1.1.................... moves to amend H.F. No. 2323 as follows:
1.2Delete everything after the enacting clause and insert:


1.6    Section 1. Minnesota Statutes 2008, section 289A.02, subdivision 7, as amended by
1.7Laws 2009, chapter 12, article 1, section 1, is amended to read:
1.8    Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal
1.9Revenue Code" means the Internal Revenue Code of 1986, as amended through December
1.1031, 2008 March 31, 2009.
1.11EFFECTIVE DATE.This section is effective the day following final enactment.

1.12    Sec. 2. Minnesota Statutes 2008, section 289A.31, subdivision 5, is amended to read:
1.13    Subd. 5. Withholding tax, withholding from payments to out-of-state
1.14contractors, and withholding by partnerships and small business corporations. (a)
1.15Except as provided in paragraph (b), an employer or person withholding tax under section
1.16290.92 or 290.923, subdivision 2, who fails to pay to or deposit with the commissioner a
1.17sum or sums required by those sections to be deducted, withheld, and paid, is personally
1.18and individually liable to the state for the sum or sums, and added penalties and interest,
1.19and is not liable to another person for that payment or payments. The sum or sums
1.20deducted and withheld under section 290.92, subdivision 2a or 3, or 290.923, subdivision
1.212 , must be held as a special fund in trust for the state of Minnesota.
1.22(b) If the employer or person withholding tax under section 290.92 or 290.923,
1.23subdivision 2 , fails to deduct and withhold the tax in violation of those sections, and later
1.24the taxes against which the tax may be credited are paid, the tax required to be deducted
1.25and withheld will not be collected from the employer. This does not, however, relieve
2.1the employer from liability for any penalties and interest otherwise applicable for failure
2.2to deduct and withhold.
2.3(c) Liability for payment of withholding taxes includes a responsible person or entity
2.4described in the personal liability provisions of section 270C.56.
2.5(d) Liability for payment of withholding taxes includes a third party lender or surety
2.6described in section 270C.59.
2.7(e) A partnership or S corporation required to withhold and remit tax under section
2.8290.92, subdivisions 4b and 4c , is liable for payment of the tax to the commissioner, and a
2.9person having control of or responsibility for the withholding of the tax or the filing of
2.10returns due in connection with the tax is personally liable for the tax due.
2.11(f) A payor of sums required to be withheld under section 290.9705, subdivision
2.121 , is liable to the state for the amount required to be deducted, and is not liable to an
2.13out-of-state contractor for the amount of the payment.
2.14(g) If an employer fails to withhold tax from the wages of an employee when
2.15required to do so under section 290.92, subdivision 2a, by reason of treating the employee
2.16as not being an employee, then the liability for tax is equal to three percent of the wages
2.17paid to the employee. The liability for tax of an employee is not affected by the assessment
2.18or collection of tax under this paragraph. The employer is not entitled to recover from the
2.19employee any tax determined under this paragraph.
2.20EFFECTIVE DATE.This section is effective for taxes required to be withheld
2.21after June 30, 2009.

2.22    Sec. 3. Minnesota Statutes 2008, section 290.01, subdivision 5, is amended to read:
2.23    Subd. 5. Domestic corporation. The term "domestic" when applied to a corporation
2.24means a corporation:
2.25    (1) created or organized in the United States, or under the laws of the United States
2.26or of any state, the District of Columbia, or any political subdivision of any of the
2.27foregoing but not including the Commonwealth of Puerto Rico, or any possession of
2.28the United States;
2.29    (2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
2.30Code; or
2.31    (3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.;
2.32    (4) which is incorporated in a tax haven;
2.33    (5) which is engaged in activity in a tax haven sufficient for the tax haven to impose
2.34a net income tax under United States constitutional standards and section 290.015; or
3.1    (6) which has the average of its property, payroll, and sales factors, as defined under
3.2section 290.191, within the 50 states of the United States and the District of Columbia of
3.320 percent or more.
3.4EFFECTIVE DATE.This section is effective for taxable years beginning after
3.5December 31, 2008.

3.6    Sec. 4. Minnesota Statutes 2008, section 290.01, is amended by adding a subdivision
3.7to read:
3.8    Subd. 5c. Tax haven. (a) "Tax haven" means a foreign jurisdiction designated
3.9under this subdivision.
3.10(b) The commissioner may designate a foreign jurisdiction as a tax haven by
3.11administrative rule if the jurisdiction:
3.12(1) has no or nominal effective tax on the relevant income; and
3.13(2)(i) has laws or practices that prevent effective exchange of information for tax
3.14purposes with other governments on taxpayers benefiting from the tax regime;
3.15(ii) has a tax regime that lacks transparency. A tax regime lacks transparency if the
3.16details of legislative, legal, or administrative provisions are not open and apparent or are
3.17not consistently applied among similarly situated taxpayers, or if the information needed
3.18by tax authorities to determine a taxpayer's correct tax liability, such as accounting records
3.19and underlying documentation, is not adequately available;
3.20(iii) facilitates the establishment of foreign-owned entities without the need for a
3.21local substantive presence or prohibits these entities from having any commercial impact
3.22on the local economy;
3.23(iv) explicitly or implicitly excludes the jurisdiction's resident taxpayers from taking
3.24advantage of the tax regime's benefits or prohibits enterprises that benefit from the regime
3.25from operating in the jurisdiction's domestic markets; or
3.26(v) has created a tax regime that is favorable for tax avoidance, based upon an
3.27overall assessment of relevant factors, including whether the jurisdiction has a significant
3.28untaxed offshore financial or other services sector relative to its overall economy.
3.29(c) The following foreign jurisdictions are deemed to be tax havens, unless the
3.30commissioner, by revenue notice, revokes the listing of a jurisdiction:
3.31(1) Anguilla;
3.32(2) Antigua and Barbuda;
3.33(3) Aruba;
3.34(4) Bahamas;
3.35(5) Barbados;
4.1(6) Belize;
4.2(7) Bermuda;
4.3(8) British Virgin Islands;
4.4(9) Cayman Islands;
4.5(10) Cook Islands;
4.6(11) Dominica;
4.7(12) Gibraltar;
4.8(13) Grenada;
4.9(14) Guernsey-Sark-Alderney;
4.10(15) Isle of Man;
4.11(16) Jersey;
4.12(17) Latvia;
4.13(18) Liechtenstein;
4.14(19) Luxembourg;
4.15(20) Nauru;
4.16(21) Netherlands Antilles;
4.17(22) Panama;
4.18(23) Samoa;
4.19(24) St. Kitts and Nevis;
4.20(25) St. Lucia;
4.21(26) St. Vincent and Grenadines;
4.22(27) Turks and Caicos; and
4.23(28) Vanuatu.
4.24(d) The commissioner shall revoke a foreign jurisdiction's listing under paragraph
4.25(b) or (c), as applicable, if the United States enters into a tax treaty or other agreement
4.26with the foreign jurisdiction that provides for prompt, obligatory, and automatic exchange
4.27of information with the United States government relevant to enforcing the provisions of
4.28federal tax laws and the treaty or other agreement was in effect for the taxable year.
4.29EFFECTIVE DATE.This section is effective for taxable years beginning after
4.30December 31, 2008.

4.31    Sec. 5. Minnesota Statutes 2008, section 290.01, subdivision 19, as amended by Laws
4.322009, chapter 12, article 1, section 2, is amended to read:
4.33    Subd. 19. Net income. The term "net income" means the federal taxable income,
4.34as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
4.35date named in this subdivision, incorporating the federal effective dates of changes to the
5.1Internal Revenue Code and any elections made by the taxpayer in accordance with the
5.2Internal Revenue Code in determining federal taxable income for federal income tax
5.3purposes, and with the modifications provided in subdivisions 19a to 19f.
5.4    In the case of a regulated investment company or a fund thereof, as defined in section
5.5851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
5.6company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
5.7except that:
5.8    (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
5.9Revenue Code does not apply;
5.10    (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
5.11Revenue Code must be applied by allowing a deduction for capital gain dividends and
5.12exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
5.13Revenue Code; and
5.14    (3) the deduction for dividends paid must also be applied in the amount of any
5.15undistributed capital gains which the regulated investment company elects to have treated
5.16as provided in section 852(b)(3)(D) of the Internal Revenue Code.
5.17    The net income of a real estate investment trust as defined and limited by section
5.18856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
5.19taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
5.20    The net income of a designated settlement fund as defined in section 468B(d) of
5.21the Internal Revenue Code means the gross income as defined in section 468B(b) of the
5.22Internal Revenue Code.
5.23    The Internal Revenue Code of 1986, as amended through December 31, 2008 March
5.2431, 2009, shall be in effect for taxable years beginning after December 31, 1996.
5.25    Except as otherwise provided, references to the Internal Revenue Code in
5.26subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
5.27the applicable year.
5.28EFFECTIVE DATE.This section is effective for taxable years beginning after
5.29December 31, 2008. In enacting this section and other provisions of this article, the
5.30legislature intends net income to include and tax to apply to interest paid on any Build
5.31America Bond, as defined under section 54AA of the Internal Revenue Code of 1986,
5.32notwithstanding the provisions of section 1531 of Division B, Title I of the American
5.33Recovery and Reinvestment Act of 2009, Public Law 111-5.

5.34    Sec. 6. Minnesota Statutes 2008, section 290.01, subdivision 19a, as amended by Laws
5.352009, chapter 12, article 1, section 3, is amended to read:
6.1    Subd. 19a. Additions to federal taxable income. For individuals, estates, and
6.2trusts, there shall be added to federal taxable income:
6.3    (1)(i) interest income on obligations of any state other than Minnesota or a political or
6.4governmental subdivision, municipality, or governmental agency or instrumentality of any
6.5state other than Minnesota exempt from federal income taxes under the Internal Revenue
6.6Code or any other federal statute, but excluding interest on qualified obligations; and
6.7    (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
6.8Code, except the portion of the exempt-interest dividends derived from interest income
6.9on obligations of the state of Minnesota or its political or governmental subdivisions,
6.10municipalities, governmental agencies or instrumentalities, but only if the portion of the
6.11exempt-interest dividends from such Minnesota sources paid to all shareholders represents
6.1295 percent or more of the exempt-interest dividends that are paid by the regulated
6.13investment company as defined in section 851(a) of the Internal Revenue Code, or the
6.14fund of the regulated investment company as defined in section 851(g) of the Internal
6.15Revenue Code, making the payment and only to the extent the interest is paid on qualified
6.16obligations; and
6.17    (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
6.18government described in section 7871(c) of the Internal Revenue Code shall be treated as
6.19interest income on obligations of the state in which the tribe is located;
6.20    (2)(i) the amount of income or, sales and use, motor vehicle sales, or excise taxes
6.21paid or accrued within the taxable year under this chapter and the amount of taxes based
6.22on net income paid or, sales and use, motor vehicle sales, or excise taxes paid to any other
6.23state or to any province or territory of Canada,;
6.24(ii) the amount of real and personal property taxes paid or accrued within the taxable
6.25year;
6.26(iii) qualified residence interest, as defined in section 163(h) of the Internal Revenue
6.27Code, to the extent allowed as a deduction under section 63(d) of the Internal Revenue
6.28Code; and
6.29(iv) charitable contributions, as defined in section 170(c) of the Internal Revenue
6.30Code, to the extent allowed as a deduction under section 170(a) of the Internal Revenue
6.31Code,
6.32to the extent allowed as a deduction deductions under section 63(d) of the Internal Revenue
6.33Code, but the addition; but the sum of the additions made under items (i), (ii), (iii), and
6.34(iv) may not be more than the amount by which the itemized deductions as allowed under
6.35section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction
6.36as defined in section 63(c) of the Internal Revenue Code, disregarding the amount amounts
7.1allowed under section sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code.
7.2For the purpose of this paragraph, the disallowance of itemized deductions under section
7.368 of the Internal Revenue Code of 1986, income or sales and use tax is, motor vehicle
7.4sales or excise tax, real and personal property taxes, qualified residence interest, and
7.5charitable contributions are the last itemized deduction deductions disallowed;
7.6    (3) the capital gain amount of a lump-sum distribution to which the special tax under
7.7section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
7.8    (4) the amount of income taxes paid or accrued within the taxable year under this
7.9chapter and taxes based on net income paid to any other state or any province or territory
7.10of Canada, to the extent allowed as a deduction in determining federal adjusted gross
7.11income. For the purpose of this paragraph, income taxes do not include the taxes imposed
7.12by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
7.13    (5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
7.14other than expenses or interest used in computing net interest income for the subtraction
7.15allowed under subdivision 19b, clause (1);
7.16    (6) the amount of a partner's pro rata share of net income which does not flow
7.17through to the partner because the partnership elected to pay the tax on the income under
7.18section 6242(a)(2) of the Internal Revenue Code;
7.19    (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
7.20Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
7.21in the taxable year generates a deduction for depreciation under section 168(k) and the
7.22activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
7.23the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
7.24limited to excess of the depreciation claimed by the activity under section 168(k) over the
7.25amount of the loss from the activity that is not allowed in the taxable year. In succeeding
7.26taxable years when the losses not allowed in the taxable year are allowed, the depreciation
7.27under section 168(k) is allowed;
7.28    (8) for taxable years beginning before January 1, 2009, 80 percent of the amount by
7.29which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
7.30deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
7.31through December 31, 2003;
7.32    (9) to the extent deducted in computing federal taxable income, the amount of the
7.33deduction allowable under section 199 of the Internal Revenue Code;
7.34    (10) the exclusion allowed under section 139A of the Internal Revenue Code for
7.35federal subsidies for prescription drug plans;
7.36(11) the amount of expenses disallowed under section 290.10, subdivision 2;
8.1    (12) the amount deducted for qualified tuition and related expenses under section
8.2222 of the Internal Revenue Code, to the extent deducted from gross income;
8.3    (13) the amount deducted for certain expenses of elementary and secondary school
8.4teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
8.5from gross income; and
8.6(14) the additional standard deduction for property taxes payable that is allowable
8.7under section 63(c)(1)(C) of the Internal Revenue Code.; and
8.8(15) the additional deduction for qualified motor vehicle sales tax allowable under
8.9section 63(c)(1)(E) of the Internal Revenue Code;
8.10(16) discharge of indebtedness income resulting from reacquisition of business
8.11indebtedness and deferred under section 108(i) of the Internal Revenue Code; and
8.12(17) the amount of unemployment compensation exempt from tax under section
8.1385(c) of the Internal Revenue Code.
8.14EFFECTIVE DATE.This section is effective for taxable years beginning after
8.15December 31, 2008, except that clause (16) is effective for taxable years ending after
8.16December 31, 2008.

8.17    Sec. 7. Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to read:
8.18    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
8.19and trusts, there shall be subtracted from federal taxable income:
8.20    (1) net interest income on obligations of any authority, commission, or
8.21instrumentality of the United States to the extent includable in taxable income for federal
8.22income tax purposes but exempt from state income tax under the laws of the United States;
8.23    (2) if included in federal taxable income, the amount of any overpayment of income
8.24tax to Minnesota or to any other state, for any previous taxable year, whether the amount
8.25is received as a refund or as a credit to another taxable year's income tax liability;
8.26    (3) the amount paid to others, less the amount used to claim the credit allowed under
8.27section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
8.28to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
8.29transportation of each qualifying child in attending an elementary or secondary school
8.30situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
8.31resident of this state may legally fulfill the state's compulsory attendance laws, which
8.32is not operated for profit, and which adheres to the provisions of the Civil Rights Act
8.33of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
8.34tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
8.35"textbooks" includes books and other instructional materials and equipment purchased
9.1or leased for use in elementary and secondary schools in teaching only those subjects
9.2legally and commonly taught in public elementary and secondary schools in this state.
9.3Equipment expenses qualifying for deduction includes expenses as defined and limited in
9.4section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
9.5books and materials used in the teaching of religious tenets, doctrines, or worship, the
9.6purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
9.7or materials for, or transportation to, extracurricular activities including sporting events,
9.8musical or dramatic events, speech activities, driver's education, or similar programs. For
9.9purposes of the subtraction provided by this clause, "qualifying child" has the meaning
9.10given in section 32(c)(3) of the Internal Revenue Code;
9.11    (4) income as provided under section 290.0802;
9.12    (5) to the extent included in federal adjusted gross income, income realized on
9.13disposition of property exempt from tax under section 290.491;
9.14    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
9.15of the Internal Revenue Code in determining federal taxable income by an individual
9.16who does not itemize deductions for federal income tax purposes for the taxable year, an
9.17amount equal to 50 percent of the excess of charitable contributions over $500 allowable
9.18as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
9.19under the provisions of Public Law 109-1;
9.20    (7) for taxable years beginning before January 1, 2008, the amount of the federal
9.21small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
9.22which is included in gross income under section 87 of the Internal Revenue Code;
9.23    (8) for individuals who are allowed a federal foreign tax credit for taxes that do not
9.24qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
9.25of subnational foreign taxes for the taxable year, but not to exceed the total subnational
9.26foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
9.27"federal foreign tax credit" means the credit allowed under section 27 of the Internal
9.28Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
9.29under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
9.30the extent they exceed the federal foreign tax credit;
9.31    (9) (3) in each of the five tax years immediately following the tax year in which an
9.32addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
9.33of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
9.34of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
9.35the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
9.36subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
10.1positive value of any net operating loss under section 172 of the Internal Revenue Code
10.2generated for the tax year of the addition. The resulting delayed depreciation cannot be
10.3less than zero;
10.4    (10) job opportunity building zone income as provided under section 469.316;
10.5    (11) (4) to the extent included in federal taxable income, the amount of compensation
10.6paid to members of the Minnesota National Guard or other reserve components of the
10.7United States military for active service performed in Minnesota, excluding compensation
10.8for services performed under the Active Guard Reserve (AGR) program. For purposes of
10.9this clause, "active service" means (i) state active service as defined in section 190.05,
10.10subdivision 5a , clause (1); (ii) federally funded state active service as defined in section
10.11190.05, subdivision 5b ; or (iii) federal active service as defined in section 190.05,
10.12subdivision 5c , but "active service" excludes service performed in accordance with section
10.13190.08, subdivision 3 ;
10.14    (12) (5) to the extent included in federal taxable income, the amount of compensation
10.15paid to Minnesota residents who are members of the armed forces of the United States or
10.16United Nations for active duty performed outside Minnesota under United States Code,
10.17title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of
10.18the United Nations;
10.19    (13) an amount, not to exceed $10,000, equal to qualified expenses related to a
10.20qualified donor's donation, while living, of one or more of the qualified donor's organs
10.21to another person for human organ transplantation. For purposes of this clause, "organ"
10.22means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
10.23"human organ transplantation" means the medical procedure by which transfer of a human
10.24organ is made from the body of one person to the body of another person; "qualified
10.25expenses" means unreimbursed expenses for both the individual and the qualified donor
10.26for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
10.27may be subtracted under this clause only once; and "qualified donor" means the individual
10.28or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
10.29individual may claim the subtraction in this clause for each instance of organ donation for
10.30transplantation during the taxable year in which the qualified expenses occur;
10.31    (14) (6) in each of the five tax years immediately following the tax year in which an
10.32addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
10.33shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
10.34addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
10.35case of a shareholder of a corporation that is an S corporation, minus the positive value of
10.36any net operating loss under section 172 of the Internal Revenue Code generated for the
11.1tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
11.2subtraction is not allowed under this clause;
11.3    (15) (7) to the extent included in federal taxable income, compensation paid to a
11.4service member as defined in United States Code, title 10, section 101(a)(5), for military
11.5service as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section
11.6101(2); and
11.7    (16) international economic development zone income as provided under section
11.8469.325; and
11.9    (17) to the extent included in federal taxable income, the amount of national service
11.10educational awards received from the National Service Trust under United States Code,
11.11title 42, sections 12601 to 12604, for service in an approved Americorps National Service
11.12program.
11.13(8) to the extent included in federal taxable income, discharge of indebtedness
11.14income from reacquisition of business indebtedness included in federal taxable income
11.15under section 108(i) of the Internal Revenue Code. This subtraction applies only to the
11.16extent that the income was included in net income in a prior year as a result of the addition
11.17under subdivision 19a, clause (16).
11.18EFFECTIVE DATE.This section is effective for taxable years beginning after
11.19December 31, 2008, except that clause (8) is effective for taxable years ending after
11.20December 31, 2008.

11.21    Sec. 8. Minnesota Statutes 2008, section 290.01, subdivision 19c, as amended by Laws
11.222009, chapter 12, article 1, section 4, is amended to read:
11.23    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
11.24there shall be added to federal taxable income:
11.25    (1) the amount of any deduction taken for federal income tax purposes for income,
11.26excise, or franchise taxes based on net income or related minimum taxes, including but not
11.27limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
11.28another state, a political subdivision of another state, the District of Columbia, or any
11.29foreign country or possession of the United States;
11.30    (2) interest not subject to federal tax upon obligations of: the United States, its
11.31possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
11.32state, any of its political or governmental subdivisions, any of its municipalities, or any
11.33of its governmental agencies or instrumentalities; the District of Columbia; or Indian
11.34tribal governments;
12.1    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
12.2Revenue Code;
12.3    (4) the amount of any net operating loss deduction taken for federal income tax
12.4purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
12.5deduction under section 810 of the Internal Revenue Code;
12.6    (5) the amount of any special deductions taken for federal income tax purposes
12.7under sections 241 to 247 and 965 of the Internal Revenue Code;
12.8    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
12.9clause (a), that are not subject to Minnesota income tax;
12.10    (7) the amount of any capital losses deducted for federal income tax purposes under
12.11sections 1211 and 1212 of the Internal Revenue Code;
12.12    (8) the exempt foreign trade income of a foreign sales corporation under sections
12.13921(a) and 291 of the Internal Revenue Code;
12.14    (9) the amount of percentage depletion deducted under sections 611 through 614 and
12.15291 of the Internal Revenue Code;
12.16    (10) for certified pollution control facilities placed in service in a taxable year
12.17beginning before December 31, 1986, and for which amortization deductions were elected
12.18under section 169 of the Internal Revenue Code of 1954, as amended through December
12.1931, 1985, the amount of the amortization deduction allowed in computing federal taxable
12.20income for those facilities;
12.21    (11) for taxable years beginning before January 1, 2009, the amount of any deemed
12.22dividend from a foreign operating corporation determined pursuant to section 290.17,
12.23subdivision 4 , paragraph (g). The deemed dividend shall be reduced by the amount of the
12.24addition to income required by clauses (20), (21), (22), and (23);
12.25    (12) the amount of a partner's pro rata share of net income which does not flow
12.26through to the partner because the partnership elected to pay the tax on the income under
12.27section 6242(a)(2) of the Internal Revenue Code;
12.28    (13) the amount of net income excluded under section 114 of the Internal Revenue
12.29Code;
12.30    (14) any increase in subpart F income, as defined in section 952(a) of the Internal
12.31Revenue Code, for the taxable year when subpart F income is calculated without regard to
12.32the provisions of Division C, title III, section 304(a)(1)-(2) 303(b) of Public Law 110-343;
12.33    (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
12.34and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
12.35has an activity that in the taxable year generates a deduction for depreciation under
12.36section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
13.1that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
13.2under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
13.3depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
13.4amount of the loss from the activity that is not allowed in the taxable year. In succeeding
13.5taxable years when the losses not allowed in the taxable year are allowed, the depreciation
13.6under section 168(k)(1)(A) and (k)(4)(A) is allowed;
13.7    (16) for taxable years beginning before January 1, 2009, 80 percent of the amount by
13.8which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
13.9deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
13.10through December 31, 2003;
13.11    (17) to the extent deducted in computing federal taxable income, the amount of the
13.12deduction allowable under section 199 of the Internal Revenue Code;
13.13    (18) the exclusion allowed under section 139A of the Internal Revenue Code for
13.14federal subsidies for prescription drug plans;
13.15    (19) the amount of expenses disallowed under section 290.10, subdivision 2;
13.16    (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
13.17accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
13.18of a corporation that is a member of the taxpayer's unitary business group that qualifies
13.19as a foreign operating corporation. For purposes of this clause, intangible expenses and
13.20costs include:
13.21    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
13.22use, maintenance or management, ownership, sale, exchange, or any other disposition of
13.23intangible property;
13.24    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
13.25transactions;
13.26    (iii) royalty, patent, technical, and copyright fees;
13.27    (iv) licensing fees; and
13.28    (v) other similar expenses and costs.
13.29For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
13.30applications, trade names, trademarks, service marks, copyrights, mask works, trade
13.31secrets, and similar types of intangible assets.
13.32This clause does not apply to any item of interest or intangible expenses or costs paid,
13.33accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
13.34to such item of income to the extent that the income to the foreign operating corporation
13.35is income from sources without the United States as defined in subtitle A, chapter 1,
13.36subchapter N, part 1, of the Internal Revenue Code;
14.1    (21) except as already included in the taxpayer's taxable income pursuant to clause
14.2(20), any interest income and income generated from intangible property received or
14.3accrued by a foreign operating corporation that is a member of the taxpayer's unitary
14.4group. For purposes of this clause, income generated from intangible property includes:
14.5    (i) income related to the direct or indirect acquisition, use, maintenance or
14.6management, ownership, sale, exchange, or any other disposition of intangible property;
14.7    (ii) income from factoring transactions or discounting transactions;
14.8    (iii) royalty, patent, technical, and copyright fees;
14.9    (iv) licensing fees; and
14.10    (v) other similar income.
14.11For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
14.12applications, trade names, trademarks, service marks, copyrights, mask works, trade
14.13secrets, and similar types of intangible assets.
14.14This clause does not apply to any item of interest or intangible income received or accrued
14.15by a foreign operating corporation with respect to such item of income to the extent that
14.16the income is income from sources without the United States as defined in subtitle A,
14.17chapter 1, subchapter N, part 1, of the Internal Revenue Code;
14.18    (22) the dividends attributable to the income of a foreign operating corporation that
14.19is a member of the taxpayer's unitary group in an amount that is equal to the dividends
14.20paid deduction of a real estate investment trust under section 561(a) of the Internal
14.21Revenue Code for amounts paid or accrued by the real estate investment trust to the
14.22foreign operating corporation;
14.23    (23) the income of a foreign operating corporation that is a member of the taxpayer's
14.24unitary group in an amount that is equal to gains derived from the sale of real or personal
14.25property located in the United States; and
14.26    (24) the additional amount allowed as a deduction for donation of computer
14.27technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
14.28extent deducted from taxable income.; and
14.29(25) discharge of indebtedness income resulting from reacquisition of business
14.30indebtedness and deferred under section 108(i) of the Internal Revenue Code.
14.31EFFECTIVE DATE.This section is effective for taxable years beginning after
14.32December 31, 2008, except that clause (25) is effective for taxable years ending after
14.33December 31, 2008.

14.34    Sec. 9. Minnesota Statutes 2008, section 290.01, subdivision 19d, as amended by Laws
14.352009, chapter 12, article 1, section 5, is amended to read:
15.1    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
15.2corporations, there shall be subtracted from federal taxable income after the increases
15.3provided in subdivision 19c:
15.4    (1) the amount of foreign dividend gross-up added to gross income for federal
15.5income tax purposes under section 78 of the Internal Revenue Code;
15.6    (2) the amount of salary expense not allowed for federal income tax purposes due to
15.7claiming the work opportunity credit under section 51 of the Internal Revenue Code;
15.8    (3) any dividend (not including any distribution in liquidation) paid within the
15.9taxable year by a national or state bank to the United States, or to any instrumentality of
15.10the United States exempt from federal income taxes, on the preferred stock of the bank
15.11owned by the United States or the instrumentality;
15.12    (4) amounts disallowed for intangible drilling costs due to differences between
15.13this chapter and the Internal Revenue Code in taxable years beginning before January
15.141, 1987, as follows:
15.15    (i) to the extent the disallowed costs are represented by physical property, an amount
15.16equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
15.17subdivision 7 , subject to the modifications contained in subdivision 19e; and
15.18    (ii) to the extent the disallowed costs are not represented by physical property, an
15.19amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
15.20290.09, subdivision 8 ;
15.21    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
15.22Internal Revenue Code, except that:
15.23    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
15.24capital loss carrybacks shall not be allowed;
15.25    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
15.26a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
15.27allowed;
15.28    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
15.29capital loss carryback to each of the three taxable years preceding the loss year, subject to
15.30the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
15.31    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
15.32a capital loss carryover to each of the five taxable years succeeding the loss year to the
15.33extent such loss was not used in a prior taxable year and subject to the provisions of
15.34Minnesota Statutes 1986, section 290.16, shall be allowed;
15.35    (6) an amount for interest and expenses relating to income not taxable for federal
15.36income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
16.1expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
16.2291 of the Internal Revenue Code in computing federal taxable income;
16.3    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
16.4which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
16.5reasonable allowance for depletion based on actual cost. In the case of leases the deduction
16.6must be apportioned between the lessor and lessee in accordance with rules prescribed
16.7by the commissioner. In the case of property held in trust, the allowable deduction must
16.8be apportioned between the income beneficiaries and the trustee in accordance with the
16.9pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
16.10of the trust's income allocable to each;
16.11    (8) for certified pollution control facilities placed in service in a taxable year
16.12beginning before December 31, 1986, and for which amortization deductions were elected
16.13under section 169 of the Internal Revenue Code of 1954, as amended through December
16.1431, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
16.151986, section 290.09, subdivision 7;
16.16    (9) amounts included in federal taxable income that are due to refunds of income,
16.17excise, or franchise taxes based on net income or related minimum taxes paid by the
16.18corporation to Minnesota, another state, a political subdivision of another state, the
16.19District of Columbia, or a foreign country or possession of the United States to the extent
16.20that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
16.21clause (1), in a prior taxable year;
16.22    (10) 80 percent of royalties, fees, or other like income accrued or received from a
16.23foreign operating corporation or a foreign corporation which is part of the same unitary
16.24business as the receiving corporation, unless the income resulting from such payments or
16.25accruals is income from sources within the United States as defined in subtitle A, chapter
16.261, subchapter N, part 1, of the Internal Revenue Code;
16.27    (11) (10) income or gains from the business of mining as defined in section 290.05,
16.28subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
16.29    (12) (11) the amount of disability access expenditures in the taxable year which are
16.30not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue
16.31Code;
16.32    (13) (12) the amount of qualified research expenses not allowed for federal income
16.33tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
16.34that the amount exceeds the amount of the credit allowed under section 290.068;
17.1    (14) (13) the amount of salary expenses not allowed for federal income tax purposes
17.2due to claiming the Indian employment credit under section 45A(a) of the Internal
17.3Revenue Code;
17.4    (15) (14) for taxable years beginning before January 1, 2008, the amount of the
17.5federal small ethanol producer credit allowed under section 40(a)(3) of the Internal
17.6Revenue Code which is included in gross income under section 87 of the Internal Revenue
17.7Code;
17.8    (16) (15) for a corporation whose foreign sales corporation, as defined in section
17.9922 of the Internal Revenue Code, constituted a foreign operating corporation during any
17.10taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
17.11claiming the deduction under section 290.21, subdivision 4, for income received from
17.12the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
17.13income excluded under section 114 of the Internal Revenue Code, provided the income is
17.14not income of a foreign operating company;
17.15    (17) (16) any decrease in subpart F income, as defined in section 952(a) of the
17.16Internal Revenue Code, for the taxable year when subpart F income is calculated without
17.17regard to the provisions of Division C, title III, section 304(a)(1)-(2) 303(b) of Public
17.18Law 110-343;
17.19    (18) (17) in each of the five tax years immediately following the tax year in which
17.20an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth
17.21of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
17.22the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
17.23resulting delayed depreciation cannot be less than zero; and
17.24    (19) (18) in each of the five tax years immediately following the tax year in which an
17.25addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
17.26the amount of the addition.; and
17.27(19) to the extent included in federal taxable income, discharge of indebtedness
17.28income from reacquisition of business indebtedness included in federal taxable income
17.29under section 108(i) of the Internal Revenue Code. This subtraction applies only to the
17.30extent that the income was included in net income in a prior year as a result of the addition
17.31under subdivision 19c, clause (25).
17.32EFFECTIVE DATE.This section is effective for taxable years beginning after
17.33December 31, 2008, except that clause (19) is effective for taxable years ending after
17.34December 31, 2008.

17.35    Sec. 10. Minnesota Statutes 2008, section 290.01, subdivision 29, is amended to read:
18.1    Subd. 29. Taxable income. The term "taxable income" means:
18.2(1) for individuals, estates, and trusts, the same as taxable net income;
18.3(2) for corporations, the taxable net income less
18.4(i) the net operating loss deduction under section 290.095; and
18.5(ii) the dividends received deduction under section 290.21, subdivision 4; plus
18.6(iii) the exemption for operating in a job opportunity building zone under section
18.7469.317; Minnesota development subsidies.
18.8(iv) the exemption for operating in a biotechnology and health sciences industry
18.9zone under section 469.337; and
18.10(v) the exemption for operating in an international economic development zone
18.11under section 469.326.
18.12EFFECTIVE DATE.This section is effective for taxable years beginning after
18.13December 31, 2009.

18.14    Sec. 11. Minnesota Statutes 2008, section 290.01, subdivision 31, as amended by Laws
18.152009, chapter 12, article 1, section 7, is amended to read:
18.16    Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal
18.17Revenue Code" means the Internal Revenue Code of 1986, as amended through December
18.1831, 2008 March 31, 2009. Internal Revenue Code also includes any uncodified provision
18.19in federal law that relates to provisions of the Internal Revenue Code that are incorporated
18.20into Minnesota law.
18.21EFFECTIVE DATE.This section is effective the day following final enactment,
18.22except the changes incorporated by federal changes are effective at the same time as the
18.23changes were effective for federal purposes.

18.24    Sec. 12. Minnesota Statutes 2008, section 290.01, is amended by adding a subdivision
18.25to read:
18.26    Subd. 33. Minnesota development subsidies. (a) "Minnesota development
18.27subsidies" means the greater of the following amounts:
18.28    (1) one-half of the amount deducted by the taxpayer in computing federal taxable
18.29income for the taxable year, as property taxes, business expenses, or otherwise, that is
18.30attributable to property taxes paid by the taxpayer, either directly or indirectly through a
18.31lease or otherwise, on property located in a tax increment financing district, as defined in
18.32section 469.174, or that receives an abatement under sections 469.1813 to 469.1815, if the
18.33owner of the property or a related party has entered a development or similar agreement
18.34with respect to the increment district or derives a benefit from the abatement by its
19.1property having access to or use of public improvements financed with the abatement or
19.2otherwise; or
19.3    (2) the amount of payments received by the taxpayer under a development or similar
19.4agreement that provides for payments or reimbursements from the proceeds of increments
19.5from a tax increment financing district or from an abatement under sections 469.1813 to
19.6469.1815, but excluding reimbursements under a development action response plan, as
19.7defined in section 469.174, subdivision 17, to pay for its costs incurred to fund removal
19.8or remedial actions.
19.9    (b) For purposes of this subdivision, "tax increment financing district" excludes:
19.10    (1) a housing district, as defined in section 469.174, subdivision 11;
19.11    (2) a soils condition district, as defined in section 469.174, subdivision 19; and
19.12    (3) a hazardous substance subdistrict, as defined in section 469.174, subdivision 23.
19.13EFFECTIVE DATE.This section is effective for taxable years beginning after
19.14December 31, 2009.

19.15    Sec. 13. Minnesota Statutes 2008, section 290.01, is amended by adding a subdivision
19.16to read:
19.17    Subd. 34. Qualified obligations. (a) "Qualified obligations" means:
19.18(1) obligations of the state of Minnesota or a political or governmental subdivision,
19.19municipality, or governmental agency or instrumentality of the state of Minnesota if the
19.20obligations were sold before July 1, 2009; or
19.21(2) general obligations of the state of Minnesota sold after June 30, 2009, if the
19.22commissioner of finance certifies prior to offering and selling the obligations, based on an
19.23estimate prepared by the state economist, that (i) the present value of the reduction in state
19.24borrowing costs due to issuing the obligations exempt from taxation under sections 290.06
19.25and 290.091 exceeds (ii) the present value of the revenues the state would collect if the
19.26obligations were issued subject to taxation under sections 290.06 and 290.091.
19.27(b) If the commissioner of finance elects to issue qualified obligations under
19.28paragraph (a), clause (2), the commissioner must provide a written report to the chairs
19.29of the committees of the senate and the house of representatives with jurisdiction over
19.30taxes and capital investment on the decision to issue qualified obligations, including the
19.31estimate of the net savings in borrowing costs from the use of qualified obligations and
19.32a detailed description of how the estimate was prepared. This report must be provided
19.33within 15 days after the bonds are sold.
19.34EFFECTIVE DATE.This section is effective for taxable years beginning after
19.35December 31, 2008.

20.1    Sec. 14. Minnesota Statutes 2008, section 290.014, subdivision 2, is amended to read:
20.2    Subd. 2. Nonresident individuals. Except as provided in section 290.015, a
20.3nonresident individual is subject to the return filing requirements and to tax as provided in
20.4this chapter to the extent that the income of the nonresident individual is:
20.5(1) allocable to this state under section 290.17, 290.191, or 290.20;
20.6(2) taxed to the individual under the Internal Revenue Code (or not taxed under the
20.7Internal Revenue Code by reason of its character but of a character which is taxable under
20.8this chapter) in the individual's capacity as a beneficiary of an estate with income allocable
20.9to this state under section 290.17, 290.191, or 290.20 and the income, taking into account
20.10the income character provisions of section 662(b) of the Internal Revenue Code, would be
20.11allocable to this state under section 290.17, 290.191, or 290.20 if realized by the individual
20.12directly from the source from which realized by the estate;
20.13(3) taxed to the individual under the Internal Revenue Code (or not taxed under the
20.14Internal Revenue Code by reason of its character but of a character that is taxable under
20.15this chapter) in the individual's capacity as a beneficiary or grantor or other person treated
20.16as a substantial owner of a trust with income allocable to this state under section 290.17,
20.17290.191 , or 290.20 and the income, taking into account the income character provisions of
20.18section 652(b), 662(b), or 664(b) of the Internal Revenue Code, would be allocable to this
20.19state under section 290.17, 290.191, or 290.20 if realized by the individual directly from
20.20the source from which realized by the trust;
20.21(4) taxed to the individual under the Internal Revenue Code (or not taxed under the
20.22Internal Revenue Code by reason of its character but of a character which is taxable under
20.23this chapter) in the individual's capacity as a limited or general partner in a partnership
20.24with income allocable to this state under section 290.17, 290.191, or 290.20 and the
20.25income, taking into account the income character provisions of section 702(b) of the
20.26Internal Revenue Code, would be allocable to this state under section 290.17, 290.191,
20.27or 290.20 if realized by the individual directly from the source from which realized by
20.28the partnership; or
20.29(5) taxed to the individual under the Internal Revenue Code (or not taxed under the
20.30Internal Revenue Code by reason of its character but of a character which is taxable under
20.31this chapter) in the individual's capacity as a shareholder of a corporation treated as an
20.32"S" corporation under section 290.9725, and income allocable to this state under section
20.33290.17 , 290.191, or 290.20 and the income, taking into account the income character
20.34provisions of section 1366(b) of the Internal Revenue Code, would be allocable to this
20.35state under section 290.17, 290.191, or 290.20 if realized by the individual directly from
20.36the source from which realized by the corporation.; or
21.1(6) taxed to the individual under the Internal Revenue Code (or not taxed under the
21.2Internal Revenue Code by reason of its character but of a character which is taxable under
21.3this chapter) in the individual's capacity as the sole member of a limited liability company
21.4that is disregarded for federal income tax purposes, with income allocable to this state
21.5under section 290.17, 290.191, or 290.20, as though realized by the individual directly
21.6from the source from which it was realized by the limited liability company.
21.7EFFECTIVE DATE.This section is effective the day following final enactment.

21.8    Sec. 15. Minnesota Statutes 2008, section 290.06, subdivision 2c, is amended to read:
21.9    Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income
21.10taxes imposed by this chapter upon married individuals filing joint returns and surviving
21.11spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
21.12applying to their taxable net income the following schedule of rates:
21.13    (1) on the first $25,680 $33,220, 5.35 percent;
21.14    (2) on all over $25,680 $33,220, but not over $102,030 $131,970, 7.05 percent;
21.15    (3) on all over $102,030 $131,970, but not over $300,000, 7.85 percent.; and
21.16(4) on all over $300,000, nine percent.
21.17    Married individuals filing separate returns, estates, and trusts must compute their
21.18income tax by applying the above rates to their taxable income, except that the income
21.19brackets will be one-half of the above amounts.
21.20    (b) The income taxes imposed by this chapter upon unmarried individuals must be
21.21computed by applying to taxable net income the following schedule of rates:
21.22    (1) on the first $17,570 $22,730, 5.35 percent;
21.23    (2) on all over $17,570 $22,730, but not over $57,710 $74,650, 7.05 percent;
21.24    (3) on all over $57,710 $74,650, but not over $169,700, 7.85 percent.; and
21.25(4) on all over $169,700, nine percent.
21.26    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying
21.27as a head of household as defined in section 2(b) of the Internal Revenue Code must be
21.28computed by applying to taxable net income the following schedule of rates:
21.29    (1) on the first $21,630 $27,980, 5.35 percent;
21.30    (2) on all over $21,630 $27,980, but not over $86,910 $112,420, 7.05 percent;
21.31    (3) on all over $86,910 $112,420, but not over $255,560, 7.85 percent.; and
21.32(4) on all over $255,560, nine percent.
21.33    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the
21.34tax of any individual taxpayer whose taxable net income for the taxable year is less than
21.35an amount determined by the commissioner must be computed in accordance with tables
22.1prepared and issued by the commissioner of revenue based on income brackets of not
22.2more than $100. The amount of tax for each bracket shall be computed at the rates set
22.3forth in this subdivision, provided that the commissioner may disregard a fractional part of
22.4a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
22.5    (e) An individual who is not a Minnesota resident for the entire year must compute
22.6the individual's Minnesota income tax as provided in this subdivision. After the
22.7application of the nonrefundable credits provided in this chapter, the tax liability must
22.8then be multiplied by a fraction in which:
22.9    (1) the numerator is the individual's Minnesota source federal adjusted gross income
22.10as defined in section 62 of the Internal Revenue Code and increased by the additions
22.11required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), and
22.12(13), (16), and (17) and reduced by the Minnesota assignable portion of the subtraction
22.13for United States government interest under section 290.01, subdivision 19b, clause (1),
22.14and the subtractions under section 290.01, subdivision 19b, clauses (9), (10), (14), (15),
22.15and (16) (3), (6), (7), and (8), after applying the allocation and assignability provisions of
22.16section 290.081, clause (a), or 290.17; and
22.17    (2) the denominator is the individual's federal adjusted gross income as defined in
22.18section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
22.19section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), and (13), (16), and
22.20(17) and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1),
22.21(9), (10), (14), (15), and (16) (3), (6), (7), and (8).
22.22EFFECTIVE DATE.This section is effective for taxable years beginning after
22.23December 31, 2008.

22.24    Sec. 16. Minnesota Statutes 2008, section 290.06, subdivision 2d, is amended to read:
22.25    Subd. 2d. Inflation adjustment of brackets. (a) For taxable years beginning after
22.26December 31, 2000 2009, the minimum and maximum dollar amounts for each rate
22.27bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the
22.28percentage determined under paragraph (b). For the purpose of making the adjustment as
22.29provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the
22.30rate brackets as they existed for taxable years beginning after December 31, 1999 2008,
22.31and before January 1, 2001 2010. The rate applicable to any rate bracket must not be
22.32changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes
22.33in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10
22.34amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
23.1(b) The commissioner shall adjust the rate brackets and by the percentage determined
23.2pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that:
23.3(1) in section 1(f)(2)(A) the words "increasing or decreasing" shall be substituted
23.4for the word "increasing";
23.5(2) in section 1(f)(3)(A) the words "differs from" shall be substituted for the word
23.6"exceeds"; and
23.7(3) in section 1(f)(3)(B) the word "1999" "2008" shall be substituted for the word
23.8"1992." For 2001 2010, the commissioner shall then determine the percent change from
23.9the 12 months ending on August 31, 1999 2008, to the 12 months ending on August 31,
23.102000 2009, and in each subsequent year, from the 12 months ending on August 31, 1999
23.112008, to the 12 months ending on August 31 of the year preceding the taxable year. The
23.12determination of the commissioner pursuant to this subdivision shall not be considered a
23.13"rule" and shall not be subject to the Administrative Procedure Act contained in chapter 14.
23.14No later than December 15 of each year, the commissioner shall announce the
23.15specific percentage that will be used to adjust the tax rate brackets.
23.16EFFECTIVE DATE.This section is effective for taxable years beginning after
23.17December 31, 2008.

23.18    Sec. 17. Minnesota Statutes 2008, section 290.06, is amended by adding a subdivision
23.19to read:
23.20    Subd. 36. Mortgage interest credit. (a) An individual is allowed a credit against
23.21the tax imposed by this chapter equal to seven percent of the lesser of:
23.22(1) $6,000; or
23.23(2) qualified residence interest deduction for which the individual is eligible under
23.24section 63(d) of the Internal Revenue Code, minus $4,000.
23.25(b) The amount of the credit allowed must be reduced by the amount of the
23.26taxpayer's liability under section 290.091, determined before the credit allowed by this
23.27section is subtracted from regular tax liability.
23.28(c) For a nonresident or part-year resident, the credit must be allocated based on the
23.29percentage calculated under subdivision 2c, paragraph (e).
23.30EFFECTIVE DATE.This section is effective for taxable years beginning after
23.31December 31, 2008.

23.32    Sec. 18. Minnesota Statutes 2008, section 290.06, is amended by adding a subdivision
23.33to read:
24.1    Subd. 37. Charitable contributions credit. (a) An individual is allowed a credit
24.2against the tax imposed by this chapter equal to eight percent of the amount by which
24.3eligible charitable contributions exceed the greater of:
24.4(1) two percent of the individual's adjusted gross income for the taxable year; or
24.5(2) $500.
24.6(b) For purposes of this subdivision, "eligible charitable contributions" means
24.7charitable contributions allowable as a deduction for the taxable year under section
24.8170(a) of the Internal Revenue Code, subject to the limitations of section 170(b) of the
24.9Internal Revenue Code, and determined without regard to whether or not the taxpayers
24.10itemize deductions.
24.11(c) For purposes of this subdivision, "adjusted gross income" has the meaning given
24.12in section 62 of the Internal Revenue Code.
24.13(d) For a nonresident or part-year resident, the credit must be allocated based on the
24.14percentage calculated under subdivision 2c, paragraph (e).
24.15EFFECTIVE DATE.This section is effective for taxable years beginning after
24.16December 31, 2008.

24.17    Sec. 19. Minnesota Statutes 2008, section 290.0671, subdivision 1, is amended to read:
24.18    Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
24.19imposed by this chapter equal to a percentage of earned income. To receive a credit, a
24.20taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
24.21(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
24.22the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
24.23income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
24.24case is the credit less than zero.
24.25(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
24.26$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
24.27$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
24.28whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
24.29(d) For individuals with two or more qualifying children, the credit equals ten
24.30percent of the first $9,720 of earned income and 20 percent of earned income over
24.31$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income
24.32or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is
24.33the credit less than zero.
24.34(e) For a nonresident or part-year resident, the credit must be allocated based on the
24.35percentage calculated under section 290.06, subdivision 2c, paragraph (e).
25.1(f) For a person who was a resident for the entire tax year and has earned income
25.2not subject to tax under this chapter, including income excluded under section 290.01,
25.3subdivision 19b , clause (10) or (16), the credit must be allocated based on the ratio of
25.4federal adjusted gross income reduced by the earned income not subject to tax under
25.5this chapter over federal adjusted gross income. For purposes of this paragraph, the
25.6subtractions for military pay under section 290.01, subdivision 19b, clauses (11) and (12)
25.7(4) and (5), are not considered "earned income not subject to tax under this chapter."
25.8For the purposes of this paragraph, the exclusion of combat pay under section 112
25.9of the Internal Revenue Code is not considered "earned income not subject to tax under
25.10this chapter."
25.11(g) For tax years beginning after December 31, 2001, and before December 31,
25.122004, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
25.13paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
25.14$1,000 for married taxpayers filing joint returns.
25.15(h) For tax years beginning after December 31, 2004, and before December 31,
25.162007, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
25.17paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
25.18$2,000 for married taxpayers filing joint returns.
25.19(i) For tax years beginning after December 31, 2007, and before December 31, 2010,
25.20the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
25.21(d), after being adjusted for inflation under subdivision 7, are each increased by $3,000 for
25.22married taxpayers filing joint returns. For tax years beginning after December 31, 2008,
25.23the $3,000 is adjusted annually for inflation under subdivision 7.
25.24(j) The commissioner shall construct tables showing the amount of the credit at
25.25various income levels and make them available to taxpayers. The tables shall follow
25.26the schedule contained in this subdivision, except that the commissioner may graduate
25.27the transition between income brackets.

25.28    Sec. 20. Minnesota Statutes 2008, section 290.068, subdivision 1, is amended to read:
25.29    Subdivision 1. Credit allowed. A corporation, other than a corporation treated as an
25.30"S" corporation under section 290.9725, taxpayer is allowed a credit against the portion
25.31of the franchise tax computed under section 290.06, subdivision 1, for the taxable year
25.32equal to:
25.33(a) 5 (1) ten percent of the first $2,000,000 of the excess (if any) of
25.34(1) (i) the qualified research expenses for the taxable year, over
25.35(2) (ii) the base amount; and
26.1(b) (2) 2.5 percent on all of such excess expenses over $2,000,000.
26.2EFFECTIVE DATE.This section is effective for taxable years beginning after
26.3December 31, 2008.

26.4    Sec. 21. Minnesota Statutes 2008, section 290.068, subdivision 3, is amended to read:
26.5    Subd. 3. Limitation; carryover. (a)(1) The credit for the taxable year shall not
26.6exceed the liability for tax. "Liability for tax" for purposes of this section means the tax
26.7imposed under section 290.06, subdivision 1, for the taxable year reduced by the sum of
26.8the nonrefundable credits allowed under this chapter.
26.9    (2) In the case of a corporation which is For a partner in a partnership and for a
26.10shareholder in an S corporation, the credit allowed for the taxable year shall not exceed
26.11the lesser of the amount determined under clause (1) for the taxable year or an amount
26.12(separately computed with respect to the corporation's taxpayer's interest in the trade or
26.13business or entity) equal to the amount of tax attributable to that portion of taxable income
26.14which is allocable or apportionable to the corporation's taxpayer's interest in the trade or
26.15business or entity.
26.16    (b) If the amount of the credit determined under this section for any taxable year
26.17exceeds the limitation under clause (a), the excess shall be a research credit carryover to
26.18each of the 15 succeeding taxable years. The entire amount of the excess unused credit for
26.19the taxable year shall be carried first to the earliest of the taxable years to which the credit
26.20may be carried and then to each successive year to which the credit may be carried. The
26.21amount of the unused credit which may be added under this clause shall not exceed the
26.22taxpayer's liability for tax less the research credit for the taxable year.
26.23EFFECTIVE DATE.This section is effective for taxable years beginning after
26.24December 31, 2008.

26.25    Sec. 22. Minnesota Statutes 2008, section 290.068, subdivision 4, is amended to read:
26.26    Subd. 4. Partnerships and S corporations. In the case of partnerships and S
26.27corporations the credit shall be allocated in the same manner provided by section sections
26.2841(f)(2) and 41(g) of the Internal Revenue Code.
26.29EFFECTIVE DATE.This section is effective for taxable years beginning after
26.30December 31, 2008.

26.31    Sec. 23. [290.0682] MINNESOTA CHILD CREDIT.
26.32    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
26.33have the meanings given.
27.1(b) "Adjusted gross income" has the meaning given in section 62 of the Internal
27.2Revenue Code.
27.3(c) "Qualifying child" has the meaning given in section 24(c) of the Internal
27.4Revenue Code.
27.5    Subd. 2. Credit allowed. (a) An individual is allowed a credit against the tax
27.6imposed by this chapter equal to the lesser of:
27.7(1) $200 for each qualifying child; or
27.8(2) ten percent of adjusted gross income in excess of $14,000.
27.9(b) The credit allowed in paragraph (a) is reduced by an amount equal to five percent
27.10of adjusted gross income in excess of $28,000, but in no case is the credit less than zero.
27.11(c) For a nonresident or part-year resident, the credit must be allocated based on the
27.12percentage calculated under section 290.06, subdivision 2c, paragraph (e).
27.13    Subd. 3. Credit refundable. If the amount of credit that an individual is eligible
27.14to receive under this section exceeds the claimant's tax liability under this chapter, the
27.15commissioner shall refund the excess to the claimant.
27.16    Subd. 4. Appropriation. An amount sufficient to pay the refunds required by this
27.17section is appropriated to the commissioner from the general fund.
27.18    Subd. 5. Inflation adjustment. The adjusted gross income floor in subdivision 2,
27.19paragraph (a), clause (2), and the phaseout threshold in subdivision 2, paragraph (b),
27.20must be adjusted for inflation. For tax years beginning after December 31, 2009, the
27.21commissioner shall annually adjust the adjusted gross income floor and the phaseout
27.22threshold by the percentage determined pursuant to section 1(f) of the Internal Revenue
27.23Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for the word
27.24"1992." For 2010, the commissioner shall then determine the percent change from the
27.2512 months ending on August 31, 2008, to the 12 months ending on August 31, 2009,
27.26and in each subsequent year, from the 12 months ending on August 31, 2008, to the 12
27.27months ending on August 31 of the year preceding the taxable year. The adjusted gross
27.28income floor and the phaseout threshold as adjusted for inflation must be rounded to
27.29the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10.
27.30The determination of the commissioner under this subdivision is not a rule under the
27.31Administrative Procedure Act.
27.32EFFECTIVE DATE.This section is effective for taxable years beginning after
27.33December 31, 2008.

27.34    Sec. 24. Minnesota Statutes 2008, section 290.091, subdivision 2, is amended to read:
28.1    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
28.2terms have the meanings given:
28.3    (a) "Alternative minimum taxable income" means the sum of the following for
28.4the taxable year:
28.5    (1) the taxpayer's federal alternative minimum taxable income as defined in section
28.655(b)(2) of the Internal Revenue Code;
28.7    (2) the taxpayer's itemized deductions allowed in computing federal alternative
28.8minimum taxable income, but excluding:
28.9    (i) the charitable contribution deduction under section 170 of the Internal Revenue
28.10Code;
28.11    (ii) (i) the medical expense deduction;
28.12    (iii) (ii) the casualty, theft, and disaster loss deduction; and
28.13    (iv) (iii) the impairment-related work expenses of a disabled person;
28.14    (3) for depletion allowances computed under section 613A(c) of the Internal
28.15Revenue Code, with respect to each property (as defined in section 614 of the Internal
28.16Revenue Code), to the extent not included in federal alternative minimum taxable income,
28.17the excess of the deduction for depletion allowable under section 611 of the Internal
28.18Revenue Code for the taxable year over the adjusted basis of the property at the end of the
28.19taxable year (determined without regard to the depletion deduction for the taxable year);
28.20    (4) to the extent not included in federal alternative minimum taxable income, the
28.21amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
28.22Internal Revenue Code determined without regard to subparagraph (E);
28.23    (5) to the extent not included in federal alternative minimum taxable income, the
28.24amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
28.25    (6) the amount of addition required by section 290.01, subdivision 19a, clauses
28.26(7) to (9), (12), and (13), (16), and (17);
28.27    less the sum of the amounts determined under the following:
28.28    (1) interest income as defined in section 290.01, subdivision 19b, clause (1);
28.29    (2) an overpayment of state income tax as provided by section 290.01, subdivision
28.3019b , clause (2), to the extent included in federal alternative minimum taxable income;
28.31    (3) the amount of investment interest paid or accrued within the taxable year on
28.32indebtedness to the extent that the amount does not exceed net investment income, as
28.33defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
28.34amounts deducted in computing federal adjusted gross income; and
28.35    (4) amounts subtracted from federal taxable income as provided by section 290.01,
28.36subdivision 19b , clauses (6) and (9) to (16) (3) to (8).
29.1    In the case of an estate or trust, alternative minimum taxable income must be
29.2computed as provided in section 59(c) of the Internal Revenue Code.
29.3    (b) "Investment interest" means investment interest as defined in section 163(d)(3)
29.4of the Internal Revenue Code.
29.5    (c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
29.6income after subtracting the exemption amount determined under subdivision 3.
29.7    (d) "Regular tax" means the tax that would be imposed under this chapter (without
29.8regard to this section and section 290.032), reduced by the sum of the nonrefundable
29.9credits allowed under this chapter.
29.10    (e) "Net minimum tax" means the minimum tax imposed by this section.
29.11EFFECTIVE DATE.This section is effective for taxable years beginning after
29.12December 31, 2008.

29.13    Sec. 25. Minnesota Statutes 2008, section 290.0921, subdivision 3, is amended to read:
29.14    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
29.15income" is Minnesota net income as defined in section 290.01, subdivision 19, and
29.16includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
29.17(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
29.18Minnesota tax return, the minimum tax must be computed on a separate company basis.
29.19If a corporation is part of a tax group filing a unitary return, the minimum tax must be
29.20computed on a unitary basis. The following adjustments must be made.
29.21(1) For purposes of the depreciation adjustments under section 56(a)(1) and
29.2256(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
29.23service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
29.24income tax purposes, including any modification made in a taxable year under section
29.25290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
29.26paragraph (c).
29.27For taxable years beginning after December 31, 2000, the amount of any remaining
29.28modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
29.29section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
29.30allowance in the first taxable year after December 31, 2000.
29.31(2) The portion of the depreciation deduction allowed for federal income tax
29.32purposes under section 168(k) of the Internal Revenue Code that is required as an
29.33addition under section 290.01, subdivision 19c, clause (15), is disallowed in determining
29.34alternative minimum taxable income.
30.1(3) The subtraction for depreciation allowed under section 290.01, subdivision
30.219d , clause (18) (17), is allowed as a depreciation deduction in determining alternative
30.3minimum taxable income.
30.4(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
30.5of the Internal Revenue Code does not apply.
30.6(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
30.7Revenue Code does not apply.
30.8(6) The special rule for dividends from section 936 companies under section
30.956(g)(4)(C)(iii) does not apply.
30.10(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
30.11Code does not apply.
30.12(8) The tax preference for intangible drilling costs under section 57(a)(2) of the
30.13Internal Revenue Code must be calculated without regard to subparagraph (E) and the
30.14subtraction under section 290.01, subdivision 19d, clause (4).
30.15(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
30.16Revenue Code does not apply.
30.17(10) The tax preference for charitable contributions of appreciated property under
30.18section 57(a)(6) of the Internal Revenue Code does not apply.
30.19(11) For purposes of calculating the tax preference for accelerated depreciation or
30.20amortization on certain property placed in service before January 1, 1987, under section
30.2157(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
30.22deduction allowed under section 290.01, subdivision 19e.
30.23For taxable years beginning after December 31, 2000, the amount of any remaining
30.24modification made under section 290.01, subdivision 19e, not previously deducted is a
30.25depreciation or amortization allowance in the first taxable year after December 31, 2004.
30.26(12) For purposes of calculating the adjustment for adjusted current earnings in
30.27section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
30.28income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
30.29minimum taxable income as defined in this subdivision, determined without regard to the
30.30adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
30.31(13) For purposes of determining the amount of adjusted current earnings under
30.32section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
30.3356(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
30.34gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), or (ii) the
30.35amount of refunds of income, excise, or franchise taxes subtracted as provided in section
31.1290.01, subdivision 19d , clause (9), or (iii) the amount of royalties, fees or other like
31.2income subtracted as provided in section 290.01, subdivision 19d, clause (10).
31.3(14) Alternative minimum taxable income excludes the income from operating in a
31.4job opportunity building zone as provided under section 469.317.
31.5(15) Alternative minimum taxable income excludes the income from operating in a
31.6biotechnology and health sciences industry zone as provided under section 469.337.
31.7(16) Alternative minimum taxable income excludes the income from operating in an
31.8international economic development zone as provided under section 469.326.
31.9(14) Alternative minimum taxable income includes Minnesota development
31.10subsidies.
31.11Items of tax preference must not be reduced below zero as a result of the
31.12modifications in this subdivision.
31.13EFFECTIVE DATE.This section is effective for taxable years beginning after
31.14December 31, 2009, except the changes to clauses (3) and (13) and the new clause (14) are
31.15effective for taxable years beginning after December 31, 2008.

