Journal of the House - 53rd Day - Thursday, April 20, 2023 - Top of Page 5535

 

 

STATE OF MINNESOTA

 

 

NINETY-THIRD SESSION - 2023

 

_____________________

 

FIFTY-THIRD DAY

 

Saint Paul, Minnesota, Thursday, April 20, 2023

 

 

      The House of Representatives convened at 11:30 a.m. and was called to order by Dan Wolgamott, Speaker pro tempore.

 

      Prayer was offered by the Reverend Dr. Bart Roush, Oak Grove Presbyterian Church, Bloomington, Minnesota.

 

      The members of the House gave the pledge of allegiance to the flag of the United States of America.

 

      The roll was called and the following members were present:

 


Acomb

Agbaje

Altendorf

Anderson, P. E.

Anderson, P. H.

Backer

Bahner

Bakeberg

Baker

Becker-Finn

Bennett

Berg

Bierman

Bliss

Brand

Burkel

Carroll

Cha

Clardy

Coulter

Curran

Daniels

Daudt

Davis

Dotseth

Edelson

Elkins

Engen

Feist

Finke

Fischer

Fogelman

Franson

Frazier

Frederick

Freiberg

Garofalo

Gillman

Gomez

Greenman

Grossell

Hansen, R.

Hanson, J.

Harder

Hassan

Heintzeman

Hemmingsen-Jaeger

Her

Hicks

Hill

Hollins

Hornstein

Howard

Hudella

Hudson

Huot

Hussein

Igo

Jacob

Johnson

Jordan

Joy

Keeler

Klevorn

Knudsen

Koegel

Kotyza-Witthuhn

Kozlowski

Koznick

Kraft

Kresha

Lee, F.

Lee, K.

Liebling

Lillie

Lislegard

Long

Mekeland

Moller

Mueller

Murphy

Myers

Nadeau

Nash

Nelson, M.

Nelson, N.

Neu Brindley

Newton

Niska

Noor

Norris

Novotny

O'Driscoll

Olson, B.

Olson, L.

O'Neill

Pelowski

Pérez-Vega

Perryman

Petersburg

Pinto

Pryor

Pursell

Quam

Rehm

Reyer

Richardson

Robbins

Schomacker

Schultz

Scott

Sencer-Mura

Skraba

Smith

Stephenson

Swedzinski

Tabke

Torkelson

Urdahl

Vang

West

Wiener

Wiens

Witte

Wolgamott

Xiong

Youakim

Zeleznikar

Spk. Hortman


 

      A quorum was present.

 

      Davids, Demuth and Kiel were excused. 

 

      McDonald was excused until 5:10 p.m.  Pfarr was excused until 5:20 p.m.

 

      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.


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REPORTS OF STANDING COMMITTEES AND DIVISIONS

 

 

Gomez from the Committee on Taxes to which was referred:

 

H. F. No. 1938, A bill for an act relating to taxation; modifying individual income and corporate franchise taxes, sales and use taxes, property taxes, local government aids, and other miscellaneous taxes and tax provisions; modifying income tax additions, subtractions, and credits; modifying taxes on capital gains; proposing a child tax credit; proposing an advance payment and one-time refundable tax credit; modifying cannabis-related sales and use tax provisions; proposing sales tax exemptions for certain entities; modifying eligibility for certain property tax programs; modifying the formula and adding definitions for the calculation of local government aids; proposing new forms of local government aids; appropriating money; amending Minnesota Statutes 2022, sections 116J.8737, subdivisions 5, 12; 270C.52, subdivision 2; 273.124, subdivisions 6, 13, 13a, 13c, 13d, 14; 273.1245, subdivision 1; 273.1315, subdivision 2; 273.1387, subdivision 2; 289A.08, subdivisions 7, as amended, 7a, as amended; 290.0131, by adding a subdivision; 290.0132, subdivision 26; 290.06, subdivision 2c, as amended; 290.067; 290.0671, subdivision 1; 290.0674, subdivisions 2, 2a, by adding a subdivision; 290.0677, subdivision 1; 290.0681, subdivisions 3, 10; 290.091, subdivision 2, as amended; 290B.03, subdivision 1; 290B.04, subdivisions 3, 4; 290B.05, subdivision 1; 297A.61, by adding subdivisions; 297A.67, subdivisions 2, 7; 297A.70, subdivisions 2, 4, 18; 297A.71, by adding a subdivision; 297A.75, subdivisions 1, 2, 3; 477A.011, subdivision 34, by adding subdivisions; 477A.0124, subdivision 2; 477A.013, subdivisions 8, 9; 477A.03, subdivisions 2a, 2b; Laws 2006, chapter 259, article 11, section 3, as amended; Laws 2023, chapter 1, section 15; proposing coding for new law in Minnesota Statutes, chapters 290; 477A; repealing Minnesota Statutes 2022, sections 290.0132, subdivision 33; 477A.011, subdivisions 30a, 38, 42, 45; 477A.013, subdivision 13.

 

Reported the same back with the following amendments:

 

Delete everything after the enacting clause and insert:

 

"ARTICLE 1

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

 

Section 1.  Minnesota Statutes 2022, section 13.46, subdivision 2, is amended to read:

 

Subd. 2.  General.  (a) Data on individuals collected, maintained, used, or disseminated by the welfare system are private data on individuals, and shall not be disclosed except:

 

(1) according to section 13.05;

 

(2) according to court order;

 

(3) according to a statute specifically authorizing access to the private data;

 

(4) to an agent of the welfare system and an investigator acting on behalf of a county, the state, or the federal government, including a law enforcement person or attorney in the investigation or prosecution of a criminal, civil, or administrative proceeding relating to the administration of a program;

 

(5) to personnel of the welfare system who require the data to verify an individual's identity; determine eligibility, amount of assistance, and the need to provide services to an individual or family across programs; coordinate services for an individual or family; evaluate the effectiveness of programs; assess parental contribution amounts; and investigate suspected fraud;


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(6) to administer federal funds or programs;

 

(7) between personnel of the welfare system working in the same program;

 

(8) to the Department of Revenue to assess parental contribution amounts for purposes of section 252.27, subdivision 2a, administer and evaluate tax refund or tax credit programs and to identify individuals who may benefit from these programs.  The following information may be disclosed under this paragraph:  an individual's and their dependent's names, dates of birth, Social Security numbers, income, addresses, and other data as required, upon request by the Department of Revenue.  Disclosures by the commissioner of revenue to the commissioner of human services for the purposes described in this clause are governed by section 270B.14, subdivision 1.  Tax refund or tax credit programs include, but are not limited to, the dependent care credit under section 290.067, the Minnesota child and working family credit under section 290.0671, the property tax refund and rental credit under section 290A.04, and the Minnesota education credit under section 290.0674;

 

(9) between the Department of Human Services, the Department of Employment and Economic Development, and when applicable, the Department of Education, for the following purposes:

 

(i) to monitor the eligibility of the data subject for unemployment benefits, for any employment or training program administered, supervised, or certified by that agency;

 

(ii) to administer any rehabilitation program or child care assistance program, whether alone or in conjunction with the welfare system;

 

(iii) to monitor and evaluate the Minnesota family investment program or the child care assistance program by exchanging data on recipients and former recipients of Supplemental Nutrition Assistance Program (SNAP) benefits, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance under chapter 119B, medical programs under chapter 256B or 256L, or a medical program formerly codified under chapter 256D; and

 

(iv) to analyze public assistance employment services and program utilization, cost, effectiveness, and outcomes as implemented under the authority established in Title II, Sections 201-204 of the Ticket to Work and Work Incentives Improvement Act of 1999.  Health records governed by sections 144.291 to 144.298 and "protected health information" as defined in Code of Federal Regulations, title 45, section 160.103, and governed by Code of Federal Regulations, title 45, parts 160-164, including health care claims utilization information, must not be exchanged under this clause;

 

(10) to appropriate parties in connection with an emergency if knowledge of the information is necessary to protect the health or safety of the individual or other individuals or persons;

 

(11) data maintained by residential programs as defined in section 245A.02 may be disclosed to the protection and advocacy system established in this state according to Part C of Public Law 98-527 to protect the legal and human rights of persons with developmental disabilities or other related conditions who live in residential facilities for these persons if the protection and advocacy system receives a complaint by or on behalf of that person and the person does not have a legal guardian or the state or a designee of the state is the legal guardian of the person;

 

(12) to the county medical examiner or the county coroner for identifying or locating relatives or friends of a deceased person;

 

(13) data on a child support obligor who makes payments to the public agency may be disclosed to the Minnesota Office of Higher Education to the extent necessary to determine eligibility under section 136A.121, subdivision 2, clause (5);


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(14) participant Social Security numbers and names collected by the telephone assistance program may be disclosed to the Department of Revenue to conduct an electronic data match with the property tax refund database to determine eligibility under section 237.70, subdivision 4a;

 

(15) the current address of a Minnesota family investment program participant may be disclosed to law enforcement officers who provide the name of the participant and notify the agency that:

 

(i) the participant:

 

(A) is a fugitive felon fleeing to avoid prosecution, or custody or confinement after conviction, for a crime or attempt to commit a crime that is a felony under the laws of the jurisdiction from which the individual is fleeing; or

 

(B) is violating a condition of probation or parole imposed under state or federal law;

 

(ii) the location or apprehension of the felon is within the law enforcement officer's official duties; and

 

(iii) the request is made in writing and in the proper exercise of those duties;

 

(16) the current address of a recipient of general assistance may be disclosed to probation officers and corrections agents who are supervising the recipient and to law enforcement officers who are investigating the recipient in connection with a felony level offense;

 

(17) information obtained from a SNAP applicant or recipient households may be disclosed to local, state, or federal law enforcement officials, upon their written request, for the purpose of investigating an alleged violation of the Food and Nutrition Act, according to Code of Federal Regulations, title 7, section 272.1(c);

 

(18) the address, Social Security number, and, if available, photograph of any member of a household receiving SNAP benefits shall be made available, on request, to a local, state, or federal law enforcement officer if the officer furnishes the agency with the name of the member and notifies the agency that:

 

(i) the member:

 

(A) is fleeing to avoid prosecution, or custody or confinement after conviction, for a crime or attempt to commit a crime that is a felony in the jurisdiction the member is fleeing;

 

(B) is violating a condition of probation or parole imposed under state or federal law; or

 

(C) has information that is necessary for the officer to conduct an official duty related to conduct described in subitem (A) or (B);

 

(ii) locating or apprehending the member is within the officer's official duties; and

 

(iii) the request is made in writing and in the proper exercise of the officer's official duty;

 

(19) the current address of a recipient of Minnesota family investment program, general assistance, or SNAP benefits may be disclosed to law enforcement officers who, in writing, provide the name of the recipient and notify the agency that the recipient is a person required to register under section 243.166, but is not residing at the address at which the recipient is registered under section 243.166;

 

(20) certain information regarding child support obligors who are in arrears may be made public according to section 518A.74;


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(21) data on child support payments made by a child support obligor and data on the distribution of those payments excluding identifying information on obligees may be disclosed to all obligees to whom the obligor owes support, and data on the enforcement actions undertaken by the public authority, the status of those actions, and data on the income of the obligor or obligee may be disclosed to the other party;

 

(22) data in the work reporting system may be disclosed under section 256.998, subdivision 7;

 

(23) to the Department of Education for the purpose of matching Department of Education student data with public assistance data to determine students eligible for free and reduced-price meals, meal supplements, and free milk according to United States Code, title 42, sections 1758, 1761, 1766, 1766a, 1772, and 1773; to allocate federal and state funds that are distributed based on income of the student's family; and to verify receipt of energy assistance for the telephone assistance plan;

 

(24) the current address and telephone number of program recipients and emergency contacts may be released to the commissioner of health or a community health board as defined in section 145A.02, subdivision 5, when the commissioner or community health board has reason to believe that a program recipient is a disease case, carrier, suspect case, or at risk of illness, and the data are necessary to locate the person;

 

(25) to other state agencies, statewide systems, and political subdivisions of this state, including the attorney general, and agencies of other states, interstate information networks, federal agencies, and other entities as required by federal regulation or law for the administration of the child support enforcement program;

 

(26) to personnel of public assistance programs as defined in section 256.741, for access to the child support system database for the purpose of administration, including monitoring and evaluation of those public assistance programs;

 

(27) to monitor and evaluate the Minnesota family investment program by exchanging data between the Departments of Human Services and Education, on recipients and former recipients of SNAP benefits, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance under chapter 119B, medical programs under chapter 256B or 256L, or a medical program formerly codified under chapter 256D;

 

(28) to evaluate child support program performance and to identify and prevent fraud in the child support program by exchanging data between the Department of Human Services, Department of Revenue under section 270B.14, subdivision 1, paragraphs (a) and (b), without regard to the limitation of use in paragraph (c), Department of Health, Department of Employment and Economic Development, and other state agencies as is reasonably necessary to perform these functions;

 

(29) counties and the Department of Human Services operating child care assistance programs under chapter 119B may disseminate data on program participants, applicants, and providers to the commissioner of education;

 

(30) child support data on the child, the parents, and relatives of the child may be disclosed to agencies administering programs under titles IV-B and IV-E of the Social Security Act, as authorized by federal law;

 

(31) to a health care provider governed by sections 144.291 to 144.298, to the extent necessary to coordinate services;

 

(32) to the chief administrative officer of a school to coordinate services for a student and family; data that may be disclosed under this clause are limited to name, date of birth, gender, and address;


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(33) to county correctional agencies to the extent necessary to coordinate services and diversion programs; data that may be disclosed under this clause are limited to name, client demographics, program, case status, and county worker information; or

 

(34) between the Department of Human Services and the Metropolitan Council for the following purposes:

 

(i) to coordinate special transportation service provided under section 473.386 with services for people with disabilities and elderly individuals funded by or through the Department of Human Services; and

 

(ii) to provide for reimbursement of special transportation service provided under section 473.386.

 

The data that may be shared under this clause are limited to the individual's first, last, and middle names; date of birth; residential address; and program eligibility status with expiration date for the purposes of informing the other party of program eligibility.

 

(b) Information on persons who have been treated for drug or alcohol abuse may only be disclosed according to the requirements of Code of Federal Regulations, title 42, sections 2.1 to 2.67.

 

(c) Data provided to law enforcement agencies under paragraph (a), clause (15), (16), (17), or (18), or paragraph (b), are investigative data and are confidential or protected nonpublic while the investigation is active.  The data are private after the investigation becomes inactive under section 13.82, subdivision 7, clause (a) or (b).

 

(d) Mental health data shall be treated as provided in subdivisions 7, 8, and 9, but are not subject to the access provisions of subdivision 10, paragraph (b).

 

For the purposes of this subdivision, a request will be deemed to be made in writing if made through a computer interface system.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 2.  Minnesota Statutes 2022, section 41B.0391, subdivision 1, is amended to read:

 

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

 

(b) "Agricultural assets" means agricultural land, livestock, facilities, buildings, and machinery used for farming in Minnesota.

 

(c) "Beginning farmer" means an individual who:

 

(1) is a resident of Minnesota;

 

(2) is seeking entry, or has entered within the last ten years, into farming;

 

(3) intends to farm land located within the state borders of Minnesota;

 

(4) except as provided in subdivision 2, is not and whose spouse is not a family member of the owner of the agricultural assets from whom the beginning farmer is seeking to purchase or rent agricultural assets;

 

(5) except as provided in subdivision 2, is not and whose spouse is not a family member of a partner, member, shareholder, or trustee of the owner of agricultural assets from whom the beginning farmer is seeking to purchase or rent agricultural assets; and


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(6) meets the following eligibility requirements as determined by the authority:

 

(i) has a net worth that does not exceed the limit provided under section 41B.03, subdivision 3, paragraph (a), clause (2);

 

(ii) provides the majority of the day-to-day physical labor and management of the farm;

 

(iii) has, by the judgment of the authority, adequate farming experience or demonstrates knowledge in the type of farming for which the beginning farmer seeks assistance from the authority;

 

(iv) demonstrates to the authority a profit potential by submitting projected earnings statements;

 

(v) asserts to the satisfaction of the authority that farming will be a significant source of income for the beginning farmer;

 

(vi) is enrolled in or has completed within ten years of their first year of farming a financial management program approved by the authority or the commissioner of agriculture;

 

(vii) agrees to notify the authority if the beginning farmer no longer meets the eligibility requirements within the three-year certification period, in which case the beginning farmer is no longer eligible for credits under this section; and

 

(viii) has other qualifications as specified by the authority.

 

The authority may waive the requirement in item (vi) if the participant requests a waiver and has a four-year degree in an agricultural program or related field, reasonable agricultural job-related experience, or certification as an adult farm management instructor.

 

(d) "Family member" means a family member within the meaning of the Internal Revenue Code, section 267(c)(4).

 

(e) "Farm product" means plants and animals useful to humans and includes, but is not limited to, forage and sod crops, oilseeds, grain and feed crops, dairy and dairy products, poultry and poultry products, livestock, fruits, and vegetables.

 

(f) "Farming" means the active use, management, and operation of real and personal property for the production of a farm product.

 

(g) "Owner of agricultural assets" means an individual, trust, or pass-through entity that is the owner in fee of agricultural land or has legal title to any other agricultural asset.  Owner of agricultural assets does not mean an equipment dealer, livestock dealer defined in section 17A.03, subdivision 7, or comparable entity that is engaged in the business of selling agricultural assets for profit and that is not engaged in farming as its primary business activity.  An owner of agricultural assets approved and certified by the authority under subdivision 4 must notify the authority if the owner no longer meets the definition in this paragraph within the three year certification period and is then no longer eligible for credits under this section.

 

(h) "Resident" has the meaning given in section 290.01, subdivision 7.

 

(i) "Share rent agreement" means a rental agreement in which the principal consideration given to the owner of agricultural assets is a predetermined portion of the production of farm products produced from the rented agricultural assets and which provides for sharing production costs or risk of loss, or both.


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(j) "Underserved farmer or rancher" means a farmer or rancher who is a veteran, limited resource producer, or who is living in a high poverty area as those terms are defined and implemented by the secretary of the United States Department of Agriculture pursuant to Public Law 117-169, section 22007.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 3.  Minnesota Statutes 2022, section 41B.0391, subdivision 2, is amended to read:

 

Subd. 2.  Tax credit for owners of agricultural assets.  (a) An owner of agricultural assets may take a credit against the tax due under chapter 290 for the sale or rental of agricultural assets to a beginning farmer in the amount allocated by the authority under subdivision 4.  An owner of agricultural assets is eligible for allocation of a credit equal to:

 

(1) five eight percent of the lesser of the sale price or the fair market value of the agricultural asset, up to a maximum of $32,000 $50,000;

 

(2) ten percent of the gross rental income in each of the first, second, and third years of a rental agreement, up to a maximum of $7,000 per year; or

 

(3) 15 percent of the cash equivalent of the gross rental income in each of the first, second, and third years of a share rent agreement, up to a maximum of $10,000 per year.

 

(b) A qualifying rental agreement includes cash rent of agricultural assets or a share rent agreement.  The agricultural asset must be rented at prevailing community rates as determined by the authority.

 

(c) The credit may be claimed only after approval and certification by the authority, and is limited to the amount stated on the certificate issued under subdivision 4.  An owner of agricultural assets must apply to the authority for certification and allocation of a credit, in a form and manner prescribed by the authority.

 

(d) An owner of agricultural assets or beginning farmer may terminate a rental agreement, including a share rent agreement, for reasonable cause upon approval of the authority.  If a rental agreement is terminated without the fault of the owner of agricultural assets, the tax credits shall not be retroactively disallowed.  In determining reasonable cause, the authority must look at which party was at fault in the termination of the agreement.  If the authority determines the owner of agricultural assets did not have reasonable cause, the owner of agricultural assets must repay all credits received as a result of the rental agreement to the commissioner of revenue.  The repayment is additional income tax for the taxable year in which the authority makes its decision or when a final adjudication under subdivision 5, paragraph (a), is made, whichever is later.

 

(e) The credit is limited to the liability for tax as computed under chapter 290 for the taxable year.  If the amount of the credit determined under this section for any taxable year exceeds this limitation, the excess is a beginning farmer incentive credit carryover according to section 290.06, subdivision 37.

 

(f) For purposes of the credit for the sale of agricultural land only, the family member definitional exclusions in subdivision 1, paragraph (c), clauses (4) and (5), do not apply.  For a sale to a family member to qualify for the credit, the sales price of the agricultural land must equal or exceed the assessed value of the land as of the date of the sale.  For purposes of this paragraph, "sale to a family member" means a sale to a beginning farmer in which the beginning farmer or the beginning farmer's spouse is a family member of:

 

(1) the owner of the agricultural land; or

 

(2) a partner, member, shareholder, or trustee of the owner of the agricultural land.

 

(g) For a sale to an underserved farmer or rancher, the credit rate under paragraph (a), clause (1), is twelve percent rather than eight percent.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.


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Sec. 4.  Minnesota Statutes 2022, section 41B.0391, subdivision 4, is amended to read:

 

Subd. 4.  Authority duties.  (a) The authority shall:

 

(1) approve and certify or recertify beginning farmers as eligible for the program under this section;

 

(2) approve and certify or recertify owners of agricultural assets as eligible for the tax credit under subdivision 2 subject to the allocation limits in paragraph (c);

 

(3) provide necessary and reasonable assistance and support to beginning farmers for qualification and participation in financial management programs approved by the authority;

 

(4) refer beginning farmers to agencies and organizations that may provide additional pertinent information and assistance; and

 

(5) notwithstanding section 41B.211, the Rural Finance Authority must share information with the commissioner of revenue to the extent necessary to administer provisions under this subdivision and section 290.06, subdivisions 37 and 38.  The Rural Finance Authority must annually notify the commissioner of revenue of approval and certification or recertification of beginning farmers and owners of agricultural assets under this section.  For credits under subdivision 2, the notification must include the amount of credit approved by the authority and stated on the credit certificate.

 

(b) The certification of a beginning farmer or an owner of agricultural assets under this section is valid for the year of the certification and the two following years, after which time the beginning farmer or owner of agricultural assets must apply to the authority for recertification.

 

(c) For credits for owners of agricultural assets allowed under subdivision 2, the authority must not allocate more than $5,000,000 for taxable years beginning after December 31, 2017, and before January 1, 2019, and must not allocate more than $6,000,000 for taxable years beginning after December 31, 2018, and before January 1, 2032.  The authority must allocate credits on a first-come, first-served basis beginning on January 1 of each year, except that recertifications for the second and third years of credits under subdivision 2, paragraph (a), clauses (1) and (2) and (3), have first priority.  For each taxable year, 50 percent of newly allocated credits must be allocated to underserved farmers or ranchers.  Any portion of a taxable year's newly allocated credits that is reserved for underserved farmers or ranchers that is not allocated by September 30 of the taxable year is available for allocation to other credit applications beginning on October 1.  Any amount authorized but not allocated in any taxable year does not cancel and is added to the allocation for the next taxable year.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 5.  Minnesota Statutes 2022, section 41B.0391, subdivision 7, is amended to read:

 

Subd. 7.  Sunset.  This section expires for taxable years beginning after December 31, 2023 2031.

 

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

 

Sec. 6.  Minnesota Statutes 2022, section 116U.27, subdivision 1, is amended to read:

 

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

 

(b) "Allocation certificate" means a certificate issued by the commissioner to a taxpayer upon receipt of an initial application for a credit for a project that has not yet been completed.


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(c) "Application" means the application for a credit under subdivision 4.

 

(d) "Commissioner" means the commissioner of employment and economic development.

 

(e) "Credit certificate" means a certificate issued by the commissioner upon submission of the cost verification report in subdivision 4, paragraph (e).

 

(f) "Eligible production costs" means eligible production costs as defined in section 116U.26, paragraph (b), clause (1), incurred in Minnesota that are directly attributable to the production of a film project in Minnesota.

 

(g) "Film" has the meaning given in section 116U.26, paragraph (b), clause (2).

 

(h) "Project" means a film:

 

(1) that includes the promotion of Minnesota;

 

(2) for which the taxpayer has expended at least $1,000,000 in the taxable year a consecutive 12-month period beginning when expenditures are first paid in Minnesota for eligible production costs; and

 

(3) to the extent practicable, that employs Minnesota residents.

 

(i) "Promotion of Minnesota" or "promotion" means visible display of a static or animated logo, approved by the commissioner and lasting approximately five seconds, that promotes Minnesota within its presentation in the end credits before the below-the-line crew crawl for the life of the project.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 7.  Minnesota Statutes 2022, section 116U.27, subdivision 4, is amended to read:

 

Subd. 4.  Applications; allocations.  (a) To qualify for a credit under this section, a taxpayer must submit to the commissioner an application for a credit in the form prescribed by the commissioner, in consultation with the commissioner of revenue.

 

(b) Upon approving an application for a credit that meets the requirements of this section, the commissioner shall issue allocation certificates that:

 

(1) verify eligibility for the credit;

 

(2) state the amount of credit anticipated for the eligible project, with the credit amount up to 25 percent of eligible project costs; and

 

(3) state the taxable year in which the credit is allocated.

 

The commissioner must consult with the Minnesota Film and TV Board prior to issuing an allocation certificate.

 

(c) The commissioner must not issue allocation certificates for more than $4,950,000 $24,950,000 of credits each year.  If the entire amount is not allocated in that taxable year, any remaining amount is available for allocation for the four following taxable years until the entire allocation has been made.  The commissioner must not award any credits for taxable years beginning after December 31, 2024 2032, and any unallocated amounts cancel on that date.

 

(d) The commissioner must allocate credits on a first-come, first-served basis.


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(e) Upon completion of a project, the taxpayer shall submit to the commissioner a report prepared by an independent certified public accountant licensed in the state of Minnesota to verify the amount of eligible production costs related to the project.  The report must be prepared in accordance with generally accepted accounting principles.  Upon receipt and review of the cost verification report, the commissioner shall determine the final amount of eligible production costs and issue a credit certificate to the taxpayer.  The credit may not exceed the anticipated credit amount on the allocation certificate.  If the credit is less than the anticipated amount on the allocation credit, the difference is returned to the amount available for allocation under paragraph (c).  To claim the credit under section 290.06, subdivision 39, or 297I.20, subdivision 4, a taxpayer must include a copy of the credit certificate as part of the taxpayer's return.

 

EFFECTIVE DATE.  This section is effective for allocation certificates issued after December 31, 2022.

 

Sec. 8.  Minnesota Statutes 2022, section 116U.27, subdivision 7, is amended to read:

 

Subd. 7.  Expiration.  Subdivisions 1 to 5 expire January 1, 2025 2033, for taxable years beginning after December 31, 2024 2032.

 

EFFECTIVE DATE.  This section is effective for allocation certificates issued after December 31, 2022.

 

Sec. 9.  Minnesota Statutes 2022, section 168B.07, subdivision 3, is amended to read:

 

Subd. 3.  Retrieval of contents.  (a) For purposes of this subdivision:

 

(1) "contents" does not include any permanently affixed mechanical or nonmechanical automobile parts; automobile body parts; or automobile accessories, including audio or video players; and

 

(2) "relief based on need" includes, but is not limited to, receipt of MFIP and Diversionary Work Program, medical assistance, general assistance, emergency general assistance, Minnesota supplemental aid, MSA-emergency assistance, MinnesotaCare, Supplemental Security Income, energy assistance, emergency assistance, Supplemental Nutrition Assistance Program (SNAP) benefits, earned income tax credit, or Minnesota child and working family tax credit.

 

(b) A unit of government or impound lot operator shall establish reasonable procedures for retrieval of vehicle contents, and may establish reasonable procedures to protect the safety and security of the impound lot and its personnel.

 

(c) At any time before the expiration of the waiting periods provided in section 168B.051, a registered owner who provides documentation from a government or nonprofit agency or legal aid office that the registered owner is homeless, receives relief based on need, or is eligible for legal aid services, has the unencumbered right to retrieve any and all contents without charge and regardless of whether the registered owner pays incurred charges or fees, transfers title, or reclaims the vehicle.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 10.  [181.141] SEXUAL HARASSMENT OR ABUSE SETTLEMENT; PAYMENT AS SEVERANCE OR WAGES PROHIBITED.

 

In a sexual harassment or abuse settlement between an employer and an employee, when there is a financial settlement provided, the financial settlement cannot be provided as wages or severance pay to the employee regardless of whether the settlement includes a nondisclosure agreement.

 

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


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Sec. 11.  Minnesota Statutes 2022, section 256J.45, subdivision 2, is amended to read:

 

Subd. 2.  General information.  The MFIP orientation must consist of a presentation that informs caregivers of:

 

(1) the necessity to obtain immediate employment;

 

(2) the work incentives under MFIP, including the availability of the federal earned income tax credit and the Minnesota child and working family tax credit;

 

(3) the requirement to comply with the employment plan and other requirements of the employment and training services component of MFIP, including a description of the range of work and training activities that are allowable under MFIP to meet the individual needs of participants;

 

(4) the consequences for failing to comply with the employment plan and other program requirements, and that the county agency may not impose a sanction when failure to comply is due to the unavailability of child care or other circumstances where the participant has good cause under subdivision 3;

 

(5) the rights, responsibilities, and obligations of participants;

 

(6) the types and locations of child care services available through the county agency;

 

(7) the availability and the benefits of the early childhood health and developmental screening under sections 121A.16 to 121A.19; 123B.02, subdivision 16; and 123B.10;

 

(8) the caregiver's eligibility for transition year child care assistance under section 119B.05;

 

(9) the availability of all health care programs, including transitional medical assistance;

 

(10) the caregiver's option to choose an employment and training provider and information about each provider, including but not limited to, services offered, program components, job placement rates, job placement wages, and job retention rates;

 

(11) the caregiver's option to request approval of an education and training plan according to section 256J.53;

 

(12) the work study programs available under the higher education system;

 

(13) information about the 60-month time limit exemptions under the family violence waiver and referral information about shelters and programs for victims of family violence; and

 

(14) information about the income exclusions under section 256P.06, subdivision 2.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 12.  Minnesota Statutes 2022, section 256L.15, subdivision 1a, is amended to read:

 

Subd. 1a.  Payment options.  The commissioner may offer the following payment options to an enrollee:

 

(1) payment by check;

 

(2) payment by credit card;

 

(3) payment by recurring automatic checking withdrawal;


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(4) payment by onetime electronic transfer of funds;

 

(5) payment by wage withholding with the consent of the employer and the employee; or

 

(6) payment by using state tax refund payments.

