STATE OF MINNESOTA
EIGHTY-THIRD SESSION - 2004
_____________________
ONE HUNDRED SEVENTH DAY
Saint Paul, Minnesota, Wednesday, May 12, 2004
The House of Representatives convened at 12:00 noon and was
called to order by Steve Sviggum, Speaker of the House.
Prayer was offered by the Reverend Rick Stanghelle, Chisago
Lakes Evangelical Free Church, Lindstrom, Minnesota.
The members of the House gave the pledge of allegiance to the
flag of the United States of America.
The roll was called and the following members were present:
Abeler
Abrams
Adolphson
Anderson, B.
Anderson, I.
Anderson, J.
Atkins
Bernardy
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Buesgens
Carlson
Clark
Cornish
Cox
Davids
Davnie
DeLaForest
Demmer
Dempsey
Dill
Dorman
Dorn
Eastlund
Eken
Ellison
Entenza
Erhardt
Erickson
Finstad
Fuller
Gerlach
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Juhnke
Kahn
Kelliher
Klinzing
Knoblach
Koenen
Kohls
Krinkie
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Lindner
Lipman
Magnus
Mahoney
Mariani
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Newman
Nornes
Olsen, S.
Olson, M.
Opatz
Osterman
Otremba
Otto
Ozment
Paulsen
Paymar
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Slawik
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Thissen
Tingelstad
Urdahl
Vandeveer
Wagenius
Walker
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
A quorum was present.
Beard was excused until 3:00 p.m.
The Chief Clerk proceeded to read the Journal of the preceding
day. Otto moved that further reading of
the Journal be suspended and that the Journal be approved as corrected by the
Chief Clerk. The motion prevailed.
REPORTS OF CHIEF CLERK
S. F. No. 2696 and
H. F. No. 2816, which had been referred to the Chief Clerk for
comparison, were examined and found to be identical with certain exceptions.
SUSPENSION
OF RULES
Westerberg moved that the rules be so far suspended that
S. F. No. 2696 be substituted for H. F. No. 2816
and that the House File be indefinitely postponed. The motion prevailed.
PETITIONS AND COMMUNICATIONS
The following communication was received:
STATE
OF MINNESOTA
OFFICE
OF THE SECRETARY OF STATE
ST.
PAUL 55155
The Honorable Steve Sviggum
Speaker of the House of
Representatives
The Honorable James P.
Metzen
President of the Senate
I have the honor to inform you that the following enrolled Act
of the 2004 Session of the State Legislature has been received from the Office
of the Governor and is deposited in the Office of the Secretary of State for
preservation, pursuant to the State Constitution, Article IV, Section 23:
S. F. No. |
H. F. No. |
Session Laws Chapter No. |
Time and Date Approved 2004 |
Date Filed 2004 |
2851 177 3:05
p.m. May 7 May
7
Sincerely,
Mary
Kiffmeyer
Secretary
of State
REPORTS OF STANDING COMMITTEES
Abrams from the Committee on Taxes to which was referred:
H. F. No. 1166, A bill for an act relating to natural
resources; proposing an amendment to the Minnesota Constitution, by adding a
section to article XI; dedicating sales tax proceeds of one-fourth of one
percent of taxable sales for natural resource purposes; creating a heritage
enhancement fund and council, a parks and trails fund, and a clean water fund
and council; requiring a report; amending Minnesota Statutes 2002, section
10A.01, subdivision 35; proposing coding for new law in Minnesota Statutes,
chapters 85; 97A; 103F.
Reported the same back with the following amendments:
Delete everything after the enacting clause and insert:
"ARTICLE
1
CONSTITUTIONAL
AMENDMENT
Section 1.
[CONSTITUTIONAL AMENDMENT.]
An amendment to the Minnesota Constitution is proposed to
the people. If the amendment is
adopted, a section will be added to article XI, to read:
Sec. 15. Beginning
July 1, 2007, the sales and use tax receipts equal to the state sales and use
tax of 1/8 of one percent on sales and uses taxable under the general state
sales and use tax law, plus penalties and interest and reduced by any refunds,
shall be deposited in the heritage enhancement fund and may be spent only to
improve, enhance, or protect game and fish habitat and provide hunter and
angler access. The money dedicated
under this section shall be appropriated by law and shall not be used as a
substitute for traditional funding sources for the purposes specified, but the
dedicated money shall supplement traditional sources of funding for those
purposes. A heritage enhancement fund
is created in the state treasury. Land
acquired with money deposited in the heritage enhancement fund under this
section must be open to public taking of game and fish during the open season.
Sec. 2. [SUBMISSION TO
VOTERS.]
The proposed amendment shall be submitted to the people at
the 2004 general election. The question
submitted shall be:
"Shall the Minnesota Constitution be amended to provide
funding beginning July 1, 2007, to improve, enhance, or protect game and fish
habitat and provide hunter and angler access by dedicating the sales and use
tax receipts equal to the state sales and use tax of 1/8 of one percent on
taxable sales?
Yes
.......
No
........"
Sec. 3. [EFFECTIVE
DATE.]
Sections 1 and 2 apply to sales and use tax receipts
collected after June 30, 2007.
ARTICLE 2
CONFORMING
CHANGES
Section 1. [97A.056]
[HERITAGE ENHANCEMENT FUND; HERITAGE ENHANCEMENT COUNCIL.]
Subdivision 1.
[FUND.] The heritage enhancement fund is established in the Minnesota
Constitution, article XI, section 15.
At least 99 percent of the money appropriated from the fund must be
spent on game and fish projects on public and private lands.
Subd. 2.
[HERITAGE ENHANCEMENT COUNCIL.] (a) A heritage enhancement council of
11 members is created, consisting of:
(1) two members of the senate appointed by the senate
subcommittee on committees of the committee on rules and administration;
(2) two members of the house appointed by the speaker of the
house;
(3) three public members representing hunting and fishing
groups appointed by the senate subcommittee on committees of the committee on
rules and administration;
(4) three public members representing hunting and fishing
groups appointed by the speaker of the house; and
(5) one public member appointed by the governor.
(b) One member from the senate and one member from the house
must be from the minority caucus.
Legislative members are entitled to reimbursement for per diem expenses
plus travel expenses incurred in the services of the council. The compensation and removal of public
members are as provided in section 15.0575.
(c) Members shall appoint a chair who shall preside and
convene meetings as often as necessary to conduct the duties prescribed by this
section.
(d) Membership terms are two years, except that members
shall serve on the council until their successors are appointed.
(e) Vacancies occurring on the council do not affect the
authority of the remaining members of the council to carry out their
duties. Vacancies shall be filled in
the same manner as under paragraph (a).
Subd. 3. [DUTIES
OF HERITAGE COUNCIL.] (a) The council shall develop a biennial budget plan
for expenditures from the heritage enhancement fund. The biennial budget plan may include grants to local fishing and
hunting groups to improve, enhance, or protect game and fish resources. By August 15 of each even-numbered year, the
council shall submit the budget plan to the commissioner of finance.
(b) In the biennial budget submitted to the legislature, the
governor shall submit separate budget detail for planned expenditures from the
heritage enhancement fund as recommended by the council.
(c) Entities receiving appropriations from the heritage
enhancement fund shall submit a work program and semiannual progress reports to
the heritage enhancement council in the form determined by the council.
Subd. 4. [HERITAGE
COUNCIL ADMINISTRATION.] (a) The council may appoint legal and other
personnel and consultants necessary to carry out functions and duties of the
council. Permanent employees shall be
in the unclassified service. The
council may request staff assistance and data from any other agency of state
government as needed for the execution of the responsibilities of the council
and an agency must promptly furnish the requested assistance or data.
(b) The administrative expenses of the council shall be paid
from the heritage enhancement fund.
(c) A council member or an employee of the council may not
participate in or vote on a decision of the council relating to an organization
in which the member or employee has either a direct or indirect personal
financial interest. While serving on or
employed by the council, a person shall avoid any potential conflict of
interest.
Sec. 2. Minnesota
Statutes 2002, section 297A.94, is amended to read:
297A.94 [DEPOSIT OF REVENUES.]
(a) Except as provided in this section and the Minnesota
Constitution, article XI, section 15, the commissioner shall deposit the
revenues, including interest and penalties, derived from the taxes imposed by
this chapter in the state treasury and credit them to the general fund.
(b) The commissioner shall deposit taxes in the Minnesota
agricultural and economic account in the special revenue fund if:
(1) the taxes are derived from sales and use of property and
services purchased for the construction and operation of an agricultural
resource project; and
(2) the purchase was made on or after the date on which a
conditional commitment was made for a loan guaranty for the project under
section 41A.04, subdivision 3.
The commissioner of finance
shall certify to the commissioner the date on which the project received the
conditional commitment. The amount
deposited in the loan guaranty account must be reduced by any refunds and by
the costs incurred by the department of revenue to administer and enforce the
assessment and collection of the taxes.
(c) The commissioner shall deposit the revenues, including
interest and penalties, derived from the taxes imposed on sales and purchases
included in section 297A.61, subdivision 3, paragraph (g), clauses (1) and (4),
in the state treasury, and credit them as follows:
(1) first to the general obligation special tax bond debt
service account in each fiscal year the amount required by section 16A.661,
subdivision 3, paragraph (b); and
(2) after the requirements of clause (1) have been met, the
balance to the general fund.
(d) The commissioner shall deposit the revenues, including
interest and penalties, collected under section 297A.64, subdivision 5, in the
state treasury and credit them to the general fund. By July 15 of each year the commissioner shall transfer to the
highway user tax distribution fund an amount equal to the excess fees collected
under section 297A.64, subdivision 5, for the previous calendar year.
(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and
2003, 87 percent; and for fiscal year 2004 and thereafter, 87.1 percent of the
revenues, including interest and penalties, transmitted to the commissioner
under section 297A.65, must be deposited by the commissioner in the state
treasury as follows:
(1) 50 percent of the receipts must be
deposited in the heritage enhancement account in the game and fish fund, and
may be spent only on activities that improve, enhance, or protect fish and
wildlife resources, including conservation, restoration, and enhancement of
land, water, and other natural resources of the state;
(2) 22.5 percent of the receipts must be deposited in the
natural resources fund, and may be spent only for state parks and trails;
(3) 22.5 percent of the receipts must be deposited in the
natural resources fund, and may be spent only on metropolitan park and trail
grants;
(4) three percent of the receipts must be deposited in the
natural resources fund, and may be spent only on local trail grants; and
(5) two percent of the receipts must be deposited in the
natural resources fund, and may be spent only for the Minnesota zoological
garden, the Como park zoo and conservatory, and the Duluth zoo.
(f) The revenue dedicated under paragraph (e) may not be used
as a substitute for traditional sources of funding for the purposes specified,
but the dedicated revenue shall supplement traditional sources of funding for
those purposes. Land acquired with
money deposited in the game and fish fund under paragraph (e) must be open to
public hunting and fishing during the open season, except that in aquatic
management areas or on lands where angling easements have been acquired,
fishing may be prohibited during certain times of the year and hunting may be
prohibited. At least 87 percent of the
money deposited in the game and fish fund for improvement, enhancement, or
protection of fish and wildlife resources under paragraph (e) must be allocated
for field operations.
Sec. 3. [EFFECTIVE
DATE.]
Sections 1 and 2 are effective July 1, 2007, if the
constitutional amendment proposed in article 1 is adopted by the voters."
Delete the title and insert:
"A bill for an act relating to natural resources;
proposing an amendment to the Minnesota Constitution, article XI; dedicating
the sales tax receipts equal to a sales tax of 1/8 of one percent on taxable
sales for game and fish purposes; creating a heritage enhancement fund and a
heritage enhancement council; providing for appointments; amending Minnesota
Statutes 2002, section 297A.94; proposing coding for new law in Minnesota
Statutes, chapter 97A."
With the recommendation that when so amended the bill be
re-referred to the Committee on Ways and Means without further recommendation.
The report was adopted.
Abrams from the Committee on Taxes to which was referred:
H. F. No. 2083, A bill for an act relating to taxation;
clarifying the production tax rate of certain direct reduced ore; amending
Minnesota Statutes 2002, section 298.24, subdivision 1.
Reported the same back with the following amendments:
Page 2, line 30, delete "per" and insert
"in the current year or in any prior"
Page 2, line 33, after "plant's"
insert "commercial"
Page 2, line 36, strike "such" and insert "commercial"
Page 3, line 1, strike "such" and insert "commercial"
Page 3, line 3, after "subsequent" insert "commercial"
Page 3, line 13, delete "for the first"
Page 3, line 14, delete "two years of" and
insert "during the facility's"
With the recommendation that when so amended the bill pass.
The report was adopted.
Abrams from the Committee on Taxes to which was referred:
H. F. No. 2298, A bill for an act providing for designation of
an international economic development zone; providing tax incentives;
appropriating money; amending Minnesota Statutes 2002, sections 272.02, by
adding a subdivision; 290.06, by adding a subdivision; 297A.68, by adding a
subdivision; 297B.03; Minnesota Statutes 2003 Supplement, sections 290.01,
subdivisions 19b, 29; 290.06, subdivision 2c; 290.067, subdivision 1; 290.0671,
subdivision 1; 290.091, subdivision 2; 290.0921, subdivision 3; 290.0922,
subdivisions 2, 3; proposing coding for new law in Minnesota Statutes, chapters
469; 477A.
Reported the same back with the following amendments:
Delete everything after the enacting clause and insert:
"Section 1.
Minnesota Statutes 2002, section 272.02, is amended by adding a
subdivision to read:
Subd. 73.
[INTERNATIONAL ECONOMIC DEVELOPMENT ZONE PROPERTY.] (a) Improvements
to real property, and personal property, classified under section 273.13,
subdivision 24, and located within an international economic development zone
designated under section 469.322, are exempt from ad valorem taxes levied under
chapter 275, if the occupant of the property is a qualified business, as defined
in section 469.321.
(b) The exemption applies beginning for the first assessment
year after designation of the international economic development zone. The exemption applies to each assessment
year that begins during the duration of the international economic development
zone and to property occupied by July 1 of the assessment year by a qualified
business for the duration permitted under section 469.324, subdivision 2.
Sec. 2. Minnesota
Statutes 2002, section 290.06, is amended by adding a subdivision to read:
Subd. 32.
[INTERNATIONAL ECONOMIC DEVELOPMENT ZONE JOB CREDIT.] A taxpayer that
is a qualified business, as defined in section 469.321, subdivision 6, is
allowed a credit as determined under section 469.325 against the tax imposed by
this chapter.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 3.
Minnesota Statutes 2002, section 290.191, is amended by adding a
subdivision to read:
Subd. 13.
[INTERNATIONAL ECONOMIC DEVELOPMENT ZONES.] (a) A qualified business
as defined under section 469.321 may exclude from:
(1) the numerator of its payroll factor the amount of its
international economic development zone payroll; and
(2) the numerator of its property factor the amount of its
property with a situs in the international economic development zone.
(b) The provisions of this subdivision apply to a qualified
business for the duration provided under section 469.324.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 4. Minnesota
Statutes 2002, section 297A.68, is amended by adding a subdivision to read:
Subd. 41.
[INTERNATIONAL ECONOMIC DEVELOPMENT ZONES.] (a) Purchases of tangible
personal property or taxable services by a qualified business, as defined in
section 469.321, are exempt if the property or services are primarily used or
consumed in an international economic development zone designated under section
469.322.
(b) Purchase and use of construction materials and supplies
for construction of improvements to real property in an international economic
development zone are exempt if the improvements after completion of
construction are to be used in the conduct of a qualified business, as defined
in section 469.321. This exemption
applies regardless of whether the purchases are made by the business or a
contractor.
(c) The exemptions under this subdivision apply to a local
sales and use tax, regardless of whether the local tax is imposed on sales
taxable under this chapter or in another law, ordinance, or charter provision.
(d) This subdivision applies to sales, if the purchase was
made and delivery received during the period provided under section 469.324,
subdivision 2.
[EFFECTIVE DATE.] This
section is effective for sales made on or after the day following final
enactment.
Sec. 5. [469.321]
[DEFINITIONS.]
Subdivision 1.
[SCOPE.] For purposes of sections 469.321 to 469.327, the following
terms have the meanings given.
Subd. 2.
[FOREIGN TRADE ZONE.] "Foreign trade zone" means a foreign
trade zone designated pursuant to United States Code, title 19, section 81b,
for the right to use the powers provided in United States Code, title 19,
sections 81a to 81u, or a subzone authorized by the foreign trade zone.
Subd. 3. [FOREIGN
TRADE ZONE AUTHORITY.] "Foreign trade zone authority" means the
Greater Metropolitan Foreign Trade Zone Commission number 119, a joint powers
authority created by the county of Hennepin, the cities of Minneapolis and
Bloomington, and the Metropolitan Airports Commission, under the authority of
section 469.059 or 469.101, which includes any other political subdivisions
that enter into the authority after its creation.
Subd. 4. [INTERNATIONAL ECONOMIC DEVELOPMENT ZONE.] An
"international economic development zone" or "zone" is a
zone so designated under section 469.322.
Subd. 5.
[PERSON.] "Person" includes an individual, corporation,
partnership, limited liability company, association, or any other entity.
Subd. 6.
[QUALIFIED BUSINESS.] (a) "Qualified business" means a
person carrying on a trade or business at a place of business located within an
international economic development zone that is:
(1) engaged in the furtherance of international export or
import of goods; and
(2) certified by the foreign trade zone authority as a trade
or business that furthers the purpose of developing international distribution
capacity and capability.
(b) A person that relocates a trade or business from within
Minnesota but outside an international economic development zone into an
international economic development zone is not a qualified business, unless the
business:
(1)(i) increases full-time employment in the first full year
of operation within the international economic development zone by at least 20
percent measured relative to the operations that were relocated and maintains
the required level of employment for each year that tax incentives under
section 469.324 are claimed; or
(ii) makes a capital investment in the property located
within a zone equal to at least ten percent of the gross revenues of the
operations that were relocated in the immediately proceeding taxable year; and
(2) enters a binding written agreement with the foreign
trade zone authority that:
(i) pledges that the business will meet the requirements of
clause (1);
(ii) provides for repayment of all tax benefits enumerated
under section 469.324 to the business under the procedures in section 469.326,
if the requirements of clause (1) are not met for the taxable year or for taxes
payable during a year in which the requirements were not met; and
(iii) contains any other terms the foreign trade zone
authority determines appropriate.
Clause (1) of this paragraph does not apply to a freight
forwarder.
Subd. 7. [REGIONAL
DISTRIBUTION CENTER.] A "regional distribution center" is a
distribution center developed within a foreign trade zone. The regional distribution center must have
as its primary purpose to facilitate gathering of freight for the purpose of
centralizing the functions necessary for the shipment of freight in
international commerce, including, but not limited to, security and customs
functions.
Subd. 8.
[RELOCATE.] (a) "Relocate" means that a trade or business:
(1) ceases one or more operations or functions at another
location in Minnesota and begins performing substantially the same operations
or functions at a location in an international economic development zone; or
(2) reduces employment at another location in Minnesota
during a period starting one year before and ending one year after it begins
operations in an international economic development zone and its employees in
the international economic development zone are engaged in the same line of
business as the employees at the location where it reduced employment.
(b) "Relocate" does not include an expansion by a
business that establishes a new facility that does not replace or supplant an
existing operation or employment, in whole or in part.
(c) "Trade or business" includes any business
entity that is substantially similar in operation or ownership to the business
entity seeking to be a qualified business.
Subd. 9.
[INTERNATIONAL ECONOMIC DEVELOPMENT ZONE PAYROLL FACTOR.] "International
economic development zone payroll factor" or "international economic
development zone payroll" is that portion of the payroll factor under
section 290.191 that represents:
(1) wages or salaries paid to an individual for services
performed in an international economic development zone; or
(2) wages or salaries paid to individuals working from
offices within an international economic development zone, if their employment
requires them to work outside the zone and the work is incidental to the work
performed by the individual within the zone.
Subd. 10.
[FREIGHT FORWARDER.] "Freight forwarder" is a business
that, for compensation, ensures that goods produced or sold by another business
move from point of origin to point of destination.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 6. [469.322]
[DESIGNATION OF INTERNATIONAL ECONOMIC DEVELOPMENT ZONE.]
(a) An area designated as a foreign trade zone may be
designated by the foreign trade zone authority as an international economic
development zone if within the zone a regional distribution center is being
developed pursuant to section 469.323.
The zone must consist of contiguous area of not less than 500 acres and
not more than 1,000 acres. The
designation authority under this section is limited to one zone.
(b) In making the designation, the foreign trade zone
authority, in consultation with the Minnesota Department of Transportation and
the Metropolitan Council, shall consider access to major transportation routes,
consistency with current state transportation and air cargo planning, adequacy
of the size of the site, access to airport facilities, present and future
capacity at the designated airport, the capability to meet integrated present
and future air cargo, security, and inspection services, and access to other
infrastructure and financial incentives.
The border of the international economic development zone must be no
more than 60 miles distant or 90 minutes drive time from the border of the
Minneapolis-St. Paul International Airport.
The county in which the zone is located must be a member of the foreign
trade zone authority.
(c) Prior to a final site designation, a transportation
impact study based on the regional model and utilizing traffic forecasting and
assignments must be conducted. The
results must be used to evaluate the effects of the proposed use on the
transportation system and identify any needed improvements. If the site is in the metropolitan area the
study must also evaluate the effect of the transportation impacts on the
Metropolitan Transportation System plan as well as the comprehensive plans of
the municipalities that would be affected.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 7. [469.323]
[FOREIGN TRADE ZONE AUTHORITY POWERS.]
Subdivision 1.
[DEVELOPMENT OF REGIONAL DISTRIBUTION CENTER.] The foreign trade zone
authority is responsible for creating a development plan for the regional
distribution center. The regional
distribution center must be developed with the purpose of expanding, on a
regional basis, international distribution capacity and capability. The foreign trade zone authority shall
consult with municipalities that have indicated to the authority an interest in
locating the international economic development zone within their boundaries,
as well as interested businesses, potential financiers, and appropriate state
and federal agencies.
Subd. 2. [PORT
AUTHORITY POWERS.] The governing body of the foreign trade zone authority
may establish a port authority that has the same powers as a port authority
established under section 469.049. If
the foreign trade zone authority establishes a port authority, the governing
body of the foreign trade zone authority may exercise all powers granted to a
city by sections 469.048 to 469.068, except it may not impose or request
imposition of a property tax levy under section 469.053 by any city.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 8. [469.324] [TAX
INCENTIVES IN INTERNATIONAL ECONOMIC DEVELOPMENT ZONE.]
Subdivision 1.
[AVAILABILITY.] Qualified businesses that operate in an international
economic development zone, individuals who invest in a regional distribution
center or qualified businesses that operate in an international economic
development zone, and property located in an international economic development
zone qualify for:
(1) exemption from the state sales and use tax and any local
sales and use taxes on qualifying purchases as provided in section 297A.68,
subdivision 41;
(2) exemption from the property tax as provided in section
272.02, subdivision 73;
(3) the jobs credit allowed under section 469.325;
(4) the corporate franchise tax exemption under section
290.191, subdivision 13.
Subd. 2. [DURATION.] (a) Except as provided in paragraph (b), the jobs
credit described in subdivision 1, clause (3), and the corporate franchise
exemption under subdivision 1, clause (4), is available for no more than eight
consecutive taxable years for any taxpayer.
The sales and use tax exemption described in subdivision 1, clause (1),
is available for each taxpayer that claims it for taxes otherwise payable on
transactions during a period of eight years from the date when the first
exemption is claimed by that taxpayer.
The property tax exemption described under subdivision 1, clause (2), is
available for any parcel of property for eight consecutive taxes payable
years. No incentives described in
subdivision 1, clauses (1) to (4), are available after December 31, 2020.
(b) For taxpayers that are freight forwarders, the durations
provided under paragraph (a) are reduced to four years.
Sec. 9. [469.325] [JOBS
CREDIT.]
Subdivision 1.
[CREDIT ALLOWED.] A qualified business is allowed a credit against the
taxes imposed under chapter 290. The
credit equals seven percent of the:
(1) lesser of:
(i) zone payroll for the taxable year, less the zone payroll
for the base year; or
(ii) total Minnesota payroll for the taxable year, less
total Minnesota payroll for the base year; minus
(2) $30,000 multiplied by the number of full-time equivalent
employees that the qualified business employs in the international economic
development zone for the taxable year, minus the number of full-time equivalent
employees the business employed in the zone in the base year, but not less than
zero.
Subd. 2.
[DEFINITIONS.] (a) For purposes of this section, the following terms
have the meanings given.
(b) "Base year" means the taxable year beginning
during the calendar year prior to the calendar year in which the zone
designation took effect.
(c) "Full-time equivalent employees" means the
equivalent of annualized expected hours of work equal to 2,080 hours.
(d) "Minnesota payroll" means the wages or
salaries attributed to Minnesota under section 290.191, subdivision 12, for the
qualified business or the unitary business of which the qualified business is a
part, whichever is greater.
(e) "Zone payroll" means wages or salaries used to
determine the zone payroll factor for the qualified business, less the amount
of compensation attributable to any employee that exceeds $100,000.
Subd. 3.
[INFLATION ADJUSTMENT.] For taxable years beginning after December
31, 2005, the dollar amounts in subdivision 1, clause (2), and subdivision 2,
paragraph (e), are annually adjusted for inflation. The commissioner of revenue shall adjust the amounts by the
percentage determined under section 290.06, subdivision 2d, for the taxable year.
