S.F. No. 3131, 3rd Engrossment - 84th Legislative Session (2005-2006)
Posted on Apr 21, 2006
1.1 A bill for an act
1.2 relating to financing and operation of state and local government; making
1.3 policy, technical, administrative, enforcement, collection, refund, and other
1.4 changes to income, franchise, property, sales and use, mortgage and deed, health
1.5 care provider, cigarette and tobacco products, liquor, insurance premiums,
1.6 aggregate removal, occupation, net proceeds, and production taxes, the property
1.7 tax refund, and other taxes and tax-related provisions; providing income tax
1.8 credits and subtraction; providing for taxation of foreign operating corporations;
1.9 providing a refund for transit passes; modifying and authorizing sales tax
1.10 exemptions; modifying and authorizing local government sales taxes; modifying
1.11 the homestead market value credit; modifying certain levies; changing and
1.12 providing property tax exemptions and value exclusions; providing for aids and
1.13 payments to local governments; modifying international economic development
1.14 zone authority; authorizing distributions of tax proceeds; changing provisions
1.15 relating to fiscal disparities and education financing; changing and imposing
1.16 powers, duties, and requirements on certain local governments and authorities
1.17 and state departments or agencies; providing for issuance of obligations by local
1.18 governments and other public authorities, and use of the proceeds of the debt;
1.19 changing tax increment financing and abatement provisions, and providing
1.20 authorities to certain districts; providing for studies and reports; providing
1.21 penalties; establishing accounts and providing funding; providing for allocation
1.22 and transfers of funds; appropriating money;amending Minnesota Statutes 2004,
1.23 sections 103E.635, subdivision 7; 116A.20, subdivision 3; 116J.993, subdivision
1.24 3; 123B.53, subdivision 5; 144F.01, subdivision 4; 162.18, subdivision 1;
1.25 162.181, subdivision 1; 216B.2424, subdivision 5; 270A.03, subdivision 2;
1.26 272.02, subdivisions 12, 45, 54, 55, by adding a subdivision; 273.032; 273.11,
1.27 by adding a subdivision; 273.124, subdivision 12, by adding a subdivision;
1.28 273.13, subdivision 23; 273.1384, subdivision 2; 273.1398, subdivision 3;
1.29 281.23, subdivision 9; 289A.09, subdivision 2; 290.06, subdivision 28, by adding
1.30 subdivisions; 290.10; 290.17, subdivision 1; 290.34, subdivision 1; 295.50,
1.31 subdivision 4; 295.53, subdivisions 3, 4a; 297A.61, subdivisions 12, 17, by
1.32 adding subdivisions; 297A.63; 297A.668, subdivision 6; 297A.669, subdivision
1.33 11; 297A.67, subdivisions 4, 5, 14, 18, 27, by adding a subdivision; 297A.68,
1.34 subdivision 19, by adding a subdivision; 297A.70, subdivisions 2, 3, 4, 7, 13,
1.35 14, 15; 297A.71, subdivision 23, by adding a subdivision; 297A.99, subdivision
1.36 7; 297F.01, by adding a subdivision; 297G.01, subdivision 7, by adding a
1.37 subdivision; 298.001, by adding a subdivision; 298.01, subdivisions 3a, 3b, 4a,
1.38 4b, by adding a subdivision; 298.17; 298.28, by adding a subdivision; 298.2961,
2.1 by adding a subdivision; 298.75, by adding a subdivision; 365A.08; 365A.095;
2.2 373.45, subdivision 1; 383A.80, subdivision 4; 383B.80, subdivision 4; 469.035;
2.3 469.103, subdivision 2; 469.176, subdivision 3; 469.1763, subdivisions 3, 4;
2.4 469.1813, subdivisions 1, 6b, 8, 9, by adding a subdivision; 469.312, subdivision
2.5 5; 473.39, by adding a subdivision; 473F.08, by adding a subdivision; 474A.062;
2.6 477A.013, subdivision 9; 477A.014, subdivision 1; Minnesota Statutes 2005
2.7 Supplement, sections 115B.49, subdivision 4; 123B.54; 126C.10, subdivision
2.8 13a; 270C.01, subdivision 4; 270C.304; 270C.33, subdivision 4; 270C.57,
2.9 subdivision 3; 270C.67, subdivision 1, by adding a subdivision; 270C.722,
2.10 subdivision 2; 271.12; 272.02, subdivision 83; 273.128, subdivision 1; 273.13,
2.11 subdivisions 22, 25; 273.1384, subdivision 1; 276.04, subdivision 2; 284.07;
2.12 289A.121, subdivision 5; 290.01, subdivisions 6b, 19b, 19c, 19d; 290.0922,
2.13 subdivisions 2, 3; 297A.61, subdivision 3; 297A.64, subdivision 4; 297A.67,
2.14 subdivision 6; 297A.68, subdivisions 37, 38, 41; 297A.70, subdivision 8;
2.15 297A.72, subdivision 2; 297A.75, subdivisions 1, 2, 3; 297A.815, subdivision
2.16 1; 298.01, subdivisions 3, 4; 298.223, subdivision 1; 298.2961, subdivision
2.17 4; 469.1763, subdivision 2; 469.178, subdivision 7; 469.1813, subdivision 6;
2.18 469.322; 469.323, subdivision 2; 469.327; 475.521, subdivision 4; 477A.011,
2.19 subdivision 36; 477A.013, subdivision 8; 477A.03, subdivision 2a; Laws 1980,
2.20 chapter 511, section 1, subdivision 2, as amended; Laws 1994, chapter 587,
2.21 article 9, section 20, subdivisions 1, 2; Laws 1996, chapter 471, article 2,
2.22 section 29; Laws 1999, chapter 243, article 4, section 18, subdivisions 1, 3,
2.23 4; Laws 2005, chapter 152, article 1, section 39, subdivision 1; Laws 2001,
2.24 First Special Session chapter 5, article 3, section 8, as amended; Laws 2005,
2.25 First Special Session chapter 3, article 2, section 5; article 5, sections 3; 43,
2.26 subdivision 3; 44, subdivision 1; article 10, section 23; proposing coding for
2.27 new law in Minnesota Statutes, chapters 41B; 270C; 273; 287; 290; 383C;
2.28 383D; 469; repealing Minnesota Statutes 2004, sections 297A.68, subdivisions
2.29 15, 18; 298.01, subdivisions 3c, 3d, 4d, 4e; Laws 1994, chapter 587, article
2.30 9, section 20, subdivision 4; Laws 1996, chapter 464, article 1, section 8,
2.31 subdivision 5; Laws 1998, chapter 389, article 11, section 18; Minnesota Rules,
2.32 parts 8130.0400, subpart 3; 8130.4800, subparts 1, 3, 4, 5, 6, 7, 8; 8130.5100;
2.33 8130.5400; 8130.5800, subpart 6.
2.34 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
2.35 ARTICLE 1
2.36 INCOME TAX
2.37 Section 1. [41B.0391] BEGINNING FARMER PROGRAM; TAX CREDITS.
2.38 Subdivision 1. Definitions. (a) For purposes of this section, the following terms
2.39 have the meanings given.
2.40 (b) "Farm" means any tract of land over ten acres in area used for or devoted to the
2.41 commercial production of farm products.
2.42 (c) "Farm product" means those plants and animals useful to humans and includes,
2.43 but is not limited to, forage and sod crops, grain and feed crops, dairy and dairy products,
2.44 poultry and poultry products, livestock, fruits, and vegetables.
2.45 (d) "Farming or livestock production" means the active use, management, and
2.46 operation of real and personal property for the production of a farm product.
2.47 (e) "Beginning farmer or livestock producer" means a resident of Minnesota who:
3.1 (1) is seeking entry or has entered within the last two years into farming or livestock
3.2 production;
3.3 (2) intends to farm or raise crops or livestock on land located within the state borders
3.4 of Minnesota; and
3.5 (3) meets the following eligibility requirements as determined by the authority:
3.6 (i) has a net worth of not more than $200,000, including any holdings by a spouse
3.7 or dependent, based on fair market value;
3.8 (ii) provides the majority of the day-to-day physical labor and management of the
3.9 farm;
3.10 (iii) has, by the judgment of the Rural Finance Authority ("authority"), adequate
3.11 farming or livestock production experience or demonstrates knowledge in the type of
3.12 farming or livestock production for which the beginning farmer seeks assistance from
3.13 the authority;
3.14 (iv) demonstrates to the authority a profit potential by submitting projected earnings
3.15 statements;
3.16 (v) asserts to the satisfaction of the authority that farming or livestock production
3.17 will be a significant source of income for the beginning farmer or livestock producer;
3.18 (vi) participates in a financial management program approved by the authority
3.19 or the commissioner of agriculture; and
3.20 (vii) has other such qualifications as specified by the authority.
3.21 Subd. 2. Beginning farmer management tax credit. (a) A beginning farmer or
3.22 livestock producer may take a credit against the tax due under chapter 290 for participating
3.23 in a financial management program approved by the authority. The credit is equal to 100
3.24 percent of the cost of participating in the program or $500, whichever is less. The credit
3.25 is available for up to three years while the farmer is in the program. The authority shall
3.26 maintain a list of approved financial management programs and establish a procedure for
3.27 approving equivalent programs that are not on the list.
3.28 (b) The credit is limited to the liability for tax, as computed under chapter 290 for
3.29 the taxable year. If the amount of the credit determined under this section for any taxable
3.30 year exceeds this limitation, the excess is a beginning farmer management credit carryover
3.31 according to section 290.06, subdivision 35.
3.32 Subd. 3. Authority's duties. The authority shall:
3.33 (1) approve and certify beginning farmers and livestock producers as eligible for
3.34 the program under this section;
4.1 (2) provide necessary and reasonable assistance and support to beginning farmers
4.2 and livestock producers for qualification and participation in financial management
4.3 programs approved by the authority; and
4.4 (3) refer beginning farmers and livestock producers to agencies and organizations
4.5 that may provide additional pertinent information and assistance.
4.6 EFFECTIVE DATE.This section is effective for taxable years beginning after
4.7 December 31, 2006.
4.8 Sec. 2. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19b, is
4.9 amended to read:
4.10 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
4.11 and trusts, there shall be subtracted from federal taxable income:
4.12 (1) net interest income on obligations of any authority, commission, or
4.13 instrumentality of the United States to the extent includable in taxable income for federal
4.14 income tax purposes but exempt from state income tax under the laws of the United States;
4.15 (2) if included in federal taxable income, the amount of any overpayment of income
4.16 tax to Minnesota or to any other state, for any previous taxable year, whether the amount
4.17 is received as a refund or as a credit to another taxable year's income tax liability;
4.18 (3) the amount paid to others, less the amount used to claim the credit allowed under
4.19 section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
4.20 to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
4.21 transportation of each qualifying child in attending an elementary or secondary school
4.22 situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
4.23 resident of this state may legally fulfill the state's compulsory attendance laws, which
4.24 is not operated for profit, and which adheres to the provisions of the Civil Rights Act
4.25 of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
4.26 tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
4.27 "textbooks" includes books and other instructional materials and equipment purchased
4.28 or leased for use in elementary and secondary schools in teaching only those subjects
4.29 legally and commonly taught in public elementary and secondary schools in this state.
4.30 Equipment expenses qualifying for deduction includes expenses as defined and limited in
4.31 section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
4.32 books and materials used in the teaching of religious tenets, doctrines, or worship, the
4.33 purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
4.34 or materials for, or transportation to, extracurricular activities including sporting events,
4.35 musical or dramatic events, speech activities, driver's education, or similar programs. For
5.1 purposes of the subtraction provided by this clause, "qualifying child" has the meaning
5.2 given in section 32(c)(3) of the Internal Revenue Code;
5.3 (4) income as provided under section 290.0802;
5.4 (5) to the extent included in federal adjusted gross income, income realized on
5.5 disposition of property exempt from tax under section 290.491;
5.6 (6) to the extent not deducted in determining federal taxable income by an individual
5.7 who does not itemize deductions for federal income tax purposes for the taxable year, an
5.8 amount equal to 50 percent of the excess of charitable contributions over $500 allowable
5.9 as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
5.10 under the provisions of Public Law 109-1;
5.11 (7) for taxable years beginning before January 1, 2008, the amount of the federal
5.12 small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
5.13 which is included in gross income under section 87 of the Internal Revenue Code;
5.14 (8) for individuals who are allowed a federal foreign tax credit for taxes that do not
5.15 qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
5.16 of subnational foreign taxes for the taxable year, but not to exceed the total subnational
5.17 foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
5.18 "federal foreign tax credit" means the credit allowed under section 27 of the Internal
5.19 Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
5.20 under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
5.21 the extent they exceed the federal foreign tax credit;
5.22 (9) in each of the five tax years immediately following the tax year in which an
5.23 addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
5.24 of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
5.25 of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
5.26 the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
5.27 subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
5.28 positive value of any net operating loss under section 172 of the Internal Revenue Code
5.29 generated for the tax year of the addition. The resulting delayed depreciation cannot be
5.30 less than zero;
5.31 (10) job opportunity building zone income as provided under section 469.316;
5.32 (11) the amount of compensation paid to members of the Minnesota National Guard
5.33 or other reserve components of the United States military for active service performed
5.34 in Minnesota, excluding compensation for services performed under the Active Guard
5.35 Reserve (AGR) program. For purposes of this clause, "active service" means (i) state
5.36 active service as defined in section 190.05, subdivision 5a, clause (1); (ii) federally
6.1 funded state active service as defined in section 190.05, subdivision 5b; or (iii) federal
6.2 active service as defined in section 190.05, subdivision 5c, but "active service" excludes
6.3 services performed exclusively for purposes of basic combat training, advanced individual
6.4 training, annual training, and periodic inactive duty training; special training periodically
6.5 made available to reserve members; and service performed in accordance with section
6.6 190.08, subdivision 3;
6.7 (12) the amount of compensation paid to Minnesota residents who are members
6.8 of the armed forces of the United States or United Nations for active duty performed
6.9 outside Minnesota;
6.10 (13) an amount, not to exceed $10,000, equal to qualified expenses related to a
6.11 qualified donor's donation, while living, of one or more of the qualified donor's organs
6.12 to another person for human organ transplantation. For purposes of this clause, "organ"
6.13 means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
6.14 "human organ transplantation" means the medical procedure by which transfer of a human
6.15 organ is made from the body of one person to the body of another person; "qualified
6.16 expenses" means unreimbursed expenses for both the individual and the qualified donor
6.17 for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
6.18 may be subtracted under this clause only once; and "qualified donor" means the individual
6.19 or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
6.20 individual may claim the subtraction in this clause for each instance of organ donation for
6.21 transplantation during the taxable year in which the qualified expenses occur;
6.22 (14) in each of the five tax years immediately following the tax year in which an
6.23 addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
6.24 shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
6.25 addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
6.26 case of a shareholder of a corporation that is an S corporation, minus the positive value of
6.27 any net operating loss under section 172 of the Internal Revenue Code generated for the
6.28 tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
6.29 subtraction is not allowed under this clause;
6.30 (15) to the extent included in federal taxable income, compensation paid to a
6.31 nonresident who is a service member as defined in United States Code, title 10, section
6.32 101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
6.33 Law 108-189, section 101(2); and
6.34 (16) international economic development zone income as provided under section
6.35 469.325; and
7.1 (17) to the extent included in federal taxable income, a percentage of compensation
7.2 received from a pension or other retirement pay from the government for service in the
7.3 armed forces of the United States, up to a maximum amount.
7.4 For taxable years beginning after December 31, 2005, and before January 1, 2007, the
7.5 percentage is 25 percent and the maximum amount is $7,500; for taxable years beginning
7.6 after December 31, 2006, and before January 1, 2008, the percentage is 50 percent and
7.7 the maximum amount is $15,000; for taxable years beginning after December 31, 2007,
7.8 and before January 1, 2009, the percentage is 75 percent and the maximum amount is
7.9 $22,500; and for taxable years beginning after December 31, 2008, the percentage is 100
7.10 percent and there is no maximum amount.
7.11 EFFECTIVE DATE.This section is effective for tax years beginning after
7.12 December 31, 2005.
7.13 Sec. 3. Minnesota Statutes 2004, section 290.06, subdivision 28, is amended to read:
7.14 Subd. 28. Credit Credits and refunds for transit passes. (a) A taxpayer may
7.15 take a credit against the tax due under this chapter equal to 30 percent of the expense
7.16 incurred by the taxpayer to provide transit passes, for use in Minnesota, to employees of
7.17 the taxpayer. As used in this subdivision, "transit pass" has the meaning given in section
7.18 132(f)(5)(A) of the Internal Revenue Code. If the taxpayer purchases the transit passes
7.19 from the transit system operator, and resells them to the employees, the credit is based on
7.20 the amount of the difference between the price paid for the passes by the employer and
7.21 the amount charged to employees.
7.22 (b) An employer that is exempt from taxation under section 290.05, but excluding
7.23 entities enumerated in section 290.05, subdivision 1, clause (b), may claim a refund equal
7.24 to 30 percent of an expense incurred by the employer to provide transit passes to the
7.25 employer's employees for use in Minnesota.
7.26 (c) The commissioner shall prescribe the forms for and the manner in which the
7.27 refund may be claimed. The commissioner must provide for paying refunds at least
7.28 quarterly. The commissioner may set a minimum amount of qualifying expenses that must
7.29 be incurred before a refund may be claimed.
7.30 (d) An amount sufficient to pay the refunds required by this subdivision is
7.31 appropriated to the commissioner of revenue.
7.32 EFFECTIVE DATE.This section is effective for transit passes purchased after
7.33 June 30, 2006.
8.1 Sec. 4. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision
8.2 to read:
8.3 Subd. 33. Film production credit. (a) A taxpayer is allowed a credit against the
8.4 taxes due under this chapter equal to 15 percent of film production expenditures made in
8.5 Minnesota that are directly attributable to film production in Minnesota. For purposes of
8.6 this subdivision, "film" means a movie, documentary, or music video, whether on film
8.7 or video; and "film production" means all the activities related to (i) the preparation for
8.8 shooting, (ii) the shooting, including processing, and (iii) the editing and finishing of a
8.9 film. For purposes of this subdivision, the following is not a "film:"
8.10 (1) news, current events, or public programming or a program that includes weather
8.11 or market reports;
8.12 (2) a talk show;
8.13 (3) a production with respect to a questionnaire or contest;
8.14 (4) a sports event or sports activity;
8.15 (5) a gala representation or awards show;
8.16 (6) a finished production that solicits funds; or
8.17 (7) a production for which the production company is required under United States
8.18 Code, title 18, section 2257, to maintain records with respect to a performer portrayed
8.19 in a single media or multimedia program.
8.20 (b) Expenditures that qualify for the credit under this subdivision must be subject to
8.21 taxation in Minnesota and include:
8.22 (1) payment of wages, fringe benefits, or fees for talent, management, or labor to a
8.23 person who is a Minnesota resident for purposes of this chapter;
8.24 (2) payment to personal services corporations for the services of a performing artist,
8.25 if the performing artist receiving payments from the personal services corporation pays
8.26 Minnesota income tax; and
8.27 (3) any of the following provided by a vendor:
8.28 (i) the story and scenario to be used for a film;
8.29 (ii) set construction and operations, wardrobe, accessories, and related services;
8.30 (iii) photography, sound synchronization, lighting, and related services;
8.31 (iv) editing and related services;
8.32 (v) rental of facilities and equipment;
8.33 (vi) leasing of vehicles; and
8.34 (vii) food and lodging.
8.35 (c) If the amount of the credit under this subdivision exceeds the taxpayer's tax
8.36 liability under this chapter for the taxable year, the amount of the excess must be refunded
9.1 to the taxpayer. The amount necessary to pay the refunds is appropriated annually from
9.2 the general fund to the commissioner of revenue.
9.3 EFFECTIVE DATE.This section is effective for taxable years beginning after
9.4 December 31, 2005.
9.5 Sec. 5. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision
9.6 to read:
9.7 Subd. 34. Credit for military service. (a) An individual may take a credit against
9.8 the tax due under this chapter equal to $59 for each month or portion thereof the individual
9.9 was in active military service in a designated area after September 11, 2001.An individual
9.10 may take this credit in the taxable year the individual returns to Minnesota residency
9.11 following active military service in a designated area. If a Minnesota resident served in
9.12 a designated area between September 11, 2001, and December 31, 2005, the individual
9.13 may take this credit in the taxable year beginning after December 31, 2005, and before
9.14 January 1, 2007.
9.15 (b) If a Minnesota resident is killed while serving in active military service in a
9.16 designated area, the individual's surviving spouse or dependent child may take this credit
9.17 in the taxable year of the death. If a Minnesota resident was killed while serving in a
9.18 designated area between September 11, 2002, and December 31, 2005, the individual's
9.19 surviving spouse or dependent child may take this credit in the taxable year beginning
9.20 after December 31, 2005, and before January 1, 2007.
9.21 (c) For purposes of this section, a "designated area" means a:
9.22 (1) combat zone designated by Executive Order from the President of the United
9.23 States;
9.24 (2) qualified hazardous duty area, designated in Public Law; or
9.25 (3) location certified by the U.S. Department of Defense as eligible for combat zone
9.26 tax benefits due to the location's direct support of military operations.
9.27 (d) For purposes of this section, active military service includes active duty service
9.28 in any of the United States Armed Forces, the National Guard, or reserves.
9.29 (e) If the amount of the credit which the taxpayer is eligible to receive under this
9.30 section exceeds the taxpayer's tax liability under this chapter, the commissioner of revenue
9.31 shall refund the excess to the taxpayer.
9.32 (f) The amount necessary to pay claims for the refund provided in this section is
9.33 appropriated from the general fund to the commissioner of revenue.
10.1 EFFECTIVE DATE.This section is effective for taxable years beginning after
10.2 December 31, 2005.
10.3 Sec. 6. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision
10.4 to read:
10.5 Subd. 35. Beginning farmer management credit. (a) A taxpayer who is a
10.6 beginning farmer or livestock producer may take a credit against the tax due under
10.7 this chapter for participation in a financial management program according to section
10.8 41B.0391, subdivision 3.
10.9 (b) The credit may be claimed only after approval and certification by the Rural
10.10 Finance Authority according to section 41B.0391.
10.11 (c) The credit is limited to the liability for tax, as computed under this chapter, for
10.12 the taxable year. If the amount of the credit determined under this subdivision for any
10.13 taxable year exceeds this limitation, the excess is a beginning farmer management credit
10.14 carryover to each of the three succeeding taxable years. The entire amount of the excess
10.15 unused credit for the taxable year is carried first to the earliest of the taxable years to
10.16 which the credit may be carried and then to each successive year to which the credit may
10.17 be carried. The amount of the unused credit which may be added under this paragraph
10.18 must not exceed the taxpayer's liability for tax less the beginning farmer management
10.19 credit for the taxable year.
10.20 EFFECTIVE DATE.This section is effective for taxable years beginning after
10.21 December 31, 2006.
10.22 Sec. 7. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision
10.23 to read:
10.24 Subd. 36. Bovine testing credit. (a) An owner of cattle in Minnesota may take a
10.25 credit against the tax due under this chapter for an amount equal to one-half the expenses
10.26 incurred during the taxable year to conduct tuberculosis testing on those cattle.
10.27 (b) If the amount of credit which the taxpayer is eligible to receive under this
10.28 subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
10.29 revenue shall refund the excess to the taxpayer.
10.30 (c) The amount necessary to pay claims for the refund provided in this subdivision is
10.31 appropriated from the general fund to the commissioner of revenue.
10.32 EFFECTIVE DATE.This section is effective for taxable years beginning after
10.33 December 31, 2005.
11.1 Sec. 8. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision
11.2 to read:
11.3 Subd. 37. Dairy investment credit. (a) A dairy investment credit is allowed against
11.4 the tax due under this chapter equal to ten percent of the amount paid or incurred by the
11.5 taxpayer, on the first $500,000 of qualifying expenditures made in the qualifying period.
11.6 (b) "Qualifying expenditures" means for purposes of this subdivision the amount
11.7 spent by a person who raises dairy animals for the acquisition, construction, or
11.8 improvement of buildings or facilities; or the development of pasture; or the acquisition of
11.9 equipment; for dairy animal housing, confinement, animal feeding, production of milk
11.10 and other dairy products, and waste management, including the following, if related to
11.11 dairy animals in this state:
11.12 (1) freestall barns;
11.13 (2) fences;
11.14 (3) watering facilities;
11.15 (4) feed storage and handling equipment;
11.16 (5) milking parlors;
11.17 (6) robotic equipment;
11.18 (7) scales;
11.19 (8) milk storage and cooling facilities;
11.20 (9) bulk tanks;
11.21 (10) manure pumping and storage facilities;
11.22 (11) digesters;
11.23 (12) equipment used to produce energy.
11.24 (13) on-farm processing of milk and other dairy products; and
11.25 (14) development of pasture owned or rented by the taxpayer for the use of dairy
11.26 animals.
11.27 Qualified expenditures only include amounts that are capitalized and deducted under either
11.28 section 167 or 179 of the Internal Revenue Code in computing federal taxable income.
11.29 (c) The credit is limited to the liability for tax, as computed under this chapter,
11.30 for qualifying expenditures, other than expenditures for development of pasture, only
11.31 include amounts that are capitalized and deducted under either section 167 or 179 of the
11.32 Internal Revenue Code in computing federal taxable income. Qualifying expenditures
11.33 for development of pasture must not include land acquisition and are limited to soil
11.34 preparation expenses, seed costs, planting costs, and weed control, which are allowed once
11.35 for each acre owned or rented by the taxpayer for the use of dairy animals and developed
11.36 into pasture during the qualifying period. The amount of the unused credit which may
12.1 be added under this paragraph must not exceed the taxpayer's liability for tax less the
12.2 dairy investment credit for the taxable year.
12.3 (d) The qualifying period is that time after December 31, 2005, and before January
12.4 1, 2012.
12.5 (e) The $50,000 maximum credit applies at the entity level for partnerships, S
12.6 corporations, trusts, and estates as well as at the individual level. In the case of married
12.7 individuals, the credit is limited to $50,000 for a married couple.
12.8 EFFECTIVE DATE.This section is effective for tax years beginning after
12.9 December 31, 2005.
12.10 Sec. 9. [290.0677] CREDIT FOR HISTORIC STRUCTURE REHABILITATION.
12.11 Subdivision 1. Definitions. (a) As used in this section, the terms defined in this
12.12 subdivision have the meanings given.
12.13 (b) "Certified historic structure" means a property located in Minnesota and listed
12.14 individually on the National Register of Historic Places or a historic property designated
12.15 by either a certified local government or a heritage preservation commission created
12.16 under the National Historic Preservation Act of 1966 and whose designation is approved
12.17 by the state historic preservation officer.
12.18 (c) "Eligible property" means a certified historic structure or a structure in a certified
12.19 historic district that is offered or used for residential or business purposes.
12.20 (d) "Structure in a certified historic district" means a structure located in Minnesota
12.21 that is certified by the State Historic Preservation Office as contributing to the historic
12.22 significance of a certified historic district listed on the National Register of Historic Places
12.23 or a local district that has been certified by the United States Department of the Interior.
12.24 Subd. 2. Credit allowed. A taxpayer who incurs costs for the rehabilitation of
12.25 eligible property may take a credit against the tax imposed under this chapter in an amount
12.26 equal to 25 percent of the total costs of rehabilitation. Costs of rehabilitation include,
12.27 but are not limited to, qualified rehabilitation expenditures as defined under section
12.28 47(c)(2)(A) of the Internal Revenue Code, provided that the costs of rehabilitation must
12.29 exceed 50 percent of the total basis in the property at the time the rehabilitation activity
12.30 begins and the rehabilitation must meet standards consistent with the standards of the
12.31 Secretary of the Interior for rehabilitation as determined by the State Historic Preservation
12.32 Office of the Minnesota Historical Society.
12.33 Subd. 3. Carryback and carryforward. If the amount of the credit under
12.34 subdivision 2 exceeds the tax liability under this chapter for the year in which the cost is
12.35 incurred, the amount that exceeds the tax liability may be carried back to any of the three
13.1 preceding taxable years or carried forward to each of the ten taxable years succeeding the
13.2 taxable year in which the expense was incurred. The entire amount of the credit must
13.3 be carried to the earliest taxable year to which the amount may be carried. The unused
13.4 portion of the credit must be carried to the following taxable year.
13.5 Subd. 4. Partnerships; multiple owners; transfers. (a) Credits granted to a
13.6 partnership, a limited liability company taxed as a partnership, or multiple owners of
13.7 property shall be passed through to the partners, members, or owners, respectively, pro
13.8 rata or pursuant to an executed agreement among the partners, members, or owners
13.9 documenting an alternate distribution method.
13.10 (b) Taxpayers eligible for credits may transfer, sell, or assign the credits in whole
13.11 or part. Any assignee may use acquired credits to offset up to 100 percent of the taxes
13.12 otherwise imposed by this chapter. The assignee shall perfect such transfer by notifying
13.13 the Department of Revenue in writing within 30 calendar days following the effective
13.14 date of the transfer in such form and manner as shall be prescribed by the Department
13.15 of Revenue. The proceeds of any sale or assignment of a credit shall be exempt from
13.16 taxation under this chapter.
13.17 Subd. 5. Process. To claim the credit, the taxpayer must apply to the State Historic
13.18 Preservation Office of the Minnesota Historical Society before a historic rehabilitation
13.19 project begins. The State Historic Preservation Office shall determine the amount of
13.20 eligible rehabilitation costs and whether the rehabilitation meets the standards of the
13.21 United States Department of the Interior. The State Historic Preservation Office shall issue
13.22 certificates verifying eligibility for and the amount of credit. The taxpayer shall attach
13.23 the certificate to any income tax return on which the credit is claimed. The State Historic
13.24 Preservation Office of the Minnesota Historical Society may collect fees for applications
13.25 for the historic preservation tax credit. Fees shall be set at an amount that does not exceed
13.26 the costs of administering the tax credit program.
13.27 Subd. 6. Mortgage certificates; credit for lending institutions. (a) The taxpayer
13.28 may elect, in lieu of the credit otherwise allowed under this section, to receive a historic
13.29 rehabilitation mortgage credit certificate.
13.30 (b) For purposes of this subdivision, a historic rehabilitation mortgage credit is a
13.31 certificate that is issued to the taxpayer according to procedures prescribed by the State
13.32 Historic Preservation Office with respect to the certified rehabilitation and which meets
13.33 the requirements of this paragraph. The face amount of the certificate must be equal to
13.34 the credit that would be allowable under subdivision 2 to the taxpayer with respect to
13.35 the rehabilitation. The certificate may only be transferred by the taxpayer to a lending
14.1 institution, including a nondepository home mortgage lending institution, in connection
14.2 with a loan:
14.3 (1) that is secured by the building with respect to which the credit is issued; and
14.4 (2) the proceeds of which may not be used for any purpose other than the acquisition
14.5 or rehabilitation of the building.
14.6 (c) In exchange for the certificate, the lending institution must provide to the
14.7 taxpayer an amount equal to the face amount of the certificate discounted by the amount
14.8 by which the federal income tax liability of the lending institution is increased due to its
14.9 use of the certificate in the manner provided in this section. That amount must be applied,
14.10 as directed by the taxpayer, in whole or in part, to reduce:
14.11 (1) the principal amount of the loan;
14.12 (2) the rate of interest on the loan; or
14.13 (3) the taxpayer's cost of purchasing the building, but only in the case of a qualified
14.14 historic home that is located in a poverty-impacted area as designated by the State Historic
14.15 Preservation Office. The lending institution may take as a credit against the tax due under
14.16 this chapter an amount equal to the amount specified in the certificate. If the amount of
14.17 the discount retained by the lender exceeds the amount by which the lending institution's
14.18 federal income tax liability is increased due to the use of a mortgage credit certificate, the
14.19 excess shall be refunded to the borrower with interest at the rate prescribed by the State
14.20 Historic Preservation Office. The lending institution may carry forward all unused credits
14.21 under this subdivision until exhausted. Nothing in this subdivision requires a lending
14.22 institution to accept a historic rehabilitation certificate from any person.
14.23 EFFECTIVE DATE.This section is effective for taxable years beginning after
14.24 December 31, 2005.
14.25 Sec. 10. Minnesota Statutes 2004, section 290.10, is amended to read:
14.26 290.10 NONDEDUCTIBLE ITEMS.
14.27 Subdivision 1. Expenses, interest, and taxes.
14.28 Except as provided in section 290.17, subdivision 4, paragraph (i), in computing the
14.29 net income of a taxpayer no deduction shall in any case be allowed for expenses, interest
14.30 and taxes connected with or allocable against the production or receipt of all income not
14.31 included in the measure of the tax imposed by this chapter, except that for corporations
14.32 engaged in the business of mining or producing iron ore, the mining of which is subject to
14.33 the occupation tax imposed by section 298.01, subdivision 4, this shall not prevent the
14.34 deduction of expenses and other items to the extent that the expenses and other items are
15.1 allowable under this chapter and are not deductible, capitalizable, retainable in basis, or
15.2 taken into account by allowance or otherwise in computing the occupation tax and do not
15.3 exceed the amounts taken for federal income tax purposes for that year. Occupation
15.4 taxes imposed under chapter 298, royalty taxes imposed under chapter 299, or depletion
15.5 expenses may not be deducted under this clause.
15.6 Subd. 2. Fines, penalties, damages, and expenses. (a) No deduction from taxable
15.7 income for a trade or business expense under section 162(a) of the Internal Revenue Code
15.8 shall be allowed for any fine, penalty, damages, or expenses paid to:
15.9 (1) the government of the United States, a state, a territory or possession of the
15.10 United States, the District of Columbia, or the Commonwealth of Puerto Rico;
15.11 (2) the government of a foreign country; or
15.12 (3) a political subdivision of, or corporation or other entity serving as an agency or
15.13 instrumentality of, any government described in clause (1) or (2).
15.14 (b) For purposes of this subdivision, "fine, penalty, damages, or expenses" include,
15.15 but are not limited to, any amount:
15.16 (1) paid pursuant to a conviction or a plea of guilty or nolo contendere for any
15.17 crime in a criminal proceeding;
15.18 (2) paid as a civil penalty imposed by federal, state, or local law, including tax
15.19 penalties and interest;
15.20 (3) paid in settlement of the taxpayer's actual or potential liability for a civil or
15.21 criminal fine or penalty;
15.22 (4) forfeited as collateral posted in connection with a proceeding that could result in
15.23 imposition of a fine or penalty; or
15.24 (5) legal fees and related expenses paid or incurred in the prosecution or civil action
15.25 arising from a violation of the law imposing the fine or civil penalty, court costs assessed
15.26 against the taxpayer, or stenographic and printing charges, compensatory damages,
15.27 punitive damages, or restitution.
15.28 EFFECTIVE DATE.This section is effective for taxable years beginning after
15.29 December 31, 2005.
15.30 ARTICLE 2
15.31 SALES AND USE TAX
15.32 Section 1. Minnesota Statutes 2005 Supplement, section 270C.722, subdivision 2,
15.33 is amended to read:
16.1 Subd. 2. New permits after revocation. (a) The commissioner shall not issue a
16.2 new permit after revocation or reinstate a revoked permit unless the taxpayer applies for a
16.3 permit and provides reasonable evidence of intention to comply with the sales and use
16.4 tax laws and rules. The commissioner may require the applicant to provide security, in
16.5 addition to that authorized by section 297A.92, in an amount reasonably necessary to
16.6 ensure compliance with the sales and use tax laws and rules. If the commissioner issues
16.7 or reinstates a permit not in conformance with the requirements of this subdivision or
16.8 applicable rules, the commissioner may cancel the permit upon notice to the permit holder.
16.9 The notice must be served by first class and certified mail at the permit holder's last known
16.10 address. The cancellation shall be effective immediately, subject to the right of the permit
16.11 holder to show that the permit was issued in conformance with the requirements of this
16.12 subdivision and applicable rules. Upon such showing, the permit must be reissued.
16.13 (b) If a taxpayer has had a permit or permits revoked three times in a five-year
16.14 period, the commissioner shall not may refuse to issue a new permit or reinstate the
16.15 revoked permit until 24 months have elapsed after revocation and the taxpayer has
16.16 satisfied the conditions for reinstatement of a revoked permit or issuance of a new permit
16.17 imposed by this section and rules adopted under this section.
16.18 (c) For purposes of this subdivision, "taxpayer" means:
16.19 (1) an individual, if a revoked permit was issued to or in the name of an individual,
16.20 or a corporation or partnership, if a revoked permit was issued to or in the name of a
16.21 corporation or partnership; and
16.22 (2) an officer of a corporation, a member of a partnership, or an individual who is
16.23 liable for delinquent sales taxes, either for the entity for which the new or reinstated
16.24 permit is at issue, or for another entity for which a permit was previously revoked, or
16.25 personally as a permit holder.
16.26 Sec. 2. Minnesota Statutes 2005 Supplement, section 297A.61, subdivision 3, is
16.27 amended to read:
16.28 Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
16.29 to, each of the transactions listed in this subdivision.
16.30 (b) Sale and purchase include:
16.31 (1) any transfer of title or possession, or both, of tangible personal property, whether
16.32 absolutely or conditionally, for a consideration in money or by exchange or barter; and
16.33 (2) the leasing of or the granting of a license to use or consume, for a consideration
16.34 in money or by exchange or barter, tangible personal property, other than a manufactured
16.35 home used for residential purposes for a continuous period of 30 days or more.
17.1 (c) Sale and purchase include the production, fabrication, printing, or processing of
17.2 tangible personal property for a consideration for consumers who furnish either directly or
17.3 indirectly the materials used in the production, fabrication, printing, or processing.
17.4 (d) Sale and purchase include the preparing for a consideration of food.
17.5 Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
17.6 to, the following:
17.7 (1) prepared food sold by the retailer;
17.8 (2) soft drinks;
17.9 (3) candy;
17.10 (4) dietary supplements; and
17.11 (5) all food sold through vending machines, except milk.
17.12 (e) A sale and a purchase includes the furnishing for a consideration of electricity,
17.13 gas, water, or steam for use or consumption within this state.
17.14 (f) A sale and a purchase includes the transfer for a consideration of prewritten
17.15 computer software whether delivered electronically, by load and leave, or otherwise.
17.16 (g) A sale and a purchase includes the furnishing for a consideration of the following
17.17 services:
17.18 (1) the privilege of admission to places of amusement, recreational areas, or athletic
17.19 events, and the making available of amusement devices, tanning facilities, reducing
17.20 salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
17.21 (2) lodging and related services by a hotel, rooming house, resort, campground,
17.22 motel, or trailer camp and the granting of any similar license to use real property in a
17.23 specific facility, other than the renting or leasing of it for a continuous period of 30 days
17.24 or more under an enforceable written agreement that may not be terminated without
17.25 prior notice;
17.26 (3) nonresidential parking services, whether on a contractual, hourly, or other
17.27 periodic basis, except for parking at a meter;
17.28 (4) the granting of membership in a club, association, or other organization if:
17.29 (i) the club, association, or other organization makes available for the use of its
17.30 members sports and athletic facilities, without regard to whether a separate charge is
17.31 assessed for use of the facilities; and
17.32 (ii) use of the sports and athletic facility is not made available to the general public
17.33 on the same basis as it is made available to members.
17.34 Granting of membership means both onetime initiation fees and periodic membership
17.35 dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
18.1 squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
18.2 swimming pools; and other similar athletic or sports facilities;
18.3 (5) delivery of aggregate materials and concrete block by a third party if the delivery
18.4 would be subject to the sales tax if provided by the seller of the aggregate material or
18.5 concrete block; and
18.6 (6) services as provided in this clause:
18.7 (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
18.8 and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
18.9 drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
18.10 include services provided by coin operated facilities operated by the customer;
18.11 (ii) motor vehicle washing, waxing, and cleaning services, including services
18.12 provided by coin operated facilities operated by the customer, and rustproofing,
18.13 undercoating, and towing of motor vehicles;
18.14 (iii) building and residential cleaning, maintenance, and disinfecting and
18.15 exterminating services;
18.16 (iv) detective, security, burglar, fire alarm, and armored car services; but not
18.17 including services performed within the jurisdiction they serve by off-duty licensed peace
18.18 officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit
18.19 organization for monitoring and electronic surveillance of persons placed on in-home
18.20 detention pursuant to court order or under the direction of the Minnesota Department
18.21 of Corrections;
18.22 (v) pet grooming services;
18.23 (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
18.24 and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
18.25 plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
18.26 clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
18.27 public utility lines. Services performed under a construction contract for the installation of
18.28 shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
18.29 (vii) massages, except when provided by a licensed health care facility or
18.30 professional or upon written referral from a licensed health care facility or professional for
18.31 treatment of illness, injury, or disease; and
18.32 (viii) the furnishing of lodging, board, and care services for animals in kennels and
18.33 other similar arrangements, but excluding veterinary and horse boarding services.
18.34 In applying the provisions of this chapter, the terms "tangible personal property"
18.35 and "sales at retail" include taxable services listed in clause (6), items (i) to (vi) and
18.36 (viii), and the provision of these taxable services, unless specifically provided otherwise.
19.1 Services performed by an employee for an employer are not taxable. Services performed
19.2 by a partnership or association for another partnership or association are not taxable if
19.3 one of the entities owns or controls more than 80 percent of the voting power of the
19.4 equity interest in the other entity. Services performed between members of an affiliated
19.5 group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
19.6 group of corporations" includes those entities that would be classified as members of an
19.7 affiliated group under United States Code, title 26, section 1504, and that are eligible to
19.8 file a consolidated tax return for federal income tax purposes.
19.9 (h) A sale and a purchase includes the furnishing for a consideration of tangible
19.10 personal property or taxable services by the United States or any of its agencies or
19.11 instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
19.12 subdivisions.
19.13 (i) A sale and a purchase includes the furnishing for a consideration of
19.14 telecommunications services, including cable television services and direct satellite
19.15 services. Telecommunications services are taxed to the extent allowed under federal law.
19.16 (j) A sale and a purchase includes the furnishing for a consideration of installation if
19.17 the installation charges would be subject to the sales tax if the installation were provided
19.18 by the seller of the item being installed.
19.19 (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
19.20 to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
19.21 the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
19.22 65B.29, subdivision 1, clause (1).
19.23 EFFECTIVE DATE.This section is effective for purchases and sales made after
19.24 June 30, 2006.
19.25 Sec. 3. Minnesota Statutes 2005 Supplement, section 297A.64, subdivision 4, is
19.26 amended to read:
19.27 Subd. 4. Exemptions. (a) The tax and the fee imposed by this section do not apply
19.28 to a lease or rental of (1) a vehicle to be used by the lessee to provide a licensed taxi
19.29 service; (2) a hearse or limousine used in connection with a burial or funeral service; or
19.30 (3) a van designed or adapted primarily for transporting property rather than passengers;
19.31 or (4) a vehicle under a car sharing agreement where the lessee is a dues-paying member
19.32 of a nonprofit car sharing organization that leases vehicles only on an hourly or mileage
19.33 basis. The tax and the fee imposed under this section do not apply when the lease or rental
19.34 of a vehicle is exempt from the tax imposed under section 297A.62, subdivision 1.
20.1 (b) The lessor may elect not to charge the fee imposed in subdivision 2 if in the
20.2 previous calendar year the lessor had no more than 20 vehicles available for lease that
20.3 would have been subject to tax under this section, or no more than $50,000 in gross
20.4 receipts that would have been subject to tax under this section.
20.5 EFFECTIVE DATE.This section is effective for leases made after June 30, 2006.
20.6 Sec. 4. Minnesota Statutes 2004, section 297A.67, subdivision 18, is amended to read:
20.7 Subd. 18. Used and re-refined motor oils. Used motor oils are exempt. Re-refined
20.8 motor oils that meet American Petroleum Institute specifications for gasoline or diesel
20.9 engines are exempt.
20.10 EFFECTIVE DATE.This section is effective for sales and purchases made after
20.11 June 30, 2006.
20.12 Sec. 5. Minnesota Statutes 2004, section 297A.67, is amended by adding a subdivision
20.13 to read:
20.14 Subd. 33. Recycled copier and printing papers. Copier paper with a minimum
20.15 postconsumer recycled content of 30 percent by weight is exempt. Uncoated printing
20.16 paper with a minimum of 30 percent postconsumer recycled content by weight is exempt.
20.17 Coated printing paper with a minimum of ten percent of postconsumer recycled content by
20.18 weight is exempt.
20.19 EFFECTIVE DATE.This section is effective for sales and purchases made after
20.20 June 30, 2006.
20.21 Sec. 6. Minnesota Statutes 2004, section 297A.68, subdivision 19, is amended to read:
20.22 Subd. 19. Petroleum products. The following petroleum products are exempt:
20.23 (1) products upon which a tax has been imposed and paid under chapter 296A,
20.24 and for which no refund has been or will be allowed because the buyer used the fuel
20.25 for nonhighway use;
20.26 (2) products that are used in the improvement of agricultural land by constructing,
20.27 maintaining, and repairing drainage ditches, tile drainage systems, grass waterways, water
20.28 impoundment, and other erosion control structures;
20.29 (3) products purchased by a transit system receiving financial assistance under
20.30 section 174.24, 256B.0625, subdivision 17, or 473.384;
20.31 (4) products purchased by an ambulance service licensed under chapter 144E;
21.1 (5) products used in a passenger snowmobile, as defined in section 296A.01,
21.2 subdivision 39, for off-highway business use as part of the operations of a resort as
21.3 provided under section 296A.16, subdivision 2, clause (2); or
21.4 (6) products purchased by a state or a political subdivision of a state for use in motor
21.5 vehicles exempt from registration under section 168.012, subdivision 1, paragraph (b); or
21.6 (7) products purchased for use as fuel for a commuter rail system operating under
21.7 sections 174.80 to 174.90. The tax must be imposed and collected as if the rate under
21.8 section 297A.62, subdivision 1, applied, and then refunded in the manner provided
21.9 in section 297A.75.
21.10 EFFECTIVE DATE.This section is effective for purchases made after June 30,
21.11 2006.
21.12 Sec. 7. Minnesota Statutes 2004, section 297A.68, is amended by adding a subdivision
21.13 to read:
21.14 Subd. 42. Commuter rail materials, supplies, and equipment. Materials,
21.15 supplies, and equipment used or consumed in the construction, equipment, or improvement
21.16 of a commuter rail transportation system operated under sections 174.80 to 174.90 are
21.17 exempt. This exemption includes railroad cars, engines, and related equipment.
21.18 EFFECTIVE DATE.This section is effective for purchases made after June 30,
21.19 2006.
