subd. 15. Net tax capacity. "Net tax capacity" means the taxable market value of
259.19real and personal property multiplied by its net tax capacity rates in section 273.13.

259.20    Sec. 40. Minnesota Statutes 2012, section 276A.06, subdivision 10, is amended to read:
259.21    Subd. 10. Adjustment of values for other computations. For the purpose of
259.22computing the amount or rate of any salary, aid, tax, or debt authorized, required, or
259.23limited by any provision of any law or charter, where the authorization, requirement, or
259.24limitation is related to any value or valuation of taxable property within any governmental
259.25unit, the value or net tax capacity fiscal capacity under section 276A.01, subdivision 12, a
259.26municipality's taxable market value must be adjusted to reflect the adjustments reductions
259.27 to net tax capacity effected by subdivision 2, clause (a), provided that: (1) in determining
259.28the taxable market value of commercial-industrial property or any class thereof within
259.29a governmental unit for any purpose other than section 276A.05 municipality, (a) the
259.30reduction required by this subdivision is that amount which bears the same proportion to
259.31the amount subtracted from the governmental unit's municipality's net tax capacity pursuant
259.32to subdivision 2, clause (a), as the taxable market value of commercial-industrial property,
260.1or such class thereof, located within the governmental unit municipality bears to the net
260.2tax capacity of commercial-industrial property, or such class thereof, located within the
260.3governmental unit, and (b) the increase required by this subdivision is that amount which
260.4bears the same proportion to the amount added to the governmental unit's net tax capacity
260.5pursuant to subdivision 2, clause (b), as the market value of commercial-industrial property,
260.6or such class thereof, located within the governmental unit bears to the net tax capacity of
260.7commercial-industrial property, or such class thereof, located within the governmental unit;
260.8and (2) in determining the market value of real property within a municipality for purposes
260.9of section 276A.05, the adjustment prescribed by clause (1)(a) must be made and that
260.10prescribed by clause (1)(b) must not be made municipality. No adjustment shall be made
260.11to taxable market value for the increase in net tax capacity under subdivision 2, clause (b).

260.12    Sec. 41. Minnesota Statutes 2012, section 287.08, is amended to read:
260.13287.08 TAX, HOW PAYABLE; RECEIPTS.
260.14    (a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of
260.15any county in this state in which the real property or some part is located at or before
260.16the time of filing the mortgage for record. The treasurer shall endorse receipt on the
260.17mortgage and the receipt is conclusive proof that the tax has been paid in the amount
260.18stated and authorizes any county recorder or registrar of titles to record the mortgage. Its
260.19form, in substance, shall be "registration tax hereon of ..................... dollars paid." If the
260.20mortgage is exempt from taxation the endorsement shall, in substance, be "exempt from
260.21registration tax." In either case the receipt must be signed by the treasurer. In case the
260.22treasurer is unable to determine whether a claim of exemption should be allowed, the tax
260.23must be paid as in the case of a taxable mortgage. For documents submitted electronically,
260.24the endorsements and tax amount shall be affixed electronically and no signature by the
260.25treasurer will be required. The actual payment method must be arranged in advance
260.26between the submitter and the receiving county.
260.27    (b) The county treasurer may refund in whole or in part any mortgage registry tax
260.28overpayment if a written application by the taxpayer is submitted to the county treasurer
260.29within 3-1/2 years from the date of the overpayment. If the county has not issued a denial
260.30of the application, the taxpayer may bring an action in Tax Court in the county in which
260.31the tax was paid at any time after the expiration of six months from the time that the
260.32application was submitted. A denial of refund may be appealed within 60 days from
260.33the date of the denial by bringing an action in Tax Court in the county in which the tax
260.34was paid. The action is commenced by the serving of a petition for relief on the county
260.35treasurer, and by filing a copy with the court. The county attorney shall defend the action.
261.1The county treasurer shall notify the treasurer of each county that has or would receive a
261.2portion of the tax as paid.
261.3    (c) If the county treasurer determines a refund should be paid, or if a refund is
261.4ordered by the court, the county treasurer of each county that actually received a portion
261.5of the tax shall immediately pay a proportionate share of three percent of the refund
261.6using any available county funds. The county treasurer of each county that received, or
261.7would have received, a portion of the tax shall also pay their county's proportionate share
261.8of the remaining 97 percent of the court-ordered refund on or before the 20th day of the
261.9following month using solely the mortgage registry tax funds that would be paid to the
261.10commissioner of revenue on that date under section 287.12. If the funds on hand under
261.11this procedure are insufficient to fully fund 97 percent of the court-ordered refund, the
261.12county treasurer of the county in which the action was brought shall file a claim with the
261.13commissioner of revenue under section 16A.48 for the remaining portion of 97 percent of
261.14the refund, and shall pay over the remaining portion upon receipt of a warrant from the
261.15state issued pursuant to the claim.
261.16    (d) When any mortgage covers real property located in more than one county in this
261.17state the total tax must be paid to the treasurer of the county where the mortgage is first
261.18presented for recording, and the payment must be receipted as provided in paragraph
261.19(a). If the principal debt or obligation secured by such a multiple county mortgage
261.20exceeds $10,000,000, the nonstate portion of the tax must be divided and paid over by
261.21the county treasurer receiving it, on or before the 20th day of each month after receipt,
261.22to the county or counties entitled in the ratio that the estimated market value of the real
261.23property covered by the mortgage in each county bears to the estimated market value of
261.24all the real property in this state described in the mortgage. In making the division and
261.25payment the county treasurer shall send a statement giving the description of the real
261.26property described in the mortgage and the estimated market value of the part located in
261.27each county. For this purpose, the treasurer of any county may require the treasurer of
261.28any other county to certify to the former the estimated market valuation value of any tract
261.29of real property in any mortgage.
261.30    (e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The
261.31mortgagee may undertake to collect and remit the tax on behalf of the mortgagor. If the
261.32mortgagee collects money from the mortgagor to remit the tax on behalf of the mortgagor,
261.33the mortgagee has a fiduciary duty to remit the tax on behalf of the mortgagor as to the
261.34amount of the tax collected for that purpose and the mortgagor is relieved of any further
261.35obligation to pay the tax as to the amount collected by the mortgagee for this purpose.

262.1    Sec. 42. Minnesota Statutes 2012, section 287.23, subdivision 1, is amended to read:
262.2    Subdivision 1. Real property outside county. If any taxable deed or instrument
262.3describes any real property located in more than one county in this state, the total tax must
262.4be paid to the treasurer of the county where the document is first presented for recording,
262.5and the payment must be receipted as provided in section 287.08. If the net consideration
262.6exceeds $700,000, the nonstate portion of the tax must be divided and paid over by the
262.7county treasurer receiving it, on or before the 20th day of each month after receipt, to
262.8the county or counties entitled in the ratio which the estimated market value of the real
262.9property covered by the document in each county bears to the estimated market value of
262.10all the real property in this state described in the document. In making the division and
262.11payment the county treasurer shall send a statement to the other involved counties giving
262.12the description of the real property described in the document and the estimated market
262.13value of the part located in each county. The treasurer of any county may require the
262.14treasurer of any other county to certify to the former the estimated market valuation value
262.15 of any parcel of real property for this purpose.

262.16    Sec. 43. Minnesota Statutes 2012, section 353G.08, subdivision 2, is amended to read:
262.17    Subd. 2. Cash flow funding requirement. If the executive director determines that
262.18an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has
262.19insufficient assets to meet the service pensions determined payable from the account,
262.20the executive director shall certify the amount of the potential service pension shortfall
262.21to the municipality or municipalities and the municipality or municipalities shall make
262.22an additional employer contribution to the account within ten days of the certification.
262.23If more than one municipality is associated with the account, unless the municipalities
262.24agree to a different allocation, the municipalities shall allocate the additional employer
262.25contribution one-half in proportion to the population of each municipality and one-half in
262.26proportion to the estimated market value of the property of each municipality.

262.27    Sec. 44. Minnesota Statutes 2012, section 365.025, subdivision 4, is amended to read:
262.28    Subd. 4. Major purchases: notice, petition, election. Before buying anything
262.29under subdivision 2 that costs more than 0.24177 percent of the estimated market value of
262.30the town, the town must follow this subdivision.
262.31    The town must publish in its official newspaper the board's resolution to pay for the
262.32property over time. Then a petition for an election on the contract may be filed with the
262.33clerk. The petition must be filed within ten days after the resolution is published. To require
262.34the election the petition must be signed by a number of voters equal to ten percent of the
263.1voters at the last regular town election. The contract then must be approved by a majority of
263.2those voting on the question. The question may be voted on at a regular or special election.

263.3    Sec. 45. Minnesota Statutes 2012, section 366.095, subdivision 1, is amended to read:
263.4    Subdivision 1. Certificates of indebtedness. The town board may issue certificates
263.5of indebtedness within the debt limits for a town purpose otherwise authorized by law.
263.6The certificates shall be payable in not more than ten years and be issued on the terms and
263.7in the manner as the board may determine. If the amount of the certificates to be issued
263.8exceeds 0.25 percent of the estimated market value of the town, they shall not be issued
263.9for at least ten days after publication in a newspaper of general circulation in the town of
263.10the board's resolution determining to issue them. If within that time, a petition asking for
263.11an election on the proposition signed by voters equal to ten percent of the number of voters
263.12at the last regular town election is filed with the clerk, the certificates shall not be issued
263.13until their issuance has been approved by a majority of the votes cast on the question at
263.14a regular or special election. A tax levy shall be made to pay the principal and interest
263.15on the certificates as in the case of bonds.

263.16    Sec. 46. Minnesota Statutes 2012, section 366.27, is amended to read:
263.17366.27 FIREFIGHTERS' RELIEF; TAX LEVY.
263.18    The town board of any town in this state having therein a platted portion on
263.19which resides 1,200 or more people, and wherein a duly incorporated firefighters' relief
263.20association is located may each year levy a tax not to exceed 0.00806 percent of taxable
263.21 estimated market value for the benefit of the relief association.

263.22    Sec. 47. Minnesota Statutes 2012, section 368.01, subdivision 23, is amended to read:
263.23    Subd. 23. Financing purchase of certain equipment. The town board may issue
263.24certificates of indebtedness within debt limits to purchase fire or police equipment or
263.25ambulance equipment or street construction or maintenance equipment. The certificates
263.26shall be payable in not more than five years and be issued on terms and in the manner as the
263.27board may determine. If the amount of the certificates to be issued to finance a purchase
263.28exceeds 0.24177 percent of the estimated market value of the town, excluding money
263.29and credits, they shall not be issued for at least ten days after publication in the official
263.30newspaper of a town board resolution determining to issue them. If before the end of that
263.31time, a petition asking for an election on the proposition signed by voters equal to ten
263.32percent of the number of voters at the last regular town election is filed with the clerk, the
263.33certificates shall not be issued until the proposition of their issuance has been approved by a
264.1majority of the votes cast on the question at a regular or special election. A tax levy shall be
264.2made for the payment of the principal and interest on the certificates as in the case of bonds.

264.3    Sec. 48. Minnesota Statutes 2012, section 368.47, is amended to read:
264.4368.47 TOWNS MAY BE DISSOLVED.
264.5    (1) When the voters residing within a town have failed to elect any town officials for
264.6more than ten years continuously;
264.7    (2) when a town has failed for a period of ten years to exercise any of the powers
264.8and functions of a town;
264.9    (3) when the estimated market value of a town drops to less than $165,000;
264.10    (4) when the tax delinquency of a town, exclusive of taxes that are delinquent or
264.11unpaid because they are contested in proceedings for the enforcement of taxes, amounts to
264.1212 percent of its market value; or
264.13    (5) when the state or federal government has acquired title to 50 percent of the
264.14real estate of a town,
264.15which facts, or any of them, may be found and determined by the resolution of the county
264.16board of the county in which the town is located, according to the official records in the
264.17office of the county auditor, the county board by resolution may declare the town, naming
264.18it, dissolved and no longer entitled to exercise any of the powers or functions of a town.
264.19    In Cass, Itasca, and St. Louis Counties, before the dissolution is effective the voters
264.20of the town shall express their approval or disapproval. The town clerk shall, upon a
264.21petition signed by a majority of the registered voters of the town, filed with the clerk at
264.22least 60 days before a regular or special town election, give notice at the same time and
264.23in the same manner of the election that the question of dissolution of the town will be
264.24submitted for determination at the election. At the election the question shall be voted
264.25upon by a separate ballot, the terms of which shall be either "for dissolution" or "against
264.26dissolution." The ballot shall be deposited in a separate ballot box and the result of the
264.27voting canvassed, certified, and returned in the same manner and at the same time as
264.28other facts and returns of the election. If a majority of the votes cast at the election are
264.29for dissolution, the town shall be dissolved. If a majority of the votes cast at the election
264.30are against dissolution, the town shall not be dissolved.
264.31    When a town is dissolved under sections 368.47 to 368.49 the county shall acquire
264.32title to any telephone company or other business conducted by the town. The business
264.33shall be operated by the board of county commissioners until it can be sold. The
264.34subscribers or patrons of the business shall have the first opportunity of purchase. If the
264.35town has any outstanding indebtedness chargeable to the business, the county auditor shall
265.1levy a tax against the property situated in the dissolved town to pay the indebtedness
265.2as it becomes due.

265.3    Sec. 49. Minnesota Statutes 2012, section 370.01, is amended to read:
265.4370.01 CHANGE OF BOUNDARIES; CREATION OF NEW COUNTIES.
265.5    The boundaries of counties may be changed by taking territory from a county and
265.6attaching it to an adjoining county, and new counties may be established out of territory of
265.7one or more existing counties. A new county shall contain at least 400 square miles and
265.8have at least 4,000 inhabitants. A proposed new county must have a total taxable estimated
265.9 market value of at least 35 percent of (i) the total taxable estimated market value of the
265.10existing county, or (ii) the average total taxable estimated market value of the existing
265.11counties, included in the proposition. The determination of the taxable estimated market
265.12value of a county must be made by the commissioner of revenue. An existing county shall
265.13not be reduced in area below 400 square miles, have less than 4,000 inhabitants, or have a
265.14total taxable estimated market value of less than that required of a new county.
265.15    No change in the boundaries of any county having an area of more than 2,500 square
265.16miles, whether by the creation of a new county, or otherwise, shall detach from the existing
265.17county any territory within 12 miles of the county seat.

265.18    Sec. 50. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read:
265.19    Subdivision 1. Definitions. For purposes of this section, the following terms have
265.20the meanings given.
265.21    (a) "Bonds" means an obligation as defined under section 475.51.
265.22    (b) "Capital improvement" means acquisition or betterment of public lands,
265.23buildings, or other improvements within the county for the purpose of a county courthouse,
265.24administrative building, health or social service facility, correctional facility, jail, law
265.25enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads and
265.26bridges, and the acquisition of development rights in the form of conservation easements
265.27under chapter 84C. An improvement must have an expected useful life of five years or
265.28more to qualify. "Capital improvement" does not include a recreation or sports facility
265.29building (such as, but not limited to, a gymnasium, ice arena, racquet sports facility,
265.30swimming pool, exercise room or health spa), unless the building is part of an outdoor
265.31park facility and is incidental to the primary purpose of outdoor recreation.
265.32    (c) "Metropolitan county" means a county located in the seven-county metropolitan
265.33area as defined in section 473.121 or a county with a population of 90,000 or more.
266.1    (d) "Population" means the population established by the most recent of the
266.2following (determined as of the date the resolution authorizing the bonds was adopted):
266.3    (1) the federal decennial census,
266.4    (2) a special census conducted under contract by the United States Bureau of the
266.5Census, or
266.6    (3) a population estimate made either by the Metropolitan Council or by the state
266.7demographer under section 4A.02.
266.8    (e) "Qualified indoor ice arena" means a facility that meets the requirements of
266.9section 373.43.
266.10    (f) "Tax capacity" means total taxable market value, but does not include captured
266.11market value.

266.12    Sec. 51. Minnesota Statutes 2012, section 373.40, subdivision 4, is amended to read:
266.13    Subd. 4. Limitations on amount. A county may not issue bonds under this section
266.14if the maximum amount of principal and interest to become due in any year on all the
266.15outstanding bonds issued pursuant to this section (including the bonds to be issued) will
266.16equal or exceed 0.12 percent of taxable the estimated market value of property in the
266.17county. Calculation of the limit must be made using the taxable estimated market value for
266.18the taxes payable year in which the obligations are issued and sold. This section does not
266.19limit the authority to issue bonds under any other special or general law.

266.20    Sec. 52. Minnesota Statutes 2012, section 375.167, subdivision 1, is amended to read:
266.21    Subdivision 1. Appropriations. Notwithstanding any contrary law, a county board
266.22may appropriate from the general revenue fund to any nonprofit corporation a sum not
266.23to exceed 0.00604 percent of taxable estimated market value to provide legal assistance
266.24to persons who are unable to afford private legal counsel.

266.25    Sec. 53. Minnesota Statutes 2012, section 375.18, subdivision 3, is amended to read:
266.26    Subd. 3. Courthouse. Each county board may erect, furnish, and maintain a
266.27suitable courthouse. No indebtedness shall be created for a courthouse in excess of an
266.28amount equal to a levy of 0.04030 percent of taxable estimated market value without the
266.29approval of a majority of the voters of the county voting on the question of issuing the
266.30obligation at an election.

266.31    Sec. 54. Minnesota Statutes 2012, section 375.555, is amended to read:
266.32375.555 FUNDING.
267.1    To implement the county emergency jobs program, the county board may expend
267.2an amount equal to what would be generated by a levy of 0.01209 percent of taxable
267.3 estimated market value. The money to be expended may be from any available funds
267.4not otherwise earmarked.

267.5    Sec. 55. Minnesota Statutes 2012, section 383B.152, is amended to read:
267.6383B.152 BUILDING AND MAINTENANCE FUND.
267.7    The county board may by resolution levy a tax to provide money which shall be kept
267.8in a fund known as the county reserve building and maintenance fund. Money in the fund
267.9shall be used solely for the construction, maintenance, and equipping of county buildings
267.10that are constructed or maintained by the board. The levy shall not be subject to any limit
267.11fixed by any other law or by any board of tax levy or other corresponding body, but shall
267.12not exceed 0.02215 percent of taxable estimated market value, less the amount required by
267.13chapter 475 to be levied in the year for the payment of the principal of and interest on all
267.14bonds issued pursuant to Extra Session Laws 1967, chapter 47, section 1.

267.15    Sec. 56. Minnesota Statutes 2012, section 383B.245, is amended to read:
267.16383B.245 LIBRARY LEVY.
267.17    (a) The county board may levy a tax on the taxable property within the county to
267.18acquire, better, and construct county library buildings and branches and to pay principal
267.19and interest on bonds issued for that purpose.
267.20    (b) The county board may by resolution adopted by a five-sevenths vote issue and
267.21sell general obligation bonds of the county in the manner provided in sections 475.60 to
267.22475.73 . The bonds shall not be subject to the limitations of sections 475.51 to 475.59,
267.23but the maturity years and amounts and interest rates of each series of bonds shall be
267.24fixed so that the maximum amount of principal and interest to become due in any year,
267.25on the bonds of that series and of all outstanding series issued by or for the purposes of
267.26libraries, shall not exceed an amount equal to 0.01612 percent of estimated market value
267.27of all taxable property in the county as last finally equalized before the issuance of the new
267.28series. When the tax levy authorized in this section is collected it shall be appropriated
267.29and credited to a debt service fund for the bonds in amounts required each year in lieu of a
267.30countywide tax levy for the debt service fund under section 475.61.

267.31    Sec. 57. Minnesota Statutes 2012, section 383B.73, subdivision 1, is amended to read:
267.32    Subdivision 1. Levy. To provide funds for the purposes of the Three Rivers Park
267.33District as set forth in its annual budget, in lieu of the levies authorized by any other
268.1special law for such purposes, the Board of Park District Commissioners may levy taxes
268.2on all the taxable property in the county and park district at a rate not exceeding 0.03224
268.3percent of estimated market value. Notwithstanding section 398.16, on or before October
268.41 of each year, after public hearing, the Board of Park District Commissioners shall adopt
268.5a budget for the ensuing year and shall determine the total amount necessary to be raised
268.6from ad valorem tax levies to meet its budget. The Board of Park District Commissioners
268.7shall submit the budget to the county board. The county board may veto or modify an item
268.8contained in the budget. If the county board determines to veto or to modify an item in the
268.9budget, it must, within 15 days after the budget was submitted by the district board, state
268.10in writing the specific reasons for its objection to the item vetoed or the reason for the
268.11modification. The Park District Board, after consideration of the county board's objections
268.12and proposed modifications, may reapprove a vetoed item or the original version of an item
268.13with respect to which a modification has been proposed, by a two-thirds majority. If the
268.14district board does not reapprove a vetoed item, the item shall be deleted from the budget.
268.15If the district board does not reapprove the original version of a modified item, the item
268.16shall be included in the budget as modified by the county board. After adoption of the final
268.17budget and no later than October 1, the superintendent of the park district shall certify to the
268.18office of the Hennepin County director of tax and public records exercising the functions
268.19of the county auditor the total amount to be raised from ad valorem tax levies to meet its
268.20budget for the ensuing year. The director of tax and public records shall add the amount of
268.21any levy certified by the district to other tax levies on the property of the county within the
268.22district for collection by the director of tax and public records with other taxes. When
268.23collected, the director shall make settlement of such taxes with the district in the same
268.24manner as other taxes are distributed to the other political subdivisions in Hennepin County.

268.25    Sec. 58. Minnesota Statutes 2012, section 383E.20, is amended to read:
268.26383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS.
268.27    The Anoka County Board may, by resolution adopted by a four-sevenths vote, issue
268.28and sell general obligation bonds of the county in the manner provided in chapter 475 to
268.29acquire, better, and construct county library buildings. The bonds shall not be subject to the
268.30requirements of sections 475.57 to 475.59. The maturity years and amounts and interest
268.31rates of each series of bonds shall be fixed so that the maximum amount of principal and
268.32interest to become due in any year, on the bonds of that series and of all outstanding series
268.33issued by or for the purposes of libraries, shall not exceed an amount equal to .01 percent
268.34of the taxable estimated market value of all taxable property in the county, excluding any
268.35taxable property taxed by any city for the support of any free public library. When the tax
269.1levy authorized in this section is collected, it shall be appropriated and credited to a debt
269.2service fund for the bonds. The tax levy for the debt service fund under section 475.61
269.3shall be reduced by the amount available or reasonably anticipated to be available in the
269.4fund to make payments otherwise payable from the levy pursuant to section 475.61.

