|S.F. No. 2869 - Omnibus Tax Bill, Second Engrossment|
|Author:||Senator Thomas Bakk|
|Prepared by:||JoAnne Zoff, Senate Counsel (651/296-3803)
Michelle Allen, Senate Counsel (651/296-0558)
Jack Paulson, Senate Research (651/296-4965)
|Date:||April 17, 2008|
Aids to Local Governments
Section 1. City revenue need. Sets the minimum per capita city revenue need for cities over 2,500 population at $290 per capita.
Section 2. City aid base. Eliminates the regional center aid base for cities outside the metropolitan area that have over 10,000 population and the $6 per capita small city aid base. This section also provides for city aid base adjustments of $135,000 for Excelsior, and $14,700 for Mendota for aids payable in 2009.
Section 3. Small city aid base. Replaces the $6 per capita aid base adjustment for cities under 5,000 population with an adjustment equal to $12 per capita. The adjustment is calculated using the highest federal census population since 1940.
Section 4. City jobs base. Provides a new city aid base for cities over 5,000 population equal to $55 times the number of jobs per capita reported for the city by Department of Employment and Economic Development. The city job base cannot exceed $12 million.
Section 5. County tax-base equalization aid. The per capita amount for tax base equalization aid is increased from $185 to $228 and the tax rate is reduced from 9.45 to 8.6 percent.
Section 6. County transition aid. County transition aid is re-instated at the 2007 level.
Section 7. Out-of-home placement aid. Provides $500,000 in 2009 to Beltrami County to help meet the county's cost of out-of-home placement programs.
Section 8. Township aid. Provides aid for townships based on the township's area, population, and the proportion of agricultural property located in the town.
Section 9. City formula aid. Adds a reference to the new city jobs base to the LGA calculation. Provides that for aids payable in 2009, city formula aid will be determined based on data used for calculating the 2008 LGA distribution.
Section 10. City aid distribution. Increases the maximum city aid from ten percent to 75 percent of net levy.
Section 11. 2009 aid adjustment. Provides that if the 2009 LGA appropriation is greater or less than $575 million, the aid increase to each city must be proportionally reduced from its increase calculated using the $575 million appropriation level.
Section 12. LGA appropriation. Increases the LGA appropriation for 2009 by $70 million.
Section 13. County program aid appropriation. Increases the appropriation for county program aid by $40 million. The increase is split evenly between need aid and tax base equalization aid.
Section 14. Township aid appropriation. Allocates $5 million for township aid.
Section 15. Inflation adjustment. Indexes the appropriations for county, city, and township aids based on the implicit price deflator for state and local government purchases. The minimum inflation adjustment is 2.5 percent and the maximum is 5 percent.
Section 16. State Parks located on Lake Vermilion; PILT distribution. Provides that PILT payments for state park land bordering Lake Vermilion must be distributed one-third to the township, one-third to the county, and one-third to the school district. The payments may be used for general government purposes.
Section 17. Use of LGA increase. Provides that if a city of the first class in the metropolitan area receives an increase in LGA over its 2008 distribution, the city may spend all or a portion of the increase on debt obligations related to public facilities or on neighborhood revitalization activities. This provision applies to calendar years 2010, 2011, and 2012.
Section 18. LGA study. Requires the Chairs of the Tax Committees to appoint members of a group to study the current system of aids to local government and recommend improvements.
Section 1. Referendum market value. Strikes the exemption for seasonal recreational residential property from the referendum market value tax base.
Section 2. Retired employee health benefits. Extends the date for school districts to levy for retiree health benefits by six years, for employees having left service before July 1, 1992 to July 1, 1998.
Section 3. Rate adjustment; property tax change. Requires the Public Utilities Commission to adjust regulated utility rates for any property tax changes due to the class rate changes made in this act for taxes payable in 2009 and subsequent years. The adjustments are to be made outside of a general rate case proceeding.
Sections 4, 8, and 24. Leased lands. Provides that land owned by government that is leased for noncommercial seasonal recreational purposes is exempt from property tax.
Section 5. Electric generation personal property. Extends the date by which construction must begin on a designated innovative energy project by two years, to January 1, 2012.
Section 6. Biomass electric generation facility. Extends the date by which construction must be started on a biomass electric generation facility by two years, to January 1, 2010.
Section 7. Hydroelectric generation facility. Extends the date by which construction must be started on a hydroelectric generation facility by two years, to January 1, 2011.
Section 9. Green acres; nursery stock. Provides that only the acreage used to grow nursery stock qualifies for green acres treatment as a nursery or greenhouse operation.
Section 10. Green acres requirements. Replaces the existing income requirements for Green Acres qualification. For agricultural real estate between ten and twenty acres, total agricultural production income must be at least five percent of the land value per acre assigned under section 13 and farm expenses on Schedule F must exceed 25 percent of the owner's federal adjusted gross income in at least one of the preceding three years. This section also provides that slough, wasteland and woodland are not entitled to Green Acres treatment unless it is used for agricultural production or it is impracticable for the assessor to separate the value from the value of the production acreage. This section also excludes land enrolled in CRP, RIM, or other conservation programs from Green Acres.
Section 11. Green Acres application. Requires that applicants for the Green Acres program must include a copy of Schedule F for farm income and Schedule E for farm rental income.
Section 12. Green Acres special assessments. Provides that watershed district assessments are not deferred under Green Acres.
Section 13. Agricultural value determination. Requires the Commissioner of Revenue to develop a fair and uniform method for determining an agricultural production value for each county in the state to account for the presence of nonagricultural influences on agricultural property values.
Section 14. Green Acres implementation. Requires all county assessors to implement the Green Acres program for assessment year 2009 unless the Commissioner of Revenue determines that a county is unable to comply, in which case the county must implement it as soon as it is feasible.
Sections 15 and 19. Aggregate resource preservation property tax law. Establishes an Aggregate Resource Preservation Property Tax Program. Property would qualify for valuation under this program if it is residential homestead, farm homestead, or agricultural land consisting of at least ten contiguous acres, if there are no delinquent taxes on the property. The owner is required to file an application with the county assessor and enter into a covenant on the land that restricts the use to the preparation and removal of aggregate deposits under the surface of the land. Property that is subject to this treatment would be valued as if it were agricultural property using a per acre valuation equal to the current assessment year's average per acre valuation of agricultural land in that county. The assessor must not consider any additional value resulting from potential alternative and future uses of the property. Any buildings on the land would be valued in the normal manner. The covenant could be canceled by the owner, or by the city or town in which the property is located, if the governing body changes the conditional use of the property, revokes the mining permit, or changes the zoning to disallow mining. Within two years after the effective date of this provision, a county may, after a public hearing, terminate application of this section within the county. Once a county has received the first application for enrollment under this section, the county has 60 days to notify that applicant and any subsequent applicants of the county's intent to begin the process of terminating application of this program in the county; then the county would be required to act on the termination within six months. If the county board does not act on the termination within six months of that notification, the program will be in effect. If property that had been subject to this section no longer qualifies because of an action by the owner, payment of additional taxes on that property is required. The additional tax will be determined by applying the current tax rates to the difference between the value of the property as classified under this program, and the amount that would have been its value had it not been subject to this treatment, and multiplying that amount by the number of years when the land was in the program. When active mining begins on any part of the property, the owner is required to notify the county. The areas that are actively being mined will then be valued under the normal processes for the next assessment year and removed from the Aggregate Resource Preservation Property Tax Program. The payback of the taxes are not imposed on the acres that are actively being mined, and have been removed from the program accordingly. Property that qualifies for this program will be assessed as class 2b property, which has a class rate of one percent of market value.
Section 16. Open Space. Adds real estate exclusively devoted to soccer to the list of property types qualifying for Open Space treatment.
Sections 17 and 23. Bovine tuberculosis management zones. Provides a property tax credit for agricultural property located in a bovine tuberculosis management zone. Property owners in the zone who have eradicated a cattle herd are eligible for the credit. The credit is equal to the property taxes payable on the land for the taxes payable year following eradication of the herd and will continue until a new cattle herd is placed on the land.
Section 18. Homestead borrowing. Provides that in the case of a property that includes both a homestead and nonhomestead area, the greater of the value of the homestead portion itself, or $76,000 will receive the homestead class rate. This reinstates pre-2001 treatment of these properties, which had been phased out under current law.
Sections 19. Agricultural classification and rural lands. Reduces the class rate on the first tier of agricultural homestead property value from 0.55 percent to 0.50 percent. Changes the minimum size requirement for agricultural parcels. Under current law, parcels of less than ten acres must be exclusively and intensively used for agricultural purposes in order to qualify. The new language requires that for parcels less than 20 acres, there must be at least ten contiguous acres tilled or pastured in three of the last five years; at least 75 percent of the acres must be used to store grain or equipment; the entire parcel is tilled or used for pasture; the parcel contains a licensed nursery; the parcel is used primarily for a livestock or poultry containment process; or the parcel is used for truck farming. Short rotation woody crops are included in the definition of agricultural products. This section also provides that unplatted rural land of at least ten acres which is not used for agricultural purposes will be class 2b with a class rate of one percent of market value.
Section 20. Utility property class rate. Increases the class rate on electric generation tools, implements, and machinery from 2.0 percent to 2.5 percent for taxes payable in 2009, and 2.8 percent for taxes payable in 2010 and thereafter. This section also increases the class rate on utility transmission and distribution systems from 2.0 percent to 2.15 percent for taxes payable in 2009 and 2.25 percent for taxes payable in 2010 and thereafter.
Section 21. Seasonal recreational property. Eliminates the separate property class for noncommercial seasonal recreational (cabin) property. Under this section, cabins would be treated as nonhomestead residential property. This section also includes property up to three acres located on a lake and operated as a restaurant within the commercial seasonal class. The property must either be devoted to commercial purposes for not more than 250 days per year or must receive 60 percent of its gross receipts during four consecutive months.
Sections 25 through 27. State general levy. Eliminates seasonal recreational property from the tax base for the state general levy. The amount of the levy for taxes payable in 2009 is set at the amount for payable 2008, plus the levy produced by applying the tax rate to electric generation and airport property that are subjected to the state general tax. The tax rate for the state general levy is frozen at the rate for taxes payable in 2009. Language that indexed the dollar amount of the state levy is stricken. Section 23 strikes the exemption for electric generation machinery from the state property tax base. Section 24 eliminates the division of the state levy into separate pools for commercial and seasonal property, since seasonal property is removed from the tax base.
Section 28. Failure to certify proposed levy. Provides that if a local government does not certify its proposed levy to the county auditor by the statutory due date, the auditor shall use the final levy certified for the previous year in calculating proposed property tax notices.
Section 29. Sanctions; exclusion of evidence. Modifies the provision that requires dismissal of petitions contesting the valuation of income-producing property if the petitioner does not produce certain information regarding the property. Five specified pieces of information must be produced. Current law requires production of information that includes those items, but could be more expansive. Specific details related to the rent rolls for the property are eliminated, and the requirement that proposed budgets would include anticipated income and expenses is eliminated. Under current law, failure to provide the information results in the dismissal of the petition, unless the failure to provide it was due to the unavailability of the evidence or the petitioner was not aware or informed of the requirement to provide the information. This is modified to provide that failure to provide the information will result in sanctions under Rule 37 of the Minnesota Rules of Civil Procedure, and states that it will be a defense to a motion for sanctions if the petitioner demonstrates that the required information was not available at the time of the required production or that the petitioner was not aware or informed specifically by the county assessor of the requirement to provide the information. Current law provides that an appraisal of the petitioner's property done by or for the county will not be admissible as evidence if the county assessor does not comply with this law. This section would modify that to provide that an appraisal done by either party will not be admissible if that party does not comply with this provision.
Section 30. Delinquent tax payments. Allows payment of a partial year of delinquent taxes to be paid in the inverse order that the taxes were accrued.
Section 31. Property tax refund applied to delinquency. Permits counties to allow property tax refund claimants to be eligible for the refund if the refund is sent as an electronic payment to the county to be applied to the claimant's delinquent taxes.
Section 32. Levy for first responder association. Authorizes county boards to levy taxes within an unorganized territory where first responder services are provided.
Section 33. Township subordinate service districts. Provides that when a town subordinate service district is removed, if all the outstanding obligations of the district have been paid, the town board may opt to refund any surplus tax revenue or service charges that were collected from the district. The refund is required to be distributed equally to the owners of property within the district that had been charged the extra tax or fee within the preceding tax year.
Sections 34 and 35. Metropolitan transit taxing district. Expands the metropolitan transit taxing district to include the entire seven-county metropolitan area.
Section 36. Airport authority levy. Clarifies that imposition of a property tax levy by an airport authority requires a two-thirds majority vote of the authority members. Strikes language allowing the governing body of the municipality to approve or modify the levy.
Section 37. Assessment of purely public charities. Prohibits assessors from changing the current practices or policies that they use in assessing property of institution of purely public charities. The assessors may not change the assessment of existing properties unless the change is made as the result of a change in ownership, occupancy or use of the facility, or for currently taxable properties, a change in the market value of the property. The Commissioner of Revenue is required to survey all county assessors on the tax status of property of institutions of purely public charity and report the findings to the chairs of the House and Senate tax committees by February 1, 2009. This provision will expire at the earlier of the enactment of legislation establishing criteria for the property taxation of purely public charities or adjournment of the 2009 legislative session.
Section 38. Comfort Lake-Forest Lake Watershed District. Provides that the Comfort Lake-Forest Lake Watershed District will be considered a watershed management organization under Minnesota Statutes, section 103B.205, subdivision 13. That law currently applies just to watershed districts that are wholly located within the metropolitan area, or joint powers entities established wholly or partly within the metropolitan area. The district will be authorized to manage or plan for the management of surface waters within the watershed district's boundary as it existed on April 1, 2008, in Chisago and Washington Counties through the authorities provided both in the chapter dealing with watershed districts and the chapter dealing with watershed management organizations. This would increase the districts' potential levy authority.
Section 39. Sanitary district debt service. Requires St. Louis County to pay up to one-half of the debt service on the Duluth-North Shore Sanitary District bonds, series 2002, if the revenues from the county mortgage and deed tax authorized under article 6, section 14, are insufficient.
Section 40. Study of agricultural values. Requires the Commissioner of Revenue to create a group consisting of assessors, agricultural economists, and staff of the Department of Agriculture to study the valuation of agricultural property in the state. The results must be presented to the Chairs of the House and Senate Tax Committees by January 15, 2009.
Section 41. Repealer. Repeals 272.027, subd. 3, an exemption for an electric generating facility adjacent to a taconite mine direct-reduction steel mill; 275.025, subd. 3, the definition of seasonal recreational tax capacity for the state general levy; 279.01, subd. 4, penalty provisions for seasonal recreational properties; and 473.4461, prohibiting the Metropolitan Council from levying taxes for transit purposes outside of the transit taxing district as it was defined on January 1, 2001.
Senior Citizens Property Tax Cap
Section 1. Maximum homestead property tax. Provides that the property taxes payable by a qualified taxpayer on a qualified homestead would be the lesser of the normally determined taxes or the amount of taxes payable in the base year increased by taxes attributable to increases in market value due to additions to the square footage of the dwelling or improvements that exceed 15 percent of the estimated market value of the homestead prior to making the improvement, or voter-approved levies exceeding the amount attributable to voter-approved levies in the base year.
Section 2. Definitions. Provides definitions used in this proposal. The "base year" refers to taxes payable in the year in which the taxpayer is qualified and has applied to the Commissioner of Revenue and has been initially approved for the application of this program for the following year. "Qualified homestead" means the dwelling occupied as the taxpayer's principle residence and up to one surrounding acre of land. The qualified homestead may be part of a multidwelling building in the land on which it is built.
Section 3. Participation requirements. Establishes the qualifications for participation in the program:
Section 4. Application. Provides the requirements for application for participation in the program. Applications must be made to the Commissioner of Revenue by June 1st for taxes payable in the following year. If the applicant's income exceeds $40,000 after the applicant has been approved for participation in the program, the applicant must notify the Commissioner of Revenue in writing. If the applicant's income subsequently falls below $40,000, the taxpayer may apply to resume participation in the program. The Commissioner of Revenue is authorized to assess penalties for failures to file excess income certifications or filing of false applications or certifications.
Section 5. Certification by Commissioner. Requires the Commissioner of Revenue to notify county auditors of the counties in which qualified property is located. The county auditor is required to determine the maximum tax that would apply to the properties that qualify under this program, and use that amount for the Truth in Taxation notices. If a taxing jurisdiction requests, the county auditor may estimate the total loss of revenue to the taxing jurisdiction under this program and adjust the tax rate accordingly. If the levy is not adjusted for the current tax year, a taxing jurisdiction may increase its levy in the following year by the amount of any revenue losses under this program certified by the county auditor. This levy adjustment would not be subject to any levy limitations.
Section 6. Termination. Provides that participation in the program terminates when the property is sold or transferred, all the qualifying homeowners have died, the homeowner notifies the commissioner that the homeowner no longer wishes to participate, or the property no longer qualifies as a homestead.
Section 1. Foreign Operating Corporations. Amends the definition of foreign operating corporation (FOC). Clarifies that an interest charge domestic international sales corporation is not a foreign operating corporation. Eliminates the current law requirement that the average of the corporation's percentage of property and payrolls assigned to location outside of the United States is 80 percent or more, and substitutes the requirement that to be an FOC at least 80 percent of a corporation's gross income from all sources in the tax year is active foreign business income.
Section 2. AmeriCorps Subtraction. Allows taxpayers to subtract from Minnesota taxable income the amount awarded for service in an approved AmeriCorps national service program.
Section 3. Corporations; additions to federal taxable income. Eliminates the present addition for the federal pollution control depreciation to federal taxable income to determine Minnesota net income. Provides for the following additions to federal taxable income for corporations:
Section 4. Corporations; modifications decreasing federal taxable income. Provides that the subtraction from federal taxable income for a corporation for 80 percent of royalties or similar income derived from a FOC is not applicable if the income resulting from the payments is income from sources within the United States, as defined under the Internal Revenue Code. Eliminates the subtraction for the federal pollution control depreciation to federal taxable to determine Minnesota net income.
Sections 5 and 6. Mutual funds. Determines the receipts for services attributed to shareholders based on a proportionate basis of shareholders residing in Minnesota. Residence is determined by the mailing address of policyholders.
Section 7. Transactions without economic substance. Specifies that when any person engages in a transaction or series of transactions without economic substance to create a loss or to reduce taxable income or to increase credits allowed in determining Minnesota tax, the transaction will be disregarded and the commissioner will determine the taxable net income without regard for that transaction. Allows a taxpayer to show by clear and convincing evidence that a transaction does have economic substance.
Section 8. Wages. Allows wages to be defined without regard to the federal "safe harbor" provisions under section 530 of Public Law 95-600.
Section 9. Purpose and Effect. Provides that intent of the changes to FOCs is not to be construed as supplanting any existing Minnesota law.
Section 10. Transition; Pollution Control Facilities. Permits taxpayers to deduct remaining added, but not subtracted, federal pollution control facilities depreciation in taxable year 2008.
Section 1. Exempt vehicles. Exempts emergency response vehicles from the motor vehicle registration tax.
Section 2. Emergency response vehicles. Exempts gasoline used in ambulances and other emergency response vehicles.
Section 3. Ambulance supplies, parts, and equipment. Extends the sales tax exemption for repair and replacement parts for ambulances to vehicles equipped and specifically intended for emergency response.
Section 4. Sales of certain good and services to government. Exempts purchases by the Metropolitan Council or the Department of Transportation of vehicles and repair parts to equip the Northstar Corridor Rail Project. The tax must be imposed and refunded, beginning in fiscal year 2009. Also exempts propane-fueled motor vehicles leased by school districts that are used solely for transporting students.
Section 5. Construction materials; Central Corridor light rail project. Exempts materials and equipment used in the construction of the Central Corridor light rail transit line and associated facilities. The tax must be imposed and collected and then refunded after July 1, 2009. Effective for sales and purchases made after June 30, 2008.
Section 6. Construction materials; Northstar Corridor rail project. Exempts materials and equipment used in the construction of the Northstar rail project and associated facilities. The tax must be imposed and collected and then refunded. Effective retroactively for sales and purchases made after January 1, 2007.
Section 7. Refunds. Provides for the refunds for exemptions for commuter rail vehicle and repair parts and commuter and light rail construction. Limit the total refunds for exemptions on commuter rail vehicles and repair parts and Northstar Corridor construction to $3,100,000 in fiscal year 2009.
Section 8. Propane-fueled vehicles. Exempts from the motor vehicle sales tax the purchases of propane-fueled vehicles by school districts that are used solely for transporting students.
Sections 9 and 10. Mankato local option sales tax. Eliminates the use of the existing local option sales tax for operating facilities at the Riverfront 2000 project. Extends the use of the local option sales tax to pay the expenses for constructing the performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center. Extends the current tax ten years until 2025.
Section 11. Two Harbors local option sales tax. Allows the city of Two Harbors to use revenues from its existing local option sales tax for the purpose of water system improvements.
Sections 12, 13, and 14. Proctor local option sales tax. Extends the use of Proctor's current local option sales and use tax to include paying for the following capital improvement projects: public utilities, including water, sanitary sewer, storm sewer, and electric; sidewalks; bikeways and trails; and parks and recreation. Additional bonding not to exceed $7,200,000, is authorized to pay for the additional projects
Section 15. Clearwater local option sales tax. Authorizes the city of Clearwater, pursuant to voter approval obtained at the November 7, 2006, election, to impose a sales and use tax of to one-half of one percent and a $20 motor vehicle excise tax for the purpose of paying for the costs of acquisition, construction, improvement, and development of regional parks and trails, a pedestrian bridge, and land and buildings for a community center. Bonding not to exceed $15,000,000 is authorized to pay for the projects. The tax will terminate at the earlier of 20 years or when the city council determines that sufficient revenues have been raised to finance the authorized projects.
Section 16. Cloquet local option sales tax. Authorizes the city of Cloquet, with voter approval, to impose a sales and use tax of up to one-half of one percent and a $20 motor vehicle excise tax for the purpose of paying for the following: construction and completion of park improvement projects; St. Louis Riverfront improvement projects; Veteran's Park construction and improvements; construction of a community center; improvements to recreation parks and complexes; and development of pedestrian trails. Bonding not to exceed $7,500,000 is authorized to pay for the projects. The tax will terminate at the earlier of 30 years or when the city council determines that sufficient revenues have been raised to finance the authorized projects.
Section 17. Cook County local option sales tax. Authorizes Cook County, with voter approval, to impose a sales and use tax of up to one percent to pay for the following capital improvements: (1) construction and improvement to a county community center and recreation area; (2) construction and improvement to the Grand Marais pool; and (3) construction and improvement to the Grand Marais Public Library. Bonding not to exceed $14,000,000 is authorized to pay for the specified projects. The tax will terminate at the later of 20 years or when the city council determines that sufficient revenues have been raised to finance the authorized projects.
Section 18. Ely local option sales tax. Authorizes the city of Ely, with voter approval, to impose a sales and use tax of up to one percent and a motor vehicle excise tax of $20 to pay for the following projects: (1) establishment of an entry to the Boundary Waters that includes the chamber of commerce, visitor center, and related facilities; (2) construction of a pool facility that would support Independent School District No. 696 and Ely Bloomenson Community Hospital; (3) infrastructure improvements related to the expansion of the Ely Bloomenson Community Hospital; and (4) community center use transition to establish the Boundary Waters Historical Center and provide for compliance with the Americans with Disabilities Act. Bonding not to exceed $15,000,000 is authorized to pay for the projects. The tax will terminate when the city council determines that sufficient revenues have been raised to pay for the authorized projects, plus the costs of bonds.
Section 19. Mankato Food beverage and entertainment taxes. Authorizes the city of Mankato, by ordinance, to impose a food and beverage tax and entertainment tax at the rate of up to one percent. Proceeds from the taxes must be used by the city to pay all or a portion of the expenses of operation and maintenance of the Riverfront 2000 and related facilities, including a performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by Minnesota State University, Mankato.
Section 20. Minnetonka Water Treatment Facility. Retroactively exempts capital equipment used in or incorporated into the construction of a water treatment facility owned by the city of Minnetonka regardless of whether purchased by the owner, contractor, subcontractor, or builder.
Section 21. North Mankato local option sales tax. Authorizes the city of North Mankato, pursuant to voter approval obtained at the November 7, 2006, election to impose a sales and use tax of up to one-half of one percent to pay for the capital costs of the following projects: (1) the local share of the Trunk Highway 14/ County State Aid Highway 41 interchange; (2) development of regional parks and hiking and biking trails; (3) expansion of the North Mankato Taylor Library; (4) riverfront development; and (5) lake improvement projects. Bonding not to exceed $6,000,000 is authorized to pay for the projects. The tax will terminate when the revenues raised meets or exceeds $6,000,000, plus the costs of the bonds.
Section 22. Winona local options sales tax. Authorizes the city of Winona, with voter approval, to impose a sales tax of up to one-half of one percent to pay for the city-borne costs of construction of a street connection from Winona to Minnesota State Highways 61 and 43. Bonding not to exceed $8,000,000 is authorized to pay for the project. The tax will terminate at the earlier of five years or when the city council determines that sufficient revenues have been raised to pay for the project, plus the costs of bonds.
Section 23. Repealer. Repeals a provision allowing the city of Mankato to annually use up to $1,500,000 of the revenues collected from the sales and use tax for operation, maintenance, and improvements to the Riverfront 2000 facilities.
Increases the percentage of the June tax collections that must be collected early from 80 to 90 per cent. This affects vendors or distributors with annual tax liability exceeding $120,000.
Section 1. Sales and use tax. Increases the percent of June sales and use tax receipts that must be paid early from 80 to 90 percent effective beginning with June 2009 tax liabilities.
Section 2. Penalty for underpayment. Adjusts the provision for estimating the amount of June receipts that must be remitted in June to reflect the percent increase in section 1.
Section 3. Tobacco excise taxes. Increases the rate of June cigarette excise taxes that must be submitted early from 80 to 90 percent effective with June 2009 tax liabilities.
Section 4. Alcohol excise taxes. Increases the rate of June alcohol excise taxes that must be submitted early from 80 to 90 percent effective with June 2009 tax liabilities.
Section 1. Surplus Lines Insurance; Definition. Adds the definition of stamping to the definitions applicable to surplus lines insurance.
Section 2. Surplus Lines Association of Minnesota. Provides for the creation of a nonprofit association responsible for the stamping of and fee collection for surplus insurance policies.
Section 3. Licensee's duty to submit documents. Requires surplus lines licensees to submit insurance policies to the Surplus Lines Association of Minnesota for stamping. Provides that it is unlawful for insurance documents to be delivered in Minnesota with stamping. Effective January 1, 2009, and applies to polices written or renewed after December 31, 2008.
Sections 4, 5, and 6. Petroleum tax. Extends the definition of receiving petroleum products to petroleum imported on rail cars.
Sections 7, 8 and 9. Ramsey County deed and mortgage tax. Extends the authorization for Ramsey County to impose a deed and mortgage tax until 2013. Strikes an authorization for the county board to administer the fund acting as the county rail authority. Also strikes language authorizing the use of the funds for improvements to property for economic development, recreation, housing, transportation or rail traffic.
Sections 10, 11, and 12. Hennepin County deed and mortgage tax. Extends the authorization for Hennepin County to impose a deed and mortgage tax until 2013. Strikes an authorization for the county board to administer the fund acting as the county rail authority. Also strikes language authorizing the use of the funds for improvements to property for economic development, recreation, housing, transportation or rail traffic.
Sections 13 and 14. St. Louis County deed and mortgage tax. Authorizes St. Louis County to impose a mortgage registry and deed tax of .0001 of the principal in the case of the mortgage registry tax, and .0001 of the deed amount in the case of the deed tax. Revenues must be deposited in the county's Environmental Response Fund which must be for the following purposes: first, for payment of one-half the annual debt service on the bonds issued by the Duluth-North Shore Sanitary District, series 2002, to pay the cost of constructing the sanitary sewer collection system, until those obligations have been paid, or $4,500,00 has been provided for this purpose; and then the following purposes: acquisition of property that is polluted or contaminated with hazardous substances; paying the costs connected with indemnifying or holding harmless the entity that takes title to land or property from any liability arising out of the ownership, remediation, or the use of the property; paying for the costs of remediating the acquired property or other properties that are polluted or contaminated with hazardous substances; or paying the costs associated with remediating lands or property which are polluted or contaminated with hazardous substances. The taxing authority expires January 1, 2013.
Sections 15 and 16. Dakota County deed and mortgage tax. Authorizes Dakota County to impose a mortgage registry and deed tax of .0001 of the principal in the case of the mortgage registry tax, and .0001 of the deed amount in the case of the deed tax. Revenues must be deposited in the county's Environmental Response Fund which must be for the following purposes: (1) acquisition of property that is polluted or contaminated with hazardous substances; (2) paying the costs connected with indemnifying or holding harmless the entity that takes title to land or property from any liability arising out of the ownership, remediation, or the use of the property; (3) paying for the costs of remediating the acquired property or other properties that are polluted or contaminated with hazardous substances; or (4) paying the costs associated with remediating lands or property which are polluted or contaminated with hazardous substances. The taxing authority expires January 1, 2013.
Sections 17 and 18. Anoka County deed and mortgage tax. Authorizes Anoka County to impose a mortgage registry and deed tax of .0001 of the principal in the case of the mortgage registry tax, and .0001 of the deed amount in the case of the deed tax. Revenues must be deposited in the county's Environmental Response Fund which must be for the following purposes: (1) acquisition of property that is polluted or contaminated with hazardous substances; (2) paying the costs connected with indemnifying or holding harmless the entity that takes title to land or property from any liability arising out of the ownership, remediation, or the use of the property; (3) paying for the costs of remediating the acquired property or other properties that are polluted or contaminated with hazardous substances; or (4) paying the costs associated with remediating lands or property which are polluted or contaminated with hazardous substances. The taxing authority expires January 1, 2013.
Section 1 authorizes the IRRRB to sell forest lands that were purchased under the new Forest Trust Authorization if the board finds that the sale advances the purpose of the trust.
Section 2 eliminates the 14.7 cents per ton matching threshold for the investment tax credit paid out of the Taconite Economic Development Fund to be consistent with the reduction in the distributions from that fund contained in section 5.
Section 3 provides that the phase-in of the production tax on direct reduced ore production applies only to facilities that are using ore mined in this state.
Section 4 includes a reference to the offset for education aids that would not apply to the new distribution of 4 cents per ton to school districts that was included in Laws 2008, chapter 154, the recently enacted tax bill.
Section 5 phases out the distributions of production tax proceeds to the Taconite Economic Development Fund. These are currently made at a rate of 30.1 cents per ton, and will be reduced to 20 cents per ton for distributions in 2008, and ten cents per ton for distributions in 2009, with no distributions in 2010 or later years.
Section 6 increases the distribution of production tax proceeds to the Iron Range Higher Education Account from 2 to 5 cents per ton.
Section 7 requires a distribution in 2008 of $90,000 from the Grant and Loan Fund to Independent School District No. 2142, St. Louis County, for a facilities study.
Section 8 amends the definition of "importer" for the aggregate tax to refer to a person who buys aggregate material that was excavated from another county.
Section 9 modifies the imposition of the aggregate production tax and increases the rate from ten cents to 21.5 cents per cubic yards, or seven cents to 15 cents per ton of aggregate material. The provision also clarifies when the tax is imposed. It further provides that a municipality that receives aggregate tax proceeds may not impose any additional host community fees on that process.
Section 10 modifies the penalty provision for removal of aggregate if tax previously due was not paid. Under current law, it is a misdemeanor for an operator to remove aggregate material unless taxes due for the previous reporting period have been paid. This provision would modify that penalty so that it would apply if the taxes for all previous reporting periods have not been paid.
Section 11 corrects an effective date that applied to a provision in Laws 2008, chapter 154, dealing with a distribution of production tax proceeds in 2007.
Section 1. Seed Capital Investment Credit. Establishes the requirements for the commissioner of employment and economic development to certify qualified businesses for seed capital investment credits. The businesses must operate primarily in border cities.
Sections 2 to 4 modify the business subsidy law by increasing the threshold of business subsidies subject to these provisions from $25,000 to $200,000, except that the requirements related to grantors' development of criteria for grant recipients continue to apply to business subsidies of $25,000 or more.
Section 5. Seed capital investment credit. Allows a credit against the tax due under this chapter for individuals, estates, or trusts equal to 45 percent of the amount invested in a qualified business. The amount of investment must be expended by the qualified business for plant, equipment, research and development, marketing and sales activity, or working capital for the qualified business. A taxpayer who owns a controlling interests in the qualified business or who receives more than 50 percent of the taxpayer's gross annual income from the qualified business is not entitled to a credit. The commissioner may disallow a credit for failure to satisfy the conditions under this subdivision or section 116J.8732. If the amount exceeds the amount of the certification or the taxpayer's liability, the amount of the excess is a credit carryover for four succeeding taxable years. Credits will be funded only with allocations from border city enterprise zones. Requires that credits must be allotted in chronological order if investments in qualified businesses exceed the limits on credits for investments.
Section 6 provides a historic rehabilitation credit equal to 25 percent of any such federal credit for the rehabilitation of eligible buildings in a renaissance zone, which is the area of the campus of the former state regional treatment center in the city of Fergus Falls.
Section 7 removes a maximum of $1.25 million in annual debt service on outstanding bonds that may be issued by Anoka County for library funding. The alternative limit of .01 percent of the taxable market value of the county remains in effect.
Section 8 provides that no additional qualified businesses will be eligible for JOBZ benefits if they have not entered into a business subsidy agreement with the local government unit prior to May 1, 2008.
Section 9 authorizes the Metropolitan Council to issue obligations in a principal amount up to $33,600,000 for capital expenditures.
Section 10 provides that the amount of the fiscal disparities levy generated by the property included in Phase II of the Mall of America project, will be distributed to the city of Bloomington rather than throughout the metropolitan area. This would occur only if the city imposes an additional lodging tax to pay for the Phase II parking facility.
Section 11 authorizes the city of Minneapolis and the city of Crystal to use revenues from tax increments from their housing replacement districts for activities related to parcels that were not included in the housing replacement plan for the district, but that would have qualified for inclusion in those districts by being vacant or substandard.
Section 12 modifies a restriction that applies to a tax increment financing district in the city of Hopkins that had an extended duration. Under this provision, the city would be authorized to use up to 20 percent of the increments from that district to pay the cost of housing activities.
Section 13 expands from six to eight acres the contiguous area within the city of Minneapolis that may be included within the boundaries of a homeless assistance tax increment district.
Section 14 modifies a recently enacted tax increment financing provision that applies to the city of Fridley. This provision would authorize the city to create one or more redevelopment tax increment financing districts in a defined area, and to use the increments for projects to construct a tunnel under railroad tracks to allow access to the Northstar Commuter Rail. The current law restrictions on pooling of increments are made inapplicable, but the increments must be expended within a specified area. The authority to approve this tax increment financing plan, or to establish the districts under this section, expires at the end of 2017.
Section 15 modifies a recently enacted tax increment financing provision to authorize the city of New Brighton to pool tax increments from two additional tax increment financing districts, and use the increments to pay eligible expenses within the area of the Northwest Quadrant project. This provision also authorizes the city to extend the duration of four existing tax increment financing districts, each for an additional four years.
Section 16 provides that the five-year rule in the tax increment financing law would be extended to ten years with respect to a tax increment financing district in the city of Austin. This would enable the city to use tax increments to reimburse the city's Housing and Redevelopment Authority for money it spent disposing of soils in the tax increment financing district as required by the Pollution Control Agency.
Section 17 authorizes the city of Bloomington and the Bloomington Port Authority to remove certain specified parcels from Tax Increment Financing District No. 1-C and place them in the boundaries of Tax Increment District No. 1-G. The increments from District No. 1-G are required to be used for infrastructure costs. The bill specifies that the public hearing conducted by the governing body to exercise the authority to modify the districts must be conducted after notice for the meeting beginning between 6:00 - 7:00 p.m. on a week night.
An agreement between the city of Bloomington and its Port Authority and the developers of Mall of America Phase II must include the following elements:
Section 18 provides a series of local taxing options to the city of Bloomington. The proceeds of all these taxes must be used to provide financing for a parking facility for Phase II of the Mall of America project. If a governmental entity other than the city of Bloomington issues the bonds, the city may transfer the funds available under this provision to the issuing entity. The new taxes include:
Section 19 permits the Dakota County Community Development Authority to designate additional property to be acquired by the authority for a tax increment financing project without meeting the general law procedures that apply to approval of an original tax increment financing plan, if the property consists of one or more parcels under common ownership and is acquired from a willing seller for the purpose of development as a housing project. This exception would apply if the acquisition is approved by the governing body of the authority after holding a public hearing upon published notice.
Section 20 provides that the limitation on the amount of abatements that may be granted by a local government would be increased for the city of Dayton and Hassan township to ten percent of the net tax capacity of the city or the town, respectively.
Section 21 provides that for two tax increment financing districts in the city of Duluth, the requirement that activities must be undertaken within a five-year period from the date of certification of the district would be extended to ten years.
Section 22 authorizes the city of Oakdale to create two redevelopment tax increment districts in specified areas that would have a duration limit of 35 years, rather than the 25 period that is provided under general law.
Section 23 allows the city of Wells to use revenues derived from rents paid by private tenants for use of a building acquired with tax increments, or proceeds from the sale of that building, rather than having these amounts treated as excess increments and redistributed to other taxing districts after the termination of the district.
Section 1. Corporate Franchise Tax Fractional Year Returns. Amends Minn. Stat. § 289A.18, subd. 1, to clarify the due date for filing a fractional year return applies both to corporations and unitary groups of corporations. Effective the day following final enactment.
Sections 1, 4, and 5. References to Combined Income Reporting. Amends Minn. Stat. §§ 289A.18, 290.07, and 290.21, correcting the references to the section of Minnesota Statutes that generally require combined income reporting, and an uncodified section requiring that correction of the citation in Minnesota Rules, part 8019.0405. Presently there are references in Minn. Stat. ch.'s 289A and 290 that cite Minn. Stat. § 290.34 as the section of the statute that generally requires combined income reporting; Minn. Stat. § 290.017, subd. 4, is the correct citation. Sections 1, 4, and 5 are effective for taxable years after December 31, 2007.
Section 2. Foreign Operating Corporations. Amends Minn. Stat. § 290.01, subd. 6b, to clarify that a corporation is required to have a minimum amount of payroll and property to qualify as a foreign operating corporation, not an exact amount of payroll and property. Effective the day following final enactment.
Section 3. Credit for Increasing Research Activities. Amends Minn. Stat. § 290.068, subd. 3, to define the taxes against which the increasing research credit applies as the regular corporate franchise tax. This move closely conforms to federal application of the credit upon which the Minnesota credit is based. Effective for taxable years beginning after December 31, 2007.
Section 6. Application of Back-up Withholding on Non Wage Compensation for Personal Services. Amends Minn. Stat. § 290.92, subd. 26, to provide that a payor is required to withhold Minnesota income taxes for an individual independent contractor provider of personal services if the payment is subject to federal back-up withholding. Currently, a payor of compensation to an independent contractor provider of personal services is subject to Minnesota back-up withholding only if either the provider does not give the payor a Social Security number or the payor is notified by the Department of Revenue that the provided Social Security number is not the payee's correct number. Effective for payments made after December 31, 2008.
Section 7. Repeal of Obsolete or Redundant Rules. Repeals Minnesota Rule 8031.0100, subpart 3, that dealt with how a partner uses the gross income of the partnership in its Minnesota income tax computations. The rule refers to two, long since repealed Minnesota concepts: "income averaging" and farm loss modification. The remainder of the rule merely restates what is clearly stated in Minn. Stat. § 289A.08, subd. 1 (filing requirements for individuals) and § 290.01, subd. 20 (definition of gross income). This section also repeals Minnesota Rule 8093.2100, that dealt with corporate declarations of estimated tax which are no longer required under current Minnesota Law. Effective the day following final enactment.
Sections 1, 2 and 8. Relief for Purchasers. Amends Minn. Stat. §§ 289A.55, 289A.60, and § 297A.995, by adding subdivisions that provide a purchaser shall be relieved from the additional liability for tax, penalty and interest when the purchaser relied on erroneous data provided by the department of revenue regarding tax rates, boundaries, taxing jurisdiction assignments and the taxability matrix. Effective for sales and purchases made after December 31, 2008. [Streamlined Sales Tax]
Sections 3, 10 and 11. Internal Revenue Code References. Amends Minn. Stat. § 297A.61, subd. 22, to provide that any references to the Internal Revenue Code in chapter 297A, the Minnesota Sales Tax law, shall mean the Code as amended through December 31, 2007. Amends Minn. Stat. §§ 297B.01, subd. 7, and 297B.03, to provide that for the sales tax on motor vehicles the references to the Internal Revenue Code are updated to reflect the Code as amended through December 31, 2007. Effective the day following final enactment.
Section 4. Definition of State. Amends Minn. Stat. § 297A.61, subd. 29, to provide that for sales and use tax purposes the term "state" shall include the Commonwealth of Puerto Rico. Currently, the term only includes the 50 states and the District of Columbia. Effective the day following final enactment. [Streamlined Sales Tax]
Section 5. Certified Service Provider and Seller Liability Relief and Exemption Certificates. Amends Minn. Stat. § 297A.665, to relieve a certified service provider of liability under this section to the extent a seller who is its client is relieved of liability. Effective retroactively for sales and purchases made after December 31, 2007. [Streamlined Sales Tax]
Section 6. Durable Medical Equipment Repair and Replacement Parts. Amends Minn. Stat. § 297A.67, subd. 7, to provide that the exemption for durable medical equipment repair and replacement parts includes all components or attachments used in conjunction with the equipment but does not apply to repair and replacement parts for single patient use only. This section also clarifies that the exemption for medical devices applies only if for human use. Effective the day following final enactment. [Streamlined Sales Tax]
Section 7. Certified Service Provider and Seller Liability Relief. Amends Minn. Stat.
§ 297A.995, subd. 10, to relieve sellers and certified service providers from liability to the state for having charged and collected the incorrect amount of sales or use tax resulting from the seller or certified service provider relying on the certification by the state as to the accuracy of a certified automated system as to the taxability of product categories; gives sellers and certified service providers ten days to revise a classification after receipt of notice from the state that an item or transaction within a product category is incorrectly classified as to its taxability. Effective retroactively for sales and purchases made after December 31, 2007. [Streamlined Sales Tax]
Section 9. Database Files. Amends Minn. Stat. § 297A.995, by adding a subdivision that provides that the database files and taxability matrix referred to in § 297A.995 are those required under the Streamlined Sales Tax. Effective retroactively for sales and purchases made after December 31, 2007.
Section 1. Electronic Waste Recycling. Amends Minn. Stat. § 115A.1314, subd. 2, to clarify what is meant by various references to the term "commissioner" and to specify dates by which certain statutorily required actions must occur. Effective the day following final enactment.
Section 2. Personal Liability for Health Impact Fee. Amends Minn. Stat. § 270C.56, subd. 1, to provide personal liability for the health impact fee. Effective for fees due after June 30, 2008.
Sections 3, 4, 5, 8, 11, 12, 14 and 15. Updates of IRC References. Outdated references to the Internal Revenue Code in the deed, MinnesotaCare, petroleum, cigarette and tobacco products, liquor, and solid waste management taxes are updated. Amendments are made to Minn. Stat. §§ 287.20; 295.53, subd. 4a; 296A.16, subd. 2; 297F.01, subd. 8; 297G.01, subd. 9; and 297H.09 to update outdated references to the Internal Revenue Code. Effective the day following final enactment.
Section 6. Health Care Provider Definition. Amends Minn. Stat. § 295.50, subd. 4(b) (1), to clarify that wholesale drug distributors are excluded from the definition of a health care provider. Under current law, it is clear that a health care provider does not include hospitals or surgical centers. Similar to hospitals and surgical centers, wholesale drug distributors are subject to a MinnesotaCare tax that is imposed specifically on these entities. Effective the day following final enactment.
Subdivision 4(b) also adds a new provision that excludes from tax health care providers who receive all their payments from other entities that are subject to tax on their receipts for patient services and health care providers that receive all their payments from other exempt sources. Under current law while these entities have no taxable receipts, they are required to file a return. Effective for payments received after June 30, 2008.
Section 7. Use Tax. Amends Minn. Stat. § 295.52, subd. 4, to clarify that when a person receives legend drugs for resale or use in Minnesota, the tax is imposed on the price paid for the drugs. Effective for drugs purchased after final enactment.
Section 9. Exemption from Gasoline Tax. Amends Minn. Stat. § 296A.07, subd. 4, to clarify the exempt status of ethanol when it is transferred between terminals. Effective the day following final enactment.
Section 10. Exemption from Special Fuel Tax. Amends Minn. Stat. § 296A.08, subd. 3 to clarify the exempt status of biodiesel fuel when it is transferred between terminals. Effective the day following final enactment.
Section 13. Contraband. Amends Minn. Stat. § 297F.21, subd. 1 to clarify those cigarettes not in compliance with the recently enacted fire retardant standards and packaging requirements set forth in section 299F.850 et seq. are to be deemed contraband. Property added by the amendment is contraband effective December 1, 2008.
Section 16. Health Care Service Plan Corporations. Amends Minn. Stat. § 297I.05, subd. 12 to repeal a conflicting reference to the insurance premiums tax to be imposed on nonprofit health care service plan corporations. Effective the day following final enactment.
Sections 1, 2, and 31. Obsolete References. Amends Minn. Stat. §§ 13.51, subd. 3; 13.585, subd. 5; and, 469.040, subd. 4, to update references from Minn. Stat. § 273.126 to § 273.128. § 273.126 contained the property qualification requirements in effect for the class 4d, low-income rental housing property tax classification that existed for taxes payable in 1999 through 2004. The new class 4d property qualification requirements contained in section 273.128 were enacted in 2005 for taxes payable in 2006 and thereafter. (Class 4d did not exist for taxes payable in 2005.) Effective for data collected or maintained by political subdivisions beginning the day following final enactment, except that the change to § 469.040, is effective retroactively for taxes payable in 2006 and thereafter to preserve existing exemptions.
Sections 3-7, 9-13, 22, 25, and 27. References to the Internal Revenue Code and the United States Housing Act. Adds a subdivision to Minn. Stat. § 272.03 and a new section to chapter 273 to define "Internal Revenue Code" as the Internal Revenue Code of 1986 as amended through December 31, 2007. Amends Minn. Stat. § 272.03, subd. 3, to refer to the new subdivision added to § 272.03. Amends Minn. Stats. §§ 272.02, subds. 13, 20, 21, 27, 31, 38 and 49; 273.11 subd. 8; 273.124, subd. 6; 273.128. subd. 1; and 273.13 subd. 25, to amend references in chapters 272 and 273 to refer to the "Internal Revenue Code" instead of a variety references to outdated versions of the Internal Revenue Code. Also amends references to Section 8 of the United States Housing Act of 1937 in §§ 273.124, subd. 6 and 273.128, subd. 1, and references to the National Housing Act or Minnesota Housing Finance Agency Law in § 272.02, subd. 20, to refer to the current version. These sections are effective the day following final enactment.
Section 8. Exemption Status Determination Date. Amends Minn. Stat. § 272.02, subd. 38, to provide that manufactured homes, park trailers, travel trailers and related improvements, subject to the property tax as personal property are taxable or exempt as of January 2 in the assessment year, rather than July 1, because their taxes must be computed by May 30. Effective the day following final enactment.
Sections 14-21, 29, 31 to 33, and 34. Abatements and Credits for Damaged Properties. Enacts the new § 273.1231, subd. 8; and amends Minn. Stat. § 273.1231, subd. 7, § 273.1232, subd. 1, § 273.1233, subd.1, § 273.1233, subd. 3, § 273.1234, subds. 1 & 2, § 273.1235, subd. 1, and § 273.1235, subd. 3, to make several clarifications and corrections to the laws governing property tax abatements and credits for structures severely damaged or destroyed in a disaster or by arson or vandalism. A definition of utility property is provided for these purposes as property that the commissioner of revenue appraises for property tax purposes, and that definition is used twice. The authority of the county or commissioner to grant credits in the case of non homestead properties and homestead properties outside the disaster area is clarified, as is the authority for local units of government to make a property tax levy in the following year to recoup their unreimbursed costs for the abatements and credits. Also amends § 276.04, subd. 2, § 469.174, subd. 10b, and § 469.177, subd. 1c, to update cross-references to the disaster provisions. Effective the day following final enactment.
Section 23. Homestead Applications. Amends Minn. Stat. § 273.124, subd. 13, to clarify that a federal Schedule F submitted to support a claim for an agricultural homestead classification is protected private data. Effective the day following final enactment.
Section 24. Homesteads for Trust Held Property. Amends Minn. Stat. § 273.124, subd. 21, to allow homestead treatment for property held by a trust that is rented to an authorized farming entity and actively farmed by a member of that entity. This section is effective the day following final enactment.
Section 26. Class 1b for Joint Tenancy. Amends Minn. Stat. § 273.13, subd. 22, to modify the 1b classification to give the same benefits to property held in joint tenancy by disabled people as property owned by blind people. Currently the benefit is available to a blind person or the blind person and their spouse. The new language would make the benefit also available to the disabled person and their spouse (including disabled veterans) instead of just the disabled person. Provides that a homestead occupied by a permanently disabled veteran that receives a valuation exemption does not qualify for class 1b treatment on any remaining taxable value. This provision is effective for taxes payable in 2009 and thereafter.
Section 28. Local Board of Assessor Duties. Amends Minn. Stat. § 274.014, subd. 3, to add a new paragraph to clarify that a local board whose duties are transferred to the county may continue to employ a local assessor and is not deemed to have transferred its powers to make assessments. This section is effective the day following final enactment.
Section 30. Data Classification. Amends Minn. Stat. § 290B.04, subd. 1, to classify the income information on individuals collected and maintained by the commissioner of revenue to determine eligibility for the senior citizen property tax deferral program as private data according to the definition in Minn. Stat. § 13.02, subd. 12. Effective for data either collected or maintained by the commissioner of revenue beginning the day following final enactment.
Sections 34. City Aid Appropriation Reductions. Repeals Minnesota Statutes, section 477A.014, subds. 4 and 5, to eliminate statutory reductions to the city aid appropriation in chapter 477A equal to: (i) one-half the costs incurred by the state demographer in preparing the population estimates and other materials required by § 4A.02; (ii) the costs to the office of the state auditor for best practices reviews, services provided by the Government Information Division, those parts of the constitutional office related to the government information function, and mandated JOBZ program audit services, not to exceed $ 614,000 annually; (iii) the department of administration costs for the local government records program and intergovernmental information systems activity, not to exceed $205,800 annually; and, (iv) the costs of the local government pay equity function under § 471.9981, not to exceed $55,000 annually. Effective for aid payable in 2009 and thereafter.
Section 1. JOBZ Clawback Provisions That Apply To Businesses That Are No Longer Operating in a Job Opportunity Building Zone. This section makes numerous changes to the JOBZ claw back provisions:
Subdivision 1 is amended so that these claw back provisions will no longer apply to businesses that continue to operate in the zone, but in violation of their business subsidy agreement.
Subdivision 1a and 2 make clear that taxpayers who claim JOBZ benefits without having to sign a business subsidy agreement are subject to these clawback provisions if the operating business to which the benefits relate has ceased operating in the zone. This applies to property owners who claim individual income tax rental exemptions or sales tax exemptions attributable to property used in a zone by a qualified business. It also applies to owners of property who claim property tax exemptions attributable to property located in a zone and rented to a qualified business.
Subdivision 3 makes clear that repayment of any local option sales tax is made to the Commissioner of Revenue, who then distributes the tax to the appropriate local government unit.
Subdivision 4 makes numerous changes to the repayment procedures.
The changes in paragraphs (a), (b), and (d) are needed to make clear that the repayment provisions apply to businesses that claim JOBZ benefits without having to sign a business subsidy agreement.
The changes in paragraph (c) require the county auditor to send a bill to the taxpayer of record and allow the taxpayer of record to appeal the valuation of the property. Under current law the taxpayer of record has no clearly defined rights. These changes are effective the day following final enactment.
The change in paragraph (e) clarifies that the county treasurer is required to add any unpaid property taxes to the statement of property taxes payable for the year following the year in which the bill was sent.
The changes in paragraph (f) clarify the two year period for which repayment of state taxes is required. For sales and use tax, the repayment applies to all purchases that occur during the two year period beginning on the date that the business ceased operating in the zone. For income and corporate taxes, the repayment applies to the two most recent tax years that have ended prior to the date that the business ceased operating in the zone. For property taxes, the repayment applies to taxes payable in the year that the business ceased operating in the zone and the taxes payable in the prior year. These changes are effective January 1, 2008 and apply to businesses that cease operating in the zone in 2008 and thereafter.
The changes in paragraph (g) clarify that the commissioner has at least two years and the county auditor has three years to assess taxpayers for the repayment of JOBZ benefits.
Paragraph (h) clarifies that a business that ceases operating in the zone is not entitled to any future JOBZ benefits.
Subdivision 5 is amended to include waiver of claw back provisions for businesses that receive benefits without operating in a zone. If the business is related to the operating business, waiver is required if waiver was granted to the operating business. If the business is not related to the business, then waiver is required unless the business was a contributing factor in the business being unable to operate in the zone.
Section 1 is effective the day following final enactment, except where noted above. It applies to all violations, regardless of when they occur, except for clawback situations that have been resolved before the effective date.
Section 2. Businesses Operating in the Zone in Violation of Their Agreements. Section 2 creates a new provision that deals with JOBZ businesses that continue to operate in the zone, but do so in violation of the terms of their business subsidy agreement. These businesses are not subject to the JOBZ repayment provisions unless they close their zone operations prior to the end of the zone duration. However, they are no longer eligible for JOBZ tax benefits from the day that they are in violation of the business subsidy agreement.
These businesses can become eligible for future JOBZ benefits by signing a new or amended business subsidy agreement. Before doing so, they must request that the Commissioner of DEED modify the zone duration for their property based on a proportionate level of performance under the original business subsidy agreement, but not less than one year. Once adjusted, the zone duration cannot be readjusted.
A business that violates the second business subsidy agreement cannot use this section again, and is permanently barred from future JOBZ benefits. It is also subject to clawback of two years of benefits. Effective the day following final enactment and applies to all violations of business subsidy agreements except those resolved before the effective date.
Section 3. Prohibition Against Amending the Business Subsidy Agreement. Chapter 469 is amended by adding a new section that prohibits amending any business subsidy agreement or relocation agreement to change jobs creation, retention or wages goals. Effective the day following final enactment and applies to all JOBZ agreements.
Section 4. Annual Certification of Compliance. Chapter 469 is amended by creating a new section that requires all businesses to annually certify each December 1 to the commissioner of employment and economic development that they are in compliance with the terms of their business subsidy agreement. Businesses that fail to comply permanently lose eligibility to participate in the JOBZ program and are subject to repayment of two years tax. This certification is public. Effective the day following final enactment.
Sections 1 and 2. Referral of Debts to the Commissioner for Collection. Amends Minn. Stat. § 16D.02, subds. 3 and 6, to allow cities, counties, and other state supported schools in addition to the University of Minnesota, to refer debts to the commissioner for collection. Effective day following final enactment.
Section 3. Determinations of Uncollectibility for Debts Referred to the Commissioner for Collection. Amends Minn. Stat. § 16D.04, subd. 2, to authorize the commissioner to make the determination of whether a debt that has been referred to the commissioner for collection is uncollectible. Effective for debts referred after December 31, 2008.
Section 4. Debtor Notification. Amends Minn. Stat. § 270A.08, subd. 1, to provide that when debts have been referred to the commissioner for collection, notice to the debtor of revenue recapture will be sufficient if the commissioner sends the notice by regular mail to the debtor's last known address as shown in the records of the commissioner. Effective for debts referred after December 31, 2008.
Section 5. Prohibition against Collection during the Appeal Period of an Order. Amends the predeprivation provisions in Minn. Stat. § 270C.33, subd. 5, to include any order of the commissioner. This clarifies that the prohibition against collection during the appeal period of an order applies not only to orders of assessment, as is currently provided, but to all orders where a liability is being imposed (such as personal liability assessments against responsible parties). Prior to the recodification of chapter 270C in 2005, the predeprivaton provisions were found in Minn. Stat. § 270.10, subd. 5 and applied to all orders of the commissioner. This generic language was not picked up in the recodification and should have been. Effective the day following final enactment
Section 1. Mortgage tax. Exempts mortgages recorded on or after August 1, 2007, on property located in the southwestern Minnesota flood disaster area from the mortgage tax to the extent the indebtedness was incurred to repair or replace property damaged by the disaster.
Section 2. Data update. Requires the Commissioner of Revenue to update data furnished to the Tax Study Commission formed in Laws 1987, chapter 268, article 7, section 1. Appropriates $200,000 from the general fund to the Commissioner of Revenue for that purpose.
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