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HF 3149

3rd Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

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A bill for an act
relating to the financing and operation of state and local government; making
policy, technical, administrative, enforcement, collection, refund, clarifying,
and other changes to income, franchise, property, sales and use, minerals,
wheelage, mortgage, deed, and estate taxes, and other taxes and tax-related
provisions; providing for homestead credit state refund; providing for aids to
local governments; providing city foreclosure and deed grants; changing and
providing property tax exemptions and credits; modifying job opportunity
building zone program; modifying green acre eligibility requirements; providing
aggregate resource preservation property tax law; providing seasonal recreational
property tax deferral program; modifying eligibility for senior citizen tax
deferral program; modifying transit taxing district; modifying levies, property
valuation procedures, homestead provisions, property tax classes, and class rates;
requiring levy limits under certain contingencies; providing for and modifying
sales tax exemptions; exempting two-wheel, motorized vehicles from wheelage
tax; abolishing the political contribution refund; providing exclusion from
income for certain veterans' retirement benefits; providing credits; providing
for additional financing of metropolitan area transit and paratransit capital
expenditures; authorizing issuance of certain obligations; modifying provision
governing bonding for county libraries; changing and authorizing powers, duties,
and requirements of local governments and authorities and state departments
or agencies; modifying, extending, and authorizing certain tax increment
financing districts; authorizing and modifying local sales taxes; prohibiting
the imposition of new local sales taxes; providing federal updates; changing
accelerated sales tax; creating Surplus Lines Association of Minnesota; creating
Iron Range revitalization account; changing provisions related to data practices
and debt collection; requiring studies; providing appointments; appropriating
money;amending Minnesota Statutes 2006, sections 13.51, subdivision 3;
13.585, subdivision 5; 16D.02, subdivisions 3, 6; 16D.04, subdivision 2, as
amended; 60A.196; 163.051, subdivision 1; 168.012, subdivision 1, by adding a
subdivision; 168.013, subdivision 1f; 168A.03, subdivision 1; 169.01, by adding
a subdivision; 169.781, subdivision 1; 216B.1612, by adding a subdivision;
216B.1646; 270A.03, subdivision 7; 270A.08, subdivision 1; 270B.15; 270C.33,
subdivision 5; 270C.56, subdivisions 1, as amended, 3; 270C.85, subdivision 2;
272.02, subdivisions 13, 20, 21, 27, 31, 38, 49, by adding subdivisions; 272.03,
subdivision 3, by adding a subdivision; 273.11, subdivisions 1, 1a, 8, 14a, 14b,
by adding subdivisions; 273.111, subdivisions 3, as amended, 4, 8, 9, 11, 11a,
by adding a subdivision; 273.121, as amended; 273.124, subdivisions 1, 6, 13,
as amended, 21; 273.128, subdivision 1, as amended; 273.13, subdivisions 23,
as amended, 24, 25, as amended, 33, 34, as added; 273.1384, subdivisions 1, 2;
274.01, subdivision 3; 274.014, subdivision 3; 274.14; 275.025, subdivisions
1, 2; 275.065, subdivisions 1c, 6, 8, 9, 10, by adding subdivisions; 275.70,
by adding a subdivision; 275.71; 276.04, subdivision 2, as amended; 282.08;
287.20, subdivisions 3a, 9, by adding a subdivision; 289A.12, by adding a
subdivision; 289A.18, subdivision 1, as amended; 289A.19, subdivision 2, by
adding a subdivision; 289A.20, subdivision 4, as amended; 289A.40, subdivision
1; 289A.50, subdivision 1; 289A.55, by adding a subdivision; 289A.60,
subdivision 15, as amended, by adding a subdivision; 290.01, subdivisions 6, 6b,
19a, as amended, 29, by adding a subdivision; 290.06, by adding subdivisions;
290.068, subdivisions 1, 3, by adding subdivisions; 290.07, subdivision 1;
290.091, subdivision 2, as amended; 290.21, subdivision 4; 290.92, subdivisions
1, 26, 31, as added; 290A.03, subdivision 13; 290A.04, subdivisions 2h, 3, 4,
by adding subdivisions; 290B.03, subdivision 1; 290B.04, subdivisions 1, 3, 4;
290B.05, subdivision 1; 290B.07; 291.03, subdivision 1; 295.50, subdivision 4;
295.52, subdivision 4, as amended; 295.53, subdivision 4a; 296A.07, subdivision
4; 296A.08, subdivision 3; 296A.16, subdivision 2; 297A.61, subdivisions 22,
29; 297A.665, as amended; 297A.67, subdivision 7, as amended; 297A.70,
subdivisions 2, 8; 297A.71, subdivision 23, by adding subdivisions; 297A.75;
297A.99, subdivision 1, as amended; 297A.995, subdivision 10, by adding
subdivisions; 297B.01, subdivision 7, by adding a subdivision; 297B.03;
297F.01, subdivision 8; 297F.09, subdivision 10, as amended; 297F.21,
subdivision 1; 297G.01, subdivision 9; 297G.09, subdivision 9, as amended;
297H.09; 297I.05, subdivision 12; 298.24, subdivision 1, as amended; 298.75,
subdivisions 1, 2, 6, 7; 365A.095; 383A.80, subdivision 4; 383A.81, subdivisions
1, 2; 383B.80, subdivision 4; 383E.20; 429.101, subdivision 1; 469.033,
subdivision 6; 469.040, subdivision 4; 469.174, subdivision 10b; 469.177,
subdivision 1c, by adding a subdivision; 469.1813, subdivision 8; 469.312, by
adding a subdivision; 469.319; 469.3201; 473.39, by adding a subdivision;
473.446, subdivisions 2, 8; 477A.011, subdivisions 34, 36, as amended, by
adding subdivisions; 477A.0124, subdivision 5; 477A.013, subdivisions 1, 8,
as amended, 9, as amended; 477A.03; Minnesota Statutes 2007 Supplement,
sections 115A.1314, subdivision 2; 268.19, subdivision 1; 273.1231, subdivision
7, by adding a subdivision; 273.1232, subdivision 1; 273.1233, subdivisions 1,
3; 273.1234; 273.1235, subdivisions 1, 3; 273.124, subdivision 14; 273.1393;
275.065, subdivisions 1, 1a, 3; 290.01, subdivision 19b, as amended; 298.227;
Laws 1991, chapter 291, article 8, section 27, subdivisions 3, as amended, 4, as
amended; Laws 1995, chapter 264, article 5, section 46, subdivision 2; Laws
2003, chapter 127, article 10, section 31, subdivision 1; Laws 2006, chapter 259,
article 10, section 14, subdivision 1; Laws 2008, chapter 154, article 2, section
11; article 3, section 7; article 9, sections 23; 24; proposing coding for new law
in Minnesota Statutes, chapters 60A; 116J; 169; 216F; 273; 298; 373; 383C;
383D; 383E; 469; proposing coding for new law as Minnesota Statutes, chapter
290D; repealing Minnesota Statutes 2006, sections 10A.322, subdivision 4;
273.11, subdivision 14; 273.111, subdivision 6; 290.06, subdivision 23; 290.191,
subdivision 4; 290A.04, subdivisions 2, 2b; 473.4461; 477A.014, subdivision 5;
Minnesota Statutes 2007 Supplement, section 477A.014, subdivision 4; Laws
2005, First Special Session chapter 3, article 5, section 24; Minnesota Rules,
parts 8031.0100, subpart 3; 8093.2100.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

HOMESTEAD CREDIT STATE REFUND

Section 1.

Minnesota Statutes 2006, section 273.1384, subdivision 1, is amended to
read:


Subdivision 1.

Residential homestead market value credit.

(a) Each county
auditor shall determine a homestead credit for each class 1a, 1b, and 2a homestead
property within the county equal to 0.4 percent of the first $76,000 of market value
of the property minus .09 percent of the market value in excess of $76,000. The credit
amount may not be less than zero. In the case of an agricultural or resort homestead, only
the market value of the house, garage, and immediately surrounding one acre of land is
eligible in determining the property's homestead credit. In the case of a property that
is classified as part homestead and part nonhomestead, (i) the credit shall apply only
to the homestead portion of the property, but (ii) if a portion of a property is classified
as nonhomestead solely because not all the owners occupy the property, not all the
owners have qualifying relatives occupying the property, or solely because not all the
spouses of owners occupy the property, the credit amount shall be initially computed as
if that nonhomestead portion were also in the homestead class and then prorated to the
owner-occupant's percentage of ownership. For the purpose of this section, when an
owner-occupant's spouse does not occupy the property, the percentage of ownership for
the owner-occupant spouse is one-half of the couple's ownership percentage.

(b) For property taxes payable in 2009 and thereafter, the county auditor shall
determine the amount of the homestead credit under paragraph (a) and this paragraph.
The county auditor shall report the amount of the credit to the taxpayer on the property
tax statement or in another manner, as authorized by the commissioner of revenue. The
amount of the credit allowed for the property taxes payable year is to be computed as the
following percentage of the credit amount under paragraph (a):

(1) for property taxes payable in 2009, 100 percent; and

(2) for property taxes payable in 2010 and thereafter, 60 percent.

EFFECTIVE DATE.

This section is effective beginning for property taxes payable
in 2009.

Sec. 2.

Minnesota Statutes 2006, section 276.04, subdivision 2, as amended by Laws
2008, chapter 154, article 2, section 19, is amended to read:


Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the
printing of the tax statements. The commissioner of revenue shall prescribe the form
of the property tax statement and its contents. The statement must contain a tabulated
statement of the dollar amount due to each taxing authority and the amount of the state
tax from the parcel of real property for which a particular tax statement is prepared. The
dollar amounts attributable to the county, the state tax, the voter approved school tax, the
other local school tax, the township or municipality, and the total of the metropolitan
special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must
be separately stated. The amounts due all other special taxing districts, if any, may be
aggregated except that any levies made by the regional rail authorities in the county of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
shall be listed on a separate line directly under the appropriate county's levy. If the county
levy under this paragraph includes an amount for a lake improvement district as defined
under sections 103B.501 to 103B.581, the amount attributable for that purpose must be
separately stated from the remaining county levy amount. In the case of Ramsey County,
if the county levy under this paragraph includes an amount for public library service
under section 134.07, the amount attributable for that purpose may be separated from the
remaining county levy amount. The amount of the tax on homesteads qualifying under the
senior citizens' property tax deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax amount. The amount of the
tax on contamination value imposed under sections 270.91 to 270.98, if any, must also
be separately stated. The dollar amounts, including the dollar amount of any special
assessments, may be rounded to the nearest even whole dollar. For purposes of this section
whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar.
The amount of market value excluded under section 273.11, subdivision 16, if any, must
also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's taxable market value after reductions under section 273.11,
subdivisions 1a and 16
;

(3) the property's gross tax, before credits; any items required by the commissioner
of revenue under section 273.1384, subdivision 1, paragraph (b); and

(4) for homestead residential and agricultural properties, the credits under section
273.1384;

(5) any credits received under sections 273.119; 273.123; 273.135; 273.1391;
273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received
under section 273.135 must be separately stated and identified as "taconite tax relief"; and

(6) (4) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 3.

Minnesota Statutes 2006, section 290.01, subdivision 19a, as amended by Laws
2008, chapter 154, article 3, section 2, and Laws 2008, chapter 154, article 4, section 3,
is amended to read:


Subd. 19a.

Additions to federal taxable income.

For individuals, estates, and
trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political
or governmental subdivision, municipality, or governmental agency or instrumentality
of any state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends that are paid by the regulated
investment company as defined in section 851(a) of the Internal Revenue Code, or the
fund of the regulated investment company as defined in section 851(g) of the Internal
Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
government described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;

(2) the amount of (i) income or sales and use taxes paid or accrued within the
taxable year under this chapter and the amount of taxes based on net income paid or sales
and use taxes paid to any other state or to any province or territory of Canada, and (ii)
the amount of real and personal property taxes paid or accrued within the taxable year,
to the extent allowed as a deduction under section 63(d) of the Internal Revenue Code,
but the addition may not be more than the amount by which the itemized deductions as
allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the
standard deduction as defined in section 63(c) of the Internal Revenue Code. For the
purpose of this paragraph, the disallowance of itemized deductions under section 68 of the
Internal Revenue Code of 1986, income or sales and use tax is the last itemized deduction
disallowed, real property tax is the second to last itemized deduction disallowed, and
personal property tax is the third to last itemized deduction disallowed
;

(3) the capital gain amount of a lump sum distribution to which the special tax under
section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income paid to any other state or any province or territory
of Canada, to the extent allowed as a deduction in determining federal adjusted gross
income. For the purpose of this paragraph, income taxes do not include the taxes imposed
by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;

(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
other than expenses or interest used in computing net interest income for the subtraction
allowed under subdivision 19b, clause (1);

(6) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

(7) 80 percent of the depreciation deduction allowed under section 168(k) of the
Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
in the taxable year generates a deduction for depreciation under section 168(k) and the
activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section 168(k) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k) is allowed;

(8) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

(9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(10) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;

(11) the amount of expenses disallowed under section 290.10, subdivision 2;

(12) for taxable years beginning after December 31, 2006, and before January 1,
2008, the amount deducted for qualified tuition and related expenses under section 222 of
the Internal Revenue Code, to the extent deducted from gross income; and

(13) for taxable years beginning after December 31, 2006, and before January 1,
2008, the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
from gross income.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2008.

Sec. 4.

Minnesota Statutes 2006, section 290A.03, subdivision 13, is amended to read:


Subd. 13.

Property taxes payable.

"Property taxes payable" means the property
tax exclusive of special assessments, penalties, and interest payable on a claimant's
homestead after deductions made under sections 273.135, 273.1384, 273.1391, 273.42,
subdivision 2
, and any other state paid property tax credits in any calendar year, and
after any refund claimed and allowable under section 290A.04, subdivision 2h, that is
first payable in the year that the property tax is payable. Beginning for property taxes
payable in 2009, the amount of the credit under section 273.1384, subdivision 1, must
not be deducted in computing property taxes payable.
In the case of a claimant who
makes ground lease payments, "property taxes payable" includes the amount of the
payments directly attributable to the property taxes assessed against the parcel on which
the house is located. No apportionment or reduction of the "property taxes payable" shall
be required for the use of a portion of the claimant's homestead for a business purpose if
the claimant does not deduct any business depreciation expenses for the use of a portion
of the homestead in the determination of federal adjusted gross income. For homesteads
which are manufactured homes as defined in section 273.125, subdivision 8, and for
homesteads which are park trailers taxed as manufactured homes under section 168.012,
subdivision 9
, "property taxes payable" shall also include 19 percent of the gross rent paid
in the preceding year for the site on which the homestead is located. When a homestead
is owned by two or more persons as joint tenants or tenants in common, such tenants
shall determine between them which tenant may claim the property taxes payable on the
homestead. If they are unable to agree, the matter shall be referred to the commissioner of
revenue whose decision shall be final. Property taxes are considered payable in the year
prescribed by law for payment of the taxes.

In the case of a claim relating to "property taxes payable," the claimant must have
owned and occupied the homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead property pursuant to section
273.124, on or before December 15 of the assessment year to which the "property taxes
payable" relate; or (ii) the claimant must provide documentation from the local assessor
that application for homestead classification has been made on or before December 15
of the year in which the "property taxes payable" were payable and that the assessor has
approved the application.

EFFECTIVE DATE.

This section is effective beginning for refund claims based on
property taxes payable in 2009.

Sec. 5.

Minnesota Statutes 2006, section 290A.04, subdivision 2h, is amended to read:


Subd. 2h.

Additional refund.

(a) If the gross property taxes payable on a homestead
increase more than 12 percent over the property taxes payable in the prior year on the same
property that is owned and occupied by the same owner on January 2 of both years, and the
amount of that increase is $100 or more, a claimant who is a homeowner shall be allowed
an additional refund equal to 60 percent of the amount of the increase over the greater of 12
percent of the prior year's property taxes payable or $100. This subdivision shall not apply
to any increase in the gross property taxes payable attributable to improvements made to
the homestead after the assessment date for the prior year's taxes. This subdivision shall
not apply to any increase in the gross property taxes payable attributable to the termination
of valuation exclusions under section 273.11, subdivision 16, or to the reduction in the
homestead market value credit under section 273.1384, subdivision 1, paragraph (b)
.

The maximum refund allowed under this subdivision is $1,000.

(b) For purposes of this subdivision "gross property taxes payable" means property
taxes payable determined without regard to the refund allowed under this subdivision.

(c) In addition to the other proofs required by this chapter, each claimant under
this subdivision shall file with the property tax refund return a copy of the property tax
statement for taxes payable in the preceding year or other documents required by the
commissioner.

(d) Upon request, the appropriate county official shall make available the names and
addresses of the property taxpayers who may be eligible for the additional property tax
refund under this section. The information shall be provided on a magnetic computer
disk. The county may recover its costs by charging the person requesting the information
the reasonable cost for preparing the data. The information may not be used for any
purpose other than for notifying the homeowner of potential eligibility and assisting the
homeowner, without charge, in preparing a refund claim.

EFFECTIVE DATE.

This section is effective for claims based on property taxes
payable in 2009 and thereafter.

Sec. 6.

Minnesota Statutes 2006, section 290A.04, is amended by adding a subdivision
to read:


Subd. 2k.

Homestead credit state refund.

(a) A claimant who is a homeowner
is entitled to a state refund of the amount of the property taxes payable in excess of two
percent of the claimant's household income, based on the percentage and maximum for the
appropriate household income level shown below. The refund amount determined from the
table must be reduced further by the amount of the homestead market value credit under
section 273.1384, subdivision 1, paragraph (b), but not to an amount that is less than zero.

Household Income
Refund Percentage
Maximum State Refund
0 to $5,399
90 percent
$2,500
5,400 to 18,899
85 percent
2,500
18,900 to 26,999
80 percent
2,500
27,000 to 32,399
70 percent
2,500
32,400 to 37,799
65 percent
2,500
37,800 to 45,899
60 percent
2,500
45,900 to 64,699
55 percent
2,500
64,700 to 80,899
50 percent
2,300
80,900 to 94,399
45 percent
2,100
94,400 to 99,299
40 percent
1,900
99,300 to 104,099
35 percent
1,700
104,100 to 115,599
30 percent
1,500
115,600 to 127,199
25 percent
1,250
127,200 to 134,099
25 percent
1,000
134,100 to 138,799
25 percent
750
138,800 to 144,399
25 percent
500
144,400 to 200,000
25 percent
250

(b) No payment is allowed under paragraph (a) if the claimant's household income
is more than $200,000.

EFFECTIVE DATE.

This section is effective beginning for claims based on
property taxes payable in 2009.

Sec. 7.

Minnesota Statutes 2006, section 290A.04, is amended by adding a subdivision
to read:


Subd. 2l.

Revenue neutrality.

(a) No later than August 1st of each year, beginning
in 2010, the commissioner must calculate the amount of revenue estimated to be raised in
the next fiscal year through the limitation of the residential homestead market value credit
in section 273.1384, subdivision 1, paragraph (b), and the disallowance of the deduction
of real and personal property taxes in section 290.01, subdivision 19a, clause (2). The
commissioner must also estimate the total amount estimated to be paid to homeowners
in refunds based on taxes payable in the next calendar year under the homestead credit
state refund in subdivision 2k, and the amount that would have been paid in refunds based
on taxes payable in the next calendar year under the homeowner property tax refund if
section 290A.04, subdivision 2, had not been repealed.

(b) If the commissioner estimates that more revenue will be raised in the next fiscal
year through the limitation of the residential homestead market value credit and the
disallowance of the real and personal property tax deduction than will be paid in increased
refunds under the homestead credit state refund as compared with the repealed homeowner
property tax refund, and if the revenue raised exceeds the additional refunds to be paid by
more than $5,000,000, then the commissioner must adjust the maximum refunds allowed
under subdivision 2k for refunds based on taxes payable in the next calendar year. The
adjustment applies to the maximum refunds after the inflation adjustment provided in
subdivision 4. The commissioner must adjust the maximum refunds for all income ranges
proportionately, rounded to the nearest $10 amount as provided in subdivision 4, paragraph
(b), so that the amount estimated to be paid in refunds based on taxes payable in the next
calendar year approximates but does not exceed the revenue estimated to be raised through
the limitation of the residential homestead market value credit and the disallowance of the
real and personal property tax deduction in the next fiscal year. The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.

EFFECTIVE DATE.

This section is effective the day following final enactment,
for refunds based on property taxes payable in 2011 and following years.

Sec. 8.

Minnesota Statutes 2006, section 290A.04, subdivision 3, is amended to read:


Subd. 3.

Table.

The commissioner of revenue shall construct and make available
to taxpayers a comprehensive table showing the property taxes to be paid and refund
allowed at various levels of income and assessment. The table shall follow the schedule
of income percentages, maximums and other provisions specified in subdivision 2 this
section
, except that the commissioner may graduate the transition between income
brackets. All refunds shall be computed in accordance with tables prepared and issued
by the commissioner of revenue.

The commissioner shall include on the form an appropriate space or method for the
claimant to identify if the property taxes paid are for a manufactured home, as defined in
section 273.125, subdivision 8, paragraph (c), or a park trailer taxed as a manufactured
home under section 168.012, subdivision 9.

Sec. 9.

Minnesota Statutes 2006, section 290A.04, subdivision 4, is amended to read:


Subd. 4.

Inflation adjustment.

(a) Beginning for property tax refunds payable in
calendar year 2002 2010, the commissioner shall annually adjust the dollar amounts of the
income thresholds and the maximum refunds under subdivisions 2 and 2a subdivision 2k
for inflation. The commissioner shall make the inflation adjustments in accordance with
section 1(f) of the Internal Revenue Code, except that for purposes of this subdivision
the percentage increase shall be determined from the year ending on June 30, 2000 2008,
to the year ending on June 30 of the year preceding that in which the refund is payable.
The commissioner shall use the appropriate percentage increase to annually adjust the
income thresholds and maximum refunds under subdivisions 2 and 2a subdivision 2k for
inflation without regard to whether or not the income tax brackets are adjusted for inflation
in that year. The commissioner shall round the thresholds and the maximum amounts,
as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall
round it up to the next $10 amount.

The commissioner shall annually announce the adjusted refund schedule at the same
time provided under section 290.06. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.

(b) Beginning for property tax refunds payable in calendar year 2002, the
commissioner shall annually adjust the dollar amounts of the income thresholds and
the maximum refunds under subdivision 2a for inflation. The commissioner shall make
the inflation adjustments in accordance with section 1(f) of the Internal Revenue Code,
except that for purposes of this subdivision the percentage increase shall be determined
from the year ending on June 30, 2000, to the year ending on June 30 of the year
preceding that in which the refund is payable. The commissioner shall use the appropriate
percentage increase to annually adjust the income thresholds and maximum refunds under
subdivision 2a for inflation without regard to whether or not the income tax brackets are
adjusted for inflation in that year. The commissioner shall round the thresholds and the
maximum amounts, as adjusted to the nearest $10 amount. If the amount ends in $5, the
commissioner shall round it up to the next $10 amount. The commissioner shall annually
announce the adjusted refund schedule at the same time provided under section 290.06.
The determination of the commissioner under this subdivision is not a rule under the
Administrative Procedure Act.

EFFECTIVE DATE.

This section is effective beginning for claims based on
property taxes payable in 2010.

Sec. 10. TAXPAYER ASSISTANCE SERVICES; HOMESTEAD CREDIT
STATE REFUND.

(a) $100,000 in fiscal year 2009 is appropriated from the general fund to the
commissioner of revenue to make grants to one or more nonprofit organizations,
qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, to coordinate,
facilitate, encourage, and aid in the provision of taxpayer assistance services. The
commissioner must award grants under this section so as to increase the availability of
taxpayer assistance services after April 15th, to assist homeowners in filing claims for
the homestead credit state refund, and to increase participation in the program. This
appropriation is one-time and is not added to the agency's base budget.

(b) "Taxpayer assistance services" means accounting and tax preparation services
provided by volunteers to low-income and disadvantaged Minnesota residents to help
them file federal and state income tax returns, Minnesota renter property tax refund
claims, and Minnesota homestead credit state refund claims, and may include provision of
personal representation before the Department of Revenue and Internal Revenue Service.

Sec. 11. REPEALER.

Minnesota Statutes 2006, section 290A.04, subdivisions 2 and 2b, are repealed.

EFFECTIVE DATE.

This section is effective for claims based on property taxes
payable in 2009 and thereafter.

ARTICLE 2

AIDS TO LOCAL GOVERNMENTS

Section 1.

Minnesota Statutes 2006, section 477A.011, subdivision 34, is amended to
read:


Subd. 34.

City revenue need.

(a) For a city with a population equal to or greater
than 2,500, "city revenue need" is the sum of (1) 5.0734098 times the pre-1940 housing
percentage; plus (2) 19.141678 times the population decline percentage; plus (3)
2504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the metropolitan
area factor; minus (6) 49.10638 times the household size.

(b) For a city with a population less than 2,500, "city revenue need" is the sum of
(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
1.206 times the transformed population; minus (5) 62.772.

(c) For a city with a population of 2,500 or more and a population in one of the most
recently available five years that was less than 2,500, "city revenue need" is the sum of (1)
its city revenue need calculated under paragraph (a) multiplied by its transition factor;
plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied
by the difference between one and its transition factor. For purposes of this paragraph, a
city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's
population estimate has been 2,500 or more. This provision only applies for aids payable
in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It
applies to any city for aids payable in 2009 and thereafter. The city revenue need under
this paragraph may not be less than 290.

(d) The city revenue need cannot be less than zero.

(e) For aids certified in 2010 and subsequent years, the city revenue need is equal
to the average of (1) the city's revenue need calculated under paragraphs (a) to (d)
based on data available by January 1 in the year the aid is certified, and (2) its revenue
need calculated under paragraphs (a) to (d) based on data available by January 1 in the
previous year.

(e) (f) For calendar year 2005 and subsequent years, the city revenue need for a city,
as determined in paragraphs (a) to (d) (e), is multiplied by the ratio of the annual implicit
price deflator for government consumption expenditures and gross investment for state
and local governments as prepared by the United States Department of Commerce, for
the most recently available year to the 2003 implicit price deflator for state and local
government purchases.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2009 and thereafter.

Sec. 2.

Minnesota Statutes 2006, section 477A.011, subdivision 36, as amended by
Laws 2008, chapter 154, article 1, section 1, is amended to read:


Subd. 36.

City aid base.

(a) Except as otherwise provided in this subdivision,
"city aid base" is zero.

(b) The city aid base for any city with a population less than 500 is increased by
$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $40,000 for aids payable in calendar year 1995 only, provided that:

(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;

(ii) the city portion of the tax capacity rate exceeds 100 percent; and

(iii) its city aid base is less than $60 per capita.

(c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:

(i) the city has a population in 1994 of 2,500 or more;

(ii) the city is located in a county, outside of the metropolitan area, which contains a
city of the first class;

(iii) the city's net tax capacity used in calculating its 1996 aid under section
477A.013 is less than $400 per capita; and

(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
property located in the city is classified as railroad property.

(d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:

(i) the city was incorporated as a statutory city after December 1, 1993;

(ii) its city aid base does not exceed $5,600; and

(iii) the city had a population in 1996 of 5,000 or more.

(e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:

(i) the city had a population in 1996 of at least 50,000;

(ii) its population had increased by at least 40 percent in the ten-year period ending
in 1996; and

(iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.

(f) (e) The city aid base for a city is increased by $150,000 for aids payable in
2000 and thereafter, and the maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (c), is also increased by $150,000 in calendar year
2000 only, provided that:

(1) the city has a population that is greater than 1,000 and less than 2,500;

(2) its commercial and industrial percentage for aids payable in 1999 is greater
than 45 percent; and

(3) the total market value of all commercial and industrial property in the city
for assessment year 1999 is at least 15 percent less than the total market value of all
commercial and industrial property in the city for assessment year 1998.

(g) (f) The city aid base for a city is increased by $200,000 in 2000 and thereafter,
and the maximum amount of total aid it may receive under section 477A.013, subdivision
9
, paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:

(1) the city had a population in 1997 of 2,500 or more;

(2) the net tax capacity of the city used in calculating its 1999 aid under section
477A.013 is less than $650 per capita;

(3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
section 477A.013 is greater than 12 percent;

(4) the 1999 local government aid of the city under section 477A.013 is less than
20 percent of the amount that the formula aid of the city would have been if the need
increase percentage was 100 percent; and

(5) the city aid base of the city used in calculating aid under section 477A.013
is less than $7 per capita.

(h) (g) The city aid base for a city is increased by $102,000 in 2000 and thereafter,
and the maximum amount of total aid it may receive under section 477A.013, subdivision
9
, paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:

(1) the city has a population in 1997 of 2,000 or more;

(2) the net tax capacity of the city used in calculating its 1999 aid under section
477A.013 is less than $455 per capita;

(3) the net levy of the city used in calculating 1999 aid under section 477A.013 is
greater than $195 per capita; and

(4) the 1999 local government aid of the city under section 477A.013 is less than
38 percent of the amount that the formula aid of the city would have been if the need
increase percentage was 100 percent.

(i) (h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:

(1) the city has a population in 1998 that is greater than 200 but less than 500;

(2) the city's revenue need used in calculating aids payable in 2000 was greater
than $200 per capita;

(3) the city net tax capacity for the city used in calculating aids available in 2000
was equal to or less than $200 per capita;

(4) the city aid base of the city used in calculating aid under section 477A.013
is less than $65 per capita; and

(5) the city's formula aid for aids payable in 2000 was greater than zero.

(j) (i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:

(1) the city had a population in 1998 that is greater than 200 but less than 500;

(2) the city's commercial industrial percentage used in calculating aids payable in
2000 was less than ten percent;

(3) more than 25 percent of the city's population was 60 years old or older according
to the 1990 census;

(4) the city aid base of the city used in calculating aid under section 477A.013
is less than $15 per capita; and

(5) the city's formula aid for aids payable in 2000 was greater than zero.

(k) (j) The city aid base for a city is increased by $45,000 in 2001 and thereafter
and by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount
of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
only, provided that:

(1) the net tax capacity of the city used in calculating its 2000 aid under section
477A.013 is less than $810 per capita;

(2) the population of the city declined more than two percent between 1988 and 1998;

(3) the net levy of the city used in calculating 2000 aid under section 477A.013 is
greater than $240 per capita; and

(4) the city received less than $36 per capita in aid under section 477A.013,
subdivision 9
, for aids payable in 2000.

(l) (k) The city aid base for a city with a population of 10,000 or more which is
located outside of the seven-county metropolitan area is increased in 2002 and thereafter,
and the maximum amount of total aid it may receive under section 477A.013, subdivision
9
, paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
the lesser of:

(1)(i) the total population of the city, as determined by the United States Bureau of
the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or

(2) $2,500,000.

(m) (l) The city aid base is increased by $50,000 in 2002 and thereafter, and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:

(1) the city is located in the seven-county metropolitan area;

(2) its population in 2000 is between 10,000 and 20,000; and

(3) its commercial industrial percentage, as calculated for city aid payable in 2001,
was greater than 25 percent.

(n) (m) The city aid base for a city is increased by $150,000 in calendar years 2002
to 2011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum
amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
2009 only, provided that:

(1) the city had a population of at least 3,000 but no more than 4,000 in 1999;

(2) its home county is located within the seven-county metropolitan area;

(3) its pre-1940 housing percentage is less than 15 percent; and

(4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
per capita.

(o) (n) The city aid base for a city is increased by $200,000 beginning in calendar
year 2003 and the maximum amount of total aid it may receive under section 477A.013,
subdivision 9
, paragraph (c), is also increased by $200,000 in calendar year 2003 only,
provided that the city qualified for an increase in homestead and agricultural credit aid
under Laws 1995, chapter 264, article 8, section 18.

(p) (o) The city aid base for a city is increased by $200,000 in 2004 only and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
dry cask storage facility.

(q) (p) The city aid base for a city is increased by $10,000 in 2004 and thereafter
and the maximum total aid it may receive under section 477A.013, subdivision 9, is also
increased by $10,000 in calendar year 2004 only, if the city was included in a federal
major disaster designation issued on April 1, 1998, and its pre-1940 housing stock was
decreased by more than 40 percent between 1990 and 2000.

(r) (q) The city aid base for a city is increased by $30,000 in 2009 and thereafter
and the maximum total aid it may receive under section 477A.013, subdivision 9, is also
increased by $25,000 in calendar year 2006 only if the city had a population in 2003
of at least 1,000 and has a state park for which the city provides rescue services and
which comprised at least 14 percent of the total geographic area included within the
city boundaries in 2000.

(s) The city aid base for a city with a population less than 5,000 is increased in
2006 and thereafter and the minimum and maximum amount of total aid it may receive
under this section is also increased in calendar year 2006 only by an amount equal to
$6 multiplied by its population.

(t) (r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and
the minimum and maximum amount of total aid it may receive under section 477A.013,
subdivision 9, is also increased by $80,000 in calendar year 2009 only, if:

(1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
to be placed in trust status as tax-exempt Indian land;

(2) the placement of the land is being challenged administratively or in court; and

(3) due to the challenge, the land proposed to be placed in trust is still on the tax
rolls as of May 1, 2006.

(u) (s) The city aid base for a city is increased by $100,000 in 2007 and thereafter
and the minimum and maximum total amount of aid it may receive under this section is
also increased in calendar year 2007 only, provided that:

(1) the city has a 2004 estimated population greater than 200 but less than 2,000;

(2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;

(3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
payable in 2006 was greater than 110 percent; and

(4) it is located in a county where at least 15,000 acres of land are classified as
tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.

(v) (t) The city aid base for a city is increased by $30,000 in 2009 only, and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than
3,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities
and one township in 2002.

(u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and
the maximum total aid it may receive under section 477A.013, subdivision 9, is also
increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for
aids payable in 2007 of less than $150 per capita and the city experienced flooding on
March 14, 2007, that resulted in evacuation of at least 40 homes.

(v) The city aid base for a city is increased by $200,000 in 2009 to 2013, and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $200,000 in calendar year 2009 only, if the city:

(1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical
area;

(2) has a 2005 population greater than 7,000 but less than 8,000; and

(3) has a 2005 net tax capacity per capita of less than $500.

(w) The city aid base is increased by $80,000 in calendar years 2009 to 2018 and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
increased by $80,000 in calendar year 2009 only, provided that:

(1) the city is located in the seven-county metropolitan area;

(2) its population in 2006 is less than 200; and

(3) the percentage of its housing stock built before 1940, according to the 2000
United States Census, is greater than 40 percent.

(x) The city aid base for a city is increased by $100,000 in 2009 and thereafter and
the minimum and maximum total amount of aid it may receive under this section is also
increased by $100,000 in calendar year 2009 only, provided that:

(1) the city is located in the metropolitan area and its 2006 population is less than
2,500;

(2) at least 25 percent of its housing was built before 1940 and at least 50 percent of
its housing is rental housing, according to the 2000 United States census;

(3) the median household income in the city is 80 percent or less than the median
household income in the metropolitan area and 50 percent or less than the median
household income for all cities contiguous to that city, according to the 2000 United
States Census; and

(4) at least 60 percent of the land and water acres in the city are classified as
tax-exempt property, according to its 2008 planning document.