269.5    Sec. 59. Minnesota Statutes 2012, section 383E.23, is amended to read:
269.6383E.23 LIBRARY TAX.
269.7    The Anoka County Board may levy a tax of not more than .01 percent of the taxable
269.8 estimated market value of taxable property located within the county excluding any
269.9taxable property taxed by any city for the support of any free public library, to acquire,
269.10better, and construct county library buildings and to pay principal and interest on bonds
269.11issued for that purpose. The tax shall be disregarded in the calculation of levies or limits
269.12on levies provided by section 373.40, or other law.

269.13    Sec. 60. Minnesota Statutes 2012, section 385.31, is amended to read:
269.14385.31 PAYMENT OF COUNTY ORDERS OR WARRANTS.
269.15    When any order or warrant drawn on the treasurer is presented for payment, if there
269.16is money in the treasury for that purpose, the county treasurer shall redeem the same, and
269.17write across the entire face thereof the word "redeemed," the date of the redemption, and
269.18the treasurer's official signature. If there is not sufficient funds in the proper accounts to
269.19pay such orders they shall be numbered and registered in their order of presentation,
269.20and proper endorsement thereof shall be made on such orders and they shall be entitled
269.21to payment in like order. Such orders shall bear interest at not to exceed the rate of six
269.22percent per annum from such date of presentment. The treasurer, as soon as there is
269.23sufficient money in the treasury, shall appropriate and set apart a sum sufficient for the
269.24payment of the orders so presented and registered, and, if entitled to interest, issue to the
269.25original holder a notice that interest will cease in 30 days from the date of such notice; and,
269.26if orders thus entitled to priority of payment are not then presented, the next in order of
269.27registry may be paid until such orders are presented. No interest shall be paid on any order,
269.28except upon a warrant drawn by the county auditor for that purpose, giving the number
269.29and the date of the order on account of which the interest warrant is drawn. In any county
269.30in this state now or hereafter having a an estimated market value of all taxable property,
269.31exclusive of money and credits, of not less than $1,033,000,000, the county treasurer, in
269.32order to save payment of interest on county warrants drawn upon a fund in which there
269.33shall be temporarily insufficient money in the treasury to redeem the same, may borrow
269.34temporarily from any other fund in the county treasury in which there is a sufficient balance
270.1to care for the needs of such fund and allow a temporary loan or transfer to any other fund,
270.2and may pay such warrants out of such funds. Any such money so transferred and used in
270.3redeeming such county warrants shall be returned to the fund from which drawn as soon
270.4as money shall come in to the credit of such fund on which any such warrant was drawn
270.5and paid as aforesaid. Any county operating on a cash basis may use a combined form of
270.6warrant or order and check, which, when signed by the chair of the county board and by
270.7the auditor, is an order or warrant for the payment of the claim, and, when countersigned
270.8by the county treasurer, is a check for the payment of the amount thereof.

270.9    Sec. 61. Minnesota Statutes 2012, section 394.36, subdivision 1, is amended to read:
270.10    Subdivision 1. Continuation of nonconformity; limitations. Except as provided in
270.11subdivision 2, 3, or 4, any nonconformity, including the lawful use or occupation of land
270.12or premises existing at the time of the adoption of an official control under this chapter,
270.13may be continued, although the use or occupation does not conform to the official control.
270.14If the nonconformity or occupancy is discontinued for a period of more than one year, or
270.15any nonconforming building or structure is destroyed by fire or other peril to the extent of
270.1650 percent of its estimated market value, any subsequent use or occupancy of the land or
270.17premises shall be a conforming use or occupancy.

270.18    Sec. 62. Minnesota Statutes 2012, section 398A.04, subdivision 8, is amended to read:
270.19    Subd. 8. Taxation. Before deciding to exercise the power to tax, the authority shall
270.20give six weeks' published notice in all municipalities in the region. If a number of voters
270.21in the region equal to five percent of those who voted for candidates for governor at the
270.22last gubernatorial election present a petition within nine weeks of the first published notice
270.23to the secretary of state requesting that the matter be submitted to popular vote, it shall be
270.24submitted at the next general election. The question prepared shall be:
270.25    "Shall the regional rail authority have the power to impose a property tax?

270.26		Yes .....
270.27		No ..... "

270.28    If a majority of those voting on the question approve or if no petition is presented
270.29within the prescribed time the authority may levy a tax at any annual rate not exceeding
270.300.04835 percent of estimated market value of all taxable property situated within the
270.31municipality or municipalities named in its organization resolution. Its recording officer
270.32shall file, on or before September 15, in the office of the county auditor of each county
270.33in which territory under the jurisdiction of the authority is located a certified copy of the
270.34board of commissioners' resolution levying the tax, and each county auditor shall assess
271.1and extend upon the tax rolls of each municipality named in the organization resolution the
271.2portion of the tax that bears the same ratio to the whole amount that the net tax capacity of
271.3taxable property in that municipality bears to the net tax capacity of taxable property in
271.4all municipalities named in the organization resolution. Collections of the tax shall be
271.5remitted by each county treasurer to the treasurer of the authority. For taxes levied in 1991,
271.6the amount levied for light rail transit purposes under this subdivision shall not exceed 75
271.7percent of the amount levied in 1990 for light rail transit purposes under this subdivision.

271.8    Sec. 63. Minnesota Statutes 2012, section 401.05, subdivision 3, is amended to read:
271.9    Subd. 3. Leasing. (a) A county or joint powers board of a group of counties
271.10which acquires or constructs and equips or improves facilities under this chapter may,
271.11with the approval of the board of county commissioners of each county, enter into a
271.12lease agreement with a city situated within any of the counties, or a county housing and
271.13redevelopment authority established under chapter 469 or any special law. Under the lease
271.14agreement, the city or county housing and redevelopment authority shall:
271.15    (1) construct or acquire and equip or improve a facility in accordance with plans
271.16prepared by or at the request of a county or joint powers board of the group of counties
271.17and approved by the commissioner of corrections; and
271.18    (2) finance the facility by the issuance of revenue bonds.
271.19    (b) The county or joint powers board of a group of counties may lease the facility
271.20site, improvements, and equipment for a term upon rental sufficient to produce revenue
271.21for the prompt payment of the revenue bonds and all interest accruing on them. Upon
271.22completion of payment, the lessee shall acquire title. The real and personal property
271.23acquired for the facility constitutes a project and the lease agreement constitutes a revenue
271.24agreement as provided in sections 469.152 to 469.165. All proceedings by the city or
271.25county housing and redevelopment authority and the county or joint powers board shall be
271.26as provided in sections 469.152 to 469.165, with the following adjustments:
271.27    (1) no tax may be imposed upon the property;
271.28    (2) the approval of the project by the commissioner of employment and economic
271.29development is not required;
271.30    (3) the Department of Corrections shall be furnished and shall record information
271.31concerning each project as it may prescribe, in lieu of reports required on other projects to
271.32the commissioner of employment and economic development;
271.33    (4) the rentals required to be paid under the lease agreement shall not exceed in any
271.34year one-tenth of one percent of the estimated market value of property within the county
271.35or group of counties as last equalized before the execution of the lease agreement;
272.1    (5) the county or group of counties shall provide for payment of all rentals due
272.2during the term of the lease agreement in the manner required in subdivision 4;
272.3    (6) no mortgage on the facilities shall be granted for the security of the bonds, but
272.4compliance with clause (5) may be enforced as a nondiscretionary duty of the county
272.5or group of counties; and
272.6    (7) the county or the joint powers board of the group of counties may sublease any
272.7part of the facilities for purposes consistent with their maintenance and operation.

272.8    Sec. 64. Minnesota Statutes 2012, section 410.32, is amended to read:
272.9410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
272.10    (a) Notwithstanding any contrary provision of other law or charter, a home rule
272.11charter city may, by resolution and without public referendum, issue capital notes subject
272.12to the city debt limit to purchase capital equipment.
272.13    (b) For purposes of this section, "capital equipment" means:
272.14    (1) public safety equipment, ambulance and other medical equipment, road
272.15construction and maintenance equipment, and other capital equipment; and
272.16    (2) computer hardware and software, whether bundled with machinery or equipment
272.17or unbundled.
272.18    (c) The equipment or software must have an expected useful life at least as long
272.19as the term of the notes.
272.20    (d) The notes shall be payable in not more than ten years and be issued on terms
272.21and in the manner the city determines. The total principal amount of the capital notes
272.22issued in a fiscal year shall not exceed 0.03 percent of the estimated market value of
272.23taxable property in the city for that year.
272.24    (e) A tax levy shall be made for the payment of the principal and interest on the
272.25notes, in accordance with section 475.61, as in the case of bonds.
272.26    (f) Notes issued under this section shall require an affirmative vote of two-thirds of
272.27the governing body of the city.
272.28    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
272.29city may also issue capital notes subject to its debt limit in the manner and subject to the
272.30limitations applicable to statutory cities pursuant to section 412.301.

272.31    Sec. 65. Minnesota Statutes 2012, section 412.221, subdivision 2, is amended to read:
272.32    Subd. 2. Contracts. The council shall have power to make such contracts as may
272.33be deemed necessary or desirable to make effective any power possessed by the council.
272.34The city may purchase personal property through a conditional sales contract and real
273.1property through a contract for deed under which contracts the seller is confined to the
273.2remedy of recovery of the property in case of nonpayment of all or part of the purchase
273.3price, which shall be payable over a period of not to exceed five years. When the contract
273.4price of property to be purchased by contract for deed or conditional sales contract
273.5exceeds 0.24177 percent of the estimated market value of the city, the city may not enter
273.6into such a contract for at least ten days after publication in the official newspaper of a
273.7council resolution determining to purchase property by such a contract; and, if before the
273.8end of that time a petition asking for an election on the proposition signed by voters equal
273.9to ten percent of the number of voters at the last regular city election is filed with the clerk,
273.10the city may not enter into such a contract until the proposition has been approved by a
273.11majority of the votes cast on the question at a regular or special election.

273.12    Sec. 66. Minnesota Statutes 2012, section 412.301, is amended to read:
273.13412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
273.14    (a) The council may issue certificates of indebtedness or capital notes subject to the
273.15city debt limits to purchase capital equipment.
273.16    (b) For purposes of this section, "capital equipment" means:
273.17    (1) public safety equipment, ambulance and other medical equipment, road
273.18construction and maintenance equipment, and other capital equipment; and
273.19    (2) computer hardware and software, whether bundled with machinery or equipment
273.20or unbundled.
273.21    (c) The equipment or software must have an expected useful life at least as long as
273.22the terms of the certificates or notes.
273.23    (d) Such certificates or notes shall be payable in not more than ten years and shall be
273.24issued on such terms and in such manner as the council may determine.
273.25    (e) If the amount of the certificates or notes to be issued to finance any such purchase
273.26exceeds 0.25 percent of the estimated market value of taxable property in the city, they
273.27shall not be issued for at least ten days after publication in the official newspaper of
273.28a council resolution determining to issue them; and if before the end of that time, a
273.29petition asking for an election on the proposition signed by voters equal to ten percent
273.30of the number of voters at the last regular municipal election is filed with the clerk, such
273.31certificates or notes shall not be issued until the proposition of their issuance has been
273.32approved by a majority of the votes cast on the question at a regular or special election.
273.33    (f) A tax levy shall be made for the payment of the principal and interest on such
273.34certificates or notes, in accordance with section 475.61, as in the case of bonds.

274.1    Sec. 67. Minnesota Statutes 2012, section 428A.02, subdivision 1, is amended to read:
274.2    Subdivision 1. Ordinance. The governing body of a city may adopt an ordinance
274.3establishing a special service district. Only property that is classified under section 273.13
274.4and used for commercial, industrial, or public utility purposes, or is vacant land zoned or
274.5designated on a land use plan for commercial or industrial use and located in the special
274.6service district, may be subject to the charges imposed by the city on the special service
274.7district. Other types of property may be included within the boundaries of the special
274.8service district but are not subject to the levies or charges imposed by the city on the
274.9special service district. If 50 percent or more of the estimated market value of a parcel of
274.10property is classified under section 273.13 as commercial, industrial, or vacant land zoned
274.11or designated on a land use plan for commercial or industrial use, or public utility for the
274.12current assessment year, then the entire taxable market value of the property is subject to a
274.13service charge based on net tax capacity for purposes of sections 428A.01 to 428A.10.
274.14The ordinance shall describe with particularity the area within the city to be included in
274.15the district and the special services to be furnished in the district. The ordinance may not
274.16be adopted until after a public hearing has been held on the question. Notice of the hearing
274.17shall include the time and place of hearing, a map showing the boundaries of the proposed
274.18district, and a statement that all persons owning property in the proposed district that
274.19would be subject to a service charge will be given opportunity to be heard at the hearing.
274.20Within 30 days after adoption of the ordinance under this subdivision, the governing body
274.21shall send a copy of the ordinance to the commissioner of revenue.

274.22    Sec. 68. Minnesota Statutes 2012, section 430.102, subdivision 2, is amended to read:
274.23    Subd. 2. Council approval; special tax levy limitation. The council shall receive
274.24and consider the estimate required in subdivision 1 and the items of cost after notice and
274.25hearing before it or its appropriate committee as it considers necessary or expedient, and
274.26shall approve the estimate, with necessary amendments. The amounts of each item of cost
274.27estimated are then appropriated to operate, maintain, and improve the pedestrian mall
274.28during the next fiscal year. The amount of the special tax to be charged under subdivision
274.291, clause (3), must not, however, exceed 0.12089 percent of estimated market value of
274.30taxable property in the district. The council shall make any necessary adjustment in costs of
274.31operating and maintaining the district to keep the amount of the tax within this limitation.

274.32    Sec. 69. Minnesota Statutes 2012, section 447.10, is amended to read:
274.33447.10 TAX LEVY FOR OPERATING AND MAINTAINING HOSPITAL.
275.1    The governing body of a city of the first class owning a hospital may annually levy
275.2a tax to operate and maintain the hospital. The tax must not exceed 0.00806 percent of
275.3taxable estimated market value.

275.4    Sec. 70. Minnesota Statutes 2012, section 450.19, is amended to read:
275.5450.19 TOURIST CAMPING GROUNDS.
275.6    A home rule charter or statutory city or town may establish and maintain public
275.7tourist camping grounds. The governing body thereof may acquire by lease, purchase, or
275.8gift, suitable lands located either within or without the corporate limits for use as public
275.9tourist camping grounds and provide for the equipment, operation, and maintenance
275.10of the same. The amount that may be expended for the maintenance, improvement, or
275.11operation of tourist camping grounds shall not exceed, in any year, a sum equal to 0.00806
275.12percent of taxable estimated market value.

275.13    Sec. 71. Minnesota Statutes 2012, section 450.25, is amended to read:
275.14450.25 MUSEUM, GALLERY, OR SCHOOL OF ARTS OR CRAFTS; TAX
275.15LEVY.
275.16    After the acquisition of any museum, gallery, or school of arts or crafts, the board
275.17of park commissioners of the city in which it is located shall cause to be included in the
275.18annual tax levy upon all the taxable property of the county in which the museum, gallery,
275.19or school of arts or crafts is located, a tax of 0.00846 percent of estimated market value.
275.20The board shall certify the levy to the county auditor and it shall be added to, and collected
275.21with and as part of, the general, real, and personal property taxes, with like penalties and
275.22interest, in case of nonpayment and default, and all provisions of law in respect to the
275.23levy, collection, and enforcement of other taxes shall, so far as applicable, be followed in
275.24respect of these taxes. All of these taxes, penalties, and interest, when collected, shall be
275.25paid to the city treasurer of the city in which is located the museum, gallery, or school
275.26of arts or crafts and credited to a fund to be known as the park museum fund, and shall
275.27be used only for the purposes specified in sections 450.23 to 450.25. Any part of the
275.28proceeds of the levy not expended for the purposes specified in section 450.24 may be
275.29used for the erection of new buildings for the same purposes.

275.30    Sec. 72. Minnesota Statutes 2012, section 458A.10, is amended to read:
275.31458A.10 PROPERTY TAX.
276.1    The commission shall annually levy a tax not to exceed 0.12089 percent of estimated
276.2market value on all the taxable property in the transit area at a rate sufficient to produce
276.3an amount necessary for the purposes of sections 458A.01 to 458A.15, other than the
276.4payment of principal and interest due on any revenue bonds issued pursuant to section
276.5458A.05 . Property taxes levied under this section shall be certified by the commission to
276.6the county auditors of the transit area, extended, assessed, and collected in the manner
276.7provided by law for the property taxes levied by the governing bodies of cities. The
276.8proceeds of the taxes levied under this section shall be remitted by the respective county
276.9treasurers to the treasurer of the commission, who shall credit the same to the funds of
276.10the commission for use for the purposes of sections 458A.01 to 458A.15 subject to any
276.11applicable pledges or limitations on account of tax anticipation certificates or other
276.12specific purposes. At any time after making a tax levy under this section and certifying
276.13it to the county auditors, the commission may issue general obligation certificates of
276.14indebtedness in anticipation of the collection of the taxes as provided by section 412.261.

276.15    Sec. 73. Minnesota Statutes 2012, section 458A.31, subdivision 1, is amended to read:
276.16    Subdivision 1. Levy limit. Notwithstanding anything to the contrary contained in
276.17the charter of the city of Duluth, any ordinance thereof, or any statute applicable thereto,
276.18limiting the amount levied in any one year for general or special purposes, the city council
276.19of the city of Duluth shall each year levy a tax in an amount not to exceed 0.07253
276.20percent of taxable estimated market value, by ordinance. An ordinance fixing the levy
276.21shall take effect immediately upon its passage and approval. The proceeds of the levy
276.22shall be paid into the city treasury and deposited in the operating fund provided for in
276.23section 458A.24, subdivision 3.

276.24    Sec. 74. Minnesota Statutes 2012, section 465.04, is amended to read:
276.25465.04 ACCEPTANCE OF GIFTS.
276.26    Cities of the second, third, or fourth class, having at any time a an estimated
276.27 market value of not more than $41,000,000, exclusive of money and credits, as officially
276.28equalized by the commissioner of revenue, either under home rule charter or under the
276.29laws of this state, in addition to all other powers possessed by them, hereby are authorized
276.30and empowered to receive and accept gifts and donations for the use and benefit of
276.31such cities and the inhabitants thereof upon terms and conditions to be approved by the
276.32governing bodies of such cities; and such cities are authorized to comply with and perform
276.33such terms and conditions, which may include payment to the donor or donors of interest
277.1on the value of the gift at not exceeding five percent per annum payable annually or
277.2semiannually, during the remainder of the natural life or lives of such donor or donors.

277.3    Sec. 75. Minnesota Statutes 2012, section 469.033, subdivision 6, is amended to read:
277.4    Subd. 6. Operation area as taxing district, special tax. All of the territory included
277.5within the area of operation of any authority shall constitute a taxing district for the
277.6purpose of levying and collecting special benefit taxes as provided in this subdivision. All
277.7of the taxable property, both real and personal, within that taxing district shall be deemed
277.8to be benefited by projects to the extent of the special taxes levied under this subdivision.
277.9Subject to the consent by resolution of the governing body of the city in and for which
277.10it was created, an authority may levy a tax upon all taxable property within that taxing
277.11district. The tax shall be extended, spread, and included with and as a part of the general
277.12taxes for state, county, and municipal purposes by the county auditor, to be collected and
277.13enforced therewith, together with the penalty, interest, and costs. As the tax, including any
277.14penalties, interest, and costs, is collected by the county treasurer it shall be accumulated
277.15and kept in a separate fund to be known as the "housing and redevelopment project fund."
277.16The money in the fund shall be turned over to the authority at the same time and in the same
277.17manner that the tax collections for the city are turned over to the city, and shall be expended
277.18only for the purposes of sections 469.001 to 469.047. It shall be paid out upon vouchers
277.19signed by the chair of the authority or an authorized representative. The amount of the
277.20levy shall be an amount approved by the governing body of the city, but shall not exceed
277.210.0185 percent of taxable estimated market value. The authority shall each year formulate
277.22and file a budget in accordance with the budget procedure of the city in the same manner as
277.23required of executive departments of the city or, if no budgets are required to be filed, by
277.24August 1. The amount of the tax levy for the following year shall be based on that budget.

277.25    Sec. 76. Minnesota Statutes 2012, section 469.034, subdivision 2, is amended to read:
277.26    Subd. 2. General obligation revenue bonds. (a) An authority may pledge the
277.27general obligation of the general jurisdiction governmental unit as additional security for
277.28bonds payable from income or revenues of the project or the authority. The authority
277.29must find that the pledged revenues will equal or exceed 110 percent of the principal and
277.30interest due on the bonds for each year. The proceeds of the bonds must be used for a
277.31qualified housing development project or projects. The obligations must be issued and
277.32sold in the manner and following the procedures provided by chapter 475, except the
277.33obligations are not subject to approval by the electors, and the maturities may extend to
277.34not more than 35 years for obligations sold to finance housing for the elderly and 40 years
278.1for other obligations issued under this subdivision. The authority is the municipality for
278.2purposes of chapter 475.
278.3    (b) The principal amount of the issue must be approved by the governing body of
278.4the general jurisdiction governmental unit whose general obligation is pledged. Public
278.5hearings must be held on issuance of the obligations by both the authority and the general
278.6jurisdiction governmental unit. The hearings must be held at least 15 days, but not more
278.7than 120 days, before the sale of the obligations.
278.8    (c) The maximum amount of general obligation bonds that may be issued and
278.9outstanding under this section equals the greater of (1) one-half of one percent of the
278.10taxable estimated market value of the general jurisdiction governmental unit whose
278.11general obligation is pledged, or (2) $3,000,000. In the case of county or multicounty
278.12general obligation bonds, the outstanding general obligation bonds of all cities in the
278.13county or counties issued under this subdivision must be added in calculating the limit
278.14under clause (1).
278.15    (d) "General jurisdiction governmental unit" means the city in which the housing
278.16development project is located. In the case of a county or multicounty authority, the
278.17county or counties may act as the general jurisdiction governmental unit. In the case of
278.18a multicounty authority, the pledge of the general obligation is a pledge of a tax on the
278.19taxable property in each of the counties.
278.20    (e) "Qualified housing development project" means a housing development project
278.21providing housing either for the elderly or for individuals and families with incomes not
278.22greater than 80 percent of the median family income as estimated by the United States
278.23Department of Housing and Urban Development for the standard metropolitan statistical
278.24area or the nonmetropolitan county in which the project is located. The project must be
278.25owned for the term of the bonds either by the authority or by a limited partnership or other
278.26entity in which the authority or another entity under the sole control of the authority is
278.27the sole general partner and the partnership or other entity must receive (1) an allocation
278.28from the Department of Management and Budget or an entitlement issuer of tax-exempt
278.29bonding authority for the project and a preliminary determination by the Minnesota
278.30Housing Finance Agency or the applicable suballocator of tax credits that the project
278.31will qualify for four percent low-income housing tax credits or (2) a reservation of nine
278.32percent low-income housing tax credits from the Minnesota Housing Finance Agency or a
278.33suballocator of tax credits for the project. A qualified housing development project may
278.34admit nonelderly individuals and families with higher incomes if:
278.35    (1) three years have passed since initial occupancy;
279.1    (2) the authority finds the project is experiencing unanticipated vacancies resulting in
279.2insufficient revenues, because of changes in population or other unforeseen circumstances
279.3that occurred after the initial finding of adequate revenues; and
279.4    (3) the authority finds a tax levy or payment from general assets of the general
279.5jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher
279.6income individuals or families are not admitted.
279.7    (f) The authority may issue bonds to refund bonds issued under this subdivision in
279.8accordance with section 475.67. The finding of the adequacy of pledged revenues required
279.9by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the
279.10issuance of refunding bonds. This paragraph applies to refunding bonds issued on and
279.11after July 1, 1992.

