Journal of the House - 50th Day - Wednesday, April 29, 2015

A quorum was present.

Albright was excused.

Allen was excused until 1:25 p.m. Metsa was excused until 1:30 p.m. Atkins was excused until 1:55 p.m. Dill was excused until 2:05 p.m.

The Speaker assumed the Chair.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3812

The Chief Clerk proceeded to read the Journal of the preceding day. There being no objection, further reading of the Journal was dispensed with and the Journal was approved as corrected by the Chief Clerk.

REPORTS OF CHIEF CLERK

S. F. No. 1647 and H. F. No. 1733, which had been referred to the Chief Clerk for comparison, were examined and found to be identical with certain exceptions.

Kelly moved that S. F. No. 1647 be substituted for H. F. No. 1733 and that the House File be indefinitely postponed. The motion prevailed.

REPORTS OF STANDING COMMITTEES AND DIVISIONS

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

H. F. No. 1437, A bill for an act relating to agriculture; establishing a budget for agriculture; appropriating money for agriculture, animal health, and agricultural utilization research; making policy and technical changes to various agricultural related provisions, including provisions related to pesticide control, plant protection, nursery law, seeds, dairy, food handlers, food, farmland, farming, and loans; modifying license exclusions for the direct sale of certain prepared food; establishing the Agriculture Research, Education, Extension, and Technology Transfer Board; providing incentive payments; requiring studies; requiring reports; providing a vocational training pilot program; establishing the farm opportunity loan program; modifying fees and surcharges; creating accounts; amending Minnesota Statutes 2014, sections 13.643, subdivision 1; 18B.01, subdivisions 28, 29; 18B.05, subdivision 1; 18B.32, subdivision 1; 18B.33, subdivision 1; 18B.34, subdivision 1; 18C.425, subdivision 6; 18C.70, subdivision 2; 18G.10, subdivisions 3, 4, 5; 18H.02, subdivision 20, by adding subdivisions; 18H.06, subdivision 2; 18H.07; 18H.17; 21.89, subdivision 2; 21.891, subdivisions 2, 5; 25.341, subdivision 2; 25.39, subdivisions 1, 1a; 28A.03, by adding a subdivision; 32.075; 32.105; 41B.03, subdivision 6, by adding a subdivision; 41B.04, subdivision 17; 41B.043, subdivision 3; 41B.045, subdivisions 3, 4; 41B.046, subdivision 5; 41B.047, subdivisions 1, 4; 41B.048, subdivision 6; 41B.049, subdivision 4; 41B.055, subdivision 3; 41B.056, subdivision 2; 41B.06; 135A.52, by adding a subdivision; 500.24, subdivision 4; Laws 2014, chapter 312, article 12, section 3; proposing coding for new law in Minnesota Statutes, chapters 18C; 28A; 41A; 41B; repealing Minnesota Statutes 2014, sections 17.115; 28A.15, subdivisions 9, 10; 116V.03.

Reported the same back with the following amendments:

Page 6, line 17, delete "$3,550,000" and insert "$5,000,000" and delete "$4,100,000" and insert "$5,000,000"

Page 6, line 28, after the period, insert "Of these amounts, at least $600,000 each year is for agriculture rapid response under Minnesota Statutes, section 41A.14, subdivision 2, clause (2)."

Page 7, delete lines 1 to 8

Page 7, line 9, delete "$500,000" and insert "$383,000"

Page 7, delete line 19 and insert "If the appropriation in either year is not sufficient to award full payment to all eligible producers, the commissioner may transfer a sum sufficient from the appropriation for the agricultural growth, research, and innovation program under this subdivision. Notwithstanding Minnesota Statutes, section 16A.28, the first year appropriation is available until June 30, 2017, and the second year appropriation is available until June 30, 2018."

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3813

Page 7, line 20, delete everything before "The"

Page 7, line 23, after the period, insert "These are onetime appropriations."

Page 7, line 24, delete "$6,280,000" and insert "$10,235,000" and delete "$6,223,000" and insert "$10,235,000"

Page 11, line 27, delete "$75,000" and insert "$150,000" and delete "$75,000" and insert "$150,000"

Page 14, line 6, delete "5,918,000" and insert "5,318,000" and delete "5,984,000" and insert "5,384,000"

Page 14, delete lines 7 to 10

Page 14, line 12, delete "2,643,000" and insert "3,643,000" and delete "2,643,000" and insert "3,643,000"

Page 14, delete section 5 and insert:

"Sec. 5. AVIAN INFLUENZA EMERGENCY RESPONSE.

(a) $514,000 is appropriated in fiscal year 2015 from the general fund to the commissioner of agriculture for the costs of avian influenza emergency response activities not covered by federal funding. This is a onetime appropriation and is available until June 30, 2016.

(b) $379,000 is appropriated in fiscal year 2015 from the general fund to the Board of Animal Health for the costs of avian influenza emergency response activities not covered by federal funding. This is a onetime appropriation and is available until June 30, 2016.

(c) If an appropriation in this section is enacted in more than one act, the appropriation is to be given effect only once.

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

Sec. 6. AVIAN INFLUENZA; FEDERAL FUNDS APPROPRIATION AND REPORTING.

Any federal money received in fiscal years 2015 through 2017 by the commissioner of agriculture or the Board of Animal Health to address avian influenza is appropriated in the fiscal year when it is received. By May 8, 2015, the commissioner of management and budget shall report the anticipated federal funds appropriated under this section and their intended purpose to the Legislative Advisory Commission, consistent with the urgent federal funds request procedure under Minnesota Statutes, section 3.3005, subdivision 4. By January 15, 2018, the commissioner of management and budget shall report the actual federal funds received and appropriated under this section and their actual use to the Legislative Advisory Commission."

Page 29, line 5, after "TRANSFER" insert "ADVISORY"

Page 29, line 7, after "Transfer" insert "Advisory"

Page 29, line 33, delete "provide for" and insert "recommend to the commissioner"

Page 30, line 2, delete "provide" and insert "recommend and the commissioner shall determine and award"

Page 30, line 12, before "mentoring" insert "and" and delete ", graduate debt forgiveness, and high school programs"

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3814

Page 32, line 4, delete "2,850,000" and insert "57,885"

Page 32, line 6, delete "17,100,000" and insert "340,499" and after the period, insert "The commissioner shall award payments on a first-come, first-served basis within the limits of available funding."

Page 34, line 29, delete "99,999,999" and insert "2,122,443"

Page 34, line 31, delete "599,999,999" and insert "12,484,961"

Page 34, line 32, after the period, insert "The commissioner shall award payments on a first-come, first-served basis within the limits of available funding."

Page 36, line 34, delete "30,000" and insert "1,362"

Page 37, line 2, delete "150,000" and insert "6,810" and after the period, insert "The commissioner shall award payments on a first-come, first-served basis within the limits of available funding."

Adjust amounts accordingly

Amend the title as follows:

Page 1, line 8, after "Transfer" insert "Advisory"

With the recommendation that when so amended the bill be re-referred to the Committee on Rules and Legislative Administration.

The report was adopted.

Davids from the Committee on Taxes to which was referred:

H. F. No. 1590, A bill for an act relating to taxation; making technical and clarifying changes to individual income and corporate franchise taxes, estate taxes, sales and use taxes, special taxes, property taxes, and other taxes and tax provisions; amending Minnesota Statutes 2014, sections 69.021, subdivision 5; 270A.03, subdivision 5; 270C.35, by adding a subdivision; 270C.72, subdivision 4; 272.02, subdivision 9; 273.032; 273.33, subdivisions 1, 2; 274.01, subdivision 1; 274.135, subdivision 3; 275.065, subdivision 1; 282.01, subdivisions 1a, 1d; 289A.08, subdivision 11; 289A.09, subdivision 2; 290.01, subdivisions 19b, 19c, 19d; 290.0671, subdivision 6a; 290.0672, subdivision 1; 290.091, subdivision 3; 290.0921, subdivision 3; 290.0922, subdivision 2; 291.031; 296A.01, subdivision 42; 296A.07, subdivision 1; 297A.82, subdivision 4a; 297A.94; 297H.06, subdivision 2; 297I.05, subdivision 2; 297I.10, subdivisions 1, 3; 298.01, subdivisions 3b, 4c; 469.190, by adding a subdivision; Laws 2014, chapter 308, article 9, section 94; repealing Minnesota Statutes 2014, sections 273.111, subdivision 9a; 281.22; Minnesota Rules, part 8092.2000.

Reported the same back with the following amendments:

Page 1, line 19, before "INDIVIDUAL" insert "DEPARTMENT OF REVENUE TECHNICAL PROVISIONS:"

Page 14, line 18, before "SALES" insert "DEPARTMENT OF REVENUE TECHNICAL PROVISIONS:"

Page 14, delete section 2

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3815

Page 16, delete section 3

Page 17, line 4, before "SPECIAL" insert "DEPARTMENT OF REVENUE TECHNICAL PROVISIONS:"

Page 22, line 5, before "PROPERTY" insert "DEPARTMENT OF REVENUE TECHNICAL PROVISIONS:"

Page 35, line 5, before "MISCELLANEOUS" insert "DEPARTMENT OF REVENUE TECHNICAL PROVISIONS:"

Page 35, line 29, delete "if domiciled in the same household" and insert ", other than a separated spouse"

Page 35, line 31, delete "domiciled in the same household shall be considered" and insert ", other than a separated spouse, is"

Page 35, line 34, delete "2014" and insert "2013"

Page 36, lines 2 and 4, delete "2014" and insert "2013"

Page 36, line 11, delete "The" and insert "This" and delete "the day following final enactment" and insert "retroactively for debts incurred after December 31, 2013"

Page 36, after line 30, insert:

"ARTICLE 6

DEPARTMENT OF REVENUE POLICY PROVISIONS: INDIVIDUAL INCOME,
CORPORATE FRANCHISE, AND ESTATE TAXES

Section 1. Minnesota Statutes 2014, section 289A.08, subdivision 16, is amended to read:

Subd. 16. Tax refund or return preparers; electronic filing; paper filing fee imposed. (a) A "tax refund or return preparer," as defined in section 289A.60, subdivision 13, paragraph (f), who is a tax return preparer for purposes of section 6011(e) of the Internal Revenue Code, and who reasonably expects to prepare more than ten Minnesota individual income, corporate franchise, S corporation, partnership, or fiduciary income tax returns for the prior ~~calendar~~ year must file all Minnesota individual income, corporate franchise, S corporation, partnership, or fiduciary income tax returns prepared for that ~~calendar~~ year by electronic means.

(b) Paragraph (a) does not apply to a return if the taxpayer has indicated on the return that the taxpayer did not want the return filed by electronic means.

(c) For each return that is not filed electronically by a tax refund or return preparer under this subdivision, including returns filed under paragraph (b), a paper filing fee of $5 is imposed upon the preparer. The fee is collected from the preparer in the same manner as income tax. The fee does not apply to returns that the commissioner requires to be filed in paper form.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 2. Minnesota Statutes 2014, section 289A.09, subdivision 2, is amended to read:

Subd. 2. Withholding statement. (a) A person required to deduct and withhold from an employee a tax under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required to withhold tax under section 290.923,

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3816

subdivision 2, determined without regard to section 290.92, subdivision 19, if the employee or payee had claimed no more than one withholding exemption, or who paid wages or made payments not subject to withholding under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or person receiving royalty payments in excess of $600, or who has entered into a voluntary withholding agreement with a payee under section 290.92, subdivision 20, must give every employee or person receiving royalty payments in respect to the remuneration paid by the person to the employee or person receiving royalty payments during the calendar year, on or before January 31 of the succeeding year, or, if employment is terminated before the close of the calendar year, within 30 days after the date of receipt of a written request from the employee if the 30-day period ends before January 31, a written statement showing the following:

(1) name of the person;

(2) the name of the employee or payee and the employee's or payee's Social Security account number;

(3) the total amount of wages as that term is defined in section 290.92, subdivision 1, paragraph (1); the total amount of remuneration subject to withholding under section 290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the Internal Revenue Code; and the amount of royalties subject to withholding under section 290.923, subdivision 2; and

(4) the total amount deducted and withheld as tax under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2.

(b) The statement required to be furnished by paragraph (a) with respect to any remuneration must be furnished at those times, must contain the information required, and must be in the form the commissioner prescribes.

(c) The commissioner may prescribe rules providing for reasonable extensions of time, not in excess of 30 days, to employers or payers required to give the statements to their employees or payees under this subdivision.

(d) A duplicate of any statement made under this subdivision and in accordance with rules prescribed by the commissioner, along with a reconciliation in the form the commissioner prescribes of the statements for the calendar year, including a reconciliation of the quarterly returns required to be filed under subdivision 1, must be filed with the commissioner on or before February 28 of the year after the payments were made.

(e) If an employer cancels the employer's Minnesota withholding account number required by section 290.92, subdivision 24, the information required by paragraph (d), must be filed with the commissioner within 30 days of the end of the quarter in which the employer cancels its account number.

(f) The employer must submit the statements required to be sent to the commissioner in the same manner required to satisfy the federal reporting requirements of section 6011(e) of the Internal Revenue Code and the regulations issued under it. An employer must submit statements to the commissioner required by this section by electronic means if the employer is required to send more than 25 statements to the commissioner, even though the employer is not required to submit the returns federally by electronic means. For statements issued for wages paid in 2011 and after, the threshold is ten. All statements issued for withholding required under section 290.92 are aggregated for purposes of determining whether the electronic submission threshold is met. The commissioner shall prescribe the content, format, and manner of the statement pursuant to section 270C.30.

(g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph (a), clause (2), must submit the returns required by this subdivision and subdivision 1, paragraph (a), with the commissioner by electronic means.

EFFECTIVE DATE. This section is effective for statements required to be sent to the commissioner after December 31, 2015.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3817

Sec. 3. Minnesota Statutes 2014, section 289A.12, subdivision 14, is amended to read:

Subd. 14. ~~Regulated investment companies;~~ Reporting exempt interest and exempt-interest dividends. (a) A regulated investment company paying $10 or more in exempt-interest dividends to an individual who is a resident of Minnesota, or any person receiving $10 or more of exempt interest or exempt-interest dividends and paying as nominee to an individual who is a resident of Minnesota, must make a return indicating the amount of the exempt interest or exempt-interest dividends, the name, address, and Social Security number of the recipient, and any other information that the commissioner specifies. The return must be provided to the ~~shareholder~~ recipient by February 15 of the year following the year of the payment. The return provided to the ~~shareholder~~ recipient must include a clear statement, in the form prescribed by the commissioner, that the exempt interest or exempt-interest dividends must be included in the computation of Minnesota taxable income. By June 1 of each year, the ~~regulated investment company~~ payor must file a copy of the return with the commissioner.

(b) For purposes of this subdivision, the following definitions apply.

(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code, but does not include the portion of exempt-interest dividends that are not required to be added to federal taxable income under section 290.01, subdivision 19a, clause (1)(ii).

(2) "Regulated investment company" means regulated investment company as defined in section 851(a) of the Internal Revenue Code or a fund of the regulated investment company as defined in section 851(g) of the Internal Revenue Code.

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

EFFECTIVE DATE. This section is effective for reports required to be filed after December 31, 2015.

Sec. 4. Minnesota Statutes 2014, section 289A.60, subdivision 28, is amended to read:

Subd. 28. Preparer identification number. Any Minnesota ~~individual~~ income tax return or claim for refund prepared by a "tax refund or return preparer" as defined in subdivision 13, paragraph (f), shall bear the identification number the preparer is required to use federally under section 6109(a)(4) of the Internal Revenue Code. A tax refund or return preparer who prepares a Minnesota tax return for an individual ~~income tax return~~, corporation, S corporation, partnership, fiduciary, or claim for refund and fails to include the required number on the return or claim is subject to a penalty of $50 for each failure.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 5. Minnesota Statutes 2014, section 290A.19, is amended to read:

290A.19 OWNER OR MANAGING AGENT TO FURNISH RENT CERTIFICATE.

(a) The owner or managing agent of any property for which rent is paid for occupancy as a homestead must furnish a certificate of rent paid to a person who is a renter on December 31, in the form prescribed by the commissioner. If the renter moves before December 31, the owner or managing agent may give the certificate to the renter at the time of moving, or mail the certificate to the forwarding address if an address has been provided by the renter. The certificate must be made available to the renter before February 1 of the year following the year in

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3818

which the rent was paid. The owner or managing agent must retain a duplicate of each certificate or an equivalent record showing the same information for a period of three years. The duplicate or other record must be made available to the commissioner upon request.

(b) The commissioner may require the owner or managing agent, through a simple process, to furnish to the commissioner on or before March 1 a copy of each certificate of rent paid furnished to a renter for rent paid in the prior year, in the content, format, and manner prescribed by the commissioner pursuant to section 270C.30. Before implementing requirements under this paragraph, the commissioner, after consulting with representatives of owners or managing agents, shall develop an implementation and administration plan for the requirements of this paragraph that attempts to minimize financial burdens, costs of administration and compliance, and takes into consideration existing systems of owners and managing agents.

(c) For the purposes of this section, "owner" includes a park owner as defined under section 327C.01, subdivision 6, and "property" includes a lot as defined under section 327C.01, subdivision 3.

EFFECTIVE DATE. This section is effective for certificates of rent paid for rent paid after December 31, 2014.

Sec. 6. Minnesota Statutes 2014, section 291.03, subdivision 10, is amended to read:

Subd. 10. Qualified farm property. Property satisfying all of the following requirements is qualified farm property:

(1) The value of the property was included in the federal adjusted taxable estate.

(2) The property consists of agricultural land and is owned by a person or entity that is either not subject to or is in compliance with section 500.24.

(3) For property taxes payable in the taxable year of the decedent's death, the property is classified as class 2a property under section 273.13, subdivision 23, and is classified as agricultural homestead, agricultural relative homestead, or special agricultural homestead under section 273.124.

(4) The decedent continuously owned the property, including property the decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for the three-year period ending on the date of death of the decedent either by ownership of the agricultural land or pursuant to holding an interest in an entity that is not subject to or is in compliance with section 500.24.

(5) The property is classified for property tax purposes as class 2a property under section 273.13, subdivision 23, for three years following the date of death of the decedent., provided that:

(i) no property ceases to be qualified farm property solely because a residence existing at the time of the decedent's death is reclassified as class 4bb property under section 273.13, subdivision 25, during the three-year period; and

(ii) no property ceases to be qualified farm property solely because a portion consisting of no more than one-fifth is reclassified as 2b property under section 273.13, subdivision 23, during the three-year period, if the qualified heir has not substantially altered the reclassified property during the holding period.

(6) The estate and the qualified heir elect to treat the property as qualified farm property and agree, in a form prescribed by the commissioner, to pay the recapture tax under subdivision 11, if applicable.

EFFECTIVE DATE. This section is effective retroactively for estates of decedents dying after June 30, 2011.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3819

ARTICLE 7

DEPARTMENT OF REVENUE POLICY PROVISIONS: SPECIAL TAXES

Section 1. Minnesota Statutes 2014, section 289A.38, subdivision 6, is amended to read:

Subd. 6. Omission in excess of 25 percent. Additional taxes may be assessed within 6-1/2 years after the due date of the return or the date the return was filed, whichever is later, if:

(1) the taxpayer omits from gross income an amount properly includable in it that is in excess of 25 percent of the amount of gross income stated in the return;

(2) the taxpayer omits from a sales, use, or withholding tax return, or a return for a tax imposed under section 295.52, an amount of taxes in excess of 25 percent of the taxes reported in the return; or

(3) the taxpayer omits from the gross estate assets in excess of 25 percent of the gross estate reported in the return.

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

Sec. 2. Minnesota Statutes 2014, section 295.54, subdivision 2, is amended to read:

Subd. 2. Pharmacy refund. A pharmacy may claim an annual refund against the total amount of tax, if any, the pharmacy owes during that calendar year under section 295.52, subdivision 4. The refund shall equal the amount paid by the pharmacy to a wholesale drug distributor subject to tax under section 295.52, subdivision 3, for legend drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage specified in section 295.52, subdivision 3. If the amount of the refund exceeds the tax liability of the pharmacy under section 295.52, subdivision 4, the commissioner shall provide the pharmacy with a refund equal to the excess amount. Each qualifying pharmacy must apply for the refund on the annual return as ~~provided under section 295.55, subdivision 5~~ prescribed by the commissioner, on or before March 15 of the year following the calendar year the legend drugs were delivered outside Minnesota. The refund ~~must be claimed within 18 months from the date the drugs were delivered outside of Minnesota~~ shall not be allowed if the initial claim for refund is filed more than one year after the original due date of the return. Interest on refunds paid under this subdivision will begin to accrue 60 days after the date a claim for refund is filed. For purposes of this subdivision, the date a claim is filed is the due date of the return if a return is due or the date of the actual claim for refund, whichever is later.

EFFECTIVE DATE. This section is effective for qualifying legend drugs delivered outside Minnesota after December 31, 2014.

Sec. 3. Minnesota Statutes 2014, section 296A.01, is amended by adding a subdivision to read:

Subd. 9a. Bulk storage or bulk storage facility. "Bulk storage" or "bulk storage facility" means a single property, or contiguous or adjacent properties used for a common purpose and owned or operated by the same person, on or in which are located one or more stationary tanks that are used singularly or in combination for the storage or containment of more than 1,100 gallons of petroleum.

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

Sec. 4. Minnesota Statutes 2014, section 296A.01, subdivision 33, is amended to read:

Subd. 33. Motor fuel. "Motor fuel" means a liquid or gaseous form of fuel, regardless of its composition or properties, used to propel a motor vehicle.

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3820

Sec. 5. Minnesota Statutes 2014, section 297E.02, subdivision 7, is amended to read:

Subd. 7. Untaxed gambling product. (a) In addition to penalties or criminal sanctions imposed by this chapter, a person, organization, or business entity possessing or selling a pull-tab, electronic pull-tab game, or tipboard upon which the tax imposed by this chapter has not been paid is liable for a tax of six percent of the ideal gross of each pull-tab, electronic pull-tab game, or tipboard. The tax on a partial deal must be assessed as if it were a full deal.

(b) In addition to penalties and criminal sanctions imposed by this chapter, a person (1) not licensed by the board who conducts bingo, linked bingo, electronic linked bingo, raffles, or paddlewheel games, or (2) who conducts gambling prohibited under sections 609.75 to 609.763, other than activities subject to tax under section 297E.03, is liable for a tax of six percent of the gross receipts from that activity.

(c) The tax ~~must~~ may be assessed by the commissioner. An assessment must be considered a jeopardy assessment or jeopardy collection as provided in section 270C.36. The commissioner shall assess the tax based on personal knowledge or information available to the commissioner. The commissioner shall mail to the taxpayer at the taxpayer's last known address, or serve in person, a written notice of the amount of tax, demand its immediate payment, and, if payment is not immediately made, collect the tax by any method described in chapter 270C, except that the commissioner need not await the expiration of the times specified in chapter 270C. The tax assessed by the commissioner is presumed to be valid and correctly determined and assessed. The burden is upon the taxpayer to show its incorrectness or invalidity. The tax imposed under this subdivision does not apply to gambling that is exempt from taxation under subdivision 2.

(d) A person, organization, or business entity conducting gambling activity under this subdivision must file monthly tax returns with the commissioner, in the form required by the commissioner. The returns must be filed on or before the 20th day of the month following the month in which the gambling activity occurred. The tax imposed by this section is due and payable at the time when the returns are required to be filed.

(e) Notwithstanding any law to the contrary, neither the commissioner nor a public employee may reveal facts contained in a tax return filed with the commissioner of revenue as required by this subdivision, nor can any information contained in the report or return be used against the tax obligor in any criminal proceeding, unless independently obtained, except in connection with a proceeding involving taxes due under this section, or as provided in section 270C.055, subdivision 1. However, this paragraph does not prohibit the commissioner from publishing statistics that do not disclose the identity of tax obligors or the contents of particular returns or reports. Any person violating this paragraph is guilty of a gross misdemeanor.

EFFECTIVE DATE. This section is effective for games played or purchased after June 30, 2015.

ARTICLE 8

DEPARTMENT OF REVENUE POLICY PROVISIONS: PROPERTY TAXES

Section 1. Minnesota Statutes 2014, section 13.51, subdivision 2, is amended to read:

Subd. 2. Income property assessment data. The following data collected by political subdivisions and the state from individuals or business entities concerning income properties are classified as private or nonpublic data pursuant to section 13.02, subdivisions 9 and 12:

(a) detailed income and expense figures;

(b) average vacancy factors;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3821

(d) anticipated income and expenses;

(e) projected vacancy factors; and

(f) lease information.

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

Sec. 2. Minnesota Statutes 2014, section 270.071, subdivision 2, is amended to read:

Subd. 2. Air commerce. ~~(a)~~ "Air commerce" means the transportation by aircraft of persons or property for hire in interstate, intrastate, or international transportation on regularly scheduled flights or on intermittent or irregularly timed flights by airline companies and includes transportation by any airline company making three or more flights in or out of Minnesota, or within Minnesota, during a calendar year.

(b) "Air commerce" includes but is not limited to an intermittent or irregularly timed flight, a flight arranged at the convenience of an airline and the person contracting for the transportation, or a charter flight. It includes any airline company making three or more flights in or out of Minnesota during a calendar year.

(c) "Air commerce" does not include casual transportation for hire by aircraft commonly owned and used for private air flight purposes if the person furnishing the transportation does not hold out to be engaged regularly in transportation for hire.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 3. Minnesota Statutes 2014, section 270.071, subdivision 7, is amended to read:

Subd. 7. Flight property. "Flight property" means all aircraft and flight equipment used in connection therewith, including spare flight equipment. Flight property also includes computers and computer software used in operating, controlling, or regulating aircraft and flight equipment. Flight property does not include aircraft with a maximum takeoff weight of less than 30,000 pounds.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 4. Minnesota Statutes 2014, section 270.071, subdivision 8, is amended to read:

Subd. 8. Person. "Person" means ~~any~~ an individual, ~~corporation, firm, copartnership, company, or association, and includes any guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity therefor~~ trust, estate, fiduciary, partnership, company, corporation, limited liability company, association, governmental unit or agency, public or private organization of any kind, or other legal entity.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 5. Minnesota Statutes 2014, section 270.071, is amended by adding a subdivision to read:

Subd. 10. Intermittent or irregularly timed flights. "Intermittently or irregularly timed flights" means any flight in which the departure time, departure location, and arrival location are specifically negotiated with the customer or the customer's representative, including but not limited to charter flights.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3822

Sec. 6. Minnesota Statutes 2014, section 270.072, subdivision 2, is amended to read:

Subd. 2. Assessment of flight property. Flight property that is owned by, or is leased, loaned, or otherwise made available to an airline company operating in Minnesota shall be assessed and appraised annually by the commissioner with reference to its value on January 2 of the assessment year in the manner prescribed by sections 270.071 to 270.079. ~~Aircraft with a gross weight of less than 30,000 pounds and used on intermittent or irregularly timed flights shall be excluded from the provisions of sections 270.071 to 270.079.~~

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 7. Minnesota Statutes 2014, section 270.072, subdivision 3, is amended to read:

Subd. 3. Report by airline company. (a) Each year, on or before July 1, every airline company engaged in air commerce in this state shall file with the commissioner a report under oath setting forth specifically the information prescribed by the commissioner to enable the commissioner to make the assessment required in sections 270.071 to 270.079, unless the commissioner determines that the airline company ~~or person should be excluded from~~ is exempt from filing ~~because its activities do not constitute air commerce as defined herein~~.

(b) The commissioner shall prescribe the content, format, and manner of the report pursuant to section 270C.30, except that a "law administered by the commissioner" includes the property tax laws. If a report is made by electronic means, the taxpayer's signature is defined pursuant to section 270C.304, except that a "law administered by the commissioner" includes the property tax laws.

EFFECTIVE DATE. The amendment to paragraph (a) is effective for reports filed in 2016 and thereafter. The amendment adding paragraph (b) is effective the day following final enactment.

Sec. 8. Minnesota Statutes 2014, section 270.072, is amended by adding a subdivision to read:

Subd. 3a. Commissioner filed reports. If an airline company fails to file a report required by subdivision 3, the commissioner may, from information in the commissioner's possession or obtainable by the commissioner, make and file a report for the airline company, or may issue a notice of net tax capacity and tax under section 270.075, subdivision 2.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 9. Minnesota Statutes 2014, section 270.12, is amended by adding a subdivision to read:

Subd. 6. Reassessment orders. If the State Board of Equalization determines that a considerable amount of property has been undervalued or overvalued compared to like property such that the assessment is grossly unfair or inequitable, the State Board of Equalization may, pursuant to its responsibilities under subdivisions 2 and 3, issue orders to the county assessor to reassess all or any part of a parcel in a county.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 10. Minnesota Statutes 2014, section 270.82, subdivision 1, is amended to read:

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3823

270C.30, except that a "law administered by the commissioner" includes the property tax laws. If a report is made by electronic means, the taxpayer's signature is defined pursuant to section 270C.304, except that a "law administered by the commissioner" includes the property tax laws.

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

Sec. 11. Minnesota Statutes 2014, section 270C.89, subdivision 1, is amended to read:

Subdivision 1. Initial report. Each county assessor shall file by April 1 with the commissioner a copy of the abstract that will be acted upon by the local and county boards of review. The abstract must list the real and personal property in the county itemized by assessment districts. The assessor of each county in the state shall file with the commissioner, within ten working days following final action of the local board of review or equalization and within five days following final action of the county board of equalization, any changes made by the local or county board. The information must be filed in the manner prescribed by the commissioner. ~~It must be accompanied by a printed or typewritten copy of the proceedings of the appropriate board.~~

EFFECTIVE DATE. This section is effective for county boards of appeal and equalization meetings held in 2016 and thereafter.

Sec. 12. Minnesota Statutes 2014, section 272.029, subdivision 2, is amended to read:

Subd. 2. Definitions. (a) For the purposes of this section, the term:

(1) "wind energy conversion system" has the meaning given in section 216C.06, subdivision 19, and also includes a substation that is used and owned by one or more wind energy conversion facilities;

(2) "large scale wind energy conversion system" means a wind energy conversion system of more than 12 megawatts, as measured by the nameplate capacity of the system or as combined with other systems as provided in paragraph (b);

(3) "medium scale wind energy conversion system" means a wind energy conversion system of over two and not more than 12 megawatts, as measured by the nameplate capacity of the system or as combined with other systems as provided in paragraph (b); and

(4) "small scale wind energy conversion system" means a wind energy conversion system of two megawatts and under, as measured by the nameplate capacity of the system or as combined with other systems as provided in paragraph (b).

(b) For systems installed and contracted for after January 1, 2002, the total size of a wind energy conversion system under this subdivision shall be determined according to this paragraph. Unless the systems are interconnected with different distribution systems, the nameplate capacity of one wind energy conversion system shall be combined with the nameplate capacity of any other wind energy conversion system that is:

(1) located within five miles of the wind energy conversion system;

(2) constructed within the same ~~calendar year~~ 12-month period as the wind energy conversion system; and

(3) under common ownership.

In the case of a dispute, the commissioner of commerce shall determine the total size of the system, and shall draw all reasonable inferences in favor of combining the systems.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3824

(c) In making a determination under paragraph (b), the commissioner of commerce may determine that two wind energy conversion systems are under common ownership when the underlying ownership structure contains similar persons or entities, even if the ownership shares differ between the two systems. Wind energy conversion systems are not under common ownership solely because the same person or entity provided equity financing for the systems.

