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


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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

111.19    Sec. 37. Minnesota Statutes 2012, section 290.21, subdivision 4, is amended to read:
111.20    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
111.21of dividends received by a corporation during the taxable year from another corporation,
111.22in which the recipient owns 20 percent or more of the stock, by vote and value, not
111.23including stock described in section 1504(a)(4) of the Internal Revenue Code when the
111.24corporate stock with respect to which dividends are paid does not constitute the stock in
111.25trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
111.26constitute property held by the taxpayer primarily for sale to customers in the ordinary
111.27course of the taxpayer's trade or business, or when the trade or business of the taxpayer
111.28does not consist principally of the holding of the stocks and the collection of the income
111.29and gains therefrom; and
111.30    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
111.31an affiliated company transferred in an overall plan of reorganization and the dividend
111.32is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
111.33amended through December 31, 1989;
111.34    (ii) the remaining 20 percent of dividends if the dividends are received from a
111.35corporation which is subject to tax under section 290.36 and which is a member of an
112.1affiliated group of corporations as defined by the Internal Revenue Code and the dividend
112.2is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
112.3amended through December 31, 1989, or is deducted under an election under section
112.4243(b) of the Internal Revenue Code; or
112.5    (iii) the remaining 20 percent of the dividends if the dividends are received from a
112.6property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
112.7member of an affiliated group of corporations as defined by the Internal Revenue Code
112.8and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
112.91.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
112.10under an election under section 243(b) of the Internal Revenue Code.
112.11    (b) Seventy percent of dividends received by a corporation during the taxable year
112.12from another corporation in which the recipient owns less than 20 percent of the stock,
112.13by vote or value, not including stock described in section 1504(a)(4) of the Internal
112.14Revenue Code when the corporate stock with respect to which dividends are paid does not
112.15constitute the stock in trade of the taxpayer, or does not constitute property held by the
112.16taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
112.17business, or when the trade or business of the taxpayer does not consist principally of the
112.18holding of the stocks and the collection of income and gain therefrom.
112.19    (c) The dividend deduction provided in this subdivision shall be allowed only with
112.20respect to dividends that are included in a corporation's Minnesota taxable net income
112.21for the taxable year.
112.22    The dividend deduction provided in this subdivision does not apply to a dividend
112.23from a corporation which, for the taxable year of the corporation in which the distribution
112.24is made or for the next preceding taxable year of the corporation, is a corporation exempt
112.25from tax under section 501 of the Internal Revenue Code.
112.26The dividend deduction provided in this subdivision does not apply to a dividend
112.27received from a real estate investment trust, as defined in section 856 of the Internal
112.28Revenue Code.
112.29    The dividend deduction provided in this subdivision applies to the amount of
112.30regulated investment company dividends only to the extent determined under section
112.31854(b) of the Internal Revenue Code.
112.32    The dividend deduction provided in this subdivision shall not be allowed with
112.33respect to any dividend for which a deduction is not allowed under the provisions of
112.34section 246(c) of the Internal Revenue Code.
112.35    (d) If dividends received by a corporation that does not have nexus with Minnesota
112.36under the provisions of Public Law 86-272 are included as income on the return of
113.1an affiliated corporation permitted or required to file a combined report under section
113.2290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the
113.3determination as to whether the trade or business of the corporation consists principally
113.4of the holding of stocks and the collection of income and gains therefrom shall be made
113.5with reference to the trade or business of the affiliated corporation having a nexus with
113.6Minnesota.
113.7    (e) The deduction provided by this subdivision does not apply if the dividends are
113.8paid by a FSC as defined in section 922 of the Internal Revenue Code.
113.9    (f) If one or more of the members of the unitary group whose income is included on
113.10the combined report received a dividend, the deduction under this subdivision for each
113.11member of the unitary business required to file a return under this chapter is the product
113.12of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
113.13allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
113.14income apportionable to this state for the taxable year under section 290.191 or 290.20.
113.15EFFECTIVE DATE.This section is effective for taxable years beginning after
113.16December 31, 2012.

113.17    Sec. 38. Minnesota Statutes 2012, section 290A.03, subdivision 15, as amended by
113.18Laws 2013, chapter 3, section 5, is amended to read:
113.19    Subd. 15. Internal Revenue Code. For taxable years beginning before January 1,
113.202012, and after December 31, 2012, "Internal Revenue Code" means the Internal Revenue
113.21Code of 1986, as amended through April 14, 2011; and for taxable years beginning after
113.22December 31, 2011, and before January 1, 2013, "Internal Revenue Code" means the
113.23Internal Revenue Code of 1986, as amended through January 3, 2013.
113.24EFFECTIVE DATE.This section is effective for property tax refunds based on
113.25property taxes payable after December 31, 2013, and rent paid after December 31, 2012.

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

114.6    Sec. 40. ESTIMATED TAXES; EXCEPTIONS.
114.7No addition to tax, penalties, or interest may be made under Minnesota Statutes,
114.8section 289A.25, for any period before September 15, 2013, with respect to an
114.9underpayment of estimated tax, to the extent that the underpayment was created or
114.10increased by the increase in income tax rates under this article.
114.11EFFECTIVE DATE.This section is effective for taxable years beginning after
114.12December 31, 2012.

114.13    Sec. 41. REPEALER.
114.14Minnesota Statutes 2012, sections 290.01, subdivision 6b; 290.06, subdivision 22a;
114.15290.0672; and 290.0921, subdivision 7, are repealed.
114.16EFFECTIVE DATE.This section is effective for taxable years beginning after
114.17December 31, 2012.


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

115.1    Sec. 2. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
115.2    Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
115.3terms used in this chapter shall have the following meanings:
115.4    (1) "Commissioner" means the commissioner of revenue or any person to whom the
115.5commissioner has delegated functions under this chapter.
115.6    (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
115.7and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
115.8    (3) "Internal Revenue Code" means the United States Internal Revenue Code of
115.91986, as amended through April 14, 2011 January 3, 2013, but without regard to the
115.10provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law
115.11111-312, and section 301(c) of Public Law 111-312 section 2011, paragraph (f), of the
115.12Internal Revenue Code.
115.13    (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
115.14defined by section 2011(b)(3) of the Internal Revenue Code, plus
115.15(i) the amount of deduction for state death taxes allowed under section 2058 of the
115.16Internal Revenue Code;
115.17(ii) the amount of taxable gifts, as defined in section 292.16, and made by the
115.18decedent within three years of the decedent's date of death; less
115.19(ii) (iii)(A) the value of qualified small business property under section 291.03,
115.20subdivision 9 , and the value of qualified farm property under section 291.03, subdivision
115.2110 , or (B) $4,000,000, whichever is less.
115.22    (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
115.23excluding therefrom any property included therein which has its situs outside Minnesota,
115.24and (b) including therein any property omitted from the federal gross estate which is
115.25includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
115.26authorities.
115.27    (6) "Nonresident decedent" means an individual whose domicile at the time of
115.28death was not in Minnesota.
115.29    (7) "Personal representative" means the executor, administrator or other person
115.30appointed by the court to administer and dispose of the property of the decedent. If there
115.31is no executor, administrator or other person appointed, qualified, and acting within this
115.32state, then any person in actual or constructive possession of any property having a situs in
115.33this state which is included in the federal gross estate of the decedent shall be deemed
115.34to be a personal representative to the extent of the property and the Minnesota estate tax
115.35due with respect to the property.
116.1    (8) "Resident decedent" means an individual whose domicile at the time of death
116.2was in Minnesota.
116.3    (9) "Situs of property" means, with respect to:
116.4    (i) real property, the state or country in which it is located; with respect to
116.5    (ii) tangible personal property, the state or country in which it was normally kept or
116.6located at the time of the decedent's death or for a gift of tangible personal property within
116.7three years of death, the state or country in which it was normally kept or located when
116.8the gift was executed; and with respect to
116.9    (iii) intangible personal property, the state or country in which the decedent was
116.10domiciled at death or for a gift of intangible personal property within three years of death,
116.11the state or country in which the decedent was domiciled when the gift was executed.
116.12    For a nonresident decedent with an ownership interest in a pass-through entity
116.13with assets that include real or tangible personal property, situs of the real or tangible
116.14personal property is determined as if the pass-through entity does not exist and the real
116.15or tangible personal property is personally owned by the decedent. If the pass-through
116.16entity is owned by a person or persons in addition to the decedent, ownership of the
116.17property is attributed to the decedent in proportion to the decedent's capital ownership
116.18share of the pass-through entity.
116.19(10) "Pass-through entity" includes the following:
116.20(i) an entity electing S corporation status under section 1362 of the Internal Revenue
116.21Code;
116.22(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
116.23(iii) a single-member limited liability company or similar entity, regardless of
116.24whether it is taxed as an association or is disregarded for federal income tax purposes
116.25under Code of Federal Regulations, title 26, section 301.7701-3; or
116.26(iv) a trust to the extent the property is includible in the decedent's federal gross estate.
116.27EFFECTIVE DATE.This section is effective for decedents dying after December
116.2831, 2012.

116.29    Sec. 3. Minnesota Statutes 2012, section 291.03, subdivision 1, is amended to read:
116.30    Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
116.31proportion of the maximum credit for state death taxes computed under section 2011 of
116.32the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal
116.33adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal
116.34gross estate. The tax is reduced by:
117.1    (1) the gift tax paid by the decedent under section 292.17 on gifts included in the
117.2Minnesota adjusted gross estate and not subtracted as qualified farm or small business
117.3property; and
117.4    (2) any credit allowed under subdivision 1c.
117.5    (b) The tax determined under this subdivision must not be greater than the sum of
117.6the following amounts multiplied by a fraction, the numerator of which is the Minnesota
117.7gross estate and the denominator of which is the federal gross estate:
117.8    (1) the rates and brackets under section 2001(c) of the Internal Revenue Code
117.9multiplied by the sum of:
117.10    (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
117.11    (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
117.12Code; less
117.13(iii) the lesser of (A) the sum of the value of qualified small business property
117.14under subdivision 9, and the value of qualified farm property under subdivision 10, or
117.15(B) $4,000,000; less
117.16    (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
117.17Code; and less
117.18    (3) the federal credit allowed under section 2010 of the Internal Revenue Code.
117.19    (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
117.20Revenue Code of 1986, as amended through December 31, 2000.
117.21EFFECTIVE DATE.This section is effective for decedents dying after December
117.2231, 2012.

117.23    Sec. 4. Minnesota Statutes 2012, section 291.03, is amended by adding a subdivision
117.24to read:
117.25    Subd. 1c. Nonresident decedent tax credit. (a) The estate of a nonresident
117.26decedent that is subject to tax under this chapter on the value of Minnesota situs property
117.27held in a pass-through entity is allowed a credit against the tax due under this section
117.28equal to the lesser of:
117.29(1) the amount of estate or inheritance tax paid to another state that is attributable to
117.30the Minnesota situs property held in the pass-through entity; or
117.31(2) the amount of tax paid under this section attributable to the Minnesota situs
117.32property held in the pass-through entity.
117.33(b) The amount of tax attributable to the Minnesota situs property held in the
117.34pass-through entity must be determined by the increase in the estate or inheritance tax that
118.1results from including the market value of the property in the estate or treating the value
118.2as a taxable inheritance to the recipient of the property.
118.3EFFECTIVE DATE.This section is effective for decedents dying after December
118.431, 2012.

118.5    Sec. 5. Minnesota Statutes 2012, section 291.03, subdivision 8, is amended to read:
118.6    Subd. 8. Definitions. (a) For purposes of this section, the following terms have the
118.7meanings given in this subdivision.
118.8(b) "Family member" means a family member as defined in section 2032A(e)(2) of
118.9the Internal Revenue Code, or a trust whose present beneficiaries are all family members
118.10as defined in section 2032A(e)(2) of the Internal Revenue Code.
118.11(c) "Qualified heir" means a family member who acquired qualified property from
118.12 upon the death of the decedent and satisfies the requirement under subdivision 9, clause
118.13(6) (7), or subdivision 10, clause (4) (5), for the property.
118.14(d) "Qualified property" means qualified small business property under subdivision
118.159 and qualified farm property under subdivision 10.
118.16EFFECTIVE DATE.This section is effective retroactively for estates of decedents
118.17dying after June 30, 2011.

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

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

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

121.9    Sec. 9. [292.16] DEFINITIONS.
121.10(a) For purposes of this chapter, the following definitions apply.
121.11(b) The definitions of terms defined in section 291.005 apply.
121.12(c) "Resident" has the meaning given in section 290.01.
121.13(d) "Taxable gifts" means:
121.14(1) the transfers by gift which are included in taxable gifts for federal gift tax
121.15purposes under the following sections of the Internal Revenue Code:
121.16(i) section 2503;
121.17(ii) sections 2511 to 2514; and
121.18(iii) sections 2516 to 2519; less
121.19(2) the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.
121.20EFFECTIVE DATE.This section is effective for taxable gifts made after June
121.2130, 2013.

121.22    Sec. 10. [292.17] GIFT TAX.
121.23    Subdivision 1. Imposition. (a) A tax is imposed on the transfer of property by gift
121.24by any individual resident or nonresident in an amount equal to ten percent of the amount
121.25of the taxable gift.
121.26(b) The donor is liable for payment of the tax. If the gift tax is not paid when due,
121.27the donee of any gift is personally liable for the tax to the extent of the value of the gift.
121.28    Subd. 2. Lifetime credit. A credit is allowed against the tax imposed under this
121.29section equal to $100,000. This credit applies to the cumulative amount of taxable gifts
121.30made by the donor during the donor's lifetime.
121.31    Subd. 3. Out-of-state gifts. Taxable gifts exclude the transfer of:
121.32(1) real property located outside of this state;
122.1(2) tangible personal property that was normally kept at a location outside of the
122.2state on the date the gift was executed; and
122.3(3) intangible personal property made by an individual who is not a resident.
122.4EFFECTIVE DATE.This section is effective for taxable gifts made after June
122.530, 2013.

122.6    Sec. 11. [292.18] RETURNS.
122.7(a) Any individual who makes a taxable gift during the taxable year shall file a gift
122.8tax return in the form and manner prescribed by the commissioner.
122.9(b) If the donor dies before filing the return, the executor of the donor's will or
122.10the administrator of the donor's estate shall file the return. If the donor becomes legally
122.11incompetent before filing the return, the guardian or conservator shall file the return.
122.12(c) The return must include:
122.13(1) each gift made during the calendar year which is to be included in computing the
122.14taxable gifts;
122.15(2) the deductions claimed and allowable under section 292.16, paragraph (d),
122.16clause (2);
122.17(3) a description of the gift, and the donee's name, address, and Social Security
122.18number;
122.19(4) the fair market value of gifts not made in money; and
122.20(5) any other information the commissioner requires to administer the gift tax.
122.21EFFECTIVE DATE.This section is effective for taxable gifts made after June
122.2230, 2013.

122.23    Sec. 12. [292.19] FILING REQUIREMENTS.
122.24Gift tax returns must be filed by the April 15 following the close of the calendar
122.25year, except if a gift is made during the calendar year in which the donor dies, the return
122.26for the donor must be filed by the last date, including extensions, for filing the gift tax
122.27return for federal gift tax purposes for the donor.
122.28EFFECTIVE DATE.This section is effective for taxable gifts made after June
122.2930, 2013.

122.30    Sec. 13. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
122.31The commissioner may require the donor or the donee to show the property subject to
122.32the tax under section 292.17 to the commissioner upon demand and may employ a suitable
123.1person to appraise the property. The donor shall submit a declaration, in a form prescribed
123.2by the commissioner and including any certification required by the commissioner, that the
123.3property shown by the donor on the gift tax return includes all of the property transferred by
123.4gift for the calendar year and not deductible under section 292.16, paragraph (d), clause (2).
123.5EFFECTIVE DATE.This section is effective for taxable gifts made after June
123.630, 2013.

123.7    Sec. 14. [292.21] ADMINISTRATIVE PROVISIONS.
123.8    Subdivision 1. Payment of tax; penalty for late payment. The tax imposed under
123.9section 292.17 is due and payable to the commissioner by the April 15 following the close
123.10of the calendar year during which the gift was made. The return required under section
123.11292.19 must be included with the payment. If a taxable gift is made during the calendar
123.12year in which the donor dies, the due date is the last date, including extensions, for filing
123.13the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the
123.14tax due within the time specified under this section, a penalty applies equal to ten percent
123.15of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty
123.16bear interest at the rate under section 270C.40 from the due date of the return.
123.17    Subd. 2. Extensions. The commissioner may, for good cause, extend the time for
123.18filing a gift tax return, if a written request is filed with a tentative return accompanied by a
123.19payment of the tax, which is estimated in the tentative return, on or before the last day for
123.20filing the return. Any person to whom an extension is granted must pay, in addition to the
123.21tax, interest at the rate under section 270C.40 from the date on which the tax would have
123.22been due without the extension.
123.23    Subd. 3. Changes in federal gift tax. If the amount of a taxpayer's taxable gifts
123.24for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any
123.25calendar year, is changed or corrected by the Internal Revenue Service or other officer
123.26of the United States or other competent authority, the taxpayer shall report the change or
123.27correction in federal taxable gifts within 180 days after the final determination of the change
123.28or correction, and concede the accuracy of the determination or provide a letter detailing
123.29how the federal determination is incorrect or does not change the Minnesota gift tax. Any
123.30taxpayer filing an amended federal gift tax return shall also file within 180 days an amended
123.31return under this chapter and shall include any information the commissioner requires. The
123.32time for filing the report or amended return may be extended by the commissioner upon due
123.33cause shown. Notwithstanding any limitation of time in this chapter, if, upon examination,
123.34the commissioner finds that the taxpayer is liable for the payment of an additional tax, the
123.35commissioner shall, within a reasonable time from the receipt of the report or amended
124.1return, notify the taxpayer of the amount of additional tax, together with interest computed
124.2at the rate under section 270C.40 from the date when the original tax was due and payable.
124.3Within 30 days of the mailing of the notice, the taxpayer shall pay the commissioner the
124.4amount of the additional tax and interest. If, upon examination of the report or amended
124.5return and related information, the commissioner finds that the taxpayer has overpaid the
124.6tax due the state, the commissioner shall refund the overpayment to the taxpayer.
124.7    Subd. 4. Application of federal rules. In administering the tax under this chapter,
124.8the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal
124.9Revenue Code. The words "secretary or his delegate," as used in those sections of the
124.10Internal Revenue Code, mean the commissioner.
124.11EFFECTIVE DATE.This section is effective for taxable gifts made after June
124.1230, 2013.

124.13    Sec. 15. [292.22] CREDIT AGAINST ESTATE TAX.
124.14A credit is allowed against the estate tax imposed under chapter 291 in the amount
124.15of any tax imposed and paid under this chapter for a gift includable in the Minnesota
124.16adjusted taxable estate of the donor under section 291.005.
124.17EFFECTIVE DATE.This section is effective for taxable gifts made after June
124.1830, 2013.


124.21    Section 1. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:
124.22    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
124.23to, each of the transactions listed in this subdivision.
124.24    (b) Sale and purchase include:
124.25    (1) any transfer of title or possession, or both, of tangible personal property, whether
124.26absolutely or conditionally, for a consideration in money or by exchange or barter; and
124.27    (2) the leasing of or the granting of a license to use or consume, for a consideration
124.28in money or by exchange or barter, tangible personal property, other than a manufactured
124.29home used for residential purposes for a continuous period of 30 days or more.
124.30    (c) Sale and purchase include the production, fabrication, printing, or processing of
124.31tangible personal property for a consideration for consumers who furnish either directly or
124.32indirectly the materials used in the production, fabrication, printing, or processing.
125.1    (d) Sale and purchase include the preparing for a consideration of food.
125.2Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
125.3to, the following:
125.4    (1) prepared food sold by the retailer;
125.5    (2) soft drinks;
125.6    (3) candy;
125.7    (4) dietary supplements; and
125.8    (5) all food sold through vending machines.
125.9    (e) A sale and a purchase includes the furnishing for a consideration of electricity,
125.10gas, water, or steam for use or consumption within this state.
125.11    (f) A sale and a purchase includes the transfer for a consideration of prewritten
125.12computer software whether delivered electronically, by load and leave, or otherwise.
125.13    (g) A sale and a purchase includes the furnishing for a consideration of the following
125.14services:
125.15    (1) the privilege of admission to places of amusement, recreational areas, or athletic
125.16events, including seat licenses, the rental of box seats, suites, sky boxes, and similar
125.17facilities in stadiums and arenas and the making available of amusement devices, tanning
125.18facilities, reducing salons, steam baths, Turkish baths, health clubs, and spas or athletic
125.19facilities;
125.20    (2) lodging and related services by a hotel, rooming house, resort, campground,
125.21motel, or trailer camp, including furnishing the guest of the facility with access to
125.22telecommunication services, and the granting of any similar license to use real property in
125.23a specific facility, other than the renting or leasing of it for a continuous period of 30 days
125.24or more under an enforceable written agreement that may not be terminated without prior
125.25notice and including accommodations intermediary services provided in connection with
125.26other services provided under this clause;
125.27    (3) nonresidential parking services, whether on a contractual, hourly, or other
125.28periodic basis, except for parking at a meter;
125.29    (4) the granting of membership in a club, association, or other organization if:
125.30    (i) the club, association, or other organization makes available for the use of its
125.31members sports and athletic facilities, without regard to whether a separate charge is
125.32assessed for use of the facilities; and
125.33    (ii) use of the sports and athletic facility is not made available to the general public
125.34on the same basis as it is made available to members.
125.35Granting of membership means both onetime initiation fees and periodic membership
125.36dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
126.1squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
126.2swimming pools; and other similar athletic or sports facilities;
126.3    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
126.4material used in road construction; and delivery of concrete block by a third party if the
126.5delivery would be subject to the sales tax if provided by the seller of the concrete block; and
126.6    (6) services as provided in this clause:
126.7    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
126.8and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
126.9drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
126.10include services provided by coin operated facilities operated by the customer;
126.11    (ii) motor vehicle washing, waxing, and cleaning services, including services
126.12provided by coin operated facilities operated by the customer, and rustproofing,
126.13undercoating, and towing of motor vehicles;
126.14    (iii) building and residential cleaning, maintenance, and disinfecting services and
126.15pest control and exterminating services;
126.16    (iv) detective, security, burglar, fire alarm, and armored car services; but not including
126.17services performed within the jurisdiction they serve by off-duty licensed peace officers as
126.18defined in section 626.84, subdivision 1, or services provided by a nonprofit organization
126.19for monitoring and electronic surveillance of persons placed on in-home detention
126.20pursuant to court order or under the direction of the Minnesota Department of Corrections;
126.21    (v) pet grooming services;
126.22    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
126.23and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
126.24plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
126.25clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
126.26public utility lines. Services performed under a construction contract for the installation of
126.27shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
126.28    (vii) massages, except when provided by a licensed health care facility or
126.29professional or upon written referral from a licensed health care facility or professional for
126.30treatment of illness, injury, or disease; and
126.31    (viii) the furnishing of lodging, board, and care services for animals in kennels and
126.32other similar arrangements, but excluding veterinary and horse boarding services.
126.33    In applying the provisions of this chapter, the terms "tangible personal property"
126.34and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
126.35and the provision of these taxable services, unless specifically provided otherwise.
126.36Services performed by an employee for an employer are not taxable. Services performed
127.1by a partnership or association for another partnership or association are not taxable if
127.2one of the entities owns or controls more than 80 percent of the voting power of the
127.3equity interest in the other entity. Services performed between members of an affiliated
127.4group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
127.5group of corporations" means those entities that would be classified as members of an
127.6affiliated group as defined under United States Code, title 26, section 1504, disregarding
127.7the exclusions in section 1504(b).
127.8    For purposes of clause (5), "road construction" means construction of (1) public
127.9roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
127.10metropolitan area up to the point of the emergency response location sign.
127.11    (h) A sale and a purchase includes the furnishing for a consideration of tangible
127.12personal property or taxable services by the United States or any of its agencies or
127.13instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
127.14subdivisions.
127.15    (i) A sale and a purchase includes the furnishing for a consideration of
127.16telecommunications services, ancillary services associated with telecommunication
127.17services, cable television services, and direct satellite services. Telecommunication
127.18services include, but are not limited to, the following services, as defined in section
127.19297A.669 : air-to-ground radiotelephone service, mobile telecommunication service,
127.20postpaid calling service, prepaid calling service, prepaid wireless calling service, and
127.21private communication services. The services in this paragraph are taxed to the extent
127.22allowed under federal law.
127.23    (j) A sale and a purchase includes the furnishing for a consideration of installation if
127.24the installation charges would be subject to the sales tax if the installation were provided
127.25by the seller of the item being installed.
127.26    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
127.27to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
127.28the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
127.2959B.02, subdivision 11.
127.30EFFECTIVE DATE.This section is effective for sales made after June 30, 2013.

127.31    Sec. 2. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
127.32    Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
127.33purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
127.34course of business as defined in subdivision 21.
128.1    (b) A sale of property used by the owner only by leasing it to others or by holding it
128.2in an effort to lease it, and put to no use by the owner other than resale after the lease or
128.3effort to lease, is a sale of property for resale.
128.4    (c) A sale of master computer software that is purchased and used to make copies for
128.5sale or lease is a sale of property for resale.
128.6    (d) A sale of building materials, supplies, and equipment to owners, contractors,
128.7subcontractors, or builders for the erection of buildings or the alteration, repair, or
128.8improvement of real property is a retail sale in whatever quantity sold, whether the sale is
128.9for purposes of resale in the form of real property or otherwise.
128.10    (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
128.11for installation of the floor covering is a retail sale and not a sale for resale since a sale of
128.12floor covering which includes installation is a contract for the improvement of real property.
128.13    (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
128.14for installation of the items is a retail sale and not a sale for resale since a sale of
128.15shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
128.16the improvement of real property.
128.17    (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
128.18is not considered a sale of property for resale.
128.19    (h) A sale of tangible personal property utilized or employed in the furnishing or
128.20providing of services under subdivision 3, paragraph (g), clause (1), including, but not
128.21limited to, property given as promotional items, is a retail sale and is not considered a
128.22sale of property for resale.
128.23    (i) A sale of tangible personal property used in conducting lawful gambling under
128.24chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
128.25given as promotional items, is a retail sale and is not considered a sale of property for resale.
128.26    (j) Except as otherwise provided in this paragraph, a sale of machines, equipment,
128.27or devices that are used to furnish, provide, or dispense goods or services, including,
128.28but not limited to, coin-operated devices, is a retail sale and is not considered a sale of
128.29property for resale. A sale of coin-operated entertainment and amusement machines,
128.30including, but not limited to, fortune-telling machines, cranes, foosball and pool tables,
128.31video and pinball games, batting cages, rides, photo or video booths, and jukeboxes is a
128.32sale of property for resale.
128.33    (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
128.34payment becomes due under the terms of the agreement or the trade practices of the lessor
128.35or; (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, subdivision
128.3611 , but excluding vehicles with a manufacturer's gross vehicle weight rating greater than
129.110,000 pounds and rentals of vehicles for not more than 28 days, at the time the lease is
129.2executed; or (3) for rent-to-own or lease-to-own used vehicles where the lessee may
129.3purchase or return the vehicle at any time without penalty, at the time each payment is
129.4made under the terms of the agreement.
129.5    (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
129.6title or possession of the tangible personal property.
129.7    (m) A sale of a bundled transaction in which one or more of the products included
129.8in the bundle is a taxable product is a retail sale, except that if one of the products
129.9is a telecommunication service, ancillary service, Internet access, or audio or video
129.10programming service, and the seller has maintained books and records identifying through
129.11reasonable and verifiable standards the portions of the price that are attributable to the
129.12distinct and separately identifiable products, then the products are not considered part of a
129.13bundled transaction. For purposes of this paragraph:
129.14    (1) the books and records maintained by the seller must be maintained in the regular
129.15course of business, and do not include books and records created and maintained by the
129.16seller primarily for tax purposes;
129.17    (2) books and records maintained in the regular course of business include, but are
129.18not limited to, financial statements, general ledgers, invoicing and billing systems and
129.19reports, and reports for regulatory tariffs and other regulatory matters; and
129.20    (3) books and records are maintained primarily for tax purposes when the books
129.21and records identify taxable and nontaxable portions of the price, but the seller maintains
129.22other books and records that identify different prices attributable to the distinct products
129.23included in the same bundled transaction.
129.24    (n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
129.25body shop business is a retail sale and the sales tax is imposed on the gross receipts from the
129.26retail sale of the paint and materials. The motor vehicle repair or body shop that purchases
129.27motor vehicle repair paint and motor vehicle repair materials for resale must either:
129.28    (1) separately state each item of paint and each item of materials, and the sales price
129.29of each, on the invoice to the purchaser; or
129.30    (2) in order to calculate the sales price of the paint and materials, use a method
129.31which estimates the amount and monetary value of the paint and materials used in
129.32the repair of the motor vehicle by multiplying the number of labor hours by a rate of
129.33consideration for the paint and materials used in the repair of the motor vehicle following
129.34industry standard practices that fairly calculate the gross receipts from the retail sale of
129.35the motor vehicle repair paint and motor vehicle repair materials. An industry standard
129.36practice fairly calculates the gross receipts if the sales price of the paint and materials used
130.1or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid
130.2by the motor vehicle repair or body shop business. Under this clause, the invoice must
130.3either separately state the "paint and materials" as a single taxable item, or separately state
130.4"paint" as a taxable item and "materials" as a taxable item. This clause does not apply to
130.5wholesale transactions at an auto auction facility.
130.6    (o) A payment made to a cooperative electric association or public utility as a
130.7contribution in aid of construction is a contract for improvement to real property and
130.8is not a retail sale.
130.9EFFECTIVE DATE.This section is effective for sales and purchases made after
130.10June 30, 2013.

130.11    Sec. 3. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
130.12to read:
130.13    Subd. 49. Motor vehicle repair paint and motor vehicle repair materials. "Motor
130.14vehicle repair paint" means a substance composed of solid matter suspended in a liquid
130.15medium and applied as a protective or decorative coating to the surface of a motor vehicle in
130.16order to restore the motor vehicle to its original condition, and includes primer, body paint,
130.17clear coat, and paint thinner used to paint motor vehicles, as defined in section 297B.01.
130.18"Motor vehicle repair materials" means items, other than motor vehicle repair paint
130.19or motor vehicle parts, that become a part of a repaired motor vehicle or are consumed in
130.20repairing the motor vehicle at retail, and include abrasives, battery water, body filler or
130.21putty, bolts and nuts, brake fluid, buffing pads, chamois, cleaning compounds, degreasing
130.22compounds, glaze, grease, grinding discs, hydraulic jack oil, lubricants, masking tape,
130.23oxygen and acetylene, polishes, rags, razor blades, sandpaper, sanding discs, scuff pads,
130.24sealer, solder, solvents, striping tape, tack cloth, thinner, waxes, and welding rods. Motor
130.25vehicle repair materials do not include items that are not used directly on the motor vehicle,
130.26such as floor dry that is used to clean the shop, or cleaning compounds and rags that are
130.27used to clean tools, equipment, or the shop and are not used to clean the motor vehicle.
130.28EFFECTIVE DATE.This section is effective for sales and purchases made after
130.29June 30, 2013.

130.30    Sec. 4. Minnesota Statutes 2012, section 297A.64, subdivision 1, is amended to read:
130.31    Subdivision 1. Tax imposed. (a) A tax is imposed on the lease or rental in this
130.32state for not more than 28 days of a passenger automobile as defined in section 168.002,
130.33subdivision 24 , a van as defined in section 168.002, subdivision 40, or a pickup truck as
131.1defined in section 168.002, subdivision 26. The rate of tax is 6.2 9.2 percent of the sales
131.2price. The tax applies whether or not the vehicle is licensed in the state.
131.3(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
131.4corporation or similar entity, consisting of members who pay the organization for the
131.5use of a motor vehicle, if the organization:
131.6(1) owns or leases a fleet of vehicles of the type subject to the tax under paragraph (a)
131.7that are available to its members for use, priced on the basis of intervals of one hour or less;
131.8(2) parks its vehicles at unstaffed, self-service locations that are accessible to its
131.9members at any time; and
131.10(3) maintains its vehicles, insures its vehicles on behalf of its members, and
131.11purchases fuel for its fleet.
131.12EFFECTIVE DATE.This section is effective for sales and purchases made after
131.13June 30, 2013.

131.14    Sec. 5. Minnesota Statutes 2012, section 297A.64, subdivision 2, is amended to read:
131.15    Subd. 2. Fee imposed. (a) A fee equal to five percent of the sales price is imposed
131.16on leases or rentals of vehicles subject to the tax under subdivision 1, paragraph (a). The
131.17lessor on the invoice to the customer may designate the fee as "a fee imposed by the State
131.18of Minnesota for the registration of rental cars."
131.19(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
131.20corporation or similar entity, consisting of individual or group members who pay the
131.21organization for the use of a motor vehicle, if the organization:
131.22(1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1
131.23that are available to its members for use, priced on the basis of intervals of one hour or less;
131.24(2) parks its vehicles at unstaffed, self-service locations that are accessible at any
131.25time of the day;
131.26(3) maintains its vehicles, insures its vehicles on behalf of its members, and
131.27purchases fuel for its fleet; and
131.28(4) does not charge usage rates that decline on a per unit basis, whether specified
131.29based on distance or time exempt from the tax imposed under subdivision 1, paragraph (b).
131.30EFFECTIVE DATE.This section is effective for sales and purchases made after
131.31June 30, 2013.

131.32    Sec. 6. Minnesota Statutes 2012, section 297A.66, is amended by adding a subdivision
131.33to read:
132.1    Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
132.2means a person, whether an independent contractor or other representative, who directly
132.3or indirectly solicits business for the retailer.
132.4(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
132.5with a resident under which the resident, for a commission or other consideration, directly
132.6or indirectly refers potential customers, whether by a link on an Internet Web site, or
132.7otherwise, to the seller. This paragraph only applies if the total gross receipts are at least
132.8$10,000 in the 12-month period ending on the last day of the most recent calendar quarter
132.9before the calendar quarter in which the sale is made. For purposes of this paragraph,
132.10gross receipts means receipts from sales to customers located in the state who were
132.11referred to the retailer by all residents with this type of agreement with the retailer.
132.12(c) The presumption under paragraph (b) may be rebutted by proof that the resident
132.13with whom the seller has an agreement did not engage in any solicitation in the state
132.14on behalf of the retailer that would satisfy the nexus requirement of the United States
132.15Constitution during the 12-month period in question. Nothing in this section shall be
132.16construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
132.17representative for purposes of subdivision 1, paragraph (a).
132.18(d) For purposes of this paragraph, "resident" includes an individual who is a
132.19resident of this state, as defined in section 290.01, or a business that owns tangible
132.20personal property located in this state or has one or more employees providing services for
132.21the business in this state.
132.22(e) This subdivision does not apply to chapter 290 and does not expand or contract
132.23the jurisdiction to tax a trade or business under chapter 290.
132.24EFFECTIVE DATE.This section is effective for sales and purchases made after
132.25June 30, 2013.

132.26    Sec. 7. Minnesota Statutes 2012, section 297A.668, is amended by adding a
132.27subdivision to read:
132.28    Subd. 6a. Multiple points of use. (a) Notwithstanding the provisions of subdivisions
132.292 to 5, a business purchaser that is not a holder of a direct pay permit that knows at the
132.30time of its purchase of a digital good, computer software delivered electronically, or a
132.31service that the digital good, computer software delivered electronically, or service will be
132.32concurrently available for use in more than one jurisdiction shall deliver to the seller in
132.33conjunction with its purchase a multiple points of use exemption certificate disclosing
132.34this fact.
133.1(b) Upon receipt of the multiple points of use certificate, the seller is relieved of the
133.2obligation to collect, pay, or remit the applicable tax and the purchaser is obligated to
133.3collect, pay, or remit the applicable tax on a direct pay basis.
133.4(c) A purchaser delivering the multiple points of use exemption certificate may use
133.5any reasonable, but consistent and uniform, method of apportionment that is supported by
133.6the purchaser's business records as they exist at the time of the consummation of the sale.
133.7(d) The multiple points of use exemption certificate remains in effect for all future
133.8sales by the seller to the purchaser until it is revoked in writing, except as to the subsequent
133.9sale's specific apportionment that is governed by the principle of paragraph (c) and the
133.10facts existing at the time of the sale.
133.11(e) A holder of a direct pay permit is not required to deliver a multiple points of use
133.12exemption certificate to the seller. A direct pay permit holder shall follow the provisions
133.13of paragraph (c) in apportioning the tax due on a digital good, computer software delivered
133.14electronically, or a service that will be concurrently available for use in more than one
133.15jurisdiction.
133.16EFFECTIVE DATE.This section is effective for sales and purchases made after
133.17June 30, 2013.

133.18    Sec. 8. Minnesota Statutes 2012, section 297A.67, subdivision 7, is amended to read:
133.19    Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical
133.20devices for human use are exempt:
133.21    (1) drugs, including over-the-counter drugs;
133.22    (2) single-use finger-pricking devices for the extraction of blood and other single-use
133.23devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
133.24diabetes;
133.25    (3) insulin and medical oxygen for human use, regardless of whether prescribed
133.26or sold over the counter;
133.27    (4) prosthetic devices;
133.28    (5) durable medical equipment for home use only;
133.29    (6) mobility enhancing equipment;
133.30    (7) prescription corrective eyeglasses; and
133.31    (8) kidney dialysis equipment, including repair and replacement parts.
133.32(b) Items purchased in transactions covered by:
133.33(1) Medicare as defined under title XVIII of the Social Security Act, United States
133.34Code, title 42, sections 1395, et seq.; or
134.1(2) Medicaid as defined under title XIX of the Social Security Act, United States
134.2Code, title 42, sections 1396, et seq.
134.3    (b) (c) For purposes of this subdivision:
134.4    (1) "Drug" means a compound, substance, or preparation, and any component of
134.5a compound, substance, or preparation, other than food and food ingredients, dietary
134.6supplements, or alcoholic beverages that is:
134.7    (i) recognized in the official United States Pharmacopoeia, official Homeopathic
134.8Pharmacopoeia of the United States, or official National Formulary, and supplement
134.9to any of them;
134.10    (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
134.11of disease; or
134.12    (iii) intended to affect the structure or any function of the body.
134.13    (2) "Durable medical equipment" means equipment, including repair and
134.14replacement parts and all accessories and supplies, including single patient use items
134.15required for the effective use of the durable medical equipment device, but not including
134.16mobility enhancing equipment, that:
134.17    (i) can withstand repeated use;
134.18    (ii) is primarily and customarily used to serve a medical purpose;
134.19    (iii) generally is not useful to a person in the absence of illness or injury; and
134.20    (iv) is not worn in or on the body.
134.21    For purposes of this clause, "repair and replacement parts" includes all components
134.22or attachments used in conjunction with the durable medical equipment, but does not
134.23include including repair and replacement parts which are for single patient use only.
134.24    (3) "Mobility enhancing equipment" means equipment, including repair and
134.25replacement parts, but not including durable medical equipment, that:
134.26    (i) is primarily and customarily used to provide or increase the ability to move from
134.27one place to another and that is appropriate for use either in a home or a motor vehicle;
134.28    (ii) is not generally used by persons with normal mobility; and
134.29    (iii) does not include any motor vehicle or equipment on a motor vehicle normally
134.30provided by a motor vehicle manufacturer.
134.31    (4) "Over-the-counter drug" means a drug that contains a label that identifies the
134.32product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The
134.33label must include a "drug facts" panel or a statement of the active ingredients with a list of
134.34those ingredients contained in the compound, substance, or preparation. Over-the-counter
134.35drugs do not include grooming and hygiene products, regardless of whether they otherwise
135.1meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
135.2shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
135.3    (5) "Prescribed" and "prescription" means a direction in the form of an order,
135.4formula, or recipe issued in any form of oral, written, electronic, or other means of
135.5transmission by a duly licensed health care professional.
135.6    (6) "Prosthetic device" means a replacement, corrective, or supportive device,
135.7including repair and replacement parts, and all necessary accessories, supplies, and items
135.8required for the effective use of the prosthetic device, worn on or in the body to:
135.9    (i) artificially replace a missing portion of the body;
135.10    (ii) prevent or correct physical deformity or malfunction; or
135.11    (iii) support a weak or deformed portion of the body.
135.12Prosthetic device does not include corrective eyeglasses.
135.13    (7) "Kidney dialysis equipment" means equipment that:
135.14    (i) is used to remove waste products that build up in the blood when the kidneys are
135.15not able to do so on their own; and
135.16    (ii) can withstand repeated use, including multiple use by a single patient,
135.17notwithstanding the provisions of clause (2).
135.18(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of
135.19the item purchased in the transaction is paid for or reimbursed by the federal government
135.20or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private
135.21insurance company administering the Medicare or Medicaid program on behalf of the
135.22federal government or the state of Minnesota, or by a managed care organization for the
135.23benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu
135.24of conventional Medicare or Medicaid coverage pursuant to agreement with the federal
135.25government or the state of Minnesota.
135.26EFFECTIVE DATE.This section is effective for sales and purchases made after
135.27June 30, 2013.

135.28    Sec. 9. Minnesota Statutes 2012, section 297A.70, subdivision 4, is amended to read:
135.29    Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
135.30(b), to the following "nonprofit organizations" are exempt:
135.31(1) a corporation, society, association, foundation, or institution organized and
135.32operated exclusively for charitable, religious, or educational purposes if the item
135.33purchased is used in the performance of charitable, religious, or educational functions; and
135.34(2) any senior citizen group or association of groups that:
136.1(i) in general limits membership to persons who are either age 55 or older, or
136.2physically disabled;
136.3(ii) is organized and operated exclusively for pleasure, recreation, and other
136.4nonprofit purposes, not including housing, no part of the net earnings of which inures to
136.5the benefit of any private shareholders; and
136.6(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
136.7For purposes of this subdivision, charitable purpose includes the maintenance of a
136.8cemetery owned by a religious organization.
136.9(b) This exemption does not apply to the following sales:
136.10(1) building, construction, or reconstruction materials purchased by a contractor
136.11or a subcontractor as a part of a lump-sum contract or similar type of contract with a
136.12guaranteed maximum price covering both labor and materials for use in the construction,
136.13alteration, or repair of a building or facility;
136.14(2) construction materials purchased by tax-exempt entities or their contractors to
136.15be used in constructing buildings or facilities that will not be used principally by the
136.16tax-exempt entities; and
136.17(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
136.18(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
136.19297A.67, subdivision 2 , except wine purchased by an established religious organization
136.20for sacramental purposes or as allowed under subdivision 9a; and
136.21(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
136.22as provided in paragraph (c).
136.23(c) This exemption applies to the leasing of a motor vehicle as defined in section
136.24297B.01, subdivision 11 , only if the vehicle is:
136.25(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
136.26passenger automobile, as defined in section 168.002, if the automobile is designed and
136.27used for carrying more than nine persons including the driver; and
136.28(2) intended to be used primarily to transport tangible personal property or
136.29individuals, other than employees, to whom the organization provides service in
136.30performing its charitable, religious, or educational purpose.
136.31(d) A limited liability company also qualifies for exemption under this subdivision if
136.32(1) it consists of a sole member that would qualify for the exemption, and (2) the items
136.33purchased qualify for the exemption.
136.34EFFECTIVE DATE.This section is effective retroactively for sales and purchases
136.35made after June 30, 2012.

137.1    Sec. 10. Minnesota Statutes 2012, section 297A.70, subdivision 8, is amended to read:
137.2    Subd. 8. Regionwide Public safety radio communication system systems;
137.3products and services. (a) Products and services including, but not limited to, end user
137.4equipment used for construction, ownership, operation, maintenance, and enhancement
137.5of the backbone system of the regionwide public safety radio communication system
137.6established under sections 403.21 to 403.40, are exempt. For purposes of this subdivision,
137.7backbone system is defined in section 403.21, subdivision 9. This subdivision is effective
137.8for purchases, sales, storage, use, or consumption for use in the first and second phases of
137.9the system, as defined in section 403.21, subdivisions 3, 10, and 11, that portion of the
137.10third phase of the system that is located in the southeast district of the State Patrol and
137.11the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system
137.12that is located in Itasca County.
137.13(b) Products and services, including, but not limited to, end-user equipment used
137.14for construction, ownership, operation, maintenance, and enhancement of public safety
137.15radio communication systems not already exempt under paragraph (a), including public
137.16safety radio dispatch centers, are exempt.
137.17EFFECTIVE DATE.This section is effective for sales and purchases made after
137.18June 30, 2013.

137.19    Sec. 11. Minnesota Statutes 2012, section 297A.70, is amended by adding a
137.20subdivision to read:
137.21    Subd. 9a. Established religious orders. (a) Sales of lodging, prepared food, candy,
137.22soft drinks, and alcoholic beverages at noncatered events between an established religious
137.23order and an affiliated institution of higher education are exempt.
137.24(b) For purposes of this subdivision, "established religious order" means an
137.25organization directly or indirectly under the control or supervision of a church or
137.26convention or association of churches, where members of the organization:
137.27(1) normally live together as part of a community;
137.28(2) make long-term commitments to live under a strict set of moral and spiritual
137.29rules; and
137.30(3) work or engage full time in a combination of prayer, religious study, church
137.31reform or renewal, or other religious, educational, or charitable goals of the organization.
137.32(c) For purposes of this subdivision, an institution of higher education is "affiliated"
137.33with an established religious order if members of the religious order are represented
137.34on the governing board of the institution of higher education and the two organization
137.35share campus space and common facilities.
138.1EFFECTIVE DATE.This section is effective retroactively for sales and purchases
138.2made after June 30, 2012.

138.3    Sec. 12. Minnesota Statutes 2012, section 297A.70, is amended by adding a
138.4subdivision to read:
138.5    Subd. 18. Nursing homes and boarding care homes. (a) All sales, except those
138.6listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding
138.7care home certified as a nursing facility under title 19 of the Social Security Act are
138.8exempt if the facility:
138.9(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the
138.10Internal Revenue Code; and
138.11(2) is certified to participate in the medical assistance program under title 19 of the
138.12Social Security Act, or certifies to the commissioner that it does not discharge residents
138.13due to the inability to pay.
138.14(b) This exemption does not apply to the following sales:
138.15(1) building, construction, or reconstruction materials purchased by a contractor
138.16or a subcontractor as a part of a lump-sum contract or similar type of contract with a
138.17guaranteed maximum price covering both labor and materials for use in the construction,
138.18alteration, or repair of a building or facility;
138.19(2) construction materials purchased by tax-exempt entities or their contractors to
138.20be used in constructing buildings or facilities that will not be used principally by the
138.21tax-exempt entities;
138.22(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
138.23(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
138.24297A.67, subdivision 2; and
138.25(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
138.26as provided in paragraph (c).
138.27(c) This exemption applies to the leasing of a motor vehicle as defined in section
138.28297B.01, subdivision 11, only if the vehicle is:
138.29(1) a truck, as defined in section 168.002; a bus, as defined in section 168.002; or a
138.30passenger automobile, as defined in section 168.002, if the automobile is designed and
138.31used for carrying more than nine persons including the driver; and
138.32(2) intended to be used primarily to transport tangible personal property or residents
138.33of the nursing home or boarding care home.
138.34EFFECTIVE DATE.This section is effective for sales and purchases made after
138.35June 30, 2013.

139.1    Sec. 13. Minnesota Statutes 2012, section 297A.71, is amended by adding a
139.2subdivision to read:
139.3    Subd. 45. Industrial measurement manufacturing and controls facility. (a)
139.4Materials and supplies used or consumed in, capital equipment incorporated into,
139.5fixtures installed in, and privately owned infrastructure in support of the construction,
139.6improvement, or expansion of an industrial measurement manufacturing and controls
139.7facility are exempt if:
139.8(1) the total capital investment made at the facility is at least $60,000,000;
139.9(2) the facility employs at least 250 full-time equivalent employees that are not
139.10employees currently employed by the company in the state; and
139.11(3) the Department of Employment and Economic Development determines that
139.12the expansion, remodeling, or improvement of the facility has a significant impact on
139.13the state economy.
139.14(b) The tax must be imposed and collected as if the rate under section 297A.62,
139.15subdivisions 1 and 1a, applied and refunded in the manner provided in section 297A.75,
139.16only after the following criteria are met:
139.17(1) a refund may not be issued until the owner of the facility has received
139.18certification from the Department of Employment and Economic Development that the
139.19company meets the requirements in paragraph (a); and
139.20(2) to receive the refund, the owner of the industrial measurement manufacturing
139.21and controls facility must initially apply to the Department of Employment and Economic
139.22Development for certification no later than one year from the final completion date of
139.23construction, improvement, or expansion of the industrial measurement manufacturing
139.24and controls facility.
139.25EFFECTIVE DATE.This section is effective for sales and purchases made after
139.26June 30, 2013, and before December 31, 2015.

139.27    Sec. 14. Minnesota Statutes 2012, section 297A.71, is amended by adding a
139.28subdivision to read:
139.29    Subd. 46. Building materials; resorts and recreational camping areas. Materials
139.30and supplies used or consumed in, and equipment incorporated into, the improvement of
139.31an existing structure located at a resort, as defined in section 157.15, subdivision 11, or
139.32recreational camping area, as defined in section 327.14, are exempt. The tax on purchases
139.33exempt under this provision must be imposed and collected as if the rate under section
139.34297A.62, subdivision 1, applied and then refunded in the manner provided in section
139.35297A.75. For purposes of this subdivision, a structure includes a cabin located on resort
140.1property and any other structure available for use by guests of the resort or recreational
140.2camping area.
140.3EFFECTIVE DATE.This section is effective for sales and purchases made after
140.4June 30, 2013.

140.5    Sec. 15. Minnesota Statutes 2012, section 297A.71, is amended by adding a
140.6subdivision to read:
140.7    Subd. 47. Biopharmaceutical manufacturing facility. (a) Materials and
140.8supplies used or consumed in, capital equipment incorporated into, and privately
140.9owned infrastructure in support of the construction, improvement, or expansion of a
140.10biopharmaceutical manufacturing facility in the state are exempt if the following criteria
140.11are met:
140.12(1) the facility is used for the manufacturing of biologics;
140.13(2) the total capital investment made at the facility exceeds $50,000,000; and
140.14(3) the facility creates and maintains at least 190 full-time equivalent positions at the
140.15facility. These positions must be new jobs in Minnesota and not the result of relocating
140.16jobs that currently exist in Minnesota.
140.17(b) The tax must be imposed and collected as if the rate under section 297A.62,
140.18subdivision 1, applied, and refunded in the manner provided in section 297A.75.
140.19(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing
140.20facility must:
140.21(1) initially apply to the Department of Employment and Economic Development
140.22for certification no later than one year from the final completion date of construction,
140.23improvement, or expansion of the facility; and
140.24(2) for each year that the owner of the biopharmaceutical manufacturing facility
140.25applies for a refund, the owner must have received written certification from the
140.26Department of Employment and Economic Development that the facility has met the
140.27criteria of paragraph (a).
140.28(d) The refund is to be paid annually at a rate of 25 percent of the total allowable
140.29refund payable to date, with the commissioner making annual payments of the remaining
140.30refund until all of the refund has been paid.
140.31(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are
140.32interchangeable and mean medical drugs or medicinal preparations produced using
140.33technology that uses biological systems, living organisms or derivatives of living
140.34organisms, to make or modify products or processes for specific use. The medical drugs or
141.1medicinal preparations include but are not limited to proteins, antibodies, nucleic acids,
141.2and vaccines.
141.3EFFECTIVE DATE.This section is effective retroactively to investments entered
141.4into and jobs created after December 31, 2012, and effective retroactively for sales and
141.5purchases made after December 31, 2012, and before July 1, 2019.

141.6    Sec. 16. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
141.7    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
141.8following exempt items must be imposed and collected as if the sale were taxable and the
141.9rate under section 297A.62, subdivision 1, applied. The exempt items include:
141.10    (1) capital equipment exempt under section 297A.68, subdivision 5;
141.11    (2) building materials for an agricultural processing facility exempt under section
141.12297A.71, subdivision 13 ;
141.13    (3) building materials for mineral production facilities exempt under section
141.14297A.71, subdivision 14 ;
141.15    (4) building materials for correctional facilities under section 297A.71, subdivision 3;
141.16    (5) building materials used in a residence for disabled veterans exempt under section
141.17297A.71, subdivision 11 ;
141.18    (6) elevators and building materials exempt under section 297A.71, subdivision 12;
141.19    (7) building materials for the Long Lake Conservation Center exempt under section
141.20297A.71, subdivision 17 ;
141.21    (8) materials and supplies for qualified low-income housing under section 297A.71,
141.22subdivision 23 ;
141.23    (9) materials, supplies, and equipment for municipal electric utility facilities under
141.24section 297A.71, subdivision 35;
141.25    (10) equipment and materials used for the generation, transmission, and distribution
141.26of electrical energy and an aerial camera package exempt under section 297A.68,
141.27subdivision 37;
141.28    (11) commuter rail vehicle and repair parts under section 297A.70, subdivision 3,
141.29paragraph (a), clause (10);
141.30    (12) materials, supplies, and equipment for construction or improvement of projects
141.31and facilities under section 297A.71, subdivision 40;
141.32(13) materials, supplies, and equipment for construction or improvement of a meat
141.33processing facility exempt under section 297A.71, subdivision 41;
141.34(14) materials, supplies, and equipment for construction, improvement, or
141.35expansion of an aerospace defense manufacturing facility exempt under section 297A.71,
142.1subdivision 42, and construction, expansion, or improvement of an industrial measurement
142.2manufacturing and controls facility under section 297A.71, subdivision 45;
142.3(15) enterprise information technology equipment and computer software for use in
142.4a qualified data center exempt under section 297A.68, subdivision 42; and
142.5(16) materials, supplies, and equipment for qualifying capital projects under section
142.6297A.71, subdivision 44 .;
142.7(17) materials, supplies, and equipment for structure improvements at resort and
142.8camping areas under section 297A.71, subdivision 46; and
142.9(18) materials, supplies, and equipment for construction, improvement, or expansion
142.10of a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision
142.1147.
142.12EFFECTIVE DATE.This section is effective the day following final enactment.

142.13    Sec. 17. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
142.14    Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
142.15commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
142.16must be paid to the applicant. Only the following persons may apply for the refund:
142.17    (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
142.18    (2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental
142.19subdivision;
142.20    (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
142.21provided in United States Code, title 38, chapter 21;
142.22    (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
142.23property;
142.24    (5) for subdivision 1, clause (8), the owner of the qualified low-income housing
142.25project;
142.26    (6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or
142.27a joint venture of municipal electric utilities;
142.28    (7) for subdivision 1, clauses (10), (13), (14), and (15), and (18), the owner of the
142.29qualifying business; and
142.30    (8) for subdivision 1, clauses (11), (12), and (16), the applicant must be the
142.31governmental entity that owns or contracts for the project or facility.; and
142.32    (9) for subdivision 1, clause (17), the applicant must be the owner of the resort
142.33or recreational camping facility.
142.34EFFECTIVE DATE.This section is effective the day following final enactment.

143.1    Sec. 18. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
143.2    Subd. 3. Application. (a) The application must include sufficient information
143.3to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
143.4subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11),
143.5(12), (13), (14), (15), or (16), (17), or (18), the contractor, subcontractor, or builder must
143.6furnish to the refund applicant a statement including the cost of the exempt items and the
143.7taxes paid on the items unless otherwise specifically provided by this subdivision. The
143.8provisions of sections 289A.40 and 289A.50 apply to refunds under this section.
143.9    (b) An applicant may not file more than two applications per calendar year for
143.10refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
143.11    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
143.12exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
143.13of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
143.14subdivision 40, must not be filed until after June 30, 2009. Applications for refunds for
143.15purchases of items in section 297A.71, subdivision 47, must not be filed until after June
143.1630, 2016, and only one refund may be filed annually thereafter.
143.17EFFECTIVE DATE.This section is effective the day following final enactment.

143.18    Sec. 19. Minnesota Statutes 2012, section 297A.815, subdivision 3, is amended to read:
143.19    Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this
143.20subdivision, "net revenue" means an amount equal to:
143.21    (1) the revenues, including interest and penalties, collected under this section and
143.22on the leases under section 297A.61, subdivision 4, paragraph (k), clause (3), during
143.23the fiscal year; less
143.24    (2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal
143.25year 2013 and following fiscal years, $32,000,000.
143.26    (b) On or before June 30 of each fiscal year, the commissioner of revenue shall
143.27estimate the amount of the revenues and subtraction under paragraph (a) for the current
143.28fiscal year.
143.29    (c) On or after July 1 of the subsequent fiscal year, the commissioner of management
143.30and budget shall transfer the net revenue as estimated in paragraph (b) from the general
143.31fund, as follows:
143.32    (1) 50 percent to the greater Minnesota transit account; and
143.33    (2) 50 percent to the county state-aid highway fund. Notwithstanding any other law
143.34to the contrary, the commissioner of transportation shall allocate the funds transferred
143.35under this clause to the counties in the metropolitan area, as defined in section 473.121,
144.1subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall
144.2receive of such amount the percentage that its population, as defined in section 477A.011,
144.3subdivision 3, estimated or established by July 15 of the year prior to the current calendar
144.4year, bears to the total population of the counties receiving funds under this clause.
144.5    (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must
144.6be calculated using the following percentages of the total revenues:
144.7    (1) for fiscal year 2010, 83.75 percent; and
144.8    (2) for fiscal year 2011, 93.75 percent.
144.9EFFECTIVE DATE.This section is effective for leases entered into after June
144.1030, 2013.

144.11    Sec. 20. Minnesota Statutes 2012, section 297A.993, subdivision 1, is amended to read:
144.12    Subdivision 1. Authorization; rates. Notwithstanding section 297A.99,
144.13subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside
144.14the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or
144.15more than one county outside the metropolitan transportation area acting under a joint
144.16powers agreement, may by resolution of the county board, or each of the county boards,
144.17following a public hearing impose (1) a transportation sales tax at a rate of up to one-half
144.18of one percent on retail sales and uses taxable under this chapter, and (2) an excise tax
144.19of $20 per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or
144.20acquired from any person engaged in the business of selling motor vehicles at retail,
144.21occurring within the jurisdiction of the taxing authority. The taxes imposed under this
144.22section are subject to approval by a majority of the voters in each of the counties affected
144.23at a general election who vote on the question to impose the taxes.
144.24EFFECTIVE DATE.This section is effective the day following final enactment.

144.25    Sec. 21. Minnesota Statutes 2012, section 297A.993, subdivision 2, is amended to read:
144.26    Subd. 2. Allocation; termination. The proceeds of the taxes must be dedicated
144.27exclusively to: (1) payment of the capital cost of a specific transportation project or
144.28improvement; (2) payments of the costs, which may include both capital and operating
144.29costs, of a specific transit project or improvement; or (3) payment of transit operating
144.30costs. The transportation project or improvement must be designated by the board of the
144.31county, or more than one county acting under a joint powers agreement. Except for taxes
144.32for operating costs of a transit project or improvement, or for transit operations, the taxes
145.1must terminate after the project or improvement has been completed when revenues
145.2raised are sufficient to finance the project.
145.3EFFECTIVE DATE.This section is effective the day following final enactment.

145.4    Sec. 22. Minnesota Statutes 2012, section 469.190, is amended by adding a subdivision
145.5to read:
145.6    Subd. 1a. Tax base; locally collected taxes. A tax imposed on the gross receipts
145.7from lodging under this section or under a special law applies to the same base as taxes
145.8collected by the commissioner of revenue under subdivision 7 and section 270C.171.
145.9EFFECTIVE DATE.This section is effective the day following final enactment.
145.10In enacting this section, the legislature confirms its original intent in enacting Minnesota
145.11Statutes, section 469.190, its predecessor provisions, and any special laws authorizing
145.12political subdivisions to impose lodging taxes, and that those taxes were and are intended
145.13to apply to the entire consideration paid to obtain access to transient lodging, including
145.14ancillary or related services, such as services provided by accommodation intermediaries
145.15as defined in Minnesota Statutes, section 297A.61, and similar services. The provisions of
145.16this section must not be interpreted to imply a narrower construction of the tax base under
145.17lodging tax provisions of Minnesota law prior to the enactment of this section.

145.18    Sec. 23. Minnesota Statutes 2012, section 469.190, subdivision 7, is amended to read:
145.19    Subd. 7. Collection. (a) The statutory or home rule charter city may agree with the
145.20commissioner of revenue that a tax imposed pursuant to this section shall be collected
145.21by the commissioner together with the tax imposed by chapter 297A, and subject to the
145.22same interest, penalties, and other rules and that its proceeds, less the cost of collection,
145.23shall be remitted to the city.
145.24    (b) If a tax imposed under this section or under a special law is not collected by
145.25the commissioner of revenue, the local government imposing the tax may only require
145.26an accommodations intermediary, as defined in section 297A.61, subdivision 47, to file
145.27and remit the tax related to accommodations intermediary services once in every calendar
145.28year. The local government must inform the tax intermediary of the date when the return
145.29and remittance is due.
145.30EFFECTIVE DATE.This section is effective for sales and purchases made after
145.31June 30, 2013.