31.16    Sec. 26. Minnesota Statutes 2008, section 290.0922, subdivision 1, is amended to read:
31.17    Subdivision 1. Imposition. (a) In addition to the tax imposed by this chapter without
31.18regard to this section, the franchise tax imposed on a corporation required to file under
31.19section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation
31.20under section 290.9725 for the taxable year includes a tax equal to the following amounts:

31.21 31.22 31.23	If the sum of the corporation's Minnesota property, payrolls, and sales or receipts is:						the tax equals:
31.24			less than	$	500,000		$	0
31.25		$	500,000 to	$	999,999		$	100
31.26		$	1,000,000 to	$	4,999,999		$	300
31.27		$	5,000,000 to	$	9,999,999		$	1,000
31.28		$	10,000,000 to	$	19,999,999		$	2,000
31.29		$	20,000,000 or more				$	5,000
31.30			less than	$	830,000		$	0
31.31		$	830,000 to	$	1,659,999		$	170
31.32		$	1,660,000 to	$	8,319,999		$	500
31.33		$	8,320,000 to	$	16,649,999		$	1,660
31.34		$	16,650,000 to	$	33,299,999		$	3,330
31.35		$	33,300,000 or more				$	8,320

31.36(b) A tax is imposed for each taxable year on a corporation required to file a return
31.37under section 289A.12, subdivision 3, that is treated as an "S" corporation under section
31.38290.9725 and on a partnership required to file a return under section 289A.12, subdivision
32.13 , other than a partnership that derives over 80 percent of its income from farming. The
32.2tax imposed under this paragraph is due on or before the due date of the return for the
32.3taxpayer due under section 289A.18, subdivision 1. The commissioner shall prescribe
32.4the return to be used for payment of this tax. The tax under this paragraph is equal to
32.5the following amounts:

32.6 32.7 32.8	If the sum of the S corporation's or partnership's Minnesota property, payrolls, and sales or receipts is:							the tax equals:
32.9			less than	$	500,000		$	0
32.10		$	500,000 to	$	999,999		$	100
32.11		$	1,000,000 to	$	4,999,999		$	300
32.12		$	5,000,000 to	$	9,999,999		$	1,000
32.13		$	10,000,000 to	$	19,999,999		$	2,000
32.14		$	20,000,000 or more				$	5,000
32.15			less than	$	830,000		$	0
32.16		$	830,000 to	$	1,659,999		$	170
32.17		$	1,660,000 to	$	8,319,999		$	500
32.18		$	8,320,000 to	$	16,649,999		$	1,660
32.19		$	16,650,000 to	$	33,299,999		$	3,330
32.20		$	33,300,000 or more				$	8,320

32.21EFFECTIVE DATE.This section is effective for taxable years beginning after
32.22December 31, 2008.

32.23    Sec. 27. Minnesota Statutes 2008, section 290.0922, subdivision 3, is amended to read:
32.24    Subd. 3. Definitions. (a) "Minnesota sales or receipts" means the total sales
32.25apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts
32.26attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the
32.27total sales or receipts apportioned or attributed to Minnesota pursuant to any other
32.28apportionment formula applicable to the taxpayer.
32.29(b) "Minnesota property" means total Minnesota tangible property as provided in
32.30section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota,
32.31but does not include: (1) property located in a job opportunity building zone designated
32.32under section 469.314, (2) property of a qualified business located in a biotechnology and
32.33health sciences industry zone designated under section 469.334, or (3) for taxable years
32.34beginning during the duration of the zone, property of a qualified business located in the
32.35international economic development zone designated under section 469.322. Intangible
32.36property shall not be included in Minnesota property for purposes of this section.
32.37Taxpayers who do not utilize tangible property to apportion income shall nevertheless
32.38include Minnesota property for purposes of this section. On a return for a short taxable
33.1year, the amount of Minnesota property owned, as determined under section 290.191,
33.2shall be included in Minnesota property based on a fraction in which the numerator is the
33.3number of days in the short taxable year and the denominator is 365.
33.4(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section
33.5290.191, subdivision 12 , but does not include: (1) job opportunity building zone payrolls
33.6under section 469.310, subdivision 8, (2) biotechnology and health sciences industry zone
33.7payrolls under section 469.330, subdivision 8, or (3) for taxable years beginning during
33.8the duration of the zone, international economic development zone payrolls under section
33.9469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income shall
33.10nevertheless include Minnesota payrolls for purposes of this section.
33.11EFFECTIVE DATE.This section is effective for taxable years beginning after
33.12December 31, 2009.

33.13    Sec. 28. Minnesota Statutes 2008, section 290.0922, is amended by adding a
33.14subdivision to read:
33.15    Subd. 5. Inflation adjustment. The commissioner shall adjust the dollar amounts
33.16of both the fee and the property, payrolls, and sales or receipts thresholds in subdivision
33.171 by the percentage determined pursuant to the provisions of section 1(f) of the Internal
33.18Revenue Code, except that in section 1(f)(3)(B) the word "2008" must be substituted for
33.19the word "1992." For 2010, the commissioner shall then determine the percent change from
33.20the 12 months ending on August 31, 2008, to the 12 months ending on August 31, 2009,
33.21and in each subsequent year, from the 12 months ending on August 31, 2008, to the 12
33.22months ending on August 31 of the year preceding the taxable year. The determination of
33.23the commissioner pursuant to this subdivision is not a "rule" subject to the Administrative
33.24Procedure Act contained in chapter 14. The fee amounts as adjusted must be rounded to
33.25the nearest $10 and the threshold amounts must be adjusted to the nearest $10,000. For
33.26fee amounts that end in $5, the amount is rounded up to the nearest $10 and for threshold
33.27amounts that end in $5,000, the amount is rounded up to the nearest $10,000.
33.28EFFECTIVE DATE.This section is effective for taxable years beginning after
33.29December 31, 2009.

33.30    Sec. 29. Minnesota Statutes 2008, section 290.17, subdivision 2, is amended to read:
33.31    Subd. 2. Income not derived from conduct of a trade or business. The income of
33.32a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or
33.33business must be assigned in accordance with paragraphs (a) to (f):
34.1    (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in
34.2section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, and to the
34.3extent that, the work of the employee is performed within it; all other income from such
34.4sources is treated as income from sources without this state.
34.5    Severance pay shall be considered income from labor or personal or professional
34.6services.
34.7    (2) In the case of an individual who is a nonresident of Minnesota and who is an
34.8athlete or entertainer, income from compensation for labor or personal services performed
34.9within this state shall be determined in the following manner:
34.10    (i) The amount of income to be assigned to Minnesota for an individual who is a
34.11nonresident salaried athletic team employee shall be determined by using a fraction in
34.12which the denominator contains the total number of days in which the individual is under
34.13a duty to perform for the employer, and the numerator is the total number of those days
34.14spent in Minnesota. For purposes of this paragraph, off-season training activities, unless
34.15conducted at the team's facilities as part of a team imposed program, are not included in
34.16the total number of duty days. Bonuses earned as a result of play during the regular season
34.17or for participation in championship, play-off, or all-star games must be allocated under
34.18the formula. Signing bonuses are not subject to allocation under the formula if they are
34.19not conditional on playing any games for the team, are payable separately from any other
34.20compensation, and are nonrefundable; and
34.21    (ii) The amount of income to be assigned to Minnesota for an individual who is a
34.22nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's
34.23athletic or entertainment performance in Minnesota shall be determined by assigning to
34.24this state all income from performances or athletic contests in this state.
34.25    (3) For purposes of this section, amounts received by a nonresident as "retirement
34.26income" as defined in section (b)(1) of the State Income Taxation of Pension Income
34.27Act, Public Law 104-95, are not considered income derived from carrying on a trade
34.28or business or from wages or other compensation for work an employee performed in
34.29Minnesota, and are not taxable under this chapter.
34.30    (b) Income or gains from tangible property located in this state that is not employed
34.31in the business of the recipient of the income or gains must be assigned to this state.
34.32    (c) Income or gains from intangible personal property not employed in the business
34.33of the recipient of the income or gains must be assigned to this state if the recipient of the
34.34income or gains is a resident of this state or is a resident trust or estate.
34.35    Gain on the sale of a partnership interest is allocable to this state in the ratio of the
34.36original cost of partnership tangible property in this state to the original cost of partnership
35.1tangible property everywhere, determined at the time of the sale. If more than 50 percent
35.2of the value of the partnership's assets consists of intangibles, gain or loss from the sale
35.3of the partnership interest is allocated to this state in accordance with the sales factor of
35.4the partnership for its first full tax period immediately preceding the tax period of the
35.5partnership during which the partnership interest was sold.
35.6Gain on the sale of an interest in a single member limited liability company that
35.7is disregarded for federal income tax purposes is allocable to this state as if the single
35.8member limited liability company did not exist and the assets of the limited liability
35.9company are personally owned by the sole member.
35.10    Gain on the sale of goodwill or income from a covenant not to compete that is
35.11connected with a business operating all or partially in Minnesota is allocated to this state
35.12to the extent that the income from the business in the year preceding the year of sale was
35.13assignable to Minnesota under subdivision 3.
35.14    When an employer pays an employee for a covenant not to compete, the income
35.15allocated to this state is in the ratio of the employee's service in Minnesota in the calendar
35.16year preceding leaving the employment of the employer over the total services performed
35.17by the employee for the employer in that year.
35.18    (d) Income from winnings on a bet made by an individual while in Minnesota is
35.19assigned to this state. In this paragraph, "bet" has the meaning given in section 609.75,
35.20subdivision 2 , as limited by section 609.75, subdivision 3, clauses (1), (2), and (3).
35.21    (e) All items of gross income not covered in paragraphs (a) to (d) and not part of the
35.22taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
35.23    (f) For the purposes of this section, working as an employee shall not be considered
35.24to be conducting a trade or business.
35.25EFFECTIVE DATE.This section is effective the day following final enactment.

35.26    Sec. 30. Minnesota Statutes 2008, section 290.17, subdivision 4, is amended to read:
35.27    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
35.28within this state or partly within and partly without this state is part of a unitary business,
35.29the entire income of the unitary business is subject to apportionment pursuant to section
35.30290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
35.31business is considered to be derived from any particular source and none may be allocated
35.32to a particular place except as provided by the applicable apportionment formula. The
35.33provisions of this subdivision do not apply to business income subject to subdivision 5,
35.34income of an insurance company, or income of an investment company determined under
35.35section 290.36.
36.1(b) The term "unitary business" means business activities or operations which
36.2result in a flow of value between them. The term may be applied within a single legal
36.3entity or between multiple entities and without regard to whether each entity is a sole
36.4proprietorship, a corporation, a partnership or a trust.
36.5(c) Unity is presumed whenever there is unity of ownership, operation, and use,
36.6evidenced by centralized management or executive force, centralized purchasing,
36.7advertising, accounting, or other controlled interaction, but the absence of these
36.8centralized activities will not necessarily evidence a nonunitary business. Unity is also
36.9presumed when business activities or operations are of mutual benefit, dependent upon or
36.10contributory to one another, either individually or as a group.
36.11(d) Where a business operation conducted in Minnesota is owned by a business
36.12entity that carries on business activity outside the state different in kind from that
36.13conducted within this state, and the other business is conducted entirely outside the state, it
36.14is presumed that the two business operations are unitary in nature, interrelated, connected,
36.15and interdependent unless it can be shown to the contrary.
36.16(e) Unity of ownership is not deemed to exist when a corporation is involved unless
36.17that corporation is a member of a group of two or more business entities and more than 50
36.18percent of the voting stock of each member of the group is directly or indirectly owned
36.19by a common owner or by common owners, either corporate or noncorporate, or by one
36.20or more of the member corporations of the group. For this purpose, the term "voting
36.21stock" shall include membership interests of mutual insurance holding companies formed
36.22under section 66A.40.
36.23(f) The net income and apportionment factors under section 290.191 or 290.20 of
36.24foreign corporations and other foreign entities which are part of a unitary business shall
36.25not be included in the net income or the apportionment factors of the unitary business.
36.26A foreign corporation or other foreign entity which is required to file a return under this
36.27chapter shall file on a separate return basis. The net income and apportionment factors
36.28under section 290.191 or 290.20 of foreign operating corporations shall not be included in
36.29the net income or the apportionment factors of the unitary business except as provided in
36.30paragraph (g).
36.31(g) The adjusted net income of a foreign operating corporation shall be deemed to
36.32be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
36.33proportion to each shareholder's ownership, with which such corporation is engaged in
36.34a unitary business. Such deemed dividend shall be treated as a dividend under section
36.35290.21, subdivision 4.
37.1Dividends actually paid by a foreign operating corporation to a corporate shareholder
37.2which is a member of the same unitary business as the foreign operating corporation shall
37.3be eliminated from the net income of the unitary business in preparing a combined report
37.4for the unitary business. The adjusted net income of a foreign operating corporation
37.5shall be its net income adjusted as follows:
37.6(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
37.7Rico, or a United States possession or political subdivision of any of the foregoing shall
37.8be a deduction; and
37.9(2) the subtraction from federal taxable income for payments received from foreign
37.10corporations or foreign operating corporations under section 290.01, subdivision 19d,
37.11clause (10), shall not be allowed.
37.12If a foreign operating corporation incurs a net loss, neither income nor deduction
37.13from that corporation shall be included in determining the net income of the unitary
37.14business.
37.15(h) (g) For purposes of determining the net income of a unitary business and the
37.16factors to be used in the apportionment of net income pursuant to section 290.191 or
37.17290.20 , there must be included only the income and apportionment factors of domestic
37.18corporations or other domestic entities other than foreign operating corporations that are
37.19determined to be part of the unitary business pursuant to this subdivision, notwithstanding
37.20that foreign corporations or other foreign entities might be included in the unitary business.
37.21(i) (h) Deductions for expenses, interest, or taxes otherwise allowable under
37.22this chapter that are connected with or allocable against dividends, deemed dividends
37.23described in paragraph (g), or royalties, fees, or other like income described in section
37.24290.01, subdivision 19d, clause (10), shall not be disallowed.
37.25(j) (i) Each corporation or other entity, except a sole proprietorship, that is part of
37.26a unitary business must file combined reports as the commissioner determines. On the
37.27reports, all intercompany transactions between entities included pursuant to paragraph
37.28(h) (g) must be eliminated and the entire net income of the unitary business determined in
37.29accordance with this subdivision is apportioned among the entities by using each entity's
37.30Minnesota factors for apportionment purposes in the numerators of the apportionment
37.31formula and the total factors for apportionment purposes of all entities included pursuant
37.32to paragraph (h) (g) in the denominators of the apportionment formula.
37.33(k) (j) If a corporation has been divested from a unitary business and is included in a
37.34combined report for a fractional part of the common accounting period of the combined
37.35report:
38.1(1) its income includable in the combined report is its income incurred for that part
38.2of the year determined by proration or separate accounting; and
38.3(2) its sales, property, and payroll included in the apportionment formula must
38.4be prorated or accounted for separately.
38.5EFFECTIVE DATE.This section is effective for taxable years beginning after
38.6December 31, 2008.

38.7    Sec. 31. Minnesota Statutes 2008, section 290.191, subdivision 2, is amended to read:
38.8    Subd. 2. Apportionment formula of general application. (a) Except for those
38.9trades or businesses required to use a different formula under subdivision 3 or section
38.10290.36 , and for those trades or businesses that receive permission to use some other
38.11method under section 290.20 or under subdivision 4, a trade or business required to
38.12apportion its net income must apportion its income to this state on the basis of the
38.13percentage obtained by taking the sum of:
38.14(1) the percent for the sales factor under paragraph (b) of the percentage which
38.15the sales made within this state in connection with the trade or business during the tax
38.16period are of the total sales wherever made in connection with the trade or business during
38.17the tax period;.
38.18(2) the percent for the property factor under paragraph (b) of the percentage which
38.19the total tangible property used by the taxpayer in this state in connection with the trade or
38.20business during the tax period is of the total tangible property, wherever located, used by
38.21the taxpayer in connection with the trade or business during the tax period; and
38.22(3) the percent for the payroll factor under paragraph (b) of the percentage which
38.23the taxpayer's total payrolls paid or incurred in this state or paid in respect to labor
38.24performed in this state in connection with the trade or business during the tax period are
38.25of the taxpayer's total payrolls paid or incurred in connection with the trade or business
38.26during the tax period.
38.27(b) For purposes of paragraph (a) and subdivision 3, the following percentages apply
38.28for the taxable years specified:

38.29 38.30	Taxable years beginning during calendar year			Sales factor percent			Property factor percent		Payroll factor percent
38.31	2007			78			11		11
38.32	2008			81			9.5		9.5
38.33	2009			84			8		8
38.34	2010			87			6.5		6.5
38.35	2011			90			5		5
38.36	2012			93			3.5		3.5
39.1	2013			96			2		2
39.2	2014 and later calendar years			100			0		0

39.3EFFECTIVE DATE.This section is effective for taxable years beginning after
39.4December 31, 2008.

39.5    Sec. 32. Minnesota Statutes 2008, section 290.191, subdivision 3, is amended to read:
39.6    Subd. 3. Apportionment formula for financial institutions. Except for an
39.7investment company required to apportion its income under section 290.36, a financial
39.8institution that is required to apportion its net income must apportion its net income to this
39.9state on the basis of the percentage obtained by taking the sum of:
39.10(1) the percent for the sales factor under subdivision 2, paragraph (b), of the
39.11percentage which the receipts from within this state in connection with the trade or
39.12business during the tax period are of the total receipts in connection with the trade or
39.13business during the tax period, from wherever derived;.
39.14(2) the percent for the property factor under subdivision 2, paragraph (b), of the
39.15percentage which the sum of the total tangible property used by the taxpayer in this
39.16state and the intangible property owned by the taxpayer and attributed to this state in
39.17connection with the trade or business during the tax period is of the sum of the total
39.18tangible property, wherever located, used by the taxpayer and the intangible property
39.19owned by the taxpayer and attributed to all states in connection with the trade or business
39.20during the tax period; and
39.21(3) the percent for the payroll factor under subdivision 2, paragraph (b), of the
39.22percentage which the taxpayer's total payrolls paid or incurred in this state or paid in
39.23respect to labor performed in this state in connection with the trade or business during
39.24the tax period are of the taxpayer's total payrolls paid or incurred in connection with
39.25the trade or business during the tax period.
39.26EFFECTIVE DATE.This section is effective for taxable years beginning after
39.27December 31, 2008.

39.28    Sec. 33. Minnesota Statutes 2008, section 290A.03, subdivision 3, as amended by
39.29Laws 2009, chapter 12, article 1, section 9, is amended to read:
39.30    Subd. 3. Income. (1) "Income" means the sum of the following:
39.31(a) federal adjusted gross income as defined in the Internal Revenue Code; and
39.32(b) the sum of the following amounts to the extent not included in clause (a):
39.33(i) all nontaxable income;
40.1(ii) the amount of a passive activity loss that is not disallowed as a result of section
40.2469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
40.3loss carryover allowed under section 469(b) of the Internal Revenue Code;
40.4(iii) an amount equal to the total of any discharge of qualified farm indebtedness
40.5of a solvent individual excluded from gross income under section 108(g) of the Internal
40.6Revenue Code;
40.7(iv) cash public assistance and relief;
40.8(v) any pension or annuity (including railroad retirement benefits, all payments
40.9received under the federal Social Security Act, Supplemental Security Income, and
40.10veterans benefits), which was not exclusively funded by the claimant or spouse, or which
40.11was funded exclusively by the claimant or spouse and which funding payments were
40.12excluded from federal adjusted gross income in the years when the payments were made;
40.13(vi) interest received from the federal or a state government or any instrumentality
40.14or political subdivision thereof;
40.15(vii) workers' compensation;
40.16(viii) nontaxable strike benefits;
40.17(ix) the gross amounts of payments received in the nature of disability income or
40.18sick pay as a result of accident, sickness, or other disability, whether funded through
40.19insurance or otherwise;
40.20(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
40.211986, as amended through December 31, 1995;
40.22(xi) contributions made by the claimant to an individual retirement account,
40.23including a qualified voluntary employee contribution; simplified employee pension plan;
40.24self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
40.25of the Internal Revenue Code; or deferred compensation plan under section 457 of the
40.26Internal Revenue Code;
40.27(xii) nontaxable scholarship or fellowship grants;
40.28(xiii) the amount of deduction allowed under section 199 of the Internal Revenue
40.29Code;
40.30(xiv) the amount of deduction allowed under section 220 or 223 of the Internal
40.31Revenue Code;
40.32(xv) the amount of tuition expenses required to be added to income under section
40.33290.01, subdivision 19a , clause (12); and
40.34(xvi) the amount deducted for certain expenses of elementary and secondary school
40.35teachers under section 62(a)(2)(D) of the Internal Revenue Code; and
40.36(xvii) unemployment compensation.
41.1In the case of an individual who files an income tax return on a fiscal year basis, the
41.2term "federal adjusted gross income" shall mean federal adjusted gross income reflected
41.3in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
41.4reduced by the amount of a net operating loss carryback or carryforward or a capital loss
41.5carryback or carryforward allowed for the year.
41.6(2) "Income" does not include:
41.7(a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and
41.8102;
41.9(b) amounts of any pension or annuity which was exclusively funded by the claimant
41.10or spouse and which funding payments were not excluded from federal adjusted gross
41.11income in the years when the payments were made;
41.12(c) surplus food or other relief in kind supplied by a governmental agency;
41.13(d) relief granted under this chapter;
41.14(e) child support payments received under a temporary or final decree of dissolution
41.15or legal separation; or
41.16(f) restitution payments received by eligible individuals and excludable interest as
41.17defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
41.182001, Public Law 107-16.
41.19(3) The sum of the following amounts may be subtracted from income:
41.20(a) for the claimant's first dependent, the exemption amount multiplied by 1.4;
41.21(b) for the claimant's second dependent, the exemption amount multiplied by 1.3;
41.22(c) for the claimant's third dependent, the exemption amount multiplied by 1.2;
41.23(d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
41.24(e) for the claimant's fifth dependent, the exemption amount; and
41.25(f) if the claimant or claimant's spouse was disabled or attained the age of 65
41.26on or before December 31 of the year for which the taxes were levied or rent paid, the
41.27exemption amount.
41.28For purposes of this subdivision, the "exemption amount" means the exemption
41.29amount under section 151(d) of the Internal Revenue Code for the taxable year for which
41.30the income is reported.
41.31EFFECTIVE DATE.This section is effective for property tax refunds based on
41.32property taxes payable after December 31, 2009, and rent paid after December 31, 2008,
41.33and thereafter.

41.34    Sec. 34. Minnesota Statutes 2008, section 290A.03, subdivision 15, as amended by
41.35Laws 2009, chapter 12, article 1, section 10, is amended to read:
42.1    Subd. 15. Internal Revenue Code. "Internal Revenue Code" means the Internal
42.2Revenue Code of 1986, as amended through December 31, 2008 March 31, 2009.
42.3EFFECTIVE DATE.This section is effective for property tax refunds based on
42.4property taxes payable after December 31, 2009, and rent paid after December 31, 2008,
42.5and thereafter.

42.6    Sec. 35. Minnesota Statutes 2008, section 291.005, subdivision 1, as amended by Laws
42.72009, chapter 12, article 1, section 11, is amended to read:
42.8    Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
42.9terms used in this chapter shall have the following meanings:
42.10    (1) "Federal gross estate" means the gross estate of a decedent as valued and
42.11otherwise determined for federal estate tax purposes by federal taxing authorities pursuant
42.12to the provisions of the Internal Revenue Code.
42.13    (2) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
42.14excluding therefrom any property included therein which has its situs outside Minnesota,
42.15and (b) including therein any property omitted from the federal gross estate which is
42.16includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
42.17authorities.
42.18    (3) "Personal representative" means the executor, administrator or other person
42.19appointed by the court to administer and dispose of the property of the decedent. If there
42.20is no executor, administrator or other person appointed, qualified, and acting within this
42.21state, then any person in actual or constructive possession of any property having a situs in
42.22this state which is included in the federal gross estate of the decedent shall be deemed
42.23to be a personal representative to the extent of the property and the Minnesota estate tax
42.24due with respect to the property.
42.25    (4) "Resident decedent" means an individual whose domicile at the time of death
42.26was in Minnesota.
42.27    (5) "Nonresident decedent" means an individual whose domicile at the time of
42.28death was not in Minnesota.
42.29    (6) "Situs of property" means, with respect to real property, the state or country in
42.30which it is located; with respect to tangible personal property, the state or country in which
42.31it was normally kept or located at the time of the decedent's death; and with respect to
42.32intangible personal property, the state or country in which the decedent was domiciled
42.33at death. For a nonresident decedent with an ownership interest in a pass-through entity
42.34with assets that include real or tangible personal property, situs of the real or tangible
42.35personal property is determined as if the pass-through entity does not exist and the real
43.1or tangible personal property is personally owned by the decedent. If the pass-through
43.2entity is owned by a person or persons in addition to the decedent, ownership of the
43.3property is attributed to the decedent in proportion to the decedent's capital ownership
43.4share of the pass-through entity.
43.5    (7) "Commissioner" means the commissioner of revenue or any person to whom the
43.6commissioner has delegated functions under this chapter.
43.7    (8) "Internal Revenue Code" means the United States Internal Revenue Code of
43.81986, as amended through December 31, 2008 March 31, 2009.
43.9    (9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
43.10defined by section 2011(b)(3) of the Internal Revenue Code, increased by:
43.11(i) the amount of deduction for state death taxes allowed under section 2058 of
43.12the Internal Revenue Code.; and
43.13(ii) the amount of taxable gifts as defined in section 292.16 and made by the
43.14decedent within three years of the decedent's date of death.
43.15(10) "Pass-through entity" includes the following:
43.16(i) an entity electing S corporation status under section 1362 of the Internal Revenue
43.17Code;
43.18(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
43.19(iii) a single member limited liability company or similar entity, regardless of
43.20whether it is taxed as an association or is disregarded for federal income tax purposes
43.21under Code of Federal Regulations, title 26, section 301.7701-3; or
43.22(iv) a trust.
43.23EFFECTIVE DATE.This section is effective the day following final enactment,
43.24except the changes incorporated by federal changes are effective at the same time as the
43.25changes were effective for federal purposes, and except that the changes to clauses (6) to
43.26(10) are effective for decedents dying after December 31, 2008.

43.27    Sec. 36. Minnesota Statutes 2008, section 291.03, subdivision 1, is amended to read:
43.28    Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
43.29proportion of the maximum credit for state death taxes computed under section 2011 of
43.30the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal
43.31adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal
43.32gross estate. The tax is reduced by the gift tax paid by the decedent under section 292.17
43.33on gifts included in the Minnesota adjusted gross estate.
44.1    (b) The tax determined under this subdivision must not be greater than the sum of
44.2the following amounts multiplied by a fraction, the numerator of which is the Minnesota
44.3gross estate and the denominator of which is the federal gross estate:
44.4    (1) the rates and brackets under section 2001(c) of the Internal Revenue Code
44.5multiplied by the sum of:
44.6    (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code;
44.7plus
44.8    (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
44.9Code; less
44.10    (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
44.11Code; and less
44.12    (3) the federal credit allowed under section 2010 of the Internal Revenue Code.
44.13    (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
44.14Revenue Code of 1986, as amended through December 31, 2000.
44.15EFFECTIVE DATE.This section is effective for decedents dying after December
44.1631, 2008.

44.17    Sec. 37. [292.16] DEFINITIONS.
44.18(a) For purposes of this chapter, the following definitions apply.
44.19(b) The definitions of terms defined in section 291.005 apply.
44.20(c) "Taxable gifts" means:
44.21(1) the transfers by gift which are included in taxable gifts for federal gift tax
44.22purposes under the following sections of the Internal Revenue Code:
44.23(i) section 2503;
44.24(ii) sections 2511 to 2514; and
44.25(iii) sections 2516 to 2519; less
44.26(2) the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.
44.27EFFECTIVE DATE.This section is effective for taxable gifts made after June
44.2830, 2009.

44.29    Sec. 38. [292.17] GIFT TAX.
44.30    Subdivision 1. Imposition. (a) A tax is imposed on the transfer of property by gift
44.31by any individual resident or nonresident in an amount equal to ten percent of the amount
44.32of the taxable gift.
44.33(b) The donor is liable for payment of the tax. If the gift tax is not paid when due,
44.34the recipient of any gift is personally liable for the tax to the extent of the value of the gift.
45.1    Subd. 2. Lifetime credit. A credit of $100,000 is allowed against the tax imposed
45.2under this section. This credit applies to the cumulative amount of taxable gifts made
45.3by the donor during the donor's lifetime.
45.4    Subd. 3. Out-of-state gifts. Taxable gifts exclude the transfer of tangible personal
45.5property and real property having a situs outside this state.
45.6EFFECTIVE DATE.This section is effective for taxable gifts made after June
45.730, 2009.

45.8    Sec. 39. [292.18] RETURNS.
45.9(a) Any individual who makes a taxable gift during the taxable year shall file a gift
45.10tax return in the form and manner prescribed by the commissioner.
45.11(b) If the donor dies before filing the return, the executor of the donor's will or
45.12the administrator of the donor's estate shall file the return. If the donor becomes legally
45.13incompetent before filing the return, the guardian or conservator shall file the return.
45.14(c) The return must include:
45.15(1) each gift made during the calendar year which is to be included in computing the
45.16taxable gifts;
45.17(2) the deductions claimed and allowable under section 292.16, paragraph (c),
45.18clause (2);
45.19(3) a description of the gift, and the donee's name, address, and Social Security
45.20number;
45.21(4) the fair market value of gifts not made in money; and
45.22(5) any other information the commissioner requires to administer the gift tax.
45.23EFFECTIVE DATE.This section is effective for taxable gifts made after June
45.2430, 2009.

45.25    Sec. 40. [292.19] FILING REQUIREMENTS.
45.26Gift tax returns must be filed by the April 15 following the close of the calendar
45.27year, except if a gift is made during the calendar year in which the donor dies, the return
45.28for the donor must be filed by the last date, including extensions, for filing the gift tax
45.29return for federal gift tax purposes for the donor.
45.30EFFECTIVE DATE.This section is effective for taxable gifts made after June
45.3130, 2009.

45.32    Sec. 41. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
46.1The commissioner may require the donor or the donee to show the property subject
46.2to the tax under section 292.17 to the commissioner upon demand and may employ
46.3a suitable person to appraise the property. The donor shall submit a declaration, in a
46.4form prescribed by the commissioner and including any certification required by the
46.5commissioner, that the property shown by the donor on the gift tax return includes all of
46.6the property transferred by gift for the calendar year and not excluded from taxable gifts
46.7under section 292.16, paragraph (c), clause (2).
46.8EFFECTIVE DATE.This section is effective for taxable gifts made after June
46.930, 2009.

46.10    Sec. 42. [292.21] ADMINISTRATIVE PROVISIONS.
46.11    Subdivision 1. Payment of tax; penalty for late payment. The tax imposed under
46.12section 292.17 is due and payable to the commissioner by the April 15 following the close
46.13of the calendar year during which the gift was made. The return required under section
46.14292.18 must be included with the payment. If a taxable gift is made during the calendar
46.15year in which the donor dies, the due date is the last date, including extensions, for filing
46.16the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the
46.17tax due within the time specified under this section, a penalty applies equal to ten percent
46.18of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty
46.19bear interest at the rate under section 270C.40 from the due date of the return.
46.20    Subd. 2. Extensions. The commissioner may, for good cause, extend the time for
46.21filing a gift tax return, if a written request is filed with a tentative return accompanied by a
46.22payment of the tax, which is estimated in the tentative return, on or before the last day for
46.23filing the return. Any person to whom an extension is granted must pay, in addition to the
46.24tax, interest at the rate under section 270C.40 from the date on which the tax would have
46.25been due without the extension.
46.26    Subd. 3. Changes in federal gift tax. If the amount of a taxpayer's taxable gifts
46.27for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any
46.28calendar year, is changed or corrected by the Internal Revenue Service or other officer
46.29of the United States or other competent authority, the taxpayer shall report the change or
46.30correction in federal taxable gifts within 180 days after the final determination of the
46.31change or correction, and concede the accuracy of the determination or provide a letter
46.32detailing how the federal determination is incorrect or does not change the Minnesota
46.33gift tax. Any taxpayer filing an amended federal gift tax return shall also file within
46.34180 days an amended return under this chapter and shall include any information the
46.35commissioner requires. The time for filing the report or amended return may be extended
47.1by the commissioner upon due cause shown. Notwithstanding any limitation of time in
47.2this chapter, if, upon examination, the commissioner finds that the taxpayer is liable for
47.3the payment of an additional tax, the commissioner shall, within a reasonable time from
47.4the receipt of the report or amended return, notify the taxpayer of the amount of additional
47.5tax, together with interest computed at the rate under section 270C.40 from the date when
47.6the original tax was due and payable. Within 30 days of the mailing of the notice, the
47.7taxpayer shall pay the commissioner the amount of the additional tax and interest. If, upon
47.8examination of the report or amended return and related information, the commissioner
47.9finds that the taxpayer has overpaid the tax due the state, the commissioner shall refund
47.10the overpayment to the taxpayer.
47.11    Subd. 4. Application of federal rules. In administering the tax under this chapter,
47.12the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal
47.13Revenue Code. The words "secretary or his delegate," as used in those sections of the
47.14Internal Revenue Code, means the commissioner.
47.15EFFECTIVE DATE.This section is effective for taxable gifts made after June
47.1630, 2009.

47.17    Sec. 43. [292.22] CREDIT AGAINST ESTATE TAX.
47.18A credit is allowed against the estate tax imposed under chapter 291 in the amount
47.19of any tax imposed and paid under this chapter for a gift includable in the Minnesota
47.20adjusted taxable estate of the donor under section 291.005.
47.21EFFECTIVE DATE.This section is effective for taxable gifts made after June
47.2230, 2009.

47.23    Sec. 44. Minnesota Statutes 2008, section 469.315, is amended to read:
47.24469.315 TAX INCENTIVES AVAILABLE IN ZONES.
47.25Qualified businesses that operate in a job opportunity building zone, individuals who
47.26invest in a qualified business that operates in a job opportunity building zone, and property
47.27located in a job opportunity building zone qualify for:
47.28(1) exemption from individual income taxes as provided under section 469.316;
47.29(2) exemption from corporate franchise taxes as provided under section 469.317;
47.30(3) (1) exemption from the state sales and use tax and any local sales and use taxes
47.31on qualifying purchases as provided in section 297A.68, subdivision 37;
47.32(4) (2) exemption from the state sales tax on motor vehicles and any local sales tax
47.33on motor vehicles as provided under section 297B.03;
48.1(5) (3) exemption from the property tax as provided in section 272.02, subdivision
48.264 ;
48.3(6) (4) exemption from the wind energy production tax under section 272.029,
48.4subdivision 7 ; and
48.5(7) (5) the jobs credit allowed under section 469.318.
48.6EFFECTIVE DATE.This section is effective for taxable years beginning after
48.7December 31, 2009.

48.8    Sec. 45. Minnesota Statutes 2008, section 469.3192, is amended to read:
48.9469.3192 PROHIBITION AGAINST AMENDMENTS TO BUSINESS
48.10SUBSIDY AGREEMENT.
48.11    (a) Except as authorized under paragraphs (b) and (c) or section 469.3191, under
48.12no circumstance shall terms of any agreement required as a condition for eligibility for
48.13benefits listed under section 469.315 be amended to change job creation, job retention,
48.14or wage goals included in the agreement.
48.15(b) A business may elect to void a business subsidy agreement permitting it to
48.16qualify for benefits listed under section 469.315 within 30 days after enactment of section
48.1746, effective for obligations under the agreement that apply to periods after December 31,
48.182008. The authority to void an agreement expires 180 days after enactment of section 46.
48.19(c) A business that does not elect to void an agreement under paragraph (b) may
48.20negotiate a modified or new business subsidy agreement to reflect the state's repeal of the
48.21benefits of the individual income and corporate franchise tax exemptions under sections
48.22469.316 and 469.317.
48.23EFFECTIVE DATE.This section is effective the day following final enactment.

48.24    Sec. 46. REVISOR'S INSTRUCTION.
48.25The revisor of statutes shall identify and correct internal cross-references to sections
48.26that are affected by section 46. The revisor may make changes necessary to correct the
48.27punctuation, grammar, or structure of the remaining text to preserve its meaning.
48.28EFFECTIVE DATE.This section is effective the day following final enactment.

48.29    Sec. 47. REPEALER.
48.30(a) Minnesota Statutes 2008, sections 289A.50, subdivision 10; 290.01, subdivision
48.316b; 290.06, subdivisions 33 and 34; 290.067, subdivisions 1, 2, 2a, 2b, 3, and 4; 290.0672;
48.32290.0674; 290.0679; 290.0802; 290.0921, subdivision 7; 290.191, subdivision 4; and
49.1290.491, and Laws 2009, chapter 3, section 1; and Laws 2009, chapter 12, article 1,
49.2section 8, are repealed.
49.3(b) Minnesota Statutes 2008, sections 272.02, subdivision 83; 290.06, subdivisions
49.424, 28, 30, 31, and 32; 297A.68, subdivisions 38 and 41; 469.316; 469.317; 469.321;
49.5469.3215; 469.322; 469.323; 469.324; 469.325; 469.326; 469.327; 469.328; 469.329;
49.6469.330; 469.331; 469.332; 469.333; 469.334; 469.335; 469.336; 469.337; 469.338;
49.7469.339; 469.340; and 469.341, are repealed.
49.8(c) Minnesota Statutes 2008, section 297A.815, subdivision 3, is repealed.
49.9EFFECTIVE DATE.Paragraph (a) is effective for taxable years beginning after
49.10December 31, 2008. Paragraph (b) is effective for taxable years beginning after December
49.1131, 2009. Paragraph (c) is effective July 1, 2009.


49.14    Section 1. Minnesota Statutes 2008, section 275.70, subdivision 3, is amended to read:
49.15    Subd. 3. Local governmental unit. "Local governmental unit" means a county, or a
49.16statutory or home rule charter city with a population greater than 2,500.
49.17EFFECTIVE DATE.This section is effective for taxes levied in calendar year
49.182009, payable in 2010 and thereafter.

49.19    Sec. 2. Minnesota Statutes 2008, section 275.71, subdivision 2, is amended to read:
49.20    Subd. 2. Levy limit base. (a) The levy limit base for a local governmental unit for
49.21taxes levied in 2008 is its levy aid base from the previous year, subject to any adjustments
49.22under section 275.72. For taxes levied in 2009 and 2010, the levy limit base for a local
49.23governmental unit is its adjusted levy limit base in the previous year, subject to any
49.24adjustments under section 275.72.
49.25EFFECTIVE DATE.This section is effective for taxes levied in calendar year
49.262009, payable in 2010 and thereafter.

49.27    Sec. 3. Minnesota Statutes 2008, section 275.71, subdivision 4, is amended to read:
49.28    Subd. 4. Adjusted levy limit base. For taxes levied in 2008 through 2010 and 2009,
49.29the adjusted levy limit base is equal to the levy limit base computed under subdivision 2
49.30or section 275.72, multiplied by:
49.31    (1) one plus the lesser of 3.9 percent or the percentage growth in the implicit price
49.32deflator;
50.1    (2) one plus a percentage equal to 50 percent of the percentage increase in the number
50.2of households, if any, for the most recent 12-month period for which data is available; and
50.3    (3) one plus a percentage equal to 50 percent of the percentage increase in the
50.4taxable market value of the jurisdiction due to new construction of class 3 property, as
50.5defined in section 273.13, subdivision 4, except for state-assessed utility and railroad
50.6property, for the most recent year for which data is available.
50.7EFFECTIVE DATE.This section is effective for taxes levied in calendar year
50.82009, payable in 2010 and thereafter.

50.9    Sec. 4. Minnesota Statutes 2008, section 275.71, subdivision 5, is amended to read:
50.10    Subd. 5. Property tax levy limit. For taxes levied in 2008 through 2010 2009, the
50.11property tax levy limit for a local governmental unit is equal to its adjusted levy limit
50.12base determined under subdivision 4 plus any additional levy authorized under section
50.13275.73 , which is levied against net tax capacity, reduced by the sum of (i) the total amount
50.14of aids and reimbursements that the local governmental unit is certified to receive under
50.15sections 477A.011 to 477A.014, (ii) the amount of aid reduction under section 477A.0124,
50.16subdivision 6, paragraph (c), (iii) taconite aids under sections 298.28 and 298.282
50.17including any aid which was required to be placed in a special fund for expenditure in the
50.18next succeeding year, (iii) (iv) estimated payments to the local governmental unit under
50.19section 272.029, adjusted for any error in estimation in the preceding year, and (iv) (v)
50.20aids under section 477A.16.
50.21EFFECTIVE DATE.This section is effective for taxes levied in calendar year
50.222009, payable in 2010 and thereafter.

50.23    Sec. 5. Minnesota Statutes 2008, section 297A.99, subdivision 1, is amended to read:
50.24    Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
50.25impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3)
50.26under section 297A.994, or (4) if permitted by special law enacted prior to May 20, 2008,
50.27or (4) (5) if the political subdivision enacted and imposed the tax before January 1, 1982,
50.28and its predecessor provision.
50.29    (b) This section governs the imposition of a general sales tax by the political
50.30subdivision. The provisions of this section preempt the provisions of any special law:
50.31    (1) enacted before June 2, 1997, or
50.32    (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
50.33provision from this section's rules by reference.
51.1    (c) This section does not apply to or preempt a sales tax on motor vehicles or a
51.2special excise tax on motor vehicles.
51.3    (d) Until after May 31, 2010, a political subdivision may not advertise, promote,
51.4expend funds, or hold a referendum to support imposing a local option sales tax unless
51.5it is for extension of an existing tax or the tax was authorized by a special law enacted
51.6prior to May 20, 2008.
51.7EFFECTIVE DATE.This section is effective the day following final enactment.

51.8    Sec. 6. [297A.994] COUNTY LOCAL OPTION SALES TAX.
51.9    Subdivision 1. Authorization; rates. Notwithstanding section 297A.99,
51.10subdivisions 2, 3, and 5, or 477A.016, or any other law, a county board may, by resolution,
51.11impose a general sales tax of one-half of one percent on sales and uses taxable under this
51.12chapter. In addition, an excise tax of $20 per motor vehicle is imposed on motor vehicles,
51.13purchased or acquired from any person engaged within the county in the business of selling
51.14motor vehicles at retail if a county imposes a local sales and use tax under this section.
51.15    Subd. 2. Application of election requirement. (a) Imposition of the tax under this
51.16section is not subject to the requirements of section 297A.99, subdivision 3.
51.17(b) Before imposing the tax under this section, the county must publish a notice of
51.18its intention to impose the tax and the date and time of a hearing to obtain public comment
51.19on the matter. The notice must be published in the official newspaper of the county, or
51.20in a newspaper of general circulation in the county. The notice must be published at
51.21least 14 days before the date of the hearing, but not more than 28 days. Following the
51.22public hearing the county board may determine to take no further action, or may adopt a
51.23resolution imposing the tax.
51.24(c) A county may impose the tax only upon obtaining the approval of the majority
51.25of voters voting on the question of imposing the tax, if a petition requesting a vote on
51.26imposition of the tax is signed by voters equal to the greater of (1) 500, or (2) ten percent
51.27of the votes cast in the county at the last general election is filed with the county auditor
51.28within 30 days after the public hearing. The vote on the tax may be held at a general or
51.29special election. The commissioner of revenue shall prepare a suggested form of the
51.30question to be presented at the election.
51.31    Subd. 3. Use of revenues. Revenues from the tax imposed under this section
51.32must first be used to fund obligations under section 297A.9945. Remaining revenues
51.33are deposited in the county general fund.
52.1    Subd. 4. Administration, collection, and enforcement. The administration,
52.2collection, and enforcement of the provisions in section 297A.99, subdivisions 4, and 6 to
52.312, apply to a tax imposed under this section.
52.4    Subd. 5. Termination. A county may terminate a tax imposed under this section
52.5upon resolution of the county board and notification to the commissioner of revenue, if
52.6all obligations under section 297A.9945 have been paid.
52.7EFFECTIVE DATE.This section is effective the day following final enactment.

52.8    Sec. 7. [297A.9945] EFFECT ON EXISTING LOCAL SALES TAXES;
52.9SATISFACTION OF PREEXISTING OBLIGATIONS.
52.10    Subdivision 1. Preemption of preexisting local sales taxes. (a) Notwithstanding
52.11section 297A.99 or any other law or local ordinance to the contrary, all general local
52.12sales and use taxes in a county or a part of a county is preempted on the day that a
52.13county local sales tax under section 297A.994 takes effect, except the following taxes
52.14are not preempted:
52.15(1) a local tax imposed under section 297A.992 or 297A.993;
52.16(2) a local sales tax authorized by special law in a city of the first class; and
52.17(3) a local sales tax authorized by a special law in a city with a population in 2007 of
52.18at least 100,000, provided that it complies with paragraph (c).
52.19(b) A local sales tax that is imposed by a city located in two or more counties is
52.20preempted if one or more counties in which the city is located impose the county tax. A
52.21replacement tax must be imposed under subdivision 6 in any portion of the city located in
52.22a county that has not imposed the tax under section 297A.994.
52.23(c) If a city with a population in 2007 of at least 100,000 would like to maintain an
52.24existing local sales tax, the city council must pass a resolution to that effect within two
52.25months of the enactment of this section. The city council must provide a copy of the
52.26resolution to the commissioner of revenue and to the county in which the city is located
52.27within five business days of the passage of the resolution.
52.28    Subd. 2. County payment to cities; forgone sales tax revenue. (a) If a local
52.29sales tax imposed in a city located partially or totally within a county is preempted under
52.30subdivision 1, the county shall pay a portion of its local sales tax revenues, as provided
52.31under subdivision 4 or 5, to the city to fund obligations allowed under the law authorizing
52.32the city tax. The county must make these payments to the city within five business days
52.33after it receives the revenues from the commissioner.
53.1(b) If the local sales tax was imposed under a joint powers agreement in cities
53.2located in more than one county, the share of the obligation to be funded by the county
53.3must be determined under subdivision 5.
53.4(c) The requirement to make these payments ceases on the earliest of the following:
53.5(1) the date on which the city tax was required to expire under the special law
53.6authorizing it;
53.7(2) when the city has received sufficient revenues from its tax and from payments
53.8under this section to pay in full or to defease debt obligations issued by the city under the
53.9law authorizing the city sales tax and to pay any additional spending obligations allowed
53.10under the special law and not funded by the issuance of debt obligations; or
53.11(3) the city becomes a city of the first class and imposes a city sales tax.
53.12    Subd. 3. Dedication of tax to fund county projects. If a county imposed local
53.13sales tax is preempted under subdivision 1, the revenues from the tax imposed under
53.14section 297A.994 are pledged first to pay and secure the bond obligations secured by and
53.15to be paid with the revenues from the preempted county sales tax.
53.16    Subd. 4. Calculation of forgone revenue in cities located entirely within a
53.17county. For purposes of subdivision 2, the forgone revenue to be paid to the city located
53.18entirely in a county imposing a tax under section 297A.994 is calculated as follows:
53.19(1) in the first 12 months after the tax is preempted, the county shall make quarterly
53.20payments to a city entirely located within the county equal to the amount that the city
53.21received from the commissioner of revenue from the preempted tax in the corresponding
53.22quarter in the previous year, multiplied by a percentage equal to the percentage change in
53.23total state sales tax revenue in the previous quarter compared to the total state sales tax
53.24revenue for the fifth preceding quarter; and
53.25(2) in subsequent years, the county shall make quarterly payments to the city equal
53.26to the payment made in the corresponding quarter in the previous year, multiplied by the
53.27ratio of the total quarterly remittance to the county in the current year compared to the
53.28total quarterly remittance to the county in the previous year.
53.29    Subd. 5. Calculation of forgone revenue in cities located partially within a
53.30county. (a) For purposes of subdivision 2, the forgone revenue to be paid to the city
53.31located partially in a county imposing a tax under section 297A.994 is calculated as
53.32provided in this subdivision.
53.33(b) The commissioner of revenue shall determine the percentage of the city's local
53.34sales tax revenue attributable to transactions located in the county. The commissioner
53.35may consult with the county and the city to determine a reasonable percentage, or the
53.36commissioner may set the percentage equal to the percentage of the city's market value
54.1for the most recently available assessment year of class 3 property, except utility real and
54.2personal property located in the county. The sum of the percentage of a city's local sales
54.3tax revenue attributable to each county in which the city is located must equal 100 percent.
54.4The determination of the commissioner is final.
54.5(c) In the first 12 months after the tax is preempted, the county shall make quarterly
54.6payments to a city partially located within the county equal to the amount that the city
54.7received from the commissioner from the preempted tax in the corresponding quarter in
54.8the previous year, multiplied by (1) a percentage equal to one plus the percentage change
54.9in total state sales tax revenue in the previous quarter compared to the total state sales tax
54.10revenue for the fifth preceding quarter, and (2) one plus the percentage calculated in
54.11paragraph (b).
54.12(d) In subsequent years, the county shall make quarterly payments to the city equal
54.13to the payment made in the corresponding quarter in the previous year multiplied by the
54.14ratio of the total quarterly remittance to the county in the current year compared to the
54.15total quarterly remittance to the county in the previous year.
54.16(e) A county's share of a city's obligations from the special law authorizing the city's
54.17sales tax is equal to the total obligation under the special law multiplied by one plus the
54.18percentage determined under paragraph (b).
54.19    Subd. 6. Establishment of special sales tax districts within certain cities. (a)
54.20For any city located in two or more counties, if at least one county imposes a county
54.21sales tax under subdivision 1, and at least one county does not impose a county sales tax,
54.22a special sales tax district is established in the portion of the city that is not subject to
54.23a county sales tax.
54.24(b) The governing body of the city is the governing body of the special taxing district
54.25and the special taxing district shall impose a replacement local sales tax by resolution
54.26to take effect upon the preemption of the city's sales tax under subdivision 1. The
54.27replacement tax must be imposed at the same rate as the city tax it replaces. Revenues
54.28from the replacement tax are pledged to and may only be used for the purposes permitted
54.29by law for the city sales tax, which it replaces. The authority to impose this tax expires
54.30upon the city's receipt of sufficient revenues to pay the obligations to which the city sales
54.31tax was pledged and other spending permitted by the law authorizing imposition of the
54.32city sales tax from the sum of the following:
54.33(1) the city sales tax;
54.34(2) county payments of forgone sales tax revenues under this section; and
54.35(3) the special taxing district sales tax.
54.36EFFECTIVE DATE.This section is effective the day following final enactment.

55.1    Sec. 8. Minnesota Statutes 2008, section 477A.0124, is amended by adding a
55.2subdivision to read:
55.3    Subd. 6. County program aid. (a) For calendar year 2010 and thereafter, a county's
55.4program aid under this section is equal to (1) its county program aid amount certified for
55.5aids payable in 2009 under this section, minus (2) an amount determined under paragraph
55.6(b) or (c). A county's program aid shall not be less than zero.
55.7(b) For a county that does not impose a tax under section 297A.994, the amount
55.8subtracted under paragraph (a) is equal to 3.58 percent of the county's 2009 levy plus aid
55.9revenue base. The "2009 levy plus aid revenue base" for a county is equal to the sum of
55.10the county's certified property tax levy for taxes payable in 2009 plus the amount the
55.11county was certified to receive in county program aid in 2009 under this section and
55.12the amount the county was certified to receive in taconite aids in 2009 under sections
55.13298.28 and 292.282, including any aid that was required to be placed in a special fund for
55.14expenditure in the next succeeding year.
55.15(c) For a county that imposes a tax under section 297A.994, the amount subtracted
55.16under paragraph (a) is equal to (1) 50 percent of its net sales tax revenue for the preceding
55.1712-month period in excess of the greater of (i) $70,000, or (ii) $7 per capita, plus (2) 25
55.18percent of its net sales tax revenue for the preceding 12-month period in excess of the
55.19greater of (i) $170,000, or (ii) $17 per capita.
55.20(d) For purposes of this subdivision, "net sales tax revenue for the preceding
55.2112-month period" means the sales tax revenue for the county for the 12-month period
55.22ending July 1 of the year in which the aid under this section is certified minus its estimated
55.23existing obligations under section 297A.9945 for the year in which the aid is paid. For
55.24the first two years in which the aid is offset under this paragraph, the commissioner of
55.25revenue shall estimate the offset based on available data regarding sales tax collections in
55.26the county. Beginning with the third year in which the aid is offset under this paragraph,
55.27the offset will be based on actual sales tax collections in the county in the 12-month period
55.28ending July 1 of the year in which the aid is certified.
55.29EFFECTIVE DATE.This section is effective for aids payable in calendar year
55.302010 and thereafter.

55.31    Sec. 9. Minnesota Statutes 2008, section 477A.03, subdivision 2b, is amended to read:
55.32    Subd. 2b. Counties. (a) For aids payable in 2009 2010 and thereafter, in addition
55.33to the total aid payable under section 477A.0124, subdivision 3, is $111,500,000 minus
55.34one-half of the total aid amount determined under section 477A.0124, subdivision 5,
55.35paragraph (b), subject to adjustment in subdivision 5. Each calendar year, 477A.0124,
56.1 $500,000 shall be retained by is appropriated to the commissioner of revenue to make
56.2reimbursements to the commissioner of finance for payments made under section 611.27,
56.3$357,000 is appropriated to the commissioner of revenue to make reimbursements to the
56.4commissioner of finance for the preparation of local impact notes under section 3.987, and
56.5$7,000 is appropriated to the commissioner of revenue to reimburse the commissioner
56.6of education for the preparation of local impact notes for school districts under section
56.73.987. For calendar year 2004, the amount shall be in addition to the payments authorized
56.8under section 477A.0124, subdivision 1. For calendar year 2005 and subsequent
56.9years, the amount shall be deducted from the appropriation under this paragraph. The
56.10reimbursements shall be to defray the additional costs associated with court-ordered
56.11counsel under section 611.27. The commissioner of finance shall annually use at least
56.12$150,000 of the $357,000 appropriation to contract with the representative associations for
56.13counties, cities, towns, and school districts to establish a local impact network of political
56.14subdivisions for preparing local impact notes that provide information to the legislature as
56.15provided in section 270C.991, subdivision 7. Any retained appropriated amounts not used
56.16for reimbursement in a year shall be included in the next distribution of county need aid
56.17that is certified to the county auditors for the purpose of property tax reduction for the next
56.18taxes payable year. under this subdivision shall be returned to the general fund.
56.19    (b) For aids payable in 2009 and thereafter, the total aid under section 477A.0124,
56.20subdivision 4 , is $116,132,923 minus one-half of the total aid amount determined under
56.21section 477A.0124, subdivision 5, paragraph (b), subject to adjustment in subdivision
56.225. The commissioner of finance shall bill the commissioner of revenue for the cost of
56.23preparation of local impact notes as required by section 3.987, not to exceed $207,000 in
56.24fiscal year 2004 and thereafter. The commissioner of education shall bill the commissioner
56.25of revenue for the cost of preparation of local impact notes for school districts as required
56.26by section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner
56.27of revenue shall deduct the amounts billed under this paragraph from the appropriation
56.28under this paragraph. The amounts deducted are appropriated to the commissioner of
56.29finance and the commissioner of education for the preparation of local impact notes.
56.30EFFECTIVE DATE.This section is effective for aids payable in calendar year
56.312010 and thereafter.

56.32    Sec. 10. REPEALER.
56.33(a) Minnesota Statutes 2008, section 477A.0124, subdivisions 3, 4, and 5, are
56.34repealed.
56.35(b) Laws 2008, chapter 366, article 7, section 18, is repealed.
57.1EFFECTIVE DATE.Paragraph (a) is effective for aids payable in calendar year
57.22010 and thereafter. Paragraph (b) is effective the day following final enactment.


57.6    Section 1. [6.90] COUNCIL ON LOCAL RESULTS AND INNOVATION.
57.7    Subdivision 1. Creation. The Council on Local Results and Innovation consists of
57.811 members, as follows:
57.9(1) the state auditor;
57.10(2) two persons who are not members of the legislature, appointed by the chair of the
57.11Property and Local Sales Tax Division of the house of representatives Taxes Committee;
57.12(3) two persons who are not members of the legislature, appointed by the designated
57.13lead minority member of the Property and Local Sales Tax Division of the house of
57.14representatives Taxes Committee;
57.15(4) two persons who are not members of the legislature, appointed by the chair of
57.16the Taxes Division on Property Taxes of the senate Taxes Committee;
57.17(5) two persons who are not members of the legislature, appointed by the designated
57.18lead minority member of the Taxes Division on Property Taxes of the senate Taxes
57.19Committee;
57.20(6) one person who is not a member of the legislature, appointed by the Association
57.21of Minnesota Counties; and
57.22(7) one person who is not a member of the legislature, appointed by the League
57.23of Minnesota Cities.
57.24Each appointment under clauses (2) to (5) must include one person with expertise
57.25or interest in county government and one person with expertise or interest in city
57.26government. The appointing authorities must use their best efforts to ensure that a majority
57.27of council members have experience with local performance measurement systems. The
57.28membership of the council must include geographically balanced representation as well as
57.29representation balanced between large and small jurisdictions. The appointments under
57.30clauses (2) to (7) must be made within two months of the date of enactment.
57.31Appointees to the council under clauses (2) to (5) serve terms of four years, except
57.32that one of each of the initial appointments under clauses (2) to (5) shall serve a term of
57.33two years; each appointing agent must designate which appointee is serving the two-year
57.34term. Subsequent appointments for members appointed under clauses (2) to (5) must
57.35be made by the council, including appointments to replace any appointees who might
57.36resign from the council prior to completion of their term. Appointees under clauses (2) to
58.1(5) are not eligible to vote on appointing their successor, nor on the successors of other
58.2appointees whose terms are expiring contemporaneously. In making appointments, the
58.3council shall make all possible efforts to reflect the geographical distribution and meet the
58.4qualifications of appointees required of the initial appointees. Subsequent appointments
58.5for members appointed under clauses (6) and (7) must be made by the original appointing
58.6authority. Appointees to the council under clauses (2) to (7) may serve no more than two
58.7consecutive terms.
58.8    Subd. 2. Duties. (a) By February 15, 2010, the council shall develop a standard
58.9set of approximately ten performance measures for counties and ten performance
58.10measures for cities that will aid residents, taxpayers, and state and local elected officials
58.11in determining the efficacy of counties and cities in providing services, and measure
58.12residents' opinions of those services. In developing its measures, the council must solicit
58.13input from private citizens. Counties and cities that elect to participate in the standard
58.14measures system shall report their results to the state auditor under section 6.91, who
58.15shall compile the results and make them available to all interested parties by publishing
58.16them on the auditor's Web site and report them to the legislative tax committees. Each
58.17year after the initial designation of performance measures, the council shall evaluate the
58.18usefulness of the standard set of performance measures and may revise the set by adding
58.19or removing measures as it deems appropriate.
58.20(b) By February 15, 2011, the council shall develop minimum standards for
58.21comprehensive performance measurement systems, which may vary by size and type
58.22of governing jurisdiction.
58.23(c) In addition to its specific duties under paragraphs (a) and (b), the council
58.24shall generally promote the use of performance measurement for governmental entities
58.25across the state and shall serve as a resource for all governmental entities seeking to
58.26implement a system of local performance measurement. The council may highlight and
58.27promote systems that are innovative, or are ones that it deems to be best practices of local
58.28performance measurement systems across the state and nation. The council should give
58.29preference in its recommendations to systems that are results-oriented. The council may,
58.30with the cooperation of the state auditor, establish and foster a collaborative network
58.31of practitioners of local performance measurement systems. The council may support
58.32the Association of Minnesota Counties and the League of Minnesota Cities to seek and
58.33receive private funding to provide expert technical assistance to local governments for
58.34the purposes of replicating best practices.
58.35    Subd. 3. Reports. (a) The council shall report its initial set of standard performance
58.36measures to the Property and Local Sales Tax Division of the house of representatives
59.1Taxes Committee and the Taxes Division on Property Taxes of the senate Taxes Committee
59.2by February 28, 2010.
59.3(b) By February 1 of each subsequent year, the council shall report to the committees
59.4with jurisdiction over taxes in the house of representatives and the senate on participation
59.5in and results of the performance measurement system, along with any revisions in the
59.6standard set of performance measures for the upcoming year. These reports may be made
59.7by the state auditor in lieu of the council if agreed to by the auditor and the council.
59.8    Subd. 4. Operation of council. (a) The state auditor shall convene the initial
59.9meeting of the council.
59.10(b) The chair of the council shall be elected by the members. Once elected, a chair
59.11shall serve a term of two years.
59.12(c) Members of the council serve without compensation.
59.13(d) Council members shall share and rotate responsibilities for administrative
59.14support of the council.
59.15(e) Chapter 13D does not apply to meetings of the council. Meetings of the council
59.16must be open to the public and the council must provide notice of a meeting on the state
59.17auditor's Web site at least seven days before the meeting. A meeting of the council occurs
59.18when a quorum is present.
59.19(f) The council must meet at least two times prior to the initial release of the standard
59.20set of measurements. After the initial set has been developed, the council must meet a
59.21minimum of once per year.
59.22    Subd. 5. Termination. The council expires on January 1, 2019.
59.23EFFECTIVE DATE.This section is effective the day following final enactment.