 

At application or reapplication, a MinnesotaCare applicant or enrollee may authorize the commissioner to use the Revenue Recapture Act in chapter 270A to collect funds from the applicant's or enrollee's refund for the purposes of meeting all or part of the applicant's or enrollee's MinnesotaCare premium obligation.  The applicant or enrollee may authorize the commissioner to apply for the state child and working family tax credit on behalf of the applicant or enrollee.  The setoff due under this subdivision shall not be subject to the $10 fee under section 270A.07, subdivision 1.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 13.  Minnesota Statutes 2022, section 289A.08, subdivision 7, as amended by Laws 2023, chapter 1, section 2, is amended to read:

 

Subd. 7.  Composite income tax returns for nonresident partners, shareholders, and beneficiaries.  (a) The commissioner may allow a partnership with nonresident partners to file a composite return and to pay the tax on behalf of nonresident partners who have no other Minnesota source income.  This composite return must include the names, addresses, Social Security numbers, income allocation, and tax liability for the nonresident partners electing to be covered by the composite return.

 

(b) The computation of a partner's tax liability must be determined by multiplying the income allocated to that partner by the highest rate used to determine the tax liability for individuals under section 290.06, subdivision 2c.  Nonbusiness deductions, standard deductions, or personal exemptions are not allowed.

 

(c) The partnership must submit a request to use this composite return filing method for nonresident partners.  The requesting partnership must file a composite return in the form prescribed by the commissioner of revenue.  The filing of a composite return is considered a request to use the composite return filing method.

 

(d) The electing partner must not have any Minnesota source income other than the income from the partnership, other electing partnerships, and other qualifying entities electing to file and pay the pass-through entity tax under subdivision 7a.  If it is determined that the electing partner has other Minnesota source income, the inclusion of the income and tax liability for that partner under this provision will not constitute a return to satisfy the requirements of subdivision 1.  The tax paid for the individual as part of the composite return is allowed as a payment of the tax by the individual on the date on which the composite return payment was made.  If the electing nonresident partner has no other Minnesota source income, filing of the composite return is a return for purposes of subdivision 1.

 

(e) This subdivision does not negate the requirement that an individual pay estimated tax if the individual's liability would exceed the requirements set forth in section 289A.25.  The individual's liability to pay estimated tax is, however, satisfied when the partnership pays composite estimated tax in the manner prescribed in section 289A.25.

 

(f) If an electing partner's share of the partnership's gross income from Minnesota sources is less than the filing requirements for a nonresident under this subdivision, the tax liability is zero.  However, a statement showing the partner's share of gross income must be included as part of the composite return.


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(g) The election provided in this subdivision is only available to a partner who has no other Minnesota source income and who is either (1) a full-year nonresident individual or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of the Internal Revenue Code.

 

(h) A corporation defined in section 290.9725 and its nonresident shareholders may make an election under this paragraph.  The provisions covering the partnership apply to the corporation and the provisions applying to the partner apply to the shareholder.

 

(i) Estates and trusts distributing current income only and the nonresident individual beneficiaries of the estates or trusts may make an election under this paragraph.  The provisions covering the partnership apply to the estate or trust.  The provisions applying to the partner apply to the beneficiary.

 

(j) For the purposes of this subdivision, "income" means the partner's share of federal adjusted gross income from the partnership modified by the additions provided in section 290.0131, subdivisions 8 to 10, 16, and 17, and the subtractions provided in:  (1) section 290.0132, subdivisions 9, 27, 28, and 31, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14.  The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the composite tax computation to the extent the electing partner would have been allowed the subtraction. has the meaning given in section 290.01, subdivision 19, paragraph (h).

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 14.  Minnesota Statutes 2022, section 289A.08, subdivision 7a, as amended by Laws 2023, chapter 1, section 3, is amended to read:

 

Subd. 7a.  Pass-through entity tax.  (a) For the purposes of this subdivision, the following terms have the meanings given:

 

(1) "income" has the meaning given in subdivision 7, paragraph (j), modified by the addition provided in section 290.0131, subdivision 5, and the subtraction provided in section 290.0132, subdivision 3, except that the provisions that apply to a partnership apply to a qualifying entity and the provisions that apply to a partner apply to a qualifying owner.  The income of both a resident and nonresident qualifying owner is allocated and assigned to this state as provided for nonresident partners and shareholders under sections 290.17, 290.191, and 290.20 section 290.01, subdivision 19, paragraph (i);

 

(2) "qualifying entity" means a partnership, limited liability company taxed as a partnership or S corporation, or S corporation including a qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the Internal Revenue Code that has at least one qualifying owner.  Qualifying entity does not include a partnership, limited liability company, or corporation that has a partnership, limited liability company other than a disregarded entity, or corporation as a partner, member, or shareholder publicly traded partnership, as defined in section 7704 of the Internal Revenue Code; and

 

(3) "qualifying owner" means:

 

(i) a resident or nonresident individual or estate that is a partner, member, or shareholder of a qualifying entity; or

 

(ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an S corporation.; or

 

(iii) a disregarded entity that has a qualifying owner as its single owner.


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(b) For taxable years beginning after December 31, 2020, in which the taxes of a qualifying owner are limited under section 164(b)(6)(B) of the Internal Revenue Code, a qualifying entity may elect to file a return and pay the pass-through entity tax imposed under paragraph (c).  The election:

 

(1) must be made on or before the due date or extended due date of the qualifying entity's pass-through entity tax return;

 

(2) must exclude partners, members, shareholders, or owners who are not qualifying owners;

 

(2) (3) may only be made by qualifying owners who collectively hold more than a 50 percent of the ownership interest interests in the qualifying entity held by qualifying owners;

 

(3) (4) is binding on all qualifying owners who have an ownership interest in the qualifying entity; and

 

(4) (5) once made is irrevocable for the taxable year.

 

(c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.

 

(d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount of the qualifying owner's income multiplied by the highest tax rate for individuals under section 290.06, subdivision 2c.  When making this determination:

 

(1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed; and

 

(2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.

 

(e) The amount of each credit and deduction used to determine a qualifying owner's tax liability under paragraph (d) must also be used to determine that qualifying owner's income tax liability under chapter 290.

 

(f) This subdivision does not negate the requirement that a qualifying owner pay estimated tax if the qualifying owner's tax liability would exceed the requirements set forth in section 289A.25.  The qualifying owner's liability to pay estimated tax on the qualifying owner's tax liability as determined under paragraph (d) is, however, satisfied when the qualifying entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated tax.

 

(g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the treatment of distributions, is determined as if the election to pay the pass-through entity tax under paragraph (b) is not made.

 

(h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a pass-through entity tax return must be treated as a composite return and a qualifying entity filing a pass-through entity tax return must be treated as a partnership filing a composite return.

 

(i) The provisions of subdivision 17 apply to the election to pay the pass-through entity tax under this subdivision.

 

(j) If a nonresident qualifying owner of a qualifying entity making the election to file and pay the tax under this subdivision has no other Minnesota source income, filing of the pass-through entity tax return is a return for purposes of subdivision 1, provided that the nonresident qualifying owner must not have any Minnesota source income other than the income from the qualifying entity, other electing qualifying entities, and other partnerships electing to file a composite return under subdivision 7.  If it is determined that the nonresident qualifying owner has other Minnesota source income, the inclusion of the income and tax liability for that owner under this provision will


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not constitute a return to satisfy the requirements of subdivision 1.  The tax paid for the qualifying owner as part of the pass-through entity tax return is allowed as a payment of the tax by the qualifying owner on the date on which the pass-through entity tax return payment was made.

 

(k) Once a credit is claimed by a qualifying owner under section 290.06, subdivision 40, a qualifying entity cannot receive a refund for tax paid under this subdivision for any amounts claimed under that section by the qualifying owners.  Once a credit is claimed under section 290.06, subdivision 40, any refund must be claimed in conjunction with a return filed by the qualifying owner.

 

(l) This section expires at the same time and on the same terms as section 164(b)(6)(B) of the Internal Revenue Code, except that the expiration of this section does not affect the commissioner's authority to audit or power of examination and assessments for credits claimed under this section.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2022.

 

Sec. 15.  Minnesota Statutes 2022, section 289A.382, subdivision 2, is amended to read:

 

Subd. 2.  Reporting and payment requirements for partnerships and tiered partners.  (a) Except for when an audited partnership makes the election in subdivision 3, and except for negative federal adjustments required under federal law taken into account by the partnership in the partnership return for the adjustment or other year, all final federal adjustments of an audited partnership must comply with paragraph (b) and each direct partner of the audited partnership, other than a tiered partner, must comply with paragraph (c).

 

(b) No later than 90 days after the final determination date, the audited partnership must:

 

(1) file a completed federal adjustments report, including all partner-level information required under section 289A.12, subdivision 3, with the commissioner;

 

(2) notify each of its direct partners of their distributive share of the final federal adjustments;

 

(3) file an amended composite report for all direct partners who were included in a composite return under section 289A.08, subdivision 7, in the reviewed year, and pay the additional amount that would have been due had the federal adjustments been reported properly as required; and

 

(4) file amended withholding reports for all direct partners who were or should have been subject to nonresident withholding under section 290.92, subdivision 4b, in the reviewed year, and pay the additional amount that would have been due had the federal adjustments been reported properly as required.; and

 

(5) file an amended pass-through entity tax report for all direct partners who were included in a pass-through entity tax return under section 289A.08, subdivision 7a, in the reviewed year, and pay the additional amount that would have been due had the federal adjustments been reported properly as required.

 

(c) No later than 180 days after the final determination date, each direct partner, other than a tiered partner, that is subject to a tax administered under this chapter, other than the sales tax, must:

 

(1) file a federal adjustments report reporting their distributive share of the adjustments reported to them under paragraph (b), clause (2); and

 

(2) pay any additional amount of tax due as if the final federal adjustment had been properly reported, plus any penalty and interest due under this chapter, and less any credit for related amounts paid or withheld and remitted on behalf of the direct partner under paragraph (b), clauses (3) and (4).

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2020.


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Sec. 16.  Minnesota Statutes 2022, section 290.01, subdivision 19, as amended by Laws 2023, chapter 1, section 4, is amended to read:

 

Subd. 19.  Net income.  (a) For a trust or estate taxable under section 290.03, and a corporation taxable under section 290.02, 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 sections 290.0131 to 290.0136.

 

(b) For an individual, the term "net income" means federal adjusted gross income with the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

 

(c) In the case of a regulated investment company or a fund thereof, as defined in section 851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, except that:

 

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal Revenue Code does not apply;

 

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue Code must be applied by allowing a deduction for capital gain dividends and exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; and

 

(3) the deduction for dividends paid must also be applied in the amount of any undistributed capital gains which the regulated investment company elects to have treated as provided in section 852(b)(3)(D) of the Internal Revenue Code.

 

(d) 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.

 

(e) 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.

 

(f) The Internal Revenue Code of 1986, as amended through December 15, 2022, applies for taxable years beginning after December 31, 1996.

 

(g) Except as otherwise provided, references to the Internal Revenue Code in this subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of determining net income for the applicable year.

 

(h) In the case of a partnership electing to file a composite return under section 289A.08, subdivision 7, income means the partner's share of federal adjusted gross income from the partnership modified by the additions provided in section 290.0131, subdivisions 8 to 10, 16, and 17, and the subtractions provided in:  (1) section 290.0132, subdivisions 9, 27, and 28, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14.  The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the composite tax computation to the extent the electing partner would have been allowed the subtraction.

 

(i) In the case of a qualifying entity electing to pay the pass-through entity tax under section 289A.08, subdivision 7a, income means the qualifying owner's share of federal adjusted gross income from the qualifying entity modified by the additions provided in section 290.0131, subdivisions 5, 8 to 10, 16, and 17, and the


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subtractions provided in:  (1) section 290.0132, subdivisions 3, 9, 27, and 28, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14.  The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the pass-through entity tax computation to the extent the qualifying owners would have been allowed the subtraction. 

 

(j) The income of both a resident and nonresident qualifying owner is allocated and assigned to this state as provided for nonresident partners and shareholders under sections 290.17, 290.191, and 290.20.  The income of a resident qualifying owner of a qualifying entity that is a partnership or limited liability company taxed as a partnership under the Internal Revenue Code is not subject to allocation outside this state as provided for resident individuals under section 290.17, subdivision 1, paragraph (a).  The income of a nonresident qualifying owner of a qualifying entity and the income of a resident qualifying owner of a qualifying entity that is an S corporation, including a qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the Internal Revenue Code, are allocated and assigned to this state as provided for nonresident partners and shareholders under sections 290.17, 290.191, and 290.20.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 17.  Minnesota Statutes 2022, section 290.0132, subdivision 4, is amended to read:

 

Subd. 4.  Education expenses.  (a) Subject to the limits in paragraph (b), the following amounts paid to others for each qualifying child are a subtraction:

 

(1) education-related expenses; plus

 

(2) tuition and fees paid to attend a school described in section 290.0674, subdivision 1 subdivision 1a, paragraph (c), clause (4), that are not included in education-related expenses; less

 

(3) any amount used to claim the credit under section 290.0674.

 

(b) The maximum subtraction allowed under this subdivision is:

 

(1) $1,625 for each qualifying child in kindergarten through grade 6; and

 

(2) $2,500 for each qualifying child in grades 7 through 12.

 

(c) The definitions in section 290.0674, subdivision 1 subdivision 1a, apply to this subdivision.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 18.  Minnesota Statutes 2022, section 290.0132, subdivision 24, is amended to read:

 

Subd. 24.  Discharge of indebtedness; education loans Student loan discharges.  (a) The amount equal to the discharge of indebtedness of the qualified student loan discharge of a taxpayer is a subtraction if:.

 

(1) the indebtedness discharged is a qualified education loan; and

 

(2) the indebtedness was discharged under section 136A.1791, or following the taxpayer's completion of an income-driven repayment plan.

 

(b) For the purposes of this subdivision, "qualified education loan" has the meaning given in section 221 of the Internal Revenue Code.


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(c) For purposes of this subdivision, "income-driven repayment plan" means a payment plan established by the United States Department of Education that sets monthly student loan payments based on income and family size under United States Code, title 20, section 1087e, or similar authority and specifically includes, but is not limited to:

 

(b) For the purposes of this subdivision, "qualified student loan discharge" means a discharge of indebtedness eligible for the exclusion from gross income under section 9675 of Public Law 117-2.  A discharge of indebtedness that occurred after December 31, 2025, but otherwise qualifies for the exclusion under that section is a qualified student loan discharge.

 

(c) "Qualified student loan discharge" includes but is not limited to a discharge of indebtedness under:

 

(1) the income-based repayment plan under United States Code, title 20, section 1098e;

 

(2) the income contingent repayment plan established under United States Code, title 20, section 1087e, subsection (e); and

 

(3) the PAYE program or REPAYE program established by the Department of Education under administrative regulations; and

 

(4) section 136A.1791.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 19.  Minnesota Statutes 2022, section 290.0132, subdivision 26, is amended to read:

 

Subd. 26.  Social Security benefits.  (a) A portion of taxable Social Security benefits is allowed as a subtraction.  The taxpayer is allowed a subtraction equals equal to the greater of the simplified subtraction allowed under paragraph (b) or the alternate subtraction determined under paragraphs (e) to (h).

 

(b) A taxpayer's simplified subtraction equals the amount of taxable social security benefits, as reduced under paragraphs (c) and (d).

 

(c) For a taxpayer other than a married taxpayer filing a separate return with adjusted gross income above the phaseout threshold, the simplified subtraction is reduced by ten percent for each $2,000 of adjusted gross income, or fraction thereof, in excess of the phaseout threshold.  The phaseout threshold equals:

 

(1) $100,000 for a married taxpayer filing a joint return or surviving spouse; or

 

(2) $78,000 for a single or head of household taxpayer.

 

(d) For a married taxpayer filing a separate return, the simplified subtraction is reduced by ten percent for each $1,000 of adjusted gross income, or fraction thereof, in excess of the phaseout threshold for a married joint filer under paragraph (c), clause (1), as adjusted for inflation under paragraph (j).

 

(e) A taxpayer's alternate subtraction equals the lesser of taxable Social Security benefits or a maximum subtraction subject to the limits under paragraphs (b), (c), and (d) (f), (g), and (h).

 

(b) (f) For married taxpayers filing a joint return and surviving spouses, the maximum subtraction under paragraph (c) equals $5,150 $5,840.  The maximum subtraction is reduced by 20 percent of provisional income over $78,180 $88,630.  In no case is the subtraction less than zero.


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(c) (g) For single or head-of-household taxpayers, the maximum subtraction under paragraph (c) equals $4,020 $4,560.  The maximum subtraction is reduced by 20 percent of provisional income over $61,080 $69,250.  In no case is the subtraction less than zero.

 

(d) (h) For married taxpayers filing separate returns, the maximum subtraction under paragraph (c) equals one‑half the maximum subtraction for joint returns under paragraph (b) (d).  The maximum subtraction is reduced by 20 percent of provisional income over one-half the threshold amount specified in paragraph (b) (d).  In no case is the subtraction less than zero.

 

(e) (i) For purposes of this subdivision, "provisional income" means modified adjusted gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of the taxable Social Security benefits received during the taxable year, and "Social Security benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.

 

(f) (j) The commissioner shall adjust the maximum subtraction and phaseout threshold amounts in paragraphs (b) to (c) and (d) as provided in section 270C.22.  The statutory year is taxable year 2019 2023.  The maximum subtraction and threshold amounts 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, 2022.

 

Sec. 20.  Minnesota Statutes 2022, section 290.0132, subdivision 27, is amended to read:

 

Subd. 27.  Deferred foreign income.  The amount of deferred foreign income recognized because of under section 965 of the Internal Revenue Code is a subtraction.

 

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

 

Sec. 21.  Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision to read:

 

Subd. 34.  Damages for sexual harassment or abuse.  The amount of damages received under a sexual harassment or abuse claim that is not excluded from gross income under section 104(a)(2) of the Internal Revenue Code because the damages are not received on account of personal physical injuries or physical sickness is a subtraction.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 22.  Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision to read:

 

Subd. 35.  Qualified retirement benefits.  (a) The amount of qualified public pension income is a subtraction.  The subtraction in this section is limited to:

 

(1) $25,000 for a married taxpayer filing a joint return or surviving spouse; or

 

(2) $12,500 for all other filers.

 

(b) For a taxpayer with adjusted gross income above the phaseout threshold, the subtraction is reduced by ten percent for each $2,000 of adjusted gross income, or fraction thereof, in excess of the threshold.  The phaseout threshold equals:

 

(1) $100,000 for a married taxpayer filing a joint return or surviving spouse;


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(2) $78,000 for a single or head of household taxpayer; or

 

(3) for a married taxpayer filing a separate return, half the amount for a married taxpayer filing a joint return.

 

(c) For the purposes of this section, "qualified public pension income" means any amount received:

 

(1) a basic member of any pension plan governed by chapter 353, 354, or 354A, or the basic member's survivor, provided that the annuity or benefit is based on service for which the member or survivor is not also receiving Social Security benefits;

 

(2) a member of a pension plan governed by chapter 3A or 352B, or the member's survivor, provided that the annuity or benefit is based on service for which the member or survivor is not also receiving Social Security benefits;

 

(3) from any retirement system administered by the federal government that is based on service for which the recipient or the recipient's survivor is not also receiving Social Security benefits; or

 

(4) from a public retirement system of or created by another state or any of its political subdivisions, or the District of Columbia, if the income tax laws of the other state or district permit a similar deduction or exemption or a reciprocal deduction or exemption of a retirement or pension benefit received from a public retirement system of or created by this state or any political subdivision of this state.

 

(d) The commissioner must annually adjust the subtraction limits in paragraph (a) and the phaseout thresholds in paragraph (b), as provided in section 270C.22.  The statutory year is taxable year 2023.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 23.  Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision to read:

 

Subd. 36.  Subpart F income.  For a unitary business, as defined in section 290.17, subdivision 4, paragraph (b), the amount of subpart F income included in gross income under section 951 of the Internal Revenue Code is a subtraction.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2023.

 

Sec. 24.  Minnesota Statutes 2022, section 290.0133, subdivision 6, is amended to read:

 

Subd. 6.  Special deductions.  The amount of any special deductions under sections 241 to 247, and 250, and 965 of the Internal Revenue Code is an addition.

 

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

 

Sec. 25.  Minnesota Statutes 2022, section 290.0134, subdivision 18, is amended to read:

 

Subd. 18.  Deferred foreign income.  The amount of deferred foreign income recognized because of under section 965 of the Internal Revenue Code is a subtraction.

 

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


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Sec. 26.  Minnesota Statutes 2022, section 290.0134, is amended by adding a subdivision to read:

 

Subd. 21.  Subpart F income.  For a unitary business, as defined in section 290.17, subdivision 4, paragraph (b), the amount of subpart F income included in gross income under section 951 of the Internal Revenue Code is a subtraction.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2023.

 

Sec. 27.  Minnesota Statutes 2022, section 290.06, subdivision 2c, as amended by Laws 2023, chapter 1, section 15, is amended to read:

 

Subd. 2c.  Schedules of rates for individuals, estates, and trusts.  (a) The income taxes imposed by this chapter upon married individuals filing joint returns and surviving spouses as defined in section 2(a) of the Internal Revenue Code must be computed by applying to their taxable net income the following schedule of rates:

 

(1) On the first $38,770 $43,950, 5.35 percent;

 

(2) On all over $38,770 $43,950, but not over $154,020 $174,610, 6.8 percent;

 

(3) On all over $154,020 $174,610, but not over $269,010 $304,970, 7.85 percent;

 

(4) On all over $269,010 $304,970, but not over $1,000,000, 9.85 percent.; and

 

(5) On all over $1,000,000, 10.85 percent.

 

Married individuals filing separate returns, estates, and trusts must compute their income tax by applying the above rates to their taxable income, except that the income brackets will be one-half of the above amounts after the adjustment required in subdivision 2d.

 

(b) The income taxes imposed by this chapter upon unmarried individuals must be computed by applying to taxable net income the following schedule of rates:

 

(1) On the first $26,520 $30,070, 5.35 percent;

 

(2) On all over $26,520 $30,070, but not over $87,110 $98,760, 6.8 percent;

 

(3) On all over $87,110 $98,760, but not over $161,720 $183,340, 7.85 percent;

 

(4) On all over $161,720 $183,340, but not over $600,000, 9.85 percent.; and

 

(5) On all over $600,000, 10.85 percent.

 

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as a head of household as defined in section 2(b) of the Internal Revenue Code must be computed by applying to taxable net income the following schedule of rates:

 

(1) On the first $32,650 $37,010, 5.35 percent;

 

(2) On all over $32,650 $37,010, but not over $131,190 $148,730, 6.8 percent;

 

(3) On all over $131,190 $148,730, but not over $214,980 $243,720, 7.85 percent;


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(4) On all over $214,980 $243,720, but not over $800,000, 9.85 percent.; and

 

(5) On all over $800,000, 10.85 percent.

 

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax of any individual taxpayer whose taxable net income for the taxable year is less than an amount determined by the commissioner must be computed in accordance with tables prepared and issued by the commissioner of revenue based on income brackets of not more than $100.  The amount of tax for each bracket shall be computed at the rates set forth in this subdivision, provided that the commissioner may disregard a fractional part of a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

 

(e) An individual who is not a Minnesota resident for the entire year must compute the individual's Minnesota income tax as provided in this subdivision.  After the application of the nonrefundable credits provided in this chapter, the tax liability must then be multiplied by a fraction in which:

 

(1) the numerator is the individual's Minnesota source federal adjusted gross income as defined in section 62 of the Internal Revenue Code and increased by:

 

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 17, and 290.0137, paragraph (a); and reduced by

 

(ii) the Minnesota assignable portion of the subtraction for United States government interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132, subdivisions 9, 10, 14, 15, 17, 18, 27, and 31, and 290.0137, paragraph (c), after applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

 

(2) the denominator is the individual's federal adjusted gross income as defined in section 62 of the Internal Revenue Code, increased by:

 

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 17, and 290.0137, paragraph (a); and reduced by

 

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27, and 31, and 290.0137, paragraph (c).

 

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision 7a, paragraph (b), the individual must compute the individual's Minnesota income tax as provided in paragraph (e), and also must include, to the extent attributed to the electing qualifying entity:

 

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the addition under section 290.0131, subdivision 5; and

 

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the subtraction under section 290.0132, subdivision 3.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.


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Sec. 28.  Minnesota Statutes 2022, section 290.06, subdivision 2d, is amended to read:

 

Subd. 2d.  Inflation adjustment of brackets.  The commissioner shall annually adjust the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed in subdivision 2c as provided in section 270C.22.  The statutory year is taxable year 2019 2023.  The rate applicable to any rate bracket must not be changed.  The dollar amounts setting forth the tax shall be adjusted to reflect the changes in the rate brackets.  The rate brackets as adjusted must be rounded to the nearest $10 amount.  If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.  The commissioner shall determine the rate bracket for married filing separate returns after this adjustment is done.  The rate bracket for married filing separate must be one-half of the rate bracket for married filing joint.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2023.

 

Sec. 29.  Minnesota Statutes 2022, section 290.06, subdivision 39, is amended to read:

 

Subd. 39.  Film production credit.  (a) A taxpayer, including a taxpayer to whom a credit has been assigned under section 116U.27, subdivision 3, may claim a credit against the tax imposed by this chapter equal to the amount certified on a credit certificate under section 116U.27, subject to the limitations in this subdivision.

 

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

 

(c) Credits allowed to a partnership, a limited liability company taxed as a partnership, or an S corporation are passed through to the partners, members, shareholders, or owners, respectively, pro rata to each based on the partner's, member's, shareholder's, or owner's share of the entity's assets, or as specially allocated in the organizational documents or any other executed agreement, as of the last day of the taxable year.

 

(d) Notwithstanding the approval and certification by the commissioner of employment and economic development under section 116U.27, the commissioner may utilize any audit and examination powers under chapter 270C or 289A to the extent necessary to verify that the taxpayer is eligible for the credit and to assess the amount of any improperly claimed credit.  The commissioner may only assess the original recipient of the credit certificate for the amount of improperly claimed credits.  The commissioner may not assess a credit certificate assignee for any amount of improperly claimed credits, and an assignee's claim for credit is not affected by the commissioner's assessment of improperly claimed credits against the assignor.

 

(e) This subdivision expires January 1, 2025 2033, for taxable years beginning after December 31, 2024 2032, except that the expiration of this section does not affect the commissioner of revenue's authority to audit or power of examination and assessment for credits claimed under this subdivision.

 

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


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Sec. 30.  Minnesota Statutes 2022, section 290.067, is amended to read:

 

290.067 DEPENDENT CARE CREDIT.

 

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, 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 except that in determining whether the child qualified as a dependent, income received as a Minnesota family investment program grant or allowance to or on behalf of the child must not be taken into account in determining whether the child received more than half of the child's support from the taxpayer.

 

(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.  If the child is 16 months old or younger at the close of the taxable year, the amount of expenses deemed to have been paid equals the maximum limit for one qualified 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 expenses deemed to have been paid equals the amount the licensee would charge for the care of a child of the same age for the same number of hours of care.

 

(c) If a married couple taxpayer:

 

(1) has a child who has not attained the age of one year at the close of the taxable year; and

 

(2) files a joint tax return for the taxable year; and

 

(3) (2) 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.

 

(d) If the taxpayer is not required and does not file a federal individual income tax return for the tax year, 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) 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 290.0132, subdivision 10, the credit determined under 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.


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(f) For residents of Minnesota, the subtractions for military pay under section 290.0132, subdivisions 11 and 12, are not considered "earned income not subject to tax under this chapter."

 

(g) 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."

 

(h) For taxpayers with federal adjusted gross income in excess of $52,230, the credit is equal to the lesser of the credit otherwise calculated under this subdivision, or the amount equal to $600 minus five percent of federal adjusted gross income in excess of $52,230 for taxpayers with one qualified individual, or $1,200 minus five percent of federal adjusted gross income in excess of $52,230 for taxpayers with two or more qualified individuals, but in no case is the credit less than zero.

 

Subd. 2b.  Inflation adjustment.  The commissioner shall annually adjust the dollar amount of the income threshold at which the maximum credit begins to be reduced under subdivision 1 as provided in section 270C.22.  The statutory year is taxable year 2019.

 

Subd. 3.  Credit to be refundable.  If the amount of credit which a claimant would be eligible to receive pursuant to this subdivision 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.  The amount needed to pay the refunds required by this section is appropriated to the commissioner from the general fund.

