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Alexis C. Stangl
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   Senate   
State of Minnesota
 
 
 
 
 
H.F. No. 3167 - Omnibus Supplemental Tax Bill Conference Committee Report
 
Author: Senator Rod Skoe
 
Prepared By: Eric S. Silvia, Senate Counsel (651/296-1771)
Nora Pollock, Senate Counsel (651/297-8066)
 
Date: May 16, 2014



 

Article 1

Property Tax Aids and Credits

Section 1. Volunteer retention stipend aid pilot. Provides for a three-year pilot program to pay $500 stipends to volunteer firefighters, volunteer ambulance attendants, and volunteer emergency medical responders who serve in a specified pilot area with the objective of improving volunteer recruitment and retention.  The commissioner of revenue shall pay aid to municipalities, emergency medical services providers, and nonprofit firefighting corporations that use volunteers in the pilot area, and the entities receiving the aid must pay the stipend to individuals who volunteered for all of the previous calendar year.  The aid shall be paid in 2015, 2016, and 2017 for volunteer service provided in 2014, 2015, and 2016.  A report is due to the legislature in 2018, and must include data on the amount of aid paid and number of volunteers in each year of the pilot, and also the number of volunteers in comparison counties.  Effective the day following final enactment.

Section 2. Agricultural homestead market value credit.  Increases the rate of the agricultural homestead market value credit so that it reaches a maximum of $490 at a market value of $270,000 and over.  Under current law, it reaches a maximum of $345 at $115,000 of value, but then decreases to $230 at a value of $345,000 and over.  Effective beginning with taxes payable in 2015.

Section 3. Disparity reduction credit. Modifies the disparity reduction credit by adding Ortonville to the list of eligible cities and increases the credit by providing that the credit will be the amount necessary to reduce the effective tax rate on commercial-industrial and apartment properties to 1.6 percent, versus the current 1.9 percent. Effective beginning with taxes payable in 2015.

Section 4. Supplemental firefighter retirement state aid.  Includes all independent nonprofit firefighting corporations, regardless of pension fund used, in the definition of “municipality” for purposes of paying supplemental firefighter retirement state aid.  These groups were inadvertently omitted when this new aid program was established in 2013. Also makes a correction to a percentage used in allocating the aid to the various pension funds so the total equals 100 percent.

Section 5. City formula aid. Corrects an error in calculating formula aid in Minnesota Statutes, section 477A.013, subdivision 8, which impacts the LGA losses to cities that currently get more aid than their “unmet need” under the formula. Without the fix, a city that should have its LGA gradually decreased to its “unmet need” amount will see its aid decrease faster if the LGA appropriation is increased. Effective beginning with aids payable in 2015.

Section 6. LGA; appropriation. Increases the city local government aid appropriation in calendar year 2015 to $516,898,012. For aids payable in 2016 and thereafter, the appropriation is increased and set at $519,398,012. Effective for aids payable in 2015 and thereafter.

Section 7. PILT; types of land; payments. Clarifies the formula used for wildlife management lands by using the same formula as other payments in lieu of tax for other types of land. Provides that payment for local ditch assessments shall be divided and distributed to counties in proportion to each county’s percentage of the total annual ditch assessments, and also provides for payment for any positive difference in the 2013 payments for wildlife management lands. 

Section 8. PILT; procedure. Requires each county containing state-owned land within a conservation area to determine and certify to the commissioner of natural resources by May 31 of the payment year the county’s ditch assessment for state-owned land. The commissioner of natural resources shall certify the assessment to the commissioner of revenue by June 15 of the payment year. Also provides for the payment of 2013 ditch assessment allocation by June 30, 2014.

Section 9. PILT; types of land; payments. Clarifies that each township will receive 10 percent of the PILT payment associated with tax-exempt natural resource land in the township rather than 10 percent of the total PILT payment made to the county.

Section 10. Production property transition aid.  Provides for the payment of transition aid to cities and towns that lose 5 percent or more of their net tax capacity due to the change in the definition of “real property” in Article 2, section 9.  For aid beginning in 2016, qualifying cities and towns will receive full compensation for the decrease in tax base. The transition aid phases out over the next four years, with aid payments reduced by 20 percent each year. No aids are payable in 2021 and thereafter. Effective beginning with assessment year 2015.

Section 11. Aquatic invasive species prevention aid. Creates a new aid program administered by the department of revenue that provides aid payments to counties to be used solely to prevent the introduction of or limit the spread of aquatic invasive species. The aid shall be allocated to all counties at 50 percent based on each county’s share of watercraft trailer launches and 50 percent based on each county’s share of watercraft trailer parking spaces. The county may appropriate the proceeds directly or may use any portion to provide finding for a joint powers board or cooperative agreement with another political subdivision. $4,500,000 is appropriated in 2014 for payment to the counties on July 20, 2014, and $10,000,000 is appropriated in each year thereafter to be paid at the same time as other local government aids.

Section 12. Additional supplemental aid revision of omitted 2013 independent firefighting corporations.  For the supplemental aid paid in October 1, 2014 only, the nonprofit firefighting corporations that did not receive October 1, 2013 payments under this program will have the amounts they should have received calculated and paid first from the FY 2015 appropriation before the FY 2015 payments are calculated for all qualified firefighting groups. The catch-up payments will be made with the regular October 1, 2014 (FY 2015) distributions.

Section 13. Supplemental county program aid for 2014.  Authorizes supplemental county program aid (CPA) payments for 2014 only for any county whose 2014 CPA was less than it received in 2013.  The amount of supplemental aid is equal to the reduction in aid between 2013 and 2014. Effective the day following final enactment.

Section 14. Supplemental agricultural credit for taxes payable in 2014.  Provides that each agricultural homestead receiving an agricultural market value credit for taxes payable in 2014 is eligible for a supplemental credit of $205, provided the credit does not exceed the net taxes on the property. Requires each county to provide the commissioner of revenue with the necessary information by August 15, 2014, and provides that the supplemental credit will not be paid to any homestead having delinquent taxes. The commissioner must pay the supplemental credit amount by October 16, 2014. Effective the day following final enactment.

Section 15. LGA penalty forgiveness; Bluffton.  Provides penalty forgiveness to the city of Bluffton for late filing of financial reports with the state auditor for the last three years, provided that the state auditor certified that these reports have now been filed and the CY 2013 report, due June 30, 2014, are filed on time.  The city lost one-half of its LGA payments ($16,050.50 per year) in the years 2011-2013.  $20,000 of the penalty would be paid to the city with the July 2014 LGA payment and the remaining $28,151.50 would be paid with the July 2015 LGA payment. Effective the day following final enactment.

Section 16. Homestead credit refund and renter property tax refund increase.  Directs the commissioner of revenue to increase all homestead credit refunds based on taxes payable in 2014 by three percent, and all renter property tax refunds based on rent paid in 2013 by six percent.  Effective for refund claims based on taxed payable in 2014 and rent paid in 2013 only.

Article 2

Property Tax

Section 1. Emergency medical service district levy authority.  Increases the levy authority for emergency medical service districts from $400,000 to $550,000 beginning with taxes payable in 2016. Under current law, the levy authority is limited to 0.048 percent of the taxable market value of the district or $400,000, whichever is less.

Sections 2, 5, and 6. Notification of sliding scale market value exclusion and pollution control exemption. Requires the commissioner of revenue to develop an electronic means to notify interested parties when electric power generation facilities have filed applications for the sliding scale market value exclusion and pollution control exemption.  Effective the day following final enactment.

Section 3. Solar energy-generating systems.  Amends existing exemption of solar photovoltaic devices to instead exempt “solar energy-generating systems”. Provides that if the real property upon which a solar-generating system is located is used primarily for solar energy subject to the production tax, the property shall be classified as 3a. If the land is not used for solar energy subject to the tax, the real property shall be classified without regard to the system. Effective for assessments year 2015, taxes payable 2016, and thereafter.

Section 4. Electric generation facility; personal property.  Extends, by five years, the time frame that a facility in Beltrami County must commence construction in order to receive a personal property tax exemption. Effective for assessments year 2015, taxes payable 2016, and thereafter.

Section 7. Sliding scale market value exclusion; eligibility. Provides that facilities not eligible for the exclusion for taxes payable in 2015 are only eligible if the facility converted from coal to an alternative fuel and had a nameplate capacity prior to conversion of less than 75 megawatts. Effective for assessment year 2015 and thereafter.

Section 8.  Solar energy production tax. Imposes a tax on electricity production from a “solar energy system”. Exempts solar energy systems with a capacity of one megawatt alternating current or less; other systems are taxed at a rate of $1.20 per megawatt-hour produced. The owner of a solar energy system must report annually to the commissioner of revenue by January 15 the number of megawatt-hours produced by the system the previous year. The commissioner of revenue must annually notify an owner of a solar energy system by February 28 of the amount of tax due to each county.  The tax shall be distributed at 80 percent to the counties, and 20 percent to the cities and townships.  Effective with taxes payable in 2015.

Section 9. Real property; definition.  Provides that the exterior shell of a structure used in the production of biofuels, wine, beer, distilled beverages, and dairy products, is not included in the definition of real property, even if the shell has structural, insulation, or temperature control functions. The exterior shell of the structure, however, is real property if it is used primarily for storage of ingredients or materials used in the production of biofuels, wine, beer, distilled beverages, and dairy products, or the storage of those finished products.  Effective beginning with taxes payable in 2016.

Section 10. Homestead of disabled veteran or family caregiver. Extends the time period for the surviving spouse of a totally disabled veteran to continue to receive the disabled veteran’s property tax market value exclusion from five years to eight years. Provides the same extension for surviving spouses of military personnel who are killed in action. Effective for taxes payable in 2015, and applies to homesteads that initially qualified for the exclusion for taxes payable in 2009 and thereafter.

Section 11. Proposed levy. Extends the deadline for counties and cities to certify their proposed levies from Sept. 15 to Sept. 30, and retains the existing deadlines of Sept. 15 for towns and special taxing districts, and Sept. 30 for school districts. Effective for taxes payable in 2015.

Sections 12 and 13. Interest rate on unpaid property taxes.  Provides a lower interest rate for homesteaded property (both regular and disabled) on which the taxpayer/property owner has agreed to an installment payment agreement (commonly referred to as “confession of judgment”).  Sets the rate for these payments at the greater of 5 percent or 2 percentage points over the prime rate charged by banks to their most creditworthy borrowers. The commissioner of revenue will annually determine the prime rate based on Federal Reserve data.  The rate when the installment payment agreement is entered will be fixed for the duration of the confession of judgment. Effective for confessions entered into on or after January 1, 2015.

Sections 14 and 15. Anoka County levy. Expands Anoka County’s current authority to levy property taxes to pay for bonds to fund countywide public safety improvements and equipment to also allow the county to fund pay-as-you-go improvements and equipment. Allows the levy for both bond repayment and pay-as-you-go projects to be a separate line item on the proposed property tax notice and the property tax statement.  Repeals the exemption for the debt issued from the net debt limits. Effective for taxes payable in 2013 through 2023.

Sections 16 and 17.  Helena Township; board plan and program. Increases, from 325 to 364, the maximum number of connections the Cedar Lake area water and sanitary sewer district’s comprehensive plan may provide. Permits the town board of supervisors to sell or use surplus property or the surplus of tax revenues or service charges collected from the district to connect property owners in the former district to another public sewer system. Any surplus not used to connect residents may be distributed equally to property owners in the former district that were charged the extra tax or service fee during the most recent tax year. Any surplus not refunded must be transferred to the town’s general fund. Effective upon local approval.