21.20 Sec. 8. Minnesota Statutes 2004, section 297A.70, subdivision 3, is amended to read:
21.21 Subd. 3. Sales of certain goods and services to government. (a) The following
21.22 sales to or use by the specified governments and political subdivisions of the state are
21.23 exempt:
21.24 (1) repair and replacement parts for emergency rescue vehicles, fire trucks, and
21.25 fire apparatus to a political subdivision;
21.26 (2) machinery and equipment, except for motor vehicles, used directly for mixed
21.27 municipal solid waste management services at a solid waste disposal facility as defined in
21.28 section 115A.03, subdivision 10;
21.29 (3) chore and homemaking services to a political subdivision of the state to be
21.30 provided to elderly or disabled individuals;
21.31 (4) telephone services to the Department of Administration that are used to provide
21.32 telecommunications services through the intertechnologies revolving fund;
22.1 (5) firefighter personal protective equipment as defined in paragraph (b), if purchased
22.2 or authorized by and for the use of an organized fire department, fire protection district, or
22.3 fire company regularly charged with the responsibility of providing fire protection to the
22.4 state or a political subdivision;
22.5 (6) bullet-resistant body armor that provides the wearer with ballistic and trauma
22.6 protection, if purchased by a law enforcement agency of the state or a political subdivision
22.7 of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;
22.8 (7) motor vehicles purchased or leased by political subdivisions of the state if the
22.9 vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b),
22.10 exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax
22.11 under section 297B.03, clause (12);
22.12 (8) equipment designed to process, dewater, and recycle biosolids for wastewater
22.13 treatment facilities of political subdivisions, and materials incidental to installation of
22.14 that equipment; and
22.15 (9) sales to a town of gravel and of machinery, equipment, and accessories, except
22.16 motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of
22.17 motor vehicles exempt from tax under section 297B.03, clause (10); and
22.18 (10) voting equipment purchased between January 1, 2006, and January 1, 2008,
22.19 by a county to comply with United States Code, title 42, section 15481, ("Help America
22.20 Vote Act of 2002").
22.21 (b) For purposes of this subdivision, "firefighters personal protective equipment"
22.22 means helmets, including face shields, chin straps, and neck liners; bunker coats and
22.23 pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets;
22.24 protective coveralls; goggles; self-contained breathing apparatus; canister filter masks;
22.25 personal alert safety systems; spanner belts; optical or thermal imaging search devices;
22.26 and all safety equipment required by the Occupational Safety and Health Administration.
22.27 EFFECTIVE DATE.This section is effective retroactively from January 1, 2006.
22.28 Sec. 9. Minnesota Statutes 2005 Supplement, section 297A.70, subdivision 8, is
22.29 amended to read:
22.30 Subd. 8. Regionwide public safety radio communication system; products and
22.31 services. Products and services including, but not limited to, end user equipment used
22.32 for construction, ownership, operation, maintenance, and enhancement of the backbone
22.33 system of the regionwide public safety radio communication system established under
22.34 sections 403.21 to 403.34 403.40, are exempt. For purposes of this subdivision, backbone
22.35 system is defined in section 403.21, subdivision 9. This subdivision is effective for
23.1 purchases, sales, storage, use, or consumption for use in the first and second phases of the
23.2 system, as defined in section 403.21, subdivisions 3, 10, and 11, and that portion of the
23.3 third phase of the system that is located in the southeast district of the State Patrol and
23.4 the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system
23.5 that is located in Itasca County.
23.6 Sec. 10. Minnesota Statutes 2004, section 297A.71, subdivision 23, is amended to read:
23.7 Subd. 23. Construction materials for qualified low-income housing projects. (a)
23.8 Purchases of materials and supplies used or consumed in and equipment incorporated into
23.9 the construction, improvement, or expansion of qualified low-income housing projects are
23.10 exempt from the tax imposed under this chapter if the owner of the qualified low-income
23.11 housing project is:
23.12 (1) the public housing agency or housing and redevelopment authority of a political
23.13 subdivision;
23.14 (2) an entity exercising the powers of a housing and redevelopment authority within
23.15 a political subdivision;
23.16 (3) a limited partnership in which the sole general partner is an authority under
23.17 clause (1) or an entity under clause (2);
23.18 (4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying
23.19 under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or
23.20 (5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604,
23.21 for a qualified low-income housing project described in paragraph (b), clause (5).; or
23.22 (6) a limited partnership in which either:
23.23 (i) the sole general partner is an entity under clause (4); or
23.24 (ii) the managing partner is an entity under clause (4) and makes the following
23.25 disclosures in writing to an entity under clause (1) or (2):
23.26 (A) the names of all members of the partnership;
23.27 (B) the address for service of process of each member of the partnership; and
23.28 (C) the financing plan for the low-income housing project.
23.29 This exemption applies regardless of whether the purchases are made by the owner
23.30 of the facility or a contractor.
23.31 (b) For purposes of this exemption, "qualified low-income housing project" means:
23.32 (1) a housing or mixed use project in which at least 20 percent of the residential units
23.33 are qualifying low-income rental housing units as defined in section 273.126;
23.34 (2) a federally assisted low-income housing project financed by a mortgage insured
23.35 or held by the United States Department of Housing and Urban Development under
24.1 United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United
24.2 States Code, title 42, section 1437f; the Native American Housing Assistance and
24.3 Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar
24.4 successor federal low-income housing program;
24.5 (3) a qualified low-income housing project as defined in United States Code, title
24.6 26, section 42(g), meeting all of the requirements for a low-income housing credit under
24.7 section 42 of the Internal Revenue Code regardless of whether the project actually applies
24.8 for or receives a low-income housing credit;
24.9 (4) a project that will be operated in compliance with Internal Revenue Service
24.10 revenue procedure 96-32; or
24.11 (5) a housing or mixed use project in which all or a portion of the residential units
24.12 are subject to the requirements of section 5 of the United States Housing Act of 1937.
24.13 (c) For a project, a portion of which is not used for low-income housing units,
24.14 the amount of purchases that are exempt under this subdivision must be determined by
24.15 multiplying the total purchases, as specified in paragraph (a), by the ratio of:
24.16 (1) the total gross square footage of units subject to the income limits under section
24.17 273.126, the financing for the project, the federal low-income housing tax credit, revenue
24.18 procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable
24.19 to the project; and
24.20 (2) the total gross square footage of all units in the project.
24.21 (d) The tax must be imposed and collected as if the rate under section 297A.62,
24.22 subdivision 1, applied, and then refunded in the manner provided in section 297A.75.
24.23 EFFECTIVE DATE.This section is effective for sales and purchases made after
24.24 June 30, 2006.
24.25 Sec. 11. Minnesota Statutes 2004, section 297A.71, is amended by adding a
24.26 subdivision to read:
24.27 Subd. 37. Hydroelectric generating facility. Materials and supplies used or
24.28 consumed in the construction of a 10.3 megawatt run-of-the-river hydroelectric generating
24.29 facility that meets the requirements of this subdivision are exempt. To qualify for the
24.30 exemption under this subdivision, a hydroelectric generating facility must:
24.31 (1) utilize between 12 and 16 turbine generators at a dam site existing on March
24.32 31, 1994;
24.33 (2) be located on land within 3,000 feet of a 13.8 kilovolt distribution circuit; and
24.34 (3) be eligible to receive a renewable energy production incentive payment under
24.35 section 216C.41.
25.1 EFFECTIVE DATE.This section is effective for sales and purchases made after
25.2 April 30, 2006, and on or before December 31, 2009.
25.3 Sec. 12. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 1, is
25.4 amended to read:
25.5 Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
25.6 following exempt items must be imposed and collected as if the sale were taxable and the
25.7 rate under section 297A.62, subdivision 1, applied. The exempt items include:
25.8 (1) capital equipment exempt under section 297A.68, subdivision 5;
25.9 (2) building materials for an agricultural processing facility exempt under section
25.10 297A.71, subdivision 13;
25.11 (3) building materials for mineral production facilities exempt under section
25.12 297A.71, subdivision 14;
25.13 (4) building materials for correctional facilities under section 297A.71, subdivision
25.14 3;
25.15 (5) building materials used in a residence for disabled veterans exempt under section
25.16 297A.71, subdivision 11;
25.17 (6) elevators and building materials exempt under section 297A.71, subdivision 12;
25.18 (7) building materials for the Long Lake Conservation Center exempt under section
25.19 297A.71, subdivision 17;
25.20 (8) materials, supplies, fixtures, furnishings, and equipment for a county law
25.21 enforcement and family service center under section 297A.71, subdivision 26;
25.22 (9) materials and supplies for qualified low-income housing under section 297A.71,
25.23 subdivision 23; and
25.24 (10) materials, supplies, and equipment for municipal electric utility facilities under
25.25 section 297A.71, subdivision 35; and
25.26 (11) products purchased for use as fuel for a commuter rail system exempt under
25.27 section 297A.68, subdivision 19, clause (7).
25.28 Sec. 13. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 2, is
25.29 amended to read:
25.30 Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
25.31 commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
25.32 must be paid to the applicant. Only the following persons may apply for the refund:
25.33 (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
26.1 (2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental
26.2 subdivision;
26.3 (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
26.4 provided in United States Code, title 38, chapter 21;
26.5 (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
26.6 property;
26.7 (5) for subdivision 1, clause (9), the owner of the qualified low-income housing
26.8 project; and
26.9 (6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or
26.10 a joint venture of municipal electric utilities; and
26.11 (7) for subdivision 1, clause (11), the applicant must be the purchaser of the fuel.
26.12 Sec. 14. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
26.13 chapter 291, article 8, section 22; Laws 1998, chapter 389, article 8, section 25; and Laws
26.14 2003, First Special Session chapter 21, article 8, section 11, is amended to read:
26.15
26.16
26.17 Subd. 2. Notwithstanding Minnesota Statutes, Section 477A.016, or any other law,
26.18 ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
26.19 impose an additional sales tax of up to one and one-half two and one-quarter percent on
26.20 sales transactions which are described in Minnesota Statutes 2000, Section 297A.01,
26.21 Subdivision 3, Clause (c). When the city council determines that the taxes imposed
26.22 under this subdivision and under Laws 1998, chapter 389, article 8, section 26, at a rate
26.23 of one-half of one percent have produced revenue sufficient to pay (1) the debt service
26.24 on bonds in a principal amount of $8,000,000 issued for capital improvements to the
26.25 Duluth Entertainment and Convention Center, and (2) debt service on outstanding bonds
26.26 originally issued in the principal amount of $4,970,000 to finance capital improvements to
26.27 the Great Lakes Aquarium since the imposition of the taxes at the rate of one and one-half
26.28 percent, the rate of the tax under this subdivision is reduced to by one-half of one percent.
26.29 When the city council determines that the taxes imposed under this subdivision at a rate
26.30 of three-quarters of one percent have produced revenue sufficient to pay debt service on
26.31 bonds in the principal amount of $33,700,000, plus issuance and discount costs, issued
26.32 for capital improvements for a new arena at the Duluth Entertainment and Convention
26.33 Center, the rate of tax under this subdivision shall be reduced by three-quarters of one
26.34 percent. The imposition of this tax shall not be subject to voter referendum under either
26.35 state law or city charter provisions.
27.1
27.2 EFFECTIVE DATE. This section is effective the day after the governing body of
27.3 the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
27.4 645.021, subdivisions 2 and 3.
27.5
27.6 Sec. 15. Laws 1996, chapter 471, article 2, section 29, is amended to read:
27.7 Sec. 29. CITY OF HERMANTOWN; SALES AND USE TAX.
27.8 Subdivision 1. Sales and use tax authorized. (a) Notwithstanding Minnesota
27.9 Statutes, section 477A.016, or any other contrary provision of law, ordinance, or city
27.10 charter, the city of Hermantown may, by ordinance, impose an additional sales and use tax
27.11 of up to one percent on sales transactions , storage, and use taxable pursuant to Minnesota
27.12 Statutes, chapter 297A, that occur within the city.
27.13 (b) The proceeds of the first one-half of the one percent tax imposed under this
27.14 section must be used to meet the costs of by the city for the following projects:
27.15 (1) extending a sewer interceptor line;
27.16 (2) construction of a booster pump station, reservoirs, and related improvements
27.17 to the water system; and
27.18 (3) construction of a building containing a police and fire station and an
27.19 administrative services facility.
27.20 (c) Revenues received from the remaining one-half of the one percent tax
27.21 authorized under this section must be used by the city to pay all or part of the capital and
27.22 administrative costs of developing, acquiring, constructing, and initially furnishing and
27.23 equipping the following projects:
27.24 (1) construction of a new facility or purchase of an existing facility to be used as
27.25 a public works facility;
27.26 (2) construction, signalization, and rehabilitation of primary collector roads and
27.27 commercial frontage roads, within the city; and
27.28 (3) extension of a regional trunk sewer.
27.29 (d) Authorized expenses include, but are not limited to, acquiring property; paying
27.30 construction, administrative, and operating expenses related to the development of the
27.31 projects listed in paragraph (c); paying debt service on bonds or other obligations,
27.32 including lease obligations, issued to finance construction, expansion, or improvement of
27.33 the projects listed in paragraph (c); and other compatible uses, including but not limited to,
27.34 parking, lighting, and landscaping.
28.1 Subd. 2. Referendum. (a) If the Hermantown city council proposes to impose the
28.2 sales tax authorized by this section, it shall conduct a referendum on the issue.
28.3 (b) If the Hermantown city council initially imposes the tax at a rate that is less than
28.4 one percent and proposes increasing the tax rate at a later date up to the full one percent, it
28.5 shall conduct a referendum on the increase of the tax rate.
28.6 (c) The question of imposing or increasing the tax must be submitted to the voters at
28.7 a special or general election. The tax may not be imposed unless a majority of votes cast
28.8 on the question of imposing the tax are in the affirmative. The commissioner of revenue
28.9 shall prepare a suggested form of question to be presented at the election. This subdivision
28.10 applies notwithstanding any city charter provision to the contrary.
28.11 Subd. 3. Enforcement; collection; and administration of taxes. A sales tax
28.12 imposed under this section must be reported and paid to the commissioner of revenue
28.13 with the state sales taxes, and be subject to the same penalties, interest, and enforcement
28.14 provisions. The proceeds of the tax, less refunds and a proportionate share of the cost of
28.15 collection, shall be remitted at least quarterly to the city. The commissioner shall deduct
28.16 from the proceeds remitted an amount that equals the indirect statewide cost as well as the
28.17 direct and indirect department costs necessary to administer, audit, and collect the tax.
28.18 The amount deducted shall be deposited in the state general fund.
28.19 Subd. 3a. Bonding authority. (a) The city may issue general obligation bonds
28.20 under Minnesota Statutes, chapter 475, to finance the costs in subdivision 1, paragraph (c).
28.21 The total amount of bonds issued for the projects under subdivision 1, paragraph (c), may
28.22 not exceed $13,000,000 in the aggregate. An election to approve the bonds is not required.
28.23 (b) The bonds are not included in computing any debt limitation applicable to the
28.24 city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of
28.25 and interest on the bonds is not subject to any levy limitation.
28.26 (c) The taxes authorized under this section may be pledged to and used for the
28.27 payment of the bonds and any bonds issued to refund them.
28.28 Subd. 4. Termination. The portion of the tax authorized under this section to
28.29 finance the improvements described in subdivision 1, paragraph (b), terminates at the later
28.30 of (1) ten years after the date of initial imposition of the tax, or (2) on the first day of the
28.31 second month next succeeding a determination by the city council that sufficient funds
28.32 have been received from the tax to finance the improvements described in subdivision 1,
28.33 clauses (1) to (3),and to prepay or retire at maturity the principal, interest, and premium
28.34 due on any bonds issued for the improvements on March 31, 2026. The portion of the
28.35 tax authorized to finance the improvements described in subdivision 1, paragraph (c),
28.36 terminates when the revenues raised are sufficient to finance those improvements, up to an
29.1 amount equal to $13,000,000 plus any interest, premium, and other costs associated with
29.2 the bonds issued under subdivision 3a. The city council may terminate this portion of the
29.3 tax earlier. Any funds remaining after completion of the improvements and retirement or
29.4 redemption of the bonds may be placed in the general fund of the city.
29.5 Subd. 5. Local approval; effective date. This section is effective the day after final
29.6 enactment, upon compliance with Minnesota Statutes, section 645.021, subdivision 3, by
29.7 the city of Hermantown.
29.8 EFFECTIVE DATE.This section is effective the day after the governing body of
29.9 the city of Hermantown and its chief clerical officer comply with Minnesota Statutes,
29.10 section 645.021, subdivisions 2 and 3.
29.11 Sec. 16. Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to
29.12 read:
29.13 Subdivision 1. Sales and use tax. (a) Notwithstanding Minnesota Statutes, section
29.14 297A.48, subdivision 1a,477A.016, or any other provision of law, ordinance, or city
29.15 charter, if approved by the city voters at the first municipal general election held after the
29.16 date of final enactment of this act or at a special election held November 2, 1999, the city
29.17 of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent
29.18 for the purposes specified in subdivision 3, paragraph (a). The provisions of Minnesota
29.19 Statutes, section 297A.48 297A.99, govern the imposition, administration, collection, and
29.20 enforcement of the tax authorized under this subdivision.
29.21 (b) The city of Proctor may impose by ordinance an additional sales and use tax of
29.22 up to one-half of one percent if approved by the city voters at a general election or at a
29.23 special election held for this purpose. The revenues received from this additional tax must
29.24 be used for the purposes specified in subdivision 3, paragraph (b).
29.25 EFFECTIVE DATE.This section is effective the day following final enactment,
29.26 upon compliance by the city of Proctor with Minnesota Statutes, section 645.021,
29.27 subdivision 3.
29.28 Sec. 17. Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to
29.29 read:
29.30 Subd. 3. Use of revenues. (a) Revenues received from taxes authorized by
29.31 subdivisions 1, paragraph (a), and 2 must be used by the city to pay the cost of collecting
29.32 the taxes and to pay for construction and improvement of the following city facilities:
29.33 (1) streets; and
30.1 (2) constructing and equipping the Proctor community activity center.
30.2 Authorized expenses include, but are not limited to, acquiring property, paying
30.3 construction and operating expenses related to the development of an authorized facility,
30.4 and paying debt service on bonds or other obligations, including lease obligations, issued
30.5 to finance the construction, expansion, or improvement of an authorized facility. The
30.6 capital expenses for all projects authorized under this paragraph that may be paid with
30.7 these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance
30.8 of the bonds.
30.9 (b) Revenues received from taxes authorized by subdivision 1, paragraph (b),
30.10 must be used by the city to pay the cost of collecting the taxes and for construction and
30.11 improvements of city streets, public utilities, sidewalks, bikeways, and trails.
30.12 EFFECTIVE DATE.This section is effective the day following final enactment,
30.13 upon compliance by the city of Proctor with Minnesota Statutes, section 645.021,
30.14 subdivision 3.
30.15 Sec. 18. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to
30.16 read:
30.17 Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota
30.18 Statutes, chapter 475, to finance the capital expenditure and improvement projects
30.19 described in subdivision 3. An election to approve the bonds under Minnesota Statutes,
30.20 section 475.58, is not required.
30.21 (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes,
30.22 sections 275.60 and 279.61 275.61.
30.23 (c) The bonds are not included in computing any debt limitation applicable to the
30.24 city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of
30.25 and interest on the bonds is not subject to any levy limitation.
30.26 (d) For projects described in subdivision 3, paragraph (a), the aggregate principal
30.27 amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital
30.28 expenditures and improvements, may not exceed $3,600,000, plus an amount equal to
30.29 the costs related to issuance of the bonds, including interest on the bonds. For projects
30.30 described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may
30.31 not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds,
30.32 including interest on the bonds.
30.33 (e) The sales and use and excise taxes authorized in this section may be pledged to
30.34 and used for the payment of the bonds and any bonds issued to refund them only if the
30.35 bonds and any refunding bonds are general obligations of the city.
31.1 EFFECTIVE DATE.This section is effective the day following final enactment,
31.2 upon compliance by the city of Proctor with Minnesota Statutes, section 645.021,
31.3 subdivision 3.
31.4 Sec. 19. Laws 2005, First Special Session chapter 3, article 5, section 43, subdivision
31.5 3, is amended to read:
31.6
31.7 Subd. 3. Use of revenues. Revenues received from the taxes authorized by
31.8 subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation
31.9 contained in the Minnesota Department of Transportation's Winona Intermodal study
31.10 dated June 2002 and in the resolution approved by the city council on January 3, 2005, and
31.11 all or a part of the capital costs of flood control projects approved by resolution of the city
31.12 council on February 6, 2006, including securing or paying debt service on bonds issued
31.13 under subdivision 4, for the transportation and flood control projects and to pay the cost
31.14 of collecting and administering the tax. Authorized costs include, but are not limited to,
31.15 acquiring property and paying construction and engineering costs related to the projects.
31.16
31.17 EFFECTIVE DATE.This section is effective the day after compliance by
31.18 the governing body of the city of Winona with Minnesota Statutes, section 645.021,
31.19 subdivision 3.
31.20 Sec. 20. Laws 2005, First Special Session chapter 3, article 5, section 44, subdivision
31.21 1, is amended to read:
31.22
31.23 Subdivision 1. [SALES AND USE TAX.] Notwithstanding Minnesota Statutes,
31.24 section 477A.016, or any other provision of law, ordinance, or city charter, if approved by
31.25 the voters pursuant to Minnesota Statutes, section 297A.99, at the next a general election
31.26 held before January 1, 2008, the city of Worthington may impose by ordinance a sales
31.27 and use tax of up to one-half of one percent for the purpose specified in subdivision 3.
31.28 Except as otherwise provided in this section, the provisions of Minnesota Statutes, section
31.29 297A.99, govern the imposition, administration, collection, and enforcement of the tax
31.30 authorized under this subdivision.
31.31
31.32 EFFECTIVE DATE.This section is effective the day following final enactment.
32.1 Sec. 21. CITY OF AUSTIN; TAXES AUTHORIZED.
32.2 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
32.3 477A.016, or any other provision of law, ordinance, or city charter, if approved by the
32.4 voters pursuant to Minnesota Statutes, section 297A.99, at the next general election or
32.5 special election held for that purpose before January 1, 2007, the city of Austin may
32.6 impose by ordinance a sales and use tax of up to one-half of one percent for the purpose
32.7 specified in subdivision 2. Except as otherwise provided in this section, the provisions of
32.8 Minnesota Statutes, section 297A.99, govern the imposition, administration, collection,
32.9 and enforcement of the tax authorized under this subdivision.
32.10 Subd. 2. Use of revenues. Revenues received from taxes authorized by subdivision
32.11 1 must be used by the city of Austin to pay all or part of the capital or administrative costs
32.12 of flood mitigation projects in the city of Austin. Authorized expenses include, but are not
32.13 limited to, acquiring property and paying construction and engineering expenses related
32.14 to the flood mitigation projects.
32.15 Subd. 3. Bonding authority. Pursuant to the approval of the city voters to impose
32.16 the tax authorized in subdivision 1, the city of Austin may issue without an additional
32.17 election general obligation bonds of the city in an amount not to exceed $14,000,000 to
32.18 finance the costs for the projects specified in subdivision 2. The debt represented by the
32.19 bonds must not be included in computing any debt limitations applicable to the city, and
32.20 the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal or
32.21 any interest on the bonds must not be subject to any levy limitation.
32.22 Subd. 4. Termination of tax. The tax authorized under subdivision 1 terminates at
32.23 the earlier of:
32.24 (1) 20 years after the date of initial imposition of the tax; or
32.25 (2) when the Austin City Council determines that the amount described in
32.26 subdivision 2 has been received from the tax to finance the capital and administrative costs
32.27 for the projects specified in subdivision 2, and to repay or retire at maturity, the principal,
32.28 interest, and premium due on any bonds issued for the projects under subdivision 3.
32.29 Any funds remaining after completion of the projects specified in subdivision 2, and
32.30 retirement or redemption of the bonds in subdivision 3, may be placed in the general fund
32.31 of the city. The tax imposed under subdivision 1 may expire at an earlier time if the
32.32 city so determines by ordinance.
32.33 EFFECTIVE DATE.This section is effective the day after compliance by
32.34 the governing body of the city of Austin with Minnesota Statutes, section 645.021,
32.35 subdivisions 2 and 3.
33.1 Sec. 22. CITY OF BAXTER; TAXES AUTHORIZED.
33.2 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
33.3 section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
33.4 the approval of the voters on November 2, 2004, and pursuant to Minnesota Statutes,
33.5 section 297A.99, the city of Baxter may impose by ordinance a sales and use tax of
33.6 one-half of one percent for the purposes specified in subdivision 3. The provisions of
33.7 Minnesota Statutes, section 297A.99, govern the imposition, administration, collection,
33.8 and enforcement of the tax authorized under this subdivision.
33.9 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
33.10 477A.016, or any other contrary provision of law, ordinance, or city charter, the city of
33.11 Baxter may impose by ordinance, for the purposes specified in subdivision 3, an excise tax
33.12 of up to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any
33.13 person engaged within the city of Baxter in the business of selling motor vehicles at retail.
33.14 Subd. 3. Use of revenues. Revenues received from the taxes authorized by
33.15 subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax
33.16 and to finance all or part of the costs of constructing an upgraded regional wastewater
33.17 treatment facility to serve the cities of Brainerd and Baxter, building and equipping a
33.18 fire substation, and constructing the Paul Bunyan bridge over Excelsior Road and other
33.19 improvements. Authorized costs include, but are not limited to, acquiring property and
33.20 paying construction and engineering costs related to the projects.
33.21 Subd. 4. Bonds. The city of Baxter, pursuant to the approval of the voters at the
33.22 November 2, 2004, referendum authorizing the imposition of the taxes in this section, may
33.23 issue general obligation bonds of the city, in one or more series, in the aggregate principal
33.24 amount not to exceed $15,000,000 to finance the projects listed in subdivision 3. The debt
33.25 represented by the bonds is not included in computing any debt limitations applicable to
33.26 the city, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the
33.27 principal of and interest on the bonds is not subject to any levy limitation or included in
33.28 computing or applying any levy limitation applicable to the city of Baxter.
33.29 Subd. 5. Termination of taxes. The taxes imposed under subdivisions 1 and 2
33.30 expire at the earlier of a date 12 years after the imposition of the tax or when the Baxter
33.31 City Council first determines that the amount of revenues raised from the taxes to pay for
33.32 the projects equals or exceeds $15,000,000 plus any interest on bonds issued for the
33.33 projects under subdivision 3. Any funds remaining after the expiration of the taxes and
33.34 retirement of the bonds shall be placed in a capital project fund of the city of Baxter. The
33.35 taxes imposed under subdivisions 1 and 2 may expire at an earlier time if the city of
33.36 Baxter so determines by ordinance.
34.1 EFFECTIVE DATE.This section is effective the day after compliance by
34.2 the governing body of the city of Baxter with Minnesota Statutes, section 645.021,
34.3 subdivision 3.
34.4 Sec. 23. CITY OF BRAINERD; TAXES AUTHORIZED.
34.5 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
34.6 section 477A.016, or any other provision of law, ordinance, or city charter, contingent
34.7 on the approval of the voters on the November 7, 2006, referendum, and pursuant to
34.8 Minnesota Statutes, section 297A.99, the city of Brainerd may impose by ordinance a sales
34.9 and use tax of one-half of one percent for the purposes specified in subdivision 3. The
34.10 provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
34.11 collection, and enforcement of the tax authorized under this section.
34.12 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
34.13 477A.016, or any other provision of law, ordinance, or city charter, the city of Brainerd
34.14 may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up
34.15 to $20 per motor vehicle, as defined by ordinance, purchased, or acquired from any person
34.16 engaged within the city of Brainerd in the business of selling motor vehicles at retail.
34.17 Subd. 3. Use of revenues. Revenues received from the taxes authorized by
34.18 subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax
34.19 and to finance all or part of the costs of constructing an upgraded regional wastewater
34.20 treatment facility to serve the cities of Brainerd and Baxter, water infrastructure
34.21 improvements, and trail development, contingent on approval by Brainerd voters at the
34.22 November 7, 2006, referendum. Authorized costs include, but are not limited to, acquiring
34.23 property and paying construction and engineering costs related to the projects.
34.24 Subd. 4. Bonds. The city of Brainerd, contingent on approval of the voters at the
34.25 November 7, 2006, referendum authorizing the imposition of taxes in this section, may
34.26 issue general obligation bonds of the city, in one or more series, in the aggregate principal
34.27 amount not to exceed $22,030,000 to finance the projects listed in subdivision 3. The debt
34.28 represented by the bonds is not included in computing any debt limitations applicable to
34.29 Brainerd, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the
34.30 principal and interest on the bonds is not subject to any levy limitation or included in
34.31 computing any levy limitation applicable to the city of Brainerd.
34.32 Subd. 5. Termination of taxes. The taxes imposed under subdivisions 1 and 2
34.33 expire at the earlier of a date 12 years after the imposition of the tax or when the city
34.34 council first determines that the amount of revenues raised from the taxes to pay for
34.35 projects equals or exceeds $22,030,000 plus any interest on bonds issued for the projects
35.1 under subdivision 3. Any funds remaining after the expiration of the taxes and retirement
35.2 of the bonds shall be placed in a capital project fund of the city of Brainerd. The taxes
35.3 imposed under subdivision 1 and 2 may expire at an earlier time if the city of Brainerd so
35.4 determines by ordinance.
35.5 EFFECTIVE DATE.This section is effective the day after compliance by the
35.6 governing body of the city of Brainerd with Minnesota Statutes, section 645.021,
35.7 subdivision 3.
35.8 Sec. 24. CITY OF BREEZY POINT; TAXES AUTHORIZED.
35.9 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
35.10 section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
35.11 the approval of the voters at the general election on November 7, 2006, and pursuant to
35.12 Minnesota Statutes, section 297A.99, the city of Breezy Point may impose by ordinance
35.13 a sales and use tax of one-half of one percent for the purposes specified in subdivision
35.14 3. The provisions of Minnesota Statutes, section 297A.99, govern the imposition,
35.15 administration, collection, and enforcement of the tax authorized under this subdivision.
35.16 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
35.17 477A.016, or any other contrary provision of law, ordinance, or city charter, the city of
35.18 Breezy Point may impose by ordinance, for the purposes specified in subdivision 3, an
35.19 excise tax of up to $20 per motor vehicle, as defined by ordinance, purchased or acquired
35.20 from any person engaged within the city of Breezy Point in the business of selling motor
35.21 vehicles at retail.
35.22 Subd. 3. Use of revenues. Revenues received from the taxes authorized by
35.23 subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax
35.24 and to finance sanitary sewer and storm sewer improvements as approved by the voters
35.25 at the referendum authorizing the tax. Authorized costs include, but are not limited to,
35.26 acquiring property and paying construction and engineering costs related to the projects.
35.27 Subd. 4. Bonds. The city of Breezy Point, pursuant to the approval of the voters at
35.28 the referendum authorizing the imposition of the taxes in this section, may issue general
35.29 obligation bonds of the city, in one or more series, in the aggregate principal amount not to
35.30 exceed $11,000,000 to finance the projects listed in subdivision 3. The debt represented
35.31 by the bonds is not included in computing any debt limitations applicable to the city, and
35.32 the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal of
35.33 and interest on the bonds is not subject to any levy limitation or included in computing or
35.34 applying any levy limitation applicable to the city.
36.1 Subd. 5. Termination of taxes. The taxes imposed under subdivisions 1 and 2
36.2 expire 15 years after the imposition of the tax or when the Breezy Point City Council
36.3 first determines that the amount of revenues raised from the taxes to pay for the projects
36.4 equals or exceeds $11,000,000 plus any interest on bonds issued for the projects under
36.5 subdivision 3, whichever is earlier. Any funds remaining after the expiration of the taxes
36.6 and retirement of the bonds may be placed in the general fund or in a capital project fund
36.7 of the city of Breezy Point. The taxes imposed under subdivisions 1 and 2 may expire
36.8 at an earlier time if the city so determines by ordinance.
36.9 EFFECTIVE DATE.This section is effective the day after compliance by the
36.10 governing body of the city of Breezy Point with Minnesota Statutes, section 645.021,
36.11 subdivision 3.
36.12 Sec. 25. CITY OF CLOQUET; TAXES AUTHORIZED.
36.13 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
36.14 477A.016, or any other provision of law, ordinance, or city charter, if approved by the
36.15 voters pursuant to Minnesota Statutes, section 297A.99, or at a special election held for
36.16 this purpose, the city of Cloquet may impose by ordinance a sales and use tax of up to
36.17 one-half of one percent for the purpose specified in subdivision 3. Except as provided in
36.18 this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition,
36.19 administration, collection, and enforcement of the tax authorized under this subdivision.
36.20 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
36.21 477A.016, or any other provision of law, ordinance, or city charter, the city of Cloquet
36.22 may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up
36.23 to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person
36.24 engaged within the city in the business of selling motor vehicles at retail.
36.25 Subd. 3. Use of revenues. Revenues received from taxes authorized by subdivisions
36.26 1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for the
36.27 following projects:
36.28 (1) construction and completion of park improvement projects, including
36.29 reconstruction of the Pinehurst Park swimming pool complex, St. Louis River Riverfront
36.30 improvements, Veteran's Park construction, and enhancements to the Hilltop Park soccer
36.31 complex and Braun Park baseball complex; and
36.32 (2) extension of utilities and the construction of all improvements associated with
36.33 the new Cloquet Industrial Park.
37.1 Authorized expenses include, but are not limited to, acquiring property and paying
37.2 construction expenses related to these improvements, and paying debt service on bonds or
37.3 other obligations issued to finance acquisition and construction of these improvements.
37.4 Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota
37.5 Statutes, chapter 475, to pay capital and administrative expenses for the improvements
37.6 described in subdivision 3 in an amount that does not exceed $9,000,000. An election to
37.7 approve the bonds under Minnesota Statutes, section 475.58, is not required.
37.8 (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes,
37.9 sections 275.60 and 275.61.
37.10 (c) The debt represented by the bonds is not included in computing any debt
37.11 limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
37.12 475.61, to pay principal of and interest on the bonds is not subject to any levy limitation.
37.13 Subd. 5. Termination of taxes. The taxes imposed under subdivisions 1 and 2
37.14 expire at the earlier of (1) 18 years, or (2) when the city council determines that sufficient
37.15 funds have been received from the taxes to finance the capital and administrative costs of
37.16 the improvements described in subdivision 3, plus the additional amount needed to pay
37.17 the costs related to issuance of bonds under subdivision 4, including interest on the bonds.
37.18 Any funds remaining after completion of the project and retirement or redemption of the
37.19 bonds may be placed in the general fund of the city. The taxes imposed under subdivisions
37.20 1 and 2 may expire at an earlier time if the city so determines by ordinance.
37.21 EFFECTIVE DATE.This section is effective the day after the governing body of
37.22 the city of Cloquet and its chief clerical officer timely comply with Minnesota Statutes,
37.23 section 645.021, subdivisions 2 and 3.
37.24 Sec. 26. CITY OF ELY; TAXES AUTHORIZED.
37.25 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
37.26 477A.016, or any other provision of law, ordinance, or city charter, if approved by the
37.27 voters pursuant to Minnesota Statutes, section 297A.99, the city of Ely may impose by
37.28 ordinance a sales and use tax of up to one percent for the purposes specified in subdivision
37.29 2. Except as otherwise provided in this section, the provisions of Minnesota Statutes,
37.30 section 297A.99, govern the imposition, administration, collection, and enforcement of
37.31 the tax authorized under this subdivision.
37.32 Subd. 2. Use of revenues. The proceeds of the tax imposed under this section
37.33 shall be used for the following:
37.34 (1) land acquisition and site development;
37.35 (2) installations of improvements authorized by Minnesota Statutes, chapter 429;
38.1 (3) development or redevelopment activities in the central business district of Ely;
38.2 (4) business park development;
38.3 (5) development of a small business incubator;
38.4 (6) development of a technology center; and
38.5 (7) improvements to the Ely Community Center and City Hall needed to bring them
38.6 into compliance with the Americans with Disabilities Act.
38.7 Subd. 3. Bonding authority. The city of Ely may issue bonds in an amount not
38.8 to exceed $6,000,000 under Minnesota Statutes, chapter 475, to finance the capital
38.9 expenditures and improvements authorized by the referendum under subdivision 4. An
38.10 election to approve the bonds under Minnesota Statutes, section 475.58, is not required.
38.11 The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section
38.12 275.60 or 275.61. The debt represented by the bonds must not be included in computing
38.13 any debt limitations applicable to the city, and the levy of taxes required by Minnesota
38.14 Statutes, section 475.61, to pay the principal or any interest on the bonds and must not
38.15 be subject to any levy limitation.
38.16 Subd. 4. Termination of tax. The tax authorized under subdivision 1 terminates at
38.17 the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the Ely
38.18 City Council determines that the amount of revenues raised to pay for the projects under
38.19 subdivision 2 shall meet or exceed the sum of $6,000,000, plus the amount needed to
38.20 finance the capital and administrative costs of the projects specified in subdivision 2, and
38.21 to repay or retire at maturity the principal, interest, and premium due on any bonds issued
38.22 for the projects under subdivision 3. Any funds remaining after completion of the projects
38.23 specified in subdivision 2, and retirement or redemption of the bonds in subdivision 3,
38.24 may be placed in the general fund of the city. The tax imposed under subdivision 1 may
38.25 expire at an earlier time if the city so determines by ordinance.
38.26 EFFECTIVE DATE.This section is effective the day after compliance by the
38.27 governing body of the city of Ely with Minnesota Statutes, section 645.021, subdivisions
38.28 2 and 3.
38.29 Sec. 27. CITY OF LUVERNE; TAXES AUTHORIZED.
38.30 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
38.31 section 477A.016, or any other provision of law, ordinance, or city charter, if approved
38.32 by the voters pursuant to Minnesota Statutes, section 297A.99, the city of Luverne may
38.33 impose by ordinance a sales and use tax of one-half of one percent for the purposes
38.34 specified in subdivision 3. The provisions of Minnesota Statutes, section 297A.99, govern
39.1 the imposition, administration, collection, and enforcement of the tax authorized under
39.2 this subdivision.
39.3 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
39.4 477A.016, or any other contrary provision of law, ordinance, or city charter, the city of
39.5 Luverne may impose by ordinance, for the purposes specified in subdivision 3, an excise
39.6 tax of up to $20 per motor vehicle, as defined by ordinance, purchased or acquired from
39.7 any person engaged within the city in the business of selling motor vehicles at retail.
39.8 Subd. 3. Use of revenues. Revenues received from the taxes authorized by
39.9 subdivisions 1 and 2 must be used to pay the cost of collecting and administering the
39.10 taxes and to pay all or part of the expenses for capital improvements and renovation of
39.11 the Historic Palace Theatre in an amount not to exceed $3,000,000. Authorized expenses
39.12 include, but are not limited to, acquiring property and paying construction expenses
39.13 related to the project, and paying debt service on bonds or other obligations issued to
39.14 finance the acquisition and improvements.
39.15 Subd. 4. Bonds. If the taxes under subdivisions 1 and 2 are approved by voters
39.16 pursuant to Minnesota Statutes, section 297A.99, the city of Luverne may issue, without
39.17 an additional election, bonds, in one or more series, in the aggregate principal amount
39.18 not to exceed $3,000,000 to pay capital and administrative costs of the projects listed in
39.19 subdivision 3. The debt represented by the bonds is not included in computing any debt
39.20 limitations applicable to the city, and the levy of taxes required by Minnesota Statutes,
39.21 section 475.61, to pay the principal of and interest on the bonds is not subject to any levy
39.22 limitation or included in computing or applying any levy limitation applicable to the city.
39.23 Subd. 5. Termination of taxes. The taxes imposed under subdivisions 1 and 2
39.24 expire at the later of 30 years after the imposition of the tax or when the Luverne city
39.25 council determines that sufficient funds have been received from the taxes to prepay
39.26 or retire at maturity the principal, interest, and premium due on any bonds issued for
39.27 the project under subdivision 4. Any funds remaining after expiration of the taxes and
39.28 retirement of the bonds may be placed in a capital project fund of the city. The taxes
39.29 imposed under subdivisions 1 and 2 may expire at an earlier time if the city so determines
39.30 by ordinance.
39.31 EFFECTIVE DATE.This section is effective the day after compliance by the
39.32 governing body of the city of Luverne with Minnesota Statutes, section 645.021,
39.33 subdivision 3.
39.34 Sec. 28. CITY OF MEDFORD; SALES AND USE TAX.
40.1 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
40.2 section 477A.016, or any other provision of law, ordinance, or city charter, if approved by
40.3 the voters pursuant to Minnesota Statutes, section 297A.99, at the next general election,
40.4 the city of Medford may impose by ordinance a sales and use tax of one-half of one
40.5 percent for the purposes specified in subdivision 2. Except as otherwise provided in this
40.6 section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition,
40.7 administration, collection, and enforcement of the tax authorized under this subdivision.
40.8 Subd. 2. Use of revenues. The proceeds of the tax imposed under this section must
40.9 be used by the city of Medford to pay the costs of collecting and administering the tax and
40.10 to pay up to $5,000,000 in costs to improve the city's wastewater system and wastewater
40.11 treatment plant. Authorized expenses include, but are not limited to, acquiring property
40.12 and paying construction expenses and debt service on bonds or other obligations issued to
40.13 finance acquisition and construction of the improvements.
40.14 Subd. 3. Bonding authority. (a) If the tax authorized under subdivision 1 is
40.15 approved by the voters, the city may issue bonds under Minnesota Statutes, chapter 475,
40.16 to pay the capital and administrative expenses for the improvement projects authorized
40.17 under subdivision 2. The total amount of bonds issued for the projects listed in subdivision
40.18 2 may not exceed $5,000,000 in aggregate. An election to approve the bonds under
40.19 Minnesota Statutes, section 475.58, is not required.
40.20 (b) The debt represented by the bonds is not included in computing any debt
40.21 limitation applicable to the city of Medford, and the levy of taxes under Minnesota
40.22 Statutes, section 475.61, to pay the principal of and interest on the bonds is not subject to
40.23 any levy limitation.
40.24 Subd. 4. Termination of taxes. The tax imposed under this section expires at the
40.25 earlier of (1) 20 years after the date the taxes are first imposed, or (2) when the Medford
40.26 City Council determines that the amount of revenues received from the tax equals or
40.27 exceeds the sum of $5,000,000, plus an amount equal to the costs related to the issuance of
40.28 bonds under subdivision 3, including interest on the bonds. Any funds remaining after
40.29 completion of the projects and retirement or redemption of the bonds may be placed in the
40.30 general fund of the city. The tax imposed under subdivision 1 may expire at an earlier
40.31 time if the city so determines by ordinance.
40.32 EFFECTIVE DATE.This section is effective the day after compliance by the
40.33 governing body of the city of Medford with Minnesota Statutes, section 645.021,
40.34 subdivision 3.
40.35 Sec. 29. CITY OF NORTH MANKATO; TAXES AUTHORIZED.
41.1 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
41.2 section 477A.016, or any other provision of law, ordinance, or city charter, if approved by
41.3 the voters pursuant to Minnesota Statutes, section 297A.99, the city of North Mankato
41.4 may impose by ordinance a sales and use tax of one-half of one percent for the purposes
41.5 specified in subdivision 3. The provisions of Minnesota Statutes, section 297A.99, govern
41.6 the imposition, administration, collection, and enforcement of the taxes authorized under
41.7 this subdivision.
41.8 Subd. 2. Use of revenues. Revenues received from the tax authorized by
41.9 subdivision 1 must be used to pay all or part of the capital costs of the following projects:
41.10 (1) the local share of the marked Trunk Highway 14/County State-Aid Highway
41.11 41 interchange project, including a connection to the North Port Industrial Park and trail
41.12 connections to the scenic byway along the Minnesota River, the Nicollet County Park,
41.13 existing trails in the cities of North Mankato, and Mankato and the Sakatah State Trail;
41.14 (2) development of regional parks and hiking and biking trails in Caswell Park,
41.15 Benson Park, and Spring Lake Park;
41.16 (3) riverfront redevelopment projects; and
41.17 (4) lake improvement projects.
41.18 The total amount of revenues from the tax in subdivision 1 that may be used to fund
41.19 these projects is $5,250,000 plus any associated bond costs.
41.20 Subd. 3. Bonds. (a) The city of North Mankato, if approved by voters pursuant to
41.21 Minnesota Statutes, section 297A.99, may issue bonds under Minnesota Statutes, chapter
41.22 475, to pay capital and administrative expenses for the projects described in subdivision 2,
41.23 in an amount that does not exceed $5,250,000. A separate election to approve the bonds
41.24 under Minnesota Statutes, section 475.58, is not required.
41.25 (b) The debt represented by the bonds is not included in computing any debt
41.26 limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
41.27 475.61, to pay principal and interest on the bonds is not subject to any levy limitation.
41.28 Subd. 4. Termination of taxes. The tax imposed under subdivision 1 expires at the
41.29 later of (1) 15 years, or (2) when the city council determines that the amount of revenues
41.30 received from the taxes to pay for the projects under subdivision 2 first equals or exceeds
41.31 the amount authorized to be spent for each project plus the additional amount needed to
41.32 pay the costs related to issuance of the bonds under subdivision 3, including interest
41.33 on the bonds. Any funds remaining after completion of the projects and retirement or
41.34 redemption of the bonds shall be placed in a capital facilities and equipment replacement
41.35 fund of the city. The tax imposed under section 1 may expire at an earlier time if the
41.36 city so determines by ordinance.
42.1 EFFECTIVE DATE.This section is effective the day after compliance by the
42.2 governing body of the city of North Mankato with Minnesota Statutes, section 645.021,
42.3 subdivision 3.
42.4 Sec. 30. CITY OF OWATONNA; TAXES AUTHORIZED.
42.5 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
42.6 section 477A.016, or any other provision of law, ordinance, or city charter, if approved
42.7 by the voters pursuant to Minnesota Statutes, section 297A.99, the city of Owatonna
42.8 may impose by ordinance a sales and use tax of one-half of one percent for the purposes
42.9 specified in subdivision 3. The provisions of Minnesota Statutes, section 297A.99, govern
42.10 the imposition, administration, collection, and enforcement of the taxes authorized under
42.11 this subdivision.
42.12 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
42.13 477A.016, or any other provision of law, ordinance, or city charter, the city of Owatonna
42.14 may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of
42.15 $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person
42.16 engaged within the city in the business of selling motor vehicles at retail.
42.17 Subd. 3. Use of revenues. Revenues received from the taxes authorized by
42.18 subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation
42.19 projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota
42.20 Department of Transportation, Steele County, and the city of Owatonna; regional parks
42.21 and trail developments, West Hills complex, firehall, and library improvement projects;
42.22 and a public safety radio system; as described in the city resolution No. 4-06, Exhibit
42.23 A, as adopted by the city on January 17, 2006. The amount paid from these revenues
42.24 for transportation projects may not exceed $4,450,000 plus associated bond costs. The
42.25 amount paid from these revenues for park and trail projects may not exceed $5,400,000
42.26 plus associated bond costs. The amount paid from these revenues for West Hills complex,
42.27 fire hall, and library improvement projects may not exceed $2,823,000 plus associated
42.28 bond costs. The amount paid from these revenues for a public safety radio system may not
42.29 exceed $500,000 plus associated bond costs.
42.30 Subd. 4. Bonds. (a) The city of Owatonna, if approved by voters pursuant to
42.31 Minnesota Statutes, section 297A.99, may issue bonds under Minnesota Statutes, chapter
42.32 475, to pay capital and administrative expenses for the projects described in subdivision 3,
42.33 in an amount that does not exceed $13,200,000. A separate election to approve the bonds
42.34 under Minnesota Statutes, section 475.58, is not required.
43.1 (b) The debt represented by the bonds is not included in computing any debt
43.2 limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
43.3 475.61, to pay principal and interest on the bonds, is not subject to any levy limitation.