EFFECTIVE DATE. This section is effective for reports filed in 2016 and thereafter.

Sec. 13. Minnesota Statutes 2014, section 272.029, subdivision 4, is amended to read:

Subd. 4. Reports. (a) An owner of a wind energy conversion system subject to tax under subdivision 3 shall file a report with the commissioner of revenue annually on or before ~~February 1~~ January 15 detailing the amount of electricity in kilowatt-hours that was produced by the wind energy conversion system for the previous calendar year. The commissioner shall prescribe the form of the report. The report must contain the information required by the commissioner to determine the tax due to each county under this section for the current year. If an owner of a wind energy conversion system subject to taxation under this section fails to file the report by the due date, the commissioner of revenue shall determine the tax based upon the nameplate capacity of the system multiplied by a capacity factor of 60 percent.

(b) On or before February 28, the commissioner of revenue shall notify the owner of the wind energy conversion systems of the tax due to each county for the current year and shall certify to the county auditor of each county in which the systems are located the tax due from each owner for the current year.

EFFECTIVE DATE. This section is effective for reports filed in 2016 and thereafter.

Sec. 14. Minnesota Statutes 2014, section 272.029, is amended by adding a subdivision to read:

Subd. 8. Extension. The commissioner may, for good cause, extend the time for filing the report required by subdivision 4. The extension must not exceed 15 days.

EFFECTIVE DATE. This section is effective for reports filed in 2016 and thereafter.

Sec. 15. Minnesota Statutes 2014, section 273.061, subdivision 7, is amended to read:

Subd. 7. Division of duties between local and county assessor. The duty of the duly appointed local assessor shall be to view and appraise the value of all property as provided by law, but all the book work shall be done by the county assessor, or the assessor's assistants, and the value of all property subject to assessment and taxation shall be determined by the county assessor, except as otherwise hereinafter provided. If directed by the county assessor, the local assessor ~~shall~~ must perform the duties enumerated in subdivision 8, clause (16), and must enter construction and valuation data into the records in the manner prescribed by the county auditor.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 16. Minnesota Statutes 2014, section 273.08, is amended to read:

273.08 ASSESSOR'S DUTIES.

The assessor shall actually view, and determine the market value of each tract or lot of real property listed for taxation, including the value of all improvements and structures thereon, at maximum intervals of five years and shall enter the value opposite each description. When directed by the county assessor, local assessors must enter construction and valuation data into the records in the manner prescribed by the county assessor.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3825

Sec. 17. Minnesota Statutes 2014, section 273.121, is amended by adding a subdivision to read:

Subd. 3. Compliance. A county assessor, or a city assessor having the powers of a county assessor, who does not comply with the timely notice requirement under subdivision 1 must:

(1) mail an additional valuation notice to each person who was not provided timely notice; and

(2) convene a supplemental local board of appeal and equalization or local review session no sooner than ten days after sending the additional notices required by clause (1).

EFFECTIVE DATE. This section is effective for valuation notices sent in 2016 and thereafter.

Sec. 18. Minnesota Statutes 2014, section 273.371, is amended to read:

273.371 REPORTS OF UTILITY COMPANIES.

Subdivision 1. Report required. Every electric light, power, gas, water, express, stage, ~~and~~ transportation ~~company~~, and pipeline company doing business in Minnesota shall annually file with the commissioner on or before March 31 a report under oath setting forth the information prescribed by the commissioner to enable the commissioner to make valuations, recommended valuations, and equalization required under sections 273.33, 273.35, 273.36, 273.37, and 273.3711. If all the required information is not available on March 31, the company or pipeline shall file the information that is available on or before March 31, and the balance of the information as soon as it becomes available.

Subd. 2. Extension. The commissioner for good cause may extend the time for filing the report required by subdivision 1. The extension ~~may~~ must not exceed 15 days.

Subd. 3. Reports filed by the commissioner. If a company fails to file a report required by subdivision 1, the commissioner may, from information in the commissioner's possession or obtainable by the commissioner, make and file a report for the company, or make the valuations, recommended valuations, and equalizations required under sections 273.33, 273.35 to 273.37, and 273.3711.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 19. Minnesota Statutes 2014, section 273.372, subdivision 2, is amended to read:

Subd. 2. Contents and filing of petition. (a) In all appeals to court that are required to be brought against the commissioner under this section, the petition initiating the appeal must be served on the commissioner and must be filed with the Tax Court in Ramsey County, as provided in paragraph (b) or (c).

(b) If the appeal to court is from an order of the commissioner, it must be brought under chapter 271 and filed within the time period prescribed in section 271.06, subdivision 2, except that when the provisions of this section conflict with chapter 271 or 278, this section prevails. In addition, the petition must include all the parcels encompassed by that order which the petitioner claims have been partially, unfairly, or unequally assessed, assessed at a valuation greater than their real or actual value, misclassified, or are exempt. For this purpose, an order of the commissioner is either (1) a certification or notice of value by the commissioner for property described in subdivision 1, or (2) the final determination by the commissioner of either an administrative appeal conference or informal administrative appeal described in subdivision 4.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3826

(c) If the appeal is from the tax that results from implementation of the commissioner's order, certification, or recommendation, it must be brought under chapter 278, and the provisions in that chapter apply, except that service shall be on the commissioner only and not on the local officials specified in section 278.01, subdivision 1, and if any other provision of this section conflicts with chapter 278, this section prevails. In addition, the petition must include either all the utility parcels or all the railroad parcels in the state in which the petitioner claims an interest and which the petitioner claims have been partially, unfairly, or unequally assessed, assessed at a valuation greater than their real or actual value, misclassified, or are exempt.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 20. Minnesota Statutes 2014, section 273.372, subdivision 4, is amended to read:

Subd. 4. Administrative appeals. (a) Companies that submit the reports under section 270.82 or 273.371 by the date specified in that section, or by the date specified by the commissioner in an extension, may appeal administratively to the commissioner prior to bringing an action in court.

(b) Companies ~~that~~ must ~~submit reports under section 270.82 must submit~~ file a written request to for an appeal with the commissioner ~~for a conference~~ within ~~ten~~ 30 days after the notice date of the commissioner's valuation certification or other notice to the company~~, or by June 15, whichever is earlier~~. For purposes of this section, the term "notice date" means the date of the valuation certification, commissioner's order, recommendation, or other notice.

(c) Companies that submit reports under section 273.371 must submit a written request to the commissioner for a conference within ten days after the date of the commissioner's valuation certification or notice to the company, or by July 1, whichever is earlier. The appeal need not be in any particular form but must contain the following information:

(1) name and address of the company;

(2) the date;

(3) its Minnesota identification number;

(4) the assessment year or period involved;

(5) the findings in the valuation that the company disputes;

(6) a summary statement specifying its reasons for disputing each item; and

(7) the signature of the company's duly authorized agent or representative.

(d) When requested in writing and within the time allowed for filing an administrative appeal, the commissioner may extend the time for filing an appeal for a period of not more than 15 days from the expiration of the time for filing the appeal.

~~(d)~~ (e) The commissioner shall conduct the conference either in person or by telephone upon the commissioner's entire files and records and such further information as may be offered. The conference must be held no later than 20 days after the date of the ~~commissioner's valuation certification or notice to the company, or by the date specified by the commissioner in an extension~~ request for an appeal. Within 60 30 days after the conference the commissioner shall make a final determination of the matter and shall notify the company promptly of the determination. The conference is not a contested case hearing subject to chapter 14.

~~Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3827~~

(e) In addition to the opportunity for a conference under paragraph (a), the commissioner shall also provide the railroad and utility companies the opportunity to discuss any questions or concerns relating to the values established by the commissioner through certification or notice in a less formal manner. This does not change or modify the deadline for requesting a conference under paragraph (a), the deadline in section 271.06 for appealing an order of the commissioner, or the deadline in section 278.01 for appealing property taxes in court.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 21. Minnesota Statutes 2014, section 273.372, is amended by adding a subdivision to read:

Subd. 5. Agreement determining valuation. When it appears to be in the best interest of the state, the commissioner may settle any matter under consideration regarding an appeal filed under this section. The agreement must be in writing and signed by the commissioner and the company or the company's authorized representative. The agreement is final and conclusive, and except upon a showing of fraud, malfeasance, or misrepresentation of a material fact, the case may not be reopened as to the matters agreed upon.

EFFECTIVE DATE. This section is effective for assessment year 2016 and thereafter.

Sec. 22. Minnesota Statutes 2014, section 273.372, is amended by adding a subdivision to read:

Subd. 6. Dismissal of administrative appeal. If a taxpayer files an administrative appeal from an order of the commissioner and also files an appeal to the tax court for that same order of the commissioner, the administrative appeal is dismissed and the commissioner is no longer required to make the determination of appeal under subdivision 4.

EFFECTIVE DATE. This section is effective beginning with assessment year 2015.

Sec. 23. Minnesota Statutes 2014, section 274.13, subdivision 1, is amended to read:

Subdivision 1. Members; meetings; rules for equalizing assessments. The county commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be present, the deputy county auditor, or, if there is no deputy, the court administrator of the district court, shall form a board for the equalization of the assessment of the property of the county, including the property of all cities whose charters provide for a board of equalization. This board shall be referred to as the county board of appeal and equalization. The board shall meet annually, on the date specified in section 274.14, at the office of the auditor. Each member shall take an oath to fairly and impartially perform duties as a member. Members shall not participate in any actions of the board which result in market value adjustments or classification changes to property owned by the board member, the spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece of a board member, or property in which a board member has a financial interest. The relationship may be by blood or marriage. The board shall examine and compare the returns of the assessment of property of the towns or districts, and equalize them so that each tract or lot of real property and each article or class of personal property is entered on the assessment list at its market value, subject to the following rules:

(1) The board shall raise the valuation of each tract or lot of real property which in its opinion is returned below its market value to the sum believed to be its market value. The board must first give notice of intention to raise the valuation to the person in whose name it is assessed, if the person is a resident of the county. The notice must fix a time and place for a hearing.

(2) The board shall reduce the valuation of each tract or lot which in its opinion is returned above its market value to the sum believed to be its market value.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3828

(3) The board shall raise the valuation of each class of personal property which in its opinion is returned below its market value to the sum believed to be its market value. It shall raise the aggregate value of the personal property of individuals, firms, or corporations, when it believes that the aggregate valuation, as returned, is less than the market value of the taxable personal property possessed by the individuals, firms, or corporations, to the sum it believes to be the market value. The board must first give notice to the persons of intention to do so. The notice must set a time and place for a hearing.

(4) The board shall reduce the valuation of each class of personal property that is returned above its market value to the sum it believes to be its market value. Upon complaint of a party aggrieved, the board shall reduce the aggregate valuation of the individual's personal property, or of any class of personal property for which the individual is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes was the market value of the individual's personal property of that class.

(5) The board must not reduce the aggregate value of all the property of its county, as submitted to the county board of equalization, with the additions made by the auditor under this chapter, by more than one percent of its whole valuation. The board may raise the aggregate valuation of real property, and of each class of personal property, of the county, or of any town or district of the county, when it believes it is below the market value of the property, or class of property, to the aggregate amount it believes to be its market value.

(6) The board shall change the classification of any property which in its opinion is not properly classified.

(7) The board does not have the authority to grant an exemption or to order property removed from the tax rolls.

(8) The board may not make an individual market value adjustment or classification change that would benefit property if the owner or other person having control over the property has refused the assessor access to inspect the property and the interior of any buildings or structures as provided in section 273.20.

EFFECTIVE DATE. This section is effective for county board of appeal and equalization meetings in 2016 and thereafter.

Sec. 24. Minnesota Statutes 2014, section 275.62, subdivision 2, is amended to read:

Subd. 2. Local governments required to report. For purposes of this section, "local governmental unit" means a county, home rule charter or statutory city with a population greater than 2,500~~, a town with a population greater than 5,000, or a home rule charter or statutory city or town that receives a distribution from the taconite municipal aid account in the levy year~~.

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

Sec. 25. Minnesota Statutes 2014, section 278.01, subdivision 1, is amended to read:

Subdivision 1. Determination of validity. (a) Any person having personal property, or any estate, right, title, or interest in or lien upon any parcel of land, who claims that such property has been partially, unfairly, or unequally assessed in comparison with other property in the (1) city, or (2) county, or (3) in the case of a county containing a city of the first class, the portion of the county excluding the first class city, or that the parcel has been assessed at a valuation greater than its real or actual value, or that the tax levied against the same is illegal, in whole or in part, or has been paid, or that the property is exempt from the tax so levied, may have the validity of the claim, defense, or objection determined by the district court of the county in which the tax is levied or by the Tax Court by serving one copy of a petition for such determination upon the county auditor, one copy on the county attorney, one copy on the county treasurer, and three copies on the county assessor. The county assessor shall immediately forward one copy of the petition to the appropriate governmental authority in a home rule charter or statutory city or town in which the property is located if that city or town employs its own certified assessor. A copy of the petition shall also be forwarded by the assessor to the school board of the school district in which the property is located.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3829

(b) In counties where the office of county treasurer has been combined with the office of county auditor, the county may elect to require the petitioner to serve the number of copies as determined by the county. The county assessor shall immediately forward one copy of the petition to the appropriate governmental authority in a home rule charter or statutory city or town in which the property is located if that city or town employs its own certified assessor. A list of petitioned properties, including the name of the petitioner, the identification number of the property, and the estimated market value, shall be sent on or before the first day of July by the county auditor/treasurer to the school board of the school district in which the property is located.

(c) For all counties, the petitioner must file the copies with proof of service, in the office of the court administrator of the district court on or before April 30 of the year in which the tax becomes payable. A petition for determination under this section may be transferred by the district court to the Tax Court. An appeal may also be taken to the Tax Court under chapter 271 at any time following receipt of the valuation notice that county assessors are required by section 273.121 to send to persons whose property is to be included on the assessment roll that year, but prior to May 1 of the year in which the taxes are payable.

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

Sec. 26. Minnesota Statutes 2014, section 290C.03, is amended to read:

290C.03 ELIGIBILITY REQUIREMENTS.

(a) Land may be enrolled in the sustainable forest incentive program under this chapter if all of the following conditions are met:

(1) the land consists of at least 20 contiguous acres and at least 50 percent of the land must meet the definition of forest land in section 88.01, subdivision 7, during the enrollment;

(2) a forest management plan for the land must be (i) prepared by an approved plan writer and implemented during the period in which the land is enrolled, and (ii) registered with the Department of Natural Resources;

(3) timber harvesting and forest management guidelines must be used in conjunction with any timber harvesting or forest management activities conducted on the land during the period in which the land is enrolled;

(4) the land must be enrolled for a minimum of eight years;

(5) there are no delinquent property taxes on the land; ~~and~~

(6) claimants enrolling more than 1,920 acres in the sustainable forest incentive program must allow year-round, nonmotorized access to fish and wildlife resources and motorized access on established and maintained roads and trails, unless the road or trail is temporarily closed for safety, natural resource, or road damage reasons on enrolled land except within one-fourth mile of a permanent dwelling or during periods of high fire hazard as determined by the commissioner of natural resources.; and

(7) the land is not classified as 2c managed forest land.

(b) Claimants required to allow access under paragraph (a), clause (6), do not by that action:

(1) extend any assurance that the land is safe for any purpose;

(2) confer upon the person the legal status of an invitee or licensee to whom a duty of care is owed; or

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3830

(3) assume responsibility for or incur liability for any injury to the person or property caused by an act or omission of the person.

(c) A minimum of three acres must be excluded from enrolled land when the land is improved with a structure that is not a minor, ancillary, or nonresidential structure. If land does not meet the definition of forest land in section 290C.02, subdivision 6, because the land is (1) enrolled in the reinvest in Minnesota program, (2) enrolled in a state or federal conservation reserve or easement program under sections 103F.501 to 103F.531, (3) subject to the Minnesota agricultural property tax under section 273.111, or (4) subject to agricultural land preservation controls or restrictions as defined in section 40A.02, or the Metropolitan Agricultural Preserves Act under chapter 473H, the entire parcel that contains the land is not eligible to be enrolled in the program.

EFFECTIVE DATE. The amendment to paragraph (a), clause (2), is effective for certifications filed after July 1, 2016. The amendment adding paragraph (a), clause (7), is effective for certifications and applications due in 2015 and thereafter. The amendment adding paragraph (c) is effective the day following final enactment.

Sec. 27. Minnesota Statutes 2014, section 477A.013, is amended by adding a subdivision to read:

Subd. 14. Communication by electronic mail. Prior to receiving aid pursuant to this section, a city must register an official electronic mail address with the commissioner, which the commissioner may use as an exclusive means to communicate with the city.

EFFECTIVE DATE. This section is effective for aids payable in 2016 and thereafter.

Sec. 28. Minnesota Statutes 2014, section 477A.19, is amended by adding a subdivision to read:

Subd. 3a. Certification. On or before June 1 of each year, the commissioner of natural resources shall certify to the commissioner of revenue the number of watercraft launches and the number of watercraft trailer parking spaces in each county.

EFFECTIVE DATE. This section is effective for aids payable in 2016 and thereafter.

Sec. 29. Minnesota Statutes 2014, section 477A.19, is amended by adding a subdivision to read:

Subd. 3b. Certification. On or before June 1 of each year, the commissioner of natural resources shall certify to the commissioner of revenue the counties that complied with the requirements of subdivision 3 the prior year and are eligible to receive aid under this section.

EFFECTIVE DATE. This section is effective for aids payable in 2016 and thereafter.

Sec. 30. Minnesota Statutes 2014, section 559.202, subdivision 2, is amended to read:

Subd. 2. Exception. This section does not apply to sales made under chapter 282 or if the purchaser is represented throughout the transaction by either:

(1) a person licensed to practice law in this state; or

(2) a person licensed as a real estate broker or salesperson under chapter 82, provided that the representation does not create a dual agency, as that term is defined in section 82.55, subdivision 6.

EFFECTIVE DATE. This section is effective for sales of tax-forfeited land occurring after the day following final enactment.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3831

Sec. 31. Laws 2014, chapter 308, article 1, section 14, subdivision 2, is amended to read:

Subd. 2. Payment of supplemental credit. (a) The commissioner must pay supplemental credit amounts to each qualifying taxpayer by October 15, 2014.

(b) If the commissioner cannot locate the qualifying taxpayer by October 15, 2016, or if a qualifying taxpayer to whom a warrant was issued does not cash that warrant within two years from the date the warrant was issued, the right to the credit shall lapse and the warrant shall be deposited in the general fund.

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

Sec. 32. REPEALER.

Minnesota Statutes 2014, sections 290C.02, subdivisions 5 and 9; and 290C.06, are repealed.

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

ARTICLE 9

DEPARTMENT OF REVENUE POLICY PROVISIONS: MISCELLANEOUS

Section 1. Minnesota Statutes 2014, section 270.82, subdivision 1, is amended to read:

Subdivision 1. Annual report required. Every railroad company doing business in Minnesota shall annually file with the commissioner on or before March 31 a report under oath setting forth the information prescribed by the commissioner to enable the commissioner to make the valuation and equalization required by sections 270.80 to 270.87. The commissioner shall prescribe the content, format, and manner of the report pursuant to section 270C.30, except that a "law administered by the commissioner" includes the property tax laws. If a report is made by electronic means, the taxpayer's signature is defined pursuant to section 270C.304, except that a "law administered by the commissioner" includes the property tax laws.

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

Sec. 2. Minnesota Statutes 2014, section 270B.14, subdivision 1, is amended to read:

Subdivision 1. Disclosure to commissioner of human services. (a) On the request of the commissioner of human services, the commissioner shall disclose return information regarding taxes imposed by chapter 290, and claims for refunds under chapter 290A, to the extent provided in paragraph (b) and for the purposes set forth in paragraph (c).

(b) Data that may be disclosed are limited to data relating to the identity, whereabouts, employment, income, and property of a person owing or alleged to be owing an obligation of child support.

(c) The commissioner of human services may request data only for the purposes of carrying out the child support enforcement program and to assist in the location of parents who have, or appear to have, deserted their children. Data received may be used only as set forth in section 256.978.

(d) The commissioner shall provide the records and information necessary to administer the supplemental housing allowance to the commissioner of human services.

(e) At the request of the commissioner of human services, the commissioner of revenue shall electronically match the Social Security numbers and names of participants in the telephone assistance plan operated under sections 237.69 to 237.71, with those of property tax refund filers, and determine whether each participant's household income is within the eligibility standards for the telephone assistance plan.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3832

(f) The commissioner may provide records and information collected under sections 295.50 to 295.59 to the commissioner of human services for purposes of the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law 102-234. Upon the written agreement by the United States Department of Health and Human Services to maintain the confidentiality of the data, the commissioner may provide records and information collected under sections 295.50 to 295.59 to the Centers for Medicare and Medicaid Services section of the United States Department of Health and Human Services for purposes of meeting federal reporting requirements.

(g) The commissioner may provide records and information to the commissioner of human services as necessary to administer the early refund of refundable tax credits.

(h) The commissioner may disclose information to the commissioner of human services as necessary ~~to verify income~~ for welfare income verification for eligibility and premium payment under the MinnesotaCare program, under section 256L.05, subdivision 2, as well as the medical assistance program under section 256B.

(i) The commissioner may disclose information to the commissioner of human services necessary to verify whether applicants or recipients for the Minnesota family investment program, general assistance, food support, Minnesota supplemental aid program, and child care assistance have claimed refundable tax credits under chapter 290 and the property tax refund under chapter 290A, and the amounts of the credits.

(j) The commissioner may disclose information to the commissioner of human services necessary to verify income for purposes of calculating parental contribution amounts under section 252.27, subdivision 2a.

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

Sec. 3. Minnesota Statutes 2014, section 270C.30, is amended to read:

270C.30 RETURNS AND OTHER DOCUMENTS; FORMAT; FURNISHING.

Except as otherwise provided by law, the commissioner shall prescribe the content ~~and~~, format, and manner of all returns and other forms required to be filed under a law administered by the commissioner, and may furnish them subject to charge on application.

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

Sec. 4. Minnesota Statutes 2014, section 270C.33, subdivision 8, is amended to read:

Subd. 8. Sufficiency of notice. An assessment of tax made by the commissioner, sent postage prepaid by United States mail to the taxpayer at the taxpayer's last known address, or sent by electronic mail to the taxpayer's last known electronic mailing address as provided for in section 325L.08, is sufficient even if the taxpayer is deceased or is under a legal disability, or, in the case of a corporation, has terminated its existence, unless the commissioner has been provided with a new address by a party authorized to receive notices of assessment. Notice of an assessment is sufficient if it is sent on or before the notice date designated by the commissioner on the assessment.

EFFECTIVE DATE. This section is effective for orders dated after September 30, 2015.

Sec. 5. Minnesota Statutes 2014, section 270C.34, subdivision 2, is amended to read:

Subd. 2. Procedure. (a) A request for abatement of penalty under subdivision 1 or section 289A.60, subdivision 4, or a request for abatement of interest or additional tax charge, must be filed with the commissioner within 60 days of the notice date of the ~~notice was mailed to the taxpayer's last known address, stating that a~~ penalty

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3833

~~has been imposed~~ or additional tax charge. For purposes of this section, the term "notice date" means the notice date designated by the commissioner on the order or other notice that a penalty or additional tax charge has been imposed.

(b) If the commissioner issues an order denying a request for abatement of penalty, interest, or additional tax charge, the taxpayer may file an administrative appeal as provided in section 270C.35 or appeal to Tax Court as provided in section 271.06.

(c) If the commissioner does not issue an order on the abatement request within 60 days from the date the request is received, the taxpayer may appeal to Tax Court as provided in section 271.06.

EFFECTIVE DATE. This section is effective for orders and notices dated after September 30, 2015.

Sec. 6. Minnesota Statutes 2014, section 270C.347, subdivision 1, is amended to read:

Subdivision 1. Checks and warrants, authority to reissue. Notwithstanding any other provision of law, the commissioner may, based on a showing of reasonable cause, reissue an uncashed rebate, supplemental agricultural credit, or property tax refund warrant or check that has lapsed under any provision of law relating to rebates or under section 290A.18, subdivision 2. The authority to reissue warrants or checks under this subdivision is limited to five years after the date of issuance of the original warrant or check.

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

Sec. 7. Minnesota Statutes 2014, section 270C.35, subdivision 3, is amended to read:

Subd. 3. Notice date. For purposes of this section, the term "notice date" means the date of designated by the commissioner on the order adjusting the tax or order denying a request for abatement, or, in the case of a denied refund, the notice date of designated by the commissioner on the notice of denial.

EFFECTIVE DATE. This section is effective for orders and notices dated after September 30, 2015.

Sec. 8. Minnesota Statutes 2014, section 270C.38, subdivision 1, is amended to read:

Subdivision 1. Sufficient notice. (a) If no method of notification of a written determination or action of the commissioner is otherwise specifically provided for by law, notice of the determination or action sent postage prepaid by United States mail to the taxpayer or other person affected by the determination or action at the taxpayer's or person's last known address, is sufficient. If the taxpayer or person being notified is deceased or is under a legal disability, or, in the case of a corporation being notified that has terminated its existence, notice to the last known address of the taxpayer, person, or corporation is sufficient, unless the department has been provided with a new address by a party authorized to receive notices from the commissioner.

(b) If a taxpayer or other person agrees to accept notification by electronic means, notice of a determination or action of the commissioner sent by electronic mail to the taxpayer's or person's last known electronic mailing address as provided for in section 325L.08 is sufficient.

(c) Notice of a determination or action of the commissioner is sufficient if it is sent on or before the notice date designated by the commissioner on the assessment.

EFFECTIVE DATE. This section is effective for orders dated after September 30, 2015.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3834

Sec. 9. Minnesota Statutes 2014, section 270C.445, is amended by adding a subdivision to read:

Subd. 9. Enforcement; limitations. (a) Notwithstanding any other law, the imposition of a penalty or any other action against a tax return preparer authorized by subdivision 6 with respect to a return may be taken by the commissioner within the period provided by section 289A.38 to assess tax on that return.

(b) Imposition of a penalty or other action against a tax return preparer authorized by subdivision 6 other than with respect to a return must be taken by the commissioner within five years of the violation of statute.

EFFECTIVE DATE. This section is effective for tax preparation services provided after the day following final enactment.

Sec. 10. Minnesota Statutes 2014, section 270C.446, subdivision 5, is amended to read:

Subd. 5. Removal from list. The commissioner shall remove the name of a tax preparer from the list of tax preparers published under this section:

(1) when the commissioner determines that the name was included on the list in error;

(2) within ~~90 days~~ three years after the preparer has demonstrated to the commissioner that the preparer fully paid all fines or penalties imposed, served any suspension, satisfied any sentence imposed, successfully completed any probationary period imposed, and successfully completed any remedial actions required by the commissioner, the State Board of Accountancy, or the Lawyers Board of Professional Responsibility; or

(3) when the commissioner has been notified that the tax preparer is deceased.

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

Sec. 11. Minnesota Statutes 2014, section 271.06, subdivision 2, is amended to read:

Subd. 2. Time; notice; intervention. Except as otherwise provided by law, within 60 days after the notice ~~of the making and filing~~ date of an order of the commissioner of revenue, the appellant, or the appellant's attorney, shall serve a notice of appeal upon the commissioner and file the original, with proof of such service, with the Tax Court administrator or with the court administrator of district court acting as court administrator of the Tax Court; provided, that the Tax Court, for cause shown, may by written order extend the time for appealing for an additional period not exceeding 30 days. For purposes of this section, the term "notice date" means the notice date designated by the commissioner on the order. The notice of appeal shall be in the form prescribed by the Tax Court. Within five days after receipt, the commissioner shall transmit a copy of the notice of appeal to the attorney general. The attorney general shall represent the commissioner, if requested, upon all such appeals except in cases where the attorney general has appealed in behalf of the state, or in other cases where the attorney general deems it against the interests of the state to represent the commissioner, in which event the attorney general may intervene or be substituted as an appellant in behalf of the state at any stage of the proceedings.

Upon a final determination of any other matter over which the court is granted jurisdiction under section 271.01, subdivision 5, the taxpayer or the taxpayer's attorney shall file a petition or notice of appeal as provided by law with the court administrator of district court, acting in the capacity of court administrator of the Tax Court, with proof of service of the petition or notice of appeal as required by law and within the time required by law. As used in this subdivision, "final determination" includes a notice of assessment and equalization for the year in question received from the local assessor, an order of the local board of equalization, or an order of a county board of equalization.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3835

The Tax Court shall prescribe a filing system so that the notice of appeal or petition filed with the district court administrator acting as court administrator of the Tax Court is forwarded to the Tax Court administrator. In the case of an appeal or a petition concerning property valuation for which the assessor, a local board of equalization, a county board of equalization or the commissioner of revenue has issued an order, the officer issuing the order shall be notified of the filing of the appeal. The notice of appeal or petition shall be in the form prescribed by the Tax Court.

EFFECTIVE DATE. This section is effective for orders dated after September 30, 2015.

Sec. 12. Minnesota Statutes 2014, section 271.06, subdivision 7, is amended to read:

Subd. 7. Rules. Except as provided in section 278.05, subdivision 6, the Rules of Evidence and Civil Procedure for the district court of Minnesota shall govern the procedures in the Tax Court, where practicable. The Rules of Civil Procedure do not apply to alter the 60-day period of time to file a notice of appeal provided in subdivision 2. The Tax Court may adopt rules under chapter 14. The rules in effect on January 1, 1989, apply until superseded.

EFFECTIVE DATE. This section is effective for orders dated after September 30, 2015.

Sec. 13. Minnesota Statutes 2014, section 272.02, subdivision 10, is amended to read:

Subd. 10. Personal property used for pollution control. Personal property used primarily for the abatement and control of air, water, or land pollution is exempt to the extent that it is so used, and real property is exempt if it is used primarily for abatement and control of air, water, or land pollution as part of an agricultural operation, as a part of a centralized treatment and recovery facility operating under a permit issued by the Minnesota Pollution Control Agency pursuant to chapters 115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, and 7045.0020 to 7045.1260, as a wastewater treatment facility and for the treatment, recovery, and stabilization of metals, oils, chemicals, water, sludges, or inorganic materials from hazardous industrial wastes, or as part of an electric generation system. For purposes of this subdivision, personal property includes ponderous machinery and equipment used in a business or production activity that at common law is considered real property.

Any taxpayer requesting exemption of all or a portion of any real property or any equipment or device, or part thereof, operated primarily for the control or abatement of air, water, or land pollution shall file an application with the commissioner of revenue. The commissioner shall develop an electronic means to notify interested parties when electric power generation facilities have filed an application. The commissioner shall prescribe the content, format, and manner of the application pursuant to section 270C.30, except that a "law administered by the commissioner" includes the property tax laws, and if an application is made by electronic means, the taxpayer's signature is defined pursuant to section 270C.304, except that a "law administered by the commissioner" includes the property tax laws. The Minnesota Pollution Control Agency shall upon request of the commissioner furnish information and advice to the commissioner.

The information and advice furnished by the Minnesota Pollution Control Agency must include statements as to whether the equipment, device, or real property meets a standard, rule, criteria, guideline, policy, or order of the Minnesota Pollution Control Agency, and whether the equipment, device, or real property is installed or operated in accordance with it. On determining that property qualifies for exemption, the commissioner shall issue an order exempting the property from taxation. The commissioner shall develop an electronic means to notify interested parties when the commissioner has issued an order exempting property from taxation under this subdivision. The equipment, device, or real property shall continue to be exempt from taxation as long as the order issued by the commissioner remains in effect.