59.24    Sec. 2. [6.91] LOCAL PERFORMANCE MEASUREMENT AND REPORTING.
59.25    Subdivision 1. Reports of local performance measures. (a) A county or city that
59.26elects to participate in the standard measures program must report its results to its citizens
59.27annually through publication, direct mailing, posting on the jurisdiction's Web site, or
59.28through a presentation at the jurisdiction's truth-in-taxation hearing under section 275.065.
59.29(b) Each year, jurisdictions participating in the local performance measurement
59.30and improvement program must file a report with the state auditor by July 1, in a form
59.31prescribed by the auditor. All reports must include a declaration that the jurisdiction has
59.32complied with, or will have complied with by the end of the year, the requirement in
59.33paragraph (a). For jurisdictions participating in the standard measures program, the report
59.34shall consist of the jurisdiction's results for the standard set of performance measures
59.35under section 6.90, subdivision 2, paragraph (a). In 2011, jurisdictions participating in the
60.1comprehensive performance measurement program must submit a resolution approved by
60.2its local governing body indicating that it either has implemented or is in the process of
60.3implementing a local performance measurement system that meets the minimum standards
60.4specified by the council under section 6.90, subdivision 2, paragraph (b). In 2012 and
60.5thereafter, jurisdictions participating in the comprehensive performance measurement
60.6program must submit a statement approved by its local governing body affirming that
60.7it has implemented a local performance measurement system that meets the minimum
60.8standards specified by the council under section 6.90, subdivision 2, paragraph (b).
60.9    Subd. 2. Benefits of participation. (a) A county or city that elects to participate in
60.10the standard measures program for 2010 is: (1) eligible for per capita reimbursement of
60.11$0.25 per capita in 2011, but not to exceed $25,000 for any government entity; (2) exempt
60.12from levy limits under sections 275.70 to 275.74 for taxes payable in 2011, if levy limits
60.13are in effect; and (3) exempt from the truth-in-taxation public hearing requirement under
60.14section 275.065, subdivision 6, for taxes payable in 2011, if the hearing requirement is
60.15in effect.
60.16(b) Any county or city that elects to participate in the standard measures program for
60.172011 is eligible for per capita reimbursement of $0.25 per capita in 2012, but not to exceed
60.18$25,000 for any government entity. Any jurisdiction participating in the comprehensive
60.19performance measurement program is exempt from levy limits under sections 275.70
60.20to 275.74 for taxes payable in 2012 if levy limits are in effect, and is exempt from the
60.21truth-in-taxation public hearing requirement under section 275.065, subdivision 6, for
60.22taxes payable in 2012, if the hearing requirement is in effect.
60.23(c) Any county or city that elects to participate in the standard measures program
60.24for 2012 or any year thereafter is eligible for per capita reimbursement of $0.25 per
60.25capita in the following year, but not to exceed $25,000 for any government entity. Any
60.26jurisdiction participating in the comprehensive performance measurement program for
60.272012 or any year thereafter is exempt from levy limits under sections 275.70 to 275.74
60.28for taxes payable in the following year, if levy limits are in effect, and is exempt from
60.29the truth-in-taxation public hearing requirement under section 275.065, subdivision 6, for
60.30taxes payable in the following year, if the hearing requirement is in effect.
60.31    Subd. 3. Certification of participation. (a) The state auditor shall certify to
60.32the commissioner of revenue by August 1 of each year the counties and cities that are
60.33participating in the standard measures program and the comprehensive performance
60.34measurement program.
61.1(b) The commissioner of revenue shall make per capita aid payments under this
61.2section on the second payment date specified in section 477A.015, in the same year that
61.3the measurements were reported.
61.4(c) The commissioner of revenue shall notify each county and city that is entitled to
61.5exemption from levy limits by August 10 of each levy year.
61.6    Subd. 4. Appropriation. (a) The amount necessary to fund obligations to counties
61.7under subdivision 2 is annually appropriated from the general fund to the commissioner of
61.8revenue.
61.9(b) The amount necessary to fund obligations to cities under subdivision 2 is
61.10annually appropriated from the general fund to the commissioner of revenue.
61.11(c) The sum of $6,000 in fiscal year 2010 and $2,000 in each fiscal year thereafter is
61.12annually appropriated from the general fund to the state auditor to carry out the auditor's
61.13responsibilities under sections 6.90 to 6.91.
61.14EFFECTIVE DATE.This section is effective December 31, 2009.

61.15    Sec. 3. Minnesota Statutes 2008, section 134.34, subdivision 1, is amended to read:
61.16    Subdivision 1. Local support levels. (a) A regional library basic system support
61.17grant shall be made to any regional public library system where there are at least three
61.18participating counties and where each participating city and county is providing for
61.19public library service support the lesser of (a) (1) an amount equivalent to .82 percent
61.20of the average of the adjusted net tax capacity of the taxable property of that city or
61.21county, as determined by the commissioner of revenue for the second, third, and fourth
61.22year preceding that calendar year in 1991 and later years or (b) (2) a per capita amount
61.23calculated under the provisions of this subdivision. The per capita amount is established
61.24for calendar year 1993 as $7.62. In succeeding calendar years, the per capita amount shall
61.25be increased by a percentage equal to one-half of the percentage by which the total state
61.26adjusted net tax capacity of property as determined by the commissioner of revenue for
61.27the second year preceding that calendar year increases over that total adjusted net tax
61.28capacity for the third year preceding that calendar year.
61.29(b) The minimum level of support specified under this subdivision or subdivision 4
61.30shall be certified annually to the participating cities and counties by the Department of
61.31Education. If a city or county chooses to reduce its local support in accordance with
61.32subdivision 4, paragraph (b) or (c), it shall notify its regional public library system. The
61.33regional public library system shall notify the Department of Education that a revised
61.34certification is required. The revised minimum level of support shall be certified to the
61.35city or county by the Department of Education.
62.1(c) A city which is a part of a regional public library system shall not be required to
62.2provide this level of support if the property of that city is already taxable by the county
62.3for the support of that regional public library system. In no event shall the Department
62.4of Education require any city or county to provide a higher level of support than the
62.5level of support specified in this section in order for a system to qualify for a regional
62.6library basic system support grant. This section shall not be construed to prohibit a city
62.7or county from providing a higher level of support for public libraries than the level of
62.8support specified in this section.
62.9EFFECTIVE DATE.This section is effective for calendar years 2009 and
62.10thereafter, except that the change in paragraph (a) is effective for calendar years 2011
62.11and thereafter.

62.12    Sec. 4. Minnesota Statutes 2008, section 134.34, subdivision 4, is amended to read:
62.13    Subd. 4. Limitation. (a) A regional library basic system support grant shall not be
62.14made to a regional public library system for a participating city or county which decreases
62.15the dollar amount provided for support for operating purposes of public library service
62.16below the amount provided by it for the second or third preceding year, whichever is less.
62.17For purposes of this subdivision and subdivision 1, any funds provided under section
62.18473.757, subdivision 2 , for extending library hours of operation shall not be considered
62.19amounts provided by a city or county for support for operating purposes of public library
62.20service. This subdivision shall not apply to participating cities or counties where the
62.21adjusted net tax capacity of that city or county has decreased, if the dollar amount of the
62.22reduction in support is not greater than the dollar amount by which support would be
62.23decreased if the reduction in support were made in direct proportion to the decrease in
62.24adjusted net tax capacity.
62.25(b) In addition, in any calendar year in which a city's or county's aid under sections
62.26477A.011 to 477A.014, or credits under section 273.1384 are reduced after the city or
62.27county has certified its levy payable in that year, it may reduce its local support by the
62.28lesser of (1) ten percent, or (2) a percent equal to the percent the aid or credit reduction is
62.29of the city or county's revenue base as defined in paragraph (e), based on aids certified for
62.30the current calendar year. For calendar year 2009 only, the reduction under this paragraph
62.31shall be based on 2008 aid and credit reductions under the December 2008 unallotment, as
62.32well as any aid and credit reductions in calendar year 2009. For calendar year 2009 only,
62.33the commissioner of revenue shall calculate the reductions under this paragraph and certify
62.34them to the commissioner of education within 15 days of this provision becoming law.
63.1(c) In addition, in any payable year in which the total amounts certified for city or
63.2county aids under sections 477A.011 to 477A.014 are less than the total amounts paid
63.3under those sections in the previous calendar year, a city or county may reduce its local
63.4support by the lesser of (1) ten percent, or (2) a percentage equal to the ratio of (i) the
63.5difference between the sum of the aid it was paid under sections 477A.011 to 477A.014
63.6and the credit reimbursements it received under section 273.1384 in the previous calendar
63.7year and the aid it is certified to be paid in the current calendar year under sections
63.8477A.011 to 477A.014 and the credits estimated to be paid under section 273.1384, to (ii)
63.9its revenue base for the previous year, based on aids actually paid in the previous calendar
63.10year. The commissioner of revenue shall calculate the percent aid cut for each county and
63.11city under this paragraph and certify the percentage cuts to the commissioner of education
63.12by August 1 of the year prior to the year in which the reduced aids and credits are to be
63.13paid. The percentage of reduction related to reductions to credit reimbursements under
63.14section 273.1384 shall be based on the best estimation available as of July 30.
63.15(d) Notwithstanding paragraph (a), (b), or (c), no city or county shall reduce its
63.16support for public libraries below the minimum level specified in subdivision 1. No county
63.17may make a reduction under paragraph (b) or (c) in a year in which it is receiving local
63.18sales tax revenue under section 297A.994.
63.19(e) For purposes of this subdivision, "revenue base" means the sum of:
63.20(1) its levy for taxes payable in the current calendar year, including the levy on
63.21the fiscal disparities distribution under section 276A.06, subdivision 3, paragraph (a),
63.22or 473F.08, subdivision 3, paragraph (a);
63.23(2) its aid under sections 477A.011 to 477A.014 in the current calendar year; and
63.24(3) its taconite aid in the current calendar year under sections 298.28 and 298.282.
63.25(f) The sum of $21,000 in fiscal year 2010 and each fiscal year thereafter is
63.26appropriated from the general fund to the commissioner of education to carry out the
63.27additional responsibilities under this section.
63.28EFFECTIVE DATE.This section is effective for support in calendar year 2009 and
63.29thereafter for library grants paid in fiscal year 2010 and thereafter, except that the changes
63.30in paragraph (a) are effective for support in calendar year 2010 and thereafter.

63.31    Sec. 5. [256E.40] EQUITABLE FUNDING HEALTH AND HUMAN SERVICES
63.32REFORM.
63.33    Subdivision 1. Reform. The goals in reforming local funding of the health and
63.34human services delivery system is to:
63.35(1) sustain the funding of county provided services;
64.1(2) maintain Minnesota's ability to obtain federal funds to provide these services;
64.2(3) equalize and make transparent the demands that providing these services makes
64.3on the property tax system; and
64.4(4) encouraging local innovation and pilot programs using local revenues without
64.5the risk of long-term obligations.
64.6    Subd. 2. Consolidated program funding. (a) Each county is required to dedicate a
64.7portion of local property tax, determined under this section, to fund the local share of all
64.8health and human services programs and services required by state law. The commissioner
64.9of revenue shall provide estimates to the commissioner of human services of the expected
64.10revenue from this dedication in each county. The commissioner of human services shall
64.11devise a mechanism for collecting or allocating the sum of these dedications between
64.12programs as necessary to meet federal match requirements. Any contribution in excess
64.13of the amount needed to meet federal match requirements shall be spent on the various
64.14programs at the discretion of the county.
64.15(b) In 2012, the required dedication of a county's portion of its local property tax
64.16is equal to a uniform percentage of its adjusted net tax capacity for the most recently
64.17available year, limited as provided in paragraph (d). The commissioner of revenue shall
64.18determine the percentage so that the total amount dedicated in all counties in 2012, after
64.19the limits in paragraph (d), is equal to the total estimated amount of local source revenues
64.20that all counties were required to pay for these programs and services in calendar year
64.212011. The commissioner of human services shall provide the commissioner of revenue
64.22with the information necessary to make this calculation by July 30, 2011.
64.23(c) In 2013 and future years, the required dedication of a county's portion of its local
64.24property tax is equal to a percentage of its adjusted net tax capacity adjusted as required in
64.25paragraph (d). The percentage is the same as the percentage used in the previous year.
64.26(d) In calendar year 2012, a county's revenue dedication under paragraph (b) cannot
64.27be greater than the sum of (1) its estimated amount of required local source revenues for
64.28these programs and services in calendar year 2011, plus (2) one percent of its calendar
64.29year 2011 property tax levy. In calendar year 2013 and future years, a county's revenue
64.30dedication under paragraph (c) cannot be greater than the sum of (1) its revenue dedicated
64.31under this subdivision in the previous year, multiplied by one plus its percentage increase
64.32in its adjusted net tax capacity for the most recently available year, plus (2) one percent of
64.33its property tax levy from the previous year.
64.34    Subd. 3. County discretionary spending. Nothing in this section shall be construed
64.35as prohibiting counties from spending local source revenues on health and human services
64.36in excess of the amount calculated under subdivision 2 but a county may not be required
65.1to continue spending local source revenue at a higher level than the amount determined in
65.2subdivision 2.
65.3EFFECTIVE DATE.This section is effective for property tax levies payable in
65.42012 and thereafter and program spending beginning January 1, 2012.

65.5    Sec. 6. [270C.991] PROPERTY TAX SYSTEM BENCHMARKS AND
65.6CRITICAL INDICATORS.
65.7    Subdivision 1. Purpose. State policy makers should be provided with the tools to
65.8create a more accountable and efficient property tax system. This section provides the
65.9principles and available tools necessary to work toward achieving that goal.
65.10    Subd. 2. Property tax principles. To better evaluate the various property tax
65.11proposals that come before the legislature, the following basic property tax principles
65.12should be taken into consideration. The property taxes proposed should be:
65.13(1) transparent and understandable;
65.14(2) simple and efficient;
65.15(3) equitable;
65.16(4) stable and predictable;
65.17(5) compliance and accountability;
65.18(6) competitive, both nationally and globally; and
65.19(7) responsive to economic conditions.
65.20    Subd. 3. Major indicators. There are many different types of indicators available to
65.21legislators to evaluate tax legislation. Indicators are useful to have available as benchmarks
65.22when legislators are contemplating changes. Each tool has its own limitation, and no one
65.23tool is perfect or should be used independently. Some of the tools measure the global
65.24characteristics of the entire tax system, while others are only a measure of the property tax
65.25impacts and its administration. The following is a list of the available major indicators:
65.26(1) property tax principles scale, the components of which are listed in subdivision
65.272, as they relate to the various features of the property tax system;
65.28(2) price of government report, as required under section 16A.102;
65.29(3) tax incidence report, as required under section 270C.13;
65.30(4) tax expenditure budget and report, as required under section 270C.11;
65.31(5) state tax rankings;
65.32(6) property tax levy plus aid data, and market value and net tax capacity data, by
65.33taxing district for current and past years;
65.34(7) effective tax rate (tax as a percent of market value) and the equalized effective
65.35tax rate (effective tax rate adjusted for assessment differences);
66.1(8) assessment sales ratio study, as required under section 127A.48;
66.2(9) "Voss" database, which matches homeowner property taxes and household
66.3income;
66.4(10) revenue estimates under section 270C.11, subdivision 5, and state fiscal notes
66.5under section 477A.03, subdivision 2b; and
66.6(11) local impact notes, with improved local analysis as described in subdivision 7.
66.7    Subd. 4. Property tax working group. (a) A property tax working group is
66.8established as provided in this subdivision. The goals of the working group are:
66.9(1) to investigate ways to simplify the property tax system and make advisory
66.10recommendations on ways to make the system more understandable;
66.11(2) to reexamine the property tax calendar to determine what changes could be made
66.12to shorten the two-year cycle from assessment through property tax collection; and
66.13(3) to determine the cost versus the benefits of the various property tax components,
66.14including property classifications, credits, aids, exclusions, exemptions, and abatements,
66.15and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
66.16(b) The 12-member working group shall consist of the following members:
66.17(1) two state representatives, both appointed by the chair of the house of
66.18representatives Taxes Committee, one from the majority party and one from the minority
66.19party;
66.20(2) two senators, both appointed by the chair of the senate Taxes Committee, one
66.21from the majority party and one from the minority party;
66.22(3) the commissioner of revenue, or designee;
66.23(4) one person, appointed by the Association of Minnesota Counties;
66.24(5) one person, appointed by the League of Minnesota Cities;
66.25(6) one person, appointed by the Minnesota Association of Townships;
66.26(7) one person, appointed by the Minnesota Chamber of Commerce;
66.27(8) one person, appointed by the Minnesota Association of Assessing Officers; and
66.28(9) two homeowners, one who is under 65 years of age, and one who is 65 years of
66.29age or older, both appointed by the commissioner of revenue.
66.30The commissioner of revenue shall chair the initial meeting, and the working
66.31group shall elect a chair at that initial meeting. The working group will meet at the call
66.32of the chair. Members of the working group shall serve without compensation. The
66.33commissioner of revenue must provide administrative support to the working group.
66.34Chapter 13D does not apply to meetings of the working group. Meetings of the working
66.35group must be open to the public and the working group must provide notice of a meeting
67.1to potentially interested persons at least seven days before the meeting. A meeting of the
67.2council occurs when a quorum is present.
67.3(c) The working group shall make its advisory recommendations to the chairs of the
67.4house of representatives and senate Taxes Committees on or before February 1, 2011, at
67.5which time the working group shall be finished and this subdivision expires. The advisory
67.6recommendations should be reviewed by the Taxes Committee under subdivision 5.
67.7    Subd. 5. Taxes Committee review and resolution. On or before March 1,
67.82011, and every two years thereafter, the house of representatives and senate Taxes
67.9Committees must review the major indicators as contained in subdivision 3, and ascertain
67.10the accountability and efficiency of the property tax system. The house of representatives
67.11and senate Taxes Committees shall prepare a resolution on targets and benchmarks for
67.12use during the current biennium.
67.13    Subd. 6. Department of Revenue; revenue estimates. As provided under
67.14section 270C.11, subdivision 5, the Department of Revenue is required to prepare an
67.15estimate of the effect on the state's tax revenues which result from the passage of a
67.16legislative bill establishing, extending, or restricting a tax expenditure. Beginning
67.17with the 2010 legislative session, those revenue estimates must also identify how the
67.18property tax principles contained in subdivision 2 apply to the proposed tax changes. The
67.19commissioner of revenue shall develop a scale for measuring the appropriate principles
67.20for each proposed change. The department shall quantify the effects, if possible, or at a
67.21minimum, shall identify the relevant factors so that legislators are aware of possible
67.22outcomes, including administrative difficulties and cost. The interaction of property tax
67.23shifting should be identified and quantified to the degree possible.
67.24    Subd. 7. Local impact notes. Local impact notes are statements that provide
67.25information about changes in local government responsibility, administration, and cost due
67.26to changes in state law. The local impact note process seeks the participation of political
67.27subdivisions to gather information as needed by the legislature. The local impact network
67.28of political subdivisions shall consist of representation from associations from Minnesota
67.29counties, cities, towns, and school districts, and other members as needed. They shall,
67.30among other things, work with the legislature and the commissioner of finance to analyze:
67.31(1) changes in tax revenues for local governments;
67.32(2) changes in expenditures for local governments, including program and
67.33administration costs; and
67.34(3) incidences of tax shifting, including identifying the target audience (taxpayers
67.35who will benefit from the tax shift) and the impact audience (taxpayers who will bear the
67.36burden of the tax shift).
68.1For tax bills the local impact network of political subdivisions shall rate the impact
68.2on Minnesota's tax system using the tax principles contained in subdivision 2.
68.3Some of the cost for preparing this information shall be distributed to the local
68.4impact network as provided under section 477A.03, subdivision 2b, paragraph (b).
68.5    Subd. 8. Appropriation. The sum of $30,000 in fiscal year 2010 and $25,000 in
68.6each fiscal year thereafter is appropriated from the general fund to the commissioner of
68.7revenue to carry out the commissioner's added responsibilities under subdivision 6.
68.8EFFECTIVE DATE.This section is effective the day following final enactment.

68.9    Sec. 7. Minnesota Statutes 2008, section 273.1384, is amended by adding a subdivision
68.10to read:
68.11    Subd. 3a. Reimbursement reductions. (a) Each year, each county's reimbursement
68.12under this section shall be reduced by a uniform percentage so that the total reduction
68.13in reimbursements equals the sum of: (i) the amount appropriated under section 6.91,
68.14subdivision 4, paragraph (a); (ii) one-half of the total amount appropriated under section
68.156.91, subdivision 4, paragraph (c); and (iii) one-half of the total amount appropriated
68.16under section 270C.991, subdivision 8.
68.17(b) Each year, each city's reimbursement under this section shall be reduced by a
68.18uniform percentage so that the total reduction in reimbursements equals the sum of: (i)
68.19the amount appropriated under section 6.91, subdivision 4, paragraph (b); (ii) one-half of
68.20the total amount appropriated under section 6.91, subdivision 4, paragraph (c); and (iii)
68.21one-half of the total amount appropriated under section 270C.991, subdivision 8.
68.22(c) Each year, each school district's reimbursement under this section shall be
68.23reduced by a uniform percentage so that the total reduction in reimbursements equals the
68.24amount appropriated under section 134.34, subdivision 4.
68.25EFFECTIVE DATE.This section is effective for aids payable in 2009 and
68.26thereafter.

68.27    Sec. 8. [275.77] TEMPORARY SUSPENSION OF NEW OR INCREASED
68.28MAINTENANCE OF EFFORT AND MATCHING FUND REQUIREMENTS.
68.29    Subdivision 1. Definitions. For purposes of this section, the following terms have
68.30the meanings given them:
68.31(1) "maintenance of effort" means a requirement imposed on a political subdivision
68.32by state law to continue providing funding of a service or program at a given or increasing
68.33level based on its funding of the service and program in prior years;
69.1(2) "matching fund requirement" means a requirement imposed on a political
69.2subdivision by state law to fund a portion of a program or service but does not mean
69.3required nonstate contributions to state capital funded projects or other nonstate
69.4contributions required in order to receive a grant or loan the political subdivision has
69.5requested or applied for; and
69.6(3) "political subdivision" means a county, town, or statutory or home rule charter
69.7city.
69.8    Subd. 2. Temporary suspension. (a) Notwithstanding any other provision of law
69.9to the contrary, any new maintenance of effort or matching fund requirement enacted
69.10after January 1, 2009, that will require spending by a political subdivision shall not be
69.11effective until January 1, 2012.
69.12(b) Notwithstanding any other provision of law to the contrary, any changes to
69.13existing maintenance of effort or matching fund requirement enacted after January 1,
69.142009, that will require new spending by a political subdivision shall not be effective
69.15until January 1, 2012.
69.16(c) The suspension of changes to existing maintenance of effort and matching fund
69.17requirements under paragraph (b) does not apply if the spending is required by federal law
69.18and there would be a cost to the state budget without the change.
69.19EFFECTIVE DATE.This section is effective the day following final enactment.

69.20    Sec. 9. REPEALER.
69.21Minnesota Statutes 2008, sections 245.4835; 245.4932, subdivision 1; 246.54,
69.22subdivisions 1 and 2; 252.275, subdivision 3; 253B.045, subdivision 2; 254B.04,
69.23subdivision 1; 256.82, subdivision 2; 256.976; 256B.05, subdivision 1; 256B.0625,
69.24subdivisions 20 and 20a; 256B.0945, subdivisions 1, 2, 3, and 4; 256B.19, subdivision
69.251; 256D.03; 256D.053, subdivision 3; 256E.12, subdivision 3; 256F.10, subdivision 7;
69.26256F.13, subdivision 1; 256I.04; 256I.08; 256J.09, subdivisions 1, 2, and 3; and 256L.15,
69.27subdivision 4, are repealed.
69.28EFFECTIVE DATE.This section is effective January 1, 2012.


69.32    Section 1. Minnesota Statutes 2008, section 3.842, subdivision 4a, is amended to read:
69.33    Subd. 4a. Objections to rules. (a) For purposes of this subdivision, "committee"
69.34means the house of representatives policy committee or senate policy committee with
70.1primary jurisdiction over state governmental operations. The commission, the Legislative
70.2Commission on Mandate Reform, or a committee may object to a rule as provided in
70.3this subdivision. If the commission, the Legislative Commission on Mandate Reform,
70.4or a committee objects to all or some portion of a rule because the commission, the
70.5Legislative Commission on Mandate Reform, or a committee considers it to be beyond
70.6the procedural or substantive authority delegated to the agency, including a proposed rule
70.7submitted under section 14.15, subdivision 4, or 14.26, subdivision 3, paragraph (c), the
70.8commission, the Legislative Commission on Mandate Reform, or a committee may file
70.9that objection in the Office of the Secretary of State. The filed objection must contain a
70.10concise statement of the commission's, the Legislative Commission on Mandate Reform,
70.11or a committee's reasons for its action. An objection to a proposed rule submitted by the
70.12commission, the Legislative Commission on Mandate Reform, or a committee under
70.13section 14.15, subdivision 4, or 14.26, subdivision 3, paragraph (c), may not be filed
70.14before the rule is adopted.
70.15(b) The secretary of state shall affix to each objection a certification of the date and
70.16time of its filing and as soon after the objection is filed as practicable shall transmit a
70.17certified copy of it to the agency issuing the rule in question and to the revisor of statutes.
70.18The secretary of state shall also maintain a permanent register open to public inspection of
70.19all objections by the commission, the Legislative Commission on Mandate Reform, or
70.20a committee.
70.21(c) The commission, the Legislative Commission on Mandate Reform, or a
70.22committee shall publish and index an objection filed under this section in the next issue
70.23of the State Register. The revisor of statutes shall indicate the existence of the objection
70.24adjacent to the rule in question when that rule is published in Minnesota Rules.
70.25(d) Within 14 days after the filing of an objection by the commission, the Legislative
70.26Commission on Mandate Reform, or a committee to a rule, the issuing agency shall
70.27respond in writing to the objecting entity. After receipt of the response, the commission,
70.28the Legislative Commission on Mandate Reform, or a committee may withdraw or modify
70.29its objection.
70.30(e) After the filing of an objection by the commission, the Legislative Commission
70.31on Mandate Reform, or a committee that is not subsequently withdrawn, the burden is
70.32upon the agency in any proceeding for judicial review or for enforcement of the rule to
70.33establish that the whole or portion of the rule objected to is valid.
70.34(f) The failure of the commission, the Legislative Commission on Mandate Reform,
70.35or a committee to object to a rule is not an implied legislative authorization of its validity.
71.1(g) In accordance with sections 14.44 and 14.45, the commission, the Legislative
71.2Commission on Mandate Reform, or a committee may petition for a declaratory judgment
71.3to determine the validity of a rule objected to by the commission, the Legislative
71.4Commission on Mandate Reform, or a committee. The action must be started within two
71.5years after an objection is filed in the Office of the Secretary of State.
71.6(h) The commission, the Legislative Commission on Mandate Reform, or a
71.7committee may intervene in litigation arising from agency action. For purposes of this
71.8paragraph, agency action means the whole or part of a rule, or the failure to issue a rule.

71.9    Sec. 2. Minnesota Statutes 2008, section 3.843, is amended to read:
71.103.843 PUBLIC HEARINGS BY STATE AGENCIES.
71.11By a vote of a majority of its members, the commission or the Legislative
71.12Commission on Mandate Reform may request any agency issuing rules to hold a
71.13public hearing in respect to recommendations made under section 3.842, including
71.14recommendations made by the commission or the Legislative Commission on Mandate
71.15Reform to promote adequate and proper rules by that agency and recommendations
71.16contained in the commission's biennial report. The agency shall give notice as provided in
71.17section 14.14, subdivision 1, of a hearing under this section, to be conducted in accordance
71.18with sections 14.05 to 14.28. The hearing must be held not more than 60 days after receipt
71.19of the request or within any other longer time period specified by the commission or the
71.20Legislative Commission on Mandate Reform in the request.

71.21    Sec. 3. [3.99] LEGISLATIVE COMMISSION ON MANDATE REFORM;
71.22ESTABLISHED.
71.23    Subdivision 1. Established. The Legislative Commission on Mandate Reform is
71.24established as provided in this section, with the powers and duties given it in sections
71.253.842, subdivision 4a; 3.843; and 3.99 to 3.992.
71.26    Subd. 2. Membership. The commission consists of four senators appointed by the
71.27senate Subcommittee on Committees of the Committee on Rules and Administration,
71.28three senators appointed by the senate minority leader, four state representatives appointed
71.29by the speaker of the house, and three state representatives appointed by the house
71.30of representatives minority leader. The appointing authorities must ensure balanced
71.31geographic representation. Each appointing authority must make appointments as soon as
71.32possible.
71.33    Subd. 3. Terms; vacancies. Members of the commission serve for a two-year term
71.34beginning upon appointment and expiring upon appointment of a successor after the
72.1opening of the next regular session of the legislature in the odd-numbered year. A vacancy
72.2in the membership of the commission must be filled for the unexpired term in a manner
72.3that will preserve the representation established by this section.
72.4    Subd. 4. Chair. The commission must meet as soon as practicable after members
72.5are appointed in each odd-numbered year to elect its chair and other officers as it may
72.6determine necessary. A chair serves a two-year term, expiring in the odd-numbered year
72.7after a successor is elected. The chair must alternate biennially between the senate and the
72.8house of representatives.
72.9    Subd. 5. Compensation. Members may be reimbursed for their reasonable
72.10expenses as members of the legislature.
72.11    Subd. 6. Staff. The Legislative Coordinating Commission must provide
72.12administrative support to the commission, including secretarial services, record keeping,
72.13and grants administration.
72.14    Subd. 7. Meetings; procedures; tie votes. The first meeting of the biennium must
72.15be convened by the member designated by the senate majority leader if a senator is to chair
72.16the commission for the biennium, or by the speaker of the house if a state representative
72.17is to chair the commission for the biennium. The commission meets at the call of the
72.18chair. Commission action requires a positive vote of at least four house of representatives
72.19members and at least four senate members.
72.20    Subd. 8. Funding. The Legislative Coordinating Commission shall annually bill the
72.21commissioner of revenue for costs incurred by the Legislative Coordinating Commission
72.22in providing administrative support and to make the grants authorized by the Legislative
72.23Commission on Mandate Reform, in an amount not to exceed $100,000 per year. The
72.24commissioner of revenue shall deduct one-half of the certified costs from payments to
72.25counties under section 477A.03, subdivision 2b, and one-half of the certified costs from
72.26payments to cities under section 477A.03, subdivision 2a.

72.27    Sec. 4. [3.991] LEGISLATIVE COMMISSION ON MANDATE REFORM;
72.28REVIEW AND RECOMMENDATIONS TO LEGISLATURE.
72.29The Legislative Commission on Mandate Reform must solicit from local
72.30governments information on state laws and rules that local governments consider to be
72.31problematic mandates. The commission must review the mandates identified and consider
72.32why each mandate was enacted or adopted, whether the reason for it still exists, the costs
72.33to local governments to comply with the mandate, and whether repeal or modification
72.34of the mandate is appropriate. Before the beginning of each legislative session, the
73.1commission must prepare for introduction a bill to repeal or modify those laws or rules the
73.2commission determines are unnecessary.

73.3    Sec. 5. [3.992] LEGISLATIVE COMMISSION ON MANDATE REFORM;
73.4GRANTS.
73.5Upon recommendation of the Legislative Commission on Mandate Reform,
73.6the commissioner of revenue may make grants to the League of Minnesota Cities,
73.7the Association of Minnesota Counties, Minnesota Association of Townships, other
73.8organizations representing local governments, the Board of Regents of the University of
73.9Minnesota, the Board of Trustees of Minnesota State Colleges and Universities, or other
73.10accredited postsecondary institutions to research and make recommendations on mandate
73.11reform. The commissioner must specify the work to be done, the completion date, and
73.12the maximum grant amount, and may specify any other conditions the commissioner
73.13deems necessary or useful.

73.14    Sec. 6. [3.993] EXPIRATION.
73.15Sections 3.99 to 3.992 expire June 30, 2013.

73.16    Sec. 7. [14.128] EFFECTIVE DATE FOR RULES REQUIRING LOCAL
73.17IMPLEMENTATION.
73.18    Subdivision 1. Determination. An agency must determine if a local government
73.19will be required to adopt or amend an ordinance or other regulation to comply with a
73.20proposed agency rule. An agency must make this determination before the close of the
73.21hearing record or before the agency submits the record to the administrative law judge if
73.22there is no hearing. The administrative law judge must review and approve or disapprove
73.23the agency's determination. "Local government" means a town, county, or home rule
73.24charter or statutory city.
73.25    Subd. 2. Effective dates. If the agency determines that the proposed rule requires
73.26adoption or amendment of an ordinance or other regulation, or if the administrative law
73.27judge disapproves the agency's determination that the rule does not have this effect, the
73.28rule may not become effective until:
73.29(1) the next July 1 or January 1 after notice of final adoption is published in the
73.30State Register; or
73.31(2) a later date provided by law or specified in the proposed rule.
73.32    Subd. 3. Exceptions. Subdivision 2 does not apply:
73.33(1) to a rule adopted under section 14.388, 14.389, or 14.3895, or under another law
73.34specifying that the rulemaking procedures of this chapter do not apply;
74.1(2) if the administrative law judge approves an agency's determination that the rule
74.2has been proposed pursuant to a specific federal statutory or regulatory mandate that
74.3requires the rule to take effect before the date specified in subdivision 2; or
74.4(3) if the governor waives application of subdivision 2.

74.5    Sec. 8. Minnesota Statutes 2008, section 16C.28, subdivision 1a, is amended to read:
74.6    Subd. 1a. Establishment and purpose. (a) The state recognizes the importance of
74.7the inclusion of a best value contracting system for construction as an alternative to the
74.8current low-bid system of procurement. In order to accomplish that goal, state and local
74.9governmental entities shall be able to choose the best value system in different phases.
74.10    (b) "Best value" means the procurement method defined in section 16C.02,
74.11subdivision 4a.
74.12    (c) The following entities are eligible to participate in phase I:
74.13    (1) state agencies;
74.14    (2) counties;
74.15    (3) cities; and
74.16    (4) school districts with the highest 25 percent enrollment of students in the state.
74.17Phase I begins on July 1, 2007.
74.18    (d) The following entities are eligible to participate in phase II:
74.19    (1) those entities included in phase I; and
74.20    (2) school districts with the highest 50 percent enrollment of students in the state.
74.21Phase II begins two years from July 1, 2007.
74.22    (e) The following entities are eligible to participate in phase III:
74.23    (1) all entities included in phases I and II; and
74.24    (2) all other townships, school districts, and political subdivisions in the state.
74.25Phase III begins three years from July 1, 2007.
74.26    (f) The commissioner or any agency for which competitive bids or proposals are
74.27required may not use best value contracting as defined in section 16C.02, subdivision 4a,
74.28for more than one project annually, or 20 percent of its projects, whichever is greater, in
74.29each of the first three fiscal years in which best value construction contracting is used.

74.30    Sec. 9. Minnesota Statutes 2008, section 306.243, is amended by adding a subdivision
74.31to read:
74.32    Subd. 6. Abandonment; end of operation as cemetery. A county that has accepted
74.33responsibility for an abandoned cemetery may prohibit further burials in the abandoned
74.34cemetery, and may cease all acceptance of responsibility for new burials.

75.1    Sec. 10. Minnesota Statutes 2008, section 344.18, is amended to read:
75.2344.18 COMPENSATION OF VIEWERS.
75.3Fence viewers must be paid for their services by the person employing them at the
75.4rate of $15 each for each day's employment. $60 must be deposited with the town or city
75.5treasurer before the service is performed. Upon completion of the service, any of the $60
75.6not spent to compensate the fence viewers must be returned to the depositor. The town
75.7board may by resolution require the person employing the fence viewers to post a bond or
75.8other security acceptable to the board for the total estimated costs before the viewing takes
75.9place. The total estimated costs may include the cost of professional and other services,
75.10hearing costs, administrative costs, recording costs, and other costs and expenses which
75.11the town may incur in connection with the viewing.

75.12    Sec. 11. Minnesota Statutes 2008, section 365.28, is amended to read:
75.13365.28 PUBLIC BURIAL GROUND IS TOWN'S AFTER TEN YEARS.
75.14A tract of land in a town becomes town property after it has been used as a public
75.15burial ground for ten years if the tract is not owned by a cemetery association. The town
75.16board shall control the burial ground as it controls other town cemeteries. A town that has
75.17assumed ownership of a cemetery may prohibit further burials in it.

75.18    Sec. 12. Minnesota Statutes 2008, section 429.041, subdivision 1, is amended to read:
75.19    Subdivision 1. Plans and specifications, advertisement for bids. When the
75.20council determines to make any improvement, it shall let the contract for all or part of
75.21the work, or order all or part of the work done by day labor or otherwise as authorized by
75.22subdivision 2, no later than one year after the adoption of the resolution ordering such
75.23improvement, unless a different time limit is specifically stated in the resolution ordering
75.24the improvement. The council shall cause plans and specifications of the improvement
75.25to be made, or if previously made, to be modified, if necessary, and to be approved and
75.26filed with the clerk, and if the estimated cost exceeds $50,000 the amount in section
75.27471.345, subdivision 3, shall advertise for bids for the improvement in the newspaper and
75.28such other papers and for such length of time as it may deem advisable. If the estimated
75.29cost exceeds $100,000 twice the amount in section 471.345, subdivision 3, publication
75.30shall be made no less than three weeks before the last day for submission of bids once
75.31in the newspaper and at least once in either a newspaper published in a city of the first
75.32class or a trade paper. To be eligible as such a trade paper, a publication shall have all
75.33the qualifications of a legal newspaper except that instead of the requirement that it shall
75.34contain general and local news, such trade paper shall contain building and construction
76.1news of interest to contractors in this state, among whom it shall have a general circulation.
76.2The advertisement shall specify the work to be done, shall state the time when the bids
76.3will be publicly opened for consideration by the council, which shall be not less than ten
76.4days after the first publication of the advertisement when the estimated cost is less than
76.5$100,000 twice the amount in section 471.345, subdivision 3, and not less than three
76.6weeks after such publication in other cases, and shall state that no bids will be considered
76.7unless sealed and filed with the clerk and accompanied by a cash deposit, cashier's check,
76.8bid bond, or certified check payable to the clerk, for such percentage of the amount of the
76.9bid as the council may specify. In providing for the advertisement for bids the council
76.10may direct that the bids shall be opened publicly by two or more designated officers or
76.11agents of the municipality and tabulated in advance of the meeting at which they are to
76.12be considered by the council. Nothing herein shall prevent the council from advertising
76.13separately for various portions of the work involved in an improvement, or from itself,
76.14supplying by such means as may be otherwise authorized by law, all or any part of the
76.15materials, supplies, or equipment to be used in the improvement or from combining two or
76.16more improvements in a single set of plans and specifications or a single contract.

76.17    Sec. 13. Minnesota Statutes 2008, section 429.041, subdivision 2, is amended to read:
76.18    Subd. 2. Contracts; day labor. In contracting for an improvement, the council shall
76.19require the execution of one or more written contracts and bonds, conditioned as required
76.20by law. The council shall award the contract to the lowest responsible bidder or it may
76.21reject all bids. If any bidder to whom a contract is awarded fails to enter promptly into
76.22a written contract and to furnish the required bond, the defaulting bidder shall forfeit to
76.23the municipality the amount of the defaulter's cash deposit, cashier's check, bid bond, or
76.24certified check, and the council may thereupon award the contract to the next lowest
76.25responsible bidder. When it appears to the council that the cost of the entire work projected
76.26will be less than $50,000 the amount in section 471.345, subdivision 3, or whenever no
76.27bid is submitted after proper advertisement or the only bids submitted are higher than
76.28the engineer's estimate, the council may advertise for new bids or, without advertising
76.29for bids, directly purchase the materials for the work and do it by the employment of day
76.30labor or in any other manner the council considers proper. The council may have the
76.31work supervised by the city engineer or other qualified person but shall have the work
76.32supervised by a registered engineer if done by day labor and it appears to the council that
76.33the entire cost of all work and materials for the improvement will be more than $25,000
76.34the lowest amount in section 471.345, subdivision 4. In case of improper construction
76.35or unreasonable delay in the prosecution of the work by the contractor, the council may
77.1order and cause the suspension of the work at any time and relet the contract, or order
77.2a reconstruction of any portion of the work improperly done, and where the cost of
77.3completion or reconstruction necessary will be less than $50,000 the amount in section
77.4471.345, subdivision 3, the council may do it by the employment of day labor.

77.5    Sec. 14. Minnesota Statutes 2008, section 469.015, is amended to read:
77.6469.015 LETTING OF CONTRACTS; PERFORMANCE BONDS.
77.7    Subdivision 1. Bids; notice. All construction work, and work of demolition or
77.8clearing, and every purchase of equipment, supplies, or materials, necessary in carrying
77.9out the purposes of sections 469.001 to 469.047, that involve expenditure of $50,000 the
77.10amount in section 471.345, subdivision 3, or more shall be awarded by contract. Before
77.11receiving bids the authority shall publish, once a week for two consecutive weeks in an
77.12official newspaper of general circulation in the community a notice that bids will be
77.13received for that construction work, or that purchase of equipment, supplies, or materials.
77.14The notice shall state the nature of the work and the terms and conditions upon which the
77.15contract is to be let, naming a time and place where bids will be received, opened and read
77.16publicly, which time shall be not less than seven days after the date of the last publication.
77.17After the bids have been received, opened and read publicly and recorded, the authority
77.18shall award the contract to the lowest responsible bidder, provided that the authority
77.19reserves the right to reject any or all bids. Each contract shall be executed in writing, and
77.20the person to whom the contract is awarded shall give sufficient bond to the authority for its
77.21faithful performance. If no satisfactory bid is received, the authority may readvertise. The
77.22authority may establish reasonable qualifications to determine the fitness and responsibility
77.23of bidders and to require bidders to meet the qualifications before bids are accepted.
77.24    Subd. 1a. Best value alternative. As an alternative to the procurement method
77.25described in subdivision 1, the authority may issue a request for proposals and award the
77.26contract to the vendor or contractor offering the best value under a request for proposals as
77.27described in section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).
77.28    Subd. 2. Exception; emergency. If the authority by a vote of four-fifths of its
77.29members shall declare that an emergency exists requiring the immediate purchase of any
77.30equipment or material or supplies at a cost in excess of $50,000 the amount in section
77.31471.345, subdivision 3, but not exceeding $75,000 half again as much as the amount in
77.32section 471.345, subdivision 3, or making of emergency repairs, it shall not be necessary
77.33to advertise for bids, but the material, equipment, or supplies may be purchased in the
77.34open market at the lowest price obtainable, or the emergency repairs may be contracted for
77.35or performed without securing formal competitive bids. An emergency, for purposes of
78.1this subdivision, shall be understood to be unforeseen circumstances or conditions which
78.2result in the placing in jeopardy of human life or property.
78.3    Subd. 3. Performance and payment bonds. Performance and payment bonds shall
78.4be required from contractors for any works of construction as provided in and subject
78.5to all the provisions of sections 574.26 to 574.31 except for contracts entered into by
78.6an authority for an expenditure of less than $50,000 the minimum threshold amount in
78.7section 471.345, subdivision 3.
78.8    Subd. 4. Exceptions. (a) An authority need not require competitive bidding in the
78.9following circumstances:
78.10(1) in the case of a contract for the acquisition of a low-rent housing project:
78.11(i) for which financial assistance is provided by the federal government;
78.12(ii) which does not require any direct loan or grant of money from the municipality
78.13as a condition of the federal financial assistance; and
78.14(iii) for which the contract provides for the construction of the project upon land that
78.15is either owned by the authority for redevelopment purposes or not owned by the authority
78.16at the time of the contract but the contract provides for the conveyance or lease to the
78.17authority of the project or improvements upon completion of construction;
78.18(2) with respect to a structured parking facility:
78.19(i) constructed in conjunction with, and directly above or below, a development; and
78.20(ii) financed with the proceeds of tax increment or parking ramp general obligation
78.21or revenue bonds;
78.22(3) until August 1, 2009, with respect to a facility built for the purpose of facilitating
78.23the operation of public transit or encouraging its use:
78.24(i) constructed in conjunction with, and directly above or below, a development; and
78.25(ii) financed with the proceeds of parking ramp general obligation or revenue bonds
78.26or with at least 60 percent of the construction cost being financed with funding provided
78.27by the federal government; and
78.28(4) in the case of any building in which at least 75 percent of the usable square
78.29footage constitutes a housing development project if:
78.30(i) the project is financed with the proceeds of bonds issued under section 469.034 or
78.31from nongovernmental sources;
78.32(ii) the project is either located on land that is owned or is being acquired by the
78.33authority only for development purposes, or is not owned by the authority at the time the
78.34contract is entered into but the contract provides for conveyance or lease to the authority
78.35of the project or improvements upon completion of construction; and
79.1(iii) the authority finds and determines that elimination of the public bidding
79.2requirements is necessary in order for the housing development project to be economical
79.3and feasible.
79.4(b) An authority need not require a performance bond for the following projects:
79.5(1) a contract described in paragraph (a), clause (1);
79.6(2) a construction change order for a housing project in which 30 percent of the
79.7construction has been completed;
79.8(3) a construction contract for a single-family housing project in which the authority
79.9acts as the general construction contractor; or
79.10(4) a services or materials contract for a housing project.
79.11For purposes of this paragraph, "services or materials contract" does not include
79.12construction contracts.
79.13    Subd. 5. Security in lieu of bond. The authority may accept a certified check or
79.14cashier's check in the same amount as required for a bond in lieu of a performance bond
79.15for contracts entered into by an authority for an expenditure of less than $50,000 the
79.16minimum threshold amount in section 471.345, subdivision 3. The check must be held by
79.17the authority for 90 days after the contract has been completed. If no suit is brought within
79.18the 90 days, the authority must return the amount of the check to the person making it. If a
79.19suit is brought within the 90-day period, the authority must disburse the amount of the
79.20check pursuant to the order of the court.

79.21    Sec. 15. Minnesota Statutes 2008, section 641.12, subdivision 1, is amended to read:
79.22    Subdivision 1. Fee. A county board may require that each person who is booked for
79.23confinement at a county or regional jail, and not released upon completion of the booking
79.24process, pay a fee of up to $10 to the sheriff's department of the county in which the jail
79.25is located to cover costs incurred by the county in the booking of that person. The fee
79.26is payable immediately from any money then possessed by the person being booked, or
79.27any money deposited with the sheriff's department on the person's behalf. If the person
79.28has no funds at the time of booking or during the period of any incarceration, the sheriff
79.29shall notify the district court in the county where the charges related to the booking are
79.30pending, and shall request the assessment of the fee. Notwithstanding section 609.10 or
79.31609.125 , upon notification from the sheriff, the district court must order the fee paid to the
79.32sheriff's department as part of any sentence or disposition imposed. If the person is not
79.33charged, is acquitted, or if the charges are dismissed, the sheriff shall return the fee to the
79.34person at the last known address listed in the booking records.

80.1    Sec. 16. LEGISLATIVE COMMISSION ON MANDATE REFORM; FIRST
80.2MEETING.
80.3The first meeting of the Legislative Commission on Mandate Reform must be held
80.4as soon as practicable after all appointments are made. The speaker of the house must
80.5designate a commission member to convene the first meeting. The first commission serves
80.6until a new commission is appointed at the beginning of the next biennium.


80.9    Section 1. Minnesota Statutes 2008, section 123B.10, subdivision 1, is amended to read:
80.10    Subdivision 1. Budgets; form of notification. (a) Every board must publish revenue
80.11and expenditure budgets for the current year and the actual revenues, expenditures, fund
80.12balances for the prior year and projected fund balances for the current year in a form
80.13prescribed by the commissioner within one week of the acceptance of the final audit by
80.14the board, or November 30, whichever is earlier. The forms prescribed must be designed
80.15so that year to year comparisons of revenue, expenditures and fund balances can be made.
80.16    (b) A school board annually must notify the public of its revenue, expenditures, fund
80.17balances, and other relevant budget information. The board must include the budget
80.18information required by this section in the materials provided as a part of its truth in
80.19taxation hearing, post the materials in a conspicuous place on the district's official Web
80.20site, including a link to the district's school report card on the Department of Education's
80.21Web site, and publish the information in a qualified newspaper of general circulation
80.22in the district.
80.23EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
80.24thereafter.

80.25    Sec. 2. Minnesota Statutes 2008, section 275.065, subdivision 1, is amended to read:
80.26    Subdivision 1. Proposed levy. (a) Notwithstanding any law or charter to the
80.27contrary, on or before September 15 5, each taxing authority, other than a school district,
80.28shall adopt a proposed budget and shall certify to the county auditor the proposed or, in
80.29the case of a town, the final property tax levy for taxes payable in the following year.
80.30    (b) On or before September 30 20, each school district that has not mutually agreed
80.31with its home county to extend this date shall certify to the county auditor the proposed
80.32property tax levy for taxes payable in the following year. Each school district that has
80.33agreed with its home county to delay the certification of its proposed property tax levy
81.1must certify its proposed property tax levy for the following year no later than October 7
81.2September 28. The school district shall certify the proposed levy as:
81.3    (1) a specific dollar amount by school district fund, broken down between
81.4voter-approved and non-voter-approved levies and between referendum market value
81.5and tax capacity levies; or
81.6    (2) the maximum levy limitation certified by the commissioner of education
81.7according to section 126C.48, subdivision 1.
81.8    (c) If the board of estimate and taxation or any similar board that establishes
81.9maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
81.10property tax levies for funds under its jurisdiction by charter to the county auditor by
81.11September 15 1, the city shall be deemed to have certified its levies for those taxing
81.12jurisdictions.
81.13    (d) For purposes of this section, "taxing authority" includes all home rule and
81.14statutory cities, towns, counties, school districts, and special taxing districts as defined
81.15in section 275.066. Intermediate school districts that levy a tax under chapter 124 or
81.16136D, joint powers boards established under sections 123A.44 to 123A.446, and Common
81.17School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing
81.18districts for purposes of this section.
81.19(e) At the meeting where a taxing authority, other than a town, adopts its proposed
81.20tax levy under paragraph (a) or (b), the taxing authority shall announce the time and place
81.21of its subsequent regularly scheduled meetings at which the budget levy will be discussed
81.22and at which the public will be allowed to speak. The time and place of those meetings
81.23must be included in the proceedings or summary of the proceedings published in the
81.24official newspaper of the taxing authority under section 123B.09, 375.12, or 412.191.
81.25EFFECTIVE DATE.This section is effective for proposed notices prepared in 2010
81.26and thereafter, for property taxes payable in 2011 and thereafter, except that paragraph
81.27(e) is effective for taxes payable in 2010 and thereafter.

81.28    Sec. 3. Minnesota Statutes 2008, section 275.065, subdivision 1a, is amended to read:
81.29    Subd. 1a. Overlapping jurisdictions. In the case of a taxing authority lying in two
81.30or more counties, the home county auditor shall certify the proposed levy and the proposed
81.31local tax rate to the other county auditor by October 5 September 25, unless the home
81.32county has agreed to delay the certification of its proposed property tax levy, in which case
81.33the home county auditor shall certify the proposed levy and the proposed local tax rate
81.34to the other county auditor by October 10 September 30. The home county auditor must
81.35estimate the levy or rate in preparing the notices required in subdivision 3, if the other
82.1county has not certified the appropriate information. If requested by the home county
82.2auditor, the other county auditor must furnish an estimate to the home county auditor.
82.3EFFECTIVE DATE.This section is effective for proposed notices prepared in
82.42010 and thereafter, for property taxes payable in 2011 and thereafter.

82.5    Sec. 4. Minnesota Statutes 2008, section 275.065, subdivision 1c, is amended to read:
82.6    Subd. 1c. Levy; shared, merged, consolidated services. If two or more taxing
82.7authorities are in the process of negotiating an agreement for sharing, merging, or
82.8consolidating services between those taxing authorities at the time the proposed levy is to
82.9be certified under subdivision 1, each taxing authority involved in the negotiation shall
82.10certify its total proposed levy as provided in that subdivision, including a notification to the
82.11county auditor of the specific service involved in the agreement which is not yet finalized.
82.12The affected taxing authorities may amend their proposed levies under subdivision 1 until
82.13October 10 September 25 for levy amounts relating only to the specific service involved.
82.14EFFECTIVE DATE.This section is effective for proposed notices prepared in
82.152010 and thereafter, for property taxes payable in 2011 and thereafter.

82.16    Sec. 5. Minnesota Statutes 2008, section 275.065, subdivision 3, is amended to read:
82.17    Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
82.18and the county treasurer shall deliver after November 10 October 15 and on or before
82.19November October 24 each year, by first class mail to each taxpayer at the address listed
82.20on the county's current year's assessment roll, a notice of proposed property taxes. Upon
82.21written request by the taxpayer, the treasurer may send the notice in electronic form or by
82.22electronic mail instead of on paper or by ordinary mail.
82.23    (b) The commissioner of revenue shall prescribe the form of the notice.
82.24    (c) The notice must inform taxpayers that it contains the amount of property taxes
82.25each taxing authority proposes to collect for taxes payable the following year. In the
82.26case of a town, or in the case of the state general tax, the final tax amount will be its
82.27proposed tax. In the case of taxing authorities required to hold a public meeting under
82.28subdivision 6, the notice must clearly state that each taxing authority, including regional
82.29library districts established under section 134.201, and including the metropolitan taxing
82.30districts as defined in paragraph (i), but excluding all other special taxing districts and
82.31towns, will hold a public meeting to receive public testimony on the proposed budget and
82.32proposed or final property tax levy, or, in case of a school district, on the current budget
82.33and proposed property tax levy. The notice must clearly state for each city, county, school
82.34district, regional library authority established under section 134.201, and metropolitan
83.1taxing districts as defined in paragraph (i), the time and place of the taxing authorities'
83.2regularly scheduled meetings occurring after October 24, at which the budget and levy
83.3will be discussed. The taxing authorities must provide the county auditor with the
83.4information to be included in the notice on or before the time it certifies its proposed levy
83.5under subdivision 1. The public shall be allowed to speak at that meeting. It must clearly
83.6state the time and place of each taxing authority's meeting, provide a telephone number for
83.7the taxing authority that taxpayers may call if they have questions related to the notice,
83.8and an address where comments will be received by mail.
83.9    (d) The notice must state for each parcel:
83.10    (1) the market value of the property as determined under section 273.11, and used
83.11for computing property taxes payable in the following year and for taxes payable in the
83.12current year as each appears in the records of the county assessor on November September
83.131 of the current year; and, in the case of residential property, whether the property is
83.14classified as homestead or nonhomestead. The notice must clearly inform taxpayers of the
83.15years to which the market values apply and that the values are final values;
83.16    (2) the items listed below, shown separately by county, city or town, and state general
83.17tax, net of the residential and agricultural homestead credit under section 273.1384, voter
83.18approved school levy, other local school levy, and the sum of the special taxing districts,
83.19and as a total of all taxing authorities:
83.20    (i) the actual tax for taxes payable in the current year; and
83.21    (ii) the proposed tax amount.
83.22    If the county levy under clause (2) includes an amount for a lake improvement
83.23district as defined under sections 103B.501 to 103B.581, the amount attributable for that
83.24purpose must be separately stated from the remaining county levy amount.
83.25    In the case of a town or the state general tax, the final tax shall also be its proposed
83.26tax unless the town changes its levy at a special town meeting under section 365.52. If a
83.27school district has certified under section 126C.17, subdivision 9, that a referendum will
83.28be held in the school district at the November general election, the county auditor must
83.29note next to the school district's proposed amount that a referendum is pending and that, if
83.30approved by the voters, the tax amount may be higher than shown on the notice. In the
83.31case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
83.32listed separately from the remaining amount of the city's levy. In the case of the city of
83.33St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
83.34remaining amount of the city's levy. In the case of Ramsey County, any amount levied
83.35under section 134.07 may be listed separately from the remaining amount of the county's
83.36levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
84.1under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
84.2proposed tax levy on the tax capacity subject to the areawide tax must each be stated
84.3separately and not included in the sum of the special taxing districts; and
84.4    (3) the increase or decrease between the total taxes payable in the current year and
84.5the total proposed taxes, expressed as a percentage.
84.6    For purposes of this section, the amount of the tax on homesteads qualifying under
84.7the senior citizens' property tax deferral program under chapter 290B is the total amount
84.8of property tax before subtraction of the deferred property tax amount.
84.9    (e) The notice must clearly state that the proposed or final taxes do not include
84.10the following:
84.11    (1) special assessments;
84.12    (2) levies approved by the voters after the date the proposed taxes are certified,
84.13including bond referenda and school district levy referenda;
84.14    (3) a levy limit increase approved by the voters by the first Tuesday after the first
84.15Monday in November of the levy year as provided under section 275.73;
84.16    (4) amounts necessary to pay cleanup or other costs due to a natural disaster
84.17occurring after the date the proposed taxes are certified;
84.18    (5) amounts necessary to pay tort judgments against the taxing authority that become
84.19final after the date the proposed taxes are certified; and
84.20    (6) the contamination tax imposed on properties which received market value
84.21reductions for contamination.
84.22    (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
84.23the county treasurer to deliver the notice as required in this section does not invalidate the
84.24proposed or final tax levy or the taxes payable pursuant to the tax levy.
84.25    (g) If the notice the taxpayer receives under this section lists the property as
84.26nonhomestead, and satisfactory documentation is provided to the county assessor by the
84.27applicable deadline, and the property qualifies for the homestead classification in that
84.28assessment year, the assessor shall reclassify the property to homestead for taxes payable
84.29in the following year.
84.30    (h) In the case of class 4 residential property used as a residence for lease or rental
84.31periods of 30 days or more, the taxpayer must either:
84.32    (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
84.33renter, or lessee; or
84.34    (2) post a copy of the notice in a conspicuous place on the premises of the property.
84.35    The notice must be mailed or posted by the taxpayer by November October 27 or
84.36within three days of receipt of the notice, whichever is later. A taxpayer may notify the
85.1county treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises
85.2to which the notice must be mailed in order to fulfill the requirements of this paragraph.
85.3    (i) For purposes of this subdivision, subdivisions and subdivision 5a and 6,
85.4"metropolitan special taxing districts" means the following taxing districts in the
85.5seven-county metropolitan area that levy a property tax for any of the specified purposes
85.6listed below:
85.7    (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
85.8473.446 , 473.521, 473.547, or 473.834;
85.9    (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
85.10and
85.11    (3) Metropolitan Mosquito Control Commission under section 473.711.
85.12    For purposes of this section, any levies made by the regional rail authorities in the
85.13county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
85.14398A shall be included with the appropriate county's levy and shall be discussed at that
85.15county's public hearing.
85.16    (j) The governing body of a county, city, or school district may, with the consent
85.17of the county board, include supplemental information with the statement of proposed
85.18property taxes about the impact of state aid increases or decreases on property tax
85.19increases or decreases and on the level of services provided in the affected jurisdiction.
85.20This supplemental information may include information for the following year, the current
85.21year, and for as many consecutive preceding years as deemed appropriate by the governing
85.22body of the county, city, or school district. It may include only information regarding:
85.23    (1) the impact of inflation as measured by the implicit price deflator for state and
85.24local government purchases;
85.25    (2) population growth and decline;
85.26    (3) state or federal government action; and
85.27    (4) other financial factors that affect the level of property taxation and local services
85.28that the governing body of the county, city, or school district may deem appropriate to
85.29include.
85.30    The information may be presented using tables, written narrative, and graphic
85.31representations and may contain instruction toward further sources of information or
85.32opportunity for comment.
85.33EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
85.34thereafter, except that the changes advancing the dates for preparing and mailing the
85.35notices are effective for proposed notices in 2010, for taxes payable in 2011 and thereafter.