43.4 Subd. 5. Termination of taxes. The taxes imposed under subdivisions 1 and 2
43.5 expire at the earlier of (1) ten years, or (2) when the city council determines that the
43.6 amount of revenues received from the taxes to pay for the projects under subdivision 3 first
43.7 equals or exceeds the amount authorized to be spent for each project plus the additional
43.8 amount needed to pay the costs related to issuance of the bonds under subdivision 4,
43.9 including interest on the bonds. Any funds remaining after completion of the projects
43.10 and retirement or redemption of the bonds shall be placed in a capital project fund of
43.11 the city. The taxes imposed under sections 1 and 2 may expire at an earlier time if the
43.12 city so determines by ordinance.
43.13 EFFECTIVE DATE.This section is effective the day after compliance by the
43.14 governing body of the city of Owatonna with Minnesota Statutes, section 645.021,
43.15 subdivision 3.
43.16 Sec. 31. CITY OF PARK RAPIDS.
43.17 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
43.18 section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
43.19 the approval of the city voters at the next general election or at a special election held for
43.20 this purpose, the city of Park Rapids may impose by ordinance a sales and use tax of one
43.21 percent for the purposes specified in subdivision 2. The provisions of Minnesota Statutes,
43.22 section 297A.99, govern the imposition, administration, collection, and enforcement of
43.23 the tax authorized under this subdivision.
43.24 Subd. 2. Use of revenues. Revenues received from the tax authorized by
43.25 subdivision 1 must be used for the cost of collecting and administering the tax and to
43.26 pay all or part of the capital or administrative costs of the development, acquisition,
43.27 construction, and improvement of the following projects:
43.28 (1) two-thirds of the cost of construction and operation of a community center that
43.29 may include a senior citizen center, fitness center, swimming pool, meeting rooms, indoor
43.30 track, and racquetball, basketball, and tennis courts, provided that an amount equal to
43.31 one-third of the cost of construction is received from private sources;
43.32 (2) capital improvement projects including, but not limited to, installation of water,
43.33 sewer, storm sewer, street improvements, new city water tower and well, costs related to
43.34 improvements to marked trunk highway 34; and
43.35 (3) park improvements.
44.1 Authorized expenses include, but are not limited to, acquiring property, paying
44.2 construction expenses related to the development of these facilities and improvements,
44.3 and securing and paying debt service on bonds or other obligations issued to finance
44.4 acquisition, construction, improvement, or development.
44.5 Subd. 3. Bonds. Pursuant to the approval of the city voters to impose the tax
44.6 authorized in subdivision 1, the city of Park Rapids may issue without an additional
44.7 election general obligation bonds of the city to pay capital and administrative expenses
44.8 for the acquisition, construction, improvement, and development of the projects specified
44.9 in subdivision 2. The debt represented by the bonds must not be included in computing
44.10 any debt limitations applicable to the city, and the levy of taxes required by Minnesota
44.11 Statutes, section 475.61, to pay the principal or any interest on the bonds must not be
44.12 subject to any levy limitations or be included in computing or applying any levy limitation
44.13 applicable to the city.
44.14 Subd. 4. Termination of tax. The tax imposed under subdivision 1 expires July
44.15 1, 2025. Any funds remaining after completion of the projects specified in subdivision
44.16 2 and retirement or redemption of the bonds may be placed in the general fund of the
44.17 city. The tax imposed under subdivision 1 may expire at an earlier time if the city so
44.18 determines by ordinance.
44.19 EFFECTIVE DATE.This section is effective the day after compliance by the
44.20 governing body of the city of Park Rapids with Minnesota Statutes, section 645.021,
44.21 subdivision 3.
44.22 Sec. 32. THIEF RIVER FALLS COMMUNITY CENTER.
44.23 The city of Thief River Falls may incorporate or authorize the incorporation of a
44.24 nonprofit corporation to operate a community or regional center in the city. A nonprofit
44.25 corporation incorporated under this section is exempt from payment of sales and use tax
44.26 on materials, equipment, and supplies consumed or incorporated into the construction of
44.27 the community or regional center. The exemption under this section applies to purchases
44.28 by the nonprofit corporation, a contractor, subcontractor, or builder. A contractor,
44.29 subcontractor, or builder that does not pay sales tax on purchases for construction of the
44.30 community or regional center shall not charge sales or use tax to the nonprofit corporation.
44.31 The nonprofit corporation may file a claim for refund for any sales taxes paid on the
44.32 construction costs of the community or regional center, and the commissioner of revenue
44.33 shall pay the refunded amount directly to the nonprofit corporation.
45.1 EFFECTIVE DATE.This section is effective retroactively for purchases made
45.2 on and after July 1, 2002.
45.3 ARTICLE 3
45.4 FOREIGN OPERATING CORPORATIONS
45.5 Section 1. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 6b,
45.6 is amended to read:
45.7 Subd. 6b. Foreign operating corporation. The term "foreign operating
45.8 corporation," when applied to a corporation, means a domestic corporation with the
45.9 following characteristics:
45.10 (1) it is part of a unitary business at least one member of which is taxable in this state;
45.11 (2) it is not a foreign sales corporation under section 922 of the Internal Revenue
45.12 Code, as amended through December 31, 1999, for the taxable year;
45.13 (3) either (i) the average of the percentages of its property and payrolls, including
45.14 the pro rata share of its unitary partnerships' property and payrolls, assigned to locations
45.15 outside the United States, where the United States includes the District of Columbia and
45.16 excludes the commonwealth of Puerto Rico and possessions of the United States, as
45.17 determined under section 290.191 or 290.20, is 80 percent or more; or (ii) it has in effect a
45.18 valid election under section 936 of the Internal Revenue Code; or (ii) at least 80 percent
45.19 of the gross income from all sources of the corporation in the tax year is active foreign
45.20 business income; and
45.21 (4) it has $1,000,000 of payroll and $2,000,000 of property, as determined under
45.22 section 290.191 or 290.20, that are located outside the United States. If the domestic
45.23 corporation does not have payroll as determined under section 290.191 or 290.20, but it
45.24 or its partnerships have paid $1,000,000 for work, performed directly for the domestic
45.25 corporation or the partnerships, outside the United States, then paragraph (3)(i) shall not
45.26 require payrolls to be included in the average calculation for purposes of this subdivision,
45.27 active foreign business income means gross income that is (i) derived from sources
45.28 without the United States, as defined in subtitle A, chapter 1, subchapter N, part 1, of the
45.29 Internal Revenue Code; and (ii) attributable to the active conduct of a trade or business in
45.30 a foreign country.
45.31 EFFECTIVE DATE.This section is effective for taxable years beginning after
45.32 December 31, 2005.
46.1 Sec. 2. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19c, is
46.2 amended to read:
46.3 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
46.4 there shall be added to federal taxable income:
46.5 (1) the amount of any deduction taken for federal income tax purposes for income,
46.6 excise, or franchise taxes based on net income or related minimum taxes, including but not
46.7 limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
46.8 another state, a political subdivision of another state, the District of Columbia, or any
46.9 foreign country or possession of the United States;
46.10 (2) interest not subject to federal tax upon obligations of: the United States, its
46.11 possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
46.12 state, any of its political or governmental subdivisions, any of its municipalities, or any
46.13 of its governmental agencies or instrumentalities; the District of Columbia; or Indian
46.14 tribal governments;
46.15 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
46.16 Revenue Code;
46.17 (4) the amount of any net operating loss deduction taken for federal income tax
46.18 purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
46.19 deduction under section 810 of the Internal Revenue Code;
46.20 (5) the amount of any special deductions taken for federal income tax purposes
46.21 under sections 241 to 247 of the Internal Revenue Code;
46.22 (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
46.23 clause (a), that are not subject to Minnesota income tax;
46.24 (7) the amount of any capital losses deducted for federal income tax purposes under
46.25 sections 1211 and 1212 of the Internal Revenue Code;
46.26 (8) the exempt foreign trade income of a foreign sales corporation under sections
46.27 921(a) and 291 of the Internal Revenue Code;
46.28 (9) the amount of percentage depletion deducted under sections 611 through 614 and
46.29 291 of the Internal Revenue Code;
46.30 (10) for certified pollution control facilities placed in service in a taxable year
46.31 beginning before December 31, 1986, and for which amortization deductions were elected
46.32 under section 169 of the Internal Revenue Code of 1954, as amended through December
46.33 31, 1985, the amount of the amortization deduction allowed in computing federal taxable
46.34 income for those facilities;
46.35 (11) the amount of any deemed dividend from a foreign operating corporation
46.36 determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
47.1 shall be reduced by the amount of the addition to income required by clauses (19), (20),
47.2 (21), and (22);
47.3 (12) the amount of a partner's pro rata share of net income which does not flow
47.4 through to the partner because the partnership elected to pay the tax on the income under
47.5 section 6242(a)(2) of the Internal Revenue Code;
47.6 (13) the amount of net income excluded under section 114 of the Internal Revenue
47.7 Code;
47.8 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
47.9 Revenue Code, for the taxable year when subpart F income is calculated without regard
47.10 to the provisions of section 614 of Public Law 107-147;
47.11 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
47.12 and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
47.13 has an activity that in the taxable year generates a deduction for depreciation under
47.14 section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
47.15 that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
47.16 under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
47.17 depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
47.18 amount of the loss from the activity that is not allowed in the taxable year. In succeeding
47.19 taxable years when the losses not allowed in the taxable year are allowed, the depreciation
47.20 under section 168(k)(1)(A) and (k)(4)(A) is allowed;
47.21 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
47.22 Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
47.23 Revenue Code of 1986, as amended through December 31, 2003;
47.24 (17) to the extent deducted in computing federal taxable income, the amount of the
47.25 deduction allowable under section 199 of the Internal Revenue Code; and
47.26 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
47.27 federal subsidies for prescription drug plans.;
47.28 (19) an amount equal to the interest and intangible expenses, losses, and costs paid,
47.29 accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
47.30 of a corporation that is a member of the taxpayer's unitary business group that qualifies
47.31 as a foreign operating corporation. For purposes of this clause, intangible expenses and
47.32 costs include:
47.33 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
47.34 use, maintenance or management, ownership, sale, exchange, or any other disposition of
47.35 intangible property;
48.1 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
48.2 transactions;
48.3 (iii) royalty, patent, technical, and copyright fees;
48.4 (iv) licensing fees; and
48.5 (v) other similar expenses and costs.
48.6 For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
48.7 applications, trade names, trademarks, service marks, copyrights, mask works, trade
48.8 secrets, and similar types of intangible assets.
48.9 This clause does not apply to any item of interest or intangible expenses or costs paid,
48.10 accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
48.11 to such item of income to the extent that the income to the foreign operating corporation
48.12 is income from sources without the United States as defined in subtitle A, chapter 1,
48.13 subchapter N, part 1, of the Internal Revenue Code;
48.14 (20) except as already included in the taxpayer's taxable income pursuant to clause
48.15 (19), any interest income and income generated from intangible property received or
48.16 accrued by a foreign operating corporation that is a member of the taxpayer's unitary
48.17 group. For purposes of this clause, income generated from intangible property includes:
48.18 (i) income related to the direct or indirect acquisition, use, maintenance or
48.19 management, ownership, sale, exchange, or any other disposition of intangible property;
48.20 (ii) income from factoring transactions or discounting transactions;
48.21 (iii) royalty, patent, technical, and copyright fees;
48.22 (iv) licensing fees; and
48.23 (v) other similar income.
48.24 For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
48.25 applications, trade names, trademarks, service marks, copyrights, mask works, trade
48.26 secrets, and similar types of intangible assets.
48.27 This clause does not apply to any item of interest or intangible income received or accrued
48.28 by a foreign operating corporation with respect to such item of income to the extent that
48.29 the income is income from sources without the United States as defined in subtitle A,
48.30 chapter 1, subchapter N, part 1, of the Internal Revenue Code;
48.31 (21) the dividends attributable to the income of a foreign operating corporation that
48.32 is a member of the taxpayer's unitary group in an amount that is equal to the dividends
48.33 paid deduction of a real estate investment trust under section 561(a) of the Internal
48.34 Revenue Code for amounts paid or accrued by the real estate investment trust to the
48.35 foreign operating corporation; and
49.1 (22) the income of a foreign operating corporation that is a member of the taxpayer's
49.2 unitary group in an amount that is equal to gains derived from the sale of real or personal
49.3 property located in the United States.
49.4 EFFECTIVE DATE.This section is effective for taxable years beginning after
49.5 December 31, 2005.
49.6 Sec. 3. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19d, is
49.7 amended to read:
49.8 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
49.9 corporations, there shall be subtracted from federal taxable income after the increases
49.10 provided in subdivision 19c:
49.11 (1) the amount of foreign dividend gross-up added to gross income for federal
49.12 income tax purposes under section 78 of the Internal Revenue Code;
49.13 (2) the amount of salary expense not allowed for federal income tax purposes due to
49.14 claiming the federal jobs credit under section 51 of the Internal Revenue Code;
49.15 (3) any dividend (not including any distribution in liquidation) paid within the
49.16 taxable year by a national or state bank to the United States, or to any instrumentality of
49.17 the United States exempt from federal income taxes, on the preferred stock of the bank
49.18 owned by the United States or the instrumentality;
49.19 (4) amounts disallowed for intangible drilling costs due to differences between
49.20 this chapter and the Internal Revenue Code in taxable years beginning before January
49.21 1, 1987, as follows:
49.22 (i) to the extent the disallowed costs are represented by physical property, an amount
49.23 equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
49.24 subdivision 7, subject to the modifications contained in subdivision 19e; and
49.25 (ii) to the extent the disallowed costs are not represented by physical property, an
49.26 amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
49.27 290.09, subdivision 8;
49.28 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
49.29 Internal Revenue Code, except that:
49.30 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
49.31 capital loss carrybacks shall not be allowed;
49.32 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
49.33 a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
49.34 allowed;
50.1 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
50.2 capital loss carryback to each of the three taxable years preceding the loss year, subject to
50.3 the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
50.4 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
50.5 a capital loss carryover to each of the five taxable years succeeding the loss year to the
50.6 extent such loss was not used in a prior taxable year and subject to the provisions of
50.7 Minnesota Statutes 1986, section 290.16, shall be allowed;
50.8 (6) an amount for interest and expenses relating to income not taxable for federal
50.9 income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
50.10 expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
50.11 291 of the Internal Revenue Code in computing federal taxable income;
50.12 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
50.13 which percentage depletion was disallowed pursuant to subdivision 19c, clause (11), a
50.14 reasonable allowance for depletion based on actual cost. In the case of leases the deduction
50.15 must be apportioned between the lessor and lessee in accordance with rules prescribed
50.16 by the commissioner. In the case of property held in trust, the allowable deduction must
50.17 be apportioned between the income beneficiaries and the trustee in accordance with the
50.18 pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
50.19 of the trust's income allocable to each;
50.20 (8) for certified pollution control facilities placed in service in a taxable year
50.21 beginning before December 31, 1986, and for which amortization deductions were elected
50.22 under section 169 of the Internal Revenue Code of 1954, as amended through December
50.23 31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
50.24 1986, section 290.09, subdivision 7;
50.25 (9) amounts included in federal taxable income that are due to refunds of income,
50.26 excise, or franchise taxes based on net income or related minimum taxes paid by the
50.27 corporation to Minnesota, another state, a political subdivision of another state, the
50.28 District of Columbia, or a foreign country or possession of the United States to the extent
50.29 that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
50.30 clause (1), in a prior taxable year;
50.31 (10) 80 percent of royalties, fees, or other like income accrued or received from a
50.32 foreign operating corporation or a foreign corporation which is part of the same unitary
50.33 business as the receiving corporation, unless the income resulting from such payments or
50.34 accruals is income from sources within the United States as defined in subtitle A, chapter
50.35 1, subchapter N, part 1, of the Internal Revenue Code;
51.1 (11) income or gains from the business of mining as defined in section 290.05,
51.2 subdivision 1, clause (a), that are not subject to Minnesota franchise tax;
51.3 (12) the amount of handicap access expenditures in the taxable year which are not
51.4 allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
51.5 (13) the amount of qualified research expenses not allowed for federal income tax
51.6 purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
51.7 the amount exceeds the amount of the credit allowed under section 290.068;
51.8 (14) the amount of salary expenses not allowed for federal income tax purposes due
51.9 to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
51.10 Code;
51.11 (15) the amount of any refund of environmental taxes paid under section 59A of the
51.12 Internal Revenue Code;
51.13 (16) for taxable years beginning before January 1, 2008, the amount of the federal
51.14 small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
51.15 which is included in gross income under section 87 of the Internal Revenue Code;
51.16 (17) for a corporation whose foreign sales corporation, as defined in section 922
51.17 of the Internal Revenue Code, constituted a foreign operating corporation during any
51.18 taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
51.19 claiming the deduction under section 290.21, subdivision 4, for income received from
51.20 the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
51.21 income excluded under section 114 of the Internal Revenue Code, provided the income is
51.22 not income of a foreign operating company;
51.23 (18) any decrease in subpart F income, as defined in section 952(a) of the Internal
51.24 Revenue Code, for the taxable year when subpart F income is calculated without regard
51.25 to the provisions of section 614 of Public Law 107-147;
51.26 (19) in each of the five tax years immediately following the tax year in which an
51.27 addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
51.28 the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
51.29 amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
51.30 resulting delayed depreciation cannot be less than zero; and
51.31 (20) in each of the five tax years immediately following the tax year in which an
51.32 addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the
51.33 amount of the addition.
51.34 EFFECTIVE DATE.This section is effective for taxable years beginning after
51.35 December 31, 2005.
52.1 Sec. 4. Minnesota Statutes 2004, section 290.34, subdivision 1, is amended to read:
52.2 Subdivision 1. Business conducted in such a way as to create losses or improper
52.3 taxable net income. (a) When any corporation liable to taxation under this chapter
52.4 conducts its business in such a manner as, directly or indirectly, to benefit its members
52.5 or stockholders or any person or corporation interested in such business or to reduce the
52.6 income attributable to this state by selling the commodities or services in which it deals
52.7 at less than the fair price which might be obtained therefor, or buying such commodities
52.8 or services at more than the fair price for which they might have been obtained, or when
52.9 any corporation, a substantial portion of whose shares is owned directly or indirectly by
52.10 another corporation, deals in the commodities or services of the latter corporation in such
52.11 a manner as to create a loss or improper net income or to reduce the taxable net income
52.12 attributable to this state, the commissioner of revenue may determine the amount of its
52.13 income so as to reflect what would have been its reasonable taxable net income but for the
52.14 arrangements causing the understatement of its taxable net income or the overstatement of
52.15 its losses, having regard to the fair profits which, but for any agreement, arrangement, or
52.16 understanding, might have been or could have been obtained from such business.
52.17 (b) When any corporation engages in a transaction or series of transactions whose
52.18 primary business purpose is the avoidance of tax, or engages in a transaction or series of
52.19 transactions without economic substance, that transaction or series of transactions shall be
52.20 disregarded and the commissioner shall determine taxable net income without regard for
52.21 any such transaction or series of transactions.
52.22 Sec. 5. INTENT OF LEGISLATURE.
52.23 Section 4 does not change Minnesota law, but merely clarifies the legislature's
52.24 intention with respect to transactions without economic substance or business purpose.
52.25 ARTICLE 4
52.26 PROPERTY TAXES
52.27 Section 1. Minnesota Statutes 2004, section 116J.993, subdivision 3, is amended to
52.28 read:
52.29 Subd. 3. Business subsidy. "Business subsidy" or "subsidy" means a state or local
52.30 government agency grant, contribution of personal property, real property, infrastructure,
52.31 the principal amount of a loan at rates below those commercially available to the recipient,
52.32 any reduction or deferral of any tax or any fee, any guarantee of any payment under any
52.33 loan, lease, or other obligation, or any preferential use of government facilities given
52.34 to a business.
53.1 The following forms of financial assistance are not a business subsidy:
53.2 (1) a business subsidy of less than $25,000;
53.3 (2) assistance that is generally available to all businesses or to a general class of
53.4 similar businesses, such as a line of business, size, location, or similar general criteria;
53.5 (3) public improvements to buildings or lands owned by the state or local
53.6 government that serve a public purpose and do not principally benefit a single business or
53.7 defined group of businesses at the time the improvements are made;
53.8 (4) redevelopment property polluted by contaminants as defined in section 116J.552,
53.9 subdivision 3;
53.10 (5) assistance provided for the sole purpose of renovating old or decaying building
53.11 stock or bringing it up to code and assistance provided for designated historic preservation
53.12 districts, provided that the assistance is equal to or less than 50 percent of the total cost;
53.13 (6) assistance to provide job readiness and training services if the sole purpose of
53.14 the assistance is to provide those services;
53.15 (7) assistance for housing;
53.16 (8) assistance for pollution control or abatement, including assistance for a tax
53.17 increment financing hazardous substance subdistrict as defined under section 469.174,
53.18 subdivision 23;
53.19 (9) assistance for energy conservation;
53.20 (10) tax reductions resulting from conformity with federal tax law;
53.21 (11) workers' compensation and unemployment insurance;
53.22 (12) benefits derived from regulation;
53.23 (13) indirect benefits derived from assistance to educational institutions;
53.24 (14) funds from bonds allocated under chapter 474A, bonds issued to refund
53.25 outstanding bonds, and bonds issued for the benefit of an organization described in section
53.26 501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1999;
53.27 (15) assistance for a collaboration between a Minnesota higher education institution
53.28 and a business;
53.29 (16) assistance for a tax increment financing soils condition district as defined under
53.30 section 469.174, subdivision 19;
53.31 (17) redevelopment when the recipient's investment in the purchase of the site
53.32 and in site preparation is 70 percent or more of the assessor's current year's estimated
53.33 market value;
53.34 (18) general changes in tax increment financing law and other general tax law
53.35 changes of a principally technical nature;
54.1 (19) federal assistance until the assistance has been repaid to, and reinvested by, the
54.2 state or local government agency;
54.3 (20) funds from dock and wharf bonds issued by a seaway port authority;
54.4 (21) business loans and loan guarantees of $75,000 or less; and
54.5 (22) federal loan funds provided through the United States Department of
54.6 Commerce, Economic Development Administration; and
54.7 (23) property tax abatements granted under section 469.1813 to property that is
54.8 subject to valuation under Minnesota Rules, chapter 8100.
54.9 Sec. 2. Minnesota Statutes 2004, section 123B.53, subdivision 5, is amended to read:
54.10 Subd. 5. Equalized debt service levy. (a) The equalized debt service levy of a
54.11 district equals the sum of the first tier equalized debt service levy and the second tier
54.12 equalized debt service levy.
54.13 (b) A district's first tier equalized debt service levy equals the district's first tier debt
54.14 service equalization revenue times the lesser of one or the ratio of:
54.15 (1) the quotient derived by dividing the adjusted net tax capacity of the district for
54.16 the year before the year the levy is certified by the adjusted pupil units in the district for
54.17 the school year ending in the year prior to the year the levy is certified; to
54.18 (2) $3,200 $5,000.
54.19 (c) A district's second tier equalized debt service levy equals the district's second
54.20 tier debt service equalization revenue times the lesser of one or the ratio of:
54.21 (1) the quotient derived by dividing the adjusted net tax capacity of the district for
54.22 the year before the year the levy is certified by the adjusted pupil units in the district for
54.23 the school year ending in the year prior to the year the levy is certified; to
54.24 (2) $8,000.
54.25 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2008
54.26 and later.
54.27 Sec. 3. Minnesota Statutes 2005 Supplement, section 123B.54, is amended to read:
54.28 123B.54 DEBT SERVICE APPROPRIATION.
54.29 (a) $21,624,000 $22,701,000 in fiscal year 2008 and $20,403,000 $22,269,000 in
54.30 fiscal year 2009 and later are appropriated from the general fund to the commissioner of
54.31 education for payment of debt service equalization aid under section 123B.53.
54.32 (b) The appropriations in paragraph (a) must be reduced by the amount of any
54.33 money specifically appropriated for the same purpose in any year from any state fund.
55.1 Sec. 4. Minnesota Statutes 2005 Supplement, section 126C.10, subdivision 13a,
55.2 is amended to read:
55.3 Subd. 13a. Operating capital levy. To obtain operating capital revenue for fiscal
55.4 year 2007 and later, a district may levy an amount not more than the product of its
55.5 operating capital revenue for the fiscal year times the lesser of one or the ratio of its
55.6 adjusted net tax capacity per adjusted marginal cost pupil unit to the operating capital
55.7 equalizing factor. The operating capital equalizing factor equals $22,222 for fiscal year
55.8 2006, and $10,700 for fiscal year 2007, and $22,222 for fiscal year 2008 and later.
55.9 EFFECTIVE DATE.This section is effective for revenue for fiscal year 2008
55.10 and later.
55.11 Sec. 5. Minnesota Statutes 2004, section 144F.01, subdivision 4, is amended to read:
55.12 Subd. 4. Property tax levy authority. The district's board may levy a tax on
55.13 the taxable real and personal property in the district. The ad valorem tax levy may not
55.14 exceed 0.048 percent of the taxable market value of the district or $250,000 $400,000,
55.15 whichever is less. The proceeds of the levy must be used as provided in subdivision 5.
55.16 The board shall certify the levy at the times as provided under section 275.07. The board
55.17 shall provide the county with whatever information is necessary to identify the property
55.18 that is located within the district. If the boundaries include a part of a parcel, the entire
55.19 parcel shall be included in the district. The county auditors must spread, collect, and
55.20 distribute the proceeds of the tax at the same time and in the same manner as provided by
55.21 law for all other property taxes.
55.22 Sec. 6. Minnesota Statutes 2004, section 216B.2424, subdivision 5, is amended to read:
55.23 Subd. 5. Mandate. (a) A public utility, as defined in section 216B.02, subdivision 4,
55.24 that operates a nuclear-powered electric generating plant within this state must construct
55.25 and operate, purchase, or contract to construct and operate (1) by December 31, 1998,
55.26 50 megawatts of electric energy installed capacity generated by farm-grown closed-loop
55.27 biomass scheduled to be operational by December 31, 2001; and (2) by December 31,
55.28 1998, an additional 75 megawatts of installed capacity so generated scheduled to be
55.29 operational by December 31, 2002.
55.30 (b) Of the 125 megawatts of biomass electricity installed capacity required under
55.31 this subdivision, no more than 55 megawatts of this capacity may be provided by a facility
55.32 that uses poultry litter as its primary fuel source and any such facility:
55.33 (1) need not use biomass that complies with the definition in subdivision 1;
56.1 (2) must enter into a contract with the public utility for such capacity, that has an
56.2 average purchase price per megawatt hour over the life of the contract that is equal to or
56.3 less than the average purchase price per megawatt hour over the life of the contract in
56.4 contracts approved by the Public Utilities Commission before April 1, 2000, to satisfy
56.5 the mandate of this section, and file that contract with the Public Utilities Commission
56.6 prior to September 1, 2000; and
56.7 (3) must schedule such capacity to be operational by December 31, 2002.
56.8 (c) Of the total 125 megawatts of biomass electric energy installed capacity required
56.9 under this section, no more than 75 megawatts may be provided by a single project.
56.10 (d) Of the 75 megawatts of biomass electric energy installed capacity required under
56.11 paragraph (a), clause (2), no more than 33 megawatts of this capacity may be provided by
56.12 a St. Paul district heating and cooling system cogeneration facility utilizing waste wood
56.13 as a primary fuel source. The St. Paul district heating and cooling system cogeneration
56.14 facility need not use biomass that complies with the definition in subdivision 1.
56.15 (e) The public utility must accept and consider on an equal basis with other biomass
56.16 proposals:
56.17 (1) a proposal to satisfy the requirements of this section that includes a project that
56.18 exceeds the megawatt capacity requirements of either paragraph (a), clause (1) or (2), and
56.19 that proposes to sell the excess capacity to the public utility or to other purchasers; and
56.20 (2) a proposal for a new facility to satisfy more than ten but not more than 20
56.21 megawatts of the electrical generation requirements by a small business-sponsored
56.22 independent power producer facility to be located within the northern quarter of the state,
56.23 which means the area located north of Constitutional Route No. 8 as described in section
56.24 161.114, subdivision 2, and that utilizes biomass residue wood, sawdust, bark, chipped
56.25 wood, or brush to generate electricity. A facility described in this clause is not required
56.26 to utilize biomass complying with the definition in subdivision 1, but must be under
56.27 construction by December 31, 2005.
56.28 (f) If a public utility files a contract with the commission for electric energy installed
56.29 capacity that uses poultry litter as its primary fuel source, the commission must do a
56.30 preliminary review of the contract to determine if it meets the purchase price criteria
56.31 provided in paragraph (b), clause (2), of this subdivision. The commission shall perform
56.32 its review and advise the parties of its determination within 30 days of filing of such a
56.33 contract by a public utility. A public utility may submit by September 1, 2000, a revised
56.34 contract to address the commission's preliminary determination.
57.1 (g) The commission shall finally approve, modify, or disapprove no later than July
57.2 1, 2001, all contracts submitted by a public utility as of September 1, 2000, to meet the
57.3 mandate set forth in this subdivision.
57.4 (h) If a public utility subject to this section exercises an option to increase the
57.5 generating capacity of a project in a contract approved by the commission prior to April
57.6 25, 2000, to satisfy the mandate in this subdivision, the public utility must notify the
57.7 commission by September 1, 2000, that it has exercised the option and include in the
57.8 notice the amount of additional megawatts to be generated under the option exercised.
57.9 Any review by the commission of the project after exercise of such an option shall be
57.10 based on the same criteria used to review the existing contract.
57.11 (i) A facility specified in this subdivision qualifies for exemption from property
57.12 taxation under section 272.02, subdivision 43 45.
57.13 EFFECTIVE DATE.This section is effective for property taxes levied in 2006,
57.14 payable in 2007, and thereafter.
57.15 Sec. 7. Minnesota Statutes 2004, section 272.02, subdivision 12, is amended to read:
57.16 Subd. 12. Native prairie. Native prairie lands are exempt. The commissioner of the
57.17 Department of natural resources shall determine lands in the state which are native prairie
57.18 and shall notify the county assessor of each county in which the lands are located. Pasture
57.19 land used for livestock grazing purposes shall not be considered native prairie for the
57.20 purposes of this subdivision unless the pasture is covered by a grazing plan approved by
57.21 the commissioner of natural resources. Upon receipt of an application for the exemption
57.22 provided in this subdivision for lands for which the assessor has no determination from
57.23 the commissioner of natural resources, the assessor shall refer the application to the
57.24 commissioner of natural resources who shall determine within 30 180 days whether the
57.25 land is native prairie and notify the county assessor of the decision. Exemption of native
57.26 prairie pursuant to this subdivision shall not grant the public any additional or greater right
57.27 of access to the native prairie or diminish any right of ownership to it.
57.28 EFFECTIVE DATE.This section is effective for taxes levied in 2006, payable
57.29 in 2007, and thereafter.
57.30 Sec. 8. Minnesota Statutes 2004, section 272.02, subdivision 45, is amended to read:
57.31 Subd. 45. Biomass electrical generation facility; personal property.
57.32 Notwithstanding subdivision 9, clause (a), attached machinery and other personal property
58.1 which is part of an electrical generating facility that meets the requirements of this
58.2 subdivision is exempt. At the time of construction, the facility must:
58.3 (1) be designed to utilize biomass as established in section 216B.2424 as a primary
58.4 fuel source; and
58.5 (2) be constructed for the purpose of generating power at the facility that will be sold
58.6 pursuant to a contract approved by the Public Utilities Commission in accordance with
58.7 the biomass mandate imposed under section 216B.2424.
58.8 Construction of the facility must be commenced after January 1, 2000, and before
58.9 December 31, 2002 2005. Property eligible for this exemption does not include electric
58.10 transmission lines and interconnections or gas pipelines and interconnections appurtenant
58.11 to the property or facility.
58.12 EFFECTIVE DATE.This section is effective for taxes levied in 2006, payable
58.13 in 2007, and thereafter.
58.14 Sec. 9. Minnesota Statutes 2004, section 272.02, subdivision 54, is amended to read:
58.15 Subd. 54. Small biomass electric generation facility; personal property. (a)
58.16 Subject to paragraph (b), notwithstanding subdivision 9, clause (a), attached machinery
58.17 and other personal property which is part of an electrical generating facility that meets the
58.18 requirements of this subdivision is exempt. At the time of construction the facility must:
58.19 (1) have a generation capacity of less than 25 megawatts;
58.20 (2) provide process heating needs in addition to electrical generation; and
58.21 (3) utilize agricultural by-products from the malting process and other biomass
58.22 fuels as its primary fuel source.
58.23 Construction of the facility must be commenced after January 1, 2002, and before
58.24 January 1, 2006 June 30, 2007. Property eligible for this exemption does not include
58.25 electric transmission lines and interconnections or gas pipelines and interconnections
58.26 appurtenant to the property or facility.
58.27 (b) The exemption under this subdivision is contingent on approval by the governing
58.28 bodies of the municipality and county in which the electric generation facility is located.
58.29 EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable
58.30 in 2009, and thereafter.
58.31 Sec. 10. Minnesota Statutes 2004, section 272.02, subdivision 55, is amended to read:
58.32 Subd. 55. Electric generation facility; personal property. Notwithstanding
58.33 subdivision 9, clause (a), attached machinery and other personal property which is part of
59.1 an electric generating facility that meets the requirements of this subdivision is exempt. At
59.2 the time of construction, the facility must be sited on an energy park that (i) is located on
59.3 an active mining site, or on a former mining or industrial site where mining or industrial
59.4 operations have terminated be designated as an innovative energy project as defined in
59.5 section 216B.1694, (ii) is be within a tax relief area as defined in section 273.134, (iii)
59.6 has on-site have access to existing railroad infrastructure within less than three miles, (iv)
59.7 has direct rail access to a Great Lakes port, (v) has sufficient private water resources
59.8 on site, and (vi) is have received by resolution approval from the governing body of
59.9 the county and township or city in which the proposed facility is to be located for the
59.10 exemption of personal property under this subdivision, and (v) be designed to host at
59.11 least 500 megawatts of electrical generation.
59.12 Construction of the first 250 500 megawatts of the facility must be commenced
59.13 after January 1, 2002 2006, and before January 1, 2005 2010. Construction of up to an
59.14 additional 750 megawatts of generation must be commenced before January 1, 2010
59.15 2015. Property eligible for this exemption does not include electric transmission lines and
59.16 interconnections or gas pipelines and interconnections appurtenant to the property or the
59.17 facility. To qualify for an exemption under this subdivision, the owner of the electric
59.18 generation facility must have an agreement with the host county, township or city, and
59.19 school district, for payment in lieu of personal property taxes to the host county, township
59.20 or city, and school district.
59.21 EFFECTIVE DATE.This section is effective the day following final enactment.
59.22 Sec. 11. Minnesota Statutes 2004, section 272.02, is amended by adding a subdivision
59.23 to read:
59.24 Subd. 84. Electric generation facility; personal property. Notwithstanding
59.25 subdivision 9, clause (a), attached machinery and other personal property which is part
59.26 of a 10.3 megawatt run-of-the-river hydroelectric generation facility and that meets the
59.27 requirements of this subdivision is exempt. At the time of construction, the facility must:
59.28 (1) utilize between 12 and 16 turbine generators at a dam site existing on March
59.29 31, 1994;
59.30 (2) be located on land within 3,000 feet of a 13.8 kilovolt distribution substation; and
59.31 (3) be eligible to receive a renewable energy production incentive payment under
59.32 section 216C.41.
59.33 Construction of the facility must be commenced after April 30, 2006, and
59.34 before January 1, 2009. Property eligible for this exemption does not include electric
60.1 transmission lines and interconnections or gas pipelines and interconnections appurtenant
60.2 to the property or the facility.
60.3 EFFECTIVE DATE.This section is effective for property taxes levied in 2006,
60.4 payable in 2007, and thereafter.
60.5 Sec. 12. Minnesota Statutes 2004, section 273.11, is amended by adding a subdivision
60.6 to read:
60.7 Subd. 23. First tier valuation limit; agricultural homestead property. (a)
60.8 Beginning with assessment year 2006, the commissioner of revenue shall annually certify
60.9 the first tier limit for agricultural homestead property as the product of (i) $600,000, and
60.10 (ii) the ratio of the statewide average taxable market value of agricultural property per acre
60.11 of deeded farm land in the preceding assessment year to the statewide average taxable
60.12 market value of agricultural property per acre of deeded farm land for assessment year
60.13 1999. The limit shall be rounded to the nearest $10,000.
60.14 (b) For the purposes of this subdivision, "agricultural property" means all class 2
60.15 property under section 273.13, subdivision 23, except for (1) timberland, (2) a landing
60.16 area or public access area of a privately owned public use airport, and (3) property
60.17 consisting of the house, garage and immediately surrounding one acre of land of an
60.18 agricultural homestead.
60.19 (c) The commissioner shall certify the limit by January 2 of each assessment year,
60.20 except that for assessment year 2006 the commissioner shall certify the limit by June
60.21 1, 2006.
60.22 EFFECTIVE DATE.This section is effective for assessment year 2006 and
60.23 thereafter.
60.24 Sec. 13. [273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY
60.25 TAX LAW.
60.26 Subdivision 1. Requirements. Real estate is entitled to valuation under this section
60.27 only if all of the following requirements are met:
60.28 (1) the property is classified 1a, 1b, 2a, or 2b property under section 273.13,
60.29 subdivisions 22 and 23;
60.30 (2) the property is at least ten contiguous acres, when the application is filed under
60.31 subdivision 2;
60.32 (3) the owner has filed a completed application for deferment as specified in
60.33 subdivision 2 with the county assessor in the county in which the property is located;
61.1 (4) there are no delinquent taxes on the property; and
61.2 (5) a covenant on the land restricts its use as provided in subdivision 2, clause (4).
61.3 Subd. 2. Application. Application for valuation deferment under this section
61.4 must be filed by May 1 of the assessment year. Any application filed and granted
61.5 continues in effect for subsequent years until the property no longer qualifies, provided
61.6 that supplemental affidavits under subdivision 6 are timely filed. The application must
61.7 be filed with the assessor of the county in which the real property is located on such
61.8 form as may be prescribed by the commissioner of revenue. The application must be
61.9 executed and acknowledged in the manner required by law to execute and acknowledge a
61.10 deed and must contain at least the following information and any other information the
61.11 commissioner deems necessary:
61.12 (1) the legal description of the area;
61.13 (2) the name and address of owner;
61.14 (3) a copy of the affidavit filed under section 273.13, subdivision 23, paragraph (h),
61.15 in the case of property classified class 2b, clause (5); or in the case of property classified
61.16 1a, 1b, 2a, and 2b, clauses (1) to (3), the application must include a similar document with
61.17 the same information as contained in the affidavit under section 273.13, subdivision 23,
61.18 paragraph (h); and
61.19 (4) a statement of proof from the owner that the land contains a restrictive covenant
61.20 limiting its use for the property's surface to that which exists on the date of the application
61.21 and limiting its future use to the preparation and removal of the aggregate commercial
61.22 deposit under its surface.
61.23 To qualify under this clause, the covenant must be binding on the owner or the
61.24 owner's successor or assignee, and run with the land, except as provided in subdivision 4
61.25 allowing for the cancellation of the covenant under certain conditions.
61.26 Subd. 3. Determination of value. Upon timely application by the owner as
61.27 provided in subdivision 2, notwithstanding sections 272.03, subdivision 8, and 273.11,
61.28 the value of any qualifying land described in subdivision 2 must be valued as if it were
61.29 agricultural property, using a per acre valuation equal to the current year's per acre
61.30 valuation of agricultural land in the county. The assessor shall not consider any additional
61.31 value resulting from potential alternative and future uses of the property. The buildings
61.32 located on the land shall be valued by the assessor in the normal manner.
61.33 Subd. 4. Cancellation of covenant. The covenant required under subdivision
61.34 2 may be canceled in two ways:
62.1 (1) by the owner beginning with the next subsequent assessment year provided
62.2 that the additional taxes as determined under subdivision 5 are paid by the owner at the
62.3 time of cancellation; and
62.4 (2) by the city or town in which the property is located beginning with the next
62.5 subsequent assessment year, if the city council or town board:
62.6 (i) changes the conditional use of the property;
62.7 (ii) revokes the mining permit; or
62.8 (iii) changes the zoning to disallow mining.
62.9 No additional taxes are imposed on the property under this clause.
62.10 Subd. 4a. County termination. Within two years of the effective date of this
62.11 section, a county may, following notice and public hearing, terminate application of this
62.12 section in the county. The termination is effective upon adoption of a resolution of the
62.13 county board. A county has 60 days from receipt of the first application for enrollment
62.14 under this section to notify the applicant and any subsequent applicants of the county's
62.15 intent to begin the process of terminating application of this section in the county. The
62.16 county must act on the termination within six months. Upon termination by a vote of the
62.17 county board, all applications received during notification of intent to terminate shall be
62.18 deemed void. If the county board does not act on the termination within six months of
62.19 notification, all applications for valuation for deferment received shall be deemed eligible
62.20 to be enrolled under this section. Following this initial 60-day grace period, a termination
62.21 applies prospectively and does not affect property enrolled under this section prior to the
62.22 termination date. A county may reauthorize application of this section by a resolution of
62.23 the county board revoking the termination.
62.24 Subd. 5. Additional taxes. When real property which has been valued and assessed
62.25 under this section no longer qualifies, the portion of the land classified under subdivision
62.26 1, clause (1), is subject to additional taxes. The additional tax amount is determined by:
62.27 (1) computing the difference between (i) the current year's taxes determined in
62.28 accordance with subdivision 5, and (ii) an amount as determined by the assessor based
62.29 upon the property's current year's estimated market value of like real estate at its highest
62.30 and best use and the appropriate local tax rate; and
62.31 (2) multiplying the amount determined in clause (1) by the number of years the
62.32 land was in the program under this section.
62.33 The current year's estimated market value as determined by the assessor must not
62.34 exceed the market value that would result if the property was sold in an arms-length
62.35 transaction and must not be greater than it would have been had the actual bona fide sale
62.36 price of the property been used in lieu of that market value. The additional taxes must be
63.1 extended against the property on the tax list for the current year, except that interest or
63.2 penalties must not be levied on such additional taxes if timely paid.
63.3 The additional tax under this subdivision must not be imposed on that portion of the
63.4 property which has actively been mined and has been removed from the program based
63.5 upon the supplemental affidavits filed under subdivision 6.
63.6 Subd. 6. Supplemental affidavits; mining activity on land. When any portion
63.7 of the property begins to be actively mined, the owner must file a supplemental affidavit
63.8 within 60 days from the day any aggregate is removed stating the number of acres of the
63.9 property that is actively being mined. The acres actively being mined shall be (1) valued
63.10 and classified under section 273.13, subdivision 24, in the next subsequent assessment
63.11 year, and (2) removed from the aggregate resource preservation property tax program
63.12 under this section. The additional taxes under subdivision 5 must not be imposed on
63.13 the acres that are actively being mined and have been removed from the program under
63.14 this section.
63.15 Copies of the original affidavit and all supplemental affidavits must be filed with the
63.16 county assessor, the local zoning administrator, and the Department of Natural Resources,
63.17 Division of Land and Minerals. A supplemental affidavit must be filed each time a
63.18 subsequent portion of the property is actively mined, provided that the minimum acreage
63.19 change is five acres, even if the actual mining activity constitutes less than five acres.
63.20 Failure to file the affidavits timely shall result in the property losing its valuation deferment
63.21 under this section, and additional taxes must be imposed as calculated under subdivision 5.
63.22 Subd. 7. Lien. The additional tax imposed by this section is a lien upon the property
63.23 assessed to the same extent and for the same duration as other taxes imposed upon
63.24 property within this state and, when collected, must be distributed in the manner provided
63.25 by law for the collection and distribution of other property taxes.
63.26 Subd. 8. Continuation of tax treatment upon sale. When real property qualifying
63.27 under subdivision 1 is sold, additional taxes must not be extended against the property
63.28 if the property continues to qualify under subdivision 1, and the new owner files an
63.29 application with the assessor for continued deferment within 30 days after the sale.
63.30 Subd. 9. Definitions. For purposes of this section, "commercial aggregate deposit"
63.31 and "actively mined" have the meanings given them in section 273.13, subdivision 23,
63.32 paragraph (h).
63.33 Subd. 10. County administrative fee. A county may charge the owner of property
63.34 that is valued under this section a fee to compensate for its costs of administering this
63.35 program.
64.1 EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
64.2 in 2008, and thereafter, except that for the 2007 assessment year, the application date
64.3 under subdivision 4 shall be September 1, 2007, and subdivision 4a is effective the day
64.4 following final enactment.
64.5 Sec. 14. Minnesota Statutes 2004, section 273.124, subdivision 12, is amended to read:
64.6 Subd. 12. Homestead of member of United States armed forces; Peace Corps;
64.7 VISTA. (a) Real estate actually occupied and used for the purpose of a homestead by
64.8 a person, or by a member of that person's immediate family shall be classified as a
64.9 homestead even though the person or family is absent if (1) the person or the person's
64.10 family is absent solely because the person is on active duty with the armed forces of the
64.11 United States, or is serving as a volunteer under the VISTA or Peace Corps program; (2)
64.12 the owner intends to return as soon as discharged or relieved from service; and (3) the
64.13 owner claims it as a homestead. A person who knowingly makes or submits to an assessor
64.14 an affidavit or other statement that is false in any material matter to obtain or aid another
64.15 in obtaining a benefit under this subdivision is guilty of a felony.
64.16 (b) In the case of a person who is absent solely because the person is on active duty
64.17 with the United States armed forces, homestead classification must be granted as provided
64.18 in this paragraph if the requirements of paragraph (a), clauses (1) to (3), are met, even
64.19 if the property has not been occupied as a homestead by the person or a member of the
64.20 person's family. To qualify for this classification, the person who acquires the property
64.21 must notify the assessor of the acquisition and of the person's absence due to military
64.22 service. When the person returns from military service and occupies the property as
64.23 a homestead, the person shall notify the assessor, who will provide for abatement of
64.24 the difference between the nonhomestead and homestead taxes for the current and two
64.25 preceding years, not to exceed the time during which the person owned the property.
64.26 EFFECTIVE DATE.This section is effective for assessments in 2006, taxes
64.27 payable in 2007, and thereafter.
64.28 Sec. 15. Minnesota Statutes 2004, section 273.124, is amended by adding a subdivision
64.29 to read:
64.30 Subd. 22. Annual registration of certain relative homesteads. If the owner of
64.31 property or the owner's relative who occupies property that is classified as a homestead
64.32 under subdivision 1, paragraph (c), receives compensation for allowing occupancy of any
64.33 part of that property for a period that exceeds 31 consecutive days during the calendar
64.34 year, the recipient of the compensation must register the property with the city in which
65.1 it is located no later than 60 days after the initial rental period began. This requirement
65.2 applies to property located in a city that has a population over 25,000. Each such city must
65.3 maintain a file of these property registrations that is open to the public, and retain the
65.4 registrations for one year after the date of filing.
65.5 EFFECTIVE DATE.This section is effective July 1, 2006.
65.6 Sec. 16. Minnesota Statutes 2005 Supplement, section 273.128, subdivision 1, is
65.7 amended to read:
65.8 Subdivision 1. Requirement. Low-income rental property classified as class 4d
65.9 under section 273.13, subdivision 25, is entitled to valuation under this section if at least
65.10 75 percent of for the units in the rental housing property that meet any of the following
65.11 qualifications:
65.12 (1) the units are subject to a housing assistance payments contract under section 8
65.13 of the United States Housing Act of 1937, as amended;
65.14 (2) the units are rent-restricted and income-restricted units of a qualified low-income
65.15 housing project receiving tax credits under section 42(g) of the Internal Revenue Code of
65.16 1986, as amended;
65.17 (3) the units are financed by the Rural Housing Service of the United States
65.18 Department of Agriculture and receive payments under the rental assistance program
65.19 pursuant to section 521(a) of the Housing Act of 1949, as amended; or
65.20 (4) the units are subject to rent and income restrictions under the terms of financial
65.21 assistance provided to the rental housing property by the federal government or, the
65.22 state of Minnesota, or a local unit of government as evidenced by a document recorded
65.23 against the property.