Section 18. City of Jackson; limitation on abatement. Increases the abatement authority for the city of Jackson for taxes payable in 2015 through 2019 to the greater of ten percent of the city’s net tax capacity for the taxes payable year to which the abatement applies or $240,000. Current law caps the amount at $200,000.

Section 19. Study of energy producing systems. Requires the commissioner of revenue to conduct a study and analysis of the property taxation of all energy producing systems in Minnesota, including both traditional and renewable energy sources. The study must describe, analyze, and compare the availability of any exclusions, exemptions, or payment-in-lieu of taxation arrangements that apply to the systems, evaluate the extent to which host political subdivisions and communities are compensated under the existing Minnesota property tax system, and compare the net cost of property and other taxes per unit of energy produced in Minnesota compared to its border states, for both traditional and renewable energy sources. A report is due to the legislature on February 1, 2015.

Section 20. Study of North Dakota oil production; impact on Minnesota. Requires the commissioner of DEED, in consultation with the commissioners of DOR and DOT, to study the effects of current and projected oil production in North Dakota on the Minnesota economy. The study must address the direct and indirect costs and benefits and positive and negative effects, including those upon workforce, taxation, and transportation, and economic challenges and opportunities for economic growth or diversification. A report is due to the legislature on February 15, 2015.

Article 3

Sales, Use and Excise Taxes

Section 1.  Qualified business; greater Minnesota business expansions. Changes the definition of businesses that can qualify for the sales tax exemption for greater Minnesota business expansions to exclude a number of nonmanufacturing businesses including legal, accounting, and consulting services, and leisure, lodging, and health care businesses.  Retail businesses and public utilities are already excluded.  Effective the day after final enactment.

Section 2.  Certification of qualified businesses; greater Minnesota business expansions. Simplifies the employment expansion requirements for qualifying for the sales tax exemption for greater Minnesota business expansions to the greater of: (1) two employees; or (2) ten percent of the business’s current number of employees.  Limits the agreement to a seven year period rather than a 12 year period. Allows the commissioner of employment and economic development (DEED) 90 days rather than 60 days to act on an application for this program. Effective the day after final enactment.

Section 3.  Available tax incentives; greater Minnesota business expansions.  Limits the sales tax exemption for any greater Minnesota qualified business to $2,000,000 annually and a total of $10,000,000.  Allows the commissioner of DEED to negotiate the exemption for each business as part of the business subsidy agreement.  Currently there is no limit to the amount of sales tax exemption going to any one business.  Effective the day after final enactment.

Section 4.  Sales and use tax (June accelerated).  Increases the annual tax liability threshold for vendors required to remit June sales tax collections on an accelerated basis from $120,000 to $250,000.  Decreases the percentage of June sales tax liability that must be paid on an accelerated basis from 90 percent to 81.4 percent.  Effective beginning with June 2014 sales tax liabilities.

Section 5.  Accelerated payment of June sales tax liability; penalty for underpayment.  Decreases the percentage of June sales tax liability that must be paid on an accelerated basis from 90 percent to 81.4 percent for purposes of the penalty provision.   Effective beginning with June 2014 sales tax liabilities.

Section 6.  Instructional materials. Clarifies that digital audio and audiovisual works required for a postsecondary course of study are included in the instructional materials exemption.  Effective the day following final enactment.

Section 7.  Presentations accessed as digital audio and audiovisual works. Provides a sales tax exemption for certain live and prerecorded presentations, classes, and seminars that meet both of the following criteria:

  • the presentation allows the online participants  to interact with the presenter and each other during the time the participants access the  presentation, although the presenter may limit the amount and timing of the interaction (i.e. at the end); and
  • if participants have the option of attending the presentation in person, the persons at the presentation and online participants are subject to the same interaction rules and admission to the presentation is not subject to sales tax under this chapter.

Effective for sales and purchases made after June 30, 2014.

Section 8.  Coin operated entertainment and amusement devices. Exempts from sales tax the sale of coin-operated devices whose main purpose is to provide amusement and entertainment. Exempt devices would include juke boxes, pinball and video games, foosball and pool tables, photo booths, batting cages, and machines used in carnival games and rides.   Specifies that the exemption does not apply to vending machines, lottery devices, or gaming devices.  Effective for sales and purchases after June 30, 2014.

Section 9.  Qualified data centers.  Makes the following changes to the sales tax exemption for qualified data centers and qualified refurbished data centers, all of which are effective the day following final enactment:

  • Makes clarifying changes to: (1) move a clause to paragraph (b) that was erroneously added to paragraph (c) in the 2013 tax bill; and (2) add the term “qualified refurbished data centers” to several existing references to a “qualified data center.” 
  • Specifies that the exemption added in 2013 for computer software maintenance agreements applies for purchases made after June 30, 2013, and that computer software maintenance agreements purchased before July 1, 2013, do not count toward the investment threshold for a qualified data center. 
  • Strikes an internal effective date for the exemption.  
  • Requires DEED to certify to the commissioner of revenue when a data center or refurbished data center has met the requirements to qualify for the sales tax exemption.  The certification must include total square footage, investment amount, and the time period in which the qualifying investments were made.  Provides that refunds will not be issued until the commissioner of revenue has received the certification.  Also requires DEED to annually notify the commissioner of revenue of the data centers and refurbished data centers that are projected to become qualified in each of the next four years.

Section 10.  Greater Minnesota business expansions. Requires that the sales tax exemption for Greater Minnesota business expansions only applies to purchases to be used at the facility in Greater Minnesota identified in the business subsidy agreement and limits the total amount of refund to a business to the amount in the business subsidy agreement. Provides that for eligible refund claims that carry over to a subsequent fiscal year, interest does not accue on the claims until 90 days after July 1 of the fiscal year in which funds are available for the claimed amount. Effective the day following final enactment.

Section 11.  Sales to government. Modifies the sales tax exemption for local governments as follows:

  • Specifies that the existing exemption for purchases by the Metropolitan Council for its purchases of vehicles and repair parts to equip certain operations applies through December 31, 2016.
  • Eliminates the illustrative list of government services the inputs to which would remain taxable and replaces it with a definitive list.  Goods and services purchased by exempt local governments for a publicly provided liquor store, gas or electric utility, golf course, marina, campground, cafe, laundromat, solid waste hauling, solid waste recycling, or a landfill will remain taxable.  Effective for sales and purchases made after June 30, 2014. 
  • Expands the definition of “local governments” to include instrumentalities of home rule charter and statutory cities, counties, and towns; special districts, except for the Metropolitan Council for calendar year 2016; joint powers boards; or organizations created under joint powers authority.  Effective beginning January 1, 2016.  Beginning January 1, 2017, the Metropolitan Council would be included as a special district in the definition of “local governments.” 

Section 12.  Fundraising sales by or for nonprofit groups. Raises the annual limit of non-taxable funding raising sales for youth and senior citizen groups from $10,000 to $20,000 annually.  Provides that if a group’s fundraising sales exceed the $20,000 limit, the sales tax would only apply to the portion in excess of $20,000.  Effective for sales made after December 31, 2014.

Section 13.  Fundraising events sponsored by nonprofit groups.  Provides a definition of fundraising days for purposes of the limit of 24 days that nonprofits are allowed to engage in fundraising events.  The definition will exclude ongoing sales and stores and restaurants, ongoing sales over the Internet, and regularly scheduled classes or activities that are part of the nonprofit’s normal course of business.  Effective the day following final enactment.

Section 14. Nonprofit snowmobile clubs; machinery and equipment. Provides a sales tax exemption for grooming machines, attachments, other associated accessories, and repair parts for purchases by nonprofit snowmobile clubs that received a state grant-in-aid maintenance and grooming grant administered by the Department of Natural Resources in the current year or in the previous three-year period. Effective for sales and purchases made after June 30, 2014.

Section 15.  Excise tax rates; cigarettes.  Removes the excise tax rate of 283 mills for cigarettes weighing more than three pounds per thousand.  This change would also apply to little cigars, as they are taxed under the same rate structure as cigarettes.  One rate would apply to all cigarettes (and little cigars) sold in the state.  Effective July 1, 2014.

Section 16.  Accelerated tax payment, cigarette or tobacco distributers.  Increases the annual tax liability threshold for cigarette and tobacco distributers required to remit June tax collections on an accelerated basis from $120,000 to $250,000.  Also decreases the percentage of June tax liability that must be paid on an accelerated basis from 90 percent to 81.4 percent. Effective beginning with June 2014 tobacco tax liabilities.

Section 17.  Microdistillery credit.  Creates a tax credit for a qualified distiller. A qualified distillery is one who produces premium, distilled spirits in a total quantity not to exceed 40,000 proof gallons in a calendar year. The credit would apply to the calendar year immediately preceding the year in which the credit is being claimed. The total allowable credit is equal to either the lesser of the qualified distiller’s actual tax liability, or $133,000.  Effective July 1, 2014. 

Section 18.  Microdistilleries; return filing requirement. Specifies that a microdistillery is a wholesaler for purposes of the excise tax on distilled spirits given as samples in a cocktail room.  Requires that returns by microdistilleries must be made in a form and manner prescribed by the commissioner.  Effective July 1, 2014. 

Section 19.  Accelerated tax payment, penalty (liquor taxes).  Increases the annual tax liability threshold for liquor distributers required to remit June tax collections on an accelerated basis from $120,000 to $250,000.  Also decreases the percentage of June tax liability that must be paid on an accelerated basis from 90 percent to 81.4 percent.  Effective beginning with June 2014 liquor tax liabilities.

Section 20.  Aircraft in lieu tax rate.  Clarifies the applicable base price amounts for the in lieu tax on aircraft using Minnesota airspace or airports to capture base prices at the threshold amounts.  The base price brackets in current law could be interpreted to exclude base prices at the threshold amounts.  Effective July 1, 2014, for aircraft tax due on or after that date.

Section 21.  City of Duluth; food and beverage tax. Allows the Duluth city council to increase its food and beverage tax from the current rate of 1.75 percent to 2.25 percent with the additional revenue dedicated to fund up to $18,000,000 of capital projects related to tourism and recreation in the portion of the city west of 34th Avenue West.  The temporary increase ends when the additional revenue raised under this section and the authorized lodging tax is sufficient to fund the allowed projects. Authorizes Duluth to issue bonds up to $18,000,000 for the projects. Eliminates obsolete language related to a 1998 temporary increase of the Duluth food and beverage tax from 1.75 percent to 2.25 percent to fund the Duluth Entertainment and Convention Center (DECC) and the Great Lakes Aquarium, which has expired.  Effective upon the city filing approval with the secretary of state.

Section 22.  City of Duluth; tax on receipts by hotels and motels. Allows the Duluth city council to increase its lodging tax from the current rate of 1.0 percent to 1.5 percent with the additional revenue dedicated to fund up to $18,000,000 of capital projects related to tourism and recreation in the portion of the city west of 34th Avenue West.  The temporary increase ends when the additional revenue raised under this section and section 21 is sufficient to fund the allowed projects. Also eliminates obsolete language related to a 1998 temporary increase of the lodging tax from 1.0 percent to 1.5 percent to fund the DECC and the Great Lakes Aquarium which has expired.  Effective upon the city filing approval with the secretary of state.

Section 23.  Termination of taxes (Albert Lea).  Changes the allowed time period for imposition of the local sales tax in Albert Lea from the lesser of 10 years or when $15,000,000 is raised, to the lesser of 15 years or when the $15,000,000 is raised.  Effective upon the city filing approval with the secretary of state.