146.1    Sec. 24. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
146.2Laws 1997, chapter 231, article 7, section 40, Laws 1998, chapter 389, article 8, section
146.330, Laws 2003, First Special Session chapter 21, article 8, section 13, Laws 2005, First
146.4Special Session chapter 3, article 5, section 26, and Laws 2009, chapter 88, article 4,
146.5section 15, is amended to read:
146.6    Subd. 2. Use of revenues. Revenues received from the tax authorized by subdivision
146.71 may only be used by the city to pay the cost of collecting the tax, and, except as provided in
146.8paragraph (e), to pay for the following projects or to secure or pay any principal, premium,
146.9or interest on bonds issued in accordance with subdivision 3 for the following projects.
146.10    (a) To pay all or a portion of the capital expenses of construction, equipment and
146.11acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
146.12including the demolition of the existing arena and the construction and equipping of a
146.13new arena.
146.14    (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
146.15spent for:
146.16    (1) capital projects to further residential, cultural, commercial, and economic
146.17development in both downtown St. Paul and St. Paul neighborhoods; and
146.18    (2) capital and operating expenses of cultural organizations in the city, provided
146.19that the amount spent under this clause must equal ten percent of the total amount spent
146.20under this paragraph in any year.
146.21    (c) The amount apportioned under paragraph (b) shall be no less than 60 percent
146.22of the revenues derived from the tax each year, except to the extent that a portion of that
146.23amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a)
146.24prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1,
146.251998, but only if the city council determines that 40 percent of the revenues derived from
146.26the tax together with other revenues pledged to the payment of the bonds, including the
146.27proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
146.28    (d) If in any year more than 40 percent of the revenue derived from the tax authorized
146.29by subdivision 1 is used to pay debt service on the bonds issued for the purposes of
146.30paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment
146.31that exceeds 40 percent of the revenue must be determined for that year. In any year when
146.3240 percent of the revenue produced by the sales tax exceeds the amount required to pay
146.33debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the
146.34amount of the excess must be made available for capital projects to further residential,
146.35cultural, commercial, and economic development in the neighborhoods and downtown
146.36until the cumulative amounts determined for all years under the preceding sentence have
147.1been made available under this sentence. The amount made available as reimbursement in
147.2the preceding sentence is not included in the 60 percent determined under paragraph (c).
147.3    (e) In each of calendar years 2006 to 2014, revenue not to exceed $3,500,000 may be
147.4used to pay the principal of bonds issued for capital projects of the city. After December
147.531, 2014, revenue from the tax imposed under subdivision 1 may not be used for this
147.6purpose. If the amount necessary to meet obligations under paragraphs (a) and (d) are less
147.7than 40 percent of the revenue from the tax in any year, the city may place the difference
147.8between 40 percent of the revenue and the amounts allocated under paragraphs (a) and (d)
147.9in an economic development fund to be used for any economic development purposes.
147.10    (f) By January 15 of each year, the mayor and the city council must report to the
147.11legislature on the use of sales tax revenues during the preceding one-year period.
147.12EFFECTIVE DATE.This section is effective the day after compliance by the
147.13governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
147.14subdivisions 2 and 3.

147.15    Sec. 25. Laws 1993, chapter 375, article 9, section 46, subdivision 5, as amended by
147.16Laws 1998, chapter 389, article 8, section 32, is amended to read:
147.17    Subd. 5. Expiration of taxing authority. The authority granted by subdivision 1 to
147.18the city to impose a sales tax shall expire on December 31, 2030 2042, or at an earlier
147.19time as the city shall, by ordinance, determine. Any funds remaining after completion of
147.20projects approved under subdivision 2, paragraph (a) and retirement or redemption of any
147.21bonds or other obligations may be placed in the general fund of the city.
147.22EFFECTIVE DATE.This section is effective the day after compliance by the
147.23governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
147.24subdivisions 2 and 3.

147.25    Sec. 26. Laws 2002, chapter 377, article 3, section 25, as amended by Laws 2009,
147.26chapter 88, article 4, section 19, and Laws 2010, chapter 389, article 5, section 3, is
147.27amended to read:
147.28    Sec. 25. ROCHESTER LODGING TAX.
147.29    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
147.30469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
147.31tax of one percent on the gross receipts from the furnishing for consideration of lodging at
147.32a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
147.33for a continuous period of 30 days or more.
148.1    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190 or
148.2477A.016 , or any other law, and in addition to the tax authorized by subdivision 1, the city
148.3of Rochester may impose an additional tax of one three percent on the gross receipts from
148.4the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
148.5resort, other than the renting or leasing of it for a continuous period of 30 days or more only
148.6upon the approval of the city governing body of a total financial package for the project.
148.7    Subd. 2. Disposition of proceeds. (a) The gross proceeds from the tax imposed
148.8under subdivision 1 must be used by the city to fund a local convention or tourism bureau
148.9for the purpose of marketing and promoting the city as a tourist or convention center.
148.10(b) The gross proceeds from the one three percent tax imposed under subdivision
148.111a shall be used to pay for (1) design, construction, renovation, improvement, and
148.12expansion of the Mayo Civic Center Complex and related infrastructure, including but not
148.13limited to, skyway access, lighting, parking, or landscaping; and (2) for payment of any
148.14principal, interest, or premium on bonds issued to finance the construction, renovation,
148.15improvement, and expansion of the Mayo Civic Center Complex.
148.16    Subd. 2a. Bonds. The city of Rochester may issue, without an election, general
148.17obligation bonds of the city, in one or more series, in the aggregate principal amount not to
148.18exceed $43,500,000 $50,000,000, to pay for capital and administrative costs for the design,
148.19construction, renovation, improvement, and expansion of the Mayo Civic Center Complex,
148.20and related infrastructure, including but not limited to, skyway, access, lighting, parking,
148.21and landscaping. The city may pledge the lodging tax authorized by subdivision 1a and the
148.22food and beverage tax authorized under Laws 2009, chapter 88, article 4, section 23, to the
148.23payment of the bonds. The debt represented by the bonds is not included in computing any
148.24debt limitations applicable to the city, and the levy of taxes required by Minnesota Statutes,
148.25section 475.61, to pay the principal of and interest on the bonds is not subject to any levy
148.26limitation or included in computing or applying any levy limitation applicable to the city.
148.27    Subd. 3. Expiration of taxing authority. The authority of the city to impose a tax
148.28under subdivision 1a shall expire when the principal and interest on any bonds or other
148.29obligations issued prior to December 31, 2014, to finance the construction, renovation,
148.30improvement, and expansion of the Mayo Civic Center Complex and related skyway
148.31access, lighting, parking, or landscaping have been paid, including any bonds issued to
148.32refund such bonds, or at an earlier time as the city shall, by ordinance, determine. Any
148.33funds remaining after completion of the project and retirement or redemption of the bonds
148.34shall be placed in the general fund of the city. The city may, by ordinance, repeal the
148.35tax provided that:
149.1(1) the revenues raised before the repeal are sufficient to meet all bond or other
149.2obligations backed by revenues of the tax; and
149.3(2) the repeal date meets the requirements of section 297A.99, subdivision 12.
149.4EFFECTIVE DATE.This section is effective the day after the governing body of
149.5the city of Rochester and its chief fiscal officer comply with Minnesota Statutes, section
149.6645.021, subdivisions 2 and 3.

149.7    Sec. 27. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision
149.82, is amended to read:
149.9    Subd. 2. Use of revenues. (a) Revenues received from the tax authorized by
149.10subdivision 1 by the city of St. Cloud must be used for the cost of collecting and
149.11administering the tax and to pay all or part of the capital or administrative costs of the
149.12development, acquisition, construction, improvement, and securing and paying debt
149.13service on bonds or other obligations issued to finance the following regional projects as
149.14approved by the voters and specifically detailed in the referendum authorizing the tax or
149.15extending the tax:
149.16    (1) St. Cloud Regional Airport;
149.17    (2) regional transportation improvements;
149.18    (3) regional community and aquatics and recreation centers and facilities;
149.19    (4) regional public libraries; and
149.20    (5) acquisition and improvement of regional park land and open space.
149.21    (b) Revenues received from the tax authorized by subdivision 1 by the cities of St.
149.22Joseph, Waite Park, Sartell, Sauk Rapids, and St. Augusta must be used for the cost of
149.23collecting and administering the tax and to pay all or part of the capital or administrative
149.24costs of the development, acquisition, construction, improvement, and securing and paying
149.25debt service on bonds or other obligations issued to fund the projects specifically approved
149.26by the voters at the referendum authorizing the tax or extending the tax. The portion of
149.27revenues from the city going to fund the regional airport or regional library located in the
149.28city of St. Cloud will be as required under the applicable joint powers agreement.
149.29    (c) The use of revenues received from the taxes authorized in subdivision 1 for
149.30projects allowed under paragraphs (a) and (b) are limited to the amount authorized for
149.31each project under the enabling referendum.
149.32EFFECTIVE DATE.This section is effective for a city that approves it the day
149.33after compliance by the governing body of that city with Minnesota Statutes, section
149.34645.021, subdivision 3.

150.1    Sec. 28. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision
150.24, is amended to read:
150.3    Subd. 4. Termination of tax. The tax imposed in the cities of St. Joseph, St. Cloud,
150.4St. Augusta, Sartell, Sauk Rapids, and Waite Park under subdivision 1 expires when the
150.5city council determines that sufficient funds have been collected from the tax to retire or
150.6redeem the bonds and obligations authorized under subdivision 2, paragraph (a), but no
150.7later than December 31, 2018. Notwithstanding Minnesota Statutes, section 297A.99,
150.8subdivision 3, paragraphs (a), (c), and (d), a city may extend the tax imposed under
150.9subdivision 1 through December 31, 2038, if approved under the referendum authorizing
150.10the tax under subdivision 1 or if approved by voters of the city at a general election held
150.11no later than November 6, 2018.
150.12EFFECTIVE DATE.This section is effective for a city that approves it the day
150.13after compliance by the governing body of that city with Minnesota Statutes, section
150.14645.021, subdivision 3.

150.15    Sec. 29. Laws 2008, chapter 366, article 7, section 19, subdivision 3, as amended by
150.16Laws 2011, First Special Session chapter 7, article 4, section 8, is amended to read:
150.17    Subd. 3. Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99,
150.18subdivision 3 , paragraph (b), the proceeds of the tax imposed under this section shall be
150.19used to pay for the costs of improvements to the Sportsman Park/Ballfields, Riverside
150.20Park, Lions Park/Pavilion, Cedar South Park also known as Eldorado Park, and Spring
150.21Street Park; improvements to and extension of the River County Bike Trail; acquisition,
150.22 and construction, improvement, and development of regional parks, bicycle trails, park
150.23land, open space, and of a pedestrian walkways, as described in the city improvement
150.24plan adopted by the city council by resolution on December 12, 2006, and walkway
150.25over Interstate 94 and State Highway 24; and the acquisition of land and construction of
150.26buildings for a community and recreation center. The total amount of revenues from the
150.27taxes in subdivisions 1 and 2 that may be used to fund these projects is $12,000,000
150.28plus any associated bond costs.
150.29EFFECTIVE DATE.This section is effective the day after compliance by the
150.30governing body of the city of Clearwater with Minnesota Statutes, section 645.021,
150.31subdivisions 2 and 3.

150.32    Sec. 30. Laws 2010, chapter 389, article 5, section 6, subdivision 4, is amended to read:
151.1    Subd. 4. Use of lodging tax revenues. The revenues derived from the tax imposed
151.2under subdivision 3 must be used by the city of Marshall to pay the costs of collecting
151.3and administering the lodging tax, to pay all or part of the operating costs of the new and
151.4existing facilities of the Minnesota Emergency Response and Industry Training Center,
151.5including the payment of debt service on bonds issued under subdivision 2, and to pay
151.6all or part of the operating costs of the facilities of the Southwest Minnesota Regional
151.7Amateur Sports Center, including the payment of debt service on bonds issued under
151.8subdivision 2. Authorized expenses include, but are not limited to, acquiring property;
151.9predesign; design; and paying construction, furnishing, and equipment costs related to
151.10these facilities and paying debt service on bonds or other obligations issued by the city.
151.11EFFECTIVE DATE.This section is effective the day following final enactment.

151.12    Sec. 31. Laws 2010, chapter 389, article 5, section 6, subdivision 6, is amended to read:
151.13    Subd. 6. Use of food and beverages tax. The revenues derived from the tax
151.14imposed under subdivision 5 must be used by the city of Marshall to pay the costs of
151.15collecting and administering the food and beverages tax, to pay all or part of the operating
151.16costs of the new and existing facilities of the Minnesota Emergency Response and
151.17Industry Training Center, including the payment of debt service on bonds issued under
151.18subdivision 2, and to pay all or part of the operating costs of the facilities of the Southwest
151.19Minnesota Regional Amateur Sports Center, including the payment of debt service on
151.20bonds issued under subdivision 2. Authorized expenses for each organization include,
151.21but are not limited to, acquiring property; predesign; design; and paying construction,
151.22furnishing, and equipment costs related to these facilities and paying debt service on
151.23bonds or other obligations issued by the city.
151.24EFFECTIVE DATE.This section is effective the day following final enactment.

151.25    Sec. 32. CITY OF MARSHALL; VALIDATION OF PRIOR ACT.
151.26    (a) Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city
151.27of Marshall may approve Laws 2010, chapter 389, article 5, section 6, as amended by
151.28Laws 201l, First Special Session chapter 7, article 4, section 9, and file its approval with
151.29the secretary of state by June 15, 2013. If approved as authorized under this paragraph,
151.30actions undertaken by the city pursuant to the approval of the voters on November 6, 2012,
151.31and otherwise in accordance with Laws 2010, chapter 389, article 5, section 6, as amended
151.32by Laws 201l, First Special Session chapter 7, article 4, section 9, are validated.
152.1    (b) Notwithstanding the time limit on the imposition of tax under Laws 2010,
152.2chapter 389, article 5, section 6, subdivision 1, as amended by Laws 201l, First Special
152.3Session chapter 7, article 4, section 9, and subject to local approval under paragraph (a),
152.4the city of Marshall may impose the tax on or before July 1, 2013.
152.5EFFECTIVE DATE.This section is effective the day following final enactment.

152.6    Sec. 33. CITY OF PROCTOR; VALIDATION OF PRIOR ACT.
152.7    Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city of
152.8Proctor may approve, by resolution, Laws 2008, chapter 366, article 7, section 13, and
152.9Laws 2010, chapter 389, article 5, sections 1 and 2, and file its approval with the secretary
152.10of state by January 1, 2014. If approved under this paragraph, actions undertaken by
152.11the city pursuant to the approval of the voters on November 2, 2010, and otherwise in
152.12accordance with those laws are validated.
152.13EFFECTIVE DATE.This section is effective the day following final enactment.

152.14    Sec. 34. CITY OF BEMIDJI; LOCAL TAXES AUTHORIZED.
152.15    Subdivision 1. Food and beverage tax authorized. Notwithstanding Minnesota
152.16Statutes, section 477A.016, or any ordinance, city charter, or other provision of law, the
152.17city of Bemidji may, by ordinance, impose a sales tax of up to one percent on the gross
152.18receipts of all food and beverages sold by a restaurant or place of refreshment located
152.19within the city. For purposes of this section, "food and beverages" include retail on-sale of
152.20intoxicating liquor and fermented malt beverages.
152.21    Subd. 2. Lodging tax. Notwithstanding Minnesota Statutes, section 469.190 or
152.22477A.016, or any other provision of law, ordinance, or city charter, the city of Bemidji
152.23may impose, by ordinance, a tax of up to one percent on the gross receipts for the
152.24furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
152.25resort, other than for the renting or leasing of it for a continuous period of 30 days or more.
152.26    Subd. 3. Use of proceeds from authorized taxes. The proceeds of the taxes
152.27imposed under subdivisions 1 and 2 must only be used by the city to fund the costs of
152.28operation, maintenance, and capital replacement costs for the Sanford Center.
152.29    Subd. 4. Collection, administration, and enforcement. The city may enter into
152.30an agreement with the commissioner of revenue to administer, collect, and enforce the
152.31taxes under subdivisions 1 and 2. If the commissioner agrees to collect the tax, the
152.32provisions of Minnesota Statutes, section 297A.99, related to collection, administration,
152.33and enforcement, and Minnesota Statutes, section 270C.171, apply.
153.1EFFECTIVE DATE.This section is effective the day after the governing body of
153.2the city of Bemidji and its chief clerical officer comply with Minnesota Statutes, section
153.3645.021, subdivisions 2 and 3.

153.4    Sec. 35. ROCHESTER SALES TAX SHARING.
153.5The city council may, after holding a public hearing and passing a resolution, use
153.6$5,000,000 of the $10,000,000 allocated to an economic development fund in Laws 1998,
153.7chapter 389, article 8, section 43, subdivision 3, as amended by Laws 2005, First Special
153.8Session chapter 3, article 5, section 28, and Laws 2011, First Special Session chapter
153.97, article 4, section 5, paragraph (c), clause (9), for grants to any or all of the cities of
153.10Altura, Byron, Chatfield, Dodge Center, Elgin, Eyota, Grand Meadow, Hayfield, Kasson,
153.11Mantorville, Mazeppa, Oronoco, Pine Island, Plainview, Spring Valley, St. Charles,
153.12Stewartville, Wanamingo, West Concord, and Zumbrota for economic development
153.13projects that these communities would fund through their economic development authority
153.14or housing and redevelopment authority. The public hearing may be part of a regular city
153.15council meeting. If the council does not pass the resolution by September 1, 2013, the
153.16$5,000,000 may not be used for grants to the other cities but shall instead be used to
153.17fund public infrastructure projects contained in the development plan under Minnesota
153.18Statutes, section 469.42.
153.19EFFECTIVE DATE.This section is effective the day following final enactment.

153.20    Sec. 36. REPEALER.
153.21Laws 2009, chapter 88, article 4, section 23, as amended by Laws 2010, chapter 389,
153.22article 5, section 4, is repealed.
153.23EFFECTIVE DATE.This section is effective the day following final enactment.


153.26    Section 1. Minnesota Statutes 2012, section 469.071, subdivision 5, is amended to read:
153.27    Subd. 5. Exception; parking facilities. Notwithstanding section 469.068, the
153.28Bloomington port authority need not require competitive bidding with respect to a
153.29structured parking facility or other public improvements constructed in conjunction with,
153.30and directly above or below, or adjacent and integrally related to, a development and
153.31financed with the proceeds of tax increment or, revenue bonds, or other funds of the
153.32port authority and the city of Bloomington.
154.1EFFECTIVE DATE.This section is effective upon compliance of the governing
154.2body of the city of Bloomington with the requirements of Minnesota Statutes, section
154.3645.021, subdivision 3.

154.4    Sec. 2. Minnesota Statutes 2012, section 469.169, is amended by adding a subdivision
154.5to read:
154.6    Subd. 19. Additional border city allocation; 2013. (a) In addition to the tax
154.7reductions authorized in subdivisions 12 to 18, the commissioner shall allocate $750,000
154.8for tax reductions to border city enterprise zones in cities located on the western border
154.9of the state. The commissioner shall allocate this amount among cities on a per capita
154.10basis. Allocations made under this subdivision may be used for tax reductions under
154.11section 469.171, or for other offsets of taxes imposed on or remitted by businesses located
154.12in the enterprise zone, but only if the municipality determines that the granting of the tax
154.13reduction or offset is necessary to retain a business within or attract a business to the zone.
154.14The city alternatively may elect to use any portion of the allocation under this paragraph
154.15for tax reductions under section 469.1732 or 469.1734.
154.16    (b) The commissioner shall allocate $750,000 for tax reductions under section
154.17469.1732 or 469.1734 to cities with border city enterprise zones located on the western
154.18border of the state. The commissioner shall allocate this amount among the cities on a per
154.19capita basis. The city alternatively may elect to use any portion of the allocation provided
154.20in this paragraph for tax reductions under section 469.171.
154.21EFFECTIVE DATE.This section is effective July 1, 2013.

154.22    Sec. 3. Minnesota Statutes 2012, section 469.176, subdivision 4c, is amended to read:
154.23    Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
154.24from an economic development district may not be used to provide improvements, loans,
154.25subsidies, grants, interest rate subsidies, or assistance in any form to developments
154.26consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
154.27facilities (determined on the basis of square footage) are used for a purpose other than:
154.28    (1) the manufacturing or production of tangible personal property, including
154.29processing resulting in the change in condition of the property;
154.30    (2) warehousing, storage, and distribution of tangible personal property, excluding
154.31retail sales;
154.32    (3) research and development related to the activities listed in clause (1) or (2);
154.33    (4) telemarketing if that activity is the exclusive use of the property;
154.34    (5) tourism facilities; or
155.1    (6) qualified border retail facilities; or
155.2    (7) space necessary for and related to the activities listed in clauses (1) to (6) (5).
155.3    (b) Notwithstanding the provisions of this subdivision, revenues derived from tax
155.4increment from an economic development district may be used to provide improvements,
155.5loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
155.6square feet of any separately owned commercial facility located within the municipal
155.7jurisdiction of a small city, if the revenues derived from increments are spent only to
155.8assist the facility directly or for administrative expenses, the assistance is necessary to
155.9develop the facility, and all of the increments, except those for administrative expenses,
155.10are spent only for activities within the district.
155.11    (c) A city is a small city for purposes of this subdivision if the city was a small city
155.12in the year in which the request for certification was made and applies for the rest of
155.13the duration of the district, regardless of whether the city qualifies or ceases to qualify
155.14as a small city.
155.15    (d) Notwithstanding the requirements of paragraph (a) and the finding requirements
155.16of section 469.174, subdivision 12, tax increments from an economic development district
155.17may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or
155.18assistance in any form to developments consisting of buildings and ancillary facilities, if
155.19all the following conditions are met:
155.20    (1) the municipality finds that the project will create or retain jobs in this state,
155.21including construction jobs, and that construction of the project would not have
155.22commenced before July 1, 2012, without the authority providing assistance under the
155.23provisions of this paragraph;
155.24    (2) construction of the project begins no later than July 1, 2012;
155.25    (3) the request for certification of the district is made no later than June 30, 2012; and
155.26    (4) for development of housing under this paragraph, the construction must begin
155.27before January 1, 2012.
155.28    The provisions of this paragraph may not be used to assist housing that is developed
155.29to qualify under section 469.1761, subdivision 2 or 3, or similar requirements of other law,
155.30if construction of the project begins later than July 1, 2011.
155.31EFFECTIVE DATE.This section is effective for districts for which the request for
155.32certification was made after June 30, 2012.

155.33    Sec. 4. Minnesota Statutes 2012, section 469.176, subdivision 4g, is amended to read:
155.34    Subd. 4g. General government use prohibited. (a) Tax increments may not be
155.35used to circumvent existing levy limit law.
156.1    (b) No tax increment from any district may be used for the acquisition, construction,
156.2renovation, operation, or maintenance of a building to be used primarily and regularly
156.3for conducting the business of a municipality, county, school district, or any other local
156.4unit of government or the state or federal government. This provision does not prohibit
156.5the use of revenues derived from tax increments for the construction or renovation of
156.6a parking structure.
156.7    (c)(1) Tax increments may not be used to pay for the cost of public improvements,
156.8equipment, or other items, if:
156.9    (i) the improvements, equipment, or other items are located outside of the area of the
156.10tax increment financing district from which the increments were collected; and
156.11    (ii) the improvements, equipment, or items that (A) primarily serve a decorative or
156.12aesthetic purpose, or (B) serve a functional purpose, but their cost is increased by more than
156.13100 percent as a result of the selection of materials, design, or type as compared with more
156.14commonly used materials, designs, or types for similar improvements, equipment, or items.
156.15    (2) The provisions of this paragraph do not apply to expenditures related to the
156.16rehabilitation of historic structures that are:
156.17    (i) individually listed on the National Register of Historic Places; or
156.18    (ii) a contributing element to a historic district listed on the National Register
156.19of Historic Places.
156.20EFFECTIVE DATE.This section is effective the day following final enactment for
156.21all tax increment financing districts, regardless of when the request for certification was
156.22made, but applies only to amounts spent after final enactment.

156.23    Sec. 5. Minnesota Statutes 2012, section 469.176, subdivision 6, is amended to read:
156.24    Subd. 6. Action required. (a) If, after four years from the date of certification of
156.25the original net tax capacity of the tax increment financing district pursuant to section
156.26469.177 , no demolition, rehabilitation, or renovation of property or other site preparation,
156.27including qualified improvement of a street adjacent to a parcel but not installation
156.28of utility service including sewer or water systems, has been commenced on a parcel
156.29located within a tax increment financing district by the authority or by the owner of the
156.30parcel in accordance with the tax increment financing plan, no additional tax increment
156.31may be taken from that parcel, and the original net tax capacity of that parcel shall be
156.32excluded from the original net tax capacity of the tax increment financing district. If the
156.33authority or the owner of the parcel subsequently commences demolition, rehabilitation,
156.34or renovation or other site preparation on that parcel including qualified improvement of
156.35a street adjacent to that parcel, in accordance with the tax increment financing plan, the
157.1authority shall certify to the county auditor that the activity has commenced, and the
157.2county auditor shall certify the net tax capacity thereof as most recently certified by the
157.3commissioner of revenue and add it to the original net tax capacity of the tax increment
157.4financing district. The county auditor must enforce the provisions of this subdivision. The
157.5authority must submit to the county auditor evidence that the required activity has taken
157.6place for each parcel in the district. The evidence for a parcel must be submitted by
157.7February 1 of the fifth year following the year in which the parcel was certified as included
157.8in the district. For purposes of this subdivision, qualified improvements of a street are
157.9limited to (1) construction or opening of a new street, (2) relocation of a street, and (3)
157.10substantial reconstruction or rebuilding of an existing street.
157.11    (b) For districts which were certified on or after January 1, 2005, and before April
157.1220, 2009, the four-year period under paragraph (a) is increased to six years deemed to end
157.13on December 31, 2016.
157.14EFFECTIVE DATE.This section is effective the day following final enactment
157.15and applies to districts certified on or after January 1, 2006, and before April 20, 2009.

157.16    Sec. 6. Minnesota Statutes 2012, section 469.177, is amended by adding a subdivision
157.17to read:
157.18    Subd. 1d. Original net tax capacity adjustment; homestead market value
157.19exclusion. (a) Upon approval by the municipality, by resolution, the authority may elect
157.20to reduce the net tax capacity of a qualified district by the amount of the tax capacity
157.21attributable to the market value exclusion under section 273.13, subdivision 35. The
157.22amount of the reduction may not reduce the original net tax capacity below zero.
157.23    (b) For purposes of this subdivision, a qualified district means a tax increment
157.24financing district that satisfies the following conditions:
157.25    (1) for taxes payable in 2011, the authority received a homestead market value credit
157.26reimbursement under section 273.1384 for the district of $10,000 or more;
157.27    (2) for taxes payable in 2013, the reduction in captured tax capacity resulting from
157.28the market value exclusion for the district was equal to or greater than 1.75 percent of the
157.29district's captured tax capacity; and
157.30    (3) either (i) the authority is permitted to expend increments on activities under the
157.31provisions of section 469.1763, subdivision 3, or an equivalent provision of special law
157.32on July 1, 2013, or (ii) the district's tax increments received for taxes payable in 2012
157.33exceeded the amount of debt service payments due during calendar year 2012 on bonds
157.34issued under section 469.178 to which the district's increments are pledged.
158.1The calculation of the amount under clause (2) must reflect any adjustments to original
158.2net tax capacity made under subdivision 1, paragraphs (d) and (e), for the homestead
158.3market value exclusion.
158.4    (c) The authority must notify the county auditor of its election under this section no
158.5later than July 1, 2014. Notifications made by July 1, 2013, are effective beginning for
158.6taxes payable in 2014, and notifications made after July 1, 2013, are effective beginning
158.7for taxes payable in 2015.
158.8EFFECTIVE DATE.This section is effective the day following final enactment
158.9and applies to all tax increment financing districts regardless of when the request for
158.10certification was made.

158.11    Sec. 7. Minnesota Statutes 2012, section 473F.08, is amended by adding a subdivision
158.12to read:
158.13    Subd. 3c. Mall of America. (a) When computing the net tax capacity under section
158.14473F.05, the Hennepin County auditor shall exclude the captured tax capacity of Tax
158.15Increment Financing Districts No. 1-C and No. 1-G in the city of Bloomington.
158.16    (b) Notwithstanding the provisions of subdivision 2, paragraph (a), the
158.17commercial-industrial contribution percentage for the city of Bloomington is the
158.18contribution net tax capacity divided by the total net tax capacity of commercial-industrial
158.19property in the city, excluding any commercial-industrial property that is captured tax
158.20capacity of Tax Increment Financing Districts No. 1-C and No. 1-G.
158.21    (c) The property taxes to be paid on commercial-industrial tax capacity that is
158.22included in the captured tax capacity of Tax Increment Financing Districts No. 1-C and
158.23No. 1-G in the city of Bloomington must be determined as described in subdivision 6,
158.24except that the portion of the tax that is based on the areawide tax rate is to be treated
158.25as tax increment under section 469.176.
158.26    (d) The provisions of this subdivision take effect only if the clerk of the city of
158.27Bloomington certifies to the Hennepin County auditor that the city has entered into a
158.28binding written agreement with the Metropolitan Council to repair and restore, or to
158.29replace, the old Cedar Avenue bridge for use by bicycle commuters and recreational users.
158.30    (e) This subdivision expires on the earliest of the following dates:
158.31    (1) when the tax increment financing districts have been decertified in 2024 or 2035,
158.32as provided by section 10, subdivision 2 or 4; or
158.33    (2) on January 1, 2014, if the city clerk fails to make the certification provided in
158.34paragraph (d) or if the city fails to file its local approval of section 18 with the secretary
158.35of state by December 31, 2013.
159.1EFFECTIVE DATE.This section is effective beginning for property taxes payable
159.2in 2014.

159.3    Sec. 8. Laws 2008, chapter 366, article 5, section 26, is amended to read:
159.4    Sec. 26. BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR
159.5RULE.
159.6    (a) The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
159.7activities must be undertaken within a five-year period from the date of certification of
159.8a tax increment financing district, are increased to a ten-year 15-year period for the
159.9Port Authority of the City of Bloomington's Tax Increment Financing District No. 1-I,
159.10Bloomington Central Station.
159.11    (b) Notwithstanding the provisions of Minnesota Statutes, section 469.176, or any
159.12other law to the contrary, the city of Bloomington and its port authority may extend the
159.13duration limits of the district for a period through December 31, 2039.
159.14    (c) Effective for taxes payable in 2014, tax increment for the district must be
159.15computed using the current local tax rate, notwithstanding the provisions of Minnesota
159.16Statutes, section 469.177, subdivision 1a.
159.17EFFECTIVE DATE.Paragraphs (a) and (c) are effective upon compliance by
159.18the governing body of the city of Bloomington with the requirements of Minnesota
159.19Statutes, section 645.021, subdivision 3. Paragraph (b) is effective upon compliance by
159.20the governing bodies of the city of Bloomington, Hennepin County, and Independent
159.21School District No. 271 with the requirements of Minnesota Statutes, sections 469.1782,
159.22subdivision 2, and 645.021, subdivision 3.

159.23    Sec. 9. Laws 2008, chapter 366, article 5, section 34, as amended by Laws 2009,
159.24chapter 88, article 5, section 11, is amended to read:
159.25    Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY PARCELS
159.26DEEMED OCCUPIED.
159.27    (a) The provisions of this section apply to redevelopment tax increment financing
159.28districts created by the Housing and Redevelopment Authority in and for the city of
159.29Oakdale in the areas comprised of the parcels with the following parcel identification
159.30numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056;
159.313102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059;
159.323102921320060; 3102921320061; 3102921330005; and 3102921330004; and (2)
159.332902921330001 and 2902921330005.
160.1    (b) For a district subject to this section, the Housing and Redevelopment Authority
160.2may, when requesting certification of the original tax capacity of the district under
160.3Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district
160.4be certified as the tax capacity of the land.
160.5    (c) The authority to request certification of a district under this section expires on
160.6July 1, 2013.
160.7    (a) Parcel numbers 3102921320054, 3102921320055, 3102921320056,
160.83102921320057, 3102921320061, and 3102921330004 are deemed to meet the
160.9requirements of Minnesota Statutes, section 469.174, subdivision 10, paragraph (d),
160.10notwithstanding any contrary provisions of that paragraph, if the following conditions
160.11are met:
160.12    (1) a building located on any part of each of the specified parcels was demolished after
160.13the Housing and Redevelopment Authority for the city of Oakdale adopted a resolution
160.14under Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), clause (3);
160.15    (2) the building was removed either by the authority, by a developer under a
160.16development agreement with the Housing and Redevelopment Authority for the city of
160.17Oakdale, or by the owner of the property without entering into a development agreement
160.18with the Housing and Redevelopment Authority for the city of Oakdale; and
160.19    (3) the request for certification of the parcel as part of a district is filed with the
160.20county auditor by December 31, 2017.
160.21    (b) The provisions of this section allow an election by the Housing and
160.22Redevelopment Authority for the city of Oakdale for the parcels deemed occupied under
160.23paragraph (a), notwithstanding the provisions of Minnesota Statutes, sections 469.174,
160.24subdivision 10, paragraph (d), and 469.177, subdivision 1, paragraph (f).
160.25    (c) The city may elect, in the tax increment financing plan, to collect increment from
160.26a redevelopment district created under the provisions of this section for an additional ten
160.27years beyond the limit in Minnesota Statutes, section 469.176, subdivision 1b.
160.28EFFECTIVE DATE.This section is effective upon compliance by the governing
160.29body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021,
160.30subdivision 3, except that the provisions of paragraph (c) are effective only upon
160.31compliance with Minnesota Statutes, section 469.1782, subdivision 2, by Ramsey County
160.32and Independent School District No. 622.

160.33    Sec. 10. Laws 2010, chapter 216, section 55, is amended to read:
160.34    Sec. 55. OAKDALE; TAX INCREMENT FINANCING DISTRICT.
161.1    Subdivision 1. Duration of district. Notwithstanding the provisions of Minnesota
161.2Statutes, section 469.176, subdivision 1b, the city of Oakdale may collect tax increments
161.3from Tax Increment Financing District No. 6 (Bergen Plaza) through December 31, 2024
161.4 2040, subject to the conditions described in subdivision 2.
161.5    Subd. 2. Conditions for extension. (a) Subdivision 1 applies only if the following
161.6conditions are met:
161.7    (1) by July 1, 2011, the city of Oakdale has entered into a development agreement
161.8with a private developer for development or redevelopment of all or a substantial part of
161.9the area parcels described in clause (2); and
161.10    (2) by November 1, 2011, the city of Oakdale or a private developer commences
161.11construction of streets, traffic improvements, water, sewer, or related infrastructure that
161.12serves one or both of the parcels with the following parcel identification numbers:
161.132902921330001 and 2902921330005. For the purposes of this section, construction
161.14commences upon grading or other visible improvements that are part of the subject
161.15infrastructure.
161.16    (b) All tax increments received by the city of Oakdale under subdivision 1 after
161.17December 31, 2016, must be used only to pay costs that are both:
161.18    (1) related to redevelopment of the parcels specified in this subdivision or
161.19parcel numbers 3102921320053, 3102921320054, 3102921320055, 3102921320056,
161.203102921320057, 3102921320058, 3102921320059, 3102921320060, 3102921320061,
161.213102921320062, 3102921320063, 3102921330004, and 3102921330005, including,
161.22without limitation, any of the infrastructure referenced in this subdivision that serves
161.23any of the referenced parcels; and
161.24    (2) otherwise eligible under law to be paid with increments from the specified tax
161.25increment financing district, except the authority under this clause does not apply to
161.26increments collected after the conclusion of the duration limit under general law.
161.27EFFECTIVE DATE.This section is effective upon compliance by the governing
161.28body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021,
161.29subdivision 3, except that the amendments to subdivision 1 are effective only upon
161.30compliance with Minnesota Statutes, section 469.1782, subdivision 2, by Ramsey County
161.31and Independent School District No. 622.

161.32    Sec. 11. CITY OF BLOOMINGTON; TAX INCREMENT FINANCING.
161.33    Subdivision 1. Addition of property to Tax Increment Financing District
161.34No. 1-G. (a) Notwithstanding the provisions of Minnesota Statutes, section 469.175,
161.35subdivision 4, or any other law to the contrary, the governing bodies of the Port Authority
162.1of the city of Bloomington and the city of Bloomington may elect to eliminate the real
162.2property north of the existing building line on Lot 1, Block 1, Mall of America 7th
162.3Addition, exclusive of Lots 2 and 3 from Tax Increment Financing District No. 1-C
162.4within Industrial Development District No. 1 Airport South in the city of Bloomington,
162.5Minnesota, and expand the boundaries of Tax Increment Financing District No. 1-G
162.6to include that property.
162.7    (b) If the city elects to transfer parcels under this authority, the county auditor shall
162.8transfer the original tax capacity of the affected parcels from Tax Increment Financing
162.9District No. 1-C to Tax Increment Financing District No. 1-G.
162.10    Subd. 2. Authority to extend duration limit; computation of increment. (a)
162.11Notwithstanding Minnesota Statutes, section 469.176, or Laws 1996, chapter 464, article
162.121, section 8, or any other law to the contrary, the city of Bloomington and its port authority
162.13may extend the duration limits of Tax Increment Financing Districts No. 1-C and No.
162.141-G through December 31, 2034.
162.15    (b) Effective for property taxes payable in 2017 through 2034, the captured tax
162.16capacity of Tax Increment Financing District No. 1-C must be included in computing the
162.17tax rates of each local taxing district and the tax increment equals only the amount of tax
162.18computed under Minnesota Statutes, section 473F.08, subdivision 3c, paragraph (c).
162.19    (c) Effective for property taxes payable in 2019 through 2034, the captured tax
162.20capacity of Tax Increment Financing District No. 1-G must be included in computing the
162.21tax rates of each local taxing district and the tax increment for the district equals only
162.22the amount of tax computed under Minnesota Statutes, section 473F.08, subdivision
162.233c, paragraph (c).
162.24    Subd. 3. Treatment of increment. Increments received under the provisions
162.25of subdivision 2, paragraph (b) or (c), and Minnesota Statutes, section 473F.08,
162.26subdivision 3c, are deemed to be tax increments of Tax Increment Financing District No.
162.271-G, notwithstanding any law to the contrary, and without regard to whether they are
162.28attributable to captured tax capacity of Tax Increment Financing District No. 1-C.
162.29    Subd. 4. Condition. The authority under this section expires and Tax Increment
162.30Financing Districts No. 1-C and No. 1-G must be decertified for taxes payable in 2024
162.31and thereafter, if the total estimated market value of improvements for parcels located in
162.32Tax Increment Financing District No. 1-G, as modified, do not exceed $100,000,000
162.33by taxes payable in 2023.
162.34EFFECTIVE DATE.This section is effective upon compliance of the governing
162.35body of the city of Bloomington with the requirements of Minnesota Statutes, section
162.36645.021, subdivision 3, but only if the city enters into a binding written agreement with
163.1the Metropolitan Council to repair and restore, or to replace, the old Cedar Avenue bridge
163.2for use by bicycle commuters and recreational users. This section is effective without
163.3approval of the county and school district under Minnesota Statutes, section 469.1782,
163.4subdivision 2. The legislature finds that the county and school district are not "affected
163.5local government units" within the meaning of Minnesota Statutes, section 469.1782,
163.6because the provision allowing extended collection of increment by the tax increment
163.7financing districts does not affect their tax bases and tax rates dissimilarly to other counties
163.8and school districts in the metropolitan area.

163.9    Sec. 12. ST. CLOUD; TAX INCREMENT FINANCING.
163.10    The request for certification of Tax Increment Financing District No. 2, commonly
163.11referred to as the Norwest District, in the city of St. Cloud is deemed to have been made
163.12on or after August 1, 1979, and before July 1, 1982. Revenues derived from tax increment
163.13for that district must be treated for purposes of any law as revenue of a tax increment
163.14financing district for which the request for certification was made during that time period.
163.15EFFECTIVE DATE.This section is effective upon approval by the governing
163.16body of the city of St. Cloud and compliance with Minnesota Statutes, section 645.021,
163.17subdivision 3.

163.18    Sec. 13. DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY; TAX
163.19INCREMENT FINANCING DISTRICT.
163.20    Subdivision 1. Authorization. Notwithstanding the provisions of any other law,
163.21the Dakota County Community Development Agency may establish a redevelopment tax
163.22increment financing district comprised of the properties that were:
163.23    (1) included in the CDA 10 Robert and South Street district in the city of West
163.24St. Paul; and
163.25    (2) not decertified before July 1, 2012.
163.26The district created under this section terminates no later than December 31, 2018.
163.27    Subd. 2. Special rules. The requirements for qualifying a redevelopment district
163.28under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located
163.29within the district. Minnesota Statutes, section 469.176, subdivision 4j, do not apply to the
163.30district. The original tax capacity of the district is $93,239.
163.31    Subd. 3. Authorized expenditures. Tax increment from the district may be
163.32expended to pay for any eligible activities authorized by Minnesota Statutes, chapter 469,
163.33within the redevelopment area that includes the district, provided that the boundaries of
164.1the redevelopment area may not be expanded to add new area after April 1, 2013. All
164.2expenditures for eligible activities are deemed to be activities within the district under
164.3Minnesota Statutes, section 469.1763, subdivisions 2 to 4.
164.4    Subd. 4. Adjusted net tax capacity. The captured tax capacity of the district must
164.5be included in the adjusted net tax capacity of the city, county, and school district for the
164.6purposes of determining local government aid, education aid, and county program aid.
164.7The county auditor shall report to the commissioner of revenue the amount of the captured
164.8tax capacity for the district at the time the assessment abstracts are filed.
164.9EFFECTIVE DATE.This section is effective upon compliance by the governing
164.10body of the Dakota County Community Development Agency with the requirements of
164.11Minnesota Statutes, section 645.021, subdivision 3.

164.12    Sec. 14. CITY OF GLENCOE; TAX INCREMENT FINANCING DISTRICT
164.13EXTENSION.
164.14    Subdivision 1. Duration of district. Notwithstanding the provisions of Minnesota
164.15Statutes, section 469.176, subdivision 1b, paragraph (a), clause (4), or any other law to the
164.16contrary, the city of Glencoe may collect tax increments from Tax Increment Financing
164.17District No. 4 (McLeod County District No. 007) through December 31, 2023, subject to
164.18the conditions in subdivision 2.
164.19    Subd. 2. Exclusive use of revenues. (a) All tax increments derived from Tax
164.20Increment Financing District No. 4 (McLeod County District No. 007) that are collected
164.21after December 31, 2013, must be used only to pay debt service on or to defease bonds that
164.22were outstanding on January 1, 2013 and that were issued to finance improvements serving:
164.23    (1) Tax Increment Financing District No. 14 (McLeod County District No. 033)
164.24(Downtown);
164.25    (2) Tax Increment Financing District No. 15 (McLeod County District No. 035)
164.26(Industrial Park); and
164.27    (3) benefited properties as further described in proceedings related to the city's series
164.282007A bonds, dated September 1, 2007, and any bonds issued to refund those bonds.
164.29    (b) Increments may also be used to pay debt service on or to defease bonds issued to
164.30refund the bonds described in paragraph (a), if the refunding bonds do not increase the
164.31present value of debt service due on the refunded bonds when the refunding is closed.
164.32    (c) When the bonds described in paragraphs (a) and (b) have been paid or defeased,
164.33the district must be decertified and any remaining increment returned to the city, county,
164.34and school district as provided in Minnesota Statutes, section 469.176, subdivision 2,
164.35paragraph (c), clause (4).
165.1EFFECTIVE DATE.This section is effective upon compliance by the governing
165.2bodies of the city of Glencoe, McLeod County, and Independent School District No.
165.32859 with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and
165.4645.021, subdivision 3.

165.5    Sec. 15. CITY OF ELY; TAX INCREMENT FINANCING.
165.6    Subdivision 1. Extension of district. Notwithstanding Minnesota Statutes, section
165.7469.176, subdivision 1b, or any other law to the contrary, the city of Ely may collect
165.8tax increment from Tax Increment Financing District No. 1 through December 31,
165.92021. Increments from the district may only be used to pay binding obligations and
165.10administrative expenses.
165.11    Subd. 2. Binding obligations. For purposes of this section, "binding obligations"
165.12means the binding contractual or debt obligation of Tax Increment Financing District
165.13No. 1 entered into before January 1, 2013.
165.14    Subd. 3. Expenditures outside district. Notwithstanding Minnesota Statutes,
165.15section 469.1763, subdivision 2, the governing body of the city of Ely may elect to
165.16transfer revenues derived from increments from its Tax Increment Financing District No.
165.173 to the tax increment account established under Minnesota Statutes, section 469.177,
165.18subdivision 5, for Tax Increment Financing District No. 1. The amount that may be
165.19transferred is limited to the lesser of:
165.20    (1) $168,000; or
165.21    (2) the total amount due on binding obligations and outstanding on that date, less the
165.22amount of increment collected by Tax Increment Financing District No. 1 after December
165.2331, 2012, and administrative expenses of Tax Increment Financing District No. 1 incurred
165.24after December 31, 2012.
165.25EFFECTIVE DATE.This section is effective upon approval by the governing
165.26bodies of the city of Ely, St. Louis County, and Independent School District No. 696 with
165.27the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021,
165.28subdivision 3.

165.29    Sec. 16. CITY OF MAPLEWOOD; TAX INCREMENT FINANCING
165.30DISTRICT; SPECIAL RULES.
165.31    (a) If the city of Maplewood elects, upon the adoption of a tax increment financing
165.32plan for a district, the rules under this section apply to one or more redevelopment
165.33tax increment financing districts established by the city or the economic development
165.34authority of the city. The area within which the redevelopment tax increment districts may
166.1be created is parcel 362922240002 (the "parcel") or any replatted parcels constituting a
166.2part of the parcel and the adjacent rights-of-way. For purposes of this section, the parcel is
166.3the "3M Renovation and Retention Project Area" or "project area."
166.4    (b) The requirements for qualifying redevelopment tax increment districts under
166.5Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcel, which is
166.6deemed eligible for inclusion in a redevelopment tax increment district.
166.7    (c) The 90 percent rule under Minnesota Statutes, section 469.176, subdivision
166.84j, does not apply to the parcel.
166.9    (d) The expenditures outside district rule under Minnesota Statutes, section
166.10469.1763, subdivision 2, does not apply; the five-year rule under Minnesota Statutes,
166.11section 469.1763, subdivision 3, is extended to ten years; and expenditures must only
166.12be made within the project area.
166.13    (e) If, after one year from the date of certification of the original net tax capacity
166.14of the tax increment district, no demolition, rehabilitation, or renovation of property has
166.15been commenced on a parcel located within the tax increment district, no additional tax
166.16increment may be taken from that parcel, and the original net tax capacity of the parcel
166.17shall be excluded from the original net tax capacity of the tax increment district. If 3M
166.18Company subsequently commences demolition, rehabilitation, or renovation, the authority
166.19shall certify to the county auditor that the activity has commenced, and the county auditor
166.20shall certify the net tax capacity thereof as most recently certified by the commissioner
166.21of revenue and add it to the original net tax capacity of the tax increment district. The
166.22authority must submit to the county auditor evidence that the required activity has taken
166.23place for each parcel in the district.
166.24    (f) The authority to approve a tax increment financing plan and to establish a tax
166.25increment financing district under this section expires December 31, 2018.
166.26EFFECTIVE DATE.This section is effective upon approval by the governing
166.27body of the city of Maplewood and upon compliance with Minnesota Statutes, section
166.28645.021, subdivision 3.

166.29    Sec. 17. CITY OF MINNEAPOLIS; STREETCAR FINANCING.
166.30    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
166.31have the meanings given them.
166.32    (b) "City" means the city of Minneapolis.
166.33    (c) "County" means Hennepin County.
166.34    (d) "District" means the areas certified by the city under subdivision 2 for collection
166.35of value capture taxes.
167.1    (e) "Project area" means the area including one city block on either side of a streetcar
167.2line designated by the city to serve the downtown and adjacent neighborhoods of the city.
167.3    Subd. 2. Authority to establish district. (a) The governing body of the city may, by
167.4resolution, establish a value capture district consisting of some or all of the taxable parcels
167.5located within one or more of the following areas of the city, as described in the resolution:
167.6    (1) the area bounded by Nicollet Avenue on the west, 16th Street East on the south,
167.7First Avenue South on the east, and 14th Street East on the north;
167.8    (2) the area bounded by Spruce Place on the west, 14th Street West on the south,
167.9LaSalle Avenue on the east, and Grant Street West on the north;
167.10    (3) the area bounded by Nicollet Avenue or Mall on the west, Fifth Street South on
167.11the south, Marquette Avenue on the east, and Fourth Street South on the north; and
167.12    (4) the area bounded by First Avenue North on the west, Washington Avenue on the
167.13south, Hennepin Avenue on the east, and Second Street North on the north.
167.14    (b) The city may establish the district and the project area only after holding a public
167.15hearing on its proposed creation after publishing notice of the hearing and the proposal at
167.16least once not less than ten days nor more than 30 days before the date of the hearing.
167.17    Subd. 3. Calculation of value capture district; administrative provisions. (a) If
167.18the city establishes a value capture district under subdivision 2, the city shall request the
167.19county auditor to certify the district for calculation of the district's tax revenues.
167.20    (b) For purposes of calculating the tax revenues of the district, the county auditor
167.21shall treat the district as if it were a request for certification of a tax increment financing
167.22district under the provisions of Minnesota Statutes, section 469.177, subdivision 1,
167.23and shall calculate the tax revenues of the district for each year of its duration under
167.24subdivision 4 as equaling the amount of tax increment that would be computed by
167.25applying the provisions of Minnesota Statutes, section 469.177, subdivisions 1, 2, and
167.263, to determine captured tax capacity and multiplying by the current tax rate, excluding
167.27the state general tax rate. The city shall provide the county auditor with the necessary
167.28information to certify the district, including the option for calculating revenues derived
167.29from the areawide tax rate under Minnesota Statutes, chapter 473F.
167.30    (c) The county auditor shall pay to the city at the same times provided for settlement
167.31of taxes and payment of tax increments the tax revenues of the district. The city must use
167.32the tax revenues as provided under subdivision 4.
167.33    Subd. 4. Permitted uses of district tax revenues. (a) In addition to paying for
167.34reasonable administrative costs of the district, the city may spend tax revenues of the
167.35district for property acquisition, improvements, and equipment to be used for operations
167.36within the project area, along with related costs, for:
168.1    (1) planning, design, and engineering services related to the construction of the
168.2streetcar line;
168.3    (2) acquiring property for, constructing, and installing a streetcar line;
168.4    (3) acquiring and maintaining equipment and rolling stock and related facilities, such
168.5as maintenance facilities, which need not be located in the project area;
168.6    (4) acquiring, constructing, or improving transit stations; and
168.7    (5) acquiring or improving public space, including the construction and installation
168.8of improvements to streets and sidewalks, decorative lighting and surfaces, and plantings
168.9related to the streetcar line.
168.10    (b) The city may issue bonds or other obligations under Minnesota Statutes, chapter
168.11475, without an election, to fund acquisition or improvement of property of a capital
168.12nature authorized by this section, including any costs of issuance. The city may also issue
168.13bonds or other obligations to refund those bonds or obligations. Payment of principal
168.14and interest on the bonds or other obligations issued under this paragraph is a permitted
168.15use of the district's tax revenues.
168.16    (c) Tax revenues of the district may not be used for the operation of the streetcar line.
168.17    Subd. 5. Duration of the district. A district established under this section is limited
168.18to the lesser of (1) 25 years of tax revenues, or (2) the time necessary to collect tax revenues
168.19equal to the amount of the capital costs permitted under subdivision 4 or the amount needed
168.20to pay or defease bonds or other obligations issued under subdivision 4, whichever is later.
168.21EFFECTIVE DATE.This section is effective the day following final enactment.

168.22    Sec. 18. CITY OF BLOOMINGTON; OLD CEDAR AVENUE BRIDGE.
168.23    (a) Notwithstanding any law to the contrary, the city of Bloomington shall transfer
168.24from the tax increment financing accounts for its Tax Increment Financing District No.
168.251-C and Tax Increment Financing District No. 1-G an amount equal to the tax increment
168.26for each district that is computed under the provisions of Minnesota Statutes, section
168.27473F.08, subdivision 3c, for taxes payable in 2014 to an account or fund established for
168.28the repair, restoration, or replacement of the Old Cedar Avenue bridge for use by bicycle
168.29commuters and recreational users. The city is authorized to and must use the transferred
168.30funds to complete the repair, renovation, or replacement of the bridge.
168.31    (b) No signs, plaques, or markers acknowledging or crediting donations for,
168.32sponsorships of, or naming rights may be posted on or in the vicinity of the Old Cedar
168.33Avenue bridge.
169.1EFFECTIVE DATE.This section is effective upon compliance by the city of
169.2Bloomington with the requirements of Minnesota Statutes, section 645.021, subdivision 3.


169.5    Section 1. Minnesota Statutes 2012, section 297A.71, is amended by adding a
169.6subdivision to read:
169.7    Subd. 45. Construction materials, public infrastructure related to the
169.8Destination medical center. Materials and supplies used in, and equipment incorporated
169.9into, the construction and improvement of publicly owned buildings and infrastructure
169.10included in the development plan adopted under section 469.42, and financed with public
169.11funds, are exempt.
169.12EFFECTIVE DATE.This section is effective for sales and purchases made after
169.13June 30, 2015.

169.14    Sec. 2. [469.40] DEFINITIONS.
169.15    Subdivision 1. Application. For the purposes of section 469.40 to 469.46, the terms
169.16defined in this section have the meanings given them.
169.17    Subd. 2. City. "City" means the city of Rochester.
169.18    Subd. 3. County. "County" means Olmsted County.
169.19    Subd. 4. Destination Medical Center Corporation, corporation, DMCC.
169.20"Destination Medical Center Corporation," "corporation," or "DMCC" means the
169.21nonprofit corporation created by the city as provided in section 469.41, and organized
169.22under chapter 317A.
169.23    Subd. 5. Destination medical center development district. "Destination medical
169.24center development district" or "development district" means a geographic area in the
169.25city identified in the adopted DMCC development plan in which public infrastructure
169.26projects are implemented.
169.27    Subd. 6. Development plan. "Development plan" means the plan adopted by
169.28the DMCC under section 469.42.
169.29    Subd. 7. Medical business entity. "Medical business entity" means a medical
169.30business entity with its principal place of business in the city that, as of the effective date
169.31of this section, together with all business entities of which it is the sole member or sole
169.32shareholder, collectively employs more than 30,000 persons in the state.
170.1    Subd. 8. Public infrastructure project. (a) "Public infrastructure project" means
170.2a project financed in part or whole with public money in order to support the medical
170.3business entity's development plans, as identified in the adopted DMCC development
170.4plan. A project may be to:
170.5(1) acquire real property and other assets associated with the real property;
170.6(2) demolish, repair, or rehabilitate buildings;
170.7(3) remediate land and buildings as required to prepare the property for acquisition
170.8or development;
170.9(4) install, construct, or reconstruct elements of public infrastructure required to
170.10support the overall development of the destination medical center development district,
170.11including, but not limited to, streets, roadways, utilities systems and related facilities,
170.12utility relocations and replacements, network and communication systems, streetscape
170.13improvements, drainage systems, sewer and water systems, subgrade structures and
170.14associated improvements, landscaping, façade construction and restoration, wayfinding
170.15and signage, and other components of community infrastructure;
170.16(5) acquire, construct or reconstruct, and equip parking facilities and other facilities
170.17to encourage intermodal transportation and public transit;
170.18(6) install, construct or reconstruct, furnish, and equip parks, cultural, and
170.19recreational facilities, facilities to promote tourism and hospitality, conferencing and
170.20conventions, broadcast and related multimedia infrastructure;
170.21(7) make related site improvements, including, without limitation, excavation, earth
170.22retention, soil stabilization and correction, site improvements to support the destination
170.23medical center development district; and
170.24(8) prepare land for private development and to sell or lease land.
170.25    (b) A public infrastructure project is not a business subsidy under section 116J.993.

170.26    Sec. 3. [469.41] DESTINATION MEDICAL CENTER CORPORATION
170.27ESTABLISHED.
170.28    Subdivision 1. DMCC created. The city shall establish a destination medical
170.29center corporation as a nonprofit corporation under chapter 317A to provide the city with
170.30expertise in preparing and implementing the development plan to establish the city as a
170.31destination medical center. Except as provided in this article, the nonprofit corporation
170.32is not subject to laws governing the city.
170.33    Subd. 2. Membership. (a) The corporation's governing board consists of nine
170.34voting members, as follows:
171.1    (1) the mayor of the city, or the mayor's designee, subject to approval by the city
171.2council;
171.3    (2) a member of the city council, selected by the city council;
171.4    (3) a member of the county board, selected by the county board;
171.5    (4) two representatives of the medical business entity defined in section 469.40,
171.6subdivision 7, appointed by the city council from among five candidates nominated by the
171.7medical business entity;
171.8(5) two representatives of the city business community other than the medical
171.9business entity, appointed by the city council from among five candidates nominated by
171.10the Rochester Area Chamber of Commerce; and
171.11    (6) two members, appointed by the governor.
171.12    (b) Appointing authorities must make their appointments as soon as practicable after
171.13the effective date of this section.
171.14    Subd. 3. Bylaws. The corporation shall adopt bylaws governing the terms of
171.15members, filling vacancies, removal of members, selection of officers and other personnel
171.16and contractors, and other matters of organization and operation of the corporation.
171.17    Subd. 4. Open meeting law; data practices. Meetings of the corporation and any
171.18committee or subcommittee of the corporation are subject to the open meeting law in
171.19chapter 13D. The corporation is a government entity for purposes of chapter 13.
171.20    Subd. 5. Conflicts of interest. Except for the members appointed under subdivision
171.212, paragraph (a), clause (4), to represent the medical business entity, within one year
171.22prior to or at any time during a member's term of service on the corporation's governing
171.23board, a member must not be employed by, be a member of the board of directors of, or
171.24otherwise be a representative of the medical business entity. No member may serve as a
171.25lobbyist, as defined under section 10A.01, subdivision 21.
171.26    Subd. 6. Powers; gifts. The corporation may exercise any other powers that are
171.27granted by its articles of incorporation and bylaws to the extent that those powers are not
171.28inconsistent with the provisions of sections 469.40 to 469.46. Notwithstanding any law to
171.29the contrary, the corporation may accept and use gifts of money or in-kind and may use
171.30any of its money or assets, other than money or assets received from the city, county, or
171.31state, to develop and implement the adopted development plan.
171.32    Subd. 7. Dissolution. The city shall provide for the terms for dissolution of the
171.33corporation in the articles of incorporation.

