Journal of the House - 56th Day - Thursday, April 26, 2007

A quorum was present.

Hilstrom was excused until 10:15 a.m. Olson was excused until 12:00 noon.

The Chief Clerk proceeded to read the Journal of the preceding day. Winkler moved that further reading of the Journal be suspended and that the Journal be approved as corrected by the Chief Clerk. The motion prevailed.

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REPORTS OF STANDING COMMITTEES AND DIVISIONS

Carlson from the Committee on Finance to which was referred:

H. F. No. 904, A bill for an act relating to state lands; modifying land acquisition requirements; modifying land owners' bill of rights; modifying recordation requirements for mineral interests; adding to and deleting from state parks; exempting certain exchanged land from the tax-forfeited land assurance fee; authorizing certain leases of tax-forfeited lands; authorizing public and private sales and conveyances of certain state lands; amending Minnesota Statutes 2006, sections 84.0272, subdivision 3; 84.0274, subdivision 5; 93.55, subdivision 1; Laws 2006, chapter 236, article 1, section 21.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 2006, section 84.0272, subdivision 3, is amended to read:

Subd. 3. Minimal value acquisition. (a) Notwithstanding subdivision 1, if the commissioner determines that lands or interests in land have a value less than ~~$5,000~~ $100,000, the commissioner may acquire the lands for the value determined by the commissioner without an appraisal. The commissioner shall make the determination based upon available information including, but not limited to:

(1) the most recent assessed market value of the land or interests in land as determined by the county assessor of the county in which the land or interests in land is located;

(2) a sale price of the land or interests in land, provided the sale occurred within the past year;

(3) the sale prices of comparable land or interests in land located in the vicinity and sold within the past year; or

(4) an appraisal of the land or interests in land conducted within the past year.

(b) In the event the value is ~~minimal~~ less than $1,000, the commissioner may add a transaction incentive, provided that the sum of the incentive plus the value of the land does not exceed $1,000.

Sec. 2. Minnesota Statutes 2006, section 84.0274, subdivision 5, is amended to read:

Subd. 5. Owner's rights. When the state proposes to purchase in fee or any lesser interest in land which will be administered by the commissioner of natural resources, the landowner shall have the following rights:

(a) The right to be informed of the specific intended use of the property and of any change in the intended use of the property which occurs during the acquisition process. The owner shall also be informed that the documents regarding the purchase will be public records if the land is purchased by the state;

(b) The right to be paid a fair price for the property. The price shall include the fair market value of the land plus:

(1) All necessary incidental costs such as abstracting and recording fees related to the sale. The costs of clearing title defects, paying taxes, and attorney's fees are not reimbursable; and

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(2) Any penalties incurred by the owner where the property is security for a loan or advance of credit that contains a provision requiring or permitting the imposition of a penalty if the loan or advance of credit is prepaid;

(d) The right to have the property fairly appraised by the state. The state's appraiser shall physically inspect the property and shall allow the owner along when the appraisal is made. The state's appraiser shall certify in the appraisal report to having physically inspected the property and having given the landowner an opportunity to go along on inspections. Notwithstanding section 13.44, subdivision 3, before an offer is made, the landowner shall be given a resume of the state's certified appraisal. The resume shall include the appraiser's conclusions as to value, acreage and type of land, value of buildings and other improvements, value of timber, special damages and any special elements of value informed of the value determined pursuant to section 84.0272;

(e) The right to retain a qualified independent appraiser to conduct an appraisal at any time prior to certification of the state's appraisal of the property and to be reimbursed for appraisal fees as provided in section 117.232, subdivision 1, if the land is sold to the state and to have that appraisal considered along with the state's in certifying the selling price;

(f) The right to have the state acquire the property by means of condemnation upon the owner's request with the agreement of the commissioner;

(g) The right to receive or waive relocation assistance, services, payments and benefits as provided in sections 117.52 and 117.521;

(h) The right to accept the state's offer for the property and contest the state's offer for relocation and moving expenses;

(i) The right to continue occupancy of the property until full payment is received, provided that when the owner elects to receive payment in annual installments pursuant to clause (c), the owner may retain occupancy until the first payment is made; and

(j) The right to seek the advice of counsel regarding any aspect of the land transaction.

Sec. 3. Minnesota Statutes 2006, section 93.55, subdivision 1, is amended to read:

Subdivision 1. Forfeiture; failure to record. If the owner of a mineral interest fails to record the verified statement required by section 93.52, before January 1, 1975, as to any interests owned on or before December 31, 1973, or within one year after acquiring such interests as to interests acquired after December 31, 1973, ~~and not previously recorded under section 93.52,~~ the mineral interest shall forfeit to the state after notice and opportunity for hearing as provided in this section. However, before completing the procedures set forth in subdivision 2, the commissioner of natural resources may lease the severed mineral interest as provided in subdivisions 1a and 3.

Sec. 4. Minnesota Statutes 2006, section 93.55, is amended by adding a subdivision to read:

Subd. 1b. Exemption for forfeiture. Notwithstanding subdivision 1, a severed mineral interest for which a statement was recorded as required under section 93.52, but for which no new statement was recorded when the interest was subsequently conveyed on or after December 31, 1969, but before July 1, 2007, is not subject to forfeiture if: (1) substantial compliance can be shown as provided in subdivision 2, and (2) a new statement is recorded within one year of any conveyance of ownership on or after July 1, 2007.

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Sec. 5. Minnesota Statutes 2006, section 394.36, is amended by adding a subdivision to read:

Subd. 5. Ownership of nonconforming parcel not relevant. A county must not make a permit or other approval for use, development, or sale or other disposition of a nonconforming lot or parcel of land dependent on the ownership, or the relationship of the buyer to the seller, of the lot or parcel.

Sec. 6. Minnesota Statutes 2006, section 462.357, subdivision 1e, is amended to read:

Subd. 1e. Nonconformities. (a) Any nonconformity, including the lawful use or occupation of land or premises existing at the time of the adoption of an additional control under this chapter, may be continued, including through repair, replacement, restoration, maintenance, or improvement, but not including expansion, unless:

(1) the nonconformity or occupancy is discontinued for a period of more than one year; or

(2) any nonconforming use is destroyed by fire or other peril to the extent of greater than 50 percent of its market value, and no building permit has been applied for within 180 days of when the property is damaged. In this case, a municipality may impose reasonable conditions upon a building permit in order to mitigate any newly created impact on adjacent property.

(b) Any subsequent use or occupancy of the land or premises shall be a conforming use or occupancy. A municipality may, by ordinance, permit an expansion or impose upon nonconformities reasonable regulations to prevent and abate nuisances and to protect the public health, welfare, or safety. This subdivision does not prohibit a municipality from enforcing an ordinance that applies to adults-only bookstores, adults-only theaters, or similar adults-only businesses, as defined by ordinance.

(c) Notwithstanding paragraph (a), a municipality shall regulate the repair, replacement, maintenance, improvement, or expansion of nonconforming uses and structures in floodplain areas to the extent necessary to maintain eligibility in the National Flood Insurance Program and not increase flood damage potential or increase the degree of obstruction to flood flows in the floodway.

(d) A municipality must not make a permit or other approval for use, development, or sale or disposition of a nonconforming lot or parcel of land dependent on the ownership, or the relationship of the buyer to the seller, of the lot or parcel.

Sec. 7. Laws 2006, chapter 236, article 1, section 21, is amended to read:

Sec. 21. EXCHANGE OF TAX-FORFEITED LAND; PRIVATE SALE; ITASCA COUNTY.

(a) For the purpose of a land exchange for use in connection with a proposed steel mill in Itasca County referenced in Laws 1999, chapter 240, article 1, section 8, subdivision 3, title examination and approval of the land described in paragraph (b) shall be undertaken as a condition of exchange of the land for class B land, and shall be governed by Minnesota Statutes, section 94.344, subdivisions 9 and 10, and the provisions of this section. Notwithstanding the evidence of title requirements in Minnesota Statutes, section 94.344, subdivisions 9 and 10, the county attorney shall examine one or more title reports or title insurance commitments prepared or underwritten by a title insurer licensed to conduct title insurance business in this state, regardless of whether abstracts were created or updated in the preparation of the title reports or commitments. The opinion of the county attorney, and approval by the attorney general, shall be based on those title reports or commitments.

(b) The land subject to this section is located in Itasca County and is described as:

(1) Sections 3, 4, 7, 10, 14, 15, 16, 17, 18, 20, 21, 22, 23, 26, 28, and 29, Township 56 North, Range 22 West;

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(2) Sections 3, 4, 9, 10, 13, and 14, Township 56 North, Range 23 West;

(3) Section 30, Township 57 North, Range 22 West; and

(4) Sections 25, 26, 34, 35, and 36, Township 57 North, Range 23 West.

(c) Riparian land given in exchange by Itasca County for the purpose of the steel mill referenced in paragraph (a), is exempt from the restrictions imposed by Minnesota Statutes, section 94.342, subdivision 3.

(d) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, and the public sale provisions of Minnesota Statutes, chapter 282, Itasca County may sell, by private sale, any land received in exchange for the purpose of the steel mill referenced in paragraph (a), under the remaining provisions of Minnesota Statutes, chapter 282. The sale must be in a form approved by the attorney general.

(e) Notwithstanding Minnesota Statutes, section 284.28, subdivision 8, or any other law to the contrary, land acquired through an exchange under this section is exempt from payment of three percent of the sales price required to be collected by the county auditor at the time of sale for deposit in the state treasury.

Sec. 8. ADDITIONS TO STATE PARKS.

Subdivision 1. [85.012] [Subd. 16.] Flandrau State Park, Brown County. The following area is added to Flandrau State Park, Brown County: that part of Lot 2, Block One, Conklin Addition in the city of New Ulm, Brown County, Minnesota, according to the plat of record in the Office of the County Recorder, Brown County, Minnesota, described as follows: beginning at the southerly most corner of Lot 2, Block One, Conklin Addition in the city of New Ulm, Brown County, Minnesota; thence North 55 degrees 29 minutes 26 seconds East (assumed bearing) along the southeasterly line of said Lot 2 a distance of 107.92 feet; thence South 60 degrees 45 minutes 57 seconds West a distance of 102.48 feet to the westerly line of Lot 2; thence South 02 degrees 33 minutes 23 seconds East along said westerly line of Lot 2 a distance of 11.10 feet to the point of beginning; containing 508 square feet, more or less, and subject to easements of record in said County and State.

Subd. 2. [85.012] [Subd. 59.] Whitewater State Park, Winona County. The following area is added to Whitewater State Park, Winona County: that part of the Southeast Quarter of Section 18, Township 107 North, Range 10 West, Winona County, Minnesota, described as follows: commencing at the southwest corner of the Northwest Quarter of Section 17, Township 107 North, Range 10 West; thence on an assumed bearing of South 89 degrees 26 minutes 39 seconds East along the south line of said Northwest Quarter, 303.04 feet; thence continue South 89 degrees 26 minutes 39 seconds East along said south line 1327.79 feet; thence South 00 degrees 33 minutes 21 seconds West, 300.00 feet; thence North 89 degrees 26 minutes 39 seconds West parallel with said south line, 1027.83 feet; thence South 00 degrees 33 minutes 21 seconds West, 300.00 feet; thence North 89 degrees 26 minutes 39 seconds West parallel with said south line, 597 feet, more or less, to the intersection with the east line of the Southeast Quarter of said Section 18 being also the POINT OF BEGINNING; thence North 89 degrees 26 minutes 39 seconds West parallel with said south line, 330 feet, more or less, to the centerline of a township road; thence North 16 degrees 01 minutes 55 seconds West along said centerline, 170.44 feet; thence northwesterly along said centerline on a tangential curve concave southwesterly, having a central angle of 10 degrees 57 minutes 52 seconds, radius of 2426.00 feet, for an arc length of 464.25 feet to the north line of said Southeast Quarter of Section 18; thence North 89 degrees 48 minutes 48 seconds East along the north line of said Southeast Quarter, 547.06 feet to the southwest corner of said Northwest Quarter; thence South 00 degrees East, a distance of 600 feet, more or less, along the said east line to the POINT OF BEGINNING. Containing 5.78 acres, more or less.

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Sec. 9. DELETIONS FROM STATE PARKS.

[85.012] [Subd. 16.] Flandrau State Park, Brown County. The following area is deleted from Flandrau State Park, Brown County: that part of Outlot 293 in the city of New Ulm, according to the Plat of the City of New Ulm, of record in the Office of the County Recorder, Brown County, Minnesota, described as follows: commencing at the southerly most corner of Lot 2, Block One, Conklin Addition in the city of New Ulm, Brown County, Minnesota; thence North 55 degrees 29 minutes 26 seconds East (assumed bearing), along the southeasterly line of said Lot 2, a distance of 107.92 feet to the point of beginning; thence continuing North 55 degrees 29 minutes 26 seconds East, along said southerly line of Lot 2, a distance of 80.95 feet, to the easterly most corner of said Lot 2; thence South 19 degrees 33 minutes 58 seconds East, along the southeasterly prolongation of the easterly line of said Lot 2, a distance of 10.0 feet; thence South 62 degrees 31 minutes 07 seconds West, 78.97 feet to the point of beginning, containing 391 square feet, more or less, and subject to easement of record in said county and state.

Sec. 10. PUBLIC SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; AITKIN COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, the commissioner of natural resources may sell by public sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(1) Government Lot 3, Section 24, Township 50 North, Range 25 West, containing 5.8 acres, more or less; and

(2) Government Lot 4, Section 24, Township 50 North, Range 25 West, containing 0.9 acres, more or less.

(d) The land borders the Willow River and is not contiguous to other state lands. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 11. PUBLIC SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; AITKIN COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, the commissioner of natural resources may sell by public sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Aitkin County and is described as follows: Government Lot 2, Section 8, Township 48 North, Range 25 West, containing 34.6 acres, more or less.

(d) The land borders Gun Lake. The Department of Natural Resources has determined that school trust management interests would best be served if the land was sold.

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Sec. 12. PUBLIC SALE OF CONSOLIDATED CONSERVATION LAND BORDERING PUBLIC WATER; AITKIN COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, and the classification provisions of Minnesota Statutes, chapters 84A and 282, Aitkin County may sell by public sale the consolidated conservation land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Aitkin County and is described as follows: Government Lot 1, Section 7, Township 47 North, Range 26 West, containing 1.25 acres, more or less.

(d) The land borders the Mississippi River and is not contiguous to other state lands. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 13. PRIVATE SALE OF CONSOLIDATED CONSERVATION LAND; AITKIN COUNTY.

(a) Notwithstanding the classification and public sale provisions of Minnesota Statutes, chapters 84A and 282, the commissioner of natural resources may sell by private sale the consolidated conservation land that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy. The consideration for the conveyance must be for no less than the appraised value of the land and timber and survey costs. Proceeds shall be disposed of according to Minnesota Statutes, chapter 84A.

(c) The land that may be sold is located in Aitkin County and is described as follows: the North 370 feet of the East 590 feet of the Southeast Quarter of the Northeast Quarter, Section 24, Township 48 North, Range 24 West, containing 5.0 acres, more or less.

(d) The land will be sold "as is" to the current leaseholder who will assume responsibility for any site cleanup needed due to the use of the land for a concrete plant by the previous leaseholder. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 14. PUBLIC SALE OF CONSOLIDATED CONSERVATION LAND; AITKIN COUNTY.

(a) Notwithstanding the classification provisions of Minnesota Statutes, chapters 84A and 282, Aitkin County may sell by public sale the consolidated conservation land that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Aitkin County and is described as follows: the Northeast Quarter of the Northeast Quarter, Section 21, Township 47 North, Range 26 West, containing 40 acres, more or less.

(d) The land is not contiguous to other state lands. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

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Sec. 15. CONVEYANCE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; BELTRAMI COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45, 94.09, and 94.10, the commissioner of natural resources may convey to a governmental subdivision of the state for no payment the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy. The conveyance must provide that the land described in paragraph (c) be used for the public and reverts to the state if the governmental subdivision fails to provide for public use or abandons the public use of the land.

(c) The land that may be conveyed is located in Beltrami County and is described as follows: that part of Government Lot 3, Section 4, Township 146 North, Range 34 West, described as follows: starting from meander corner number 4, which is located on the north section line of Section 4, Township 146 North, Range 34 West, 1518.0 feet in an easterly direction from the northwest corner of said section; thence South 16 degrees 17 minutes East a distance of 131.6 feet; thence South 46 degrees 35 minutes East a distance of 206.8 feet; thence South 6 degrees 37 minutes East a distance of 89.4 feet; thence South 14 degrees 32 minutes East a distance of 139.0 feet; thence South 10 degrees 34 minutes West a distance of 221.5 feet; thence South 83 degrees 46 minutes West a distance of 178.5 feet to the starting point; thence South 47 degrees 15 minutes West a distance of 275.0 feet; thence South 38 degrees 53 minutes East a distance of 285.7 feet; thence North 61 degrees 27 minutes East a distance of 122.0 feet; thence North 73 degrees 47 minutes East a distance of 300.0 feet; thence North 12 degrees 40 minutes West a distance of 37.6 feet; thence North 20 degrees 30 minutes West a distance of 113.5 feet; thence North 51 degrees 15 minutes West a distance of 320.7 feet; thence South 38 degrees 15 minutes West a distance of 116.8 feet to the starting point, containing 3.5 acres, more or less.

(d) The land borders Grant Lake and is not contiguous to other state lands. The land was donated to the state for use as a public campground and is used by local residents as a day-use park. The Department of Natural Resources has determined that the state's land management interests would best be served if the land were conveyed to a local unit of government.

Sec. 16. PRIVATE SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; CASS COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45, 94.09, and 94.10, the commissioner of natural resources may sell by private sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy. The commissioner may sell the land to the Leech Lake Band of Ojibwe for less than the value of the land as determined by the commissioner, but the conveyance must provide that the land be used for the public and reverts to the state if the band fails to provide for public use or abandons the public use of the land. The commissioner may include conservation restrictions in the conveyance deed to ensure the property is maintained as open space.