86.1    Sec. 6. Minnesota Statutes 2008, section 275.065, subdivision 6, is amended to read:
86.2    Subd. 6. Public hearing; Adoption of budget and levy. (a) For purposes of this
86.3section, the following terms shall have the meanings given:
86.4(1) "Initial hearing" means the first and primary hearing held to discuss the taxing
86.5authority's proposed budget and proposed property tax levy for taxes payable in the
86.6following year, or, for school districts, the current budget and the proposed property tax
86.7levy for taxes payable in the following year.
86.8(2) "Continuation hearing" means a hearing held to complete the initial hearing, if
86.9the initial hearing is not completed on its scheduled date.
86.10(3) "Subsequent hearing" means the hearing held to adopt the taxing authority's final
86.11property tax levy, and, in the case of taxing authorities other than school districts, the final
86.12budget, for taxes payable in the following year.
86.13(b) Between November 29 and December 20, the governing bodies of a city that has a
86.14population over 500, county, metropolitan special taxing districts as defined in subdivision
86.153, paragraph (i), and regional library districts shall each hold an initial public hearing
86.16to discuss and seek public comment on its final budget and property tax levy for taxes
86.17payable in the following year, and the governing body of the school district shall hold an
86.18initial public hearing to review its current budget and proposed property tax levy for taxes
86.19payable in the following year. The metropolitan special taxing districts shall be required to
86.20hold only a single joint initial public hearing, the location of which will be determined by
86.21the affected metropolitan agencies. A city, county, metropolitan special taxing district as
86.22defined in subdivision 3, paragraph (i), regional library district established under section
86.23134.201, or school district is not required to hold a public hearing under this subdivision
86.24unless its proposed property tax levy for taxes payable in the following year, as certified
86.25under subdivision 1, has increased over its final property tax levy for taxes payable in the
86.26current year by a percentage that is greater than the percentage increase in the implicit
86.27price deflator for government consumption expenditures and gross investment for state
86.28and local governments prepared by the Bureau of Economic Analysts of the United States
86.29Department of Commerce for the 12-month period ending March 31 of the current year.
86.30(c) The initial hearing must be held after 5:00 p.m. if scheduled on a day other than
86.31Saturday. No initial hearing may be held on a Sunday.
86.32(d) At the initial hearing under this subdivision, the percentage increase in property
86.33taxes proposed by the taxing authority, if any, and the specific purposes for which property
86.34tax revenues are being increased must be discussed. During the discussion, the governing
86.35body shall hear comments regarding a proposed increase and explain the reasons for the
86.36proposed increase. The public shall be allowed to speak and to ask questions. At the public
87.1hearing, the school district must also provide and discuss information on the distribution
87.2of its revenues by revenue source, and the distribution of its spending by program area.
87.3(e) If the initial hearing is not completed on its scheduled date, the taxing authority
87.4must announce, prior to adjournment of the hearing, the date, time, and place for the
87.5continuation of the hearing. The continuation hearing must be held at least five business
87.6days but no more than 14 business days after the initial hearing. A continuation hearing
87.7may not be held later than December 20 except as provided in paragraphs (f) and (g).
87.8A continuation hearing must be held after 5:00 p.m. if scheduled on a day other than
87.9Saturday. No continuation hearing may be held on a Sunday.
87.10(f) The governing body of a county shall hold its initial hearing on the first Thursday
87.11in December each year, and may hold additional initial hearings on other dates before
87.12December 20 if necessary for the convenience of county residents. If the county needs a
87.13continuation of its hearing, the continuation hearing shall be held on the third Tuesday
87.14in December. If the third Tuesday in December falls on December 21, the county's
87.15continuation hearing shall be held on Monday, December 20.
87.16(g) The metropolitan special taxing districts shall hold a joint initial public hearing
87.17on the first Wednesday of December. A continuation hearing, if necessary, shall be held on
87.18the second Wednesday of December even if that second Wednesday is after December 10.
87.19(h) The county auditor shall provide for the coordination of initial and continuation
87.20hearing dates for all school districts and cities within the county to prevent conflicts under
87.21clauses (i) and (j).
87.22(i) By August 10, each school board and the board of the regional library district
87.23shall certify to the county auditors of the counties in which the school district or regional
87.24library district is located the dates on which it elects to hold its initial hearing and any
87.25continuation hearing. If a school board or regional library district does not certify these
87.26dates by August 10, the auditor will assign the initial and continuation hearing dates. The
87.27dates elected or assigned must not conflict with the initial and continuation hearing dates
87.28of the county or the metropolitan special taxing districts.
87.29(j) By August 20, the county auditor shall notify the clerks of the cities within the
87.30county of the dates on which school districts and regional library districts have elected to
87.31hold their initial and continuation hearings. At the time a city certifies its proposed levy
87.32under subdivision 1 it shall certify the dates on which it elects to hold its initial hearing and
87.33any continuation hearing. Until September 15, the first and second Mondays of December
87.34are reserved for the use of the cities. If a city does not certify its hearing dates by
87.35September 15, the auditor shall assign the initial and continuation hearing dates. The dates
87.36elected or assigned for the initial hearing must not conflict with the initial hearing dates
88.1of the county, metropolitan special taxing districts, regional library districts, or school
88.2districts within which the city is located. To the extent possible, the dates of the city's
88.3continuation hearing should not conflict with the continuation hearing dates of the county,
88.4metropolitan special taxing districts, regional library districts, or school districts within
88.5which the city is located. This paragraph does not apply to cities of 500 population or less.
88.6(k) The county initial hearing date and the city, metropolitan special taxing district,
88.7regional library district, and school district initial hearing dates must be designated on
88.8the notices required under subdivision 3. The continuation hearing dates need not be
88.9stated on the notices.
88.10(l) At a subsequent hearing, each county, school district, city over 500 population,
88.11and metropolitan special taxing district may amend its proposed property tax levy
88.12and must adopt a final property tax levy. Each county, city over 500 population, and
88.13metropolitan special taxing district may also amend its proposed budget and must adopt a
88.14final budget at the subsequent hearing. The final property tax levy must be adopted prior
88.15to adopting the final budget. A school district is not required to adopt its final budget at the
88.16subsequent hearing. The subsequent hearing of a taxing authority must be held on a date
88.17subsequent to the date of the taxing authority's initial public hearing. If a continuation
88.18hearing is held, the subsequent hearing must be held either immediately following the
88.19continuation hearing or on a date subsequent to the continuation hearing. The subsequent
88.20hearing may be held at a regularly scheduled board or council meeting or at a special
88.21meeting scheduled for the purposes of the subsequent hearing. The subsequent hearing
88.22of a taxing authority does not have to be coordinated by the county auditor to prevent a
88.23conflict with an initial hearing, a continuation hearing, or a subsequent hearing of any
88.24other taxing authority. All subsequent hearings must be held prior to five working days
88.25after December 20 of the levy year. The date, time, and place of the subsequent hearing
88.26must be announced at the initial public hearing or at the continuation hearing.
88.27(m) (a) The property tax levy certified under section 275.07 by a city of any
88.28population, county, metropolitan special taxing district, regional library district, or school
88.29district must not exceed the proposed levy determined under subdivision 1, except by an
88.30amount up to the sum of the following amounts:
88.31(1) the amount of a school district levy whose voters approved a referendum to
88.32increase taxes under section 123B.63, subdivision 3, or 126C.17, subdivision 9, after
88.33the proposed levy was certified;
88.34(2) the amount of a city or county levy approved by the voters after the proposed
88.35levy was certified;
89.1(3) the amount of a levy to pay principal and interest on bonds approved by the
89.2voters under section 475.58 after the proposed levy was certified;
89.3(4) the amount of a levy to pay costs due to a natural disaster occurring after the
89.4proposed levy was certified, if that amount is approved by the commissioner of revenue
89.5under subdivision 6a;
89.6(5) the amount of a levy to pay tort judgments against a taxing authority that become
89.7final after the proposed levy was certified, if the amount is approved by the commissioner
89.8of revenue under subdivision 6a;
89.9(6) the amount of an increase in levy limits certified to the taxing authority by the
89.10commissioner of education or the commissioner of revenue after the proposed levy was
89.11certified; and
89.12(7) the amount required under section 126C.55; and
89.13(8) the amount of unallotment under section 16A.152 that was recertified under
89.14section 275.07, subdivision 6.
89.15(n) (b) This subdivision does not apply to towns and special taxing districts other
89.16than regional library districts and metropolitan special taxing districts.
89.17(o) (c) Notwithstanding the requirements of this section, the employer is required to
89.18meet and negotiate over employee compensation as provided for in chapter 179A.
89.19EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
89.20thereafter.

89.21    Sec. 7. Minnesota Statutes 2008, section 275.07, subdivision 1, is amended to read:
89.22    Subdivision 1. Certification of levy. (a) Except as provided under paragraph (b),
89.23the taxes voted by cities, counties, school districts, and special districts shall be certified
89.24by the proper authorities to the county auditor on or before five working days after
89.25December 20 10 in each year. A town must certify the levy adopted by the town board to
89.26the county auditor by September 15 5 each year. If the town board modifies the levy at
89.27a special town meeting after September 15 5, the town board must recertify its levy to
89.28the county auditor on or before five working days after December 20 10. If a city, town,
89.29county, school district, or special district fails to certify its levy by that date, its levy shall
89.30be the amount levied by it for the preceding year.
89.31(b)(i) The taxes voted by counties under sections 103B.241, 103B.245, and
89.32103B.251 shall be separately certified by the county to the county auditor on or before
89.33five working days after December 20 10 in each year. The taxes certified shall not be
89.34reduced by the county auditor by the aid received under section 273.1398, subdivision
90.13 . If a county fails to certify its levy by that date, its levy shall be the amount levied by
90.2it for the preceding year.
90.3(ii) For purposes of the proposed property tax notice under section 275.065 and
90.4the property tax statement under section 276.04, for the first year in which the county
90.5implements the provisions of this paragraph, the county auditor shall reduce the county's
90.6levy for the preceding year to reflect any amount levied for water management purposes
90.7under clause (i) included in the county's levy.
90.8EFFECTIVE DATE.This section is effective for property taxes payable in 2011
90.9and thereafter.

90.10    Sec. 8. Minnesota Statutes 2008, section 275.07, subdivision 4, is amended to read:
90.11    Subd. 4. Report to commissioner. (a) On or before October 8 September 20 of
90.12each year, the county auditor shall report to the commissioner of revenue the proposed
90.13levy certified by local units of government under section 275.065, subdivision 1. If
90.14any taxing authorities have notified the county auditor that they are in the process of
90.15negotiating an agreement for sharing, merging, or consolidating services but that when
90.16the proposed levy was certified under section 275.065, subdivision 1c, the agreement was
90.17not yet finalized, the county auditor shall supply that information to the commissioner
90.18when filing the report under this section and shall recertify the affected levies as soon as
90.19practical after October 10 September 25.
90.20(b) On or before January 15 5 of each year, the county auditor shall report to the
90.21commissioner of revenue the final levy certified by local units of government under
90.22subdivision 1.
90.23(c) The levies must be reported in the manner prescribed by the commissioner.
90.24EFFECTIVE DATE.This section is effective for property taxes payable in 2011
90.25and thereafter.

90.26    Sec. 9. Minnesota Statutes 2008, section 375.194, subdivision 5, is amended to read:
90.27    Subd. 5. Determination of county tax rate. The eligible county's proposed and
90.28final tax rates shall be determined by dividing the certified levy by the total taxable net tax
90.29capacity, without regard to any abatements granted under this section. The county board
90.30shall make available the estimated amount of the abatement at the public hearing under
90.31section 275.065, subdivision 6.
90.32EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
90.33thereafter.

91.1    Sec. 10. Minnesota Statutes 2008, section 383A.75, subdivision 3, is amended to read:
91.2    Subd. 3. Duties. The committee is authorized to and shall meet from time to time
91.3to make appropriate recommendations for the efficient and effective use of property tax
91.4dollars raised by the jurisdictions for programs, buildings, and operations. In addition,
91.5the committee shall:
91.6(1) identify trends and factors likely to be driving budget outcomes over the next
91.7five years with recommendations for how the jurisdictions should manage those trends
91.8and factors to increase efficiency and effectiveness;
91.9(2) agree, by October 1 of each year, on the appropriate level of overall property tax
91.10levy for the three jurisdictions and publicly report such to the governing bodies of each
91.11jurisdiction for ratification or modification by resolution; and
91.12(3) plan for the joint truth-in-taxation hearings under section 275.065, subdivision
91.138 ; and
91.14(4) (3) identify, by December 31 of each year, areas of the budget to be targeted in
91.15the coming year for joint review to improve services or achieve efficiencies.
91.16In carrying out its duties, the committee shall consult with public employees of
91.17each jurisdiction and with other stakeholders of the city, county, and school district, as
91.18appropriate.
91.19EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
91.20thereafter.

91.21    Sec. 11. Minnesota Statutes 2008, section 446A.086, subdivision 8, is amended to read:
91.22    Subd. 8. Tax levy for repayment. (a) With the approval of the authority, a
91.23governmental unit may levy in the year the state makes a payment under this section an
91.24amount up to the amount necessary to provide funds for the repayment of the amount paid
91.25by the state plus interest through the date of estimated repayment by the governmental
91.26unit. The proceeds of this levy may be used only for this purpose unless they exceed the
91.27amount actually due. Any excess must be used to repay other state payments made under
91.28this section or must be deposited in the debt redemption fund of the governmental unit.
91.29The amount of aids to be reduced to repay the state are decreased by the amount levied.
91.30    (b) If the state is not repaid in full for a payment made under this section by
91.31November 30 of the calendar year following the year in which the state makes the
91.32payment, the authority shall require the governmental unit to certify a property tax levy in
91.33an amount up to the amount necessary to provide funds for repayment of the amount paid
91.34by the state plus interest through the date of estimated repayment by the governmental unit.
91.35To prevent undue hardship, the authority may allow the governmental unit to certify the
92.1levy over a five-year period. The proceeds of the levy may be used only for this purpose
92.2unless they are in excess of the amount actually due, in which case the excess must be used
92.3to repay other state payments made under this section or must be deposited in the debt
92.4redemption fund of the governmental unit. If the authority orders the governmental unit to
92.5levy, the amount of aids reduced to repay the state are decreased by the amount levied.
92.6    (c) A levy under this subdivision is an increase in the levy limits of the governmental
92.7unit for purposes of section 275.065, subdivision 6, and must be explained as a specific
92.8increase at the meeting required under that provision.
92.9EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
92.10thereafter.

92.11    Sec. 12. Minnesota Statutes 2008, section 465.719, subdivision 9, is amended to read:
92.12    Subd. 9. Application of other laws. A corporation created by a political subdivision
92.13under this section must comply with every law that applies to the political subdivision,
92.14as if the corporation is a part of the political subdivision, unless the resolution ratifying
92.15creation of the corporation specifically exempts the corporation from part or all of a law.
92.16If the resolution exempts the corporation from part or all of a law, the resolution must
92.17make a detailed and specific finding as to why the corporation cannot fulfill its purpose if
92.18the corporation is subject to that law. A corporation may not be exempted from chapter
92.1913D, the Minnesota Open Meeting Law, sections 138.163 to 138.25, governing records
92.20management, or chapter 13, the Minnesota Government Data Practices Act. Any affected
92.21or interested person may bring an action in district court to void the resolution on the
92.22grounds that the findings are not sufficiently detailed and specific, or that the corporation
92.23can fulfill its purpose if it is subject to the law from which the resolution exempts the
92.24corporation. Laws that apply to a political subdivision that also apply to a corporation
92.25created by a political subdivision under this subdivision include, but are not limited to:
92.26(1) chapter 13D, the Minnesota Open Meeting Law;
92.27(2) chapter 13, the Minnesota Government Data Practices Act;
92.28(3) section 471.345, the Uniform Municipal Contracting Law;
92.29(4) sections 43A.17, limiting the compensation of employees based on the governor's
92.30salary; 471.991 to 471.999, providing for equitable pay; and 465.72 and 465.722,
92.31governing severance pay;
92.32(5) section 275.065, providing for truth-in-taxation hearings. If any tax revenues of
92.33the political subdivision will be appropriated to the corporation, the corporation's annual
92.34operating and capital budgets must be included in the truth-in-taxation hearing of the
92.35political subdivision that created the corporation;
93.1(6) (5) if the corporation issues debt, its debt is included in the political subdivision's
93.2debt limit if it would be included if issued by the political subdivision, and issuance of the
93.3debt is subject to the election and other requirements of chapter 475 and section 471.69;
93.4(7) (6) section 471.895, prohibiting acceptance of gifts from interested parties, and
93.5sections 471.87 to 471.89, relating to interests in contracts;
93.6(8) (7) chapter 466, relating to municipal tort liability;
93.7(9) (8) chapter 118A, requiring deposit insurance or bond or pledged collateral for
93.8deposits;
93.9(10) (9) chapter 118A, restricting investments;
93.10(11) (10) section 471.346, requiring ownership of vehicles to be identified;
93.11(12) (11) sections 471.38 to 471.41, requiring claims to be in writing, itemized, and
93.12approved by the governing board before payment can be made; and
93.13(13) (12) the corporation cannot make advances of pay, make or guarantee loans to
93.14employees, or provide in-kind benefits unless authorized by law.
93.15EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
93.16thereafter.

93.17    Sec. 13. Minnesota Statutes 2008, section 473.13, subdivision 1, is amended to read:
93.18    Subdivision 1. Budget. (a) On or before December 20 10 of each year, the council,
93.19after the public hearing required in section 275.065, shall adopt a final budget covering its
93.20anticipated receipts and disbursements for the ensuing year and shall decide upon the total
93.21amount necessary to be raised from ad valorem tax levies to meet its budget. The budget
93.22shall state in detail the expenditures for each program to be undertaken, including the
93.23expenses for salaries, consultant services, overhead, travel, printing, and other items. The
93.24budget shall state in detail the capital expenditures of the council for the budget year, based
93.25on a five-year capital program adopted by the council and transmitted to the legislature.
93.26After adoption of the budget and no later than five working days after December 20, the
93.27council shall certify to the auditor of each metropolitan county the share of the tax to be
93.28levied within that county, which must be an amount bearing the same proportion to the
93.29total levy agreed on by the council as the net tax capacity of the county bears to the net tax
93.30capacity of the metropolitan area. The maximum amount of any levy made for the purpose
93.31of this chapter may not exceed the limits set by the statute authorizing the levy.
93.32(b) Each even-numbered year the council shall prepare for its transit programs a
93.33financial plan for the succeeding three calendar years, in half-year segments. The financial
93.34plan must contain schedules of user charges and any changes in user charges planned or
94.1anticipated by the council during the period of the plan. The financial plan must contain a
94.2proposed request for state financial assistance for the succeeding biennium.
94.3(c) In addition, the budget must show for each year:
94.4(1) the estimated operating revenues from all sources including funds on hand at the
94.5beginning of the year, and estimated expenditures for costs of operation, administration,
94.6maintenance, and debt service;
94.7(2) capital improvement funds estimated to be on hand at the beginning of the year
94.8and estimated to be received during the year from all sources and estimated cost of capital
94.9improvements to be paid out or expended during the year, all in such detail and form as
94.10the council may prescribe; and
94.11(3) the estimated source and use of pass-through funds.
94.12EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
94.13thereafter, except that the date change in certifying the budget is effective for taxes
94.14payable in 2011 and thereafter.

94.15    Sec. 14. REPEALER.
94.16 Minnesota Statutes 2008, section 275.065, subdivisions 5a, 6b, 6c, 8, 9, and 10, are
94.17repealed.
94.18EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
94.19thereafter.


94.22    Section 1. Minnesota Statutes 2008, section 40A.09, is amended to read:
94.2340A.09 AGRICULTURAL PRESERVE; ELIGIBILITY.
94.24    Subdivision 1. Basic requirements. An owner or owners of land that has been
94.25designated for exclusive long-term agricultural use under a plan submitted to or approved
94.26by the commissioner is eligible to apply for the creation of an agricultural preserve.
94.27Eligibility continues unless the commissioner determines that the plan and official
94.28controls do not address the elements contained in this chapter or unless the county fails to
94.29implement the plan and official controls as required by this chapter.
94.30    Subd. 2. Termination of eligibility. (a) A parcel of property enrolled under this
94.31section whose owner is subject to a final enforcement action for a violation of chapter 18B,
94.3218C, 103E, 103F, 103G, or 103H, or any rule adopted under these chapters including but
94.33not limited to the agricultural shoreland use standards in Minnesota Rules, chapter 6120,
94.34occurring on the parcel, shall be removed from the program.
95.1(b) For the purposes of this subdivision, "final enforcement action" means any
95.2administrative, civil, or criminal penalty other than an initial verbal or written warning.
95.3An enforcement action is not final until any time period for corrective action has expired,
95.4and until the completion or expiration of any applicable review or appeal procedure or
95.5period provided by law.
95.6(c) When a final enforcement action is taken based on a violation occurring on a
95.7parcel enrolled under sections 40A.09 to 40A.12, the law enforcement officer or other
95.8person enforcing the law or rule must notify the county assessor. The county assessor
95.9must then notify the property owner that the parcel is being removed from the program.
95.10Any parcel for which the assessor has been notified prior to March 1 of any year shall
95.11be removed from the program for taxes payable in the following year. The assessor shall
95.12calculate (i) the amount of any credit received under section 273.119 for the current year,
95.13and (ii) the difference between the actual tax on the parcel for the current year and the
95.14tax that would apply if the value was not restricted under this section, and multiply the
95.15result by the number of years that the parcel has been under its current ownership or
95.16five, whichever is less. The resulting amount plus any special assessments that have
95.17been deferred under this section shall be extended against the property on the tax list for
95.18the current year, provided that no interest or penalties shall be levied on the additional
95.19taxes if timely paid.
95.20(d) Termination of eligibility under this subdivision shall not affect the covenant
95.21required under section 40A.10. A parcel of property terminated under this subdivision may
95.22not be reenrolled for a period of three years, unless it has been sold or transferred so that it
95.23is no longer under the same ownership, in full or in part, as when the parcel was terminated.
95.24EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
95.25thereafter.

95.26    Sec. 2. Minnesota Statutes 2008, section 272.02, subdivision 7, is amended to read:
95.27    Subd. 7. Institutions of public charity. (a) Institutions of purely public charity that
95.28are exempt from federal income taxation under section 501(c)(3) of the Internal Revenue
95.29Code are exempt. if they meet the requirements of this subdivision. In determining
95.30whether real property is exempt under this subdivision, the following factors must be
95.31considered:
95.32(1) whether the stated purpose of the undertaking is to be helpful to others without
95.33immediate expectation of material reward;
95.34(2) whether the institution of public charity is supported by material donations, gifts,
95.35or government grants for services to the public in whole or in part;
96.1(3) whether a material number of the recipients of the charity receive benefits or
96.2services at reduced or no cost, or whether the organization provides services to the public
96.3that alleviate burdens or responsibilities that would otherwise be borne by the government;
96.4(4) whether the income received, including material gifts and donations, produces a
96.5profit to the charitable institution that is distributed to private interests;
96.6(5) whether the beneficiaries of the charity are restricted or unrestricted, and, if
96.7restricted, whether the class of persons to whom the charity is made available is one
96.8having a reasonable relationship to the charitable objectives; and
96.9(6) whether dividends, in form or substance, or assets upon dissolution, are available
96.10to private interests.
96.11A charitable organization must satisfy the factors in clauses (1) to (6) for its property
96.12to be exempt under this subdivision, unless there is a reasonable justification for failing to
96.13meet the factors in clause (2), (3), or (5). If there is reasonable justification for failing to
96.14meet the factors in clause (2), (3), or (5), an organization is a purely public charity under
96.15this subdivision without meeting those factors. After an exemption is properly granted
96.16under this subdivision, it will remain in effect unless there is a material change in facts.
96.17(b) For purposes of this subdivision, a grant is a written instrument or electronic
96.18document defining a legal relationship between a granting agency and a grantee when
96.19the principal purpose of the relationship is to transfer cash or something of value to the
96.20grantee to support a public purpose authorized by law in a general manner instead of
96.21acquiring by professional or technical contract, purchase, lease, or barter property or
96.22services for the direct benefit or use of the granting agency.
96.23(c) In determining whether rental housing property qualifies for exemption under
96.24this subdivision, the following are not gifts or donations to the owner of the rental housing:
96.25(1) rent assistance provided by the government to or on behalf of tenants; and
96.26(2) financing assistance or tax credits provided by the government to the owner on
96.27condition that specific units or a specific quantity of units be set aside for persons or
96.28families with certain income characteristics.
96.29EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
96.30thereafter.

96.31    Sec. 3. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
96.32to read:
96.33    Subd. 90. Nursing homes. A nursing home licensed under section 144A.02 or a
96.34boarding care home certified as a nursing facility under title 19 of the Social Security
96.35Act that is exempt from federal income taxation pursuant to section 501(c)(3) of the
97.1Internal Revenue Code is exempt from property taxation if the nursing home or boarding
97.2care home either:
97.3(1) is certified to participate in the medical assistance program under title 19 of
97.4the Social Security Act; or
97.5(2) certifies to the commissioner of revenue that it does not discharge residents
97.6due to the inability to pay.
97.7EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
97.8thereafter.

97.9    Sec. 4. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
97.10to read:
97.11    Subd. 91. Railroad wye connections. Any real or personal property of a railroad
97.12wye connection, including the track, ties, ballast, switch gear, and related improvements,
97.13is exempt if it meets all of the following: (1) is publicly owned; (2) is funded, in whole or
97.14in part, by state grants; (3) is located within the metropolitan area as defined in section
97.15473.121, subdivision 2; (4) includes a single track segment that is no longer than 2,500 feet
97.16in length; (5) connects intersecting rail lines; and (6) is constructed after January 1, 2009.
97.17EFFECTIVE DATE.This section is effective for assessment year 2009 and
97.18thereafter, for taxes payable in 2010 and thereafter.

97.19    Sec. 5. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
97.20to read:
97.21    Subd. 92. Electric generation facility; personal property. (a) Notwithstanding
97.22subdivision 9, clause (a), attached machinery and other personal property that is part of
97.23an electric generation facility that exceeds 150 megawatts of installed capacity, does
97.24not exceed 780 megawatts of summer capacity, and that meets the requirements of this
97.25subdivision, is exempt. At the start of construction, the facility must:
97.26(1) be designed to utilize natural gas as a primary fuel;
97.27(2) be owned by an entity other than a public utility as defined in section 216B.02,
97.28subdivision 4;
97.29(3) be located within five miles of two or more interstate natural gas pipelines;
97.30(4) be located within one mile of an existing electrical transmission substation with
97.31operating alternating current voltages of 115 kV, 345 kV, and 500 kV;
97.32(5) be designed to provide electrical capacity, energy, and ancillary services;
97.33(6) have satisfied all of the requirements under section 216B.243;
98.1(7) have executed an interconnection agreement with the Midwest Independent
98.2System Operator that does not require the acquisition of more than one mile of new
98.3electric transmission right-of-way within the county where the facility is located, and does
98.4not provide for any other new routes or corridors for future electric transmission lines in
98.5the county where the facility is located;
98.6(8) be located in a county with an essential services and transmission services
98.7ordinance;
98.8(9) have signed a development agreement with the county board in the county in
98.9which the facility is located. The development agreement must be adopted by a two-thirds
98.10vote of the county board, and must contain provisions ensuring that:
98.11(i) the facility is designed to use effluent from a wastewater treatment facility as its
98.12preferred water source and will not seek an exemption from legislative approval under
98.13section 103G.265, subdivision 3, paragraph (b);
98.14(ii) all processed wastewater discharge will be colocated with the outfall of a
98.15wastewater treatment facility; and
98.16(iii) penalties will be paid to the county for harm to any aquifer or surface water as a
98.17result of construction or operation and maintenance of the facility; and
98.18(10) have signed a development agreement with the township board in the township
98.19in which the facility is located containing provisions ensuring that noise and visual
98.20impacts of the facility are fully mitigated. The development agreement must be adopted
98.21by a two-thirds vote of the township board.
98.22(b) Construction of the facility must begin after March 1, 2010, and before March 1,
98.232014. Property eligible for this exemption does not include electric transmission lines and
98.24interconnections or gas pipelines and interconnections appurtenant to the facility.
98.25(c) The exemption granted under this subdivision is void if the Public Utilities
98.26Commission issues a route permit for an electric transmission line connected to the
98.27electric substation nearest the exempt facility on a route where no electric transmission
98.28line currently exists.
98.29EFFECTIVE DATE.This section is effective the day following final enactment.

98.30    Sec. 6. Minnesota Statutes 2008, section 272.029, subdivision 6, is amended to read:
98.31    Subd. 6. Distribution of revenues. Revenues from the taxes imposed under
98.32subdivision 5 must be part of the settlement between the county treasurer and the county
98.33auditor under section 276.09. The revenue must be distributed by the county auditor or the
98.34county treasurer to local taxing jurisdictions in which the wind energy conversion system
98.35is located as follows: beginning with distributions in 2006 2010, 80 percent to counties;
99.1and 20 percent to cities and townships; and for distributions occurring in 2006 to 2009, 80
99.2percent to counties; 14 percent to cities and townships; and six percent to school districts;
99.3and for distributions occurring in 2004 and 2005 in the same proportion that each of the
99.4local taxing jurisdiction's current year's net tax capacity based tax rate is to the current
99.5year's total local net tax capacity based rate.
99.6EFFECTIVE DATE.This section is effective the day following final enactment.

99.7    Sec. 7. Minnesota Statutes 2008, section 273.111, is amended by adding a subdivision
99.8to read:
99.9    Subd. 9a. Cross-compliance with agricultural chemical and water laws.
99.10(a) A parcel of property enrolled under this section whose owner is subject to a final
99.11enforcement action for a violation of chapter 18B, 18C, 103E, 103F, 103G, or 103H,
99.12or any rule adopted under these chapters including but not limited to the agricultural
99.13shoreland use standards in Minnesota Rules, chapter 6120, occurring on the parcel, shall
99.14be removed from the program.
99.15(b) For the purposes of this subdivision, "final enforcement action" means any
99.16administrative, civil, or criminal penalty other than an initial verbal or written warning.
99.17An enforcement action is not final until any time period for corrective action has expired,
99.18and until the completion or expiration of any applicable review or appeal procedure or
99.19period provided by law.
99.20(c) When a final enforcement action is taken based on a violation occurring on a
99.21parcel enrolled under this section, the law enforcement officer or other person enforcing
99.22the law or rule must notify the county assessor. The county assessor must then notify
99.23the property owner that the parcel is being removed from the program. Any parcel for
99.24which the assessor has been notified prior to March 1 of any year shall be removed from
99.25the program for taxes payable in the following year. All deferred taxes on the parcel
99.26during the current owner's time of ownership, but not to exceed five years, plus any
99.27special assessments that have been deferred, shall be extended against the property on the
99.28tax list for the current year, provided that no interest or penalties shall be levied on the
99.29additional taxes if timely paid.
99.30(d) A parcel of property terminated under this subdivision may not be reenrolled for
99.31a period of three years, unless it has been sold or transferred so that it is no longer under
99.32the same ownership, in full or in part, as when the parcel was terminated.
99.33EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
99.34thereafter.

100.1    Sec. 8. [273.115] PRESERVATION OF RIPARIAN BUFFERS.
100.2    Subdivision 1. Definitions. (a) For the purposes of this section, the following
100.3definitions apply.
100.4(b) "Riparian buffer" means a strip or area of deep-rooted, original native perennial
100.5vegetation or vegetation restored with plants or seeds that originate from sources as close
100.6to the site as possible, including trees, adjacent to public waters that extends a minimum
100.7of 50 and a maximum of 100 feet landward from the ordinary high water level.
100.8(c) "Public waters" has the same meaning as defined under section 103G.005,
100.9subdivision 15, excluding "wetlands," as defined under section 103G.005, subdivision 19,
100.10and "public waters wetlands," as defined under section 103G.005, subdivision 15a.
100.11(d) "Ordinary high water level" means the boundary of public waters, and shall be an
100.12elevation delineating the highest water level which has been maintained for a sufficient
100.13period of time to leave evidence upon the landscape, commonly that point where the
100.14natural vegetation changes from predominantly aquatic to predominantly terrestrial. For
100.15watercourses, the ordinary high water level is the elevation of the top of the bank of
100.16the channel. For reservoirs and flowages, the ordinary high water level is the operating
100.17elevation of the normal summer pool.
100.18(e) "Buffer maintenance" means:
100.19(1) inspecting the buffer periodically and identifying, repairing, and reseeding any
100.20eroded or damaged areas;
100.21(2) preventing or addressing any soil compaction from vehicles, livestock, and
100.22impervious surfaces that could inhibit infiltration or disrupt water flow patterns;
100.23(3) controlling weeds and managing any grazing livestock so as to minimize the
100.24removal or alteration of the perennial plant community; and
100.25(4) refraining from applying fertilizers, pesticides, or animal wastes to the buffer
100.26area, except to establish native vegetation.
100.27    Subd. 2. Requirements. (a) Land constituting a riparian buffer that is classified as
100.28class 2a under section 273.13, subdivision 23, or that is adjacent to land classified as class
100.292a, is entitled to valuation and tax deferment under this section if a covenant has been filed
100.30with the county assessor and recorded in the county where the property is located.
100.31(b) The covenant must state that the buffer will be maintained in a natural state and
100.32that annual buffer maintenance will be performed. The landowner must file an affidavit
100.33with the county assessor at least once every three years stating that the buffer has been
100.34maintained according to the definition in subdivision 1. If a landowner fails to meet
100.35this requirement, the assessor must issue a written warning. If an affidavit is not filed
100.36within 90 days of the written warning, the land shall be removed from the program. All
101.1deferred taxes on the property during the current owner's time of ownership shall be
101.2extended against the property on the tax list for the current year, provided that no interest
101.3or penalties shall be levied on the additional taxes if timely paid.
101.4(c) Land qualifying under this subdivision shall be liable only for the taxes
101.5determined based on the valuation prescribed in subdivision 3. All special assessments
101.6levied against the land after the property has been enrolled in the program shall be deferred
101.7until the property is withdrawn or becomes ineligible to continue in the program.
101.8(d) Real estate may not be enrolled for valuation and deferment under this section
101.9and section 273.111, 273.112, 273.114, or 273.117 concurrently. Land enrolled under
101.10section 273.111 that is withdrawn for enrollment under this subdivision shall not be
101.11required to pay additional taxes under section 273.111, subdivision 3a or 9.
101.12    Subd. 3. Determination of value. (a) Land for which an irrevocable covenant has
101.13been recorded must be valued at 25 percent of the average value per acre of class 2b
101.14rural vacant land in the surrounding area.
101.15(b) Land for which a revocable covenant has been recorded must be valued at 75
101.16percent of the average value per acre of class 2b rural vacant land in the surrounding
101.17area, provided that the covenant does not allow for its termination until at least 20 years
101.18from the date that it was originally recorded.
101.19(c) For the purposes of this subdivision, surrounding area means the city or township
101.20where the property is located, provided that there are at least ten other parcels containing
101.21class 2b land in the city or township; otherwise, "surrounding area" means the city or
101.22township where the property is located and all adjoining cities and townships within the
101.23same county.
101.24    Subd. 4. Separate determination of market value and tax. The assessor shall
101.25make a separate determination of the market value of the real estate based on its highest
101.26and best use. The tax based upon that value and the appropriate local tax rate applicable to
101.27the property in the taxing district shall be recorded on the property assessment records.
101.28    Subd. 5. Application and covenant agreement. (a) Application for deferment of
101.29taxes and assessments under this subdivision shall be filed by May 1 of the year prior to
101.30the year in which the taxes are payable. Any application filed under this subdivision and
101.31granted shall continue in effect for subsequent years until the termination of the covenant
101.32agreement under paragraph (b). The application must be filed with the county assessor on
101.33a form prescribed by the commissioner of revenue. The assessor may require proof by
101.34affidavit or otherwise that the property qualifies under subdivision 1.
102.1    (b) The owner of the property must sign a covenant agreement that is filed with the
102.2county assessor and recorded in the county where the property is located. The covenant
102.3agreement must include all of the following:
102.4    (1) legal description of the area to which the covenant applies;
102.5    (2) name and address of the owner;
102.6    (3) a statement that the land described in the covenant must be kept in a natural state,
102.7and that annual buffer maintenance will be performed, for the duration of the covenant;
102.8    (4) in the case of a revocable covenant under subdivision 3, paragraph (b), a
102.9statement that the landowner may terminate the covenant agreement by notifying the
102.10county assessor in writing four years in advance of the date of proposed termination,
102.11provided that the notice of intent to terminate may not be given at any time before the land
102.12has been subject to the covenant for a period of 16 years;
102.13    (5) a statement that the covenant is binding on the owner or the owner's successor or
102.14assigns and runs with the land; and
102.15    (6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as
102.16described in subdivision 2.
102.17(c) Once a revocable covenant has been terminated, the property covered by
102.18the covenant can never be re-enrolled under this subdivision unless it has been sold or
102.19otherwise transferred to a different owner.
102.20    Subd. 6. Additional taxes. Upon termination of a covenant agreement in
102.21subdivision 5, paragraph (b), clause (4), the land to which the covenant applied shall
102.22be subject to additional taxes in the amount equal to the difference between the taxes
102.23determined in accordance with subdivision 3 and the amount determined under subdivision
102.244, provided that the amount determined under subdivision 4 shall not be greater than it
102.25would have been had the actual bona fide sale price of the real property at an arm's-length
102.26transaction been used in lieu of the market value determined under subdivision 4. The
102.27additional taxes shall be extended against the property on the tax list for the current year,
102.28provided that no interest or penalties shall be levied on the additional taxes if timely paid
102.29and that the additional taxes shall only be levied with respect to the last seven years that
102.30the property has been valued and assessed under this section.
102.31    Subd. 7. Cross-compliance with agricultural chemical and water laws. (a) A
102.32parcel of property enrolled under this section whose owner or tenant is subject to a final
102.33enforcement action for a violation of chapter 18B, 18C, 103E, 103F, 103G, or 103H,
102.34or any rule adopted under these chapters including but not limited to the agricultural
102.35shoreland use standards in Minnesota Rules, chapter 6120, occurring on the parcel, shall
102.36be removed from the program.
103.1(b) For the purposes of this subdivision, "final enforcement action" means any
103.2administrative, civil, or criminal penalty or action other than an initial verbal or written
103.3warning. An enforcement action is not final until any time period for corrective action
103.4has expired, and until the completion or expiration of any applicable review or appeal
103.5procedure or period provided by law.
103.6    (c) When a final enforcement action is taken based on a violation occurring on a
103.7parcel enrolled under this section, the law enforcement officer or other person enforcing
103.8the law or rule must notify the county assessor. The county assessor must then notify
103.9the property owner that the parcel is being removed from the program. Any parcel for
103.10which the assessor has been notified prior to March 1 of any year shall be removed from
103.11the program for taxes payable in the following year, and subject to additional taxes as
103.12provided in subdivision 6.
103.13(d) Termination of eligibility under this subdivision shall not affect the covenant
103.14required under subdivision 5. A parcel of property terminated under this subdivision may
103.15not be reenrolled for a period of three years, unless it has been sold or transferred so that it
103.16is no longer under the same ownership, in full or in part, as when the parcel was terminated.
103.17    Subd. 8. Lien. Any additional taxes imposed under subdivision 6 or 7 shall be a lien
103.18upon the property assessed to the same extent and for the same duration as other taxes
103.19imposed on the property in this state. The tax shall be annually extended by the county
103.20auditor and, if and when payable, shall be collected and distributed in the manner provided
103.21by law for the collection and distribution of other property taxes.
103.22EFFECTIVE DATE.This section is effective for assessment year 2011 and
103.23thereafter, for taxes payable in 2012 and thereafter.

103.24    Sec. 9. Minnesota Statutes 2008, section 273.1231, subdivision 1, is amended to read:
103.25    Subdivision 1. Applicability. For purposes of sections 273.1231 to 273.1235
103.26273.1236, the following words, terms, and phrases have the meanings given them in this
103.27section unless the language or context clearly indicates that a different meaning is intended.
103.28EFFECTIVE DATE.This section is effective for assessment year 2009 and
103.29thereafter.

103.30    Sec. 10. Minnesota Statutes 2008, section 273.1232, subdivision 1, is amended to read:
103.31    Subdivision 1. Reassessments required. For the purposes of sections 273.1231 to
103.32273.1235 273.1236, the county assessor must reassess all damaged property in a disaster
103.33or emergency area, except that the commissioner of revenue shall reassess all property
103.34for which an application is submitted to the commissioner under section 273.1233 or
104.1273.1235 . As soon as practical, the assessor or commissioner of revenue must report
104.2the reassessed value to the county auditor.
104.3EFFECTIVE DATE.This section is effective for assessment year 2009 and
104.4thereafter.

104.5    Sec. 11. [273.1236] DISASTER-DAMAGED HOMES; PARTIAL VALUATION
104.6EXCLUSION.
104.7(a) A homestead property that (1) sustained physical damage from a disaster or
104.8emergency resulting in a reassessed market value that is at least $15,000 less than the
104.9market value of the property established for the January 2 assessment in the year in which
104.10the damage occurred, (2) has been substantially restored or rebuilt by the end of the
104.11year following the year in which the damage occurred, (3) has a gross living area after
104.12reconstruction that does not exceed 130 percent of the gross living area prior to the disaster
104.13or emergency, and (4) has an estimated market value for the assessment year following the
104.14year in which the restoration or reconstruction was substantially completed that exceeds
104.15its estimated market value established for the January 2 assessment in the year in which
104.16the damage occurred by at least $25,000 due to the restoration or reconstruction, is eligible
104.17for a valuation exclusion under this section for the two assessment years immediately
104.18following the year in which the restoration or reconstruction was completed.
104.19(b) The assessor shall determine the difference between the estimated market value
104.20established for the January 2 assessment in the year in which the damage occurred and the
104.21estimated market value established for the January 2 assessment in the year following the
104.22completion of the restoration or reconstruction.
104.23(c) In the first assessment year following the restoration or reconstruction, all of the
104.24difference identified under paragraph (b) shall be excluded in determining taxable market
104.25value. In the second assessment year following the restoration or reconstruction, half of
104.26the difference identified under paragraph (b) shall be excluded in determining taxable
104.27market value.
104.28(d) For the purposes of this section, "gross living area" includes only above-grade
104.29living area, and does not include any finished basement living area.
104.30(e) Application for the valuation exclusion under this section must be filed by
104.31January 2 of the year following the year in which the restoration or reconstruction was
104.32substantially completed. The application must be filed with the assessor of the county in
104.33which the property is located on the form prescribed by the commissioner of revenue.
105.1EFFECTIVE DATE.This section is effective for assessment year 2009 and
105.2thereafter. The application deadline in paragraph (e) is extended to June 30, 2009, for
105.3restoration or reconstruction substantially completed in 2008.

105.4    Sec. 12. Minnesota Statutes 2008, section 273.124, subdivision 1, is amended to read:
105.5    Subdivision 1. General rule. (a) Residential real estate that is occupied and used
105.6for the purposes of a homestead by its owner, who must be a Minnesota resident, is
105.7a residential homestead.
105.8    Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and
105.9used as a homestead by its owner, who must be a Minnesota resident, is an agricultural
105.10homestead.
105.11    Dates for establishment of a homestead and homestead treatment provided to
105.12particular types of property are as provided in this section.
105.13    Property held by a trustee under a trust is eligible for homestead classification if the
105.14requirements under this chapter are satisfied.
105.15    The assessor shall require proof, as provided in subdivision 13, of the facts upon
105.16which classification as a homestead may be determined. Notwithstanding any other law,
105.17the assessor may at any time require a homestead application to be filed in order to verify
105.18that any property classified as a homestead continues to be eligible for homestead status.
105.19Notwithstanding any other law to the contrary, the Department of Revenue may, upon
105.20request from an assessor, verify whether an individual who is requesting or receiving
105.21homestead classification has filed a Minnesota income tax return as a resident for the most
105.22recent taxable year for which the information is available.
105.23    When there is a name change or a transfer of homestead property, the assessor may
105.24reclassify the property in the next assessment unless a homestead application is filed to
105.25verify that the property continues to qualify for homestead classification.
105.26    (b) For purposes of this section, homestead property shall include property which
105.27is used for purposes of the homestead but is separated from the homestead by a road,
105.28street, lot, waterway, or other similar intervening property. The term "used for purposes
105.29of the homestead" shall include but not be limited to uses for gardens, garages, or other
105.30outbuildings commonly associated with a homestead, but shall not include vacant land
105.31held primarily for future development. In order to receive homestead treatment for
105.32the noncontiguous property, the owner must use the property for the purposes of the
105.33homestead, and must apply to the assessor, both by the deadlines given in subdivision
105.349. After initial qualification for the homestead treatment, additional applications for
105.35subsequent years are not required.
106.1    (c) Residential real estate that is occupied and used for purposes of a homestead by a
106.2relative of the owner is a homestead but only to the extent of the homestead treatment
106.3that would be provided if the related owner occupied the property. For purposes of this
106.4paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild,
106.5grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship
106.6may be by blood or marriage. Property that has been classified as seasonal residential
106.7recreational property at any time during which it has been owned by the current owner or
106.8spouse of the current owner will not be reclassified as a homestead unless it is occupied as
106.9a homestead by the owner; this prohibition also applies to property that, in the absence of
106.10this paragraph, would have been classified as seasonal residential recreational property at
106.11the time when the residence was constructed. Neither the related occupant nor the owner
106.12of the property may claim a property tax refund under chapter 290A for a homestead
106.13occupied by a relative. In the case of a residence located on agricultural land, only the
106.14house, garage, and immediately surrounding one acre of land shall be classified as a
106.15homestead under this paragraph, except as provided in paragraph (d). In the case of
106.16nonagricultural property, this paragraph only applies to applications approved before
106.17December 16, 2009.
106.18    (d) Agricultural property that is occupied and used for purposes of a homestead by
106.19a relative of the owner, is a homestead, only to the extent of the homestead treatment
106.20that would be provided if the related owner occupied the property, and only if all of the
106.21following criteria are met:
106.22    (1) the relative who is occupying the agricultural property is a son, daughter, brother,
106.23sister, grandson, granddaughter, father, or mother of the owner of the agricultural property
106.24or a son, daughter, brother, sister, grandson, or granddaughter of the spouse of the owner
106.25of the agricultural property;
106.26    (2) the owner of the agricultural property must be a Minnesota resident;
106.27    (3) the owner of the agricultural property must not receive homestead treatment on
106.28any other agricultural property in Minnesota; and
106.29    (4) the owner of the agricultural property is limited to only one agricultural
106.30homestead per family under this paragraph.
106.31    Neither the related occupant nor the owner of the property may claim a property
106.32tax refund under chapter 290A for a homestead occupied by a relative qualifying under
106.33this paragraph. For purposes of this paragraph, "agricultural property" means the house,
106.34garage, other farm buildings and structures, and agricultural land.
107.1    Application must be made to the assessor by the owner of the agricultural property to
107.2receive homestead benefits under this paragraph. The assessor may require the necessary
107.3proof that the requirements under this paragraph have been met.
107.4    (e) In the case of property owned by a property owner who is married, the assessor
107.5must not deny homestead treatment in whole or in part if only one of the spouses occupies
107.6the property and the other spouse is absent due to: (1) marriage dissolution proceedings,
107.7(2) legal separation, (3) employment or self-employment in another location, or (4) other
107.8personal circumstances causing the spouses to live separately, not including an intent to
107.9obtain two homestead classifications for property tax purposes. To qualify under clause
107.10(3), the spouse's place of employment or self-employment must be at least 50 miles distant
107.11from the other spouse's place of employment, and the homesteads must be at least 50 miles
107.12distant from each other. Homestead treatment, in whole or in part, shall not be denied to
107.13the owner's spouse who previously occupied the residence with the owner if the absence
107.14of the owner is due to one of the exceptions provided in this paragraph.
107.15    (f) The assessor must not deny homestead treatment in whole or in part if:
107.16    (1) in the case of a property owner who is not married, the owner is absent due to
107.17residence in a nursing home, boarding care facility, or an elderly assisted living facility
107.18property as defined in section 273.13, subdivision 25a, and the property is not otherwise
107.19occupied; or
107.20    (2) in the case of a property owner who is married, the owner or the owner's spouse
107.21or both are absent due to residence in a nursing home, boarding care facility, or an elderly
107.22assisted living facility property as defined in section 273.13, subdivision 25a, and the
107.23property is not occupied or is occupied only by the owner's spouse.
107.24    (g) If an individual is purchasing property with the intent of claiming it as a
107.25homestead and is required by the terms of the financing agreement to have a relative
107.26shown on the deed as a co-owner, the assessor shall allow a full homestead classification.
107.27This provision only applies to first-time purchasers, whether married or single, or to a
107.28person who had previously been married and is purchasing as a single individual for the
107.29first time. The application for homestead benefits must be on a form prescribed by the
107.30commissioner and must contain the data necessary for the assessor to determine if full
107.31homestead benefits are warranted.
107.32    (h) If residential or agricultural real estate is occupied and used for purposes of a
107.33homestead by a child of a deceased owner and the property is subject to jurisdiction of
107.34probate court, the child shall receive relative homestead classification under paragraph (c)
107.35or (d) to the same extent they would be entitled to it if the owner was still living, until
108.1the probate is completed. For purposes of this paragraph, "child" includes a relationship
108.2by blood or by marriage.
108.3    (i) If a single-family home, duplex, or triplex classified as either residential
108.4homestead or agricultural homestead is also used to provide licensed child care, the
108.5portion of the property used for licensed child care must be classified as a part of the
108.6homestead property.
108.7EFFECTIVE DATE.This section is effective the day following final enactment.

108.8    Sec. 13. Minnesota Statutes 2008, section 273.13, subdivision 25, is amended to read:
108.9    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
108.10units and used or held for use by the owner or by the tenants or lessees of the owner
108.11as a residence for rental periods of 30 days or more, excluding property qualifying for
108.12class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
108.13than hospitals exempt under section 272.02, and contiguous property used for hospital
108.14purposes, without regard to whether the property has been platted or subdivided. The
108.15market value of class 4a property has a class rate of 1.25 percent.
108.16    (b) Class 4b includes:
108.17    (1) residential real estate containing less than four units that does not qualify as class
108.184bb, other than seasonal residential recreational property;
108.19    (2) manufactured homes not classified under any other provision;
108.20    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
108.21farm classified under subdivision 23, paragraph (b) containing two or three units; and
108.22    (4) unimproved property that is classified residential as determined under subdivision
108.2333.
108.24    The market value of class 4b property has a class rate of 1.25 percent.
108.25    (c) Class 4bb includes:
108.26    (1) nonhomestead residential real estate containing one unit, other than seasonal
108.27residential recreational property; and
108.28    (2) a single family dwelling, garage, and surrounding one acre of property on a
108.29nonhomestead farm classified under subdivision 23, paragraph (b).
108.30    Class 4bb property has the same class rates as class 1a property under subdivision 22.
108.31    Property that has been classified as seasonal residential recreational property at
108.32any time during which it has been owned by the current owner or spouse of the current
108.33owner does not qualify for class 4bb.
108.34    (d) Class 4c property includes:
109.1    (1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
109.2(b), clause (1), real and personal property devoted to temporary and seasonal residential
109.3occupancy for recreation purposes, including real and personal property devoted to
109.4temporary and seasonal residential occupancy for recreation purposes and not devoted to
109.5commercial purposes for more than 250 days in the year preceding the year of assessment.
109.6For purposes of this clause, property is devoted to a commercial purpose on a specific
109.7day if any portion of the property is used for residential occupancy, and a fee is charged
109.8for residential occupancy. Class 4c property must contain three or more rental units. A
109.9"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
109.10camping site equipped with water and electrical hookups for recreational vehicles.
109.11Except for property described in item (iii), class 4c property must provide recreational
109.12activities such as renting ice fishing houses, boats and motors, snowmobiles, downhill or
109.13cross-country ski equipment; provide marina services, launch services, or guide services;
109.14or sell bait and fishing tackle. A camping pad offered for rent by a property that otherwise
109.15qualifies for class 4c is also class 4c regardless of the term of the rental agreement, as
109.16long as the use of the camping pad does not exceed 250 days. In order for a property to
109.17be classified as class 4c, seasonal residential recreational for commercial purposes under
109.18this clause, at least 40 percent of the annual gross lodging receipts related to the property
109.19must be from business conducted during 90 consecutive days and either (i) at least 60
109.20percent of all paid bookings by lodging guests during the year must be for periods of at
109.21least two consecutive nights; or (ii) at least 20 percent of the annual gross receipts must
109.22be from charges for rental of fish houses, boats and motors, snowmobiles, downhill or
109.23cross-country ski equipment, or charges for marina services, launch services, and guide
109.24services, or the sale of bait and fishing tackle; or (iii) the property contains 20 rental units
109.25or less, is devoted to temporary residential occupancy, is located in a township or a city
109.26that has a population of 2,500 or less, and is located outside the metropolitan area as
109.27defined under section 473.121, subdivision 2. For purposes of this determination, a paid
109.28booking of five or more nights shall be counted as two bookings. Class 4c also includes
109.29commercial use real property used exclusively for recreational purposes in conjunction
109.30with class 4c property devoted to temporary and seasonal residential occupancy for
109.31recreational purposes, up to a total of two acres, provided the property is not devoted
109.32to commercial recreational use for more than 250 days in the year preceding the year
109.33of assessment and is located within two miles of the class 4c property with which it is
109.34used. Owners of real and personal property devoted to temporary and seasonal residential
109.35occupancy for recreation purposes and all or a portion of which was devoted to commercial
109.36purposes for not more than 250 days in the year preceding the year of assessment desiring
110.1classification as class 4c, must submit a declaration to the assessor designating the cabins
110.2or units occupied for 250 days or less in the year preceding the year of assessment by
110.3January 15 of the assessment year. Those cabins or units and a proportionate share of the
110.4land on which they are located must be designated class 4c as otherwise provided. The
110.5remainder of the cabins or units and a proportionate share of the land on which they are
110.6located will be designated as class 3a. The owner of property desiring designation as class
110.74c property must provide guest registers or other records demonstrating that the units for
110.8which class 4c designation is sought were not occupied for more than 250 days in the
110.9year preceding the assessment if so requested. The portion of a property operated as a
110.10(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
110.11nonresidential facility operated on a commercial basis not directly related to temporary
110.12and seasonal residential occupancy for recreation purposes does not qualify for class 4c;
110.13    (2) qualified property used as a golf course if:
110.14    (i) it is open to the public on a daily fee basis. It may charge membership fees or
110.15dues, but a membership fee may not be required in order to use the property for golfing,
110.16and its green fees for golfing must be comparable to green fees typically charged by
110.17municipal courses; and
110.18    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
110.19    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
110.20with the golf course is classified as class 3a property;
110.21    (3) real property up to a maximum of three acres of land owned and used by a
110.22nonprofit community service oriented organization and that is not used for residential
110.23purposes on either a temporary or permanent basis, qualifies for class 4c provided that
110.24it meets either of the following:
110.25    (i) the property is not used for a revenue-producing activity for more than six days
110.26in the calendar year preceding the year of assessment; or
110.27    (ii) the organization makes annual charitable contributions and donations at least
110.28equal to the property's previous year's property taxes and the property is allowed to be
110.29used for public and community meetings or events for no charge, as appropriate to the
110.30size of the facility.
110.31    For purposes of this clause,
110.32    (A) "charitable contributions and donations" has the same meaning as lawful
110.33gambling purposes under section 349.12, subdivision 25, excluding those purposes
110.34relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
110.35    (B) "property taxes" excludes the state general tax;
111.1    (C) a "nonprofit community service oriented organization" means any corporation,
111.2society, association, foundation, or institution organized and operated exclusively for
111.3charitable, religious, fraternal, civic, or educational purposes, and which is exempt
111.4from federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal
111.5Revenue Code; and
111.6    (D) "revenue-producing activities" shall include but not be limited to property or that
111.7portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
111.8liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
111.9alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
111.10insurance business, or office or other space leased or rented to a lessee who conducts a
111.11for-profit enterprise on the premises.
111.12Any portion of the property qualifying under item (i) which is used for revenue-producing
111.13activities for more than six days in the calendar year preceding the year of assessment
111.14shall be assessed as class 3a. The use of the property for social events open exclusively
111.15to members and their guests for periods of less than 24 hours, when an admission is
111.16not charged nor any revenues are received by the organization shall not be considered a
111.17revenue-producing activity.
111.18    The organization shall maintain records of its charitable contributions and donations
111.19and of public meetings and events held on the property and make them available upon
111.20request any time to the assessor to ensure eligibility. An organization meeting the
111.21requirement under item (ii) must file an application by May 1 with the assessor for
111.22eligibility for the current year's assessment. The commissioner shall prescribe a uniform
111.23application form and instructions;
111.24    (4) postsecondary student housing of not more than one acre of land that is owned by
111.25a nonprofit corporation organized under chapter 317A and is used exclusively by a student
111.26cooperative, sorority, or fraternity for on-campus housing or housing located within two
111.27miles of the border of a college campus;
111.28    (5) manufactured home parks as defined in section 327.14, subdivision 3;
111.29    (6) real property that is actively and exclusively devoted to indoor fitness, health,
111.30social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
111.31and is located within the metropolitan area as defined in section 473.121, subdivision 2;
111.32    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
111.33under section 272.01, subdivision 2, and the land on which it is located, provided that:
111.34    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
111.35Airports Commission, or group thereof; and
112.1    (ii) the land lease, or any ordinance or signed agreement restricting the use of the
112.2leased premise, prohibits commercial activity performed at the hangar.
112.3    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
112.4be filed by the new owner with the assessor of the county where the property is located
112.5within 60 days of the sale;
112.6    (8) a privately owned noncommercial aircraft storage hangar not exempt under
112.7section 272.01, subdivision 2, and the land on which it is located, provided that:
112.8    (i) the land abuts a public airport; and
112.9    (ii) the owner of the aircraft storage hangar provides the assessor with a signed
112.10agreement restricting the use of the premises, prohibiting commercial use or activity
112.11performed at the hangar; and
112.12    (9) residential real estate, a portion of which is used by the owner for homestead
112.13purposes, and that is also a place of lodging, if all of the following criteria are met:
112.14    (i) rooms are provided for rent to transient guests that generally stay for periods
112.15of 14 or fewer days;
112.16    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
112.17in the basic room rate;
112.18    (iii) meals are not provided to the general public except for special events on fewer
112.19than seven days in the calendar year preceding the year of the assessment; and
112.20    (iv) the owner is the operator of the property.
112.21The market value subject to the 4c classification under this clause is limited to five rental
112.22units. Any rental units on the property in excess of five, must be valued and assessed as
112.23class 3a. The portion of the property used for purposes of a homestead by the owner must
112.24be classified as class 1a property under subdivision 22; and
112.25    (10) real property up to a maximum of three acres and operated as a restaurant
112.26as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake
112.27as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
112.28is either devoted to commercial purposes for not more than 250 consecutive days, or
112.29receives at least 60 percent of its annual gross receipts from business conducted during
112.30four consecutive months. Gross receipts from the sale of alcoholic beverages must be
112.31included in determining the property's qualification under subitem (B). The property's
112.32primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
112.33sales located on the premises must be excluded. Owners of real property desiring 4c
112.34classification under this clause must submit an annual declaration to the assessor by
112.35February 1 of the current assessment year, based on the property's relevant information for
112.36the preceding assessment year.
113.1    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
113.2parcel of seasonal residential recreational property not used for commercial purposes has
113.3the same class rates as class 4bb property, (ii) manufactured home parks assessed under
113.4clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
113.5residential recreational property has a class rate of one percent for the first $500,000 of
113.6market value, and 1.25 percent for the remaining market value, (iv) the market value of
113.7property described in clause (4) has a class rate of one percent, (v) the market value of
113.8property described in clauses (2), (6), and (10) has a class rate of 1.25 percent, and (vi)
113.9that portion of the market value of property in clause (9) qualifying for class 4c property
113.10has a class rate of 1.25 percent.
113.11    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
113.12by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
113.13of the units in the building qualify as low-income rental housing units as certified under
113.14section 273.128, subdivision 3, only the proportion of qualifying units to the total number
113.15of units in the building qualify for class 4d. The remaining portion of the building shall be
113.16classified by the assessor based upon its use. Class 4d also includes the same proportion of
113.17land as the qualifying low-income rental housing units are to the total units in the building.
113.18For all properties qualifying as class 4d, the market value determined by the assessor must
113.19be based on the normal approach to value using normal unrestricted rents.
113.20    Class 4d property has a class rate of 0.75 percent.
113.21EFFECTIVE DATE.This section is effective for assessment year 2009, taxes
113.22payable in 2010, and thereafter. For assessment year 2009 only, the January 15 application
113.23date under paragraph (d), clause (1), shall be extended to July 1, 2009, for property
113.24qualifying for the 2009 assessment under paragraph (d), clause (1), item (iii).

113.25    Sec. 14. Minnesota Statutes 2008, section 273.13, subdivision 34, is amended to read:
113.26    Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value
113.27of property owned by a veteran or by the veteran and the veteran's spouse qualifying
113.28for homestead classification under subdivision 22 or 23 is excluded in determining the
113.29property's taxable market value if it serves as the homestead of a military veteran, as
113.30defined in section 197.447, who has a service-connected disability of 70 percent or more.
113.31To qualify for exclusion under this subdivision, the veteran must have been honorably
113.32discharged from the United States armed forces, as indicated by United States Government
113.33Form DD214 or other official military discharge papers, and must be certified by the
113.34United States Veterans Administration as having a service-connected disability.
114.1    (b)(1) For a disability rating of 70 percent or more, $150,000 of market value is
114.2excluded, except as provided in clause (2); and
114.3    (2) for a total (100 percent) and permanent disability, $300,000 of market value is
114.4excluded.
114.5    (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
114.6clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
114.7spouse holds the legal or beneficial title to the homestead and permanently resides there,
114.8the exclusion shall carry over to the benefit of the veteran's spouse for one five additional
114.9assessment year or years or until such time as the spouse sells, transfers, or otherwise
114.10disposes of the property or remarries, whichever comes first.
114.11    (d) In the case of an agricultural homestead, only the portion of the property
114.12consisting of the house and garage and immediately surrounding one acre of land qualifies
114.13for the valuation exclusion under this subdivision.
114.14    (e) A property qualifying for a valuation exclusion under this subdivision is not
114.15eligible for the credit under section 273.1384, subdivision 1, or classification under
114.16subdivision 22, paragraph (b).
114.17    (f) To qualify for a valuation exclusion under this subdivision a property owner must
114.18apply to the assessor by July 1 of each assessment year, except that an annual reapplication
114.19is not required once a property has been accepted for a valuation exclusion under paragraph
114.20(b), clause (2), and the property continues to qualify until there is a change in ownership.
114.21EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
114.22thereafter.