 

Subd. 4.  Right to file claim.  The right to file a claim under this section shall be personal to the claimant and shall not survive death, but such right may be exercised on behalf of a claimant by the claimant's legal guardian or attorney-in-fact.  When a claimant dies after having filed a timely claim the amount thereof shall be disbursed to another member of the household as determined by the commissioner of revenue.  If the claimant was the only member of a household, the claim may be paid to the claimant's personal representative, but if neither is appointed and qualified within two years of the filing of the claim, the amount of the claim shall escheat to the state.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 31.  Minnesota Statutes 2022, section 290.0671, as amended by Laws 2023, chapter 1, section 16, is amended to read:

 

290.0671 MINNESOTA CHILD AND WORKING FAMILY CREDIT.

 

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, as provided in this section.  To receive a credit, a taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code, except that:

 

(1) a taxpayer with no qualifying children who has attained the age of 19, but not attained age 65 before the close of the taxable year and is otherwise eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit; and

 

(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted gross income exceeds the income limitation under section 32 of the Internal Revenue Code;

 

(3) section 32(m) of the Internal Revenue Code does not apply; and

 

(4) a taxpayer eligible for a child credit under paragraph (c) whose earned income is insufficient to earn a credit under section 32 of the Internal Revenue Code may receive a credit.


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(b) A taxpayer's credit under this section equals the sum of the taxpayer's child credit under paragraph (c) and the taxpayer's working family credit amount under paragraph (d), subject to the reduction under paragraph (e).

 

(c) A taxpayer's child credit equals $1,175 for each qualified child of the taxpayer.

 

(d) A taxpayer's working family credit equals four percent of the first $12,500 of earned income.

 

(e) The combined amount under paragraph (b) is reduced by 9 percent of earned income or adjusted gross income, whichever is greater, in excess of:

 

(1) $35,000 for a married taxpayer filing a joint return; or

 

(2) $28,000 for all other filers.

 

(b) For individuals with no qualifying children, the credit equals 3.9 percent of the first $7,150 of earned income.  The credit is reduced by 2.0 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

 

(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first $11,950 of earned income.  The credit is reduced by 6.0 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

 

(d) For individuals with two qualifying children, the credit equals 11 percent of the first $19,600 of earned income.  The credit is reduced by 10.5 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

 

(e) For individuals with three or more qualifying children, the credit equals 12.5 percent of the first $20,000 of earned income.  The credit is reduced by 10.5 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

 

(f) For a part-year resident, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

 

(g) 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 290.0132, subdivision 10, 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 following clauses are not considered "earned income not subject to tax under this chapter":

 

(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;

 

(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and

 

(3) income derived from an Indian reservation by an enrolled member of the reservation while living on the reservation.

 

(h) For the purposes of this section, the phaseout threshold equals:

 

(1) $14,570 for married taxpayers filing joint returns with no qualifying children;

 

(2) $8,730 for all other taxpayers with no qualifying children;


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(3) $28,610 for married taxpayers filing joint returns with one qualifying child;

 

(4) $22,770 for all other taxpayers with one qualifying child;

 

(5) $32,840 for married taxpayers filing joint returns with two qualifying children;

 

(6) $27,000 for all other taxpayers with two qualifying children;

 

(7) $33,140 for married taxpayers filing joint returns with three or more qualifying children; and

 

(8) $27,300 for all other taxpayers with three or more qualifying children.

 

(i) (h) 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.

 

Subd. 1a.  Definitions.  For purposes of this section, the term following terms have the meanings given:

 

(1) "qualifying child" has the meaning given in section 32(c) of the Internal Revenue Code., except section 32(m) does not apply; and

 

(2) "earned income of the lesser-earning spouse" has the meaning given in section 290.0675, subdivision 1, paragraph (d).

 

Subd. 2.  Credit name.  The credit allowed by this section shall be known as the "Minnesota child and working family credit."

 

Subd. 4.  Credit refundable.  If the amount of credit which the claimant is eligible to receive under this section exceeds the claimant's tax liability under this chapter, the commissioner shall refund the excess to the claimant.

 

Subd. 5.  Calculation assistance.  Upon request of the individual and submission of the necessary information, in the form prescribed by the commissioner, the Department of Revenue shall calculate the credit on behalf of the individual.

 

Subd. 6.  Appropriation.  An amount sufficient to pay the refunds required by this section is appropriated to the commissioner from the general fund.

 

Subd. 7.  Inflation adjustment.  The commissioner shall annually adjust the earned income amounts used to calculate the working family credit, the child credit amounts, and the phase-out thresholds in subdivision 1 as provided in section 270C.22.  The statutory year is taxable year 2019 2023.

 

Subd. 8.  Advance payment of credits.  (a) The commissioner of revenue may establish a process to allow taxpayers to elect to receive one or more advance payments of the credit under this section.  The amount of advance payments must be based on the taxpayer and commissioner's estimate of the amount of credits for which the taxpayer would be eligible in the taxable year beginning in the calendar year in which the payments were made.  The commissioner must not distribute advance payments to a taxpayer who does not elect to receive advance payments. 

 

(b) The amount of a taxpayer's credit under this section for the taxable year is reduced by the amount of advance payments received by the taxpayer in the calendar year during which the taxable year began.  If a taxpayer's advance payments exceeded the credit the taxpayer was eligible to receive for the taxable year, the taxpayer's liability for tax is increased by the difference between the amount of advance payments received and the credit amount.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.


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Sec. 32.  Minnesota Statutes 2022, section 290.0674, is amended to read:

 

290.0674 MINNESOTA EDUCATION CREDIT.

 

Subdivision 1.  Credit allowed; definitions.  An individual is allowed a credit against the tax imposed by this chapter in an amount equal to 75 percent of the amount paid for education-related expenses for a qualifying child in kindergarten through grade 12. 

 

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

 

(b) "Dependent" means a dependent, as defined in sections 151 and 152 of the Internal Revenue Code.

 

(c) "Education-related expenses" means:

 

(1) qualifying instructional 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 world languages standards under section 120B.022, subdivision 1, and that do not include the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship;

 

(2) expenses for textbooks, including books and other instructional materials and equipment purchased or leased for use in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state.  "Textbooks" does not include instructional books and materials used in the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship, nor does it include books or materials for extracurricular activities including sporting events, musical or dramatic events, speech activities, driver's education, or similar programs;

 

(3) a maximum expense of $200 per family for personal computer hardware, excluding single purpose processors, and educational software that assists a dependent to improve knowledge of core curriculum areas or to expand knowledge and skills under the 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

 

(4) the amount paid to others for transportation of a qualifying child attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363A.  Amounts under this clause exclude any expense the taxpayer incurred in using the taxpayer's or the qualifying child's vehicle.

 

(d) "Exemption amount" means the dependent exemption amount under section 290.0121, subdivision 1, paragraph (b), as adjusted for inflation under section 290.0121, subdivision 3.

 

(e) "Qualified instructor" means an individual who is not a lineal ancestor or sibling of the dependent and who is:

 

(1) an instructor under section 120A.22, subdivision 10, clause (1), (2), (3), (4), or (5); or

 

(2) a member of the Minnesota Music Teachers Association.


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For purposes of this section, (f) "Qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue Code.

 

(g) "Qualifying instructional fees or tuition" means fees or tuition for instruction by a qualified instructor outside the regular school day or school year, and that does not include the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship, including:

 

(1) driver's education offered as part of school curriculum, regardless of whether it is taken from a public or private entity; or

 

(2) tutoring or summer camps that:

 

(i) are in grade or age appropriate curricula that supplement curricula and instruction available during the regular school year;

 

(ii) assist a dependent to improve knowledge of core curriculum areas; or

 

(iii) expand knowledge and skills under:

 

(A) the required academic standards under section 120B.021, subdivision 1; and

 

(B) the world languages standards under section 120B.022, subdivision 1.

 

Subd. 2.  Limitations.  (a) For claimants with adjusted gross income not greater than $33,500 $70,000, the maximum credit allowed for a family is $1,000 $1,500 multiplied by the number of qualifying children in kindergarten through grade 12 in the family.  The maximum credit for families with one qualifying child in kindergarten through grade 12 is reduced by $1 for each $4 of household adjusted gross income over $33,500 $70,000, and the maximum credit for families with two or more qualifying children in kindergarten through grade 12 is reduced by $2 for each $4 of household adjusted gross income over $33,500 $70,000, but in no case is the credit less than zero.

 

(b) For claimants with three or more dependents, the adjusted gross income thresholds under paragraph (a) are increased as follows:

 

(1) for claimants with three dependents, the thresholds are increased by the exemption amount;

 

(2) for claimants with four dependents, the thresholds are increased by the exemption amount, multiplied by two; and

 

(3) for claimants with five or more dependents, the thresholds are increased by the exemption amount times three.

 

(b) (c) In the case of a married claimant, a credit is not allowed unless a joint income tax return is filed.

 

(c) (d) 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).

 

Subd. 2a.  Income.  (a) For purposes of this section, "income" means the sum of the following:

 

(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code; and


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(2) the sum of the following amounts to the extent not included in clause (1):

 

(i) all nontaxable income;

 

(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.


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(b) "Income" does not include:

 

(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;

 

(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.

 

Subd. 4.  Credit to be refundable.  If the amount of credit that the claimant is eligible to receive under this section exceeds the claimant's tax liability under this chapter, the commissioner shall refund the excess to the claimant.

 

Subd. 5.  Appropriation.  An amount sufficient to pay the refunds required by this section is appropriated to the commissioner from the general fund.

 

Subd. 6.  Inflation adjustment.  The commissioner shall annually adjust the adjusted gross income amounts in subdivision 2, as provided in section 270C.22.  The statutory year is taxable year 2023.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 33.  Minnesota Statutes 2022, section 290.0677, subdivision 1, is amended to read:

 

Subdivision 1.  Credit allowed; current military service.  (a) An individual is allowed a credit against the tax due under this chapter equal to $59 for each month or portion thereof that the individual was in active military service in a designated area after September 11, 2001, and before January 1, 2009, while a Minnesota domiciliary.

 

(b) An individual is allowed a credit against the tax due under this chapter equal to $120 for each month or portion thereof that the individual was in active military service in a designated area after December 31, 2008, while a Minnesota domiciliary.

 

(c) For active service performed after September 11, 2001, and before December 31, 2006, the individual may claim the credit in the taxable year beginning after December 31, 2005, and before January 1, 2007.

 

(d) For active service performed after December 31, 2006, the individual may claim the credit for the taxable calendar year in which the active service was performed.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 34.  Minnesota Statutes 2022, section 290.0682, subdivision 2, is amended to read:

 

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;


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(2) the earned income for the taxable year of the eligible individual, if any;

 

(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; or

 

(4) $500 $1,000.

 

(c) For a part-year resident, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

 

(d) In the case of a married couple, each spouse is eligible for the credit in this section.  For the purposes of paragraph (b), for married taxpayers filing joint returns, each spouse's adjusted gross income equals the spouse's percentage share of the couple's earned income, multiplied by the couple's combined adjusted gross income.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 35.  Minnesota Statutes 2022, section 290.0682, is amended by adding a subdivision to read:

 

Subd. 3.  Credit refundable; appropriation.  (a) If the amount of credit which a claimant is eligible to receive under this section exceeds the claimant's tax liability under this chapter, the commissioner shall refund the excess to the claimant.

 

(b) 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, 2022.

 

Sec. 36.  Minnesota Statutes 2022, section 290.0685, subdivision 1, is amended to read:

 

Subdivision 1.  Credit allowed.  (a) An eligible individual is allowed a credit against the tax imposed by this chapter equal to $2,000 for each birth for which a certificate of birth resulting in stillbirth has been issued under section 144.2151 stillbirth.  The credit under this section is allowed only in the taxable year in which the stillbirth occurred and if the child would have been a dependent of the taxpayer as defined in section 152 of the Internal Revenue Code.

 

(b) 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).

 

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

 

Sec. 37.  Minnesota Statutes 2022, section 290.0685, is amended by adding a subdivision to read:

 

Subd. 1a.  Definitions.  (a) For purposes of this section, the following terms have the meanings given, unless the context clearly indicates otherwise.

 

(b) "Certificate of birth" means the printed certificate of birth resulting in stillbirth issued under section 144.2151 or for a birth occurring in another state or country a similar certificate issued under that state's or country's law.


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(c) "Eligible individual" means an individual who is:

 

(1)(i) a resident; or

 

(ii) the nonresident spouse of a resident who is a member of armed forces of the United States or the United Nations; and

 

(2)(i) the individual who gave birth resulting in stillbirth and is listed as a parent on the certificate of birth;

 

(ii) if no individual meets the requirements of clause (i) for a stillbirth that occurs in this state, then the first parent listed on the certificate of birth resulting in still birth; or

 

(iii) the individual who gave birth resulting in stillbirth for a birth outside of this state for which no certificate of birth was issued.

 

(d) "Stillbirth" means a birth for which a fetal death report would be required under section 144.222, subdivision 1, if the birth occurred in this state.

 

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

 

Sec. 38.  Minnesota Statutes 2022, section 290.0686, is amended to read:

 

290.0686 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 either a core content area directly related to a qualified teacher's licensure field or in special education.  Except for a special education program, 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 either a core content area in which the teacher provides direct classroom instruction or in special education.

 

(c) "Qualified teacher" means a person who:

 

(1) holds a qualifying teaching license issued by the licensing division in the Department of Education on behalf of the Professional Educator Licensing and Standards Board both when the teacher begins the master's degree program and when the teacher completes the master's degree program;

 

(2) began a master's degree program after June 30, 2017; 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.

 

(e) "Special education" means a program of study directly related to licensure in developmental disabilities, early childhood special education, deaf and hard of hearing education, blind and visually impaired education, emotional or behavioral disorders, autism spectrum disorders, or learning disabilities.


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(f) "Qualifying teaching license" means a license issued by the licensing division in the Department of Education on behalf of the Professional Educator Licensing and Standards Board.

 

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 the lesser of $2,500 or the amount the individual paid for tuition, fees, books, and instructional materials necessary to completing the master's degree program and for which the individual did not receive reimbursement from an employer or scholarship.

 

(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 or in special education.

 

(d) An individual who completed a master's degree program in special education during the taxable year but did not have a qualifying teaching license when the individual completed the program may claim the credit under this section if the individual receives a qualifying license within six months of completing the program.  A credit claimed under this paragraph must be claimed in the taxable year in which the individual received the qualifying teaching license.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 39.  [290.0694] CREDIT FOR SALES OF MANUFACTURED HOME PARKS TO COOPERATIVES.

 

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

 

(b) "Qualified property" means a manufactured home park in Minnesota classified as 4c(5)(i) or 4c(5)(iii) under section 273.13, subdivision 25, paragraph (d).

 

(c) "Qualified seller" means a taxpayer, as defined under section 290.01, subdivision 6, who sells qualified property to:  (1) a corporation or association organized under chapter 308A or 308B, where each person who owns a share or shares in the corporation or association would be entitled to occupy a lot within the qualified property after the sale; or (2) a nonprofit or a representative acting on behalf of residents, as defined by section 327C.015, subdivision 13, who purchases the property on behalf of residents who intend to form a corporation or association as described in clause (1).

 

Subd. 2.  Credit allowed; carryforward.  (a) A qualified seller is allowed a credit against the tax imposed under this chapter.  The credit equals five percent of the amount of the sale price of the qualified property.

 

(b) If the amount of the credit under this section exceeds the taxpayer's liability for tax under this chapter, the excess is a credit carryover to each of the five succeeding taxable years.  The entire amount of the excess unused credit for the taxable year must be carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried.  The amount of the unused credit that may be added under this paragraph may not exceed the taxpayer's liability for tax, less any credit for the current taxable year.

 

(c) For residents and part-year residents, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).


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Subd. 3.  Partnerships; multiple owners.  Credits granted to a partnership, a limited liability company taxed as a partnership, an 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 document, as of the last day of the taxable year.

 

Subd. 4.  Sunset.  This section expires January 1, 2031, for taxable years beginning after December 31, 2030.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 40.  Minnesota Statutes 2022, section 290.091, subdivision 2, as amended by Laws 2023, chapter 1, section 18, 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)(1)(D) 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 person with a disability;

 

(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 290.0131, subdivision 2;

 

(6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;

 

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent not included in the addition required under clause (6); and


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(8) to the extent not included in federal alternative minimum taxable income, the amount of foreign-derived intangible income deducted under section 250 of the Internal Revenue Code;

 

less the sum of the amounts determined under the following:

 

(i) interest income as defined in section 290.0132, subdivision 2;

 

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 3, to the extent included in federal alternative minimum taxable income;

 

(iii) 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;

 

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, 26 to 29, and 31, 34, and 35;

 

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

 

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122, subdivision 7.

 

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, except alternative minimum taxable income must be increased by the addition in section 290.0131, subdivision 16.

 

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

 

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

 

(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, 2022.

 

Sec. 41.  Minnesota Statutes 2022, section 290.17, subdivision 4, is amended to read:

 

Subd. 4.  Unitary business principle.  (a) If a trade or business conducted wholly within this state or partly within and partly without this state is part of a unitary business, the entire worldwide income of the unitary business is subject to apportionment pursuant to section 290.191.  Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary business is considered to be derived from any particular source and none may be allocated to a particular place except as provided by the applicable apportionment formula.  The provisions of this subdivision do not apply to business income subject to subdivision 5, income of an insurance company, or income of an investment company determined under section 290.36.

 

(b) The term "unitary business" means business activities or operations which result in a flow of value between them.  The term may be applied within a single legal entity or between multiple entities and without regard to whether each entity is a sole proprietorship, a corporation, a partnership or a trust.


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(c) Unity is presumed whenever there is unity of ownership, operation, and use, evidenced by centralized management or executive force, centralized purchasing, advertising, accounting, or other controlled interaction, but the absence of these centralized activities will not necessarily evidence a nonunitary business.  Unity is also presumed when business activities or operations are of mutual benefit, dependent upon or contributory to one another, either individually or as a group.

 

(d) Where a business operation conducted in Minnesota is owned by a business entity that carries on business activity outside the state different in kind from that conducted within this state, and the other business is conducted entirely outside the state, it is presumed that the two business operations are unitary in nature, interrelated, connected, and interdependent unless it can be shown to the contrary.

 

(e) Unity of ownership does not exist when two or more corporations are involved unless more than 50 percent of the voting stock of each corporation is directly or indirectly owned by a common owner or by common owners, either corporate or noncorporate, or by one or more of the member corporations of the group.  For this purpose, the term "voting stock" shall include membership interests of mutual insurance holding companies formed under section 66A.40.

 

(f) The net income and apportionment factors under section 290.191 or 290.20 of foreign corporations and other foreign entities, but excluding a disqualified captive insurance company, which are part of a unitary business shall not be included in the net income or the apportionment factors of the unitary business; except that the income and apportionment factors of a foreign entity, other than an entity treated as a C corporation for federal income tax purposes, that are included in the federal taxable income, as defined in section 63 of the Internal Revenue Code as amended through the date named in section 290.01, subdivision 19, of a domestic corporation, domestic entity, or individual must be included in determining net income and the factors to be used in the apportionment of net income pursuant to section 290.191 or 290.20.  A foreign corporation or other foreign entity which is not included on a combined report and which is required to file a return under this chapter shall file on a separate return basis.

 

(g) (f) For purposes of determining the net income of a unitary business and the factors to be used in the apportionment of net income pursuant to section 290.191 or 290.20, there must be included only the income and apportionment factors of domestic and foreign corporations or other domestic and foreign entities that are determined to be part of the unitary business pursuant to this subdivision, notwithstanding that foreign corporations or other foreign entities might be included in the unitary business; except that the income and apportionment factors of a foreign entity, other than an entity treated as a C corporation for federal income tax purposes, that is included in the federal taxable income, as defined in section 63 of the Internal Revenue Code as amended through the date named in section 290.01, subdivision 19, of a domestic corporation, domestic entity, or individual must be included in determining net income and the factors to be used in the apportionment of net income pursuant to section 290.191 or 290.20.  For foreign corporations and other foreign entities not subject to a federal income tax filing requirement under United States Code, title 26, subtitle A, net income must be determined as required under section 290.01, subdivision 19.

 

(h) (g) Each corporation or other entity, except a sole proprietorship, that is part of a unitary business must file combined reports as the commissioner determines.  On the reports, all intercompany transactions between entities included pursuant to paragraph (g) (f) must be eliminated and the entire net income of the unitary business determined in accordance with this subdivision is apportioned among the entities by using each entity's Minnesota factors for apportionment purposes in the numerators of the apportionment formula and the total factors for apportionment purposes of all entities included pursuant to paragraph (g) (f) in the denominators of the apportionment formula.  Except as otherwise provided by paragraph (f), all sales of the unitary business made within this state pursuant to section 290.191 or 290.20 must be included on the combined report of a corporation or other entity that is a member of the unitary business and is subject to the jurisdiction of this state to impose tax under this chapter.


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(i) (h) If a corporation has been divested from a unitary business and is included in a combined report for a fractional part of the common accounting period of the combined report:

 

(1) its income includable in the combined report is its income incurred for that part of the year determined by proration or separate accounting; and

 

(2) its sales, property, and payroll included in the apportionment formula must be prorated or accounted for separately.

 

(j) (i) For purposes of this subdivision, "insurance company" means an insurance company, as defined in section 290.01, subdivision 5b, that is not a disqualified captive insurance company.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2023.

 

Sec. 42.  Minnesota Statutes 2022, section 290.17, is amended by adding a subdivision to read:

 

Subd. 4a.  Foreign corporations and other foreign entities.  (a) For purposes of imposing a tax under this chapter, the federal taxable income of a foreign corporation or other foreign entity must be computed as follows:

 

(1) a profit and loss statement must be prepared in the currency in which the books of account of the foreign corporation or other foreign entity are regularly maintained;

 

(2) except as determined by the commissioner, adjustments must be made to the profit and loss statement to conform the statement to the accounting principles generally accepted in the United States for the preparation of those statements;

 

(3) adjustments must be made to the profit and loss statement to conform it to the tax accounting standards required by the commissioner;

 

(4) unless otherwise authorized by the commissioner, the profit and loss statement of each member of the combined group, and the apportionment factors related to the combined group, whether domestic or foreign, must be converted into United States dollars; and

 

(5) income apportioned to this state must be expressed in United States dollars.

 

(b) Notwithstanding paragraph (a), if the commissioner determines that the information required in the statements under that paragraph may only be obtained through a burdensome effort and expense, the commissioner may allow reasonable approximations of the information.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2023.

 

Sec. 43.  Minnesota Statutes 2022, section 290.21, subdivision 9, is amended to read:

 

Subd. 9.  Controlled foreign corporations.  The net income of a domestic nonunitary corporation that is included pursuant to section 951 of the Internal Revenue Code is dividend income.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2023, except the stricken language is effective the day following final enactment.


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Sec. 44.  Minnesota Statutes 2022, section 297I.20, subdivision 4, is amended to read:

 

Subd. 4.  Film production credit.  (a) A taxpayer may claim a credit against the premiums tax imposed under this chapter equal to the amount indicated on the credit certificate statement issued to the company under section 116U.27.  If the amount of the credit exceeds the taxpayer's liability for tax under this chapter, the excess is a credit carryover to each of the five succeeding taxable years.  The entire amount of the excess unused credit for the taxable year must be carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried.  This credit does not affect the calculation of fire state aid under section 477B.03 and police state aid under section 477C.03.

 

(b) This subdivision expires January 1, 2025 2033, for taxable years beginning after and premiums received after December 31, 2024 2032.

 

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

 

Sec. 45.  Minnesota Statutes 2022, section 514.972, subdivision 5, is amended to read:

 

Subd. 5.  Access to certain items.  (a) Any occupant may remove from the self-storage facility personal papers and health aids upon demand made to any of the persons listed in section 514.976, subdivision 1.

 

(b) An occupant who provides documentation from a government or nonprofit agency or legal aid office that the occupant is a recipient of relief based on need, is eligible for legal aid services, or is a survivor of domestic violence or sexual assault may remove, in addition to the items provided in paragraph (a), personal clothing of the occupant and the occupant's dependents and tools of the trade that are necessary for the livelihood of the occupant that has a market value not to exceed $125 per item.

 

(c) The occupant shall present a list of the items and may remove the items during the facility's ordinary business hours prior to the sale authorized by section 514.973.  If the owner unjustifiably denies the occupant access for the purpose of removing the items specified in this subdivision, the occupant is entitled to request relief from the court for an order allowing access to the storage space for removal of the specified items.  The self-service storage facility is liable to the occupant for the costs, disbursements, and attorney fees expended by the occupant to obtain this order.

 

(d) For the purposes of this subdivision, "relief based on need" includes but is not limited to receipt of a benefit from the Minnesota family investment program and diversionary work program, medical assistance, general assistance, emergency general assistance, Minnesota supplemental aid, Minnesota supplemental aid housing assistance, MinnesotaCare, Supplemental Security Income, energy assistance, emergency assistance, Supplemental Nutrition Assistance Program benefits, earned income tax credit, or Minnesota child and working family tax credit.  Relief based on need can also be proven by providing documentation from a legal aid organization that the individual is receiving legal aid assistance, or by providing documentation from a government agency, nonprofit, or housing assistance program that the individual is receiving assistance due to domestic violence or sexual assault.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2022.

 

Sec. 46.  ONE-TIME REFUNDABLE CREDIT PAYMENT.

 

Subdivision 1.  Credit allowed; eligibility.  (a) For taxable years beginning after December 31, 2020, and before January 1, 2022, an individual is allowed a credit against the tax imposed under Minnesota Statutes, chapter 290.  The credit equals $550 for a married taxpayer filing a joint return and $275 for a single filer, head of household, or married taxpayer filing a separate return.


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(b) For an individual, or a married couple filing a joint income tax return, with a dependent, as defined in sections 151 and 152 of the Internal Revenue Code, the credit is increased by $275 per dependent up to a maximum additional credit of $825.

 

(c) The credit is not available to an individual who:

 

(1) was not a resident of Minnesota, as defined in Minnesota Statutes, section 290.01, subdivision 7, during any part of 2021;

 

(2) is a dependent, as defined in sections 151 and 152 of the Internal Revenue Code, for 2021; or

 

(3) had adjusted gross income, as defined in Minnesota Statutes, section 290.01, subdivision 21a, for taxable years beginning in 2021 greater than:

 

(i) $150,000 for a married taxpayer filing a joint return; and

 

(ii) $75,000 for all other income tax filers.

 

(d) For an individual who is a Minnesota resident for only part of 2021, or for a married couple filing a joint return where one or both individuals were not Minnesota residents for all of 2021, the credit equals the credit allowed under paragraphs (a) to (c) multiplied by the percentage calculated under Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e).

 

(e) If the amount of the credit under this subdivision exceeds the individual's or the married couple's liability for tax under Minnesota Statutes, chapter 290, the commissioner shall refund the excess to the taxpayer. 

 

Subd. 2.  Internal Revenue Code.  The definitions in Minnesota Statutes, section 290.01, apply to this section.

 

Subd. 3.  Data classification.  Data classified as nonpublic data or private data on individuals, including return information, as defined in Minnesota Statutes, section 270B.01, subdivision 3, may be shared or disclosed between the commissioner of revenue and any third-party vendor contracted with under this section, to the extent necessary to administer this section.

 

Subd. 4.  Credit not subject to recapture.  The commissioner of revenue must not apply, and must not certify to another agency to apply, a refund based on a credit under this section, to any unpaid tax or nontax debt.

 

Subd. 5.  Not income.  (a) A refund of a credit under this section is not considered income in determining Minnesota income tax, Minnesota income tax credits, the Minnesota property tax refund, or the Minnesota senior citizen property tax deferral.

 

(b) Notwithstanding any law to the contrary, the credit under this section must not be considered income, assets, or personal property for purposes of determining eligibility or recertifying eligibility for:

 

(1) child care assistance programs under Minnesota Statutes, chapter 119B;

 

(2) general assistance, Minnesota supplemental aid, and food support under Minnesota Statutes, chapter 256D;

 

(3) housing support under Minnesota Statutes, chapter 256I;

 

(4) the Minnesota family investment program and diversionary work program under Minnesota Statutes, chapter 256J; and


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(5) economic assistance programs under Minnesota Statutes, chapter 256P.

 

(c) The commissioner of human services must not consider a credit under this section as income or assets under Minnesota Statutes, section 256B.056, subdivision 1a, paragraph (a); 3; or 3c, or for persons with eligibility determined under Minnesota Statutes, section 256B.057, subdivision 3, 3a, or 3b.

 

Subd. 6.  Simplified filing process.  The commissioner of revenue must establish a simplified filing process through which a taxpayer who did not file an individual income tax return due to a lack of a requirement to file may file a return and claim the credit under this section.  The filing process and forms may be in the form or manner determined by the commissioner, but must be designed to reduce the complexity of the filing process and the time needed to file for individuals without a filing requirement.

 

Subd. 7.  Appropriation.  The amount necessary to make the refunds based on credits payable under this section is appropriated to the commissioner of revenue from the general fund.  This appropriation is available until June 30, 2025.

 

Subd. 8.  Distribution of refunds.  To the extent feasible, the commissioner of revenue must directly distribute any refunds owed as a result of this section to eligible taxpayers who filed a return for a taxable year beginning after December 31, 2020, or before January 1, 2022.  A taxpayer who is eligible for a credit but did not file a return may file a return and claim the credit, subject to the provisions of Minnesota Statutes, section 289A.40.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2020, and before January 1, 2022.

 

Sec. 47.  SUBTRACTION; CERTAIN UNEMPLOYMENT COMPENSATION.

 

(a) For the purposes of this section, "subtraction" has the meaning given in Minnesota Statutes, section 290.0132, subdivision 1, and the rules in that subdivision apply for this section.

 

(b) Unemployment compensation received by individuals in taxable years beginning after December 31, 2020, and before January 1, 2022, as a result of the decision issued by the Minnesota Court of Appeals, 956 N. W. 2d 1, filed February 22, 2021, is a subtraction. 

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2020, and before January 1, 2022.

 

Sec. 48.  EXTENSION OF STATUTE OF LIMITATIONS; CREDIT FOR PARENTS OF STILLBORN CHILDREN.

 

Notwithstanding any law to the contrary, a taxpayer whose tax liability changes as a result of the retroactive changes to Minnesota Statutes, section 290.0685 in this act, may file an amended return by December 31, 2023.  The commissioner may review and assess the return of a taxpayer covered by this provision for the later of:

 

(1) the periods under Minnesota Statutes, sections 289A.38, 289A.39, subdivision 3, and 289A.40; or

 

(2) one year from the time the amended return is filed as a result of a change in tax liability under this section.

 

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

 

Sec. 49.  REPEALER.

 

Minnesota Statutes 2022, sections 290.01, subdivision 19i; and 290.0131, subdivision 18, are repealed.

 

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


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ARTICLE 2

FEDERAL CONFORMITY

 

Section 1.  Minnesota Statutes 2022, section 289A.02, subdivision 7, as amended by Laws 2023, 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 15, 2022 March 1, 2023.

 

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. 2.  Minnesota Statutes 2022, section 290.01, subdivision 19, as amended by Laws 2023, chapter 1, section 4, is amended to read:

 

Subd. 19.  Net income.  (a) For a trust or estate taxable under section 290.03, and a corporation taxable under section 290.02, 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 sections 290.0131 to 290.0136.

 

(b) For an individual, the term "net income" means federal adjusted gross income with the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

 

(c) In the case of a regulated investment company or a fund thereof, as defined in section 851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, except that:

 

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal Revenue Code does not apply;

 

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue Code must be applied by allowing a deduction for capital gain dividends and exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; and

 

(3) the deduction for dividends paid must also be applied in the amount of any undistributed capital gains which the regulated investment company elects to have treated as provided in section 852(b)(3)(D) of the Internal Revenue Code.

 

(d) 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.

 

(e) 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.

 

(f) The Internal Revenue Code of 1986, as amended through December 15, 2022 March 1, 2023, applies for taxable years beginning after December 31, 1996.


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(g) Except as otherwise provided, references to the Internal Revenue Code in this subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of determining net income for the applicable year.

 

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

 

Sec. 3.  Minnesota Statutes 2022, section 290.01, subdivision 31, as amended by Laws 2023, chapter 1, section 5, 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 15, 2022 March 1, 2023.  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.

 

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. 4.  Minnesota Statutes 2022, section 290.06, subdivision 2c, as amended by Laws 2023, chapter 1, section 15, is amended to read:

 

Subd. 2c.  Schedules of rates for individuals, estates, and trusts.  (a) The income taxes imposed by this chapter upon married individuals filing joint returns and surviving spouses as defined in section 2(a) of the Internal Revenue Code must be computed by applying to their taxable net income the following schedule of rates:

 

(1) On the first $38,770, 5.35 percent;

 

(2) On all over $38,770, but not over $154,020, 6.8 percent;

 

(3) On all over $154,020, but not over $269,010, 7.85 percent;

 

(4) On all over $269,010, 9.85 percent.

 

Married individuals filing separate returns, estates, and trusts must compute their income tax by applying the above rates to their taxable income, except that the income brackets will be one-half of the above amounts after the adjustment required in subdivision 2d.

 

(b) The income taxes imposed by this chapter upon unmarried individuals must be computed by applying to taxable net income the following schedule of rates:

 

(1) On the first $26,520, 5.35 percent;

 

(2) On all over $26,520, but not over $87,110, 6.8 percent;

 

(3) On all over $87,110, but not over $161,720, 7.85 percent;

 

(4) On all over $161,720, 9.85 percent.


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(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as a head of household as defined in section 2(b) of the Internal Revenue Code must be computed by applying to taxable net income the following schedule of rates:

 

(1) On the first $32,650, 5.35 percent;

 

(2) On all over $32,650, but not over $131,190, 6.8 percent;

 

(3) On all over $131,190, but not over $214,980, 7.85 percent;

 

(4) On all over $214,980, 9.85 percent.

 

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax of any individual taxpayer whose taxable net income for the taxable year is less than an amount determined by the commissioner must be computed in accordance with tables prepared and issued by the commissioner of revenue based on income brackets of not more than $100.  The amount of tax for each bracket shall be computed at the rates set forth in this subdivision, provided that the commissioner may disregard a fractional part of a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

 

(e) An individual who is not a Minnesota resident for the entire year must compute the individual's Minnesota income tax as provided in this subdivision.  After the application of the nonrefundable credits provided in this chapter, the tax liability must then be multiplied by a fraction in which:

 

(1) the numerator is the individual's Minnesota source federal adjusted gross income as defined in section 62 of the Internal Revenue Code and increased by:

 

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 17, 19, and 20, and 290.0137, paragraph (a); and reduced by

 

(ii) the Minnesota assignable portion of the subtraction for United States government interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132, subdivisions 9, 10, 14, 15, 17, 18, 27, and 31, and 32, and 290.0137, paragraph (c), after applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

 

(2) the denominator is the individual's federal adjusted gross income as defined in section 62 of the Internal Revenue Code, increased by:

 

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 17, 19, and 20, and 290.0137, paragraph (a); and reduced by

 

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27, and 31, and 32, and 290.0137, paragraph (c).

 

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision 7a, paragraph (b), the individual must compute the individual's Minnesota income tax as provided in paragraph (e), and also must include, to the extent attributed to the electing qualifying entity:

 

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the addition under section 290.0131, subdivision 5; and


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(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the subtraction under section 290.0132, subdivision 3.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2018.

 

Sec. 5.  Minnesota Statutes 2022, section 290A.03, subdivision 15, as amended by Laws 2023, chapter 1, section 20, is amended to read:

 

Subd. 15.  Internal Revenue Code.  "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through December 15, 2022 March 1, 2023.

 

EFFECTIVE DATE.  This section is effective beginning with refunds based on rent paid in 2023 and property taxes payable in 2024.

 

Sec. 6.  Minnesota Statutes 2022, section 291.005, subdivision 1, as amended by Laws 2023, chapter 1, section 21, is amended to read:

 

Subdivision 1.  Scope.  Unless the context otherwise clearly requires, the following terms used in this chapter shall have the following meanings:

 

(1) "Commissioner" means the commissioner of revenue or any person to whom the commissioner has delegated functions under this chapter.

 

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued and otherwise determined for federal estate tax purposes under the Internal Revenue Code, increased by the value of any property in which the decedent had a qualifying income interest for life and for which an election was made under section 291.03, subdivision 1d, for Minnesota estate tax purposes, but was not made for federal estate tax purposes.

 

(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended through December 15, 2022 March 1, 2023.

 

(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a) excluding therefrom any property included in the estate which has its situs outside Minnesota, and (b) including any property omitted from the federal gross estate which is includable in the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.

 

(5) "Nonresident decedent" means an individual whose domicile at the time of death was not in Minnesota.

 

(6) "Personal representative" means the executor, administrator or other person appointed by the court to administer and dispose of the property of the decedent.  If there is no executor, administrator or other person appointed, qualified, and acting within this state, then any person in actual or constructive possession of any property having a situs in this state which is included in the federal gross estate of the decedent shall be deemed to be a personal representative to the extent of the property and the Minnesota estate tax due with respect to the property.

 

(7) "Resident decedent" means an individual whose domicile at the time of death was in Minnesota.  The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply to determinations of domicile under this chapter.

 

(8) "Situs of property" means, with respect to:

 

(i) real property, the state or country in which it is located;


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(ii) tangible personal property, the state or country in which it was normally kept or located at the time of the decedent's death or for a gift of tangible personal property within three years of death, the state or country in which it was normally kept or located when the gift was executed;

 

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue Code, owned by a nonresident decedent and that is normally kept or located in this state because it is on loan to an organization, qualifying as exempt from taxation under section 501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

 

(iv) intangible personal property, the state or country in which the decedent was domiciled at death or for a gift of intangible personal property within three years of death, the state or country in which the decedent was domiciled when the gift was executed.

 

For a nonresident decedent with an ownership interest in a pass-through entity with assets that include real or tangible personal property, situs of the real or tangible personal property, including qualified works of art, is determined as if the pass-through entity does not exist and the real or tangible personal property is personally owned by the decedent.  If the pass-through entity is owned by a person or persons in addition to the decedent, ownership of the property is attributed to the decedent in proportion to the decedent's capital ownership share of the pass-through entity.

 

(9) "Pass-through entity" includes the following:

 

(i) an entity electing S corporation status under section 1362 of the Internal Revenue Code;

 

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

 

(iii) a single-member limited liability company or similar entity, regardless of whether it is taxed as an association or is disregarded for federal income tax purposes under Code of Federal Regulations, title 26, section 301.7701-3; or

 

(iv) a trust to the extent the property is includable in the decedent's federal gross estate; but excludes

 

(v) an entity whose ownership interest securities are traded on an exchange regulated by the Securities and Exchange Commission as a national securities exchange under section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.

 

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. 7.  Laws 2023, chapter 1, section 15, the effective date, is amended to read:

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2022 2019.

 

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

 

Sec. 8.  REPEALER.

 

Minnesota Statutes 2022, section 290.0132, subdivision 33, as added by Laws 2023, chapter 1, section 12, is repealed.

 

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


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ARTICLE 3

PROPERTY TAXES

 

Section 1.  Minnesota Statutes 2022, section 272.01, subdivision 2, is amended to read:

 

Subd. 2.  Exempt property used by private entity for profit.  (a) When any real or personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is leased, loaned, or otherwise made available and used by a private individual, association, or corporation in connection with a business conducted for profit, there shall be imposed a tax, for the privilege of so using or possessing such real or personal property, in the same amount and to the same extent as though the lessee or user was the owner of such property.

 

(b) The tax imposed by this subdivision shall not apply to:

 

(1) property leased or used as a concession in or relative to the use in whole or part of a public park, market, fairgrounds, port authority, economic development authority established under chapter 469, municipal auditorium, municipal parking facility, municipal museum, or municipal stadium;

 

(2) except as provided in paragraph (c), property of an airport owned by a city, town, county, or group thereof which that is:

 

(i) leased to or used by any person or entity including a fixed base operator; and

 

(ii) used as a hangar for the storage or, repair, or manufacture of aircraft or to provide aviation goods, services, or facilities to the airport or general public;

 

the exception from taxation provided in this clause does not apply to:

 

(i) property located at an airport owned or operated by the Metropolitan Airports Commission or by a city of over 50,000 population according to the most recent federal census or such a city's airport authority; or

 

(ii) hangars leased by a private individual, association, or corporation in connection with a business conducted for profit other than an aviation-related business;

 

(3) property constituting or used as a public pedestrian ramp or concourse in connection with a public airport;

 

(4) except as provided in paragraph (d), property constituting or used as a passenger check-in area or ticket sale counter, boarding area, or luggage claim area in connection with a public airport but not the airports owned or operated by the Metropolitan Airports Commission or cities of over 50,000 population or an airport authority therein.  Real estate owned by a municipality in connection with the operation of a public airport and leased or used for agricultural purposes is not exempt;

 

(5) property leased, loaned, or otherwise made available to a private individual, corporation, or association under a cooperative farming agreement made pursuant to section 97A.135; or

 

(6) property leased, loaned, or otherwise made available to a private individual, corporation, or association under section 272.68, subdivision 4.

 

(c) The exception from taxation provided in paragraph (b), clause (2), does not apply to:

 

(1) property located at an airport owned or operated by:

 

(i) the Metropolitan Airports Commission; or


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(ii) a city of over 50,000 population according to the most recent federal census or such a city's airport authority, except that, when calculating the tax imposed by this subdivision for property taxes payable in 2024 through 2035, the net tax capacity of such property is reduced by 50 percent if it is owned or operated by a city of over 50,000 but under 150,000 in population according to the most recent federal census or by such a city's airport authority; or

 

(2) hangars leased by a private individual, association, or corporation in connection with a business conducted for profit other than an aviation-related business.

 

(d) The exception from taxation provided in paragraph (b), clause (4), does not apply to:

 

(1) the property described in paragraph (b), clause (4), at airports that are owned or operated by:

 

(i) the Metropolitan Airports Commission; or

 

(ii) a city of over 50,000 population or an airport authority therein, except that, when calculating the tax imposed by this subdivision for property taxes payable in 2024 through 2035, the net tax capacity of such property is reduced by 50 percent if it is owned or operated by a city of over 50,000 but under 150,000 in population according to the most recent federal census or by such a city's airport authority; or

 

(2) real estate owned by a municipality in connection with the operation of a public airport and leased or used for agricultural purposes.

 

(c) (e) Taxes imposed by this subdivision are payable as in the case of personal property taxes and shall be assessed to the lessees or users of real or personal property in the same manner as taxes assessed to owners of real or personal property, except that such taxes shall not become a lien against the property.  When due, the taxes shall constitute a debt due from the lessee or user to the state, township, city, county, and school district for which the taxes were assessed and shall be collected in the same manner as personal property taxes.  If property subject to the tax imposed by this subdivision is leased or used jointly by two or more persons, each lessee or user shall be jointly and severally liable for payment of the tax.

 

(d) (f) The tax on real property of the federal government, the state or any of its political subdivisions that is leased, loaned, or otherwise made available to a private individual, association, or corporation and becomes taxable under this subdivision or other provision of law must be assessed and collected as a personal property assessment.  The taxes do not become a lien against the real property.

 

EFFECTIVE DATE.  This section is effective beginning with property taxes payable in 2024.

 

Sec. 2.  Minnesota Statutes 2022, section 272.02, subdivision 24, is amended to read:

 

Subd. 24.  Solar energy generating systems.  Personal property consisting of solar energy generating systems, as defined in section 272.0295, is exempt.  If the real property upon which a solar energy generating system is located is used primarily for solar energy production subject to the production tax under section 272.0295, the real property shall be classified as class 3a.  If the real property upon which a solar energy generating system is located is not used primarily for solar energy production subject to the production tax under section 272.0295, the real property shall be classified without regard to the system.  If real property contains more than one solar energy generating system that cannot be combined with the nameplate capacity of another solar energy generating system for the purposes of the production tax under section 272.0295, but is in aggregate over one megawatt, then the real property upon which the systems are located shall be classified as class 3a.

 

EFFECTIVE DATE.  This section is effective beginning with property taxes payable in 2024 and thereafter.


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Sec. 3.  Minnesota Statutes 2022, section 272.02, subdivision 98, is amended to read:

 

Subd. 98.  Certain property owned by an Indian tribe.  (a) Property is exempt that:

 

(1) was classified as 3a under section 273.13, subdivision 24, for taxes payable in 2013;

 

(2) is located in a city of the first class with a population greater than 300,000 as of the 2010 federal census;

 

(3) was on January 2, 2012, and is for the current assessment owned by a federally recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota; and

 

(4) is used exclusively for tribal purposes or institutions of purely public charity as defined in subdivision 7.

 

(b) For purposes of this subdivision, a "tribal purpose" means a public purpose as defined in subdivision 8 and includes noncommercial tribal government activities.  Property that qualifies for the exemption under this subdivision is limited to no more than two contiguous parcels and structures that do not exceed in the aggregate 20,000 square feet.  Property acquired for single-family housing, market-rate apartments, agriculture, or forestry does not qualify for this exemption.  The exemption created by This subdivision expires with taxes payable in 2024 2034.

 

(c) Property exempt under this section is exempt from the requirements of section 272.025.  Upon the written request of an assessor, all books and records relating to the ownership or use of the property which are reasonably necessary to verify that the property qualifies for exemption shall be made available to the assessor.

 

EFFECTIVE DATE.  This section is effective for property taxes payable in 2023 and thereafter.

 

Sec. 4.  Minnesota Statutes 2022, section 272.02, is amended by adding a subdivision to read:

 

Subd. 105.  Elderly living facility.  An elderly living facility is exempt from taxation if it meets all of the following requirements:

 

(1) the facility is located in a city of the first class with a population of fewer than 110,000;

 

(2) the facility is owned and operated by a nonprofit organization with tax exempt status under section 501(c)(3) of the Internal Revenue Code;

 

(3) construction of the facility was completed between January 1, 1963, and January 1, 1964;

 

(4) the facility is an assisted living facility licensed by the state of Minnesota;

 

(5) residents of the facility must be (i) at least 55 years of age, or (ii) disabled; and

 

(6) at least 30 percent of the units in the facility are occupied by persons whose annual income does not exceed 50 percent of the median family income for the area.

 

For assessment year 2022 only, an exemption application under this section must be filed with the county assessor by June 15, 2023.

 

EFFECTIVE DATE.  This section is effective beginning with taxes payable in 2023.


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Sec. 5.  Minnesota Statutes 2022, section 273.11, subdivision 12, is amended to read:

 

Subd. 12.  Community land trusts.  (a) A community land trust, as defined under chapter 462A, is (i) a community-based nonprofit corporation organized under chapter 317A, which qualifies for tax exempt status under 501(c)(3), or (ii) a "city" as defined in section 462C.02, subdivision 6, which has received funding from the Minnesota housing finance agency for purposes of the community land trust program.  The Minnesota Housing Finance Agency shall set the criteria for community land trusts.

 

(b) Before the community land trust can rent or sell a unit to an applicant, the community land trust shall verify to the satisfaction of the administering agency or the city that the family income of each person or family applying for a unit in the community land trust building is within the income criteria provided in section 462A.30, subdivision 9.  The administering agency or the city shall verify to the satisfaction of the county assessor that the occupant meets the income criteria under section 462A.30, subdivision 9.  The property tax benefits under paragraph (c) shall be granted only to property owned or rented by persons or families within the qualifying income limits.  The family income criteria and verification is only necessary at the time of initial occupancy in the property.

 

(c) A unit which is owned by the occupant and used as a homestead by the occupant qualifies for homestead treatment as class 1a under section 273.13, subdivision 22, or class 4d if the requirements of section 273.13, subdivision 25, paragraph (e), clause (2), are met.  A unit which is rented by the occupant and used as a homestead by the occupant shall be class 4a or 4b property, under section 273.13, subdivision 25, whichever is applicable.  Any remaining portion of the property not used for residential purposes shall be classified by the assessor in the appropriate class based upon the use of that portion of the property owned by the community land trust.  The land upon which the building is located shall be assessed at the same classification rate as the units within the building, provided that if the building contains some units assessed as class 1a or class 4d and some units assessed as class 4a or 4b, the market value of the land will be assessed in the same proportions as the value of the building.

 

EFFECTIVE DATE.  This section is effective beginning with assessment year 2024 and thereafter.

 

Sec. 6.  Minnesota Statutes 2022, section 273.124, subdivision 6, is amended to read:

 

Subd. 6.  Leasehold cooperatives.  When one or more dwellings or one or more buildings which each contain several dwelling units is owned by a nonprofit corporation subject to the provisions of chapter 317A and qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code, or a limited partnership which corporation or partnership operates the property in conjunction with a cooperative association, and has received public financing, homestead treatment may be claimed by the cooperative association on behalf of the members of the cooperative for each dwelling unit occupied by a member of the cooperative.  The cooperative association must provide the assessor with the Social Security numbers or individual taxpayer identification numbers of those members.  To qualify for the treatment provided by this subdivision, the following conditions must be met:

 

(a) the cooperative association must be organized under chapter 308A or 308B and all voting members of the board of directors must be resident tenants of the cooperative and must be elected by the resident tenants of the cooperative;

 

(b) the cooperative association must have a lease for occupancy of the property for a term of at least 20 years, which permits the cooperative association, while not in default on the lease, to participate materially in the management of the property, including material participation in establishing budgets, setting rent levels, and hiring and supervising a management agent;

 

(c) to the extent permitted under state or federal law, the cooperative association must have a right under a written agreement with the owner to purchase the property if the owner proposes to sell it; if the cooperative association does not purchase the property it is offered for sale, the owner may not subsequently sell the property to another purchaser at a price lower than the price at which it was offered for sale to the cooperative association unless the cooperative association approves the sale;


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(d) a minimum of 40 percent of the cooperative association's members must have incomes at or less than 60 percent of area median gross income as determined by the United States Secretary of Housing and Urban Development under section 142(d)(2)(B) of the Internal Revenue Code.  For purposes of this clause, "member income" means the income of a member existing at the time the member acquires cooperative membership;

 

(e) if a limited partnership owns the property, it must include as the managing general partner a nonprofit organization operating under the provisions of chapter 317A and qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code and the limited partnership agreement must provide that the managing general partner have sufficient powers so that it materially participates in the management and control of the limited partnership;

 

(f) prior to becoming a member of a leasehold cooperative described in this subdivision, a person must have received notice that (1) describes leasehold cooperative property in plain language, including but not limited to the effects of classification under this subdivision on rents, property taxes and tax credits or refunds, and operating expenses, and (2) states that copies of the articles of incorporation and bylaws of the cooperative association, the lease between the owner and the cooperative association, a sample sublease between the cooperative association and a tenant, and, if the owner is a partnership, a copy of the limited partnership agreement, can be obtained upon written request at no charge from the owner, and the owner must send or deliver the materials within seven days after receiving any request;

 

(g) if a dwelling unit of a building was occupied on the 60th day prior to the date on which the unit became leasehold cooperative property described in this subdivision, the notice described in paragraph (f) must have been sent by first class mail to the occupant of the unit at least 60 days prior to the date on which the unit became leasehold cooperative property.  For purposes of the notice under this paragraph, the copies of the documents referred to in paragraph (f) may be in proposed version, provided that any subsequent material alteration of those documents made after the occupant has requested a copy shall be disclosed to any occupant who has requested a copy of the document.  Copies of the articles of incorporation and certificate of limited partnership shall be filed with the secretary of state after the expiration of the 60-day period unless the change to leasehold cooperative status does not proceed;

 

(h) the county attorney of the county in which the property is located must certify to the assessor that the property meets the requirements of this subdivision;

 

(i) the public financing received must be from at least one of the following sources:

 

(1) tax increment financing proceeds used for the acquisition or rehabilitation of the building or interest rate write-downs relating to the acquisition of the building;

 

(2) government issued bonds exempt from taxes under section 103 of the Internal Revenue Code, the proceeds of which are used for the acquisition or rehabilitation of the building;

 

(3) programs under section 221(d)(3), 202, or 236, of Title II of the National Housing Act;

 

(4) rental housing program funds under Section 8 of the United States Housing Act of 1937, as amended, or the market rate family graduated payment mortgage program funds administered by the Minnesota Housing Finance Agency that are used for the acquisition or rehabilitation of the building;

 

(5) low-income housing credit under section 42 of the Internal Revenue Code;

 

(6) public financing provided by a local government used for the acquisition or rehabilitation of the building, including grants or loans from (i) federal community development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued under chapter 474A; or


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(7) other rental housing program funds provided by the Minnesota Housing Finance Agency for the acquisition or rehabilitation of the building;

 

(j) at the time of the initial request for homestead classification or of any transfer of ownership of the property, the governing body of the municipality in which the property is located must hold a public hearing and make the following findings:

 

(1) that the granting of the homestead treatment of the apartment's units will facilitate safe, clean, affordable housing for the cooperative members that would otherwise not be available absent the homestead designation;

 

(2) that the owner has presented information satisfactory to the governing body showing that the savings garnered from the homestead designation of the units will be used to reduce tenant's rents or provide a level of furnishing or maintenance not possible absent the designation; and

 

(3) that the requirements of paragraphs (b), (d), and (i) have been met.

 

Homestead treatment must be afforded to units occupied by members of the cooperative association and the units must be assessed as provided in subdivision 3, provided that any unit not so occupied shall be classified and assessed pursuant to the appropriate class.  No more than three acres of land may, for assessment purposes, be included with each dwelling unit that qualifies for homestead treatment under this subdivision.

 

When dwelling units no longer qualify under this subdivision, the current owner must notify the assessor within 60 days.  Failure to notify the assessor within 60 days shall result in the loss of benefits under this subdivision for taxes payable in the year that the failure is discovered.  For these purposes, "benefits under this subdivision" means the difference in the net tax capacity of the units which no longer qualify as computed under this subdivision and as computed under the otherwise applicable law, times the local tax rate applicable to the building for that taxes payable year.  Upon discovery of a failure to notify, the assessor shall inform the auditor of the difference in net tax capacity for the building or buildings in which units no longer qualify, and the auditor shall calculate the benefits under this subdivision.  Such amount, plus a penalty equal to 100 percent of that amount, shall then be demanded of the building's owner.  The property owner may appeal the county's determination by serving copies of a petition for review with county officials as provided in section 278.01 and filing a proof of service as provided in section 278.01 with the Minnesota Tax Court within 60 days of the date of the notice from the county.  The appeal shall be governed by the Tax Court procedures provided in chapter 271, for cases relating to the tax laws as defined in section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and 278.03, but including section 278.05, subdivision 2.  If the amount of the benefits under this subdivision and penalty are not paid within 60 days, and if no appeal has been filed, the county auditor shall certify the amount of the benefit and penalty to the succeeding year's tax list to be collected as part of the property taxes on the affected buildings.

 

EFFECTIVE DATE.  This section is effective retroactively for homestead applications filed in 2023 and thereafter.

 

Sec. 7.  Minnesota Statutes 2022, 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.

 

(b) 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.


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(c) Every property owner applying for homestead classification must furnish to the county assessor the Social Security number or individual taxpayer identification 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 or individual taxpayer identification number of the spouse of each occupying owner.  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 or individual taxpayer identification 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 or individual taxpayer identification 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 or individual taxpayer identification number of each relative occupying the property and the name and Social Security number or individual taxpayer identification number of the 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 or individual taxpayer identification number of a relative occupying the property or the spouse of a relative 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 31, 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 retroactively for homestead applications filed in 2023 and thereafter.


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Sec. 8.  Minnesota Statutes 2022, section 273.124, subdivision 13a, is amended to read:

 

Subd. 13a.  Occupant list.  At the request of the commissioner, each county must give the commissioner a list that includes the name and Social Security number or individual taxpayer identification number of each occupant of homestead property who is the property owner, property owner's spouse, qualifying relative of a property owner, or a spouse of a qualifying relative.  The commissioner shall use the information provided on the lists as appropriate under the law, including for the detection of improper claims by owners, or relatives of owners, under chapter 290A.

 

EFFECTIVE DATE.  This section is effective for homestead data provided to the commissioner in 2024 and thereafter.

 

Sec. 9.  Minnesota Statutes 2022, section 273.124, subdivision 13c, is amended to read:

 

Subd. 13c.  Property lists.  In addition to lists of homestead properties, the commissioner may ask the counties to furnish lists of all properties and the record owners.  The Social Security numbers, individual taxpayer identification numbers, and federal identification numbers that are maintained by a county or city assessor for property tax administration purposes, and that may appear on the lists retain their classification as private or nonpublic data; but may be viewed, accessed, and used by the county auditor or treasurer of the same county for the limited purpose of assisting the commissioner in the preparation of microdata samples under section 270C.12.  The commissioner shall use the information provided on the lists as appropriate under the law, including for the detection of improper claims by owners, or relatives of owners, under chapter 290A.

 

EFFECTIVE DATE.  This section is effective for homestead data provided to the commissioner in 2024 and thereafter.

 

Sec. 10.  Minnesota Statutes 2022, section 273.124, subdivision 13d, is amended to read:

 

Subd. 13d.  Homestead data.  On or before April 30 each year beginning in 2007, each county must provide the commissioner with the following data for each parcel of homestead property by electronic means as defined in section 289A.02, subdivision 8:

 

(1) the property identification number assigned to the parcel for purposes of taxes payable in the current year;

 

(2) the name and Social Security number or individual taxpayer identification number of each occupant of homestead property who is the property owner or qualifying relative of a property owner, and the spouse of the property owner who occupies homestead property or spouse of a qualifying relative of a property owner who occupies homestead property;

 

(3) the classification of the property under section 273.13 for taxes payable in the current year and in the prior year;

 

(4) an indication of whether the property was classified as a homestead for taxes payable in the current year because of occupancy by a relative of the owner or by a spouse of a relative;

 

(5) the property taxes payable as defined in section 290A.03, subdivision 13, for the current year and the prior year;

 

(6) the market value of improvements to the property first assessed for tax purposes for taxes payable in the current year;

 

(7) the assessor's estimated market value assigned to the property for taxes payable in the current year and the prior year;


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(8) the taxable market value assigned to the property for taxes payable in the current year and the prior year;

 

(9) whether there are delinquent property taxes owing on the homestead;

 

(10) the unique taxing district in which the property is located; and

 

(11) such other information as the commissioner decides is necessary.

 

The commissioner shall use the information provided on the lists as appropriate under the law, including for the detection of improper claims by owners, or relatives of owners, under chapter 290A.

 

EFFECTIVE DATE.  This section is effective for homestead data provided to the commissioner in 2024 and thereafter.

 

Sec. 11.  Minnesota Statutes 2022, section 273.124, subdivision 14, is amended to read:

 

Subd. 14.  Agricultural homesteads; special provisions.  (a) Real estate of less than ten acres that is the homestead of its owner must be classified as class 2a under section 273.13, subdivision 23, paragraph (a), if:

 

(1) the parcel on which the house is located is contiguous on at least two sides to (i) agricultural land, (ii) land owned or administered by the United States Fish and Wildlife Service, or (iii) land administered by the Department of Natural Resources on which in lieu taxes are paid under sections 477A.11 to 477A.14 or section 477A.17;

 

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

 

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

 

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

 

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

 

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

 

(1) the agricultural property consists of at least 40 acres including undivided government lots and correctional 40's;

 

(2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the owner or of the owner's spouse, is actively farming the agricultural property, either on the person's own behalf as an individual or on behalf of a partnership operating a family farm, family farm corporation, joint family farm venture, or limited liability company of which the person is a partner, shareholder, or member;

 

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

 

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


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(5) neither the owner nor the person actively farming the agricultural property lives farther than four townships or cities, or a combination of four townships or cities, from the agricultural property, except that if the owner or the owner's spouse is required to live in employer-provided housing, the owner or owner's spouse, whichever is actively farming the agricultural property, may live more than four townships or cities, or combination of four townships or cities from the agricultural property.

 

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

 

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

 

(iii) As used in this paragraph, "agricultural property" means class 2a property and any class 2b property that is contiguous to and under the same ownership as the class 2a property.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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


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(1) the property owner abandoned the homestead dwelling located on the agricultural homestead as a result of damage caused by a March 29, 1998, tornado;

 

(2) the property is located in the county of Blue Earth, Brown, Cottonwood, Le Sueur, Nicollet, Nobles, or Rice;

 

(3) the agricultural land and buildings remain under the same ownership for the current assessment year as existed for the 1998 assessment year;

 

(4) the dwelling occupied by the owner is located in this state and is within 50 miles of one of the parcels of agricultural land that is owned by the taxpayer; and

 

(5) the owner notifies the county assessor that the relocation was due to a March 29, 1998, tornado, and the owner furnishes the assessor any information deemed necessary by the assessor in verifying the change in homestead dwelling.  For taxes payable in 1999, the owner must notify the assessor by December 1, 1998.  Further notifications to the assessor are not required if the property continues to meet all the requirements in this paragraph and any dwellings on the agricultural land remain uninhabited.

 

(g) Agricultural property of a family farm corporation, joint family farm venture, family farm limited liability company, or partnership operating a family farm as described under subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead property, if all of the following criteria are met:

 

(1) the property consists of at least 40 acres including undivided government lots and correctional 40's;

 

(2) a shareholder, member, or partner of that entity is actively farming the agricultural property;

 

(3) that shareholder, member, or partner who is actively farming the agricultural property is a Minnesota resident;

 

(4) neither that shareholder, member, or partner, nor the spouse of that shareholder, member, or partner claims another agricultural homestead in Minnesota; and

 

(5) that shareholder, member, or partner does not live farther than four townships or cities, or a combination of four townships or cities, from the agricultural property.

 

Homestead treatment applies under this paragraph even if:

 

(i) the shareholder, member, or partner of that entity is actively farming the agricultural property on the shareholder's, member's, or partner's own behalf; or

 

(ii) the family farm is operated by a family farm corporation, joint family farm venture, partnership, or limited liability company other than the family farm corporation, joint family farm venture, partnership, or limited liability company that owns the land, provided that:

 

(A) the shareholder, member, or partner of the family farm corporation, joint family farm venture, partnership, or limited liability company that owns the land who is actively farming the land is a shareholder, member, or partner of the family farm corporation, joint family farm venture, partnership, or limited liability company that is operating the farm; and

 

(B) more than half of the shareholders, members, or partners of each family farm corporation, joint family farm venture, partnership, or limited liability company are persons or spouses of persons who are a qualifying relative under section 273.124, subdivision 1, paragraphs (c) and (d).


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Homestead treatment applies under this paragraph for property leased to a family farm corporation, joint farm venture, limited liability company, or partnership operating a family farm if legal title to the property is in the name of an individual who is a member, shareholder, or partner in the entity.

 

(h) To be eligible for the special agricultural homestead under this subdivision, an initial full application must be submitted to the county assessor where the property is located.  Owners and the persons who are actively farming the property shall be required to complete only a one-page abbreviated version of the application in each subsequent year provided that none of the following items have changed since the initial application:

 

(1) the day-to-day operation, administration, and financial risks remain the same;

 

(2) the owners and the persons actively farming the property continue to live within the four townships or city criteria and are Minnesota residents;

 

(3) the same operator of the agricultural property is listed with the Farm Service Agency;

 

(4) a Schedule F or equivalent income tax form was filed for the most recent year;

 

(5) the property's acreage is unchanged; and

 

(6) none of the property's acres have been enrolled in a federal or state farm program since the initial application.

 

The owners and any persons who are actively farming the property must include the appropriate Social Security numbers or individual taxpayer identification numbers, and sign and date the application.  If any of the specified information has changed since the full application was filed, the owner must notify the assessor, and must complete a new application to determine if the property continues to qualify for the special agricultural homestead.  The commissioner of revenue shall prepare a standard reapplication form for use by the assessors.

 

(i) Agricultural land and buildings that were class 2a homestead property under section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain classified agricultural homesteads for subsequent assessments if:

 

(1) the property owner abandoned the homestead dwelling located on the agricultural homestead as a result of damage caused by the August 2007 floods;

 

(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, Steele, Wabasha, or Winona;

 

(3) the agricultural land and buildings remain under the same ownership for the current assessment year as existed for the 2007 assessment year;

 

(4) the dwelling occupied by the owner is located in this state and is within 50 miles of one of the parcels of agricultural land that is owned by the taxpayer; and

 

(5) the owner notifies the county assessor that the relocation was due to the August 2007 floods, and the owner furnishes the assessor any information deemed necessary by the assessor in verifying the change in homestead dwelling.  For taxes payable in 2009, the owner must notify the assessor by December 1, 2008.  Further notifications to the assessor are not required if the property continues to meet all the requirements in this paragraph and any dwellings on the agricultural land remain uninhabited.

 

(j) Agricultural land and buildings that were class 2a homestead property under section 273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain classified as agricultural homesteads for subsequent assessments if:


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(1) the property owner abandoned the homestead dwelling located on the agricultural homestead as a result of the March 2009 floods;

 

(2) the property is located in the county of Marshall;

 

(3) the agricultural land and buildings remain under the same ownership for the current assessment year as existed for the 2008 assessment year and continue to be used for agricultural purposes;

 

(4) the dwelling occupied by the owner is located in Minnesota and is within 50 miles of one of the parcels of agricultural land that is owned by the taxpayer; and

 

(5) the owner notifies the county assessor that the relocation was due to the 2009 floods, and the owner furnishes the assessor any information deemed necessary by the assessor in verifying the change in dwelling.  Further notifications to the assessor are not required if the property continues to meet all the requirements in this paragraph and any dwellings on the agricultural land remain uninhabited.

 

EFFECTIVE DATE.  This section is effective retroactively for homestead applications filed in 2023 and thereafter.

 

Sec. 12.  Minnesota Statutes 2022, section 273.1245, subdivision 1, is amended to read:

 

Subdivision 1.  Private or nonpublic data.  The following data are private or nonpublic data as defined in section 13.02, subdivisions 9 and 12, when they are submitted to a county or local assessor under section 273.124, 273.13, or another section, to support a claim for the property tax homestead classification under section 273.13, or other property tax classification or benefit:

 

(1) Social Security numbers;

 

(2) individual taxpayer identification numbers;

 

(2) (3) copies of state or federal income tax returns; and

 

(3) (4) state or federal income tax return information, including the federal income tax schedule F.

 

EFFECTIVE DATE.  This section is effective retroactively for homestead applications filed in 2023 and thereafter.

 

Sec. 13.  Minnesota Statutes 2022, section 273.13, subdivision 25, is amended to read:

 

Subd. 25.  Class 4.  (a) Class 4a is residential real estate containing four or more units and used or held for use by the owner or by the tenants or lessees of the owner as a residence for rental periods of 30 days or more, excluding property qualifying for class 4d.  Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other than hospitals exempt under section 272.02, and contiguous property used for hospital purposes, without regard to whether the property has been platted or subdivided.  The market value of class 4a property has a classification rate of 1.25 percent.

 

(b) Class 4b includes:

 

(1) residential real estate containing less than four units, including property rented as a short-term rental property for more than 14 days in the preceding year, that does not qualify as class 4bb, other than seasonal residential recreational property;


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(2) manufactured homes not classified under any other provision;

 

(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm classified under subdivision 23, paragraph (b) containing two or three units; and

 

(4) unimproved property that is classified residential as determined under subdivision 33.

 

For the purposes of this paragraph, "short-term rental property" means nonhomestead residential real estate rented for periods of less than 30 consecutive days.

 

The market value of class 4b property has a classification rate of 1.25 percent.

 

(c) Class 4bb includes:

 

(1) nonhomestead residential real estate containing one unit, other than seasonal residential recreational property;

 

(2) a single family dwelling, garage, and surrounding one acre of property on a nonhomestead farm classified under subdivision 23, paragraph (b); and

 

(3) a condominium-type storage unit having an individual property identification number that is not used for a commercial purpose.

 

Class 4bb property has the same classification rates as class 1a property under subdivision 22.

 

Property that has been classified as seasonal residential recreational property at any time during which it has been owned by the current owner or spouse of the current owner does not qualify for class 4bb.

 

(d) Class 4c property includes:

 

(1) except as provided in subdivision 22, paragraph (c), real and personal property devoted to commercial temporary and seasonal residential occupancy for recreation purposes, for not more than 250 days in the year preceding the year of assessment.  For purposes of this clause, property is devoted to a commercial purpose on a specific day if any portion of the property is used for residential occupancy, and a fee is charged for residential occupancy.  Class 4c property under this clause must contain three or more rental units.  A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site equipped with water and electrical hookups for recreational vehicles.  A camping pad offered for rent by a property that otherwise qualifies for class 4c under this clause is also class 4c under this clause regardless of the term of the rental agreement, as long as the use of the camping pad does not exceed 250 days.  In order for a property to be classified under this clause, either (i) the business located on the property must provide recreational activities, at least 40 percent of the annual gross lodging receipts related to the property must be from business conducted during 90 consecutive days, and either (A) at least 60 percent of all paid bookings by lodging guests during the year must be for periods of at least two consecutive nights; or (B) at least 20 percent of the annual gross receipts must be from charges for providing recreational activities, or (ii) the business must contain 20 or fewer rental units, and must be located in a township or a city with a population of 2,500 or less located outside the metropolitan area, as defined under section 473.121, subdivision 2, that contains a portion of a state trail administered by the Department of Natural Resources.  For purposes of item (i)(A), a paid booking of five or more nights shall be counted as two bookings.  Class 4c property also includes commercial use real property used exclusively for recreational purposes in conjunction with other class 4c property classified under this clause and devoted to temporary and seasonal residential occupancy for recreational purposes, up to a total of two acres, provided the property is not devoted to commercial recreational use for more than 250 days in the year preceding the year of assessment and is located within two miles of the class 4c property with which it is used.  In order for a property to qualify for classification under this clause, the owner must submit a declaration


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to the assessor designating the cabins or units occupied for 250 days or less in the year preceding the year of assessment by January 15 of the assessment year.  Those cabins or units and a proportionate share of the land on which they are located must be designated class 4c under this clause as otherwise provided.  The remainder of the cabins or units and a proportionate share of the land on which they are located will be designated as class 3a.  The owner of property desiring designation as class 4c property under this clause must provide guest registers or other records demonstrating that the units for which class 4c designation is sought were not occupied for more than 250 days in the year preceding the assessment if so requested.  The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility operated on a commercial basis not directly related to temporary and seasonal residential occupancy for recreation purposes does not qualify for class 4c.  For the purposes of this paragraph, "recreational activities" means renting ice fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; providing marina services, launch services, or guide services; or selling bait and fishing tackle;

 

(2) qualified property used as a golf course if:

 

(i) it is open to the public on a daily fee basis.  It may charge membership fees or dues, but a membership fee may not be required in order to use the property for golfing, and its green fees for golfing must be comparable to green fees typically charged by municipal courses; and

 

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

 

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction with the golf course is classified as class 3a property;

 

(3) real property up to a maximum of three acres of land owned and used by a nonprofit community service oriented organization and not used for residential purposes on either a temporary or permanent basis, provided that:

 

(i) the property is not used for a revenue-producing activity for more than six days in the calendar year preceding the year of assessment; or

 

(ii) the organization makes annual charitable contributions and donations at least equal to the property's previous year's property taxes and the property is allowed to be used for public and community meetings or events for no charge, as appropriate to the size of the facility.

 

For purposes of this clause:

 

(A) "charitable contributions and donations" has the same meaning as lawful gambling purposes under section 349.12, subdivision 25, excluding those purposes relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;

 

(B) "property taxes" excludes the state general tax;

 

(C) a "nonprofit community service oriented organization" means any corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, fraternal, civic, or educational purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal Revenue Code; and

 

(D) "revenue-producing activities" shall include but not be limited to property or that portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling alley, a retail store, gambling conducted by organizations licensed under chapter 349, an insurance business, or office or other space leased or rented to a lessee who conducts a for-profit enterprise on the premises.


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Any portion of the property not qualifying under either item (i) or (ii) is class 3a.  The use of the property for social events open exclusively to members and their guests for periods of less than 24 hours, when an admission is not charged nor any revenues are received by the organization shall not be considered a revenue-producing activity.

 

The organization shall maintain records of its charitable contributions and donations and of public meetings and events held on the property and make them available upon request any time to the assessor to ensure eligibility.  An organization meeting the requirement under item (ii) must file an application by May 1 with the assessor for eligibility for the current year's assessment.  The commissioner shall prescribe a uniform application form and instructions;

 

(4) postsecondary student housing of not more than one acre of land that is owned by a nonprofit corporation organized under chapter 317A and is used exclusively by a student cooperative, sorority, or fraternity for on-campus housing or housing located within two miles of the border of a college campus;

 

(5)(i) manufactured home parks as defined in section 327.14, subdivision 3, excluding manufactured home parks described in items (ii) and (iii), (ii) manufactured home parks as defined in section 327.14, subdivision 3, that are described in section 273.124, subdivision 3a, and (iii) class I manufactured home parks as defined in section 327C.015, subdivision 2;

 

(6) real property that is actively and exclusively devoted to indoor fitness, health, social, recreational, and related uses, is owned and operated by a not-for-profit corporation, and is located within the metropolitan area as defined in section 473.121, subdivision 2;

 

(7) a leased or privately owned noncommercial aircraft storage hangar not exempt under section 272.01, subdivision 2, and the land on which it is located, provided that:

 

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan Airports Commission, or group thereof; and

 

(ii) the land lease, or any ordinance or signed agreement restricting the use of the leased premise, prohibits commercial activity performed at the hangar.

 

If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must be filed by the new owner with the assessor of the county where the property is located within 60 days of the sale;

 

(8) a privately owned noncommercial aircraft storage hangar not exempt under section 272.01, subdivision 2, and the land on which it is located, provided that:

 

(i) the land abuts a public airport; and

 

(ii) the owner of the aircraft storage hangar provides the assessor with a signed agreement restricting the use of the premises, prohibiting commercial use or activity performed at the hangar; and

 

(9) residential real estate, a portion of which is used by the owner for homestead purposes, and that is also a place of lodging, if all of the following criteria are met:

 

(i) rooms are provided for rent to transient guests that generally stay for periods of 14 or fewer days;

 

(ii) meals are provided to persons who rent rooms, the cost of which is incorporated in the basic room rate;


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(iii) meals are not provided to the general public except for special events on fewer than seven days in the calendar year preceding the year of the assessment; and

 

(iv) the owner is the operator of the property.

 

The market value subject to the 4c classification under this clause is limited to five rental units.  Any rental units on the property in excess of five, must be valued and assessed as class 3a.  The portion of the property used for purposes of a homestead by the owner must be classified as class 1a property under subdivision 22;

 

(10) real property up to a maximum of three acres and operated as a restaurant as defined under section 157.15, subdivision 12, provided it:  (i) is located on a lake as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (ii) is either devoted to commercial purposes for not more than 250 consecutive days, or receives at least 60 percent of its annual gross receipts from business conducted during four consecutive months.  Gross receipts from the sale of alcoholic beverages must be included in determining the property's qualification under item (ii).  The property's primary business must be as a restaurant and not as a bar.  Gross receipts from gift shop sales located on the premises must be excluded.  Owners of real property desiring 4c classification under this clause must submit an annual declaration to the assessor by February 1 of the current assessment year, based on the property's relevant information for the preceding assessment year;

 

(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to the public and devoted to recreational use for marina services.  The marina owner must annually provide evidence to the assessor that it provides services, including lake or river access to the public by means of an access ramp or other facility that is either located on the property of the marina or at a publicly owned site that abuts the property of the marina.  No more than 800 feet of lakeshore may be included in this classification.  Buildings used in conjunction with a marina for marina services, including but not limited to buildings used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing tackle, are classified as class 3a property; and

 

(12) real and personal property devoted to noncommercial temporary and seasonal residential occupancy for recreation purposes.

 

Class 4c property has a classification rate of 1.5 percent of market value, except that (i) each parcel of noncommercial seasonal residential recreational property under clause (12) has the same classification rates as class 4bb property, (ii) manufactured home parks assessed under clause (5), item (i), have the same classification rate as class 4b property, the market value of manufactured home parks assessed under clause (5), item (ii), have a classification rate of 0.75 percent if more than 50 percent of the lots in the park are occupied by shareholders in the cooperative corporation or association and a classification rate of one percent if 50 percent or less of the lots are so occupied, and class I manufactured home parks as defined in section 327C.015, subdivision 2, have a classification rate of 1.0 percent, (iii) commercial-use seasonal residential recreational property and marina recreational land as described in clause (11), has a classification rate of one percent for the first $500,000 of market value, and 1.25 percent for the remaining market value, (iv) the market value of property described in clause (4) has a classification rate of one percent, (v) the market value of property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent, (vi) that portion of the market value of property in clause (9) qualifying for class 4c property has a classification rate of 1.25 percent, and (vii) property qualifying for classification under clause (3) that is owned or operated by a congressionally chartered veterans organization has a classification rate of one percent.  The commissioner of veterans affairs must provide a list of congressionally chartered veterans organizations to the commissioner of revenue by June 30, 2017, and by January 1, 2018, and each year thereafter.


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(e) Class 4d property is includes:

 

(1) qualifying low-income rental housing certified to the assessor by the Housing Finance Agency under section 273.128, subdivision 3.  If only a portion of the units in the building qualify as low-income rental housing units as certified under section 273.128, subdivision 3, only the proportion of qualifying units to the total number of units in the building qualify for class 4d(1).  The remaining portion of the building shall be classified by the assessor based upon its use.  Class 4d(1) also includes the same proportion of land as the qualifying low-income rental housing units are to the total units in the building.  For all properties qualifying as class 4d(1), the market value determined by the assessor must be based on the normal approach to value using normal unrestricted rents.; and

 

(2) a unit that is owned by the occupant and used as a homestead by the occupant, and otherwise meets all the requirements for community land trust property under section 273.11, subdivision 12, provided that by December 31 of each assessment year, the community land trust certifies to the assessor that (i) the community land trust owns the real property on which the unit is located, and (ii) the unit owner is a member in good standing of the community land trust.  For all units qualifying as class 4d(2), the market value determined by the assessor must be based on the normal approach to value without regard to any restrictions that apply because the unit is a community land trust property.

 

(f) The first tier of market value of class 4d(1) property has a classification rate of 0.75 percent.  The remaining value of class 4d(1) property has a classification rate of 0.25 percent.  For the purposes of this paragraph, the "first tier of market value of class 4d(1) property" means the market value of each housing unit up to the first tier limit.  For the purposes of this paragraph, all class 4d property value must be assigned to individual housing units.  The first tier limit is $100,000 for assessment years 2022 and 2023.  For subsequent assessment years, the limit is adjusted each year by the average statewide change in estimated market value of property classified as class 4a and 4d under this section for the previous assessment year, excluding valuation change due to new construction, rounded to the nearest $1,000, provided, however, that the limit may never be less than $100,000.  Beginning with assessment year 2015, the commissioner of revenue must certify the limit for each assessment year by November 1 of the previous year.  Class 4d(2) property has a classification rate of 0.75 percent.

 

EFFECTIVE DATE.  This section is effective beginning with assessment year 2024 and thereafter.

 

Sec. 14.  Minnesota Statutes 2022, section 273.13, subdivision 34, is amended to read:

 

Subd. 34.  Homestead of veteran with a disability or family caregiver.  (a) All or a portion of the market value of property owned by a veteran and serving as the veteran's homestead under this section is excluded in determining the property's taxable market value if the veteran has a service-connected disability of 70 percent or more as certified by the United States Department of Veterans Affairs.  To qualify for exclusion under this subdivision, the veteran must have been honorably discharged from the United States armed forces, as indicated by United States Government Form DD214 or other official military discharge papers.

 

(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is excluded, except as provided in clause (2); and

 

(2) for a total (100 percent) and permanent disability, $300,000 of market value is excluded.

 

(c) If a veteran with a disability qualifying for a valuation exclusion under paragraph (b), clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the spouse holds the legal or beneficial title to the homestead and permanently resides there, the exclusion shall carry over to the benefit of the veteran's spouse until such time as the spouse remarries, or sells, transfers, or otherwise disposes of the property, except as otherwise provided in paragraph (n).  Qualification under this paragraph requires an application under paragraph (h), and a spouse must notify the assessor if there is a change in the spouse's marital status, ownership of the property, or use of the property as a permanent residence.


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(d) If the spouse of a member of any branch or unit of the United States armed forces who dies due to a service‑connected cause while serving honorably in active service, as indicated on United States Government Form DD1300 or DD2064, holds the legal or beneficial title to a homestead and permanently resides there, the spouse is entitled to the benefit described in paragraph (b), clause (2), until such time as the spouse remarries or sells, transfers, or otherwise disposes of the property, except as otherwise provided in paragraph (n).

 

(e) If a veteran meets the disability criteria of paragraph (a) but does not own property classified as homestead in the state of Minnesota, then the homestead of the veteran's primary family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify for under paragraph (b).

 

(f) In the case of an agricultural homestead, only the portion of the property consisting of the house and garage and immediately surrounding one acre of land qualifies for the valuation exclusion under this subdivision.

 

(g) A property qualifying for a valuation exclusion under this subdivision is not eligible for the market value exclusion under subdivision 35, or classification under subdivision 22, paragraph (b).

 

(h) To qualify for a valuation exclusion under this subdivision a property owner must apply to the assessor by December 31 of the first assessment year for which the exclusion is sought.  Except as provided in paragraph (c), the owner of a property that has been accepted for a valuation exclusion must notify the assessor if there is a change in ownership of the property or in the use of the property as a homestead.

 

(i) A first-time application by a qualifying spouse for the market value exclusion under paragraph (d) must be made any time within two years of the death of the service member.

 

(j) For purposes of this subdivision:

 

(1) "active service" has the meaning given in section 190.05;

 

(2) "own" means that the person's name is present as an owner on the property deed;

 

(3) "primary family caregiver" means a person who is approved by the secretary of the United States Department of Veterans Affairs for assistance as the primary provider of personal care services for an eligible veteran under the Program of Comprehensive Assistance for Family Caregivers, codified as United States Code, title 38, section 1720G; and

 

(4) "veteran" has the meaning given the term in section 197.447.

 

(k) If a veteran dying after December 31, 2011, did not apply for or receive the exclusion under paragraph (b), clause (2), before dying, or the exclusion under paragraph (b), clause (2), did not exist at the time of the veterans death, the veteran's spouse is entitled to the benefit under paragraph (b), clause (2), until the spouse remarries or sells, transfers, or otherwise disposes of the property, except as otherwise provided in paragraph (n), if:

 

(1) the spouse files a first-time application within two years of the death of the service member or by June 1, 2019, whichever is later;

 

(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the homestead and permanently resides there;

 

(3) the veteran met the honorable discharge requirements of paragraph (a); and

 

(4) the United States Department of Veterans Affairs certifies that:

 

(i) the veteran met the total (100 percent) and permanent disability requirement under paragraph (b), clause (2); or


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(ii) the spouse has been awarded dependency and indemnity compensation.

 

(l) The purpose of this provision of law providing a level of homestead property tax relief for veterans with a disability, their primary family caregivers, and their surviving spouses is to help ease the burdens of war for those among our state's citizens who bear those burdens most heavily.

 

(m) By July 1, the county veterans service officer must certify the disability rating and permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.

 

(n) A spouse who received the benefit in paragraph (c), (d), or (k) but no longer holds the legal or beneficial title to the property may continue to receive the exclusion for a property other than the property for which the exclusion was initially granted until the spouse remarries or sells, transfers, or otherwise disposes of the property, provided that:

 

(1) the spouse applies under paragraph (h) for the continuation of the exclusion allowed under this paragraph;

 

(2) the spouse holds the legal or beneficial title to the property for which the continuation of the exclusion is sought under this paragraph, and permanently resides there;

 

(3) the estimated market value of the property for which the exclusion is sought under this paragraph is less than or equal to the estimated market value of the property that first received the exclusion, based on the value of each property on the date of the sale of the property that first received the exclusion; and

 

(4) the spouse has not previously received the benefit under this paragraph for a property other than the property for which the exclusion is sought.

 

(o) If a spouse had previously received the exclusion under paragraph (c) or (d) and the exclusion expired prior to taxes payable in 2020, the spouse may reapply under this section for the exclusion under paragraph (c) or (d).

 

EFFECTIVE DATE.  This section is effective beginning with assessment year 2023.

 

Sec. 15.  Minnesota Statutes 2022, section 273.13, subdivision 35, is amended to read:

 

Subd. 35.  Homestead market value exclusion.  (a) Prior to determining a property's net tax capacity under this section, property classified as 4d(2) under subdivision 25, paragraph (e), clause (2), class 1a or 1b under subdivision 22, and the portion of property classified as class 2a under subdivision 23 consisting of the house, garage, and surrounding one acre of land, shall be eligible for a market value exclusion as determined under paragraph (b).

 

(b) For a homestead valued at $76,000 $80,300 or less, the exclusion is 40 percent of market value.  For a homestead valued between $76,000 $80,300 and $413,800 $437,100, the exclusion is $30,400 $32,120 minus nine percent of the valuation over $76,000 $80,300.  For a homestead valued at $413,800 $437,100 or more, there is no valuation exclusion.  The valuation exclusion shall be rounded to the nearest whole dollar, and may not be less than zero.

 

(c) Any valuation exclusions or adjustments under section 273.11 shall be applied prior to determining the amount of the valuation exclusion under this subdivision.

 

(d) In the case of a property that is classified as part homestead and part nonhomestead, (i) the exclusion shall apply only to the homestead portion of the property, but (ii) if a portion of a property is classified as nonhomestead solely because not all the owners occupy the property, not all the owners have qualifying relatives occupying the property, or solely because not all the spouses of owners occupy the property, the exclusion amount shall be initially computed as if that nonhomestead portion were also in the homestead class and then prorated to the owner‑occupant's percentage of ownership.  For the purpose of this section, when an owner-occupant's spouse does not occupy the property, the percentage of ownership for the owner-occupant spouse is one-half of the couple's ownership percentage.

 

EFFECTIVE DATE.  This section is effective for assessment year 2024 and thereafter.


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Sec. 16.  Minnesota Statutes 2022, section 273.1315, subdivision 2, is amended to read:

 

Subd. 2.  Class 1b homestead declaration 2009 and thereafter.  (a) Any property owner seeking classification and assessment of the owner's homestead as class 1b property pursuant to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file with the county assessor a class 1b homestead declaration, on a form prescribed by the commissioner of revenue.  The declaration must contain the following information:

 

(1) the information necessary to verify that, on or before June 30 of the filing year, the property owner or the owner's spouse satisfies the requirements of section 273.13, subdivision 22, paragraph (b), for class 1b classification; and

 

(2) any additional information prescribed by the commissioner.

 

(b) The declaration must be filed on or before October 1 to be effective for property taxes payable during the succeeding calendar year.  The Social Security numbers, individual taxpayer identification numbers, and income and medical information received from the property owner pursuant to this subdivision are private data on individuals as defined in section 13.02.  If approved by the assessor, the declaration remains in effect until the property no longer qualifies under section 273.13, subdivision 22, paragraph (b).  Failure to notify the assessor within 30 days that the property no longer qualifies under that paragraph because of a sale, change in occupancy, or change in the status or condition of an occupant shall result in the penalty provided in section 273.124, subdivision 13b, computed on the basis of the class 1b benefits for the property, and the property shall lose its current class 1b classification.

 

EFFECTIVE DATE.  This section is effective retroactively for homestead applications filed in 2023 and thereafter.

 

Sec. 17.  Minnesota Statutes 2022, 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, metropolitan taxing districts as defined in paragraph (i), and fire protection and emergency medical services special taxing districts established under section 144F.01, 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 website address and 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 a website or public offices where telephone calls can be received by the authority, the authority may inform the county of the lack of a public website or telephone number and the county shall not list a website or telephone number for that taxing authority.


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(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, school building bond agricultural credit under section 273.1387, voter approved school levy, other local school levy, and the sum of the special taxing districts, and as a total of all taxing authorities:

 

(i) the actual tax for taxes payable in the current year; and

 

(ii) the proposed tax amount.

 

If the county levy under clause (2) includes an amount for a lake improvement district as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose must be separately stated from the remaining county levy amount.

 

In the case of a town or the state general tax, the final tax shall also be its proposed tax unless the town changes its levy at a special town meeting under section 365.52.  If a school district has certified under section 126C.17, subdivision 9, that a referendum will be held in the school district at the November general election, the county auditor must note next to the school district's proposed amount that a referendum is pending and that, if approved by the voters, the tax amount may be higher than shown on the notice.  In the case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately from the remaining amount of the city's levy.  In the case of the city of St. Paul, the levy for the St. Paul Library Agency must be listed separately from the remaining amount of the city's levy.  In the case of Ramsey County, any amount levied under section 134.07 may be listed separately from the remaining amount of the county's levy.  In the case of a parcel where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies, the proposed tax levy on the captured value or the proposed tax levy on the tax capacity subject to the areawide tax must each be stated separately and not included in the sum of the special taxing districts; and

 

(3) the increase or decrease between the total taxes payable in the current year and the total proposed taxes, expressed as a percentage.

 

For purposes of this section, the amount of the tax on homesteads qualifying under the senior citizens' property tax deferral program under chapter 290B is the total amount of property tax before subtraction of the deferred property tax amount.

 

(e) The notice must clearly state that the proposed or final taxes do not include the following:

 

(1) special assessments;

 

(2) levies approved by the voters after the date the proposed taxes are certified, including bond referenda and school district levy referenda;

 

(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday in November of the levy year as provided under section 275.73;


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(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring after the date the proposed taxes are certified;

 

(5) amounts necessary to pay tort judgments against the taxing authority that become final after the date the proposed taxes are certified; and

 

(6) the contamination tax imposed on properties which received market value reductions for contamination.

 

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the county treasurer to deliver the notice as required in this section does not invalidate the proposed or final tax levy or the taxes payable pursuant to the tax levy.

 

(g) If the notice the taxpayer receives under this section lists the property as nonhomestead, and satisfactory documentation is provided to the county assessor by the applicable deadline, and the property qualifies for the homestead classification in that assessment year, the assessor shall reclassify the property to homestead for taxes payable in the following year.

 

(h) In the case of class 4 residential property used as a residence for lease or rental periods of 30 days or more, the taxpayer must either:

 

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter, or lessee; or

 

(2) post a copy of the notice in a conspicuous place on the premises of the property.

 

The notice must be mailed or posted by the taxpayer by November 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;


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(2) population growth and decline;

 

(3) state or federal government action; and

 

(4) other financial factors that affect the level of property taxation and local services that the governing body of the county, city, or school district may deem appropriate to include.

 

The information may be presented using tables, written narrative, and graphic representations and may contain instruction toward further sources of information or opportunity for comment.

 

EFFECTIVE DATE.  This section is effective beginning with property taxes payable in 2024.

 

Sec. 18.  Minnesota Statutes 2022, section 275.065, subdivision 3b, is amended to read:

 

Subd. 3b.  Notice of proposed property taxes required supplemental information.  (a) The county auditor must prepare a separate statement supplemental information to be delivered with the notice of proposed taxes described in subdivision 3.  The statement information must fit on one sheet of paper and contain for each parcel:

 

(1) for the county, city or township, all home rule charter or statutory cities and school district in which the parcel lies districts within the county, the certified levy for the current taxes payable year, the proposed levy for taxes payable in the following year, and the increase or decrease between these two amounts, expressed as a percentage; and each listed separately.

 

(2) summary budget information listed in paragraph (b).

 

(b) Summary budget information must contain budget data from the county, city, and school district that proposes a property tax levy on the parcel for taxes payable the following year.  For the school district, the summary budget data must include the information provided to the public under section 123B.10, subdivision 1, paragraph (b), for the current year and prior year.  For the county and city, the reported summary budget data must contain the same information, in the same categories, and in the same format as provided to the Office of the State Auditor as required by section 6.745.  The statement must provide the governmental revenues and current expenditures information in clauses (1) and (2) for the taxing authority's budget for taxes payable the following year and the taxing authority's budget from taxes payable in the current year, as well as the percent change between the two years.  The city must provide the county auditor with the summary budget data at the same time as the information required under subdivision 3.  Only cities with a population of at least 500 are required to report the data described in this paragraph.  If a city with a population over 500 fails to report the required information to the county auditor, the county auditor must list the city as "budget information not reported" on the portion of the statement dedicated to the city's budget information.  The statement may take the same format as the annual summary budget report for cities and counties issued by the Office of the State Auditor.  The summary budget data must include:

 

(1) a governmental revenues category, including and separately stating:

 

(i) "property taxes" defined as property taxes levied on an assessed valuation of real property and personal property, if applicable, by the city and county, including fiscal disparities;

 

(ii) "special assessments" defined as levies made against certain properties to defray all or part of the costs of a specific improvement, such as new sewer and water mains, deemed to benefit primarily those properties;

 

(iii) "state general purpose aid" defined as aid received from the state that has no restrictions on its use, including local government aid, county program aid, and market value credits; and


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(iv) "state categorical aid" defined as revenues received for a specific purpose, such as streets and highways, fire relief, and flood control, including but not limited to police and fire state aid and out-of-home placement aid; and

 

(2) a current expenditures category, including and separately stating:

 

(i) "general government" defined as administration costs of city or county governments, including salaries of officials and maintenance of buildings;

 

(ii) "public safety" defined as costs related to the protection of persons and property, such as police, fire, ambulance services, building inspections, animal control, and flood control;

 

(iii) "streets and highways" defined as costs associated with the maintenance and repair of local highways, streets, bridges, and street equipment, such as patching, seal coating, street lighting, street cleaning, and snow removal;

 

(iv) "sanitation" defined as costs of refuse collection and disposal, recycling, and weed and pest control;

 

(v) "human services" defined as activities designed to provide public assistance and institutional care for individuals economically unable to provide for themselves;

 

(vi) "health" defined as costs of the maintenance of vital statistics, restaurant inspection, communicable disease control, and various health services and clinics;

 

(vii) "culture and recreation" defined as costs of libraries, park maintenance, mowing, planting, removal of trees, festivals, bands, museums, community centers, cable television, baseball fields, and organized recreation activities;

 

(viii) "conservation of natural resources" defined as the conservation and development of natural resources, including agricultural and forestry programs and services, weed inspection services, and soil and water conservation services;

 

(ix) "economic development and housing" defined as costs for development and redevelopment activities in blighted or otherwise economically disadvantaged areas, including low-interest loans, cleanup of hazardous sites, rehabilitation of substandard housing and other physical facilities, and other assistance to those wanting to provide housing and economic opportunity within a disadvantaged area; and

 

(x) "all other current expenditures" defined as costs not classified elsewhere, such as airport expenditures, cemeteries, unallocated insurance costs, unallocated pension costs, and public transportation costs.

 

(c) If a taxing authority reporting this data does not have revenues or expenditures in a category listed in paragraph (b), then the taxing authority must designate the amount as "0" for that specific category.

 

(d) The supplemental statement information provided under this subdivision must be sent in electronic form or by email if the taxpayer requests an electronic version of the notice of proposed property taxes under subdivision 3, paragraph (a).

 

EFFECTIVE DATE.  This section is effective beginning with property taxes payable in 2024.


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Sec. 19.  Minnesota Statutes 2022, section 275.065, subdivision 4, is amended to read:

 

Subd. 4.  Costs.  If the reasonable cost of the county auditor's services and the cost of preparing and mailing the notice required in this section exceed the amount distributed to the county by the commissioner of revenue to administer this section, the county may require the taxing authority must to reimburse the county for the excess cost.  The excess cost must be apportioned between taxing jurisdictions as follows:

 

(1) one-third is allocated to the county;

 

(2) one-third is allocated to cities and towns within the county; and

 

(3) one-third is allocated to school districts within the county.

 

The amounts in clause (2) must be further apportioned among the cities and towns in the proportion that the number of parcels in the city and town bears to the number of parcels in all the cities and towns within the county.  The amount in clause (3) must be further apportioned among the school districts in the proportion that the number of parcels in the school district bears to the number of parcels in all school districts within the county.

 

EFFECTIVE DATE.  This section is effective beginning with property taxes payable in 2024.

 

Sec. 20.  Minnesota Statutes 2022, section 290A.03, subdivision 6, is amended to read:

 

Subd. 6.  Homestead.  "Homestead" means the dwelling occupied as the claimant's principal residence and so much of the land surrounding it, not exceeding ten acres, as is reasonably necessary for use of the dwelling as a home and any other property used for purposes of a homestead as defined in section 273.13, subdivision 22, except or section 273.13, subdivision 25, paragraph (e), clause (2).  For agricultural land assessed as part of a homestead pursuant to section 273.13, subdivision 23, "homestead" is limited to the house and garage and immediately surrounding one acre of land.  The homestead may be owned or rented and may be a part of a multidwelling or multipurpose building and the land on which it is built.  A manufactured home, as defined in section 273.125, subdivision 8, or a park trailer taxed as a manufactured home under section 168.012, subdivision 9, assessed as personal property may be a dwelling for purposes of this subdivision.

 

EFFECTIVE DATE.  This section is effective for refund claims based on taxes payable in 2025 and thereafter.

 

Sec. 21.  Minnesota Statutes 2022, section 290B.03, subdivision 1, is amended to read:

 

Subdivision 1.  Program qualifications.  The qualifications for the senior citizens' property tax deferral program are as follows:

 

(1) the property must be owned and occupied as a homestead by a person 65 years of age or older.  In the case of a married couple, at least one of the spouses must be at least 65 years old at the time the first property tax deferral is granted, regardless of whether the property is titled in the name of one spouse or both spouses, or titled in another way that permits the property to have homestead status, and the other spouse must be at least 62 years of age;

 

(2) the total household income of the qualifying homeowners, as defined in section 290A.03, subdivision 5, for the calendar year preceding the year of the initial application may not exceed $60,000 $96,000;

 

(3) the homestead must have been owned and occupied as the homestead of at least one of the qualifying homeowners for at least 15 five years prior to the year the initial application is filed;

 

(4) there are no state or federal tax liens or judgment liens on the homesteaded property;


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(5) there are no mortgages or other liens on the property that secure future advances, except for those subject to credit limits that result in compliance with clause (6); and

 

(6) the total unpaid balances of debts secured by mortgages and other liens on the property, including unpaid and delinquent special assessments and interest and any delinquent property taxes, penalties, and interest, but not including property taxes payable during the year or debts secured by a residential PACE lien, as defined in section 216C.435, subdivision 10d, does not exceed 75 percent of the assessor's estimated market value for the year.

 

EFFECTIVE DATE.  This section is effective for applications for deferral of taxes payable in 2024 and thereafter.

 

Sec. 22.  Minnesota Statutes 2022, section 290B.04, subdivision 3, is amended to read:

 

Subd. 3.  Excess-income certification by taxpayer.  A taxpayer whose initial application has been approved under subdivision 2 shall notify the commissioner of revenue in writing by July 1 if the taxpayer's household income for the preceding calendar year exceeded $60,000 $96,000.  The certification must state the homeowner's total household income for the previous calendar year.  No property taxes may be deferred under this chapter in any year following the year in which a program participant filed or should have filed an excess-income certification under this subdivision, unless the participant has filed a resumption of eligibility certification as described in subdivision 4.

 

EFFECTIVE DATE.  This section is effective for applications for deferral of taxes payable in 2024 and thereafter.

 

Sec. 23.  Minnesota Statutes 2022, section 290B.04, subdivision 4, is amended to read:

 

Subd. 4.  Resumption of eligibility certification by taxpayer.  A taxpayer who has previously filed an excess‑income certification under subdivision 3 may resume program participation if the taxpayer's household income for a subsequent year is $60,000 $96,000 or less.  If the taxpayer chooses to resume program participation, the taxpayer must notify the commissioner of revenue in writing by July 1 of the year following a calendar year in which the taxpayer's household income is $60,000 $96,000 or less.  The certification must state the taxpayer's total household income for the previous calendar year.  Once a taxpayer resumes participation in the program under this subdivision, participation will continue until the taxpayer files a subsequent excess-income certification under subdivision 3 or until participation is terminated under section 290B.08, subdivision 1.

 

EFFECTIVE DATE.  This section is effective for applications for deferral of taxes payable in 2024 and thereafter.

 

Sec. 24.  Minnesota Statutes 2022, section 290B.05, subdivision 1, is amended to read:

 

Subdivision 1.  Determination by commissioner.  The commissioner shall determine each qualifying homeowner's "annual maximum property tax amount" following approval of the homeowner's initial application and following the receipt of a resumption of eligibility certification.  The "annual maximum property tax amount" equals three percent of the homeowner's total household income for the year preceding either the initial application or the resumption of eligibility certification, whichever is applicable.  Following approval of the initial application, the commissioner shall determine the qualifying homeowner's "maximum allowable deferral."  No tax may be deferred relative to the appropriate assessment year for any homeowner whose total household income for the previous year exceeds $60,000 $96,000.  No tax shall be deferred in any year in which the homeowner does not meet the program qualifications in section 290B.03.  The maximum allowable total deferral is equal to 75 percent of the assessor's estimated market value for the year, less the balance of any mortgage loans and other amounts secured by liens against the property at the time of application, including any unpaid and delinquent special assessments and interest and any delinquent property taxes, penalties, and interest, but not including property taxes payable during the year.

 

EFFECTIVE DATE.  This section is effective for applications for deferral of taxes payable in 2024 and thereafter.


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Sec. 25.  NORTHWEST MINNESOTA MULTI-COUNTY HOUSING AND REDEVELOPMENT AUTHORITY; LEVY AUTHORITY.

 

Notwithstanding any law to the contrary, Laws 2008, chapter 366, article 5, section 33, the effective date, as amended by Laws 2013, chapter 143, article 4, section 35, and Laws 2019, First Special Session chapter 6, article 4, section 31, is effective for taxes levied in 2008, payable in 2009, and is repealed effective for taxes levied in 2033, payable in 2034, and thereafter.

 

EFFECTIVE DATE.  This section is effective the day after the governing body of the Northwest Minnesota Multi-County Housing and Redevelopment Authority and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3.

 

ARTICLE 4

PROPERTY TAX AIDS, CREDITS, AND REFUNDS

 

Section 1.  Minnesota Statutes 2022, section 273.1392, is amended to read:

 

273.1392 PAYMENT; SCHOOL DISTRICTS.

 

The amounts of bovine tuberculosis credit reimbursements under section 273.113; conservation tax credits under section 273.119; disaster or emergency reimbursement under sections 273.1231 to 273.1235; agricultural credits under sections 273.1384 and 273.1387; aids and credits under section 273.1398; enterprise zone property credit payments under section 469.171; and metropolitan agricultural preserve reduction under section 473H.10; and electric generation transition aid under section 477A.25 for school districts, shall be certified to the Department of Education by the Department of Revenue.  The amounts so certified shall be paid according to section 127A.45, subdivisions 9, 10, and 13.

 

EFFECTIVE DATE.  This section is effective July 1, 2024.

 

Sec. 2.  Minnesota Statutes 2022, section 290A.04, subdivision 2, is amended to read:

 

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

 

Household Income

Percent of Income

Percent Paid by Claimant

Maximum State Refund

 

$0 to 1,739 $0 to 2,079

1.0 percent

15 percent 10 percent

$ 2,770 3,310

1,740 to 3,459 2,080 to 4,139

 

1.1 percent

 

15 percent 10 percent

 

$ 2,770 3,310

3,460 to 5,239 4,140 to 6,269

 

1.2 percent

 

15 percent 10 percent

 

$ 2,770 3,310

5,240 to 6,989 6,270 to 8,369

 

1.3 percent

 

20 percent 15 percent

 

$ 2,770 3,310

6,990 to 8,719 8,370 to 10,439

 

1.4 percent

 

20 percent 15 percent

 

$ 2,770 3,310

8,720 to 12,219 10,440 to 14,619

 

1.5 percent

 

20 percent 15 percent

 

$ 2,770 3,310

12,220 to 13,949 14,620 to 16,689

 

1.6 percent

 

20 percent 15 percent

 

$ 2,770 3,310


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13,950 to 15,709 16,690 to 18,799

 

1.7 percent

 

20 percent 15 percent

 

$ 2,770 3,310

15,710 to 17,449 18,800 to 20,879

 

1.8 percent

 

20 percent 15 percent

 

$ 2,770 3,310

17,450 to 19,179 20,880 to 22,949

 

1.9 percent

 

25 percent 20 percent

 

$ 2,770 3,310

19,180 to 24,429 22,950 to 29,239

 

2.0 percent

 

25 percent 20 percent

 

$ 2,770 3,310

24,430 to 26,169 29,240 to 31,319

 

2.0 percent

 

30 percent 25 percent

 

$ 2,770 3,310

26,170 to 29,669 31,320 to 35,509

 

2.0 percent

 

30 percent 25 percent

 

$ 2,770 3,310

29,670 to 41,859 35,510 to 50,099

 

2.0 percent

 

35 percent 30 percent

 

$ 2,770 3,310

41,860 to 61,049 50,100 to 73,059

 

2.0 percent

 

35 percent 30 percent

 

$ 2,240 2,680

61,050 to 69,769 73,060 to 83,499

 

2.0 percent

 

40 percent 35 percent

 

$ 1,960 2,350

69,770 to 78,499 83,500 to 93,939

 

2.1 percent

 

40 percent 35 percent

 

$ 1,620 1,940

78,500 to 87,219 93,940 to 104,379

 

2.2 percent

 

40 percent 35 percent

 

$ 1,450 1,740

87,220 to 95,939 104,380 to 114,819

 

2.3 percent

 

40 percent 35 percent

 

$ 1,270 1,520

95,940 to 101,179 114,820 to 121,089

 

2.4 percent

 

45 percent 40 percent

 

$ 1,070 1,280

101,180 to 104,689 121,090 to 125,289

 

2.5 percent

 

45 percent 40 percent

 

$ 890 1,070

104,690 to 108,919 125,290 to 130,349

 

2.5 percent

 

50 percent 45 percent

 

$ 730 870

108,920 to 113,149 130,350 to 135,409

 

2.5 percent

 

50 percent 45 percent

 

$ 540 650

 

The payment made to a claimant shall be the amount of the state refund calculated under this subdivision.  No payment is allowed if the claimant's household income is $113,150 $135,410 or more.

 

EFFECTIVE DATE.  This section is effective for claims based on property taxes payable in 2024 and following years.

 

Sec. 3.  Minnesota Statutes 2022, section 290A.04, subdivision 4, is amended to read:

 

Subd. 4.  Inflation adjustment.  The commissioner shall annually adjust the dollar amounts of the income thresholds and the maximum refunds under subdivisions 2 and 2a as provided in section 270C.22.  The statutory year for subdivision 2 is 2023.  The statutory year for subdivision 2a is 2018.

 

EFFECTIVE DATE.  This section is effective for claims based on property taxes payable in 2025 and thereafter.


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Sec. 4.  Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision to read:

 

Subd. 3b.  Population age 65 and over.  "Population age 65 and over" means the population age 65 and over established as of July 15 in an aid calculation year by the most recent federal census, by a special census conducted under contract with the United States Bureau of the Census, by a population estimate made by the Metropolitan Council, or by a population estimate of the state demographer made pursuant to section 4A.02, whichever is the most recent as to the stated date of the count or estimate for the preceding calendar year and which has been certified to the commissioner of revenue on or before July 15 of the aid calculation year.  A revision to an estimate or count is effective for these purposes only if certified to the commissioner on or before July 15 of the aid calculation year.  Clerical errors in the certification or use of estimates and counts established as of July 15 in the aid calculation year are subject to correction within the time periods allowed under section 477A.014.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 5.  Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision to read:

 

Subd. 3c.  Transformed population.  "Transformed population" means the logarithm to the base 10 of the population.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 6.  Minnesota Statutes 2022, section 477A.011, subdivision 34, is amended to read:

 

Subd. 34.  City revenue need.  (a) For a city with a population equal to or greater than 10,000, "city revenue need" is 1.15 times the sum of (1) 4.59 8.572 times the pre-1940 housing percentage; plus (2) 0.622 times the percent of housing built between 1940 and 1970 11.494 times the city age index; plus (3) 169.415 times the jobs per capita 5.719 times the commercial industrial utility percentage; plus (4) the sparsity adjustment 9.484 times peak population decline; plus (5) 307.664 293.056.

 

(b) For a city with a population equal to or greater than 2,500 and less than 10,000, "city revenue need" is 1.15 times the sum of (1) 572.62 497.308; plus (2) 5.026 6.667 times the pre-1940 housing percentage; minus plus (3) 53.768 times household size 9.215 times the commercial industrial utility percentage; plus (4) 14.022 16.081 times peak population decline; plus (5) the sparsity adjustment.

 

(c) For a city with a population less than 2,500, "city revenue need" is the sum of (1) 410 196.487; plus (2) 0.367 220.877 times the city's transformed population over 100; plus (3) the sparsity adjustment.  The city revenue need for a city under this paragraph shall not exceed 630 plus the city's sparsity adjustment.

 

(d) For a city with a population of at least 2,500 but less than 3,000, the "city revenue need" equals (1) the transition factor times the city's revenue need calculated in paragraph (b); plus (2) 630 the city's revenue need calculated under the formula in paragraph (c) times the difference between one and the transition factor.  For a city with a population of at least 10,000 but less than 11,000, the "city revenue need" equals (1) the transition factor times the city's revenue need calculated in paragraph (a); plus (2) the city's revenue need calculated under the formula in paragraph (b) times the difference between one and the transition factor.  For purposes of the first sentence of this paragraph "transition factor" is 0.2 percent times the amount that the city's population exceeds the minimum threshold.  For purposes of the second sentence of this paragraph, "transition factor" is 0.1 percent times the amount that the city's population exceeds the minimum threshold.

 

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


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(f) For calendar year 2015 2024 and subsequent years, the city revenue need for a city, as determined in paragraphs (a) to (e), is multiplied by the ratio of the annual implicit price deflator for government consumption expenditures and gross investment for state and local governments as prepared by the United States Department of Commerce, for the most recently available year to the 2013 2022 implicit price deflator for state and local government purchases.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 7.  Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision to read:

 

Subd. 46.  City age index.  "City age index" means 100 times the ratio of (1) the population age 65 and over within the city, to (2) the population of the city.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 8.  Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision to read:

 

Subd. 47.  Commercial industrial utility percentage.  The "commercial industrial utility percentage" for a city is 100 times the ratio of (1) the sum of the estimated market values of all real and personal property in the city classified as class 3 under section 273.13, subdivision 24, to (2) the total market value of all taxable real and personal property in the city.  The market values are the amounts computed before any adjustments for fiscal disparities under section 276A.06 or 473F.08.  The market values used for this subdivision are not equalized.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 9.  Minnesota Statutes 2022, section 477A.0124, subdivision 2, is amended to read:

 

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

 

(b) "County program aid" means the sum of "county need aid," "county tax base equalization aid," and "county transition aid."

 

(c) "Age-adjusted population" means a county's population multiplied by the county age index.

 

(d) "County age index" means the percentage of the population age 65 and over within the county divided by the percentage of the population age 65 and over within the state, except that the age index for any county may not be greater than 1.8 nor less than 0.8.

 

(e) "Population age 65 and over" means the population age 65 and over established as of July 15 in an aid calculation year by the most recent federal census, by a special census conducted under contract with the United States Bureau of the Census, by a population estimate made by the Metropolitan Council, or by a population estimate of the state demographer made pursuant to section 4A.02, whichever is the most recent as to the stated date of the count or estimate for the preceding calendar year and which has been certified to the commissioner of revenue on or before July 15 of the aid calculation year.  A revision to an estimate or count is effective for these purposes only if certified to the commissioner on or before July 15 of the aid calculation year.  Clerical errors in the certification or use of estimates and counts established as of July 15 in the aid calculation year are subject to correction within the time periods allowed under section 477A.014 has the meaning given in section 477A.011, subdivision 3b.

 

(f) "Part I crimes" means the three-year average annual number of Part I crimes reported for each county by the Department of Public Safety for the most recent years available.  By July 1 of each year, the commissioner of public safety shall certify to the commissioner of revenue the number of Part I crimes reported for each county for the three most recent calendar years available.


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(g) "Households receiving Supplemental Nutrition Assistance Program (SNAP) benefits" means the average monthly number of households receiving SNAP benefits for the three most recent years for which data is available.  By July 1 of each year, the commissioner of human services must certify to the commissioner of revenue the average monthly number of households in the state and in each county that receive SNAP benefits, for the three most recent calendar years available.

 

(h) "County net tax capacity" means the county's adjusted net tax capacity under section 273.1325.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 10.  Minnesota Statutes 2022, section 477A.013, subdivision 8, is amended to read:

 

Subd. 8.  City formula aid.  (a) For aids payable in 2018 2024 and thereafter, the formula aid for a city is equal to the product of (1) the difference between its unmet need and its certified aid in the previous year and before any aid adjustment under subdivision 13, and (2) the aid gap percentage.

 

(b) The applicable aid gap percentage must be calculated by the Department of Revenue so that the total of the aid under subdivision 9 equals the total amount available for aid under section 477A.03.  The aid gap percentage must be the same for all cities subject to paragraph (a).  Data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be the most recently available data as of January 1 in the year in which the aid is calculated.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 11.  Minnesota Statutes 2022, section 477A.013, subdivision 9, is amended to read:

 

Subd. 9.  City aid distribution.  (a) In calendar year 2018 2024 and thereafter, if a city's certified aid before any aid adjustment under subdivision 13 for the previous year is less than its current unmet need, the city shall receive an aid distribution equal to the sum of (1) its certified aid in the previous year before any aid adjustment under subdivision 13, and (2) the city formula aid under subdivision 8, and (3) its aid adjustment under subdivision 13.

 

(b) For aids payable in 2020 only, no city's aid amount before any adjustment under subdivision 13 may be less than its pay 2019 certified aid amount, less any aid adjustment under subdivision 13 for that year.  For aids payable in 2020 2024 and thereafter, if a city's certified aid before any aid adjustment under subdivision 13 for the previous year is equal to or greater than its current unmet need, the total aid for a city is equal to the greater of (1) its unmet need plus any aid adjustment under subdivision 13, or (2) the amount it was certified to receive in the previous year minus the sum of (i) any adjustment under subdivision 13 that was paid in the previous year but has expired, and (ii) the lesser of (i) $10 multiplied by its population, or (ii) five percent of its net levy in the year prior to the aid distribution.  No city may have a total aid amount less than $0.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 12.  Minnesota Statutes 2022, section 477A.03, subdivision 2a, is amended to read:

 

Subd. 2a.  Cities.  For aids payable in 2016 and 2017, the total aid paid under section 477A.013, subdivision 9, is $519,398,012.  For aids payable in 2018 and 2019, the total aid paid under section 477A.013, subdivision 9, is $534,398,012.  For aids payable in 2020, the total aid paid under section 477A.013, subdivision 9, is $560,398,012.  For aids payable in 2021 and thereafter through 2023, the total aid payable under section 477A.013, subdivision 9, is $564,398,012.  For aids payable in 2024 and thereafter, the total aid payable under section 477A.013, subdivision 9, is $664,398,012, multiplied by the inflation adjustment under subdivision 6.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.


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Sec. 13.  Minnesota Statutes 2022, section 477A.03, subdivision 2b, is amended to read:

 

Subd. 2b.  Counties.  (a) For aids payable in 2018 and 2019, the total aid payable under section 477A.0124, subdivision 3, is $103,795,000, of which $3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 6.  For aids payable in 2020, the total aid payable under section 477A.0124, subdivision 3, is $116,795,000, of which $3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 6.  For aids payable in 2021 through 2024 2023, the total aid payable under section 477A.0124, subdivision 3, is $118,795,000, of which $3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 6.  For aids payable in 2024, the total aid payable under section 477A.0124, subdivision 3, is $163,679,459, of which $3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 6.  For aids payable in 2025 and thereafter, the total aid payable under section 477A.0124, subdivision 3, is $115,795,000 $160,679,459, multiplied by the inflation adjustment under subdivision 6.  On or before the first installment date provided in section 477A.015, paragraph (a), $500,000 of this appropriation shall be transferred each year by the commissioner of revenue to the Board of Public Defense for the payment of services under section 611.27.  Any transferred amounts not expended or encumbered in a fiscal year shall be certified by the Board of Public Defense to the commissioner of revenue on or before October 1 and shall be included in the next certification of county need aid.

 

(b) For aids payable in 2018 and 2019, the total aid under section 477A.0124, subdivision 4, is $130,873,444.  For aids payable in 2020, the total aid under section 477A.0124, subdivision 4, is $143,873,444.  For aids payable in 2021 and thereafter through 2023, the total aid under section 477A.0124, subdivision 4, is $145,873,444.  For aids payable in 2024 and thereafter, the total aid under section 477A.0124, subdivision 4, is $200,988,985, multiplied by the inflation adjustment under subdivision 6.  The commissioner of revenue shall transfer to the Legislative Budget Office $207,000 annually for the cost of preparation of local impact notes as required by section 3.987, and other local government activities.  The commissioner of revenue shall transfer to the commissioner of education $7,000 annually for the cost of preparation of local impact notes for school districts as required by section 3.987.  The commissioner of revenue shall deduct the amounts transferred under this paragraph from the appropriation under this paragraph.  The amounts transferred are appropriated to the Legislative Coordinating Commission and the commissioner of education respectively.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 14.  Minnesota Statutes 2022, section 477A.03, is amended by adding a subdivision to read:

 

Subd. 6.  Inflation adjustment.  In 2026 and thereafter, the amounts paid under subdivisions 2a and 2b must be increased by an amount equal to one plus the sum of (1) the percentage increase in the implicit price deflator for government expenditures and gross investment for state and local government purchases as prepared by the United States Department of Commerce for the 12-month period ending March 31 of the previous calendar year, and (2) the percentage increase in total city population for the most recently available years as of January 15 of the current year.  The percentage increase in this subdivision must not be less than 2.5 percent or greater than five percent.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 15.  Minnesota Statutes 2022, section 477A.12, subdivision 1, is amended to read:

 

Subdivision 1.  Types of land; payments.  The following amounts are annually appropriated to the commissioner of natural resources from the general fund for transfer to the commissioner of revenue.  The commissioner of revenue shall pay the transferred funds to counties as required by sections 477A.11 to 477A.14.  The amounts, based on the acreage as of July 1 of each year prior to the payment year, are:

 

(1) $5.133 multiplied by the total number of acres of acquired natural resources land or, at the county's option three-fourths of one percent of the appraised value of all acquired natural resources land in the county, whichever is greater;


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(2) $5.133, multiplied by the total number of acres of transportation wetland or, at the county's option, three‑fourths of one percent of the appraised value of all transportation wetland in the county, whichever is greater;

 

(3) $5.133, multiplied by the total number of acres of wildlife management land, or, at the county's option, three‑fourths of one percent of the appraised value of all wildlife management land in the county, whichever is greater;

 

(4) 50 percent of the dollar amount as determined under clause (1), multiplied by the number of acres of military refuge land in the county;

 

(5) $2 $3, multiplied by the number of acres of county-administered other natural resources land in the county;

 

(6) $5.133, multiplied by the total number of acres of land utilization project land in the county;

 

(7) $2 $3, multiplied by the number of acres of commissioner-administered other natural resources land in the county; and

 

(8) $0.18, multiplied by the total number of acres in the county eligible for payment under clauses (1) to (7), provided that the total number of acres in the county eligible for payment under clauses (1) to (7) is equal to or greater than 25 percent of the total acreage in the county;

 

(9) $0.08, multiplied by the total number of acres in the county eligible for payment under clauses (1) to (7), provided that the total number of acres in the county eligible for payment under clauses (1) to (7) is equal to or greater than ten percent, but less than 25 percent of the total acreage in the county; and

 

(10) without regard to acreage, and notwithstanding the rules adopted under section 84A.55, $300,000 for local assessments under section 84A.55, subdivision 9, that shall be divided and distributed to the counties containing state-owned lands within a conservation area in proportion to each county's percentage of the total annual ditch assessments.

 

EFFECTIVE DATE.  This section is effective beginning with aids payable in 2024.

 

Sec. 16.  Minnesota Statutes 2022, section 477A.12, subdivision 3, is amended to read:

 

Subd. 3.  Determination of appraised value.  For the purposes of this section, the appraised value of acquired natural resources land is the purchase price until the next six-year appraisal required under this subdivision.  The appraised value of acquired natural resources land received as a donation is the value determined for the commissioner of natural resources by a licensed appraiser, or the county assessor's estimated market value if no appraisal is done.  The appraised value must be determined by the county assessor every six years, except that the appraised value shall not be less than the 2022 or subsequent appraised value, if it is higher.  All reappraisals shall be done in the same year as county assessors are required to assess exempt land under section 273.18.

 

EFFECTIVE DATE.  This section is effective beginning with aids payable in 2024.

 

Sec. 17.  Minnesota Statutes 2022, section 477A.12, is amended by adding a subdivision to read:

 

Subd. 4.  Adjustment.  The commissioner of revenue shall annually adjust the amounts in subdivision 1, clauses (1) to (10), as provided in section 270C.22, subdivision 1, except as provided in this subdivision.  To determine the dollar amounts for payments in calendar year 2025, the commissioner shall determine the percentage change in the index for the 12-month period ending on August 31, 2024, and increase each of the unrounded dollar amounts in section 477A.12, subdivision 1, by that percentage change.  For each subsequent year, the commissioner shall


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increase the dollar amounts by the percentage change in the index from August 31 of the year preceding the statutory year, to August 31 of the year preceding the taxable year.  The commissioner shall round the amounts as adjusted to the nearest tenth of a cent.

 

EFFECTIVE DATE.  This section is effective beginning with aids payable in 2024.

 

Sec. 18.  [477A.23] SOIL AND WATER CONSERVATION DISTRICT AID.

 

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

 

(1) "adjusted population" means the cube root of the district's population, according to the most recent federal decennial census;

 

(2) "nonpublic lands" means "real property" as defined by section 272.03 that is not owned by the federal government, the state, or a local government unit; and

 

(3) "soil and water conservation district" means a district created by chapter 103C, and that is implementing the duties under that chapter as determined by the Board of Water and Soil Resources as of the board's certification to the commissioner of revenue required by subdivision 4.

 

Subd. 2.  Purpose.  The purpose of this section is to provide ongoing financial support to soil and water conservation districts to aid in the execution of chapter 103C and other duties and services prescribed by statute.

 

Subd. 3.  Distribution.  The Board of Water and Soil Resources must calculate the amount of aid to be distributed to the certified soil and water conservation districts from the appropriation in subdivision 7 as follows:

 

(1) 70 percent of the appropriation must be distributed equally among the districts;

 

(2) 20 percent of the appropriation must be distributed proportionally among the districts according to the amount of nonpublic land located in a district as compared to the amount of nonpublic land in the state; and

 

(3) ten percent of the appropriation must be distributed proportionally among the districts based on the adjusted population of each district, divided by the sum of the adjusted population for all districts.

 

Subd. 4.  Certification to commissioner.  On or before June 1 each year, the Board of Water and Soil Resources must certify to the commissioner of revenue the soil and water conservation districts that will receive a payment under this section and the amount of each payment.

 

Subd. 5.  Use of proceeds.  (a) Notwithstanding section 103C.401, subdivision 2, a soil and water conservation district that receives a distribution under this section must use the proceeds to implement chapter 103C and other duties and services as prescribed by statute.

 

(b) The board of each soil and water conservation district must establish, by resolution, annual guidelines for using payments received under this section.  Current year guidelines and guidelines from the year immediately prior must be posted on the district's website.

 

(c) A soil and water conservation district that receives a payment under this section may use the proceeds directly or may appropriate any portion of the payment to a governmental unit with which the district has a cooperative agreement under section 103C.231.  Any payment received under this section and appropriated by the district must be used as required under this subdivision.


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Subd. 6.  Payments.  The commissioner of revenue must distribute soil and water conservation district aid in the same manner and at the same times as aid payments provided under section 477A.015.

 

Subd. 7.  Appropriation.  For aids payable in 2023 and 2024, $22,000,000 is appropriated in each year from the general fund to the commissioner of revenue to make the payments required under this section.  For aids payable in 2025 and thereafter, $14,000,000 is annually appropriated from the general fund to the commissioner of revenue to make the payments required under this section.

 

Subd. 8.  Aid amount corrections.  If there is a clerical error made in calculating an aid payment under this section, the Board of Water and Soil Resources shall recertify the correct amounts to the commissioner of revenue and communicate the error and the corrected amount to the affected soil and water conservation district as soon as practical after the error is discovered.

 

EFFECTIVE DATE.  This section is effective beginning with aids payable in 2023 and thereafter.

 

Sec. 19.  [477A.24] ELECTRIC GENERATION TRANSITION AID.

 

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

 

(b) "Electric generating unit" means a single generating unit at an electric generating plant powered by coal, nuclear, or natural gas.

 

(c) "Electric generation property" means taxable property of an electric generating plant owned by a public utility, as defined in section 216B.02, subdivision 4, that is powered by coal, nuclear, or natural gas and located in an eligible taxing jurisdiction.

 

(d) "Eligible taxing jurisdiction" means a county, home rule charter or statutory city, town, or school district.

 

(e) "Unit base year" means the assessment year in which the assessed value of electric generation property is reduced due to the retirement of the electric generating unit.

 

(f) "Unit differential" means (1) the tax capacity of electric generation property in the assessment year preceding the unit base year, minus (2) the tax capacity of electric generation property in the unit base year.  The unit differential may not be less than zero.  The unit differential equals zero if the tax capacity of electric generation property in the eligible taxing jurisdiction in the assessment year preceding the unit base year is less than four percent of the total net tax capacity of the eligible taxing jurisdiction in that year, as adjusted under section 473F.08, subdivision 2, or 276A.06, subdivision 2, as applicable, except that, in an eligible taxing jurisdiction with multiple electric generating units, only the unit differential calculated upon the first retirement of an electric generating unit in that jurisdiction following the effective date of this section is subject to the reduction under this sentence.

 

Subd. 2.  Required notification.  Notwithstanding the requirements of Minnesota Rules, chapter 8100, a public utility must notify the commissioner when the public utility expects to retire an electric generating unit and remove that unit from the property tax base.  The notification must be in the form and manner determined by the commissioner, include information required by the commissioner to calculate transition aid under this section, and be filed together with the reports required under section 273.371.

 

Subd. 3.  Unit transition amount.  (a) The initial unit transition amount equals the product of (1) the unit differential, times (2) the jurisdiction's tax rate for taxes payable in the unit base year.

 

(b) The unit transition amount for the year following the unit base year, or in the year as provided under subdivision 7, equals the initial unit transition amount.  Unit transition amounts in subsequent years must be reduced each year by an amount equal to five percent of the initial unit transition amount.  If the unit transition amount attributable to any unit is less than $5,000 in any year, the unit transition amount for that unit equals zero.


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Subd. 4.  Electric generation transition aid.  Electric generation transition aid for an eligible taxing jurisdiction equals the sum of the unit transition amounts for that jurisdiction.

 

Subd. 5.  Aid elimination.  (a) Notwithstanding subdivision 4, beginning for aid in the year after the year in which the jurisdiction first qualified for aid, aid for an eligible taxing jurisdiction equals zero if the commissioner determines that the eligible taxing jurisdiction's total net tax capacity in the assessment year preceding the aid calculation year is greater than the product of:

 

(1) 90 percent of the jurisdiction's total net tax capacity in the assessment year preceding the aid calculation year in which the jurisdiction first qualified for aid under this section; times

 

(2) the greater of one or the ratio of (i) the statewide total net tax capacity of real and personal property in the assessment year preceding the aid calculation year to (ii) the statewide total net tax capacity of real and personal property in the assessment year preceding the aid calculation year in which the jurisdiction first qualified for aid under this section.

 

(b) For the purposes of this subdivision, "net tax capacity" means net tax capacity as adjusted under section 473F.08, subdivision 2, or 276A.06, subdivision 2, as applicable.

 

(c) If aid to a jurisdiction attributable to a previous unit retirement has been eliminated under this subdivision, the jurisdiction may qualify for aid under this section for subsequent unit retirements.

 

Subd. 6.  Commissioner's duties; payment schedule.  (a) The commissioner of revenue shall compute the amount of electric generation transition aid payable to each jurisdiction under this section.  The portion of aid to an eligible taxing jurisdiction that consists of the initial unit transition amount under subdivision 3, paragraph (a), must be certified on or before May 1 in the year the aid is payable.  The portion of aid to an eligible taxing jurisdiction that consists of the unit transition amount under subdivision 3, paragraph (b), must be certified by August 1 of each year for aids payable in the following calendar year.  The commissioner shall pay aid to each jurisdiction other than school districts annually at the times provided in section 477A.015.  Aids to school districts must be certified to the commissioner of education and paid under section 273.1392.

 

(b) The commissioner of revenue may require counties to provide any data that the commissioner deems necessary to administer this section.

 

Subd. 7.  Aid for prior unit retirements.  An electric generating unit with a unit base year after 2016 but before 2023 must be counted for the purpose of calculating aid under this section.  For a unit eligible to be counted under this subdivision and for the purpose of the schedule of amounts under subdivision 3, paragraph (b), the unit base year is 2023.

 

Subd. 8.  Appropriation.  An amount sufficient to make the aid payments required by this section to eligible taxing jurisdictions other than school districts is annually appropriated from the general fund to the commissioner of revenue.  An amount sufficient to make the aid payments required by this section for school districts is annually appropriated from the general fund to the commissioner of education.

 

EFFECTIVE DATE.  This section is effective for aids payable in 2024 and thereafter.

 

Sec. 20.  Minnesota Statutes 2022, section 477A.30, is amended to read:

 

477A.30 LOCAL HOMELESS PREVENTION AID.

 

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

 

(1) "city" means a statutory or home rule charter city;


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(2) "distribution factor" means the total number of students experiencing homelessness in a county in the current school year and the previous two school years divided by the total number of students experiencing homelessness in all counties in the current school year and the previous two school years; and

 

(3) "families" means families and persons 24 years of age or younger.

 

Subd. 2.  Purpose.  The purpose of this section is to help local governments and Tribal governments ensure no child is homeless within a local jurisdiction by keeping families from losing housing and helping those experiencing homelessness find housing.

 

Subd. 3.  County distribution.  (a) A county's initial local homeless prevention aid amount equals the greater of:  (1) $5,000; or (2)(i) five percent of the money appropriated to local homeless prevention aid under this section subdivision 6, paragraph (a), times (ii) the ratio of the population of the county to the population of all counties.  For the purpose of this paragraph, "population" means the population estimate used to calculate aid under section 477A.0124 for the same aid payable year.

 

(b) The amount of the appropriation in subdivision 6, paragraph (a), remaining after the allocation under paragraph (a) must be allocated to counties by multiplying each county's distribution factor by the total distribution available under this paragraph.  Distribution factors must be based on the most recent counts of students experiencing homelessness in each county, as certified by the commissioner of education to the commissioner of revenue by July 1 of the year the aid is certified to the counties under subdivision 5.

 

(c) A county's total local homeless prevention aid equals the sum of the amounts under paragraphs (a) and (b).

 

Subd. 3a.  Tribal governments distribution.  The total local homeless prevention aid distributed to Tribal governments equals the amount appropriated under subdivision 6, paragraph (b).

 

Subd. 4.  Use of proceeds.  (a) Counties and Tribal governments that receive a distribution under this section must use the proceeds to fund new or existing family homeless prevention and assistance projects or programs.  These projects or programs may be administered by a county, a group of contiguous counties jointly acting together, a city, a group of contiguous cities jointly acting together, a Tribe Tribal government, a group of Tribes Tribal governments, or a community-based nonprofit organization.  Each project or program must include plans for:

 

(1) targeting families with children who are eligible for a prekindergarten through grade 12 academic program and are:

 

(i) living in overcrowded conditions in their current housing;

 

(ii) paying more than 50 percent of their income for rent; or

 

(iii) lacking a fixed, regular, and adequate nighttime residence;

 

(2) targeting unaccompanied youth in need of an alternative residential setting;

 

(3) connecting families with the social services necessary to maintain the families' stability in their homes, including but not limited to housing navigation, legal representation, and family outreach; and

 

(4) one or more of the following:

 

(i) providing rental assistance for a specified period of time which may exceed 24 months; or

 

(ii) providing support and case management services to improve housing stability, including but not limited to housing navigation and family outreach.


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(b) Counties may choose not to spend all or a portion of the distribution under this section.  Any unspent funds must be returned to the commissioner of revenue by December 31 of the year following the year that the aid was received.  Any funds returned to the commissioner under this paragraph must be added to the overall distribution of aids certified under this section in the following year.  Any unspent funds returned to the commissioner after the expiration under subdivision 8 are canceled to the general fund By December 31 of the calendar year following the calendar year that the aid was received, any funds unspent by a county under this section must be sent to the Continuum of Care of which the county is a member.

 

Subd. 5.  Payments.  The commissioner of revenue must compute the amount of local homeless prevention aid payable to each county and Tribal government under this section.  On or before August 1 of each year, the commissioner shall certify the amount to be paid to each county and Tribal government in the following year.  The commissioner shall pay local homeless prevention aid annually at the times provided in section 477A.015.  For aids payable in 2023 only, the commissioner must recalculate and recertify the aid under this section by July 15, 2023.

 

Subd. 6.  Appropriation.  $20,000,000 (a) $35,200,000 is annually appropriated from the general fund to the commissioner of revenue to make payments to counties required under this section.

 

(b) $4,800,000 is annually appropriated from the general fund to the commissioner of revenue to make payments to Tribal governments required under this section.

 

Subd. 7.  Report.  (a) No later than January 15, 2025, the commissioner of revenue must produce a report on projects and programs funded by counties and Tribal governments under this section.  The report must include a list of the projects and programs, the number of people served by each, and an assessment of how each project and program impacts people who are currently experiencing homelessness or who are at risk of experiencing homelessness, as reported by the counties and Tribal governments to the commissioner by December 31 each year on a form prescribed by the commissioner.  The commissioner must provide a copy of the report to the chairs and ranking minority members of the legislative committees with jurisdiction over property taxes and services for persons experiencing homelessness.

 

(b) The report in paragraph (a) must be updated every two years and the commissioner of revenue must provide copies of the updated reports to the chairs and ranking minority members of the legislative committees with jurisdiction over property taxes and services for persons experiencing homelessness by January 15 of the year the report is due.  Report requirements under this subdivision expire following the report which includes the final distribution preceding the expiration in subdivision 8.

 

Subd. 8.  Expiration.  Distributions under this section expire after aids payable in 2028 2031 have been distributed.

 

EFFECTIVE DATE.  This section is effective beginning with aids payable in 2023 and thereafter.

 

Sec. 21.  [477A.31] MAHNOMEN PROPERTY TAX REIMBURSEMENT AID.

 

Subdivision 1.  Aid appropriation.  (a) The commissioner of revenue shall make reimbursement aid payments to compensate for the loss of property tax revenue related to the trust conversion application of the Shooting Star Casino.  The commissioner shall pay the county of Mahnomen, $900,000; the city of Mahnomen, $320,000; and Independent School District No. 432, Mahnomen, $140,000.

 

(b) The payments shall be made annually on July 20.

 

Subd. 2.  Appropriation.  An amount sufficient to pay reimbursement aid under this section is annually appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.


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Sec. 22.  [477A.35] LOCAL AFFORDABLE HOUSING AID.

 

Subdivision 1.  Purpose.  The purpose of this section is to help eligible Tribal Nations and local governments to develop and preserve affordable housing within their jurisdictions in order to keep families from losing housing and to help those experiencing homelessness find housing.

 

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

 

(1) "city distribution factor" means the number of households in a tier I city that are cost-burdened divided by the total number of households that are cost-burdened in Minnesota tier I cities.  The number of cost-burdened households shall be determined using the most recent estimates or experimental estimates provided by the American Community Survey of the United States Census Bureau as of May 1 of the aid calculation year;

 

(2) "cost-burdened household" means a household in which gross rent is 30 percent or more of household income or in which homeownership costs are 30 percent or more of household income;

 

(3) "county distribution factor" means the number of households in a county that are cost-burdened divided by the total number of households in Minnesota that are cost-burdened.  The number of cost-burdened households shall be determined using the most recent estimates or experimental estimates provided by the American Community Survey of the United States Census Bureau as of May 1 of the aid calculation year;

 

(4) "population" has the meaning given in section 477A.011, subdivision 3;

 

(5) "tier I city" means a statutory or home rule charter city that is a city of the first, second, or third class; and

 

(6) "tier II city" means a statutory or home rule charter city that is a city of the fourth class.

 

Subd. 3.  Distribution.  (a) Each county shall receive the sum of:

 

(1) $6,000; plus

 

(2) the product of:

 

(i) the county distribution factor; multiplied by

 

(ii) the total amount available to counties under this section minus the product of clause (1) multiplied by the number of Minnesota counties.

 

(b) The commissioner of revenue shall determine the amount of funding available to a tier I city under this section by multiplying the city's city distribution factor and the amount of funding available to tier I cities under this section.

 

Subd. 4.  Grants to tier II cities.  (a) The commissioner of the Minnesota Housing Finance Agency shall establish a program to award grants of at least $25,000 to tier II cities.  The agency shall develop program guidelines and criteria in consultation with the League of Minnesota Cities.

 

(b) The agency shall attempt to award grants in approximately equal amounts to tier II cities outside and within the metropolitan area.  Among comparable proposals, the agency shall prioritize grants to tier II cities that have a higher proportion of cost-burdened households.

 

(c) A grantee must use its grant on a qualifying project.


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(d) In making grants, the agency shall determine the circumstances, terms, and conditions under which all or any portion thereof will be repaid and shall determine the appropriate security should repayment be required.  Any repaid funds shall be returned to the account or accounts established pursuant to paragraph (e).

 

(e) The agency shall establish a bookkeeping account or accounts in the housing development fund for money distributed to the agency for grants under this subdivision.  By May 1 of each year, the Minnesota Housing Finance Agency shall report to the Department of Revenue on the amount in the account or accounts.

 

Subd. 5.  Qualifying projects.  (a) Qualifying projects shall include projects designed for the purpose of construction, acquisition, rehabilitation, demolition or removal of existing structures, construction financing, permanent financing, interest rate reduction, refinancing, and gap financing of housing to provide affordable housing to households that have incomes which do not exceed, for homeownership projects, 115 percent of the greater of state or area median income as determined by the United States Department of Housing and Urban Development, and for rental housing projects, 80 percent of the greater of state or area median income as determined by the United States Department of Housing and Urban Development, except that the housing developed or rehabilitated with funds under this section must be affordable to the local work force.

 

(b) Gap financing is either:

 

(1) the difference between the costs of the property, including acquisition, demolition, rehabilitation, and construction, and the market value of the property upon sale; or

 

(2) the difference between the cost of the property and the amount the targeted household can afford for housing, based on industry standards and practices.

 

(c) If money distributed under this section is used for demolition or removal of existing structures, the cleared land must be used for the construction of housing to be owned or rented by persons who meet the income limits of paragraph (a).

 

(d) For a nonmetropolitan county or for a city that is not located in a metropolitan county, as defined by section 473.121, subdivision 4, a qualifying project shall include a rental housing project exceeding the income limits established in paragraph (a) if the applicable unit of local government submits, with the annual report required under subdivision 7, the following:

 

(1) a letter of support from at least one employer of at least 20 full-time employees that is located either inside or within 25 miles of the applicable local government.  The letter must indicate that the lack of available housing has impeded the employer's ability to recruit and hire employees, the number of full-time employees, the median wage of full-time employees, and the distance from the applicable local government; and

 

(2) a signed resolution from the applicable local government identifying the project being developed and certifying that the project will be affordable to employees earning median wages from the employer or employers who provided letters of support.

 

(e) For a Tribal Nation, a qualifying project includes emergency rental assistance for a household earning less than 80 percent of statewide median household income, as determined by the United States Department of Housing and Urban Development, as adjusted for household size.

 

Subd. 6.  Use of proceeds.  (a) Any funds distributed under this section must be spent on a qualifying project.  If a tier I city or county demonstrates to the Minnesota Housing Finance Agency that the tier I city or county cannot expend funds on a qualifying project by the deadline imposed by paragraph (b) due to factors outside the control of the tier I city or county, funds shall be considered spent on a qualifying project if the funds are transferred to a local housing trust fund.  Funds transferred to a local housing trust fund must be spent on a project or household that meets the affordability requirements of subdivision 5, paragraph (a).


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(b) Any funds must be returned to the commissioner of revenue if the funds are not spent by December 31 in the third year following the year after the aid was received.

 

Subd. 7.  Administration.  (a) The commissioner of revenue must compute the amount of aid payable to each aid recipient under this section.  Beginning with aids payable in calendar year 2024, before computing the amount of aid for counties and after receiving the report required by subdivision 4, paragraph (e), the commissioner shall compute the amount necessary to increase the amount in the account or accounts established under that paragraph to $3,400,000.  The amount calculated under the preceding sentence shall be deducted from the amount available to counties for the purposes of certifying the amount of aid to be paid to counties in the following year.  By August 1 of each year, the commissioner must certify the amount to be paid to each aid recipient in the following year.  The commissioner must pay local affordable housing aid annually at the times provided in section 477A.015.  Before paying the first installment of aid annually, the commissioner of revenue shall transfer to the Minnesota Housing Finance Agency from the funds available for counties, for deposit in the account or accounts established under subdivision 4, paragraph (e), the amount computed in the prior year to be necessary to increase the amount in the account or accounts established under that paragraph to $3,400,000.

 

(b) Beginning in 2025, aid recipients shall submit a report annually, no later than December 1 of each year, to the Minnesota Housing Finance Agency.  The report shall include documentation of the location of any unspent funds distributed under this section and of qualifying projects completed or planned with funds under this section.  If an aid recipient fails to submit a report, fails to spend funds within the timeline imposed under subdivision 6, paragraph (b), or uses funds for a project that does not qualify under this section, the Minnesota Housing Finance Agency shall notify the Department of Revenue and the aid recipient must repay funds under paragraph (c) by February 15 of the following year.

 

(c) By May 15, after receiving notice from the Minnesota Housing Finance Agency, an aid recipient must repay to the commissioner of revenue funds the aid recipient received under this section if the aid recipient:

 

(1) fails to spend the funds within the time allowed under subdivision 6, paragraph (b);

 

(2) spends the funds on anything other than a qualifying project; or

 

(3) fails to submit a report documenting use of the funds.

 

(d) The commissioner of revenue must stop distributing funds to an aid recipient that the Minnesota Housing Finance Agency reports to have, in three consecutive years, failed to use funds, misused funds, or failed to report on its use of funds.

 

(e) The commissioner may resume distributing funds to an aid recipient to which the commissioner has stopped payments once the Minnesota Housing Finance Agency certifies that the aid recipient has submitted documentation of plans for a qualifying project.

 

(f) By June 1, any funds repaid to the commissioner of revenue by tier I cities under paragraph (c) must be added to the overall distribution of aids certified under this section for tier I cities in the following year.  By June 1, any funds repaid to the commissioner of revenue by counties under paragraph (c) must be added to the overall distribution of aids certified under this section for counties in the following year.  By June 1, any funds repaid to the commissioner of revenue by Tribal Nations under paragraph (c) must be added to the overall distribution of aids certified under this section for Tribal Nations in the following year.

 

(g) In order to receive a distribution under this section, a Tribal Nation must certify to the commissioner of revenue the most recent estimate of the total number of enrolled members of the Tribal Nation.  The information must be annually certified by March 1 in the form prescribed by the commissioner of revenue.


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Subd. 8.  County consultation with cities.  A county that receives funding under this section shall regularly consult with the cities in the jurisdictions of which its qualifying projects are planned or located.

 

Subd. 9.  Appropriations.  (a) $24,000,000 is annually appropriated from the general fund to the commissioner of revenue to make payments to counties as required under this section.

 

(b) $6,800,000 is annually appropriated from the general fund to the commissioner of revenue to make payments to tier I cities as required under this section.

 

(c) $4,200,000 is annually appropriated from the general fund to the commissioner of revenue to make payments to eligible Tribal Nations as required under this section.

 

(d) In fiscal years 2024 and 2025 only, an additional $10,200,000 is annually appropriated from the general fund to the commissioner of revenue to make payments to counties as required under this section.  In fiscal years 2024 and 2025 only, an additional $3,000,000 is annually appropriated from the general fund to the commissioner of revenue to make payments to tier I cities as required under this section.  In fiscal years 2024 and 2025 only, an additional $1,800,000 is annually appropriated from the general fund to the commissioner of revenue to make payments to eligible Tribal Nations as required under this section.  In fiscal years 2024 and 2025 only, the commissioner shall transfer from the funds available to counties to the Minnesota Housing Finance Agency a sum sufficient to increase the amount in the account or accounts established under subdivision 4, paragraph (e), to $4,900,000.  For aids payable in 2023 only, the commissioner may compute the amount of aid to be paid to aid recipients as late as August 1, 2023, and may make payments of aid under this section in one installment on December 26.

 

EFFECTIVE DATE.  This section is effective beginning with aids payable in calendar year 2023.

 

Sec. 23.  Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008, chapter 154, article 1, section 4, and Laws 2013, chapter 143, article 2, section 33, is amended to read:

 

Sec. 3.  MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT, PROPERTY TAX REIMBURSEMENT.

 

Subdivision 1.  Aid appropriation.  (a) $1,200,000 is appropriated annually from the general fund to the commissioner of revenue to be used to make payments to compensate for the loss of property tax revenue related to the trust conversion application of the Shooting Star Casino.  The commissioner shall pay the county of Mahnomen, $900,000; the city of Mahnomen, $160,000; and Independent School District No. 432, Mahnomen, $140,000.  The payments shall be made on July 20, of 2013 and each subsequent year. 

 

(b) This section expires after aids payable year 2023.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

Sec. 24.  STUDY OF STATE-OWNED LAKESHORE.

 

No later than January 31, 2025, the commissioner of revenue, in consultation with the Department of Natural Resources and counties, must produce a report on valuation methods used to value the acreage and shoreline areas within all commissioner-administered and county-administered other natural resources land, as defined in Minnesota Statutes, section 477A.11, subdivision 4.  The report must comply with the requirements of Minnesota Statutes, sections 3.195 and 3.197.  The report must include, by county, the most recent assessed value and acreage, as required under Minnesota Statutes, section 273.18, paragraph (b), aggregated by parcels abutting lakes identified by a Department of Natural Resources Division of Waters Lake Number and by parcels not abutting lakes identified by


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a Department of Natural Resources Division of Waters Lake Number.  Counties must report to the commissioner of revenue any necessary data by December 30, 2023.  The commissioner must provide a copy of the report to the chairs and ranking minority members of the legislative committees with jurisdiction over taxes and property taxation by January 31, 2025. 

 

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

 

Sec. 25.  ONETIME INCREASE IN THE RENTER'S CREDIT AND HOMESTEAD CREDIT STATE REFUND.

 

Subdivision 1.  Homestead credit refund.  For claims filed based on taxes payable in 2023, the commissioner shall increase by 13.8 percent the refund otherwise payable under Minnesota Statutes, section 290A.04, subdivision 2.

 

Subd. 2.  Renter's credit increase.  For claims filed based on rent paid in 2022, the commissioner shall increase by 13.8 percent the refund otherwise payable under Minnesota Statutes, section 290A.04, subdivision 2a.

 

Subd. 3.  No notification of appeal rights.  In adjusting homestead credit refunds and renter property tax refunds under this section, the commissioner is not required to provide information concerning appeal rights that ordinarily must be provided whenever the commissioner adjusts refunds payable under Minnesota Statutes, chapter 290.  Taxpayers retain all rights to appeal adjustments under this section.

 

Subd. 4.  Appropriation.  The amount necessary to make the payments required under this section is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective only for refunds based on rent paid in 2022 and property taxes payable in 2023.

 

Sec. 26.  TARGETING PROPERTY TAX REFUND; TEMPORARY INCREASE FOR PROPERTY TAXES PAYABLE IN 2023.

 

Notwithstanding any law to the contrary, for refunds based on property taxes payable in 2023, the refund calculated under Minnesota Statutes, section 290A.04, subdivision 2h, must be calculated by substituting:

 

(1) six percent for 12 percent; and

 

(2) $2,500 for $1,000.

 

EFFECTIVE DATE.  This section is effective for refunds based on property taxes payable in 2023 only.

 

Sec. 27.  2021 AID PENALTY FORGIVENESS; CITY OF ECHO.

 

Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the city of Echo must receive its aid payment for calendar year 2021 under Minnesota Statutes, section 477A.013, that was withheld under Minnesota Statutes, section 477A.017, subdivision 3, and its small city assistance payment for calendar year 2021 under Minnesota Statutes, section 162.145, that was withheld under Minnesota Statutes, section 162.145, subdivision 3, paragraph (c), provided that the state auditor certifies to the commissioner of revenue that it received the annual financial reporting form for 2020 from the city by June 1, 2023.  The commissioner of revenue must make a payment of $46,060 to the city by June 30, 2023.

 

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


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Sec. 28.  2021 AID PENALTY FORGIVENESS; CITY OF MORTON.

 

Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the city of Morton must receive its aid payment for calendar year 2021 under Minnesota Statutes, section 477A.013, that was withheld under Minnesota Statutes, section 477A.017, subdivision 3, and its small city assistance payment for calendar year 2021 under Minnesota Statutes, section 162.145, that was withheld under Minnesota Statutes, section 162.145, subdivision 3, paragraph (c), provided that the state auditor certifies to the commissioner of revenue that it received the annual financial reporting form for 2020 from the city by June 1, 2023.  The commissioner of revenue must make a payment of $79,476 to the city by June 30, 2023.

 

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

 

Sec. 29.  REPEALER.

 

Minnesota Statutes 2022, sections 477A.011, subdivisions 30a, 38, 42, and 45; 477A.013, subdivision 13; and 477A.16, subdivisions 1, 2, and 3, are repealed.

 

EFFECTIVE DATE.  This section is effective for aids payable in calendar year 2024 and thereafter.

 

ARTICLE 5

SALES AND USE TAXES

 

Section 1.  Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision to read:

 

Subd. 59.  Cannabis.  "Cannabis" means any species of the genus cannabis plant, or any mixture or preparation of any species of the genus cannabis plant, including whole plant extracts and resins.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except if a bill styled as H. F. No. 100 is finally enacted at the 2023 regular session then this section does not take effect.

 

Sec. 2.  Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision to read:

 

Subd. 60.  Adult-use cannabis.  "Adult-use cannabis" means cannabis, including cannabis extracts and resins, that produces or is advertised as producing intoxicating or mood-altering effects when consumed by any route of administration.  Adult-use cannabis does not include a product dispensed by a registered medical cannabis manufacturer under sections 152.22 to 152.37.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except if a bill styled as H. F. No. 100 is finally enacted at the 2023 regular session then this section does not take effect.

 

Sec. 3.  Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision to read:

 

Subd. 61.  Adult-use cannabis product.  "Adult-use cannabis product" means a cannabis product that produces or is advertised as producing intoxicating or mood-altering effects when consumed by any route of administration.  Adult-use cannabis product does not include a product dispensed by a registered medical cannabis manufacturer under sections 152.22 to 152.37.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except if a bill styled as H. F. No. 100 is finally enacted at the 2023 regular session then this section does not take effect.


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Sec. 4.  Minnesota Statutes 2022, section 297A.67, subdivision 2, is amended to read:

 

Subd. 2.  Food and food ingredients.  Except as otherwise provided in this subdivision, food and food ingredients are exempt.  For purposes of this subdivision, "food" and "food ingredients" mean substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value.  Food and food ingredients exempt under this subdivision do not include candy, soft drinks, dietary supplements, and prepared foods.  Food and food ingredients do not include alcoholic beverages and tobacco.  Food and food ingredients do not include adult-use cannabis and adult-use cannabis products.  For purposes of this subdivision, "alcoholic beverages" means beverages that are suitable for human consumption and contain one-half of one percent or more of alcohol by volume.  For purposes of this subdivision, "tobacco" means cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco.  For purposes of this subdivision, "dietary supplements" means any product, other than tobacco, intended to supplement the diet that:

 

(1) contains one or more of the following dietary ingredients:

 

(i) a vitamin;

 

(ii) a mineral;

 

(iii) an herb or other botanical;

 

(iv) an amino acid;

 

(v) a dietary substance for use by humans to supplement the diet by increasing the total dietary intake; and

 

(vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient described in items (i) to (v);

 

(2) is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such form, is not represented as conventional food and is not represented for use as a sole item of a meal or of the diet; and

 

(3) is required to be labeled as a dietary supplement, identifiable by the supplement facts box found on the label and as required pursuant to Code of Federal Regulations, title 21, section 101.36.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except if a bill styled as H. F. No. 100 is finally enacted at the 2023 regular session then this section does not take effect.

 

Sec. 5.  Minnesota Statutes 2022, section 297A.67, subdivision 7, is amended to read:

 

Subd. 7.  Drugs; medical devices.  (a) Sales of the following drugs and medical devices for human use are exempt:

 

(1) drugs, including over-the-counter drugs;

 

(2) single-use finger-pricking devices for the extraction of blood and other single-use devices and single-use diagnostic agents used in diagnosing, monitoring, or treating diabetes;

 

(3) insulin and medical oxygen for human use, regardless of whether prescribed or sold over the counter;

 

(4) prosthetic devices;


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(5) durable medical equipment for home use only;

 

(6) mobility enhancing equipment;

 

(7) prescription corrective eyeglasses; and

 

(8) kidney dialysis equipment, including repair and replacement parts.

 

(b) Items purchased in transactions covered by:

 

(1) Medicare as defined under title XVIII of the Social Security Act, United States Code, title 42, section 1395, et seq.; or

 

(2) Medicaid as defined under title XIX of the Social Security Act, United States Code, title 42, section 1396, et seq.

 

(c) For purposes of this subdivision:

 

(1) "Drug" means a compound, substance, or preparation, and any component of a compound, substance, or preparation, other than food and food ingredients, dietary supplements, adult-use cannabis, adult-use cannabis products, or alcoholic beverages that is:

 

(i) recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them;

 

(ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or

 

(iii) intended to affect the structure or any function of the body.

 

(2) "Durable medical equipment" means equipment, including repair and replacement parts, including single‑patient use items, but not including mobility enhancing equipment, that:

 

(i) can withstand repeated use;

 

(ii) is primarily and customarily used to serve a medical purpose;

 

(iii) generally is not useful to a person in the absence of illness or injury; and

 

(iv) is not worn in or on the body.

 

For purposes of this clause, "repair and replacement parts" includes all components or attachments used in conjunction with the durable medical equipment, including repair and replacement parts which are for single patient use only.

 

(3) "Mobility enhancing equipment" means equipment, including repair and replacement parts, but not including durable medical equipment, that:

 

(i) is primarily and customarily used to provide or increase the ability to move from one place to another and that is appropriate for use either in a home or a motor vehicle;

 

(ii) is not generally used by persons with normal mobility; and


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(iii) does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.

 

(4) "Over-the-counter drug" means a drug that contains a label that identifies the product as a drug as required by Code of Federal Regulations, title 21, section 201.66.  The label must include a "drug facts" panel or a statement of the active ingredients with a list of those ingredients contained in the compound, substance, or preparation.  Over‑the-counter drugs do not include grooming and hygiene products, regardless of whether they otherwise meet the definition.  "Grooming and hygiene products" are soaps, cleaning solutions, shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.

 

(5) "Prescribed" and "prescription" means a direction in the form of an order, formula, or recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed health care professional.

 

(6) "Prosthetic device" means a replacement, corrective, or supportive device, including repair and replacement parts, worn on or in the body to:

 

(i) artificially replace a missing portion of the body;

 

(ii) prevent or correct physical deformity or malfunction; or

 

(iii) support a weak or deformed portion of the body.

 

Prosthetic device does not include corrective eyeglasses.

 

(7) "Kidney dialysis equipment" means equipment that:

 

(i) is used to remove waste products that build up in the blood when the kidneys are not able to do so on their own; and

 

(ii) can withstand repeated use, including multiple use by a single patient, notwithstanding the provisions of clause (2).

 

(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of the item purchased in the transaction is paid for or reimbursed by the federal government or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private insurance company administering the Medicare or Medicaid program on behalf of the federal government or the state of Minnesota, or by a managed care organization for the benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu of conventional Medicare or Medicaid coverage pursuant to agreement with the federal government or the state of Minnesota.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except if a bill styled as H. F. No. 100 is finally enacted at the 2023 regular session then this section does not take effect.

 

Sec. 6.  Minnesota Statutes 2022, section 297A.68, subdivision 25, is amended to read:

 

Subd. 25.  Sale of property used in a trade or business.  (a) The sale of tangible personal property primarily used in a trade or business is exempt if the sale is not made in the normal course of business of selling that kind of property and if one of the following conditions is satisfied:

 

(1) the sale occurs in a transaction subject to or described in section 118, 331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, or 1033 of the Internal Revenue Code, as amended through December 16, 2016;


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(2) the sale is between members of a controlled group as defined in section 1563(a) of the Internal Revenue Code;

 

(3) the sale is between a sole member of a disregarded limited liability company and the disregarded limited liability company;

 

(3) (4) the sale is a sale of farm machinery;

 

(4) (5) the sale is a farm auction sale;

 

(5) (6) the sale is a sale of substantially all of the assets of a trade or business; or

 

(6) (7) the total amount of gross receipts from the sale of trade or business property made during the calendar month of the sale and the preceding 11 calendar months does not exceed $1,000.

 

The use, storage, distribution, or consumption of tangible personal property acquired as a result of a sale exempt under this subdivision is also exempt.

 

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

 

(1) "Disregarded limited liability company" means a limited liability company that is disregarded as an entity separate from its owner under the Internal Revenue Code.

 

(1) (2) A "farm auction" is a public auction conducted by a licensed auctioneer if substantially all of the property sold consists of property used in the trade or business of farming and property not used primarily in a trade or business.

 

(2) (3) "Trade or business" includes the assets of a separate division, branch, or identifiable segment of a trade or business if, before the sale, the income and expenses attributable to the separate division, branch, or identifiable segment could be separately ascertained from the books of account or record (the lease or rental of an identifiable segment does not qualify for the exemption).

 

(3) (4) A "sale of substantially all of the assets of a trade or business" must occur as a single transaction or a series of related transactions within the 12-month period beginning on the date of the first sale of assets intended to qualify for the exemption provided in paragraph (a), clause (5).

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after June 30, 2023.

 

Sec. 7.  Minnesota Statutes 2022, section 297A.70, subdivision 2, is amended to read:

 

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

 

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

 

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


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

 

(4) notwithstanding paragraph (d), the sales and purchases by the Metropolitan Council of vehicles and repair parts to equip operations provided for in section 473.4051 are exempt through December 31, 2016;

 

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

 

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

 

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

 

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

 

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

 

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except for leases entered into by the United States or its agencies or instrumentalities;

 

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67, subdivision 2, adult-use cannabis, and adult-use cannabis products except for lodging, prepared food, candy, soft drinks, and alcoholic beverages, adult-use cannabis, and adult-use cannabis products purchased directly by the United States or its agencies or instrumentalities; or

 

(5) goods or services purchased by a local government as inputs to a liquor store, gas or electric utility, solid waste hauling service, solid waste recycling service, landfill, golf course, marina, campground, cafe, or laundromat.

 

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

 

(d) For purposes of the exemption granted under this subdivision, "local governments" has the following meaning:

 

(1) for the period prior to January 1, 2017, local governments means statutory or home rule charter cities, counties, and townships; and

 

(2) beginning January 1, 2017, local governments means statutory or home rule charter cities, counties, and townships; special districts as defined under section 6.465; any instrumentality of a statutory or home rule charter city, county, or township as defined in section 471.59; and any joint powers board or organization created under section 471.59.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except if a bill styled as H. F. No. 100 is finally enacted at the 2023 regular session then this section does not take effect.


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Sec. 8.  Minnesota Statutes 2022, section 297A.70, subdivision 4, is amended to read:

 

Subd. 4.  Sales to nonprofit groups.  (a) All sales, except those listed in paragraph (b), to the following "nonprofit organizations" are exempt:

 

(1) a corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes if the item purchased is used in the performance of charitable, religious, or educational functions;

 

(2) any senior citizen group or association of groups that:

 

(i) in general limits membership to persons who are either age 55 or older, or persons with a physical disability;

 

(ii) is organized and operated exclusively for pleasure, recreation, and other nonprofit purposes, not including housing, no part of the net earnings of which inures to the benefit of any private shareholders; and

 

(iii) is an exempt organization under section 501(c) of the Internal Revenue Code; and

 

(3) an organization that qualifies for an exemption for memberships under subdivision 12 if the item is purchased and used in the performance of the organization's mission.

 

For purposes of this subdivision, charitable purpose includes the maintenance of a cemetery owned by a religious organization.

 

(b) This exemption does not apply to the following sales:

 

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

 

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

 

(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67, subdivision 2, except wine purchased by an established religious organization for sacramental purposes or as allowed under subdivision 9a, adult-use cannabis, and adult-use cannabis products; and

 

(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as provided in paragraph (c).

 

(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, only if the vehicle is:

 

(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a passenger automobile, as defined in section 168.002, if the automobile is designed and used for carrying more than nine persons including the driver; and

 

(2) intended to be used primarily to transport tangible personal property or individuals, other than employees, to whom the organization provides service in performing its charitable, religious, or educational purpose.


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(d) A limited liability company also qualifies for exemption under this subdivision if (1) it consists of a sole member that would qualify for the exemption, and (2) the items purchased qualify for the exemption.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except if a bill styled as H. F. No. 100 is finally enacted at the 2023 regular session then this section does not take effect.

 

Sec. 9.  Minnesota Statutes 2022, section 297A.70, subdivision 18, is amended to read:

 

Subd. 18.  Nursing homes and boarding care homes.  (a) All sales, except those listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding care home certified as a nursing facility under title 19 of the Social Security Act are exempt if the facility:

 

(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the Internal Revenue Code; and

 

(2) is certified to participate in the medical assistance program under title 19 of the Social Security Act, or certifies to the commissioner that it does not discharge residents due to the inability to pay.

 

(b) This exemption does not apply to the following sales:

 

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

 

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

 

(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67, subdivision 2, adult-use cannabis, and adult-use cannabis products; and

 

(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as provided in paragraph (c).

 

(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, only if the vehicle is:

 

(1) a truck, as defined in section 168.002; a bus, as defined in section 168.002; or a passenger automobile, as defined in section 168.002, if the automobile is designed and used for carrying more than nine persons including the driver; and

 

(2) intended to be used primarily to transport tangible personal property or residents of the nursing home or boarding care home.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except if a bill styled as H. F. No. 100 is finally enacted at the 2023 regular session then this section does not take effect.

 

Sec. 10.  Minnesota Statutes 2022, section 297A.70, subdivision 19, is amended to read:

 

Subd. 19.  Nonprofit snowmobile clubs; machinery and equipment.  (a) The following sales to an eligible nonprofit snowmobile club are exempt:


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(1) sales of tangible personal property, including grooming machines, attachments, other associated accessories, and repair parts, to a nonprofit snowmobile club that is used primarily and directly for the grooming of state or grant-in-aid snowmobile trails are exempt.  The exemption applies to grooming machines, attachments, other associated accessories, and repair parts.; and

 

(2) sales of materials and supplies used or consumed in, and equipment incorporated into, the construction, reconstruction, maintenance, or improvement of state or grant-in-aid snowmobile trails, completed by the nonprofit snowmobile club.

 

(b) A nonprofit snowmobile club is eligible for the exemption under this subdivision if it received, in the current year or in the previous three-year period, a state grant-in-aid maintenance and grooming grant administered by the Department of Natural Resources by applying for the grant with a local unit of government sponsor.

 

(c) The exemption under paragraph (a), clause (2), expires July 1, 2027, for sales and purchases made after June 30, 2027.

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after June 30, 2023.

 

Sec. 11.  SALES AND USE TAX EXEMPTION; CERTAIN NATURAL GAS FEES.

 

Subdivision 1.  Exemption.  Notwithstanding Minnesota Statutes, section 297A.67, subdivision 15, clause (2), fees related to natural gas sold for residential use to customers who were metered and billed as residential users and who used natural gas for their primary source of residential heat are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A for purposes of the billing periods May to October, provided that:

 

(1) the fee for the natural gas is subject to a cost recovery plan for the price increase in natural gas during the period February 13, 2021, to February 17, 2021, identified in docket G-999/CI-21-135 before the Minnesota Public Utilities Commission; and

 

(2) the fee is separately stated and labeled as a fee pursuant to a cost recovery plan under clause (1). 

 

Subd. 2.  Application; refund.  (a) By October 1, 2023, each utility must apply to the commissioner of revenue for a refund of sales taxes collected and remitted pursuant to Minnesota Statutes, section 297A.77, on fees for sales and purchases of natural gas subject to a cost recovery plan under subdivision 1, clause (1), that were added to residential customers' bills for the period beginning September 1, 2021, and ending June 30, 2023.

 

(b) The provisions of Minnesota Statutes, section 289A.50, subdivision 2, except for paragraph (c), apply to refunds issued under this subdivision.  For purposes of this subdivision, "utility" means a utility subject to the cost recovery plan under subdivision 1, clause (1).  Within 90 days after the date the commissioner issues the refund under Minnesota Statutes, section 289A.50, subdivision 2, paragraph (a), to the utility, the utility must provide a plan to the Minnesota Public Utilities Commission for crediting taxes exempt under subdivision 1 to residential customers.

 

(c) The plan must be approved by the Minnesota Public Utilities Commission.  Any amount not refunded or credited to a residential customer by a utility within 60 days of approval of the plan must be returned to the commissioner by the utility. 

 

EFFECTIVE DATE.  This section is effective retroactively for fees applied to sales and purchases of natural gas that are billed from September 1, 2021, to December 31, 2026.


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Sec. 12.  TEMPORARY SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS; CERTAIN ENTITIES.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used or consumed in and equipment incorporated into the construction, reconstruction, repair, maintenance, or improvement of buildings or facilities used principally by the following entities are exempt if purchased after June 30, 2021, and before January 1, 2025:

 

(1) school districts, as defined under Minnesota Statutes, section 297A.70, subdivision 2, paragraph (c);

 

(2) local governments, as defined under Minnesota Statutes, section 297A.70, subdivision 2, paragraph (d);

 

(3) hospitals and nursing homes owned and operated by political subdivisions of the state, as described under Minnesota Statutes, section 297A.70, subdivision 2, paragraph (a), clause (3);

 

(4) county law libraries under Minnesota Statutes, chapter 134A, and public libraries, regional public library systems, and multicounty, multitype library systems, as defined in Minnesota Statutes, section 134.001;

 

(5) nonprofit groups, as defined under Minnesota Statutes, section 297A.70, subdivision 4;

 

(6) hospitals, outpatient surgical centers, and critical access dental providers, as defined under Minnesota Statutes, section 297A.70, subdivision 7; and

 

(7) nursing homes and boarding care homes, as defined under Minnesota Statutes, section 297A.70, subdivision 18.

 

(b) Materials and supplies used or consumed in and equipment incorporated into the construction, reconstruction, repair, maintenance, or improvement of public infrastructure of any kind, including but not limited to roads, bridges, culverts, drinking water facilities, and wastewater facilities, purchased by a contractor, subcontractor, or builder as part of a contract with the following entities are exempt if purchased after June 30, 2021, and before January 1, 2025:

 

(1) school districts, as defined under Minnesota Statutes, section 297A.70, subdivision 2, paragraph (c); or

 

(2) local governments, as defined under Minnesota Statutes, section 297A.70, subdivision 2, paragraph (d).

 

(c) The tax on purchases exempt under this section must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the manner provided in Minnesota Statutes, section 297A.75.  Claims for refund for sales tax paid on eligible purchases must be filed by February 28, 2025.  Refunds for eligible purchases must not be issued before June 30, 2023, or after June 30, 2025.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from July 1, 2021, and applies to sales and purchases made after June 30, 2021, and before January 1, 2025.

 

Sec. 13.  CITY OF CHANHASSEN; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used or consumed in and equipment incorporated into the construction, reconstruction, upgrade, expansion, renovation, or remodeling of a new city hall and senior center, council chambers, and park amenities in the city of Chanhassen are exempt from sales and use tax under Minnesota Statutes, chapter 297A, provided that the materials, supplies, and equipment are purchased after December 31, 2024, and before February 1, 2027.


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(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided in Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to sales and purchases made after December 31, 2024, and before February 1, 2027.

 

Sec. 14.  CITY OF EDINA; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used or consumed in and equipment incorporated into the construction, reconstruction, upgrade, expansion, renovation, or remodeling of a community health and safety center in the city of Edina are exempt from sales and use tax under Minnesota Statutes, chapter 297A, provided that the materials, supplies, and equipment are purchased after December 31, 2024, and before January 1, 2026.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided in Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to sales and purchases made after December 31, 2024, and before January 1, 2026.

 

Sec. 15.  ELY PUBLIC SCHOOLS; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the following projects in Independent School District No. 696, Ely Public Schools, are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after May 1, 2019, and before July 1, 2021:

 

(1) renovations to the elementary school building and high school building; and

 

(2) construction of a building that connects the elementary school and high school buildings containing classrooms, a common area, a gymnasium, and administrative offices.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2023.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from May 2, 2019, and applies to sales and purchases made after May 1, 2019, and before July 1, 2021.


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Sec. 16.  HIBBING PUBLIC SCHOOLS; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the following projects in the city of Hibbing are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after May 1, 2019, and before July 1, 2021:

 

(1) the addition of an Early Childhood Family Education Center to an existing elementary school; and

 

(2) improvements to an existing athletic facility in Independent School District No. 701, Hibbing Public Schools.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2023.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from May 2, 2019, and applies to sales and purchases made after May 1, 2019, and before July 1, 2021.

 

Sec. 17.  MINNEAPOLIS-ST. PAUL INTERNATIONAL AIRPORT; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction, reconstruction, repair, maintenance, or improvement of public infrastructure at the Minneapolis‑St. Paul International Airport purchased by a contractor or subcontractor are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after December 31, 2024, and before January 1, 2028.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to purchases made after December 31, 2024, and before January 1, 2028.

 

Sec. 18.  CITY OF MOORHEAD; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used or consumed in and equipment incorporated into the construction, reconstruction, upgrade, expansion, renovation, or remodeling of a regional library and community center in the city of Moorhead are exempt from sales and use tax under Minnesota Statutes, chapter 297A, provided that the materials, supplies, and equipment are purchased after December 31, 2024, and before April 1, 2027.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided in Minnesota Statutes, section 297A.75, subdivision 1, clause (17).


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Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to sales and purchases made after December 31, 2024, and before April 1, 2027.

 

Sec. 19.  CITY OF OAKDALE; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used or consumed in and equipment incorporated into the construction of a new public works facility in the city of Oakdale are exempt from sales and use tax under Minnesota Statutes, chapter 297A, provided that the materials, supplies, and equipment are purchased after December 31, 2024, and before January 1, 2027.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to sales and purchases made after December 31, 2024, and before January 1, 2027.

 

Sec. 20.  CITY OF RAMSEY; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used or consumed in and equipment incorporated into the construction, reconstruction, upgrade, expansion, renovation, or remodeling of a new water treatment plant in the city of Ramsey are exempt from sales and use tax under Minnesota Statutes, chapter 297A, provided that the materials, supplies, and equipment are purchased after December 31, 2024, and before January 1, 2026.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided in Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to sales and purchases made after December 31, 2024, and before January 1, 2026.

 

Sec. 21.  RED LAKE COUNTY SCHOOL DISTRICT; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction of a new school in Independent School District No. 2906, Red Lake County School District, are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after December 31, 2020, and before July 1, 2021, and after December 31, 2024, and before January 1, 2026.


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(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2023.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from January 1, 2021, and applies to sales and purchases made after December 31, 2020, and before July 1, 2021, and after December 31, 2024, and before January 1, 2026.

 

Sec. 22.  RED ROCK CENTRAL SCHOOL DISTRICT; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction of a new prekindergarten through grade 12 learning facility in Independent School District No. 2884, Red Rock Central School District, are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after December 31, 2024, and before July 1, 2025.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to sales and purchases made after December 31, 2024, and before July 1, 2025.

 

Sec. 23.  ROCK RIDGE PUBLIC SCHOOLS; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction of two new elementary school buildings and a new high school building in Independent School District No. 2909, Rock Ridge Public Schools, are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after May 1, 2019, and before July 1, 2021.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2023.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from May 2, 2019, and applies to sales and purchases made after May 1, 2019, and before July 1, 2021.


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Sec. 24.  CITY OF SPRING GROVE; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS AND CAPITAL EQUIPMENT.

 

Subdivision 1.  Exemption; refund.  (a) The sale and purchase of the following items are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if the items are used to repair, replace, or otherwise recover from real and personal property damage that occurred during the fire on December 22, 2022, in the city of Spring Grove:

 

(1) building materials and supplies used or consumed in, and equipment incorporated into, the construction, replacement, or repair of real property; and

 

(2) capital equipment to replace equipment destroyed in the fire.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  The exemption under paragraph (a) applies to sales and purchases made after December 22, 2022, and before January 1, 2028.  Refunds for eligible purchases must not be issued until after June 30, 2023.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from December 23, 2022, and applies to sales and purchases made after December 22, 2022, and before January 1, 2028.

 

Sec. 25.  SPRINGFIELD SCHOOL DISTRICT; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the following projects for Independent School District No. 85, Springfield School District, are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after December 31, 2024, and before July 1, 2025:

 

(1) construction of a main secure entrance;

 

(2) construction of a required tornado storm shelter and related safety, security, and accessibility improvements;

 

(3) installation of HVAC improvements;

 

(4) renovation and interior modifications necessary to convert the existing elementary school gymnasium for use for career and technical education trades and an auto shop; and

 

(5) addition of a new school gymnasium, including the construction and improvement of new locker rooms, and the renovation and repurposing of existing locker rooms for use for cafeteria improvements and school programming needs.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to sales and purchases made after December 31, 2024, and before July 1, 2025.


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Sec. 26.  CITY OF WAYZATA; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used or consumed in and equipment incorporated into the following projects in the city of Wayzata are exempt from sales and use tax under Minnesota Statutes, chapter 297A, provided that the materials, supplies, and equipment are purchased after March 31, 2020, and before July 1, 2021:

 

(1) expansion and remodeling of Depot Park;

 

(2) construction of community docks for purposes of access from Lake Minnetonka;

 

(3) construction of a lakeside boardwalk of approximately 1,500 lineal feet;

 

(4) shoreline restoration, including installation of native plants, trees, and natural habitat;

 

(5) restoration of Section Foreman House, including installation of a learning center to provide indoor and outdoor classroom and community space;

 

(6) construction of Eco Park, including shoreline restoration and marsh and water quality improvement, a pier extension of the lakeside boardwalk, and creation of eco-living classrooms;

 

(7) construction of a public plaza with a restroom, 9/11 memorial, interactive water display, and gathering space;

 

(8) construction of a regional multiuse trail; and

 

(9) construction of railroad crossings.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided in Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2023.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from April 1, 2020, and applies to sales and purchases made after March 31, 2020, and before July 1, 2021.

 

Sec. 27.  CITY OF WOODBURY; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used or consumed in and equipment incorporated into the construction, reconstruction, upgrade, expansion, renovation, or remodeling of the Central Park project in the city of Woodbury are exempt from sales and use tax under Minnesota Statutes, chapter 297A, provided that the materials, supplies, and equipment are purchased after December 31, 2024, and before January 1, 2026.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to sales and purchases made after December 31, 2024, and before January 1, 2026.


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ARTICLE 6

MINERALS TAXES

 

Section 1.  Minnesota Statutes 2022, section 272.02, subdivision 73, is amended to read:

 

Subd. 73.  Proper