(1) Government Lot 3, Section 14, Township 142 North, Range 29 West, containing 35.54 acres, more or less; and

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(2) Government Lot 6, Section 14, Township 142 North, Range 29 West, containing 2.06 acres, more or less.

(d) The land is located on Bear Island in Leech Lake and is not contiguous to other state lands. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 17. PRIVATE SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; CASS COUNTY.

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Cass County and is described as follows: that part of Government Lot 7, Section 28, Township 142 North, Range 26 West, described as follows: commencing at the south quarter corner of said Section 28, from which the southwest corner of said Section 28 bears, based on the Cass County Coordinate System of NAD 1983, South 89 degrees 44 minutes 53 seconds West, 2775.06 feet; thence North 52 degrees 48 minutes 53 seconds West, 1326.13 feet to the southeast corner of that particular tract of land conveyed to the state of Minnesota and filed for record on November 9, 1961, in Book 121 of Deeds, Page 598, and to a railroad spike on the centerline of County State-Aid Highway 4; thence North 52 degrees 12 minutes 27 seconds West, 221.06 feet along the southwesterly line of said particular tract of land conveyed to the state of Minnesota and the centerline of County State-Aid Highway 4 to a spike; thence North 51 degrees 01 minutes 41 seconds West, 111.72 feet along the southwesterly line of said particular tract of land conveyed to the state of Minnesota and the centerline of County State-Aid Highway 4 to a mag nail and the point of beginning of the land to be described; thence continuing North 51 degrees 01 minutes 41 seconds West, 41.42 feet along the southwesterly line of said particular tract of land conveyed to the state of Minnesota and the centerline of County State-Aid Highway 4 to a mag nail; thence North 13 degrees 19 minutes 36 seconds East, 144.63 feet to a 3/4" x 24" rebar with plastic cap stamped "MN DNR LS 17005" (DNR MON); thence continuing North 13 degrees 19 minutes 36 seconds East, 5 feet, more or less, to the water's edge of Little Sand Lake; thence southeasterly, a distance of 50 feet, more or less, along said water's edge to a line which bears North 13 degrees 19 minutes 36 seconds East from the point of beginning; thence South 13 degrees 19 minutes 36 seconds West, 5 feet, more or less, to a DNR MON, thence continuing South 13 degrees 19 minutes 36 seconds West, 129.22 feet to the point of beginning and there terminating. Containing 0.12 acres, more or less, subject to existing road easements.

(d) The land is located on Little Sand Lake. The sale will be to the adjoining landowner in conjunction with an acquisition to resolve an unintentional trespass by the state which occurred when the Department of Natural Resources constructed a water access site.

Sec. 18. PUBLIC SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; COOK COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, the commissioner of natural resources may sell by public sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Cook County and is described as follows: the Northwest Quarter of the Northeast Quarter, Section 33, Township 63 North, Range 3 East, containing 40 acres, more or less.

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(d) The land borders Mons Creek and was acquired in a land exchange in 2003. The Department of Natural Resources has determined that school trust management interests would best be served if the land was sold.

Sec. 19. PUBLIC SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; COOK COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, the commissioner of natural resources may sell by public sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(1) Outlot A & Caribou Backlot, Cook County. Outlot A of White Sky, according to the plat on file and of record in the Office of the Recorder for Cook County, Minnesota, containing 0.74 acres, more or less; and

(2) that part of Government Lot 4, Section 2, Township 60 North, Range 3 West, lying northerly of Cook County Road 4, southerly of the plat of White Sky, and westerly of Lot 1, Block 1 of White Sky First Addition, according to the plats on file and of record in the Office of the Recorder for Cook County, containing 1.02 acres, more or less.

(d) The land borders Caribou Lake. The Department of Natural Resources has determined that school trust management interests would best be served if the lands were sold.

Sec. 20. PUBLIC SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; COOK COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, the commissioner of natural resources may sell by public sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Cook County and is described as follows: that part of Government Lot 10, Section 35, Township 65 North, Range 1 West, more fully described as follows: being the easterly 863.9 feet of Government Lot 10, EXCEPT the southerly 40.3 feet thereof. The west and south boundary lines being perpendicular to and parallel with the south boundary of Government Lot 10, respectively. Containing 3.3 acres, more or less.

(d) The land borders West Bearskin Lake, was acquired in a land exchange in 2000, and is not contiguous to other state lands. The Department of Natural Resources has determined that school trust management interests would best be served if the land was sold.

Sec. 21. PRIVATE SALE OF TAX-FORFEITED LAND BORDERING PUBLIC WATER; CROW WING COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, and the public sale provisions of Minnesota Statutes, chapter 282, Crow Wing County may sell by private sale the tax-forfeited land bordering public water that is described in paragraph (c), under the remaining provisions of Minnesota Statutes, chapter 282.

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(b) The conveyance must be in a form approved by the attorney general. The attorney general may make changes to the land description to correct errors and ensure accuracy. Prior to the sale, the commissioner of revenue shall grant a permanent conservation easement according to Minnesota Statutes, section 282.37, to protect aquatic habitat. The easement must be approved by the Crow Wing County Board and the commissioner of natural resources.

(c) The land to be sold is located in Crow Wing County and is described as: Government Lot 1, Section 26, Township 138 North, Range 27 West, city of Fifty Lakes.

(d) The county has determined that the county's land management interests would best be served if the land was returned to private ownership.

Sec. 22. PRIVATE SALE OF TAX-FORFEITED LAND BORDERING PUBLIC WATER; CROW WING COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, and the public sale provisions of Minnesota Statutes, chapter 282, Crow Wing County may sell to the city of Crosby the tax-forfeited land bordering public water that is described in paragraph (c), under the remaining provisions of Minnesota Statutes, chapter 282.

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make changes to the land description to correct errors and ensure accuracy.

Of a tract of land lying south of the herein described line and being out of and part of the Southeast Quarter of the Northwest Quarter, Section 11, Township 46 North, Range 29 West, except part to the city of Crosby, Crow Wing County, Minnesota, said line described as follows: Commencing at the center of Section 11, thence South 88 degrees 59 minutes 19 seconds West, coincident with the south line of said Southeast Quarter of the Northwest Quarter, 1291.01 feet to the southwest corner of said Southeast Quarter of the Northwest Quarter; thence North 02 degrees 09 minutes 21 seconds East, coincident with the west line of said Southeast Quarter of the Northwest Quarter, 531.93 feet to the point of beginning of the line herein described; thence through and across said Southeast Quarter of the Northwest Quarter of the following 21 courses and distances:

(1) South 71 degrees 26 minutes 55 seconds East, 27.36 feet;

(2) South 33 degrees 07 minutes 48 seconds East, 34.76 feet;

(3) South 87 degrees 03 minutes 06 seconds East, 64.17 feet;

(4) South 61 degrees 33 minutes 20 seconds East, 45.74 feet;

(5) South 72 degrees 07 minutes 59 seconds East, 112.59 feet;

(6) South 77 degrees 44 minutes 53 seconds East, 56.34 feet;

(7) North 70 degrees 49 minutes 46 seconds East, 83.42 feet;

(8) South 76 degrees 32 minutes 31 seconds East, 94.57 feet;

(9) North 80 degrees 41 minutes 54 seconds East, 33.03 feet;

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(10) North 83 degrees 09 minutes 05 seconds East, 41.90 feet;

(11) North 68 degrees 51 minutes 01 seconds East, 175.87 feet;

(12) South 58 degrees 17 minutes 34 seconds East, 54.35 feet;

(13) South 80 degrees 01 minutes 47 seconds East, 43.42 feet;

(14) North 36 degrees 43 minutes 03 seconds East, 84.81 feet;

(15) North 60 degrees 06 minutes 12 seconds East, 57.47 feet;

(16) South 83 degrees 31 minutes 42 seconds East, 90.21 feet;

(17) North 73 degrees 59 minutes 37 seconds East, 57.44 feet;

(18) South 65 degrees 21 minutes 29 seconds East, 81.38 feet;

(19) North 86 degrees 47 minutes 22 seconds East, 75.46 feet;

(20) North 47 degrees 10 minutes 02 seconds East, 52.07 feet; and

(21) North 63 degrees 13 minutes 46 seconds East, 48.20 feet

to the point of termination from which the point of commencing bears South 01 degrees 27 minutes 31 seconds West, 572.34 feet.

(d) The county has determined that the county's land management interests would best be served if the land was sold to the city of Crosby.

Sec. 23. CONVEYANCE OF TAX-FORFEITED LAND BORDERING PUBLIC WATER; DAKOTA COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45, 103F.535, and 282.018, subdivision 1, and the public sale provisions of Minnesota Statutes, chapter 282, Dakota County may sell or convey to the township of Ravenna for no consideration the tax-forfeited land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general and provide that the land reverts to the state if the township of Ravenna stops using the land for the public purpose described in paragraph (d). The conveyance is subject to restrictions imposed by the commissioner of natural resources. The attorney general may make changes to the land description to correct errors and ensure accuracy.

(c) The land to be conveyed is located in Dakota County and is described as: Unplatted, Section 21, Township 114, Range 16, Southeast Quarter of the Southwest Quarter, less various tracts, except West 870 feet of South 729.29 feet, except part of North 594 feet lying west of Ravenna Trail, except South 480 feet lying east of West 870 feet, except beginning at the northwest corner of the Southeast Quarter of the Southwest Quarter East 22R South 20R southwest to point on west line 22R South of beginning North 22R to beginning, except parcels 33-02100-030-53, 33-02100-040-53, 33-02100-050-53, 33-02100-060-53, and 33-02100-080-53. (Dakota County tax identification number 33-02100-018-54).

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(d) The county has determined that the land is needed by the township of Ravenna for drainage and access to culverts.

Sec. 24. PRIVATE SALE OF SURPLUS STATE LAND; HENNEPIN COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 94.09 and 94.10, the commissioner of natural resources may sell by private sale to a governmental subdivision the surplus land that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy. The commissioner may sell the land to a governmental subdivision of the state for less than the value of the land as determined by the commissioner, but the conveyance must provide that the land described in paragraph (c) be used for the public and reverts to the state if the governmental subdivision fails to provide for public use or abandons the public use of the land. The commissioner may include conservation restrictions in the conveyance deed to ensure the property is maintained as open space.

(1) the Northwest Quarter of Southwest Quarter, Section 36, Township 120 North, Range 22 West, less road right-of-way, containing 39 acres, more or less;

(2) the east six and two-thirds acres of the West Half of the Southeast Quarter of the Southwest Quarter, Section 36, Township 120 North, Range 22 West, less road right-of-way, containing 6.67 acres, more or less; and

(3) the West Quarter of the East Half of the Southeast Quarter of the Southwest Quarter, Section 36, Township 120 North, Range 22 West, less road right-of-way, containing 4.87 acres, more or less.

(d) The land was conveyed to the state for wild game reservation purposes. Due to adjacent residential use and local zoning restrictions, the land is no longer available for hunting purposes. The Department of Natural Resources has determined that the state's land management interests would best be served if the lands were conveyed to a local unit of government.

Sec. 25. PRIVATE SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; HENNEPIN COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45, 94.09, and 94.10, the commissioner of natural resources may sell by private sale to a governmental subdivision the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy. The commissioner may sell the land to a governmental subdivision of the state for less than the value of the land as determined by the commissioner, but the conveyance must provide that the land described in paragraph (c) be used for the public and reverts to the state if the governmental subdivision fails to provide for public use or abandons the public use of the land.

(c) The land that may be sold is located in Hennepin County and is described as follows: all that part of the Northwest Quarter of the Southwest Quarter and Government Lot 2, Section 25, Township 120 North, Range 22 West, lying north and westerly of the following described line: beginning at a point on the west line of said section 830.19 feet South of the west 1/4 corner thereof; thence North 36 degrees 55 minutes East, 109.88 feet; thence North 00 degrees 00 minutes, 1217.3 feet more or less to the water's edge of Haydens Lake. Subject to existing road easements. Containing 1.9 acres, more or less.

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(d) The land was purchased by the state for a water access site but has never been used as a water access site. The Department of Natural Resources has determined that the state's land management interests would best be served if the land was conveyed to a local unit of government.

Sec. 26. TAX-FORFEITED LANDS LEASE; ITASCA COUNTY.

Notwithstanding Minnesota Statutes, section 282.04, or other law to the contrary, the Itasca County auditor may lease tax-forfeited land to Minnesota Steel for a period of 20 years, for use as a tailings basin and buffer area. A lease entered under this section is renewable.

Sec. 27. PUBLIC OR PRIVATE SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; KITTSON COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45, 94.09, and 94.10, the commissioner of natural resources may sell by public or private sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy. The commissioner may sell the land to a governmental subdivision of the state for less than the value of the land as determined by the commissioner, but the conveyance must provide that the land be used for the public and reverts to the state if the governmental subdivision fails to provide for public use or abandons the public use of the land.

(1) Parcel 1: Lot 7, Block 4, Park Addition to Bronson, lying in the Southwest Quarter of the Southwest Quarter, Section 30, Township 161 North, Range 46 West, containing 0.92 acres, more or less;

(2) Parcel 2: that part of Lots 5 and 6, Block 4, Park Addition to Bronson, lying in the Southwest Quarter of the Southwest Quarter, Section 30, Township 161 North, Range 46 West, more particularly described as follows: commencing at the midpoint of the west line of said Lot 5, which point is 33 feet East of the west line of said Southwest Quarter of the Southwest Quarter of Section 30; thence East and parallel to the south line of said Lot 5, a distance of 157 feet; thence South on a straight line at right angles to the immediately preceding line of this description to the center of the south branch of Two Rivers; thence northwesterly along the center line of said south branch of Two Rivers to its intersection with a north and south line parallel to the west line of said Southwest Quarter of the Southwest Quarter of Section 30, and distant 33 feet East therefrom, which line is also the west line of said Block 4; thence North along said west line of said Block 4, to the point of beginning, containing 0.39 acres, more or less;

(3) Parcel 12: that part of Block 4, of the Park Addition to the village of Bronson, Kittson County, Minnesota, which may be more particularly described as follows: Lot 6, Block 4, with the exception of a tract consisting of the westerly 157 feet of said Lot 6, deeded to the Olof Locken Post, No. 315, of the American Legion, containing 0.68 acres, more or less; ALSO the following described portion of Lot 8 of said Block 4: commencing at a point on the west line of said Lot 8, 140 feet North of the southwest corner of said Lot 8; thence North along said west line of Lot 8, a distance of 68 feet; thence East at right angles to the said west line of Lot 8 to the east line of said Lot 8; thence South along the east line of said Lot 8, a distance of 68 feet; thence West at right angles to said east line of Lot 8 to the point of beginning, containing 0.05 acres, more or less; EXCEPTING therefrom the following described tract of land: commencing at the northeast corner of Block 4 in Park Addition to the village of Lake Bronson; thence South at right angles a distance of 265 feet to the point of beginning; thence West at right angles a distance of 143 feet; thence South at right angles a distance of 111 feet to the center of the Two Rivers; thence East at right angles a distance of 143 feet to the east line of Lot 8; thence North at right angles a distance of 111 feet to the point of beginning, being a part of Lot 6 and Lot 8 of Block 4, containing altogether 0.75 acres, more or less; and

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(4) Parcel 13: that part of Lot 8, Block 4 of the Park Addition to the village of Bronson, Kittson County, Minnesota, which may be more particularly described as follows: the South 140 feet of said Lot 8, Block 4, containing 0.10 acres, more or less; ALSO the following portion of said Lot 8: commencing at a point on the west line of said Lot 8, 208 feet North of the southwest corner of said Lot 8; thence North along said west line of Lot 8, a distance of 5.6 feet; thence East at right angles to said west line of Lot 8 to the east line of said Lot 8, thence South along said east line of Lot 8, a distance of 5.8 feet; thence West at right angles to said east line of Lot 8, to the point of beginning, containing 0.004 acres, more or less; containing altogether 0.104 acres, more or less.

(d) The land borders South Branch Two Rivers and is not contiguous to other state lands. The land was acquired for park purposes but was not included in a state park. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 28. PRIVATE SALE OF SURPLUS STATE LAND; KITTSON COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 94.09 and 94.10, the commissioner of natural resources may sell by private sale the surplus land that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Kittson County and is described as follows: a parcel of land in the Southwest Quarter of the Southeast Quarter of Section 30, Township 161 North, Range 46 West, more particularly described as follows: beginning at a point which is 33 feet North of the south line and 422 feet East of the west line of said Southwest Quarter of the Southeast Quarter; thence East parallel to said south line, 726 feet; thence North parallel to said west line, 300 feet; thence West parallel to said south line, 726 feet; thence South parallel to said west line, 300 feet to the point of beginning. Containing 5.00 acres, more or less.

(d) The sale may be to multiple parties, including the county for the county highway right-of-way, the township for the township road, and adjoining landowners to resolve unintentional agricultural trespasses. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 29. PRIVATE SALE OF SURPLUS STATE LAND; LAKE COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 94.09 and 94.10, the commissioner of natural resources may sell by private sale the surplus land that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Lake County and is described as follows: that part of the Northeast Quarter of the Southwest Quarter, Section 16, Township 57 North, Range 6 West, described as follows: commencing at the southeast corner of said Northeast Quarter of the Southwest Quarter marked by a DNR survey marker (3/4 inch x 18 inch rebar with an orange cap marked MN DNR LS 16098); thence North 89 degrees 11 minutes 24 seconds West based on the Lake County Coordinate System North Shore Zone, NAD83, 1986 adjustment, along the south line of said Northeast Quarter of the Southwest Quarter, 439.78 feet to a DNR survey marker on the westerly right-of-way of Trunk Highway 61 and the point of beginning; thence continuing North 89 degrees 11 minutes 24 seconds West along said south line 426.27 feet to a DNR survey marker; thence North 00 degrees 48 minutes 36 seconds East 100.00 feet to a DNR survey marker; thence South 89 degrees 11 minutes 24 seconds East 494.20 feet to a DNR survey marker on said westerly right-of-way; thence South 34 degrees 59 minutes 57 seconds West along said westerly right-of-way 120.89 feet, more or less, to the point of beginning. Containing 1.06 acres, more or less.