114.23    Sec. 15. Minnesota Statutes 2008, section 273.1393, is amended to read:
114.24273.1393 COMPUTATION OF NET PROPERTY TAXES.
114.25    Notwithstanding any other provisions to the contrary, "net" property taxes are
114.26determined by subtracting the credits in the order listed from the gross tax:
114.27    (1) disaster credit as provided in sections 273.1231 to 273.1235;
114.28    (2) powerline credit as provided in section 273.42;
114.29    (3) agricultural preserves credit as provided in section 473H.10;
114.30    (4) enterprise zone credit as provided in section 469.171;
114.31    (5) disparity reduction credit;
114.32    (6) conservation tax credit as provided in section 273.119;
114.33    (7) homestead and agricultural credits as provided in section 273.1384;
114.34    (8) taconite homestead credit as provided in section 273.135; and
114.35    (9) supplemental homestead credit as provided in section 273.1391; and.
115.1    (10) the bovine tuberculosis zone credit, as provided in section 273.113.
115.2    The combination of all property tax credits must not exceed the gross tax amount.
115.3EFFECTIVE DATE.This section is effective for property taxes payable in 2010
115.4and thereafter.

115.5    Sec. 16. Minnesota Statutes 2008, section 275.025, subdivision 1, is amended to read:
115.6    Subdivision 1. Levy amount. (a) The state general levy is levied against
115.7commercial-industrial property and seasonal residential recreational property, as defined
115.8in this section. The state general levy base amount is $592,000,000 for taxes payable in
115.92002. For taxes payable in subsequent years, the levy base amount is increased each year
115.10by multiplying the levy base amount for the prior year by the sum of one plus the rate of
115.11increase, if any, in the implicit price deflator for government consumption expenditures
115.12and gross investment for state and local governments prepared by the Bureau of Economic
115.13Analysts of the United States Department of Commerce for the 12-month period ending
115.14March 31 of the year prior to the year the taxes are payable. The tax under this section is
115.15not treated as a local tax rate under section 469.177 and is not the levy of a governmental
115.16unit under chapters 276A and 473F.
115.17(b) The commissioner shall increase or decrease the preliminary or final rate for a
115.18year as necessary to account for errors and tax base changes that affected a preliminary or
115.19final rate for either of the two preceding years. Adjustments are allowed to the extent that
115.20the necessary information is available to the commissioner at the time the rates for a year
115.21must be certified, and for the following reasons:
115.22(1) an erroneous report of taxable value by a local official;
115.23(2) an erroneous calculation by the commissioner; and
115.24(3) an increase or decrease in taxable value for commercial-industrial or seasonal
115.25residential recreational property reported on the abstracts of tax lists submitted under
115.26section 275.29 that was not reported on the abstracts of assessment submitted under
115.27section 270C.89 for the same year.
115.28The commissioner may, but need not, make adjustments if the total difference in the tax
115.29levied for the year would be less than $100,000.
115.30(c) In setting the rate, for taxes payable in 2010 only, the commissioner shall
115.31exclude the tax capacity of property described in section 473.625 from the tax base. The
115.32amount levied against property described in section 473.625 for taxes payable in 2010
115.33shall be added to the 2010 base amount before inflating to the 2011 levy amount under
115.34paragraph (a).
115.35EFFECTIVE DATE.This section is effective beginning for taxes payable in 2010.

116.1    Sec. 17. Minnesota Statutes 2008, section 275.025, subdivision 2, is amended to read:
116.2    Subd. 2. Commercial-industrial tax capacity. For the purposes of this section,
116.3"commercial-industrial tax capacity" means the tax capacity of all taxable property
116.4classified as class 3 or class 5(1) under section 273.13, except for electric generation
116.5attached machinery under class 3 and property described in section 473.625. County
116.6commercial-industrial tax capacity amounts are not adjusted for the captured net tax
116.7capacity of a tax increment financing district under section 469.177, subdivision 2, the
116.8net tax capacity of transmission lines deducted from a local government's total net tax
116.9capacity under section 273.425, or fiscal disparities contribution and distribution net
116.10tax capacities under chapter 276A or 473F.
116.11EFFECTIVE DATE.This section is effective beginning for taxes payable in 2010.

116.12    Sec. 18. Minnesota Statutes 2008, section 276.04, subdivision 2, is amended to read:
116.13    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the
116.14printing of the tax statements. The commissioner of revenue shall prescribe the form of
116.15the property tax statement and its contents. The tax statement must not state or imply
116.16that property tax credits are paid by the state of Minnesota. The statement must contain
116.17a tabulated statement of the dollar amount due to each taxing authority and the amount
116.18of the state tax from the parcel of real property for which a particular tax statement is
116.19prepared. The dollar amounts attributable to the county, the state tax, the voter approved
116.20school tax, the other local school tax, the township or municipality, and the total of
116.21the metropolitan special taxing districts as defined in section 275.065, subdivision 3,
116.22paragraph (i), must be separately stated. The amounts due all other special taxing districts,
116.23if any, may be aggregated except that any levies made by the regional rail authorities in the
116.24county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
116.25398A shall be listed on a separate line directly under the appropriate county's levy. If the
116.26county levy under this paragraph includes an amount for a lake improvement district as
116.27defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
116.28must be separately stated from the remaining county levy amount. In the case of Ramsey
116.29County, if the county levy under this paragraph includes an amount for public library
116.30service under section 134.07, the amount attributable for that purpose may be separated
116.31from the remaining county levy amount. The amount of the tax on homesteads qualifying
116.32under the senior citizens' property tax deferral program under chapter 290B is the total
116.33amount of property tax before subtraction of the deferred property tax amount. The
116.34amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any,
116.35must also be separately stated. The dollar amounts, including the dollar amount of any
117.1special assessments, may be rounded to the nearest even whole dollar. For purposes of this
117.2section whole odd-numbered dollars may be adjusted to the next higher even-numbered
117.3dollar. The amount of market value excluded under section 273.11, subdivision 16, if any,
117.4must also be listed on the tax statement.
117.5    (b) The property tax statements for manufactured homes and sectional structures
117.6taxed as personal property shall contain the same information that is required on the
117.7tax statements for real property.
117.8    (c) Real and personal property tax statements must contain the following information
117.9in the order given in this paragraph. The information must contain the current year tax
117.10information in the right column with the corresponding information for the previous year
117.11in a column on the left:
117.12    (1) the property's estimated market value under section 273.11, subdivision 1;
117.13    (2) the property's taxable market value after reductions under section 273.11,
117.14subdivisions 1a and 16 ;
117.15    (3) the property's gross tax, before credits;
117.16    (4) for homestead residential and agricultural properties, the credits under section
117.17273.1384 ;
117.18    (5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
117.19273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
117.20credit received under section 273.135 must be separately stated and identified as "taconite
117.21tax relief"; and
117.22    (6) the net tax payable in the manner required in paragraph (a).
117.23    (d) If the county uses envelopes for mailing property tax statements and if the county
117.24agrees, a taxing district may include a notice with the property tax statement notifying
117.25taxpayers when the taxing district will begin its budget deliberations for the current
117.26year, and encouraging taxpayers to attend the hearings. If the county allows notices to
117.27be included in the envelope containing the property tax statement, and if more than
117.28one taxing district relative to a given property decides to include a notice with the tax
117.29statement, the county treasurer or auditor must coordinate the process and may combine
117.30the information on a single announcement.
117.31EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
117.32thereafter.

117.33    Sec. 19. Minnesota Statutes 2008, section 279.10, is amended to read:
117.34279.10 PUBLICATION CORRECTED.
118.1Immediately after preparing forms for printing such notice and list, and at least five
118.2days before the first day for the publication thereof, every such publisher shall furnish
118.3proof of the proposed publication to the county auditor for correction. When such the copy
118.4has been corrected, the auditor shall return the same it to the printer, who shall publish it
118.5as corrected. On the first day on which such the notice and list are published, the publisher
118.6shall mail a copy of the newspaper containing the same the notice and list to the auditor. If
118.7during the publication of the notice and list, or within ten days after the last publication
118.8thereof, the auditor shall discover discovers that such the publication is invalid contains an
118.9error, the auditor shall forthwith direct the publisher to republish the same as corrected
118.10publish the correct information for an additional period of two weeks. The auditor does
118.11not have to direct the publisher to republish the entire list. The publisher, if not neglectful,
118.12shall be is entitled to the same compensation as allowed by law for the original publication
118.13of the corrected information, but shall receive no further compensation therefor if such the
118.14 republication is necessary by reason of the neglect of the publisher.
118.15EFFECTIVE DATE.This section is effective the day following final enactment.

118.16    Sec. 20. Minnesota Statutes 2008, section 282.08, is amended to read:
118.17282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.
118.18    The net proceeds from the sale or rental of any parcel of forfeited land, or from the
118.19sale of products from the forfeited land, must be apportioned by the county auditor to the
118.20taxing districts interested in the land, as follows:
118.21    (1) the portion required to pay any amounts included in the appraised value
118.22under section 282.01, subdivision 3, as representing increased value due to any public
118.23improvement made after forfeiture of the parcel to the state, but not exceeding the
118.24amount certified by the appropriate governmental authority must be apportioned to the
118.25governmental subdivision entitled to it;
118.26    (2) the portion required to pay any amount included in the appraised value under
118.27section 282.019, subdivision 5, representing increased value due to response actions
118.28taken after forfeiture of the parcel to the state, but not exceeding the amount of expenses
118.29certified by the Pollution Control Agency or the commissioner of agriculture, must be
118.30apportioned to the agency or the commissioner of agriculture and deposited in the fund
118.31from which the expenses were paid;
118.32    (3) the portion of the remainder required to discharge any special assessment
118.33chargeable against the parcel for drainage or other purpose whether due or deferred at the
118.34time of forfeiture, must be apportioned to the governmental subdivision entitled to it; and
118.35    (4) any balance must be apportioned as follows:
119.1    (i)(A) Except as provided in subitem (B), the county board may annually by
119.2resolution set aside no more than 30 percent of the receipts remaining to be used for forest
119.3development on tax-forfeited land and dedicated memorial forests, to be expended under
119.4the supervision of the county board. It must be expended only on projects improving the
119.5health and management of the forest resource.
119.6(B) The county board is authorized to use some of the money set aside under subitem
119.7(A) to replace all or a portion of the amount of aid or credit reimbursement that the county
119.8was to receive under sections 273.1384 and 477A.0124, but did not receive due to aid cuts
119.9or unallotment from the state. Within six months of the actual aid or credit reimbursement
119.10loss, the county board may adopt a resolution transferring money from this fund to the
119.11county's general fund, not to exceed the amount of aid or credit reimbursement loss to the
119.12county. This subitem expires January 1, 2012.
119.13    (ii) The county board may annually by resolution set aside no more than 20 percent
119.14of the receipts remaining to be used for the acquisition and maintenance of county parks
119.15or recreational areas as defined in sections 398.31 to 398.36, to be expended under the
119.16supervision of the county board.
119.17    (iii) Any balance remaining must be apportioned as follows: county, 40 percent;
119.18town or city, 20 percent; and school district, 40 percent, provided, however, that in
119.19unorganized territory that portion which would have accrued to the township must be
119.20administered by the county board of commissioners.
119.21EFFECTIVE DATE.This section is effective the day following final enactment.

119.22    Sec. 21. Minnesota Statutes 2008, section 290B.03, subdivision 1, is amended to read:
119.23    Subdivision 1. Program qualifications. The qualifications for the senior citizens'
119.24property tax deferral program are as follows:
119.25(1) the property must be owned and occupied as a homestead by a person 65 years
119.26of age or older. In the case of a married couple, both at least one of the spouses must
119.27be at least 65 years old at the time the first property tax deferral is granted, regardless
119.28of whether the property is titled in the name of one spouse or both spouses, or titled in
119.29another way that permits the property to have homestead status, and the other spouse
119.30must be at least 62 years of age;
119.31(2) the total household income of the qualifying homeowners, as defined in section
119.32290A.03, subdivision 5 , for the calendar year preceding the year of the initial application
119.33may not exceed $60,000 $75,000;
120.1(3) the homestead must have been owned and occupied as the homestead of at
120.2least one of the qualifying homeowners for at least 15 ten years prior to the year the
120.3initial application is filed;
120.4(4) there are no state or federal tax liens or judgment liens on the homesteaded
120.5property;
120.6(5) there are no mortgages or other liens on the property that secure future advances,
120.7except for those subject to credit limits that result in compliance with clause (6); and
120.8(6) the total unpaid balances of debts secured by mortgages and other liens on the
120.9property, including unpaid and delinquent special assessments and interest and any
120.10delinquent property taxes, penalties, and interest, but not including property taxes payable
120.11during the year, does not exceed 75 percent of the assessor's estimated market value for
120.12the year.
120.13EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

120.14    Sec. 22. Minnesota Statutes 2008, section 290B.04, subdivision 3, is amended to read:
120.15    Subd. 3. Excess-income certification by taxpayer. A taxpayer whose initial
120.16application has been approved under subdivision 2 shall notify the commissioner of
120.17revenue in writing by July 1 if the taxpayer's household income for the preceding calendar
120.18year exceeded $60,000 $75,000. The certification must state the homeowner's total
120.19household income for the previous calendar year. No property taxes may be deferred
120.20under this chapter in any year following the year in which a program participant filed
120.21or should have filed an excess-income certification under this subdivision, unless the
120.22participant has filed a resumption of eligibility certification as described in subdivision 4.
120.23EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

120.24    Sec. 23. Minnesota Statutes 2008, section 290B.04, subdivision 4, is amended to read:
120.25    Subd. 4. Resumption of eligibility certification by taxpayer. A taxpayer who has
120.26previously filed an excess-income certification under subdivision 3 may resume program
120.27participation if the taxpayer's household income for a subsequent year is $60,000 $75,000
120.28or less. If the taxpayer chooses to resume program participation, the taxpayer must notify
120.29the commissioner of revenue in writing by July 1 of the year following a calendar year in
120.30which the taxpayer's household income is $60,000 $75,000 or less. The certification must
120.31state the taxpayer's total household income for the previous calendar year. Once a taxpayer
120.32resumes participation in the program under this subdivision, participation will continue
120.33until the taxpayer files a subsequent excess-income certification under subdivision 3 or
120.34until participation is terminated under section 290B.08, subdivision 1.
121.1EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

121.2    Sec. 24. Minnesota Statutes 2008, section 290B.05, subdivision 1, is amended to read:
121.3    Subdivision 1. Determination by commissioner. The commissioner shall
121.4determine each qualifying homeowner's "annual maximum property tax amount"
121.5following approval of the homeowner's initial application and following the receipt of a
121.6resumption of eligibility certification. The "annual maximum property tax amount" equals
121.7three percent of the homeowner's total household income for the year preceding either the
121.8initial application or the resumption of eligibility certification, whichever is applicable.
121.9Following approval of the initial application, the commissioner shall determine the
121.10qualifying homeowner's "maximum allowable deferral." No tax may be deferred relative
121.11to the appropriate assessment year for any homeowner whose total household income
121.12for the previous year exceeds $60,000 $75,000. No tax shall be deferred in any year in
121.13which the homeowner does not meet the program qualifications in section 290B.03. The
121.14maximum allowable total deferral is equal to 75 percent of the assessor's estimated market
121.15value for the year, less the balance of any mortgage loans and other amounts secured by
121.16liens against the property at the time of application, including any unpaid and delinquent
121.17special assessments and interest and any delinquent property taxes, penalties, and interest,
121.18but not including property taxes payable during the year.
121.19EFFECTIVE DATE.This section is effective July 1, 2009, and thereafter.

121.20    Sec. 25. Minnesota Statutes 2008, section 290C.07, is amended to read:
121.21290C.07 CALCULATION OF INCENTIVE PAYMENT.
121.22    An approved claimant under the sustainable forest incentive program is eligible to
121.23receive an annual payment. The payment shall equal the greater of:
121.24    (1) the difference between the property tax that would be paid on the land using the
121.25previous year's statewide average total township tax rate and the class rate for class 2b
121.26timberland under section 273.13, subdivision 23, paragraph (b), if the land were valued
121.27at (i) the average statewide timberland market value per acre calculated under section
121.28290C.06 , and (ii) the average statewide timberland current use value per acre calculated
121.29under section 290C.02, subdivision 5; or
121.30    (2) two-thirds of the property tax amount determined by using the previous year's
121.31statewide average total township tax rate, the estimated market value per acre as calculated
121.32in section 290C.06, and the class rate for 2b timberland under section 273.13, subdivision
121.3323 , paragraph (b), provided that the payment shall be no less greater than $7 $6 per acre
122.1for each acre enrolled in the sustainable forest incentive program and the maximum annual
122.2payment per claimant shall be $400,000.
122.3EFFECTIVE DATE.This section is effective for payments made in 2010 and
122.4thereafter.

122.5    Sec. 26. Minnesota Statutes 2008, section 428A.101, is amended to read:
122.6428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
122.7GENERAL LAW.
122.8The establishment of a new special service district after June 30, 2009 2013, requires
122.9enactment of a special law authorizing the establishment.
122.10EFFECTIVE DATE.This section is effective the day following final enactment.

122.11    Sec. 27. Minnesota Statutes 2008, section 428A.21, is amended to read:
122.12428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER
122.13GENERAL LAW.
122.14The establishment of a new housing improvement area after June 30, 2009 2012,
122.15requires enactment of a special law authorizing the establishment of the area.
122.16EFFECTIVE DATE.This section is effective the day following final enactment.

122.17    Sec. 28. Minnesota Statutes 2008, section 429.011, subdivision 2a, is amended to read:
122.18    Subd. 2a. Municipality; certain counties. "Municipality" also includes the
122.19following:
122.20(1) a county in the case of construction, reconstruction, or improvement of a county
122.21state-aid highway or;
122.22(2) a county highway as defined in section 160.02 including curbs and gutters and
122.23storm sewers;
122.24(3) a county exercising its powers and duties under section 444.075, subdivision
122.251 ; and
122.26(4) a county for expenses not paid for under section 403.113, subdivision 3,
122.27paragraph (b), clause (3);
122.28(5) a county in the case of the abatement of nuisances; and
122.29(6) a county in the case of the correction of environmental, wetland, or land use
122.30violations.
122.31EFFECTIVE DATE.This section is effective the day following final enactment.

122.32    Sec. 29. Minnesota Statutes 2008, section 429.021, subdivision 1, is amended to read:
123.1    Subdivision 1. Improvements authorized. The council of a municipality shall have
123.2power to make the following improvements:
123.3(1) To acquire, open, and widen any street, and to improve the same by constructing,
123.4reconstructing, and maintaining sidewalks, pavement, gutters, curbs, and vehicle parking
123.5strips of any material, or by grading, graveling, oiling, or otherwise improving the same,
123.6including the beautification thereof and including storm sewers or other street drainage
123.7and connections from sewer, water, or similar mains to curb lines.
123.8(2) To acquire, develop, construct, reconstruct, extend, and maintain storm and
123.9sanitary sewers and systems, including outlets, holding areas and ponds, treatment plants,
123.10pumps, lift stations, service connections, and other appurtenances of a sewer system,
123.11within and without the corporate limits.
123.12(3) To construct, reconstruct, extend, and maintain steam heating mains.
123.13(4) To install, replace, extend, and maintain street lights and street lighting systems
123.14and special lighting systems.
123.15(5) To acquire, improve, construct, reconstruct, extend, and maintain water works
123.16systems, including mains, valves, hydrants, service connections, wells, pumps, reservoirs,
123.17tanks, treatment plants, and other appurtenances of a water works system, within and
123.18without the corporate limits.
123.19(6) To acquire, improve and equip parks, open space areas, playgrounds, and
123.20recreational facilities within or without the corporate limits.
123.21(7) To plant trees on streets and provide for their trimming, care, and removal.
123.22(8) To abate nuisances and to drain swamps, marshes, and ponds on public or private
123.23property and to fill the same.
123.24(9) To construct, reconstruct, extend, and maintain dikes and other flood control
123.25works.
123.26(10) To construct, reconstruct, extend, and maintain retaining walls and area walls.
123.27(11) To acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and
123.28promote a pedestrian skyway system. Such improvement may be made upon a petition
123.29pursuant to section 429.031, subdivision 3.
123.30(12) To acquire, construct, reconstruct, extend, operate, maintain, and promote
123.31underground pedestrian concourses.
123.32(13) To acquire, construct, improve, alter, extend, operate, maintain, and promote
123.33public malls, plazas or courtyards.
123.34(14) To construct, reconstruct, extend, and maintain district heating systems.
124.1(15) To construct, reconstruct, alter, extend, operate, maintain, and promote fire
124.2protection systems in existing buildings, but only upon a petition pursuant to section
124.3429.031, subdivision 3 .
124.4(16) To acquire, construct, reconstruct, improve, alter, extend, and maintain highway
124.5sound barriers.
124.6(17) To improve, construct, reconstruct, extend, and maintain gas and electric
124.7distribution facilities owned by a municipal gas or electric utility.
124.8(18) To purchase, install, and maintain signs, posts, and other markers for addressing
124.9related to the operation of enhanced 911 telephone service.
124.10(19) To improve, construct, extend, and maintain facilities for Internet access and
124.11other communications purposes, if the council finds that:
124.12(i) the facilities are necessary to make available Internet access or other
124.13communications services that are not and will not be available through other providers or
124.14the private market in the reasonably foreseeable future; and
124.15(ii) the service to be provided by the facilities will not compete with service provided
124.16by private entities.
124.17(20) To assess affected property owners for all or a portion of the costs agreed to
124.18with an electric utility, telecommunications carrier, or cable system operator to bury or
124.19alter a new or existing distribution system within the public right-of-way that exceeds the
124.20utility's design and construction standards, or those set by law, tariff, or franchise, but only
124.21upon petition under section 429.031, subdivision 3.
124.22(21) To correct environmental, wetland, or land use violations.
124.23EFFECTIVE DATE.This section is effective the day following final enactment.

124.24    Sec. 30. [435.39] MUNICIPAL STREET IMPROVEMENT DISTRICTS.
124.25    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
124.26have the meanings given them.
124.27(b) "Class of property" mean classes 1 through 5 under section 273.13, but without
124.28regard to subclasses, and tax exempt property may be treated as an additional class, if the
124.29city elects to subject tax exempt property to the fee.
124.30(c) "Governing body" means the city council of a municipality.
124.31(d) "Improvements" means construction, reconstruction, and facility upgrades
124.32involving: right-of-way acquisition; paving; curbs and gutters; bridges and culverts and
124.33their repair; milling; overlaying; drainage and storm sewers; excavation; base work;
124.34subgrade corrections; street lighting; traffic signals; signage; sidewalks; pavement
124.35markings; boulevard and easement restoration; impact mitigation; connection and
125.1reconnection of utilities; turn lanes; medians; street and alley returns; retaining walls;
125.2fences; lane additions; and fixed transit infrastructure, trails, or pathways. "Fixed transit
125.3infrastructure" does not include commuter rail rolling stock, light rail vehicles, or
125.4transit way buses; capital costs for park-and-ride facilities; feasibility studies, planning,
125.5alternative analyses, environmental studies, engineering, or construction of transit ways;
125.6or operating assistance for transit ways.
125.7(e) "Maintenance" means striping, seal coating, crack sealing, pavement repair,
125.8sidewalk maintenance, signal maintenance, street light maintenance, and signage.
125.9(f) "Municipal street" means a street, alley, or public way in which the municipality
125.10is the road authority with powers conferred by section 429.021.
125.11(g) "Municipality" means a home rule charter or statutory city.
125.12(g) "Street improvement district" means a geographic area designated by a
125.13municipality within which street improvements and maintenance may be undertaken and
125.14financed according to this section.
125.15    Subd. 2. Authorization. A municipality may establish by ordinance municipal
125.16street improvement districts and may defray all or part of the total costs of municipal street
125.17improvements and maintenance by apportioning street improvement fees to all of the
125.18parcels located in the district. In establishing the boundaries of the district, the city may
125.19not exclude from the district or imposition of the fee any class or parcel of property that is
125.20served by the municipal street on an equal basis with other classes or parcels of property
125.21included in the district, except this limitation does not apply to tax exempt property.
125.22    Subd. 3. Uniformity. (a) The total costs of municipal street improvements and
125.23maintenance must be apportioned to all parcels or tracts of land located in the established
125.24street improvement district on a uniform basis within each class of property.
125.25(b) The method of apportioning costs must not apportion costs to any class of
125.26property at a ratio of more than 2 to 1, relative to the rate for the property in any other
125.27class. The limit under this paragraph does not apply to any fees that the municipality
125.28elects to impose on tax exempt property.
125.29    Subd. 4. Adoption of plan. (a) Before establishing a municipal street improvement
125.30district or authorizing a street improvement fee, a municipality must propose and adopt
125.31a street improvement plan that:
125.32(1) identifies and estimates the costs of proposed improvements and maintenance
125.33for the life of the district;
125.34(2) identifies the location of the municipal street improvement district, which must
125.35be limited to parcels that are served by the improvements to be constructed or maintained
125.36by the street improvement district; and
126.1(3) specifies the manner in which costs will be apportioned among the parcels in
126.2the district under subdivision 3.
126.3(b) Notice of a public hearing on the proposed plan must be given by mail to all
126.4affected landowners at least ten days before the hearing and posted for at least ten days
126.5before the hearing. The notice must include a description of the manner in which the fees
126.6would be imposed and illustrative examples of the amount of fees for average parcels for
126.7each class of property in the district. At the public hearing, the governing body must
126.8present the plan and all affected landowners in attendance must have the opportunity to
126.9comment before the governing body considers adoption of the plan.
126.10    Subd. 5. Use of fees. Revenues collected from property in a district from the
126.11fee authorized in this section must be placed in a separate account and be used only
126.12for projects located within that same district and identified in the municipal street
126.13improvement district plan.
126.14    Subd. 6. Collection; up to ten years. (a) The ordinance adopted under this section
126.15must provide for the billing and payment of the fee on a monthly, quarterly, or other basis
126.16as directed by the governing body. The governing body may collect municipal street
126.17improvement fees within a street improvement district for up to a maximum of ten years,
126.18which is the maximum duration of the district.
126.19    (b) Fees that, as of October 15 of each calendar year, have remained unpaid for at
126.20least 30 days may be certified to the county auditor for collection as property taxes payable
126.21in the following calendar year on the affected property.
126.22    Subd. 7. Notice; hearings. (a) A municipality may impose a municipal street
126.23improvement fee provided in this section by ordinance. The ordinance must not be voted
126.24on or adopted until after a public hearing has been held on the question. The effective date
126.25of an ordinance must be at least 45 days after it is adopted.
126.26(b) Within five days after adoption of the ordinance, a summary of the ordinance
126.27must be mailed to the owner of each parcel included in the street improvement district.
126.28The mailing must include:
126.29(1) a notice that owners subject to a fee under the ordinance have a right to petition
126.30for a referendum vote on the ordinance by filing the required number of objections with
126.31the city clerk before the effective date of the ordinance and that a copy of the ordinance is
126.32on file with the city clerk for public inspection; and
126.33(2) the estimated amount of the fee that would be imposed on the owner's parcel in
126.34the first year the fee is imposed, and an estimate of the maximum annual amount of the fee
126.35that may be imposed on the owner's parcel during the duration of the project.
127.1    Subd. 8. Reverse referendum. (a) If owners of 35 percent or more of the net tax
127.2capacity in the district subject to the fees under the ordinance file an objection to the
127.3ordinance with the city clerk before the effective date of the ordinance, the ordinance does
127.4not become effective unless it is approved as provided in paragraph (b).
127.5(b) If an ordinance does not become effective as a result of the filing of objections
127.6under paragraph (a), the city may submit the ordinance to the property owners in the
127.7street improvement district that would be subject to the fee imposed by the ordinance for
127.8approval. The election must be conducted by mail. Notice of the election and the mail
127.9procedure must be given at least six weeks prior to the election. No earlier than 20 days or
127.10later than 14 days before the date set for the election, the city clerk shall mail ballots by
127.11nonforwardable mail to the owners, as recorded on the property tax records, of each parcel
127.12of property subject to the fee under the ordinance. Each parcel of property is entitled to
127.13one vote. Ballots may be returned to the city clerk by mail or in person by the date set for
127.14the election. If a majority of the owners voting in the election approve the ordinance, it
127.15becomes effective 30 days after the date of the election.
127.16    Subd. 9. Not exclusive means of financing improvements. The use of the
127.17municipal street improvement fee by a municipality does not restrict the municipality from
127.18imposing other measures to pay the costs of local street improvements or maintenance,
127.19except that a municipality must not impose special assessments for projects funded with
127.20street improvement fees.
127.21EFFECTIVE DATE.This section is effective July 1, 2009.

127.22    Sec. 31. Minnesota Statutes 2008, section 473H.04, is amended by adding a
127.23subdivision to read:
127.24    Subd. 2a. Termination of eligibility. (a) A parcel of property enrolled under this
127.25section whose owner is subject to a final enforcement action for a violation of chapter 18B,
127.2618C, 103E, 103F, 103G, or 103H, or any rule adopted under these chapters including but
127.27not limited to the agricultural shoreland use standards in Minnesota Rules, chapter 6120,
127.28occurring on the parcel, shall be removed from the program.
127.29(b) For the purposes of this subdivision, "final enforcement action" means any
127.30administrative, civil, or criminal penalty other than an initial verbal or written warning.
127.31An enforcement action is not final until any time period for corrective action has expired,
127.32and until the completion or expiration of any applicable review or appeal procedure or
127.33period provided by law.
127.34(c) When a final enforcement action is taken based on a violation occurring on a
127.35parcel enrolled under this chapter, the law enforcement officer or other person enforcing
128.1the law or rule must notify the county assessor. The county assessor must then notify
128.2the property owner that the parcel is being removed from the program. Any parcel for
128.3which the assessor has been notified prior to March 1 of any year shall be removed from
128.4the program for taxes payable in the following year. The assessor shall calculate (i) the
128.5amount of any credit received under section 473H.05 for the current year, and (ii) the
128.6difference between the actual tax on the parcel for the current year and the tax that would
128.7apply if the value was not restricted under this section, and multiply the result by the
128.8number of years that the parcel has been under its current ownership or five, whichever is
128.9less. The resulting amount plus any special assessments that have been deferred under this
128.10section shall be extended against the parcel on the tax list for the current year, provided
128.11that no interest or penalties shall be levied on the additional taxes if timely paid.
128.12(d) Termination of eligibility under this subdivision shall not affect the covenant
128.13required under section 473H.05. A parcel of property terminated under this subdivision
128.14may not be reenrolled for a period of three years, unless it has been sold or transferred
128.15so that it is no longer under the same ownership, in full or in part, as when the parcel
128.16was terminated.
128.17EFFECTIVE DATE.This section is effective for taxes payable in 2011 and
128.18thereafter.

128.19    Sec. 32. Minnesota Statutes 2008, section 473H.05, subdivision 1, is amended to read:
128.20    Subdivision 1. Before March June 1 for next year's taxes. An owner or owners
128.21of certified long-term agricultural land may apply to the authority with jurisdiction over
128.22the land on forms provided by the commissioner of agriculture for the creation of an
128.23agricultural preserve at any time. Land for which application is received prior to March
128.24June 1 of any year shall be assessed pursuant to section 473H.10 for taxes payable in the
128.25following year. Land for which application is received on or after March June 1 of any
128.26year shall be assessed pursuant to section 473H.10 in the following year. The application
128.27shall be executed and acknowledged in the manner required by law to execute and
128.28acknowledge a deed and shall contain at least the following information and such other
128.29information as the commissioner deems necessary:
128.30(a) Legal description of the area proposed to be designated and parcel identification
128.31numbers if so designated by the county auditor and the certificate of title number if the
128.32land is registered;
128.33(b) Name and address of owner;
128.34(c) An affidavit by the authority evidencing that the land is certified long-term
128.35agricultural land at the date of application;
129.1(d) A statement by the owner covenanting that the land shall be kept in agricultural
129.2use, and shall be used in accordance with the provisions of sections 473H.02 to 473H.17
129.3which exist on the date of application and providing that the restrictive covenant shall be
129.4binding on the owner or the owner's successor or assignee, and shall run with the land.
129.5EFFECTIVE DATE.This section is effective the day following final enactment,
129.6except that in 2009 the application date in this section shall be extended to August 1.

129.7    Sec. 33. Laws 2001, First Special Session chapter 5, article 3, section 8, the effective
129.8date, as amended by Laws 2005, chapter 151, article 3, section 19, and Laws 2006, chapter
129.9259, article 4, section 20, is amended to read:
129.10    EFFECTIVE DATE. This section is effective for taxes levied in 2002, payable in
129.112003, through taxes levied in 2011 2014, payable in 2012 2015. This limitation applies
129.12only to the establishment of a new emergency special service district.

129.13    Sec. 34. Laws 2008, chapter 366, article 6, section 9, the effective date, is amended to
129.14read:
129.15EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
129.16thereafter, on land platted after May 18, 2008.

129.17    Sec. 35. Laws 2008, chapter 366, article 6, section 10, the effective date, is amended to
129.18read:
129.19EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
129.20thereafter, on land platted after May 18, 2008.

129.21    Sec. 36. PURPOSE; COMMISSIONER OF REVENUE GUIDANCE.
129.22The purpose of section 2 is not to contract or expand the definition of "institutions
129.23of purely public charity" but to provide clear standards that can be applied uniformly to
129.24determine eligibility for exemption from property taxation. To carry out this purpose and
129.25to promote uniformity in application of the provisions of section 2, the commissioner of
129.26revenue shall prepare a bulletin providing guidance to assessors as to the commissioner's
129.27interpretation of section 2. The bulletin may include a discussion of court decisions that
129.28provide background to and context for the provisions in section 2, as the commissioner
129.29deems appropriate. This guidance must include examples of facts or circumstances that
129.30satisfy the requirement of "a reasonable justification for failing to meet the factors in clause
129.31(2), (3), or (5)" under section 2, paragraph (a). Assessors shall give due consideration to
129.32the bulletin in assessing property requesting an exemption as an institution of purely public
129.33charity. The commissioner shall distribute the bulletin to all assessors by July 1, 2010.
130.1EFFECTIVE DATE.This section is effective the day following final enactment.

130.2    Sec. 37. REPORT BY ADMINISTRATIVE AUDITOR.
130.3The administrative auditor selected pursuant to Minnesota Statutes, section 473F.03,
130.4with the cooperation of the county auditors in the area defined by Minnesota Statutes,
130.5section 473F.02, subdivision 2, shall study the feasibility of basing fiscal disparities
130.6calculations on current year tax rates rather than previous year tax rates, and report
130.7the results of the study to the chairs and ranking minority members of the house of
130.8representatives and senate tax committees by February 1, 2011. The report should include
130.9any recommendations for amendments to Minnesota Statutes, chapter 473F, that would be
130.10necessary to implement the change.
130.11EFFECTIVE DATE.This section is effective the day following final enactment.

130.12    Sec. 38. MINNEAPOLIS CONVENTION CENTER; LEASE; PROPERTY TAX
130.13EXEMPTION.
130.14Notwithstanding Minnesota Statutes, section 272.01, subdivision 2, or 273.19, real
130.15or personal property subject to a lease or use agreement between the city of Minneapolis
130.16and a private entity for purposes of providing food and beverage services within the
130.17Minneapolis Convention Center is exempt from property taxation.
130.18EFFECTIVE DATE.This section is effective for assessment year 2009 and
130.19thereafter, for taxes payable in 2010 and thereafter.

130.20    Sec. 39. REPEALER.
130.21Minnesota Statutes 2008, section 273.113, is repealed.
130.22EFFECTIVE DATE.This section is effective for property taxes payable in 2010
130.23and thereafter.


130.26    Section 1. Minnesota Statutes 2008, section 273.1384, subdivision 1, is amended to
130.27read:
130.28    Subdivision 1. Residential homestead market value credit. Each county auditor
130.29shall determine a homestead credit for each class 1a, 1b, and 2a homestead property
130.30within the county equal to 0.4 percent of the first $76,000 $75,000 of market value of
130.31the property minus .09 0.1 percent of the market value in excess of $76,000 $75,000.
130.32The credit amount may not be less than zero. In the case of an agricultural or resort
131.1homestead, only the market value of the house, garage, and immediately surrounding one
131.2acre of land is eligible in determining the property's homestead credit. In the case of a
131.3property that is classified as part homestead and part nonhomestead, (i) the credit shall
131.4apply only to the homestead portion of the property, but (ii) if a portion of a property is
131.5classified as nonhomestead solely because not all the owners occupy the property, not all
131.6the owners have qualifying relatives occupying the property, or solely because not all the
131.7spouses of owners occupy the property, the credit amount shall be initially computed as
131.8if that nonhomestead portion were also in the homestead class and then prorated to the
131.9owner-occupant's percentage of ownership. For the purpose of this section, when an
131.10owner-occupant's spouse does not occupy the property, the percentage of ownership for
131.11the owner-occupant spouse is one-half of the couple's ownership percentage.
131.12EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
131.13thereafter.

131.14    Sec. 2. Minnesota Statutes 2008, section 273.1384, subdivision 4, is amended to read:
131.15    Subd. 4. Payment. (a) The commissioner of revenue shall reimburse each local
131.16taxing jurisdiction, other than school districts, for the tax reductions granted under this
131.17section in two equal installments on October 31 and December 26 of the taxes payable
131.18year for which the reductions are granted, including in each payment the prior year
131.19adjustments certified on the abstracts for that taxes payable year. The reimbursements
131.20related to tax increments shall be issued in one installment each year on December 26.
131.21(b) The commissioner of revenue shall certify the total of the tax reductions
131.22granted under this section for each taxes payable year within each school district to the
131.23commissioner of the Department of Education and the commissioner of education shall
131.24pay the reimbursement amounts to each school district as provided in section 273.1392.
131.25(c) The market value credit reimbursements payable in 2011 and 2012 for each city
131.26under this section are reduced by the dollar amount of the 2010 reduction in market value
131.27credit reimbursements under section 477A.013, subdivision 11. The payable market value
131.28credit reimbursement for a city is not reduced less than zero under this paragraph.
131.29EFFECTIVE DATE.This section is effective for credits payable in calendar year
131.302011 and thereafter.

131.31    Sec. 3. Minnesota Statutes 2008, section 275.08, subdivision 1d, is amended to read:
131.32    Subd. 1d. Additional adjustment. If, after computing each local government's
131.33adjusted local tax rate within a unique taxing jurisdiction pursuant to subdivision 1c, the
131.34auditor finds that the total adjusted local tax rate of all local governments combined is
132.1less than 90 percent of gross tax capacity for taxes payable in 1989 and 90 113 percent
132.2of net tax capacity for taxes payable in 1990 and thereafter, the auditor shall increase
132.3each local government's adjusted local tax rate proportionately so the total adjusted local
132.4tax rate of all local governments combined equals 90 113 percent. The total amount
132.5of the increase in tax resulting from the increased local tax rates must not exceed the
132.6amount of disparity aid allocated to the unique taxing district under section 273.1398. The
132.7auditor shall certify to the Department of Revenue the difference between the disparity
132.8aid originally allocated under section 273.1398, subdivision 3, and the amount necessary
132.9to reduce the total adjusted local tax rate of all local governments combined to 90 113
132.10percent. Each local government's disparity reduction aid payment under section 273.1398,
132.11subdivision 6 , must be reduced accordingly.
132.12EFFECTIVE DATE.This section is effective for taxes payable in 2010 and
132.13thereafter.

132.14    Sec. 4. Minnesota Statutes 2008, section 290A.04, subdivision 2, is amended to read:
132.15    Subd. 2. Homeowners. A claimant whose property taxes payable are in excess
132.16of the percentage of the household income stated below shall pay an amount equal to
132.17the percent of income shown for the appropriate household income level along with the
132.18percent to be paid by the claimant of the remaining amount of property taxes payable.
132.19The state refund equals the amount of property taxes payable that remain, up to the state
132.20refund amount shown below.

132.21 132.22	Household Income		Percent of Income	Percent Paid by Claimant	Maximum State Refund
132.23 132.24	$0 to 1,189		1.0 percent	15 percent	$	1,850 2,040
132.25 132.26	1,190 to 2,379		1.1 percent	15 percent	$	1,850 2,040
132.27 132.28	2,380 to 3,589		1.2 percent	15 percent	$	1,800 1,980
132.29 132.30	3,590 to 4,789		1.3 percent	20 percent	$	1,800 1,980
132.31 132.32	4,790 to 5,979		1.4 percent	20 percent	$	1,730 1,900
132.33 132.34	5,980 to 8,369		1.5 percent	20 percent	$	1,730 1,900
132.35 132.36	8,370 to 9,559		1.6 percent	25 percent	$	1,670 1,840
132.37 132.38	9,560 to 10,759		1.7 percent	25 percent	$	1,670 1,840
132.39 132.40	10,760 to 11,949		1.8 percent	25 percent	$	1,610 1,770
133.1 133.2	11,950 to 13,139		1.9 percent	30 percent	$	1,610 1,770
133.3 133.4	13,140 to 14,349		2.0 percent	30 percent	$	1,540 1,690
133.5 133.6	14,350 to 16,739		2.12.0 percent	30 percent	$	1,540 1,690
133.7	16,740 to 17,929		2.2 percent	35 percent	$	1,480
133.8 133.9	17,930 to 19,119 16,740 to 19,119		2.32.0 percent	35 percent	$	1,480 1,630
133.10 133.11	19,120 to 20,319		2.42.1 percent	35 percent	$	1,420 1,560
133.12 133.13	20,320 to 25,099		2.52.2 percent	40 percent	$	1,420 1,560
133.14 133.15	25,100 to 28,679		2.62.3 percent	40 percent	$	1,360 1,500
133.16 133.17	28,680 to 35,849		2.72.5 percent	40 percent	$	1,360 1,500
133.18 133.19	35,850 to 41,819		2.82.6 percent	45 percent	$	1,240 1,360
133.20 133.21	41,820 to 47,799		3.02.8 percent	45 percent	$	1,240 1,360
133.22 133.23	47,800 to 53,779		3.23.0 percent	45 percent	$	1,110 1,220
133.24	53,780 to 59,749		3.5 percent	50 percent	$	9901,090
133.25	59,750 to 65,729		3.5 percent	50 percent	$	870960
133.26	65,730 to 69,319		3.5 percent	50 percent	$	740810
133.27	69,320 to 71,719		3.5 percent	50 percent	$	610670
133.28	71,720 to 74,619		3.5 percent	50 percent	$	500550
133.29	74,620 to 77,519		3.5 percent	50 percent	$	370410

133.30    The payment made to a claimant shall be the amount of the state refund calculated
133.31under this subdivision. No payment is allowed if the claimant's household income is
133.32$77,520 or more.
133.33EFFECTIVE DATE.This section is effective beginning with refunds based on
133.34property taxes payable in 2010.

133.35    Sec. 5. Minnesota Statutes 2008, section 477A.011, subdivision 36, is amended to read:
133.36    Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision,
133.37"city aid base" is zero.
133.38    (b) The city aid base for any city with a population less than 500 is increased by
133.39$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
133.40of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
133.41increased by $40,000 for aids payable in calendar year 1995 only, provided that:
133.42    (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
134.1    (ii) the city portion of the tax capacity rate exceeds 100 percent; and
134.2    (iii) its city aid base is less than $60 per capita.
134.3    (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
134.4the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
134.5paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
134.6    (i) the city has a population in 1994 of 2,500 or more;
134.7    (ii) the city is located in a county, outside of the metropolitan area, which contains a
134.8city of the first class;
134.9    (iii) the city's net tax capacity used in calculating its 1996 aid under section
134.10477A.013 is less than $400 per capita; and
134.11    (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
134.12property located in the city is classified as railroad property.
134.13    (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
134.14the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
134.15paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
134.16    (i) the city was incorporated as a statutory city after December 1, 1993;
134.17    (ii) its city aid base does not exceed $5,600; and
134.18    (iii) the city had a population in 1996 of 5,000 or more.
134.19    (e) The city aid base for a city is increased by $150,000 for aids payable in 2000 and
134.20thereafter, and the maximum amount of total aid it may receive under section 477A.013,
134.21subdivision 9 , paragraph (c), is also increased by $150,000 in calendar year 2000 only,
134.22provided that:
134.23    (1) the city has a population that is greater than 1,000 and less than 2,500;
134.24    (2) its commercial and industrial percentage for aids payable in 1999 is greater
134.25than 45 percent; and
134.26    (3) the total market value of all commercial and industrial property in the city
134.27for assessment year 1999 is at least 15 percent less than the total market value of all
134.28commercial and industrial property in the city for assessment year 1998.
134.29    (f) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and
134.30the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
134.31paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
134.32    (1) the city had a population in 1997 of 2,500 or more;
134.33    (2) the net tax capacity of the city used in calculating its 1999 aid under section
134.34477A.013 is less than $650 per capita;
134.35    (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
134.36section 477A.013 is greater than 12 percent;
135.1    (4) the 1999 local government aid of the city under section 477A.013 is less than
135.220 percent of the amount that the formula aid of the city would have been if the need
135.3increase percentage was 100 percent; and
135.4    (5) the city aid base of the city used in calculating aid under section 477A.013
135.5is less than $7 per capita.
135.6    (g) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and
135.7the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
135.8paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
135.9    (1) the city has a population in 1997 of 2,000 or more;
135.10    (2) the net tax capacity of the city used in calculating its 1999 aid under section
135.11477A.013 is less than $455 per capita;
135.12    (3) the net levy of the city used in calculating 1999 aid under section 477A.013 is
135.13greater than $195 per capita; and
135.14    (4) the 1999 local government aid of the city under section 477A.013 is less than
135.1538 percent of the amount that the formula aid of the city would have been if the need
135.16increase percentage was 100 percent.
135.17    (h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
135.18the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
135.19paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
135.20    (1) the city has a population in 1998 that is greater than 200 but less than 500;
135.21    (2) the city's revenue need used in calculating aids payable in 2000 was greater
135.22than $200 per capita;
135.23    (3) the city net tax capacity for the city used in calculating aids available in 2000
135.24was equal to or less than $200 per capita;
135.25    (4) the city aid base of the city used in calculating aid under section 477A.013
135.26is less than $65 per capita; and
135.27    (5) the city's formula aid for aids payable in 2000 was greater than zero.
135.28    (i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
135.29the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
135.30paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
135.31    (1) the city had a population in 1998 that is greater than 200 but less than 500;
135.32    (2) the city's commercial industrial percentage used in calculating aids payable in
135.332000 was less than ten percent;
135.34    (3) more than 25 percent of the city's population was 60 years old or older according
135.35to the 1990 census;
136.1    (4) the city aid base of the city used in calculating aid under section 477A.013
136.2is less than $15 per capita; and
136.3    (5) the city's formula aid for aids payable in 2000 was greater than zero.
136.4    (j) The city aid base for a city is increased by $45,000 in 2001 and thereafter and
136.5by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of
136.6total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
136.7increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
136.8only, provided that:
136.9    (1) the net tax capacity of the city used in calculating its 2000 aid under section
136.10477A.013 is less than $810 per capita;
136.11    (2) the population of the city declined more than two percent between 1988 and 1998;
136.12    (3) the net levy of the city used in calculating 2000 aid under section 477A.013 is
136.13greater than $240 per capita; and
136.14    (4) the city received less than $36 per capita in aid under section 477A.013,
136.15subdivision 9 , for aids payable in 2000.
136.16    (k) The city aid base for a city with a population of 10,000 or more which is located
136.17outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the
136.18maximum amount of total aid it may receive under section 477A.013, subdivision 9,
136.19paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
136.20the lesser of:
136.21    (1)(i) the total population of the city, as determined by the United States Bureau of
136.22the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
136.23    (2) $2,500,000.
136.24    (l) The city aid base is increased by $50,000 in 2002 and thereafter, and the
136.25maximum amount of total aid it may receive under section 477A.013, subdivision 9,
136.26paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
136.27    (1) the city is located in the seven-county metropolitan area;
136.28    (2) its population in 2000 is between 10,000 and 20,000; and
136.29    (3) its commercial industrial percentage, as calculated for city aid payable in 2001,
136.30was greater than 25 percent.
136.31    (m) The city aid base for a city is increased by $150,000 in calendar years 2002 to
136.322011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum
136.33amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
136.34also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
136.352009 only, provided that:
136.36    (1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
137.1    (2) its home county is located within the seven-county metropolitan area;
137.2    (3) its pre-1940 housing percentage is less than 15 percent; and
137.3    (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
137.4per capita.
137.5    (n) The city aid base for a city is increased by $200,000 beginning in calendar
137.6year 2003 and the maximum amount of total aid it may receive under section 477A.013,
137.7subdivision 9 , paragraph (c), is also increased by $200,000 in calendar year 2003 only,
137.8provided that the city qualified for an increase in homestead and agricultural credit aid
137.9under Laws 1995, chapter 264, article 8, section 18.
137.10    (o) The city aid base for a city is increased by $200,000 in 2004 only and the
137.11maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
137.12also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
137.13dry cask storage facility.
137.14    (p) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the
137.15maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
137.16by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster
137.17designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by
137.18more than 40 percent between 1990 and 2000.
137.19    (q) The city aid base for a city is increased by $30,000 in 2009 and thereafter and the
137.20maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
137.21by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000
137.22and has a state park for which the city provides rescue services and which comprised at
137.23least 14 percent of the total geographic area included within the city boundaries in 2000.
137.24    (r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and
137.25the minimum and maximum amount of total aid it may receive under section 477A.013,
137.26subdivision 9, is also increased by $80,000 in calendar year 2009 only, if:
137.27    (1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
137.28to be placed in trust status as tax-exempt Indian land;
137.29    (2) the placement of the land is being challenged administratively or in court; and
137.30    (3) due to the challenge, the land proposed to be placed in trust is still on the tax
137.31rolls as of May 1, 2006.
137.32    (s) The city aid base for a city is increased by $100,000 in 2007 and thereafter and
137.33the minimum and maximum total amount of aid it may receive under this section is also
137.34increased in calendar year 2007 only, provided that:
137.35    (1) the city has a 2004 estimated population greater than 200 but less than 2,000;
137.36    (2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;
138.1    (3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
138.2payable in 2006 was greater than 110 percent; and
138.3    (4) it is located in a county where at least 15,000 acres of land are classified as
138.4tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.
138.5    (t) The city aid base for a city is increased by $30,000 in 2009 only, and the
138.6maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
138.7by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than
138.83,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities
138.9and one township in 2002.
138.10    (u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and
138.11the maximum total aid it may receive under section 477A.013, subdivision 9, is also
138.12increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for
138.13aids payable in 2007 of less than $150 per capita and the city experienced flooding on
138.14March 14, 2007, that resulted in evacuation of at least 40 homes.
138.15    (v) The city aid base for a city is increased by $100,000 in 2009 to 2013, and the
138.16maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
138.17by $100,000 in calendar year 2009 only, if the city:
138.18    (1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical
138.19area;
138.20    (2) has a 2005 population greater than 7,000 but less than 8,000; and
138.21    (3) has a 2005 net tax capacity per capita of less than $500.
138.22    (w) The city aid base is increased by $25,000 in calendar years 2009 to 2013 and the
138.23maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
138.24increased by $25,000 in calendar year 2009 only, provided that:
138.25    (1) the city is located in the seven-county metropolitan area;
138.26    (2) its population in 2006 is less than 200; and
138.27    (3) the percentage of its housing stock built before 1940, according to the 2000
138.28United States Census, is greater than 40 percent.
138.29    (x) The city aid base is increased by $90,000 in calendar year 2009 only and the
138.30minimum and maximum total amount of aid it may receive under section 477A.013,
138.31subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the
138.32city is located in the seven-county metropolitan area, has a 2006 population between 5,000
138.33and 7,000 and has a 1997 population of over 7,000.
138.34(y) The city aid base is increased by $100,000 in calendar years 2011 to 2015 and
138.35the maximum amount of total aid a city may receive under section 477A.013, subdivision
138.369, is increased by $100,000 in 2011 only, provided that:
139.1(1) the city is located in the metropolitan area;
139.2(2) its 2006 population is less than 2,000; and
139.3(3) its population has grown by at least 200 percent between 1996 and 2006.
139.4    (z) In calendar year 2010 only, the city aid base for a city is increased by $225,000 if
139.5it was eligible for a $450,000 payment in calendar year 2008 under Minnesota Statutes
139.62006, section 477A.011, subdivision 36, paragraph (e), and the second half of the payment
139.7under that paragraph in December 2008 was canceled due to the governor's unallotment.
139.8The payment under this paragraph is not subject to any aid reductions under section
139.9477A.0133 or any future unallotment of the city aid under section 16A.152.
139.10EFFECTIVE DATE.This section is effective for aids payable in calendar year
139.112011 and thereafter.

139.12    Sec. 6. Minnesota Statutes 2008, section 477A.013, subdivision 9, is amended to read:
139.13    Subd. 9. City aid distribution. (a) In calendar year 2009 and thereafter, each
139.14city shall receive an aid distribution equal to the sum of (1) the city formula aid under
139.15subdivision 8, and (2) its city aid base. In calendar year 2010, each city receives an aid
139.16distribution under this section, before the reductions under subdivision 11, equal to the
139.17amount of aid under this section that it was certified to receive in 2009. In calendar year
139.182011 and thereafter, each city receives an aid distribution under this section equal to the
139.19sum of (1) the city formula aid under subdivision 8, and (2) its city aid base.
139.20    (b) For aids payable in 2009 only, the total aid for any city shall not exceed the sum
139.21of (1) 35 percent of the city's net levy for the year prior to the aid distribution, plus (2)
139.22its total aid in the previous year.
139.23    (c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
139.24the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
139.25plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total
139.26aid for any city with a population of 2,500 or more may not be less than its total aid under
139.27this section in the previous year minus the lesser of $10 multiplied by its population, or ten
139.28percent of its net levy in the year prior to the aid distribution.
139.29    (d) For aids payable in 2010 and thereafter, the total aid for a city with a population
139.30less than 2,500 must not be less than the amount it was certified to receive in the
139.31previous year minus the lesser of $10 multiplied by its population, or five percent of its
139.322003 certified aid amount. For aids payable in 2009 only, the total aid for a city with a
139.33population less than 2,500 must not be less than what it received under this section in the
139.34previous year unless its total aid in calendar year 2008 was aid under section 477A.011,
139.35subdivision 36, paragraph (s), in which case its minimum aid is zero.
140.1    (e) A city's aid loss under this section may not exceed $300,000 in any year in
140.2which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or
140.3greater than the appropriation under that subdivision in the previous year, unless the
140.4city has an adjustment in its city net tax capacity under the process described in section
140.5469.174, subdivision 28 .
140.6    (f) If a city's net tax capacity used in calculating aid under this section has decreased
140.7in any year by more than 25 percent from its net tax capacity in the previous year due to
140.8property becoming tax-exempt Indian land, the city's maximum allowed aid increase
140.9under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
140.10year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
140.11resulting from the property becoming tax exempt.
140.12EFFECTIVE DATE.This section is effective the day following final enactment.

140.13    Sec. 7. Minnesota Statutes 2008, section 477A.013, is amended by adding a
140.14subdivision to read:
140.15    Subd. 11. 2010 city aid. For aid payable in 2010 only, each city's distribution
140.16amount under subdivision 9 is reduced by an amount equal to 1.8889 percent of the city's
140.17net tax capacity, as defined in section 477A.011, subdivision 20, that would otherwise be
140.18used in calculating aids payable in 2010.
140.19The reduction is limited to the sum of the city's payable 2010 distribution under this
140.20section, except for city aid base under section 477A.011, subdivision 36, paragraph (z),
140.21and the city's payable 2010 reimbursement under section 273.1384 before the reductions
140.22in this subdivision.
140.23The reduction is applied first to the city's distribution under this section, and then, if
140.24necessary, to the city's reimbursements under section 273.1384.
140.25EFFECTIVE DATE.This section is effective the day following final enactment.

140.26    Sec. 8. [477A.0133] 2009 CITY AND COUNTY AID REDUCTIONS.
140.27    Subdivision 1. City aid. The commissioner of revenue shall compute an aid
140.28reduction amount for each city for aid payable in 2009 equal to 1.2111 percent of the city's
140.29net tax capacity, as defined in section 477A.011, subdivision 20, that would be used in
140.30calculating for aids payable in 2010.
140.31The reduction is limited to the sum of the city's payable 2009 distributions, prior to
140.32the reductions under this subdivision, under sections 273.1384 and 477A.013.
140.33The reduction is applied first to the city's distribution under section 477A.013, and
140.34then, if necessary, to the city's reimbursements under section 273.1384.
141.1To the extent that sufficient information is available on each successive payment date
141.2within the year, the commissioner of revenue shall pay any remaining 2009 distribution or
141.3reimbursement amount that is reduced under this subdivision in equal installments on the
141.4payment dates provided by law.
141.5    Subd. 2. County aid. The commissioner of revenue shall compute an aid reduction
141.6amount for each county's aid under section 477A.0124 for aid payable in 2009 equal
141.7to 0.2308 percent of the county's net tax capacity, as defined in section 477A.0124,
141.8subdivision 2, used in calculating the 2009 certified amount.
141.9To the extent that sufficient information is available on each payment date in 2009,
141.10the commissioner of revenue shall pay any remaining 2009 distribution or reimbursement
141.11amount that is reduced under this section in equal installments on the payment dates
141.12provided by law.
141.13EFFECTIVE DATE.This section is effective the day following final enactment.

141.14    Sec. 9. Minnesota Statutes 2008, section 477A.03, subdivision 2a, is amended to read:
141.15    Subd. 2a. Cities. For aids payable in 2009 and thereafter, the total aid paid under
141.16section 477A.013, subdivision 9, is $526,148,487, subject to adjustment in subdivision 5.
141.17For aids payable in 2010, the total aid paid under section 477A.013, subdivision 9, prior
141.18to the reductions under section 477A.013, subdivision 11, is $526,373,487. For aids
141.19payable in 2011 and thereafter, the total aid paid under section 477A.013, subdivision
141.209, is $526,148,487.
141.21EFFECTIVE DATE.This section is effective for aid paid in 2010 and thereafter.

141.22    Sec. 10. Minnesota Statutes 2008, section 477A.12, subdivision 1, is amended to read:
141.23    Subdivision 1. Types of land; payments. (a) As an offset for expenses incurred
141.24by counties and towns in support of natural resources lands, beginning with the payment
141.25made in 2009, the following amounts are annually appropriated to the commissioner of
141.26natural resources from the general fund for transfer to the commissioner of revenue.
141.27The commissioner of revenue shall pay the transferred funds to counties as required by
141.28sections 477A.11 to 477A.145. The amounts are in amounts equal to 80 percent of the
141.29following payment rates:
141.30(1) for acquired natural resources land, $3, as adjusted for inflation under section
141.31477A.145 , multiplied by the total number of acres of acquired natural resources land or,
141.32at the county's option three-fourths of one percent of the appraised value of all acquired
141.33natural resources land in the county, whichever is greater;
142.1(2) 75 cents, as adjusted for inflation under section 477A.145, multiplied by the
142.2number of acres of county-administered other natural resources land;
142.3(3) 75 cents, as adjusted for inflation under section 477A.145, multiplied by the total
142.4number of acres of land utilization project land; and
142.5(4) 37.5 cents, as adjusted for inflation under section 477A.145, multiplied by the
142.6number of acres of commissioner-administered other natural resources land located in
142.7each county as of July 1 of each year prior to the payment year.
142.8(b) The amount determined under paragraph (a), clause (1), is payable for land
142.9that is acquired from a private owner and owned by the Department of Transportation
142.10for the purpose of replacing wetland losses caused by transportation projects, but only
142.11if the county contains more than 500 acres of such land at the time the certification is
142.12made under subdivision 2.
142.13EFFECTIVE DATE.This section is effective the day following final enactment.

142.14    Sec. 11. Minnesota Statutes 2008, section 477A.14, subdivision 1, is amended to read:
142.15    Subdivision 1. General distribution. Except as provided in subdivision 2 or in
142.16section 97A.061, subdivision 5, 40 percent of the total payment to the county shall be
142.17deposited in the county general revenue fund to be used to provide property tax levy
142.18reduction. Beginning with the payment made in 2009, the remainder shall be distributed
142.19by the county in the following priority and in amounts equal to 80 percent of the following
142.20payment rates:
142.21(a) 37.5 cents, as adjusted for inflation under section 477A.145, for each acre
142.22of county-administered other natural resources land shall be deposited in a resource
142.23development fund to be created within the county treasury for use in resource
142.24development, forest management, game and fish habitat improvement, and recreational
142.25development and maintenance of county-administered other natural resources land. Any
142.26county receiving less than $5,000 annually for the resource development fund may elect to
142.27deposit that amount in the county general revenue fund;
142.28(b) From the funds remaining, within 30 days of receipt of the payment to the county,
142.29the county treasurer shall pay each organized township 30 cents, as adjusted for inflation
142.30under section 477A.145, for each acre of acquired natural resources land and each acre of
142.31land described in section 477A.12, subdivision 1, paragraph (b), and 7.5 cents, as adjusted
142.32for inflation under section 477A.145, for each acre of other natural resources land and each
142.33acre of land utilization project land located within its boundaries. Payments for natural
142.34resources lands not located in an organized township shall be deposited in the county
142.35general revenue fund. Payments to counties and townships pursuant to this paragraph shall
143.1be used to provide property tax levy reduction, except that of the payments for natural
143.2resources lands not located in an organized township, the county may allocate the amount
143.3determined to be necessary for maintenance of roads in unorganized townships. Provided
143.4that, if the total payment to the county pursuant to section 477A.12 is not sufficient to fully
143.5fund the distribution provided for in this clause, the amount available shall be distributed
143.6to each township and the county general revenue fund on a pro rata basis; and
143.7(c) Any remaining funds shall be deposited in the county general revenue fund.
143.8Provided that, if the distribution to the county general revenue fund exceeds $35,000, the
143.9excess shall be used to provide property tax levy reduction.
143.10EFFECTIVE DATE.This section is effective the day following final enactment.