Subd. 4.
[REFUNDABLE.] If the amount of the credit exceeds the liability for
tax under chapter 290, the commissioner of revenue shall refund the excess to
the qualified business.
Subd. 5.
[APPROPRIATION.] An amount sufficient to pay the refunds authorized
by this section is appropriated to the commissioner of revenue from the general
fund.
[EFFECTIVE DATE.] This
section is effective for taxable years beginning after December 31, 2004.
Sec. 10. [469.326]
[REPAYMENT OF TAX BENEFITS.]
Subdivision 1.
[REPAYMENT OBLIGATION.] A person must repay the amount of the tax
reduction received under section 469.324, subdivision 1, clauses (1) and (2),
or a refund received under section 469.325, during the two years immediately
before it ceased to operate in the zone, if the person ceased to operate its
facility located within the zone or otherwise ceases to be or is not a
qualified business.
Subd. 2.
[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
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 or use taxes must be repaid to the
jurisdiction imposing the local sales or use tax.
Subd. 3.
[REPAYMENT PROCEDURES.] (a) For the repayment of taxes imposed under
chapter 290 or 297A or local taxes collected under section 297A.99, a person
must file an amended return with the commissioner of revenue and pay any taxes
required to be repaid within 30 days after ceasing to be a qualified
business. The amount required to be
repaid is determined by calculating the tax for the period for which repayment
is required without regard to the tax reductions allowed under section 469.324.
(b) For the repayment of property taxes, the county auditor
shall prepare a tax statement for the person, applying the applicable tax
extension rates for each payable year and provide a copy to the business. The person must pay the taxes to the county
treasurer within 30 days after receipt of the tax statement. The taxpayer may appeal the valuation and
determination of the property tax to the tax court within 30 days after receipt
of the tax statement.
(c) The provisions of chapters 270 and 289A relating to the
commissioner of revenue's authority to audit, assess, and collect the tax and
to hear appeals apply to the repayment required under paragraph (a). 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 270.75, from 30 days after ceasing
to do business in the zone until the date the tax is paid.
(d) If a property tax is not repaid under paragraph (b), 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 person ceased to operate in the
international economic development zone.
(e) For determining the tax required to be repaid, a tax reduction
is deemed to have been received on the date that the tax would have been due if
the person had not been entitled to the tax reduction.
(f) The commissioner of revenue may assess the repayment of
taxes under paragraph (c) at any time within two years after the person ceases
to be a qualified business, or within any period of limitations for the
assessment of tax under section 289A.38, whichever is later.
Subd. 4. [WAIVER
AUTHORITY.] The commissioner may waive all or part of a repayment, if the
commissioner of revenue, in consultation with the foreign trade zone authority
and appropriate officials from the state and local government units, determines
that requiring repayment of the tax is not in the best interest of the state or
local government 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.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 11. [469.327]
[REPORTING REQUIREMENTS.]
Before designation of an international economic development
zone under section 469.322, the foreign trade zone authority shall establish
performance goals for the zone. These
goals must set out, at a minimum, the amount of investment, the number of jobs,
and the amount of freight handled expected to be attained at the end of three,
five, and 10 year periods by the zone.
The authority must annually report to the commissioner of the Department
of Employment and Economic Development on its progress in attaining these
goals.
[EFFECTIVE DATE.] This
section is effective the day following final enactment."
Delete the title and insert:
"A bill for an act providing for designation of an
international economic development zone; providing tax incentives;
appropriating money; amending Minnesota Statutes 2002, sections 272.02, by
adding a subdivision; 290.06, by adding a subdivision; 290.191, by adding a subdivision;
297A.68, by adding a subdivision; proposing coding for new law in Minnesota
Statutes, chapter 469."
With the recommendation that when so amended the bill pass.
The report was adopted.
Abrams from the Committee on Taxes to which was referred:
H. F. No. 2936, A bill for an act relating to local government;
authorizing the city of St. Paul to participate in the creation of, and to
contract with, a nonprofit organization for management and operation of the
RiverCentre complex.
Reported the same back with the following amendments:
Page 3, line 19, before the period, insert ", to the
extent it would be exempt if the complex was equipped, maintained, managed, and
operated by the city"
Page 3, after line 19, insert:
"(c) Gross receipts of tickets and admissions to events
at the RiverCentre complex sponsored by the nonprofit organization created in
section 2 do not qualify for the sales tax exemption under Minnesota Statutes,
section 297A.70, subdivision 10."
With the recommendation that when so amended the bill pass.
The report was adopted.
Abrams from the Committee on Taxes to which was referred:
H. F. No. 3091, A bill for an act relating to metropolitan
government; providing for the financing of metropolitan area transit and
paratransit capital expenditures; authorizing the issuance of certain
obligations; amending Minnesota Statutes 2002, section 473.39, by adding a
subdivision.
Reported the same back with the following amendments:
Delete everything after the enacting clause and insert:
"ARTICLE
1
FEDERAL
UPDATE
Section 1. Minnesota
Statutes 2003 Supplement, section 289A.02, subdivision 7, is amended to read:
Subd. 7. [INTERNAL
REVENUE CODE.] Unless specifically defined otherwise, "Internal Revenue
Code" means the Internal Revenue Code of 1986, as amended through June
15, 2003 April 10, 2004.
[EFFECTIVE DATE.] This
section is effective for actions required on or after November 11, 2003.
Sec. 2. Minnesota
Statutes 2003 Supplement, section 290.01, subdivision 19, is amended to read:
Subd. 19. [NET INCOME.]
The term "net income" means the federal taxable income, as defined in
section 63 of the Internal Revenue Code of 1986, as amended through the date
named in this subdivision, incorporating any elections made by the taxpayer in
accordance with the Internal Revenue Code in determining federal taxable income
for federal income tax purposes, and with the modifications provided in
subdivisions 19a to 19f.
In the case of a regulated investment company
or a fund thereof, as defined in section 851(a) or 851(g) of the Internal
Revenue Code, federal taxable income means investment company taxable income as
defined in section 852(b)(2) of the Internal Revenue Code, except that:
(1) the exclusion of net capital gain provided in section
852(b)(2)(A) of the Internal Revenue Code does not apply;
(2) the deduction for dividends paid under section 852(b)(2)(D)
of the Internal Revenue Code must be applied by allowing a deduction for
capital gain dividends and exempt-interest dividends as defined in sections
852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; and
(3) the deduction for dividends paid must also be applied in
the amount of any undistributed capital gains which the regulated investment
company elects to have treated as provided in section 852(b)(3)(D) of the
Internal Revenue Code.
The net income of a real estate investment trust as defined and
limited by section 856(a), (b), and (c) of the Internal Revenue Code means the
real estate investment trust taxable income as defined in section 857(b)(2) of
the Internal Revenue Code.
The net income of a designated settlement fund as defined in
section 468B(d) of the Internal Revenue Code means the gross income as defined
in section 468B(b) of the Internal Revenue Code.
The provisions of sections 1113(a), 1117, 1206(a), 1313(a),
1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 1616, 1617,
1704(l), and 1704(m) of the Small Business Job Protection Act, Public Law
104-188, the provisions of Public Law 104-117, the provisions of sections
313(a) and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 1003,
1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 1111(a), 1131(b) and
(c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) and (h), and 1604(d)(1) of the
Taxpayer Relief Act of 1997, Public Law 105-34, the provisions of section 6010
of the Internal Revenue Service Restructuring and Reform Act of 1998, Public
Law 105-206, the provisions of section 4003 of the Omnibus Consolidated and
Emergency Supplemental Appropriations Act, 1999, Public Law 105-277, and the
provisions of section 318 of the Consolidated Appropriation Act of 2001, Public
Law 106-554, shall become effective at the time they become effective for
federal purposes.
The Internal Revenue Code of 1986, as amended through December
31, 1996, shall be in effect for taxable years beginning after December 31,
1996.
The provisions of sections 202(a) and (b), 221(a), 225, 312,
313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and (c), 1089, 1112,
1171, 1204, 1271(a) and (b), 1305(a), 1306, 1307, 1308, 1309, 1501(b), 1502(b),
1504(a), 1505, 1527, 1528, 1530, 1601(d), (e), (f), and (i) and 1602(a), (b),
(c), and (e) of the Taxpayer Relief Act of 1997, Public Law 105-34, the provisions
of sections 6004, 6005, 6012, 6013, 6015, 6016, 7002, and 7003 of the Internal
Revenue Service Restructuring and Reform Act of 1998, Public Law 105-206, the
provisions of section 3001 of the Omnibus Consolidated and Emergency
Supplemental Appropriations Act, 1999, Public Law 105-277, the provisions of
section 3001 of the Miscellaneous Trade and Technical Corrections Act of 1999,
Public Law 106-36, and the provisions of section 316 of the Consolidated
Appropriation Act of 2001, Public Law 106-554, and the provision of section
101 of the Military Family Tax Relief Act of 2003, Public Law 108-121,
shall become effective at the time they become effective for federal purposes.
The Internal Revenue Code of 1986, as amended through December
31, 1997, shall be in effect for taxable years beginning after December 31,
1997.
The provisions of sections 5002, 6009, 6011, and 7001 of the
Internal Revenue Service Restructuring and Reform Act of 1998, Public Law
105-206, the provisions of section 9010 of the Transportation Equity Act for
the 21st Century, Public Law 105-178, the provisions of sections 1004, 4002,
and 5301 of the Omnibus Consolidation and
Emergency Supplemental Appropriations Act, 1999, Public Law 105-277, the
provision of section 303 of the Ricky Ray Hemophilia Relief Fund Act of 1998,
Public Law 105-369, the provisions of sections 532, 534, 536, 537, and 538 of
the Ticket to Work and Work Incentives Improvement Act of 1999, Public Law
106-170, the provisions of the Installment Tax Correction Act of 2000, Public
Law 106-573, and the provisions of section 309 of the Consolidated
Appropriation Act of 2001, Public Law 106-554, shall become effective at the
time they become effective for federal purposes.
The Internal Revenue Code of 1986, as amended through December
31, 1998, shall be in effect for taxable years beginning after December 31,
1998.
The provisions of the FSC Repeal and Extraterritorial Income
Exclusion Act of 2000, Public Law 106-519, and the provision of section 412 of
the Job Creation and Worker Assistance Act of 2002, Public Law 107-147, shall
become effective at the time it became effective for federal purposes.
The Internal Revenue Code of 1986, as amended through December
31, 1999, shall be in effect for taxable years beginning after December 31,
1999. The provisions of sections 306
and 401 of the Consolidated Appropriation Act of 2001, Public Law 106-554, and
the provision of section 632(b)(2)(A) of the Economic Growth and Tax Relief
Reconciliation Act of 2001, Public Law 107-16, and provisions of sections 101
and 402 of the Job Creation and Worker Assistance Act of 2002, Public Law
107-147, shall become effective at the same time it became effective for
federal purposes.
The Internal Revenue Code of 1986, as amended through December
31, 2000, shall be in effect for taxable years beginning after December 31,
2000. The provisions of sections 659a
and 671 of the Economic Growth and Tax Relief Reconciliation Act of 2001,
Public Law 107-16, the provisions of sections 104, 105, and 111 of the Victims
of Terrorism Tax Relief Act of 2001, Public Law 107-134, and the
provisions of sections 201, 403, 413, and 606 of the Job Creation and Worker
Assistance Act of 2002, Public Law 107-147, and the provision of section 102
of the Military Family Tax Relief Act of 2003, Public Law 108-121, shall
become effective at the same time it became effective for federal purposes.
The Internal Revenue Code of 1986, as amended through March 15,
2002, shall be in effect for taxable years beginning after December 31, 2001.
The provisions of sections 101 and 102 of the Victims of
Terrorism Tax Relief Act of 2001, Public Law 107-134, shall become effective at
the same time it becomes effective for federal purposes.
The Internal Revenue Code of 1986, as amended through June 15,
2003, shall be in effect for taxable years beginning after December 31,
2002. The provisions of section 201 of
the Jobs and Growth Tax Relief and Reconciliation Act of 2003, H.R. 2, if it
is enacted into law Public Law 108-27, and the provisions of sections
103, 106, 108, 109, and 110 of the Military Family Tax Relief Act of 2003,
Public Law 108-121, are effective at the same time it became effective for
federal purposes.
The Internal Revenue Code of 1986, as amended through April
10, 2004, shall be in effect for taxable years beginning after December 31,
2003.
Except as otherwise provided, references to the Internal
Revenue Code in subdivisions 19a to 19g mean the code in effect for purposes of
determining net income for the applicable year.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 3.
Minnesota Statutes 2003 Supplement, section 290.01, subdivision 19a, 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 income taxes paid or accrued within the
taxable year under this chapter and income taxes paid to any other state or to
any province or territory of Canada, 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 tax is the 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 income taxes 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;
(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; and
(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) the exclusion allowed under section
139A of the Internal Revenue Code for federal subsidies for prescription drug
plans;
(9) the deduction allowed under section 223 of the Internal
Revenue Code for contributions to health savings accounts; and
(10) to the extent not included in federal taxable income,
distributions from a health savings account that do not represent a return of
contributions that were included in Minnesota gross income in the taxable year
for which the contributions were made.
In determining if the distribution represents a return of contributions
and if the distribution is included in federal taxable income, the distribution
is allocated as provided in subdivision 19b, clause (13).
[EFFECTIVE DATE.] This
section is effective for taxable years beginning after December 31, 2003.
Sec. 4. Minnesota Statutes
2003 Supplement, section 290.01, subdivision 19b, 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) 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 included in federal taxable income,
postservice benefits for youth community service under section 124D.42 for
volunteer service under United States Code, title 42, sections 12601 to 12604;
(7) to the extent not deducted 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 allowable as a deduction for the
taxable year under section 170(a) of the Internal Revenue Code over $500;
(8) 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;
(9) 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;
(10) in each of the five tax years immediately following the
tax year in which an addition is required under subdivision 19a, clause (7), 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), 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; and
(11) job opportunity building zone income as provided under
section 469.316.;
(12) to the extent included in federal taxable income,
compensation paid to a service member as defined in United States Code, title
10, section 101(a)(5), for military service as defined in the Service Members
Civil Relief Act, Public Law 108-189, section 101(2), performed by a
nonresident. This subtraction does not
apply to "retirement income" as defined in section 290.17,
subdivision 2, paragraph (a), clause (3);
(13) to the extent included in federal taxable income,
distributions from a health savings account that represent a return of
contributions that were included in Minnesota gross income in the taxable year
for which the contributions were made but were deducted or were not included in
the computation of federal adjusted gross income. In determining if the distribution represents a return of contributions
under this clause, the distribution shall be allocated first to return of
contributions until the contributions included in Minnesota gross income have
been exhausted. In determining if the
distribution is included in federal taxable income, the distribution shall be
allocated first to qualified medical expenses not included in the computation
of federal adjusted gross income under section 223 of the Internal Revenue
Code; and
(14) to the extent not included in federal taxable income,
distributions from a health savings account to the extent the distributions,
added to other medical expenses as defined in section 152 of the Internal
Revenue Code, exceed the adjusted gross income threshold used in determining
the medical expenses deduction in section 213 of the Internal Revenue
Code. In determining the subtraction
under this clause, distributions are counted last in calculating the total
amount in excess of the adjusted gross income threshold.
[EFFECTIVE DATE.] This
section is effective for tax years beginning after December 31, 2003, except
clause (12) is effective for tax years beginning after December 31, 2002.
Sec. 5. Minnesota
Statutes 2003 Supplement, section 290.01, subdivision 19c, is amended to read:
Subd. 19c.
[CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE INCOME.] For corporations,
there shall be added to federal taxable income:
(1) the amount of any deduction taken for federal income tax
purposes for income, excise, or franchise taxes based on net income or related
minimum taxes, including but not limited to the tax imposed under section
290.0922, paid by the corporation to Minnesota, another state, a political
subdivision of another state, the District of Columbia, or any foreign country
or possession of the United States;
(2) interest not subject to federal tax upon obligations
of: the United States, its possessions,
its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its
municipalities, or any of its governmental agencies or instrumentalities; the
District of Columbia; or Indian tribal governments;
(3) exempt-interest dividends received as defined in section
852(b)(5) of the Internal Revenue Code;
(4) the amount of any net operating loss deduction taken for
federal income tax purposes under section 172 or 832(c)(10) of the Internal
Revenue Code or operations loss deduction under section 810 of the Internal
Revenue Code;
(5) the amount of any special deductions taken for federal
income tax purposes under sections 241 to 247 of the Internal Revenue Code;
(6) losses from the business of mining, as defined in section
290.05, subdivision 1, clause (a), that are not subject to Minnesota income
tax;
(7) the amount of any capital losses deducted for federal
income tax purposes under sections 1211 and 1212 of the Internal Revenue Code;
(8) the exempt foreign trade income of a foreign sales
corporation under sections 921(a) and 291 of the Internal Revenue Code;
(9) the amount of percentage depletion deducted under sections
611 through 614 and 291 of the Internal Revenue Code;
(10) for certified pollution control facilities placed in
service in a taxable year beginning before December 31, 1986, and for which
amortization deductions were elected under section 169 of the Internal Revenue
Code of 1954, as amended through December 31, 1985, the amount of the
amortization deduction allowed in computing federal taxable income for those
facilities;
(11) the amount of any deemed dividend from a foreign operating
corporation determined pursuant to section 290.17, subdivision 4, paragraph
(g);
(12) the amount of any environmental tax paid under section
59(a) of the Internal Revenue Code;
(13) 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;
(14) the amount of net income excluded under section 114 of the
Internal Revenue Code;
(15) any increase in subpart F income, as defined in section
952(a) of the Internal Revenue Code, for the taxable year when subpart F
income is calculated without regard to the provisions of section 614 of Public
Law 107‑147; and
(16) 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; and
(17) the exclusion allowed under section 139A of the
Internal Revenue Code for federal subsidies for prescription drug plans.
[EFFECTIVE DATE.] This
section is effective for taxable years beginning after December 31, 2003.
Sec. 6. Minnesota
Statutes 2003 Supplement, section 290.01, subdivision 31, is amended to read:
Subd. 31. [INTERNAL
REVENUE CODE.] Unless specifically defined otherwise, "Internal Revenue
Code" means the Internal Revenue Code of 1986, as amended through June
15, 2003 April 10, 2004.
[EFFECTIVE DATE.] This
section is effective the day following final enactment except the changes
incorporated by federal changes are effective at the same times as the changes
were effective for federal purposes.
Sec. 7. Minnesota
Statutes 2003 Supplement, section 290.06, subdivision 2c, is amended to read:
Subd. 2c. [SCHEDULES OF
RATES FOR INDIVIDUALS, ESTATES, AND TRUSTS.] (a) The income taxes imposed by
this chapter upon married individuals filing joint returns and surviving
spouses as defined in section 2(a) of the Internal Revenue Code must be
computed by applying to their taxable net income the following schedule of
rates:
(1) On the first $25,680, 5.35 percent;
(2) On all over $25,680, but not over $102,030, 7.05 percent;
(3) On all over $102,030, 7.85 percent.
Married individuals filing separate returns, estates, and
trusts must compute their income tax by applying the above rates to their
taxable income, except that the income brackets will be one-half of the above
amounts.
(b) The income taxes imposed by this chapter upon unmarried
individuals must be computed by applying to taxable net income the following
schedule of rates:
(1) On the first $17,570, 5.35 percent;
(2) On all over $17,570, but not over $57,710, 7.05 percent;
(3) On all over $57,710, 7.85 percent.
(c) The income taxes imposed by this chapter upon unmarried
individuals qualifying as a head of household as defined in section 2(b) of the
Internal Revenue Code must be computed by applying to taxable net income the
following schedule of rates:
(1) On the first $21,630, 5.35 percent;
(2) On all over $21,630, but not over $86,910, 7.05 percent;
(3) On all over $86,910, 7.85 percent.
(d) In lieu of a tax computed according to the rates set forth
in this subdivision, the tax of any individual taxpayer whose taxable net
income for the taxable year is less than an amount determined by the
commissioner must be computed in accordance with tables prepared and issued by
the commissioner of revenue based on income brackets of not more than
$100. The amount of tax for each
bracket shall be computed at the rates set forth in this subdivision, provided
that the commissioner may disregard a fractional part of a dollar unless it amounts
to 50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the
entire year must compute the individual's Minnesota income tax as provided in
this subdivision. After the application
of the nonrefundable credits provided in this chapter, the tax liability must
then be multiplied by a fraction in which:
(1) the numerator is the individual's Minnesota source federal
adjusted gross income as defined in section 62 of the Internal Revenue Code and
increased by the additions required under section 290.01, subdivision 19a,
clauses (1), (5), and (6), and reduced by the subtraction subtractions
under section 290.01, subdivision 19b, clause clauses (11) and
(12), and the Minnesota assignable portion of the subtraction for United
States government interest under section 290.01, subdivision 19b, clause (1),
after applying the allocation and assignability provisions of section 290.081,
clause (a), or 290.17; and
(2) the denominator is the individual's federal adjusted gross
income as defined in section 62 of the Internal Revenue Code of 1986, increased
by the amounts specified in section 290.01, subdivision 19a, clauses (1), (5),
and (6), and reduced by the amounts specified in section 290.01, subdivision
19b, clauses (1) and, (11), and (12).
[EFFECTIVE DATE.] This
section is effective for taxable years beginning after December 31, 2002.
Sec. 8. Minnesota
Statutes 2003 Supplement, section 290.091, subdivision 2, 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 to the extent that the deduction exceeds 1.0 percent
of adjusted gross income, as defined 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, clause (7); and
(7) the amount of addition required by section 290.01,
subdivision 19a, clause (8);
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 (10) and (11) to (12).
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, 2003.
Sec. 9. Minnesota
Statutes 2003 Supplement, section 290.0921, subdivision 3, is amended to read:
Subd. 3. [ALTERNATIVE
MINIMUM TAXABLE INCOME.] "Alternative minimum taxable income" is
Minnesota net income as defined in section 290.01, subdivision 19, and includes
the adjustments and tax preference items in sections 56, 57, 58, and 59(d),
(e), (f), and (h) of the Internal Revenue Code. If a corporation files a separate
company Minnesota tax return, the minimum tax must be computed on a separate
company basis. If a corporation is part
of a tax group filing a unitary return, the minimum tax must be computed on a
unitary basis. The following
adjustments must be made.
(1) For purposes of the depreciation adjustments under section
56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, the basis for
depreciable property placed in service in a taxable year beginning before
January 1, 1990, is the adjusted basis for federal income tax purposes,
including any modification made in a taxable year under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7,
paragraph (c).
For taxable years beginning after December 31, 2000, the amount
of any remaining modification made under section 290.01, subdivision 19e, or
Minnesota Statutes 1986, section 290.09, subdivision 7, paragraph (c), not
previously deducted is a depreciation allowance in the first taxable year after
December 31, 2000.
(2) The portion of the depreciation deduction allowed for
federal income tax purposes under section 168(k) of the Internal Revenue Code
that is required as an addition under section 290.01, subdivision 19c, clause
(16), is disallowed in determining alternative minimum taxable income.
(3) The subtraction for depreciation allowed under section
290.01, subdivision 19d, clause (19), is allowed as a depreciation deduction in
determining alternative minimum taxable income.
(4) The alternative tax net operating loss deduction under
sections 56(a)(4) and 56(d) of the Internal Revenue Code does not apply.
(5) The special rule for certain dividends under section
56(g)(4)(C)(ii) of the Internal Revenue Code does not apply.
(6) The special rule for dividends from section 936 companies
under section 56(g)(4)(C)(iii) does not apply.
(7) The tax preference for depletion under section 57(a)(1) of
the Internal Revenue Code does not apply.
(8) The tax preference for intangible drilling costs under
section 57(a)(2) of the Internal Revenue Code must be calculated without regard
to subparagraph (E) and the subtraction under section 290.01, subdivision 19d,
clause (4).
(9) The tax preference for tax exempt interest under section
57(a)(5) of the Internal Revenue Code does not apply.
(10) The tax preference for charitable contributions of
appreciated property under section 57(a)(6) of the Internal Revenue Code does
not apply.
(11) For purposes of calculating the tax preference for
accelerated depreciation or amortization on certain property placed in service
before January 1, 1987, under section 57(a)(7) of the Internal Revenue Code,
the deduction allowable for the taxable year is the deduction allowed under
section 290.01, subdivision 19e.
For taxable years beginning after December 31, 2000, the amount
of any remaining modification made under section 290.01, subdivision 19e, not
previously deducted is a depreciation or amortization allowance in the first
taxable year after December 31, 2004.
(12) For purposes of calculating the adjustment for adjusted
current earnings in section 56(g) of the Internal Revenue Code, the term
"alternative minimum taxable income" as it is used in section 56(g)
of the Internal Revenue Code, means alternative minimum taxable income as
defined in this subdivision, determined without regard to the adjustment for
adjusted current earnings in section 56(g) of the Internal Revenue Code.
(13) For purposes of determining the amount of
adjusted current earnings under section 56(g)(3) of the Internal Revenue Code,
no adjustment shall be made under section 56(g)(4) of the Internal Revenue Code
with respect to (i) the amount of foreign dividend gross-up subtracted as
provided in section 290.01, subdivision 19d, clause (1), (ii) the amount of
refunds of income, excise, or franchise taxes subtracted as provided in section
290.01, subdivision 19d, clause (10), or (iii) the amount of royalties, fees or
other like income subtracted as provided in section 290.01, subdivision 19d,
clause (11).