65.24 The restrictions must require assisted units to be occupied by residents whose
65.25 household income at the time of initial occupancy does not exceed 60 percent of the
65.26 greater of area or state median income, adjusted for family size, as determined by the
65.27 United States Department of Housing and Urban Development. The restriction must also
65.28 require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of
65.29 area or state median income, adjusted for family size, as determined by the United States
65.30 Department of Housing and Urban Development.
65.31 EFFECTIVE DATE.This section is effective for taxes levied in 2006, payable
65.32 in 2007, and thereafter.
65.33 Sec. 17. Minnesota Statutes 2004, section 273.13, subdivision 23, is amended to read:
66.1 Subd. 23. Class 2. (a) Class 2a property is agricultural land including any
66.2 improvements that is homesteaded. The market value of the house and garage and
66.3 immediately surrounding one acre of land has the same class rates as class 1a property
66.4 under subdivision 22. The value of the remaining land including improvements up to and
66.5 including $600,000 market value the first tier valuation limit of agricultural homestead
66.6 property has a net class rate of 0.55 percent of market value. The remaining property
66.7 over $600,000 market value the first tier has a class rate of one percent of market value.
66.8 For purposes of this subdivision, the "first tier valuation limit of agricultural homestead
66.9 property" and "first tier" means the limit certified under section 273.11, subdivision 23.
66.10 (b) Class 2b property is (1) real estate, rural in character and used exclusively for
66.11 growing trees for timber, lumber, and wood and wood products; (2) real estate that is not
66.12 improved with a structure and is used exclusively for growing trees for timber, lumber, and
66.13 wood and wood products, if the owner has participated or is participating in a cost-sharing
66.14 program for afforestation, reforestation, or timber stand improvement on that particular
66.15 property, administered or coordinated by the commissioner of natural resources; (3) real
66.16 estate that is nonhomestead agricultural land; or (4) a landing area or public access area of
66.17 a privately owned public use airport; or (5) land with a commercial aggregate deposit that
66.18 is not actively being mined and is not otherwise classified as class 2a or 2b, clauses (1) to
66.19 (3). Class 2b property has a net class rate of one percent of market value.
66.20 (c) Agricultural land as used in this section means contiguous acreage of ten
66.21 acres or more, used during the preceding year for agricultural purposes. "Agricultural
66.22 purposes" as used in this section means the raising or cultivation of agricultural products.
66.23 "Agricultural purposes" also includes enrollment in the Reinvest in Minnesota program
66.24 under sections 103F.501 to 103F.535, the native prairie bank under section 84.96, or the
66.25 federal Conservation Reserve Program as contained in Public Law 99-198 if the property
66.26 was classified as agricultural (i) under this subdivision for the assessment year 2002 or (ii)
66.27 in the year prior to its enrollment. Contiguous acreage on the same parcel, or contiguous
66.28 acreage on an immediately adjacent parcel under the same ownership, may also qualify
66.29 as agricultural land, but only if it is pasture, timber, waste, unusable wild land, or land
66.30 included in state or federal farm programs. Agricultural classification for property shall be
66.31 determined excluding the house, garage, and immediately surrounding one acre of land,
66.32 and shall not be based upon the market value of any residential structures on the parcel or
66.33 contiguous parcels under the same ownership.
66.34 (d) Real estate, excluding the house, garage, and immediately surrounding one acre
66.35 of land, of less than ten acres which is exclusively and intensively used for raising or
66.36 cultivating agricultural products, shall be considered as agricultural land.
67.1 Land shall be classified as agricultural even if all or a portion of the agricultural use
67.2 of that property is the leasing to, or use by another person for agricultural purposes.
67.3 Classification under this subdivision is not determinative for qualifying under
67.4 section 273.111.
67.5 The property classification under this section supersedes, for property tax purposes
67.6 only, any locally administered agricultural policies or land use restrictions that define
67.7 minimum or maximum farm acreage.
67.8 (e) The term "agricultural products" as used in this subdivision includes production
67.9 for sale of:
67.10 (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
67.11 animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
67.12 bees, and apiary products by the owner;
67.13 (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
67.14 for agricultural use;
67.15 (3) the commercial boarding of horses if the boarding is done in conjunction with
67.16 raising or cultivating agricultural products as defined in clause (1);
67.17 (4) property which is owned and operated by nonprofit organizations used for
67.18 equestrian activities, excluding racing;
67.19 (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
67.20 under section 97A.115;
67.21 (6) insects primarily bred to be used as food for animals;
67.22 (7) trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood
67.23 products, except that short rotation woody crops that are cultivated using agricultural
67.24 practices to produce timber or forest products are agricultural products; and
67.25 (8) maple syrup taken from trees grown by a person licensed by the Minnesota
67.26 Department of Agriculture under chapter 28A as a food processor.
67.27 (f) If a parcel used for agricultural purposes is also used for commercial or industrial
67.28 purposes, including but not limited to:
67.29 (1) wholesale and retail sales;
67.30 (2) processing of raw agricultural products or other goods;
67.31 (3) warehousing or storage of processed goods; and
67.32 (4) office facilities for the support of the activities enumerated in clauses (1), (2),
67.33 and (3),
67.34 the assessor shall classify the part of the parcel used for agricultural purposes as class
67.35 1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
67.36 use. The grading, sorting, and packaging of raw agricultural products for first sale is
68.1 considered an agricultural purpose. A greenhouse or other building where horticultural
68.2 or nursery products are grown that is also used for the conduct of retail sales must be
68.3 classified as agricultural if it is primarily used for the growing of horticultural or nursery
68.4 products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
68.5 those products. Use of a greenhouse or building only for the display of already grown
68.6 horticultural or nursery products does not qualify as an agricultural purpose.
68.7 The assessor shall determine and list separately on the records the market value of
68.8 the homestead dwelling and the one acre of land on which that dwelling is located. If any
68.9 farm buildings or structures are located on this homesteaded acre of land, their market
68.10 value shall not be included in this separate determination.
68.11 (g) To qualify for classification under paragraph (b), clause (4), a privately owned
68.12 public use airport must be licensed as a public airport under section 360.018. For purposes
68.13 of paragraph (b), clause (4), "landing area" means that part of a privately owned public use
68.14 airport properly cleared, regularly maintained, and made available to the public for use by
68.15 aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing
68.16 or navigational aids. A landing area also includes land underlying both the primary surface
68.17 and the approach surfaces that comply with all of the following:
68.18 (i) the land is properly cleared and regularly maintained for the primary purposes of
68.19 the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
68.20 facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
68.21 (ii) the land is part of the airport property; and
68.22 (iii) the land is not used for commercial or residential purposes.
68.23 The land contained in a landing area under paragraph (b), clause (4), must be described
68.24 and certified by the commissioner of transportation. The certification is effective until
68.25 it is modified, or until the airport or landing area no longer meets the requirements of
68.26 paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area"
68.27 means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival
68.28 and departure building in connection with the airport.
68.29 (h) To qualify for classification under paragraph (b), clause (5), the property must be
68.30 at least ten contiguous acres in size and the owner of the property must record with the
68.31 county recorder of the county in which the property is located an affidavit containing:
68.32 (1) a legal description of the property;
68.33 (2) a disclosure that the property contains a commercial aggregate deposit that is not
68.34 actively being mined but is present on the entire parcel enrolled;
68.35 (3) documentation that the conditional use under the county or local zoning
68.36 ordinance of this property is for mining; and
69.1 (4) documentation that a permit has been issued by the local unit of government
69.2 or the mining activity is allowed under local ordinance. The disclosure must include a
69.3 statement from a registered professional geologist, engineer, or soil scientist delineating
69.4 the deposit and certifying that it is a commercial aggregate deposit.
69.5 For purposes of this section and section 273.1115, "commercial aggregate deposit"
69.6 means a deposit that will yield crushed stone or sand and gravel that is suitable for use
69.7 as a construction aggregate; and "actively mined" means the removal of top soil and
69.8 overburden in preparation for excavation or excavation of a commercial deposit.
69.9 (i) When any portion of the property under this subdivision or section 273.13,
69.10 subdivision 22, begins to be actively mined, the owner must file a supplemental affidavit
69.11 within 60 days from the day any aggregate is removed stating the number of acres of the
69.12 property that is actively being mined. The acres actively being mined must be (1) valued
69.13 and classified under section 273.13, subdivision 24, in the next subsequent assessment
69.14 year, and (2) removed from the aggregate resource preservation property tax program
69.15 under section 273.1115, if the land was enrolled in that program. Copies of the original
69.16 affidavit and all supplemental affidavits must be filed with the county assessor, the local
69.17 zoning administrator, and the Department of Natural Resources, Division of Land and
69.18 Minerals. A supplemental affidavit must be filed each time a subsequent portion of the
69.19 property is actively mined, provided that the minimum acreage change is five acres, even
69.20 if the actual mining activity constitutes less than five acres.
69.21 EFFECTIVE DATE.This section is effective for taxes levied in 2006, payable in
69.22 2007, and thereafter, except that the provisions relating to land with aggregate deposits is
69.23 effective for taxes levied in 2007, payable in 2008, and thereafter.
69.24 Sec. 18. [273.323] EFFECTIVE DATE FOR RULES FOR VALUATION OF
69.25 ELECTRIC AND TRANSMISSION PIPELINE UTILITY PROPERTY.
69.26 Rules adopted by the commissioner of revenue that prescribe the method of valuing
69.27 property of electric and transmission pipeline utilities may not take effect before the end
69.28 of the regular legislative session in the calendar year following adoption of the rules.
69.29 EFFECTIVE DATE.This section is effective the day following final enactment.
69.30 Sec. 19. Minnesota Statutes 2005 Supplement, section 276.04, subdivision 2, is
69.31 amended to read:
69.32 Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the
69.33 printing of the tax statements. The commissioner of revenue shall prescribe the form
70.1 of the property tax statement and its contents. The statement must contain a tabulated
70.2 statement of the dollar amount due to each taxing authority and the amount of the state
70.3 tax from the parcel of real property for which a particular tax statement is prepared. The
70.4 dollar amounts attributable to the county, the state tax, the voter approved school tax, the
70.5 other local school tax, the township or municipality, and the total of the metropolitan
70.6 special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must
70.7 be separately stated. The amounts due all other special taxing districts, if any, may be
70.8 aggregated except that any levies made by the regional rail authorities in the county of
70.9 Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
70.10 shall be listed on a separate line directly under the appropriate county's levy. If the county
70.11 levy under this paragraph includes an amount for a lake improvement district as defined
70.12 under sections 103B.501 to 103B.581, the amount attributable for that purpose must be
70.13 separately stated from the remaining county levy amount. In the case of Ramsey County,
70.14 if the county levy under this paragraph includes an amount for public library service
70.15 under section 134.07, the amount attributable for that purpose may be separated from the
70.16 remaining county levy amount. The amount of the tax on homesteads qualifying under the
70.17 senior citizens' property tax deferral program under chapter 290B is the total amount of
70.18 property tax before subtraction of the deferred property tax amount. The amount of the
70.19 tax on contamination value imposed under sections 270.91 to 270.98, if any, must also
70.20 be separately stated. The dollar amounts, including the dollar amount of any special
70.21 assessments, may be rounded to the nearest even whole dollar. For purposes of this section
70.22 whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar.
70.23 The amount of market value excluded under section 273.11, subdivision 16, if any, must
70.24 also be listed on the tax statement.
70.25 (b) The property tax statements for manufactured homes and sectional structures
70.26 taxed as personal property shall contain the same information that is required on the
70.27 tax statements for real property.
70.28 (c) Real and personal property tax statements must contain the following information
70.29 in the order given in this paragraph. The information must contain the current year tax
70.30 information in the right column with the corresponding information for the previous year
70.31 in a column on the left:
70.32 (1) the property's estimated market value under section 273.11, subdivision 1;
70.33 (2) the property's taxable market value after reductions under section 273.11,
70.34 subdivisions 1a and 16;
70.35 (3) the property's gross tax, calculated by adding the property's total property tax to
70.36 the sum of the aids enumerated in clause (4);
71.1 (4) a total of the following aids:
71.2 (i) education aids payable under chapters 122A, 123A, 123B, 124D, 125A, 126C,
71.3 and 127A;
71.4 (ii) local government aids for cities, towns, and counties under sections 477A.011 to
71.5 477A.04; and
71.6 (iii) disparity reduction aid under section 273.1398;
71.7 (5) for homestead residential and agricultural properties, the credits under section
71.8 273.1384;
71.9 (6) any credits received under sections 273.119; 273.123; 273.135; 273.1391;
71.10 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received
71.11 under section 273.135 must be separately stated and identified as "taconite tax relief"; and
71.12 (7) the net tax payable in the manner required in paragraph (a).
71.13 (d) If the county uses envelopes for mailing property tax statements and if the county
71.14 agrees, a taxing district may include a notice with the property tax statement notifying
71.15 taxpayers when the taxing district will begin its budget deliberations for the current
71.16 year, and encouraging taxpayers to attend the hearings. If the county allows notices to
71.17 be included in the envelope containing the property tax statement, and if more than
71.18 one taxing district relative to a given property decides to include a notice with the tax
71.19 statement, the county treasurer or auditor must coordinate the process and may combine
71.20 the information on a single announcement.
71.21 The commissioner of revenue shall certify to the county auditor the actual or
71.22 estimated aids enumerated in paragraph (c), clause (4), that local governments will receive
71.23 in the following year. The commissioner must certify this amount by January 1 of each
71.24 year.
71.25 (e) A notice must be printed on the front side of the property tax statement for
71.26 homestead property stating that if the total property tax has increased over the previous
71.27 year's tax by more than the threshold percentage in section 290A.04, subdivision 2h,
71.28 the taxpayer may be eligible, regardless of income, for a special property tax refund
71.29 from the state.
71.30 EFFECTIVE DATE.This section is effective for property tax statements prepared
71.31 in 2006, for property taxes payable in 2007 and thereafter.
71.32 Sec. 20. Minnesota Statutes 2004, section 469.1813, subdivision 1, is amended to read:
71.33 Subdivision 1. Authority. The governing body of a political subdivision may grant
71.34 an a current or prospective abatement, by contract or otherwise, of the taxes imposed by
71.35 the political subdivision on a parcel of property, which may include personal property
72.1 and machinery, or defer the payments of the taxes and abate the interest and penalty
72.2 that otherwise would apply, if:
72.3 (a) (1) it expects the benefits to the political subdivision of the proposed abatement
72.4 agreement to at least equal the costs to the political subdivision of the proposed agreement
72.5 or intends the abatement to phase in a property tax increase, as provided in clause (b)(7);
72.6 and
72.7 (b) (2) it finds that doing so is in the public interest because it will:
72.8 (1) (i) increase or preserve tax base;
72.9 (2) (ii) provide employment opportunities in the political subdivision;
72.10 (3) (iii) provide or help acquire or construct public facilities;
72.11 (4) (iv) help redevelop or renew blighted areas;
72.12 (5) (v) help provide access to services for residents of the political subdivision;
72.13 (6) (vi) finance or provide public infrastructure; or
72.14 (7) (vii) phase in a property tax increase on the parcel resulting from an increase of
72.15 50 percent or more in one year on the estimated market value of the parcel, other than
72.16 increase attributable to improvement of the parcel; or
72.17 (viii) stabilize the tax base through equalization of property tax revenues for a
72.18 specified period of time with respect to a taxpayer whose real and personal property is
72.19 subject to valuation under Minnesota Rules, chapter 8100.
72.20 Sec. 21. Minnesota Statutes 2005 Supplement, section 469.1813, subdivision 6,
72.21 is amended to read:
72.22 Subd. 6. Duration limit. (a) A political subdivision may grant an abatement for a
72.23 period no longer than 15 years, except as provided under paragraph (b). The abatement
72.24 period will commence in the first year in which the abatement granted is either paid or
72.25 retained in accordance with section 469.1815, subdivision 2. The subdivision may specify
72.26 in the abatement resolution a shorter duration. If the resolution does not specify a period
72.27 of time, the abatement is for eight years. If an abatement has been granted to a parcel of
72.28 property and the period of the abatement has expired, the political subdivision that granted
72.29 the abatement may not grant another abatement for eight years after the expiration of the
72.30 first abatement. This prohibition does not apply to improvements added after and not
72.31 subject to the first abatement. Economic abatement agreements for real and personal
72.32 property subject to valuation under Minnesota Rules, chapter 8100, are not subject to this
72.33 prohibition and may be granted successively.
72.34 (b) A political subdivision proposing to abate taxes for a parcel may request, in
72.35 writing, that the other political subdivisions in which the parcel is located grant an
73.1 abatement for the property. If one of the other political subdivisions declines, in writing,
73.2 to grant an abatement or if 90 days pass after receipt of the request to grant an abatement
73.3 without a written response from one of the political subdivisions, the duration limit
73.4 for an abatement for the parcel by the requesting political subdivision and any other
73.5 participating political subdivision is increased to 20 years. If the political subdivision
73.6 which declined to grant an abatement later grants an abatement for the parcel, the 20-year
73.7 duration limit is reduced by one year for each year that the declining political subdivision
73.8 grants an abatement for the parcel during the period of the abatement granted by the
73.9 requesting political subdivision. The duration limit may not be reduced below the limit
73.10 under paragraph (a).
73.11 Sec. 22. Minnesota Statutes 2004, section 469.1813, subdivision 6b, is amended to
73.12 read:
73.13 Subd. 6b. Extended duration limit. (a) Notwithstanding the provisions of
73.14 subdivision 6, a political subdivision may grant an abatement for a period of up to 20
73.15 years, if the abatement is for a qualified business.
73.16 (b) To be a qualified business for purposes of this subdivision, at least 50 percent of
73.17 the payroll of the operations of the business that qualify for the abatement must be for
73.18 employees engaged in one of the following lines of business or any combination of them:
73.19 (1) manufacturing;
73.20 (2) agricultural processing;
73.21 (3) mining;
73.22 (4) research and development;
73.23 (5) warehousing; or
73.24 (6) qualified high technology.
73.25 Alternatively, a qualified business also includes a taxpayer whose real and personal
73.26 property is subject to valuation under Minnesota Rules, chapter 8100.
73.27 (c)(1) "Manufacturing" means the material staging and production of tangible
73.28 personal property by procedures commonly regarded as manufacturing, processing,
73.29 fabrication, or assembling which changes some existing material into new shapes, new
73.30 qualities, or new combinations.
73.31 (2) "Mining" has the meaning given in section 613(c) of the Internal Revenue Code
73.32 of 1986.
73.33 (3) "Agricultural processing" means transforming, packaging, sorting, or grading
73.34 livestock or livestock products, agricultural commodities, or plants or plant products into
73.35 goods that are used for intermediate or final consumption including goods for nonfood use.
74.1 (4) "Research and development" means qualified research as defined in section
74.2 41(d) of the Internal Revenue Code of 1986.
74.3 (5) "Qualified high technology" means one or more of the following activities:
74.4 (i) advanced computing, which is any technology used in the design and
74.5 development of any of the following:
74.6 (A) computer hardware and software;
74.7 (B) data communications; and
74.8 (C) information technologies;
74.9 (ii) advanced materials, which are materials with engineered properties created
74.10 through the development of specialized process and synthesis technology;
74.11 (iii) biotechnology, which is any technology that uses living organisms, cells,
74.12 macromolecules, microorganisms, or substances from living organisms to make or modify
74.13 a product, improve plants or animals, or develop microorganisms for useful purposes;
74.14 (iv) electronic device technology, which is any technology that involves
74.15 microelectronics, semiconductors, electronic equipment, and instrumentation, radio
74.16 frequency, microwave, and millimeter electronics, and optical and optic-electrical devices,
74.17 or data and digital communications and imaging devices;
74.18 (v) engineering or laboratory testing related to the development of a product;
74.19 (vi) technology that assists in the assessment or prevention of threats or damage to
74.20 human health or the environment, including, but not limited to, environmental cleanup
74.21 technology, pollution prevention technology, or development of alternative energy sources;
74.22 (vii) medical device technology, which is any technology that involves medical
74.23 equipment or products other than a pharmaceutical product that has therapeutic or
74.24 diagnostic value and is regulated; or
74.25 (viii) advanced vehicles technology which is any technology that involves electric
74.26 vehicles, hybrid vehicles, or alternative fuel vehicles, or components used in the
74.27 construction of electric vehicles, hybrid vehicles, or alternative fuel vehicles. An electric
74.28 vehicle is a road vehicle that draws propulsion energy only from an on-board source of
74.29 electrical energy. A hybrid vehicle is a road vehicle that can draw propulsion energy from
74.30 both a consumable fuel and a rechargeable energy storage system.
74.31 (d) The authority to grant new abatements under this subdivision expires on July 1,
74.32 2004, except that the authority to grant new abatements for real and personal property
74.33 subject to valuation under Minnesota Rules, chapter 8100, does not expire.
74.34 Sec. 23. Minnesota Statutes 2004, section 469.1813, subdivision 8, is amended to read:
75.1 Subd. 8. Limitation on abatements. In any year, the total amount of property taxes
75.2 abated by a political subdivision under this section may not exceed (1) ten percent of
75.3 the current levy, or (2) $200,000, whichever is greater. The limit under this subdivision
75.4 does not apply to:
75.5 (1) an uncollected abatement from a prior year that is added to the abatement levy; or
75.6 (2) a taxpayer whose real and personal property is subject to valuation under
75.7 Minnesota Rules, chapter 8100.
75.8 Sec. 24. Minnesota Statutes 2004, section 469.1813, subdivision 9, is amended to read:
75.9 Subd. 9. Consent of property owner not required. A political subdivision may
75.10 abate the taxes on a parcel under sections 469.1812 to 469.1815 without obtaining the
75.11 consent of the property owner. This subdivision does not apply to abatements granted to a
75.12 taxpayer whose real and personal property is valued under Minnesota Rules, chapter 8100.
75.13 Sec. 25. Minnesota Statutes 2004, section 469.1813, is amended by adding a
75.14 subdivision to read:
75.15 Subd. 10. Applicability to utility properties. When this statute is applied or
75.16 utilized with respect to a taxpayer whose real and personal property is subject to valuation
75.17 under Minnesota Rules, chapter 8100, the provisions of this section and sections 469.1814
75.18 and 469.1815 shall apply only to property specified or described in the abatement contract
75.19 or agreement.
75.20 Sec. 26. Minnesota Statutes 2004, section 473F.08, is amended by adding a subdivision
75.21 to read:
75.22 Subd. 3c. Uncompensated care reimbursement. (a) As used in this subdivision,
75.23 the following terms have the meanings given in this paragraph.
75.24 (1) "Uncompensated care" means the sum of (i) the amount that would have been
75.25 charged by a facility for rendering free or discounted care to persons who cannot afford to
75.26 pay and for which the facility did not expect payment and (ii) the amount that had been
75.27 charged by a facility for rendering care to persons and billed to that person or a third-party
75.28 payer for which the facility expected but did not receive payment. Uncompensated care
75.29 does not include contractual write-offs.
75.30 (2) A "qualifying hospital" means a hospital in the area that is:
75.31 (i) owned or operated by a local unit of government, or formerly owned by a
75.32 university or is a private nonprofit hospital that leases its building from the county in
75.33 which it is located; and
76.1 (ii) has a licensed bed capacity greater than 400.
76.2 (b) A county that contains a qualifying hospital is eligible for reimbursement of
76.3 that portion of gross charges for uncompensated care determined by multiplying the
76.4 hospital's gross charges during the base year by the percentage of uncompensated care
76.5 provided by the hospital during the base year minus one-half of one percent of those gross
76.6 charges, dividing the result by two, and adjusting the cost by multiplying that result by the
76.7 hospital's cost-to-charge ratio during the base year. By July 15, 2007, and each subsequent
76.8 year, the county shall notify its county auditor, as well as the administrative auditor, of the
76.9 amount of qualifying uncompensated care provided, adjusted to cost using the hospital's
76.10 cost-to-charge ratio, during the 12-month period ending on June 30 of the current year.
76.11 (c) The amount certified under paragraph (b) shall be certified annually by the
76.12 county auditor to the administrative auditor as an addition to the county's areawide levy
76.13 under subdivision 5.
76.14 (d) The administrative auditor shall pay one-half of the reimbursement to the county
76.15 auditor of the county that contains the qualifying hospital on or before June 15 and the
76.16 remaining one-half of the reimbursement on or before November 15. The county auditor
76.17 receiving the payment shall disburse the reimbursement to the qualifying hospital within
76.18 15 days of receipt of the reimbursement.
76.19 (e) Prior to the reporting specified in paragraph (b) above, all qualifying hospitals
76.20 that participate in this program shall agree upon and implement a common standard for
76.21 reporting uncompensated care, and a common standard for determining eligibility for
76.22 uncompensated care for all participating hospitals.
76.23 EFFECTIVE DATE.This section is effective for fiscal disparities contribution and
76.24 distribution tax capacities for taxes payable in 2008 and 2009 only.
76.25 Sec. 27. Laws 2001, First Special Session chapter 5, article 3, section 8, the effective
76.26 date, as amended by Laws 2005, chapter 151, article 3, section 19, is amended to read:
76.27 [EFFECTIVE DATE.] This section is effective for taxes levied in 2002, payable in
76.28 2003, through taxes levied in 2009, payable in 2010 and thereafter.
76.29 Sec. 28. PROPERTY TAX CERTIFICATION; ROCHESTER SCHOOL
76.30 DISTRICT.
76.31 Notwithstanding Minnesota Statutes, sections 126C.48 and 275.065, with the
76.32 agreement of the school district's home county, Independent School District No. 535,
76.33 Rochester, on or before October 8, shall certify to the county auditor the district's proposed
76.34 property tax levy for taxes payable in the following year.
77.1 EFFECTIVE DATE.This section is effective for taxes payable in 2007 only.
77.2 Sec. 29. LEASE LEVY; ADMINISTRATIVE SPACE, ROCORI AND
77.3 FARIBAULT.
77.4 Independent School Districts Nos. 656, Faribault, and 750, Rocori, may lease
77.5 administrative space under Minnesota Statutes, section 126C.40, subdivision 1, if the
77.6 district can demonstrate to the satisfaction of the commissioner of education that the
77.7 administrative space is less expensive than instructional space that the district would
77.8 otherwise lease. The commissioner must deny this levy authority unless the district
77.9 passes a resolution stating its intent to lease instructional space under Minnesota Statutes,
77.10 section 126C.40, subdivision 1, if the commissioner does not grant authority under this
77.11 section. The resolution must also certify that a lease of administrative space under this
77.12 section is less expensive than the district's proposed instructional lease. Levy authority
77.13 under this section shall not exceed the total levy authority under Minnesota Statutes,
77.14 section 126C.40, subdivision 1, paragraph (e).
77.15 EFFECTIVE DATE.This section is effective for revenue for taxes payable in 2007.
77.16 Sec. 30. MISCELLANEOUS EDUCATION PROPERTY TAX REDUCTION.
77.17 Notwithstanding Minnesota Statutes, section 126C.10, subdivision 13a, the
77.18 commissioner of education shall increase the operating capital equalizing factor under
77.19 Minnesota Statutes, section 126C.10, subdivision 13a, to reduce the operating capital levy
77.20 by $2,593,000 in fiscal year 2008 and $2,259,000 in fiscal year 2009.
77.21 ARTICLE 5
77.22 DEPARTMENT OF REVENUE PROPERTY TAXES AND AIDS
77.23 Section 1. Minnesota Statutes 2005 Supplement, section 273.13, subdivision 22,
77.24 is amended to read:
77.25 Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b)
77.26 and (c), real estate which is residential and used for homestead purposes is class 1a. In the
77.27 case of a duplex or triplex in which one of the units is used for homestead purposes, the
77.28 entire property is deemed to be used for homestead purposes. The market value of class 1a
77.29 property must be determined based upon the value of the house, garage, and land.
77.30 The first $500,000 of market value of class 1a property has a net class rate of
77.31 one percent of its market value; and the market value of class 1a property that exceeds
77.32 $500,000 has a class rate of 1.25 percent of its market value.
78.1 (b) Class 1b property includes homestead real estate or homestead manufactured
78.2 homes used for the purposes of a homestead by
78.3 (1) any person who is blind as defined in section 256D.35, or the blind person and
78.4 the blind person's spouse; or
78.5 (2) any person, hereinafter referred to as "veteran," who:
78.6 (i) served in the active military or naval service of the United States; and
78.7 (ii) is entitled to compensation under the laws and regulations of the United States
78.8 for permanent and total service-connected disability due to the loss, or loss of use, by
78.9 reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both
78.10 lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or
78.11 a wheelchair; and
78.12 (iii) has acquired a special housing unit with special fixtures or movable facilities
78.13 made necessary by the nature of the veteran's disability, or the surviving spouse of the
78.14 deceased veteran for as long as the surviving spouse retains the special housing unit
78.15 as a homestead; or
78.16 (3) any person who is permanently and totally disabled.
78.17 Property is classified and assessed under clause (3) only if the government agency or
78.18 income-providing source certifies, upon the request of the homestead occupant, that the
78.19 homestead occupant satisfies the disability requirements of this paragraph.
78.20 Property is classified and assessed pursuant to clause (1) only if the commissioner of
78.21 revenue certifies to the assessor that the homestead occupant satisfies the requirements of
78.22 this paragraph.
78.23 Permanently and totally disabled for the purpose of this subdivision means a
78.24 condition which is permanent in nature and totally incapacitates the person from working
78.25 at an occupation which brings the person an income. The first $32,000 market value of
78.26 class 1b property has a net class rate of .45 percent of its market value. The remaining
78.27 market value of class 1b property has a class rate using the rates for class 1a or class 2a
78.28 property, whichever is appropriate, of similar market value.
78.29 (c) Class 1c property is commercial use real property that abuts a lakeshore line and
78.30 is devoted to temporary and seasonal residential occupancy for recreational purposes but
78.31 not devoted to commercial purposes for more than 250 days in the year preceding the
78.32 year of assessment, and that includes a portion used as a homestead by the owner, which
78.33 includes a dwelling occupied as a homestead by a shareholder of a corporation that owns
78.34 the resort, a partner in a partnership that owns the resort, or a member of a limited liability
78.35 company that owns the resort even if the title to the homestead is held by the corporation,
78.36 partnership, or limited liability company. For purposes of this clause, property is devoted
79.1 to a commercial purpose on a specific day if any portion of the property, excluding the
79.2 portion used exclusively as a homestead, is used for residential occupancy and a fee
79.3 is charged for residential occupancy. The portion of the property used as a homestead
79.4 by the owner has the same class rates as is class 1a property under paragraph (a). The
79.5 remainder of the property is classified as follows: the first $500,000 of market value is tier
79.6 I, the next $1,700,000 of market value is tier II, and any remaining market value is tier III.
79.7 The class rates for class 1c are: tier I, 0.55 percent; tier II, 1.0 percent; and tier III, 1.25
79.8 percent. If a class 1c resort property has any market value in tier III, the entire property
79.9 must meet the requirements of subdivision 25, paragraph (d), clause (1), to qualify for
79.10 class 1c treatment under this paragraph.
79.11 (d) Class 1d property includes structures that meet all of the following criteria:
79.12 (1) the structure is located on property that is classified as agricultural property under
79.13 section 273.13, subdivision 23;
79.14 (2) the structure is occupied exclusively by seasonal farm workers during the time
79.15 when they work on that farm, and the occupants are not charged rent for the privilege of
79.16 occupying the property, provided that use of the structure for storage of farm equipment
79.17 and produce does not disqualify the property from classification under this paragraph;
79.18 (3) the structure meets all applicable health and safety requirements for the
79.19 appropriate season; and
79.20 (4) the structure is not salable as residential property because it does not comply
79.21 with local ordinances relating to location in relation to streets or roads.
79.22 The market value of class 1d property has the same class rates as class 1a property
79.23 under paragraph (a).
79.24 EFFECTIVE DATE.This section is effective for taxes payable in 2006 and
79.25 thereafter.
79.26 Sec. 2. Minnesota Statutes 2005 Supplement, section 273.13, subdivision 25, is
79.27 amended to read:
79.28 Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
79.29 units and used or held for use by the owner or by the tenants or lessees of the owner
79.30 as a residence for rental periods of 30 days or more, excluding property qualifying for
79.31 class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
79.32 than hospitals exempt under section 272.02, and contiguous property used for hospital
79.33 purposes, without regard to whether the property has been platted or subdivided. The
79.34 market value of class 4a property has a class rate of 1.25 percent.
79.35 (b) Class 4b includes:
80.1 (1) residential real estate containing less than four units that does not qualify as class
80.2 4bb, other than seasonal residential recreational property;
80.3 (2) manufactured homes not classified under any other provision;
80.4 (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
80.5 farm classified under subdivision 23, paragraph (b) containing two or three units; and
80.6 (4) unimproved property that is classified residential as determined under subdivision
80.7 33.
80.8 The market value of class 4b property has a class rate of 1.25 percent.
80.9 (c) Class 4bb includes:
80.10 (1) nonhomestead residential real estate containing one unit, other than seasonal
80.11 residential recreational property; and
80.12 (2) a single family dwelling, garage, and surrounding one acre of property on a
80.13 nonhomestead farm classified under subdivision 23, paragraph (b).
80.14 Class 4bb property has the same class rates as class 1a property under subdivision 22.
80.15 Property that has been classified as seasonal residential recreational property at
80.16 any time during which it has been owned by the current owner or spouse of the current
80.17 owner does not qualify for class 4bb.
80.18 (d) Class 4c property includes:
80.19 (1) except as provided in subdivision 22, paragraph (c), real property devoted to
80.20 temporary and seasonal residential occupancy for recreation purposes, including real
80.21 property devoted to temporary and seasonal residential occupancy for recreation purposes
80.22 and not devoted to commercial purposes for more than 250 days in the year preceding
80.23 the year of assessment. For purposes of this clause, property is devoted to a commercial
80.24 purpose on a specific day if any portion of the property is used for residential occupancy,
80.25 and a fee is charged for residential occupancy. In order for a property to be classified as
80.26 class 4c, seasonal residential recreational for commercial purposes, at least 40 percent of
80.27 the annual gross lodging receipts related to the property must be from business conducted
80.28 during 90 consecutive days and either (i) at least 60 percent of all paid bookings by lodging
80.29 guests during the year must be for periods of at least two consecutive nights; or (ii) at least
80.30 20 percent of the annual gross receipts must be from charges for rental of fish houses,
80.31 boats and motors, snowmobiles, downhill or cross-country ski equipment, or charges for
80.32 marina services, launch services, and guide services, or the sale of bait and fishing tackle.
80.33 For purposes of this determination, a paid booking of five or more nights shall be counted
80.34 as two bookings. Class 4c also includes commercial use real property used exclusively
80.35 for recreational purposes in conjunction with class 4c property devoted to temporary
80.36 and seasonal residential occupancy for recreational purposes, up to a total of two acres,
81.1 provided the property is not devoted to commercial recreational use for more than 250
81.2 days in the year preceding the year of assessment and is located within two miles of the
81.3 class 4c property with which it is used. Owners of real property devoted to temporary and
81.4 seasonal residential occupancy for recreation purposes and all or a portion of which was
81.5 devoted to commercial purposes for not more than 250 days in the year preceding the year
81.6 of assessment desiring classification as class 1c or 4c, must submit a declaration to the
81.7 assessor designating the cabins or units occupied for 250 days or less in the year preceding
81.8 the year of assessment by January 15 of the assessment year. Those cabins or units and a
81.9 proportionate share of the land on which they are located will be designated class 1c or 4c
81.10 as otherwise provided. The remainder of the cabins or units and a proportionate share of
81.11 the land on which they are located will be designated as class 3a. The owner of property
81.12 desiring designation as class 1c or 4c property must provide guest registers or other
81.13 records demonstrating that the units for which class 1c or 4c designation is sought were
81.14 not occupied for more than 250 days in the year preceding the assessment if so requested.
81.15 The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, and (4) other
81.16 nonresidential facility operated on a commercial basis not directly related to temporary and
81.17 seasonal residential occupancy for recreation purposes shall not qualify for class 1c or 4c;
81.18 (2) qualified property used as a golf course if:
81.19 (i) it is open to the public on a daily fee basis. It may charge membership fees or
81.20 dues, but a membership fee may not be required in order to use the property for golfing,
81.21 and its green fees for golfing must be comparable to green fees typically charged by
81.22 municipal courses; and
81.23 (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
81.24 A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
81.25 with the golf course is classified as class 3a property;
81.26 (3) real property up to a maximum of one acre of land owned by a nonprofit
81.27 community service oriented organization; provided that the property is not used for a
81.28 revenue-producing activity for more than six days in the calendar year preceding the year
81.29 of assessment and the property is not used for residential purposes on either a temporary
81.30 or permanent basis. For purposes of this clause, a "nonprofit community service oriented
81.31 organization" means any corporation, society, association, foundation, or institution
81.32 organized and operated exclusively for charitable, religious, fraternal, civic, or educational
81.33 purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3),
81.34 (10), or (19) of the Internal Revenue Code of 1986, as amended through December 31,
81.35 1990. For purposes of this clause, "revenue-producing activities" shall include but not be
81.36 limited to property or that portion of the property that is used as an on-sale intoxicating
82.1 liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant
82.2 open to the public, bowling alley, a retail store, gambling conducted by organizations
82.3 licensed under chapter 349, an insurance business, or office or other space leased or
82.4 rented to a lessee who conducts a for-profit enterprise on the premises. Any portion of
82.5 the property which is used for revenue-producing activities for more than six days in the
82.6 calendar year preceding the year of assessment shall be assessed as class 3a. The use of
82.7 the property for social events open exclusively to members and their guests for periods of
82.8 less than 24 hours, when an admission is not charged nor any revenues are received by the
82.9 organization shall not be considered a revenue-producing activity;
82.10 (4) postsecondary student housing of not more than one acre of land that is owned by
82.11 a nonprofit corporation organized under chapter 317A and is used exclusively by a student
82.12 cooperative, sorority, or fraternity for on-campus housing or housing located within two
82.13 miles of the border of a college campus;
82.14 (5) manufactured home parks as defined in section 327.14, subdivision 3;
82.15 (6) real property that is actively and exclusively devoted to indoor fitness, health,
82.16 social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
82.17 and is located within the metropolitan area as defined in section 473.121, subdivision 2;
82.18 (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
82.19 under section 272.01, subdivision 2, and the land on which it is located, provided that:
82.20 (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
82.21 Airports Commission, or group thereof; and
82.22 (ii) the land lease, or any ordinance or signed agreement restricting the use of the
82.23 leased premise, prohibits commercial activity performed at the hangar.
82.24 If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
82.25 be filed by the new owner with the assessor of the county where the property is located
82.26 within 60 days of the sale;
82.27 (8) a privately owned noncommercial aircraft storage hangar not exempt under
82.28 section 272.01, subdivision 2, and the land on which it is located, provided that:
82.29 (i) the land abuts a public airport; and
82.30 (ii) the owner of the aircraft storage hangar provides the assessor with a signed
82.31 agreement restricting the use of the premises, prohibiting commercial use or activity
82.32 performed at the hangar; and
82.33 (9) residential real estate, a portion of which is used by the owner for homestead
82.34 purposes, and that is also a place of lodging, if all of the following criteria are met:
82.35 (i) rooms are provided for rent to transient guests that generally stay for periods
82.36 of 14 or fewer days;
83.1 (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
83.2 in the basic room rate;
83.3 (iii) meals are not provided to the general public except for special events on fewer
83.4 than seven days in the calendar year preceding the year of the assessment; and
83.5 (iv) the owner is the operator of the property.
83.6 The market value subject to the 4c classification under this clause is limited to five rental
83.7 units. Any rental units on the property in excess of five, must be valued and assessed as
83.8 class 3a. The portion of the property used for purposes of a homestead by the owner must
83.9 be classified as class 1a property under subdivision 22.
83.10 Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
83.11 parcel of seasonal residential recreational property not used for commercial purposes has
83.12 the same class rates as class 4bb property, (ii) manufactured home parks assessed under
83.13 clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
83.14 residential recreational property has a class rate of one percent for the first $500,000
83.15 of market value, which includes any market value receiving the one percent rate under
83.16 subdivision 22, and 1.25 percent for the remaining market value, (iv) the market value
83.17 of property described in clause (4) has a class rate of one percent, (v) the market value
83.18 of property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that
83.19 portion of the market value of property in clause (9) qualifying for class 4c property
83.20 has a class rate of 1.25 percent.
83.21 (e) Class 4d property is qualifying low-income rental housing certified to the assessor
83.22 by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
83.23 of the units in the building qualify as low-income rental housing units as certified under
83.24 section 273.128, subdivision 3, only the proportion of qualifying units to the total number
83.25 of units in the building qualify for class 4d. The remaining portion of the building shall be
83.26 classified by the assessor based upon its use. Class 4d also includes the same proportion of
83.27 land as the qualifying low-income rental housing units are to the total units in the building.
83.28 For all properties qualifying as class 4d, the market value determined by the assessor must
83.29 be based on the normal approach to value using normal unrestricted rents.
83.30 Class 4d property has a class rate of 0.75 percent.
83.31 EFFECTIVE DATE.This section is effective for taxes payable in 2006 and
83.32 subsequent years.
83.33 Sec. 3. Minnesota Statutes 2005 Supplement, section 273.1384, subdivision 1, is
83.34 amended to read:
84.1 Subdivision 1. Residential homestead market value credit. Each county auditor
84.2 shall determine a homestead credit for each class 1a, 1b, 1c, and 2a homestead property
84.3 within the county equal to 0.4 percent of the first $76,000 of market value of the property
84.4 minus .09 percent of the market value in excess of $76,000. The credit amount may not
84.5 be less than zero. In the case of an agricultural or resort homestead, only the market
84.6 value of the house, garage, and immediately surrounding one acre of land is eligible
84.7 in determining the property's homestead credit. In the case of a property which that is
84.8 classified as part homestead and part nonhomestead, (i) the credit shall apply only to
84.9 the homestead portion of the property, but (ii) if a portion of a property is classified as
84.10 nonhomestead solely because not all the owners occupy the property, not all the owners
84.11 have qualifying relatives occupying the property, or solely because both not all the spouses
84.12 do not of owners occupy the property, the credit amount shall be initially computed as
84.13 if that nonhomestead portion were also in the homestead class and then prorated to the
84.14 owner-occupant's percentage of ownership or prorated to one-half if both spouses do not
84.15 occupy the property. For the purpose of this section, when an owner-occupant's spouse
84.16 does not occupy the property, the percentage of ownership for the owner-occupant spouse
84.17 is one-half of the couple's ownership percentage.
84.18 EFFECTIVE DATE.This section is effective for taxes payable in 2007 and
84.19 thereafter.
84.20 Sec. 4. Minnesota Statutes 2004, section 273.1384, subdivision 2, is amended to read:
84.21 Subd. 2. Agricultural homestead market value credit. Property classified
84.22 as class 2a agricultural homestead is eligible for an agricultural credit. The credit is
84.23 computed using the property's agricultural credit market value, defined for this purpose
84.24 as the property's class 2a market value excluding the market value of the house, garage,
84.25 and immediately surrounding one acre of land. The credit is equal to 0.3 percent of the
84.26 first $115,000 of the property's agricultural credit market value. The credit under this
84.27 subdivision is limited to $345 for each homestead. The credit is reduced by minus .05
84.28 percent of the property's agricultural credit market value in excess of $115,000, subject to
84.29 a maximum reduction of $115. In the case of property that is classified in part as class 2a
84.30 agricultural homestead and in part as class 2b nonhomestead farm land solely because not
84.31 all the owners occupy or farm the property, not all the owners have qualifying relatives
84.32 occupying or farming the property, or solely because not all the spouses of owners occupy
84.33 the property, the credit must be initially computed as if that nonhomestead agricultural
84.34 land was also classified as class 2a agricultural homestead and then prorated to the
84.35 owner-occupant's percentage of ownership.
85.1 EFFECTIVE DATE.This section is effective for taxes payable in 2007 and
85.2 thereafter.
85.3 Sec. 5. Minnesota Statutes 2004, section 273.1398, subdivision 3, is amended to read:
85.4 Subd. 3. Disparity reduction aid. For taxes payable in 2003 and subsequent years,
85.5 The amount of disparity aid certified for each taxing district within each unique taxing
85.6 jurisdiction for taxes payable in the prior year shall be multiplied by the ratio of (1) the
85.7 jurisdiction's tax capacity using the class rates for taxes payable in the year for which aid
85.8 is being computed, to (2) its tax capacity using the class rates for taxes payable in the year
85.9 prior to that for which aid is being computed, both based upon market values for taxes
85.10 payable in the year prior to that for which aid is being computed. For the purposes of this
85.11 aid determination, disparity reduction aid certified for taxes payable in the prior year for
85.12 a taxing entity other than a town or school district is deemed to be county government
85.13 disparity reduction aid. The amount of disparity aid certified to each taxing jurisdiction
85.14 shall be reduced by any reductions required in the current year or permanent reductions
85.15 required in previous years under section 477A.0132. If the commissioner determines that
85.16 insufficient information is available to reasonably and timely calculate the numerator
85.17 in this ratio for the first taxes payable year that a class rate change or new class rate is
85.18 effective, the commissioner shall omit the effects of that class rate change or new class
85.19 rate when calculating this ratio for aid payable in that taxes payable year. For aid payable
85.20 in the year following a year for which such omission was made, the commissioner shall
85.21 use in the denominator for the class that was changed or created, the tax capacity for taxes
85.22 payable two years prior to that in which the aid is payable, based on market values for
85.23 taxes payable in the year prior to that for which aid is being computed.
85.24 EFFECTIVE DATE.This section is effective for taxes payable in 2006 and
85.25 thereafter.
85.26 Sec. 6. Minnesota Statutes 2004, section 281.23, subdivision 9, is amended to read:
85.27 Subd. 9. Certificate. After the time for redemption of any lands shall have expired
85.28 after notice given, as provided in subdivisions 2, 3, 5, and 6, the county auditor shall
85.29 execute a certificate describing the lands, specifying the tax judgment sale at which the
85.30 same were bid in for the state, and stating that the time for redemption thereof has expired
85.31 after notice given as provided by law and that absolute title thereto has vested in the
85.32 state of Minnesota. Such certificate shall be recorded in the office of the county recorder
85.33 and thereafter filed in the office of the county auditor, except that in case of registered
85.34 land such certificate shall be filed recorded in the office of the registrar of titles and a
86.1 duplicate filed in the office of the county auditor. Such certificate and the record thereof
86.2 shall be prima facie evidence of the facts therein stated, but failure to execute or record or
86.3 file such certificate shall not affect the validity of any proceedings hereunder respecting
86.4 such lands or the title of the state thereto.