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(d) The sale would be to the adjoining landowner and resolve an unintentional trespass that occurred when a garage was constructed on state-owned land. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 30. PRIVATE SALE OF SURPLUS STATE LAND; LAKE COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 94.09 and 94.10, the commissioner of natural resources may sell by private sale the surplus land that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in Lake County and is described as follows: that part of the Northwest Quarter of the Southeast Quarter, Section 16, Township 57 North, Range 6 West, described as follows: commencing at the northwest corner of said Northwest Quarter of the Southeast Quarter marked by a DNR survey marker (3/4 inch x 18 inch rebar with an orange cap marked MN DNR LS 16098); thence South 89 degrees 14 minutes 10 seconds East based on the Lake County Coordinate System North Shore Zone, NAD83, 1986 adjustment, along the north line of said Northwest Quarter of the Southeast Quarter, 191.15 feet to a DNR survey marker and the point of beginning; thence continuing South 89 degrees 14 minutes 10 seconds East along said north line 264.92 feet to a DNR survey marker on the westerly right-of-way of Trunk Highway 61; thence South 34 degrees 59 minutes 57 seconds West along said westerly right-of-way 200.00 feet; thence North 41 degrees 54 minutes 07 seconds West 224.87 feet, more or less, to the point of beginning. Containing 0.50 acres, more or less.

(d) The sale would be to the adjoining landowner and resolve an unintentional trespass that occurred when a garage and house were constructed on state-owned land. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 31. PRIVATE SALE OF TAX-FORFEITED LAND BORDERING PUBLIC WATER; LAKE COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, and the public sale provisions of Minnesota Statutes, chapter 282, Lake County may sell by private sale the tax-forfeited land bordering public water that is described in paragraph (c), under the remaining provisions of Minnesota Statutes, chapter 282.

(b) The conveyance must be in a form approved by the attorney general for a consideration of $1 and relinquishment of a four-acre parcel of land that Lake County has used for road relocation.

(c) The land to be sold is located in Lake County and is described as: that part of the Southeast Quarter of the Northwest Quarter, north of County State-Aid Highway 14, Section 20, Township 55 North, Range 11 West.

(d) The county has determined that the county's land management interests would best be served if the land was returned to private ownership.

Sec. 32. PUBLIC SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; NICOLLET COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, the commissioner of natural resources may sell by public sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

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(1) that part of the Southwest Quarter and that part of the Southeast Quarter, Section 8, Township 109 North, Range 29 West, being described as a strip of land 300.0 feet in width lying adjacent to and northerly of the following described centerline of proposed channel change: commencing at the center of Section 8, Township 109 North, Range 20 West, from which the north quarter corner of said Section 8 bears North 0 degrees 00 minutes East, thence South 0 degrees 00 minutes East for 1280 feet on said quarter line; thence South 90 degrees 00 minutes East for 54.9 feet to road station 40+40 on the centerline of County State-Aid Highway 24 which is the true point of beginning for the centerline of channel change; thence South 75 degrees 58 minutes East for a distance of 553.5 feet on centerline of channel change; thence South 75 degrees 58 minutes East for a distance of 1540.0 feet and there terminating; and from the true point of beginning North 77 degrees 58 minutes West for a distance of 770 feet and there terminating; SAID LANDS ALSO DESCRIBED AS: a strip of land lying and being 300.0 feet each side of the following described centerline of proposed channel change: beginning at a point 1280.0 feet South and 54.9 feet East of the center of Section 8, Township 109 North, Range 29 West; thence easterly on a bearing of South 77 degrees 00 minutes East for a distance of 553.5 feet; thence easterly on a bearing of South 75 degrees 00 minutes East for a distance of 1540.0 feet and there terminating. This includes 3.005 acres in part of the North Half of the Southeast Quarter of Section 8, Township 109 North, Range 29 West, and 10.932 acres in part of Government Lot 2 of Section 8, Township 109 North, Range 29 West. Also from the point of beginning, westerly on a bearing of North 77 degrees 00 minutes West for a distance of 770.0 feet and there terminating. This includes 4.098 acres in part of the Southwest Quarter of Section 8, Township 109 North, Range 29 West. Containing 3.01 acres, more or less; and

(2) that part of the Southwest Quarter and that part of the Southeast Quarter, Section 8, Township 109 North, Range 29 West, Nicollet County, Minnesota, being described as a strip of land 300.0 feet in width lying adjacent to and southerly of the following described centerline of proposed channel change: commencing at the center of Section 8, Township 109 North, Range 20 West, from which the north quarter corner of said Section 8 bears North 0 degrees 00 minutes East; thence South 0 degrees 00 minutes East for 1280 feet on said quarter line; thence South 90 degrees 00 minutes East for 54.9 feet to road station 40+40 on the centerline of County State-Aid Highway 24 which is the true point of beginning for the centerline of channel change; thence South 75 degrees 58 minutes East for a distance of 553.5 feet on centerline of channel change; thence South 75 degrees 58 minutes East for a distance of 1540.0 feet and there terminating; and from the true point of beginning North 77 degrees 58 minutes West for a distance of 770 feet and there terminating; SAID LANDS ALSO DESCRIBED AS: a strip of land lying and being 300.0 feet each side of the following described centerline of proposed channel change: beginning at a point 1280.0 feet South and 54.9 feet East of the center of Section 8, Township 109 North, Range 29 West; thence easterly on a bearing of South 77 degrees 00 minutes East for a distance of 553.5 feet; thence easterly on a bearing of South 75 degrees 00 minutes East for a distance of 1540.0 feet and there terminating. This includes 3.005 acres in part of the North Half of the Southeast Quarter of Section 8, Township 109 North, Range 29 West, and 10.932 acres in part of Government Lot 2 of Section 8, Township 109 North, Range 29 West. Also, from the point of beginning, westerly on a bearing of North 77 degrees 00 minutes West for a distance of 770.0 feet and there terminating. This includes 4.098 acres in part of the Southwest Quarter of Section 8, Township 109 North, Range 29 West. Containing 4.10 acres, more or less.

(d) The land borders the Minnesota River. It was acquired when a new bridge was installed across the river resulting in a realignment of the river channel. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 33. PUBLIC SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; RED LAKE COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, the commissioner of natural resources may sell by public sale the surplus land bordering public water that is described in paragraph (c).

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(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(1) Government Lot 10, Section 31, Township 152 North, Range 40 West, containing 20.17 acres, more or less; and

(2) Government Lot 3, Section 34, Township 152 North, Range 40 West, containing 21.7 acres, more or less.

(d) The land borders the Clearwater River and is not contiguous to other state lands. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 34. PUBLIC SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; ST. LOUIS COUNTY.

(a) Notwithstanding Minnesota Statutes, section 92.45, the commissioner of natural resources may sell by public sale the surplus land bordering public water that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in St. Louis County and is described as follows: Government Lot 2, except the Northwest Quarter of Lot 2, Section 19, Township 58 North, Range 18 West, containing 30.84 acres, more or less.

(d) The land borders an unnamed tributary to the West Two Rivers Reservoir. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 35. PRIVATE SALE OF SURPLUS STATE LAND; ST. LOUIS COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 94.09 and 94.10, the commissioner of natural resources may sell by private sale the surplus land that is described in paragraph (c).

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy.

(c) The land that may be sold is located in St. Louis County and is described as follows: Government Lot 3, Section 18, Township 68 North, Range 19 West, containing 23.22 acres, more or less.

(d) The sale will be to the University of Minnesota for the off axis NOvA detector project. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 36. LAND EXCHANGE; ST. LOUIS COUNTY.

(a) The commissioner of natural resources shall, with the approval of the Land Exchange Board as required under the Minnesota Constitution, article XI, section 10, and according to Minnesota Statutes, sections 94.343 to 94.347, exchange the land described in paragraph (b). The commissioner shall offer to exchange the land with the holder of Department of Natural Resources lease number 144-011-0587 by December 31, 2007.

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(b) The land to be exchanged is located in St. Louis County and is described as follows: that part of Government Lot 1, Section 6, Township 58 North, Range 17 West, containing 1.98 acres more or less, that is subject to Department of Natural Resources lease number 144-011-0587.

Sec. 37. PRIVATE SALE OF TAX-FORFEITED LAND BORDERING PUBLIC WATER; ST. LOUIS COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, and the public sale provisions of Minnesota Statutes, chapter 282, St. Louis County may sell by private sale the tax-forfeited land bordering public water that is described in paragraph (c) under the remaining provisions of Minnesota Statutes, chapter 282.

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make changes to the land description to correct errors and ensure accuracy. The conveyance must reserve to the state a 100-foot easement along the shoreline to protect vegetation and allow angling by the public and a 15-foot easement from the public road right-of-way to allow angler walk-in access.

(c) The land to be sold is located in St. Louis County and is described as: Lots 7, 8, and 9, Block 2, Wonderland 1st Addition.

(d) The county has determined that the county's land management interests would best be served if the land was sold to an adjoining landowner.

Sec. 38. PUBLIC SALE OF TAX-FORFEITED LAND BORDERING PUBLIC WATER; ST. LOUIS COUNTY.

(a) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, St. Louis County may sell the tax-forfeited land bordering public water that is described in paragraph (c) under the remaining provisions of Minnesota Statutes, chapter 282.

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make changes to the land description to correct errors and ensure accuracy. The conveyance must reserve to the state a 150-foot easement of 75 feet on each side of the centerline of the East Branch of Chester Creek and a 100-foot easement of 50 feet on each side of the centerline of tributaries of Chester Creek.

(1) part of the Northeast Quarter of the Southeast Quarter, Section 9, Township 50 North, Range 14 West; and

(2) Lots 7, 8, 9, 34, 35, 36, 37, 58, 59, 60, and 61 and part of Lot 10, Englewood Farms.

(d) The county has determined that the county's land management interests would best be served if the lands were returned to private ownership.

Sec. 39. PRIVATE SALE OF TAX-FORFEITED LAND; ST. LOUIS COUNTY.

(a) Notwithstanding the public sale provisions of Minnesota Statutes, chapter 282, St. Louis County may sell by private sale the tax-forfeited land that is described in paragraph (c) under the remaining provisions of Minnesota Statutes, chapter 282.

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(b) The conveyance must be in a form approved by the attorney general. The attorney general may make changes to the land description to correct errors and ensure accuracy.

(1) part of the Southwest Quarter of the Northwest Quarter, Section 1, Township 63 North, Range 18 West;

(2) part of the Southwest Quarter of the Northeast Quarter, Section 28, Township 53 North, Range 13 West; and

(3) part of the Northeast Quarter of the Northeast Quarter, Section 9, Township 58 North, Range 16 West.

(d) The county has determined that the county's land management interests would best be served if the lands were returned to private ownership.

Sec. 40. SPARTA BEACH IN CITY OF GILBERT; ST. LOUIS COUNTY.

(a) This section applies to the land described in paragraph (b), which is owned by the city of Gilbert. The legislature finds that any fill placed along the shoreline below the historical high watermark prior to the effective date of this section does not extend beyond the ordinary low watermark and does not interfere with the public right of navigation or any other public right. Consistent with the common law of the state, the state shall not dispute the right of the owner of the land, or the owner's successors, to enjoy exclusive use of filled land in shallow waters abutting the land, subject only to the limitation that the owner or owner's successors shall not interfere with the public right of navigation.

(b) The land referred to in this section is described as follows:

That part of the North Half of Government Lot 1, Section 35, Township 58 North, Range 17 West of the Fourth Principal Meridian, St. Louis County, Minnesota, described as follows: Starting at a pipe that is on the east side of Differding Road on the north line of the plat of Birch View and assuming that the north line is East and West, thence running North 49 degrees 56 minutes West a distance of 291.00 feet to the place of beginning; thence running South 55 degrees 19 minutes West a distance of 135 feet to the shore of Ely Lake; Starting from the place of beginning, thence running North 29 degrees 01 minutes West a distance of 436.50 feet; thence running North 87 degrees 24 minutes West a distance of 302 feet to the shore of Ely Lake; thence running along the shore to the intersection with the first described.

Sec. 41. PRIVATE SALE OF SURPLUS STATE LAND BORDERING PUBLIC WATER; WASHINGTON COUNTY.

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make necessary changes to the legal description to correct errors and ensure accuracy. The commissioner may only sell the land to a governmental subdivision of the state. The conveyance may be for less than the value of the land as determined by the commissioner, but the conveyance must provide that the land be used for the public and reverts to the state if the governmental subdivision fails to provide for public use or abandons the public use of the land.

(c) The land that may be sold is located in Washington County and is described as follows, Parcels A and B containing altogether 31.55 acres, more or less:

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(1) Parcel A: all that part of the North Half of the Southeast Quarter, Section 30, Township 30 North, Range 20 West, bounded by the following described lines: commencing at the east quarter corner of said Section 30; thence on an assumed bearing of North 88 degrees 13 minutes 48 seconds West, 399.98 feet on and along the east-west quarter line of said Section 30 to the point of beginning; thence North 88 degrees 13 minutes 48 seconds West, 504.57 feet on and along the said east-west quarter line; thence South 17 degrees 54 minutes 26 seconds West, 1377.65 feet to a point on the south 1/16 line of said Section 30; thence South 88 degrees 10 minutes 45 seconds East, 504.44 feet on and along the south 1/16 line of said Section 30; thence North 17 degrees 54 minutes 26 seconds East, 1378.11 feet to the point of beginning; and

(2) Parcel B: all that part of the North Half of the Southeast Quarter, Section 30, Township 30 North, Range 20 West, bounded by the following described lines: commencing at the east quarter corner of said Section 30; thence on an assumed bearing of North 88 degrees 13 minutes 48 seconds West, 904.55 feet along the east-west quarter line of said Section 30 to the point of beginning; thence South 17 degrees 54 minutes 26 seconds West, 1377.65 feet to a point on the south 1/16 line of said Section 30; thence North 88 degrees 10 minutes 45 seconds West, 369.30 feet along said south 1/16 line; thence North 42 degrees 24 minutes 47 seconds West, 248.00 feet; thence North 02 degrees 59 minutes 30 seconds East, 488.11 feet; thence North 47 degrees 41 minutes 19 seconds East, 944.68 feet to a point on the east-west quarter line of said Section 30; thence South 88 degrees 13 minutes 48 seconds East, 236.03 feet along said east-west quarter line to the point of beginning.

(d) The land borders Long Lake and is not contiguous to other state lands. The land was donated to the state with the understanding that the land would be used as a wildlife sanctuary. The Department of Natural Resources has determined that the land is not needed for natural resource purposes.

Sec. 42. EFFECTIVE DATE.

Sections 1 to 41 are effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to state and local lands; modifying land acquisition requirements; modifying land owners' bill of rights; modifying recordation requirements for mineral interests; modifying zoning provisions for nonconforming parcels; adding to and deleting from state parks; exempting certain exchanged land from the tax-forfeited land assurance fee; authorizing certain leases of tax-forfeited lands; authorizing public and private sales and conveyances of certain state lands; providing for status of certain land in St. Louis County; amending Minnesota Statutes 2006, sections 84.0272, subdivision 3; 84.0274, subdivision 5; 93.55, subdivision 1, by adding a subdivision; 394.36, by adding a subdivision; 462.357, subdivision 1e; Laws 2006, chapter 236, article 1, section 21."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Carlson from the Committee on Finance to which was referred:

H. F. No. 1116, A bill for an act relating to game and fish; modifying definitions; providing for and modifying certain fees; modifying provisions for taking animals causing damage; modifying license and stamp provisions; modifying certain possession and taking restrictions; providing for an apprentice hunter validation; modifying commercial fishing provisions; providing for a crossbow deer season; requiring reports; requiring rulemaking; providing criminal and civil penalties; amending Minnesota Statutes 2006, sections 97A.015, subdivision 24, by

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adding a subdivision; 97A.045, by adding a subdivision; 97A.401, subdivision 5; 97A.405, subdivisions 2, 4; 97A.421, by adding a subdivision; 97A.441, subdivision 7; 97A.451, subdivisions 3, 3a; 97A.465, by adding a subdivision; 97A.473, subdivisions 3, 5; 97A.475, subdivisions 2, 3, 6; 97A.505, subdivision 4; 97A.511; 97B.015, by adding a subdivision; 97B.020; 97B.031, subdivision 1; 97B.035, by adding a subdivision; 97B.075; 97B.085, subdivision 3; 97B.301, subdivision 7; 97B.311; 97B.318, subdivision 1; 97B.327; 97B.715, subdivision 1; 97B.801; 97B.928, subdivision 1; 97C.081, subdivision 3; 97C.325; 97C.335; 97C.355, subdivision 8; 97C.371, by adding a subdivision; 97C.835, subdivisions 1, 2, 3, 8; proposing coding for new law in Minnesota Statutes, chapters 97B; 97C; repealing Minnesota Statutes 2006, sections 97A.475, subdivision 38; 97C.301, subdivision 3; 97C.365.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 2006, section 97A.015, subdivision 24, is amended to read:

Subd. 24. Game birds. "Game birds" means migratory waterfowl, ring-necked pheasant, ruffed grouse, sharp-tailed grouse, Canada spruce grouse, prairie chickens, gray partridge, bob-white quail, wild turkeys, coots, gallinules, sora and Virginia rails, mourning dove, American woodcock, and common snipe.