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3836

Sec. 14. Minnesota Statutes 2014, section 272.0211, subdivision 1, is amended to read:

Subdivision 1. Efficiency determination and certification. An owner or operator of a new or existing electric power generation facility, excluding wind energy conversion systems, may apply to the commissioner of revenue for a market value exclusion on the property as provided for in this section. This exclusion shall apply only to the market value of the equipment of the facility, and shall not apply to the structures and the land upon which the facility is located. The commissioner of revenue shall prescribe the ~~forms~~ content, format, manner, and procedures for this application pursuant to section 270C.30, except that a "law administered by the commissioner" includes the property tax laws. If an application is made by electronic means, the taxpayer's signature is defined pursuant to section 270C.304, except that a "law administered by the commissioner" includes the property tax laws. Upon receiving the application, the commissioner of revenue shall: (1) request the commissioner of commerce to make a determination of the efficiency of the applicant's electric power generation facility; and (2) shall develop an electronic means to notify interested parties when electric power generation facilities have filed an application. The commissioner of commerce shall calculate efficiency as the ratio of useful energy outputs to energy inputs, expressed as a percentage, based on the performance of the facility's equipment during normal full load operation. The commissioner must include in this formula the energy used in any on-site preparation of materials necessary to convert the materials into the fuel used to generate electricity, such as a process to gasify petroleum coke. The commissioner shall use the Higher Heating Value (HHV) for all substances in the commissioner's efficiency calculations, except for wood for fuel in a biomass-eligible project under section 216B.2424; for these instances, the commissioner shall adjust the heating value to allow for energy consumed for evaporation of the moisture in the wood. The applicant shall provide the commissioner of commerce with whatever information the commissioner deems necessary to make the determination. Within 30 days of the receipt of the necessary information, the commissioner of commerce shall certify the findings of the efficiency determination to the commissioner of revenue and to the applicant. The commissioner of commerce shall determine the efficiency of the facility and certify the findings of that determination to the commissioner of revenue every two years thereafter from the date of the original certification.

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

Sec. 15. Minnesota Statutes 2014, section 272.025, subdivision 1, is amended to read:

Subdivision 1. Statement of exemption. (a) Except in the case of property owned by the state of Minnesota or any political subdivision thereof, and property exempt from taxation under section 272.02, subdivisions 9, 10, 13, 15, 18, 20, and 22 to 25, and at the times provided in subdivision 3, a taxpayer claiming an exemption from taxation on property described in section 272.02, subdivisions 2 to 33, must file a statement of exemption with the assessor of the assessment district in which the property is located.

(b) A taxpayer claiming an exemption from taxation on property described in section 272.02, subdivision 10, must file a statement of exemption with the commissioner of revenue, on or before February 15 of each year for which the taxpayer claims an exemption.

(c) In case of sickness, absence or other disability or for good cause, the assessor or the commissioner may extend the time for filing the statement of exemption for a period not to exceed 60 days.

(d) The commissioner of revenue shall prescribe the ~~form and contents~~ content, format, and manner of the statement of exemption pursuant to section 270C.30, except that a "law administered by the commissioner" includes the property tax laws.

(e) If a statement is made by electronic means, the taxpayer's signature is defined pursuant to section 270C.304, except that a "law administered by the commissioner" includes the property tax laws.

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3837

Sec. 16. Minnesota Statutes 2014, section 272.029, subdivision 4, is amended to read:

Subd. 4. Reports. (a) An owner of a wind energy conversion system subject to tax under subdivision 3 shall file a report with the commissioner of revenue annually on or before February 1 detailing the amount of electricity in kilowatt-hours that was produced by the wind energy conversion system for the previous calendar year. The commissioner shall prescribe the ~~form~~ content, format, and manner of the report pursuant to section 270C.30, except that a "law administered by the commissioner" includes the property tax laws. The report must contain the information required by the commissioner to determine the tax due to each county under this section for the current year. If an owner of a wind energy conversion system subject to taxation under this section fails to file the report by the due date, the commissioner of revenue shall determine the tax based upon the nameplate capacity of the system multiplied by a capacity factor of 60 percent.

(b) If a report is made by electronic means, the taxpayer's signature is defined pursuant to section 270C.304, except that a "law administered by the commissioner" includes the property tax laws.

~~(b)~~ (c) On or before February 28, the commissioner of revenue shall notify the owner of the wind energy conversion systems of the tax due to each county for the current year and shall certify to the county auditor of each county in which the systems are located the tax due from each owner for the current year.

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

Sec. 17. Minnesota Statutes 2014, section 272.0295, subdivision 4, is amended to read:

Subd. 4. Reports. An owner of a solar energy generating system subject to tax under this section shall file a report with the commissioner of revenue annually on or before January 15 detailing the amount of electricity in megawatt-hours that was produced by the system in the previous calendar year. The commissioner shall prescribe the ~~form~~ content, format, and manner of the report pursuant to section 270C.30. The report must contain the information required by the commissioner to determine the tax due to each county under this section for the current year. If an owner of a solar energy generating system subject to taxation under this section fails to file the report by the due date, the commissioner of revenue shall determine the tax based upon the nameplate capacity of the system multiplied by a capacity factor of 30 percent.

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

Sec. 18. Minnesota Statutes 2014, section 272.115, subdivision 2, is amended to read:

Subd. 2. Form; information required. The certificate of value shall require such facts and information as may be determined by the commissioner to be reasonably necessary in the administration of the state education aid formulas. The ~~form~~ commissioner shall prescribe the content, format, and manner of the certificate of value ~~shall be prescribed by the Department of Revenue which shall provide an adequate supply of forms to each county auditor~~ pursuant to section 270C.30, except that a "law administered by the commissioner" includes the property tax laws.

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

Sec. 19. Minnesota Statutes 2014, section 273.124, subdivision 13, is amended to read:

Subd. 13. Homestead application. (a) A person who meets the homestead requirements under subdivision 1 must file a homestead application with the county assessor to initially obtain homestead classification.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3838

(b) ~~The format and contents of a uniform homestead application shall be prescribed by the commissioner of revenue.~~ The commissioner shall prescribe the content, format, and manner of the homestead application required to be filed under this chapter pursuant to section 270C.30. The application must clearly inform the taxpayer that this application must be signed by all owners who occupy the property or by the qualifying relative and returned to the county assessor in order for the property to receive homestead treatment.

(c) Every property owner applying for homestead classification must furnish to the county assessor the Social Security number of each occupant who is listed as an owner of the property on the deed of record, the name and address of each owner who does not occupy the property, and the name and Social Security number of each owner's spouse who occupies the property. The application must be signed by each owner who occupies the property and by each owner's spouse who occupies the property, or, in the case of property that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.

If a property owner occupies a homestead, the property owner's spouse may not claim another property as a homestead unless the property owner and the property owner's spouse file with the assessor an affidavit or other proof required by the assessor stating that the property qualifies as a homestead under subdivision 1, paragraph (e).

Owners or spouses occupying residences owned by their spouses and previously occupied with the other spouse, either of whom fail to include the other spouse's name and Social Security number on the homestead application or provide the affidavits or other proof requested, will be deemed to have elected to receive only partial homestead treatment of their residence. The remainder of the residence will be classified as nonhomestead residential. When an owner or spouse's name and Social Security number appear on homestead applications for two separate residences and only one application is signed, the owner or spouse will be deemed to have elected to homestead the residence for which the application was signed.

(d) If residential real estate is occupied and used for purposes of a homestead by a relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in order for the property to receive homestead status, a homestead application must be filed with the assessor. The Social Security number of each relative and spouse of a relative occupying the property shall be required on the homestead application filed under this subdivision. If a different relative of the owner subsequently occupies the property, the owner of the property must notify the assessor within 30 days of the change in occupancy. The Social Security number of a relative or relative's spouse occupying the property is private data on individuals as defined by section 13.02, subdivision 12, but may be disclosed to the commissioner of revenue, or, for the purposes of proceeding under the Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.

(e) The homestead application shall also notify the property owners that if the property is granted homestead status for any assessment year, that same property shall remain classified as homestead until the property is sold or transferred to another person, or the owners, the spouse of the owner, or the relatives no longer use the property as their homestead. Upon the sale or transfer of the homestead property, a certificate of value must be timely filed with the county auditor as provided under section 272.115. Failure to notify the assessor within 30 days that the property has been sold, transferred, or that the owner, the spouse of the owner, or the relative is no longer occupying the property as a homestead, shall result in the penalty provided under this subdivision and the property will lose its current homestead status.

(f) If a homestead application has not been filed with the county by December 15, the assessor shall classify the property as nonhomestead for the current assessment year for taxes payable in the following year, provided that the owner may be entitled to receive the homestead classification by proper application under section 375.192.

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3839

Sec. 20. Minnesota Statutes 2014, section 273.371, subdivision 1, is amended to read:

Subdivision 1. Report required. Every electric light, power, gas, water, express, stage, and transportation company and pipeline doing business in Minnesota shall annually file with the commissioner on or before March 31 a report under oath setting forth the information prescribed by the commissioner to enable the commissioner to make valuations, recommended valuations, and equalization required under sections 273.33, 273.35, 273.36, 273.37, and 273.3711. The commissioner shall prescribe the content, format, and manner of the report pursuant to section 270C.30, except that a "law administered by the commissioner" includes the property tax laws. If all the required information is not available on March 31, the company or pipeline shall file the information that is available on or before March 31, and the balance of the information as soon as it becomes available. If a report is made by electronic means, the taxpayer's signature is defined pursuant to section 270C.304, except that a "law administered by the commissioner" includes the property tax laws.

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

Sec. 21. Minnesota Statutes 2014, section 287.2205, is amended to read:

287.2205 TAX-FORFEITED LAND.

Before a state deed for tax-forfeited land may be issued, the deed tax must be paid by the purchaser of tax‑forfeited land whether the purchase is the result of a public auction or private sale or a repurchase of tax‑forfeited land. State agencies and local units of government that acquire tax-forfeited land by purchase or any other means are subject to this section. The deed tax is $1.65 for a conveyance of tax-forfeited lands to a governmental subdivision for an authorized public use under section 282.01, subdivision 1a, for a school forest under section 282.01, subdivision 1a, or for redevelopment purposes under section 282.01, subdivision 1b.

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

Sec. 22. Minnesota Statutes 2014, section 289A.08, is amended by adding a subdivision to read:

Subd. 17. Format. The commissioner shall prescribe the content, format, and manner of the returns and other documents pursuant to section 270C.30. This does not authorize the commissioner to require individual income taxpayers to file individual income tax returns electronically.

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

Sec. 23. Minnesota Statutes 2014, section 289A.09, subdivision 1, is amended to read:

Subdivision 1. Returns. (a) An employer who is required to deduct and withhold tax under section 290.92, subdivision 2a or 3, and a person required to deduct and withhold tax under section 290.923, subdivision 2, must file a return with the commissioner for each quarterly period unless otherwise prescribed by the commissioner.

(b) A person or corporation required to make deposits under section 290.9201, subdivision 8, must file an entertainer withholding tax return with the commissioner.

(d) A partnership required to deduct and withhold tax under section 290.92, subdivision 4b, must file a return.

(e) An S corporation required to deduct and withhold tax under section 290.92, subdivision 4c, must also file a return.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3840

(f) ~~Returns must be filed in the form and manner, and contain the information prescribed by the commissioner~~ The commissioner shall prescribe the content, format, and manner of the returns pursuant to section 270C.30. Every return for taxes withheld must be signed by the employer, entertainment entity, contract payor, partnership, or S corporation, or a designee.

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

Sec. 24. Minnesota Statutes 2014, section 289A.11, subdivision 1, is amended to read:

Subdivision 1. Return required. (a) Except as provided in section 289A.18, subdivision 4, for the month in which taxes imposed by chapter 297A are payable, or for which a return is due, a return for the preceding reporting period must be filed with the commissioner ~~in the form and manner the commissioner prescribes~~. The commissioner shall prescribe the content, format, and manner of the returns pursuant to section 270C.30. A person making sales at retail at two or more places of business may file a consolidated return subject to rules prescribed by the commissioner. In computing the dollar amount of items on the return, the amounts are rounded off to the nearest whole dollar, disregarding amounts less than 50 cents and increasing amounts of 50 cents to 99 cents to the next highest dollar.

(b) Notwithstanding this subdivision, a person who is not required to hold a sales tax permit under chapter 297A and who makes annual purchases, for use in a trade or business, of less than $18,500, or a person who is not required to hold a sales tax permit and who makes purchases for personal use, that are subject to the use tax imposed by section 297A.63, may file an annual use tax return ~~on a form prescribed by the commissioner~~. The commissioner shall prescribe the content, format, and manner of the return pursuant to section 270C.30. If a person who qualifies for an annual use tax reporting period is required to obtain a sales tax permit or makes use tax purchases, for use in a trade or business, in excess of $18,500 during the calendar year, the reporting period must be considered ended at the end of the month in which the permit is applied for or the purchase in excess of $18,500 is made and a return must be filed for the preceding reporting period.

(c) Notwithstanding ~~paragraph~~ paragraphs (a) and (b), a person prohibited by the person's religious beliefs from using electronics shall be allowed to file by mail, without any additional fees. The filer must notify the commissioner of revenue of the intent to file by mail on a form prescribed by the commissioner. A return filed under this paragraph must be postmarked no later than the day the return is due in order to be considered filed on a timely basis.

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

Sec. 25. Minnesota Statutes 2014, section 289A.50, subdivision 7, is amended to read:

Subd. 7. Remedies. (a) If the taxpayer is notified by the commissioner that the refund claim is denied in whole or in part, the taxpayer may:

(1) file an administrative appeal as provided in section 270C.35, or an appeal with the Tax Court, within 60 days after ~~issuance~~ the notice date of the commissioner's notice of denial; or

(2) file an action in the district court to recover the refund.

(b) An action in the district court on a denied claim for refund must be brought within 18 months of the notice date of the denial of the claim by the commissioner. For the purposes of this section, "notice date" is defined in section 270C.35, subdivision 3.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3841

(c) No action in the district court or the Tax Court shall be brought within six months of the filing of the refund claim unless the commissioner denies the claim within that period.

(d) If a taxpayer files a claim for refund and the commissioner has not issued a denial of the claim, the taxpayer may bring an action in the district court or the Tax Court at any time after the expiration of six months from the time the claim was filed.

(e) The commissioner and the taxpayer may agree to extend the period for bringing an action in the district court.

(f) An action for refund of tax by the taxpayer must be brought in the district court of the district in which lies the county of the taxpayer's residence or principal place of business. In the case of an estate or trust, the action must be brought at the principal place of its administration. Any action may be brought in the district court for Ramsey County.

EFFECTIVE DATE. This section is effective for claims for refund denied after September 30, 2015.

Sec. 26. [290B.11] FORMS.

The commissioner shall prescribe the content, format, and manner of all forms and other documents required to be filed under this chapter pursuant to section 270C.30.

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

Sec. 27. Minnesota Statutes 2014, section 290C.13, subdivision 3, is amended to read:

Subd. 3. Notice date. For purposes of this section, the term "notice date" means the notice date designated by the commissioner on the order or notice of the determination removing enrolled land or the notice date of designated by the commissioner on the notice denying an application to enroll land or denying part or all of an incentive payment.

EFFECTIVE DATE. This section is effective for orders and notices dated after September 30, 2015.

Sec. 28. [293.15] FORMS.

The commissioner shall prescribe the content, format, and manner of all forms and other documents required to be filed under this chapter pursuant to section 270C.30.

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

Sec. 29. Minnesota Statutes 2014, section 295.55, subdivision 6, is amended to read:

Subd. 6. Form of returns. ~~The estimated payments and annual return must contain the information and be in the form prescribed by the commissioner.~~ The commissioner shall prescribe the content, format, and manner of the estimated payment forms and annual return pursuant to section 270C.30.

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

Sec. 30. Minnesota Statutes 2014, section 296A.02, is amended by adding a subdivision to read:

Subd. 5. Forms. The commissioner shall prescribe the content, format, and manner of all forms and other documents required to be filed under this chapter pursuant to section 270C.30.

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3842

Sec. 31. Minnesota Statutes 2014, section 296A.22, subdivision 9, is amended to read:

Subd. 9. Abatement of penalty. (a) The commissioner may by written order abate any penalty imposed under this section, if in the commissioner's opinion there is reasonable cause to do so.

(b) A request for abatement of penalty must be filed with the commissioner within 60 days of the notice date of the ~~notice stating that a~~ penalty ~~has been imposed was mailed to the taxpayer's last known address~~. For purposes of this section, the term "notice date" means the notice date designated by the commissioner on the order or other notice that a penalty has been imposed.

(c) If the commissioner issues an order denying a request for abatement of penalty, the taxpayer may file an administrative appeal as provided in section 270C.35 or appeal to Tax Court as provided in section 271.06. If the commissioner does not issue an order on the abatement request within 60 days from the date the request is received, the taxpayer may appeal to Tax Court as provided in section 271.06.

EFFECTIVE DATE. This section is effective for orders and notices dated after September 30, 2015.

Sec. 32. Minnesota Statutes 2014, section 296A.26, is amended to read:

296A.26 JUDICIAL REVIEW; APPEAL TO TAX COURT.

In lieu of an administrative appeal under section 270C.35, any person aggrieved by an order of the commissioner fixing a tax, penalty, or interest under this chapter may, within 60 days from the notice date of ~~the notice of~~ the order, appeal to the Tax Court in the manner provided under section 271.06. For purposes of this section, the term "notice date" means the notice date designated by the commissioner on the order fixing a tax, penalty, or interest.

EFFECTIVE DATE. This section is effective for orders dated after September 30, 2015.

Sec. 33. Minnesota Statutes 2014, section 297D.02, is amended to read:

297D.02 ADMINISTRATION.

The commissioner of revenue shall administer this chapter. The commissioner shall prescribe the content, format, and manner of all forms and other documents required to be filed under this chapter pursuant to section 270C.30. Payments required by this chapter must be made to the commissioner on the form provided by the commissioner. Tax obligors are not required to give their name, address, Social Security number, or other identifying information on the form. The commissioner shall collect all taxes under this chapter.

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

Sec. 34. Minnesota Statutes 2014, section 297E.02, subdivision 3, is amended to read:

Subd. 3. Collection; disposition. (a) Taxes imposed by this section are due and payable to the commissioner when the gambling tax return is required to be filed. Distributors must file their monthly sales figures with the commissioner on a form prescribed by the commissioner. Returns covering the taxes imposed under this section must be filed with the commissioner on or before the 20th day of the month following the close of the previous calendar month. ~~The commissioner may require that the returns be filed via magnetic media or electronic data transfer.~~ The commissioner shall prescribe the content, format, and manner of returns or other documents pursuant to section 270C.30. The proceeds, along with the revenue received from all license fees and other fees under sections 349.11 to 349.191, 349.211, and 349.213, must be paid to the commissioner of management and budget for deposit in the general fund.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3843

(b) The sales tax imposed by chapter 297A on the sale of pull-tabs and tipboards by the distributor is imposed on the retail sales price. The retail sale of pull-tabs or tipboards by the organization is exempt from taxes imposed by chapter 297A and is exempt from all local taxes and license fees except a fee authorized under section 349.16, subdivision 8.

(c) One-half of one percent of the revenue deposited in the general fund under paragraph (a), is appropriated to the commissioner of human services for the compulsive gambling treatment program established under section 245.98. One-half of one percent of the revenue deposited in the general fund under paragraph (a), is appropriated to the commissioner of human services for a grant to the state affiliate recognized by the National Council on Problem Gambling to increase public awareness of problem gambling, education and training for individuals and organizations providing effective treatment services to problem gamblers and their families, and research relating to problem gambling. Money appropriated by this paragraph must supplement and must not replace existing state funding for these programs.

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

Sec. 35. Minnesota Statutes 2014, section 297E.04, subdivision 1, is amended to read:

Subdivision 1. Reports of sales. A manufacturer who sells gambling product for use or resale in this state, or for receipt by a person or entity in this state, shall file with the commissioner, on a form prescribed by the commissioner, a report of gambling product sold to any person in the state, including the established governing body of an Indian tribe recognized by the United States Department of the Interior. The report must be filed monthly on or before the 20th day of the month succeeding the month in which the sale was made. ~~The commissioner may require that the report be submitted via magnetic media or electronic data transfer.~~ The commissioner shall prescribe the content, format, and manner of returns or other documents pursuant to section 270C.30. The commissioner may inspect the premises, books, records, and inventory of a manufacturer without notice during the normal business hours of the manufacturer. A person violating this section is guilty of a misdemeanor.

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

Sec. 36. Minnesota Statutes 2014, section 297E.05, subdivision 4, is amended to read:

Subd. 4. Reports. A distributor shall report monthly to the commissioner, on a form the commissioner prescribes, its sales of each type of gambling product. This report must be filed monthly on or before the 20th day of the month succeeding the month in which the sale was made. ~~The commissioner may require that a distributor submit the monthly report and invoices required in this subdivision via magnetic media or electronic data transfer.~~ The commissioner shall prescribe the content, format, and manner of returns or other documents pursuant to section 270C.30.

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

Sec. 37. Minnesota Statutes 2014, section 297E.06, subdivision 1, is amended to read:

Subdivision 1. Reports. An organization must file with the commissioner, on a form prescribed by the commissioner, a report showing all gambling activity conducted by that organization for each month. Gambling activity includes all gross receipts, prizes, all gambling taxes owed or paid to the commissioner, all gambling expenses, and all lawful purpose and board-approved expenditures. The report must be filed with the commissioner on or before the 20th day of the month following the month in which the gambling activity takes place. ~~The commissioner may require that the reports be filed via magnetic media or electronic data transfer.~~ The commissioner shall prescribe the content, format, and manner of returns or other documents pursuant to section 270C.30.

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3844

Sec. 38. Minnesota Statutes 2014, section 297F.09, subdivision 1, is amended to read:

Subdivision 1. Monthly return; cigarette distributor. On or before the 18th day of each calendar month, a distributor with a place of business in this state shall file a return with the commissioner showing the quantity of cigarettes manufactured or brought in from outside the state or purchased during the preceding calendar month and the quantity of cigarettes sold or otherwise disposed of in this state and outside this state during that month. A licensed distributor outside this state shall in like manner file a return showing the quantity of cigarettes shipped or transported into this state during the preceding calendar month. ~~Returns must be made in the form and manner prescribed by~~ The commissioner shall prescribe the content, format, and manner of returns pursuant to section 270C.30, and the returns must contain any other information required by the commissioner. The return must be accompanied by a remittance for the full unpaid tax liability shown by it. For distributors subject to the accelerated tax payment requirements in subdivision 10, the return for the May liability is due two business days before June 30th of the year and the return for the June liability is due on or before August 18th of the year.

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

Sec. 39. Minnesota Statutes 2014, section 297F.23, is amended to read:

297F.23 JUDICIAL REVIEW.

In lieu of an administrative appeal under section 270C.35, a person aggrieved by an order of the commissioner fixing a tax, penalty, or interest under this chapter may, within 60 days from the notice date of ~~the notice of~~ the order, appeal to the Tax Court in the manner provided under section 271.06. For purposes of this section, the term "notice date" means the notice date designated by the commissioner on the order fixing a tax, penalty, or interest.

EFFECTIVE DATE. This section is effective for orders dated after September 30, 2015.

Sec. 40. Minnesota Statutes 2014, section 297G.09, subdivision 1, is amended to read:

Subdivision 1. Monthly returns; manufacturers, wholesalers, brewers, or importers. On or before the 18th day of each calendar month following the month in which a licensed manufacturer or wholesaler first sells wine and distilled spirits within the state, or a brewer or importer first sells or imports fermented malt beverages, or a wholesaler knowingly acquires title to or possession of untaxed fermented malt beverages, the licensed manufacturer, wholesaler, brewer, or importer liable for the excise tax must file a return with the commissioner, and in addition must keep records and render reports as required by the commissioner. ~~Returns must be made in a form and manner prescribed by the commissioner, and~~ The commissioner shall prescribe the content, format, and manner of returns pursuant to section 270C.30. The returns must contain any other information required by the commissioner. Returns must be accompanied by a remittance for the full unpaid tax liability. Returns must be filed regardless of whether a tax is due.

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

Sec. 41. Minnesota Statutes 2014, section 297G.22, is amended to read:

297G.22 JUDICIAL REVIEW.

In lieu of an administrative appeal under this chapter, a person aggrieved by an order of the commissioner fixing a tax, penalty, or interest under this chapter may, within 60 days from ~~the date of~~ the notice date of the order, appeal to the Tax Court in the manner provided under section 271.06. For purposes of this section, the term "notice date" means the notice date designated by the commissioner on the order fixing a tax, penalty, or interest.

EFFECTIVE DATE. This section is effective for orders dated after September 30, 2015.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3845

Sec. 42. Minnesota Statutes 2014, section 297I.30, is amended by adding a subdivision to read:

Subd. 11. Format. The commissioner shall prescribe the content, format, and manner of returns or other documents pursuant to section 270C.30.

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

Sec. 43. Minnesota Statutes 2014, section 297I.60, subdivision 2, is amended to read:

Subd. 2. Remedies. (a) If the taxpayer is notified that the refund claim is denied in whole or in part, the taxpayer may contest the denial by:

(1) filing an administrative appeal with the commissioner under section 270C.35;

(2) filing an appeal in Tax Court within 60 days of the notice date of the ~~notice of~~ denial; or

(3) filing an action in the district court to recover the refund.

(b) An action in the district court must be brought within 18 months ~~following~~ of the notice date of the ~~notice of~~ denial. For purposes of this section, "notice date" is defined in section 270C.35, subdivision 3. An action for refund of tax or surcharge must be brought in the district court of the district in which lies the taxpayer's principal place of business or in the District Court for Ramsey County. If a taxpayer files a claim for refund and the commissioner has not issued a denial of the claim, the taxpayer may bring an action in the district court or the Tax Court at any time after the expiration of six months from the time the claim was filed.

EFFECTIVE DATE. This section is effective for claims for refund denied after September 30, 2015.

Sec. 44. Minnesota Statutes 2014, section 469.319, subdivision 5, is amended to read:

Subd. 5. Waiver authority. (a) The commissioner may waive all or part of a repayment required under subdivision 1, if the commissioner, in consultation with the commissioner of employment and economic development and appropriate officials from the local government units in which the qualified business is located, determines that requiring repayment of the tax is not in the best interest of the state or the local government units and the business ceased operating as a result of circumstances beyond its control including, but not limited to:

(1) a natural disaster;

(2) unforeseen industry trends; or

(3) loss of a major supplier or customer.

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

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3846

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

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

(c) Requests for waiver must be made no later than 60 days after the earlier of the notice date of an order issued under subdivision 4, paragraph (d), or the date of a tax statement issued under subdivision 4, paragraph (c). For purposes of this section, the term "notice date" means the notice date designated by the commissioner on the order.

EFFECTIVE DATE. This section is effective for orders of the commissioner of revenue dated after
September 30, 2015."

Renumber the sections in sequence

Correct the title numbers accordingly

With the recommendation that when so amended the bill be placed on the General Register.

The report was adopted.

Scott from the Committee on Civil Law and Data Practices to which was referred:

H. F. No. 1947, A bill for an act relating to telecommunications; permitting payment in cash for used wireless communications devices in certain circumstances; amending Minnesota Statutes 2014, section 325E.319, subdivision 4.

Reported the same back with the following amendments:

Page 1, delete section 1 and insert:

"Section 1. Minnesota Statutes 2014, section 325E.319, subdivision 4, is amended to read:

Subd. 4. Payment for used wireless communications devices. (a) A wireless communications device dealer shall pay for purchases of all used wireless communications devices by check mailed to a specific address or by electronic transfer.

(b) The purchase price may be paid in cash at a kiosk if (1) the transaction is reported to the law enforcement authority with jurisdiction where the purchase was made, (2) a thumbprint is obtained from the seller in the transaction, and (3) the seller is provided a disclosure that the seller's transactional information is shared with law enforcement.

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

With the recommendation that when so amended the bill be re-referred to the Committee on Rules and Legislative Administration.

The report was adopted.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3847

SECOND READING OF HOUSE BILLS

H. F. No. 1590 was read for the second time.

SECOND READING OF SENATE BILLS

S. F. No. 1647 was read for the second time.

INTRODUCTION AND FIRST READING OF HOUSE BILLS

The following House Files were introduced:

Albright introduced:

H. F. No. 2275, A bill for an act relating to disaster assistance; authorizing spending to acquire and better public land and buildings and other improvements of a capital nature with certain conditions; authorizing the sale and issuance of state bonds.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources Policy and Finance.

Kahn introduced:

H. F. No. 2276, A bill for an act relating to taxation; allowing a credit for historic structure rehabilitation.

The bill was read for the first time and referred to the Committee on Taxes.

Kahn introduced:

H. F. No. 2277, A bill for an act relating to capital investment; appropriating money to replace the pedestrian bike bridge over Interstate Highway 94 connecting Cedar-Riverside and Seward neighborhoods in Minneapolis; authorizing the issuance of state bonds.

The bill was read for the first time and referred to the Committee on Transportation Policy and Finance.

Kahn introduced:

H. F. No. 2278, A bill for an act relating to capital improvements; appropriating money for renovation and expansion of the Brian Coyle Center; modifying an appropriation for the Brian Coyle Center; authorizing the sale and issuance of state bonds; amending Laws 2014, chapter 294, article 1, section 21, subdivision 12.

The bill was read for the first time and referred to the Committee on Environment and Natural Resources Policy and Finance.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3848

Hancock introduced:

H. F. No. 2279, A bill for an act relating to capital investment; appropriating money for capital improvements on the Red Lake Indian Reservation.

The bill was read for the first time and referred to the Committee on Job Growth and Energy Affordability Policy and Finance.

MESSAGES FROM THE SENATE

The following messages were received from the Senate:

Mr. Speaker:

I hereby announce the passage by the Senate of the following House File, herewith returned, as amended by the Senate, in which amendments the concurrence of the House is respectfully requested:

H. F. No. 4, A bill for an act relating to transportation; establishing a budget for transportation; appropriating money for transportation, including Department of Transportation, Metropolitan Council, and Department of Public Safety activities; amending various provisions governing transportation policy and finance; establishing funds and accounts; requiring reports; authorizing sale and issuance of trunk highway bonds; amending Minnesota Statutes 2014, sections 16A.11, subdivision 3a; 16A.86, subdivision 2; 16A.88, subdivisions 1a, 2; 16E.15, subdivision 2; 117.036, subdivisions 2, 4; 160.20, subdivision 4; 160.27, by adding a subdivision; 161.04, by adding a subdivision; 161.231; 161.321, subdivisions 2a, 2c, 4; 162.07, subdivision 1a; 168.053, subdivision 1; 168.1299, subdivision 1; 169.475, subdivision 2; 169.49; 169.782, subdivisions 1, 2, 4; 169.79, subdivision 4; 169.81, by adding a subdivision; 169.865, subdivisions 1, 2, by adding a subdivision; 169.87, subdivision 6; 173.02, by adding a subdivision; 173.15; 174.40, by adding a subdivision; 174.636, by adding a subdivision; 174.92; 174.93, subdivision 1; 221.031, by adding a subdivision; 221.605, by adding a subdivision; 299A.465, subdivision 5, by adding a subdivision; 299D.085, subdivision 2; 299D.09; 360.305, subdivision 4; 398A.04, by adding a subdivision; 473.146, subdivision 4; 473.399, by adding a subdivision; 473.4051, subdivision 2; Laws 2009, chapter 158, section 10, as amended; Laws 2014, chapter 312, article 11, section 3; proposing coding for new law in Minnesota Statutes, chapters 16A; 160; 161; 162; 168; 174; 299F; repealing Minnesota Statutes 2014, section 299E.02.