143.11    Sec. 12. APPROPRIATION; FISCAL STABILIZATION ACCOUNT.
143.12$6,140,000 is appropriated from the fiscal stabilization account in the federal fund to
143.13the commissioner of revenue in fiscal year 2010 for city aid under Minnesota Statutes,
143.14section 477A.013, subdivision 9. The general fund appropriation for city program aid in
143.15Minnesota Statutes, section 477A.03, subdivision 2a, for fiscal year 2010, for aids payable
143.16in 2009, is reduced by $6,140,000.
143.17EFFECTIVE DATE.This section is effective the day following final enactment.

143.18    Sec. 13. REPEALER.
143.19Minnesota Statutes 2008, section 477A.03, subdivision 5, is repealed.
143.20EFFECTIVE DATE.This section is effective for aid paid in 2010 and thereafter.


143.23    Section 1. [290D.01] CITATION.
143.24This program shall be named the "seasonal recreational property tax deferral
143.25program."

143.26    Sec. 2. [290D.02] TERMS.
143.27    Subdivision 1. Terms. For purposes of sections 290D.01 to 290D.08, the terms
143.28defined in this section have the meanings given them.
143.29    Subd. 2. Primary property owner. "Primary property owner" means a person who
143.30(1) has been the owner, or one of the owners, of the eligible property for at least 15 years
143.31prior to the year the application is filed under section 290D.04; and (2) applies for the
143.32deferral of property taxes under section 290D.04.
144.1    Subd. 3. Secondary property owner. "Secondary property owner" means any
144.2person, other than the primary property owner, who has been an owner of the eligible
144.3property for at least 15 years prior to the year the initial application is filed for deferral
144.4of property taxes under section 290D.04.
144.5    Subd. 4. Eligible property. "Eligible property" means a parcel of property or
144.6contiguous parcels of property under the same ownership classified as noncommercial
144.7seasonal residential recreational 4c property under section 273.13, subdivision 25,
144.8paragraph (d), clause (1).
144.9    Subd. 5. Base property tax amount. "Base property tax amount" means the total
144.10property taxes levied by all taxing jurisdictions, including special assessments, on the
144.11eligible property in the year prior to the year that the initial application is approved under
144.12section 290D.04 and payable in the year of the application.
144.13    Subd. 6. Special assessments. "Special assessments" mean any assessment, fee, or
144.14other charge that may be made by law, and that appears on the property tax statement for
144.15the property for collection under the laws applicable to the enforcement of real estate taxes.
144.16    Subd. 7. Commissioner. "Commissioner" means the commissioner of revenue.

144.17    Sec. 3. [290D.03] QUALIFICATIONS FOR DEFERRAL.
144.18In order for an eligible property to qualify for treatment under this program:
144.19(1) the eligible property must have been owned solely by the primary property owner,
144.20or jointly with others, for at least 15 years prior to the year the initial application is filed;
144.21(2) there must be no state or federal tax liens or judgment liens on the eligible
144.22property;
144.23(3) there must be no mortgages or other liens on the eligible property that secure
144.24future advances, except for those subject to credit limits that result in compliance with
144.25clause (4); and
144.26(4) the total unpaid balances of debts secured by mortgages and other liens on the
144.27eligible property, including unpaid and delinquent special assessments and interest and
144.28any delinquent property taxes, penalties, and interest, but not including property taxes
144.29payable during the year, must not exceed 60 percent of the assessor's estimated market
144.30value for the current assessment year.

144.31    Sec. 4. [290D.04] APPLICATION FOR DEFERRAL.
144.32    Subdivision 1. Initial application. (a) A primary owner of a property meeting
144.33the qualifications under section 290D.03 may apply to the commissioner for deferral
144.34of taxes on the eligible property. Applications are due on or before July 1 for deferral
145.1of any taxes payable in the following year. The application, which must be prescribed
145.2by the commissioner, shall include the following items and any other information the
145.3commissioner deems necessary:
145.4(1) the name, address, and Social Security number of the primary property owner
145.5and secondary property owners, if any;
145.6(2) a copy of the property tax statement for the current taxes payable year for the
145.7eligible property;
145.8(3) the initial year of ownership of the primary property owner and any second
145.9property owners of the eligible property;
145.10(4) information on any mortgage loans or other amounts secured by mortgages or
145.11other liens against the eligible property, for which purpose the commissioner may require
145.12the applicant to provide a copy of the mortgage note, the mortgage, or a statement of the
145.13balance owed on the mortgage loan provided by the mortgage holder. The commissioner
145.14may require the appropriate documents in connection with obtaining and confirming
145.15information on unpaid amounts secured by other liens; and
145.16(5) the signatures of the primary property owner and all other owners, if any, stating
145.17that each owner agrees to enroll the eligible property in the program to defer property
145.18taxes under this chapter.
145.19The application must state that program participation is voluntary. The application
145.20must also state that program participation includes authorization for the annual deferred
145.21amount. The deferred property tax calculated by the county and the cumulative deferred
145.22property tax amount is public data.
145.23(b) As part of the initial application process, if the property is abstract property, the
145.24commissioner may require the applicant to obtain at the applicant's cost a report prepared
145.25by a licensed abstracter showing the last deed and any unsatisfied mortgages, liens,
145.26judgments, and state and federal tax lien notices which were recorded on or after the date
145.27of that last deed with respect to the eligible property or to the applicant.
145.28The certificate or report need not include references to any documents filed or
145.29recorded more than 40 years prior to the date of the certification or report. The certification
145.30or report must be as of a date not more than 30 days prior to submission of the application
145.31under this section.
145.32The commissioner may also require the county recorder or county registrar of the
145.33county where the eligible property is located to provide copies of recorded documents
145.34related to the applicant of the eligible property, for which the recorder or registrar shall
145.35not charge a fee. The commissioner may use any information available to determine or
145.36verify eligibility under this section.
146.1    Subd. 2. Approval; recording. The commissioner shall approve all initial
146.2applications that qualify under this chapter and shall notify the primary property owner on
146.3or before December 1. The commissioner may investigate the facts or require confirmation
146.4in regard to an application. The commissioner shall record or file a notice of qualification
146.5for deferral, including the names of the primary and any secondary property owners and a
146.6legal description of the eligible property, in the Office of the County Recorder, or registrar
146.7of titles, whichever is applicable, in the county where the eligible property is located. The
146.8notice must state that it serves as a notice of lien and that it includes deferrals under this
146.9section for future years. The primary property owner shall pay the recording or filing fees
146.10for the notice, which, notwithstanding section 357.18, shall be paid by that owner at the
146.11time of satisfaction of the lien.
146.12    Subd. 3. Penalty for failure; investigations. (a) The commissioner shall assess
146.13a penalty equal to 20 percent of the property taxes improperly deferred in the case of a
146.14false application. The commissioner shall assess a penalty equal to 50 percent of the
146.15property taxes improperly deferred if the taxpayer knowingly filed a false application. The
146.16commissioner shall assess penalties under this section through the issuance of an order
146.17under the provisions of chapter 270C. Persons affected by a commissioner's order issued
146.18under this section may appeal as provided in chapter 270C.
146.19(b) The commissioner may conduct investigations related to initial applications
146.20required under this chapter within the period ending 3-1/2 years from the due date of
146.21the application.
146.22    Subd. 4. Annual certification to commissioner. Annually, on or before July 1,
146.23the primary property owner must certify to the commissioner that the person continues
146.24to qualify as a primary property owner. If the primary owner has died or has transferred
146.25the property in the preceding year, a certification may be filed by the primary owner's
146.26spouse, or by one of the secondary owners, provided that the person is currently an
146.27owner of the property. In this case, the primary owner's spouse or the secondary owner
146.28shall be considered the primary owner from that point forward. If neither the primary
146.29owner, the primary owner's spouse, or a secondary owner is eligible to file the required
146.30annual certification for the property, the property's participation in the program shall be
146.31terminated, and the procedures in section 290D.08 apply.
146.32    Subd. 5. Annual notice to primary property owner. Annually, on or before
146.33September 1, the commissioner shall notify each primary property owner, in writing, of
146.34the total cumulative deferred taxes and accrued interest on the qualifying property as of
146.35that date.

147.1    Sec. 5. [290D.05] DEFERRED PROPERTY TAX AMOUNT.
147.2    Subdivision 1. Calculation of deferred property tax amount. Each year after
147.3the county auditor has determined the final property tax rates under section 275.08, the
147.4"deferred property tax amount" must be calculated on each eligible property. The deferred
147.5property tax amount is equal to 50 percent of the amount of the difference between (1) the
147.6total amount of property taxes and special assessments levied upon the eligible property
147.7for the current year by all taxing jurisdictions and (2) the eligible property's base property
147.8tax amount. Any tax attributable to new improvements made to the eligible property after
147.9the initial application has been approved under section 290D.04, subdivision 2, must be
147.10excluded in determining the deferred property tax amount. The eligible property's total
147.11current year's tax less the deferred property tax amount for the current year must be listed
147.12on the property tax statement and is the amount due to the county under chapter 276.
147.13Reference that the property is enrolled in the seasonal recreational property tax deferral
147.14program under this chapter and a state lien has been recorded must be clearly printed on
147.15the statement.
147.16    Subd. 2. Certification to commissioner. The county auditor shall annually, on or
147.17before April 15, certify to the commissioner the property tax deferral amounts determined
147.18under this section for each eligible property in the county. The commissioner shall
147.19prescribe the information that is necessary to identify the eligible properties.
147.20    Subd. 3. Limitation on total amount of deferred taxes. The total amount of
147.21deferred taxes and interest on a property, when added to (1) the balance owed on any
147.22mortgages on the property at the time of initial application; (2) other amounts secured by
147.23liens on the property at the time of the initial application; and (3) any unpaid and delinquent
147.24special assessments and interest and any delinquent property taxes, penalties, and interest,
147.25but not including property taxes payable during the year, must not exceed 60 percent of
147.26the assessor's estimated market value of the property for the current assessment year.

147.27    Sec. 6. [290D.06] LIEN; DEFERRED PORTION.
147.28(a) Payment by the state to the county treasurer of property taxes, penalties, interest,
147.29or special assessments and interest, deferred under this chapter is deemed a loan from the
147.30state to the program participant. The commissioner shall compute the interest as provided
147.31in section 270C.40, subdivision 5, but not to exceed two percent over the maximum
147.32interest rate provided in section 290B.07, paragraph (a), and maintain records of the total
147.33deferred amount and interest for each participant. Interest accrues beginning September 1
147.34of the payable year for which the taxes are deferred. Any deferral made under this chapter
147.35must not be construed as delinquent property taxes.
148.1The lien created under section 272.31 continues to secure payment by the taxpayer,
148.2or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
148.3respect to all years for which amounts are deferred. The lien for deferred taxes and interest
148.4has the same priority as any other lien under section 272.31, except that liens, including
148.5mortgages, recorded or filed prior to the recording or filing of the notice under section
148.6290D.04, subdivision 2, have priority over the lien for deferred taxes and interest. A
148.7seller's interest in a contract for deed, in which a qualifying owner is the purchaser or an
148.8assignee of the purchaser, has priority over deferred taxes and interest on deferred taxes,
148.9regardless of whether the contract for deed is recorded or filed. The lien for deferred taxes
148.10and interest for future years has the same priority as the lien for deferred taxes and interest
148.11for the first year, which is always higher in priority than any mortgages or other liens filed,
148.12recorded, or created after the notice recorded or filed under section 290D.04, subdivision
148.132 . The county treasurer or auditor shall maintain records of the deferred portion and shall
148.14list the amount of deferred taxes for the year and the cumulative deferral and interest for
148.15all previous years as a lien against the eligible property. In any certification of unpaid
148.16taxes for a tax parcel, the county auditor shall clearly distinguish between taxes payable in
148.17the current year, deferred taxes and interest, and delinquent taxes. Payment of the deferred
148.18portion becomes due and owed at the time specified in section 290D.07. Upon receipt of
148.19the payment, the commissioner shall issue a receipt to the person making the payment
148.20upon request and shall notify the auditor of the county in which the parcel is located,
148.21within ten days, identifying the parcel to which the payment applies. Upon receipt by the
148.22commissioner of collected funds in the amount of the deferral, the state's loan to the
148.23program participant is deemed paid in full.
148.24(b) If eligible property for which taxes have been deferred under this chapter forfeits
148.25under chapter 281 for nonpayment of a nondeferred property tax amount, or because
148.26of nonpayment of amounts previously deferred following a termination under section
148.27290D.07, the lien for the taxes deferred under this chapter, plus interest and costs, shall be
148.28canceled by the county auditor as provided in section 282.07. However, notwithstanding
148.29any other law to the contrary, any proceeds from a subsequent sale of the eligible property
148.30under chapter 282 or another law, must be used to first reimburse the county's forfeited
148.31tax sale fund for any direct costs of selling the eligible property or any costs directly
148.32related to preparing the eligible property for sale, and then to reimburse the state for
148.33the amount of the canceled lien. Within 90 days of the receipt of any sale proceeds to
148.34which the state is entitled under these provisions, the county auditor must pay those funds
148.35to the commissioner by warrant for deposit in the general fund. No other deposit, use,
148.36distribution, or release of gross sale proceeds or receipts may be made by the county until
149.1payments sufficient to fully reimburse the state for the canceled lien amount have been
149.2transmitted to the commissioner.

149.3    Sec. 7. [290D.07] TERMINATION OF DEFERRAL; PAYMENT OF DEFERRED
149.4TAXES.
149.5    Subdivision 1. Termination. (a) The deferral of taxes granted under this chapter
149.6terminates when one of the following occurs:
149.7(1) the eligible property is sold or transferred to someone other than the primary
149.8owner's spouse or a secondary owner;
149.9(2) the death of the primary owner, or in the case of a married couple, after the
149.10death of both spouses, provided that there is not a secondary owner eligible to become
149.11the primary owner;
149.12(3) the primary property owner notifies the commissioner, in writing, that all owners,
149.13including any secondary property owners, desire to discontinue the deferral; or
149.14(4) the eligible property no longer qualifies under section 290D.03.
149.15(b) An eligible property is not terminated from the program because no deferred
149.16property tax amount is determined for any given year after the eligible property's initial
149.17enrollment into the program.
149.18(c) An eligible property is not terminated from the program if the eligible property
149.19subsequently becomes the homestead of one or more of the property owners and the
149.20property and the owners qualify for, and are immediately enrolled in, the senior deferral
149.21program under chapter 290B.
149.22    Subd. 2. Payment upon termination. Upon the termination of the deferral under
149.23subdivision 1, the amount of deferred taxes, penalties, interest, and special assessments
149.24and interest, plus the recording or filing fees under this subdivision and section 290D.04,
149.25subdivision 2 , becomes due and payable to the commissioner within 90 days of termination
149.26of the deferral for terminations under subdivision 1, paragraph (a), clauses (1) and (2),
149.27and within one year of termination of the deferral for terminations under subdivision 1,
149.28paragraph (a), clauses (3) and (4). No additional interest is due on the deferral if timely
149.29paid. On receipt of payment, the commissioner shall, within ten days, notify the auditor
149.30of the county in which the parcel is located, identifying the parcel to which the payment
149.31applies and shall remit the recording or filing fees under this subdivision and section
149.32290D.04, subdivision 2, to the auditor. A notice of termination of deferral, containing the
149.33legal description and the recording or filing data for the notice of qualification for deferral
149.34under section 290D.04, subdivision 2, shall be prepared and recorded or filed by the
149.35county auditor in the same office in which the notice of qualification for deferral under
150.1section 290D.04, subdivision 2, was recorded or filed, and the county auditor shall mail a
150.2copy of the notice of termination to the property owner. The property owner shall pay the
150.3recording or filing fees. Upon recording or filing of the notice of termination of deferral,
150.4the notice of qualification for deferral under section 290D.04, subdivision 2, and the lien
150.5created by it are discharged. If the deferral is not timely paid, the penalty, interest, lien,
150.6forfeiture, and other rules for the collection of ad valorem property taxes apply.

150.7    Sec. 8. [290D.08] STATE REIMBURSEMENT.
150.8    Subdivision 1. Determination; payment. The county auditor shall determine the
150.9total current year's deferred amount of property tax under this chapter in the county, and
150.10submit those amounts as part of the abstracts of tax lists submitted by the county auditors
150.11under section 275.29. The commissioner may make changes in the abstracts of tax lists as
150.12deemed necessary. The commissioner, after such review, shall pay the deferred amount of
150.13property tax to each county treasurer on or before August 31.
150.14The county treasurer shall distribute as part of the October settlement the funds
150.15received as if they had been collected as part of the property tax.
150.16    Subd. 2. Appropriation. An amount sufficient to pay the total amount of property
150.17tax determined under subdivision 1, plus any other amounts paid under this chapter, is
150.18annually appropriated from the general fund to the commissioner.

150.19    Sec. 9. EFFECTIVE DATE.
150.20Sections 1 to 8 are effective for applications filed July 1, 2009, and thereafter.


150.23    Section 1. Minnesota Statutes 2008, section 295.75, subdivision 2, is amended to read:
150.24    Subd. 2. Gross receipts tax imposed. A tax is imposed on each liquor retailer equal
150.25to 2.5 five percent of gross receipts from retail sales in Minnesota of liquor.
150.26EFFECTIVE DATE.This section is effective for gross receipts received after
150.27June 30, 2009.

150.28    Sec. 2. Minnesota Statutes 2008, section 297F.01, is amended by adding a subdivision
150.29to read:
150.30    Subd. 10b. Moist snuff. "Moist snuff" means any finely cut, ground, or powdered
150.31smokeless tobacco that is intended to be placed or dipped in the oral cavity, but does
150.32not include any finely cut, ground, or powdered tobacco that is intended to be placed
151.1in the nasal cavity or that comes in discrete single-use tablets, lozenges, pouches, or
151.2other single-dose units.
151.3EFFECTIVE DATE.This section is effective July 1, 2009.

151.4    Sec. 3. Minnesota Statutes 2008, section 297F.01, subdivision 19, is amended to read:
151.5    Subd. 19. Tobacco products. "Tobacco products" means cigars; little cigars;
151.6cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other
151.7smoking tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other
151.8chewing tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and
151.9other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or
151.10smoking in a pipe or otherwise, or both for chewing and smoking; but does not include
151.11cigarettes as defined in this section.
151.12EFFECTIVE DATE.This section is effective July 1, 2009.

151.13    Sec. 4. Minnesota Statutes 2008, section 297F.05, subdivision 1, is amended to read:
151.14    Subdivision 1. Rates; cigarettes. A tax is imposed upon the sale of cigarettes in
151.15this state, upon having cigarettes in possession in this state with intent to sell, upon any
151.16person engaged in business as a distributor, and upon the use or storage by consumers, at
151.17the following rates:
151.18(1) on cigarettes weighing not more than three pounds per thousand, 24 51 mills on
151.19each such cigarette; and
151.20(2) on cigarettes weighing more than three pounds per thousand, 48 102 mills on
151.21each such cigarette.
151.22EFFECTIVE DATE.This section is effective July 1, 2009.

151.23    Sec. 5. Minnesota Statutes 2008, section 297F.05, subdivision 3, is amended to read:
151.24    Subd. 3. Rates; tobacco products. (a) A tax is imposed upon all tobacco products
151.25in this state and upon any person engaged in business as a distributor, at the rate rates of:
151.26(1) 35 percent of the wholesale sales price of the tobacco products other than moist
151.27snuff; or
151.28(2) for moist snuff, the greater of:
151.29(i) 91 cents per ounce on the net weight of the moist snuff in ounces, including a
151.30proportionate tax at the like rate on any fractional parts of an ounce, as listed by the
151.31manufacturer and rounded up to the nearest one-tenth of an ounce; or
151.32(ii) $1.09 per container.
151.33(b) The tax is imposed at the time the distributor:
152.1(1) brings, or causes to be brought, into this state from outside the state tobacco
152.2products for sale;
152.3(2) makes, manufactures, or fabricates tobacco products in this state for sale in
152.4this state; or
152.5(3) ships or transports tobacco products to retailers in this state, to be sold by those
152.6retailers.
152.7EFFECTIVE DATE.This section is effective July 1, 2009, but does not apply
152.8to any moist snuff (1) that was in the inventory of a distributor, wholesaler, or retail
152.9dealer within this state on that date, or in the possession of a consumer within this state
152.10on that date, and (2) as to which the tax levied by Minnesota Statutes, section 297F.05,
152.11subdivisions 3 and 4, and the tobacco health impact fee levied by Minnesota Statutes,
152.12section 256.9658, subdivision 3, paragraph (b), had been paid as of August 1, 2009.

152.13    Sec. 6. Minnesota Statutes 2008, section 297F.05, subdivision 4, is amended to read:
152.14    Subd. 4. Use tax; tobacco products. A tax is imposed upon the use or storage by
152.15consumers of tobacco products in this state, and upon such consumers, at the rate rates of:
152.16(1) 35 percent of the cost to the consumer of the tobacco products other than moist
152.17snuff; and
152.18(2) for moist snuff, the greater of:
152.19(i) 91 cents per ounce on the net weight of the moist snuff in ounces, including a
152.20proportionate tax at the like rate on any fractional parts of an ounce, as listed by the
152.21manufacturer and rounded up to the nearest one-tenth of an ounce; or
152.22(ii) $1.09 per container.
152.23EFFECTIVE DATE.This section is effective July 1, 2009, but does not apply
152.24to any moist snuff (1) that was in the inventory of a distributor, wholesaler, or retail
152.25dealer within this state on that date, or in the possession of a consumer within this state
152.26on that date, and (2) as to which the tax levied by Minnesota Statutes, section 297F.05,
152.27subdivisions 3 and 4, and the tobacco health impact fee levied by Minnesota Statutes,
152.28section 256.9658, subdivision 3, paragraph (b), had been paid as of August 1, 2009.

152.29    Sec. 7. Minnesota Statutes 2008, section 297F.05, is amended by adding a subdivision
152.30to read:
152.31    Subd. 8. Inflation adjustment. (a) Each year the rates of tax applicable to moist
152.32snuff under subdivisions 3 and 4 are adjusted for inflation as provided in this subdivision.
152.33The inflation adjusted rate of tax applies to sales, use, and possession of moist snuff
152.34during the calendar year.
153.1(b) In making the inflation adjustment under this subdivision for a calendar year, the
153.2commissioner shall adjust the tax rate by the percentage determined under section 1(f)
153.3of the Internal Revenue Code of 1986, except that in section 1(f)(3)(B) the word "2010"
153.4is substituted for the word "1992." For 2012, the commissioner shall then determine the
153.5percentage change from the 12 months ending on August 31, 2010, to the 12 months
153.6ending on August 31, 2011, and in each subsequent year, from the 12 months ending on
153.7August 31, 2010, to the 12 months ending on August 31 of the year preceding the calendar
153.8year. The amount as adjusted must be rounded to the nearest cent. If the amount ends
153.9in 0.5 cent, the amount is rounded up to the nearest cent.
153.10(c) The determination of the commissioner under this subdivision is not a "rule" and
153.11is not subject to the Administrative Procedure Act in chapter 14.
153.12EFFECTIVE DATE.This section is effective beginning for calendar year 2012.

153.13    Sec. 8. Minnesota Statutes 2008, section 297G.03, subdivision 1, is amended to read:
153.14    Subdivision 1. General rate; distilled spirits and wine. The following excise tax is
153.15imposed on all distilled spirits and wine manufactured, imported, sold, or possessed in
153.16this state:

153.17				Standard			Metric
153.18 153.19 153.20 153.21	(a) Distilled spirits, liqueurs, cordials, and specialties regardless of alcohol content (excluding ethyl alcohol)		$	5.037.59 per gallon		$	1.33 2.01 per liter
153.22 153.23 153.24 153.25	(b) Wine containing 14 percent or less alcohol by volume (except cider as defined in section 297G.01, subdivision 3a)		$	.30.56 per gallon		$	.08.15 per liter
153.26 153.27 153.28	(c) Wine containing more than 14 percent but not more than 21 percent alcohol by volume		$	.951.20 per gallon		$	.25.32 per liter
153.29 153.30 153.31	(d) Wine containing more than 21 percent but not more than 24 percent alcohol by volume		$	1.822.07 per gallon		$	.48.55 per liter
153.32 153.33	(e) Wine containing more than 24 percent alcohol by volume		$	3.523.77 per gallon		$	.931.00 per liter
153.34 153.35	(f) Natural and artificial sparkling wines containing alcohol		$	1.822.07 per gallon		$	.48.55 per liter
153.36 153.37	(g) Cider as defined in section 297G.01, subdivision 3a		$	.15.41 per gallon		$	.04.11 per liter
153.38	(h) Low alcohol dairy cocktails		$	.08 per gallon		$	.02 per liter

153.39In computing the tax on a package of distilled spirits or wine, a proportional tax at a
153.40like rate on all fractional parts of a gallon or liter must be paid, except that the tax on a
153.41fractional part of a gallon less than 1/16 of a gallon is the same as for 1/16 of a gallon.
154.1EFFECTIVE DATE.This section is effective July 1, 2009.

154.2    Sec. 9. Minnesota Statutes 2008, section 297G.04, is amended to read:
154.3297G.04 FERMENTED MALT BEVERAGES; RATE OF TAX.
154.4    Subdivision 1. Tax imposed. The following excise tax is imposed on all fermented
154.5malt beverages that are imported, directly or indirectly sold, or possessed in this state:
154.6(1) on fermented malt beverages containing not more than 3.2 percent alcohol by
154.7weight, $2.40 $5.71 per 31-gallon barrel; and
154.8(2) on fermented malt beverages containing more than 3.2 percent alcohol by
154.9weight, $4.60 $7.91 per 31-gallon barrel.
154.10For fractions of a 31-gallon barrel, the tax rate is calculated proportionally.
154.11    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages is
154.12entitled to a tax credit of $4.60 $7.91 per barrel on 25,000 barrels sold in any fiscal year
154.13beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
154.14take the credit on the 18th day of each month, but the total credit allowed may not exceed
154.15in any fiscal year the lesser of:
154.16(1) the liability for tax; or
154.17(2) $115,000 $198,000.
154.18For purposes of this subdivision, a "qualified brewer" means a brewer, whether
154.19or not located in this state, manufacturing less than 100,000 barrels of fermented malt
154.20beverages in the calendar year immediately preceding the calendar year for which the
154.21credit under this subdivision is claimed. In determining the number of barrels, all brands
154.22or labels of a brewer must be combined. All facilities for the manufacture of fermented
154.23malt beverages owned or controlled by the same person, corporation, or other entity
154.24must be treated as a single brewer.
154.25EFFECTIVE DATE.This section is effective July 1, 2009.

154.26    Sec. 10. FLOOR STOCKS TAX.
154.27    Subdivision 1. Cigarettes. (a) A floor stocks cigarette sales tax is imposed on every
154.28person engaged in the business in this state as a distributor, retailer, subjobber, vendor,
154.29manufacturer, or manufacturer's representative of cigarettes, on the stamped cigarettes and
154.30unaffixed stamps in the person's possession or under the person's control at 12:01 a.m. on
154.31July 1, 2009. The tax is imposed at the rate of $.54 per pack of 20 cigarettes. For packs of
154.32cigarettes with other than 20 cigarettes, the tax is adjusted proportionally.
154.33(b) Each distributor, by August 15, 2009, shall file a return with the commissioner,
154.34in the form the commissioner prescribes, showing the stamped cigarettes and unaffixed
155.1stamps on hand at 12:01 a.m. on July 1, 2009, and the amount of tax due on the cigarettes
155.2and unaffixed stamps. The tax imposed by this section is due and payable by July 15,
155.32009, and after that date bears interest at the rate of one percent per month.
155.4(c) Each retailer, subjobber, vendor, manufacturer, or manufacturer's representative,
155.5by August 15, 2009, shall file a return with the commissioner, in the form the commissioner
155.6prescribes, showing the cigarettes on hand at 12:01 a.m. on July 1, 2009, and the amount
155.7of tax due on the cigarettes. The tax imposed by this section is due and payable by July
155.815, 2009, and after that date bears interest at the rate of one percent per month.
155.9    Subd. 2. Audit and enforcement. The audit, assessment, penalty, and collection
155.10provisions applicable to the taxes imposed under Minnesota Statutes, chapter 297F, apply
155.11to the tax under this section. The commissioner may require a distributor to receive and
155.12maintain copies of floor stocks tax returns filed by all persons requesting a credit for
155.13returned cigarettes.
155.14    Subd. 3. Deposit of revenues. The commissioner of revenue shall deposit the
155.15revenue from the tax imposed under this section in the state treasury and credit it to the
155.16general fund.
155.17EFFECTIVE DATE.This section is effective the day following final enactment.

155.18    Sec. 11. ADJUSTMENT OF CIGARETTE SALES TAX.
155.19Notwithstanding the provisions of Minnesota Statutes, section 297F.25, the
155.20commissioner of revenue shall adjust the cigarette sales tax rate under Minnesota Statutes,
155.21section 297F.25, effective July 1, 2009, to reflect the estimated effect on the average
155.22weighted retail price of cigarettes of the imposition of the increased cigarette taxes under
155.23Minnesota Statutes, section 297F.05, subdivision 1.
155.24EFFECTIVE DATE.This section is effective the day following final enactment.


155.27    Section 1. Minnesota Statutes 2008, section 84.82, subdivision 10, is amended to read:
155.28    Subd. 10. Proof of sales tax payment. (a) A person applying for initial registration
155.29of a snowmobile, or applying for reregistration for the first time after a change of
155.30ownership under subdivision 1, must provide a snowmobile purchaser's certificate,
155.31showing a complete description of the snowmobile, the seller's name and address, the full
155.32purchase price of the snowmobile, and the trade-in allowance, if any. The certificate must
155.33include information showing either (1) that the sales and use tax under chapter 297A was
155.34paid or (2) the purchase was exempt from tax under chapter 297A. The commissioner of
156.1public safety, in consultation with the commissioner and the commissioner of revenue,
156.2shall prescribe the form of the certificate.
156.3    (b) The certificate is not required if the applicant provides a receipt, invoice, or other
156.4document that shows the snowmobile was purchased from a retailer maintaining a place of
156.5business in this state as defined in section 297A.66, subdivision 1.
156.6    (c) If the applicant cannot meet the provisions in either paragraph (a) or (b), the
156.7applicant must provide a receipt, invoice, or other document from the previous owner
156.8certifying the amount paid for the snowmobile, whether in money or other consideration,
156.9and remit the applicable use tax along with the registration fee.
156.10EFFECTIVE DATE.This section is effective for sales and purchases made after
156.11June 30, 2009.

156.12    Sec. 2. Minnesota Statutes 2008, section 84.922, subdivision 11, is amended to read:
156.13    Subd. 11. Proof of sales tax payment. (a) A person applying for initial registration
156.14in Minnesota of an all-terrain vehicle, or transfer of a registration under subdivision 4,
156.15shall provide a purchaser's certificate showing a complete description of the all-terrain
156.16vehicle, the seller's name and address, the full purchase price of the all-terrain vehicle,
156.17and the trade-in allowance, if any. The certificate also must include information showing
156.18either that (1) the sales and use tax under chapter 297A was paid, or (2) the purchase
156.19was exempt from tax under chapter 297A. The certificate is not required if the applicant
156.20provides a receipt, invoice, or other document that shows the all-terrain vehicle was
156.21purchased from a retailer maintaining a place of business in this state as defined in section
156.22297A.66, subdivision 1 .
156.23    (b) If the applicant cannot meet the provisions in paragraph (a), the applicant must
156.24provide a receipt, invoice, or other document from the previous owner certifying the
156.25amount paid for the all-terrain vehicle, whether in money or other consideration, and remit
156.26the applicable use tax along with the registration or transfer fee.
156.27EFFECTIVE DATE.This section is effective for sales and purchases made after
156.28June 30, 2009.

156.29    Sec. 3. Minnesota Statutes 2008, section 86B.401, subdivision 12, is amended to read:
156.30    Subd. 12. Proof of sales tax payment. (a) A person applying for initial licensing of
156.31a watercraft, or applying for a duplicate license due to change of ownership as required
156.32in subdivision 8, must provide a watercraft purchaser's certificate, showing a complete
156.33description of the watercraft, the seller's name and address, the full purchase price of the
156.34watercraft, and the trade-in allowance, if any. The certificate must include information
157.1showing either (1) that the sales and use tax under chapter 297A was paid or (2) the
157.2purchase was exempt from tax under chapter 297A. The commissioner of public safety,
157.3in consultation with the commissioner and the commissioner of revenue, shall prescribe
157.4the form of the certificate.
157.5(b) The certificate is not required if the applicant provides a receipt, invoice, or other
157.6document that shows the watercraft was purchased from a retailer maintaining a place of
157.7business in this state as defined in section 297A.66, subdivision 1.
157.8(c) If the applicant cannot meet the provisions in either paragraph (a) or (b), the
157.9applicant must provide a receipt, invoice, or other document from the previous owner
157.10certifying the amount paid for the watercraft, whether in money or other consideration,
157.11and remit the applicable use tax along with the license fee.
157.12EFFECTIVE DATE.This section is effective for sales and purchases made after
157.13June 30, 2009.

157.14    Sec. 4. [270C.085] NOTIFICATION REQUIREMENTS; SALES AND USE
157.15TAXES.
157.16The commissioner of revenue shall establish a means of electronically notifying
157.17persons holding a sales tax permit under section 297A.84 of any statutory change in
157.18chapter 297A and any issuance or change in any administrative rule, revenue notice, or
157.19sales tax fact sheet or other written information provided by the department explaining the
157.20interpretation or administration of the tax imposed under that chapter. The notification
157.21must indicate the basic subject of the statute, rule, fact sheet, or other material and provide
157.22an electronic link to the material. Any person holding a sales tax permit that provides
157.23an electronic address to the department must receive these notifications unless they
157.24specifically request electronically, or in writing, to be removed from the notification list.
157.25This requirement does not replace traditional means of notifying the general public or
157.26persons without access to electronic communications of changes in the sales tax law. The
157.27electronic notification must begin no later than December 31, 2009.
157.28EFFECTIVE DATE.This section is effective the day following final enactment.

157.29    Sec. 5. Minnesota Statutes 2008, section 289A.11, subdivision 1, is amended to read:
157.30    Subdivision 1. Return required. (a) Except as provided in section 289A.18,
157.31subdivision 4 , for the month in which taxes imposed by chapter 297A are payable, or for
157.32which a return is due, a return for the preceding reporting period must be filed with the
157.33commissioner in the form and manner the commissioner prescribes. A person making
157.34sales at retail at two or more places of business may file a consolidated return subject to
158.1rules prescribed by the commissioner. In computing the dollar amount of items on the
158.2return, the amounts are rounded off to the nearest whole dollar, disregarding amounts less
158.3than 50 cents and increasing amounts of 50 cents to 99 cents to the next highest dollar.
158.4(b) Notwithstanding this subdivision, a person who is not required to hold a sales tax
158.5permit under chapter 297A and who makes annual purchases, for use in a trade or business,
158.6of less than $18,500, or a person who is not required to hold a sales tax permit and who
158.7makes purchases for personal use, that are subject to the use tax imposed by section
158.8297A.63 , may file an annual use tax return on a form prescribed by the commissioner. If a
158.9person who qualifies for an annual use tax reporting period is required to obtain a sales tax
158.10permit or makes use tax purchases, for use in a trade or business, in excess of $18,500
158.11during the calendar year, the reporting period must be considered ended at the end of the
158.12month in which the permit is applied for or the purchase in excess of $18,500 is made and
158.13a return must be filed for the preceding reporting period.
158.14(c) Notwithstanding paragraph (a), a person prohibited by the person's religious
158.15beliefs from using electronics shall be allowed to file by mail, without any additional fees.
158.16The filer must notify the commissioner of revenue of the intent to file by mail on a form
158.17prescribed by the commissioner. A return filed under this paragraph must be postmarked
158.18no later than the day the return is due in order to be considered filed on a timely basis.
158.19EFFECTIVE DATE.This section is effective for returns filed after June 30, 2009.

158.20    Sec. 6. Minnesota Statutes 2008, section 289A.20, subdivision 4, is amended to read:
158.21    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and
158.22payable to the commissioner monthly on or before the 20th day of the month following the
158.23month in which the taxable event occurred, or following another reporting period as the
158.24commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
158.25(f) or (g), except that use taxes due on an annual use tax return as provided under section
158.26289A.11, subdivision 1 , are payable by April 15 following the close of the calendar year.
158.27    (b) A vendor having a liability of $120,000 or more during a fiscal year ending June
158.2830 must remit the June liability for the next year in the following manner:
158.29    (1) Two business days before June 30 of the year, the vendor must remit 90 percent
158.30of the estimated June liability to the commissioner.
158.31    (2) On or before August 20 of the year, the vendor must pay any additional amount
158.32of tax not remitted in June.
158.33    (c) A vendor having a liability of:
158.34    (1) $20,000 or more in the fiscal year ending June 30, 2005; or
159.1    (2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years
159.2thereafter,
159.3must remit all liabilities on returns due for periods beginning in the subsequent calendar
159.4year by electronic means on or before the 20th day of the month following the month in
159.5which the taxable event occurred, or on or before the 20th day of the month following the
159.6month in which the sale is reported under section 289A.18, subdivision 4, except for 90
159.7percent of the estimated June liability, which is due two business days before June 30. The
159.8remaining amount of the June liability is due on August 20.
159.9(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
159.10religious beliefs from paying electronically shall be allowed to remit the payment by mail.
159.11The filer must notify the commissioner of revenue of the intent to pay by mail before
159.12doing so on a form prescribed by the commissioner. No extra fee may be charged to a
159.13person making payment by mail under this paragraph. The payment must be postmarked
159.14at least two business days before the due date for making the payment in order to be
159.15considered paid on a timely basis.
159.16EFFECTIVE DATE.This section is effective for payments remitted after June
159.1730, 2009.

159.18    Sec. 7. Minnesota Statutes 2008, section 297A.61, subdivision 3, is amended to read:
159.19    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
159.20to, each of the transactions listed in this subdivision.
159.21    (b) Sale and purchase include:
159.22    (1) any transfer of title or possession, or both, of tangible personal property,
159.23specified digital products, or other digital products whether absolutely or conditionally, for
159.24a consideration in money or by exchange or barter; and
159.25    (2) the leasing of or the granting of a license to use or consume, for a consideration
159.26in money or by exchange or barter, tangible personal property, specified digital products or
159.27other digital products, other than a manufactured home used for residential purposes for
159.28a continuous period of 30 days or more.
159.29    (c) Sale and purchase include the production, fabrication, printing, or processing of
159.30tangible personal property for a consideration for consumers who furnish either directly or
159.31indirectly the materials used in the production, fabrication, printing, or processing. It also
159.32includes the production or processing of specified digital products or other digital products
159.33for a consideration for consumers who furnish either directly or indirectly materials or
159.34other inputs used in the production or processing.
160.1    (d) Sale and purchase include the preparing for a consideration of food.
160.2Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
160.3to, the following:
160.4    (1) prepared food sold by the retailer;
160.5    (2) soft drinks;
160.6    (3) candy;
160.7    (4) dietary supplements; and
160.8    (5) all food sold through vending machines.
160.9    (e) A sale and a purchase includes the furnishing for a consideration of electricity,
160.10gas, water, or steam for use or consumption within this state.
160.11    (f) A sale and a purchase includes the transfer for a consideration of prewritten
160.12computer software whether delivered electronically, by load and leave, or otherwise.
160.13    (g) A sale and a purchase includes the furnishing for a consideration of the following
160.14services:
160.15    (1) the privilege of admission to places of amusement, recreational areas, or athletic
160.16events, and the making available of amusement devices, tanning facilities, reducing
160.17salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
160.18    (2) lodging and related services by a hotel, rooming house, resort, campground,
160.19motel, or trailer camp, including furnishing the guest of the facility with access to
160.20telecommunication services, and the granting of any similar license to use real property
160.21in a specific facility, other than the renting or leasing of it for a continuous period of
160.2230 days or more under an enforceable written agreement that may not be terminated
160.23without prior notice;
160.24    (3) nonresidential parking services, whether on a contractual, hourly, or other
160.25periodic basis, except for parking at a meter;
160.26    (4) the granting of membership in a club, association, or other organization if:
160.27    (i) the club, association, or other organization makes available for the use of its
160.28members sports and athletic facilities, without regard to whether a separate charge is
160.29assessed for use of the facilities; and
160.30    (ii) use of the sports and athletic facility is not made available to the general public
160.31on the same basis as it is made available to members.
160.32Granting of membership means both onetime initiation fees and periodic membership
160.33dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
160.34squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
160.35swimming pools; and other similar athletic or sports facilities;
161.1    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
161.2material used in road construction, and delivery of concrete block by a third party if
161.3the delivery would be subject to the sales tax if provided by the seller of the concrete
161.4block; and
161.5    (6) services as provided in this clause:
161.6    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
161.7and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
161.8drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
161.9include services provided by coin operated facilities operated by the customer;
161.10    (ii) motor vehicle washing, waxing, and cleaning services, including services
161.11provided by coin operated facilities operated by the customer, and rustproofing,
161.12undercoating, and towing of motor vehicles;
161.13    (iii) building and residential cleaning, maintenance, and disinfecting services and
161.14pest control and exterminating services;
161.15    (iv) detective, security, burglar, fire alarm, and armored car services; but not
161.16including services performed within the jurisdiction they serve by off-duty licensed peace
161.17officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit
161.18organization for monitoring and electronic surveillance of persons placed on in-home
161.19detention pursuant to court order or under the direction of the Minnesota Department
161.20of Corrections;
161.21    (v) pet grooming services;
161.22    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
161.23and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
161.24plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
161.25clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
161.26public utility lines. Services performed under a construction contract for the installation of
161.27shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
161.28    (vii) massages, except when provided by a licensed health care facility or
161.29professional or upon written referral from a licensed health care facility or professional for
161.30treatment of illness, injury, or disease; and
161.31    (viii) the furnishing of lodging, board, and care services for animals in kennels and
161.32other similar arrangements, but excluding veterinary and horse boarding services.
161.33    In applying the provisions of this chapter, the terms "tangible personal property"
161.34and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
161.35and the provision of these taxable services, unless specifically provided otherwise.
161.36Services performed by an employee for an employer are not taxable. Services performed
162.1by a partnership or association for another partnership or association are not taxable if
162.2one of the entities owns or controls more than 80 percent of the voting power of the
162.3equity interest in the other entity. Services performed between members of an affiliated
162.4group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
162.5group of corporations" means those entities that would be classified as members of an
162.6affiliated group as defined under United States Code, title 26, section 1504, disregarding
162.7the exclusions in section 1504(b).
162.8    For purposes of clause (5), "road construction" means construction of (1) public
162.9roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
162.10metropolitan area up to the point of the emergency response location sign.
162.11    (h) A sale and a purchase includes the furnishing for a consideration of tangible
162.12personal property or taxable services by the United States or any of its agencies or
162.13instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
162.14subdivisions.
162.15    (i) A sale and a purchase includes the furnishing for a consideration of
162.16telecommunications services, ancillary services associated with telecommunication
162.17services, cable television services, direct satellite services, and ring tones.
162.18Telecommunication services include, but are not limited to, the following services,
162.19as defined in section 297A.669: air-to-ground radiotelephone service, mobile
162.20telecommunication service, postpaid calling service, prepaid calling service, prepaid
162.21wireless calling service, and private communication services. The services in this
162.22paragraph are taxed to the extent allowed under federal law.
162.23    (j) A sale and a purchase includes the furnishing for a consideration of installation if
162.24the installation charges would be subject to the sales tax if the installation were provided
162.25by the seller of the item being installed.
162.26    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
162.27to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
162.28the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
162.2965B.29, subdivision 1 , clause (1).
162.30(l) A sale and a purchase includes the furnishing for a consideration of specified
162.31digital products and other digital products and granting the right for a consideration to use
162.32specified digital products and other digital products on a temporary or permanent basis and
162.33regardless of whether the purchaser is required to make continued payments for such right.
162.34EFFECTIVE DATE.This section is effective for sales and purchases made after
162.35June 30, 2009.

163.1    Sec. 8. Minnesota Statutes 2008, section 297A.61, subdivision 4, is amended to read:
163.2    Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
163.3purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
163.4course of business as defined in subdivision 21.
163.5    (b) A sale of property used by the owner only by leasing it to others or by holding it
163.6in an effort to lease it, and put to no use by the owner other than resale after the lease or
163.7effort to lease, is a sale of property for resale.
163.8    (c) A sale of master computer software that is purchased and used to make copies for
163.9sale or lease is a sale of property for resale.
163.10    (d) A sale of building materials, supplies, and equipment to owners, contractors,
163.11subcontractors, or builders for the erection of buildings or the alteration, repair, or
163.12improvement of real property is a retail sale in whatever quantity sold, whether the sale is
163.13for purposes of resale in the form of real property or otherwise.
163.14    (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
163.15for installation of the floor covering is a retail sale and not a sale for resale since a sale
163.16of floor covering which includes installation is a contract for the improvement of real
163.17property.
163.18    (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
163.19for installation of the items is a retail sale and not a sale for resale since a sale of
163.20shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
163.21the improvement of real property.
163.22    (g) A sale of tangible personal property, specified digital products, or other digital
163.23products that is awarded as prizes is a retail sale and is not considered a sale of property
163.24for resale.
163.25    (h) A sale of tangible personal property, specified digital products, or other digital
163.26products utilized or employed in the furnishing or providing of services under subdivision
163.273, paragraph (g), clause (1), including, but not limited to, property given as promotional
163.28items, is a retail sale and is not considered a sale of property for resale.
163.29    (i) A sale of tangible personal property, specified digital products, or other digital
163.30products used in conducting lawful gambling under chapter 349 or the State Lottery under
163.31chapter 349A, including, but not limited to, property given as promotional items, is a retail
163.32sale and is not considered a sale of property for resale.
163.33    (j) A sale of machines, equipment, or devices that are used to furnish, provide, or
163.34dispense goods or services, including, but not limited to, coin-operated devices, is a retail
163.35sale and is not considered a sale of property for resale.
164.1    (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
164.2payment becomes due under the terms of the agreement or the trade practices of the
164.3lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01,
164.4subdivision 11 , but excluding vehicles with a manufacturer's gross vehicle weight rating
164.5greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
164.6the lease is executed.
164.7    (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
164.8title or possession of the tangible personal property.
164.9    (m) A sale of a bundled transaction in which one or more of the products included
164.10in the bundle is a taxable product is a retail sale, except that if one of the products
164.11is a telecommunication service, ancillary service, Internet access, or audio or video
164.12programming service, and the seller has maintained books and records identifying through
164.13reasonable and verifiable standards the portions of the price that are attributable to the
164.14distinct and separately identifiable products, then the products are not considered part of a
164.15bundled transaction. For purposes of this paragraph:
164.16    (1) the books and records maintained by the seller must be maintained in the regular
164.17course of business, and do not include books and records created and maintained by the
164.18seller primarily for tax purposes;
164.19    (2) books and records maintained in the regular course of business include, but are
164.20not limited to, financial statements, general ledgers, invoicing and billing systems and
164.21reports, and reports for regulatory tariffs and other regulatory matters; and
164.22    (3) books and records are maintained primarily for tax purposes when the books
164.23and records identify taxable and nontaxable portions of the price, but the seller maintains
164.24other books and records that identify different prices attributable to the distinct products
164.25included in the same bundled transaction.
164.26(n) A sale of specified digital products or other digital products to an end user with
164.27or without rights of permanent use and regardless of whether rights of use are conditioned
164.28upon continued payment by the purchaser. When a digital code has been purchased that
164.29relates to specified digital products or other digital products, the subsequent receipt of or
164.30access to the related specified digital products or other digital products is not a retail sale.
164.31EFFECTIVE DATE.This section is effective for sales and purchases made after
164.32June 30, 2009.

164.33    Sec. 9. Minnesota Statutes 2008, section 297A.61, subdivision 5, is amended to read:
165.1    Subd. 5. Storage. "Storage" includes keeping or retaining tangible personal
165.2property, specified digital products, or other digital products in Minnesota for any purpose
165.3except sale in the regular course of business.
165.4EFFECTIVE DATE.This section is effective for sales and purchases made after
165.5June 30, 2009.

165.6    Sec. 10. Minnesota Statutes 2008, section 297A.61, subdivision 6, is amended to read:
165.7    Subd. 6. Use. (a) "Use" includes the exercise of a right or power incident to the
165.8ownership of any interest in tangible personal property, specified digital products, other
165.9digital products, or services, purchased from a retailer, other than the sale of that property
165.10in the regular course of business.
165.11(b) Use includes the consumption of printed materials in the creation of nontaxable
165.12advertising that is distributed, either directly or indirectly, within Minnesota.
165.13EFFECTIVE DATE.This section is effective for sales and purchases made after
165.14June 30, 2009.

165.15    Sec. 11. Minnesota Statutes 2008, section 297A.61, subdivision 10, is amended to read:
165.16    Subd. 10. Tangible personal property. (a) "Tangible personal property" means
165.17personal property that can be seen, weighed, measured, felt, or touched, or that is in any
165.18other manner perceptible to the senses. "Tangible personal property" includes, but is not
165.19limited to, electricity, water, gas, steam, and prewritten computer software.
165.20    (b) Tangible personal property does not include:
165.21    (1) large ponderous machinery and equipment used in a business or production
165.22activity which at common law would be considered to be real property;
165.23    (2) property which is subject to an ad valorem property tax;
165.24    (3) property described in section 272.02, subdivision 9, clauses (a) to (d); and
165.25    (4) property described in section 272.03, subdivision 2, clauses (3) and (5); and
165.26(5) specified digital products, or other digital products transferred electronically,
165.27except prewritten computer software delivered electronically is tangible personal property.
165.28EFFECTIVE DATE.This section is effective for sales and purchases made after
165.29June 30, 2009.

165.30    Sec. 12. Minnesota Statutes 2008, section 297A.61, subdivision 14a, is amended to
165.31read:
165.32    Subd. 14a. Lease or rental. (a) "Lease or rental" means any transfer of possession
165.33or control of tangible personal property, specified digital products, or other digital
166.1products for a fixed or indeterminate term for consideration. A lease or rental may include
166.2future options to purchase or extend.
166.3(b) Lease or rental does not include:
166.4(1) a transfer of possession or control of property under a security agreement or
166.5deferred payment plan that requires the transfer of title upon completion of the required
166.6payments;
166.7(2) a transfer of possession or control of property under an agreement that requires
166.8the transfer of title upon completion of required payments and payment of an option price
166.9does not exceed the greater of $100 or one percent of the total required payments; or
166.10(3) providing tangible personal property along with an operator for a fixed or
166.11indeterminate period of time. A condition of this exclusion is that the operator is necessary
166.12for the equipment to perform as designed. For the purpose of this subdivision, an operator
166.13must do more than maintain, inspect, or set up the tangible personal property.
166.14(c) Lease or rental does include agreements covering motor vehicles and trailers
166.15where the amount of consideration may be increased or decreased by reference to the
166.16amount realized upon sale or disposition of the property as defined in United States Code,
166.17title 26, section 7701(h)(l).
166.18(d) This definition must be used for sales and use tax purposes regardless if a
166.19transaction is characterized as a lease or rental under generally accepted accounting
166.20principles, the Internal Revenue Code, chapter 336, or other provisions of federal, state, or
166.21local law.
166.22EFFECTIVE DATE.This section is effective for sales and purchases made after
166.23June 30, 2009.

166.24    Sec. 13. Minnesota Statutes 2008, section 297A.61, subdivision 17a, is amended to
166.25read:
166.26    Subd. 17a. Delivered electronically. "Delivered electronically" means delivered
166.27to the purchaser by means other than tangible storage media; and unless the context
166.28indicates otherwise, applies to the delivery of computer software. Computer software is
166.29not considered "delivered electronically" to a purchaser simply because the purchaser
166.30has access to the product.
166.31EFFECTIVE DATE.This section is effective for sales and purchases made after
166.32June 30, 2009.

166.33    Sec. 14. Minnesota Statutes 2008, section 297A.61, subdivision 21, is amended to read:
167.1    Subd. 21. Normal course of business. "Normal course of business" means
167.2activities that demonstrate a commercial continuity or consistency of making sales or
167.3performing services for the purposes of attaining profit or producing income. Factors that
167.4indicate that a person is acting in the normal course of business include:
167.5(1) systematic solicitation of sales through advertising media;
167.6(2) entering into contracts to perform services or provide tangible personal property,
167.7specified digital products, or other digital products;
167.8(3) maintaining a place of business; or
167.9(4) use of exemption certificates to purchase items exempt from the sales tax.
167.10EFFECTIVE DATE.This section is effective for sales and purchases made after
167.11June 30, 2009.

167.12    Sec. 15. Minnesota Statutes 2008, section 297A.61, subdivision 38, is amended to read:
167.13    Subd. 38. Bundled transaction. (a) "Bundled transaction" means the retail sale
167.14of two or more products when the products are otherwise distinct and identifiable, and
167.15the products are sold for one nonitemized price. As used in this subdivision, "product"
167.16includes tangible personal property, services, intangibles, and digital goods, including
167.17specified digital products, or other digital products, but does not include real property or
167.18services to real property. A bundled transaction does not include the sale of any products
167.19in which the sales price varies, or is negotiable, based on the selection by the purchaser of
167.20the products included in the transaction.
167.21    (b) For purposes of this subdivision, "distinct and identifiable" products does not
167.22include:
167.23    (1) packaging and other materials, such as containers, boxes, sacks, bags, and
167.24bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the
167.25products and are incidental or immaterial to the retail sale. Examples of packaging that are
167.26incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags,
167.27and express delivery envelopes and boxes;
167.28    (2) a promotional product provided free of charge with the required purchase of
167.29another product. A promotional product is provided free of charge if the sales price of
167.30another product, which is required to be purchased in order to receive the promotional
167.31product, does not vary depending on the inclusion of the promotional product; and
167.32    (3) items included in the definition of sales price.
167.33    (c) For purposes of this subdivision, the term "one nonitemized price" does not
167.34include a price that is separately identified by product on binding sales or other supporting
167.35sales-related documentation made available to the customer in paper or electronic form
168.1including but not limited to an invoice, bill of sale, receipt, contract, service agreement,
168.2lease agreement, periodic notice of rates and services, rate card, or price list.
168.3    (d) A transaction that otherwise meets the definition of a bundled transaction is
168.4not a bundled transaction if it is:
168.5    (1) the retail sale of tangible personal property and a service and the tangible
168.6personal property is essential to the use of the service, and is provided exclusively in
168.7connection with the service, and the true object of the transaction is the service;
168.8    (2) the retail sale of services if one service is provided that is essential to the use or
168.9receipt of a second service and the first service is provided exclusively in connection with
168.10the second service and the true object of the transaction is the second service;
168.11    (3) a transaction that includes taxable products and nontaxable products and the
168.12purchase price or sales price of the taxable products is de minimis; or
168.13    (4) the retail sale of exempt tangible personal property and taxable tangible personal
168.14property if:
168.15    (i) the transaction includes food and food ingredients, drugs, durable medical
168.16equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices,
168.17or medical supplies; and
168.18    (ii) the seller's purchase price or sales price of the taxable tangible personal property
168.19is 50 percent or less of the total purchase price or sales price of the bundled tangible
168.20personal property. Sellers must not use a combination of the purchase price and sales
168.21price of the tangible personal property when making the 50 percent determination for
168.22a transaction.
168.23    (e) For purposes of this subdivision, "purchase price" means the measure subject to
168.24use tax on purchases made by the seller, and "de minimis" means that the seller's purchase
168.25price or sales price of the taxable products is ten percent or less of the total purchase
168.26price or sales price of the bundled products. Sellers shall use either the purchase price
168.27or the sales price of the products to determine if the taxable products are de minimis.
168.28Sellers must not use a combination of the purchase price and sales price of the products
168.29to determine if the taxable products are de minimis. Sellers shall use the full term of a
168.30service contract to determine if the taxable products are de minimis.
168.31EFFECTIVE DATE.This section is effective for sales and purchases made after
168.32June 30, 2009.

168.33    Sec. 16. Minnesota Statutes 2008, section 297A.61, is amended by adding a
168.34subdivision to read:
169.1    Subd. 47. Digital audio visual work. "Digital audio visual work" means a series
169.2of related images, together with accompanying sounds, if any, which, when shown in
169.3succession, impart an impression of motion, that are transferred electronically. Digital
169.4audio visual works include such items as motion pictures, movies, musical videos, news
169.5and entertainment programs, and live events. Digital audio visual works do not include
169.6video greeting cards sent by electronic mail. Unless the context provides otherwise, digital
169.7audio visual works include the digital code or a subscription to or access to a digital code
169.8for receiving, accessing, or otherwise obtaining digital audio visual works.
169.9EFFECTIVE DATE.This section is effective for sales and purchases made after
169.10June 30, 2009.

169.11    Sec. 17. Minnesota Statutes 2008, section 297A.61, is amended by adding a
169.12subdivision to read:
169.13    Subd. 48. Digital audio work. "Digital audio work" means a work that results
169.14from the fixation of a series of musical, spoken, or other sounds, that are transferred
169.15electronically. Digital audio works include such items as songs, music, readings of books
169.16or other written materials, speeches, ring tones, or other sound recordings which may be
169.17either prerecorded or live. Digital audio works do not include audio greeting cards sent
169.18by electronic mail. Unless the context provides otherwise, digital audio works include
169.19the digital code or a subscription to or access to a digital code for receiving, accessing,
169.20or otherwise obtaining digital audio works. For purposes of this subdivision, "ring tone"
169.21means a digitized sound file that is downloaded onto a device and that may be used to alert
169.22the customer with respect to a communication. A ring tone does not include ring back tones
169.23or other digital audio files that are not stored on the customer's communication device.
169.24EFFECTIVE DATE.This section is effective for sales and purchases made after
169.25June 30, 2009.

169.26    Sec. 18. Minnesota Statutes 2008, section 297A.61, is amended by adding a
169.27subdivision to read:
169.28    Subd. 49. Digital book. "Digital book" means a work that is a literary work, other
169.29than digital audio visual works or digital audio works, expressed in words, numbers, or
169.30numerical symbols or indicia so long as the product is generally recognized in the ordinary
169.31and usual sense as a book and is transferred electronically. It includes works of fiction,
169.32nonfiction, and short stories. It does not include periodicals, magazines, newspapers, or
169.33other news and information products, chat rooms, or weblogs. Unless the context provides
170.1otherwise, digital books include the digital code or a subscription to or access to a digital
170.2code for receiving, accessing, or otherwise obtaining digital books.
170.3EFFECTIVE DATE.This section is effective for sales and purchases made after
170.4June 30, 2009.

170.5    Sec. 19. Minnesota Statutes 2008, section 297A.61, is amended by adding a
170.6subdivision to read:
170.7    Subd. 50. Digital code. "Digital code" means a code which provides a purchaser
170.8with a right to obtain one or more of the specified digital products or other digital products.
170.9A digital code may be transferred electronically such as through electronic e-mail, or
170.10it may be transferred on a tangible medium, such as a plastic card, a piece of paper or
170.11invoice, or imprinted on another product. A digital code is not a code that represents
170.12stored monetary value that is deducted from a total as it is used by the purchaser and it is
170.13not a code that represents a redeemable card, gift card, or gift certificate that entitles the
170.14holder to select a specified digital product or other digital product of an indicated cash
170.15value. The end user of the digital code is any purchaser except one who receives the
170.16contractual right to redistribute the specified digital product or other digital product which
170.17is the subject of the transaction.
170.18EFFECTIVE DATE.This section is effective for sales and purchases made after
170.19June 30, 2009.

170.20    Sec. 20. Minnesota Statutes 2008, section 297A.61, is amended by adding a
170.21subdivision to read:
170.22    Subd. 51. Specified digital products. "Specified digital products" means
170.23digital audio visual works, digital audio works, and digital books that are transferred
170.24electronically to a customer.
170.25EFFECTIVE DATE.This section is effective for sales and purchases made after
170.26June 30, 2009.

170.27    Sec. 21. Minnesota Statutes 2008, section 297A.61, is amended by adding a
170.28subdivision to read:
170.29    Subd. 52. Transferred electronically. "Transferred electronically" means obtained
170.30by the purchaser by means other than tangible storage media and, unless the context
170.31indicated otherwise, applies to the delivery of specified digital products and other digital
170.32products. For purposes of this subdivision, it is not necessary that a copy of the product
171.1be physically transferred to the purchaser. A product shall be considered to have been
171.2transferred electronically to a purchaser if the purchaser has access to the product.
171.3EFFECTIVE DATE.This section is effective for sales and purchases made after
171.4June 30, 2009.

171.5    Sec. 22. Minnesota Statutes 2008, section 297A.61, is amended by adding a
171.6subdivision to read:
171.7    Subd. 53. Other digital products. "Other digital products" means the following
171.8items when transferred electronically:
171.9(1) greeting cards;
171.10(2) artwork available for reproduction or display purposes; and
171.11(3) video or electronic games.
171.12EFFECTIVE DATE.This section is effective for sales and purchases made after
171.13June 30, 2009.

171.14    Sec. 23. Minnesota Statutes 2008, section 297A.62, is amended by adding a
171.15subdivision to read:
171.16    Subd. 1a. Constitutionally required sales tax increase. An additional sales tax
171.17of 0.375 percent, as required under the Minnesota Constitution, article XI, section 15, is
171.18imposed on the gross receipts from retail sales as defined in section 297A.61, subdivision
171.194, made in this state or to a destination in this state by a person who is required to have
171.20or voluntarily obtains a permit under section 297A.83, subdivision 1. This additional
171.21tax expires July 1, 2034.

171.22    Sec. 24. Minnesota Statutes 2008, section 297A.63, is amended to read:
171.23297A.63 USE TAXES IMPOSED; RATES.
171.24    Subdivision 1. Use of tangible personal property, specified digital products,
171.25other digital products, or taxable services. (a) For the privilege of using, storing,
171.26distributing, or consuming in Minnesota tangible personal property, specified digital
171.27products, other digital products, or taxable services purchased for use, storage, distribution,
171.28or consumption in this state, a use tax is imposed on a person in Minnesota. The tax is
171.29imposed on the purchase price of retail sales of the tangible personal property, specified
171.30digital products, other digital products, or taxable services at the rate of tax imposed under
171.31section 297A.62. A person that purchases property from a Minnesota retailer and returns
171.32the tangible personal property, specified digital products, or other digital products, to a
172.1point within Minnesota, except in the course of interstate commerce, after it was delivered
172.2outside of Minnesota, is subject to the use tax.
172.3    (b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62
172.4was paid on the sales price of the tangible personal property or taxable services.
172.5    (c) No tax is imposed under paragraph (a) if the purchase meets the requirements for
172.6exemption under section 297A.67, subdivision 21.
172.7    (d) When a transaction otherwise meets the definition of a bundled transaction, but
172.8is not a bundled transaction under section 297A.61, subdivision 38, paragraph (d), and
172.9the seller's purchase price of the taxable product or taxable tangible personal property is
172.10equal to or greater than $100, then use tax is imposed on the purchase price of the taxable
172.11product or taxable personal property. For purposes of this paragraph, "purchase price"
172.12means the measure subject to use tax on purchases made by the seller.
172.13    Subd. 2. Use of tangible personal property, specified digital products, other
172.14digital products, made from materials. (a) A use tax is imposed on a person who
172.15manufactures, fabricates, or assembles tangible personal property, specified digital
172.16products, or other digital products, from materials, either within or outside this state and
172.17who uses, stores, distributes, or consumes the tangible personal property, specified digital
172.18products, or other digital products, in Minnesota. The tax is imposed on the purchase price
172.19of retail sales of the materials contained in the tangible personal property, specified digital
172.20products, or other digital products, at the rate of tax imposed under section 297A.62.
172.21(b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62 was
172.22paid on the sales price of materials contained in the tangible personal property, specified
172.23digital products, or other digital products.
172.24EFFECTIVE DATE.This section is effective for sales and purchases made after
172.25June 30, 2009.

172.26    Sec. 25. Minnesota Statutes 2008, section 297A.64, subdivision 2, is amended to read:
172.27    Subd. 2. Fee imposed. (a) A fee equal to five percent of the sales price is imposed
172.28on leases or rentals of vehicles subject to the tax under subdivision 1. The lessor on the
172.29invoice to the customer may designate the fee as "a fee imposed by the State of Minnesota
172.30for the registration of rental cars."
172.31(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
172.32corporation or similar entity, consisting of individual or group members who pay the
172.33organization for the use of a motor vehicle, if the organization:
172.34(1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1
172.35that are available to its members for use, priced on the basis of intervals of one hour or less;
173.1(2) parks its vehicles at unstaffed, self-service locations that are accessible at any
173.2time of the day;
173.3(3) maintains its vehicles, insures its vehicles on behalf of its members, and
173.4purchases fuel for its fleet; and
173.5(4) does not charge usage rates that decline on a per unit basis, whether specified
173.6based on distance or time.
173.7EFFECTIVE DATE.This section is effective July 1, 2009, and applies to
173.8registrations made or renewed on or after that date.

173.9    Sec. 26. Minnesota Statutes 2008, section 297A.66, subdivision 1, is amended to read:
173.10    Subdivision 1. Definitions. (a) To the extent allowed by the United States
173.11Constitution and the laws of the United States, "retailer maintaining a place of business in
173.12this state," or a similar term, means a retailer:
173.13(1) having or maintaining within this state, directly or by a subsidiary or an affiliate,
173.14an office, place of distribution, sales or sample room or place, warehouse, or other place
173.15of business; or
173.16(2) having a representative, including, but not limited to, an affiliate, agent,
173.17salesperson, canvasser, or solicitor operating in this state under the authority of the retailer
173.18or its subsidiary, for any purpose, including the repairing, selling, delivering, installing, or
173.19soliciting of orders for the retailer's goods or services, or the leasing of tangible personal
173.20property, specified digital products, or other digital products, located in this state, whether
173.21the place of business or agent, representative, affiliate, salesperson, canvasser, or solicitor
173.22is located in the state permanently or temporarily, or whether or not the retailer, subsidiary,
173.23or affiliate is authorized to do business in this state.
173.24(b) "Destination of a sale" means the location to which the retailer makes delivery of
173.25the property sold, or causes the property to be delivered, to the purchaser of the property,
173.26or to the agent or designee of the purchaser. The delivery may be made by any means,
173.27including the United States Postal Service or a for-hire carrier.
173.28EFFECTIVE DATE.This section is effective for sales and purchases made after
173.29June 30, 2009.

173.30    Sec. 27. Minnesota Statutes 2008, section 297A.66, is amended by adding a
173.31subdivision to read:
173.32    Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
173.33means a person, whether an independent contractor or other representative, who directly
173.34or indirectly solicits business for the retailer.
174.1(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
174.2with a resident under which the resident, for a commission or other consideration, directly
174.3or indirectly refers potential customers, whether by a link on an Internet Web site, or
174.4otherwise, to the seller. This paragraph only applies if the total gross receipts from
174.5sales to customers located in the state who were referred to the retailer by all residents
174.6with this type of agreement with the retailer is at least $10,000 in the 12-month period
174.7ending on the last day of the most recent calendar quarter before the calendar quarter in
174.8which the sale is made.
174.9(c) The presumption under paragraph (b) may be rebutted by proof that the resident
174.10with whom the seller has an agreement did not engage in any solicitation in the state
174.11on behalf of the retailer that would satisfy the nexus requirement of the United States
174.12Constitution during the 12-month period in question. Nothing in this section shall be
174.13construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
174.14representative for purposes of subdivision 1, paragraph (a).
174.15(d) For purposes of this paragraph, "resident" includes an individual who is a
174.16resident of this state, as defined in section 290.01, or a business that owns tangible
174.17personal property located in this state or has one or more employees providing services
174.18for it in this state.
174.19EFFECTIVE DATE.This section is effective for sales and purchases made after
174.20June 30, 2009.

174.21    Sec. 28. Minnesota Statutes 2008, section 297A.67, subdivision 15, is amended to read:
174.22    Subd. 15. Residential heating fuels. Residential heating fuels are exempt as
174.23follows:
174.24(1) all fuel oil, coal, wood, steam, hot water, propane gas, and L.P. gas sold to
174.25residential customers for residential use;
174.26(2) for the period encompassing the billing months of November, December,
174.27January, February, March, and April, the first 750 hundred cubic feet per dwelling unit of
174.28natural gas sold for residential use to customers who are metered and billed as residential
174.29users and who use natural gas for their primary source of residential heat; and
174.30(3) for the period encompassing the billing months of November, December,
174.31January, February, March, and April, the first 3,000 kilowatt-hours per dwelling unit of
174.32electricity sold for residential use to customers who are metered and billed as residential
174.33users and who use electricity for their primary source of residential heat.
174.34EFFECTIVE DATE.This section is effective for sales and purchases made after
174.35June 30, 2009.

175.1    Sec. 29. Minnesota Statutes 2008, section 297A.67, subdivision 23, is amended to read:
175.2    Subd. 23. Occasional sales. Isolated and occasional sales in Minnesota not made
175.3in the normal course of business of selling that kind of property or service are exempt.
175.4The storage, use, or consumption of property or services acquired as a result of such a
175.5sale is exempt. This exemption does not apply to sales of tangible personal property,
175.6specified digital products, or other digital products, primarily used in a trade or business,
175.7a snowmobile or all-terrain vehicle licensed under chapter 84, or to watercraft licensed
175.8under chapter 86B.
175.9EFFECTIVE DATE.This section is effective for sales and purchases made after
175.10June 30, 2009.

175.11    Sec. 30. Minnesota Statutes 2008, section 297A.815, subdivision 3, is amended to read:
175.12    Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this
175.13subdivision, "net revenue revenues" means an amount equal to:
175.14    (1) the revenues, including interest and penalties, collected under this section, during
175.15the fiscal year; less.
175.16    (2) the estimated reduction in individual income tax receipts and the estimated
175.17amount of refunds paid out under section 290.06, subdivision 34, for the fiscal year.
175.18    (b) On or before June 30 of each fiscal year, the commissioner of revenue shall
175.19estimate the amount of the revenues and subtraction under paragraph (a) for the current
175.20fiscal year.
175.21    (c) On or after July 1 of the subsequent fiscal year, the commissioner of finance shall
175.22transfer the net revenue as estimated in paragraph (b) from the general fund, as follows:
175.23(b) The commissioner of revenue shall estimate the revenues for each fiscal year and
175.24transfer one-quarter of the estimated amount from the general fund on January 1, April 1,
175.25July 1, and October 1, allocated as follows:
175.26    (1) 50 percent to the greater Minnesota transit account; and
175.27    (2) 50 percent to the county state-aid highway fund. Notwithstanding any other law
175.28to the contrary, the commissioner of transportation shall allocate the funds transferred
175.29under this clause to the counties in the metropolitan area, as defined in section 473.121,
175.30subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall
175.31receive of such amount the percentage that its population, as defined in section 477A.011,
175.32subdivision 3, estimated or established by July 15 of the year prior to the current calendar
175.33year, bears to the total population of the counties receiving funds under this clause.
175.34    (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1),
175.35revenues must be calculated using the following percentages of the total revenues:
176.1    (1) for fiscal year 2010, 83.75 percent; and
176.2    (2) for fiscal year 2011, 93.75 percent.

176.3    Sec. 31. Minnesota Statutes 2008, section 297A.83, subdivision 3, is amended to read:
176.4    Subd. 3. Commissioner's discretion. (a) The commissioner may decline to issue a
176.5permit to a retailer not maintaining a place of business in this state, or may cancel a permit
176.6previously issued to the retailer, if the commissioner believes that the tax can be collected
176.7more effectively from the persons using the property in this state. A refusal to issue or
176.8cancellation of a permit on such grounds does not affect the retailer's right to make retail
176.9sales from outside this state to destinations within this state.
176.10(b) If the commissioner considers it necessary for the efficient administration of the
176.11tax to regard a salesperson, representative, trucker, peddler, or canvasser as the agent of
176.12the dealer, distributor, supervisor, employer, or other person under whom that person
176.13operates or from whom the person obtains the tangible personal property, specified digital
176.14products, or other digital products, sold, whether making sales personally or in behalf of
176.15that dealer, distributor, supervisor, employer, or other person, the commissioner may
176.16regard the salesperson, representative, trucker, peddler, or canvasser as such agent, and
176.17may regard the dealer, distributor, supervisor, employer, or other person as a retailer for
176.18the purposes of collecting the tax.
176.19EFFECTIVE DATE.This section is effective for sales and purchases made after
176.20June 30, 2009.

176.21    Sec. 32. Minnesota Statutes 2008, section 297A.94, is amended to read:
176.22297A.94 DEPOSIT OF REVENUES.
176.23(a) Except as provided in this section, the commissioner shall deposit the revenues,
176.24including interest and penalties, derived from the taxes imposed by this chapter in the state
176.25treasury and credit them to the general fund.
176.26(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
176.27account in the special revenue fund if:
176.28(1) the taxes are derived from sales and use of property and services purchased for
176.29the construction and operation of an agricultural resource project; and
176.30(2) the purchase was made on or after the date on which a conditional commitment
176.31was made for a loan guaranty for the project under section 41A.04, subdivision 3.
176.32The commissioner of finance shall certify to the commissioner the date on which the
176.33project received the conditional commitment. The amount deposited in the loan guaranty
177.1account must be reduced by any refunds and by the costs incurred by the Department of
177.2Revenue to administer and enforce the assessment and collection of the taxes.
177.3(c) The commissioner shall deposit the revenues, including interest and penalties,
177.4derived from the taxes imposed on sales and purchases included in section 297A.61,
177.5subdivision 3 , paragraph (g), clauses (1) and (4), in the state treasury, and credit them
177.6as follows:
177.7(1) first to the general obligation special tax bond debt service account in each fiscal
177.8year the amount required by section 16A.661, subdivision 3, paragraph (b); and
177.9(2) after the requirements of clause (1) have been met, the balance to the general
177.10fund.
177.11(d) The commissioner shall deposit the revenues, including interest and penalties,
177.12collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
177.13general fund. By July 15 of each year the commissioner shall transfer to the highway user
177.14tax distribution fund an amount equal to the excess fees collected under section 297A.64,
177.15subdivision 5 , for the previous calendar year.
177.16(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
177.17for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and
177.18penalties, transmitted to the commissioner under section 297A.65, must be deposited by
177.19the commissioner in the state treasury as follows:
177.20(1) 50 percent of the receipts must be deposited in the heritage enhancement account
177.21in the game and fish fund, and may be spent only on activities that improve, enhance, or
177.22protect fish and wildlife resources, including conservation, restoration, and enhancement
177.23of land, water, and other natural resources of the state;
177.24(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
177.25may be spent only for state parks and trails;
177.26(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
177.27may be spent only on metropolitan park and trail grants;
177.28(4) three percent of the receipts must be deposited in the natural resources fund, and
177.29may be spent only on local trail grants; and
177.30(5) two percent of the receipts must be deposited in the natural resources fund,
177.31and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
177.32Conservatory, and the Duluth Zoo.
177.33(f) The revenue dedicated under paragraph (e) may not be used as a substitute
177.34for traditional sources of funding for the purposes specified, but the dedicated revenue
177.35shall supplement traditional sources of funding for those purposes. Land acquired with
177.36money deposited in the game and fish fund under paragraph (e) must be open to public
178.1hunting and fishing during the open season, except that in aquatic management areas or
178.2on lands where angling easements have been acquired, fishing may be prohibited during
178.3certain times of the year and hunting may be prohibited. At least 87 percent of the money
178.4deposited in the game and fish fund for improvement, enhancement, or protection of fish
178.5and wildlife resources under paragraph (e) must be allocated for field operations.
178.6(g) The revenues deposited under paragraphs (a) to (f) do not include the revenues,
178.7including interest and penalties, generated by the sales tax imposed under section
178.8297A.62, subdivision 1a, which must be deposited as provided under the Minnesota
178.9Constitution, article XI, section 15.
178.10EFFECTIVE DATE.This section is effective the day following final enactment.

178.11    Sec. 33. Minnesota Statutes 2008, section 297A.99, subdivision 6, is amended to read:
178.12    Subd. 6. Use tax. A compensating use tax applies, at the same rate as the sales tax,
178.13on the use, storage, distribution, or consumption of tangible personal property, specified
178.14digital products, other digital products, or taxable services.
178.15EFFECTIVE DATE.This section is effective for sales and purchases made after
178.16June 30, 2009.

178.17    Sec. 34. Minnesota Statutes 2008, section 297B.02, subdivision 1, is amended to read:
178.18    Subdivision 1. Rate. There is imposed an excise tax at the rate provided in chapter
178.19297A of 6.5 percent on the purchase price of any motor vehicle purchased or acquired,
178.20either in or outside of the state of Minnesota, which is required to be registered under
178.21the laws of this state.
178.22The excise tax is also imposed on the purchase price of motor vehicles purchased
178.23or acquired on Indian reservations when the tribal council has entered into a sales tax on
178.24motor vehicles refund agreement with the state of Minnesota.
178.25EFFECTIVE DATE.This section is effective for sales and purchases made after
178.26June 30, 2009.

178.27    Sec. 35. [471.691] TEMPORARY AUTHORITY TO USE LODGING TAX
178.28REVENUES.
178.29(a) A city may use or spend the proceeds of a tax or fee on lodging for any permitted
178.30municipal purpose, but only if the lodging is provided at a facility located within
178.31boundaries of the city. For purposes of this section, "lodging" means the furnishing for
178.32consideration of lodging at a hotel, motel, rooming house, tourist court, or resort, other
178.33than the renting or leasing of lodging for a continuous period of 30 days or more.
179.1(b) This section preempts the provisions of section 469.190, subdivision 3, or any
179.2other law, including special laws, ordinances, and charter provisions, that dedicate or limit
179.3the purposes for which the proceeds or revenues derived from a tax or fee imposed on
179.4lodging may be used or spent. It does not apply to:
179.5(1) lodging tax proceeds that are pledged to pay bonds or other debt; or
179.6(2) any of the proceeds of a general sales or use tax.
179.7(c) This section expires on December 31, 2012.
179.8EFFECTIVE DATE.This section is effective the day following final enactment.

179.9    Sec. 36. Laws 1986, chapter 400, section 44, as amended by Laws 1995, chapter 264,
179.10article 2, section 39, is amended to read:
179.11    Sec. 44. DOWNTOWN TAXING AREA.
179.12    If a bill is enacted into law in the 1986 legislative session which authorizes the city
179.13of Minneapolis to issue bonds and expend certain funds including taxes to finance the
179.14acquisition and betterment of a convention center and related facilities, which authorizes
179.15certain taxes to be levied in a downtown taxing area, then, notwithstanding the provisions
179.16of that law "downtown taxing area" shall mean the geographic area bounded by the
179.17portion of the Mississippi River between I-35W and Washington Avenue, the portion
179.18of Washington Avenue between the river and I-35W, the portion of I-35W between
179.19Washington Avenue and 8th Street South, the portion of 8th Street South between I-35W
179.20and Portland Avenue South, the portion of Portland Avenue South between 8th Street
179.21South and I-94, the portion of I-94 from the intersection of Portland Avenue South to
179.22the intersection of I-94 and the Burlington Northern Railroad tracks, the portion of the
179.23Burlington Northern Railroad tracks from I-94 to Main Street and including Nicollet
179.24Island, and the portion of Main Street to Hennepin Avenue and the portion of Hennepin
179.25Avenue between Main Street and 2nd Street S.E., and the portion of 2nd Street S.E.
179.26between Main Street and Bank Street, and the portion of Bank Street between 2nd Street
179.27S.E. and University Avenue S.E., and the portion of University Avenue S.E. between Bank
179.28Street and I-35W, and by I-35W from University Avenue S.E., to the river. The downtown
179.29taxing area excludes the area bounded on the south and west by Oak Grove Street, on the
179.30east by Spruce Place, and on the north by West 15th Street. The downtown taxing area
179.31also excludes any property located in a zoned area that is contained in chapter 546 of the
179.32Minneapolis zone code of ordinances on which a restaurant or liquor establishment is
179.33operated.
179.34EFFECTIVE DATE.This section is effective for sales made after July 31, 2012,
179.35provided that the proceeds of the tax collected between July 1, 2009, and July 31, 2012,
180.1by a restaurant or liquor establishment that is excluded from the downtown taxing area
180.2by this section, when collected by the commissioner of revenue, shall be deposited in the
180.3general fund of the state treasury.

180.4    Sec. 37. Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended
180.5by Laws 1998, chapter 389, article 8, section 28, and Laws 2008, chapter 366, article
180.67, section 9, is amended to read:
180.7    Subd. 3. Use of revenues. Revenues received from taxes authorized by subdivisions
180.81 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or
180.9a portion of the expenses of constructing and improving facilities as part of an urban
180.10revitalization project in downtown Mankato known as Riverfront 2000. Authorized
180.11expenses include, but are not limited to, acquiring property and paying relocation expenses
180.12related to the development of Riverfront 2000 and related facilities, and securing or paying
180.13debt service on bonds or other obligations issued to finance the construction of Riverfront
180.142000 and related facilities. For purposes of this section, "Riverfront 2000 and related
180.15facilities" means a civic-convention center, an arena, a riverfront park, a technology center
180.16and related educational facilities, and all publicly owned real or personal property that
180.17the governing body of the city determines will be necessary to facilitate the use of these
180.18facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and
180.19landscaping. It also includes the performing arts theatre and the Southern Minnesota
180.20Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by
180.21Minnesota State University, Mankato.
180.22EFFECTIVE DATE.This section is effective the day after the governing body of
180.23the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
180.24645.021, subdivisions 2 and 3.

180.25    Sec. 38. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
180.26Laws 1997, chapter 231, article 7, section 40, and Laws 1998, chapter 389, article 8,
180.27section 30, and Laws 2003, First Special Session chapter 21, article 8, section 13, and
180.28Laws 2005, First Special Session chapter 3, article 5, section 26, is amended to read:
180.29    Subd. 2. Use of revenues. Revenues received from the tax authorized by
180.30subdivision 1 may only be used by the city to pay the cost of collecting the tax, and to pay
180.31for the following projects or to secure or pay any principal, premium, or interest on bonds
180.32issued in accordance with subdivision 3 for the following projects.
180.33    (a) To pay all or a portion of the capital expenses of construction, equipment and
180.34acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
181.1including the demolition of the existing arena and the construction and equipping of a
181.2new arena.
181.3    (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
181.4spent for:
181.5    (1) capital projects to further residential, cultural, commercial, and economic
181.6development in both downtown St. Paul and St. Paul neighborhoods; and
181.7    (2) capital and operating expenses of cultural organizations in the city, provided
181.8that the amount spent under this clause must equal ten percent of the total amount spent
181.9under this paragraph in any year.
181.10    (c) The amount apportioned under paragraph (b) shall be no less than 60 percent
181.11of the revenues derived from the tax each year, except to the extent that a portion of that
181.12amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a)
181.13prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1,
181.141998, but only if the city council determines that 40 percent of the revenues derived from
181.15the tax together with other revenues pledged to the payment of the bonds, including the
181.16proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
181.17    (d) If in any year more than 40 percent of the revenue derived from the tax authorized
181.18by subdivision 1 is used to pay debt service on the bonds issued for the purposes of
181.19paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment
181.20that exceeds 40 percent of the revenue must be determined for that year. In any year when
181.2140 percent of the revenue produced by the sales tax exceeds the amount required to pay
181.22debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the
181.23amount of the excess must be made available for capital projects to further residential,
181.24cultural, commercial, and economic development in the neighborhoods and downtown
181.25until the cumulative amounts determined for all years under the preceding sentence have
181.26been made available under this sentence. The amount made available as reimbursement in
181.27the preceding sentence is not included in the 60 percent determined under paragraph (c).
181.28    (e) In each of calendar years 2006, 2007, 2008, and 2009 to 2014, revenue not to
181.29exceed $3,500,000 may be used to pay the principal of bonds issued for capital projects of
181.30the city. After December 31, 2009 2014, revenue from the tax imposed under subdivision
181.311 may not be used for this purpose.
181.32    (f) By January 15 of each year, the mayor and the city council must report to the
181.33legislature on the use of sales tax revenues during the preceding one-year period.
181.34EFFECTIVE DATE.This section is effective the day after the governing body of
181.35the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section
181.36645.021, subdivisions 2 and 3.

182.1    Sec. 39. Laws 1993, chapter 375, article 9, section 46, is amended by adding a
182.2subdivision to read:
182.3    Subd. 2a. Unexpended funds and interest. Any interest from loan repayments
182.4or returned funds from revenues apportioned under subdivision 2, paragraph (b), clause
182.5(1), must be made available only for projects qualifying under subdivision 2, paragraph
182.6(b), clause (1).
182.7EFFECTIVE DATE.This section is effective the day after the governing body of
182.8the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section
182.9645.021, subdivisions 2 and 3.

182.10    Sec. 40. Laws 1996, chapter 471, article 2, section 30, is amended to read:
182.11    Sec. 30. CITY OF LITTLE FALLS; TAX AUTHORIZED.
182.12    Subdivision 1. Sales of food; tax. The city of Little Falls may by ordinance impose
182.13a tax of one-half percent on the gross receipts from the retail sale of food and nonalcoholic
182.14beverages sold by the operator of a restaurant or place of refreshment within the city. The
182.15tax imposed may be effective at any time after July 1, 1996.
182.16    Subd. 1a. Sale of alcoholic beverages. The city of Little Falls may also by
182.17ordinance impose the tax in subdivision 1 on the sales of alcoholic beverages sold by the
182.18operator of a restaurant or place of refreshment in the city. Notwithstanding subdivision
182.195, and regardless of when the city imposes the tax under this subdivision, this tax will
182.20expire when the tax in subdivision 1 expires.
182.21    Subd. 2. Definitions. For purposes of this section:
182.22    (1) "restaurant" means every building or other structure or enclosure, or any part
182.23thereof and all buildings in connection, kept, used or maintained as, or held out to the
182.24public to be an enclosure where meals or lunches are served or prepared for service
182.25elsewhere, except schools;
182.26    (2) "place of refreshment" means every building, structure, vehicle, sidewalk cart or
182.27any part thereof, used as, maintained as, or advertised as, or held out to be a place where
182.28confectionery, ice cream, or drinks of various kinds are made, sold, or served at retail,
182.29excepting schools and school sponsored events; and
182.30    (3) "operator" means the person who is the proprietor of the restaurant, or place of
182.31refreshment, whether in the capacity of owner, lessee, subleases, licensee, or an other
182.32capacity.
182.33    Subd. 3. Use of proceeds. The ordinance adopted by the city shall provide for
182.34distribution of the proceeds of the tax. The proceeds of the tax must be used for tourism
183.1purposes, including operating and maintaining the activities and programs of the tourism
183.2and convention bureau.
183.3    Subd. 4. Enforcement, collection, and administration of taxes. The tax imposed
183.4under this section shall be enforced, administered, and collected by the city of Little Falls
183.5provided that the city may contract with the commissioner of revenue to perform audits of
183.6the tax on behalf of the city. The commissioner shall charge the city an amount that equals
183.7the direct and indirect costs incurred by the department that are necessary to audit the tax.
183.8    Subd. 5. Expiration of taxing authority. The tax imposed under this section shall
183.9expire 15 subdivision 1 expires 30 years after it first becomes effective.
183.10    Subd. 6. Effective date. This section is effective the day following compliance by
183.11the governing body of the city of Little Falls with Minnesota Statutes, section 645.021,
183.12subdivision 3 .
183.13EFFECTIVE DATE.This section is effective the day following compliance by
183.14the governing body of the city of Little Falls with Minnesota Statutes, section 645.021,
183.15subdivisions 2 and 3.

183.16    Sec. 41. Laws 1998, chapter 389, article 8, section 37, subdivision 1, is amended to
183.17read:
183.18    Subdivision 1. Requirement. Expenditures of revenues from the sales tax imposed
183.19by the city of St. Paul that are dedicated to neighborhood investments may be made only
183.20after review of the proposals for expenditures by the citizen review panel described in this
183.21section. The panel must ensure that the application process for all proposals is open, fair,
183.22and competitive. All proposals must be reviewed by the panel prior to presentation of the
183.23proposal to the city council. The panel must evaluate the proposals and provide a report
183.24to the city council that makes recommendations regarding the proposed expenditures
183.25in rank order.
183.26EFFECTIVE DATE.This section is effective the day after the governing body of
183.27the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section
183.28645.021, subdivisions 2 and 3.

183.29    Sec. 42. Laws 2002, chapter 377, article 3, section 25, is amended to read:
183.30    Sec. 25. ROCHESTER LODGING TAX.
183.31    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
183.32469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
183.33tax of one percent on the gross receipts from the furnishing for consideration of lodging at
184.1a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
184.2for a continuous period of 30 days or more.
184.3    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190 or
184.4477A.016, or any other law, and in addition to the tax authorized by subdivision 1, the city
184.5of Rochester may impose an additional tax of one percent on the gross receipts from the
184.6furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
184.7resort, other than the renting or leasing of it for a continuous period of 30 days or more
184.8only upon (1) enactment of a law appropriating state money for construction costs of
184.9renovating, improving, or expanding the Mayo Civic Center Complex; and (2) approval of
184.10the city governing body of a total financial package for the project.
184.11    Subd. 2. Disposition of proceeds. (a) The gross proceeds from any the tax imposed
184.12under subdivision 1 must be used by the city to fund a local convention or tourism bureau
184.13for the purpose of marketing and promoting the city as a tourist or convention center.
184.14(b) The gross proceeds from the one percent tax imposed under subdivision 1a
184.15may be used to pay for (1) construction, renovation, improvement, and expansion of the
184.16Mayo Civic Center and related skyway access, lighting, parking, or landscaping; and (2)
184.17for payment of any principal, interest, or premium on bonds issued to finance the Mayo
184.18Civic Center Complex.
184.19    Subd. 3. Expiration of taxing authority. The authority of the city to impose a
184.20tax under subdivision 1a shall expire when the principal and interest on any bonds or
184.21other obligations issued to finance the Mayo Civic Center Complex and related skyway
184.22access, lighting, parking, or landscaping have been paid or at an earlier time as the city
184.23shall, by ordinance, determine.
184.24EFFECTIVE DATE.This section is effective the day after the governing body of
184.25the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
184.26645.021, subdivisions 2 and 3.

184.27    Sec. 43. Laws 2006, chapter 259, article 3, section 12, subdivision 3, is amended to
184.28read:
184.29    Subd. 3. Use of revenues. Revenues received from the taxes authorized by
184.30subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation
184.31projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota
184.32Department of Transportation, Steele County, and the city of Owatonna; regional parks
184.33and trail developments; and the West Hills complex, including the firehall, and library
184.34improvement projects; as described in the city resolution No. 4-06, Exhibit A, as adopted
184.35by the city on January 17, 2006. Notwithstanding the specific transportation projects
185.1described in city resolution No. 4-06, Exhibit A, the city may transfer up to $1,500,000
185.2of the sales and use tax revenues from the Alexander Street to 39th Avenue Southwest
185.3project to the reconstruction of 18th Street Southwest from 24th Avenue Southwest to 39th
185.4Avenue West. The amount paid from these revenues for transportation projects may not
185.5exceed $4,450,000 plus associated bond costs. The amount paid from these revenues for
185.6park and trail projects may not exceed $5,400,000 plus associated bond costs. The amount
185.7paid from these revenues for West Hills complex, fire hall, and library improvement
185.8projects may not exceed $2,823,000 plus associated bond costs.
185.9EFFECTIVE DATE.This section is effective the day after compliance by the
185.10governing body of the city of Owatonna with Minnesota Statutes, section 645.021,
185.11subdivision 3.

185.12    Sec. 44. Laws 2008, chapter 366, article 7, section 16, subdivision 3, is amended to
185.13read:
185.14    Subd. 3. Use of proceeds from authorized taxes. The proceeds of any tax imposed
185.15under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses
185.16of operation and maintenance of the Riverfront 2000 and related facilities, including a
185.17performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center,
185.18attached to the Mankato Civic Center for use by Minnesota State University, Mankato.
185.19Authorized expenses include securing or paying debt service on bonds or other obligations
185.20issued to finance the construction of the facilities.
185.21EFFECTIVE DATE.This section is effective the day after the governing body of
185.22the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
185.23645.021, subdivisions 2 and 3.

185.24    Sec. 45. SALES AND LOCAL LODGING TAXES COLLECTION;
185.25DEPARTMENT OF REVENUE.
185.26(a) The Department of Revenue shall collect from an online travel company, by all
185.27available means authorized by law for the collection of taxes, the amount of sales and
185.28local lodging taxes uncollected by an online travel company and owed to a city and the
185.29state, plus interest and penalties, on the total rent paid for lodging in a hotel, rooming
185.30house, tourist court, motel, or trailer camp, or for the granting of any similar license
185.31to use real property.
185.32(b) For purposes of this section, the following terms have the meanings given:
185.33(1) "online travel company" means a person who offers information on the Internet
185.34about the availability of accommodations to a customer, arranges for the customer's
186.1occupancy of the accommodations, and collects the rental payments from the customer for
186.2occupancy of the accommodations;
186.3(2) "total rent paid" means the cost of lodging;
186.4(3) "unpaid amount of sales and local lodging taxes" means the state sales tax rate as
186.5defined in Minnesota Statutes, section 297A.62, subdivision 1, plus the applicable local
186.6lodging tax rate as applied against the total rent paid by a customer to an online travel
186.7company less the amount of sales and local lodging taxes collected by the online travel
186.8company and remitted to a lodging entity at the time the online travel company purchased
186.9the right to make reservations on behalf of a customer to rent a lodging accommodation.
186.10(c) A city that imposes a local lodging tax must make a request to the Department of
186.11Revenue for action to be taken under this section.
186.12(d) The commissioner of revenue may request the attorney general to conduct legal
186.13proceedings, if necessary, on behalf of the state to enforce the provisions of this section.
186.14EFFECTIVE DATE.This section is effective the day following final enactment.

186.15    Sec. 46. ROCHESTER FOOD AND BEVERAGE TAX.
186.16    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
186.17477A.016, or any other law or charter provision, the city of Rochester may impose a tax of
186.18one percent on the gross receipts on all sales of food and beverages by restaurants and
186.19places of refreshment, as defined by resolution of the city, that occur in the city. For
186.20purposes of this section, "food and beverages" include retail on-sale of intoxicating liquor
186.21and fermented malt beverages.
186.22    Subd. 2. Use of proceeds. The proceeds of this tax shall be used for (1) paying the
186.23cost of collection; (2) to pay for construction, renovation, improvement, and expansion
186.24of the Mayo Civic Center Complex and related skyway access, lighting, parking, or
186.25landscaping; and (3) for payment of any principal, interest, or premium on bonds issued to
186.26finance the Mayo Civic Center Complex.
186.27    Subd. 3. Imposition of the tax. The tax under this section may only be imposed
186.28upon (1) enactment of a law appropriating state money for construction costs of
186.29renovating, improving, or expanding the Mayo Civic Center Complex; and (2) approval of
186.30the city governing body of a total financing package for the project.
186.31    Subd. 4. Expiration of taxing authority. The authority granted under subdivision
186.321 to the city to impose a one percent tax on food and beverages shall expire when the
186.33principal and interest on any bonds or other obligations issued to finance the Mayo Civic
186.34Center Complex and related skyway access, lighting, parking, or landscaping have been
186.35paid or at an earlier time as the city shall, by ordinance, determine.
187.1EFFECTIVE DATE.This section is effective the day after the governing body of
187.2the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
187.3645.021, subdivisions 2 and 3, and upon approval of the city governing body of a total
187.4financing package to renovate, improve, or expand the Mayo Civic Center Complex.

187.5    Sec. 47. REPEALER.
187.6Minnesota Statutes 2008, section 297A.61, subdivision 45, is repealed.
187.7EFFECTIVE DATE.This section is effective for sales and purchases made after
187.8June 30, 2009.


187.11    Section 1. Minnesota Statutes 2008, section 469.174, subdivision 22, is amended to
187.12read:
187.13    Subd. 22. Tourism facility. "Tourism facility" means property that:
187.14(1) is located in a county where the median income is no more than 85 percent of
187.15the state median income;
187.16(2) is located in a county in development region 2, 3, 4, or 5, or 7E, as defined
187.17in section 462.385;
187.18(3) is not located in a city with a population in excess of 20,000; and
187.19(4) is acquired, constructed, or rehabilitated for use as a convention and meeting
187.20facility that is privately owned, marina, hotel, motel, lodging facility, or nonhomestead
187.21dwelling unit that in each case is intended to serve primarily individuals from outside
187.22the county.
187.23EFFECTIVE DATE.This section is effective for requests for certification made
187.24after June 30, 2009.

187.25    Sec. 2. Minnesota Statutes 2008, section 469.175, subdivision 1, is amended to read:
187.26    Subdivision 1. Tax increment financing plan. (a) A tax increment financing plan
187.27shall contain:
187.28    (1) a statement of objectives of an authority for the improvement of a project;
187.29    (2) a statement as to the development program for the project, including the property
187.30within the project, if any, that the authority intends to acquire, identified by parcel number,
187.31identifiable property name, block, or other appropriate means indicating the area in which
187.32the authority intends to acquire properties;
188.1    (3) a list of any development activities that the plan proposes to take place within
188.2the project, for which contracts have been entered into at the time of the preparation of
188.3the plan, including the names of the parties to the contract, the activity governed by the
188.4contract, the estimated cost stated in the contract, and the expected date of completion
188.5of that activity;
188.6    (4) identification or description of the type of any other specific development
188.7reasonably expected to take place within the project district, and the date when the
188.8development is likely to occur;
188.9    (5) estimates of the following:
188.10    (i) cost of the project, including administrative expenses, except that if part of the
188.11cost of the project is paid or financed with increment from the tax increment financing
188.12district, the tax increment financing plan for the district must contain an estimate of the
188.13amount of the cost of the project, including administrative expenses, and interest costs
188.14that will be paid or financed with tax increments from the district, but not to exceed the
188.15estimated tax increment generated by the development activity;
188.16    (ii) amount of bonded indebtedness to be incurred bonds to be issued;
188.17    (iii) sources of revenue to finance or otherwise pay public costs;
188.18    (iv) the most recent original net tax capacity of taxable real property within the tax
188.19increment financing district and within any subdistrict;
188.20    (v) (iv) the estimated captured net tax capacity of the tax increment financing district
188.21at completion; and
188.22    (vi) (v) the duration of the tax increment financing district's and any subdistrict's
188.23existence;
188.24    (6) statements of the authority's alternate estimates of the impact of tax increment
188.25financing on the net tax capacities of all taxing jurisdictions in which the tax increment
188.26financing district is located in whole or in part. For purposes of one statement, the
188.27authority shall assume that the estimated captured net tax capacity would be available to
188.28the taxing jurisdictions without creation of the district, and for purposes of the second
188.29statement, the authority shall assume that none of the estimated captured net tax capacity
188.30would be available to the taxing jurisdictions without creation of the district or subdistrict;
188.31    (7) identification and description of studies and analyses used to make the
188.32determination set forth in subdivision 3, clause (2); and
188.33    (8) identification of all parcels to be included in the district or any subdistrict.
188.34    (b) The authority may specify in the tax increment financing plan the first year in
188.35which it elects to receive increment, up to four years following the year of approval of the
188.36district. This paragraph does not apply to an economic development district.
189.1EFFECTIVE DATE.This section is effective for tax increment financing plans
189.2approved after June 30, 2009.

189.3    Sec. 3. Minnesota Statutes 2008, section 469.175, subdivision 6, is amended to read:
189.4    Subd. 6. Annual financial reporting. (a) The state auditor shall develop a uniform
189.5system of accounting and financial reporting for tax increment financing districts. The
189.6system of accounting and financial reporting shall, as nearly as possible:
189.7(1) provide for full disclosure of the sources and uses of public funds in tax
189.8increments of the district;
189.9(2) permit comparison and reconciliation with the affected local government's
189.10accounts and financial reports;
189.11(3) permit auditing of the funds expended on behalf of a district, including a single
189.12district that is part of a multidistrict project or that is funded in part or whole through
189.13the use of a development account funded with tax increments from other districts or
189.14with other public money;
189.15(4) be consistent with generally accepted accounting principles.
189.16(b) The authority must annually submit to the state auditor a financial report
189.17in compliance with paragraph (a). Copies of the report must also be provided to the
189.18county auditor and to the governing body of the municipality, if the authority is not
189.19the municipality. To the extent necessary to permit compliance with the requirement
189.20of financial reporting, the county and any other appropriate local government unit or
189.21private entity must provide the necessary records or information to the authority or the
189.22state auditor as provided by the system of accounting and financial reporting developed
189.23pursuant to paragraph (a). The authority must submit the annual report for a year on or
189.24before August 1 of the next year.
189.25(c) The annual financial report must also include the following items:
189.26(1) the original net tax capacity of the district and any subdistrict under section
189.27469.177, subdivision 1 ;
189.28(2) the net tax capacity for the reporting period of the district and any subdistrict;
189.29(3) the captured net tax capacity of the district;
189.30(4) any fiscal disparity deduction from the captured net tax capacity under section
189.31469.177, subdivision 3 ;
189.32(5) the captured net tax capacity retained for tax increment financing under section
189.33469.177, subdivision 2 , paragraph (a), clause (1);
189.34(6) any captured net tax capacity distributed among affected taxing districts under
189.35section 469.177, subdivision 2, paragraph (a), clause (2);
190.1(7) the type of district;
190.2(8) the date the municipality approved the tax increment financing plan and the
190.3date of approval of any modification of the tax increment financing plan, the approval of
190.4which requires notice, discussion, a public hearing, and findings under subdivision 4,
190.5paragraph (a);
190.6(9) the date the authority first requested certification of the original net tax capacity
190.7of the district and the date of the request for certification regarding any parcel added
190.8to the district;
190.9(10) the date the county auditor first certified the original net tax capacity of the
190.10district and the date of certification of the original net tax capacity of any parcel added
190.11to the district;
190.12(11) the month and year in which the authority has received or anticipates it will
190.13receive the first increment from the district;
190.14(12) the date the district must be decertified;
190.15(13) for the reporting period and prior years of the district, the actual amount
190.16received from, at least, the following categories:
190.17(i) tax increments paid by the captured net tax capacity retained for tax increment
190.18financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding
190.19any excess taxes;
190.20(ii) tax increments that are interest or other investment earnings on or from tax
190.21increments;
190.22(iii) tax increments that are proceeds from the sale or lease of property, tangible or
190.23intangible, purchased by the authority with tax increments;
190.24(iv) tax increments that are repayments of loans or other advances made by the
190.25authority with tax increments;
190.26(v) bond or loan proceeds; and
190.27(vi) special assessments;
190.28(vii) grants;
190.29(viii) transfers from funds not exclusively associated with the district; and
190.30(ix) (vi) the market value homestead credit paid to the authority under section
190.31273.1384 ;
190.32(14) for the reporting period and for the prior years of the district, the actual amount
190.33expended for, at least, the following categories:
190.34(i) acquisition of land and buildings through condemnation or purchase;
190.35(ii) site improvements or preparation costs;
191.1(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or
191.2other similar public improvements;
191.3(iv) administrative costs, including the allocated cost of the authority; and
191.4(v) public park facilities, facilities for social, recreational, or conference purposes, or
191.5other similar public improvements; and for housing districts, construction of affordable
191.6housing;
191.7(vi) transfers to funds not exclusively associated with the district;
191.8(15) the amount of any payments for activities and improvements located outside of
191.9the district that are paid for or financed with tax increments;
191.10(16) the amount of payments of principal and interest that are made during the
191.11reporting period on any nondefeased:
191.12(i) general obligation tax increment financing bonds; and
191.13(ii) other tax increment financing bonds, including pay-as-you-go contracts and
191.14notes; and
191.15(iii) notes and pay-as-you-go contracts;
191.16(17) the principal amount, at the end of the reporting period, of any nondefeased:
191.17(i) general obligation tax increment financing bonds; and
191.18(ii) other tax increment financing bonds, including pay-as-you-go contracts and
191.19notes; and
191.20(iii) notes and pay-as-you-go contracts;
191.21(18) the amount of principal and interest payments that are due for the current
191.22calendar year on any nondefeased:
191.23(i) general obligation tax increment financing bonds; and
191.24(ii) other tax increment financing bonds, including pay-as-you-go contracts and
191.25notes; and
191.26(iii) notes and pay-as-you-go contracts;
191.27(19) if the fiscal disparities contribution under chapter 276A or 473F for the district
191.28is computed under section 469.177, subdivision 3, paragraph (a), the amount of total
191.29increased property taxes imposed on other properties in the municipality that approved the
191.30tax increment financing plan as a result of the fiscal disparities contribution; to be paid
191.31from outside the tax increment financing district; and
191.32(20) the estimate, if any, contained in the tax increment financing plan of the amount
191.33of the cost of the project, including administrative expenses, that will be paid or financed
191.34with tax increment; and
191.35(21) any additional information the state auditor may require.
192.1(d) The commissioner of revenue shall prescribe the method of calculating the
192.2increased property taxes under paragraph (c), clause (19), and the form of the statement
192.3disclosing this information on the annual statement under subdivision 5.
192.4(e) (d) The reporting requirements imposed by this subdivision apply to districts
192.5certified before, on, and after August 1, 1979.
192.6EFFECTIVE DATE.This section is effective for tax increment financing reports
192.7due after December 31, 2009.

192.8    Sec. 4. Minnesota Statutes 2008, section 469.176, subdivision 3, is amended to read:
192.9    Subd. 3. Limitation on administrative expenses.
192.10(a) For districts for which certification was requested before August 1, 1979, or after
192.11June 30, 1982 and before August 1, 2001, no tax increment shall be used to pay any
192.12administrative expenses for a project which exceed ten percent of the total estimated tax
192.13increment expenditures authorized by the tax increment financing plan or the total tax
192.14increment expenditures for the project, whichever is less.
192.15(b) For districts for which certification was requested after July 31, 1979, and before
192.16July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in
192.17Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the
192.18total tax increment expenditures authorized by the tax increment financing plan or the total
192.19estimated tax increment expenditures for the district, whichever is less.
192.20(c) For districts for which certification was requested after July 31, 2001, no tax
192.21increment may be used to pay any administrative expenses for a project which exceed
192.22ten percent of total estimated tax increment expenditures authorized by the tax increment
192.23financing plan or the total tax increments, as defined in section 469.174, subdivision 25,
192.24clause (1), from the district, whichever is less.
192.25(d) Increments used to pay the county's administrative expenses under subdivision
192.264h are not subject to the percentage limits in this subdivision.
192.27EFFECTIVE DATE.This section is effective for all districts, regardless of when
192.28the request for certification was made.

192.29    Sec. 5. Minnesota Statutes 2008, section 469.176, is amended by adding a subdivision
192.30to read:
192.31    Subd. 4m. Use to offset state aid reductions. (a) Notwithstanding any other
192.32provision of this section, section 469.1763, or a special law, upon the request of the
192.33municipality, the authority may elect, by resolution, to transfer increments from a district
192.34to the municipality for deposit in its general fund. The permitted transfer for a calendar
193.1year is limited to the amount allowed under paragraph (b). Following the election,
193.2expenditure of increments from the district are limited by the conditions in paragraph (c).
193.3The transferred increments may be expended for any purpose the municipality's general
193.4fund permits.
193.5(b) For each calendar year for which transfers are permitted under this section,
193.6the maximum transfer equals the lesser of:
193.7(1) the excess of the district's available increment over the sum of:
193.8(i) required payments of obligations that will come due during the calendar year or
193.9the first six months of the following calendar year on outstanding bonds and binding
193.10contracts to which the district's increments are pledged; plus
193.11(ii) transfers of increments from the district to offset deficits in other districts to be
193.12made during the calendar year under section 469.1763, subdivision 6; or
193.13(2) the sum of the following amounts, limited to the relevant amounts that are
193.14effective through the calendar year in which the transfer is to be made:
193.15(i) unallotment of aid payments previously certified by the state to be paid to the
193.16municipality during calendar years 2008 to 2010;
193.17(ii) reductions in state reimbursement payments for property tax credits to be paid
193.18to the municipality in calendar years 2008 to 2010; and
193.19(iii) reductions in local government aids to be paid to the municipality resulting from
193.20reductions in the appropriation or changes in the formula, enacted by the legislature, for
193.21calendar years 2009 to 2010; less
193.22(iv) any special levy made by the municipality under section 275.70, subdivision
193.235, clause (22).
193.24(c) Following an election under this subdivision, an authority may expend
193.25increments from the district for only the following purposes:
193.26(1) payment of bonds and binding contracts with an entity not under the control of
193.27the municipality or authority to which the district's increments were pledged that were
193.28outstanding when the election was made;
193.29(2) transfers to offset deficits in other districts as permitted under section 469.1763,
193.30subdivision 6;
193.31(3) administrative expenses of the district; and
193.32(4) transfers permitted under this subdivision.
193.33(d) The commissioner of revenue shall calculate and certify the amount, if any, of
193.34the reduction under paragraph (b), clause (2), item (iii), for a city, upon request of the city.
194.1(g) The authority to transfer increments under this section does not apply to a
194.2municipality, if the captured tax capacity of the municipality exceeds 12 percent of the
194.3municipality's total tax capacity for the taxes payable year in which the transfer is made.
194.4(f) The authority to transfer increments under this section expires on December
194.531, 2010.
194.6EFFECTIVE DATE.This section is effective the day following final enactment
194.7and applies to increments from any district, regardless of when the request for certification
194.8was made.

194.9    Sec. 6. Minnesota Statutes 2008, section 469.176, subdivision 6, is amended to read:
194.10    Subd. 6. Action required. (a) If, after four years from the date of certification of
194.11the original net tax capacity of the tax increment financing district pursuant to section
194.12469.177 , no demolition, rehabilitation, or renovation of property or other site preparation,
194.13including qualified improvement of a street adjacent to a parcel but not installation
194.14of utility service including sewer or water systems, has been commenced on a parcel
194.15located within a tax increment financing district by the authority or by the owner of the
194.16parcel in accordance with the tax increment financing plan, no additional tax increment
194.17may be taken from that parcel, and the original net tax capacity of that parcel shall be
194.18excluded from the original net tax capacity of the tax increment financing district. If the
194.19authority or the owner of the parcel subsequently commences demolition, rehabilitation,
194.20or renovation or other site preparation on that parcel including qualified improvement of
194.21a street adjacent to that parcel, in accordance with the tax increment financing plan, the
194.22authority shall certify to the county auditor that the activity has commenced, and the
194.23county auditor shall certify the net tax capacity thereof as most recently certified by the
194.24commissioner of revenue and add it to the original net tax capacity of the tax increment
194.25financing district. The county auditor must enforce the provisions of this subdivision. The
194.26authority must submit to the county auditor evidence that the required activity has taken
194.27place for each parcel in the district. The evidence for a parcel must be submitted by
194.28February 1 of the fifth year following the year in which the parcel was certified as included
194.29in the district. For purposes of this subdivision, qualified improvements of a street are
194.30limited to (1) construction or opening of a new street, (2) relocation of a street, and (3)
194.31substantial reconstruction or rebuilding of an existing street.
194.32(b) For districts which were certified on or after January 1, 2005, and before July 1,
194.332010, the four-year period under paragraph (a) is increased to six years.
194.34EFFECTIVE DATE.This section is effective for districts certified on or after
194.35January 1, 2005.

195.1    Sec. 7. Minnesota Statutes 2008, section 469.1763, subdivision 2, is amended to read:
195.2    Subd. 2. Expenditures outside district. (a) For each tax increment financing
195.3district, an amount equal to at least 75 percent of the total revenue derived from tax
195.4increments paid by properties in the district must be expended on activities in the district
195.5or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
195.6in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
195.7For districts, other than redevelopment districts for which the request for certification
195.8was made after June 30, 1995, the in-district percentage for purposes of the preceding
195.9sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
195.10increments paid by properties in the district may be expended, through a development fund
195.11or otherwise, on activities outside of the district but within the defined geographic area of
195.12the project except to pay, or secure payment of, debt service on credit enhanced bonds.
195.13For districts, other than redevelopment districts for which the request for certification was
195.14made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
195.1520 percent. The revenue derived from tax increments for the district that are expended on
195.16costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before
195.17calculating the percentages that must be expended within and without the district.
195.18    (b) In the case of a housing district, a housing project, as defined in section 469.174,
195.19subdivision 11 , is an activity in the district.
195.20    (c) All administrative expenses are for activities outside of the district, except that
195.21if the only expenses for activities outside of the district under this subdivision are for
195.22the purposes described in paragraph (d), administrative expenses will be considered as
195.23expenditures for activities in the district.
195.24    (d) The authority may elect, in the tax increment financing plan for the district,
195.25to increase by up to ten percentage points the permitted amount of expenditures for
195.26activities located outside the geographic area of the district under paragraph (a). As
195.27permitted by section 469.176, subdivision 4k, the expenditures, including the permitted
195.28expenditures under paragraph (a), need not be made within the geographic area of the
195.29project. Expenditures that meet the requirements of this paragraph are legally permitted
195.30expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
195.31To qualify for the increase under this paragraph, the expenditures must:
195.32    (1)(i) be used exclusively to assist housing that meets the requirement for a qualified
195.33low-income building, as that term is used in section 42 of the Internal Revenue Code;
195.34    (2) (ii) not exceed the qualified basis of the housing, as defined under section 42(c)
195.35of the Internal Revenue Code, less the amount of any credit allowed under section 42 of
195.36the Internal Revenue Code; and
196.1    (3) (iii) be used to:
196.2    (i) (A) acquire and prepare the site of the housing;
196.3    (ii) (B) acquire, construct, or rehabilitate the housing; or
196.4    (iii) (C) make public improvements directly related to the housing; or
196.5(2) be used to develop housing that does not exceed 150 percent of the average
196.6market value of single-family homes in that municipality and to pay the cost of site
196.7acquisition, relocation, demolition of existing structures, site preparation, and pollution
196.8abatement on one or more parcels, if the parcel:
196.9(i) contains a residence containing one to four family dwelling units that has been
196.10vacant for three or more months;
196.11(ii) contains a residence containing one to four family dwelling units that is
196.12structurally substandard, as defined in section 469.174, subdivision 10;
196.13(iii) is in foreclosure as defined in section 325N.10, subdivision 7, but without regard
196.14to whether the residence is the owner's principal residence; or
196.15(iv) is a vacant site, if the authority uses the parcel in connection with the
196.16development or redevelopment of a parcel qualifying under items (i) to (iii).
196.17    (e) For a district created within a biotechnology and health sciences industry zone
196.18as defined in section 469.330, subdivision 6, or for an existing district located within
196.19such a zone, tax increment derived from such a district may be expended outside of the
196.20district but within the zone only for expenditures required for the construction of public
196.21infrastructure necessary to support the activities of the zone, land acquisition, and other
196.22redevelopment costs as defined in section 469.176, subdivision 4j. These expenditures are
196.23considered as expenditures for activities within the district.
196.24(f) The authority under paragraph (d), clause (2), expires on December 31, 2015.
196.25Increments may continue to be expended under this authority after that date, if they are
196.26used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph
196.27(a), if December 31, 2015 is considered to be the last date of the five-year period after
196.28certification under that provision.
196.29EFFECTIVE DATE.This section is effective for any district that is subject to the
196.30provisions of section 469.1763, regardless of when the request for certification of the
196.31district was made.

196.32    Sec. 8. Minnesota Statutes 2008, section 469.1763, subdivision 3, is amended to read:
196.33    Subd. 3. Five-year rule. (a) Revenues derived from tax increments are considered
196.34to have been expended on an activity within the district under subdivision 2 only if one
196.35of the following occurs:
197.1(1) before or within five years after certification of the district, the revenues are
197.2actually paid to a third party with respect to the activity;
197.3(2) bonds, the proceeds of which must be used to finance the activity, are issued and
197.4sold to a third party before or within five years after certification, the revenues are spent
197.5to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
197.6reasonably expected to be spent before the end of the later of (i) the five-year period, or
197.7(ii) a reasonable temporary period within the meaning of the use of that term under section
197.8148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve
197.9or replacement fund;
197.10(3) binding contracts with a third party are entered into for performance of the
197.11activity before or within five years after certification of the district and the revenues are
197.12spent under the contractual obligation;
197.13(4) costs with respect to the activity are paid before or within five years after
197.14certification of the district and the revenues are spent to reimburse a party for payment
197.15of the costs, including interest on unreimbursed costs; or
197.16(5) expenditures are made for housing purposes as permitted by subdivision 2,
197.17paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
197.18by subdivision 2, paragraph (e).
197.19(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
197.20the original refunded bonds meet the requirements of paragraph (a), clause (2).
197.21(c) For districts which were certified on or after January 1, 2004, and before July 1,
197.222010, the five-year period under paragraph (a) is increased to eight years. For districts
197.23qualifying under this paragraph, application of subdivision 4 begins in the ninth year
197.24following certification of the district.
197.25EFFECTIVE DATE.This section is effective for districts certified on or after
197.26January 1, 2004.

197.27    Sec. 9. Minnesota Statutes 2008, section 469.178, subdivision 7, is amended to read:
197.28    Subd. 7. Interfund loans. The authority or municipality may advance or loan
197.29money to finance expenditures under section 469.176, subdivision 4, from its general
197.30fund or any other fund under which it has legal authority to do so. The loan or advance
197.31must be authorized, by resolution of the governing body or of the authority, whichever
197.32has jurisdiction over the fund from which the advance or loan is made authorized, before
197.33money is transferred, advanced, or spent, whichever is earliest. The resolution may
197.34generally grant to the authority the power to make interfund loans under one or more tax
197.35increment financing plans or for one or more districts. The terms and conditions for
198.1repayment of the loan must be provided in writing and include, at a minimum, the principal
198.2amount, the interest rate, and maximum term. The maximum rate of interest permitted to
198.3be charged is limited to the greater of the rates specified under section 270C.40 or 549.09
198.4as of the date the loan or advance is made authorized, unless the written agreement states
198.5that the maximum interest rate will fluctuate as the interest rates specified under section
198.6270C.40 or 549.09 are from time to time adjusted.
198.7EFFECTIVE DATE.This section is effective for interfund loans made after June
198.830, 2009.

198.9    Sec. 10. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by
198.10Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10,
198.11section 12, and Laws 2008, chapter 154, article 9, section 18, is amended to read:
198.12    Subd. 4. Authority. For housing replacement projects in the city of Crystal,
198.13"authority" means the Crystal economic development authority. For housing replacement
198.14projects in the city of Fridley, "authority" means the housing and redevelopment authority
198.15in and for the city of Fridley or a successor in interest. For housing replacement
198.16projects in the city of Minneapolis, "authority" means the Minneapolis community
198.17development agency or its successors and assigns. For housing replacement projects
198.18in the city of St. Paul, "authority" means the St. Paul housing and redevelopment
198.19authority. For housing replacement projects in the city of Duluth, "authority" means the
198.20Duluth economic development authority. For housing replacement projects in the city of
198.21Richfield, "authority" is the authority as defined in Minnesota Statutes, section 469.174,
198.22subdivision 2 , that is designated by the governing body of the city of Richfield. For
198.23housing replacement projects in the city of Columbia Heights, "authority" is the authority
198.24as defined in Minnesota Statutes, section 469.174, subdivision 2, that is designated by
198.25the governing body of the city of Columbia Heights. For housing replacement projects in
198.26the city of Brooklyn Park, "authority" is the authority as defined in Minnesota Statutes,
198.27section 469.174, subdivision 2, that is designated by the governing body of the city of
198.28Brooklyn Park.
198.29EFFECTIVE DATE.This section is effective the day following final enactment
198.30and applies to the city of Brooklyn Park without local approval under Minnesota Statutes,
198.31section 645.023, subdivision 1, clause (a).

198.32    Sec. 11. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by
198.33Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10,
199.1section 13, and Laws 2002, chapter 377, article 7, section 6, and Laws 2008, chapter 154,
199.2article 9, section 19, is amended to read:
199.3    Subdivision 1. Creation of projects. (a) An authority may create a housing
199.4replacement project under sections 44 to 47, as provided in this section.
199.5    (b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, and Brooklyn
199.6Park, the authority may designate up to 50 100 parcels in the city to be included in a
199.7housing replacement district over the life of a district or districts. No more than ten
199.8parcels may be included in year one of the district, with up to ten additional parcels added
199.9to the district in each of the following nine years. For the cities of St. Paul and Duluth,
199.10each authority may designate not more than 200 parcels in the city to be included in a
199.11housing replacement district over the life of the district. For the city of Minneapolis, the
199.12authority may designate not more than 400 parcels in the city to be included in housing
199.13replacement districts over the life of the districts. The only parcels that may be included
199.14in a district are (1) vacant sites, (2) parcels containing vacant houses, or (3) parcels
199.15containing houses that are structurally substandard, as defined in Minnesota Statutes,
199.16section 469.174, subdivision 10.
199.17    (c) The city in which the authority is located must pay at least 25 percent of the
199.18housing replacement project costs from its general fund, a property tax levy, or other
199.19unrestricted money, not including tax increments.
199.20    (d) The housing replacement district plan must have as its sole object the acquisition
199.21of parcels for the purpose of preparing the site to be sold for market rate housing. As
199.22used in this section, "market rate housing" means housing that has a market value that
199.23does not exceed 150 percent of the average market value of single-family housing in that
199.24municipality.
199.25EFFECTIVE DATE.This section is effective the day following final enactment
199.26and applies to the affected cities without local approval under Minnesota Statutes, section
199.27645.023, subdivision 1, clause (a).