279.12    Sec. 77. Minnesota Statutes 2012, section 469.053, subdivision 4, is amended to read:
279.13    Subd. 4. Mandatory city levy. A city shall, at the request of the port authority, levy
279.14a tax in any year for the benefit of the port authority. The tax must not exceed 0.01813
279.15percent of taxable estimated market value. The amount levied must be paid by the city
279.16treasurer to the treasurer of the port authority, to be spent by the authority.

279.17    Sec. 78. Minnesota Statutes 2012, section 469.053, subdivision 4a, is amended to read:
279.18    Subd. 4a. Seaway port authority levy. A levy made under this subdivision shall
279.19replace the mandatory city levy under subdivision 4. A seaway port authority is a special
279.20taxing district under section 275.066 and may levy a tax in any year for the benefit of the
279.21seaway port authority. The tax must not exceed 0.01813 percent of taxable estimated
279.22 market value. The county auditor shall distribute the proceeds of the property tax levy to
279.23the seaway port authority.

279.24    Sec. 79. Minnesota Statutes 2012, section 469.053, subdivision 6, is amended to read:
279.25    Subd. 6. Discretionary city levy. Upon request of a port authority, the port
279.26authority's city may levy a tax to be spent by and for its port authority. The tax must
279.27enable the port authority to carry out efficiently and in the public interest sections 469.048
279.28to 469.068 to create and develop industrial development districts. The levy must not be
279.29more than 0.00282 percent of taxable estimated market value. The county treasurer shall
279.30pay the proceeds of the tax to the port authority treasurer. The money may be spent by
279.31the authority in performance of its duties to create and develop industrial development
279.32districts. In spending the money the authority must judge what best serves the public
279.33interest. The levy in this subdivision is in addition to the levy in subdivision 4.

280.1    Sec. 80. Minnesota Statutes 2012, section 469.107, subdivision 1, is amended to read:
280.2    Subdivision 1. City tax levy. A city may, at the request of the authority, levy a tax in
280.3any year for the benefit of the authority. The tax must be not more than 0.01813 percent of
280.4taxable estimated market value. The amount levied must be paid by the city treasurer to
280.5the treasurer of the authority, to be spent by the authority.

280.6    Sec. 81. Minnesota Statutes 2012, section 469.180, subdivision 2, is amended to read:
280.7    Subd. 2. Tax levies. Notwithstanding any law, the county board of any county may
280.8appropriate from the general revenue fund a sum not to exceed a county levy of 0.00080
280.9percent of taxable estimated market value to carry out the purposes of this section.

280.10    Sec. 82. Minnesota Statutes 2012, section 469.187, is amended to read:
280.11469.187 FIRST CLASS CITY SPENDING FOR PUBLICITY; PUBLICITY
280.12BOARD.
280.13    Any city of the first class may expend money for city publicity purposes. The city may
280.14levy a tax, not exceeding 0.00080 percent of taxable estimated market value. The proceeds
280.15of the levy shall be expended in the manner and for the city publicity purposes the council
280.16directs. The council may establish and provide for a publicity board or bureau to administer
280.17the fund, subject to the conditions and limitations the council prescribes by ordinance.

280.18    Sec. 83. Minnesota Statutes 2012, section 469.206, is amended to read:
280.19469.206 HAZARDOUS PROPERTY PENALTY.
280.20    A city may assess a penalty up to one percent of the estimated market value of
280.21real property, including any building located within the city that the city determines to
280.22be hazardous as defined in section 463.15, subdivision 3. The city shall send a written
280.23notice to the address to which the property tax statement is sent at least 90 days before it
280.24may assess the penalty. If the owner of the property has not paid the penalty or fixed the
280.25property within 90 days after receiving notice of the penalty, the penalty is considered
280.26delinquent and is increased by 25 percent each 60 days the penalty is not paid and the
280.27property remains hazardous. For the purposes of this section, a penalty that is delinquent
280.28is considered a delinquent property tax and subject to chapters 279, 280, and 281, in the
280.29same manner as delinquent property taxes.

281.1    Sec. 84. Minnesota Statutes 2012, section 471.24, is amended to read:
281.2471.24 TOWNS, STATUTORY CITIES; JOINT MAINTENANCE OF
281.3CEMETERY.
281.4    Where a statutory city or town owns and maintains an established cemetery or burial
281.5ground, either within or without the municipal limits, the statutory city or town may, by
281.6mutual agreement with contiguous statutory cities and towns, each having a an estimated
281.7 market value of not less than $2,000,000, join together in the maintenance of such public
281.8cemetery or burial ground for the use of the inhabitants of each of such municipalities; and
281.9each such municipality is hereby authorized, by action of its council or governing body,
281.10to levy a tax or make an appropriation for the annual support and maintenance of such
281.11cemetery or burial ground; provided, the amount thus appropriated by each municipality
281.12shall not exceed a total of $10,000 in any one year.

281.13    Sec. 85. Minnesota Statutes 2012, section 471.571, subdivision 1, is amended to read:
281.14    Subdivision 1. Application. This section applies to each city in which the net tax
281.15capacity of real and personal property consists in part of iron ore or lands containing
281.16taconite or semitaconite and in which the total taxable estimated market value of real
281.17and personal property exceeds $2,500,000.

281.18    Sec. 86. Minnesota Statutes 2012, section 471.571, subdivision 2, is amended to read:
281.19    Subd. 2. Creation of fund, tax levy. The governing body of the city may create a
281.20permanent improvement and replacement fund to be maintained by an annual tax levy.
281.21The governing body may levy a tax in excess of any charter limitation for the support of
281.22the permanent improvement and replacement fund, but not exceeding the following:
281.23    (a) in cities having a population of not more than 500 inhabitants, the lesser of $20
281.24per capita or 0.08059 percent of taxable estimated market value;
281.25    (b) in cities having a population of more than 500 and less than 2500 2,500, the
281.26greater of $12.50 per capita or $10,000 but not exceeding 0.08059 percent of taxable
281.27 estimated market value;
281.28    (c) in cities having a population of more than 2500 2,500 or more inhabitants,
281.29the greater of $10 per capita or $31,500 but not exceeding 0.08059 percent of taxable
281.30 estimated market value.

281.31    Sec. 87. Minnesota Statutes 2012, section 471.73, is amended to read:
281.32471.73 ACCEPTANCE OF PROVISIONS.
282.1    In the case of any city within the class specified in section 471.72 having a an
282.2estimated market value, as defined in section 471.72, in excess of $37,000,000; and in the
282.3case of any statutory city within such class having a an estimated market value, as defined
282.4in section 471.72, of less than $5,000,000; and in the case of any statutory city within such
282.5class which is governed by Laws 1933, chapter 211, or Laws 1937, chapter 356; and in
282.6the case of any statutory city within such class which is governed by Laws 1929, chapter
282.7208, and has a an estimated market value of less than $83,000,000; and in the case of
282.8any school district within such class having a an estimated market value, as defined in
282.9section 471.72, of more than $54,000,000; and in the case of all towns within said class;
282.10sections 471.71 to 471.83 apply only if the governing body of the city or statutory city, the
282.11board of the school district, or the town board of the town shall have adopted a resolution
282.12determining to issue bonds under the provisions of sections 471.71 to 471.83 or to go
282.13upon a cash basis in accordance with the provisions thereof.

282.14    Sec. 88. Minnesota Statutes 2012, section 473.325, subdivision 2, is amended to read:
282.15    Subd. 2. Chapter 475 applies; exceptions. The Metropolitan Council shall sell and
282.16issue the bonds in the manner provided in chapter 475, and shall have the same powers
282.17and duties as a municipality issuing bonds under that law, except that the approval of a
282.18majority of the electors shall not be required and the net debt limitations shall not apply.
282.19The terms of each series of bonds shall be fixed so that the amount of principal and interest
282.20on all outstanding and undischarged bonds, together with the bonds proposed to be issued,
282.21due in any year shall not exceed 0.01209 percent of estimated market value of all taxable
282.22property in the metropolitan area as last finally equalized prior to a proposed issue. The
282.23bonds shall be secured in accordance with section 475.61, subdivision 1, and any taxes
282.24required for their payment shall be levied by the council, shall not affect the amount or rate
282.25of taxes which may be levied by the council for other purposes, shall be spread against all
282.26taxable property in the metropolitan area and shall not be subject to limitation as to rate or
282.27amount. Any taxes certified by the council to the county auditors for collection shall be
282.28reduced by the amount received by the council from the commissioner of management and
282.29budget or the federal government for the purpose of paying the principal and interest on
282.30bonds to which the levy relates. The council shall certify the fact and amount of all money
282.31so received to the county auditors, and the auditors shall reduce the levies previously made
282.32for the bonds in the manner and to the extent provided in section 475.61, subdivision 3.

283.1    Sec. 89. Minnesota Statutes 2012, section 473.629, is amended to read:
283.2473.629 VALUE OF PROPERTY FOR BOND ISSUES BY SCHOOL
283.3DISTRICTS.
283.4    As to any lands to be detached from any school district under the provisions hereof
283.5 section 473.625, notwithstanding such prospective the detachment, the estimated market
283.6value of such the detached lands and the net tax capacity of taxable properties now located
283.7therein or thereon shall be and on the lands on the date of the detachment constitute
283.8from and after the date of the enactment hereof a part of the estimated market value of
283.9properties upon the basis of which such used to calculate the net debt limit of the school
283.10district may issue its bonds,. The value of such the lands for such purpose to be and other
283.11taxable properties for purposes of the school district's net debt limit are 33-1/3 percent of
283.12the estimated market value thereof as determined and certified by said the assessor to said
283.13 the school district, and it shall be the duty of such the assessor annually on or before the
283.14tenth day of October from and after the passage hereof, to so of each year, shall determine
283.15and certify that value; provided, however, that the value of such the detached lands and
283.16such taxable properties shall never exceed 20 percent of the estimated market value of
283.17all properties constituting and making up the basis aforesaid used to calculate the net
283.18debt limit of the school district.

283.19    Sec. 90. Minnesota Statutes 2012, section 473.661, subdivision 3, is amended to read:
283.20    Subd. 3. Levy limit. In any budget certified by the commissioners under this section,
283.21the amount included for operation and maintenance shall not exceed an amount which,
283.22when extended against the property taxable therefor under section 473.621, subdivision 5,
283.23will require a levy at a rate of 0.00806 percent of estimated market value. Taxes levied by
283.24the corporation shall not affect the amount or rate of taxes which may be levied by any other
283.25local government unit within the metropolitan area under the provisions of any charter.

283.26    Sec. 91. Minnesota Statutes 2012, section 473.667, subdivision 9, is amended to read:
283.27    Subd. 9. Additional taxes. Nothing herein shall prevent the commission from
283.28levying a tax not to exceed 0.00121 percent of estimated market value on taxable property
283.29within its taxing jurisdiction, in addition to any levies found necessary for the debt
283.30service fund authorized by section 473.671. Nothing herein shall prevent the levy and
283.31appropriation for purposes of the commission of any other tax on property or on any
283.32income, transaction, or privilege, when and if authorized by law. All collections of any
283.33taxes so levied shall be included in the revenues appropriated for the purposes referred
283.34to in this section, unless otherwise provided in the law authorizing the levies; but no
284.1covenant as to the continuance or as to the rate and amount of any such levy shall be made
284.2with the holders of the commission's bonds unless specifically authorized by law.

284.3    Sec. 92. Minnesota Statutes 2012, section 473.671, is amended to read:
284.4473.671 LIMIT OF TAX LEVY.
284.5    The taxes levied against the property of the metropolitan area in any one year shall
284.6not exceed 0.00806 percent of taxable estimated market value, exclusive of taxes levied
284.7to pay the principal or interest on any bonds or indebtedness of the city issued under
284.8Laws 1943, chapter 500, and exclusive of any taxes levied to pay the share of the city for
284.9payments on bonded indebtedness of the corporation provided for in Laws 1943, chapter
284.10500. The levy of taxes authorized in Laws 1943, chapter 500, shall be in addition to the
284.11maximum rate allowed to be levied to defray the cost of government under the provisions
284.12of the charter of any city affected by Laws 1943, chapter 500.

284.13    Sec. 93. Minnesota Statutes 2012, section 473.711, subdivision 2a, is amended to read:
284.14    Subd. 2a. Tax levy. (a) The commission may levy a tax on all taxable property in the
284.15district as defined in section 473.702 to provide funds for the purposes of sections 473.701
284.16to 473.716. The tax shall not exceed the property tax levy limitation determined in this
284.17subdivision. A participating county may agree to levy an additional tax to be used by the
284.18commission for the purposes of sections 473.701 to 473.716 but the sum of the county's and
284.19commission's taxes may not exceed the county's proportionate share of the property tax levy
284.20limitation determined under this subdivision based on the ratio of its total net tax capacity
284.21to the total net tax capacity of the entire district as adjusted by section 270.12, subdivision
284.223 . The auditor of each county in the district shall add the amount of the levy made by the
284.23district to other taxes of the county for collection by the county treasurer with other taxes.
284.24When collected, the county treasurer shall make settlement of the tax with the district in
284.25the same manner as other taxes are distributed to political subdivisions. No county shall
284.26levy any tax for mosquito, disease vectoring tick, and black gnat (Simuliidae) control
284.27except under this section. The levy shall be in addition to other taxes authorized by law.
284.28    (b) The property tax levied by the Metropolitan Mosquito Control Commission shall
284.29not exceed the product of (i) the commission's property tax levy limitation for the previous
284.30year determined under this subdivision multiplied by (ii) an index for market valuation
284.31changes equal to the total estimated market valuation value of all taxable property for the
284.32current tax payable year located within the district plus any area that has been added to the
284.33district since the previous year, divided by the total estimated market valuation value of all
284.34taxable property located within the district for the previous taxes payable year.
285.1    (c) For the purpose of determining the commission's property tax levy limitation
285.2under this subdivision, "total market valuation" means the total market valuation of all
285.3taxable property within the district without valuation adjustments for fiscal disparities
285.4(chapter 473F), tax increment financing (sections 469.174 to 469.179), and high voltage
285.5transmission lines (section 273.425).

285.6    Sec. 94. Minnesota Statutes 2012, section 473F.02, subdivision 12, is amended to read:
285.7    Subd. 12. Adjusted market value. "Adjusted market value" of real and personal
285.8property within a municipality means the assessor's estimated taxable market value,
285.9as defined in section 272.03, of all real and personal property, including the value of
285.10manufactured housing, within the municipality, adjusted for sales ratios in a manner
285.11similar to the adjustments made to city and town net tax capacities. For purposes
285.12of sections 473F.01 to 473F.13, the commissioner of revenue shall annually make
285.13determinations and reports with respect to each municipality which are comparable to
285.14those it makes for school districts under section 127A.48, subdivisions 1 to 6, in the same
285.15manner and at the same times as are prescribed by the subdivisions. The commissioner
285.16of revenue shall annually determine, for each municipality, information comparable to
285.17that required by section 475.53, subdivision 4, for school districts, as soon as practicable
285.18after it becomes available. The commissioner of revenue shall then compute the equalized
285.19market value of property within each municipality using the aggregate sales ratios from
285.20the Department of Revenue's sales ratio study.

285.21    Sec. 95. Minnesota Statutes 2012, section 473F.02, subdivision 14, is amended to read:
285.22    Subd. 14. Fiscal capacity. "Fiscal capacity" of a municipality means its valuation
285.23 adjusted market value, determined as of January 2 of any year, divided by its population,
285.24determined as of a date in the same year.

285.25    Sec. 96. Minnesota Statutes 2012, section 473F.02, subdivision 15, is amended to read:
285.26    Subd. 15. Average fiscal capacity. "Average fiscal capacity" of municipalities
285.27means the sum of the valuations adjusted market values of all municipalities, determined
285.28as of January 2 of any year, divided by the sum of their populations, determined as of
285.29a date in the same year.

285.30    Sec. 97. Minnesota Statutes 2012, section 473F.02, subdivision 23, is amended to read:
285.31    Subd. 23. Net tax capacity. "Net tax capacity" means the taxable market value of
285.32real and personal property multiplied by its net tax capacity rates in section 273.13.

286.1    Sec. 98. Minnesota Statutes 2012, section 473F.08, subdivision 10, is amended to read:
286.2    Subd. 10. Adjustment of value or net tax capacity. For the purpose of computing
286.3the amount or rate of any salary, aid, tax, or debt authorized, required, or limited by any
286.4provision of any law or charter, where such authorization, requirement, or limitation
286.5is related in any manner to any value or valuation of taxable property within any
286.6governmental unit, such value or net tax capacity fiscal capacity under section 473F.02,
286.7subdivision 14, a municipality's taxable market value shall be adjusted to reflect the
286.8adjustments reductions to net tax capacity effected by subdivision 2, clause (a), provided
286.9that: (1) in determining the taxable market value of commercial-industrial property
286.10or any class thereof within a governmental unit for any purpose other than section
286.11473F.07 municipality, (a) the reduction required by this subdivision shall be that amount
286.12which bears the same proportion to the amount subtracted from the governmental unit's
286.13 municipality's net tax capacity pursuant to subdivision 2, clause (a), as the taxable
286.14market value of commercial-industrial property, or such class thereof, located within the
286.15governmental unit municipality bears to the net tax capacity of commercial-industrial
286.16property, or such class thereof, located within the governmental unit, and (b) the increase
286.17required by this subdivision shall be that amount which bears the same proportion to
286.18the amount added to the governmental unit's net tax capacity pursuant to subdivision 2,
286.19clause (b), as the market value of commercial-industrial property, or such class thereof,
286.20located within the governmental unit bears to the net tax capacity of commercial-industrial
286.21property, or such class thereof, located within the governmental unit; and (2) in determining
286.22the market value of real property within a municipality for purposes of section 473F.07,
286.23the adjustment prescribed by clause (1)(a) hereof shall be made and that prescribed by
286.24clause (1)(b) hereof shall not be made municipality. No adjustment shall be made to
286.25taxable market value for the increase in net tax capacity under subdivision 2, clause (b).

286.26    Sec. 99. Minnesota Statutes 2012, section 475.521, subdivision 4, is amended to read:
286.27    Subd. 4. Limitations on amount. A municipality may not issue bonds under this
286.28section if the maximum amount of principal and interest to become due in any year on
286.29all the outstanding bonds issued under this section, including the bonds to be issued,
286.30will equal or exceed 0.16 percent of the taxable estimated market value of property
286.31in the municipality. Calculation of the limit must be made using the taxable estimated
286.32 market value for the taxes payable year in which the obligations are issued and sold. In
286.33the case of a municipality with a population of 2,500 or more, the bonds are subject to
286.34the net debt limits under section 475.53. In the case of a shared facility in which more
286.35than one municipality participates, upon compliance by each participating municipality
287.1with the requirements of subdivision 2, the limitations in this subdivision and the net debt
287.2represented by the bonds shall be allocated to each participating municipality in proportion
287.3to its required financial contribution to the financing of the shared facility, as set forth in
287.4the joint powers agreement relating to the shared facility. This section does not limit the
287.5authority to issue bonds under any other special or general law.

287.6    Sec. 100. Minnesota Statutes 2012, section 475.53, subdivision 1, is amended to read:
287.7    Subdivision 1. Generally. Except as otherwise provided in sections 475.51 to
287.8475.74 , no municipality, except a school district or a city of the first class, shall incur or be
287.9subject to a net debt in excess of three percent of the estimated market value of taxable
287.10property in the municipality.

287.11    Sec. 101. Minnesota Statutes 2012, section 475.53, subdivision 3, is amended to read:
287.12    Subd. 3. Cities first class. Unless its charter permits a greater net debt a city of
287.13the first class may not incur a net debt in excess of two percent of the estimated market
287.14value of all taxable property therein. If the charter of the city permits a net debt of the city
287.15in excess of two percent of its valuation, it may not incur a net debt in excess of 3-2/3
287.16percent of the estimated market value of the taxable property therein.
287.17    The county auditor, at the time of preparing the tax list of the city, shall compile a
287.18statement setting forth the total net tax capacity and the total estimated market value of
287.19each class of taxable property in such city for such year.

287.20    Sec. 102. Minnesota Statutes 2012, section 475.53, subdivision 4, is amended to read:
287.21    Subd. 4. School districts. Except as otherwise provided by law, no school district
287.22shall be subject to a net debt in excess of 15 percent of the actual estimated market value of
287.23all taxable property situated within its corporate limits, as computed in accordance with this
287.24subdivision. The county auditor of each county containing taxable real or personal property
287.25situated within any school district shall certify to the district upon request the estimated
287.26market value of all such property. Whenever the commissioner of revenue, in accordance
287.27with section 127A.48, subdivisions 1 to 6, has determined that the net tax capacity of any
287.28district furnished by county auditors is not based upon the adjusted market value of taxable
287.29property in the district exceeds the estimated market value of property within the district,
287.30the commissioner of revenue shall certify to the district upon request the ratio most recently
287.31ascertained to exist between such the estimated market value and the actual adjusted
287.32 market value of property within the district., and the actual market value of property
287.33within a district, on which its debt limit under this subdivision is will be based, is (a) the
288.1value certified by the county auditors, or (b) this on the estimated market value divided by
288.2the ratio certified by the commissioner of revenue, whichever results in a higher value.