JoAnne M. Zoff, Secretary of the Senate

Petersburg moved that the House refuse to concur in the Senate amendments to H. F. No. 4, that the Speaker appoint a Conference Committee of 5 members of the House, and that the House requests that a like committee be appointed by the Senate to confer on the disagreeing votes of the two houses. The motion prevailed.

Mr. Speaker:

I hereby announce the passage by the Senate of the following Senate Files, herewith transmitted:

S. F. Nos. 417, 694, 986, 1120, 1137, 1215, 1219, 1265, 1499 and 1816.

JoAnne M. Zoff, Secretary of the Senate

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3849

FIRST READING OF SENATE BILLS

S. F. No. 417, A bill for an act relating to professional engineers; clarifying licensing requirements; amending Minnesota Statutes 2014, section 326.02, subdivision 3.

The bill was read for the first time.

O'Neill moved that S. F. No. 417 and H. F. No. 288, now on the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 694, A bill for an act relating to local government; modifying provisions governing the Saint Paul Port Authority; amending Minnesota Statutes 2014, sections 469.049; 469.050, subdivision 4; 469.084, subdivisions 3, 4, 8, 9, 10, 14; repealing Minnesota Statutes 2014, section 469.084, subdivisions 11, 12.

The bill was read for the first time and referred to the Committee on Job Growth and Energy Affordability Policy and Finance.

S. F. No. 986, A bill for an act relating to public safety; revising the definition of reckless driving and enhancing penalties for reckless driving resulting in death or great bodily harm; amending Minnesota Statutes 2014, section 169.13, subdivisions 1, 3.

The bill was read for the first time.

Garofalo moved that S. F. No. 986 and H. F. No. 1085, now on the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 1120, A bill for an act relating to public safety; expanding fourth-degree assault protections to employees supervising and working directly with mentally ill and dangerous patients; amending Minnesota Statutes 2014, section 609.2231, subdivision 3a.

The bill was read for the first time.

Cornish moved that S. F. No. 1120 and H. F. No. 783, now on the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 1137, A bill for an act relating to public safety; expanding criminal sexual conduct offenses for persons in current or recent positions of authority over juveniles; amending Minnesota Statutes 2014, sections 609.341, subdivision 10; 609.342, subdivision 1; 609.343, subdivision 1; 609.344, subdivision 1; 609.345, subdivision 1.

The bill was read for the first time.

Winkler moved that S. F. No. 1137 and H. F. No. 1234, now on the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3850

S. F. No. 1215, A bill for an act relating to health; prohibiting the use of certain flame-retardant chemicals in certain products; proposing coding for new law in Minnesota Statutes, chapter 325F.

The bill was read for the first time and referred to the Committee on Commerce and Regulatory Reform.

S. F. No. 1219, A bill for an act relating to health; modifying the schedules of controlled substances; amending Minnesota Statutes 2014, section 152.02, subdivisions 2, 3, 4, 5, 6.

The bill was read for the first time.

Barrett moved that S. F. No. 1219 and H. F. No. 1376, now on the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 1265, A bill for an act relating to insurance; permitting individuals to contract with an insurance producer to advocate on the individual's behalf with respect to health coverage with an insurance company; regulating payment of commissions by issuers of qualified health plans; amending Minnesota Statutes 2014, sections 60K.31, by adding subdivisions; 60K.48, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 62V.

The bill was read for the first time.

Davids moved that S. F. No. 1265 and H. F. No. 1268, now on the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 1499, A bill for an act relating to local government; extending the time period to file certificate of approval of a special law for the Cedar Lake area water and sanitary sewer district.

The bill was read for the first time.

Vogel moved that S. F. No. 1499 and H. F. No. 1541, now on the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.

S. F. No. 1816, A bill for an act relating to property; regulating property transfers; enacting amendments to the Uniform Fraudulent Transfer Act recommended by the National Conference of Commissioners on Uniform State Laws for enactment by the states; amending Minnesota Statutes 2014, sections 513.41; 513.42; 513.43; 513.44; 513.45; 513.46; 513.47; 513.48; 513.51; proposing coding for new law in Minnesota Statutes, chapter 513.

The bill was read for the first time.

Smith moved that S. F. No. 1816 and H. F. No. 1342, now on the General Register, be referred to the Chief Clerk for comparison. The motion prevailed.

Peppin moved that the House recess subject to the call of the Chair. The motion prevailed.

RECESS

RECONVENED

The House reconvened and was called to order by the Speaker.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3851

CALENDAR FOR THE DAY

Lesch was excused between the hours of 1:20 p.m. and 1:30 p.m.

S. F. No. 2101 was reported to the House.

Garofalo moved to amend S. F. No. 2101, the second engrossment, as follows:

Delete everything after the enacting clause and insert the following language of H. F. No. 105, the first engrossment:

"Section 1. Minnesota Statutes 2014, section 216B.16, subdivision 8, is amended to read:

Subd. 8. Advertising expense. (a) The commission shall disapprove the portion of any rate which makes an allowance directly or indirectly for expenses incurred by a public utility to provide a public advertisement which:

(1) is designed to influence or has the effect of influencing public attitudes toward legislation or proposed legislation, or toward a rule, proposed rule, authorization or proposed authorization of the Public Utilities Commission or other agency of government responsible for regulating a public utility;

(2) is designed to justify or otherwise support or defend a rate, proposed rate, practice or proposed practice of a public utility;

(3) is designed primarily to promote consumption of the services of the utility, except for the promotion of: (i) electric vehicles; (ii) electric water heaters that are electronically activated by a utility to operate when low-priced electricity generated from a renewable source is available; or (iii) ground or air source heat pumps that displace propane or fuel oil;

(4) is designed primarily to promote good will for the public utility or improve the utility's public image; or

(5) is designed to promote the use of nuclear power or to promote a nuclear waste storage facility.

(b) The commission may approve a rate which makes an allowance for expenses incurred by a public utility to disseminate information which:

(1) is designed to encourage conservation of energy supplies;

(2) is designed to promote safety; or

(3) is designed to inform and educate customers as to financial services made available to them by the public utility.

(c) The commission shall not withhold approval of a rate because it makes an allowance for expenses incurred by the utility to disseminate information about corporate affairs to its owners.

(d) For the purposes of this subdivision:

(1) "electric vehicle" has the meaning given in section 169.011, subdivision 26a; and

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3852

(2) "renewable source" has the meaning given to "eligible energy technology" in section 216B.1691, subdivision 1.

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

Delete the title and insert:

"A bill for an act relating to energy; modifying the treatment of certain utility advertising expenditures; amending Minnesota Statutes 2014, section 216B.16, subdivision 8."

The motion prevailed and the amendment was adopted.

S. F. No. 2101, A bill for an act relating to state government; appropriating money for agriculture, environment, natural resources, jobs, and economic development; providing for animal health and agricultural utilization research; making policy and technical changes to various agricultural related provisions, including provisions related to pesticide control, plant protection, nursery law, seeds, and loans; modifying license exclusions for the direct sale of certain prepared food; establishing the Agriculture Research, Education, Extension, and Technology Transfer Board; establishing the Industrial Hemp Development Act; providing for incentive payments and grants; modifying disposition of certain revenue; providing for pilot programs; establishing the farm opportunity loan program; modifying fee provisions; creating accounts; modifying recreational vehicle provisions; modifying aquatic invasive species provisions; modifying state park and trail provisions; modifying timber and land sale provisions; modifying provisions for reclamation of lands; modifying game and fish laws; modifying the Water Law; regulating water quality standards; regulating chemicals of high concern in children's products; modifying solid waste provisions; making policy changes to labor and industry, employment and economic development, Iron Range resources, and the Bureau of Mediation Services; requiring studies and reports; requiring rulemaking; amending Minnesota Statutes 2014, sections 13.43, subdivision 6; 13.643, subdivision 1; 13.7411, subdivision 8; 16C.144, by adding subdivisions; 18B.01, subdivisions 28, 29; 18B.32, subdivision 1; 18B.33, subdivision 1; 18B.34, subdivision 1; 18G.10, subdivisions 3, 4; 18H.02, subdivision 20, by adding subdivisions; 18H.06, subdivision 2; 18J.01; 18J.02; 18J.03; 18J.04, subdivisions 1, 2, 3, 4; 18J.05, subdivisions 1, 2, 6; 18J.06; 18J.07, subdivisions 3, 4, 5; 18J.09; 18J.11, subdivision 1, by adding a subdivision; 21.81, by adding subdivisions; 21.82, subdivisions 2, 4; 21.85, subdivision 2, by adding a subdivision; 21.89, subdivision 2; 41B.03, subdivision 6, by adding a subdivision; 41B.04, subdivision 17; 41B.043, subdivision 3; 41B.045, subdivisions 3, 4; 41B.046, subdivision 5; 41B.047, subdivisions 1, 4; 41B.048, subdivision 6; 41B.049, subdivision 4; 41B.055, subdivision 3; 41B.056, subdivision 2; 41B.06; 45.0135, by adding a subdivision; 60D.215, subdivision 2; 65B.44, by adding a subdivision; 72B.092, subdivision 1; 80A.84; 84.415, subdivision 7; 84.82, subdivisions 2a, 6; 84.92, subdivisions 8, 9, 10; 84.922, subdivision 5; 84D.01, by adding a subdivision; 84D.13, subdivision 5; 84D.15, subdivision 3; 85.015, by adding a subdivision; 85.055, subdivision 1; 85.32, subdivision 1; 86B.401, subdivision 3; 87A.10; 88.6435, subdivision 4; 90.14; 90.193; 93.20, subdivision 18; 94.16, subdivision 3; 97A.055, subdivision 4b; 97B.301, by adding a subdivision; 97C.301, by adding a subdivision; 103B.101, by adding a subdivision; 103B.3355; 103F.612, subdivision 2; 103G.005, by adding a subdivision; 103G.222, subdivisions 1, 3; 103G.2242, subdivisions 1, 2, 3, 4, 12, 14, 15; 103G.2251; 115A.1415, subdivision 16; 115A.557, subdivision 2; 115C.09, subdivision 1; 116.07, subdivision 4d; 116.9401; 116.9402; 116.9403; 116.9405; 116.9406; 116J.394; 116J.8738, subdivision 3, by adding a subdivision; 116L.05, subdivision 5; 116L.17, subdivision 4; 123B.53, subdivision 1; 179A.041, by adding subdivisions; 216B.1694, subdivision 3; 216B.62, subdivision 3b; 268.035, subdivisions 6, 21b, 26, 30; 268.051, subdivision 7; 268.07, subdivisions 2, 3b; 268.085, subdivisions 1, 2; 268.095, subdivisions 1, 10; 268.105, subdivisions 3, 7; 268.136, subdivision 1; 268.194, subdivision 1; 298.018, subdivision 1; 298.22, subdivisions 1, 3, 4, 5, 6, 10, 11; 298.221; 298.2211, subdivision 3; 298.222; 298.223; 298.225, subdivision 2; 298.227; 298.28, subdivisions 4, 9a, 9d, 11, 15; 298.292, subdivision 2; 298.293; 298.2961, subdivision 3; 299F.01, by adding a subdivision; 326B.092, subdivision 7; 326B.096; 326B.106, subdivision 1, by adding a subdivision; 326B.13, subdivision 8; 326B.986, subdivisions 5, 8; 332.31, subdivisions 3, 6; 341.321; 375.30, subdivision 2; Laws 1994,

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3853

chapter 493, section 1; Laws 2014, chapter 308, article 6, section 14, subdivision 5; Laws 2014, chapter 312, article 2, section 14; proposing coding for new law in Minnesota Statutes, chapters 13; 17; 28A; 41A; 41B; 65B; 80A; 84; 84D; 92; 103B; 103F; 116; 116J; 116L; 116U; 179; 268A; proposing coding for new law as Minnesota Statutes, chapter 18K; repealing Minnesota Statutes 2014, sections 17.115; 28A.15, subdivisions 9, 10; 41A.12, subdivision 4; 84.68; 86B.13, subdivisions 2, 4; 298.298; Laws 2010, chapter 215, article 3, section 3, subdivision 6, as amended.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 125 yeas and 0 nays as follows:

Those who voted in the affirmative were:

All members answered to the call and it was so ordered.

Atkins moved to amend H. F. No. 848, the second engrossment, as follows:

Page 232, after line 34, insert:

"Sec. 9. Minnesota Statutes 2014, section 270B.14, subdivision 17, is amended to read:

Subd. 17. Disclosure to Department of Commerce. The commissioner may disclose to the commissioner of commerce information required to administer the Uniform Disposition of Unclaimed Property Act in sections 345.31 to 345.60, including the Social Security numbers of the taxpayers whose refunds are on the report of abandoned property submitted by the commissioner to the commissioner of commerce under section 345.41. Except for data published under section 345.42, the information received that is private or nonpublic data retains its classification~~, and can be used by the commissioner of commerce only for the purpose of verifying that the persons~~

~~Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3855~~

~~claiming the refunds are the owners~~. The commissioner shall coordinate with the commissioner of commerce to provide by January 15 of each year the addresses of taxpayers whose names and Social Security numbers indicate they are owners of abandoned property under the Uniform Disposition of Unclaimed Property Act in sections 345.31 to 345.60."

Page 236, after line 36, insert:

"Sec. 15. Minnesota Statutes 2014, section 345.42, is amended by adding a subdivision to read:

Subd. 1a. Coordinate with Department of Revenue. The commissioner shall coordinate with the commissioner of revenue to receive by January 15 of each year the addresses of owners whose names and Social Security numbers indicate they are owners of abandoned property. The commissioner shall annually mail notice to the owners. The notice shall include a letter stating that the recipient may be the owner of abandoned property, information concerning the process of filing a claim, and a claim form."

Renumber the sections in sequence and correct the internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

CALL OF THE HOUSE LIFTED

Thissen moved that the call of the House be lifted. The motion prevailed and it was so ordered.

Urdahl was excused between the hours of 2:35 p.m. and 2:45 p.m.

Lenczewski moved to amend H. F. No. 848, the second engrossment, as amended, as follows:

Delete everything after the enacting clause and insert:

"ARTICLE 1

INCOME AND FRANCHISE TAXES

Section 1. [16A.728] LONG-TERM CARE SAVINGS PLAN.

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Long-term care expense" means the cost of long-term care in a long-term care facility and the cost of care provided in a person's home when the person receiving the care is unable to perform multiple basic life functions independently.

(c) "Long-term care insurance premiums" means premiums paid for a long-term care insurance policy, as defined in section 290.0672.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3856

(d) "Participant" means an individual who has entered into a participation agreement or established an account under the plan with a financial institution with which the commissioner has an agreement under subdivision 2, paragraph (a).

(e) "Qualified individual" means a person who:

(1) incurred long-term care expenses during the taxable year; or

(2) turned 50 years of age or older during the taxable year and who made payments for long-term care insurance premiums during the taxable year.

Subd. 2. Commissioner duties; participation agreement. (a) The Minnesota long-term care savings plan is created. The commissioner shall select the administrator of the plan. If the commissioner receives no acceptable responses to a request for proposals for an administrator for the plan by November 1, 2015, the commissioner may enter into agreements with state chartered or federally chartered banks, savings banks, savings associations, trust companies, or credit unions, or a subsidiary of such an entity, to receive contributions in the form of account deposits. The commissioner may adopt and promulgate rules and regulations to carry out the duties under this subdivision.

(b) If an administrator is selected, participants must enter into participation agreements with the commissioner, and if an administrator is not selected, participants may make contributions to an account with a financial institution with which the commissioner has an agreement under paragraph (a). A lifetime maximum of $200,000 may be contributed by a participant. The commissioner must adjust the dollar limitation annually for inflation as provided in section 151 of the Internal Revenue Code of 1986, as amended.

(c) Each participation agreement must provide that the agreement may be canceled or transferred to a spouse upon the terms and conditions set by the commissioner. If the participation agreement is canceled or the Minnesota long-term care savings plan is terminated, a participant may receive the principal amount of all contributions made by the participant or on behalf of the participant plus the actual investment earnings on the contributions, less any losses incurred on the contributions. A participant must not receive more than the fair market value of the account under the participation agreement on the applicable liquidation date.

(d) A participant retains ownership of all contributions up to the date of use.

(e) State income tax treatment of contributions and investment earnings is as provided in section 290.01, subdivisions 19a and 19b.

Subd. 3. Long-term care savings plan trust. If an administrator for the Minnesota long-term care savings plan is selected under subdivision 2, the Minnesota long-term care savings plan trust is created. The commissioner is the trustee of the trust and is responsible for the administration, operation, and maintenance of the plan and has all the powers necessary to carry out and effectuate the purposes, objectives, and provisions of the Minnesota long-term care savings plan for the administration, operation, and maintenance of the trust, except that the investment officer has fiduciary responsibility to make all decisions regarding the investment of the money in the trust, including the selection of all investment options and the approval of all fees and other costs charged to trust assets, except costs for administration, operation, and maintenance of the trust, under the directions, guidelines, and policies established by the State Board of Investment. The commissioner may adopt and promulgate rules for the efficient administration, operation, and maintenance of the trust. The commissioner must not adopt and promulgate rules and regulations that in any way interfere with the fiduciary responsibility of the state investment officer to make all decisions regarding the investment of money in the trust. The State Board of Investment may adopt and promulgate rules and regulations to provide for the prudent investment of the assets of the trust. The State Board of Investment or its designee may select and enter into agreements with individuals and entities to provide investment advice and

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3857

management of the assets held by the trust, establish investment guidelines, objectives, and performance standards for the assets held by the trust, and approve any fees, commissions, and expenses which directly or indirectly affect the return on assets.

Subd. 4. Authorized withdrawals. A qualified individual may make withdrawals as a participant in the Minnesota long-term care savings plan to pay or reimburse long-term care expenses or long-term care insurance premiums. Any participant who is not a qualified individual or who makes a withdrawal for any reason other than a transfer of funds to a spouse, payment of long-term care expenses or long-term care insurance premiums, or the death of the participant is subject to a ten percent penalty on the amount withdrawn. The commissioner shall collect the penalty.

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

Sec. 2. Minnesota Statutes 2014, section 116J.8737, subdivision 5, is amended to read:

Subd. 5. Credit allowed. (a)(1) A qualified investor or qualified fund is eligible for a credit equal to 25 percent of the qualified investment in a qualified small business. Investments made by a pass-through entity qualify for a credit only if the entity is a qualified fund. The commissioner must not allocate more than $15,000,000 in credits to qualified investors or qualified funds for taxable years beginning after December 31, 2013, and before January 1, ~~2017~~ 2015, and must not allocate more than $18,000,000 in credits to qualified investors or qualified funds for taxable years beginning after December 31, 2014, and before January 1, 2019; and

(2) for taxable years beginning after December 31, 2014, and before January 1, 2017, ~~$7,500,000~~ 50 percent of the amount available for the taxable year must be allocated to credits for qualifying investments in qualified greater Minnesota businesses and minority- or women-owned qualified small businesses in Minnesota. Any portion of a taxable year's credits that is reserved for qualifying investments in greater Minnesota businesses and minority- or women-owned qualified small businesses in Minnesota that is not allocated by September 30 of the taxable year is available for allocation to other credit applications beginning on October 1. Any portion of a taxable year's credits that is not allocated by the commissioner does not cancel and may be carried forward to subsequent taxable years until all credits have been allocated.

(b) The commissioner may not allocate more than a total maximum amount in credits for a taxable year to a qualified investor for the investor's cumulative qualified investments as an individual qualified investor and as an investor in a qualified fund; for married couples filing joint returns the maximum is $250,000, and for all other filers the maximum is $125,000. The commissioner may not allocate more than a total of $1,000,000 in credits over all taxable years for qualified investments in any one qualified small business.

(c) The commissioner may not allocate a credit to a qualified investor either as an individual qualified investor or as an investor in a qualified fund if, at the time the investment is proposed:

(1) the investor is an officer or principal of the qualified small business; or

(2) the investor, either individually or in combination with one or more members of the investor's family, owns, controls, or holds the power to vote 20 percent or more of the outstanding securities of the qualified small business.

A member of the family of an individual disqualified by this paragraph is not eligible for a credit under this section. For a married couple filing a joint return, the limitations in this paragraph apply collectively to the investor and spouse. For purposes of determining the ownership interest of an investor under this paragraph, the rules under section 267(c) and 267(e) of the Internal Revenue Code apply.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3858

(d) Applications for tax credits for 2010 must be made available on the department's Web site by September 1, 2010, and the department must begin accepting applications by September 1, 2010. Applications for subsequent years must be made available by November 1 of the preceding year.

(e) Qualified investors and qualified funds must apply to the commissioner for tax credits. Tax credits must be allocated to qualified investors or qualified funds in the order that the tax credit request applications are filed with the department. The commissioner must approve or reject tax credit request applications within 15 days of receiving the application. The investment specified in the application must be made within 60 days of the allocation of the credits. If the investment is not made within 60 days, the credit allocation is canceled and available for reallocation. A qualified investor or qualified fund that fails to invest as specified in the application, within 60 days of allocation of the credits, must notify the commissioner of the failure to invest within five business days of the expiration of the 60-day investment period.

(f) All tax credit request applications filed with the department on the same day must be treated as having been filed contemporaneously. If two or more qualified investors or qualified funds file tax credit request applications on the same day, and the aggregate amount of credit allocation claims exceeds the aggregate limit of credits under this section or the lesser amount of credits that remain unallocated on that day, then the credits must be allocated among the qualified investors or qualified funds who filed on that day on a pro rata basis with respect to the amounts claimed. The pro rata allocation for any one qualified investor or qualified fund is the product obtained by multiplying a fraction, the numerator of which is the amount of the credit allocation claim filed on behalf of a qualified investor and the denominator of which is the total of all credit allocation claims filed on behalf of all applicants on that day, by the amount of credits that remain unallocated on that day for the taxable year.

(g) A qualified investor or qualified fund, or a qualified small business acting on their behalf, must notify the commissioner when an investment for which credits were allocated has been made, and the taxable year in which the investment was made. A qualified fund must also provide the commissioner with a statement indicating the amount invested by each investor in the qualified fund based on each investor's share of the assets of the qualified fund at the time of the qualified investment. After receiving notification that the investment was made, the commissioner must issue credit certificates for the taxable year in which the investment was made to the qualified investor or, for an investment made by a qualified fund, to each qualified investor who is an investor in the fund. The certificate must state that the credit is subject to revocation if the qualified investor or qualified fund does not hold the investment in the qualified small business for at least three years, consisting of the calendar year in which the investment was made and the two following years. The three-year holding period does not apply if:

(1) the investment by the qualified investor or qualified fund becomes worthless before the end of the three-year period;

(2) 80 percent or more of the assets of the qualified small business is sold before the end of the three-year period;

(3) the qualified small business is sold before the end of the three-year period;

(4) the qualified small business's common stock begins trading on a public exchange before the end of the three‑year period; or

(5) the qualified investor dies before the end of the three-year period.

(h) The commissioner must notify the commissioner of revenue of credit certificates issued under this section.

EFFECTIVE DATE. This section is effective the day following final enactment for taxable years beginning after December 31, 2014.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3859

Sec. 3. Minnesota Statutes 2014, section 116J.8737, subdivision 12, is amended to read:

Subd. 12. Sunset. This section expires for taxable years beginning after December 31, ~~2016~~ 2018, except that reporting requirements under subdivision 6 and revocation of credits under subdivision 7 remain in effect through ~~2018~~ 2020 for qualified investors and qualified funds, and through ~~2020~~ 2022 for qualified small businesses, reporting requirements under subdivision 9 remain in effect through ~~2021~~ 2023, and the appropriation in subdivision 11 remains in effect through ~~2020~~ 2022.

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

Sec. 4. [116J.8739] TECHNOLOGY CORPORATE TAX BENEFIT REFUND PROGRAM.

Subdivision 1. Program established. The commissioner shall establish a corporate tax benefit refund program to allow new or expanding technology and biotechnology companies in this state with unused net operating loss carryovers under section 290.095 to surrender those tax benefits for refunds. The refunds must be used to assist in the funding of costs incurred by the new or expanding technology and biotechnology company.

Subd. 2. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Biotechnology" means the continually expanding body of fundamental knowledge about the functioning of biological systems from the macro level to the molecular and subatomic levels, as well as novel products, services, technologies, and subtechnologies developed as a result of insights gained from research advances that add to that body of fundamental knowledge.

(1) has its headquarters or base of operations in this state;

(2) owns, has filed for, or has a valid license to use protected, proprietary intellectual property; and

(3) is engaged in the research, development, production, or provision of biotechnology to develop or provide products or processes for specific commercial or public purposes including, but not limited to, medical, pharmaceutical, nutritional, and other health-related purposes, agricultural purposes, and environmental purposes.

(d) "Full-time employee" means a person employed by a new or expanding technology or biotechnology company for consideration for at least 35 hours per week, or who renders any other standard of service generally accepted by custom or practice as full-time employment and whose wages are subject to withholding under section 290.92; or who is a partner of a new or expanding technology or biotechnology company who works for the partnership for at least 35 hours per week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, and whose distributive share of income, gain, loss, or deduction, or whose guaranteed payments, or any combination of them, is subject to the payment of estimated taxes, under section 289A.25. To qualify as a full-time employee, an employee must also receive from the new or expanding technology or biotechnology company group health benefits under a health plan as defined under section 62A.011, subdivision 3, or under a self-insured employee welfare benefit plan as defined in United States Code, title 29, section 1002. Full-time employee excludes any person who works as an independent contractor or on a consulting basis for the new or expanding technology or biotechnology company.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3860

(e) "New or expanding" means a technology or biotechnology company that:

(1) on June 30 of the year in which the corporation files an application for surrender of tax benefits under this section and on the date of the grant of the corporate tax benefit certificate, has fewer than 250 employees in the United States;

(2) on June 30 of the year in which the corporation files the application, has at least one full-time employee working in this state if the company has been incorporated for less than three years, has at least five full-time employees working in this state if the company has been incorporated for more than three years but fewer than five years, and has at least ten full-time employees working in this state if the company has been incorporated for more than five years; and

(3) on the date of the grant of the corporate tax benefit certificate, the corporation has the number of full-time employees in this state required by clause (2).

(f) "Technology company" means a corporation that:

(1) has its headquarters or base of operations in this state;

(2) owns, has filed for, or has a valid license to use protected, proprietary intellectual property; and

(3) employs some combination of the following: highly educated or trained managers and workers, or both, employed in this state who use sophisticated scientific research service or production equipment, processes, or knowledge to discover, develop, test, transfer, or manufacture a product or service.

Subd. 3. Allocation of tax benefits; annual limit. (a) The commissioner, in cooperation with the commissioner of revenue, shall review and approve applications by new or expanding technology and biotechnology companies with unused but otherwise allowable net operating loss carryovers under section 290.095 to surrender those tax benefits for the grant of a refund. The amount of the qualifying tax benefit is the amount of the net operating loss carryover multiplied by the new or expanding technology or biotechnology company's anticipated apportionment percentage, as determined under section 290.191, for the taxable year in which the benefit is surrendered and then multiplied by the corporate franchise tax rate under section 290.06, subdivision 1.

(b) The commissioner must approve the grant of no more than $15,000,000 of tax benefit refunds in each fiscal year. If the total amount of tax benefits requested to be surrendered by approved applicants exceeds $15,000,000 for a fiscal year, the commissioner, in cooperation with the commissioner of revenue, must not approve the grant of more than $15,000,000 of tax benefits for that fiscal year and shall allocate the grant of tax benefit refunds by approved corporations using the following method:

(1) an eligible applicant with $250,000 or less of qualifying tax benefits may surrender the entire amount of its tax benefits;

(2) an eligible applicant with more than $250,000 of qualifying tax benefits may surrender a minimum of $250,000 of its tax benefits; and

(3) an eligible applicant with more than $250,000 of qualifying tax benefits may surrender additional tax benefits determined by multiplying the applicant's tax benefits, less the minimum tax benefits that corporation is authorized to surrender under clause (2), by a fraction, the numerator of which is the total amount of tax benefit grants that the commissioner is authorized to approve less the total amount of tax benefits approved under clauses (1) and (2), and the denominator of which is the total amount of tax benefits requested to be surrendered by all eligible applicants less the total amount of tax benefit grants approved under clauses (1) and (2).

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3861

(c) If the total amount of tax benefit grants that would be authorized using the method under paragraph (b) exceeds $15,000,000 for a fiscal year, then the commissioner, in cooperation with the commissioner of revenue, shall limit the total amount of tax benefit grants authorized to $15,000,000 by applying the above method on an apportioned basis.

Subd. 4. Qualifying tax benefits and corporations. (a) For purposes of this section, qualifying tax benefits include an eligible applicant's unused but otherwise allowable carryover of net operating losses multiplied by the applicant's anticipated allocation factor as determined under section 290.191 for the taxable year in which the benefit is surrendered and subsequently multiplied by the corporation franchise tax rate under section 290.06, subdivision 1. An eligible applicant's qualifying tax benefits are limited to net operating losses that the applicant requests to surrender in its application to the authority and must not, in total, exceed the maximum amount of tax benefits that the applicant is eligible to surrender. No application for a corporate tax benefit certificate must be approved in which the new or expanding technology or biotechnology company:

(1) has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board; or

(2) is directly or indirectly at least 50 percent owned or controlled by another corporation that has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board or is part of a consolidated group of affiliated corporations, as filed for federal income tax purposes, that in the aggregate has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its combined financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board.

(b) The maximum lifetime value of surrendered tax benefits that a corporation may surrender under the program is $5,000,000.

Subd. 5. Recapture of tax benefits. The commissioner, in consultation with the commissioner of revenue, shall establish procedures for the recapture of all of, or a portion of, the amount of a grant of a corporate tax benefit certificate from the new or expanding technology or biotechnology company receiving a grant for a refund of surrendered tax benefits under this section if the taxpayer fails to use the refund as required by this section or fails to maintain a headquarters or a base of operation in this state during the five years following receipt of the refund, except if the failure to maintain a headquarters or a base of operation in this state is due to the liquidation of the new or expanding technology or biotechnology company.

Subd. 6. Approval of acquisition of tax benefits; purposes; required agreement. (a) The commissioner must not issue a corporate tax benefit certificate unless the applicant certifies that as of the date of the grant of the certificate that it is operating as a new or expanding technology or biotechnology company in this state and does not intend to cease operating as a new or expanding technology or biotechnology company in this state.

(b) The recipient of a grant under this section must use the refund to pay expenses incurred for the operation of the new or expanding technology or biotechnology company in this state including, but not limited to, the expenses of fixed assets, such as the construction and acquisition and development of real estate, materials, start-up, tenant fit‑out, working capital, salaries, research and development expenditures, and any other expenses determined by the commissioner to be necessary to carry out technology or biotechnology company operations in this state.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3862

(c) The commissioner shall enter into a written agreement with the new or expanding technology or biotechnology company specifying the terms and conditions of the grant of the certificate of tax benefits. The written agreement may require the maintenance by the new or expanding technology or biotechnology company of a headquarters or a base of operation in this state.

EFFECTIVE DATE. This section is effective the day following final enactment and applies to taxable years beginning after December 31, 2015.