Section 24.  Use of revenues (Baxter). Allows the city of Baxter, with approval of the voters, as provided in section 26, to extend its local sales tax to fund up to an additional $40,000,000 for sanitary sewer and storm sewer projects, transportation safety improvements, and improvements to the Brainerd Lakes Area airport.  Effective upon the city filing approval with the secretary of state.

Section 25.  Bonds (Baxter). Allows the city of Baxter to issue up to $32,000,000 in bonds for the new projects authorized in section 24, based on the vote on the tax extension in section 24.  Effective the day following final enactment.

Section 26.  Termination of taxes (Baxter).  Allows the city of Baxter to extend its local sales taxes if approved by the voters at the 2014 general election.  If approved the tax would expire at the earlier of (1) December 31, 2037; or (2) when revenues are sufficient to pay for the authorized projects plus associated bond costs. Effective upon filing approval with the secretary of state.

Section 27.  Use of revenues (Brainerd). Allows the city of Brainerd, with approval of the voters, as provided in section 29, to extend its local sales tax to fund up to an additional $15,000,000 for improvements in the joint waste treatment facility, other water infrastructure, and trail improvements. Effective upon filing approval with the secretary of state.

Section 28.  Bonds. (Brainerd). Clarifies that the existing bond authority only applies to the original projects authorized in 2006.  Effective the day following final enactment.

Section 29.  Termination of taxes (Brainerd).  Allows the city of Brainerd to extend its local sales taxes if approved by the voters at the 2014 general election.  If approved the tax would expire at the earlier of (1) when an additional $15,000,000 is raised; or (2) 18 years after the original termination date for the tax.  Effective upon filing approval with the secretary of state.

Section 30.  Effective date modification for exemption for purchases covered by Medicare and Medicaid.  In the 2013 Omnibus Tax Bill, the sales tax exemption for drugs and medical devices was expanded to include items purchased in transactions covered by Medicare and Medicaid and the definition of “durable medical equipment” was expanded to include single patient use items.  These changes were effective for sales and purchases made after June 30, 2013.  This section modifies the effective date of that provision to be retroactive to April 1, 2009, for vendors who sold those items and did not collect, but did remit, the sales tax.  Allows claims for refunds to be filed until June 30, 2015. 

Section 31.  Effective date modification for exemption for certain accessories and supplies.  In the 2013 Omnibus Tax Bill, the sales tax exemption for drugs and medical devices was expanded to include accessories and supplies required for effective use of durable medical equipment, effective for sales and purchases made after June 30, 2013.  Similar to section 30, this section modifies the effective date of that provision to be retroactive to April 1, 2009, for vendors who sold those items and did not collect, but did remit, the sales tax.  Allows claims for refunds to be filed until June 30, 2015.

Section 32.  Effective date; qualified data centers and qualified refurbished data centers.  Clarifies the effective date for the 2013 changes to the qualified data center sales tax exemption.  Provides that the exemption applies to qualifying purchases made after June 30, 2012, except for computer software maintenance agreements. Purchases of computer software maintenance agreements made after June 30, 2013, would count toward the qualification threshold and be eligible for a sales tax exemption.  If a data center qualified under the criteria as provided in the original exemption (enacted in 2011 and effective beginning July 1, 2012), then the 2013 changes, other than for computer software maintenance agreements, would continue to be effective for sales and purchases made after June 30, 2012. Effective the day following final enactment.

Section 33.  Effective date; sales tax exemption for certain construction materials. Clarifies that the sales tax refund on construction materials and capital equipment for construction or expansion of a large pharmaceutical manufacturing facility may not be applied for before June 30, 2015. 

Section 34.  Proctor food and beverage sales and use tax.  Authorizes the city of Proctor to impose a sales tax of up to one percent on food and beverages sold in restaurants and places of refreshment, including retail on-sale liquor and fermented malt beverages, located in the city.  Provides that the proceeds of the taxes must be used to fund construction and improvement of walking and bicycle trails; a civic center and parking improvements; and redevelopment and realignment of a road through the fairgrounds.  Proceeds may also be used to pay debt service on bonds or other obligations issued to finance the projects.  Authorizes the city to enter into an agreement with the commissioner of revenue to administer, collect, and enforce the food and beverage and entertainment taxes.  Effective upon the city filing approval with the secretary of state.

Section 35.  Donated materials for a library expansion. Provides an exemption for building materials purchased and donated by a private entity and used in building an addition to a city library.  Effective for sales and purchases made after April 1, 2014, and before July 1, 2015.

Section 36.  Validation of prior act; authorization (Albert Lea).  Allows the city to file its approval of its original 2005 and 2006 sales tax laws and retroactively validates the enactment of that tax by June 15, 2014.  Normally a special law must be approved in the biennium in which it is enacted or it does not take effect.  Effective the day after final enactment.

Section 37.  Sales tax exemption; instrumentalities of the states.  Authorizes a temporary sales tax exemption for prepared food, candy, beverages, and alcoholic beverages purchased by an organization that is an instrumentality of all the states and made in connection with holding an annual meeting in Minnesota.  Effective for sales and purchases made between July 1, and December 31, 2014.

Section 38.  Voluntary compliance program; animal shelters. Provides that nonprofit animal shelters that owe back state and local sales taxes for a period prior to registering to collect and remit sales taxes will not be liable for those taxes if they register for a voluntary compliance program before January 1, 2015.  This provision also applies to nonprofit animal shelters that are being audited if the audit is not finally resolved.  The amnesty does not apply to taxes already collected by the seller, or remitted to the state.  Effective the day after final enactment.

Article 4

Income and Estate Taxes

Section 1.  Qualified small business; angel investment credit.  Expands the definition of qualified small business for the angel investment credit.  Under current law businesses must meet a variety of requirements for investments to qualify for the credit.  This section adds a fourth criterion, allowing businesses to qualify if they have as their primary business activity researching and developing a proprietary product, process, or service in the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation.  Effective beginning in tax year 2015.

Section 2.  Angel investment credit.   Removes unnecessary language pertaining to the administration of the credit.  Effective the day following final enactment. 

Section 3.  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 and by women- and minority-owned businesses.  Laws 2014, chapter 150, provided that $7,500,000 of the $15,000,000 provided for the angel credit in 2015 and 2016 be reserved through September 30th of the year for investments in greater Minnesota and women- and minority-owned businesses. The plan required in this section must have the goal of allocating the full amount of the reserved credit to investments in greater Minnesota and women- and minority-owned businesses. Requires the commissioner of DEED to include information on the plan and attainment of the goal in the annual report to the legislature. Effective the day following final enactment.

Section 4.  Greater Minnesota internship credit; definitions.  Modifies the definition of “eligible institution” to include graduate degree-granting colleges and universities.  Modifies the definition of “eligible student” to include a student who has completed one-half of the credits necessary to obtain a graduate degree.  Effective the day following final enactment.

Section 5.  Greater Minnesota internship credit; length of internship.   Decreases the minimum length of time for a qualifying internship from 12 weeks to eight weeks.  Effective the day following final enactment.

Section 6. Greater Minnesota internship credit; reporting requirement.  Extends by one year the dates for the two reports due to the legislature.  Effective the day following final enactment. 

Section 7.  Minnesota tax laws; gift tax reference.  Strikes a reference to the gift tax chapter, which was repealed in Laws 2014, Chapter 150, in the definition of “Minnesota tax laws” in the data practices chapter. Effective the day following final enactment.

Section 8.  Data practices; gift tax reference.  Strikes language in the data practices chapter allowing donors to inspect gift tax returns, since the gift tax was repealed in Laws 2014, chapter 150. Effective the day following final enactment.

Section 9. Update of administrative tax provisions.  Adopts federal tax administrative changes made between December 20, 2013, and March 26, 2014.  The federal law enacted in that time period does not change federal provisions referenced in chapter 289A.  Effective retroactive to tax year 2013.

Section 10. Update to federal definition of taxable income.  Adopts all the federal changes to taxable income in the Philippines Charitable Giving Assistance Act, which allows taxpayers may elect to treat contributions for typhoon relief made after March 25, 2014, and before April 15, 2014, as though they were made on December 31, 2013.  The effect is to allow individual and corporate calendar-year taxpayers to deduct typhoon relief contributions made from March 26th through April 14th on their 2013 federal income tax returns, rather than on their 2014 returns.  This section would allow deductions made by Minnesota taxpayers to flow through to their 2013 state returns. Without this change, taxpayers deducting typhoon relief contributions on their 2013 federal returns would be required to add those contributions to Minnesota taxable income on their 2013 state returns and then deduct them from Minnesota taxable income on their 2014 state returns.  Effective retroactive to tax year 2013.

Section 11. Additions to federal taxable income; individuals. Clarifies that the amounts required to be added back for purposes of the phaseouts of itemized deductions and personal exemptions are subject to the state income thresholds, which are lower than the federal threshold. This is a correction from the federal conformity provisions enacted in Laws 2014, chapter 150. Effective retroactively to tax year 2013.

Section 12.  Subtractions from taxable income; individuals. 

  • Military pay.  Extends the existing military pay subtraction to National Guard members in Active Guard/Reserve status and individuals in active status under the state adjutant general.  Effective beginning in tax year 2014.
  • Qualified transit and vanpool expenses.  Provides a subtraction from income for the value of employee transit passes and van pooling transportation expenses at the same level as the federal exclusion for qualified parking expenses. This subtraction effectively extends the "transit parity rule" by providing a new subtraction for Minnesota taxable income for the amount of transit and vanpool expenses allowed under federal law but expiring after tax year 2013. The amount would be calculated the same way as previously done under federal law, including indexing for inflation (clause 21).  Effective beginning in tax year 2014.

Section 13. Internal Revenue Code.  Adopts federal changes to federal adjusted gross income (FAGI) made between December 20, 2013 and March 26, 2014.  AGI is used for computing individual alternative minimum tax and determining withholding, and is the starting point for calculating household income, which is used to compute the dependent care and K-12 education credit.  The change to federal adjusted gross income is described in section 10.  Effective retroactive to tax year 2013.

Section 14.  Reciprocity.  Modifies the requirements for the commissioner to enter into an income tax reciprocity agreement with Wisconsin. Requires that the state with a net revenue loss must receive the amount of that loss by the other state. If an agreement is entered into before October 1, 2014, then the amount received by Minnesota must be at least the net revenue loss minus $1,000,000. The $1,000,000 amount must not be subtracted from the payment if an agreement is reached after September 30, 2014. Defines "net revenue loss."  Effective the day following final enactment.

Section 15.  Alternative minimum tax; individuals.  Provides a subtraction from alternative minimum taxable income for amount deducted under the subtraction for qualified transit and vanpooling expenses in section 11.

Section 16. Update of references to Internal Revenue Code; property tax refund chapter.  Adopts the federal changes that affect household income, which uses the definition of federal adjusted gross income as a starting point.  Effective retroactive to tax year 2013.

Section 17. Estate tax definitions.  Adds language to the definition of “federal gross estate” to include the value of property held in a qualified terminable interest property (QTIP) trust the election for which was made for Minnesota estate tax purposes, but not for federal estate tax purposes. Defines a “qualified work of art” as a work of art, as provided by the federal estate tax that is owned by a non-resident and on loan to a Minnesota art museum or similar charity.  These works of art are treated as not having a Minnesota situs.  The definition ensures that a nonresident decedent’s loan of a work of art to a Minnesota art museum will not trigger an obligation to file or pay Minnesota estate tax.  This section also updates the reference to the Internal Revenue Code for estate tax purposes through March 26, 2014.  Effective retroactively for deaths after December 31, 2013.

Section 18. Computation of Minnesota taxable estate. Provides that the value of property held in a QTIP trust elected for Minnesota estate tax purposes must be added to the value of the federal taxable estate for purposes of computing Minnesota estate tax liability. Effective retroactively for estates of decedents dying after December 31, 2013.