(14) Alternative minimum taxable income excludes the income
from operating in a job opportunity building zone as provided under section
469.317.
(15) Alternative minimum taxable income excludes the income
from operating in a biotechnology and health sciences industry zone as provided
under section 469.337.
(16) The addition required under section 290.01, subdivision
19c, clause (17), is included in determining alternative minimum taxable
income.
Items of tax preference must not be reduced below zero as a
result of the modifications in this subdivision.
[EFFECTIVE DATE.] This
section is effective for taxable years beginning after December 31, 2003.
Sec. 10. Minnesota
Statutes 2003 Supplement, section 290A.03, subdivision 15, is amended to read:
Subd. 15. [INTERNAL
REVENUE CODE.] "Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended through June 15, 2003 April 10, 2004.
[EFFECTIVE DATE.] This
section is effective the day following final enactment except the changes to
household income generated by federal changes to federal adjusted gross income
are effective at the same time federal changes are effective.
Sec. 11. Minnesota
Statutes 2003 Supplement, section 291.005, subdivision 1, is amended to read:
Subdivision 1. Unless
the context otherwise clearly requires, the following terms used in this
chapter shall have the following meanings:
(1) "Federal gross estate" means the gross estate of
a decedent as valued and otherwise determined for federal estate tax purposes
by federal taxing authorities pursuant to the provisions of the Internal
Revenue Code.
(2) "Minnesota gross estate" means the federal gross
estate of a decedent after (a) excluding therefrom any property included
therein which has its situs outside Minnesota, and (b) including therein any
property omitted from the federal gross estate which is includable therein, has
its situs in Minnesota, and was not disclosed to federal taxing authorities.
(3) "Personal representative" means the executor,
administrator or other person appointed by the court to administer and dispose
of the property of the decedent. If
there is no executor, administrator or other person appointed, qualified, and
acting within this state, then any person in actual or constructive possession
of any property having a situs in this state which is included in the federal
gross estate of the decedent shall be deemed to be a personal representative to
the extent of the property and the Minnesota estate tax due with respect to the
property.
(4) "Resident decedent" means an individual whose
domicile at the time of death was in Minnesota.
(5) "Nonresident decedent" means an
individual whose domicile at the time of death was not in Minnesota.
(6) "Situs of property" means, with respect to real
property, the state or country in which it is located; with respect to tangible
personal property, the state or country in which it was normally kept or located
at the time of the decedent's death; and with respect to intangible personal
property, the state or country in which the decedent was domiciled at death.
(7) "Commissioner" means the commissioner of revenue
or any person to whom the commissioner has delegated functions under this
chapter.
(8) "Internal Revenue Code" means the United States
Internal Revenue Code of 1986, as amended through December 31, 2002 April
10, 2004.
[EFFECTIVE DATE.] This
section is effective for estates of decedents dying after January 31, 2003.
ARTICLE
2
DEPARTMENT
OF REVENUE POLICY PROVISIONS
Section 1. Minnesota
Statutes 2002, section 16D.10, is amended to read:
16D.10 [CASE REVIEWER.]
Subdivision 1.
[DUTIES.] The commissioner shall make a case reviewer available to
debtors. The reviewer must be available
to answer a debtor's questions concerning the collection process and to review
the collection activity taken. If the
reviewer reasonably believes that the particular action being taken is
unreasonable or unfair, the reviewer may make recommendations to the
commissioner in regard to the collection action.
Subd. 2.
[AUTHORITY TO ISSUE DEBTOR ASSISTANCE ORDER.] On application filed by
a debtor with the case reviewer, in the form, manner, and in the time
prescribed by the commissioner, and after thorough investigation, the case
reviewer may issue a debtor assistance order if, in the determination of the
case reviewer, the manner in which the state debt collection laws are being
administered is creating or will create an unjust and inequitable result for
the debtor. Debtor assistance orders
are governed by the provisions relating to taxpayer assistance orders under
section 270.273.
Subd. 3.
[TRANSFER OF DUTIES TO TAXPAYER RIGHTS ADVOCATE.] All duties and
authority of the case reviewer under subdivisions 1 and 2 are transferred to
the taxpayer rights advocate.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 2. Minnesota
Statutes 2002, section 270.02, subdivision 3, is amended to read:
Subd. 3. [POWERS,
ORGANIZATION, ASSISTANTS.] Subject to the provisions of this chapter and other
applicable laws the commissioner shall have power to organize the department
with such divisions and other agencies as the commissioner deems necessary and
to appoint one deputy commissioner, a department secretary, directors of
divisions, and such other officers, employees, and agents as the commissioner
may deem necessary to discharge the functions of the department, define the duties
of such officers, employees, and agents, and delegate to them any of the
commissioner's powers or duties, subject to the commissioner's control and
under such conditions as the
commissioner may prescribe.
Appointments to exercise delegated power to sign documents which require
the signature of the commissioner or a delegate by law shall be by written
order filed with the secretary of state.
The delegations of authority granted by the commissioner remain in
effect until revoked by the commissioner or a successor commissioner.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 3. Minnesota
Statutes 2003 Supplement, section 270.06, is amended to read:
270.06 [POWERS AND DUTIES.]
The commissioner of revenue shall:
(1) have and exercise general supervision over the
administration of the assessment and taxation laws of the state, over
assessors, town, county, and city boards of review and equalization, and all
other assessing officers in the performance of their duties, to the end that
all assessments of property be made relatively just and equal in compliance
with the laws of the state;
(2) 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;
(3) 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 laws of this state governing
returns of assessment and taxation of property, 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;
(4) require county attorneys to assist in the commencement of
prosecutions in actions or proceedings for removal, forfeiture and punishment
for violation of the laws of this state in respect to the assessment and
taxation of property in their respective districts or counties;
(5) require town, city, county, and other public officers to
report information as to the assessment of property, collection of taxes
received from licenses and other sources, and such other information as may be
needful in the work of the Department of Revenue, in such form and upon such
blanks as the commissioner may prescribe;
(6) require individuals, copartnerships, companies,
associations, and corporations to furnish information concerning their capital,
funded or other debt, current assets and liabilities, earnings, operating
expenses, taxes, as well as all other statements now required by law for
taxation purposes;
(7) subpoena witnesses, at a time and place reasonable under
the circumstances, to appear and give testimony, and to produce books, records,
papers and documents for inspection and copying relating to any matter which the
commissioner may have authority to investigate or determine;
(8) issue a subpoena which does not identify the person or
persons with respect to whose liability the subpoena is issued, but only if (a)
the subpoena relates to the investigation of a particular person or
ascertainable group or class of persons, (b) there is a reasonable basis for
believing that such person or group or class of persons may fail or may have
failed to comply with any law administered by the commissioner, (c) the
information sought to be obtained from the examination of the records (and the
identity of the person or persons with respect to whose liability the subpoena
is issued) is not readily available from other sources, (d) the subpoena is
clear and specific as to the information sought to be obtained, and (e) the
information sought to be obtained is limited solely to the scope of the investigation. Provided further that the party served with
a subpoena which does not identify the person or persons with respect to whose
tax liability the subpoena is issued shall have the right, within 20 days after
service of the subpoena, to petition the district court for the judicial
district in which lies the county in which that party is located for a
determination as to whether the commissioner of revenue has complied with all
the requirements in (a) to (e), and thus, whether the subpoena is
enforceable. If no such petition is
made by the party served within the time prescribed, the subpoena shall have
the force and effect of a court order;
(9) cause the deposition of witnesses residing within or
without the state, or absent therefrom, to be taken, upon notice to the
interested party, if any, in like manner that depositions of witnesses are
taken in civil actions in the district court, in any matter which the
commissioner may have authority to investigate or determine;
(10) investigate the tax laws of other states and countries and
to formulate and submit to the legislature such legislation as the commissioner
may deem expedient to prevent evasions of assessment and taxing laws, and
secure just and equal taxation and improvement in the system of assessment and
taxation in this state;
(11) consult and confer with the governor upon the subject of
taxation, the administration of the laws in regard thereto, and the progress of
the work of the Department of Revenue, and furnish the governor, from time to
time, such assistance and information as the governor may require relating to
tax matters;
(12) 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
of Revenue for the preceding years, showing all the taxable property in the
state and the value of the same, in tabulated form;
(13) inquire into the methods of assessment and taxation and
ascertain whether the assessors faithfully discharge their duties, particularly
as to their compliance with the laws requiring the assessment of all property
not exempt from taxation;
(14) administer and enforce the assessment and collection of
state taxes and fees, including the use of any remedy available to
nongovernmental creditors, and, from time to time, make, publish, and distribute
rules for the administration and enforcement of laws administered by the
commissioner and state tax laws. The
rules have the force of law;
(15) prepare blank forms for the returns required by state tax
law and distribute them throughout the state, furnishing them subject to charge
on application;
(16) prescribe rules governing the qualification and practice
of agents, attorneys, or other persons representing taxpayers before the
commissioner. The rules may require
that those persons, agents, and attorneys show that they are of good character
and in good repute, have the necessary qualifications to give taxpayers
valuable services, and are otherwise competent to advise and assist taxpayers
in the presentation of their case before being recognized as representatives of
taxpayers. After due notice and
opportunity for hearing, the commissioner may suspend and bar from further
practice before the commissioner any person, agent, or attorney who is shown to
be incompetent or disreputable, who refuses to comply with the rules, or who
with intent to defraud, willfully or knowingly deceives, misleads, or threatens
a taxpayer or prospective taxpayer, by words, circular, letter, or by
advertisement. This clause does not
curtail the rights of individuals to appear in their own behalf or partners or
corporations' officers to appear in behalf of their respective partnerships or
corporations;
(17) appoint agents as the commissioner considers necessary to
make examinations and determinations.
The agents have the rights and powers conferred on the commissioner to
subpoena, examine, and copy books, records, papers, or memoranda, subpoena
witnesses, administer oaths and affirmations, and take testimony. In addition to administrative subpoenas of
the commissioner and the agents, upon demand of the commissioner or an agent,
the court administrator of any
district court shall issue a subpoena for the attendance of a witness or the
production of books, papers, records, or memoranda before the agent for
inspection and copying. Disobedience of
a court administrator's subpoena shall be punished by the district court of the
district in which the subpoena is issued, or in the case of a subpoena issued
by the commissioner or an agent, by the district court of the district in which
the party served with the subpoena is located, in the same manner as contempt
of the district court;
(18) appoint and employ additional help, purchase supplies or
materials, or incur other expenditures in the enforcement of state tax laws as
considered necessary. The salaries of
all agents and employees provided for in this chapter shall be fixed by the
appointing authority, subject to the approval of the commissioner of
administration;
(19) execute and administer any agreement with the secretary of
the treasury of the United States or a representative of another state
regarding the exchange of information and administration of the tax laws;
(20) authorize the use of unmarked motor vehicles to conduct
seizures or criminal investigations pursuant to the commissioner's authority; and
(21) exercise other powers and perform other duties required of
or imposed upon the commissioner of revenue by law; and
(22) negotiate with other member states as to the amount of
the monetary allowance for sellers and certified service providers who purchase
certified software for sales tax collection as described in the streamlined
sales tax agreement.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 4. [270.0611] [SUFFICIENCY
OF NOTICE OF DETERMINATION OR ACTION OF COMMISSIONER OF REVENUE.]
When a method of notification of a written determination or
action of the commissioner is not specifically provided for by law, notice of
the determination or action sent postage prepaid by United States mail to the
taxpayer or other person affected by the determination or action at the
taxpayer's or person's last known address is sufficient. If the taxpayer or person being notified is
deceased or is under a legal disability, or if a corporation being notified has
terminated its existence, notice to the last known address of the taxpayer,
person, or corporation is sufficient, unless the department has been provided
with a new address by a party authorized to receive notices from the
commissioner.
[EFFECTIVE DATE.] This
section is effective for notices sent on or after the day following final
enactment.
Sec. 5. Minnesota
Statutes 2002, section 270.69, subdivision 4, is amended to read:
Subd. 4. [PERIOD OF
LIMITATIONS.] The lien imposed by this section shall, notwithstanding any other
provision of law to the contrary, be enforceable from the time the lien arises
and for ten years from the date of filing the notice of lien, which must be
filed by the commissioner within five years after the date of assessment of the
tax or final administrative or judicial determination of the assessment. A notice of lien filed in one county may be
transcribed to the secretary of state or to any other county within ten
years after the date of its filing, but the transcription shall not extend the
period during which the lien is enforceable.
A notice of lien may be renewed by the commissioner before the
expiration of the ten-year period for an additional ten years. The taxpayer must receive written notice of
the renewal.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 6. Minnesota Statutes
2002, section 270B.01, subdivision 8, is amended to read:
Subd. 8. [MINNESOTA TAX
LAWS.] For purposes of this chapter only, unless expressly stated otherwise,
"Minnesota tax laws" means:
(1) the taxes, refunds, and fees administered by or paid
to the commissioner under chapters 115B (except taxes imposed under sections
115B.21 to 115B.24), 289A (except taxes imposed under sections 298.01, 298.015,
and 298.24), 290, 290A, 291, 295, 297A, and 297H, or any similar Indian tribal
tax administered by the commissioner pursuant to any tax agreement between the
state and the Indian tribal government, and includes any laws for the
assessment, collection, and enforcement of those taxes, refunds, and fees;
and
(2) section 273.1315.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 7. Minnesota
Statutes 2003 Supplement, section 270B.12, subdivision 13, is amended to read:
Subd. 13. [COUNTY
ASSESSORS; CLASS 1B HOMESTEADS.] The commissioner may disclose to a county
assessor, and to the assessor's designated agents or employees, a listing of
parcels of property qualifying for the class 1b property tax classification
under section 273.13, subdivision 22, and the names and addresses of
qualified applicants.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 8. Minnesota
Statutes 2003 Supplement, section 272.02, subdivision 65, is amended to read:
Subd. 65.
[BIOTECHNOLOGY AND HEALTH SCIENCES INDUSTRY ZONE PROPERTY.] (a)
Improvements to real property, and personal property, classified under section
273.13, subdivision 24, and located within a biotechnology and health sciences
industry zone are exempt from ad valorem taxes levied under chapter 275, as
provided in this subdivision.
(b) For property to qualify for exemption under paragraph (a),
the occupant must be a qualified business, as defined in section 469.330.
(c) The exemption applies beginning for the first assessment
year after designation of the biotechnology and health sciences industry zone
by the commissioner of employment and economic development. The exemption applies to each assessment
year that begins during the duration of the biotechnology and health sciences
industry zone and to property occupied by July 1 of the assessment year by a
qualified business. This exemption
does not apply to:
(1) a levy under section 475.61 or similar levy provisions
under any other law to pay general obligation bonds; or
(2) a levy under section 126C.17, if the levy was approved by
the voters before the designation of the biotechnology and health sciences
industry zone.
(d) The exemption does not apply to taxes imposed by a city,
town, or county, unless the governing body adopts a resolution granting the
exemption. A city, town, or county may
provide a complete property tax exemption, partial property tax exemption, or
no property tax exemption to qualified businesses in the biotechnology and
health sciences industry zone.
"City" includes a statutory or home rule charter city.
(e) For property located in a tax increment financing district, the
county shall not adjust the original net tax capacity of the district under
section 469.177, subdivision 1, paragraph (a), upon the expiration of an
exemption under this subdivision.
[EFFECTIVE DATE.] This
section is effective beginning for property taxes assessed in 2004, payable in
2005.
Sec. 9. Minnesota
Statutes 2002, section 289A.12, subdivision 3, is amended to read:
Subd. 3. [RETURNS OR
REPORTS BY PARTNERSHIPS, FIDUCIARIES, AND S CORPORATIONS.] (a) Partnerships
must file a return with the commissioner for each taxable year. The return must conform to the requirements
of section 290.311, and must include the names and addresses of the partners
entitled to a distributive share in their taxable net income, gain, loss, or
credit, and the amount of the distributive share to which each is
entitled. A partnership required to
file a return for a partnership taxable year must furnish a copy of the
information required to be shown on the return to a person who is a partner at
any time during the taxable year, on or before the day on which the return for
the taxable year was filed. A
partnership with more than 100 partners that is required to file a federal
partnership return electronically under Code of Federal Regulations, title 26,
section 301.6011-3 (2003), must also file the return due under this section
electronically. If a return required to
be filed electronically is filed on paper, the return is still valid but a
penalty of $50 for each partner over 100 partners is imposed for failing to file
electronically. The commissioner may waive
the penalty if the partnership can demonstrate that filing the return
electronically creates a hardship.
(b) The fiduciary of an estate or trust making the return
required to be filed under section 289A.08, subdivision 2, for a taxable year
must give a beneficiary who receives a distribution from the estate or trust
with respect to the taxable year or to whom any item with respect to the
taxable year is allocated, a statement containing the information required to
be shown on the return, on or before the date on which the return was filed.
(c) An S corporation must file a return with the commissioner
for a taxable year during which an election under section 290.9725 is in
effect, stating specifically the names and addresses of the persons owning stock
in the corporation at any time during the taxable year, the number of shares of
stock owned by a shareholder at all times during the taxable year, the
shareholder's pro rata share of each item of the corporation for the taxable
year, and other information the commissioner requires. An S corporation required to file a return
under this paragraph for any taxable year must furnish a copy of the
information shown on the return to the person who is a shareholder at any time
during the taxable year, on or before the day on which the return for the
taxable year was filed.
(d) The partnership or S corporation return must be signed by
someone designated by the partnership or S corporation.
[EFFECTIVE DATE.] This
section is effective for taxable years beginning after December 31, 2003.
Sec. 10. Minnesota
Statutes 2002, section 289A.31, subdivision 2, is amended to read:
Subd. 2. [JOINT INCOME
TAX RETURNS.] (a) If a joint income tax return is made by a husband and wife,
the liability for the tax is joint and several. A spouse who qualifies for relief from a liability attributable
to an underpayment under section 6015(b) of the Internal Revenue Code is
relieved of the state income tax liability on the underpayment.
(b) In the case of individuals who were a husband and wife
prior to the dissolution of their marriage or their legal separation, or prior
to the death of one of the individuals, for tax liabilities reported on a joint
or combined return, the liability of each person is limited to the proportion
of the tax due on the return that equals that person's proportion of the total
tax due if the husband and wife filed separate returns for the taxable
year. This provision is effective only when the
commissioner receives written notice of the marriage dissolution, legal
separation, or death of a spouse from the husband or wife. No refund may be claimed by an ex-spouse,
legally separated or widowed spouse for any taxes paid more than 60 days before
receipt by the commissioner of the written notice.
(c) A request for calculation of separate liability pursuant
to paragraph (b) for taxes reported on a return must be made within six years
after the due date of the return. For
calculation of separate liability for taxes assessed by the commissioner under
section 289A.35 or 289A.37, the request must be made within six years after the
date of assessment. The commissioner is
not required to calculate separate liability if the remaining unpaid liability
for which recalculation is requested is $100 or less.
[EFFECTIVE DATE.] This
section is effective for requests for relief made on or after the day following
final enactment.
Sec. 11. Minnesota
Statutes 2002, section 289A.56, is amended by adding a subdivision to read:
Subd. 7.
[BIOTECHNOLOGY AND BORDER CITY ZONE REFUNDS.] Notwithstanding
subdivision 3, for refunds payable under sections 297A.68, subdivision 38, and
469.1734, subdivision 6, interest is computed from 90 days after the refund
claim is filed with the commissioner.
[EFFECTIVE DATE.] This
section is effective for refund claims filed on or after July 1, 2004.
Sec. 12. Minnesota
Statutes 2003 Supplement, section 290.01, subdivision 19d, is amended to read:
Subd. 19d.
[CORPORATIONS; MODIFICATIONS DECREASING FEDERAL TAXABLE INCOME.] For
corporations, there shall be subtracted from federal taxable income after the
increases provided in subdivision 19c:
(1) the amount of foreign dividend gross-up added to gross
income for federal income tax purposes under section 78 of the Internal Revenue
Code;
(2) the amount of salary expense not allowed for federal income
tax purposes due to claiming the federal jobs credit under section 51 of the
Internal Revenue Code;
(3) any dividend (not including any distribution in
liquidation) paid within the taxable year by a national or state bank to the
United States, or to any instrumentality of the United States exempt from
federal income taxes, on the preferred stock of the bank owned by the United
States or the instrumentality;
(4) amounts disallowed for intangible drilling costs due to
differences between this chapter and the Internal Revenue Code in taxable years
beginning before January 1, 1987, as follows:
(i) to the extent the disallowed costs are represented by
physical property, an amount equal to the allowance for depreciation under
Minnesota Statutes 1986, section 290.09, subdivision 7, subject to the
modifications contained in subdivision 19e; and
(ii) to the extent the disallowed costs are not represented by
physical property, an amount equal to the allowance for cost depletion under
Minnesota Statutes 1986, section 290.09, subdivision 8;
(5) the deduction for capital losses pursuant to sections 1211
and 1212 of the Internal Revenue Code, except that:
(i) for capital losses incurred in taxable years beginning
after December 31, 1986, capital loss carrybacks shall not be allowed;
(ii) for capital losses incurred in taxable years beginning after
December 31, 1986, a capital loss carryover to each of the 15 taxable years succeeding
the loss year shall be allowed;
(iii) for capital losses incurred in taxable years beginning
before January 1, 1987, a capital loss carryback to each of the three taxable
years preceding the loss year, subject to the provisions of Minnesota Statutes
1986, section 290.16, shall be allowed; and
(iv) for capital losses incurred in taxable years beginning
before January 1, 1987, a capital loss carryover to each of the five taxable
years succeeding the loss year to the extent such loss was not used in a prior
taxable year and subject to the provisions of Minnesota Statutes 1986, section
290.16, shall be allowed;
(6) an amount for interest and expenses relating to income not
taxable for federal income tax purposes, if (i) the income is taxable under
this chapter and (ii) the interest and expenses were disallowed as deductions
under the provisions of section 171(a)(2), 265 or 291 of the Internal Revenue
Code in computing federal taxable income;
(7) in the case of mines, oil and gas wells, other natural
deposits, and timber for which percentage depletion was disallowed pursuant to
subdivision 19c, clause (11), a reasonable allowance for depletion based on
actual cost. In the case of leases the
deduction must be apportioned between the lessor and lessee in accordance with
rules prescribed by the commissioner.
In the case of property held in trust, the allowable deduction must be
apportioned between the income beneficiaries and the trustee in accordance with
the pertinent provisions of the trust, or if there is no provision in the
instrument, on the basis of the trust's income allocable to each;
(8) for certified pollution control facilities placed in
service in a taxable year beginning before December 31, 1986, and for which
amortization deductions were elected under section 169 of the Internal Revenue
Code of 1954, as amended through December 31, 1985, an amount equal to the
allowance for depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7;
(9) amounts included in federal taxable income that are due to
refunds of income, excise, or franchise taxes based on net income or related
minimum taxes paid by the corporation to Minnesota, another state, a political
subdivision of another state, the District of Columbia, or a foreign country or
possession of the United States to the extent that the taxes were added to
federal taxable income under section 290.01, subdivision 19c, clause (1), in a
prior taxable year;
(10) 80 percent of royalties, fees, or other like income
accrued or received from a foreign operating corporation or a foreign
corporation which is part of the same unitary business as the receiving
corporation;
(11) income or gains from the business of mining as defined in
section 290.05, subdivision 1, clause (a), that are not subject to Minnesota
franchise tax;
(12) the amount of handicap access expenditures in the taxable
year which are not allowed to be deducted or capitalized under section 44(d)(7)
of the Internal Revenue Code;
(13) the amount of qualified research expenses not allowed for
federal income tax purposes under section 280C(c) of the Internal Revenue Code,
but only to the extent that the amount exceeds the amount of the credit allowed
under section 290.068 or 469.339;
(14) the amount of salary expenses not allowed for federal
income tax purposes due to claiming the Indian employment credit under section
45A(a) of the Internal Revenue Code;
(15) the amount of any refund of environmental taxes paid under
section 59A of the Internal Revenue Code;
(16) 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;
(17) for a corporation whose foreign sales corporation, as
defined in section 922 of the Internal Revenue Code, constituted a foreign
operating corporation during any taxable year ending before January 1, 1995,
and a return was filed by August 15, 1996, claiming the deduction under section
290.21, subdivision 4, for income received from the foreign operating
corporation, an amount equal to 1.23 multiplied by the amount of income
excluded under section 114 of the Internal Revenue Code, provided the income is
not income of a foreign operating company;
(18) any decrease in subpart F income, as defined in section
952(a) of the Internal Revenue Code, for the taxable year when subpart F income
is calculated without regard to the provisions of section 614 of Public Law
107-147; and
(19) in each of the five tax years immediately following the
tax year in which an addition is required under subdivision 19c, clause (16),
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 19c, clause (16). The
resulting delayed depreciation cannot be less than zero.
[EFFECTIVE DATE.] This
section is effective for tax years beginning after December 31, 2003.
Sec. 13. Minnesota
Statutes 2002, section 290.9705, subdivision 1, is amended to read:
Subdivision 1.