Sec. 2. Minnesota Statutes 2006, section 97A.015, is amended by adding a subdivision to read:

Subd. 26c. Immediately released or immediately returned to the water. "Immediately released" or "immediately returned to the water" means that a fish must not be retained longer than is needed at the site of capture to unhook, identify, measure, or photograph the fish. Placing a fish on a stringer, in a live well, or in a cooler, bucket, or other container is not "immediately released" or "immediately returned to the water."

Sec. 3. Minnesota Statutes 2006, section 97A.045, is amended by adding a subdivision to read:

Subd. 12. Establishing fees. Notwithstanding section 16A.1283, the commissioner may, by written order published in the State Register, establish fees providing for the use of state wildlife management area or aquatic management area lands for specific purposes, including dog trials and special events. The fees must be set in an amount that neither significantly overrecovers nor underrecovers costs. The fees are not subject to the rulemaking provisions of chapter 14 and section 14.386 does not apply.

Sec. 4. Minnesota Statutes 2006, section 97A.401, subdivision 5, is amended to read:

Subd. 5. Wild animals damaging property. Special permits may be issued with or without a fee to take protected wild animals ~~that are damaging property~~ or to remove or destroy their dens, nests, eggs, houses, or dams for the purpose of preventing or reducing damage or injury to people, property, and agricultural crops. The commissioner may prescribe rules for taking Canada geese and their nests and eggs, with or without a permit, consistent with federal regulations. ~~A special permit issued under this subdivision to take beaver must state the number to be taken.~~

Sec. 5. Minnesota Statutes 2006, section 97A.405, subdivision 2, is amended to read:

Subd. 2. Personal possession. (a) A person acting under a license or traveling from an area where a licensed activity was performed must have in personal possession either: (1) the proper license, if the license has been issued to and received by the person; or (2) the proper license identification number or stamp validation, if the license has been sold to the person by electronic means but the actual license has not been issued and received.

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(b) If possession of a license or a license identification number is required, a person must exhibit, as requested by a conservation officer or peace officer, either: (1) the proper license if the license has been issued to and received by the person; or (2) the proper license identification number or stamp validation and a valid state driver's license, state identification card, or other form of identification provided by the commissioner, if the license has been sold to the person by electronic means but the actual license has not been issued and received. A person charged with violating the license possession requirement shall not be convicted if the person produces in court or the office of the arresting enforcement officer the actual license previously issued to that person, which was valid at the time of arrest, or satisfactory proof that at the time of the arrest the person was validly licensed. Upon request of an enforcement officer, a licensee shall write the licensee's name in the presence of the officer to determine the identity of the licensee.

(c) If the actual license has been issued and received, a receipt for license fees, a copy of a license, or evidence showing the issuance of a license, including the license identification number or stamp validation, does not entitle a licensee to exercise the rights or privileges conferred by a license.

(d) A license ~~or stamp~~ issued electronically and not immediately provided to the licensee shall be mailed to the licensee within 30 days of purchase of the license ~~or stamp validation, except for a pictorial turkey stamp or a pictorial trout and salmon stamp~~. A pictorial turkey ~~stamp or a pictorial~~, migratory waterfowl, pheasant, or trout and salmon stamp shall be ~~mailed~~ provided to the licensee after purchase of a ~~license or~~ stamp validation only if the licensee pays an additional $2 fee.

Sec. 6. Minnesota Statutes 2006, section 97A.405, subdivision 4, is amended to read:

Subd. 4. Replacement licenses. (a) The commissioner may permit licensed deer hunters to change zone, license, or season options. The commissioner may issue a replacement license if the applicant submits the original deer license and unused tags that are being replaced and the applicant pays any increase in cost between the original and the replacement license. A refund of the difference in fees may be issued when a person changes from a regular deer license to a youth deer license. When a person submits both an archery and a firearms license for replacement, the commissioner may apply the value of both licenses towards the replacement license fee.

(b) A replacement license may be issued only if the applicant has not used any tag from the original license or licenses and meets the conditions of paragraph (c). The original license or licenses and all unused tags ~~for that license~~ for the licenses being replaced must be submitted to the issuing agent at the time the replacement license is issued.

(c) A replacement license may be issued under the following conditions, or as otherwise prescribed by rule of the commissioner:

(1) when the season for the license being surrendered has not yet opened; or

(2) when the person is upgrading from a regular firearms or archery deer license to ~~a multizone or~~ an all season deer license.;

(3) when the person is upgrading from a regular firearms license to a multizone deer license; or

(4) when the person is changing from a regular firearms deer license to a youth deer license.

(d) Notwithstanding section 97A.411, subdivision 3, a replacement license is valid immediately upon issuance if the license being surrendered is valid at that time.

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Sec. 7. Minnesota Statutes 2006, section 97A.441, subdivision 7, is amended to read:

Subd. 7. Owners or tenants of agricultural land. (a) The commissioner may issue, without a fee, a license to take an antlerless deer to a person who is an owner or tenant ~~and is living and actively farming on~~ of at least 80 acres of agricultural land, as defined in section 97B.001, in deer permit areas that have deer archery licenses to take additional deer under section 97B.301, subdivision 4. A person may receive only one license per year under this subdivision. For properties with co-owners or cotenants, only one co-owner or cotenant may receive a license under this subdivision per year. The license issued under this subdivision is restricted to land leased for agricultural purposes or owned by the holder of the license within the permit area where the qualifying land is located. The holder of the license may transfer the license to the holder's spouse or dependent. Notwithstanding sections 97A.415, subdivision 1, and 97B.301, subdivision 2, the holder of the license may purchase an additional license for taking deer and may take an additional deer under that license.

(b) A person who obtains a license under paragraph (a) must allow public deer hunting on their land during that deer hunting season, with the exception of the first Saturday and Sunday during the deer hunting season applicable to the license issued under section 97A.475, subdivision 2, clauses (4) and (13).

Sec. 8. Minnesota Statutes 2006, section 97A.445, is amended by adding a subdivision to read:

Subd. 6. Angling; Boy Scouts and Girl Scouts Ice Fishing Weekend. A resident over age 18 may take fish by angling without a license during one three-day consecutive period of the winter angling season designated by the commissioner if accompanied by a Boy Scout troop or troops or Girl Scout troop or troops whose active members participating in the ice fishing weekend are each under age 16. The resident must obtain a certificate from the commissioner signifying permission for the group to angle in a named body of water. During the first day of the three-day consecutive period, the commissioner must designate an authorized representative to visit each Boy Scout troop or troops and Girl Scout troop or troops at the named body of water and provide educational information, including ice safety information and angling instruction. A resident in possession of the certificate is also exempt from any fish house and dark house licensing fees levied under section 97A.475, subdivision 11, during the three-day period. The commissioner shall publicize the three-day period as "Boy Scouts and Girl Scouts Ice Fishing Weekend."

Sec. 9. Minnesota Statutes 2006, section 97A.451, subdivision 3, is amended to read:

Subd. 3. Residents under age 16; small game. (a) A resident under age 16 may not obtain a small game license but may take small game by firearms or bow and arrow without a license if the resident is:

(1) age 14 or 15 and possesses a firearms safety certificate;

(2) age 13, possesses a firearms safety certificate, and is accompanied by a parent or guardian; or

(3) age 13, 14, or 15, possesses an apprentice hunter validation, and is accompanied by a parent or guardian who possesses a small game license that was not obtained using an apprentice hunter validation; or

~~(3)~~ (4) age 12 or under and is accompanied by a parent or guardian.

(b) A resident under age 16 may take small game by trapping without a small game license, but a resident 13 years of age or older must have a trapping license. A resident under age 13 may trap without a trapping license, but may not register fisher, otter, bobcat, or pine marten unless the resident is at least age five. Any fisher, otter, bobcat, or pine marten taken by a resident under age five must be included in the limit of the accompanying parent or guardian.

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(c) A resident under age 12 may apply for a turkey license and may take a turkey without a firearms safety certificate if the resident is accompanied by an adult parent or guardian who has a firearms safety certificate.

Sec. 10. Minnesota Statutes 2006, section 97A.451, subdivision 3a, is amended to read:

Subd. 3a. Nonresidents under age 16 18; small game. (a) A nonresident under age 16 18 may obtain a small game license at the resident fee under section 97A.475, subdivision 2, clause (2), if the nonresident:

(1) possesses a firearms safety certificate; or

(2) if age 13 or under, is accompanied by a parent or guardian when purchasing the license.

(b) A nonresident age 13 or under must be accompanied by a parent or guardian to take small game. A nonresident age 12 or under is not required to possess a firearms safety certificate under section 97B.020 to take small game.

Sec. 11. Minnesota Statutes 2006, section 97A.465, is amended by adding a subdivision to read:

Subd. 1a. Spouses of residents on active military duty. Notwithstanding section 97A.405, subdivision 5, the spouse of a resident who is on active military duty may obtain resident hunting and fishing licenses.

Sec. 12. Minnesota Statutes 2006, section 97A.473, subdivision 3, is amended to read:

Subd. 3. Lifetime small game hunting license; fee. (a) A resident lifetime small game hunting license authorizes a person to hunt and trap small game in the state. The license authorizes those hunting and trapping activities authorized by the annual resident small game hunting ~~license~~ and trapping licenses. The license does not include a turkey stamp validation or any other hunting stamps required by law.

(b) The fees for a resident lifetime small game hunting license are:

(1) age 3 and under, $217;

(2) age 4 to age 15, $290;

(3) age 16 to age 50, $363; and

(4) age 51 and over, $213.

EFFECTIVE DATE. This section is effective August 1, 2007, and applies retroactively to licenses issued after February 28, 2001.

Sec. 13. Minnesota Statutes 2006, section 97A.473, subdivision 5, is amended to read:

Subd. 5. Lifetime sporting license; fee. (a) A resident lifetime sporting license authorizes a person to take fish by angling and hunt and trap small game in the state. The license authorizes those activities authorized by the annual resident angling ~~and~~, resident small game hunting, and resident trapping licenses. The license does not include a trout and salmon stamp validation, a turkey stamp validation, or any other hunting stamps required by law.

(b) The fees for a resident lifetime sporting license are:

(1) age 3 and under, $357;

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(2) age 4 to age 15, $480;

(3) age 16 to age 50, $613; and

(4) age 51 and over, $413.

EFFECTIVE DATE. This section is effective August 1, 2007, and applies retroactively to licenses issued after February 28, 2001.

Sec. 14. Minnesota Statutes 2006, section 97A.475, subdivision 2, is amended to read:

Subd. 2. Resident hunting. Fees for the following licenses, to be issued to residents only, are:

(1) for persons age 18 or over and under age 65 to take small game, $12.50;

(2) for persons ages 16 and 17 and age 65 or over, $6 to take small game;

(3) to take turkey, $18;

(4) for persons age 18 or over to take deer with firearms, $26;

(5) for persons age 18 or over to take deer by archery, $26;

(6) to take moose, for a party of not more than six persons, $310;

(7) to take bear, $38;

(8) to take elk, for a party of not more than two persons, $250;

(9) multizone license to take antlered deer in more than one zone, $52;

(10) to take Canada geese during a special season, $4;

(11) all season license to take ~~two~~ three deer throughout the state in any open deer season, except as restricted under section 97B.305, $78;

(12) to take prairie chickens, $20;

(13) for persons at least age 12 and under age 18 to take deer with firearms during the regular firearms season in any open zone or time period, $13; and

(14) for persons at least age 12 and under age 18 to take deer by archery, $13.

Sec. 15. Minnesota Statutes 2006, section 97A.475, subdivision 3, is amended to read:

Subd. 3. Nonresident hunting. Fees for the following licenses, to be issued to nonresidents, are:

(1) for persons age 18 and older to take small game, $73;

(2) for persons age 18 and older to take deer with firearms, $135;

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(3) for persons age 18 and older to take deer by archery, ~~the greater of:~~

~~(i) an amount equal to the total amount of license fees and surcharges charged to a Minnesota resident to take deer by archery in the person's state or province of residence; or~~

~~(ii)~~ $135;

(4) to take bear, $195;

(5) to take turkey, $73;

(6) to take raccoon, bobcat, fox, or coyote, $155;

(7) multizone license to take antlered deer in more than one zone, $270; ~~and~~

(8) to take Canada geese during a special season, $4.;

(9) for persons at least age 12 and under age 18 to take deer with firearms during the regular firearms season in any open zone or time period, $13; and

(10) for persons at least age 12 and under age 18 to take deer by archery, $13.

Sec. 16. Minnesota Statutes 2006, section 97A.475, subdivision 16, is amended to read:

Subd. 16. Resident hunting guides. The fee for a resident license to guide bear hunters is $82.50 and is available only to a Minnesota resident individual.

Sec. 17. Minnesota Statutes 2006, section 97A.505, subdivision 4, is amended to read:

Subd. 4. Storage of protected wild animals. A person that stores protected wild animals for others must plainly mark the package, in ink, with the name and address of the owner, the license number of the person taking the animal, and the number and species in the package. ~~A person may not use a commercial cold storage warehouse for protected wild animals, except lawfully taken fish and furs.~~

Sec. 18. Minnesota Statutes 2006, section 97A.511, is amended to read:

97A.511 FUR-BEARING ANIMALS.

The skins of fur-bearing animals and the flesh of beaver, muskrat, raccoon, rabbits and hares, legally taken and bearing the required seals or tags required by the game and fish laws, may be bought, sold, and transported at any time. ~~The flesh of beaver, raccoon, rabbits, and hare may not be transported out of the state.~~

Sec. 19. Minnesota Statutes 2006, section 97B.015, is amended by adding a subdivision to read:

Subd. 5a. Exemption for military personnel. Notwithstanding subdivision 5, a person who has successfully completed basic training in the United States armed forces is exempt from the range and shooting exercise portion of the required course of instruction for the firearms safety certificate. The commissioner may require written proof of the person's military training, as deemed appropriate for implementing this subdivision. The commissioner shall publicly announce this exemption from the range and shooting exercise requirement and the availability of the department's online, remote study option for adults seeking firearms safety certification. Military personnel are not exempt from any other requirement of this section for obtaining a firearms safety certificate.

EFFECTIVE DATE. This section is effective the day following final enactment and applies to applications for certificates made on or after that date.

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Sec. 20. Minnesota Statutes 2006, section 97B.020, is amended to read:

97B.020 FIREARMS SAFETY CERTIFICATE REQUIRED.

(a) Except as provided in this section and section 97A.451, subdivision 3a, a person born after December 31, 1979, may not obtain an annual license to take wild animals by firearms unless the person has:

(1) a firearms safety certificate or equivalent certificate;

(2) a driver's license or identification card with a valid firearms safety qualification indicator issued under section 171.07, subdivision 13;

(3) a previous hunting license with a valid firearms safety qualification indicator; or

(4) an apprentice hunter validation issued under section 97B.022; or

~~(4)~~ (5) other evidence indicating that the person has completed in this state or in another state a hunter safety course recognized by the department under a reciprocity agreement or certified by the department as substantially similar.

(b) A person who is on active duty and has successfully completed basic training in the United States armed forces, reserve component, or National Guard may obtain a hunting license or approval authorizing hunting regardless of whether the person is issued a firearms safety certificate.

(c) A person born after December 31, 1979, may not use a lifetime license to take wild animals by firearms, unless the person meets the requirements for obtaining an annual license under paragraph (a) or (b).

Sec. 21. [97B.022] APPRENTICE HUNTER VALIDATION.

Subdivision 1. Definition. For the purpose of this section, "accompanied" means to stay within a distance of another person that permits uninterrupted visual contact and unaided verbal communication.

Subd. 2. Apprentice hunter validation requirements. A resident born after December 31, 1979, who is age 12 or older and who does not possess a firearms safety certificate may be issued an apprentice hunter validation. An apprentice hunter validation is valid for only one license year in a lifetime. An individual in possession of an apprentice hunter validation may hunt small game and deer only when accompanied by an adult licensed to hunt in Minnesota whose license was not obtained using an apprentice hunter validation. An apprentice hunter validation holder must obtain all required licenses and stamps.

Sec. 22. Minnesota Statutes 2006, section 97B.031, subdivision 1, is amended to read:

Subdivision 1. Firearms and ammunition that may be used to take big game. (a) A person may take big game with a firearm only if:

(1) the rifle, shotgun, and handgun used is a caliber of at least .23 inches;

(2) the firearm is loaded only with single projectile ammunition;

(3) a projectile used is a caliber of at least .23 inches and has a soft point or is an expanding bullet type;

(4) the ammunition has a case length of at least 1.285 inches;

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(5) the muzzle-loader used is incapable of being loaded at the breech;

(6) the smooth-bore muzzle-loader used is a caliber of at least .45 inches; and

(7) the rifled muzzle-loader used is a caliber of at least .40 inches.

(b) Notwithstanding paragraph (a), clause (4), a person may take big game with a ten millimeter cartridge that is at least 0.95 inches in length, a .45 Winchester Magnum cartridge, or a .50 A. E. (Action Express) handgun cartridge, or a 56-46 Spencer, 56-50 Spencer, or 56-56 Spencer cartridge.

Sec. 23. Minnesota Statutes 2006, section 97B.035, is amended by adding a subdivision to read:

Subd. 1a. Minimum draw weight. A bow used to take big game must have a pull that meets or exceeds 30 pounds at or before full draw.

Sec. 24. Minnesota Statutes 2006, section 97B.055, subdivision 3, is amended to read:

Subd. 3. Hunting from vehicle by disabled hunters. (a) The commissioner may issue a special permit, without a fee, to discharge a firearm or bow and arrow from a stationary motor vehicle to a person who obtains the required licenses and who has a permanent or chronic physical disability that is more substantial than discomfort from walking. The permit recipient must be:

(1) unable to step from a vehicle without aid of a wheelchair, crutches, braces, or other mechanical support or prosthetic device; or

(2) unable to walk any distance because of a permanent or chronic lung, heart, or other internal disease ~~that requires the person to use supplemental oxygen to assist breathing~~.