Section 19. Estate tax credit. Updates a cross reference in the estate tax chapter for purposes of calculating the credit allowed for nonresident decedents. Effective retroactively for estates of decedents dying after December 31, 2013.

Section 20. Effective date; Minnesota taxable estate. Clarifies that the effective date of the new definition of the Minnesota taxable estate, enacted in Laws 2014, chapter 150, applies only to taxable gifts made after June 30, 2013.  This limits the 3-year look back, which includes taxable gifts made within 3 years of the date of death in the estate, to gifts that were taxable under the repealed gift tax. Effective the day following final enactment.

Section 21. Definition of taxable gift.  Defines taxable gifts for purpose of the 3-year look back rule for estates of decedents who died between June 30, 2013 and January 1, 2014.  This language codifies the definition in the repealed gift tax, including guidance issued by the Department of Revenue. Effective retroactively for estates of decedents dying after December 31, 2005.

Section 22. Temporary education credit.  Allows a credit for taxpayers with a child who has been evaluated for, but not found to have, a specific learning disability, and for whom the evaluation indicated a determination of deficiency in reading skills that impaired the child in meeting expected standards.  The credit amount is 75 percent of expenses paid for tutoring, instruction, or treatment by an instructor not compensated by insurance or other means to assist students in improving reading skills, up to $2,000.  The expenses used to claim the credit must not be used to claim the K-12 credit or the subtraction for K-12 expenses under current law.  The credit is refundable and assignable in the same manner as the current law K-12 credit and must be apportioned for nonresidents or part-year residents.  The form and manner for claiming the credit is prescribed by the commissioner of revenue in consultation with the commissioner of education.  Requires the commissioner of revenue to provide a report to the House and Senate tax committees and education committees indicating the number of taxpayers claiming the credits and the average amount of credits claimed, and on the administration of the credits, including recommendations for compliance.  Effective for tax year 2014 only.

Article 5

Minerals

Section 1 and 2. Iron Range fiscal disparities program. Makes technical changes to the determination of the program’s preliminary areawide levy. Effective for taxes payable in 2015.

Section 3. Net proceeds tax; distribution within taconite assistance area. Modifies the shares allocated under present law to the cities/town, school districts and counties where the mines are located to also include the locations where the concentration plants are located. Provides for equitable apportionment if mining and concentration is carried on in more than one taxing district. Reduces share to Douglas J. Johnson fund and increases share to taconite environmental protection fund. Effective July 1, 2014.

Section 4. Taconite production tax; counties. Modifies the distribution of the taconite production tax to counties by increasing, by five cents, the distribution to the county road and bridge fund beginning with distributions in 2024. Effective for distributions beginning in 2015.

Section 5. Iron Range school consolidation and cooperatively operated school account. Modifies the definition of ‘qualified school projects’ by changing the date upon which a school project must have been approved, by referendum, from December 7, 2009, to April 3, 2006. Allows for additional amounts provided by law to be allocated to the school account, and clarifies the distribution into the account of the increase in the implicit price deflator for the taconite production tax.  Effective for distributions beginning in 2015.

Section 6. Increase. Removes redundant language that was inserted and clarified under Section 5. Effective for distributions beginning in 2015.

Section 7. Rock County aggregate tax. Extends, by ten years, the authority for a county that borders two other states and that is not contiguous to a Minnesota county with an aggregate tax to impose the tax at 7 cents per ton or 10 cents per cubic yard.  (The general law requires counties to impose aggregate tax, if they elect to use the authority, at a rate of 21.5 cents per cubic yard or 15 cents per ton.)  Rock County is the only county using this statutory authority. Effective the day following final enactment.

Section 8. Onetime 2008 production tax distribution; Aitkin. Allows the city of Aitkin to use its 2008 special distribution of taconite production tax revenues for any economic development project.  Current law designated the distribution for sewer and water improvements for a housing project, which was not constructed. Effective the day following final enactment. Upon enactment, the city must transfer all funds under this section to St. Louis County.

Section 9. Onetime 2013 production tax distribution; Cook.  Modifies a distribution of taconite funds made in the 2013 omnibus tax act to allow all the distribution to the city of Cook be used for street improvements, business park infrastructure, and a maintenance garage.  The 2013 legislation dedicated three-quarters of the distribution for those purposes and the other one-quarter for a water line project. Effective the day following final enactment.

Section 10. Reallocation of bond payments. Reallocates the amount of payments currently appropriated to nine schools with expiring bonds to the Iron Range school consolidation and cooperatively operated school account beginning the year after the final payment is made. Effective for distributions beginning in 2015.

Section 11. 2014 distribution only. Establishes a fund to receive 18.84 cents per ton of the taconite production tax and reallocates certain amounts to cities and townships for specified projects. Effective for the 2014 distribution and all payments must be made separately and within ten days of the date of the August 2014 payment.

 

Article 6

Local Development

Section 1. Ramsey county HRA; housing improvement areas.  Authorizes the Ramsey County HRA to exercise housing improvement area (HIA) powers.  The HRA would be allowed to do this by resolution, rather than ordinance, as is required for cities exercising those powers.  The city in which the housing improvement area would be established may veto it by resolution. Effective the day following final enactment.

Section 2. Dakota CCDA; housing credit allocation.  Creates new eligibility for projects to use allocations of federal low income housing tax credits in the first round for Dakota CCDA.  The tax credits are available for up to three projects for either new or rehabilitated multifamily housing, that is not restricted to those over 55, and is located in a commuter area located close to certain high frequency use transit stations, lines, and park and ride lots. Effective without local approval for the 2015 allocation of housing credits.

Section 3. Five-year rule; extension. Extends the general law five-year rule for a redevelopment district certified after April 20, 2009, and before June 30, 2012, to eight years after certification of the district.  Effective for districts for which the request for certification was made after April 20, 2009.

Section 4. Economic development districts; fiscal disparities option.  Allows cities to elect to make the fiscal disparities contribution for economic development districts in the same ways that are available for other types of districts.  This will allow the city to elect to make the contribution out of the city’s tax base. Under present law, the contribution must be made from the TIF district’s increment. Effective for districts for which the request for certification is made after June 30, 2014.

Section 5. City of Bloomington; Old Cedar Avenue Bridge. Modifies special legislation passed in 2013 for the city of Bloomington authorizing expenditure of one year of the fiscal disparities increment from the Mall of America for the renovation or replacement of the Old Cedar Avenue Bridge.  Upon completion of the project and if any funds remain, the city must use the funds in the following order of priority: signage for the bridge, kiosks and other wayfinding aids for users of the bridge, and bicycle and pedestrian paths that provide access to the bridge.  Effective without local approval.

Section 6. City of Baxter; TIF. Allows the city to expand the boundaries of Isle Drive TIF district to include an additional parcel. The county auditor must increase the original tax capacity of the district, however, the requirement that the original net tax capacity be increased by the net tax capacity of each improvement  for which a building permit was issued during the 18 months preceding the request, does not apply. The district is subject to the TIF general law rules as if the request for certification of the entire district was made on December 30, 2011. Effective upon local approval.  

Section 7. City of Eagan; TIF. Provides the following special rules for the Cedar Grove TIF District: (1) the city may elect to compute tax increment using the current local tax rate; (2) the five-year rule is extended; and (3) the district is provided with a three year duration extension. Effective upon local approval.

Section 8. City of Edina, TIF. Authorizes the city of Eagan or its development authority to establish one or more housing tax increment financing districts in the Southeast Edina Redevelopment Project Area subject to the following special rules: (1) The duration of the districts are limited to twenty years; (2) the city may substitute “20” for “40” in the 40-60 test for purposes of  determining income limits; (3) the applicable income limits apply for a twenty-five year period from the date of certification of the district; and (4), the city may pool increment from its Southdale 2 district. Effective upon local approval.

Section 9. City of Maple Grove; TIF. Grants special law authority to the city of Maple Grove to create TIF districts (until June 30, 2020) under special rules in a defined area of the city. Before using this authority, the city must find that 80 percent of the defined area has one or more of the following conditions (a parcel is treated as wholly meeting the requirement if 70 percent of its area meets the requirement, except that a 30 percent test applies for the substandard building requirement): (1) peat or other geotechnical difficulties; (2) substantial fill is required for commercial development; (3) landfills, dumps or similar conditions; (4) quarries or gravel pits; (5) floodway; and (6) substandard buildings.

The city may create a new type of district – a soil deficiency district. To qualify, 80 percent of the area needs to have soils or terrain difficulties with estimated correction costs that exceed the fair market value of the property (but not counting the costs of roads and other public improvements that landowners can be assessed for).  These districts would be allowed to collect 20 years of increment and would be limited to spending increment on land acquisition and soils correction. Any parcel acquired with increment from the district must be sold at no less than fair market value. The five-year rule is extended to eight years and the pooling percentage is increased from 20 percent to 40 percent. Effective upon local approval.

Section 10. City of Mound; TIF. Extends the five-year rule to thirteen years for the Mound Harbor tax increment financing district. Effective upon local approval.

Section 11. City of North St. Paul; TIF. Allows the city of North St. Paul additional time to request certification of a redevelopment district using the general law “deeming” provision for a specified parcel.  That provision allows a city in applying the redevelopment district test to deem a parcel as blighted (i.e., occupied by a substandard building) if the city or the developer has already removed a substandard building from the parcel and requests certification with three years.  The section extends that 3-year period through December 31, 2017. The city may elect to use the current value for purposes of calculating original net tax capacity for the parcels deemed occupied.  Effective upon local approval.

Section 12. City of Savage; TIF. City of Maple Grove; TIF. Grants special law authority to the city of Savage to create TIF districts (until June 30, 2020) under special rules in a defined area of the city. Before using this authority, the city must find that 80 percent of the defined area has one or more of the following conditions (a parcel is treated as wholly meeting the requirement if 70 percent of its area meets the requirement, except that a 30 percent test applies for the substandard building requirement): (1) peat or other geotechnical difficulties; (2) substantial fill is required for commercial development; (3) landfills, dumps or similar conditions; (4) quarries or gravel pits; (5) floodway; and (6) substandard buildings.

The city may create a new type of district – a soil deficiency district. To qualify, 80 percent of the area needs to have soils or terrain difficulties with estimated correction costs that exceed the fair market value of the property (but not counting the costs of roads and other public improvements that landowners can be assessed for).  These districts would be allowed to collect 20 years of increment and would be limited to spending increment on land acquisition and soils correction. Any parcel acquired with increment from the district must be sold at no less than fair market value. The five-year rule is extended to eight years and the pooling percentage is increased from 20 percent to 40 percent. Effective upon local approval.

Section 13. City of Shoreview; TIF. Authorizes the city of Shoreview to establish economic development TIF districts for business retention and expansion.  Increment from these districts may be used to assist qualified business, defined as businesses that:

  • Already are operating in Shoreview, that do not have any substantial operations in Minnesota, or that are relocating operations from another state;
  • Provide an increase in manufacturing, research, service, or professional jobs, at least 75 percent of which will pay wages 25 percent higher than the area median; and
  • Are not in retail sales or the provision of legal, medical, accounting, financial, entertainment, or similar services from the location

The duration of the districts are extended to 12 years and the nonqualifying space (e.g., general office space for a manufacturing facility) can be increased to 25 percent from the 15 percent limit under general law. Up to 20 percent of the increments can be deposited in a business retention or expansion fund the city establishes.  The city also is permitted to deposit increments from the pre-1990 district into this fund.  The fund can be used for the same types of projects, but is otherwise free of the restrictions that would apply to tax increments. Effective upon local approval.