171.34    Sec. 4. [469.42] DEVELOPMENT PLAN.
172.1    Subdivision 1. Development plan; adoption by DMCC; notice; findings. (a)
172.2The corporation shall prepare and adopt a development plan. The corporation must
172.3hold a public hearing before adopting a development plan. At least 45 days before the
172.4hearing, the corporation shall make copies of the proposed plan available to the public at
172.5the corporation and city offices during normal business hours, on the corporation's and
172.6city's Web site, and as otherwise determined appropriate by the corporation. At least ten
172.7days before the hearing, the corporation shall publish notice of the hearing in a daily
172.8newspaper of general circulation in the city. The development plan may not be adopted
172.9unless the corporation finds by resolution that:
172.10(1) the plan provides an outline for the development of the city as a destination
172.11medical center, and the plan is sufficiently complete, including the identification of planned
172.12and anticipated projects, to indicate its relationship to definite state and local objectives;
172.13(2) the proposed development affords maximum opportunity, consistent with the
172.14needs of the city, county, and state, for the development of the city by private enterprise
172.15as a destination medical center;
172.16(3) the proposed development conforms to the general plan for the development of
172.17the city and is consistent with the city comprehensive plan;
172.18(4) the plan includes:
172.19(i) strategic planning consistent with a destination medical center in the core areas of
172.20commercial research and technology, learning environment, hospitality and convention,
172.21sports and recreation, livable communities, including mixed-use urban development
172.22and neighborhood residential development, retail/dining/entertainment, and health and
172.23wellness;
172.24(ii) estimates of short- and long-range fiscal and economic impacts;
172.25(iii) a framework to identify and prioritize short- and long-term public investment
172.26and public infrastructure project development and to facilitate private investment and
172.27development;
172.28(iv) land use planning;
172.29(v) transportation and transit planning;
172.30(vi) operational planning required to support the medical center development
172.31district; and
172.32(vii) ongoing market research plans; and
172.33(5) the city has approved the plan.
172.34(b) The identification of planned and anticipated projects under paragraph (a), clause
172.35(1), must give priority to projects that will pay wages at least equal to the basic cost of
172.36living wage as calculated by the commissioner of employment and economic development
173.1for the county in which the project is located. The calculation of the basic cost of living
173.2wage shall be done as provided for under Minnesota Statutes, section 116J.013, if enacted
173.3by the 2013 legislature.
173.4    Subd. 2. Modification of development plan. The corporation may modify the
173.5development plan at any time. The corporation must update the development plan not less
173.6than every five years. A modification or update under this subdivision must be adopted by
173.7the corporation upon the notice and after the public hearing and findings required for the
173.8original adoption of the development plan.
173.9    Subd. 3. Medical center development districts; creation; notice; findings. As
173.10part of the development plan, the corporation may create and define the boundaries of
173.11medical center development districts and subdistricts at any place or places within the
173.12city. Projects may be undertaken within defined medical center development districts
173.13consistent with the development plan.
173.14    Subd. 4. DMCC consultant. (a) The corporation may engage a business entity
173.15consultant to provide experience and expertise in developing the destination medical
173.16center. The consultant may assist the corporation in preparing the development plan and
173.17provide services to assist the corporation or city in implementing, consistent with the
173.18development plan, the goals, objectives, and strategies in the development plan, including,
173.19but not limited to:
173.20(1) developing and updating the criteria for evaluating and underwriting
173.21development proposals;
173.22(2) implementing the development plan, including soliciting and evaluating
173.23proposals for development and evaluating and making recommendations to the corporation
173.24and the city regarding those proposals;
173.25(3) providing transactional services in connection with approved projects;
173.26(4) developing patient, visitor, and community outreach programs for a destination
173.27medical center development district;
173.28(5) working with the corporation to acquire and facilitate the sale, lease, or other
173.29transactions involving land and real property;
173.30(6) seeking financial support for the corporation, the city, and a project;
173.31(7) partnering with other development agencies and organizations and the county in
173.32joint efforts to promote economic development and establish a destination medical center;
173.33(8) supporting and administering the planning and development activities required to
173.34implement the development plan;
173.35(9) preparing and supporting the marketing and promotion of the medical center
173.36development district;
174.1(10) preparing and implementing a program for community and public relations in
174.2support of the medical center development district;
174.3(11) assisting the corporation or city and others in applications for federal grants, tax
174.4credits, and other sources of funding to aid both private and public development; and
174.5(12) making other general advisory recommendations to the corporation and the
174.6city, as requested.
174.7(b) The corporation may contract with the consultant to provide administrative
174.8services to the corporation with regard to the destination medical center plan
174.9implementation. The corporation may pay for those services out of any revenue sources
174.10available to it.
174.11    Subd. 5. Audit of consultant contracts. Any contract for services between the
174.12corporation and a consultant paid, in whole or in part, with public money gives the
174.13corporation, the city, and the state auditor the right to audit the books and records of the
174.14consultant that are necessary to certify (1) the nature and extent of the services furnished
174.15pursuant to the contract, and (2) that the payment for services and related disbursements
174.16complies with all state laws, regulations, and the terms of the contract. Any contract for
174.17services between the corporation and the consultant paid, in whole or in part, with public
174.18money shall require the corporation to maintain for the life of the corporation accurate and
174.19complete books and records directly relating to the contract.
174.20    Subd. 6. Report. By January 15 of each year, the corporation and city must submit
174.21a report to the chairs and ranking minority members of the legislative committees with
174.22jurisdiction over local and state government operations, economic development, and taxes,
174.23and to the commissioners of revenue and employment and economic development, and
174.24the county. The corporation and city must also submit the report as provided in section
174.253.195. The report must include:
174.26(1) the adopted development plan and any proposed changes to the development plan;
174.27(2) progress of projects identified in the development plan;
174.28(3) actual costs and financing sources, including the amount paid with state aid under
174.29section 469.46 and required local contributions, of projects completed in the previous two
174.30years by the corporation, city, the county, and the medical business entity;
174.31(4) estimated costs and financing sources for projects to be begun in the next two
174.32years by the corporation, city, the county, and the medical business entity; and
174.33(5) debt service schedules for all outstanding obligations of the city for debt issued
174.34for projects identified in the plan.

174.35    Sec. 5. [469.43] CITY POWERS, DUTIES; AUTHORITY TO ISSUE BONDS.
175.1    Subdivision 1. Port authority powers. The city may exercise the powers of a
175.2port authority under sections 469.048 to 469.068, for the purposes of implementing the
175.3destination medical center development plan.
175.4    Subd. 2. Support to the corporation. The city may provide financial and
175.5administrative support and office and other space to the corporation. The city may
175.6appropriate money of the city to the corporation for its work.
175.7    Subd. 3. City to issue debt. The city may issue general obligation bonds, revenue
175.8bonds, or other obligations, as it determines appropriate, to finance public infrastructure
175.9projects, as provided by chapter 475. Notwithstanding section 475.53 obligations issued
175.10under this section are not subject to the limits on net debt, regardless of their source of
175.11security or payment. Notwithstanding section 475.58 or any other law or charter provision
175.12to the contrary, issuance of obligations under the provisions of this section are not subject
175.13to approval of the electors. The city may pledge any of its revenues, including property
175.14taxes, the taxes authorized by sections 469.44 and 469.45, and the state aid under section
175.15469.46, as security for and to pay the obligations. The city must not issue obligations that
175.16are only payable from or secured by state aid under section 469.46.
175.17    Subd. 4. American made steel. The city must require that a public infrastructure
175.18project use American steel products to the extent practicable. In determining whether it
175.19is practicable, the city may consider the exceptions to the requirement in Public Law
175.20111-5, section 1605.

175.21    Sec. 6. [469.44] CITY TAX AUTHORITY.
175.22    Subdivision 1. Rochester, other local taxes authorized. (a) Notwithstanding
175.23section 477A.016, or any other contrary provision of law, ordinance, or city charter, and in
175.24addition to any taxes the city may impose on these transactions under another statute or
175.25law, the city of Rochester may, by ordinance impose at a rate or rates, determined by the
175.26city, any of the following taxes:
175.27(1) a tax on the gross receipts from the furnishing for consideration of lodging and
175.28related services as defined in section 297A.61, subdivision 3, paragraph (g), clause (2); the
175.29city may choose to impose a differential tax based on the number of rooms in the facility;
175.30(2) a tax on the gross receipts of food and beverages sold primarily for consumption
175.31on the premises by restaurants and places of refreshment that occur in the city of
175.32Rochester; the city may elect to impose the tax in a defined district of the city; and
175.33(3) a tax on the admission receipts to entertainment and recreational facilities, as
175.34defined by ordinance, in the city of Rochester.
176.1(b) The provisions of section 297A.99, subdivisions 4 to 13, govern the
176.2administration, collection, and enforcement of any tax imposed by the city under
176.3paragraph (a).
176.4(c) The proceeds of any taxes imposed under this subdivision, less refunds and costs
176.5of collection, must be used by the city to fund obligations related to public infrastructure
176.6projects contained in the development plan, including any associated financing costs. Any
176.7tax imposed under paragraph (a) expires at the earlier of December 31, 2041, or when the
176.8city council determines that sufficient funds have been raised from the tax plus all other
176.9local funding sources authorized in this article to meet the city obligation for financing a
176.10public infrastructure project contained in the development plan, including any associated
176.11financing costs.
176.12    Subd. 2. General sales tax authority. The city may elect to extend the existing
176.13local sales and use tax under section 11 or to impose an additional rate of up to one-half of
176.14one percent tax on sales and use under section 9.
176.15    Subd. 3. Special abatement rules. (a) If the city or the county elects to use tax
176.16abatement under sections 469.1812 to 469.1815 to finance costs of public infrastructure
176.17projects, the special rules under this subdivision apply.
176.18(b) The limitations under section 469.1813, subdivision 6, do not apply to the city
176.19or the county.
176.20(c) The limitations under section 469.1813, subdivision 8, do not apply and property
176.21taxes abated by the city or the county to finance costs of public infrastructure projects are
176.22not included for purposes of applying section 469.1813, subdivision 8, to the use of tax
176.23abatement for other purposes of the city or the county; however, the total amount of property
176.24taxes abated by the city and the county under this authority must not exceed $87,750,000.
176.25    Subd. 4. Special tax increment financing rules. If the city elects to establish
176.26a redevelopment tax increment financing district or districts within the area of the
176.27destination medical center development district, the requirements of section 469.174,
176.28subdivision 10, restricting the geographic areas that may be designated as a district do not
176.29apply and increments from the district are not required to be spent in accordance with the
176.30requirements of section 469.176, subdivision 4j.

176.31    Sec. 7. [469.45] COUNTY TAX AUTHORITY.
176.32(a) Notwithstanding sections 297A.99, 297A.993, and 477A.016, or any other
176.33contrary provision of law, ordinance, or charter, and in addition to any taxes the county
176.34may impose under another law or statute, the board of commissioners of Olmsted County
176.35may, by resolution, impose a transit tax of up to one quarter of one percent on retail sales
177.1and uses taxable under chapter 297A. The provisions of section 297A.99, subdivisions
177.24 to 13, govern the imposition, administration, collection, and enforcement of the tax
177.3authorized under this paragraph.
177.4(b) The board of commissioners of Olmsted County may, by resolution, levy an
177.5annual wheelage tax of up to $10 on each motor vehicle kept in the county when not in
177.6operation which is subject to annual registration and taxation under chapter 168. The
177.7wheelage tax shall not be imposed on the vehicles exempt from wheelage tax under
177.8section 163.051, subdivision 1. The board by resolution may provide for collection of
177.9the wheelage tax by county officials or it may request that the tax be collected by the
177.10state registrar on behalf of the county. The provisions of section 163.051, subdivisions
177.112, 2a, 3, and 7, shall govern the administration, collection, and enforcement of the tax
177.12authorized under this paragraph.
177.13(c) The proceeds of any taxes imposed under this subdivision, less refunds and
177.14costs of collection, must be first used by the county to meet its share of obligations for
177.15financing transit infrastructure related to the public infrastructure projects contained in
177.16the development plan, including any associated financing costs. Revenues collected in
177.17any calendar year in excess of the county obligation to pay for projects contained in the
177.18development plan may be retained by the county and used for funding other transportation
177.19projects, including roads and bridges, airport and transit improvements.
177.20(d) Any taxes imposed under paragraph (a), expire December 31, 2041, or at an
177.21earlier time if approved by resolution of the county board of commissioners. However,
177.22the taxes may not terminate before the county board of commissioners determines that
177.23revenues from these taxes and any other revenue source the county dedicates are sufficient
177.24to pay the county share of transit project costs and associated financing costs under the
177.25adopted development plan.

177.26    Sec. 8. [469.46] STATE INFRASTRUCTURE AID.
177.27    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
177.28have the meanings given them.
177.29(b) "Commissioner" means the commissioner of employment and economic
177.30development.
177.31(c) "Construction projects" means construction of buildings in the city for which the
177.32building permit was issued after June 30, 2013.
177.33(d) "Expenditures" means expenditures made by a medical business entity, including
177.34any affiliated entities, on construction projects for the capital cost of the project, including
177.35but not limited to:
178.1(1) design and predesign, including architectural, engineering, and similar services;
178.2(2) legal, regulatory, and other compliance costs of the project;
178.3(3) land acquisition, demolition of existing improvements, and other site preparation
178.4costs;
178.5(4) construction costs including all materials and supplies of the project; and
178.6(5) equipment and furnishings that are attached to or become part of the real property.
178.7Expenditures exclude supplies and other items with a useful life of less than a year that
178.8are not used or consumed in constructing improvements to real property or are otherwise
178.9chargeable to capital costs.
178.10(e) "Qualified expenditures" has the following meaning. In the first year in which
178.11aid is paid under this section "qualified expenditures" mean the total certified expenditures
178.12since June 30, 2013, through the end of the previous calendar year minus $200,000,000.
178.13For subsequent years "qualified expenditures" mean the certified expenditures for the
178.14previous calendar year.
178.15(f) "Transit costs" means the portions of a public infrastructure project that are for
178.16public transit intended primarily to serve the district, such as transit stations, equipment,
178.17right-of-way, and similar costs.
178.18    Subd. 2. Certification of expenditures. By April 1 of each year, the medical
178.19business entity must certify to the commissioner the amount of expenditures made in the
178.20prior calendar year. The certification must be made in the form that the commissioner
178.21prescribes and include any documentation of and supporting information regarding the
178.22expenditures that the commissioner requires. By August 1 of each year, the commissioner
178.23shall determine the amount of the expenditures for the prior calendar year.
178.24    Subd. 3. General state infrastructure aid. (a) General state infrastructure aid may
178.25not be paid out under this section until total expenditures exceed $200,000,000.
178.26(b) The amount of the general state infrastructure aid for a fiscal year equals the sum
178.27of qualified expenditures, multiplied by 2.75 percent. The maximum amount of general
178.28state aid payable in any year is limited to no more than $30,000,000. If the aid entitlement
178.29for the year exceeds the maximum annual limit, the excess is an aid carryover to later
178.30years. The carryover aid must be paid in the first year in which the aid entitlement for the
178.31current year is less than the maximum annual limit, but only to the extent the carryover,
178.32when added to the current year aid, is less than the maximum annual limit.
178.33(c) If the commissioner determines that the city has made the required matching
178.34local contribution under subdivision 4, the commissioner shall pay to the city the amount
178.35of general state infrastructure aid for the year by September 1.
179.1(d) The city must use general state infrastructure aid it receives under this
179.2subdivision for improvements and other capital costs related to the public infrastructure
179.3project, other than transit costs. The city shall maintain appropriate records to document
179.4the use of the funds under this requirement.
179.5(e) The commissioner, in consultation with the commissioner of management and
179.6budget and representatives of the city and the corporation, shall establish a total limit on
179.7the amount of state aid payable under this subdivision that is sufficient, in combination
179.8with the local contribution, to pay for $455,000,000 of general public infrastructure
179.9projects, plus financing costs.
179.10    Subd. 4. General aid; local matching contribution. In order to qualify for general
179.11state infrastructure aid, the city must enter a written agreement with the commissioner that
179.12requires the city to make a qualifying local matching contribution to pay for $128,000,000
179.13of the cost of public infrastructure projects, including associated financing costs, using
179.14funds other than state aid received under this section. This agreement must provide for the
179.15manner, timing, and amounts of the city contributions, including the city's commitment for
179.16each year. The commissioner and city may agree to amend the agreement at any time in
179.17light of new information or other appropriate factors. The city may enter arrangements
179.18with the county to pay for or otherwise meet the local matching contribution requirement.
179.19    Subd. 5. State transit aid. (a) The city qualifies for state transit aid under this
179.20section if:
179.21(1) the county has elected to impose the transit sales tax under section 469.45 for a
179.22calendar year; and
179.23(2) the county contributes the required local matching contribution under subdivision
179.246 or the city or county have agreed to make an equivalent contribution out of other funds.
179.25(b) The amount of the state transit aid for a fiscal year equals the sum of qualified
179.26expenditures, as certified by the commissioner for the prior calendar year, multiplied
179.27by 0.75 percent, reduced by the amount of the local contribution under subdivision 6.
179.28The maximum amount of state transit aid payable in any year is limited to no more than
179.29$7,500,000. If the aid entitlement for the year exceeds the maximum annual limit, the
179.30excess is an aid carryover to later years. The carryover aid must be paid in the first year
179.31in which the aid entitlement for the current year is less than the maximum annual limit,
179.32but only to the extent the carryover, when added to the current year aid, is less than the
179.33maximum annual limit.
179.34    (c) The commissioner, in consultation with the commissioner of management and
179.35budget and representatives of the city and the corporation, shall establish a total limit on
179.36the amount of state aid payable under this subdivision that is sufficient, in combination
180.1with the local contribution, to pay for $116,000,000 of general public infrastructure
180.2projects, plus financing costs.
180.3    Subd. 6. Transit aid; local matching contribution. (a) The required local matching
180.4contribution for state transit aid equals the amount that would be raised by a 0.15 percent
180.5sales tax imposed by the county in the prior calendar year. The county may impose the
180.6sales tax or the wheelage tax under section 469.45 to meet this obligation.
180.7(b) If the county elects not to impose any of the taxes authorized under section 469.45,
180.8the county or city or both may agree to make the local contribution out of other available
180.9funds, other than state aid payable under this section. The commissioner of revenue shall
180.10estimate the required amount and certify it to the commissioner, city, and county.
180.11    Subd. 7. Termination. No aid may be paid under this section after fiscal year 2041.
180.12    Subd. 8. Appropriation. An amount sufficient to pay the state general infrastructure
180.13and state transit aid authorized under this section is appropriated to the commissioner
180.14from the general fund.

180.15    Sec. 9. Laws 1998, chapter 389, article 8, section 43, subdivision 1, is amended to read:
180.16    Subdivision 1. Sales and use taxes authorized. (a) Notwithstanding Minnesota
180.17Statutes, section 477A.016, or any other contrary provision of law, ordinance, or city
180.18charter, upon termination of the taxes authorized under Laws 1992, chapter 511, article
180.198, section 33, subdivision 1, and if approved by the voters of the city at a general or
180.20special election held within one year of the date of final enactment of this act, the city of
180.21Rochester may, by ordinance, impose an additional sales and use tax of up to one-half
180.22of one percent. The provisions of Minnesota Statutes, section 297A.48, 297A.99 govern
180.23the imposition, administration, collection, and enforcement of the tax authorized under
180.24this subdivision paragraph.
180.25    (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
180.26other contrary provision of law, ordinance, or charter, the city of Rochester may, by
180.27ordinance, impose an additional sales and use tax of up to one half of one percent. The
180.28provisions of Minnesota Statutes, section 297A.99, subdivisions 1 and 4 to 13, govern
180.29the imposition, administration, collection, and enforcement of the tax authorized under
180.30this paragraph.

180.31    Sec. 10. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by
180.32Laws 2005, First Special Session chapter 3, article 5, section 28, and Laws 2011, First
180.33Special Session chapter 7, article 4, section 5, is amended to read:
181.1    Subd. 3. Use of revenues. (a) Revenues received from the taxes authorized by
181.2subdivisions 1, paragraph (a), and 2 must be used by the city to pay for the cost of
181.3collecting and administering the taxes and to pay for the following projects:
181.4    (1) transportation infrastructure improvements including regional highway and
181.5airport improvements;
181.6    (2) improvements to the civic center complex;
181.7    (3) a municipal water, sewer, and storm sewer project necessary to improve regional
181.8ground water quality; and
181.9    (4) construction of a regional recreation and sports center and other higher education
181.10facilities available for both community and student use.
181.11    (b) The total amount of capital expenditures or bonds for projects listed in paragraph
181.12(a) that may be paid from the revenues raised from the taxes authorized in this section
181.13may not exceed $111,500,000. The total amount of capital expenditures or bonds for the
181.14project in clause (4) that may be paid from the revenues raised from the taxes authorized
181.15in this section may not exceed $28,000,000.
181.16(c) In addition to the projects authorized in paragraph (a) and not subject to the
181.17amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an
181.18election under subdivision 5, paragraph (c), use the revenues received from the taxes and
181.19bonds authorized in this section to pay the costs of or bonds for the following purposes:
181.20(1) $17,000,000 for capital expenditures and bonds for the following Olmsted
181.21County transportation infrastructure improvements:
181.22(i) County State Aid Highway 34 reconstruction;
181.23(ii) Trunk Highway 63 and County State Aid Highway 16 interchange;
181.24(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22 interchange;
181.25(iv) widening of County State Aid Highway 22 West Circle Drive; and
181.26(v) 60th Avenue Northwest corridor preservation;
181.27(2) $30,000,000 for city transportation projects including:
181.28(i) Trunk Highway 52 and 65th Street interchange;
181.29(ii) NW transportation corridor acquisition;
181.30(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;
181.31(iv) Trunk Highway 14 and Trunk Highway 63 intersection;
181.32(v) Southeast transportation corridor acquisition;
181.33(vi) Rochester International Airport expansion; and
181.34(vii) a transit operations center bus facility;
181.35(3) $14,000,000 for the University of Minnesota Rochester academic and
181.36complementary facilities;
182.1(4) $6,500,000 for the Rochester Community and Technical College/Winona State
182.2University career technical education and science and math facilities;
182.3(5) $6,000,000 for the Rochester Community and Technical College regional
182.4recreation facilities at University Center Rochester;
182.5(6) $20,000,000 for the Destination Medical Community Initiative;
182.6(7) $8,000,000 for the regional public safety and 911 dispatch center facilities;
182.7(8) $20,000,000 for a regional recreation/senior center;
182.8(9) $10,000,000 for an economic development fund; and
182.9(10) $8,000,000 for downtown infrastructure.
182.10(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1
182.11and 2 may be used to fund transportation improvements related to a railroad bypass that
182.12would divert traffic from the city of Rochester.
182.13(e) The city shall use $5,000,000 of the money allocated to the purpose in paragraph
182.14(c), clause (9), for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin,
182.15Eyota, Kasson, Mantorville, Oronoco, Pine Island, Plainview, St. Charles, Stewartville,
182.16Zumbrota, Spring Valley, West Concord, and Hayfield for economic development projects
182.17that these communities would fund through their economic development authority or
182.18housing and redevelopment authority.
182.19(e) Notwithstanding Minnesota Statutes, section 297A.99, subdivisions 2 and 3, if
182.20the city decides to extend the taxes in subdivisions 1, paragraph (a), and 2, as allowed
182.21under subdivision 5, paragraph (c), the city must use any amount in excess of the amount
182.22necessary to meet obligations under paragraphs (a) to (c) from those taxes to fund
182.23obligations, including associated financing costs, related to public infrastructure projects
182.24in the development plan adopted under Minnesota Statutes, section 469.42.
182.25(f) Revenues from the tax under subdivision 1, paragraph (b), must be used to fund
182.26obligations, including associated financing costs, related to the public infrastructure
182.27projects contained in the development plan adopted by the city under Minnesota Statutes,
182.28section 469.42.

182.29    Sec. 11. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by
182.30Laws 2005, First Special Session chapter 3, article 5, section 30, and Laws 2011, First
182.31Special Session chapter 7, article 4, section 7, is amended to read:
182.32    Subd. 5. Termination of taxes. (a) The taxes imposed under subdivisions 1 and 2
182.33expire at the later of (1) December 31, 2009, or (2) when the city council determines that
182.34sufficient funds have been received from the taxes to finance the first $71,500,000 of capital
182.35expenditures and bonds for the projects authorized in subdivision 3, including the amount to
183.1prepay or retire at maturity the principal, interest, and premium due on any bonds issued for
183.2the projects under subdivision 4, unless the taxes are extended as allowed in paragraph (b).
183.3Any funds remaining after completion of the project and retirement or redemption of the
183.4bonds shall also be used to fund the projects under subdivision 3. The taxes imposed under
183.5subdivisions 1 and 2 may expire at an earlier time if the city so determines by ordinance.
183.6    (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
183.7other contrary provision of law, ordinance, or city charter, the city of Rochester may, by
183.8ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009,
183.9if approved by the voters of the city at a special election in 2005 or the general election in
183.102006. The question put to the voters must indicate that an affirmative vote would allow
183.11up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000
183.12of bonds to be issued above the amount authorized in the June 23, 1998, referendum for
183.13the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are
183.14extended under this paragraph, the taxes expire when the city council determines that
183.15sufficient funds have been received from the taxes to finance the projects and to prepay
183.16or retire at maturity the principal, interest, and premium due on any bonds issued for the
183.17projects under subdivision 4. Any funds remaining after completion of the project and
183.18retirement or redemption of the bonds may be placed in the general fund of the city.
183.19(c) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any
183.20other contrary provision of law, ordinance, or city charter, the city of Rochester may,
183.21by ordinance, extend the taxes authorized in subdivisions 1, paragraph (a), and 2 up to
183.22December 31, 2041, provided that all additional revenues above those necessary to fund
183.23the projects and associated financing costs listed in subdivision 3, paragraphs (a) to (e),
183.24are committed to fund public infrastructure projects contained in the development plan
183.25adopted under Minnesota Statutes, section 469.42, including all associated financing
183.26costs; otherwise the taxes terminate when beyond the date the city council determines
183.27that sufficient funds have been received from the taxes to finance $111,500,000 of the
183.28expenditures and bonds for the projects authorized in subdivision 3, paragraph (a)
183.29 paragraphs (a) to (e), plus an amount equal to the costs of issuance of the bonds and
183.30including the amount to prepay or retire at maturity the principal, interest, and premiums
183.31due on any bonds issued for the projects under subdivision 4, paragraph (a), if approved
183.32by the voters of the city at the general election in 2012. If the election to authorize the
183.33additional $139,500,000 of bonds plus an amount equal to the costs of the issuance of the
183.34bonds is placed on the general election ballot in 2012, the city may continue to collect the
183.35taxes authorized in subdivisions 1 and 2 until December 31, 2012. The question put to
183.36the voters must indicate that an affirmative vote would allow sales tax revenues be raised
184.1for an extended period of time and an additional $139,500,000 of bonds plus an amount
184.2equal to the costs of issuance of the bonds, to be issued above the amount authorized in
184.3the previous elections required under paragraphs (a) and (b) for the projects and amounts
184.4specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended
184.5under this paragraph, the taxes expire when the city council determines that $139,500,000
184.6has been received from the taxes to finance the projects plus an amount sufficient to
184.7prepay or retire at maturity the principal, interest, and premium due on any bonds issued
184.8for the projects under subdivision 4, including any bonds issued to refund the bonds. Any
184.9funds remaining after completion of the projects and retirement or redemption of the
184.10bonds may be placed in the general fund of the city.
184.11(d) The tax imposed under subdivision 1, paragraph (b), expires at the earlier of
184.122041, or when the city council determines that sufficient funds have been raised from the
184.13tax plus all other city funding sources authorized in this article to meet the city obligation
184.14for financing the public infrastructure projects contained in the development plan adopted
184.15under Minnesota Statutes, section 469.42, including all associated financing costs.

184.16    Sec. 12. ROCHESTER AREA DEVELOPMENT AND TRANSPORTATION
184.17IMPACTS STUDY.
184.18(a) From funds appropriated by law for the purposes of this section, the commissioner
184.19of transportation shall in consultation with the Rochester-Olmsted Council of Governments
184.20enter into an agreement with a consultant to perform a study of economic development
184.21and transportation impacts in the Rochester metropolitan area, including the feasibility of
184.22high-speed rail between Rochester and the seven-county metropolitan area. To be eligible,
184.23a consultant must have experience and expertise in a majority of the following: economics,
184.24economic development, demography, urban planning, engineering, and transportation.
184.25(b) At a minimum, the study under this section must:
184.26(1) utilize at least a 20-year planning horizon;
184.27(2) perform a comprehensive planning assessment of key transportation
184.28infrastructure throughout the Rochester metropolitan area based on (i) long-range
184.29transportation plans developed by the Rochester-Olmsted Council of Governments, and
184.30(ii) expected and potential economic development patterns;
184.31(3) analyze major roadways across all jurisdictions including, but not limited to,
184.32trunk highways; county highways; and arterial city streets; and interconnections with other
184.33modes in conjunction with ongoing rail and airports studies;
185.1(4) analyze the feasibility of a high-speed rail connection between Rochester and the
185.2Mall of America via Minnesota State Highway 77 with connections to the Minneapolis-St.
185.3Paul International Airport and the Union Depot in St. Paul;
185.4(5) to the extent feasible, take into account available data, forecasts, available
185.5transportation demand modeling information, and transportation impacts of major
185.6economic initiatives and proposals including, but not limited to, expansion of the Mayo
185.7Clinic; and
185.8(6) provide scenarios and identify revenue shortfalls to address both short-term and
185.9long-term deficiencies in safety, mobility, congestion, and transportation infrastructure
185.10condition.
185.11(c) By January 15, 2014, the commissioner shall provide an electronic copy of the
185.12study to the chairs and ranking minority members of the legislative committees with
185.13jurisdiction over transportation policy and finance, as provided in Minnesota Statutes,
185.14section 174.02, subdivision 8.

185.15    Sec. 13. EFFECTIVE DATE.
185.16Except as otherwise provided, this article is effective the day after the governing
185.17body of the city of Rochester and its chief clerical officer timely comply with Minnesota
185.18Statutes, section 645.021, subdivisions 2 and 3.


185.21    Section 1. [116C.992] SILICA SAND MINING ACCOUNT.
185.22    A silica sand mining account is created in the special revenue fund. Money in the
185.23account is available for development of model standards, technical assistance to counties
185.24and other governments, other assistance to counties, and other purposes as appropriated
185.25by law.

185.26    Sec. 2. Minnesota Statutes 2012, section 126C.48, subdivision 8, is amended to read:
185.27    Subd. 8. Taconite payment and other reductions. (1) Reductions in levies
185.28pursuant to subdivision 1 must be made prior to the reductions in clause (2).
185.29(2) Notwithstanding any other law to the contrary, districts that have revenue
185.30pursuant to sections 298.018; 298.225; 298.24 to 298.28, except an amount distributed
185.31under sections 298.26; 298.28, subdivision 4, paragraphs (c), clause (ii), and (d); 298.34
185.32to 298.39; 298.391 to 298.396; 298.405; 477A.15; and any law imposing a tax upon
185.33severed mineral values must reduce the levies authorized by this chapter and chapters
186.1120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A by 95 percent of the sum of the
186.2previous year's revenue specified under this clause and the amount attributable to the same
186.3production year distributed to the cities and townships within the school district under
186.4section 298.28, subdivision 2, paragraph (c).
186.5(3) The amount of any voter approved referendum, facilities down payment, and
186.6debt levies shall not be reduced by more than 50 percent under this subdivision. In
186.7administering this paragraph, the commissioner shall first reduce the nonvoter approved
186.8levies of a district; then, if any payments, severed mineral value tax revenue or recognized
186.9revenue under paragraph (2) remains, the commissioner shall reduce any voter approved
186.10referendum levies authorized under section 126C.17; then, if any payments, severed
186.11mineral value tax revenue or recognized revenue under paragraph (2) remains, the
186.12commissioner shall reduce any voter approved facilities down payment levies authorized
186.13under section 123B.63 and then, if any payments, severed mineral value tax revenue or
186.14recognized revenue under paragraph (2) remains, the commissioner shall reduce any
186.15voter approved debt levies.
186.16(4) Before computing the reduction pursuant to this subdivision of the health and
186.17safety levy authorized by sections 123B.57 and 126C.40, subdivision 5, the commissioner
186.18shall ascertain from each affected school district the amount it proposes to levy under
186.19each section or subdivision. The reduction shall be computed on the basis of the amount
186.20so ascertained.
186.21(5) To the extent the levy reduction calculated under paragraph (2) exceeds the
186.22limitation in paragraph (3), an amount equal to the excess must be distributed from the
186.23school district's distribution under sections 298.225, 298.28, and 477A.15 in the following
186.24year to the cities and townships within the school district in the proportion that their
186.25taxable net tax capacity within the school district bears to the taxable net tax capacity of
186.26the school district for property taxes payable in the year prior to distribution. No city or
186.27township shall receive a distribution greater than its levy for taxes payable in the year prior
186.28to distribution. The commissioner of revenue shall certify the distributions of cities and
186.29towns under this paragraph to the county auditor by September 30 of the year preceding
186.30distribution. The county auditor shall reduce the proposed and final levies of cities and
186.31towns receiving distributions by the amount of their distribution. Distributions to the cities
186.32and towns shall be made at the times provided under section 298.27.
186.33EFFECTIVE DATE.This section is effective for levies certified in 2013 and later.

186.34    Sec. 3. [297J.01] DEFINITIONS.
187.1    Subdivision 1. Scope. Unless otherwise defined in this chapter, or unless the
187.2context clearly indicates otherwise, the terms used in this chapter have the meaning given
187.3them in this section. The definitions in this section are for tax administration purposes
187.4and apply to this chapter.
187.5    Subd. 2. Commissioner. "Commissioner" means the commissioner of revenue or a
187.6person to whom the commissioner has delegated functions.
187.7    Subd. 3. Mining. "Mining" means excavating and mining of silica sand by any
187.8process, including digging, excavating, drilling, blasting, tunneling, dredging, stripping,
187.9or by shaft.
187.10    Subd. 4. Person. "Person" means an individual, fiduciary, estate, trust, partnership,
187.11or corporation.
187.12    Subd. 5. Processing. "Processing" means washing, cleaning, screening, crushing,
187.13filtering, sorting, stockpiling, and storing silica sand at the mining site or at any other site.
187.14    Subd. 6. Qualified processor. "Qualified processor" means any person who
187.15operates a mining and processing facility at the same location and uses means to
187.16reasonably prevent silica sand particles from becoming airborne. These methods include,
187.17but are not limited to, prohibiting outdoor storage piles, the use of a slurry pipeline to
187.18carry aggregate material into the washing facility, completely enclosing the washing
187.19facility, and any other means necessary or reasonable to significantly prevent silica sand
187.20particles from becoming airborne.
187.21    Subd. 7. Silica sand. "Silica sand" means well-rounded, sand-sized grains of quartz
187.22(silica dioxide) with very few impurities in terms of other minerals. Specifically, silica
187.23sand for the purpose of this section is commercially valuable for use in the hydraulic
187.24fracturing of shale to obtain oil and natural gas. Silica sand does not include common
187.25rock, stone, aggregate, gravel, sand with a low quartz level, or silica compounds recovered
187.26as a by-product of metallic mining.
187.27    Subd. 8. Temporary storage. "Temporary storage" means the storage of stockpiles
187.28of silica sand that have been transported and are awaiting further transport or processing.
187.29    Subd. 9. Ton. "Ton" means 2,000 pounds.
187.30    Subd. 10. Transporting. "Transporting" means hauling silica sand, by any carrier:
187.31    (1) from the mining site to a processing or transfer site; or
187.32    (2) from a processing or storage site to a rail, barge, or transfer site for shipment.
187.33    Subd. 11. Year. "Year" means a calendar year.
187.34EFFECTIVE DATE.This section is effective the day following final enactment.

187.35    Sec. 4. [297J.02] TAX IMPOSED.
188.1    Subdivision 1. Mining and storage tax; rate. A tax is hereby imposed on any
188.2person who: (1) mines silica sand from within the state; or (2) transports silica sand into
188.3and stores the sand in the state. The rate of tax imposed is 55 cents per cubic yard of silica
188.4sand mined or stored. The volume includes any material removed from the extraction site
188.5prior to washing. For any person mining silica sand in a county that imposes the aggregate
188.6tax authorized under section 298.75, subdivisions 2 and 3, a credit equal to the amount of
188.7aggregate tax paid to the county is applied against the tax due under this section.
188.8    Subd. 2. Processing tax; rate. (a) A tax is hereby imposed on any person engaged
188.9in washing or processing silica sand within the state. The rate of tax imposed is three
188.10percent of the market value of the silica sand processed. Market value is determined based
188.11on the sale price of the processed silica sand.
188.12(b) Notwithstanding paragraph (a), the rate of tax imposed on a qualified processor
188.13is one percent of the market value of the silica sand processed in the state.
188.14    Subd. 3. Exemption. A person is exempt from the mining tax in subdivision 1 if the
188.15person transports less than ten percent of the finished product on public roads.
188.16    Subd. 4. Report and remittance. Taxes imposed by this section are due and
188.17payable to the commissioner when the fracturing sand return is required to be filed.
188.18Persons mining or processing fracturing sand must file their monthly fracturing sand
188.19reports showing the amount of fracturing sand extracted or processed during the month
188.20reported on a form prescribed by the commissioner. Reports of extraction and processing
188.21fracturing sand and taxes imposed under this section must be filed with the commissioner
188.22on or before the 20th day of the month following the close of the previous calendar month.
188.23    Subd. 5. Proceeds of taxes. Revenue received from taxes under this chapter, as
188.24well as all related penalties, interest, fees, and miscellaneous sources of revenue, must be
188.25deposited by the commissioner in the state treasury and credited as follows:
188.26(1) $2,000,000 in fiscal year 2014, $2,690,000 in fiscal year 2015, and $2,000,000 in
188.27each fiscal year thereafter must be credited to the silica sand mining account in the special
188.28revenue fund under section 116C.992; and
188.29(2) the balance of revenues derived from taxes, penalties, interest, fees, and
188.30miscellaneous sources of income are credited to the general fund.
188.31    Subd. 6. Personal debt. The tax imposed by this section, and interest and penalties
188.32imposed with respect to it, are a personal debt of the person required to file a return from
188.33the time the liability for it arises, irrespective of when the time for payment of the liability
188.34occurs. The debt must, in the case of the executor or administrator of the estate of a
188.35decedent and in the case of a fiduciary, be that of the person in the person's official or
188.36fiduciary capacity only unless the person has voluntarily distributed the assets held in that
189.1capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which
189.2event the person is personally liable for any deficiency.
189.3    Subd. 7. Refunds; appropriation. A person who has, under this chapter, paid
189.4to the commissioner an amount of tax for a period in excess of the amount legally due
189.5for that period, may file with the commissioner a claim for a refund of the excess. The
189.6amount necessary to pay the refunds under this subdivision is appropriated from the
189.7general fund to the commissioner.
189.8EFFECTIVE DATE.This section is effective the day following final enactment

189.9    Sec. 5. [297J.03] REGISTRATION; REPORTING; FILING REQUIREMENTS.
189.10    Subdivision 1. Registration. A person who extracts or processes silica sand within
189.11the state must register with the commissioner, on a form prescribed by the commissioner,
189.12for a silica sand identification number. The commissioner shall issue the applicant a
189.13registration number. A registration number is not assignable and is valid only for the
189.14person in whose name it is issued.
189.15    Subd. 2. Reporting. (a) A person who extracts or processes silica sand in this state
189.16must file a report showing the amount of silica sand extracted or processed monthly on or
189.17before the 20th day of the month following the month in which the silica sand was extracted
189.18or processed. The commissioner may inspect the premises, books, and records, of a person
189.19subject to the silica sand tax during the normal business hours of the person extracting or
189.20processing silica sand. A person violating this section is guilty of a misdemeanor.
189.21    (b) A person shall keep at each place of business complete and accurate records
189.22for that place of business, including records of silica sand extracted or processed in the
189.23state. Scale records, sales records, or any other records of tons of silica sand extracted
189.24or processed in this state, produced or maintained by the person extracting or processing
189.25silica sand, must be retained by the person extracting or processing silica sand in this
189.26state. Books, records, invoices, and other papers and documents required by this section
189.27must be kept for a period of at least 3-1/2 years after the date of the monthly silica sand
189.28report unless the commissioner of revenue authorizes, in writing, their destruction or
189.29disposal at an earlier date.
189.30    Subd. 3. Extensions. If, in the commissioner's judgment, good cause exists, the
189.31commissioner may extend the time for filing reports under this section and silica sand
189.32returns under section 297J.02 and for paying taxes under section 297J.02 for not more
189.33than six months.
189.34EFFECTIVE DATE.This section is effective the day following final enactment.

190.1    Sec. 6. [297J.04] LIMITATIONS ON TIME FOR ASSESSMENT OF TAX.
190.2    Subdivision 1. Assessment. Except as otherwise provided in this chapter, the
190.3amount of taxes assessable must be assessed within 3-1/2 years after the date the return is
190.4filed, whether or not the return is filed on or after the date prescribed. A return must not be
190.5treated as filed until it is in processible form. A return is in processible form if it is filed
190.6on a permitted form and contains sufficient data to identify the taxpayer and permit the
190.7mathematical verification of the tax liability shown on the return. For purposes of this
190.8section, a return filed before the last day prescribed by law for filing is considered to
190.9be filed on the last day.
190.10    Subd. 2. False or fraudulent return. Notwithstanding subdivision 1, the tax may be
190.11assessed at any time if a false or fraudulent return is filed or if a taxpayer fails to file a return.
190.12    Subd. 3. Omission in excess of 25 percent. Additional taxes may be assessed
190.13within 6-1/2 years after the due date of the return or the date the return was filed,
190.14whichever is later, if the taxpayer omits from a return taxes in excess of 25 percent of
190.15the taxes reported in the return.
190.16    Subd. 4. Time limit on refunds. Unless otherwise provided in this chapter, a claim
190.17for a refund of an overpayment of tax must be filed within 3-1/2 years from the date
190.18prescribed for filing the silica sand tax return. Interest on refunds must be computed at
190.19the rate specified in section 270C.405 from the date of payment to the date the refund is
190.20paid or credited. For purposes of this subdivision, the date of payment is the later of the
190.21date the tax was finally due or was paid.
190.22    Subd. 5. Bankruptcy; suspension of time. The time during which a tax must be
190.23assessed or collection proceedings begun is suspended during the period from the date of a
190.24filing of a petition in bankruptcy until 30 days after either: (1) notice to the commissioner
190.25that the bankruptcy proceedings have been closed or dismissed; or (2) the automatic stay
190.26has been ended or has expired, whichever occurs first. The suspension of the statute of
190.27limitations under this subdivision applies to the person the petition in bankruptcy is filed
190.28against, and all other persons who may also be wholly or partially liable for the tax.
190.29    Subd. 6. Extension agreement. If, before the expiration of time prescribed in
190.30subdivisions 1 and 4 for the assessment of tax or the filing of a claim for refund, both the
190.31commissioner and the taxpayer have consented in writing to the assessment or filing of a
190.32claim for refund after that time, the tax may be assessed or the claim for refund filed at any
190.33time before the expiration of the agreed upon period. The period may be extended by later
190.34agreements in writing before the expiration of the period previously agreed upon.
190.35EFFECTIVE DATE.This section is effective the day following final enactment

191.1    Sec. 7. [297J.05] CIVIL PENALTIES.
191.2    Subdivision 1. Penalty for failure to pay tax. If a tax is not paid within the time
191.3specified for payment, a penalty is added to the amount required to be shown as tax. The
191.4penalty is five percent of the unpaid tax if the failure is for not more than 30 days, with
191.5an additional penalty of five percent of the amount of tax remaining unpaid during each
191.6additional 30 days or fraction of 30 days during which the failure continues, not exceeding
191.715 percent in the aggregate. For purposes of this subdivision, if the taxpayer has not filed
191.8a return, the time specified for payment is the final date a return should have been filed.
191.9    Subd. 2. Penalty for failure to make and file return. If a taxpayer fails to make
191.10and file a return within the time prescribed or an extension, a penalty is added to the tax.
191.11The penalty is five percent of the amount of tax not paid on or before the date prescribed
191.12for payment of the tax.
191.13    Subd. 3. Penalty for intentional disregard of law or rules. If part of an additional
191.14assessment is due to negligence or intentional disregard of the provisions of this chapter or
191.15rules of the commissioner of revenue (but without intent to defraud), there is added to the
191.16tax an amount equal to ten percent of the additional assessment.
191.17    Subd. 4. Penalty for false or fraudulent return; evasion. If a person files a false
191.18or fraudulent return, or attempts in any manner to evade or defeat a tax or payment of
191.19tax, there is imposed on the person a penalty equal to 50 percent of the tax found due
191.20for the period to which the return related, less amounts paid by the person on the basis
191.21of the false or fraudulent return.
191.22    Subd. 5. Penalty for repeated failures to file returns or pay taxes. If there is a
191.23pattern by a person of repeated failures to timely file returns or timely pay taxes, and
191.24written notice is given that a penalty will be imposed if such failures continue, a penalty
191.25of 25 percent of the amount of tax not timely paid as a result of each such subsequent
191.26failure is added to the tax. The penalty can be abated under the abatement authority in
191.27section 270C.34.
191.28    Subd. 6. Payment of penalties. The penalties imposed by this section must be
191.29collected and paid in the same manner as taxes. These penalties are in addition to criminal
191.30penalties imposed by this chapter.
191.31EFFECTIVE DATE.This section is effective the day following final enactment.

191.32    Sec. 8. [297J.07] INTEREST.
191.33    Subdivision 1. Rate. If an interest assessment is required under this section, interest
191.34is computed at the rate specified in section 270C.40.
192.1    Subd. 2. Late payment. If a tax is not paid within the time specified by law for
192.2payment, the unpaid tax bears interest from the date the tax should have been paid until
192.3the date the tax is paid.
192.4    Subd. 3. Extensions. If an extension of time for payment has been granted, interest
192.5must be paid from the date the payment should have been made if no extension had been
192.6granted, until the date the tax is paid.
192.7    Subd. 4. Additional assessments. If a taxpayer is liable for additional taxes because
192.8of a redetermination by the commissioner, or for any other reason, the additional taxes
192.9bear interest from the time the tax should have been paid, without regard to any extension
192.10allowed, until the date the tax is paid.
192.11    Subd. 5. Erroneous refunds. In the case of an erroneous refund, interest accrues
192.12from the date the refund was paid unless the erroneous refund results from a mistake of
192.13the department, then no interest or penalty is imposed unless the deficiency assessment is
192.14not satisfied within 60 days of the order.
192.15    Subd. 6. Interest on judgments. Notwithstanding section 549.09, if judgment is
192.16entered in favor of the commissioner with regard to any tax, the judgment bears interest
192.17at the rate specified in section 270C.40 from the date the judgment is entered until the
192.18date of payment.
192.19    Subd. 7. Interest on penalties. A penalty imposed under section 297J.05,
192.20subdivision 1, 2, 3, 4, or 5, bears interest from the date the return or payment was required
192.21to be filed or paid, including any extensions, to the date of payment of the penalty.
192.22EFFECTIVE DATE.This section is effective the day following final enactment.

192.23    Sec. 9. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
192.24    Subd. 3. Occupation tax; other ores. Every person engaged in the business of
192.25mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
192.26taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
192.27in this subdivision. For purposes of this subdivision, mining includes the application
192.28of hydrometallurgical processes. The tax is determined in the same manner as the tax
192.29imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17,
192.30subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must be
192.31computed by applying to taxable income the rate of 2.45 percent equal to one-half of
192.32the rate that applies under section 290.06, subdivision 1, for the taxable year. A person
192.33subject to occupation tax under this section shall apportion its net income on the basis of
192.34the percentage obtained by taking the sum of:
193.1(1) 75 percent of the percentage which the sales made within this state in connection
193.2with the trade or business during the tax period are of the total sales wherever made in
193.3connection with the trade or business during the tax period;
193.4(2) 12.5 percent of the percentage which the total tangible property used by the
193.5taxpayer in this state in connection with the trade or business during the tax period is of
193.6the total tangible property, wherever located, used by the taxpayer in connection with the
193.7trade or business during the tax period; and
193.8(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
193.9in this state or paid in respect to labor performed in this state in connection with the trade
193.10or business during the tax period are of the taxpayer's total payrolls paid or incurred in
193.11connection with the trade or business during the tax period.
193.12The tax is in addition to all other taxes.
193.13EFFECTIVE DATE.This section is effective the day following final enactment.

193.14    Sec. 10. Minnesota Statutes 2012, section 298.01, subdivision 4, is amended to read:
193.15    Subd. 4. Occupation tax; iron ore; taconite concentrates. A person engaged in
193.16the business of mining or producing of iron ore, taconite concentrates or direct reduced ore
193.17in this state shall pay an occupation tax to the state of Minnesota. The tax is determined
193.18in the same manner as the tax imposed by section 290.02, except that sections 290.05,
193.19subdivision 1 , clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not apply,
193.20and the occupation tax shall be computed by applying to taxable income the rate of 2.45
193.21 percent equal to one-half of the rate that applies under section 290.06, subdivision 1, for
193.22the taxable year. A person subject to occupation tax under this section shall apportion its
193.23net income on the basis of the percentage obtained by taking the sum of:
193.24(1) 75 percent of the percentage which the sales made within this state in connection
193.25with the trade or business during the tax period are of the total sales wherever made in
193.26connection with the trade or business during the tax period;
193.27(2) 12.5 percent of the percentage which the total tangible property used by the
193.28taxpayer in this state in connection with the trade or business during the tax period is of
193.29the total tangible property, wherever located, used by the taxpayer in connection with the
193.30trade or business during the tax period; and
193.31(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
193.32in this state or paid in respect to labor performed in this state in connection with the trade
193.33or business during the tax period are of the taxpayer's total payrolls paid or incurred in
193.34connection with the trade or business during the tax period.
193.35The tax is in addition to all other taxes.
194.1EFFECTIVE DATE.This section is effective for taxable years beginning after
194.2December 31, 2012.

194.3    Sec. 11. Minnesota Statutes 2012, section 298.227, as amended by Laws 2013, chapter
194.43, section 17, is amended to read:
194.5298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
194.6    (a) An amount equal to that distributed pursuant to each taconite producer's taxable
194.7production and qualifying sales under section 298.28, subdivision 9a, shall be held by
194.8the Iron Range Resources and Rehabilitation Board in a separate taconite economic
194.9development fund for each taconite and direct reduced ore producer. Money from the
194.10fund for each producer shall be released by the commissioner after review by a joint
194.11committee consisting of an equal number of representatives of the salaried employees and
194.12the nonsalaried production and maintenance employees of that producer. The District 11
194.13director of the United States Steelworkers of America, on advice of each local employee
194.14president, shall select the employee members. In nonorganized operations, the employee
194.15committee shall be elected by the nonsalaried production and maintenance employees. The
194.16review must be completed no later than six months after the producer presents a proposal
194.17for expenditure of the funds to the committee. The funds held pursuant to this section may
194.18be released only for workforce development and associated public facility improvement,
194.19or for acquisition of plant and stationary mining equipment and facilities for the producer
194.20or for research and development in Minnesota on new mining, or taconite, iron, or steel
194.21production technology, but only if the producer provides a matching expenditure equal to
194.22the amount of the distribution to be used for the same purpose of at least 50 percent of
194.23the distribution based on 14.7 cents per ton beginning with distributions in 2002 2014.
194.24Effective for proposals for expenditures of money from the fund beginning May 26, 2007,
194.25the commissioner may not release the funds before the next scheduled meeting of the
194.26board. If a proposed expenditure is not approved by the board, the funds must be deposited
194.27in the Taconite Environmental Protection Fund under sections 298.222 to 298.225. If a
194.28producer uses money which has been released from the fund prior to May 26, 2007 to
194.29procure haulage trucks, mobile equipment, or mining shovels, and the producer removes
194.30the piece of equipment from the taconite tax relief area defined in section 273.134 within
194.31ten years from the date of receipt of the money from the fund, a portion of the money
194.32granted from the fund must be repaid to the taconite economic development fund. The
194.33portion of the money to be repaid is 100 percent of the grant if the equipment is removed
194.34from the taconite tax relief area within 12 months after receipt of the money from the fund,
194.35declining by ten percent for each of the subsequent nine years during which the equipment
195.1remains within the taconite tax relief area. If a taconite production facility is sold after
195.2operations at the facility had ceased, any money remaining in the fund for the former
195.3producer may be released to the purchaser of the facility on the terms otherwise applicable
195.4to the former producer under this section. If a producer fails to provide matching funds
195.5for a proposed expenditure within six months after the commissioner approves release
195.6of the funds, the funds are available for release to another producer in proportion to the
195.7distribution provided and under the conditions of this section. Any portion of the fund
195.8which is not released by the commissioner within one year of its deposit in the fund shall
195.9be divided between the taconite environmental protection fund created in section 298.223
195.10and the Douglas J. Johnson economic protection trust fund created in section 298.292 for
195.11placement in their respective special accounts. Two-thirds of the unreleased funds shall be
195.12distributed to the taconite environmental protection fund and one-third to the Douglas J.
195.13Johnson economic protection trust fund.
195.14    (b)(i) Notwithstanding the requirements of paragraph (a), setting the amount of
195.15distributions and the review process, an amount equal to ten cents per taxable ton of
195.16production in 2007, for distribution in 2008 only, that would otherwise be distributed
195.17under paragraph (a), may be used for a loan or grant for the cost of providing for a
195.18value-added wood product facility located in the taconite tax relief area and in a county
195.19that contains a city of the first class. This amount must be deducted from the distribution
195.20under paragraph (a) for which a matching expenditure by the producer is not required. The
195.21granting of the loan or grant is subject to approval by the board. If the money is provided
195.22as a loan, interest must be payable on the loan at the rate prescribed in section 298.2213,
195.23subdivision 3 . (ii) Repayments of the loan and interest, if any, must be deposited in the
195.24taconite environment protection fund under sections 298.222 to 298.225. If a loan or
195.25grant is not made under this paragraph by July 1, 2012, the amount that had been made
195.26available for the loan under this paragraph must be transferred to the taconite environment
195.27protection fund under sections 298.222 to 298.225. (iii) Money distributed in 2008 to the
195.28fund established under this section that exceeds ten cents per ton is available to qualifying
195.29producers under paragraph (a) on a pro rata basis.
195.30(c) Repayment or transfer of money to the taconite environmental protection fund
195.31under paragraph (b), item (ii), must be allocated by the Iron Range Resources and
195.32Rehabilitation Board for public works projects in house legislative districts in the same
195.33proportion as taxable tonnage of production in 2007 in each house legislative district, for
195.34distribution in 2008, bears to total taxable tonnage of production in 2007, for distribution
195.35in 2008. Notwithstanding any other law to the contrary, expenditures under this paragraph
196.1do not require approval by the governor. For purposes of this paragraph, "house legislative
196.2districts" means the legislative districts in existence on May 15, 2009.
196.3EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

196.4    Sec. 12. Minnesota Statutes 2012, section 298.24, subdivision 1, is amended to read:
196.5    Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002,
196.6and 2003 2013, there is imposed upon taconite and iron sulphides, and upon the mining
196.7and quarrying thereof, and upon the production of iron ore concentrate therefrom, and
196.8upon the concentrate so produced, a tax of $2.103 $2.56 per gross ton of merchantable
196.9iron ore concentrate produced therefrom. For concentrates produced in 2005, the tax rate
196.10is the same rate imposed for concentrates produced in 2004. For concentrates produced in
196.112009 and subsequent years, The tax is also imposed upon other iron-bearing material.
196.12    (b) For concentrates produced in 2006 2014 and subsequent years, the tax rate shall
196.13be equal to the preceding year's tax rate plus an amount equal to the preceding year's tax
196.14rate multiplied by the percentage increase in the implicit price deflator from the fourth
196.15quarter of the second preceding year to the fourth quarter of the preceding year. "Implicit
196.16price deflator" means the implicit price deflator for the gross domestic product prepared by
196.17the Bureau of Economic Analysis of the United States Department of Commerce.
196.18    (c) An additional tax is imposed equal to three cents per gross ton of merchantable
196.19iron ore concentrate for each one percent that the iron content of the product exceeds 72
196.20percent, when dried at 212 degrees Fahrenheit.
196.21    (d) The tax on taconite and iron sulphides shall be imposed on the average of the
196.22production for the current year and the previous two years. The rate of the tax imposed
196.23will be the current year's tax rate. This clause shall not apply in the case of the closing
196.24of a taconite facility if the property taxes on the facility would be higher if this clause
196.25and section 298.25 were not applicable. The tax on other iron-bearing material shall be
196.26imposed on the current year production.
196.27    (e) If the tax or any part of the tax imposed by this subdivision is held to be
196.28unconstitutional, a tax of $2.103 $2.56 per gross ton of merchantable iron ore concentrate
196.29produced shall be imposed.
196.30    (f) Consistent with the intent of this subdivision to impose a tax based upon the
196.31weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
196.32determine the weight of merchantable iron ore concentrate included in fluxed pellets by
196.33subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
196.34flux additives included in the pellets from the weight of the pellets. For purposes of this
196.35paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
197.1olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
197.2No subtraction from the weight of the pellets shall be allowed for binders, mineral and
197.3chemical additives other than basic flux additives, or moisture.
197.4    (g)(1) Notwithstanding any other provision of this subdivision, for the first two years
197.5of a plant's commercial production of direct reduced ore from ore mined in this state, no
197.6tax is imposed under this section. As used in this paragraph, "commercial production" is
197.7production of more than 50,000 tons of direct reduced ore in the current year or in any prior
197.8year, "noncommercial production" is production of 50,000 tons or less of direct reduced ore
197.9in any year, and "direct reduced ore" is ore that results in a product that has an iron content
197.10of at least 75 percent. For the third year of a plant's commercial production of direct
197.11reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate otherwise
197.12determined under this subdivision. For the fourth commercial production year, the rate is
197.1350 percent of the rate otherwise determined under this subdivision; for the fifth commercial
197.14production year, the rate is 75 percent of the rate otherwise determined under this
197.15subdivision; and for all subsequent commercial production years, the full rate is imposed.
197.16    (2) Subject to clause (1), production of direct reduced ore in this state is subject to
197.17the tax imposed by this section, but if that production is not produced by a producer of
197.18taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron
197.19sulfides, or other iron-bearing material, that is consumed in the production of direct
197.20reduced iron in this state is not subject to the tax imposed by this section on taconite,
197.21iron sulfides, or other iron-bearing material.
197.22    (3) Notwithstanding any other provision of this subdivision, no tax is imposed
197.23on direct reduced ore under this section during the facility's noncommercial production
197.24of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
197.25production of direct reduced ore is subject to the tax imposed by this section on taconite
197.26and iron sulphides. Three-year average production of direct reduced ore does not
197.27include production of direct reduced ore in any noncommercial year. Three-year average
197.28production for a direct reduced ore facility that has noncommercial production is the
197.29average of the commercial production of direct reduced ore for the current year and the
197.30previous two commercial years.
197.31    (4) This paragraph applies only to plants for which all environmental permits have
197.32been obtained and construction has begun before July 1, 2008.
197.33EFFECTIVE DATE.This section is effective beginning for the 2013 production
197.34year.