[WITHHOLDING OF PAYMENTS TO OUT-OF-STATE CONTRACTORS.] (a) In this
section, "person" means a person, corporation, or cooperative, the
state of Minnesota and its political subdivisions, and a city, county, and
school district in Minnesota.
(b) A person who in the regular course of business is hiring,
contracting, or having a contract with a nonresident person or foreign
corporation, as defined in Minnesota Statutes 1986, section 290.01, subdivision
5, to perform construction work in Minnesota, shall deduct and withhold eight
percent of every payment cumulative calendar year payments to the
contractor if the contract exceeds or can reasonably be expected to exceed
$100,000 which exceed $50,000.
[EFFECTIVE DATE.] This
section is effective for payments made after December 31, 2004.
Sec. 14. Minnesota
Statutes 2003 Supplement, section 290C.10, is amended to read:
290C.10 [WITHDRAWAL PROCEDURES.]
An approved claimant under the sustainable forest incentive
program for a minimum of four years may notify the commissioner of the intent
to terminate enrollment. Within 90 days
of receipt of notice to terminate enrollment, the commissioner shall inform the
claimant in writing, acknowledging receipt of this notice and indicating the
effective date of termination from the sustainable forest incentive
program. Termination of enrollment in
the sustainable forest incentive program occurs on January 1 of the fifth
calendar year that begins after receipt by the commissioner of the termination
notice. After the commissioner issues
an effective date of termination, a claimant wishing to continue the land's
enrollment in the sustainable forest incentive program beyond the termination
date must apply for enrollment as prescribed in section 290C.04. A claimant who withdraws a parcel of land
from this program may not reenroll the parcel for a period of three years. Within 90 days after the termination date,
the commissioner shall execute and acknowledge a document releasing the land
from the covenant required under this chapter.
The document must be mailed to the claimant and is entitled to be
recorded. The commissioner may allow
early withdrawal from the Sustainable Forest Incentive Act without penalty Minnesota,
any local government unit, or any other entity which has the right of eminent
domain acquires title or possession to the land for a public purpose
notwithstanding the provisions of this section. In the case of such acquisition, the commissioner shall
execute and acknowledge a document releasing the land acquired by the state,
local government unit, or other entity from the covenant. All other enrolled land must remain in the
program. in
cases of condemnation when the state of
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 15. Minnesota
Statutes 2002, section 297A.995, subdivision 6, is amended to read:
Subd. 6. [AGREEMENT
REQUIREMENTS.] The commissioner of revenue shall not enter into the agreement
unless the agreement requires each state to abide by the following
requirements:
(a) [UNIFORM STATE
RATE.] The agreement must set restrictions to achieve more uniform state rates
through the following:
(1) limiting the number of state rates;
(2) eliminating maximums on the amount of state tax that is due
on a transaction; and
(3) eliminating thresholds on the application of state tax.
(b) [UNIFORM
STANDARDS.] The agreement must establish uniform standards for the following:
(1) the sourcing of transactions to taxing jurisdictions;
(2) the administration of exempt sales;
(3) the allowances a seller can take for bad debts; and
(4) sales and use tax returns and remittances.
(c) [UNIFORM
DEFINITIONS.] The agreement must require states to develop and adopt uniform
definitions of sales and use tax terms.
The definitions must enable a state to preserve its ability to make
policy choices not inconsistent with the uniform definitions.
(d) [CENTRAL
REGISTRATION.] The agreement must provide a central, electronic registration
system that allows a seller to register to collect and remit sales and use
taxes for all signatory states.
(e) [NO NEXUS
ATTRIBUTION.] The agreement must provide that registration with the central
registration system and the collection of sales and use taxes in the signatory
states will not be used as a factor in determining whether the seller has nexus
with a state for any tax.
(f) [LOCAL SALES AND
USE TAXES.] The agreement must provide for reduction of the burdens of
complying with local sales and use taxes through the following:
(1) restricting and eliminating variances between the state and
local tax bases;
(2) requiring states to administer any sales and use taxes
levied by local jurisdictions within the state so that sellers collecting and
remitting these taxes will not have to register or file returns with, remit
funds to, or be subject to independent audits from local taxing jurisdictions;
(3) restricting the frequency of changes in
the local sales and use tax rates and setting effective dates for the
application of local jurisdictional boundary changes to local sales and use
taxes; and
(4) providing notice of changes in local sales and use tax
rates and of changes in the boundaries of local taxing jurisdictions.
(g) [MONETARY
ALLOWANCES.] The agreement must outline any monetary allowances that are to be
provided by the states to sellers or certified service providers. The allowances must be funded from the
money collected by the seller or certified service provider and must be
subtracted by the seller or certified service provider before remitting the tax
collected to the Department of Revenue.
(h) [STATE COMPLIANCE.]
The agreement must require each state to certify compliance with the terms of
the agreement prior to joining and to maintain compliance, under the laws of
the member state, with all provisions of the agreement while a member.
(i) [CONSUMER PRIVACY.]
The agreement must require each state to adopt a uniform policy for certified
service providers that protects the privacy of consumers and maintains the
confidentiality of tax information.
(j) [ADVISORY
COUNCILS.] The agreement must provide for the appointment of an advisory
council of private sector representatives and an advisory council of nonmember
state representatives to consult with in the administration of the agreement.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 16. Minnesota
Statutes 2002, section 469.1734, subdivision 6, is amended to read:
Subd. 6. [SALES TAX
EXEMPTION; EQUIPMENT; CONSTRUCTION MATERIALS.] (a) The gross receipts from the
sale of machinery and equipment and repair parts are exempt from taxation under
chapter 297A, if the machinery and equipment:
(1) are used in connection with a trade or business;
(2) are placed in service in a city that is authorized to
designate a zone under section 469.1731, regardless of whether the machinery
and equipment are used in a zone; and
(3) have a useful life of 12 months or more.
(b) The gross receipts from the sale of construction materials
are exempt, if they are used to construct:
(1) a facility for use in a trade or business located in a city
that is authorized to designate a zone under section 469.1731, regardless of
whether the facility is located in a zone; or
(2) housing that is located in a zone.
The exemptions under this
paragraph apply regardless of whether the purchase is made by the owner, the
user, or a contractor.
(c) A purchaser may claim an exemption under this subdivision
for tax on the purchases up to, but not exceeding:
(1) the amount of the tax credit certificates received from the
city, less
(2) any tax credit certificates used under the
provisions of subdivisions 4 and 5, and section 469.1732, subdivision 2.
(d) The tax on sales of items exempted under this subdivision
shall be imposed and collected as if the applicable rate under section 297A.62
applied. Upon application by the
purchaser, on forms prescribed by the commissioner, a refund equal to the tax
paid shall be paid to the purchaser.
The application must include sufficient information to permit the
commissioner to verify the sales tax paid and the eligibility of the claimant
to receive the credit. No more than two
applications for refunds may be filed under this subdivision in a calendar
year. The provisions of section 289A.40
apply to the refunds payable under this subdivision. There is annually appropriated to the commissioner of revenue the
amount required to make the refunds, which must be deducted from the amount of
the city's allocation under section 469.169, subdivision 12, that remains
available and its limitation under section 469.1735. The amount to be refunded shall bear interest at the rate in
section 270.76 from 90 days after the date the refund claim is filed
with the commissioner.
[EFFECTIVE DATE.] This
section is effective for refund claims filed on or after July 1, 2004.
Sec. 17. Minnesota
Statutes 2003 Supplement, section 469.310, subdivision 11, is amended to read:
Subd. 11. [QUALIFIED
BUSINESS.] (a) "Qualified business" means a person carrying on a
trade or business at a place of business located within a job opportunity
building zone. A person is a
qualified business only on those parcels of land for which it has entered into
a business subsidy agreement, as required under section 469.313, with the
appropriate local government unit in which the parcels are located.
(b) A person that relocates a trade or business from outside a
job opportunity building zone into a zone is not a qualified business, unless
the business:
(1)(i) increases full-time employment in the first full year of
operation within the job opportunity building zone by at least 20 percent
measured relative to the operations that were relocated and maintains the
required level of employment for each year the zone designation applies; or
(ii) makes a capital investment in the property located within
a zone equivalent to ten percent of the gross revenues of operation that were
relocated in the immediately preceding taxable year; and
(2) enters a binding written agreement with the commissioner
that:
(i) pledges the business will meet the requirements of clause
(1);
(ii) provides for repayment of all tax benefits enumerated
under section 469.315 to the business under the procedures in section 469.319,
if the requirements of clause (1) are not met for the taxable year or for taxes
payable during the year in which the requirements were not met; and
(iii) contains any other terms the commissioner determines
appropriate.
[EFFECTIVE DATE.] This
section is effective retroactively from June 9, 2003.
Sec. 18. Minnesota
Statutes 2003 Supplement, section 469.330, subdivision 11, is amended to read:
Subd. 11. [QUALIFIED
BUSINESS.] (a) "Qualified business" means a person carrying on a
trade or business at a biotechnology and health sciences industry facility
located within a biotechnology and health sciences industry zone. A person is a qualified business only on
those parcels of land for which it has entered into a business subsidy
agreement, as required under section 469.333, with the appropriate local
government unit in which the parcels are located.
(b) A person that relocates a biotechnology and health sciences
industry facility from outside a biotechnology and health sciences industry
zone into a zone is not a qualified business, unless the business:
(1)(i) increases full-time employment in the first full year of
operation within the biotechnology and health sciences industry zone by at
least 20 percent measured relative to the operations that were relocated and
maintains the required level of employment for each year the zone designation
applies; or
(ii) makes a capital investment in the property located within
a zone equivalent to ten percent of the gross revenues of operation that were
relocated in the immediately preceding taxable year; and
(2) enters a binding written agreement with the commissioner
that:
(i) pledges the business will meet the requirements of clause
(1);
(ii) provides for repayment of all tax benefits enumerated
under section 469.336 to the business under the procedures in section 469.340,
if the requirements of clause (1) are not met; and
(iii) contains any other terms the commissioner determines
appropriate.
[EFFECTIVE DATE.] This
section is effective retroactively from June 9, 2003.
Sec. 19. Minnesota
Statutes 2003 Supplement, section 469.337, is amended to read:
469.337 [CORPORATE FRANCHISE TAX EXEMPTION.]
(a) A qualified business is exempt from taxation under section
290.02, the alternative minimum tax under section 290.0921, and the minimum fee
under section 290.0922, on the portion of its income attributable to operations
of a qualified business within the biotechnology and health sciences industry
zone. This exemption is determined as
follows:
(1) for purposes of the tax imposed under section 290.02, by
multiplying its taxable net income by its zone percentage and subtracting the
result in determining taxable income;
(2) for purposes of the alternative minimum tax under section
290.0921, by multiplying its alternative minimum taxable income by its zone
percentage and reducing alternative minimum taxable income by this amount; and
(3) for purposes of the minimum fee under section 290.0922, by
excluding zone property and payroll in the zone from the
computations of the fee. The
qualified business is exempt from the minimum fee if all of its property is
located in the zone and all of its payroll is zone payroll.
(b) No subtraction is allowed under this section in excess of
20 percent of the sum of the corporation's biotechnology and health sciences
industry zone payroll and the adjusted basis of the property at the time that
the property is first used in the biotechnology and health sciences industry
zone by the corporation.
(c) No reduction in tax is allowed in excess of the amount
allocated under section 469.335.
[EFFECTIVE DATE.] This
section is effective for tax years beginning after December 31, 2003.
Sec. 20. Minnesota Statutes
2002, section 473F.02, subdivision 2, is amended to read:
Subd. 2. [AREA.]
"Area" means the territory included within the boundaries of Anoka,
Carver, Dakota excluding the city of Northfield, Hennepin, Ramsey, Scott
excluding the city of New Prague, and Washington Counties, excluding lands
constituting a major or an intermediate airport as defined under section
473.625.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2005 and thereafter.
Sec. 21. [REPEALER.]
Laws 1975, chapter 287, section 5, and Laws 2003, chapter
127, article 9, section 9, subdivision 4, are repealed.
[EFFECTIVE DATE.] This
section is effective without local approval for taxes payable in 2005 and
thereafter.
ARTICLE
3
PROPERTY
TAXES TECHNICAL
Section 1. Minnesota
Statutes 2003 Supplement, section 4A.02, is amended to read:
4A.02 [STATE DEMOGRAPHER.]
(a) The director shall appoint a state demographer. The demographer must be professionally
competent in demography and must possess demonstrated ability based upon past
performance.
(b) The demographer shall:
(1) continuously gather and develop demographic data relevant
to the state;
(2) design and test methods of research and data collection;
(3) periodically prepare population projections for the state
and designated regions and periodically prepare projections for each county or
other political subdivision of the state as necessary to carry out the purposes
of this section;
(4) review, comment on, and prepare analysis of population
estimates and projections made by state agencies, political subdivisions, other
states, federal agencies, or nongovernmental persons, institutions, or
commissions;
(5) serve as the state liaison with the United States Bureau of
the Census, coordinate state and federal demographic activities to the fullest
extent possible, and aid the legislature in preparing a census data plan and
form for each decennial census;
(6) compile an annual study of population estimates on the
basis of county, regional, or other political or geographical subdivisions as
necessary to carry out the purposes of this section and section 4A.03;
(7) by January 1 of each year, issue a report to the
legislature containing an analysis of the demographic implications of the
annual population study and population projections;
(8) prepare maps for all counties in the state, all
municipalities with a population of 10,000 or more, and other municipalities as
needed for census purposes, according to scale and detail recommended by the
United States Bureau of the Census, with the maps of cities showing precinct
boundaries;
(9) prepare an estimate of population and of the number of
households for each governmental subdivision for which the Metropolitan Council
does not prepare an annual estimate, and convey the estimates to the governing
body of each political subdivision by May June 1 of each year;
(10) direct, under section 414.01, subdivision 14, and certify
population and household estimates of annexed or detached areas of
municipalities or towns after being notified of the order or letter of approval
by the director;
(11) prepare, for any purpose for which a population estimate
is required by law or needed to implement a law, a population estimate of a
municipality or town whose population is affected by action under section
379.02 or 414.01, subdivision 14; and
(12) prepare an estimate of average household size for each
statutory or home rule charter city with a population of 2,500 or more by May
June 1 of each year.
(c) A governing body may challenge an estimate made under
paragraph (b) by filing their specific objections in writing with the state
demographer by June 10 24.
If the challenge does not result in an acceptable estimate by June 24,
the governing body may have a special census conducted by the United States
Bureau of the Census. The political
subdivision must notify the state demographer by July 1 of its intent to have
the special census conducted. The
political subdivision must bear all costs of the special census. Results of the special census must be received
by the state demographer by the next April 15 to be used in that year's May
June 1 estimate to the political subdivision under paragraph (b).
(d) The state demographer shall certify the estimates of
population and number of households to the commissioner of revenue by July 15
each year, including any estimates still under objection. No changes in population or household
estimates made after July 15 in an aid calculation year shall be considered in
determining aids under sections 477A.011 to 477A.014. Clerical errors in certification or use of the estimates and
counts established as of July 15 in the aid calculation year are subject to
correction under section 477A.014.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 2. Minnesota
Statutes 2003 Supplement, section 168A.05, subdivision 1a, is amended to read:
Subd. 1a. [MANUFACTURED
HOME; STATEMENT OF PROPERTY TAX PAYMENT.] In the case of a manufactured home as
defined in section 327.31, subdivision 6, the department shall not issue a
certificate of title unless the application under section 168A.04 is
accompanied with a statement from the county auditor or county treasurer where
the manufactured home is presently located, stating that all manufactured home
personal property taxes levied on the unit in the name of the current owner at
the time of transfer have been paid. For
this purpose, manufactured home personal property taxes are treated as levied
on January 1 of the payable year.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 3. Minnesota
Statutes 2002, section 270B.12, subdivision 9, is amended to read:
Subd. 9. [COUNTY
ASSESSORS; HOMESTEAD APPLICATION, DETERMINATION, AND INCOME TAX STATUS.]
(a) If, as a result of an audit, the commissioner determines that a
person is a Minnesota nonresident or part-year resident for income tax
purposes, the commissioner may disclose the person's name, address, and Social
Security number to the assessor of any political subdivision in the state, when
there is reason to believe that the person may have claimed or received
homestead property tax benefits for a corresponding assessment year in regard
to property apparently located in the assessor's jurisdiction.
(b) To the extent permitted by section 273.124, subdivision 1,
paragraph (a), the Department of Revenue may verify to a county assessor
whether an individual who is requesting or receiving a homestead classification
has filed a Minnesota income tax return as a resident for the most recent
taxable year for which the information is available.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 4. Minnesota
Statutes 2002, section 272.01, subdivision 2, is amended to read:
Subd. 2. (a) When any
real or personal property which is exempt from ad valorem taxes, and taxes in
lieu thereof, is leased, loaned, or otherwise made available and used by a
private individual, association, or corporation in connection with a business
conducted for profit, there shall be imposed a tax, for the privilege of so
using or possessing such real or personal property, in the same amount and to
the same extent as though the lessee or user was the owner of such property.
(b) The tax imposed by this subdivision shall not apply to:
(1) property leased or used as a concession in or relative to
the use in whole or part of a public park, market, fairgrounds, port authority,
economic development authority established under chapter 469, municipal
auditorium, municipal parking facility, municipal museum, or municipal stadium;
(2) property of an airport owned by a city, town, county, or
group thereof which is:
(i) leased to or used by any person or entity including a fixed
base operator; and
(ii) used as a hangar for the storage or repair of aircraft or
to provide aviation goods, services, or facilities to the airport or general
public;
the exception from taxation
provided in this clause does not apply to:
(i) property located at an airport owned or operated by the
Metropolitan Airports Commission or by a city of over 50,000 population
according to the most recent federal census or such a city's airport authority;
(ii) hangars leased by a private individual, association, or
corporation in connection with a business conducted for profit other than an
aviation-related business; or
(iii) facilities leased by a private individual, association,
or corporation in connection with a business for profit, that consists of a
major jet engine repair facility financed, in whole or part, with the proceeds
of state bonds and located in a tax increment financing district;
(3) property constituting or used as a public pedestrian ramp
or concourse in connection with a public airport; or
(4) property constituting or used as a passenger check-in area
or ticket sale counter, boarding area, or luggage claim area in connection with
a public airport but not the airports owned or operated by the Metropolitan
Airports Commission or cities of over 50,000 population or an airport authority
therein. Real estate owned by a
municipality in connection with the operation of a public airport and leased or
used for agricultural purposes is not exempt;
(5) property leased, loaned, or otherwise made available to
a private individual, corporation, or association under a cooperative farming
agreement made pursuant to section 97A.135; or
(6) property leased, loaned, or otherwise made available to
a private individual, corporation, or association under section 272.68,
subdivision 4.
(c) Taxes imposed by this subdivision are payable as in the case of
personal property taxes and shall be assessed to the lessees or users of real
or personal property in the same manner as taxes assessed to owners of real or
personal property, except that such taxes shall not become a lien against the
property. When due, the taxes shall
constitute a debt due from the lessee or user to the state, township, city,
county, and school district for which the taxes were assessed and shall be
collected in the same manner as personal property taxes. If property subject to the tax imposed by
this subdivision is leased or used jointly by two or more persons, each lessee
or user shall be jointly and severally liable for payment of the tax.
(d) The tax on real property of the state or any of its
political subdivisions that is leased by a private individual, association, or
corporation and becomes taxable under this subdivision or other provision of
law must be assessed and collected as a personal property assessment. The taxes do not become a lien against the
real property.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 5. Minnesota
Statutes 2002, section 272.02, subdivision 1a, is amended to read:
Subd. 1a. [LIMITATIONS
ON EXEMPTIONS.] The exemptions granted by subdivision 1 are subject to the
limits contained in the other subdivisions of this section, section 272.025, or
273.13, subdivision 25, paragraph (c), clause (1) or (2), or paragraph (d),
clause (2) and all other provisions of applicable law.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 6. Minnesota
Statutes 2002, section 272.02, subdivision 7, is amended to read:
Subd. 7. [INSTITUTIONS
OF PUBLIC CHARITY.] Institutions of purely public charity are exempt except
parcels of property containing structures and the structures described in
section 273.13, subdivision 25, paragraph (e), other than those that qualify
for exemption under subdivision 26.
In determining whether rental housing property qualifies for
exemption under this subdivision, the following are not gifts or donations to
the owner of the rental housing:
(1) rent assistance provided by the government to or on
behalf of tenants, and
(2) financing assistance or tax credits provided by the
government to the owner on condition that specific units or a specific quantity
of units be set aside for persons or families with certain income
characteristics.
[EFFECTIVE DATE.] This
section is effective for taxes payable in 2004 and thereafter.
Sec. 7. Minnesota
Statutes 2002, section 272.02, is amended by adding a subdivision to read:
Subd. 68.
[PROPERTY SUBJECT TO TACONITE PRODUCTION TAX OR NET PROCEEDS TAX.] (a)
Except for mineral interests taxed under section 273.165, and except for lands
taxed under section 298.26, real and personal property described in section
298.25 is exempt to the extent the tax on taconite and iron sulphides under
section 298.24 is described in section 298.25 as being in lieu of other taxes
on such property. This exemption
applies for taxes payable in each year that the tax under section 298.24 is
payable with respect to such property.
(b) Except for mineral interests taxed under section
273.165, deposits of mineral, metal, or energy resources the mining of which is
subject to taxation under section 298.015 are exempt. This exemption applies for taxes payable in each year that the
tax under section 298.015 is payable with respect to such property.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 8.
Minnesota Statutes 2002, section 272.02, is amended by adding a
subdivision to read:
Subd. 69.
[RELIGIOUS CORPORATIONS.] Personal and real property that a religious
corporation, formed under section 317A.909, necessarily uses for a religious
purpose is exempt to the extent provided in section 317A.909, subdivision 3.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 9. Minnesota
Statutes 2002, section 272.02, is amended by adding a subdivision to read:
Subd. 70. [CHILDREN'S HOMES.] Personal and real property owned by a
corporation formed under section 317A.907 is exempt to the extent provided in
section 317A.907, subdivision 7.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 10. Minnesota
Statutes 2002, section 272.02, is amended by adding a subdivision to read:
Subd. 71.
[HOUSING AND REDEVELOPMENT AUTHORITY AND TRIBAL HOUSING AUTHORITY
PROPERTY.] Property owned by a housing and redevelopment authority described
in chapter 469, or by a designated housing authority described in section
469.040, subdivision 5, is exempt to the extent provided in chapter 469.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 11. Minnesota
Statutes 2002, section 273.124, subdivision 8, is amended to read:
Subd. 8. [HOMESTEAD
OWNED BY OR LEASED TO FAMILY FARM CORPORATION, JOINT FARM VENTURE, LIMITED
LIABILITY COMPANY, OR PARTNERSHIP.] (a) Each family farm corporation, each;
each joint family farm venture,; and each limited liability
company, and each or partnership operating which
operates a family farm; is entitled to class 1b under section
273.13, subdivision 22, paragraph (b), or class 2a assessment for one homestead
occupied by a shareholder, member, or partner thereof who is residing on the
land, and actively engaged in farming of the land owned by the family farm
corporation, joint family farm venture, limited liability company, or
partnership operating a family farm.
Homestead treatment applies even if legal title to the property is in
the name of the family farm corporation, joint family farm venture, limited
liability company, or partnership operating the family farm, and not in
the name of the person residing on it.
"Family farm corporation," "family farm,"
and "partnership operating a family farm" have the meanings given in
section 500.24, except that the number of allowable shareholders, members, or
partners under this subdivision shall not exceed 12. "Limited liability company" has the meaning contained
in sections 322B.03, subdivision 28, and 500.24, subdivision 2, paragraphs (l)
and (m). "Joint family farm
venture" means a cooperative agreement among two or more farm enterprises
authorized to operate a family farm under section 500.24.
(b) In addition to property specified in paragraph (a), any
other residences owned by family farm corporations, joint family farm ventures,
limited liability companies, or partnerships operating a family farm
described in paragraph (a) which are located on agricultural land and occupied
as homesteads by its shareholders, members, or partners who are actively
engaged in farming on behalf of that corporation, joint farm venture, limited
liability company, or partnership must also be assessed as class 2a property or
as class 1b property under section 273.13.
(c) Agricultural property that is owned by a member, partner,
or shareholder of a family farm corporation or joint family farm venture,
limited liability company operating a family farm, or by a partnership
operating a family farm and leased to the family farm corporation, limited
liability company, farm
venture, as defined in paragraph (a), is eligible for classification as class
1b or class 2a under section 273.13, if the owner is actually residing on the
property, and is actually engaged in farming the land on behalf of that
corporation, joint farm venture, limited liability company, or
partnership. This paragraph applies
without regard to any legal possession rights of the family farm corporation,
joint family farm venture, limited liability company, or partnership or partnership operating a family farm, or
joint operating
a family farm under the lease.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 12. Minnesota
Statutes 2002, section 273.19, subdivision 1a, is amended to read:
Subd. 1a. For purposes
of this section, a lease includes any agreement, except a cooperative
farming agreement pursuant to section 97A.135, subdivision 3, or a lease executed
pursuant to section 272.68, subdivision 4, permitting a nonexempt person or
entity to use the property, regardless of whether the agreement is
characterized as a lease. A lease has a
"term of at least one year" if the term is for a period of less than one
year and the lease permits the parties to renew the lease without requiring
that similar terms for leasing the property will be offered to other applicants
or bidders through a competitive bidding or other form of offer to potential
lessees or users.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 13. Minnesota
Statutes 2002, section 274.14, is amended to read:
274.14 [LENGTH OF SESSION; RECORD.]