288.3    Sec. 103. Minnesota Statutes 2012, section 475.58, subdivision 2, is amended to read:
288.4    Subd. 2. Funding, refunding. Any county, city, town, or school district whose
288.5outstanding gross debt, including all items referred to in section 475.51, subdivision
288.64 , exceed in amount 1.62 percent of its estimated market value may issue bonds under
288.7this subdivision for the purpose of funding or refunding such indebtedness or any part
288.8thereof. A list of the items of indebtedness to be funded or refunded shall be made by the
288.9recording officer and treasurer and filed in the office of the recording officer. The initial
288.10resolution of the governing body shall refer to this subdivision as authority for the issue,
288.11state the amount of bonds to be issued and refer to the list of indebtedness to be funded or
288.12refunded. This resolution shall be published once each week for two successive weeks
288.13in a legal newspaper published in the municipality or if there be no such newspaper, in
288.14a legal newspaper published in the county seat. Such bonds may be issued without the
288.15submission of the question of their issue to the electors unless within ten days after the
288.16second publication of the resolution a petition requesting such election signed by ten or
288.17more voters who are taxpayers of the municipality, shall be filed with the recording officer.
288.18In event such petition is filed, no bonds shall be issued hereunder unless authorized by a
288.19majority of the electors voting on the question.

288.20    Sec. 104. Minnesota Statutes 2012, section 475.73, subdivision 1, is amended to read:
288.21    Subdivision 1. May purchase these bonds; conditions. Obligations sold under the
288.22provisions of section 475.60 may be purchased by the State Board of Investment if the
288.23obligations meet the requirements of section 11A.24, subdivision 2, upon the approval of
288.24the attorney general as to form and execution of the application therefor, and under rules
288.25as the board may specify, and the state board shall have authority to purchase the same
288.26to an amount not exceeding 3.63 percent of the estimated market value of the taxable
288.27property of the municipality, according to the last preceding assessment. The obligations
288.28shall not run for a shorter period than one year, nor for a longer period than 30 years and
288.29shall bear interest at a rate to be fixed by the state board but not less than two percent per
288.30annum. Forthwith upon the delivery to the state of Minnesota of any obligations issued by
288.31virtue thereof, the commissioner of management and budget shall certify to the respective
288.32auditors of the various counties wherein are situated the municipalities issuing the same,
288.33the number, denomination, amount, rate of interest and date of maturity of each obligation.

289.1    Sec. 105. Minnesota Statutes 2012, section 477A.011, subdivision 20, is amended to
289.2read:
289.3    Subd. 20. City net tax capacity. "City net tax capacity" means (1) the net tax
289.4capacity computed using the net tax capacity rates in section 273.13 for taxes payable
289.5in the year of the aid distribution, and the market values, after the exclusion in section
289.6273.13, subdivision 35, for taxes payable in the year prior to the aid distribution plus (2)
289.7a city's fiscal disparities distribution tax capacity under section 276A.06, subdivision 2,
289.8paragraph (b), or 473F.08, subdivision 2, paragraph (b), for taxes payable in the year prior
289.9to that for which aids are being calculated. The market value utilized in computing city
289.10net tax capacity shall be reduced by the sum of (1) a city's market value of commercial
289.11industrial property as defined in section 276A.01, subdivision 3, or 473F.02, subdivision 3,
289.12multiplied by the ratio determined pursuant to section 276A.06, subdivision 2, paragraph
289.13(a), or 473F.08, subdivision 2, paragraph (a), (2) the market value of the captured value
289.14of tax increment financing districts as defined in section 469.177, subdivision 2, and (3)
289.15the market value of transmission lines deducted from a city's total net tax capacity under
289.16section 273.425. The city net tax capacity will be computed using equalized market values
289.17 the city's adjusted net tax capacity under section 273.1325.
289.18EFFECTIVE DATE.This section is effective the day following final enactment.

289.19    Sec. 106. Minnesota Statutes 2012, section 477A.011, subdivision 32, is amended to
289.20read:
289.21    Subd. 32. Commercial industrial percentage. "Commercial industrial percentage"
289.22for a city is 100 times the sum of the estimated market values of all real property in the
289.23city classified as class 3 under section 273.13, subdivision 24, excluding public utility
289.24property, to the total estimated market value of all taxable real and personal property in
289.25the city. The estimated market values are the amounts computed before any adjustments
289.26for fiscal disparities under section 276A.06 or 473F.08. The estimated market values
289.27used for this subdivision are not equalized.
289.28EFFECTIVE DATE.This section is effective for aids payable in 2014 and thereafter.

289.29    Sec. 107. Minnesota Statutes 2012, section 477A.0124, subdivision 2, is amended to
289.30read:
289.31    Subd. 2. Definitions. (a) For the purposes of this section, the following terms
289.32have the meanings given them.
290.1    (b) "County program aid" means the sum of "county need aid," "county tax base
290.2equalization aid," and "county transition aid."
290.3    (c) "Age-adjusted population" means a county's population multiplied by the county
290.4age index.
290.5    (d) "County age index" means the percentage of the population over age 65 within
290.6the county divided by the percentage of the population over age 65 within the state, except
290.7that the age index for any county may not be greater than 1.8 nor less than 0.8.
290.8    (e) "Population over age 65" means the population over age 65 established as of
290.9July 15 in an aid calculation year by the most recent federal census, by a special census
290.10conducted under contract with the United States Bureau of the Census, by a population
290.11estimate made by the Metropolitan Council, or by a population estimate of the state
290.12demographer made pursuant to section 4A.02, whichever is the most recent as to the stated
290.13date of the count or estimate for the preceding calendar year and which has been certified
290.14to the commissioner of revenue on or before July 15 of the aid calculation year. A revision
290.15to an estimate or count is effective for these purposes only if certified to the commissioner
290.16on or before July 15 of the aid calculation year. Clerical errors in the certification or use of
290.17estimates and counts established as of July 15 in the aid calculation year are subject to
290.18correction within the time periods allowed under section 477A.014.
290.19    (f) "Part I crimes" means the three-year average annual number of Part I crimes
290.20reported for each county by the Department of Public Safety for the most recent years
290.21available. By July 1 of each year, the commissioner of public safety shall certify to the
290.22commissioner of revenue the number of Part I crimes reported for each county for the
290.23three most recent calendar years available.
290.24    (g) "Households receiving food stamps" means the average monthly number of
290.25households receiving food stamps for the three most recent years for which data is
290.26available. By July 1 of each year, the commissioner of human services must certify to the
290.27commissioner of revenue the average monthly number of households in the state and in
290.28each county that receive food stamps, for the three most recent calendar years available.
290.29    (h) "County net tax capacity" means the net tax capacity of the county, computed
290.30analogously to city net tax capacity under section 477A.011, subdivision 20 county's
290.31adjusted net tax capacity under section 273.1325.
290.32EFFECTIVE DATE.This section is effective the day following final enactment.

290.33    Sec. 108. Minnesota Statutes 2012, section 641.23, is amended to read:
290.34641.23 FUNDS; HOW PROVIDED.
291.1    Before any contract is made for the erection of a county jail, sheriff's residence, or
291.2both, the county board shall either levy a sufficient tax to provide the necessary funds, or
291.3issue county bonds therefor in accordance with the provisions of chapter 475, provided
291.4that no election is required if the amount of all bonds issued for this purpose and interest
291.5on them which are due and payable in any year does not exceed an amount equal to
291.60.09671 percent of estimated market value of taxable property within the county, as last
291.7determined before the bonds are issued.

291.8    Sec. 109. Minnesota Statutes 2012, section 641.24, is amended to read:
291.9641.24 LEASING.
291.10    The county may, by resolution of the county board, enter into a lease agreement with
291.11any statutory or home rule charter city situated within the county, or a county housing and
291.12redevelopment authority established pursuant to chapter 469 or any special law whereby
291.13the city or county housing and redevelopment authority will construct a jail or other law
291.14enforcement facilities for the county sheriff, deputy sheriffs, and other employees of the
291.15sheriff and other law enforcement agencies, in accordance with plans prepared by or at
291.16the request of the county board and, when required, approved by the commissioner of
291.17corrections and will finance it by the issuance of revenue bonds, and the county may lease
291.18the site and improvements for a term and upon rentals sufficient to produce revenue for the
291.19prompt payment of the bonds and all interest accruing thereon and, upon completion of
291.20payment, will acquire title thereto. The real and personal property acquired for the jail
291.21shall constitute a project and the lease agreement shall constitute a revenue agreement
291.22as contemplated in chapter 469, and all proceedings shall be taken by the city or county
291.23housing and redevelopment authority and the county in the manner and with the force and
291.24effect provided in chapter 469; provided that:
291.25    (1) no tax shall be imposed upon or in lieu of a tax upon the property;
291.26    (2) the approval of the project by the commissioner of commerce shall not be required;
291.27    (3) the Department of Corrections shall be furnished and shall record such
291.28information concerning each project as it may prescribe;
291.29    (4) the rentals required to be paid under the lease agreement shall not exceed in any
291.30year one-tenth of one percent of the estimated market value of property within the county,
291.31as last finally equalized before the execution of the agreement;
291.32    (5) the county board shall provide for the payment of all rentals due during the term
291.33of the lease, in the manner required in section 641.264, subdivision 2;
292.1    (6) no mortgage on the property shall be granted for the security of the bonds, but
292.2compliance with clause (5) hereof may be enforced as a nondiscretionary duty of the
292.3county board; and
292.4    (7) the county board may sublease any part of the jail property for purposes consistent
292.5with the maintenance and operation of a county jail or other law enforcement facility.

292.6    Sec. 110. Minnesota Statutes 2012, section 645.44, is amended by adding a subdivision
292.7to read:
292.8    Subd. 20. Estimated market value. When used in determining or calculating a
292.9limit on taxation, spending, state aid amounts, or debt, bond, certificate of indebtedness, or
292.10capital note issuance by or for a local government unit, "estimated market value" has the
292.11meaning given in section 273.032.

292.12    Sec. 111. REVISOR'S INSTRUCTION.
292.13    The revisor of statutes shall recodify Minnesota Statutes, section 127.48,
292.14subdivisions 1 to 6, as section 273.1325, subdivisions 1 to 6, and change all
292.15cross-references to the affected subdivisions accordingly.
292.16EFFECTIVE DATE.This section is effective the day following final enactment.

292.17    Sec. 112. REPEALER.
292.18Minnesota Statutes 2012, sections 276A.01, subdivision 11; 473F.02, subdivision
292.1913; and 477A.011, subdivision 21, are repealed.

292.20    Sec. 113. EFFECTIVE DATE.
292.21    Unless otherwise specifically provided, this article is effective the day following
292.22final enactment for purposes of limits on net debt, the issuance of bonds, certificates of
292.23indebtedness, and capital notes and is effective beginning for taxes payable in 2014 for
292.24all other purposes.


292.28    Section 1. Minnesota Statutes 2012, section 289A.10, is amended by adding a
292.29subdivision to read:
293.1    Subd. 1a. Recapture tax return required. If a disposition or cessation as provided
293.2by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as
293.3defined under section 291.03, subdivision 8, paragraph (c), or personal representative of
293.4the decedent's estate must submit a recapture tax return to the commissioner.
293.5EFFECTIVE DATE.This section is effective for estates of decedents dying after
293.6June 30, 2011.

293.7    Sec. 2. Minnesota Statutes 2012, section 289A.12, subdivision 14, is amended to read:
293.8    Subd. 14. Regulated investment companies; reporting exempt-interest
293.9dividends. (a) A regulated investment company paying $10 or more in exempt-interest
293.10dividends to an individual who is a resident of Minnesota must make a return indicating
293.11the amount of the exempt-interest dividends, the name, address, and Social Security
293.12number of the recipient, and any other information that the commissioner specifies. The
293.13return must be provided to the shareholder by February 15 of the year following the year
293.14of the payment. The return provided to the shareholder must include a clear statement,
293.15in the form prescribed by the commissioner, that the exempt-interest dividends must be
293.16included in the computation of Minnesota taxable income. By June 1 of each year, the
293.17regulated investment company must file a copy of the return with the commissioner.
293.18    (b) This subdivision applies to regulated investment companies required to register
293.19under chapter 80A.
293.20    (c) (b) For purposes of this subdivision, the following definitions apply.
293.21    (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
293.22section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
293.23exempt-interest dividends that are not required to be added to federal taxable income
293.24under section 290.01, subdivision 19a, clause (1)(ii).
293.25    (2) "Regulated investment company" means regulated investment company as
293.26defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
293.27investment company as defined in section 851(g) of the Internal Revenue Code.
293.28EFFECTIVE DATE.This section is effective the day following final enactment.

293.29    Sec. 3. Minnesota Statutes 2012, section 289A.12, is amended by adding a subdivision
293.30to read:
293.31    Subd. 18. Returns by qualified heirs. A qualified heir, as defined in section 291.03,
293.32subdivision 8, paragraph (c), must file two returns with the commissioner attesting that
293.33no disposition or cessation as provided by section 291.03, subdivision 11, paragraph
294.1(a), occurred. The first return must be filed no earlier than 24 months and no later than
294.226 months after the decedent's death. The second return must be filed no earlier than 36
294.3months and no later than 39 months after the decedent's death.
294.4EFFECTIVE DATE.This section is effective for returns required to be filed after
294.5December 31, 2013.

294.6    Sec. 4. Minnesota Statutes 2012, section 289A.18, is amended by adding a subdivision
294.7to read:
294.8    Subd. 3a. Recapture tax return. A recapture tax return must be filed with the
294.9commissioner within six months after the date of the disposition or cessation as provided
294.10by section 291.03, subdivision 11, paragraph (a).
294.11EFFECTIVE DATE.This section is effective for estates of decedents dying after
294.12June 30, 2011.

294.13    Sec. 5. Minnesota Statutes 2012, section 289A.20, subdivision 3, is amended to read:
294.14    Subd. 3. Estate tax. Taxes imposed by chapter 291 section 291.03, subdivision 1,
294.15 take effect at and upon the death of the person whose estate is subject to taxation and are
294.16due and payable on or before the expiration of nine months from that death.
294.17EFFECTIVE DATE.This section is effective for estates of decedents dying after
294.18June 30, 2011.

294.19    Sec. 6. Minnesota Statutes 2012, section 289A.20, is amended by adding a subdivision
294.20to read:
294.21    Subd. 3a. Recapture tax. The additional estate tax imposed by section 291.03,
294.22subdivision 11, paragraph (b), is due and payable on or before the expiration of the date
294.23provided by section 291.03, subdivision 11, paragraph (c).
294.24EFFECTIVE DATE.This section is effective for estates of decedents dying after
294.25June 30, 2011.

294.26    Sec. 7. Minnesota Statutes 2012, section 289A.26, subdivision 3, is amended to read:
294.27    Subd. 3. Short taxable year. (a) A corporation or an entity with a short taxable year
294.28of less than 12 months, but at least four months, must pay estimated tax in equal installments
294.29on or before the 15th day of the third, sixth, ninth, and final month of the short taxable
294.30year, to the extent applicable based on the number of months in the short taxable year.
295.1(b) A corporation or an entity is not required to make estimated tax payments for a
295.2short taxable year unless its tax liability before the first day of the last month of the taxable
295.3year can reasonably be expected to exceed $500.
295.4(c) No payment is required for a short taxable year of less than four months.
295.5EFFECTIVE DATE.This section is effective the day following final enactment.

295.6    Sec. 8. Minnesota Statutes 2012, section 289A.26, subdivision 4, is amended to read:
295.7    Subd. 4. Underpayment of estimated tax. If there is an underpayment of estimated
295.8tax by a corporation or an entity, there shall be added to the tax for the taxable year an
295.9amount determined at the rate in section 270C.40 on the amount of the underpayment,
295.10determined under subdivision 5, for the period of the underpayment determined under
295.11subdivision 6. This subdivision does not apply in the first taxable year that a corporation is
295.12subject to the tax imposed under section 290.02 or an entity is subject to the tax imposed
295.13under section 290.05, subdivision 3.
295.14EFFECTIVE DATE.This section is effective the day following final enactment.

295.15    Sec. 9. Minnesota Statutes 2012, section 289A.26, subdivision 7, is amended to read:
295.16    Subd. 7. Required installments. (a) Except as otherwise provided in this
295.17subdivision, the amount of a required installment is 25 percent of the required annual
295.18payment.
295.19(b) Except as otherwise provided in this subdivision, the term "required annual
295.20payment" means the lesser of:
295.21(1) 100 percent of the tax shown on the return for the taxable year, or, if no return is
295.22filed, 100 percent of the tax for that year; or
295.23(2) 100 percent of the tax shown on the return of the corporation or entity for the
295.24preceding taxable year provided the return was for a full 12-month period, showed a
295.25liability, and was filed by the corporation or entity.
295.26(c) Except for determining the first required installment for any taxable year,
295.27paragraph (b), clause (2), does not apply in the case of a large corporation. The term
295.28"large corporation" means a corporation or any predecessor corporation that had taxable
295.29net income of $1,000,000 or more for any taxable year during the testing period. The
295.30term "testing period" means the three taxable years immediately preceding the taxable
295.31year involved. A reduction allowed to a large corporation for the first installment that is
295.32allowed by applying paragraph (b), clause (2), must be recaptured by increasing the next
295.33required installment by the amount of the reduction.
296.1(d) In the case of a required installment, if the corporation or entity establishes that
296.2the annualized income installment is less than the amount determined in paragraph (a), the
296.3amount of the required installment is the annualized income installment and the recapture
296.4of previous quarters' reductions allowed by this paragraph must be recovered by increasing
296.5later required installments to the extent the reductions have not previously been recovered.
296.6(e) The "annualized income installment" is the excess, if any, of:
296.7(1) an amount equal to the applicable percentage of the tax for the taxable year
296.8computed by placing on an annualized basis the taxable income:
296.9(i) for the first two months of the taxable year, in the case of the first required
296.10installment;
296.11(ii) for the first two months or for the first five months of the taxable year, in the
296.12case of the second required installment;
296.13(iii) for the first six months or for the first eight months of the taxable year, in the
296.14case of the third required installment; and
296.15(iv) for the first nine months or for the first 11 months of the taxable year, in the
296.16case of the fourth required installment, over
296.17(2) the aggregate amount of any prior required installments for the taxable year.
296.18(3) For the purpose of this paragraph, the annualized income shall be computed
296.19by placing on an annualized basis the taxable income for the year up to the end of the
296.20month preceding the due date for the quarterly payment multiplied by 12 and dividing
296.21the resulting amount by the number of months in the taxable year (2, 5, 6, 8, 9, or 11 as
296.22the case may be) referred to in clause (1).
296.23(4) The "applicable percentage" used in clause (1) is:

296.24 296.25 296.26		For the following required installments:			The applicable percentage is:
296.27			1st		25
296.28			2nd		50
296.29			3rd		75
296.30			4th		100

296.31(f)(1) If this paragraph applies, the amount determined for any installment must
296.32be determined in the following manner:
296.33(i) take the taxable income for the months during the taxable year preceding the
296.34filing month;
296.35(ii) divide that amount by the base period percentage for the months during the
296.36taxable year preceding the filing month;
296.37(iii) determine the tax on the amount determined under item (ii); and
297.1(iv) multiply the tax computed under item (iii) by the base period percentage for the
297.2filing month and the months during the taxable year preceding the filing month.
297.3(2) For purposes of this paragraph:
297.4(i) the "base period percentage" for a period of months is the average percent that the
297.5taxable income for the corresponding months in each of the three preceding taxable years
297.6bears to the taxable income for the three preceding taxable years;
297.7(ii) the term "filing month" means the month in which the installment is required
297.8to be paid;
297.9(iii) this paragraph only applies if the base period percentage for any six consecutive
297.10months of the taxable year equals or exceeds 70 percent; and
297.11(iv) the commissioner may provide by rule for the determination of the base period
297.12percentage in the case of reorganizations, new corporations or entities, and other similar
297.13circumstances.
297.14(3) In the case of a required installment determined under this paragraph, if the
297.15 corporation or entity determines that the installment is less than the amount determined in
297.16paragraph (a), the amount of the required installment is the amount determined under this
297.17paragraph and the recapture of previous quarters' reductions allowed by this paragraph
297.18must be recovered by increasing later required installments to the extent the reductions
297.19have not previously been recovered.
297.20EFFECTIVE DATE.This section is effective the day following final enactment.

297.21    Sec. 10. Minnesota Statutes 2012, section 289A.26, subdivision 9, is amended to read:
297.22    Subd. 9. Failure to file an estimate. In the case of a corporation or an entity
297.23that fails to file an estimated tax for a taxable year when one is required, the period of
297.24the underpayment runs from the four installment dates in subdivision 2 or 3, whichever
297.25applies, to the earlier of the periods in subdivision 6, clauses (1) and (2).
297.26EFFECTIVE DATE.This section is effective the day following final enactment.

297.27    Sec. 11. Minnesota Statutes 2012, section 290.9705, subdivision 1, is amended to read:
297.28    Subdivision 1. Withholding of payments to out-of-state contractors. (a) In this
297.29section, "person" means a person, corporation, or cooperative, the state of Minnesota and
297.30its political subdivisions, and a city, county, and school district in Minnesota.
297.31(b) A person who in the regular course of business is hiring, contracting, or having a
297.32contract with a nonresident person or foreign corporation, as defined in Minnesota Statutes
297.331986, section 290.01, subdivision 5, to perform construction work in Minnesota, shall
298.1deduct and withhold eight percent of cumulative calendar year payments made to the
298.2contractor which exceed if the value of the contract exceeds $50,000.
298.3EFFECTIVE DATE.This section is effective for payments made to contractors
298.4after December 31, 2013.


298.7    Section 1. Minnesota Statutes 2012, section 287.20, is amended by adding a
298.8subdivision to read:
298.9    Subd. 11. Partition. "Partition" means the division by conveyance of real property
298.10that is held jointly or in common by two or more persons into individually owned interests.
298.11If one of the co-owners gives consideration for all or a part of the individually owned
298.12interest conveyed to them, that portion of the conveyance is not a part of the partition.
298.13EFFECTIVE DATE.This section is effective the day following final enactment.