197.35    Sec. 13. Minnesota Statutes 2012, section 298.28, subdivision 4, is amended to read:
198.1    Subd. 4. School districts. (a) 23.15 32.15 cents per taxable ton, plus the increase
198.2provided in paragraph (d), less the amount that would have been computed under
198.3Minnesota Statutes 2008, section 126C.21, subdivision 4, for the current year for that
198.4district, must be allocated to qualifying school districts to be distributed, based upon the
198.5certification of the commissioner of revenue, under paragraphs (b), (c), and (f).
198.6    (b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which
198.7the lands from which taconite was mined or quarried were located or within which the
198.8concentrate was produced. The distribution must be based on the apportionment formula
198.9prescribed in subdivision 2.
198.10    (ii) Four cents per taxable ton from each taconite facility must be distributed to
198.11each affected school district for deposit in a fund dedicated to building maintenance
198.12and repairs, as follows:
198.13    (1) proceeds from Keewatin Taconite or its successor are distributed to Independent
198.14School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
198.15districts;
198.16    (2) proceeds from the Hibbing Taconite Company or its successor are distributed to
198.17Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
198.18districts;
198.19    (3) proceeds from the Mittal Steel Company and Minntac or their successors are
198.20distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
198.212711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
198.22    (4) proceeds from the Northshore Mining Company or its successor are distributed
198.23to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior,
198.24or their successor districts; and
198.25    (5) proceeds from United Taconite or its successor are distributed to Independent
198.26School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
198.27successor districts.
198.28    Revenues that are required to be distributed to more than one district shall be
198.29apportioned according to the number of pupil units identified in section 126C.05,
198.30subdivision 1 , enrolled in the second previous year.
198.31    (c)(i) 15.72 24.72 cents per taxable ton, less any amount distributed under paragraph
198.32(e), shall be distributed to a group of school districts comprised of those school districts
198.33which qualify as a tax relief area under section 273.134, paragraph (b), or in which there is
198.34a qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion
198.35to school district indexes as follows: for each school district, its pupil units determined
198.36under section 126C.05 for the prior school year shall be multiplied by the ratio of the
199.1average adjusted net tax capacity per pupil unit for school districts receiving aid under
199.2this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
199.3ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
199.4Each district shall receive that portion of the distribution which its index bears to the sum
199.5of the indices for all school districts that receive the distributions.
199.6    (ii) Notwithstanding clause (i), each school district that receives a distribution
199.7under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this
199.8clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on
199.9severed mineral values after reduction for any portion distributed to cities and towns
199.10under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its
199.11levy reduction under section 126C.48, subdivision 8, for the second year prior to the
199.12year of the distribution shall receive a distribution equal to the difference; the amount
199.13necessary to make this payment shall be derived from proportionate reductions in the
199.14initial distribution to other school districts under clause (i). If there are insufficient tax
199.15proceeds to make the distribution provided under this paragraph in any year, money must
199.16be transferred from the taconite property tax relief account in subdivision 6, to the extent
199.17of the shortfall in the distribution.
199.18    (d)(1) Any school district described in paragraph (c) where a levy increase pursuant
199.19to section 126C.17, subdivision 9, was authorized by referendum for taxes payable in
199.202001, shall receive a distribution of 21.3 cents per ton. Each district shall receive $175
199.21times the pupil units identified in section 126C.05, subdivision 1, enrolled in the second
199.22previous year or the 1983-1984 school year, whichever is greater, less the product of 1.8
199.23percent times the district's taxable net tax capacity in the second previous year 2011.
199.24(2) Districts qualifying under paragraph (c) must receive additional taconite aid each
199.25year equal to 22.5 percent of the amount obtained by subtracting:
199.26(i) 1.8 percent of the district's net tax capacity for 2011, from:
199.27(ii) the district's weighted average daily membership for fiscal year 2012 multiplied
199.28by the sum of:
199.29(A) $415, plus
199.30(B) the district's referendum revenue allowance for fiscal year 2013.
199.31    If the total amount provided by paragraph (d) is insufficient to make the payments
199.32herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
199.33so as not to exceed the funds available. Any amounts received by a qualifying school
199.34district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
199.35education aid which the district receives pursuant to section 126C.13 or the permissible
199.36levies of the district. Any amount remaining after the payments provided in this paragraph
200.1shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
200.2deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
200.3economic protection trust fund as provided in subdivision 11.
200.4    Each district receiving money according to this paragraph shall reserve the lesser of
200.5the amount received under this paragraph or $25 times the number of pupil units served
200.6in the district. It may use the money for early childhood programs or for outcome-based
200.7learning programs that enhance the academic quality of the district's curriculum. The
200.8outcome-based learning programs must be approved by the commissioner of education.
200.9    (e) There shall be distributed to any school district the amount which the school
200.10district was entitled to receive under section 298.32 in 1975.
200.11    (f) Four cents per taxable ton must be distributed to qualifying school districts
200.12according to the distribution specified in paragraph (b), clause (ii), and two 11 cents
200.13per taxable ton must be distributed according to the distribution specified in paragraph
200.14(c). These amounts are not subject to sections 126C.21, subdivision 4, and 126C.48,
200.15subdivision 8 .
200.16EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

200.17    Sec. 14. Minnesota Statutes 2012, section 298.28, subdivision 6, is amended to read:
200.18    Subd. 6. Property tax relief. (a) In 2002 2014 and thereafter, 33.9 34.8 cents per
200.19taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or
200.20section 298.2961, subdivision 5, must be allocated to St. Louis County acting as the
200.21counties' fiscal agent, to be distributed as provided in sections 273.134 to 273.136.
200.22    (b) If an electric power plant owned by and providing the primary source of power
200.23for a taxpayer mining and concentrating taconite is located in a county other than the
200.24county in which the mining and the concentrating processes are conducted, .1875 cent per
200.25taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.
200.26    (c) If an electric power plant owned by and providing the primary source of power
200.27for a taxpayer mining and concentrating taconite is located in a school district other than
200.28a school district in which the mining and concentrating processes are conducted, .4541
200.29cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to
200.30the school district.
200.31EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

200.32    Sec. 15. Minnesota Statutes 2012, section 298.28, subdivision 10, is amended to read:
201.1    Subd. 10. Increase. (a) Except as provided in paragraph (b), beginning with
201.2distributions in 2000, the amount determined under subdivision 9 shall be increased in the
201.3same proportion as the increase in the implicit price deflator as provided in section 298.24,
201.4subdivision 1 . Beginning with distributions in 2003 2015, the amount determined under
201.5subdivision 6, paragraph (a), shall be increased in the same proportion as the increase in
201.6the implicit price deflator as provided in section 298.24, subdivision 1.
201.7(b) For distributions in 2005 and subsequent years, an amount equal to the increased
201.8tax proceeds attributable to the increase in the implicit price deflator as provided in
201.9section 298.24, subdivision 1, for taxes paid in 2005, except for the amount of revenue
201.10increases provided in subdivision 4, paragraph (d), is distributed to the grant and loan fund
201.11established in section 298.2961, subdivision 4.
201.12EFFECTIVE DATE.This section is effective beginning for the 2014 distribution.

201.13    Sec. 16. Minnesota Statutes 2012, section 298.75, subdivision 2, is amended to read:
201.14    Subd. 2. Tax imposed. (a) Except as provided in paragraph (e), a county that
201.15imposes the aggregate production tax shall impose upon every operator a production tax
201.16of 21.5 cents per cubic yard or 15 cents per ton of aggregate material excavated in the
201.17county except that the county board may decide not to impose this tax if it determines
201.18that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
201.19aggregate material from that county. A county board may authorize an additional tax on
201.20aggregate material excavated in the county of up to 43 cents per cubic yard or 30 cents
201.21per ton of aggregate material excavated in the county. The tax shall not be imposed on
201.22aggregate material excavated in the county until the aggregate material is transported from
201.23the extraction site or sold, whichever occurs first. When aggregate material is stored in a
201.24stockpile within the state of Minnesota and a public highway, road or street is not used
201.25for transporting the aggregate material, the tax shall not be imposed until either when the
201.26aggregate material is sold, or when it is transported from the stockpile site, or when it is
201.27used from the stockpile, whichever occurs first.
201.28    (b) Except as provided in paragraph (e), a county that imposes the aggregate
201.29production tax under paragraph (a) shall impose upon every importer a production tax
201.30of 21.5 cents per cubic yard or 15 cents per ton of aggregate material imported into the
201.31county. A county board may authorize an additional tax on every importer of up to 43
201.32cents per cubic yard or 30 cents per ton of aggregate material imported into the county.
201.33 The tax shall be imposed when the aggregate material is imported from the extraction site
201.34or sold. When imported aggregate material is stored in a stockpile within the state of
201.35Minnesota and a public highway, road, or street is not used for transporting the aggregate
202.1material, the tax shall be imposed either when the aggregate material is sold, when it is
202.2transported from the stockpile site, or when it is used from the stockpile, whichever occurs
202.3first. The tax shall be imposed on an importer when the aggregate material is imported
202.4into the county that imposes the tax.
202.5    (c) If the aggregate material is transported directly from the extraction site to a
202.6waterway, railway, or another mode of transportation other than a highway, road or street,
202.7the tax imposed by this section shall be apportioned equally between the county where the
202.8aggregate material is extracted and the county to which the aggregate material is originally
202.9transported. If that destination is not located in Minnesota, then the county where the
202.10aggregate material was extracted shall receive all of the proceeds of the tax.
202.11    (d) A county, city, or town that receives revenue under this section is prohibited
202.12from imposing any additional host community fees on aggregate production within that
202.13county, city, or town.
202.14    (e) A county that borders two other states and that is not contiguous to a county
202.15that imposes a tax under this section may impose the taxes under paragraphs (a) and (b)
202.16at the rate of ten cents per cubic yard or seven cents per ton. This paragraph expires
202.17December 31, 2014.
202.18EFFECTIVE DATE.This section is effective the day following final enactment.

202.19    Sec. 17. 2013 DISTRIBUTION ONLY.
202.20For the 2013 distribution, a special fund is established to receive $4,700,000 of the
202.21amount that otherwise would be distributed under Minnesota Statutes, section 298.28,
202.22subdivision 6, and this amount must be paid as follows:
202.23(1) $2,000,000 to the city of Hibbing for improvements to the city's water supply
202.24system;
202.25(2) $1,700,000 to the city of Mountain Iron for the cost of moving utilities required
202.26as a result of actions undertaken by United States Steel Corporation; and
202.27(3) $1,000,000 to the city of Tower for improvements to a marina.
202.28EFFECTIVE DATE.This section is effective for the 2013 distribution, all of which
202.29must be made in the August 2013 payment.

202.30    Sec. 18. IRON RANGE RESOURCES AND REHABILITATION
202.31COMMISSIONER; BONDS AUTHORIZED.
202.32    Subdivision 1. Issuance; purpose. Notwithstanding any provision of Minnesota
202.33Statutes, chapter 298, to the contrary, the commissioner of Iron Range resources and
203.1rehabilitation may issue revenue bonds in a principal amount of $38,000,000 in one or more
203.2series, and bonds to refund those bonds. The proceeds of the bonds must be used to make
203.3grants to school districts located in the taconite tax relief area defined in Minnesota Statutes,
203.4section 273.134, or the taconite assistance area defined in Minnesota Statutes, section
203.5273.1341, to be used by the school districts to pay for building projects, such as energy
203.6efficiency, technology, infrastructure, health, safety, and maintenance improvements.
203.7    Subd. 2. Appropriation. (a) There is annually appropriated from the distribution of
203.8taconite production tax revenues under Minnesota Statues, section 298.28, prior to the
203.9calculation of the amount of the remainder under Minnesota Statutes, section 298.28,
203.10subdivision 11, an amount sufficient to pay when due the principal and interest on the
203.11bonds issued pursuant to subdivision 1. The appropriation under this section must not
203.12exceed an amount equal to ten cents per taxable ton.
203.13    (b) If in any year the amount available under paragraph (a) is insufficient to pay
203.14principal and interest due on the bonds in that year, an additional amount is appropriated
203.15from the Douglas J. Johnson fund to make up the deficiency.
203.16    (c) The appropriation under this subdivision terminates upon payment or maturity of
203.17the last of the bonds issued under this section.
203.18    Subd. 3. Credit enhancement. The bonds issued under this section are "debt
203.19obligations" and the commissioner of Iron Range resources and rehabilitation is a "district"
203.20for purposes of Minnesota Statutes, section 126C.55, provided that advances made under
203.21Minnesota Statutes, section 126C.55, subdivision 2, are not subject to Minnesota Statutes,
203.22section 126C.55, subdivisions 4 to 7.
203.23EFFECTIVE DATE.This section is effective the day following final enactment and
203.24applies beginning with the 2014 distribution under Minnesota Statutes, section 298.28.


203.27    Section 1. Minnesota Statutes 2012, section 118A.04, subdivision 3, is amended to read:
203.28    Subd. 3. State and local securities. Funds may be invested in the following:
203.29(1) any security which is a general obligation of any state or local government with
203.30taxing powers which is rated "A" or better by a national bond rating service;
203.31(2) any security which is a revenue obligation of any state or local government with
203.32taxing powers which is rated "AA" or better by a national bond rating service; and
204.1(3) a general obligation of the Minnesota housing finance agency which is a moral
204.2obligation of the state of Minnesota and is rated "A" or better by a national bond rating
204.3agency.; and
204.4(4) any security which is an obligation of a school district with an original maturity
204.5not exceeding 13 months and (i) rated in the highest category by a national bond rating
204.6service or (ii) enrolled in the credit enhancement program pursuant to section 126C.55.

204.7    Sec. 2. Minnesota Statutes 2012, section 118A.05, subdivision 5, is amended to read:
204.8    Subd. 5. Guaranteed investment contracts. Agreements or contracts for
204.9guaranteed investment contracts may be entered into if they are issued or guaranteed
204.10by United States commercial banks, domestic branches of foreign banks, United States
204.11insurance companies, or their Canadian subsidiaries, or the domestic affiliates of any
204.12of the foregoing. The credit quality of the issuer's or guarantor's short- and long-term
204.13unsecured debt must be rated in one of the two highest categories by a nationally
204.14recognized rating agency. Agreements or contracts for guaranteed investment contracts
204.15with a term of 18 months or less may be entered into regardless of the credit quality of
204.16the issuer's or guarantor's long-term unsecured debt, provided that the credit quality of
204.17the issuer's short-term unsecured debt is rated in the highest category by a nationally
204.18recognized rating agency. Should the issuer's or guarantor's credit quality be downgraded
204.19below "A", the government entity must have withdrawal rights.

204.20    Sec. 3. Minnesota Statutes 2012, section 216C.436, subdivision 7, is amended to read:
204.21    Subd. 7. Repayment. An implementing entity that finances an energy improvement
204.22under this section must:
204.23(1) secure payment with a lien against the benefited qualifying real property; and
204.24(2) collect repayments as a special assessment as provided for in section 429.101
204.25or by charter, provided that special assessments may be made payable in up to 20 equal
204.26annual installments.
204.27If the implementing entity is an authority, the local government that authorized
204.28the authority to act as implementing entity shall impose and collect special assessments
204.29necessary to pay debt service on bonds issued by the implementing entity under subdivision
204.308, and shall transfer all collections of the assessments upon receipt to the authority.

204.31    Sec. 4. Minnesota Statutes 2012, section 373.01, subdivision 3, is amended to read:
204.32    Subd. 3. Capital notes. (a) A county board may, by resolution and without
204.33referendum, issue capital notes subject to the county debt limit to purchase capital
205.1equipment useful for county purposes that has an expected useful life at least equal to the
205.2term of the notes. The notes shall be payable in not more than ten years and shall be
205.3issued on terms and in a manner the board determines. A tax levy shall be made for
205.4payment of the principal and interest on the notes, in accordance with section 475.61,
205.5as in the case of bonds.
205.6    (b) For purposes of this subdivision, "capital equipment" means:
205.7    (1) public safety, ambulance, road construction or maintenance, and medical
205.8equipment; and
205.9    (2) computer hardware and software, without regard to its expected useful life,
205.10whether bundled with machinery or equipment or unbundled., together with application
205.11development services and training related to the use of the computer hardware or software.

205.12    Sec. 5. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read:
205.13    Subdivision 1. Definitions. For purposes of this section, the following terms have
205.14the meanings given.
205.15(a) "Bonds" means an obligation as defined under section 475.51.
205.16(b) "Capital improvement" means acquisition or betterment of public lands,
205.17buildings, or other improvements within the county for the purpose of a county courthouse,
205.18administrative building, health or social service facility, correctional facility, jail, law
205.19enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads
205.20and bridges, public works facilities, fairground buildings, and records and data storage
205.21facilities, and the acquisition of development rights in the form of conservation easements
205.22under chapter 84C. An improvement must have an expected useful life of five years or more
205.23to qualify. "Capital improvement" does not include a recreation or sports facility building
205.24(such as, but not limited to, a gymnasium, ice arena, racquet sports facility, swimming
205.25pool, exercise room or health spa), unless the building is part of an outdoor park facility
205.26and is incidental to the primary purpose of outdoor recreation. For purposes of this section,
205.27"capital improvement" includes expenditures for purposes described in this paragraph that
205.28have been incurred by a county before approval of a capital improvement plan, if such
205.29expenditures are included in a capital improvement plan approved on or before the date of
205.30the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
205.31(c) "Metropolitan county" means a county located in the seven-county metropolitan
205.32area as defined in section 473.121 or a county with a population of 90,000 or more.
205.33(d) "Population" means the population established by the most recent of the
205.34following (determined as of the date the resolution authorizing the bonds was adopted):
205.35(1) the federal decennial census,
206.1(2) a special census conducted under contract by the United States Bureau of the
206.2Census, or
206.3(3) a population estimate made either by the Metropolitan Council or by the state
206.4demographer under section 4A.02.
206.5(e) "Qualified indoor ice arena" means a facility that meets the requirements of
206.6section 373.43.
206.7(f) "Tax capacity" means total taxable market value, but does not include captured
206.8market value.

206.9    Sec. 6. Minnesota Statutes 2012, section 373.40, subdivision 2, is amended to read:
206.10    Subd. 2. Application of election requirement. (a) Bonds issued by a county
206.11to finance capital improvements under an approved capital improvement plan are not
206.12subject to the election requirements of section 375.18 or 475.58. The bonds must be
206.13approved by vote of at least three-fifths of the members of the county board. In the case
206.14of a metropolitan county, the bonds must be approved by vote of at least two-thirds of
206.15the members of the county board.
206.16(b) Before issuance of bonds qualifying under this section, the county must publish
206.17a notice of its intention to issue the bonds and the date and time of a hearing to obtain
206.18public comment on the matter. The notice must be published in the official newspaper
206.19of the county or in a newspaper of general circulation in the county. The notice must be
206.20published at least 14, but not more than 28, days before the date of the hearing.
206.21(c) A county may issue the bonds only upon obtaining the approval of a majority of
206.22the voters voting on the question of issuing the obligations, if a petition requesting a vote
206.23on the issuance is signed by voters equal to five percent of the votes cast in the county in
206.24the last county general election and is filed with the county auditor within 30 days after
206.25the public hearing. The commissioner of revenue shall prepare a suggested form of the
206.26question to be presented at the election. If the county elects not to submit the question to
206.27the voters, the county shall not propose the issuance of bonds under this section for the
206.28same purpose and in the same amount for a period of 365 days from the date of receipt
206.29of the petition. If the question of issuing the bonds is submitted and not approved by the
206.30voters, the provisions of section 475.58, subdivision 1a, shall apply.

206.31    Sec. 7. Minnesota Statutes 2012, section 383D.41, is amended by adding a subdivision
206.32to read:
206.33    Subd. 10. Housing improvement areas. (a) The Dakota County Community
206.34Development Agency has all powers of a city, in addition to its existing powers as an
207.1implementing entity, under sections 428A.11 to 428A.21, in connection with housing
207.2improvement areas in Dakota County. For purposes of the Dakota County Community
207.3Development Agency's exercise of those powers the provisions of this subdivision apply.
207.4(b) References in sections 428A.11 to 428A.21 to:
207.5(1) a "mayor" are references to the executive director of the Dakota County
207.6Community Development Agency;
207.7(2) a "council" are references to the board of commissioners of the Dakota County
207.8Community Development Agency; and
207.9(3) a "city clerk" are references to an official of the Dakota County Community
207.10Development Agency designated from time to time by the executive director of the Dakota
207.11County Community Development Agency.
207.12(c) Notwithstanding section 428A.11, subdivision 3, and 428A.13, subdivision 1,
207.13the governing body of the Dakota County Community Development Agency may adopt
207.14a resolution, rather than an ordinance, establishing one or more housing improvement
207.15areas, and "enabling ordinance" means a resolution so adopted for purposes of sections
207.16428A.11 to 428A.21.
207.17(d) As long as the governing body of the Dakota County Community Development
207.18Agency and the Dakota County Board of Commissioners consists of identical membership,
207.19the Dakota County Community Development Agency may pledge the full faith, credit and
207.20taxing power of Dakota County to obligations issued by the Dakota County Community
207.21Development Agency under section 428A.16.
207.22(e) Notwithstanding the provisions of section 428A.21, the establishment by the
207.23Dakota County Community Development Agency of a new housing improvement area
207.24after June 30, 2016, requires enactment of a special law authorizing establishment of the
207.25area. Any extensions of the deadline for housing improvement districts under general law
207.26beyond that date or repeal of the deadline also applies to housing improvement areas
207.27established by the Dakota County Community Development Agency.

207.28    Sec. 8. Minnesota Statutes 2012, section 410.32, is amended to read:
207.29410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
207.30    (a) Notwithstanding any contrary provision of other law or charter, a home rule
207.31charter city may, by resolution and without public referendum, issue capital notes subject
207.32to the city debt limit to purchase capital equipment.
207.33    (b) For purposes of this section, "capital equipment" means:
207.34    (1) public safety equipment, ambulance and other medical equipment, road
207.35construction and maintenance equipment, and other capital equipment; and
208.1    (2) computer hardware and software, without regard to its expected useful life,
208.2 whether bundled with machinery or equipment or unbundled., together with application
208.3development services and training related to the use of the computer hardware and software.
208.4    (c) The equipment or software must have an expected useful life at least as long
208.5as the term of the notes.
208.6    (d) The notes shall be payable in not more than ten years and be issued on terms and
208.7in the manner the city determines. The total principal amount of the capital notes issued
208.8in a fiscal year shall not exceed 0.03 percent of the market value of taxable property
208.9in the city for that year.
208.10    (e) A tax levy shall be made for the payment of the principal and interest on the
208.11notes, in accordance with section 475.61, as in the case of bonds.
208.12    (f) Notes issued under this section shall require an affirmative vote of two-thirds of
208.13the governing body of the city.
208.14    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
208.15city may also issue capital notes subject to its debt limit in the manner and subject to the
208.16limitations applicable to statutory cities pursuant to section 412.301.

208.17    Sec. 9. Minnesota Statutes 2012, section 412.301, is amended to read:
208.18412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
208.19    (a) The council may issue certificates of indebtedness or capital notes subject to the
208.20city debt limits to purchase capital equipment.
208.21    (b) For purposes of this section, "capital equipment" means:
208.22    (1) public safety equipment, ambulance and other medical equipment, road
208.23construction and maintenance equipment, and other capital equipment; and
208.24    (2) computer hardware and software, without regard to its expected useful life,
208.25 whether bundled with machinery or equipment or unbundled., together with application
208.26development services and training related to the use of the computer hardware or software.
208.27    (c) The equipment or software must have an expected useful life at least as long as
208.28the terms of the certificates or notes.
208.29    (d) Such certificates or notes shall be payable in not more than ten years and shall be
208.30issued on such terms and in such manner as the council may determine.
208.31    (e) If the amount of the certificates or notes to be issued to finance any such purchase
208.32exceeds 0.25 percent of the market value of taxable property in the city, they shall not
208.33be issued for at least ten days after publication in the official newspaper of a council
208.34resolution determining to issue them; and if before the end of that time, a petition asking
208.35for an election on the proposition signed by voters equal to ten percent of the number of
209.1voters at the last regular municipal election is filed with the clerk, such certificates or notes
209.2shall not be issued until the proposition of their issuance has been approved by a majority
209.3of the votes cast on the question at a regular or special election.
209.4    (f) A tax levy shall be made for the payment of the principal and interest on such
209.5certificates or notes, in accordance with section 475.61, as in the case of bonds.

209.6    Sec. 10. [435.39] MUNICIPAL STREET IMPROVEMENT DISTRICTS.
209.7    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
209.8have the meanings given them.
209.9(b) "Governing body" means the city council of a municipality.
209.10(c) "Improvements" means construction, reconstruction, and facility upgrades
209.11involving: right-of-way acquisition; paving; curbs and gutters; bridges and culverts and
209.12their repair; milling; overlaying; drainage and storm sewers; excavation; base work;
209.13subgrade corrections; street lighting; traffic signals; signage; sidewalks; pavement
209.14markings; boulevard and easement restoration; impact mitigation; connection and
209.15reconnection of utilities; turn lanes; medians; street and alley returns; retaining walls;
209.16fences; lane additions; and fixed transit infrastructure, trails, or pathways. "Fixed transit
209.17infrastructure" does not include commuter rail rolling stock, light rail vehicles, or
209.18transit way buses; capital costs for park-and-ride facilities; feasibility studies, planning,
209.19alternative analyses, environmental studies, engineering, or construction of transit ways;
209.20or operating assistance for transit ways.
209.21(d) "Maintenance" means striping, seal coating, crack sealing, pavement repair,
209.22sidewalk maintenance, signal maintenance, street light maintenance, and signage.
209.23(e) "Municipal street" means a street, alley, or public way in which the municipality
209.24is the road authority with powers conferred by section 429.021.
209.25(f) "Municipality" means a home rule charter or statutory city.
209.26(g) "Street improvement district" means a geographic area designated by a
209.27municipality and located within the municipality within which street improvements and
209.28maintenance may be undertaken and financed according to this section.
209.29(h) "Unimproved parcel" means a parcel of land that abuts an:
209.30(1) unimproved municipal street and that is not served by municipal sewer or water
209.31utilities; or
209.32(2) improved municipal street and served by municipal sewer or water utilities
209.33and that:
209.34(i) is not improved by construction of an authorized structure; or
209.35(ii) contains a structure that has not previously been occupied.
210.1    Subd. 2. Authorization. A municipality may establish by ordinance municipal
210.2street improvement districts and may defray all or part of the total costs of municipal street
210.3improvements and maintenance by apportioning street improvement fees to all of the
210.4developed parcels located in the district. A street improvement district must not include
210.5any property already located in another street improvement district.
210.6    Subd. 3. Uniformity. (a) The total costs of municipal street improvements and
210.7maintenance must be apportioned to all developed parcels or developed tracts of land
210.8located in the established street improvement district on a uniform basis within each
210.9classification of real estate. Apportionment must be made on the basis of one of the
210.10following:
210.11(1) estimated market value;
210.12(2) tax capacity;
210.13(3) front footage;
210.14(4) land or building area; or
210.15(5) some combination of clauses (1) to (4).
210.16(b) Costs must not be apportioned in such a way that the cost borne by any
210.17classification of property is more than twice the cost that would be borne by that
210.18classification if costs were apportioned uniformly to all classifications of property under
210.19the method selected in paragraph (a), clauses (1) to (5).
210.20    Subd. 4. Adoption of plan. Before establishing a municipal street improvement
210.21district or authorizing a street improvement fee, a municipality must propose and adopt a
210.22street improvement plan that identifies the location of the municipal street improvement
210.23district and identifies and estimates the costs of the proposed improvements during the
210.24proposed period of collection of municipal street improvement fees, which must be for
210.25a period of at least five years and at most 20 years. Notice of a public hearing on the
210.26proposed plan must be given by mail to all affected landowners at least 30 days before
210.27the hearing and posted for at least 30 days before the hearing. At the public hearing, the
210.28governing body must present the plan and all affected landowners in attendance must have
210.29the opportunity to comment before the governing body considers adoption of the plan.
210.30    Subd. 5. Use of fees. Revenues from street improvement fees must be placed in
210.31a separate account and used only for projects located within the district and identified
210.32in the municipal street improvement plan.
210.33    Subd. 6. Collection; up to 20 years. (a) An ordinance adopted under this section
210.34must provide for billing and payment of the fee on a monthly, quarterly, or other basis
210.35as directed by the governing body. The governing body may collect municipal street
210.36improvement fees within a street improvement district for a maximum of 20 years.
211.1    (b) Fees that, as of October 15 of each year, have remained unpaid for at least 30
211.2days may be certified to the county auditor for collection as a special assessment payable
211.3in the following calendar year against the affected property.
211.4    Subd. 7. Improvement fee. A municipality may impose a municipal street
211.5improvement fee by ordinance. The ordinance must not be voted on or adopted until after
211.6public notice is provided and a public hearing is held in the same manner as provided in
211.7subdivision 4.
211.8    Subd. 8. Not exclusive means of financing improvements. The use of the
211.9municipal street improvement fee by a municipality does not restrict the municipality from
211.10imposing other measures to pay the costs of local street improvements or maintenance,
211.11except that a municipality must not impose special assessments for projects funded with
211.12street improvement fees.
211.13    Subd. 9. Unimproved parcels; fees. A municipality may not impose a street
211.14improvement fee on any unimproved parcel located within an established street
211.15improvement district until at least three years after either the date of substantial completion
211.16of the paving of the previous unimproved municipal street or the date which a structure is
211.17built and first occupied pursuant to a certificate of occupancy, whichever is later.
211.18    Subd. 10. Exempt property. A municipality must not impose a municipal street
211.19improvement fee on property that is exempt from taxation under the provisions of the
211.20Minnesota Constitution, article X, section 1.
211.21EFFECTIVE DATE.This section is effective July 1, 2013.

211.22    Sec. 11. Minnesota Statutes 2012, section 473.39, is amended by adding a subdivision
211.23to read:
211.24    Subd. 1s. Obligations. After July 1, 2013, in addition to other authority in this
211.25section, the council may issue certificates of indebtedness, bonds, or other obligations
211.26under this section in an amount not exceeding $35,800,000 for capital expenditures as
211.27prescribed in the council's transit capital improvement program and for related costs,
211.28including the costs of issuance and sale of the obligations.
211.29EFFECTIVE DATE.This section is effective the day following final enactment
211.30and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
211.31Washington.

211.32    Sec. 12. Minnesota Statutes 2012, section 474A.04, subdivision 1a, is amended to read:
212.1    Subd. 1a. Entitlement reservations; carryforward; deduction. Any amount
212.2returned by an entitlement issuer before July 15 shall be reallocated through the housing
212.3pool. Any amount returned on or after July 15 shall be reallocated through the unified
212.4pool. An amount returned after the last Monday in November shall be reallocated to the
212.5Minnesota Housing Finance Agency. Any amount of bonding authority that an entitlement
212.6issuer carries forward under federal tax law that is not permanently issued or for which
212.7the governing body of the entitlement issuer has not enacted a resolution electing to use
212.8the authority for mortgage credit certificates and has not provided a notice of issue to the
212.9commissioner before 4:30 p.m. on the last business day in December of the succeeding
212.10calendar year shall be deducted from the entitlement allocation for that entitlement issuer
212.11in the next succeeding calendar year. Any amount deducted from an entitlement issuer's
212.12allocation under this subdivision shall be reallocated to other entitlement issuers, the
212.13housing pool, the small issue pool, and the public facilities pool on a proportional basis
212.14consistent with section 474A.03.
212.15EFFECTIVE DATE.This section is effective the day following final enactment
212.16and applies to any bonding authority allocated in 2012 and subsequent years.

212.17    Sec. 13. Minnesota Statutes 2012, section 474A.062, is amended to read:
212.18474A.062 MINNESOTA OFFICE OF HIGHER EDUCATION 120-DAY
212.19ISSUANCE EXEMPTION.
212.20    The Minnesota Office of Higher Education is exempt from the 120-day issuance
212.21requirements in this chapter and may carry forward allocations for student loan bonds into
212.22one successive calendar year, subject to carryforward notice requirements of section
212.23474A.131, subdivision 2 .
212.24EFFECTIVE DATE.This section is effective the day following final enactment
212.25and applies to any bonding authority allocated in 2012 and subsequent years.

212.26    Sec. 14. Minnesota Statutes 2012, section 474A.091, subdivision 3a, is amended to read:
212.27    Subd. 3a. Mortgage bonds. (a) Bonding authority remaining in the unified pool on
212.28October 1 is available for single-family housing programs for cities that applied in January
212.29and received an allocation under section 474A.061, subdivision 2a, in the same calendar
212.30year. The Minnesota Housing Finance Agency shall receive an allocation for mortgage
212.31bonds pursuant to this section, minus any amounts for a city or consortium that intends to
212.32issue bonds on its own behalf under paragraph (c).
213.1    (b) The agency may issue bonds on behalf of participating cities. The agency shall
213.2request an allocation from the commissioner for all applicants who choose to have the
213.3agency issue bonds on their behalf and the commissioner shall allocate the requested
213.4amount to the agency. Allocations shall be awarded by the commissioner each Monday
213.5commencing on the first Monday in October through the last Monday in November for
213.6applications received by 4:30 p.m. on the Monday of the week preceding an allocation.
213.7    For cities who choose to have the agency issue bonds on their behalf, allocations
213.8will be made loan by loan, on a first-come, first-served basis among the cities. The
213.9agency shall submit an application fee pursuant to section 474A.03, subdivision 4, and an
213.10application deposit equal to two percent of the requested allocation to the commissioner
213.11when requesting an allocation from the unified pool. After awarding an allocation and
213.12receiving a notice of issuance for mortgage bonds issued on behalf of the participating
213.13cities, the commissioner shall transfer the application deposit to the Minnesota Housing
213.14Finance Agency.
213.15    For purposes of paragraphs (a) to (d), "city" means a county or a consortium of
213.16local government units that agree through a joint powers agreement to apply together
213.17for single-family housing programs, and has the meaning given it in section 462C.02,
213.18subdivision 6 . "Agency" means the Minnesota Housing Finance Agency.
213.19    (c) Any city that received an allocation pursuant to section 474A.061, subdivision
213.202a, paragraph (f) , in the current year that wishes to receive an additional allocation from
213.21the unified pool and issue bonds on its own behalf or pursuant to a joint powers agreement
213.22shall notify the Minnesota Housing Finance Agency by the third Monday in September.
213.23The total amount of allocation for mortgage bonds for a city choosing to issue bonds on its
213.24own behalf or through a joint powers agreement is limited to the lesser of: (i) the amount
213.25requested, or (ii) the product of the total amount available for mortgage bonds from the
213.26unified pool, multiplied by the ratio of the population of each city that applied in January
213.27and received an allocation under section 474A.061, subdivision 2a, in the same calendar
213.28year, as determined by the most recent estimate of the city's population released by the
213.29state demographer's office to the total of the population of all the cities that applied in
213.30January and received an allocation under section 474A.061, subdivision 2a, in the same
213.31calendar year. If a city choosing to issue bonds on its own behalf or through a joint powers
213.32agreement is located within a county that has also chosen to issue bonds on its own behalf
213.33or through a joint powers agreement, the city's population will be deducted from the
213.34county's population in calculating the amount of allocations under this paragraph.
213.35    The Minnesota Housing Finance Agency shall notify each city choosing to issue
213.36bonds on its own behalf or pursuant to a joint powers agreement of the amount of its
214.1allocation by October 15. Upon determining the amount of the allocation of each choosing
214.2to issue bonds on its own behalf or through a joint powers agreement, the agency shall
214.3forward a list specifying the amounts allotted to each city.
214.4    A city that chooses to issue bonds on its own behalf or through a joint powers
214.5agreement may request an allocation from the commissioner by forwarding an application
214.6with an application fee pursuant to section 474A.03, subdivision 4, and an application
214.7deposit equal to two percent of the requested amount to the commissioner no later than
214.84:30 p.m. on the Monday of the week preceding an allocation. Allocations to cities that
214.9choose to issue bonds on their own behalf shall be awarded by the commissioner on
214.10the first Monday after October 15 through the last Monday in November. No city may
214.11receive an allocation from the commissioner after the last Monday in November. The
214.12commissioner shall allocate the requested amount to the city or cities subject to the
214.13limitations under this subdivision.
214.14    If a city issues mortgage bonds from an allocation received under this paragraph,
214.15the issuer must provide for the recycling of funds into new loans. If the issuer is not
214.16able to provide for recycling, the issuer must notify the commissioner in writing of the
214.17reason that recycling was not possible and the reason the issuer elected not to have the
214.18Minnesota Housing Finance Agency issue the bonds. "Recycling" means the use of money
214.19generated from the repayment and prepayment of loans for further eligible loans or for the
214.20redemption of bonds and the issuance of current refunding bonds.
214.21    (d) No entitlement city or county or city in an entitlement county may apply for or
214.22be allocated authority to issue mortgage bonds or use mortgage credit certificates from
214.23the unified pool.
214.24    (e) An allocation awarded to the agency for mortgage bonds under this section
214.25may be carried forward by the agency into the next succeeding calendar year subject to
214.26notice requirements under section 474A.131 and is available until the last business day in
214.27December of that succeeding calendar year.
214.28EFFECTIVE DATE.This section is effective the day following final enactment
214.29and applies to any bonding authority allocated in 2012 and subsequent years.

214.30    Sec. 15. Minnesota Statutes 2012, section 475.521, subdivision 1, is amended to read:
214.31    Subdivision 1. Definitions. For purposes of this section, the following terms have
214.32the meanings given.
214.33(a) "Bonds" mean an obligation defined under section 475.51.
214.34(b) "Capital improvement" means acquisition or betterment of public lands,
214.35buildings or other improvements for the purpose of a city hall, town hall, library, public
215.1safety facility, and public works facility. An improvement must have an expected useful
215.2life of five years or more to qualify. Capital improvement does not include light rail transit
215.3or any activity related to it, or a park, road, bridge, administrative building other than a
215.4city or town hall, or land for any of those facilities. For purposes of this section, "capital
215.5improvement" includes expenditures for purposes described in this paragraph that have
215.6been incurred by a municipality before approval of a capital improvement plan, if such
215.7expenditures are included in a capital improvement plan approved on or before the date of
215.8the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
215.9(c) "Municipality" means a home rule charter or statutory city or a town described in
215.10section 368.01, subdivision 1 or 1a.

215.11    Sec. 16. Minnesota Statutes 2012, section 475.521, subdivision 2, is amended to read:
215.12    Subd. 2. Election requirement. (a) Bonds issued by a municipality to finance
215.13capital improvements under an approved capital improvements plan are not subject to the
215.14election requirements of section 475.58. The bonds must be approved by an affirmative
215.15vote of three-fifths of the members of a five-member governing body. In the case of a
215.16governing body having more or less than five members, the bonds must be approved by a
215.17vote of at least two-thirds of the members of the governing body.
215.18(b) Before the issuance of bonds qualifying under this section, the municipality
215.19must publish a notice of its intention to issue the bonds and the date and time of the
215.20hearing to obtain public comment on the matter. The notice must be published in the
215.21official newspaper of the municipality or in a newspaper of general circulation in the
215.22municipality. Additionally, the notice may be posted on the official Web site, if any, of the
215.23municipality. The notice must be published at least 14 but not more than 28 days before
215.24the date of the hearing.
215.25(c) A municipality may issue the bonds only after obtaining the approval of a
215.26majority of the voters voting on the question of issuing the obligations, if a petition
215.27requesting a vote on the issuance is signed by voters equal to five percent of the votes cast
215.28in the municipality in the last municipal general election and is filed with the clerk within
215.2930 days after the public hearing. The commissioner of revenue shall prepare a suggested
215.30form of the question to be presented at the election. If the municipality elects not to submit
215.31the question to the voters, the municipality shall not propose the issuance of bonds under
215.32this section for the same purpose and in the same amount for a period of 365 days from the
215.33date of receipt of the petition. If the question of issuing the bonds is submitted and not
215.34approved by the voters, the provisions of section 475.58, subdivision 1a, shall apply.

216.1    Sec. 17. Minnesota Statutes 2012, section 475.58, subdivision 3b, is amended to read:
216.2    Subd. 3b. Street reconstruction and bituminous overlays. (a) A municipality may,
216.3without regard to the election requirement under subdivision 1, issue and sell obligations
216.4for street reconstruction or bituminous overlays, if the following conditions are met:
216.5    (1) the streets are reconstructed or overlaid under a street reconstruction or overlay
216.6plan that describes the street reconstruction or overlay to be financed, the estimated costs,
216.7and any planned reconstruction or overlay of other streets in the municipality over the
216.8next five years, and the plan and issuance of the obligations has been approved by a vote
216.9of all of the members of the governing body present at the meeting following a public
216.10hearing for which notice has been published in the official newspaper at least ten days but
216.11not more than 28 days prior to the hearing; and
216.12    (2) if a petition requesting a vote on the issuance is signed by voters equal to
216.13five percent of the votes cast in the last municipal general election and is filed with the
216.14municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
216.15only after obtaining the approval of a majority of the voters voting on the question of the
216.16issuance of the obligations. If the municipality elects not to submit the question to the
216.17voters, the municipality shall not propose the issuance of bonds under this section for the
216.18same purpose and in the same amount for a period of 365 days from the date of receipt
216.19of the petition. If the question of issuing the bonds is submitted and not approved by the
216.20voters, the provisions of section 475.58, subdivision 1a, shall apply.
216.21    (b) Obligations issued under this subdivision are subject to the debt limit of the
216.22municipality and are not excluded from net debt under section 475.51, subdivision 4.
216.23    (c) For purposes of this subdivision, street reconstruction and bituminous overlays
216.24includes utility replacement and relocation and other activities incidental to the street
216.25reconstruction, turn lanes and other improvements having a substantial public safety
216.26function, realignments, other modifications to intersect with state and county roads, and
216.27the local share of state and county road projects. For purposes of this subdivision, "street
216.28reconstruction" includes expenditures for street reconstruction that have been incurred
216.29by a municipality before approval of a street reconstruction plan, if such expenditures
216.30are included in a street reconstruction plan approved on or before the date of the public
216.31hearing under paragraph (a), clause (1) regarding issuance of bonds for such expenditures.
216.32    (d) Except in the case of turn lanes, safety improvements, realignments, intersection
216.33modifications, and the local share of state and county road projects, street reconstruction
216.34and bituminous overlays does not include the portion of project cost allocable to widening
216.35a street or adding curbs and gutters where none previously existed.

217.1    Sec. 18. Laws 1971, chapter 773, section 1, subdivision 2, as amended by Laws 1974,
217.2chapter 351, section 5, Laws 1976, chapter 234, sections 1 and 7, Laws 1978, chapter 788,
217.3section 1, Laws 1981, chapter 369, section 1, Laws 1983, chapter 302, section 1, Laws
217.41988, chapter 513, section 1, Laws 1992, chapter 511, article 9, section 23, Laws 1998,
217.5chapter 389, article 3, section 27, and Laws 2002, chapter 390, section 23, is amended to
217.6read:
217.7    Subd. 2. For each of the years 2003 to 2013 to 2024, the city of St. Paul is
217.8authorized to issue bonds in the aggregate principal amount of $20,000,000 for each year.
217.9EFFECTIVE DATE.This section is effective the day after compliance by the
217.10governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
217.11subdivisions 2 and 3.

217.12    Sec. 19. CARRYFORWARD OF BONDING AUTHORITY FOR 2011; NO
217.13DEDUCTION FROM ENTITLEMENT ALLOCATION.
217.14    Notwithstanding Minnesota Statutes, section 474A.04, subdivision 1a, bonding
217.15authority that was allocated to an entitlement issuer in 2011 and that was carried forward
217.16under federal tax law, but for which the entitlement issuer did not provide a notice of issue
217.17to the commissioner of management and budget before 4:30 p.m. on the last business
217.18day of December 2012 must not be deducted from the entitlement allocation for that
217.19entitlement issuer in 2013.
217.20EFFECTIVE DATE.This section is effective the day following final enactment
217.21and applies retroactively to rescind any reallocation by the commissioner of management
217.22and budget under Minnesota Statues, section 474A.04, subdivision 1a, of any amounts so
217.23deducted.


217.26    Section 1. Minnesota Statutes 2012, section 163.051, is amended to read:
217.27163.051 METROPOLITAN COUNTY WHEELAGE TAX.
217.28    Subdivision 1. Tax authorized. (a) Except as provided in paragraph (b) (c), the
217.29board of commissioners of each metropolitan county is authorized to levy by resolution a
217.30wheelage tax of $5 for the year 1972 and each subsequent year thereafter by resolution
217.31 at the rate specified in paragraph (b), on each motor vehicle that is kept in such county
217.32when not in operation and that is subject to annual registration and taxation under chapter
218.1168. The board may provide by resolution for collection of the wheelage tax by county
218.2officials or it may request that the tax be collected by the state registrar of motor vehicles,
218.3and. The state registrar of motor vehicles shall collect such tax on behalf of the county if
218.4requested, as provided in subdivision 2.
218.5    (b) The wheelage tax under this section is at the rate of:
218.6(1) from January 1, 2014, through December 31, 2017, $10 per year for each county
218.7that authorizes the tax; and
218.8(2) on and after January 1, 2018, up to $20 per year, in any increment of a whole
218.9dollar, as specified by each county that authorizes the tax.
218.10    (c) The following vehicles are exempt from the wheelage tax:
218.11    (1) motorcycles, as defined in section 169.011, subdivision 44;
218.12    (2) motorized bicycles, as defined in section 169.011, subdivision 45; and
218.13    (3) electric-assisted bicycles, as defined in section 169.011, subdivision 27; and
218.14    (4) (3) motorized foot scooters, as defined in section 169.011, subdivision 46.
218.15(d) For any county that authorized the tax prior to the effective date of this section,
218.16the wheelage tax continues at the rate provided under paragraph (b).
218.17    Subd. 2. Collection by registrar of motor vehicles. The wheelage tax levied by
218.18any metropolitan county, if made collectible by the state registrar of motor vehicles,
218.19shall be certified by the county auditor to the registrar not later than August 1 in the year
218.20before the calendar year or years for which the tax is levied, and the registrar shall collect
218.21such tax with the motor vehicle taxes on the affected vehicles for such year or years.
218.22Every owner and every operator of such a motor vehicle shall furnish to the registrar all
218.23information requested by the registrar. No state motor vehicle tax on any such motor
218.24vehicle for any such year shall be received or deemed paid unless the applicable wheelage
218.25tax is paid therewith. The proceeds of the wheelage tax levied by any metropolitan county,
218.26less any amount retained by the registrar to pay costs of collection of the wheelage tax,
218.27shall be paid to the commissioner of management and budget and deposited in the state
218.28treasury to the credit of the county wheelage tax fund of each metropolitan county.
218.29    Subd. 2a. Tax proceeds deposited; costs of collection; appropriation.
218.30Notwithstanding the provisions of any other law, the state registrar of motor vehicles shall
218.31deposit the proceeds of the wheelage tax imposed by subdivision 2, to the credit of the
218.32county wheelage tax fund account of each metropolitan county. The amount necessary to
218.33pay the costs of collection of said tax is appropriated from the county wheelage tax fund
218.34 account of each metropolitan county to the state registrar of motor vehicles.
218.35    Subd. 3. Distribution to metropolitan county; appropriation. On or before
218.36April 1 in 1972 and each subsequent year, the commissioner of management and budget
219.1 On a monthly basis, the registrar of motor vehicles shall issue a warrant in favor of the
219.2treasurer of each metropolitan county for which the registrar has collected a wheelage tax
219.3in the amount of such tax then on hand in the county wheelage tax fund account. There
219.4is hereby appropriated from the county wheelage tax fund account each year, to each
219.5metropolitan county entitled to payments authorized by this section, sufficient moneys
219.6to make such payments.
219.7    Subd. 4. Use of tax. The treasurer of each metropolitan county receiving moneys
219.8 payments under subdivision 3 shall deposit such moneys payments in the county road and
219.9bridge fund. The moneys shall be used for purposes authorized by law which are highway
219.10purposes within the meaning of the Minnesota Constitution, article 14.
219.11    Subd. 6. Metropolitan county defined. "Metropolitan county" means any of the
219.12counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
219.13    Subd. 7. Offenses; penalties; application of other laws. (a) Any owner or operator
219.14of a motor vehicle who shall willfully give gives any false information relative to the tax
219.15herein authorized by this section to the registrar of motor vehicles or any metropolitan
219.16 county, or who shall willfully fail or refuse fails or refuses to furnish any such information,
219.17shall be is guilty of a misdemeanor.
219.18(b) Except as otherwise herein provided in this section, the collection and payment
219.19of a wheelage tax and all matters relating thereto shall be are subject to all provisions of
219.20law relating to collection and payment of motor vehicle taxes so far as applicable.
219.21EFFECTIVE DATE.This section is effective the day following final enactment
219.22and applies to a registration period under Minnesota Statutes, chapter 168, starting on
219.23or after January 1, 2014.

219.24    Sec. 2. Minnesota Statutes 2012, section 237.52, subdivision 3, is amended to read:
219.25    Subd. 3. Collection. Every provider of services capable of originating a TRS call,
219.26including cellular communications and other nonwire access services, in this state shall,
219.27except as provided in subdivision 3a, collect the charges established by the commission
219.28under subdivision 2 and transfer amounts collected to the commissioner of public
219.29safety in the same manner as provided in section 403.11, subdivision 1, paragraph (d).
219.30The commissioner of public safety must deposit the receipts in the fund established in
219.31subdivision 1.
219.32EFFECTIVE DATE.This section is effective January 1, 2014.

220.1    Sec. 3. Minnesota Statutes 2012, section 237.52, is amended by adding a subdivision
220.2to read:
220.3    Subd. 3a. Fee for prepaid wireless telecommunications service. The fee
220.4established in subdivision 2 does not apply to prepaid wireless telecommunications
220.5services as defined in section 403.02, subdivision 17b, which are instead subject to the
220.6prepaid wireless telecommunications access Minnesota fee established in section 403.161,
220.7subdivision 1, paragraph (b). Collection, remittance, and deposit of prepaid wireless
220.8telecommunications access Minnesota fees are governed by sections 403.161 and 403.162.
220.9EFFECTIVE DATE.This section is effective January 1, 2014.

220.10    Sec. 4. Minnesota Statutes 2012, section 270B.01, subdivision 8, is amended to read:
220.11    Subd. 8. Minnesota tax laws. For purposes of this chapter only, unless expressly
220.12stated otherwise, "Minnesota tax laws" means:
220.13    (1) the taxes, refunds, and fees administered by or paid to the commissioner under
220.14chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24),
220.15290, 290A, 291, 295, 297A, 297B, and 297H, and 403, or any similar Indian tribal tax
220.16administered by the commissioner pursuant to any tax agreement between the state and
220.17the Indian tribal government, and includes any laws for the assessment, collection, and
220.18enforcement of those taxes, refunds, and fees; and
220.19    (2) section 273.1315.
220.20EFFECTIVE DATE.This section is effective January 1, 2014.

220.21    Sec. 5. Minnesota Statutes 2012, section 270B.12, subdivision 4, is amended to read:
220.22    Subd. 4. Department of Public Safety. The commissioner may disclose return
220.23information to the Department of Public Safety for the purpose of and to the extent
220.24necessary to administer section sections 270C.725 and 403.16 to 403.162.
220.25EFFECTIVE DATE.This section is effective January 1, 2014.

220.26    Sec. 6. Minnesota Statutes 2012, section 271.06, is amended by adding a subdivision
220.27to read:
220.28    Subd. 2a. Timely mailing treated as timely filing. (a) If, after the period prescribed
220.29by subdivision 2, the original notice of appeal, proof of service upon the commissioner,
220.30and filing fee are delivered by mail in the United States to the Tax Court administrator
220.31or the court administrator of district court acting as court administrator of the Tax Court,
220.32then the date of filing is the date of the United States postmark stamped on the envelope
221.1or other appropriate wrapper in which the notice of appeal, proof of service upon the
221.2commissioner, and filing fee are mailed.
221.3(b) This subdivision applies only if the postmark date falls within the period
221.4prescribed by subdivision 2 and the original notice of appeal, proof of service upon the
221.5commissioner, and filing fee are deposited in the mail in the United States in an envelope
221.6or other appropriate wrapper, postage prepaid, properly addressed to the Tax Court
221.7administrator or the court administrator of district court acting as court administrator of
221.8the Tax Court.
221.9(c) Only the postmark of the United States Postal Service qualifies as proof of
221.10timely mailing under this subdivision. Private postage meters do not qualify as proof of
221.11timely filing under this subdivision. If the original notice of appeal, proof of service
221.12upon the commissioner, and filing fee are sent by United States registered mail, the date
221.13of registration is the postmark date. If the original notice of appeal, proof of service
221.14upon the commissioner, and filing fee are sent by United States certified mail and the
221.15sender's receipt is postmarked by the postal employee to whom the envelope containing
221.16the original notice of appeal, proof of service upon the commissioner, and filing fee is
221.17presented, the date of the United States postmark on the receipt is the postmark date.
221.18(d) A reference in this section to mail in the United States must be treated as
221.19including a reference to any designated delivery service and a reference in this section to
221.20a postmark by the United States Postal Service must be treated as including a reference
221.21to any date recorded or marked by any designated delivery service in accordance with
221.22section 7502(f) of the Internal Revenue Code.
221.23EFFECTIVE DATE.This section is effective for filings delivered by the United
221.24States Postal Service with a postmark date after August 1, 2013.

221.25    Sec. 7. Minnesota Statutes 2012, section 297E.021, subdivision 2, is amended to read:
221.26    Subd. 2. Determination of revenue increase. By March 15 of each fiscal year, the
221.27commissioner of management and budget, in consultation with the commissioner, shall
221.28determine the estimated increase in revenues received from (1) taxes imposed under this
221.29chapter, and (2) the taxes imposed under section 295.61 and the amendments to section
221.30297A.61, subdivision 3, under article 8, section 1, of this act, over (3) the estimated
221.31revenues under the February 2012 state budget forecast from the taxes imposed under this
221.32chapter for that fiscal year. For fiscal years after fiscal year 2015, the commissioner of
221.33management and budget shall use the February 2012 state budget forecast for fiscal year
221.342015 for the amount of taxes collected under this chapter as the baseline. All calculations
222.1under this subdivision must be made net of estimated refunds of the taxes required to be
222.2paid.
222.3EFFECTIVE DATE.This section is effective the day following final enactment.

222.4    Sec. 8. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision
222.5to read:
222.6    Subd. 17b. Prepaid wireless telecommunications service. "Prepaid wireless
222.7telecommunications service" means a wireless telecommunications service that allows the
222.8caller to dial 911 to access the 911 system, which service must be paid for in advance and is:
222.9(1) sold in predetermined units or dollars of which the number declines with use in a
222.10known amount; or
222.11(2) provides unlimited use for a predetermined time period.
222.12The inclusion of nontelecommunications services, including the download of digital
222.13products delivered electronically, content, and ancillary services, with a prepaid wireless
222.14telecommunications service does not preclude that service from being considered a
222.15prepaid wireless telecommunications service under this chapter.
222.16EFFECTIVE DATE.This section is effective January 1, 2014.

222.17    Sec. 9. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision
222.18to read:
222.19    Subd. 20a. Wireless telecommunications service. Wireless telecommunications
222.20service means a commercial mobile radio service, as that term is defined in United
222.21States Code, title 47, section 332, subsection (d), including all broadband personal
222.22communication services, wireless radio telephone services, and geographic area
222.23specialized mobile radio licensees, that offer real-time, two-way voice service
222.24interconnected with the public switched telephone network.
222.25EFFECTIVE DATE.This section is effective January 1, 2014.

222.26    Sec. 10. Minnesota Statutes 2012, section 403.02, subdivision 21, is amended to read:
222.27    Subd. 21. Wireless telecommunications service provider. "Wireless
222.28telecommunications service provider" means a provider of commercial mobile radio
222.29services, as that term is defined in United States Code, title 47, section 332, subsection
222.30(d), including all broadband personal communications services, wireless radio telephone
222.31services, geographic area specialized and enhanced specialized mobile radio services, and
222.32incumbent wide area specialized mobile radio licensees, that offers real-time, two-way
223.1voice service interconnected with the public switched telephone network and that is doing
223.2business in the state of Minnesota wireless telecommunications service.
223.3EFFECTIVE DATE.This section is effective January 1, 2014.

223.4    Sec. 11. Minnesota Statutes 2012, section 403.06, subdivision 1a, is amended to read:
223.5    Subd. 1a. Biennial budget; annual financial report. The commissioner shall
223.6prepare a biennial budget for maintaining the 911 system. By December 15 of each year,
223.7the commissioner shall submit a report to the legislature detailing the expenditures for
223.8maintaining the 911 system, the 911 fees collected, the balance of the 911 fund, and the
223.9911-related administrative expenses of the commissioner, and the most recent forecast of
223.10revenues and expenditures for the 911 emergency telecommunications service account,
223.11including a separate projection of E911 fees from prepaid wireless customers and
223.12projections of year-end fund balances. The commissioner is authorized to expend money
223.13that has been appropriated to pay for the maintenance, enhancements, and expansion
223.14of the 911 system.
223.15EFFECTIVE DATE.This section is effective the day following final enactment.

223.16    Sec. 12. Minnesota Statutes 2012, section 403.11, subdivision 1, is amended to read:
223.17    Subdivision 1. Emergency telecommunications service fee; account. (a) Each
223.18customer of a wireless or wire-line switched or packet-based telecommunications service
223.19provider connected to the public switched telephone network that furnishes service capable
223.20of originating a 911 emergency telephone call is assessed a fee based upon the number
223.21of wired or wireless telephone lines, or their equivalent, to cover the costs of ongoing
223.22maintenance and related improvements for trunking and central office switching equipment
223.23for 911 emergency telecommunications service, to offset administrative and staffing costs
223.24of the commissioner related to managing the 911 emergency telecommunications service
223.25program, to make distributions provided for in section 403.113, and to offset the costs,
223.26including administrative and staffing costs, incurred by the State Patrol Division of the
223.27Department of Public Safety in handling 911 emergency calls made from wireless phones.
223.28    (b) Money remaining in the 911 emergency telecommunications service account
223.29after all other obligations are paid must not cancel and is carried forward to subsequent
223.30years and may be appropriated from time to time to the commissioner to provide financial
223.31assistance to counties for the improvement of local emergency telecommunications
223.32services. The improvements may include providing access to 911 service for
223.33telecommunications service subscribers currently without access and upgrading existing
224.1911 service to include automatic number identification, local location identification,
224.2automatic location identification, and other improvements specified in revised county
224.3911 plans approved by the commissioner.
224.4    (c) The fee may not be less than eight cents nor more than 65 cents a month until
224.5June 30, 2008, not less than eight cents nor more than 75 cents a month until June 30,
224.62009, not less than eight cents nor more than 85 cents a month until June 30, 2010, and
224.7not less than eight cents nor more than 95 cents a month on or after July 1, 2010, for
224.8each customer access line or other basic access service, including trunk equivalents as
224.9designated by the Public Utilities Commission for access charge purposes and including
224.10wireless telecommunications services. With the approval of the commissioner of
224.11management and budget, the commissioner of public safety shall establish the amount of
224.12the fee within the limits specified and inform the companies and carriers of the amount to
224.13be collected. When the revenue bonds authorized under section 403.27, subdivision 1,
224.14have been fully paid or defeased, the commissioner shall reduce the fee to reflect that debt
224.15service on the bonds is no longer needed. The commissioner shall provide companies and
224.16carriers a minimum of 45 days' notice of each fee change. The fee must be the same for all
224.17customers, except that the fee imposed under this subdivision does not apply to prepaid
224.18wireless telecommunications service, which is instead subject to the fee imposed under
224.19section 403.161, subdivision 1, paragraph (a).
224.20    (d) The fee must be collected by each wireless or wire-line telecommunications
224.21service provider subject to the fee. Fees are payable to and must be submitted to the
224.22commissioner monthly before the 25th of each month following the month of collection,
224.23except that fees may be submitted quarterly if less than $250 a month is due, or annually if
224.24less than $25 a month is due. Receipts must be deposited in the state treasury and credited
224.25to a 911 emergency telecommunications service account in the special revenue fund. The
224.26money in the account may only be used for 911 telecommunications services.
224.27    (e) This subdivision does not apply to customers of interexchange carriers.
224.28    (f) The installation and recurring charges for integrating wireless 911 calls into
224.29enhanced 911 systems are eligible for payment by the commissioner if the 911 service
224.30provider is included in the statewide design plan and the charges are made pursuant to
224.31contract.
224.32    (g) Competitive local exchanges carriers holding certificates of authority from the
224.33Public Utilities Commission are eligible to receive payment for recurring 911 services.
224.34EFFECTIVE DATE.This section is effective January 1, 2014.

225.1    Sec. 13. Minnesota Statutes 2012, section 403.11, is amended by adding a subdivision
225.2to read:
225.3    Subd. 6. Report. (a) Beginning September 1, 2013, and continuing semiannually
225.4thereafter, each wireless telecommunications service provider shall report to the
225.5commissioner, based on the mobile telephone number, both the total number of prepaid
225.6wireless telecommunications subscribers sourced to Minnesota and the total number of
225.7wireless telecommunications subscribers sourced to Minnesota. The report must be filed
225.8on the same schedule as Federal Communications Commission Form 477.
225.9(b) The commissioner shall make a standard form available to all wireless
225.10telecommunications service providers for submitting information required to compile
225.11the report required under this subdivision.
225.12(c) The information provided to the commissioner under this subdivision is
225.13considered trade secret information under section 13.37 and may only be used for purposes
225.14of administering this chapter.
225.15EFFECTIVE DATE.This section is effective January 1, 2014.

225.16    Sec. 14. [403.16] DEFINITIONS.
225.17    Subdivision 1. Scope. For the purposes of sections 403.16 to 403.164, the terms
225.18defined in this section have the meanings given them.
225.19    Subd. 2. Consumer. "Consumer" means a person who purchases prepaid wireless
225.20telecommunications service in a retail transaction.
225.21    Subd. 3. Department. "Department" means the Department of Revenue.
225.22    Subd. 4. Prepaid wireless E911 fee. "Prepaid wireless E911 fee" means the fee that
225.23is required to be collected by a seller from a consumer as established in section 403.161,
225.24subdivision 1, paragraph (a).
225.25    Subd. 5. Prepaid wireless telecommunications access Minnesota fee. "Prepaid
225.26wireless telecommunications access Minnesota fee" means the fee that is required to be
225.27collected by a seller from a consumer as established in section 403.161, subdivision 1,
225.28paragraph (b).
225.29    Subd. 6. Provider. "Provider" means a person that provides prepaid wireless
225.30telecommunications service under a license issued by the Federal Communications
225.31Commission.
225.32    Subd. 7. Retail transaction. "Retail transaction" means the purchase of prepaid
225.33wireless telecommunications service from a seller for any purpose other than resale.
225.34    Subd. 8. Seller. "Seller" means a person who sells prepaid wireless
225.35telecommunications service to another person.
226.1EFFECTIVE DATE.This section is effective January 1, 2014.