(b) The permanent or chronic physical disability must be established by medical evidence verified in writing by a licensed physician or chiropractor. The commissioner may request additional information from the physician or chiropractor if needed to verify the applicant's eligibility for the permit. Notwithstanding section 97A.418, the commissioner may, in consultation with appropriate advocacy groups, establish reasonable minimum standards for permits to be issued under this section. In addition to providing the medical evidence of a permanent disability, the applicant must possess a valid disability parking certificate authorized by section 169.345 or license plates issued under section 168.021.

(c) A person issued a special permit under this subdivision and hunting deer may take a deer of either sex, except in those antlerless permit areas and seasons where no antlerless permits are offered. This subdivision does not authorize another member of a party to take an antlerless deer under section 97B.301, subdivision 3.

(d) A permit issued under this subdivision is valid for five years.

(e) The commissioner may deny, modify, suspend, or revoke a permit issued under this section for cause, including a violation of the game and fish laws or rules.

(f) A person who knowingly makes a false application or assists another in making a false application for a permit under this section is guilty of a misdemeanor. A physician or chiropractor who fraudulently certifies to the commissioner that a person is permanently or chronically disabled as described in this section is guilty of a misdemeanor.

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Sec. 25. Minnesota Statutes 2006, section 97B.075, is amended to read:

97B.075 HUNTING RESTRICTED BETWEEN EVENING AND MORNING.

(a) A person may not take protected wild animals, except raccoon and fox, with a firearm between the evening and morning times established by commissioner's rule, except as provided in this section.

(b) Big game may be taken from one-half hour before sunrise until one-half hour after sunset.

(c) Except as otherwise prescribed by the commissioner on or before the Saturday nearest October 8, waterfowl may be taken from one-half hour before sunrise until sunset during the entire season prescribed by the commissioner. On the opening day of the duck season, shooting hours for migratory game birds, except woodcock, begin at 9:00 a.m.

Sec. 26. Minnesota Statutes 2006, section 97B.085, subdivision 3, is amended to read:

Subd. 3. Communication excepted. This section does not prohibit the use of:

(1) one-way radio communication between a handler and a dog.; or

(2) a remote-controlled animal noise caller used for fox, crows, bobcat, raccoon, and coyote.

Sec. 27. [97B.086] POSSESSION OF NIGHT VISION EQUIPMENT.

(a) A person may not possess night vision goggle equipment while taking or attempting to take wild animals or while having in possession, either individually or as one of a group of persons, a firearm, bow, or other implement that could be used to take wild animals.

(b) This section does not apply to a firearm that is:

(1) unloaded;

(2) in a gun case expressly made to contain a firearm that fully encloses the firearm by being zipped, snapped, buckled, tied, or otherwise fastened without any portion of the firearm exposed; and

(3) in the closed trunk of a motor vehicle.

(1) completely encased or unstrung; and

(2) in the closed trunk of a motor vehicle.

(d) If the motor vehicle under paragraph (b) or (c) does not have a trunk, the firearm or bow must be placed in the rearmost location of the vehicle.

(e) This section does not apply to night vision goggle equipment possessed by peace officers or military personnel while exercising their duties.

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Sec. 28. Minnesota Statutes 2006, section 97B.301, subdivision 7, is amended to read:

Subd. 7. All season deer license. (a) A resident may obtain an all season deer license that authorizes the resident to hunt during the archery, regular firearms, and muzzle-loader seasons. The all season license is valid for taking three deer, no more than one of which may be a legal buck.

(b) The all season deer license is valid for taking antlerless deer as ~~follows:~~

~~(1) up to two antlerless deer may be taken during the archery or muzzle-loader seasons in any open area or during the regular firearms season in managed or intensive deer areas; and~~

~~(2) one antlerless deer may be taken during the regular firearms season in a lottery deer area, only with an either-sex permit or statutory exemption from an either-sex permit.~~ prescribed by the commissioner.

Sec. 29. Minnesota Statutes 2006, section 97B.311, is amended to read:

97B.311 DEER SEASONS AND RESTRICTIONS.

(a) The commissioner may, by rule, prescribe restrictions and designate areas where deer may be taken, including hunter selection criteria for special hunts established under section 97A.401, subdivision 4. The commissioner may, by rule, prescribe the open seasons for deer within the following periods:

(1) taking with firearms, other than muzzle-loading firearms, between November 1 and December 15;

(2) taking with muzzle-loading firearms between September 1 and December 31; and

(3) taking by archery between September 1 and December 31.

(b) Notwithstanding paragraph (a), the commissioner may establish special seasons within designated areas at any time of year.

~~(c) Smokeless gunpowder may not be used in a muzzle-loader during the muzzle-loader season.~~

Sec. 30. Minnesota Statutes 2006, section 97B.318, subdivision 1, is amended to read:

Subdivision 1. Shotgun use area. During the regular firearms season in the shotgun use area, only legal shotguns loaded with single-slug shotgun shells, legal muzzle-loading long guns, and legal handguns may be used for taking deer. Legal shotguns include those with rifled barrels. The shotgun use area is that portion of the state lying within the following described boundary: Beginning on the west boundary of the state at ~~U.S. Highway 10; thence along U.S. Highway 10~~ the northern boundary of Clay County; thence along the northern boundary of Clay County to State Trunk Highway (STH) 32; thence along STH 32 to STH 34; thence along STH 34 to Interstate Highway 94 (I-94); thence along I-94 to County State-Aid Highway (CSAH) 40, Douglas County; thence along CSAH 40 to CSAH 82, Douglas County; thence along CSAH 82 to CSAH 22, Douglas County; thence along CSAH 22 to CSAH 6, Douglas County; thence along CSAH 6 to CSAH 14, Douglas County; thence along CSAH 14 to STH 29; thence along STH 29 to CSAH 46, Otter Tail County; thence along CSAH 46, Otter Tail County, to CSAH 22, Todd County; thence along CSAH 22 to U.S. Highway 71; thence along U.S. Highway 71 to STH 27; thence along STH 27 to the Mississippi River; thence along the east bank of the Mississippi River to STH 23; thence along STH 23 to STH 95; thence along STH 95 to U.S. Highway 8; thence along U.S. Highway 8 to the eastern boundary of the state; thence along the east, south, and west boundaries of the state to the point of beginning.

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Sec. 31. Minnesota Statutes 2006, section 97B.327, is amended to read:

97B.327 REPORT; DEER OTHER THAN WHITE-TAILED OR MULE.

A hunter legally taking a deer that is not a white-tailed or mule deer must report the type of deer taken to the commissioner of natural resources within seven days of taking. Violation of this section ~~shall not result in a penalty and is not subject to section 97A.301~~ will result in a civil penalty of $100.

Sec. 32. [97B.328] BAITING PROHIBITED.

A person may not hunt deer (1) with the aid or use of bait, (2) in the vicinity of bait if the person knows or has reason to know that bait is present, or (3) in the vicinity of where the person has placed bait or caused bait to be placed within the previous ten days. This restriction does not apply to food resulting from normal or accepted farming, forest management, wildlife food plantings, orchard management, or other similar land management activities, and does not prohibit an adjacent landowner, who has not participated in or agreed to feeding wildlife on the adjacent land, from taking a deer during the hunting season on the adjacent landowner's land.

Sec. 33. Minnesota Statutes 2006, section 97B.715, subdivision 1, is amended to read:

Subdivision 1. Stamp required. (a) Except as provided in paragraph (b) or section 97A.405, subdivision 2, a person required to possess a small game license may not hunt pheasants without:

~~(1) a pheasant stamp in possession; and~~

~~(2)~~ a pheasant stamp validation ~~on the small game license when issued electronically~~.

(b) The following persons are exempt from this subdivision:

(1) residents under age 18 or over age 65;

(2) persons hunting on licensed commercial shooting preserves; and

(3) resident disabled veterans with a license issued under section 97A.441, subdivision 6a.

Sec. 34. Minnesota Statutes 2006, section 97B.801, is amended to read:

97B.801 MINNESOTA MIGRATORY WATERFOWL STAMP REQUIRED.

(a) Except as provided in this section or section 97A.405, subdivision 2, a person required to possess a small game license may not take migratory waterfowl without:

~~(1) a Minnesota migratory waterfowl stamp in possession; and~~

~~(2)~~ a migratory waterfowl stamp validation ~~on the small game license when issued electronically~~.

(b) Residents under age 18 or over age 65; resident disabled veterans with a license issued under section 97A.441, subdivision 6a; and persons hunting on their own property are not required to possess a stamp ~~or a license~~ validation under this section.

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Sec. 35. Minnesota Statutes 2006, section 97B.928, subdivision 1, is amended to read:

Subdivision 1. Information required. (a) A person may not set or place a trap or snare, other than on property owned or occupied by the person, unless the following information is affixed to the trap or snare in a manner that ensures that the information remains legible while the trap or snare is on the lands or waters:

(1) the number and state of the person's driver's license;

(2) the person's Minnesota identification card number; or

(3) the person's name and mailing address.; or

(4) the license identification number issued by the Department of Natural Resources.

(b) The commissioner may not prescribe additional requirements for identification of traps or snares.

(c) Until March 1, 2013, the driver's license number under paragraph (a), clause (1), may be the person's previously issued Minnesota driver's license number.

Sec. 36. Minnesota Statutes 2006, section 97C.325, is amended to read:

97C.325 ~~PROHIBITED METHODS OF~~ RESTRICTIONS ON TAKING FISH.

(a) Except as specifically authorized, a person may not take fish with:

(1) explosives, chemicals, drugs, poisons, lime, medicated bait, fish berries, or other similar substances;

(2) substances or devices that kill, stun, or affect the nervous system of fish;

(3) nets, traps, trot lines, or snares; or

(4) spring devices that impale, hook, or capture fish.

(b) If a person possesses a substance or device listed in paragraph (a) on waters, shores, or islands, it is presumptive evidence that the person is in violation of this section.

(c) The commissioner may, by rule, allow the use of a nonmotorized device with a recoil mechanism to take fish through the ice.

(d) To protect water quality or improve habitat for fish or wildlife, the commissioner may prescribe restrictions on fishing seasons, limits, or methods on specific bodies of water.

Sec. 37. Minnesota Statutes 2006, section 97C.335, is amended to read:

97C.335 USE OF ARTIFICIAL LIGHTS TO TAKE FISH PROHIBITED.

A person may not use artificial lights to lure or attract fish or to see fish in the water while spearing, except that while angling or spearing, a person may:

(1) affix ~~to the end of a fishing line~~ a lighted artificial bait with hooks attached to the end of a fishing line; or

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(2) use a lighted decoy for spearing.

Any battery that is used in lighted fishing lures cannot contain any intentionally introduced mercury.

Sec. 38. Minnesota Statutes 2006, section 97C.355, subdivision 8, is amended to read:

Subd. 8. Confiscation of unlawful structures; civil penalty. (a) Structures on the ice in violation of this section may be confiscated and disposed of, retained by the division, or sold at the highest price obtainable, in a manner prescribed by the commissioner.

(b) In addition to other penalties provided by law, the owner of a structure left on the ice in violation of this section is subject to a civil penalty under section 115A.99.

Sec. 39. Minnesota Statutes 2006, section 97C.371, is amended by adding a subdivision to read:

Subd. 5. Sucker season. Notwithstanding any other law to the contrary, the commissioner may allow spearing and dip netting of sucker before May 1 when weather conditions warrant it and the earlier season would not interfere with spawning of other fish. The commissioner must post notice of the earlier spring opening by both print and electronic means. Regional fisheries chiefs in any of the department's regions may recommend the earlier spring opening for sucker spearing and dip netting to the commissioner.

Sec. 40. [97C.417] REPORTING ASIAN CARP.

A person who takes any of the following Asian carp species must report the type of carp taken to the commissioner within seven days of taking:

(1) grass carp (Ctenopharyngodon idella);

(2) bighead carp (Hypophthalmichthys nobilis); or

(3) silver carp (Hypophthalmichthys molitrix).

Sec. 41. Minnesota Statutes 2006, section 97C.835, subdivision 1, is amended to read:

Subdivision 1. Commercial fishing license for Lake Superior. (a) A license to fish commercially in Lake Superior shall be issued to a maximum of 50 25 residents. To qualify for licensing, a resident must have landed fish in the previous year with a value of at least $1,500, and must have engaged in commercial fishing for at least 30 days of the previous year. An applicant may be issued a license, at the discretion of the commissioner, if failure to meet the requirements for the dollar value of fish landed or number of days fished resulted from illness or other mitigating circumstances, or the applicant has reached the age of 65 and has been licensed at least five of the previous ten years.

(b) A license may be issued to a resident who has not previously fished commercially on Lake Superior and has not been convicted of a game and fish law violation in the preceding three years, if the applicant:

(1) shows a bill of sale indicating the purchase of gear and facilities connected with an existing license;

(2) shows proof of inheritance of all the gear and facilities connected with an existing license; or

(3) has served at least two years as an apprentice in a Minnesota Lake Superior licensed commercial fishing operation.

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Sec. 42. Minnesota Statutes 2006, section 97C.835, subdivision 2, is amended to read:

Subd. 2. Types of fish permitted. Lake trout, ciscoes, chubs, alewives, lake whitefish, round whitefish, ~~pygmy whitefish,~~ rainbow smelt, and rough fish may be taken by licensed commercial fishing operators from Lake Superior, in accordance with this section.

Sec. 43. Minnesota Statutes 2006, section 97C.835, subdivision 3, is amended to read:

Subd. 3. Pound nets and trap nets. Pound or trap nets may be used to take lake whitefish, round whitefish, ~~pygmy whitefish,~~ ciscoes, chubs, alewives, rainbow smelt, and rough fish in Lake Superior, including St. Louis Bay east of the U.S. Highway 53 bridge, under the rules prescribed by the commissioner.

Sec. 44. Minnesota Statutes 2006, section 97C.835, subdivision 8, is amended to read:

Subd. 8. Special permits. The commissioner may issue special permits to duly licensed commercial fishing operators ~~not exceeding 20 in number,~~ for the purpose of taking lake trout, ciscoes, and lake whitefish ~~spawn during the closed season for the propagation of trout~~ in Lake Superior and adjacent waters under rules prescribed by the commissioner.

Sec. 45. [97C.836] LAKE SUPERIOR LAKE TROUT EXPANDED ASSESSMENT HARVEST.

The commissioner shall provide for taking of lake trout by licensed commercial operators in Lake Superior management zones MN-3 and MN-2 for expanded assessment and sale. The commissioner shall authorize expanded assessment taking and sale of lake trout in Lake Superior management zone MN-3 beginning in 2007 and zone MN-2 beginning in 2010. Total assessment taking and sale may not exceed 3,000 lake trout in zone MN-3 and 2,000 lake trout in zone MN-2 and may be reduced when necessary to protect the lake trout population or to manage the effects of invasive species or fish disease. Taking lake trout for expanded assessment and sale shall be allowed from June 1 to September 30, but may end earlier in the respective zones if the quotas are reached. The quotas must be reassessed at the expiration of the current ten-year Fisheries Management Plan for the Minnesota Waters of Lake Superior dated September 2006.

Sec. 46. RULE AMENDMENTS.

The commissioner of natural resources may use the good cause exemption under Minnesota Statutes, section 14.388, subdivision 1, clause (3), to amend rules to conform to sections 41 to 45. Minnesota Statutes, section 14.386, does not apply to the rulemaking under this section except to the extent provided under Minnesota Statutes, section 14.388.

Sec. 47. LAKE TROUT REPORT.

By February 1, 2008, the commissioner of natural resources must review and report to the legislative policy committees with jurisdiction over natural resources on the pros and cons of changing the winter lake trout season so that it would be open from the Saturday nearest January 1 to March 31.

Sec. 48. ACCESS TO MINNESOTA OUTDOORS PLAN.

Subdivision 1. Walk-in access plan. (a) The commissioner of natural resources shall prepare a plan for a walk-in public access program under which the commissioner may encourage owners and operators of privately held land to voluntarily make that land available for walk-in access by the public for hunting and fishing under programs administered by the commissioner.

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(b) As part of the plan, the commissioner shall explore entering into contracts with the owners or lessees of land to establish voluntary walk-in public access for hunting, fishing, or other wildlife-dependent recreational activities.

(1) the costs and benefits that private land access will provide the public, such as hunting, fishing, bird watching, and related outdoor activities; and

(2) the types of game, fish, and wildlife habitat improvements made to the land that will enhance public uses.

(d) The commissioner shall explore the effectiveness and public and private cost of walk-in public access programs in other states and recommend walk-in program options for public access to private lands for hunting, fishing, and related recreational activities.

Subd. 2. Other law. Nothing in the plan may preempt trespass and liability laws. Recommendations submitted by the commissioner of natural resources under subdivision 3 shall include any changes to Minnesota Statutes, sections 604A.20 to 604A.27, necessary to ensure that landowners are not exposed to additional liability as a result of the walk-in access program.

Subd. 3. Report. The commissioner must present the walk-in public access plan to the house and senate committees with jurisdiction over natural resources policy and finance, with recommendations on program implementation, by January 15, 2008.

Sec. 49. COCK PHEASANT BAG LIMIT; RULEMAKING.

The commissioner of natural resources shall amend Minnesota Rules, part 6234.0400, subpart 2, to allow a person to take up to three cock pheasants per day and have 12 in possession after the 16th day of the pheasant season. The commissioner may use the good cause exemption under Minnesota Statutes, section 14.388, subdivision 1, clause (3), to adopt the rule and Minnesota Statutes, section 14.386, does not apply, except as provided under Minnesota Statutes, section 14.388.

Sec. 50. CROSSBOW DEER SEASON.