298.14    Sec. 2. Minnesota Statutes 2012, section 289A.20, subdivision 4, is amended to read:
298.15    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and
298.16payable to the commissioner monthly on or before the 20th day of the month following
298.17the month in which the taxable event occurred, or following another reporting period
298.18as the commissioner prescribes or as allowed under section 289A.18, subdivision 4,
298.19paragraph (f) or (g), except that:
298.20(1) use taxes due on an annual use tax return as provided under section 289A.11,
298.21subdivision 1 , are payable by April 15 following the close of the calendar year; and.
298.22(2) except as provided in paragraph (f), for a vendor having a liability of $120,000
298.23or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the taxes
298.24imposed by chapter 297A, except as provided in paragraph (b), are due and payable to the
298.25commissioner monthly in the following manner:
298.26(i) On or before the 14th day of the month following the month in which the taxable
298.27event occurred, the vendor must remit to the commissioner 90 percent of the estimated
298.28liability for the month in which the taxable event occurred.
298.29(ii) On or before the 20th day of the month in which the taxable event occurs, the
298.30vendor must remit to the commissioner a prepayment for the month in which the taxable
298.31event occurs equal to 67 percent of the liability for the previous month.
298.32(iii) On or before the 20th day of the month following the month in which the taxable
298.33event occurred, the vendor must pay any additional amount of tax not previously remitted
299.1under either item (i) or (ii ) or, if the payment made under item (i) or (ii) was greater than
299.2the vendor's liability for the month in which the taxable event occurred, the vendor may
299.3take a credit against the next month's liability in a manner prescribed by the commissioner.
299.4(iv) Once the vendor first pays under either item (i) or (ii), the vendor is required to
299.5continue to make payments in the same manner, as long as the vendor continues having a
299.6liability of $120,000 or more during the most recent fiscal year ending June 30.
299.7(v) Notwithstanding items (i), (ii), and (iv), if a vendor fails to make the required
299.8payment in the first month that the vendor is required to make a payment under either item
299.9(i) or (ii), then the vendor is deemed to have elected to pay under item (ii) and must make
299.10subsequent monthly payments in the manner provided in item (ii).
299.11(vi) For vendors making an accelerated payment under item (ii), for the first month
299.12that the vendor is required to make the accelerated payment, on the 20th of that month, the
299.13vendor will pay 100 percent of the liability for the previous month and a prepayment for
299.14the first month equal to 67 percent of the liability for the previous month.
299.15    (b) Notwithstanding paragraph (a), A vendor having a liability of $120,000 or more
299.16during a fiscal year ending June 30 must remit the June liability for the next year in the
299.17following manner:
299.18    (1) Two business days before June 30 of the year, the vendor must remit 90 percent
299.19of the estimated June liability to the commissioner.
299.20    (2) On or before August 20 of the year, the vendor must pay any additional amount
299.21of tax not remitted in June.
299.22    (c) A vendor having a liability of:
299.23    (1) $10,000 or more, but less than $120,000 during a fiscal year ending June 30,
299.242009, and fiscal years thereafter, must remit by electronic means all liabilities on returns
299.25due for periods beginning in the subsequent calendar year on or before the 20th day of
299.26the month following the month in which the taxable event occurred, or on or before the
299.2720th day of the month following the month in which the sale is reported under section
299.28289A.18, subdivision 4 ; or
299.29(2) $120,000 or more, during a fiscal year ending June 30, 2009, and fiscal years
299.30thereafter, must remit by electronic means all liabilities in the manner provided in
299.31paragraph (a), clause (2), on returns due for periods beginning in the subsequent calendar
299.32year, except for 90 percent of the estimated June liability, which is due two business days
299.33before June 30. The remaining amount of the June liability is due on August 20.
299.34(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
299.35religious beliefs from paying electronically shall be allowed to remit the payment by mail.
299.36The filer must notify the commissioner of revenue of the intent to pay by mail before
300.1doing so on a form prescribed by the commissioner. No extra fee may be charged to a
300.2person making payment by mail under this paragraph. The payment must be postmarked
300.3at least two business days before the due date for making the payment in order to be
300.4considered paid on a timely basis.
300.5(e) Whenever the liability is $120,000 or more separately for: (1) the tax imposed
300.6under chapter 297A; (2) a fee that is to be reported on the same return as and paid with the
300.7chapter 297A taxes; or (3) any other tax that is to be reported on the same return as and
300.8paid with the chapter 297A taxes, then the payment of all the liabilities on the return must
300.9be accelerated as provided in this subdivision.
300.10(f) At the start of the first calendar quarter at least 90 days after the cash flow account
300.11established in section 16A.152, subdivision 1, and the budget reserve account established in
300.12section 16A.152, subdivision 1a, reach the amounts listed in section 16A.152, subdivision
300.132 , paragraph (a), the remittance of the accelerated payments required under paragraph (a),
300.14clause (2), must be suspended. The commissioner of management and budget shall notify
300.15the commissioner of revenue when the accounts have reached the required amounts.
300.16Beginning with the suspension of paragraph (a), clause (2), for a vendor with a liability of
300.17$120,000 or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the
300.18taxes imposed by chapter 297A are due and payable to the commissioner on the 20th day
300.19of the month following the month in which the taxable event occurred. Payments of tax
300.20liabilities for taxable events occurring in June under paragraph (b) are not changed.
300.21EFFECTIVE DATE.This section is effective the day following final enactment.

300.22    Sec. 3. Minnesota Statutes 2012, section 297A.665, is amended to read:
300.23297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
300.24    (a) For the purpose of the proper administration of this chapter and to prevent
300.25evasion of the tax, until the contrary is established, it is presumed that:
300.26    (1) all gross receipts are subject to the tax; and
300.27    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
300.28in Minnesota.
300.29    (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
300.30However, a seller is relieved of liability if:
300.31    (1) the seller obtains a fully completed exemption certificate or all the relevant
300.32information required by section 297A.72, subdivision 2, at the time of the sale or within
300.3390 days after the date of the sale; or
301.1    (2) if the seller has not obtained a fully completed exemption certificate or all the
301.2relevant information required by section 297A.72, subdivision 2, within the time provided
301.3in clause (1), within 120 days after a request for substantiation by the commissioner,
301.4the seller either:
301.5    (i) obtains in good faith from the purchaser a fully completed exemption certificate
301.6or all the relevant information required by section 297A.72, subdivision 2, from the
301.7purchaser taken in good faith which means that the exemption certificate claims an
301.8exemption that (A) was statutorily available on the date of the transaction, (B) could be
301.9applicable to the item for which the exemption is claimed, and (C) is reasonable for the
301.10purchaser's type of business; or
301.11    (ii) proves by other means that the transaction was not subject to tax.
301.12    (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
301.13    (1) fraudulently fails to collect the tax; or
301.14    (2) solicits purchasers to participate in the unlawful claim of an exemption.
301.15(d) Notwithstanding paragraph (b), relief from liability does not apply to a seller
301.16who has obtained information under paragraph (b), clause (2), if through the audit process
301.17the commissioner finds the following:
301.18(1) that at the time the information was provided the seller had knowledge or had
301.19reason to know that the information relating to the exemption was materially false; or
301.20(2) that the seller knowingly participated in activity intended to purposefully evade
301.21the sales tax due on the transaction.
301.22    (d) (e) A certified service provider, as defined in section 297A.995, subdivision 2, is
301.23relieved of liability under this section to the extent a seller who is its client is relieved of
301.24liability.
301.25    (e) (f) A purchaser of tangible personal property or any items listed in section 297A.63
301.26that are shipped or brought to Minnesota by the purchaser has the burden of proving that the
301.27property was not purchased from a retailer for storage, use, or consumption in Minnesota.
301.28(f) (g) If a seller claims that certain sales are exempt and does not provide the
301.29certificate, information, or proof required by paragraph (b), clause (2), within 120 days
301.30after the date of the commissioner's request for substantiation, then the exemptions
301.31claimed by the seller that required substantiation are disallowed.
301.32EFFECTIVE DATE.This section is effective retroactively from January 1, 2013.

301.33    Sec. 4. Minnesota Statutes 2012, section 297F.01, subdivision 23, is amended to read:
301.34    Subd. 23. Wholesale sales price. "Wholesale sales price" means the price stated
301.35on the price list in effect at the time of sale for which a manufacturer or person sells a
302.1tobacco product to a distributor, exclusive of any discount, promotional offer, or other
302.2reduction. For purposes of this subdivision, "price list" means the manufacturer's price at
302.3which tobacco products are made available for sale to all distributors on an ongoing basis
302.4 at which a distributor purchases a tobacco product. Wholesale sales price includes the
302.5applicable federal excise tax, freight charges, or packaging costs, regardless of whether
302.6they were included in the purchase price.
302.7EFFECTIVE DATE.This section is effective for purchases made after December
302.831, 2013.

302.9    Sec. 5. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read:
302.10    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages
302.11is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year
302.12beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
302.13take the credit on the 18th day of each month, but the total credit allowed may not exceed
302.14in any fiscal year the lesser of:
302.15(1) the liability for tax; or
302.16(2) $115,000.
302.17For purposes of this subdivision, a "qualified brewer" means a brewer, whether
302.18or not located in this state, manufacturing less than 100,000 barrels of fermented malt
302.19beverages in the calendar year immediately preceding the calendar fiscal year for which
302.20the credit under this subdivision is claimed. In determining the number of barrels, all
302.21brands or labels of a brewer must be combined. All facilities for the manufacture of
302.22fermented malt beverages owned or controlled by the same person, corporation, or other
302.23entity must be treated as a single brewer.
302.24EFFECTIVE DATE.This section is effective the day following final enactment.

302.25    Sec. 6. Minnesota Statutes 2012, section 297I.05, subdivision 7, is amended to read:
302.26    Subd. 7. Nonadmitted insurance premium tax. (a) A tax is imposed on surplus
302.27lines brokers. The rate of tax is equal to three percent of the gross premiums less return
302.28premiums paid by an insured whose home state is Minnesota.
302.29(b) A tax is imposed on persons, firms, or corporations a person, firm, corporation,
302.30or purchasing group as defined in section 60E.02, or any member of a purchasing group,
302.31 that procure procures insurance directly from a nonadmitted insurer. The rate of tax is
302.32equal to two percent of the gross premiums less return premiums paid by an insured
302.33whose home state is Minnesota.
303.1(c) No state other than the home state of an insured may require any premium tax
303.2payment for nonadmitted insurance. When Minnesota is the home state of the insured,
303.3as provided under section 297I.01, 100 percent of the gross premiums are taxable in
303.4Minnesota with no allocation of the tax to other states.
303.5EFFECTIVE DATE.This section is effective for premiums received after
303.6December 31, 2013.

303.7    Sec. 7. Minnesota Statutes 2012, section 297I.05, subdivision 11, is amended to read:
303.8    Subd. 11. Retaliatory provisions. (a) If any other state or country imposes any
303.9taxes, fines, deposits, penalties, licenses, or fees upon any insurance companies of this
303.10state and their agents doing business in another state or country that are in addition to or in
303.11excess of those imposed by the laws of this state upon foreign insurance companies and
303.12their agents doing business in this state, the same taxes, fines, deposits, penalties, licenses,
303.13and fees are imposed upon every similar insurance company of that state or country and
303.14their agents doing or applying to do business in this state.
303.15(b) If any conditions precedent to the right to do business in any other state or
303.16country are imposed by the laws of that state or country, beyond those imposed upon
303.17foreign companies by the laws of this state, the same conditions precedent are imposed
303.18upon every similar insurance company of that state or country and their agents doing or
303.19applying to do business in that state.
303.20(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or
303.21fees" means an amount of money that is deposited in the general revenue fund of the state
303.22or other similar fund in another state or country and is not dedicated to a special purpose
303.23or use or money deposited in the general revenue fund of the state or other similar fund in
303.24another state or country and appropriated to the commissioner of commerce or insurance
303.25for the operation of the Department of Commerce or other similar agency with jurisdiction
303.26over insurance. Taxes, fines, deposits, penalties, licenses, or fees do not include:
303.27(1) special purpose obligations or assessments imposed in connection with particular
303.28kinds of insurance, including but not limited to assessments imposed in connection with
303.29residual market mechanisms; or
303.30(2) assessments made by the insurance guaranty association, life and health
303.31guarantee association, or similar association.
303.32(d) This subdivision applies to taxes imposed under subdivisions 1,; 3,; 4, 6, and; 12,
303.33paragraph (a), clauses (1) and (2); and 14.
303.34(e) This subdivision does not apply to insurance companies organized or domiciled
303.35in a state or country, the laws of which do not impose retaliatory taxes, fines, deposits,
304.1penalties, licenses, or fees or which grant, on a reciprocal basis, exemptions from
304.2retaliatory taxes, fines, deposits, penalties, licenses, or fees to insurance companies
304.3domiciled in this state.
304.4EFFECTIVE DATE.This section is effective the day following final enactment.

304.5    Sec. 8. Minnesota Statutes 2012, section 297I.05, subdivision 12, is amended to read:
304.6    Subd. 12. Other entities. (a) A tax is imposed equal to two percent of:
304.7    (1) gross premiums less return premiums written for risks resident or located in
304.8Minnesota by a risk retention group;
304.9    (2) gross premiums less return premiums received by an attorney in fact acting
304.10in accordance with chapter 71A;
304.11    (3) gross premiums less return premiums received pursuant to assigned risk policies
304.12and contracts of coverage under chapter 79; and
304.13    (4) the direct funded premium received by the reinsurance association under section
304.1479.34 from self-insurers approved under section 176.181 and political subdivisions that
304.15self-insure; and.
304.16    (5) gross premiums less return premiums paid to an insurer other than a licensed
304.17insurance company or a surplus lines broker for coverage of risks resident or located in
304.18Minnesota by a purchasing group or any members of the purchasing group to a broker or
304.19agent for the purchasing group.
304.20    (b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The
304.21rate of tax is equal to two percent of the total amount of claims paid during the fund year,
304.22with no deduction for claims wholly or partially reimbursed through stop-loss insurance.
304.23    (c) A tax is imposed on a joint self-insurance plan operating under chapter 62H.
304.24The rate of tax is equal to two percent of the total amount of claims paid during the
304.25fund's fiscal year, with no deduction for claims wholly or partially reimbursed through
304.26stop-loss insurance.
304.27    (d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5,
304.28on the gross premiums less return premiums on all coverages received by an accountable
304.29provider network or agents of an accountable provider network in Minnesota, in cash or
304.30otherwise, during the year.
304.31EFFECTIVE DATE.This section is effective for premiums received after
304.32December 31, 2013.

304.33    Sec. 9. Minnesota Statutes 2012, section 297I.30, subdivision 1, is amended to read:
305.1    Subdivision 1. General rule. On or before March 1, every taxpayer subject to
305.2taxation under section 297I.05, subdivisions 1 to 5,; 7, paragraph (b),; 12, paragraphs (a),
305.3clauses (1) to (4), (b), (c), and (d),; and 14, shall file an annual return for the preceding
305.4calendar year in the form prescribed by the commissioner.
305.5EFFECTIVE DATE.This section is effective for premiums received after
305.6December 31, 2013.

305.7    Sec. 10. Minnesota Statutes 2012, section 297I.30, subdivision 2, is amended to read:
305.8    Subd. 2. Surplus lines brokers and purchasing groups. On or before February
305.915 and August 15 of each year, every surplus lines broker subject to taxation under
305.10section 297I.05, subdivision 7, paragraph (a), and every purchasing group or member of
305.11a purchasing group subject to tax under section 297I.05, subdivision 12, paragraph (a),
305.12clause (5), shall file a return with the commissioner for the preceding six-month period
305.13ending December 31, or June 30, in the form prescribed by the commissioner.
305.14EFFECTIVE DATE.This section is effective for premiums received after
305.15December 31, 2013.

305.16    Sec. 11. REPEALER.
305.17Minnesota Statutes 2012, section 289A.60, subdivision 31, is repealed.
305.18EFFECTIVE DATE.This section is effective the day following final enactment.


305.21    Section 1. Minnesota Statutes 2012, section 123A.455, subdivision 1, is amended to
305.22read:
305.23    Subdivision 1. Definitions. "Split residential property parcel" means a parcel of
305.24real estate that is located within the boundaries of more than one school district and that
305.25is classified as residential property under:
305.26    (1) section 273.13, subdivision 22, paragraph (a) or (b);
305.27    (2) section 273.13, subdivision 25, paragraph (b), clause (1); or
305.28    (3) section 273.13, subdivision 25, paragraph (c), clause (1).
305.29EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
305.30thereafter.

306.1    Sec. 2. Minnesota Statutes 2012, section 270.077, is amended to read:
306.2270.077 TAXES CREDITED TO STATE AIRPORTS FUND.
306.3    All taxes levied under sections 270.071 to 270.079 must be collected by the
306.4commissioner and credited to the state airports fund created in section 360.017.
306.5EFFECTIVE DATE.This section is effective the day following final enactment.

306.6    Sec. 3. Minnesota Statutes 2012, section 270.41, subdivision 5, is amended to read:
306.7    Subd. 5. Prohibited activity. A licensed assessor or other person employed by an
306.8assessment jurisdiction or contracting with an assessment jurisdiction for the purpose
306.9of valuing or classifying property for property tax purposes is prohibited from making
306.10appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report
306.11as defined in section 82B.021, subdivisions 2, 4, 6, and 7, on any property within the
306.12assessment jurisdiction where the individual is employed or performing the duties of the
306.13assessor under contract. Violation of this prohibition shall result in immediate revocation
306.14of the individual's license to assess property for property tax purposes. This prohibition
306.15must not be construed to prohibit an individual from carrying out any duties required
306.16for the proper assessment of property for property tax purposes or performing duties
306.17enumerated in section 273.061, subdivision 7 or 8. If a formal resolution has been adopted
306.18by the governing body of a governmental unit, which specifies the purposes for which
306.19such work will be done, this prohibition does not apply to appraisal activities undertaken
306.20on behalf of and at the request of the governmental unit that has employed or contracted
306.21with the individual. The resolution may only allow appraisal activities which are related to
306.22condemnations, right-of-way acquisitions, land exchanges, or special assessments.
306.23EFFECTIVE DATE.This section is effective the day following final enactment.

306.24    Sec. 4. Minnesota Statutes 2012, section 270C.34, subdivision 1, is amended to read:
306.25    Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any
306.26penalty or interest that is imposed by a law administered by the commissioner, or imposed
306.27by section 270.0725, subdivision 1 or 2, or 270.075, subdivision 2, as a result of the late
306.28payment of tax or late filing of a return, or any part of an additional tax charge under
306.29section 289A.25, subdivision 2, or 289A.26, subdivision 4, if the failure to timely pay the
306.30tax or failure to timely file the return is due to reasonable cause, or if the taxpayer is located
306.31in a presidentially declared disaster or in a presidentially declared state of emergency area
306.32or in an area declared to be in a state of emergency by the governor under section 12.31.
307.1    (b) The commissioner shall abate any part of a penalty or additional tax charge
307.2under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous
307.3advice given to the taxpayer in writing by an employee of the department acting in
307.4an official capacity, if the advice:
307.5    (1) was reasonably relied on and was in response to a specific written request of the
307.6taxpayer; and
307.7    (2) was not the result of failure by the taxpayer to provide adequate or accurate
307.8information.
307.9EFFECTIVE DATE.This section is effective the day following final enactment.

307.10    Sec. 5. Minnesota Statutes 2012, section 272.01, subdivision 2, is amended to read:
307.11    Subd. 2. Exempt property used by private entity for profit. (a) When any real or
307.12personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is
307.13leased, loaned, or otherwise made available and used by a private individual, association,
307.14or corporation in connection with a business conducted for profit, there shall be imposed a
307.15tax, for the privilege of so using or possessing such real or personal property, in the same
307.16amount and to the same extent as though the lessee or user was the owner of such property.
307.17    (b) The tax imposed by this subdivision shall not apply to:
307.18    (1) property leased or used as a concession in or relative to the use in whole
307.19or part of a public park, market, fairgrounds, port authority, economic development
307.20authority established under chapter 469, municipal auditorium, municipal parking facility,
307.21municipal museum, or municipal stadium;
307.22    (2) property of an airport owned by a city, town, county, or group thereof which is:
307.23    (i) leased to or used by any person or entity including a fixed base operator; and
307.24    (ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods,
307.25services, or facilities to the airport or general public;
307.26the exception from taxation provided in this clause does not apply to:
307.27    (i) property located at an airport owned or operated by the Metropolitan Airports
307.28Commission or by a city of over 50,000 population according to the most recent federal
307.29census or such a city's airport authority; or
307.30    (ii) hangars leased by a private individual, association, or corporation in connection
307.31with a business conducted for profit other than an aviation-related business;
307.32    (3) property constituting or used as a public pedestrian ramp or concourse in
307.33connection with a public airport;
308.1    (4) property constituting or used as a passenger check-in area or ticket sale counter,
308.2boarding area, or luggage claim area in connection with a public airport but not the
308.3airports owned or operated by the Metropolitan Airports Commission or cities of over
308.450,000 population or an airport authority therein. Real estate owned by a municipality
308.5in connection with the operation of a public airport and leased or used for agricultural
308.6purposes is not exempt;
308.7    (5) property leased, loaned, or otherwise made available to a private individual,
308.8corporation, or association under a cooperative farming agreement made pursuant to
308.9section 97A.135; or
308.10    (6) property leased, loaned, or otherwise made available to a private individual,
308.11corporation, or association under section 272.68, subdivision 4.
308.12    (c) Taxes imposed by this subdivision are payable as in the case of personal property
308.13taxes and shall be assessed to the lessees or users of real or personal property in the same
308.14manner as taxes assessed to owners of real or personal property, except that such taxes
308.15shall not become a lien against the property. When due, the taxes shall constitute a debt due
308.16from the lessee or user to the state, township, city, county, and school district for which the
308.17taxes were assessed and shall be collected in the same manner as personal property taxes.
308.18If property subject to the tax imposed by this subdivision is leased or used jointly by two or
308.19more persons, each lessee or user shall be jointly and severally liable for payment of the tax.
308.20    (d) The tax on real property of the federal government, the state or any of its political
308.21subdivisions that is leased by, loaned, or otherwise made available to a private individual,
308.22association, or corporation and becomes taxable under this subdivision or other provision
308.23of law must be assessed and collected as a personal property assessment. The taxes do
308.24not become a lien against the real property.
308.25EFFECTIVE DATE.This section is effective the day following final enactment.