The county board of equalization or the special board of equalization
appointed by it shall meet during the last ten meeting days in June. For this purpose, "meeting days"
are defined as any day of the week excluding Saturday and Sunday. The board
may meet on any ten consecutive meeting days in June, after the second Friday
in June, if. The actual
meeting dates are must be contained on the valuation notices
mailed to each property owner in the county under as provided in
section 273.121. For this purpose,
"meeting days" is defined as any day of the week excluding Saturday
and Sunday. 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.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 14. Minnesota
Statutes 2002, 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 September 20 October
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 the day following final enactment.
Sec. 15. Minnesota
Statutes 2002, section 275.07, subdivision 1, is amended to read:
Subdivision 1.
[CERTIFICATION OF LEVY.] (a) Except as provided under paragraph (b), the
taxes voted by cities, counties, school districts, and special districts shall
be certified by the proper authorities to the county auditor on or before five
working days after December 20 in each year.
A town must certify the levy adopted by the town board
to the county auditor by September 15 each year. If the town board modifies the levy at a special town meeting
after September 15, the town board must recertify its levy to the county
auditor on or before five working days after December 20. The taxes certified shall not be reduced
by the county auditor by the aid received under section 273.1398, subdivision
2, but shall be reduced by the county auditor by the aid received under section
273.1398, subdivision 3. If a city,
town, county, school district, or special district fails to certify its levy by
that date, its levy shall be the amount levied by it for the preceding year.
(b)(i) The taxes voted by counties under sections 103B.241,
103B.245, and 103B.251 shall be separately certified by the county to the
county auditor on or before five working days after December 20 in each year. The taxes certified shall not be reduced by
the county auditor by the aid received under section 273.1398, subdivisions 2
and 3. If a county fails to certify its
levy by that date, its levy shall be the amount levied by it for the preceding
year.
(ii) For purposes of the proposed property tax notice under
section 275.065 and the property tax statement under section 276.04, for the
first year in which the county implements the provisions of this paragraph, the
county auditor shall reduce the county's levy for the preceding year to reflect
any amount levied for water management purposes under clause (i) included in
the county's levy.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 16. Minnesota
Statutes 2002, section 275.07, subdivision 4, is amended to read:
Subd. 4. [REPORT TO
COMMISSIONER.] (a) On or before October 8 of each year, the county auditor
shall report to the commissioner of revenue the proposed levy certified by
local units of government under section 275.065, subdivision 1. If any taxing authorities have notified the
county auditor that they are in the process of negotiating an agreement for
sharing, merging, or consolidating services but that when the proposed levy was
certified under section 275.065, subdivision 1c, the agreement was not yet
finalized, the county auditor shall supply that information to the commissioner
when filing the report under this section and shall recertify the affected
levies as soon as practical after October 10.
(b) On or before January 15 of each year, the county auditor
shall report to the commissioner of revenue the final levy certified by local
units of government under subdivision 1.
(c) The levies must be reported in the manner prescribed by the
commissioner. The reports must show
a total levy and the amount of each special levy.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 17. Minnesota
Statutes 2003 Supplement, section 276.112, is amended to read:
276.112 [STATE PROPERTY TAXES; COUNTY TREASURER.]
On or before January 25 each year, for the period ending
December 31 of the prior year, and on or before two business days before
June 29 30 each year, for the period ending on the most recent
settlement day determined in section 276.09, and on or before December 2 each
year, for the period ending November 20, the county treasurer must make full
settlement with the county auditor according to sections 276.09, 276.10, and
276.111 for all receipts of state property taxes levied under section 275.025,
and must transmit those receipts to the commissioner of revenue by electronic
means.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 18.
Minnesota Statutes 2002, section 282.016, is amended to read:
282.016 [PROHIBITED PURCHASERS.]
No (a) A county auditor, county treasurer, county
attorney, court administrator of the district court, or county
assessor or, supervisor of assessments, or deputy or clerk
or an employee of such officer, and no a commissioner for
tax-forfeited lands or an assistant to such commissioner may,
must not become a purchaser, either personally or as an agent or
attorney for another person, of the properties offered for sale under the
provisions of this chapter, either personally, or as agent or attorney for
any other person, except that in the county for which the person
performs duties. A person prohibited
from purchasing property under this section must not directly or indirectly
have another person purchase it on behalf of the prohibited purchaser for the
prohibited purchaser's benefit or gain.
(b) Notwithstanding paragraph (a), such officer, deputy,
court administrator clerk, or employee or commissioner for
tax-forfeited lands or assistant to such commissioner may (1) purchase lands
owned by that official at the time the state became the absolute owner thereof
or (2) bid upon and purchase forfeited property offered for sale under the
alternate sale procedure described in section 282.01, subdivision 7a.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 19. Minnesota
Statutes 2002, section 282.21, is amended to read:
282.21 [FORM OF CONVEYANCE.]
When any sale has been made under sections 282.14 to 282.22,
upon payment in full of the purchase price, appropriate conveyance in fee in
such form as may be prescribed by the attorney general shall be issued by the
commissioner of finance to the purchaser or the purchaser's assigns and this
conveyance shall have the force and effect of a patent from the state.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 20. Minnesota
Statutes 2002, section 282.224, is amended to read:
282.224 [FORM OF CONVEYANCE.]
When any sale has been made under sections 282.221 to
282.226, upon payment in full of the purchase price, appropriate
conveyance in fee, in such form as may be prescribed by the attorney general,
shall be issued by the commissioner of natural resources to the purchaser or
the purchaser's assignee, and the conveyance shall have the force and effect of
a patent from the state.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 21. Minnesota
Statutes 2002, section 282.301, is amended to read:
282.301 [RECEIPTS FOR PAYMENTS.]
When any sale has been made under sections 282.012 and
282.241 to 282.324, the purchaser shall receive from the county auditor at
the time of repurchase a receipt, in such form as may be prescribed by the
attorney general. When the purchase
price of a parcel of land shall be paid in full, the following facts shall be
certified by the county auditor to the commissioner of revenue of the state of
Minnesota: the description of land, the
date of sale, the name of the purchaser or the purchaser's assignee, and the
date when the final installment of the purchase price was paid. Upon payment in full of the purchase price,
the purchaser or the assignee shall receive a quitclaim deed from the state, to be executed by the
commissioner of revenue. The deed must
be sent to the county auditor who shall have it recorded before it is forwarded
to the purchaser. Failure to make any
payment herein required shall constitute default and upon such default and
cancellation in accord with section 282.40, the right, title and interest of
the purchaser or the purchaser's heirs, representatives, or assigns in such
parcel shall terminate.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 22. [473.24]
[POPULATION ESTIMATES.]
(a) The Metropolitan Council shall prepare an estimate of
population and of the number of households for each city and town in the
metropolitan area annually and convey the estimates to the governing body of
each city or town by June 1 each year.
In the case of a city or town that is located partly within and partly
without the metropolitan area, the Metropolitan Council shall estimate the
proportion of the total population and number of households that reside within
the area. The Metropolitan Council may
prepare an estimate of the population and of the number of households for any
other political subdivision located in the metropolitan area.
(b) A governing body may challenge an estimate made under
this section by filing its specific objections in writing with the Metropolitan
Council by June 24. If the challenge
does not result in an acceptable estimate, the governing body may have a
special census conducted by the United States Bureau of the Census. The political subdivision must notify the
Metropolitan Council on or before July 1 of its intent to have the special
census conducted. The political
subdivision must bear all costs of the special census. Results of the special census must be
received by the Metropolitan Council by the next April 15 to be used in that
year's June 1 estimate under this section.
The Metropolitan Council shall certify the estimates of population and
number of households to the state demographer and to the commissioner of
revenue by July 15 each year, including any estimates still under objection.
(c) No changes in population or household estimates after
July 15 in an aid calculation year shall be considered in determining aids
under sections 477A.011 to 477A.014.
Clerical errors in certification or use of the estimates and counts
established as of July 15 in the aid calculation year are subject to correction
under section 477A.014.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 23. Minnesota Statutes
2002, section 473F.02, subdivision 7, is amended to read:
Subd. 7. [POPULATION.]
"Population" means the most recent estimate of the population of a
municipality made by the Metropolitan Council under section 473.24 and
filed with the commissioner of revenue as of July 1 15 of the
year in which a municipality's distribution net tax capacity is
calculated. The council shall
annually estimate the population of each municipality as of a date which it
determines and, in the case of a municipality which is located partly within
and partly without the area, the proportion of the total which resides within
the area, and shall promptly thereafter file its estimates with the
commissioner of revenue.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 24. Minnesota
Statutes 2002, section 477A.011, subdivision 3, is amended to read:
Subd. 3. [POPULATION.]
"Population" means the population estimated or established as
of July this subdivision. No changes in population will be
recognized for the purposes of sections 477A.011 to 477A.014 after July 15 of
the aid calculation year. Clerical
errors in the certification or use of the estimates and counts established as
of July 15 in the aid calculation year are subject to correction within the
time periods allowed under section 477A.014. 1 15 in an aid calculation year by the most recent
federal census, by a special census conducted under contract with the United
States Bureau of the Census, by a population estimate made by the Metropolitan
Council, or by a population estimate of the state demographer made pursuant to
section 4A.02, whichever is the most recent as to the stated date of the count
or estimate for the preceding calendar year, and which has been certified to
the commissioner of revenue on or before July 15 of the aid calculation year. The term "per capita" refers to
population as defined by
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 25. Minnesota
Statutes 2003 Supplement, section 477A.011, subdivision 36, 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) Beginning in 2004, the city aid base for a city is equal
to the sum of its city aid base in 2003 and the amount of additional aid it was
certified to receive under section 477A.06 in 2003. For 2004 only, the maximum amount of total aid a city may receive
under section 477A.013, subdivision 9, paragraph (c), is also increased by the
amount it was certified to receive under section 477A.06 in 2003.
(g) 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.
(h) (g) 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.
(i) (h) 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.
(j) (i) 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.
(k) (j) 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.
(l) (k) 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.
(m) (l) 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.
(n) (m) 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.
(o) (n) The city aid base for a city is increased
by $150,000 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 $150,000 in calendar year 2002 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.
(p) (o) 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.
(q) (p) 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.
(r) (q) 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.
[EFFECTIVE DATE.] This
section is effective beginning with aids payable in 2004.
Sec. 26.
Minnesota Statutes 2003 Supplement, section 477A.03, subdivision 2b, is
amended to read:
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. 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 $500,000 is appropriated from the general fund for this
purpose 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 for section 477A.0124, subdivision 1. 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 and thereafter, the total aids
under section 477A.0124, subdivision 4, are limited to $105,000,000. 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. For aids payable in 2004, $214,000 is appropriated from the
general fund for this purpose. For aids
payable in 2005 and thereafter, the commissioner of revenue shall deduct
the amounts billed under this paragraph from the appropriation under this paragraph
section for section 477A.0124, subdivision 4. The amounts deducted are appropriated to the commissioner of
finance and the commissioner of education for the preparation of local impact
notes.
[EFFECTIVE DATE.] This
section is effective for aids payable in 2004 and thereafter.
Sec. 27. Laws 2003,
First Special Session chapter 21, article 5, section 13, is amended to read:
Sec. 13. [2004 CITY AID
REDUCTIONS.]
The commissioner of revenue shall compute an aid reduction
amount for 2004 for each city as provided in this section.
The initial aid reduction amount for each city is the amount by
which the city's aid distribution under Minnesota Statutes, section 477A.013,
and related provisions payable in 2003 exceeds the city's 2004 distribution
under those provisions.
The minimum aid reduction amount for a city is the amount of
its reduction in 2003 under section 12.
If a city receives an increase to its city aid base under Minnesota
Statutes, section 477A.011, subdivision 36, its minimum aid reduction is
reduced by an equal amount.
The maximum aid reduction amount for a city is an amount equal
to 14 percent of the city's total 2004 levy plus aid revenue base, except that
if the city has a city net tax capacity for aids payable in 2004, as defined in
Minnesota Statutes, section 477A.011, subdivision 20, of $700 per capita or
less, the maximum aid reduction shall not exceed an amount equal to 13 percent
of the city's total 2004 levy plus aid revenue base.
If the initial aid reduction amount for a city is less than the
minimum aid reduction amount for that city, the final aid reduction amount for
the city is the sum of the initial aid reduction amount and the lesser of the
amount of the city's payable 2004 reimbursement under Minnesota Statutes,
section 273.1384, or the difference between the minimum and initial aid
reduction amounts for the city, and the amount of the final aid reduction in
excess of the initial aid reduction is deducted from the city's reimbursements
pursuant to Minnesota Statutes, section 273.1384.
If the initial aid reduction amount for a city
is greater than the maximum aid reduction amount for the city, the city
receives an additional distribution under this section equal to the result of
subtracting the maximum aid reduction amount from the initial aid reduction
amount. This distribution shall be paid
in equal installments in 2004 on the dates specified in Minnesota Statutes,
section 477A.015. The amount necessary
for these additional distributions is appropriated to the commissioner of
revenue from the general fund in fiscal year 2005.
The initial aid reduction is applied to the city's
distribution pursuant to Minnesota Statutes, section 477A.013, and any aid
reduction in excess of the initial aid reduction is applied to the city's
reimbursements pursuant to Minnesota Statutes, section 273.1384.
To the extent that sufficient information is available on each
payment date in 2004, the commissioner of revenue shall pay the reimbursements
reduced under this section in equal installments on the payment dates provided
in law.
[EFFECTIVE DATE.] This
section is effective for aids payable in 2004.
Sec. 28. Laws 2003,
First Special Session chapter 21, article 6, section 9, is amended to read:
Sec. 9. [DEFINITIONS.]
(a) For purposes of sections 9 to 15, the following terms have
the meanings given them in this section.
(b) The 2003 and 2004 "levy plus aid revenue base"
for a county is the sum of that county's certified property tax levy for taxes
payable in 2003, plus the sum of the amounts the county was certified to
receive in the designated calendar year as:
(1) homestead and agricultural credit aid under Minnesota
Statutes, section 273.1398, subdivision 2, plus any additional aid under
section 16, minus the amount calculated under section 273.1398, subdivision 4a,
paragraph (b), for counties in judicial districts one, three, six, and ten, and
25 percent of the amount calculated under section 273.1398, subdivision 4a,
paragraph (b), for counties in judicial districts two and four;
(2) the amount of county manufactured home homestead and
agricultural credit aid computed for the county for payment in 2003 under
section 273.166;
(3) criminal justice aid under Minnesota Statutes, section
477A.0121;
(4) family preservation aid under Minnesota Statutes, section
477A.0122;
(5) taconite aids under Minnesota Statutes, 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; and
(6) county program aid under section 477A.0124, exclusive of
the attached machinery aid component.
[EFFECTIVE DATE.] This
section is effective for aids payable in 2004.
Sec. 29. [REPEALER.]
Minnesota Statutes 2002, sections 273.19, subdivision 5;
274.05; 275.15; and 283.07, are repealed effective the day following final
enactment.
ARTICLE
4
SALES
AND USE TAXES TECHNICAL
Section 1. Minnesota
Statutes 2002, section 289A.38, subdivision 6, is amended to read:
Subd. 6. [OMISSION IN
EXCESS OF 25 PERCENT.] Additional taxes may be assessed within 6-1/2 years
after the due date of the return or the date the return was filed, whichever is
later, if:
(1) the taxpayer omits from gross income an amount properly
includable in it that is in excess of 25 percent of the amount of gross income
stated in the return;
(2) the taxpayer omits from a sales, use, or withholding
tax return an amount of taxes in excess of 25 percent of the taxes
reported in the return; or
(3) the taxpayer omits from the gross estate assets in excess
of 25 percent of the gross estate reported in the return.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 2. Minnesota
Statutes 2003 Supplement, section 289A.40, subdivision 2, is amended to read:
Subd. 2. [BAD DEBT
LOSS.] If a claim relates to an overpayment because of a failure to deduct a loss
due to a bad debt or to a security becoming worthless, the claim is considered
timely if filed within seven years from the date prescribed for the filing of
the return. A claim relating to an
overpayment of taxes under chapter 297A must be filed within 3-1/2 years from
the date prescribed for filing the return, plus any extensions granted for
filing the return, but only if filed within the extended time. The refund or credit is limited to the
amount of overpayment attributable to the loss. "Bad debt" for purposes of this subdivision, has the
same meaning as that term is used in United States Code, title 26, section 166,
except that for a claim relating to an overpayment of taxes under chapter
297A the following are excluded from the calculation of bad debt: financing charges or interest; sales or use
taxes charged on the purchase price; uncollectible amounts on property that
remain in the possession of the seller until the full purchase price is paid;
expenses incurred in attempting to collect any debt; and repossessed property.
[EFFECTIVE DATE.] For
claims relating to an overpayment of taxes under chapter 297A, this section is
effective for sales and purchases made on or after January 1, 2004; for all
other bad debts or claims, this section is effective on or after July 1, 2003.
Sec. 3. Minnesota
Statutes 2003 Supplement, section 297A.668, subdivision 1, is amended to read:
Subdivision 1. [
APPLICABILITY.] The provisions of this section apply regardless of the
characterization of a product as tangible personal property, a digital good, or
a service; but do not apply to telecommunications services, or the sales
of motor vehicles, watercraft, aircraft, modular homes, manufactured homes,
or mobile homes. These provisions
only apply to determine a seller's obligation to pay or collect and remit a
sales or use tax with respect to the seller's sale of a product. These provisions do not affect the
obligation of a seller as purchaser to remit tax on the use of the product.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 4.
Minnesota Statutes 2003 Supplement, section 297A.668, subdivision 3, is
amended to read:
Subd. 3. [LEASE OR
RENTAL OF TANGIBLE PERSONAL PROPERTY.] The lease or rental of tangible personal
property, other than property identified in subdivision 4 or 5, shall be
sourced as required in paragraphs (a) to (c).
(a) For a lease or rental that requires recurring periodic
payments, the first periodic payment is sourced the same as a retail sale in
accordance with the provisions of subdivision 6 2. Periodic payments made subsequent to the
first payment are sourced to the primary property location for each period
covered by the payment. The primary
property location must be as indicated by an address for the property provided
by the lessee that is available to the lessor from its records maintained in
the ordinary course of business, when use of this address does not constitute
bad faith. The property location must
not be altered by intermittent use at different locations, such as use of
business property that accompanies employees on business trips and service
calls.
(b) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail sale in
accordance with the provisions of subdivision 2.
(c) This subdivision does not affect the imposition or
computation of sales or use tax on leases or rentals based on a lump sum or
accelerated basis, or on the acquisition of property for lease.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 5. Minnesota
Statutes 2003 Supplement, section 297A.668, subdivision 5, is amended to read:
Subd. 5.
[TRANSPORTATION EQUIPMENT.] (a) The retail sale, including lease or
rental, of transportation equipment shall be sourced the same as a retail sale
in accordance with the provisions of subdivision 2, notwithstanding the
exclusion of lease or rental in subdivision 2.
(b) "Transportation equipment" means any of the
following:
(1) locomotives and railcars that are utilized for the carriage
of persons or property in interstate commerce; and/or
(2) trucks and truck-tractors with a gross vehicle weight
rating (GVWR) of 10,001 pounds or greater, trailers, semitrailers, or passenger
buses that are:
(i) registered through the international registration plan; and
(ii) operated under authority of a carrier authorized and
certified by the United States Department of Transportation or another federal
authority to engage in the carriage of persons or property in interstate
commerce;
(3) aircraft that are operated by air carriers authorized
and certificated by the United States Department of Transportation or another
federal or a foreign authority to engage in the carriage of persons or property
in interstate commerce; or
(4) containers designed for use on and component parts
attached or secured on the transportation equipment described in items (1)
through (3).
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 6. Minnesota Statutes
2003 Supplement, section 297A.669, subdivision 16, is amended to read:
Subd. 16. [SERVICE
ADDRESS.] "Service address," for purposes of this section, means:
(1) the location of the telecommunications equipment to which a
customer's call is charged and from which the call originates or terminates,
regardless of where the call is billed or paid;
(2) if the location in paragraph (a) (1) is not
known, service address means the origination point of the signal of the
telecommunications services first identified by either the seller's
telecommunications system or in information received by the seller from its
service provider, where the system used to transport the signals is not that of
the seller; or
(3) if the location in paragraphs (a) (1) and (b)
(2) is not known, the service address means the location of the
customer's place of primary use.
[EFFECTIVE DATE.] This
section is effective for sales and purchases made on or after January 1, 2004.
Sec. 7. Minnesota
Statutes 2003 Supplement, section 297A.68, subdivision 2, is amended to read:
Subd. 2. [MATERIALS
CONSUMED IN INDUSTRIAL PRODUCTION.] (a) Materials stored, used, or consumed in
industrial production of personal property intended to be sold ultimately at
retail are exempt, whether or not the item so used becomes an ingredient or
constituent part of the property produced.
Materials that qualify for this exemption include, but are not limited
to, the following:
(1) chemicals, including chemicals used for cleaning food
processing machinery and equipment;
(2) materials, including chemicals, fuels, and electricity
purchased by persons engaged in industrial production to treat waste generated
as a result of the production process;
(3) fuels, electricity, gas, and steam used or consumed in the
production process, except that electricity, gas, or steam used for space
heating, cooling, or lighting is exempt if (i) it is in excess of the average
climate control or lighting for the production area, and (ii) it is necessary
to produce that particular product;
(4) petroleum products and lubricants;
(5) packaging materials, including returnable containers used
in packaging food and beverage products;
(6) accessory tools, equipment, and other items that are
separate detachable units with an ordinary useful life of less than 12 months
used in producing a direct effect upon the product; and
(7) the following materials, tools, and equipment used in
metalcasting: crucibles, thermocouple
protection sheaths and tubes, stalk tubes, refractory materials, molten metal
filters and filter boxes, degassing lances, and base blocks.
(b) This exemption does not include:
(1) machinery, equipment, implements, tools, accessories,
appliances, contrivances and furniture and fixtures, except those listed in
paragraph (a), clause (6); and
(2) petroleum and special fuels used in producing or generating
power for propelling ready-mixed concrete trucks on the public highways of this
state.
(c) Industrial production includes, but is not limited to,
research, development, design or production of any tangible personal property,
manufacturing, processing (other than by restaurants and consumers) of agricultural
products (whether vegetable or animal), commercial fishing, refining, smelting,
reducing, brewing, distilling, printing, mining, quarrying, lumbering,
generating electricity, the production of road building materials, and the
research, development, design, or production of computer software. Industrial production does not include
painting, cleaning, repairing or similar processing of property except as part
of the original manufacturing process. Industrial
production does not include the furnishing of services listed in section
297A.61, subdivision 3, paragraph (g), clause (6), items (i) to (vi) and
(viii).
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 8. Minnesota
Statutes 2003 Supplement, section 297A.68, subdivision 5, is amended to read:
Subd. 5. [CAPITAL
EQUIPMENT.] (a) Capital equipment is 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.
"Capital equipment" means machinery and equipment
purchased or leased, and used in this state by the purchaser or lessee
primarily for manufacturing, fabricating, mining, or refining tangible personal
property to be sold ultimately at retail if the machinery and equipment are
essential to the integrated production process of manufacturing, fabricating,
mining, or refining. Capital equipment
also includes machinery and equipment used primarily to electronically
transmit results retrieved by a customer of an on-line computerized data
retrieval system.
(b) Capital equipment includes, but is not limited to:
(1) machinery and equipment used to operate, control, or
regulate the production equipment;
(2) machinery and equipment used for research and development,
design, quality control, and testing activities;
(3) environmental control devices that are used to maintain
conditions such as temperature, humidity, light, or air pressure when those
conditions are essential to and are part of the production process;
(4) materials and supplies used to construct and install
machinery or equipment;
(5) repair and replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades or modifications
to machinery or equipment;
(6) materials used for foundations that support machinery or
equipment;
(7) materials used to construct and install special purpose
buildings used in the production process;
(8) ready-mixed concrete equipment in which the ready-mixed
concrete is mixed as part of the delivery process regardless if mounted on a
chassis and leases of ready-mixed concrete trucks; and
(9) machinery or equipment used for research, development,
design, or production of computer software.
(c) Capital equipment does not include the following:
(1) motor vehicles taxed under chapter 297B;
(2) machinery or equipment used to receive or store raw
materials;
(3) building materials, except for materials included in paragraph
(b), clauses (6) and (7);
(4) machinery or equipment used for nonproduction purposes,
including, but not limited to, the following:
plant security, fire prevention, first aid, and hospital stations;
support operations or administration; pollution control; and plant cleaning, disposal
of scrap and waste, plant communications, space heating, cooling, lighting, or
safety;
(5) farm machinery and aquaculture production equipment as
defined by section 297A.61, subdivisions 12 and 13;
(6) machinery or equipment
purchased and installed by a contractor as part of an improvement to real
property; or
(7) machinery and equipment used by restaurants in the
furnishing, preparing, or serving of prepared foods as defined in section
297A.61, subdivision 31;
(8) machinery and equipment used to furnish the services
listed in section 297A.61, subdivision 3, paragraph (g), clause (6), items (i)
to (vi) and (viii); or
(9) any other item that is not essential to the
integrated process of manufacturing, fabricating, mining, or refining.