86.5 EFFECTIVE DATE.This section is effective the day following final enactment.
86.6 Sec. 7. Minnesota Statutes 2005 Supplement, section 284.07, is amended to read:
86.7 284.07 COUNTY AUDITOR'S CERTIFICATE TO BE PRIMA FACIE
86.8 EVIDENCE.
86.9 The county auditor's certificate of forfeiture filed recorded by the county auditor
86.10 as provided by section 281.23, subdivision 9, and acts supplemental thereto, or by any
86.11 other law hereafter enacted providing for the recording of such a certificate or a certified
86.12 copy of such certificate or of the record thereof, shall, for all purposes, be prima facie
86.13 evidence that all requirements of the law respecting the taxation and forfeiture of the
86.14 lands therein described were complied with, and that at the date of the certificate absolute
86.15 title to such lands had vested in the state by reason of forfeiture for delinquent taxes, as
86.16 set forth in the certificate.
86.17 EFFECTIVE DATE.This section is effective the day following final enactment.
86.18 Sec. 8. Minnesota Statutes 2004, section 477A.014, subdivision 1, is amended to read:
86.19 Subdivision 1. Calculations and payments. (a) The commissioner of revenue
86.20 shall make all necessary calculations and make payments pursuant to sections 477A.013,
86.21 477A.0132, and 477A.03 directly to the affected taxing authorities annually. In addition,
86.22 the commissioner shall notify the authorities of their aid amounts, as well as the
86.23 computational factors used in making the calculations for their authority, and those
86.24 statewide total figures that are pertinent, before August 1 of the year preceding the aid
86.25 distribution year.
86.26 (b) For the purposes of this subdivision, aid is determined for a city or town based
86.27 on its city or town status as of June 30 of the year preceding the aid distribution year. If
86.28 the effective date for a municipal incorporation, consolidation, annexation, detachment,
86.29 dissolution, or township organization is on or before June 30 of the year preceding
86.30 the aid distribution year, such change in boundaries or form of government shall be
86.31 recognized for aid determinations for the aid distribution year. If the effective date for a
86.32 municipal incorporation, consolidation, annexation, detachment, dissolution, or township
86.33 organization is after June 30 of the year preceding the aid distribution year, such change in
87.1 boundaries or form of government shall not be recognized for aid determinations until
87.2 the following year.
87.3 (c) Changes in boundaries or form of government will only be recognized for the
87.4 purposes of this subdivision, to the extent that: (1) changes in market values are included
87.5 in market values reported by assessors to the commissioner, and changes in population,
87.6 household size, and the road accidents factor are included in their respective certifications
87.7 to the commissioner as referenced in section 477A.011, or (2) an annexation information
87.8 report as provided in paragraph (d) is received by the commissioner on or before July 15
87.9 of the aid calculation year. Revisions to estimates or data for use in recognizing changes
87.10 in boundaries or form of government are not effective for purposes of this subdivision
87.11 unless received by the commissioner on or before July 15 of the aid calculation year.
87.12 Clerical errors in the certification or use of estimates and data established as of July 15 in
87.13 the aid calculation year are subject to correction within the time periods allowed under
87.14 subdivision 3.
87.15 (d) In the case of an annexation, an annexation information report may be completed
87.16 by the annexing jurisdiction and submitted to the commissioner for purposes of this
87.17 subdivision if the net tax capacity of annexed area for the assessment year preceding the
87.18 effective date of the annexation exceeds five percent of the city's net tax capacity for the
87.19 same year. The form and contents of the annexation information report shall be prescribed
87.20 by the commissioner. The commissioner shall change the net tax capacity, the population,
87.21 the population decline, the commercial industrial percentage, and the transformed
87.22 population for the annexing jurisdiction only if the annexation information report provides
87.23 data the commissioner determines to be reliable for all of these factors used to compute city
87.24 revenue need for the annexing jurisdiction. The commissioner shall adjust the pre-1940
87.25 housing percentage, the road accidents factor, and household size only if the entire area of
87.26 an existing city or town is annexed or consolidated and only if reliable data is available for
87.27 all of these factors used to compute city revenue need for the annexing jurisdiction.
87.28 EFFECTIVE DATE.This section is effective for aid payable in 2007 and thereafter.
87.29 ARTICLE 6
87.30 DEPARTMENT OF REVENUE SALES AND USE TAXES
87.31 Section 1. Minnesota Statutes 2005 Supplement, section 297A.61, subdivision 3,
87.32 is amended to read:
87.33 Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
87.34 to, each of the transactions listed in this subdivision.
88.1 (b) Sale and purchase include:
88.2 (1) any transfer of title or possession, or both, of tangible personal property, whether
88.3 absolutely or conditionally, for a consideration in money or by exchange or barter; and
88.4 (2) the leasing of or the granting of a license to use or consume, for a consideration
88.5 in money or by exchange or barter, tangible personal property, other than a manufactured
88.6 home used for residential purposes for a continuous period of 30 days or more.
88.7 (c) Sale and purchase include the production, fabrication, printing, or processing of
88.8 tangible personal property for a consideration for consumers who furnish either directly or
88.9 indirectly the materials used in the production, fabrication, printing, or processing.
88.10 (d) Sale and purchase include the preparing for a consideration of food.
88.11 Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
88.12 to, the following:
88.13 (1) prepared food sold by the retailer;
88.14 (2) soft drinks;
88.15 (3) candy;
88.16 (4) dietary supplements; and
88.17 (5) all food sold through vending machines.
88.18 (e) A sale and a purchase includes the furnishing for a consideration of electricity,
88.19 gas, water, or steam for use or consumption within this state.
88.20 (f) A sale and a purchase includes the transfer for a consideration of prewritten
88.21 computer software whether delivered electronically, by load and leave, or otherwise.
88.22 (g) A sale and a purchase includes the furnishing for a consideration of the following
88.23 services:
88.24 (1) the privilege of admission to places of amusement, recreational areas, or athletic
88.25 events, and the making available of amusement devices, tanning facilities, reducing
88.26 salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
88.27 (2) lodging and related services by a hotel, rooming house, resort, campground,
88.28 motel, or trailer camp and the granting of any similar license to use real property in a
88.29 specific facility, other than the renting or leasing of it for a continuous period of 30 days
88.30 or more under an enforceable written agreement that may not be terminated without
88.31 prior notice;
88.32 (3) nonresidential parking services, whether on a contractual, hourly, or other
88.33 periodic basis, except for parking at a meter;
88.34 (4) the granting of membership in a club, association, or other organization if:
89.1 (i) the club, association, or other organization makes available for the use of its
89.2 members sports and athletic facilities, without regard to whether a separate charge is
89.3 assessed for use of the facilities; and
89.4 (ii) use of the sports and athletic facility is not made available to the general public
89.5 on the same basis as it is made available to members.
89.6 Granting of membership means both onetime initiation fees and periodic membership
89.7 dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
89.8 squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
89.9 swimming pools; and other similar athletic or sports facilities;
89.10 (5) delivery of aggregate materials and concrete block by a third party if the delivery
89.11 would be subject to the sales tax if provided by the seller of the aggregate material or
89.12 concrete block; and
89.13 (6) services as provided in this clause:
89.14 (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
89.15 and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
89.16 drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
89.17 include services provided by coin operated facilities operated by the customer;
89.18 (ii) motor vehicle washing, waxing, and cleaning services, including services
89.19 provided by coin operated facilities operated by the customer, and rustproofing,
89.20 undercoating, and towing of motor vehicles;
89.21 (iii) building and residential cleaning, maintenance, and disinfecting and
89.22 exterminating services;
89.23 (iv) detective, security, burglar, fire alarm, and armored car services; but not
89.24 including services performed within the jurisdiction they serve by off-duty licensed peace
89.25 officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit
89.26 organization for monitoring and electronic surveillance of persons placed on in-home
89.27 detention pursuant to court order or under the direction of the Minnesota Department
89.28 of Corrections;
89.29 (v) pet grooming services;
89.30 (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
89.31 and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
89.32 plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
89.33 clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
89.34 public utility lines. Services performed under a construction contract for the installation of
89.35 shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
90.1 (vii) massages, except when provided by a licensed health care facility or
90.2 professional or upon written referral from a licensed health care facility or professional for
90.3 treatment of illness, injury, or disease; and
90.4 (viii) the furnishing of lodging, board, and care services for animals in kennels and
90.5 other similar arrangements, but excluding veterinary and horse boarding services.
90.6 In applying the provisions of this chapter, the terms "tangible personal property"
90.7 and "sales at retail sale" include taxable services listed in clause (6), items (i) to (vi) and
90.8 (viii), and the provision of these taxable services, unless specifically provided otherwise.
90.9 Services performed by an employee for an employer are not taxable. Services performed
90.10 by a partnership or association for another partnership or association are not taxable if one
90.11 of the entities owns or controls more than 80 percent of the voting power of the equity
90.12 interest in the other entity. Services performed between members of an affiliated group of
90.13 corporations are not taxable. For purposes of the preceding sentence, "affiliated group
90.14 of corporations" includes means those entities that would be classified as members of an
90.15 affiliated group as defined under United States Code, title 26, section 1504, and that are
90.16 eligible to file a consolidated tax return for federal income tax purposes disregarding
90.17 the exclusions in section 1504(b).
90.18 (h) A sale and a purchase includes the furnishing for a consideration of tangible
90.19 personal property or taxable services by the United States or any of its agencies or
90.20 instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
90.21 subdivisions.
90.22 (i) A sale and a purchase includes the furnishing for a consideration of
90.23 telecommunications services, including cable television services and direct satellite
90.24 services. Telecommunications services are taxed to the extent allowed under federal law.
90.25 (j) A sale and a purchase includes the furnishing for a consideration of installation if
90.26 the installation charges would be subject to the sales tax if the installation were provided
90.27 by the seller of the item being installed.
90.28 (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
90.29 to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
90.30 the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
90.31 65B.29, subdivision 1, clause (1).
90.32 EFFECTIVE DATE.This section is effective the day following final enactment.
90.33 Sec. 2. Minnesota Statutes 2004, section 297A.61, subdivision 12, is amended to read:
90.34 Subd. 12. Farm machinery. (a) "Farm machinery" means new or used machinery,
90.35 equipment, implements, accessories, and contrivances used directly and principally in
91.1 agricultural production of tangible personal property intended to be sold ultimately at
91.2 retail including, but not limited to:
91.3 (1) machinery for the preparation, seeding, or cultivation of soil for growing
91.4 agricultural crops;
91.5 (2) barn cleaners, milking systems, grain dryers, feeding systems including
91.6 stationary feed bunks, and similar installations, whether or not the equipment is installed
91.7 by the seller and becomes part of the real property; and
91.8 (3) irrigation equipment sold for exclusively agricultural use, including pumps, pipe
91.9 fittings, valves, sprinklers, and other equipment necessary to the operation of an irrigation
91.10 system when sold as part of an irrigation system, whether or not the equipment is installed
91.11 by the seller and becomes part of the real property.
91.12 (b) Farm machinery does not include:
91.13 (1) repair or replacement parts;
91.14 (2) tools, shop equipment, grain bins, fencing material, communication equipment,
91.15 and other farm supplies;
91.16 (3) motor vehicles taxed under chapter 297B;
91.17 (4) snowmobiles or snow blowers;
91.18 (5) lawn mowers except those used in the production of sod for sale, or garden-type
91.19 tractors or garden tillers; or
91.20 (6) machinery, equipment, implements, accessories, and contrivances used directly in
91.21 the production of horses not raised for slaughter, fur-bearing animals, or research animals.
91.22 EFFECTIVE DATE.This section is effective the day following final enactment.
91.23 Sec. 3. Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision
91.24 to read:
91.25 Subd. 16a. Computer. "Computer" means an electronic device that accepts
91.26 information in digital or similar form and manipulates it for a result based on a sequence
91.27 of instructions.
91.28 EFFECTIVE DATE.This section is effective the day following final enactment.
91.29 Sec. 4. Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision
91.30 to read:
91.31 Subd. 16b. Electronic. "Electronic" means relating to technology having electrical,
91.32 digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
91.33 EFFECTIVE DATE.This section is effective the day following final enactment.
92.1 Sec. 5. Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision
92.2 to read:
92.3 Subd. 16c. Computer software. "Computer software" means a set of coded
92.4 instructions designed to cause a computer or automatic data processing equipment to
92.5 perform a task.
92.6 EFFECTIVE DATE.This section is effective the day following final enactment.
92.7 Sec. 6. Minnesota Statutes 2004, section 297A.61, subdivision 17, is amended to read:
92.8 Subd. 17. Prewritten computer software. "Prewritten computer software" means
92.9 computer software, including prewritten upgrades, that is not designed and developed by
92.10 the author or other creator to the specifications of a specific purchaser. The combining
92.11 of two or more "prewritten computer software" programs or prewritten portions of the
92.12 programs does not cause the combination to be other than "prewritten computer software."
92.13 "Prewritten computer software" includes software designed and developed by the author
92.14 or other creator to the specifications of a specific purchaser when it is sold to a person
92.15 other than the specific purchaser. If a person modifies or enhances computer software
92.16 of which the person is not the author or creator, the person is deemed to be the author
92.17 or creator only of such person's modifications or enhancements. "Prewritten computer
92.18 software" or a prewritten portion of it that is modified or enhanced to any degree, if the
92.19 modification or enhancement is designed and developed to the specifications of a specific
92.20 purchaser, remains "prewritten computer software"; provided, however, that if there is a
92.21 reasonable, separately stated charge or an invoice or other statement of the price given to
92.22 the purchaser for such modification or enhancement, the modification or enhancement
92.23 does not constitute "prewritten computer software." For purposes of this subdivision:
92.24 (1) "computer" means an electronic device that accepts information in digital or
92.25 similar form and manipulates it for a result based on a sequence of instructions;
92.26 (2) "electronic" means relating to technology having electrical, digital, magnetic,
92.27 wireless, optical, electromagnetic, or similar capabilities; and
92.28 (3) "computer software" means a set of coded instructions designed to cause a
92.29 "computer" or automatic data processing equipment to perform a task.
92.30 EFFECTIVE DATE.This section is effective the day following final enactment.
92.31 Sec. 7. Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision
92.32 to read:
93.1 Subd. 37. Logging equipment. (a) "Logging equipment" means new or used
93.2 machinery, equipment, implements, accessories, and contrivances used directly and
93.3 principally in the commercial cutting or removal or both of timber or other solid wood
93.4 forest products, including, but not limited to:
93.5 (1) machinery used for bucking, bunching, debarking, delimbing, felling, forwarding,
93.6 loading, piling, skidding, topping, and yarding operations performed on timber; and
93.7 (2) chain saws.
93.8 (b) Logging equipment does not include:
93.9 (1) repair or replacement parts;
93.10 (2) tools, shop equipment, communication equipment, and other logging supplies;
93.11 (3) motor vehicles taxed under chapter 297B;
93.12 (4) snowmobiles, snow blowers, or recreational all-terrain vehicles; or
93.13 (5) machinery, equipment, implements, accessories, and contrivances used in the
93.14 creation of other commercial wood products for sale to others, including, but not limited
93.15 to, milling, planing, carving, wood chipping, or paper manufacturing.
93.16 EFFECTIVE DATE.This section is effective the day following final enactment.
93.17 Sec. 8. Minnesota Statutes 2004, section 297A.63, is amended to read:
93.18 297A.63 USE TAXES IMPOSED; RATES.
93.19 Subdivision 1. Use of tangible personal property or taxable services. (a) For the
93.20 privilege of using, storing, distributing, or consuming in Minnesota tangible personal
93.21 property or taxable services purchased for use, storage, distribution, or consumption in
93.22 this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the sales
93.23 purchase price of retail sales of the tangible personal property or taxable services at the
93.24 rate of tax imposed under section 297A.62. A person that purchases property from a
93.25 Minnesota retailer and returns the tangible personal property to a point within Minnesota,
93.26 except in the course of interstate commerce, after it was delivered outside of Minnesota,
93.27 is subject to the use tax.
93.28 (b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62
93.29 was paid on the sales price of the tangible personal property or taxable services.
93.30 (c) No tax is imposed under paragraph (a) if the purchase meets the requirements for
93.31 exemption under section 297A.67, subdivision 21.
93.32 Subd. 2. Use of tangible personal property made from materials. (a) A use tax
93.33 is imposed on a person who manufactures, fabricates, or assembles tangible personal
93.34 property from materials, either within or outside this state and who uses, stores, distributes,
94.1 or consumes the tangible personal property in Minnesota. The tax is imposed on the sales
94.2 purchase price of retail sales of the materials contained in the tangible personal property at
94.3 the rate of tax imposed under section 297A.62.
94.4 (b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62
94.5 was paid on the sales price of materials contained in the tangible personal property.
94.6 EFFECTIVE DATE.This section is effective the day following final enactment.
94.7 Sec. 9. Minnesota Statutes 2004, section 297A.668, subdivision 6, is amended to read:
94.8 Subd. 6. Multiple points of use. (a) Notwithstanding the provisions of subdivisions
94.9 2 to 5, a business purchaser that is not a holder of a direct pay permit that knows at the
94.10 time of its purchase of a digital good, computer software delivered electronically, or a
94.11 service that the digital good, computer software delivered electronically, or service will
94.12 be concurrently available for use in more than one taxing jurisdiction shall deliver to
94.13 the seller in conjunction with its purchase a multiple points of use exemption certificate
94.14 disclosing this fact.
94.15 (b) Upon receipt of the multiple points of use exemption certificate, the seller is
94.16 relieved of the obligation to collect, pay, or remit the applicable tax and the purchaser is
94.17 obligated to collect, pay, or remit the applicable tax on a direct pay basis.
94.18 (c) A purchaser delivering the multiple points of use exemption certificate may use
94.19 any reasonable, but consistent and uniform, method of apportionment that is supported by
94.20 the purchaser's business records as they exist at the time of the consummation of the sale.
94.21 (d) The multiple points of use exemption certificate remains in effect for all future
94.22 sales by the seller to the purchaser until it is revoked in writing, except as to the subsequent
94.23 sale's specific apportionment that is governed by the principle of paragraph (c) and the
94.24 facts existing at the time of the sale.
94.25 (e) A holder of a direct pay permit is not required to deliver a multiple points or use
94.26 exemption certificate to the seller. A direct pay permit holder shall follow the provisions
94.27 of paragraph (c) in apportioning the tax due on a digital good, computer software delivered
94.28 electronically, or a service that will be concurrently available for use in more than one
94.29 taxing jurisdiction.
94.30 EFFECTIVE DATE.This section is effective the day following final enactment.
94.31 Sec. 10. Minnesota Statutes 2004, section 297A.669, subdivision 11, is amended to
94.32 read:
95.1 Subd. 11. Mobile telecommunications service. "Mobile telecommunications
95.2 service," for purposes of this section, means the same as that term is defined in Section
95.3 124(1) 124(7) of Public Law 106-252 (Mobile Telecommunications Sourcing Act).
95.4 EFFECTIVE DATE.This section is effective the day following final enactment.
95.5 Sec. 11. Minnesota Statutes 2004, section 297A.67, subdivision 4, is amended to read:
95.6 Subd. 4. Exempt meals at residential facilities. Meals or Prepared food, candy,
95.7 and soft drinks served to patients, inmates, or persons residing at hospitals, sanitariums,
95.8 nursing homes, senior citizen homes, and correctional, detention, and detoxification
95.9 facilities are exempt. Food sold through vending machines is not exempt.
95.10 EFFECTIVE DATE.This section is effective the day following final enactment.
95.11 Sec. 12. Minnesota Statutes 2004, section 297A.67, subdivision 5, is amended to read:
95.12 Subd. 5. Exempt meals at schools. Meals and lunches Prepared food, candy,
95.13 and soft drinks served at public and private elementary, middle, or secondary schools as
95.14 defined in section 120A.05 are exempt. Meals and lunches Prepared food, candy, and soft
95.15 drinks served to students at a college, university, or private career school under a board
95.16 contract are exempt. For purposes of this subdivision, "meals and lunches" does not
95.17 include sales from vending machines. Food sold through vending machines is not exempt.
95.18 EFFECTIVE DATE.This section is effective the day following final enactment.
95.19 Sec. 13. Minnesota Statutes 2005 Supplement, section 297A.67, subdivision 6, is
95.20 amended to read:
95.21 Subd. 6. Other exempt meals. (a) Meals or Prepared food, candy, and soft drinks
95.22 purchased for and served exclusively to individuals who are 60 years of age or over and
95.23 their spouses or to handicapped persons and their spouses by governmental agencies,
95.24 nonprofit organizations, or churches, or pursuant to any program funded in whole or in
95.25 part through United States Code, title 42, sections 3001 through 3045, wherever delivered,
95.26 prepared, or served, are exempt. Food sold through vending machines is not exempt.
95.27 (b) Meals or Prepared food, candy, and soft drinks purchased for and served
95.28 exclusively to children who are less than 14 years of age or disabled children who are less
95.29 than 16 years of age and who are attending a child care or early childhood education
95.30 program, are exempt if they are:
96.1 (1) purchased by a nonprofit child care facility that is exempt under section 297A.70,
96.2 subdivision 4, and that primarily serves families with income of 250 percent or less of
96.3 federal poverty guidelines; and
96.4 (2) prepared at the site of the child care facility.
96.5 EFFECTIVE DATE.This section is effective the day following final enactment.
96.6 Sec. 14. Minnesota Statutes 2004, section 297A.67, subdivision 14, is amended to read:
96.7 Subd. 14. Personal Computers prescribed for use by school. Personal Computers
96.8 and related computer software sold by a school, college, university, or private career
96.9 school to students who are enrolled at the institutions are exempt if:
96.10 (1) the use of the personal computer, or of a substantially similar model of computer,
96.11 and the related computer software is prescribed by the institution in conjunction with a
96.12 course of study; and
96.13 (2) each student of the institution, or of a unit of the institution in which the student
96.14 is enrolled, is required by the institution to have such a personal computer and related
96.15 software as a condition of enrollment.
96.16 For the purposes of this subdivision, "school" and "private career school" have the
96.17 meanings given in subdivision 13.
96.18 EFFECTIVE DATE.This section is effective the day following final enactment.
96.19 Sec. 15. Minnesota Statutes 2004, section 297A.67, subdivision 27, is amended to read:
96.20 Subd. 27. Sewing materials. Sewing materials are exempt. For purposes of this
96.21 subdivision "sewing materials" mean fabric, thread, zippers, interfacing, buttons, trim,
96.22 and other items that are usually directly incorporated into the construction of clothing, as
96.23 defined in subdivision 8, regardless of whether it is actually used for making clothing.
96.24 It does not include batting, foam, or fabric specifically manufactured for arts and craft
96.25 projects, or other materials for craft projects.
96.26 EFFECTIVE DATE.This section is effective the day following final enactment.
96.27 Sec. 16. Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 37,
96.28 is amended to read:
96.29 Subd. 37. Job opportunity building zones. (a) Purchases of tangible personal
96.30 property or taxable services by a qualified business, as defined in section 469.310, are
96.31 exempt if the property or services are primarily used or consumed in a job opportunity
96.32 building zone designated under section 469.314. For purposes of this subdivision, an aerial
97.1 camera package, including any camera, computer, and navigation device contained in the
97.2 package, that is used in an aircraft that is operated under a Federal Aviation Administration
97.3 Restricted Airworthiness Certificate according to Code of Federal Regulations, title 14,
97.4 part 21, section 21.25(b)(3), relating to aerial surveying, and that is based, maintained, and
97.5 dispatched from a job opportunity building zone, qualifies as primarily used or consumed
97.6 in a job opportunity building zone if the imagery acquired from the aerial camera package
97.7 is returned to the job opportunity building zone for processing. The exemption for an
97.8 aerial camera package is limited to $50,000 in taxes as provided in this subdivision and
97.9 the tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
97.10 applied and then refunded in the manner provided in section 297A.75. The total amount
97.11 of the aerial camera package exemption refunded for all taxpayers for all fiscal years is
97.12 limited to $50,000 in taxes.
97.13 (b) Purchase and use of construction materials, and supplies, or equipment used or
97.14 consumed in, and equipment incorporated into, the construction of improvements to
97.15 real property in a job opportunity building zone are exempt if the improvements after
97.16 completion of construction are to be used in the conduct of a qualified business, as defined
97.17 in section 469.310. This exemption applies regardless of whether the purchases are made
97.18 by the business or a contractor.
97.19 (c) The exemptions under this subdivision apply to a local sales and use tax
97.20 regardless of whether the local sales tax is imposed on the sales taxable as defined under
97.21 this chapter.
97.22 (d) This subdivision applies to sales, if the purchase was made and delivery received
97.23 during the duration of the zone.
97.24 (e) Notwithstanding the restriction in paragraph (a), which requires items purchased
97.25 to be primarily used or consumed in the zone, purchases by a qualified business that is
97.26 an electrical cooperative located in Meeker County of equipment and materials used for
97.27 the generation, transmission, and distribution of electrical energy are exempt under this
97.28 subdivision, except that:
97.29 (1) the exemption for materials and equipment used or consumed outside the zone
97.30 must not exceed $200,000 in taxes for all taxpayers for all fiscal years; and
97.31 (2) no sales and use tax exemption is allowed for equipment purchased for resale.
97.32 For purposes of this paragraph, the tax must be imposed and collected as if the rate
97.33 under section 297A.62, subdivision 1, applied and then refunded in the manner provided
97.34 in section 297A.75.
98.1 EFFECTIVE DATE.Paragraphs (a) and (e) are effective for sales and purchases
98.2 made on or after August 1, 2005. Paragraph (b) is effective for sales and purchases made
98.3 on or after January 1, 2004.
98.4 Sec. 17. Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 38,
98.5 is amended to read:
98.6 Subd. 38. Biotechnology and health sciences industry zone. (a) Purchases of
98.7 tangible personal property or taxable services by a qualified business, as defined in section
98.8 469.330, are exempt if the property or services are primarily used or consumed in a
98.9 biotechnology and health sciences industry zone designated under section 469.334.
98.10 (b) Purchase and use of construction materials, and supplies, or equipment used
98.11 or consumed in, and equipment incorporated into, the construction of improvements
98.12 to real property in a biotechnology and health sciences industry zone are exempt if the
98.13 improvements after completion of construction are to be used in the conduct of a qualified
98.14 business, as defined in section 469.330. This exemption applies regardless of whether the
98.15 purchases are made by the business or a contractor.
98.16 (c) The exemptions under this subdivision apply to a local sales and use tax
98.17 regardless of whether the local sales tax is imposed on the sales taxable as defined under
98.18 this chapter.
98.19 (d)(1) The tax on sales of goods or services exempted under this subdivision are
98.20 imposed and collected as if the applicable rate under section 297A.62 applied. Upon
98.21 application by the purchaser, on forms prescribed by the commissioner, a refund equal
98.22 to the tax paid must be paid to the purchaser. The application must include sufficient
98.23 information to permit the commissioner to verify the sales tax paid and the eligibility of
98.24 the claimant to receive the credit. No more than two applications for refunds may be filed
98.25 under this subdivision in a calendar year. The provisions of section 289A.40 apply to
98.26 the refunds payable under this subdivision.
98.27 (2) The amount required to make the refunds is annually appropriated to the
98.28 commissioner of revenue.
98.29 (3) The aggregate amount refunded to a qualified business must not exceed the
98.30 amount allocated to the qualified business under section 469.335.
98.31 (e) This subdivision applies only to sales made during the duration of the designation
98.32 of the zone.
98.33 EFFECTIVE DATE.This section is effective for sales and purchases made on
98.34 or after January 1, 2004.
99.1 Sec. 18. Minnesota Statutes 2004, section 297A.70, subdivision 2, is amended to read:
99.2 Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
99.3 to the following governments and political subdivisions, or to the listed agencies or
99.4 instrumentalities of governments and political subdivisions, are exempt:
99.5 (1) the United States and its agencies and instrumentalities;
99.6 (2) school districts, the University of Minnesota, state universities, community
99.7 colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
99.8 Education, and an instrumentality of a political subdivision that is accredited as an
99.9 optional/special function school by the North Central Association of Colleges and Schools;
99.10 (3) hospitals and nursing homes owned and operated by political subdivisions of
99.11 the state of tangible personal property and taxable services used at or by hospitals and
99.12 nursing homes;
99.13 (4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
99.14 operations provided for in section 473.4051;
99.15 (5) other states or political subdivisions of other states, if the sale would be exempt
99.16 from taxation if it occurred in that state; and
99.17 (6) sales to public libraries, public library systems, multicounty, multitype library
99.18 systems as defined in section 134.001, county law libraries under chapter 134A, state
99.19 agency libraries, the state library under section 480.09, and the Legislative Reference
99.20 Library.
99.21 (b) This exemption does not apply to the sales of the following products and services:
99.22 (1) building, construction, or reconstruction materials purchased by a contractor
99.23 or a subcontractor as a part of a lump-sum contract or similar type of contract with a
99.24 guaranteed maximum price covering both labor and materials for use in the construction,
99.25 alteration, or repair of a building or facility;
99.26 (2) construction materials purchased by tax exempt entities or their contractors to
99.27 be used in constructing buildings or facilities which will not be used principally by the
99.28 tax exempt entities;
99.29 (3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5,
99.30 except for leases entered into by the United States or its agencies or instrumentalities; or
99.31 (4) meals and lodging as defined under section 297A.61, subdivision 3, paragraphs
99.32 (d) and (g) paragraph (g), clause (2), and prepared food, candy, and soft drinks, except for
99.33 meals and lodging, prepared food, candy, and soft drinks purchased directly by the United
99.34 States or its agencies or instrumentalities.
100.1 (c) As used in this subdivision, "school districts" means public school entities and
100.2 districts of every kind and nature organized under the laws of the state of Minnesota, and
100.3 any instrumentality of a school district, as defined in section 471.59.
100.4 EFFECTIVE DATE.This section is effective the day following final enactment.
100.5 Sec. 19. Minnesota Statutes 2004, section 297A.70, subdivision 3, is amended to read:
100.6 Subd. 3. Sales of certain goods and services to government. (a) The following
100.7 sales to or use by the specified governments and political subdivisions of the state are
100.8 exempt:
100.9 (1) repair and replacement parts for emergency rescue vehicles, fire trucks, and
100.10 fire apparatus to a political subdivision;
100.11 (2) machinery and equipment, except for motor vehicles, used directly for mixed
100.12 municipal solid waste management services at a solid waste disposal facility as defined in
100.13 section 115A.03, subdivision 10;
100.14 (3) chore and homemaking services to a political subdivision of the state to be
100.15 provided to elderly or disabled individuals;
100.16 (4) telephone services to the Department of Administration that are used to provide
100.17 telecommunications services through the intertechnologies revolving fund;
100.18 (5) firefighter personal protective equipment as defined in paragraph (b), if purchased
100.19 or authorized by and for the use of an organized fire department, fire protection district, or
100.20 fire company regularly charged with the responsibility of providing fire protection to the
100.21 state or a political subdivision;
100.22 (6) bullet-resistant body armor that provides the wearer with ballistic and trauma
100.23 protection, if purchased by a law enforcement agency of the state or a political subdivision
100.24 of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;
100.25 (7) motor vehicles purchased or leased by political subdivisions of the state if the
100.26 vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b),
100.27 exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax
100.28 under section 297B.03, clause (12);
100.29 (8) equipment designed to process, dewater, and recycle biosolids for wastewater
100.30 treatment facilities of political subdivisions, and materials incidental to installation of
100.31 that equipment; and
100.32 (9) sales to a town of gravel and of machinery, equipment, and accessories, except
100.33 motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of
100.34 motor vehicles exempt from tax under section 297B.03, clause (10).; and
101.1 (10) the removal of trees, bushes, or shrubs for the construction and maintenance
101.2 of roads, trails, or firebreaks when purchased by an agency of the state or a political
101.3 subdivision of the state.
101.4 (b) For purposes of this subdivision, "firefighters personal protective equipment"
101.5 means helmets, including face shields, chin straps, and neck liners; bunker coats and
101.6 pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets;
101.7 protective coveralls; goggles; self-contained breathing apparatus; canister filter masks;
101.8 personal alert safety systems; spanner belts; optical or thermal imaging search devices;
101.9 and all safety equipment required by the Occupational Safety and Health Administration.
101.10 EFFECTIVE DATE.This section is effective for sales and purchases made after
101.11 October 28, 2002, but for sales and purchases made after October 28, 2002, and before
101.12 July 15, 2005, no refunds may be claimed under Minnesota Statutes, section 289A.50, for
101.13 sales taxes collected and remitted to the state.
101.14 Sec. 20. Minnesota Statutes 2004, section 297A.70, subdivision 4, is amended to read:
101.15 Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
101.16 (b), to the following "nonprofit organizations" are exempt:
101.17 (1) a corporation, society, association, foundation, or institution organized and
101.18 operated exclusively for charitable, religious, or educational purposes if the item
101.19 purchased is used in the performance of charitable, religious, or educational functions; and
101.20 (2) any senior citizen group or association of groups that:
101.21 (i) in general limits membership to persons who are either age 55 or older, or
101.22 physically disabled; and
101.23 (ii) is organized and operated exclusively for pleasure, recreation, and other
101.24 nonprofit purposes, no part of the net earnings of which inures to the benefit of any private
101.25 shareholders.
101.26 For purposes of this subdivision, charitable purpose includes the maintenance of a
101.27 cemetery owned by a religious organization.
101.28 (b) This exemption does not apply to the following sales:
101.29 (1) building, construction, or reconstruction materials purchased by a contractor
101.30 or a subcontractor as a part of a lump-sum contract or similar type of contract with a
101.31 guaranteed maximum price covering both labor and materials for use in the construction,
101.32 alteration, or repair of a building or facility;
102.1 (2) construction materials purchased by tax-exempt entities or their contractors to
102.2 be used in constructing buildings or facilities that will not be used principally by the
102.3 tax-exempt entities; and
102.4 (3) meals and lodging as defined under section 297A.61, subdivision 3, paragraphs
102.5 (d) and (g) paragraph (g), clause (2), and prepared food, candy, and soft drinks; and
102.6 (4) leasing of a motor vehicle as defined in section 297B.01, subdivision 5, except as
102.7 provided in paragraph (c).
102.8 (c) This exemption applies to the leasing of a motor vehicle as defined in section
102.9 297B.01, subdivision 5, only if the vehicle is:
102.10 (1) a truck, as defined in section 168.011, a bus, as defined in section 168.011, or a
102.11 passenger automobile, as defined in section 168.011, if the automobile is designed and
102.12 used for carrying more than nine persons including the driver; and
102.13 (2) intended to be used primarily to transport tangible personal property or
102.14 individuals, other than employees, to whom the organization provides service in
102.15 performing its charitable, religious, or educational purpose.
102.16 (d) A limited liability company also qualifies for exemption under this subdivision if
102.17 (1) it consists of a sole member that would qualify for the exemption, and (2) the items
102.18 purchased qualify for the exemption.
102.19 EFFECTIVE DATE.This section is effective the day following final enactment.
102.20 Sec. 21. Minnesota Statutes 2004, section 297A.70, subdivision 7, is amended to read:
102.21 Subd. 7. Hospitals and outpatient surgical centers. (a) Sales, except for those
102.22 listed in paragraph (c), to a hospital are exempt, if the items purchased are used in
102.23 providing hospital services. For purposes of this subdivision, "hospital" means a hospital
102.24 organized and operated for charitable purposes within the meaning of section 501(c)(3) of
102.25 the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction,
102.26 and "hospital services" are services authorized or required to be performed by a "hospital"
102.27 under chapter 144.
102.28 (b) Sales, except for those listed in paragraph (c), to an outpatient surgical center
102.29 are exempt, if the items purchased are used in providing outpatient surgical services. For
102.30 purposes of this subdivision, "outpatient surgical center" means an outpatient surgical
102.31 center organized and operated for charitable purposes within the meaning of section
102.32 501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other
102.33 jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means:
102.34 (1) services authorized or required to be performed by an outpatient surgical center under
102.35 chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means
103.1 health services furnished to a person whose medical condition is sufficiently acute to
103.2 require treatment unavailable through, or inappropriate to be provided by, a clinic or
103.3 physician's office, but not so acute as to require treatment in a hospital emergency room.
103.4 (c) This exemption does not apply to the following products and services:
103.5 (1) purchases made by a clinic, physician's office, or any other medical facility not
103.6 operating as a hospital or outpatient surgical center, even though the clinic, office, or
103.7 facility may be owned and operated by a hospital or outpatient surgical center;
103.8 (2) sales under section 297A.61, subdivision 3, paragraphs (d) and (g) paragraph
103.9 (g), clause (2), and prepared food, candy, and soft drinks;
103.10 (3) building and construction materials used in constructing buildings or facilities
103.11 that will not be used principally by the hospital or outpatient surgical center;
103.12 (4) building, construction, or reconstruction materials purchased by a contractor
103.13 or a subcontractor as a part of a lump-sum contract or similar type of contract with a
103.14 guaranteed maximum price covering both labor and materials for use in the construction,
103.15 alteration, or repair of a hospital or outpatient surgical center; or
103.16 (5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5.
103.17 (d) A limited liability company also qualifies for exemption under this subdivision if
103.18 (1) it consists of a sole member that would qualify for the exemption, and (2) the items
103.19 purchased qualify for the exemption.
103.20 EFFECTIVE DATE.This section is effective the day following final enactment.
103.21 Sec. 22. Minnesota Statutes 2004, section 297A.70, subdivision 13, is amended to read:
103.22 Subd. 13. Fund-raising sales by or for nonprofit groups. (a) The following
103.23 sales by the specified organizations for fund-raising purposes are exempt, subject to the
103.24 limitations listed in paragraph (b):
103.25 (1) all sales made by an organization that exists solely for the purpose of providing
103.26 educational or social activities for young people primarily age 18 and under;
103.27 (2) all sales made by an organization that is a senior citizen group or association of
103.28 groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized
103.29 and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii)
103.30 no part of its net earnings inures to the benefit of any private shareholders;
103.31 (3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if
103.32 the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization
103.33 under section 501(c)(3) of the Internal Revenue Code; and
104.1 (4) sales of gum, candy, and candy products sold for fund-raising purposes by a
104.2 nonprofit organization that provides educational and social activities primarily for young
104.3 people age 18 and under.
104.4 (b) The exemptions listed in paragraph (a) are limited in the following manner:
104.5 (1) the exemption under paragraph (a), clauses (1) and (2), applies only if the gross
104.6 annual receipts of the organization from fund-raising do not exceed $10,000; and
104.7 (2) the exemption under paragraph (a), clause (1), does not apply if the sales are
104.8 derived from admission charges or from activities for which the money must be deposited
104.9 with the school district treasurer under section 123B.49, subdivision 2, or be recorded in
104.10 the same manner as other revenues or expenditures of the school district under section
104.11 123B.49, subdivision 4.
104.12 (c) Sales of tangible personal property are exempt if the entire proceeds, less the
104.13 necessary expenses for obtaining the property, will be contributed to a registered combined
104.14 charitable organization described in section 309.501, to be used exclusively for charitable,
104.15 religious, or educational purposes, and the registered combined charitable organization
104.16 has given its written permission for the sale. Sales that occur over a period of more than
104.17 24 days per year are not exempt under this paragraph.
104.18 (d) For purposes of this subdivision, a club, association, or other organization of
104.19 elementary or secondary school students organized for the purpose of carrying on sports,
104.20 educational, or other extracurricular activities is a separate organization from the school
104.21 district or school for purposes of applying the $10,000 limit.
104.22 EFFECTIVE DATE.This section is effective the day following final enactment.
104.23 Sec. 23. Minnesota Statutes 2004, section 297A.70, subdivision 14, is amended to read:
104.24 Subd. 14. Fund-raising events sponsored by nonprofit groups. (a) Sales of
104.25 tangible personal property at, and admission charges for fund-raising events sponsored
104.26 by, a nonprofit organization are exempt if:
104.27 (1) all gross receipts are recorded as such, in accordance with generally accepted
104.28 accounting practices, on the books of the nonprofit organization; and
104.29 (2) the entire proceeds, less the necessary expenses for the event, will be used
104.30 solely and exclusively for charitable, religious, or educational purposes. Exempt sales
104.31 include the sale of food, meals, and drinks prepared food, candy, and soft drinks at the
104.32 fund-raising event.
104.33 (b) This exemption is limited in the following manner:
105.1 (1) it does not apply to admission charges for events involving bingo or other
105.2 gambling activities or to charges for use of amusement devices involving bingo or other
105.3 gambling activities;
105.4 (2) all gross receipts are taxable if the profits are not used solely and exclusively for
105.5 charitable, religious, or educational purposes;
105.6 (3) it does not apply unless the organization keeps a separate accounting record,
105.7 including receipts and disbursements from each fund-raising event that documents all
105.8 deductions from gross receipts with receipts and other records;
105.9 (4) it does not apply to any sale made by or in the name of a nonprofit corporation as
105.10 the active or passive agent of a person that is not a nonprofit corporation;
105.11 (5) all gross receipts are taxable if fund-raising events exceed 24 days per year;
105.12 (6) it does not apply to fund-raising events conducted on premises leased for more
105.13 than five days but less than 30 days; and
105.14 (7) it does not apply if the risk of the event is not borne by the nonprofit organization
105.15 and the benefit to the nonprofit organization is less than the total amount of the state and
105.16 local tax revenues foregone by this exemption.
105.17 (c) For purposes of this subdivision, a "nonprofit organization" means any unit of
105.18 government, corporation, society, association, foundation, or institution organized and
105.19 operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
105.20 veterans' purposes, no part of the net earnings of which inures to the benefit of a private
105.21 individual.
105.22 EFFECTIVE DATE.This section is effective the day following final enactment.
105.23 Sec. 24. Minnesota Statutes 2004, section 297A.70, subdivision 15, is amended to read:
105.24 Subd. 15. Statewide amateur athletic games. Notwithstanding section 297A.61,
105.25 subdivision 3, or any other provision of this chapter, the gross receipts from the following
105.26 sales made to or by a nonprofit corporation designated by the Minnesota Amateur Sports
105.27 Commission to conduct a series of statewide amateur athletic games and related events,
105.28 workshops, and clinics are exempt:
105.29 (1) sales of tangible personal property to or the storage, use, or other consumption of
105.30 tangible personal property by the nonprofit corporation; and
105.31 (2) sales of tangible personal property, admission charges, and sales of food,
105.32 meals, and drinks prepared food, candy, and soft drinks by the nonprofit corporation at
105.33 fund-raising events, athletic events, or athletic facilities.
105.34 EFFECTIVE DATE.This section is effective the day following final enactment.
106.1 Sec. 25. Minnesota Statutes 2005 Supplement, section 297A.72, subdivision 2, is
106.2 amended to read:
106.3 Subd. 2. Content and form of exemption certificate. An exemption certificate
106.4 must be substantially in the form prescribed by the commissioner and:
106.5 (1) be signed by the purchaser or meet the requirements of section 270C.304;
106.6 (2) bear the name and address of the purchaser; and
106.7 (3) indicate the sales tax account number, if any, issued to the purchaser;.
106.8 (4) indicate the general character of the property sold by the purchaser in the regular
106.9 course of business or the activities carried on by the organization; and
106.10 (5) identify the property purchased.
106.11 EFFECTIVE DATE.This section is effective the day following final enactment.
106.12 Sec. 26. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 1, is
106.13 amended to read:
106.14 Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
106.15 following exempt items must be imposed and collected as if the sale were taxable and the
106.16 rate under section 297A.62, subdivision 1, applied. The exempt items include:
106.17 (1) capital equipment exempt under section 297A.68, subdivision 5;
106.18 (2) building materials for an agricultural processing facility exempt under section
106.19 297A.71, subdivision 13;
106.20 (3) building materials for mineral production facilities exempt under section
106.21 297A.71, subdivision 14;
106.22 (4) building materials for correctional facilities under section 297A.71, subdivision
106.23 3;
106.24 (5) building materials used in a residence for disabled veterans exempt under section
106.25 297A.71, subdivision 11;
106.26 (6) elevators and building materials exempt under section 297A.71, subdivision 12;
106.27 (7) building materials for the Long Lake Conservation Center exempt under section
106.28 297A.71, subdivision 17;
106.29 (8) materials, supplies, fixtures, furnishings, and equipment for a county law
106.30 enforcement and family service center under section 297A.71, subdivision 26;
106.31 (9) materials and supplies for qualified low-income housing under section 297A.71,
106.32 subdivision 23; and
106.33 (10) materials, supplies, and equipment for municipal electric utility facilities under
106.34 section 297A.71, subdivision 35.;
107.1 (11) equipment and materials used for the generation, transmission, and distribution
107.2 of electrical energy and an aerial camera package exempt under section 297A.68,
107.3 subdivision 37; and
107.4 (12) tangible personal property and taxable services and construction materials,
107.5 supplies, and equipment exempt under section 297A.68, subdivision 41.
107.6 EFFECTIVE DATE.This section is effective the day following final enactment.
107.7 Sec. 27. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 2, is
107.8 amended to read:
107.9 Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
107.10 commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
107.11 must be paid to the applicant. Only the following persons may apply for the refund:
107.12 (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
107.13 (2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental
107.14 subdivision;
107.15 (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
107.16 provided in United States Code, title 38, chapter 21;
107.17 (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
107.18 property;
107.19 (5) for subdivision 1, clause (9), the owner of the qualified low-income housing
107.20 project; and
107.21 (6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or
107.22 a joint venture of municipal electric utilities.; and
107.23 (7) for subdivision 1, clauses (11) and (12), the owner of the qualifying business.
107.24 EFFECTIVE DATE.This section is effective the day following final enactment.
107.25 Sec. 28. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 3, is
107.26 amended to read:
107.27 Subd. 3. Application. (a) The application must include sufficient information
107.28 to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
107.29 subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), or (10),
107.30 (11), or (12), the contractor, subcontractor, or builder must furnish to the refund applicant
107.31 a statement including the cost of the exempt items and the taxes paid on the items unless
107.32 otherwise specifically provided by this subdivision. The provisions of sections 289A.40
107.33 and 289A.50 apply to refunds under this section.
108.1 (b) An applicant may not file more than two applications per calendar year for
108.2 refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
108.3 EFFECTIVE DATE.This section is effective the day following final enactment.
108.4 Sec. 29. Minnesota Statutes 2005 Supplement, section 297A.815, subdivision 1,
108.5 is amended to read:
108.6 Subdivision 1. Motor vehicle lease price; payment. (a) In the case of a lease of a
108.7 motor vehicle as provided in section 297A.61, subdivision 4, paragraph (k), clause (2), the
108.8 tax is imposed on the total amount to be paid by the lessee under the lease agreement. The
108.9 lessor shall collect the tax in full at the time the lease is executed or, if the tax is included
108.10 in the lease and the lease is assigned, the tax is due from the original lessor at the time the
108.11 lease is assigned. The total amount to be paid by the lessee under the lease agreement
108.12 equals the agreed-upon value of the vehicle less manufacturer's rebates, the stated residual
108.13 value of the leased vehicle, and the total value allowed for a vehicle owned by the lessee
108.14 taken in trade by the lessor, plus the price of any taxable goods and services included in
108.15 the lease and the rent charge as provided by Code of Federal Regulations, title 12, section
108.16 213.4, excluding any rent charge related to the capitalization of the tax.
108.17 (b) If the total amount paid by the lessee for use of the leased vehicle includes
108.18 amounts that are not calculated at the time the lease is executed, the tax is imposed and
108.19 must be collected by the lessor at the time the amounts are paid by the lessee. In the case
108.20 of a lease which by its terms may be renewed, the sales tax is due and payable on the
108.21 total amount to be paid during the initial term of the lease, and then for each subsequent
108.22 renewal period on the total amount to be paid during the renewal period.