Section 14. Workforce Housing Grants Pilot Program. Authorizes the commissioner of employment and economic development to establish a workforce housing grants pilot program to award grants to a city to be used for financing costs relating to the construction of or financing for market rate residential rental properties. Provides for application and allocation procedures and requires cities to report to the legislature specifying the projects that received grants under this section and the purposes for which the grant funds were used. $400,000 in FY15 and $1,600,000 in FY16 is appropriated from the general fund to DEED to administer and to make grants under this program. Effective the day following final enactment.

Article 7 

Lewis and Clark Regional Water System Project

Section 1. Lewis and Clark water project bonding. Authorizes the governing bodies of Luverne, Worthington, Nobles County and Rock County to issue bonds to acquire land or interests in land for, and design, engineer, and construct pipeline and other facilities and infrastructure necessary to complete the Lewis and Clark Regional Water System Project. The maximum amount of bonds is limited to an aggregate principal amount of $45,000,000, and the Lewis and Clark Joint Powers board shall allocate the limit among the four units of government.  The bonds may be issued without a referendum and are not subject to any limitations on net debt. Effective the day following final enactment without local approval.

Section 2. Debt service aid; Lewis and Clark joint powers board. Provides for an aid distribution to the Lewis and Clark Joint Powers Board equal to: (1) the principal and interest payable in the succeeding year for bonds issued under section 1 minus the sum of (2) the combined adjusted net tax capacity for Rock and Nobles County for the assessment year prior to the aid payable year multiplied by 1.5 percent, and (3) 50 percent of any federal aid received to fund the project in the calendar year. The board shall certify to the commissioner of revenue the principal and interest due in the succeeding calendar year by June 1 of the aid payable year and the commissioner shall calculate the aid payable and certify the aid before July 1. The aid shall be paid at the same time as other local government aids.

The board must allocate the aid to the municipalities in proportion to their principal and interest payments. If the 50 percent reduction from federal aid in clause 3 above eliminates the aid payment in a calendar year, the excess must be used to reduce the principal and interest in the succeeding year or years used to calculate aid.  If federal grants and aid received for the project exceed the total debt service payments, other than payments made with state aid, the just powers board must repay any excess to the commissioner of revenue for deposit into the general fund. The repayment must not exceed the sum of the state aid payments and any other grants made by the state for this project.  The authorization under section expires at the earlier of January 1, 2039, or when the bonds authorized under section 1 have been paid or defeased. Effective beginning with aids payable in 2015.

Section 3.  Worthington local sales tax; use of revenues.  Authorizes the city of Worthington to use amounts in excess of the initially authorized uses to fund its share of debt service on bonds for the Lewis and Clark Regional Water System Project, if the tax is extended under section 4.  Effective upon the city filing approval with the secretary of state. 

Section 4.  Worthington local sales tax; termination of taxes.  Authorizes the city of Worthington to extend its currently authorized one-half of one percent sales and use tax through 2039 to pay its share of debt service on bonds for the Lewis and Clark Regional Water System Project.  Effective upon the city filing approval with the secretary of state. 

Section 5.  Rock county local sales tax authorization.  Authorizes Rock County to impose a one-half of one percent sales and use tax by resolution.  The tax must be imposed county-wide unless the city of Luverne imposes a local sales tax under section 7, in which case the county tax would be imposed in the portion of the county outside the city of Luverne.  The proceeds of the tax must be used to fund the county’s share of debt service on bonds for the Lewis and Clark Regional Water System Project.  If the proceeds of the tax exceed the county’s debt service share obligations, revenues may be used to fund other capital projects in the county.  The tax terminates upon determination that the county’s debt service share on the project has been paid.  Effective upon the county filing approval with the secretary of state. 

Section 6.  Nobles county local sales tax authorization.  Authorizes Nobles county to impose a one-half of one percent sales and use tax by resolution.  The tax must be imposed county-wide unless the city of Worthington’s local tax has not expired, in which case the county tax would be imposed in the portion of the county outside the city of Worthington.  The proceeds of the tax must be used to fund the county’s share of debt service on bonds for the Lewis and Clark Regional Water System Project.  If the proceeds of the tax exceed the county’s debt service share obligations, revenues may be used to fund other capital projects in the county.  The tax terminates upon determination that the county’s debt service share on the project has been paid.  Effective upon the county filing approval with the secretary of state. 

Section 7.  City of Luverne local sales tax authorization.  Authorizes the city of Luverne to impose a one-half of one percent sales and use tax by ordinance.  The proceeds of the tax must be used to fund the city’s share of debt service on bonds for the Lewis and Clark Regional Water System Project.  If the proceeds of the tax exceed the city’s debt service share obligations, revenues may be used to fund other capital projects in the city.  The tax terminates upon determination that the city’s debt service share on the project has been paid.  Effective upon the city filing approval with the secretary of state.

Article 8

Miscellaneous

Section 1.  AURI Appropriation.  Removes language requiring the transfer of $1 million for the Agricultural Utilization Research Institute (AURI) from the general fund to the commissioner of revenue for deposit in a special revenue fund.  The proposed language would appropriate the amount from the general fund and not require deposit into a special revenue fund.

Section 2. Old Cedar Avenue Bridge. Designates and names Minnesota state bridge #3145 as the ‘Old Cedar Avenue Bridge’. This name applies to any renovation or reconstruction of the bridge and must be used in any publicly financed signage.

Section 3.  Notice of pending license revocation for nonpayment of taxes.  Requires a licensing authority (for professional and occupational licenses) to notify license holders by certified mail that their license may be revoked for failure to pay state tax of $500 or more or for failure to file tax returns.  The authority must send the notice within 10 days after it received notice from the Department of Revenue (DOR).  The notice must include a copy of the DOR notice, as well as information on how the licensee can obtain a tax clearance from DOR to avoid the revocation.  The licensing authority is required to revoke the license, unless it receives a tax clearance from DOR within 30 days after it received the original notice.  Effective July 1, 2014.

Section 4.  Notice and hearing.  Eliminates the requirement for DOR to send the notice to the licensee.  (This is replaced by the licensing authority sending the notice under section 1.)  Before DOR is allowed to notify the licensing agency it must (under present law) notify the licensee of its intent to require revocation and the licensee’s right to request a contested case hearing.  Effective July 1, 2014.

Section 5. Carlton County; levy for soil and water conservation district. Authorizes Carlton County to levy property taxes for the purposes of paying principal, interest and any costs associated with obtaining and servicing a loan to finance the planning, constructing, and equipping of an office and storage facility for the water and conservation district. The authority expires following the final payment of interest, principal and associated costs or if the district does not obtain the loan by May 1, 2017.  Effective upon local approval.

Section 6. Administrative appropriations.  Appropriates funds from the general fund to: (1) the commissioner of revenue for administering this act; (2) the commissioner of public safety for administering the volunteer retention stipend aid program; and (3) the commissioner of natural resources for the purpose of assisting counties in developing plans and providing training for watercraft inspectors under the new aquatic invasive species prevention aid program.

Article 9

Unsession

Sections 1 to 3.  References to “debt qualification plan.”  Amends section 16D.02, subdivisions 3 and 6, and section 16D.04, subdivision 3, to replace all references to debt qualification plans.  The definition of “debt qualification plan” is also repealed in the repealer section.  The department no longer uses debt qualification plans, but instead uses service level agreements.  Effective the day following final enactment.

Section 4.  References to management and budget.  Amends section 16D.04, subdivision 4, to remove references to management and budget.  The Department of Revenue contracts directly with collection entities.  Effective the day following final enactment.

Sections 5 and 6.  Notice requirements.  Amends section 16D.07 and section 16D.11, subdivision 1, to put all notice requirements in the same section.  The notice language currently contained in section 16D.11 is moved to section 16D.07.  An obsolete reference to management and budget is removed from section 16D.11, subdivision 1; management and budget is no longer involved in determining the collection cost amount.  An obsolete sentence appropriating collection costs collected by private agencies to referring agencies to pay collection fees is removed because collection fees to private agencies are now paid by the department.  Effective the day following final enactment.

Sections 7, 8, and 16.  References to “enterprise.”  Amends section 16D.11, subdivisions 3 and 7; and section 270A.03, subdivision 2, to remove references to the enterprise.  The definition of “enterprise” is repealed in the repealer section because there is no longer a separate unit within Revenue that collects only nontax debt.  The entire Collection Division collects both tax and nontax debt.  Effective the day following final enactment.

Section 9.  Reforestation areas, 1931.  Amends section 84A.20, subdivision 2, to eliminate obsolete tax references (to property tax base amounts in 1931) under a program allowing counties to apply for the state takeover of lands for reforestation.  Effective the day following final enactment.

Section 10.  Reforestation areas, 1933.  Amends section 84A.31, subdivision 2, to eliminate obsolete tax references (to property tax base amounts in 1933) under a program allowing counties to apply for the state takeover of lands for reforestation.  Effective the day following final enactment.

Section 11.  Drycleaner fee.  Amends section 115B.49, subdivision 4, to provide that sellers of dry cleaning solvents must file their returns and pay the tax on the same time and manner that they pay their sales tax.  This section is effective for fees due after June 30, 2014.

Section 12.  County road and bridge levy.  Amends section 163.06, subdivision 1, to eliminate an obsolete reference to the tax on money and credits.  This tax has not been imposed since the 1940s and was formally repealed in 1979.  Effective the day following final enactment.

Section 13.  State Board of Equalization.  Amends section 270.11, subdivision 1, to remove the unnecessary phrase, “which board of equalization is hereby continued.”  The remaining language provides that the commissioner continues as the State Board of Equalization.  Effective the day following final enactment.

Section 14.  State Board of Equalization meeting times/dates.  Amends section 270.12, subdivision 2, to streamline language and eliminate duplicative provisions. This section strikes paragraphs 2 and 5.  The language in those paragraphs provides that the board can reduce aggregate valuations. Paragraphs 1 and 3, which already provide that the board can increase aggregate valuations, are amended to provide that the board may add or deduct from aggregate valuation.  Effective the day following final enactment.

Section 15.  State Board of Equalization/treatment of public utility property.  Amends section 270.12, subdivision 4, to remove unnecessary language.  The provision provides that public utility property is treated as a separate class of property.  The stricken language states that this treatment is notwithstanding the fact that its class rate is the same as commercial-industrial property.  Effective the day following final enactment.

Section 17.  Return information of biotechnology and health sciences industry zone businesses.  Amends section 270B.14, subdivision 3, to remove data practices reference to the biotechnology and health sciences industry zone, which is repealed in the repealer section.  Effective the day following final enactment.

Section 18.  Notification requirements; sales and use taxes.  Amends section 270C.085, which requires the commissioner of revenue to electronically update sales-tax-permit-holders of changes in sales tax laws and interpretation and administration of those laws.  Because the commissioner established its notification system as required prior to December 31, 2009, the language requiring its completion by December 31, 2009, is no longer necessary.  Effective the day following final enactment.

Section 19.  Payment agreement fee.  Amends section 270C.52, subdivision 2, to remove obsolete language that indicates the payment agreement fee reflects the commissioner’s costs for entering into payment agreements.  When the payment agreement fee was initially proposed, it was a flat $25 fee that was adjusted annually to reflect the commissioner’s costs. It was subsequently changed to a flat $50 fee with no annual adjustment, but the language referencing the commissioner’s costs was not removed.  Effective the day following final enactment.

Section 20.  Exempt property.  Amends section 272.01, subdivision 1, to remove language exempting specific personal property, which is covered by the remaining general-exemption language for personal property.  Effective the day following final enactment.