226.2    Sec. 15. [403.161] PREPAID WIRELESS FEES IMPOSED; COLLECTION;
226.3REMITTANCE.
226.4    Subdivision 1. Fees imposed. (a) A prepaid wireless E911 fee of 80 cents per retail
226.5transaction is imposed on prepaid wireless telecommunications service until the fee is
226.6adjusted as an amount per retail transaction under subdivision 7.
226.7(b) A prepaid wireless telecommunications access Minnesota fee, in the amount of
226.8the monthly charge provided for in section 237.52, subdivision 2, is imposed on each
226.9retail transaction for prepaid wireless telecommunications service until the fee is adjusted
226.10as an amount per retail transaction under subdivision 7.
226.11    Subd. 2. Exemption. The fees established under subdivision 1 are not imposed on a
226.12minimal amount of prepaid wireless telecommunications service that is sold with a prepaid
226.13wireless device and is charged a single nonitemized price, and a seller may not apply the
226.14fees to such a transaction. For purposes of this subdivision, a minimal amount of service
226.15means an amount of service denominated as either ten minutes or less or $5 or less.
226.16    Subd. 3. Fee collected. The prepaid wireless E911 and telecommunications
226.17access Minnesota fees must be collected by the seller from the consumer for each retail
226.18transaction occurring in this state. The amount of each fee must be combined into one
226.19amount, which must be separately stated on an invoice, receipt, or other similar document
226.20that is provided to the consumer by the seller, or otherwise disclosed to the consumer.
226.21    Subd. 4. Sales and use tax treatment. For purposes of this section, a retail
226.22transaction conducted in person by a consumer at a business location of the seller must
226.23be treated as occurring in this state if that business location is in this state, and any other
226.24retail transaction must be treated as occurring in this state if the retail transaction is treated
226.25as occurring in this state for purposes of the sales and use tax as specified in section
226.26297A.669, subdivision 3, paragraph (c).
226.27    Subd. 5. Remittance. The prepaid wireless E911 and telecommunications access
226.28Minnesota fees are the liability of the consumer and not of the seller or of any provider,
226.29except that the seller is liable to remit all fees that the seller collects from consumers as
226.30provided in section 403.162, including all fees that the seller is deemed to collect in which
226.31the amount of the fee has not been separately stated on an invoice, receipt, or other similar
226.32document provided to the consumer by the seller.
226.33    Subd. 6. Exclusion for calculating other charges. The combined amount of the
226.34prepaid wireless E911 and telecommunications access Minnesota fees collected by a seller
226.35from a consumer must not be included in the base for measuring any tax, fee, surcharge,
227.1or other charge that is imposed by this state, any political subdivision of this state, or
227.2any intergovernmental agency.
227.3    Subd. 7. Fee changes. (a) The prepaid wireless E911 and telecommunications
227.4access Minnesota fee must be proportionately increased or reduced upon any change to
227.5the fee imposed under section 403.11, subdivision 1, paragraph (c), after July 1, 2013, or
227.6the fee imposed under section 237.52, subdivision 2, as applicable.
227.7(b) The department shall post notice of any fee changes on its Web site at least 30
227.8days in advance of the effective date of the fee changes. It is the responsibility of sellers to
227.9monitor the department's Web site for notice of fee changes.
227.10(c) Fee changes are effective 60 days after the first day of the first calendar month
227.11after the commissioner of public safety or the Public Utilities Commission, as applicable,
227.12changes the fee.
227.13EFFECTIVE DATE.This section is effective January 1, 2014.

227.14    Sec. 16. [403.162] ADMINISTRATION OF PREPAID WIRELESS E911 FEES.
227.15    Subdivision 1. Remittance. Prepaid wireless E911 and telecommunications access
227.16Minnesota fees collected by sellers must be remitted to the commissioner of revenue
227.17at the times and in the manner provided by chapter 297A with respect to the general
227.18sales and use tax. The commissioner of revenue shall establish registration and payment
227.19procedures that substantially coincide with the registration and payment procedures that
227.20apply in chapter 297A.
227.21    Subd. 2. Seller's fee retention. A seller may deduct and retain three percent of
227.22prepaid wireless E911 and telecommunications access Minnesota fees collected by the
227.23seller from consumers.
227.24    Subd. 3. Department of Revenue provisions. The audit, assessment, appeal,
227.25collection, refund, penalty, interest, enforcement, and administrative provisions of
227.26chapters 270C and 289A that are applicable to the taxes imposed by chapter 297A apply
227.27to any fee imposed under section 403.161.
227.28    Subd. 4. Procedures for resale transactions. The commissioner of revenue shall
227.29establish procedures by which a seller of prepaid wireless telecommunications service
227.30may document that a sale is not a retail transaction. These procedures must substantially
227.31coincide with the procedures for documenting sale for resale transactions as provided in
227.32chapter 297A.
227.33    Subd. 5. Fees deposited. (a) The commissioner of revenue shall, based on
227.34the relative proportion of the prepaid wireless E911 fee and the prepaid wireless
227.35telecommunications access Minnesota fee imposed per retail transaction, divide the fees
228.1collected in corresponding proportions. Within 30 days of receipt of the collected fees,
228.2the commissioner shall:
228.3(1) deposit the proportion of the collected fees attributable to the prepaid wireless
228.4E911 fee in the 911 emergency telecommunications service account in the special revenue
228.5fund; and
228.6(2) deposit the proportion of collected fees attributable to the prepaid wireless
228.7telecommunications access Minnesota fee in the telecommunications access fund
228.8established in section 237.52, subdivision 1.
228.9(b) The department may deduct and retain an amount, not to exceed two percent of
228.10collected fees, to reimburse its direct costs of administering the collection and remittance
228.11of prepaid wireless E911 fees and prepaid wireless telecommunications access Minnesota
228.12fees.
228.13EFFECTIVE DATE.This section is effective January 1, 2014.

228.14    Sec. 17. [403.163] LIABILITY PROTECTION FOR SELLERS AND
228.15PROVIDERS.
228.16(a) A provider or seller of prepaid wireless telecommunications service is not liable
228.17for damages to any person resulting from or incurred in connection with providing any
228.18lawful assistance in good faith to any investigative or law enforcement officer of the
228.19United States, this or any other state, or any political subdivision of this or any other state.
228.20(b) In addition to the protection from liability provided by paragraph (a), section
228.21403.08, subdivision 11, applies to sellers and providers.
228.22EFFECTIVE DATE.This section is effective the day following final enactment.

228.23    Sec. 18. [403.164] EXCLUSIVITY OF PREPAID WIRELESS E911 FEE.
228.24The prepaid wireless E911 fee imposed by section 403.161 is the only E911 funding
228.25obligation imposed with respect to prepaid wireless telecommunications service in this
228.26state, and no tax, fee, surcharge, or other charge may be imposed by this state, any political
228.27subdivision of this state, or any intergovernmental agency, for E911 funding purposes,
228.28upon any provider, seller, or consumer with respect to the sale, purchase, use, or provision
228.29of prepaid wireless telecommunications service.
228.30EFFECTIVE DATE.This section is effective January 1, 2014.

229.1    Sec. 19. Laws 2010, First Special Session chapter 1, article 13, section 4, subdivision
229.21, as amended by Laws 2011, First Special Session chapter 7, article 6, section 22, is
229.3amended to read:
229.4    Subdivision 1. Political contribution credit. Notwithstanding the provisions of
229.5Minnesota Statutes, section 290.06, subdivision 23, or any other law to the contrary, the
229.6political contribution refund does not apply to contributions made after June 30, 2009, and
229.7before July 1, 2013 2017.
229.8EFFECTIVE DATE.This section is effective the day following final enactment.

229.9    Sec. 20. REPORT; RECOMMENDATIONS.
229.10(a) By March 1, 2014, the commissioner of public safety shall submit a report to
229.11the chairs and ranking minority members of the legislative committees with primary
229.12jurisdiction over public safety and telecommunications that assesses the amount of
229.13revenue collected from the fees imposed under Minnesota Statutes, section 403.161,
229.14and recommends any adjustment of those fees that the commissioner of public safety
229.15determines is necessary in order to:
229.16(1) fund legislative appropriations from the 911 emergency telecommunications
229.17service account and to maintain a reasonable fund reserve; and
229.18(2) maintain fairness with respect to the amount of fees paid by customers of
229.19prepaid wireless telecommunications service as compared with customers of other
229.20telecommunications services.
229.21(b) A wireless telecommunications service provider shall provide any information
229.22requested by the commissioner of public safety for the purposes of the report.
229.23EFFECTIVE DATE.This section is effective January 1, 2014.

229.24    Sec. 21. PURPOSE STATEMENTS; TAX EXPENDITURES.
229.25    Subdivision 1. Authority. This section is intended to fulfill the requirement under
229.26Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax
229.27expenditure provide a purpose for the tax expenditure and a standard or goal against
229.28which its effectiveness may be measured.
229.29    Subd. 2. Federal conformity. The provisions of article 6 conforming Minnesota
229.30individual income tax to changes in federal law are intended to simplify compliance with
229.31and administration of the individual income tax.
229.32    Subd. 3. Employment of qualified veterans tax credit. The provisions of article 6,
229.33section 30, providing a tax credit for the employment of qualified veterans, are intended to
230.1give an incentive to employers to hire unemployed and disabled veterans. The standard
230.2against which the effectiveness of the credit is to be measured is the additional number of
230.3veterans who are hired as a result of the tax credit.
230.4    Subd. 4. Railroad track maintenance subtraction. The provisions of article 6,
230.5sections 10 and 12, allowing an individual income and corporate franchise tax subtraction
230.6for the amount allowed under the federal credit for railroad maintenance expenses, are
230.7intended to increase the combined federal and state tax incentives available to Class II
230.8and Class III railroads for maintaining and upgrading track in Minnesota. The standard
230.9against which effectiveness is to be measured is the additional miles of track maintained
230.10or upgraded following allowance of the state tax subtraction in addition to the existing
230.11federal tax credit.
230.12    Subd. 5. Sales tax exemption of coin-operated amusement devices. The
230.13provisions of article 8, section 2, exempting certain sales of coin-operated entertainment
230.14and amusement devices is intended to reduce tax pyramiding by eliminating the tax on an
230.15input used in providing a taxable service.
230.16    Subd. 6. Motor vehicle rental tax exemption for car sharing. The provisions of
230.17article 8, section 4, exempting nonprofit car sharing companies from the extra tax on short
230.18term car rentals is intended to provide a similar tax treatment between motor vehicle
230.19ownership and motor vehicle sharing.
230.20    Subd. 7. Expansion of the sales tax exemption on durable medical products and
230.21prosthetics. The provisions of article 8, section 8, expanding the definition of items
230.22included in repair and replacement parts of durable medical equipment and prosthetics
230.23and exempting Medicare and medicaid purchases is intended to simplify sales tax
230.24administration in this area and provide relief for sellers who cannot collect the tax under
230.25these programs.
230.26    Subd. 8. Exemption for public safety radio communication systems. The
230.27provisions of article 8, section 10, expanding the existing sales tax exemption for certain
230.28types of public safety radio systems in certain counties to all types of systems in all
230.29counties is intended to provide equal tax treatment to all local governments in the state
230.30on these purchases.
230.31    Subd. 9. Sales tax exemption for established religious orders. The provisions of
230.32article 8, section 11, exempting certain sales between a religious order and an affiliated
230.33institute of higher education, is intended to retain an existing sales tax exemption that
230.34exists between St. John's Abbey and St. John's University after a governing restructure
230.35between the two entities.
231.1    Subd. 10. Sales tax exemption for nursing homes and boarding care homes.
231.2The provisions of article 8, section 12, exempting certain nursing homes and boarding
231.3care homes is intended to clarify that an existing exemption for these facilities is not
231.4affected by a recent property tax case related to defining nonprofit organizations engaged
231.5in charitable activities.
231.6    Subd. 11. Construction sales tax exemptions. The provisions of article 8, sections
231.713, 14, and 15, exempting from sales tax construction materials for various entities, are
231.8intended to increase jobs and reduce tax pyramiding by reducing the tax on inputs used to
231.9provide taxable goods and services.
231.10    Subd. 12. Sales tax exemption on certain public infrastructure. The provisions
231.11of article 10, section 1, exempting construction materials used in public infrastructure
231.12projects related to the destination medical center plan is intended to reduce city costs
231.13for those projects.
231.14EFFECTIVE DATE.This section is effective the day following final enactment.


231.17    Section 1. Minnesota Statutes 2012, section 38.18, is amended to read:
231.1838.18 COUNTY FAIRGROUNDS; IMPROVEMENT AIDED.
231.19    Any Each town, statutory city, or school district in this state, now or hereafter at any
231.20time having a an estimated market value of all its taxable property, exclusive of money and
231.21credits, of more than $105,000,000, and having a county fair located within its corporate
231.22limits, is hereby authorized to aid in defraying may pay part of the expense of improving
231.23any such the fairground, by appropriating and paying over to the treasurer of the county
231.24owning the fairground such sum of money, not exceeding $10,000, for each of the political
231.25subdivisions, as the its governing body of the town, statutory city, or school district may,
231.26by resolution, determine determines to be for the best interest of the political subdivision,.
231.27 The sums so appropriated to amounts paid to the county must be used solely for the purpose
231.28of aiding in the improvement of to improve the fairground in such the manner as the county
231.29board of the county shall determine determines to be for the best interest of the county.

231.30    Sec. 2. Minnesota Statutes 2012, section 40A.15, subdivision 2, is amended to read:
231.31    Subd. 2. Eligible recipients. All counties within the state, municipalities that prepare
231.32plans and official controls instead of a county, and districts are eligible for assistance
231.33under the program. Counties and districts may apply for assistance on behalf of other
232.1municipalities. In order to be eligible for financial assistance a county or municipality must
232.2agree to levy at least 0.01209 percent of taxable estimated market value for agricultural
232.3land preservation and conservation activities or otherwise spend the equivalent amount of
232.4local money on those activities, or spend $15,000 of local money, whichever is less.

232.5    Sec. 3. Minnesota Statutes 2012, section 69.011, subdivision 1, is amended to read:
232.6    Subdivision 1. Definitions. Unless the language or context clearly indicates that
232.7a different meaning is intended, the following words and terms, for the purposes of this
232.8chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
232.9    (a) "Commissioner" means the commissioner of revenue.
232.10    (b) "Municipality" means:
232.11    (1) a home rule charter or statutory city;
232.12    (2) an organized town;
232.13    (3) a park district subject to chapter 398;
232.14    (4) the University of Minnesota;
232.15    (5) for purposes of the fire state aid program only, an American Indian tribal
232.16government entity located within a federally recognized American Indian reservation;
232.17    (6) for purposes of the police state aid program only, an American Indian tribal
232.18government with a tribal police department which exercises state arrest powers under
232.19section 626.90, 626.91, 626.92, or 626.93;
232.20    (7) for purposes of the police state aid program only, the Metropolitan Airports
232.21Commission; and
232.22    (8) for purposes of the police state aid program only, the Department of Natural
232.23Resources and the Department of Public Safety with respect to peace officers covered
232.24under chapter 352B.
232.25    (c) "Minnesota Firetown Premium Report" means a form prescribed by the
232.26commissioner containing space for reporting by insurers of fire, lightning, sprinkler
232.27leakage and extended coverage premiums received upon risks located or to be performed
232.28in this state less return premiums and dividends.
232.29    (d) "Firetown" means the area serviced by any municipality having a qualified fire
232.30department or a qualified incorporated fire department having a subsidiary volunteer
232.31firefighters' relief association.
232.32    (e) "Estimated market value" means latest available estimated market value of all
232.33property in a taxing jurisdiction, whether the property is subject to taxation, or exempt
232.34from ad valorem taxation obtained from information which appears on abstracts filed with
232.35the commissioner of revenue or equalized by the State Board of Equalization.
233.1    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the
233.2commissioner for reporting by each fire and casualty insurer of all premiums received
233.3upon direct business received by it in this state, or by its agents for it, in cash or otherwise,
233.4during the preceding calendar year, with reference to insurance written for insuring against
233.5the perils contained in auto insurance coverages as reported in the Minnesota business
233.6schedule of the annual financial statement which each insurer is required to file with
233.7the commissioner in accordance with the governing laws or rules less return premiums
233.8and dividends.
233.9    (g) "Peace officer" means any person:
233.10    (1) whose primary source of income derived from wages is from direct employment
233.11by a municipality or county as a law enforcement officer on a full-time basis of not less
233.12than 30 hours per week;
233.13    (2) who has been employed for a minimum of six months prior to December 31
233.14preceding the date of the current year's certification under subdivision 2, clause (b);
233.15    (3) who is sworn to enforce the general criminal laws of the state and local ordinances;
233.16    (4) who is licensed by the Peace Officers Standards and Training Board and is
233.17authorized to arrest with a warrant; and
233.18    (5) who is a member of the State Patrol retirement plan or the public employees
233.19police and fire fund.
233.20    (h) "Full-time equivalent number of peace officers providing contract service" means
233.21the integral or fractional number of peace officers which would be necessary to provide
233.22the contract service if all peace officers providing service were employed on a full-time
233.23basis as defined by the employing unit and the municipality receiving the contract service.
233.24    (i) "Retirement benefits other than a service pension" means any disbursement
233.25authorized under section 424A.05, subdivision 3, clauses (3) and (4).
233.26    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means:
233.27    (1) for the police state aid program and police relief association financial reports:
233.28    (i) the person who was elected or appointed to the specified position or, in the
233.29absence of the person, another person who is designated by the applicable governing body;
233.30    (ii) in a park district, the secretary of the board of park district commissioners;
233.31    (iii) in the case of the University of Minnesota, the official designated by the Board
233.32of Regents;
233.33    (iv) for the Metropolitan Airports Commission, the person designated by the
233.34commission;
233.35    (v) for the Department of Natural Resources or the Department of Public Safety, the
233.36respective commissioner;
234.1    (vi) for a tribal police department which exercises state arrest powers under section
234.2626.90 , 626.91, 626.92, or 626.93, the person designated by the applicable American
234.3Indian tribal government; and
234.4    (2) for the fire state aid program and fire relief association financial reports, the
234.5person who was elected or appointed to the specified position, or, for governmental
234.6entities other than counties, if the governing body of the governmental entity designates
234.7the position to perform the function, the chief financial official of the governmental entity
234.8or the chief administrative official of the governmental entity.
234.9    (k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the
234.10retirement plan established by chapter 353G.

234.11    Sec. 4. Minnesota Statutes 2012, section 69.021, subdivision 7, is amended to read:
234.12    Subd. 7. Apportionment of fire state aid to municipalities and relief associations.
234.13    (a) The commissioner shall apportion the fire state aid relative to the premiums reported
234.14on the Minnesota Firetown Premium Reports filed under this chapter to each municipality
234.15and/or firefighters relief association.
234.16    (b) The commissioner shall calculate an initial fire state aid allocation amount for
234.17each municipality or fire department under paragraph (c) and a minimum fire state aid
234.18allocation amount for each municipality or fire department under paragraph (d). The
234.19municipality or fire department must receive the larger fire state aid amount.
234.20    (c) The initial fire state aid allocation amount is the amount available for
234.21apportionment as fire state aid under subdivision 5, without inclusion of any additional
234.22funding amount to support a minimum fire state aid amount under section 423A.02,
234.23subdivision 3 , allocated one-half in proportion to the population as shown in the last official
234.24statewide federal census for each fire town and one-half in proportion to the estimated
234.25market value of each fire town, including (1) the estimated market value of tax-exempt
234.26property and (2) the estimated market value of natural resources lands receiving in lieu
234.27payments under sections 477A.11 to 477A.14, but excluding the estimated market value
234.28of minerals. In the case of incorporated or municipal fire departments furnishing fire
234.29protection to other cities, towns, or townships as evidenced by valid fire service contracts
234.30filed with the commissioner, the distribution must be adjusted proportionately to take
234.31into consideration the crossover fire protection service. Necessary adjustments must be
234.32made to subsequent apportionments. In the case of municipalities or independent fire
234.33departments qualifying for the aid, the commissioner shall calculate the state aid for the
234.34municipality or relief association on the basis of the population and the estimated market
234.35value of the area furnished fire protection service by the fire department as evidenced by
235.1duly executed and valid fire service agreements filed with the commissioner. If one or
235.2more fire departments are furnishing contracted fire service to a city, town, or township,
235.3only the population and estimated market value of the area served by each fire department
235.4may be considered in calculating the state aid and the fire departments furnishing service
235.5shall enter into an agreement apportioning among themselves the percent of the population
235.6and the estimated market value of each service area. The agreement must be in writing
235.7and must be filed with the commissioner.
235.8    (d) The minimum fire state aid allocation amount is the amount in addition to the
235.9initial fire state allocation amount that is derived from any additional funding amount
235.10to support a minimum fire state aid amount under section 423A.02, subdivision 3, and
235.11allocated to municipalities with volunteer firefighters relief associations or covered by the
235.12voluntary statewide lump-sum volunteer firefighter retirement plan based on the number
235.13of active volunteer firefighters who are members of the relief association as reported
235.14in the annual financial reporting for the calendar year 1993 to the Office of the State
235.15Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or
235.16fire departments with volunteer firefighters relief associations receive in total at least a
235.17minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of
235.1830 firefighters. If a relief association is established after calendar year 1993 and before
235.19calendar year 2000, the number of active volunteer firefighters who are members of the
235.20relief association as reported in the annual financial reporting for calendar year 1998
235.21to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters,
235.22shall be used in this determination. If a relief association is established after calendar
235.23year 1999, the number of active volunteer firefighters who are members of the relief
235.24association as reported in the first annual financial reporting submitted to the Office of
235.25the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this
235.26determination. If a relief association is terminated as a result of providing retirement
235.27coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer
235.28firefighter retirement plan under chapter 353G, the number of active volunteer firefighters
235.29of the municipality covered by the statewide plan as certified by the executive director of
235.30the Public Employees Retirement Association to the commissioner and the state auditor,
235.31but not to exceed 30 active firefighters, must be used in this determination.
235.32    (e) Unless the firefighters of the applicable fire department are members of the
235.33voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must
235.34be paid to the treasurer of the municipality where the fire department is located and the
235.35treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit
235.36the aid to the relief association if the relief association has filed a financial report with the
236.1treasurer of the municipality and has met all other statutory provisions pertaining to the
236.2aid apportionment. If the firefighters of the applicable fire department are members of
236.3the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid
236.4must be paid to the executive director of the Public Employees Retirement Association
236.5and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.
236.6    (f) The commissioner may make rules to permit the administration of the provisions
236.7of this section.
236.8    (g) Any adjustments needed to correct prior misallocations must be made to
236.9subsequent apportionments.

236.10    Sec. 5. Minnesota Statutes 2012, section 69.021, subdivision 8, is amended to read:
236.11    Subd. 8. Population and estimated market value. (a) In computations relating to
236.12fire state aid requiring the use of population figures, only official statewide federal census
236.13figures are to be used. Increases or decreases in population disclosed by reason of any
236.14special census must not be taken into consideration.
236.15    (b) In calculations relating to fire state aid requiring the use of estimated market
236.16value property figures, only the latest available estimated market value property figures
236.17may be used.

236.18    Sec. 6. Minnesota Statutes 2012, section 88.51, subdivision 3, is amended to read:
236.19    Subd. 3. Determination of estimated market value. In determining the net tax
236.20capacity of property within any taxing district the value of the surface of lands within any
236.21auxiliary forest therein, as determined by the county board under the provisions of section
236.2288.48, subdivision 3 , shall, for all purposes except the levying of taxes on lands within any
236.23such forest, be deemed the estimated market value thereof.

236.24    Sec. 7. Minnesota Statutes 2012, section 103B.245, subdivision 3, is amended to read:
236.25    Subd. 3. Tax. After adoption of the ordinance under subdivision 2, a local
236.26government unit may annually levy a tax on all taxable property in the district for the
236.27purposes for which the tax district is established. The tax may not exceed 0.02418 percent
236.28of estimated market value on taxable property located in rural towns other than urban
236.29towns, unless allowed by resolution of the town electors. The proceeds of the tax shall
236.30be paid into a fund reserved for these purposes. Any proceeds remaining in the reserve
236.31fund at the time the tax is terminated or the district is dissolved shall be transferred and
236.32irrevocably pledged to the debt service fund of the local unit to be used solely to reduce
236.33tax levies for bonded indebtedness of taxable property in the district.

237.1    Sec. 8. Minnesota Statutes 2012, section 103B.251, subdivision 8, is amended to read:
237.2    Subd. 8. Tax. (a) For the payment of principal and interest on the bonds issued
237.3under subdivision 7 and the payment required under subdivision 6, the county shall
237.4irrevocably pledge and appropriate the proceeds of a tax levied on all taxable property
237.5located within the territory of the watershed management organization or subwatershed
237.6unit for which the bonds are issued. Each year until the reserve for payment of the bonds
237.7is sufficient to retire the bonds, the county shall levy on all taxable property in the territory
237.8of the organization or unit, without respect to any statutory or other limitation on taxes, an
237.9amount of taxes sufficient to pay principal and interest on the bonds and to restore any
237.10deficiencies in reserves required to be maintained for payment of the bonds.
237.11    (b) The tax levied on rural towns other than urban towns may not exceed 0.02418
237.12percent of taxable estimated market value, unless approved by resolution of the town
237.13electors.
237.14    (c) If at any time the amounts available from the levy on property in the territory of
237.15the organization are insufficient to pay principal and interest on the bonds when due, the
237.16county shall make payment from any available funds in the county treasury.
237.17    (d) The amount of any taxes which are required to be levied outside of the territory
237.18of the watershed management organization or unit or taken from the general funds of the
237.19county to pay principal or interest on the bonds shall be reimbursed to the county from
237.20taxes levied within the territory of the watershed management organization or unit.

237.21    Sec. 9. Minnesota Statutes 2012, section 103B.635, subdivision 2, is amended to read:
237.22    Subd. 2. Municipal funding of district. (a) The governing body or board of
237.23supervisors of each municipality in the district must provide the funds necessary to meet
237.24its proportion of the total cost determined by the board, provided the total funding from
237.25all municipalities in the district for the costs shall not exceed an amount equal to .00242
237.26percent of the total taxable estimated market value within the district, unless three-fourths
237.27of the municipalities in the district pass a resolution concurring to the additional costs.
237.28    (b) The funds must be deposited in the treasury of the district in amounts and at
237.29times as the treasurer of the district requires.

237.30    Sec. 10. Minnesota Statutes 2012, section 103B.691, subdivision 2, is amended to read:
237.31    Subd. 2. Municipal funding of district. (a) The governing body or board of
237.32supervisors of each municipality in the district shall provide the funds necessary to meet its
237.33proportion of the total cost to be borne by the municipalities as finally certified by the board.
238.1    (b) The municipality's funds may be raised by any means within the authority of
238.2the municipality. The municipalities may each levy a tax not to exceed .02418 percent of
238.3taxable estimated market value on the taxable property located in the district to provide
238.4the funds. The levy shall be within all other limitations provided by law.
238.5    (c) The funds must be deposited into the treasury of the district in amounts and at
238.6times as the treasurer of the district requires.

238.7    Sec. 11. Minnesota Statutes 2012, section 103D.905, subdivision 2, is amended to read:
238.8    Subd. 2. Organizational expense fund. (a) An organizational expense fund,
238.9consisting of an ad valorem tax levy, shall not exceed 0.01596 percent of taxable estimated
238.10 market value, or $60,000, whichever is less. The money in the fund shall be used for
238.11organizational expenses and preparation of the watershed management plan for projects.
238.12    (b) The managers may borrow from the affected counties up to 75 percent of the
238.13anticipated funds to be collected from the organizational expense fund levy and the
238.14counties affected may make the advancements.
238.15    (c) The advancement of anticipated funds shall be apportioned among affected
238.16counties in the same ratio as the net tax capacity of the area of the counties within
238.17the watershed district bears to the net tax capacity of the entire watershed district. If a
238.18watershed district is enlarged, an organizational expense fund may be levied against the
238.19area added to the watershed district in the same manner as provided in this subdivision.
238.20    (d) Unexpended funds collected for the organizational expense may be transferred to
238.21the administrative fund and used for the purposes of the administrative fund.

238.22    Sec. 12. Minnesota Statutes 2012, section 103D.905, subdivision 3, is amended to read:
238.23    Subd. 3. General fund. A general fund, consisting of an ad valorem tax levy, may
238.24not exceed 0.048 percent of taxable estimated market value, or $250,000, whichever is
238.25less. The money in the fund shall be used for general administrative expenses and for
238.26the construction or implementation and maintenance of projects of common benefit to
238.27the watershed district. The managers may make an annual levy for the general fund as
238.28provided in section 103D.911. In addition to the annual general levy, the managers may
238.29annually levy a tax not to exceed 0.00798 percent of taxable estimated market value
238.30for a period not to exceed 15 consecutive years to pay the cost attributable to the basic
238.31water management features of projects initiated by petition of a political subdivision
238.32within the watershed district or by petition of at least 50 resident owners whose property
238.33is within the watershed district.

239.1    Sec. 13. Minnesota Statutes 2012, section 103D.905, subdivision 8, is amended to read:
239.2    Subd. 8. Survey and data acquisition fund. (a) A survey and data acquisition fund
239.3is established and used only if other funds are not available to the watershed district to pay
239.4for making necessary surveys and acquiring data.
239.5    (b) The survey and data acquisition fund consists of the proceeds of a property tax
239.6that can be levied only once every five years. The levy may not exceed 0.02418 percent of
239.7taxable estimated market value.
239.8    (c) The balance of the survey and data acquisition fund may not exceed $50,000.
239.9    (d) In a subsequent proceeding for a project where a survey has been made, the
239.10attributable cost of the survey as determined by the managers shall be included as a part of
239.11the cost of the work and the sum shall be repaid to the survey and data acquisition fund.

239.12    Sec. 14. Minnesota Statutes 2012, section 117.025, subdivision 7, is amended to read:
239.13    Subd. 7. Structurally substandard. "Structurally substandard" means a building:
239.14    (1) that was inspected by the appropriate local government and cited for one or more
239.15enforceable housing, maintenance, or building code violations;
239.16    (2) in which the cited building code violations involve one or more of the following:
239.17    (i) a roof and roof framing element;
239.18    (ii) support walls, beams, and headers;
239.19    (iii) foundation, footings, and subgrade conditions;
239.20    (iv) light and ventilation;
239.21    (v) fire protection, including egress;
239.22    (vi) internal utilities, including electricity, gas, and water;
239.23    (vii) flooring and flooring elements; or
239.24    (viii) walls, insulation, and exterior envelope;
239.25    (3) in which the cited housing, maintenance, or building code violations have not
239.26been remedied after two notices to cure the noncompliance; and
239.27    (4) has uncured housing, maintenance, and building code violations, satisfaction of
239.28which would cost more than 50 percent of the assessor's taxable estimated market value
239.29for the building, excluding land value, as determined under section 273.11 for property
239.30taxes payable in the year in which the condemnation is commenced.
239.31A local government is authorized to seek from a judge or magistrate an administrative
239.32warrant to gain access to inspect a specific building in a proposed development or
239.33redevelopment area upon showing of probable cause that a specific code violation has
239.34occurred and that the violation has not been cured, and that the owner has denied the local
239.35government access to the property. Items of evidence that may support a conclusion of
240.1probable cause may include recent fire or police inspections, housing inspection, exterior
240.2evidence of deterioration, or other similar reliable evidence of deterioration in the specific
240.3building.

240.4    Sec. 15. Minnesota Statutes 2012, section 127A.48, subdivision 1, is amended to read:
240.5    Subdivision 1. Computation. The Department of Revenue must annually conduct
240.6an assessment/sales ratio study of the taxable property in each county, city, town, and
240.7school district in accordance with the procedures in subdivisions 2 and 3. Based upon the
240.8results of this assessment/sales ratio study, the Department of Revenue must determine an
240.9aggregate equalized net tax capacity for the various classes of taxable property in each
240.10taxing district, the aggregate of which tax capacity shall be is designated as the adjusted net
240.11tax capacity. The adjusted net tax capacity must be reduced by the captured tax capacity of
240.12tax increment districts under section 469.177, subdivision 2, fiscal disparities contribution
240.13tax capacities under sections 276A.06 and 473F.08, and the tax capacity of transmission
240.14lines required to be subtracted from the local tax base under section 273.425; and increased
240.15by fiscal disparities distribution tax capacities under sections 276A.06 and 473F.08. The
240.16adjusted net tax capacities shall be determined using the net tax capacity percentages in
240.17effect for the assessment year following the assessment year of the study. The Department
240.18of Revenue must make whatever estimates are necessary to account for changes in the
240.19classification system. The Department of Revenue may incur the expense necessary to
240.20make the determinations. The commissioner of revenue may reimburse any county or
240.21governmental official for requested services performed in ascertaining the adjusted net tax
240.22capacity. On or before March 15 annually, the Department of Revenue shall file with the
240.23chair of the Tax Committee of the house of representatives and the chair of the Committee
240.24on Taxes and Tax laws of the senate a report of adjusted net tax capacities for school
240.25districts. On or before June 15 annually, the Department of Revenue shall file its final report
240.26on the adjusted net tax capacities for school districts established by the previous year's
240.27assessments and the current year's net tax capacity percentages with the commissioner of
240.28education and each county auditor for those school districts for which the auditor has the
240.29responsibility for determination of local tax rates. A copy of the report so filed shall be
240.30mailed to the clerk of each school district involved and to the county assessor or supervisor
240.31of assessments of the county or counties in which each school district is located.
240.32EFFECTIVE DATE.This section is effective the day following final enactment.

241.1    Sec. 16. Minnesota Statutes 2012, section 138.053, is amended to read:
241.2138.053 COUNTY HISTORICAL SOCIETY; TAX LEVY; CITIES OR
241.3TOWNS.
241.4    The governing body of any home rule charter or statutory city or town may annually
241.5appropriate from its general fund an amount not to exceed 0.02418 percent of taxable
241.6 estimated market value, derived from ad valorem taxes on property or other revenues, to
241.7be paid to the historical society of its respective county to be used for the promotion of
241.8historical work and to aid in defraying the expenses of carrying on the historical work in the
241.9county. No city or town may appropriate any funds for the benefit of any historical society
241.10unless the society is affiliated with and approved by the Minnesota Historical Society.

241.11    Sec. 17. Minnesota Statutes 2012, section 144F.01, subdivision 4, is amended to read:
241.12    Subd. 4. Property tax levy authority. The district's board may levy a tax on the
241.13taxable real and personal property in the district. The ad valorem tax levy may not exceed
241.140.048 percent of the taxable estimated market value of the district or $400,000, whichever
241.15is less. The proceeds of the levy must be used as provided in subdivision 5. The board shall
241.16certify the levy at the times as provided under section 275.07. The board shall provide the
241.17county with whatever information is necessary to identify the property that is located within
241.18the district. If the boundaries include a part of a parcel, the entire parcel shall be included
241.19in the district. The county auditors must spread, collect, and distribute the proceeds of the
241.20tax at the same time and in the same manner as provided by law for all other property taxes.

241.21    Sec. 18. Minnesota Statutes 2012, section 162.07, subdivision 3, is amended to read:
241.22    Subd. 3. Computation for rural counties. An amount equal to a levy of 0.01596
241.23percent on each rural county's total taxable estimated market value for the last preceding
241.24calendar year shall be computed and shall be subtracted from the county's total estimated
241.25construction costs. The result thereof shall be the money needs of the county. For the
241.26purpose of this section, "rural counties" means all counties having a population of less
241.27than 175,000.

241.28    Sec. 19. Minnesota Statutes 2012, section 162.07, subdivision 4, is amended to read:
241.29    Subd. 4. Computation for urban counties. An amount equal to a levy of 0.00967
241.30percent on each urban county's total taxable estimated market value for the last preceding
241.31calendar year shall be computed and shall be subtracted from the county's total estimated
241.32construction costs. The result thereof shall be the money needs of the county. For
242.1the purpose of this section, "urban counties" means all counties having a population
242.2of 175,000 or more.

242.3    Sec. 20. Minnesota Statutes 2012, section 163.04, subdivision 3, is amended to read:
242.4    Subd. 3. Bridges within certain cities. When the council of any statutory city or
242.5city of the third or fourth class may determine that it is necessary to build or improve any
242.6bridge or bridges, including approaches thereto, and any dam or retaining works connected
242.7therewith, upon or forming a part of streets or highways either wholly or partly within
242.8its limits, the county board shall appropriate one-half of the money as may be necessary
242.9therefor from the county road and bridge fund, not exceeding during any year one-half
242.10the amount of taxes paid into the county road and bridge fund during the preceding year,
242.11on property within the corporate limits of the city. The appropriation shall be made upon
242.12the petition of the council, which petition shall be filed by the council with the county
242.13board prior to the fixing by the board of the annual county tax levy. The county board
242.14shall determine the plans and specifications, shall let all necessary contracts, shall have
242.15charge of construction, and upon its request, warrants in payment thereof shall be issued
242.16by the county auditor, from time to time, as the construction work proceeds. Any unpaid
242.17balance may be paid or advanced by the city. On petition of the council, the appropriations
242.18of the county board, during not to exceed three successive years, may be made to apply
242.19on the construction of the same items and to repay any money advanced by the city in
242.20the construction thereof. None of the provisions of this section shall be construed to
242.21be mandatory as applied to any city whose estimated market value exceeds $2,100 per
242.22capita of its population.

242.23    Sec. 21. Minnesota Statutes 2012, section 163.06, subdivision 6, is amended to read:
242.24    Subd. 6. Expenditure in certain counties. In any county having not less than 95
242.25nor more than 105 full and fractional townships, and having a an estimated market value
242.26of not less than $12,000,000 nor more than $21,000,000, exclusive of money and credits,
242.27 the county board, by resolution, may expend the funds provided in subdivision 4 in any
242.28organized or unorganized township town or unorganized territory or portion thereof in
242.29such county.

242.30    Sec. 22. Minnesota Statutes 2012, section 165.10, subdivision 1, is amended to read:
242.31    Subdivision 1. Certain counties may issue and sell. The county board of any
242.32county having no outstanding road and bridge bonds may issue and sell county road bonds
242.33in an amount not exceeding 0.12089 percent of the estimated market value of the taxable
243.1property within the county exclusive of money and credits, for the purpose of constructing,
243.2reconstructing, improving, or maintaining any bridge or bridges on any highway under its
243.3jurisdiction, without submitting the matter to a vote of the electors of the county.

243.4    Sec. 23. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision
243.5to read:
243.6    Subd. 14. Estimated market value. "Estimated market value" means the assessor's
243.7determination of market value, including the effects of any orders made under section
243.8270.12 or chapter 274, for the parcel. The provisions of section 273.032 apply for certain
243.9uses in determining the total estimated market value for the taxing jurisdiction.

243.10    Sec. 24. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision
243.11to read:
243.12    Subd. 15. Taxable market value. "Taxable market value" means estimated market
243.13value for the parcel as reduced by market value exclusions, deferments of value, or other
243.14adjustments required by law, that reduce market value before the application of class rates.

243.15    Sec. 25. Minnesota Statutes 2012, section 273.032, is amended to read:
243.16273.032 MARKET VALUE DEFINITION.
243.17    (a) Unless otherwise provided, for the purpose of determining any property tax
243.18levy limitation based on market value or any limit on net debt, the issuance of bonds,
243.19certificates of indebtedness, or capital notes based on market value, any qualification to
243.20receive state aid based on market value, or any state aid amount based on market value, the
243.21terms "market value," "taxable estimated market value," and "market valuation," whether
243.22equalized or unequalized, mean the total taxable estimated market value of taxable property
243.23within the local unit of government before any of the following or similar adjustments for:
243.24    (1) the market value exclusions under:
243.25    (i) section 273.11, subdivisions 14a and 14c (vacant platted land);
243.26    (ii) section 273.11, subdivision 16 (certain improvements to homestead property);
243.27    (iii) section 273.11, subdivisions 19 and 20 (certain improvements to business
243.28properties);
243.29    (iv) section 273.11, subdivision 21 (homestead property damaged by mold);
243.30    (v) section 273.11, subdivision 22 (qualifying lead hazardous reduction projects);
243.31    (vi) section 273.13, subdivision 34 (homestead of a disabled veteran or family
243.32caregiver);
243.33    (vii) section 273.13, subdivision 35 (homestead market value exclusion); or
244.1    (2) the deferment of value under:
244.2    (i) the Minnesota Agricultural Property Tax Law, section 273.111;
244.3    (ii) the Aggregate Resource Preservation Law, section 273.1115;
244.4    (iii) the Minnesota Open Space Property Tax Law, section 273.112;
244.5    (iv) the rural preserves property tax program, section 273.114; or
244.6    (v) the Metropolitan Agricultural Preserves Act, section 473H.10; or
244.7    (3) the adjustments to tax capacity for:
244.8    (i) tax increment, financing under sections 469.174 to 469.1794;
244.9    (ii) fiscal disparity, disparities under chapter 276A or 473F; or
244.10    (iii) powerline credit, or wind energy values, but after the limited market adjustments
244.11under section 273.11, subdivision 1a, and after the market value exclusions of certain
244.12improvements to homestead property under section 273.11, subdivision 16 under section
244.13273.425.
244.14    (b) Estimated market value under paragraph (a) also includes the market value
244.15of tax-exempt property if the applicable law specifically provides that the limitation,
244.16qualification, or aid calculation includes tax-exempt property.
244.17    (c) Unless otherwise provided, "market value," "taxable estimated market value,"
244.18and "market valuation" for purposes of this paragraph property tax levy limitations and
244.19calculation of state aid, refer to the taxable estimated market value for the previous
244.20assessment year and for purposes of limits on net debt, the issuance of bonds, certificates of
244.21indebtedness, or capital notes refer to the estimated market value as last finally equalized.
244.22    For the purpose of determining any net debt limit based on market value, or any limit
244.23on the issuance of bonds, certificates of indebtedness, or capital notes based on market
244.24value, the terms "market value," "taxable market value," and "market valuation," whether
244.25equalized or unequalized, mean the total taxable market value of property within the local
244.26unit of government before any adjustments for tax increment, fiscal disparity, powerline
244.27credit, or wind energy values, but after the limited market value adjustments under section
244.28273.11, subdivision 1a, and after the market value exclusions of certain improvements to
244.29homestead property under section 273.11, subdivision 16. Unless otherwise provided,
244.30"market value," "taxable market value," and "market valuation" for purposes of this
244.31paragraph, mean the taxable market value as last finally equalized.
244.32    (d) For purposes of a provision of a home rule charter or of any special law that is not
244.33codified in the statutes and that imposes a levy limitation based on market value or any limit
244.34on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market
244.35value, the terms "market value," "taxable market value," and "market valuation," whether
244.36equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

245.1    Sec. 26. Minnesota Statutes 2012, section 273.11, subdivision 1, is amended to read:
245.2    Subdivision 1. Generally. Except as provided in this section or section 273.17,
245.3subdivision 1 , all property shall be valued at its market value. The market value as
245.4determined pursuant to this section shall be stated such that any amount under $100 is
245.5rounded up to $100 and any amount exceeding $100 shall be rounded to the nearest $100.
245.6In estimating and determining such value, the assessor shall not adopt a lower or different
245.7standard of value because the same is to serve as a basis of taxation, nor shall the assessor
245.8adopt as a criterion of value the price for which such property would sell at a forced sale,
245.9or in the aggregate with all the property in the town or district; but the assessor shall value
245.10each article or description of property by itself, and at such sum or price as the assessor
245.11believes the same to be fairly worth in money. The assessor shall take into account the
245.12effect on the market value of property of environmental factors in the vicinity of the
245.13property. In assessing any tract or lot of real property, the value of the land, exclusive of
245.14structures and improvements, shall be determined, and also the value of all structures and
245.15improvements thereon, and the aggregate value of the property, including all structures
245.16and improvements, excluding the value of crops growing upon cultivated land. In valuing
245.17real property upon which there is a mine or quarry, it shall be valued at such price as such
245.18property, including the mine or quarry, would sell for at a fair, voluntary sale, for cash,
245.19if the material being mined or quarried is not subject to taxation under section 298.015
245.20and the mine or quarry is not exempt from the general property tax under section 298.25.
245.21In valuing real property which is vacant, platted property shall be assessed as provided
245.22in subdivision 14 subdivisions 14a and 14c. All property, or the use thereof, which is
245.23taxable under section 272.01, subdivision 2, or 273.19, shall be valued at the market
245.24value of such property and not at the value of a leasehold estate in such property, or at
245.25some lesser value than its market value.

245.26    Sec. 27. Minnesota Statutes 2012, section 273.124, subdivision 3a, is amended to read:
245.27    Subd. 3a. Manufactured home park cooperative. (a) When a manufactured home
245.28park is owned by a corporation or association organized under chapter 308A or 308B,
245.29and each person who owns a share or shares in the corporation or association is entitled
245.30to occupy a lot within the park, the corporation or association may claim homestead
245.31treatment for the park. Each lot must be designated by legal description or number, and
245.32each lot is limited to not more than one-half acre of land.
245.33    (b) The manufactured home park shall be entitled to homestead treatment if all
245.34of the following criteria are met:
246.1    (1) the occupant or the cooperative corporation or association is paying the ad
246.2valorem property taxes and any special assessments levied against the land and structure
246.3either directly, or indirectly through dues to the corporation or association; and
246.4    (2) the corporation or association organized under chapter 308A or 308B is wholly
246.5owned by persons having a right to occupy a lot owned by the corporation or association.
246.6    (c) A charitable corporation, organized under the laws of Minnesota with no
246.7outstanding stock, and granted a ruling by the Internal Revenue Service for 501(c)(3)
246.8tax-exempt status, qualifies for homestead treatment with respect to a manufactured home
246.9park if its members hold residential participation warrants entitling them to occupy a lot
246.10in the manufactured home park.
246.11    (d) "Homestead treatment" under this subdivision means the class rate provided for
246.12class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause (5),
246.13item (ii). The homestead market value credit exclusion under section 273.1384 273.13,
246.14subdivision 35, does not apply and the property taxes assessed against the park shall not
246.15be included in the determination of taxes payable for rent paid under section 290A.03.
246.16EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
246.17thereafter.

246.18    Sec. 28. Minnesota Statutes 2012, section 273.124, subdivision 13, is amended to read:
246.19    Subd. 13. Homestead application. (a) A person who meets the homestead
246.20requirements under subdivision 1 must file a homestead application with the county
246.21assessor to initially obtain homestead classification.
246.22    (b) The format and contents of a uniform homestead application shall be prescribed
246.23by the commissioner of revenue. The application must clearly inform the taxpayer that
246.24this application must be signed by all owners who occupy the property or by the qualifying
246.25relative and returned to the county assessor in order for the property to receive homestead
246.26treatment.
246.27    (c) Every property owner applying for homestead classification must furnish to the
246.28county assessor the Social Security number of each occupant who is listed as an owner
246.29of the property on the deed of record, the name and address of each owner who does not
246.30occupy the property, and the name and Social Security number of each owner's spouse who
246.31occupies the property. The application must be signed by each owner who occupies the
246.32property and by each owner's spouse who occupies the property, or, in the case of property
246.33that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
246.34    If a property owner occupies a homestead, the property owner's spouse may not
246.35claim another property as a homestead unless the property owner and the property owner's
247.1spouse file with the assessor an affidavit or other proof required by the assessor stating that
247.2the property qualifies as a homestead under subdivision 1, paragraph (e).
247.3    Owners or spouses occupying residences owned by their spouses and previously
247.4occupied with the other spouse, either of whom fail to include the other spouse's name
247.5and Social Security number on the homestead application or provide the affidavits or
247.6other proof requested, will be deemed to have elected to receive only partial homestead
247.7treatment of their residence. The remainder of the residence will be classified as
247.8nonhomestead residential. When an owner or spouse's name and Social Security number
247.9appear on homestead applications for two separate residences and only one application is
247.10signed, the owner or spouse will be deemed to have elected to homestead the residence for
247.11which the application was signed.
247.12    The Social Security numbers, state or federal tax returns or tax return information,
247.13including the federal income tax schedule F required by this section, or affidavits or other
247.14proofs of the property owners and spouses submitted under this or another section to
247.15support a claim for a property tax homestead classification are private data on individuals as
247.16defined by section 13.02, subdivision 12, but, notwithstanding that section, the private data
247.17may be disclosed to the commissioner of revenue, or, for purposes of proceeding under the
247.18Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
247.19    (d) If residential real estate is occupied and used for purposes of a homestead by a
247.20relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
247.21order for the property to receive homestead status, a homestead application must be filed
247.22with the assessor. The Social Security number of each relative and spouse of a relative
247.23occupying the property shall be required on the homestead application filed under this
247.24subdivision. If a different relative of the owner subsequently occupies the property, the
247.25owner of the property must notify the assessor within 30 days of the change in occupancy.
247.26The Social Security number of a relative or relative's spouse occupying the property
247.27is private data on individuals as defined by section 13.02, subdivision 12, but may be
247.28disclosed to the commissioner of revenue, or, for the purposes of proceeding under the
247.29Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
247.30    (e) The homestead application shall also notify the property owners that the
247.31application filed under this section will not be mailed annually and that if the property
247.32is granted homestead status for any assessment year, that same property shall remain
247.33classified as homestead until the property is sold or transferred to another person, or
247.34the owners, the spouse of the owner, or the relatives no longer use the property as their
247.35homestead. Upon the sale or transfer of the homestead property, a certificate of value must
247.36be timely filed with the county auditor as provided under section 272.115. Failure to
248.1notify the assessor within 30 days that the property has been sold, transferred, or that the
248.2owner, the spouse of the owner, or the relative is no longer occupying the property as a
248.3homestead, shall result in the penalty provided under this subdivision and the property
248.4will lose its current homestead status.
248.5    (f) If the homestead application is not returned within 30 days, the county will send a
248.6second application to the present owners of record. The notice of proposed property taxes
248.7prepared under section 275.065, subdivision 3, shall reflect the property's classification. If
248.8a homestead application has not been filed with the county by December 15, the assessor
248.9shall classify the property as nonhomestead for the current assessment year for taxes
248.10payable in the following year, provided that the owner may be entitled to receive the
248.11homestead classification by proper application under section 375.192.
248.12    (g) At the request of the commissioner, each county must give the commissioner a
248.13list that includes the name and Social Security number of each occupant of homestead
248.14property who is the property owner, property owner's spouse, qualifying relative of a
248.15property owner, or a spouse of a qualifying relative. The commissioner shall use the
248.16information provided on the lists as appropriate under the law, including for the detection
248.17of improper claims by owners, or relatives of owners, under chapter 290A.
248.18    (h) If the commissioner finds that a property owner may be claiming a fraudulent
248.19homestead, the commissioner shall notify the appropriate counties. Within 90 days of
248.20the notification, the county assessor shall investigate to determine if the homestead
248.21classification was properly claimed. If the property owner does not qualify, the county
248.22assessor shall notify the county auditor who will determine the amount of homestead
248.23benefits that had been improperly allowed. For the purpose of this section, "homestead
248.24benefits" means the tax reduction resulting from the classification as a homestead and the
248.25homestead market value exclusion under section 273.13, the taconite homestead credit
248.26under section 273.135, the residential homestead and agricultural homestead credits credit
248.27 under section 273.1384, and the supplemental homestead credit under section 273.1391.
248.28    The county auditor shall send a notice to the person who owned the affected property
248.29at the time the homestead application related to the improper homestead was filed,
248.30demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
248.31of the homestead benefits. The person notified may appeal the county's determination
248.32by serving copies of a petition for review with county officials as provided in section
248.33278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax
248.34Court within 60 days of the date of the notice from the county. Procedurally, the appeal
248.35is governed by the provisions in chapter 271 which apply to the appeal of a property tax
248.36assessment or levy, but without requiring any prepayment of the amount in controversy. If
249.1the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
249.2has been filed, the county auditor shall certify the amount of taxes and penalty to the county
249.3treasurer. The county treasurer will add interest to the unpaid homestead benefits and
249.4penalty amounts at the rate provided in section 279.03 for real property taxes becoming
249.5delinquent in the calendar year during which the amount remains unpaid. Interest may be
249.6assessed for the period beginning 60 days after demand for payment was made.
249.7    If the person notified is the current owner of the property, the treasurer may add the
249.8total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
249.9otherwise payable on the property by including the amounts on the property tax statements
249.10under section 276.04, subdivision 3. The amounts added under this paragraph to the ad
249.11valorem taxes shall include interest accrued through December 31 of the year preceding
249.12the taxes payable year for which the amounts are first added. These amounts, when added
249.13to the property tax statement, become subject to all the laws for the enforcement of real or
249.14personal property taxes for that year, and for any subsequent year.
249.15    If the person notified is not the current owner of the property, the treasurer may
249.16collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
249.17the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment
249.18of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
249.19tax obligations of the person who owned the property at the time the application related to
249.20the improperly allowed homestead was filed. The treasurer may relieve a prior owner of
249.21personal liability for the homestead benefits, penalty, interest, and costs, and instead extend
249.22those amounts on the tax lists against the property as provided in this paragraph to the extent
249.23that the current owner agrees in writing. On all demands, billings, property tax statements,
249.24and related correspondence, the county must list and state separately the amounts of
249.25homestead benefits, penalty, interest and costs being demanded, billed or assessed.
249.26    (i) Any amount of homestead benefits recovered by the county from the property
249.27owner shall be distributed to the county, city or town, and school district where the
249.28property is located in the same proportion that each taxing district's levy was to the total
249.29of the three taxing districts' levy for the current year. Any amount recovered attributable
249.30to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
249.31deposited in the taconite property tax relief account. Any amount recovered that is
249.32attributable to supplemental homestead credit is to be transmitted to the commissioner of
249.33revenue for deposit in the general fund of the state treasury. The total amount of penalty
249.34collected must be deposited in the county general fund.
249.35    (j) If a property owner has applied for more than one homestead and the county
249.36assessors cannot determine which property should be classified as homestead, the county
250.1assessors will refer the information to the commissioner. The commissioner shall make
250.2the determination and notify the counties within 60 days.
250.3    (k) In addition to lists of homestead properties, the commissioner may ask the
250.4counties to furnish lists of all properties and the record owners. The Social Security
250.5numbers and federal identification numbers that are maintained by a county or city
250.6assessor for property tax administration purposes, and that may appear on the lists retain
250.7their classification as private or nonpublic data; but may be viewed, accessed, and used by
250.8the county auditor or treasurer of the same county for the limited purpose of assisting the
250.9commissioner in the preparation of microdata samples under section 270C.12.
250.10    (l) On or before April 30 each year beginning in 2007, each county must provide the
250.11commissioner with the following data for each parcel of homestead property by electronic
250.12means as defined in section 289A.02, subdivision 8:
250.13    (i) the property identification number assigned to the parcel for purposes of taxes
250.14payable in the current year;
250.15    (ii) the name and Social Security number of each occupant of homestead property
250.16who is the property owner, property owner's spouse, qualifying relative of a property
250.17owner, or spouse of a qualifying relative;
250.18    (iii) the classification of the property under section 273.13 for taxes payable in the
250.19current year and in the prior year;
250.20    (iv) an indication of whether the property was classified as a homestead for taxes
250.21payable in the current year because of occupancy by a relative of the owner or by a
250.22spouse of a relative;
250.23    (v) the property taxes payable as defined in section 290A.03, subdivision 13, for the
250.24current year and the prior year;
250.25    (vi) the market value of improvements to the property first assessed for tax purposes
250.26for taxes payable in the current year;
250.27    (vii) the assessor's estimated market value assigned to the property for taxes payable
250.28in the current year and the prior year;
250.29    (viii) the taxable market value assigned to the property for taxes payable in the
250.30current year and the prior year;
250.31    (ix) whether there are delinquent property taxes owing on the homestead;
250.32    (x) the unique taxing district in which the property is located; and
250.33    (xi) such other information as the commissioner decides is necessary.
250.34    The commissioner shall use the information provided on the lists as appropriate
250.35under the law, including for the detection of improper claims by owners, or relatives
250.36of owners, under chapter 290A.
251.1EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
251.2thereafter.

251.3    Sec. 29. Minnesota Statutes 2012, section 273.13, subdivision 21b, is amended to read:
251.4    Subd. 21b. Net tax capacity. (a) Gross tax capacity means the product of the
251.5appropriate gross class rates in this section and market values.
251.6    (b) Net tax capacity means the product of the appropriate net class rates in this
251.7section and taxable market values.
251.8EFFECTIVE DATE.This section is effective the day following final enactment.

251.9    Sec. 30. Minnesota Statutes 2012, section 273.1398, subdivision 3, is amended to read:
251.10    Subd. 3. Disparity reduction aid. The amount of disparity aid certified for each
251.11taxing district within each unique taxing jurisdiction for taxes payable in the prior year
251.12shall be multiplied by the ratio of (1) the jurisdiction's tax capacity using the class rates for
251.13taxes payable in the year for which aid is being computed, to (2) its tax capacity using
251.14the class rates for taxes payable in the year prior to that for which aid is being computed,
251.15both based upon taxable market values for taxes payable in the year prior to that for which
251.16aid is being computed. If the commissioner determines that insufficient information is
251.17available to reasonably and timely calculate the numerator in this ratio for the first taxes
251.18payable year that a class rate change or new class rate is effective, the commissioner shall
251.19omit the effects of that class rate change or new class rate when calculating this ratio for
251.20aid payable in that taxes payable year. For aid payable in the year following a year for
251.21which such omission was made, the commissioner shall use in the denominator for the
251.22class that was changed or created, the tax capacity for taxes payable two years prior to that
251.23in which the aid is payable, based on taxable market values for taxes payable in the year
251.24prior to that for which aid is being computed.

251.25    Sec. 31. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
251.26    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
251.27class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property
251.28is located in a border city that has an enterprise zone, as defined in section 469.166; (2)
251.29the property is located in a city with a population greater than 2,500 and less than 35,000
251.30according to the 1980 decennial census; (3) the city is adjacent to a city in another state or
251.31immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city
251.32in the other state has a population of greater than 5,000 and less than 75,000 according to
251.33the 1980 decennial census.
252.1    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
252.2property to 2.3 percent of the property's taxable market value and (ii) the tax on class 3a
252.3property to 2.3 percent of taxable market value.
252.4    (c) The county auditor shall annually certify the costs of the credits to the
252.5Department of Revenue. The department shall reimburse local governments for the
252.6property taxes forgone as the result of the credits in proportion to their total levies.

252.7    Sec. 32. Minnesota Statutes 2012, section 275.011, subdivision 1, is amended to read:
252.8    Subdivision 1. Determination of levy limit. The property tax levied for any
252.9purpose under a special law that is not codified in Minnesota Statutes or a city charter
252.10provision and that is subject to a mill rate limitation imposed by the special law or city
252.11charter provision, excluding levies subject to mill rate limitations that use adjusted
252.12assessed values determined by the commissioner of revenue under section 124.2131, must
252.13not exceed the following amount for the years specified:
252.14    (a) for taxes payable in 1988, the product of the applicable mill rate limitation
252.15imposed by special law or city charter provision multiplied by the total assessed valuation
252.16of all taxable property subject to the tax as adjusted by the provisions of Minnesota
252.17Statutes 1986, sections 272.64; 273.13, subdivision 7a; and 275.49;
252.18    (b) for taxes payable in 1989, the product of (1) the property tax levy limitation for
252.19the taxes payable year 1988 determined under clause (a) multiplied by (2) an index for
252.20market valuation changes equal to the assessment year 1988 total market valuation of all
252.21taxable property subject to the tax divided by the assessment year 1987 total market
252.22valuation of all taxable property subject to the tax; and
252.23    (c) for taxes payable in 1990 and subsequent years, the product of (1) the property
252.24tax levy limitation for the previous year determined pursuant to this subdivision multiplied
252.25by (2) an index for market valuation changes equal to the total market valuation of all
252.26taxable property subject to the tax for the current assessment year divided by the total
252.27market valuation of all taxable property subject to the tax for the previous assessment year.
252.28    For the purpose of determining the property tax levy limitation for the taxes payable
252.29year 1988 2014 and subsequent years under this subdivision, "total market valuation"
252.30means the total estimated market valuation value of all taxable property subject to the
252.31tax without valuation adjustments for fiscal disparities (chapters 276A and 473F), tax
252.32increment financing (sections 469.174 to 469.179), or powerline credit (section 273.425)
252.33 as provided under section 273.032.

252.34    Sec. 33. Minnesota Statutes 2012, section 275.077, subdivision 2, is amended to read:
253.1    Subd. 2. Correction of levy amount. The difference between the correct levy and
253.2the erroneous levy shall be added to the township levy for the subsequent levy year;
253.3provided that if the amount of the difference exceeds 0.12089 percent of taxable estimated
253.4 market value, the excess shall be added to the township levy for the second and later
253.5subsequent levy years, not to exceed an additional levy of 0.12089 percent of taxable
253.6 estimated market value in any year, until the full amount of the difference has been levied.
253.7The funds collected from the corrected levies shall be used to reimburse the county for the
253.8payment required by subdivision 1.

253.9    Sec. 34. Minnesota Statutes 2012, section 275.71, subdivision 4, is amended to read:
253.10    Subd. 4. Adjusted levy limit base. For taxes levied in 2008 through 2010, the
253.11adjusted levy limit base is equal to the levy limit base computed under subdivision 2
253.12or section 275.72, multiplied by:
253.13    (1) one plus the percentage growth in the implicit price deflator, but the percentage
253.14shall not be less than zero or exceed 3.9 percent;
253.15    (2) one plus a percentage equal to 50 percent of the percentage increase in the number
253.16of households, if any, for the most recent 12-month period for which data is available; and
253.17    (3) one plus a percentage equal to 50 percent of the percentage increase in the
253.18taxable estimated market value of the jurisdiction due to new construction of class 3
253.19property, as defined in section 273.13, subdivision 4, except for state-assessed utility and
253.20railroad property, for the most recent year for which data is available.