108.23 (c) If a lease is canceled or rescinded on or before 90 days of its execution or if a
108.24 vehicle is returned to the manufacturer under section 325F.665, the lessor may file a claim
108.25 for a refund of the total tax paid minus the amount of tax due for the period the vehicle is
108.26 used by the lessee.
108.27 (d) If a lessee's obligation to make payments on a lease is canceled more than 90
108.28 days after its execution, a credit is allowed against sales tax or motor vehicles sales tax
108.29 due on a subsequent lease or purchase of a motor vehicle if that lease or purchase is
108.30 consummated within 30 days of the date the prior lease was canceled. The amount of the
108.31 credit is equal to (1) the sales tax paid at the inception of the lease, multiplied by (2)
108.32 the ratio of the number of full months remaining in the lease at the time of termination
108.33 compared to the term of the lease used in calculating sales tax paid at the inception of the
108.34 lease. The credit or any part of it cannot be assigned or transferred to another person.
109.1 EFFECTIVE DATE.This section is effective for leases entered into after
109.2 September 30, 2005.
109.3 Sec. 30. Minnesota Statutes 2004, section 297A.99, subdivision 7, is amended to read:
109.4 Subd. 7. Exemptions. (a) All goods or services that are otherwise exempt from
109.5 taxation under this chapter are exempt from a political subdivision's tax.
109.6 (b) The gross receipts from the sale of tangible personal property that meets the
109.7 requirement of section 297A.68, subdivision 15, are exempt, except the qualification
109.8 test applies based on the boundaries of the political subdivision instead of the state
109.9 of Minnesota.
109.10 (c) All mobile transportation equipment, and parts and accessories attached to or
109.11 to be attached to the equipment are exempt, if purchased by a holder of a motor carrier
109.12 direct pay permit under section 297A.90.
109.13 EFFECTIVE DATE.This section is effective the day following final enactment.
109.14 Sec. 31. Laws 2005, First Special Session chapter 3, article 5, section 3, the effective
109.15 date, is amended to read:
109.16
109.17
109.18 EFFECTIVE DATE. This section is effective for sales and purchases made after
109.19 October 28, 2002, but for land clearing contracts entered into after October 28, 2002,
109.20 but before July 15, 2005, no refunds may be claimed under Minnesota Statutes, section
109.21 289A.50, for sales taxes collected and remitted to the state on the land clearing contracts.
109.22 EFFECTIVE DATE.This section is effective the day following final enactment.
109.23 Sec. 32. REPEALER.
109.24 (a) Minnesota Statutes 2004, section 297A.68, subdivisions 15 and 18, are repealed.
109.25 (b) Minnesota Rules, parts 8130.0400, subpart 3; 8130.4800, subparts 1, 3, 4, 5, 6, 7,
109.26 and 8; 8130.5100; 8130.5400; and 8130.5800, subpart 6, are repealed.
109.27 EFFECTIVE DATE.This section is effective the day following final enactment.
110.1 ARTICLE 7
110.2 DEPARTMENT OF REVENUE SPECIAL TAXES AND FEES
110.3 Section 1. Minnesota Statutes 2005 Supplement, section 115B.49, subdivision 4, is
110.4 amended to read:
110.5 Subd. 4. Registration; fees. (a) The owner or operator of a dry cleaning facility
110.6 shall register on or before October 1 of each year with the commissioner of revenue in
110.7 a manner prescribed by the commissioner of revenue and pay a registration fee for the
110.8 facility. The amount of the fee is:
110.9 (1) $500, for facilities with a full-time equivalence of fewer than five;
110.10 (2) $1,000, for facilities with a full-time equivalence of five to ten; and
110.11 (3) $1,500, for facilities with a full-time equivalence of more than ten.
110.12 The registration fee must be paid on or before October 18 or the owner or operator
110.13 of a dry cleaning facility may elect to pay the fee in equal installments. Installment
110.14 payments must be paid on or before October 18, on or before January 18, on or before
110.15 April 18, and on or before June 18. All payments made after October 18 bear interest
110.16 at the rate specified in section 270C.40.
110.17 (b) A person who sells dry cleaning solvents for use by dry cleaning facilities in the
110.18 state shall collect and remit to the commissioner of revenue in a manner prescribed by the
110.19 commissioner of revenue, on or before the 20th day of the month following the month in
110.20 which the sales of dry cleaning solvents are made, a fee of:
110.21 (1) $3.50 for each gallon of perchloroethylene sold for use by dry cleaning facilities
110.22 in the state;
110.23 (2) 70 cents for each gallon of hydrocarbon-based dry cleaning solvent sold for use
110.24 by dry cleaning facilities in the state; and
110.25 (3) 35 cents for each gallon of other nonaqueous solvents sold for use by dry
110.26 cleaning facilities in the state.
110.27 (c) The audit, assessment, appeal, collection, enforcement, and administrative
110.28 provisions of chapters 270C and 289A apply to the fee imposed by this subdivision.
110.29 To enforce this subdivision, the commissioner of revenue may grant extensions to file
110.30 returns and pay fees, impose penalties and interest on the annual registration fee under
110.31 paragraph (a) and the monthly fee under paragraph (b), and abate penalties and interest in
110.32 the manner provided in chapters 270C and 289A. The penalties and interest imposed on
110.33 taxes under chapter 297A apply to the fees imposed under this subdivision. Disclosure
110.34 of data collected by the commissioner of revenue under this subdivision is governed by
110.35 chapter 270B.
111.1 EFFECTIVE DATE.This section is effective for returns and payments due on
111.2 or after October 1, 2006.
111.3 Sec. 2. [287.222] TRANSFER TO OBTAIN FINANCING.
111.4 The deed tax is $1.65 on a deed or other instrument that transfers real property if
111.5 the transfer is (1) to a person who is a builder or contractor, (2) intended to be temporary,
111.6 and (3) done solely to enable the builder or contractor to obtain financing to build an
111.7 improvement on the conveyed property under a contract for improvement with the grantor
111.8 that calls for the conveyed property to be reconveyed to the grantor upon completion of
111.9 and payment for the improvement. The deed tax is $1.65 on a deed or other instrument
111.10 that transfers the real property back from the builder or contractor to the grantor.
111.11 EFFECTIVE DATE.This section is effective for deeds both executed and recorded
111.12 on or after July 1, 2006.
111.13 Sec. 3. Minnesota Statutes 2004, section 295.50, subdivision 4, is amended to read:
111.14 Subd. 4. Health care provider. (a) "Health care provider" means:
111.15 (1) a person whose health care occupation is regulated or required to be regulated by
111.16 the state of Minnesota furnishing any or all of the following goods or services directly to a
111.17 patient or consumer: medical, surgical, optical, visual, dental, hearing, nursing services,
111.18 drugs, laboratory, diagnostic or therapeutic services;
111.19 (2) a person who provides goods and services not listed in clause (1) that qualify for
111.20 reimbursement under the medical assistance program provided under chapter 256B;
111.21 (3) a staff model health plan company;
111.22 (4) an ambulance service required to be licensed; or
111.23 (5) a person who sells or repairs hearing aids and related equipment or prescription
111.24 eyewear.
111.25 (b) Health care provider does not include:
111.26 (1) hospitals; medical supplies distributors, except as specified under paragraph
111.27 (a), clause (5); nursing homes licensed under chapter 144A or licensed in any other
111.28 jurisdiction; pharmacies; surgical centers; bus and taxicab transportation, or any other
111.29 providers of transportation services other than ambulance services required to be licensed;
111.30 supervised living facilities for persons with mental retardation or related conditions,
111.31 licensed under Minnesota Rules, parts 4665.0100 to 4665.9900; residential care homes
111.32 licensed under chapter 144B; housing with services establishments required to be
111.33 registered under chapter 144D; board and lodging establishments providing only custodial
111.34 services that are licensed under chapter 157 and registered under section 157.17 to
112.1 provide supportive services or health supervision services; adult foster homes as defined
112.2 in Minnesota Rules, part 9555.5105; day training and habilitation services for adults
112.3 with mental retardation and related conditions as defined in section 252.41, subdivision
112.4 3; boarding care homes, as defined in Minnesota Rules, part 4655.0100; and adult day
112.5 care centers as defined in Minnesota Rules, part 9555.9600;
112.6 (2) home health agencies as defined in Minnesota Rules, part 9505.0175, subpart
112.7 15; a person providing personal care services and supervision of personal care services
112.8 as defined in Minnesota Rules, part 9505.0335; a person providing private duty nursing
112.9 services as defined in Minnesota Rules, part 9505.0360; and home care providers required
112.10 to be licensed under chapter 144A;
112.11 (3) a person who employs health care providers solely for the purpose of providing
112.12 patient services to its employees; and
112.13 (4) an educational institution that employs health care providers solely for the
112.14 purpose of providing patient services to its students if the institution does not receive fee
112.15 for service payments or payments for extended coverage.
112.16 EFFECTIVE DATE.This section is effective the day following final enactment.
112.17 Sec. 4. Minnesota Statutes 2004, section 295.53, subdivision 3, is amended to read:
112.18 Subd. 3. Separate statement of tax. A hospital, surgical center, or health care
112.19 provider, or wholesale drug distributor must not state the tax obligation under section
112.20 295.52 in a deceptive or misleading manner. It must not separately state tax obligations
112.21 on bills provided to patients, consumers, or other payers when the amount received for
112.22 the services or goods is not subject to tax.
112.23 Pharmacies that separately state the tax obligations on bills provided to consumers
112.24 or to other payers who purchase legend drugs may state the tax obligation as the wholesale
112.25 price of the legend drugs multiplied by the tax percentage specified in section 295.52.
112.26 Pharmacies must not state the tax obligation based on the retail price.
112.27 Whenever the commissioner determines that a person has engaged in any act or
112.28 practice constituting a violation of this subdivision, the commissioner may bring an action
112.29 in the name of the state in the district court of the appropriate county to enjoin the act
112.30 or practice and to enforce compliance with this subdivision, or the commissioner may
112.31 refer the matter to the attorney general or the county attorney of the appropriate county.
112.32 Upon a proper showing, a permanent or temporary injunction, restraining order, or other
112.33 appropriate relief must be granted.
112.34 EFFECTIVE DATE.This section is effective the day following final enactment.
113.1 Sec. 5. Minnesota Statutes 2004, section 297F.01, is amended by adding a subdivision
113.2 to read:
113.3 Subd. 22a. Weighted average retail price. "Weighted average retail price" means
113.4 (1) the average retail price per pack of 20 cigarettes, with the average price weighted by
113.5 the number of packs sold at each price, (2) reduced by the sales tax included in the retail
113.6 price, and (3) adjusted for the expected inflation from the time of the survey to the average
113.7 of the 12 months that the sales tax will be imposed. The commissioner shall make the
113.8 inflation adjustment in accordance with the Consumer Price Index for all urban consumers
113.9 inflation indicator as published in the most recent state budget forecast. The inflation
113.10 factor for the calendar year in which the new tax rate takes effect must be used.
113.11 EFFECTIVE DATE.This section is effective April 30, 2006.
113.12 Sec. 6. Minnesota Statutes 2004, section 297G.01, subdivision 7, is amended to read:
113.13 Subd. 7. Distilled spirits. "Distilled spirits" is means:
113.14 (1) intoxicating liquors, including ethyl alcohol, hydrated oxide of ethyl, spirits of
113.15 wine, whiskey, rum, brandy, gin, and other distilled spirits, including all dilutions and
113.16 mixtures, for nonindustrial use.;
113.17 (2) any beverage that would be classified as a flavored malt beverage except that the
113.18 alcohol contribution from flavors and other nonbeverage materials exceeds 49 percent
113.19 of the alcohol content of the product; or
113.20 (3) any beverage that would be classified as a flavored malt beverage except that the
113.21 beverage contains more than six percent alcohol by volume, and more than 1.5 percent
113.22 of the volume of the finished product consists of alcohol derived from flavors and other
113.23 nonbeverage ingredients that contain alcohol.
113.24 EFFECTIVE DATE.This section is effective July 1, 2006.
113.25 Sec. 7. Minnesota Statutes 2004, section 297G.01, is amended by adding a subdivision
113.26 to read:
113.27 Subd. 8a. Flavored malt beverage. (a) "Flavored malt beverage" means a
113.28 fermented malt beverage that:
113.29 (1) contains six percent or less alcohol by volume and derives at least 51 percent of
113.30 its alcohol content by volume from the fermentation of grain, as long as not more than 49
113.31 percent of the beverage's overall alcohol content is obtained from flavors and other added
113.32 nonbeverage ingredients containing alcohol; or
114.1 (2) contains more than six percent alcohol by volume that derives not more than 1.5
114.2 percent of its overall alcohol content by volume from flavors and other added nonbeverage
114.3 ingredients containing alcohol.
114.4 (b) Flavored malt beverage does not include cider or an alcoholic beverage obtained
114.5 primarily by fermentation of rice, such as sake.
114.6 EFFECTIVE DATE.This section is effective July 1, 2006.
114.7 ARTICLE 8
114.8 DEPARTMENT OF REVENUE MISCELLANEOUS
114.9 Section 1. Minnesota Statutes 2005 Supplement, section 270C.01, subdivision 4, is
114.10 amended to read:
114.11 Subd. 4. Electronic means; electronically. "Electronic means" and "electronically"
114.12 mean a method that is electronic, as defined in section 325L.02, paragraph (e), and that
114.13 is prescribed by the commissioner. Electronic means includes the use of a touch-tone
114.14 telephone to transmit return information in a manner prescribed by the commissioner.
114.15 EFFECTIVE DATE.This section is effective the day following final enactment.
114.16 Sec. 2. Minnesota Statutes 2005 Supplement, section 270C.304, is amended to read:
114.17 270C.304 ELECTRONICALLY FILED RETURNS; SIGNATURES.
114.18 For purposes of a law administered by the commissioner, the name of the taxpayer,
114.19 the name of the taxpayer's authorized agent, or the taxpayer's identification number,
114.20 will constitute a signature when transmitted as part of the return information on returns
114.21 filed by electronic means by the taxpayer or at the taxpayer's direction. "Electronic
114.22 means" includes, but is not limited to, the use of a touch-tone telephone to transmit return
114.23 information in a manner prescribed by the commissioner.
114.24 EFFECTIVE DATE.This section is effective the day following final enactment.
114.25 Sec. 3. Minnesota Statutes 2005 Supplement, section 270C.33, subdivision 4, is
114.26 amended to read:
114.27 Subd. 4. Orders of assessment. (a) The commissioner may issue an order of
114.28 assessment in any of the following circumstances:
114.29 (1) the commissioner determines that the correct amount of tax is different than that
114.30 assessed on a return filed with the commissioner;
115.1 (2) no return has been filed and the commissioner determines the amount of tax
115.2 that should have been assessed;
115.3 (3) the commissioner determines that the correct amount of a refundable credit
115.4 is different than the amount claimed by a taxpayer. For purposes of this subdivision,
115.5 "refundable credit" means a refund benefit or credit due a person that is unrelated to the
115.6 person's liability for a tax. "Refundable credit" does not include estimated tax payments
115.7 or withholding taxes. An assessment for an overpayment of a refundable credit may be
115.8 collected in the same manner as a tax collected by the commissioner; and
115.9 (4) the commissioner determines the correct amount of a tax that the taxpayer is not
115.10 required to assess by a return filed with the commissioner.; and
115.11 (5) the commissioner determines that a penalty other than a penalty for late payment
115.12 of tax, late filing of a return, or failure to pay tax by electronic means should be imposed,
115.13 and the penalty is not included on an order of assessment made under clauses (1) to (4).
115.14 (b) An order of assessment must be in writing.
115.15 (c) An order of assessment must be signed by the commissioner or a delegate, or
115.16 have their facsimile signature, if the change in tax, excluding penalties and interest,
115.17 exceeds $1,000.
115.18 (d) An order of assessment is final when made but, as applicable, is reviewable
115.19 administratively under section 270C.35, or appealable to Tax Court under chapter 271.
115.20 EFFECTIVE DATE.This section is effective the day following final enactment.
115.21 Sec. 4. Minnesota Statutes 2005 Supplement, section 270C.57, subdivision 3, is
115.22 amended to read:
115.23 Subd. 3. Assessment; abatement; review. The commissioner may assess liability
115.24 against a successor business under this section within the time prescribed for collecting
115.25 the underlying sales and withholding taxes, interest, and penalties. The assessment is
115.26 presumed to be valid, and the burden is upon the successor to show it is incorrect or
115.27 invalid. An order assessing successor liability is reviewable administratively under section
115.28 270C.35 and is appealable to Tax Court under chapter 271. The commissioner may abate
115.29 an assessment if the successor's failure to give the notice required under this section is due
115.30 to reasonable cause. The procedural and appeal provisions under section 270C.34 apply
115.31 to abatement requests under this subdivision. Collection remedies available against the
115.32 transferring business are available against the successor from the date of assessment of
115.33 successor liability.
115.34 EFFECTIVE DATE.This section is effective the day following final enactment.
116.1 Sec. 5. Minnesota Statutes 2005 Supplement, section 270C.67, subdivision 1, is
116.2 amended to read:
116.3 Subdivision 1. Authority. If any tax payable to the commissioner or to the
116.4 department is not paid when due, such tax may be collected by the commissioner within
116.5 five years after the date of assessment of the tax, or if a lien has been filed, during the
116.6 period the lien is enforceable, or if the tax judgment has been filed, within the statutory
116.7 period of enforcement of a valid tax judgment, by a levy upon all property and rights
116.8 to property, including any property in the possession of law enforcement officials, of
116.9 the person liable for the payment or collection of such tax (except that which is exempt
116.10 from execution pursuant to section 550.37) or property on which there is a lien provided
116.11 in section 270C.63. For this purpose, "tax" includes any penalty, interest, and costs,
116.12 properly payable.
116.13 EFFECTIVE DATE.This section is effective the day following final enactment.
116.14 Sec. 6. Minnesota Statutes 2005 Supplement, section 270C.67, is amended by adding a
116.15 subdivision to read:
116.16 Subd. 1a. Exempt property. A levy under this section is not enforceable against:
116.17 (1) a purchaser with respect to tangible personal property purchased at retail in
116.18 the ordinary course of the seller's trade or business, unless at the time of purchase the
116.19 purchaser intends the purchase to or knows the purchase will hinder, evade, or defeat
116.20 the collection of a tax; or
116.21 (2) the personal property listed as exempt in sections 550.37, 550.38, and 550.39.
116.22 EFFECTIVE DATE.This section is effective the day following final enactment.
116.23 Sec. 7. Minnesota Statutes 2005 Supplement, section 271.12, is amended to read:
116.24 271.12 WHEN ORDER EFFECTIVE.
116.25 No order for refundment by the commissioner of revenue, the appropriate unit of
116.26 government, or the Tax Court shall take effect until the time for appeal therefrom or
116.27 review thereof by all parties entitled thereto has expired. Otherwise every order of the
116.28 commissioner, the appropriate unit of government, or the Tax Court shall take effect
116.29 immediately upon the filing thereof, and no appeal therefrom or review thereof shall
116.30 stay the execution thereof or extend the time for payment of any tax or other obligation
116.31 unless otherwise expressly provided by law; provided, that in case an order which has
116.32 been acted upon, in whole or in part, shall thereafter be set aside or modified upon appeal,
116.33 the determination upon appeal or review shall supersede the order appealed from and be
117.1 binding upon all parties affected thereby, and such adjustments as may be necessary
117.2 to give effect thereto shall be made accordingly; and provided further, the Tax Court
117.3 may enjoin enforcement of the order of the commissioner being appealed. If it be finally
117.4 determined upon such appeal or review that any person is entitled to refundment of any
117.5 amount which has been paid for a tax or other obligation, such amount, unless otherwise
117.6 provided by law, shall be paid to the person by the commissioner of finance, or other
117.7 proper officer, out of funds derived from taxes of the same kind, if available for the
117.8 purpose, or out of other available funds, if any, with interest at the rate specified in section
117.9 270C.405 from the date of payment of the tax, unless a different rate or date of accrual
117.10 of interest is otherwise provided by law, in which case such other rate or date of accrual
117.11 shall apply, upon certification by the commissioner of revenue, the appropriate unit of
117.12 government, the Tax Court or the Supreme Court.
117.13 If, within 120 days after a decision of the Tax Court becomes final, the commissioner
117.14 does not refund the overpayment determined by the court, together with interest, on
117.15 motion by the taxpayer, the Tax Court shall have jurisdiction to order the refund of
117.16 the overpayment and interest, and to award reasonable litigation costs for bringing the
117.17 motion. If any tax, assessment, or other obligation be increased upon such appeal or
117.18 review, the increase shall be added to the original amount, and may be enforced and
117.19 collected therewith.
117.20 EFFECTIVE DATE.This section is effective the day following final enactment.
117.21 Sec. 8. Minnesota Statutes 2005 Supplement, section 289A.121, subdivision 5, is
117.22 amended to read:
117.23 Subd. 5. Reportable transactions. (a) For each taxable year in which a taxpayer
117.24 must make a return or a statement under Code of Federal Regulations, title 26, section
117.25 1.6011-4, for a reportable transaction, including a listed transaction, in which the taxpayer
117.26 participated in a taxable year for which a return is required under chapter 290, the taxpayer
117.27 must file a copy of the disclosure with the commissioner.
117.28 (b) Any taxpayer that is a member of a unitary business group that includes any
117.29 person that must make a disclosure statement under Code of Federal Regulations, title 26,
117.30 section 1.6011-4, must file a disclosure under this subdivision.
117.31 (c) Disclosure under this subdivision is required for any transaction entered into after
117.32 December 31, 2001, that the Internal Revenue Service determines is a listed transaction
117.33 at any time, and must be made in the manner prescribed by the commissioner. For
117.34 transactions in which the taxpayer participated for taxable years ending before December
117.35 31, 2005, disclosure must be made by the extended due date of the first return required
118.1 under chapter 290 that occurs 60 days or more after July 14, 2005. With respect to
118.2 transactions in which the taxpayer participated for taxable years ending on and after
118.3 December 31, 2005, disclosure must be made in the time and manner prescribed in Code
118.4 of Federal Regulations, title 26, section 1.6011-4(e).
118.5 (d) Notwithstanding paragraphs (a) to (c), no disclosure is required for transactions
118.6 entered into after December 31, 2001, and before January 1, 2006, if (1) the taxpayer
118.7 has filed an amended income tax return which reverses the tax benefits of the tax
118.8 shelter transaction, or (2) as a result of a federal audit the Internal Revenue Service has
118.9 determined the tax treatment of the transaction and an amended return has been filed
118.10 to reflect the federal treatment.
118.11 EFFECTIVE DATE.This section is effective for disclosures of reportable
118.12 transactions in which the taxpayer participated for taxable years ending before December
118.13 31, 2005.
118.14 Sec. 9. Minnesota Statutes 2004, section 290.17, subdivision 1, is amended to read:
118.15 Subdivision 1. Scope of allocation rules. (a) The income of resident individuals
118.16 is not subject to allocation outside this state. The allocation rules apply to nonresident
118.17 individuals, estates, trusts, nonresident partners of partnerships, nonresident shareholders
118.18 of corporations treated as "S" corporations under section 290.9725, and all corporations
118.19 not having such an election in effect. If a partnership or corporation would not otherwise
118.20 be subject to the allocation rules, but conducts a trade or business that is part of a
118.21 unitary business involving another legal entity that is subject to the allocation rules, the
118.22 partnership or corporation is subject to the allocation rules.
118.23 (b) Expenses, losses, and other deductions (referred to collectively in this paragraph
118.24 as "deductions") must be allocated along with the item or class of gross income to which
118.25 they are definitely related for purposes of assignment under this section or apportionment
118.26 under section 290.191, 290.20, or 290.36. Deductions not definitely related to any item
118.27 or class of gross income are assigned under subdivision 2, paragraph (e), are assigned to
118.28 the taxpayer's domicile.
118.29 (c) In the case of an individual who is a resident for only part of a taxable year,
118.30 the individual's income, gains, losses, and deductions from the distributive share of a
118.31 partnership, S corporation, trust, or estate are not subject to allocation outside this state
118.32 to the extent of the distributive share multiplied by a ratio, the numerator of which is
118.33 the number of days the individual was a resident of this state during the tax year of the
118.34 partnership, S corporation, trust, or estate, and the denominator of which is the number of
118.35 days in the taxable year of the partnership, S corporation, trust, or estate.
119.1 EFFECTIVE DATE.This section is effective the day following final enactment.
119.2 ARTICLE 9
119.3 PUBLIC FINANCE
119.4 Section 1. Minnesota Statutes 2004, section 103E.635, subdivision 7, is amended to
119.5 read:
119.6 Subd. 7. Sale of definitive drainage bonds. The board must sell and negotiate the
119.7 definitive drainage bonds for at least their par value. The definitive bonds must be sold
119.8 in accordance with section according to sections 475.56 and 475.60.
119.9 Sec. 2. Minnesota Statutes 2004, section 116A.20, subdivision 3, is amended to read:
119.10 Subd. 3. How payable. The bonds shall be payable at such time or times, not to
119.11 exceed (1) 30 years from their date or (2) 40 years or the useful life of the asset, whichever
119.12 is less, if financed or guaranteed by the United States Department of Agriculture, and bear
119.13 such rate or rates of interest not exceeding eight percent per annum, payable annually or
119.14 semiannually as the county board shall by resolution determine. The years and amounts
119.15 of principal maturities shall be such as in the opinion of the county board are warranted
119.16 by the anticipated collections of the water and sewer improvement assessments without
119.17 regard to any limitations on such maturities imposed by section 475.54.
119.18 Sec. 3. Minnesota Statutes 2004, section 162.18, subdivision 1, is amended to read:
119.19 Subdivision 1. Limitation on amount. Any city having a population of 5,000 or
119.20 more may in accordance with chapter 475, except as otherwise provided herein, issue and
119.21 sell its obligations for the purpose of establishing, locating, relocating, constructing,
119.22 reconstructing, and improving municipal state-aid streets therein. In the resolution
119.23 providing for the issuance of the obligations, the governing body of the municipality
119.24 shall irrevocably pledge and appropriate to the sinking fund from which the obligations
119.25 are payable, an amount of the moneys allotted or to be allotted to the municipality from
119.26 its account in the municipal state-aid street fund sufficient to pay the principal of and the
119.27 interest on the obligations as they respectively come due. The obligations shall be issued
119.28 in amounts and on terms such that the average annual amount of principal and interest due
119.29 in all subsequent calendar years on the obligations, including any similar obligations of
119.30 the municipality which are outstanding, shall not exceed 50 90 percent of the amount of
119.31 the last annual allotment preceding the bond issue received by the municipality from the
119.32 construction account in the municipal state-aid street fund; except that the municipality
119.33 may issue general obligation bonds for said purpose, to be purchased by it for the account
120.1 of any one or more of its own funds, including debt redemption funds, in which case such
120.2 bonds shall mature in not exceeding five years from their respective dates of issue, in
120.3 principal amounts not exceeding in any calendar year, with the principal amount of all
120.4 other municipal state-aid street obligations maturing in such year, the total amount of the
120.5 last annual allotment preceding the bond issue received by the municipality from the
120.6 construction account in the municipal state-aid street fund. All interest on the obligations
120.7 shall be paid out of the municipality's normal maintenance account in the municipal
120.8 state-aid street fund. Any such obligations may be made general obligations, but if
120.9 moneys of the municipality other than moneys received from the municipal state-aid street
120.10 fund, are used for payment of the obligations, the moneys so used shall be restored to the
120.11 appropriate fund from the moneys next received by the municipality from the construction
120.12 or maintenance account in the municipal state-aid street fund which are not required to be
120.13 paid into a sinking fund for obligations.
120.14 Sec. 4. Minnesota Statutes 2004, section 162.181, subdivision 1, is amended to read:
120.15 Subdivision 1. Limitation on amount. Except as otherwise provided herein, any
120.16 county may, in accordance with chapter 475, issue and sell its obligations, the total
120.17 amount thereof not to exceed the total of the preceding two years state-aid allotments,
120.18 for the purpose of establishing, locating, relocating, constructing, reconstructing, and
120.19 improving county state-aid highways and constructing buildings and other facilities for
120.20 maintaining county state-aid highways. In the resolution providing for the issuance of the
120.21 obligations, the county board of the county shall irrevocably pledge and appropriate to the
120.22 sinking fund from which the obligations are payable, an amount of the money allotted
120.23 or to be allotted to the county from its account in the county state-aid highway fund
120.24 sufficient to pay the principal of and the interest on the obligations as they respectively
120.25 come due. The obligations shall be issued in the amounts and on terms such that the
120.26 amount of principal and interest due in any calendar year on the obligations, including
120.27 any similar obligations of the county which are outstanding, shall not exceed 50 90
120.28 percent of the amount of the last annual allotment preceding the bond issue received
120.29 by the county from the construction account in the county state-aid highway fund. All
120.30 interest on the obligations shall be paid out of the county's normal maintenance account
120.31 in the county state-aid highway fund. The obligations may be made general obligations,
120.32 but if money of the county other than money received from the county state-aid highway
120.33 fund, is used for payment of the obligations, the money so used shall be restored to the
120.34 appropriate fund from the money next received by the county from the construction or
121.1 maintenance account in the county state-aid highway fund which is not required to be
121.2 paid into a sinking fund for obligations.
121.3 Sec. 5. Minnesota Statutes 2004, section 273.032, is amended to read:
121.4 273.032 MARKET VALUE DEFINITION.
121.5 For the purpose of determining any property tax levy limitation based on market
121.6 value, any net debt limit based on market value, any limit on the issuance of bonds,
121.7 certificates of indebtedness, or capital notes based on market value, any qualification
121.8 to receive state aid based on market value, or any state aid amount based on market
121.9 value, the terms "market value," "taxable market value," and "market valuation," whether
121.10 equalized or unequalized, mean the total taxable market value of property within the local
121.11 unit of government before any adjustments for tax increment, fiscal disparity, powerline
121.12 credit, or wind energy values, but after the limited market adjustments under section
121.13 273.11, subdivision 1a, and after the market value exclusions of certain improvements to
121.14 homestead property under section 273.11, subdivision 16. Unless otherwise provided,
121.15 "market value," "taxable market value," and "market valuation" for purposes of this
121.16 paragraph, refer to the taxable market value for the previous assessment year.
121.17 For the purpose of determining any net debt limit based on market value, or any limit
121.18 on the issuance of bonds, certificates of indebtedness, or capital notes based on market
121.19 value, the terms "market value," "taxable market value," and "market valuation," whether
121.20 equalized or unequalized, mean the total taxable market value of property within the local
121.21 unit of government before any adjustments for tax increment, fiscal disparity, powerline
121.22 credit, or wind energy values, but after the limited market adjustments under section
121.23 273.11, subdivision 1a, and after the market value exclusions of certain improvements to
121.24 homestead property under section 273.11, subdivision 16. Unless otherwise provided,
121.25 "market value," "taxable market value," "market valuation" for purposes of this paragraph,
121.26 mean the taxable market value as last finally equalized.
121.27 Sec. 6. Minnesota Statutes 2004, section 365A.08, is amended to read:
121.28 365A.08 FINANCING.
121.29 Upon adoption of the next annual budget following the creation of a subordinate
121.30 service district the town board shall include in the budget appropriate provisions for the
121.31 operation of the district including either a property tax levied only on property of the users
121.32 of the service within the boundaries of the district or a levy of a service charge against the
121.33 users of the service within the district, or a combination of a property tax and a service
121.34 charge on the users of the service.
122.1 A tax or service charge or a combination of them may be imposed to finance a
122.2 function or service in the district that the town ordinarily provides throughout the town
122.3 only to the extent that there is an increase in the level of the function or service provided
122.4 in the service district over that provided throughout the town. In that case, in addition
122.5 to the townwide tax levy, an amount necessary to pay for the increase in the level of the
122.6 function or service may be imposed in the district.
122.7 In the proceedings for establishment of a subordinate service district, the town may
122.8 prepare a street reconstruction plan that describes the streets within the district to be
122.9 reconstructed, the estimated costs, and any planned reconstruction of streets within the
122.10 district over the next five years and may include the approval of the street reconstruction
122.11 plan and the issuance of obligations for street reconstruction in the notice of public hearing
122.12 for the public hearing required by section 365A.04, subdivision 2. The town board shall
122.13 approve or disapprove the plan and the issuance of obligations in the resolution adopted
122.14 pursuant to section 365A.04, subdivision 3, and the issuance of street reconstruction
122.15 obligations shall be subject to the provisions for reverse referendum contained in section
122.16 365A.06. Following the creation of the subordinate service district and approval of the
122.17 plan and the street reconstruction obligations and compliance with section 365A.06, the
122.18 town may, without regard to the election requirement under section 475.58, subdivision 1,
122.19 issue and sell general obligations for street reconstruction as defined in section 475.58,
122.20 subdivision 3b. Obligations issued under this section are subject to the debt limit of the
122.21 town and are not excluded from net debt under section 475.51, subdivision 4.
122.22 Sec. 7. Minnesota Statutes 2004, section 365A.095, is amended to read:
122.23 365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.
122.24 Except when obligations are outstanding under section 365A.08, a petition signed by
122.25 at least 75 percent of the property owners in the territory of the subordinate service district
122.26 requesting the removal of the district may be presented to the town board. Within 30 days
122.27 after the town board receives the petition, the town clerk shall determine the validity of the
122.28 signatures on the petition. If the requisite number of signatures are certified as valid, the
122.29 town board must hold a public hearing on the petitioned matter. Within 30 days after the
122.30 end of the hearing, the town board must decide whether to discontinue the subordinate
122.31 service district, continue as it is, or take some other action with respect to it.
122.32 Sec. 8. Minnesota Statutes 2004, section 373.45, subdivision 1, is amended to read:
122.33 Subdivision 1. Definitions. (a) As used in this section, the following terms have
122.34 the meanings given.
123.1 (b) "Authority" means the Minnesota Public Facilities Authority.
123.2 (c) "Commissioner" means the commissioner of finance.
123.3 (d) "Debt obligation" means a general obligation bond issued by a county, a bond to
123.4 which the general obligation of a county is pledged under section 469.034, subdivision 2,
123.5 or a bond payable from a county lease obligation under section 641.24, to provide funds
123.6 for the construction of:
123.7 (1) jails;
123.8 (2) correctional facilities;
123.9 (3) law enforcement facilities;
123.10 (4) social services and human services facilities; or
123.11 (5) solid waste facilities; or
123.12 (6) qualified housing development projects as defined in section 469.034, subdivision
123.13 2.
123.14 Sec. 9. Minnesota Statutes 2004, section 469.035, is amended to read:
123.15 469.035 MANNER OF BOND ISSUANCE; SALE.
123.16 Bonds of an authority shall be authorized by its resolution. They may be issued in
123.17 one or more series and shall bear the date or dates, mature at the time or times, bear interest
123.18 at the rate or rates, be in the denomination or denominations, be in the form either coupon
123.19 or registered, carry the conversion or registration privileges, have the rank or priority, be
123.20 executed in the manner, be payable in the medium of payment at the place or places, and
123.21 be subject to the terms of redemption with or without premium, as the resolution, its trust
123.22 indenture or mortgage provides. The bonds may be sold at public or private sale at not
123.23 less than par in the manner and for the price that the authority determines to be in the best
123.24 interest of the authority. Notwithstanding any other law, bonds issued pursuant to sections
123.25 469.001 to 469.047 shall be fully negotiable. In any suit, action, or proceedings involving
123.26 the validity or enforceability of any bonds of an authority or the security for the bonds,
123.27 any bond reciting in substance that it has been issued by the authority to aid in financing a
123.28 project shall be conclusively deemed to have been issued for that purpose, and the project
123.29 shall be conclusively deemed to have been planned, located, and carried out in accordance
123.30 with the purposes and provisions of sections 469.001 to 469.047.
123.31 In cities of the first class, the governing body of the city must approve all notes
123.32 executed with the Minnesota Housing Finance Agency pursuant to this section if the
123.33 interest rate on the note exceeds seven percent.
123.34 Sec. 10. Minnesota Statutes 2004, section 469.103, subdivision 2, is amended to read:
124.1 Subd. 2. Form. The bonds of each series issued by the authority under this section
124.2 shall bear interest at a rate or rates, shall mature at the time or times within 20 30 years
124.3 from the date of issuance, and shall be in the form, whether payable to bearer, registrable
124.4 as to principal, or fully registrable, as determined by the authority. Section 469.102,
124.5 subdivision 6, applies to all bonds issued under this section, and the bonds and their
124.6 coupons, if any, when payable to bearer, shall be negotiable instruments.
124.7 Sec. 11. Minnesota Statutes 2005 Supplement, section 469.178, subdivision 7, is
124.8 amended to read:
124.9 Subd. 7. Interfund loans. The authority or municipality may advance or loan
124.10 money to finance expenditures under section 469.176, subdivision 4, from its general
124.11 fund or any other fund under which it has legal authority to do so. The loan or advance
124.12 must be authorized, by resolution of the governing body or of the authority, whichever
124.13 has jurisdiction over the fund from which the advance or loan is made, before money
124.14 is transferred, advanced, or spent, whichever is earliest. The resolution may generally
124.15 grant to the authority the power to make interfund loans under one or more tax increment
124.16 financing plans or for one or more districts. The terms and conditions for repayment of
124.17 the loan must be provided in writing and include, at a minimum, the principal amount,
124.18 the interest rate, and maximum term. The maximum rate of interest permitted to be
124.19 charged is limited to the greater of the rates specified under section 270C.40 or 549.09
124.20 as of the date or advance is made, unless the written agreement states that the maximum
124.21 interest rate will fluctuate as the interest rates specified under section 270C.40 or 549.09
124.22 are from time to time adjusted.
124.23 Sec. 12. Minnesota Statutes 2004, section 473.39, is amended by adding a subdivision
124.24 to read:
124.25 Subd. 11. Obligations. After July 1, 2006, in addition to the authority in
124.26 subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, 1i, 1j, and 1k, the council may issue certificates of
124.27 indebtedness, bonds, or other obligations under this section in an amount not exceeding
124.28 $32,800,000 for capital expenditures as prescribed in the council's regional transit master
124.29 plan and transit capital improvement program and for related costs, including the costs of
124.30 issuance and sale of the obligations.
124.31 EFFECTIVE DATE.This section is effective the day following final enactment.
125.1 Sec. 13. Minnesota Statutes 2004, section 474A.062, is amended to read:
125.2 474A.062 HESO 120-DAY ISSUANCE EXEMPTION.
125.3 The Minnesota Higher Education Services Office is exempt from the 120-day
125.4 issuance requirements in this chapter and may carry forward allocations for student loan
125.5 bonds into three one successive calendar years year, subject to carryforward notice
125.6 requirements of section 474A.131, subdivision 2. The maximum cumulative carryforward
125.7 is limited to $25,000,000.
125.8 EFFECTIVE DATE.This section is effective for bond allocations made in 2006
125.9 and thereafter.
125.10 Sec. 14. Minnesota Statutes 2005 Supplement, section 475.521, subdivision 4, is
125.11 amended to read:
125.12 Subd. 4. Limitations on amount. A municipality may not issue bonds under this
125.13 section if the maximum amount of principal and interest to become due in any year on
125.14 all the outstanding bonds issued under this section, including the bonds to be issued,
125.15 will equal or exceed (1) 0.16 percent of the taxable market value of property in the
125.16 municipality, or (2) $100,000, whichever is greater. Calculation of the limit must be
125.17 made using the taxable market value for the taxes payable year in which the obligations
125.18 are issued and sold. In the case of a municipality with a population of 2,500 or more, the
125.19 bonds are subject to the net debt limits under section 475.53. In the case of a shared facility
125.20 in which more than one municipality participates, upon compliance by each participating
125.21 municipality with the requirements of subdivision 2, the limitations in this subdivision and
125.22 the net debt represented by the bonds shall be allocated to each participating municipality
125.23 in proportion to its required financial contribution to the financing of the shared facility, as
125.24 set forth in the joint powers agreement relating to the shared facility. This section does not
125.25 limit the authority to issue bonds under any other special or general law.
125.26 Sec. 15. Laws 2005, chapter 152, article 1, section 39, subdivision 1, is amended to
125.27 read:
125.28
125.29 Subdivision 1. [ISSUANCE; PURPOSE.] Notwithstanding any provision of
125.30 Minnesota Statutes, chapter 298, to the contrary, the commissioner of Iron Range
125.31 resources and rehabilitation may shall issue revenue bonds in a principal amount of
125.32 $15,000,000 plus an amount sufficient to pay costs of issuance, in one or more series,
125.33 and thereafter may issue bonds to refund those bonds. The proceeds of the bonds must be
126.1 used to pay costs of issuance and to make grants to school districts located in the taconite
126.2 tax relief area defined in Minnesota Statutes, section 273.134, or the taconite assistance
126.3 area defined in Minnesota Statutes, section 273.1341, to be used by the school districts
126.4 to pay for health, safety, and maintenance improvements but only if the school district
126.5 has levied the maximum amount allowable under law for those purposes. The amounts of
126.6 proceeds to be distributed to each district are as follows:
126.7 (1) Independent School District No. 511, Aitkin, $600,000;
126.8 (2) Independent School District No. 695, Chisholm, $700,000;
126.9 (3) Independent School District No. 166, Cook County, $600,000;
126.10 (4) Independent School District No. 182, Crosby-Ironton, $600,000;
126.11 (5) Independent School District No. 696, Ely, $600,000;
126.12 (6) Independent School District No. 2154, Eveleth-Gilbert, $1,000,000;
126.13 (7) Independent School District No. 318, Grand Rapids, $600,000;
126.14 (8) Independent School District No. 316, Greenway, $1,100,000;
126.15 (9) Independent School District No. 701, Hibbing, $2,100,000;
126.16 (10) Independent School District No. 381, Lake Superior, $600,000;
126.17 (11) Independent School District No. 2711, Mesabi East, $3,600,000;
126.18 (12) Independent School District No. 712, Mt. Iron-Buhl, $700,000;
126.19 (13) Independent School District No. 319, Nashwauk/Keewatin, $700,000;
126.20 (14) Independent School District No. 2142, St. Louis County, $600,000; and
126.21 (15) Independent School District No. 706, Virginia, $900,000.
126.22
126.23 Sec. 16. CARVER COUNTY AUTHORITY NAME CHANGE.
126.24 The Carver County Housing and Redevelopment Authority created under Laws,
126.25 1980, chapter 482, is renamed the Carver County Community Development Agency.
126.26 Sec. 17. CITY OF WINSTED; BONDING AUTHORITY.
126.27 (a) The city of Winsted may issue general obligation bonds under Minnesota
126.28 Statutes, chapter 475, to finance the acquisition and betterment of a public works facility
126.29 and a facility consisting of a city hall, community center and police station, including
126.30 landscaping.
126.31 (b) The bonds may be issued as general obligations of the city without an election to
126.32 approve the bonds under Minnesota Statutes, section 475.58.
126.33 (c) The bonds are not included in computing any debt limitation applicable to the
126.34 city, including the net debt limits under Minnesota Statutes, section 475.53, and the levy
127.1 of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the
127.2 bonds is not subject to any levy limitation.
127.3 (d) The aggregate principal amount of bonds used to pay costs of the acquisition and
127.4 betterment of the public works facility and the facility consisting of a city hall, community
127.5 center and police station, including landscaping, may not exceed $5,000,000, plus an
127.6 amount equal to the costs related to issuance of the bonds and capitalized interest.
127.7 EFFECTIVE DATE.This section is effective upon compliance by the governing
127.8 body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3.
127.9 Sec. 18. UNIFIED POOL; OFFICE OF HIGHER EDUCATION; TEMPORARY
127.10 PRIORITY.
127.11 Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph
127.12 (b), prior to October 1, 2006, only the following applications shall be awarded allocations
127.13 from the unified pool. Allocations shall be awarded in the following order of priority:
127.14 (1) applications for student loan bonds issued by or on behalf of the Office of
127.15 Higher Education;
127.16 (2) applications for residential rental project bonds;
127.17 (3) applications for small issue bonds for manufacturing projects; and
127.18 (4) applications for small issue bonds for agricultural development bond loan
127.19 projects.
127.20 EFFECTIVE DATE.This section is effective July 1, 2006.
127.21 Sec. 19. UNIFIED POOL; TEMPORARY PRIORITY CHANGE.
127.22 Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph
127.23 (c), on the first Monday in October, 2006, through the last Monday in November, 2006,
127.24 allocations shall be awarded from the unified pool in the following order of priority:
127.25 (1) applications for mortgage bonds;
127.26 (2) applications for public facility projects funded by public facility bonds;
127.27 (3) applications for small issue bonds for manufacturing projects;
127.28 (4) applications for small issue bonds for agricultural development bond loan
127.29 projects;
127.30 (5) applications for residential rental project bonds;
127.31 (6) applications for enterprise zone facility bonds;
127.32 (7) applications for governmental bonds; and
127.33 (8) applications for redevelopment bonds.
128.1 EFFECTIVE DATE.This section is effective July 1, 2006.
128.2 Sec. 20. UNIFIED POOL; OFFICE OF HIGHER EDUCATION TOTAL
128.3 ALLOCATION.
128.4 Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph (i),
128.5 the total amount of allocations for student loan bonds from the unified pool in calendar
128.6 year 2006 may not exceed 50 percent of the total in the unified pool on the day after the
128.7 last Monday in July, 2006.
128.8 EFFECTIVE DATE.This section is effective July 1, 2006.
128.9 Sec. 21. CITY OF PENNOCK; ACQUIRE REAL ESTATE, EXPEND CITY
128.10 FUNDS, AND CONVEY TO PRIVATE ENTITY.
128.11 Subdivision 1. Authorization. The city of Pennock may purchase a parcel of real
128.12 estate in the city consisting of four city lots and an appurtenant building formerly operated
128.13 as a convenience store known as Phil's Corner on the terms and conditions that may be
128.14 agreed upon between the city and the current owner of the parcel, and the city may expend
128.15 city funds to make necessary improvements to the building. Once acquired and improved
128.16 and in order to ensure the continued economic vitality of the city, the city may convey
128.17 the parcel and building by sale or lease to a private person, firm, partnership, corporation
128.18 or other entity for a nominal consideration or on whatever terms and conditions the
128.19 city and the private entity may agree upon in order for the building to be operated as a
128.20 commercial establishment.
128.21 Subd. 2. Bonds. The city of Pennock may issue general obligation bonds of the
128.22 city in the aggregate principal amount not to exceed $250,000 to finance the project
128.23 authorized by subdivision 1. The bonds must be issued in compliance with Minnesota
128.24 Statutes, chapter 475, except that a referendum under Minnesota Statutes, section 475.58,
128.25 is not required. The debt represented by the bonds is not included in computing any debt
128.26 limitations applicable to the city, and the levy of taxes required by Minnesota Statutes,
128.27 section 475.61, to pay the principal of and interest on the bonds is not subject to any levy
128.28 limitation otherwise applicable to the city.
128.29 EFFECTIVE DATE.Under Minnesota Statutes 2004, section 645.023, subdivision
128.30 1, paragraph (a), this section is effective without local approval on the day following
128.31 final enactment.