Sections 21, 46, 52, 53, 56 and 64.  Telegraph companies.  Amends section 272.01, subdivision 3; 280.03; and 282.01, subdivision 6; 282.04, subdivision 4; 282.261, subdivision 5; and 290.015, subdivision 1, to remove obsolete references to telegraph companies (the outdated communication system of sending messages by telegram).  Effective the day following final enactment.

Section 22.  Cross reference. The cross reference in section 272.025, property tax filing requirement, to section 272.02, subdivision 1, is removed because that subdivision is being repealed.  The repealed subdivision is redundant language.  Effective the day following final enactment.

Section 23.  Utility personal property.  Amends section 272.027, subdivision 1, to eliminate a cross reference to a subdivision repealed in the repealer section and to a previously repealed subdivision.  Effective the day following final enactment.

Section 24.  Wind energy production tax.  Amends section 272.029, subdivision 6, to eliminate obsolete language governing past distributions of wind energy production tax revenues.  Effective the day following final enactment.

Section 25.  Assessor salaries.  Amends section 273.061, subdivision 6, to remove obsolete assessor salary scales and compensation for city and county assessors.  This language provides minimum compensation levels that are far below current assessor salaries.  Effective the day following final enactment.

Section 26.  Assessment books.  Amends section 273.10, to remove requirements for recording certain information in obsolete paper assessment books.  Counties electronically maintain the required information about the school district in which property lies. Effective the day after final enactment.

Section 27.  Income producing property.  Amends section 273.11, subdivision 13, to remove the phrase, “Beginning with the 1995 assessment.”  Because the 1995 assessment is long past, this phrase is now obsolete.  Effective the day following final enactment.

Section 28.  Private golf club guidelines.  Amends section 273.112, subdivision 6a, to remove obsolete language for mailing program guidelines.  The language required the commissioner of revenue to mail qualification guidelines related to outdoor recreation space for private golf courses to county attorneys and county assessors within 60 days of May 26, 1989, and for assessors to mail those guidelines to each golf club in the county within 15 days of receiving the guidelines from the commissioner.  Effective the day following final enactment.

Section 29.  State Board of Equalization meeting times/dates.  Amends a cross reference in section 273.1325, subdivision 2 that will be incorrect due to the elimination of paragraphs 2 and 5 in section 14.  Effective the day following final enactment.

Section 30.  Disparity reduction aid. Provides that disparity reduction aid (DRA) is not recalculated each time there is a change in class rates.

Section 31.  Exempt property records.  Amends section 273.18, to remove a reference to obsolete paper assessment books because these records are now maintained electronically.  The amendment also updates the statute’s year-of-reference to allow auditors to base their six-year cycle from 2010 rather than 1926.  Effective the day following final enactment.

Section 32.  Boards of appeal and equalization.  Amends section 274.01, subdivision 1, to remove unnecessary and obsolete language requiring the board to list omitted property “on a form appended to the assessment book.”  The reference to the assessment book is stricken because some boards use electronic systems.  Effective the day following final enactment.

Section 33.  Special boards of equalization.  Amends section 274.01, subdivision 2, to remove the phrase “including a city whose charter provides for a board of equalization” so that the first sentence of the subdivision will read: “The governing body of a city may appoint a special board of review.”  The removed language is superfluous.  Effective the day following final enactment.

Sections 34 and 35.  Computation of tax capacity.  Amends section 275.08, subdivisions 1a and 1d to remove obsolete language applicable to taxes payable in 1989 and 1990.  Effective the day following final enactment. 

Sections 36, 37 and 38.  Special levies.  Amends section 275.70, subdivision 5, to eliminate obsolete and minor provisions from the definition of special levies under general law.  This provision is not now in effect; the 2014 levy limits were imposed under a temporary, uncodified provision of law that only recognized selected special levies.  Also amends cross references in sections 275.74, subdivision 2; and 275.75.  Effective the day following final enactment.

Section 39 and 40.  Interest on delinquent property taxes.  Amends section 279.03, subdivisions 1 and 1a, to remove obsolete date-specific provisions that have passed and are no longer applicable.  Effective the day following final enactment.

Sections 41, 42, 43, 47, 49, and 51.  Tax judgments.  Amends section 279.16; 279.23; 279.25; 280.07; 281.03; and 281.327, to remove obsolete references to a paper judgment book.  While these paper records were once necessary for recording and tracing property tax judgments, these records are now maintained electronically.  Effective the day following final enactment.

Section 44.  Installment payments for tax forfeited property.  Amends section 279.37, subdivision 2, to eliminate obsolete references to 1941 statutes, and replace those references with references to current statutes.  Effective day following final enactment.

Sections 45 and 48.  Tax judgment sales.  Amends  section 280.001 and 280.11, to remove obsolete date-specific language related to public sales of property against which there is a tax judgment and a provision prohibiting the assignment of the state’s interest in a parcel of land after it has been bid in for the state, as well as to remove obsolete references to telegraphs.  Effective the day following final enactment.

Section 50.  Redemption periods.  Amends section 281.17, to remove obsolete redemption provisions for land in the Loring Park neighborhood for redemption periods beginning after June 30, 1991, but before July 1, 1996.  Effective the day following final enactment.

Section 54.  Repurchase of tax-forfeited property.  Amends section 282.261, subdivision 2, to remove obsolete date-specific language.  Effective the day following final enactment.

Section 55.  Service fee for repurchase of tax-forfeited land.  Amends section 282.261, subdivision 4, by removing the obsolete provision that the statute applies to repurchase applications received after July 1, 1985, as the statute has long been in effect.  Effective the day following final enactment.

Section 57.  Forfeited lands.  Amends section 282.322 to remove obsolete references to session laws.  Effective the day following final enactment.

Section 58.  Documentary stamps.  Amends section 287.30, to remove reference to obsolete deed tax documentary stamps, which are no longer used to reflect that deed tax has been paid.  Effective the day following final enactment.

Section 59.  Requirement to pay estimated tax.  Amends section 289A.25, subdivision 1, to remove duplicative language that says estimated payments are not required if the estimated tax is less than $500.  This language is also found in 289A.25, subdivision 4.  Effective the day following final enactment.

Section 60.  Domestic Corporation.  Amends section 290.01, subdivision 5, to eliminate references to foreign sales corporations, which no longer exist under federal law.  Effective for tax years beginning after December 31, 2013.

Sections 61 and 67.  Obsolete modifications for intangible drilling costs.  Amends  sections 290.01, subdivision 19d, and 290.0921, subdivision 3, to remove obsolete modifications for intangible drilling costs incurred in table years prior to 1987.  Effective for taxable years beginning after December 31, 2013.

Sections 62, 67, and 70.  Basis modifications.  Amends section 290.01, subdivision 19f to remove obsolete language related to the Accelerated Cost Recovery System (ACRS).  All assets placed in service using ACRS have now been completely depreciated. Minnesota now uses the same depreciation schedule as federal law (Modified Accelerated Cost Recovery System - MACRS).  Assets depreciated under ACRS and the Minnesota law modifications now have the same basis and there are no longer any taxpayers who need to make this modification.  For the same reasons, section 290.01, subdivision 19e is repealed in this bill.  Cross references to subdivision 19e are also struck from sections 290.01, subdivision 19d, and 280.0921 subdivision 3 and 290.9728, subdivision 2.  Effective for taxable years beginning after December 31, 2013.

Section 63.  Corporate taxable income.  Amends section 290.01, subdivision 29, to remove the exemption of income attributable to operating in biotechnology and health sciences industry zone from the definition of taxable income of a corporation.  The biotechnology zone program is repealed in the repealer section.  Effective for taxable years beginning after December 31, 2013.

Section 65.  Annual accounting period.  Amends section 290.07, subdivision 1, to repeal obsolete language regarding accounting periods.  Because Minnesota starts with federal taxable income (290.01, subdivision 19), income taxpayers must use the same accounting periods for Minnesota purposes as used for federal purposes.  Effective for taxable years beginning after December 31, 2013.

Section 66.  Accounting methods.  Amends section 290.07, subdivision 2, to repeal obsolete language regarding accounting methods.  Because we start with federal taxable income (290.01, subdivision 19), income taxpayers must use the same accounting method for Minnesota purposes as used for federal purposes.  Effective for taxable years beginning after December 31, 2013.

Section 67.  Corporate alternative minimum taxable income.  Amends section 290.0921, subdivision 3 to remove the reference to intangible drilling costs and the exclusion of income attributable to operating in a biotechnology and health sciences industry zone from the definition of alternative minimum taxable income of a corporation.  The biotechnology zone program is repealed in the repealer section.  Effective for taxable years beginning after December 31, 2013.

Section 68.  Minimum fee calculation.  Amends section 290.0922, subdivision 3, to eliminate the exemption for biotechnology and health science industry zone property and payroll factors from the minimum fee calculation.  The biotechnology zone program is repealed in the repealer section.  Effective for taxable years beginning after December 31, 2013.

Section 69.  Net operating loss carryover.  Amends section 290.095, subdivision 3, to remove obsolete language regarding net operating losses incurred in taxable years beginning before January 1, 1987, which allowed five-year carryovers and three-year carrybacks.  These periods are now complete.  The remaining language allows losses incurred in taxable years beginning after January 1, 1987, to be carried over for fifteen years.  Effective for taxable years beginning after December 31, 2013. 

Section 71.  Admissions.  Amends section 297A.61, subdivision 3, to remove the term “Turkish bath” because they are considered “steam baths” which are already specifically taxable under this statute, making “Turkish bath” redundant.  Effective the day following final enactment.

Section 72.  Nonprofit tickets or admissions.  Amends section 297A.70, subdivision 10, which provides a sales tax exemption for tickets or admissions to events sold by qualifying nonprofit organizations.  The amendment deletes language that governed the phase in of the requirement that the nonprofit’s annual revenue includes a fixed percentage of voluntary contributions.  The fixed percentage phased in from 3 percent to 5 percent.  Effective the day following final enactment. 

Sections 73, 74 and 75.  Exemption refunds.  Amends section 297A.75, subdivision 1, to remove the refund provision for building materials for the Long Lake Conservation Center.  Construction of that facility is complete.  Also removes a refund provision relating to building materials for a meat processing facility that was never built.  Amends cross references found in section 297A.75, subdivisions 2 and 3.  Amends section 297A.75, subdivision 3, to delete language regarding construction material and equipment refund limits for the Central Corridor Light Rail line for tax years 2010 and 2011.  These refunds have already been paid.  Also deletes language providing that refund applications by the Metropolitan Council or the Department of Transportation for equipment operations and Central Corridor Light Rail must not be issued until after July 1, 2009.  Because 2009 is past, this language is obsolete.  Effective the day following final enactment.

Section 76.  Deposit of revenues.  Amends  section 297A.94, clause (e), to remove deposit percentages that relate to past years 2001, 2002, 2003, and 2004 for the deposit of Lottery in lieu taxes.  Effective the day following final enactment.

Section 77.  Allocation of revenue.  Amends section 297B.09 subdivision 1, to remove deposit allocation provisions that relate to past years 2007, 2008, 2009, 2010 and up to June 30, 2011, for motor vehicle sales tax.  Effective the day following final enactment.

Section 78.  Cigarette and tobacco products license application forms.  Amends section 297F.03, subdivision 2, to delete a list of information required on applications for cigarette and tobacco product licenses (e.g. name, address, type of business entity, and any other information).  The remaining language provides for a form as prescribed by the commissioner.  Effective the day following final enactment.

Section 79.  Solid waste management tax.  Amends section 297H.06, subdivision 2, to eliminate a duplicative reporting requirement for facilities handling source-separated compostable waste.  