(d) For purposes of this subdivision:
(1) "Equipment" means independent devices or tools
separate from machinery but essential to an integrated production process,
including computers and computer software, used in operating, controlling, or
regulating machinery and equipment; and any subunit or assembly comprising a
component of any machinery or accessory or attachment parts of machinery, such
as tools, dies, jigs, patterns, and molds.
(2) "Fabricating" means to make, build, create,
produce, or assemble components or property to work in a new or different
manner.
(3) "Integrated production process" means a process
or series of operations through which tangible personal property is
manufactured, fabricated, mined, or refined.
For purposes of this clause, (i) manufacturing begins with the removal
of raw materials from inventory and ends when the last process prior to loading
for shipment has been completed; (ii) fabricating begins with the removal from
storage or inventory of the property to be assembled, processed, altered, or
modified and ends with the creation or production of the new or changed
product; (iii) mining begins with the removal of overburden from the site of
the ores, minerals, stone, peat deposit, or surface materials and ends when the
last process before stockpiling is completed; and (iv) refining begins with the
removal from inventory or storage of a natural resource and ends with the
conversion of the item to its completed form.
(4) "Machinery" means mechanical, electronic, or electrical
devices, including computers and computer software, that are purchased or
constructed to be used for the activities set forth in paragraph (a), beginning
with the removal of raw materials from inventory through completion of the
product, including packaging of the product.
(5) "Machinery and equipment used for pollution
control" means machinery and equipment used solely to eliminate, prevent,
or reduce pollution resulting from an activity described in paragraph (a).
(6) "Manufacturing" means an operation or series of
operations where raw materials are changed in form, composition, or condition
by machinery and equipment and which results in the production of a new article
of tangible personal property. For
purposes of this subdivision, "manufacturing" includes the generation
of electricity or steam to be sold at retail.
(7) "Mining" means the extraction of minerals, ores,
stone, or peat.
(8) "On-line data retrieval system" means a system
whose cumulation of information is equally available and accessible to all its
customers.
(9) "Primarily" means machinery and equipment used 50
percent or more of the time in an activity described in paragraph (a).
(10) "Refining" means the process of converting a
natural resource to an intermediate or finished product, including the
treatment of water to be sold at retail.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 9. Minnesota
Statutes 2003 Supplement, section 297A.68, subdivision 39, is amended to read:
Subd. 39. [PREEXISTING
BIDS OR CONTRACTS.] (a) The sale of tangible personal property or services is
exempt from tax or a tax rate increase for a period of six months from
the effective date of the law change that results in the imposition of the tax or
the tax rate increase under this chapter if:
(1) the act imposing the tax or increasing the tax rate
does not have transitional effective date language for existing construction
contracts and construction bids; and
(2) the requirements of paragraph (b) are met.
(b) A sale is tax exempt under paragraph (a) if it meets the
requirements of either clause (1) or (2):
(1) For a construction contract:
(i) the goods or services sold must be used for the performance
of a bona fide written lump sum or fixed price construction contract;
(ii) the contract must be entered into before the date the
goods or services become subject to the sales tax or the tax rate was
increased;
(iii) the contract must not provide for allocation of future
taxes; and
(iv) for each qualifying contract the contractor must give the
seller documentation of the contract on which an exemption is to be claimed.
(2) For a construction bid:
(i) the goods or services sold must be used pursuant to an
obligation of a bid or bids;
(ii) the bid or bids must be submitted and accepted before the
date the goods or services became subject to the sales tax or the tax rate
was increased;
(iii) the bid or bids must not be able to be withdrawn,
modified, or changed without forfeiting a bond; and
(iv) for each qualifying bid, the contractor must give the
seller documentation of the bid on which an exemption is to be claimed.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 10. [REPEALER.]
Minnesota Rules, parts 8130.0110, subpart 4; 8130.0200,
subparts 5 and 6; 8130.0400, subpart 9; 8130.1200, subparts 5 and 6; 8130.2900;
8130.3100, subpart 1; 8130.4000, subparts 1 and 2; 8130.4200, subpart 1;
8130.4400, subpart 3; 8130.5200; 8130.5600, subpart 3; 8130.5800, subpart 5;
8130.7300, subpart 5; and 8130.8800, subpart 4, are repealed.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
ARTICLE
5
SPECIAL
TAXES TECHNICAL
Section 1. Minnesota
Statutes 2002, section 287.04, is amended to read:
287.04 [EXEMPTIONS.]
The tax imposed by section 287.035 does not apply to:
(a) A decree of marriage dissolution or an instrument made
pursuant to it.
(b) A mortgage given to correct a misdescription of the
mortgaged property.
(c) A mortgage or other instrument that adds additional
security for the same debt for which mortgage registry tax has been paid.
(d) A contract for the conveyance of any interest in real
property, including a contract for deed.
(e) A mortgage secured by real property subject to the minerals
production tax of sections 298.24 to 298.28.
(f) The principal amount of a mortgage loan made under a low
and moderate income or other affordable housing program, if the mortgagee is a
federal, state, or local government agency.
(g) Mortgages granted by fraternal benefit societies subject to
section 64B.24.
(h) A mortgage amendment or extension, as defined in section
287.01.
(i) An agricultural mortgage if the proceeds of the loan
secured by the mortgage are used to acquire or improve real property classified
under section 273.13, subdivision 23, paragraph (a), or (b), clause (1), (2),
or (3).
(j) A mortgage on an armory building as set forth in section
193.147.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 2. Minnesota
Statutes 2002, section 295.50, subdivision 4, is amended to read:
Subd. 4. [HEALTH CARE
PROVIDER.] (a) "Health care provider" means:
(1) a person whose health care occupation is regulated or
required to be regulated by the state of Minnesota furnishing any or all of the
following goods or services directly to a patient or consumer: medical, surgical, optical, visual, dental,
hearing, nursing services, drugs, laboratory, diagnostic or therapeutic
services;
(2) a person who provides goods and services
not listed in clause (1) that qualify for reimbursement under the medical
assistance program provided under chapter 256B;
(3) a staff model health plan company;
(4) an ambulance service required to be licensed; or
(5) a person who sells or repairs hearing aids and related
equipment or prescription eyewear.
(b) Health care provider does not include:
(1) hospitals; medical supplies distributors, except as
specified under paragraph (a), clause (5); nursing homes licensed under chapter
144A or licensed in any other jurisdiction; pharmacies; surgical centers; bus
and taxicab transportation, or any other providers of transportation services
other than ambulance services required to be licensed; supervised living
facilities for persons with mental retardation or related conditions, licensed
under Minnesota Rules, parts 4665.0100 to 4665.9900; residential care homes
licensed under chapter 144B housing with services establishments
required to be registered under chapter 144D; board and lodging
establishments providing only custodial services that are licensed under
chapter 157 and registered under section 157.17 to provide supportive services
or health supervision services; adult foster homes as defined in Minnesota
Rules, part 9555.5105; day training and habilitation services for adults with
mental retardation and related conditions as defined in section 252.41,
subdivision 3; boarding care homes, as defined in Minnesota Rules, part
4655.0100; and adult day care centers as defined in Minnesota Rules, part
9555.9600;
(2) home health agencies as defined in Minnesota Rules, part
9505.0175, subpart 15; a person providing personal care services and
supervision of personal care services as defined in Minnesota Rules, part
9505.0335; a person providing private duty nursing services as defined in
Minnesota Rules, part 9505.0360; and home care providers required to be
licensed under chapter 144A;
(3) a person who employs health care providers solely for the
purpose of providing patient services to its employees; and
(4) an educational institution that employs health care
providers solely for the purpose of providing patient services to its students
if the institution does not receive fee for service payments or payments for
extended coverage.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 3. Minnesota
Statutes 2002, section 296A.22, is amended by adding a subdivision to read:
Subd. 9.
[ABATEMENT OF PENALTY.] (a) The commissioner may by written order
abate any penalty imposed under this section, if in the commissioner's opinion
there is reasonable cause to do so.
(b) A request for abatement of penalty must be filed with
the commissioner within 60 days of the date the notice stating that a penalty
has been imposed was mailed to the taxpayer's last known address.
(c) If the commissioner issues an order denying a request
for abatement of penalty, the taxpayer may file an administrative appeal as
provided in section 296A.25 or appeal to tax court as provided in section
271.06. If the commissioner does not
issue an order on the abatement request within 60 days from the date the request
is received, the taxpayer may appeal to tax court as provided in section
271.06.
[EFFECTIVE DATE.] This
section is effective for penalties imposed on or after the day following final
enactment.
Sec. 4.
Minnesota Statutes 2002, section 297E.01, subdivision 5, is amended to
read:
Subd. 5. [DISTRIBUTOR.]
"Distributor" means a distributor as defined in section 349.12,
subdivision 11, or a person or linked bingo game provider who markets,
sells, or provides gambling product to a person or entity for resale or use at
the retail level.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 5. Minnesota
Statutes 2002, section 297E.01, subdivision 7, is amended to read:
Subd. 7. [GAMBLING
PRODUCT.] "Gambling product" means bingo hard cards, bingo
paper, or sheets, or linked bingo paper sheets; pull-tabs;
tipboards; paddletickets and paddleticket cards; raffle tickets; or any other
ticket, card, board, placard, device, or token that represents a chance, for
which consideration is paid, to win a prize.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 6. Minnesota
Statutes 2002, section 297E.01, is amended by adding a subdivision to read:
Subd. 9a.
[LINKED BINGO GAME.] "Linked bingo game" means a bingo game
played at two or more locations where licensed organizations are authorized to
conduct bingo, when there is a common prize pool and a common selection of
numbers or symbols conducted at one location, and when the results of the
selection are transmitted to all participating locations by satellite,
telephone, or other means by a linked bingo game provider.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 7. Minnesota
Statutes 2002, section 297E.01, is amended by adding a subdivision to read:
Subd. 9b.
[LINKED BINGO GAME PROVIDER.] "Linked bingo game provider"
means any person who provides the means to link bingo prizes in a linked bingo
game, who provides linked bingo paper sheets to the participating
organizations, who provides linked bingo prize management, and who provides the
linked bingo game system.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 8. Minnesota
Statutes 2002, section 297E.07, is amended to read:
297E.07 [INSPECTION RIGHTS.]
At any reasonable time, without notice and without a search
warrant, the commissioner may enter a place of business of a manufacturer,
distributor, or organization, or linked bingo game provider; any
site from which pull-tabs or tipboards or other gambling equipment or gambling
product are being manufactured, stored, or sold; or any site at which lawful
gambling is being conducted, and inspect the premises, books, records, and
other documents required to be kept under this chapter to determine whether or
not this chapter is being fully complied with.
If the commissioner is denied free access to or is hindered or
interfered with in making an inspection of the place of business, books, or records,
the permit of the distributor may be revoked by the commissioner, and the
license of the manufacturer, the distributor, or the organization, or
linked bingo game provider may be revoked by the board.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 9.
Minnesota Statutes 2003 Supplement, section 297F.08, subdivision 12, is
amended to read:
Subd. 12. [CIGARETTES
IN INTERSTATE COMMERCE.] (a) A person may not transport or cause to be
transported from this state cigarettes for sale in another state without first
affixing to the cigarettes the stamp required by the state in which the
cigarettes are to be sold or paying any other excise tax on the cigarettes
imposed by the state in which the cigarettes are to be sold.
(b) A person may not affix to cigarettes the stamp required by
another state or pay any other excise tax on the cigarettes imposed by another
state if the other state prohibits stamps from being affixed to the cigarettes,
prohibits the payment of any other excise tax on the cigarettes, or prohibits
the sale of the cigarettes.
(c) Not later than 15 days after the end of each calendar
quarter, a person who transports or causes to be transported from this state
cigarettes for sale in another state shall submit to the commissioner a report
identifying the quantity and style of each brand of the cigarettes transported
or caused to be transported in the preceding calendar quarter, and the name and
address of each recipient of the cigarettes.
This reporting requirement only relates to cigarettes manufactured by
companies that are not original or subsequent participating manufacturers in
the Master Settlement Agreement with other states.
(d) For purposes of this section, "person" has the
meaning given in section 297F.01, subdivision 12. Person does not include any common or contract carrier, or public
warehouse that is not owned, in whole or in part, directly or indirectly by
such person, and does not include a manufacturer that has entered into is
an original or subsequent participating manufacturer in the Master
Settlement Agreement with other states.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 10. Minnesota
Statutes 2003 Supplement, section 297F.09, subdivision 1, is amended to read:
Subdivision 1. [MONTHLY
RETURN; CIGARETTE DISTRIBUTOR.] On or before the 18th day of each calendar
month, a distributor with a place of business in this state shall file a return
with the commissioner showing the quantity of cigarettes manufactured or
brought in from outside the state or purchased during the preceding calendar
month and the quantity of cigarettes sold or otherwise disposed of in this
state and outside this state during that month. A licensed distributor outside this state shall in like manner
file a return showing the quantity of cigarettes shipped or transported into
this state during the preceding calendar month. Returns must be made in the form and manner prescribed by the
commissioner and must contain any other information required by the commissioner. The return must be accompanied by a
remittance for the full unpaid tax liability shown by it. The return for the May liability and 85
percent of the estimated June liability is due on the date payment of the tax
is due. For distributors subject
to the accelerated tax payment requirements in subdivision 10, the return for
the May liability is due two business days before June 30th of the year and the
return for the June liability is due on or before August 18th of the year.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 11. Minnesota
Statutes 2003 Supplement, section 297F.09, subdivision 2, is amended to read:
Subd. 2. [MONTHLY
RETURN; TOBACCO PRODUCTS DISTRIBUTOR.] On or before the 18th day of each
calendar month, a distributor with a place of business in this state shall file
a return with the commissioner showing the quantity and wholesale sales price
of each tobacco product:
(1) brought, or caused to be brought, into this state for sale;
and
(2) made, manufactured, or fabricated in this state for sale in
this state, during the preceding calendar month.
Every
licensed distributor outside this state shall in like manner file a return
showing the quantity and wholesale sales price of each tobacco product shipped
or transported to retailers in this state to be sold by those retailers, during
the preceding calendar month. Returns
must be made in the form and manner prescribed by the commissioner and must contain
any other information required by the commissioner. The return must be accompanied by a remittance for the full tax
liability shown. The return for the
May liability and 85 percent of the estimated June liability is due on the date
payment of the tax is due. For
distributors subject to the accelerated tax payment requirements in subdivision
10, the return for the May liability is due two business days before June 30th
of the year and the return for the June liability is due on or before August
18th of the year.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 12. Minnesota
Statutes 2002, section 297I.01, is amended by adding a subdivision to read:
Subd. 13a.
[REINSURANCE.] "Reinsurance" is insurance whereby an
insurance company, for a consideration, agrees to indemnify another insurance
company against all or part of the loss which the latter may sustain under the
policy or policies which it has issued.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 13. Minnesota
Statutes 2002, section 297I.05, subdivision 4, is amended to read:
Subd. 4. [MUTUAL PROPERTY
AND CASUALTY COMPANIES WITH TOTAL ASSETS LESS THAN $1,600,000,000 ON
DECEMBER 31, 1989.] A tax is imposed on mutual property and casualty
companies that had total assets greater than $5,000,000 at the end of the
calendar year but that had total assets less than $1,600,000,000 on December
31, 1989. The rate of tax is equal to:
(1) two percent of gross premiums less return premiums on all
direct business received by the insurer or agents of the insurer in Minnesota
for life insurance, in cash or otherwise, during the year; and
(2) 1.26 percent of gross premiums less return premiums on all
other direct business received by the insurer or agents of the insurer in
Minnesota, in cash or otherwise, during the year.
[EFFECTIVE DATE.] This
section is effective for returns, taxes, surcharges, and estimated payments
required to be filed or paid for tax years beginning on or after January 1,
2004.
Sec. 14. Minnesota
Statutes 2002, section 297I.05, subdivision 5, is amended to read:
Subd. 5. [HEALTH
MAINTENANCE ORGANIZATIONS, NONPROFIT HEALTH SERVICE PLAN CORPORATIONS, AND
COMMUNITY INTEGRATED SERVICE NETWORKS.] (a) Health maintenance organizations,
community integrated service networks, and nonprofit health care service plan
corporations are exempt from the tax imposed under this section for premiums
received in calendar years 2001 to 2003.
(b) For calendar years after 2003, A tax is imposed on
health maintenance organizations, community integrated service networks, and
nonprofit health care service plan corporations. The rate of tax is equal to one percent of gross premiums less
return premiums on all direct business received by the organization,
network, or corporation or its agents in Minnesota, in cash or otherwise,
in the calendar year.
(c) In approving the premium rates as required in sections
62L.08, subdivision 8, and 62A.65, subdivision 3, the commissioners of health
and commerce shall ensure that any exemption from tax as described in paragraph
(a) is reflected in the premium rate.
(d) (b) The commissioner shall deposit all revenues,
including penalties and interest, collected under this chapter from health
maintenance organizations, community integrated service networks, and nonprofit
health service plan corporations in the health care access fund. Refunds of overpayments of tax imposed by
this subdivision must be paid from the health care access fund. There is annually appropriated from the
health care access fund to the commissioner the amount necessary to make any
refunds of the tax imposed under this subdivision.
[EFFECTIVE DATE.] This
section is effective January 1, 2004.
Sec. 15. [REPEALER.]
Minnesota Statutes 2002, section 297E.12, subdivision 10, is
repealed effective the day following final enactment.
ARTICLE
6
MISCELLANEOUS
TECHNICAL
Section 1. Minnesota
Statutes 2002, section 270.65, is amended to read:
270.65 [DATE OF ASSESSMENT; DEFINITION.]
For purposes of taxes administered by the commissioner, the
term "date of assessment" means the date a liability reported on a
return was entered into the records of the commissioner or the date a return
should have been filed, whichever is later; or, in the case of taxes determined
by the commissioner, "date of assessment" means the date of the order
assessing taxes or date of the return made by the commissioner; or, in the case
of an amended return filed by the taxpayer, the assessment date is the date
additional liability reported on the return, if any, was entered into the
records of the commissioner; or, in the case of a consent agreement signed
by the taxpayer under section 270.67, subdivision 3, the assessment date is the
notice date shown on the agreement; or, in the case of a check from a
taxpayer that is dishonored and results in an erroneous refund being given to
the taxpayer, remittance of the check is deemed to be an assessment and the
"date of assessment" is the date the check was received by the commissioner.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 2. Minnesota
Statutes 2003 Supplement, section 289A.19, subdivision 4, is amended to read:
Subd. 4. [ESTATE TAX
RETURNS.] When in the commissioner's judgment good cause exists, the
commissioner may extend the time for filing an estate tax return for not more
than six months. When an extension to file the federal estate tax return
has been granted under section 6081 of the Internal Revenue Code, the time for
filing the estate tax return is extended for that period. If the estate requests an extension to
file an estate tax return within the time provided in section 289A.18,
subdivision 3, the commissioner shall extend the time for filing the estate tax
return for six months.
[EFFECTIVE DATE.] This
section is effective for estates of decedents dying after December 31, 2003.
Sec. 3. Minnesota
Statutes 2002, section 289A.37, subdivision 5, is amended to read:
Subd. 5. [SUFFICIENCY
OF NOTICE.] An order of assessment, sent postage prepaid by United States mail
to the taxpayer at the taxpayer's last known address, or sent by electronic
mail to the taxpayer's last known electronic mailing address as provided for in
section 325L.08, is sufficient even if the taxpayer is deceased or is under
a legal disability, or, in the case of a corporation, has terminated its
existence, unless the department has been provided with a new address by a
party authorized to receive notices of assessment.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 4. Minnesota Statutes
2002, section 289A.60, subdivision 6, is amended to read:
Subd. 6. [PENALTY FOR FAILURE
TO FILE, FALSE OR FRAUDULENT RETURN, EVASION.] If a person, with intent
to evade or defeat a tax or payment of tax, fails to file a return, files a
false or fraudulent return, or attempts in any other manner to evade or
defeat a tax or payment of tax, there is imposed on the person a penalty equal
to 50 percent of the tax, less amounts paid by the person on the basis of the
false or fraudulent return, if any, due for the period to which the
return related.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 5. Minnesota
Statutes 2003 Supplement, section 290.01, subdivision 19a, 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 income taxes paid or accrued within the
taxable year under this chapter and income the amount of taxes based
on net income paid to any other state or to any province or territory of
Canada, 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 tax is the 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 income 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;
(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; and
(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.
[EFFECTIVE DATE.] This
section is effective for tax years beginning after December 31, 2003.
Sec. 6. Minnesota
Statutes 2002, section 290.06, subdivision 22, is amended to read:
Subd. 22. [CREDIT FOR
TAXES PAID TO ANOTHER STATE.] (a) A taxpayer who is liable for taxes based
on or measured by net income to another state, as provided in paragraphs
(b) through (f), upon income allocated or apportioned to Minnesota, is entitled
to a credit for the tax paid to another state if the tax is actually paid in
the taxable year or a subsequent taxable year.
A taxpayer who is a resident of this state pursuant to section 290.01,
subdivision 7, clause (2) paragraph (b), and who is subject to
income tax as a resident in the state of the individual's domicile is not
allowed this credit unless the state of domicile does not allow a similar
credit.
(b) For an individual, estate, or trust, the credit is
determined by multiplying the tax payable under this chapter by the ratio
derived by dividing the income subject to tax in the other state that is also
subject to tax in Minnesota while a resident of Minnesota by the taxpayer's
federal adjusted gross income, as defined in section 62 of the Internal Revenue
Code, modified by the addition required by section 290.01, subdivision 19a,
clause (1), and the subtraction allowed by section 290.01, subdivision 19b,
clause (1), to the extent the income is allocated or assigned to Minnesota
under sections 290.081 and 290.17.
(c) If the taxpayer is an athletic team that apportions all of
its income under section 290.17, subdivision 5, the credit is determined by
multiplying the tax payable under this chapter by the ratio derived from
dividing the total net income subject to tax in the other state by the
taxpayer's Minnesota taxable income.
(d) The credit determined under paragraph (b) or (c) shall not
exceed the amount of tax so paid to the other state on the gross income earned
within the other state subject to tax under this chapter, nor shall the
allowance of the credit reduce the taxes paid under this chapter to an amount
less than what would be assessed if such income amount was excluded from
taxable net income.
(e) In the case of the tax assessed on a lump sum distribution
under section 290.032, the credit allowed under paragraph (a) is the tax
assessed by the other state on the lump sum distribution that is also subject
to tax under section 290.032, and shall not exceed the tax assessed under
section 290.032. To the extent the
total lump sum distribution defined in section 290.032, subdivision 1, includes
lump sum distributions received in prior years or is all or in part an annuity
contract, the reduction to the tax on the lump sum distribution allowed under
section 290.032, subdivision 2, includes tax paid to another state that is
properly apportioned to that distribution.
(f) If a Minnesota resident reported an item of income to
Minnesota and is assessed tax in such other state on that same income after the
Minnesota statute of limitations has expired, the taxpayer shall receive a
credit for that year under paragraph (a), notwithstanding any statute of
limitations to the contrary. The claim
for the credit must be submitted within one year from the date the taxes were
paid to the other state. The taxpayer
must submit sufficient proof to show entitlement to a credit.
(g) For the purposes of this subdivision, a resident shareholder of
a corporation treated as an "S" corporation under section 290.9725,
must be considered to have paid a tax imposed on the shareholder in an amount
equal to the shareholder's pro rata share of any net income tax paid by the S
corporation to another state. For the
purposes of the preceding sentence, the term "net income tax" means
any tax imposed on or measured by a corporation's net income.
(h) For the purposes of this subdivision, a resident partner of
an entity taxed as a partnership under the Internal Revenue Code must be
considered to have paid a tax imposed on the partner in an amount equal to the
partner's pro rata share of any net income tax paid by the partnership to
another state. For purposes of the
preceding sentence, the term "net income" tax means any tax imposed
on or measured by a partnership's net income.
(i) For the purposes of this subdivision, "another
state":
(1) includes:
(i) the District of Columbia; and
(ii) a province or territory of Canada; but
(2) excludes Puerto Rico and the several territories organized
by Congress.
(j) The limitations on the credit in paragraphs (b), (c), and
(d), are imposed on a state by state basis.
(k) For a tax imposed by a province or territory of Canada, the
tax for purposes of this subdivision is the excess of the tax over the amount
of the foreign tax credit allowed under section 27 of the Internal Revenue
Code. In determining the amount of the
foreign tax credit allowed, the net income taxes imposed by Canada on the
income are deducted first. Any
remaining amount of the allowable foreign tax credit reduces the provincial or
territorial tax that qualifies for the credit under this subdivision.
[EFFECTIVE DATE.] This
section is effective for tax years beginning after December 31, 2003.