Sec. 5. Minnesota Statutes 2014, section 289A.02, subdivision 7, as amended by Laws 2015, chapter 1, section 1, 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 ~~December 31, 2014~~ April 1, 2015.

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

Sec. 6. Minnesota Statutes 2014, section 289A.12, is amended by adding a subdivision to read:

Subd. 19. Charity health care services. (a) A medical professional, dentist, or chiropractor claiming the subtraction under section 290.01, subdivision 19b, clause (23), must file an informational report with the commissioner documenting the value of charity health care services that the individual provided during the taxable year. A business that employs a medical professional, dentist, or chiropractor may also file an informational report with the commissioner documenting the value of charity health care services its employees provided during the taxable year. The charity health care services reported to the commissioner must be limited to those services covered under medical assistance and for which a federal Medicaid match is available and must be calculated at the reimbursement rates provided in section 256B.76.

(b) For purposes of this subdivision, the following terms have the meanings given:

(1) "chiropractor" means an individual licensed under chapter 148;

(2) "dentist" means an individual licensed under chapter 150A; and

(3) "medical professional" means an individual licensed under chapter 147, an individual licensed under chapter 147B, and a mental health professional as defined under section 245.462, subdivision 18, or section 245.4871, subdivision 27.

(c) The commissioner shall define charity health care services for purposes of this subdivision. In developing this definition, the commissioner shall consider the criteria specified in Minnesota Rules, part 4650.0115, subpart 2.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2015.

Sec. 7. Minnesota Statutes 2014, section 290.01, subdivision 7, is amended to read:

Subd. 7. Resident. (a) The term "resident" means any individual domiciled in Minnesota, except that an individual is not a "resident" for the period of time that the individual is a "qualified individual" as defined in section 911(d)(1) of the Internal Revenue Code, if the qualified individual notifies the county within three months of moving out of the country that homestead status be revoked for the Minnesota residence of the qualified individual, and the property is not classified as a homestead while the individual remains a qualified individual.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3863

(b) "Resident" also means any individual domiciled outside the state who maintains a place of abode in the state and spends in the aggregate more than one-half of the tax year in Minnesota, unless:

(1) the individual or the spouse of the individual is in the armed forces of the United States; or

(2) the individual is covered under the reciprocity provisions in section 290.081.

For purposes of this subdivision, presence within the state for any part of a calendar day constitutes a day spent in the state, except that a day spent in Minnesota for the primary purpose of receiving medical treatment by the taxpayer, or the spouse, child, or parent of the taxpayer, is not treated as a day spent in Minnesota. "Medical treatment" means treatment as defined in section 213(d)(1)(A) of the Internal Revenue Code. Individuals shall keep adequate records to substantiate the days spent outside the state.

The term "abode" means a dwelling maintained by an individual, whether or not owned by the individual and whether or not occupied by the individual, and includes a dwelling place owned or leased by the individual's spouse.

(1) charitable contributions made by an the individual within or without the state ~~in determining if the individual is domiciled in Minnesota.~~;

(2) the location of the individual's attorney, certified public accountant, or financial adviser; or

(3) the place of business of a financial institution at which the individual applies for any new type of credit or at which the individual opens or maintains any type of account.

(d) For purposes of this subdivision, the following terms have the meanings given them:

(1) "financial adviser" means a financial institution or an individual engaged in business as a certified financial planner, registered investment adviser, licensed insurance agent, or securities broker-dealer; and

(2) "financial institution" means a financial institution as defined in section 47.015, subdivision 1; a state or nationally chartered credit union; or a registered broker-dealer under the Securities and Exchange Act of 1934.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 8. Minnesota Statutes 2014, section 290.01, subdivision 19, as amended by Laws 2015, chapter 1, section 2, 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.

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;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3864

(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 ~~December 31, 2014~~ April 1, 2015, shall be in effect for taxable years beginning after December 31, 1996.

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 retroactively for taxable years beginning after December 31, 2013.

Sec. 9. Minnesota Statutes 2014, section 290.01, subdivision 19a, is amended to read:

Subd. 19a. Additions to federal taxable income. For individuals, estates, and trusts, there shall be added to federal taxable income:

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

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code, except:

(A) the portion of the exempt-interest dividends exempt from state taxation under the laws of the United States; and

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

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

(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or accrued within the taxable year under this chapter and the amount of taxes based on net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state or to any province or territory of Canada, to the extent allowed as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not be more than the amount by which the

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3865

state itemized deduction exceeds the amount of the standard deduction as defined in section 63(c) of the Internal Revenue Code, minus any addition that would have been required under clause (17) if the taxpayer had claimed the standard deduction. For the purpose of this clause, income, sales and use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed under clause (15);

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

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

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

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

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

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

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

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

(11) for taxable years beginning before January 1, 2010, the amount deducted for qualified tuition and related expenses under section 222 of the Internal Revenue Code, to the extent deducted from gross income;

(12) for taxable years beginning before January 1, 2010, the amount deducted for certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted from gross income;

(13) discharge of indebtedness income resulting from reacquisition of business indebtedness and deferred under section 108(i) of the Internal Revenue Code;

(14) changes to federal taxable income attributable to a net operating loss that the taxpayer elected to carry back for more than two years for federal purposes but for which the losses can be carried back for only two years under section 290.095, subdivision 11, paragraph (c);

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3866

(15) the amount of disallowed itemized deductions, but the amount of disallowed itemized deductions plus the addition required under clause (2) may not be more than the amount by which the itemized deductions as allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of the Internal Revenue Code, and reduced by any addition that would have been required under clause (17) if the taxpayer had claimed the standard deduction:

(i) the amount of disallowed itemized deductions is equal to the lesser of:

(A) three percent of the excess of the taxpayer's federal adjusted gross income over the applicable amount; or

(B) 80 percent of the amount of the itemized deductions otherwise allowable to the taxpayer under the Internal Revenue Code for the taxable year;

(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a married individual filing a separate return. Each dollar amount shall be increased by an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code for the calendar year in which the taxable year begins, by substituting "calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;

(iii) the term "itemized deductions" does not include:

(A) the deduction for medical expenses under section 213 of the Internal Revenue Code;

(B) any deduction for investment interest as defined in section 163(d) of the Internal Revenue Code; and

(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue Code or for losses described in section 165(d) of the Internal Revenue Code;

(16) the amount of disallowed personal exemptions for taxpayers with federal adjusted gross income over the threshold amount:

(i) the disallowed personal exemption amount is equal to the number of personal exemptions allowed under section 151(b) and (c) of the Internal Revenue Code multiplied by the dollar amount for personal exemptions under section 151(d)(1) and (2) of the Internal Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal Revenue Code, and by the applicable percentage;

(ii) "applicable percentage" means two percentage points for each $2,500 (or fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable year exceeds the threshold amount. In the case of a married individual filing a separate return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In no event shall the applicable percentage exceed 100 percent;

(iii) the term "threshold amount" means:

(A) $150,000 in the case of a joint return or a surviving spouse;

(B) $125,000 in the case of a head of a household;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3867

(C) $100,000 in the case of an individual who is not married and who is not a surviving spouse or head of a household; and

(D) $75,000 in the case of a married individual filing a separate return; and

(iv) the thresholds shall be increased by an amount equal to:

(A) such dollar amount, multiplied by

(17) to the extent deducted in the computation of federal taxable income, for taxable years beginning after December 31, 2010, and before January 1, 2014, the difference between the standard deduction allowed under section 63(c) of the Internal Revenue Code and the standard deduction allowed for 2011, 2012, and 2013 under the Internal Revenue Code as amended through December 1, 2010.; and

(18) the amount withdrawn by a participant in the Minnesota long-term care savings plan under section 16A.128 by a person who is not a qualified individual or for any reason other than a transfer of funds to a spouse, payment of long-term care expenses or long-term care insurance premiums, or the death of the participant, including withdrawals made by reason of cancellation of the participation agreement or termination of the plan.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 10. Minnesota Statutes 2014, 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, and amounts used to claim the credit under section 290.067, not to exceed ~~$1,625~~ $2,500 for each qualifying child in ~~grades~~ a prekindergarten educational program or in kindergarten to through grade 6 and ~~$2,500~~ $3,750 for each qualifying child in grades 7 to through 12, for tuition, textbooks, and transportation of each qualifying child in attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, "textbooks" includes books and other instructional materials and equipment purchased or leased for use in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state. Equipment expenses qualifying for deduction includes expenses as defined and limited in section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional books and materials used in the teaching of religious tenets, doctrines, or worship, the purpose of which

~~Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3868~~

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. No deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or the qualifying child's vehicle to provide such transportation for a qualifying child education-related expenses, as defined in section 290.0674, subdivision 1, and tuition for each qualifying child attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363A. For purposes of the subtraction provided by this clause, "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue Code; and "prekindergarten educational program" has the meaning given in section 290.0674, subdivision 1. The maximum amounts allowed for each qualifying child under this clause must be adjusted for inflation. The commissioner shall adjust the maximum amount by the percentage determined under the provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2014" is substituted for the word "1992." For 2016, the commissioner shall then determine the percent change from the 12 months ending on August 31, 2014, to the 12 months ending on August 31, 2015, and in each subsequent year, from the 12 months ending August 31, 2014, to the 12 months ending on August 31 of the year preceding the taxable year. The amounts as adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10 amount. The determination of the commissioner under this subdivision is not a rule subject to the Administrative Procedure Act in chapter 14, including section 14.386;

(4) income as provided under section 290.0802;

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

(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) of the Internal Revenue Code in determining federal taxable income by an individual who does not itemize deductions for federal income tax purposes for the taxable year, an amount equal to 50 percent of the excess of charitable contributions over $500 allowable as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, under the provisions of Public Law 109-1 and Public Law 111-126;

(7) 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;

(8) 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 (12), 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 (12), 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;

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

(10) to the extent included in federal taxable income, the amount of compensation paid to members of the Minnesota National Guard or other reserve components of the United States military for active service, including compensation for services performed under the Active Guard Reserve (AGR) program. For purposes of this clause,

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3869

"active service" means (i) state active service as defined in section 190.05, subdivision 5a, clause (1); or (ii) federally funded state active service as defined in section 190.05, subdivision 5b, and "active service" includes service performed in accordance with section 190.08, subdivision 3;

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

(12) 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;

(13) 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 (13), 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 (13), 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 the section 179 expensing subtraction as provided under section 290.0803, subdivision 3;

(14) to the extent included in the federal taxable income of a nonresident of Minnesota, compensation paid to a service member as defined in United States Code, title 10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2);

(15) to the extent included in federal taxable income, the amount of national service educational awards received from the National Service Trust under United States Code, title 42, sections 12601 to 12604, for service in an approved Americorps National Service program;

(16) to the extent included in federal taxable income, discharge of indebtedness income resulting from reacquisition of business indebtedness included in federal taxable income under section 108(i) of the Internal Revenue Code. This subtraction applies only to the extent that the income was included in net income in a prior year as a result of the addition under subdivision 19a, clause (13);

(17) the amount of the net operating loss allowed under section 290.095, subdivision 11, paragraph (c);

(18) the amount of expenses not allowed for federal income tax purposes due to claiming the railroad track maintenance credit under section 45G(a) of the Internal Revenue Code;

(19) the amount of the limitation on itemized deductions under section 68(b) of the Internal Revenue Code;

(20) the amount of the phaseout of personal exemptions under section 151(d) of the Internal Revenue Code; ~~and~~

(21) to the extent included in federal taxable income, the amount of qualified transportation fringe benefits described in section 132(f)(1)(A) and (B) of the Internal Revenue Code. The subtraction is limited to the lesser of the amount of qualified transportation fringe benefits received in excess of the limitations under section 132(f)(2)(A)

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3870

of the Internal Revenue Code for the year or the difference between the maximum qualified parking benefits excludable under section 132(f)(2)(B) of the Internal Revenue Code minus the amount of transit benefits excludable under section 132(f)(2)(A) of the Internal Revenue Code.;

(22) to the extent included in federal taxable income, an amount not to exceed $40 per employee per calendar month, provided that:

(i) for an individual, the subtraction equals the value of the use of an on-premises fitness facility provided by an employer to the individual, or the value of any fees, dues, or membership expenses paid by an employer on behalf of the individual to a fitness facility;

(ii) for an S corporation, sole proprietor, or partnership, the subtraction equals the value of any fees, dues, or membership expenses paid on behalf of its employees to a fitness facility;

(iii) the subtraction under this clause applies only if the use of on-premises fitness facilities or the payment of fees, dues, or membership expenses to a fitness facility are available on substantially the same terms to each member of a group of employees defined under a reasonable classification by the employer, but no classification may include only highly compensated employees, as defined under section 414(q) of the Internal Revenue Code, or any other group that includes only executives, directors, or other managerial employees;

(iv) the subtraction under this clause is only allowed to employers and employees for months in which the employee uses the fitness facility for the preservation, maintenance, encouragement, or development of physical fitness on at least eight days; and

(v) for purposes of this clause, "fitness facility" means a facility located in the state:

(A) that provides instruction in a program of physical exercise; offers facilities for the preservation, maintenance, encouragement, or development of physical fitness; or is the site of such a program of a state or local government;

(B) that is not a private club owned and operated by its members;

(D) whose fitness facility is not incidental to its overall function and purpose; and

(E) that is compliant with antidiscrimination laws under chapter 363A and applicable federal antidiscrimination laws;

(23) to the extent not deducted in computing federal taxable income, the value of charity health care services provided by a medical professional as defined under section 289A.12, subdivision 19, paragraph (b), clause (3), a dentist licensed under chapter 150A, or a chiropractor licensed under chapter 148, and acting within the scope of the individual's license. For the purposes of this clause, the value of charity health care services must be calculated at the applicable reimbursement rate provided under section 256B.76 for the medical professional, dentist, or chiropractor for services for which a federal Medicaid match is available;

(24) for an individual who does not claim the credit under section 290.0677, subdivision 1a, and receives compensation from a pension or other retirement pay from the federal government for service in the military, as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455, or 12732 to 12733, $1,000 for each year or portion of a year of military service, up to a maximum of 20 years of military service and a maximum subtraction of $20,000. In the case of a married couple filing jointly, each spouse is eligible for this subtraction. The subtraction under this clause is not limited to the amount of compensation received from a pension or other retirement pay;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3871

(25) to the extent included in federal taxable income, a percentage of Social Security benefits. For purposes of this clause, for the taxable year beginning after December 31, 2014, and before January 1, 2016, the percentage is 25 percent, and the percentage increases by 25 percentage points in each taxable year thereafter until the percentage of Social Security benefits allowed as a subtraction under this clause is 100 percent;

(26) the amount equal to the contributions made during the taxable year to a college savings plan account qualifying under section 529 of the Internal Revenue Code, not including amounts rolled over from other college savings plan accounts, and not to exceed $3,000 for married couples filing joint returns and $1,500 for all other filers. The subtraction must not include any amount used to claim the credit allowed under section 290.0684;

(27) to the extent not deducted in determining federal taxable income, an amount equal to contributions made to the Minnesota long-term care savings plan under section 16A.728, up to a maximum of $2,000 for married individuals filing joint returns and $1,000 for any other individual, and any investment earnings made as a participant in the Minnesota long-term care savings plan; and

(28) for an individual who is a first responder, an amount equal to the sum of:

(i) $7.50 per day of deemed meal expenses for two days in each week during the taxable year that the eligible individual was on call for fewer than 21 hours; plus

(ii) $7.50 per day of deemed meal expenses for four days in each week during the taxable year that the eligible individual was on call for 21 or more hours.

For purposes of this clause, "first responder" means an individual who meets the definition of:

(A) ambulance service personnel in section 144E.001, subdivision 3a;

(B) an emergency medical responder in section 144E.001, subdivision 6;

(D) a full-time firefighter in section 299N.03, subdivision 5; or

(E) a volunteer firefighter in section 299N.03, subdivision 7.

For the purposes of this clause, "on call" means required to respond to requests for emergency medical services or fire help within the geographic area served by the ambulance service or fire department of which the first responder is an employee or volunteer.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014, except that clause (23) is effective for taxable years beginning after December 31, 2015.

Sec. 11. Minnesota Statutes 2014, section 290.01, subdivision 19d, is amended to read:

Subd. 19d. Corporations; modifications decreasing federal taxable income. For corporations, there shall be subtracted from federal taxable income after the increases provided in subdivision 19c:

(1) the amount of foreign dividend gross-up added to gross income for federal income tax purposes under section 78 of the Internal Revenue Code;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3872

(2) the amount of salary expense not allowed for federal income tax purposes due to claiming the work opportunity credit under section 51 of the Internal Revenue Code;

(3) any dividend (not including any distribution in liquidation) paid within the taxable year by a national or state bank to the United States, or to any instrumentality of the United States exempt from federal income taxes, on the preferred stock of the bank owned by the United States or the instrumentality;

(4) the deduction for capital losses pursuant to sections 1211 and 1212 of the Internal Revenue Code, except that:

(i) for capital losses incurred in taxable years beginning after December 31, 1986, capital loss carrybacks shall not be allowed;

(ii) for capital losses incurred in taxable years beginning after December 31, 1986, a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be allowed;

(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a capital loss carryback to each of the three taxable years preceding the loss year, subject to the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and

(iv) for capital losses incurred in taxable years beginning before January 1, 1987, a capital loss carryover to each of the five taxable years succeeding the loss year to the extent such loss was not used in a prior taxable year and subject to the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed;

(5) an amount for interest and expenses relating to income not taxable for federal income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 291 of the Internal Revenue Code in computing federal taxable income;

(6) in the case of mines, oil and gas wells, other natural deposits, and timber for which percentage depletion was disallowed pursuant to subdivision 19c, clause (8), a reasonable allowance for depletion based on actual cost. In the case of leases the deduction must be apportioned between the lessor and lessee in accordance with rules prescribed by the commissioner. In the case of property held in trust, the allowable deduction must be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the trust, or if there is no provision in the instrument, on the basis of the trust's income allocable to each;

(7) for certified pollution control facilities placed in service in a taxable year beginning before December 31, 1986, and for which amortization deductions were elected under section 169 of the Internal Revenue Code of 1954, as amended through December 31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, subdivision 7;

(8) amounts included in federal taxable income that are due to refunds of income, excise, or franchise taxes based on net income or related minimum taxes paid by the corporation to Minnesota, another state, a political subdivision of another state, the District of Columbia, or a foreign country or possession of the United States to the extent that the taxes were added to federal taxable income under subdivision 19c, clause (1), in a prior taxable year;

(9) income or gains from the business of mining as defined in section 290.05, subdivision 1, clause (a), that are not subject to Minnesota franchise tax;

(10) the amount of disability access expenditures in the taxable year which are not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3873

(11) the amount of qualified research expenses not allowed for federal income tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that the amount exceeds the amount of the credit allowed under section 290.068;

(12) the amount of salary expenses not allowed for federal income tax purposes due to claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;

(13) any decrease in subpart F income, as defined in section 952(a) of the Internal Revenue Code, for the taxable year when subpart F income is calculated without regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;

(14) in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19c, clause (12), an amount equal to one-fifth of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount of the addition made by the taxpayer under subdivision 19c, clause (12). The resulting delayed depreciation cannot be less than zero;

(15) ~~in each of the five tax years immediately following the tax year in which an addition is required under subdivision 19c, clause (13), an amount equal to one-fifth of the amount of the addition~~ the section 179 expensing subtraction as provided under section 290.0803, subdivision 3;

(17) the amount of expenses not allowed for federal income tax purposes due to claiming the railroad track maintenance credit under section 45G(a) of the Internal Revenue Code.; and

(18) to the extent included in federal taxable income, an amount equal to any fees, dues, or membership expenses paid by an employer on behalf of each employee to a fitness facility, as defined in subdivision 19b, clause (22), item (v), provided that:

(i) the subtraction under this clause shall not exceed $40 per employee per calendar month;

(ii) the subtraction under this clause is only allowed to employers for months in which the employee uses the fitness facility for the preservation, maintenance, encouragement, or development of physical fitness on at least eight days; and

(iii) the subtraction under this clause applies only if the payment of fees, dues, or membership expenses to a fitness facility are available on substantially the same terms to each member of a group of employees defined under a reasonable classification by the employer, but no classification may include only highly compensated employees, as defined under section 414(q) of the Internal Revenue Code, or any other group that includes only executives, directors, or other managerial employees.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 12. Minnesota Statutes 2014, section 290.01, subdivision 29, is amended to read:

Subd. 29. Taxable income. The term "taxable income" means:

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3874

(2) for corporations, the taxable net income less

(i) the net operating loss deduction under section 290.095, excluding any amount surrendered under section 116J.8739;

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

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

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2015.

Sec. 13. Minnesota Statutes 2014, section 290.01, subdivision 31, as amended by Laws 2015, chapter 1, section 3, is amended to read:

Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through ~~December 31, 2014~~ April 1, 2015. Internal Revenue Code also includes any uncodified provision in federal law that relates to provisions of the Internal Revenue Code that are incorporated into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as amended through March 18, 2010.

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

Sec. 14. [290.016] CONTINGENT FEDERAL CONFORMITY; TAX YEARS 2015 AND 2016.

Subdivision 1. Legislative purpose. (a) The legislature intends this section to provide a mechanism for conforming the Minnesota individual income and corporate franchise taxes to federal tax legislation that Congress regularly passes after the legislature has adjourned and that affect a taxable year that ends before the legislature reconvenes in a regular legislative session. In recent years, Congress has repeatedly passed tax laws late in the year, often in November or December, that affect computation of the tax for that taxable year. Many of these changes affect computation of Minnesota tax through its linkage to federal taxable income or other provisions of federal law. The federal changes consist mainly of extending provisions that reduce revenues and that are scheduled to expire so that Congress can create the appearance that it is not permanently reducing the federal budget in enacting these provisions. Because the legislature does not reconvene in regular legislative session until January, at the earliest under the Minnesota Constitution, after the end of the taxable year and because Minnesota law is linked to federal law as it exists on a specific date, taxpayers and the Department of Revenue must assume that Minnesota law does not include the effect of these federal extenders, even though the legislature regularly adopts most of the federal provisions retroactively in the next legislative session. This situation affects the ability to determine how to comply with and administer Minnesota income tax law, causing delay, uncertainty, and added costs for all concerned and making it difficult for taxpayers to do routine tax planning.

(b) The purpose of this section is to provide clear notice to the taxpayers, software providers, tax preparers, and the Department of Revenue as to how Minnesota law will treat these federal extender provisions when congress adopts them. The mechanism is intended to allow for timely preparation of forms, modification of software, and a prompt and smooth start to the Minnesota tax filing season as the congressional action will allow, given that the legislature may not be in session until after the start of the filing season. Absent this or a similar mechanism, taxpayers and the Department of Revenue will be unable to determine how to compute their tax liability until the legislature can convene and pass a new law, which it may not be practical to do until well after the tax filing season has begun. This is especially true in 2016 when reconstruction of the Capitol may delay the reconvening of the legislature. The legislature's intent, as expressed in the substantive provisions of this section, is to conform to the

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3875

federal extenders, including minor modifications of them, in order to make Minnesota tax law easier to comply with and administer. The legislature also recognizes that the primary effect of this situation is to reduce taxes and is allocating a specific dollar amount that will be used for tax reductions without regard to the action that Congress takes.

(c) By expressing its clear intent regarding specific federal provisions and providing guidance as to how to treat the federal extender provisions, the legislature is exercising its legislative power and is not unconstitutionally delegating to Congress or the commissioner of revenue the authority to determine Minnesota tax law. The legislature believes that this section is consistent with the Minnesota Supreme Court's ruling in the case of Wallace v. Commissioner of Taxation, 289 Minn. 220 (1971).

Subd. 2. Contingent federal conformity account established; transfer. (a) A contingent federal conformity account is established in the general fund. Money in the account is available for transfer to the general fund to offset the reduction in general fund revenues resulting from conforming Minnesota tax law to federal law under this section, if congress enacts a law that extends an eligible federal tax preference to apply to a taxable year beginning after December 31, 2014, and before January 1, 2017.

(b) $105,000,000 is transferred from the general fund to the contingent federal conformity account, effective July 1, 2015. Of this amount, $68,000,000 is set aside to offset the revenue loss from conforming to eligible federal preferences for taxable years beginning during calendar year 2015 and $37,000,000 for taxable years beginning during calendar year 2016. Any amount allocated for 2015 that is not used is carried over to 2016.

(c) Any amounts not used under paragraph (b) must be used to increase the additional personal and dependent exemption provided in this article. To carry out this requirement, the commissioner shall, for taxable years beginning during 2017, increase the factor used to multiply federal personal exemptions to determine the additional personal and dependent exemption amount from one-quarter to the percentage rate, rounded to the nearest percentage point, sufficient to eliminate any remaining amounts in the contingent federal conformity account. The resulting increase in the additional exemption percentage is a onetime adjustment.

Subd. 3. Eligible federal tax preferences. For purposes of this section and section 290.01, the term "eligible federal tax preferences" means any of the following items that are not in effect under the Internal Revenue Code for either the taxable years beginning during calendar year 2015 or 2016:

(1) discharge of qualified principal residence indebtedness under subparagraph (E), section 108(a)(1), of the Internal Revenue Code;

(2) qualified tuition and related expenses under section 222 of the Internal Revenue Code;

(3) expenses of elementary and secondary school teachers under subparagraph (D), section 62(a)(2), of the Internal Revenue Code;

(4) mortgage insurance premiums treated as qualified residence interest under subparagraph (E), section 163(h)(3), of the Internal Revenue Code;

(5) the special rule for contributions of capital gain real property made for conservation purposes under sections 170(b)(1)(E) and 170(b)(2)(B) of the Internal Revenue Code;

(6) tax-free distributions from individual retirement accounts for charitable purposes under section 408(d)(8) of the Internal Revenue Code;

(7) classification of certain race horses as 3-year property under clauses (i) and (ii) of section 168(e)(3)(A) of the Internal Revenue Code;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3876

(8) 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements under clauses (iv), (v), and (ix) of section 168(e)(3)(E) of the Internal Revenue Code;

(9) 7-year recovery period for motorsports entertainment complexes under section 168(i)(15) of the Internal Revenue Code;

(10) accelerated depreciation for business property on an Indian reservation under section 168(j) of the Internal Revenue Code;

(11) enhanced deduction for contributions of food inventory under section 170(e)(3)(C) of the Internal Revenue Code;

(12) election to expense mine safety equipment under section 179E of the Internal Revenue Code;

(13) special expensing rules for certain film and television productions under section 181 of the Internal Revenue Code;

(14) modification of tax treatment of certain payments to controlling exempt organizations under subparagraph (E), section 512(b)(13), of the Internal Revenue Code;

(15) treatment of certain dividends of regulated investment companies under section 871(k) of the Internal Revenue Code;

(16) subpart F exception for active financing income under section 953(e) of the Internal Revenue Code;

(17) temporary exclusion of 100 percent of gain on certain small business stock under section 1202(a) of the Internal Revenue Code;

(18) basis adjustment of stock of S corporations making charitable contributions of property under section 1367(a) of the Internal Revenue Code;

(19) reduction in S corporation recognition period for built-in gains tax under section 1374(d)(7) of the Internal Revenue Code;

(20) special allowance for second-generation biofuel plant property under section 168(l) of the Internal Revenue Code;

(21) energy efficient commercial buildings deduction under section 179D of the Internal Revenue Code; and

(22) the $500,000 and $2,000,000 limitations under section 179 of the Internal Revenue Code.

Subd. 4. Designation of qualifying federal conformity items. (a) If following final adjournment of the 2015 Minnesota legislature or final adjournment of the 2016 Minnesota legislature, congress enacts a law that extends one or more of the eligible federal tax preferences respectively to taxable years beginning during calendar year 2015 or to taxable years beginning during calendar year 2016, the commissioner shall prepare a list of qualifying federal conformity items and publish it on the Department of Revenue's Web site within 30 days following enactment of the law. In preparing the list, the commissioner shall estimate the reduction in revenue resulting from allowing the eligible federal tax preferences, including the effect of subdivision 8, for the current and succeeding fiscal year only. The commissioner shall not include an item on the list of qualifying federal conformity items if its inclusion would cause the estimated total reduction in general fund revenues to exceed the amount available in the contingent federal conformity account for transfer to the general fund for the taxable year.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3877

(b) In determining whether there are sufficient funds in the account, the commissioner shall consider the provisions of subdivision 8 as the first item to include on the list of qualifying conformity items, and shall consider the $500,000 and $2,000,000 limits under section 179 of the Internal Revenue Code as the last item to include on the list of qualifying conformity items. If there are insufficient funds in the account to offset full conformity to section 179 deductions in the taxable year the expense is allowed for federal purposes, then the provisions of section 290.01, subdivisions 19a, clause (8); 19b, clause (13); 19c, clause (13); and 19d, clause (15), apply to determine the appropriate taxable year in which the section 179 expenses are allowed. If there are insufficient funds in the account to offset full conformity for all of the eligible federal tax preferences other than section 179, the commissioner shall apply the following priorities in determining which items to include:

(1) the effect of all the eligible federal tax preferences on computation of federal adjusted gross income and household income under chapter 290A is the first priority;

(2) the items in subdivision 3, clauses (6) to (21), in that order, are the second priority;

(3) the items in subdivision 3, clauses (1) to (5), in that order, are the third priority; and

(4) the effect of the federal law on computation of Minnesota tax credits is the last priority.

(c) In determining whether to include an eligible federal tax preference on the list of qualifying federal conformity items, the commissioner may include items in which nonmaterial changes were made in the federal law extending allowance of the eligible federal tax preferences, as compared to the provision that was in effect for the prior federal taxable year. For purposes of this determination, nonmaterial changes are limited to changes that are estimated to increase or decrease Minnesota tax revenues by no more than $1,000,000 for the affected eligible federal tax preference item.

Subd. 5. Provisions in effect. (a) For purposes of determining tax and credits under this chapter, including the taxes under sections 290.091 and 290.0921, and household income under chapter 290A, qualifying federal conformity items and bonus depreciation rules under subdivision 8 apply for the relevant taxable year and all the provisions of this chapter apply as if the definition of the Internal Revenue Code under section 290.01, subdivision 31, included the amendments to the qualifying federal conformity items.

(b) The commissioner shall administer the taxes under this chapter and refunds under chapter 290A as if Minnesota had conformed to the federal definitions of net income, adjusted gross income, and tax credits that affect computation of Minnesota taxes or refunds resulting from extension of the qualifying federal conformity items.

Subd. 6. Forms preparation. The commissioner shall prepare forms and instructions that reflect the qualifying federal conformity items and bonus depreciation rules under subdivision 8, if applicable, for taxable years 2015 and 2016 consistent with the provisions of this section.

Subd. 7. Transfer to general fund. By the first February 15 following publication of a list of qualifying federal conformity items, the commissioner of revenue shall transfer from the contingent federal conformity account an amount sufficient to offset the estimated reduction in general fund revenues resulting from allowing the eligible federal tax preferences on the list.

Subd. 8. Bonus depreciation; 80 percent rule applies. If following final adjournment of the 2015 Minnesota legislature or final adjournment of the 2016 Minnesota legislature Congress enacts a law that extends application of the depreciation special allowances under section 168(k) of the Internal Revenue Code to taxable years beginning either during calendar year 2015 or 2016, the rules under section 290.01, subdivisions 19a, clause (7); 19b, clause (8); 19c, clause (12); and 19d, clause (14), apply to determine the amount of the special allowance of depreciation that applies to the relevant taxable years.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3878

Subd. 9. Appropriations. Amounts sufficient to make the transfers required under subdivisions 2 and 7 are appropriated to the commissioner from the general fund or the contingent federal conformity account in the general fund, as appropriate.