(y) The city aid base is increased by $90,000 in calendar year 2009 only and the
minimum and maximum total amount of aid it may receive under section 477A.013,
subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the
city is located in the seven-county metropolitan area, has a 2006 population between 5,000
and 7,000 and has a 1997 population of over 7,000.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2009 and thereafter.

Sec. 3.

Minnesota Statutes 2006, section 477A.011, is amended by adding a
subdivision to read:


Subd. 41.

Small city aid base.

(a) "Small city aid base" for a city with a population
less than 5,000 is equal to $9 multiplied by its population. The small city aid base for
all other cities is equal to zero.

(b) For calendar year 2010 and subsequent years, the small city aid base for a city,
as determined in paragraph (a), is multiplied by the ratio of the annual implicit price
deflator for government consumption expenditures and gross investment for state and
local governments as prepared by the United States Department of Commerce for the most
recently available year to the 2007 implicit price deflator for state and local government
purchases.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2009 and thereafter.

Sec. 4.

Minnesota Statutes 2006, section 477A.011, is amended by adding a
subdivision to read:


Subd. 42.

City jobs base.

(a) "City jobs base" for a city with a population of 5,000
or more is equal to the product of (1) $30, (2) the number of jobs per capita in the city, and
(3) its population. For cities with a population less than 5,000, the city jobs base is equal
to zero. For a city receiving aid under section 477A.011, subdivision 36, paragraph (l), its
city jobs base is reduced by the lesser of one-half of the amount of aid received under that
paragraph or $1,200,000. No city's jobs base may exceed $5,000,000 under this paragraph.

(b) For calendar year 2010 and subsequent years, the city jobs base for a city,
as determined in paragraph (a), is multiplied by the ratio of the annual implicit price
deflator for government consumption expenditures and gross investment for state and
local governments as prepared by the United States Department of Commerce for the most
recently available year to the 2007 implicit price deflator for state and local government
purchases.

(c) For purposes of this subdivision, "jobs per capita in the city" means (1) the
average annual number of employees in the city based on the data from the Quarterly
Census of Employment and Wages, as reported by the Department of Employment and
Economic Development, for the most recent calendar year available as of January 1 of
the year in which the aid is calculated, divided by (2) the city's population for the same
calendar year as the employment data.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2009 and thereafter.

Sec. 5.

Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read:


Subd. 5.

County transition aid.

(a) For 2005, a county is eligible for transition
aid equal to the amount, if any, by which:

(1) the difference between:

(i) the aid the county received under subdivision 1 in 2004, divided by the total aid
paid to all counties under subdivision 1, multiplied by $205,000,000; and

(ii) the amount of aid the county is certified to receive in 2005 under subdivisions
3 and 4;

exceeds:

(2) three percent of the county's adjusted net tax capacity.

A county's aid under this paragraph may not be less than zero.

(b) In 2006, a county is eligible to receive two-thirds of the transition aid it received
in 2005.

(c) In 2007, For 2009 and each year thereafter, a county is eligible to receive
one-third of the transition aid it received in 2005 2007.

(d) No county shall receive aid under this subdivision after 2007.

(b) In 2009 only, a county with (1) a 2006 population less than 30,000, and (2)
an average Part I crimes per capita greater than 3.9 percent based on factors used in
determining county program aid payable in 2008, shall receive $100,000.

(c) For aids payable in 2009, 2010, and 2011 only, $250,000 each year shall be
distributed to any county in which (1) the 2006 estimated population exceeds 30,000, and
(2) the 2006 percentage of households receiving food stamps exceeds 15 percent, based
on data used in computing county program aids for aids payable in 2008 and the 2006
estimated household count according to the state demographer. The aid must be used to
meet the county's cost of out-of-home placement programs.

EFFECTIVE DATE.

This section is effective for aids payable in 2009 and
thereafter.

Sec. 6.

Minnesota Statutes 2006, section 477A.013, subdivision 1, is amended to read:


Subdivision 1.

Towns.

In 2002, no In calendar year 2009 and subsequent years,
each organized
town is eligible for a distribution under this subdivision equal to $100 plus
the product of the town aid factor multiplied by its population. Each county with one or
more unorganized townships shall receive $100 plus the product of the town aid factor
multiplied by the total population in all unorganized townships in the county
.

The "town aid factor" is the same for all towns and must be calculated by the
Department of Revenue so that the total aid under this subdivision equals the total amount
available for aid under section 477A.03.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2009 and thereafter.

Sec. 7.

Minnesota Statutes 2006, section 477A.013, subdivision 8, as amended by
Laws 2008, chapter 154, article 1, section 2, is amended to read:


Subd. 8.

City formula aid.

In calendar year 2004 2009 and subsequent years, the
formula aid for a city is equal to the sum of (1) its city jobs base, (2) its small city aid base,
and (3)
the need increase percentage multiplied by the difference between (1) (i) the
city's revenue need multiplied by its population, and (2) (ii) the sum of the city's net tax
capacity multiplied by the tax effort rate.

No city may have a formula aid amount less than zero. The need increase percentage
must be the same for all cities.

The applicable need increase percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions 4
and 5
. For aids payable in 2009 only, a city's revenue need, population, net tax capacity,
and tax effort rate will be based on the data available for calculating these factors for
aids payable in 2008.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2009 and thereafter.

Sec. 8.

Minnesota Statutes 2006, section 477A.013, subdivision 9, as amended by
Laws 2008, chapter 154, article 1, section 3, is amended to read:


Subd. 9.

City aid distribution.

(a) In calendar year 2009 and thereafter, each
city shall receive an aid distribution equal to the sum of (1) the city formula aid under
subdivision 8, and (2) its city aid base, and (3) one-half of the difference between its total
aid in the previous year under this subdivision and its city aid base in the previous year
.

(b) For aids payable in 2010 and thereafter, each city shall receive an aid distribution
equal to (1) the city aid formula under subdivision 8, (2) its city aid base, and (3) its
formula aid under subdivision 8 in the previous year, prior to any adjustments under
this subdivision
2009 only, the total aid for any city shall not exceed the sum of (1) 40
percent of the city's net levy for the year prior to the aid distribution, plus (2) its total
aid in the previous year
.

(c) For aids payable in 2009 2010 and thereafter, the total aid for any city shall
not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid
distribution plus (2) its total aid in the previous year. For aids payable in 2009 and
thereafter, the total aid for any city with a population of 2,500 or more may not be less
than its total aid under this section in the previous year minus the lesser of $15 multiplied
by its population, or ten percent of its net levy in the year prior to the aid distribution.

(d) For aids payable in 2009 2010 and thereafter, the total aid for a city with a
population less than 2,500 must not be less than the amount it was certified to receive in
the previous year minus the lesser of $15 multiplied by its population, or five percent of its
2003 certified aid amount. For aids payable in 2009 only the total aid for a city with a
population less than 2,500 must not be less than what it received under this section in the
previous year unless its total aid in calendar year 2008 was aid under section 477A.011,
subdivision 36, paragraph (s), in which case its minimum aid is zero.

(e) If a city's net tax capacity used in calculating aid under this section has decreased
in any year by more than 25 percent from its net tax capacity in the previous year due to
property becoming tax-exempt Indian land, the city's maximum allowed aid increase
under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
resulting from the property becoming tax exempt.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2009 and thereafter.

Sec. 9.

Minnesota Statutes 2006, section 477A.03, is amended to read:


477A.03 APPROPRIATION.

Subd. 2.

Annual appropriation.

A sum sufficient to discharge the duties imposed
by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the
commissioner of revenue.

Subd. 2a.

Cities.

For aids payable in 2004 2009 and thereafter, the total aids aid paid
under section 477A.013, subdivision 9, are limited to $429,000,000 is $534,148,487. For
aids payable in 2005, the total aids paid under section 477A.013, subdivision 9, are limited
to $437,052,000. For aids payable in 2006 and thereafter, the total aids paid under section
477A.013, subdivision 9, is limited to $485,052,000
2009 only, an additional $1,000,000
shall be retained by the commissioner and used to make payments under section 10
.

Subd. 2b.

Counties.

(a) For aids payable in calendar year 2005 and thereafter,
the total aids paid to counties under section 477A.0124, subdivision 3, are limited to
$100,500,000.
For aids payable in 2009 and thereafter, the total aid payable under section
477A.0124, subdivision 3, is $110,500,000 minus one-half of the total aid amount
determined under section 477A.0124, subdivision 5, paragraph (a).
Each calendar year,
$500,000 shall be retained by the commissioner of revenue to make reimbursements
to the commissioner of finance for payments made under section 611.27. For calendar
year 2004, the amount shall be in addition to the payments authorized under section
477A.0124, subdivision 1. For calendar year 2005 and subsequent years, the amount shall
be deducted from the appropriation under this paragraph. The reimbursements shall be to
defray the additional costs associated with court-ordered counsel under section 611.27.
Any retained amounts not used for reimbursement in a year shall be included in the next
distribution of county need aid that is certified to the county auditors for the purpose of
property tax reduction for the next taxes payable year.

(b) For aids payable in 2005 2009 and thereafter, the total aids aid under section
477A.0124, subdivision 4, are limited to $105,000,000 is $115,132,923 minus one-half of
the total aid amount determined under section 477A.0124, subdivision 5, paragraph (a)
.
For aids payable in 2006 and thereafter, the total aid under section 477A.0124, subdivision
4
, is limited to $105,132,923.
The commissioner of finance shall bill the commissioner of
revenue for the cost of preparation of local impact notes as required by section 3.987, not
to exceed $207,000 in fiscal year 2004 and thereafter. The commissioner of education
shall bill the commissioner of revenue for the cost of preparation of local impact notes
for school districts as required by section 3.987, not to exceed $7,000 in fiscal year 2004
and thereafter. The commissioner of revenue shall deduct the amounts billed under
this paragraph from the appropriation under this paragraph. The amounts deducted are
appropriated to the commissioner of finance and the commissioner of education for the
preparation of local impact notes.

Subd. 2c.

Towns.

For aids payable in 2009 and thereafter, the total aid under section
477A.013, subdivision 1, is $3,000,000.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2009 and thereafter.

Sec. 10. CITY FORECLOSURE GRANTS.

For calendar 2009 only, a city with a concentration of foreclosures within the city
or within a zip code area of a city in calendar year 2007 may receive a grant under this
section. A "concentration of foreclosures" means that the percent of housing in foreclosure
within the area is at least 50 percent higher than the average percent of housing in
foreclosure in the metropolitan area, as defined in Minnesota Statutes, section 473.121,
subdivision 2. The city must apply to the commissioner of revenue by December 30, 2008,
on the form prescribed by the commissioner. The grant will be paid with other aids paid in
calendar year 2009, as prescribed in Minnesota Statutes, section 477A.015.

The commissioner of revenue shall consult with the commissioner of the Housing
Finance Agency to develop a form for cities to use when applying for grants under this
section and to determine whether applications qualify. The appropriation for the grants
under Minnesota Statutes, section 477A.03, shall be divided between successful applicants
based on the number of foreclosures in the area meeting the concentration criteria. No city
may receive a grant of more than $250,000. All decisions by the commissioner regarding
grant qualification and amount shall be final. The grant must be used to fund inspection
and public safety costs associated with housing foreclosures.

EFFECTIVE DATE.

This section is effective for grants made in calendar year 2009.

Sec. 11. STUDY OF AIDS TO LOCAL GOVERNMENTS.

The chairs of the senate and house of representatives committees with jurisdiction
over taxes shall each appoint five members to a study group of the tax committees to
examine the current system of aids to local governments and make recommendations on
improvements to the system. Of the five members appointed by each chair, two must be
members of the tax committee, one of whom is a majority party member and one of
whom is a minority party member. The remaining members must represent local units of
government. The chairs of the divisions of the tax committees having jurisdiction over
property taxes shall also be members and shall serve as cochairs of the study group.
The study shall include, but not be limited to, consideration of existing disparities in
the distribution of local government aid, the relationship of need for city aid to other
sources of revenue such as local sales taxes, an analysis of current law need and capacity
factors as well as alternative need factors, alternative analytical methods for determining
correlations between factors and need, the formula used to calculate aid for small cities,
and volatility in the local government aid distribution. The group must report on its
specific recommendations to the legislature by December 15, 2010.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 12. REPEALER.

Minnesota Statutes 2006, section 477A.014, subdivision 5, and

Minnesota Statutes
2007 Supplement, section 477A.014, subdivision 4,
are repealed.

EFFECTIVE DATE.

This section is effective for aid payable in 2009 and thereafter.

ARTICLE 3

INCOME AND ESTATE TAXES

Section 1.

Minnesota Statutes 2006, section 270A.03, subdivision 7, is amended to
read:


Subd. 7.

Refund.

"Refund" means an individual income tax refund or political
contribution refund
, pursuant to chapter 290, or a property tax credit or refund, pursuant to
chapter 290A, or a sustainable forest tax payment to a claimant under chapter 290C.

For purposes of this chapter, lottery prizes, as set forth in section 349A.08,
subdivision 8
, and amounts granted to persons by the legislature on the recommendation
of the joint senate-house of representatives Subcommittee on Claims shall be treated
as refunds.

In the case of a joint property tax refund payable to spouses under chapter 290A,
the refund shall be considered as belonging to each spouse in the proportion of the total
refund that equals each spouse's proportion of the total income determined under section
290A.03, subdivision 3. In the case of a joint income tax refund under chapter 289A, the
refund shall be considered as belonging to each spouse in the proportion of the total
refund that equals each spouse's proportion of the total taxable income determined under
section 290.01, subdivision 29. The commissioner shall remit the entire refund to the
claimant agency, which shall, upon the request of the spouse who does not owe the debt,
determine the amount of the refund belonging to that spouse and refund the amount to
that spouse. For court fines, fees, and surcharges and court-ordered restitution under
section 611A.04, subdivision 2, the notice provided by the commissioner of revenue under
section 270A.07, subdivision 2, paragraph (b), serves as the appropriate legal notice
to the spouse who does not owe the debt.

EFFECTIVE DATE.

This section is effective for political contribution refund
claims based on contributions that are made after June 30, 2008.

Sec. 2.

Minnesota Statutes 2006, section 270C.56, subdivision 3, is amended to read:


Subd. 3.

Procedure for assessment.

The commissioner may assess liability for the
taxes described in subdivision 1 against a person liable under this section. The assessment
may be based upon information available to the commissioner. It must be made within the
prescribed period of limitations for assessing the underlying tax, or within one year after
the date of an order assessing underlying tax, whichever period expires later. An order
assessing personal liability under this section is reviewable under section 270C.35 and is
appealable to Tax Court. If any portion of the liability shown on the order is paid after
the time for appealing the order has expired, a claim for refund may be made, but only if
filed within 120 days after the first payment of the liability.

If a person has been assessed under this section for an amount for a given period
and the time for appeal has expired or there has been a final determination that the person
is liable, collection action is not stayed pursuant to section 270C.33, subdivision 5, for
subsequent assessments of additional amounts for the same person for the same period
and tax type.

EFFECTIVE DATE.

This section is effective for orders issued on or after the
day following final enactment.

Sec. 3.

Minnesota Statutes 2006, section 289A.19, subdivision 2, is amended to read:


Subd. 2.

Corporate franchise and mining company taxes.

Corporations or mining
companies shall receive an extension of seven months or the amount of time granted by
the Internal Revenue Service, whichever is longer,
for filing the return of a corporation
subject to tax under chapter 290 or for filing the return of a mining company subject to
tax under sections 298.01 and 298.015. Interest on any balance of tax not paid when the
regularly required return is due must be paid at the rate specified in section 270C.40,
from the date such payment should have been made if no extension was granted, until
the date of payment of such tax.

If a corporation or mining company does not:

(1) pay at least 90 percent of the amount of tax shown on the return on or before the
regular due date of the return, the penalty prescribed by section 289A.60, subdivision 1,
shall be imposed on the unpaid balance of tax; or

(2) pay the balance due shown on the regularly required return on or before the
extended due date of the return, the penalty prescribed by section 289A.60, subdivision 1,
shall be imposed on the unpaid balance of tax from the original due date of the return.

EFFECTIVE DATE.

This section is effective the day following final enactment
and applies to any federal extension that allows filing after that date.

Sec. 4.

Minnesota Statutes 2006, section 289A.19, is amended by adding a subdivision
to read:


Subd. 7.

Federal extensions.

When an extension of time to file a partnership or
S corporation tax return is granted by the Internal Revenue Service, the commissioner
shall grant an automatic extension to file the comparable Minnesota return for that period.
An extension granted under this subdivision does not affect the due date for making
payments of tax.

EFFECTIVE DATE.

This section is effective the day following final enactment
and applies to any federal extension that allows filing after that date.

Sec. 5.

Minnesota Statutes 2006, section 289A.40, subdivision 1, is amended to read:


Subdivision 1.

Time limit; generally.

Unless otherwise provided in this chapter,
a claim for a refund of an overpayment of state tax must be filed within the latest of the
following time periods that apply:

(1) 3-1/2 years from the date prescribed for filing the return, plus any extension of
time granted for filing the return, but only if filed within the extended time,; or

(2) one year from the date of an order assessing tax under section 270C.33 or an
order determining an appeal under section 270C.35, subdivision 8, or one year from the
date of a return made by the commissioner under section 270C.33, subdivision 3, upon
payment in full of the tax, penalties, and interest shown on the order or return made by
the commissioner, whichever period expires later. Claims for refund, except for taxes
under chapter 297A, filed after the 3-1/2 year period but within the one-year period are
limited to the amount of the tax, penalties, and interest on the order or return made by the
commissioner and to issues determined by the order or return made by the commissioner.
In the case of assessments under section 289A.38, subdivision 5 or 6, claims for refund
under chapter 297A filed after the 3-1/2 year period but within the one-year period are
limited to the amount of the tax, penalties, and interest on the order or return made by the
commissioner that are due for the period before the 3-1/2 year period.; or

(3) 120 days after the first payment of any portion of a tax liability shown on a
return made by the commissioner under section 270C.33, subdivision 3, or shown on an
order of assessment where no return has been filed under section 270C.33, subdivision
4, paragraph (a), clause (2). Claims for refund filed after the 3-1/2 year period and the
one-year period but within the 120-day period are limited to the amount paid during the
120-day period. This clause does not apply to returns or orders which have previously
been the subject of a denied claim for refund or an administrative appeal.

EFFECTIVE DATE.

The right to file a claim for refund under this section is
effective July 1, 2008. For claims filed before October 31, 2008, this section is effective
retroactively to payments made after December 31, 2007.

Sec. 6.

Minnesota Statutes 2006, section 289A.50, subdivision 1, is amended to read:


Subdivision 1.

General right to refund.

(a) Subject to the requirements of this
section and section 289A.40, a taxpayer who has paid a tax in excess of the taxes lawfully
due and who files a written claim for refund will be refunded or credited the overpayment
of the tax determined by the commissioner to be erroneously paid.

(b) The claim must specify the name of the taxpayer, the date when and the period
for which the tax was paid, the kind of tax paid, the amount of the tax that the taxpayer
claims was erroneously paid, the grounds on which a refund is claimed, and other
information relative to the payment and in the form required by the commissioner. An
income tax, estate tax, or corporate franchise tax return, or amended return claiming an
overpayment constitutes a claim for refund.

(c) When, in the course of an examination, and within the time for requesting a
refund, the commissioner determines that there has been an overpayment of tax, the
commissioner shall refund or credit the overpayment to the taxpayer and no demand
is necessary. If the overpayment exceeds $1, the amount of the overpayment must
be refunded to the taxpayer. If the amount of the overpayment is less than $1, the
commissioner is not required to refund. In these situations, the commissioner does not
have to make written findings or serve notice by mail to the taxpayer.

(d) If the amount allowable as a credit for withholding, estimated taxes, or dependent
care exceeds the tax against which the credit is allowable, the amount of the excess is
considered an overpayment. The refund allowed by section 290.06, subdivision 23, is also
considered an overpayment.
The requirements of section 270C.33 do not apply to the
refunding of such an overpayment shown on the original return filed by a taxpayer.

(e) If the entertainment tax withheld at the source exceeds by $1 or more the taxes,
penalties, and interest reported in the return of the entertainment entity or imposed by
section 290.9201, the excess must be refunded to the entertainment entity. If the excess is
less than $1, the commissioner need not refund that amount.

(f) If the surety deposit required for a construction contract exceeds the liability of
the out-of-state contractor, the commissioner shall refund the difference to the contractor.

(g) An action of the commissioner in refunding the amount of the overpayment does
not constitute a determination of the correctness of the return of the taxpayer.

(h) There is appropriated from the general fund to the commissioner of revenue the
amount necessary to pay refunds allowed under this section.

EFFECTIVE DATE.

This section is effective for political contribution refund
claims based on contributions made after June 30, 2008.

Sec. 7.

Minnesota Statutes 2006, section 290.01, subdivision 6, is amended to read:


Subd. 6.

Taxpayer.

The term "taxpayer" means any person or corporation subject to
a tax imposed by this chapter. For purposes of section 290.06, subdivision 23, the term
"taxpayer" means an individual eligible to vote in Minnesota under section 201.014.

EFFECTIVE DATE.

This section is effective for political contribution refund
claims based on contributions made after June 30, 2008.

Sec. 8.

Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19b, as
amended by Laws 2008, chapter 154, article 3, section 3, and Laws 2008, chapter 154,
article 11, section 11, is amended to read:


Subd. 19b.

Subtractions from federal taxable income.

For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:

(1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;

(2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;

(3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

(5) to the extent included in federal adjusted gross income, income realized on
disposition of property exempt from tax under section 290.491;

(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
under the provisions of Public Law 109-1;

(7) for taxable years beginning before January 1, 2008, the amount of the federal
small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
which is included in gross income under section 87 of the Internal Revenue Code;

(8) for individuals who are allowed a federal foreign tax credit for taxes that do not
qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
of subnational foreign taxes for the taxable year, but not to exceed the total subnational
foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
"federal foreign tax credit" means the credit allowed under section 27 of the Internal
Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
the extent they exceed the federal foreign tax credit;

(9) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (7), or 19c, clause (14), in the case
of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
subdivision 19c, clause (14), in the case of a shareholder of an S corporation, minus the
positive value of any net operating loss under section 172 of the Internal Revenue Code
generated for the tax year of the addition. The resulting delayed depreciation cannot be
less than zero;

(10) job opportunity building zone income as provided under section 469.316;

(11) to the extent included in federal taxable income, the amount of compensation
paid to members of the Minnesota National Guard or other reserve components of the
United States military for active service performed in Minnesota, excluding compensation
for services performed under the Active Guard Reserve (AGR) program. For purposes of
this clause, "active service" means (i) state active service as defined in section 190.05,
subdivision 5a
, clause (1); (ii) federally funded state active service as defined in section
190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05,
subdivision 5c
, but "active service" excludes services performed exclusively for purposes
of basic combat training, advanced individual training, annual training, and periodic
inactive duty training; special training periodically made available to reserve members;
and service performed in accordance with section 190.08, subdivision 3;

(12) to the extent included in federal taxable income, the amount of compensation
paid to Minnesota residents who are members of the armed forces of the United States or
United Nations for active duty performed outside Minnesota under United States Code,
title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of
the United Nations;

(13) an amount, not to exceed $10,000, equal to qualified expenses related to a
qualified donor's donation, while living, of one or more of the qualified donor's organs
to another person for human organ transplantation. For purposes of this clause, "organ"
means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
"human organ transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person; "qualified
expenses" means unreimbursed expenses for both the individual and the qualified donor
for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
may be subtracted under this clause only once; and "qualified donor" means the individual
or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
individual may claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;

(14) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (8), or 19c, clause (15), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (15), in the
case of a shareholder of a corporation that is an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
subtraction is not allowed under this clause;

(15) to the extent included in federal taxable income, compensation paid to a
nonresident who is a service member as defined in United States Code, title 10, section
101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
Law 108-189, section 101(2); and

(16) international economic development zone income as provided under section
469.325.; and

(17) to the extent included in federal taxable income, a percentage of compensation
received from a pension or other retirement pay from the government for service in the
armed forces of the United States. For taxable years beginning after December 31, 2008,
and before January 1, 2010, the percentage is 25 percent up to a maximum subtraction
of $7,500; for taxable years beginning after December 31, 2009, and before January 1,
2011, the percentage is 50 percent up to a maximum subtraction of $15,000; for taxable
years beginning after December 31, 2010, and before January 1, 2012, the percentage is
75 percent up to a maximum subtraction of $22,500; and for taxable years beginning
after December 31, 2011, the percentage is 100 percent up to a maximum subtraction of
$30,000.

EFFECTIVE DATE.

This section is effective for tax years beginning after
December 31, 2008.

Sec. 9.

Minnesota Statutes 2006, section 290.01, subdivision 29, is amended to read:


Subd. 29.

Taxable income.

The term "taxable income" means:

(1) for individuals, estates, and trusts, the same as taxable net income;

(2) for corporations, the taxable net income less

(i) the net operating loss deduction under section 290.095;

(ii) the dividends received deduction under section 290.21, subdivision 4;

(iii) the exemption for operating in a job opportunity building zone under section
469.317;

(iv) the exemption for operating in a biotechnology and health sciences industry
zone under section 469.337; and

(v) the exemption for operating in an international economic development zone
under section 469.326; plus

(vi) Minnesota development subsidies.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2008.

Sec. 10.

Minnesota Statutes 2006, section 290.01, is amended by adding a subdivision
to read:


Subd. 33.

Minnesota development subsidies.

(a) "Minnesota development
subsidies" means the greater of the following amounts:

(1) one-half of the amount deducted by the taxpayer in computing federal taxable
income for the taxable year, as property taxes, business expenses or otherwise, that is
attributable to property taxes paid by the taxpayer, either directly or indirectly through a
lease or otherwise, on property located in a tax increment financing district, as defined in
section 469.174, or that receives an abatement under sections 469.1813 to 469.1815, if the
owner of the property or a related party has entered a development or similar agreement
with respect to the increment district or derives a benefit from the abatement by its
property having access to or use of public improvements financed with the abatement or
otherwise; or

(2) the amount of payments received by the taxpayer under a development or similar
agreement that provides for payments or reimbursements from the proceeds of increments
from a tax increment financing district or from an abatement under sections 469.1813 to
469.1815, but excluding reimbursements under a development action response plan, as
defined in section 469.174, subdivision 17, to pay for its costs incurred to fund removal
or remedial actions.

(b) For purposes of this subdivision, "tax increment financing district" excludes:

(1) a housing district, as defined in section 469.174, subdivision 11;

(2) a soils condition district, as defined in section 469.174, subdivision 19; and

(3) a hazardous substance subdistrict, as defined in section 469.174, subdivision 23.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2008.

Sec. 11.

Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
to read:


Subd. 35.

Investment tax credit.

(a) A credit is allowed against the tax imposed
by this chapter for a qualified taxpayer's investment in a qualified new business venture.
The credit equals 25 percent of the taxpayer's investment made in the business, but may
not exceed the least of:

(1) the liability for tax under this chapter, including the alternative minimum taxes in
sections 290.091 and 290.0921;

(2) $25,000 for an individual not part of a partnership; or

(3) $300,000 for a pass-through entity or C corporation.

(b) For purposes of this subdivision, "qualified taxpayer" means:

(1) an accredited investor within the meaning of Regulation D of the Securities and
Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether
part of a pass-through entity or not; and

(2) an accredited investor who does not own, control, or hold power to vote 20
percent or more of the outstanding securities of the qualified business venture in which the
eligible investment is proposed.

(c) For purposes of this paragraph, "commissioner" means the commissioner
of employment and economic development. Qualified taxpayers must apply to the
commissioner for certification. The application must be in the form and made under the
procedures specified by the commissioner. The commissioner may provide certificates
entitling qualified taxpayers to tax credits under this subdivision. The maximum amount
of credits for which the commissioner may issue certificates in each taxable year is
$2,000,000 for qualified business ventures in a qualified high technology field, as defined
in paragraph (g), $2,000,000 for qualified business ventures in a qualified biotechnology
or medical device field, as defined in paragraph (h), and $2,000,000 for qualified business
ventures in qualified green manufacturing, as defined in paragraph (i). In awarding
certificates under this paragraph, the commissioner must award them to qualified taxpayers
in the order in which the applications are received in each of the categories.

(d) Each pass-through entity must provide each investor a statement indicating the
investor's share of the credit amount certified to the pass-through entity under paragraph
(c) based on its share of the pass-through entity's assets. The credit shall not exceed
$25,000 for each individual part of a pass-through entity.

(e) If the amount of the credit under this subdivision in any taxable year exceeds the
limitation under paragraph (a), clause (1), the excess is a credit carryover to each of the ten
succeeding years but may not exceed $25,000 for an individual not part of a partnership
and $300,000 for a pass-through entity or C corporation. The entire amount of the excess
unused credit must be carried first to the earliest of the taxable years to which the credit
may be carried, and then to each successive year to which the credit may be carried. The
amount of the unused credit that may be added under this paragraph may not exceed the
taxpayer's liability for tax less the credit for the taxable year.

(f) Unless otherwise provided under the rules of the Department of Employment and
Economic Development, a business is a qualified business venture for purposes of this
subdivision only if the business satisfies all of the following conditions:

(1) the business has its headquarters in Minnesota;

(2) at least 51 percent of the business's employees are employed in Minnesota;

(3) the business is engaged in, or is committed to engage in:

(i) using advanced technology to add value to a product, process, or service in a
qualified high technology field or qualified biotechnology or medical device field;

(ii) conducting research in and development of a product, process, or service in a
qualified high technology field qualified biotechnology or medical device field;

(iii) developing a new product, process, or service in a qualified high technology
field or qualified biotechnology or medical device field; or

(iv) qualified green manufacturing;

(4) the business is not engaged in real estate development, insurance, banking,
lending, lobbying, political consulting, information technology consulting, wholesale or
retail trade, leisure, hospitality, transportation, construction, ethanol production from
corn, or professional services provided by attorneys, accountants, business consultants,
physicians, or health care consultants;

(5) the business has fewer than 25 employees;

(6) the business has not been in operation for more than ten consecutive years;

(7) the business has not received more than $1,000,000 in investments that have
qualified for and received tax credits under this section;

(8) the business has less than $1,000,000 in annual gross sales receipts;

(9) the business is not a subsidiary or an affiliate of a business that employs more
than 100 employees or has gross sales receipts for the previous year of more than
$1,000,000, computed by aggregating all of the employees and gross sales receipts of the
business entities affiliated with the business; and

(10) the business has not received private equity investments of more than
$2,000,000.

(g) For purposes of this subdivision, "qualified high technology field" includes, but
is not limited to, aerospace, agricultural processing, alternative energy, environmental
engineering, food technology, cellulosic ethanol, information technology, green
manufacturing, materials science technology, nanotechnology, and telecommunications,
but excludes business qualifying under the definitions in paragraphs (h) and (i).

(h) For purposes of this subdivision, "qualified biotechnology or medical device
field" means the business of manufacturing, processing, assembling, researching or
developing biotechnology or medical device products, including biotechnology and
device products used in agriculture.

(i) For purposes of this subdivision, "qualified green manufacturing" means a
business whose primary business activity is production of products, processes, methods,
technologies, or services intended to do one or more of the following:

(1) to increase the use of energy from renewable sources, as defined in section
216B.1691;

(2) to increase the energy efficiency of the electric utility infrastructure system or to
increase energy conservation related to electricity use, as provided in sections 216B.2401
and 216B.241;

(3) to reduce greenhouse gas emissions, as defined in section 216H.01, subdivision
2, or to mitigate greenhouse gas emissions through, but not limited to, carbon capture,
storage, or sequestration;

(4) to monitor, protect, restore, and preserve the quality of surface waters; and

(5) to expand use of biofuels, including expanding the feasibility or reducing the
cost of producing biofuels or the types of equipment, machinery, and vehicles that can use
biofuels.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2007.

Sec. 12.

Minnesota Statutes 2006, section 290.068, subdivision 1, is amended to read:


Subdivision 1.

Credit allowed.

A corporation, other than a corporation treated as
an "S" corporation under section 290.9725, is allowed a credit against the portion of the
franchise tax computed under section 290.06, subdivision 1, for the taxable year equal to:

(a) 5 3 percent of the first $2,000,000 of the excess (if any) of

(1) the qualified research expenses for the taxable year, over

(2) the base amount; and

(b) 2.5 1.5 percent on all of such excess expenses over $2,000,000.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2007, except that for taxable years beginning during calendar year 2008,
the rate under clause (a) is 3.75 percent and under clause (b) is 1.88 percent.

Sec. 13.

Minnesota Statutes 2006, section 290.068, subdivision 3, is amended to read:


Subd. 3.

Limitation; carryover.

(a)(1) The credit, other than the special credit
under subdivision 7,
for the taxable year shall not exceed the liability for tax. "Liability for
tax" for purposes of this section means the tax imposed under this chapter for the taxable
year reduced by the sum of the nonrefundable credits allowed under this chapter.

(2) In the case of a corporation which is a partner in a partnership, the credit, other
than the special credit under subdivision 7,
allowed for the taxable year shall not exceed
the lesser of the amount determined under clause (1) for the taxable year or an amount
(separately computed with respect to the corporation's interest in the trade or business or
entity) equal to the amount of tax attributable to that portion of taxable income which is
allocable or apportionable to the corporation's interest in the trade or business or entity.

(b) If the amount of the credit determined under this section, other than the special
credit under subdivision 7,
for any taxable year exceeds the limitation under clause (a), the
excess shall be a research credit carryover to each of the 15 succeeding taxable years. The
entire amount of the excess unused credit for the taxable year shall be carried first to the
earliest of the taxable years to which the credit may be carried and then to each successive
year to which the credit may be carried. The amount of the unused credit which may be
added under this clause shall not exceed the taxpayer's liability for tax less the research
credit for the taxable year.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2007.

Sec. 14.

Minnesota Statutes 2006, section 290.068, is amended by adding a subdivision
to read:


Subd. 7.

Special credit; small businesses.

(a) A qualified business is allowed a tax
credit equal to 20 percent of qualified research expenditures incurred for the taxable year
or the amount of tax credit certificates issued under paragraph (e), whichever is less.

(b) For purposes of this subdivision and subdivision 8, a "qualified business" is a
corporation, individual, or partnership that:

(1) had no more than 25 full-time equivalent employees in this state during the
preceding taxable year; and

(2) is engaged in or is committed to engage in a qualified high technology field.

(c) For purposes of applying the requirement under paragraph (b), clause (1), all of
the employees of the unitary business, as that term is used in section 290.17, subdivision
4, must be taken into account and "full-time equivalent" has the meaning given in section
469.318, subdivision 2.