Sec. 7. Minnesota
Statutes 2003 Supplement, section 290.0674, subdivision 1, is amended to read:
Subdivision 1. [CREDIT
ALLOWED.] An individual is allowed a credit against the tax imposed by this
chapter in an amount equal to 75 percent of the amount paid for
education-related expenses for a qualifying child in kindergarten through grade
12. For purposes of this section,
"education-related expenses" means:
(1) fees or tuition for instruction by an instructor under
section 120A.22, subdivision 10, clause (1), (2), (3), (4), or (5), or a member
of the Minnesota Music Teachers Association, and who is not a lineal ancestor
or sibling of the dependent for instruction outside the regular school day or
school year, including tutoring, driver's education offered as part of school
curriculum, regardless of whether it is taken from a public or private entity
or summer camps, in grade or age appropriate curricula that supplement
curricula and instruction available during the regular school year, that
assists a dependent to improve knowledge of core curriculum areas or to expand
knowledge and skills under the graduation rule under section 120B.02,
paragraph (e), clauses (1) to (7), (9), and (10) required academic
standards under section 120B.021, subdivision 1, and the elective standard
under section 120B.022, subdivision 1, clause (3), and that do not include
the teaching of religious tenets, doctrines, or worship, the purpose of which
is to instill such tenets, doctrines, or worship;
(2) expenses for textbooks, including 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. "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
extracurricular activities including sporting events, musical or dramatic
events, speech activities, driver's education, or similar programs;
(3) a maximum expense of $200 per family for personal computer
hardware, excluding single purpose processors, and educational software that
assists a dependent to improve knowledge of core curriculum areas or to expand
knowledge and skills under the graduation rule under section 120B.02 required
academic standards under section 120B.021, subdivision 1, and the elective
standard under section 120B.022, subdivision 1, clause (3), purchased for
use in the taxpayer's home and not used in a trade or business regardless of
whether the computer is required by the dependent's school; and
(4) the amount paid to others for transportation of a
qualifying child 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 purposes of this section, "qualifying child" has
the meaning given in section 32(c)(3) of the Internal Revenue Code.
[EFFECTIVE DATE.] This
section is effective for tax years beginning after December 31, 2003.
Sec. 8. Minnesota
Statutes 2002, 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.
(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 legal control of the payment of the wages for
such services, the term "employer," except for purposes of paragraph
(1), means the person having legal 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 legal 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 the day following final enactment.
Sec. 9. Minnesota
Statutes 2002, section 290C.05, is amended to read:
290C.05 [ANNUAL CERTIFICATION.]
On or before July 1 of each year, beginning with the year after
the claimant has received an approved application, the commissioner shall send
each claimant enrolled under the sustainable forest incentive program a
certification form. The claimant must
sign the certification, attesting that the requirements and conditions for
continued enrollment in the program are currently being met, and must return
the signed certification form to the commissioner by August 15 of that same
year. Failure to If the
claimant does not return an annual certification form by the due date shall
result in removal of the lands from the provisions of the sustainable forest
incentive program, and the imposition of any applicable removal penalty,
the provisions in section 290C.11 apply.
The claimant may appeal the removal and any associated penalty
according to the procedures and within the time allowed under this chapter.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 10. [290C.055]
[LENGTH OF COVENANT.]
The covenant remains in effect for a minimum of eight
years. If land is removed from the
program after it has been enrolled for less than four years, the covenant
remains in effect for eight years from the date recorded.
In the case of land that has been enrolled for more than
four years and is removed from the program for any reason, there is a four-year
waiting period to end the covenant. The
covenant remains in effect until January 1 of the fifth calendar year that
begins after the date that:
(1) the commissioner receives notification from the claimant
that the claimant wishes to be removed from the program under section 290C.10,
or
(2) the date that land is removed from the program under
section 290C.11.
Notwithstanding the other provisions of this section, the
covenant is terminated at the same time that land is removed from the program
due to acquisition of title or possession for a public purpose under section
290C.10.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 11. Minnesota
Statutes 2002, section 325D.33, subdivision 6, is amended to read:
Subd. 6. [VIOLATIONS.]
If the commissioner determines that a distributor is violating any provision of
this chapter, the commissioner must give the distributor a written warning
explaining the violation and an explanation of what must be done to comply with
this chapter. Within ten days of
issuance of the warning, the distributor must notify the commissioner that the
distributor has complied with the commissioner's recommendation or request that
the commissioner set the issue for a hearing pursuant to chapter 14. If a hearing is requested, the hearing shall
be scheduled within 20 days of the request and the recommendation of the
administrative law judge shall be issued within five working days of the close
of the hearing. The commissioner's
final determination shall be issued within five
working days of the receipt of the administrative law judge's
recommendation. If the commissioner's
final determination is adverse to the distributor and the distributor does not
comply within ten days of receipt of the commissioner's final determination,
the commissioner may order the distributor to immediately cease the stamping of
cigarettes. As soon as practicable
after the order, the commissioner must remove the meter and any unapplied
cigarette stamps from the premises of the distributor.
If within ten days of issuance of the written warning the
distributor has not complied with the commissioner's recommendation or
requested a hearing, the commissioner may order the distributor to immediately
cease the stamping of cigarettes and remove the meter and unapplied stamps from
the distributor's premises.
If, within any 12-month period, the commissioner has issued
three written warnings to any distributor, even if the distributor has complied
within ten days, the commissioner shall notify the distributor of the
commissioner's intent to revoke the distributor's license for a continuing
course of conduct contrary to this chapter.
For purposes of this paragraph, a written warning that was ultimately
resolved by removal of the warning by the commissioner is not deemed to be a
warning. The commissioner must notify
the distributor of the date and time of a hearing pursuant to chapter 14 at
least 20 days before the hearing is held.
The hearing must provide an opportunity for the distributor to show
cause why the license should not be revoked.
If the commissioner revokes a distributor's license, the commissioner
shall not issue a new license to that distributor for 180 days.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 12. Minnesota
Statutes 2002, section 473.843, subdivision 5, is amended to read:
Subd. 5. [PENALTIES;
ENFORCEMENT.] The audit, penalty, and enforcement provisions applicable to corporate
franchise taxes imposed under chapter 290 apply to the fees imposed under
this section. The commissioner of
revenue shall administer the provisions.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 13. [REPEALER.]
Minnesota Rules, parts 8093.2000 and 8093.3000, are
repealed.
[EFFECTIVE DATE.] This
section is effective the day following final enactment."
Delete the title and insert:
"A bill for an act relating to financing and operation of
state and local government; making technical, policy, clarifying, and
administrative changes to certain taxes and tax related provisions, tax
forfeited lands, state debt collection procedures, sustainable forest incentive
programs, and tax data provisions; conforming tax provisions to certain changes
in federal law; changing powers and duties of commissioner of revenue, state
demographer, and metropolitan council; providing for population estimates;
changing and imposing civil penalties; amending Minnesota Statutes 2002,
sections 16D.10; 270.02, subdivision 3; 270.65; 270.69, subdivision 4; 270B.01,
subdivision 8; 270B.12, subdivision 9; 272.01, subdivision 2; 272.02,
subdivisions 1a, 7, by adding subdivisions; 273.124, subdivision 8; 273.19,
subdivision 1a; 274.14; 275.065, subdivision 1a; 275.07, subdivisions 1, 4;
282.016; 282.21; 282.224; 282.301; 287.04; 289A.12, subdivision 3; 289A.31,
subdivision 2; 289A.37, subdivision 5; 289A.38, subdivision 6; 289A.56, by
adding a subdivision; 289A.60, subdivision 6; 290.06, subdivision 22; 290.92,
subdivision 1; 290.9705, subdivision 1; 290C.05; 295.50, subdivision 4;
296A.22, by adding a subdivision; 297A.995, subdivision 6; 297E.01,
subdivisions 5, 7, by adding subdivisions; 297E.07; 297I.01, by adding a
subdivision; 297I.05, subdivisions 4, 5; 325D.33, subdivision 6; 469.1734,
subdivision 6; 473.843, subdivision 5; 473F.02,
subdivisions 2, 7; 477A.011, subdivision 3; Minnesota Statutes 2003 Supplement,
sections 4A.02; 168A.05, subdivision 1a; 270.06; 270B.12, subdivision 13;
272.02, subdivision 65; 276.112; 289A.02, subdivision 7; 289A.19, subdivision
4; 289A.40, subdivision 2; 290.01, subdivisions 19, 19a, 19b, 19c, 19d, 31;
290.06, subdivision 2c; 290.0674, subdivision 1; 290.091, subdivision 2;
290.0921, subdivision 3; 290A.03, subdivision 15; 290C.10; 291.005, subdivision
1; 297A.668, subdivisions 1, 3, 5; 297A.669, subdivision 16; 297A.68,
subdivisions 2, 5, 39; 297F.08, subdivision 12; 297F.09, subdivisions 1, 2;
469.310, subdivision 11; 469.330, subdivision 11; 469.337; 477A.011,
subdivision 36; 477A.03, subdivision 2b; Laws 2003, First Special Sesion
chapter 21, article 5, section 13; Laws 2003, First Special Session chapter 21,
article 6, section 9; proposing coding for new law in Minnesota Statutes,
chapters 270; 290C; 473; repealing Minnesota Statutes 2002, sections 273.19,
subdivision 5; 274.05; 275.15; 283.07; 297E.12, subdivision 10; Laws 1975,
chapter 287, section 5; Laws 2003, chapter 127, article 9, section 9, subdivision
4; Minnesota Rules, parts 8093.2000; 8093.3000; 8130.0110, subpart 4;
8130.0200, subparts 5, 6; 8130.0400, subpart 9; 8130.1200, subparts 5, 6;
8130.2900; 8130.3100, subpart 1; 8130.4000, subparts 1, 2; 8130.4200, subpart
1; 8130.4400, subpart 3; 8130.5200; 8130.5600, subpart 3; 8130.5800, subpart 5;
8130.7300, subpart 5; 8130.8800, subpart 4."
With the recommendation that when so amended the bill pass.
The report was adopted.
SECOND READING OF HOUSE BILLS
H. F. Nos. 2083, 2298, 2936 and 3091 were read for the second
time.
SECOND READING OF SENATE BILLS
S. F. No. 2696 was read for the second time.
INTRODUCTION AND FIRST READING OF HOUSE BILLS
The following House Files were introduced:
Larson and Lenczewski introduced:
H. F. No. 3199, A bill for an act relating to gambling;
creating a State Gaming Board and authorizing it to operate a casino in the
metropolitan area; proposing a constitutional amendment to permit the
legislature to authorize a state-operated casino; amending Minnesota Statutes
2002, sections 299L.01, subdivision 1; 299L.07, subdivisions 2, 2a; 541.20;
541.21; 609.761, by adding a subdivision; proposing coding for new law in
Minnesota Statutes, chapter 299L.
The bill was read for the first time and referred to the
Committee on Governmental Operations and Veterans Affairs Policy.
Buesgens; Holberg; Heidgerken; Kohls;
DeLaForest; Seifert; Soderstrom; Krinkie; Walz; Erickson; Eastlund;
Johnson, J.; Olson, M.; Newman; Vandeveer; Larson; Zellers; Finstad;
Lindner; Powell; Anderson, B.; Lindgren; Simpson; Gerlach; Adolphson and
Hoppe introduced:
H. F. No. 3200, A bill for an act relating to the legislature;
confining regular legislative sessions to odd-numbered years; amending
Minnesota Statutes 2002, section 3.011.
The bill was read for the first time and referred to the
Committee on Governmental Operations and Veterans Affairs Policy.
MESSAGES FROM THE SENATE
The following messages were received from the Senate:
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House Files, herewith returned:
H. F. No. 1691, A bill for an act relating to highways;
modifying provisions relating to local government road construction and
improvement contracts; amending Minnesota Statutes 2002, section 160.17,
subdivision 3; repealing Minnesota Statutes 2002, section 160.17, subdivision
4.
H. F. No. 2444, A bill for an act relating to civil actions;
regulating limitation periods of certain actions; enacting a uniform conflict
of laws-limitations act; proposing coding for new law in Minnesota Statutes,
chapter 541.
H. F. No. 2017, A bill for an act relating to insurance;
regulating the joint underwriting association; modifying coverage; amending
Minnesota Statutes 2002, section 62F.04, by adding a subdivision.
Patrick E. Flahaven, Secretary of the Senate
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House File, herewith returned:
H. F. No. 1941, A bill for an act relating to Anoka County;
authorizing the county to establish a Personnel Board of Appeals.
Patrick E. Flahaven, Secretary of the Senate
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House Files, herewith returned:
H. F. No. 2386, A bill for an act relating to state government;
merging the Department of Economic Security and the Department of Employment
and Economic Development; making corresponding technical and housekeeping
changes; amending Minnesota Statutes 2002, sections 3.922, subdivision 10;
15.0591, subdivision 2; 116J.01, subdivisions 4, 5; 116J.035,
subdivision 2; 116J.551; 116J.64, subdivisions 4, 5, 7, 8, 9, by adding a
subdivision; 119A.46, subdivision 8; 144.9503, subdivision 1; 171.321,
subdivision 2; 181.73, subdivision 1; 216C.10; 242.39, subdivision 3; 246.56,
subdivision 1; 256J.08, subdivision 52; 268.001; 268.0111, subdivision 4;
268.0122, subdivision 1; 268.29; 268.66, as amended; 268.665, as amended;
268.976, subdivision 2; 268A.01, subdivision 5; Minnesota Statutes 2003
Supplement, sections 15.01; 15.057; 15.06, subdivision 1; 15A.0815, subdivision
2; 16C.05, subdivision 3; 116J.011; 116J.401; 116J.64, subdivision 6; 116J.966,
subdivision 1; 116J.980, subdivision 1; 116J.994, subdivisions 9, 10; 116M.15,
subdivision 1; 248.07, subdivision 8; 256.482, subdivision 1; 256C.233,
subdivision 1; 268.014; 268.022, subdivision 1; 268.363; 462A.04, subdivisions
1, 4; proposing coding for new law in Minnesota Statutes, chapters 116J; 268A;
repealing Minnesota Statutes 2002, sections 116J.036; 116J.414; 268.0111,
subdivisions 1, 2, 3a, 4a; 268.0121, subdivisions 1, 2; 268.0122, subdivisions
2, 5, 6; 268.027; 268.028; 268.26, subdivisions 2, 3; 268.361, subdivision 3;
268.3661; 268.551; 268.552; 268.56, subdivision 2; 268.561, subdivision 10;
268.61, subdivision 2; 268.65, subdivisions 1, 3, 4, 5; 268.666, subdivision 5;
268.89; 268.918; 268.95, subdivisions 1, 2, 3, 5; Minnesota Statutes 2003
Supplement, sections 268.0122, subdivision 3; 268.029; 268.26, subdivision 1;
268.65, subdivision 2; 268.95, subdivision 4; 268.976, subdivision 1; Laws
2001, chapter 175, section 49; Minnesota Rules, parts 3300.0050; 3301.0180;
3301.0190; 3301.0200; 3301.0210; 3301.0220; 3301.0230; 3310.2903; 3310.2904;
3310.2905, subpart 1; 3310.2906; 3310.2907; 3310.2909; 3310.2918; 3315.0100;
3315.0202; 3315.0501, subparts 3, 4, 5; 3315.0510; 3315.0530, subpart 1;
3315.0535; 3315.0545; 3315.0555, subpart 5; 3315.0915; 3315.0920; 3315.1005,
subpart 2; 3315.1015; 3315.1301, subparts 3, 6; 3315.1305; 3315.1310;
3315.1650, subpart 1; 3315.2410; 3315.2610; 3315.2750; 3315.2810, subparts 1,
3; 3315.3220, subpart 4; 3320.0010; 3320.0020; 3320.0030; 7380.0200; 7380.0210;
7380.0220; 7380.0230; 7380.0240; 7380.0500; 7380.0510; 7380.0520; 7380.0530;
7380.0540; 7380.0550; 7380.0560; 7380.0570; 7380.0580; 7380.0581; 7380.0582;
7380.0600; 7380.0610; 7380.0620; 7380.0630; 7380.0640; 7380.0650; 7380.0800;
7380.0810; 7380.0820; 7380.0830; 7380.0840.
H. F. No. 722, A bill for an act relating to traffic
regulations; exempting garbage trucks and recycling vehicles from certain
weight restrictions; amending Minnesota Statutes 2002, section 169.87,
subdivision 6.
Patrick E. Flahaven, Secretary of the Senate
Mr. Speaker:
I hereby announce that the Senate has concurred in and adopted
the report of the Conference Committee on:
H. F. No. 1645, A bill for an act relating to museums and
archives repositories; regulating loans to and abandoned property of museums
and archives repositories; providing a process for establishing ownership of
property loaned to museums and archives repositories; proposing coding for new
law in Minnesota Statutes, chapter 345.
The Senate has repassed said bill in accordance with the
recommendation and report of the Conference Committee. Said House File is herewith returned to the
House.
Patrick E. Flahaven, Secretary of the Senate
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:
H. F. No. 2175, A bill for an act relating to health; modifying
requirements for various public health occupations; prescribing authority of
speech-language pathology assistants; modifying requirements for physician
assistants, acupuncture practitioners, licensed professional counselors,
alcohol and drug counselors, dentists, dental hygienists, dental assistants,
and podiatrists; modifying provisions for designating essential community
providers; modifying certain immunization provisions; appropriating money;
amending Minnesota Statutes 2002, sections 12.03, subdivision 4d; 12.39,
subdivision 2; 144.419, subdivision 1; 144.4195, subdivisions 1, 2, 3, 5;
147A.02; 147A.20; 147B.01, by adding a subdivision; 147B.06, subdivision 4;
148.211, subdivision 1; 148.284; 148.512, subdivisions 9, 19, by adding a
subdivision; 148.6402, by adding a subdivision; 148.6403, subdivision 5;
148.6405; 148.6428; 148.6443, subdivisions 1, 5; 150A.06, as amended; 150A.08,
subdivision 1; 150A.09, subdivision 4; 153.01, subdivision 2; 153.16,
subdivisions 1, 2; 153.19, subdivision 1; 153.24, subdivision 4; 153.25,
subdivision 1; 192.502; Minnesota Statutes 2003 Supplement, sections 13.37,
subdivision 3; 62Q.19, subdivision 2; 121A.15, subdivisions 3a, 12; 147A.09,
subdivision 2; 148.212, subdivision 1; 148.511; 148.512, subdivisions 12, 13;
148.513, subdivisions 1, 2; 148.5161, subdivisions 1, 4, 6; 148.5175; 148.518;
148.5193, subdivisions 1, 6a; 148.5195, subdivision 3; 148.5196, subdivision 3;
148B.52; 148B.53, subdivisions 1, 3; 148B.54; 148B.55; 148B.59; 148C.04,
subdivision 6; 148C.075, subdivision 2, by adding a subdivision; 148C.11,
subdivision 6, by adding a subdivision; 148C.12, subdivisions 2, 3; proposing
coding for new law in Minnesota Statutes, chapters 12; 144; 148; 148B; 197;
repealing Minnesota Statutes 2002, sections 147B.02, subdivision 5; Laws 2002,
chapter 402, section 21; Minnesota Rules, parts 6900.0020, subparts 3, 3a, 9,
10; 6900.0400.
Patrick E. Flahaven, Secretary of the Senate
Abeler moved that the House refuse to concur in the Senate
amendments to H. F. No. 2175, that the Speaker appoint a
Conference Committee of 3 members of the House, and that the House requests
that a like committee be appointed by the Senate to confer on the disagreeing
votes of the two houses. The motion
prevailed.
Mr. Speaker:
I hereby announce the passage by the Senate of the following
House File, herewith returned, as amended by the Senate, in which amendments
the concurrence of the House is respectfully requested:
H. F. No. 2207, A bill for an act relating to health;
clarifying that individuals may participate in pharmaceutical manufacturer's
rebate programs; amending Minnesota Statutes 2002, section 62J.23, subdivision
2.
Patrick E. Flahaven, Secretary of the Senate
Bradley moved that the House refuse to concur in the Senate
amendments to H. F. No. 2207, that the Speaker appoint a
Conference Committee of 3 members of the House, and that the House requests
that a like committee be appointed by the Senate to confer on the disagreeing
votes of the two houses. The motion
prevailed.
Mr. Speaker:
I hereby announce that the Senate refuses to concur in the
House amendments to the following Senate File:
S. F. No. 1530, A bill for an act relating to animals; imposing
limits on ownership and possession of certain dangerous animals; requiring
registration; providing criminal penalties; proposing coding for new law in
Minnesota Statutes, chapter 346.
The Senate respectfully requests that a Conference Committee be
appointed thereon. The Senate has
appointed as such committee:
Senators Betzold, Dille and Kiscaden.
Said Senate File is herewith transmitted to the House with the
request that the House appoint a like committee.
Patrick E. Flahaven, Secretary of the Senate
Strachan moved that the House accede to the request of the Senate
and that the Speaker appoint a Conference Committee of 3 members of the House
to meet with a like committee appointed by the Senate on the disagreeing votes
of the two houses on S. F. No. 1530. The motion prevailed.
Mr. Speaker:
I hereby announce that the Senate has concurred in and adopted
the report of the Conference Committee on:
S. F. No. 1753.
The Senate has repassed said bill in accordance with the recommendation
and report of the Conference Committee.
Said Senate File is herewith transmitted to the House.
Patrick E. Flahaven, Secretary of the Senate
CONFERENCE COMMITTEE REPORT ON S. F. NO. 1753
A bill for an act relating to utilities; modifying low-income
electric rate discount program; amending Minnesota Statutes 2002, section
216B.16, subdivision 14.
May 10, 2004
The Honorable James P.
Metzen
President of the Senate
The Honorable Steve Sviggum
Speaker of the House of
Representatives
We, the undersigned conferees for S. F. No. 1753, report that
we have agreed upon the items in dispute and recommend as follows:
That the House recede from its amendments and that S. F. No.
1753 be further amended as follows:
Delete everything after the enacting clause and insert:
"Section 1.
Minnesota Statutes 2002, section 123B.02, is amended by adding a
subdivision to read:
Subd. 21. [WIND
ENERGY CONVERSION SYSTEM.] The board may construct, acquire, own in whole or
in part, operate, and sell and retain and spend the payment received from
selling energy from a wind energy conversion system, as defined in section
216C.06, subdivision 19. The board's
share of the installed capacity of the wind energy conversion systems
authorized by this subdivision must not exceed 3.3 megawatts of nameplate
capacity. A board owning, operating, or
selling energy from a wind energy conversion system must integrate information
about wind energy conversion systems in its educational programming.
[EFFECTIVE DATE.] This
section is effective the day following final enactment.
Sec. 2. Minnesota Statutes
2002, section 216B.16, subdivision 14, is amended to read:
Subd. 14. [LOW-INCOME
ELECTRIC RATE DISCOUNT.] A public utility shall provide fund an
affordability program for low-income customers in an amount based on a 50
percent electric rate discount on the first 300 kilowatt hours consumed in a
billing period for a low-income residential customer customers
of the utility. For the purposes of
this subdivision, "low-income" means describes a
customer who is receiving assistance from the federal low-income home energy
assistance program. The
affordability program must be designed to target participating customers with
the lowest incomes and highest energy costs in order to lower the percentage of
income they devote to energy bills, increase their payments, and lower costs
associated with collection activities on their accounts. For low-income customers who are 62 years of
age or older or disabled, the program must, in addition to any other program
benefits, include a 50 percent electric rate discount on the first 300 kilowatt
hours consumed in a billing period.
For the purposes of this subdivision, "public utility"
includes only those public utilities with more than 200,000 residential
electric service customers. The
commission may issue orders necessary to implement, administer, and recover the
discount rate costs of the program on a timely basis.
[EFFECTIVE DATE.] This
section is effective July 1, 2004.
Sec. 3. Minnesota
Statutes 2003 Supplement, section 216B.241, subdivision 1b, is amended to read:
Subd. 1b. [CONSERVATION IMPROVEMENT BY COOPERATIVE
ASSOCIATION OR MUNICIPALITY.] (a) This
subdivision applies to:
(1) a cooperative electric association that provides retail
service to its members;
(2) a municipality that provides electric service to retail
customers; and
(3) a municipality with gross operating revenues in excess of
$5,000,000 from sales of natural gas to retail customers.
(b) Each cooperative electric association and municipality
subject to this subdivision shall spend and invest for energy conservation
improvements under this subdivision the following amounts:
(1) for a municipality, 0.5 percent of its gross operating
revenues from the sale of gas and 1.5 percent of its gross operating revenues
from the sale of electricity, excluding gross operating revenues from electric
and gas service provided in the state to large electric customer facilities;
and
(2) for a cooperative electric association, 1.5 percent of its
gross operating revenues from service provided in the state, excluding gross
operating revenues from service provided in the state to large electric
customer facilities indirectly through a distribution cooperative electric
association.
(c) Each municipality and cooperative electric association
subject to this subdivision shall identify and implement energy conservation
improvement spending and investments that are appropriate for the municipality
or association, except that a municipality or association may not spend or
invest for energy conservation improvements that directly benefit a large
electric customer facility for which the commissioner has issued an exemption
under subdivision 1a, paragraph (b).
(d) Each municipality and cooperative electric association
subject to this subdivision may spend and invest annually up to ten percent of
the total amount required to be spent and invested on energy conservation
improvements under this subdivision on research and development projects that
meet the definition of energy conservation improvement in subdivision 1 and
that are funded directly by the municipality or cooperative electric
association.
(e) Load-management activities that do not reduce energy use but that
increase the efficiency of the electric system may be used to meet the
following percentage of the conservation investment and spending requirements
of this subdivision:
(1) 2002 - 90 percent;
(2) 2003 - 80 percent;
(3) 2004 - 65 percent; and
(4) 2005 and thereafter - 50 percent.