Section 80.  Life insurance.  Amends section 297I.05, subdivision 14, to delete superfluous language.  The deleted language provides phased-in tax rate for insurers who sell life insurance for different periods starting in January 1, 2006, and ending December 31, 2008.  Since the rate during these periods is no longer relevant, only the current rate of 1.5 percent should be provided.  Effective the day following final enactment.

Section 81.  Aggregate tax. Eliminates references to specific counties in the aggregate tax statute.  Under present law, any county is now authorized to impose this tax.  Effective on January 1, 2015.

Section 82. Assessor salaries.  Removes obsolete assessor salary scales and compensation for city and county assessors.  This language provides minimum compensation levels that are far below current assessor salaries.  Effective the day following final enactment.

Section 83.  Police and fire retirement supplemental aid.  Amends section 423A.022, subdivision 3, to remove irrelevant language what was erroneously left in the bill that enacted the statute in 2013.  The bill was amended through the legislative process, and this language inadvertently remained from an early version of that bill.  Effective the day after final enactment.

Section 84. Acceptance of gifts.  Eliminates the market value limitations on the types of second, third, and fourth class cities that are authorized to receive gifts, including gifts that are partially repaid as annuities.

Section 85.  Compact development TIF districts.  Amends section 469.176, subdivision 1b, to eliminate reference to compact development TIF districts.  The authority to establish these districts expired in 2012 and was apparently never used.  Effective the day following final enactment.

Section 86.  TIF administrative expenses.  Amends section 469.176, subdivision 3, to eliminate obsolete language in the TIF statute governing administrative expenses.  This would remove language that applied to districts that requested certification between July 31, 1979, and June 30, 1982, and is no longer applicable.  Effective the day following final enactment. 

Section 87.  TIF authority for biotechnology and health science industry zones.  Amends section 469.1763, subdivision 2 to clarify that the special TIF authority for biotechnology and health science industry zones (which are being repealed in the repealer section) can be used until those zones expire.  This authority is not dependent on state funding of the zone and remains viable until the zone, which has subzones in Minneapolis, St. Paul, and Rochester, expires at the end of 2015.  Effective the day following final enactment and applies to all districts, regardless of when the request for certification was made.

Section 88.  Metropolitan Airports Commission (MAC) bonds.  Amends section 473.665, subdivision 5, to eliminate an obsolete reference to the tax on money and credits in a MAC bonding statute.  This tax has not been imposed since the 1940s and was formally repealed in 1979.  Effective the day following final enactment.

Section 89.  County program aid.  Amends section 477A.0124, subdivision 5, to remove outdated provisions for 2009 county program aid to Pine County, which has already been paid and is no longer effective.  Effective the day following final enactment.

Sections 90.  Local government aid.  Amends section 477A.014, subdivision 1, to remove obsolete references to road accident factor, which is no longer used as a factor for calculating local aid.  Effective the day following final enactment.

Sections 91 and 92.  County Aid.  Amends section 611.27, subdivisions 13 and 15, by removing cross-references to section 477A.0124, subdivision 1, which is being repealed in this bill.  These provisions in section 611.27, instruct the commissioner of revenue to pay for county program aid and court transcripts using the county aid funds under section 477A.0124, subdivision 1, which only applied to county program aid for 2004.  Effective the day after final enactment.

Section 93.  Revisor’s Instruction.  Instructs the revisor of statutes to make all necessary cross references in Minnesota Statutes and rules and other changes consistent with the changes made in this bill.

Section 94.  Repealer.  Repeals the following statutes and rules:

16D.02, subdivision 5

Defines “debt qualification plans,” which are no longer used.  The department uses service level agreements.  Effective the day following final enactment.

16D.02, subdivision 8

Defines “enterprise,” which was a separate unit within Revenue that collected only nontax debt.  Now, the entire Collection Division collects both tax and nontax debt, making any reference to “enterprise” obsolete.  Effective the day following final enactment.

16D.11, subdivision 2

Relating to obsolete computation and requirement to return debts.  This subdivision set the initial percentage rate for calculating collection costs, and this rate is now obsolete.  The current rate and method of determining the rate are contained in subdivision 7 of this section.  Debts are no longer returned to the commissioner when collection cost cancellation is requested by the debtor.  Instead, the commissioner resolves the request and notifies the agency of the resolution.  Effective the day following final enactment.

270C.53

Repeal of a provision that gives the commissioner the authority to abate the liability of a taxpayer who is not able to pay a delinquent tax liability if the taxpayer agrees to perform uncompensated public service.  This program has not been used in a number of years, and it is not anticipated that the program will be used in the future as it was rarely used and found to be difficult to administer and track.  Effective the day following final enactment.

270C.991, subdivision 4

Repeals the Property Tax Working Group that completed its duties in 2013.  Effective the day following final enactment.

272.02, subdivisions 1 and 1a

Repeals redundant language stating the property listed in section 272.02 is exempt and these exemptions are subject to the limitations of section 272.025.  This language is redundant, as each subdivision in the section specifically states each identified type of property is exempt, and section 272.025 already states that it is applicable to section 272.02.  Effective the day following final enactment.

272.02, subdivisions 43, 48, 51, 53, 67, 72 and 82

Repeals exemptions for electric generation facilities that required that these facilities be built by the specific date in each subdivision, and the facilities that were intended to be covered by these exemptions were never built.  No taxpayers are covered by the subdivisions that would be repealed, and the time-limiting provisions prevent any taxpayer from claiming these exemptions in the future.  These exemptions were for facilities in Fillmore County (subdivision 48); Waseca County (subdivisions 51 and 72); City of Minneapolis (subdivisions 53 and 82); and Dakota County (subdivision 67).  Effective the day following final enactment.

272.027, subdivision 2

Repeals personal property tax exemption for public utility project in Itasca County.  Plans to construct the plant were cancelled in 2002.  Effective the day following final enactment.

272.031

Repeals unnecessary language specifying that abbreviations may be used in property tax records, but ditto marks and the abbreviation “do” may only be used as to a property owner’s name and the addition or the subdivision in which property lies.  Effective the day following final enactment.

273.015, subdivision 1

Repeals unnecessary language specifying that property tax statements must be rounded to the nearest even cent, such as $--.02, $--.54, or $--.78.  Counties round property tax to the nearest dollar, which makes this provision obsolete.  Effective the day following final enactment.

273.03, subdivision 3

Repeals unnecessary language specifying that other laws that are not inconsistent with certain statutes continue in full force and effect.  This states a basic tenet of statutory interpretation and is therefore superfluous.  Effective the day following final enactment.

273.075

Repeals obsolete provision related to a one-time appropriation in 1971 for payment of assessor instructional courses at the University of Minnesota, which are no longer offered.  Effective the day following final enactment.

273.1103

Repeals net debt conversion from full and true market value to assessed market (this was completed in the 1970s and replaced by net tax capacity in 1989).

273.13, subdivision 21a

Repeals obsolete definitions of gross and net class rate.

273.1383

Repeals provisions providing for replacement aid to counties affected by flooding in 1997.  These counties included Polk, Clay, Kittson, Marshall, Norman, and Wilkin.  This provision is obsolete, because it only applied to assessment years 1998, 1999, and 2000, and provided for general fund appropriations in fiscal years 2000, 2001, and 2002, which have passed.  Effective the day following final enactment.

273.1386

Repeals provisions providing for replacement aid to cities affected by flooding in 2002. These counties included Roseau, Becker, Beltrami, Clay, Clearwater, Itasca, Kittson, Koochiching, Lake of the Woods, Mahnomen, Marshall, McLeod, Norman, Pennington, Polk, Red Lake, and Wright.  This provision is obsolete, as it only provided for flood aid to be paid in 2004.  This statute’s provision that reduced local aid to affected cities that received the flood aid in fiscal year 2006 is similarly obsolete.  Effective the day following final enactment.

273.1398, subdivision 4b

Repeals obsolete provision relating to the transfer of responsibility for court costs from counties to the state.

273.80

Repeals the distressed homestead reinvestment property tax exemption, which has sunset as a function of statute.  The statute required, among other factors, that a property qualify for the exemption by May 1, 2003. Additionally, a property could only qualify for the exemption for five years after initially qualifying.  Accordingly, the latest that a property owner could have claimed the exemption was in 2008.  Effective the day following final enactment.

275.77

Repeals expired date-specific language regarding maintenance of effort and matching fund requirements.  This obsolete provision temporarily suspended any new or increased maintenance of effort or matching fund requirements until July 1, 2011.  Effective the day following final enactment.

279.32

Obsolete provision related to lands with delinquent tax repurchased before 1936, which allowed a county to take certain action by February 1, 1945, to list such property as delinquent for taxes for 1942.  Effective the day following final enactment.

281.173, subdivision 8

Repeals the section’s subdivision providing that the statute, relating to redemption periods for certain abandoned properties, is applicable only to tax judgment sales on or after April 13, 1996.  Because the statute remains in effect, and the effective date has passed, this subdivision is obsolete.  Effective the day following final enactment.

281.174, subdivision 8

Repeals the section’s subdivision providing that the statute, relating to redemption periods for certain vacant properties, is applicable only to tax judgment sales on or after April 13, 1996.  Because the statute remains in effect, and the effective date has passed, this subdivision is obsolete.  Effective the day following final enactment.

281.328

Obsolete provision validating state assignment certificates issued before January 1, 1972, even if such certificates have not been recorded within seven years of being issued.  Effective the day following final enactment.

282.10

Obsolete provision authorizing reimbursement to the purchaser of tax-forfeited property made before 1940 that are invalidated by a court, if the parcel was sold pursuant to 1935 law.  Effective the day following final enactment.

282.23

Obsolete provision providing that the sale of property that was forfeited to the state in 1926 or 1927 shall be conducted in the usual manner.  Effective the day following final enactment.

287.20, subdivision 4

Repeals the definition of “documentary stamps,” which is obsolete because such stamps are no longer used to verify that deed tax has been paid on recorded conveyances.  Effective the day following final enactment.

287.27, subdivision 2

Repeals provision authorizing the use of tax meter machines, used to affix documentary stamps, which are obsolete, as counties no longer use either tax meter machines or documentary stamps.  Effective the day following final enactment.

290.01, subdivision 4b

Repeals the definition of “mutual property and casualty insurance company,” which is no longer used in Chapter 290 since its reference was repealed from section 290.05 in 2001.  Effective the day following final enactment.

290.01, subdivision 19e

Repeals obsolete language related to the Accelerated Cost Recovery System (ACRS) because all assets placed in service using ACRS have now been completely depreciated.  Effective for taxable years beginning after December 31, 2013.

290.01, subdivision 20e

Repeals a duplicate modification in computing taxable income of the estate of a decedent. Federally, estates are allowed to deduct expenses either on the fiduciary income tax return or estate tax return, but not both.  Minnesota follows this election by operation of section 290.01, subdivision 19 (income tax) and section 291.03, subdivision 1a (estate tax).  The duplication in section 290.01, subdivision 20e is not necessary.  Effective the day following final enactment.

290.0674, subdivision 3

Repeals the prohibition against claiming the education credit against the alternative minimum tax.  This prohibition has not affected any taxpayers.  A similar prohibition concerning the working family credit was repealed in 2003.  Effective for taxable years beginning after December 31, 2013.

290.191, subdivision 4

Repeals single sales apportionment by mail order sales companies – this is obsolete (as of tax year 2014), since single sales apportionment applies to all businesses.

290.33

Repeals a provision that explains how to administer a tax imposed in the middle of a calendar year.  Introduced in the 1930s, this section is no longer relied on.  Instead, each law change is enacted with an appropriate effective date.  Effective for taxable years beginning after December 31, 2013.