(d) For purposes of this subdivision, "qualified high technology field" includes but
is not limited to aerospace, agricultural processing, alternative energy, biotechnology,
defense, drug delivery, environmental engineering, food technology, cellulosic ethanol,
information technology, green manufacturing, materials science technology, medical
devices, nanotechnology, pharmaceutical technology, and telecommunications. Unless
otherwise provided under the rules of the Department of Employment and Economic
Development, a business is a qualified business venture for purposes of this subdivision
only if the business satisfies all of the following conditions:

(1) the business has its headquarters in Minnesota;

(2) at least 51 percent of the business's employees are employed in Minnesota;

(3) the business is engaged in, or is committed to engage in:

(i) using advanced technology to add value to a product, process, or service in a
qualified high technology field;

(ii) conducting research in and development of a product, process, or service in a
qualified high technology field; or

(iii) developing a new product, process, or service in a qualified high technology
field;

(4) the business is not engaged in real estate development, insurance, banking,
lending, lobbying, political consulting, information technology consulting, wholesale or
retail trade, leisure, hospitality, transportation, construction, ethanol production from
corn, or professional services provided by attorneys, accountants, business consultants,
physicians, or health care consultants;

(5) the business has not been in operation for more than ten consecutive years; and

(6) the business had less than $1,000,000 in annual gross sales receipts in the
preceding taxable year.

(e) For purposes of this paragraph, "commissioner" means the commissioner
of employment and economic development. Qualified businesses must apply to the
commissioner for certification. The application must be in the form and made under the
procedures specified by the commissioner. The commissioner may provide certificates
entitling qualified taxpayers to tax credits under this subdivision. The maximum amount
of credits for which the commissioner may issue certificates in each taxable year is
$3,000,000. In awarding certificates under this paragraph, the commissioner must award
them to qualified taxpayers in the order in which the applications are received.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2007.

Sec. 15.

Minnesota Statutes 2006, section 290.068, is amended by adding a subdivision
to read:


Subd. 8.

Special credit; appropriation.

(a) If the amount of the special credit under
subdivision 7 for any taxable year exceeds the liability for tax, the commissioner shall
refund the excess to the taxpayer.

(b) An amount sufficient to pay the refunds required by this subdivision is annually
appropriated to the commissioner of revenue from the general fund.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2007.

Sec. 16.

Minnesota Statutes 2006, section 290.091, subdivision 2, as amended by Laws
2008, chapter 154, article 4, section 7, is amended to read:


Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given:

(a) "Alternative minimum taxable income" means the sum of the following for
the taxable year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative
minimum taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue
Code:;

(A) for taxable years beginning before January 1, 2006, to the extent that the
deduction exceeds 1.0 percent of adjusted gross income;

(B) for taxable years beginning after December 31, 2005, to the full extent of the
deduction.

For purposes of this clause, "adjusted gross income" has the meaning given in
section 62 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a disabled person;

(3) for depletion allowances computed under section 613A(c) of the Internal
Revenue Code, with respect to each property (as defined in section 614 of the Internal
Revenue Code), to the extent not included in federal alternative minimum taxable income,
the excess of the deduction for depletion allowable under section 611 of the Internal
Revenue Code for the taxable year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the
amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
Internal Revenue Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the
amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and

(6) the amount of addition required by section 290.01, subdivision 19a, clauses
(7) to (9), (11), and (12);

less the sum of the amounts determined under the following:

(1) interest income as defined in section 290.01, subdivision 19b, clause (1);

(2) an overpayment of state income tax as provided by section 290.01, subdivision
19b
, clause (2), to the extent included in federal alternative minimum taxable income;

(3) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as
defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
amounts deducted in computing federal adjusted gross income; and

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b
, clauses (6) and (9) to (16).

In the case of an estate or trust, alternative minimum taxable income must be
computed as provided in section 59(c) of the Internal Revenue Code.

(b) "Investment interest" means investment interest as defined in section 163(d)(3)
of the Internal Revenue Code.

(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.

(d) "Regular tax" means the tax that would be imposed under this chapter (without
regard to this section and section 290.032), reduced by the sum of the nonrefundable
credits allowed under this chapter.

(e) "Net minimum tax" means the minimum tax imposed by this section.

EFFECTIVE DATE.

This section is effective for taxable years beginning after
December 31, 2007.

Sec. 17.

Minnesota Statutes 2006, section 290.92, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(1) Wages. For purposes of this section, the term
"wages" means the same as that term is defined in section 3401(a) and (f) of the Internal
Revenue Code, except that provisions of section 530 of Public Law 95-600, as amended,
do not apply
.

(2) Payroll period. For purposes of this section the term "payroll period" means a
period for which a payment of wages is ordinarily made to the employee by the employee's
employer, and the term "miscellaneous payroll period" means a payroll period other
than a daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual
payroll period.

(3) Employee. For purposes of this section the term "employee" means any resident
individual performing services for an employer, either within or without, or both within
and without the state of Minnesota, and every nonresident individual performing services
within the state of Minnesota, the performance of which services constitute, establish, and
determine the relationship between the parties as that of employer and employee. As
used in the preceding sentence, the term "employee" includes an officer of a corporation,
and an officer, employee, or elected official of the United States, a state, or any political
subdivision thereof, or the District of Columbia, or any agency or instrumentality of
any one or more of the foregoing.

(4) Employer. For purposes of this section the term "employer" means any person,
including individuals, fiduciaries, estates, trusts, partnerships, limited liability companies,
and corporations transacting business in or deriving any income from sources within
the state of Minnesota for whom an individual performs or performed any service, of
whatever nature, as the employee of such person, except that if the person for whom the
individual performs or performed the services does not have control of the payment of
the wages for such services, the term "employer," except for purposes of paragraph (1),
means the person having control of the payment of such wages. As used in the preceding
sentence, the term "employer" includes any corporation, individual, estate, trust, or
organization which is exempt from taxation under section 290.05 and further includes, but
is not limited to, officers of corporations who have control, either individually or jointly
with another or others, of the payment of the wages.

(5) Number of withholding exemptions claimed. For purposes of this section, the
term "number of withholding exemptions claimed" means the number of withholding
exemptions claimed in a withholding exemption certificate in effect under subdivision
5, except that if no such certificate is in effect, the number of withholding exemptions
claimed shall be considered to be zero.

EFFECTIVE DATE.

This section is effective for wages paid after December 31,
2008.

Sec. 18.

Minnesota Statutes 2006, section 291.03, subdivision 1, is amended to read:


Subdivision 1.

Tax amount.

The tax imposed shall be an amount equal to the
proportion of the maximum credit for state death taxes computed under section 2011 of
the Internal Revenue Code, as amended through December 31, 2000, but using Minnesota
adjusted taxable estate instead of federal adjusted taxable estate, as the Minnesota gross
estate bears to the value of the federal gross estate. The tax determined under this
paragraph shall not be greater than the amount computed by applying the rates and
brackets under section 2001(c) of the Internal Revenue Code to the sum of the Minnesota
adjusted gross taxable estate and subtracting adjusted taxable gifts, as defined in section
2001(b) of the Internal Revenue Code, and then subtracting
the federal credit allowed
under section 2010 of the Internal Revenue Code of 1986, as amended through December
31, 2000. For the purposes of this section, expenses which are deducted for federal income
tax purposes under section 642(g) of the Internal Revenue Code as amended through
December 31, 2002, are not allowable in computing the tax under this chapter.

EFFECTIVE DATE.

This section is effective retroactively as a clarification and
applies to estates of decedents dying after December 31, 2005.

Sec. 19. REPEALER.

(a) Minnesota Statutes 2006, section 290.191, subdivision 4, is repealed.

(b) Minnesota Statutes 2006, section 10A.322, subdivision 4, is repealed.

(c) Minnesota Statutes 2006, section 290.06, subdivision 23, is repealed.

EFFECTIVE DATE.

Paragraph (a) is effective for taxable years beginning after
December 31, 2008.

Paragraph (b) is effective June 30, 2008.

Paragraph (c) is effective for refund claims based on contributions made after June
30, 2008.

ARTICLE 4

LOCAL DEVELOPMENT

Section 1.

[116J.8732] SEED CAPITAL INVESTMENT CREDIT;
COMMISSIONER'S RESPONSIBILITIES.

Subdivision 1.

Scope.

This section establishes rules that businesses must satisfy to
qualify for the seed capital investment credit under section 290.06, subdivision 34, and the
commissioner's responsibility for certifying the qualifying businesses.

Subd. 2.

Definitions.

(a) For purposes of this section and section 290.06,
subdivision 34, the following terms have the meanings given.

(b) "Border city" means a city qualifying to designate a border city development
zone under section 469.1731.

(c) "Pass-through entity" means a corporation that for the applicable tax year is
treated as an S corporation or a general partnership, limited partnership, limited liability
partnership, trust, or limited liability company and which for the applicable taxable year is
not taxed as a corporation under chapter 290.

(d) "Primary sector business" means a qualified business that through the
employment of knowledge or labor adds value to a product, process, or service and
increases revenues to a Minnesota business generated by sales of products or services to
customers outside of the state or increases revenues to a qualified business the customers
of which previously were unable to acquire, or had limited availability of the product or
service from a Minnesota provider.

(e) "Qualified business" means a business certified by the commissioner as meeting
the requirements of subdivision 3.

Subd. 3.

Qualified business.

(a) The commissioner shall certify whether a business
that has requested to become a qualified business meets the requirements of paragraph (b).

(b) For purposes of this section, a qualified business must be a primary sector
business, other than a real estate investment trust, that:

(1) is incorporated or its satellite operation is incorporated as a for-profit corporation
or is a partnership, limited partnership, limited liability company, limited liability
partnership, or joint venture;

(2) is in compliance with the requirements for filings with the commissioner of
commerce under the securities laws of this state;

(3) has Minnesota residents as a majority of its employees in its principal office or
the satellite operation, which is located in a border city;

(4) has its principal office in a border city and has the majority of its business
activity performed in a border city, except sales activity, or has a significant operation in
a border city that has or is projected to have more than ten employees or $150,000 of
sales annually; and

(5) relies on innovation, research, or the development of new products and processes
in its plans for growth and profitability.

(c) The commissioner shall establish the necessary forms and procedures for
certifying qualified businesses.

(d) A qualified business may apply to the commissioner for a recertification. Only
one recertification is available to a qualified business. The application for recertification
must be filed with the commissioner within 90 days before the original certification
expiration date. The recertification issued by the director must comply with the provisions
of paragraph (e).

(e) The commissioner shall issue a certification letter to a business the commissioner
determines is a qualified business. The certification letter must include:

(1) the certification effective date; and

(2) the certification expiration date, which may not be more than four years from the
certification effective date.

Subd. 4.

Seed capital investment credit reporting.

Within 30 days after the date
that an investment in a qualified business is purchased, the qualified business shall file with
the commissioner and the commissioner of revenue and provide to the investor completed
forms prescribed by the commissioner of revenue that show as to each investment in the
qualified business the following:

(1) the name, address, and Social Security number of the taxpayer who made the
investment; and

(2) the dollar amount paid for the investment by the taxpayer.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Minnesota Statutes 2006, section 216B.1612, is amended by adding a
subdivision to read:


Subd. 9.

Local government and political subdivision powers.

A Minnesota
political subdivision or local government may plan, develop, purchase, acquire, construct,
and own a C-BED project and may sell output from that project as provided for in this
section. A Minnesota political subdivision or local government may operate, maintain,
improve, and expand the C-BED project subject to any restrictions in this section.

Sec. 3.

[216F.09] COUNTY; WIND ENERGY CONVERSION SYSTEM.

A county may own, construct, acquire, purchase, issue bonds and certificates of
indebtedness for, maintain, and operate a wind energy conversion system, or a portion of a
wind energy conversion system. A county may purchase and sell electricity from a wind
energy conversion system only at wholesale on terms and conditions as the county board
deems is in the best interests of the public. With respect to any wind energy conversion
system, or any portion of a wind energy conversion system, a county may exercise
the powers granted to a municipal power agency and to a city under sections 453.52,
subdivisions 1, 6, and 9; 453.54, subdivision 10; 453.58, subdivision 4; and 453.59, except
that output from that wind energy conversion system may not be sold, transmitted, or
distributed at retail, or provided for end use from an offsite facility by the county. A
county's onsite generation authorized under this subdivision is limited to a total of ten
megawatts. Nothing in this section modifies the exclusive service territories or exclusive
right to serve as provided in sections 216B.37 to 216B.43.

Sec. 4.

Minnesota Statutes 2007 Supplement, section 268.19, subdivision 1, is
amended to read:


Subdivision 1.

Use of data.

(a) Except as provided by this section, data gathered
from any person under the administration of the Minnesota Unemployment Insurance Law
are private data on individuals or nonpublic data not on individuals as defined in section
13.02, subdivisions 9 and 12, and may not be disclosed except according to a district court
order or section 13.05. A subpoena is not considered a district court order. These data
may be disseminated to and used by the following agencies without the consent of the
subject of the data:

(1) state and federal agencies specifically authorized access to the data by state
or federal law;

(2) any agency of any other state or any federal agency charged with the
administration of an unemployment insurance program;

(3) any agency responsible for the maintenance of a system of public employment
offices for the purpose of assisting individuals in obtaining employment;

(4) the public authority responsible for child support in Minnesota or any other
state in accordance with section 256.978;

(5) human rights agencies within Minnesota that have enforcement powers;

(6) the Department of Revenue to the extent necessary for its duties under Minnesota
laws;

(7) public and private agencies responsible for administering publicly financed
assistance programs for the purpose of monitoring the eligibility of the program's
recipients;

(8) the Department of Labor and Industry and the Division of Insurance Fraud
Prevention in the Department of Commerce for uses consistent with the administration of
their duties under Minnesota law;

(9) local and state welfare agencies for monitoring the eligibility of the data subject
for assistance programs, or for any employment or training program administered by those
agencies, whether alone, in combination with another welfare agency, or in conjunction
with the department or to monitor and evaluate the statewide Minnesota family investment
program by providing data on recipients and former recipients of food stamps or food
support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance
under chapter 119B, or medical programs under chapter 256B, 256D, or 256L;

(10) local and state welfare agencies for the purpose of identifying employment,
wages, and other information to assist in the collection of an overpayment debt in an
assistance program;

(11) local, state, and federal law enforcement agencies for the purpose of ascertaining
the last known address and employment location of an individual who is the subject of
a criminal investigation;

(12) the United States Citizenship and Immigration Services has access to data on
specific individuals and specific employers provided the specific individual or specific
employer is the subject of an investigation by that agency;

(13) the Department of Health for the purposes of epidemiologic investigations; and

(14) the Department of Corrections for the purpose of postconfinement employment
tracking of individuals who had been committed to the custody of the commissioner
of corrections.; and

(15) the state auditor to the extent necessary to conduct audits of job opportunity
building zones as required under section 469.3201.

(b) Data on individuals and employers that are collected, maintained, or used by
the department in an investigation under section 268.182 are confidential as to data
on individuals and protected nonpublic data not on individuals as defined in section
13.02, subdivisions 3 and 13, and must not be disclosed except under statute or district
court order or to a party named in a criminal proceeding, administrative or judicial, for
preparation of a defense.

(c) Data gathered by the department in the administration of the Minnesota
unemployment insurance program must not be made the subject or the basis for any
suit in any civil proceedings, administrative or judicial, unless the action is initiated by
the department.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 5.

Minnesota Statutes 2006, section 270B.15, is amended to read:


270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR AND STATE
AUDITOR
.

(a) Returns and return information must be disclosed to the legislative auditor to the
extent necessary for the legislative auditor to carry out sections 3.97 to 3.979.

(b) The commissioner must disclose return information, including the report
required under section 289A.12, subdivision 15, to the state auditor to the extent necessary
to conduct audits of job opportunity building zones as required under section 469.3201.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 6.

Minnesota Statutes 2006, section 289A.12, is amended by adding a subdivision
to read:


Subd. 15.

Report of job opportunity zone benefits; penalty for failure to file
report.

(a) By October 15 of each year, every qualified business, as defined under section
469.310, subdivision 11, must file with the commissioner, on a form prescribed by the
commissioner, a report listing the tax benefits under section 469.315 received by the
business for the previous year.

(b) The commissioner shall send notice to each business that fails to timely submit
the report required under paragraph (a). The notice shall demand that the business submit
the report within 60 days. Where good cause exists, the commissioner may extend
the period for submitting the report as long as a request for extension is filed by the
business before the expiration of the 60-day period. The commissioner shall notify the
commissioner of the Department of Employment and Economic Development and the
appropriate job opportunity subzone administrator whenever notice is sent to a business
under this paragraph.

(c) A business that fails to submit the report as required under paragraph (b) is no
longer a qualified business under section 469.310, subdivision 11, and is subject to the
repayment provisions of section 469.319.

EFFECTIVE DATE.

This section is effective beginning with reports required to be
filed October 15, 2008.

Sec. 7.

Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
to read:


Subd. 34.

Seed capital investment credit.

(a) An individual, estate, or trust is
allowed a credit against the tax imposed by this chapter for investments in a qualifying
business certified under section 116J.8732, subdivision 3. The credit equals 45 percent
of the amount invested by the taxpayer in qualified businesses during the taxable year.
The credit must not exceed $112,500 for each taxable year.

(b) A pass-through entity that invests in a qualified business must be considered to
be the taxpayer for purposes of the investment limitations in this subdivision and the
amount of the credit allowed with respect to a pass-through entity's investment in a
qualified business must be determined at the pass-through entity level. The amount of the
total credit determined at the pass-through entity level must be allowed to the members in
proportion to their respective interests in the pass-through entity.

(c) An investment made in a qualified business from the assets of a retirement
plan is deemed to be the retirement plan participant's investment for the purpose of this
subdivision if a separate account is maintained for the plan participant and the participant
directly controls where the account assets are invested.

(d) The investment must be made on or after the certification effective date and
must be at risk in the business to be eligible for the tax credit under this subdivision.
An investment for which a credit is received under this subdivision must remain in the
qualified business for at least three years. Investments placed in escrow do not qualify
for the credit.

(e) The entire amount of an investment for which a credit is claimed under this
subdivision must be expended by the qualified business for plant, equipment, research and
development, marketing and sales activity, or working capital for the qualified business.

(f) A taxpayer who owns a controlling interest in the qualified business or who
receives more than 50 percent of the taxpayer's gross annual income from the qualified
business is not entitled to a credit under this subdivision. A member of the immediate
family of a taxpayer disqualified by this subdivision is not entitled to the credit under this
subdivision. For purposes of this subdivision, "immediate family" means the taxpayer's
spouse, parent, sibling, or child or the spouse of any such person.

(g) The commissioner may disallow any credit otherwise allowed under this
subdivision if any representation by a business in the application for certification as a
qualified business proves to be false or if the taxpayer or qualified business fails to satisfy
any conditions under this subdivision or section 116J.8732 or any conditions consistent
with those requirements otherwise determined by the commissioner. The commissioner
has four years after the due date of the return or after the return was filed, whichever
period expires later, to audit the credit and assess additional tax that may be found due
to failure to comply with the provisions of this subdivision and section 116J.8732. The
amount of any credit disallowed by the commissioner that reduced the taxpayer's income
tax liability for any or all applicable tax years, plus penalty and interest as provided under
chapter 289A, must be paid by the taxpayer.

(h) If the amount of the credit under this subdivision for any taxable year exceeds
the limitations under paragraph (a), the excess is a credit carryover to each of the four
succeeding taxable years. The entire amount of the excess unused credit for the taxable
year must be carried first to the earliest of the taxable years to which the credit may be
carried. The amount of the unused credit that may be added under this paragraph may
not exceed the taxpayer's liability for tax, less the credit for the taxable year. Each year,
the aggregate amount of seed capital investment tax credit allowed for investments under
this subdivision is limited to allocations that a border city has available for tax reductions
in border city enterprise zones under section 469.169. The city must annually notify the
commissioner of the amount of its section 469.169 allocations that it wishes to use to
provide credits under this paragraph and the commissioner, after verifying the available
allocation, shall implement the limit under this paragraph. If investments in qualified
businesses reported to the commissioner exceed the limit on credits for investments
imposed by this subdivision, the credit must be allowed to taxpayers in the chronological
order of their investments in qualified businesses as determined from the forms filed
under section 116J.8732.

EFFECTIVE DATE.

This section is effective July 1, 2008, for taxable years
beginning after December 31, 2007, and only applies to investments made after the
qualified business has been certified by the commissioner of employment and economic
development.

Sec. 8.

[373.48] FINANCING ENERGY PURCHASE CONTRACTS AND
PARTICIPATION IN GENERATION AND TRANSMISSION PROJECTS.

Subdivision 1.

Definitions.

For the purpose of this section, "project" means a facility
that generates electricity from renewable energy sources listed in section 216B.1691,
subdivision 1, paragraph (a), clause (1).

Subd. 2.

Energy purchase contracts; generation projects.

A county may, for
itself or in cooperation with other counties, enter into agreements for the purchase of
electrical energy from one or more projects, and may enter into agreements with a utility
for the purchase and sale of the electrical energy so purchased. Agreements may be for a
term of one year to 20 years. A county may also acquire an ownership interest in a project
and may enter into agreements for the purchase and sale of electrical energy produced. A
county may not sell, transmit, or distribute the electrical energy at retail or provide for end
use from an offsite facility by the county or counties of the electrical energy. A county's
onsite generation authorized under this subdivision is limited to a total of ten megawatts.
Nothing in this section modifies the exclusive service territories or exclusive right to
serve as provided in sections 216B.37 to 216B.43. The energy to be purchased by a
county under agreements entered into under this section and the energy produced by the
county's interest in projects shall not in any year exceed the total amount of energy used
by the county for its own facilities in the immediately preceding year, regardless of the
source from which energy was obtained.

Subd. 3.

Joint purchase of energy and acquisition of generation projects;
financing.

A county may enter into agreements under section 471.59 with other counties
for joint purchase of energy or joint acquisition of interests in projects. A county may
annually levy an ad valorem tax for the purpose of paying the cost of energy purchased or
acquiring interests in projects in an amount not exceeding 0.015 percent of the market
value of taxable property in the county. A county that enters into a multiyear agreement
for purchase of energy or acquires an interest in a project may finance the estimated cost
of the energy to be purchased during the term of the agreement or the cost to the county
of the interest in the project by the issuance of general obligation bonds of the county,
provided that the annual debt service on all bonds issued under this section, together
with the amounts to be paid by the county in any year for the purchase of energy under
agreements entered into under this section, shall not exceed the amount of taxes authorized
by this section. An agreement entered into under section 471.59 as provided by this
section may provide that each county shall issue bonds to pay their respective shares of
the cost of the projects, or that one of the counties shall issue bonds to pay the full costs of
the project, and that the other participating counties shall levy the tax authorized under
this subdivision and pledge the collections of the tax to the county that issues the bonds.
Bonds issued under this section may be issued without an election and shall not constitute
net debt of any participating county.

Sec. 9.

Minnesota Statutes 2006, section 383E.20, is amended to read:


383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS.

The Anoka County Board may, by resolution adopted by a four-sevenths vote,
issue and sell general obligation bonds of the county in the manner provided in chapter
475 to acquire, better, and construct county library buildings. The bonds shall not be
subject to the requirements of sections 475.57 to 475.59. The maturity years and amounts
and interest rates of each series of bonds shall be fixed so that the maximum amount of
principal and interest to become due in any year, on the bonds of that series and of all
outstanding series issued by or for the purposes of libraries, shall not exceed an amount
equal to the lesser of (i) .01 percent of the taxable market value of all taxable property in
the county, excluding any taxable property taxed by any city for the support of any free
public library, or (ii) $1,250,000. When the tax levy authorized in this section is collected,
it shall be appropriated and credited to a debt service fund for the bonds. The tax levy for
the debt service fund under section 475.61 shall be reduced by the amount available or
reasonably anticipated to be available in the fund to make payments otherwise payable
from the levy pursuant to section 475.61.

EFFECTIVE DATE.

This section is effective the day after the governing body
of Anoka County and its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 10.

Minnesota Statutes 2006, section 469.033, subdivision 6, is amended to read:


Subd. 6.

Operation area as taxing district, special tax.

All of the territory
included within the area of operation of any authority shall constitute a taxing district for
the purpose of levying and collecting special benefit taxes as provided in this subdivision.
All of the taxable property, both real and personal, within that taxing district shall be
deemed to be benefited by projects to the extent of the special taxes levied under this
subdivision. Subject to the consent by resolution of the governing body of the city in and
for which it was created, an authority may levy a tax upon all taxable property within that
taxing district. The tax shall be extended, spread, and included with and as a part of
the general taxes for state, county, and municipal purposes by the county auditor, to be
collected and enforced therewith, together with the penalty, interest, and costs. As the tax,
including any penalties, interest, and costs, is collected by the county treasurer it shall be
accumulated and kept in a separate fund to be known as the "housing and redevelopment
project fund." The money in the fund shall be turned over to the authority at the same time
and in the same manner that the tax collections for the city are turned over to the city, and
shall be expended only for the purposes of sections 469.001 to 469.047. It shall be paid
out upon vouchers signed by the chair of the authority or an authorized representative.
The amount of the levy shall be an amount approved by the governing body of the city, but
shall not exceed 0.0144 0.02 percent of taxable market value for the current levy year,
notwithstanding section 273.032
. The authority shall each year formulate and file a budget
in accordance with the budget procedure of the city in the same manner as required of
executive departments of the city or, if no budgets are required to be filed, by August 1.
The amount of the tax levy for the following year shall be based on that budget.

EFFECTIVE DATE.

This section is effective for property taxes payable in 2009.

Sec. 11.

Minnesota Statutes 2006, section 469.177, is amended by adding a subdivision
to read:


Subd. 13.

Correction of errors.

(a) If the county auditor, as a result of an error
or mistake, decertifies a district, fails to certify a district, incorrectly certifies a district,
or otherwise fails to correctly compute the amount of increment, the county auditor may
undertake one or more of the following actions to correct the error or mistake:

(1) certify the original tax capacity of the affected parcels at the appropriate value
for a later taxes payable year and extend the duration of the district, in whole or in part,
to compensate;

(2) recertify the affected parcels and extend duration of the district, in whole or in
part, to compensate;

(3) recertify or correct the original tax capacity rate for the district; or

(4) take other appropriate action so that the amount of increment compensates for or
offsets the error or mistake and correctly reflects application of the law.

(b) At least 30 days before exercising authority under this subdivision, the county
auditor must notify the authority and the municipality, in writing, of the intent to do so,
including supporting information to describe reason for the proposed action. The authority
and municipality may waive the time requirement of this paragraph. If the city or the
authority objects before expiration of the 30-day period, the matter must be submitted to
the commissioner of revenue for a decision or resolution of the dispute. The commissioner
of revenue shall consult with the Office of the State Auditor before making a decision.

(c) The county auditor must notify the commissioner of revenue and the Office
of the State Auditor of corrections made under this subdivision. The notification must
be made in the form and manner and at the time prescribed by the commissioner. The
commissioner shall incorporate the corrections in the tax increment financing district tax
list supplement, as appropriate.

EFFECTIVE DATE.

This section is effective the day following final enactment
and applies to all tax increment financing districts, regardless of when the request for
certification was made.

Sec. 12.

Minnesota Statutes 2006, section 469.312, is amended by adding a subdivision
to read:


Subd. 6.

Termination of designation of qualified business.

No person will be
deemed to be a qualified business eligible for the benefits provided in sections 469.310
to 469.320 unless the person has entered into a business subsidy agreement with a local
government unit as provided in section 469.310, subdivision 11, prior to June 1, 2008.

Sec. 13.

Minnesota Statutes 2006, section 469.319, is amended to read:


469.319 REPAYMENT OF TAX BENEFITS BY BUSINESSES THAT NO
LONGER OPERATE IN A ZONE
.

Subdivision 1.

Repayment obligation.

A business must repay the amount of the
total tax reduction benefits listed in section 469.315 and any refund under section 469.318
in excess of tax liability,
received during the two years immediately before it (1) ceased to
operate in the zone, if the business:

(1) received tax reductions authorized by section 469.315; and

(2)(i) did not meet the goals specified in an agreement entered into with the applicant
that states any obligation the qualified business must fulfill in order to be eligible for tax
benefits. The commissioner of employment and economic development may extend for
up to one year the period for meeting any goals provided in an agreement. The applicant
may extend the period for meeting other goals by documenting in writing the reason
for the extension and attaching a copy of the document to its next annual report to the
commissioner of employment and economic development; or

(ii) ceased to operate its facility located within the job opportunity building zone
perform a substantial level of activities described in the business subsidy agreement, or
(2) otherwise ceases ceased to be or is not a qualified business, other than those subject to
the provisions of section 469.3191
.

Subd. 1a.

Repayment obligation of businesses not operating in zone.

Persons
that receive benefits without operating a business in a zone are subject to repayment
under this section if the business for which those benefits relate is subject to repayment
under this section. Such persons are deemed to have ceased performing in the zone on
the same day that the qualified business for which the benefits relate becomes subject to
repayment under subdivision 1.

Subd. 2.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Business" means any person who that received tax benefits enumerated in
section 469.315.

(c) "Commissioner" means the commissioner of revenue.

(d) "Persons that receive benefits without operating a business in a zone" means
persons that claim benefits under section 469.316, subdivision 2 or 4, as well as persons
that own property leased by a qualified business and are eligible for benefits under section
272.02, subdivision 64, or 297A.68, subdivision 37, paragraph (b).

Subd. 3.

Disposition of repayment.

The repayment must be paid to the state to
the extent it represents a state tax reduction and to the county to the extent it represents a
property tax reduction. Any amount repaid to the state must be deposited in the general
fund. Any amount repaid to the county for the property tax exemption must be distributed
to the local governments taxing authorities with authority to levy taxes in the zone in the
same manner provided for distribution of payment of delinquent property taxes. Any
repayment of local sales taxes must be repaid to the commissioner for distribution to the
city or county imposing the local sales tax.

Subd. 4.

Repayment procedures.

(a) For the repayment of taxes imposed under
chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
file an amended return with the commissioner of revenue and pay any taxes required
to be repaid within 30 days after ceasing to do business in the zone becoming subject
to repayment under this section
. The amount required to be repaid is determined by
calculating the tax for the period or periods for which repayment is required without
regard to the exemptions and credits allowed under section 469.315.

(b) For the repayment of taxes imposed under chapter 297B, a business must pay any
taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner
of revenue, within 30 days after ceasing to do business in the zone becoming subject
to repayment under this section
.

(c) For the repayment of property taxes, the county auditor shall prepare a tax
statement for the business, applying the applicable tax extension rates for each payable
year and provide a copy to the business and to the taxpayer of record. The business must
pay the taxes to the county treasurer within 30 days after receipt of the tax statement.
The business or the taxpayer of record may appeal the valuation and determination of the
property tax to the Tax Court within 30 days after receipt of the tax statement.

(d) The provisions of chapters 270C and 289A relating to the commissioner's
authority to audit, assess, and collect the tax and to hear appeals are applicable to the
repayment required under paragraphs (a) and (b). The commissioner may impose civil
penalties as provided in chapter 289A, and the additional tax and penalties are subject to
interest at the rate provided in section 270C.40, from 30 days after ceasing to do business
in the job opportunity building zone
becoming subject to repayment under this section
until the date the tax is paid.

(e) If a property tax is not repaid under paragraph (c), the county treasurer shall add
the amount required to be repaid to the property taxes assessed against the property for
payment in the year following the year in which the treasurer discovers that the business
ceased to operate in the job opportunity building zone
auditor provided the statement
under paragraph (c)
.

(f) For determining the tax required to be repaid, a tax reduction of a state or local
sales or use tax
is deemed to have been received on the date that the tax would have
been due if the taxpayer had not been entitled to the exemption or on the date a refund
was issued for a refundable tax credit.
good or service was purchased or first put to a
taxable use. In the case of an income tax or franchise tax, including the credit payable
under section 469.318, a reduction of tax is deemed to have been received for the two
most recent tax years that have ended prior to the date that the business became subject to
repayment under this section. In the case of a property tax, a reduction of tax is deemed to
have been received for the taxes payable in the year that the business became subject to
repayment under this section and for the taxes payable in the prior year.

(g) The commissioner may assess the repayment of taxes under paragraph (d)
any time within two years after the business ceases to operate in the job opportunity
building zone
becomes subject to repayment under subdivision 1, or within any period of
limitations for the assessment of tax under section 289A.38, whichever period is later. The
county auditor may send the statement under paragraph (c) any time within three years
after the business becomes subject to repayment under subdivision 1.

(h) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business becomes subject to
repayment under this section nor for any year thereafter. Property is not exempt from tax
under section 272.02, subdivision 64, for any taxes payable in the year following the year
in which the property became subject to repayment under this section nor for any year
thereafter. A business is not eligible for any sales tax benefits beginning with goods
or services purchased or first put to a taxable use on the day that the business becomes
subject to repayment under this section.

Subd. 5.

Waiver authority.

(a) The commissioner may waive all or part of a
repayment required under subdivision 1, if the commissioner, in consultation with
the commissioner of employment and economic development and appropriate officials
from the local government units in which the qualified business is located, determines
that requiring repayment of the tax is not in the best interest of the state or the local
government units and the business ceased operating as a result of circumstances beyond
its control including, but not limited to:

(1) a natural disaster;

(2) unforeseen industry trends; or

(3) loss of a major supplier or customer.

(b)(1) The commissioner shall waive repayment required under subdivision 1a if
the commissioner has waived repayment by the operating business under subdivision 1,
unless the person that received benefits without having to operate a business in the zone
was a contributing factor in the qualified business becoming subject to repayment under
subdivision 1;

(2) the commissioner shall waive the repayment required under subdivision 1a, even
if the repayment has not been waived for the operating business if:

(i) the person that received benefits without having to operate a business in the zone
and the business that operated in the zone are not related parties as defined in section
267(b) of the Internal Revenue Code of 1986, as amended through December 31, 2007; and

(ii) actions of the person were not a contributing factor in the qualified business
becoming subject to repayment under subdivision 1.

Subd. 6.

Reconciliation.

Where this section is inconsistent with section 116J.994,
subdivision 3
, paragraph (e), or 6, or any other provisions of sections 116J.993 to
116J.995, this section prevails.

EFFECTIVE DATE.

The amendment to subdivision 4, paragraph (c), of this
section is effective the day following final enactment. The amendment to subdivision
4, paragraph (f), is effective retroactively from January 1, 2008, and applies to all
businesses that become subject to this section in 2008. The rest of this section is effective
retroactively from January 1, 2004, except that for violations that occur before the day
following final enactment, this section does not apply if the business has repaid the
benefits or the commissioner has granted a waiver.

Sec. 14.

[469.3191] BREACH OF AGREEMENTS BY BUSINESSES THAT
CONTINUE TO OPERATE IN ZONE.

(a) A "business in violation of its business subsidy agreement but not subject to
section 469.319" means a business that is operating in violation of the business subsidy
agreement but maintains a level of operations in the zone that does not subject it to the
repayment provisions of section 469.319, subdivision 1, clause (1).

(b) A business described in paragraph (a) that does not sign a new or amended
business subsidy agreement, as authorized under paragraph (h), is subject to repayment
of benefits under section 469.319 from the day that it ceases to perform in the zone a
substantial level of activities described in the business subsidy agreement.

(c) A business described in paragraph (a) ceases being a qualified business after the
last day that it has to meet the goals stated in the agreement.

(d) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business is no longer a qualified
business under paragraph (c), and thereafter. A business is not eligible for sales tax
benefits beginning with goods or services purchased or put to a taxable use on the day that
it is no longer a qualified business under paragraph (c). Property is not exempt from tax
under section 272.02, subdivision 64, for any taxes payable in the year following the year
in which the business is no longer a qualified business under paragraph (c), and thereafter.