(f) A generation and transmission cooperative electric
association that provides energy services to cooperative electric associations
that provide electric service at retail to consumers may invest in energy conservation
improvements on behalf of the associations it serves and may fulfill the
conservation, spending, reporting, and energy savings goals on an aggregate
basis. A municipal power agency or
other not-for-profit entity that provides energy service to municipal utilities
that provide electric service at retail may invest in energy conservation
improvements on behalf of the municipal utilities it serves and may fulfill the
conservation, spending, reporting, and energy savings goals on an aggregate
basis, under an agreement between the municipal power agency or not-for-profit
entity and each municipal utility for funding the investments.
(g) By June 1, 2002, and Every two years thereafter,
on a schedule determined by the commissioner, each municipality or cooperative
shall file an overview of its conservation improvement plan with the
commissioner. With this overview, the
municipality or cooperative shall also provide an evaluation to the
commissioner detailing its energy conservation improvement spending and
investments for the previous period.
The evaluation must briefly describe each conservation program and must
specify the energy savings or increased efficiency in the use of energy within
the service territory of the utility or association that is the result of the
spending and investments. The
evaluation must analyze the cost-effectiveness of the utility's or
association's conservation programs, using a list of baseline energy and
capacity savings assumptions developed in consultation with the department. The commissioner shall review each
evaluation and make recommendations, where appropriate, to the municipality or
association to increase the effectiveness of conservation improvement
activities. Up to three percent of a
utility's conservation spending obligation under this section may be used for
program pre-evaluation, testing, and monitoring and program evaluation. The overview and evaluation filed by
a municipality with less than $2,500,000 60,000,000 kilowatt hours
in annual gross revenues from the retail sale sales of
electric service may consist of a letter from the governing board of the
municipal utility to the department providing the amount of annual conservation
spending required of that municipality and certifying that the required amount
has been spent on conservation programs pursuant to this subdivision.
(h) The commissioner shall also review each evaluation for
whether a portion of the money spent on residential conservation improvement
programs is devoted to programs that directly address the needs of renters and
low-income persons unless an insufficient number of appropriate programs are
available. For the purposes of this
subdivision and subdivision 2, "low-income" means an income at or
below 50 percent of the state median income.
(i) As part of its spending for conservation improvement, a
municipality or association may contribute to the energy and conservation
account. A municipality or association
may propose to the commissioner to designate that all or a portion of funds
contributed to the account be used for research and development projects that
can best be implemented on a statewide basis.
Any amount contributed must be remitted to the commissioner by February
1 of each year.
(j) A municipality may spend up to 50 percent of its required
spending under this section to refurbish an existing district heating or
cooling system. This paragraph expires
July 1, 2007.
Sec. 4.
[REPEALER.]
Minnesota Statutes 2002, section 325E.015, is repealed."
Delete the title and insert:
"A bill for an act relating to utilities; modifying
provisions related to wind energy systems; modifying low-income electric rate
discount program; regulating conservation improvement by cooperatives and
municipalities; eliminating duplicate language related to budget payment plans
as a required customer option; amending Minnesota Statutes 2002, sections
123B.02, by adding a subdivision; 216B.16, subdivision 14; Minnesota Statutes
2003 Supplement, section 216B.241, subdivision 1b; repealing Minnesota Statutes
2002, section 325E.015."
We request adoption of this report and repassage of the bill.
Senate Conferees: Ellen R. Anderson, Gary W. Kubly and David C.
Gaither.
House Conferees: Torrey Westrom, Raymond Cox and Dan Larson.
Westrom moved that the report of the Conference Committee on
S. F. No. 1753 be adopted and that the bill be repassed as
amended by the Conference Committee.
The motion prevailed.
S. F. No. 1753, A bill for an act relating to utilities;
modifying low-income electric rate discount program; amending Minnesota
Statutes 2002, section 216B.16, subdivision 14.
The bill was read for the third time, as amended by Conference,
and placed upon its repassage.
The question was taken on the repassage of the bill and the
roll was called. There were 130 yeas
and 0 nays as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Adolphson
Anderson, B.
Anderson, I.
Anderson, J.
Atkins
Bernardy
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Buesgens
Carlson
Clark
Cornish
Cox
Davids
Davnie
DeLaForest
Demmer
Dempsey
Dill
Dorman
Dorn
Eastlund
Eken
Ellison
Entenza
Erhardt
Erickson
Finstad
Fuller
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Juhnke
Kahn
Kelliher
Klinzing
Knoblach
Koenen
Kohls
Krinkie
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Lindner
Lipman
Magnus
Mahoney
Mariani
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Newman
Nornes
Olsen, S.
Olson, M.
Opatz
Osterman
Otremba
Otto
Ozment
Paulsen
Paymar
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Sieben
Simpson
Slawik
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Thissen
Tingelstad
Urdahl
Vandeveer
Wagenius
Walker
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Spk. Sviggum
The bill was repassed, as amended by Conference, and its title
agreed to.
Mr. Speaker:
I hereby announce the passage by the Senate of the following
Senate Files, herewith transmitted:
S. F. Nos. 2068 and 1790.
Patrick E. Flahaven, Secretary of the Senate
FIRST READING OF SENATE BILLS
S. F. No. 2068, A bill for an act relating to drainage;
prohibiting the planting of trees over certain public or private tile lines;
amending Minnesota Statutes 2002, section 103E.081, by adding subdivisions.
The bill was read for the first time.
Swenson moved that S. F. No. 2068 and H. F. No. 2478, now on
the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.
S. F. No. 1790, A bill for an act relating to local government;
increasing the flexibility of local government contracting; increasing the
purchasing authority of city managers in plan B cities; increasing the
competitive bidding threshold for small cities; authorizing the use of reverse
auction and electronic bidding and selling; amending Minnesota Statutes 2002,
sections 373.01, subdivision 1; 412.691; 429.041, subdivisions 1, 2; 469.015, subdivisions
1, 3; 471.345, subdivisions 3, 4, by adding subdivisions; Minnesota Statutes
2003 Supplement, section 16C.10, subdivision 7.
The bill was read for the first time.
Lanning moved that S. F. No. 1790 and H. F. No. 1717, now on
the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.
REPORT
FROM THE COMMITTEE ON RULES AND
LEGISLATIVE
ADMINISTRATION
Paulsen from the Committee on Rules and Legislative
Administration, pursuant to rule 1.21, designated the following bills to be
placed on the Supplemental Calendar for the Day for Wednesday, May 12, 2004:
S. F. Nos. 2274 and 2177;
H. F. Nos. 2976, 2479 and 2034; S. F. No. 2141;
H. F. No. 580; S. F. Nos. 2455 and 806; and
H. F. Nos. 1703, 2986 and 2247.
CALENDAR
FOR THE DAY
H. F. No. 606 was reported to the House.
Wilkin moved to amend H. F. No. 606, the fourth engrossment, as
follows:
Page 2, after line 24, insert:
"Sec. 3.
[62Q.7321] [ALLOCATION OF COST.]
(a) Health plan companies must not build their costs of
complying with sections 62Q.732 to 62Q.75 into the premium rates they charge to
individuals and employers.
(b) Health plan companies may reduce their reimbursement of
providers by the cost to health plan companies of complying with sections
62Q.732 to 62Q.75."
Renumber the sections in sequence and correct the internal
references
Amend the title accordingly
A roll call was requested and properly seconded.
The question was taken on the Wilkin amendment and the roll was
called. There were 36 yeas and 94 nays
as follows:
Those who voted in the affirmative were:
Adolphson
Anderson, B.
Borrell
Boudreau
Bradley
Buesgens
Eastlund
Erickson
Gerlach
Heidgerken
Holberg
Jacobson
Johnson, J.
Juhnke
Klinzing
Knoblach
Koenen
Krinkie
Kuisle
Lindner
Nelson, C.
Nelson, P.
Olsen, S.
Olson, M.
Osterman
Otremba
Paymar
Powell
Ruth
Severson
Soderstrom
Thissen
Urdahl
Vandeveer
Wardlow
Wilkin
Those who voted in the negative were:
Abeler
Abrams
Anderson, I.
Anderson, J.
Atkins
Bernardy
Biernat
Blaine
Brod
Carlson
Clark
Cornish
Cox
Davids
DeLaForest
Demmer
Dempsey
Dill
Dorman
Dorn
Eken
Ellison
Entenza
Erhardt
Finstad
Fuller
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Hilstrom
Hilty
Hoppe
Hornstein
Howes
Huntley
Jaros
Johnson, S.
Kahn
Kelliher
Kohls
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Mahoney
Mariani
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, M.
Newman
Nornes
Opatz
Otto
Ozment
Paulsen
Pelowski
Penas
Peterson
Pugh
Rhodes
Rukavina
Samuelson
Seagren
Seifert
Sertich
Sieben
Simpson
Slawik
Smith
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Tingelstad
Wagenius
Walker
Walz
Wasiluk
Westerberg
Westrom
Zellers
Spk. Sviggum
The motion did not prevail and the amendment was not adopted.
H. F. No. 606, A bill for an act relating to health; modifying
prior authorization requirements for health care services; establishing
requirements for provider contracting; modifying provisions for payment of
claims; amending Minnesota Statutes 2002, sections 62M.07; 62Q.74; 62Q.75,
subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 62Q;
repealing Minnesota Statutes 2002, section 62Q.745.
The bill was read for the third time and placed upon its final
passage.
The question was taken on the passage of the bill and the roll
was called. There were 129 yeas and 3
nays as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Adolphson
Anderson, B.
Anderson, I.
Anderson, J.
Atkins
Bernardy
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Carlson
Clark
Cornish
Cox
Davids
Davnie
DeLaForest
Demmer
Dempsey
Dill
Dorman
Dorn
Eastlund
Eken
Ellison
Entenza
Erhardt
Erickson
Finstad
Fuller
Gerlach
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Juhnke
Kahn
Kelliher
Klinzing
Knoblach
Koenen
Kohls
Krinkie
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Lindner
Lipman
Magnus
Mahoney
Mariani
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Newman
Nornes
Olsen, S.
Opatz
Osterman
Otremba
Otto
Ozment
Paulsen
Paymar
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Slawik
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Thissen
Tingelstad
Urdahl
Vandeveer
Wagenius
Walker
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Zellers
Spk. Sviggum
Those who voted in the negative were:
Buesgens
Olson, M.
Wilkin
The bill was passed and its title agreed to.
ANNOUNCEMENTS BY THE SPEAKER
The Speaker announced the appointment of the following members
of the House to a Conference Committee on H. F. No. 2175:
Abeler, Wilkin and Otremba.
The Speaker announced the appointment of the following members
of the House to a Conference Committee on H. F. No. 2207:
Bradley, Wilkin and Huntley.
The Speaker announced the appointment of the following members
of the House to a Conference Committee on S. F. No. 1530:
Strachan, Lindgren and Murphy.
The Speaker called Abrams to the Chair.
CALENDAR FOR THE DAY, Continued
H. F. No. 2095 was reported to the House.
Westerberg moved to amend H. F. No. 2095, the second
engrossment, as follows:
Page 10, after line 11, insert:
"Subd. 5.
[RESALE.] "Resale" means a bona fide market sale of the
property subject to the foreclosure reconveyance by the foreclosure purchaser
to an unaffiliated third party.
Subd. 6. [RESALE
PRICE.] "Resale price" means the gross sale price of the property
on resale."
Page 15, delete lines 20 to 22 and insert:
"(ii) the time for determining the fair market value
amount shall be determined in the foreclosure reconveyance contract as either
at the time of the execution of the foreclosure reconveyance contract or at
resale. If the contract states that the
fair market value shall be determined at the time of resale, the fair market
value shall be the resale price if it is sold within 120 days of the eviction
or voluntary relinquishment of the property by the foreclosed homeowner. If the contract states that the fair market
value shall be determined at the time of resale, and the resale is not
completed within 120 days of the eviction or voluntary relinquishment of the
property by the foreclosed homeowner, the fair market value shall be determined
by an appraisal conducted during this 120 day period and payment, if required,
shall be made to the homeowner, but the fair market value shall be recalculated
as the resale price on resale and an additional payment amount, if appropriate
based on the resale price, shall be made to the foreclosed homeowner within 15
days of resale; and"
Page 18, line 3, delete everything before "engages"
The motion prevailed and the amendment was adopted.
Lipman, Westerberg, Murphy and Vandeveer moved to amend H. F. No.
2095, the second engrossment, as amended, as follows:
Page 8, after line 31, insert:
"(d) Notwithstanding any other provision of this
section, no action may be brought on the basis of a violation of sections
325N.01 to 325N.09, except by an owner against whom the violation was committed
or by the attorney general. This
limitation does not apply to administrative action by the commissioner of
commerce."
Page 15, line 11, delete "85" and insert
"80"
Page 15, line 12, delete "120" and insert
"150"
Page 17, after line 20, insert:
"Subd. 1a.
[LIMITATION.] Notwithstanding any other provision of this section, no
action may be brought on the basis of a violation of sections 325N.10 to
325N.18, except by an owner against whom the violation was committed or by the
attorney general. This limitation does
not apply to administrative action by the commissioner of commerce."
Page 18, line 3, delete everything before "engages"
Page 18, line 6, delete "$100,000" and insert
"$50,000"
Page 18, after line 8, insert:
"Subd. 5.
[FAILURE OF TRANSACTION.] Failure of the parties to complete the
reconveyance transaction, in the absence of additional misconduct, shall not
subject a foreclosure purchaser to the criminal penalties under section 325N.07
or 325N.18."
Page 19, after line 28, insert:
"Sec. 22.
[EFFECTIVE DATE; EXPIRATION.]
Sections 1 to 21 are effective August 1, 2004, and expire
December 31, 2006."
Renumber the sections in sequence and correct the internal
references
Amend the title accordingly
The motion prevailed and the amendment was adopted.
H. F. No. 2095, A bill for an act relating to mortgage
foreclosure; providing for rescission of foreclosure consultant contracts;
regulating foreclosure consultant contracts; providing remedies for foreclosure
violations; requiring foreclosure purchasers to enter foreclosure reconveyances
in the form of written contracts; regulating foreclosure contracts; prohibiting
certain foreclosure purchaser practices; providing enforcement remedies; requiring
certain foreclosure notices; imposing criminal penalties; amending Minnesota
Statutes 2002, section 580.03; proposing coding for new law in Minnesota
Statutes, chapter 580; proposing coding for new law as Minnesota Statutes,
chapter 325N.
The bill was read for the third time, as amended, and placed
upon its final passage.
The question was taken on the passage of the bill and the roll was
called. There were 133 yeas and 0 nays
as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Adolphson
Anderson, B.
Anderson, I.
Anderson, J.
Atkins
Bernardy
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Buesgens
Carlson
Clark
Cornish
Cox
Davids
Davnie
DeLaForest
Demmer
Dempsey
Dill
Dorman
Dorn
Eastlund
Eken
Ellison
Entenza
Erhardt
Erickson
Finstad
Fuller
Gerlach
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Juhnke
Kahn
Kelliher
Klinzing
Knoblach
Koenen
Kohls
Krinkie
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Lindner
Lipman
Magnus
Mahoney
Mariani
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Newman
Nornes
Olsen, S.
Olson, M.
Opatz
Osterman
Otremba
Otto
Ozment
Paulsen
Paymar
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Slawik
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Thissen
Tingelstad
Urdahl
Vandeveer
Wagenius
Walker
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
The bill was passed, as amended, and its title agreed to.
S. F. No. 1080 was reported to the House.
Samuelson moved to amend S. F. No. 1080 as follows:
Page 1, lines 20 and 21, delete the new language
The motion prevailed and the amendment was adopted.
McNamara; Magnus; Anderson,
B.; Severson; Lieder; Samuelson and Adolphson moved to amend
S. F. No. 1080, as amended, as follows:
Page 1, line 10, delete the first "to" and insert
"a"
Page 2, after line 26, insert:
"Sec. 5. Minnesota
Statutes 2002, section 198.261, is amended to read:
198.261 [CANTEEN AND, COFFEE SHOP, AND WOOD
SHOP.]
Any profits derived from the operation of canteens and,
coffee shops, and wood shops at the Minnesota veterans homes shall be
used by the board only for the direct benefit of the residents of the
homes."
Renumber the sections in sequence and correct the internal
references
Amend the title accordingly
The motion prevailed and the amendment was adopted.
Brod; Wardlow; Juhnke; Magnus; Anderson, B.; Dempsey; Eastlund;
Rhodes; Severson; Knoblach; Samuelson; Gunther; Cornish; Zellers; Lieder and
Cox moved to amend S. F. No. 1080, as amended, as follows:
Page 2, after line 26, insert:
"Sec. 5. Minnesota
Statutes 2003 Supplement, section 192.501, subdivision 2, is amended to read:
Subd. 2. [TUITION AND
TEXTBOOK REIMBURSEMENT GRANT PROGRAM.] (a) The adjutant general shall establish
a program to provide tuition and textbook reimbursement grants to eligible members
of the Minnesota National Guard within the limitations of this subdivision.
(b) Eligibility is limited to a member of the National Guard
who:
(1) is serving satisfactorily as defined by the adjutant
general;
(2) is attending a postsecondary educational institution, as
defined by section 136A.15, subdivision 6, including a vocational or technical
school operated or regulated by this state or another state or province; and
(3) provides proof of satisfactory completion of coursework, as
defined by the adjutant general.
In addition, if a member of the Minnesota National Guard is
killed in the line of state active service or federally funded state active
service, as defined in section 190.05, subdivisions 5a and 5b, the member's
surviving spouse, and any surviving dependent who has not yet reached 24 years
of age, is eligible for a tuition and textbook reimbursement grant.
The adjutant general may, within the limitations of this
paragraph and other applicable laws, determine additional eligibility criteria
for the grant, and must specify the criteria in department regulations and
publish changes as necessary.
(c) The amount of a tuition and textbook reimbursement grant
must be specified on a schedule as determined and published in department
regulations by the adjutant general, but is limited to a maximum of an amount
equal to the greater of:
(1) 75 percent of the cost of tuition for lower division
programs in the College of Liberal Arts at the Twin Cities campus of the
University of Minnesota in the most recent academic year; or
(2) 50 percent of the cost of tuition for the program in
which the person is enrolled at that Minnesota public institution, or if that
public institution is outside the state of Minnesota, for the cost of a comparable
program at the University of Minnesota, except that in the case of a survivor
as defined in paragraph (b), the amount of the tuition and textbook
reimbursement grant for coursework satisfactorily completed by the person is
limited to 100 percent of the cost of tuition for postsecondary courses at a
Minnesota public educational institution.
Paragraph (b) notwithstanding, a person is no longer eligible for a
grant under this subdivision once the person has received grants under this
subdivision for the equivalent of 208 quarter credits or 144 semester credits
of coursework.
(d) Tuition and textbook reimbursement grants received under
this subdivision may not be considered by the Minnesota Higher Education
Services Office or by any other state board, commission, or entity in
determining a person's eligibility for a scholarship or grant-in-aid under
sections 136A.095 to 136A.1311.
(e) If a member fails to complete a term of enlistment during
which a tuition and textbook reimbursement grant was paid, the adjutant general
may seek to recoup a prorated amount as determined by the adjutant general.
[EFFECTIVE DATE.] This
section is effective July 1, 2004."
Renumber the sections in sequence and correct the internal
references
Amend the title accordingly
The motion prevailed and the amendment was adopted.
S. F. No. 1080, A bill for an act relating to veterans homes;
updating and correcting certain language; amending Minnesota Statutes 2002,
sections 198.001, by adding a subdivision; 198.004, subdivision 1; 198.005;
198.007; repealing Minnesota Statutes 2002, sections 198.001, subdivision 7;
198.002, subdivision 5; 198.003, subdivision 2.
The bill was read for the third time, as amended, and placed
upon its final passage.
The question was taken on the passage of the bill and the roll
was called. There were 133 yeas and 0
nays as follows:
Those who voted in the affirmative were:
Abeler
Abrams
Adolphson
Anderson, B.
Anderson, I.
Anderson, J.
Atkins
Bernardy
Biernat
Blaine
Borrell
Boudreau
Bradley
Brod
Buesgens
Carlson
Clark
Cornish
Cox
Davids
Davnie
DeLaForest
Demmer
Dempsey
Dill
Dorman
Dorn
Eastlund
Eken
Ellison
Entenza
Erhardt
Erickson
Finstad
Fuller
Gerlach
Goodwin
Greiling
Gunther
Haas
Hackbarth
Harder
Hausman
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, J.
Johnson, S.
Juhnke
Kahn
Kelliher
Klinzing
Knoblach
Koenen
Kohls
Krinkie
Kuisle
Lanning
Larson
Latz
Lenczewski
Lesch
Lieder
Lindgren
Lindner
Lipman
Magnus
Mahoney
Mariani
Marquart
McNamara
Meslow
Mullery
Murphy
Nelson, C.
Nelson, M.
Nelson, P.
Newman
Nornes
Olsen, S.
Olson, M.
Opatz
Osterman
Otremba
Otto
Ozment
Paulsen
Paymar
Pelowski
Penas
Peterson
Powell
Pugh
Rhodes
Rukavina
Ruth
Samuelson
Seagren
Seifert
Sertich
Severson
Sieben
Simpson
Slawik
Smith
Soderstrom
Solberg
Stang
Strachan
Swenson
Sykora
Thao
Thissen
Tingelstad
Urdahl
Vandeveer
Wagenius
Walker
Walz
Wardlow
Wasiluk
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
The bill was passed, as amended, and its title agreed to.
Wasiluk was excused between the hours of 1:35
p.m. and 3:15 p.m.
H. F. No. 1800 was reported to the House.
Erickson moved to amend H. F. No. 1800, the first engrossment,
as follows:
Delete everything after the enacting clause and insert:
"Section 1.
[REPORT REQUIRED.]
By January 3, 2005, the commissioner of natural resources
shall report to the legislature all costs incurred by the Department of Natural
Resources associated with any agreement between the state and a tribe related
to the management of game and fish or other natural resources or to the
administration of treaties. Costs
reported must include expenditures for outsourcing and any payments to federal
agencies for assistance in administering or implementing agreements. The commissioner shall itemize the costs
incurred by category and year since the commencement of any agreement."
POINT OF ORDER
Entenza raised a point of order pursuant to rule 4.03, relating
to Ways and Means Committee; Budget Resolution; Effect on Expenditure and
Revenue Bills, that the Erickson amendment was not in order.
Pursuant to section 244 of "Mason's Manual of Legislative
Procedure," Speaker pro tempore Abrams deferred his decision on the
Entenza point of order.
Clark moved to amend the Erickson amendment to H. F. No. 1800,
the first engrossment, as follows:
Page 1, line 12, after "agreements" insert
"including law enforcement costs to enforce treaty rights"
A roll call was requested and properly seconded.
The question was taken on the amendment to the amendment and
the roll was called. There were 61 yeas
and 71 nays as follows:
Those who
voted in the affirmative were:
Abrams
Anderson, I.
Atkins
Bernardy
Biernat
Brod
Carlson
Clark
Davnie
Dill
Dorn
Eken
Ellison
Entenza
Goodwin
Greiling
Harder
Hausman
Hilstrom
Hilty
Hornstein
Howes
Huntley
Jacobson
Jaros
Johnson, S.
Juhnke
Kahn
Kelliher
Knoblach
Koenen
Larson
Latz
Lenczewski
Lesch
Lieder
Magnus
Mahoney
Mariani
Marquart
Mullery
Murphy
Nelson, M.
Opatz
Osterman
Otto
Paymar
Pelowski
Peterson
Pugh
Rhodes
Rukavina
Seagren
Sertich
Slawik
Solberg
Sykora
Thao
Thissen
Wagenius
Walker
Those who voted in the negative were:
Abeler
Adolphson
Anderson, B.
Anderson, J.
Blaine
Borrell
Boudreau
Bradley
Buesgens
Cornish
Cox
Davids
DeLaForest
Demmer
Dempsey
Dorman
Eastlund
Erhardt
Erickson
Finstad
Fuller
Gerlach
Gunther
Haas
Hackbarth
Heidgerken
Holberg
Hoppe
Johnson, J.
Klinzing
Kohls
Krinkie
Kuisle
Lanning
Lindgren
Lindner
Lipman
McNamara
Meslow
Nelson, C.
Nelson, P.
Newman
Nornes
Olsen, S.
Olson, M.
Otremba
Ozment
Paulsen
Penas
Powell
Ruth
Samuelson
Seifert
Severson
Sieben
Simpson
Smith
Soderstrom
Stang
Strachan
Swenson
Tingelstad
Urdahl
Vandeveer
Walz
Wardlow
Westerberg
Westrom
Wilkin
Zellers
Spk. Sviggum
The motion did not prevail and the amendment to the amendment
was not adopted.
PENDING POINT OF ORDER
Pursuant to section 245 of "Mason's Manual of Legislative
Procedure," Speaker pro tempore Abrams submitted the following question to
the House: "Is it the judgment of
the House that the pending Entenza point of order is well taken?"
A roll call was requested and properly seconded.
The question was taken on the Entenza point of order and the
roll was called. There were 79 yeas and
53 nays as follows:
Those who
voted in the affirmative were:
Abrams
Anderson, I.
Atkins
Bernardy
Biernat
Brod
Carlson
Clark
Cornish
Cox
Davids
Davnie
Dill
Dorman
Dorn
Eken
Ellison
Entenza
Erhardt
Fuller
Goodwin
Greiling
Hausman
Hilstrom
Hilty
Holberg
Hornstein
Howes
Huntley