Notwithstanding Minnesota Statutes, section 97B.035, or other law to the contrary, the commissioner of natural resources shall establish an open season for taking deer by crossbow during the regular firearm season each year. Crossbows must meet the requirements of Minnesota Statutes, section 97B.106, subdivision 2. A person taking deer by crossbow must have a crossbow deer hunting license. The fee for a resident crossbow deer hunting license is $26 and the fee for a nonresident crossbow deer hunting license is $135. The commissioner may adopt exempt rules regulating the crossbow deer season according to Minnesota Statutes, section 14.386. Notwithstanding Minnesota Statutes, section 14.386, a rule adopted under this section is effective until January 1, 2009.

EFFECTIVE DATE. This section is effective the day following final enactment and expires January 1, 2009.

Sec. 51. CROSSBOW SEASON REPORT.

By February 1, 2009, the commissioner of natural resources shall submit a report to the chairs of the house and senate committees having jurisdiction over natural resources that includes the number of crossbow deer season licenses issued under section 50 and addresses whether there was an increase in hunting problems during the time a crossbow deer season was permitted.

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Sec. 52. RULE AMENDMENTS.

The commissioner of natural resources shall amend Minnesota Rules, parts 6262.0100, subpart 5, item D, and 6266.0700, subpart 3, to allow an angler in an icehouse to possess fillets of a fish with size restrictions if the angler is preparing and using the fish for a meal. The commissioner may use the good cause exemption under Minnesota Statutes, section 14.388, subdivision 1, clause (3), to adopt rules according to this section and Minnesota Statutes, section 14.386, does not apply except as provided under Minnesota Statutes, section 14.388.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 53. REPEALER.

Minnesota Statutes 2006, sections 97A.475, subdivision 38; and 97C.365, are repealed."

Delete the title and insert:

"A bill for an act relating to game and fish; modifying definitions; providing for and modifying certain fees; modifying provisions for taking animals causing damage; modifying license and stamp provisions; modifying certain possession and taking restrictions; providing for an apprentice hunter validation; modifying commercial fishing provisions; providing for a crossbow deer season; requiring reports; requiring rulemaking; providing civil penalties; amending Minnesota Statutes 2006, sections 97A.015, subdivision 24, by adding a subdivision; 97A.045, by adding a subdivision; 97A.401, subdivision 5; 97A.405, subdivisions 2, 4; 97A.441, subdivision 7; 97A.445, by adding a subdivision; 97A.451, subdivisions 3, 3a; 97A.465, by adding a subdivision; 97A.473, subdivisions 3, 5; 97A.475, subdivisions 2, 3, 16; 97A.505, subdivision 4; 97A.511; 97B.015, by adding a subdivision; 97B.020; 97B.031, subdivision 1; 97B.035, by adding a subdivision; 97B.055, subdivision 3; 97B.075; 97B.085, subdivision 3; 97B.301, subdivision 7; 97B.311; 97B.318, subdivision 1; 97B.327; 97B.715, subdivision 1; 97B.801; 97B.928, subdivision 1; 97C.325; 97C.335; 97C.355, subdivision 8; 97C.371, by adding a subdivision; 97C.835, subdivisions 1, 2, 3, 8; proposing coding for new law in Minnesota Statutes, chapters 97B; 97C; repealing Minnesota Statutes 2006, sections 97A.475, subdivision 38; 97C.365."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 1351, A bill for an act relating to transportation; modifying or adding provisions related to geotechnical investigations before eminent domain proceedings, streets and highways, highway safety rest areas, highway construction bids and training, town road abandonment, bridges, special mobile equipment, motor vehicle titles, motor vehicle transfers, traffic regulations, flammable liquid definition, drivers' licenses and identification cards, the Real ID Act, traffic-control signals, transportation goals and mission, statewide transportation plan, metropolitan transportation system performance evaluations, transportation contracts, rail service improvement, use of rail bank property, towing, transit and paratransit, special transportation, small vehicle passenger service, transportation accessibility, transit ways and facilities, light rail transit, vehicle license plates, vehicle size and weight restrictions, vehicle load limits and permits, paper product vehicle routes and permits, definition of full-size pickup truck, vehicle idle reduction technology, commercial vehicles and drivers, vehicle registration, insurance requirements for vehicles owned by charitable organizations, the Unified Carrier Registration Agreement, household

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goods movers, obsolete motor carrier laws and conforming changes, railroad company requirements, the position of state rail safety inspector, and the Railroad Walkways Safety Act; requiring studies and reports; imposing penalties; making clarifying and technical changes; appropriating money; amending Minnesota Statutes 2006, sections 117.041, by adding a subdivision; 160.02, subdivision 19, by adding a subdivision; 161.14, subdivision 18, by adding subdivisions; 161.32, subdivisions 1, 1b, 4; 164.06, subdivision 2; 165.01; 165.03; 168.011, subdivision 22; 168.013, subdivision 1e; 168.10, subdivisions 1a, 1b, 1c, 1d, 1g, 1h, 1i; 168.12, subdivisions 1, 2, 2a, 2b, 2c, 2d, 2e; 168A.01, by adding a subdivision; 168A.05, subdivisions 3, 5; 168A.10, subdivision 1; 168A.101; 168A.151, subdivision 1; 168A.153; 168B.04, subdivision 2; 169.01, subdivisions 4c, 19, 20, 78, by adding a subdivision; 169.041, subdivisions 1, 2; 169.06, subdivision 5; 169.14, subdivision 2; 169.34; 169.471, subdivision 1; 169.781; 169.782, subdivision 1; 169.783, subdivision 1; 169.81, subdivisions 2, 3c; 169.823, subdivision 1; 169.824, subdivision 2; 169.8261; 169.86, subdivision 5, by adding a subdivision; 169.862; 169.864, subdivisions 1, 2; 169.87, subdivision 4; 171.01, by adding a subdivision; 171.02, subdivision 1; 171.06, subdivision 3; 171.07, subdivisions 1, 3; 171.14; 174.01, subdivision 2; 174.02, subdivision 1a; 174.03, subdivision 1, by adding subdivisions; 174.24, subdivision 2a; 174.255, by adding a subdivision; 174.29, by adding subdivisions; 174.30, subdivisions 4, 9; 174.64, subdivisions 2, 4; 174.66; 218.021, subdivision 1; 218.041, subdivision 6; 221.011, subdivision 8, by adding a subdivision; 221.025; 221.026; 221.031, subdivisions 1, 6; 221.0314, subdivision 9, by adding a subdivision; 221.033, subdivision 2d; 221.036, subdivisions 1, 3; 221.037, subdivision 1; 221.091, subdivision 2; 221.131; 221.132; 221.141, subdivisions 1, 4; 221.185; 221.221, subdivision 3; 221.231; 221.291, subdivision 4; 221.60, subdivision 1, by adding a subdivision; 222.50, subdivision 7; 222.63, subdivision 4, by adding a subdivision; 299F.60, subdivision 1; 299J.16, subdivision 1; 325F.665, by adding a subdivision; 473.1466; 473.166; 473.386, subdivisions 1, 2, 2a, 3; 473.399; 473.3993, subdivisions 1, 3, by adding a subdivision; 473.3994; 473.3997; 473.4051; 473.408, by adding a subdivision; Laws 2005, First Special Session chapter 1, article 4, section 39; proposing coding for new law in Minnesota Statutes, chapters 160; 161; 169; 174; 219; 221; 473; repealing Minnesota Statutes 2006, sections 168A.05, subdivision 5a; 174.65; 221.011, subdivisions 24, 25, 28, 29, 38, 41, 44, 45; 221.0252, subdivision 7; 221.072; 221.111; 221.121, subdivisions 1, 2, 3, 4, 5, 6, 6a, 6c, 6d, 6e, 6f, 7; 221.122; 221.123; 221.131, subdivisions 2a, 3; 221.141, subdivision 6; 221.151; 221.152; 221.153, subdivisions 1, 2; 221.161; 221.171; 221.172, subdivisions 3, 4, 5, 6, 7, 8; 221.296, subdivisions 3, 4, 5, 6, 7, 8; 221.60, subdivisions 2, 3, 3a, 4, 5, 6; 221.601; 221.602; 325E.0951, subdivision 3a; 473.1465; 473.247; Laws 1999, chapter 230, section 44.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Carlson from the Committee on Finance to which was referred:

H. F. No. 1420, A bill for an act relating to environment; modifying licensing requirements for design, installation, maintenance, inspection, or operation of individual sewage treatment systems; requiring a report; amending Minnesota Statutes 2006, section 115.56, subdivision 2.

Reported the same back with the following amendments:

Page 3, line 3, delete "the Geoscience Professional Organization;"

With the recommendation that when so amended the bill pass.

The report was adopted.

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Carlson from the Committee on Finance to which was referred:

H. F. No. 1638, A bill for an act relating to state government; establishing a grants management process, governance, and structure; appropriating money; proposing coding for new law in Minnesota Statutes, chapters 13; 16B.

Reported the same back with the following amendments:

Page 1, line 14, delete "government entity" and insert "state agency"

Page 6, line 15, delete "$......" and insert "$125,000"

Page 6, line 16, after the period, insert "If an appropriation for this purpose is enacted more than once, the appropriation is effective only once."

Page 6, after line 16, insert:

"For the fiscal year beginning July 1, 2008, the commissioner of administration must deduct from state grants to nongovernmental entities up to $125,000, as necessary to fund the commissioner's duties under this act. The amount deducted from appropriations for these grants is transferred to the commissioner for purposes of administering this act."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

Carlson from the Committee on Finance to which was referred:

H. F. No. 2068, A bill for an act relating to economic development; appropriating money for the Minnesota Film and TV Board; amending Laws 2006, chapter 282, article 11, section 6.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. APPROPRIATION.

$750,000 in fiscal year 2008 and $750,000 in fiscal year 2009 are appropriated from the general fund to the director of Explore Minnesota Tourism for a grant to the Minnesota Film and TV Board for the film jobs production program under Minnesota Statutes, section 116U.26. Of these amounts, up to $25,000 each year may be used for administration. The base budget for the film jobs production program is $500,000 in fiscal year 2010 and $500,000 in fiscal year 2011. If an appropriation for this purpose is enacted more than once, the appropriation is effective only once."

Correct the title numbers accordingly

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Ways and Means.

The report was adopted.

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Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 2362, A bill for an act relating to the financing and operation of state and local government; making policy, technical, administrative, enforcement, collection, refund, and other changes to income, franchise, property, sales and use, motor vehicle sales, health care provider, cigarette and tobacco products, insurance premiums, aggregate removal, mortgage, deed, production, estate, gambling, and other taxes and tax-related provisions; providing a homestead credit state refund; providing for aids to local governments; increasing property tax refunds; providing and changing income and franchise tax credits, subtractions, apportionment, and alternative minimum taxes; adding an income tax bracket and rate; requiring tax withholding; modifying taxation of certain compensation paid to nonresidents; providing for taxation of foreign operating corporations; modifying and authorizing sales tax exemptions; prohibiting new local sales taxes; modifying and authorizing local government sales taxes; imposing a surcharge on certain admissions; modifying property tax exemptions, tax bases, levies, valuation, classes, class rates, credits, statements, abatement, truth in taxation, payment options, and appeals; extending and establishing certain property tax deferral programs; changing tax increment financing provisions; changing certain border city allocation and JOBZ requirements; establishing a FARMZ program; changing provisions relating to fiscal disparities, state debt collection procedures, sustainable forest incentives programs, tax-forfeited land sales, leases, exchanges, and use of proceeds; changing distributions of production tax proceeds; providing for purchase of forest lands; providing for higher education grants in the taconite assistance area; providing for taxation of gifts; conforming provisions to certain changes in federal laws; changing and imposing powers, duties, and requirements on certain local governments and authorities and state departments or agencies; transferring money to the budget reserve account; providing for state funds and accounts; providing for bioscience, land conservation, film production costs reimbursement, and Lignocellulosic ethanol production grants; authorizing release of certain data; requiring studies; appropriating money; amending Minnesota Statutes 2006, sections 16A.152, subdivisions 1b, 2, by adding a subdivision; 16D.04, subdivisions 1, 2; 16D.11, subdivisions 2, 7; 37.13, by adding a subdivision; 62I.06, subdivision 6; 71A.04, subdivision 1; 97A.061, subdivision 2; 127A.48, subdivision 3; 268.19, subdivision 1; 270.071, subdivision 7; 270.072, subdivisions 2, 3, 6; 270.074, subdivision 3; 270.076, subdivision 1; 270.41, subdivisions 1, 2, 3, 5, by adding a subdivision; 270.44; 270.45; 270.46; 270.47; 270.48; 270.50; 270A.03, subdivision 5; 270B.15; 270C.03, subdivision 1; 270C.306; 270C.34, subdivision 1; 270C.446, subdivision 2; 270C.56, subdivision 1; 270C.63, subdivision 9; 272.02, subdivision 64, by adding subdivisions; 272.115, subdivision 1; 273.05, by adding a subdivision; 273.11, subdivision 1a, by adding a subdivision; 273.111, subdivision 3, by adding a subdivision; 273.117; 273.121; 273.123, subdivisions 2, 3, 7; 273.124, subdivisions 1, 13, 14, 21; 273.125, subdivision 8; 273.128, subdivision 1, by adding a subdivision; 273.13, subdivisions 22, 23, 24, 25, 33, by adding a subdivision; 273.1384, subdivision 1; 273.1398, subdivision 4; 273.33, subdivision 2; 273.37, subdivision 2; 273.371, subdivision 1; 274.01, subdivision 1; 274.13, subdivision 1; 275.065, subdivisions 3, 5a, by adding subdivisions; 275.067; 276.04, subdivision 2, by adding a subdivision; 277.01, subdivision 2; 278.05, subdivision 6; 279.01, subdivision 1, by adding a subdivision; 279.37, subdivision 1a; 280.39; 287.22; 287.2205; 289A.02, subdivision 7; 289A.08, subdivisions 3, 11, 13; 289A.09, subdivision 2; 289A.12, subdivisions 4, 14, by adding a subdivision; 289A.18, subdivision 1; 289A.31, subdivision 7; 289A.40, subdivisions 2, 4; 289A.56, by adding a subdivision; 289A.60, subdivisions 8, 12, 25, 27, by adding subdivisions; 290.01, subdivisions 5, 19, as amended, 19b, 19c, 19d, 31, as amended; 290.06, subdivisions 2c, 2d, 33, by adding a subdivision; 290.067, subdivisions 1, 2b; 290.0671, subdivision 7; 290.0677, subdivision 1; 290.091, subdivision 3; 290.0921, subdivision 3; 290.17, subdivisions 2, 4, by adding a subdivision; 290.191, subdivisions 2, 3, 5, 8; 290.21, subdivision 4; 290.92, by adding a subdivision; 290A.03, subdivisions 7, 13, 15, as amended; 290A.04, subdivisions 2a, 2h, 4, by adding a subdivision; 290B.03, subdivisions 1, 2; 290B.04, subdivisions 3, 4; 290B.05, subdivision 1; 290B.07; 290C.02, subdivision 3; 290C.04; 290C.05; 290C.07; 290C.11; 291.005, subdivision 1; 291.03, subdivision 1, by adding subdivisions; 291.215, subdivision 1; 295.52, subdivisions 4, 4a; 295.54, subdivision 2; 296A.18, subdivision 4; 297A.61, subdivisions 3, 4, 7, 10, 12, 24, by adding subdivisions; 297A.63, subdivision 1; 297A.665; 297A.668, by adding a subdivision; 297A.669, subdivisions 3, 13, 14, by adding subdivisions; 297A.67, subdivisions 7, 8, 9; 297A.68, subdivisions 11, 16, 35, by adding a subdivision; 297A.69, subdivisions 2, 3; 297A.70, subdivisions 3, 7, 8, by adding subdivisions; 297A.71, subdivision 23, by adding subdivisions; 297A.72; 297A.75, subdivisions 1, 2, 3, by adding a subdivision; 297A.90, subdivision 2; 297A.99, subdivision 1; 297B.03; 297B.035, subdivision 1; 297E.02, by adding a subdivision; 297F.01, subdivision 19, by adding a subdivision; 297F.05, subdivisions 3, 4, by adding a subdivision; 297F.06, subdivision 4; 297F.21, subdivision 3; 297F.25, by adding a subdivision; 297I.06, subdivisions 1, 2; 297I.15, by adding a subdivision; 297I.20, subdivision 2; 297I.40, subdivision 5; 298.22, by

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adding a subdivision; 298.2214, subdivision 2; 298.28, subdivision 4, by adding a subdivision; 298.292, subdivision 2; 298.2961, subdivision 4; 298.75, by adding a subdivision; 424A.10, subdivision 3; 435.193; 469.169, by adding a subdivision; 469.1734, subdivision 6; 469.174, subdivisions 10, 10a, 27; 469.175, subdivisions 1, 3; 469.176, subdivisions 1, 2, 4l, 7; 469.1761, subdivision 1; 469.1763, subdivision 2; 469.177, subdivision 1; 469.178, subdivision 7; 469.1791, subdivision 3; 469.1813, subdivision 1a; 469.310, by adding a subdivision; 469.312, by adding subdivisions; 469.314, subdivision 1; 469.3201; 473F.01, subdivision 2; 473F.08, subdivisions 5, 7a; 477A.011, subdivisions 34, 36; 477A.0124, subdivision 5; 477A.013, subdivisions 8, 9, by adding a subdivision; 477A.03; 477A.12, subdivision 1; 477A.14, subdivision 1; Laws 1973, chapter 393, section 1, as amended; Laws 1980, chapter 511, section 1, subdivision 2, as amended; Laws 1994, chapter 587, article 9, section 14, subdivisions 1, 2, 3; Laws 1995, chapter 264, article 5, sections 44, subdivision 4, as amended; 45, subdivision 1, as amended; Laws 2005, First Special Session chapter 3, article 5, section 39; Laws 2006, chapter 236, article 1, section 21; proposing coding for new law in Minnesota Statutes, chapters 84; 270; 270C; 273; 274; 290; 290C; 295; 297A; 383D; 383E; 469; proposing coding for new law as Minnesota Statutes, chapter 290D; repealing Minnesota Statutes 2006, sections 270.073; 270.41, subdivision 4; 270.43; 270.51; 270.52; 270.53; 290.01, subdivision 6b; 290.0921, subdivision 7; 290.191, subdivision 4; 290A.04, subdivision 2; 295.60; 297A.61, subdivision 20; 297A.668, subdivision 6; 297A.67, subdivision 22; 383A.80, subdivision 4; 383B.80, subdivision 4; 469.174, subdivision 29; 473F.08, subdivision 3a; Laws 1973, chapter 393, section 2; Laws 1994, chapter 587, article 9, section 8, subdivision 1, as amended.