128.32 Sec. 22. APPLICATION.
129.1 Section 12 applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey,
129.2 Scott, and Washington.
129.3 ARTICLE 10
129.4 LOCAL DEVELOPMENT
129.5 Section 1. Minnesota Statutes 2004, section 383A.80, subdivision 4, is amended to
129.6 read:
129.7 Subd. 4. Expiration. The authority to impose the tax under this section expires
129.8 January 1, 2008 2013.
129.9 Sec. 2. Minnesota Statutes 2004, section 383B.80, subdivision 4, is amended to read:
129.10 Subd. 4. Expiration. The authority to impose the tax under this section expires
129.11 January 1, 2008 2013.
129.12 Sec. 3. [383C.558] ST. LOUIS COUNTY DEED AND MORTGAGE TAX.
129.13 Subdivision 1. Authority to impose; rate. (a) The governing body of St. Louis
129.14 County may impose a mortgage registry and deed tax.
129.15 (b) The rate of the mortgage registry tax equals .0001 of the principal.
129.16 (c) The rate of the deed tax equals .0001 of the amount.
129.17 Subd. 2. General law provisions apply. The taxes under this section apply to
129.18 the same base and must be imposed, collected, administered, and enforced in the same
129.19 manner as provided under chapter 287 for the state mortgage registry and deed taxes.
129.20 All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
129.21 subdivision 1, the term "St. Louis County" must be substituted for "the state," and the
129.22 revenue must be deposited as provided in subdivision 3.
129.23 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of the
129.24 St. Louis County Board of Commissioners and must be deposited in the county's
129.25 environmental response fund under section 383C.559.
129.26 Subd. 4. Expiration. The authority to impose the tax under this section expires
129.27 January 1, 2013.
129.28 Sec. 4. [383C.559] ST. LOUIS COUNTY ENVIRONMENTAL RESPONSE
129.29 FUND.
129.30 Subdivision 1. Creation. An environmental response fund is created for the
129.31 purposes specified in this section. The taxes imposed by section 383C.558 must be
130.1 deposited in the fund. The board of county commissioners shall administer the fund either
130.2 as a county board, a housing and redevelopment authority, or a regional rail authority.
130.3 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
130.4 following purposes:
130.5 (1) acquisition through purchase or condemnation of lands or property which are
130.6 polluted or contaminated with hazardous substances;
130.7 (2) paying the costs associated with indemnifying or holding harmless the
130.8 entity taking title to lands or property from any liability arising out of the ownership,
130.9 remediation, or use of the land or property;
130.10 (3) paying for the costs of remediating the acquired land or property;
130.11 (4) paying the costs associated with remediating lands or property which are polluted
130.12 or contaminated with hazardous substances; or
130.13 (5) paying for the costs associated with improving the property for economic
130.14 development, recreational, housing, transportation or rail traffic.
130.15 Subd. 3. Matching funds. In expending funds under this section, the county shall
130.16 seek matching funds from contamination cleanup funds administered by the commissioner
130.17 of the Department of Employment and Economic Development, the federal government,
130.18 the private sector, and any other source.
130.19 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
130.20 section 383C.558 to bonds issued under this chapter and chapters 398A, 462, 469, and 475.
130.21 Subd. 5. Land sales. Land or property acquired under this section may be resold
130.22 at fair market value. Proceeds from the sale of the land must be deposited in the
130.23 environmental response fund.
130.24 Subd. 6. DOT assistance. The commissioner of transportation shall collaborate with
130.25 the county and any affected municipality by providing technical assistance and support in
130.26 cleaning up a contaminated site related to a trunk highway or railroad improvement.
130.27 Sec. 5. [383D.75] COUNTY DEED AND MORTGAGE TAX.
130.28 Subdivision 1. Authority to impose; rate. (a) The governing body of Dakota
130.29 County may impose a mortgage registry and deed tax.
130.30 (b) The rate of the mortgage registry tax equals .0001 of the principal.
130.31 (c) The rate of the deed tax equals .0001 of the amount.
130.32 Subd. 2. General law provisions apply. The taxes under this section apply to
130.33 the same base and must be imposed, collected, administered, and enforced in the same
130.34 manner as provided under chapter 287 for the state mortgage registry and deed taxes.
130.35 All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
131.1 subdivision 1, the term "Dakota County" must be substituted for "the state," and the
131.2 revenue must be deposited as provided in subdivision 3.
131.3 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of
131.4 the Dakota County Board of Commissioners and must be deposited in the county's
131.5 environmental response fund under section 383D.76.
131.6 Subd. 4. Expiration. The authority to impose the tax under this section expires
131.7 January 1, 2013.
131.8 Sec. 6. [383D.76] ENVIRONMENTAL RESPONSE FUND.
131.9 Subdivision 1. Creation. An environmental response fund is created for the purposes
131.10 specified in this section. The taxes imposed by section 383D.75 must be deposited in the
131.11 fund. The Board of County Commissioners shall administer the fund either as a county
131.12 board, a housing and redevelopment authority, or a regional rail authority.
131.13 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
131.14 following purposes:
131.15 (1) acquisition through purchase or condemnation of lands or property which are
131.16 polluted or contaminated with hazardous substances;
131.17 (2) paying the costs associated with indemnifying or holding harmless the
131.18 entity taking title to lands or property from any liability arising out of the ownership,
131.19 remediation, or use of the land or property;
131.20 (3) paying for the costs of remediating the acquired land or property;
131.21 (4) paying the costs associated with remediating lands or property which are polluted
131.22 or contaminated with hazardous substances; or
131.23 (5) paying for the costs associated with improving the property for economic
131.24 development, recreational, housing, transportation or rail traffic.
131.25 Subd. 3. Matching funds. In expending funds under this section, the county shall
131.26 seek matching funds from contamination cleanup funds administered by the commissioner
131.27 of the Department of Employment and Economic Development, the Metropolitan Council,
131.28 the federal government, the private sector, and any other source.
131.29 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
131.30 section 383D.75 to bonds issued under this chapter and chapters 398A, 462, 469, and 475.
131.31 Subd. 5. Land sales. Land or property acquired under this section may be resold
131.32 at fair market value. Proceeds from the sale of the land must be deposited in the
131.33 environmental response fund.
132.1 Subd. 6. DOT assistance. The commissioner of transportation shall collaborate with
132.2 the county and any affected municipality by providing technical assistance and support in
132.3 cleaning up a contaminated site related to a trunk highway or railroad improvement.
132.4 Sec. 7. Minnesota Statutes 2004, section 469.176, subdivision 3, is amended to read:
132.5 Subd. 3. Limitation on administrative expenses. (a) For districts for which
132.6 certification was requested before August 1, 1979, or after June 30, 1982 and before
132.7 August 1, 2001, no tax increment shall be used to pay any administrative expenses for
132.8 a project which exceed ten percent of the total estimated tax increment expenditures
132.9 authorized by the tax increment financing plan or the total tax increment expenditures
132.10 for the project, whichever is less.
132.11 (b) For districts for which certification was requested after July 31, 1979, and before
132.12 July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in
132.13 Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the
132.14 total tax increment expenditures authorized by the tax increment financing plan or the total
132.15 estimated tax increment expenditures for the district, whichever is less.
132.16 (c) For districts for which certification was requested after July 31, 2001, no tax
132.17 increment may be used to pay any administrative expenses for a project which exceed
132.18 ten percent of total estimated tax increment expenditures authorized by the tax increment
132.19 financing plan or the total tax increments, as defined in section 469.174, subdivision 25,
132.20 clause (1), from the district, whichever is less.
132.21 (d) No administrative expenses or consulting costs incurred before certification of a
132.22 district may be paid from tax increments.
132.23 Sec. 8. Minnesota Statutes 2005 Supplement, section 469.1763, subdivision 2, is
132.24 amended to read:
132.25 Subd. 2. Expenditures outside district. (a) For each tax increment financing
132.26 district, an amount equal to at least 75 percent of the total revenue derived from tax
132.27 increments paid by properties in the district must be expended on activities in the district
132.28 or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
132.29 in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
132.30 For districts, other than redevelopment districts for which the request for certification
132.31 was made after June 30, 1995, the in-district percentage for purposes of the preceding
132.32 sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
132.33 increments paid by properties in the district may be expended, through a development fund
132.34 or otherwise, on activities outside of the district but within the defined geographic area of
133.1 the project except to pay, or secure payment of, debt service on credit enhanced bonds.
133.2 For districts, other than redevelopment districts for which the request for certification was
133.3 made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
133.4 20 percent. The revenue derived from tax increments for the district that are expended on
133.5 costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before
133.6 calculating the percentages that must be expended within and without the district.
133.7 (b) In the case of a housing district, a housing project, as defined in section 469.174,
133.8 subdivision 11, is an activity in the district.
133.9 (c) All administrative expenses are for activities outside of the district, except that
133.10 if the only expenses for activities outside of the district under this subdivision are for
133.11 the purposes described in paragraph (d), administrative expenses will be considered as
133.12 expenditures for activities in the district.
133.13 (d) The authority may elect, in the tax increment financing plan for the district,
133.14 to increase by up to ten percentage points the permitted amount of expenditures for
133.15 activities located outside the geographic area of the district under paragraph (a). As
133.16 permitted by section 469.176, subdivision 4k, the expenditures, including the permitted
133.17 expenditures under paragraph (a), need not be made within the geographic area of the
133.18 project. Expenditures that meet the requirements of this paragraph are legally permitted
133.19 expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
133.20 To qualify for the increase under this paragraph, the expenditures must:
133.21 (1) be used exclusively to assist housing that meets the requirement for a qualified
133.22 low-income building, as that term is used in section 42 of the Internal Revenue Code;
133.23 (2) not exceed the qualified basis of the housing, as defined under section 42(c) of
133.24 the Internal Revenue Code, less the amount of any credit allowed under section 42 of
133.25 the Internal Revenue Code; and
133.26 (3) be used to:
133.27 (i) acquire and prepare the site of the housing;
133.28 (ii) acquire, construct, or rehabilitate the housing; or
133.29 (iii) make public improvements directly related to the housing.
133.30 (e) For a district created within a biotechnology and health sciences industry zone
133.31 as defined in section 469.330, subdivision 6, or for an existing district located within
133.32 such a zone, tax increment derived from such a district may be expended outside of
133.33 the district but within the zone only for expenditures required for the construction of
133.34 public infrastructure necessary to support the activities of the zone. Public infrastructure
133.35 expenditures are considered as expenditures for activities within the district.
134.1 Sec. 9. Minnesota Statutes 2004, section 469.1763, subdivision 3, is amended to read:
134.2 Subd. 3. Five-year rule. (a) Revenues derived from tax increments are considered
134.3 to have been expended on an activity within the district under subdivision 2 only if one
134.4 of the following occurs:
134.5 (1) before or within five years after certification of the district, the revenues are
134.6 actually paid to a third party with respect to the activity;
134.7 (2) bonds, the proceeds of which must be used to finance the activity, are issued and
134.8 sold to a third party before or within five years after certification, the revenues are spent
134.9 to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
134.10 reasonably expected to be spent before the end of the later of (i) the five-year period, or
134.11 (ii) a reasonable temporary period within the meaning of the use of that term under section
134.12 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve
134.13 or replacement fund;
134.14 (3) binding contracts with a third party are entered into for performance of the
134.15 activity before or within five years after certification of the district and the revenues are
134.16 spent under the contractual obligation;
134.17 (4) costs with respect to the activity are paid before or within five years after
134.18 certification of the district and the revenues are spent to reimburse a party for payment
134.19 of the costs, including interest on unreimbursed costs; or
134.20 (5) expenditures are made for housing purposes as permitted by subdivision 2,
134.21 paragraph (b), or for public infrastructure purposes within a zone as permitted by
134.22 subdivision 2, paragraph (e).
134.23 (b) For purposes of this subdivision, bonds include subsequent refunding bonds if
134.24 the original refunded bonds meet the requirements of paragraph (a), clause (2).
134.25 Sec. 10. Minnesota Statutes 2004, section 469.1763, subdivision 4, is amended to read:
134.26 Subd. 4. Use of revenues for decertification. (a) In each year beginning with the
134.27 sixth year following certification of the district, if the applicable in-district percent of the
134.28 revenues derived from tax increments paid by properties in the district exceeds the amount
134.29 of expenditures that have been made for costs permitted under subdivision 3, an amount
134.30 equal to the difference between the in-district percent of the revenues derived from tax
134.31 increments paid by properties in the district and the amount of expenditures that have
134.32 been made for costs permitted under subdivision 3 must be used and only used to pay or
134.33 defease the following or be set aside to pay the following:
134.34 (1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b);
134.35 (2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4); or
135.1 (3) credit enhanced bonds to which the revenues derived from tax increments are
135.2 pledged, but only to the extent that revenues of the district for which the credit enhanced
135.3 bonds were issued are insufficient to pay the bonds and to the extent that the increments
135.4 from the applicable pooling percent share for the district are insufficient; or
135.5 (4) the amount provided by the tax increment financing plan to be paid under
135.6 subdivision 2, paragraph (e).
135.7 (b) When the outstanding bonds have been defeased and when sufficient money
135.8 has been set aside to pay contractual obligations as defined in subdivision 3, paragraph
135.9 (a), clauses (3) and (4), the district must be decertified and the pledge of tax increment
135.10 discharged.
135.11 Sec. 11. Minnesota Statutes 2004, section 469.312, subdivision 5, is amended to read:
135.12 Subd. 5. Duration limit. (a) The maximum duration of a zone is 12 years. The
135.13 applicant may request a shorter duration. The commissioner may specify a shorter
135.14 duration, regardless of the requested duration.
135.15 (b) The duration limit under this subdivision and the duration of the zone for
135.16 purposes of allowance of tax incentives described in section 469.315 is extended by three
135.17 calendar years for each parcel of property that meets the following requirements:
135.18 (1) the qualified business operates an ethanol plant, as defined in section 41A.09, on
135.19 the site that includes the parcel; and
135.20 (2) the business subsidy agreement was executed after April 30, 2006.
135.21 EFFECTIVE DATE.This section is effective the day following final enactment.
135.22 Sec. 12. Laws 1994, chapter 587, article 9, section 20, subdivision 1, is amended to
135.23 read:
135.24
135.25 Subdivision 1. Establishment. The city of Brooklyn Park may establish an
135.26 economic development tax increment financing district in which 15 percent all of the
135.27 revenue generated from tax increment in any year that is not expended pursuant to a
135.28 pledge given or encumbrance created before January 1, 2006, is deposited in the housing
135.29 development account of the authority and expended according to the tax increment
135.30 financing plan.
135.31 Sec. 13. Laws 1994, chapter 587, article 9, section 20, subdivision 2, is amended to
135.32 read:
135.33
136.1 Subd. 2. Eligible activities. The authority must identify in the plan the housing
136.2 activities that will be assisted by the housing development account. Housing activities
136.3 may include rehabilitation, acquisition, demolition, and financing of new or existing
136.4 single family or multifamily housing. Housing activities listed in the plan need not be
136.5 located within the district or project area but must be activities that meet the requirements
136.6 of a qualified housing district under Minnesota Statutes, section 273.1399 or 469.1761,
136.7 subdivision 2, for owner-occupied housing or 469.174, subdivision 29, clause (1), for
136.8 rental housing.
136.9 Sec. 14. ANOKA COUNTY DEED AND MORTGAGE TAX.
136.10 Subdivision 1. Authority to impose; rate. (a) The governing body of Anoka
136.11 County may impose a mortgage registry and deed tax.
136.12 (b) The rate of the mortgage registry tax equals .0001 of the principal.
136.13 (c) The rate of the deed tax equals .0001 of the amount.
136.14 Subd. 2. General law provisions apply. The taxes under this section apply to
136.15 the same base and must be imposed, collected, administered, and enforced in the same
136.16 manner as provided under chapter 287 for the state mortgage registry and deed taxes.
136.17 All the provisions of chapter 287 apply to these taxes, except the rate is as specified
136.18 in subdivision 1, the term "Anoka County" must be substituted for "the state," and the
136.19 revenue must be deposited as provided in subdivision 3.
136.20 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of the Anoka
136.21 County Board of Commissioners and must be deposited in the county's environmental
136.22 response fund under section 15.
136.23 Subd. 4. Expiration. The authority to impose the tax under this section expires
136.24 January 1, 2013.
136.25 Sec. 15. ANOKA COUNTY ENVIRONMENTAL RESPONSE FUND.
136.26 Subdivision 1. Creation. An environmental response fund is created for the
136.27 purposes specified in this section. The taxes imposed by section 14 must be deposited
136.28 in the fund. The Board of County Commissioners shall administer the fund either as a
136.29 county board, a housing and redevelopment authority, or a regional rail authority.
136.30 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
136.31 following purposes:
136.32 (1) acquisition through purchase or condemnation of lands or property which are
136.33 polluted or contaminated with hazardous substances;
137.1 (2) paying the costs associated with indemnifying or holding harmless the
137.2 entity taking title to lands or property from any liability arising out of the ownership,
137.3 remediation, or use of the land or property;
137.4 (3) paying for the costs of remediating the acquired land or property;
137.5 (4) paying the costs associated with remediating lands or property which are polluted
137.6 or contaminated with hazardous substances; or
137.7 (5) paying for the costs associated with improving the property for economic
137.8 development, recreational, housing, transportation or rail traffic.
137.9 Subd. 3. Matching funds. In expending funds under this section, the county shall
137.10 seek matching funds from contamination cleanup funds administered by the commissioner
137.11 of the Department of Employment and Economic Development, the Metropolitan Council,
137.12 the federal government, the private sector, and any other source.
137.13 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
137.14 section 14 to bonds issued under this chapter and chapters 398A, 462, 469, and 475.
137.15 Subd. 5. Land sales. Land or property acquired under this section may be resold
137.16 at fair market value. Proceeds from the sale of the land must be deposited in the
137.17 environmental response fund.
137.18 Subd. 6. DOT assistance. The commissioner of transportation shall collaborate with
137.19 the county and any affected municipality by providing technical assistance and support in
137.20 cleaning up a contaminated site related to a trunk highway or railroad improvement.
137.21 Sec. 16. CITY OF BLOOMINGTON; TIF DISTRICT EXTENSION.
137.22 Notwithstanding the provisions of Minnesota Statutes, section 469.176, or Laws
137.23 1996, chapter 464, article 1, section 8, or any other law to the contrary, the city of
137.24 Bloomington and its port authority may elect to extend the duration limits of tax increment
137.25 financing district No. 1-G, containing the former Met Center property, for a period through
137.26 December 31, 2033, and tax increment financing district No. 1-C, containing the Mall of
137.27 America development, for a period through December 31, 2033.
137.28 EFFECTIVE DATE.This section is effective upon compliance by the governing
137.29 body of the city of Bloomington with the requirements of Minnesota Statutes, section
137.30 645.021, and by the governing bodies of the county, city, and school district as required
137.31 by Minnesota Statutes, section 469.1782, subdivision 2.
137.32 Sec. 17. CITY OF BROOKLYN PARK TAX INCREMENT FINANCING
137.33 DISTRICT EXTENSION.
138.1 Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, or any other
138.2 law to the contrary, the duration limit that applies to the economic development tax
138.3 increment financing district established under Laws 1994, chapter 587, article 9, section
138.4 20, is extended to December 31, 2020.
138.5 Sec. 18. BURNSVILLE; NORTHWEST QUADRANT TAX INCREMENT
138.6 FINANCING.
138.7 Subdivision 1. Definitions. (a) For the purposes of this section, the words and
138.8 phrases defined have the meanings given them in this subdivision.
138.9 (b) "Project area" means the area in the city bounded on the south, southeast, and
138.10 southwest by the southerly right-of-way line of Minnesota Trunk Highway 13; on the east
138.11 by the easterly right-of-way line of Interstate Highway I-35W; on the north and northwest
138.12 by the Minnesota River; and on the west by the westerly corporate limits of the city;
138.13 together with a single parcel to the east of said Interstate Highway I-35W described as the
138.14 North 1370 feet of the West 1075 feet of the NW 1/4 of Section 34 Township 27 Range 24
138.15 in the city of Burnsville, Dakota County, except the North 50 feet thereof; provided that
138.16 the project area includes the rights-of-way for all present and future highway interchanges
138.17 abutting the area described in this paragraph.
138.18 (c) "Soils deficiency district" means a type of tax increment financing district
138.19 consisting of a portion of the project area in which the city finds by resolution that the
138.20 following conditions exist:
138.21 (1) unusual terrain or soil deficiencies for 80 percent of the acreage in the district
138.22 require substantial filling, grading, or other physical preparation for use;
138.23 (2) the estimated cost of the physical preparation under clause (1), but excluding
138.24 costs directly related to roads as defined in Minnesota Statutes, section 160.01, and local
138.25 improvement as described in Minnesota Statutes, section 429.021, subdivision 1, clauses
138.26 (1) to (7), (11) and (12), and 430.01, exceeds the fair market value of the land before
138.27 completion of the preparation.
138.28 Subd. 2. Special rules. (a) If the city elects, upon the adoption of the tax increment
138.29 financing plan for a district, the rules under this section apply to a redevelopment district,
138.30 renewal and renovation district, soils condition district, or soils deficiency district
138.31 established by the city of Burnsville or a development authority of the city in the project
138.32 area.
138.33 (b) The five-year rule under Minnesota Statutes, section 469.1763, subdivisions 3
138.34 and 4, is extended to ten years for any district.
139.1 (c) The limitations on spending tax increment outside of the district under Minnesota
139.2 Statutes, section 469.1763, subdivision 2, do not apply, but increments may only be
139.3 expended on improvements or activities within the project area.
139.4 (d) In the case of a soil deficiency district:
139.5 (1) increments may be collected through 20 years after the receipt by the authority of
139.6 the first increment from the district; and
139.7 (2) except as otherwise provided in this subdivision, increments may be used only
139.8 to: (i) acquire parcels on which the improvements described in clause (ii) will occur; (ii)
139.9 pay for the cost of correcting the unusual terrain or soil deficiencies and the additional cost
139.10 of installing public improvements directly caused by the deficiencies; and (iii) pay for the
139.11 administrative expenses of the authority allocable to the district.
139.12 (e) Increments spent for any infrastructure costs (whether inside a district or outside
139.13 a district but within the project area) are deemed to satisfy the requirements of paragraph
139.14 (d) and Minnesota Statutes, section 469.176, subdivisions 4b and 4j.
139.15 (f) The authority to approve tax increment financing plans to establish tax increment
139.16 financing districts under this section expires December 31, 2026.
139.17 EFFECTIVE DATE.This section is effective upon compliance with Minnesota
139.18 Statutes, section 645.021, subdivision 3.
139.19 Sec. 19. BURNSVILLE; HEART OF THE CITY TAX INCREMENT
139.20 FINANCING DISTRICT.
139.21 Notwithstanding any contrary provision of law, the five-year rule under Minnesota
139.22 Statutes, section 469.1763, subdivisions 3 and 4, is extended to ten years for tax increment
139.23 derived from the parcel described as Lot 2, Block 1, Nicollet Commons Park within tax
139.24 increment financing District No. 6 established by the city and its economic development
139.25 authority on April 15, 2002.
139.26 EFFECTIVE DATE.This section is effective upon compliance with Minnesota
139.27 Statutes, section 645.021, subdivision 3.
139.28 Sec. 20. CITY OF DETROIT LAKES; REDEVELOPMENT TAX INCREMENT
139.29 FINANCING DISTRICT.
139.30 Subdivision 1. Authorization. At the election of the governing body of the city of
139.31 Detroit Lakes, upon adoption of the tax increment financing plan for the district described
139.32 in this section, the rules provided under this section apply to each such district.
140.1 Subd. 2. Definition. In this section, "district" means a redevelopment district
140.2 established by the city of Detroit Lakes or the Detroit Lakes Development Authority
140.3 within the following area:
140.4 Beginning at the intersection of Washington Avenue and the Burlington Northern
140.5 Santa Fe railroad then east to the intersection of Roosevelt Avenue then south to the
140.6 intersection of Highway 10/Frazee Street then west to the intersection of Frazee Street and
140.7 the alley that parallels Washington Avenue then north to the point of beginning.
140.8 More than one district may be created under this section.
140.9 Subd. 3. Qualification as redevelopment district; special rules. The district shall
140.10 be a redevelopment district under Minnesota Statutes, section 469.174, subdivision 10. All
140.11 buildings that are removed to facilitate the Highway 10 Realignment Project are deemed
140.12 to be "structurally substandard." The three-year limit after demolition of the buildings to
140.13 request tax increment financing certification provided in Minnesota Statutes, section
140.14 469.174, subdivision 10, paragraph (d), clause (1), does not apply.
140.15 Subd. 4. Expiration. The authority to approve tax increment financing plans to
140.16 establish a tax increment financing redevelopment district subject to this section expires
140.17 on December 31, 2014.
140.18 Subd. 5. Effective date. This section is effective upon approval of the governing
140.19 body of the city of Detroit Lakes and compliance with Minnesota Statutes, section
140.20 645.021, subdivision 3.
140.21 Sec. 21. CITIES OF ELGIN, EYOTA, BYRON, AND ORONOCO; TAX
140.22 INCREMENT FINANCING DISTRICTS.
140.23 Subdivision 1. Authorization. Notwithstanding the mileage limitation in Minnesota
140.24 Statutes, section 469.174, subdivision 27, the cities of Elgin, Eyota, Byron, and Oronoco
140.25 are deemed to be small cities for purposes of Minnesota Statutes, sections 469.174 to
140.26 469.1799, as long as they do not exceed the population limit in that section.
140.27 Subd. 2. Local approval. This section is effective for each of the cities of Elgin,
140.28 Eyota, Byron, and Oronoco upon approval of that city's governing body and compliance
140.29 with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
140.30 Sec. 22. CITY OF MINNEAPOLIS; HOMELESS ASSISTANCE TAX
140.31 INCREMENT DISTRICT.
140.32 Subdivision 1. Definitions. (a) "City" means the city of Minneapolis.
140.33 (b) "Homeless assistance tax increment district" means a contiguous area of the
140.34 city that:
141.1 (1) is no larger than six acres;
141.2 (2) is located within the boundaries of a city municipal development district; and
141.3 (3) contains at least two shelters for homeless persons that have been owned or
141.4 operated by nonprofit corporations that (i) are qualified charitable organizations under
141.5 section 501(c)(3) of the United States Internal Revenue Code, (ii) have operated such
141.6 homeless facilities within the district for at least five years, and (iii) have been recipients
141.7 of emergency services grants under Minnesota Statutes, section 256E.36.
141.8 Subd. 2. Establishment of tax increment district. The city may create one
141.9 homeless assistance tax increment district. To establish the homeless assistance tax
141.10 increment district, the city shall adopt a homeless assistance tax increment plan and
141.11 otherwise comply with the requirements of Minnesota Statutes, section 469.175, except
141.12 that the determinations required in Minnesota Statutes, section 469.175, subdivision 3,
141.13 paragraph (b), clauses (1) and (2), items (i) and (ii), are not required.
141.14 Subd. 3. Application of tax increment law. Minnesota Statutes, sections 469.174
141.15 to 469.179, shall apply to the administration of the district, except:
141.16 (1) as this section provides otherwise; and
141.17 (2) with respect to the portion of the increment to be expended for homeless shelter
141.18 and services pursuant to subdivision 5, paragraph (b):
141.19 (i) the use for which tax increment that may be expended is as provided by
141.20 subdivision 5; and
141.21 (ii) Minnesota Statutes, sections 469.1761 and 469.1763, do not apply.
141.22 Subd. 4. Duration limitation. No tax increment generated by the district shall
141.23 be paid to the city after the expiration of 25 years from the receipt by the city of the
141.24 first increment from that district.
141.25 Subd. 5. Limitations on use of increment. (a) All increment received by the city
141.26 from the district shall be used in accordance with the homeless assistance tax increment
141.27 district plan.
141.28 (b) No less than 40 percent of the increment, after deduction of allowable
141.29 administrative expenses under Minnesota Statutes, section 469.176, subdivision 3, shall
141.30 be used to provide emergency shelter and services for homeless persons within and
141.31 outside the district.
141.32 (c) The remainder of the tax increment derived from the district shall be used for
141.33 purposes allowed under Minnesota Statutes, section 469.176, subdivision 4.
141.34 Subd. 6. Applicability of other laws. References in Minnesota Statutes to tax
141.35 increment financing districts created and tax increment generated under Minnesota
142.1 Statutes, sections 469.174 to 469.179, include the homeless assistance district and tax
142.2 increment subject to this section.
142.3 EFFECTIVE DATE.This section is effective upon compliance by the city of
142.4 Minneapolis with Minnesota Statutes, section 645.021.
142.5 Sec. 23. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING;
142.6 EXPENDITURES OUTSIDE DISTRICT.
142.7 Notwithstanding the provisions of Minnesota Statutes, section 469.1763, subdivision
142.8 2, the city of New Brighton may expend tax increments from District No. 26 for eligible
142.9 activities described in Minnesota Statutes, section 469.176, subdivision 4e, outside of Tax
142.10 Increment District No. 26, but only within the area described in Laws 1998, chapter 389,
142.11 article 11, section 24, subdivision 1. Minnesota Statutes, section 469.1763, subdivision 3,
142.12 and Minnesota Statutes, section 469.1763, subdivision 4, shall not apply to expenditures
142.13 permitted in this section.
142.14 EFFECTIVE DATE.This section is effective upon approval by the governing body
142.15 of the city of New Brighton and compliance with Minnesota Statutes, section 645.021,
142.16 subdivision 3.
142.17 Sec. 24. CITY OF RAMSEY; TAX INCREMENT FINANCING.
142.18 Subdivision 1. Authority. The governing body of the city of Ramsey or a
142.19 development authority established by the city may create a tax increment financing
142.20 district, consisting of the property defined as outlot L, Ramsey Town Center Addition and
142.21 lot 2, block 1, Ramsey Town Center Addition.
142.22 Subd. 2. Special rules. Establishment of the district is subject to the requirements
142.23 of Minnesota Statutes, sections 469.174 to 469.1799 with the following exceptions:
142.24 (1) the district is deemed to be a redevelopment district without regard to the
142.25 requirements of Minnesota Statutes, section 469.174, subdivision 10;
142.26 (2) the provisions of Minnesota Statutes, section 469.176, subdivision 7, do not
142.27 apply to the district;
142.28 (3) housing receiving assistance, directly or indirectly, from the expenditures of
142.29 the district's increments must meet the requirements of Minnesota Statutes, sections
142.30 469.174, subdivision 11, and 469.1761;
142.31 (4) the district's increments must be used only to pay for costs related to the Sunwood
142.32 on Grand project, including land acquisition, public infrastructure, parking ramps, and
143.1 administrative expenses, whether paid directly to reimburse for payment of those costs or
143.2 to repay bonds or other obligations issued and sold to pay those costs initially; and
143.3 (5) general obligations bonds issued to pay for costs related to the project subject
143.4 to this section are not subject to the net debt limit of the city under Minnesota Statutes,
143.5 section 475.53, or any other law or charter provision.
143.6 EFFECTIVE DATE.This section is effective upon local approval by the governing
143.7 body of the city of Ramsey in compliance with the requirement of Minnesota Statutes,
143.8 section 645.021.
143.9 Sec. 25. CITY OF ST. MICHAEL; TAX INCREMENT FINANCING DISTRICT.
143.10 Subdivision 1. Establishment of district. The city of St. Michael may establish
143.11 a redevelopment tax increment financing district subject to Minnesota Statutes, sections
143.12 469.174 to 469.179, except as provided in this section. The district must be established
143.13 within an area that includes the downtown and town center areas as designated by the city
143.14 as well as all parcels adjacent to marked Trunk Highway 241 within the city.
143.15 Subd. 2. Special rules. (a) Notwithstanding the requirements of Minnesota
143.16 Statutes, section 469.174, subdivision 10, the district may be established and operated as
143.17 a redevelopment district.
143.18 (b) Notwithstanding the restrictions of Minnesota Statutes, sections 469.176,
143.19 subdivisions 4 and 4j, and 469.1763, subdivision 2, revenues derived from tax increments
143.20 from the district created under this section may be used to meet the cost of land
143.21 acquisition, removal of buildings in the right-of-way acquisition area, and other costs
143.22 incurred by the city of St. Michael in the expansion and improvement of marked Trunk
143.23 Highway 241 within the city.
143.24 (c) Minnesota Statutes, section 469.176, subdivision 5, does not apply to the district.
143.25 EFFECTIVE DATE.This section is effective the day after the governing body of
143.26 the city of St. Michael complies with Minnesota Statutes, section 645.021, subdivision 3.
143.27 Sec. 26. QUALIFIED BUSINESS; SMALL DECLINING POPULATION
143.28 COUNTY.
143.29 Notwithstanding Minnesota Statutes, section 469.310, subdivision 11, paragraph
143.30 (f), a qualified business for purposes of Minnesota Statutes, section 469.310, subdivision
143.31 11, includes a food service business if the business is located solely in a qualified county,
143.32 and if the business began operations in January 2004, with employment of between 15
143.33 and 20 part-time and full-time employees. For the purpose of this section, a "qualified
144.1 county" is a county having an estimated population of less than 5,000 in 2004 and that
144.2 experienced a reduction in population of at least 7.5 percent between 2000 and 2004,
144.3 according to the state demographer.
144.4 EFFECTIVE DATE.This section is effective the day following final enactment.
144.5 Sec. 27. REPEALER.
144.6 (a) Laws 1994, chapter 587, article 9, section 20, subdivision 4, is repealed.
144.7 (b)Laws 1996, chapter 464, article 1, section 8, subdivision 5, is repealed.
144.8 Sec. 28. REPEALER; DISTRIBUTION OF CERTAIN BURNSVILLE TAX
144.9 INCREMENTS.
144.10 Laws 1998, chapter 389, article 11, section 18, is repealed. The balance of tax
144.11 increments derived from tax increment financing district no. 2-1 as of the effective date
144.12 of this act must be returned to the county for distribution in accordance with Minnesota
144.13 Statutes, section 469.176, subdivision 2.
144.14 EFFECTIVE DATE.This section is effective upon compliance with Minnesota
144.15 Statutes, section 645.021, subdivision 3.
144.16 ARTICLE 11
144.17 AIDS AND CREDITS
144.18 Section 1. Minnesota Statutes 2005 Supplement, section 477A.011, subdivision 36,
144.19 is amended to read:
144.20 Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision,
144.21 "city aid base" is zero.
144.22 (b) The city aid base for any city with a population less than 500 is increased by
144.23 $40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
144.24 of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
144.25 increased by $40,000 for aids payable in calendar year 1995 only, provided that:
144.26 (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
144.27 (ii) the city portion of the tax capacity rate exceeds 100 percent; and
144.28 (iii) its city aid base is less than $60 per capita.
144.29 (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
144.30 the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
144.31 paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
144.32 (i) the city has a population in 1994 of 2,500 or more;
145.1 (ii) the city is located in a county, outside of the metropolitan area, which contains a
145.2 city of the first class;
145.3 (iii) the city's net tax capacity used in calculating its 1996 aid under section
145.4 477A.013 is less than $400 per capita; and
145.5 (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
145.6 property located in the city is classified as railroad property.
145.7 (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
145.8 the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
145.9 paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
145.10 (i) the city was incorporated as a statutory city after December 1, 1993;
145.11 (ii) its city aid base does not exceed $5,600; and
145.12 (iii) the city had a population in 1996 of 5,000 or more.
145.13 (e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the
145.14 maximum amount of total aid it may receive under section 477A.013, subdivision 9,
145.15 paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:
145.16 (i) the city had a population in 1996 of at least 50,000;
145.17 (ii) its population had increased by at least 40 percent in the ten-year period ending
145.18 in 1996; and
145.19 (iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.
145.20 (f) The city aid base for a city is increased by $150,000 for aids payable in 2000 and
145.21 thereafter, and the maximum amount of total aid it may receive under section 477A.013,
145.22 subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2000 only,
145.23 provided that:
145.24 (1) the city has a population that is greater than 1,000 and less than 2,500;
145.25 (2) its commercial and industrial percentage for aids payable in 1999 is greater
145.26 than 45 percent; and
145.27 (3) the total market value of all commercial and industrial property in the city
145.28 for assessment year 1999 is at least 15 percent less than the total market value of all
145.29 commercial and industrial property in the city for assessment year 1998.
145.30 (g) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and
145.31 the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
145.32 paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
145.33 (1) the city had a population in 1997 of 2,500 or more;
145.34 (2) the net tax capacity of the city used in calculating its 1999 aid under section
145.35 477A.013 is less than $650 per capita;
146.1 (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
146.2 section 477A.013 is greater than 12 percent;
146.3 (4) the 1999 local government aid of the city under section 477A.013 is less than
146.4 20 percent of the amount that the formula aid of the city would have been if the need
146.5 increase percentage was 100 percent; and
146.6 (5) the city aid base of the city used in calculating aid under section 477A.013
146.7 is less than $7 per capita.
146.8 (h) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and
146.9 the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
146.10 paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
146.11 (1) the city has a population in 1997 of 2,000 or more;
146.12 (2) the net tax capacity of the city used in calculating its 1999 aid under section
146.13 477A.013 is less than $455 per capita;
146.14 (3) the net levy of the city used in calculating 1999 aid under section 477A.013 is
146.15 greater than $195 per capita; and
146.16 (4) the 1999 local government aid of the city under section 477A.013 is less than
146.17 38 percent of the amount that the formula aid of the city would have been if the need
146.18 increase percentage was 100 percent.
146.19 (i) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
146.20 the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
146.21 paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
146.22 (1) the city has a population in 1998 that is greater than 200 but less than 500;
146.23 (2) the city's revenue need used in calculating aids payable in 2000 was greater
146.24 than $200 per capita;
146.25 (3) the city net tax capacity for the city used in calculating aids available in 2000
146.26 was equal to or less than $200 per capita;
146.27 (4) the city aid base of the city used in calculating aid under section 477A.013
146.28 is less than $65 per capita; and
146.29 (5) the city's formula aid for aids payable in 2000 was greater than zero.
146.30 (j) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
146.31 the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
146.32 paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
146.33 (1) the city had a population in 1998 that is greater than 200 but less than 500;
146.34 (2) the city's commercial industrial percentage used in calculating aids payable in
146.35 2000 was less than ten percent;
147.1 (3) more than 25 percent of the city's population was 60 years old or older according
147.2 to the 1990 census;
147.3 (4) the city aid base of the city used in calculating aid under section 477A.013
147.4 is less than $15 per capita; and
147.5 (5) the city's formula aid for aids payable in 2000 was greater than zero.
147.6 (k) The city aid base for a city is increased by $45,000 in 2001 and thereafter and by
147.7 an additional $50,000 in calendar years 2002 to 2011, and by an additional $89,000 in
147.8 calendar years 2007 to 2011, and the maximum amount of total aid it may receive under
147.9 section 477A.013, subdivision 9, paragraph (c), is also increased by $45,000 in calendar
147.10 year 2001 only, and by $50,000 in calendar year 2002 only, and by an additional $89,000
147.11 in calendar year 2007 only, provided that:
147.12 (1) the net tax capacity of the city used in calculating its 2000 aid under section
147.13 477A.013 is less than $810 per capita;
147.14 (2) the population of the city declined more than two percent between 1988 and 1998;
147.15 (3) the net levy of the city used in calculating 2000 aid under section 477A.013 is
147.16 greater than $240 per capita; and
147.17 (4) the city received less than $36 per capita in aid under section 477A.013,
147.18 subdivision 9, for aids payable in 2000.
147.19 (l) The city aid base for a city with a population of 10,000 or more which is located
147.20 outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the
147.21 maximum amount of total aid it may receive under section 477A.013, subdivision 9,
147.22 paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
147.23 the lesser of:
147.24 (1)(i) the total population of the city, as determined by the United States Bureau of
147.25 the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
147.26 (2) $2,500,000.
147.27 (m) The city aid base is increased by $50,000 in 2002 and thereafter, and the
147.28 maximum amount of total aid it may receive under section 477A.013, subdivision 9,
147.29 paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
147.30 (1) the city is located in the seven-county metropolitan area;
147.31 (2) its population in 2000 is between 10,000 and 20,000; and
147.32 (3) its commercial industrial percentage, as calculated for city aid payable in 2001,
147.33 was greater than 25 percent.
147.34 (n) The city aid base for a city is increased by $150,000 in calendar years 2002 to
147.35 2011, and by an additional $50,000 in calendar years 2007 to 2016, and the maximum
147.36 amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c),
148.1 is also increased by $150,000 in calendar year 2002 only, and by an additional $50,000
148.2 in calendar year 2007 only, provided that:
148.3 (1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
148.4 (2) its home county is located within the seven-county metropolitan area;
148.5 (3) its pre-1940 housing percentage is less than 15 percent; and
148.6 (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
148.7 per capita.
148.8 (o) The city aid base for a city is increased by $200,000 beginning in calendar
148.9 year 2003 and the maximum amount of total aid it may receive under section 477A.013,
148.10 subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only,
148.11 provided that the city qualified for an increase in homestead and agricultural credit aid
148.12 under Laws 1995, chapter 264, article 8, section 18.
148.13 (p) The city aid base for a city is increased by $200,000 in 2004 only and the
148.14 maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
148.15 also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
148.16 dry cask storage facility.
148.17 (q) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the
148.18 maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
148.19 by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster
148.20 designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by
148.21 more than 40 percent between 1990 and 2000.
148.22 (r) The city aid base for a city is increased by $25,000 in 2006 only and the
148.23 maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
148.24 by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000
148.25 and has a state park for which the city provides rescue services and which comprised at
148.26 least 14 percent of the total geographic area included within the city boundaries in 2000.
148.27 (s) The city aid base for a city with a population less than 5,000 is increased in
148.28 2006 and thereafter and the minimum and maximum amount of total aid it may receive
148.29 under this section is also increased in calendar year 2006 only by an amount equal to
148.30 $6 multiplied by its population.
148.31 EFFECTIVE DATE.This section is effective beginning with aids payable in 2007.
148.32 Sec. 2. Minnesota Statutes 2005 Supplement, section 477A.013, subdivision 8, is
148.33 amended to read:
148.34 Subd. 8. City formula aid. In calendar year 2004 and subsequent years, the
148.35 formula aid for a city is equal to the need increase percentage multiplied by the difference
149.1 between (1) the city's revenue need multiplied by its population, and (2) the sum of the
149.2 city's net tax capacity multiplied by the tax effort rate; the taconite aids under sections
149.3 298.28 and 298.282 to any city except a city directly impacted by a taconite mine or plant,
149.4 multiplied by the following percentages:
149.5 (i) zero percent for aids payable in 2004;
149.6 (ii) 25 percent for aids payable in 2005;
149.7 (iii) 50 percent for aids payable in 2006;
149.8 (iv) 75 percent for aids payable in 2007; and
149.9 (v) 100 percent for aids payable in 2008 and thereafter.
149.10 For purposes of this subdivision, "a city directly impacted by a taconite mine or
149.11 plant" means: (1) Babbit, (2) Eveleth, (3) Hibbing, (4) Keewatin, (5) Mountain Iron, (6)
149.12 Silver Bay, or (7) Virginia.
149.13 No city may have a formula aid amount less than zero. The need increase percentage
149.14 must be the same for all cities.
149.15 The applicable need increase percentage must be calculated by the Department of
149.16 Revenue so that the total of the aid under subdivision 9 equals the total amount available
149.17 for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions 4
149.18 and 5 is 100 percent for aids payable in 2007 and thereafter.
149.19 Sec. 3. Minnesota Statutes 2004, section 477A.013, subdivision 9, is amended to read:
149.20 Subd. 9. City aid distribution. (a) In calendar year 2002 and thereafter, each
149.21 city shall receive an aid distribution equal to the sum of (1) the city formula aid under
149.22 subdivision 8, and (2) its city aid base.
149.23 (b) The aid for a city in calendar year 2004 shall not exceed the amount of its aid in
149.24 calendar year 2003 after the reductions under Laws 2003, First Special Session chapter 21,
149.25 article 5.
149.26 (c) For aids payable in 2005 and thereafter, and 2006, the total aid for any city
149.27 shall not exceed the sum of (1) ten percent of the city's net levy for the year prior to the
149.28 aid distribution plus (2) its total aid in the previous year. For aids payable in 2005 and
149.29 thereafter, the total aid for any city with a population of 2,500 or more may not decrease
149.30 from its total aid under this section in the previous year by an amount greater than ten
149.31 percent of its net levy in the year prior to the aid distribution.
149.32 (d) For aids payable in 2004 only, the total aid for a city with a population less than
149.33 2,500 may not be less than the amount it was certified to receive in 2003 minus the greater
149.34 of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special Session
149.35 chapter 21, article 5, or (2) five percent of its 2003 aid amount. (c) For aids payable in
150.1 2005 and thereafter, the total aid for a city with a population less than 2,500 must not be
150.2 less than the amount it was certified to receive in the previous year minus five percent
150.3 of its 2003 certified aid amount.
150.4 EFFECTIVE DATE.This section is effective beginning with aids payable in 2007.
150.5 Sec. 4. Minnesota Statutes 2005 Supplement, section 477A.03, subdivision 2a, is
150.6 amended to read:
150.7 Subd. 2a. Cities. For aids payable in 2004, the total aids paid under section
150.8 477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the total
150.9 aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. For aids
150.10 payable in 2006 and thereafter, the total aids paid under section 477A.013, subdivision 9,
150.11 is limited to $485,052,000, plus the amount of the payments provided in section 5.
150.12 EFFECTIVE DATE.This section is effective beginning with aids payable in 2006.
150.13 Sec. 5. Laws 2005, First Special Session chapter 3, article 2, section 5, is amended to
150.14 read:
150.15 Sec. 5. 2005 AND 2006 CITY AID PAYMENTS.
150.16
150.17 In 2005 and 2006, market value credit reimbursements for each city payable under
150.18 Minnesota Statutes, section 273.1384, are reduced by the dollar amount of the 2003
150.19 reduction in market value credit reimbursements for that city due to Laws 2003, First
150.20 Special Session chapter 21, article 5, section 12. No city's 2005 or 2006 market value
150.21 credit reimbursements are reduced to less than zero under this section. To the extent
150.22 sufficient information is available on each payment date, the commissioner shall pay the
150.23 annual 2005 and 2006 market value credit reimbursement amounts, after reduction under
150.24 this section, to cities in equal installments on the dates specified in Minnesota Statutes,
150.25 section 273.1384.
150.26
150.27 Sec. 6. ONETIME 2006 ADDITIONAL CITY AID.
150.28 Subdivision 1. Computation. For aid payable in 2006 only, the aid payable to
150.29 each city under Minnesota Statutes, section 477A.013, subdivision 9, is increased by the
150.30 difference between the amount that would have been paid to the city under that provision
150.31 and the amount that would be payable to the city if the aid were determined as follows:
151.1 (1) the city revenue need under Minnesota Statutes, section 477A.011, subdivision
151.2 34, must be multiplied by the ratio of the annual implicit price deflator for government
151.3 consumption expenditures and gross investment for state and local governments as
151.4 prepared by the United States Department of Commerce for 2004 to the 2002 implicit
151.5 price deflator for state and local government purchases;
151.6 (2) taconite aids under Minnesota Statutes, sections 298.28 and 298.282, must
151.7 not be added to the city net tax capacity under Minnesota Statutes, section 477A.013,
151.8 subdivision 8;
151.9 (3) the need increase percentage under Minnesota Statutes, section 477A.013,
151.10 subdivision 8, shall be equal to 100 percent;
151.11 (4) the restriction under Minnesota Statutes, section 477A.013, subdivision 9, that
151.12 the total aid for any city shall not exceed the sum of ten percent of the city's net levy in the
151.13 previous year plus its total aid in the previous year shall not apply; and
151.14 (5) no city shall receive less aid than it was originally certified to receive for aids
151.15 payable in 2006.