253.21    Sec. 35. Minnesota Statutes 2012, section 276.04, subdivision 2, is amended to read:
253.22    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the printing
253.23of the tax statements. The commissioner of revenue shall prescribe the form of the property
253.24tax statement and its contents. The tax statement must not state or imply that property tax
253.25credits are paid by the state of Minnesota. The statement must contain a tabulated statement
253.26of the dollar amount due to each taxing authority and the amount of the state tax from the
253.27parcel of real property for which a particular tax statement is prepared. The dollar amounts
253.28attributable to the county, the state tax, the voter approved school tax, the other local school
253.29tax, the township or municipality, and the total of the metropolitan special taxing districts
253.30as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated.
253.31The amounts due all other special taxing districts, if any, may be aggregated except that
253.32any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota,
253.33Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate
253.34line directly under the appropriate county's levy. If the county levy under this paragraph
254.1includes an amount for a lake improvement district as defined under sections 103B.501
254.2to 103B.581, the amount attributable for that purpose must be separately stated from the
254.3remaining county levy amount. In the case of Ramsey County, if the county levy under this
254.4paragraph includes an amount for public library service under section 134.07, the amount
254.5attributable for that purpose may be separated from the remaining county levy amount.
254.6The amount of the tax on homesteads qualifying under the senior citizens' property tax
254.7deferral program under chapter 290B is the total amount of property tax before subtraction
254.8of the deferred property tax amount. The amount of the tax on contamination value
254.9imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar
254.10amounts, including the dollar amount of any special assessments, may be rounded to the
254.11nearest even whole dollar. For purposes of this section whole odd-numbered dollars may
254.12be adjusted to the next higher even-numbered dollar. The amount of market value excluded
254.13under section 273.11, subdivision 16, if any, must also be listed on the tax statement.
254.14    (b) The property tax statements for manufactured homes and sectional structures
254.15taxed as personal property shall contain the same information that is required on the
254.16tax statements for real property.
254.17    (c) Real and personal property tax statements must contain the following information
254.18in the order given in this paragraph. The information must contain the current year tax
254.19information in the right column with the corresponding information for the previous year
254.20in a column on the left:
254.21    (1) the property's estimated market value under section 273.11, subdivision 1;
254.22    (2) the property's homestead market value exclusion under section 273.13,
254.23subdivision 35;
254.24    (3) the property's taxable market value after reductions under sections 273.11,
254.25subdivisions 1a and 16, and 273.13, subdivision 35 section 272.03, subdivision 15;
254.26    (4) the property's gross tax, before credits;
254.27    (5) for homestead agricultural properties, the credit under section 273.1384;
254.28    (6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
254.29273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
254.30credit received under section 273.135 must be separately stated and identified as "taconite
254.31tax relief"; and
254.32    (7) the net tax payable in the manner required in paragraph (a).
254.33    (d) If the county uses envelopes for mailing property tax statements and if the county
254.34agrees, a taxing district may include a notice with the property tax statement notifying
254.35taxpayers when the taxing district will begin its budget deliberations for the current
254.36year, and encouraging taxpayers to attend the hearings. If the county allows notices to
255.1be included in the envelope containing the property tax statement, and if more than
255.2one taxing district relative to a given property decides to include a notice with the tax
255.3statement, the county treasurer or auditor must coordinate the process and may combine
255.4the information on a single announcement.

255.5    Sec. 36. Minnesota Statutes 2012, section 276A.01, subdivision 10, is amended to read:
255.6    Subd. 10. Adjusted market value. "Adjusted market value" of real and personal
255.7property within a municipality means the assessor's estimated taxable market value,
255.8as defined in section 272.03, of all real and personal property, including the value of
255.9manufactured housing, within the municipality. For purposes of sections 276A.01 to
255.10276A.09, the commissioner of revenue shall annually make determinations and reports
255.11with respect to each municipality which are comparable to those it makes for school
255.12districts, adjusted for sales ratios in a manner similar to the adjustments made to city and
255.13town net tax capacities under section 127A.48, subdivisions 1 to 6, in the same manner
255.14and at the same times prescribed by the subdivision. The commissioner of revenue shall
255.15annually determine, for each municipality, information comparable to that required by
255.16section 475.53, subdivision 4, for school districts, as soon as practicable after it becomes
255.17available. The commissioner of revenue shall then compute the equalized market value of
255.18property within each municipality.
255.19EFFECTIVE DATE.This section is effective the day following final enactment.

255.20    Sec. 37. Minnesota Statutes 2012, section 276A.01, subdivision 12, is amended to read:
255.21    Subd. 12. Fiscal capacity. "Fiscal capacity" of a municipality means its valuation
255.22 adjusted market value, determined as of January 2 of any year, divided by its population,
255.23determined as of a date in the same year.

255.24    Sec. 38. Minnesota Statutes 2012, section 276A.01, subdivision 13, is amended to read:
255.25    Subd. 13. Average fiscal capacity. "Average fiscal capacity" of municipalities
255.26means the sum of the valuations adjusted market values of all municipalities, determined
255.27as of January 2 of any year, divided by the sum of their populations, determined as of
255.28a date in the same year.

255.29    Sec. 39. Minnesota Statutes 2012, section 276A.01, subdivision 15, is amended to read:
255.30    Subd. 15. Net tax capacity. "Net tax capacity" means the taxable market value of
255.31real and personal property multiplied by its net tax capacity rates in section 273.13.

256.1    Sec. 40. Minnesota Statutes 2012, section 276A.06, subdivision 10, is amended to read:
256.2    Subd. 10. Adjustment of values for other computations. For the purpose of
256.3computing the amount or rate of any salary, aid, tax, or debt authorized, required, or
256.4limited by any provision of any law or charter, where the authorization, requirement, or
256.5limitation is related to any value or valuation of taxable property within any governmental
256.6unit, the value or net tax capacity fiscal capacity under section 276A.01, subdivision 12, a
256.7municipality's taxable market value must be adjusted to reflect the adjustments reductions
256.8 to net tax capacity effected by subdivision 2, clause (a), provided that: (1) in determining
256.9the taxable market value of commercial-industrial property or any class thereof within
256.10a governmental unit for any purpose other than section 276A.05 municipality, (a) the
256.11reduction required by this subdivision is that amount which bears the same proportion to
256.12the amount subtracted from the governmental unit's municipality's net tax capacity pursuant
256.13to subdivision 2, clause (a), as the taxable market value of commercial-industrial property,
256.14or such class thereof, located within the governmental unit municipality bears to the net
256.15tax capacity of commercial-industrial property, or such class thereof, located within the
256.16governmental unit, and (b) the increase required by this subdivision is that amount which
256.17bears the same proportion to the amount added to the governmental unit's net tax capacity
256.18pursuant to subdivision 2, clause (b), as the market value of commercial-industrial property,
256.19or such class thereof, located within the governmental unit bears to the net tax capacity of
256.20commercial-industrial property, or such class thereof, located within the governmental unit;
256.21and (2) in determining the market value of real property within a municipality for purposes
256.22of section 276A.05, the adjustment prescribed by clause (1)(a) must be made and that
256.23prescribed by clause (1)(b) must not be made municipality. No adjustment shall be made
256.24to taxable market value for the increase in net tax capacity under subdivision 2, clause (b).

256.25    Sec. 41. Minnesota Statutes 2012, section 287.08, is amended to read:
256.26287.08 TAX, HOW PAYABLE; RECEIPTS.
256.27    (a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of
256.28any county in this state in which the real property or some part is located at or before
256.29the time of filing the mortgage for record. The treasurer shall endorse receipt on the
256.30mortgage and the receipt is conclusive proof that the tax has been paid in the amount
256.31stated and authorizes any county recorder or registrar of titles to record the mortgage. Its
256.32form, in substance, shall be "registration tax hereon of ..................... dollars paid." If the
256.33mortgage is exempt from taxation the endorsement shall, in substance, be "exempt from
256.34registration tax." In either case the receipt must be signed by the treasurer. In case the
256.35treasurer is unable to determine whether a claim of exemption should be allowed, the tax
257.1must be paid as in the case of a taxable mortgage. For documents submitted electronically,
257.2the endorsements and tax amount shall be affixed electronically and no signature by the
257.3treasurer will be required. The actual payment method must be arranged in advance
257.4between the submitter and the receiving county.
257.5    (b) The county treasurer may refund in whole or in part any mortgage registry tax
257.6overpayment if a written application by the taxpayer is submitted to the county treasurer
257.7within 3-1/2 years from the date of the overpayment. If the county has not issued a denial
257.8of the application, the taxpayer may bring an action in Tax Court in the county in which
257.9the tax was paid at any time after the expiration of six months from the time that the
257.10application was submitted. A denial of refund may be appealed within 60 days from
257.11the date of the denial by bringing an action in Tax Court in the county in which the tax
257.12was paid. The action is commenced by the serving of a petition for relief on the county
257.13treasurer, and by filing a copy with the court. The county attorney shall defend the action.
257.14The county treasurer shall notify the treasurer of each county that has or would receive a
257.15portion of the tax as paid.
257.16    (c) If the county treasurer determines a refund should be paid, or if a refund is
257.17ordered by the court, the county treasurer of each county that actually received a portion
257.18of the tax shall immediately pay a proportionate share of three percent of the refund
257.19using any available county funds. The county treasurer of each county that received, or
257.20would have received, a portion of the tax shall also pay their county's proportionate share
257.21of the remaining 97 percent of the court-ordered refund on or before the 20th day of the
257.22following month using solely the mortgage registry tax funds that would be paid to the
257.23commissioner of revenue on that date under section 287.12. If the funds on hand under
257.24this procedure are insufficient to fully fund 97 percent of the court-ordered refund, the
257.25county treasurer of the county in which the action was brought shall file a claim with the
257.26commissioner of revenue under section 16A.48 for the remaining portion of 97 percent of
257.27the refund, and shall pay over the remaining portion upon receipt of a warrant from the
257.28state issued pursuant to the claim.
257.29    (d) When any mortgage covers real property located in more than one county in this
257.30state the total tax must be paid to the treasurer of the county where the mortgage is first
257.31presented for recording, and the payment must be receipted as provided in paragraph
257.32(a). If the principal debt or obligation secured by such a multiple county mortgage
257.33exceeds $10,000,000, the nonstate portion of the tax must be divided and paid over by
257.34the county treasurer receiving it, on or before the 20th day of each month after receipt,
257.35to the county or counties entitled in the ratio that the estimated market value of the real
257.36property covered by the mortgage in each county bears to the estimated market value of
258.1all the real property in this state described in the mortgage. In making the division and
258.2payment the county treasurer shall send a statement giving the description of the real
258.3property described in the mortgage and the estimated market value of the part located in
258.4each county. For this purpose, the treasurer of any county may require the treasurer of
258.5any other county to certify to the former the estimated market valuation value of any tract
258.6of real property in any mortgage.
258.7    (e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The
258.8mortgagee may undertake to collect and remit the tax on behalf of the mortgagor. If the
258.9mortgagee collects money from the mortgagor to remit the tax on behalf of the mortgagor,
258.10the mortgagee has a fiduciary duty to remit the tax on behalf of the mortgagor as to the
258.11amount of the tax collected for that purpose and the mortgagor is relieved of any further
258.12obligation to pay the tax as to the amount collected by the mortgagee for this purpose.

258.13    Sec. 42. Minnesota Statutes 2012, section 287.23, subdivision 1, is amended to read:
258.14    Subdivision 1. Real property outside county. If any taxable deed or instrument
258.15describes any real property located in more than one county in this state, the total tax must
258.16be paid to the treasurer of the county where the document is first presented for recording,
258.17and the payment must be receipted as provided in section 287.08. If the net consideration
258.18exceeds $700,000, the nonstate portion of the tax must be divided and paid over by the
258.19county treasurer receiving it, on or before the 20th day of each month after receipt, to
258.20the county or counties entitled in the ratio which the estimated market value of the real
258.21property covered by the document in each county bears to the estimated market value of
258.22all the real property in this state described in the document. In making the division and
258.23payment the county treasurer shall send a statement to the other involved counties giving
258.24the description of the real property described in the document and the estimated market
258.25value of the part located in each county. The treasurer of any county may require the
258.26treasurer of any other county to certify to the former the estimated market valuation value
258.27 of any parcel of real property for this purpose.

258.28    Sec. 43. Minnesota Statutes 2012, section 353G.08, subdivision 2, is amended to read:
258.29    Subd. 2. Cash flow funding requirement. If the executive director determines that
258.30an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has
258.31insufficient assets to meet the service pensions determined payable from the account,
258.32the executive director shall certify the amount of the potential service pension shortfall
258.33to the municipality or municipalities and the municipality or municipalities shall make
258.34an additional employer contribution to the account within ten days of the certification.
259.1If more than one municipality is associated with the account, unless the municipalities
259.2agree to a different allocation, the municipalities shall allocate the additional employer
259.3contribution one-half in proportion to the population of each municipality and one-half in
259.4proportion to the estimated market value of the property of each municipality.

259.5    Sec. 44. Minnesota Statutes 2012, section 365.025, subdivision 4, is amended to read:
259.6    Subd. 4. Major purchases: notice, petition, election. Before buying anything
259.7under subdivision 2 that costs more than 0.24177 percent of the estimated market value of
259.8the town, the town must follow this subdivision.
259.9    The town must publish in its official newspaper the board's resolution to pay for the
259.10property over time. Then a petition for an election on the contract may be filed with the
259.11clerk. The petition must be filed within ten days after the resolution is published. To require
259.12the election the petition must be signed by a number of voters equal to ten percent of the
259.13voters at the last regular town election. The contract then must be approved by a majority of
259.14those voting on the question. The question may be voted on at a regular or special election.

259.15    Sec. 45. Minnesota Statutes 2012, section 366.095, subdivision 1, is amended to read:
259.16    Subdivision 1. Certificates of indebtedness. The town board may issue certificates
259.17of indebtedness within the debt limits for a town purpose otherwise authorized by law.
259.18The certificates shall be payable in not more than ten years and be issued on the terms and
259.19in the manner as the board may determine. If the amount of the certificates to be issued
259.20exceeds 0.25 percent of the estimated market value of the town, they shall not be issued
259.21for at least ten days after publication in a newspaper of general circulation in the town of
259.22the board's resolution determining to issue them. If within that time, a petition asking for
259.23an election on the proposition signed by voters equal to ten percent of the number of voters
259.24at the last regular town election is filed with the clerk, the certificates shall not be issued
259.25until their issuance has been approved by a majority of the votes cast on the question at
259.26a regular or special election. A tax levy shall be made to pay the principal and interest
259.27on the certificates as in the case of bonds.

259.28    Sec. 46. Minnesota Statutes 2012, section 366.27, is amended to read:
259.29366.27 FIREFIGHTERS' RELIEF; TAX LEVY.
259.30    The town board of any town in this state having therein a platted portion on
259.31which resides 1,200 or more people, and wherein a duly incorporated firefighters' relief
259.32association is located may each year levy a tax not to exceed 0.00806 percent of taxable
259.33 estimated market value for the benefit of the relief association.

260.1    Sec. 47. Minnesota Statutes 2012, section 368.01, subdivision 23, is amended to read:
260.2    Subd. 23. Financing purchase of certain equipment. The town board may issue
260.3certificates of indebtedness within debt limits to purchase fire or police equipment or
260.4ambulance equipment or street construction or maintenance equipment. The certificates
260.5shall be payable in not more than five years and be issued on terms and in the manner as the
260.6board may determine. If the amount of the certificates to be issued to finance a purchase
260.7exceeds 0.24177 percent of the estimated market value of the town, excluding money
260.8and credits, they shall not be issued for at least ten days after publication in the official
260.9newspaper of a town board resolution determining to issue them. If before the end of that
260.10time, a petition asking for an election on the proposition signed by voters equal to ten
260.11percent of the number of voters at the last regular town election is filed with the clerk, the
260.12certificates shall not be issued until the proposition of their issuance has been approved by a
260.13majority of the votes cast on the question at a regular or special election. A tax levy shall be
260.14made for the payment of the principal and interest on the certificates as in the case of bonds.

260.15    Sec. 48. Minnesota Statutes 2012, section 368.47, is amended to read:
260.16368.47 TOWNS MAY BE DISSOLVED.
260.17    (1) When the voters residing within a town have failed to elect any town officials for
260.18more than ten years continuously;
260.19    (2) when a town has failed for a period of ten years to exercise any of the powers
260.20and functions of a town;
260.21    (3) when the estimated market value of a town drops to less than $165,000;
260.22    (4) when the tax delinquency of a town, exclusive of taxes that are delinquent or
260.23unpaid because they are contested in proceedings for the enforcement of taxes, amounts to
260.2412 percent of its market value; or
260.25    (5) when the state or federal government has acquired title to 50 percent of the
260.26real estate of a town,
260.27which facts, or any of them, may be found and determined by the resolution of the county
260.28board of the county in which the town is located, according to the official records in the
260.29office of the county auditor, the county board by resolution may declare the town, naming
260.30it, dissolved and no longer entitled to exercise any of the powers or functions of a town.
260.31    In Cass, Itasca, and St. Louis Counties, before the dissolution is effective the voters
260.32of the town shall express their approval or disapproval. The town clerk shall, upon a
260.33petition signed by a majority of the registered voters of the town, filed with the clerk at
260.34least 60 days before a regular or special town election, give notice at the same time and
260.35in the same manner of the election that the question of dissolution of the town will be
261.1submitted for determination at the election. At the election the question shall be voted
261.2upon by a separate ballot, the terms of which shall be either "for dissolution" or "against
261.3dissolution." The ballot shall be deposited in a separate ballot box and the result of the
261.4voting canvassed, certified, and returned in the same manner and at the same time as
261.5other facts and returns of the election. If a majority of the votes cast at the election are
261.6for dissolution, the town shall be dissolved. If a majority of the votes cast at the election
261.7are against dissolution, the town shall not be dissolved.
261.8    When a town is dissolved under sections 368.47 to 368.49 the county shall acquire
261.9title to any telephone company or other business conducted by the town. The business
261.10shall be operated by the board of county commissioners until it can be sold. The
261.11subscribers or patrons of the business shall have the first opportunity of purchase. If the
261.12town has any outstanding indebtedness chargeable to the business, the county auditor shall
261.13levy a tax against the property situated in the dissolved town to pay the indebtedness
261.14as it becomes due.

261.15    Sec. 49. Minnesota Statutes 2012, section 370.01, is amended to read:
261.16370.01 CHANGE OF BOUNDARIES; CREATION OF NEW COUNTIES.
261.17    The boundaries of counties may be changed by taking territory from a county and
261.18attaching it to an adjoining county, and new counties may be established out of territory of
261.19one or more existing counties. A new county shall contain at least 400 square miles and
261.20have at least 4,000 inhabitants. A proposed new county must have a total taxable estimated
261.21 market value of at least 35 percent of (i) the total taxable estimated market value of the
261.22existing county, or (ii) the average total taxable estimated market value of the existing
261.23counties, included in the proposition. The determination of the taxable estimated market
261.24value of a county must be made by the commissioner of revenue. An existing county shall
261.25not be reduced in area below 400 square miles, have less than 4,000 inhabitants, or have a
261.26total taxable estimated market value of less than that required of a new county.
261.27    No change in the boundaries of any county having an area of more than 2,500 square
261.28miles, whether by the creation of a new county, or otherwise, shall detach from the existing
261.29county any territory within 12 miles of the county seat.

261.30    Sec. 50. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read:
261.31    Subdivision 1. Definitions. For purposes of this section, the following terms have
261.32the meanings given.
261.33    (a) "Bonds" means an obligation as defined under section 475.51.
262.1    (b) "Capital improvement" means acquisition or betterment of public lands,
262.2buildings, or other improvements within the county for the purpose of a county courthouse,
262.3administrative building, health or social service facility, correctional facility, jail, law
262.4enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads and
262.5bridges, and the acquisition of development rights in the form of conservation easements
262.6under chapter 84C. An improvement must have an expected useful life of five years or
262.7more to qualify. "Capital improvement" does not include a recreation or sports facility
262.8building (such as, but not limited to, a gymnasium, ice arena, racquet sports facility,
262.9swimming pool, exercise room or health spa), unless the building is part of an outdoor
262.10park facility and is incidental to the primary purpose of outdoor recreation.
262.11    (c) "Metropolitan county" means a county located in the seven-county metropolitan
262.12area as defined in section 473.121 or a county with a population of 90,000 or more.
262.13    (d) "Population" means the population established by the most recent of the
262.14following (determined as of the date the resolution authorizing the bonds was adopted):
262.15    (1) the federal decennial census,
262.16    (2) a special census conducted under contract by the United States Bureau of the
262.17Census, or
262.18    (3) a population estimate made either by the Metropolitan Council or by the state
262.19demographer under section 4A.02.
262.20    (e) "Qualified indoor ice arena" means a facility that meets the requirements of
262.21section 373.43.
262.22    (f) "Tax capacity" means total taxable market value, but does not include captured
262.23market value.

262.24    Sec. 51. Minnesota Statutes 2012, section 373.40, subdivision 4, is amended to read:
262.25    Subd. 4. Limitations on amount. A county may not issue bonds under this section
262.26if the maximum amount of principal and interest to become due in any year on all the
262.27outstanding bonds issued pursuant to this section (including the bonds to be issued) will
262.28equal or exceed 0.12 percent of taxable the estimated market value of property in the
262.29county. Calculation of the limit must be made using the taxable estimated market value for
262.30the taxes payable year in which the obligations are issued and sold. This section does not
262.31limit the authority to issue bonds under any other special or general law.

262.32    Sec. 52. Minnesota Statutes 2012, section 375.167, subdivision 1, is amended to read:
262.33    Subdivision 1. Appropriations. Notwithstanding any contrary law, a county board
262.34may appropriate from the general revenue fund to any nonprofit corporation a sum not
263.1to exceed 0.00604 percent of taxable estimated market value to provide legal assistance
263.2to persons who are unable to afford private legal counsel.

263.3    Sec. 53. Minnesota Statutes 2012, section 375.18, subdivision 3, is amended to read:
263.4    Subd. 3. Courthouse. Each county board may erect, furnish, and maintain a
263.5suitable courthouse. No indebtedness shall be created for a courthouse in excess of an
263.6amount equal to a levy of 0.04030 percent of taxable estimated market value without the
263.7approval of a majority of the voters of the county voting on the question of issuing the
263.8obligation at an election.

263.9    Sec. 54. Minnesota Statutes 2012, section 375.555, is amended to read:
263.10375.555 FUNDING.
263.11    To implement the county emergency jobs program, the county board may expend
263.12an amount equal to what would be generated by a levy of 0.01209 percent of taxable
263.13 estimated market value. The money to be expended may be from any available funds
263.14not otherwise earmarked.

263.15    Sec. 55. Minnesota Statutes 2012, section 383B.152, is amended to read:
263.16383B.152 BUILDING AND MAINTENANCE FUND.
263.17    The county board may by resolution levy a tax to provide money which shall be kept
263.18in a fund known as the county reserve building and maintenance fund. Money in the fund
263.19shall be used solely for the construction, maintenance, and equipping of county buildings
263.20that are constructed or maintained by the board. The levy shall not be subject to any limit
263.21fixed by any other law or by any board of tax levy or other corresponding body, but shall
263.22not exceed 0.02215 percent of taxable estimated market value, less the amount required by
263.23chapter 475 to be levied in the year for the payment of the principal of and interest on all
263.24bonds issued pursuant to Extra Session Laws 1967, chapter 47, section 1.

263.25    Sec. 56. Minnesota Statutes 2012, section 383B.245, is amended to read:
263.26383B.245 LIBRARY LEVY.
263.27    (a) The county board may levy a tax on the taxable property within the county to
263.28acquire, better, and construct county library buildings and branches and to pay principal
263.29and interest on bonds issued for that purpose.
263.30    (b) The county board may by resolution adopted by a five-sevenths vote issue and
263.31sell general obligation bonds of the county in the manner provided in sections 475.60 to
264.1475.73 . The bonds shall not be subject to the limitations of sections 475.51 to 475.59,
264.2but the maturity years and amounts and interest rates of each series of bonds shall be
264.3fixed so that the maximum amount of principal and interest to become due in any year,
264.4on the bonds of that series and of all outstanding series issued by or for the purposes of
264.5libraries, shall not exceed an amount equal to 0.01612 percent of estimated market value
264.6of all taxable property in the county as last finally equalized before the issuance of the new
264.7series. When the tax levy authorized in this section is collected it shall be appropriated
264.8and credited to a debt service fund for the bonds in amounts required each year in lieu of a
264.9countywide tax levy for the debt service fund under section 475.61.

264.10    Sec. 57. Minnesota Statutes 2012, section 383B.73, subdivision 1, is amended to read:
264.11    Subdivision 1. Levy. To provide funds for the purposes of the Three Rivers Park
264.12District as set forth in its annual budget, in lieu of the levies authorized by any other
264.13special law for such purposes, the Board of Park District Commissioners may levy taxes
264.14on all the taxable property in the county and park district at a rate not exceeding 0.03224
264.15percent of estimated market value. Notwithstanding section 398.16, on or before October
264.161 of each year, after public hearing, the Board of Park District Commissioners shall adopt
264.17a budget for the ensuing year and shall determine the total amount necessary to be raised
264.18from ad valorem tax levies to meet its budget. The Board of Park District Commissioners
264.19shall submit the budget to the county board. The county board may veto or modify an item
264.20contained in the budget. If the county board determines to veto or to modify an item in the
264.21budget, it must, within 15 days after the budget was submitted by the district board, state
264.22in writing the specific reasons for its objection to the item vetoed or the reason for the
264.23modification. The Park District Board, after consideration of the county board's objections
264.24and proposed modifications, may reapprove a vetoed item or the original version of an item
264.25with respect to which a modification has been proposed, by a two-thirds majority. If the
264.26district board does not reapprove a vetoed item, the item shall be deleted from the budget.
264.27If the district board does not reapprove the original version of a modified item, the item
264.28shall be included in the budget as modified by the county board. After adoption of the final
264.29budget and no later than October 1, the superintendent of the park district shall certify to the
264.30office of the Hennepin County director of tax and public records exercising the functions
264.31of the county auditor the total amount to be raised from ad valorem tax levies to meet its
264.32budget for the ensuing year. The director of tax and public records shall add the amount of
264.33any levy certified by the district to other tax levies on the property of the county within the
264.34district for collection by the director of tax and public records with other taxes. When
265.1collected, the director shall make settlement of such taxes with the district in the same
265.2manner as other taxes are distributed to the other political subdivisions in Hennepin County.

265.3    Sec. 58. Minnesota Statutes 2012, section 383E.20, is amended to read:
265.4383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS.
265.5    The Anoka County Board may, by resolution adopted by a four-sevenths vote, issue
265.6and sell general obligation bonds of the county in the manner provided in chapter 475 to
265.7acquire, better, and construct county library buildings. The bonds shall not be subject to the
265.8requirements of sections 475.57 to 475.59. The maturity years and amounts and interest
265.9rates of each series of bonds shall be fixed so that the maximum amount of principal and
265.10interest to become due in any year, on the bonds of that series and of all outstanding series
265.11issued by or for the purposes of libraries, shall not exceed an amount equal to .01 percent
265.12of the taxable estimated market value of all taxable property in the county, excluding any
265.13taxable property taxed by any city for the support of any free public library. When the tax
265.14levy authorized in this section is collected, it shall be appropriated and credited to a debt
265.15service fund for the bonds. The tax levy for the debt service fund under section 475.61
265.16shall be reduced by the amount available or reasonably anticipated to be available in the
265.17fund to make payments otherwise payable from the levy pursuant to section 475.61.

265.18    Sec. 59. Minnesota Statutes 2012, section 383E.23, is amended to read:
265.19383E.23 LIBRARY TAX.
265.20    The Anoka County Board may levy a tax of not more than .01 percent of the taxable
265.21 estimated market value of taxable property located within the county excluding any
265.22taxable property taxed by any city for the support of any free public library, to acquire,
265.23better, and construct county library buildings and to pay principal and interest on bonds
265.24issued for that purpose. The tax shall be disregarded in the calculation of levies or limits
265.25on levies provided by section 373.40, or other law.

265.26    Sec. 60. Minnesota Statutes 2012, section 385.31, is amended to read:
265.27385.31 PAYMENT OF COUNTY ORDERS OR WARRANTS.
265.28    When any order or warrant drawn on the treasurer is presented for payment, if there
265.29is money in the treasury for that purpose, the county treasurer shall redeem the same, and
265.30write across the entire face thereof the word "redeemed," the date of the redemption, and
265.31the treasurer's official signature. If there is not sufficient funds in the proper accounts to
265.32pay such orders they shall be numbered and registered in their order of presentation,
266.1and proper endorsement thereof shall be made on such orders and they shall be entitled
266.2to payment in like order. Such orders shall bear interest at not to exceed the rate of six
266.3percent per annum from such date of presentment. The treasurer, as soon as there is
266.4sufficient money in the treasury, shall appropriate and set apart a sum sufficient for the
266.5payment of the orders so presented and registered, and, if entitled to interest, issue to the
266.6original holder a notice that interest will cease in 30 days from the date of such notice; and,
266.7if orders thus entitled to priority of payment are not then presented, the next in order of
266.8registry may be paid until such orders are presented. No interest shall be paid on any order,
266.9except upon a warrant drawn by the county auditor for that purpose, giving the number
266.10and the date of the order on account of which the interest warrant is drawn. In any county
266.11in this state now or hereafter having a an estimated market value of all taxable property,
266.12exclusive of money and credits, of not less than $1,033,000,000, the county treasurer, in
266.13order to save payment of interest on county warrants drawn upon a fund in which there
266.14shall be temporarily insufficient money in the treasury to redeem the same, may borrow
266.15temporarily from any other fund in the county treasury in which there is a sufficient balance
266.16to care for the needs of such fund and allow a temporary loan or transfer to any other fund,
266.17and may pay such warrants out of such funds. Any such money so transferred and used in
266.18redeeming such county warrants shall be returned to the fund from which drawn as soon
266.19as money shall come in to the credit of such fund on which any such warrant was drawn
266.20and paid as aforesaid. Any county operating on a cash basis may use a combined form of
266.21warrant or order and check, which, when signed by the chair of the county board and by
266.22the auditor, is an order or warrant for the payment of the claim, and, when countersigned
266.23by the county treasurer, is a check for the payment of the amount thereof.

266.24    Sec. 61. Minnesota Statutes 2012, section 394.36, subdivision 1, is amended to read:
266.25    Subdivision 1. Continuation of nonconformity; limitations. Except as provided in
266.26subdivision 2, 3, or 4, any nonconformity, including the lawful use or occupation of land
266.27or premises existing at the time of the adoption of an official control under this chapter,
266.28may be continued, although the use or occupation does not conform to the official control.
266.29If the nonconformity or occupancy is discontinued for a period of more than one year, or
266.30any nonconforming building or structure is destroyed by fire or other peril to the extent of
266.3150 percent of its estimated market value, any subsequent use or occupancy of the land or
266.32premises shall be a conforming use or occupancy.

266.33    Sec. 62. Minnesota Statutes 2012, section 398A.04, subdivision 8, is amended to read:
267.1    Subd. 8. Taxation. Before deciding to exercise the power to tax, the authority shall
267.2give six weeks' published notice in all municipalities in the region. If a number of voters
267.3in the region equal to five percent of those who voted for candidates for governor at the
267.4last gubernatorial election present a petition within nine weeks of the first published notice
267.5to the secretary of state requesting that the matter be submitted to popular vote, it shall be
267.6submitted at the next general election. The question prepared shall be:
267.7    "Shall the regional rail authority have the power to impose a property tax?

267.8		Yes .....
267.9		No ..... "

267.10    If a majority of those voting on the question approve or if no petition is presented
267.11within the prescribed time the authority may levy a tax at any annual rate not exceeding
267.120.04835 percent of estimated market value of all taxable property situated within the
267.13municipality or municipalities named in its organization resolution. Its recording officer
267.14shall file, on or before September 15, in the office of the county auditor of each county
267.15in which territory under the jurisdiction of the authority is located a certified copy of the
267.16board of commissioners' resolution levying the tax, and each county auditor shall assess
267.17and extend upon the tax rolls of each municipality named in the organization resolution the
267.18portion of the tax that bears the same ratio to the whole amount that the net tax capacity of
267.19taxable property in that municipality bears to the net tax capacity of taxable property in
267.20all municipalities named in the organization resolution. Collections of the tax shall be
267.21remitted by each county treasurer to the treasurer of the authority. For taxes levied in 1991,
267.22the amount levied for light rail transit purposes under this subdivision shall not exceed 75
267.23percent of the amount levied in 1990 for light rail transit purposes under this subdivision.

267.24    Sec. 63. Minnesota Statutes 2012, section 401.05, subdivision 3, is amended to read:
267.25    Subd. 3. Leasing. (a) A county or joint powers board of a group of counties
267.26which acquires or constructs and equips or improves facilities under this chapter may,
267.27with the approval of the board of county commissioners of each county, enter into a
267.28lease agreement with a city situated within any of the counties, or a county housing and
267.29redevelopment authority established under chapter 469 or any special law. Under the lease
267.30agreement, the city or county housing and redevelopment authority shall:
267.31    (1) construct or acquire and equip or improve a facility in accordance with plans
267.32prepared by or at the request of a county or joint powers board of the group of counties
267.33and approved by the commissioner of corrections; and
267.34    (2) finance the facility by the issuance of revenue bonds.
268.1    (b) The county or joint powers board of a group of counties may lease the facility
268.2site, improvements, and equipment for a term upon rental sufficient to produce revenue
268.3for the prompt payment of the revenue bonds and all interest accruing on them. Upon
268.4completion of payment, the lessee shall acquire title. The real and personal property
268.5acquired for the facility constitutes a project and the lease agreement constitutes a revenue
268.6agreement as provided in sections 469.152 to 469.165. All proceedings by the city or
268.7county housing and redevelopment authority and the county or joint powers board shall be
268.8as provided in sections 469.152 to 469.165, with the following adjustments:
268.9    (1) no tax may be imposed upon the property;
268.10    (2) the approval of the project by the commissioner of employment and economic
268.11development is not required;
268.12    (3) the Department of Corrections shall be furnished and shall record information
268.13concerning each project as it may prescribe, in lieu of reports required on other projects to
268.14the commissioner of employment and economic development;
268.15    (4) the rentals required to be paid under the lease agreement shall not exceed in any
268.16year one-tenth of one percent of the estimated market value of property within the county
268.17or group of counties as last equalized before the execution of the lease agreement;
268.18    (5) the county or group of counties shall provide for payment of all rentals due
268.19during the term of the lease agreement in the manner required in subdivision 4;
268.20    (6) no mortgage on the facilities shall be granted for the security of the bonds, but
268.21compliance with clause (5) may be enforced as a nondiscretionary duty of the county
268.22or group of counties; and
268.23    (7) the county or the joint powers board of the group of counties may sublease any
268.24part of the facilities for purposes consistent with their maintenance and operation.

268.25    Sec. 64. Minnesota Statutes 2012, section 410.32, is amended to read:
268.26410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
268.27    (a) Notwithstanding any contrary provision of other law or charter, a home rule
268.28charter city may, by resolution and without public referendum, issue capital notes subject
268.29to the city debt limit to purchase capital equipment.
268.30    (b) For purposes of this section, "capital equipment" means:
268.31    (1) public safety equipment, ambulance and other medical equipment, road
268.32construction and maintenance equipment, and other capital equipment; and
268.33    (2) computer hardware and software, whether bundled with machinery or equipment
268.34or unbundled.
269.1    (c) The equipment or software must have an expected useful life at least as long
269.2as the term of the notes.
269.3    (d) The notes shall be payable in not more than ten years and be issued on terms
269.4and in the manner the city determines. The total principal amount of the capital notes
269.5issued in a fiscal year shall not exceed 0.03 percent of the estimated market value of
269.6taxable property in the city for that year.
269.7    (e) A tax levy shall be made for the payment of the principal and interest on the
269.8notes, in accordance with section 475.61, as in the case of bonds.
269.9    (f) Notes issued under this section shall require an affirmative vote of two-thirds of
269.10the governing body of the city.
269.11    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
269.12city may also issue capital notes subject to its debt limit in the manner and subject to the
269.13limitations applicable to statutory cities pursuant to section 412.301.

269.14    Sec. 65. Minnesota Statutes 2012, section 412.221, subdivision 2, is amended to read:
269.15    Subd. 2. Contracts. The council shall have power to make such contracts as may
269.16be deemed necessary or desirable to make effective any power possessed by the council.
269.17The city may purchase personal property through a conditional sales contract and real
269.18property through a contract for deed under which contracts the seller is confined to the
269.19remedy of recovery of the property in case of nonpayment of all or part of the purchase
269.20price, which shall be payable over a period of not to exceed five years. When the contract
269.21price of property to be purchased by contract for deed or conditional sales contract
269.22exceeds 0.24177 percent of the estimated market value of the city, the city may not enter
269.23into such a contract for at least ten days after publication in the official newspaper of a
269.24council resolution determining to purchase property by such a contract; and, if before the
269.25end of that time a petition asking for an election on the proposition signed by voters equal
269.26to ten percent of the number of voters at the last regular city election is filed with the clerk,
269.27the city may not enter into such a contract until the proposition has been approved by a
269.28majority of the votes cast on the question at a regular or special election.

269.29    Sec. 66. Minnesota Statutes 2012, section 412.301, is amended to read:
269.30412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
269.31    (a) The council may issue certificates of indebtedness or capital notes subject to the
269.32city debt limits to purchase capital equipment.
269.33    (b) For purposes of this section, "capital equipment" means:
270.1    (1) public safety equipment, ambulance and other medical equipment, road
270.2construction and maintenance equipment, and other capital equipment; and
270.3    (2) computer hardware and software, whether bundled with machinery or equipment
270.4or unbundled.
270.5    (c) The equipment or software must have an expected useful life at least as long as
270.6the terms of the certificates or notes.
270.7    (d) Such certificates or notes shall be payable in not more than ten years and shall be
270.8issued on such terms and in such manner as the council may determine.
270.9    (e) If the amount of the certificates or notes to be issued to finance any such purchase
270.10exceeds 0.25 percent of the estimated market value of taxable property in the city, they
270.11shall not be issued for at least ten days after publication in the official newspaper of
270.12a council resolution determining to issue them; and if before the end of that time, a
270.13petition asking for an election on the proposition signed by voters equal to ten percent
270.14of the number of voters at the last regular municipal election is filed with the clerk, such
270.15certificates or notes shall not be issued until the proposition of their issuance has been
270.16approved by a majority of the votes cast on the question at a regular or special election.
270.17    (f) A tax levy shall be made for the payment of the principal and interest on such
270.18certificates or notes, in accordance with section 475.61, as in the case of bonds.

270.19    Sec. 67. Minnesota Statutes 2012, section 428A.02, subdivision 1, is amended to read:
270.20    Subdivision 1. Ordinance. The governing body of a city may adopt an ordinance
270.21establishing a special service district. Only property that is classified under section 273.13
270.22and used for commercial, industrial, or public utility purposes, or is vacant land zoned or
270.23designated on a land use plan for commercial or industrial use and located in the special
270.24service district, may be subject to the charges imposed by the city on the special service
270.25district. Other types of property may be included within the boundaries of the special
270.26service district but are not subject to the levies or charges imposed by the city on the
270.27special service district. If 50 percent or more of the estimated market value of a parcel of
270.28property is classified under section 273.13 as commercial, industrial, or vacant land zoned
270.29or designated on a land use plan for commercial or industrial use, or public utility for the
270.30current assessment year, then the entire taxable market value of the property is subject to a
270.31service charge based on net tax capacity for purposes of sections 428A.01 to 428A.10.
270.32The ordinance shall describe with particularity the area within the city to be included in
270.33the district and the special services to be furnished in the district. The ordinance may not
270.34be adopted until after a public hearing has been held on the question. Notice of the hearing
270.35shall include the time and place of hearing, a map showing the boundaries of the proposed
271.1district, and a statement that all persons owning property in the proposed district that
271.2would be subject to a service charge will be given opportunity to be heard at the hearing.
271.3Within 30 days after adoption of the ordinance under this subdivision, the governing body
271.4shall send a copy of the ordinance to the commissioner of revenue.

271.5    Sec. 68. Minnesota Statutes 2012, section 430.102, subdivision 2, is amended to read:
271.6    Subd. 2. Council approval; special tax levy limitation. The council shall receive
271.7and consider the estimate required in subdivision 1 and the items of cost after notice and
271.8hearing before it or its appropriate committee as it considers necessary or expedient, and
271.9shall approve the estimate, with necessary amendments. The amounts of each item of cost
271.10estimated are then appropriated to operate, maintain, and improve the pedestrian mall
271.11during the next fiscal year. The amount of the special tax to be charged under subdivision
271.121, clause (3), must not, however, exceed 0.12089 percent of estimated market value of
271.13taxable property in the district. The council shall make any necessary adjustment in costs of
271.14operating and maintaining the district to keep the amount of the tax within this limitation.

271.15    Sec. 69. Minnesota Statutes 2012, section 447.10, is amended to read:
271.16447.10 TAX LEVY FOR OPERATING AND MAINTAINING HOSPITAL.
271.17    The governing body of a city of the first class owning a hospital may annually levy
271.18a tax to operate and maintain the hospital. The tax must not exceed 0.00806 percent of
271.19taxable estimated market value.

271.20    Sec. 70. Minnesota Statutes 2012, section 450.19, is amended to read:
271.21450.19 TOURIST CAMPING GROUNDS.
271.22    A home rule charter or statutory city or town may establish and maintain public
271.23tourist camping grounds. The governing body thereof may acquire by lease, purchase, or
271.24gift, suitable lands located either within or without the corporate limits for use as public
271.25tourist camping grounds and provide for the equipment, operation, and maintenance
271.26of the same. The amount that may be expended for the maintenance, improvement, or
271.27operation of tourist camping grounds shall not exceed, in any year, a sum equal to 0.00806
271.28percent of taxable estimated market value.

271.29    Sec. 71. Minnesota Statutes 2012, section 450.25, is amended to read:
271.30450.25 MUSEUM, GALLERY, OR SCHOOL OF ARTS OR CRAFTS; TAX
271.31LEVY.
272.1    After the acquisition of any museum, gallery, or school of arts or crafts, the board
272.2of park commissioners of the city in which it is located shall cause to be included in the
272.3annual tax levy upon all the taxable property of the county in which the museum, gallery,
272.4or school of arts or crafts is located, a tax of 0.00846 percent of estimated market value.
272.5The board shall certify the levy to the county auditor and it shall be added to, and collected
272.6with and as part of, the general, real, and personal property taxes, with like penalties and
272.7interest, in case of nonpayment and default, and all provisions of law in respect to the
272.8levy, collection, and enforcement of other taxes shall, so far as applicable, be followed in
272.9respect of these taxes. All of these taxes, penalties, and interest, when collected, shall be
272.10paid to the city treasurer of the city in which is located the museum, gallery, or school
272.11of arts or crafts and credited to a fund to be known as the park museum fund, and shall
272.12be used only for the purposes specified in sections 450.23 to 450.25. Any part of the
272.13proceeds of the levy not expended for the purposes specified in section 450.24 may be
272.14used for the erection of new buildings for the same purposes.

272.15    Sec. 72. Minnesota Statutes 2012, section 458A.10, is amended to read:
272.16458A.10 PROPERTY TAX.
272.17    The commission shall annually levy a tax not to exceed 0.12089 percent of estimated
272.18market value on all the taxable property in the transit area at a rate sufficient to produce
272.19an amount necessary for the purposes of sections 458A.01 to 458A.15, other than the
272.20payment of principal and interest due on any revenue bonds issued pursuant to section
272.21458A.05 . Property taxes levied under this section shall be certified by the commission to
272.22the county auditors of the transit area, extended, assessed, and collected in the manner
272.23provided by law for the property taxes levied by the governing bodies of cities. The
272.24proceeds of the taxes levied under this section shall be remitted by the respective county
272.25treasurers to the treasurer of the commission, who shall credit the same to the funds of
272.26the commission for use for the purposes of sections 458A.01 to 458A.15 subject to any
272.27applicable pledges or limitations on account of tax anticipation certificates or other
272.28specific purposes. At any time after making a tax levy under this section and certifying
272.29it to the county auditors, the commission may issue general obligation certificates of
272.30indebtedness in anticipation of the collection of the taxes as provided by section 412.261.

272.31    Sec. 73. Minnesota Statutes 2012, section 458A.31, subdivision 1, is amended to read:
272.32    Subdivision 1. Levy limit. Notwithstanding anything to the contrary contained in
272.33the charter of the city of Duluth, any ordinance thereof, or any statute applicable thereto,
272.34limiting the amount levied in any one year for general or special purposes, the city council
273.1of the city of Duluth shall each year levy a tax in an amount not to exceed 0.07253
273.2percent of taxable estimated market value, by ordinance. An ordinance fixing the levy
273.3shall take effect immediately upon its passage and approval. The proceeds of the levy
273.4shall be paid into the city treasury and deposited in the operating fund provided for in
273.5section 458A.24, subdivision 3.

273.6    Sec. 74. Minnesota Statutes 2012, section 465.04, is amended to read:
273.7465.04 ACCEPTANCE OF GIFTS.
273.8    Cities of the second, third, or fourth class, having at any time a an estimated
273.9 market value of not more than $41,000,000, exclusive of money and credits, as officially
273.10equalized by the commissioner of revenue, either under home rule charter or under the
273.11laws of this state, in addition to all other powers possessed by them, hereby are authorized
273.12and empowered to receive and accept gifts and donations for the use and benefit of
273.13such cities and the inhabitants thereof upon terms and conditions to be approved by the
273.14governing bodies of such cities; and such cities are authorized to comply with and perform
273.15such terms and conditions, which may include payment to the donor or donors of interest
273.16on the value of the gift at not exceeding five percent per annum payable annually or
273.17semiannually, during the remainder of the natural life or lives of such donor or donors.

273.18    Sec. 75. Minnesota Statutes 2012, section 469.033, subdivision 6, is amended to read:
273.19    Subd. 6. Operation area as taxing district, special tax. All of the territory included
273.20within the area of operation of any authority shall constitute a taxing district for the
273.21purpose of levying and collecting special benefit taxes as provided in this subdivision. All
273.22of the taxable property, both real and personal, within that taxing district shall be deemed
273.23to be benefited by projects to the extent of the special taxes levied under this subdivision.
273.24Subject to the consent by resolution of the governing body of the city in and for which
273.25it was created, an authority may levy a tax upon all taxable property within that taxing
273.26district. The tax shall be extended, spread, and included with and as a part of the general
273.27taxes for state, county, and municipal purposes by the county auditor, to be collected and
273.28enforced therewith, together with the penalty, interest, and costs. As the tax, including any
273.29penalties, interest, and costs, is collected by the county treasurer it shall be accumulated
273.30and kept in a separate fund to be known as the "housing and redevelopment project fund."
273.31The money in the fund shall be turned over to the authority at the same time and in the same
273.32manner that the tax collections for the city are turned over to the city, and shall be expended
273.33only for the purposes of sections 469.001 to 469.047. It shall be paid out upon vouchers
273.34signed by the chair of the authority or an authorized representative. The amount of the
274.1levy shall be an amount approved by the governing body of the city, but shall not exceed
274.20.0185 percent of taxable estimated market value. The authority shall each year formulate
274.3and file a budget in accordance with the budget procedure of the city in the same manner as
274.4required of executive departments of the city or, if no budgets are required to be filed, by
274.5August 1. The amount of the tax levy for the following year shall be based on that budget.

274.6    Sec. 76. Minnesota Statutes 2012, section 469.034, subdivision 2, is amended to read:
274.7    Subd. 2. General obligation revenue bonds. (a) An authority may pledge the
274.8general obligation of the general jurisdiction governmental unit as additional security for
274.9bonds payable from income or revenues of the project or the authority. The authority
274.10must find that the pledged revenues will equal or exceed 110 percent of the principal and
274.11interest due on the bonds for each year. The proceeds of the bonds must be used for a
274.12qualified housing development project or projects. The obligations must be issued and
274.13sold in the manner and following the procedures provided by chapter 475, except the
274.14obligations are not subject to approval by the electors, and the maturities may extend to
274.15not more than 35 years for obligations sold to finance housing for the elderly and 40 years
274.16for other obligations issued under this subdivision. The authority is the municipality for
274.17purposes of chapter 475.
274.18    (b) The principal amount of the issue must be approved by the governing body of
274.19the general jurisdiction governmental unit whose general obligation is pledged. Public
274.20hearings must be held on issuance of the obligations by both the authority and the general
274.21jurisdiction governmental unit. The hearings must be held at least 15 days, but not more
274.22than 120 days, before the sale of the obligations.
274.23    (c) The maximum amount of general obligation bonds that may be issued and
274.24outstanding under this section equals the greater of (1) one-half of one percent of the
274.25taxable estimated market value of the general jurisdiction governmental unit whose
274.26general obligation is pledged, or (2) $3,000,000. In the case of county or multicounty
274.27general obligation bonds, the outstanding general obligation bonds of all cities in the
274.28county or counties issued under this subdivision must be added in calculating the limit
274.29under clause (1).
274.30    (d) "General jurisdiction governmental unit" means the city in which the housing
274.31development project is located. In the case of a county or multicounty authority, the
274.32county or counties may act as the general jurisdiction governmental unit. In the case of
274.33a multicounty authority, the pledge of the general obligation is a pledge of a tax on the
274.34taxable property in each of the counties.
275.1    (e) "Qualified housing development project" means a housing development project
275.2providing housing either for the elderly or for individuals and families with incomes not
275.3greater than 80 percent of the median family income as estimated by the United States
275.4Department of Housing and Urban Development for the standard metropolitan statistical
275.5area or the nonmetropolitan county in which the project is located. The project must be
275.6owned for the term of the bonds either by the authority or by a limited partnership or other
275.7entity in which the authority or another entity under the sole control of the authority is
275.8the sole general partner and the partnership or other entity must receive (1) an allocation
275.9from the Department of Management and Budget or an entitlement issuer of tax-exempt
275.10bonding authority for the project and a preliminary determination by the Minnesota
275.11Housing Finance Agency or the applicable suballocator of tax credits that the project
275.12will qualify for four percent low-income housing tax credits or (2) a reservation of nine
275.13percent low-income housing tax credits from the Minnesota Housing Finance Agency or a
275.14suballocator of tax credits for the project. A qualified housing development project may
275.15admit nonelderly individuals and families with higher incomes if:
275.16    (1) three years have passed since initial occupancy;
275.17    (2) the authority finds the project is experiencing unanticipated vacancies resulting in
275.18insufficient revenues, because of changes in population or other unforeseen circumstances
275.19that occurred after the initial finding of adequate revenues; and
275.20    (3) the authority finds a tax levy or payment from general assets of the general
275.21jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher
275.22income individuals or families are not admitted.
275.23    (f) The authority may issue bonds to refund bonds issued under this subdivision in
275.24accordance with section 475.67. The finding of the adequacy of pledged revenues required
275.25by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the
275.26issuance of refunding bonds. This paragraph applies to refunding bonds issued on and
275.27after July 1, 1992.

275.28    Sec. 77. Minnesota Statutes 2012, section 469.053, subdivision 4, is amended to read:
275.29    Subd. 4. Mandatory city levy. A city shall, at the request of the port authority, levy
275.30a tax in any year for the benefit of the port authority. The tax must not exceed 0.01813
275.31percent of taxable estimated market value. The amount levied must be paid by the city
275.32treasurer to the treasurer of the port authority, to be spent by the authority.

275.33    Sec. 78. Minnesota Statutes 2012, section 469.053, subdivision 4a, is amended to read:
276.1    Subd. 4a. Seaway port authority levy. A levy made under this subdivision shall
276.2replace the mandatory city levy under subdivision 4. A seaway port authority is a special
276.3taxing district under section 275.066 and may levy a tax in any year for the benefit of the
276.4seaway port authority. The tax must not exceed 0.01813 percent of taxable estimated
276.5 market value. The county auditor shall distribute the proceeds of the property tax levy to
276.6the seaway port authority.

276.7    Sec. 79. Minnesota Statutes 2012, section 469.053, subdivision 6, is amended to read:
276.8    Subd. 6. Discretionary city levy. Upon request of a port authority, the port
276.9authority's city may levy a tax to be spent by and for its port authority. The tax must
276.10enable the port authority to carry out efficiently and in the public interest sections 469.048
276.11to 469.068 to create and develop industrial development districts. The levy must not be
276.12more than 0.00282 percent of taxable estimated market value. The county treasurer shall
276.13pay the proceeds of the tax to the port authority treasurer. The money may be spent by
276.14the authority in performance of its duties to create and develop industrial development
276.15districts. In spending the money the authority must judge what best serves the public
276.16interest. The levy in this subdivision is in addition to the levy in subdivision 4.

276.17    Sec. 80. Minnesota Statutes 2012, section 469.107, subdivision 1, is amended to read:
276.18    Subdivision 1. City tax levy. A city may, at the request of the authority, levy a tax in
276.19any year for the benefit of the authority. The tax must be not more than 0.01813 percent of
276.20taxable estimated market value. The amount levied must be paid by the city treasurer to
276.21the treasurer of the authority, to be spent by the authority.

276.22    Sec. 81. Minnesota Statutes 2012, section 469.180, subdivision 2, is amended to read:
276.23    Subd. 2. Tax levies. Notwithstanding any law, the county board of any county may
276.24appropriate from the general revenue fund a sum not to exceed a county levy of 0.00080
276.25percent of taxable estimated market value to carry out the purposes of this section.

276.26    Sec. 82. Minnesota Statutes 2012, section 469.187, is amended to read:
276.27469.187 FIRST CLASS CITY SPENDING FOR PUBLICITY; PUBLICITY
276.28BOARD.
276.29    Any city of the first class may expend money for city publicity purposes. The city may
276.30levy a tax, not exceeding 0.00080 percent of taxable estimated market value. The proceeds
276.31of the levy shall be expended in the manner and for the city publicity purposes the council
277.1directs. The council may establish and provide for a publicity board or bureau to administer
277.2the fund, subject to the conditions and limitations the council prescribes by ordinance.

277.3    Sec. 83. Minnesota Statutes 2012, section 469.206, is amended to read:
277.4469.206 HAZARDOUS PROPERTY PENALTY.
277.5    A city may assess a penalty up to one percent of the estimated market value of
277.6real property, including any building located within the city that the city determines to
277.7be hazardous as defined in section 463.15, subdivision 3. The city shall send a written
277.8notice to the address to which the property tax statement is sent at least 90 days before it
277.9may assess the penalty. If the owner of the property has not paid the penalty or fixed the
277.10property within 90 days after receiving notice of the penalty, the penalty is considered
277.11delinquent and is increased by 25 percent each 60 days the penalty is not paid and the
277.12property remains hazardous. For the purposes of this section, a penalty that is delinquent
277.13is considered a delinquent property tax and subject to chapters 279, 280, and 281, in the
277.14same manner as delinquent property taxes.

277.15    Sec. 84. Minnesota Statutes 2012, section 471.24, is amended to read:
277.16471.24 TOWNS, STATUTORY CITIES; JOINT MAINTENANCE OF
277.17CEMETERY.
277.18    Where a statutory city or town owns and maintains an established cemetery or burial
277.19ground, either within or without the municipal limits, the statutory city or town may, by
277.20mutual agreement with contiguous statutory cities and towns, each having a an estimated
277.21 market value of not less than $2,000,000, join together in the maintenance of such public
277.22cemetery or burial ground for the use of the inhabitants of each of such municipalities; and
277.23each such municipality is hereby authorized, by action of its council or governing body,
277.24to levy a tax or make an appropriation for the annual support and maintenance of such
277.25cemetery or burial ground; provided, the amount thus appropriated by each municipality
277.26shall not exceed a total of $10,000 in any one year.

277.27    Sec. 85. Minnesota Statutes 2012, section 471.571, subdivision 1, is amended to read:
277.28    Subdivision 1. Application. This section applies to each city in which the net tax
277.29capacity of real and personal property consists in part of iron ore or lands containing
277.30taconite or semitaconite and in which the total taxable estimated market value of real
277.31and personal property exceeds $2,500,000.

277.32    Sec. 86. Minnesota Statutes 2012, section 471.571, subdivision 2, is amended to read:
278.1    Subd. 2. Creation of fund, tax levy. The governing body of the city may create a
278.2permanent improvement and replacement fund to be maintained by an annual tax levy.
278.3The governing body may levy a tax in excess of any charter limitation for the support of
278.4the permanent improvement and replacement fund, but not exceeding the following:
278.5    (a) in cities having a population of not more than 500 inhabitants, the lesser of $20
278.6per capita or 0.08059 percent of taxable estimated market value;
278.7    (b) in cities having a population of more than 500 and less than 2500 2,500, the
278.8greater of $12.50 per capita or $10,000 but not exceeding 0.08059 percent of taxable
278.9 estimated market value;
278.10    (c) in cities having a population of more than 2500 2,500 or more inhabitants,
278.11the greater of $10 per capita or $31,500 but not exceeding 0.08059 percent of taxable
278.12 estimated market value.

278.13    Sec. 87. Minnesota Statutes 2012, section 471.73, is amended to read:
278.14471.73 ACCEPTANCE OF PROVISIONS.
278.15    In the case of any city within the class specified in section 471.72 having a an
278.16estimated market value, as defined in section 471.72, in excess of $37,000,000; and in the
278.17case of any statutory city within such class having a an estimated market value, as defined
278.18in section 471.72, of less than $5,000,000; and in the case of any statutory city within such
278.19class which is governed by Laws 1933, chapter 211, or Laws 1937, chapter 356; and in
278.20the case of any statutory city within such class which is governed by Laws 1929, chapter
278.21208, and has a an estimated market value of less than $83,000,000; and in the case of
278.22any school district within such class having a an estimated market value, as defined in
278.23section 471.72, of more than $54,000,000; and in the case of all towns within said class;
278.24sections 471.71 to 471.83 apply only if the governing body of the city or statutory city, the
278.25board of the school district, or the town board of the town shall have adopted a resolution
278.26determining to issue bonds under the provisions of sections 471.71 to 471.83 or to go
278.27upon a cash basis in accordance with the provisions thereof.

278.28    Sec. 88. Minnesota Statutes 2012, section 473.325, subdivision 2, is amended to read:
278.29    Subd. 2. Chapter 475 applies; exceptions. The Metropolitan Council shall sell and
278.30issue the bonds in the manner provided in chapter 475, and shall have the same powers
278.31and duties as a municipality issuing bonds under that law, except that the approval of a
278.32majority of the electors shall not be required and the net debt limitations shall not apply.
278.33The terms of each series of bonds shall be fixed so that the amount of principal and interest
278.34on all outstanding and undischarged bonds, together with the bonds proposed to be issued,
279.1due in any year shall not exceed 0.01209 percent of estimated market value of all taxable
279.2property in the metropolitan area as last finally equalized prior to a proposed issue. The
279.3bonds shall be secured in accordance with section 475.61, subdivision 1, and any taxes
279.4required for their payment shall be levied by the council, shall not affect the amount or rate
279.5of taxes which may be levied by the council for other purposes, shall be spread against all
279.6taxable property in the metropolitan area and shall not be subject to limitation as to rate or
279.7amount. Any taxes certified by the council to the county auditors for collection shall be
279.8reduced by the amount received by the council from the commissioner of management and
279.9budget or the federal government for the purpose of paying the principal and interest on
279.10bonds to which the levy relates. The council shall certify the fact and amount of all money
279.11so received to the county auditors, and the auditors shall reduce the levies previously made
279.12for the bonds in the manner and to the extent provided in section 475.61, subdivision 3.

279.13    Sec. 89. Minnesota Statutes 2012, section 473.629, is amended to read:
279.14473.629 VALUE OF PROPERTY FOR BOND ISSUES BY SCHOOL
279.15DISTRICTS.
279.16    As to any lands to be detached from any school district under the provisions hereof
279.17 section 473.625, notwithstanding such prospective the detachment, the estimated market
279.18value of such the detached lands and the net tax capacity of taxable properties now located
279.19therein or thereon shall be and on the lands on the date of the detachment constitute
279.20from and after the date of the enactment hereof a part of the estimated market value of
279.21properties upon the basis of which such used to calculate the net debt limit of the school
279.22district may issue its bonds,. The value of such the lands for such purpose to be and other
279.23taxable properties for purposes of the school district's net debt limit are 33-1/3 percent of
279.24the estimated market value thereof as determined and certified by said the assessor to said
279.25 the school district, and it shall be the duty of such the assessor annually on or before the
279.26tenth day of October from and after the passage hereof, to so of each year, shall determine
279.27and certify that value; provided, however, that the value of such the detached lands and
279.28such taxable properties shall never exceed 20 percent of the estimated market value of
279.29all properties constituting and making up the basis aforesaid used to calculate the net
279.30debt limit of the school district.