Subd. 10. Draft legislation. For each taxable year for which the commissioner publishes a list of qualifying federal conformity items under this section, the commissioner shall provide the chairs and ranking minority members of the house of representatives and senate committees with jurisdiction over taxes with draft legislation that would conform this chapter to the qualifying federal conformity items and any other conformity items that the commissioner recommends be adopted. The draft legislation is intended to make the statutes consistent with application of the designated qualifying federal conformity items under this section for the convenience of members of the public. Failure to pass the draft legislation does not affect computation of Minnesota tax liability for the affected taxable years under this section.

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

Sec. 15. Minnesota Statutes 2014, section 290.06, is amended by adding a subdivision to read:

Subd. 37. Refund; technology corporate tax benefits certificate; appropriation. (a) A corporation is allowed a refund equal to the amount of the qualifying tax benefits certified to the corporation for the taxable year by the commissioner of employment and economic development under section 116J.8739.

(b) An amount sufficient to pay the refunds under this subdivision is appropriated to the commissioner from the general fund.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2015.

Sec. 16. Minnesota Statutes 2014, section 290.06, is amended by adding a subdivision to read:

Subd. 38. Credit for unemployment benefits. (a) A resident individual who was laid off and receives unemployment benefits as a result of lack of work at a facility engaged directly in extraction or processing of iron ore in Itasca County, Lake County, or St. Louis County between March 1, 2015, and December 31, 2015, is entitled to a credit against the tax imposed under this chapter equal to 25 percent of the unemployment benefits paid.

(b) If the amount of credit exceeds the individual's tax liability under this chapter, the commissioner shall refund the excess to the claimant.

(c) An amount sufficient to pay the refunds required by this section is appropriated to the commissioner from the general fund.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 17. Minnesota Statutes 2014, section 290.067, subdivision 1, is amended to read:

Subdivision 1. Amount of credit. (a) A taxpayer may take as a credit against the tax ~~due from the taxpayer and a spouse, if any,~~ imposed under this chapter an amount equal to the sum of dependent care ~~credit for which the taxpayer is eligible pursuant to the provisions of section 21 of the Internal Revenue Code subject to the limitations provided in subdivision 2 except that~~ credits calculated under paragraphs (b), (d), and (e). In determining whether ~~the child qualified as a dependent~~ expenses were paid to care for a qualifying individual, income received as a Minnesota family investment program grant or allowance to or on behalf of the ~~child~~ individual must not be taken into account in determining whether the ~~child~~ individual received more than half of the ~~child's~~ individual's support from the taxpayer~~, and the provisions of section 32(b)(1)(D) of the Internal Revenue Code do not apply~~.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3879

(b) A taxpayer who incurs actual employment-related expenses may take as a credit against the tax imposed under this chapter an amount equal to the dependent care credit for which the taxpayer is eligible pursuant to the provisions of section 21 of the Internal Revenue Code.

(c) A taxpayer who elects to claim a credit under paragraph (d) or (e) may claim a credit under paragraph (b) only for employment-related expenses paid to care for qualifying individuals other than the child for whom deemed expenses were used to claim the credit under paragraph (d) or (e).

(b) If a child who has not attained the age of six years at the close of the taxable year is cared for at a licensed family day care home operated by the child's parent, the taxpayer is deemed to have paid employment-related expenses. (d) In lieu of the credit under paragraph (b), a taxpayer who operates a licensed family day care home may elect to claim as a credit against the tax imposed under this chapter an amount equal to the dependent care credit for which the taxpayer is eligible pursuant to the provisions of section 21 of the Internal Revenue Code calculated using deemed expenses rather than actual employment-related expenses paid. If the child is 16 months old or younger at the close of the taxable year, ~~the amount of~~ deemed expenses ~~deemed to have been paid equals~~ are equal to the maximum ~~limit~~ amount of employment-related expenses incurred during the taxable year that may be taken into account for one ~~qualified~~ qualifying individual under section 21(c) and (d) of the Internal Revenue Code. If the child is older than 16 months of age but has not attained the age of six years at the close of the taxable year, ~~the amount of~~ deemed expenses ~~deemed to have been paid equals~~ are equal to the amount the licensee would charge for the care of a child of the same age for the same number of hours of care. If the child has attained the age of six at the close of the taxable year, deemed expenses are zero.

~~(c) If~~ (e) In lieu of the credit under paragraph (b), a married couple may elect to claim a credit against the tax imposed under this chapter as computed under paragraph (f), if the married couple:

(1) has a child who has not attained the age of one year at the close of the taxable year;

(2) files a joint tax return for the taxable year; ~~and~~

(3) does not participate in a dependent care assistance program as defined in section 129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of (i) the combined earned income of the couple or (ii) the amount of the maximum limit for one qualified individual under section 21(c) and (d) of the Internal Revenue Code will be deemed to be the employment related expense paid for that child. The earned income limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed amount. These deemed amounts apply regardless of whether any employment-related expenses have been paid.; and

(4) does not operate a licensed family day care center home.

(f) A married couple meeting the requirements of paragraph (e) is allowed a credit against the tax imposed under this chapter equal to the dependent care for which the couple is eligible pursuant to section 21 of the Internal Revenue Code calculated using deemed expenses rather than actual employment-related expenses paid. For purposes of this paragraph, deemed expenses are the lesser of (i) the combined earned income of the couple or (ii) the maximum amount of employment-related expenses incurred during the taxable year that may be taken into account for one qualifying individual under section 21(c) and (d) of the Internal Revenue Code or for two qualifying individuals for a taxpayer with two children who have not attained the age of one. The earned income limitation of section 21(d) of the Internal Revenue Code does not apply to this deemed amount. These deemed amounts apply regardless of whether any employment-related expenses have been paid.

~~Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3880~~

~~(d)~~ (g) If the taxpayer is not required and does not file a federal individual income tax return for the tax year, or if the taxpayer does file a federal return but does not claim a federal dependent care credit, no credit is allowed for any amount paid to any person unless:

(1) the name, address, and taxpayer identification number of the person are included on the return claiming the credit; or

(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name and address of the person are included on the return claiming the credit.

In the case of a failure to provide the information required under the preceding sentence, the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence in attempting to provide the information required.

~~(e)~~ (h) In the case of a nonresident, part-year resident, or a person who has earned income not subject to tax under this chapter including earned income excluded pursuant to section 290.01, subdivision 19b, clause (9), the credit determined under this section ~~21 of the Internal Revenue Code~~ must be allocated based on the ratio by which the earned income of the claimant and the claimant's spouse from Minnesota sources bears to the total earned income of the claimant and the claimant's spouse.

~~(f)~~ (i) For residents of Minnesota, the subtractions for military pay under section 290.01, subdivision 19b, clauses (10) and (11), are not considered "earned income not subject to tax under this chapter."

~~(g)~~ (j) For residents of Minnesota, the exclusion of combat pay under section 112 of the Internal Revenue Code is not considered "earned income not subject to tax under this chapter."

(k) For the purposes of this section, the terms "qualifying individual" and "employment-related expenses" have the meanings given in section 21 of the Internal Revenue Code.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 18. Minnesota Statutes 2014, section 290.067, subdivision 2, is amended to read:

Subd. 2. Limitations. The credit for expenses incurred for the care of each dependent shall not exceed $720 in any taxable year, and the total credit for all dependents of a claimant shall not exceed $1,440 in a taxable year. The maximum total credit shall be reduced according to the amount of the income of the claimant and a spouse, if any, as follows:

~~income up to $18,040, $720 maximum for one dependent, $1,440 for all dependents;~~

~~income over $18,040, the maximum credit for one dependent shall be reduced by $18 for every $350 of additional income, $36 for all dependents.~~

The commissioner shall construct and make available to taxpayers tables showing the amount of the credit at various levels of income and expenses. The tables shall follow the schedule contained in this subdivision, except that the commissioner may graduate the transitions between expenses and income brackets.

(a) The maximum credit under subdivision 1, paragraph (b), is:

(1) $1,050 for a taxpayer with employment-related expenses for one qualifying individual;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3881

(2) $2,100 for a taxpayer with employment-related expenses for two or more qualifying individuals;

(3) $1,050 for a taxpayer who elects to claim a credit under subdivision 1, paragraph (d) or (e), if that credit is based on deemed expenses for one child; and

(4) $0 for a taxpayer who elects to claim a credit under subdivision 1, paragraph (d) or (e), if that credit is based on deemed expenses for two or more children.

(b) The maximum credit under subdivision 1, paragraphs (d) and (e), is:

(1) $720 for a taxpayer with deemed expenses for one child; and

(2) $1,440 for a taxpayer with deemed expenses for two or more children.

(c) For a taxpayer who claims a credit under subdivision 1, paragraph (b), who has federal adjusted gross income as defined in the Internal Revenue Code in excess of $100,000, the credit under subdivision 1, paragraph (b), is equal to the lesser of:

(1) the credit calculated under subdivision 1, paragraph (b); or

(2) $600 minus five percent of federal adjusted gross income in excess of $100,000 for a taxpayer with one qualifying individual, or $1,200 minus five percent of federal gross adjusted income in excess of $100,000 for a taxpayer with two or more qualifying individuals, but in no case is the credit less than zero.

(d) For a taxpayer who elects to claim the credit under subdivision 1, paragraph (d) or (e), with federal adjusted gross income as defined in the Internal Revenue Code in excess of $25,000, the credit is equal to the lesser of:

(1) the credit calculated under subdivision 1, paragraph (d) or (e); or

(2) $720 minus five percent of federal adjusted gross income in excess of $25,000 for a taxpayer with one qualifying individual, or $1,440 minus five percent of federal gross adjusted income in excess of $25,000 for a taxpayer with two or more qualifying individuals, but in no case is the credit less than zero.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 19. Minnesota Statutes 2014, section 290.067, subdivision 2b, is amended to read:

Subd. 2b. Inflation adjustment. The commissioner shall adjust the dollar amount of the income threshold at which the ~~maximum~~ credit begins to be reduced under subdivision 2 by the percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) the word ~~"1999"~~ "2014" shall be substituted for the word "1992." For ~~2001~~ 2016, the commissioner shall then determine the percent change from the 12 months ending on August 31, ~~1999~~ 2014, to the 12 months ending on August 31, ~~2000~~ 2015, and in each subsequent year, from the 12 months ending on August 31, ~~1999~~ 2014, to the 12 months ending on August 31 of the year preceding the taxable year. The determination of the commissioner pursuant to this subdivision must not be considered a "rule" and is not subject to the Administrative Procedure Act contained in chapter 14. The threshold amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10 amount.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2015.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3882

Sec. 20. Minnesota Statutes 2014, section 290.067, subdivision 3, is amended to read:

Subd. 3. Credit to be refundable. If the amount of credit which a claimant would be eligible to receive pursuant to this ~~subdivision~~ section exceeds the claimant's tax liability under chapter 290, the excess amount of the credit shall be refunded to the claimant by the commissioner ~~of revenue~~.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 21. Minnesota Statutes 2014, section 290.0671, subdivision 1, is amended to read:

Subdivision 1. Credit allowed. (a) An individual who is a resident of Minnesota is allowed a credit against the tax imposed by this chapter equal to a percentage of earned income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code except that a taxpayer is eligible for this credit even if the taxpayer's earned income or adjusted gross income exceeds the amount for which a credit is available under the additional personal and dependent exemption provided in this article.

(b) For individuals with no qualifying children, the credit equals ~~2.10~~ 2.64 percent of the first ~~$6,180~~ $5,000 of earned income. The credit is reduced by ~~2.01~~ 2.64 percent of earned income or adjusted gross income, whichever is greater, in excess of ~~$8,130~~ $9,830, but in no case is the credit less than zero.

(c) For individuals with one qualifying child, the credit equals ~~9.35~~ 12.66 percent of the first ~~$11,120~~ $8,350 of earned income. The credit is reduced by ~~6.02~~ 4.60 percent of earned income or adjusted gross income, whichever is greater, in excess of ~~$21,190~~ $21,520, but in no case is the credit less than zero.

(d) For individuals with two or more qualifying children, the credit equals 11 14.88 percent of the first ~~$18,240~~ $13,700 of earned income. The credit is reduced by ~~10.82~~ 8.51 percent of earned income or adjusted gross income, whichever is greater, in excess of ~~$25,130~~ $25,530, but in no case is the credit less than zero.

(e) For a nonresident or part-year resident, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

(f) For a person who was a resident for the entire tax year and has earned income not subject to tax under this chapter, including income excluded under section 290.01, subdivision 19b, clause (9), the credit must be allocated based on the ratio of federal adjusted gross income reduced by the earned income not subject to tax under this chapter over federal adjusted gross income. For purposes of this paragraph, the subtractions for military pay under section 290.01, subdivision 19b, clauses (10) and (11), are not considered "earned income not subject to tax under this chapter."

For the purposes of this paragraph, the exclusion of combat pay under section 112 of the Internal Revenue Code is not considered "earned income not subject to tax under this chapter."

(g) For tax years beginning after December 31, 2007, and before December 31, 2010, and for tax years beginning after December 31, 2017, the $8,130 in paragraph (b), the $21,190 in paragraph (c), and the $25,130 in paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by $3,000 for married taxpayers filing joint returns. For tax years beginning after December 31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009, the commissioner shall then determine the percent change from the 12 months ending on August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent year, from the 12 months ending on August 31, 2007, to the 12 months ending on August 31 of the year preceding the taxable year. The earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10. The determination of the commissioner under this subdivision is not a rule under the Administrative Procedure Act.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3883

(h) ~~(1)~~ For tax years beginning after December 31, ~~2012, and before January 1,~~ 2014, the ~~$5,770~~ $9,830 in paragraph (b), the ~~$15,080~~ $21,520 in paragraph (c), and the ~~$17,890~~ $25,530 in paragraph (d), after being adjusted for inflation under subdivision 7, are increased by ~~$5,340~~ $5,520 for married taxpayers filing joint returns; and (2) for tax years beginning after December 31, 2013, and before January 1, 2018, the $8,130 in paragraph (b), the $21,190 in paragraph (c), and the $25,130 in paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by $5,000 for married taxpayers filing joint returns. For tax years beginning after December 31, 2010, and before January 1, 2012, and. For tax years beginning after December 31, ~~2013, and before January 1, 2018~~ 2015, the commissioner shall annually adjust the ~~$5,000~~ $5,520 by the percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B), the word ~~"2008"~~ "2014" shall be substituted for the word "1992." For ~~2011~~ 2016, the commissioner shall then determine the percent change from the 12 months ending on August 31, ~~2008~~ 2014, to the 12 months ending on August 31, ~~2010~~ 2015, and in each subsequent year, from the 12 months ending on August 31, ~~2008~~ 2014, to the 12 months ending on August 31 of the year preceding the taxable year. The earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10. The determination of the commissioner under this subdivision is not a rule under the Administrative Procedure Act.

(i) The commissioner shall construct tables showing the amount of the credit at various income levels and make them available to taxpayers. The tables shall follow the schedule contained in this subdivision, except that the commissioner may graduate the transition between income brackets.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 22. Minnesota Statutes 2014, section 290.0671, subdivision 6a, is amended to read:

Subd. 6a. TANF appropriation for working family credit expansion. (a) On an annual basis the commissioner of revenue, with the assistance of the commissioner of human services, shall calculate the value of the refundable portion of the Minnesota Working Family Credit provided under this section that qualifies for payment with funds from the federal Temporary Assistance for Needy Families (TANF) block grant. Of this total amount, the commissioner of revenue shall estimate the portion entailed by the expansion of the credit rates provided in Laws 2000, chapter 490, article 4, section 17, for individuals with qualifying children over the rates provided in Laws 1999, chapter 243, article 2, section 12.

(b) An amount sufficient to pay the refunds entailed by the expansion of the credit rates provided in Laws 2000, chapter 490, article 4, section 17, for individuals with qualifying children over the rates provided in Laws 1999, chapter 243, article 2, section 12, as estimated in paragraph (a), is appropriated to the commissioner of human services from the federal Temporary Assistance for Needy Families (TANF) block grant funds, for transfer to the commissioner of revenue for deposit in the general fund.

EFFECTIVE DATE. This section is effective retroactively for transfers in fiscal year 2015 and thereafter.

Sec. 23. Minnesota Statutes 2014, section 290.0671, subdivision 7, is amended to read:

Subd. 7. Inflation adjustment. The earned income amounts used to calculate the credit and the income thresholds at which the maximum credit begins to be reduced in subdivision 1 must be adjusted for inflation. The commissioner shall adjust by the percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) the word ~~"2013"~~ "2014" shall be substituted for the word "1992." For ~~2015~~ 2016, the commissioner shall then determine the percent change from the 12 months ending on August 31, ~~2013~~ 2014, to the 12 months ending on August 31, ~~2014~~ 2015, and in each subsequent year, from the 12 months ending on August 31, ~~2013~~ 2014, to the 12 months ending on August 31 of the year preceding the taxable year. The

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3884

earned income thresholds as adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10 amount. The determination of the commissioner under this subdivision is not a rule under the Administrative Procedure Act.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 24. Minnesota Statutes 2014, section 290.0672, subdivision 2, is amended to read:

Subd. 2. Credit. A taxpayer is allowed a credit against the tax imposed by this chapter for long-term care insurance policy premiums paid during the tax year. The credit for each policy equals 25 50 percent of premiums paid to the extent not deducted in determining federal taxable income. A taxpayer may claim a credit for only one policy for each qualified beneficiary. A maximum of ~~$100~~ $150 applies to each qualified beneficiary. The maximum total credit allowed per year is ~~$200~~ $300 for married couples filing joint returns and ~~$100~~ $150 for all other filers. For a nonresident or part-year resident, the credit determined under this section must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 25. Minnesota Statutes 2014, section 290.0674, subdivision 1, is amended to read:

Subdivision 1. Credit allowed. An individual is allowed a credit against the tax imposed by this chapter in an amount equal to 75 percent of the amount paid for education-related expenses for a qualifying child in a prekindergarten educational program or in kindergarten through grade 12. For purposes of this section, "education‑related expenses" means:

(1) fees or tuition for instruction by an instructor under section 120A.22, subdivision 10, clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers Association, and who is not a lineal ancestor or sibling of the dependent for instruction outside the regular school day or school year, including tutoring, driver's education offered as part of school curriculum, regardless of whether it is taken from a public or private entity or summer camps, in grade or age appropriate curricula that supplement curricula and instruction available during the regular school year, that assists a dependent to improve knowledge of core curriculum areas or to expand knowledge and skills under the required academic standards under section 120B.021, subdivision 1, and the elective standard under section 120B.022, subdivision 1, clause (2), and that do not include the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship;

(2) fees for enrollment in a prekindergarten educational program to the extent not used to claim the credit under section 290.067;

~~(2)~~ (3) expenses for textbooks, including books and other instructional materials and equipment purchased or leased for use in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state. "Textbooks" does not include instructional books and materials used in the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship, nor does it include books or materials for extracurricular activities including sporting events, musical or dramatic events, speech activities, driver's education, or similar programs;

~~(3)~~ (4) a maximum expense of $200 per family for personal computer hardware, excluding single purpose processors, and educational software that assists a dependent to improve knowledge of core curriculum areas or to expand knowledge and skills under the required academic standards under section 120B.021, subdivision 1, and the elective standard under section 120B.022, subdivision 1, clause (2), purchased for use in the taxpayer's home and not used in a trade or business regardless of whether the computer is required by the dependent's school; and

~~Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3885~~

~~(4)~~ (5) the amount paid to others for transportation of a qualifying child attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363A. Amounts paid to others for transportation do not include any expense the taxpayer incurred in using the taxpayer's or the qualifying child's vehicle to provide transportation for a qualifying child.

For purposes of this section, "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue Code.

As used in this section, "prekindergarten educational program" means:

(i) prekindergarten programs established by a school district under chapter 124D;

(ii) preschools, nursery schools, and early childhood development programs licensed by the Department of Human Services and eligible for the provider rate differential for accreditation under section 119B.13, subdivision 3a;

(iii) Montessori programs affiliated with or accredited by the American Montessori Society or American Montessori International;

(iv) child care programs provided by family day care providers holding a current early childhood development credential approved by the commissioner of human services; and

(v) a prekindergarten program that participates in the quality rating and improvement system under section 124D.142.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 26. Minnesota Statutes 2014, section 290.0674, subdivision 2, is amended to read:

Subd. 2. Limitations. (a) For claimants with income not greater than ~~$33,500~~ $47,500, the maximum credit allowed for a family is ~~$1,000~~ $1,500 multiplied by the number of qualifying children in ~~kindergarten~~ a prekindergarten educational program through grade 12 in the family. The maximum credit for families with one qualifying child in ~~kindergarten~~ a prekindergarten educational program through grade 12 is reduced by $1 for each $4 $6 of household income over ~~$33,500~~ $47,500, and the maximum credit for families with two or more qualifying children in ~~kindergarten~~ a prekindergarten educational program through grade 12 is reduced by $2 $1 for each $4 $3 of household income over ~~$33,500~~ $47,500, but in no case is the credit less than zero.

~~For purposes of this section "income" has the meaning given in section 290.067, subdivision 2a.~~ In the case of a married claimant, a credit is not allowed unless a joint income tax return is filed.

(b) For a nonresident or part-year resident, the credit determined under subdivision 1 and the maximum credit amount in paragraph (a) must be allocated using the percentage calculated in section 290.06, subdivision 2c, paragraph (e).

(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code; and

(2) the sum of the following amounts to the extent not included in clause (1):

(i) all nontaxable income;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3886

(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss carryover allowed under section 469(b) of the Internal Revenue Code;

(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a solvent individual excluded from gross income under section 108(g) of the Internal Revenue Code;

(iv) cash public assistance and relief;

(v) any pension or annuity (including railroad retirement benefits, all payments received under the federal Social Security Act, Supplemental Security Income, and veterans benefits), which was not exclusively funded by the claimant or spouse, or which was funded exclusively by the claimant or spouse and which funding payments were excluded from federal adjusted gross income in the years when the payments were made;

(vi) interest received from the federal or a state government or any instrumentality or political subdivision thereof;

(vii) workers' compensation;

(viii) nontaxable strike benefits;

(ix) the gross amounts of payments received in the nature of disability income or sick pay as a result of accident, sickness, or other disability, whether funded through insurance or otherwise;

(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1995;

(xi) contributions made by the claimant to an individual retirement account, including a qualified voluntary employee contribution; simplified employee pension plan; self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal Revenue Code;

(xii) nontaxable scholarship or fellowship grants;

(xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;

(xiv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue Code;

(xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue Code; and

(xvi) the amount deducted for certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) of the Internal Revenue Code.

In the case of an individual who files an income tax return on a fiscal year basis, the term "federal adjusted gross income" means federal adjusted gross income reflected in the fiscal year ending in the next calendar year. Federal adjusted gross income may not be reduced by the amount of a net operating loss carryback or carryforward or a capital loss carryback or carryforward allowed for the year.

(d) "Income" does not include:

(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3887

(2) amounts of any pension or annuity that were exclusively funded by the claimant or spouse if the funding payments were not excluded from federal adjusted gross income in the years when the payments were made;

(3) surplus food or other relief in kind supplied by a governmental agency;

(4) relief granted under chapter 290A;

(5) child support payments received under a temporary or final decree of dissolution or legal separation; and

(6) restitution payments received by eligible individuals and excludable interest as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 27. Minnesota Statutes 2014, section 290.0674, is amended by adding a subdivision to read:

Subd. 6. Inflation adjustment. The credit amount and the income threshold at which the maximum credit begins to be reduced in subdivision 2 must be adjusted for inflation. The commissioner shall adjust the credit amount and income threshold by the percentage determined under the provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2014" is substituted for the word "1992." For 2016, the commissioner shall then determine the percent change from the 12 months ending on August 31, 2014, to the 12 months ending on August 31, 2015, and in each subsequent year, from the 12 months ending August 31, 2014, to the 12 months ending on August 31 of the year preceding the taxable year. The credit amount and income threshold, as adjusted for inflation, must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10 amount. The determination of the commissioner under this subdivision is not a rule subject to the Administrative Procedure Act in chapter 14, including section 14.386.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 28. Minnesota Statutes 2014, section 290.0677, subdivision 2, is amended to read:

Subd. 2. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Designated area" means a:

(1) combat zone designated by Executive Order from the President of the United States;

(2) qualified hazardous duty area, designated in Public Law; or

(3) location certified by the U.S. Department of Defense as eligible for combat zone tax benefits due to the location's direct support of military operations.

(c) "Active military service" means active duty service in any of the United States armed forces, the National Guard, or reserves.

(d) "Qualified individual" means an individual who has:

(1) met one of the following criteria:

(i) has served at least 20 years in the military;

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3888

(ii) has a service-connected disability rating of 100 percent for a total and permanent disability; or

(iii) has been determined by the military to be eligible for compensation from a pension or other retirement pay from the federal government for service in the military, as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455, or 12733; ~~and~~

(2) separated from military service before the end of the taxable year; and

(3) has not claimed the subtraction under section 290.01, subdivision 19b, clause (24).

(e) "Adjusted gross income" has the meaning given in section 61 of the Internal Revenue Code.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 29. Minnesota Statutes 2014, section 290.068, subdivision 1, is amended to read:

Subdivision 1. Credit allowed. Subject to the requirements in subdivision 8, a corporation, ~~partners in a partnership, or shareholders in a corporation treated as an "S" corporation under section 290.9725 are~~ individual, trust, or estate is allowed a credit against the tax computed under this chapter for the taxable year equal to:

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

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

(2) the base amount; and

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

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2015.

Sec. 30. Minnesota Statutes 2014, section 290.068, subdivision 3, is amended to read:

Subd. 3. Limitation; carryover. (a) Except as provided in subdivision 6a, paragraph (b), the credit ~~for a taxable year beginning before January 1, 2010, and after December 31, 2012,~~ shall not exceed the liability for tax. "Liability for tax" for purposes of this section means the sum of the tax imposed under section 290.06, subdivisions 1 and 2c, for the taxable year reduced by the sum of the nonrefundable credits allowed under this chapter, on all of the entities required to be included on the combined report of the unitary business. If the amount of the credit allowed exceeds the liability for tax of the taxpayer, but is allowed as a result of the liability for tax of other members of the unitary group for the taxable year, the taxpayer must allocate the excess as a research credit to another member of the unitary group.

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

(c) If the amount of the credit determined under this section for any taxable year exceeds the limitation under paragraph (a) or (b), including amounts allowed as a refund under subdivision 6a, paragraph (b), or allocated to other members of the unitary group, the excess shall be a research credit carryover to each of the 15 succeeding taxable years. The entire amount of the excess unused credit for the taxable year shall be carried first to the earliest

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3889

of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried. The amount of the unused credit which may be added under this clause shall not exceed the taxpayer's liability for tax less the research credit for the taxable year.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 31. Minnesota Statutes 2014, section 290.068, subdivision 6a, is amended to read:

Subd. 6a. Credit to be refundable. (a) If the amount of credit allowed in this section for qualified research expenses incurred in taxable years beginning after December 31, 2009, and before January 1, 2013, exceeds the taxpayer's ~~tax~~ liability for tax under this chapter, the commissioner shall refund the excess amount. The credit allowed for qualified research expenses incurred in taxable years beginning after December 31, 2009, and before January 1, 2013, must be used before any research credit earned under subdivision 3.

(b) If the first $200,000 of the credit allowed in this section for qualified research expenses incurred in taxable years beginning after December 31, 2014, exceeds the taxpayer's liability for tax under this chapter, the commissioner shall refund the excess amount. The $200,000 limit must be applied at the corporation, partnership, or other entity level. The credit allowed for qualified research expenses incurred in taxable years beginning before January 1, 2015, must be used before any research credit under subdivision 3.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 32. Minnesota Statutes 2014, section 290.068, is amended by adding a subdivision to read:

Subd. 8. Applications; certification. (a) A taxpayer claiming a credit under this section must apply to the commissioner of employment and economic development for a determination that the expenses for which the credit is claimed are qualified research expenses. The application must be submitted by September 15 of the calendar year following the end of the taxable year in which the qualified research expenses were incurred. The application must be in a form and manner prescribed by the commissioner of employment and economic development, in consultation with the commissioner, and must contain information sufficient to verify that the expenses for which the credit is claimed under this section are qualified research expenses.

(b) The commissioner of employment and economic development must notify the taxpayer of the determination of the application under paragraph (a) no later than 90 days after the application is received.

(c) Upon approving an application for credit under paragraph (a), the commissioner of employment and economic development must issue a credit certificate to the taxpayer that verifies eligibility for the credit and states the amount of credit and the taxable year to which the credit applies. The commissioner of employment and economic development must notify the commissioner of the issuance of the credit certificate, the amount of the credit, and the taxable year to which the credit applies.

(d) The taxpayer claiming the credit under this section must file an amended return for the taxable year to which the credit applies. The return must contain a copy of the credit certificate issued under paragraph (c).

(e) A credit must not be issued under this section unless the commissioner has received the certification required under paragraph (c).

(f) For purposes of this subdivision, "taxpayer" excludes:

(1) a corporation subject to tax under section 290.06, subdivision 1; and

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3890

(2) an individual claiming a credit for qualified research expenditures of an S corporation or partnership.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2015.

Sec. 33. [290.0682] CREDIT FOR ATTAINING MASTER'S DEGREE IN TEACHER'S LICENSURE FIELD.

Subdivision 1. Definitions. (a) For purposes of this section the following terms have the meanings given them.

(b) "Master's degree program" means a graduate level program at an accredited university leading to a master of arts or science degree in a core content area directly related to a qualified teacher's licensure field. The master's degree program may not include pedagogy or a pedagogy component. To be eligible under this credit, a licensed elementary school teacher must pursue and complete a master's degree program in a core content area in which the teacher provides direct classroom instruction.

(1) currently holds a continuing license granted by the Minnesota Board of Teaching;

(2) began a master's degree program after June 30, 2015; and

(3) completes the master's degree program during the taxable year.

(d) "Core content area" means the academic subject of reading, English or language arts, mathematics, science, foreign languages, civics and government, economics, arts, history, or geography.

Subd. 2. Credit allowed. (a) An individual who is a qualified teacher is allowed a credit against the tax imposed under this chapter. The credit equals $2,500.

(b) For a nonresident or a part-year resident, the credit under this subdivision must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

(c) A qualified teacher may claim the credit in this section only one time for each master's degree program completed in a core content area.

Subd. 3. Credit refundable. (a) If the amount of the credit for which an individual is eligible exceeds the individual's liability for tax under this chapter, the commissioner shall refund the excess to the individual.

(b) The amount necessary to pay the refunds required by this section is appropriated to the commissioner from the general fund.

Subd. 4. Delayed payment of 2015 and 2016 credits. For master's degree programs completed in taxable years beginning after December 31, 2014, and before January 1, 2017, the individual may claim the corresponding credit in the taxable year beginning after December 31, 2016, and before January 1, 2018, but not earlier. Credits claimed for taxable years beginning after December 31, 2014, and before January 1, 2017, are in addition to any credit allowed for the taxable year beginning after December 31, 2016, and before January 1, 2018.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 34. [290.0683] STUDENT LOAN CREDIT.

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Adjusted gross income" means federal adjusted gross income as defined in section 62 of the Internal Revenue Code.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3891

(d) "Eligible individual" means a resident individual with one or more qualified education loans related to an undergraduate or graduate degree program at a postsecondary educational institution.