308.26    Sec. 6. Minnesota Statutes 2012, section 272.02, subdivision 97, is amended to read:
308.27    Subd. 97. Property used in business of mining subject to net proceeds tax. The
308.28following property used in the business of mining that is subject to the net proceeds tax
308.29under section 298.015 is exempt:
308.30    (1) deposits of ores, metals, and minerals and the lands in which they are contained;
308.31    (2) all real and personal property used in mining, quarrying, producing, or refining
308.32ores, minerals, or metals, including lands occupied by or used in connection with the
308.33mining, quarrying, production, or ore refining facilities; and
308.34    (3) concentrate or direct reduced ore.
309.1    This exemption applies for each year that a person subject to tax under section
309.2298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or
309.3minerals.
309.4EFFECTIVE DATE.This section is effective the day following final enactment.

309.5    Sec. 7. Minnesota Statutes 2012, section 272.03, subdivision 9, is amended to read:
309.6    Subd. 9. Person. "Person" includes means an individual, association, estate, trust,
309.7partnership, firm, company, or corporation.
309.8EFFECTIVE DATE.This section is effective the day following final enactment.

309.9    Sec. 8. Minnesota Statutes 2012, section 273.114, subdivision 6, is amended to read:
309.10    Subd. 6. Additional taxes. (a) When real property which is being, or has been
309.11valued and assessed under this section is sold, transferred, or no longer qualifies under
309.12subdivision 2, the portion sold, transferred, or no longer qualifying shall be subject to
309.13additional taxes in the amount equal to the difference between the taxes determined in
309.14accordance with subdivision 3 and the amount determined under subdivision 4, provided
309.15that the amount determined under subdivision 4 shall not be greater than it would have
309.16been had the actual bona fide sale price of the real property at an arm's-length transaction
309.17been used in lieu of the market value determined under subdivision 4. The additional taxes
309.18shall be extended against the property on the tax list for taxes payable in the current year,
309.19provided that no interest or penalties shall be levied on the additional taxes if timely paid
309.20and provided that the additional taxes shall only be levied with respect to the current year
309.21plus two prior years that the property has been valued and assessed under this section.
309.22    (b) In the case of a sale or transfer, the additional taxes under paragraph (a) shall not
309.23be extended against the property if the new owner submits a successful application under
309.24this section by the later of May 1 of the current year or 30 days after the sale or transfer.
309.25    (c) For the purposes of this section, the following events do not constitute a sale or
309.26transfer for property that qualified under subdivision 2 prior to the event:
309.27    (1) death of a property owner when the surviving owners retain ownership of the
309.28property;
309.29    (2) divorce of a married couple when one of the spouses retains ownership of the
309.30property;
309.31    (3) marriage of a single property owner when that owner retains ownership of the
309.32property in whole or in part;
310.1    (4) the organization or reorganization of a farm ownership entity that is not prohibited
310.2from owning agricultural land in this state under section 500.24, if all owners maintain the
310.3same beneficial interest both before and after the organization or reorganization; and
310.4    (5) transfer of the property to a trust or trustee, provided that the individual owners
310.5of the property are the grantors of the trust and they maintain the same beneficial interest
310.6both before and after placement of the property in trust.
310.7EFFECTIVE DATE.This section is effective the day following final enactment.

310.8    Sec. 9. Minnesota Statutes 2012, section 273.13, subdivision 23, is amended to read:
310.9    Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural
310.10land that is homesteaded, along with any class 2b rural vacant land that is contiguous to
310.11the class 2a land under the same ownership. The market value of the house and garage
310.12and immediately surrounding one acre of land has the same class rates as class 1a or 1b
310.13property under subdivision 22. The value of the remaining land including improvements
310.14up to the first tier valuation limit of agricultural homestead property has a net class rate
310.15of 0.5 percent of market value. The remaining property over the first tier has a class rate
310.16of one percent of market value. For purposes of this subdivision, the "first tier valuation
310.17limit of agricultural homestead property" and "first tier" means the limit certified under
310.18section 273.11, subdivision 23.
310.19    (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
310.20are agricultural land and buildings. Class 2a property has a net class rate of one percent of
310.21market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a
310.22property must also include any property that would otherwise be classified as 2b, but is
310.23interspersed with class 2a property, including but not limited to sloughs, wooded wind
310.24shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
310.25and other similar land that is impractical for the assessor to value separately from the rest of
310.26the property or that is unlikely to be able to be sold separately from the rest of the property.
310.27    An assessor may classify the part of a parcel described in this subdivision that is used
310.28for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
310.29    (c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
310.30that are unplatted real estate, rural in character and not used for agricultural purposes,
310.31including land used for growing trees for timber, lumber, and wood and wood products,
310.32that is not improved with a structure. The presence of a minor, ancillary nonresidential
310.33structure as defined by the commissioner of revenue does not disqualify the property from
310.34classification under this paragraph. Any parcel of 20 acres or more improved with a
310.35structure that is not a minor, ancillary nonresidential structure must be split-classified, and
311.1ten acres must be assigned to the split parcel containing the structure. Class 2b property
311.2has a net class rate of one percent of market value unless it is part of an agricultural
311.3homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
311.4    (d) Class 2c managed forest land consists of no less than 20 and no more than 1,920
311.5acres statewide per taxpayer that is being managed under a forest management plan that
311.6meets the requirements of chapter 290C, but is not enrolled in the sustainable forest
311.7resource management incentive program. It has a class rate of .65 percent, provided that
311.8the owner of the property must apply to the assessor in order for the property to initially
311.9qualify for the reduced rate and provide the information required by the assessor to verify
311.10that the property qualifies for the reduced rate. If the assessor receives the application
311.11and information before May 1 in an assessment year, the property qualifies beginning
311.12with that assessment year. If the assessor receives the application and information after
311.13April 30 in an assessment year, the property may not qualify until the next assessment
311.14year. The commissioner of natural resources must concur that the land is qualified. The
311.15commissioner of natural resources shall annually provide county assessors verification
311.16information on a timely basis. The presence of a minor, ancillary nonresidential structure
311.17as defined by the commissioner of revenue does not disqualify the property from
311.18classification under this paragraph.
311.19    (e) Agricultural land as used in this section means:
311.20    (1) contiguous acreage of ten acres or more, used during the preceding year for
311.21agricultural purposes.; or
311.22    (2) contiguous acreage used during the preceding year for an intensive livestock or
311.23poultry confinement operation, provided that land used only for pasturing or grazing
311.24does not qualify under this clause.
311.25    "Agricultural purposes" as used in this section means the raising, cultivation, drying,
311.26or storage of agricultural products for sale, or the storage of machinery or equipment
311.27used in support of agricultural production by the same farm entity. For a property to be
311.28classified as agricultural based only on the drying or storage of agricultural products,
311.29the products being dried or stored must have been produced by the same farm entity as
311.30the entity operating the drying or storage facility. "Agricultural purposes" also includes
311.31enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or
311.32the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar
311.33state or federal conservation program if the property was classified as agricultural (i)
311.34under this subdivision for the assessment year 2002 taxes payable in 2003 because of its
311.35enrollment in a qualifying program and the land remains enrolled or (ii) in the year prior
312.1to its enrollment. Agricultural classification shall not be based upon the market value of
312.2any residential structures on the parcel or contiguous parcels under the same ownership.
312.3    "Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
312.4portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
312.5of, a set of contiguous tax parcels under that section that are owned by the same person.
312.6    (f) Real estate of Agricultural land under this section also includes:
312.7    (1) contiguous acreage that is less than ten acres, which is in size and exclusively or
312.8intensively used in the preceding year for raising or cultivating agricultural products, shall
312.9be considered as agricultural land. To qualify under this paragraph, property that includes
312.10a residential structure must be used intensively for one of the following purposes:; or
312.11    (2) contiguous acreage that contains a residence and is less than 11 acres in size, if
312.12the contiguous acreage exclusive of the house, garage, and surrounding one acre of land
312.13was used in the preceding year for one or more of the following three uses:
312.14    (i) for an intensive grain drying or storage of grain operation, or for intensive
312.15machinery or equipment storage of machinery or equipment activities used to support
312.16agricultural activities on other parcels of property operated by the same farming entity;
312.17    (ii) as a nursery, provided that only those acres used intensively to produce nursery
312.18stock are considered agricultural land; or
312.19    (iii) for livestock or poultry confinement, provided that land that is used only for
312.20pasturing and grazing does not qualify; or
312.21    (iv) (iii) for intensive market farming; for purposes of this paragraph, "market
312.22farming" means the cultivation of one or more fruits or vegetables or production of animal
312.23or other agricultural products for sale to local markets by the farmer or an organization
312.24with which the farmer is affiliated.
312.25    "Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
312.26described in section 272.193, or all of a set of contiguous tax parcels under that section
312.27that are owned by the same person.
312.28    (g) Land shall be classified as agricultural even if all or a portion of the agricultural
312.29use of that property is the leasing to, or use by another person for agricultural purposes.
312.30    Classification under this subdivision is not determinative for qualifying under
312.31section 273.111.
312.32    (h) The property classification under this section supersedes, for property tax
312.33purposes only, any locally administered agricultural policies or land use restrictions that
312.34define minimum or maximum farm acreage.
312.35    (i) The term "agricultural products" as used in this subdivision includes production
312.36for sale of:
313.1    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
313.2animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
313.3bees, and apiary products by the owner;
313.4    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
313.5for agricultural use;
313.6    (3) the commercial boarding of horses, which may include related horse training and
313.7riding instruction, if the boarding is done on property that is also used for raising pasture
313.8to graze horses or raising or cultivating other agricultural products as defined in clause (1);
313.9    (4) property which is owned and operated by nonprofit organizations used for
313.10equestrian activities, excluding racing;
313.11    (5) game birds and waterfowl bred and raised (i) on a game farm licensed under
313.12section 97A.105, provided that the annual licensing report to the Department of Natural
313.13Resources, which must be submitted annually by March 30 to the assessor, indicates
313.14that at least 500 birds were raised or used for breeding stock on the property during the
313.15preceding year and that the owner provides a copy of the owner's most recent schedule F;
313.16or (ii) for use on a shooting preserve licensed under section 97A.115;
313.17    (6) insects primarily bred to be used as food for animals;
313.18    (7) trees, grown for sale as a crop, including short rotation woody crops, and not
313.19sold for timber, lumber, wood, or wood products; and
313.20    (8) maple syrup taken from trees grown by a person licensed by the Minnesota
313.21Department of Agriculture under chapter 28A as a food processor.
313.22    (j) If a parcel used for agricultural purposes is also used for commercial or industrial
313.23purposes, including but not limited to:
313.24    (1) wholesale and retail sales;
313.25    (2) processing of raw agricultural products or other goods;
313.26    (3) warehousing or storage of processed goods; and
313.27    (4) office facilities for the support of the activities enumerated in clauses (1), (2),
313.28and (3),
313.29the assessor shall classify the part of the parcel used for agricultural purposes as class
313.301b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
313.31use. The grading, sorting, and packaging of raw agricultural products for first sale is
313.32considered an agricultural purpose. A greenhouse or other building where horticultural
313.33or nursery products are grown that is also used for the conduct of retail sales must be
313.34classified as agricultural if it is primarily used for the growing of horticultural or nursery
313.35products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
314.1those products. Use of a greenhouse or building only for the display of already grown
314.2horticultural or nursery products does not qualify as an agricultural purpose.
314.3    (k) The assessor shall determine and list separately on the records the market value
314.4of the homestead dwelling and the one acre of land on which that dwelling is located. If
314.5any farm buildings or structures are located on this homesteaded acre of land, their market
314.6value shall not be included in this separate determination.
314.7    (l) Class 2d airport landing area consists of a landing area or public access area of
314.8a privately owned public use airport. It has a class rate of one percent of market value.
314.9To qualify for classification under this paragraph, a privately owned public use airport
314.10must be licensed as a public airport under section 360.018. For purposes of this paragraph,
314.11"landing area" means that part of a privately owned public use airport properly cleared,
314.12regularly maintained, and made available to the public for use by aircraft and includes
314.13runways, taxiways, aprons, and sites upon which are situated landing or navigational aids.
314.14A landing area also includes land underlying both the primary surface and the approach
314.15surfaces that comply with all of the following:
314.16    (i) the land is properly cleared and regularly maintained for the primary purposes of
314.17the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
314.18facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
314.19    (ii) the land is part of the airport property; and
314.20    (iii) the land is not used for commercial or residential purposes.
314.21The land contained in a landing area under this paragraph must be described and certified
314.22by the commissioner of transportation. The certification is effective until it is modified,
314.23or until the airport or landing area no longer meets the requirements of this paragraph.
314.24For purposes of this paragraph, "public access area" means property used as an aircraft
314.25parking ramp, apron, or storage hangar, or an arrival and departure building in connection
314.26with the airport.
314.27    (m) Class 2e consists of land with a commercial aggregate deposit that is not actively
314.28being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
314.29located in a county that has elected to opt-out of the aggregate preservation program as
314.30provided in section 273.1115, subdivision 6. It has a class rate of one percent of market
314.31value. To qualify for classification under this paragraph, the property must be at least
314.32ten contiguous acres in size and the owner of the property must record with the county
314.33recorder of the county in which the property is located an affidavit containing:
314.34    (1) a legal description of the property;
314.35    (2) a disclosure that the property contains a commercial aggregate deposit that is not
314.36actively being mined but is present on the entire parcel enrolled;
315.1    (3) documentation that the conditional use under the county or local zoning
315.2ordinance of this property is for mining; and
315.3    (4) documentation that a permit has been issued by the local unit of government
315.4or the mining activity is allowed under local ordinance. The disclosure must include a
315.5statement from a registered professional geologist, engineer, or soil scientist delineating
315.6the deposit and certifying that it is a commercial aggregate deposit.
315.7    For purposes of this section and section 273.1115, "commercial aggregate deposit"
315.8means a deposit that will yield crushed stone or sand and gravel that is suitable for use
315.9as a construction aggregate; and "actively mined" means the removal of top soil and
315.10overburden in preparation for excavation or excavation of a commercial deposit.
315.11    (n) When any portion of the property under this subdivision or subdivision 22 begins
315.12to be actively mined, the owner must file a supplemental affidavit within 60 days from
315.13the day any aggregate is removed stating the number of acres of the property that is
315.14actively being mined. The acres actively being mined must be (1) valued and classified
315.15under subdivision 24 in the next subsequent assessment year, and (2) removed from the
315.16aggregate resource preservation property tax program under section 273.1115, if the
315.17land was enrolled in that program. Copies of the original affidavit and all supplemental
315.18affidavits must be filed with the county assessor, the local zoning administrator, and the
315.19Department of Natural Resources, Division of Land and Minerals. A supplemental
315.20affidavit must be filed each time a subsequent portion of the property is actively mined,
315.21provided that the minimum acreage change is five acres, even if the actual mining activity
315.22constitutes less than five acres.
315.23    (o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
315.24not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
315.25in section 14.386 concerning exempt rules do not apply.
315.26EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
315.27thereafter.

315.28    Sec. 10. Minnesota Statutes 2012, section 273.13, subdivision 25, is amended to read:
315.29    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
315.30units and used or held for use by the owner or by the tenants or lessees of the owner
315.31as a residence for rental periods of 30 days or more, excluding property qualifying for
315.32class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
315.33than hospitals exempt under section 272.02, and contiguous property used for hospital
315.34purposes, without regard to whether the property has been platted or subdivided. The
315.35market value of class 4a property has a class rate of 1.25 percent.
316.1    (b) Class 4b includes:
316.2    (1) residential real estate containing less than four units that does not qualify as class
316.34bb, other than seasonal residential recreational property;
316.4    (2) manufactured homes not classified under any other provision;
316.5    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
316.6farm classified under subdivision 23, paragraph (b) containing two or three units; and
316.7    (4) unimproved property that is classified residential as determined under subdivision
316.833.
316.9    The market value of class 4b property has a class rate of 1.25 percent.
316.10    (c) Class 4bb includes:
316.11    (1) nonhomestead residential real estate containing one unit, other than seasonal
316.12residential recreational property; and
316.13    (2) a single family dwelling, garage, and surrounding one acre of property on a
316.14nonhomestead farm classified under subdivision 23, paragraph (b).
316.15    Class 4bb property has the same class rates as class 1a property under subdivision 22.
316.16    Property that has been classified as seasonal residential recreational property at
316.17any time during which it has been owned by the current owner or spouse of the current
316.18owner does not qualify for class 4bb.
316.19    (d) Class 4c property includes:
316.20    (1) except as provided in subdivision 22, paragraph (c), real and personal property
316.21devoted to commercial temporary and seasonal residential occupancy for recreation
316.22purposes, for not more than 250 days in the year preceding the year of assessment. For
316.23purposes of this clause, property is devoted to a commercial purpose on a specific day
316.24if any portion of the property is used for residential occupancy, and a fee is charged for
316.25residential occupancy. Class 4c property under this clause must contain three or more
316.26rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
316.27or individual camping site equipped with water and electrical hookups for recreational
316.28vehicles. A camping pad offered for rent by a property that otherwise qualifies for class
316.294c under this clause is also class 4c under this clause regardless of the term of the rental
316.30agreement, as long as the use of the camping pad does not exceed 250 days. In order for a
316.31property to be classified under this clause, either (i) the business located on the property
316.32must provide recreational activities, at least 40 percent of the annual gross lodging receipts
316.33related to the property must be from business conducted during 90 consecutive days,
316.34and either (A) at least 60 percent of all paid bookings by lodging guests during the year
316.35must be for periods of at least two consecutive nights; or (B) at least 20 percent of the
316.36annual gross receipts must be from charges for providing recreational activities, or (ii) the
317.1business must contain 20 or fewer rental units, and must be located in a township or a city
317.2with a population of 2,500 or less located outside the metropolitan area, as defined under
317.3section 473.121, subdivision 2, that contains a portion of a state trail administered by the
317.4Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or
317.5more nights shall be counted as two bookings. Class 4c property also includes commercial
317.6use real property used exclusively for recreational purposes in conjunction with other class
317.74c property classified under this clause and devoted to temporary and seasonal residential
317.8occupancy for recreational purposes, up to a total of two acres, provided the property is
317.9not devoted to commercial recreational use for more than 250 days in the year preceding
317.10the year of assessment and is located within two miles of the class 4c property with which
317.11it is used. In order for a property to qualify for classification under this clause, the owner
317.12must submit a declaration to the assessor designating the cabins or units occupied for 250
317.13days or less in the year preceding the year of assessment by January 15 of the assessment
317.14year. Those cabins or units and a proportionate share of the land on which they are located
317.15must be designated class 4c under this clause as otherwise provided. The remainder of the
317.16cabins or units and a proportionate share of the land on which they are located will be
317.17designated as class 3a. The owner of property desiring designation as class 4c property
317.18under this clause must provide guest registers or other records demonstrating that the units
317.19for which class 4c designation is sought were not occupied for more than 250 days in the
317.20year preceding the assessment if so requested. The portion of a property operated as a
317.21(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
317.22nonresidential facility operated on a commercial basis not directly related to temporary and
317.23seasonal residential occupancy for recreation purposes does not qualify for class 4c. For
317.24the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
317.25boats and motors, snowmobiles, downhill or cross-country ski equipment; providing
317.26marina services, launch services, or guide services; or selling bait and fishing tackle;
317.27    (2) qualified property used as a golf course if:
317.28    (i) it is open to the public on a daily fee basis. It may charge membership fees or
317.29dues, but a membership fee may not be required in order to use the property for golfing,
317.30and its green fees for golfing must be comparable to green fees typically charged by
317.31municipal courses; and
317.32    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
317.33    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
317.34with the golf course is classified as class 3a property;
318.1    (3) real property up to a maximum of three acres of land owned and used by a
318.2nonprofit community service oriented organization and not used for residential purposes
318.3on either a temporary or permanent basis, provided that:
318.4    (i) the property is not used for a revenue-producing activity for more than six days
318.5in the calendar year preceding the year of assessment; or
318.6    (ii) the organization makes annual charitable contributions and donations at least
318.7equal to the property's previous year's property taxes and the property is allowed to be
318.8used for public and community meetings or events for no charge, as appropriate to the
318.9size of the facility.
318.10    For purposes of this clause:
318.11    (A) "charitable contributions and donations" has the same meaning as lawful
318.12gambling purposes under section 349.12, subdivision 25, excluding those purposes
318.13relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
318.14    (B) "property taxes" excludes the state general tax;
318.15    (C) a "nonprofit community service oriented organization" means any corporation,
318.16society, association, foundation, or institution organized and operated exclusively for
318.17charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
318.18federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
318.19Revenue Code; and
318.20    (D) "revenue-producing activities" shall include but not be limited to property or that
318.21portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
318.22liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
318.23alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
318.24insurance business, or office or other space leased or rented to a lessee who conducts a
318.25for-profit enterprise on the premises.
318.26Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use
318.27of the property for social events open exclusively to members and their guests for periods
318.28of less than 24 hours, when an admission is not charged nor any revenues are received by
318.29the organization shall not be considered a revenue-producing activity.
318.30    The organization shall maintain records of its charitable contributions and donations
318.31and of public meetings and events held on the property and make them available upon
318.32request any time to the assessor to ensure eligibility. An organization meeting the
318.33requirement under item (ii) must file an application by May 1 with the assessor for
318.34eligibility for the current year's assessment. The commissioner shall prescribe a uniform
318.35application form and instructions;
319.1    (4) postsecondary student housing of not more than one acre of land that is owned by
319.2a nonprofit corporation organized under chapter 317A and is used exclusively by a student
319.3cooperative, sorority, or fraternity for on-campus housing or housing located within two
319.4miles of the border of a college campus;
319.5    (5)(i) manufactured home parks as defined in section 327.14, subdivision 3,
319.6excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii)
319.7manufactured home parks as defined in section 327.14, subdivision 3, that are described in
319.8section 273.124, subdivision 3a;
319.9    (6) real property that is actively and exclusively devoted to indoor fitness, health,
319.10social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
319.11and is located within the metropolitan area as defined in section 473.121, subdivision 2;
319.12    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
319.13under section 272.01, subdivision 2, and the land on which it is located, provided that:
319.14    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
319.15Airports Commission, or group thereof; and
319.16    (ii) the land lease, or any ordinance or signed agreement restricting the use of the
319.17leased premise, prohibits commercial activity performed at the hangar.
319.18    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
319.19be filed by the new owner with the assessor of the county where the property is located
319.20within 60 days of the sale;
319.21    (8) a privately owned noncommercial aircraft storage hangar not exempt under
319.22section 272.01, subdivision 2, and the land on which it is located, provided that:
319.23    (i) the land abuts a public airport; and
319.24    (ii) the owner of the aircraft storage hangar provides the assessor with a signed
319.25agreement restricting the use of the premises, prohibiting commercial use or activity
319.26performed at the hangar; and
319.27    (9) residential real estate, a portion of which is used by the owner for homestead
319.28purposes, and that is also a place of lodging, if all of the following criteria are met:
319.29    (i) rooms are provided for rent to transient guests that generally stay for periods
319.30of 14 or fewer days;
319.31    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
319.32in the basic room rate;
319.33    (iii) meals are not provided to the general public except for special events on fewer
319.34than seven days in the calendar year preceding the year of the assessment; and
319.35    (iv) the owner is the operator of the property.
320.1The market value subject to the 4c classification under this clause is limited to five rental
320.2units. Any rental units on the property in excess of five, must be valued and assessed as
320.3class 3a. The portion of the property used for purposes of a homestead by the owner must
320.4be classified as class 1a property under subdivision 22;
320.5    (10) real property up to a maximum of three acres and operated as a restaurant
320.6as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake
320.7as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
320.8is either devoted to commercial purposes for not more than 250 consecutive days, or
320.9receives at least 60 percent of its annual gross receipts from business conducted during
320.10four consecutive months. Gross receipts from the sale of alcoholic beverages must be
320.11included in determining the property's qualification under subitem (B). The property's
320.12primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
320.13sales located on the premises must be excluded. Owners of real property desiring 4c
320.14classification under this clause must submit an annual declaration to the assessor by
320.15February 1 of the current assessment year, based on the property's relevant information for
320.16the preceding assessment year;
320.17    (11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
320.18as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to
320.19the public and devoted to recreational use for marina services. The marina owner must
320.20annually provide evidence to the assessor that it provides services, including lake or river
320.21access to the public by means of an access ramp or other facility that is either located on
320.22the property of the marina or at a publicly owned site that abuts the property of the marina.
320.23No more than 800 feet of lakeshore may be included in this classification. Buildings used
320.24in conjunction with a marina for marina services, including but not limited to buildings
320.25used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
320.26tackle, are classified as class 3a property; and
320.27    (12) real and personal property devoted to noncommercial temporary and seasonal
320.28residential occupancy for recreation purposes.
320.29    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
320.30parcel of noncommercial seasonal residential recreational property under clause (12)
320.31has the same class rates as class 4bb property, (ii) manufactured home parks assessed
320.32under clause (5), item (i), have the same class rate as class 4b property, and the market
320.33value of manufactured home parks assessed under clause (5), item (ii), has the same class
320.34rate as class 4d property if more than 50 percent of the lots in the park are occupied by
320.35shareholders in the cooperative corporation or association and a class rate of one percent if
320.3650 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential
321.1recreational property and marina recreational land as described in clause (11), has a
321.2class rate of one percent for the first $500,000 of market value, and 1.25 percent for the
321.3remaining market value, (iv) the market value of property described in clause (4) has a
321.4class rate of one percent, (v) the market value of property described in clauses (2), (6), and
321.5(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property
321.6in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
321.7    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
321.8by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
321.9of the units in the building qualify as low-income rental housing units as certified under
321.10section 273.128, subdivision 3, only the proportion of qualifying units to the total number
321.11of units in the building qualify for class 4d. The remaining portion of the building shall be
321.12classified by the assessor based upon its use. Class 4d also includes the same proportion of
321.13land as the qualifying low-income rental housing units are to the total units in the building.
321.14For all properties qualifying as class 4d, the market value determined by the assessor must
321.15be based on the normal approach to value using normal unrestricted rents.
321.16    Class 4d property has a class rate of 0.75 percent.
321.17EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
321.18thereafter.