279.31    Sec. 90. Minnesota Statutes 2012, section 473.661, subdivision 3, is amended to read:
279.32    Subd. 3. Levy limit. In any budget certified by the commissioners under this section,
279.33the amount included for operation and maintenance shall not exceed an amount which,
279.34when extended against the property taxable therefor under section 473.621, subdivision 5,
280.1will require a levy at a rate of 0.00806 percent of estimated market value. Taxes levied by
280.2the corporation shall not affect the amount or rate of taxes which may be levied by any other
280.3local government unit within the metropolitan area under the provisions of any charter.

280.4    Sec. 91. Minnesota Statutes 2012, section 473.667, subdivision 9, is amended to read:
280.5    Subd. 9. Additional taxes. Nothing herein shall prevent the commission from
280.6levying a tax not to exceed 0.00121 percent of estimated market value on taxable property
280.7within its taxing jurisdiction, in addition to any levies found necessary for the debt
280.8service fund authorized by section 473.671. Nothing herein shall prevent the levy and
280.9appropriation for purposes of the commission of any other tax on property or on any
280.10income, transaction, or privilege, when and if authorized by law. All collections of any
280.11taxes so levied shall be included in the revenues appropriated for the purposes referred
280.12to in this section, unless otherwise provided in the law authorizing the levies; but no
280.13covenant as to the continuance or as to the rate and amount of any such levy shall be made
280.14with the holders of the commission's bonds unless specifically authorized by law.

280.15    Sec. 92. Minnesota Statutes 2012, section 473.671, is amended to read:
280.16473.671 LIMIT OF TAX LEVY.
280.17    The taxes levied against the property of the metropolitan area in any one year shall
280.18not exceed 0.00806 percent of taxable estimated market value, exclusive of taxes levied
280.19to pay the principal or interest on any bonds or indebtedness of the city issued under
280.20Laws 1943, chapter 500, and exclusive of any taxes levied to pay the share of the city for
280.21payments on bonded indebtedness of the corporation provided for in Laws 1943, chapter
280.22500. The levy of taxes authorized in Laws 1943, chapter 500, shall be in addition to the
280.23maximum rate allowed to be levied to defray the cost of government under the provisions
280.24of the charter of any city affected by Laws 1943, chapter 500.

280.25    Sec. 93. Minnesota Statutes 2012, section 473.711, subdivision 2a, is amended to read:
280.26    Subd. 2a. Tax levy. (a) The commission may levy a tax on all taxable property in the
280.27district as defined in section 473.702 to provide funds for the purposes of sections 473.701
280.28to 473.716. The tax shall not exceed the property tax levy limitation determined in this
280.29subdivision. A participating county may agree to levy an additional tax to be used by the
280.30commission for the purposes of sections 473.701 to 473.716 but the sum of the county's and
280.31commission's taxes may not exceed the county's proportionate share of the property tax levy
280.32limitation determined under this subdivision based on the ratio of its total net tax capacity
280.33to the total net tax capacity of the entire district as adjusted by section 270.12, subdivision
281.13 . The auditor of each county in the district shall add the amount of the levy made by the
281.2district to other taxes of the county for collection by the county treasurer with other taxes.
281.3When collected, the county treasurer shall make settlement of the tax with the district in
281.4the same manner as other taxes are distributed to political subdivisions. No county shall
281.5levy any tax for mosquito, disease vectoring tick, and black gnat (Simuliidae) control
281.6except under this section. The levy shall be in addition to other taxes authorized by law.
281.7    (b) The property tax levied by the Metropolitan Mosquito Control Commission shall
281.8not exceed the product of (i) the commission's property tax levy limitation for the previous
281.9year determined under this subdivision multiplied by (ii) an index for market valuation
281.10changes equal to the total estimated market valuation value of all taxable property for the
281.11current tax payable year located within the district plus any area that has been added to the
281.12district since the previous year, divided by the total estimated market valuation value of all
281.13taxable property located within the district for the previous taxes payable year.
281.14    (c) For the purpose of determining the commission's property tax levy limitation
281.15under this subdivision, "total market valuation" means the total market valuation of all
281.16taxable property within the district without valuation adjustments for fiscal disparities
281.17(chapter 473F), tax increment financing (sections 469.174 to 469.179), and high voltage
281.18transmission lines (section 273.425).

281.19    Sec. 94. Minnesota Statutes 2012, section 473F.02, subdivision 12, is amended to read:
281.20    Subd. 12. Adjusted market value. "Adjusted market value" of real and personal
281.21property within a municipality means the assessor's estimated taxable market value,
281.22as defined in section 272.03, of all real and personal property, including the value of
281.23manufactured housing, within the municipality, adjusted for sales ratios in a manner
281.24similar to the adjustments made to city and town net tax capacities. For purposes
281.25of sections 473F.01 to 473F.13, the commissioner of revenue shall annually make
281.26determinations and reports with respect to each municipality which are comparable to
281.27those it makes for school districts under section 127A.48, subdivisions 1 to 6, in the same
281.28manner and at the same times as are prescribed by the subdivisions. The commissioner
281.29of revenue shall annually determine, for each municipality, information comparable to
281.30that required by section 475.53, subdivision 4, for school districts, as soon as practicable
281.31after it becomes available. The commissioner of revenue shall then compute the equalized
281.32market value of property within each municipality using the aggregate sales ratios from
281.33the Department of Revenue's sales ratio study.

281.34    Sec. 95. Minnesota Statutes 2012, section 473F.02, subdivision 14, is amended to read:
282.1    Subd. 14. Fiscal capacity. "Fiscal capacity" of a municipality means its valuation
282.2 adjusted market value, determined as of January 2 of any year, divided by its population,
282.3determined as of a date in the same year.

282.4    Sec. 96. Minnesota Statutes 2012, section 473F.02, subdivision 15, is amended to read:
282.5    Subd. 15. Average fiscal capacity. "Average fiscal capacity" of municipalities
282.6means the sum of the valuations adjusted market values of all municipalities, determined
282.7as of January 2 of any year, divided by the sum of their populations, determined as of
282.8a date in the same year.

282.9    Sec. 97. Minnesota Statutes 2012, section 473F.02, subdivision 23, is amended to read:
282.10    Subd. 23. Net tax capacity. "Net tax capacity" means the taxable market value of
282.11real and personal property multiplied by its net tax capacity rates in section 273.13.

282.12    Sec. 98. Minnesota Statutes 2012, section 473F.08, subdivision 10, is amended to read:
282.13    Subd. 10. Adjustment of value or net tax capacity. For the purpose of computing
282.14the amount or rate of any salary, aid, tax, or debt authorized, required, or limited by any
282.15provision of any law or charter, where such authorization, requirement, or limitation
282.16is related in any manner to any value or valuation of taxable property within any
282.17governmental unit, such value or net tax capacity fiscal capacity under section 473F.02,
282.18subdivision 14, a municipality's taxable market value shall be adjusted to reflect the
282.19adjustments reductions to net tax capacity effected by subdivision 2, clause (a), provided
282.20that: (1) in determining the taxable market value of commercial-industrial property
282.21or any class thereof within a governmental unit for any purpose other than section
282.22473F.07 municipality, (a) the reduction required by this subdivision shall be that amount
282.23which bears the same proportion to the amount subtracted from the governmental unit's
282.24 municipality's net tax capacity pursuant to subdivision 2, clause (a), as the taxable
282.25market value of commercial-industrial property, or such class thereof, located within the
282.26governmental unit municipality bears to the net tax capacity of commercial-industrial
282.27property, or such class thereof, located within the governmental unit, and (b) the increase
282.28required by this subdivision shall be that amount which bears the same proportion to
282.29the amount added to the governmental unit's net tax capacity pursuant to subdivision 2,
282.30clause (b), as the market value of commercial-industrial property, or such class thereof,
282.31located within the governmental unit bears to the net tax capacity of commercial-industrial
282.32property, or such class thereof, located within the governmental unit; and (2) in determining
282.33the market value of real property within a municipality for purposes of section 473F.07,
283.1the adjustment prescribed by clause (1)(a) hereof shall be made and that prescribed by
283.2clause (1)(b) hereof shall not be made municipality. No adjustment shall be made to
283.3taxable market value for the increase in net tax capacity under subdivision 2, clause (b).

283.4    Sec. 99. Minnesota Statutes 2012, section 475.521, subdivision 4, is amended to read:
283.5    Subd. 4. Limitations on amount. A municipality may not issue bonds under this
283.6section if the maximum amount of principal and interest to become due in any year on
283.7all the outstanding bonds issued under this section, including the bonds to be issued,
283.8will equal or exceed 0.16 percent of the taxable estimated market value of property
283.9in the municipality. Calculation of the limit must be made using the taxable estimated
283.10 market value for the taxes payable year in which the obligations are issued and sold. In
283.11the case of a municipality with a population of 2,500 or more, the bonds are subject to
283.12the net debt limits under section 475.53. In the case of a shared facility in which more
283.13than one municipality participates, upon compliance by each participating municipality
283.14with the requirements of subdivision 2, the limitations in this subdivision and the net debt
283.15represented by the bonds shall be allocated to each participating municipality in proportion
283.16to its required financial contribution to the financing of the shared facility, as set forth in
283.17the joint powers agreement relating to the shared facility. This section does not limit the
283.18authority to issue bonds under any other special or general law.

283.19    Sec. 100. Minnesota Statutes 2012, section 475.53, subdivision 1, is amended to read:
283.20    Subdivision 1. Generally. Except as otherwise provided in sections 475.51 to
283.21475.74 , no municipality, except a school district or a city of the first class, shall incur or be
283.22subject to a net debt in excess of three percent of the estimated market value of taxable
283.23property in the municipality.

283.24    Sec. 101. Minnesota Statutes 2012, section 475.53, subdivision 3, is amended to read:
283.25    Subd. 3. Cities first class. Unless its charter permits a greater net debt a city of
283.26the first class may not incur a net debt in excess of two percent of the estimated market
283.27value of all taxable property therein. If the charter of the city permits a net debt of the city
283.28in excess of two percent of its valuation, it may not incur a net debt in excess of 3-2/3
283.29percent of the estimated market value of the taxable property therein.
283.30    The county auditor, at the time of preparing the tax list of the city, shall compile a
283.31statement setting forth the total net tax capacity and the total estimated market value of
283.32each class of taxable property in such city for such year.

284.1    Sec. 102. Minnesota Statutes 2012, section 475.53, subdivision 4, is amended to read:
284.2    Subd. 4. School districts. Except as otherwise provided by law, no school district
284.3shall be subject to a net debt in excess of 15 percent of the actual estimated market value of
284.4all taxable property situated within its corporate limits, as computed in accordance with this
284.5subdivision. The county auditor of each county containing taxable real or personal property
284.6situated within any school district shall certify to the district upon request the estimated
284.7market value of all such property. Whenever the commissioner of revenue, in accordance
284.8with section 127A.48, subdivisions 1 to 6, has determined that the net tax capacity of any
284.9district furnished by county auditors is not based upon the adjusted market value of taxable
284.10property in the district exceeds the estimated market value of property within the district,
284.11the commissioner of revenue shall certify to the district upon request the ratio most recently
284.12ascertained to exist between such the estimated market value and the actual adjusted
284.13 market value of property within the district., and the actual market value of property
284.14within a district, on which its debt limit under this subdivision is will be based, is (a) the
284.15value certified by the county auditors, or (b) this on the estimated market value divided by
284.16the ratio certified by the commissioner of revenue, whichever results in a higher value.

284.17    Sec. 103. Minnesota Statutes 2012, section 475.58, subdivision 2, is amended to read:
284.18    Subd. 2. Funding, refunding. Any county, city, town, or school district whose
284.19outstanding gross debt, including all items referred to in section 475.51, subdivision
284.204 , exceed in amount 1.62 percent of its estimated market value may issue bonds under
284.21this subdivision for the purpose of funding or refunding such indebtedness or any part
284.22thereof. A list of the items of indebtedness to be funded or refunded shall be made by the
284.23recording officer and treasurer and filed in the office of the recording officer. The initial
284.24resolution of the governing body shall refer to this subdivision as authority for the issue,
284.25state the amount of bonds to be issued and refer to the list of indebtedness to be funded or
284.26refunded. This resolution shall be published once each week for two successive weeks
284.27in a legal newspaper published in the municipality or if there be no such newspaper, in
284.28a legal newspaper published in the county seat. Such bonds may be issued without the
284.29submission of the question of their issue to the electors unless within ten days after the
284.30second publication of the resolution a petition requesting such election signed by ten or
284.31more voters who are taxpayers of the municipality, shall be filed with the recording officer.
284.32In event such petition is filed, no bonds shall be issued hereunder unless authorized by a
284.33majority of the electors voting on the question.

284.34    Sec. 104. Minnesota Statutes 2012, section 475.73, subdivision 1, is amended to read:
285.1    Subdivision 1. May purchase these bonds; conditions. Obligations sold under the
285.2provisions of section 475.60 may be purchased by the State Board of Investment if the
285.3obligations meet the requirements of section 11A.24, subdivision 2, upon the approval of
285.4the attorney general as to form and execution of the application therefor, and under rules
285.5as the board may specify, and the state board shall have authority to purchase the same
285.6to an amount not exceeding 3.63 percent of the estimated market value of the taxable
285.7property of the municipality, according to the last preceding assessment. The obligations
285.8shall not run for a shorter period than one year, nor for a longer period than 30 years and
285.9shall bear interest at a rate to be fixed by the state board but not less than two percent per
285.10annum. Forthwith upon the delivery to the state of Minnesota of any obligations issued by
285.11virtue thereof, the commissioner of management and budget shall certify to the respective
285.12auditors of the various counties wherein are situated the municipalities issuing the same,
285.13the number, denomination, amount, rate of interest and date of maturity of each obligation.

285.14    Sec. 105. Minnesota Statutes 2012, section 477A.011, subdivision 20, is amended to
285.15read:
285.16    Subd. 20. City net tax capacity. "City net tax capacity" means (1) the net tax
285.17capacity computed using the net tax capacity rates in section 273.13 for taxes payable
285.18in the year of the aid distribution, and the market values, after the exclusion in section
285.19273.13, subdivision 35, for taxes payable in the year prior to the aid distribution plus (2)
285.20a city's fiscal disparities distribution tax capacity under section 276A.06, subdivision 2,
285.21paragraph (b), or 473F.08, subdivision 2, paragraph (b), for taxes payable in the year prior
285.22to that for which aids are being calculated. The market value utilized in computing city
285.23net tax capacity shall be reduced by the sum of (1) a city's market value of commercial
285.24industrial property as defined in section 276A.01, subdivision 3, or 473F.02, subdivision 3,
285.25multiplied by the ratio determined pursuant to section 276A.06, subdivision 2, paragraph
285.26(a), or 473F.08, subdivision 2, paragraph (a), (2) the market value of the captured value
285.27of tax increment financing districts as defined in section 469.177, subdivision 2, and (3)
285.28the market value of transmission lines deducted from a city's total net tax capacity under
285.29section 273.425. The city net tax capacity will be computed using equalized market values
285.30 the city's adjusted net tax capacity under section 273.1325.
285.31EFFECTIVE DATE.This section is effective the day following final enactment.

285.32    Sec. 106. Minnesota Statutes 2012, section 477A.011, subdivision 32, is amended to
285.33read:
286.1    Subd. 32. Commercial industrial percentage. "Commercial industrial percentage"
286.2for a city is 100 times the sum of the estimated market values of all real property in the
286.3city classified as class 3 under section 273.13, subdivision 24, excluding public utility
286.4property, to the total estimated market value of all taxable real and personal property in
286.5the city. The estimated market values are the amounts computed before any adjustments
286.6for fiscal disparities under section 276A.06 or 473F.08. The estimated market values
286.7used for this subdivision are not equalized.
286.8EFFECTIVE DATE.This section is effective for aids payable in 2014 and thereafter.

286.9    Sec. 107. Minnesota Statutes 2012, section 477A.0124, subdivision 2, is amended to
286.10read:
286.11    Subd. 2. Definitions. (a) For the purposes of this section, the following terms
286.12have the meanings given them.
286.13    (b) "County program aid" means the sum of "county need aid," "county tax base
286.14equalization aid," and "county transition aid."
286.15    (c) "Age-adjusted population" means a county's population multiplied by the county
286.16age index.
286.17    (d) "County age index" means the percentage of the population over age 65 within
286.18the county divided by the percentage of the population over age 65 within the state, except
286.19that the age index for any county may not be greater than 1.8 nor less than 0.8.
286.20    (e) "Population over age 65" means the population over age 65 established as of
286.21July 15 in an aid calculation year by the most recent federal census, by a special census
286.22conducted under contract with the United States Bureau of the Census, by a population
286.23estimate made by the Metropolitan Council, or by a population estimate of the state
286.24demographer made pursuant to section 4A.02, whichever is the most recent as to the stated
286.25date of the count or estimate for the preceding calendar year and which has been certified
286.26to the commissioner of revenue on or before July 15 of the aid calculation year. A revision
286.27to an estimate or count is effective for these purposes only if certified to the commissioner
286.28on or before July 15 of the aid calculation year. Clerical errors in the certification or use of
286.29estimates and counts established as of July 15 in the aid calculation year are subject to
286.30correction within the time periods allowed under section 477A.014.
286.31    (f) "Part I crimes" means the three-year average annual number of Part I crimes
286.32reported for each county by the Department of Public Safety for the most recent years
286.33available. By July 1 of each year, the commissioner of public safety shall certify to the
286.34commissioner of revenue the number of Part I crimes reported for each county for the
286.35three most recent calendar years available.
287.1    (g) "Households receiving food stamps" means the average monthly number of
287.2households receiving food stamps for the three most recent years for which data is
287.3available. By July 1 of each year, the commissioner of human services must certify to the
287.4commissioner of revenue the average monthly number of households in the state and in
287.5each county that receive food stamps, for the three most recent calendar years available.
287.6    (h) "County net tax capacity" means the net tax capacity of the county, computed
287.7analogously to city net tax capacity under section 477A.011, subdivision 20 county's
287.8adjusted net tax capacity under section 273.1325.
287.9EFFECTIVE DATE.This section is effective the day following final enactment.

287.10    Sec. 108. Minnesota Statutes 2012, section 641.23, is amended to read:
287.11641.23 FUNDS; HOW PROVIDED.
287.12    Before any contract is made for the erection of a county jail, sheriff's residence, or
287.13both, the county board shall either levy a sufficient tax to provide the necessary funds, or
287.14issue county bonds therefor in accordance with the provisions of chapter 475, provided
287.15that no election is required if the amount of all bonds issued for this purpose and interest
287.16on them which are due and payable in any year does not exceed an amount equal to
287.170.09671 percent of estimated market value of taxable property within the county, as last
287.18determined before the bonds are issued.

287.19    Sec. 109. Minnesota Statutes 2012, section 641.24, is amended to read:
287.20641.24 LEASING.
287.21    The county may, by resolution of the county board, enter into a lease agreement with
287.22any statutory or home rule charter city situated within the county, or a county housing and
287.23redevelopment authority established pursuant to chapter 469 or any special law whereby
287.24the city or county housing and redevelopment authority will construct a jail or other law
287.25enforcement facilities for the county sheriff, deputy sheriffs, and other employees of the
287.26sheriff and other law enforcement agencies, in accordance with plans prepared by or at
287.27the request of the county board and, when required, approved by the commissioner of
287.28corrections and will finance it by the issuance of revenue bonds, and the county may lease
287.29the site and improvements for a term and upon rentals sufficient to produce revenue for the
287.30prompt payment of the bonds and all interest accruing thereon and, upon completion of
287.31payment, will acquire title thereto. The real and personal property acquired for the jail
287.32shall constitute a project and the lease agreement shall constitute a revenue agreement
287.33as contemplated in chapter 469, and all proceedings shall be taken by the city or county
288.1housing and redevelopment authority and the county in the manner and with the force and
288.2effect provided in chapter 469; provided that:
288.3    (1) no tax shall be imposed upon or in lieu of a tax upon the property;
288.4    (2) the approval of the project by the commissioner of commerce shall not be required;
288.5    (3) the Department of Corrections shall be furnished and shall record such
288.6information concerning each project as it may prescribe;
288.7    (4) the rentals required to be paid under the lease agreement shall not exceed in any
288.8year one-tenth of one percent of the estimated market value of property within the county,
288.9as last finally equalized before the execution of the agreement;
288.10    (5) the county board shall provide for the payment of all rentals due during the term
288.11of the lease, in the manner required in section 641.264, subdivision 2;
288.12    (6) no mortgage on the property shall be granted for the security of the bonds, but
288.13compliance with clause (5) hereof may be enforced as a nondiscretionary duty of the
288.14county board; and
288.15    (7) the county board may sublease any part of the jail property for purposes consistent
288.16with the maintenance and operation of a county jail or other law enforcement facility.

288.17    Sec. 110. Minnesota Statutes 2012, section 645.44, is amended by adding a subdivision
288.18to read:
288.19    Subd. 20. Estimated market value. When used in determining or calculating a
288.20limit on taxation, spending, state aid amounts, or debt, bond, certificate of indebtedness, or
288.21capital note issuance by or for a local government unit, "estimated market value" has the
288.22meaning given in section 273.032.

288.23    Sec. 111. REVISOR'S INSTRUCTION.
288.24    The revisor of statutes shall recodify Minnesota Statutes, section 127.48,
288.25subdivisions 1 to 6, as section 273.1325, subdivisions 1 to 6, and change all
288.26cross-references to the affected subdivisions accordingly.
288.27EFFECTIVE DATE.This section is effective the day following final enactment.

288.28    Sec. 112. REPEALER.
288.29Minnesota Statutes 2012, sections 276A.01, subdivision 11; 473F.02, subdivision
288.3013; and 477A.011, subdivision 21, are repealed.

288.31    Sec. 113. EFFECTIVE DATE.
289.1    Unless otherwise specifically provided, this article is effective the day following
289.2final enactment for purposes of limits on net debt, the issuance of bonds, certificates of
289.3indebtedness, and capital notes and is effective beginning for taxes payable in 2014 for
289.4all other purposes.


289.8    Section 1. Minnesota Statutes 2012, section 289A.10, is amended by adding a
289.9subdivision to read:
289.10    Subd. 1a. Recapture tax return required. If a disposition or cessation as provided
289.11by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as
289.12defined under section 291.03, subdivision 8, paragraph (c), or personal representative of
289.13the decedent's estate must submit a recapture tax return to the commissioner.
289.14EFFECTIVE DATE.This section is effective for estates of decedents dying after
289.15June 30, 2011.

289.16    Sec. 2. Minnesota Statutes 2012, section 289A.12, subdivision 14, is amended to read:
289.17    Subd. 14. Regulated investment companies; reporting exempt-interest
289.18dividends. (a) A regulated investment company paying $10 or more in exempt-interest
289.19dividends to an individual who is a resident of Minnesota must make a return indicating
289.20the amount of the exempt-interest dividends, the name, address, and Social Security
289.21number of the recipient, and any other information that the commissioner specifies. The
289.22return must be provided to the shareholder by February 15 of the year following the year
289.23of the payment. The return provided to the shareholder must include a clear statement,
289.24in the form prescribed by the commissioner, that the exempt-interest dividends must be
289.25included in the computation of Minnesota taxable income. By June 1 of each year, the
289.26regulated investment company must file a copy of the return with the commissioner.
289.27    (b) This subdivision applies to regulated investment companies required to register
289.28under chapter 80A.
289.29    (c) (b) For purposes of this subdivision, the following definitions apply.
289.30    (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
289.31section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
289.32exempt-interest dividends that are not required to be added to federal taxable income
289.33under section 290.01, subdivision 19a, clause (1)(ii).
290.1    (2) "Regulated investment company" means regulated investment company as
290.2defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
290.3investment company as defined in section 851(g) of the Internal Revenue Code.
290.4EFFECTIVE DATE.This section is effective the day following final enactment.

290.5    Sec. 3. Minnesota Statutes 2012, section 289A.12, is amended by adding a subdivision
290.6to read:
290.7    Subd. 18. Returns by qualified heirs. A qualified heir, as defined in section 291.03,
290.8subdivision 8, paragraph (c), must file two returns with the commissioner attesting that
290.9no disposition or cessation as provided by section 291.03, subdivision 11, paragraph
290.10(a), occurred. The first return must be filed no earlier than 24 months and no later than
290.1126 months after the decedent's death. The second return must be filed no earlier than 36
290.12months and no later than 39 months after the decedent's death.
290.13EFFECTIVE DATE.This section is effective for returns required to be filed after
290.14December 31, 2013.

290.15    Sec. 4. Minnesota Statutes 2012, section 289A.18, is amended by adding a subdivision
290.16to read:
290.17    Subd. 3a. Recapture tax return. A recapture tax return must be filed with the
290.18commissioner within six months after the date of the disposition or cessation as provided
290.19by section 291.03, subdivision 11, paragraph (a).
290.20EFFECTIVE DATE.This section is effective for estates of decedents dying after
290.21June 30, 2011.

290.22    Sec. 5. Minnesota Statutes 2012, section 289A.20, subdivision 3, is amended to read:
290.23    Subd. 3. Estate tax. Taxes imposed by chapter 291 section 291.03, subdivision 1,
290.24 take effect at and upon the death of the person whose estate is subject to taxation and are
290.25due and payable on or before the expiration of nine months from that death.
290.26EFFECTIVE DATE.This section is effective for estates of decedents dying after
290.27June 30, 2011.

290.28    Sec. 6. Minnesota Statutes 2012, section 289A.20, is amended by adding a subdivision
290.29to read:
291.1    Subd. 3a. Recapture tax. The additional estate tax imposed by section 291.03,
291.2subdivision 11, paragraph (b), is due and payable on or before the expiration of the date
291.3provided by section 291.03, subdivision 11, paragraph (c).
291.4EFFECTIVE DATE.This section is effective for estates of decedents dying after
291.5June 30, 2011.

291.6    Sec. 7. Minnesota Statutes 2012, section 289A.26, subdivision 3, is amended to read:
291.7    Subd. 3. Short taxable year. (a) A corporation or an entity with a short taxable year
291.8of less than 12 months, but at least four months, must pay estimated tax in equal installments
291.9on or before the 15th day of the third, sixth, ninth, and final month of the short taxable
291.10year, to the extent applicable based on the number of months in the short taxable year.
291.11(b) A corporation or an entity is not required to make estimated tax payments for a
291.12short taxable year unless its tax liability before the first day of the last month of the taxable
291.13year can reasonably be expected to exceed $500.
291.14(c) No payment is required for a short taxable year of less than four months.
291.15EFFECTIVE DATE.This section is effective the day following final enactment.

291.16    Sec. 8. Minnesota Statutes 2012, section 289A.26, subdivision 4, is amended to read:
291.17    Subd. 4. Underpayment of estimated tax. If there is an underpayment of estimated
291.18tax by a corporation or an entity, there shall be added to the tax for the taxable year an
291.19amount determined at the rate in section 270C.40 on the amount of the underpayment,
291.20determined under subdivision 5, for the period of the underpayment determined under
291.21subdivision 6. This subdivision does not apply in the first taxable year that a corporation is
291.22subject to the tax imposed under section 290.02 or an entity is subject to the tax imposed
291.23under section 290.05, subdivision 3.
291.24EFFECTIVE DATE.This section is effective the day following final enactment.

291.25    Sec. 9. Minnesota Statutes 2012, section 289A.26, subdivision 7, is amended to read:
291.26    Subd. 7. Required installments. (a) Except as otherwise provided in this
291.27subdivision, the amount of a required installment is 25 percent of the required annual
291.28payment.
291.29(b) Except as otherwise provided in this subdivision, the term "required annual
291.30payment" means the lesser of:
291.31(1) 100 percent of the tax shown on the return for the taxable year, or, if no return is
291.32filed, 100 percent of the tax for that year; or
292.1(2) 100 percent of the tax shown on the return of the corporation or entity for the
292.2preceding taxable year provided the return was for a full 12-month period, showed a
292.3liability, and was filed by the corporation or entity.
292.4(c) Except for determining the first required installment for any taxable year,
292.5paragraph (b), clause (2), does not apply in the case of a large corporation. The term
292.6"large corporation" means a corporation or any predecessor corporation that had taxable
292.7net income of $1,000,000 or more for any taxable year during the testing period. The
292.8term "testing period" means the three taxable years immediately preceding the taxable
292.9year involved. A reduction allowed to a large corporation for the first installment that is
292.10allowed by applying paragraph (b), clause (2), must be recaptured by increasing the next
292.11required installment by the amount of the reduction.
292.12(d) In the case of a required installment, if the corporation or entity establishes that
292.13the annualized income installment is less than the amount determined in paragraph (a), the
292.14amount of the required installment is the annualized income installment and the recapture
292.15of previous quarters' reductions allowed by this paragraph must be recovered by increasing
292.16later required installments to the extent the reductions have not previously been recovered.
292.17(e) The "annualized income installment" is the excess, if any, of:
292.18(1) an amount equal to the applicable percentage of the tax for the taxable year
292.19computed by placing on an annualized basis the taxable income:
292.20(i) for the first two months of the taxable year, in the case of the first required
292.21installment;
292.22(ii) for the first two months or for the first five months of the taxable year, in the
292.23case of the second required installment;
292.24(iii) for the first six months or for the first eight months of the taxable year, in the
292.25case of the third required installment; and
292.26(iv) for the first nine months or for the first 11 months of the taxable year, in the
292.27case of the fourth required installment, over
292.28(2) the aggregate amount of any prior required installments for the taxable year.
292.29(3) For the purpose of this paragraph, the annualized income shall be computed
292.30by placing on an annualized basis the taxable income for the year up to the end of the
292.31month preceding the due date for the quarterly payment multiplied by 12 and dividing
292.32the resulting amount by the number of months in the taxable year (2, 5, 6, 8, 9, or 11 as
292.33the case may be) referred to in clause (1).
292.34(4) The "applicable percentage" used in clause (1) is:

293.1 293.2 293.3		For the following required installments:			The applicable percentage is:
293.4			1st		25
293.5			2nd		50
293.6			3rd		75
293.7			4th		100

293.8(f)(1) If this paragraph applies, the amount determined for any installment must
293.9be determined in the following manner:
293.10(i) take the taxable income for the months during the taxable year preceding the
293.11filing month;
293.12(ii) divide that amount by the base period percentage for the months during the
293.13taxable year preceding the filing month;
293.14(iii) determine the tax on the amount determined under item (ii); and
293.15(iv) multiply the tax computed under item (iii) by the base period percentage for the
293.16filing month and the months during the taxable year preceding the filing month.
293.17(2) For purposes of this paragraph:
293.18(i) the "base period percentage" for a period of months is the average percent that the
293.19taxable income for the corresponding months in each of the three preceding taxable years
293.20bears to the taxable income for the three preceding taxable years;
293.21(ii) the term "filing month" means the month in which the installment is required
293.22to be paid;
293.23(iii) this paragraph only applies if the base period percentage for any six consecutive
293.24months of the taxable year equals or exceeds 70 percent; and
293.25(iv) the commissioner may provide by rule for the determination of the base period
293.26percentage in the case of reorganizations, new corporations or entities, and other similar
293.27circumstances.
293.28(3) In the case of a required installment determined under this paragraph, if the
293.29 corporation or entity determines that the installment is less than the amount determined in
293.30paragraph (a), the amount of the required installment is the amount determined under this
293.31paragraph and the recapture of previous quarters' reductions allowed by this paragraph
293.32must be recovered by increasing later required installments to the extent the reductions
293.33have not previously been recovered.
293.34EFFECTIVE DATE.This section is effective the day following final enactment.

293.35    Sec. 10. Minnesota Statutes 2012, section 289A.26, subdivision 9, is amended to read:
294.1    Subd. 9. Failure to file an estimate. In the case of a corporation or an entity
294.2that fails to file an estimated tax for a taxable year when one is required, the period of
294.3the underpayment runs from the four installment dates in subdivision 2 or 3, whichever
294.4applies, to the earlier of the periods in subdivision 6, clauses (1) and (2).
294.5EFFECTIVE DATE.This section is effective the day following final enactment.

294.6    Sec. 11. Minnesota Statutes 2012, section 290.9705, subdivision 1, is amended to read:
294.7    Subdivision 1. Withholding of payments to out-of-state contractors. (a) In this
294.8section, "person" means a person, corporation, or cooperative, the state of Minnesota and
294.9its political subdivisions, and a city, county, and school district in Minnesota.
294.10(b) A person who in the regular course of business is hiring, contracting, or having a
294.11contract with a nonresident person or foreign corporation, as defined in Minnesota Statutes
294.121986, section 290.01, subdivision 5, to perform construction work in Minnesota, shall
294.13deduct and withhold eight percent of cumulative calendar year payments made to the
294.14contractor which exceed if the value of the contract exceeds $50,000.
294.15EFFECTIVE DATE.This section is effective for payments made to contractors
294.16after December 31, 2013.


294.19    Section 1. Minnesota Statutes 2012, section 287.20, is amended by adding a
294.20subdivision to read:
294.21    Subd. 11. Partition. "Partition" means the division by conveyance of real property
294.22that is held jointly or in common by two or more persons into individually owned interests.
294.23If one of the co-owners gives consideration for all or a part of the individually owned
294.24interest conveyed to them, that portion of the conveyance is not a part of the partition.
294.25EFFECTIVE DATE.This section is effective the day following final enactment.

294.26    Sec. 2. Minnesota Statutes 2012, section 289A.20, subdivision 4, is amended to read:
294.27    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and
294.28payable to the commissioner monthly on or before the 20th day of the month following
294.29the month in which the taxable event occurred, or following another reporting period
294.30as the commissioner prescribes or as allowed under section 289A.18, subdivision 4,
294.31paragraph (f) or (g), except that:
295.1(1) use taxes due on an annual use tax return as provided under section 289A.11,
295.2subdivision 1 , are payable by April 15 following the close of the calendar year; and.
295.3(2) except as provided in paragraph (f), for a vendor having a liability of $120,000
295.4or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the taxes
295.5imposed by chapter 297A, except as provided in paragraph (b), are due and payable to the
295.6commissioner monthly in the following manner:
295.7(i) On or before the 14th day of the month following the month in which the taxable
295.8event occurred, the vendor must remit to the commissioner 90 percent of the estimated
295.9liability for the month in which the taxable event occurred.
295.10(ii) On or before the 20th day of the month in which the taxable event occurs, the
295.11vendor must remit to the commissioner a prepayment for the month in which the taxable
295.12event occurs equal to 67 percent of the liability for the previous month.
295.13(iii) On or before the 20th day of the month following the month in which the taxable
295.14event occurred, the vendor must pay any additional amount of tax not previously remitted
295.15under either item (i) or (ii ) or, if the payment made under item (i) or (ii) was greater than
295.16the vendor's liability for the month in which the taxable event occurred, the vendor may
295.17take a credit against the next month's liability in a manner prescribed by the commissioner.
295.18(iv) Once the vendor first pays under either item (i) or (ii), the vendor is required to
295.19continue to make payments in the same manner, as long as the vendor continues having a
295.20liability of $120,000 or more during the most recent fiscal year ending June 30.
295.21(v) Notwithstanding items (i), (ii), and (iv), if a vendor fails to make the required
295.22payment in the first month that the vendor is required to make a payment under either item
295.23(i) or (ii), then the vendor is deemed to have elected to pay under item (ii) and must make
295.24subsequent monthly payments in the manner provided in item (ii).
295.25(vi) For vendors making an accelerated payment under item (ii), for the first month
295.26that the vendor is required to make the accelerated payment, on the 20th of that month, the
295.27vendor will pay 100 percent of the liability for the previous month and a prepayment for
295.28the first month equal to 67 percent of the liability for the previous month.
295.29    (b) Notwithstanding paragraph (a), A vendor having a liability of $120,000 or more
295.30during a fiscal year ending June 30 must remit the June liability for the next year in the
295.31following manner:
295.32    (1) Two business days before June 30 of the year, the vendor must remit 90 percent
295.33of the estimated June liability to the commissioner.
295.34    (2) On or before August 20 of the year, the vendor must pay any additional amount
295.35of tax not remitted in June.
295.36    (c) A vendor having a liability of:
296.1    (1) $10,000 or more, but less than $120,000 during a fiscal year ending June 30,
296.22009, and fiscal years thereafter, must remit by electronic means all liabilities on returns
296.3due for periods beginning in the subsequent calendar year on or before the 20th day of
296.4the month following the month in which the taxable event occurred, or on or before the
296.520th day of the month following the month in which the sale is reported under section
296.6289A.18, subdivision 4 ; or
296.7(2) $120,000 or more, during a fiscal year ending June 30, 2009, and fiscal years
296.8thereafter, must remit by electronic means all liabilities in the manner provided in
296.9paragraph (a), clause (2), on returns due for periods beginning in the subsequent calendar
296.10year, except for 90 percent of the estimated June liability, which is due two business days
296.11before June 30. The remaining amount of the June liability is due on August 20.
296.12(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
296.13religious beliefs from paying electronically shall be allowed to remit the payment by mail.
296.14The filer must notify the commissioner of revenue of the intent to pay by mail before
296.15doing so on a form prescribed by the commissioner. No extra fee may be charged to a
296.16person making payment by mail under this paragraph. The payment must be postmarked
296.17at least two business days before the due date for making the payment in order to be
296.18considered paid on a timely basis.
296.19(e) Whenever the liability is $120,000 or more separately for: (1) the tax imposed
296.20under chapter 297A; (2) a fee that is to be reported on the same return as and paid with the
296.21chapter 297A taxes; or (3) any other tax that is to be reported on the same return as and
296.22paid with the chapter 297A taxes, then the payment of all the liabilities on the return must
296.23be accelerated as provided in this subdivision.
296.24(f) At the start of the first calendar quarter at least 90 days after the cash flow account
296.25established in section 16A.152, subdivision 1, and the budget reserve account established in
296.26section 16A.152, subdivision 1a, reach the amounts listed in section 16A.152, subdivision
296.272 , paragraph (a), the remittance of the accelerated payments required under paragraph (a),
296.28clause (2), must be suspended. The commissioner of management and budget shall notify
296.29the commissioner of revenue when the accounts have reached the required amounts.
296.30Beginning with the suspension of paragraph (a), clause (2), for a vendor with a liability of
296.31$120,000 or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the
296.32taxes imposed by chapter 297A are due and payable to the commissioner on the 20th day
296.33of the month following the month in which the taxable event occurred. Payments of tax
296.34liabilities for taxable events occurring in June under paragraph (b) are not changed.
296.35EFFECTIVE DATE.This section is effective the day following final enactment.

297.1    Sec. 3. Minnesota Statutes 2012, section 297A.665, is amended to read:
297.2297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
297.3    (a) For the purpose of the proper administration of this chapter and to prevent
297.4evasion of the tax, until the contrary is established, it is presumed that:
297.5    (1) all gross receipts are subject to the tax; and
297.6    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
297.7in Minnesota.
297.8    (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
297.9However, a seller is relieved of liability if:
297.10    (1) the seller obtains a fully completed exemption certificate or all the relevant
297.11information required by section 297A.72, subdivision 2, at the time of the sale or within
297.1290 days after the date of the sale; or
297.13    (2) if the seller has not obtained a fully completed exemption certificate or all the
297.14relevant information required by section 297A.72, subdivision 2, within the time provided
297.15in clause (1), within 120 days after a request for substantiation by the commissioner,
297.16the seller either:
297.17    (i) obtains in good faith from the purchaser a fully completed exemption certificate
297.18or all the relevant information required by section 297A.72, subdivision 2, from the
297.19purchaser taken in good faith which means that the exemption certificate claims an
297.20exemption that (A) was statutorily available on the date of the transaction, (B) could be
297.21applicable to the item for which the exemption is claimed, and (C) is reasonable for the
297.22purchaser's type of business; or
297.23    (ii) proves by other means that the transaction was not subject to tax.
297.24    (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
297.25    (1) fraudulently fails to collect the tax; or
297.26    (2) solicits purchasers to participate in the unlawful claim of an exemption.
297.27(d) Notwithstanding paragraph (b), relief from liability does not apply to a seller
297.28who has obtained information under paragraph (b), clause (2), if through the audit process
297.29the commissioner finds the following:
297.30(1) that at the time the information was provided the seller had knowledge or had
297.31reason to know that the information relating to the exemption was materially false; or
297.32(2) that the seller knowingly participated in activity intended to purposefully evade
297.33the sales tax due on the transaction.
297.34    (d) (e) A certified service provider, as defined in section 297A.995, subdivision 2, is
297.35relieved of liability under this section to the extent a seller who is its client is relieved of
297.36liability.
298.1    (e) (f) A purchaser of tangible personal property or any items listed in section 297A.63
298.2that are shipped or brought to Minnesota by the purchaser has the burden of proving that the
298.3property was not purchased from a retailer for storage, use, or consumption in Minnesota.
298.4(f) (g) If a seller claims that certain sales are exempt and does not provide the
298.5certificate, information, or proof required by paragraph (b), clause (2), within 120 days
298.6after the date of the commissioner's request for substantiation, then the exemptions
298.7claimed by the seller that required substantiation are disallowed.
298.8EFFECTIVE DATE.This section is effective retroactively from January 1, 2013.

298.9    Sec. 4. Minnesota Statutes 2012, section 297F.01, subdivision 23, is amended to read:
298.10    Subd. 23. Wholesale sales price. "Wholesale sales price" means the price stated
298.11on the price list in effect at the time of sale for which a manufacturer or person sells a
298.12tobacco product to a distributor, exclusive of any discount, promotional offer, or other
298.13reduction. For purposes of this subdivision, "price list" means the manufacturer's price at
298.14which tobacco products are made available for sale to all distributors on an ongoing basis
298.15 at which a distributor purchases a tobacco product. Wholesale sales price includes the
298.16applicable federal excise tax, freight charges, or packaging costs, regardless of whether
298.17they were included in the purchase price.
298.18EFFECTIVE DATE.This section is effective for purchases made after December
298.1931, 2013.

298.20    Sec. 5. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read:
298.21    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages
298.22is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year
298.23beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
298.24take the credit on the 18th day of each month, but the total credit allowed may not exceed
298.25in any fiscal year the lesser of:
298.26(1) the liability for tax; or
298.27(2) $115,000.
298.28For purposes of this subdivision, a "qualified brewer" means a brewer, whether
298.29or not located in this state, manufacturing less than 100,000 barrels of fermented malt
298.30beverages in the calendar year immediately preceding the calendar fiscal year for which
298.31the credit under this subdivision is claimed. In determining the number of barrels, all
298.32brands or labels of a brewer must be combined. All facilities for the manufacture of
299.1fermented malt beverages owned or controlled by the same person, corporation, or other
299.2entity must be treated as a single brewer.
299.3EFFECTIVE DATE.This section is effective the day following final enactment.

299.4    Sec. 6. Minnesota Statutes 2012, section 297I.05, subdivision 7, is amended to read:
299.5    Subd. 7. Nonadmitted insurance premium tax. (a) A tax is imposed on surplus
299.6lines brokers. The rate of tax is equal to three percent of the gross premiums less return
299.7premiums paid by an insured whose home state is Minnesota.
299.8(b) A tax is imposed on persons, firms, or corporations a person, firm, corporation,
299.9or purchasing group as defined in section 60E.02, or any member of a purchasing group,
299.10 that procure procures insurance directly from a nonadmitted insurer. The rate of tax is
299.11equal to two percent of the gross premiums less return premiums paid by an insured
299.12whose home state is Minnesota.
299.13(c) No state other than the home state of an insured may require any premium tax
299.14payment for nonadmitted insurance. When Minnesota is the home state of the insured,
299.15as provided under section 297I.01, 100 percent of the gross premiums are taxable in
299.16Minnesota with no allocation of the tax to other states.
299.17EFFECTIVE DATE.This section is effective for premiums received after
299.18December 31, 2013.

299.19    Sec. 7. Minnesota Statutes 2012, section 297I.05, subdivision 11, is amended to read:
299.20    Subd. 11. Retaliatory provisions. (a) If any other state or country imposes any
299.21taxes, fines, deposits, penalties, licenses, or fees upon any insurance companies of this
299.22state and their agents doing business in another state or country that are in addition to or in
299.23excess of those imposed by the laws of this state upon foreign insurance companies and
299.24their agents doing business in this state, the same taxes, fines, deposits, penalties, licenses,
299.25and fees are imposed upon every similar insurance company of that state or country and
299.26their agents doing or applying to do business in this state.
299.27(b) If any conditions precedent to the right to do business in any other state or
299.28country are imposed by the laws of that state or country, beyond those imposed upon
299.29foreign companies by the laws of this state, the same conditions precedent are imposed
299.30upon every similar insurance company of that state or country and their agents doing or
299.31applying to do business in that state.
299.32(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or
299.33fees" means an amount of money that is deposited in the general revenue fund of the state
300.1or other similar fund in another state or country and is not dedicated to a special purpose
300.2or use or money deposited in the general revenue fund of the state or other similar fund in
300.3another state or country and appropriated to the commissioner of commerce or insurance
300.4for the operation of the Department of Commerce or other similar agency with jurisdiction
300.5over insurance. Taxes, fines, deposits, penalties, licenses, or fees do not include:
300.6(1) special purpose obligations or assessments imposed in connection with particular
300.7kinds of insurance, including but not limited to assessments imposed in connection with
300.8residual market mechanisms; or
300.9(2) assessments made by the insurance guaranty association, life and health
300.10guarantee association, or similar association.
300.11(d) This subdivision applies to taxes imposed under subdivisions 1,; 3,; 4, 6, and; 12,
300.12paragraph (a), clauses (1) and (2); and 14.
300.13(e) This subdivision does not apply to insurance companies organized or domiciled
300.14in a state or country, the laws of which do not impose retaliatory taxes, fines, deposits,
300.15penalties, licenses, or fees or which grant, on a reciprocal basis, exemptions from
300.16retaliatory taxes, fines, deposits, penalties, licenses, or fees to insurance companies
300.17domiciled in this state.
300.18EFFECTIVE DATE.This section is effective the day following final enactment.

300.19    Sec. 8. Minnesota Statutes 2012, section 297I.05, subdivision 12, is amended to read:
300.20    Subd. 12. Other entities. (a) A tax is imposed equal to two percent of:
300.21    (1) gross premiums less return premiums written for risks resident or located in
300.22Minnesota by a risk retention group;
300.23    (2) gross premiums less return premiums received by an attorney in fact acting
300.24in accordance with chapter 71A;
300.25    (3) gross premiums less return premiums received pursuant to assigned risk policies
300.26and contracts of coverage under chapter 79; and
300.27    (4) the direct funded premium received by the reinsurance association under section
300.2879.34 from self-insurers approved under section 176.181 and political subdivisions that
300.29self-insure; and.
300.30    (5) gross premiums less return premiums paid to an insurer other than a licensed
300.31insurance company or a surplus lines broker for coverage of risks resident or located in
300.32Minnesota by a purchasing group or any members of the purchasing group to a broker or
300.33agent for the purchasing group.
301.1    (b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The
301.2rate of tax is equal to two percent of the total amount of claims paid during the fund year,
301.3with no deduction for claims wholly or partially reimbursed through stop-loss insurance.
301.4    (c) A tax is imposed on a joint self-insurance plan operating under chapter 62H.
301.5The rate of tax is equal to two percent of the total amount of claims paid during the
301.6fund's fiscal year, with no deduction for claims wholly or partially reimbursed through
301.7stop-loss insurance.
301.8    (d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5,
301.9on the gross premiums less return premiums on all coverages received by an accountable
301.10provider network or agents of an accountable provider network in Minnesota, in cash or
301.11otherwise, during the year.
301.12EFFECTIVE DATE.This section is effective for premiums received after
301.13December 31, 2013.

301.14    Sec. 9. Minnesota Statutes 2012, section 297I.30, subdivision 1, is amended to read:
301.15    Subdivision 1. General rule. On or before March 1, every taxpayer subject to
301.16taxation under section 297I.05, subdivisions 1 to 5,; 7, paragraph (b),; 12, paragraphs (a),
301.17clauses (1) to (4), (b), (c), and (d),; and 14, shall file an annual return for the preceding
301.18calendar year in the form prescribed by the commissioner.
301.19EFFECTIVE DATE.This section is effective for premiums received after
301.20December 31, 2013.

301.21    Sec. 10. Minnesota Statutes 2012, section 297I.30, subdivision 2, is amended to read:
301.22    Subd. 2. Surplus lines brokers and purchasing groups. On or before February
301.2315 and August 15 of each year, every surplus lines broker subject to taxation under
301.24section 297I.05, subdivision 7, paragraph (a), and every purchasing group or member of
301.25a purchasing group subject to tax under section 297I.05, subdivision 12, paragraph (a),
301.26clause (5), shall file a return with the commissioner for the preceding six-month period
301.27ending December 31, or June 30, in the form prescribed by the commissioner.
301.28EFFECTIVE DATE.This section is effective for premiums received after
301.29December 31, 2013.

301.30    Sec. 11. REPEALER.
301.31Minnesota Statutes 2012, section 289A.60, subdivision 31, is repealed.
302.1EFFECTIVE DATE.This section is effective the day following final enactment.


302.4    Section 1. Minnesota Statutes 2012, section 123A.455, subdivision 1, is amended to
302.5read:
302.6    Subdivision 1. Definitions. "Split residential property parcel" means a parcel of
302.7real estate that is located within the boundaries of more than one school district and that
302.8is classified as residential property under:
302.9    (1) section 273.13, subdivision 22, paragraph (a) or (b);
302.10    (2) section 273.13, subdivision 25, paragraph (b), clause (1); or
302.11    (3) section 273.13, subdivision 25, paragraph (c), clause (1).
302.12EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
302.13thereafter.

302.14    Sec. 2. Minnesota Statutes 2012, section 270.077, is amended to read:
302.15270.077 TAXES CREDITED TO STATE AIRPORTS FUND.
302.16    All taxes levied under sections 270.071 to 270.079 must be collected by the
302.17commissioner and credited to the state airports fund created in section 360.017.
302.18EFFECTIVE DATE.This section is effective the day following final enactment.

302.19    Sec. 3. Minnesota Statutes 2012, section 270.41, subdivision 5, is amended to read:
302.20    Subd. 5. Prohibited activity. A licensed assessor or other person employed by an
302.21assessment jurisdiction or contracting with an assessment jurisdiction for the purpose
302.22of valuing or classifying property for property tax purposes is prohibited from making
302.23appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report
302.24as defined in section 82B.021, subdivisions 2, 4, 6, and 7, on any property within the
302.25assessment jurisdiction where the individual is employed or performing the duties of the
302.26assessor under contract. Violation of this prohibition shall result in immediate revocation
302.27of the individual's license to assess property for property tax purposes. This prohibition
302.28must not be construed to prohibit an individual from carrying out any duties required
302.29for the proper assessment of property for property tax purposes or performing duties
302.30enumerated in section 273.061, subdivision 7 or 8. If a formal resolution has been adopted
302.31by the governing body of a governmental unit, which specifies the purposes for which
303.1such work will be done, this prohibition does not apply to appraisal activities undertaken
303.2on behalf of and at the request of the governmental unit that has employed or contracted
303.3with the individual. The resolution may only allow appraisal activities which are related to
303.4condemnations, right-of-way acquisitions, land exchanges, or special assessments.
303.5EFFECTIVE DATE.This section is effective the day following final enactment.

303.6    Sec. 4. Minnesota Statutes 2012, section 270C.34, subdivision 1, is amended to read:
303.7    Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any
303.8penalty or interest that is imposed by a law administered by the commissioner, or imposed
303.9by section 270.0725, subdivision 1 or 2, or 270.075, subdivision 2, as a result of the late
303.10payment of tax or late filing of a return, or any part of an additional tax charge under
303.11section 289A.25, subdivision 2, or 289A.26, subdivision 4, if the failure to timely pay the
303.12tax or failure to timely file the return is due to reasonable cause, or if the taxpayer is located
303.13in a presidentially declared disaster or in a presidentially declared state of emergency area
303.14or in an area declared to be in a state of emergency by the governor under section 12.31.
303.15    (b) The commissioner shall abate any part of a penalty or additional tax charge
303.16under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous
303.17advice given to the taxpayer in writing by an employee of the department acting in
303.18an official capacity, if the advice:
303.19    (1) was reasonably relied on and was in response to a specific written request of the
303.20taxpayer; and
303.21    (2) was not the result of failure by the taxpayer to provide adequate or accurate
303.22information.
303.23EFFECTIVE DATE.This section is effective the day following final enactment.

303.24    Sec. 5. Minnesota Statutes 2012, section 272.01, subdivision 2, is amended to read:
303.25    Subd. 2. Exempt property used by private entity for profit. (a) When any real or
303.26personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is
303.27leased, loaned, or otherwise made available and used by a private individual, association,
303.28or corporation in connection with a business conducted for profit, there shall be imposed a
303.29tax, for the privilege of so using or possessing such real or personal property, in the same
303.30amount and to the same extent as though the lessee or user was the owner of such property.
303.31    (b) The tax imposed by this subdivision shall not apply to:
303.32    (1) property leased or used as a concession in or relative to the use in whole
303.33or part of a public park, market, fairgrounds, port authority, economic development
304.1authority established under chapter 469, municipal auditorium, municipal parking facility,
304.2municipal museum, or municipal stadium;
304.3    (2) property of an airport owned by a city, town, county, or group thereof which is:
304.4    (i) leased to or used by any person or entity including a fixed base operator; and
304.5    (ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods,
304.6services, or facilities to the airport or general public;
304.7the exception from taxation provided in this clause does not apply to:
304.8    (i) property located at an airport owned or operated by the Metropolitan Airports
304.9Commission or by a city of over 50,000 population according to the most recent federal
304.10census or such a city's airport authority; or
304.11    (ii) hangars leased by a private individual, association, or corporation in connection
304.12with a business conducted for profit other than an aviation-related business;
304.13    (3) property constituting or used as a public pedestrian ramp or concourse in
304.14connection with a public airport;
304.15    (4) property constituting or used as a passenger check-in area or ticket sale counter,
304.16boarding area, or luggage claim area in connection with a public airport but not the
304.17airports owned or operated by the Metropolitan Airports Commission or cities of over
304.1850,000 population or an airport authority therein. Real estate owned by a municipality
304.19in connection with the operation of a public airport and leased or used for agricultural
304.20purposes is not exempt;
304.21    (5) property leased, loaned, or otherwise made available to a private individual,
304.22corporation, or association under a cooperative farming agreement made pursuant to
304.23section 97A.135; or
304.24    (6) property leased, loaned, or otherwise made available to a private individual,
304.25corporation, or association under section 272.68, subdivision 4.
304.26    (c) Taxes imposed by this subdivision are payable as in the case of personal property
304.27taxes and shall be assessed to the lessees or users of real or personal property in the same
304.28manner as taxes assessed to owners of real or personal property, except that such taxes
304.29shall not become a lien against the property. When due, the taxes shall constitute a debt due
304.30from the lessee or user to the state, township, city, county, and school district for which the
304.31taxes were assessed and shall be collected in the same manner as personal property taxes.
304.32If property subject to the tax imposed by this subdivision is leased or used jointly by two or
304.33more persons, each lessee or user shall be jointly and severally liable for payment of the tax.
304.34    (d) The tax on real property of the federal government, the state or any of its political
304.35subdivisions that is leased by, loaned, or otherwise made available to a private individual,
304.36association, or corporation and becomes taxable under this subdivision or other provision
305.1of law must be assessed and collected as a personal property assessment. The taxes do
305.2not become a lien against the real property.
305.3EFFECTIVE DATE.This section is effective the day following final enactment.

305.4    Sec. 6. Minnesota Statutes 2012, section 272.02, subdivision 97, is amended to read:
305.5    Subd. 97. Property used in business of mining subject to net proceeds tax. The
305.6following property used in the business of mining that is subject to the net proceeds tax
305.7under section 298.015 is exempt:
305.8    (1) deposits of ores, metals, and minerals and the lands in which they are contained;
305.9    (2) all real and personal property used in mining, quarrying, producing, or refining
305.10ores, minerals, or metals, including lands occupied by or used in connection with the
305.11mining, quarrying, production, or ore refining facilities; and
305.12    (3) concentrate or direct reduced ore.
305.13    This exemption applies for each year that a person subject to tax under section
305.14298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or
305.15minerals.
305.16EFFECTIVE DATE.This section is effective the day following final enactment.

305.17    Sec. 7. Minnesota Statutes 2012, section 272.03, subdivision 9, is amended to read:
305.18    Subd. 9. Person. "Person" includes means an individual, association, estate, trust,
305.19partnership, firm, company, or corporation.
305.20EFFECTIVE DATE.This section is effective the day following final enactment.

305.21    Sec. 8. Minnesota Statutes 2012, section 273.114, subdivision 6, is amended to read:
305.22    Subd. 6. Additional taxes. (a) When real property which is being, or has been
305.23valued and assessed under this section is sold, transferred, or no longer qualifies under
305.24subdivision 2, the portion sold, transferred, or no longer qualifying shall be subject to
305.25additional taxes in the amount equal to the difference between the taxes determined in
305.26accordance with subdivision 3 and the amount determined under subdivision 4, provided
305.27that the amount determined under subdivision 4 shall not be greater than it would have
305.28been had the actual bona fide sale price of the real property at an arm's-length transaction
305.29been used in lieu of the market value determined under subdivision 4. The additional taxes
305.30shall be extended against the property on the tax list for taxes payable in the current year,
305.31provided that no interest or penalties shall be levied on the additional taxes if timely paid
306.1and provided that the additional taxes shall only be levied with respect to the current year
306.2plus two prior years that the property has been valued and assessed under this section.
306.3    (b) In the case of a sale or transfer, the additional taxes under paragraph (a) shall not
306.4be extended against the property if the new owner submits a successful application under
306.5this section by the later of May 1 of the current year or 30 days after the sale or transfer.
306.6    (c) For the purposes of this section, the following events do not constitute a sale or
306.7transfer for property that qualified under subdivision 2 prior to the event:
306.8    (1) death of a property owner when the surviving owners retain ownership of the
306.9property;
306.10    (2) divorce of a married couple when one of the spouses retains ownership of the
306.11property;
306.12    (3) marriage of a single property owner when that owner retains ownership of the
306.13property in whole or in part;
306.14    (4) the organization or reorganization of a farm ownership entity that is not prohibited
306.15from owning agricultural land in this state under section 500.24, if all owners maintain the
306.16same beneficial interest both before and after the organization or reorganization; and
306.17    (5) transfer of the property to a trust or trustee, provided that the individual owners
306.18of the property are the grantors of the trust and they maintain the same beneficial interest
306.19both before and after placement of the property in trust.
306.20EFFECTIVE DATE.This section is effective the day following final enactment.