(e) A business described in paragraph (a) that wants to resume eligibility for benefits
under section 469.315 must request that the commissioner of employment and economic
development determine the length of time that the business is ineligible for benefits. The
commissioner shall determine the length of ineligibility by applying the proportionate
level of performance under the agreement to the total duration of the zone as measured
from the date that the business subsidy agreement was executed. The length of time
must not be less than one full year for each tax benefit listed in section 469.315. The
commissioner of employment and economic development and the appropriate local
government officials shall consult with the commissioner of revenue to ensure that the
period of ineligibility includes at least one full year of benefits for each tax.

(f) The length of ineligibility determined under paragraph (e) must be applied by
reducing the zone duration for the property by the duration of the ineligibility.

(g) The zone duration of property that has been adjusted under paragraph (f) must
not be altered again to permit the business additional benefits under section 469.315.

(h) A business described in paragraph (a) becomes eligible for benefits available
under section 469.315 by entering into a new or amended business subsidy agreement
with the appropriate local government unit. The new or amended agreement must cover
a period beginning from the date of ineligibility under the original business subsidy
agreement, through the zone duration determined by the commissioner under paragraph
(f). No exemption of property taxes under section 272.02, subdivision 64, is available
under the new or amended agreement for property taxes due or paid before the date of
the final execution of the new or amended agreement, but unpaid taxes due after that
date need not be paid.

(i) A business that violates the terms of an agreement authorized under paragraph
(h) is permanently barred from seeking benefits under section 469.315 and is subject to
the repayment provisions under section 469.319 effective from the day that the business
ceases to operate as a qualified business in the zone under the second agreement.

EFFECTIVE DATE.

This section is effective retroactively from January 1, 2004.
For violations that occur before the day following final enactment, this section does not
apply if the business has repaid the benefits or the commissioner has granted a waiver.

Sec. 15.

[469.3192] PROHIBITION AGAINST AMENDMENTS TO BUSINESS
SUBSIDY AGREEMENT.

Except as authorized under section 469.3191, under no circumstance shall terms
of any agreement required as a condition for eligibility for benefits listed under section
469.315 be amended to change job creation, job retention, or wage goals included in
the agreement.

EFFECTIVE DATE.

This section is effective the day following final enactment
and applies to all agreements executed before, on, or after the effective date.

Sec. 16.

[469.3193] CERTIFICATION OF CONTINUING ELIGIBILITY FOR
JOBZ BENEFITS.

(a) By December 1 of each year, every qualified business must certify to the
commissioner of revenue, on a form prescribed by the commissioner of revenue, whether
it is in compliance with any agreement required as a condition for eligibility for benefits
listed under section 469.315. A business that fails to submit the certification, or any
business, including those still operating in the zone, that submits a certification that
the commissioner of revenue later determines materially misrepresents the business's
compliance with the agreement, is subject to the repayment provisions under section
469.319 from January 1 of the year in which the report is due or the date that the business
became subject to section 469.319, whichever is earlier. Any such business is permanently
barred from obtaining benefits under section 469.315. For purposes of this section, the bar
applies to an entity and also applies to any individuals or entities that have an ownership
interest of at least 20 percent of the entity.

(b) Before the sanctions under paragraph (a) apply to a business that fails to
submit the certification, the commissioner of revenue shall send notice to the business,
demanding that the certification be submitted within 30 days and advising the business
of the consequences for failing to do so. The commissioner of revenue shall notify
the commissioner of employment and economic development and the appropriate job
opportunity subzone administrator whenever notice is sent to a business under this
paragraph.

(c) The certification required under this section is public.

(d) The commissioner of revenue shall promptly notify the commissioner of
employment and economic development of all businesses that certify that they are not
in compliance with the terms of their business subsidy agreement and all businesses
that fail to file the certification.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 17.

Minnesota Statutes 2006, section 469.3201, is amended to read:


469.3201 JOBZ EXPENDITURE LIMITATIONS; AUDITS STATE
AUDITOR; AUDITS OF JOB OPPORTUNITY BUILDING ZONES AND
BUSINESS SUBSIDY AGREEMENTS
.

The Tax Increment Financing, Investment and Finance Division of the Office of the
State Auditor must annually audit the creation and operation of all job opportunity building
zones and business subsidy agreements entered into under Minnesota Statutes, sections
469.310 to 469.320. To the extent necessary to perform this audit, the state auditor may
request from the commissioner of revenue tax return information of taxpayers who are
eligible to receive tax benefits authorized under section 469.315. To the extent necessary
to perform this audit, the state auditor may request from the commissioner of employment
and economic development wage detail report information required under section 268.044
of taxpayers eligible to receive tax benefits authorized under section 469.315.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 18.

Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
to read:


Subd. 1n.

Obligations.

After July 1, 2008, in addition to other authority in this
section, the council may issue certificates of indebtedness, bonds, or other obligations
under this section in an amount not exceeding $33,000,000 for capital expenditures as
prescribed in the council's regional transit master plan and transit capital improvement
program and for related costs, including the costs of issuance and sale of the obligations.

EFFECTIVE DATE.

This section is effective July 1, 2008, and applies in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

Sec. 19.

Laws 1995, chapter 264, article 5, section 46, subdivision 2, is amended to
read:


Subd. 2.

Limitation on use of tax increments.

(a) All revenues derived from tax
increments must be used in accordance with the housing replacement district plan. The
revenues must be used solely to pay the costs of site acquisition, relocation, demolition
of existing structures, site preparation, and pollution abatement on parcels identified in
the housing replacement district plan, as well as public improvements and administrative
costs directly related to those parcels.

(b) Notwithstanding paragraph (a), the city of Minneapolis may use revenues
derived from tax increments from its housing replacement district for activities related
to parcels not identified in the housing replacement plan, but which would qualify for
inclusion under section 45, subdivision 1, paragraph (b), clauses (1) to (3).

(c) Notwithstanding paragraph (a), or any other provisions of sections 44 to 47, the
Crystal Economic Development Authority may use revenues derived from tax increments
from its housing replacement districts numbers one and two as if those districts were
housing districts under Minnesota Statutes, section 469.174, subdivision 11, provided that
eligible activities may be located anywhere in the city without regard to the boundaries of
housing replacement district numbers one and two or any project area.

EFFECTIVE DATE.

This section applies to revenues from the housing replacement
districts, regardless of when they were received, and is effective the day following final
enactment and for the city of Minneapolis, upon compliance by the governing body of
the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 3, and, for
the city of Crystal, upon compliance by the governing body of the city of Crystal with
Minnesota Statutes, section 645.021, subdivision 3.

Sec. 20.

Laws 2003, chapter 127, article 10, section 31, subdivision 1, is amended to
read:


Subdivision 1.

District extension.

(a) The governing body of the city of Hopkins
may elect to extend the duration of its redevelopment tax increment financing district
2-11 by up to four additional years.

(b) Notwithstanding any law to the contrary, effective upon approval of this
subdivision, no increments may be spent on activities located outside of the area of the
district, other than to pay administrative expenses.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 21.

Laws 2006, chapter 259, article 10, section 14, subdivision 1, is amended to
read:


Subdivision 1.

Definitions.

(a) "City" means the city of Minneapolis.

(b) "Homeless assistance tax increment district" means a contiguous area of the
city that:

(1) is no larger than six eight acres;

(2) is located within the boundaries of a city municipal development district; and

(3) contains at least two shelters for homeless persons that have been owned or
operated by nonprofit corporations that (i) are qualified charitable organizations under
section 501(c)(3) of the United States Internal Revenue Code, (ii) have operated such
homeless facilities within the district for at least five years, and (iii) have been recipients
of emergency services grants under Minnesota Statutes, section 256E.36.

EFFECTIVE DATE.

This section is effective upon compliance by the city of
Minneapolis with Minnesota Statutes, section 645.021.

Sec. 22.

Laws 2008, chapter 154, article 9, section 23, is amended to read:


Sec. 23. CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT;
SPECIAL RULES.

(a) If the city elects upon the adoption of a tax increment financing plan for a district,
the rules under this section apply to a redevelopment tax increment financing district
established by the city of Fridley or the housing and redevelopment authority of the city.
The redevelopment tax increment district includes the following parcels and adjacent
railroad property and shall be referred to as the Northstar Transit Station District: parcel
numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018,
223024120012, 223024120011, 223024120005, 223024120004, 223024120003,
223024120013, 223024120008, 223024120007, 223024120006, 223024130005,
223024130010, 223024130011, 223024130003, 153024440039, 153024440037,
153024440041, 153024440042, 223024110013, 223024110016, 223024110017,
223024140008, 223024130002, 223024420004, 223024410002, 223024410003,
223024110008, 223024110007, 223024110019, 223024110018, 223024110003,
223024140003, 223024140009, 223024140002, 223024140010, and 223024410007.

(b) The requirements for qualifying a redevelopment tax increment district under
Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located
within the Northstar Transit Station District, which are deemed eligible for inclusion
in a redevelopment tax increment district.

(c) In addition to the costs permitted by Minnesota Statutes, section 469.176,
subdivision 4j
, eligible expenditures within the Northstar Transit Station District include
those costs necessary to provide for the construction and land acquisition for a tunnel
under the Burlington Northern Santa Fe railroad tracks to allow access to the Northstar
Commuter Rail
.

(d) Notwithstanding the provisions of Minnesota Statutes, section 469.1763,
subdivision 2
, the city of Fridley may expend increments generated from its tax increment
financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota
Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment financing
districts Nos. 11, 12, and 13, but only within the Northstar Transit Station District.

(e) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3,
does not apply to the Northstar Transit Station District or to tax increment financing
districts Nos. 11, 12, and 13.

(f) The use of revenues for decertification under Minnesota Statutes, section
469.1763, subdivision 4, does not apply to tax increment financing districts Nos. 11,
12, and 13.

EFFECTIVE DATE.

This section is effective upon approval by the governing body
of the city of Fridley and upon compliance by the city with Minnesota Statutes, section
645.021, subdivision 3.

Sec. 23.

Laws 2008, chapter 154, article 9, section 24, is amended to read:


Sec. 24. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING;
EXPENDITURES OUTSIDE DISTRICT
.

Subdivision 1.

Expenditures outside district.

Notwithstanding the provisions
of Minnesota Statutes, section 469.1763, subdivision 2, the city of New Brighton may
expend increments generated from its tax increment financing district No. 26 to facilitate
eligible activities as permitted by Minnesota Statutes, section 469.176, subdivision 4e,
outside the boundaries of tax increment financing district No. 26, but only within the area
described in Laws 1998, chapter 389, article 11, section 24, subdivision 1, and commonly
referred to as the Northwest Quadrant. Minnesota Statutes, section 469.1763, subdivisions
3
and 4, do not apply to expenditures permitted by this section.

Subd. 2.

District duration extension.

Notwithstanding the provisions of Minnesota
Statutes, section 469.176, subdivision 1b, or any other law to the contrary, the duration
limits that apply to redevelopment tax increment financing districts numbers 31 and 32
established under Laws 1998, chapter 389, article 11, section 24, and hazardous substance
subdistricts numbers 31A and 32A established under Minnesota Statutes, sections 469.174
to 469.1799, are extended by four years.

EFFECTIVE DATE.

This section is effective upon approval by the governing
body of the city of New Brighton and compliance by the city with Minnesota Statutes,
section 645.021, subdivision 3.

Sec. 24. CITY OF AUSTIN; TAX INCREMENT FINANCING AUTHORITY.

Notwithstanding the requirements of Minnesota Statutes, section 469.1763,
subdivision 3, that activities must be undertaken within a five-year period from the date of
certification of tax increment financing district and notwithstanding the provisions of any
other law, the governing body of the city of Austin may use tax increments from its Tax
Increment Financing District No. 9 to reimburse the city's housing and redevelopment
authority for money spent disposing of soils and debris in the tax increment financing
district, as required by the Minnesota Pollution Control Agency.

EFFECTIVE DATE.

This section is effective upon compliance by the governing
body of the city of Austin with the requirements of Minnesota Statutes, section 645.021.

Sec. 25. BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR
RULE.

The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of a
tax increment financing district, are increased to a ten-year period for the Port Authority
of the City of Bloomington's Tax Increment Financing District No. 1-I, Bloomington
Central Station.

EFFECTIVE DATE.

This section is effective upon compliance by the governing
body of the Port Authority of the City of Bloomington with the requirements of Minnesota
Statutes, section 645.021.

Sec. 26. CITY OF DULUTH; EXTENSION OF TIME FOR ACTIVITY IN TAX
INCREMENT FINANCING DISTRICT NO. 20.

The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of
a tax increment financing district, must be considered to be met for Duluth Economic
Development Authority Tax Increment Financing District No. 20 if the activities are
undertaken within ten years from the date of certification of the district.

EFFECTIVE DATE.

This section is effective upon compliance by the governing
body of the city of Duluth with the requirements of Minnesota Statutes, section 645.021.

Sec. 27. CITY OF DULUTH; EXTENSION OF TIME FOR ACTIVITY IN TAX
INCREMENT FINANCING DISTRICT NO. 21.

The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of
a tax increment financing district, must be considered to be met for Duluth Economic
Development Authority Tax Increment Financing District No. 21 if the activities are
undertaken within ten years from the date of certification of the district.

EFFECTIVE DATE.

This section is effective upon compliance by the governing
body of the city of Duluth with the requirements of Minnesota Statutes, section 645.021.

Sec. 28. CITY OF WELLS; DISPOSITION OF TIF REVENUES.

Notwithstanding the provisions of Minnesota Statutes, section 469.174, subdivision
25, the following are deemed not to be "increments," "tax increments," or "revenues
derived from tax increment" for purposes of the redevelopment district in the city of
Wells, identified as Downtown Development Program 1, for amounts received after
decertification of the district:

(1) rents paid by private tenants for use of a building acquired in whole or in part
with tax increments; and

(2) proceeds from the sale of the building.

EFFECTIVE DATE.

This section is effective upon compliance by the governing
body of the city of Wells with the requirements of Minnesota Statutes, section 645.021.

Sec. 29. MULTICOUNTY HOUSING AND REDEVELOPMENT AUTHORITY
LEVY AUTHORITY.

Notwithstanding Minnesota Statutes, section 469.033, subdivision 6, or any other
law to the contrary, the governing body of the Northwest Minnesota Multicounty Housing
and Redevelopment Authority, upon approval by a two-thirds majority of all its members,
may levy an amount not to exceed 25 percent of the total levy permitted under Minnesota
Statutes, section 469.033, subdivision 6, without approval of that levy by the governing
body of the city or county within which the authority operates. The authority to levy the
remainder of the total levy permitted under that provision remains subject to approval
by the governing body of the city or county. For purposes of the levy authorized under
this section only, the Northwest Minnesota Multicounty Housing and Redevelopment
Authority is considered a special taxing jurisdiction as provided in Minnesota Statutes,
section 275.066.

EFFECTIVE DATE.

This section is effective for taxes levied in 2008, payable in
2009, and is repealed effective for taxes levied in 2013, payable in 2014, and thereafter.

Sec. 30. CITY OF OAKDALE; ORIGINAL TAX CAPACITY.

(a) The provisions of this section apply to redevelopment tax increment financing
districts created by the Housing and Redevelopment Authority in and for the city of
Oakdale in the areas comprised of the parcels with the following parcel identification
numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056;
3102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059;
3102921320060; and 3102921320061; and (2) 3102921330005 and 3102921330004.

(b) For a district subject to this section, the Housing and Redevelopment Authority
may, when requesting certification of the original tax capacity of the district under
Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district
be certified as the tax capacity of the land.

(c) The authority to request certification of a district under this section expires on
July 1, 2013.

EFFECTIVE DATE; LOCAL APPROVAL.

This section is effective upon
approval by the governing body of the city of Oakdale and compliance with Minnesota
Statutes, section 645.021, subdivision 3.

Sec. 31. DEED GRANTS.

$1,500,000 is appropriated to the commissioner of the Department of Employment
and Economic Development from the general fund for fiscal year 2009 for the purpose of
making grants of $750,000 each to the cities of Minneapolis and Saint Paul for capital
improvements or related costs of the Target Center and RiverCentre facilities. This
appropriation is onetime and is not added to the agency's base budget.

ARTICLE 5

PROPERTY TAXES

Section 1.

Minnesota Statutes 2006, section 216B.1646, is amended to read:


216B.1646 RATE REDUCTION ADJUSTMENT; PROPERTY TAX
REDUCTION CHANGE.

(a) The commission shall, by any method the commission finds appropriate, reduce
adjust
the rates each electric utility subject to rate regulation by the commission charges
its customers to reflect, on an ongoing basis, the amount by which each utility's property
tax, including the state general tax, if applicable, on the personal property of its electric
system from taxes payable in 2001 to taxes payable in 2002 is reduced or pipeline system
transporting or distributing natural gas is changed under this act
. The commission must
ensure that, to the extent feasible, each dollar of personal property tax reduction allocated
to Minnesota consumers retroactive to January 1, 2002,
change in taxes payable in 2009
and subsequent years
results in a dollar of savings adjustment to the utility's customers
rates
. A utility may voluntarily pass on any additional property tax savings allocated in
the same manner as approved by the commission under this paragraph.
The adjustment
under this paragraph is outside of a general rate case proceeding under section 216B.16.

(b) By April 10, 2002, Each utility shall may submit a filing to the commission
containing:

(1) certified information regarding the utility's property tax savings change allocated
to Minnesota retail customers; and

(2) a proposed method of passing these savings on adjusting rates to Minnesota
retail customers.

The utility shall provide the information in clause (1) to the commissioner of revenue at
the same time. The commissioner shall notify the commission within 30 days as to the
accuracy of the property tax data submitted by the utility.

(c) For purposes of this section, "personal property" means tools, implements, and
machinery of the generating plant. It does not apply to transformers, transmission lines,
distribution lines, or any other tools, implements, and machinery that are part of an electric
substation, wherever located
an electric system or of a pipeline system transporting or
distributing natural gas
.

Sec. 2.

Minnesota Statutes 2006, section 270C.85, subdivision 2, is amended to read:


Subd. 2.

Powers and duties.

The commissioner shall have and exercise the
following powers and duties in administering the property tax laws.

(a) Confer with, advise, and give the necessary instructions and directions to local
assessors and local boards of review throughout the state as to their duties under the
laws of the state.

(b) Direct proceedings, actions, and prosecutions to be instituted to enforce the
laws relating to the liability and punishment of public officers and officers and agents of
corporations for failure or negligence to comply with the provisions of the property tax
laws, and cause complaints to be made against local assessors, members of boards of
equalization, members of boards of review, or any other assessing or taxing officer, to the
proper authority, for their removal from office for misconduct or negligence of duty.

(c) Require county attorneys to assist in the commencement of prosecutions in
actions or proceedings for removal, forfeiture, and punishment, for violation of the
property tax laws in their respective districts or counties.

(d) Require town, city, county, and other public officers to report information as to
the assessment of property, and such other information as may be needful in the work of
the commissioner, in such form as the commissioner may prescribe.

(e) Transmit to the governor, on or before the third Monday in December of each
even-numbered year, and to each member of the legislature, on or before November
15 of each even-numbered year, the report of the department for the preceding years,
showing all the taxable property subject to the property tax laws and the value of the
same, in tabulated form.

(f) Inquire into the methods of assessment and taxation and ascertain whether the
assessors faithfully discharge their duties.

(g) Assist local assessors in determining the estimated market value of industrial
special-use property. For purposes of this paragraph, "industrial special-use property"
means property that:

(1) is designed and equipped for a particular type of industry;

(2) is not easily adapted to some other use due to the unique nature of the facilities;

(3) has facilities totaling at least 75,000 square feet in size; and

(4) has a total estimated market value of $10,000,000 or greater based on the
assessor's preliminary determination.

EFFECTIVE DATE.

This section is effective for assessment year 2009 and
thereafter, for taxes payable in 2010 and thereafter.

Sec. 3.

Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
to read:


Subd. 85.

Fergus Falls historical zone.

(a) Property located in the area of the
campus of the former state regional treatment center in the city of Fergus Falls, including
the five buildings and associated land that were acquired by the city prior to January 1,
2007, is exempt from ad valorem taxes levied under chapter 275.

(b) The exemption applies for 15 calendar years from the date specified by resolution
of the governing body of the city of Fergus Falls. For the final three assessment years of
the duration limit, the exemption applies to the following percentages of estimated market
value of the property:

(1) for the third to the last assessment year of the duration, 75 percent;

(2) for the second to the last assessment year of the duration, 50 percent; and

(3) for the last assessment year of the duration, 25 percent.

EFFECTIVE DATE.

This section is effective for property taxes payable in 2009
and thereafter.

Sec. 4.

Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
to read:


Subd. 86.

Electric generation facility; personal property.

(a) Notwithstanding
subdivision 9, paragraph (a), attached machinery and other personal property which is
part of a simple-cycle combustion-turbine electric generation facility that exceeds 150
megawatts of installed capacity and that meets the requirements of this subdivision is
exempt. At the time of construction, the facility must:

(1) utilize natural gas as a primary fuel;

(2) be owned by an electric generation and transmission cooperative;

(3) be located within one mile of an existing 16-inch natural gas pipeline and a
69-kilovolt and a 230-kilovolt high-voltage electric transmission line;

(4) be designed to provide peaking, emergency backup, or contingency services;

(5) have received a certificate of need under section 216B.243 demonstrating
demand for its capacity; and

(6) have received by resolution the approval from the governing bodies of the county
and the city in which the proposed facility is to be located for the exemption of personal
property under this subdivision.

(b) Construction of the facility must be commenced after January 1, 2008, and
before January 1, 2012. Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.

EFFECTIVE DATE.

This section is effective for the 2008 assessment payable in
2009 and thereafter.

Sec. 5.

[273.0645] COMMISSIONER REVIEW OF LOCAL ASSESSMENT
PRACTICES.

The commissioner of revenue must review the assessment practices in a taxing
jurisdiction if requested in writing by a qualifying number of property owners in that
taxing jurisdiction. The request must be signed by the greater of:

(1) one percent of the property owners; or

(2) five property owners.

The request must identify the city, town, or county and describe why a review is
sought for that taxing jurisdiction. The commissioner must conduct the review in a
reasonable amount of time and report the findings to the county board of the affected
county, to the affected city council or town board, if the review is for a specific city or
town, and to the property owner designated in the request as the person to receive the
report on behalf of all the property owners who signed the request. The commissioner
must also provide the report electronically to all property owners who signed the request
and provided an e-mail address in order to receive the report electronically.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 6.

Minnesota Statutes 2006, section 273.11, subdivision 1, is amended to read:


Subdivision 1.

Generally.

Except as provided in this section or section 273.17,
subdivision 1
, all property shall be valued at its market value. The market value as
determined pursuant to this section shall be stated such that any amount under $100 is
rounded up to $100 and any amount exceeding $100 shall be rounded to the nearest $100.
In estimating and determining such value, the assessor shall not adopt a lower or different
standard of value because the same is to serve as a basis of taxation, nor shall the assessor
adopt as a criterion of value the price for which such property would sell at a forced
sale, or in the aggregate with all the property in the town or district; but the assessor
shall value each article or description of property by itself, and at such sum or price as
the assessor believes the same to be fairly worth in money. The assessor shall take into
account the effect on the market value of property of environmental factors in the vicinity
of the property, and the market value effect of foreclosed property on all property in the
vicinity due to the foreclosures
. In assessing any tract or lot of real property, the value
of the land, exclusive of structures and improvements, shall be determined, and also the
value of all structures and improvements thereon, and the aggregate value of the property,
including all structures and improvements, excluding the value of crops growing upon
cultivated land. In valuing real property upon which there is a mine or quarry, it shall be
valued at such price as such property, including the mine or quarry, would sell for at a fair,
voluntary sale, for cash, if the material being mined or quarried is not subject to taxation
under section 298.015 and the mine or quarry is not exempt from the general property
tax under section 298.25. In valuing real property which is vacant, platted property shall
be assessed as provided in subdivision 14. All property, or the use thereof, which is
taxable under section 272.01, subdivision 2, or 273.19, shall be valued at the market
value of such property and not at the value of a leasehold estate in such property, or at
some lesser value than its market value.

EFFECTIVE DATE.

This section is effective for the 2009 assessment and
thereafter.

Sec. 7.

Minnesota Statutes 2006, section 273.11, subdivision 1a, is amended to read:


Subd. 1a.

Limited market value.

In the case of all property classified as
agricultural homestead or nonhomestead, residential homestead or nonhomestead, timber,
or noncommercial seasonal residential recreational, the assessor shall compare the value
with the taxable portion of the value determined in the preceding assessment.

For assessment years 2004, 2005, and 2006, the amount of the increase shall not
exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 25
percent of the difference between the current assessment and the preceding assessment.

For assessment year years 2007 through 2009, the amount of the increase shall not
exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 33
percent of the difference between the current assessment and the preceding assessment.

For assessment year 2008 2010, the amount of the increase shall not exceed the
greater of (1) 15 percent of the value in the preceding assessment, or (2) 50 percent of the
difference between the current assessment and the preceding assessment.

This limitation shall not apply to increases in value due to improvements. For
purposes of this subdivision, the term "assessment" means the value prior to any exclusion
under subdivision 16.

The provisions of this subdivision shall be in effect through assessment year 2008
2010
as provided in this subdivision.

For purposes of the assessment/sales ratio study conducted under section 127A.48,
and the computation of state aids paid under chapters 122A, 123A, 123B, 124D, 125A,
126C, 127A, and 477A, market values and net tax capacities determined under this
subdivision and subdivision 16, shall be used.

EFFECTIVE DATE.

This section is effective for assessment year 2008 and
thereafter, for taxes payable in 2009 and thereafter.

Sec. 8.

Minnesota Statutes 2006, section 273.11, subdivision 14a, is amended to read:


Subd. 14a.

Vacant land platted on or after August 1, 2001; located in
metropolitan counties.

(a) Except as provided in subdivision 14c, all land platted on or
after August 1, 2001, located in a metropolitan county, and not improved with a permanent
structure, shall be assessed as provided in this subdivision. The assessor shall determine
the market value of each individual lot based upon the highest and best use of the property
as unplatted land. In establishing the market value of the property, the assessor shall
consider the sale price of the unplatted land or comparable sales of unplatted land of
similar use and similar availability of public utilities.

(b) The market value determined in paragraph (a) shall be increased as follows for
each of the three assessment years immediately following the final approval of the plat:
one-third of the difference between the property's unplatted market value as determined
under paragraph (a) and the market value based upon the highest and best use of the land
as platted property shall be added in each of the three subsequent assessment years.

(c) Any increase in market value after the first assessment year following the plat's
final approval shall be added to the property's market value in the next assessment year.
Notwithstanding paragraph (b), if construction begins before the expiration of the three
years in paragraph (b), that lot shall be eligible for revaluation in the next assessment year.
The market value of a platted lot determined under this subdivision shall not exceed the
value of that lot based upon the highest and best use of the property as platted land.

(d) For purposes of this section, "metropolitan county" means the counties of Anoka,
Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

Sec. 9.

Minnesota Statutes 2006, section 273.11, subdivision 14b, is amended to read:


Subd. 14b.

Vacant land platted on or after August 1, 2001; located in
nonmetropolitan counties
.

(a) All land platted on or after (i) August 1, 2001, and
located in a nonmetropolitan county, or (ii) August 1, 2008, and located in a metropolitan
county,
and not improved with a permanent structure, shall be assessed as provided in this
subdivision. The assessor shall determine the market value of each individual lot based
upon the highest and best use of the property as unplatted land. In establishing the market
value of the property, the assessor shall consider the sale price of the unplatted land or
comparable sales of unplatted land of similar use and similar availability of public utilities.

(b) The market value determined in paragraph (a) shall be increased as follows for
each of the seven assessment years immediately following the final approval of the plat:
one-seventh of the difference between the property's unplatted market value as determined
under paragraph (a) and the market value based upon the highest and best use of the land
as platted property shall be added in each of the seven subsequent assessment years.

(c) Any increase in market value after the first assessment year following the plat's
final approval shall be added to the property's market value in the next assessment year.
Notwithstanding paragraph (b), if the property is sold or transferred, or construction
begins before the expiration of the seven years in paragraph (b), that lot shall be eligible
for revaluation in the next assessment year. The market value of a platted lot determined
under this subdivision shall not exceed the value of that lot based upon the highest and
best use of the property as platted land.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 10.

Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision
to read:


Subd. 14c.

Certain vacant land platted on or after August 1, 2001; located
in metropolitan county.

(a) All land platted on or after August 1, 2001, located in a
metropolitan county and not improved with a structure shall be eligible for the phase-in
assessment schedule under this subdivision, provided the property (i) is classified
homestead under section 273.13, subdivision 22 or 23, in the assessment year prior to the
year the initial platting begins on the property; (ii) has been owned or part-owned by the
same person for the ten consecutive years prior to the initial platting; and (iii) remains
under the same ownership in the current assessment year.

(b) Based upon the assessor's records, the assessor shall obtain the estimated market
value of each individual lot based upon the highest and best use of the property as unplatted
land for the assessment year that the property was platted. In establishing the market value
of the property, the assessor shall have considered the sale price of the unplatted land or
comparable sales of unplatted land of similar use and similar availability of public utilities.

(c) To the market value determined in paragraph (b) shall be added one-seventh
of the difference between the property's unplatted market value as determined under
paragraph (b) and the market value based upon the highest and best use of the land as
platted property in the current year, multiplied by the number of assessment years since
the property was platted, in each of the subsequent assessment years.

(d) Notwithstanding paragraph (c), if the property is sold or transferred, or
construction begins before the expiration of the phase-in in paragraph (c), that lot shall
be eligible for revaluation in the next assessment year. The market value of a platted lot
determined under this subdivision shall not exceed the value of that lot based upon the
highest and best use of the property as platted land.

(e) Any owner of eligible property platted before July 1, 2008, must file an
application with the assessor in order to receive the phase-in under this subdivision for the
remainder of the seven-year period. The application must be filed before July 1 in order
for the property to be eligible for the current year's assessment. The commissioner shall
prescribe a uniform application form and instructions.

(f) For purposes of this section, "metropolitan county" means the counties of Anoka,
Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 11.

Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision
to read:


Subd. 24.

Rural vacant land abutting public waters.

(a) Any property that:

(1) is located in a township;

(2) is classified as either (i) agricultural property under section 273.13, subdivision
23, paragraph (b), or (ii) rural vacant land under section 273.13, subdivision 23, paragraph
(c), contiguous to agricultural property under the same ownership with at least two-thirds
of the acreage used for agricultural purposes;

(3) is not enrolled in the Minnesota agricultural property tax law under section
273.111; and

(4) abuts public waters in whole or in part,

shall be valued by the assessor on the same basis as rural vacant land of the same quality
that does not abut public waters, until some action is taken to develop the land as specified
in paragraph (c).

(b) In each assessment year, the assessor shall determine the estimated market value
of the property as provided under subdivision 1, taking into consideration its highest
and best use. For each year that the property is classified under this subdivision, the
property tax statement shall include a notice that the property is being taxed under a
reduced valuation that will terminate under certain conditions.

(c) An owner of property meeting the criteria of this subdivision must notify the
county assessor within 30 days of applying for a development permit from the county
or local zoning board. If development permits are not required, an owner of property
meeting the criteria of this subdivision must notify the assessor prior to all or any portion
of the property being platted or subdivided.

(d) When any of the conditions specified in paragraph (c) occurs, additional taxes
shall be imposed in an amount equal to: (1) the average of the difference between the
amount of taxes actually levied on the property in the current year and the two prior years,
and the amount of taxes that would have been levied in the current year and the two prior
years based on the estimated market value determined under paragraph (b); (2) multiplied
by seven or the number of years that the property has qualified under this subdivision,
whichever is less. The additional taxes shall be extended against the property on the tax list
for the current year, provided that no interest or penalties shall be levied on the additional
taxes if timely paid. For purposes of this subdivision, "public waters" means a meandered
lake as defined under section 103G.005, subdivision 15, paragraph (a), clause (3).

EFFECTIVE DATE.

This section is effective for the 2009 assessment and
thereafter.

Sec. 12.

Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision
to read:


Subd. 25.

Limit on taxable valuation; certain restored homes.

A homestead
property that either (i) has gone through foreclosure or (ii) is located within a disaster
or emergency area and sustained physical damage of at least $5,000 in the disaster or
emergency is eligible for valuation limitation under this subdivision. To qualify for the
limitation, the property must:

(i) have been restored or rebuilt within 18 months of the foreclosure or the disaster
or emergency;

(ii) have a gross living area that does not exceed 130 percent of the gross living area
prior to the foreclosure or the disaster or emergency; and

(iii) have an estimated market value that exceeds its taxable market value for the
assessment year of the foreclosure or the disaster or emergency by at least $20,000, due to
the restoration or reconstruction.

In the first assessment year following the restoration or reconstruction, the taxable
value shall be equal to three-quarters of its taxable value in the assessment year of the
foreclosure or disaster or emergency, plus one-quarter of its current estimated market
value. In the second assessment year following the restoration or reconstruction, the
taxable value shall be equal to one-half of its taxable value in the assessment year of the
foreclosure or disaster or emergency, and one-half of its current estimated market value.
In the third assessment year following the restoration or reconstruction, the taxable value
shall be equal to one-quarter of its taxable value in the assessment year of the foreclosure
or disaster or emergency, and three-quarters of its current estimated market value. For
the three assessment years immediately following the restoration or reconstruction, the
property is not subject to the valuation limit under subdivision 1a.

For the purposes of this subdivision:

(i) "disaster or emergency area" means an area in which the president of the United
States or the administrator of the Small Business Administration has determined that
a disaster exists pursuant to federal law;

(ii) "gone through foreclosure" means that a foreclosure sale has been held and that
the person who owned the home prior to the sale did not redeem it from the sale under
section 580.23; and

(iii) "gross living area" means the square footage of the home that would customarily
be used as living space.

EFFECTIVE DATE.

This section is effective for assessment year 2009 and
thereafter.

Sec. 13.

Minnesota Statutes 2006, section 273.111, subdivision 3, as amended by Laws
2008, chapter 154, article 13, section 26, is amended to read:


Subd. 3.

Requirements.

(a) Real estate located in a county that is not a metropolitan
county as defined in section 473.121, subdivision 4,
consisting of ten three acres or more
or a nursery or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under
section 273.13, shall be entitled to valuation and tax deferment under this section only
if it is primarily devoted to agricultural use, and meets the qualifications in subdivision
6, and either
:

(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
owner or is real estate which is farmed with the real estate which contains the homestead
property; or

(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
or any combination thereof, for a period of at least seven years prior to application for
benefits under the provisions of this section, or is real estate which is farmed with the
real estate which qualifies under this clause and is within four townships or cities or
combination thereof from the qualifying real estate; or

(3) is the homestead of a shareholder in a family farm corporation as defined in an
individual who is part of an entity in compliance with
section 500.24, notwithstanding
the fact that legal title to the real estate may be held in the name of the family farm
corporation
; or

(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
partnership, or corporation which also owns the nursery or greenhouse operations on the
parcel or parcels, provided that only the acres used to produce nursery stock qualify
for treatment under this section
.