151.16 The aid payable under this section must be used by cities for debt reduction, pension
151.17 funding, capital improvements, deferred maintenance, fee reduction, or to pay costs
151.18 related to public safety.
151.19 Subd. 2. Appropriation; payment. The commissioner of revenue shall make the
151.20 payments of the additional 2006 city aid in three installments on May 1, July 20, and
151.21 December 26, 2006. An amount sufficient to pay the aid under this section is appropriated
151.22 to the commissioner of revenue from the general fund.
151.23 EFFECTIVE DATE.This section is effective for aids payable in 2006.
151.24 Sec. 7. COUNTY TARGETED CASE MANAGEMENT AID.
151.25 Subdivision 1. Distribution. For 2006 and 2007 only, county targeted case
151.26 management aid shall be allocated to counties based on each county's share of the state
151.27 total of children's social services and mental health services administered by the counties
151.28 under the jurisdiction of the Minnesota Department of Human Services. The aid payable
151.29 under this section must be used by counties to offset reductions in federal funding under
151.30 the Deficit Reduction Act of 2005 for targeted case management.
151.31 Subd. 2. Appropriation; payment. For aids payable in 2006, the total aid under
151.32 this section is limited to $40,000,000. For aids payable in 2007, the total aid under this
151.33 section is limited to $20,000,000. The commissioner of revenue shall make the payments
151.34 of the county targeted case management aid in two installments on July 20 and December
152.1 26 in 2006, and on March 31 and May 31 in 2007. An amount sufficient to pay the aid
152.2 under this section is appropriated to the commissioner of revenue from the general fund.
152.3 EFFECTIVE DATE.This section is effective for aids payable in 2006 and 2007.
152.4 Sec. 8. MAHNOMEN COUNTY; TEMPORARY COUNTY AND CITY AIDS.
152.5 $600,000 is appropriated from the general fund to the commissioner of revenue to be
152.6 used to make payments to Mahnomen County and the city of Mahnomen to compensate
152.7 them for the loss of property tax revenue due to the placement of land located in the
152.8 city of Mahnomen in trust status during calendar year 2006. The appropriation shall be
152.9 reduced by the amount of any payment in lieu of tax received by Mahnomen County
152.10 or the city of Mahnomen for the property placed in trust status. The payment shall be
152.11 made on July 20, 2006.
152.12 Sec. 9. COUNTY REFERENDUM COST REIMBURSEMENT;
152.13 APPROPRIATION.
152.14 If one or more bills are enacted during the 2006 session of the legislature that
152.15 provides for a referendum in 2006 on a proposed constitutional amendment, $122,000 is
152.16 appropriated from the general fund to the commissioner of revenue to be distributed to
152.17 the counties in proportion to each county's share of the state's registered voters. This is a
152.18 onetime payment, to be paid on July 20, 2006, to compensate the counties for the cost of
152.19 preparing ballots for the constitutional amendment or amendments.
152.20 Sec. 10. LOCAL TRUNK HIGHWAY IMPROVEMENTS; APPROPRIATION.
152.21 $5,000,000 is appropriated from the general fund to the commissioner of
152.22 transportation to be distributed, $2,500,000 to the City of Nisswa and $2,500,000 to the
152.23 City of Pequot Lakes, to be used to pay the local share of trunk highway improvement
152.24 projects. The advisory committee established under Minnesota Statutes, section 174.52,
152.25 shall provide recommendations to the cities on the most efficient use of the funds provided.
152.26 ARTICLE 12
152.27 MINERALS
152.28 Section 1. Minnesota Statutes 2004, section 298.001, is amended by adding a
152.29 subdivision to read:
152.30 Subd. 3a. Producer. "Producer" means a person engaged in the business of mining
152.31 or producing iron ore, taconite concentrate, or direct reduced ore in this state.
153.1 EFFECTIVE DATE.This section is effective for tax years beginning after
153.2 December 31, 2005.
153.3 Sec. 2. Minnesota Statutes 2005 Supplement, section 298.01, subdivision 3, is
153.4 amended to read:
153.5 Subd. 3. Occupation tax; other ores. Every person engaged in the business of
153.6 mining or producing ores in this state, except iron ore or taconite concentrates, shall pay
153.7 an occupation tax to the state of Minnesota as provided in this subdivision. The tax is
153.8 determined in the same manner as the tax imposed by section 290.02, except that sections
153.9 290.05, subdivision 1, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do
153.10 not apply, and the occupation tax must be computed by applying to taxable income the
153.11 rate of 2.45 percent. A person subject to occupation tax under this section shall apportion
153.12 its net income on the basis of the percentage obtained by taking the sum of:
153.13 (1) 75 percent of the percentage which the sales made within this state in connection
153.14 with the trade or business during the tax period are of the total sales wherever made in
153.15 connection with the trade or business during the tax period;
153.16 (2) 12.5 percent of the percentage which the total tangible property used by the
153.17 taxpayer in this state in connection with the trade or business during the tax period is of
153.18 the total tangible property, wherever located, used by the taxpayer in connection with the
153.19 trade or business during the tax period; and
153.20 (3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or
153.21 incurred in this state or paid in respect to labor performed in this state in connection with
153.22 the trade or business during the tax period are of the taxpayer's total payrolls paid or
153.23 incurred in connection with the trade or business during the tax period.
153.24 The tax is in addition to all other taxes.
153.25 EFFECTIVE DATE.This section is effective for tax years beginning after
153.26 December 31, 2005.
153.27 Sec. 3. Minnesota Statutes 2004, section 298.01, subdivision 3a, is amended to read:
153.28 Subd. 3a. Gross income. (a) For purposes of determining a person's taxable income
153.29 under subdivision 3, gross income is determined by the amount of gross proceeds from
153.30 mining in this state under section 298.016 and includes any gain or loss recognized from
153.31 the sale or disposition of assets used in the business in this state. If more than one mineral,
153.32 metal, or energy resource referred to in section 298.016 is mined and processed at the
153.33 same mine and plant, a gross income for each mineral, metal, or energy resource must be
154.1 determined separately. The gross incomes may be combined on one occupation tax return
154.2 to arrive at the gross income of all production.
154.3 (b) In applying section 290.191, subdivision 5, transfers of ores are deemed to be
154.4 sales outside in this state if the ores are transported out of this state after the ores have
154.5 been converted to a marketable quality.
154.6 EFFECTIVE DATE.This section is effective for tax years beginning after
154.7 December 31, 2005.
154.8 Sec. 4. Minnesota Statutes 2004, section 298.01, subdivision 3b, is amended to read:
154.9 Subd. 3b. Deductions. (a) For purposes of determining taxable income under
154.10 subdivision 3, the deductions from gross income include only those expenses necessary
154.11 to convert raw ores to marketable quality. Such expenses include costs associated with
154.12 refinement but do not include expenses such as transportation, stockpiling, marketing, or
154.13 marine insurance that are incurred after marketable ores are produced, unless the expenses
154.14 are included in gross income. The allowable deductions from a mine or plant that mines
154.15 and produces more than one mineral, metal, or energy resource must be determined
154.16 separately for the purposes of computing the deduction in section 290.01, subdivision 19c,
154.17 clause (9). These deductions may be combined on one occupation tax return to arrive at
154.18 the deduction from gross income for all production.
154.19 (b) The provisions of section 290.01, subdivisions 19c, clauses (6) and (9), and 19d,
154.20 clauses (7) and (11), are not used to determine taxable income.
154.21 EFFECTIVE DATE.This section is effective for tax years beginning after
154.22 December 31, 2005.
154.23 Sec. 5. Minnesota Statutes 2005 Supplement, section 298.01, subdivision 4, is
154.24 amended to read:
154.25 Subd. 4. Occupation tax; iron ore; taconite concentrates. A person engaged in
154.26 the business of mining or producing of iron ore, taconite concentrates or direct reduced ore
154.27 in this state shall pay an occupation tax to the state of Minnesota. The tax is determined
154.28 in the same manner as the tax imposed by section 290.02, except that sections 290.05,
154.29 subdivision 1, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not apply,
154.30 and the occupation tax shall be computed by applying to taxable income the rate of 2.45
154.31 percent. A person subject to occupation tax under this section shall apportion its net
154.32 income on the basis of the percentage obtained by taking the sum of:
155.1 (1) 75 percent of the percentage which the sales made within this state in connection
155.2 with the trade or business during the tax period are of the total sales wherever made in
155.3 connection with the trade or business during the tax period;
155.4 (2) 12.5 percent of the percentage which the total tangible property used by the
155.5 taxpayer in this state in connection with the trade or business during the tax period is of
155.6 the total tangible property, wherever located, used by the taxpayer in connection with the
155.7 trade or business during the tax period; and
155.8 (3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or
155.9 incurred in this state or paid in respect to labor performed in this state in connection with
155.10 the trade or business during the tax period are of the taxpayer's total payrolls paid or
155.11 incurred in connection with the trade or business during the tax period.
155.12 The tax is in addition to all other taxes.
155.13 EFFECTIVE DATE.This section is effective for tax years beginning after
155.14 December 31, 2005.
155.15 Sec. 6. Minnesota Statutes 2004, section 298.01, subdivision 4a, is amended to read:
155.16 Subd. 4a. Gross income. (a) For purposes of determining a person's taxable income
155.17 under subdivision 4, gross income is determined by the mine value of the ore mined in
155.18 Minnesota and includes any gain or loss recognized from the sale or disposition of assets
155.19 used in the business in this state.
155.20 (b) Mine value is the value, or selling price, of iron ore or taconite concentrates, f.o.b.
155.21 mine. The mine value is calculated by multiplying the iron unit price for the period, as
155.22 determined by the commissioner, by the tons produced and the weighted average analysis.
155.23 (c) In applying section 290.191, subdivision 5, transfers of iron ore and taconite
155.24 concentrates are deemed to be sales outside in this state if the iron ore or taconite
155.25 concentrates are transported out of this state after the raw iron ore and taconite
155.26 concentrates have been converted to a marketable quality.
155.27 (d) If iron ore or taconite and a mineral, metal, or energy resource referred to in
155.28 section 298.016 is mined and processed at the same mine and plant, a gross income for
155.29 each mineral, metal, or energy resource must be determined separately from the mine
155.30 value for the iron ore or taconite. The gross income may be combined on one occupation
155.31 tax return to arrive at the gross income from all production.
155.32 EFFECTIVE DATE.This section is effective for tax years beginning after
155.33 December 31, 2005.
156.1 Sec. 7. Minnesota Statutes 2004, section 298.01, subdivision 4b, is amended to read:
156.2 Subd. 4b. Deductions. For purposes of determining taxable income under
156.3 subdivision 4, the deductions from gross income include only those expenses necessary
156.4 to convert raw iron ore or taconite concentrates to marketable quality. Such expenses
156.5 include costs associated with beneficiation and refinement but do not include expenses
156.6 such as transportation, stockpiling, marketing, or marine insurance that are incurred after
156.7 marketable iron ore or taconite pellets are produced. The allowable deductions from a
156.8 mine or plant that mines and produces iron ore or taconite and one or more mineral or
156.9 metal referred to in section 298.016 must be determined separately for the purposes of
156.10 computing the deduction in section 290.01, subdivision 19c, clause (9). These deductions
156.11 may be combined on one occupation tax return to arrive at the deduction from gross
156.12 income for all production.
156.13 EFFECTIVE DATE.This section is effective for tax years beginning after
156.14 December 31, 2005.
156.15 Sec. 8. Minnesota Statutes 2004, section 298.01, is amended by adding a subdivision
156.16 to read:
156.17 Subd. 6. Deductions applicable to mining both taconite and other ores; ratio
156.18 applied. If a person is engaged in the business of mining or producing both iron ores,
156.19 taconite concentrates, or direct reduced ore, and other ores from the same mine or
156.20 facility, that person must separately determine the mine value of (1) the iron ore, taconite
156.21 concentrates, and direct reduced ore, and (2) the amount of gross proceeds from mining
156.22 other ores in Minnesota. The ratio of mine value from iron ore, taconite concentrates,
156.23 and direct reduced ore to gross proceeds from mining other ores must be applied to
156.24 deductions common to both processes to determine taxable income for tax paid pursuant
156.25 to subdivisions 3 and 4.
156.26 EFFECTIVE DATE.This section is effective for tax years beginning after
156.27 December 31, 2005.
156.28 Sec. 9. Minnesota Statutes 2004, section 298.17, is amended to read:
156.29 298.17 OCCUPATION TAXES TO BE APPORTIONED.
156.30 Subdivision 1. Apportionment under Constitution. All occupation taxes paid by
156.31 persons, copartnerships, companies, joint stock companies, corporations, and associations,
156.32 however or for whatever purpose organized, engaged in the business of mining or
156.33 producing iron ore or other ores, when collected shall be apportioned and distributed in
157.1 accordance with the Constitution of the state of Minnesota, article X, section 3, in the
157.2 manner following: 90 percent shall be deposited in the state treasury and credited to
157.3 the general fund of which four-ninths shall be used for the support of elementary and
157.4 secondary schools; and ten percent of the proceeds of the tax imposed by this section
157.5 shall be deposited in the state treasury and credited to the general fund for the general
157.6 support of the university.
157.7 Subd. 2. Apportionment to IRRRB. Of the moneys apportioned to the general
157.8 fund by this section, and not used for the support of elementary and secondary schools or
157.9 the university, there is annually appropriated and credited to the Iron Range Resources and
157.10 Rehabilitation Board account in the special revenue fund an amount equal to that which
157.11 would have been generated by a 1.5 cent tax imposed by section 298.24 on each taxable
157.12 ton produced in the preceding calendar year, to be expended for the purposes of section
157.13 298.22. The money appropriated pursuant to this section shall be used (1) to provide
157.14 environmental development grants to local governments located within any county in
157.15 region 3 as defined in governor's executive order number 60, issued on June 12, 1970,
157.16 which does not contain a municipality qualifying pursuant to section 273.134, paragraph
157.17 (b), or (2) to provide economic development loans or grants to businesses located within
157.18 any such county, provided that the county board or an advisory group appointed by
157.19 the county board to provide recommendations on economic development shall make
157.20 recommendations to the Iron Range Resources and Rehabilitation Board regarding the
157.21 loans. Payment to the Iron Range Resources and Rehabilitation Board account shall be
157.22 made by May 15 annually.
157.23 Of the money allocated to Koochiching County, one-third must be paid to the
157.24 Koochiching County Economic Development Commission.
157.25 Subd. 3. Apportionment to Minnesota minerals 21st century fund. The
157.26 money apportioned to the general fund by this section that is not used for the support of
157.27 elementary and secondary schools or the university, and that is not apportioned under
157.28 subdivision 2, is annually appropriated to the Minnesota minerals 21st century fund
157.29 created in section 116J.423.
157.30 EFFECTIVE DATE.This section is effective for taxes paid in 2007 and subsequent
157.31 years.
157.32 Sec. 10. Minnesota Statutes 2005 Supplement, section 298.223, subdivision 1, is
157.33 amended to read:
157.34 Subdivision 1. Creation; purposes. A fund called the taconite environmental
157.35 protection fund is created for the purpose of reclaiming, restoring and enhancing those
158.1 areas of northeast Minnesota located within the taconite assistance area defined in section
158.2 273.1341, that are adversely affected by the environmentally damaging operations
158.3 involved in mining taconite and iron ore and producing iron ore concentrate and for the
158.4 purpose of promoting the economic development of northeast Minnesota. The taconite
158.5 environmental protection fund shall be used for the following purposes:
158.6 (a) to initiate investigations into matters the Iron Range Resources and Rehabilitation
158.7 Board determines are in need of study and which will determine the environmental
158.8 problems requiring remedial action;
158.9 (b) reclamation, restoration, or reforestation of minelands not otherwise provided
158.10 for by state law;
158.11 (c) local economic development projects but only if those projects are approved by
158.12 the board, and public works, including construction of sewer and water systems located
158.13 within the taconite assistance area defined in section 273.1341;
158.14 (d) monitoring of mineral industry related health problems among mining
158.15 employees; and
158.16 (e) local renewable energy investments undertaken in cooperation with local units of
158.17 government and mineland areas reforestation, reclamation, or development projects. The
158.18 projects must be approved by the Iron Range Resources and Rehabilitation Board and
158.19 located within the taconite assistance area as defined in section 273.1341. The board may
158.20 enter into joint ventures with private or public entities to advance these project.
158.21 EFFECTIVE DATE.This section is effective the day following final enactment.
158.22 Sec. 11. Minnesota Statutes 2004, section 298.28, is amended by adding a subdivision
158.23 to read:
158.24 Subd. 10a. Post-2005 increases. (a) This subdivision applies to determine
158.25 distribution of the proceeds of the tax that are attributable to increasing the rate of tax by
158.26 the percentage increase in the implicit price deflator under section 298.24, subdivision 1,
158.27 paragraph (b). It applies only to increases applicable for production year 2006 and later.
158.28 Its provisions supercede the provisions of subdivision 10 for those increases.
158.29 (b) The proceeds are allocated as follows:
158.30 (1) .10 cent per taxable ton to the Range Association of Municipalities and Schools;
158.31 (2) an amount equal to two cents per taxable ton is allocated to the city or town in the
158.32 county in which the land from which the taconite was mined or quarried or within which
158.33 the concentrate was produced. If the mining, quarrying, and concentration, or different
158.34 steps in either thereof are carried on in more than one taxing district, the commissioner
158.35 shall apportion equitably the proceeds of the part of the tax going to cities and towns
159.1 among the subdivisions by attributing 50 percent of the proceeds of the tax to the operation
159.2 of mining or quarrying the taconite, and the remainder to the concentrating plant and to the
159.3 processes of concentration, and with respect to each thereof giving due consideration to the
159.4 relative extent of such operations performed in each taxing district. The commissioner's
159.5 apportionment order is subject to review by the Tax Court upon petition by any of the
159.6 interested taxing districts, in the same manner as other orders of the commissioner; and
159.7 (3) the remainder of the revenue is allocated to the taconite environmental protection
159.8 fund for projects under section 298.223, subdivision 1, clause (e).
159.9 EFFECTIVE DATE.This section is effective the day following final enactment.
159.10 Sec. 12. Minnesota Statutes 2005 Supplement, section 298.2961, subdivision 4,
159.11 is amended to read:
159.12 Subd. 4. Grant and loan fund. (a) A fund is established to receive distributions
159.13 under section 298.28, subdivision 9b, and to make grants or loans as provided in this
159.14 subdivision. Any grant or loan made under this subdivision must be approved by
159.15 a majority of the members of the Iron Range Resources and Rehabilitation Board,
159.16 established under section 298.22.
159.17 (b) Distributions received in calendar year 2005 are allocated to the city of Virginia
159.18 for improvements and repairs to the city's steam heating system.
159.19 (c) Distributions received in calendar year 2006 are allocated to a project of the
159.20 public utilities commissions of the cities of Hibbing and Virginia to convert their electrical
159.21 generating plants to the use of biomass products, such as wood.
159.22 (d) Distributions received in calendar year 2007 must be paid to the city of Tower to
159.23 be used for the East Two Rivers project in or near the city of Tower.
159.24 (e) For distributions received in 2008 and later, amounts may be allocated to joint
159.25 ventures with mining companies for reclamation of lands containing abandoned or worked
159.26 out mines to convert these lands to marketable properties for residential, recreational,
159.27 commercial, or other valuable uses the first $2,000,000 must be paid to St. Louis County
159.28 for deposit in its county road and bridge fund to be used for relocation of St. Louis County
159.29 Road 715, commonly referred to as Pike River Road, and the remainder is allocated for
159.30 projects under section 298.223, subdivision 1, clause (e).
159.31 Sec. 13. Minnesota Statutes 2004, section 298.2961, is amended by adding a
159.32 subdivision to read:
159.33 Subd. 5. Public works and local economic development fund. For distributions in
159.34 2007 only, a special fund is established to receive 38.4 cents per ton that otherwise would
160.1 be allocated under section 298.28, subdivision 6. The following amounts are allocated
160.2 for the specific purposes:
160.3 (1) 13.4 cents per ton for the Central Iron Range Sanitary Sewer District for
160.4 construction of a combined wastewater facility;
160.5 (2) six cents per ton to the city of Eveleth to redesign and design and construct
160.6 improvements to renovate its water treatment facility;
160.7 (3) one cent per ton for the East Range Joint Powers Board to acquire land for and to
160.8 design a central wastewater collection and treatment system;
160.9 (4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road;
160.10 (5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South;
160.11 (6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road;
160.12 (7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and
160.13 Indiana Avenues and for repayment of the Delta Dental loan to the Minnesota Department
160.14 of Employment and Economic Development;
160.15 (8) 0.4 cents per ton to the city of Keewatin for a new city well;
160.16 (9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous
160.17 materials center;
160.18 (10) 0.9 cents per ton to Aitkin County Growth for an economic development
160.19 project for peat harvesting;
160.20 (11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan;
160.21 (12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive
160.22 plan;
160.23 (13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure;
160.24 (14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake
160.25 Environmental Learning Center;
160.26 (15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center;
160.27 (16) 0.5 cents per ton to the Economic Development Authority of the city of Grand
160.28 Rapids for planning for the North Central Research and Technology Laboratory;
160.29 (17) 0.6 cents per ton to the city of Bovey for sewer and water extension;
160.30 (18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and
160.31 (19) ten cents per ton to an economic development authority in a city through which
160.32 State Highway 1 passes, or a city in Independent School District No. 2142 that has an
160.33 active mine, for an economic development project approved by the Iron Range Resources
160.34 and Rehabilitation Board.
160.35 EFFECTIVE DATE.This section is effective the day following final enactment.
161.1 Sec. 14. Minnesota Statutes 2004, section 298.75, is amended by adding a subdivision
161.2 to read:
161.3 Subd. 10. Tax may be imposed; Sylvan Township. (a) If Cass County does not
161.4 impose a tax under this section and approves imposition of the tax under this subdivision,
161.5 the town of Sylvan in Cass County may impose the aggregate materials tax under this
161.6 section.
161.7 (b) For purposes of exercising the powers contained in this section, the "town" is
161.8 deemed to be the "county."
161.9 (c) All provisions in this section apply to the town of Sylvan, except that, in lieu
161.10 of the distribution of the tax proceeds under subdivision 7, all proceeds of the tax must
161.11 be retained by the town.
161.12 (d) If Cass County imposes an aggregate materials tax under this section, the tax
161.13 imposed by the town of Sylvan under this subdivision is repealed on the effective date
161.14 of the Cass County tax.
161.15 EFFECTIVE DATE.This section is effective the day after the governing body of
161.16 the town of Sylvan and its chief clerical officer comply with section 645.021, subdivisions
161.17 2 and 3.
161.18 Sec. 15. TRANSITION PROVISIONS.
161.19 Each person with an alternative minimum tax credit on December 31, 2005, pursuant
161.20 to Minnesota Statutes 2004, section 298.01, may take that credit against occupation tax
161.21 under Minnesota Statutes 2004, section 298.01, subdivisions 3d and 4e.
161.22 EFFECTIVE DATE.This section is effective the day following final enactment.
161.23 Sec. 16. REPEALER.
161.24 Minnesota Statutes 2004, section 298.01, subdivisions 3c, 3d, 4d, and 4e, are
161.25 repealed effective for tax years beginning after December 31, 2005.
161.26 ARTICLE 13
161.27 MISCELLANEOUS
161.28 Section 1. Minnesota Statutes 2004, section 270A.03, subdivision 2, is amended to
161.29 read:
161.30 Subd. 2. Claimant agency. "Claimant agency" means any state agency, as
161.31 defined by section 14.02, subdivision 2, the regents of the University of Minnesota, any
161.32 district court of the state, any county, any statutory or home rule charter city presenting
162.1 a claim for a municipal hospital or a public library or a municipal ambulance service, a
162.2 hospital district, a private nonprofit hospital that leases its building from the county in
162.3 which it is located, any public agency responsible for child support enforcement, any
162.4 public agency responsible for the collection of court-ordered restitution, and any public
162.5 agency established by general or special law that is responsible for the administration of
162.6 a low-income housing program, and the Minnesota collection enterprise as defined in
162.7 section 16D.02, subdivision 8, for the purpose of collecting the costs imposed under
162.8 section 16D.11. A county may act as a claimant agency on behalf of an ambulance service
162.9 licensed under chapter 144E if the ambulance service's primary service area is located at
162.10 least in part within the county, but more than one county may not act as a claimant agency
162.11 for a licensed ambulance service with respect to the same debt.
162.12 Sec. 2. [270C.415] INCOME TAX RETURN PROCESSING; AGREEMENT
162.13 WITH INTERNAL REVENUE SERVICE.
162.14 The commissioner of revenue shall enter into an agreement with the United States
162.15 Internal Revenue Service to participate in a tax processing program whereby the Internal
162.16 Revenue Service processes electronically filed state returns together with the federal
162.17 returns. If possible, the ability of taxpayers to file property tax refund claims under chapter
162.18 290A with state income tax returns must be preserved.
162.19 Sec. 3. Minnesota Statutes 2005 Supplement, section 272.02, subdivision 83, is
162.20 amended to read:
162.21 Subd. 83. International economic development zone property. (a) Improvements
162.22 to real property, and personal property, classified under section 273.13, subdivision
162.23 24, and located within the international economic development zone designated under
162.24 section 469.322, are exempt from ad valorem taxes levied under chapter 275, if the
162.25 improvements are:
162.26 (1) part of a regional distribution center as defined in section 469.321; or
162.27 (2) occupied by a qualified business as defined in section 469.321, that uses the
162.28 improvements primarily in freight forwarding operations.
162.29 (b) The exemption applies beginning for the first assessment year after designation of
162.30 the international economic development zone. The exemption applies to each assessment
162.31 year that begins during the duration of the international economic development zone. To
162.32 be exempt under paragraph (a), clause (2), the property must be occupied by July 1 of the
162.33 assessment year by a qualified business that has signed the business subsidy agreement
162.34 by July 1 of the assessment year.
163.1 EFFECTIVE DATE.This section is effective the day following final enactment.
163.2 Sec. 4. Minnesota Statutes 2004, section 289A.09, subdivision 2, is amended to read:
163.3 Subd. 2. Withholding statement to employee or payee and to commissioner. (a)
163.4 A person required to deduct and withhold from an employee a tax under section 290.92,
163.5 subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to
163.6 deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required
163.7 to withhold tax under section 290.923, subdivision 2, determined without regard to
163.8 section 290.92, subdivision 19, if the employee or payee had claimed no more than one
163.9 withholding exemption, or who paid wages or made payments not subject to withholding
163.10 under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or
163.11 person receiving royalty payments in excess of $600, or who has entered into a voluntary
163.12 withholding agreement with a payee under section 290.92, subdivision 20, must give
163.13 every employee or person receiving royalty payments in respect to the remuneration paid
163.14 by the person to the employee or person receiving royalty payments during the calendar
163.15 year, on or before January 31 of the succeeding year, or, if employment is terminated
163.16 before the close of the calendar year, within 30 days after the date of receipt of a written
163.17 request from the employee if the 30-day period ends before January 31, a written statement
163.18 showing the following:
163.19 (1) name of the person;
163.20 (2) the name of the employee or payee and the employee's or payee's Social
163.21 Security account number;
163.22 (3) the total amount of wages as that term is defined in section 290.92, subdivision
163.23 1, paragraph (1); the total amount of remuneration subject to withholding under section
163.24 290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the
163.25 Internal Revenue Code; and the amount of royalties subject to withholding under section
163.26 290.923, subdivision 2; and
163.27 (4) the total amount deducted and withheld as tax under section 290.92, subdivision
163.28 2a or 3, or 290.923, subdivision 2.
163.29 (b) The statement required to be furnished by this paragraph with respect to any
163.30 remuneration must be furnished at those times, must contain the information required, and
163.31 must be in the form the commissioner prescribes.
163.32 (c) The commissioner may prescribe rules providing for reasonable extensions of
163.33 time, not in excess of 30 days, to employers or payers required to give the statements to
163.34 their employees or payees under this subdivision.
164.1 (d) A duplicate of any statement made under this subdivision and in accordance
164.2 with rules prescribed by the commissioner, along with a reconciliation in the form the
164.3 commissioner prescribes of the statements for the calendar year, including a reconciliation
164.4 of the quarterly returns required to be filed under subdivision 1, must be filed with the
164.5 commissioner on or before February 28 of the year after the payments were made.
164.6 (e) If an employer cancels the employer's Minnesota withholding account number
164.7 required by section 290.92, subdivision 24, the information required by paragraph (d),
164.8 must be filed with the commissioner within 30 days of the end of the quarter in which
164.9 the employer cancels its account number.
164.10 (f) The employer must submit the statements required to be sent to the commissioner
164.11 on magnetic media, if the magnetic media was required to satisfy the federal reporting
164.12 requirements of section 6011(e) of the Internal Revenue Code and the regulations issued
164.13 under it by electronic means.
164.14 (g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph
164.15 (a), clause (2), must submit the returns required by this subdivision and subdivision 1,
164.16 paragraph (a), with the commissioner by electronic means.
164.17 EFFECTIVE DATE.This section is effective for returns due after June 30, 2006.
164.18 Sec. 5. Minnesota Statutes 2005 Supplement, section 290.0922, subdivision 2, is
164.19 amended to read:
164.20 Subd. 2. Exemptions. The following entities are exempt from the tax imposed
164.21 by this section:
164.22 (1) corporations exempt from tax under section 290.05;
164.23 (2) real estate investment trusts;
164.24 (3) regulated investment companies or a fund thereof; and
164.25 (4) entities having a valid election in effect under section 860D(b) of the Internal
164.26 Revenue Code;
164.27 (5) town and farmers' mutual insurance companies;
164.28 (6) cooperatives organized under chapter 308A or 308B that provide housing
164.29 exclusively to persons age 55 and over and are classified as homesteads under section
164.30 273.124, subdivision 3;
164.31 (7) an entity, if for the taxable year all of its property is located in a job opportunity
164.32 building zone designated under section 469.314 and all of its payroll is a job opportunity
164.33 building zone payroll under section 469.310; and
164.34 (8) an entity, if for the taxable year all of its property is located in an international
164.35 economic development zone designated under section 469.322, and all of its payroll is
165.1 international economic development zone payroll under section 469.321. The exemption
165.2 under this clause applies to taxable years beginning during the duration of the international
165.3 economic development zone.
165.4 Entities not specifically exempted by this subdivision are subject to tax under this
165.5 section, notwithstanding section 290.05.
165.6 EFFECTIVE DATE.This section is effective the day following final enactment.
165.7 Sec. 6. Minnesota Statutes 2005 Supplement, section 290.0922, subdivision 3, is
165.8 amended to read:
165.9 Subd. 3. Definitions. (a) "Minnesota sales or receipts" means the total sales
165.10 apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts
165.11 attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the
165.12 total sales or receipts apportioned or attributed to Minnesota pursuant to any other
165.13 apportionment formula applicable to the taxpayer.
165.14 (b) "Minnesota property" means total Minnesota tangible property as provided in
165.15 section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota,
165.16 but does not include: (1) property located in a job opportunity building zone designated
165.17 under section 469.314, or (2) property of a qualified business located in a biotechnology
165.18 and health sciences industry zone designated under section 469.334, or (3) for taxable
165.19 years beginning during the duration of the zone, property of a qualified business located
165.20 in the international economic development zone designated under section 469.322.
165.21 Intangible property shall not be included in Minnesota property for purposes of this
165.22 section. Taxpayers who do not utilize tangible property to apportion income shall
165.23 nevertheless include Minnesota property for purposes of this section. On a return for
165.24 a short taxable year, the amount of Minnesota property owned, as determined under
165.25 section 290.191, shall be included in Minnesota property based on a fraction in which the
165.26 numerator is the number of days in the short taxable year and the denominator is 365.
165.27 (c) "Minnesota payrolls" means total Minnesota payrolls as provided in section
165.28 290.191, subdivision 12, but does not include: (1) job opportunity building zone payrolls
165.29 under section 469.310, subdivision 8, or (2) biotechnology and health sciences industry
165.30 zone payrolls under section 469.330, subdivision 8, or (3) for taxable years beginning
165.31 during the duration of the zone, international economic development zone payrolls under
165.32 section 469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income
165.33 shall nevertheless include Minnesota payrolls for purposes of this section.
165.34 EFFECTIVE DATE.This section is effective the day following final enactment.
166.1 Sec. 7. Minnesota Statutes 2004, section 295.53, subdivision 4a, is amended to read:
166.2 Subd. 4a. Credit for research. (a) In addition to the exemptions allowed under
166.3 subdivision 1, a hospital or health care provider may claim an annual credit against the
166.4 total amount of tax, if any, the hospital or health care provider owes for that calendar
166.5 year under sections 295.50 to 295.57. The credit shall equal 2.5 five percent of revenues
166.6 for patient services used to fund expenditures for qualifying research conducted by an
166.7 allowable research program. The amount of the credit shall not exceed the tax liability of
166.8 the hospital or health care provider under sections 295.50 to 295.57.
166.9 (b) For purposes of this subdivision, the following requirements apply:
166.10 (1) expenditures must be for program costs of qualifying research conducted by
166.11 an allowable research program;
166.12 (2) an allowable research program must be a formal program of medical and
166.13 health care research conducted by an entity which is exempt under section 501(c)(3)
166.14 of the Internal Revenue Code of 1986 or is owned and operated under authority of a
166.15 governmental unit;
166.16 (3) qualifying research must:
166.17 (A) be approved in writing by the governing body of the hospital or health care
166.18 provider which is taking the deduction under this subdivision;
166.19 (B) have as its purpose the development of new knowledge in basic or applied
166.20 science relating to the diagnosis and treatment of conditions affecting the human body;
166.21 (C) be subject to review by individuals with expertise in the subject matter of the
166.22 proposed study but who have no financial interest in the proposed study and are not
166.23 involved in the conduct of the proposed study; and
166.24 (D) be subject to review and supervision by an institutional review board operating
166.25 in conformity with federal regulations if the research involves human subjects or
166.26 an institutional animal care and use committee operating in conformity with federal
166.27 regulations if the research involves animal subjects. Research expenses are not exempt if
166.28 the study is a routine evaluation of health care methods or products used in a particular
166.29 setting conducted for the purpose of making a management decision. Costs of clinical
166.30 research activities paid directly for the benefit of an individual patient are excluded from
166.31 this exemption. Basic research in fields including biochemistry, molecular biology, and
166.32 physiology are also included if such programs are subject to a peer review process.
166.33 (c) No credit shall be allowed under this subdivision for any revenue received by the
166.34 hospital or health care provider in the form of a grant, gift, or otherwise, whether from a
166.35 government or nongovernment source, on which the tax liability under section 295.52 is
166.36 not imposed.
167.1 (d) The taxpayer shall apply for the credit under this section on the annual return
167.2 under section 295.55, subdivision 5.
167.3 (e) Beginning September 1, 2001, if the actual or estimated amount paid under this
167.4 section for the calendar year exceeds $2,500,000 $7,000,000, the commissioner of finance
167.5 shall determine the rate of the research credit for the following calendar year to the nearest
167.6 one-half percent so that refunds paid under this section will most closely equal $2,500,000
167.7 $7,000,000. The commissioner of finance shall publish in the State Register by October 1
167.8 of each year the rate of the credit for the following calendar year. A determination under
167.9 this section is not subject to the rulemaking provisions of chapter 14.
167.10 EFFECTIVE DATE.This section is effective for taxable years beginning after
167.11 December 31, 2006.
167.12 Sec. 8. Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 41, is
167.13 amended to read:
167.14 Subd. 41. International economic development zones. (a) Purchases of tangible
167.15 personal property or taxable services by a qualified business, as defined in section 469.321,
167.16 are exempt if the property or services are primarily used or consumed in the international
167.17 economic development zone designated under section 469.322. This exemption applies
167.18 only if the purchase is made and delivery received after the business signed the business
167.19 subsidy agreement required under chapter 469.
167.20 (b) Purchase and use of construction materials, supplies, and equipment incorporated
167.21 into the construction of improvements to real property in the international economic
167.22 development zone are exempt if the improvements after completion of construction are
167.23 to be used as a regional distribution center as defined in section 469.321 or otherwise
167.24 used in the conduct of freight forwarding activities of a qualified business as defined in
167.25 section 469.321. This exemption applies regardless of whether the purchases are made
167.26 by the business or a contractor.
167.27 (c) The exemptions under this subdivision apply to a local sales and use tax,
167.28 regardless of whether the local tax is imposed on sales taxable under this chapter or in
167.29 another law, ordinance, or charter provision.
167.30 (d) The exemption in paragraph (a) applies exemptions in this section apply to sales
167.31 during the duration of the zone and after June 30, 2007, if the purchase was made and
167.32 delivery received after the business signs the business subsidy agreement required under
167.33 chapter 469 and purchases made after the date of final zone designation under section
167.34 469.322, paragraph (c), and before the expiration of the zone under section 469.322,
167.35 paragraph (d).
168.1 (e) For purchases made for improvements to real property to be occupied by a
168.2 business that has not signed a business subsidy agreement at the time of the purchase, the
168.3 tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
168.4 applied, and then refunded in the manner provided in section 297A.75 beginning in fiscal
168.5 year 2008. The taxpayer must attach to the claim for refund information sufficient for
168.6 the commissioner to be able to determine that the improvements are being occupied by
168.7 a business that has signed a business subsidy agreement.
168.8 EFFECTIVE DATE.This section is effective the day following final enactment.
168.9 Sec. 9. [469.193] FOREIGN TRADE ZONES.
168.10 A city, county, town, or other political subdivision may apply to the board defined in
168.11 United States Code, title 19, section 81a, for the right to use the powers provided in United
168.12 States Code, title 19, sections 81a to 81u. If the right is granted, the city, county, town, or
168.13 other political subdivision may use the powers within or outside of a port district. Any
168.14 city, county, town, or other political subdivision may apply jointly with any other city,
168.15 county, town, or other political subdivision.
168.16 EFFECTIVE DATE.This section is effective the day following final enactment.
168.17 Sec. 10. Minnesota Statutes 2005 Supplement, section 469.322, is amended to read:
168.18 469.322 DESIGNATION OF INTERNATIONAL ECONOMIC
168.19 DEVELOPMENT ZONE.
168.20 (a) An area designated as a foreign trade zone may be designated by the foreign
168.21 trade zone authority as an international economic development zone if within the zone
168.22 a regional distribution center is being developed pursuant to section 469.323. The zone
168.23 must consist of contiguous area of not less than 500 acres and not more than 1,000 acres.
168.24 The designation authority under this section is limited to one zone.
168.25 (b) In making the designation, the foreign trade zone authority, in consultation with
168.26 the Minnesota Department of Transportation and the Metropolitan Council, shall consider
168.27 access to major transportation routes, consistency with current state transportation and
168.28 air cargo planning, adequacy of the size of the site, access to airport facilities, present
168.29 and future capacity at the designated airport, the capability to meet integrated present
168.30 and future air cargo, security, and inspection services, and access to other infrastructure
168.31 and financial incentives. The border of the international economic development zone
168.32 must be no more than 60 miles distant or 90 minutes drive time from the border of the
168.33 Minneapolis-St. Paul International Airport.
169.1 (c) Before final designation of the zone, the foreign trade zone authority, in
169.2 consultation with the applicant, must conduct a transportation impact study based on the
169.3 regional model and utilizing traffic forecasting and assignments. The results must be used
169.4 to evaluate the effects of the proposed use on the transportation system and identify any
169.5 needed improvements. If the site is in the metropolitan area the study must also evaluate
169.6 the effect of the transportation impacts on the Metropolitan Transportation System plan
169.7 as well as the comprehensive plans of the municipalities that would be affected. The
169.8 authority shall provide copies of the study to the legislature under section 3.195 and to the
169.9 chairs of the committees with jurisdiction over transportation and economic development.
169.10 The applicant must pay the cost of the study.
169.11 (c) (d) Final zone designation must be made by June 30, 2006 2008.
169.12 (d) (e) Duration of the zone is a 12-year period beginning on January 1, 2007 2010.
169.13 EFFECTIVE DATE.This section is effective the day following final enactment.
169.14 Sec. 11. Minnesota Statutes 2005 Supplement, section 469.323, subdivision 2, is
169.15 amended to read:
169.16 Subd. 2. Business plan. Before designation of an international economic
169.17 development zone under section 469.322, the governing body of the foreign trade zone
169.18 authority shall prepare a business plan. The findings of the business plan shall be
169.19 presented to the legislature pursuant to section 3.195. Copies of the business plan shall be
169.20 provided to the chairs of committees with jurisdiction over transportation and economic
169.21 development. The plan must include an analysis of the economic feasibility of the regional
169.22 distribution center once it becomes operational and of the operations of freight forwarders
169.23 and other businesses that choose to locate within the boundaries of the zone. The analysis
169.24 must provide profitability models that:
169.25 (1) include the benefits of the incentives;
169.26 (2) estimate the amount of time needed to achieve profitability; and
169.27 (3) analyze the length of time incentives will be necessary to the economic viability
169.28 of the regional distribution center.
169.29 If the governing body of the foreign trade authority determines that the models do
169.30 not establish the economic feasibility of the project, the regional distribution center does
169.31 not meet the development requirements of this section and section 469.322.
169.32 Sec. 12. Minnesota Statutes 2005 Supplement, section 469.327, is amended to read:
169.33 469.327 JOBS CREDIT.
170.1 Subdivision 1. Credit allowed. (a) A qualified business is allowed a credit against
170.2 the taxes imposed under chapter 290. The credit equals seven percent of the:
170.3 (1) lesser of:
170.4 (i) zone payroll for the taxable year, less the zone payroll for the base year; or
170.5 (ii) total Minnesota payroll for the taxable year, less total Minnesota payroll for
170.6 the base year; minus
170.7 (2) $30,000 multiplied by the number of full-time equivalent employees that the
170.8 qualified business employs in the international economic development zone for the taxable
170.9 year, minus the number of full-time equivalent employees the business employed in the
170.10 zone in the base year, but not less than zero.
170.11 (b) This section applies only to tax years beginning during the duration of the
170.12 international economic development zone.
170.13 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
170.14 the meanings given.
170.15 (b) "Base year" means the taxable year beginning during the calendar year
170.16 immediately preceding the calendar year in which the zone designation was made duration
170.17 of the zone begins under section 469.322, paragraph (d).
170.18 (c) "Full-time equivalent employees" means the equivalent of annualized expected
170.19 hours of work equal to 2,080 hours.
170.20 (d) "Minnesota payroll" means the wages or salaries attributed to Minnesota under
170.21 section 290.191, subdivision 12, for the qualified business or the unitary business of which
170.22 the qualified business is a part, whichever is greater.
170.23 (e) "Zone payroll" means wages or salaries used to determine the zone payroll
170.24 factor for the qualified business, less the amount of compensation attributable to any
170.25 employee that exceeds $70,000.
170.26 Subd. 3. Inflation adjustment. For taxable years beginning after December 31,
170.27 2006 2010, the dollar amounts in subdivisions 1, clause (2); and 2, paragraph (e), are
170.28 annually adjusted for inflation. The commissioner of revenue shall adjust the amounts by
170.29 the percentage determined under section 290.06, subdivision 2d, for the taxable year.
170.30 Subd. 4. Refundable. If the amount of the credit exceeds the liability for tax under
170.31 chapter 290, the commissioner of revenue shall refund the excess to the qualified business.
170.32 Subd. 5. Appropriation. An amount sufficient to pay the refunds authorized by this
170.33 section is appropriated to the commissioner of revenue from the general fund.
170.34 EFFECTIVE DATE.This section is effective the day following final enactment.
171.1 Sec. 13. Laws 2005, First Special Session chapter 3, article 10, section 23, is amended
171.2 to read:
171.3 Sec. 23. GRANTS TO QUALIFYING BUSINESSES.
171.4
171.5 $750,000 is appropriated in fiscal year 2006 from the general fund to the
171.6 commissioner of employment and economic development to be distributed to the foreign
171.7 trade zone authority to provide grants to qualified businesses as determined by the
171.8 authority, subject to Minnesota Statutes, sections 116J.993 to 116J.995, to provide
171.9 incentives for the businesses to locate their operations in an international economic
171.10 development zone. If the money is not distributed during fiscal year 2006, it remains
171.11 available for distribution under this section during fiscal year 2007 until December 31,
171.12 2010.
171.13 Sec. 14. PROPERTY TAX REFUND COLLECTION ACTION PROHIBITED;
171.14 REFUNDS REQUIRED.
171.15 Notwithstanding Minnesota Statutes, section 289A.60, subdivision 12, or any other
171.16 law to the contrary, the commissioner of revenue shall not disallow any part of a claim
171.17 for a property tax refund filed in 2005 or an earlier year to the extent that the claim
171.18 was excessive because it did not include in the claimant's income as determined under
171.19 Minnesota Statutes, section 290A.03, subdivision 3, the cash value of a tuition discount
171.20 provided by a postsecondary education institution. If a claimant was required to repay
171.21 any part of a property tax refund based on inclusion of this discount in the claimant's
171.22 income on a claim filed in 2005 or an earlier year, the commissioner must refund that
171.23 amount to the claimant.
171.24 EFFECTIVE DATE.This section is effective the day following final enactment.
171.25 Sec. 15. JOINT STUDY BY COMMISSIONERS OF REVENUE AND
171.26 DEPARTMENT OF EMPLOYEE RELATIONS.
171.27 In order to increase compliance with income and franchise taxes and tax laws, the
171.28 commissioners of the Departments of Revenue and Employee Relations, in consultation
171.29 with the affected bargaining units, shall study the competitiveness of compensation of
171.30 tax compliance auditors within the Department of Revenue. The study shall consider
171.31 the performance of compliance auditors, including training, experience, employment
171.32 classification, and duties. The study shall be completed by October 15, 2006, and the
171.33 commissioner of employee relations shall implement its recommendations.
172.1 EFFECTIVE DATE.This section is effective the day following final enactment.
172.2 Sec. 16. SALES AND USE TAX; SERVICES TO TAXPAYERS WITH LIMITED
172.3 ENGLISH PROFICIENCY.
172.4 The commissioner of revenue shall study and implement procedures and services
172.5 that will assist sales and use taxpayers of limited English proficiency in complying with
172.6 sales and use tax laws. The benefits of translating sales and use tax fact sheets, forms,
172.7 and instructions into Spanish and other languages must be considered. In addition, the
172.8 commissioner shall study how to direct taxpayers of limited English proficiency who
172.9 contact the Department of Revenue by telephone to assistance in Spanish and other
172.10 languages as determined by the commissioner. The commissioner shall report on the
172.11 results of the study and a plan to implement them to the senate and house of representatives
172.12 committees with jurisdiction over tax laws by February 1, 2007.
172.13 EFFECTIVE DATE.This section is effective the day following final enactment.
172.14 Sec. 17. TRANSFER OF MONEY.
172.15 Any money in the tax relief account under Minnesota Statutes, section 16A.1522,
172.16 subdivision 4, on the day following final enactment of this act is transferred to the general
172.17 fund.
172.18 Sec. 18. APPROPRIATION.
172.19 $2,000,000 is appropriated from the general fund to the commissioner of public
172.20 safety to be used to reimburse state and local law enforcement agencies for additional law
172.21 enforcement efforts, focused on downtown Minneapolis.
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