306.21    Sec. 9. Minnesota Statutes 2012, section 273.13, subdivision 23, is amended to read:
306.22    Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural
306.23land that is homesteaded, along with any class 2b rural vacant land that is contiguous to
306.24the class 2a land under the same ownership. The market value of the house and garage
306.25and immediately surrounding one acre of land has the same class rates as class 1a or 1b
306.26property under subdivision 22. The value of the remaining land including improvements
306.27up to the first tier valuation limit of agricultural homestead property has a net class rate
306.28of 0.5 percent of market value. The remaining property over the first tier has a class rate
306.29of one percent of market value. For purposes of this subdivision, the "first tier valuation
306.30limit of agricultural homestead property" and "first tier" means the limit certified under
306.31section 273.11, subdivision 23.
306.32    (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
306.33are agricultural land and buildings. Class 2a property has a net class rate of one percent of
306.34market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a
306.35property must also include any property that would otherwise be classified as 2b, but is
307.1interspersed with class 2a property, including but not limited to sloughs, wooded wind
307.2shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
307.3and other similar land that is impractical for the assessor to value separately from the rest of
307.4the property or that is unlikely to be able to be sold separately from the rest of the property.
307.5    An assessor may classify the part of a parcel described in this subdivision that is used
307.6for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
307.7    (c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
307.8that are unplatted real estate, rural in character and not used for agricultural purposes,
307.9including land used for growing trees for timber, lumber, and wood and wood products,
307.10that is not improved with a structure. The presence of a minor, ancillary nonresidential
307.11structure as defined by the commissioner of revenue does not disqualify the property from
307.12classification under this paragraph. Any parcel of 20 acres or more improved with a
307.13structure that is not a minor, ancillary nonresidential structure must be split-classified, and
307.14ten acres must be assigned to the split parcel containing the structure. Class 2b property
307.15has a net class rate of one percent of market value unless it is part of an agricultural
307.16homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
307.17    (d) Class 2c managed forest land consists of no less than 20 and no more than 1,920
307.18acres statewide per taxpayer that is being managed under a forest management plan that
307.19meets the requirements of chapter 290C, but is not enrolled in the sustainable forest
307.20resource management incentive program. It has a class rate of .65 percent, provided that
307.21the owner of the property must apply to the assessor in order for the property to initially
307.22qualify for the reduced rate and provide the information required by the assessor to verify
307.23that the property qualifies for the reduced rate. If the assessor receives the application
307.24and information before May 1 in an assessment year, the property qualifies beginning
307.25with that assessment year. If the assessor receives the application and information after
307.26April 30 in an assessment year, the property may not qualify until the next assessment
307.27year. The commissioner of natural resources must concur that the land is qualified. The
307.28commissioner of natural resources shall annually provide county assessors verification
307.29information on a timely basis. The presence of a minor, ancillary nonresidential structure
307.30as defined by the commissioner of revenue does not disqualify the property from
307.31classification under this paragraph.
307.32    (e) Agricultural land as used in this section means:
307.33    (1) contiguous acreage of ten acres or more, used during the preceding year for
307.34agricultural purposes.; or
308.1    (2) contiguous acreage used during the preceding year for an intensive livestock or
308.2poultry confinement operation, provided that land used only for pasturing or grazing
308.3does not qualify under this clause.
308.4    "Agricultural purposes" as used in this section means the raising, cultivation, drying,
308.5or storage of agricultural products for sale, or the storage of machinery or equipment
308.6used in support of agricultural production by the same farm entity. For a property to be
308.7classified as agricultural based only on the drying or storage of agricultural products,
308.8the products being dried or stored must have been produced by the same farm entity as
308.9the entity operating the drying or storage facility. "Agricultural purposes" also includes
308.10enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or
308.11the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar
308.12state or federal conservation program if the property was classified as agricultural (i)
308.13under this subdivision for the assessment year 2002 taxes payable in 2003 because of its
308.14enrollment in a qualifying program and the land remains enrolled or (ii) in the year prior
308.15to its enrollment. Agricultural classification shall not be based upon the market value of
308.16any residential structures on the parcel or contiguous parcels under the same ownership.
308.17    "Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
308.18portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
308.19of, a set of contiguous tax parcels under that section that are owned by the same person.
308.20    (f) Real estate of Agricultural land under this section also includes:
308.21    (1) contiguous acreage that is less than ten acres, which is in size and exclusively or
308.22intensively used in the preceding year for raising or cultivating agricultural products, shall
308.23be considered as agricultural land. To qualify under this paragraph, property that includes
308.24a residential structure must be used intensively for one of the following purposes:; or
308.25    (2) contiguous acreage that contains a residence and is less than 11 acres in size, if
308.26the contiguous acreage exclusive of the house, garage, and surrounding one acre of land
308.27was used in the preceding year for one or more of the following three uses:
308.28    (i) for an intensive grain drying or storage of grain operation, or for intensive
308.29machinery or equipment storage of machinery or equipment activities used to support
308.30agricultural activities on other parcels of property operated by the same farming entity;
308.31    (ii) as a nursery, provided that only those acres used intensively to produce nursery
308.32stock are considered agricultural land; or
308.33    (iii) for livestock or poultry confinement, provided that land that is used only for
308.34pasturing and grazing does not qualify; or
308.35    (iv) (iii) for intensive market farming; for purposes of this paragraph, "market
308.36farming" means the cultivation of one or more fruits or vegetables or production of animal
309.1or other agricultural products for sale to local markets by the farmer or an organization
309.2with which the farmer is affiliated.
309.3    "Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
309.4described in section 272.193, or all of a set of contiguous tax parcels under that section
309.5that are owned by the same person.
309.6    (g) Land shall be classified as agricultural even if all or a portion of the agricultural
309.7use of that property is the leasing to, or use by another person for agricultural purposes.
309.8    Classification under this subdivision is not determinative for qualifying under
309.9section 273.111.
309.10    (h) The property classification under this section supersedes, for property tax
309.11purposes only, any locally administered agricultural policies or land use restrictions that
309.12define minimum or maximum farm acreage.
309.13    (i) The term "agricultural products" as used in this subdivision includes production
309.14for sale of:
309.15    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
309.16animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
309.17bees, and apiary products by the owner;
309.18    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
309.19for agricultural use;
309.20    (3) the commercial boarding of horses, which may include related horse training and
309.21riding instruction, if the boarding is done on property that is also used for raising pasture
309.22to graze horses or raising or cultivating other agricultural products as defined in clause (1);
309.23    (4) property which is owned and operated by nonprofit organizations used for
309.24equestrian activities, excluding racing;
309.25    (5) game birds and waterfowl bred and raised (i) on a game farm licensed under
309.26section 97A.105, provided that the annual licensing report to the Department of Natural
309.27Resources, which must be submitted annually by March 30 to the assessor, indicates
309.28that at least 500 birds were raised or used for breeding stock on the property during the
309.29preceding year and that the owner provides a copy of the owner's most recent schedule F;
309.30or (ii) for use on a shooting preserve licensed under section 97A.115;
309.31    (6) insects primarily bred to be used as food for animals;
309.32    (7) trees, grown for sale as a crop, including short rotation woody crops, and not
309.33sold for timber, lumber, wood, or wood products; and
309.34    (8) maple syrup taken from trees grown by a person licensed by the Minnesota
309.35Department of Agriculture under chapter 28A as a food processor.
310.1    (j) If a parcel used for agricultural purposes is also used for commercial or industrial
310.2purposes, including but not limited to:
310.3    (1) wholesale and retail sales;
310.4    (2) processing of raw agricultural products or other goods;
310.5    (3) warehousing or storage of processed goods; and
310.6    (4) office facilities for the support of the activities enumerated in clauses (1), (2),
310.7and (3),
310.8the assessor shall classify the part of the parcel used for agricultural purposes as class
310.91b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
310.10use. The grading, sorting, and packaging of raw agricultural products for first sale is
310.11considered an agricultural purpose. A greenhouse or other building where horticultural
310.12or nursery products are grown that is also used for the conduct of retail sales must be
310.13classified as agricultural if it is primarily used for the growing of horticultural or nursery
310.14products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
310.15those products. Use of a greenhouse or building only for the display of already grown
310.16horticultural or nursery products does not qualify as an agricultural purpose.
310.17    (k) The assessor shall determine and list separately on the records the market value
310.18of the homestead dwelling and the one acre of land on which that dwelling is located. If
310.19any farm buildings or structures are located on this homesteaded acre of land, their market
310.20value shall not be included in this separate determination.
310.21    (l) Class 2d airport landing area consists of a landing area or public access area of
310.22a privately owned public use airport. It has a class rate of one percent of market value.
310.23To qualify for classification under this paragraph, a privately owned public use airport
310.24must be licensed as a public airport under section 360.018. For purposes of this paragraph,
310.25"landing area" means that part of a privately owned public use airport properly cleared,
310.26regularly maintained, and made available to the public for use by aircraft and includes
310.27runways, taxiways, aprons, and sites upon which are situated landing or navigational aids.
310.28A landing area also includes land underlying both the primary surface and the approach
310.29surfaces that comply with all of the following:
310.30    (i) the land is properly cleared and regularly maintained for the primary purposes of
310.31the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
310.32facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
310.33    (ii) the land is part of the airport property; and
310.34    (iii) the land is not used for commercial or residential purposes.
310.35The land contained in a landing area under this paragraph must be described and certified
310.36by the commissioner of transportation. The certification is effective until it is modified,
311.1or until the airport or landing area no longer meets the requirements of this paragraph.
311.2For purposes of this paragraph, "public access area" means property used as an aircraft
311.3parking ramp, apron, or storage hangar, or an arrival and departure building in connection
311.4with the airport.
311.5    (m) Class 2e consists of land with a commercial aggregate deposit that is not actively
311.6being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
311.7located in a county that has elected to opt-out of the aggregate preservation program as
311.8provided in section 273.1115, subdivision 6. It has a class rate of one percent of market
311.9value. To qualify for classification under this paragraph, the property must be at least
311.10ten contiguous acres in size and the owner of the property must record with the county
311.11recorder of the county in which the property is located an affidavit containing:
311.12    (1) a legal description of the property;
311.13    (2) a disclosure that the property contains a commercial aggregate deposit that is not
311.14actively being mined but is present on the entire parcel enrolled;
311.15    (3) documentation that the conditional use under the county or local zoning
311.16ordinance of this property is for mining; and
311.17    (4) documentation that a permit has been issued by the local unit of government
311.18or the mining activity is allowed under local ordinance. The disclosure must include a
311.19statement from a registered professional geologist, engineer, or soil scientist delineating
311.20the deposit and certifying that it is a commercial aggregate deposit.
311.21    For purposes of this section and section 273.1115, "commercial aggregate deposit"
311.22means a deposit that will yield crushed stone or sand and gravel that is suitable for use
311.23as a construction aggregate; and "actively mined" means the removal of top soil and
311.24overburden in preparation for excavation or excavation of a commercial deposit.
311.25    (n) When any portion of the property under this subdivision or subdivision 22 begins
311.26to be actively mined, the owner must file a supplemental affidavit within 60 days from
311.27the day any aggregate is removed stating the number of acres of the property that is
311.28actively being mined. The acres actively being mined must be (1) valued and classified
311.29under subdivision 24 in the next subsequent assessment year, and (2) removed from the
311.30aggregate resource preservation property tax program under section 273.1115, if the
311.31land was enrolled in that program. Copies of the original affidavit and all supplemental
311.32affidavits must be filed with the county assessor, the local zoning administrator, and the
311.33Department of Natural Resources, Division of Land and Minerals. A supplemental
311.34affidavit must be filed each time a subsequent portion of the property is actively mined,
311.35provided that the minimum acreage change is five acres, even if the actual mining activity
311.36constitutes less than five acres.
312.1    (o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
312.2not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
312.3in section 14.386 concerning exempt rules do not apply.
312.4EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
312.5thereafter.

312.6    Sec. 10. Minnesota Statutes 2012, section 273.13, subdivision 25, is amended to read:
312.7    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
312.8units and used or held for use by the owner or by the tenants or lessees of the owner
312.9as a residence for rental periods of 30 days or more, excluding property qualifying for
312.10class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
312.11than hospitals exempt under section 272.02, and contiguous property used for hospital
312.12purposes, without regard to whether the property has been platted or subdivided. The
312.13market value of class 4a property has a class rate of 1.25 percent.
312.14    (b) Class 4b includes:
312.15    (1) residential real estate containing less than four units that does not qualify as class
312.164bb, other than seasonal residential recreational property;
312.17    (2) manufactured homes not classified under any other provision;
312.18    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
312.19farm classified under subdivision 23, paragraph (b) containing two or three units; and
312.20    (4) unimproved property that is classified residential as determined under subdivision
312.2133.
312.22    The market value of class 4b property has a class rate of 1.25 percent.
312.23    (c) Class 4bb includes:
312.24    (1) nonhomestead residential real estate containing one unit, other than seasonal
312.25residential recreational property; and
312.26    (2) a single family dwelling, garage, and surrounding one acre of property on a
312.27nonhomestead farm classified under subdivision 23, paragraph (b).
312.28    Class 4bb property has the same class rates as class 1a property under subdivision 22.
312.29    Property that has been classified as seasonal residential recreational property at
312.30any time during which it has been owned by the current owner or spouse of the current
312.31owner does not qualify for class 4bb.
312.32    (d) Class 4c property includes:
312.33    (1) except as provided in subdivision 22, paragraph (c), real and personal property
312.34devoted to commercial temporary and seasonal residential occupancy for recreation
312.35purposes, for not more than 250 days in the year preceding the year of assessment. For
313.1purposes of this clause, property is devoted to a commercial purpose on a specific day
313.2if any portion of the property is used for residential occupancy, and a fee is charged for
313.3residential occupancy. Class 4c property under this clause must contain three or more
313.4rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
313.5or individual camping site equipped with water and electrical hookups for recreational
313.6vehicles. A camping pad offered for rent by a property that otherwise qualifies for class
313.74c under this clause is also class 4c under this clause regardless of the term of the rental
313.8agreement, as long as the use of the camping pad does not exceed 250 days. In order for a
313.9property to be classified under this clause, either (i) the business located on the property
313.10must provide recreational activities, at least 40 percent of the annual gross lodging receipts
313.11related to the property must be from business conducted during 90 consecutive days,
313.12and either (A) at least 60 percent of all paid bookings by lodging guests during the year
313.13must be for periods of at least two consecutive nights; or (B) at least 20 percent of the
313.14annual gross receipts must be from charges for providing recreational activities, or (ii) the
313.15business must contain 20 or fewer rental units, and must be located in a township or a city
313.16with a population of 2,500 or less located outside the metropolitan area, as defined under
313.17section 473.121, subdivision 2, that contains a portion of a state trail administered by the
313.18Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or
313.19more nights shall be counted as two bookings. Class 4c property also includes commercial
313.20use real property used exclusively for recreational purposes in conjunction with other class
313.214c property classified under this clause and devoted to temporary and seasonal residential
313.22occupancy for recreational purposes, up to a total of two acres, provided the property is
313.23not devoted to commercial recreational use for more than 250 days in the year preceding
313.24the year of assessment and is located within two miles of the class 4c property with which
313.25it is used. In order for a property to qualify for classification under this clause, the owner
313.26must submit a declaration to the assessor designating the cabins or units occupied for 250
313.27days or less in the year preceding the year of assessment by January 15 of the assessment
313.28year. Those cabins or units and a proportionate share of the land on which they are located
313.29must be designated class 4c under this clause as otherwise provided. The remainder of the
313.30cabins or units and a proportionate share of the land on which they are located will be
313.31designated as class 3a. The owner of property desiring designation as class 4c property
313.32under this clause must provide guest registers or other records demonstrating that the units
313.33for which class 4c designation is sought were not occupied for more than 250 days in the
313.34year preceding the assessment if so requested. The portion of a property operated as a
313.35(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
313.36nonresidential facility operated on a commercial basis not directly related to temporary and
314.1seasonal residential occupancy for recreation purposes does not qualify for class 4c. For
314.2the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
314.3boats and motors, snowmobiles, downhill or cross-country ski equipment; providing
314.4marina services, launch services, or guide services; or selling bait and fishing tackle;
314.5    (2) qualified property used as a golf course if:
314.6    (i) it is open to the public on a daily fee basis. It may charge membership fees or
314.7dues, but a membership fee may not be required in order to use the property for golfing,
314.8and its green fees for golfing must be comparable to green fees typically charged by
314.9municipal courses; and
314.10    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
314.11    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
314.12with the golf course is classified as class 3a property;
314.13    (3) real property up to a maximum of three acres of land owned and used by a
314.14nonprofit community service oriented organization and not used for residential purposes
314.15on either a temporary or permanent basis, provided that:
314.16    (i) the property is not used for a revenue-producing activity for more than six days
314.17in the calendar year preceding the year of assessment; or
314.18    (ii) the organization makes annual charitable contributions and donations at least
314.19equal to the property's previous year's property taxes and the property is allowed to be
314.20used for public and community meetings or events for no charge, as appropriate to the
314.21size of the facility.
314.22    For purposes of this clause:
314.23    (A) "charitable contributions and donations" has the same meaning as lawful
314.24gambling purposes under section 349.12, subdivision 25, excluding those purposes
314.25relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
314.26    (B) "property taxes" excludes the state general tax;
314.27    (C) a "nonprofit community service oriented organization" means any corporation,
314.28society, association, foundation, or institution organized and operated exclusively for
314.29charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
314.30federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
314.31Revenue Code; and
314.32    (D) "revenue-producing activities" shall include but not be limited to property or that
314.33portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
314.34liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
314.35alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
315.1insurance business, or office or other space leased or rented to a lessee who conducts a
315.2for-profit enterprise on the premises.
315.3Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use
315.4of the property for social events open exclusively to members and their guests for periods
315.5of less than 24 hours, when an admission is not charged nor any revenues are received by
315.6the organization shall not be considered a revenue-producing activity.
315.7    The organization shall maintain records of its charitable contributions and donations
315.8and of public meetings and events held on the property and make them available upon
315.9request any time to the assessor to ensure eligibility. An organization meeting the
315.10requirement under item (ii) must file an application by May 1 with the assessor for
315.11eligibility for the current year's assessment. The commissioner shall prescribe a uniform
315.12application form and instructions;
315.13    (4) postsecondary student housing of not more than one acre of land that is owned by
315.14a nonprofit corporation organized under chapter 317A and is used exclusively by a student
315.15cooperative, sorority, or fraternity for on-campus housing or housing located within two
315.16miles of the border of a college campus;
315.17    (5)(i) manufactured home parks as defined in section 327.14, subdivision 3,
315.18excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii)
315.19manufactured home parks as defined in section 327.14, subdivision 3, that are described in
315.20section 273.124, subdivision 3a;
315.21    (6) real property that is actively and exclusively devoted to indoor fitness, health,
315.22social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
315.23and is located within the metropolitan area as defined in section 473.121, subdivision 2;
315.24    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
315.25under section 272.01, subdivision 2, and the land on which it is located, provided that:
315.26    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
315.27Airports Commission, or group thereof; and
315.28    (ii) the land lease, or any ordinance or signed agreement restricting the use of the
315.29leased premise, prohibits commercial activity performed at the hangar.
315.30    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
315.31be filed by the new owner with the assessor of the county where the property is located
315.32within 60 days of the sale;
315.33    (8) a privately owned noncommercial aircraft storage hangar not exempt under
315.34section 272.01, subdivision 2, and the land on which it is located, provided that:
315.35    (i) the land abuts a public airport; and
316.1    (ii) the owner of the aircraft storage hangar provides the assessor with a signed
316.2agreement restricting the use of the premises, prohibiting commercial use or activity
316.3performed at the hangar; and
316.4    (9) residential real estate, a portion of which is used by the owner for homestead
316.5purposes, and that is also a place of lodging, if all of the following criteria are met:
316.6    (i) rooms are provided for rent to transient guests that generally stay for periods
316.7of 14 or fewer days;
316.8    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
316.9in the basic room rate;
316.10    (iii) meals are not provided to the general public except for special events on fewer
316.11than seven days in the calendar year preceding the year of the assessment; and
316.12    (iv) the owner is the operator of the property.
316.13The market value subject to the 4c classification under this clause is limited to five rental
316.14units. Any rental units on the property in excess of five, must be valued and assessed as
316.15class 3a. The portion of the property used for purposes of a homestead by the owner must
316.16be classified as class 1a property under subdivision 22;
316.17    (10) real property up to a maximum of three acres and operated as a restaurant
316.18as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake
316.19as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
316.20is either devoted to commercial purposes for not more than 250 consecutive days, or
316.21receives at least 60 percent of its annual gross receipts from business conducted during
316.22four consecutive months. Gross receipts from the sale of alcoholic beverages must be
316.23included in determining the property's qualification under subitem (B). The property's
316.24primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
316.25sales located on the premises must be excluded. Owners of real property desiring 4c
316.26classification under this clause must submit an annual declaration to the assessor by
316.27February 1 of the current assessment year, based on the property's relevant information for
316.28the preceding assessment year;
316.29    (11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
316.30as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to
316.31the public and devoted to recreational use for marina services. The marina owner must
316.32annually provide evidence to the assessor that it provides services, including lake or river
316.33access to the public by means of an access ramp or other facility that is either located on
316.34the property of the marina or at a publicly owned site that abuts the property of the marina.
316.35No more than 800 feet of lakeshore may be included in this classification. Buildings used
316.36in conjunction with a marina for marina services, including but not limited to buildings
317.1used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
317.2tackle, are classified as class 3a property; and
317.3    (12) real and personal property devoted to noncommercial temporary and seasonal
317.4residential occupancy for recreation purposes.
317.5    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
317.6parcel of noncommercial seasonal residential recreational property under clause (12)
317.7has the same class rates as class 4bb property, (ii) manufactured home parks assessed
317.8under clause (5), item (i), have the same class rate as class 4b property, and the market
317.9value of manufactured home parks assessed under clause (5), item (ii), has the same class
317.10rate as class 4d property if more than 50 percent of the lots in the park are occupied by
317.11shareholders in the cooperative corporation or association and a class rate of one percent if
317.1250 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential
317.13recreational property and marina recreational land as described in clause (11), has a
317.14class rate of one percent for the first $500,000 of market value, and 1.25 percent for the
317.15remaining market value, (iv) the market value of property described in clause (4) has a
317.16class rate of one percent, (v) the market value of property described in clauses (2), (6), and
317.17(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property
317.18in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
317.19    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
317.20by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
317.21of the units in the building qualify as low-income rental housing units as certified under
317.22section 273.128, subdivision 3, only the proportion of qualifying units to the total number
317.23of units in the building qualify for class 4d. The remaining portion of the building shall be
317.24classified by the assessor based upon its use. Class 4d also includes the same proportion of
317.25land as the qualifying low-income rental housing units are to the total units in the building.
317.26For all properties qualifying as class 4d, the market value determined by the assessor must
317.27be based on the normal approach to value using normal unrestricted rents.
317.28    Class 4d property has a class rate of 0.75 percent.
317.29EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
317.30thereafter.

317.31    Sec. 11. Minnesota Statutes 2012, section 273.19, subdivision 1, is amended to read:
317.32    Subdivision 1. Tax-exempt property; lease. Except as provided in subdivision 3 or
317.334, tax-exempt property held under a lease for a term of at least one year, and not taxable
317.34under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall be
317.35considered, for all purposes of taxation, as the property of the person holding it. In this
318.1subdivision, "tax-exempt property" means property owned by the United States, the state
318.2 or any of its political subdivisions, a school, or any religious, scientific, or benevolent
318.3society or institution, incorporated or unincorporated, or any corporation whose property
318.4is not taxed in the same manner as other property. This subdivision does not apply to
318.5property exempt from taxation under section 272.01, subdivision 2, paragraph (b), clauses
318.6(2), (3), and (4), or to property exempt from taxation under section 272.0213.
318.7EFFECTIVE DATE.This section is effective the day following final enactment.

318.8    Sec. 12. Minnesota Statutes 2012, section 273.372, subdivision 4, is amended to read:
318.9    Subd. 4. Administrative appeals. (a) Companies that submit the reports under
318.10section 270.82 or 273.371 by the date specified in that section, or by the date specified by
318.11the commissioner in an extension, may appeal administratively to the commissioner prior
318.12to bringing an action in court by submitting.
318.13    (b) Companies that must submit reports under section 270.82 must submit a written
318.14request with to the commissioner for a conference within ten days after the date of the
318.15commissioner's valuation certification or notice to the company, or by May June 15,
318.16whichever is earlier.
318.17    (c) Companies that submit reports under section 273.371 must submit a written
318.18request to the commissioner for a conference within ten days after the date of the
318.19commissioner's valuation certification or notice to the company, or by July 1, whichever
318.20is earlier.
318.21    (d) The commissioner shall conduct the conference upon the commissioner's entire
318.22files and records and such further information as may be offered. The conference must
318.23be held no later than 20 days after the date of the commissioner's valuation certification
318.24or notice to the company, or by the date specified by the commissioner in an extension.
318.25Within 60 days after the conference the commissioner shall make a final determination of
318.26the matter and shall notify the company promptly of the determination. The conference
318.27is not a contested case hearing.
318.28    (b) (e) In addition to the opportunity for a conference under paragraph (a), the
318.29commissioner shall also provide the railroad and utility companies the opportunity to
318.30discuss any questions or concerns relating to the values established by the commissioner
318.31through certification or notice in a less formal manner. This does not change or modify
318.32the deadline for requesting a conference under paragraph (a), the deadline in section
318.33271.06 for appealing an order of the commissioner, or the deadline in section 278.01 for
318.34appealing property taxes in court.
319.1EFFECTIVE DATE.This section is effective beginning with assessment year 2014.

319.2    Sec. 13. Minnesota Statutes 2012, section 273.39, is amended to read:
319.3273.39 RURAL AREA.
319.4    As used in sections 273.39 to 273.41, the term "rural area" shall be deemed to mean
319.5any area of the state not included within the boundaries of any incorporated statutory
319.6city or home rule charter city, and such term shall be deemed to include both farm and
319.7nonfarm population thereof.
319.8EFFECTIVE DATE.This section is effective the day following final enactment.

319.9    Sec. 14. Minnesota Statutes 2012, section 279.06, subdivision 1, is amended to read:
319.10    Subdivision 1. List and notice. Within five days after the filing of such list, the
319.11court administrator shall return a copy thereof to the county auditor, with a notice prepared
319.12and signed by the court administrator, and attached thereto, which may be substantially in
319.13the following form:

319.14	State of Minnesota	)
319.15		) ss.
319.16	County of .....	)
319.17				District Court
319.18				..... Judicial District.

319.19    The state of Minnesota, to all persons, companies, or corporations who have or claim
319.20any estate, right, title, or interest in, claim to, or lien upon, any of the several parcels of
319.21land described in the list hereto attached:
319.22    The list of taxes and penalties on real property for the county of ...............................
319.23remaining delinquent on the first Monday in January, ......., has been filed in the office of
319.24the court administrator of the district court of said county, of which that hereto attached is a
319.25copy. Therefore, you, and each of you, are hereby required to file in the office of said court
319.26administrator, on or before the 20th day after the publication of this notice and list, your
319.27answer, in writing, setting forth any objection or defense you may have to the taxes, or any
319.28part thereof, upon any parcel of land described in the list, in, to, or on which you have or
319.29claim any estate, right, title, interest, claim, or lien, and, in default thereof, judgment will
319.30be entered against such parcel of land for the taxes on such list appearing against it, and
319.31for all penalties, interest, and costs. Based upon said judgment, the land shall be sold to
319.32the state of Minnesota on the second Monday in May, ....... The period of redemption for
319.33all lands sold to the state at a tax judgment sale shall be three years from the date of sale to
319.34the state of Minnesota if the land is within an incorporated area unless it is:
320.1    (a) nonagricultural homesteaded land as defined in section 273.13, subdivision 22;
320.2    (b) homesteaded agricultural land as defined in section 273.13, subdivision 23,
320.3paragraph (a);
320.4    (c) seasonal residential recreational land as defined in section 273.13, subdivisions
320.522, paragraph (c) , and 25, paragraph (d), clause (1), in which event the period of
320.6redemption is five years from the date of sale to the state of Minnesota;
320.7    (d) abandoned property and pursuant to section 281.173 a court order has been
320.8entered shortening the redemption period to five weeks; or
320.9    (e) vacant property as described under section 281.174, subdivision 2, and for which
320.10a court order is entered shortening the redemption period under section 281.174.
320.11    The period of redemption for all other lands sold to the state at a tax judgment sale
320.12shall be five years from the date of sale.
320.13    Inquiries as to the proceedings set forth above can be made to the county auditor of
320.14..... county whose address is ......

320.15		(Signed) ..... ,
320.16 320.17		Court Administrator of the District Court of the County of .....
320.18		(Here insert list.)

320.19    The notice must contain a narrative description of the various periods to redeem
320.20specified in sections 281.17, 281.173, and 281.174, in the manner prescribed by the
320.21commissioner of revenue under subdivision 2.
320.22    The list referred to in the notice shall be substantially in the following form:
320.23    List of real property for the county of ......................., on which taxes remain
320.24delinquent on the first Monday in January, .......
320.26Township (40), Range (20),

320.27 320.28 320.29 320.30 320.31 320.32 320.33 320.34	Names (and Current Filed Addresses) for the Taxpayers and Fee Owners and in Addition Those Parties Who Have Filed Their Addresses Pursuant to section 276.041	Subdivision of Section	Section	Tax Parcel Number	Total Tax and Penalty
320.35					$ cts.
320.36 320.37	John Jones (825 Fremont Fairfield, MN 55000)	S.E. 1/4 of S.W. 1/4	10	23101	2.20
321.1 321.2 321.3 321.4 321.5 321.6 321.7 321.8 321.9 321.10 321.11 321.12 321.13 321.14 321.15 321.16 321.17 321.18 321.19	Bruce Smith (2059 Hand Fairfield, MN 55000) and Fairfield State Bank (100 Main Street Fairfield, MN 55000)	That part of N.E. 1/4 of S.W. 1/4 desc. as follows: Beg. at the S.E. corner of said N.E. 1/4 of S.W. 1/4; thence N. along the E. line of said N.E. 1/4 of S.W. 1/4 a distance of 600 ft.; thence W. parallel with the S. line of said N.E. 1/4 of S.W. 1/4 a distance of 600 ft.; thence S. parallel with said E. line a distance of 600 ft. to S. line of said N.E. 1/4 of S.W. 1/4; thence E. along said S. line a distance of 600 ft. to the point of beg.	21	33211	3.15

321.20    As to platted property, the form of heading shall conform to circumstances and be
321.21substantially in the following form:
321.23Brown's Addition, or Subdivision

321.24 321.25 321.26 321.27 321.28 321.29 321.30 321.31	Names (and Current Filed Addresses) for the Taxpayers and Fee Owners and in Addition Those Parties Who Have Filed Their Addresses Pursuant to section 276.041	Lot	Block	Tax Parcel Number	Total Tax and Penalty
321.32					$ cts.
321.33 321.34	John Jones (825 Fremont Fairfield, MN 55000)	15	9	58243	2.20
321.35 321.36 321.37 321.38 321.39	Bruce Smith (2059 Hand Fairfield, MN 55000) and Fairfield State Bank (100 Main Street Fairfield, MN 55000)	16	9	58244	3.15

321.40    The names, descriptions, and figures employed in parentheses in the above forms are
321.41merely for purposes of illustration.
321.42    The name of the town, township, range or city, and addition or subdivision, as the
321.43case may be, shall be repeated at the head of each column of the printed lists as brought
321.44forward from the preceding column.
321.45    Errors in the list shall not be deemed to be a material defect to affect the validity
321.46of the judgment and sale.
322.1EFFECTIVE DATE.This section is effective for lists and notices required after
322.2December 31, 2013.

322.3    Sec. 15. Minnesota Statutes 2012, section 290B.04, subdivision 2, is amended to read:
322.4    Subd. 2. Approval; recording. The commissioner shall approve all initial
322.5applications that qualify under this chapter and shall notify qualifying homeowners on or
322.6before December 1. The commissioner may investigate the facts or require confirmation
322.7in regard to an application. The commissioner shall record or file a notice of qualification
322.8for deferral, including the names of the qualifying homeowners and a legal description
322.9of the property, in the office of the county recorder, or registrar of titles, whichever is
322.10applicable, in the county where the qualifying property is located. The notice must state
322.11that it serves as a notice of lien and that it includes deferrals under this section for future
322.12years. The commissioner shall prescribe the form of the notice. Execution of the notice
322.13by the original or facsimile signature of the commissioner or a delegate entitles them to
322.14be recorded, and no other attestation, certification, or acknowledgment is necessary. The
322.15homeowner shall pay the recording or filing fees for the notice, which, notwithstanding
322.16section 357.18, shall be paid by the homeowner at the time of satisfaction of the lien.
322.17EFFECTIVE DATE.This section is effective for notices that are both executed
322.18and recorded after June 30, 2013.

322.19    Sec. 16. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
322.20    Subd. 3. Occupation tax; other ores. Every person engaged in the business of
322.21mining, refining, or producing ores, metals, or minerals in this state, except iron ore or
322.22taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided
322.23in this subdivision. For purposes of this subdivision, mining includes the application of
322.24hydrometallurgical processes. Hydrometallurgical processes are processes that extract
322.25the ores, metals, or minerals, by use of aqueous solutions that leach, concentrate, and
322.26recover the ore, metal, or mineral. The tax is determined in the same manner as the tax
322.27imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17,
322.28subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must
322.29be computed by applying to taxable income the rate of 2.45 percent. A person subject
322.30to occupation tax under this section shall apportion its net income on the basis of the
322.31percentage obtained by taking the sum of:
322.32    (1) 75 percent of the percentage which the sales made within this state in connection
322.33with the trade or business during the tax period are of the total sales wherever made in
322.34connection with the trade or business during the tax period;
323.1    (2) 12.5 percent of the percentage which the total tangible property used by the
323.2taxpayer in this state in connection with the trade or business during the tax period is of
323.3the total tangible property, wherever located, used by the taxpayer in connection with the
323.4trade or business during the tax period; and
323.5    (3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred
323.6in this state or paid in respect to labor performed in this state in connection with the trade
323.7or business during the tax period are of the taxpayer's total payrolls paid or incurred in
323.8connection with the trade or business during the tax period.
323.9    The tax is in addition to all other taxes.
323.10EFFECTIVE DATE.This section is effective the day following final enactment.

323.11    Sec. 17. Minnesota Statutes 2012, section 298.018, is amended to read:
323.12298.018 DISTRIBUTION OF PROCEEDS.
323.13    Subdivision 1. Within taconite assistance area. The proceeds of the tax paid
323.14under sections 298.015 and 298.016 on ores, metals, or minerals and energy resources
323.15 mined or extracted within the taconite assistance area defined in section 273.1341, shall
323.16be allocated as follows:
323.17    (1) five percent to the city or town within which the minerals or energy resources
323.18are mined or extracted;
323.19    (2) ten percent to the taconite municipal aid account to be distributed as provided
323.20in section 298.282;
323.21    (3) ten percent to the school district within which the minerals or energy resources
323.22are mined or extracted;
323.23    (4) 20 percent to a group of school districts comprised of those school districts
323.24wherein the mineral or energy resource was mined or extracted or in which there is a
323.25qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion
323.26to school district indexes as follows: for each school district, its pupil units determined
323.27under section 126C.05 for the prior school year shall be multiplied by the ratio of the
323.28average adjusted net tax capacity per pupil unit for school districts receiving aid under
323.29this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
323.30ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
323.31Each district shall receive that portion of the distribution which its index bears to the sum
323.32of the indices for all school districts that receive the distributions;
323.33    (5) 20 percent to the county within which the minerals or energy resources are
323.34mined or extracted;
324.1    (6) 20 percent to St. Louis County acting as the counties' fiscal agent to be
324.2distributed as provided in sections 273.134 to 273.136;
324.3    (7) five percent to the Iron Range Resources and Rehabilitation Board for the
324.4purposes of section 298.22;
324.5    (8) five percent to the Douglas J. Johnson economic protection trust fund; and
324.6    (9) five percent to the taconite environmental protection fund.
324.7    The proceeds of the tax shall be distributed on July 15 each year.
324.8    Subd. 2. Outside taconite assistance area. The proceeds of the tax paid under
324.9sections 298.015 and 298.016 on ores, metals, or minerals and energy resources mined
324.10or extracted outside of the taconite assistance area defined in section 273.1341, shall
324.11be deposited in the general fund.
324.12EFFECTIVE DATE.This section is effective the day following final enactment.

324.13    Sec. 18. Minnesota Statutes 2012, section 373.01, subdivision 1, is amended to read:
324.14    Subdivision 1. Public corporation; listed powers. (a) Each county is a body politic
324.15and corporate and may:
324.16    (1) Sue and be sued.
324.17    (2) Acquire and hold real and personal property for the use of the county, and lands
324.18sold for taxes as provided by law.
324.19    (3) Purchase and hold for the benefit of the county real estate sold by virtue of
324.20judicial proceedings, to which the county is a party.
324.21    (4) Sell, lease, and convey real or personal estate owned by the county, and give
324.22contracts or options to sell, lease, or convey it, and make orders respecting it as deemed
324.23conducive to the interests of the county's inhabitants.
324.24    (5) Make all contracts and do all other acts in relation to the property and concerns
324.25of the county necessary to the exercise of its corporate powers.
324.26    (b) No sale, lease, or conveyance of real estate owned by the county, except the lease
324.27of a residence acquired for the furtherance of an approved capital improvement project, nor
324.28any contract or option for it, shall be valid, without first advertising for bids or proposals in
324.29the official newspaper of the county for three consecutive weeks and once in a newspaper
324.30of general circulation in the area where the property is located. The notice shall state the
324.31time and place of considering the proposals, contain a legal description of any real estate,
324.32and a brief description of any personal property. Leases that do not exceed $15,000 for any
324.33one year may be negotiated and are not subject to the competitive bid procedures of this
324.34section. All proposals estimated to exceed $15,000 in any one year shall be considered at
325.1the time set for the bid opening, and the one most favorable to the county accepted, but the
325.2county board may, in the interest of the county, reject any or all proposals.
325.3    (c) Sales of personal property the value of which is estimated to be $15,000 or
325.4more shall be made only after advertising for bids or proposals in the county's official
325.5newspaper, on the county's Web site, or in a recognized industry trade journal. At the same
325.6time it posts on its Web site or publishes in a trade journal, the county must publish in the
325.7official newspaper, either as part of the minutes of a regular meeting of the county board
325.8or in a separate notice, a summary of all requests for bids or proposals that the county
325.9advertises on its Web site or in a trade journal. After publication in the official newspaper,
325.10on the Web site, or in a trade journal, bids or proposals may be solicited and accepted by
325.11the electronic selling process authorized in section 471.345, subdivision 17. Sales of
325.12personal property the value of which is estimated to be less than $15,000 may be made
325.13either on competitive bids or in the open market, in the discretion of the county board.
325.14"Web site" means a specific, addressable location provided on a server connected to the
325.15Internet and hosting World Wide Web pages and other files that are generally accessible
325.16on the Internet all or most of a day.
325.17    (d) Notwithstanding anything to the contrary herein, the county may, when acquiring
325.18real property for county highway right-of-way, exchange parcels of real property of
325.19substantially similar or equal value without advertising for bids. The estimated values for
325.20these parcels shall be determined by the county assessor.
325.21    (e) Notwithstanding anything in this section to the contrary, the county may, when
325.22acquiring real property for purposes other than county highway right-of-way, exchange
325.23parcels of real property of substantially similar or equal value without advertising for
325.24bids. The estimated values for these parcels must be determined by the county assessor
325.25or a private appraisal performed by a licensed Minnesota real estate appraiser. For the
325.26purpose of determining for the county the estimated values of parcels proposed to be
325.27exchanged, the county assessor need not be licensed under chapter 82B. Before giving
325.28final approval to any exchange of land, the county board shall hold a public hearing on
325.29the exchange. At least two weeks before the hearing, the county auditor shall post a
325.30notice in the auditor's office and the official newspaper of the county of the hearing that
325.31contains a description of the lands affected.
325.32    (f) If real estate or personal property remains unsold after advertising for and
325.33consideration of bids or proposals the county may employ a broker to sell the property.
325.34The broker may sell the property for not less than 90 percent of its appraised market value
325.35as determined by the county. The broker's fee shall be set by agreement with the county but
325.36may not exceed ten percent of the sale price and must be paid from the proceeds of the sale.
326.1    (g) A county or its agent may rent a county-owned residence acquired for the
326.2furtherance of an approved capital improvement project subject to the conditions set
326.3by the county board and not subject to the conditions for lease otherwise provided by
326.4paragraph (a), clause (4), and paragraphs (b), (c), (d), (f), and (h).
326.5    (h) In no case shall lands be disposed of without there being reserved to the county
326.6all iron ore and other valuable minerals in and upon the lands, with right to explore for,
326.7mine and remove the iron ore and other valuable minerals, nor shall the minerals and
326.8mineral rights be disposed of, either before or after disposition of the surface rights,
326.9otherwise than by mining lease, in similar general form to that provided by section 93.20
326.10for mining leases affecting state lands. The lease shall be for a term not exceeding 50
326.11years, and be issued on a royalty basis, the royalty to be not less than 25 cents per ton of
326.122,240 pounds, and fix a minimum amount of royalty payable during each year, whether
326.13mineral is removed or not. Prospecting options for mining leases may be granted for
326.14periods not exceeding one year. The options shall require, among other things, periodical
326.15showings to the county board of the results of exploration work done.
326.16    (i) Notwithstanding anything in this subdivision to the contrary, the county may,
326.17when selling real property owned in fee simple that cannot be improved because of
326.18noncompliance with local ordinances regarding minimum area, shape, frontage, or access,
326.19proceed to sell the nonconforming parcel without advertising for bid. At the county's
326.20discretion, the real property may be restricted to sale to adjoining landowners or may be
326.21sold to any other interested party. The property shall be sold to the highest bidder, but in no
326.22case shall the property be sold for less than 90 percent of its fair market value as determined
326.23by the county assessor. All owners of land adjoining the land to be sold shall be given a
326.24written notice at least 30 days before the sale. This paragraph shall be liberally construed to
326.25encourage the sale of nonconforming real property and promote its return to the tax roles.
326.26EFFECTIVE DATE.This section is effective the day following final enactment.

326.27    Sec. 19. REPEALER.
326.28Minnesota Statutes 2012, sections 272.69; and 273.11, subdivisions 1a and 22, are
326.29repealed.
326.30EFFECTIVE DATE.This section is effective the day following final enactment.


327.3    Section 1. Minnesota Statutes 2012, section 16A.46, is amended to read:
327.416A.46 LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.
327.5    Subdivision 1. Duplicate warrant. The commissioner may issue a duplicate of an
327.6unpaid warrant to an owner if the owner certifies that the original was lost or destroyed. The
327.7commissioner may require certification be documented by affidavit. The commissioner
327.8may refuse to issue a duplicate of an unpaid state warrant. If the commissioner acts in
327.9good faith, the commissioner is not liable, whether the application is granted or denied.
327.10    Subd. 2. Original warrant is void. When the duplicate is issued, the original is
327.11void. The commissioner may require an indemnity bond from the applicant to the state for
327.12double the amount of the warrant for anyone damaged by the issuance of the duplicate.
327.13The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the
327.14commissioner acts in good faith the commissioner is not liable, whether the application is
327.15granted or denied is not liable to any holder who took the void original warrant for value,
327.16whether or not the commissioner required an indemnity bond from the applicant.
327.17    Subd. 3. Unpaid refund or rebate. For an unpaid refund or rebate issued under a
327.18tax law administered by the commissioner of revenue that has been lost or destroyed, an
327.19affidavit is not required for the commissioner to issue a duplicate if the duplicate is issued
327.20to the same name and Social Security number as the original warrant and that information
327.21is verified on a tax return filed by the recipient.
327.22EFFECTIVE DATE.This section is effective the day following final enactment.

327.23    Sec. 2. Minnesota Statutes 2012, section 270C.38, subdivision 1, is amended to read:
327.24    Subdivision 1. Sufficient notice. (a) If no method of notification of a written
327.25determination or action of the commissioner is otherwise specifically provided for by
327.26law, notice of the determination or action sent postage prepaid by United States mail to
327.27the taxpayer or other person affected by the determination or action at the taxpayer's
327.28or person's last known address, is sufficient. If the taxpayer or person being notified is
327.29deceased or is under a legal disability, or, in the case of a corporation being notified that
327.30has terminated its existence, notice to the last known address of the taxpayer, person, or
327.31corporation is sufficient, unless the department has been provided with a new address by a
327.32party authorized to receive notices from the commissioner.
328.1(b) If a taxpayer or other person agrees to accept notification by electronic means,
328.2notice of a determination or action of the commissioner sent by electronic mail to the
328.3taxpayer's or person's last known electronic mailing address as provided for in section
328.4325L.08 is sufficient.
328.5EFFECTIVE DATE.This section is effective the day following final enactment.

328.6    Sec. 3. Minnesota Statutes 2012, section 270C.42, subdivision 2, is amended to read:
328.7    Subd. 2. Penalty for failure to pay electronically. In addition to other applicable
328.8penalties imposed by law, after notification from the commissioner to the taxpayer that
328.9payments for a tax payable to the commissioner are required to be made by electronic
328.10means, and the payments are remitted by some other means, there is a penalty in the
328.11amount of five percent of each payment that should have been remitted electronically.
328.12After the commissioner's initial notification to the taxpayer that payments are required to
328.13be made by electronic means, the commissioner is not required to notify the taxpayer in
328.14subsequent periods if the initial notification specified the amount of tax liability at which a
328.15taxpayer is required to remit payments by electronic means. The penalty can be abated
328.16under the abatement procedures prescribed in section 270C.34 if the failure to remit the
328.17payment electronically is due to reasonable cause. The penalty bears interest at the rate
328.18specified in section 270C.40 from the due date of the payment of the tax provided in
328.19section 270C.40, subdivision 3, to the date of payment of the penalty.
328.20EFFECTIVE DATE.This section is effective the day following final enactment.

328.21    Sec. 4. Minnesota Statutes 2012, section 287.385, subdivision 7, is amended to read:
328.22    Subd. 7. Interest on penalties. A penalty imposed under this chapter bears interest
328.23from the date payment was required to be paid, including any extensions, provided in
328.24section 270C.40, subdivision 3, to the date of payment of the penalty.
328.25EFFECTIVE DATE.This section is effective the day following final enactment.

328.26    Sec. 5. Minnesota Statutes 2012, section 289A.55, subdivision 9, is amended to read:
328.27    Subd. 9. Interest on penalties. (a) A penalty imposed under section 289A.60,
328.28subdivision 1 , 2, 2a, 4, 5, 6, or 21 bears interest from the date the return or payment
328.29was required to be filed or paid, including any extensions provided in section 270C.40,
328.30subdivision 3, to the date of payment of the penalty.
329.1(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
329.260 days from the date of notice. In that case interest is imposed from the date of notice
329.3to the date of payment.
329.4EFFECTIVE DATE.This section is effective the day following final enactment.

329.5    Sec. 6. Minnesota Statutes 2012, section 289A.60, subdivision 4, is amended to read:
329.6    Subd. 4. Substantial understatement of liability; penalty. (a) The commissioner
329.7of revenue shall impose a penalty for substantial understatement of any tax payable to the
329.8commissioner, except a tax imposed under chapter 297A.
329.9(b) There must be added to the tax an amount equal to 20 percent of the amount of any
329.10underpayment attributable to the understatement. There is a substantial understatement of
329.11tax for the period if the amount of the understatement for the period exceeds the greater of:
329.12(1) ten percent of the tax required to be shown on the return for the period; or
329.13(2)(i) $10,000 in the case of a mining company or a corporation, other than an S
329.14corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or
329.15section 298.01 or 298.015, or
329.16(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or
329.17a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015.
329.18(c) For a corporation, other than an S corporation, there is also a substantial
329.19understatement of tax for any taxable year if the amount of the understatement for the
329.20taxable year exceeds the lesser of:
329.21(1) ten percent of the tax required to be shown on the return for the taxable year
329.22(or, if greater, $10,000); or
329.23(2) $10,000,000.
329.24(d) The term "understatement" means the excess of the amount of the tax required
329.25to be shown on the return for the period, over the amount of the tax imposed that is
329.26shown on the return. The excess must be determined without regard to items to which
329.27subdivision 27 applies. The amount of the understatement shall be reduced by that part of
329.28the understatement that is attributable to the tax treatment of any item by the taxpayer if
329.29(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to
329.30which the relevant facts affecting the item's tax treatment are adequately disclosed in the
329.31return or in a statement attached to the return and (ii) there is a reasonable basis for the tax
329.32treatment of the item. The exception for substantial authority under clause (1) does not
329.33apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the
329.34Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment
329.35of an item attributable to a multiple-party financing transaction if the treatment does not
330.1clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B)
330.2of the Internal Revenue Code. The special rules in cases involving tax shelters provided in
330.3section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax
330.4shelter the principal purpose of which is the avoidance or evasion of state taxes.
330.5(e) The commissioner may abate all or any part of the addition to the tax provided
330.6by this section on a showing by the taxpayer that there was reasonable cause for the
330.7understatement, or part of it, and that the taxpayer acted in good faith. The additional tax
330.8and penalty shall bear interest at the rate as specified in section 270C.40 from the time
330.9the tax should have been paid until paid.
330.10EFFECTIVE DATE.This section is effective the day following final enactment.

330.11    Sec. 7. Minnesota Statutes 2012, section 296A.01, is amended by adding a subdivision
330.12to read:
330.13    Subd. 8b. Biobutanol. "Biobutanol" means isobutyl alcohol produced by
330.14fermenting agriculturally generated organic material that is to be blended with gasoline
330.15and meets either:
330.16    (1) the initial ASTM Standard Specification for Butanol for Blending with Gasoline
330.17for use as an Automotive Spark-Ignition Engine Fuel once it has been released by ASTM
330.18for general distribution; or
330.19    (2) in the absence of an ASTM Standard Specification, the following list of
330.20requirements:
330.21    (i) visually free of sediment and suspended matter;
330.22    (ii) clear and bright at the ambient temperature of 21 degrees Celsius or the ambient
330.23temperature whichever is higher;
330.24    (iii) free of any adulterant or contaminant that can render it unacceptable for its
330.25commonly used applications;
330.26    (iv) contains not less than 96 volume percent isobutyl alcohol;
330.27    (v) contains not more than 0.4 volume percent methanol;
330.28    (vi) contains not more than 1.0 volume percent water as determined by ASTM
330.29standard test method E203 or E1064;
330.30    (vii) acidity (as acetic acid) of not more than 0.007 mass percent as determined
330.31by ASTM standard test method D1613;
330.32    (viii) solvent washed gum content of not more than 5.0 milligrams per 100 milliliters
330.33as determined by ASTM standard test method D381;
330.34    (ix) sulfur content of not more than 30 parts per million as determined by ASTM
330.35standard test method D2622 or D5453; and
331.1    (x) contains not more than 4 parts per million total inorganic sulfate.

331.2    Sec. 8. Minnesota Statutes 2012, section 296A.01, subdivision 19, is amended to read:
331.3    Subd. 19. E85. "E85" means a petroleum product that is a blend of agriculturally
331.4derived denatured ethanol and gasoline or natural gasoline that typically contains not more
331.5than 85 percent ethanol by volume, but at a minimum must contain 60 51 percent ethanol by
331.6volume. For the purposes of this chapter, the energy content of E85 will be considered to be
331.782,000 BTUs per gallon. E85 produced for use as a motor fuel in alternative fuel vehicles
331.8as defined in subdivision 5 must comply with ASTM specification D5798-07 D5798-11.
331.9EFFECTIVE DATE.This section is effective the day following final enactment.

331.10    Sec. 9. Minnesota Statutes 2012, section 296A.22, subdivision 1, is amended to read:
331.11    Subdivision 1. Penalty for failure to pay tax, general rule. Upon the failure of
331.12any person to pay any tax or fee when due, a penalty of one percent per day for the first
331.13ten days of delinquency shall accrue, and thereafter the tax, fees, and penalty shall bear
331.14interest at the rate specified in section 270C.40 until paid.
331.15EFFECTIVE DATE.This section is effective the day following final enactment.

331.16    Sec. 10. Minnesota Statutes 2012, section 296A.22, subdivision 3, is amended to read:
331.17    Subd. 3. Operating without license. If any person operates as a distributor, special
331.18fuel dealer, bulk purchaser, or motor carrier without first securing the license required
331.19under this chapter, any tax or fee imposed by this chapter shall become immediately due
331.20and payable. A penalty of 25 percent is imposed upon the tax and fee due. The tax, and
331.21 fees, and penalty shall bear interest at the rate specified in section 270C.40. The penalty
331.22imposed in this subdivision shall bear interest from the date provided in section 270C.40,
331.23subdivision 3, to the date of payment of the penalty.
331.24EFFECTIVE DATE.This section is effective the day following final enactment.

331.25    Sec. 11. Minnesota Statutes 2012, section 297B.11, is amended to read:
331.26297B.11 REGISTRAR AS AGENT OF COMMISSIONER OF REVENUE;
331.27POWERS.
331.28The state commissioner of revenue is charged with the administration of the
331.29sales tax on motor vehicles. The commissioner may prescribe all rules not inconsistent
331.30with the provisions of this chapter, necessary and advisable for the proper and efficient
332.1administration of the law. The collection of this sales tax on motor vehicles shall be
332.2carried out by the motor vehicle registrar who shall act as the agent of the commissioner
332.3and who shall be subject to all rules not inconsistent with the provisions of this chapter,
332.4that may be prescribed by the commissioner.
332.5The provisions of chapters 270C, 289A, and 297A relating to the commissioner's
332.6authority to audit, assess, and collect the tax, and to issue refunds and to hear appeals,
332.7are applicable to the sales tax on motor vehicles. The commissioner may impose civil
332.8penalties as provided in chapters 289A and 297A, and the additional tax and penalties
332.9are subject to interest at the rate provided in section 270C.40 from the date provided in
332.10section 270C.40, subdivision 3, until paid.
332.11EFFECTIVE DATE.This section is effective the day following final enactment.

332.12    Sec. 12. Minnesota Statutes 2012, section 297E.14, subdivision 7, is amended to read:
332.13    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297E.12,
332.14subdivision 1 , 2, 3, 4, or 5, bears interest from the date the return or payment was required
332.15to be filed or paid, including any extensions provided in section 270C.40, subdivision
332.163, to the date of payment of the penalty.
332.17(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
332.18ten days from the date of notice. In that case interest is imposed from the date of notice
332.19to the date of payment.
332.20EFFECTIVE DATE.This section is effective the day following final enactment.

332.21    Sec. 13. Minnesota Statutes 2012, section 297F.09, subdivision 9, is amended to read:
332.22    Subd. 9. Interest. The amount of tax not timely paid, together with any penalty
332.23imposed in this section, bears interest at the rate specified in section 270C.40 from the
332.24time such tax should have been paid until paid. The penalty imposed in this section bears
332.25interest at the rate specified in section 270C.40 from the date provided in section 270C.40,
332.26subdivision 3, to the date of payment of the penalty. Any interest and penalty is added to
332.27the tax and collected as a part of it.
332.28EFFECTIVE DATE.This section is effective the day following final enactment.

332.29    Sec. 14. Minnesota Statutes 2012, section 297F.18, subdivision 7, is amended to read:
332.30    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297F.19,
332.31subdivisions 2 to 7, bears interest from the date the return or payment was required to be
333.1filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
333.2date of payment of the penalty.
333.3(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
333.4ten days from the date of the notice. In that case interest is imposed from the date of notice
333.5to the date of payment.
333.6EFFECTIVE DATE.This section is effective the day following final enactment.

333.7    Sec. 15. Minnesota Statutes 2012, section 297G.09, subdivision 8, is amended to read:
333.8    Subd. 8. Interest. The amount of tax not timely paid, together with any penalty
333.9imposed by this chapter, bears interest at the rate specified in section 270C.40 from the
333.10time the tax should have been paid until paid. Any penalty imposed by this chapter bears
333.11interest from the date provided in section 270C.40, subdivision 3, to the date of payment
333.12of the penalty. Any interest and penalty is added to the tax and collected as a part of it.
333.13EFFECTIVE DATE.This section is effective the day following final enactment.

333.14    Sec. 16. Minnesota Statutes 2012, section 297G.17, subdivision 7, is amended to read:
333.15    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297G.18,
333.16subdivisions 2 to 7, bears interest from the date the return or payment was required to be
333.17filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the
333.18date of payment of the penalty.
333.19(b) A penalty not included in paragraph (a) bears interest only if it is not paid within
333.20ten days from the date of the notice. In that case interest is imposed from the date of notice
333.21to the date of payment.
333.22EFFECTIVE DATE.This section is effective the day following final enactment.

333.23    Sec. 17. Minnesota Statutes 2012, section 297I.80, subdivision 1, is amended to read:
333.24    Subdivision 1. Payable to commissioner. (a) When interest is required under this
333.25section, interest is computed at the rate specified in section 270C.40.
333.26(b) If a tax or surcharge is not paid within the time named by law for payment, the
333.27unpaid tax or surcharge bears interest from the date the tax or surcharge should have been
333.28paid until the date the tax or surcharge is paid.
333.29(c) Whenever a taxpayer is liable for additional tax or surcharge because of a
333.30redetermination by the commissioner or other reason, the additional tax or surcharge
333.31bears interest from the time the tax or surcharge should have been paid until the date the
333.32tax or surcharge is paid.
334.1(d) A penalty bears interest from the date the return or payment was required to be
334.2filed or paid provided in section 270C.40, subdivision 3, to the date of payment of the
334.3penalty.
334.4EFFECTIVE DATE.This section is effective the day following final enactment.

334.5    Sec. 18. Minnesota Statutes 2012, section 469.319, subdivision 4, is amended to read:
334.6    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
334.7chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
334.8file an amended return with the commissioner of revenue and pay any taxes required
334.9to be repaid within 30 days after becoming subject to repayment under this section.
334.10The amount required to be repaid is determined by calculating the tax for the period or
334.11periods for which repayment is required without regard to the exemptions and credits
334.12allowed under section 469.315.
334.13    (b) For the repayment of taxes imposed under chapter 297B, a business must pay any
334.14taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of
334.15revenue, within 30 days after becoming subject to repayment under this section.
334.16    (c) For the repayment of property taxes, the county auditor shall prepare a tax
334.17statement for the business, applying the applicable tax extension rates for each payable
334.18year and provide a copy to the business and to the taxpayer of record. The business must
334.19pay the taxes to the county treasurer within 30 days after receipt of the tax statement. The
334.20business or the taxpayer of record may appeal the valuation and determination of the
334.21property tax to the Tax Court within 30 days after receipt of the tax statement.
334.22    (d) The provisions of chapters 270C and 289A relating to the commissioner's
334.23authority to audit, assess, and collect the tax and to hear appeals are applicable to the
334.24repayment required under paragraphs (a) and (b). The commissioner may impose civil
334.25penalties as provided in chapter 289A, and the additional tax and penalties are subject
334.26to interest at the rate provided in section 270C.40,. The additional tax shall bear interest
334.27 from 30 days after becoming subject to repayment under this section until the date the
334.28tax is paid. Any penalty imposed pursuant to this section shall bear interest from the date
334.29provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
334.30    (e) If a property tax is not repaid under paragraph (c), the county treasurer shall
334.31add the amount required to be repaid to the property taxes assessed against the property
334.32for payment in the year following the year in which the auditor provided the statement
334.33under paragraph (c).
334.34    (f) For determining the tax required to be repaid, a reduction of a state or local sales or
334.35use tax is deemed to have been received on the date that the good or service was purchased
335.1or first put to a taxable use. In the case of an income tax or franchise tax, including the
335.2credit payable under section 469.318, a reduction of tax is deemed to have been received
335.3for the two most recent tax years that have ended prior to the date that the business became
335.4subject to repayment under this section. In the case of a property tax, a reduction of tax is
335.5deemed to have been received for the taxes payable in the year that the business became
335.6subject to repayment under this section and for the taxes payable in the prior year.
335.7    (g) The commissioner may assess the repayment of taxes under paragraph (d) any
335.8time within two years after the business becomes subject to repayment under subdivision
335.91, or within any period of limitations for the assessment of tax under section 289A.38,
335.10whichever period is later. The county auditor may send the statement under paragraph
335.11(c) any time within three years after the business becomes subject to repayment under
335.12subdivision 1.
335.13    (h) A business is not entitled to any income tax or franchise tax benefits, including
335.14refundable credits, for any part of the year in which the business becomes subject to
335.15repayment under this section nor for any year thereafter. Property is not exempt from tax
335.16under section 272.02, subdivision 64, for any taxes payable in the year following the year
335.17in which the property became subject to repayment under this section nor for any year
335.18thereafter. A business is not eligible for any sales tax benefits beginning with goods
335.19or services purchased or first put to a taxable use on the day that the business becomes
335.20subject to repayment under this section.
335.21EFFECTIVE DATE.This section is effective the day following final enactment.

335.22    Sec. 19. Minnesota Statutes 2012, section 469.340, subdivision 4, is amended to read:
335.23    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
335.24chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
335.25file an amended return with the commissioner of revenue and pay any taxes required to be
335.26repaid within 30 days after ceasing to do business in the zone. The amount required to be
335.27repaid is determined by calculating the tax for the period or periods for which repayment
335.28is required without regard to the exemptions and credits allowed under section 469.336.
335.29(b) For the repayment of property taxes, the county auditor shall prepare a tax
335.30statement for the business, applying the applicable tax extension rates for each payable
335.31year and provide a copy to the business. The business must pay the taxes to the county
335.32treasurer within 30 days after receipt of the tax statement. The taxpayer may appeal the
335.33valuation and determination of the property tax to the Tax Court within 30 days after
335.34receipt of the tax statement.
336.1(c) The provisions of chapters 270C and 289A relating to the commissioner's
336.2authority to audit, assess, and collect the tax and to hear appeals are applicable to the
336.3repayment required under paragraph (a). The commissioner may impose civil penalties as
336.4provided in chapter 289A, and the additional tax and penalties are subject to interest at the
336.5rate provided in section 270C.40,. The additional tax shall bear interest from 30 days after
336.6ceasing to do business in the biotechnology and health sciences industry zone until the
336.7date the tax is paid. Any penalty imposed pursuant to this section shall bear interest from
336.8the date provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
336.9(d) If a property tax is not repaid under paragraph (b), the county treasurer shall add
336.10the amount required to be repaid to the property taxes assessed against the property for
336.11payment in the year following the year in which the treasurer discovers that the business
336.12ceased to operate in the biotechnology and health sciences industry zone.
336.13(e) For determining the tax required to be repaid, a tax reduction is deemed to have
336.14been received on the date that the tax would have been due if the taxpayer had not been
336.15entitled to the exemption, or on the date a refund was issued for a refundable credit.
336.16(f) The commissioner may assess the repayment of taxes under paragraph (c) any
336.17time within two years after the business ceases to operate in the biotechnology and health
336.18sciences industry zone, or within any period of limitations for the assessment of tax under
336.19section 289A.38, whichever period is later.
336.20EFFECTIVE DATE.This section is effective the day following final enactment.