(e) "Eligible loan payments" means the amount the eligible individual paid during the taxable year to pay principal and interest on qualified education loans.

(f) "Postsecondary educational institution" means a postsecondary institution eligible for state student aid under section 136A.103 or, if the institution is not located in this state, a postsecondary institution participating in the federal Pell Grant program under Title IV of the Higher Education Act of 1965, Public Law 89-329, as amended.

(g) "Qualified education loan" has the meaning given in section 221 of the Internal Revenue Code, but is limited to indebtedness incurred on behalf of the eligible individual or the eligible individual's spouse.

Subd. 2. Credit allowed. (a) An eligible individual is allowed a credit against the tax due under this chapter.

(b) The credit for an eligible individual equals the least of:

(1) eligible loan payments minus ten percent of an amount equal to adjusted gross income in excess of $10,000, but in no case less than zero;

(2) the earned income for the taxable year of the eligible individual and spouse, if any; or

(3) the sum of:

(i) the interest portion of eligible loan payments made during the taxable year; and

(ii) ten percent of the original loan amount of all qualified education loans of the eligible individual and the eligible individual's spouse.

(c) For a part-year resident, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

Subd. 3. Credit refundable. If the amount of credit that an individual is eligible to receive under this section exceeds the individual's tax liability under this chapter, the commissioner shall refund the excess to the individual.

Subd. 4. Appropriation. An amount sufficient to pay the refunds required by this section is appropriated to the commissioner from the general fund.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 35. [290.0684] SECTION 529 COLLEGE SAVINGS PLAN CREDIT.

Subdivision 1. Definitions. For purposes of this section, the term "federal adjusted gross income" has the meaning given under section 62(a) of the Internal Revenue Code, and "nonqualified distribution" means any distribution that is includible in gross income under section 529 of the Internal Revenue Code.

Subd. 2. Credit allowed. (a) A credit of up to $500 is allowed to a resident individual against the tax imposed by this chapter, subject to the limitations in paragraph (b).

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3892

(b) The credit allowed must be calculated by applying the following rates to the amount contributed to a college savings plan account qualifying under section 529 of the Internal Revenue Code, in a taxable year:

(1) 50 percent for individual filers and married couples filing a joint return who have federal adjusted gross income of less than $80,000;

(2) 25 percent for married couples filing a joint return who have federal adjusted gross income over $80,000, but not more than $100,000;

(3) ten percent for married couples filing a joint return who have federal adjusted gross income over $100,000, but not more than $120,000; and

(4) five percent for married couples filing a joint return who have federal adjusted gross income over $120,000, but not more than $160,000.

(c) The income thresholds in paragraph (b), clauses (1) to (4), used to calculate the credit, must be adjusted for inflation. The commissioner shall adjust by the percentage determined under the provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2014" is substituted for the word "1992." For 2016, the commissioner shall then determine the percent change from the 12 months ending on August 31, 2014, to the 12 months ending on August 31, 2015, and in each subsequent year, from the 12 months ending on August 31, 2014, to the 12 months ending on August 31 of the year preceding the taxable year. The income thresholds as adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10 amount. The determination of the commissioner under this subdivision is not a rule under the Administrative Procedure Act including section 14.386.

Subd. 4. Allocation. For a part-year resident, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

Subd. 5. Recapture of credit. In the case of a nonqualified distribution, the taxpayer is liable to the commissioner for the lesser of: ten percent of the amount of the nonqualified distribution, or the sum of credits received under this section for all years.

Subd. 6. Appropriation. An amount sufficient to pay the refunds required by this section is appropriated to the commissioner from the general fund.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 36. Minnesota Statutes 2014, section 290.0802, subdivision 2, is amended to read:

Subd. 2. Subtraction. (a) A qualified individual is allowed a subtraction from federal taxable income of the individual's subtraction base amount. The excess of the subtraction base amount over the taxable net income computed without regard to the subtraction for the elderly or disabled under section 290.01, subdivision 19b, clause (4), may be used to reduce the amount of a lump sum distribution subject to tax under section 290.032.

(b)(1) The initial subtraction base amount equals

(i) ~~$12,000~~ $20,000 for a married taxpayer filing a joint return if a spouse is a qualified individual,

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3893

(ii) ~~$9,600~~ $16,000 for a single taxpayer, and

(iii) ~~$6,000~~ $10,000 for a married taxpayer filing a separate federal return.

(2) The qualified individual's initial subtraction base amount, then, must be reduced by the sum of nontaxable retirement and disability benefits and one-half of the amount of adjusted gross income in excess of the following thresholds:

(i) ~~$18,000~~ $30,000 for a married taxpayer filing a joint return if both spouses are qualified individuals,

(ii) ~~$14,500~~ $24,000 for a single taxpayer or for a married couple filing a joint return if only one spouse is a qualified individual, and

(iii) ~~$9,000~~ $15,000 for a married taxpayer filing a separate federal return.

(3) In the case of a qualified individual who is under the age of 65, the maximum amount of the subtraction base may not exceed the taxpayer's disability income.

(4) The resulting amount is the subtraction base amount.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 37. [290.0803] SECTION 179 EXPENSING SUBTRACTION.

Subdivision 1. Current year allowance. (a) In each of the five tax years immediately following the tax year in which an addition is required under section 290.01, subdivision 19a, clause (8), or 19c, clause (13), the current year allowance equals one-fifth of the addition made by the taxpayer under section 290.01, subdivision 19a, clause (8), or 19c, clause (13).

(b) In the case of a shareholder of a corporation that is an S corporation, the current year allowance is reduced by the positive value of any net operating loss under section 172 of the Internal Revenue Code generated for the tax year of the addition and, if the net operating loss exceeds the addition for the tax year, the current year allowance is zero.

Subd. 2. Section 179 expensing carryover. For purposes of this section, the current year allowance determined under subdivision 1 is considered to be the last subtraction allowed in determining taxable income. If the amount allowed under subdivision 1 exceeds taxable income, then the excess is a section 179 expensing carryover to each of the ten succeeding taxable years. The entire amount of the section 179 expensing carryover is carried first to the earliest taxable year to which the section 179 expensing carryover may be carried and then to each successive year to which the section 179 expensing carryover may be carried.

Subd. 3. Section 179 expensing subtraction. A taxpayer is allowed a section 179 expensing subtraction from federal taxable income. The subtraction equals the sum of:

(1) the current year allowance determined under subdivision 1; and

(2) any section 179 expensing carryover from prior taxable years determined under subdivision 2.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3894

Sec. 38. Minnesota Statutes 2014, section 290.081, is amended to read:

290.081 INCOME OF NONRESIDENTS, RECIPROCITY.

(a) The compensation received for the performance of personal or professional services within this state by an individual whose residence, place of abode, and place customarily returned to at least once a month is in another state, shall be excluded from gross income to the extent such compensation is subject to an income tax imposed by the state of residence; provided that such state allows a similar exclusion of compensation received by residents of Minnesota for services performed therein.

(b) When it is deemed to be in the best interests of the people of this state, the commissioner may determine that the provisions of paragraph (a) shall not apply. As long as the provisions of paragraph (a) apply between Minnesota and Wisconsin, the provisions of paragraph (a) shall apply to any individual who is domiciled in Wisconsin.

(c) For the purposes of paragraph (a), whenever the Wisconsin tax on Minnesota residents which would have been paid Wisconsin without paragraph (a) exceeds the Minnesota tax on Wisconsin residents which would have been paid Minnesota without paragraph (a), or vice versa, then the state with the net revenue loss resulting from paragraph (a) shall receive from the other state the amount of such loss. This provision shall be effective for all years beginning after December 31, 1972. The data used for computing the loss to either state shall be determined on or before September 30 of the year following the close of the previous calendar year.

(d)(1) Interest is payable on all amounts calculated under paragraph (c) relating to taxable years beginning after December 31, 2000. Interest accrues from July 1 of the taxable year.

(2) The commissioner of revenue is authorized to enter into agreements with the state of Wisconsin specifying the reciprocity payment due dates, conditions constituting delinquency, interest rates, and a method for computing interest due, if the taxing official of the state of Wisconsin agrees to terms consistent with clause (3).

~~(3) For agreements entered into before October 1, 2014, the annual compensation required under paragraph (c) must equal at least the net revenue loss minus $1,000,000 per fiscal year.~~

~~(4) For agreements entered into after September 30, 2014,~~ (3) The annual compensation required under paragraph (c) must equal the net revenue loss per fiscal year.

~~(5)~~ For the purposes of ~~clauses (3) and (4)~~ this clause, "net revenue loss" means the difference between:

(i) the amount of Minnesota income taxes Minnesota forgoes by not taxing Wisconsin residents on income subject to reciprocity less the cost of providing refundable credits in excess of liability under this chapter to Wisconsin residents; and

(ii) the ~~credit Minnesota would have been required to give under section 290.06, subdivision 22, to Minnesota residents working in Wisconsin had there not been reciprocity~~ amount of Wisconsin income taxes Wisconsin forgoes by not taxing Minnesota residents on income subject to reciprocity.

(e) If an agreement cannot be reached as to the amount of the loss, the commissioner of revenue and the taxing official of the state of Wisconsin shall each appoint a member of a board of arbitration and these members shall appoint the third member of the board. The board shall select one of its members as chair. Such board may administer oaths, take testimony, subpoena witnesses, and require their attendance, require the production of books, papers and documents, and hold hearings at such places as are deemed necessary. The board shall then make a determination as to the amount to be paid the other state which determination shall be final and conclusive.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3895

(f) The commissioner may furnish copies of returns, reports, or other information to the taxing official of the state of Wisconsin, a member of the board of arbitration, or a consultant under joint contract with the states of Minnesota and Wisconsin for the purpose of making a determination as to the amount to be paid the other state under the provisions of this section. Prior to the release of any information under the provisions of this section, the person to whom the information is to be released shall sign an agreement which provides that the person will protect the confidentiality of the returns and information revealed thereby to the extent that it is protected under the laws of the state of Minnesota.

EFFECTIVE DATE. This section is effective the day following final enactment for taxable years beginning after December 31, 2014.

Sec. 39. Minnesota Statutes 2014, 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;

(ii) the medical expense deduction;

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

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

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

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

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

(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) to (9), and (11) to (14);

less the sum of the amounts determined under the following:

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

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3896

(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;

(4) amounts subtracted from federal taxable income as provided by section 290.01, subdivision 19b, clauses (6), (8) to (14), (16), ~~and~~ (21), (23), (24), (25), and (27); and

(5) the amount of the net operating loss allowed under section 290.095, subdivision 11, paragraph (c).

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.

(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) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income after subtracting the exemption amount determined under subdivision 3.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Sec. 40. Minnesota Statutes 2014, section 290.191, subdivision 5, is amended to read:

Subd. 5. Determination of sales factor. For purposes of this section, the following rules apply in determining the sales factor.

(a) The sales factor includes all sales, gross earnings, or receipts received in the ordinary course of the business, except that the following types of income are not included in the sales factor:

(1) interest;

(2) dividends;

(3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;

(4) sales of property used in the trade or business, except sales of leased property of a type which is regularly sold as well as leased; and

(5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue Code or sales of stock.

(b) Sales of tangible personal property are made within this state if the property is received by a purchaser at a point within this state, regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination of the property.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3897

(c) Tangible personal property delivered to a common or contract carrier or foreign vessel for delivery to a purchaser in another state or nation is a sale in that state or nation, regardless of f.o.b. point or other conditions of the sale.

(d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine, fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is licensed by a state or political subdivision to resell this property only within the state of ultimate destination, the sale is made in that state.

(e) Sales made by or through a corporation that is qualified as a domestic international sales corporation under section 992 of the Internal Revenue Code are not considered to have been made within this state.

(f) Sales, rents, royalties, and other income in connection with real property is attributed to the state in which the property is located.

(g) Receipts from the lease or rental of tangible personal property, including finance leases and true leases, must be attributed to this state if the property is located in this state and to other states if the property is not located in this state. Receipts from the lease or rental of moving property including, but not limited to, motor vehicles, rolling stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts factor to the extent that the property is used in this state. The extent of the use of moving property is determined as follows:

(1) A motor vehicle is used wholly in the state in which it is registered.

(2) The extent that rolling stock is used in this state is determined by multiplying the receipts from the lease or rental of the rolling stock by a fraction, the numerator of which is the miles traveled within this state by the leased or rented rolling stock and the denominator of which is the total miles traveled by the leased or rented rolling stock.

(3) The extent that an aircraft is used in this state is determined by multiplying the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft.

(4) The extent that a vessel, mobile equipment, or other mobile property is used in the state is determined by multiplying the receipts from the lease or rental of the property by a fraction, the numerator of which is the number of days during the taxable year the property was in this state and the denominator of which is the total days in the taxable year.

(h) Royalties and other income received for the use of or for the privilege of using intangible property, including patents, know-how, formulas, designs, processes, patterns, copyrights, trade names, service names, franchises, licenses, contracts, customer lists, or similar items, must be attributed to the state in which the property is used by the purchaser. If the property is used in more than one state, the royalties or other income must be apportioned to this state pro rata according to the portion of use in this state. If the portion of use in this state cannot be determined, the royalties or other income must be excluded from both the numerator and the denominator. Intangible property is used in this state if the purchaser uses the intangible property or the rights therein in the regular course of its business operations in this state, regardless of the location of the purchaser's customers.

(i) Sales of intangible property are made within the state in which the property is used by the purchaser. If the property is used in more than one state, the sales must be apportioned to this state pro rata according to the portion of use in this state. If the portion of use in this state cannot be determined, the sale must be excluded from both the numerator and the denominator of the sales factor. Intangible property is used in this state if the purchaser used the intangible property in the regular course of its business operations in this state.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3898

(j) Receipts from the performance of services must be attributed to the state where the services are received. For the purposes of this section, receipts from the performance of services provided to a corporation, partnership, or trust may only be attributed to a state where it has a fixed place of doing business. If the state where the services are received is not readily determinable or is a state where the corporation, partnership, or trust receiving the service does not have a fixed place of doing business, the services shall be deemed to be received at the location of the office of the customer from which the services were ordered in the regular course of the customer's trade or business. If the ordering office cannot be determined, the services shall be deemed to be received at the office of the customer to which the services are billed. Receipts received as compensation by a nonresident individual for the performance of services as a member of a board of directors, or similar body, are attributed to Minnesota based on the ratio of the time spent in Minnesota providing services as a member of that board divided by the time spent everywhere providing services as a member of that board.

(k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts from management, distribution, or administrative services performed by a corporation or trust for a fund of a corporation or trust regulated under United States Code, title 15, sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of the fund resides. Under this paragraph, receipts for services attributed to shareholders are determined on the basis of the ratio of: (1) the average of the outstanding shares in the fund owned by shareholders residing within Minnesota at the beginning and end of each year; and (2) the average of the total number of outstanding shares in the fund at the beginning and end of each year. Residence of the shareholder, in the case of an individual, is determined by the mailing address furnished by the shareholder to the fund. Residence of the shareholder, when the shares are held by an insurance company as a depositor for the insurance company policyholders, is the mailing address of the policyholders. In the case of an insurance company holding the shares as a depositor for the insurance company policyholders, if the mailing address of the policyholders cannot be determined by the taxpayer, the receipts must be excluded from both the numerator and denominator. Residence of other shareholders is the mailing address of the shareholder.

EFFECTIVE DATE. This section is effective the day following final enactment and applies retroactively to all open taxable years and returns.

Sec. 41. Minnesota Statutes 2014, section 290A.03, subdivision 15, as amended by Laws 2015, chapter 1, section 4, is amended to read:

Subd. 15. Internal Revenue Code. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through ~~December 31, 2014~~ April 1, 2015.

EFFECTIVE DATE. This section is effective for property tax refunds based on property taxes payable after December 31, 2015, and rent paid after December 31, 2014.

Sec. 42. ADDITIONAL PERSONAL AND DEPENDENT EXEMPTION AMOUNT.

(a) An individual subject to tax under Minnesota Statutes, section 290.06, subdivision 2c, is allowed a subtraction from federal taxable income, in addition to the subtractions under Minnesota Statutes, section 290.01, subdivision 19b, equal to the number of personal exemptions allowed under sections 151(b) and (c) of the Internal Revenue Code, multiplied by one-quarter of the dollar amount for personal exemptions under sections 151(d)(1) and (2) of the Internal Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal Revenue Code.

(b) The additional exemption in paragraph (a) must be added to the disallowed personal exemption amount under Minnesota Statutes, section 290.01, subdivision 19a, clause (16), item (i).

(c) The additional exemption amount under this section is a modification to net income under Minnesota Statutes, section 290.01, subdivision 19.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3899

Sec. 43. CREDIT FOR JOB TRAINING CENTER REHABILITATION.

(a) A taxpayer is allowed a credit against the tax due under Minnesota Statutes, chapter 290, if the taxpayer rehabilitated and placed in service in calendar year 2015 a certified historic structure that once served as a library and is located in a city of the first class. The credit equals 20 percent of the qualified rehabilitation expenditures for the project.

(b) The taxpayer must notify the commissioner within six months of when the project is placed in service, and must provide documentation that the project meets the requirements of this section, in the form and manner prescribed by the commissioner. The commissioner must issue a credit certificate to the developer upon verifying that the project has been placed in service and meets the requirements of this section.

(c) The recipient of a credit certificate may assign the certificate to another taxpayer, including an insurance company, which is then allowed the credit under this section. An assignment is not valid unless the assignee notifies the commissioner within 30 days of the date the assignment is made. The commissioner shall prescribe the forms necessary for notifying the commissioner of the assignment of a credit certificate and for claiming a credit by assignment. In lieu of the credit under paragraph (a), an insurance company that is assigned a credit under this paragraph may claim the credit against the insurance premiums tax imposed under chapter 297I.

(d) Credits granted to a partnership, a limited liability company taxed as a partnership, S corporation, or multiple owners of property are passed through to the partners, members, shareholders, or owners, respectively, pro rata to each partner, member, shareholder, or owner based on their share of the entity's assets or as specially allocated in their organizational documents or any other executed agreement, as of the last day of the taxable year.

(e) If the amount of credit that a taxpayer is eligible to receive under this section exceeds the taxpayer's liability for tax under Minnesota Statutes, chapter 290, the commissioner shall refund the excess to the taxpayer. If the amount of credit assigned to an insurance company exceeds the liability for tax under chapter 297I, the commissioner shall refund the excess to the insurance company. An amount sufficient to pay the refunds authorized under this section is appropriated to the commissioner from the general fund.

(f) For purposes of this section, the following terms have the meanings given:

(1) "certified historic structure" has the meaning given in section 47(c)(3)(A) of the Internal Revenue Code;

(2) "commissioner" means the commissioner of revenue;

(3) "qualified rehabilitation expenditures" means amounts chargeable to capital accounts but does not include the cost of acquiring the structure or enlarging the structure; and

(4) "project" means rehabilitation of a certified historic structure that is located in Minnesota.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014, and before January 1, 2016, for projects placed in service in calendar year 2015.

Sec. 44. REPEALER.

Minnesota Statutes 2014, section 290.067, subdivision 2a, is repealed.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2014.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3900

ARTICLE 2

PROPERTY TAXPAYER EMPOWERMENT

Section 1. Minnesota Statutes 2014, section 123B.63, subdivision 3, is amended to read:

Subd. 3. Capital project levy referendum. (a) A district may levy the local tax rate approved by a majority of the electors voting on the question to provide funds for an approved project. The election must take place no more than five years before the estimated date of commencement of the project. The referendum ~~must~~ may be ~~held on a date set by~~ called by the board and, except as provided in paragraph (g), must be held on the first Tuesday after the first Monday in November in either an even-numbered or odd-numbered year. A district must meet the requirements of section 123B.71 for projects funded under this section. If a review and comment is required under section 123B.71, subdivision 8, a referendum for a project not receiving a positive review and comment by the commissioner must be approved by at least 60 percent of the voters at the election.

(b) ~~The~~ A referendum ~~may be~~ called ~~by the school board and~~ under this subdivision may be held:

(1) separately, before an election for the issuance of obligations for the project under chapter 475; or

(2) in conjunction with an election for the issuance of obligations for the project under chapter 475; or

(3) notwithstanding section 475.59, as a conjunctive question authorizing both the capital project levy and the issuance of obligations for the project under chapter 475. Any obligations authorized for a project may be issued within five years of the date of the election.

(c) The ballot must provide a general description of the proposed project, state the estimated total cost of the project, state whether the project has received a positive or negative review and comment from the commissioner, state the maximum amount of the capital project levy as a percentage of net tax capacity, state the amount that will be raised by that local tax rate in the first year it is to be levied, and state the maximum number of years that the levy authorization will apply.

The ballot must contain a textual portion with the information required in this section and a question stating substantially the following:

"Shall the capital project levy proposed by the board of .......... School District No. .......... be approved?"

If approved, the amount provided by the approved local tax rate applied to the net tax capacity for the year preceding the year the levy is certified may be certified for the number of years, not to exceed ten, approved.

(d) If the district proposes a new capital project to begin at the time the existing capital project expires and at the same maximum tax rate, the general description on the ballot may state that the capital project levy is being renewed and that the tax rate is not being increased from the previous year's rate. An election to renew authority under this paragraph may be called at any time that is otherwise authorized by this subdivision. The ballot notice required under section 275.60 may be modified to read:

"BY VOTING YES ON THIS BALLOT QUESTION, YOU ARE VOTING TO RENEW AN EXISTING CAPITAL PROJECTS REFERENDUM THAT IS SCHEDULED TO EXPIRE."

(e) In the event a conjunctive question proposes to authorize both the capital project levy and the issuance of obligations for the project, appropriate language authorizing the issuance of obligations must also be included in the question.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3901

(f) The district must notify the commissioner of the results of the referendum.

(g) Notwithstanding paragraph (a), a referendum to levy the amount needed to finance a district's response to a disaster or emergency may be held on a date set by the board. "Disaster" means a situation that creates an actual or imminent serious threat to the health and safety of persons or a situation that has resulted or is likely to result in catastrophic loss to property or the environment. "Emergency" means an unforeseen combination of circumstances that calls for immediate action to prevent a disaster, identified in the referendum, from developing or occurring.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 2. Minnesota Statutes 2014, section 126C.17, subdivision 9, is amended to read:

Subd. 9. Referendum revenue. (a) The revenue authorized by section 126C.10, subdivision 1, may be increased in the amount approved by the voters of the district at a referendum called for the purpose. The referendum may be called by the board. The referendum must be conducted one or two calendar years before the increased levy authority, if approved, first becomes payable. Only one election to approve an increase may be held in a calendar year. Unless the referendum is conducted by mail under subdivision 11, paragraph (a), the referendum must be held on the first Tuesday after the first Monday in November. The ballot must state the maximum amount of the increased revenue per adjusted pupil unit. The ballot may state a schedule, determined by the board, of increased revenue per adjusted pupil unit that differs from year to year over the number of years for which the increased revenue is authorized or may state that the amount shall increase annually by the rate of inflation. The ballot must state the cumulative amount per pupil of any local optional revenue, board-approved referendum authority, and previous voter-approved referendum authority, if any, that the board expects to certify for the next school year. For this purpose, the rate of inflation shall be the annual inflationary increase calculated under subdivision 2, paragraph (b). The ballot may state that existing referendum levy authority is expiring. In this case, the ballot may also compare the proposed levy authority to the existing expiring levy authority, and express the proposed increase as the amount, if any, over the expiring referendum levy authority. The ballot must designate the specific number of years, not to exceed ten, for which the referendum authorization applies. The ballot, including a ballot on the question to revoke or reduce the increased revenue amount under paragraph (c), must abbreviate the term "per adjusted pupil unit" as "per pupil." The notice required under section 275.60 may be modified to read, in cases of renewing existing levies at the same amount per pupil as in the previous year:

"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING TO EXTEND AN EXISTING PROPERTY TAX REFERENDUM THAT IS SCHEDULED TO EXPIRE."

The ballot may contain a textual portion with the information required in this subdivision and a question stating substantially the following:

"Shall the increase in the revenue proposed by (petition to) the board of ........., School District No. .., be approved?"

If approved, an amount equal to the approved revenue per adjusted pupil unit times the adjusted pupil units for the school year beginning in the year after the levy is certified shall be authorized for certification for the number of years approved, if applicable, or until revoked or reduced by the voters of the district at a subsequent referendum.

(b) The board must prepare and deliver by first class mail at least 15 days but no more than 30 days before the day of the referendum to each taxpayer a notice of the referendum and the proposed revenue increase. The board need not mail more than one notice to any taxpayer. For the purpose of giving mailed notice under this subdivision, owners must be those shown to be owners on the records of the county auditor or, in any county where tax statements are mailed by the county treasurer, on the records of the county treasurer. Every property owner whose

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3902

name does not appear on the records of the county auditor or the county treasurer is deemed to have waived this mailed notice unless the owner has requested in writing that the county auditor or county treasurer, as the case may be, include the name on the records for this purpose. The notice must project the anticipated amount of tax increase in annual dollars for typical residential homesteads, agricultural homesteads, apartments, and commercial-industrial property within the school district.

The notice must state the cumulative and individual amounts per pupil of any local optional revenue, board‑approved referendum authority, and voter-approved referendum authority, if any, that the board expects to certify for the next school year.

The notice for a referendum may state that an existing referendum levy is expiring and project the anticipated amount of increase over the existing referendum levy in the first year, if any, in annual dollars for typical residential homesteads, agricultural homesteads, apartments, and commercial-industrial property within the district.

The notice must include the following statement: "Passage of this referendum will result in an increase in your property taxes." However, in cases of renewing existing levies, the notice may include the following statement: "Passage of this referendum extends an existing operating referendum at the same amount per pupil as in the previous year."

(c) A referendum on the question of revoking or reducing the increased revenue amount authorized pursuant to paragraph (a) may be called by the board. A referendum to revoke or reduce the revenue amount must state the amount per adjusted pupil unit by which the authority is to be reduced. Revenue authority approved by the voters of the district pursuant to paragraph (a) must be available to the school district at least once before it is subject to a referendum on its revocation or reduction for subsequent years. Only one revocation or reduction referendum may be held to revoke or reduce referendum revenue for any specific year and for years thereafter.

(d) The approval of 50 percent plus one of those voting on the question is required to pass a referendum authorized by this subdivision.

(e) At least 15 days before the day of the referendum, the district must submit a copy of the notice required under paragraph (b) to the commissioner and to the county auditor of each county in which the district is located. Within 15 days after the results of the referendum have been certified by the board, or in the case of a recount, the certification of the results of the recount by the canvassing board, the district must notify the commissioner of the results of the referendum.

Sec. 3. Minnesota Statutes 2014, section 205.10, subdivision 1, is amended to read:

Subdivision 1. Questions. Special elections may be held in a city or town on a question on which the voters are authorized by law or charter to pass judgment. A special election on a question may only be held on the first Tuesday after the first Monday in November in either an even-numbered or odd-numbered year. A special election may be ordered by the governing body of the municipality on its own motion or, on a question that has not been submitted to the voters in an election within the previous six months, upon a petition signed by a number of voters equal to 20 percent of the votes cast at the last municipal general election. A question is carried only with the majority in its favor required by law or charter. The election officials for a special election shall be the same as for the most recent municipal general election unless changed according to law. Otherwise special elections shall be conducted and the returns made in the manner provided for the municipal general election.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3903

Sec. 4. Minnesota Statutes 2014, section 205A.05, subdivision 1, is amended to read:

Subdivision 1. Questions. ~~(a)~~ Special elections must be held for a school district on a question on which the voters are authorized by law to pass judgment. The special election on a question may only be held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year. The school board may on its own motion call a special election to vote on any matter requiring approval of the voters of a district. Upon petition filed with the school board of 50 or more voters of the school district or five percent of the number of voters voting at the preceding school district general election, whichever is greater, the school board shall by resolution call a special election to vote on any matter requiring approval of the voters of a district. A question is carried only with the majority in its favor required by law. The election officials for a special election are the same as for the most recent school district general election unless changed according to law. Otherwise, special elections must be conducted and the returns made in the manner provided for the school district general election.

~~(b) A special election may not be held:~~

~~(1) during the 56 days before and the 56 days after a regularly scheduled primary or general election conducted wholly or partially within the school district;~~

~~(2) on the date of a regularly scheduled town election in March conducted wholly or partially within the school district; or~~

~~(3) during the 30 days before or the 30 days after a regularly scheduled town election in March conducted wholly or partially within the school district.~~

(c) Notwithstanding any other law to the contrary, the time period in which a special election must be conducted under any other law may be extended by the school board to conform with the requirements of this subdivision.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 5. Minnesota Statutes 2014, section 216B.46, is amended to read:

216B.46 MUNICIPAL ACQUISITION PROCEDURES; NOTICE; ELECTION.

Any municipality which desires to acquire the property of a public utility as authorized under the provisions of section 216B.45 may determine to do so by resolution of the governing body of the municipality taken after a public hearing of which at least 30 days' published notice shall be given as determined by the governing body. The determination shall become effective when ratified by a majority of the qualified electors voting on the question at a special election to be held for that purpose~~, not less than 60 nor more than 120 days after the resolution of the governing body of the municipality~~ on the first Tuesday after the first Monday in November in either an even‑numbered or odd-numbered year.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 6. Minnesota Statutes 2014, section 237.19, is amended to read:

237.19 MUNICIPAL TELECOMMUNICATIONS SERVICES.

Any municipality shall have the right to own and operate a telephone exchange within its own borders, subject to the provisions of this chapter. It may construct such plant, or purchase an existing plant by agreement with the owner, or where it cannot agree with the owner on price, it may acquire an existing plant by condemnation, as

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3904

hereinafter provided, but in no case shall a municipality construct or purchase such a plant or proceed to acquire an existing plant by condemnation until such action by it is authorized by a majority of the electors voting upon the proposition at ~~a general~~ an election ~~or a special election called for that purpose~~ held on the first Tuesday after the first Monday in November in either an even-numbered or odd-numbered year, and if the proposal is to construct a new exchange where an exchange already exists, it shall not be authorized to do so unless 65 percent of those voting thereon vote in favor of the undertaking. A municipality that owns and operates a telephone exchange may enter into a joint venture as a partner or shareholder with a telecommunications organization to provide telecommunications services within its service area.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 7. Minnesota Statutes 2014, section 275.065, subdivision 3, is amended to read:

Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare and the county treasurer shall deliver after November 10 and on or before November 24 each year, by first class mail to each taxpayer at the address listed on the county's current year's assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer, the treasurer may send the notice in electronic form or by electronic mail instead of on paper or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes each taxing authority proposes to collect for taxes payable the following year. In the case of a town, or in the case of the state general tax, the final tax amount will be its proposed tax. The notice must clearly state for each city that has a population over 500, county, school district, regional library authority established under section 134.201, and metropolitan taxing districts as defined in paragraph (i), the time and place of a meeting for each taxing authority in which the budget and levy will be discussed and public input allowed, prior to the final budget and levy determination. The taxing authorities must provide the county auditor with the information to be included in the notice on or before the time it certifies its proposed levy under subdivision 1. The public must be allowed to speak at that meeting, which must occur after November 24 and must not be held before 6:00 p.m. It must provide a telephone number for the taxing authority that taxpayers may call if they have questions related to the notice and an address where comments will be received by mail, except that no notice required under this section shall be interpreted as requiring the printing of a personal telephone number or address as the contact information for a taxing authority. If a taxing authority does not maintain public offices where telephone calls can be received by the authority, the authority may inform the county of the lack of a public telephone number and the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used for computing property taxes payable in the following year and for taxes payable in the current year as each appears in the records of the county assessor on November 1 of the current year; and, in the case of residential property, whether the property is classified as homestead or nonhomestead. The notice must clearly inform taxpayers of the years to which the market values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general tax, agricultural homestead credit under section 273.1384, voter approved school levy, other local school levy, and the sum of the special taxing districts, and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3905

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement district as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed tax unless the town changes its levy at a special town meeting under section 365.52. If a school district has certified under section 126C.17, subdivision 9, that a referendum will be held in the school district at the November general election, the county auditor must note next to the school district's proposed amount that a referendum is pending and that, if approved by the voters, the tax amount may be higher than shown on the notice. In the case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul Library Agency must be listed separately from the remaining amount of the city's levy. In the case of Ramsey County, any amount levied under section 134.07 may be listed separately from the remaining amount of the county's levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies, the proposed tax levy on the captured value or the proposed tax levy on the tax capacity subject to the areawide tax must each be stated separately and not included in the sum of the special taxing districts; ~~and~~

(3) the increase or decrease between the total taxes payable in the current year and the total proposed taxes, expressed as a percentage.; and

(4) a statement at the top of the notice stating the following: if a county or city's proposed levy for next year is greater than its actual levy for the current year, the voters may have the right to petition for a referendum on next year's levy certification, according to section 275.80, provided that the final levy that the local government certifies in December of this year is also greater than its levy for the current year.