295.52, subdivision 7

Repeals language that deals with a temporary tax rate reduction of the MinnesotaCare tax for the years 1998 to 2003.  The current tax rate is stated in section 295.52, subdivisions 1- 4.  Effective the day following final enactment.

297A.666

Streamlined Sales and Use Tax Agreement amnesty provision for remote sellers who voluntary agree to register and collect sales tax.

297A.71, subdivision4

Repeals an obsolete sales tax construction exemption for the Lake Superior Center, which was built in 2000.  Effective the day following final enactment.

297A.71, subdivision 5

Repeals an obsolete sales tax construction exemption for the Science Museum of Minnesota, which was built in 1999.  Effective the day following final enactment.

297A.71, subdivision 7

Repeals an obsolete sales tax construction exemption enacted in 1997 for an alfalfa biomass facility, which was never built.  Effective the day following final enactment.

297A.71, subdivision 9

Repeals an obsolete sales tax construction exemption for a direct satellite broadcasting facility. Effective the day following final enactment.

297A.71, subdivision10

Repeals a sales tax construction exemption that applies to Northwest Airlines in 1991 to build a heavy maintenance facility in Duluth, Minnesota.  Effective the day following final enactment.

297A.71, subdivision 17

Repeals an obsolete sales tax construction exemption for the Long Lake Conservation Center located in Aitkin County because the construction and improvements for this center are complete.  Effective the day following final enactment.

297A.71, subdivision 18

Repeals an obsolete sales tax construction exemption for a soybean oilseed processing and refining facility for CHS, Inc. in Marshall, Minnesota because construction was completed in 2002-2003.  Effective the day following final enactment.

297A.71, subdivision 20

Repeals a sales tax construction exemption enacted in 1999 for the construction of a cattle slaughterhouse facility that was completed in December, 2001.  Effective the day following final enactment.

297A.71, subdivision 32

Repeals an obsolete the sales tax construction exemption for the construction of the Walker Art Center, which was completed in April 2005.  Effective the day following final enactment.

297A.71, subdivision 41

Repeals an obsolete the sales tax construction exemption for a meat processing facility that was never built.  Effective the day following final enactment. 

297F.08, subdivision 11

Repeals obsolete language in cigarette tax dealing with railroad sleeping car companies as distributors.  There are no licensed distributors who identify themselves as railroad sleeping car companies.  Effective the day following final enactment.

297H.10, subdivision 2

Repeals solid waste management penalty for failure to file.  Subdivision 1 imposes the same failure to file penalty as applies for sales tax, which is a penalty of 5 percent of the tax not paid.  Effective the day following final enactment.

469.174, subdivision 10c

Definition of compact development TIF districts – the authority to establish these districts expired in 2012.  Effective the day following final enactment.

469.175, subdivision 2b

Sunset of compact development TIF district authority.  Effective the day following final enactment.

469.176, subdivision 1i

Permitted use of increments for compact development TIF districts.  Effective the day following final enactment.

469.1764

Pre-1982 TIF districts – these districts have now all been decertified; any remaining increments would be required to be returned.  Effective the day following final enactment.

469.177, subdivision 10

Distribution of TIF revenues generated by referendum levies to school districts – this provision is obsolete since all of these operating referenda levies are now spread on market value, which do not generate tax increment.  Effective the day following final enactment.

477A.0124, subdivisions 1 and 6

Repeals provisions providing for county program aid in 2004, 2011, and 2012.  Because these aid payments have been made and the provisions have no ongoing effects, these provisions are obsolete.  Effective the day following final enactment.

505.173

Repeals obsolete authority for local governments to correct defects in plats.  The authority granted in this statute expired in 1953.  Effective the day following final enactment.

Laws 1993, ch. 375, art. 9, section 47

Repeals authorization for the city of Garrison to impose a local, general sales tax; this authority was never used.

Minnesota Rules, 8002.0200, subpart 8

Repeals a rule related to individual net operating loss, which is obsolete as a result of numerous law changes since the rule was promulgated in the 1970’s.  Effective the day following final enactment.

Minnesota Rules, 8007.0200

Repeals a rule regarding changes in accounting methods, which is obsolete because income taxpayers must use the same accounting periods for Minnesota purposes as used for federal purposes.  Effective for taxable years beginning after December 31, 2013.

Minnesota Rules, 8100.0800

Repeals an obsolete rule relating to the phase-in of utility property valuation changes due to amendments made to Minnesota Rule 8100 (Utility Valuation).  Valuation changes between the new and old rule were phased in for assessment years 2007-2009.  This rule is no longer needed because for assessment years 2009 and subsequent years the current rule is fully in place.  Effective the day following final enactment.

Minnesota Rules, 8130.7500, subpart 7

Repeals an obsolete subpart concerning microfilm reproductions of records.  Microfilm is an outdated technology, and taxpayers no longer store records using microfilm.  Effective the day following final enactment.

Also repeals the following provisions related to the biotechnology and health science industry zone program, which under current law is set to sunset December 31, 2015, but for which no tax benefits have been available since 2005:

  • Section 290.06, subdivision 30 (biotechnology and health science industry zone job credit); and Section 290.06, subdivision 31 (biotechnology and health science industry zone research and  development credit) are repealed effective for taxable years beginning after December 31, 2013.
  • Section 289A.56, subdivision 7 (interest payable on biotechnology and health science industry zone sales tax refunds);
  • Section 297A.68, subdivision 38 (biotechnology and health science industry zone sales tax exemption);
  • Section 469.330 (biotechnology and health science industry zone definitions);
  • Section 469.331 (biotechnology and health science industry zone development plans);
  • Section 469.332 (biotechnology and health science industry zone zone limits);
  • Section 469.333 (applications for biotechnology and health science industry zone designations);
  • Section 469.334 (designation of biotechnology and health science industry zones);
  • Section 469.335 (application for biotechnology and health science industry zone tax benefits);
  • Section 469.336 (tax incentives available in biotechnology and health science industry zones);
  • Section 469.337 (corporate biotechnology and health science industry zone franchise tax exemption);
  • Section 469.338 (biotechnology and health science industry zone jobs credit);
  • Section 469.339 (biotechnology and health science industry zone research credit);
  • Section 469.340 (repayment of biotechnology and health science industry zone tax benefits); and
  • Section 469.341 (biotechnology and health science industry zone performance and remedies) are repealed effective the day following final enactment.

 

Article 10

Department Technical and Policy - Property Tax Provisions

Section 1. Clerical corrections on state assessed values.  Allows the commissioner to make clerical corrections to state assessed values until December 31 of the assessment year.  Effective the day following final enactment.

Section 2. Clerical corrections on wind energy production.  Allows the commissioner to make clerical corrections relating to Wind Energy Production amounts up until December 31 of the year.  Effective the day following final enactment.

Section 3. Clerical corrections.  Allows county assessors to make clerical corrections relating to personal as well as real property valuations.  Effective the day following final enactment.

Section 4. Class 4d. Updates a reference to a classification change made in the 2013 omnibus tax bill relating to class 4d properties.

Section 5. School district adjusted net tax capacity reporting deadline.  Changes the deadline for the Department of Revenue to file its annual adjusted net tax capacity report from June 15 to June 30.  Effective January 1, 2014.

Section 6. Clerical corrections on pipeline values.  Allows the commissioner to make clerical corrections to state assessed pipeline values until December 31 of the assessment year.  Effective the day following final enactment.

Section 7. Clerical corrections on transmission line values.  Allows the commissioner to make clerical corrections to transmission line values until December 31 of the assessment year.  Effective the day following final enactment.

Section 8. Clerical corrections on state assessed values.  Allows the commissioner to make clerical corrections to state assessed values until December 31 of the assessment year.  Effective the day following final enactment.

Section 9. Local Board of Appeal and Equalization (LBAE) meeting places.  Allows LBAEs to meet at a central location within the county or at the office of the town or city clerk.  Current law requires the meetings be held at the office of the clerk.  Effective the day following final enactment.

Section 10. Certification and training dates for Local Boards of Appeals and Equalization (LBAEs).  Changes the date by which the LBAEs must provide proof that they have complied with training requirements from December 1 to February 1.  Also changes the deadline from December 1 to February 1 for local boards whose powers are transferred to the county to file the required resolutions and proofs of compliance with training requirements to the county assessor in order to have their powers restored.  Effective beginning with LBAE meetings held after February 1, 2016.

Section 11. Amortization aid reference.  Corrects an internal reference to a repealed subdivision by providing the appropriate subdivision.  Effective retroactively from June 1, 2013, the date that section 423A.02, subdivision 1, became effective.

Section 12. Revisor’s instruction.  Instructs the revisor to replace the term “class rate” with the term “classification rate” wherever it appears in statute.

 

Article 11

Department Policy and Technical - Income and Franchise; Sales and Use

Section 1.  Procedure to request abatement.  Clarifies that taxpayers requesting abatement of penalties may at the same time request abatement of related interest and the additional tax charge.  Under current law the commissioner may abate all these items.  Effective the day following final enactment.

Section 2.  Limitations period for assessment.  Extends the time period in which the commissioner may make a personal liability assessment to within one year of a final administrative or judicial determination of the underlying business tax.  Current law limits the commissioner to make a personal liability assessment within the prescribed period of limitations for assessing the underlying business tax, or within one year after the date of an order assessing the underlying tax, whichever period expires later, with the result that the personal liability assessment must be made before the final determination of the amount of the underlying business tax.  Effective the day following final enactment.

Section 3.  Withholding tax return due dates.  Changes the due date of the fourth quarter withholding tax return from February 28 to January 31, or to February 10 if all withholding deposits for the quarter have been timely made.  This change makes the state fourth quarter withholding tax due date the same as the federal due date. Effective for returns due after January 1, 2016.  Also relieves some seasonal employers from having to file withholding tax returns for periods of anticipated inactivity, unless they pay wages during that period.  Effective for wages paid after December 31, 2015.

Section 4.  Determination of sales factor; corporate apportionment.  Strikes a reference in the sales factor to sales of tangible personal property made within this state that limited it to taxpayers with nexus in Minnesota.  Effective the day following final enactment.  

Section 5.  Dyed fuel. Clarifies that dyed biodiesel and dyed biodiesel blends are included in the definition of dyed fuel.  Effective the day following final enactment.

Section 6.  Special revenue account appropriation.  Provides annual appropriation language for the amounts the commissioner of revenue is authorized to deduct as reimbursement of its indirect costs for administering the collection and remittance of the prepaid wireless E911 fee and the prepaid wireless telecommunications access Minnesota fee.  Effective retroactively from January 1, 2014, the date that the fees took effect.

Section 7.  Contribution in aid of construction.  Retroactively amends the effective date for a provision enacted in Laws 2013, Chapter 143 that provided that payments to cooperative electric associations or public utilities as a contribution in aid of construction are not retail sales to be the day following final enactment (May 23, 2013), rather than July 1, 2013.

Section 8.  Repealer.  Florists and nurseries: Repeals Minnesota Rules 8130.8900, subpart 3, to delete language regarding sourcing of telegraphic orders by florists and nurseries for sales tax purposes that is obsolete since sourcing rules for florists were added to the statutes in 2011.  Effective the day following final enactment.  Aircraft registration: Repeals Minnesota Rule 8130.9500 in its entirety, as the reporting and registration requirements in the rule are obsolete. Aircrafts are now registered through the Office of Aeronautics, Department of Transportation, by using its aircraft registration application and procedures.  Effective the day following final enactment.

 

ESS/NPB/JP/SM:tg

 
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