199.28    Sec. 12. Laws 2008, chapter 366, article 5, section 34, is amended to read:
199.29    Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY.
199.30    (a) The provisions of this section apply to redevelopment tax increment financing
199.31districts created by the Housing and Redevelopment Authority in and for the city of
199.32Oakdale in the areas comprised of the parcels with the following parcel identification
199.33numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056;
199.343102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059;
200.13102921320060; and 3102921320061; and (2) 3102921330005; and 3102921330004; and
200.2(2) 2902921330001 and 2902921330005.
200.3    (b) For a district subject to this section, the Housing and Redevelopment Authority
200.4may, when requesting certification of the original tax capacity of the district under
200.5Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district
200.6be certified as the tax capacity of the land.
200.7    (c) The authority to request certification of a district under this section expires on
200.8July 1, 2013.
200.9EFFECTIVE DATE.This section is effective upon approval by the governing
200.10body of the city of Oakdale and compliance with Minnesota Statutes, section 645.021,
200.11subdivision 3 .

200.12    Sec. 13. HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF
200.13SOUTH ST. PAUL; TAX INCREMENT FINANCING DISTRICT.
200.14    Subdivision 1. Authorization. Notwithstanding the provisions of any other law,
200.15the Housing and Redevelopment Authority of the city of South St. Paul may establish a
200.16redevelopment tax increment financing district comprised of the properties included in the
200.17existing Concord Street tax increment district in the city that are exempt under Minnesota
200.18Statutes, section 469.179, subdivision 1, and were not decertified before July 1, 2009. The
200.19district created under this section may be certified after August 1, 2009, and terminates no
200.20later than December 31, 2024. The Housing and Redevelopment Authority of the city of
200.21South St. Paul may create the district under this section only if it enters into an agreement
200.22with Dakota County to pay the county annually out of the increment from this district an
200.23amount equal to the tax that would have been payable to the county on the captured tax
200.24capacity of the district had the district not been created.
200.25    Subd. 2. Special rules. The requirements for qualifying a redevelopment district
200.26under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located
200.27within the district. Minnesota Statutes, section 469.176, subdivisions 4j and 4l, do not
200.28apply to the district. The original tax capacity of the district is $354,945.
200.29    Subd. 3. Authorized expenditures. Tax increment from the district may be
200.30expended to pay for any eligible activities authorized by Minnesota Statutes, chapter
200.31469, within the redevelopment area that includes the district. All such expenditures are
200.32deemed to be activities within the district under Minnesota Statutes, section 469.1763,
200.33subdivisions 2, 3, and 4.
200.34    Subd. 4. Adjusted net tax capacity. The captured tax capacity of the district must
200.35be included in the adjusted net tax capacity of the city, county, and school district for the
201.1purposes of determining local government aid, education aid, and county program aid.
201.2The county auditor shall report to the commissioner of revenue the amount of the captured
201.3tax capacity for the district at the time the assessment abstracts are filed.
201.4EFFECTIVE DATE.This section is effective upon compliance with Minnesota
201.5Statutes, section 645.021, subdivision 3, by the governing body of the city of South St.
201.6Paul.

201.7    Sec. 14. CITY OF MINNETONKA; TAX INCREMENT FINANCING
201.8DISTRICT EXTENSION.
201.9Notwithstanding the provisions of Minnesota Statutes, section 469.176, subdivision
201.101b, paragraph (a), clause (1), the governing bodies of the city of Minnetonka and its
201.11economic development authority may elect to extend the maximum duration of all or
201.12a portion the Glenhaven Tax Increment Financing District by up to seven years. The
201.13city may make the election under this section only if it finds by resolution that when it
201.14approved the original tax increment financing plan for the Glenhaven Tax Increment
201.15Financing District the area of the district qualified to be certified as a redevelopment
201.16district under Minnesota Statutes, section 469.174, subdivision 10, or that the portion of
201.17the district it is electing to extend so qualified. The city must document this finding in the
201.18manner provided under Minnesota Statutes, section 469.175, subdivision 3, paragraph (b),
201.19clause (1), for a redevelopment district.
201.20EFFECTIVE DATE.This section is effective upon compliance with Minnesota
201.21Statutes, sections 469.1782, subdivision 2, and 645.021, subdivision 3.

201.22    Sec. 15. CITY OF ARDEN HILLS; SPECIAL TAX INCREMENT FINANCING
201.23AUTHORITY.
201.24    Subdivision 1. Establishment. The city of Arden Hills may establish within the
201.25corporate boundaries of the city a redevelopment tax increment financing district subject
201.26to the special rules under subdivision 2. The district must be located within the area
201.27described in the TCAAP Boundary Survey dated December 12, 2007, by W. Brown Land
201.28Surveying, Inc.
201.29    Subd. 2. Special rules. (a) If the city elects to adopt the tax increment financing
201.30plan in subdivision 1 for the district, the following rules apply to the district:
201.31(1) the district is deemed to meet all the requirements of Minnesota Statutes, section
201.32469.174, subdivision 10;
201.33(2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, is
201.34extended to a ten-year period; and
202.1(3) the duration limit under Minnesota Statutes, section 469.176, subdivision 1b,
202.2paragraph (a), clause (4), is extended to 30 years after receipt of the first increment.
202.3(b) Notwithstanding Minnesota Statutes, section 469.175, subdivision 1, paragraph
202.4(b), the city may designate the first year in which it elects to receive an increment, up to six
202.5years following the year of approval of the district. The city must make the designation
202.6by written notice to the county auditor delivered by June 30 of the year prior to the
202.7designated year of first receipt.
202.8    Subd. 3. Expiration. The authority to approve a tax increment financing plan to
202.9establish a tax increment financing district under this section expires December 31, 2019.
202.10EFFECTIVE DATE.This section is effective upon approval by the governing body
202.11of the city of Arden Hills and upon compliance by the city with Minnesota Statutes,
202.12sections 469.1782, subdivision 2, and 645.021, subdivision 3.

202.13    Sec. 16. CITY OF ST. PAUL; AUTHORITY TO EXERCISE SPECIAL LAW
202.14AUTHORITY.
202.15Notwithstanding the failure of the governing body of the city of St. Paul to approve
202.16Laws 1995, chapter 264, article 5, sections 44 to 47, as required by Laws 1995, chapter
202.17264, article 5, section 49, the provisions of sections 44 to 47, as amended, apply to the city
202.18of St. Paul without local approval under Minnesota Statutes, section 645.023, subdivision
202.191, clause (a).
202.20EFFECTIVE DATE.This section is effective the day following final enactment.

202.21    Sec. 17. CITY OF SAUK RAPIDS; TAX INCREMENT FINANCING DISTRICT.
202.22Any parcel in the city of Sauk Rapids located within Blocks 26, 27, 59, 61, and 62,
202.23original town of Sauk Rapids Plat, is deemed to meet the requirements of Minnesota
202.24Statutes, section 469.174, subdivision 10, paragraph (d), clause (1), if the following
202.25conditions are met:
202.26(1) a building on the parcel was demolished in compliance with Minnesota Statutes,
202.27section 469.174, subdivision 10, paragraph (d), clause (2), after the authority adopted a
202.28resolution pursuant to Minnesota Statutes, section 469.174, subdivision 10, paragraph
202.29(d), clause (3); and
202.30(2) the request for certification of the parcel as part of a district is filed with the
202.31county auditor by December 31, 2012, or three years after the date of demolition,
202.32whichever is later.
203.1EFFECTIVE DATE.This section is effective upon compliance by the governing
203.2body of the city of Sauk Rapids with the requirements of Minnesota Statutes, section
203.3645.021, subdivision 3.

203.4    Sec. 18. SEAWAY PORT AUTHORITY OF DULUTH; TAX INCREMENT
203.5FINANCING DISTRICT; SPECIAL RULES.
203.6(a) If the Seaway Port Authority of Duluth adopts a tax increment financing plan
203.7or plans and the governing body of the city of Duluth approves the plan or plans for one
203.8or more tax increment financing districts consisting of one or more parcels identified as:
203.9010-2730-00010; 010-2730-00020; 010-2730-00040; 010-2730-00050; 010-2730-00070;
203.10010-2730-00080; 010-2730-00090; 010-2730-00100; 010-2730-00160; 010-2730-00180;
203.11010-2730-00200; 010-2730-01250; 010-2730-01340; 010-2730-01350; 010-2730-01490;
203.12010-2730-01500; 010-2730-01510; 010-2730-01520; 010-2730-01530; 010-2730-01540;
203.13010-2730-01550; 010-2730-01560; 010-2730-01570; 010-2730-01580; 010-2730-01590;
203.14010-2730-1300; 010-2746-1330; 010-2746-1440; 010-2746-1380; 010-3300-4560;
203.15010-3300-4565; 010-3300-04570; 010-3300-04580; 010-3300-04640; 010-3300-04645;
203.16and 010-3300-04650, the five-year rule under Minnesota Statutes, section 469.1763,
203.17subdivision 3, that activities must be undertaken within a five-year period from the date
203.18of certification of a tax increment financing district, must be considered to be met if the
203.19activities are undertaken within five years after the date all qualifying parcels are delisted
203.20from the Federal Superfund list.
203.21(b) The requirements of Minnesota Statutes, section 469.1763, subdivision 4,
203.22beginning in the sixth year following certification of the district requirement, will begin
203.23in the sixth year following the date all qualifying parcels are delisted from the Federal
203.24Superfund list.
203.25(c) For purposes of this section, "qualifying parcels" means United States Steel
203.26parcels listed in paragraph (a) and shown by the Minnesota Pollution Control Agency as
203.27part of the USS Site (USEPA OU 02) that are:
203.28(1) included in the tax increment financing district; and
203.29(2) on which actions are taken that meet the requirements of Minnesota Statutes,
203.30section 469.176, subdivision 6.
203.31(d) In addition to the reporting requirements of Minnesota Statutes, section 469.175,
203.32subdivision 5, the Seaway Port Authority of Duluth shall report the status of all parcels
203.33listed in paragraph (a) and shown as part of the USS Site (USEPA OU 02). The status
203.34report must show the parcel numbers, the listed or delisted status, and if delisted, the
203.35delisting date.
204.1EFFECTIVE DATE.This section is effective upon approval by the governing
204.2body of the city of Duluth and compliance with Minnesota Statutes, section 645.021,
204.3subdivision 3.

204.4    Sec. 19. CITY OF MANKATO; TAX INCREMENT FINANCING DISTRICT;
204.5PROJECT REQUIREMENTS.
204.6    Subdivision 1. Expenditures outside district. Notwithstanding Minnesota Statutes,
204.7section 469.1763, subdivision 2, or any other law to the contrary, the city of Mankato may
204.8expend increments generated from its South Riverfront tax increment financing district for
204.9construction of street and roadway improvements under the Sibley Parkway Plan, provided
204.10the improvements are located within 500 feet or less of the boundaries of the district.
204.11    Subd. 2. Five-year rule. The five-year rule under Minnesota Statutes, section
204.12469.1763, subdivision 3, is extended to an 11-year period for the South Riverfront tax
204.13increment financing district.
204.14EFFECTIVE DATE.This section is effective upon approval by the governing
204.15body of the city of Mankato and upon compliance by the city with Minnesota Statutes,
204.16section 645.021, subdivision 3.

204.17    Sec. 20. CITY OF FARIBAULT; JOBZ EXTENSION.
204.18Notwithstanding the provisions of Minnesota Statutes, section 469.312, subdivision
204.195, the city of Faribault may, with approval by the commissioner of employment and
204.20economic development, extend the duration of a job opportunity building zone located
204.21within its corporate boundaries by five years. This authority applies to a zone that borders
204.22on Trunk Highway No. I-35 and Park Avenue. The authority to extend the duration of
204.23the zone applies only if the city enters a business subsidy agreement that provides for a
204.24business, which is engaged in manufacturing products that increase the efficiency of the
204.25use of energy resources, to construct or improve a facility in the zone.
204.26The authority to extend the duration of a zone under this section expires January 1,
204.272011.
204.28EFFECTIVE DATE.This section is effective the day following final enactment.


204.31    Section 1. [17.1195] BOVINE TUBERCULOSIS GRANTS.
204.32    Subdivision 1. Definitions. (a) For purposes of this section the following terms
204.33have the meanings given.
205.1    (b) "Commissioner" means the commissioner of agriculture.
205.2    (c) "Corporate owner of cattle" means an owner of cattle subject to tax under section
205.3290.06, subdivision 1, and also a shareholder of an S corporation under section 290.9725.
205.4(d) "Owner" means an individual or corporation, including a shareholder of an S
205.5corporation under section 290.9725, who owns a herd of animals required to be tested
205.6for bovine tuberculosis and located in the modified accredited zone established as part of
205.7Minnesota's split state status as approved by the United States Department of Agriculture
205.8and effective October 10, 2008.
205.9(e) "Animals" means cattle, bison, and goats.
205.10    Subd. 2. Bovine tuberculosis testing grants. (a) The commissioner is authorized to
205.11make grants to owners of cattle in Minnesota to offset a portion of the cost of tuberculosis
205.12testing performed on the cattle. For corporate owners of cattle, the grant equals 25 percent
205.13of the tuberculosis testing expenses incurred during the calendar year. For all other
205.14owners, the grant equals 50 percent of tuberculosis testing expenses incurred during the
205.15calendar year.
205.16(b) The commissioner may specify a time and manner for cattle owners to apply
205.17for grants under this section, and may request supporting documentation of actual testing
205.18expenses. Applications received by January 31 relating to testing expenses incurred in
205.19the previous calendar year are eligible for grants. The commissioner must issue grants by
205.20March 1.
205.21(c) If applications for grants exceed the amount available for the fiscal year, the
205.22commissioner must proportionally adjust all grant amounts so that the amount awarded for
205.23the year does not exceed the amount available.
205.24    Subd. 3. Bovine tuberculosis split state grants. (a) The commissioner is
205.25authorized to make annual grants to owners to offset a portion of the cost of tuberculosis
205.26testing performed on animals. The annual grant amount for each owner equals $25 per
205.27animal multiplied by the largest number of animals tested as part of any whole-herd test
205.28of the owner's animals occurring during the years 2006 through 2008 as reported by the
205.29Board of Animal Health.
205.30(b) The commissioner may specify a time and manner for owners to apply for grants
205.31under this section, and may request supporting documentation of actual testing expenses.
205.32(c) If applications for grants exceed the amount available for the fiscal year, the
205.33commissioner must proportionally adjust all grant amounts so that the amount awarded for
205.34the year does not exceed the amount available.
205.35(d) The grants made under this subdivision shall be made annually after July 1
205.36and before July 15, beginning in 2010, until terminated under this paragraph. The
206.1commissioner's authority to make grants under this subdivision terminates in the year
206.2following the calendar year when the Board of Animal Health certifies that the state is
206.3free of bovine tuberculosis.
206.4EFFECTIVE DATE.This section is effective the day following final enactment.

206.5    Sec. 2. Minnesota Statutes 2008, section 270C.12, is amended by adding a subdivision
206.6to read:
206.7    Subd. 5. Duration. Notwithstanding the provisions of any statutes to the contrary,
206.8including section 15.059, the coordinating committee as established by this section to
206.9oversee and coordinate preparation of the microdata samples of income tax returns and
206.10other information does not expire.
206.11EFFECTIVE DATE.This section is effective the day following final enactment.

206.12    Sec. 3. Minnesota Statutes 2008, section 270C.445, is amended to read:
206.13270C.445 TAX PREPARATION SERVICES.
206.14    Subdivision 1. Scope. This section applies to a person who provides tax preparation
206.15services., except:
206.16(1) a person who provides tax preparation services for fewer than ten clients in a
206.17calendar year;
206.18(2) a person who provides tax preparation services only to immediate family
206.19members. For the purposes of this section, "immediate family members" means a spouse,
206.20parent, grandparent, child, or sibling;
206.21(3) an employee who prepares a tax return for an employer's business;
206.22(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of
206.23the fiduciary estate, testator, trustor, grantor, or beneficiaries of them; and
206.24(5) nonprofit organizations providing tax preparation services under the Internal
206.25Revenue Service Volunteer Income Tax Assistance Program or Tax Counseling for the
206.26Elderly Program.
206.27    Subd. 2. Definitions. (a) For purposes of this section, the following terms have
206.28the meanings given.
206.29(b) "Client" means an individual for whom a tax preparer performs or agrees to
206.30perform tax preparation services.
206.31(c) "Person" means an individual, corporation, partnership, limited liability
206.32company, association, trustee, or other legal entity.
207.1(d) "Refund anticipation loan" means a loan or any other extension of credit, whether
207.2provided by the tax preparer or another entity such as a financial institution, in anticipation
207.3of, and whose payment is secured by, a client's federal or state income tax refund or both.
207.4(e) "Tax preparation services" means services provided for a fee or other
207.5consideration to a client to:
207.6(1) assist with preparing or filing state or federal individual income tax returns;
207.7(2) assume final responsibility for completed work on an individual income tax
207.8return on which preliminary work has been done by another; or
207.9(3) offer or facilitate the provision of refund anticipation loans and refund
207.10anticipation checks.
207.11(f) "Tax preparer" or "preparer" means a person providing tax preparation services
207.12subject to this section.
207.13(g) "Advertise" means to solicit business through any means or medium.
207.14(h) "Facilitate" means to individually or in conjunction or cooperation with another
207.15person:
207.16(1) accept an application for a refund anticipation loan;
207.17(2) pay to a client the proceeds, through direct deposit, a negotiable instrument, or
207.18any other means, of a refund anticipation loan; or
207.19(3) offer, arrange, process, provide, or in any other manner act to allow the making
207.20of, a refund anticipation loan.
207.21(i) "Refund anticipation check" means a negotiable instrument provided to a client
207.22by the tax preparer or another person, which is issued from the proceeds of a taxpayer's
207.23federal or state income tax refund or both and represents the net of the refund minus the tax
207.24preparation fee and any other fees. A refund anticipation check includes a refund transfer.
207.25    Subd. 3. Standards of conduct. No tax preparer shall:
207.26(1) without good cause fail to promptly, diligently, and without unreasonable delay
207.27complete a client's tax return;
207.28(2) obtain the signature of a client to a tax return or authorizing document that
207.29contains blank spaces to be filled in after it has been signed;
207.30(3) fail to sign a client's tax return when payment for services rendered has been
207.31made;
207.32(4) fail or refuse to give a client a copy of any document requiring the client's
207.33signature within a reasonable time after the client signs the document;
207.34(5) fail to retain for at least four years a copy of individual income tax returns;
207.35(6) fail to maintain a confidential relationship between themselves and their with
207.36clients or former clients;
208.1(7) fail to take commercially reasonable measures to safeguard a client's nonpublic
208.2personal information;
208.3(8) make, authorize, publish, disseminate, circulate, or cause to make, either directly
208.4or indirectly, any false, deceptive, or misleading statement or representation relating to or
208.5in connection with the offering or provision of tax preparation services;
208.6(9) require a client to enter into a loan arrangement in order to complete a tax return;
208.7(10) claim credits or deductions on a client's tax return for which the tax preparer
208.8knows or reasonably should know the taxpayer client does not qualify;
208.9(11) charge, offer to accept, or accept a fee based upon a percentage of an anticipated
208.10refund for tax preparation services;
208.11(12) under any circumstances, withhold or fail to return to a client a document
208.12provided by the client for use in preparing the client's tax return.;
208.13(13) establish an account in the preparer's name to receive a client's refund through
208.14a direct deposit or any other instrument unless the client's name is also on the account,
208.15except that a taxpayer may assign the portion of a refund representing the Minnesota
208.16education credit available under section 290.0674 to a bank account without the client's
208.17name, as provided under section 290.0679;
208.18(14) fail to act in the best interests of the client;
208.19(15) fail to safeguard and account for any money handled for the client;
208.20(16) fail to disclose all material facts of which the preparer has knowledge which
208.21might reasonably affect the client's rights and interests;
208.22(17) violate any provision of section 332.37;
208.23(18) include any of the following in any document provided or signed in connection
208.24with the provision of tax preparation services:
208.25(i) a hold harmless clause;
208.26(ii) a confession of judgment or a power of attorney to confess judgment against the
208.27client or appear as the client in any judicial proceeding;
208.28(iii) a waiver of the right to a jury trial, if applicable, in any action brought by or
208.29against a debtor;
208.30(iv) an assignment of or an order for payment of wages or other compensation for
208.31services;
208.32(v) a provision in which the client agrees not to assert any claim or defense otherwise
208.33available;
208.34(vi) a waiver of any provision of this section or a release of any obligation required
208.35to be performed on the part of the tax preparer; or
209.1(vii) a waiver of the right to injunctive, declaratory, or other equitable relief or
209.2relief on a class basis; or
209.3(19) if making, providing, or facilitating a refund anticipation loan, fail to provide all
209.4disclosures required by the federal Truth in Lending Act, United States Code, title 15, in a
209.5form that may be retained by the client.
209.6    Subd. 3a. Written agreements required; refund anticipation loans and checks.
209.7(a) All agreements to make, provide, or facilitate a refund anticipation loan or refund
209.8anticipation check must be in writing. No agreement may include a provision that
209.9directly or indirectly arranges for payment of or deduction from any portion of the refund
209.10anticipation loan or refund anticipation check for check cashing, credit insurance, attorney
209.11fees, or the collection of any debt owed to any party for any other good or service other
209.12than a debt owed to the facilitator for the repayment of a refund anticipation loan and tax
209.13preparation fees associated with the refund anticipation loan or refund anticipation check.
209.14(b) If a written agreement contains a mandatory arbitration clause, the tax preparer
209.15must provide a separate written notice to the client that:
209.16(1) arbitration is the exclusive means of dispute resolution for any dispute about the
209.17written agreement;
209.18(2) the client has the right to affirmatively opt out of the arbitration clause within 30
209.19days of entering into an agreement; and
209.20(3) the client is not bound to arbitration if the claim or dispute involves a violation of
209.21this section or the client invokes the remedies provided in subdivision 7.
209.22The tax preparer must advise the client, both orally and in writing, of the process by
209.23which the client may exercise the right to opt out of the mandatory arbitration clause.
209.24    Subd. 4. Required disclosures; refund anticipation loans. (a) If Before or at the
209.25same time a tax preparer offers to make or facilitate a refund anticipation loan to the
209.26client, the preparer must make the disclosures in this subdivision. The disclosures must
209.27be made before or at the same time the preparer offers the refund anticipation loan to the
209.28client. subdivision 4a. Before or at the same time a tax preparer offers or facilitates a
209.29refund anticipation check or refund transfer, the tax preparer must make the disclosures
209.30in subdivision 4b.
209.31(b) The disclosures must be provided to a client in a written notice on a single sheet
209.32of paper, separate from any other document or writing.
209.33(c) All required statements must be in capital and small font type fonts, in a
209.34minimum of 14-point type, with at least a double space between each statement.
209.35(d) The notice must be signed and dated by the tax preparer and the client.
210.1(e) All required disclosures, notices, and statements must be provided in the client's
210.2primary language, if the tax preparer advertises in that language.
210.3(b) The tax preparer must provide to a client a written notice on a single sheet of
210.4paper, separate from any other document or writing, containing:
210.5(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters,
210.6and in 28-point type stating "NOTICE";
210.7(2) the following verbatim statements:
210.8(i) "This is a loan. The annual percentage rate (APR), based on the estimated
210.9payment period, is (fill in the estimated APR)."
210.10(ii) "Your refund will be used to repay the loan. As a result, the amount of your
210.11refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other
210.12charges."
210.13(iii) "You can get your refund in about two weeks if you file your return electronically
210.14and have the Internal Revenue Service send your refund to your own bank account." and
210.15(3) if the client is subject to additional interest when a refund is delayed, the
210.16following verbatim statement must also be included in the notice: "If you choose to take
210.17this loan and your refund is delayed, you may have to pay additional interest."
210.18(c) All required statements must be in capital and small font type fonts, in a
210.19minimum of 14-point type, with at least a double space between each line in the statement
210.20and four spaces between each statement.
210.21(d) The notice must be signed and dated by the tax preparer and the client.
210.22    Subd. 4a. Refund anticipation loan disclosures. The disclosure required under
210.23subdivision 4 for a refund anticipation loan must contain:
210.24(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters,
210.25and in 28-point type stating "NOTICE";
210.26(2) the following verbatim statements:
210.27(i) "This is a loan. This is not your refund. The annual percentage rate (APR), based
210.28on the estimated payment period, is (fill in the estimated APR).";
210.29(ii) "Your refund will be used to repay the loan. As a result, the amount of your
210.30refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other
210.31charges.";
210.32(iii) "You have the right to cancel this transaction by returning the loan check or the
210.33amount of the loan in cash within one business day after you get the loan."; and
210.34(iv) "You can get your refund in about two weeks if you file your return electronically
210.35and have the Internal Revenue Service send your refund to your own bank account."; and
211.1(3) if the client is subject to additional interest when a refund is delayed, the
211.2following verbatim statement must also be included in the notice: "If you choose to take
211.3this loan and your refund is delayed, you may have to pay."
211.4    Subd. 4b. Refund anticipation check disclosures. (a) The disclosure required
211.5under subdivision 4 for a refund anticipation check must contain:
211.6(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters,
211.7and in 28-point type stating "NOTICE";
211.8(2) the following verbatim statements:
211.9(i) "You do not have to purchase a refund anticipation check (RAC) to get your tax
211.10refund.";
211.11(ii) "Generally the IRS can direct deposit your income tax refund to your personal
211.12bank account within 8 to 15 days after the IRS accepts your tax return for processing.";
211.13(iii) "If you choose to purchase a RAC, your tax return funds will generally be
211.14made available to you within 8 to 15 days.";
211.15(iv) "A RAC is not a loan.";
211.16(v) "The cost of the RAC is $ (fill in dollar amount).";
211.17(vi) "You can either pay for your RAC now or you can have it withheld from your
211.18refund."; and
211.19(vii) "The cost of your tax return is not any more or any less if you purchase a RAC."
211.20(b) A tax preparer offering a refund anticipation check that uses a different product
211.21name, including but not limited to refund transfer, must substitute the product name for
211.22"RAC" in all the statements required under this subdivision.
211.23    Subd. 5. Itemized bill required. A tax preparer must provide an itemized statement
211.24of the charges for services, at least separately stating the charges for:
211.25(1) return preparation; and
211.26(2) providing or facilitating a refund anticipation loan.; and
211.27(3) each fee associated with the provision of a refund anticipation check.
211.28    Subd. 5a. Nongame wildlife checkoff. A tax preparer must give written notice of
211.29the option to contribute to the nongame wildlife management account in section 290.431
211.30to corporate clients that file an income tax return and to individual clients who file an
211.31income tax return or property tax refund claim form. This notification must be included
211.32with information sent to the client at the same time as the preliminary worksheets or other
211.33documents used in preparing the client's return and must include a line for displaying
211.34contributions.
211.35    Subd. 5b. Right to rescind refund anticipation loan. (a) A client may rescind a
211.36refund anticipation loan on or before the close of business on the next day of business
212.1following execution of the loan agreement or receipt of the proceeds of the loan by
212.2providing written notification to the tax preparer of the rescission, and either returning the
212.3original check issued for the loan, or tendering the amount of the loan to the tax preparer.
212.4(b) The tax preparer may charge a fee for rescinding a refund anticipation loan
212.5only if an account has been established at a financial institution to electronically receive
212.6the refund and the financial institution has charged a fee to establish the account. The
212.7allowable fee the tax preparer may charge the client rescinding the refund anticipation
212.8loan may not exceed the fee charged to the tax preparer by the financial institution to
212.9establish the account.
212.10    Subd. 6. Enforcement; penalties. The commissioner may impose an administrative
212.11penalty of not more than $1,000 per violation of subdivision 3, 3a, 4, or 5, or 5b, provided
212.12that a penalty may not be imposed for any conduct that is also subject to the tax return
212.13preparer penalties in section 289A.60, subdivision 13. The commissioner may terminate a
212.14tax preparer's authority to transmit returns electronically to the state, if the commissioner
212.15determines the tax preparer engaged in a pattern and practice of violating this section.
212.16Imposition of a penalty under this subdivision is subject to the contested case procedure
212.17under chapter 14. The commissioner shall collect the penalty in the same manner as the
212.18income tax. Penalties imposed under this subdivision are public data.
212.19    Subd. 6a. Exchange of data; State Board of Accountancy. The State Board of
212.20Accountancy shall refer to the commissioner complaints it receives about tax preparers
212.21who are not subject to the jurisdiction of the State Board of Accountancy and who are
212.22alleged to have violated the provisions of subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b.
212.23    Subd. 6b. Exchange of data; Lawyers Board of Professional Responsibility. The
212.24Lawyers Board of Professional Responsibility may refer to the commissioner complaints
212.25it receives about tax preparers who are not subject to its jurisdiction and who are alleged
212.26to have violated the provisions of subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b.
212.27    Subd. 6c. Exchange of data; commissioner. The commissioner shall refer
212.28complaints about tax preparers who are alleged to have violated the provisions of
212.29subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b to:
212.30(1) the State Board of Accountancy, if the tax preparer is under its jurisdiction; and
212.31(2) the Lawyers Board of Professional Responsibility, if the tax preparer is under
212.32its jurisdiction.
212.33    Subd. 6d. Data private. Information exchanged on individuals under subdivisions
212.346a to 6c are private data under section 13.02, subdivision 12, until such time as a penalty
213.1is imposed as provided in section 326A.08 or by the Lawyers Board of Professional
213.2Responsibility.
213.3    Subd. 7. Enforcement; civil actions. (a) Any violation of this section is an unfair,
213.4deceptive, and unlawful trade practice within the meaning of section 8.31. An action taken
213.5under section 8.31 is in the public interest.
213.6(b) A client may bring a civil action seeking redress for a violation of this section in
213.7the conciliation or the district court of the county in which unlawful action is alleged to
213.8have been committed or where the respondent resides or has a principal place of business.
213.9(c) A district court finding for the plaintiff must award:
213.10(1) actual damages, including;
213.11(2) incidental and consequential damages,;
213.12(3) statutory damages of twice the sum of: (i) the tax preparation fees; and (ii) if the
213.13plaintiff violated subdivision 3a, 4, or 5b all interest and fees for a refund anticipation loan;
213.14(4) reasonable attorney fees,;
213.15(5) court costs,; and
213.16(6) any other equitable relief as the court considers appropriate.
213.17    Subd. 8. Limited exemptions; enforcement provisions. The provisions of this
213.18section, except for subdivision subdivisions 3a, 4, and 5b, do not apply to:
213.19(1) an attorney admitted to practice under section 481.01;
213.20(2) a certified public accountant or other person who is subject to the jurisdiction of
213.21the State Board of Accountancy;
213.22(3) an enrolled agent who has passed the special enrollment examination
213.23administered by the Internal Revenue Service; or
213.24(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of
213.25the fiduciary estate, the testator, trustor, grantor, or beneficiaries of them;
213.26(5) a tax preparer who provides tax preparation services for fewer than six clients
213.27in a calendar year;
213.28(6) tax preparation services to a spouse, parent, grandparent, child, or sibling of
213.29the tax preparer; and
213.30(7) the preparation by an employee of the tax return of the employee's employer
213.31(4) anyone who provides, or assists in providing, tax preparation services within
213.32the scope of duties as an employee or supervisor of a person who is exempt under this
213.33subdivision.

213.34    Sec. 4. Minnesota Statutes 2008, section 270C.56, subdivision 3, is amended to read:
214.1    Subd. 3. Procedure for assessment; claims for refunds. (a) The commissioner
214.2may assess liability for the taxes described in subdivision 1 against a person liable
214.3under this section. The assessment may be based upon information available to the
214.4commissioner. It must be made within the prescribed period of limitations for assessing
214.5the underlying tax, or within one year after the date of an order assessing underlying tax,
214.6whichever period expires later. An order assessing personal liability under this section is
214.7reviewable under section 270C.35 and is appealable to Tax Court.
214.8(b) If the time for appealing the order has expired and a payment is made by or
214.9collected from the person assessed on the order in excess of the amount lawfully due
214.10from that person of any portion of the liability shown on the order, a claim for refund
214.11may be made by that person within 120 days after any payment of the liability if the
214.12payment is within 3-1/2 years after the date the order was issued. Claims for refund under
214.13this paragraph are limited to the amount paid during the 120-day period. Any amounts
214.14collected under paragraph (c) after a claim for refund is filed in order to satisfy the unpaid
214.15balance of the assessment that is the subject of the claim shall be returned if the claim is
214.16allowed. There is no claim for refund available under this paragraph if the assessment has
214.17previously been the subject of an administrative or Tax Court appeal, or a denied claim
214.18for refund. The taxpayer may contest denial of the refund as provided in the procedures
214.19governing claims for refunds under section 289A.50, subdivision 7.
214.20(c) If a person has been assessed under this section for an amount for a given period
214.21and the time for appeal has expired, regardless of whether an action contesting denial of a
214.22claim for refund has been filed under paragraph (b), or there has been a final determination
214.23that the person is liable, collection action is not stayed pursuant to section 270C.33,
214.24subdivision 5 , for that assessment or for subsequent assessments of additional amounts for
214.25the same person for the same period and tax type.
214.26EFFECTIVE DATE.This section is effective for orders issued after the date of
214.27final enactment.

214.28    Sec. 5. Minnesota Statutes 2008, section 275.07, is amended by adding a subdivision
214.29to read:
214.30    Subd. 6. Recertification due to unallotment. If a local government's December
214.31aid or credit payments under sections 477A.011 to 477A.014 and section 273.1384 are
214.32reduced due to unallotment under section 16A.152, the local government may recertify
214.33its levy under subdivision 1, by January 15 of the year in which the levy will be paid.
214.34The local government must report the recertified amount to the county auditor within
214.35two business days of January 15 or the levy will remain at the amount certified under
215.1subdivision 1. Notwithstanding subdivision 4, the county auditor shall report to the
215.2commissioner of revenue any recertified levies under this subdivision by January 30
215.3of the year in which the levy will be paid.
215.4EFFECTIVE DATE.This section is effective the day following final enactment.

215.5    Sec. 6. Minnesota Statutes 2008, section 275.70, subdivision 5, is amended to read:
215.6    Subd. 5. Special levies. "Special levies" means those portions of ad valorem taxes
215.7levied by a local governmental unit for the following purposes or in the following manner:
215.8    (1) to pay the costs of the principal and interest on bonded indebtedness or to
215.9reimburse for the amount of liquor store revenues used to pay the principal and interest
215.10due on municipal liquor store bonds in the year preceding the year for which the levy
215.11limit is calculated;
215.12    (2) to pay the costs of principal and interest on certificates of indebtedness issued for
215.13any corporate purpose except for the following:
215.14    (i) tax anticipation or aid anticipation certificates of indebtedness;
215.15    (ii) certificates of indebtedness issued under sections 298.28 and 298.282;
215.16    (iii) certificates of indebtedness used to fund current expenses or to pay the costs of
215.17extraordinary expenditures that result from a public emergency; or
215.18    (iv) certificates of indebtedness used to fund an insufficiency in tax receipts or
215.19an insufficiency in other revenue sources;
215.20    (3) to provide for the bonded indebtedness portion of payments made to another
215.21political subdivision of the state of Minnesota;
215.22    (4) to fund payments made to the Minnesota State Armory Building Commission
215.23under section 193.145, subdivision 2, to retire the principal and interest on armory
215.24construction bonds;
215.25    (5) property taxes approved by voters which are levied against the referendum
215.26market value as provided under section 275.61;
215.27    (6) to fund matching requirements needed to qualify for federal or state grants or
215.28programs to the extent that either (i) the matching requirement exceeds the matching
215.29requirement in calendar year 2001, or (ii) it is a new matching requirement that did not
215.30exist prior to 2002;
215.31    (7) to pay the expenses reasonably and necessarily incurred in preparing for or
215.32repairing the effects of natural disaster including the occurrence or threat of widespread
215.33or severe damage, injury, or loss of life or property resulting from natural causes, in
215.34accordance with standards formulated by the Emergency Services Division of the state
216.1Department of Public Safety, as allowed by the commissioner of revenue under section
216.2275.74, subdivision 2 ;
216.3    (8) pay amounts required to correct an error in the levy certified to the county
216.4auditor by a city or county in a levy year, but only to the extent that when added to the
216.5preceding year's levy it is not in excess of an applicable statutory, special law or charter
216.6limitation, or the limitation imposed on the governmental subdivision by sections 275.70
216.7to 275.74 in the preceding levy year;
216.8    (9) to pay an abatement under section 469.1815;
216.9    (10) to pay any costs attributable to increases in the employer contribution rates
216.10under chapter 353, or locally administered pension plans, that are effective after June
216.1130, 2001;
216.12    (11) to pay the operating or maintenance costs of a county jail as authorized in
216.13section 641.01 or 641.262, or of a correctional facility as defined in section 241.021,
216.14subdivision 1 , paragraph (f), to the extent that the county can demonstrate to the
216.15commissioner of revenue that the amount has been included in the county budget as
216.16a direct result of a rule, minimum requirement, minimum standard, or directive of the
216.17Department of Corrections, or to pay the operating or maintenance costs of a regional jail
216.18as authorized in section 641.262. For purposes of this clause, a district court order is
216.19not a rule, minimum requirement, minimum standard, or directive of the Department of
216.20Corrections. If the county utilizes this special levy, except to pay operating or maintenance
216.21costs of a new regional jail facility under sections 641.262 to 641.264 which will not
216.22replace an existing jail facility, any amount levied by the county in the previous levy year
216.23for the purposes specified under this clause and included in the county's previous year's
216.24levy limitation computed under section 275.71, shall be deducted from the levy limit
216.25base under section 275.71, subdivision 2, when determining the county's current year
216.26levy limitation. The county shall provide the necessary information to the commissioner
216.27of revenue for making this determination;
216.28    (12) to pay for operation of a lake improvement district, as authorized under section
216.29103B.555 . If the county utilizes this special levy, any amount levied by the county in the
216.30previous levy year for the purposes specified under this clause and included in the county's
216.31previous year's levy limitation computed under section 275.71 shall be deducted from
216.32the levy limit base under section 275.71, subdivision 2, when determining the county's
216.33current year levy limitation. The county shall provide the necessary information to the
216.34commissioner of revenue for making this determination;
216.35    (13) to repay a state or federal loan used to fund the direct or indirect required
216.36spending by the local government due to a state or federal transportation project or other
217.1state or federal capital project. This authority may only be used if the project is not a
217.2local government initiative;
217.3    (14) to pay for court administration costs as required under section 273.1398,
217.4subdivision 4b , less the (i) county's share of transferred fines and fees collected by the
217.5district courts in the county for calendar year 2001 and (ii) the aid amount certified to be
217.6paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes
217.7levied to pay for these costs in the year in which the court financing is transferred to the
217.8state, the amount under this clause is limited to the amount of aid the county is certified to
217.9receive under section 273.1398, subdivision 4a;
217.10    (15) to fund a police or firefighters relief association as required under section 69.77
217.11to the extent that the required amount exceeds the amount levied for this purpose in 2001;
217.12    (16) for purposes of a storm sewer improvement district under section 444.20;
217.13    (17) to pay for the maintenance and support of a city or county society for the
217.14prevention of cruelty to animals under section 343.11, but not to exceed in any year
217.15$4,800 or the sum of $1 per capita based on the county's or city's population as of the most
217.16recent federal census, whichever is greater. If the city or county uses this special levy, any
217.17amount levied by the city or county in the previous levy year for the purposes specified
217.18in this clause and included in the city's or county's previous year's levy limit computed
217.19under section 275.71, must be deducted from the levy limit base under section 275.71,
217.20subdivision 2 , in determining the city's or county's current year levy limit;
217.21    (18) for counties, to pay for the increase in their share of health and human service
217.22costs caused by reductions in federal health and human services grants effective after
217.23September 30, 2007;
217.24    (19) for a city, for the costs reasonably and necessarily incurred for securing,
217.25maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by
217.26the commissioner of revenue under section 275.74, subdivision 2. A city must have either
217.27(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in
217.28the city or in a zip code area of the city that is at least 50 percent higher than the average
217.29foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2,
217.30to use this special levy. For purposes of this paragraph, "foreclosure rate" means the
217.31number of foreclosures, as indicated by sheriff sales records, divided by the number of
217.32households in the city in 2007;
217.33    (20) for a city, for the unreimbursed costs of redeployed traffic control agents and
217.34lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified
217.35to the Federal Highway Administration;
218.1    (21) to pay costs attributable to wages and benefits for sheriff, police, and fire
218.2personnel. If a local governmental unit did not use this special levy in the previous year its
218.3levy limit base under section 275.71 shall be reduced by the amount equal to the amount it
218.4levied for the purposes specified in this clause in the previous year; and
218.5    (22) an amount equal to any reductions in the certified aids or credits payable
218.6under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment under
218.7section 16A.152 in any year, reductions in aids under chapter 477A, that are enacted by
218.8the legislature in the year in which the aid is paid, and reductions to credits under section
218.9273.1384 enacted by the legislature in any year. The amount of the levy allowed under
218.10this clause is equal to the amount unallotted or reduced in the calendar year in which the
218.11tax is levied unless the unallotment amount is not known by September 1 of the levy year,
218.12and the local government has not adjusted its levy under section 275.065, subdivision 6,
218.13or section 275.07, subdivision 6, in which case the unallotment amount may be levied in
218.14the following year.;
218.15(23) to pay for the difference between one-half of the costs of confining sex offenders
218.16undergoing the civil commitment process and any state payments for this purpose pursuant
218.17to section 253B.185, subdivision 5; and
218.18(24) for a county to pay the costs of the first year of maintaining and operating a new
218.19facility or new expansion, either of which contains courts, corrections, dispatch, criminal
218.20investigation labs, or other public safety facilities and for which all or a portion of the
218.21funding for the site acquisition, building design, site preparation, construction, and related
218.22equipment was issued or authorized prior to the imposition of levy limits in 2008. The
218.23levy limit base shall then be increased by an amount equal to the new facility's first full
218.24year's operating costs as described in this clause.
218.25EFFECTIVE DATE.This section is effective for levies certified in calendar year
218.262009 and thereafter, payable in 2010 and thereafter.

218.27    Sec. 7. Minnesota Statutes 2008, section 275.71, subdivision 4, is amended to read:
218.28    Subd. 4. Adjusted levy limit base. For taxes levied in 2008 through 2009 2010,
218.29the adjusted levy limit base is equal to the levy limit base computed under subdivision 2
218.30or section 275.72, multiplied by:
218.31    (1) one plus the lesser of 3.9 percent or the percentage growth in the implicit price
218.32deflator, but not less than two percent;
218.33    (2) one plus a percentage equal to 50 percent of the percentage increase in the number
218.34of households, if any, for the most recent 12-month period for which data is available; and
219.1    (3) one plus a percentage equal to 50 percent of the percentage increase in the
219.2taxable market value of the jurisdiction due to new construction of class 3 property, as
219.3defined in section 273.13, subdivision 4, except for state-assessed utility and railroad
219.4property, for the most recent year for which data is available.
219.5EFFECTIVE DATE.This section is effective the day following final enactment.

219.6    Sec. 8. Minnesota Statutes 2008, section 475.51, subdivision 4, is amended to read:
219.7    Subd. 4. Net debt. "Net debt" means the amount remaining after deducting from its
219.8gross debt the amount of current revenues which are applicable within the current fiscal
219.9year to the payment of any debt and the aggregate of the principal of the following:
219.10    (1) Obligations issued for improvements which are payable wholly or partly from the
219.11proceeds of special assessments levied upon property specially benefited thereby, including
219.12those which are general obligations of the municipality issuing them, if the municipality is
219.13entitled to reimbursement in whole or in part from the proceeds of the special assessments.
219.14    (2) Warrants or orders having no definite or fixed maturity.
219.15    (3) Obligations payable wholly from the income from revenue producing
219.16conveniences.
219.17    (4) Obligations issued to create or maintain a permanent improvement revolving
219.18fund.
219.19    (5) Obligations issued for the acquisition, and betterment of public waterworks
219.20systems, and public lighting, heating or power systems, and of any combination thereof or
219.21for any other public convenience from which a revenue is or may be derived.
219.22    (6) Debt service loans and capital loans made to a school district under the provisions
219.23of sections 126C.68 and 126C.69.
219.24    (7) Amount of all money and the face value of all securities held as a debt service
219.25fund for the extinguishment of obligations other than those deductible under this
219.26subdivision.
219.27    (8) Obligations to repay loans made under section 216C.37.
219.28    (9) Obligations to repay loans made from money received from litigation or
219.29settlement of alleged violations of federal petroleum pricing regulations.
219.30    (10) Obligations issued to pay pension fund or other postemployment benefit
219.31liabilities under section 475.52, subdivision 6, or any charter authority.
219.32    (11) Obligations issued to pay judgments against the municipality under section
219.33475.52, subdivision 6 , or any charter authority.
219.34    (12) All other obligations which under the provisions of law authorizing their
219.35issuance are not to be included in computing the net debt of the municipality.
220.1EFFECTIVE DATE.This section is effective for obligations sold after August
220.21, 2009.

220.3    Sec. 9. Minnesota Statutes 2008, section 475.52, subdivision 6, is amended to read:
220.4    Subd. 6. Certain purposes. Any municipality may issue bonds for paying
220.5judgments against it; for refunding outstanding bonds; for funding floating indebtedness;
220.6for funding actuarial liabilities to pay postemployment benefits to employees or officers
220.7after their termination of service; or for funding all or part of the municipality's current
220.8and future unfunded liability for a pension or retirement fund or plan referred to in
220.9section 356.20, subdivision 2, as those liabilities are most recently computed pursuant
220.10to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or
220.11relief association referred to in section 69.77 or chapter 422A must consent and must
220.12be a party to any contract made under this section with respect to the fund held by it
220.13for the benefit of and in trust for its members. For purposes of this section, the term
220.14"postemployment benefits" means benefits giving rise to a liability under Statement No.
220.1545 of the Governmental Accounting Standards Board.
220.16EFFECTIVE DATE.This section is effective for obligations sold after August
220.171, 2009.

220.18    Sec. 10. Minnesota Statutes 2008, section 475.58, subdivision 1, is amended to read:
220.19    Subdivision 1. Approval by electors; exceptions. Obligations authorized by law or
220.20charter may be issued by any municipality upon obtaining the approval of a majority of
220.21the electors voting on the question of issuing the obligations, but an election shall not be
220.22required to authorize obligations issued:
220.23    (1) to pay any unpaid judgment against the municipality;
220.24    (2) for refunding obligations;
220.25    (3) for an improvement or improvement program, which obligation is payable wholly
220.26or partly from the proceeds of special assessments levied upon property specially benefited
220.27by the improvement or by an improvement within the improvement program, or from tax
220.28increments, as defined in section 469.174, subdivision 25, including obligations which are
220.29the general obligations of the municipality, if the municipality is entitled to reimbursement
220.30in whole or in part from the proceeds of such special assessments or tax increments and
220.31not less than 20 percent of the cost of the improvement or the improvement program is to
220.32be assessed against benefited property or is to be paid from the proceeds of federal grant
220.33funds or a combination thereof, or is estimated to be received from tax increments;
220.34    (4) payable wholly from the income of revenue producing conveniences;
221.1    (5) under the provisions of a home rule charter which permits the issuance of
221.2obligations of the municipality without election;
221.3    (6) under the provisions of a law which permits the issuance of obligations of a
221.4municipality without an election;
221.5    (7) to fund pension or retirement fund or postemployment benefit liabilities pursuant
221.6to section 475.52, subdivision 6;
221.7    (8) under a capital improvement plan under section 373.40; and
221.8    (9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if
221.9the proceeds of the bonds are not used for a purpose prohibited under section 469.176,
221.10subdivision 4g , paragraph (b).
221.11EFFECTIVE DATE.This section is effective for obligations sold after August
221.121, 2009.

221.13    Sec. 11. [475.755] EMERGENCY DEBT CERTIFICATES.
221.14(a) If at any time during a fiscal year the receipts of a local government are
221.15reasonably expected to be reduced below the amount provided in the local government's
221.16budget when the final property tax levy to be collected during the fiscal year was certified
221.17and the receipts are insufficient to meet the expenses incurred or to be incurred during the
221.18fiscal year, the governing body of the local government may authorize and sell certificates
221.19of indebtedness to mature within two years or less from the end of the fiscal year in which
221.20the certificates are issued. The maximum principal amount of the certificates that it may
221.21issue in a fiscal year is limited to the expected reduction in receipts plus the cost of
221.22issuance. The certificates may be issued in the manner and on the terms the governing
221.23body determines by resolution.
221.24(b) The governing body of the local government shall levy taxes for the payment of
221.25principal and interest on the certificates in accordance with section 475.61.
221.26(c) The certificates are not to be included in the net debt of the issuing local
221.27government.
221.28    (d) To the extent that a local government issues certificates under this section to fund
221.29an unallotment or other reduction in its state aid, the local government may not use a
221.30special levy for the aid reduction under section 275.70, subdivision 5, clause (22), or a
221.31similar or successor provision. This provision does not affect the status of the levy under
221.32section 475.61 to pay the certificates as a levy that is not subject to levy limits.
221.33(e) For purposes of this section, the following terms have the meanings given:
221.34(1) "Local government" means a statutory or home rule charter city, a town, or
221.35a county.
222.1(2) "Receipts" includes the following amounts scheduled to be received by the
222.2local government for the fiscal year from:
222.3(i) taxes;
222.4(ii) aid payments previously certified by the state to be paid to the local government;
222.5(iii) state reimbursement payments for property tax credits; and
222.6(iv) any other source.
222.7EFFECTIVE DATE.This section is effective the day following final enactment.

222.8    Sec. 12. BUDGET RESERVE.
222.9In fiscal year 2010, the commissioner of finance shall transfer $250,000,000 to the
222.10budget reserve account in the general fund. The commissioner shall make this transfer
222.11from general fund revenues resulting from legislation enacted in the 2009 legislative
222.12session. The amount necessary for this purpose is appropriated from the general fund.

222.13    Sec. 13. APPROPRIATIONS.
222.14    Subdivision 1. Bovine tuberculosis testing grants. $360,000 in fiscal year
222.152010 and $360,000 in fiscal year 2011 are appropriated from the general fund to the
222.16commissioner of agriculture to make bovine tuberculosis testing grants as provided in
222.17Minnesota Statutes, section 17.1195.
222.18    Subd. 2. Bovine tuberculosis; split state status grants. $400,000 in fiscal year
222.192010 and $400,000 in fiscal year 2011 are appropriated from the general fund to the
222.20commissioner of agriculture to make bovine tuberculosis split state status grants as
222.21provided in Minnesota Statutes, section 17.1195.
222.22    Subd. 3. Basic sliding fee child care. $5,000,000 in fiscal year 2010 and $5,000,000
222.23in fiscal year 2011 are appropriated from the general fund to the commissioner of human
222.24services for basic sliding fee child care under Minnesota Statutes, section 119B.03. This
222.25appropriation is added to base level funding and is in addition to any other appropriation
222.26for the same purpose. Notwithstanding any other law to the contrary, this appropriation
222.27may only be used to fund child care assistance."
222.28Delete the title and insert:
222.30relating to the financing and operation of state and local government; making
222.31policy, technical, administrative, enforcement, collection, refund, clarifying, and
222.32other changes to income, franchise, property, sales and use, estate, gift, cigarette,
222.33tobacco, liquor, motor vehicle, gross receipts, tax increment financing and
222.34other taxes and tax-related provisions; requiring certain additions; conforming
222.35to federal section 179 expensing allowances; disallowing certain subtractions;
222.36allowing certain nonrefundable credits; allowing a refundable Minnesota child
222.37credit; repealing various credits; conforming to certain federal tax provisions;
222.38providing for the taxation of certain corporations in tax havens; modifying
223.1income tax rates; expanding and increasing credit for research activities;
223.2accelerating single sales apportionment; modifying minimum fees; allowing
223.3county local sales tax; eliminating certain existing local sales taxes; adjusting
223.4county program aid; modifying levy limits; making changes to residential
223.5homestead market value credit; providing flexibility and mandate reduction
223.6provisions; making changes to various property tax and local government
223.7aid-related provisions; providing temporary suspension of new or increased
223.8maintenance of effort and matching fund requirements; modifying county support
223.9of libraries; establishing the Council on Local Results and Innovation; providing
223.10property tax system benchmarks, critical indicators, and principles; establishing
223.11a property tax work group; creating the Legislative Commission on Mandate
223.12Reform; making changes to certain administrative procedures; modifying truth
223.13in taxation provisions; providing clarification for eligibility for property tax
223.14exemption for institutions of purely public charity; making changes to property
223.15tax refund, sustainable forest incentive, and senior citizen property tax deferral
223.16programs; providing property tax exemptions; providing a property valuation
223.17reduction for certain land constituting a riparian buffer; providing a partial
223.18valuation exclusion for disaster damaged homes; extending deadline for special
223.19service district and housing improvement districts; requiring a fiscal disparity
223.20study; extending emergency medical service special taxing district; providing
223.21emergency debt certificates; providing and modifying local taxes; expanding
223.22county authorization to abate certain improvements; providing municipal street
223.23improvement districts; establishing a seasonal recreational property tax deferral
223.24program; expanding sales and use tax base; defining solicitor for purposes of
223.25nexus; providing a bovine tuberculosis testing grant; modifying tax preparation
223.26services law; modifying local lodging tax; eliminating authority of municipalities
223.27to issue bonds for certain other postemployment benefits; allowing use of
223.28increment to offset state aid reductions; allowing additional authority to spend
223.29increments for housing replacement district plans; modifying and authorizing
223.30certain tax increment financing districts; providing equitable funding health and
223.31human services reform; modifying JOBZ provisions; repealing international
223.32economic development and biotechnology and health science industry zones;
223.33modifying basic sliding fee program funding; providing appointments; requiring
223.34reports; appropriating money;amending Minnesota Statutes 2008, sections
223.353.842, subdivision 4a; 3.843; 16C.28, subdivision 1a; 40A.09; 84.82, subdivision
223.3610; 84.922, subdivision 11; 86B.401, subdivision 12; 123B.10, subdivision
223.371; 134.34, subdivisions 1, 4; 270C.12, by adding a subdivision; 270C.445;
223.38270C.56, subdivision 3; 272.02, subdivision 7, by adding subdivisions; 272.029,
223.39subdivision 6; 273.111, by adding a subdivision; 273.1231, subdivision 1;
223.40273.1232, subdivision 1; 273.124, subdivision 1; 273.13, subdivisions 25, 34;
223.41273.1384, subdivisions 1, 4, by adding a subdivision; 273.1393; 275.025,
223.42subdivisions 1, 2; 275.065, subdivisions 1, 1a, 1c, 3, 6; 275.07, subdivisions 1,
223.434, by adding a subdivision; 275.08, subdivision 1d; 275.70, subdivisions 3, 5;
223.44275.71, subdivisions 2, 4, 5; 276.04, subdivision 2; 279.10; 282.08; 289A.02,
223.45subdivision 7, as amended; 289A.11, subdivision 1; 289A.20, subdivision
223.464; 289A.31, subdivision 5; 290.01, subdivisions 5, 19, as amended, 19a, as
223.47amended, 19b, 19c, as amended, 19d, as amended, 29, 31, as amended, by
223.48adding subdivisions; 290.014, subdivision 2; 290.06, subdivisions 2c, 2d, by
223.49adding subdivisions; 290.0671, subdivision 1; 290.068, subdivisions 1, 3, 4;
223.50290.091, subdivision 2; 290.0921, subdivision 3; 290.0922, subdivisions 1, 3,
223.51by adding a subdivision; 290.17, subdivisions 2, 4; 290.191, subdivisions 2, 3;
223.52290A.03, subdivisions 3, as amended, 15, as amended; 290A.04, subdivision 2;
223.53290B.03, subdivision 1; 290B.04, subdivisions 3, 4; 290B.05, subdivision 1;
223.54290C.07; 291.005, subdivision 1, as amended; 291.03, subdivision 1; 295.75,
223.55subdivision 2; 297A.61, subdivisions 3, 4, 5, 6, 10, 14a, 17a, 21, 38, by adding
223.56subdivisions; 297A.62, by adding a subdivision; 297A.63; 297A.64, subdivision
223.572; 297A.66, subdivision 1, by adding a subdivision; 297A.67, subdivisions
223.5815, 23; 297A.815, subdivision 3; 297A.83, subdivision 3; 297A.94; 297A.99,
224.1subdivisions 1, 6; 297B.02, subdivision 1; 297F.01, subdivision 19, by adding a
224.2subdivision; 297F.05, subdivisions 1, 3, 4, by adding a subdivision; 297G.03,
224.3subdivision 1; 297G.04; 306.243, by adding a subdivision; 344.18; 365.28;
224.4375.194, subdivision 5; 383A.75, subdivision 3; 428A.101; 428A.21; 429.011,
224.5subdivision 2a; 429.021, subdivision 1; 429.041, subdivisions 1, 2; 446A.086,
224.6subdivision 8; 465.719, subdivision 9; 469.015; 469.174, subdivision 22;
224.7469.175, subdivisions 1, 6; 469.176, subdivisions 3, 6, by adding a subdivision;
224.8469.1763, subdivisions 2, 3; 469.178, subdivision 7; 469.315; 469.3192; 473.13,
224.9subdivision 1; 473H.04, by adding a subdivision; 473H.05, subdivision 1;
224.10475.51, subdivision 4; 475.52, subdivision 6; 475.58, subdivision 1; 477A.011,
224.11subdivision 36; 477A.0124, by adding a subdivision; 477A.013, subdivision 9,
224.12by adding a subdivision; 477A.03, subdivisions 2a, 2b; 477A.12, subdivision 1;
224.13477A.14, subdivision 1; 641.12, subdivision 1; Laws 1986, chapter 400, section
224.1444, as amended; Laws 1991, chapter 291, article 8, section 27, subdivision 3,
224.15as amended; Laws 1993, chapter 375, article 9, section 46, subdivision 2, as
224.16amended, by adding a subdivision; Laws 1995, chapter 264, article 5, sections
224.1744, subdivision 4, as amended; 45, subdivision 1, as amended; Laws 1996,
224.18chapter 471, article 2, section 30; Laws 1998, chapter 389, article 8, section 37,
224.19subdivision 1; Laws 2001, First Special Session chapter 5, article 3, section 8, as
224.20amended; Laws 2002, chapter 377, article 3, section 25; Laws 2006, chapter 259,
224.21article 3, section 12, subdivision 3; Laws 2008, chapter 366, article 5, section 34;
224.22article 6, sections 9; 10; article 7, section 16, subdivision 3; proposing coding for
224.23new law in Minnesota Statutes, chapters 3; 6; 14; 17; 256E; 270C; 273; 275; 290;
224.24292; 297A; 435; 471; 475; 477A; proposing coding for new law as Minnesota
224.25Statutes, chapter 290D; repealing Minnesota Statutes 2008, sections 245.4835;
224.26245.4932, subdivision 1; 246.54, subdivisions 1, 2; 252.275, subdivision 3;
224.27253B.045, subdivision 2; 254B.04, subdivision 1; 256.82, subdivision 2;
224.28256.976; 256B.05, subdivision 1; 256B.0625, subdivisions 20, 20a; 256B.0945,
224.29subdivisions 1, 2, 3, 4; 256B.19, subdivision 1; 256D.03; 256D.053, subdivision
224.303; 256E.12, subdivision 3; 256F.10, subdivision 7; 256F.13, subdivision 1;
224.31256I.04; 256I.08; 256J.09, subdivisions 1, 2, 3; 256L.15, subdivision 4; 272.02,
224.32subdivision 83; 273.113; 275.065, subdivisions 5a, 6b, 6c, 8, 9, 10; 289A.50,
224.33subdivision 10; 290.01, subdivision 6b; 290.06, subdivisions 24, 28, 30, 31, 32,
224.3433, 34; 290.067, subdivisions 1, 2, 2a, 2b, 3, 4; 290.0672; 290.0674; 290.0679;
224.35290.0802; 290.0921, subdivision 7; 290.191, subdivision 4; 290.491; 297A.61,
224.36subdivision 45; 297A.68, subdivisions 38, 41; 297A.815, subdivision 3; 469.316;
224.37469.317; 469.321; 469.3215; 469.322; 469.323; 469.324; 469.325; 469.326;
224.38469.327; 469.328; 469.329; 469.330; 469.331; 469.332; 469.333; 469.334;
224.39469.335; 469.336; 469.337; 469.338; 469.339; 469.340; 469.341; 477A.0124,
224.40subdivisions 3, 4, 5; 477A.03, subdivision 5; Laws 2008, chapter 366, article
224.417, section 18; Laws 2009, chapter 3, section 1; Laws 2009, chapter 12, article
224.421, section 8."