For purposes of this section, the amount of the tax on homesteads qualifying under the senior citizens' property tax deferral program under chapter 290B is the total amount of property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include the following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified, including bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value reductions for contamination.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3906

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the county treasurer to deliver the notice as required in this section does not invalidate the proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as nonhomestead, and satisfactory documentation is provided to the county assessor by the applicable deadline, and the property qualifies for the homestead classification in that assessment year, the assessor shall reclassify the property to homestead for taxes payable in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter, or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within three days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to which the notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing districts" means the following taxing districts in the seven-county metropolitan area that levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent of the county board, include supplemental information with the statement of proposed property taxes about the impact of state aid increases or decreases on property tax increases or decreases and on the level of services provided in the affected jurisdiction. This supplemental information may include information for the following year, the current year, and for as many consecutive preceding years as deemed appropriate by the governing body of the county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and local government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services that the governing body of the county, city, or school district may deem appropriate to include.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3907

The information may be presented using tables, written narrative, and graphic representations and may contain instruction toward further sources of information or opportunity for comment.

EFFECTIVE DATE. This section is effective for taxes payable in 2016 and thereafter.

Sec. 8. Minnesota Statutes 2014, section 275.07, subdivision 1, is amended to read:

Subdivision 1. Certification of levy. (a) Except as provided under paragraph (b), the taxes voted by cities, counties, school districts, and special districts shall be certified by the proper authorities to the county auditor on or before five working days after December 20 in each year. A town must certify the levy adopted by the town board to the county auditor by September 15 each year. If the town board modifies the levy at a special town meeting after September 15, the town board must recertify its levy to the county auditor on or before five working days after December 20. If a city or county levy is subject to a referendum under section 275.80 and the referendum was approved by the voters, the maximum levy certified under this section is the proposed levy certified under section 275.065. If the referendum was not approved, the maximum amount of levy that a city or county may approve under this section is the maximum alternative levy allowed in section 275.80, subdivision 2. The city or county may choose to certify a levy less than the allowed maximum amount. If a city, town, county, school district, or special district fails to certify its levy by that date, its levy shall be the amount levied by it for the preceding year.

(b)(i) The taxes voted by counties under sections 103B.241, 103B.245, and 103B.251 shall be separately certified by the county to the county auditor on or before five working days after December 20 in each year. The taxes certified shall not be reduced by the county auditor by the aid received under section 273.1398, subdivision 3. If a county fails to certify its levy by that date, its levy shall be the amount levied by it for the preceding year.

(ii) For purposes of the proposed property tax notice under section 275.065 and the property tax statement under section 276.04, for the first year in which the county implements the provisions of this paragraph, the county auditor shall reduce the county's levy for the preceding year to reflect any amount levied for water management purposes under clause (i) included in the county's levy.

EFFECTIVE DATE. This section is effective for taxes payable in 2016 and thereafter.

Sec. 9. Minnesota Statutes 2014, section 275.60, is amended to read:

275.60 LEVY OR BOND REFERENDUM; BALLOT NOTICE.

(a) Notwithstanding any general or special law or any charter provisions, but subject to section 126C.17, subdivision 9, any question submitted to the voters by any local governmental subdivision at ~~a general or special~~ an election after ~~June 8, 1995~~ June 30, 2015, authorizing a property tax levy or tax rate increase, including the issuance of debt obligations payable in whole or in part from property taxes, must include on the ballot the following notice in boldface type:

"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING FOR A PROPERTY TAX INCREASE."

(b) For purposes of this section and section 275.61, "local governmental subdivision" includes counties, home rule and statutory cities, towns, school districts, and all special taxing districts. This statement is in addition to any general or special laws or any charter provisions that govern the contents of a ballot question and, in the case of a question on the issuance of debt obligations, may be supplemented by a description of revenues pledged to payment of the obligations that are intended as the primary source of payment.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3908

(c) An election under this section must be held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year. This paragraph does not apply to an election on levying a tax or issuing debt obligations to finance the local government's response to a disaster or emergency. An election for these purposes may be held on a date set by the governing body. "Disaster" means a situation that creates an actual or imminent serious threat to the health and safety of persons or a situation that has resulted or is likely to result in catastrophic loss to property or the environment. "Emergency" means an unforeseen combination of circumstances that calls for immediate action to prevent a disaster, identified in the referendum, from developing or occurring.

~~(c)~~ (d) This section does not apply to a school district bond election if the debt service payments are to be made entirely from transfers of revenue from the capital fund to the debt service fund.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 10. [275.80] LEVY INCREASE; REVERSE REFERENDUM AUTHORIZED.

Subdivision 1. Citation. This section shall be known as the "Property Tax Payers' Empowerment Act."

Subd. 2. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "General levy" means the total levy certified under section 275.07 by the local governmental unit excluding any levy that was approved by the voters at a general or special election.

(c) "Local governmental unit" means a county or a statutory or home rule charter city with a population of 500 or greater.

(d) "Maximum alternative levy" for taxes levied in a current year by a local governmental unit means the sum of (i) its nondebt levy certified two years previous to the current year, and (ii) the amount of its proposed levy for the current year levied for the purposes listed in section 275.70, subdivision 5, clauses (1) to (5).

(e) "Nondebt levy" means the total levy certified under section 275.07 by the local governmental unit, minus any amount levied for the purposes listed in section 275.70, subdivision 5, clauses (1) to (5).

Subd. 3. Levy increase; reverse referendum authority. If the certified general levy exceeds the general levy in the previous year, the voters may petition for a referendum on the levy to be certified for the following year. The county auditor must publish information on the right to petition for a referendum as provided in section 276.04, subdivisions 1 and 2. If by June 30, a petition signed by the voters equal in number to ten percent of the votes cast in the last general election requesting a vote on the levy is filed with the county auditor, a question on the levy to be certified for the current year must be placed on the ballot at either the general election or at a special election held on the first Tuesday after the first Monday in November of the current calendar year.

Subd. 4. Prohibition against new debt before the election. Notwithstanding any other provision of law, ordinance, or local charter provision, a county or city must not issue any new debt or obligation from the time the petition for referendum is filed with the county auditor under subdivision 3 until the day after the referendum required under this section is held, except as allowed in this subdivision. Refunding bonds and bonds that have already received voter approval are exempt from the prohibition in this subdivision. For purposes of this subdivision, "obligation" has the meaning given in section 475.51, subdivision 3.

Subd. 5. Ballot question; consequence of the vote. (a) The question submitted to the voters as required under subdivision 3 shall take the following form:

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3909

"The governing body of ..... has imposed the following property tax levy in the last two years and is proposing the following maximum levy increase for the coming year:

(previous payable year)	(current payable year)	(coming payable year)
Total levy	Total levy	Maximum proposed levy
$.......	$.......	$.......

Shall the governing body of ..... be allowed to impose the maximum proposed levy listed above?

	Yes…...
	No……

If the majority of votes cast are "no," its maximum allowed property tax levy for the coming year will be reduced to its maximum alternative levy of ......."

(b) If a city is subject to this provision, it will provide the county auditor with information on its proposed levy by September 30 necessary to calculate the maximum alternative levy under subdivision 2.

(c) If the majority of votes cast on this question are in the affirmative, the levy certified by the local governmental unit under section 275.07 must be less than or equal to its proposed levy under section 275.065. If the question does not receive sufficient affirmative votes, the levy amount that the local governmental unit certifies under section 275.07 in the current year must be less than or equal to its maximum alternative levy as defined in subdivision 2.

EFFECTIVE DATE. This section is effective for taxes payable in 2016 and thereafter.

Sec. 11. Minnesota Statutes 2014, section 276.04, subdivision 1, is amended to read:

Subdivision 1. Auditor to publish rates. On receiving the tax lists from the county auditor, the county treasurer shall, if directed by the county board, give three weeks' published notice in a newspaper specifying the rates of taxation for all general purposes and the amounts raised for each specific purpose. If a city or county is subject to a petition of the voters due to a general levy increase as provided in section 275.80, the published notice must also include the general levy for the current year and the previous year for that city or county along with the statement in the following form:

"Because the governing body of ...... increased its nonvoter approved levy in the current year, the voters in that jurisdiction have the right to petition for a referendum under section 275.80 on that jurisdiction's levy amount. To invoke the referendum, a petition signed by voters equal to ten percent of the votes cast in the last general election must be filed with the county auditor by June 30 of the current year."

EFFECTIVE DATE. This section is effective for taxes payable in 2016 and thereafter.

Sec. 12. Minnesota Statutes 2014, section 276.04, subdivision 2, is amended to read:

Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the printing of the tax statements. The commissioner of revenue shall prescribe the form of the property tax statement and its contents. The tax statement must not state or imply that property tax credits are paid by the state of Minnesota. The statement must contain a tabulated statement of the dollar amount due to each taxing authority and the amount of the state tax from the parcel of real property for which a particular tax statement is prepared. The dollar amounts attributable to the county, the state tax, the voter approved school tax, the other local school tax, the township or municipality, and the total of the metropolitan special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must be separately

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3910

stated. The amounts due all other special taxing districts, if any, may be aggregated except that any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly under the appropriate county's levy. If the county levy under this paragraph includes an amount for a lake improvement district as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose must be separately stated from the remaining county levy amount. In the case of Ramsey County, if the county levy under this paragraph includes an amount for public library service under section 134.07, the amount attributable for that purpose may be separated from the remaining county levy amount. The amount of the tax on homesteads qualifying under the senior citizens' property tax deferral program under chapter 290B is the total amount of property tax before subtraction of the deferred property tax amount. The amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar amount of any special assessments, may be rounded to the nearest even whole dollar. For purposes of this section whole odd-numbered dollars may be adjusted to the next higher even‑numbered dollar. The amount of market value excluded under section 273.11, subdivision 16, if any, must also be listed on the tax statement.

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

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

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

(2) the property's homestead market value exclusion under section 273.13, subdivision 35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for homestead agricultural properties, the credit under section 273.1384;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received under section 273.135 must be separately stated and identified as "taconite tax relief"; and

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

(d) If a city or county is subject to a petition of the voters due to a general levy increase as provided in section 275.80, the tax statement must also include the general levy for the current year and the previous year for that city or county along with the following statement:

"Because the governing body of ....... increased its nonvoter approved levy in the current year, the voters in that jurisdiction have the right to petition for a referendum on that jurisdiction's levy amount under section 275.80. To invoke the referendum, a petition signed by voters equal to ten percent of the votes cast in the last general election on this issue must be filed with the county auditor by June 30 of the current year."

(e) If the county uses envelopes for mailing property tax statements and if the county agrees, a taxing district may include a notice with the property tax statement notifying taxpayers when the taxing district will begin its budget deliberations for the current year, and encouraging taxpayers to attend the hearings. If the county allows

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3911

notices to be included in the envelope containing the property tax statement, and if more than one taxing district relative to a given property decides to include a notice with the tax statement, the county treasurer or auditor must coordinate the process and may combine the information on a single announcement.

EFFECTIVE DATE. This section is effective for taxes payable in 2016 and thereafter.

Sec. 13. Minnesota Statutes 2014, section 412.221, subdivision 2, is amended to read:

Subd. 2. Contracts. The council shall have power to make such contracts as may be deemed necessary or desirable to make effective any power possessed by the council. The city may purchase personal property through a conditional sales contract and real property through a contract for deed under which contracts the seller is confined to the remedy of recovery of the property in case of nonpayment of all or part of the purchase price, which shall be payable over a period of not to exceed five years. When the contract price of property to be purchased by contract for deed or conditional sales contract exceeds 0.24177 percent of the estimated market value of the city, the city may not enter into such a contract for at least ten days after publication in the official newspaper of a council resolution determining to purchase property by such a contract; and, if before the end of that time a petition asking for an election on the proposition signed by voters equal to ten percent of the number of voters at the last regular city election is filed with the clerk, the city may not enter into such a contract until the proposition has been approved by a majority of the votes cast on the question at ~~a regular or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 14. Minnesota Statutes 2014, section 412.301, is amended to read:

412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.

(a) The council may issue certificates of indebtedness or capital notes subject to the city debt limits to purchase capital equipment.

(b) For purposes of this section, "capital equipment" means:

(1) public safety equipment, ambulance and other medical equipment, road construction and maintenance equipment, and other capital equipment; and

(2) computer hardware and software, whether bundled with machinery or equipment or unbundled, together with application development services and training related to the use of the computer hardware or software.

(c) The equipment or software must have an expected useful life at least as long as the terms of the certificates or notes.

(d) Such certificates or notes shall be payable in not more than ten years and shall be issued on such terms and in such manner as the council may determine.

(e) If the amount of the certificates or notes to be issued to finance any such purchase exceeds 0.25 percent of the estimated market value of taxable property in the city, they shall not be issued for at least ten days after publication in the official newspaper of a council resolution determining to issue them; and if before the end of that time, a petition asking for an election on the proposition signed by voters equal to ten percent of the number of voters at the last regular municipal election is filed with the clerk, such certificates or notes shall not be issued until the

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3912

proposition of their issuance has been approved by a majority of the votes cast on the question at ~~a regular or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd‑numbered year.

(f) A tax levy shall be made for the payment of the principal and interest on such certificates or notes, in accordance with section 475.61, as in the case of bonds.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 15. [416.17] VOTER APPROVAL REQUIRED; LEASES OF PUBLIC BUILDINGS.

Subdivision 1. Reverse referendum; certain leases. (a) Before executing a qualified lease, a municipality must publish notice of its intention to execute the lease and the date and time of a hearing to obtain public comment on the matter. The notice must be published in the official newspaper of the municipality or in a newspaper of general circulation in the municipality, must be placed prominently on any official municipality Web site, and must include a statement of the amount of the obligations to be issued by the authority and the maximum amount of annual rent to be paid by the municipality under the qualified lease. The notice must be published at least 14, but not more than 28, days before the date of the hearing.

(b) A municipality may enter a lease subject to paragraph (a) only upon obtaining the approval of a majority of the voters voting on the question of issuing the obligations, if a petition requesting a vote on the issuance is signed by voters equal to five percent of the votes cast in the municipality in the last general election and is filed with the county auditor within 30 days after the public hearing.

Subd. 2. Definitions. (a) For purposes of this section, the following terms have the meanings given them.

(b) "Authority" includes any of the following governmental units, the boundaries of which include all or part of the geographic area of the municipality:

(1) a housing and redevelopment authority, as defined in section 469.002;

(2) a port authority, as defined in section 469.048;

(3) an economic development authority, as defined in section 469.090; or

(4) an entity established or exercising powers under a special law with powers similar to those of an entity described in clauses (1) to (3).

(c) "Municipality" means a statutory or home rule charter city, a county, or a town described in section 368.01, but does not include a city of the first class, however organized, as defined in section 410.01.

(d) "Qualified lease" means a lease for use of public land, all or part of a public building, or other public facilities consisting of real property for a term of three or more years as a lessee if the property to be leased to the municipality was acquired or improved with the proceeds of obligations, as defined in section 475.51, subdivision 3, issued by an authority.

Sec. 16. Minnesota Statutes 2014, section 426.19, subdivision 2, is amended to read:

Subd. 2. Referendum in certain cases. Before the pledge of any such revenues to the payment of any such bonds, warrants or certificates of indebtedness, except bonds, warrants or certificates of indebtedness to construct, reconstruct, enlarge or equip a municipal liquor store shall be made, the governing body shall submit to the voters of

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3913

the city the question of whether such revenues shall be so pledged and such pledge shall not be binding on the city until it shall have been approved by a majority of the voters voting on the question at ~~either a general~~ an election ~~or special election called for that purpose~~ held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year. No election shall be required for pledge of such revenues for payment of bonds, warrants or certificates of indebtedness to construct, reconstruct, enlarge or equip a municipal liquor store.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 17. Minnesota Statutes 2014, section 447.045, subdivision 2, is amended to read:

Subd. 2. Statutory city; on-sale and off-sale store. If the voters of a statutory city operating an on-sale and off-sale municipal liquor store, at ~~a general or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year, vote in favor of contributing from its liquor dispensary fund toward the construction of a community hospital, the city council may appropriate not more than $60,000 from the fund to any incorporated nonprofit hospital association to build a community hospital in the statutory city. The hospital must be governed by a board including two or more members of the statutory city council and be open to all residents of the statutory city on equal terms. This appropriation must not exceed one-half the total cost of construction of the hospital. The council must not appropriate the money unless the average net earnings of the on-sale and off-sale municipal liquor store have been at least $10,000 for the last five completed fiscal years before the date of the appropriation.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 18. Minnesota Statutes 2014, section 447.045, subdivision 3, is amended to read:

Subd. 3. Statutory city; off-sale or on- and off-sale store. (a) If a statutory city operates an off-sale, or an on- and off-sale municipal liquor store it may provide for a vote at ~~a general or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year on the question of contributing from the city liquor dispensary fund to build, maintain, and operate a community hospital. If the vote is in favor, the city council may appropriate money from the fund to an incorporated hospital association for a period of four years. The appropriation must be from the net profits or proceeds of the municipal liquor store. It must not exceed $4,000 a year for hospital construction and maintenance or $1,000 a year for operation. The hospital must be open to all residents of the community on equal terms.

(b) The council must not appropriate the money unless the average net earnings of the off-sale, or on- and off‑sale municipal liquor store have been at least $8,000 for the last two completed years before the date of the appropriation.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 19. Minnesota Statutes 2014, section 447.045, subdivision 4, is amended to read:

Subd. 4. Fourth class city operating store. If a city of the fourth class operates a municipal liquor store, it may provide for a vote at ~~a general or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year on the question of contributing from the profit in the city liquor dispensary fund to build, equip, and maintain a community hospital within the city limits. If the vote is in favor, the city council may appropriate not more than $200,000 from profits in the fund for the purpose. The hospital must be open to all residents of the city on equal terms.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3914

The city may issue certificates of indebtedness in anticipation of and payable only from profits from the operation of municipal liquor stores.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 20. Minnesota Statutes 2014, section 447.045, subdivision 6, is amended to read:

Subd. 6. Statutory city; fourth class. If a fourth class statutory city operates a municipal liquor store, it may provide for a vote at ~~a general or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year on the question of contributing from the city liquor dispensary fund not more than $15,000 a year for five years to build and maintain a community hospital. If the vote is in favor the council may appropriate the money from the fund to an incorporated community hospital association in the city.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 21. Minnesota Statutes 2014, section 447.045, subdivision 7, is amended to read:

Subd. 7. Statutory city; any store. If a statutory city operates a municipal liquor store, it may provide for a vote at ~~a general or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year on the question of contributing from the statutory city liquor dispensary fund toward the acquisition, construction, improvement, maintenance, and operation of a community hospital. If the vote is in favor, the council may appropriate money from time to time out of the net profits or proceeds of the municipal liquor store to an incorporated nonprofit hospital association in the statutory city. The hospital association must be governed by a board of directors elected by donors of $50 or more, who each have one vote. The hospital must be open to all residents of the community on equal terms.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 22. Minnesota Statutes 2014, section 452.11, is amended to read:

452.11 SUBMISSION TO VOTERS.

No city of the first class shall acquire or construct any public utility under the terms of sections 452.08 to 452.13 unless the proposition to acquire or construct same has first been submitted to the qualified electors of the city at a ~~general~~ city election ~~or at a special election called for that purpose,~~ held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year and has been approved by a majority vote of all electors voting upon the proposition.

The question of issuing public utility certificates as provided in section 452.09 may, at the option of the council, be submitted at the same election as the question of the acquisition or construction of the public utility.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3915

Sec. 23. Minnesota Statutes 2014, section 455.24, is amended to read:

455.24 SUBMISSION TO VOTERS.

Before incurring any expense under the powers conferred by section 455.23, the approval of the voters of the city shall first be had at ~~a general or special~~ an election held ~~therein~~ on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year. If a majority of the voters of the city participating at the election shall vote in favor of the construction of the system of poles, wires and cables herein authorized to be made, the council shall proceed with the construction.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 24. Minnesota Statutes 2014, section 455.29, is amended to read:

455.29 MUNICIPALITIES MAY EXTEND ELECTRIC SERVICE.

Except as otherwise restricted by chapter 216B, the governing body, or the commission or board charged with the operation of the public utilities, if one exists therein, of any municipality in the state owning and operating an electric light and power plant for the purpose of the manufacture and sale of electrical power or for the purchase and redistribution of electrical power, may, upon a two-thirds vote of the governing body, or the commission or board, in addition to all other powers now possessed by such municipality, sell electricity to customers, singly or collectively, outside of such municipality, within the state but not to exceed a distance of 30 miles from the corporate limits of the municipality. Before any municipality shall have the power to extend its lines and sell electricity outside of the municipality as provided by sections 455.29 and 455.30, the governing body shall first submit to the voters of the municipality, at ~~a general or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year, the general principle of going outside the municipality and fixing the maximum amount of contemplated expenditures reasonably expected to be made for any and all extensions then or thereafter contemplated. Three weeks' published notice shall be given of such election as required by law, and if a majority of those voting upon the proposition favors the same, then the municipality shall thereafter be considered as having chosen to enter the general business of extending its electric light and power facilities beyond the corporate limits of the municipality. It shall not be necessary to submit to a vote of the people the question of any specific enlargement, extension, or improvement of any outside lines; provided the voters of the municipality have generally elected to exercise the privileges afforded by sections 455.29 and 455.30, and, provided, that each and any specific extension, enlargement, or improvement project is within the limit of the maximum expenditure authorized at the election. In cities operating under a home rule charter, where a vote of the people is not now required in order to extend electric light and power lines, no election shall be required under the provisions of any act. At any election held to determine the attitude of the voters upon this principle, the question shall be simply stated upon the ballot provided therefor, and shall be substantially in the following form: "Shall the city of ..................... undertake the general proposition of extending its electric light and power lines beyond the limits of the municipality, and limit the maximum expenditures for any and all future extensions to the sum of $....................?" For this purpose every municipality is authorized and empowered to extend the lines, wires, and fixtures of its plant to such customers and may issue certificates of indebtedness therefor in an amount not to exceed the actual cost of the extensions and for a term not to exceed the reasonable life of the extensions. These certificates of indebtedness shall in no case be made a charge against the municipality, but shall be payable and paid out of current revenues of the plant other than taxes.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3916

Sec. 25. Minnesota Statutes 2014, section 459.06, subdivision 1, is amended to read:

Subdivision 1. Accept donations. Any county, city, or town may by resolution of its governing body accept donations of land that the governing body deems to be better adapted for the production of timber and wood than for any other purpose, for a forest, and may manage it on forestry principles. The donor of not less than 100 acres of any such land shall be entitled to have the land perpetually bear the donor's name. The governing body of any city or town, when funds are available or have been levied therefor, may, when authorized by a majority vote by ballot of the voters voting at any ~~general or special~~ city election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year or the annual town meeting where the question is properly submitted, purchase or obtain by condemnation proceedings, and preferably at the sources of streams, any tract of land for a forest which is better adapted for the production of timber and wood than for any other purpose, and which is conveniently located for the purpose, and manage it on forestry principles. The city or town may annually levy a tax on all taxable property within its boundaries to procure and maintain such forests.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 26. Minnesota Statutes 2014, section 469.053, subdivision 5, is amended to read:

Subd. 5. Reverse referendum. A city may increase its levy for port authority purposes under subdivision 4 only as provided in this subdivision. Its city council must first pass a resolution stating the proposed amount of levy increase. The city must then publish the resolution together with a notice of public hearing on the resolution for two successive weeks in its official newspaper or, if none exists, in a newspaper of general circulation in the city. The hearing must be held two to four weeks after the first publication. After the hearing, the city council may decide to take no action or may adopt a resolution authorizing the proposed increase or a lesser increase. A resolution authorizing an increase must be published in the city's official newspaper or, if none exists, in a newspaper of general circulation in the city. The resolution is not effective if a petition requesting a referendum on the resolution is filed with the city clerk within 30 days of publication of the resolution. The petition must be signed by voters equaling five percent of the votes cast in the city in the last general election. The resolution is effective if approved by a majority of those voting on the question. The commissioner of revenue shall prepare a suggested form of referendum question. The referendum must be held at ~~a special or general~~ an election ~~before October 1 of the year for which the levy increase is proposed~~ conducted on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year. If approved by the voters, the levy increase may take effect no sooner than the next calendar year.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 27. Minnesota Statutes 2014, section 469.0724, is amended to read:

469.0724 GENERAL OBLIGATION BONDS.

The port authority of Cannon Falls or Redwood Falls must not proceed with the sale of general obligation tax‑supported bonds until the city council by resolution approves the proposed issuance. The resolution must be published in the official newspaper. If, within 30 days after the publication, a petition signed by voters equal in number to ten percent of the number of voters at the last regular city election is filed with the city clerk, the city and

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3917

port authority must not issue the general obligation tax-supported bonds until the proposition has been approved by a majority of the votes cast on the question at ~~a regular or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year.

EFFECTIVE DATE. This section is effective for the city of Cannon Falls and the city of Redwood Falls the day after the governing body and chief clerical officer of the city timely comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 28. Minnesota Statutes 2014, section 469.107, subdivision 2, is amended to read:

Subd. 2. Reverse referendum. A city may increase its levy for economic development authority purposes under subdivision 1 in the following way. Its city council must first pass a resolution stating the proposed amount of levy increase. The city must then publish the resolution together with a notice of public hearing on the resolution for two successive weeks in its official newspaper or if none exists in a newspaper of general circulation in the city. The hearing must be held two to four weeks after the first publication. After the hearing, the city council may decide to take no action or may adopt a resolution authorizing the proposed increase or a lesser increase. A resolution authorizing an increase must be published in the city's official newspaper or if none exists in a newspaper of general circulation in the city. The resolution is not effective if a petition requesting a referendum on the resolution is filed with the city clerk within 30 days of publication of the resolution. The petition must be signed by voters equaling five percent of the votes cast in the city in the last general election. The election must be held at ~~a general or special~~ an election held on the first Tuesday after the first Monday in November of either an even‑numbered or odd-numbered year. Notice of the election must be given in the manner required by law. The notice must state the purpose and amount of the levy.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 29. Minnesota Statutes 2014, section 469.190, subdivision 1, is amended to read:

Subdivision 1. Authorization. Notwithstanding section 477A.016 or any other law, a statutory or home rule charter city may by ordinance, and a town may by the affirmative vote of the electors at the annual town meeting, ~~or at a special town meeting,~~ impose a tax of up to three percent on the gross receipts from the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it for a continuous period of 30 days or more. A statutory or home rule charter city may by ordinance impose the tax authorized under this subdivision on the camping site receipts of a municipal campground.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 30. Minnesota Statutes 2014, section 469.190, subdivision 5, is amended to read:

Subd. 5. Reverse referendum. If the county board passes a resolution under subdivision 4 to impose the tax, the resolution must be published for two successive weeks in a newspaper of general circulation within the unorganized territory, together with a notice fixing a date for a public hearing on the proposed tax.

The hearing must be held not less than two weeks nor more than four weeks after the first publication of the notice. After the public hearing, the county board may determine to take no further action, or may adopt a resolution authorizing the tax as originally proposed or approving a lesser rate of tax. The resolution must be published in a newspaper of general circulation within the unorganized territory. The voters of the unorganized territory may request a referendum on the proposed tax by filing a petition with the county auditor within 30 days after the resolution is published. The petition must be signed by voters who reside in the unorganized territory. The number

Journal of the House - 50th Day - Wednesday, April 29, 2015 - Top of Page 3918

of signatures must equal at least five percent of the number of persons voting in the unorganized territory in the last general election. If such a petition is timely filed, the resolution is not effective until it has been submitted to the voters residing in the unorganized territory at ~~a general or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year and a majority of votes cast on the question of approving the resolution are in the affirmative. The commissioner of revenue shall prepare a suggested form of question to be presented at the referendum.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 31. Minnesota Statutes 2014, section 471.57, subdivision 3, is amended to read:

Subd. 3. May use fund for other purposes upon vote. The council of any municipality which has established a public works reserve fund by an ordinance designating the specific improvement or type of capital improvement for which the fund may be used may submit to the voters of the municipality at ~~any regular or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year the question of using the fund for some other purpose. If a majority of the votes cast on the question are in favor of such diversion from the original purpose of the fund, it may be used for any purpose so approved by the voters.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 32. Minnesota Statutes 2014, section 471.571, subdivision 3, is amended to read:

Subd. 3. Expenditure from fund, limitation. No expenditure for any one project in excess of 60 percent of one year's levy or $25,000, whichever is greater, may be made from such permanent improvement or replacement fund in any year without first obtaining the approval of a majority of the voters voting at a ~~general or special~~ municipal election held on the first Tuesday after the first Monday in November of either an even-numbered or odd‑numbered year at which the question of making such expenditure has been submitted. In submitting any proposal to the voters for approval, the amount proposed to be spent and the purpose thereof shall be stated in the proposal submitted. The proceeds of such levies may be pledged for the payment of any bonds issued pursuant to law for any purposes authorized hereby and annual payments upon such bonds or interest may be made without additional authorization.

EFFECTIVE DATE. Except as otherwise provided, this act is effective August 1, 2015, and applies to any referendum authorized on or after that date.

Sec. 33. Minnesota Statutes 2014, section 471.572, subdivision 2, is amended to read:

Subd. 2. Tax levy. The governing body of a city may establish, by a two-thirds vote of all its members, by ordinance or resolution a reserve fund and may annually levy a property tax for the support of the fund. The proceeds of taxes levied for its support must be paid into the reserve fund. Any other revenue from a source not required by law to be paid into another fund for purposes other than those provided for the use of the reserve fund may be paid into the fund. Before a tax is levied under this section, the city must publish in the official newspaper of the city an initial resolution authorizing the tax levy. If within ten days after the publication a petition is filed with the city clerk requesting an election on the tax levy signed by a number of qualified voters greater than ten percent of the number who voted in the city at the last general election, the tax may not be levied until the levy has been approved by a majority of the votes cast on it at ~~a regular or special~~ an election held on the first Tuesday after the first Monday in November of either an even-numbered or odd-numbered year.

EFFECTIVE DATE.