Reported the same back with the following amendments:

Page 10, after line 14, insert:

"Sec. 7. Minnesota Statutes 2006, section 290A.04, subdivision 3, is amended to read:

Subd. 3. Table. The commissioner of revenue shall construct and make available to taxpayers a comprehensive table showing the ~~property taxes to be paid and~~ refund allowed at various levels of income ~~and assessment~~. The table shall follow the schedule of income percentages, maximums and other provisions specified in ~~subdivision 2~~ this section, except that the commissioner may graduate the transition between income brackets. All refunds shall be computed in accordance with tables prepared and issued by the commissioner of revenue.

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

Page 11, line 1, delete "subdivision 2, is" and insert "subdivisions 2 and 2b, are"

Page 24, line 11, after "district" insert ", county,"

Page 24, line 18, before "city" insert "county and" and delete "capacity" and insert "capacities"

Page 24, line 19, delete "city aid" and insert "aids"

Page 24, line 20, before "city" insert "county of Mahnomen and the"

Page 286, line 10, delete "$310,000" and insert "$342,500" and delete "$58,000" and insert "$85,500"

Renumber the sections in sequence and correct the internal references

Amend the title accordingly

With the recommendation that when so amended the bill pass.

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MINORITY REPORT

April 25, 2007

I, the undersigned, being a minority of the Committee on Ways and Means, recommend that H. F. No. 2362 do pass with the following amendments:

Delete everything after the enacting clause and insert:

"ARTICLE 1

GOVERNOR'S INITIATIVES

Section 1. Minnesota Statutes 2006, section 16A.152, subdivision 1b, is amended to read:

Subd. 1b. Budget reserve increase. On July 1, ~~2003~~ 2007, the commissioner of finance shall transfer ~~$300,000,000~~ $47,000,000 to the budget reserve account in the general fund. ~~On July 1, 2004, the commissioner of finance shall transfer $296,000,000 to the budget reserve account in the general fund.~~ The amounts necessary for this purpose are appropriated from the general fund.

Sec. 2. Minnesota Statutes 2006, section 16A.152, subdivision 2, is amended to read:

Subd. 2. Reserve goal; additional revenues; priority. ~~(a)~~ If on the basis of a forecast of general fund revenues and expenditures, the commissioner of finance determines that there will be a positive unrestricted budgetary general fund balance at the close of the biennium that exceeds $125,000,000, the commissioner of finance ~~must allocate money~~ shall transfer up to $50,000,000 to the following accounts and purposes in priority order:

(1) the cash flow account established in subdivision 1 until that account reaches $350,000,000;

(2) the budget reserve account established in subdivision 1a until that account reaches ~~$653,000,000;~~ an amount equal to five percent of forecast general fund spending for the second year of the biennium.

(3) the amount necessary to increase the aid payment schedule for school district aids and credits payments in section 127A.45 to not more than 90 percent rounded to the nearest tenth of a percent without exceeding the amount available and with any remaining funds deposited in the budget reserve; and

(4) the amount necessary to restore all or a portion of the net aid reductions under section 127A.441 and to reduce the property tax revenue recognition shift under section 123B.75, subdivision 5, paragraph (c), and Laws 2003, First Special Session chapter 9, article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, section 20, by the same amount.

(b) The amounts necessary to meet the requirements of this section are appropriated from the general fund within two weeks after the forecast is released or, in the case of transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations schedules otherwise established in statute.

~~(c) To the extent that a positive unrestricted budgetary general fund balance is projected, appropriations under this section must be made before section 16A.1522 takes effect.~~

(d) The commissioner of finance shall certify the total dollar amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The commissioner of education shall increase the aid payment percentage and reduce the property tax shift percentage by these amounts and apply those reductions to the current fiscal year and thereafter.

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Sec. 3. Minnesota Statutes 2006, section 126C.10, subdivision 13a, is amended to read:

Subd. 13a. Operating capital levy. To obtain operating capital revenue for fiscal year 2007 and later, a district may levy an amount not more than the product of its operating capital revenue for the fiscal year times the lesser of one or the ratio of its adjusted net tax capacity per adjusted marginal cost pupil unit to the operating capital equalizing factor. The operating capital equalizing factor equals ~~$22,222 for fiscal year 2006, and~~ $10,700 for fiscal year ~~2007~~ 2008 and $17,590 for fiscal year 2009 and later.

EFFECTIVE DATE. This section is effective for revenue for fiscal year 2009.

Sec. 4. Minnesota Statutes 2006, section 273.1384, subdivision 1, is amended to read:

Subdivision 1. Residential homestead market value credit. Each county auditor shall determine a homestead credit for each class 1a, 1b, and 2a homestead property within the county equal to 0.4 percent of the first $76,000 of market value of the property minus .09 percent of the market value in excess of ~~$76,000~~ $118,000. The credit amount may not be less than zero. In the case of an agricultural or resort homestead, only the market value of the house, garage, and immediately surrounding one acre of land is eligible in determining the property's homestead credit. In the case of a property that is classified as part homestead and part nonhomestead, (i) the credit shall apply only to the homestead portion of the property, but (ii) if a portion of a property is classified as nonhomestead solely because not all the owners occupy the property, not all the owners have qualifying relatives occupying the property, or solely because not all the spouses of owners occupy the property, the credit amount shall be initially computed as if that nonhomestead portion were also in the homestead class and then prorated to the owner-occupant's percentage of ownership. For the purpose of this section, when an owner-occupant's spouse does not occupy the property, the percentage of ownership for the owner-occupant spouse is one-half of the couple's ownership percentage.

EFFECTIVE DATE. This section is effective for taxes payable in 2008 and thereafter.

Sec. 5. Minnesota Statutes 2006, 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) net interest income on obligations of any authority, commission, or instrumentality of the United States to the extent includable in taxable income for federal income tax purposes but exempt from state income tax under the laws of the United States;

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

(3) the amount paid to others, less the amount used to claim the credit allowed under section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and transportation of each qualifying child in attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, "textbooks" includes books and other instructional materials and equipment purchased or leased for use in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state. Equipment expenses qualifying for deduction includes expenses as defined and limited in section

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290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional books and materials used in the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship, nor does it include books or materials for, or transportation to, extracurricular activities including sporting events, musical or dramatic events, speech activities, driver's education, or similar programs. For purposes of the subtraction provided by this clause, "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

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

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

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

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

(9) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the positive value of any net operating loss under section 172 of the Internal Revenue Code generated for the tax year of the addition. The resulting delayed depreciation cannot be less than zero;

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

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

(12) the amount of compensation paid to Minnesota residents who are members of the armed forces of the United States or United Nations for active duty ~~performed outside Minnesota~~;

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

(14) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the case of a shareholder of a corporation that is an S corporation, minus the positive value of any net operating loss under section 172 of the Internal Revenue Code generated for the tax year of the addition. If the net operating loss exceeds the addition for the tax year, a subtraction is not allowed under this clause;

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

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

(17) to the extent included in federal taxable income, a percentage of compensation received from a pension or other retirement pay from the government for service in the armed forces of the United States, up to a maximum amount. For taxable years beginning after December 31, 2006, and before January 1, 2008, the percentage is 25 percent and the maximum amount is $7,500; for taxable years beginning after December 31, 2007, and before January 1, 2009, the percentage is 50 percent and the maximum amount is $15,000; for taxable years beginning after December 31, 2008, and before January 1, 2010, the percentage is 75 percent and the maximum amount is $22,500; and for taxable years beginning after December 31, 2009, the percentage is 100 percent and there is no maximum amount.

EFFECTIVE DATE. This section is effective for tax years beginning after December 31, 2006, except that the changes in clauses (11) and (12) are phased in over the tax years beginning after December 31, 2006, and before December 31, 2009. For tax years beginning after December 31, 2006, and before January 1, 2008, 25 percent of the compensation affected by the changes in clauses (11) and (12) are an allowable subtraction. For the tax year beginning after December 31, 2007, and before January 1, 2009, 50 percent is allowed. For the tax year beginning after December 31, 2008, and before January 1, 2010, 75 percent is allowed. For tax years beginning after December 31, 2009, 100 percent is allowed.

Sec. 6. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision to read:

Subd. 34. Dairy investment credit. (a) A dairy investment credit is allowed against the tax due under this chapter equal to ten percent of the amount paid or incurred by the taxpayer, on the first $500,000 of qualifying expenditures made in the qualifying period.

(b) "Qualifying expenditures" means for purposes of this subdivision the amount spent for the acquisition, construction, or improvement of buildings or facilities, or the acquisition of equipment, for dairy animal housing, confinement, animal feeding, milk production, and waste management, including the following, if related to dairy animals in this state:

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(1) freestall barns;

(2) fences;

(3) watering facilities;

(4) feed storage and handling equipment;

(5) milking parlors;

(6) robotic equipment;

(7) scales;

(8) milk storage and cooling facilities;

(9) bulk tanks;

(10) manure pumping and storage facilities;

(11) digesters; and

(12) equipment used to produce energy.

Qualified expenditures only include amounts that are capitalized and deducted under either section 167 or 179 of the Internal Revenue Code in computing federal taxable income.

(c) The credit is limited to the liability for tax, as computed under this chapter for the taxable year. If the amount of the credit determined under this section for any taxable year exceeds this limitation, the excess is a dairy investment credit carryover to each of the 15 succeeding taxable years. The entire amount of the excess unused credit for the taxable year is carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried. The amount of the unused credit which may be added under this paragraph shall not exceed the taxpayer's liability for tax less the dairy investment credit for the taxable year.

(d) The qualifying period is that time after December 31, 2006, and before January 1, 2013.

(e) The $50,000 maximum credit applies at the entity level for partnerships, S corporations, trusts, and estates as well as at the individual level. In the case of married individuals, the credit is limited to $50,000 for a married couple.

EFFECTIVE DATE. This section is effective for tax years beginning after December 31, 2006.

Sec. 7. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision to read:

Subd. 35. Regional investment credit. (a) A credit is allowed against the tax imposed by this chapter for investment in a qualified regional angel investment network fund. The credit equals 25 percent of the taxpayer's investment made in the fund, but not to exceed the lesser of:

(1) the liability for tax under this chapter, including the applicable alternative minimum tax; or

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(2) the taxpayer's share of the amount of the certificate issued to the fund by the commissioner of employment and economic development under paragraph (c).

The taxpayer must claim the credit in the same tax year in which the investment to the fund is made. The credit is allowed only for investments made to a fund that are made after the fund has been certified by the commissioner of employment and economic development under paragraph (c).

(b) For purposes of this subdivision, a regional angel investment network fund means a pool investment fund that:

(1) is organized as a limited liability company and consists of members who are accredited investors within the meaning of Regulation D of the Securities and Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a); or consists of members that are not accredited investors that make equity investments or investments in notes that pay interest or other fixed amounts or any combination of both;

(2) primarily makes investments in qualified small business ventures as defined in paragraph (f);

(3) has no fewer than five separate investors and no investor owns more than 25 percent of the outstanding ownership interests in the fund. For purposes of determining the number of investors and the ownership interest of an investor under this clause, the ownership interests of an investor include those of:

(i) the investor's spouse, a child, and sibling; and

(ii) a corporation, partnership, or trust in which the investor has a controlling equity interest or in which the investor exercises management control.

(c) Regional angel investment network funds may apply to the commissioner of employment and economic development for certification as a qualifying regional angel investment network fund. The application must be in the form and made under procedures specified by the commissioner of employment and economic development. The commissioner of employment and economic development may certify up to 20 funds and may provide certificates entitling investors in each fund to tax credits under this subdivision of up to $600,000 for each fund. The commissioner of employment and economic development must not issue a total amount of certificates for all funds of more than $6,000,000. In awarding certificates under this paragraph, the commissioner of employment and economic development shall generally award them to qualified applicants in the order in which the applications are received, but shall also seek to certify funds that are broadly dispersed across the entire state.

(d) Each fund must provide each investor a statement indicating the investor's share of the credit amount certified to the fund under paragraph (c) based on the order in which that investor's investment is made to the fund.

(e) If the amount of the credit under this subdivision for any taxable year exceeds the limitation under paragraph (a), clause (1), the excess is a credit carryover to each of the ten succeeding taxable years. The entire amount of the excess unused credit for the taxable year must be carried first to the earliest of the taxable years to which the credit may be carried, and then to each successive year to which the credit may be carried. The amount of the unused credit which may be added under this paragraph may not exceed the taxpayer's liability for tax less the credit for the taxable year.

(f) A business is a qualified small business venture for purposes of this subdivision only if the business satisfies the following conditions:

(1) the business is engaged in, or is committed to engage in, manufacturing, agriculture, processing or assembling products, conducting research and development, or developing a new product or business process;

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

(3) the business has its headquarters in Minnesota;

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

(5) the business has less than 100 employees;

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

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

(8) the business is not part of a unitary business that employs more than 100 employees.

A business that does not meet all of the conditions in clauses (3) through (8) is not a qualified small business venture unless the commissioner of employment and economic development determines, prior to the investment by the fund, that the business is a small business as defined by the small business administration, or by other criteria in Minnesota law.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 8. Minnesota Statutes 2006, 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:

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

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

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

(ii) the medical expense deduction;

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

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

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

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

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

(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7), (8), and (9);

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 (9) to ~~(16)~~ (17).

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 tax years beginning after December 31, 2006.

Sec. 9. Minnesota Statutes 2006, section 290.191, subdivision 2, is amended to read:

Subd. 2. Apportionment formula of general application. (a) Except for those trades or businesses required to use a different formula under subdivision 3 or section 290.36, and for those trades or businesses that receive permission to use some other method under section 290.20 or under subdivision 4, a trade or business required to apportion its net income must apportion its income to this state on the basis of the percentage obtained by taking the sum of:

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(1) the percent for the sales factor under paragraph (b) of the percentage which the sales made within this state in connection with the trade or business during the tax period are of the total sales wherever made in connection with the trade or business during the tax period;

(2) the percent for the property factor under paragraph (b) of the percentage which the total tangible property used by the taxpayer in this state in connection with the trade or business during the tax period is of the total tangible property, wherever located, used by the taxpayer in connection with the trade or business during the tax period; and

(3) the percent for the payroll factor under paragraph (b) of the percentage which the taxpayer's total payrolls paid or incurred in this state or paid in respect to labor performed in this state in connection with the trade or business during the tax period are of the taxpayer's total payrolls paid or incurred in connection with the trade or business during the tax period.

(b) For purposes of paragraph (a) and subdivision 3, the following percentages apply for the taxable years specified:

Taxable years

beginning Sales Property Payroll

during factor factor factor

calendar year percent percent percent

2007 78 11 11

2008 81 85 ~~9.5~~ 7.5 ~~9.5~~ 7.5

2009 84 90 8 5 8 5

2010 87 95 ~~6.5~~ 2.5 ~~6.5~~ 2.5

2011 90 5 5

~~2012~~ 93 ~~3.5~~ ~~3.5~~

~~2013~~ 96 2 2

~~2014~~ and later 100 0 0

calendar years

EFFECTIVE DATE. This section is effective for tax years beginning after December 31, 2006.

Sec. 10. Minnesota Statutes 2006, section 290A.04, subdivision 2, is amended to read:

Subd. 2. Homeowners. A claimant whose property taxes payable are in excess of the percentage of the household income stated below shall pay an amount equal to the percent of income shown for the appropriate household income level along with the percent to be paid by the claimant of the remaining amount of property taxes payable. The state refund equals the amount of property taxes payable that remain, up to the state refund amount shown below.

Percent Paid by Maximum State

Household Income Percent of Income Claimant Refund

$0 to 1,189 1.0 percent 15 percent ~~$1,450~~ $1,810

1,190 to 2,379 1.1 percent 15 percent ~~$1,450~~ $1,810

2,380 to 3,589 1.2 percent 15 percent ~~$1,410~~ $1,760

3,590 to 4,789 1.3 percent 20 percent ~~$1,410~~ $1,760

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4,790 to 5,979 1.4 percent 20 percent ~~$1,360~~ $1,700

5,980 to 8,369 1.5 percent 20 percent ~~$1,360~~ $1,700

8,370 to 9,559 1.6 percent 25 percent ~~$1,310~~ $1,570

9,560 to 10,759 1.7 percent 25 percent ~~$1,310~~ $1,570

10,760 to 11,949 1.8 percent 25 percent ~~$1,260~~ $1,520

11,950 to 13,139 1.9 percent 30 percent ~~$1,260~~ $1,520

13,140 to 14,349 2.0 percent 30 percent ~~$1,210~~ $1,450

14,350 to 16,739 2.1 percent 30 percent ~~$1,210~~ $1,450

16,740 to 17,929 2.2 percent 35 percent ~~$1,160~~ $1,330

17,930 to 19,119 2.3 percent 35 percent ~~$1,160~~ $1,330

19,120 to 20,319 2.4 percent 35 percent ~~$1,110~~ $1,280

20,320 to 25,099 2.5 percent 40 percent ~~$1,110~~ $1,280

25,100 to 28,679 2.6 percent 40 percent ~~$1,070~~ $1,230

28,680 to 35,849 2.7 percent 40 percent ~~$1,070~~ $1,230

35,850 to 41,819 2.8 percent 45 percent ~~$970~~ $1,070

41,820 to 47,799 3.0 percent 45 percent ~~$970~~ $1,070

47,800 to 53,779 3.2 percent 45 percent ~~$870~~ $960

53,780 to 59,749 3.5 percent 50 percent ~~$780~~ $860

59,750 to 65,729 4.0 percent 50 percent ~~$680~~ $750

65,730 to 69,319 4.0 percent 50 percent ~~$580~~ $640

69,320 to 71,719 4.0 percent 50 percent ~~$480~~ $530

71,720 to 74,619 4.0 percent 50 percent ~~$390~~ $430

74,620 to 77,519 4.0 percent 50 percent ~~$290~~ $320

The payment made to a claimant shall be the amount of the state refund calculated under this subdivision. No payment is allowed if the claimant's household income is $77,520 or more.