321.19    Sec. 11. Minnesota Statutes 2012, section 273.19, subdivision 1, is amended to read:
321.20    Subdivision 1. Tax-exempt property; lease. Except as provided in subdivision 3 or
321.214, tax-exempt property held under a lease for a term of at least one year, and not taxable
321.22under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall be
321.23considered, for all purposes of taxation, as the property of the person holding it. In this
321.24subdivision, "tax-exempt property" means property owned by the United States, the state
321.25 or any of its political subdivisions, a school, or any religious, scientific, or benevolent
321.26society or institution, incorporated or unincorporated, or any corporation whose property
321.27is not taxed in the same manner as other property. This subdivision does not apply to
321.28property exempt from taxation under section 272.01, subdivision 2, paragraph (b), clauses
321.29(2), (3), and (4), or to property exempt from taxation under section 272.0213.
321.30EFFECTIVE DATE.This section is effective the day following final enactment.

321.31    Sec. 12. Minnesota Statutes 2012, section 273.372, subdivision 4, is amended to read:
321.32    Subd. 4. Administrative appeals. (a) Companies that submit the reports under
321.33section 270.82 or 273.371 by the date specified in that section, or by the date specified by
322.1the commissioner in an extension, may appeal administratively to the commissioner prior
322.2to bringing an action in court by submitting.
322.3    (b) Companies that must submit reports under section 270.82 must submit a written
322.4request with to the commissioner for a conference within ten days after the date of the
322.5commissioner's valuation certification or notice to the company, or by May June 15,
322.6whichever is earlier.
322.7    (c) Companies that submit reports under section 273.371 must submit a written
322.8request to the commissioner for a conference within ten days after the date of the
322.9commissioner's valuation certification or notice to the company, or by July 1, whichever
322.10is earlier.
322.11    (d) The commissioner shall conduct the conference upon the commissioner's entire
322.12files and records and such further information as may be offered. The conference must
322.13be held no later than 20 days after the date of the commissioner's valuation certification
322.14or notice to the company, or by the date specified by the commissioner in an extension.
322.15Within 60 days after the conference the commissioner shall make a final determination of
322.16the matter and shall notify the company promptly of the determination. The conference
322.17is not a contested case hearing.
322.18    (b) (e) In addition to the opportunity for a conference under paragraph (a), the
322.19commissioner shall also provide the railroad and utility companies the opportunity to
322.20discuss any questions or concerns relating to the values established by the commissioner
322.21through certification or notice in a less formal manner. This does not change or modify
322.22the deadline for requesting a conference under paragraph (a), the deadline in section
322.23271.06 for appealing an order of the commissioner, or the deadline in section 278.01 for
322.24appealing property taxes in court.
322.25EFFECTIVE DATE.This section is effective beginning with assessment year 2014.

322.26    Sec. 13. Minnesota Statutes 2012, section 273.39, is amended to read:
322.27273.39 RURAL AREA.
322.28    As used in sections 273.39 to 273.41, the term "rural area" shall be deemed to mean
322.29any area of the state not included within the boundaries of any incorporated statutory
322.30city or home rule charter city, and such term shall be deemed to include both farm and
322.31nonfarm population thereof.
322.32EFFECTIVE DATE.This section is effective the day following final enactment.

322.33    Sec. 14. Minnesota Statutes 2012, section 279.06, subdivision 1, is amended to read:
323.1    Subdivision 1. List and notice. Within five days after the filing of such list, the
323.2court administrator shall return a copy thereof to the county auditor, with a notice prepared
323.3and signed by the court administrator, and attached thereto, which may be substantially in
323.4the following form:

323.5	State of Minnesota	)
323.6		) ss.
323.7	County of .....	)
323.8				District Court
323.9				..... Judicial District.

323.10    The state of Minnesota, to all persons, companies, or corporations who have or claim
323.11any estate, right, title, or interest in, claim to, or lien upon, any of the several parcels of
323.12land described in the list hereto attached:
323.13    The list of taxes and penalties on real property for the county of ...............................
323.14remaining delinquent on the first Monday in January, ......., has been filed in the office of
323.15the court administrator of the district court of said county, of which that hereto attached is a
323.16copy. Therefore, you, and each of you, are hereby required to file in the office of said court
323.17administrator, on or before the 20th day after the publication of this notice and list, your
323.18answer, in writing, setting forth any objection or defense you may have to the taxes, or any
323.19part thereof, upon any parcel of land described in the list, in, to, or on which you have or
323.20claim any estate, right, title, interest, claim, or lien, and, in default thereof, judgment will
323.21be entered against such parcel of land for the taxes on such list appearing against it, and
323.22for all penalties, interest, and costs. Based upon said judgment, the land shall be sold to
323.23the state of Minnesota on the second Monday in May, ....... The period of redemption for
323.24all lands sold to the state at a tax judgment sale shall be three years from the date of sale to
323.25the state of Minnesota if the land is within an incorporated area unless it is:
323.26    (a) nonagricultural homesteaded land as defined in section 273.13, subdivision 22;
323.27    (b) homesteaded agricultural land as defined in section 273.13, subdivision 23,
323.28paragraph (a);
323.29    (c) seasonal residential recreational land as defined in section 273.13, subdivisions
323.3022, paragraph (c) , and 25, paragraph (d), clause (1), in which event the period of
323.31redemption is five years from the date of sale to the state of Minnesota;
323.32    (d) abandoned property and pursuant to section 281.173 a court order has been
323.33entered shortening the redemption period to five weeks; or
323.34    (e) vacant property as described under section 281.174, subdivision 2, and for which
323.35a court order is entered shortening the redemption period under section 281.174.
323.36    The period of redemption for all other lands sold to the state at a tax judgment sale
323.37shall be five years from the date of sale.
324.1    Inquiries as to the proceedings set forth above can be made to the county auditor of
324.2..... county whose address is ......

324.3		(Signed) ..... ,
324.4 324.5		Court Administrator of the District Court of the County of .....
324.6		(Here insert list.)

324.7    The notice must contain a narrative description of the various periods to redeem
324.8specified in sections 281.17, 281.173, and 281.174, in the manner prescribed by the
324.9commissioner of revenue under subdivision 2.
324.10    The list referred to in the notice shall be substantially in the following form:
324.11    List of real property for the county of ......................., on which taxes remain
324.12delinquent on the first Monday in January, .......
324.14Township (40), Range (20),

324.15 324.16 324.17 324.18 324.19 324.20 324.21 324.22	Names (and Current Filed Addresses) for the Taxpayers and Fee Owners and in Addition Those Parties Who Have Filed Their Addresses Pursuant to section 276.041	Subdivision of Section	Section	Tax Parcel Number	Total Tax and Penalty
324.23					$ cts.
324.24 324.25	John Jones (825 Fremont Fairfield, MN 55000)	S.E. 1/4 of S.W. 1/4	10	23101	2.20
324.26 324.27 324.28 324.29 324.30 324.31 324.32 324.33 324.34 324.35 324.36 324.37 324.38 324.39 324.40 324.41 324.42 324.43 324.44	Bruce Smith (2059 Hand Fairfield, MN 55000) and Fairfield State Bank (100 Main Street Fairfield, MN 55000)	That part of N.E. 1/4 of S.W. 1/4 desc. as follows: Beg. at the S.E. corner of said N.E. 1/4 of S.W. 1/4; thence N. along the E. line of said N.E. 1/4 of S.W. 1/4 a distance of 600 ft.; thence W. parallel with the S. line of said N.E. 1/4 of S.W. 1/4 a distance of 600 ft.; thence S. parallel with said E. line a distance of 600 ft. to S. line of said N.E. 1/4 of S.W. 1/4; thence E. along said S. line a distance of 600 ft. to the point of beg.	21	33211	3.15

324.45    As to platted property, the form of heading shall conform to circumstances and be
324.46substantially in the following form:
325.2Brown's Addition, or Subdivision

325.3 325.4 325.5 325.6 325.7 325.8 325.9 325.10	Names (and Current Filed Addresses) for the Taxpayers and Fee Owners and in Addition Those Parties Who Have Filed Their Addresses Pursuant to section 276.041	Lot	Block	Tax Parcel Number	Total Tax and Penalty
325.11					$ cts.
325.12 325.13	John Jones (825 Fremont Fairfield, MN 55000)	15	9	58243	2.20
325.14 325.15 325.16 325.17 325.18	Bruce Smith (2059 Hand Fairfield, MN 55000) and Fairfield State Bank (100 Main Street Fairfield, MN 55000)	16	9	58244	3.15

325.19    The names, descriptions, and figures employed in parentheses in the above forms are
325.20merely for purposes of illustration.
325.21    The name of the town, township, range or city, and addition or subdivision, as the
325.22case may be, shall be repeated at the head of each column of the printed lists as brought
325.23forward from the preceding column.
325.24    Errors in the list shall not be deemed to be a material defect to affect the validity
325.25of the judgment and sale.
325.26EFFECTIVE DATE.This section is effective for lists and notices required after
325.27December 31, 2013.

325.28    Sec. 15. Minnesota Statutes 2012, section 290B.04, subdivision 2, is amended to read:
325.29    Subd. 2. Approval; recording. The commissioner shall approve all initial
325.30applications that qualify under this chapter and shall notify qualifying homeowners on or
325.31before December 1. The commissioner may investigate the facts or require confirmation
325.32in regard to an application. The commissioner shall record or file a notice of qualification
325.33for deferral, including the names of the qualifying homeowners and a legal description
325.34of the property, in the office of the county recorder, or registrar of titles, whichever is
325.35applicable, in the county where the qualifying property is located. The notice must state
325.36that it serves as a notice of lien and that it includes deferrals under this section for future
325.37years. The commissioner shall prescribe the form of the notice. Execution of the notice
325.38by the original or facsimile signature of the commissioner or a delegate entitles them to
325.39be recorded, and no other attestation, certification, or acknowledgment is necessary. The
326.1homeowner shall pay the recording or filing fees for the notice, which, notwithstanding
326.2section 357.18, shall be paid by the homeowner at the time of satisfaction of the lien.
326.3EFFECTIVE DATE.This section is effective for notices that are both executed
326.4and recorded after June 30, 2013.

326.5    Sec. 16. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
326.6    Subd. 3. Occupation tax; other ores. Every person engaged in the business of
326.7mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
326.8taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
326.9in this subdivision. For purposes of this subdivision, mining includes the application of
326.10hydrometallurgical processes. Hydrometallurgical processes are processes that extract
326.11the ores, metals, or minerals, by use of aqueous solutions that leach, concentrate, and
326.12recover the ore, metal, or mineral. The tax is determined in the same manner as the tax
326.13imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17,
326.14subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must
326.15be computed by applying to taxable income the rate of 2.45 percent. A person subject
326.16to occupation tax under this section shall apportion its net income on the basis of the
326.17percentage obtained by taking the sum of:
326.18    (1) 75 percent of the percentage which the sales made within this state in connection
326.19with the trade or business during the tax period are of the total sales wherever made in
326.20connection with the trade or business during the tax period;
326.21    (2) 12.5 percent of the percentage which the total tangible property used by the
326.22taxpayer in this state in connection with the trade or business during the tax period is of
326.23the total tangible property, wherever located, used by the taxpayer in connection with the
326.24trade or business during the tax period; and
326.25    (3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
326.26in this state or paid in respect to labor performed in this state in connection with the trade
326.27or business during the tax period are of the taxpayer's total payrolls paid or incurred in
326.28connection with the trade or business during the tax period.
326.29    The tax is in addition to all other taxes.
326.30EFFECTIVE DATE.This section is effective the day following final enactment.

326.31    Sec. 17. Minnesota Statutes 2012, section 298.018, is amended to read:
326.32298.018 DISTRIBUTION OF PROCEEDS.
327.1    Subdivision 1. Within taconite assistance area. The proceeds of the tax paid
327.2under sections 298.015 and 298.016 on ores, metals, or minerals and energy resources
327.3 mined or extracted within the taconite assistance area defined in section 273.1341, shall
327.4be allocated as follows:
327.5    (1) five percent to the city or town within which the minerals or energy resources
327.6are mined or extracted;
327.7    (2) ten percent to the taconite municipal aid account to be distributed as provided
327.8in section 298.282;
327.9    (3) ten percent to the school district within which the minerals or energy resources
327.10are mined or extracted;
327.11    (4) 20 percent to a group of school districts comprised of those school districts
327.12wherein the mineral or energy resource was mined or extracted or in which there is a
327.13qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion
327.14to school district indexes as follows: for each school district, its pupil units determined
327.15under section 126C.05 for the prior school year shall be multiplied by the ratio of the
327.16average adjusted net tax capacity per pupil unit for school districts receiving aid under
327.17this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
327.18ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
327.19Each district shall receive that portion of the distribution which its index bears to the sum
327.20of the indices for all school districts that receive the distributions;
327.21    (5) 20 percent to the county within which the minerals or energy resources are
327.22mined or extracted;
327.23    (6) 20 percent to St. Louis County acting as the counties' fiscal agent to be
327.24distributed as provided in sections 273.134 to 273.136;
327.25    (7) five percent to the Iron Range Resources and Rehabilitation Board for the
327.26purposes of section 298.22;
327.27    (8) five percent to the Douglas J. Johnson economic protection trust fund; and
327.28    (9) five percent to the taconite environmental protection fund.
327.29    The proceeds of the tax shall be distributed on July 15 each year.
327.30    Subd. 2. Outside taconite assistance area. The proceeds of the tax paid under
327.31sections 298.015 and 298.016 on ores, metals, or minerals and energy resources mined
327.32or extracted outside of the taconite assistance area defined in section 273.1341, shall
327.33be deposited in the general fund.
327.34EFFECTIVE DATE.This section is effective the day following final enactment.

327.35    Sec. 18. Minnesota Statutes 2012, section 373.01, subdivision 1, is amended to read:
328.1    Subdivision 1. Public corporation; listed powers. (a) Each county is a body politic
328.2and corporate and may:
328.3    (1) Sue and be sued.
328.4    (2) Acquire and hold real and personal property for the use of the county, and lands
328.5sold for taxes as provided by law.
328.6    (3) Purchase and hold for the benefit of the county real estate sold by virtue of
328.7judicial proceedings, to which the county is a party.
328.8    (4) Sell, lease, and convey real or personal estate owned by the county, and give
328.9contracts or options to sell, lease, or convey it, and make orders respecting it as deemed
328.10conducive to the interests of the county's inhabitants.
328.11    (5) Make all contracts and do all other acts in relation to the property and concerns
328.12of the county necessary to the exercise of its corporate powers.
328.13    (b) No sale, lease, or conveyance of real estate owned by the county, except the lease
328.14of a residence acquired for the furtherance of an approved capital improvement project, nor
328.15any contract or option for it, shall be valid, without first advertising for bids or proposals in
328.16the official newspaper of the county for three consecutive weeks and once in a newspaper
328.17of general circulation in the area where the property is located. The notice shall state the
328.18time and place of considering the proposals, contain a legal description of any real estate,
328.19and a brief description of any personal property. Leases that do not exceed $15,000 for any
328.20one year may be negotiated and are not subject to the competitive bid procedures of this
328.21section. All proposals estimated to exceed $15,000 in any one year shall be considered at
328.22the time set for the bid opening, and the one most favorable to the county accepted, but the
328.23county board may, in the interest of the county, reject any or all proposals.
328.24    (c) Sales of personal property the value of which is estimated to be $15,000 or
328.25more shall be made only after advertising for bids or proposals in the county's official
328.26newspaper, on the county's Web site, or in a recognized industry trade journal. At the same
328.27time it posts on its Web site or publishes in a trade journal, the county must publish in the
328.28official newspaper, either as part of the minutes of a regular meeting of the county board
328.29or in a separate notice, a summary of all requests for bids or proposals that the county
328.30advertises on its Web site or in a trade journal. After publication in the official newspaper,
328.31on the Web site, or in a trade journal, bids or proposals may be solicited and accepted by
328.32the electronic selling process authorized in section 471.345, subdivision 17. Sales of
328.33personal property the value of which is estimated to be less than $15,000 may be made
328.34either on competitive bids or in the open market, in the discretion of the county board.
328.35"Web site" means a specific, addressable location provided on a server connected to the
329.1Internet and hosting World Wide Web pages and other files that are generally accessible
329.2on the Internet all or most of a day.
329.3    (d) Notwithstanding anything to the contrary herein, the county may, when acquiring
329.4real property for county highway right-of-way, exchange parcels of real property of
329.5substantially similar or equal value without advertising for bids. The estimated values for
329.6these parcels shall be determined by the county assessor.
329.7    (e) Notwithstanding anything in this section to the contrary, the county may, when
329.8acquiring real property for purposes other than county highway right-of-way, exchange
329.9parcels of real property of substantially similar or equal value without advertising for
329.10bids. The estimated values for these parcels must be determined by the county assessor
329.11or a private appraisal performed by a licensed Minnesota real estate appraiser. For the
329.12purpose of determining for the county the estimated values of parcels proposed to be
329.13exchanged, the county assessor need not be licensed under chapter 82B. Before giving
329.14final approval to any exchange of land, the county board shall hold a public hearing on
329.15the exchange. At least two weeks before the hearing, the county auditor shall post a
329.16notice in the auditor's office and the official newspaper of the county of the hearing that
329.17contains a description of the lands affected.
329.18    (f) If real estate or personal property remains unsold after advertising for and
329.19consideration of bids or proposals the county may employ a broker to sell the property.
329.20The broker may sell the property for not less than 90 percent of its appraised market value
329.21as determined by the county. The broker's fee shall be set by agreement with the county but
329.22may not exceed ten percent of the sale price and must be paid from the proceeds of the sale.
329.23    (g) A county or its agent may rent a county-owned residence acquired for the
329.24furtherance of an approved capital improvement project subject to the conditions set
329.25by the county board and not subject to the conditions for lease otherwise provided by
329.26paragraph (a), clause (4), and paragraphs (b), (c), (d), (f), and (h).
329.27    (h) In no case shall lands be disposed of without there being reserved to the county
329.28all iron ore and other valuable minerals in and upon the lands, with right to explore for,
329.29mine and remove the iron ore and other valuable minerals, nor shall the minerals and
329.30mineral rights be disposed of, either before or after disposition of the surface rights,
329.31otherwise than by mining lease, in similar general form to that provided by section 93.20
329.32for mining leases affecting state lands. The lease shall be for a term not exceeding 50
329.33years, and be issued on a royalty basis, the royalty to be not less than 25 cents per ton of
329.342,240 pounds, and fix a minimum amount of royalty payable during each year, whether
329.35mineral is removed or not. Prospecting options for mining leases may be granted for
330.1periods not exceeding one year. The options shall require, among other things, periodical
330.2showings to the county board of the results of exploration work done.
330.3    (i) Notwithstanding anything in this subdivision to the contrary, the county may,
330.4when selling real property owned in fee simple that cannot be improved because of
330.5noncompliance with local ordinances regarding minimum area, shape, frontage, or access,
330.6proceed to sell the nonconforming parcel without advertising for bid. At the county's
330.7discretion, the real property may be restricted to sale to adjoining landowners or may be
330.8sold to any other interested party. The property shall be sold to the highest bidder, but in no
330.9case shall the property be sold for less than 90 percent of its fair market value as determined
330.10by the county assessor. All owners of land adjoining the land to be sold shall be given a
330.11written notice at least 30 days before the sale. This paragraph shall be liberally construed to
330.12encourage the sale of nonconforming real property and promote its return to the tax roles.
330.13EFFECTIVE DATE.This section is effective the day following final enactment.

330.14    Sec. 19. REPEALER.
330.15Minnesota Statutes 2012, sections 272.69; and 273.11, subdivisions 1a and 22, are
330.16repealed.
330.17EFFECTIVE DATE.This section is effective the day following final enactment.


330.20    Section 1. Minnesota Statutes 2012, section 16A.46, is amended to read:
330.2116A.46 LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.
330.22    Subdivision 1. Duplicate warrant. The commissioner may issue a duplicate of an
330.23unpaid warrant to an owner if the owner certifies that the original was lost or destroyed. The
330.24commissioner may require certification be documented by affidavit. The commissioner
330.25may refuse to issue a duplicate of an unpaid state warrant. If the commissioner acts in
330.26good faith, the commissioner is not liable, whether the application is granted or denied.
330.27    Subd. 2. Original warrant is void. When the duplicate is issued, the original is
330.28void. The commissioner may require an indemnity bond from the applicant to the state for
330.29double the amount of the warrant for anyone damaged by the issuance of the duplicate.
330.30The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the
330.31commissioner acts in good faith the commissioner is not liable, whether the application is
331.1granted or denied is not liable to any holder who took the void original warrant for value,
331.2whether or not the commissioner required an indemnity bond from the applicant.
331.3    Subd. 3. Unpaid refund or rebate. For an unpaid refund or rebate issued under a
331.4tax law administered by the commissioner of revenue that has been lost or destroyed, an
331.5affidavit is not required for the commissioner to issue a duplicate if the duplicate is issued
331.6to the same name and Social Security number as the original warrant and that information
331.7is verified on a tax return filed by the recipient.
331.8EFFECTIVE DATE.This section is effective the day following final enactment.

331.9    Sec. 2. Minnesota Statutes 2012, section 270C.38, subdivision 1, is amended to read:
331.10    Subdivision 1. Sufficient notice. (a) If no method of notification of a written
331.11determination or action of the commissioner is otherwise specifically provided for by
331.12law, notice of the determination or action sent postage prepaid by United States mail to
331.13the taxpayer or other person affected by the determination or action at the taxpayer's
331.14or person's last known address, is sufficient. If the taxpayer or person being notified is
331.15deceased or is under a legal disability, or, in the case of a corporation being notified that
331.16has terminated its existence, notice to the last known address of the taxpayer, person, or
331.17corporation is sufficient, unless the department has been provided with a new address by a
331.18party authorized to receive notices from the commissioner.
331.19(b) If a taxpayer or other person agrees to accept notification by electronic means,
331.20notice of a determination or action of the commissioner sent by electronic mail to the
331.21taxpayer's or person's last known electronic mailing address as provided for in section
331.22325L.08 is sufficient.
331.23EFFECTIVE DATE.This section is effective the day following final enactment.

331.24    Sec. 3. Minnesota Statutes 2012, section 270C.42, subdivision 2, is amended to read:
331.25    Subd. 2. Penalty for failure to pay electronically. In addition to other applicable
331.26penalties imposed by law, after notification from the commissioner to the taxpayer that
331.27payments for a tax payable to the commissioner are required to be made by electronic
331.28means, and the payments are remitted by some other means, there is a penalty in the
331.29amount of five percent of each payment that should have been remitted electronically.
331.30After the commissioner's initial notification to the taxpayer that payments are required to
331.31be made by electronic means, the commissioner is not required to notify the taxpayer in
331.32subsequent periods if the initial notification specified the amount of tax liability at which a
331.33taxpayer is required to remit payments by electronic means. The penalty can be abated
332.1under the abatement procedures prescribed in section 270C.34 if the failure to remit the
332.2payment electronically is due to reasonable cause. The penalty bears interest at the rate
332.3specified in section 270C.40 from the due date of the payment of the tax provided in
332.4section 270C.40, subdivision 3, to the date of payment of the penalty.
332.5EFFECTIVE DATE.This section is effective the day following final enactment.

332.6    Sec. 4. Minnesota Statutes 2012, section 287.385, subdivision 7, is amended to read:
332.7    Subd. 7. Interest on penalties. A penalty imposed under this chapter bears interest
332.8from the date payment was required to be paid, including any extensions, provided in
332.9section 270C.40, subdivision 3, to the date of payment of the penalty.
332.10EFFECTIVE DATE.This section is effective the day following final enactment.

332.11    Sec. 5. Minnesota Statutes 2012, section 289A.55, subdivision 9, is amended to read:
332.12    Subd. 9. Interest on penalties. (a) A penalty imposed under section 289A.60,
332.13subdivision 1 , 2, 2a, 4, 5, 6, or 21 bears interest from the date the return or payment
332.14was required to be filed or paid, including any extensions provided in section 270C.40,
332.15subdivision 3, to the date of payment of the penalty.
332.16(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
332.1760 days from the date of notice. In that case interest is imposed from the date of notice
332.18to the date of payment.
332.19EFFECTIVE DATE.This section is effective the day following final enactment.

332.20    Sec. 6. Minnesota Statutes 2012, section 289A.60, subdivision 4, is amended to read:
332.21    Subd. 4. Substantial understatement of liability; penalty. (a) The commissioner
332.22of revenue shall impose a penalty for substantial understatement of any tax payable to the
332.23commissioner, except a tax imposed under chapter 297A.
332.24(b) There must be added to the tax an amount equal to 20 percent of the amount of any
332.25underpayment attributable to the understatement. There is a substantial understatement of
332.26tax for the period if the amount of the understatement for the period exceeds the greater of:
332.27(1) ten percent of the tax required to be shown on the return for the period; or
332.28(2)(i) $10,000 in the case of a mining company or a corporation, other than an S
332.29corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or
332.30section 298.01 or 298.015, or
332.31(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or
332.32a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015.
333.1(c) For a corporation, other than an S corporation, there is also a substantial
333.2understatement of tax for any taxable year if the amount of the understatement for the
333.3taxable year exceeds the lesser of:
333.4(1) ten percent of the tax required to be shown on the return for the taxable year
333.5(or, if greater, $10,000); or
333.6(2) $10,000,000.
333.7(d) The term "understatement" means the excess of the amount of the tax required
333.8to be shown on the return for the period, over the amount of the tax imposed that is
333.9shown on the return. The excess must be determined without regard to items to which
333.10subdivision 27 applies. The amount of the understatement shall be reduced by that part of
333.11the understatement that is attributable to the tax treatment of any item by the taxpayer if
333.12(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to
333.13which the relevant facts affecting the item's tax treatment are adequately disclosed in the
333.14return or in a statement attached to the return and (ii) there is a reasonable basis for the tax
333.15treatment of the item. The exception for substantial authority under clause (1) does not
333.16apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the
333.17Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment
333.18of an item attributable to a multiple-party financing transaction if the treatment does not
333.19clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B)
333.20of the Internal Revenue Code. The special rules in cases involving tax shelters provided in
333.21section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax
333.22shelter the principal purpose of which is the avoidance or evasion of state taxes.
333.23(e) The commissioner may abate all or any part of the addition to the tax provided
333.24by this section on a showing by the taxpayer that there was reasonable cause for the
333.25understatement, or part of it, and that the taxpayer acted in good faith. The additional tax
333.26and penalty shall bear interest at the rate as specified in section 270C.40 from the time
333.27the tax should have been paid until paid.
333.28EFFECTIVE DATE.This section is effective the day following final enactment.

333.29    Sec. 7. Minnesota Statutes 2012, section 296A.01, is amended by adding a subdivision
333.30to read:
333.31    Subd. 8b. Biobutanol. "Biobutanol" means isobutyl alcohol produced by
333.32fermenting agriculturally generated organic material that is to be blended with gasoline
333.33and meets either:
334.1    (1) the initial ASTM Standard Specification for Butanol for Blending with Gasoline
334.2for use as an Automotive Spark-Ignition Engine Fuel once it has been released by ASTM
334.3for general distribution; or
334.4    (2) in the absence of an ASTM Standard Specification, the following list of
334.5requirements:
334.6    (i) visually free of sediment and suspended matter;
334.7    (ii) clear and bright at the ambient temperature of 21 degrees Celsius or the ambient
334.8temperature whichever is higher;
334.9    (iii) free of any adulterant or contaminant that can render it unacceptable for its
334.10commonly used applications;
334.11    (iv) contains not less than 96 volume percent isobutyl alcohol;
334.12    (v) contains not more than 0.4 volume percent methanol;
334.13    (vi) contains not more than 1.0 volume percent water as determined by ASTM
334.14standard test method E203 or E1064;
334.15    (vii) acidity (as acetic acid) of not more than 0.007 mass percent as determined
334.16by ASTM standard test method D1613;
334.17    (viii) solvent washed gum content of not more than 5.0 milligrams per 100 milliliters
334.18as determined by ASTM standard test method D381;
334.19    (ix) sulfur content of not more than 30 parts per million as determined by ASTM
334.20standard test method D2622 or D5453; and
334.21    (x) contains not more than 4 parts per million total inorganic sulfate.

334.22    Sec. 8. Minnesota Statutes 2012, section 296A.01, subdivision 19, is amended to read:
334.23    Subd. 19. E85. "E85" means a petroleum product that is a blend of agriculturally
334.24derived denatured ethanol and gasoline or natural gasoline that typically contains not more
334.25than 85 percent ethanol by volume, but at a minimum must contain 60 51 percent ethanol by
334.26volume. For the purposes of this chapter, the energy content of E85 will be considered to be
334.2782,000 BTUs per gallon. E85 produced for use as a motor fuel in alternative fuel vehicles
334.28as defined in subdivision 5 must comply with ASTM specification D5798-07 D5798-11.
334.29EFFECTIVE DATE.This section is effective the day following final enactment.

334.30    Sec. 9. Minnesota Statutes 2012, section 296A.22, subdivision 1, is amended to read:
334.31    Subdivision 1. Penalty for failure to pay tax, general rule. Upon the failure of
334.32any person to pay any tax or fee when due, a penalty of one percent per day for the first
334.33ten days of delinquency shall accrue, and thereafter the tax, fees, and penalty shall bear
334.34interest at the rate specified in section 270C.40 until paid.
335.1EFFECTIVE DATE.This section is effective the day following final enactment.

335.2    Sec. 10. Minnesota Statutes 2012, section 296A.22, subdivision 3, is amended to read:
335.3    Subd. 3. Operating without license. If any person operates as a distributor, special
335.4fuel dealer, bulk purchaser, or motor carrier without first securing the license required
335.5under this chapter, any tax or fee imposed by this chapter shall become immediately due
335.6and payable. A penalty of 25 percent is imposed upon the tax and fee due. The tax, and
335.7 fees, and penalty shall bear interest at the rate specified in section 270C.40. The penalty
335.8imposed in this subdivision shall bear interest from the date provided in section 270C.40,
335.9subdivision 3, to the date of payment of the penalty.
335.10EFFECTIVE DATE.This section is effective the day following final enactment.

335.11    Sec. 11. Minnesota Statutes 2012, section 297B.11, is amended to read:
335.12297B.11 REGISTRAR AS AGENT OF COMMISSIONER OF REVENUE;
335.13POWERS.
335.14The state commissioner of revenue is charged with the administration of the
335.15sales tax on motor vehicles. The commissioner may prescribe all rules not inconsistent
335.16with the provisions of this chapter, necessary and advisable for the proper and efficient
335.17administration of the law. The collection of this sales tax on motor vehicles shall be
335.18carried out by the motor vehicle registrar who shall act as the agent of the commissioner
335.19and who shall be subject to all rules not inconsistent with the provisions of this chapter,
335.20that may be prescribed by the commissioner.
335.21The provisions of chapters 270C, 289A, and 297A relating to the commissioner's
335.22authority to audit, assess, and collect the tax, and to issue refunds and to hear appeals,
335.23are applicable to the sales tax on motor vehicles. The commissioner may impose civil
335.24penalties as provided in chapters 289A and 297A, and the additional tax and penalties
335.25are subject to interest at the rate provided in section 270C.40 from the date provided in
335.26section 270C.40, subdivision 3, until paid.
335.27EFFECTIVE DATE.This section is effective the day following final enactment.

335.28    Sec. 12. Minnesota Statutes 2012, section 297E.14, subdivision 7, is amended to read:
335.29    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297E.12,
335.30subdivision 1 , 2, 3, 4, or 5, bears interest from the date the return or payment was required
335.31to be filed or paid, including any extensions provided in section 270C.40, subdivision
335.323, to the date of payment of the penalty.
336.1(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
336.2ten days from the date of notice. In that case interest is imposed from the date of notice
336.3to the date of payment.
336.4EFFECTIVE DATE.This section is effective the day following final enactment.

336.5    Sec. 13. Minnesota Statutes 2012, section 297F.09, subdivision 9, is amended to read:
336.6    Subd. 9. Interest. The amount of tax not timely paid, together with any penalty
336.7imposed in this section, bears interest at the rate specified in section 270C.40 from the
336.8time such tax should have been paid until paid. The penalty imposed in this section bears
336.9interest at the rate specified in section 270C.40 from the date provided in section 270C.40,
336.10subdivision 3, to the date of payment of the penalty. Any interest and penalty is added to
336.11the tax and collected as a part of it.
336.12EFFECTIVE DATE.This section is effective the day following final enactment.

336.13    Sec. 14. Minnesota Statutes 2012, section 297F.18, subdivision 7, is amended to read:
336.14    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297F.19,
336.15subdivisions 2 to 7, bears interest from the date the return or payment was required to be
336.16filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
336.17date of payment of the penalty.
336.18(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
336.19ten days from the date of the notice. In that case interest is imposed from the date of notice
336.20to the date of payment.
336.21EFFECTIVE DATE.This section is effective the day following final enactment.

336.22    Sec. 15. Minnesota Statutes 2012, section 297G.09, subdivision 8, is amended to read:
336.23    Subd. 8. Interest. The amount of tax not timely paid, together with any penalty
336.24imposed by this chapter, bears interest at the rate specified in section 270C.40 from the
336.25time the tax should have been paid until paid. Any penalty imposed by this chapter bears
336.26interest from the date provided in section 270C.40, subdivision 3, to the date of payment
336.27of the penalty. Any interest and penalty is added to the tax and collected as a part of it.
336.28EFFECTIVE DATE.This section is effective the day following final enactment.

336.29    Sec. 16. Minnesota Statutes 2012, section 297G.17, subdivision 7, is amended to read:
337.1    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297G.18,
337.2subdivisions 2 to 7, bears interest from the date the return or payment was required to be
337.3filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
337.4date of payment of the penalty.
337.5(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
337.6ten days from the date of the notice. In that case interest is imposed from the date of notice
337.7to the date of payment.
337.8EFFECTIVE DATE.This section is effective the day following final enactment.

337.9    Sec. 17. Minnesota Statutes 2012, section 297I.80, subdivision 1, is amended to read:
337.10    Subdivision 1. Payable to commissioner. (a) When interest is required under this
337.11section, interest is computed at the rate specified in section 270C.40.
337.12(b) If a tax or surcharge is not paid within the time named by law for payment, the
337.13unpaid tax or surcharge bears interest from the date the tax or surcharge should have been
337.14paid until the date the tax or surcharge is paid.
337.15(c) Whenever a taxpayer is liable for additional tax or surcharge because of a
337.16redetermination by the commissioner or other reason, the additional tax or surcharge
337.17bears interest from the time the tax or surcharge should have been paid until the date the
337.18tax or surcharge is paid.
337.19(d) A penalty bears interest from the date the return or payment was required to be
337.20filed or paid provided in section 270C.40, subdivision 3, to the date of payment of the
337.21penalty.
337.22EFFECTIVE DATE.This section is effective the day following final enactment.

337.23    Sec. 18. Minnesota Statutes 2012, section 469.319, subdivision 4, is amended to read:
337.24    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
337.25chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
337.26file an amended return with the commissioner of revenue and pay any taxes required
337.27to be repaid within 30 days after becoming subject to repayment under this section.
337.28The amount required to be repaid is determined by calculating the tax for the period or
337.29periods for which repayment is required without regard to the exemptions and credits
337.30allowed under section 469.315.
337.31    (b) For the repayment of taxes imposed under chapter 297B, a business must pay any
337.32taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of
337.33revenue, within 30 days after becoming subject to repayment under this section.
338.1    (c) For the repayment of property taxes, the county auditor shall prepare a tax
338.2statement for the business, applying the applicable tax extension rates for each payable
338.3year and provide a copy to the business and to the taxpayer of record. The business must
338.4pay the taxes to the county treasurer within 30 days after receipt of the tax statement. The
338.5business or the taxpayer of record may appeal the valuation and determination of the
338.6property tax to the Tax Court within 30 days after receipt of the tax statement.
338.7    (d) The provisions of chapters 270C and 289A relating to the commissioner's
338.8authority to audit, assess, and collect the tax and to hear appeals are applicable to the
338.9repayment required under paragraphs (a) and (b). The commissioner may impose civil
338.10penalties as provided in chapter 289A, and the additional tax and penalties are subject
338.11to interest at the rate provided in section 270C.40,. The additional tax shall bear interest
338.12 from 30 days after becoming subject to repayment under this section until the date the
338.13tax is paid. Any penalty imposed pursuant to this section shall bear interest from the date
338.14provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
338.15    (e) If a property tax is not repaid under paragraph (c), the county treasurer shall
338.16add the amount required to be repaid to the property taxes assessed against the property
338.17for payment in the year following the year in which the auditor provided the statement
338.18under paragraph (c).
338.19    (f) For determining the tax required to be repaid, a reduction of a state or local sales or
338.20use tax is deemed to have been received on the date that the good or service was purchased
338.21or first put to a taxable use. In the case of an income tax or franchise tax, including the
338.22credit payable under section 469.318, a reduction of tax is deemed to have been received
338.23for the two most recent tax years that have ended prior to the date that the business became
338.24subject to repayment under this section. In the case of a property tax, a reduction of tax is
338.25deemed to have been received for the taxes payable in the year that the business became
338.26subject to repayment under this section and for the taxes payable in the prior year.
338.27    (g) The commissioner may assess the repayment of taxes under paragraph (d) any
338.28time within two years after the business becomes subject to repayment under subdivision
338.291, or within any period of limitations for the assessment of tax under section 289A.38,
338.30whichever period is later. The county auditor may send the statement under paragraph
338.31(c) any time within three years after the business becomes subject to repayment under
338.32subdivision 1.
338.33    (h) A business is not entitled to any income tax or franchise tax benefits, including
338.34refundable credits, for any part of the year in which the business becomes subject to
338.35repayment under this section nor for any year thereafter. Property is not exempt from tax
338.36under section 272.02, subdivision 64, for any taxes payable in the year following the year
339.1in which the property became subject to repayment under this section nor for any year
339.2thereafter. A business is not eligible for any sales tax benefits beginning with goods
339.3or services purchased or first put to a taxable use on the day that the business becomes
339.4subject to repayment under this section.
339.5EFFECTIVE DATE.This section is effective the day following final enactment.

339.6    Sec. 19. Minnesota Statutes 2012, section 469.340, subdivision 4, is amended to read:
339.7    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
339.8chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
339.9file an amended return with the commissioner of revenue and pay any taxes required to be
339.10repaid within 30 days after ceasing to do business in the zone. The amount required to be
339.11repaid is determined by calculating the tax for the period or periods for which repayment
339.12is required without regard to the exemptions and credits allowed under section 469.336.
339.13(b) For the repayment of property taxes, the county auditor shall prepare a tax
339.14statement for the business, applying the applicable tax extension rates for each payable
339.15year and provide a copy to the business. The business must pay the taxes to the county
339.16treasurer within 30 days after receipt of the tax statement. The taxpayer may appeal the
339.17valuation and determination of the property tax to the Tax Court within 30 days after
339.18receipt of the tax statement.
339.19(c) The provisions of chapters 270C and 289A relating to the commissioner's
339.20authority to audit, assess, and collect the tax and to hear appeals are applicable to the
339.21repayment required under paragraph (a). The commissioner may impose civil penalties as
339.22provided in chapter 289A, and the additional tax and penalties are subject to interest at the
339.23rate provided in section 270C.40,. The additional tax shall bear interest from 30 days after
339.24ceasing to do business in the biotechnology and health sciences industry zone until the
339.25date the tax is paid. Any penalty imposed pursuant to this section shall bear interest from
339.26the date provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
339.27(d) If a property tax is not repaid under paragraph (b), the county treasurer shall add
339.28the amount required to be repaid to the property taxes assessed against the property for
339.29payment in the year following the year in which the treasurer discovers that the business
339.30ceased to operate in the biotechnology and health sciences industry zone.
339.31(e) For determining the tax required to be repaid, a tax reduction is deemed to have
339.32been received on the date that the tax would have been due if the taxpayer had not been
339.33entitled to the exemption, or on the date a refund was issued for a refundable credit.
339.34(f) The commissioner may assess the repayment of taxes under paragraph (c) any
339.35time within two years after the business ceases to operate in the biotechnology and health
340.1sciences industry zone, or within any period of limitations for the assessment of tax under
340.2section 289A.38, whichever period is later.
340.3EFFECTIVE DATE.This section is effective the day following final enactment.