(b) Valuation of real estate under this section is limited to parcels the ownership of
which is in noncorporate entities except for:

(1) family farm corporations organized pursuant to section 500.24; and

(2) corporations that derive 80 percent or more of their gross receipts from the
wholesale or retail sale of horticultural or nursery stock.

Real estate located in a metropolitan county as defined in section 473.121,
subdivision 4, consisting of ten acres or more or a nursery or greenhouse, and qualifying
for classification as class 1b, 2a, or 2b under section 273.13, shall be entitled to valuation
and tax deferment under this section if it is primarily devoted to agricultural use, and:

(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
owner or is real estate which is farmed with the real estate which contains the homestead
property; or

(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
or any combination thereof, for a period of at least seven years prior to application for
benefits under the provisions of this section, or is real estate which is farmed with the
real estate which qualifies under this clause and is within four townships or cities or
combination thereof from the qualifying real estate; or

(3) is the homestead of an individual who is part of an entity in compliance with
section 500.24; or

(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
partnership, or corporation which also owns the nursery or greenhouse operations on the
parcel or parcels, provided that only the acres used to produce nursery stock qualify
for treatment under this section.

(c) Land that previously qualified for tax deferment under this section and no longer
qualifies because it is not primarily used for agricultural purposes but would otherwise
qualify under subdivisions Minnesota Statutes 2006, section 273.111, subdivision 3 and 6,
for a period of at least three years will not be required to make payment of the previously
deferred taxes, notwithstanding the provisions of subdivision 9. Sale of the land prior to
the expiration of the three-year period requires payment of deferred taxes as follows: sale
in the year the land no longer qualifies requires payment of the current year's deferred
taxes plus payment of deferred taxes for the two prior years; sale during the second year
the land no longer qualifies requires payment of the current year's deferred taxes plus
payment of the deferred taxes for the prior year; and sale during the third year the land
no longer qualifies requires payment of the current year's deferred taxes. Deferred taxes
shall be paid even if the land qualifies pursuant to subdivision 11a. When such property is
sold or no longer qualifies under this paragraph, or at the end of the three-year period,
whichever comes first, all deferred special assessments plus interest are payable in equal
installments spread over the time remaining until the last maturity date of the bonds issued
to finance the improvement for which the assessments were levied. If the bonds have
matured, the deferred special assessments plus interest are payable within 90 days. The
provisions of section 429.061, subdivision 2, apply to the collection of these installments.
Penalties are not imposed on any such special assessments if timely paid.

EFFECTIVE DATE.

This section is effective for assessment year 2009, taxes
payable in 2010 and thereafter.

Sec. 14.

Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
to read:


Subd. 3a.

Property no longer eligible for deferment.

Real estate that qualifies for
tax deferment under this section for assessment year 2008, but which does not qualify
for the current assessment year due to changes in qualification requirements under this
act, shall continue to qualify until the land is sold or transferred, provided that the
property continues to meet the requirements of Minnesota Statutes 2006, section 273.111,
subdivision 3.

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter.

Sec. 15.

Minnesota Statutes 2006, section 273.111, subdivision 4, is amended to read:


Subd. 4.

Determination of value.

(a) The value of any real estate described
in subdivision 3 shall upon timely application by the owner, in the manner provided
in subdivision 8, be determined solely with reference to its appropriate agricultural
classification and value notwithstanding sections 272.03, subdivision 8, and 273.11. In
determining the value for ad valorem tax purposes, the assessor shall use sales data for
agricultural lands located outside the seven metropolitan counties having similar soil
types, number of degree days, and other similar agricultural characteristics.
Furthermore,
the assessor shall not consider any added values resulting from nonagricultural factors.
In order to account for the presence of nonagricultural influences that may affect the value
of agricultural land, the commissioner of revenue shall develop a fair and uniform method
of determining agricultural values for each county in the state that are consistent with this
subdivision. The commissioner shall annually assign the resulting values to each county,
and these values shall be used as the basis for determining the agricultural value for all
properties in the county qualifying for tax deferment under this section.

(b) In the case of property qualifying for tax deferment only under subdivision 3a,
the value shall be based on the value in effect for assessment year 2008, multiplied by
the ratio of the total taxable market value of all property in the county for the current
assessment year divided by the total taxable market value of all property in the county
for assessment year 2008.

EFFECTIVE DATE.

This section is effective for assessment year 2009 and
thereafter.

Sec. 16.

Minnesota Statutes 2006, section 273.111, subdivision 8, is amended to read:


Subd. 8.

Application.

Application for deferment of taxes and assessment under this
section shall be filed by May 1 of the year prior to the year in which the taxes are payable.
Any application filed hereunder and granted shall continue in effect for subsequent years
until the property no longer qualifies. Such application shall be filed with the assessor of
the taxing district in which the real property is located on such form as may be prescribed
by the commissioner of revenue. The assessor may require proof by affidavit or otherwise
that the property qualifies under subdivisions subdivision 3 and 6.

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter.

Sec. 17.

Minnesota Statutes 2006, section 273.111, subdivision 9, is amended to read:


Subd. 9.

Additional taxes.

When real property which is being, or has been valued
and assessed under this section no longer qualifies under subdivisions subdivision 3
and 6 or 3a, the portion no longer qualifying shall be subject to additional taxes, in the
amount equal to the average difference between the taxes determined in accordance with
subdivision 4, and the amount determined under subdivision 5, for the current year and
the two preceding years, multiplied by seven or the number of years enrolled under
section 273.111, whichever is less
. Provided, however, that the amount determined under
subdivision 5 shall not be greater than it would have been had the actual bona fide sale
price of the real property at an arm's-length transaction been used in lieu of the market
value determined under subdivision 5. Such additional taxes shall be extended against
the property on the tax list for the current year, provided, however, that no interest or
penalties shall be levied on such additional taxes if timely paid, and provided further, that
such additional taxes shall only be levied with respect to the last three years that the said
property has been valued and assessed under this section
.

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter.

Sec. 18.

Minnesota Statutes 2006, section 273.111, subdivision 11, is amended to read:


Subd. 11.

Special local assessments.

The payment of special local assessments
levied after June 1, 1967, for improvements made to any real property described in
subdivision 3 together with the interest thereon shall, on timely application as provided
in subdivision 8, be deferred as long as such property meets the conditions contained in
subdivisions subdivision 3 and 6 or 3a or is transferred to an agricultural preserve under
sections 473H.02 to 473H.17. If special assessments against the property have been
deferred pursuant to this subdivision, the governmental unit shall file with the county
recorder in the county in which the property is located a certificate containing the legal
description of the affected property and of the amount deferred. When such property
no longer qualifies under subdivisions subdivision 3 and 6 or 3a, all deferred special
assessments plus interest shall be payable in equal installments spread over the time
remaining until the last maturity date of the bonds issued to finance the improvement
for which the assessments were levied. If the bonds have matured, the deferred special
assessments plus interest shall be payable within 90 days. The provisions of section
429.061, subdivision 2, apply to the collection of these installments. Penalty shall not be
levied on any such special assessments if timely paid.

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter.

Sec. 19.

Minnesota Statutes 2006, section 273.111, subdivision 11a, is amended to read:


Subd. 11a.

Continuation of tax treatment upon sale.

When real property
qualifying under subdivisions subdivision 3 and 6 is sold, no additional taxes or deferred
special assessments plus interest shall be extended against the property provided the
property continues to qualify pursuant to subdivisions subdivision 3 and 6, and provided
the new owner files an application for continued deferment within 30 days after the sale.

For purposes of meeting the income requirements of subdivision 6, the property
purchased shall be considered in conjunction with other qualifying property owned by
the purchaser.

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter.

Sec. 20.

[273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY
TAX LAW.

Subdivision 1.

Definitions.

For purposes of this section, "commercial aggregate
deposit" and "actively mined" have the meanings given them in section 273.13,
subdivision 23, paragraph (l).

Subd. 2.

Requirement.

Real estate is entitled to valuation under this section only if
all of the following requirements are met:

(1) the property is classified 1a, 1b, 2a, or 2b property under section 273.13,
subdivisions 22 and 23;

(2) the property is at least ten contiguous acres, when the application is filed under
subdivision 3;

(3) the owner has filed a completed application for deferment as specified in
subdivision 3 with the county assessor in the county in which the property is located;

(4) there are no delinquent taxes on the property; and

(5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).

Subd. 3.

Application.

Application for valuation deferment under this section
must be filed by May 1 of the assessment year. Any application filed and granted
continues in effect for subsequent years until the property no longer qualifies, provided
that supplemental affidavits under subdivision 8 are timely filed. The application must
be filed with the assessor of the county in which the real property is located on such
form as may be prescribed by the commissioner of revenue. The application must be
executed and acknowledged in the manner required by law to execute and acknowledge a
deed and must contain at least the following information and any other information the
commissioner deems necessary:

(1) the legal description of the area;

(2) the name and address of owner;

(3) a copy of the affidavit filed under section 273.13, subdivision 23, paragraph
(l), when property is classified as:

(i) 1b under section 273.13, subdivision 22, paragraph (b);

(ii) 2a under section 273.13, subdivision 23;

(iii) 2b under section 273.13, subdivision 23; or

(iv) 2e under section 273.13, subdivision 23, paragraph (l).

The application must include a similar document with the same information as
contained in the affidavit under section 273.13, subdivision 23, paragraph (l); and

(4) a statement of proof from the owner that the land contains a restrictive covenant
limiting its use for the property's surface to that which exists on the date of the application
and limiting its future use to the preparation and removal of the commercial aggregate
deposit under its surface. To qualify under this clause, the covenant must be binding on
the owner or the owner's successor or assignee, and run with the land, except as provided
in subdivision 5 allowing for the cancellation of the covenant under certain conditions.

Subd. 4.

Determination of value.

Upon timely application by the owner as provided
in subdivision 3, notwithstanding sections 272.03, subdivision 8, and 273.11, the value of
any qualifying land described in subdivision 3 must be valued as if it were agricultural
property, using a per acre valuation equal to the current assessment year's average per acre
valuation of agricultural land in the county. The assessor shall not consider any additional
value resulting from potential alternative and future uses of the property. The buildings
located on the land shall be valued by the assessor in the normal manner.

Subd. 5.

Cancellation of covenant.

The covenant required under subdivision
3 may be canceled in two ways:

(1) by the owner beginning with the next subsequent assessment year provided
that the additional taxes as determined under subdivision 7 are paid by the owner at the
time of cancellation; or

(2) by the city or town in which the property is located beginning with the next
subsequent assessment year, if the city council or town board:

(i) changes the conditional use of the property;

(ii) revokes the mining permit; or

(iii) changes the zoning to disallow mining.

No additional taxes are imposed on the property under this clause.

Subd. 6.

County termination.

Within two years of the effective date of this section,
a county may, following notice and public hearing, terminate application of this section
in the county. The termination is effective upon adoption of a resolution of the county
board. A county has 60 days from receipt of the first application for enrollment under
this section to notify the applicant and any subsequent applicants of the county's intent
to begin the process of terminating application of this section in the county. The county
must act on the termination within six months. Upon termination by a vote of the county
board, all applications received prior to and during notification of intent to terminate shall
be deemed void. If the county board does not act on the termination within six months of
notification, all applications for valuation for deferment received shall be deemed eligible
for consideration to be enrolled under this section. Following this initial 60-day grace
period, a termination applies prospectively and does not affect property enrolled under this
section prior to the termination date. A county may reauthorize application of this section
by a resolution of the county board revoking the termination.

Subd. 7.

Additional taxes.

When real property which has been valued and assessed
under this section no longer qualifies, the portion of the land classified under subdivision
2, clause (1), is subject to additional taxes. The additional tax amount is determined by:

(1) computing the difference between (i) the current year's taxes determined in
accordance with subdivision 4, and (ii) an amount as determined by the assessor based
upon the property's current year's estimated market value of like real estate at its highest
and best use and the appropriate local tax rate; and

(2) multiplying the amount determined in clause (1) by the number of years the
land was in the program under this section. The current year's estimated market value as
determined by the assessor must not exceed the market value that would result if the
property was sold in an arms-length transaction and must not be greater than it would have
been had the actual bona fide sale price of the property been used in lieu of that market
value. The additional taxes must be extended against the property on the tax list for the
current year, except that interest or penalties must not be levied on these additional taxes if
timely paid. The additional tax under this subdivision must not be imposed on that portion
of the property which has actively been mined and has been removed from the program
based upon the supplemental affidavits filed under subdivision 8.

Subd. 8.

Supplemental affidavits; mining activity on land.

When any portion
of the property begins to be actively mined, the owner must file a supplemental affidavit
within 60 days from the day any aggregate is removed stating the number of acres of the
property that is actively being mined. The acres actively being mined shall be (1) valued
and classified under section 273.13, subdivision 24, in the next subsequent assessment
year, and (2) removed from the aggregate resource preservation property tax program
under this section. The additional taxes under subdivision 7 must not be imposed on the
acres that are actively being mined and have been removed from the program under this
section. Copies of the original affidavit and all supplemental affidavits must be filed
with the county assessor, the local zoning administrator, and the Department of Natural
Resources, Division of Land and Minerals. A supplemental affidavit must be filed each
time a subsequent portion of the property is actively mined, provided that the minimum
acreage change is five acres, even if the actual mining activity constitutes less than five
acres. Failure to file the affidavits timely shall result in the property losing its valuation
deferment under this section, and additional taxes must be imposed as calculated under
subdivision 7.

Subd. 9.

Lien.

The additional tax imposed by this section is a lien upon the property
assessed to the same extent and for the same duration as other taxes imposed upon
property within this state and, when collected, must be distributed in the manner provided
by law for the collection and distribution of other property taxes.

Subd. 10.

Continuation of tax treatment upon sale.

When real property qualifying
under subdivision 2 is sold, additional taxes must not be extended against the property
if the property continues to qualify under subdivision 2, and the new owner files an
application with the assessor for continued deferment within 30 days after the sale.

EFFECTIVE DATE.

This section is effective for taxes assessed in 2009, payable
in 2010, and thereafter, except that for the 2009 assessment year, the application date
under subdivision 5 shall be September 1, 2009, and subdivision 6 is effective the day
following final enactment.

Sec. 21.

[273.113] TAX CREDIT FOR PROPERTY IN BOVINE
TUBERCULOSIS MANAGEMENT ZONES.

Subdivision 1.

Definition.

For the purposes of this section, "bovine tuberculosis
management zone" means the area within the ten-mile radius around the five presumptive
tuberculosis-positive deer sampled during the fall 2006 hunter-harvested surveillance
effort.

Subd. 2.

Eligibility; credit on agricultural land; cattle herds.

Land classified
as class 2a or 2b under section 273.13, subdivision 23, located in a bovine tuberculosis
management zone is eligible for a property tax credit if the property owner has eradicated
a cattle herd that had been kept on that land for at least part of the year in order to prevent
the onset or spread of bovine tuberculosis. The net credit is equal to that portion of the tax
relating to the market value of the land on the parcels where the herd had been located after
all other applicable credits have been deducted. To initially qualify for the tax credit, the
property owner shall file an application with the county by January 2 of the year following
the calendar year when the herd was eradicated. The credit must be given for each taxes
payable year following the calendar year when the herd was eradicated and must terminate
for all taxes payable years beginning after the calendar year when a new herd of cattle was
placed on the land or as provided in subdivision 5. The auditor shall indicate the amount of
the property tax reduction on the property tax statement of each taxpayer receiving a credit
under this section. Notwithstanding section 276.04, subdivision 3, property tax statements
of properties eligible for a credit under this section must be mailed no later than April 15.

Subd. 3.

Eligibility; credit on hunting land; deer and elk herds.

Land located
in a bovine tuberculosis management zone that is primarily used for hunting purposes is
eligible for a property tax credit if (1) the property owner or the Department of Natural
Resources has eradicated the deer and elk herd on that land in order to prevent the onset or
spread of bovine tuberculosis, (2) the property owner adheres strictly to the deer and elk
feeding ban, and (3) the property owner makes every effort to keep their land free of deer
and elk. The net credit is equal to the property tax on the parcel where the herd had been
located after all other applicable credits have been deducted. The credit is only on that
portion of the tax relating to the market value of the land. To initially qualify for the tax
credit, the property owner shall file an application with the county by January 2 of the
year following the calendar year when the deer or elk herd was eradicated. To receive
the tax credit in subsequent years, the property owner shall file by January 2 of each
subsequent year until the state is upgraded to a bovine tuberculosis status of modified
accredited advanced. The county board must approve the application before the credit
is allowed. The credit is for each taxes payable year following the calendar year when
the deer or elk herd was eradicated and must terminate as provided in subdivision 5.
The auditor shall indicate the amount of the property tax reduction on the property tax
statement of each taxpayer receiving a credit under this section. Notwithstanding section
276.04, subdivision 3, property tax statements of properties eligible for a credit under this
section must be mailed no later than April 15.

Subd. 4.

Reimbursement for lost revenue; appropriations.

The county auditor
shall certify to the commissioner of revenue, as part of the abstracts of tax lists required to
be filed with the commissioner under section 275.29, the amount of tax lost to the county
from the property tax credit under this section after all other applicable credits have been
deducted. Any prior year adjustments must also be certified in the abstracts of tax lists.
The commissioner of revenue shall review the certifications to determine their accuracy.
The commissioner may make the changes in the certification that are considered necessary
or return a certification to the county auditor for corrections. The commissioner shall
reimburse each taxing district for the taxes lost. The payments must be made at the time
provided in section 273.1398, subdivision 6, for payment to taxing jurisdictions in the
same proportion that the ad valorem tax is distributed. The amount necessary to make the
reimbursements under this section is annually appropriated from the general fund to the
commissioner of revenue. The credits paid under this section shall be deducted from the
tax due on the property as provided in section 273.1393.

Subd. 5.

Termination of credit.

The credit provided under this section ceases to
be available beginning with any assessment year following the date when the United
States Department of Agriculture publishes notice in the Federal Register that the state is
upgraded to a bovine tuberculosis status of modified accredited advanced.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2009.

Sec. 22.

Minnesota Statutes 2006, section 273.121, as amended by Laws 2008, chapter
154, article 13, section 28, is amended to read:


273.121 VALUATION OF REAL PROPERTY, NOTICE.

Subdivision 1.

Notice.

Any county assessor or city assessor having the powers of a
county assessor, valuing or classifying taxable real property shall in each year notify those
persons whose property is to be included on the assessment roll that year if the person's
address is known to the assessor, otherwise the occupant of the property. The notice shall
be in writing and shall be sent by ordinary mail at least ten days before the meeting of
the local board of appeal and equalization under section 274.01 or the review process
established under section 274.13, subdivision 1c. Upon written request by the owner of the
property, the assessor may send the notice in electronic form or by electronic mail instead
of on paper or by ordinary mail. It shall contain: (1) the market value for the current and
prior assessment, (2) the limited market value under section 273.11, subdivision 1a, for
the current and prior assessment, (3) the qualifying amount of any improvements under
section 273.11, subdivision 16, for the current assessment, (4) the market value subject
to taxation after subtracting the amount of any qualifying improvements for the current
assessment, (5) the classification of the property for the current and prior assessment,
(6) a note that if the property is homestead and at least 45 years old, improvements
made to the property may be eligible for a valuation exclusion under section 273.11,
subdivision 16
, (7) the assessor's office address, and (8) the dates, places, and times set for
the meetings of the local board of appeal and equalization, the review process established
under section 274.13, subdivision 1c, and the county board of appeal and equalization.
The commissioner of revenue shall specify the form of the notice. The assessor shall
attach to the assessment roll a statement that the notices required by this section have been
mailed. Any assessor who is not provided sufficient funds from the assessor's governing
body to provide such notices, may make application to the commissioner of revenue
to finance such notices. The commissioner of revenue shall conduct an investigation
and, if satisfied that the assessor does not have the necessary funds, issue a certification
to the commissioner of finance of the amount necessary to provide such notices. The
commissioner of finance shall issue a warrant for such amount and shall deduct such
amount from any state payment to such county or municipality. The necessary funds to
make such payments are hereby appropriated. Failure to receive the notice shall in no way
affect the validity of the assessment, the resulting tax, the procedures of any board of
review or equalization, or the enforcement of delinquent taxes by statutory means.

Subd. 2.

Availability of data.

The notice must state where the information on
the property is available, the times when the information may be viewed by the public,
and the county's Web site address.

EFFECTIVE DATE.

This section is effective for notices prepared in 2009 and
thereafter.

Sec. 23.

Minnesota Statutes 2006, section 273.124, subdivision 1, is amended to read:


Subdivision 1.

General rule.

(a) Residential real estate that is occupied and used
for the purposes of a homestead by its owner, who must be a Minnesota resident, is
a residential homestead.

Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and
used as a homestead by its owner, who must be a Minnesota resident, is an agricultural
homestead.

Dates for establishment of a homestead and homestead treatment provided to
particular types of property are as provided in this section.

Property held by a trustee under a trust is eligible for homestead classification if the
requirements under this chapter are satisfied.

The assessor shall require proof, as provided in subdivision 13, of the facts upon
which classification as a homestead may be determined. Notwithstanding any other law,
the assessor may at any time require a homestead application to be filed in order to verify
that any property classified as a homestead continues to be eligible for homestead status.
Notwithstanding any other law to the contrary, the Department of Revenue may, upon
request from an assessor, verify whether an individual who is requesting or receiving
homestead classification has filed a Minnesota income tax return as a resident for the most
recent taxable year for which the information is available.

When there is a name change or a transfer of homestead property, the assessor may
reclassify the property in the next assessment unless a homestead application is filed to
verify that the property continues to qualify for homestead classification.

(b) For purposes of this section, homestead property shall include property which
is used for purposes of the homestead but is separated from the homestead by a road,
street, lot, waterway, or other similar intervening property. The term "used for purposes
of the homestead" shall include but not be limited to uses for gardens, garages, or other
outbuildings commonly associated with a homestead, but shall not include vacant land
held primarily for future development. In order to receive homestead treatment for
the noncontiguous property, the owner must use the property for the purposes of the
homestead, and must apply to the assessor, both by the deadlines given in subdivision
9. After initial qualification for the homestead treatment, additional applications for
subsequent years are not required.

(c) Residential real estate that is occupied and used for purposes of a homestead by a
relative of the owner is a homestead but only to the extent of the homestead treatment
that would be provided if the related owner occupied the property. For purposes of this
paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild,
grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship
may be by blood or marriage. Property that has been classified as seasonal residential
recreational property at any time during which it has been owned by the current owner or
spouse of the current owner will not be reclassified as a homestead unless it is occupied as
a homestead by the owner; this prohibition also applies to property that, in the absence of
this paragraph, would have been classified as seasonal residential recreational property at
the time when the residence was constructed. Neither the related occupant nor the owner
of the property may claim a property tax refund under chapter 290A for a homestead
occupied by a relative. In the case of a residence located on agricultural land, only the
house, garage, and immediately surrounding one acre of land shall be classified as a
homestead under this paragraph, except as provided in paragraph (d).

(d) Agricultural property that is occupied and used for purposes of a homestead by
a relative of the owner, is a homestead, only to the extent of the homestead treatment
that would be provided if the related owner occupied the property, and only if all of the
following criteria are met:

(1) the relative who is occupying the agricultural property is a son, daughter, brother,
sister,
grandson, granddaughter, father, or mother of the owner of the agricultural property
or a son, daughter, brother, sister, grandson, or granddaughter of the spouse of the owner
of the agricultural property;

(2) the owner of the agricultural property must be a Minnesota resident;

(3) the owner of the agricultural property must not receive homestead treatment on
any other agricultural property in Minnesota; and

(4) the owner of the agricultural property is limited to only one agricultural
homestead per family under this paragraph.

Neither the related occupant nor the owner of the property may claim a property
tax refund under chapter 290A for a homestead occupied by a relative qualifying under
this paragraph. For purposes of this paragraph, "agricultural property" means the house,
garage, other farm buildings and structures, and agricultural land.

Application must be made to the assessor by the owner of the agricultural property to
receive homestead benefits under this paragraph. The assessor may require the necessary
proof that the requirements under this paragraph have been met.

(e) In the case of property owned by a property owner who is married, the assessor
must not deny homestead treatment in whole or in part if only one of the spouses occupies
the property and the other spouse is absent due to: (1) marriage dissolution proceedings,
(2) legal separation, (3) employment or self-employment in another location, or (4) other
personal circumstances causing the spouses to live separately, not including an intent to
obtain two homestead classifications for property tax purposes. To qualify under clause
(3), the spouse's place of employment or self-employment must be at least 50 miles distant
from the other spouse's place of employment, and the homesteads must be at least 50 miles
distant from each other. Homestead treatment, in whole or in part, shall not be denied to
the owner's spouse who previously occupied the residence with the owner if the absence
of the owner is due to one of the exceptions provided in this paragraph.

(f) The assessor must not deny homestead treatment in whole or in part if:

(1) in the case of a property owner who is not married, the owner is absent due to
residence in a nursing home, boarding care facility, or an elderly assisted living facility
property as defined in section 273.13, subdivision 25a, and the property is not otherwise
occupied; or

(2) in the case of a property owner who is married, the owner or the owner's spouse
or both are absent due to residence in a nursing home, boarding care facility, or an elderly
assisted living facility property as defined in section 273.13, subdivision 25a, and the
property is not occupied or is occupied only by the owner's spouse.

(g) If an individual is purchasing property with the intent of claiming it as a
homestead and is required by the terms of the financing agreement to have a relative
shown on the deed as a co-owner, the assessor shall allow a full homestead classification.
This provision only applies to first-time purchasers, whether married or single, or to a
person who had previously been married and is purchasing as a single individual for the
first time. The application for homestead benefits must be on a form prescribed by the
commissioner and must contain the data necessary for the assessor to determine if full
homestead benefits are warranted.

(h) If residential or agricultural real estate is occupied and used for purposes of a
homestead by a child of a deceased owner and the property is subject to jurisdiction of
probate court, the child shall receive relative homestead classification under paragraph (c)
or (d) to the same extent they would be entitled to it if the owner was still living, until
the probate is completed. For purposes of this paragraph, "child" includes a relationship
by blood or by marriage.

(i) If a single-family home, duplex, or triplex classified as either residential
homestead or agricultural homestead is also used to provide licensed child care, the
portion of the property used for licensed child care must be classified as a part of the
homestead property.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 24.

Minnesota Statutes 2007 Supplement, section 273.124, subdivision 14,
is amended to read:


Subd. 14.

Agricultural homesteads; special provisions.

(a) Real estate of less than
ten acres that is the homestead of its owner must be classified as class 2a under section
273.13, subdivision 23, paragraph (a), if:

(1) the parcel on which the house is located is contiguous on at least two sides to (i)
agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
Service, or (iii) land administered by the Department of Natural Resources on which in
lieu taxes are paid under sections 477A.11 to 477A.14;

(2) its owner also owns a noncontiguous parcel of agricultural land that is at least
20 acres;

(3) the noncontiguous land is located not farther than four townships or cities, or a
combination of townships or cities from the homestead; and

(4) the agricultural use value of the noncontiguous land and farm buildings is equal
to at least 50 percent of the market value of the house, garage, and one acre of land.

Homesteads initially classified as class 2a under the provisions of this paragraph shall
remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
properties, as long as the homestead remains under the same ownership, the owner owns a
noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
value qualifies under clause (4). Homestead classification under this paragraph is limited
to property that qualified under this paragraph for the 1998 assessment.

(b)(i) Agricultural property consisting of at least 40 acres shall be classified as the
owner's homestead, to the same extent as other agricultural homestead property, if all
of the following criteria are met:

(1) the owner, the owner's spouse, the son or daughter of the owner or owner's
spouse, the brother or sister of the owner or owner's spouse, or the grandson or
granddaughter of the owner or the owner's spouse, is actively farming the agricultural
property, either on the person's own behalf as an individual or on behalf of a partnership
operating a family farm, family farm corporation, joint family farm venture, or limited
liability company of which the person is a partner, shareholder, or member;

(2) both the owner of the agricultural property and the person who is actively
farming the agricultural property under clause (1), are Minnesota residents;

(3) neither the owner nor the spouse of the owner claims another agricultural
homestead in Minnesota; and

(4) neither the owner nor and the person actively farming the property lives farther
than four townships or cities, or a combination of four townships or cities, from the
agricultural property,
must live either in the county where the agricultural property is
located or in a county contiguous to the county where the agricultural property is located,

except that if the owner or the owner's spouse is required to live in employer-provided
housing, the owner or owner's spouse, whichever is actively farming the agricultural
property, may live more than four townships or cities, or combination of four townships
or cities
further from the agricultural property than in the county or county contiguous
to the property
.

The relationship under this paragraph may be either by blood or marriage.

(ii) Real property held by a trustee under a trust is eligible for agricultural homestead
classification under this paragraph if the qualifications in clause (i) are met, except that
"owner" means the grantor of the trust.

(iii) Property containing the residence of an owner who owns qualified property
under clause (i) shall be classified as part of the owner's agricultural homestead, if that
property is also used for noncommercial storage or drying of agricultural crops.

(c) Noncontiguous land shall be included as part of a homestead under section
273.13, subdivision 23, paragraph (a), only if the homestead is classified as class 2a
and the detached land is located in the same township or city, or not farther than four
townships or cities or combination thereof from
county or in a county contiguous to the
homestead. Any taxpayer of these noncontiguous lands must notify the county assessor
that the noncontiguous land is part of the taxpayer's homestead, and, if the homestead is
located in another county, the taxpayer must also notify the assessor of the other county.

(d) Agricultural land used for purposes of a homestead and actively farmed by a
person holding a vested remainder interest in it must be classified as a homestead under
section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a,
any other dwellings on the land used for purposes of a homestead by persons holding
vested remainder interests who are actively engaged in farming the property, and up to
one acre of the land surrounding each homestead and reasonably necessary for the use of
the dwelling as a home, must also be assessed class 2a.

(e) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain
classified as agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the April 1997 floods;

(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman,
or Wilkin;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 1997 assessment year and continue to be used
for agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 30
miles of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 1997
floods, and the owner furnishes the assessor any information deemed necessary by the
assessor in verifying the change in dwelling. Further notifications to the assessor are not
required if the property continues to meet all the requirements in this paragraph and any
dwellings on the agricultural land remain uninhabited.

(f) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain
classified agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by a March 29, 1998, tornado;

(2) the property is located in the county of Blue Earth, Brown, Cottonwood,
LeSueur, Nicollet, Nobles, or Rice;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 1998 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to a March 29,
1998, tornado, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
owner must notify the assessor by December 1, 1998. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph
and any dwellings on the agricultural land remain uninhabited.

(g) Agricultural property consisting of at least 40 acres of a family farm corporation,
joint family farm venture, family farm limited liability company, or partnership operating
a family farm as described under subdivision 8 shall be classified homestead, to the same
extent as other agricultural homestead property, if all of the following criteria are met:

(1) a shareholder, member, or partner of that entity is actively farming the
agricultural property;

(2) that shareholder, member, or partner who is actively farming the agricultural
property is a Minnesota resident;

(3) neither that shareholder, member, or partner, nor the spouse of that shareholder,
member, or partner claims another agricultural homestead in Minnesota; and

(4) that shareholder, member, or partner does not live farther than four townships
or cities, or a combination of four townships or cities, from the agricultural property

lives in the county where the agricultural property is located or in a county contiguous to
the county where the property is located
.

Homestead treatment applies under this paragraph for property leased to a family
farm corporation, joint farm venture, limited liability company, or partnership operating a
family farm if legal title to the property is in the name of an individual who is a member,
shareholder, or partner in the entity.

(h) To be eligible for the special agricultural homestead under this subdivision, an
initial full application must be submitted to the county assessor where the property is
located. Owners and the persons who are actively farming the property shall be required
to complete only a one-page abbreviated version of the application in each subsequent
year provided that none of the following items have changed since the initial application:

(1) the day-to-day operation, administration, and financial risks remain the same;

(2) the owners and the persons actively farming the property continue to live within
the four townships or city criteria the county or a contiguous county and are Minnesota
residents;

(3) the same operator of the agricultural property is listed with the Farm Service
Agency;

(4) a Schedule F or equivalent income tax form was filed for the most recent year;

(5) the property's acreage is unchanged; and

(6) none of the property's acres have been enrolled in a federal or state farm program
since the initial application.

The owners and any persons who are actively farming the property must include
the appropriate Social Security numbers, and sign and date the application. If any of the
specified information has changed since the full application was filed, the owner must
notify the assessor, and must complete a new application to determine if the property
continues to qualify for the special agricultural homestead. The commissioner of revenue
shall prepare a standard reapplication form for use by the assessors.

(i) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain
classified agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by the August 2007 floods;

(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted,
Steele, Wabasha, or Winona;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 2007 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the August
2007 floods, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the
owner must notify the assessor by December 1, 2008. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph
and any dwellings on the agricultural land remain uninhabited.

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter, except that the provision extending the homestead to brothers and sisters is
effective for taxes payable in 2009 and thereafter.

Sec. 25.

Minnesota Statutes 2006, section 273.13, subdivision 23, as amended by Laws
2008, chapter 154, article 2, section 12, is amended to read:


Subd. 23.

Class 2.

(a) Class 2a property is agricultural land including any
improvements
An agricultural homestead consists of class 2a agricultural land that is
homesteaded, along with any class 2b rural vacant land that is contiguous to the class 2a
land
. The market value of the house and garage and immediately surrounding one acre
of land has the same class rates as class 1a or 1b property under subdivision 22. The
value of the remaining land including improvements up to the first tier valuation limit of
agricultural homestead property has a net class rate of 0.55 0.5 percent of market value.
The remaining property over the first tier has a class rate of one percent of market value.
For purposes of this subdivision, the "first tier valuation limit of agricultural homestead
property" and "first tier" means the limit certified under section 273.11, subdivision 23.

(b) Class 2a agricultural land consists of parcels of property, or portions thereof,
that are agricultural land and buildings. Class 2a property has a net class rate of one
percent of market value, unless it is part of an agricultural homestead under paragraph
(a). Class 2a property may contain an incidental amount of property that would otherwise
be classified as 2b, including but not limited to sloughs, wooded wind shelters, acreage
abutting ditches, and other similar land impractical for the assessor to value separately
from the rest of the property.

(c) Class 2b property is (1) rural vacant land consists of parcels of property,
or portions thereof, that are unplatted
real estate, rural in character and not used for
agricultural purposes, including land
used exclusively for growing trees for timber,
lumber, and wood and wood products; (2) real estate that is not improved with a structure
and is used exclusively for growing trees for timber, lumber, and wood and wood products,
if the owner has participated or is participating in a cost-sharing program for afforestation,
reforestation, or timber stand improvement on that particular property, administered or
coordinated by the commissioner of natural resources; (3) real estate that is nonhomestead
agricultural land; or (4) a landing area or public access area of a privately owned public use
airport
, provided that the presence of a minor, ancillary nonresidential structure as defined
by the commissioner of revenue does not disqualify the property from classification
under this paragraph and provided that any parcel improved with a structure that is not a
minor, ancillary nonresidential structure may be split-classified, provided that the acreage
assigned to the split parcel with the structure is at least 20 acres
. Class 2b property has
a net class rate of one percent of market value, except that unplatted property described
in clause (1) or (2) has a net class rate of .65 percent if it consists
unless it is part of an
agricultural homestead under paragraph (a), or qualifies as class 2c under paragraph (d).

(d) Class 2c managed forest land consists of no less than ten 20 and no more than
1,920 acres and statewide per taxpayer that is being managed under a forest management
plan that meets the requirements of chapter 290C, but is not enrolled in the sustainable
forest resource management incentive program. It has a class rate of .65 percent, provided
that the owner of the property must apply to the assessor annually to receive the reduced
class rate and provide the information required by the assessor to verify that the property
qualifies for the reduced rate. The commissioner of natural resources must concur that the
land is qualified. The commissioner of natural resources shall annually provide county
assessors verification information on a timely basis.

(c) (e) Agricultural land as used in this section means contiguous acreage of
ten acres or more,
property used during the preceding year for agricultural purposes.
"Agricultural purposes" as used in this section means the raising or, cultivation, drying,
or storage
of agricultural products for sale, or the storage of machinery or equipment
used in support of agricultural production
. For a property to be classified as agricultural
based only on the drying or storage of agricultural products, the products being dried or
stored must have been produced by the same farm entity as the entity operating the drying
or storage facility.
"Agricultural purposes" also includes enrollment in the Reinvest in
Minnesota program under sections 103F.501 to 103F.535 or the federal Conservation
Reserve Program as contained in Public Law 99-198 if the property was classified as
agricultural (i) under this subdivision for the assessment year 2002 or (ii) in the year prior
to its enrollment. Contiguous acreage on the same parcel, or contiguous acreage on an
immediately adjacent parcel under the same ownership, may also qualify as agricultural
land, but only if it is pasture, timber, waste, unusable wild land, or land included in state
or federal farm programs.
Agricultural classification for property shall be determined
excluding the house, garage, and immediately surrounding one acre of land, and
shall not
be based upon the market value of any residential structures on the parcel or contiguous
parcels under the same ownership.

(d) (f) Real estate of less than five acres, excluding the house, garage, and
immediately surrounding one acre of land, of less than ten acres which is exclusively and
intensively used for raising or cultivating agricultural products, shall be considered as
agricultural land
qualifies as class 2a if:

(i) the entire parcel is tilled or pastured to produce an agricultural product for sale in
three of the last five years;

(ii) the acres are used primarily for drying or storage of grain or storage of machinery
or equipment used to support agricultural activities on other parcels of property operated
by the same farming entity;

(iii) the land mass contains a nursery, provided only those acres used to produce
nursery stock are considered agricultural land;

(iv) the parcel is used exclusively as a livestock or poultry confinement process; or

(v) the parcel is used primarily for market farming; for purposes of this paragraph,
"market farming" means the cultivation of one or more fruits or vegetables or production
of animal or other agricultural products for sale to local markets by the farmer or an
organization with which the farmer is affiliated
.

(g) Land shall be classified as agricultural even if all or a portion of the agricultural
use of that property is the leasing to, or use by another person for agricultural purposes.

Classification under this subdivision is not determinative for qualifying under
section 273.111.

(h) The property classification under this section supersedes, for property tax
purposes only, any locally administered agricultural policies or land use restrictions that
define minimum or maximum farm acreage.

(e) (i) The term "agricultural products" as used in this subdivision includes
production for sale of:

(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
bees, and apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding occurs on land zoned
for agricultural use;

(3) the commercial boarding of horses if the boarding is done in conjunction with
raising or cultivating agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for
equestrian activities, excluding racing;

(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, including short rotation woody crops, and not
sold for timber, lumber, wood, or wood products; and

(8) maple syrup taken from trees grown by a person licensed by the Minnesota
Department of Agriculture under chapter 28A as a food processor.

(f) (j) If a parcel used for agricultural purposes is also used for commercial or
industrial purposes, including but not limited to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities enumerated in clauses (1), (2),
and (3),

the assessor shall classify the part of the parcel used for agricultural purposes as class
1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural products for first sale is
considered an agricultural purpose. A greenhouse or other building where horticultural
or nursery products are grown that is also used for the conduct of retail sales must be
classified as agricultural if it is primarily used for the growing of horticultural or nursery
products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
those products. Use of a greenhouse or building only for the display of already grown
horticultural or nursery products does not qualify as an agricultural purpose.

The assessor shall determine and list separately on the records the market value of
the homestead dwelling and the one acre of land on which that dwelling is located. If any
farm buildings or structures are located on this homesteaded acre of land, their market
value shall not be included in this separate determination.

(g) (k) Class 2d airport landing area consists of a landing area or public access area
of a privately owned public use airport. It has a class rate of one percent of market value.

To qualify for classification under this paragraph (b), clause (4), a privately owned public
use airport must be licensed as a public airport under section 360.018. For purposes of this
paragraph (b), clause (4), "landing area" means that part of a privately owned public use
airport properly cleared, regularly maintained, and made available to the public for use by
aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing
or navigational aids. A landing area also includes land underlying both the primary surface
and the approach surfaces that comply with all of the following:

(i) the land is properly cleared and regularly maintained for the primary purposes of
the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;

(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential purposes.

The land contained in a landing area under this paragraph (b), clause (4), must be described
and certified by the commissioner of transportation. The certification is effective until it
is modified, or until the airport or landing area no longer meets the requirements of this
paragraph (b), clause (4). For purposes of this paragraph (b), clause (4), "public access
area" means property used as an aircraft parking ramp, apron, or storage hangar, or an
arrival and departure building in connection with the airport.

(l) Class 2e consists of land with a commercial aggregate deposit that is actively
being mined and is not otherwise classified as class 2a or 2b. It has a class rate of one
percent of market value. To qualify for classification under this paragraph, the property
must be at least ten contiguous acres in size and the owner of the property must record with
the county recorder of the county in which the property is located an affidavit containing:

(1) a legal description of the property;

(2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;

(3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and

(4) documentation that a permit has been issued by the local unit of government
or the mining activity is allowed under local ordinance. The disclosure must include a
statement from a registered professional geologist, engineer, or soil scientist delineating
the deposit and certifying that it is a commercial aggregate deposit.

For purposes of this section and section 273.1115, "commercial aggregate deposit"
means a deposit that will yield crushed stone or sand and gravel that is suitable for use
as a construction aggregate; and "actively mined" means the removal of top soil and
overburden in preparation for excavation or excavation of a commercial deposit.

(m) When any portion of the property under this subdivision or subdivision 22
begins to be actively mined, the owner must file a supplemental affidavit within 60 days
from the day any aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively being mined must be (1) valued and classified
under subdivision 24 in the next subsequent assessment year, and (2) removed from the
aggregate resource preservation property tax program under section 273.1115, if the
land was enrolled in that program. Copies of the original affidavit and all supplemental
affidavits must be filed with the county assessor, the local zoning administrator, and the
Department of Natural Resources, Division of Land and Minerals. A supplemental
affidavit must be filed each time a subsequent portion of the property is actively mined,
provided that the minimum acreage change is five acres, even if the actual mining activity
constitutes less than five acres.

EFFECTIVE DATE.

The portion of this section reducing the agricultural class rate,
and expanding the definition of "agricultural purposes" in paragraph (e) and "agricultural
products" in paragraph (h), is effective for taxes payable in 2009 and thereafter. The
remainder of the section is effective for taxes payable in 2010 and thereafter.

Sec. 26.

Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read:


Subd. 24.

Class 3.

(a) Commercial and industrial property and utility real and
personal property is class 3a.

(1) Except as otherwise provided, each parcel of commercial, industrial, or utility
real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent
of the remaining market value. In the case of contiguous parcels of property owned by the
same person or entity, only the value equal to the first-tier value of the contiguous parcels
qualifies for the reduced class rate, except that contiguous parcels owned by the same
person or entity shall be eligible for the first-tier value class rate on each separate business
operated by the owner of the property, provided the business is housed in a separate
structure. For the purposes of this subdivision, the first tier means the first $150,000 of
market value. Real property owned in fee by a utility for transmission line right-of-way
shall be classified at the class rate for the higher tier.

For purposes of this subdivision, parcels are considered to be contiguous even if
they are separated from each other by a road, street, waterway, or other similar intervening
type of property. Connections between parcels that consist of power lines or pipelines do
not cause the parcels to be contiguous. Property owners who have contiguous parcels of
property that constitute separate businesses that may qualify for the first-tier class rate shall
notify the assessor by July 1, for treatment beginning in the following taxes payable year.

(2) All Personal property that is: (i) part of an electric generation, transmission, or
distribution
system; or (ii), including tools, implements, and machinery, has a class rate
of 2.4 percent for taxes payable in 2009, and 2.8 percent for taxes payable in 2010 and
thereafter.

(3) Personal property that is either: (i) part of a pipeline system transporting
or distributing water, gas, crude oil, or petroleum products; and (iii) not described in
clause (3), and all
, including tools, implements, and machinery, or (ii) part of an electric
transmission or distribution system, including tools, implements, and machinery, has a
class rate of 2.0 percent for taxes payable in 2009 and thereafter.

(4) Railroad operating property has a class rate as provided under clause (1) for
the first tier of market value and the remaining market value. In the case of multiple
parcels in one county that are owned by one person or entity, only one first tier amount
is eligible for the reduced rate.

(3) The entire market value of personal property that is: (i) tools, implements, and
machinery of an electric generation, transmission, or distribution system; (ii) tools,
implements, and machinery of a pipeline system transporting or distributing water, gas,
crude oil, or petroleum products; or (iii)
the (5) Personal property consisting of mains
and pipes used in the distribution of steam or hot or chilled water for heating or cooling
buildings, has a class rate as provided under clause (1) for the remaining market value
in excess of the first tier.

(b) Employment property defined in section 469.166, during the period provided
in section 469.170, shall constitute class 3b. The class rates for class 3b property are
determined under paragraph (a).

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 27.

Minnesota Statutes 2006, section 273.13, subdivision 25, as amended by Laws
2008, chapter 154, article 2, section 13, is amended to read:


Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more
units and used or held for use by the owner or by the tenants or lessees of the owner
as a residence for rental periods of 30 days or more, excluding property qualifying for
class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
than hospitals exempt under section 272.02, and contiguous property used for hospital
purposes, without regard to whether the property has been platted or subdivided. The
market value of class 4a property has a class rate of 1.25 percent.

(b) Class 4b includes:

(1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;

(2) manufactured homes not classified under any other provision;

(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
farm classified under subdivision 23, paragraph (b) containing two or three units; and

(4) is unimproved property that is classified residential as determined under
subdivision 33.

The market value of class 4b property has a class rate of 1.25 percent.

(c) Class 4bb includes:

(1) nonhomestead residential real estate containing one unit up to three units, other
than seasonal residential recreational property; and

(2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b), containing up to three
units; and

(3) manufactured homes not classified under any other provision.

Class 4bb property has the same class rates as class 1a property under subdivision 22.

Property that has been classified as seasonal residential recreational property at
any time during which it has been owned by the current owner or spouse of the current
owner does not qualify for class 4bb.

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
(b), clause (1), real and personal property devoted to temporary and seasonal residential
occupancy for recreation purposes, including real and personal property devoted to
temporary and seasonal residential occupancy for recreation purposes and not devoted to
commercial purposes for more than 250 days in the year preceding the year of assessment.
For purposes of this clause, property is devoted to a commercial purpose on a specific
day if any portion of the property is used for residential occupancy, and a fee is charged
for residential occupancy. Class 4c property must contain three or more rental units. A
"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
camping site equipped with water and electrical hookups for recreational vehicles. Class
4c property must provide recreational activities such as renting ice fishing houses, boats
and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing tackle. A camping
pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c
regardless of the term of the rental agreement, as long as the use of the camping pad
does not exceed 250 days. In order for a property to be classified as class 4c, seasonal
residential recreational for commercial purposes, at least 40 percent of the annual gross
lodging receipts related to the property must be from business conducted during 90
consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests
during the year must be for periods of at least two consecutive nights; or (ii) at least 20
percent of the annual gross receipts must be from charges for rental of fish houses, boats
and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina
services, launch services, and guide services, or the sale of bait and fishing tackle. For
purposes of this determination, a paid booking of five or more nights shall be counted as
two bookings. Class 4c also includes commercial use real property used exclusively
for recreational purposes in conjunction with class 4c property devoted to temporary
and seasonal residential occupancy for recreational purposes, up to a total of two acres,
provided the property is not devoted to commercial recreational use for more than 250
days in the year preceding the year of assessment and is located within two miles of the
class 4c property with which it is used. Owners of real and personal property devoted
to temporary and seasonal residential occupancy for recreation purposes and all or a
portion of which was devoted to commercial purposes for not more than 250 days in the
year preceding the year of assessment desiring classification as class 4c, must submit a
declaration to the assessor designating the cabins or units occupied for 250 days or less in
the year preceding the year of assessment by January 15 of the assessment year. Those
cabins or units and a proportionate share of the land on which they are located must be
designated class 4c as otherwise provided. The remainder of the cabins or units and
a proportionate share of the land on which they are located will be designated as class
3a. The owner of property desiring designation as class 4c property must provide guest
registers or other records demonstrating that the units for which class 4c designation is
sought were not occupied for more than 250 days in the year preceding the assessment if
so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop,
(4) conference center or meeting room, and (5) other nonresidential facility operated on a
commercial basis not directly related to temporary and seasonal residential occupancy for
recreation purposes does not qualify for class 4c;

(2) qualified property used as a golf course if:

(i) it is open to the public on a daily fee basis. It may charge membership fees or
dues, but a membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically charged by
municipal courses; and

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
with the golf course is classified as class 3a property;

(3) real property up to a maximum of three acres of land owned and used by a
nonprofit community service oriented organization and that is not used for residential
purposes on either a temporary or permanent basis, qualifies for class 4c provided that
it meets either of the following:

(i) the property is not used for a revenue-producing activity for more than six days
in the calendar year preceding the year of assessment; or

(ii) the organization makes annual charitable contributions and donations at least
equal to the property's previous year's property taxes and the property is allowed to be
used for public and community meetings or events for no charge, as appropriate to the
size of the facility.

For purposes of this clause,

(A) "charitable contributions and donations" has the same meaning as lawful
gambling purposes under section 349.12, subdivision 25, excluding those purposes
relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;

(B) "property taxes" excludes the state general tax;

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue
Code of 1986, as amended through December 31, 1990; and

(D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.

Any portion of the property qualifying under item (i) which is used for revenue-producing
activities for more than six days in the calendar year preceding the year of assessment
shall be assessed as class 3a. The use of the property for social events open exclusively
to members and their guests for periods of less than 24 hours, when an admission is
not charged nor any revenues are received by the organization shall not be considered a
revenue-producing activity.

The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the
requirement under item (ii) must file an application by May 1 with the assessor for
eligibility for the current year's assessment. The commissioner shall prescribe a uniform
application form and instructions;

(4) postsecondary student housing of not more than one acre of land that is owned by
a nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;

(5) manufactured home parks as defined in section 327.14, subdivision 3;

(6) real property that is actively and exclusively devoted to indoor fitness, health,
social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
and is located within the metropolitan area as defined in section 473.121, subdivision 2;

(7) a leased or privately owned noncommercial aircraft storage hangar not exempt
under section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and

(ii) the land lease, or any ordinance or signed agreement restricting the use of the
leased premise, prohibits commercial activity performed at the hangar.

If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
be filed by the new owner with the assessor of the county where the property is located
within 60 days of the sale;

(8) a privately owned noncommercial aircraft storage hangar not exempt under
section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land abuts a public airport; and

(ii) the owner of the aircraft storage hangar provides the assessor with a signed
agreement restricting the use of the premises, prohibiting commercial use or activity
performed at the hangar; and

(9) residential real estate, a portion of which is used by the owner for homestead
purposes, and that is also a place of lodging, if all of the following criteria are met:

(i) rooms are provided for rent to transient guests that generally stay for periods
of 14 or fewer days;

(ii) meals are provided to persons who rent rooms, the cost of which is incorporated
in the basic room rate;

(iii) meals are not provided to the general public except for special events on fewer
than seven days in the calendar year preceding the year of the assessment; and

(iv) the owner is the operator of the property.

The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22.

Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
parcel of seasonal residential recreational property not used for commercial purposes has
the same class rates as class 4bb property, (ii) manufactured home parks assessed under
clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
residential recreational property has a class rate of one percent for the first $500,000 of
market value, and 1.25 percent for the remaining market value, (iv) the market value of
property described in clause (4) has a class rate of one percent, (v) the market value of
property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that
portion of the market value of property in clause (9) qualifying for class 4c property
has a class rate of 1.25 percent.

(e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
of the units in the building qualify as low-income rental housing units as certified under
section 273.128, subdivision 3, only the proportion of qualifying units to the total number
of units in the building qualify for class 4d. The remaining portion of the building shall be
classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units in the building.
For all properties qualifying as class 4d, the market value determined by the assessor must
be based on the normal approach to value using normal unrestricted rents.

Class 4d property has a class rate of 0.75 percent.

EFFECTIVE DATE.

This section is effective for assessment year 2008 and
thereafter, and for taxes payable in 2009 and thereafter.

Sec. 28.

Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read:


Subd. 33.

Classification of unimproved property.

(a) All real property that is not
improved with a structure must be classified according to its current use.

(b) Except as provided in subdivision 23, paragraph (c), real property that is not
improved with a structure and for which there is no identifiable current use must be
classified according to its highest and best use permitted under the local zoning ordinance.
If the ordinance permits more than one use, the land must be classified according to the
highest and best use permitted under the ordinance. If no such ordinance exists, the
assessor shall consider the most likely potential use of the unimproved land based upon
the use made of surrounding land or land in proximity to the unimproved land.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 29.

Minnesota Statutes 2006, section 273.1384, subdivision 2, is amended to read:


Subd. 2.

Agricultural homestead market value credit.

Property classified as class
2a
agricultural homestead under section 273.13, subdivision 23, paragraph (a), is eligible
for an agricultural credit. The credit is computed using the property's agricultural credit
market value, defined for this purpose as the property's class 2a market value excluding
the market value of the house, garage, and immediately surrounding one acre of land. The
credit is equal to 0.3 percent of the first $115,000 of the property's agricultural credit
market value minus .05 percent of the property's agricultural credit market value in excess
of $115,000, subject to a maximum reduction of $115. In the case of property that is
classified in as part as class 2a agricultural homestead and in part as class 2b nonhomestead
farm land solely because not all the owners occupy or farm the property, not all the owners
have qualifying relatives occupying or farming the property, or solely because not all the
spouses of owners occupy the property, the credit must be initially computed as if that
nonhomestead agricultural land was also classified as class 2a agricultural homestead and
then prorated to the owner-occupant's percentage of ownership.

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter.

Sec. 30.

[273.1388] PROPERTY TAX CREDIT FOR LEASED LAND.

Noncommercial seasonal residential recreational property located on land leased
from a governmental unit or agency is eligible for a property tax credit equal to 25 percent
of the annual lease payment. Eligible taxpayers must file an application with the county
auditor prior to November 1 of the year in which the property taxes are payable. The
application shall be on a form prescribed by the commissioner of revenue, and must
include such evidence as the county deems necessary of the annual lease payment for the
period corresponding to the taxes payable year. The county may either pay the credit
directly to the property owner or subtract it as a credit on the property tax statement,
whichever it considers to be more administratively cost-efficient. If the county makes a
direct payment of the credit to the property owner, the county must pay the credit by
August 1 of the year in which the taxes are payable or within 45 days of receipt of the
application, whichever is later.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 31.

Minnesota Statutes 2007 Supplement, section 273.1393, is amended to read:


273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are
determined by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

(7) homestead and agricultural credits as provided in section 273.1384;

(8) taconite homestead credit as provided in section 273.135; and

(9) supplemental homestead credit as provided in section 273.1391; and

(10) bovine tuberculosis management credit as provided in section 273.113.

The combination of all property tax credits must not exceed the gross tax amount.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 32.

Minnesota Statutes 2006, section 274.14, is amended to read:


274.14 LENGTH OF SESSION; RECORD.

The board may meet on any ten consecutive meeting days in June, after the second
Friday in June. The actual meeting dates must be contained on the valuation notices
mailed to each property owner in the county as provided in section 273.121. For this
purpose, "meeting days" is defined as any day of the week excluding Saturday and Sunday.
At the board's discretion, "meeting days" may include Saturday.
No action taken by the
county board of review after June 30 is valid, except for corrections permitted in sections
273.01 and 274.01. The county auditor shall keep an accurate record of the proceedings
and orders of the board. The record must be published like other proceedings of county
commissioners. A copy of the published record must be sent to the commissioner of
revenue, with the abstract of assessment required by section 274.16.

For counties that conduct either regular board of review meetings or open book
meetings, at least one of the meeting days must include a meeting that does not end
before 7:00 p.m. For counties that require taxpayer appointments for the board of review,
appointments must include some available times that extend until at least 7:00 p.m. The
county may have a Saturday meeting in lieu of, or in addition to, the extended meeting
times under this paragraph.

Sec. 33.

Minnesota Statutes 2006, section 275.025, subdivision 1, is amended to read:


Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy base amount is $592,000,000 for taxes payable in
2002. For taxes payable in subsequent years, the levy base amount is increased each year
by multiplying the levy base amount for the prior year by the sum of one plus the rate of
increase, if any, in the implicit price deflator for government consumption expenditures
and gross investment for state and local governments prepared by the Bureau of Economic
Analysts of the United States Department of Commerce for the 12-month period ending
March 31 of the year prior to the year the taxes are payable. The tax under this section is
not treated as a local tax rate under section 469.177 and is not the levy of a governmental
unit under chapters 276A and 473F.

In setting the rate, the commissioner shall exclude the tax capacity of property
described in section 473.625 from the tax base.
The commissioner shall increase or
decrease the preliminary or final rate for a year as necessary to account for errors and tax
base changes that affected a preliminary or final rate for either of the two preceding years.
Adjustments are allowed to the extent that the necessary information is available to the
commissioner at the time the rates for a year must be certified, and for the following
reasons:

(1) an erroneous report of taxable value by a local official;

(2) an erroneous calculation by the commissioner; and

(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported on the abstracts of tax lists submitted under
section 275.29 that was not reported on the abstracts of assessment submitted under
section 270C.89 for the same year.

The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.

EFFECTIVE DATE.

This section is effective beginning for property taxes payable
in 2009.

Sec. 34.

Minnesota Statutes 2006, section 275.025, subdivision 2, is amended to read:


Subd. 2.

Commercial-industrial tax capacity.

For the purposes of this section,
"commercial-industrial tax capacity" means the tax capacity of all taxable property
classified as class 3 or class 5(1) under section 273.13, except for electric generation
attached machinery under class 3 and property described in section 473.625. County
commercial-industrial tax capacity amounts are not adjusted for the captured net tax
capacity of a tax increment financing district under section 469.177, subdivision 2, the
net tax capacity of transmission lines deducted from a local government's total net tax
capacity under section 273.425, or fiscal disparities contribution and distribution net
tax capacities under chapter 276A or 473F.

EFFECTIVE DATE.

This section is effective beginning for taxes payable in 2009.

Sec. 35.

Minnesota Statutes 2007 Supplement, section 275.065, subdivision 1, is
amended to read:


Subdivision 1.

Proposed levy.

(a) Notwithstanding any law or charter to the
contrary, on or before September 15 1, each taxing authority, other than a school district,
shall adopt a proposed budget and shall certify to the county auditor the proposed or, in
the case of a town, the final property tax levy for taxes payable in the following year.

(b) On or before September 30 15, each school district that has not mutually agreed
with its home county to extend this date shall certify to the county auditor the proposed
property tax levy for taxes payable in the following year. Each school district that has
agreed with its home county to delay the certification of its proposed property tax levy
must certify its proposed property tax levy for the following year no later than October 7
September 22
. The school district shall certify the proposed levy as:

(1) a specific dollar amount by school district fund, broken down between
voter-approved and non-voter-approved levies and between referendum market value
and tax capacity levies; or

(2) the maximum levy limitation certified by the commissioner of education
according to section 126C.48, subdivision 1.

(c) If the board of estimate and taxation or any similar board that establishes
maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
property tax levies for funds under its jurisdiction by charter to the county auditor by
September 15 1, the city shall be deemed to have certified its levies for those taxing
jurisdictions.

(d) For purposes of this section, "taxing authority" includes all home rule and
statutory cities, towns, counties, school districts, and special taxing districts as defined
in section 275.066. Intermediate school districts that levy a tax under chapter 124 or
136D, joint powers boards established under sections 123A.44 to 123A.446, and Common
School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing
districts for purposes of this section.

EFFECTIVE DATE.

This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.

Sec. 36.

Minnesota Statutes 2007 Supplement, section 275.065, subdivision 1a,
is amended to read:


Subd. 1a.

Overlapping jurisdictions.

In the case of a taxing authority lying in two
or more counties, the home county auditor shall certify the proposed levy and the proposed
local tax rate to the other county auditor by October 5, unless the home county has agreed
to delay the certification of its proposed property tax levy, in which case the home county
auditor shall certify the proposed levy and the proposed local tax rate to the other county
auditor by October 10 September 5. The home county auditor must estimate the levy or
rate in preparing the notices required in subdivision 3, if the other county has not certified
the appropriate information. If requested by the home county auditor, the other county
auditor must furnish an estimate to the home county auditor.

EFFECTIVE DATE.

This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.

Sec. 37.

Minnesota Statutes 2006, section 275.065, subdivision 1c, is amended to read:


Subd. 1c.

Levy; shared, merged, consolidated services.

If two or more taxing
authorities are in the process of negotiating an agreement for sharing, merging, or
consolidating services between those taxing authorities at the time the proposed levy is to
be certified under subdivision 1, each taxing authority involved in the negotiation shall
certify its total proposed levy as provided in that subdivision, including a notification to the
county auditor of the specific service involved in the agreement which is not yet finalized.
The affected taxing authorities may amend their proposed levies under subdivision 1 until
October September 10 for levy amounts relating only to the specific service involved.

EFFECTIVE DATE.

This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.

Sec. 38.

Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision
to read:


Subd. 1d.

Failure to certify proposed levy.

If a taxing authority fails to certify
its proposed levy by the due dates specified under subdivisions 1, 1a, and 1c, the county
auditor shall use the authority's previous year's final levy under section 275.07, subdivision
1, for purposes of determining its proposed property tax notices and public advertisements
under this section.

EFFECTIVE DATE.

This section is effective for notices prepared in 2008, for
property taxes payable in 2009 and thereafter.

Sec. 39.

Minnesota Statutes 2007 Supplement, section 275.065, subdivision 3, is
amended to read:


Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare
and the county treasurer shall deliver after November 10 October 15 and on or before
November October 24 each year, by first class mail to each taxpayer at the address listed
on the county's current year's assessment roll, a notice of proposed property taxes.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes
each taxing authority proposes to collect for taxes payable the following year. In the case
of a town, or in the case of the state general tax, the final tax amount will be its proposed
tax. In the case of taxing authorities required to hold a public meeting under subdivision 6,
the notice must clearly state that each taxing authority, including regional library districts
established under section 134.201, and including the metropolitan taxing districts as
defined in paragraph (i), but excluding all other special taxing districts and towns, will
hold a public meeting to receive public testimony on the proposed budget and proposed or
final property tax levy, or, in case of a school district, on the current budget and proposed
property tax levy. It must clearly state the time and place of each taxing authority's
meeting, a telephone number for the taxing authority that taxpayers may call if they have
questions related to the notice, and an address where comments will be received by mail.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used
for computing property taxes payable in the following year and for taxes payable in the
current year as each appears in the records of the county assessor on November October
1 of the current year; and, in the case of residential property, whether the property is
classified as homestead or nonhomestead. The notice must clearly inform taxpayers of the
years to which the market values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general
tax, net of the residential and agricultural homestead credit under section 273.1384, voter
approved school levy, other local school levy, and the sum of the special taxing districts,
and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement
district as defined under sections 103B.501 to 103B.581, the amount attributable for that
purpose must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed
tax unless the town changes its levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision 9, that a referendum will
be held in the school district at the November general election, the county auditor must
note next to the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the notice. In the
case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
listed separately from the remaining amount of the city's levy. In the case of the city of
St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In the case of Ramsey County, any amount levied
under section 134.07 may be listed separately from the remaining amount of the county's
levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide tax must each be stated
separately and not included in the sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under
the senior citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include
the following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified,
including bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first
Monday in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster
occurring after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value
reductions for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or
the county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
renter, or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November October 27 or
within three days of receipt of the notice, whichever is later. A taxpayer may notify the
county treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises
to which the notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special
taxing districts" means the following taxing districts in the seven-county metropolitan area
that levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
473.446, 473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy and shall be discussed at that
county's public hearing.

(j) The governing body of a county, city, or school district may, with the consent
of the county board, include supplemental information with the statement of proposed
property taxes about the impact of state aid increases or decreases on property tax
increases or decreases and on the level of services provided in the affected jurisdiction.
This supplemental information may include information for the following year, the current
year, and for as many consecutive preceding years as deemed appropriate by the governing
body of the county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and
local government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

EFFECTIVE DATE.

This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.

Sec. 40.

Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision
to read:


Subd. 3b.

Supplemental notice of proposed levy increases.

(a) If a city that has a
population of more than 2,500 or a county proposes a levy that would cause a levy plus
aid increase greater than the threshold increase calculated under paragraph (b), it shall
prepare and deliver by first class mail a supplemental proposed property tax notice to each
property taxpayer in the taxing jurisdiction, as described in this subdivision.

(b) The threshold increase in the proposed property tax levy plus aid is equal to
the levy plus aid amount in the previous year, multiplied by the sum of (i) one percent,
(ii) the percentage growth, if any, in the population in the taxing jurisdiction for the
most recent available year, (iii) the percentage increase in the total market value in the
taxing jurisdiction due to new construction of commercial and industrial property, and
(iv) the percentage increase in the implicit price deflator for government consumption
expenditures and gross investment for state and local governments as prepared by the
United States Department of Commerce for the most recent 12-month period ending
March of the levy year.

(c) The supplemental proposed notice must show the taxing jurisdiction's (1) levy
plus aid amount for the previous year, (2) its threshold levy plus aid increase indicating that
this increase is calculated to reflect reasonable growth adjusting for population increases,
increased demand from new business, and inflation, (3) the aid amount corresponding to
the proposed levy year, (4) the proposed property tax increase, and (5) the amount the
proposed increase in levy plus aid exceeds the threshold increase. The notice must contain
a description of why the jurisdiction needs to raise property taxes above the threshold
amount and how the taxing jurisdiction plans to spend the additional revenue.

(d) For purposes of this subdivision, "aid" means county program aid under section
477A.0124 or local government aid under section 477A.013.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 41.

Minnesota Statutes 2006, section 275.065, subdivision 6, is amended to read:


Subd. 6.

Public hearing; adoption of budget and levy.

(a) For purposes of this
section, the following terms shall have the meanings given:

(1) "Initial hearing" means the first and primary hearing held to discuss the taxing
authority's proposed budget and proposed property tax levy for taxes payable in the
following year, or, for school districts, the current budget and the proposed property tax
levy for taxes payable in the following year.

(2) "Continuation hearing" means a hearing held to complete the initial hearing, if
the initial hearing is not completed on its scheduled date.

(3) "Subsequent hearing" means the hearing held to adopt the taxing authority's final
property tax levy, and, in the case of taxing authorities other than school districts, the final
budget, for taxes payable in the following year.

(b) Between November 29 9 and December 20 1, the governing bodies of a city that
has a population over 500, county, metropolitan special taxing districts as defined in
subdivision 3, paragraph (i), and regional library districts shall each hold an initial public
hearing to discuss and seek public comment on its final budget and property tax levy for
taxes payable in the following year, and the governing body of the school district shall
hold an initial public hearing to review its current budget and proposed property tax
levy for taxes payable in the following year. The metropolitan special taxing districts
shall be required to hold only a single joint initial public hearing, the location of which
will be determined by the affected metropolitan agencies. A city, county, metropolitan
special taxing district as defined in subdivision 3, paragraph (i), regional library district
established under section 134.201, or school district is not required to hold a public
hearing under this subdivision unless its proposed property tax levy for taxes payable
in the following year, as certified under subdivision 1, has increased over its final
property tax levy for taxes payable in the current year by a percentage that is greater
than the percentage increase in the implicit price deflator for government consumption
expenditures and gross investment for state and local governments prepared by the Bureau
of Economic Analysts of the United States Department of Commerce for the 12-month
period ending March 31 of the current year.

(c) The initial hearing must be held after 5:00 p.m. if scheduled on a day other than
Saturday. No initial hearing may be held on a Sunday.

(d) At the initial hearing under this subdivision, the percentage increase in property
taxes proposed by the taxing authority, if any, and the specific purposes for which property
tax revenues are being increased must be discussed. During the discussion, the governing
body shall hear comments regarding a proposed increase and explain the reasons for the
proposed increase. The public shall be allowed to speak and to ask questions. At the public
hearing, the school district must also provide and discuss information on the distribution
of its revenues by revenue source, and the distribution of its spending by program area.

(e) If the initial hearing is not completed on its scheduled date, the taxing authority
must announce, prior to adjournment of the hearing, the date, time, and place for the
continuation of the hearing. The continuation hearing must be held at least five business
days but no more than 14 business days after the initial hearing. A continuation hearing
may not be held later than December 20 except as provided in paragraphs (f) and (g).
A continuation hearing must be held after 5:00 p.m. if scheduled on a day other than
Saturday. No continuation hearing may be held on a Sunday.

(f) The governing body of a county shall hold its initial hearing on the first second
Thursday in December November each year, and may hold additional initial hearings on
other dates before December 20 1 if necessary for the convenience of county residents. If
the county needs a continuation of its hearing, the continuation hearing shall be held on
the third Tuesday in December. If the third Tuesday in December falls on December 21,
the county's continuation hearing shall be held on Monday, December 20
November.

(g) The metropolitan special taxing districts shall hold a joint initial public hearing
on the first Wednesday of December. A continuation hearing, if necessary, shall be held on
the second Wednesday of December even if that second Wednesday is after December 10.

(h) The county auditor shall provide for the coordination of initial and continuation
hearing dates for all school districts and cities within the county to prevent conflicts under
clauses (i) and (j).

(i) By August 10, each school board and the board of the regional library district
shall certify to the county auditors of the counties in which the school district or regional
library district is located the dates on which it elects to hold its initial hearing and any
continuation hearing. If a school board or regional library district does not certify these
dates by August 10, the auditor will assign the initial and continuation hearing dates. The
dates elected or assigned must not conflict with the initial and continuation hearing dates
of the county or the metropolitan special taxing districts.

(j) By August 20, the county auditor shall notify the clerks of the cities within the
county of the dates on which school districts and regional library districts have elected
to hold their initial and continuation hearings. At the time a city certifies its proposed
levy under subdivision 1 it shall certify the dates on which it elects to hold its initial
hearing and any continuation hearing. Until September 15, the first and second Mondays
Monday of December are is reserved for the use of the cities. If a city does not certify its
hearing dates by September 15, the auditor shall assign the initial and continuation hearing
dates. The dates elected or assigned for the initial hearing must not conflict with the
initial hearing dates of the county, metropolitan special taxing districts, regional library
districts, or school districts within which the city is located. To the extent possible, the
dates of the city's continuation hearing should not conflict with the continuation hearing
dates of the county, metropolitan special taxing districts, regional library districts, or
school districts within which the city is located. This paragraph does not apply to cities
of 500 population or less.

(k) The county initial hearing date and the city, metropolitan special taxing district,
regional library district, and school district initial hearing dates must be designated on
the notices required under subdivision 3. The continuation hearing dates need not be
stated on the notices.

(l) At a subsequent hearing, each county, school district, city over 500 population,
and metropolitan special taxing district may amend its proposed property tax levy
and must adopt a final property tax levy. Each county, city over 500 population, and
metropolitan special taxing district may also amend its proposed budget and must adopt a
final budget at the subsequent hearing. The final property tax levy must be adopted prior
to adopting the final budget. A school district is not required to adopt its final budget at the
subsequent hearing. The subsequent hearing of a taxing authority must be held on a date
subsequent to the date of the taxing authority's initial public hearing. If a continuation
hearing is held, the subsequent hearing must be held either immediately following the
continuation hearing or on a date subsequent to the continuation hearing. The subsequent
hearing may be held at a regularly scheduled board or council meeting or at a special
meeting scheduled for the purposes of the subsequent hearing. The subsequent hearing
of a taxing authority does not have to be coordinated by the county auditor to prevent a
conflict with an initial hearing, a continuation hearing, or a subsequent hearing of any
other taxing authority. All subsequent hearings must be held prior to five working days
after December 20 of the levy year. The date, time, and place of the subsequent hearing
must be announced at the initial public hearing or at the continuation hearing.

(m) The property tax levy certified under section 275.07 by a city of any population,
county, metropolitan special taxing district, regional library district, or school district
must not exceed the proposed levy determined under subdivision 1, except by an amount
up to the sum of the following amounts:

(1) the amount of a school district levy whose voters approved a referendum to
increase taxes under section 123B.63, subdivision 3, or 126C.17, subdivision 9, after
the proposed levy was certified;

(2) the amount of a city or county levy approved by the voters after the proposed
levy was certified;

(3) the amount of a levy to pay principal and interest on bonds approved by the
voters under section 475.58 after the proposed levy was certified;

(4) the amount of a levy to pay costs due to a natural disaster occurring after the
proposed levy was certified, if that amount is approved by the commissioner of revenue
under subdivision 6a;

(5) the amount of a levy to pay tort judgments against a taxing authority that become
final after the proposed levy was certified, if the amount is approved by the commissioner
of revenue under subdivision 6a;

(6) the amount of an increase in levy limits certified to the taxing authority by the
commissioner of education or the commissioner of revenue after the proposed levy was
certified; and

(7) the amount required under section 126C.55.

(n) This subdivision does not apply to towns and special taxing districts other than
regional library districts and metropolitan special taxing districts.

(o) Notwithstanding the requirements of this section, the employer is required to
meet and negotiate over employee compensation as provided for in chapter 179A.

EFFECTIVE DATE.

This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.

Sec. 42.

Minnesota Statutes 2006, section 275.065, subdivision 8, is amended to read:


Subd. 8.

Hearing.

Notwithstanding any other provision of law, Ramsey County,
the city of St. Paul, and Independent School District No. 625 are authorized to and shall
hold their initial public hearing jointly. The hearing must be held on during the week of
the second Tuesday of December November each year. The advertisement required in
subdivision 5a may be a joint advertisement. The hearing is otherwise subject to the
requirements of this section.

Ramsey County is authorized to hold an additional initial hearing or hearings as
provided under this section, provided that any additional hearings must not conflict
with the initial or continuation hearing dates of the other taxing districts. However, if
Ramsey County elects not to hold such additional initial hearing or hearings, the joint
initial hearing required by this subdivision must be held in a St. Paul location convenient
to residents of Ramsey County.

EFFECTIVE DATE.

This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter, except that
proposed notices and hearings held in 2008 may be held during the week of the second
Tuesday of December.

Sec. 43.

Minnesota Statutes 2006, section 275.065, subdivision 9, is amended to read:


Subd. 9.

Aitkin County and school district hearing.

Notwithstanding any other
law, Aitkin County and Independent School District No. 1, and the city of Aitkin, or any
two of them, may hold their initial public hearing jointly. The hearing must be held on
the second Tuesday of December November each year. The advertisement required in
subdivision 5a may be a joint advertisement. The hearing is otherwise subject to the
requirements of this section.

EFFECTIVE DATE.

This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.

Sec. 44.

Minnesota Statutes 2006, section 275.065, subdivision 10, is amended to read:


Subd. 10.

Nobles County; joint initial public hearing.

Notwithstanding any
other law, Nobles County, the city of Worthington, and Independent School District No.
518, Worthington, or any two of them, may hold their initial public hearing jointly. The
hearing must be held on the second Tuesday of December November each year. The
advertisement required in subdivision 5a may be a joint advertisement. The hearing is
otherwise subject to the requirements of this section.

EFFECTIVE DATE.

This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.

Sec. 45.

Minnesota Statutes 2006, section 275.70, is amended by adding a subdivision
to read:


Subd. 6.

Levy aid base.

"Levy aid base" for a local governmental unit for a levy
year means its total levy spread on net tax capacity, minus any amounts that would
qualify as a special levy under section 275.70, and plus the sum of (1) the total amount
of aids and reimbursements that the local governmental unit certified to receive under
sections 477A.011 to 477A.014 in the same year, (2) taconite aids under sections 298.28
and 298.282 in the same year, including any aid which was required to be placed in a
special fund for expenditure in the next succeeding year, and (3) payments to the local
governmental unit under section 272.029 in the same year, adjusted for any error in
estimation in the preceding year.

EFFECTIVE DATE.

This section is effective for levies certified in calendar year
2009, payable in calendar year 2010, and thereafter.

Sec. 46.

Minnesota Statutes 2006, section 275.71, is amended to read:


275.71 LEVY LIMITS.

Subdivision 1.

Limit on levies.

Notwithstanding any other provision of law or
municipal charter to the contrary which authorize ad valorem taxes in excess of the limits
established by sections 275.70 to 275.74, the provisions of this section apply to local
governmental units for all purposes other than those for which special levies and special
assessments are made. The limits under these sections only apply as follows:

(1) to all counties in a levy year following a year in which the sum of their levy aid
bases grew by a percent greater than the product of the (i) the percentage increase in the
number of households in the state and (ii) the greater of three percent or the percentage
growth in the implicit price deflator; and

(2) to all cities with a population of 2,500 or more, in a levy year following a year in
which the sum of their levy aid bases grew by a percent greater than the product of the (i)
the percentage increase in the sum of number of households in these cities, and (ii) the
greater of three percent or the percentage growth in the implicit price deflator.

Subd. 2.

Levy limit base.

(a) The levy limit base for a local governmental unit for
taxes levied in 2003 any year in which levy limits apply is equal to its adjusted levy limit
base in the previous year, subject to any adjustments under section 275.72, plus any aid
amounts received in 2003 under section 273.138 or 273.166, minus the difference between
its levy limit under subdivision 5 for taxes levied in 2002 and the amount it actually levied
under that subdivision in that year, and certified property tax replacement aid payable
in 2003 under section 174.242.

(b) If no adjusted levy limit base was calculated for the previous year, the levy limit
base for a local governmental unit is equal to its levy aid base from the previous year.

Subd. 3.

Adjustments for state takeovers.

(a) The levy limit base for each local
unit of government shall be adjusted to reflect the assumption by the state of financing for
certain government functions as indicated in this subdivision.

(b) For a county in a judicial district for which financing has not been transferred
to the state by January 1, 2001, the levy limit base for 2001 is permanently reduced by
the amount of the county's 2001 budget for court administration costs, as certified under
section 273.1398, subdivision 4b, paragraph (b), net of the county's share of transferred
fines and fees collected by the district courts in the county for the same budget period.

(c) For a governmental unit which levied a tax in 2000 under section 473.388,
subdivision 7
, the levy limit base for 2001 is permanently reduced by an amount equal
to the sum of the governmental unit's taxes payable 2001 nondebt transit services levy
plus the portion of its 2001 homestead and agricultural credit aid under section 273.1398,
subdivision 2
, attributable to nondebt transit services.

(d) For counties in a judicial district in which the state assumed financing of
mandated services costs as defined in section 480.181, subdivision 4, on July 1, 2001, the
levy limit base for taxes levied in 2001 is permanently reduced by an amount equal to
one-half of the aid reduction under section 273.1398, subdivision 4a, paragraph (g).

Subd. 4.

Adjusted levy limit base.

(a) For taxes levied in 2003 any year in which
levy limits apply
, the adjusted levy limit base is equal to the levy limit base computed
under subdivisions subdivision 2 and 3 or section 275.72, reduced by 40 percent of the
difference between (1) the sum of 2003 certified aid payments, under sections 273.138,
273.1398 except for amounts certified under subdivision 4a, paragraph (b), 273.166,
477A.011 to 477A.03, 477A.06, and 477A.07, before any reduction under Laws 2003,
First Special Session chapter 21, articles 5 and 6, and (2) the sum of the aids paid in 2004
under those same sections, after any reductions in 2004 under Laws 2003, First Special
Session chapter 21, articles 5 and 6.
multiplied by:

(1) one plus the percentage growth in the implicit price deflator;

(2) one plus a percentage equal to the percentage increase in the number of
households, if any, for the most recent 12-month period for which data is available; and

(3) one plus a percentage equal to 50 percent of the percentage increase in the
taxable market value of the jurisdiction due to new construction of class 3 property, as
defined in section 273.13, subdivision 4, except for state-assessed utility and railroad
property, for the most recent year for which data is available.

(b) For taxes levied in 2003 only, the adjusted levy limit base is increased by 60
percent of the difference between a jurisdiction's market value credit in 2003 before any
reductions under Laws 2003, First Special Session chapter 21, articles 5 and 6, and its
market value credit in 2004 after reductions in Laws 2003, First Special Session chapter
21, articles 5 and 6.

Subd. 5.

Property tax levy limit.

For taxes levied in 2003 years in which the
levy limit applies
, the property tax levy limit for a local governmental unit is equal
to its adjusted levy limit base determined under subdivision 4 plus any additional levy
authorized under section 275.73, which is levied against net tax capacity, reduced by the
sum of (i) the total amount of aids and reimbursements that the local governmental unit
is certified to receive under sections 477A.011 to 477A.014, except for the increases in
city aid bases in calendar year 2002 under section 477A.011, subdivision 36, paragraphs
(l), (n), and (o), (ii) homestead and agricultural aids it is certified to receive under section
273.1398, (iii)
(ii) taconite aids under sections 298.28 and 298.282 including any aid
which was required to be placed in a special fund for expenditure in the next succeeding
year, (iv) temporary court aid under section 273.1398, subdivision 4a, and (v) (iii)
estimated payments to the local governmental unit under section 272.029, adjusted for any
error in estimation in the preceding year.

Subd. 6.

Levies in excess of levy limits.

If the levy made by a city or county
exceeds the levy limit provided in sections 275.70 to 275.74, except when the excess
levy is due to the rounding of the rate in accordance with section 275.28, the county
auditor shall only extend the amount of taxes permitted under sections 275.70 to 275.74,
as provided for in section 275.16.

EFFECTIVE DATE.

This section is effective for levies certified in calendar year
2009, payable in 2010, and thereafter.

Sec. 47.

Minnesota Statutes 2006, section 282.08, is amended to read:


282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.

The net proceeds from the sale or rental of any parcel of forfeited land, or from the
sale of products from the forfeited land, must be apportioned by the county auditor to the
taxing districts interested in the land, as follows:

(1) the portion required to pay any amounts included in the appraised value
under section 282.01, subdivision 3, as representing increased value due to any public
improvement made after forfeiture of the parcel to the state, but not exceeding the amount
certified by the clerk of the municipality appropriate governmental authority must be
apportioned to the municipal governmental subdivision entitled to it;

(2) the portion required to pay any amount included in the appraised value under
section 282.019, subdivision 5, representing increased value due to response actions
taken after forfeiture of the parcel to the state, but not exceeding the amount of expenses
certified by the Pollution Control Agency or the commissioner of agriculture, must be
apportioned to the agency or the commissioner of agriculture and deposited in the fund
from which the expenses were paid;

(3) the portion of the remainder required to discharge any special assessment
chargeable against the parcel for drainage or other purpose whether due or deferred at
the time of forfeiture, must be apportioned to the municipal governmental subdivision
entitled to it; and

(4) any balance must be apportioned as follows:

(i) The county board may annually by resolution set aside no more than 30 percent
of the receipts remaining to be used for forest development on tax-forfeited land and
dedicated memorial forests, to be expended under the supervision of the county board. It
must be expended only on projects improving the health and management of the forest
resource.

(ii) The county board may annually by resolution set aside no more than 20 percent
of the receipts remaining to be used for the acquisition and maintenance of county parks
or recreational areas as defined in sections 398.31 to 398.36, to be expended under the
supervision of the county board.

(iii) Any balance remaining must be apportioned as follows: county, 40 percent;
town or city, 20 percent; and school district, 40 percent, provided, however, that in
unorganized territory that portion which would have accrued to the township must be
administered by the county board of commissioners.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 48.

Minnesota Statutes 2006, section 290B.03, subdivision 1, is amended to read:


Subdivision 1.

Program qualifications.

The qualifications for the senior citizens'
property tax deferral program are as follows:

(1) the property must be owned and occupied as a homestead by a person 65 years
of age or older. In the case of a married couple, both only one of the spouses must be at
least 65 years old and the other spouse must be at least 62 years old at the time the first
property tax deferral is granted, regardless of whether the property is titled in the name
of one spouse or both spouses, or titled in another way that permits the property to have
homestead status;

(2) the total household income of the qualifying homeowners homeowner, or in the
case of a married couple, the qualifying homeowner and spouse
, as defined in section
290A.03, subdivision 5, for the calendar year preceding the year of the initial application
may not exceed $60,000 $80,000;

(3) the homestead must have been owned and occupied as the homestead of at
least one of the qualifying homeowners for at least 15 years prior to the year the initial
application is filed;

(4) there are no state or federal tax liens or judgment liens on the homesteaded
property;

(5) there are no mortgages or other liens on the property that secure future advances,
except for those subject to credit limits that result in compliance with clause (6); and

(6) the total unpaid balances of debts secured by mortgages and other liens on the
property, including unpaid and delinquent special assessments and interest and any
delinquent property taxes, penalties, and interest, but not including property taxes payable
during the year, does not exceed 75 percent of the assessor's estimated market value for
the year.

EFFECTIVE DATE.

This section is effective for applications filed on or after
July 1, 2008.

Sec. 49.

Minnesota Statutes 2006, section 290B.04, subdivision 3, is amended to read:


Subd. 3.

Excess-income certification by taxpayer.

A taxpayer whose initial
application has been approved under subdivision 2 shall notify the commissioner of
revenue in writing by July 1 if the taxpayer's household income for the preceding calendar
year exceeded $60,000 $80,000. The certification must state the homeowner's total
household income for the previous calendar year. No property taxes may be deferred
under this chapter in any year following the year in which a program participant filed or
should have filed an excess-income certification under this subdivision showing income in
excess of the maximum allowed
, unless the participant has filed a resumption of eligibility
certification as described in subdivision 4.

EFFECTIVE DATE.

This section is effective for applications filed on or after
July 1, 2008.

Sec. 50.

Minnesota Statutes 2006, section 290B.04, subdivision 4, is amended to read:


Subd. 4.

Resumption of eligibility certification by taxpayer.

A taxpayer who has
previously filed an excess-income certification under subdivision 3 may resume program
participation if the taxpayer's household income for a subsequent year is $60,000 $80,000
or less. If the taxpayer chooses to resume program participation, the taxpayer must notify
the commissioner of revenue in writing by July 1 of the year following a calendar year in
which the taxpayer's household income is $60,000 $80,000 or less. The certification must
state the taxpayer's total household income for the previous calendar year. Once a taxpayer
resumes participation in the program under this subdivision, participation will continue
until the taxpayer files a subsequent excess-income certification under subdivision 3 or
until participation is terminated under section 290B.08, subdivision 1.

EFFECTIVE DATE.

This section is effective for applications filed on or after
July 1, 2008.

Sec. 51.

Minnesota Statutes 2006, section 290B.05, subdivision 1, is amended to read:


Subdivision 1.

Determination by commissioner.

The commissioner shall
determine each qualifying homeowner's "annual maximum property tax amount"
following approval of the homeowner's initial application and following the receipt of a
resumption of eligibility certification. The "annual maximum property tax amount" equals
three percent of the homeowner's total household income for the year preceding either the
initial application or the resumption of eligibility certification, whichever is applicable.
Following approval of the initial application, the commissioner shall determine the
qualifying homeowner's "maximum allowable deferral." No tax may be deferred relative
to the appropriate assessment year for any homeowner whose total household income
for the previous year exceeds $60,000 $80,000. No tax shall be deferred in any year in
which the homeowner does not meet the program qualifications in section 290B.03. The
maximum allowable total deferral is equal to 75 percent of the assessor's estimated market
value for the year, less the balance of any mortgage loans and other amounts secured by
liens against the property at the time of application, including any unpaid and delinquent
special assessments and interest and any delinquent property taxes, penalties, and interest,
but not including property taxes payable during the year.

EFFECTIVE DATE.

This section is effective for applications received on or after
July 1, 2008.

Sec. 52.

Minnesota Statutes 2006, section 290B.07, is amended to read:


290B.07 LIEN; DEFERRED PORTION.

(a) Payment by the state to the county treasurer of property taxes, penalties, interest,
or special assessments and interest deferred under this chapter is deemed a loan from the
state to the program participant. The commissioner must compute the interest as provided
in section 270C.40, subdivision 5, but not to exceed five percent, and
maintain records of
the total deferred amount and interest for each participant. Interest shall accrue beginning
September 1 of the payable year for which the taxes are deferred, provided that no interest
shall be charged on (1) deferred property tax amounts on applications filed on or after
July 1, 2008, or (2) deferred property taxes beginning with taxes payable in 2009 on
applications filed prior to July 1, 2008
. Any deferral made under this chapter shall not
be construed as delinquent property taxes.

The lien created under section 272.31 continues to secure payment by the taxpayer,
or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
respect to all years for which amounts are deferred. The lien for deferred taxes and interest
has the same priority as any other lien under section 272.31, except that liens, including
mortgages, recorded or filed prior to the recording or filing of the notice under section
290B.04, subdivision 2, have priority over the lien for deferred taxes and interest. A
seller's interest in a contract for deed, in which a qualifying homeowner is the purchaser
or an assignee of the purchaser, has priority over deferred taxes and interest on deferred
taxes, regardless of whether the contract for deed is recorded or filed. The lien for deferred
taxes and interest for future years has the same priority as the lien for deferred taxes and
interest for the first year, which is always higher in priority than any mortgages or other
liens filed, recorded, or created after the notice recorded or filed under section 290B.04,
subdivision 2
. The county treasurer or auditor shall maintain records of the deferred
portion and shall list the amount of deferred taxes for the year and the cumulative deferral
and interest for all previous years as a lien against the property. In any certification of
unpaid taxes for a tax parcel, the county auditor shall clearly distinguish between taxes
payable in the current year, deferred taxes and interest, and delinquent taxes. Payment
of the deferred portion becomes due and owing at the time specified in section 290B.08.
Upon receipt of the payment, the commissioner shall issue a receipt for it to the person
making the payment upon request and shall notify the auditor of the county in which the
parcel is located, within ten days, identifying the parcel to which the payment applies.
Upon receipt by the commissioner of revenue of collected funds in the amount of the
deferral, the state's loan to the program participant is deemed paid in full.

(b) If property for which taxes have been deferred under this chapter forfeits
under chapter 281 for nonpayment of a nondeferred property tax amount, or because
of nonpayment of amounts previously deferred following a termination under section
290B.08, the lien for the taxes deferred under this chapter, plus interest and costs, shall be
canceled by the county auditor as provided in section 282.07. However, notwithstanding
any other law to the contrary, any proceeds from a subsequent sale of the property under
chapter 282 or another law, must be used to first reimburse the county's forfeited tax sale
fund for any direct costs of selling the property or any costs directly related to preparing
the property for sale, and then to reimburse the state for the amount of the canceled lien.
Within 90 days of the receipt of any sale proceed to which the state is entitled under these
provisions, the county auditor must pay those funds to the commissioner of revenue by
warrant for deposit in the general fund. No other deposit, use, distribution, or release of
gross sale proceeds or receipts may be made by the county until payments sufficient
to fully reimburse the state for the canceled lien amount have been transmitted to the
commissioner.

EFFECTIVE DATE.

This section is effective July 1, 2008.

Sec. 53.

[290D.01] CITATION.

This program shall be named the "seasonal recreational property tax deferral
program."

EFFECTIVE DATE.

This section is effective July 1, 2009.

Sec. 54.

[290D.02] TERMS.

Subdivision 1.

Terms.

For purposes of sections 290D.01 to 290D.08, the terms
defined in this section have the meanings given them.

Subd. 2.

Primary property owner.

"Primary property owner" means a person who
(1) has been the owner, or one of the owners, of the eligible property for at least 15 years
prior to the year the application is filed under section 290D.04; and (2) applies for the
deferral of property taxes under section 290D.04.

Subd. 3.

Secondary property owner.

"Secondary property owner" means any
person, other than the primary property owner, who has been an owner of the eligible
property for at least 15 years prior to the year the initial application is filed for deferral
of property taxes under section 290D.04.

Subd. 4.

Eligible property.

"Eligible property" means a parcel of property or
contiguous parcels of property under the same ownership classified as noncommercial
seasonal residential recreational 4c(1) property under section 273.13, subdivision 25.

Subd. 5.

Base property tax amount.

"Base property tax amount" means the total
property taxes levied by all taxing jurisdictions, including special assessments, on the
eligible property in the year prior to the year that the initial application is approved under
section 290D.04 and payable in the year of the application.

Subd. 6.

Special assessments.

"Special assessments" means any assessment, fee, or
other charge that may be made by law, and that appears on the property tax statement for
the property for collection under the laws applicable to the enforcement of real estate taxes.

Subd. 7.

Commissioner.

"Commissioner" means the commissioner of revenue.

EFFECTIVE DATE.

This section is effective for applications filed July 1, 2009,
and thereafter.

Sec. 55.

[290D.03] QUALIFICATIONS FOR DEFERRAL.

In order for an eligible property to qualify for treatment under this program:

(1) the eligible property must have been owned solely by the primary property owner,
or jointly with others, for at least 15 years prior to the year the initial application is filed;

(2) there must be no state or federal tax liens or judgment liens on the eligible
property;

(3) there must be no mortgages or other liens on the eligible property that secure
future advances, except for those subject to credit limits that result in compliance with
clause (4); and

(4) the total unpaid balances of debts secured by mortgages and other liens on the
eligible property, including unpaid and delinquent special assessments and interest and
any delinquent property taxes, penalties, and interest, but not including property taxes
payable during the year, must not exceed 60 percent of the assessor's estimated market
value for the current assessment year.

EFFECTIVE DATE.

This section is effective for applications filed July 1, 2009,
and thereafter.

Sec. 56.

[290D.04] APPLICATION FOR DEFERRAL.

Subdivision 1.

Initial application.

(a) A primary owner of a property meeting
the qualifications under section 290D.03 may apply to the commissioner for deferral
of taxes on the eligible property. Applications are due on or before July 1 for deferral
of any taxes payable in the following year. The application, which must be prescribed
by the commissioner, shall include the following items and any other information the
commissioner deems necessary:

(1) the name, address, and Social Security number of the primary property owner
and secondary property owners, if any;

(2) a copy of the property tax statement for the current taxes payable year for the
eligible property;

(3) the initial year of ownership of the primary property owner and any second
property owners of the eligible property;

(4) information on any mortgage loans or other amounts secured by mortgages or
other liens against the eligible property, for which purpose the commissioner may require
the applicant to provide a copy of the mortgage note, the mortgage, or a statement of the
balance owing on the mortgage loan provided by the mortgage holder. The commissioner
may require the appropriate documents in connection with obtaining and confirming
information on unpaid amounts secured by other liens; and

(5) the signatures of the primary property owner and all other owners, if any, stating
that each owner agrees to enroll the eligible property in the program to defer property
taxes under this chapter.

The application must state that program participation is voluntary. The application
must also state that program participation includes authorization for the annual deferred
amount. The deferred property tax calculated by the county and the cumulative deferred
property tax amount is public data.

(b) As part of the initial application process, if the property is abstract property, the
commissioner may require the applicant to obtain at the applicant's cost a report prepared
by a licensed abstracter showing the last deed and any unsatisfied mortgages, liens,
judgments, and state and federal tax lien notices which were recorded on or after the date
of that last deed with respect to the eligible property or to the applicant.

The certificate or report need not include references to any documents filed or
recorded more than 40 years prior to the date of the certification or report. The certification
or report must be as of a date not more than 30 days prior to submission of the application
under this section.

The commissioner may also require the county recorder or county registrar of the
county where the eligible property is located to provide copies of recorded documents
related to the applicant of the eligible property, for which the recorder or registrar shall
not charge a fee. The commissioner may use any information available to determine or
verify eligibility under this section.

Subd. 2.

Approval; recording.

The commissioner shall approve all initial
applications that qualify under this chapter and shall notify the primary property owner on
or before December 1. The commissioner may investigate the facts or require confirmation
in regard to an application. The commissioner shall record or file a notice of qualification
for deferral, including the names of the primary and any secondary property owners and a
legal description of the eligible property, in the office of the county recorder, or registrar of
titles, whichever is applicable, in the county where the eligible property is located. The
notice must state that it serves as a notice of lien and that it includes deferrals under this
section for future years. The primary property owner shall pay the recording or filing fees
for the notice, which, notwithstanding section 357.18, shall be paid by that owner at the
time of satisfaction of the lien.

Subd. 3.

Penalty for failure; investigations.

(a) The commissioner shall assess
a penalty equal to 20 percent of the property taxes improperly deferred in the case of a
false application. The commissioner shall assess a penalty equal to 50 percent of the
property taxes improperly deferred if the taxpayer knowingly filed a false application. The
commissioner shall assess penalties under this section through the issuance of an order
under the provisions of chapter 270C. Persons affected by a commissioner's order issued
under this section may appeal as provided in chapter 270C.

(b) The commissioner may conduct investigations related to initial applications
required under this chapter within the period ending 3-1/2 years from the due date of
the application.

Subd. 4.

Annual certification to commissioner.

Annually on or before July 1,
the primary property owner must certify to the commissioner that the person continues
to qualify as a primary property owner. If the primary owner has died or has transferred
the property in the preceding year, a certification may be filed by the primary owner's
spouse, or by one of the secondary owners, provided that the person is currently an
owner of the property. In this case, the primary owner's spouse or the secondary owner
shall be considered the primary owner from that point forward. If neither the primary
owner, the primary owner's spouse, or a secondary owner is eligible to file the required
annual certification for the property, the property's participation in the program shall be
terminated, and the procedures in section 290D.07 apply.

Subd. 5.

Annual notice to primary property owner.

Annually, on or before
September 1, the commissioner shall notify each primary property owner, in writing, of
the total cumulative deferred taxes and accrued interest on the qualifying property as of
that date.

EFFECTIVE DATE.

This section is effective for applications filed July 1, 2009,
and thereafter.

Sec. 57.

[290D.05] DEFERRED PROPERTY TAX AMOUNT.

Subdivision 1.

Calculation of deferred property tax amount.

Each year after
the county auditor has determined the final property tax rates under section 275.08, the
"deferred property tax amount" must be calculated on each eligible property. The deferred
property tax amount is equal to 50 percent of the amount of the difference between (1) the
total amount of property taxes and special assessments levied upon the eligible property
for the current year by all taxing jurisdictions and (2) the eligible property's base property
tax amount. Any tax attributable to new improvements made to the eligible property after
the initial application has been approved under section 290D.04, subdivision 2, must be
excluded in determining the deferred property tax amount. The eligible property's total
current year's tax less the deferred property tax amount for the current year must be listed
on the property tax statement and is the amount due to the county under chapter 276.
Reference that the property is enrolled in the seasonal recreational property tax deferral
program under this chapter and a state lien has been recorded must be clearly printed on
the statement.

Subd. 2.

Certification to commissioner.

The county auditor shall annually, on or
before April 15, certify to the commissioner the property tax deferral amounts determined
under this section for each eligible property in the county. The commissioner shall
prescribe the information that is necessary to identify the eligible properties.

Subd. 3.

Limitation on total amount of deferred taxes.

The total amount of
deferred taxes and interest on a property, when added to (1) the balance owed on any
mortgages on the property at the time of initial application; (2) other amounts secured by
liens on the property at the time of the initial application; and (3) any unpaid and delinquent
special assessments and interest and any delinquent property taxes, penalties, and interest,
but not including property taxes payable during the year, must not exceed 60 percent of
the assessor's estimated market value of the property for the current assessment year.

EFFECTIVE DATE.

This section is effective for applications filed July 1, 2009,
and thereafter.

Sec. 58.

[290D.06] LIEN; DEFERRED PORTION.

(a) Payment by the state to the county treasurer of property taxes, penalties, interest,
or special assessments and interest, deferred under this chapter is deemed a loan from the
state to the program participant. The commissioner shall compute the interest as provided
in section 270C.40, subdivision 5, but not to exceed two percent over the maximum
interest rate provided in section 290B.07, paragraph (a), and maintain records of the total
deferred amount and interest for each participant. Interest accrues beginning September 1
of the payable year for which the taxes are deferred. Any deferral made under this chapter
must not be construed as delinquent property taxes.

The lien created under section 272.31 continues to secure payment by the taxpayer,
or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
respect to all years for which amounts are deferred. The lien for deferred taxes and interest
has the same priority as any other lien under section 272.31, except that liens, including
mortgages, recorded or filed prior to the recording or filing of the notice under section
290D.04, subdivision 2, have priority over the lien for deferred taxes and interest. A
seller's interest in a contract for deed, in which a qualifying owner is the purchaser or an
assignee of the purchaser, has priority over deferred taxes and interest on deferred taxes,
regardless of whether the contract for deed is recorded or filed. The lien for deferred taxes
and interest for future years has the same priority as the lien for deferred taxes and interest
for the first year, which is always higher in priority than any mortgages or other liens filed,
recorded, or created after the notice recorded or filed under section 290D.04, subdivision
2
. The county treasurer or auditor shall maintain records of the deferred portion and shall
list the amount of deferred taxes for the year and the cumulative deferral and interest for
all previous years as a lien against the eligible property. In any certification of unpaid
taxes for a tax parcel, the county auditor shall clearly distinguish between taxes payable in
the current year, deferred taxes and interest, and delinquent taxes. Payment of the deferred
portion becomes due and owing at the time specified in section 290D.07. Upon receipt of
the payment, the commissioner shall issue a receipt to the person making the payment
upon request and shall notify the auditor of the county in which the parcel is located,
within ten days, identifying the parcel to which the payment applies. Upon receipt by the
commissioner of collected funds in the amount of the deferral, the state's loan to the
program participant is deemed paid in full.

(b) If eligible property for which taxes have been deferred under this chapter forfeits
under chapter 281 for nonpayment of a nondeferred property tax amount, or because
of nonpayment of amounts previously deferred following a termination under section
290D.07, the lien for the taxes deferred under this chapter, plus interest and costs, shall be
canceled by the county auditor as provided in section 282.07. However, notwithstanding
any other law to the contrary, any proceeds from a subsequent sale of the eligible property
under chapter 282 or another law must be used to first reimburse the county's forfeited
tax sale fund for any direct costs of selling the eligible property or any costs directly
related to preparing the eligible property for sale, and then to reimburse the state for
the amount of the canceled lien. Within 90 days of the receipt of any sale proceeds to
which the state is entitled under these provisions, the county auditor must pay those funds
to the commissioner by warrant for deposit in the general fund. No other deposit, use,
distribution, or release of gross sale proceeds or receipts may be made by the county until
payments sufficient to fully reimburse the state for the canceled lien amount have been
transmitted to the commissioner.

EFFECTIVE DATE.

This section is effective for applications filed July 1, 2009,
and thereafter.

Sec. 59.

[290D.07] TERMINATION OF DEFERRAL; PAYMENT OF
DEFERRED TAXES.

Subdivision 1.

Termination.

(a) The deferral of taxes granted under this chapter
terminates when one of the following occurs:

(1) the eligible property is sold or transferred to someone other than the primary
owner's spouse or a secondary owner;

(2) the death of the primary owner, or in the case of a married couple, after the
death of both spouses, provided that there is not a secondary owner eligible to become
the primary owner;

(3) the primary property owner notifies the commissioner, in writing, that all owners,
including any secondary property owners, desire to discontinue the deferral; or

(4) the eligible property no longer qualifies under section 290D.03.

(b) An eligible property is not terminated from the program because no deferred
property tax amount is determined for any given year after the eligible property's initial
enrollment into the program.

(c) An eligible property is not terminated from the program if the eligible property
subsequently becomes the homestead of one or more of the property owners and the
property and the owners qualify for, and are immediately enrolled in, the senior deferral
program under chapter 290B.

Subd. 2.

Payment upon termination.

Upon the termination of the deferral under
subdivision 1, the amount of deferred taxes, penalties, interest, and special assessments
and interest, plus the recording or filing fees under this subdivision and section 290D.04,
subdivision 2
, becomes due and payable to the commissioner within 90 days of termination
of the deferral for terminations under subdivision 1, paragraph (a), clauses (1) and (2),
and within one year of termination of the deferral for terminations under subdivision 1,
paragraph (a), clauses (3) and (4). No additional interest is due on the deferral if timely
paid. On receipt of payment, the commissioner shall, within ten days, notify the auditor
of the county in which the parcel is located, identifying the parcel to which the payment
applies and shall remit the recording or filing fees under this subdivision and section
290D.04, subdivision 2, to the auditor. A notice of termination of deferral, containing the
legal description and the recording or filing data for the notice of qualification for deferral
under section 290D.04, subdivision 2, shall be prepared and recorded or filed by the
county auditor in the same office in which the notice of qualification for deferral under
section 290D.04, subdivision 2, was recorded or filed, and the county auditor shall mail a
copy of the notice of termination to the property owner. The property owner shall pay the
recording or filing fees. Upon recording or filing of the notice of termination of deferral,
the notice of qualification for deferral under section 290D.04, subdivision 2, and the lien
created by it are discharged. If the deferral is not timely paid, the penalty, interest, lien,
forfeiture, and other rules for the collection of ad valorem property taxes apply.

EFFECTIVE DATE.

This section is effective for applications filed July 1, 2009,
and thereafter.

Sec. 60.

[290D.08] STATE REIMBURSEMENT.

Subdivision 1.

Determination; payment.

The county auditor shall determine the
total current year's deferred amount of property tax under this chapter in the county, and
submit those amounts as part of the abstracts of tax lists submitted by the county auditors
under section 275.29. The commissioner may make changes in the abstracts of tax lists as
deemed necessary. The commissioner, after such review, shall pay the deferred amount of
property tax to each county treasurer on or before August 31.

The county treasurer shall distribute, as part of the October settlement, the funds
received as if they had been collected as part of the property tax.

Subd. 2.

Appropriation.

An amount sufficient to pay the total amount of property
tax determined under subdivision 1, plus any amounts paid under section 290D.04,
subdivision 4
, is annually appropriated from the general fund to the commissioner.

EFFECTIVE DATE.

This section is effective for applications filed July 1, 2009,
and thereafter.

Sec. 61.

Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

Except as may otherwise be provided, the following
words, when used in this section, shall have the meanings herein ascribed to them.

(1) "Aggregate material" shall mean nonmetallic natural mineral aggregate including,
but not limited to sand, silica sand, gravel, crushed rock, limestone, granite, and borrow,
but only if the borrow is transported on a public road, street, or highway. Aggregate
material shall not include dimension stone and dimension granite. Aggregate material
must be measured or weighed after it has been extracted from the pit, quarry, or deposit.

(2) "Person" shall mean any individual, firm, partnership, corporation, organization,
trustee, association, or other entity.

(3) "Operator" shall mean any person engaged in the business of removing aggregate
material from the surface or subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a marketable product or service.

(4) "Extraction site" shall mean a pit, quarry, or deposit containing aggregate
material and any contiguous property to the pit, quarry, or deposit which is used by the
operator for stockpiling the aggregate material.

(5) "Importer" shall mean any person who buys aggregate material produced
excavated
from a county not listed in paragraph (6) or another state and causes the
aggregate material to be imported into a county in this state which imposes a tax on
aggregate material.

(6) "County" shall mean the counties of Pope, Stearns, Benton, Sherburne, Carver,
Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman,
Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley,
Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose
board has voted after a public hearing to impose the tax under this section and has notified
the commissioner of revenue of the imposition of the tax.

(7) "Borrow" shall mean granular borrow, consisting of durable particles of gravel
and sand, crushed quarry or mine rock, crushed gravel or stone, or any combination
thereof, the ratio of the portion passing the (#200) sieve divided by the portion passing the
(1 inch) sieve may not exceed 20 percent by mass.

EFFECTIVE DATE.

This section is effective January 1, 2009.

Sec. 62.

Minnesota Statutes 2006, section 298.75, subdivision 2, is amended to read:


Subd. 2.

Tax imposed.

(a) A county that imposes the aggregate production tax shall
impose upon every importer and operator a production tax up to ten cents of 21.5 cents per
cubic yard or up to seven 15 cents per ton of aggregate material removed excavated in the
county
except that the county board may decide not to impose this tax if it determines
that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
aggregate material from that county. The tax shall not be imposed on aggregate material
produced excavated in the county when until the aggregate material is transported from
the extraction site or sold, whichever occurs first. When aggregate material is stored in a
stockpile within the state of Minnesota and a public highway, road or street is not used
for transporting the aggregate material, the tax shall not be imposed until either when the
aggregate material is sold, or when it is transported from the stockpile site, or when it is
used from the stockpile, whichever occurs first.

(b) A county that imposes the aggregate production tax under paragraph (a) shall
impose upon every importer a production tax of 21.5 cents per cubic yard or 15 cents per
ton of aggregate material imported into the county. The tax shall be imposed when the
aggregate material is imported from the extraction site or sold. When imported aggregate
material is stored in a stockpile within the state of Minnesota and a public highway, road,
or street is not used for transporting the aggregate material, the tax shall be imposed either
when the aggregate material is sold, when it is transported from the stockpile site, or when
it is used from the stockpile, whichever occurs first.
The tax shall be imposed on an
importer when the aggregate material is imported into the county that imposes the tax.

(c) If the aggregate material is transported directly from the extraction site to a
waterway, railway, or another mode of transportation other than a highway, road or street,
the tax imposed by this section shall be apportioned equally between the county where the
aggregate material is extracted and the county to which the aggregate material is originally
transported. If that destination is not located in Minnesota, then the county where the
aggregate material was extracted shall receive all of the proceeds of the tax.

(d) A county, city, or town that receives revenue under this section is prohibited
from imposing any additional host community fees on aggregate production within that
county, city, or town.

EFFECTIVE DATE.

This section is effective January 1, 2009.

Sec. 63.

Minnesota Statutes 2006, section 298.75, subdivision 6, is amended to read:


Subd. 6.

Penalties; removal of aggregate if previous tax not paid; false report.

It is a misdemeanor for any operator or importer to remove aggregate material from a
pit, quarry, or deposit or for any importer to import aggregate material unless all taxes
due under this section for the all previous reporting period periods have been paid or
objections thereto have been filed pursuant to subdivision 4.

It is a misdemeanor for the operator or importer who is required to file a report to file
a false report with intent to evade the tax.

EFFECTIVE DATE.

This section is effective January 1, 2009.

Sec. 64.

Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read:


Subd. 7.

Proceeds of taxes.

(a) All money collected as taxes under this section
shall be deposited in the county treasury and credited as follows, for expenditure by the
county board:
according to this subdivision.

(b) The county auditor may retain an annual administrative fee of up to five percent
of the total taxes collected in any year.

(c) The balance of the taxes, after any deduction under paragraph (b), shall be
credited as follows:

(a) Sixty (1) 42.5 percent to the county road and bridge fund for expenditure for the
maintenance, construction and reconstruction of roads, highways and bridges;

(b) Thirty (2) 42.5 percent to the road and bridge fund of those towns as determined
by the county board and to the
general fund or other designated fund of those cities as
determined by the county board
of the city or town in which the mine is located, or to the
county, if the mine is located in an unorganized town
, to be expended for maintenance,
construction and reconstruction of roads, highways and bridges; and

(c) Ten (3) 15 percent to a special reserve fund which is hereby established, for
expenditure for the restoration of abandoned pits, quarries, or deposits located upon public
and tax forfeited lands
within the county.

If there are no abandoned pits, quarries or deposits located upon public or tax
forfeited lands
within the county, this portion of the tax shall be deposited in the county
road and bridge fund for expenditure for the maintenance, construction and reconstruction
of roads, highways and bridges
used for any other unmet reclamation need or for
conservation or other environmental needs
.

EFFECTIVE DATE.

This section is effective January 1, 2009.

Sec. 65.

Minnesota Statutes 2006, section 365A.095, is amended to read:


365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE;
REFUND OF SURPLUS
.

Subdivision 1.

Petition; procedure.

A petition signed by at least 75 percent of the
property owners in the territory of the subordinate service district requesting the removal
of the district may be presented to the town board. Within 30 days after the town board
receives the petition, the town clerk shall determine the validity of the signatures on
the petition. If the requisite number of signatures are certified as valid, the town board
must hold a public hearing on the petitioned matter. Within 30 days after the end of
the hearing, the town board must decide whether to discontinue the subordinate service
district, continue as it is, or take some other action with respect to it.

Subd. 2.

Option to refund surplus.

If the district is removed under subdivision 1,
after all outstanding obligations of the district have been paid in full, the town board may
vote to refund any surplus tax revenue or service charge, or any part of it, collected from
the district under section 365A.08. The refund must be distributed equally to the owners
of any property within the discontinued district that were charged the extra tax or service
fee during the most recent tax year for which the tax or service fee was imposed. Any
surplus not refunded under this section must be transferred to the town's general fund.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 66.

Minnesota Statutes 2006, section 429.101, subdivision 1, is amended to read:


Subdivision 1.

Ordinances.

(a) In addition to any other method authorized by
law or charter, the governing body of any municipality may provide for the collection
of unpaid special charges as a special assessment against the property benefited for all
or any part of the cost of:

(1) snow, ice, or rubbish removal from sidewalks;

(2) weed elimination from streets or private property;

(3) removal or elimination of public health or safety hazards from private property,
excluding any structure included under the provisions of sections 463.15 to 463.26;

(4) installation or repair of water service lines, street sprinkling or other dust
treatment of streets;

(5) the trimming and care of trees and the removal of unsound trees from any street;

(6) the treatment and removal of insect infested or diseased trees on private property,
the repair of sidewalks and alleys;

(7) the operation of a street lighting system;

(8) the operation and maintenance of a fire protection or a pedestrian skyway system;

(9) reinspections which find noncompliance after the due date for compliance with
an order to correct
inspections relating to a municipal housing maintenance code violation;

(10) the recovery of any disbursements under section 504B.445, subdivision 4,
clause (5), including disbursements for payment of utility bills and other services, even if
provided by a third party, necessary to remedy violations as described in section 504B.445,
subdivision 4
, clause (2); or

(11) [Repealed, 2004 c 275 s 5]

as a special assessment against the property benefited.

(12) the recovery of delinquent vacant building registration fees under a municipal
program designed to identify and register vacant buildings.

(b) The council may by ordinance adopt regulations consistent with this section to
make this authority effective, including, at the option of the council, provisions for placing
primary responsibility upon the property owner or occupant to do the work personally
(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming,
care, and removal or the operation of a street lighting system) upon notice before the work
is undertaken, and for collection from the property owner or other person served of the
charges when due before unpaid charges are made a special assessment.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 67.

Minnesota Statutes 2006, section 469.1813, subdivision 8, is amended to read:


Subd. 8.

Limitation on abatements.

In any year, the total amount of property
taxes abated by a political subdivision under this section may not exceed (1) ten percent
of the current levy net tax capacity of the political subdivision for the taxes payable year
to which the abatement applies
, or (2) $200,000, whichever is greater. The limit under
this subdivision does not apply to:

(i) an uncollected abatement from a prior year that is added to the abatement levy; or

(ii) a taxpayer whose real and personal property is subject to valuation under
Minnesota Rules, chapter 8100.

EFFECTIVE DATE.

This section is effective for abatement resolutions approved
after the day following final enactment.

Sec. 68.

Minnesota Statutes 2006, section 473.446, subdivision 2, is amended to read:


Subd. 2.

Transit taxing district.

The metropolitan transit taxing district is hereby
designated as that portion of the metropolitan transit area lying within the following
named cities, towns, or unorganized territory within the counties indicated:

(a) Anoka County. Anoka, Blaine, Centerville, Columbia Heights, Coon Rapids,
Fridley, Circle Pines, Hilltop, Lexington, Lino Lakes, Spring Lake Park;

(b) Carver County. Chanhassen, the city of Chaska;

(c) Dakota County. Apple Valley, Burnsville, Eagan, Inver Grove Heights, Lilydale,
Mendota, Mendota Heights, Rosemount, South St. Paul, Sunfish Lake, West St. Paul;

(d) Ramsey County. All of the territory within Ramsey County;

(e) Hennepin County. Bloomington, Brooklyn Center, Brooklyn Park, Champlin,
Chanhassen, Crystal, Deephaven, Eden Prairie, Edina, Excelsior, Golden Valley,
Greenwood, Hopkins, Long Lake, Maple Grove, Medicine Lake, Minneapolis,
Minnetonka, Minnetonka Beach, Mound, New Hope, Orono, Osseo, Plymouth, Richfield,
Robbinsdale, St. Anthony, St. Louis Park, Shorewood, Spring Park, Tonka Bay, Wayzata,
Woodland, the unorganized territory of Hennepin County;

(f) Scott County. Prior Lake, Savage, Shakopee;

(g) Washington County. Baytown, the city of Stillwater, White Bear Lake, Bayport,
Birchwood, Cottage Grove, Dellwood, Lake Elmo, Landfall, Mahtomedi, Newport,
Oakdale, Oak Park Heights, Pine Springs, St. Paul Park, Willernie, Woodbury
means the
metropolitan area
.

The Metropolitan Council in its sole discretion may provide transit service by
contract beyond the boundaries of the metropolitan transit taxing district or to cities and
towns within the taxing district which are receiving financial assistance under section
473.388, upon petition therefor by an interested city, township or political subdivision
within the metropolitan transit area. The Metropolitan Council may establish such
terms and conditions as it deems necessary and advisable for providing the transit
service, including such combination of fares and direct payments by the petitioner as
will compensate the council for the full capital and operating cost of the service and the
related administrative activities of the council. The amount of the levy made by any
municipality to pay for the service shall be disregarded when calculation of levies subject
to limitations is made, provided that cities and towns receiving financial assistance under
section 473.388 shall not make a special levy under this subdivision without having first
exhausted the available local transit funds as defined in section 473.388. The council shall
not be obligated to extend service beyond the boundaries of the taxing district, or to cities
and towns within the taxing district which are receiving financial assistance under section
473.388, under any law or contract unless or until payment therefor is received.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 69.

Minnesota Statutes 2006, section 473.446, subdivision 8, is amended to read:


Subd. 8.

State review.

The commissioner of revenue shall certify the council's levy
limitation under this section to the council by August 1 of the levy year. The council
must certify its proposed property tax levy under this section to the commissioner of
revenue by September 1 of the levy year. The commissioner of revenue shall annually
determine whether the property tax for transit purposes certified by the council for levy
following the adoption of its proposed budget is within the levy limitation imposed by
subdivisions subdivision 1 and 1b. The commissioner shall also annually determine
whether the transit tax imposed on all taxable property within the metropolitan transit area
but outside of the metropolitan transit taxing district is within the levy limitation imposed
by subdivision 1a.
The determination must be completed prior to September 10 of each
year. If current information regarding market valuation in any county is not transmitted to
the commissioner in a timely manner, the commissioner may estimate the current market
valuation within that county for purposes of making the calculations.

EFFECTIVE DATE.

This section is effective for taxes payable in 2009 and
thereafter.

Sec. 70.

Laws 2008, chapter 154, article 2, section 11, the effective date, is amended to
read:


EFFECTIVE DATE.

The amendments of this section to paragraph (b) and to the
class rate decrease and the market value increase of the first tier of class 1c homestead
resorts
are effective for taxes payable in 2009 and thereafter. The rest of this section is
effective for taxes payable in 2010 and thereafter.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 71. FISCAL DISPARITIES STUDY.

The commissioner of revenue shall conduct a study of the metropolitan revenue
distribution program contained in Minnesota Statutes, chapter 473F, commonly known
as the fiscal disparities program. On or before February 1, 2010, the commissioner shall
make a report to the chairs of the house of representatives and senate tax committees
consisting of the findings of the study and any recommendations resulting from the study.

The study must consider to what extent the program is meeting the following goals,
and what changes could be made to the program in the furtherance of meeting those goals:

(1) reducing the extent to which the property tax encourages development patterns
that do not make cost-effective use of public infrastructure or impose other high public
costs;

(2) ensuring that the benefits of economic growth of the region are shared throughout
the region, especially for growth that results from state or regional decisions;

(3) improving the ability of each jurisdiction within the region to deliver services at
a level commensurate with its tax effort;

(4) compensating jurisdictions containing properties that provide regional benefits
for the costs those properties impose on their host jurisdictions in excess of their tax
payments;

(5) promoting a fair distribution of property tax burdens across jurisdictions of
the region; and

(6) reducing the economic losses that result from competition among communities
for commercial-industrial tax base.

$150,000 is appropriated to the commissioner of revenue from the general fund for
fiscal year 2009 for purposes of conducting and preparing this study. This is a onetime
appropriation and is not added to the agency's base budget.

EFFECTIVE DATE.

This section is effective July 1, 2008.

Sec. 72. WHITE COMMUNITY HOSPITAL DISTRICT.

Subdivision 1.

Authorized.

Notwithstanding the contiguity requirement in
Minnesota Statutes, section 447.31, subdivision 2, any two or more of the following cities
and towns in St. Louis County may establish by resolution of their respective governing
bodies the White Community Hospital District: the cities of Aurora, Biwabik, and Hoyt
Lakes, and the towns of Biwabik, White, and Colvin. The proposed resolution to establish
the hospital district must be published and is subject to referendum as provided in section
447.31, subdivision 2.

Subd. 2.

Powers; may make grants.

(a) Except as otherwise provided in this
section, the White Community Hospital District shall be organized and have the powers
and duties provided in Minnesota Statutes, sections 447.31, except subdivisions 2, 5, and
6; 447.32, subdivisions 5, 7, and 9; 447.345; 447.37; and 447.38.

(b) The hospital district may levy taxes as provided in this section to provide funding
to make grants to the White Community Hospital and any affiliated health care facility or
provider for any purpose authorized for hospital districts in Minnesota Statutes, sections
447.31 to 447.38, except 447.331. A grant must not be made under this section until the
governing body of the White Community Hospital, and any of its affiliated health care
facilities or providers receiving a grant, have entered into a written agreement with the
hospital district board stating that the governing body will comply with and is subject to
all provisions of the Minnesota open meeting law in Minnesota Statutes, chapter 13D.

Subd. 3.

Annexation; detachment.

Once the hospital district is established, any
other city, town, or unorganized area in St. Louis County may join the hospital district
in the same manner provided in subdivision 1 for establishment of the hospital district.
A city, town, or unorganized area that is a member of the hospital district may detach
from the district in the same manner as it may join. An annexation to or detachment
from the hospital district is effective for taxes payable in the following calendar year if
the resolution is adopted, or in the case of an unorganized area the petition submitted
to the county auditor, before July 1 of the levy year. A resolution adopted or petition
submitted after July 1 of any year is effective for the taxes payable the year following
the next levy year.

Subd. 4.

Unorganized areas.

An unorganized area in St. Louis County shall
become a member of the hospital district if at least 51 percent of the residents of the
unorganized area signed a petition submitted to the hospital district board and the county
auditor requesting to participate in the hospital district.

Subd. 5.

Hospital district board.

The hospital district shall be governed by a
hospital board composed of one member of each participating city and town's governing
body, appointed by the governing body. If the hospital district only has two members,
each member city or town shall appoint two board members. The hospital district board
must appoint from among its members a chair, clerk, treasurer, and any other officers the
board deems necessary or useful. The St. Louis County Board of Commissioners shall
appoint a resident of any unorganized area that is participating in the hospital district. All
board members serve at the pleasure of the respective appointing authorities.

Subd. 6.

No compensation; expenses.

Board members shall serve without
compensation but shall be eligible for per diem and expenses provided by, and at the
discretion of, their respective appointing authorities.

Subd. 7.

Operating tax levy.

The hospital district board may levy a tax as
provided in Minnesota Statutes, section 447.34, except as provided in this subdivision.
If the hospital district board levies it must be a uniform tax rate levied against the net
tax capacity of all taxable properties located within each participating city, town, or
unorganized area. The maximum amount that may be levied in the hospital district must
not exceed 0.066088 percent of the fully taxable market value of all taxable properties
located within each participating city, town, or unorganized area.

Any tax levied by the hospital district is in addition to all other taxes levied on the
property, including taxes levied for any other hospital purpose by a participating city
or town. The levy must be disregarded in the calculation of all other rate or per capita
levy limitations imposed by law.

EFFECTIVE DATE; NO LOCAL APPROVAL.

This section is effective the
day following final enactment without local approval under Minnesota Statutes, section
645.023, subdivision 1, paragraph (a), for taxes levied in 2008, payable in 2009, and
thereafter.

Sec. 73. VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION;
STORM SEWER UTILITY FEES.

Notwithstanding any other law to the contrary and pursuant to joint powers
agreements authorized under Minnesota Statutes, sections 103B.211 and 471.59, the
Vadnais Lake Area Water Management Organization may certify to the county auditor any
fees or charges imposed by the organization under Minnesota Statutes, section 103B.211
or 444.075, and the parcels on which the charges are imposed. The county auditor shall
extend the charges on the property tax statements. The amounts must be certified by
November 30 to appear on statements for taxes payable in the following year. The charges,
if not paid, become delinquent and are subject to the same penalties, the same rate of
interest, and become a lien upon the property in the same manner, as real property taxes.
The charges shall be paid to the Vadnais Lake Area Water Management Organization by
the county auditor in the same manner and at the same time as property taxes. The county
auditor may charge the Vadnais Lake Area Water Management Organization a fee in the
amount necessary to recover the costs of administering the charges.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 74. CITY OF BROOKLYN CENTER; PARTICIPATION IN CRIME-FREE
MULTIHOUSING PROGRAM.

(a) In addition to the requirements of Minnesota Statutes, section 273.128, if
property located in the city of Brooklyn Center qualifies under paragraph (b), the owners
or managers must complete the three phases of the city's crime-free multihousing program
and the qualifying property must be annually certified by the police as participating
in the program. If a qualifying property is not certified within one year after it is first
determined to be a qualifying property under paragraph (b), or does not annually maintain
its certification in the program, the city shall notify the property owner that the qualifying
property must comply with the requirements of this section to maintain its classification
as class 4d property. If a qualifying property is not in compliance within one year after
receiving the notice from the city, the city shall issue a second notice and require the
owners to enter into a plan to achieve compliance within one year. If, upon expiration
of the one-year time period, the qualifying property has not been certified by the police
as completing the program, the city shall notify the commissioner of the Housing
Finance Agency and the commissioner shall remove the property from the list of class 4d
properties certified to the assessor under Minnesota Statutes, section 273.128, subdivision
3. Once removed from the list, the property is not eligible for class 4d classification until
it complies with this section and its compliance has been certified to the Housing Finance
Agency by the city. Certification to the Housing Finance Agency must be made by May
15 to be effective for taxes payable in the following year.

(b) A property is a qualifying property for purposes of this section's requirements if
it satisfies each of the following requirements:

(1) the city offers a crime-free multihousing program through its city police;

(2) over the preceding three-year period, the number of police calls to the property
exceeded the city's average number of calls for multiunit rental properties for the period
by at least 25 percent, adjusted for the number of rental units;

(3) the police department has requested, in writing, the owners or managers of the
property to enroll in the crime-free multihousing program and the owners or managers
refused or failed to enroll within 60 days after the request, or failed to complete phases
one and three within 90 days and all three phases of the program within a one-year time
period; and

(4) the governing body of the city, by resolution, determines the property is a
qualifying property under clauses (1) to (3).

(c) Calls for police or emergency assistance in response to domestic abuse or
medical assistance shall not be counted toward the number of calls in paragraph (b), clause
(2). For purposes of this section, "domestic abuse" has the meaning given in Minnesota
Statutes, section 518B.01, subdivision 2.

(d) Low-income qualifying rental housing property classified as class 4d property
for taxes payable in 2008 must meet the requirements of this section by May 15, 2011.

EFFECTIVE DATE; LOCAL APPROVAL.

This section is effective the day after
compliance by the governing body of the city of Brooklyn Center and its chief clerical
officer with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 75. ASSESSMENT OF PROPERTIES OF PURELY PUBLIC CHARITIES.

Subdivision 1.

Application.

(a) To facilitate a review by the 2009 legislature of
the property tax exemption for property of nonprofit organizations as purely public
charities and the development of standards and criteria for the tax status of these facilities,
this section:

(1) requires the commissioner of revenue to conduct an analysis of standards applied
to determine the tax status of these organizations; and

(2) prohibits changes in assessment practices and policies regarding the property of
these organizations.

(b) The purpose of this study is to allow the legislature to evaluate whether the
judicially established rules and the assessment practices and policies in applying those
rules to determine the tax status of these properties ensure that public benefits are, at
least, commensurate with the costs of the exemption. The legislature does not intend, in
requiring this study, to indicate an intention to expand or to narrow the existing rules for
exempting institutions of purely public charity.

Subd. 2.

Report by commissioner of revenue.

(a) The commissioner of revenue
shall survey all county assessors on:

(1) the tax status of property of institutions of purely public charity located in the
state, including detail on the type of organization and the use of the property; and

(2) their practices and policies in determining the tax status of property of institutions
of purely public charity, including the extent to which the assessment practices and
policies require the institutions to provide goods or services at free or below market prices
and on the treatment of government payments.

(b) The commissioner shall report the findings to the chairs of the house and senate
committees with jurisdiction over taxation by February 1, 2009.

Subd. 3.

Moratorium on changes in assessment practices.

(a) An assessor
may not change the current practices or policies used generally in assessing property
of institutions of purely public charities.

(b) An assessor may not change the assessment of the taxable status of an existing
property of an organization of purely public charity, unless the change is made as a result of
a change in ownership, occupancy or use of the facility, or to correct an error. For currently
taxable properties, the assessor may change the estimated market value of the property.

(c) This subdivision expires on the earlier of:

(1) the enactment of legislation establishing criteria for the property taxation of
purely public charities; or

(2) adjournment of the 2009 regular legislative session to a date in calendar year
2010.

EFFECTIVE DATE.

This section is effective for the 2008 assessment, taxes
payable in 2009.

Sec. 76. FEDERAL AUDIT; SCHOOL DISTRICT LEVY.

Subdivision 1.

Calculation.

The commissioner of education must calculate the total
amount of revenue that each school district needs to replace federal funds that have been
disallowed resulting from the settlement of an audit by the federal Office of Inspector
General of Local Collaborative Time Study school-based services claimed in Minnesota.

Subd. 2.

State aid.

The commissioner of education must make a state aid payment
to each school district in fiscal year 2009 equal to one-third of the amount calculated in
subdivision 1.

Subd. 3.

Levy.

A school district may levy a property tax for taxes payable in 2010
and 2011 only, not to exceed one-third of the amount calculated in subdivision 1 in each
year.

Subd. 4.

Appropriation.

The amount necessary to fund the payments required
under subdivision 2 is appropriated in fiscal year 2009 to the commissioner of education.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 77. SCHOOL DISTRICT LEASE PURCHASES; REVERSE
REFERENDUM.

Subdivision 1.

Limitation.

After the effective date of this section, a school district
located wholly or partially within the borders of a city of the first class with a population
of less than 100,000 inhabitants must not enter into a binding legal agreement under
Minnesota Statutes, section 126C.40, subdivision 6, without first holding a school board
meeting authorizing that contract and adopting a written resolution authorizing the
contract.

Subd. 2.

Board Meeting.

The school board must allow for public testimony on
the proposed contract before adopting a written resolution authorizing the contract. The
resolution becomes final 45 days after its adoption unless a petition has been filed under
subdivision 3.

Subd. 3.

Reverse referendum.

A referendum on the question of authorizing the
lease purchase contract must be called by the board upon the written petition of qualified
voters of the district. A referendum to enter into a lease purchase contract must state the
amount of the contract. A petition authorized by this subdivision is effective if signed
by a number of qualified voters in excess of 15 percent of the registered voters of the
district on the day the petition is filed with the board. A referendum invoked by petition
must be held on a date determined by the school board. If an effective petition is filed
with the board by August 15, 2008, the board must hold the election at the time of the
2008 state primary. The approval of 50 percent plus one of those voting on the question is
required to authorize the contract.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 78. REPEALER.

(a) Minnesota Statutes 2006, section 273.11, subdivision 14, is repealed.

(b) Minnesota Statutes 2006, section 273.111, subdivision 6, is repealed.

(c) Minnesota Statutes 2006, section 473.4461, is repealed.

EFFECTIVE DATE.

Paragraphs (a) and (c) are effective for taxes payable in 2009
and thereafter. Paragraph (b) is effective for taxes payable in 2010 and thereafter.

ARTICLE 6

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2006, section 297A.70, subdivision 2, is amended to
read:


Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, the University of Minnesota, state universities, community
colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;

(4) the Metropolitan Council or the Department of Transportation, for its purchases
of vehicles and repair parts to equip operations provided for in section sections 174.90 and
473.4051, including, but not limited to, the Northstar Corridor rail project;

(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and

(6) sales to public libraries, public library systems, multicounty, multitype library
systems as defined in section 134.001, county law libraries under chapter 134A, state
agency libraries, the state library under section 480.09, and the Legislative Reference
Library.

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5,
except for leases entered into by the United States or its agencies or instrumentalities; or

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, and soft drinks, except for lodging, prepared food, candy,
and soft drinks purchased directly by the United States or its agencies or instrumentalities.

(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.

EFFECTIVE DATE.

This section is effective retroactively for sales and purchases
made after January 1, 2007.

Sec. 2.

Minnesota Statutes 2006, section 297A.70, subdivision 8, is amended to read:


Subd. 8.

Regionwide public safety radio communication system; products and
services.

Products and services including, but not limited to, end user equipment used
for construction, ownership, operation, maintenance, and enhancement of the backbone
system of the regionwide public safety radio communication system established under
sections 403.21 to 403.34 403.40, are exempt. For purposes of this subdivision, backbone
system is defined in section 403.21, subdivision 9. This subdivision is effective for
purchases, sales, storage, use, or consumption for use in the first and second phases of the
system, as defined in section 403.21, subdivisions 3, 10, and 11, and that portion of the
third phase of the system that is located in the southeast district of the State Patrol and
the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system
that is located in Itasca County
.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2007.

Sec. 3.

Minnesota Statutes 2006, section 297A.71, subdivision 23, is amended to read:


Subd. 23.

Construction materials for qualified low-income housing projects.

(a)
Purchases of materials and supplies used or consumed in and equipment incorporated into
the construction, improvement, or expansion of qualified low-income housing projects are
exempt from the tax imposed under this chapter if the owner of the qualified low-income
housing project is:

(1) the public housing agency or housing and redevelopment authority of a political
subdivision;

(2) an entity exercising the powers of a housing and redevelopment authority within
a political subdivision;

(3) a limited partnership in which the sole or managing general partner is an
authority under clause (1) or an entity under clause (2) or (4);

(4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying
under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or

(5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604,
for a qualified low-income housing project described in paragraph (b), clause (5).

This exemption applies regardless of whether the purchases are made by the owner
of the facility or a contractor.

(b) For purposes of this exemption, "qualified low-income housing project" means:

(1) a housing or mixed use project in which at least 20 percent of the residential units
are qualifying low-income rental housing units as defined in section 273.126;

(2) a federally assisted low-income housing project financed by a mortgage insured
or held by the United States Department of Housing and Urban Development under
United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United
States Code, title 42, section 1437f; the Native American Housing Assistance and
Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar
successor federal low-income housing program;

(3) a qualified low-income housing project as defined in United States Code, title
26, section 42(g), meeting all of the requirements for a low-income housing credit under
section 42 of the Internal Revenue Code regardless of whether the project actually applies
for or receives a low-income housing credit;

(4) a project that will be operated in compliance with Internal Revenue Service
revenue procedure 96-32; or

(5) a housing or mixed use project in which all or a portion of the residential units
are subject to the requirements of section 5 of the United States Housing Act of 1937.

(c) For a project, a portion of which is not used for low-income housing units,
the amount of purchases that are exempt under this subdivision must be determined by
multiplying the total purchases, as specified in paragraph (a), by the ratio of:

(1) the total gross square footage of units subject to the income limits under section
273.126, the financing for the project, the federal low-income housing tax credit, revenue
procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable
to the project; and

(2) the total gross square footage of all units in the project.

(d) The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1
, applied, and then refunded in the manner provided in section 297A.75.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
June 30, 2008.

Sec. 4.

Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision
to read:


Subd. 40.

Construction materials; Central Corridor light rail transit.

Materials
and supplies used or consumed in, and equipment incorporated into, the construction
or improvement of the Central Corridor light rail transit line and associated facilities
including, but not limited to, stations, park-and-ride facilities, and maintenance facilities,
are exempt. The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied and then refunded in the manner provided in section 297A.75.

EFFECTIVE DATE.

This section is effective retroactively for sales and purchases
made after January 1, 2007.

Sec. 5.

Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision
to read:


Subd. 41.

Construction materials; Northstar Corridor rail project.

Materials
and supplies used or consumed in, and equipment incorporated into, the construction or
improvement of the Northstar Corridor rail project and associated facilities by a public
entity or under a contract with a public entity including, but not limited to, track and signal
improvements, stations, park-and-ride facilities, and maintenance facilities, are exempt.
The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
applied and then refunded in the manner provided in section 297A.75.

EFFECTIVE DATE.

This section is effective retroactively for sales and purchases
made after January 1, 2007.

Sec. 6.

Minnesota Statutes 2006, section 297A.75, is amended to read:


297A.75 REFUND; APPROPRIATION.

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the
following exempt items must be imposed and collected as if the sale were taxable and the
rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) capital equipment exempt under section 297A.68, subdivision 5;

(2) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(3) building materials for mineral production facilities exempt under section
297A.71, subdivision 14;

(4) building materials for correctional facilities under section 297A.71, subdivision
3
;

(5) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11;

(6) elevators and building materials exempt under section 297A.71, subdivision 12;

(7) building materials for the Long Lake Conservation Center exempt under section
297A.71, subdivision 17;

(8) materials, supplies, fixtures, furnishings, and equipment for a county law
enforcement and family service center under section 297A.71, subdivision 26;

(9) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23
;

(10) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(11) equipment and materials used for the generation, transmission, and distribution
of electrical energy and an aerial camera package exempt under section 297A.68,
subdivision 37; and

(12) tangible personal property and taxable services and construction materials,
supplies, and equipment exempt under section 297A.68, subdivision 41.; and

(13) materials, supplies, and equipment for construction or improvement of projects
and facilities under section 297A.71, subdivisions 40 and 41.

Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
must be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;

(2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental
subdivision;

(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (9), the owner of the qualified low-income housing
project;

(6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilities; and

(7) for subdivision 1, clauses (11) and (12), the owner of the qualifying business.; and

(8) for subdivision 1, clause (13), the applicant must be the governmental entity that
owns or contracts for the project or facility.

Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10),
(11), or (12), or (13), the contractor, subcontractor, or builder must furnish to the refund
applicant a statement including the cost of the exempt items and the taxes paid on the
items unless otherwise specifically provided by this subdivision. The provisions of
sections 289A.40 and 289A.50 apply to refunds under this section.

(b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

Subd. 4.

Interest.

Interest must be paid on the refund at the rate in section 270C.405
from 90 days after the refund claim is filed with the commissioner for taxes paid under
subdivision 1.

Subd. 5.

Appropriation.

(a) The amount required to make the refunds, except for
refunds under subdivision 1, clause (13),
is annually appropriated to the commissioner.

(b) $15,000,000 in fiscal year 2009 is appropriated from the general fund to the
commissioner. The appropriation under this paragraph shall be used to make refunds of
sales tax for the exemptions under subdivision 1, clause (13). The appropriation does not
cancel and is available until expended. In fiscal years 2010 and 2011, the commissioner
shall make payments from the appropriation under this paragraph to the general fund
to reimburse it for the revenue loss in those years due to the extension of the sales tax
exemption to the Department of Transportation under section 297A.70, subdivision 2,
clause (4). This appropriation is onetime and is not added to the agency's base budget.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 7.

Minnesota Statutes 2006, section 297A.99, subdivision 1, as amended by Laws
2008, chapter 152, article 4, section 1, is amended to read:


Subdivision 1.

Authorization; scope.

(a) A political subdivision of this state may
impose a general sales tax (1) under section 297A.992, (2) under section 297A.993,
(3) if permitted by special law enacted prior to May 20, 2008, or (4) if the political
subdivision enacted and imposed the tax before the effective date of section 477A.016 and
its predecessor provision.

(b) This section governs the imposition of a general sales tax by the political
subdivision. The provisions of this section preempt the provisions of any special law:

(1) enacted before June 2, 1997, or

(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
provision from this section's rules by reference.

(c) This section does not apply to or preempt a sales tax on motor vehicles or a
special excise tax on motor vehicles.

(d) Until after December 31, 2011, a political subdivision may not advertise,
promote, expend funds, or hold a referendum to support imposing a local option sales tax
unless the tax was authorized by a special law enacted prior to May 20, 2008.