EFFECTIVE DATE. This section is effective beginning with refunds based on property taxes payable in 2008.

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Sec. 11. Minnesota Statutes 2006, section 297A.68, subdivision 5, is amended to read:

Subd. 5. Capital equipment. (a) Capital equipment is exempt as follows:

(1) For sales and purchases of capital equipment by the wood products industry, the tax is not imposed.

(2) For sales and purchases of capital equipment by a small business, the tax is not imposed. For purposes of this subdivision, "small business" is as defined in section 645.455, subdivision 2.

(3) For all other sales and purchases of capital equipment, 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 online 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, repair parts for ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and

(9) machinery or equipment used for research, development, design, or production of computer software.

(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);

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(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;

(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);

(9) machinery or equipment used in the transportation, transmission, or distribution of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines, tanks, mains, or other means of transporting those products. This clause does not apply to machinery or equipment used to blend petroleum or biodiesel fuel as defined in section 239.77; or

(10) 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).

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(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) "Online 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.

(11) "Wood products industry" means manufacturers of pulp, paper, and paperboard; sawmills and planing mills; manufacturers of panel board including veneer, plywood, and reconstituted wood products such as particleboard, waferboard, and oriented strandboard; manufacturers of fabricated wood millwork; manufacturers of structural wood members; and manufacturers of prefabricated wood buildings and components. For purposes of this subdivision, "wood products industry" does not include logging; manufacturers of wood cabinets, furniture, office or store fixtures, toys and playground equipment, caskets, or miscellaneous wood products; manufacturers of wood containers; businesses engaged in wood preserving; the operation of timber tracts or tree farms; forest nurseries and the gathering of forest products; and forestry services related to timber production.

~~(11)~~ (12) This subdivision does not apply to telecommunications equipment as provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit for telecommunications services.

EFFECTIVE DATE. This section is effective for sales and purchases made after June 30, 2007.

Sec. 12. Minnesota Statutes 2006, section 297A.70, subdivision 2, is amended to read:

Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b), to the following governments and political subdivisions, or to the listed agencies or instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, the University of Minnesota, state universities, community colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts Education, and an instrumentality of a political subdivision that is accredited as an optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of the state of tangible personal property and taxable services used at or by hospitals and nursing homes;

(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip operations provided for in section 473.4051;

(5) other states or political subdivisions of other states, if the sale would be exempt from taxation if it occurred in that state; ~~and~~

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(6) sales to public libraries, public library systems, multicounty, multitype library systems as defined in section 134.001, county law libraries under chapter 134A, state agency libraries, the state library under section 480.09, and the Legislative Reference Library.; and

(7) Department of Transportation purchases that are made from the trunk highway fund.

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor or a subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed maximum price covering both labor and materials for use in the construction, alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to be used in constructing buildings or facilities which will not be used principally by the tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5, except for leases entered into by the United States or its agencies or instrumentalities; or

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), and prepared food, candy, and soft drinks, except for lodging, prepared food, candy, and soft drinks purchased directly by the United States or its agencies or instrumentalities.

(c) As used in this subdivision, "school districts" means public school entities and districts of every kind and nature organized under the laws of the state of Minnesota, and any instrumentality of a school district, as defined in section 471.59.

EFFECTIVE DATE. This section is effective for sales and purchases made after June 30, 2007.

Sec. 13. Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision to read:

Subd. 40. Legal reference office and data center facility. Materials and supplies used or consumed in, and equipment incorporated into, the construction, improvement, or expansion of a legal reference office and data center facility is exempt if:

(1) the facility is engaged in the development or provision of print or online versions of legal reference products and services; and

(2) the total capital investment made in the facility is at least $60,000,000.

Except for equipment owned or leased by a contractor, all machinery, equipment, appliances, furniture, fixtures, and technical equipment, including data processing, data storage, and telecommunications hardware and software, necessary to the construction and equipping of the facility to provide those services are also exempt.

EFFECTIVE DATE. This section is effective for sales and purchases made after December 31, 2006, and before January 1, 2012.

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Sec. 14. Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision to read:

Subd. 41. Commuter rail; material, supplies, and equipment. Materials and supplies used or consumed in, and equipment incorporated into, the construction or improvement of a commuter rail transportation system operated under sections 174.80 to 174.90 are exempt. This exemption includes railroad cars and engines and related equipment.

EFFECTIVE DATE. This section is effective for sales and purchases made after December 31, 2006.

Sec. 15. Minnesota Statutes 2006, section 297A.75, subdivision 1, is amended to read:

Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the following exempt items must be imposed and collected as if the sale were taxable and the rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) capital equipment ~~exempt~~ on which the tax is imposed and collected under section 297A.68, subdivision 5;

(2) building materials for an agricultural processing facility exempt under section 297A.71, subdivision 13;

(3) building materials for mineral production facilities exempt under section 297A.71, subdivision 14;

(4) building materials for correctional facilities under section 297A.71, subdivision 3;

(5) building materials used in a residence for disabled veterans exempt under section 297A.71, subdivision 11;

(6) elevators and building materials exempt under section 297A.71, subdivision 12;

(7) building materials for the Long Lake Conservation Center exempt under section 297A.71, subdivision 17;

(8) materials, supplies, fixtures, furnishings, and equipment for a county law enforcement and family service center under section 297A.71, subdivision 26;

(9) materials and supplies for qualified low-income housing under section 297A.71, subdivision 23;

(10) materials, supplies, and equipment for municipal electric utility facilities under section 297A.71, subdivision 35;

(11) equipment and materials used for the generation, transmission, and distribution of electrical energy and an aerial camera package exempt under section 297A.68, subdivision 37; and

(12) tangible personal property and taxable services and construction materials, supplies, and equipment exempt under section 297A.68, subdivision 41.

EFFECTIVE DATE. This section is effective for sales and purchases made after June 30, 2007.

Sec. 16. Minnesota Statutes 2006, section 297A.75, subdivision 3, is amended to read:

Subd. 3. Application. (a) The application must include sufficient information to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11), or (12), the contractor, subcontractor, or builder must furnish to the refund applicant a statement including the cost of the exempt items and the taxes paid on the items unless otherwise specifically provided by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under this section.

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(b) An applicant may not file more than two applications per calendar year for refunds for taxes paid on capital equipment ~~exempt~~ on which the tax is imposed and collected under section 297A.68, subdivision 5.

EFFECTIVE DATE. This section is effective for sales and purchases made after June 30, 2007.

Sec. 17. Minnesota Statutes 2006, section 469.312, subdivision 5, is amended to read:

Subd. 5. Duration limit. (a) The maximum duration of a zone is 12 years. The applicant may request a shorter duration. The commissioner may specify a shorter duration, regardless of the requested duration.

(b) The duration limit under this subdivision and the duration of the zone for purposes of allowance of tax incentives described in section 469.315 is extended by three calendar years for each parcel of property that meets the following requirements:

(1) the qualified business operates an ethanol plant, as defined in section 41A.09, on the site that includes the parcel; and

(2) the business subsidy agreement was executed after April 30, 2006.

(c)(1) Notwithstanding the 12-year zone limitation, all qualified businesses that sign a business subsidy agreement, as required under sections 469.310, subdivision 11, and 469.313, before December 31, 2015, are entitled to claim the tax benefits for which they qualify under section 469.315 for the year in which the business subsidy agreement is signed and ten additional years.

(2) This paragraph does not apply to:

(i) any acreage designated as a job opportunity building zone for which any person has fully executed a business subsidy agreement before this paragraph became effective; or

(ii) any trade or business that relocates as defined in section 469.310, subdivision 12, and received benefits under section 463.315 prior to the relocation.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 18. Minnesota Statutes 2006, section 477A.013, subdivision 9, is amended to read:

Subd. 9. City aid distribution. (a) In each calendar year ~~2002 and thereafter~~, each city shall receive an aid distribution equal to the sum of (1) 50 percent of the sum of the ~~city~~ city's formula aid under subdivision 8, and ~~(2)~~ its city aid base, each as computed under the laws applicable to aid distributed in the prior year but without the limits in paragraphs (b) through (d), and (2) 50 percent of the sum of the city's formula aid under subdivision 8, and its city aid base, each as computed under the laws applicable to aid to be distributed in the current year but without the limits in paragraphs (b) through (d).

(b) ~~For aids payable in 2005 and thereafter, the total~~ The city aid distribution for any city shall not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution plus (2) its total aid in the previous year. ~~For aids payable in 2005 and thereafter,~~

(c) The ~~total~~ city aid distribution for any city with a population of 2,500 or more may not decrease from its ~~total~~ aid distribution under this section in the previous year by an amount greater than ten percent of its net levy in the year prior to the aid distribution.

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(c) For aids payable in 2004 only, the total aid for a city with a population less than 2,500 may not be less than the amount it was certified to receive in 2003 minus the greater of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special Session chapter 21, article 5, or (2) five percent of its 2003 aid amount. For aids payable in 2005 and thereafter,

(d) The ~~total~~ aid distribution for a city with a population less than 2,500 must not be less than the amount it was certified to receive in the previous year minus five percent of its 2003 certified aid amount.

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

EFFECTIVE DATE. This section is effective for aid payable in 2008 and thereafter.

Sec. 19. Minnesota Statutes 2006, section 477A.013, is amended by adding a subdivision to read:

Subd. 11. Use of revenues. Beginning with aids payable in 2008, any city of over 100,000 population receiving additional aid under this section due to an increase in the appropriation over the amount appropriated for aid paid in 2007 must use the additional aid it receives to increase spending on police services and prosecutors in the city attorney's office above the level funded by the city in calendar year 2007.

EFFECTIVE DATE. This section is effective for aid payable in 2008 and thereafter.

Sec. 20. Minnesota Statutes 2006, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a. Cities. For aids payable in 2004, the total aids paid under section 477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the total aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. For aids payable in 2006 and thereafter, The total aids paid under section 477A.013, subdivision 9, is each year are limited to ~~$485,052,000~~ $495,052,000.

EFFECTIVE DATE. This section is effective for aid payable in 2008 and thereafter.

ARTICLE 2

FEDERAL UPDATE

Section 1. Minnesota Statutes 2006, 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 ~~May 18, 2006~~ December 31, 2006.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19, as amended by Laws 2007, chapter 1, section 1, 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 the federal effective dates of changes to the Internal Revenue Code and 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.

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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 Internal Revenue Code of 1986, as amended through ~~May 18~~ December 31, 2006, shall be in effect for taxable years beginning after December 31, 1996, and before January 1, 2006, and for taxable years beginning after December 31, 2006. The Internal Revenue Code of 1986, as amended through December 31, 2006, is in effect for taxable years beginning after December 31, 2005, and before January 1, 2007.

Except as otherwise provided, references to the Internal Revenue Code in subdivisions 19 to 19f 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 2006, section 290.01 subdivision 31, as amended by Laws 2007, chapter 1, section 3, is amended to read:

Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, ~~for taxable years beginning before January 1, 2006, and after December 31, 2006,~~ "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through ~~May 18, 2006; and for taxable years beginning after December 31, 2005, and before January 1, 2007, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through~~ December 31, 2006.

EFFECTIVE DATE. This section is effective the day following final enactment except the changes incorporated by federal changes are effective at the same time as the changes were effective for federal purposes.

Sec. 4. Minnesota Statutes 2006, section 290A.03, subdivision 15, as amended by Laws 2007, chapter 1, section 4, is amended to read:

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Subd. 15. Internal Revenue Code. ~~For taxable years beginning before January 1, 2006, and after December 31, 2006,~~ "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through ~~May 18, 2006; and for taxable years beginning after December 31, 2005, and before January 1, 2007, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through~~ December 31, 2006.

EFFECTIVE DATE. This section is effective for property tax refunds based on property taxes payable on or after December 31, 2006, and rent paid on or after December 31, 2005.

Sec. 5. Minnesota Statutes 2006, section 291.005, subdivision 1, is amended to read:

Subdivision 1. Scope. 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 ~~May 18, 2006~~ December 31, 2006.

(9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.

EFFECTIVE DATE. This section is effective the day following final enactment.

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ARTICLE 3

PROPERTY TAX REBATE

Section 1. 2007 PROPERTY TAX REBATE.

Subdivision 1. Qualifying properties. Owners of properties that are located in qualifying taxing jurisdictions are eligible to receive a rebate equal to 15 percent of the full tax amount that would otherwise be due for taxes payable in 2007. In order to receive the rebate, the county and the city or town where the property is located must submit proposed levies for taxes payable in 2008 under Minnesota Statutes 2006, section 275.065, subdivision 1, and section 3, that do not exceed the amount determined under section 2.

Subd. 2. Supplemental tax statement. By September 21, 2007, each county treasurer must mail out a supplemental property tax statement for each property that qualifies for a rebate under subdivision 1. The supplemental statement must show the revised second-half payment due on the property, after deducting the rebate determined under subdivision 1 from the normal second-half payment. The amount of the rebate shall be deducted proportionately from the tax amounts otherwise due to each taxing jurisdiction.

Subd. 3. Report to commissioner of revenue. Each county auditor shall report the total amount of rebates issued to the commissioner of revenue by October 15, 2007, in a form prescribed by the commissioner.

Subd. 4. Payments. The commissioner of revenue must issue reimbursement payments to each county equal to the amount of rebates issued by the county under subdivision 2 by November 15, 2007. The county treasurer shall distribute the reimbursement payments in the same way that property tax payments are distributed under Minnesota Statutes 2006, sections 276.10 to 276.12.

Subd. 5. Refunds. Any property taxes paid, including taxes paid by an escrow agent, that are in excess of the amount due because of the rebate authorized under this section must be refunded by the county to the property owner of record. The refunds must be paid by December 1, 2007, or within 60 days of receipt of the excess payment, whichever is later.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. COMMISSIONER OF REVENUE TO DETERMINE MAXIMUM LEVIES.

(a) The commissioner of revenue shall determine for each county, city, and town a maximum amount that the taxing authority may levy in 2007, for taxes payable in 2008, in order for properties in that jurisdiction to be eligible for a property tax rebate under section 1. The commissioner shall notify the taxing authority of this amount by August 1, 2007.

(b) For counties and cities, the maximum amount of property taxes allowed in order to qualify for a state rebate under section 1 is equal to the taxing authority's levy in 2006, payable in 2007, multiplied by (1) one plus the percentage increase in the implicit price deflator for state and local government consumption expenditures and gross investment, prepared by the Bureau of Economic Analysis of the United States Department of Commerce for the 12-month period ending March 31 of the previous year; and (2) one plus the percentage increase, if any, in the population growth within that jurisdiction for the most recently available calendar year as of July 1, 2007, as established by a population estimate of the state demographer or the Metropolitan Council.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 3. CERTIFICATION OF PROPOSED LEVIES.

Counties, cities, and towns must certify proposed levies for taxes payable in 2008 by September 1, 2007, notwithstanding the deadline specified in Minnesota Statutes 2006, section 275.065, subdivision 1.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 4. APPROPRIATIONS.

(a) An amount necessary to fund the rebates authorized under section 1 is appropriated from the general fund to the commissioner of revenue in fiscal year 2008.

(b) $....... is appropriated to the commissioner of revenue from the general fund in fiscal year 2008 to reimburse counties for all or part of the costs incurred by the counties to administer this article."

Delete the title and insert:

"A bill for an act relating to taxation; providing for budget reserves; changing calculation of the school operating capital levy; changing the residential homestead market value credit; conforming certain tax provisions to changes in the Internal Revenue Code; excluding compensation and certain pension income for service in the armed forces; providing dairy investment and regional investment credits; increasing the maximum homeowners' property tax refunds; changing the income and franchise tax income apportionment formula; providing a direct sales tax exemption for small business and certain other capital equipment purchases; exempting certain transportation purchases from the sales tax; exempting certain sales of construction materials from the sales tax; extending the period of job opportunity building zone benefits in certain cases; changing certain aids to local governments; providing for a property tax rebate; appropriating money; amending Minnesota Statutes 2006, sections 16A.152, subdivisions 1b, 2; 126C.10, subdivision 13a; 273.1384, subdivision 1; 289A.02, subdivision 7; 290.01, subdivisions 19, as amended, 19b, 31, as amended; 290.06, by adding subdivisions; 290.091, subdivision 2; 290.191, subdivision 2; 290A.03, subdivision 15, as amended; 290A.04, subdivision 2; 291.005, subdivision 1; 297A.68, subdivision 5; 297A.70, subdivision 2; 297A.71, by adding subdivisions; 297A.75, subdivisions 1, 3; 469.312, subdivision 5; 477A.013, subdivision 9, by adding a subdivision; 477A.03, subdivision 2a."

Signed

Steve Sviggum

Sviggum moved that the Minority Report on H. F. No. 2362 be substituted for the Majority Report and that the Minority Report be now adopted.

A roll call was requested and properly seconded.

The Speaker called Thissen to the Chair.

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CALL OF THE HOUSE

On the motion of Seifert and on the demand of 10 members, a call of the House was ordered. The following members answered to their names: