Section 1.  [Promotion of angel credit in greater Minnesota]

Requires the Commissioner of DEED to develop a plan to promote usage of the angel credit in greater Minnesota, with the goal of awarding 30 percent of credits to investments in greater Minnesota businesses during the second half of calendar year 2013 and following years.  If the 30 percent target is not achieved in the second half of 2013 or any following year, then the credit rate is increased from 25 percent to 40 percent for the next calendar year for investments in greater Minnesota businesses.  Defines “greater Minnesota business” as a business that has its headquarters and at least 51 percent of its employees and payroll outside the seven-county metro area, but includes the entire area of cities that are partly in the seven-county metro area, and partly in other counties (Hanover, New Prague, Northfield, and Rockford).  Effective the day following final enactment.

Section 2. [Federal taxable income definition; net income]

Adopts the definition of “federal taxable income” to reflect the changes as of January 3, 2013 to the Internal Revenue Code, for tax year 2012 only, except for the federal provision allowing increased section 179 expensing.  Section 179 expensing allows businesses to deduct the entire amount of the cost of eligible property in the tax year the property is placed in service instead of claiming depreciation deductions over a number of years.  Minnesota requires that taxpayers add back 80 percent of the expense amount in the first tax year, then subtract one-fifth of that amount for each of the next five years. 

Section 3. [Federal adjusted gross income changes]

Adopts the federal changes for determining federal adjusted gross income (FAGI), which is used for determining the alternative minimum tax (AMT) and wage withholding.  Minnesota adopts these changes for tax year 2012 only. 

Section 4.  [Definitions]

References the definitions of “federal credit, placed in service,” and “qualified rehabilitation expenditures” to the meaning given in section 47 of the Internal Revenue Code, for purposes of the Minnesota historic structure rehabilitation credit.  Effective the day following final enactment.

Section 5.  [Applications; Allocations]

Replaces the term “expenses” with “expenditures” for purposes of the historic structure credit.  Requires the State Historic Preservation Office of the Minnesota Historical Society to notify the developer of a project of its eligibility determination in writing.  Provides for a decision of the office regarding eligibility for a state credit or grant to be challenged as a contested case under the state administrative procedure statutes.  Updates the references to the Commissioner of Revenue in the statute for consistency with references in other sections.  Effective the day following final enactment.

Section 6.  [Credit certificates; grants]

Provides that assignment of credit allocation certificates issued by the State Historic Preservation Office is not valid unless the assignee notifies the Commissioner of Revenue within 30 days that the assignment is made.  Requires the commissioner to prescribe the forms necessary for such notification.  Provides that a credit issued to a partnership, LLC taxed as a partnership, S corporation, or multiple owners of property passed through pro rata to partners, members, shareholders, or owners respectively, is not an assignment of a credit.  Allows a grant agreement between the office and a grant recipient to be issued to another individual or entity.  Effective the day following final enactment. 

Section 7.  [Partnerships; multiple owners] 

Adds language to allow credits granted to corporate entities to be passed through to partners, members, shareholders, or owners of a corporate entity according to any executed agreement between relevant parties.  Effective the day following final enactment.

Section 8.  [Internal revenue code; property tax refund]

Adopts the federal changes that affect the calculation of household income for purposes of the property tax refund chapter in Minnesota Statutes.  This section is effective for tax year 2012 only for property tax refunds based on property taxes payable after December 31, 2012 and rent paid after December 31, 2011.

Section 9.  [Authority; tax increment financing]

Modifies the definition of "authority" by adding a municipality that undertakes a project, pursuant to the newly created mining reclamation project area.

Section 10.  [Soil deficiency district definition] 

Defines a soil condition district as a district consisting of a project or portions of a project within which the authority finds by resolution that the following exist:

1. Parcels consisting of 70 percent of the area of the district contain unusual terrain or soil deficiencies that require substantial filling, grading, or other physical preparation for use and a parcel is eligible for inclusion if at least 50 percent of the area of the parcel requires substantial filling, grading, or other physical preparation for use; and
2. The estimated cost of physical preparation of that district, excluding certain road and local improvement costs, exceeds the fair market value of the land before completion of the preparation.

Section 11.  [Mining reclamation project area]

Paragraph (a) authorizes an authority to designate a mining reclamation project area where parcels consisting of at least 70 percent of the acreage, excluding street and railroad right of ways, are characterized with one or more of the following:

1. peat or other soils with geotechnical deficiencies that impair development of buildings or infrastructure;
2. soils or terrain that requires substantial filling in order to permit the development of buildings or infrastructure;
3. landfills; dumps, or similar deposits of municipal or private waste;
4. quarries or similar resource extraction sites;
5. floodway; or
6. substandard buildings.

Paragraph (b) clarifies that a parcel is deemed to meet the requirements above if 50 percent of the area meets the requirement, but for substandard buildings, the requirement is 30 percent. 

Section 12.  [Municipality approval] 

Requires an authority that establishes a mining reclamation project area to document the reasons and supporting facts for districts established in the area and retain the documentation until two years after a district is decertified.  The findings must have been made and documented no more than ten years before the approval of the tax increment financing plan for the district. 

Section 13.  [Duration limits]

Sets the duration limit for a soil deficiency district at 20 years.

Section 14.  [Soils condition districts] 

Provides that increments from a soils condition district in a mining reclamation project area can be used for public improvements in the area that are directly caused by the removal or remedial action. 

Section 15.  [Economic development districts] 

Extends the 2010 jobs bill’s economic development district authority, as extended by the 2011 tax policy bill, from July 1, 2012, through January 1, 2014.

Laws 2010, chapter 216, as amended by Laws 2011, chapter 112 allows economic development districts to be used for any type of project if the following conditions are met:

• The municipality finds the project will create new jobs in the state, including construction jobs, and the project otherwise would not have begun before January 1, 2014, without the assistance
• Construction of the project begins no later than July 1, 2012
• The request for certification is made by June 20, 2012

This section would extend each of these dates by 18 months.  Under prior law and resuming July 1, 2012, economic development districts could only be used for (1) manufacturing, (2) warehousing, (3) research and development, and (4) tourism in selected counties.

Section 16. [Use of Surplus Increments] 

Extends by 18 months, to January 1, 2014, the 2010 job bill’s expanded authority, as extended by Laws 2011, chapter 112, to spend excess and surplus tax increment. Under present law, this authority applies to construction of new or substantial rehabilitation of existing buildings if:

1. Construction begins before July 1, 2011;
2. The development will create new jobs, including construction jobs; and
3. The development would not have occurred without assistance.

Section 17.  [Soil deficiency district increments]  

Restricts the use of increments from a soil deficiency district in a mining reclamation project area to the acquisition of parcels, paying the cost of correcting soil deficiencies, administrative expenses and redevelopment costs provided that the redevelopment costs do not exceed 25 percent of the tax increment.

Section 18.  [Five-year rule] 

Provides that in the tax increment financing plan for a district in a mining reclamation project area, an authority may elect that the five-year rule does not apply. 

Section 19.  [Use of revenues for decertification] 

Provides that in the tax increment financing plan for a district in a mining reclamation project area, an authority may elect that the provisions governing use of revenues for decertification do not apply. 

Section 20.  [City of St Paul, Capital Improvement Bonds]

Extends to 2024 the special law authorizing the city of St Paul’s capital improvement bonding program.  Absent the extension, the authority expires in 2013.

Section 21.  [Cook/Orr ambulance services; levy authority]

Expands the authorized uses of the levy proceeds to include attached and portable equipment for use in and for the ambulances and parts and replacement parts for maintenance and repair of ambulances, and specifically excludes "operation expenses."

Section 22.  [Use of revenues; Rochester]

Expands the requirements for cities eligible for a portion of the $5 million of Rochester’s local sales tax revenue set aside for economic development purposes in surrounding communities to include any other city with a population of at least 1,000 that is:

• within 25 miles of the geographic center of Rochester, and

• is closer to Rochester than to any other nonmetro city with a population of 20,000 or more.

The only city that qualifies is Wanamingo.  Effective the day following final enactment.

Section 23.  [Carlton County cemetery levy] 

Permits Carlton County to levy annually in and for the unorganized township of Sawyer for cemetery purposes. 

Section 24.   [Itasca County; Nursing Home Bonds]

Authorizes the county to issue general obligation bonds in addition to revenue bonds to finance nursing home improvements, subject to a reverse referendum.

Sections 25 and 26.  [St. Cloud and area cities local option sales tax]

Allows St. Cloud to use its local sales tax for regional community and aquatics facilities projects.  Allows St. Cloud area cities (St. Joseph, Waite Park, Sartell, Sauk Rapids, and Augusta) to extend their tax from 2018 to 2038, provided the extension is approved by the voters at a general election held by November 2017.  The ballot must still list the projects to be funded from the tax extension, but the tax does not have to expire for one year before being re-imposed.  Effective the day after the governing body of each city complies with Minnesota Statutes, section 645.021, subdivision 3.

Section 27. [Oakdale; TIF]

Authorizes specified parcels to be deemed occupied by substandard buildings for purposes of the requirements of a redevelopment tax increment financing district.

Section 28. [Effective Date change; Marshall County]

Allows farmers in Marshall County who were forced to move away from their farms due to flooding in 2009 to continue to receive agricultural homestead classification on the farmland indefinitely, provided they continue to reside in Minnesota within 50 miles of the land. This provision was originally adopted in a 2010 law, but on a temporary two-year basis, which is due to expire for taxes payable in 2013.

Section 29. [Dakota County; redevelopment TIF]

 Subdivision 1 authorizes the Dakota County Community Development Agency to create a redevelopment district consisting of parcels from an existing redevelopment district that is required to decertify in 2012.  This could be interpreted as an extension of the existing district.

Subdivision 2 exempts the district from the "blight test" and from the following limits on spending increment:  (1) the prohibition that tax increment not be used to pay for the cost of public improvements, equipment or decorative purpose; (2) the requirement that increment be used to finance the cost of corrections conditions; and (3) the prohibition that tax increment not be used for a commons area used as a public park or a facility used for social or recreational purposes.

Subdivision 3 authorizes expenditure of increment and clarifies that expenditures are deemed to meet the pooling requirements, the five-year rule and decertification requirements.

Subdivision 4 requires that the captured tax capacity be included for computing state aid formulas.

Section 30.  [St. Cloud; TIF]

Provides that St. Cloud TIF District No. 2. is deemed to be a "gap" district certified between August 1, 1979, and July 1, 1982.

Section 31.  [Amended returns; IRA rollovers]

Allows for an extension until April 15, 2013 for filing amended returns for individuals who made IRA rollovers pursuant to the Federal Aviation and Modernization Act of 2012.

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